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Home My WebLink AboutOVK AEA FY2013 Round 7 ProposalRenewable Energy Fund Round VII Grant Application -Heat Projects Application Forms and Instructions I ··. A' AAf6A n -=:!ENERGY AUTHORITY This instruction page and the following grant application constitutes the Grant Application Form for Round VII of the Renewable Energy Fund Heat Projects only. If your application is for energy projects that will not primarily produce heat, please use the standard application form (see RFA section 1.5). An electronic version of the Request for Applications (RFA) and both application forms is available online at: www.akenergyauthority.org/REFund7.html. • If you need technical assistance filling out this application, please contact Shawn Calfa, the Alaska Energy Authority Grant Administrator at (907) 771-3031 or at scalfa@aidea.org. • If you are applying for grants for more than one project, provide separate application forms for each project. • Multiple phases for the same project may be submitted as one application. • If you are applying for grant funding for more than one phase of a project, provide milestones and grant budget for each phase of the project. • In order to ensure that grants provide sufficient benefit to the public, AEA may limit recommendations for grants to preliminary development phases in accordance with 3 ACC 107.605(1). • If some work has already been completed on your project and you are requesting funding for an advanced phase, submit information sufficient to demonstrate that the preceding phases are completed and funding for an advanced phase is warranted. • If you have additional information or reports you would like the Authority to consider in reviewing your application, either provide an electronic version of the document with your submission or reference a web link where it can be downloaded or reviewed. • In the sections below, please enter responses in the spaces provided, often under the section heading. You may add additional rows or space to the form to provide sufficient space for the information, or attach additional sheets if needed. REMINDER: • Alaska Energy Authority is subject to the Public Records Act AS 40.25, and materials submitted to the Authority may be subject to disclosure requirements under the act if no statutory exemptions apply. • All applications received will be posted on the Authority web site after final recommendations are made to the legislature. • In accordance with 3 AAC 107.630 (b) Applicants may request trade secrets or proprietary company data be kept confidential subject to review and approval by the Authority. If you want information is to be kept confidential the applicant must: o Request the information be kept confidential. o Clearly identify the information that is the trade secret or proprietary in their application. o Receive concurrence from the Authority that the information will be kept confidential. If the Authority determines it is not confidential it will be treated as a public record in accordance with AS 40.25 or returned to the applicant upon request. AEA 2014-006 Application Page 1 of 30 7/2/2011 Renewable Energy Fund Round VII Grant Application -Heat Projects SECTION 1 -APPLICANT INFORMATION Name (Name of utility, IPP, or government entity submitting proposal) Or2anized Villa2e of Kake Type of Entity: Fiscal Year End Tax ID # 92-0074844 Tax Status: __ For-profit __ Non-profit X !Irjbal Goy] Government ( check one) Date of last financial statement audit: Mailing Address Physical Address 541 Keku Road P.O. Box 316 Kake, Alaska 99830 Telephone Fax Email 907-785-6471 907-785-4902 1.1 APPLICANT POINT OF CONTACT I GRANTS MANAGER Name Title Gary E. Williams Executive Director Mailing Address P.O. Box 316 Kake Alaska 99830 Telephone Fax Email 907-785-6471 907-785-4902 GEWilliam~KakeFirstNation.org 1.2 APPLICANT MINIMUM REQUIREMENTS Please check as appropriate. If you do nofto meet the minimum applicantrequirements, 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 X A governmental entity (which includes tribal councils and housing authorities); Yes 1.2.2 Attached to this application is formal approval and endorsement for the project by or the applicant's board of directors, executive management, or other governing No authority. If the applicant is a collaborative grouping, a formal approval from each participant's governing authority is necessary. (Indicate Yes or No in the box) Yes 1.2.3 As an applicant, we have administrative and financial management systems and or follow procurement standards that comply with the standards set forth in the grant No agreement (Section 3 of the RFA). Yes 1.2.4 If awarded the grant, we can comply with all terms and conditions of the award as or identified in the Standard Grant Agreement template at No httrr//www. a kenerg~a uthorit~. org/veeQ/Grant-T em Qlate. Qdf. (Any exceptions should be clearly noted and submitted with the application.) Yes 1.2.5 We intend to own and operate any project that may be constructed with grant or funds for the benefit of the general public. If no please describe the nature of the No project and who will be the primary beneficiaries. AEA 2014-006 Grant Apphcat1on Page 2 of30 7/2/2013 Renewable Energy Fund Round VII Grant Application -Heat Projects f "A"NWiL -=:> ENERGY AUTHORITY 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. Kake Community Energy 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. The proposed project is located in Kake Alaska on the campus of the local tribal government, the Organized Village ofKake (OVK). OVK's campus includes the tribal government office and the tribally operated lodge as the initial candidate buildings for the district heating loop, with several other buildings that could potentially benefit from the loop in a future phase. This project could capture the intent of the community as it pursues the development of its socio-economic future which is integrally linked to affordable energy. As the local federally recognized tribal government, OVK serves the community ofKake in several roles. This includes delivery of many programs and services ranging from education & employment assistance, economic development, social services, youth & elder, environmental, realty & rights protection, natural resources & subsistence protection, cultural & language, housing, and transportation. The tribe is also very actively involved with issues surrounding energy for our community, both in supply options and conservation. This started coming to a greater focus several years ago as the tribe became a member of the regional Southeast Conference Energy Committee and has evolved most recently to even greater advocacy at the local & regional levels for Kake's energy future, member community for the DOE Office of Indian Energy START program, selected community for REAP project activities, ongoing work with Tlingit & Haida Regional Housing Authority and Southeast Alaska Conservation Council on energy conservation and alternative supplies, etc. OVK is also a charter member of the Kake CEDS (Comprehensive Economic Development Strategies) Committee and the Kake Energy Committee. As such, OVK is highly visible to the community and beyond, with this proposed project serving as a model for others. The physical location of the OVK campus is readily visible to the community on the main arterial road, with a woody biomass project being an excellent demonstration project to the community as a whole. Not only could it prove the benefits of utilizing the large fuel supply surrounding our community, it could also enhance the local economy with harvests of local resources for heating rather than importing fuel; all in in addition to aiding the tribe's operations by easing the overhead costs burdens of delivering its many services to the community GPS Location in Decimal Degrees Latitude: 56.97724° Longitude: -133.945663° 2.2.2 Community benefiting-Name(s) of the community or communities that will be the beneficiaries of the project. AEA 2014-006 Grant Application Page 3 of30 7/2/2013 Renewable Energy Fund Round VII Grant Application -Heat Projects I .· ... AI OOBif\ e ~ENERGY AUTHORITY This Project will be a benefit to the community ofKake as well as provide a blueprint for all other areas considering biomass energy. The primary beneficiaries will be the Kake City School District, Tlingit and Haida Senior Center and the City ofKake's Bingo hall. This project will potentially reduce the schools heating bill by 45% and that money would then be put into student instruction. The Senior Center would have a similar effect by reducing their heating bill by 45%. The forest itself would also be a beneficiary as we look to use the trees cut down for pre-commercial thinning, thereby creating a market for an otherwise wasted wood. With the amount of forest on Kupreanoflsland that was clear-cut our forests need thinning to grow back into a healthy forest again and this would provide additional capital to help facilitate in that process. 2.3 PROJECT TYPE Put X in boxes as appropriate 2.3.1 Renewable Resource Type Wind to Heat X Biomass or Biofuels Hydro to Heat Solar Thermal Heat Recovery from Existing Sources Heat Pumps Other (Describe) 2.3.2 Proposed Grant Funded Phase(s) for this Request (Check all that apply) Pre-Construction Construction I. Reconnaissance X Ill. Final Design and Permitting II. Feasibility and Conceptual Design IV. Construction and Commissioning 2.4 PROJECT DESCRIPTION Provide a brief one paragraph description of the proposed heat project. Kake Community Energy (KCE), a project of the Organized Village of Kake (OVK), is a community-scale thermal energy services company providing affordable biomass heat to critical public institutions and (later) businesses in Kake, AK while creating local employment and enhancing forest restoration on Tribal and National Forest lands. It is designed to achieve the economies of scale, customer convenience and price stability of traditional district energy systems, while allowing the adaptability and flexibility needed to serve a community with a spatially extensive development pattern, typical of Southeast Alaska. 2.5 PROJECT BENEFIT Briefly discuss the financial and public benefits that will result from this heat project, (such as reduced fuel costs, lower energy costs, local jobs created etc.) AEA 2014-006 Grant Application Page 4of30 71212013 Renewable Energy Fund Round VII Grant Application -Heat Projects I ·. A I AAFM ?ii2> -=:> ENERGY AUTHORITY The project represents a major investment in the economic health and vitality of Kake and its critical public institutions. Kake is one of the hardest hit forest and fisheries-dependent communities in Southeast Alaska. Closure of the Kake Cannery in the 1980s increased unemployment significantly and no other industry has emerged to take its place. Unemployment is currently averaging 49.5%. This project will employ 4-6 full time employees during construction and two permanent full time employees on an ongoing basis. There will also be 4-6 seasonal employed in the tree thinning. Because it will serve all School District buildings, over 40 low-income families will be positively impacted by the project. Maintenance of the buildings will also benefit from not having to do their daily/annual boiler work. When fully built out, the project will displace approximately 60,000 gallons of fuel oil with 1,000 tons of biomass fuel sourced from forest stewardship thinning activities on adjacent Kake Tribal, Sealaska and National Forest lands on an annual basis. 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. Current estimates of total capital cost for the entire project are between $1.4 million. This includes approximately $250,000 of project design and development costs. The Organized Village of Kake and the Juneau Economic Development Council have funded all early-stage project development (project feasibility) work to date with their own funds and a USDA RBEG grant. To move the project into the next phase, OVK is seeking an investment (grant) of $228,073 to be used to design and secure permitting for the initial District Energy plant and to help with the formation of project finance and to establish the management structure for the system. Additional capital, including private equity, debt, grants, guaranteed loans and tax credits will be sought to finance project construction over 2014-2016 and to secure take-out financing upon commissioning of the system. 2.7 COST AND BENEFIT SUMARY Include a summary of grant request and your project's total costs and benefits below. Grant Costs (Summary of funds requested) 2.7.1 Grant Funds Requested in this application $208,073 2.7.2 Cash match to be provided $ 2.7.3 Total In-kind match to be provided (sum of lines below) $ Biomass or Biofuel inventory on hand $ Energy efficiency improvements to buildings to be $ heated (within past 5 years or committed prior to proposed project completion) Other In-Kind match to be provided $20,000 AEA 2014-006 Grant Application Page 5 of30 7/2/2013 Renewable Energy Fund Round VII Grant Application -Heat Projects / lllllillLl. A I ~ -=:> ~--=:! ENERGY AUTHORITY 2.7.4 Other grant funds to be provided $ 2.7.5 Other grant applications not yet approved $ 2.7.6 Total Grant Costs (sum of2.7.1 through 2.7.4) $228,073 Project Costs & Benefits (Summary of total project costs including work to date and future cost estimates to get to a fully operational project) 2.7.7 Total Project Cost Summary from Cost Worksheet, Section $1,423,292 4.4.4, including estimates through construction. 