Loading...
HomeMy WebLinkAboutStMaryWindConstructREFApp09182014AVEC C vi ALASKA VILLAGE ELECTRIC COOPERATIVE, INC. September 22, 2014 Alaska Energy Authority 813 West Northern Lights Boulevard Anchorage, Alaska 99503-2495 Attn: Shawn Calfa RE: Renewable Energy Fund Grant Program Round 8: St. Mary'sfPitka's Point Wind Energy Construction Project Dear Mr. Calfa and Review Panel: The Alaska Village Electric Cooperative, Inc. (AVEC) respectfully submits the enclosed application for grant funds available through the Renewable Energy Fund Grant Program. Our application requests $4,348,540 for a wind energy construction project that will service the communities of St. Mary's and Pitka's Point. With funding obtained through AEA's program and an AVEC cash match of $537,460, AVEC would complete the construction, erection, startup, and commissioning of four wind turbines and secondary load controls to supplement the existing power generation system for the currently intertied communities of St. Mary's and Pitka's Point. We have previously submitted Renewable Energy Fund applications for wind energy for St. Mary's and Pitka's Point and have received that funding for our design efforts. We believe this project is now ready for construction and will, upon completion, serve the two communities and the State of Alaska very well. Please do not hesitate to contact me or Steve Gilbert, AVEC's Projects Development and Key Accounts Department Manager, if you have questions. Sincerely, 6% L/~& Meera Kohler President and CEO cc: Steve Gilbert, AVEC Enclosures 4831 Eagle Street • Anchorage. Alaska 99503-7497 *(907) -%1-1818 • In State (800) 478-1818 • Fax (907) 561-2388 • In Slate (866)561-2388 Renewable Energy Fund Round 8 Grant Application St. Mary’s/Pitka’s Point Wind Energy Construction Project Renewable Energy Fund Round VIII Grant Application – Standard Form St. Mary’s/Pitka’s Point Wind Energy Construction Project AEA 15003 Page 1 of 31 7/2/14 Name (Name of utility, IPP, or government entity submitting proposal) Alaska Village Electric Cooperative, Inc. Type of Entity: Fiscal Year End: SECTION 1 – APPLICANT INFORMATION Not for Profit December 31 Tax ID #92-0035763 Tax Status: ☐ For-profit ☒ Non-profit ☐ Government (check one) Date of last financial statement audit: April 14, 2014 Mailing Address: Physical Address: 4831 Eagle Street 4831 Eagle Street Anchorage, AK 99503 Anchorage, AK 99503 Telephone: Fax: Email: 800.478.1818 800.478.4086 sgilbert@avec.org 1.1 APPLICANT POINT OF CONTACT / GRANTS MANAGER Name: Steve Gilbert Title: Manager, Projects Development and Key Accounts Department Mailing Address: 4831 Eagle Street Anchorage, AK 99503 Telephone: Fax: Email: 907.565.5357 907.561.2388 sgilbert@avec.org 1.1.1 APPLICANT ALTERNATE POINTS OF CONTACT Name Telephone: Fax: Email: Meera Kohler 800.478.1818 800.478.4086 mkohler@avec.org Renewable Energy Fund Round VIII Grant Application – Standard Form St. Mary’s/Pitka’s Point Wind Energy Construction Project AEA 15003 Page 2 of 31 7/2/14 1.2 APPLICANT MINIMUM REQUIREMENTS Please check as appropriate. If you do not to meet the minimum applicant requirements, your application will be rejected. 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/REFund8.html. (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) Renewable Energy Fund Round VIII Grant Application – Standard Form St. Mary’s/Pitka’s Point Wind Energy Construction Project AEA 15003 Page 3 of 31 7/2/14 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. St. Mary’s/Pitka’s Point Wind Energy Construction Project 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, 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. This project will be constructed near Pitka’s Point (latitude 62.032780 N, longitude -163.28778 W; Sec. 06, T022N, R076W, Seward Meridian) and will service that community and its neighbor, St. Mary’s, five miles away. The communities are in the Yukon-Kuskokwim Delta and are approximately 450 air miles west-northwest of Anchorage. 2.2.2 Community benefiting – Name(s) of the community or communities that will be the beneficiaries of the project. This project will benefit St. Mary’s (2012 population of 647) and Pitka’s Point (2012 population of 109), which currently have intertied electrical systems. Pitka’s Point is about three miles from the St. Mary’s airport. The City of St. Mary's encompasses the Yup'ik Eskimo villages of St. Mary's and Andreafski. 2.3 PROJECT TYPE Put X in boxes as appropriate 2.3.1 Renewable Resource Type ☒ Wind ☐ Biomass or Biofuels (excluding heat-only) ☐ Hydro, Including Run of River ☐ Hydrokinetic ☐ Geothermal, Excluding Heat Pumps ☐ Transmission of Renewable Energy ☐ Solar Photovoltaic ☐ Storage of Renewable ☐ Other (Describe) ☐ Small Natural Gas 2.3.2 Proposed Grant Funded Phase(s) for this Request (Check all that apply) Pre-Construction Construction Renewable Energy Fund Round VIII Grant Application – Standard Form St. Mary’s/Pitka’s Point Wind Energy Construction Project AEA 15003 Page 4 of 31 7/2/14 ☐ Reconnaissance ☐ Final Design and Permitting ☐ Feasibility and Conceptual Design ☒ Construction 2.4 PROJECT DESCRIPTION Provide a brief one paragraph description of the proposed project. AVEC proposes to complete construction, erection, startup, and commissioning of four wind turbines to supplement the existing power generation system for currently intertied communities of St. Mary’s and Pitka’s Point. As a part of this project, AVEC will upgrade the electrical distribution line between St. Mary’s and Pitka’s Point to a 3 -phase line and upgrade the joint power plant to accommodate wind turbine energy generators. 2.5 PROJECT BENEFIT Briefly discuss the financial and public benefits that will result from this project, (such as reduced fuel costs, lower energy costs, local jobs created, etc.) This project will provide the following benefits which are listed here and described in further detail in Section 5 of this application: The proposed project will add four Northern Power Systems NPS 100C-24 wind turbines to supplement the existing diesel-fired electrical power system. The primary financial benefit of this project is to reduce and/or stabilize the long term cost of energy in the communities of St. Mary’s and Pitka’s Point by offsetting the diesel fuel usage by the electric power generators. The St. Mary’s REF8 Wind-Diesel Project Analysis conducted for this project (Tab F) shows that four NPS 100C-24 turbines could offset approximately 86,332 gallons of diesel fuel per year while generating 1,184,814 kilowatt hours per year (kWh/yr) at 80% net AEP. The project could save $355,803 during its first full year of operation (assumed to be 2016) in fuel costs for electricity and $5.36 million (assuming a 3% discount rate) over the 20-year lifetime of the project. In addition, the project would reduce diesel fuel used for heating at the St. Mary’s School by about 3,079 gallons/year, valued at $16,642 per year (first year heating fuel price). The turbines are expected to affect an average 36.8% wind penetration of the electric power generated . In addition, the following important benefits will be realized:  Regional benefits to the Health Clinic that serves St. Mary’s and surrounding villages through reduced energy costs.  Regional benefits to the St. Mary’s Regional Training Center through reduced energy costs.  Benefits to other non-PCE (Power Cost Equalization) community institutions through reduced energy costs, which may allow for increased or improved community or social services.  Reduced energy costs to other non-PCE users such as the retail stores, which may pass along savings to customers.  Increased opportunity for economic development. Renewable Energy Fund Round VIII Grant Application – Standard Form St. Mary’s/Pitka’s Point Wind Energy Construction Project AEA 15003 Page 5 of 31 7/2/14  Increased longevity of the PCE fund through a reduction in PCE payments for St. Mary’s and Pitka’s Point residents and community facilities.  A reduction in fossil fuel emissions, which results in improved local air quality and decreased contribution to global climate change.  Local jobs will be created during the construction phase.  Creation of local employment for the maintenance of the turbines.  Reduced fuel consumption reduces the volume of fuel transported and the potential for fuel spills and environmental damage. This project will take a big step forward in achieving state and federal renewable energy goals in St. Mary’s and Pitka’s Point. It is also be an important first step toward providing renewable energy to nearby Mountain Village with a future intertie. 2.6 PROJECT BUDGET OVERVIEW Briefly discuss the amount of funds needed, the anticipated sources of funds, and the nature and source of other contributions to the project. AVEC is proposing to construct four NPS 100C-24 wind turbines in Pitka’s Point to serve the communities of St. Mary’s and Pitka’s Point. The project will cost $4,886,000. AVEC requests $4,348,540 from the State of Alaska through a Renewable Energy Fund (REF) award. AVEC will provide $537,460 (11% of construction costs) as a match contribution. The Pitka’s Point Native Corporation has provided an in-kind contribution of $33,000, which represents their contribution of a 33-acre parcel valued conservatively at $1,000/acre. This in-kind match has not been incorporated into the total project costs, as that negatively impacts the benefit/cost ratio of the project; however, it shows real and tangible support for the project. 2.7 COST AND BENEFIT SUMMARY Include a summary of grant request and your project’s total costs and benefits below. Costs for the Current Phase Covered by this Grant (Summary of funds requested) 2.7.1 Grant Funds Requested in this application $4,348,540 2.7.2 Cash match to be provided $537,460 2.7.3 In-kind match to be provided $ 2.7.4 Other grant funds to be provided $ 2.7.5 Total Costs for Requested Phase of Project (sum of 2.7.1 through 2.7.4) $4,886,000 Other items for consideration 2.7.6 Other grant applications not yet approved $ Project Costs & Benefits (Summary of total project costs including work to date and future cost estimates to get to a fully operational project) Renewable Energy Fund Round VIII Grant Application – Standard Form St. Mary’s/Pitka’s Point Wind Energy Construction Project AEA 15003 Page 6 of 31 7/2/14 2.7.7 Total Project Cost Summary from Cost Worksheet, Section 4.4.4, including estimates through construction. $4,886,000 2.7.8 Additional Performance Monitoring Equipment not covered by the project but required for the Grant Only applicable to construction phase projects $ 2.7.9 Estimated Direct Financial Benefit (Savings) The economic model used by AEA is available at www.akenergyauthority.org/REFund8.html. This economic model may be used by applicants but is not required. Other economic models developed by the applicant may be used, however the final benefit/cost ratio used will be derived from the AEA model to ensure a level playing field for all applicants. $5,360,150 (20-year life) 2.7.10 Other Public Benefit If you can calculate the benefit in terms of dollars please provide that number here and explain how you calculated that number in Section 5 below. $ Renewable Energy Fund Round VIII Grant Application – Standard Form St. Mary’s/Pitka’s Point Wind Energy Construction Project AEA 15003 Page 7 of 31 7/2/14 SECTION 3 – PROJECT MANAGEMENT PLAN Describe who will be responsible for managing the project and provide a plan for successfully completing the project within the scope, schedule and budget proposed in the application. 3.1 Project Manager Tell us who will be managing the project for the Grantee and include contact information, a resume and references for the manager(s). 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. AVEC, as the electric utility serving St. Mary’s and Pitka’s Point, will provide overall project management and oversight. Steve Gilbert, Manager, Projects Development and Key Accounts Department Steve Gilbert is manager of the Projects Development and Key Accounts Department for AVEC where he leads a team focused on lowering the cost of energy in rural Alaskan villages through improved power plant efficiency, wind and other renewable power generation, and interties between villages. Previously, Mr. Gilbert worked at Chugach Electric for 17 years managing three power plants and served as lead electrical engineer for a 1 MW fuel cell and micro-turbine projects and wind energy project development. Mr. Gilbert is recognized as an industry leader on wind energy and has been active on a national level in operation and maintenance of wind power plants. Mr. Gilbert was Alaska’s Electrical Engineer of the Year in 2000 and for the 12 western states in 2001. He has been a regular lecturer at schools and universities on renewables, especially wind. He also worked with BP Wind in London assessing European wind prospects. To better evaluate investment opportunities for his employer, Mr. Gilbert recently completed his MBA. Meera Kohler, President and CEO of AVEC Ms. Kohler has more than 30 years of experience in the Alaska electric utility industry. She was appointed Manager of Administration and Finance at Cordova Electric Cooperative in 1983, General Manager of Naknek Electric Association in 1990, and General M anager of Municipal Light & Power in Anchorage in 1997. Since May 2000, Ms. Kohler has been the President and CEO of AVEC and in this position has ultimate grant and project responsibilities. Renewable Energy Fund Round VIII Grant Application – Standard Form St. Mary’s/Pitka’s Point Wind Energy Construction Project AEA 15003 Page 8 of 31 7/2/14 3.2 Project Schedule and Milestones Please fill out the schedule below. 