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HomeMy WebLinkAboutREF Round IX Application HEAT - signedRenewable Energy Fund Round IX Grant Application – Heat Projects AEA 15003 Page 1 of 22 7/8/15 Application Forms and Instructions This instruction page and the following grant application constitutes the Grant Application Form for Round VIII of the Renewable Energy Fund Heat Projects only. If your application is for energy projects that will not primarily produce heat, please use the standard application form (see RFA section 1.5). An electronic version of the Request for Applications (RFA) and both application forms are available online at: http://www.akenergyauthority.org/Programs/Renewable-Energy- Fund/Rounds#round9.  If you need technical assistance filling out this application, please contact Shawn Calfa, the Alaska Energy Authority Grants Administrator at (907) 771-3031 or at scalfa@aidea.org.  If you are applying for grants for more than one project, provide separate application forms for each project.  Multiple phases (e.g. final design, construction) for the same project may be submitted as one application.  If you are applying for grant funding for more than one phase of a project, provide milestones and budget for each phase of the project.  In order to ensure that grants provide sufficient benefit to the public, AEA may limit recommendations for grants to preliminary development phases in accordance with 3 ACC 107.605(1).  If some work has already been completed on your project and you are requesting funding for an advanced phase, submit information sufficient to demonstrate that the preceding phases are completed and funding for an advanced phase is warranted. Supporting documentation may include, but is not limited to, reports, conceptual or final designs, models, photos, maps, proof of site control, utility agreements, power sale agreements, relevant data sets, and other materials. Please provide a list of supporting documents in Section 11 of this application and attach the documents to your application.  If you have additional information or reports you would like the Authority to consider in reviewing your application, either provide an electronic version of the document with your submission or reference a web link where it can be downloaded or reviewed. Please provide a list of additional information; including any web links, in section 12 of this application and attach the documents to your application. For guidance on application best practices please refer to the resource specific Best Practices Checklists; links to the checklists can be found in the appendices list at the end of the accompanying REF Round IX RFA.  In the sections below, please enter responses in the spaces provided. You may add additional rows or space to the form to provide sufficient space for the information, or attach additional sheets if needed. REMINDER:  Alaska Energy Authority is subject to the Public Records Act AS 40.25, and materials submitted to the Authority may be subject to disclosure requirements under the act if no statutory exemptions apply.  All applications received will be posted on the Authority web site after final recommendations are made to the legislature. Renewable Energy Fund Round IX Grant Application – Heat Projects AEA 15003 Page 2 of 22 7/8/15  In accordance with 3 AAC 107.630 (b) Applicants may request trade secrets or proprietary company data be kept confidential subject to review and approval by the Authority. If you want information to be kept confidential the applicant must: o Request the information be kept confidential. o Clearly identify the information that is the trade secret or proprietary in their application. o Receive concurrence from the Authority that the information will be kept confidential. If the Authority determines it is not confidential it will be treated as a public record in accordance with AS 40.25 or returned to the applicant upon request. Renewable Energy Fund Round IX Grant Application – Heat Projects AEA 15003 Page 3 of 22 7/8/15 SECTION 1 – APPLICANT INFORMATION Please specify the legal grantee that will own, operate and maintain the project upon completion. Name (Name of utility, IPP, local government or other government entity) City and Borough of Sitka Type of Entity: City and Borough Government Fiscal Year End: June 30 Tax ID # Tax Status: ☐ For-profit ☐ Non-profit ☒ Government (check one) Date of last financial statement audit: Mailing Address: Physical Address: City and Borough of Sitka Same 100 Lincoln Street Sitka, Alaska 99835 Telephone: Fax: Email: (907) 747-3294 (907) 747-4779 renee.wheat@cityofsitka.org 1.1 APPLICANT POINT OF CONTACT / GRANTS MANAGER Name: David Longtin Title: Senior Engineer Mailing Address: 100 Lincoln Street Sitka, Alaska 99835 Telephone: Fax: Email: 907-747-1883 907-747-3158 david.longtin@cityofsitka.org 1.1.1 APPLICANT SIGNATORY AUTHORITY CONTACT INFORMATION Name: Mark Gorman Title: Administrator Mailing Address: 100 Lincoln Street Sitka, Alaska 99835 Telephone: Fax: Email: 907-747-1808 907-747-7403 mark.gorman@cityofsitka.org 1.1.2 APPLICANT ALTERNATE POINTS OF CONTACT Name Telephone: Fax: Email: Michael Harmon 907 747-1823 907 747-3158 michael.harmon@cityofsitka.org Dan Tadic 907 747-1807 907 747-3158 dan.tadic@cityofsitka.org 1.2 APPLICANT MINIMUM REQUIREMENTS Please check as appropriate. If you do not to meet the minimum applicant requirements, your application will be rejected. Renewable Energy Fund Round IX Grant Application – Heat Projects AEA 15003 Page 4 of 22 7/8/15 1.2.1 As an Applicant, we are: (put an X in the appropriate box) ☐ An electric utility holding a certificate of public convenience and necessity under AS 42.05, or ☐ An independent power producer in accordance with 3 AAC 107.695 (a) (1), or ☒ A local government, or ☐ A governmental entity (which includes tribal councils and housing authorities) 1.2 APPLICANT MINIMUM REQUIREMENTS (continued) Please check as appropriate. ☒ 1.2.2 Attached to this application is formal approval and endorsement for the project by the applicant’s board of directors, executive management, or other governing authority. If the applicant is a collaborative grouping, a formal approval from each participant’s governing authority is necessary. (Indicate by checking the box) ☒ 1.2.3 As an applicant, we have administrative and financial management systems and follow procurement standards that comply with the standards set forth in the grant agreement (Section 3 of the RFA). (Indicate by checking the box) ☒ 1.2.4 If awarded the grant, we can comply with all terms and conditions of the award as identified in the Standard Grant Agreement template at http://www.akenergyauthority.org/Programs/Renewable-Energy-Fund/Rounds#round9. (Any exceptions should be clearly noted and submitted with the application.) (Indicate by checking the box) ☒ 1.2.5 We intend to own and operate any project that may be constructed with grant funds for the benefit of the general public. If no please describe the nature of the project and who will be the primary beneficiaries. (Indicate yes by checking the box) SECTION 2 – PROJECT SUMMARY This section is intended to be no more than a 2-3 page overview of your project. 