HomeMy WebLinkAboutGalena GrantApplication7_Heat FINALRenewable Energy Fund Round VII
Grant Application - Heat Projects
AEA 2014-006 Application Page 1 of 39 7/2/2011
Application Forms and Instructions
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.
Renewable Energy Fund Round VII
Grant Application - Heat Projects
AEA 2014-006 Grant Application Page 2 of 39 7/2/2013
SECTION 1 – APPLICANT INFORMATION
Name (Name of utility, IPP, or government entity submitting proposal)
City of Galena
Type of Entity: Municipality Fiscal Year End 06/30
Tax ID # 92-0044429 Tax Status: For-profit Non-profit X Government ( check one)
Date of last financial statement audit: The 2011 audit was completed in January 2013.
Mailing Address
P.O. Box 149 Galena, AK 99741-0149
Physical Address
Telephone
907-656-1301
Fax
907-656-1769
Email
gmoyer@ci.galena.ak.us
1.1 APPLICANT POINT OF CONTACT / GRANTS MANAGER
Name
Phil Koontz
Title
Project Coordinator
Mailing Address
P.O. Box 244 Galena, AK 99741
Telephone
907-656-2328
Fax
907-656-1716
Email
Phil.koontz@gmail.com
1.2 APPLICANT MINIMUM REQUIREMENTS
Please check as appropriate. If you do not to meet the minimum applicant requirements, your
application will be rejected.
1.2.1 As an Applicant, we are: (put an X in the appropriate box)
An electric utility holding a certificate of public convenience and necessity under AS
42.05, or
An independent power producer in accordance with 3 AAC 107.695 (a) (1), or
X A local government, or
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
the applicant’s board of directors, executive management, or other governing
authority. If the applicant is a collaborative grouping, a formal approval from each
participant’s governing authority is necessary. (Indicate Yes or No in the box )
Yes
1.2.3 As an applicant, we have administrative and financial management systems and
follow procurement standards that comply with the standards set forth in the grant
agreement (Section 3 of the RFA).
Yes
1.2.4 If awarded the grant, we can comply with all terms and conditions of the award as
identified in the Standard Grant Agreement template at
http://www.akenergyauthority.org/veep/Grant-Template.pdf. (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
funds for the benefit of the general public. If no please describe the nature of the
project and who will be the primary beneficiaries.
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Grant Application - Heat Projects
AEA 2014-006 Grant Application Page 3 of 39 7/2/2013
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.
Galena Community Wood Heat Project
2.2 Project Location –
Include the physical location of your project and name(s) of the community or communities that will
benefit from your project in the subsections below.
2.2.1 Location of Project – Latitude and longitude, street address, or community name.
Latitude and longitude coordinates may be obtained from Google Maps by finding you project’s location on the map
and then right clicking with the mouse and selecting “What is here? The coordinates will be displayed in the Google
search window above the map in a format as follows: 61.195676.-149.898663. If you would like assistance obtaining
this information please contact AEA at 907-771-3031.
The project will be located in Galena, AK at the Galena Base Steam Plant, adjacent to the
former Galena Air Force Base. Project site coordinates: 64.741678,-156.956306.
2.2.2 Community benefiting – Name(s) of the community or communities that will be the
beneficiaries of the project.
The community of Galena, Alaska will be the beneficiary of the project.
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 III. Final Design and Permitting
II. Feasibility and Conceptual Design X IV. Construction and Commissioning
2.4 PROJECT DESCRIPTION
Provide a brief one paragraph description of the proposed heat project.
The City of Galena is requesting AEA Round VII funding to provide a sustainable and
predictable energy resource for its school district. The Galena Community Wood Heat Project
will substantially reduce high costs for heat for the Galena Interior Learning Academy School
(GILA) by utilizing woody biomass harvested and processed from local forests. The project will
implement Phase IV Construction over an eighteen (18) month period to construct and install a
biomass boiler system for the GILA campus. Local coordination among the stakeholders group
is strong, infrastructure and administrative resources are in place to support the project, and the
Galena City School District has committed to purchasing the resulting heat. Existing Feasibility
Studies and strategic community planning documents align with the project.
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Grant Application - Heat Projects
AEA 2014-006 Grant Application Page 4 of 39 7/2/2013
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.)
Revenues retained within the community from harvesting and processing biomass will result in
financial and public benefits for Galena residents by improving economic stability and creating
local jobs. Galena is located on the Yukon River, hundreds of miles from the nearest connected
road, but only about 100 miles from the Arctic Circle. Heating fuel (e.g. diesel) is imported from
the road system by barge during the summer navigation season. The logistics train makes fuel
expensive and risky, and it multiplies the local environmental footprint. The results and benefits
resulting from this project are listed below:
RESULT OF PROJECT BENEFITS
Financial Public
a) Fuel consumption moved to a
renewable and predictable fuel
source, woody biomass.
Reduced fuel costs X
b) Expanded skills for local work force;
increased employment in
community.
Increased job and training
opportunities. X X
c) Economic localization, using locally
produced fuels.
Improved self-sufficiency
regarding future energy needs;
reinf orcement of community
vision.
X
d) Reduced overhead expense for City,
Tribe and District.
Expanded and improved services
for GILA students and Galena
residents.
X X
The Galena Interior Learning Academy (GILA) is the prime beneficiary of the project. GILA is a
post-secondary vocational boarding school. GILA offers expanded educational opportunities not
only for local high school students but students throughout the state, on-campus and on-line. In
addition to offering course work in math, sciences, language arts, and social science, GILA
offers a full range of vocational courses. Students can choose to take courses in aviation,
automotive technology, cosmetology, computer technology, culinary arts, small engine, driver’s
education, welding, and woodworking. The courses offered at GILA provide the opportunity for
students who may not want to attend college to have tools and skills that will allow them to
pursue a variety of careers. A total of 33 students graduated from GILA in May 2013.
In May 2013 a major flood hit Galena, which resulted in community-wide damages. An ice jam
on the Yukon River on May 27th caused the river to spread for miles beyond banks and sent
floodwater into the Galena community of nearly 500 residents. There were no injuries, but more
than 300 residents were evacuated to Fairbanks and other surrounding communities. The
disaster left 194 homes moderately to severely damaged and the ice and rapidly rising
floodwater knocked several homes off foundations in both “old town” and a newer section of
Galena that was built after a 1971 flood. Many of Galena’s residents found shelter and safety
within the flood control dike of the former US Air Force Base, where they and the flood response
personnel were able to use the emergency power plant, and the sewage and water systems
associated with the GILA school and the former Air Force Base. The State of Alaska declared
the event a natural disaster on May 31st. President Obama declared the event a Federal
Disaster on June 25th, which positioned FEMA and other federal aid to assist in the town’s
recovery.