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. The key tasks and their completion dates are: Grant Award Announcement: July 2015 Turbine Procurement: December 2015 Construction Activities: June 2016 – November 2016 Final Acceptance and Start-up: November 2016 Milestones Tasks Start Date End Date 1. Design and Feasibility Requirements are Complete AVEC will work with the engineering contractor to confirm that all the design needs are in place prior to moving forward with selection of the construction contractor. July 2015 Aug 2015 2. Bid Documents Completed Bid documents will be completed by the engineering contractor. Sept 2015 Oct 2015 3. Vendor Selected and Award in place The construction contractor will be selected, and a construction task order will be prepared. Nov 2015 May 2016 4. Construction Phase Dec 2015 Nov 2016 Land Acquisition Completed. Pitka’s Point Native Corporation provided 33 acres of land as an in-kind match to this grant funding. done Turbine Procurement Six months is required from placement of the order to arrival on site. The turbines and towers will be ordered by December 2015 and arrive in St. Mary’s by June 2016. Dec 2015 Jun 2016 Mobilization Construction equipment will be mobilized to the site by barge following break up. May 2016 June 2016 Site Access Improvements Access roads will be built once construction equipment is on site. Jun 2016 Jul 2016 Foundation Installation Four foundations will be installed once the site work is completed and pads are installed. Jul 2016 Aug 2016 Renewable Energy Fund Round VIII Grant Application – Standard Form St. Mary’s/Pitka’s Point Wind Energy Construction Project AEA 15003 Page 9 of 31 7/2/14 Turbine Installation The four turbines and towers will be installed in about one month’s time. Aug 2016 Aug 2016 Electrical Distribution Improvements Upgrades to the electrical distribution line between St. Mary’s and Pitka’s Point to a three phase line will be completed, and a new distribution line connecting the turbines to the existing, upgraded three phase distribution line will be installed. Aug 2016 Sept 2016 Demobilization The construction contractor will remove equipment from St. Mary’s via barge prior to freeze up. Sept 2016 Sept 2016 5. Integration and Testing Upgrades to the power plant will be completed during turbine construction. Once the turbines are installed, final integration and testing of the system will occur. Jul 2016 Sept 2016 6. Decommissioning Old Systems N/A 7. Final Acceptance, Commissioning and Start-up Final acceptance, commissioning, and startup will be done immediately following installation of the turbines. Sept 2016 Nov 2016 8. Operations Reporting AVEC will begin reporting to AEA after system start up. Nov 2016 3.3 Project Resources Describe the personnel, contractors, personnel or firms, equipment, and services you will use to accomplish the project. Include any partnerships or commitments with other entities you have or anticipate will be needed to complete your project. Describe any existing contracts and the selection process you may use for major equipment purchases or contracts. Include brief resumes and references for known, key personnel, contractors, and suppliers as an attachment to your application. AVEC will use a project management strategy that has been successful in the design and construction of its wind turbines throughout rural Alaska. That strategy includes a team of AVEC staff and external consultants. AVEC staff and their role on this project includ es:  Meera Kohler, President and Chief Executive Officer, will act as Project Executive and will maintain ultimate authority programmatically and financially.  Steve Gilbert, Project Development and Key Accounts Manager, will act as Program Manager and will lead the project management team consisting of AVEC staff, consultants, and contractors. Renewable Energy Fund Round VIII Grant Application – Standard Form St. Mary’s/Pitka’s Point Wind Energy Construction Project AEA 15003 Page 10 of 31 7/2/14  Debbie Bullock, Manager of Administrative Services, will provide support in accounting, payables, financial reporting, and capitalization of assets in accordance with AEA guidelines.  Bill Stamm, Manager of Engineering, leads AVEC’s Engineering Department which is responsible for the in-house design of power plants, distribution lines, controls, and other AVEC facilities. Mr. Stamm has worked at AVEC since 1994. Mr. Stamm was the AVEC line superintendent before he was appointed to Manager of Engineering in 2012. Mr. Stamm’s unit will provide engineering design and supervision.  Mark Bryan, the Manager of Operations, is a Certified Journeyman Electrician and supervises AVEC’s line operations, generation operations and all field construction programs. He has worked at AVEC since 1980, was appointed Manager of Construction in May 1998, and was promoted to Manager of Operations in June 2003. Mr. Bryan’s unit will oversee operation of this project as part of the AVEC utility system, once constructed.  Anna Sattler, Community Liaison, will communicate directly with St. Mary’s and Pitka’s Point residents and key entities to ensure that the community is informed. Material and equipment procurement packages will be formulated by the construction contractor in collaboration with AVEC’s purchasing manager. Purchase orders will be formulated with delivery dates consistent with dates required for barge or air transport consolidation. Multiple materials and/or equipment will be detailed for consolidated shipments to rural staging points, where secondary transport to the village destination is provided. The construction contractor will track the shipments and arrange handling services to and around the destination project sites. The construction contractor will be responsible for the construction activities for all project components of the facility upgrade. Local labor forces will be utilized to the maximum extent possible to construct the projects. All construction costs, direct and indirect, will be reimbursed on a cost-plus basis to the construction contractor, or paid directly by AVEC. For this project, AVEC is responsible for managing the commissioning process in concert with the construction contractor, designers, and vendors. That entails testing and training of operational personnel, as well as completing all contract closeout documents. Selection Process for Contractors: The construction contractor selection will be made from a list of pre-qualified contractors with a successful track record with AVEC. Pre -qualified contractors have been selected based upon technical competencies, past performance, written proposal, quality, cost, and general consensus from an internal AVEC steering committee. The selection process will conform to State and Federal statutes and regulations for open completive bid. 3.4 Project Communications Discuss how you plan to monitor the project and keep the Authority informed of the status. Please provide an alternative contact person and their contact information. AVEC has systems in place to accomplish reporting requirements successfully. In 2013, AVEC successfully met reporting requirements for 21 state and 26 federal grants. An independent Renewable Energy Fund Round VIII Grant Application – Standard Form St. Mary’s/Pitka’s Point Wind Energy Construction Project AEA 15003 Page 11 of 31 7/2/14 auditor’s report on compliance with aspects of contractual agreements and regulatory requirements, independent auditor’s report on internal control over financial reporting and on compliance and other matters, and an independent auditor’s report on compliance for each major federal program and report on internal control over compliance required by OMB Circular A-133 for AVEC for 2013 did not identify any deficiencies in internal control over compliance that they considered to be a material weakness. In addition, the independent auditor’s report on compliance with aspects of contractual agreements and regulatory requirements stated that nothing indicated AVEC failed to comply with the terms, covenants, provisions, or conditions of loan, grants, and security instruments as specified in 7 CFR part 1773. The project will be managed out of AVEC’s Project s Development and Key Accounts Department. For financial reporting, the Projects Development and Key Accounts Department’s accountant, supported by the Administrative Services Department, will prepare financial reports. The accountant will be responsible for ensuring that vendor invoices and internal labor charges are documented in accordance with AEA guidelines and are included with financial reports. AVEC has computerized systems in place for accounting, payables, financial reporting, and capitalization of assets in accordance with AEA guidelines. AVEC will require that weekly written progress reports be provided. Monthly invoices will be submitted from key contractor(s). The progress reports will include a summary of tasks completed, issues or problems experienced, upcoming tasks, and contractor’s needs fro m AVEC. Project progress reports will be collected, combined, and supplemented as necessary, and forwarded as one report to the AEA project manager each quarter. Quarterly face-to-face meetings will occur between AVEC and AEA to discuss the status of all projects funded through the AEA Renewable Energy Grants program. Individual project meetings will be held, as required or requested by AEA. Meera Kohler, AVEC’s President and CEO, may be contacted as an alternative manager. 3.5 Project Risk Discuss potential problems and how you would address them. The project site, though very robust as a Class 6 wind resource, is prone to rime icing conditions in winter. Although thousands of turbines around the world operate in rime icing conditions, r ime ice is more problematic for wind turbine operations than freezing rain (clear ice), given its tenacity and longevity in certain climatic condition s. Anti-icing and/or de-icing features may be necessary to sustain wind turbine availability during the winter months. One planned anti-icing feature is use of black hydrophobic rotor blades. The very smooth, hydrophobic surface of the blade retards ice retention while the black color enhances solar gain to heat the blade in order to weaken the ice adherence and and allow the ice to slough off. Renewable Energy Fund Round VIII Grant Application – Standard Form St. Mary’s/Pitka’s Point Wind Energy Construction Project AEA 15003 Page 12 of 31 7/2/14 To ensure the projects stay and schedule and within budget, AVEC follows the International Co- operative Alliance’s Seven Principles of Cooperatives. One of the most important of those principles is titled Democratic Member Control and refers to the men and women who serve as representatives being accountable to the membership. AVEC’s member communities, es pecially the community involved in a grant program such as the REF, have expectations for projects regarding outcomes, schedule, budget, and quality of work. AVEC member communities and Board of Directors receive regular project status updates. When prob lems are reported (either formally through status reports or informally through other communications), member communities expect solutions. 3.6 Project Accountant(s) Tell us who will be performing the accounting of this Project for the Grantee and include contact information, a resume and references for the project accountant(s). 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 project management support. Debbie Bullock, Manager of Administrative Services, will provide support in accounting, payables, financial reporting, and capitalization of assets in accordance with AEA guidelines. 3.7 Financial Accounting System Discuss the accounting system that will be used to account for project costs and whom will be the primary user of the accounting system. AVEC’s accounting system consists of software, procedures and controls driven by the daily inputs and other actions of competent employees throughout the organization. The software is comprised of a comprehensive suite of Daffron-brand modules including accounting (payables/payroll/general ledger), inventory, payroll, work orders, purchase orders, customer service and billing, and warehouse/inventory. Some ancillary functions are accomplished on spreadsheets with data downloaded from the various Daffron m odules. Procedures and controls include but are not limited to adequate separation of duties, manager - level approval of all expenditures, CEO-level approval of all major expenditures, a formal purchasing system (including purchase orders) for acquisitio n of materials and components, and a formal contracting system (including task orders) for acquisition of contractual services (consultants, construction, etc.). Virtually all AVEC employees are users of the accounting system, at least to a minimal extent. Primary users include the Accounting Department; all managers due to their involvement in controlling and ensuring the propriety of costs; and the Project s Development and Key Accounts Department, particularly its Project Manager, its Office Administrator and its Senior Accountant; these three employees are primarily responsible for all grant reporting. 3.8 Financial Management Controls Renewable Energy Fund Round VIII Grant Application – Standard Form St. Mary’s/Pitka’s Point Wind Energy Construction Project AEA 15003 Page 13 of 31 7/2/14 Discuss 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. AVEC’s team, with years of experience and knowledge of managing AEA-funded project costs and grant reimbursements, has a system in place for ensuring that only costs that are reasonable, ordinary, and necessary are charged to a Project, and that only costs that are eligible are submitted for reimbursement. First, AVEC’s Project Manager (PM) is responsible for determining whether costs are appropriate and acceptable. The PM reviews all invoices from contractors and vendors and all in-house labor and equipment charges. Second, the Projects Development and Key Accounts Department Manager (DM) reviews costs associated with outsourced services, including consultant and contractor invoices, to ensure that the charges are reasonable. The DM also reviews his department’s staff labor charges (timesheets) to the project. Third, the Operations and Engineering Department Managers review all in-house labor (timesheets) for their department and expense reports to make sure that the charges are acceptable. Finally, the Projects Development and Key Accounts Department Senior Accountant, while preparing AEA financial reports and reimbursement requests, provides a review of both out sourced and in-house charges to determine whether they are allowable costs. The Senior Accountant is very experienced with REF grant reporting and grant agreements and understands what costs would be accepted by AEA. AVEC has systems in place to keep unacceptable overhead costs from being charged to and reimbursed through the REF Grant Fund Program. Upon project initiation, an AVEC work order number is created to track all project labor and expenses. AVEC staff and contractors reference this number on all timesheets and invoices when working on the project, ensuring that project costs are known. Purchase orders are universally used to establish spending limits for purchases of materials, which are then monitored by the Accounting Department through the enterprise accounting system. Task orders and contracts are universally used to establish spending limits for purchases of contractual services, which are then monitored by the Project s Development and Key Accounts Department utilizing spreadsheets. Direct labor expenses (gross payroll) are tracked separately from overhead costs including employee benefits and payroll taxes. Once labor hours have been calculated, overhead including employee benefits and payroll taxes are applied in a separate transaction on the work order. AVEC and AEA have an agreed rate cap for employer costs of payroll, consisting only of employee benefits and payroll taxes. AVEC can ensure that only allowable costs would be requested for reimbursement because the direct labor and indirect/overhead costs are separate transactions (and thus the indirect/overhead amounts can be easily omitted from reimbursement), and because the allowable rate has been established (and thus can be easily included for reimbursement). SECTION 4 – PROJECT DESCRIPTION AND TASKS The level of information will vary according to phase(s) of the project you propose to undertake with grant funds. Renewable Energy Fund Round VIII Grant Application – Standard Form St. Mary’s/Pitka’s Point Wind Energy Construction Project AEA 15003 Page 14 of 31 7/2/14 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 satisfied and funding for an advanced phase is warranted. 