2.1 Project Title – (Provide a 4 to 7 word title for your project). Type in space below. Sitka Wastewater Treatment Plant Effluent Heat Pump 2.2 Project Location – Include the physical location of your project and name(s) of the community or communities that will benefit from your project in the subsections below. 2.2.1 Location of Project – Latitude and longitude (preferred), street address, or community name. Latitude and longitude coordinates may be obtained from Google Maps by finding you project’s location on the map and then right clicking with the mouse and selecting “What is here? The coordinates will be displayed in the Google search window above the map in a format as follows: 61.195676.-149.898663. If you would like assistance obtaining this information please contact AEA at 907-771-3031. Renewable Energy Fund Round IX Grant Application – Heat Projects AEA 15003 Page 5 of 22 7/8/15 The project is located in Sitka at 100 Alice Loop. The latitude and longitude are: N57d02m50.62m x W135d21m18.8s 2.2.2 Community benefiting – Name(s) of the community or communities that will be the beneficiaries of the project. Sitka, Alaska 2.3 PROJECT TYPE Put X in boxes as appropriate 2.3.1 Renewable Resource Type ☐ Wind to Heat ☐ Biomass or Biofuels ☐ Hydro to Heat ☐ Solar Thermal ☒ Heat Recovery from Existing Sources ☒ Heat Pumps ☐ Other (Describe) 2.3.2 Proposed Grant Funded Phase(s) for this Request (Check all that apply) Pre-Construction Construction ☐ Reconnaissance ☒ Final Design and Permitting ☐ Feasibility and Conceptual Design ☒ Construction and Commissioning 2.4 PROJECT DESCRIPTION Provide a brief one paragraph description of the proposed heat project. The proposed project would design and construct a heat pump system to replace the existing fuel oil boilers at the Sitka Wastewater Treatment Plant (WWTP). The system would utilize treated effluent as the heat source, and the heat pump would be powered by renewable energy from Sitka’s hydroelectric power generation. One fuel-oil boiler would be retained to generate heat on the coldest winter days and to provide redundancy. The system would displace approximately 95 percent of the heating oil usage at the WWTP. 2.5 Scope of Work Provide a scope of work detailing the tasks to be performed under this funding request. This should include work paid for by grant funds and matching funds or performed as in-kind match. The proposed heat pump project will displace approximately 95 percent of the annual heating oil usage in the existing building; the remaining 5 percent will be supplied by a recently installed 954 MBH fuel oil boiler. The existing oil boiler heating system is consuming approximately 15,030 gallons per year of heating oil ($64,930 per year at $4.32/gallon), and 4,028 kWh of electricity. The proposed effluent source heat pump system will consume approximately 133,000 kWh of electricity (costing $15,300 per year), with back up oil boiler consuming 840 gallons of heating oil ($3,630 at $4.32/gallon). The anticipated net heating fuel savings is 14,190 gallons. The anticipated net energy cost savings (heating oil savings minus extra electricity required for heat pump system) is estimated at $51,790 for Year 1 of the project. This savings will serve to stabilize cost for approximately 3,500 customers of this public wastewater collection and treatment system. A contract technician will be utilized to monitor and maintain the heat pump system and this will Renewable Energy Fund Round IX Grant Application – Heat Projects AEA 15003 Page 6 of 22 7/8/15 create new employment opportunity in Sitka. The estimated reduction in annual greenhouse gas emissions will be 155 tons CO2. SECTION 3 – Project Management, Development, and Operation 3.1 Schedule and Milestones Criteria: Stage 2-1.A: The proposed schedule is clear, realistic, and described in adequate detail. Please fill out the schedule below (or attach a similar sheet) for the work covered by this funding request. Be sure to identify key tasks and decision points in in your project along with estimated start and end dates for each of the milestones and tasks. Please clearly identify the beginning and ending of all phases of your proposed project. Add additional rows as needed. See Attachment 1. 3.2 Budget Criteria: Stage 2-1.B: The cost estimates for project development, operation, maintenance, fuel, and other project items meet industry standards or are otherwise justified. 3.2.1 Budget Overview Describe your financial commitment to the project. List the amount of funds needed for project completion and the anticipated nature and sources of funds. Consider all project phases, including future phases not covered in this funding request. The project has a total cost of $780,000. A cash match of $113,000 will be provided by CBS. The grant request amount is $667,000. See Attachment 2. 3.2.2 Budget Forms Applications MUST include a separate worksheet for each project phase that was identified in section 2.3.2 of this application, (I. Reconnaissance, II. Feasibility and Conceptual Design, III. Final Design and Permitting, and IV. Construction). Please use the tables provided below to detail your proposed project’s total budget. Be sure to use one table for each phase of your project. The milestones and tasks should match those listed in 3.1 above. If you have any question regarding how to prepare these tables or if you need assistance preparing the application please feel free to contact AEA at 907-771-3031 or by emailing the Grants Administrator, Shawn Calfa, at scalfa@aidea.org. Renewable Energy Fund Round IX Grant Application – Heat Projects AEA 15003 Page 7 of 22 7/8/15 Phase III – Final Design and Permitting Milestone or Task RE- Fund Grant Funds Grantee Matching Funds Source of Matching Funds: Cash/In-kind/Federal Grants/Other State Grants/Other TOTALS Project scoping and contractor solicitation $7,203.60 $1,220.40 cash $8,424.00 Permit applications $3,601.80 $610.20 cash $4,212.00 Final EA and mitigation plans $0.00 $0.00 NA $0.00 Resolution of land use, ROW issues $0.00 $0.00 NA $0.00 Permitting, ROW, site control $0.00 $0.00 NA $0.00 Final