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Grant Application - Heat Projects
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The Galena Interior Learning Academy (GILA) is an educational hub and boarding school for
Galena and several villages. The GILA housing, classrooms and dining facilities were used
nearly all summer for the flood recovery efforts, and the boarding school was able to open on
time on September 9th. If not for the dike, that once protected the Air Force Base, the GILA
boarding school and several of Galena’s emergency infrastructures would have been flooded.
However, the GILA buildings provided a valuable resource to the community because they were
not flooded; the school and other base housing provided a safe shelter and response area
during the flood. The sewer, water and power utilities remained operational and supported the
City’s critical recovery efforts.
In light of how GILA’s facilities contributed to safe harbor for the community, it is more important
than ever that this project be completed for the benefit of all residents in Galena. T he City is
working on improvements to upgrade all of its facilities including the dike, base housing and
power, and this project plays a critical role in this effort.
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.
The Round VII grant request is $3,096,898 for the Phase IV Galena biomass system project.
The total anticipated cost, including match contributions, is $3,144,200 for the eighteen (18)
month project. Cash and In-Kind match commitments of $47,302 include administrative,
development, and operations support from Project Team agencies, making up the total funding
contributions anticipated for the project. The projected capital cost of the biomass system is
$2,559,187. The projected development cost of the biomass system is $537,711. Phase IV
Request for Construction, Commissioning, and Reporting is $2,692,955 and contingency costs
of $403,943 (15%) have been added to the Building and Equipment budget for a total Phase IV
request of $3,096,898.
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Grant Application - Heat Projects
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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 $3,096,868
2.7.2 Cash match to be provided $0
2.7.3 Total In-kind match to be provided (sum of lines below) $47,302
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 $
2.7.4 Other grant funds to be provided $0
2.7.5 Other grant applications not yet approved $0
2.7.6 Total Grant Costs (sum of 2.7.1 through 2.7.4) $3,144,200
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
4.4.4, including estimates through construction.
$3,144,200
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) $6,671,309 (NPV of
savings over project
lifetime)
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.
$ See note below
The Galena Interior Learning Academy provides over $3.5 million worth of revenue to the
Galena City School District (GCSD) enabling GCSD to employ 106 local residents. If GCSD is
unable to reduce heat costs for the Galena Interior Learning Academy, it will be prohibitive to
continue operating its boarding school operations and about eighty-six (86) local jobs would be
at risk.
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Grant Application - Heat Projects
AEA 2014-006 Grant Application Page 7 of 39 7/2/2013
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.
The City of Galena will own and operate the Biomass Heat project. The City is the electric
utility operator, and has operated the Galena Base Steam Heat Plant since 2008. The City of
Galena owns the site for the Wood Heat Project and is equipped with technical and financial
resources to manage the operations of the proposed biomass heat system.
The City of Galena and Dalson Energy Inc. will share the project manager responsibilities
for the project. As mentioned earlier, a major flood hit Galena in May of 2013, resulting in
community-wide damages and was declared a natural disaster. This disaster has caused
increased pressure on community leader-agencies such as the City and the Tribe, who would
normally be providing key oversight and management of this project. When the flood hit, their
typical roles as administrators for the community were quickly reverted to helping with
evacuation and rescue efforts. Then, later this past summer, they were leading efforts to set up
shelters for residents and barracks for recovery effort workers. High priority recovery operations
have demanded that they spend the majority of their time with teams of federal and state
agencies such as FEMA, Red Cross, Small Business Administration, Salvation Army, Food
Bank of Alaska, National Flood Insurance Program staff and numerous volunteer teams who
have come to Galena to help restore the more than 240 homes impacted by flood waters.
Administrative efforts are now on rebuilding the community, challenged by a very short building
season with winter quickly approaching.
When the Phase III (Round 6) grant was awarded, the community found themselves
overwhelmed with the challenges of the flood recovery, while at the same time, striving toward
meeting stated community goals and needs. The City, Tribe, and School District all agreed that
they still wanted to move forward with the project, so they contracted with Dalson Energy to
engage as the Lead Project Manager. This allowed Phil Koontz, who is now the on-site Project
Manager for Phase III, to work closely with the Dalson Team, while City administrative
personnel continue to provide local support to the flood recovery efforts. The entire team will
continue to work together in the same manner for Phase IV, and where possible, hire local
positions. For this project, the Project Management team is included in the contractual budget.
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Grant Application - Heat Projects
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The Management Team
Ms. March Runner, Tribal Administrator for the Louden Tribal Council, has been managing and
monitoring federal and state grants for the Tribe since 2006, and supervises the Tribal staff in
daily operations. She is the liaison for negotiations and work surrounding the closure of the Air
Force Base and is the Director of the Yukon-Koyukuk Environmental Consortia.1 The Tribe will
manage labor costs for local workers who may be hired, and provide oversight of engineering
firms and consultants, management of construction contractors, on-site inspections and review
and approval of Phase IV work.
Dalson Energy, Contract Project Management Team
Dalson Energy has provided services for many renewable projects and programs, including:
project coordination, community relations, stakeholder negotiations and documentation. The
company team has conducted pre-feasibility studies for eight (8) interior Alaska rural
communities for biomass viability and options. Dalson also conducted the feasibility study for
Biomass Heating retrofit in Galena, and have a dynamic understanding of the project. The
company is capable of full-scale project management, from mobilization, administrative support,
implementation, and final reporting.
Mr. Jeremy Rogers, Dalson Energy Senior Partner, is currently the lead Project Manager for the
Galena Phase III project, and will also lead the Phase IV project, if awarded. Jeremy is a lifelong
Alaskan who has participated in numerous solar and biomass projects since 2006. He has
been a renewable energy executive since 2006, when he started with hands-on experience in
personally managing the design and construction of a biodiesel refinery with an annual
production capacity of 3 million gallons. Jeremy has consulted and/or managed renewable
energy projects and heat distribution strategies in fifteen (15) countries including Iceland,
Norway, Sweden, and Denmark as well as rural Alaska. Since 2009, Jeremy and his company
have maintained a successful working relationship with some of the largest utilities within
Scandinavia, and have provided expertise related to biomass utilities and their operations,
feasibility, and construction. Jeremy has managed several startups including Higher Ground
Energy Solutions (HGES). With his brother/business partner they have taken HGES from
conception to growth and have managed offices located in China, Brazil, India, and the US with
annual revenues exceeding $50 million. Jeremy is an active participant in climate change and
energy summits and has attended forums in Iceland, Norway, and Sweden.