4.1 Proposed Energy Resource Describe the potential extent/amount of the energy resource that is available. Discuss 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. As documented in St. Mary’s, Alaska REF 8 Wind Diesel Project Analysis dated August 2014 and Pitka’s Point, Alaska Wind Resource Report dated April 2012 by V3 Energy, LLC, (both attached in Tab F), a 40 meter NRG Systems, Inc. tubular-type meteorological (met) tower was installed on Pitka’s Point Native Corporation land on the bluff immediately above the Yukon River with excellent exposure to northeasterly winds down the Andreafsky River, northerly winds from the mountains, and southerly winds from the flat, tundra plains leading toward Bethel. A synopsis of the Pitka’s Point met tower data follows: Data dates October 26, 2007 to February 12, 2009 (16 months) Wind power class Class 6 (outstanding), based on wind power density Wind power density mean, 38 m 558 W/m2 Wind speed mean, 38 m 7.62 m/s (17.0 mph) Max. 10-min wind speed 29.5 m/s Maximum 2-sec. wind gust 26.3 m/s (81.2 mph), January 2008 Weibull distribution parameters k = 1.94, c = 8.64 m/s Wind shear power law exponent 0.176 (low) Roughness class 2.09 (description: few trees) IEC 61400-1, 3rd ed. classification Class II-c (at 38 meters) Turbulence intensity, mean (at 38 m) 0.076 (at 15 m/s) Calm wind frequency (at 38 m) 20% (< 4 m/s) (16 mo. measurement period) Considering the inland location of Saint Mary’s/Pitka’s Point, the wind resource measured at the Pitka’s Point met tower site is highly unusual, and very favorable, with its combination of a high annual average wind speed, relatively low elevation, good geotechnical conditions, and proximity to existing roads and electrical grid infrastructure. More details regarding the wind resource are found in Tab F. Other energy resources are not feasible for the following reasons:  Based on an investigation of potential solar sites conducted by AVEC, t he installed cost of photovoltaic solar arrays will be higher per kW produced than the installed costs of wind, and the energy production capacity factor will be lower. Renewable Energy Fund Round VIII Grant Application – Standard Form St. Mary’s/Pitka’s Point Wind Energy Construction Project AEA 15003 Page 15 of 31 7/2/14  Generating power from river currents (in-stream hydroelectric) is not yet an established technology or a commercially available technology.  Hydropower development in the area is not feasible.  Biomass energy is limited by the lack of resource near the communities. 4.2 Existing Energy System 4.2.1 Basic configuration of Existing Energy System Briefly discuss the basic configuration of the existing energy system. Include information about the number, size, age, efficiency, and type of generation. The existing diesel power plant in St. Mary’s consists of three generators: a 499 kW Cummins QSX15G9, a 611 kW Caterpillar 3508, and a 908 kW Caterpillar 3512. The ages of these generators are 8 years, 27 years, and 19 years respectively. Aggregate generator efficiency in St. Mary’s in 2013 was 13.0 kWh/gal (2013 PCE Report). Pitka’s Point is powered from the prime power plant in St. Mary’s via a two-phase transmission line where one phase is dedicated for Pitka’s Point and the other phase is dedicated for the St. Mary’s airport. 4.2.2 Existing Energy Resources Used Briefly discuss your understanding of the existing energy resources. Include a brief discussion of any impact the project may have on existing energy infrastructure and resources. St. Mary’s and Pitka’s Point use diesel fuel for electrical power generation, heating oil for boiler (thermal) home and building heating, thermal heat recovery from the diesel engines at the power plant to some community buildings, and diesel and gasoline fuel for transportation needs. Between January 1 and December 31, 2013, 243,184 gallons of diesel fuel were consumed to generate 3,210,594 kWh (gross generation; AVEC data) for the communities of St. Mary’s and Pitka’s Point. One of the anticipated effects of this project is significantly decreased usage of diesel fuel for electrical power generation. Another is the decreased use of heating fuel for boiler operations at the school due to injection of excess wind power. 4.2.3 Existing Energy Market Discuss existing energy use and its market. Discuss impacts your project may have on energy customers. St. Mary’s and Pitka’s Point are connected by an intertie to the power plant in St. Mary’s. The electricity produced at the St. Mary’s power plant in 2013 was 3,210,594 kWh (total gross). The load is highest during the winter months with the bulk of electricity consumed by residences and the school. The wind resource is also at its highest during the winter months and addition of wind Renewable Energy Fund Round VIII Grant Application – Standard Form St. Mary’s/Pitka’s Point Wind Energy Construction Project AEA 15003 Page 16 of 31 7/2/14 turbines to the electric generation system will reduce the amount of diesel fuel used for power generation, and energy costs will be reduced and stabilized in St. Mary’s and Pitka’s Point. Like all of Alaska, St. Mary’s and Pitka’s Point are subject to long periods of darkness in the winter. Affordable electric service is essential for the operation of home lighting, streetlights, and security lighting. Residents rely on subsistence resources including salmon, moose, bear, and waterfowl. Subsistence food is gathered and harvested and stored in refrigerators and freezers. Refrigeration is essential for the extended storage of perishable foodstuffs, and affordable electric service is essential for proper freeze storage of food. The construction of the proposed project will improve the existing power generation system by incorporating a locally available renewable resource. Electricity rates will decrease as a result of this project. Additional socio-economic impacts are discussed in Section 5: Project Benefits. 4.3 Proposed System Describe the system you are intending to develop and address potential system design, land ownership, permits, and environmental issues. 4.3.1 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  Basic integration concept  Delivery methods Renewable Energy Technology. The project will construct four NPS 100C-24 turbines near Pitka’s Point. The project site is Pitka’s Point Native Corporation land on and near the location of the Pitka’s Point met tower, with boundaries of the Pitka’s Point/St. Mary’s Airport road to the north, a rock quarry to the east, the bluff to the south, and a Native Allotment to the west. AVEC has obtained a letter from Northern Power Systems stating that the larger (24.4 meter) rotor will capture additional energy and that the rotor is suitable for the wind and icing conditions known to occur at the site. Furthermore, Northern Power Systems states that they will rate and warranty the turbine for 20 years. (See Tab F for a copy of the letter from Northern Power Systems.) AVEC has obtained site control on Lot 6 within these general boundaries for turbine siting. Site control of Lot 6 is adequate to place four turbines and additional turbines could be placed at this location in the future, if needed. (See the St. Mary’s, Alaska REF 8 Wind –Diesel Analysis under Tab F for more information.) Renewable Energy Fund Round VIII Grant Application – Standard Form St. Mary’s/Pitka’s Point Wind Energy Construction Project AEA 15003 Page 17 of 31 7/2/14 Optimum installed capacity. AVEC proposes to install four Northern Power Systems NPS 100C-24 to operate as a wind-diesel hybrid power system that will supply wind-generated electricity to St. Mary’s and Pitka’s Point. The aggregate installed wind capacity would be 380 kW. Anticipated capacity factor. HOMER software was used to estimate capacity factor and system penetration (or renewable fraction) of four NPS 100C-24 turbines in a power system. Using the wind data discussed in the analysis under Tab F, at 80% net 80%, the turbine capacity factor is predicted to be 47%. Anticipated annual generation. Four Northern Power Systems NPS 100C-24 wind turbines at 80% net AEP will generate 1,184,814 kWh/year. Of this, 102,526 kWh/year will serve the thermal load at the school as wind-to-heat. Anticipated barriers. No barriers to successful installation and integration of wind turbines in St. Mary’s/Pitka’s Point are expected. The project will be constructed using knowledge of previous successful wind-diesel projects. Basic integration concept. The existing St. Mary’s power plant already contains some of the equipment necessary (upgraded electronic governor engine controls and switchgear) to accept wind-generated electric power. Upgrades to the power plant will include a 600A breaker and feeder installed into the switchgear line-up, a 600 amp secondary load controller (SLC) switching cabinet, dispatcher cabinet and interface cabling with the switchgear and switching cabinet, and an electric boiler with associated mechanical and electrical controls for secondary load. These costs are included in the total construction costs. Delivery methods. The project will construct a new distribution line from the turbines to the existing intertie between St. Mary’s and Pitka’s Point, which connects to the power plant in St. Mary’s. This project will upgrade existing intertie from 2-phase to 3-phase to accommodate the wind turbine generators. 4.3.2 Land Ownership 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. Pitka’s Point Native Corporation has provided 33 acres for the wind farm as an in-kind match for this grant. No negative issues exist related to land ownership on this project. 4.3.3 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 Renewable Energy Fund Round VIII Grant Application – Standard Form St. Mary’s/Pitka’s Point Wind Energy Construction Project AEA 15003 Page 18 of 31 7/2/14  Identify and discuss potential barriers Clean Water Act (Section 401) Permit. A Section 404 Permit (Wetlands Permit) was obtained from the Army Corps of Engineers (USACE) on February 14, 2013. FAA Air Navigation Hazard Permitting. FAA Determinations of No Hazard to Air Traffic were obtained for all turbines on June 9, 2014. There are no barriers related to permitting this project. 4.3.4 Environmental Address 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 discuss other potential barriers Threatened or Endangered species. According to the U.S. Fish and Wildlife Service, Anchorage Field Office, Section 7 Consultation Guide, there are no endangered or listed species, or federally designated critical habitat listed near St. Mary’s or Pitka’s Point. Habitat issues. There are no habitat issues associated with this project. A wetlands permit was previously obtained and no new issues should arise. Wetlands and other protected areas. As mentioned above, there are wetlands in the area. A Section 404 Permit (Wetlands Permit) has been obtained. Archaeological and historical resources. There are no known cultural resources within the area that will be affected by the St. Mary's/Pitka’s Point Wind Turbine Project. The specific project site has not been archaeologically surveyed, but is located in an area of low probability for undiscovered historic and archaeological properties. Compliance with the National Historic Preservation Act through the State Historic Preservation Officer (SHPO) was conducted du ring the wetlands permitting process. Consultation is complete. Land development constraints. AVEC has site control for the wind turbines; therefore, there are no land development constraints. Renewable Energy Fund Round VIII Grant Application – Standard Form St. Mary’s/Pitka’s Point Wind Energy Construction Project AEA 15003 Page 19 of 31 7/2/14 Aviation considerations. As previously mentioned, FAA Determination of No Hazard to Air Traffic has been obtained for the project. Visual, aesthetics impacts. The turbines will be placed between St. Mary’s and Pitka’s Point. Because the turbines will be constructed between the communities, it is likely tha t there will be little concern for visual or aesthetic impacts. Communities often note that their wind turbines and tie lines offer a helpful visual guide point when traveling outside the village. All environmental approvals are in place for this proje ct and there are no barriers to moving forward. 4.4 Proposed New System Costs and Projected Revenues (Total Estimated Costs and Projected Revenues) The level of cost information provided will vary according to the phase of funding requested and any previous work the applicant may have done on the project. Applicants must reference the source of their cost data. For example: Applicants records or analysis, industry standards, consultant or manufacturer’s estimates. 4.4.1 Project Development Cost Provide detailed project cost information based on your current knowledge and understanding of the project. Cost information should include the following:  Total anticipated project cost, and cost for this phase  Requested grant funding  Applicant matching funds – loans, capital contributions, in-kind  Identification of other funding sources  Projected capital cost of proposed renewable energy system  Projected development cost of proposed renewable energy system AVEC is proposing to construct four NPS 100 C-24 wind turbines in Pitka’s Point to serve the communities of St. Mary’s and Pitka’s Point. The project will cost $4,886,000. AVEC requests $4,348,540 from the State of Alaska through a Renewable Energy Fund (REF) award. AVEC will provide $537,460 (11 of construction costs) as a match contribution. No additional funding should be needed for this project. 4.4.2 Project Operating and Maintenance Costs Include anticipated O&M costs for new facilities constructed and how these would be funded by the applicant. (Note: Operational costs are not eligible for grant funds however grantees are required to meet ongoing reporting requirements for the purpose of reporting impacts of projects on the communities they serve.) Renewable Energy Fund Round VIII Grant Application – Standard Form St. Mary’s/Pitka’s Point Wind Energy Construction Project AEA 15003 Page 20 of 31 7/2/14 AVEC estimates the cost of operating and maintaining to be around $59,240 annually. This estimate is based on AEA’s default cost of wind energy of $0.050/kWh (ISER 2014). AVEC will provide the funds to maintain consistent operation of the turbines. 4.4.3 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 AVEC, the existing electric utility serving St. Mary’s and Pitka’s Point, is a member-owned cooperative electric utility and typically owns and maintains the generation, fuel storage, and distribution facilities in the villages it serves. No power purchase or sale will be needed for this project. Identification of potential power buyer(s)/customer(s). Energy produced from the completed wind project will be sold to AVEC’s existing customer base in the communities of St. Mary’s and Pitka’s Point. In 2013, St. Mary’s and Pitka’s Point had 152 households, 38 PCE-eligible and approved community facilities, and 22 PCE-eligible streetlights and 12 non-PCE customers that purchased power from AVEC. Potential power purchase/sales price/Proposed rate of return from grant -funded project. The sales price for the wind-generated electricity will be determined by the Regulatory Commission of Alaska as is done in all AVEC villages. The delivered cost of energy will be reduced as much as possible for customers within St. Mary’s and Pitka’s Point under current regulations. Currently, AVEC villages with wind power systems experience the lowest electricity cost within the utility (5 6 villages). Similar energy cost reductions are expected when this project is constructed. 