system design $80,440.20 $13,627.80 cash $94,068.00 Final cost estimate $20,410.20 $3,457.80 cash $23,868.00 Updated economic and financial analyses $8,404.20 $1,423.80 cash $9,828.00 Power or heat sale agreements $0.00 $0.00 NA $0.00 Final business and operational plan $0.00 $0.00 NA $0.00 TOTALS $120,060.00 $20,340.00 $140,400.00 Budget Categories: Direct Labor & Benefits $21,610.80 $3,661.20 NA $25,272.00 Travel & Per Diem $1,200.60 $203.40 NA $1,404.00 Equipment $840.42 $142.38 NA $982.80 Materials & Supplies $360.18 $61.02 NA $421.40 Contractual Services $84,042.00 $14,238.00 NA $98,280.00 Construction Services $0.00 $0.00 NA $0.00 Other $12,006.00 $2,034.00 NA $14,040.00 TOTALS $120,060.00 $20,340.00 $140,400.00 Phase IV – Construction Milestone or Task RE- Fund Grant Funds Grantee Matching Funds Source of Matching Funds: Cash/In- kind/Federal Grants/Other State Grants/Other TOTALS Design and feasibility requirements $0.00 $0.00 NA $0.00 Bid documents $27,347.00 $4,633.00 cash $31,980.00 Vendor selection and award $27,347.00 $4,633.00 cash $31,980.00 Construction $399,266.20 $67,641.80 cash $466,908.00 Integration and testing $43,755.20 $7,412.80 cash $51,168.00 Decommissioning of old system $27,347.00 $4,633.00 cash $31,980.00 Final acceptance, commissioning and start-up $19,142.90 $3,243.10 cash $22,386.00 Operations reporting $2,734.70 $463.30 cash $3,198.00 TOTALS $546,940.00 $92,660.00 $639,600.00 Budget Categories: Direct Labor & Benefits $98,449.20 $16,678.80 NA $115,128.00 Travel & Per Diem $5,469.40 $926.60 NA $6,396.00 Equipment $3,828.58 $648.62 NA $4,477.20 Materials & Supplies $1,640.82 $277.98 NA $1,918.80 Contractual Services $382,858.00 $64,862.00 NA $447,720.00 Construction Services $0.00 $0.00 NA $0.00 Other $54,694.00 $9,266.00 NA $63,960.00 TOTALS $546,940.00 $92,660.00 $639,600.00 Renewable Energy Fund Round IX Grant Application – Heat Projects AEA 15003 Page 8 of 22 7/8/15 3.2.3 Cost Justification Indicate the source(s) of the cost estimates used for the project budget. Cost was based on 2012 feasibility study performed by Alaska Energy Engineering, L.L.C. Modifications were made as shown on Attachment 2, and costs were inflated 2.4% annually. 3.2.4 Funding Sources Indicate the funding sources for the phase(s) of the project applied for in this funding request. Grant funds requested in this application $667,000 Cash match to be provided $113,000 In-kind match to be provided $0 Total costs for project phase(s) covered in application (sum of above) $780,000 For heat projects using building efficiency completed within the last 5 years as in-kind match, the applicant must provide documentation of the nature and cost of efficiency work completed. Applicants should provide as much documentation as possible including: 1. Energy efficiency pre and post audit reports, 2. Invoices for work completed, 3. Photos of the building and work performed, and/or 4. Any other available verification such as scopes of work, technical drawings, and payroll for work completed internally. 3.2.5 Total Project Costs Indicate the anticipated total cost by phase of the project (including all funding sources). Use actual costs for completed phases. Reconnaissance $0 Feasibility and Conceptual Design* $15,421 Final Design and Permitting $140,400 Construction $639,600 Total Project Costs (sum of above) $795,421 * AEA-funded feasibility study completed in July 2012 3.2.6 Operating and Maintenance Costs (non-fuel) Estimate annual non-fuel O&M costs associated with the proposed system $24,154 (includes electricity) 3.2.7 Fuel Costs Estimate annual cost for all applicable fuel(s) needed to run the proposed system Fuel type Annual cost ($) Fuel oil for 954 MBH boiler $3,630 3.3 Project Communications Criteria: Stage 2-1.C: The applicant’s communications plan, including monitoring and reporting, is described in adequate detail. Describe how you plan to monitor the project and keep the Authority informed of the status. The CBS project manager will be the sole point of contact for the design consultant, the general contractor and the Authority. In this way, all project communication will be funneled through one individual who will be well-informed of the project status. The project manager will report to AEA on milestones and submissions on a monthly basis. These reports will be augmented by a grant funding expenditures report prepared by the grant accountant. In the absence of the project manager, a temporary project manager will be assigned. The project manager will brief the temporary project manager on the status of the project and upcoming Renewable Energy Fund Round IX Grant Application – Heat Projects AEA 15003 Page 9 of 22 7/8/15 milestones. The project manager will formally notify all interested parties of the change, and will provide contact information for the temporary project manager. The temporary project manager will be a qualified individual from the CBS Public Works Department. 3.4 Operational Logistics Criteria: Stage 2-1.D: Logistical, business, and financial arrangements for operating and maintaining the project throughout its lifetime and selling energy from the completed project are reasonable and described in adequate detail. Describe the anticipated logistical, business, and financial arrangements for operating and maintaining the project throughout its lifetime and selling energy from the completed project. The WWTP is currently operated and maintained by CBS employees and funded by the wastewater enterprise fund. This arrangement would continue after construction of the project. The self-supporting enterprise fund receives revenue from user fees, grants and loans. The construction of a heat pump will not result in any additional logistical, business or financial challenges other than the need to maintain a new heating assembly. There will be no heat sales associated with the WWTP heat pump project. SECTION 4 – QUALIFICATIONS AND EXPERIENCE 4.1 Project Team Criteria: Stage 2-2.A: The Applicant, partners, and/or contractors have sufficient knowledge and experience to successfully complete and operate the project. If the applicant has not yet chosen a contractor to complete the work, qualifications and experience points will be based on the applicant’s capacity to successfully select contractors and manage complex contracts. Criteria: Stage 2-2.B: The project team has staffing, time, and other resources to successfully complete and operate the project. Criteria: Stage 2-2.C: The project team is able to understand and address technical, economic, and environmental barriers to successful project completion and operation. Criteria: Stage 2-2.D: The project team has positive past grant experience. 