Mr. Phil Koontz, P.E., the onsite Project Coordinator, is currently a part-time employee of
Louden Tribal Council and a registered professional engineer who will be responsible for work
associated with activities of the Project. He will work closely with the local agency leaders,
reporting to City Manager Greg Moyer, and the City Council. Project information and progress
will be shared with Galena City School District Superintendent Chris Reitan, Louden Tribal
Council, and with Dalson Energy, to provide support for activities and progress; he will continue
to reside in Galena, Alaska, and will work part time on the project.
Phil has a Master of Science degree in Civil Engineering/Hydrology from the University of
Wyoming, a Juris Doctor, Law, also from the University of Wyoming, and a Bachelor of Science
in Chemical Engineering from the University of Kansas. He has more than twenty-five (25) years
of technical and professional experience in the fields of science, engineering, and business
management.
1 Resumes for key project roles are included with this application.
Renewable Energy Fund Round VII
Grant Application - Heat Projects
AEA 2014-006 Grant Application Page 9 of 39 7/2/2013
Phil has training and certifications that will be valuable to the project, including: current
certification as a Hazardous Waste Operator (40 CFR 1910.120); Arctic Engineering
Correspondence course, UAF (required for Alaska professional engineer certification), and he is
registered in Alaska as a Professional Engineer (#CE-8377).
Upon announcement of the award, Phil will begin working with Dalson Energy to mobilize the
project. During Phase IV he will provide support and local coordination with Dalson Energy and
the A/E design and construction contractor(s) to ensure that the completed work conforms to the
requirements of the grant and the biomass system design documents. He will assist with
monitoring the system integration and testing processes and will participate in several planning
processes for the project. Phil will assist Dalson Energy with the Fire Marshal Plan Review and
will communicate regularly with the Project Manager, City Mayor and finance office to report
expenditures and discuss funding reimbursement drawdowns for project expenses. He will also
seek to train a qualified potential second operator/manager for long-term sustainability of the
project.
Contact information: Phil Koontz, PE, P.O. Box 288, Galena, AK, 99741,
Phone: (907) 656-2328 or (907) 656-1711 Email: phil.koontz@gmail.com
3.2 Project Schedule and Milestones
Please fill out the schedule below. Be sure to identify key tasks and decision points in in your
project along with estimated start and end dates for each of the milestones and tasks. Please
clearly identify the beginning and ending of all phases of your proposed project.
The Louden Tribal Council received an AEA Round 4 Renewable Energy grant to conduct
a Reconnaissance Study for Galena. Through collaborative efforts of the City, Tribe,
Corporation, and School District, additional studies were conducted over the past several years,
which included a strategic community plan,2 several Tanana Chiefs Conference timber inventory
projects on Native Corporation lands in the vicinity of Galena, a Reconnaissance Survey of
Renewable Energy Systems for Use in Galena, Alaska 3, and an AEA Round 5 funded
Feasibility Study4 and a Forest Inventory and Management Plan, both of which were
completed in 2012 under a grant from Round 6 of the AEA Renewable Energy Fund.
Based on recommendations from these studies, the Galena Community Wood Heat Project
represents an extraordinary opportunity to utilize renewable woody biomass fuels sourced from
surrounding forests. The project will employ an existing 34,344 square foot warehouse building
for the boiler, a chip bin, heavy equipment storage, and long-term storage of chips.
The proposed facilities will include a 4-6 acre log yard, a newly installed boiler room that is
approximately 30’ x 40’ (1,200 square feet), chip bin, interior long term storage for 4-6 weeks of
wood fuel, heavy equipment warm storage, and heat loop interconnection. It will connect to the
existing district heat loop via a new steam line, and install appropriate controls to coordinate the
operation of the biomass facility and existing Base Steam Plant.
2 (Tanana Chiefs Conference Community Planning Program, 2012-2017)
3 (WH Pacific, 2010)
4 (Dalson Energy, Inc., 2012)
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Grant Application - Heat Projects
AEA 2014-006 Grant Application Page 10 of 39 7/2/2013
Building on information gathered in Phases I and II the Project Team is currently
implementing the Phase III grant project to develop the system design. The 35% design is
close to completion, and the Phase III project is on schedule. Additional milestones that will be
completed for Phase III include the completion of permit applications, environmental
assessment, establish site control, finalize system design with final cost estimates, and
complete the business and operational plan in preparation for Phase IV construction.
The Phase III project was designed to utilize a “go/no go” decision threshold for the delivery,
review, and approval by AEA of Phase III’s final design. Phase III’s final design and cost
estimates will be completed in June, 2014, and if Phase IV is funded, construction can then
begin - without a long time gap in-between funding application cycles.
During Phase IV, the Project Team will immediately begin planning for site preparation for
installation of the biomass system. Other Phase IV activities will include interior construction,
plumbing, HVAC, fire protection, electrical, and connection to the steam line main. The biomass
system will be installed, integrated with the existing system, and tested.
The Project Coordinator will provide follow-up reports on operations and maintenance for the
required period of time, documenting the program’s impact on the community. The Project
Team will consider all costs of operations and maintenance in compliance with their operational
and business plans that were developed during Phase III. The project is expected to take
eighteen (18) months (1.5 years) for completion. Phase IV Construction milestones, tasks, and
schedule are outlined in the Milestone table, below.
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Grant Application - Heat Projects
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PHASE IV: CONSTRUCTION, COMMISSIONING, OPERATION, AND REPORTING
MILESTONES TASKS Start
Date End Date
1. Design and
feasibility
requirements
completed
Begin operations; Complete construction plan
and schedule Month 1 Month 2
2. Bid documents
completed Advertise and review submitted vender bids Month 1 Month 2
3. Vendor selected
and award in
place
Construction planning and scheduling;
Commissioning planning and scheduling Month 3 Month 4
4. Construction
Actively track project costs against project
budget and propose modifications as needed;
Manage cost overruns; Modifications to final
design; interior construction, plumbing, HVAC,
fire protection, electrical, and connection to
steam line main
Month 5 Month 14
5. Integration and
testing
Coordination of conversion, integration, or
surplus of existing system; Continuous
monitoring to verify and update projections
and system efficiency
Month
13 Month 16
6. Final acceptance,
commissioning,
and start-up
Relevant reports to permitting agencies;
Environmental monitoring as required
Month
16 Month 18
7. Operations
Reporting
Update business plans and power purchase
agreements to account for actual construction
costs and end of useful life plans, including
what activities are expected (replacement,
refurbishment, retrofitting, etc.); Final project
report with as-built specs, final budget,
schedule, and recommendations; Periodic
operation and maintenance reports as
required by AEA
Month 1 Month 18
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Grant Application - Heat Projects
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3.3 Project Resources
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.