4.4.4 Project Cost Worksheet Complete the cost worksheet form which provides summary information that will be considered in evaluating the project. Please fill out the form provided below. Renewable Energy Source The Applicant should demonstrate that the renewable energy resource is available on a sustainable basis. Annual average resource availability. Unit depends on project type (e.g. windspeed, hydropower output, biomass fuel) Class 6 (outstanding); mean annual speed 7.62 m/s at 38 m; Weibull k=1.94; Weibull c=8.64 m/s; mean annual power density=558 W/m^2; classifies as IEC 61400-1, 3rd ed., Class II-c site Renewable Energy Fund Round VIII Grant Application – Standard Form St. Mary’s/Pitka’s Point Wind Energy Construction Project AEA 15003 Page 21 of 31 7/2/14 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 3 ii. Rated capacity of generators/boilers/other 499 kW; 611 kW, 908 kW iii. Generator/boilers/other type Diesel generators iv. Age of generators/boilers/other 8 years, 27 years, and 19 years v. Efficiency of generators/boilers/other 13.0 kWh/gallon (2013 PCE Report) b) Annual O&M cost (if system is part of the Railbelt grid, leave this section blank) i. Annual O&M cost for labor $64,212 ($0.02/kWh ISER 2014 R8Prototype spreadsheet) ii. Annual O&M cost for non-labor c) Annual electricity production and fuel usage (fill in as applicable) (if system is part of the Railbelt grid, leave this section blank) i. Electricity [kWh] 3,210,594 kWh (gross generation; 2013 AVEC data) ii. Fuel usage Diesel [gal] 243,184 gal (2013 AVEC data) Other iii. Peak Load 574 kW (March 2013; AVEC data) iv. Average Load 367 kW (2013 AVEC data) v. Minimum Load 282 kW (July 2013; AVEC data) vi. Efficiency 13.0 kWh/gal (2013 PCE Report) vii. Future trends d) Annual heating fuel usage (fill in as applicable) i. Diesel [gal or MMBtu] ii. Electricity [kWh] iii. Propane [gal or MMBtu] iv. Coal [tons or MMBtu] v. Wood [cords, green tons, dry tons] vi. Other Proposed System Design Capacity and Fuel Usage (Include any projections for continued use of non-renewable fuels) 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 VIII Grant Application – Standard Form St. Mary’s/Pitka’s Point Wind Energy Construction Project AEA 15003 Page 22 of 31 7/2/14 a) Proposed renewable capacity (Wind, Hydro, Biomass, other) [kW or MMBtu/hr] 380 kW b) Proposed annual electricity or heat production (fill in as applicable) i. Electricity [kWh] 1,082,292 kWh ii. Heat [MMBtu] 102,526 kWh (349.8 MMBtu) c) Proposed annual fuel usage (fill in as applicable) i. Propane [gal or MMBtu] ii. Coal [tons or MMBtu] iii. Wood or pellets [cords, green tons, dry tons] iv. Other Project Cost a) Total capital cost of new system $4,866,000 b) Development cost c) Annual O&M cost of new system $59,240/year (at $0.05/kWh) d) Annual fuel cost Project Benefits a) Amount of fuel displaced for i. Electricity 83,253 gallon/year (total) ii. Heat 3,079 gallons/year iii. Transportation b) Current price of displaced fuel Diesel for electricity=$4.83/gallon (20 year average; ISER 2014) Diesel for heat at the school=$5.77/gallon (20 year average; ISER 2014) c) Other economic benefits d) Alaska public benefits Power Purchase/Sales Price a) Price for power purchase/sale Renewable Energy Fund Round VIII Grant Application – Standard Form St. Mary’s/Pitka’s Point Wind Energy Construction Project AEA 15003 Page 23 of 31 7/2/14 Project Analysis a) Basic Economic Analysis Project benefit/cost ratio 1.20 Payback (years) 12.61 4.4.5 Impact on Rates Briefly explain what if any effect your project will have on electrical rates in the proposed benefit area. If the is for a PCE eligible utility please discuss what the expected impact would be for both pre and post PCE. St. Mary’s and Pitka’s Point are PCE-eligible communities. St. Mary’s and Pitka’s Point consumers received $270,560 in 2013 in PCE credits for eligible kWh sales to residences and community facilities. About 71% of sales in St. Mary’s and Pitka’s Point were not eligible for PCE. Power sales that are eligible for PCE will see 5% of the benefit of reduced electric costs in their electric rates, with the other 95% accruing to the state of Alaska through reduced PCE credits to end users. The remaining customers, not eligible for PCE, will receive the entire benefit of reduced power costs through their electric rates. SECTION 5– PROJECT BENEFIT Explain the economic and public 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:  Potential annual fuel displacement (gallons and dollars) over the lifetime of the evaluated renewable energy project  Anticipated annual revenue (based on i.e. a Proposed Power Purchase Agreement price, RCA tariff, or cost based rate)  Potential additional annual incentives (i.e. tax credits)  Potential additional annual revenue streams (i.e. green tag sales or other renewable energy subsidies or programs that might be available)  Discuss the non-economic public benefits to Alaskans over the lifetime of the project Potential annual fuel displacement The possible displacement of diesel fuel used for village power and heat generation in St. Mary’s and Pitka’s Point could be about 86,332 gallons/year and 1,726,620 gallons over the project’s 20- year lifetime (assuming 80% turbine availability). About 83,253 gallons/year will be displaced for village power generation, and about 3,079 gallons/year will be displaced from heat generation at the St. Mary’s School. Anticipated annual revenue/Potential additional annual incentives/Potential additional annual revenue streams Renewable Energy Fund Round VIII Grant Application – Standard Form St. Mary’s/Pitka’s Point Wind Energy Construction Project AEA 15003 Page 24 of 31 7/2/14 Tax credits are not expected to be beneficial to the project due to AVEC’s status as a non -profit entity. Nonetheless, in addition to saving the direct cost of fuel, AVEC could sell green tags from the project. Additional economic benefits In St. Mary’s and Pitka’s Point, the average price for residential electricity for the calendar year 2013 was $0.6012 per kWh, which far exceeds the 2013 national average of $0.1212/kWh (U.S. Energy Information Administration). According to the 2008-2011 American Community Survey (ACS), 18.4% of St. Mary’s residents and 21.7% of Pitka’s Point residents had incomes below the poverty level. The median household income in S t. Mary’s was $40,655, and in Pitka’s Point it was $45,625. The poorest residents in rural Alaska, including those in St. Mary’s and Pitka’s Point, spend almost half of their household incomes for overall home energy costs, according to a study by the Institute of Social and Economic Research (ISER). Furthermore, this does not result from greater consumption as these households use less than half as much electricity as those whose power comes from natural gas or hydro-electric sources. This project is part of the solution to stabilize the rising cost of energy for these communities. It is likely that energy costs for PCE customers will be reduced. As stated in Section 4.4.5, power sales that are eligible for PCE will see 5% of the benefit of reduced electric costs in their electric rates, with the other 95% accruing to the State of Alaska through reduced PCE credits to end users. In St. Mary’s, this includes 184 residential and 19 eligible community facility customers. In Pitka’s Point, this includes 29 residential and 6 eligible community facilities customers. It is likely that energy costs for non-PCE community institutions will be reduced allowing for better community services. St. Mary’s is an important hub community in Western Alaska for education and health care. The St. Mary’s Area Regional Training Center (SMART) is a facility that is available to provide adult job training and is also used for retreats and conferences, both educational and cultural, for western Alaska. The St. Mary’s Health Clinic provides services to residents of St. Mary’s and the surrounding communities of Andreafski, Pitka’s Point, Mountain Village, Pilot Station, and Marshall. Affordable and reliable electric service for all the community institutions is crucial but these facilities have regional, as well as local, importance. St. Mary’s has ten facilities and Pitka’s Point has six facilities (community buildings and commercial enterprises) that are not eligible for PCE credits and have decreased their services, hours of operations or made other cut-backs as their electric bills have risen. Reducing their power bills will have a marked positive effect on services to residents. The St. Mary’s City School District has provided a letter of interest in purchasing electricity for heat at the school (Tab B). David Herbert, the school’s superintendent, said in a phone conversation with AVEC’s Community Liaison on August 28, 2013, “If the school district were to see additional savings in energy bills, the district will certainly utilize those savings towards instruction, facilities, salaries, benefits or other needs determined by the district.” Renewable Energy Fund Round VIII Grant Application – Standard Form St. Mary’s/Pitka’s Point Wind Energy Construction Project AEA 15003 Page 25 of 31 7/2/14 It is likely that energy costs for non-PCE commercial energy customers will be reduced and savings will be passed along to residents. Commercial enterprises in the communities are excluded from the PCE program. Once this project is constructed, these entities will see a savings in the cost of electricity. Local businesses, especially the store, may pass this savings along to customers. The development and growth of local businesses like these are crippled by the high cost of energy. Decreases in electricity costs make small businesses more viable in rural Alaskan communities, which in turn makes economic development and the addition of local jobs more likely. By reducing the cost of power production, the stores and other small businesses will see a cost savings that may be passed along to residents in the form of lower product or services prices. Reduced commercial energy costs will benefit the entire community by increasing opportunities for local economic development. Lower costs of energy may allow local businesses to start and flourish. The anticipated benefits of installation of the wind turbines will be reducing the negative impact of the cost of energy by providing a renewable energy alternative. This project could help stabilize energy costs and provide long-term socio-economic benefits to village households. Project construction will benefit local businesses and residents. During construction the local economy will benefit through the project’s purchase of local services (workers’ housing, for example) and goods (food, for example) and construction material s (sand or gravel, for example). In most AVEC construction projects some local hire takes place and this project will not be an exception. The State of Alaska will pay less in PCE subsidies. In 2013, the state paid $270,560 in PCE subsidies for St. Mary’s and Pitka’s Point customers. The state could see 95% of the benefit of reduced electric costs for these consumers once this project is constructed. Non-economic public benefits. FAA requires the turbines to have a lighted beacon that will provide a visual landmark for river, air, and overland travelers, which will help navigation in the area. Wind turbine orientation and rotor speed will provide visual wind information to residents. A project benefit will be reduced fossil fuel emissions, which results in improved local air quality and decreased contribution to global climate change. Locally produced, affordable energy will empower community residents and could help avert rural- to-urban migration. This project will advance state and federal renewable energy goals in both communities. Please also see Section 2.5 (Project Benefits) of this grant application for additional information. 5.1 Public Benefit for Projects with Private Sector Sales Projects that include sales of power to private sector businesses (sawmills, cruise ships, mines, etc.), please provide a brief description of the direct and indirect public benefits derived from the Renewable Energy Fund Round VIII Grant Application – Standard Form St. Mary’s/Pitka’s Point Wind Energy Construction Project AEA 15003 Page 26 of 31 7/2/14 project as well as the private sector benefits and complete the table below. See section 1.6 in the Request for Applications for more information. This project will not provide power to any large private-sector businesses. By reducing the cost of power production, small businesses in St. Mary’s and Pitka’s Point, including the stores (not eligible for PCE), will see a cost savings, which may be passed along to residents in the form of lower product or services prices. Renewable energy resource availability (kWh per month) Estimated sales (kWh) Revenue for displacing diesel generation for use at private sector businesses ($) Estimated sales (kWh) Revenue for displacing diesel generation for use by the Alaskan public ($) SECTION 6– SUSTAINABILITY Discuss your plan for operating the completed project so that it will be sustainable. Include at a minimum:  Proposed business structure(s) and concepts that may be considered.  How you propose to finance the maintenance and operations for the life of the project  Identification of operational issues that could arise.  