4.1.1 Project Manager Indicate who will be managing the project for the Grantee and include contact information, and a resume. In the electronic submittal, please submit resumes as separate PDFs if the applicant would like those excluded from the web posting of this application. If the applicant does not have a project manager indicate how you intend to solicit project management support. If the applicant expects project management assistance from AEA or another government entity, state that in this section. Project manager – David Longtin, P.E., Senior Engineer for the City and Borough of Sitka 100 Lincoln Street, Sitka AK 99835 (907) 747-1883 (p) (907) 747-3158 (f) david.longtin@cityofsitka.org See Attachment 3 for resume. 4.1.2 Expertise and Resources Describe the project team including the applicant, partners, and contractors. Provide sufficient detail for reviewers to evaluate: • the extent to which the team has sufficient knowledge and experience to successfully complete and operate the project; • whether the project team has staffing, time, and other resources to successfully complete and operate the project; Renewable Energy Fund Round IX Grant Application – Heat Projects AEA 15003 Page 10 of 22 7/8/15 • how well the project team is able to understand and address technical, economic, and environmental barriers to successful project completion and operation. If contractors have not been selected to complete the work, provide reviewers with sufficient detail to understand the applicant’s capacity to successfully select contractors and manage complex contracts. Include brief resumes for known key personnel and contractors as an attachment to your application. In the electronic submittal, please submit resumes as separate PDFs if the applicant would like those excluded from the web posting of this application The City and Borough of Sitka (CBS) will utilize the Finance and Public Works Departments to execute this project. The accounting staff of the Finance Department will provide grant accounting services, and the engineering staff of the Public Works Department will provide a project manager. The Public Works engineering staff consists of the municipal engineer, two civil engineers, one architect/project manager, one CAD technician and two clerical staff members. The work will be designed by a consultant selected in a performance-based procurement. When the design is complete, the consultant will prepare bid documents that will result in the selection of the general contractor that satisfies the minimum qualifications and submits the lowest bid. All invoices and pay requests will be reviewed and, when acceptable, approved by the CBS project manager. The project manager will oversee the work, review and approve pay requests and submit them to the accounting staff for payment and recordkeeping. If any owner-furnished materials will be used on the project, they will be procured and tracked according to established CBS procedures. The resume for the CBS project manager is attached. The CBS operates and maintains the wastewater treatment plant. 4.1.3 Project Accountant(s) Indicate who will be performing the accounting of this project for the grantee and include a resume. In the electronic submittal, please submit resumes as separate PDFs if the applicant would like those excluded from the web posting of this application. If the applicant does not have a project accountant indicate how you intend to solicit financial accounting support. Ali Clayton will serve as the accountant for this grant. She is a Grant Accountant in the CBS Finance Department. See Attachment 3 for her resume. 4.1.4 Financial Accounting System Describe the controls that will be utilized to ensure that only costs that are reasonable, ordinary and necessary will be allocated to this project. Also discuss the controls in place that will ensure that no expenses for overhead, or any other unallowable costs will be requested for reimbursement from the Renewable Energy Fund Grant Program. The City and Borough of Sitka uses New World Systems Logos software. This is software specifically designed for government entities utilizing Fund accounting and tracking projects funded by grants, loans and other internal funding sources. The software sets a budget control for the project that is set for the life of the project. This can be adjusted with the appropriate level of authority. The Grant Accountant is a dedicated position within the City and Borough tasked with tracking the costs for all projects and ensuring all reporting requirements are met. This position is the primary user of the Projects module within the software system. Additionally, the module is easily accessible for the project managers and others with a need to review project costs and progress. Renewable Energy Fund Round IX Grant Application – Heat Projects AEA 15003 Page 11 of 22 7/8/15 4.2 Local Workforce Criteria: Stage 2-2.E: The project uses local labor and trains a local labor workforce. Describe how the project will use local labor or train a local labor workforce. As described in Section 3.4, the new system will be operated by local CBS employees. When needed, specialty technicians will be brought in to troubleshoot heat-pump-specific problems. However, CBS will oversee the work of all technicians and will be working to increase the organization’s competence to the point where we can self-perform most work on the heat pump. SECTION 5 – TECHNICAL FEASIBILITY 5.1 Resource Availability Criteria: Stage 2-3.A: The renewable energy resource is available on a sustainable basis, and project permits and other authorizations can reasonably be obtained. 5.1.1 Proposed Energy Resource Describe the potential extent/amount of the energy resource that is available, including average resource availability on an annual basis. Describe the pros and cons of your proposed energy resource vs. other alternatives that may be available for the market to be served by your project. For pre-construction applications, describe the resource to the extent known. For design and permitting or construction projects, please provide feasibility documents, design documents, and permitting documents (if applicable) as attachments to this application. The proposed renewable heat resource is the effluent from the wastewater treatment plant. The amount of heat available from the effluent is limited by the flow and temperature of the effluent. To match the design load, 220 gpm of effluent will be required, which can be supplied by the existing effluent pump. As the effluent temperature is between 46 and 53°F, as seen on the figure below for the time period of September 