Project Resources: Building and Equipment
The City of Galena currently owns all of the buildings in use by GILA, plus the water, sewage,
and heating utilidor, the boiler plant that provides heat for the buildings, and the electric utility.
The City also has a variety of heavy equipment that can be used to facilitate the project,
including two bulldozers, a heavy lift crane, a backhoe, and a combination front loader/forklift.
All of this equipment will be available for the project as well as the trained boiler and
maintenance operators, the administrative departments of the City of Galena, the Galena City
School District, and the Louden Tribal Council.
The City, Tribe, and School District also have on-going relationships with local construction
contractors who can provide other equipment and personnel for tree cutting, hauling, and
construction projects.
Partnerships
The City of Galena (City) and Louden Tribal Council (Tribe) have a strong working relationship
and are committed to the social well-being and economic growth of the community of Galena
and surrounding region. The City and Tribe have jointly developed a draft Cooperative Project
Agreement (CPA) for management, communications, reporting, and operations of this proposed
project. (The signed CPA is attached). The Galena City School District has committed to
purchase the heat and will contribute matching funds, and the Gana-A’Yoo Limited (Tribal
Corporation), a major land owner in Galena, has provided pertinent studies to verify the volumes
of biomass needed and available for the project. (Letters of support and match commitment are
attached.) Over the past several years and along with dedicated local stakeholders, these
community leaders have combined resources to successfully implement many priorities in
Galena identified by business owners, educators, Tribal leadership, municipal managers and
community members through strategic community visioning, research, and planning. Resumes
for key personnel are included as an attachment to this application.
Louden Tribal Council is a federally recognized Tribe with roughly 600 members, and nearly half
of the Tribal members live in the City of Galena. The Tribal Council is composed of a First Chief,
Second Chief and five Council Members. Council Members are elected annually by enrolled
Tribal members. The Tribe has several full-time employees including a full-time Tribal
Administrator, Housing Director, Tribal Workforce Development Specialist, and Administrative
Assistant. Louden Tribal Council advocates for its Tribal Members’ needs through cooperative
agreements with the City government, and through close collaboration on community projects;
for example, Tribal monies contributed to the construction of the new Galena health clinic
completed in 2002, and to a dust control project to upgrade the City and State roads in the
Galena area in 2011.
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Last year, the City and the Tribe both adopted the Galena Strategic Community Plan 2012-
2017. The document is attached with this application, and the following sections discuss the
benefits of this project to the community and toward meeting the goals of the Strategic
Community Plan:
Community Goals and Objectives Summary (page 26, Strategic Community Plan)
Goal: Energy solutions are identified and implemented that will reduce the high cost of energy.
Community Priorities for meeting this goal are to:
• Ensure that entities within Galena establish a coordinated effort to address the high cost
of energy.
• Implement biomass solutions that will assist in addressing the high cost of heating.
• Reduce energy costs in Galena through encouraging energy conservation and
weatherization programs and appropriate alternative energy solutions.
Page 28 of the Strategic Community Plan lists three (3) Energy Solutions, including alternative
energy, biomass specifically, and efficiency/conservation efforts. All of those solutions are
being actively pursued by the community partners.
Infrastructure
The City of Galena was incorporated as a 1st Class City in 1971, and has fully equipped offices
for conducting business on behalf of Galena residents. The City’s administrative employees
include a City Clerk and City Manager and have contracted positions of Financial Manager and
Attorney. Other employees include a Police Chief, utility managers and service workers who
manage and maintenance City facilities and utilities. There are six (6) City Council Members
and an elected Mayor who can vote in the case of a tie. Regular city council meetings are held
the 2nd Tuesday of every month. The City of Galena has a volunteer fire department and
imposes a 3% sales tax to support municipal functions.
The City was conveyed 1,280 acres of land in 1980 by Gana-A’Yoo Limited Native Village
Corporation. The City owns and operates all the community utilities including the electric utility,
water distribution, sewage collection, and solid waste collection and management; owns and
maintains the community hall, partially funds the community Library and the Olympic sized
swimming pool; and is currently working on the Louden Loop Water Installation project which,
when complete, will provide access to about 15-20 additional homes for piped water. The City is
a principal subcontractor for the ongoing U.S. Air Force Base remediation project and owns the
GILA campus and facilities where the biomass system will be installed.
Professional Services
The City has contracted positions for Project Management, Financial Manager, and Attorney,
providing necessary administrative support to the project. Utility managers and service workers
manage and maintain city facilities and utilities, and will be available for contractor support
during the construction stages of the project. Six (6) Council Members and an elected Mayor
provide leadership for the City and will provide valuable input on critical decisions during the
project.
Harvesting Equipment
The community of Galena already has some harvesting equipment, including the City’s Hitachi
EX-110 excavator which can be equipped with tree shears. The EX-110 is routinely used for
Louden Tribal Council and private firewood processing. Other items also in the community that
could be available to the project include dump trucks, a firewood processor, loaders, and
bulldozers. The proposed Harvest Management Plan will include the use of currently available
equipment available (privately and/or City-owned), and will consider access to, or purchase of, a
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chipper and an improved tree shear for use with the City’s Hitachi EX-110 excavator. A chipper
will be selected to match the boiler and chip feeding equipment. Procurement processes will be
implemented and funding resources discussed. Harvesting equipment is not included in the
project match.
Biomass Resources
Available report information 5 indicates that there are sufficient forest resources to provide the
woody biomass fuel needed for this project. Louden Tribal Council has commissioned a forest
inventory of all lands within twenty-five (25) miles of Galena, the results of which are expected
later this year. Gana-A’Yoo Limited owns lands adjacent to Galena which could provide
sufficient woody biomass for the life of this project.
The Tanana Chiefs Conference has conducted several timber inventory projects on Native
corporation lands in the vicinity of Galena. In June 2012, that inventory information was re-
analyzed to produce an estimate of the air dried tons (20-25% MC) of biomass in log form
available from Gana-A’Yoo Limited land within various radii of Galena, and also an estimate of
the delivered cost of those logs. Currently, it is estimated that the cost of wood chips delivered
to the steam plant will be $200 per green ton. This estimate may be regarded as conservatively
high and will be refined as logging, transportation, and fuel processing equipment are specified
and procured.
Other ownerships, such as the BLM (Bureau of Land Management), Military, and USFWS (Fish
and Wildlife Service) were included in the TCC analysis; however, the military volumes are
relatively low, and the BLM and USFWS volumes occur farther from Galena.