A description of operational costs including on-going support for any back-up or existing systems that may be require to continue operation  Commitment to reporting the savings and benefits As a local utility that has been in operation since 1968, AVEC is completely able to operate and maintain this project for the design life. It has, with financial assistance from the State of Alaska, the USDA Rural Utilities Service and the Denali Commission, installed 34 turbines in eleven communities with interties to four other communities. In 2013, AVEC’s wind turbines generated 4,662,665 kWh (net) and displaced an estimated 355,593 gallons of diesel fund, saving about $1,387,973 in diesel fuel costs. Business Plan Structures and Concepts which may be considered: The wind turbines will be incorporated into AVEC’s power plant operation. Local plant operators provide daily servicing. AVEC technicians provide periodic preventative or corrective maintenance and are supported by AVEC headquarters staff, purchasing, and warehousing. The sales of excess electric heat will be incorporated into an agreement with the Lower Yukon School District. Operating costs: Using AEA’s default cost of wind energy of $0.050/kWh, estimated O&M will cost $59,240/year. How O&M would be financed for the life of the project: The costs of operations and maintenance will be funded through ongoing energy sales to AVEC’s consumers/member owners Renewable Energy Fund Round VIII Grant Application – Standard Form St. Mary’s/Pitka’s Point Wind Energy Construction Project AEA 15003 Page 27 of 31 7/2/14 in the villages. Operational issues which could arise: Integration of the secondary load controllers for thermal dump (of excess wind-generated energy) and frequency controls will be addressed. AVEC will use the knowledge gained through the operations of other village wind -diesel systems, including its own, to address these issues. Commitment to reporting the savings and benefits: AVEC is fully committed to sharing the savings and benefits information accrued from this project with its member owners and with AEA. SECTION 7 – READINESS & COMPLIANCE WITH OTHER GRANTS Discuss what you have done to prepare for this award and how quickly you intend to proceed with work once your grant is approved. Tell us what you may have already accomplished on the project to date and identify other grants that may have been previously awarded for this project and the degree you have been able to meet the requirements of previous grants. Work provided under this grant award will be initiated immediately. Previously awarded REF funds have been used to determine feasibility, complete design and permitting, and obtain site control. Once Round 8 funding is known to be secured, AVEC will select a contractor and prepare and sign contracts. SECTION 8 – LOCAL SUPPORT AND OPPOSITION Discuss local support and opposition, known or anticipated, for the project. Include letters of support or other documentation of local support from the community that would benefit from this project. The Documentation of support must be dated within one year of the RFA date of July 2, 2014 The communities of St. Mary’s and Pitka’s Point support this project. Letters of support have been received from ALL entities in the area, including: Pitka’s Point Traditional Council and Native Corporation, and the City of St. Mary’s, St. Mary’s Native Corporation, Nerklikmute (St. Mary’s) Native Corporation, and the Yupiit of Andreafski (tribe). Please see attached letters of support under Tab B. Another important demonstration of support is the real commitment of the communities through their contributions of their land to past and future AVEC capital projects. Pitka’s Point has contributed as an in-kind match of the land (50-year lease and agreement) for the wind turbines. Using their very conservative value of $1,000/acre for the 33 acre parcel, this represents very strong community support and a significant in-kind contribution to the project. Please see attached letters of support and commitment. This in-kind match has not been incorporated into Renewable Energy Fund Round VIII Grant Application – Standard Form St. Mary’s/Pitka’s Point Wind Energy Construction Project AEA 15003 Page 28 of 31 7/2/14 the total project costs, as that negatively impacts the benefit/cost ratio of the project; however , it shows real and tangible support for the project. SECTION 9 – GRANT BUDGET Tell us how much you are seeking in grant funds. Include any investments to date and funding sources, how much is being requested in grant funds, and additional investments you will make as an applicant. 9.1 Funding sources and Financial Commitment Provide a narrative summary regarding funding source and your financial commitment to the project AVEC is proposing to construct four NPS 100C-24 wind turbines in Pitka’s Point to serve the communities of St. Mary’s and Pitka’s Point. The project will cost $4,886,000. AVEC requests $4,348,540 from the State of Alaska through a Renewable Energy Fund (REF) award. AVEC will provide $537,460 (11% of construction costs) as a match contribution. 9.2 Cost Estimate for Metering Equipment Please provide a short narrative, and cost estimate, identifying the metering equipment, and its related use to comply with the operations reporting requirement identified in Section 3.15 of the Request for Applications. AVEC has meters installed on all of the wind turbines in their fleet. T he meter that would be installed for this project would be an Elster 16s (part number ZD3300K0082). This meter costs about $400. Renewable Energy Fund Round VIII Grant Application – Standard Form St. Mary’s/Pitka’s Point Wind Energy Construction Project AEA 15003 Page 29 of 31 7/2/14 Milestone or Task Anticipate d Completio n Date RE- Fund Grant Funds Grantee Matching Funds Source of Matching Funds: Cash/In- kind/Federal Grants/Other State Grants/Other TOTALS 1. Design and Feasibility Requirements are Complete Aug 2015 $- $- $- 2. Bid Documents Completed Oct 2015 $- $- $- 3. Vendor Selected and Award in place May 2016 $- $- $- 4. Construction Phase Nov 2016 Site work mobilization May 2016 $115,700 $14,300 Cash $130,000 Site work materials and labor June 2016 $705,147 $87,153 Cash $792,300 Distribution materials and labor July 2016 1,001,324 $123,759 Cash $1,125,083 Turbine/crane mobilization Aug 2016 $286,580 $35,420 Cash $322,000 Turbine installation Sept 2016 $1,477,400 $182,600 Cash $1,660,000 Power plant improvements Oct 2016 $452,669 $55,948 Cash $508,617 School heat Sept 2016 $178,000 $22,000 Cash $200,000 Demobilization Sept 2016 $115,700 $14,300 $130,000 5. Integration and Testing N/A (in constructio n costs) $- $- $- 6. Decommissioning Old Systems N/A $- $- $- 7. Final Acceptance, Commissioning and Start-up Nov 2016 $16,020 $1,980 Cash $18,000.00 8. Operations Reporting N/A $- $- $- TOTALS $4,348,540 $537,460 $4,886,000 Budget Categories: Direct Labor & Benefits $617,319 $76,298 Cash $693,617 Travel & Per Diem $13,350 $1,650 Cash $15,000 Equipment $- $- $- Materials & Supplies $- $- $- Contractual Services $- $- $- Construction Services $3,717,871 $459,512 Cash $4,177,383 Other $- $- $- TOTALS $4,348,540 $537,460 $4,886,000 Renewable Energy Fund Round VIII Grant Application - Standard Form LD ALAS ______ ENERGY AUTHORITY St. Mary's/Pitka's Point Wind Energy Construction Project SECTION 10—AUTHORIZED SIGNERS FORM I Community/Grantee Name: Alaska Village Electric Cooperative, Inc. Regular Election is held: Annually Date: March Authorized Grant Signer(s): Printed Name Title Term Signature Meera Kohler President and CEO unlimited I authorize the above person(s) to sign Grant Documents: (Highest ranking organization/community/municipal official) Printed Name Title Term Signature Meera Kohler President and CEO unlimited Lø U3 Grantee Contact Information: Mailing Address: 4831 Eagle Street Anchorage, AK 99503 Phone Number: 907-478-1818 Fax Number: 907-478-4086 E-mail Address: mkohler@avec.org Federal Tax ID #: 92-0035763 Please submit an updated form whenever there is a change to the above information. SECTION 11 -ADDITIONAL DOCUMENTATION AND CERTIFICATION I AEA 15003 Page 3Oof3l 7/2/14 Tab B Letters of Support City of St. Mary's P.O. Box 209 Saint Mary's, Alaska 99658 Telephone: (907)438-2515 Fax: (907)438-2719 July 9,2014 Meera Kohler, President and CEO AIaska Village Eleotric Cooperative, Inc. 4831 Eagle Street Anchorage, Alaska 99503 Regarding: Letter of Support for the St. Mary's Wind Energy Construction Project Dear Ms. Kohler: The City of St. Mary's understands that the Alaska Village Eleotrio Cooperative, lnc- favgci is seeking iunding through Round 8 the Renewable Energy Fund for construction of a new wind farm in St. Mary's. This project is very important to the S!' Mary's area' including pitka's point, Andreafski, and Mountain Village, and we would like to offer our support. We offer this support beoause the wind farm will reduce and stabitize energy costs throu-gh the reduction of generator fuel use. It will also result in more available energy for heat for .or*uoity faciliiies in St. Mary's. It will benefit regional entities such as the St. Mary's Health Clinic and Regional Training Center that serves St. Mary's, Andreafski, Pitka's point, Mountain Villige, Pilot Statlon, and Marshall through reduced energy costs. The proieot would benefit itfi*r non-PCE (Power Cost Equalization) community institutions and businesses through reduced energy oosts, which may allow for increased or improved cornmunity or social services. This project will take a big step forward in achieving state and federal renewable energy loals^initre st. Mary's are-a. It-is also an importan-t step toward providing renewable En.rgy to nearby Mountain Village via a planned future intertie.. The city of Saint Mary's fully supports the wind farm project' AVEC is welcome to include this letter in the grant application' Alstrom, MaYor Tab C Heat Project Information No information provided in this section. Not applicable to this project. Tab D Authority Tab E Certification Renewable Energy Fund Round VIII ALASKA Grant Application - Standard Form 41111111111L ., ENERGY AUTHORITY St. Mary's/Pitka's Point W i nd Energy Construction Project I SUBMIT THE FOLLOWING DOCUMENTS WITH YOUR APPLICATION: A.Contact information and resumes of Applicant's Project Manager, Project Accountant(s), key staff, partners, consultants, and suppliers per application form Section 3.1, 3.4 and 3.6. Applicants are asked to provide resumes submitted with applications in separate electronic documents if the individuals do not want their resumes posted to the project web site. B.Letters or resolutions demonstrating local support per application form Section 8. C.For projects involving heat: Most recent invoice demonstrating the cost of heating fuel for the building(s) impacted by the project. D.Governing Body Resolution or other formal action taken by the applicant's governing body or management per RFA Section 1.4 that: - Commits the organization to provide the matching resources for project at the match amounts indicated in the application. - Authorizes the individual who signs the application has the authority to commit the organization to the obligations under the grant. - Provides as point of contact to represent the applicant for purposes of this application. - Certifies the applicant is in compliance with applicable federal, state, and local, laws including existing credit and federal tax obligations. E.An electronic version of the entire application on CD or other electronic media, per RFA Section 1.7. F.CERTIFICATION The undersigned certifies that this application for a renewable energy grant is truthful and correct, and that the applicant is in compliance with, and will continue to comply with, all federal and state laws including existing credit and federal tax obligations and that they can indeed commit the entity to these obligations. Print Name Meera Kohler Signature 5L/V Title President and CEO Date 0~~ I (V~ ~ q AEA 15003 Page 31 of 31 7/2/14 Tab F Additional Materials Saint Mary’s, Alaska REF 8 Wind-Diesel Project Analysis August 27, 2014 Douglas Vaught, P.E. dvaught@v3@energy.com V3 Energy, LLC Eagle River, Alaska Saint Mary’s, Alaska REF 8 Wind-Diesel Project Analysis Page | i This report was prepared by V3 Energy, LLC under contract to Alaska Village Electric Cooperative to assess the technical and economic feasibility of installing wind turbines at the Pitka’s Point wind site, which is located near the villages of Saint Mary’s and Pitka’s Point. This analysis is part of a conceptual design report and final project design funded in Round 4 of the Renewable Energy Fund administered by Alaska Energy Authority. Contents Introduction ............................................................................................................................................ 3 Village of St. Mary’s/Andreafsky .......................................................................................................... 3 Wind Resource at Pitka’s Point and Saint Mary’s ..................................................................................... 3 Wind Speed ......................................................................................................................................... 5 Extreme Winds .................................................................................................................................... 7 Wind Direction .................................................................................................................................... 8 Temperature and Density .................................................................................................................... 8 Wind-Diesel System Design and Equipment ............................................................................................. 9 Proposed System Configuration ..................................................................................................... 10 Diesel Power Plant ............................................................................................................................. 10 Wind Turbine..................................................................................................................................... 10 Load Demand ........................................................................................................................................ 11 St. Mary’s Electric Load ...................................................................................................................... 11 Recovered Heat Loop Thermal Load .................................................................................................. 11 Saint Mary’s School Wind-to-Heat ..................................................................................................... 12 Diesel Generators .............................................................................................................................. 12 Model Results .................................................................................................................................... 13 WAsP Modeling, Wind Turbine Layout................................................................................................... 15 Orographic Modeling ......................................................................................................................... 15 Wind Turbine Project Site .................................................................................................................. 16 NPS 100C-24 Turbine Layout .............................................................................................................. 17 WAsP Modeling Results for NPS 100C-24 Turbine Array ................................................................. 18 Alternate Turbine Layout ................................................................................................................... 18 WAsP Modeling Results for Alternate NPS 100C-24 Array .............................................................. 19 Economic Analysis ................................................................................................................................. 20 Project Capital Cost ........................................................................................................................... 20 Saint Mary’s, Alaska REF 8 Wind-Diesel Project Analysis Page | ii Fuel Cost ........................................................................................................................................... 20 Modeling Assumptions ...................................................................................................................... 20 Economic Valuation ........................................................................................................................... 22 Conclusion ............................................................................................................................................. 