2008-May 2009, the system efficiency will be greater than ground- source or seawater source heat pumps. Renewable Energy Fund Round IX Grant Application – Heat Projects AEA 15003 Page 12 of 22 7/8/15 As the effluent is a readily available and reliable source of 46 to 53°F heat, the heat pump system will be effective in significantly reducing the reliance on heating oil. As the hydronic heat from the heat pump at 115°F will be a lower temperature than the HVAC is designed for (180°F), upgrades in heating appliances will be required to compensate for the lower temperature of the heat supply. The feasibility of the effluent heat pump was compared to ground source heat pumps and air source heat pumps in a July 2012 report by Alaska Energy Engineering, LLC. This feasibility report is included as Attachment 4, and serves as the technical and financial basis for proceeding with the effluent source heat pumps as a viable alternative to heating oil or electric heat for the facility. The effluent heat pump system had the lowest life cycle cost of the three alternatives studied. The use of WWTP effluent has already proven to be technically and economically feasible since 2010 at the Whistler Athletes Village (now called Cheakamus Crossing) outside Vancouver, BC. Effluent is used there to successfully heat a ground loop that supplies heat pumps in every residential and community building in this development. See Attachment 10. 5.1.2 Permits Provide the following information as it may relate to permitting and how you intend to address outstanding permit issues.  List of applicable permits  Anticipated permitting timeline  Identify and describe potential barriers No specific permitting requirements exist for effluent heat pumps. It is anticipated that a mechanical construction permit will be required from the City and Borough of Sitka for the HVAC upgrade and heat pump installation. It is anticipated that this permit can be obtained in a timely manner prior to construction. No serious challenges to obtaining the required permits are anticipated. 5.2 Project Site Criteria: Stage 2-3.B: A site is available and suitable for the proposed energy system. Describe the availability of the site and its suitability for the proposed energy system. Identify potential land ownership issues, including whether site owners have agreed to the project or how you intend to approach land ownership and access issues. The entire project will be located on the Wastewater Treatment Plant property currently owned by CBS, so there are no known land ownership issues. 5.3 Project Risk Criteria: Stage 2-3.C: Project technical and environmental risks are reasonable. 5.3.1 Technical Risk Describe potential technical risks and how you would address them. The risk is minimal with this project. The technology is proven, CBS has experienced public works and accounting staff members assigned to the project and good relationships with talented designers and builders. Although using wastewater plant effluent as a building heat source has not been tried in Alaska, the basic design concept is similar to that employed at the Whistler’s Athletes Village in British Columbia, Canada, since 2010. This project, now called Cheakamus Crossing, extracts valuable heat from the WWTP effluent and supplies source flow to heat pumps for buildings in a mixed residential/commercial development. A potential risk is that a complication not identified in the feasibility study conceptual design is discovered during the design phase, although this risk has been mitigated by a follow-up WWTP HVAC evaluation (see Attachment 5). A complication of this kind could increase the construction cost estimate and potentially extend the project schedule. Depending on the nature of the problem, we would seek additional CBS funding or value-engineer the scope to stay within the existing budget. Renewable Energy Fund Round IX Grant Application – Heat Projects AEA 15003 Page 13 of 22 7/8/15 Another potential risk is that CBS would prefer to complete design and construction of AEA-eligible improvements along with AEA-ineligible HVAC improvements. Design and installation of the project would be more efficiently performed as a single project as opposed to two separate projects. CBS is pursuing funding for the HVAC improvements. However, CBS commits to meet AEA’s schedule requirements if funding for the AEA-ineligible work is not made available. 5.3.2 Environmental Risk Explain whether the following environmental and land use issues apply, and if so how they will be addressed:  Threatened or endangered species  Habitat issues  Wetlands and other protected areas  Archaeological and historical resources  Land development constraints  Telecommunications interference  Aviation considerations  Visual, aesthetics impacts  Identify and describe other potential barriers There are no environmental or land use issues anticipated in regards to this project, as the entire project will take place inside an existing building. The project will not impact endangered species, affect wetlands or habitat, encroach on archeological or historical buildings. No land development constraints will be encountered. The effluent heat pump will not impact telecommunications, aviation, visual, or aesthetic concerns. 5.4 Existing and Proposed Energy System Criteria: Stage 2-3.D: The proposed energy system can reliably produce and deliver energy as planned. 5.4.1 Basic Configuration of Existing Energy System Describe the basic configuration of the existing energy system. Include information about the number, size, age, efficiency, and type of generation. The Wastewater Treatment Plant currently has a mechanical room with two 954 MBH oil boilers. One boiler – with an AFUE rating of 68% – has reached the end of its useful life, but is still in use. The other boiler was replaced in 2012 with a new unit with AFUE rating of 80%. Existing Energy Generation and Usage a) Basic configuration (if system is part of the Railbelt1 grid, leave this section blank) i. Number of generators/boilers/other two oil boilers ii. Rated capacity of generators/boilers/other 954,000 BTU/hour (combined capacity of 1,908 BTU/hour) iii. Generator/boilers/other type NA iv. Age of generators/boilers/other one unit at end of useful life; the other new in 2012 v. Efficiency of generators/boilers/other estimated AFUE = 68% (old boiler), 80% (new boiler) vi. is there heat recovery and is it operational? no / NA 1 The Railbelt grid connects all customers of Chugach Electric Association, Homer Electric Association, Golden Valley Electric  Association, the City of Seward Electric Department, Matanuska Electric Association and Anchorage Municipal Light and Power.    