The species of trees to be targeted for this biomass project would likely be balsam poplar
(cottonwood), aspen, and birch. Both white and black spruce will be utilized when they occur in
harvest units. For the purposes of this application it is assumed that energy content of wood
fuel is 12.0 mmBtu/green ton, which represents a range in moisture content wet basis of 25-
45%.
Harvest Contracts
In the past several years, Louden Tribal Council has negotiated tree cutting contracts; In 2011,
Louden employees cleared approximately nine (9) acres of mostly birch trees which were
removed to a staging area near the City landfill, and which have been made available to Elders
and the community; the remaining wood was put up for bid by the City. In 2012, another
contract was successfully completed to clear an additional six (6) acres. The clearing is in two
(2) areas, one of which is west of the runway and the other is immediately north of the dike
around the AF base/GILA school complex.
5 (Dalson Energy, Inc., 2012)
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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.
During the Phase III Project, the City and Tribe jointly developed a Cooperative Project
Agreement (CPA) for management, communications, reporting, and operations of the Phase III
and Phase IV projects. The CPA was finalized during Phase III and will be provided to AEA
with the next monthly report. A signed copy of the agreement is attached. The CPA
outlines the roles of the two agencies to:
1. Complete the City’s Commitments under AEA Round 6.
2. Apply for AEA’s Round VII – Phase IV Construction grant.
3. Establish and operate a wood harvest entity.
4. Provide mutual staff and administrative support for the grant(s).
5. Utilize the Project Manager assigned by the Louden Tribal Council, Phil Koontz.
6. Work cooperatively with the contractors to provide required documents and comply with
AEA requirements.
Galena has access to communication technology services which will also provide support for
efficient communication between the Project Team via email, project management software,
and also with AEA for reporting or correspondence. The community has access to cable TV,
DSL internet, and cell phone services through GCI and AT&T. More recently, the community
has been using social media such as Facebook for communicating progress for the flood
recovery. This media will also be accessed during the project as an effective way to interact
with community members on the progress of the project and gain feedback.
Alternative contacts for this project are:
March Runner, Galena Tribal Administrator
Louden Tribal Council
P.O. Box 244 / 100 Tiger Highway
Galena, AK 99741
Ph. 907-656-1711 Email: march_runner@yahoo.com
Jeremy Rogers, Project Manager, Dalson Energy
Wasilla, Alaska
Ph. 256-710-3882
Ph. 907-414-5059
Email: jeremy@dalsonenergy.com
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3.5 Project Risk
Discuss potential problems and how you would address them.
Coordination among the stakeholder groups for this project is the foundation for this project.
Strong support between leading Galena agencies is demonstrated through the attached
resolutions, letters, and CPA, for the collaborative effort of this project. Among all of the
agencies, it is agreed that the GILA campus is central to Galena’s economic stability, and that
continuing operations of the GILA School District depend on affordable utility costs, including
heat energy.
Potential Problems
1. Long-term landowner agreements: The success of a biomass energy project depends on
long-term biomass fuel supply agreements from landowners.
Resolution or Plan to Address the Problem: A local forest inventory was completed by Ken
Stumpf, Professional Forester of Geographic Resource Solutions, in November 2012. The
report is titled Galena Forest Inventory and Management Plan Report. The cover page and
Executive Summary is included as an attachment with this application. The full document is
very large and is included as an electronic document on the enclosed CD.
A harvest plan is still to be developed, and will be based on the detailed inventory and will
be developed in cooperation with Gana-A’Yoo Limited Native Corporation. Gana-A’Yoo has
a 12(a) land entitlement of 115,200 acres near Galena, plus similar holdings near the
villages of Koyukuk, Nulato and Kaltag. Gana-a’Yoo is the major landowner in the vicinity of
the project site. Gana-A’Yoo is an actively involved supporter of the project 6 and has
provided pertinent studies to verify the volumes of biomass needed and available for the
project. The projected amount needed per year is up to 2,500 tons. Over the 20 year project
lifetime, the contract would allow for up to 50,000 tons, commencing in 2013. The harvest
areas will be designated by Gana-A’Yoo Limited. There are currently no formal timber sale
agreements in place. However, Gana-A’Yoo Limited is actively pursuing plans and
negotiations to enter into a timber sale contract in support of a wood biomass project. The
contract will include provisions to protect both parties, including:
a) Documented procedures for measuring and accounting for the amount of wood
harvested and payment schedules.
b) Performance guarantees, liability and property damage insurance.
c) Provisions for inspections of harvest areas by Gana-A’Yoo and contract compliance
enforcement.
2. Long-term heat customers: The success of this biomass energy project depends on long-
term heat customers.
Resolution or Plan to Address the Problem: The Galena Community Wood Heat Project will
substantially reduce high costs for heat for the Galena Interior Learning Academy School
District (GILA) utilizing woody biomass harvested and processed from local forests. The
Galena City School District has committed to purchase the heat derived from 2,500 to 3,000
tons of woody biomass annually. In addition, the district has committed to more than
$15,646 in matching funds for personnel time and resources to ensure the success of the
project.7
6 A letter of support is attached.
7 A letter of support and commitment to purchase heat is attached.
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3. Well-managed operations: The success of this biomass energy project depends on reliable
and skilled operations and coordinated management of the biomass energy facility.
Resolution or Plan to Address the Problem: The City of Galena and Louden Tribal Council
will jointly facilitate the operation of the system and management of the biomass energy
facility. The City owns and operates all the community utilities including the electric utility,
water distribution, sewage collection, and solid waste collection and management. The City
owns the site for the project and is equipped with technical and financial resources to
manage the operations of the proposed biomass system. As explained earlier, Louden
Tribal Council and Dalson Energy Inc. will share the project manager responsibilities for the
project. The team will manage the proposed project with skilled and professional staff.
A qualified on-site Project Coordinator, who is an employee of the Louden Tribal Council, has
been identified to work closely with Dalson Energy for local coordination of project activities. The
Project Coordinator will seek to identify and train at least one apprentice. The Tribe will manage
labor costs for local workers, if available, management of engineering firms and consultants,
management of construction contractors, on-site inspections and review and approval of work.
The Project Coordinator will provide reporting support to Dalson Energy for reports due to AEA,
the City, the School District, and Gana-A’Yoo on activities and progress.
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.
Feasibility and reconnaissance studies from both Phase I and II suggests that there are
sufficient forest resources to provide the woody biomass needed for this project.
Louden Tribal Council and Gana-A’Yoo have both commissioned forest inventories of all lands
within twenty-five (25) miles of Galena. Gana-A’Yoo is the largest landowner for the area with
115,200 acres; studies show this area could provide sufficient woody biomass for the life of this
project.