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) $ 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. AEA 2014-006 Grant Application Page 6 of30 71212013 Renewable Energy Fund Round VII Grant Application -Heat Projects j · .. AL~ ~ENERGY AUTHORITY 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. Gary Williams will be the project manager, which is in concert with his current role as START community energy champion and chairperson of the Kake Energy Committee (resume included with proposal). Mr. Williams also serves as OVK's executive director which yields a wide-perspective of overall operations, with tribal staff available to assist with tasks under his direction. A modest budget amount for personnel is included in the project budget. 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. Please fill out form provided below You may add additional rows as needed Start End Milestones Tasks Date Date Project Kickoff Stakeholder meeting 7/14 7/14 District Energy Plant Engineering, Full System Engineering and Construction Design, and Costs Documentation of the District Enerqy Plant 8/14 11/14 Kake School Integration Mechanical, Electrical, and Plumbing (MEP) Engineering and Civil Engineering of Kake School integration 9/14 10/14 Senior Center Integration MEP to connect the center's heating system Enqineerinq 10/14 11/14 Bingo Hall Integration Engineering MEP to connect the bingo hall's heating sys 10/14 11/14 Final Environmental Assessment Compile data and review 10/14 11/14 Permitting Work with local authority to obtain permits 11/14 2/15 Project Ownership and Finance Prepare business plan, ownership model and financing and loan structures 7/14 3/15 Project Legal Work Prepare lease agreements for land use & Thermal Energy Service Agreements 1/15 3/15 Review Power Sales Agreement Determine if a Power Sales Agreement is needed 1/15 3/15 Economic and Financial Analysis; Review final project costs and Thermal Benefit to Cost Ratio Energy agreements to determine benefit cost ratio 7/14 3/15 Project Management Wisewood -ongoing oversight 7/14 3/15 AEA 2014-006 Grant Apphcat1on Page 7 of30 7/2/2013 Renewable Energy Fund Round VII Grant Application -Heat Projects 3.3 Project Resources / ·· ... A~ ~ENERGY AUTHORITY Describe the personnel, contractors, accounting or bookkeeping 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. In addition to OVK's staffmg, the several partnerships that OVK enjoys will be instrumental in successfully canying out the proposed project. These include established relationships and working alliances with staff from TIJ.RHA, SEACC, NREL, Marsh Creek LLC, REAP, BIA, USFS, Wisewood and others from around our region and state, but also locally with the Kake CEDS Committee, Kake school system, municipality as well as IPEC, the local electrical utility (which supports our initiative to address heating, in addition to electricity). OVK has an established procurement policy which is in line with A-87 cost & accounting principles. Beyond these guidelines, OVK anticipates consultation from the aforementioned partners, including assistance through the START program, as the tribe evaluates and selects a contractor to fulfill the necessary study and design for our system. When proceeding with the process, besides fulfilling the evaluation and design objectives, we wish to maintain a transparent process to the community and local educational system-i.e. sharing what we learn, gathering input and making this project a model for other systems in Kake and potentially within other communities of our region and state. Fiscal management will be through OVK's established fund accounting system. OVK has an annual A-133 fiscal & compliance audit performed to maintain its positive standing with the many agencies it deals with. 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. The program manager from OVK, Gary Williams will be in regular communication with the contractor and will provide progress updates via email to the Alaska Energy Authority on the AEA 2014-006 Grant Application Page 8 of30 7/2/2013 Renewable Energy Fund Round VII Grant Application -Heat Projects I · .. ALA&JZ:A* -=:>ENERGY AUTHORITY dates specified in the project schedule. The tribe is also willing to participate in the state's Wood Energy Task Group meetings and offer any relevant project updates. The tribe participates in monthly community energy committee meetings and bi-monthly community economic development committee meetings during which project information will be shared to the committee members. 3.5 Project Risk Discuss potential problems and how you would address them. The proposal calls for conducting a feasibility study and conceptual design; no ground work or construction will take place. The tribe has initiated a substantial amount of community discussion on energy issues and wood heat alternatives, and residents in Kake have shown sincere interest in gathering more information about system logistics and opportunities. This proposal has broad community support from the tribe, school, municipality, tribal corporation and regional conservation organizations and we do not anticipate any problems. 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. • 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. The area around Kake has abundant forest cover. Consultants hired for the project feasibility study estimate that at harvest levels equal to three times the amount required by the district project (1,600 green tons, on -550 green tons of initial demand) there is between 158-315 years of supply of forest biomass. Current forestry practices primarily include sending small thinning crews out to selectively cull tress to 12' spacing. Because the crews are limited to sawyers, the thinning materials are left in place. These ample resources could be an excellent fuel source if the thinned trees are recovered 6-12 months later (to allow for the majority of needles and other debris to fall away) and chipped for fuel. Many former logging roads are slightly overgrown from disuse, but with a brush hog or other machine could be easily reopened for further ready access AEA 2014-006 Grant Application Page 9 of 30 7/2/2013 Renewable Energy Fund Round VII Grant Application -Heat Projects I · .. A' ASKtL ~ENERGY AUTHORITY to thinning resources. Challenges will include training crews in these new activities, harvesting sufficient chips during winter months, and utilizing thinning materials from farther areas around Kake. 4.1.2 For Biomass Projects Only Identify any wood inventory questions, such as: • Ownership/Accessibility. Who owns the land and are their limitations and restrictions to accessing the biomass resource? • Inventory data. How much biomass is available on an annual basis and what types (species) are there, if known? There are approximately 30,000 acres of road accessible young growth forest about evenly split between the US Forest Service (USFS), SEALASKA Corporation and Kake Tribal Corporation (KTC). There are approximately 11,000 acres of old-growth timber lands that are considered suitable for logging near existing roads, the vast majority of which occurs on USFS lands. Approximately 2/3 of the young-growth and old-growth timber lands are ground operable (slopes < 35%), the rest would require cable logging systems (Figure 1) There is an unknown, but likely considerable, volume of cull wood that is already decked near both private and public land road systems. Personal communications from the CEO of KTC suggests that 5-10 MMBF is available near a small section of road that is within 20 minutes of town. There is a large amount of "pre- commercial" thinning scheduled on both public and private lands near Kake. 4.2.1 Basic configuration of Existing Heating Energy System Briefly discuss the basic configuration of the existing energy system. Include information about the number, size, age, efficiencv, and type of generation. The Kake City School District building is heated by a Burnham model V909 #2 oil-fired boiler rated at 1,342 MBH. It replaced a slightly larger Burnham boiler in 2012 that no longer functions but is still in place in the school. The boiler uses a Beckett oil burner rated at 7.0-19.9 GPH and supplies hot water to the school's heat distribution system. Its efficiency is rated at 80%. The Kake Senior Center is heated by 2 Weii-Mclain oil-fired boilers rated at 184 MBH each. They also use Beckett oil burners, rated at 1.10-2.00 GPH and supplies hot water to the Senior Center. The boilers were installed in 2006, but Senior Center Staff have had difficulty with them and The Bingo hall is heated by oil-fired room heater. 4.2.2 Existing Heating 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. Existing energy resources for heating in Kake primarily include heating oil (#1 and 2).This is imported to the community at a cost of $5.36 per gallon. Propane is used in a limited fashion for AEA 2014-006 Grant Application Page 10 of 30 7/2/2013 Renewable Energy Fund Round VII Grant Application -Heat Projects /'Ah~ -=:! ENERGY AUTHORITY heating but there are a number of residents who utilize on-demand hot water systems. This is also imported and sold at a cost of $3.23 per gallon. Some additional heating is provided by electricity, but this is limited in large part by the cost of electricity, which can be as much as $0.63/kWh. Any significant increase in electric heating would be difficult for the community to sustain, as the electric power grid has a very limited capacity and is already heavily used. 4.2.3 Existing Heating Energy Market Discuss existing energy use and its market. Discuss impacts your project may have on energy customers. Kake is a small community (71 0 residents) in southeast Alaska. The entire community is served by a single electricity generator with a capacity of 1 ,400 kW, and there is little potential to expand this capacity. Residents generally use heating oil (diesel) to fuel their heating systems. This oil must be imported and has an end purchase price of $5.36/gallon. Heating fuel bills, even for small facilities, can be extremely large, and are susceptible to wide fluctuations in price, making budgeting difficult year to year. By utilizing biomass from the local forests, the community of Kake can not only reduce its fuel bills (reductions of over 40% are anticipated), it can reduce its dependence on price-volatile fossil fuels and increase its use of local, sustainable fuels. Harvesting local fuels will also support the local economy by keeping foresters employed and making more money available in local facilities' budgets for staffing and programming. Additionally, forest health will be improved by reducing the amount of slash left in the forests during thinning activities. 4.3 Proposed System Include information necessary to describe the system you are intending to develop and address potential system design, land ownership, permits, energy efficiency 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 • EnerQy efficiency measures (buildinQ envelope) Technology Description The system specified is a 400 kW (1 ,365 MBH) state-of-the-art biomass boiler system capable of burning green biomass up to 60% MC. Wood chip fuel will be stored in a concrete bunker or structural steel bin outfitted with a hydraulic scraper floor reclaim system. Fuel conveyance to the furnace will be accomplished by either large diameter augers, or a hydraulic ram feed. The combustion furnace will be a variant of a two phased direct-combustion furnace (with distinct primary and secondary combustion zones) with an active grate (optionally cooled) appropriate for wet fuels up to 60% MC, and 4" max particle size, and 5% maximum ash content. Automatic ignition, flue gas recirculation, oxygen sensor-based combustion controls, and a remote monitoring system will be specified for the system. The hot water boiler will be a three pass fire- AEA 2014-006 Grant Application Page 11 of 30 7/2/2013 Renewable Energy Fund Round VII Grant Application -Heat Projects tube boiler operating at 30 psi. Automated ash handling and storage will be specified for the system, allowing for the periodic removal of ash from the boiler room for use on local lands as a soil amendment or landfilled. Flue gas cleaning will be via high efficiency multi-cyclone. The boiler system and peripheral equipment will be housed in an insulated metal building, with the fuel storage bin outside under cover, located adjacent to the building on the same concrete pad (approximately 1,600 square feet). Optimum installed capacity and capacity factor Total system capacity will be 1 ,365 MBH ( 400 kWthenn) which is optimum for the combined loads of the buildings to be connected to the district system. This is the optimum size for the biomass boiler in this location due to a long relatively stable maritime weather pattern that allows for excellent base loading of the system. A 1,365 MBH