Renewable Energy Fund Round IX Grant Application – Heat Projects AEA 15003 Page 14 of 22 7/8/15 b) Annual O&M cost i. Annual O&M cost for labor $7,608 (2012 study costs increased by 2.4% annually) ii. Annual O&M cost for non-labor $65,699 (parts, fuel oil @$4.32/gal, electricity @ $0.109/kWh) c) Annual electricity production and fuel usage (fill in as applicable) i. Electricity [kWh] NA ii. Fuel usage Diesel [gal] NA Other NA iii. Peak Load NA iv. Average Load NA v. Minimum Load NA vi. Efficiency NA vii. Future trends NA d) Annual heating fuel usage (fill in as applicable) i. Diesel [gal or MMBtu] 15,030 gallons of #1 heating oil per year ii. Electricity [kWh] 4,028 kWh per year iii. Propane [gal or MMBtu] 0 iv. Coal [tons or MMBtu] 0 v. Wood [cords, green tons, dry tons] 0 vi. Other 0 5.4.2 Future Trends Describe the anticipated energy demand in the community over the life of the project. Sitka’s population is stable. Community energy demand is expected to be stable. 5.4.3 Impact on Rates Briefly explain what if any effect your project will have on electrical rates in the proposed benefit area over the life of the project. For PCE eligible communities, please describe the expected impact would be for both pre and post PCE. There will be no impact. Extra electricity requirements are negligible relative to generation capacity. 5.4.4 Proposed System Design Provide the following information for the proposed renewable energy system:  A description of renewable energy technology specific to project location  Optimum installed capacity  Anticipated capacity factor  Anticipated annual generation  Anticipated barriers  Integration plan  Delivery methods As described in the July 2012 Renewable Energy Feasibility Analysis by Alaska Energy Engineering, LLC, the most cost-effective renewable energy technology specific to the WWTP project location is an effluent heat pump. Renewable Energy Fund Round IX Grant Application – Heat Projects AEA 15003 Page 15 of 22 7/8/15 The effluent, with an average temperature nearing 50oF, passes by the boiler room, easing the integration of the heat source. The effluent from the WWTP would pass through an in-line screen prior to going through a stainless steel plate-and-frame heat exchanger; an antifreeze solution would be heated by the effluent on the other side of the heat exchanger. The refrigerant from the 868 MBH water-to-water heat pump unit would be heated by the antifreeze solution in the evaporator. Using the vapor compression cycle, the heat pump would then “lift” this heat to 115oF during the compression cycle, and then transfer the heat to the condenser loop to supply heating appliances. 220 gallons per minute of effluent will be required to provide sufficient heat to the evaporator under design load conditions. A variable frequency drive on the existing recycled effluent pump will provide the correct flow of effluent to the heat exchanger under varied heat load conditions. As the WWTP is currently designed for 180oF in its heating system, the air handlers, unit heaters, cabinet unit heaters and baseboard heaters would need to be replaced to increase the amount of surface area of heating coils to compensate for the 115oF temperature hydronic water supplied by the heat pump system. The optimum installed capacity is one high-efficiency water-to-water heat pump with 72 tons capacity. The total capacity of the proposed heat pump system is 72 tons, or 868,000 BTU/hour (868 MBH). This will provide 70% of the design heating load and 95% of the seasonal heating requirement. Backup heat would be supplied by a new 954 MBH fuel oil boiler in conjunction with a storage tank. The anticipated capacity factor for the heat pump is approximately 20% year round average, with higher use in winter and little or no use in summer, as the fuel oil boilers have been traditionally shut off from April to October. The anticipated annual heat generation is 1,415 MMBtu at an average COP of 4. The remaining 104 MMBtu will be produced by the backup heating oil boiler. There are no anticipated barriers for this technology. The use of effluent source heat pumps is already a proven method of viable heat recovery in the USA, Canada and Europe. Recent advancements in self-cleaning in-line filters upstream of effluent heat exchangers allow valuable heat in effluent to be used with relatively low maintenance requirements. The basic integration concept is to install the new heat pump and associated equipment in close proximity to the air handler coils, and to an existing effluent recirculation line. The proposed arrangement allows integration into the existing facility with minimal cost and interruption of existing systems, and allows lower temperature heat to replace that provided now by existing boilers. Heat from the heat pumps will ultimately be delivered to new low-temperature heating appliances throughout the building via hydronic loops. The proposal is a direct result of the attached Renewable Energy Feasibility Analysis completed by Alaska Energy Engineering LLC in July 2012 under a Renewable Energy Round III grant. See Attachment 4. CBS also completed a Wastewater Treatment Plant Heating and Ventilation Systems Upgrade evaluation finalized by CH2M Hill on June 19, 2014, and included as Attachment 5. CBS needs to upgrade the HVAC system in the WWTP, which is past is useful life. We see the integration of the heat pump into the system as a subset of a larger project. The 2012 AEE report is the basis of this grant application. Where the two reports differed in their descriptions of the heat Renewable Energy Fund Round IX Grant Application – Heat Projects AEA 15003 Page 16 of 22 7/8/15 pump system, we went with the AEE report (i.e., a 72-ton unit as cited above vs. the 80-ton unit cited in the 2014 report). We will use the CH2M Hill report to help us look at the HVAC replacement project as a whole. Proposed System Design Capacity and Fuel Usage (Include any projections for continued use of non-renewable fuels) a) Proposed renewable capacity (Wind, Hydro, Biomass, other) [kW or MMBtu/hr] Capacity of effluent heat pump = 868,000 BTU/hour b) Proposed annual electricity or heat production (fill in as applicable) i. Electricity [kWh] NA ii. Heat [MMBtu] 498 MMBtu/year = 474 MMBtu/year from effluent source heat pump and 24 MMBtu/year from heating oil boiler c) Proposed annual fuel usage (fill in as applicable) i. Propane [gal or MMBtu] 0 ii. Coal [tons or MMBtu] 0 iii. Wood or pellets [cords, green tons, dry tons] 0 iv. Other 0 5.4.5 Metering Equipment Please provide a short narrative, and cost estimate, identifying the metering equipment that will be used to comply with the operations reporting requirement identified in Section 3.15 of the Request for Applications. Johnathan Heller, P.E., of Ecotope Inc described a monitoring system that would allow CBS to more easily complete the reporting required by the grant. The system would consist of a datalogger, current transducers, temperature sensors and onsite data collection. He estimated the cost for design and construction at $20,000. SECTION 6 – ECONOMIC FEASIBILITY AND BENEFITS 6.1 Economic Feasibility Criteria: Stage 2-4.A: The project is shown to be economically feasible (net positive savings in fuel, operation and maintenance, and capital costs over the life of the proposed project). 