The Tanana Chiefs Conference has also conducted several timber inventory projects on Native
corporation lands in the vicinity of Galena. In June 2012, that inventory information was re-
analyzed to produce an estimate of the air dried tons (20-25% MC) of biomass in log form
available from Gana-A’Yoo Limited land within various radii of Galena, and also an estimate of the
delivered cost of those logs. As stated above, the delivered cost of wood chips is estimated to
cost $200/green ton with an energy content of 12 mmBtu/green ton.
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Phase I, Reconnaissance was completed in 2010 by WHPacific. This study recommended “as a
practical first step towards achieving Galena’s long term energy goals, we recommend that a
biomass boiler be installed at the existing air base physical plant that will supply steam to the
existing base district heating system.”
Phase II, Feasibility was completed in 2012 by Dalson Energy. This study concludes that the
Galena Steam Base Plant circumstances provide an extraordinary opportunity for the community
to utilize renewable woody biomass fuels sourced from surrounding forests. The study determined
that the project is technically and financially feasible. Additionally, the study recognized that local
coordination and mutual benefit among Stakeholder groups is strong, and that Stakeholder
groups seem capable and dedicated to a biomass operation. The project was recommended to
proceed to the next stage of development.
Phase III, Design and Permitting, in progress. In July 2013, the City of Galena contracted with
Dalson Energy Inc. to manage the AEA Phase III (Round 6) design and permitting grant. Building
on information gathered in Phases I and II, the Dalson team immediately mobilized the project
and identified its staff, team, and resources for the project. Dalson Energy identified an
engineering firm, Engineering Design and Consulting (EDC), who is qualified and available to
prepare a Conceptual Design Report and Drawings for the new biomass thermal plant. Services
of EDC have included the mechanical investigation and a conceptual design needed for Phase IV
Construction.
Phase III Accomplishments to date:
Milestone #1, Project Scoping and Contractor Solicitation, W ork was accomplished
through several teleconferences and by identifying, qualifying, and contracting the
engineering firm. On July 25, Dalson met with Ernie Hetrick, P.E. and Kevin Hansen, P.E
of EDC. A contract was executed and plans were immediately made to schedule the first
site visit to Galena. The first on-site meeting in Galena was July 30 thru August 1, 2013.
Progress was made on Milestone #6: Final System Design on July 30th when Dalson
Energy, Inc. sent its team to Galena for the first site visit and kickoff meetings. The site
visit and data gathering accomplished the initial portion of Milestone #6 when the
Engineers and Dalson met with Plant Operators, and Dalson met with Officials of the City
(Greg Moyer, City Manager, and Shanda Huntington, City Clerk), Louden Tribal Council
Administrator, March Runner, Staff from the “Base” (former USAF Base) and the City Heat
and Power plants, and School District staff. Discussions included the difficulty of
managing the project while City and Tribal staff are so fully engaged by disaster recovery
work resulting from the flood. However, it was noted that none of the existing equipment,
including the Base heating plant, fuel tanks or utilidor was damaged, as it was all within
the berm that surrounds the Base and GILA School facilities.
Documents submitted with the first monthly report for the Phase III project included:
o Matching Cost Reports from the City of Galena, Galena City School District, and
Louden Tribal Council.
o Contractor Invoices.
o Dalson Energy Consulting Agreement.
o EDC Engineering Fee Proposal.
o State of Alaska press release, titled Major Flooding in Galena.
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The Phase III project was designed to utilize a “go/no go” decision threshold for the delivery,
review, and approval by AEA of Phase III’s final design. Phase III’s final design and cost
estimates are expected to be completed on schedule, and if Phase IV is funded,
construction can then begin - without a long time gap in-between funding application
cycles.
Planning documents referenced during Phase III and attached for the Phase IV project include:
1. Galena Strategic Community Plan, 2012-2017, prepared by Tanana Chiefs Conference
Community Planning Program in Cooperation with the Louden Tribal Council, City of
Galena, and Galena Community Members.
2. Feasibility Study: Heating with Wood at the Galena Base Steam Plant, prepared by Dalson
Energy, Inc., August 2012.
3. Galena Forest Inventory and Management Plan Report, prepared by Ken Stumpf,
Professional Forester of Geographic Resource Solutions, in November 2012. The
document is very large, so the cover page, Executive Summary, and Table of Contents
are included as an attachment with this application. The entire document has been added
to the CD for review.
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, efficiency, and type of generation.
The Galena Air Force Base was built during WWII to support lend lease transfers of aircraft to
Union of Soviet Socialist Republics (USSR). During the Cold War, it was the farthest north
interceptor base in the U.S., with as many as 2,000 airmen stationed here. More recently, the
base declined in importance, until in 2008, the Air Force formally stopped its involvement in
Galena, closed the base, and turned the assets over to the City of Galena. Those assets
included about a dozen buildings, a power plant, a central heating plant, a water plant and sewer
treatment plant. The replacement cost of the structures was estimated by the Air Force at about
$80 million.
Meanwhile, the Galena Interior Learning Academy was formed by the Galena City School District
to provide underserved native and other small village high school students with a quality
educational opportunity and vocational training. At first, it leased and maintained some of the
empty buildings, but when the Air Force left, the local community decided to expand the school
and to reclaim a few of the best facilities. The vocational programs now include pilot training,
cosmetology, wood and metal working, small engine and auto mechanics. Approximately 200
students live in the GILA dormitories during the school year, and the dining hall is supervised by a
professional chef who also trains students in culinary arts.
Like the rest of interior Alaska, the City of Galena and the GILA School live with extremely cold
winters, expensive fuel and power costs, and limited transportation. The community is hundreds
of miles from connected highways, so during the winter the only transportation into Galena is by
airline, and during the summer, freight and fuel are delivered by barge on the Yukon River.
With only minor exceptions, all of the heat and power for every facility in Galena are provided by
diesel fuel. The former Air Force base is primarily heated by the Central Steam Plant. Within the
Steam Plant, steam generation is performed by three (3) low pressure fire tube steam boilers, all
Cleaver Brooks CB100X-400Z, with air atomizing, fully modulating, automatic burners. The boilers
are rated at 16,735 MBH input and 150 PSIG; they operate at 14 -- 20 PSIG. They operate at an
estimated 80% efficiency.
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The Cold W ar-era boilers that serve the GILA school buildings and the utility infrastructure for the
school historically burned nearly a million gallons of fuel per year. Since taking ownership in
2008, the City and the school have economized radically by closing and demolishing unused
buildings, aggressive weatherization and efficiency projects, and by installing control upgrades on
the boilers and buildings. The result so far is greatly reduced fuel consumption, but GILA and the
associated buildings still use about 230,000 gallons of heating fuel per year.