boiler represents roughly 58% of the peak hourly demand (using year 2012) which will be able to supply over 95% of the estimated energy demand for the connected buildings. Basic integration concept Heat distribution will be via factory-insulated underground PEX hot water piping. At each facility, a district energy substation will include a heat exchanger, Btu meter and data logger with telemetric capability to enable billing. Integration with existing heating systems will be made at the substation heat exchanger which will be plumbed to behave as the lead boiler in a lead-lag configuration, with the existing boiler system fulfilling the lag role. Barriers Anticipated barriers include trenching deep enough to lay the insulated PEX pipes below the frost line without encountering hardpan or bedrock. Additionally, due to its remote location, most materials will have to be barged in, which can add significant cost. All design work will take into account any locally available skilled labor, and engineering will aim to reduce the amount of concrete and other heavy materials needed for construction. Any modifications made to the building envelope of each facility will be at the discretion of the building owners and is not included in the scope of this grant proposal. Some renovations are scheduled for the Senior Center, but final decisions on energy improvements have yet to be made. 4.3.2 Land Ownership Identify potential land ownership issues, including whether site owners have agreed to the project or how vou intend to aooroach land ownership obtain harvest contracts and access issues. The 30,000 acres of road-accessible timber around Kake is owned primarily by the US Forest Service, SEALASKA Corporation, and the Kake Tribal Corporation. There are currently logging and thinning operations on lands owned by each entity, however the USFS roads are generally better maintained, as there is more timber activity there. Wood material is actively thinned and left in the forest on all forest owner's lands, and is available for harvest and processing into wood chip fuel. The proposed district energy site is owned by the City of Kake and they have indicated that they would be willing to lease land to the project in exchange for lease fees. 4.3.3 Permits Provide the following information as it may relate to permitting and how you intend to address outstandina oermit issues. AEA 2014-006 Grant Application Page 12 of30 7/2/2013 Renewable Energy Fund Round VII Grant Application -Heat Projects -=:> --/ -=> .. AI~ • List of applicable permits • Anticipated permitting timeline • Identify and discussion of potential barriers All local municipal construction permits Air quality NEPA and related 4.3.4 Environmental -=:J ENERGY AUTHORITY 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 The area around Kake has abundant forest cover. Current forestry thinning practices primarily include sending small crews out to selectively cull tress to 12' spacing. Because the crews are limited to sawyers, the thinning materials are left in place, creating both a visual barrier and preventing native wildlife from moving freely in the treated areas. Additionally, although forest fires are rare in the area, it creates a massive source of kindling on the ground that increases forest fire risk. Some barriers to access of this material are road conditions and road networks. While there are over 250 miles of logging roads around Kake, not all are maintained suitable to send crews out without additional clearing work. On the roads that are currently accessible, small crews would be limited to harvesting thinning materials from within several hundred feet of the road for lack of access by large equipment. There will be an aesthetic impact in the boiler systems placement and the steam that is expelled from the boiler. 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 AEA 2014-006 Grant Application Page 13 of 30 7/2/2013 Renewable Energy Fund Round VII Grant Application -Heat Projects I ··. A LABiRA 'iii> GIBE) ENERGY AUTHORITY • Identification of other funding sources • Projected capital cost of proposed renewable energy system • Projected development cost of proposed renewable enerQY system The total project cost is projected to be $1,423,292. Costs for this phase of the project include permitting, engineering, legal and financial work, and project management, for a total of $228,073. The amount requested in this grant is $208,073. Matching funds will include $20,000. Other sources of funds will include other grants (for a total of $800,000, or 56.2% of the project) and a construction loan during the construction phase for the remainder, or $623,292. The intent of this funding mix is to leverage grant funds obtained into a traditional bank loan. The total project cost of includes $1,135,719 in direct capital costs, and $287,573 in development costs. A full cost estimate with line item detail is included in the attached feasibility study completed by Wisewood, Inc. 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 thev serve.) The projected operating, maintenance and fuel costs are $101,972 in year one. This includes fueling ($68,21 0 for wood chips; $3,317 for fuel oil), labor ($9,600), electricity ($3,287), plus maintenance and repair, legal, accounting, insurance, site lease, replacement reserves and property taxes ($17,558). These costs combined will be significantly lower (12% less than current costs, at system start) than the existing heating, operating, and maintenance costs of connected customers' current systems and all costs will be funded by the heating bills of the connected customers. 4.4.3 Heat Purchase/Sale The heat purchase/sale information should include the following: • Identification of potential energy buyer( s )/customer( s) • Potential heat purchase/sales price -at a minimum indicate a price range • Proposed rate of return from Qrant-funded project The three facilities that would receive heat from the proposed biomass energy system include the Kake City School District, Kake Senior Center, and the Bingo Hall. All of these facilities are publically owned and operated. If the city were to own and operate the boiler system, they would be their own customer, and so can retain any savings gained by the system over its lifetime. Should the system be owned and operated by a third party, which is also modeled in the feasibility study's economic analysis, Then there would be three customers, the Kake City School District, Tlingit and Haida Senior Center and the City of Kake's Bingo Hall with each of its three facilities connected to the biomass system and their energy use separately metered at each site. Projected purchase prices are $33-35/mmBtu, significantly lower than the current purchase price of $38.56. AEA 2014-006 Grant Application Page 14 of 30 7/2/2013 Renewable Energy Fund Round VII Grant Application -Heat Projects I ··. A' ASK?\* ~ENERGY AUTHORITY The expected rate of return on the project is 8.9% (20 YR IRR on full capital cost of project). 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 and provide most recent heating fuel invoice that supports the amount identified in "Project Benefits" subpart b 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, biomasss fuel) Existing Heating Energy Generation and Usage a) Basic configuration i. Number of generators/boilers/other School-1; Senior Center-2 ii. Rated capacity of generators/boilers/other School-1342 MBH; Senior Center-184 MBH each iii. Generator/boilers/other type -'-"n/.:::a _______________ _ iv. Age of generators/boilers/other School-2012; Senior Center-2006 v. Efficiency of generators/boilers/other School-80%; Senior Center-80% b) Annual O&M cost (if system is part of the Rail belt grid, leave this section blank) i. Annual O&M cost for labor $20,000 ~~----------------------------- ii. Annual O&M cost for non-labor $10,000 ~~~--------------------------- c) Annual electricity production and fuel usage (fill in as applicable) (if system is part of the Rail belt grid, leave this section blank) i. Electricity [kWh] ii. Fuel usage Diesel [gal] Other iii. Peak Load iv. Average Load v. Minimum Load vi. Efficiency vii. Future trends d) Annual heating fuel usage (fill in as applicable) i. Diesel [gal or MMBtu] ii. Electricity [kWh] AEA 2014-006 Grant Application 32,720 gallons n/a Page 15 of 30 7/2/2013 Renewable Energy Fund Round VII Grant Application -Heat Projects I ' A I AAiihth ~ENERGY AUTHORITY iii. Propane [gal or MMBtu] _.:n~/::.:.a _________________ _ iv. Coal [tons or MMBtu] ...:.::n/.=a _________________ _ v. Wood [cords, green tons, dry tons] ...:.::n/.=a _________________ _ vi. Other Proposed System Design Capacity and Fuel Usage (Include any projections for continued use of non-renewable fuels) a) Proposed renewable capacity (Wind, Hydro, Biomass, other) [kW or MMBtu/hr] Biomass b) Proposed annual electricity or heat production (fill in as applicable) i. Electricity [kWh] ii. Heat [MMBtu] n/a 4,457 c) Proposed annual fuel usage (fill in as applicable) i. Propane [gal or MMBtu] ...:.::n/.=a _________________ _ ii. Coal [tons or MMBtu] ...:.::n/.=a _________________ _ iii. Wood or pellets [cords, green tons, 544 green tons (wood chips) dry tons] iv. Other 987 gallons heating oil (diesel) Project Cost a) Total capital cost of new system $1,423,292 b) Development cost $287,573 c) Annual O&M cost of new system $21,158 d) Annual fuel cost $68,210 (wood); $3,317 (oil) Project Benefits a) Amount of fuel displaced for i. Electricity n/a ii. Heat 31,733 gallons iii. Transportation b) Current price of displaced fuel $5.36/gallon fuel oil; $175,379 total c) Other economic benefits Two full time jobs created, other seasonal jobs created to tree thin d) Alaska public benefits Local use for forest thinnings AEA 2014-006 Grant Application Page 16 of 30 7/2/2013 Renewable Energy Fund Round VII Grant Application -Heat Projects Heat Purchase/Sales Price a) Price for heat purchase/sale $32-35/mmBtu Project Analysis a) Basic Economic Analysis /··.AL~ -=.1 ENERGY AUTHORITY Project benefit/cost ratio 2.24% --~--------------------------------- Payback (years) 12 --------------------------------------------- AEA 2014-006 Grant Application Page 17 of30 7/2/2013 Renewable Energy Fund Round VII Grant Application -Heat Projects 1-: A' 'hSB1\ e -=:l ENERGY AUTHORITY 4.4.5 Building Efficiency . Please address the following items related to the proposed location of the heating project. If more than one building will be impacted, please address this information for each building. • Building name Kake City School District • Type or primary usage of the building K-12 school • Location Kake, AK • Hours of operation 6am -6pm • Single structure or multiple units Multiple structures • Total square footage 71 ,608? • Electrical consumption per year 257,520 • Heating oil/fuel consumption per year 24,800 gallons heating oil ($132,975) 26,720 for 2012 • Average number of occupants 130? • Has an energy audit been performed? When? Please provide a copy of the energy audit, if applicable. • Have building thermal energy efficiency upgrades been completed? o If applicable, please provide evidence of efficiency improvements including cost and anticipated savings associated with upgrades. o Estimated annual heating fuel savings • If the building is not yet constructed please provide evidence of the value of planned building envelope efficiency investments beyond typical construction practices. Include anticipated savings associated with efficiency investments if available. AEA 2014-006 Grant Application Page 18 of 30 7/2/2013 Renewable Energy Fund Round VII Grant Application -Heat Projects • Building name Kake Senior Center • Type or primary usage of the building Senior living facility • Location Kake, AK • Hours of operation 24/7 • Single structure or multiple units Single structure • Total square footage • Electrical consumption per year • Heating oil/fuel consumption per year 6,700 gallons heating oil ($25, 795) • Average number of occupants 20? I ~ AI ASB?Ae -=>ENERGY AUTHORITY • Has an energy audit been performed? When? Please provide a copy of the energy audit, if applicable. • Have building thermal energy efficiency upgrades been completed? o If applicable, please provide evidence of efficiency improvements including cost and anticipated savings associated with upgrades. o Estimated annual heating fuel savings • If the building is not yet constructed please provide evidence of the value of planned building envelope efficiency investments beyond typical construction practices. Include anticipated savings associated with efficiency investments if available. AEA 2014-006 Grant Application Page 19 of 30 7/2/2013 Renewable Energy Fund Round VII Grant Application -Heat Projects • Building name Kake bingo hall • Type or primary usage of the building Community building • Location Kake, AK • Hours of operation 11am -12pm • Single structure or multiple units Single structure • Total square footage • Electrical consumption per year • Heating oil/fuel consumption per year 1 ,200 Gallons of heating oil $6,432 • Average number of occupants 50? I ~ A I 'W85t\ Et ~ENERGY AUTHORITY • Has an energy audit been performed? When? Please provide a copy of the energy audit, if applicable. • Have building thermal energy efficiency upgrades been completed? o If applicable, please provide evidence of efficiency improvements including cost and anticipated savings associated with upgrades. o Estimated annual heating fuel savings • If the building is not yet constructed please provide evidence of the value of planned building envelope efficiency investments beyond typical construction practices. Include anticipated savings associated with efficiency investments if available. AEA 2014-006 Grant Application Page 20 of30 7/2/2013 Renewable Energy Fund Round VII Grant Application -Heat Projects I · .. A' AS!2?