6.1.1 Economic Benefit Explain the economic benefits of your project. Include direct cost savings, and how the people of Alaska will benefit from the project. The benefits information should include the following:  Anticipated annual and lifetime fuel displacement (gallons and dollars)  Anticipated annual and lifetime revenue (based on i.e. a Proposed Power Purchase Agreement price, RCA tariff, or cost based rate)  Additional incentives (i.e. tax credits)  Additional revenue streams (i.e. green tag sales or other renewable energy subsidies or programs that might be available) The economic model used by AEA is available at http://www.akenergyauthority.org/Programs/Renewable-Energy-Fund/Rounds#round9. This economic model may be used by applicants but is not required. The final benefit/cost ratio used will Renewable Energy Fund Round IX Grant Application – Heat Projects AEA 15003 Page 17 of 22 7/8/15 be derived from the AEA model to ensure a level playing field for all applicants. If used, please submit the model with the application. The proposed heat pump project will displace approximately 95 percent of the annual heating oil usage in the existing building; the remaining 5 percent will be supplied by a recently installed 954 MBH fuel oil boiler. The existing oil boiler heating system is consuming approximately 15,030 gallons per year of heating oil ($64,930 per year at the current price of $4.32/gallon), and 4,028 kWh of electricity. The proposed effluent source heat pump system will consume approximately 133,000 kWh of electricity (costing $15,300 per year), with back up oil boiler consuming 840 gallons of heating oil ($3,630 at current pricing). The anticipated net heating fuel savings is 14,190 gallons. The anticipated net energy cost savings (heating oil savings minus extra electricity required for heat pump system) is estimated at $51,790 for Year 1 of the project. This savings will serve to stabilize cost for approximately 3,500 customers of this public wastewater collection and treatment system. A contract technician will be utilized to monitor and maintain the heat pump system and this will create new employment opportunity in Sitka. The estimated reduction in annual greenhouse gas emissions will be 155 tons CO2. 6.1.2 Power Purchase/Sale The power purchase/sale information should include the following:  Identification of potential power buyer(s)/customer(s)  Potential power purchase/sales price - at a minimum indicate a price range  Proposed rate of return from grant-funded project Identify the potential power buyer(s)/customer(s) and anticipated power purchase/sales price range. Indicate the proposed rate of return from the grant-funded project. NA 6.1.3 Public Benefit for Projects with Private Sector Sales For projects that include sales of power to private sector businesses (sawmills, cruise ships, mines, etc.), please provide a brief description of the direct and indirect public benefits derived from the project as well as the private sector benefits and complete the table below. See section 1.6 in the Request for Applications for more information. NA Renewable energy resource availability (kWh per month) Estimated sales (kWh) Revenue for displacing diesel generation for use at private sector businesses ($) Estimated sales (kWh) Revenue for displacing diesel generation for use by the Alaskan public ($) 6.2 Financing Plan Criteria: Stage 2-4.B: The project has an adequate financing plan for completion of the grant-funded phase and has considered options for financing subsequent phases of the project. 6.2.1 Additional Funds Identify the source and amount of all additional funds needed to complete the work in the phase(s) for which REF funding is being applied in this application. Indicate whether these funds are secured or pending future approvals. Describe the impact, if any, that the timing of additional funds would have on the ability to proceed with the grant. If the grant is awarded, we will have sufficient funding to complete the project. 6.2.2 Financing opportunities/limitations Renewable Energy Fund Round IX Grant Application – Heat Projects AEA 15003 Page 18 of 22 7/8/15 If the proposed project includes final design or construction phases, what are your opportunities and/or limitations to fund this project with a loan, bonds, or other financing options? If CBS wanted to conduct non-AEA-eligible HVAC improvements at the WWTP, or if AEA funding proved to be insufficient, we have access to an ADEC loan for $2,832,500. See Attachment 6. 6.2.2 Cost Overruns Describe the plan to cover potential cost increases or shortfalls in funding. CBS would have the option of either value-engineering the project to remain within the budget or to utilize the ADEC loan cited in 6.2.1. 6.2.3 Subsequent Phases If subsequent phases are required beyond the phases being applied for in this application, describe the anticipated sources of funding and the likelihood of receipt of those funds. CBS would utilize the ADEC loan cited in 6.2.1. 6.3 Other Public Benefit Criteria: Stage 3-4.C: Other benefits to the Alaska public are demonstrated. Avoided costs alone will not be presumed to be in the best interest of the public. Describe the non-economic public benefits to Alaskans over the lifetime of the project. For the purpose of evaluating this criterion, public benefits are those benefits that would be considered unique to a given project and not generic to any renewable resource. For example, decreased greenhouse gas emission, stable pricing of fuel source, won’t be considered under this category. Some examples of other public benefits include:  The project will result in developing infrastructure (roads, trails, etc.) that can be used for other purposes  The project will result in a direct long-term increase in jobs (operating, supplying fuel, etc.)  The project will solve other problems for the community (waste disposal, food security, etc.)  