Together with the Alaska Energy Authority (AEA) and other like-minded agencies, the City, the
School, and the Tribe have cooperated to develop a plan to convert the local fuel economy from
diesel to local woody biomass. The AEA has funded several grants to the Tribe and the City that
are on track to build a wood chip fired boiler to replace nearly all of the diesel requirement for the
GILA campus and the associated utilities. We are pursuing that program as fast as we possibly
can, and are aiming to have the new wood boiler operational in the fall of 2015.
In recent years, a variety of consultants have reviewed the existing heating system. An
Anchorage firm, PDC Engineering, recommended replacing burners on the existing boilers, some
upgrades for unattended operation, control valves to allow off-line boiler isolation, improvements
to plant auxiliary systems (such as boiler feedwater), new controls and upgraded fire alarm and
suppression systems.
Steam heat is currently distributed by a district heating system. There are few known
specifications for the heat system, but there are some segments of pipe which are known to be
un-insulated or under-insulated. Pipe wil l need to be insulated according to certain recommended
specifications for the climate zone. The City's recent automation and fire suppression project for
the boiler plant include plans to update the facilities and a new standby generator at the steam
plant. These upgrades are intended to improve efficiency, reduce risk, and reduce operating costs
by enabling remote monitoring from the City power plant.
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:
The current system uses about 230,000 gallons of fuel per year, and is projected to remain at this
rate in future years. Since 2005, fuel usage has declined as buildings have been taken offline.
441,000 in 2005
405,000 in 2006
347,000 in 2007
328,000 in 2008
250,000 in 2009
232,943 in 2011
230,000 in 2012
In 2012 records, daily fuel consumption varied from 500 -- 1,357 gallons of fuel per day. Daily
peak demand for steam is about 16,000,000 lbs. per day, which required 1,378 gallons of fuel.
Over 50% of this load is demanded during 4 months, November – February. On an hourly basis,
the steam plant operates from an estimated 2.1 – 9 MMBTU/hr.
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In 2011, winter lows regularly pushed the steam boilers to 7 MMBTU/hr. peak demand. During the
last heating season (August 2011- May 2012), peak demand occurred on January 2, 2012 at 4
a.m., when the boiler produced 6,723 lbs. of 20 psig steam.
Heat use is measured by water meters that document the quantity of condensate returned to the
steam plant from each facility. During the 2011 – 2012 School Year, customers consumed steam
in the equivalent of 2,911,293 gallons, for a total of 24,192,293 pounds of steam.
Impact of this project on existing energy infrastructure and resources:
The existing Galena Base Steam Plant infrastructure will be maintained in its current operational
state and will be used as back-up and potentially to meet peak load. The current retail electricity
rate is $0.67/kWh. The Galena Community Wood Heat Project will be charged for electricity at
this rate. All existing electricity service will be maintained in its current operational state, and new
service (motor controls) will be added to the project building.
One of the most significant barriers to economic development in Galena is the high cost of
energy, compounded by the dependence of the city, community infrastructure, and local residents
on fossil fuels. The cost of heating and electricity is inhibitive to growth because of the financial
burden it places on local entities, businesses, and individuals alike. Implementing strategies that
address the high costs of energy are vital for economic sustainability of Galena.
4.2.3 Existing Heating Energy Market
Discuss existing energy use and its market. Discuss impacts your project may have on energy
customers.
The Galena City School District is the primary heat customer. During the 2011 – 2012 School
Year, heat loop district consumed steam in the equivalent of 2,911,293 gallons, for a total of
24,192,293 pounds of steam.
Buildings included in the heat loop are:
The Composite Building, Student Union,
Two Seasons Dining Hall, Ptarmigan
Hall, GILA Gym, Iditarod Hall, Head
Quarters, Auto Tech Lab, POL
Maintenance, Carpenter Shop, Career
and Technical Education Shop Building.
When the Galena Base was transferred
to the City of Galena from the US Air
Force, $6.5 million worth of fuel was
gifted to the City. The fuel was
designated for the purposes of providing
a buffer that would allow the community
of Galena to grow into these facilities.
Currently Galena City School District is
the primary tenant in these facilities and
an estimated 900,000 gallons of fuel remains of the original $6.5 million worth of fuel.
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With the Galena Community Wood Heat Project, heat energy would be supplied to GILA and
other heat customers at a savings compared to the cost of purchasing fuel at current prices, and
heat prices will be more stable compared to fluctuations in the prices of fossil fuels. The Galena
City School District has been anticipating the transition to higher heat energy prices as a result of
depleted fuel reserves. Heating with wood is their strategy to manage long-term heat energy
prices.
In 2012, the Galena Base Steam Plant used approximately 230,000 gallons of fuel. At $5.60 per
gallon, the value of this fuel was approximately $1,288,000 ($41.48/ MMBTU). Heat customers of
the Steam Plant purchased heat measured as 2.911 million gallons of condensate. At $0.098 per
gallon 8 ($3.27/ MMBtu), the revenue provided to the City for heat production was approximately
$300,335. According to these calculations, the revenues of heat production were approximately
$987,600 less than the value of the fuel (other O&M costs excluded).
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
• Energy efficiency measures (building envelope)
Description of proposed renewable energy technology
The chosen renewable energy technology for the Galena Steam Base Plant is a 5.0 MMBTU
woodchip steam boiler, using wood fuels up to 40% moisture content. The boiler will produce
steam up to 20 psig (with capabilities up to 150 psig). The technology is commercially available
and proven. We have identified a system designed by Messersmith Manufacturing Inc.
Messersmith was selected for their proven positive track record within interior Alaska.
Optimum installed capacity
It has been identified that the optimum installed capacity is 5.0 MMBTU.
Anticipated capacity factor
The proposed system will displace over 80% of the fuel used for heating at the existing plant.
Anticipated annual generation
During conceptual design, EDC specified a 5 MMBTU/hr. steam boiler with a 3:1 turn down
ratio. Under that configuration, such a boiler would generate an estimated 25,879 MMBTU
annually, with an additional 1,640 MMBTU from fuel.
8 $0.098 per gallon, according to GILA Steam Condensate Usage FY 2012 data.
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Anticipated barriers
At this time there are no known or anticipated barriers. Proposed project site is located within a
flood berm and flood risks are mitigated. Other project risks are discussed in Section 3.5, above.
Basic integration concept
The wood boiler system will be integrated into the existing system to provide base load energy.
The existing boilers will provide supplementary energy and function as standby units.
Delivery method
The delivery method is conventional steam pipes.
4.3.2 Land Ownership
Identify potential land ownership issues, including whether site owners have agreed to the project
or how you intend to approach land ownership obtain harvest contracts and access issues.