\ VL ~ENERGY AUTHORITY 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: o Potential annual fuel displacement (gallons and dollars) over the lifetime of the evaluated renewable energy project. In order for the applicant to receive credit for heating fuel displaced the applicant must provide the most recent invoice for heating fuel purchased. o Anticipated annual revenue (based on i.e. a Proposed Heat Purchase Agreement price, RCA tariff, or cost based rate) o Potential additional annual incentives {i.e. tax credits) o Potential additional annual revenue streams (i.e. green tag sales or other renewable energy subsidies or programs that might be available) o · Discuss the non-economic public benefits to Alaskans over the lifetime of the proiect This Project will be a benefit to the community ofKake as well as provide a blueprint for all other areas considering biomass energy. The primary beneficiaries will be the Kake City School District, Tlingit and Haida Senior Center and the City ofKake's Bingo hall. This project will potentially reduce the schools heating bill by 45% and that money would then be put into student instruction. The Senior Center would have a similar effect by reducing their heating bill by 45%. The forest itself would also be a beneficiary as we look to use the trees cut down for pre-commercial thinning, thereby creating a market for an otherwise wasted wood. With the amount of forest on Kupreanof Island that was clear-cut our forests need thinning to grow back into a healthy forest again and this would provide additional capital to help facilitate in that process. An additional benefit to the deployment of sustainable and effective wood heat applications is that taking care of heating loads in the near term will better prepare the community and the region for future renewable electricity supplies from an intertie and/or small scale hydro, wind and solar integration. The Southeast Integrated Resource Plan highlight's that a significant issue facing the region is that as the cost of fuel has increased the region's hydro capacity has rapidly diminished due to heating conversions from fuel oil to electricity. The community of Kake wants to address heating loads so that future electricity supply sources will remain sufficient for appropriate end use utilization and allow room for economic growth. SECTION 6--SUSTAINABILITY Discuss your plan for operating the completed project so that it will be sustainable. Include at a minimum: o Proposed business structure(s) and concepts that may be considered. o How you propose to finance the maintenance and operations for the life of the project o Identification of operational issues that could arise. o A description of operational costs including on-going support for any back-up or existing systems that may be require to continue operation o Commitment to reporting the savings and benefits AEA 2014-006 Grant Application Page 21 of30 7/2/2013 Renewable Energy Fund Round VII Grant Application -Heat Projects Ji) ·.. A I AAE4.wt ~ ~ENERGY AUTHORITY In the thermal energy sales model, all of the operations and maintenance costs normally borne by the individual building owner are now borne by the district energy plant operator. Therefore the operation and maintenance costs include nontraditional items such as legal, accounting, insurance, replacement reserves, property taxes and lease payments. The projected operating, maintenance and fuel costs are $101 ,972 in year one. This includes fueling ($68,21 0 for wood chips; $3,317 for fuel oil), labor ($9,600), electricity ($3,287), as well as maintenance and repair, legal, accounting, insurance, site lease, replacement reserves and property taxes ($17,558). These costs combined would be significantly lower (12% at system start, when modeled at breakeven) than the existing heating, operating, and maintenance costs of connected customers' current systems, and all of the O&M costs will be funded by the heat bills of the connected customers. 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. . Kake has set direction towards a workable and sustainable energy future with its locally developed and published CEDS (Comprehensive Economic Development Strategies) Plan dating back to 2004, which includes support of the two local governments-City ofKake and Organized Village ofKake; local school system-Kake School District; local ANCSA village corporation-Kake Tribal Corporation, and local non-profit fish hatchery-Kake Non-Profit Fisheries Corporation. Both OVK and the City have beert members of the Southeast Conference Energy Committee for many years. The third edition of the local Kake CEDS plan is now under development and planned to be published before the end of 2012. Alternative energy and woody biomass continue within the plan as high priorities and the OVK campus demonstration project will be an attainable entry step into cordwood district heating within Kake. Upon grant award, OVK will identify and assign a project leader to begin and systematically address this application's objectives and related tasks. In addition to the CEDS committee, a community energy committee has recently been formed that includes ten members with broad local and regional representation. The committee is in the process of developing a stand-alone energy plan and has identified wood heat as a priority objective. Kake has also been selected as one of five communities to receive technical assistance under the DOE's START program. AEA 2014-006 Grant Application Page 22 of30 7/2/2013 Renewable Energy Fund Round VII Grant Application -Heat Projects I ·.. A 'zASB?A j?t ~ENERGY AUTHORITY Upon grant award, OVK project leader will begin to systematically address this application's objectives and related tasks SECTION 8-LOCAL. SUPPORT AND OPPOSITION Dil)cuss local support and oppol>ition, 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, 2013. . . The Organized Village of Kake has received wide community support for this proposal including endorsement from the Kake Community Energy Committee, which includes broad representation from local and regional interests and entities including the tribe, school, municipality, tribal corporation, IPEC, THRHA, SEACC, SEARC and the Gunnuck Creek Hatchery . 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 additionalinvestments you will make as an applicant. Provide a narrative summary regarding funding sources and your financial commitment to the project 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. Applications MUST include a separate worksheet for each project phase that was identified in section 2.3.2 of this application, (1. Reconnaissance, II. Feasibility and Conceptual Design, Ill. Final Design and Permitting, and IV. Construction and Commissioning). Please use the tables AEA 2014-006 Grant Application Page 23 of30 7/2/2013 Renewable Energy Fund Round VII Grant Application -Heat Projects 1=. ~ provided below to detail your proposed project's budget. Be sure to use one table for each phase of your project. If you have any question regarding how to prepare these tables or if you need assistance preparing the application please feel free to contact AEA at 907-771-3031 or by emailing the Grant Administrator, Shawn Gatta, at scalfa@aidea.org. Project Kickoff Distric~e~~~96!::~~ and Cost Kake School Integration I Senior Center 11 ,.v~· Q"V' Bin~oHall Direct Labor & Travel & Per Diem "~" :& i "' I ( I Other TOTALS TOTALS AEA 2014-006 Grant Application 7/14 11/14 10/14 11/14 11/14 . $5000 $ $60,500 $ $23,072 $ $12,000 $ $5,000 $ $ $ )3,500 >110,072 ijfl,572 Page 24 of30 . . $ $ $ $ $ $ $ $ $ $ S113.572 7/2/2013 Renewable Energy Fund Round VII Grant Application -Heat Projects Proiect ' and ~ r<~v•~• 1 Power Sales and Financial . hirl'!r.t I ~hor 11. Trave~ TOTALS AEA 2014-006 Grant Application 2/15 $5,000 2715$5.000 3/15 $5.000 3715 $1iDjOQ 3/15 $5,000 3/15 $19,072 . $ $ $ $ $ Page 25 of30 I ~ A' WBif\ ~ ..U E ~ENERGY AUTHORITY 20,000 . 20,00( 20.000 $ $ $ $ $ $ ~"" nnn $ $ $ $ $ S114.501 S114.501 7/212013 Renewable Energy Fund Round VII Grant Application -Heat Projects I = -=:> "' .··. ;. ~~t~ ;; 3, 'v ' i'V'c. ',j ~); !)/ j'{:';·············c·· 1•: ••..•.. l:i~f:, ;j /.2/r '(/ 1'•.} , .. I<'• ~~t~r' ~~1'1i1 .... ; ';;.• J '< ., .••. l ! i'' . \,1t7;,:; .,.' .... ;,···· ,: .• ,. ~" Olh I ,. >., .• ,.d.·! } ····' ~~· ~.i• based on phase and type of project. See Milestone list below .. \ $ $ $ $ $ $ $ l $ TOTALS . I Dimr.t Lahor 11. $ -$ ~ .· $ $ $ $ i I;& i $ $ rm;;;r TOTALS AEA 2014-006 Grant Application Page 26 of30 . i . i;; ; .. ,,~··,.>:.. :,;, , ... ..•.. ., .. ,; l'iii)i~fi·~;;·',/l! ) .• ,,)i. $ $ $ $ 7/2/2013 Renewable Energy Fund Round VII Grant Application -Heat Projects Direct Labor & ~ ;& I ~ OlhAr TOTALS AEA 2014-006 Grant Application $ $ $ $ Page 27 of30 I , A' 'Wif2?A 2 -=> ENERGY AUTHORITY $ $ $ $ $ 7/2/2013 Renewable Energy Fund Round VII Grant Application -Heat Projects / -=> A' A68?L -=:>ENERGY AU1HORITY Prolect Milestones that should be addressed in Budaet Prooosal Reconnaissance Feasibility Design and Construction Permitting 1. Project seeping and 1. Project seeping 1. Project seeping 1. Confirmation that all contractor solicitation. and contractor and contractor design and feasibility 2. Resource solicitation. solicitation for requirements are identification and 2. Detailed energy planning and complete. analysis resource analysis design 2. Completion of bid 3. Land use, permitting, 3. Identification of 2. Permit documents applications (as and environmental land and regulatory needed) 3. Contractor/vendor analysis issues, selection and award 4. Preliminary design 4. Permitting and 3. Final 4. Construction Phases environmental analysis and cost environmental assessment and - 5. Cost of energy and analysis mitigation plans Each project will have market analysis 5. Detailed analysis (as needed) unique construction 6. Simple economic of existing and 4. Resolution of phases, limitations, analysis future energy costs land use, right of and schedule and markets constraints which 7. Final report and way issues should be identified 6. Assessment of recommendations alternatives 5. Permit approvals by the grantee 7. Conceptual design 6. Final system 5. Integration and analysis and cost design testing estimate 7. Engineers cost 6. Decommissioning 8. Detailed economic estimate old systems and financial 8. Updated 7. Final Acceptance, analysis economic and Commissioning and 9, Conceptual financial analysis Start-up business and 9. Negotiated 8. Operations operations plans power sales Reporting 10. Final report and agreements with recommendations approved rates 10. Final business and operational plan AEA 2014-006 Grant Application Page 28 of30 71212013 Renewable Energy Fund Round VII Grant Application -Heat Projects ~ SECTION 10-AUTHORIZED SIGNERS FORM Community/Grantee Name: Organized Village of Kake Regular Election is held: Date:9/24/2013 April of each year Authorized Grant Signer(s): Printed Name Title Term Signat~re / Gary E. Williams Executive Director Authorized i~~ft Staff / ·y "#? ,(_/! , I authorize the above person(s) to sign Grant Documents: (Highest ranking organization/community/municipal official) Printed Name Joel Jackson Title Council Vice President (acting for Council President) Term Signature 2 years Grantee Contact Information: Mailing Address: Organized Village of Kake Phone Number: 907-785-6471 x111 (GaryWilliams) Or 121 (Adam Davis) Fax Number: 907-785-4902 E-mail Address: GEWilliams@KakeFirstNation.org AdamD@KakeFirstNation.org Federal Tax ID #: 92-0074844 Please submit an updated form whenever there is a change to the above information. AEA 2014-006 Grant Application Page 29 of30 71212013 Renewable Energy Fund Round VII Grant Application -Heat Projects /~AI *S8%L ~ENERGY AUTHORITY SECTION 11-ADDITIONAL DOCUMENTATION AND CERTIFICATION SUBMIT THE FOLLOWING DOCUMENTS WITH YOUR APPLICATION: A. Contact information, resumes of Applicant's Project Manager, key staff, partners, consultants, and suppliers per application form Section 3.1 and 3.4. 