The project will generate useful information that could be used by the public in other parts of the state  The project will promote or sustain long-term commercial economic development for the community Potential Annual Fuel Displacement: 14,190 gallons of #1 heating oil/year usage will be displaced over the lifetime of the project. There are no anticipated revenue/incentives since the heat is not sold to others. Non-economic benefits to Alaskans: Estimated CO2 reduction in Sitka area of 155 tons/year from the proposed project. Additional benefit is that this effluent heat pump project will demonstrate, in a community WWTP facility, how effluent source heat pumps can carry building heat loads through the Alaska winter, and what overall savings are possible from using them. The demonstration of this facility could provide valuable information for similar facilities throughout the state. Another additional benefit is that less fuel oil will be shipped to Sitka, reducing the likelihood of an oil spill into Sitka Sound. Subsistence and commercial fishing are a crucial element in the local economy. SECTION 7 – SUSTAINABILITY Renewable Energy Fund Round IX Grant Application – Heat Projects AEA 15003 Page 19 of 22 7/8/15 Describe your plan for operating the completed project so that it will be sustainable throughout its economic life. Include at a minimum:  Capability of the Applicant to demonstrate the capacity, both administratively and financially, to provide for the long-term operation and maintenance of the proposed project  Is the Applicant current on all loans and required reporting to state and federal agencies?  Likelihood of the resource being available over the life of the project  Likelihood of a sufficient market for energy produced over the life of the project  The City and Borough of Sitka owns and operates multiple buildings and utilities in Sitka. The project budget allocates daily, quarterly, and annual service on the heat pumps, cleaning the heat exchanger cleaning the recycled effluent line and pump, as well as replacement of the heat pump after eighteen years. Operation and maintenance costs will be funded by the Wastewater Fund, which is funded by user fees. Due to the corrosive air in the wastewater treatment plant, corrosion would be expected to be greater than normal for the heat pump system equipment. To compensate for this, the heat pump equipment would be physically separated from the rest of the plant in a room that maintains a positive ventilation pressure to limit infiltration. Daily, monthly, and yearly maintenance are included in the economic analysis and will be included within the project requirements. This will help extend the unit life and ensure top performance. The City and Borough of Sitka is committed to reporting ongoing performance and savings not only for the purposes of this grant, but for application on other buildings that they own and operate. Temperatures, loop flow rates, electrical energy usage, heat production (MBH, MMBTU), and COP will be monitored for the new heat pump system. SECTION 8 – PROJECT READINESS Describe what you have done to prepare for this award and how quickly you intend to proceed with work once your grant is approved. Specifically address your progress towards or readiness to begin, at a minimum, the following:  The phase(s) that must be completed prior to beginning the phase(s) proposed in this application  The phase(s) proposed in this application  Obtaining all necessary permits  Securing land access and use for the project  Procuring all necessary equipment and materials  Improving the thermal energy efficiency of the building(s) to be served by the heat project To prepare for this award, CBS worked with Alaska Energy Engineering LLC to complete a Renewable Energy Feasibility Analysis for Harrigan Centennial Hall in July 2012. The study developed and compared alternatives to provide heat using renewable energy, provided a conceptual-level design and recommended a project. CBS then conducted a WWTP HVAC evaluation in 2013-2014. That study validated the conclusions of the feasibility report and investigated other improvements that should be made along with the replacement of the boilers with heat pumps. SECTION 9 – LOCAL SUPPORT AND OPPOSITION Describe local support and opposition, known or anticipated, for the project. Include letters, resolutions, or other documentation of local support from the community that would benefit from Renewable Energy Fund Round IX Grant Application – Heat Projects AEA 15003 Page 20 of 22 7/8/15 this project. The Documentation of support must be dated within one year of the RFA date of July 7, 2015 See attached resolution from the Sitka Assembly (Attachment 7). Also attached are letters of support from the Sitka Economic Development Association and the Sitka Tribe of Alaska. Support letters can be found at Attachment 8. Overall, the concept of using heat pumps has been embraced by the community. Many individuals have realized cost savings at their own homes after installing heat pumps. There is no known opposition to this project. SECTION 10 – COMPLIANCE WITH OTHER AWARDS Identify other grants that may have been previously awarded to the Applicant by the Authority for this or any other project. Describe the degree you have been able to meet the requirements of previous grants including project deadlines, reporting, and information requests. CBS has met the requirements of two previous AEA Renewable Energy Fund grants – one for the feasibility study mentioned above and one for a similar feasibility study at Harrigan Centennial Hall and the Kettleson Library. CBS certified that the AEA funds were spent in accordance with the grant terms and conditions on July 6, 2012, for the Centennial Hall and Kettleson Library study and on July 23, 2013, for the wastewater treatment plant study. CBS was awarded a Round VII grant for the installation of heat pumps at Centennial Hall. We are currently utilizing AEA grant funding on the construction of this project. SECTION 11 – LIST OF SUPPORTING DOCUMENTATION FOR PRIOR PHASES In the space below please provide a list of additional documents attached to support completion of prior phases. Attachment 4 – AEA-funded 2012 Feasibility Study Attachment 9 – excerpts from 2009 Energy Audit Report (for reconnaissance phase) SECTION 12 – LIST OF ADDITIONAL DOCUMENTATION SUBMITTED FOR CONSIDERATION In the space below please provide a list of additional information submitted for consideration Attachment 5 – 2014 WWTP HVAC evaluation Attachment 10 – Municipality of Whistler WWTP effluent heat pump presentation (there are myriad reports available online showing the effectiveness of using WWTP effluent as a heating source; this is just one example)