22 Appendix A, WAsP Wind Farm Report, Pitka’s Point Site, NPS 100C-24 Turbines ...................................... A Appendix B, WAsP Turbine Site Report, Alternate NPS 100C-24 Layout ................................................... B Saint Mary’s, Alaska REF 8 Wind-Diesel Project Analysis Page | 3 Introduction Alaska Village Electric Cooperative (AVEC) is the electric utility for the City of Saint Mary’s/Andreafsky as well as the interconnected village of Pitka’s Point. AVEC was awarded a grant from the Alaska Energy Authority (AEA) to complete feasibility and design work for installation of wind turbines, with planned construction completion and commencement of operational status in 2015. Wind resource studies of the St. Mary’s area began in 2007 with identification of possible wind turbine sites on Pitka’s Point Corporation land and Saint Mary’s corporation land, located relatively near each other between the villages of Saint Mary’s and Pitka’s Point. Both sites were equipped with 40 meter met towers, but the Pitka’s Point site eventually proved to have the superior wind resource and was chosen as the primary site for conceptual design and feasibility work. CRW Engineering Group, LLC was contracted by AVEC to develop a design package for a wind turbine project in Saint Mary’s. This analysis is a component of that larger effort. Village of St. Mary’s/Andreafsky St. Mary's is located 450 air miles west-northwest of Anchorage on the north bank of the Andreafsky River, five miles from its confluence with the Yukon River. The City of St. Mary's encompasses the Yupik villages of St. Mary's and Andreafsky. St. Mary's is a Yupik Eskimo community that maintains a fishing and subsistence lifestyle. The sale of alcohol is prohibited in the city. According to Census 2010, 507 people live in St. Mary’s and Andreafsky. There are 209 housing units in the community and 151 are occupied. Its population is 91.5 percent Alaska Native, 3.8 percent Caucasian, and 4.7 percent multi- racial. Water is derived from Alstrom Creek reservoir and is treated. Most homes in the village have complete plumbing and are connected to the piped water and sewer system. Waste heat from the power plant supports the circulating water system. A 1.7-million-gallon sewage lagoon provides waste treatment. A washeteria is available nearby at Pitka's Point. An unpermitted landfill is shared with Pitka's Point. Electricity is provided by AVEC with interconnection to the village of Pitka’s Point and the St. Mary’s airport (station code KSM). There is one school located in the community, attended by 185 students. There is a local health clinic staffed by a health practitioner and four health aides. Emergency Services have river, limited highway, and air access. Wind Resource at Pitka’s Point and Saint Mary’s The wind resource measured at the Pitka’s Point met tower site is Class 6 (outstanding) by measurement of wind power density and wind speed. Extensive wind resource analysis has been conducted in the Saint Mary’s region, with a met tower at a lower elevation site near Saint Mary’s and another met tower near Mountain Village, in addition to the Pitka’s Point met tower. Documented in Saint Mary’s Area Saint Mary’s, Alaska REF 8 Wind-Diesel Project Analysis Page | 4 Wind Power Report by V3 Energy, LLC, dated July 20, 2010, the wind resource measured at the nearby Saint Mary’s met tower site is less robust than that measured at Pitka’s Point and appears to experience similar icing problems. The Mountain Village wind resource is excellent with mean wind speed near that measured at Pitka’s Point. Considering the inland location of Saint Mary’s/Pitka’s Point, the wind resource measure at the Pitka’s Point met tower site is highly unusual, and very favorable, with its combination of a high annual average wind speed, relatively low elevation, likely good geotechnical conditions, and proximity to existing roads and infrastructure. A 40 meter NRG Systems, Inc. tubular-type meteorological (met) tower was installed on Pitka’s Point Native Corporation land on the bluff immediately above the Yukon River with excellent exposure to northeasterly winds down the Andreafsky River, northerly winds from the mountains and southerly winds from the flat, tundra plains leading toward Bethel. The met tower site is near an active rock quarry and visual inspection of that quarry indicates the likelihood of excellent geotechnical conditions for wind turbine foundations. Also of advantage for the site is near proximity of the road connecting Saint Mary’s to Pitka’s Point, the airport and Mountain Village. A two-phase power distribution line (connecting the St. Mary’s powerplant to Pitka’s Point as one phase and to the airport as the second phase) routes on the south side of the road. This line could be upgraded to three-phase at relatively low cost to connect wind turbines to three-phase distribution in Saint Mary’s. The Pitka’s Point wind resource is comprehensively described in Pitka’s Point, Alaska Wind Resource Report by V3 Energy, LLC, dated April 25, 2012 and included in Appendix A of this report. Pitka’s Point met tower data synopsis Data dates October 26, 2007 to February 12, 2009 (16 months) Wind power class Class 6 (excellent), based on wind power density Wind power density mean, 38 m 558 W/m2 Wind speed mean, 38 m 7.62 m/s (17.0 mph) Max. 10-min wind speed 29.5 m/s Maximum 2-sec. wind gust 26.3 m/s (81.2 mph), January 2008 Weibull distribution parameters k = 1.94, c = 8.64 m/s Wind shear power law exponent 0.176 (low) Roughness class 2.09 (description: few trees) IEC 61400-1, 3rd ed. classification Class II-c (at 38 meters) Turbulence intensity, mean (at 38 m) 0.076 (at 15 m/s) Calm wind frequency (at 38 m) 20% (< 4 m/s) (16 mo. measurement period) Saint Mary’s, Alaska REF 8 Wind-Diesel Project Analysis Page | 5 Google Earth image, Pitka’s Point and Saint Mary’s Pitka’s Point met tower location Wind Speed Anemometer data obtained from the met tower, from the perspectives of both mean wind speed and mean wind power density, indicate an outstanding wind resource. Note that cold temperatures contributed to a higher wind power density than standard conditions would yield for the measured mean wind speeds. St. Mary’s Saint Mary’s, Alaska REF 8 Wind-Diesel Project Analysis Page | 6 Pitka’s Point met tower anemometer data summary Variable Speed 38 m Speed 29 m Speed 28 m IceFree Speed 21 m Measurement height (m) 38 28.8 28.2 21 MoMM wind speed (m/s) 7.62 7.24 7.33 6.78 Max 10-min avg wind speed (m/s) 29.5 29.2 27.5 28.4 Weibull k 1.94 1.89 2.22 1.88 Weibull c (m/s) 8.64 8.20 8.26 7.68 MoMM power density (W/m²) 559 490 441 404 MoMM energy content (kWh/m²/yr) 4,897 4,294 3,861 3,541 Energy pattern factor 1.95 2.00 1.73 2.01 Frequency of calms (%) (< 4 m/s) 20.4 21.9 17.6 24.7 MoMM = mean of monthly means Time series calculations indicate high mean wind speeds during the winter months with more moderate, but still relatively high, mean wind speeds during summer months. This correlates well with the Saint Mary’s/Andreafsky/Pitka’s Point village load profile where winter months see high demand for electricity and heat and the summer months have lower demand for electricity and heat. The daily wind profiles indicate relatively even wind speeds throughout the day with slightly higher wind speeds during night hours. 38 m anemometer data summary Mean Median Max 10- min avg Max gust (2 sec) Std. Dev. Weibull k Weibull c Month (m/s) (m/s) (m/s) (m/s) (m/s) (-) (m/s) Jan 10.17 10.70 29.5 35.9 5.34 1.97 11.45 Feb 9.21 9.20 20.1 23.3 4.07 2.41 10.36 Mar 8.62 8.50 21.8 26.3 4.33 2.07 9.71 Apr 7.98 7.80 16.9 20.6 2.83 3.05 8.90 May 7.27 6.90 21.8 27.1 3.67 2.06 8.19 Jun 5.70 5.80 13.2 15.3 2.62 2.28 6.40 Jul 7.98 7.70 21.7 26.3 3.33 2.55 8.99 Aug 5.89 5.70 15.3 17.9 2.95 2.05 6.62 Sep 6.37 6.70 12.5 16.8 2.44 2.85 7.11 Oct 6.80 6.60 20.1 24.8 3.81 1.80 7.62 Nov 7.32 6.40 24.1 29.8 4.48 1.72 8.23 Dec 8.97 8.90 22.9 27.5 4.69 1.95 10.07 Annual 7.62 7.20 29.5 35.9 4.09 1.94 8.64 Saint Mary’s, Alaska REF 8 Wind-Diesel Project Analysis Page | 7 Monthly time series, mean wind speeds Extreme Winds A modified Gumbel distribution analysis, based on monthly maximum winds vice annual maximum winds, was used to predict extreme winds at the Pitka’s Point met tower site. Sixteen months of data though are minimal at best and hence results should be viewed with caution. Nevertheless, with data available the predicted Vref (maximum ten-minute average wind speed) in a 50 year return period (in other words, predicted to occur once every 50 years) is 41.6 m/s. This result classifies the site as Class II by International Electrotechnical Commission 61400-1, 3rd edition (IEC3) criteria. IEC extreme wind probability classification is one criteria – with turbulence the other – that describes a site with respect to suitability for particular wind turbine models. Note that the IEC3 Class II extreme wind classification, which applies to the Pitka’s Point met tower site, clearly indicates relatively energetic winds and turbines installed at this location should be IEC3 Class II rated. Site extreme wind probability table, 38 m data Vref Gust IEC 61400-1, 3rd ed. Period (years) (m/s) (m/s) Class Vref, m/s 3 29.2 35.5 I 50.0 10 35.4 43.1 II 42.5 20 37.0 45.0 III 37.5 30 39.6 48.2 S designer- specified 50 41.6 50.6 100 44.2 53.8 average gust factor: 1.22 Saint Mary’s, Alaska REF 8 Wind-Diesel Project Analysis Page | 8 Wind Direction Wind frequency and wind energy roses indicate that winds at the Pitka’s Point met tower site are primarily bi-directional, with northerly and east-northeasterly winds predominating. A mean value rose indicates that east-northeasterly winds are of higher intensity than northerly winds, but interesting, the infrequent south-southeasterly winds, when they do occur, are highly energetic and likely indicative of storm winds. Wind frequency rose (38 m vane) Wind energy rose (38 m anem.) Temperature and Density The Pitka’s Point met tower site experiences cool summers and cold winters with resulting higher than standard air density. Calculated annual air density during the met tower test period exceeds the 1.204 kg/m3 standard air density for a 177 meter elevation by 5.7 percent. This is advantageous in wind power operations as wind turbines produce more power at low temperatures (high air density) than at standard temperature and density. Temperature and density table (incl. synthesized data) Mean Min Max Mean Min Max Mean Min Max Month (°F) (°F) (°F) (°C) (°C) (°C) (kg/m³) (kg/m³) (kg/m³) Jan 4.7 -20.2 39.0 -15.1 -29.0 3.9 1.341 1.248 1.416 Feb 4.1 -24.7 32.4 -15.5 -31.5 0.2 1.343 1.264 1.430 Mar 11.0 -14.3 38.8 -11.7 -25.7 3.8 1.323 1.248 1.397 Apr 19.5 -6.3 44.2 -7.0 -21.3 6.8 1.299 1.235 1.372 May 39.4 13.8 65.5 4.1 -10.1 18.6 1.247 1.185 1.314 Jun 49.2 29.5 70.2 9.5 -1.4 21.2 1.223 1.174 1.272 Jul 50.5 37.9 81.9 10.3 3.3 27.7 1.220 1.149 1.250 Aug 51.3 33.1 70.9 10.7 0.6 21.6 1.218 1.173 1.263 Saint Mary’s, Alaska REF 8 Wind-Diesel Project Analysis Page | 9 Sep 45.1 30.0 64.6 7.3 -1.1 18.1 1.233 1.187 1.270 Oct 22.7 5.0 37.2 -5.2 -15.0 2.9 1.290 1.252 1.339 Nov 16.3 -14.6 44.6 -8.7 -25.9 7.0 1.308 1.234 1.398 Dec 13.9 -16.2 45.0 -10.1 -26.8 7.2 1.315 1.233 1.403 Annual 27.3 -24.7 81.9 -2.6 -31.5 27.7 1.280 1.149 1.430 Wind-Diesel System Design and Equipment Wind-diesel power systems are categorized based on their average penetration levels, or the overall proportion of wind-generated electricity compared to the total amount of electrical energy generated. Commonly used categories of wind-diesel penetration levels are low penetration, medium penetration, and high penetration. The wind penetration level is roughly equivalent to the amount of diesel fuel displaced by wind power. Note however that the higher the level of wind penetration, the more complex and expensive of a control system and demand-management strategy required. Medium penetration is a good compromise between of displaced fuel usage and relatively minimal system complexity and is AVEC’s preferred system configuration. Installation of four NPS 100C-24 wind turbines at the Pitka’s Point site would be configured at the medium penetration level. Categories of wind-diesel penetration levels Penetration Category Wind Penetration Level Operating Characteristics and System Requirements Instantaneous Average Very Low <60% <8% • Diesel generator(s) runs full time • Wind power reduces net load on diesel • All wind energy serves primary load • No supervisory control system Low 60 to 120% 8 to 20% • Diesel generator(s) runs full time • At high wind power levels, secondary loads are dispatched to insure sufficient diesel loading, or wind generation is curtailed • Relatively simple control system Medium 120 to 300% 20 to 50% • Diesel generator(s) runs full time • At medium to high wind power levels, secondary loads are dispatched to insure sufficient diesel loading • At high wind power levels, complex secondary load control system is needed to ensure heat loads do not become saturated • Sophisticated control system High (Diesels-off Capable) 300+% 50 to 150% • At high wind power levels, diesel generator(s) may be shut down for diesels-off capability • Auxiliary components required to regulate voltage and frequency • Sophisticated control system Saint Mary’s, Alaska REF 8 Wind-Diesel Project Analysis Page | 10 Proposed System Configuration In general, medium penetration is a design compromise that enables a relatively large amount of displaced fuel usage with a moderate degree of system complexity. Medium penetration is AVEC’s preferred system configuration and is the only one considered in this analysis. Diesel Power Plant Electric power (comprised of the diesel power plant and the electric power distribution system) in Saint Mary’s is provided by AVEC. The existing power plant in Saint Mary’s consists of one Cummins diesel generator model QSX15G9 rated at 499 kW output, and two Caterpillar diesel generators, a model 3508 rated at 611 kW output and a model 3512 rated at 908 kW output. St. Mary’s power plant diesel generators Generator Electrical Capacity Diesel Engine Model 1 499 kW Cummins QSX15G9 2 611 kW Caterpillar 3508 3 908 kW Caterpillar 3512 Wind Turbine This report considers installation of four Northern Power Systems’ NPS 100C-24 wind turbines for 380 kW installed wind capacity to serve the Saint Mary’s/Andreafsky and Pitka’s Point combined load. The NPS 100C-24 is rated at 95 kW and is equipped with a permanent magnet, synchronous generator for direct drive (no gearbox) operation. The turbine has a 24.4 meter diameter rotor and will be equipped with a 23 meter tower for this installation. The turbine is stall-controlled and in the proposed version will be equipped with an arctic package enabling continuous operation at temperatures to -40° C. The NPS 100 is the most widely represented village-scale wind turbine in Alaska with a significant number of installations in the Yukon-Kuskokwim Delta and on St. Lawrence Island. The NPS 100 wind turbine is manufactured in Barre, Vermont, USA. More information can be found at http://www.northernpower.com/. The power curve of the NPS 100C-24 is shown below, adjusted for the measured site density of 1.280 kg/m^3. NPS 100C-24 power and thrust curves (rho=1.280 kg/m^3) Saint Mary’s, Alaska REF 8 Wind-Diesel Project Analysis Page | 11 Load Demand This analysis includes stand-alone electric and thermal load demand in St. Mary’s (which includes Andreafsky and Pitka’s Point). St. Mary’s Electric Load Saint Mary’s/Andreafsky load data, collected from December 26, 2009 to October 27, 201 1, was received from Mr. Bill Thompson of AVEC. These data are in 15 minute increments and represent total electric load demand during each time step. The data were processed by adjusting the date/time stamps nine hours from GMT to Yukon/Alaska time, multiplying each value by four to translate kWh to kW (similar to processing of the wind turbine data), and creating January 