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 heat projects only: 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. One paper copy and one 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 Gary E. Williams / Signature ~r--=/ff ? -v:fl::/1#/: ~ p-/ Title Executive Director Date 09/24/2013 AEA 2014-006 Grant Application Page 30 of30 7/2/2013 Organized Village of Kake P.O. Box 316 Kake, Alaska 99830-0316 Telephone 907-785-64 71 Fax 907-785-4902/ www.KakeFirstNation.org (Federally Recognized Tribal Government serving the Kake, Alaska area) Resolution No. 2013-16-A RESOLUTION IN SUPPORT OF A PROPOSAL TO ALASKA ENERGY AUTHORITY FY2013 ROUND 7 OF THE RENEWABLE ENERGY FUND. WHEREAS, the Organized Village ofKake (hereinafter (OVK), a federally recognized Indian Tribe, is organized pursuant to the authority of the Federal Indian Reorganization Acts (hereinafter IRA) of 1934 & 1936 with the IRA Council as the du1y elected governing body formed under its Constitution and By-laws to execute agreements and contracts with the United States to benefit its members; and, WHEREAS, OVK is further defined as an Indian Tribe in the Indian Self-Determination and Education Assistance Act, P .L. 93-638 and as such is entitled to contract with the Federal Govermnent for the operation of any federal programs, services, activities or functions serving its members; and, WHEREAS, The OVK IRA Council has determined that a strategic economic development plan is necessary to chart a strategy for the community and prioritize projects; and, WHEREAS, The OVK IRA Council is a partner in the broad-based committee to oversee the Comprehensive Economic Development Strategic (CEDS) Plan for the community of Kake; and, WHEREAS, A priority 1 project in the CEDS Plan is biomass heat generation for ail public buildings in Kake; and, WHEREAS, OVK has been selected for The Strategic Technical Assistance Response Team (START) initiative for FY2013 that is a project of the DOE Office of Indian Energy Policy and Programs (DOE-IE) aimed at advancing next-generation energy development in Indian Country; and, WHEREAS, OVK, with guidance from the newly formed Kake Energy Committee, has set biomass heating as a priority for alternative heating source for the Kake City School district, Tlingit & Haida Senior Center and Kake Bingo Hall; and, WHEREAS, The Alaska Energy Authority has funds available through the Renewable Energy Funds for final design and permitting for OVK and the desire to convert heating sources to biomass from fossil fuels in all buildings. THEREFORE BE IT RESOLVED, that the Organized Village of Kake IRA Council sees the need to begin implementation of the OVK Biomass Project; and, BE IT FURTHER RESOLVED, that the Organized Village of Kake IRA Council approves this application to the FY2013 ABA Round 7 of the Renewable Energy Fund. Page2 CERTIFICATION This resolution was duly adopted at an IRA Council meeting held this 23'd day of September, 2013 by a quorum vote of~ (includes president as non-voting chairperson except in case of tie vote) with _5_ yes votes, --R no votes, and ~ abstaining. Attested by Feasibility of Wood-Fired District Energy for Kake, Alaska September 2013 Prepared for: The Organized Village of Kake (OVK) On behalf of: Juneau Economic Development Council 612 W Willoughby Avenue, Suite A Juneau, AK 99801 (907) 523-2300 Prepared by: Andrew Haden Wisewood, Inc. 1001 SE Water Avenue, Suite 255 Portland, OR 97214 andrew@wisewood.us Feasibility of Wood-Fired District Energy for Kake, Alaska September 2013 2 1 INTRODUCTION 3 1.1 Options Considered 3 2 EXISTING HEATING SYSTEMS 3 2.1 Kake City School District 4 2.2 Tlingit and Haida Senior Housing Center 4 2.3 Bingo Hall 4 3 TECHNOLOGY ASSESSED 4 3.1 Technology Description 4 3.2 Optimum installed capacity and capacity factor 5 3.3 Mechanical Integration 5 3.4 Site Considerations 5 3.5 Project Construction and Development Costs 6 3.6 Operations and Maintenance Costs 7 3.7 Heat Sales 7 4 KAKE WOOD SUPPLY ASSESSMENT 7 4.1 Available Timber Lands 7 4.2 Other Wood Resource Opportunities 9 4.3 Existing Infrastructure 10 4.4 Logging Systems and Associated Costs 12 4.5 Self-loader System 12 4.6 Shovel System 12 4.7 Mechanized System 12 4.8 Renewable Resource Sustainability 13 5 PRELIMINARY RECOMMENDATIONS 13 6 ENERGY MODEL 14 7 PROJECT COSTS 18 8 FINANCIAL MODEL 21 9 SITE PHOTOS 27 Feasibility of Wood-Fired District Energy for Kake, Alaska September 2013 3 1 Introduction Kake, Alaska is a native village of approximately 710 people on the Northwest corner of Kupreanof Island. With no access to natural gas or the Alaskan railroad system, Kake relies on expensive imported fossil fuels for both its electrical power generation and its heating energy. For this reason, the economy of Kake is severely exposed to fossil fuel price volatility and finding lower cost, sustainable substitutes for fossil energy is an important strategy for bolstering the resilience of the Kake economy and community. This study represents a portion of the work commissioned by the Juneau Economic Development Council (JEDC), together with the Organized Village of Kake (OVK), to explore different business models that could utilize the forest resources surrounding Kake for local economic development. 1.1 Options Considered While the larger study looks at a variety of options for utilizing wood resources for economic development, from selling firewood to local homes and other communities in SE Alaska to selling conditioned wood chips to local institutional boilers, the novel concept of selling metered thermal energy was seen as the most innovative and catalytic concept to begin with. This is an idea that may open the door to each of the other potential wood-to-energy concepts considered, and is therefore the focus of this study. Selling heat is seen as advantageous because it addresses the two primary barriers to implementation of wood-to-energy projects: 1) the upfront capital costs required for the design and construction of the systems; and 2) the additional labor requirement for operations and maintenance of wood fired-boilers. By financing the design and construction of the wood-fired boiler systems in Kake via a single entity, and by owning the boilers as a network of energy generation assets managed by a new business dedicated to the fueling and maintenance of the new boiler systems, the sale of thermal energy offers a way to overcome these two primary barriers while creating a potentially more stable platform for economic development than a series of individual boiler systems. 2 Existing Heating Systems All of the institutions that are to be served by the district energy plant and/or future wood-fired boilers are experiencing increased budget pressure due to high heating bills resulting from the use of heating oil for space and domestic hot water heating. Existing energy resources for heating in Kake primarily include heating oil (#1 and 2) and propane. Diesel is imported to the community at a cost of $5.36 per gallon; propane rates were quoted verbally at $3.25-3.75/gallon. Moreover, the physical condition of many of the heating systems in participating institutions indicates that they are ready for replacement, and maintenance costs are continuing to increase. This study looks at the cost of providing each customer with a new low-maintenance heat source at or below the price they currently pay for fossil fuel, and aims to Feasibility of Wood-Fired District Energy for Kake, Alaska September 2013 4 understand at what level of subsidization a district energy system could cover its costs, including future replacement, while lowering and stabilizing heating costs for connected customers. Current fossil fuel-burning heating systems provide a direct pathway out of the community for significant amounts of money. By lowering and redirecting existing fuel expenditures toward local employment and land restoration, a district energy system could facilitate positive economic, environmental and social outcomes simultaneously. 2.1 Kake City School District The Kake City School District building is heated by a Burnham model V909 #2 oil- fired boiler rated at 1,342 MBH. It replaced a slightly larger Burnham boiler in 2012 that no longer functions but is still in place in the school. The boiler uses a Beckett oil burner rated at 7.0-19.9 GPH and supplies hot water to the school’s heat distribution system. Its efficiency is rated at 80%. In 2012 the School used 26,720 gallons of #2 fuel oil. At a current price of $5.36/gallon, the School’s heating budget for 2013/14 is over $140,000. 2.2 Tlingit and Haida Senior Housing Center The Tlinglit and Haida Senior Housing Center is heated by two Weil-McLain oil-fired boilers rated at 184 MBH each. They use Beckett oil burners, rated at 1.10-2.00 GPH. The boilers were installed in 2006, but Senior Center Staff have had difficulty with them and expressed that they are open to other options. Discussions with maintenance staff indicate an average annual fuel consumption of approximately 4,800 gallons of #2 fuel oil, or $25,000 per year. 2.3 Bingo Hall The Kake Bingo Hall is heated by an oil-fired room heater that is estimated to consume 1,200 gallons of oil per year, for a cost of approximately $6,500. The building is used intermittently for events throughout the year. 3 Technology Assessed 3.1 Technology Description The system assessed is a 400 kW (1,365 MBH) state-of-the-art biomass boiler system capable of burning green biomass with up to 60% moisture content (MC). Wood chip fuel will be stored in a concrete bunker or structural steel bin outfitted with a hydraulic scraper floor reclaim system. Fuel conveyance to the furnace will be accomplished by either large diameter augers or a hydraulic ram feed. The combustion furnace will be a variant of a two-phased direct combustion furnace (with Feasibility of Wood-Fired District Energy for Kake, Alaska September 2013 5 distinct primary and secondary combustion zones) with an active grate (optionally cooled) appropriate for wet fuels up to 60% MC, 4” maximum particle size, and 5% maximum ash content. Automatic ignition, flue gas recirculation, oxygen sensor- based combustion controls, and a remote monitoring system will be specified for the system for maximum combustion efficiency. The hot water boiler will be a three-pass fire-tube boiler operating at 30 psi. Automated ash handling and storage will be specified for the system, allowing for the periodic removal of ash from the boiler room for use on local lands as a soil amendment or landfilled. Flue gas cleaning will be via high efficiency multi-cyclone. The boiler system and peripheral equipment will be housed in an insulated metal building with the fuel storage bin outside under cover, located adjacent to the building on the same concrete pad (approximately 1,600 square feet). 3.2 Optimum installed capacity and capacity factor Total system capacity will be 1,365 MBH (400 kW) calculated for the combined loads of the buildings selected to be connected to the district system. This is the optimum size for the biomass boiler in this location due to a long, relatively stable maritime weather pattern that allows for excellent base loading of the system. A 1,365 MBH boiler will be able to supply over 95% of the estimated energy demand for the connected buildings. 3.3 Mechanical Integration Heat distribution will be via factory-insulated underground PEX hot water piping. At each facility, a district energy substation will include a heat exchanger, Btu meter and data logger with telemetric capability to enable billing. Integration with existing heating systems will be made at each substation heat exchanger, which will be plumbed to behave as the lead boiler in a lead-lag configuration, with the existing boiler system fulfilling the lag role. 3.4 Site Considerations There is a large unused lot next to the Kake City Schools that is owned by the City of Kake and would be an ideal location for the construction of a District Energy plant. This site would also have room for the addition of future value added processing of wood resources into products such as micro-chips and kiln-dried cordwood. Anticipated barriers include trenching deep enough to lay the insulated PEX pipes below the frost line without encountering hardpan or bedrock. Additionally, due to its remote location, most materials will have be barged in, which can add significant cost. All design work will take into account any locally available skilled labor, and Feasibility of Wood-Fired District Energy for Kake, Alaska September 2013 6 engineering will aim to reduce the amount of concrete and other heavy materials needed for construction. Figure 1. Proposed location of the Kake District Energy plant (in orange) with piping runs to Kake City Schools, Tlingit and Haida Senior Housing Center and Bingo Hall 3.5 Project Construction and Development Costs The total project cost is currently projected to be $1,425,000, including all project and development costs. Securing grants for a total of $800,000, or 56.2% of the project, is anticipated, with a construction loan during the construction phase for the remainder, or $625,000. The intent of this funding structure is to leverage a mix of public and private money to fund the construction of the district energy plant. Feasibility of Wood-Fired District Energy for Kake, Alaska September 2013 7 The total project cost includes $1,137,000 in direct capital costs and $288,000 in development costs. The detailed cost estimate (attached) provides a breakdown of all major costs for the project. 3.6 Operations and Maintenance Costs In the thermal energy sales model, all of the operations and maintenance costs normally borne by the individual building owner are now borne by the district energy plant operator. Therefore the operation and maintenance costs include non- traditional items such as legal, accounting, insurance, replacement reserves, property taxes and lease payments. The projected operating, maintenance and fuel costs are $101,972 in year one. This includes fueling ($68,210 for wood chips; $3,317 for fuel oil), labor ($9,600), electricity ($3,287), as well as maintenance and repair, legal, accounting, insurance, site lease, replacement reserves and property taxes ($17,558). These costs combined would be significantly lower (12% at system start, when modeled at breakeven) than the existing heating, operating, and maintenance costs of connected customers’ current systems, and all of the O&M costs will be funded by the heat bills of the connected customers. 3.7 Heat Sales The three facilities that would receive heat from the proposed biomass energy system include the Kake City Schools, the Tlinglit and Haida Senior Housing Center, and the Bingo Hall. All of these facilities are publically owned and operated. If the city were to own and operate the District Energy system, they would be their own customer, and so could retain any savings gained by the system over its lifetime. Should the system be owned and operated by a third party, which is modeled in the feasibility study’s economic analysis, then the city would be the customer, with each of its three facilities connected to the biomass system and their energy use separately metered at each site. Projected thermal energy purchase prices are $33- 35/mmBtu, significantly lower than the current efficiency non-corrected purchase price of $38.56 ($48.20 at 80% Efficiency) 4 Kake Wood Supply Assessment 4.1 Available Timber Lands There are approximately 30,000 acres of road-accessible young growth forest approximately evenly split between the US Forest Service (USFS), SEALASKA Corporation and Kake Tribal Corporation (KTC). There are approximately 11,000 acres of old-growth timber lands that are considered suitable for logging near existing roads, the vast majority of which occurs on USFS lands. Approximately two-thirds of Feasibility of Wood-Fired District Energy for Kake, Alaska September 2013 8 the young-growth and old-growth timber lands are ground operable (slopes < 35%); the rest would require cable logging systems. Age classes of the young-growth stands range from 15-50 years and site productivity is highly variable. Many of these stands are in need of pre-commercial thinning (especially on KTC lands) and wildlife habitat enhancement. Some of these lands could be available for commercial thinning in the next 20 years. Old-growth stands that are suitable for logging near the Kake road system are generally low volume (10-20 MBF/acre) and tend to include a high percentage of defect (> 30%). Although the stands with high defect would likely still be suitable for biomass wood products, these conditions reduce the economic viability of a combination sawlog and biomass operation. There are currently 26 MMBF of NEPA cleared old-growth timber that the USFS can make available through timber sales near Kake. Round-trip haul times for this timber are approximately 1.5 hours. Photo 1. Example of relatively high value roadside old-growth from the Central Kupreanof Timber Sale. Units that have a component of yellow cedar are the most likely to provide opportunities for a combined sawlog and biomass operation. Feasibility of Wood-Fired District Energy for Kake, Alaska September 2013 9 Photo 2. Example of ~40 year old roadside young growth stand. This stand was pre- commercially thinned in the 1980s to 12’ x 12’ spacing and could easily support a second thinning entry that would result in improved wildlife habitat while providing approximately 5- 10 MBF/acre of low-grade wood as a byproduct. There are approximately 3,000 acres of this forest type within a one-hour round trip from Kake. 4.2 Other Wood Resource Opportunities There is an unknown, but likely considerable, volume of cull wood that is already decked near both private and public land road systems. Personal communications from the CEO of KTC suggest that 5-10 MMBF is available near a small section of road that is within 20 minutes of town. There is a large amount of “pre-commercial” thinning scheduled on both public and private lands near Kake. Although the feasibility of using thinning waste has not been demonstrated in Southeast Alaska, this report sketches out a system that should be economical within 200 feet of the road and that we are confident would provide access to enough material to jump-start this operation. Photo 3. Cull wood left from historical logging operations. It is also worth considering the option of Red Alder cultivation for long-term biomass feasibility. Red Alder forests could be generated and maintained in suitable sites through ground harvest and ground scarification and would result in a fast-growing, easy-to-access and higher-Btu wood resource that also adds biodiversity values. Feasibility of Wood-Fired District Energy for Kake, Alaska September 2013 10 If the production of wood heat products develops so that it is economically feasible to meet potential export markets in Sitka and Juneau, it would likely be necessary to start looking at nearby Kuiu Island for additional timber lands. Photo 4. Roadside alder stands are common in areas that were tractor logged in the 1960s and 1970s. 4.3 Existing Infrastructure There are approximately 250 miles of logging road connected to the Kake road system. Although much of this road is currently not navigable because of storage operations (culverts and bridges removed) and a lack of brushing, there is still a very extensive system that can be considered suitable as a “wood basket” for a heating products business. As a general indicator, it is worth noting that approximately 75% of the USFS road system is currently considered open and available for logging operations (approximately 120 miles). Data for SEALASKA and KTC road systems was not available at the time of this report but it is likely that a smaller percentage of corporation land roads are currently drivable. Considerable additional road access could also be developed by brushing alone. There is limited logging equipment currently operating in Kake. Between one and three operations exist, each of which operates sporadically and is generally limited to forests very near existing roads (less than 200 feet). Wood waste from these operations is currently nominal. One local operator (K. Merry) suggested that he could provide up to 4 MBF per day given suitable timberlands. There are approximately 3,600 acres of suitable old-growth timber lands within 200 feet of existing USFS roads. Feasibility of Wood-Fired District Energy for Kake, Alaska September 2013 11 Figure 2. Map showing Kake area ownerships, suitable old-growth, young-growth age classes and operability. <» Ground Operable -Roads Land Status • <all other values> • US Forest Service Basic Forest Inventory Data for Kake Biomass Feasibility • 10 years or younger • 10-20 years old 20-30 years old • 30-40 years old • 40 years and older 0 5 N Miles ! • SEALASKA Regional Corp . Suitable Old-growth • USFS SUitable Old-growth Feasibility of Wood-Fired District Energy for Kake, Alaska September 2013 12 4.4 Logging Systems and Associated Costs For the purposes of this report we have assessed logging costs for three scenarios: 1) hand fall and buck with a shortlogger self-loader; 2) hand fall and buck with shovel skidding and a long log truck; and 3) mechanized fall, buck and skid with a long log truck. Each scenario includes all costs necessary to deliver round logs to a processing facility within a two-hour round trip from Kake (Table 1) and assumes a high degree of defect in old-growth stands. Longer-span cable logging systems are considered uneconomical and unsustainable for the Kake road system at this time. 4.5 Self-loader System Existing logging and delivery capacity in Kake is restricted to very short-span cable systems and short log self-loader trucks. These systems can access only a fraction of the total wood basket available near Kake but they may be satisfactory for initial business start-up. The costs included in Table 1 are based on a phone conversation with a Kake resident who runs a local logging operation. 4.6 Shovel System One of the most common and economical forms of old-growth logging in Southeast Alaska today is the shovel logging system. This system is capable of operating on lands with slopes less than 35% on well-drained sites and less than 20% on wetter sites. There is a small track-hoe in Kake that would be suitable for service as a shovel if a grapple-head were added; otherwise this system would have to be mobilized from outside the community. The costs included in Table 1 were generated using the USFS Tongass Logging Cost Calculator (Petaisto 2012). 4.7 Mechanized System Logging for biomass operations using a mechanized feller is the second-most economical approach. These systems are being used in numerous locations throughout the world, including the Chugach National Forest in Alaska. The same small track-hoe cited above may be suitable for use as a mechanical feller with the appropriate head attachment; otherwise this system would have to be mobilized from outside the community. For the purposes of this report the costs included in Table 1 were generated using the USFS Tongass Biomass Treatment Calculator (Hemphill 2011). Feasibility of Wood-Fired District Energy for Kake, Alaska September 2013 13 Table 1. Logging costs considered for biomass heat feasibility in the community of Kake. 4.8 Renewable Resource Sustainability This section of the report estimates that the total wood supply necessary to meet all commercial heating needs in Kake is approximately 1,000 cords, or 1,550 green tons, annually. The table below summarizes the available data for suitable old-growth and young-growth forests near Kake. The two right-hand columns estimate the number of years of supply available from the local wood basket based on clearcut and partial cut scenarios (20 MBF/acre and 10 MBF/acre, respectively). Renewable resource supply from the local land base appears to be sustainable and provides room for the existing residential heat market and future growth. Table 2. Natural resource availability for biomass heat feasibility in the community of Kake. 5 Preliminary Recommendations As the broader study of which this district energy feasibility study is part has progressed, from looking at small scale stick-fired boilers systems, to small and medium scale conditioned “Micro-chip” boilers for individual buildings, and finally to district energy, it has became apparent that some form of institutional structure is needed to both establish this new form of renewable heating in the community and to host and develop the technical competence needed to fuel, operate and maintain the new heating systems. By creating a new entity that finances, owns, operates and maintains the wood-fired on behalf of their customers, and sells thermal energy as a service, the major barriers to adoption of wood energy in Kake can be overcome in a systematic way. In the process, a new institution will be formed that offers durable local employment while enhancing forest restoration on Tribal and National Forest lands, for decades to come. If successful, this project will create a replicable model for deployment of biomass thermal energy technology in other Southeast Alaskan communities. Feasibility of Wood-Fired District Energy for Kake, Alaska September 2013 14 6 Energy Model All materials contained in this document are the intellectual property of Wisewood, Inc. and are provided exclusively to Client. Copyright © 2013, Wisewood, Inc. All rights reserved. Kake Community Energy Kake Wood-Fired District Energy Energy Calculations Contact Andrew Haden Buildings: Kake School, Senior Center, Bingo Hall Phone (503) 706-6187 Email andrew@wisewood.us Client Kake Community Energy Boiler Option Kake Wood-Fired District Energy Address 1001 SE Water Ave, Suite 255 Location Kake, AK System Output (MBH)1365 Portland, OR 97214 Contact Adam Davis (OVK); Margaret O'Neal (JEDC)Fuel Type Forestry Residuals Date 9/24/13 Workbook Version 3.9.5 Exisiting fossil fuel consumption (MMBtu/HDD)0.543 Max. electrical demand (kW)3 Current heating oil use, [gal/yr]32,720 Existing Boiler Eff.80%Average electrical demand (kW)1.8 Current propane use, [gal/yr]0 Calculated exisiting heat input (MMBtu/HDD)0.434 Annual use (kWhr)5217 Current heating oil cost, [$/yr]$175,379 Energy Efficiency Measures (EEMs)0%Estimated reduction in heating oil use 98%Current propane cost, [$/yr]$0 Wood Boiler Eff.80%Boiler output, high-fire (MBH)1365 Projected wood fuel use, [tons/yr]544 Heating oil cost, $/gal.$5.36 Boiler output, low-fire (MBH)273 Projected heating oil use, [gal/yr]653 Propane cost, $/gal.