1 to December 31 hourly load data for export to HOMER software. The resulting load is shown graphically below. Average load is 354 kW with a 621 kW peak load and an average daily load demand of 8,496 kWh. This was revised to an average daily load demand of 8,965 kWh in this report to account for recent load growth in the community as documented in the 2013 PCE Report. St. Mary’s electric load Recovered Heat Loop Thermal Load The thermal load demand served by the diesel engine recovered heat loop is well quantified and described in a report entitled St. Mary’s, Alaska Heat Recovery Study, prepared for the Alaska Energy Authority by Alaska Energy and Engineering, Inc., dated August 31, 2011. Thermal load data needed for HOMER modeling was extracted from a heat demand/heat available graph on page 5 of the report. Monthly thermal heat demand is graphed as a heating fuel equivalent in gallons per month, which was converted to kW demand with a conversion of 0.0312 gallons heating fuel per kWh. Although not entirely precise, the monthly heat demand was equalized across the entire day for each month and then randomized with a five percent day-to-day and five percent time step-to-time step random variability. Resulting thermal load is show below. Saint Mary’s, Alaska REF 8 Wind-Diesel Project Analysis Page | 12 Saint Mary’s thermal load Saint Mary’s School Wind-to-Heat Given that the thermal loads served by the recovered heat loop are relatively small compared to the thermal output of the diesel engines, even with wind turbines, AVEC has decided to locate a secondary load controller and electric boiler in the Saint Mary’s school and operate it as a remote node wind-to- heat location. This will augment another secondary load controller and electric boiler to be located in the recovered heat loop. Saint Mary’s school fuel usage Diesel Generators The HOMER model was constructed with all three St. Mary’s generators. Information pertinent to the HOMER model is shown in the table below. Note that the Saint Mary’s power plant is equipped with automated switchgear and can run in automatic mode with generators operating in parallel. Month Fuel Usage (gal) Energy Equivalent (MMBtu) Energy Equivalent (kWh) 1 4,800 642 188,160 2 4,600 615 180,320 3 4,200 562 164,640 4 3,200 428 125,440 5 1,900 254 74,480 6 1,100 147 43,120 7 800 107 31,360 8 1,000 134 39,200 9 1,600 214 62,720 10 2,900 388 113,680 11 3,900 522 152,880 12 5,000 669 196,000 Annual 35,000 4,681 1,372,000 Saint Mary’s, Alaska REF 8 Wind-Diesel Project Analysis Page | 13 Diesel generator HOMER modeling information Diesel generator Cummins QSX15G9 Caterpillar 3508 Caterpillar 3512 Power output (kW) 499 611 908 Intercept coeff. (L/hr/kW rated) .0222 0.0233 0.0203 Slope (L/hr/kW output) 0.215 0.238 0.233 Minimum electric load (%) 15% (75 kW) 15% (92 kW) 15% (136 kW) Heat recovery ratio (% of waste heat that can serve the thermal load) 22 22 22 Intercept coefficient – the no-load fuel consumption of the generator divided by its capacity Slope – the marginal fuel consumption of the generator Diesel generator efficiency curves Fuel efficiency curve, QSX15G9 Fuel efficiency curve, Cat 3508 Fuel efficiency curve, Cat 3508 Model Results HOMER energy modeling software was used to calculate wind turbine energy production and excess energy available (not demanded by the electrical load). Note that inclusion of wind turbines as a wind- diesel power system, even at lower penetration levels, results in energy generation greater than electrical load demand. This is due to spinning reserve and minimum diesel loading requirements, and is expressed excess energy. Note that wind turbine energy production in these analyses is calculated at 80 percent net. Energy table, four NPS 100C-24 turbines, 80% net AEP Row Labels Sum of Wind Energy (kWh) Sum of Load Demand (kWh) Sum of Energy Generated (kWh) Sum of Wind-to- Electric (kWh) Sum of Wind- to-Heat (kWh) Average of Wind Penetration (%) Max of Wind Penetration (%)2 1 125,320 324,719 329,955 120,085 5,236 39.2% 114.0% 2 127,985 286,118 293,593 120,511 7,475 45.5% 112.5% 3 130,165 316,072 322,113 124,124 6,041 41.7% 111.2% 4 98,645 278,631 286,298 90,978 7,667 36.2% 121.9% Saint Mary’s, Alaska REF 8 Wind-Diesel Project Analysis Page | 14 Row Labels Sum of Wind Energy (kWh) Sum of Load Demand (kWh) Sum of Energy Generated (kWh) Sum of Wind-to- Electric (kWh) Sum of Wind- to-Heat (kWh) Average of Wind Penetration (%) Max of Wind Penetration (%)2 5 97,608 256,474 268,673 85,409 12,199 39.0% 164.9% 6 60,487 221,811 229,224 53,074 7,413 28.1% 174.7% 7 119,313 227,939 254,300 92,953 26,360 52.9% 153.0% 8 64,371 243,701 249,394 58,678 5,693 26.8% 146.6% 9 69,105 241,806 249,662 61,248 7,856 29.9% 149.8% 10 79,902 275,514 282,137 73,278 6,623 30.1% 135.0% 11 93,966 287,784 292,469 89,281 4,685 33.1% 124.0% 12 117,947 311,651 316,929 112,669 5,278 38.7% 109.3% Grand Total 1,184,814 3,272,220 3,374,746 1,082,287 102,526 36.8% 174.7% Chart, four NPS 100C-24 turbines - 50,000 100,000 150,000 200,000 250,000 300,000 350,000 1 2 3 4 5 6 7 8 9 10 11 12 Sum of Wind Energy (kWh) Sum of Load Demand (kWh) Sum of Energy Generated (kWh) Sum of Wind-to-Electric (kWh) Sum of Wind-to-Heat (kWh) Average of Wind Penetration (%) Max of Wind Penetration (%)2 Saint Mary’s, Alaska REF 8 Wind-Diesel Project Analysis Page | 15 Wind-to-Heat Table WAsP Modeling, Wind Turbine Layout WAsP (Wind Atlas Analysis and Application Program) and is PC-based software for predicting wind climates, wind resources and power production from wind turbines and wind farms and was used to model the Pitka’s Point terrain and wind turbine performance. WAsP software calculates gross and net annual energy production (AEP) for turbines contained within wind farms, such as an array of two or more turbines in proximity to each other. For s single turbine array, WAsP calculates gross AEP. With one turbine, net AEP is identical to gross AEP as there is no wake loss to consider. Orographic Modeling WAsP modeling begins with import of a digital elevation map (DEM) of the subject site and surrounding area and conversion of coordinates to Universal Transverse Mercator (UTM). UTM is a geographic coordinate system that uses a two-dimensional Cartesian coordinate system to identify locations on the surface of Earth. UTM coordinates reference the meridian of its particular zone (60 longitudinal zones are further subdivided by 20 latitude bands) for the easting coordinate and distance from the equator for the northing coordinate. Units are meters. Elevations of the DEMs are converted to meters (if necessary) for import into WAsP software. A met tower reference point is added to the digital elevation map, wind turbine locations identified, and a wind turbine(s) selected to perform the calculations. WAsP considers the orographic (terrain) effects on the wind (plus surface roughness and obstacles) and calculates how wind flow increases or decreases at each node of the DEM grid. The mathematical model has a number of limitations, including the assumption of overall wind regime of the turbine site is the same as the met tower reference site, prevailing weather conditions are stable over time, and the surrounding terrain at both sites is sufficiently gentle and smooth to ensure laminar, attached wind flow. WAsP software is not capable of modeling turbulent wind flow resulting from sharp terrain features such as mountain ridges, canyons, shear bluffs, etc. Month Fuel Usage (gal) Energy Equivalent (MMBtu) Energy Equivalent (kWh) Wind-to- Heat (kWh) Wind-to- Heat (% load) 1 4,800 642 188,160 5,236 2.8% 2 4,600 615 180,320 7,475 4.1% 3 4,200 562 164,640 6,041 3.7% 4 3,200 428 125,440 7,667 6.1% 5 1,900 254 74,480 12,199 16.4% 6 1,100 147 43,120 7,413 17.2% 7 800 107 31,360 26,360 84.1% 8 1,000 134 39,200 5,693 14.5% 9 1,600 214 62,720 7,856 12.5% 10 2,900 388 113,680 6,623 5.8% 11 3,900 522 152,880 4,685 3.1% 12 5,000 669 196,000 5,278 2.7% Annual 35,000 4,681 1,372,000 102,526 7.5% Saint Mary’s, Alaska REF 8 Wind-Diesel Project Analysis Page | 16 Orographic modeling of wind across the site, with the Pitka’s Point met tower as the reference site, indicates an outstanding wind resource on the top edge of the bluff, especially downhill from the met tower toward the Yukon River and the village of Pitka’s Point. Wind modeling of Pitka’s Point site area, plan view Wind modeling of Pitka’s Point site area, view to west Wind Turbine Project Site The project site is Pitka’s Point Native Corporation land on and near the location of the Pitka’s Point met tower, with boundaries of the Pitka’s Point/Saint Mary’s Airport road to the north, a rock quarry to the Saint Mary’s, Alaska REF 8 Wind-Diesel Project Analysis Page | 17 east, the bluff and Lot 10 to the south, and a Native Allotment to the west. More specifically, AVEC has obtained site control on Lot 6 within these general boundaries for turbine siting. Site control of Lot 6 is adequate to site four NPS 100C-24 turbines. It is important to note that winds at the project site, though robust as a Class 6 wind resource, are prone to rime icing conditions in winter. Rime icing is more problematic for wind turbine operations than freezing rain (clear ice) given its tenacity and longevity in certain climatic conditions. Anti-icing and/or de-icing features may be necessary to sustain availability during the winter months. NPS 100C-24 Turbine Layout Using WAsP software, locations for four NPS 100C-24 wind turbines were selected that have high gross energy production, but at the same time result in minimal array loss, thus yielding a high net energy production. Site constraints necessitated that the turbines be located on the southern boundary of the available lot but yet maintain sufficient offset from the quarry to accommodate its possibly future expansion. NPS 100C-24 Turbine Layout Turbine UTM (easting, northing) Pitkas 1 Zone 3V 591490, 6879581 Pitkas 2 Zone 3V 591616, 6879581 Pitkas 3 Zone 3V 591564, 6879490 Pitkas 4 Zone 3V 591690, 6879490 NPS 100C-24 turbine layout, view to north Saint Mary’s, Alaska REF 8 Wind-Diesel Project Analysis Page | 18 NPS 100C-24 turbine layout, view to southwest WAsP Modeling Results for NPS 100C-24 Turbine Array The following table presents the WAsP software analysis of energy production and capacity factor performance of the NPS 100C-24 turbines in a four turbine array at 100% turbine availability (percent of time that the turbine is on-line and available for energy production). The turbines perform very well in the Pitka’s Point wind regime with excellent annual energy production and minimal array wake loss. WAsP modeling results are included in Appendix B of this report. Note that the standard (atmospheric conditions) power curve was compensated to the measured mean annual site air density of 1.273 kg/m3. For the stall-controlled NPS 100C-24, power output (for each m/s wind speed step) of the standard power curve was multiplied by the ratio of site air density to standard air density of 1.225 kg kg/m3 and capped at a maximum 100 kW output. WAsP model results, NPS 100C-24 four turbine array, 100% AEP Parameter Total (MWh/yr) Average Each (MWh/yr) Minimum Each (MWh/yr) Maximum Each (MWh/yr) Net AEP 1,424 356.2 349.2 374.0 Gross AEP 1,473 368.3 359.1 383.5 Wake loss 3.27% - - - Alternate Turbine Layout Using WAsP software, locations for five NPS 100C-24 wind turbines (four planned plus a possible future fifth turbine) were selected that have similar high gross energy production and minimal array loss as the first layout, but allow for electrical distribution line routing that will not cross the access road (a problem noted by AVEC Engineering with respect to the layout above). As with the proposed layout, site Saint Mary’s, Alaska REF 8 Wind-Diesel Project Analysis Page | 19 constraints necessitate that turbines be located on the southern boundary of the available lot but yet maintain sufficient offset from the quarry to accommodate future expansion. NPS 100C-24 alternate layout Turbine UTM (easting, northing) Pitkas 1 Zone 3V 591490, 6879499 Pitkas 2 Zone 3V 591595, 6879499 Pitkas 3 Zone 3V 591700, 6879499 Pitkas 4 Zone 3V 591543, 6879580 Pitkas 5 (future) Zone 3V 591648, 6879580 NPS 100C-24 turbines alternate array, view to north WAsP Modeling Results for Alternate NPS 100C-24 Array The following table presents the WAsP software analysis of energy production and capacity factor performance of the NPS 100C-24 turbines in a four turbine array at 100% turbine availability (percent of time that the turbine is on-line and available for energy production). As with the layout above, the turbines perform very well in the Pitka’s Point wind regime with excellent annual energy production and minimal array wake loss. WAsP modeling results are included in Appendix C of this report. Annual energy production alternate four turbine array, 100% AEP Parameter Total (MWh/yr) Average Each (MWh/yr) Minimum Each (MWh/yr) Maximum Each (MWh/yr) Net AEP 1,432 358.1 350.0 378.6 Gross AEP 1,482 370.7 358.7 383.3 Wake loss 3.38 % - - - Saint Mary’s, Alaska REF 8 Wind-Diesel Project Analysis Page | 20 Economic Analysis Homer software was used to model static energy balance of the Saint Mary’s electrical and thermal power system at ten minute increments of time. Wind turbines are modeled as connected to the electrical distribution system with first priority to serve the electrical load and second priority to serve the thermal load via a secondary load controller and electric boiler located at the community school. Project Capital Cost Capital and installation costs of four NPS 100C-24 wind turbines to serve the village of St. Mary’s, including distribution system extension is $4,886,000. This cost estimate was developed by CRW Engineering, Inc. for AVEC’s Renewable Energy Fund Round 8 construction project proposal. Fuel Cost A fuel price of $4.83/gallon was chosen for the initial HOMER analysis by reference to the 201 4_06- R8Prototype_AEA_Final_2014-08-07 Excel spreadsheet, written by ISER. The $4.83/gallon price reflects the average value of all fuel prices between the 2016 (the assumed project start year) fuel price of $4.47/gallon and the 2035 (20 year project end year) fuel price of $5.48/gallon using the medium price projection analysis with an average CO2-equivalent allowance cost of $0.60/gallon included. By comparison, the fuel price for St. Mary’s reported to Regulatory Commission of Alaska for the 2013 PCE report was $3.37/gallon, without inclusion of CO2-equivalent allowance. Assuming a CO2- equivalent allowance of $0.41/gallon (ISER Prototype spreadsheet, 2013 value), the St. Mary’s 2013 diesel fuel price was $3.78/gallon. Heating fuel displacement by diversion of excess energy to thermal loads is valued at $5.77/gallon as an average price for the 20 year project period. This price was determined by reference to the 2014_06- R8Prototype_AEA_Final_2014-08-07 Excel spreadsheet where heating oil is valued at the cost of diesel fuel (with CO2-equivalent allowance) plus $0.94/gallon, assuming heating oil displacement between 1,000 and 25,000 gallons per year. Fuel cost table (SCC included) ISER medium cost projection 2016 (/gal) 2035 (/gal) Average (/gallon) Diesel fuel $4.47 $5.48 $4.83 Heating oil $5.41 $6.42 $5.77 Modeling Assumptions HOMER energy modeling software was used to analyze the Saint Mary’s power System. HOMER is a static energy model designed to analyze hybrid power systems that contain