$3.29 Average boiler output (MBH)828 Projected wood fuel cost, [$/yr]$68,210 Electricity cost, $/kWhr 0.63 Wood MC, wet weight basis 50%Projected heating oil cost, [$/yr]$3,500 Wood fuel cost, $/green ton $125.48 Energy of Wood, mmBtu/ton, LHV 8.2 Projected add. elec. cost, [$/yr]$3,287 Fossil fuel cost, $/mmBtu $38.56 Energy of heating oil, Btu/gal, HHV 139000 Operating hours per day 12 Wood fuel cost, $/mmBtu $15.30 Energy of propane, Btu/gal, HHV 92000 Operating hours, yr 2868 Month Applicable Heating Degree Days [HDD] Current gross fossil energy consumption, [MMBtu] Current net space heat energy input [MMBtu] Projected net space heat input after EEMs [mmBtu/mo] Projected gross wood energy consumption, [MMBtu] Projected gross fossil energy consumption, [MMBtu] September 439 238 191 191 234 7 October 679 369 295 295 361 10 November 968 526 421 421 515 11 December 985 535 428 428 525 12 January 1122 610 488 488 597 9 February 829 450 360 360 441 10 March 940 511 408 408 500 7 April 679 369 295 295 361 7 May 636 345 276 276 338 5 June 423 230 184 184 225 4 July 335 182 145 145 178 4 August 340 185 148 148 181 0 Yearly Total, or Avg,8374 4,548 3,638 3,638 4,457 86 Net fossil energy savings, [MMBtu/yr]4,462 All materials contained in this document are the intellectual property of Wisewood, Inc. and are provided exclusively to Client. Copyright © 2013, Wisewood, Inc. All rights reserved. Kake Community Energy Kake Wood-Fired District Energy Energy Calculations Client Kake Community Energy Boiler Option Kake Wood-Fired District Energy Contact Andrew Haden Location Kake, AK System Output (MBH)1365 Phone (503) 706-6187 Contact Adam Davis (OVK); Margaret O'Neal (JEDC)Fuel Type Forestry Residuals Email andrew@wisewood.us Date 9/24/13 Workbook Version 3.9.5 303.2 0 500 1,000 1,500 2,000 2,500 9/1/11 9/8/11 9/15/11 9/22/11 9/29/11 10/6/11 10/13/11 10/20/11 10/27/11 11/3/11 11/10/11 11/17/11 11/24/11 12/1/11 12/8/11 12/15/11 12/22/11 12/29/11 1/5/12 1/12/12 1/19/12 1/26/12 2/2/12 2/9/12 2/16/12 2/23/12 3/1/12 3/8/12 3/15/12 3/22/12 3/29/12 4/5/12 4/12/12 4/19/12 4/26/12 5/3/12 5/10/12 5/17/12 5/24/12 5/31/12 6/7/12 6/14/12 6/21/12 6/28/12 7/5/12 7/12/12 7/19/12 7/26/12 8/2/12 8/9/12 8/16/12 8/23/12 8/30/12 Average Hourly Heat Demand (MBH) Estimated Heat Load Coverage by New Wood Chip Boiler Calculated Heat Load (MBH) Estimated Wood Boiler Load Coverage All materials contained in this document are the intellectual property of Wisewood, Inc. and are provided exclusively to Client. Copyright © 2013, Wisewood, Inc. All rights reserved. Kake Community Energy Kake Wood-Fired District Energy Energy Calculations Project Kake Community Energy Boiler Option Kake Wood-Fired District Energy Contact Andrew Haden Location Kake, AK System Output (MBH)1365 Phone (503) 706-6187 Contact Adam Davis (OVK); Margaret O'Neal (JEDC)Fuel Type Forestry Residuals Email andrew@wisewood.us Date 9/24/13 Workbook Version 3.9.5 Wood Boiler "Right-Sizing" Tool Boiler Output [MBH]Fossil Fuel Displaced 15 98% 34 4% 89 11% 136 16% 177 21% 205 25% 266 32% 341 41% 512 58% 750 77% 1024 92% 1365 98% 2000 95% 2730 87% 3412 79% 4094 68% 5459 38% 7165 6% 10236 3% 13648 0% 17060 0% 20472 0% 23884 0% 27296 0% 30708 0% 34120 0% 0.00 500.00 1,000.00 1,500.00 2,000.00 2,500.00 12 300 588 876 1164 1452 1740 2028 2316 2604 2892 3180 3468 3756 4044 4332 Estimated Heat Demand (MBH) Estimated Boiler Operating Hours Estimated Annual Heat Load Coverage by New Wood Boiler Calculated Heat Load (MBH) Estimated Wood Boiler Load Coverage Feasibility of Wood-Fired District Energy for Kake, Alaska September 2013 18 7 Project Costs All materials contained in this document are the intellectual property of Wisewood, Inc. and are provided exclusively to Client. Copyright © 2013, Wisewood, Inc. All rights reserved. Kake Community Energy Project Costs - Detailed Boiler Option Kake Wood-Fired District Energy Orig. Date 22-Aug-13 Contact Andrew Haden System Output 1,365 MBH Rev. Date 24-Sep-13 Phone (503) 706-6187 Fuel Type Forestry Residuals Version 3.9.5 Email andrew@wisewood.us Unit Est.Install Install Install % of Item Description Unit Qty Cost Hours Equipment Materials Labor Total Total Construction Costs Civil/Structural Site Preparation and Demolition SF 4,000 2$ 0 -$ -$ -$ 8,000$ 0.6% Excavation CY 590 40$ 0 -$ -$ -$ 23,600$ 1.7% Concrete (Building, Equipment and Fuel Bunker)CY 90 500$ 320 5,000$ 45,000$ 24,000$ 74,000$ 5.2% Boiler Building (Pre-engineered Steel)SF 1,600 30$ 320 -$ 48,000$ 24,000$ 72,000$ 5.1% Subtotal Civil/Structural: 640 5,000$ 93,000$ 48,000$ 177,600$ 12.5% Mechanical Installation Fuel Storage and Conveyance Walking floor, width=4,5m, length=10,0m EA 1 29,000$ 80 3,000$ 29,000$ 6,000$ 38,000$ 2.7% Hydraulic stoker, length=4,5m EA 1 22,000$ 40 -$ 22,000$ 3,000$ 25,000$ 1.8% Wood chip fuel bunker retaining wall EA 1 8,000$ 16 -$ 8,000$ 1,200$ 9,200$ 0.6% Subtotal: 136 3,000$ 59,000$ 10,200$ 72,200$ 5.1% Biomass Boiler Wood Chip-Fired Hot Water Boiler (1365 MBH)EA 1 265,000$ 160 3,000$ 265,000$ 12,000$ 280,000$ 19.7% Hot Water Storage Tank (700 gal.)EA 1 25,000$ 40 -$ 25,000$ 3,000$ 28,000$ 2.0% Breeching and Stack (12")FT 40 400$ 16 -$ 16,000$ 1,200$ 17,200$ 1.2% Boiler Pumps EA 2 1,250$ 16 -$ 2,500$ 1,200$ 3,700$ 0.3% Boiler Piping FT 50 30$ 32 -$ 1,500$ 2,400$ 3,900$ 0.3% Subtotal: 264 3,000$ 310,000$ 19,800$ 332,800$ 23.4% Piping and Plumbing Buried 3" Preinsulated PEX (School Loop)FT 400 90$ 160 2,000$ 36,000$ 12,000$ 50,000$ 3.5% Trenching and Backfill (2-Pipe)FT 200 20$ 80 5,000$ 4,000$ 6,000$ 15,000$ 1.1% Buried 2.5" Preinsulated PEX Twin (Senior Cntr.)FT 500 55$ 200 -$ 27,500$ 15,000$ 42,500$ 3.0% Buried 1" Preinsulated PEX Twin (Bingo Hall)FT 200 35$ 80 -$ 7,000$ 6,000$ 13,000$ 0.9% Trenching and Backfill Single Pipe (Thermal Twin)FT 700 15$ 80 -$ 10,500$ -$ 10,500$ 0.7% PEX Vaults EA 2 1,500$ 40 -$ 3,000$ 3,000$ 6,000$ 0.4% PEX Fittings EA 60 50$ 40 -$ 3,000$ 2,070$ 5,070$ 0.4% DE Meter EA 3 10,000$ 24 -$ 30,000$ 1,800$ 31,800$ 2.2% Utilties-Water FT 200 25$ 32 -$ 5,000$ 2,400$ 7,400$ 0.5% Utilties-Sewer FT 200 30$ 32 -$ 6,000$ 2,400$ 8,400$ 0.6% Subtotal: 768 7,000$ 132,000$ 50,670$ 189,670$ 13.3% Mechanical Contractor Per Diem 146 Man Days $150.00 $21,900 $21,900 1.5% Travel 29.2 Man Weeks $300.00 $8,760 $8,760 0.6% Subtotal: -$ -$ 30,660$ 30,660$ 2.2% Subtotal Mechanical Installation 1,168 13,000$ 501,000$ 111,330$ $594,670 41.8% Electrical Control Wiring 160 12,000$ 13,600$ 25,600$ 1.8% Power Distribution 80 15,000$ 6,800$ 21,800$ 1.5% Subtotal Electrical 240 -$ 27,000$ 20,400$ $47,400 3.3% Permitting Boiler Permit 500$ 0.0% Building Permit 3,500$ 0.2% Electrical Permit 1,000$ 0.1% Subtotal Permitting $5,000 0.4% Miscellaneous Freight to Project Site 20,000$ 1.4% Subtotal Miscellaneous $20,000 1.4% Uncertainty (Construction) All materials contained in this document are the intellectual property of Wisewood, Inc. and are provided exclusively to Client. Copyright © 2013, Wisewood, Inc. All rights reserved. Construction Contingency 8.0%67,574$ 4.7% Unlisted Items Allowance 3.0%25,340$ 1.8% Subtotal Direct Costs 2,048 18,000$ 621,000$ 179,730$ 937,584$ 65.9% % of Direct Contractor Costs Costs General Conditions 4.0%37,503$ 2.6% Overhead 1.0%9,376$ 0.7% Profit 10.0%93,758$ 6.6% Liability Insurance 1.8%16,408$ 1.2% Construction All Risk Insurance 0.6%6,814$ 0.5% Payment & Performance Bond 3.0%34,276$ 2.4% Subtotal Contractor Costs 21.1%$198,136 13.9% Subtotal Construction Costs 1,135,719$ 79.8% Project Development Costs Engineering, Procurement and Contruction % Tot. Cost Civil/Mechanical/Structural Engineering 10.0%113,572$ 8.0% Project Management 4.0%45,429$ 3.2% Construction Management 4.0%45,429$ 3.2% Testing, Training and Start-up Assistance 3.0%34,072$ 2.4% Subtotal:238,501$ 16.8% Finance and Accounting % Tot. Cost Legal 10,000$ 0.7% Accounting 5,000$ 0.4% Finance Package Consulting and Fees 3.0%34,072$ 2.4% Subtotal:49,072$ 3.4% Subtotal Development Costs 287,573$ 20.2% Total Project Costs 1,423,292$ 100.0% All materials contained in this document are the intellectual property of Wisewood, Inc. and are provided exclusively to Client. Copyright © 2013, Wisewood, Inc. All rights reserved. Feasibility of Wood-Fired District Energy for Kake, Alaska September 2013 21 8 Financial Model All materials contained in this document are the intellectual property of Wisewood, Inc. and are provided exclusively to Client. Copyright © 2013, Wisewood, Inc. All rights reserved. Kake Community Energy Kake Wood-Fired District Energy Contact Andrew Haden Sources and Uses of Funding Phone (503) 706-6187 24-Sep-13 Version 3.9.5 Email andrew@wisewood.us Construction Period Permanent Period Sources of Funding Total % of Total Sources of Funding Total % of Total Construction Period Grant 800,000$ 56%Permanent Period Equity -$ 0% Construction Loan 623,292$ 44%Permanent Period Grants -$ 0% Total Sources of Funding 1,423,292$ 100%Permanent Debt: Uses of Funding Total % of Total Senior Loan 623,291.92$ 100.0% Construction Costs 1,135,719$ 80% Development Costs 287,573$ 20%Subtotal Permanent Debt $623,292 100.0% Total Uses of Funding 1,423,292$ 100%Total Sources of Funding 623,292$ 100.0% Funding Surplus (Gap)-$ 0.0% Senior Loan Amount 623,292$ Construction Period Financing Assumptions Interest Rate 5% Term (Years)20 Construction Loan Debt Service (Annual)$30,902 Amount 623,292$ DCR 1.60 Interest Rate 6% Term (Months)12 All materials contained in this document are the intellectual property of Wisewood, Inc. and are provided exclusively to Client. Copyright © 2013, Wisewood, Inc. All rights reserved. Kake Community Energy Kake Wood-Fired District Energy Stabilized-Year Operating Proforma Contact Andrew Haden 24-Sep-13 Phone (503) 706-6187 Version 3.9.5 Email andrew@wisewood.us Item Total Existing Fossil Heating System Operating Cost Heat Load 4462 mmBtu per Year Fuel Cost 38.56$ per mmBtu Existing Heating Cost, Total 172,063$ Wood-Fired District Energy Heat Price Estimated Reduction in Fuel Bill of Connected Facilities 12.00%20,648$ District Energy Heat Price, Total 151,415$ Proposed District Energy System Operating and Maintenance Cost Remaining Heating Oil Heating OIl Use (Peak and Low Load)86 mmBtu per Year Heating Oil Cost 38.56$ per mmBtu Subtotal: 3,317$ Wood Wood Use 544 Green Tons per year Wood Use 4,457 mmBtu per Year Wood Fuel Cost 15.30$ per mmBtu (@ 50% MC) Wood Fuel Cost 125.48$ per Green Ton (@ 50% MC) Subtotal: 68,210$ Electricity Annual Operations 2868 Hours/Year Max Boiler Output 1,365 MBH Average Boiler Output 828 MBH Maximum Electrical Draw 3 kWh Average Electrical Draw 1.8 kWh/Hour Annual Use 5,217 kWh Electricity Cost $0.63 per kWh Subtotal: 3,287$ Parts and Labor Labor needs 8 Hours per Week 40 Weeks per Year 320 Hours per Year All materials contained in this document are the intellectual property of Wisewood, Inc. and are provided exclusively to Client. Copyright © 2013, Wisewood, Inc. All rights reserved. Labor Cost 30.00$ per Hour Subtotal: 9,600$ Reserves for boiler replacement 1.5%of Boiler Cost 4,200$ Maintenance and Repair Parts 2,000$ Subtotal: 6,200$ Admin Legal 300$ Accounting 300$ Insurance Cost 0.25%of Project Cost 3,558$ Site Lease Fee $300.00 per Month 3,600$ Annual Property Taxes 3,600$ Subtotal: 11,358$ Total Proposed Heating System Operating Costs 101,972$ EBITDA 49,443$ Debt Service Senior Loan $49,361 Total Debt Service $49,361 Cash Flow $82 All materials contained in this document are the intellectual property of Wisewood, Inc. and are provided exclusively to Client. Copyright © 2013, Wisewood, Inc. All rights reserved. Kake Community Energy Kake Wood-Fired District Energy 30-Year Operating Pro Forma Contact Andrew Haden Phone (503) 706-6187 Rev. Date 24-Sep-13 Email andrew@wisewood.us Boiler Option Kake Wood-Fired District Energy System Output 1,365 MBH Version 3.9.5 Annual Annual Cost 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Cost Escalator 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Existing Heating Cost $172,063 3.5%$172,063 $178,085 $184,318 $190,769 $197,446 $204,356 $211,509 $218,912 $226,574 $234,504 $242,711 $251,206 $259,998 $269,098 $278,517 District Energy Heat Price $151,415 2.0%$151,415 $154,443 $157,532 $160,683 $163,897 $167,175 $170,518 $173,928 $177,407 $180,955 $184,574 $188,266 $192,031 $195,872 $199,789 Net Savings $20,648 $23,641 $26,786 $30,086 $33,549 $37,182 $40,991 $44,983 $49,167 $53,549 $58,137 $62,941 $67,967 $73,227 $78,728 KAKE COMMUNITY ENERGY Gross Revenue from Energy Sales $151,415 2.0%$151,415 $154,443 $157,532 $160,683 $163,897 $167,175 $170,518 $173,928 $177,407 $180,955 $184,574 $188,266 $192,031 $195,872 $199,789 Proposed District Energy System Operating and Maintenance Cost Fuel Heating Oil 3,317$ 3.5%3,317$ 3,433$ 3,553$ 3,677$ 3,806$ 3,939$ 4,077$ 4,220$ 4,367$ 4,520$ 4,678$ 4,842$ 5,012$ 5,187$ 5,369$ Wood 68,210$ 1.5%68,210$ 69,233$ 70,272$ 71,326$ 72,396$ 73,481$ 74,584$ 75,702$ 76,838$ 77,991$ 79,160$ 80,348$ 81,553$ 82,776$ 84,018$ Electricity 3,287$ 1.5%3,287$ 3,336$ 3,386$ 3,437$ 3,489$ 3,541$ 3,594$ 3,648$ 3,703$ 3,758$ 3,815$ 3,872$ 3,930$ 3,989$ 4,049$ Subtotal Fuel Cost 74,813$ 74,813$ 76,002$ 77,211$ 78,440$ 79,690$ 80,962$ 82,255$ 83,570$ 84,908$ 86,269$ 87,653$ 89,062$ 90,495$ 91,952$ 93,435$ Operations and Maintenance Labor 9,600$ 2.0%9,600$ 9,792$ 9,988$ 10,188$ 10,391$ 10,599$ 10,811$ 11,027$ 11,248$ 11,473$ 11,702$ 11,936$ 12,175$ 12,419$ 12,667$ Maintenance and Repair Cost 2,000$ 2.0%2,000$ 2,040$ 2,081$ 2,122$ 2,165$ 2,208$ 2,252$ 2,297$ 2,343$ 2,390$ 2,438$ 2,487$ 2,536$ 2,587$ 2,639$ Refractory Replacement --$ -$ -$ -$ -$ -$ -$ -$ -$ 30,000$ -$ -$ -$ -$ -$ Legal 300$ 2.0%300$ 306$ 312$ 318$ 325$ 331$ 338$ 345$ 351$ 359$ 366$ 373$ 380$ 388$ 396$ Accounting 300$ 2.0%300$ 306$ 312$ 318$ 325$ 331$ 338$ 345$ 351$ 359$ 366$ 373$ 380$ 388$ 396$ Insurance 3,558$ 2.0%3,558$ 3,629$ 3,702$ 3,776$ 3,852$ 3,929$ 4,007$ 4,087$ 4,169$ 4,252$ 4,337$ 4,424$ 4,513$ 4,603$ 4,695$ Site Lease 3,600$ 0.8%3,600$ 3,627$ 3,654$ 3,682$ 3,709$ 3,737$ 3,765$ 3,793$ 3,822$ 3,850$ 3,879$ 3,908$ 3,938$ 3,967$ 3,997$ Reserves for Replacement 4,200$ 1.0%4,200$ 4,242$ 4,284$ 4,327$ 4,371$ 4,414$ 4,458$ 4,503$ 4,548$ 4,593$ 4,639$ 4,686$ 4,733$ 4,780$ 4,828$ Property Taxes 3,600$ 3.0%3,600$ 3,708$ 3,819$ 3,934$ 4,052$ 4,173$ 4,299$ 4,428$ 4,560$ 4,697$ 4,838$ 4,983$ 5,133$ 5,287$ 5,445$ Subtotal O&M Costs 27,158$ 27,158$ 27,650$ 28,153$ 28,665$ 29,189$ 29,723$ 30,268$ 30,825$ 31,393$ 61,974$ 32,566$ 33,171$ 33,788$ 34,419$ 35,063$ Total Proposed Heating Costs $101,972 101,972$ 103,652$ 105,363$ 107,105$ 108,879$ 110,685$ 112,523$ 114,395$ 116,301$ 148,243$ 120,219$ 122,233$ 124,283$ 126,371$ 128,498$ EBITDA $49,443 49,443$ 50,791$ 52,169$ 53,578$ 55,018$ 56,490$ 57,995$ 59,533$ 61,105$ 32,712$ 64,355$ 66,033$ 67,748$ 69,500$ 71,291$ Debt Service Senior Loan Total Beginning Balance 623,292$ 623,292$ 604,672$ 585,100$ 564,526$ 542,900$ 520,167$ 496,272$ 471,153$ 444,750$ 416,996$ 387,822$ 357,155$ 324,919$ 291,034$ 255,416$ Principal Payment (623,292)$ (18,620)$ (19,572)$ (20,574)$ (21,626)$ (22,733)$ (23,896)$ (25,118)$ (26,403)$ (27,754)$ (29,174)$ (30,667)$ (32,236)$ (33,885)$ (35,619)$ (37,441)$ Interest Payment (363,936)$ (30,742)$ (29,789)$ (28,788)$ (27,735)$ (26,629)$ (25,466)$ (24,243)$ (22,958)$ (21,607)$ (20,187)$ (18,695)$ (17,126)$ (15,476)$ (13,743)$ (11,920)$ Ending Balance -$ 604,672$ 585,100$ 564,526$ 542,900$ 520,167$ 496,272$ 471,153$ 444,750$ 416,996$ 387,822$ 357,155$ 324,919$ 291,034$ 255,416$ 217,975$ Total Debt Service (P&I) (49,361)$ (49,361)$ (49,361)$ (49,361)$ (49,361)$ (49,361)$ (49,361)$ (49,361)$ (49,361)$ (49,361)$ (49,361)$ (49,361)$ (49,361)$ (49,361)$ (49,361)$ DCR (EBITDA / Total Debt Service) 1.00 1.03 1.06 1.09 1.11 1.14 1.17 1.21 1.24 0.66 1.30 1.34 1.37 1.41 1.44 Annual Free Net Cash Flow 82$ 1,430$ 2,807$ 4,216$ 5,656$ 7,129$ 8,633$ 10,172$ 11,744$ (16,649)$ 14,993$ 16,672$ 18,387$ 20,139$ 21,930$ Replacement Reserve Fund 4,200$ 8,442$ 12,726$ 17,054$ 21,424$ 25,838$ 30,297$ 34,800$ 39,348$ 43,941$ 48,581$ 53,267$ 57,999$ 62,779$ 67,607$ Long-Term Cash Accrual 4,282$ 14,154$ 29,687$ 50,957$ 78,038$ 111,005$ 149,935$ 194,907$ 245,999$ 273,291$ 336,865$ 406,803$ 483,189$ 566,107$ 655,644$ Year All materials contained in this document are the intellectual property of Wisewood, Inc. and are provided exclusively to Client. Copyright © 2013, Wisewood, Inc. All rights reserved. Kake Community Energy Kake Wood-Fired District Energy 30-Year Operating Pro Forma Rev. Date 24-Sep-13 Boiler Option Kake Wood-Fired District Energy System Output 1,365 MBH Version 3.9.5 Annual Annual Cost Cost Escalator Existing Heating Cost $172,063 3.5% District Energy Heat Price $151,415 2.0% Net Savings KAKE COMMUNITY ENERGY Gross Revenue from Energy Sales $151,415 2.0% Proposed District Energy System Operating and Maintenance Cost Fuel Heating Oil 3,317$ 3.5% Wood 68,210$ 1.5% Electricity 3,287$ 1.5% Subtotal Fuel Cost 74,813$ Operations and Maintenance Labor 9,600$ 2.0% Maintenance and Repair Cost 2,000$ 2.0% Refractory Replacement - Legal 300$ 2.0% Accounting 300$ 2.0% Insurance 3,558$ 2.0% Site Lease 3,600$ 0.8% Reserves for Replacement 4,200$ 1.0% Property Taxes 3,600$ 3.0% Subtotal O&M Costs 27,158$ Total Proposed Heating Costs $101,972 EBITDA $49,443 Debt Service Senior Loan Total Beginning Balance 623,292$ Principal Payment (623,292)$ Interest Payment (363,936)$ Ending Balance -$ Total Debt Service (P&I) DCR (EBITDA / Total Debt Service) Annual Free Net Cash Flow Replacement Reserve Fund Long-Term Cash Accrual Contact Andrew Haden Phone (503) 706-6187 Email andrew@wisewood.us 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 $288,265 $298,354 $308,797 $319,604 $330,791 $342,368 $354,351 $366,753 $379,590 $392,875 $406,626 $420,858 $435,588 $450,834 $466,613 $203,785 $207,860 $212,018 $216,258 $220,583 $224,995 $229,495 $234,085 $238,766 $243,542 $248,413 $253,381 $258,448 $263,617 $268,890 $84,480 $90,494 $96,779 $103,346 $110,207 $117,373 $124,856 $132,669 $140,823 $149,334 $158,214 $167,477 $177,140 $187,216 $197,723 $203,785 $207,860 $212,018 $216,258 $220,583 $224,995 $229,495 $234,085 $238,766 $243,542 $248,413 $253,381 $258,448 $263,617 $268,890 5,556$ 5,751$ 5,952$ 6,161$ 6,376$ 6,599$ 6,830$ 7,069$ 7,317$ 7,573$ 7,838$ 8,112$ 8,396$ 8,690$ 8,994$ 85,278$ 86,557$ 87,856$ 89,174$ 90,511$ 91,869$ 93,247$ 94,646$ 96,065$ 97,506$ 98,969$ 100,453$ 101,960$ 103,490$ 105,042$ 4,109$ 4,171$ 4,234$ 4,297$ 4,362$ 4,427$ 4,493$ 4,561$ 4,629$ 4,699$ 4,769$ 4,841$ 4,913$ 4,987$ 5,062$ 94,944$ 96,479$ 98,042$ 99,631$ 101,249$ 102,895$ 104,571$ 106,276$ 108,011$ 109,778$ 111,576$ 113,406$ 115,270$ 117,167$ 119,098$ 12,920$ 13,179$ 13,442$ 13,711$ 13,985$ 14,265$ 14,550$ 14,841$ 15,138$ 15,441$ 15,750$ 16,065$ 16,386$ 16,714$ 17,048$ 2,692$ 2,746$ 2,800$ 2,856$ 2,914$ 2,972$ 3,031$ 3,092$ 3,154$ 3,217$ 3,281$ 3,347$ 3,414$ 3,482$ 3,552$ -$ -$ -$ -$ 60,000$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 280,000$ 404$ 412$ 420$ 428$ 437$ 446$ 455$ 464$ 473$ 483$ 492$ 502$ 512$ 522$ 533$ 404$ 412$ 420$ 428$ 437$ 446$ 455$ 464$ 473$ 483$ 492$ 502$ 512$ 522$ 533$ 4,789$ 4,885$ 4,982$ 5,082$ 5,184$ 5,287$ 5,393$ 5,501$ 5,611$ 5,723$ 5,838$ 5,954$ 6,073$ 6,195$ 6,319$ 4,027$ 4,057$ 4,088$ 4,118$ 4,149$ 4,180$ 4,212$ 4,243$ 4,275$ 4,307$ 4,339$ 4,372$ 4,405$ 4,438$ 4,471$ 4,876$ 4,925$ 4,974$ 5,024$ 5,074$ 5,125$ 5,176$ 5,228$ 5,280$ 5,333$ 5,386$ 5,440$ 5,494$ 5,549$ 5,605$ 5,609$ 5,777$ 5,950$ 6,129$ 6,313$ 6,502$ 6,697$ 6,898$ 7,105$ 7,318$ 7,538$ 7,764$ 7,997$ 8,237$ 8,484$ 35,720$ 36,392$ 37,077$ 37,777$ 98,493$ 39,223$ 39,969$ 40,731$ 41,509$ 42,304$ 43,116$ 43,946$ 44,793$ 45,659$ 326,544$ 130,664$ 132,871$ 135,119$ 137,409$ 199,742$ 142,118$ 144,540$ 147,007$ 149,521$ 152,082$ 154,692$ 157,352$ 160,063$ 162,826$ 445,642$ 73,120$ 74,989$ 76,899$ 78,849$ 20,842$ 82,877$ 84,955$ 87,078$ 89,246$ 91,460$ 93,720$ 96,029$ 98,385$ 100,791$ (176,752)$ 217,975$ 178,618$ 137,248$ 93,762$ 48,050$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ (39,356)$ (41,370)$ (43,487)$ (45,711)$ (48,050)$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ (10,005)$ (7,991)$ (5,875)$ (3,650)$ (1,311)$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 178,618$ 137,248$ 93,762$ 48,050$ 0$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ (49,361)$ (49,361)$ (49,361)$ (49,361)$ (49,361)$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 1.48 1.52 1.56 1.60 0.42 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 23,759$ 25,628$ 27,537$ 29,488$ (28,520)$ 82,877$ 84,955$ 87,078$ 89,246$ 91,460$ 93,720$ 96,029$ 98,385$ 100,791$ (176,752)$ 72,483$ 77,408$ 82,382$ 87,406$ 92,480$ 97,605$ 102,781$ 108,008$ 113,289$ 118,621$ 124,008$ 129,448$ 134,942$ 140,492$ 146,097$ 751,886$ 854,921$ 964,841$ 1,081,734$ 1,145,694$ 1,326,176$ 1,513,912$ 1,708,998$ 1,911,532$ 2,121,613$ 2,339,341$ 2,564,818$ 2,798,145$ 3,039,428$ 3,008,773$ Year Feasibility of Wood-Fired District Energy for Kake, Alaska September 2013 27 9 Site Photos Feasibility of Wood-Fired District Energy for Kake, Alaska September 2013 28 Photo 5. Burnham V909 oil-fired boiler at Kake City Schools Feasibility of Wood-Fired District Energy for Kake, Alaska September 2013 29 Photo 6. Nameplate for Burnham boiler at Kake City Schools Feasibility of Wood-Fired District Energy for Kake, Alaska September 2013 30 Photo 7. Weil-McLain Boilers at the Tlingit and Haida Senior Housing Center Feasibility of Wood-Fired District Energy for Kake, Alaska September 2013 31 Photo 8. Nameplate for Weil McLain hot water boiler at the Senior Housing Center All photos: Wisewood, Inc. Energy Consumption Records KAKE CITY SCHOOL DISTRICT Electricity FY 12 Electricity FY 13 Electricity FY 14 Electricity FY 15 Jul 15,120 Jul 15,600 7,067.18$ Jul Jul Aug 14,640 Aug 11,040 5,048.15$ Aug Aug Sep 20,800 Sep 24,480 9,830.05$ Sep Sep Oct 23,760 Oct 21,840 9,505.68$ Oct Oct Nov 27,120 Nov 25,440 10,116.40$ Nov Nov Dec 26,160 Dec 24,960 9,928.55$ Dec Dec Jan 23,760 Jan 22,800 9,917.67$ Jan Jan Feb 28,800 Feb 26,640 11,561.07$ Feb Feb Mar 24,480 Mar 23,280 10,123.10$ Mar Mar Apr 23,040 Apr 21,840 10,065.93$ Apr Apr May 23,280 May 22,320 10,343.91$ May May Jun 20,400 Jun 17,280 8,044.31$ Jun Jun Total 271,360 $0.00 Total 257,520 $111,552.00 Total 0 $0.00 Total 0 $0.00 Fuel Oil FY 12 Fuel Oil FY 13 Fuel Oil FY 14 Fuel Oil FY 15 Jul 0 Jul 0 Jul Jul Aug 2,400 Aug 0 Aug Aug Sep 2,000 Sep 2,200 12,267.50$ Sep Sep Oct 2,000 Oct 2,200 11,734.00$ Oct Oct Nov 4,200 Nov 2,000 10,340.00$ Nov Nov Dec 2,000 Dec 3,200 17,349.50$ Dec Dec Jan 4,100 Jan 3,200 17,585.24$ Jan Jan Feb 3,620 Feb 3,200 17,591.57$ Feb Feb Mar 1,800 Mar 4,000 20,763.00$ Mar Mar Apr 2,000 Apr 2,200 11,470.00$ Apr Apr May 2,000 May 600 3,102.00$ May May Jun 600 Jun 2,000 10,773.00$ Jun Jun Total 26,720 $0.00 Total 24,800 $132,975.81 Total 0 $0.00 Total 0 $0.00 Propane FY 12 Propane FY 13 Propane FY 14 Propane FY 15 Jul Jul Jul Jul Aug Aug Aug Aug Sep 100 Sep Sep Sep Oct Oct Oct Oct Nov Nov 100 346.00$ Nov Nov Dec Dec Dec Dec Jan 200 Jan Jan Jan Feb Feb 100 338.00$ Feb Feb Mar Mar Mar Mar Apr Apr 100 348.00$ Apr Apr May 100 May May May Jun Jun 7 20.19$ Jun Jun Total 400 $0.00 Total 307 $1,052.19 Total 0 $0.00 Total 0 $0.00 Heating Degree Days FY 12 Heating Degree Days FY 13 Heating Degree Days FY 14 Heating Degree Days FY 15 Jul 324 Jul 331 Jul 263 Jul Aug 351 Aug 332 Aug Aug Sep 436 Sep 442 Sep Sep Oct 653 Oct 772 Oct Oct Nov 949 Nov 887 Nov Nov Dec 949 Dec 1,087 Dec Dec Jan 1,088 Jan 905 Jan Jan Feb 854 Feb 784 Feb Feb Mar 927 Mar 980 Mar Mar Apr 695 Apr 801 Apr Apr May 644 May 522 May May Jun 417 Jun 301 Jun Jun Total 8,287 $0.00 Total 8,144 $0.00 Total 263 $0.00 Total 0 $0.00 Copy of KCSD Utility Usage FY12-FY15.xlsx 9/24/2013 This tool has been provided by SERRC, Alaska's Educational Resource Center Kake City School District P.O. Box 450 Kake, Alaska 99830 (907) 785-3741 September 23, 2013 To Whom It May Concern: I would like to express my enthusiastic support for the KCE project currently under review by the Organized Village of Kake. Over the past year and a half, we have worked with the local, state and national organizations to find a way to provide a long term viable heating alternative for the school district and community at large. Due to having two damaged boilers, we have taken action on two short term solutions, installing an efficient low cost oil fire boiler, and installing a high efficiency propane boiler. Even though we have reduced our costs by over $30,000/year our budgeted amount for heating will be over $100,000. This project would allow us to reduce our costs to a much more manageable number for the long term while still having a proven backup system that is required for living on an isolated island. The School District has spent a great deal of time working with other organizations through the CED’S process and examined all possible long term options. It is my opinion that this proposal and plan, appear to provide the best option for the community to reduce costs as well as providing much needed jobs and a positive economic impact for our community. It has the potential to one day allow Kake to become an exporter of a much needed product to other communities. Sincerely, Superintendent Kake City Schools Kake City School District is an Equal Opportunity Employer P.O. Box 32237 • Juneau, Alaska 99803 • Fox (907) 780-6895 • Te l (907) 78 0-6868 September 23, 2013 RE: Kake Wood Biomass hea ting system proposal To W hom It May Concern : This is a letter of suppo rt from the Tlingit Hai da Regional Housing Authority {THRHA) for the Organized Village of Kake's wood bi omass heating system proposal for a district heating system to be located at the Kake Hig h Sc h ool that would also have the potential to heat THRHA's nearby elderly bui lding. THRHA owns and operates an existing 12 unit Kake Elderly Building across the street from the Kake High School. THRHA has secured funding to modernize and expand this elderly building, and we are now in the environmental review and design stages. Improve ments will include improved accessibility fo r the elders, improved ene rgy efficiency for the building, two new accessible 2-bedroom apartments (for a tota l of 14 apartments) and a n ew add ition to include a dining hall for the Sen ior Lunch Program, a commercial kitchen, exercise r oom, lobby , ADA bathrooms, and m u ltipurpose rooms for the elder's use. The existi ng building is currently hea ted w ith oil fi r ed boilers with hydronic distribution . Our cos ts to heat the buil ding with oil have increased every year to the point it is no longer sustainable, so as part of ou r modernization project, THRHA wished to convert the building to an alternative heating system t hat does not utilize fo ssi l fuel s . The Kake Communi ty Energy's wood biomass district heating system offers THRHA an exciting alternative ene rgy solution to our heating nee ds at the Kake Elderly Building. We fully support this proposal. Vice President Planning and Development THRHA