a mix of conventional and renewable energy sources, such as diesel generators, wind turbines, solar panels, batteries, etc. Homer software is widely used in the State of Alaska to aid development of village wind-diesel power projects. HOMER modeling assumptions are detailed in the table below. Many assumptions, such as project life, discount rate, operations and maintenance (O&M) costs, etc. are AEA default values. The base or comparison scenario is the existing St. Mary’s/Andreafsky powerplant with its present configuration of Saint Mary’s, Alaska REF 8 Wind-Diesel Project Analysis Page | 21 diesel generators. Also assumed in the base or comparison scenario is that excess powerplant heat serves the thermal load via a heat recovery loop. Wind turbines constructed at the Pitka’s Point site are assumed to operate in parallel with the diesel generators. Excess energy will serve thermal loads via a secondary load controller and electric boiler, but this SLC/boiler combination may not be part of the diesel generator recovered heat loop. Installation cost of four NPS 100C-24 wind turbines assumes a three-phase distribution line extension from the road to the wind turbine site plus a two-phase to three-phase upgrade of the distribution system from the line extension tie-in to an existing three-phase distribution point on the west side of the village of St. Mary’s. Homer and ISER modeling assumptions Economic Assumptions Project cost $4,886,000 Project life 20 years (2016 to 2035) Discount rate 3% (reference: ISER 2014 R8Prototype spreadsheet) Operating Reserves Load in current time step 10% Wind power output 100% (Homer setting to force diesels on at all times) Fuel Properties (no. 2 diesel for powerplant) Heating value 46.8 MJ/kg (140,000 BTU/gal) Density 830 kg/m3 (6.93 lb./gal) Price (20 year average; ISER 2013, medium projection plus SCC) $5.27/gal ($1.38/Liter) Fuel Properties (no. 1 diesel to serve thermal loads) Heating value 44.8 MJ/kg (134,000 BTU/gal) Density 830 kg/m3 (6.93 lb./gal) Price (20 year average; ISER 2013, medium projection plus SCC) $6.32/gal ($1.66/Liter) Diesel Generators Generator capital cost $0 (new generators already funded) O&M cost $0.02/kWh (reference: ISER 2014 R8Prototype spreadsheet) Minimum load 15 percent Schedule Optimized Wind Turbines Availability 80% O&M cost $0.050/kWh (reference: ISER 2014 R8Prototype spreadsheet) Wind speed 6.95 m/s at 23 m, 100% net AEP, rep. of all turbines 6.75 m/s at 23 m, met tower mean annual interpolation 6.05 m/s at 23 m, 80% net AEP, rep. of all turbines Density adjustment 1.280 kg/m^3 Energy Loads Electric 8.96 MWh/day average Saint Mary’s electric load Thermal 3.76 MWh/day (12.8 MMBtu/day) average Saint Mary’s school heat load Saint Mary’s, Alaska REF 8 Wind-Diesel Project Analysis Page | 22 Economic Valuation Homer software was used in this feasibility analysis to model the wind resource, wind turbine energy production, effect on the diesel engines when operated with wind turbines, and excess wind energy that could be used to serve thermal loads. Although Homer software is designed to evaluate economic valuation by ranking alternatives, including a base or “do nothing” alternative by net present cost, AEA economic valuation methodology differs in its assumptions of O&M costs, fuel cost for each year of the project life, and disposition of excess energy. Excess energy is valued in the ISER spreadsheet with an assumption that the powerplant is not co-generation. In other words, excess energy is valued without consideration of possible thermal production loss due to reduced diesel engine loading as would occur in a co-generation system configuration. In an effort to align economic valuation of project alternatives with Alaska Energy Authority methods, this feasibility analysis uses AEA’s economic evaluation methods. Although ISER developed the cost evaluation spreadsheet, AEA determined the assumptions and methods of the model. The model is updated every July in preparation for the next round of Renewable Energy Fund requests for proposals in the form of an explanation report and an Excel spreadsheet. The latest version of the spreadsheet has a file name of 2014_06-R8Prototype_AEA_Final_2014-08-07 and is available on AEA’s website. Project economic valuation Conclusion At the Pitka’s Point site, St. Mary’s has a very good wind resource for wind power development, especially considering its distance from the Bering Sea coast. Wind behavior is desirable with low turbulence, low wind shear, and moderate extreme wind probability. The analysis in this report considered configurations of four Northern Power Systems NPS 100C-24 wind turbines in medium penetration configuration with no electrical storage and a wind-heat node at the St. Mary’s School. The economic analysis indicates a positive project benefit with a 20 year benefit-to-cost ratio of 1.20 and a 12.6 year simple payback period. Turbine No. Project Cost NPV Benefits NPV Costs B/C Ratio NPS100C-24 4 380 $4.89 $5.36 $4.47 1.20 83,253 3,079 86,332 Diesel Fuel Saved (gal/yr) Heating Oil Saved (gal/yr) Total Fuel Saved (gal/yr) Wind Capacity (kW) (in $ millions) Saint Mary’s, Alaska REF 8 Wind-Diesel Project Analysis Page | A Appendix A, WAsP Wind Farm Report, Pitka’s Point Site, NPS 100C-24 Turbines 'Pitkas Point REF 8' wind farm Produced on 8/26/2014 at 12:05:24 PM by licenced user: Douglas J. Vaught, V3 Energy, USA using WAsP version: 10.02.0010. Summary results Parameter Total Average Minimum Maximum Net AEP [MWh] 1424.861 356.215 349.188 374.040 Gross AEP [MWh] 1473.066 368.267 359.056 383.466 Wake loss [%] 3.27 - - - Site results Site Location [m] Turbine Elevation [m a.s.l.] Height [m a.g.l.] Net AEP [MWh] Wake loss [%] Pitkas 1 (591490, 6879581) NPS100-24 170 23 349.188 3.1 Pitkas 2 (591616, 6879581) NPS100-24 170 23 351.397 2.13 Pitkas 3 (591564, 6879490) NPS100-24 170 23 350.237 5.38 Pitkas 4 (591690, 6879490) NPS100-24 169.3152 23 374.040 2.46 Site wind climates Site Location [m] Height [m a.g.l.] A [m/s] k U [m/s] E [W/m²] RIX [%] dRIX [%] Pitkas 1 (591490, 6879581) 23 7.7 1.93 6.83 403 3.5 0.3 Pitkas 2 (591616, 6879581) 23 7.7 1.94 6.80 397 3.6 0.3 Pitkas 3 (591564, 6879490) 23 7.8 1.94 6.94 421 3.8 0.5 Pitkas 4 (591690, 6879490) 23 8.0 1.94 7.12 453 3.6 0.4 C:\Users\Douglas\Documents\AVEC\St Marys\REF Round 8, 2014\Pitkas Point REF 8, WAsP wind farm report, 4 NPS100C, rho=1.280.docx 1 27-08-14 Saint Mary’s, Alaska REF 8 Wind-Diesel Project Analysis Page | B Appendix B, WAsP Turbine Site Report, Alternate NPS 100C-24 Layout '8-24-13 iteration' wind farm Produced on 8/27/2014 at 11:21:41 AM by licenced user: Douglas J. Vaught, V3 Energy, USA using WAsP version: 10.02.0010. Summary results Parameter Total Average Minimum Maximum Net AEP [MWh] 1432.571 358.143 350.011 378.684 Gross AEP [MWh] 1482.685 370.671 358.701 383.339 Wake loss [%] 3.38 - - - Site results Site Location [m] Turbine Elevation [m a.s.l.] Height [m a.g.l.] Net AEP [MWh] Wake loss [%] Pitkas 1 (591490, 6879490) NPS100C-24 170 23 350.011 4.76 Pitkas 2 (591595, 6879490) NPS100C-24 170 23 353.703 5.21 Pitkas 3 (591700, 6879490) NPS100C-24 168.5835 23 378.684 1.21 Pitkas 4 (591543, 6879580) NPS100C-24 170 23 350.173 2.38 Site wind climates Site Location [m] Height [m a.g.l.] A [m/s] k U [m/s] E [W/m²] RIX [%] dRIX [%] Pitkas 1 (591490, 6879490) 23 7.8 1.94 6.91 417 3.8 0.5 Pitkas 2 (591595, 6879490) 23 7.9 1.94 6.98 428 3.7 0.4 Pitkas 3 (591700, 6879490) 23 8.0 1.94 7.11 453 3.6 0.4 Pitkas 4 (591543, 6879580) 23 7.7 1.94 6.80 397 3.5 0.2 C:\Users\Douglas\Documents\AVEC\St Marys\REF Round 8, 2014\Pitkas Point REF 8, WAsP wind farm report, 4 NPS100C, rho=1.280, alternate layout.docx 1 27-08-14 Renewable Energy Fund Economic Benefit-Cost Analysis ModelUpdated July 2014 (Alejandra Villalobos Meléndez, ISER Research Associate)Wind Excess Energy1,184,819 102,527 Project DescriptionComments: (Please assign comment ID and hyperlink next to applicable column/row)CommunityIDNearest Fuel Community1RegionRE TechnologyProject IDApplicant NameProject TitleResultsNPV Benefits $5,360,150.09NPV Capital Costs $4,471,382 Payback PeriodB/C Ratio 1.20 12.61NPV Net Benefit $888,768PerformanceUnit ValueDisplaced Electricity kWh per year 1,082,292 Displaced Electricity total lifetime kWh 21,645,840 Displaced Petroleum Fuel gallons per year 86,332 Displaced Petroleum Fuel total lifetime gallons 1,726,642 Displaced Natural Gas mmBtu per year - Displaced Natural Gas total lifetime mmBtu - Avoided CO2 tonnes per year 876 Avoided CO2 total lifetime tonnes 17,525 Proposed System Unit ValueCapital Costs $ 4,886,000$ Project Start year2016Project Life years20Displaced Electric kWh per year 1,082,292 Displaced Heat gallons displaced per year 3,079 Displaced Transportation gallons displaced per yearRenewable Generation O&M $ per kWh 0.050 Electric Capacity kWElectric Capacity Factor %Heating Capacity Btu/hrHeating Capacity Factor %Total Public Benefit 2013$ (Total over the life of the project)Base System Unit ValueDiesel Generator O&M $ per kWh 0.020$ Applicant's Diesel Generator Efficiency kWh per gallonDiesel Generation Efficiency kWh per gallon 13.00 Parameters Unit ValueHeating Fuel Premium $ per gallon 0.94$ Transportation Fuel Premium $ per gallon -$ Discount Rate % per year 3%Crude Oil $ per barrel EIA Mid Natural Gas$ per mmBtu 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28Annual Cost Savings Units 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038Entered ValueProject Capital Cost $ per year-$ -$ 4,886,000$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ Electric Cost Savings $ per year -$ -$ 339,161$ 329,953$ 327,853$ 329,455$ 334,480$ 340,053$ 346,402$ 352,861$ 359,745$ 366,141$ 372,030$ 376,890$ 383,168$ 388,226$ 393,614$ 398,146$ 404,139$ 410,936$ 417,617$ 423,984$ -$ -$ -$ Heating Cost Savings $ per year -$ -$ 16,642$ 16,302$ 16,224$ 16,283$ 16,469$ 16,675$ 16,910$ 17,149$ 17,403$ 17,640$ 17,858$ 18,037$ 18,270$ 18,457$ 18,656$ 18,823$ 19,045$ 19,296$ 19,544$ 19,779$ -$ -$ -$ Transportation Cost Savings $ per year -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ Entered ValueOther Public Benefits $ per year-$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ Total Cost Savings $ per year-$ -$ 355,803$ 346,255$ 344,076$ 345,738$ 350,949$ 356,728$ 363,312$ 370,010$ 377,148$ 383,781$ 389,887$ 394,927$ 401,438$ 406,682$ 412,270$ 416,969$ 423,184$ 430,232$ 437,160$ 443,763$ -$ -$ -$ Net Benefit $ per year $0 $0($4,530,197)$346,255 $344,076 $345,738 $350,949 $356,728 $363,312 $370,010 $377,148 $383,781 $389,887 $394,927 $401,438 $406,682 $412,270 $416,969 $423,184 $430,232 $437,160 $443,763 $0 $0 $0Electric Units 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038Renewable Generation kWh per year - - 1,082,292 1,082,292 1,082,292 1,082,292 1,082,292 1,082,292 1,082,292 1,082,292 1,082,292 1,082,292 1,082,292 1,082,292 1,082,292 1,082,292 1,082,292 1,082,292 1,082,292 1,082,292 1,082,292 1,082,292 - - - Entered ValueRenewable Scheduled Repairs $ per year-$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ Renewable O&M $ per year -$ -$ 54,228$ 54,228$ 54,228$ 54,228$ 54,228$ 54,228$ 54,228$ 54,228$ 54,228$ 54,228$ 54,228$ 54,228$ 54,228$ 54,228$ 54,228$ 54,228$ 54,228$ 54,228$ 54,228$ 54,228$ -$ -$ -$ Entered ValueRenewable Fuel Use Quantity (Biomass) green tons- - - - - - - - - - - - - - - - - - - - - - - - - Entered ValueRenewable Fuel Cost $ per unit-$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ Total Renewable Fuel Cost $ per year -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ Proposed Generation Cost $ per year -$ -$ 54,228$ 54,228$ 54,228$ 54,228$ 54,228$ 54,228$ 54,228$ 54,228$ 54,228$ 54,228$ 54,228$ 54,228$ 54,228$ 54,228$ 54,228$ 54,228$ 54,228$ 54,228$ 54,228$ 54,228$ -$ -$ -$ Fossil Fuel Generation kWh per year - - 1,082,292 1,082,292 1,082,292 1,082,292 1,082,292 1,082,292 1,082,292 1,082,292 1,082,292 1,082,292 1,082,292 1,082,292 1,082,292 1,082,292 1,082,292 1,082,292 1,082,292 1,082,292 1,082,292 1,082,292 - - - Fuel Price $ per gallon 4.78$ 4.57$ 4.47$ 4.35$ 4.33$ 4.35$ 4.41$ 4.48$ 4.55$ 4.63$ 4.71$ 4.79$ 4.86$ 4.92$ 4.99$ 5.05$ 5.12$ 5.17$ 5.25$ 5.33$ 5.41$ 5.48$ 5.56$ 5.63$ 5.72$ Entered ValueScheduled Repairs $ per year-$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ O&M $ per year -$ -$ 21,646$ 21,646$ 21,646$ 21,646$ 21,646$ 21,646$ 21,646$ 21,646$ 21,646$ 21,646$ 21,646$ 21,646$ 21,646$ 21,646$ 21,646$ 21,646$ 21,646$ 21,646$ 21,646$ 21,646$ -$ -$ -$ Fuel Use gallons per year - - 83,253 83,253 83,253 83,253 83,253 83,253 83,253 83,253 83,253 83,253 83,253 83,253 83,253 83,253 83,253 83,253 83,253 83,253 83,253 83,253 - - - Fuel Cost $ per year -$ -$ 371,743$ 362,536$ 360,435$ 362,038$ 367,063$ 372,636$ 378,984$ 385,443$ 392,327$ 398,723$ 404,612$ 409,472$ 415,751$ 420,808$ 426,196$ 430,728$ 436,722$ 443,518$ 450,199$ 456,567$ -$ -$ -$ Base Generation Cost $ per year -$ -$ 393,389$ 384,181$ 382,081$ 383,683$ 388,708$ 394,282$ 400,630$ 407,089$ 413,973$ 420,369$ 426,258$ 431,118$ 437,396$ 442,454$ 447,842$ 452,374$ 458,367$ 465,164$ 471,845$ 478,213$ -$ -$ -$ Heating Units 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038Renewable Heat gallons displaced per year - - 3,079 3,079 3,079 3,079 3,079 3,079 3,079 3,079 3,079 3,079 3,079 3,079 3,079 3,079 3,079 3,079 3,079 3,079 3,079 3,079 - - - Entered ValueRenewable Heat Scheduled Repairs $ per year-$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ Entered ValueRenewable Heat O&M $ per year-$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ Entered ValueRenewable Fuel Use Quantity (Biomass) green tons- - - - - - - - - - - - - - - - - - - - - - - - - Entered ValueRenewable Fuel Cost $ per unit-$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ Total Renewable Fuel Cost $ per year -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ Proposed Heat Cost $ per year -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ Fuel Use gallons per year - - 3,079 3,079 3,079 3,079 3,079 3,079 3,079 3,079 3,079 3,079 3,079 3,079 3,079 3,079 3,079 3,079 3,079 3,079 3,079 3,079 - - - Fuel Cost $ per gallon 5.72$ 5.51$ 5.41$ 5.29$ 5.27$ 5.29$ 5.35$ 5.42$ 5.49$ 5.57$ 5.65$ 5.73$ 5.80$ 5.86$ 5.93$ 5.99$ 6.06$ 6.11$ 6.19$ 6.27$ 6.35$ 6.42$ 6.50$ 6.57$ 6.66$ Entered ValueScheduled Repairs $ per year-$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ Entered ValueO&M $ per year-$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ Annual Fuel Cost $ per year -$ -$ 16,642.04$ ######## 16,223.84$ 16,283.10$ 16,468.94$ 16,675.05$ 16,909.83$ 17,148.70$ 17,403.29$ 17,639.83$ 17,857.60$ 18,037.35$ 18,269.54$ 18,456.57$ 18,655.83$ 18,823.43$ 19,045.09$ 19,296.44$ 19,543.52$ 19,779.00$ -$ -$ -$ Base Heating Cost $ per year -$ -$ 16,642.04$ ######## 16,223.84$ 16,283.10$ 16,468.94$ 16,675.05$ 16,909.83$ 17,148.70$ 17,403.29$ 17,639.83$ 17,857.60$ 18,037.35$ 18,269.54$ 18,456.57$ 18,655.83$ 18,823.43$ 19,045.09$ 19,296.44$ 19,543.52$ 19,779.00$ -$ -$ -$ Pitka's Point siteDescriptionSt. Mary's, AndreafskyPUBLIC BENEFITS. Two options are now available to include public benefit estimates in the B/C ratio calculations. RuralBefore using this new feature, please read the accompanying notes:WindFour NPS100C-24.4 turbinesFrom CRW: St Mary's Wind Engineers Estimate Rd8-R2 (Elec Boiler for School), 8/26/14Excess energy to thermal; 33.3 kWh/gal of Diesel #1; displacement of 85% efficient fuel oil boilerAEA defaultAEA default2013 PCE ReportProposedBaseProposedBaseDocument