The City of Galena – the applicant, owns the site for the proposed construction of the biomass
boiler system on the GILA campus.
A critical element in pursuing the district heating project is to secure the wood fuel supply.
However, all of the essential players are on board to make the fuel economy work. The land owner
is Gana-A’Yoo Limited Native Regional Corporation. Both the Gana-A’Yoo board and the CEO
have cooperated with the Galena entities, and have agreed in principal to a long term contract for
tree harvesting. Louden Tribal Council and Gana-A’Yoo have jointly hired a forester, who is
developing a harvest and business plan, and a harvest contract. Past grants from the AEA have
provided a detailed Feasibility Study to establish the design and financial outlines for the proposed
boiler plant, and a Forest Inventory which indicates that Gana-A’Yoo Limited’s timber resources
can easily support more than the projected harvest levels.
4.3.3 Permits
Provide the following information as it may relate to permitting and how you intend to address
outstanding permit issues.
• List of applicable permits
• Anticipated permitting timeline
• Identify and discussion of potential barriers
List of applicable permits
Fire Marshall approval is required by the State of Alaska for project operation. The Fire Marshall’s
office uses existing published standards as code in Alaska. The following codes apply:
• International Building Code, 2006
• International Fire Code, 2006
• International Mechanical Code, 2006
• International Seals and Gas Code, 2006
The recommended equipment is UL listed, although under certain conditions non-UL equipment
may be eligible for Fire Marshall approval. The equipment must also meet OSHA specifications.
OSHA performs the review of the mechanical and electrical safety of equipment. OSHA currently
requires projects been constructed in accordance with the National Electrical Code, 2008; OSHA is
in the process of adopting 2011 code.
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The project will also need to operate in accordance with Federal Requirements, such as the MACT
Tailoring Rule. Project emissions are expected to operate well below the threshold of any Federal
permitting. All Federal regulations will be met.
Anticipated permitting timeline
Consultation on design will take place in Months 1 and 2 and the project will be inspected by the
Fire Marshall’s office in Month 14. See Project Milestones timeline.
Potential barriers
There are no known potential barriers, since Galena already owns and operates a Steam Plant of
similar pressure rating.
4.3.4 Environmental
Address whether the following environmental and land use issues apply, and if so how they will be
addressed:
• Threatened or endangered species
• Habitat issues
• Wetlands and other protected areas
• Archaeological and historical resources
• Land development constraints
• Telecommunications interference
• Aviation considerations
• Visual, aesthetics impacts
• Identify and discuss other potential barriers
There are no known environmental or land use issues. The project site was developed in 1941 and
actively used as an air base until 2008. Project site is located within a flood prevention berm and
flood risks are mitigated. There are no other known potential environmental barriers for this
project.
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4.4 Proposed New System Costs and Projected Revenues
(Total Estimated Costs and Projected Revenues)
The level of cost information provided will vary according to the phase of funding requested and
any previous work the applicant may have done on the project. Applicants must reference the
source of their cost data. For example: Applicants records or analysis, industry standards,
consultant or manufacturer’s estimates.
4.4.1 Project Development Cost
Provide detailed project cost information based on your current knowledge and understanding of
the project. Cost information should include the following:
• Total anticipated project cost, and cost for this phase
• Requested grant funding
• Applicant matching funds – loans, capital contributions, in-kind
• Identification of other funding sources
• Projected capital cost of proposed renewable energy system
• Projected development cost of proposed renewable energy system
The total anticipated cost is $3,144,200 for the eighteen (18) month project. The Round VII grant
request is $3,096,898 for the Phase IV Galena biomass system project. Cash and In-Kind match
commitments of $47,302 include administrative, development, and operations support from Project
Team agencies. In-Kind contributions from Louden Tribal Council are estimated at $6,656, primarily
in the form of administrative costs and overhead for managing the project. Costs to the GCSD are
estimated at $15,646, also for administrative costs. Costs from the City are estimated at $25,000,
and will include both administrative and personnel costs, plus use of City equipment and resources
for the delivery and construction phases. There are no other funding sources.
The projected capital cost of the biomass system is $2,559,187. Contingency costs of $403,943
(15%) have been added to the Building and Equipment budget, and $47,302 in cash and In-Kind
match contributions have been committed by the City and Project Team. It is anticipated that the
project funding will come from the AEA Renewable Energy Fund Round VII.
The City of Galena, Louden Tribal Council, and the Galena City School District will contribute cash
and management resources for the project. The City is requesting a total of $3,096,898 from AEA
Round VII for the project as follows:
PHASE IV Request: $3,096,898 (Construction, Commissioning, and Reporting)
Building and Equipment costs total $2,559,187 for purchasing and shipping the boiler system
to Fairbanks, and then to Galena; long term storage reclaim; building construction; screens,
plumbing HVAC, fire protection, and electrical; biomass systems installation and connection to
the heat plant steam and condensate headers. Activities will be implemented with the help of
contractors, on-site Project Coordinator, and other local labor.
Phase IV Development costs total $537,711 and include direct labor, project management, and
planning costs.
Contingency costs of $403,943 (15%) have been added to the Building and Equipment budget
for unanticipated cost increases.
A total of $47,302 in cash and In-Kind match contributions has been committed by the City and
our project partners, Louden Tribal Council, Galena City School District and Gana-A’Yoo
Limited.
Renewable Energy Fund Round VII
Grant Application - Heat Projects
AEA 2014-006 Grant Application Page 26 of 39 7/2/2013
NOTE: During Round 6, the City applied for both Phase III and Phase IV together, but AEA funded
only Phase III. During the Phase III process, and in preparation of this proposal, the project costs
have been further elaborated. Phase IV costs increased for equipment, contracted services, and
shipping due to many factors including; manufacturer price increases; increased shipping rates,
additional materials to be shipped, and more current contractor estimates.
4.4.2 Project Operating and Maintenance Costs
Include anticipated O&M costs for new facilities constructed and how these would be funded by the
applicant.
(Note: Operational costs are not eligible for grant funds however grantees are required to meet
ongoing reporting requirements for the purpose of reporting impacts of projects on the communities
they serve.)
The operation and maintenance requirements of biomass systems, though dependent on the
outcome of final design, are not expected to be significantly higher than for oil-fired steam boiler
operation. The project’s O&M costs include $7,875/yr. of scheduled repairs for the biomass system
and approximately $10,000/yr. for the three (3) existing steam boilers. O&M tasks and costs for the
biomass boiler can be split by the two (2) current steam plant operators. An additional
maintenance person would be hired for daily clean-up tasks around the plant. This results in an
overall increase of annual repair and O&M of $21,000. Additionally, the full O&M cost of continuing
to operate the fuel oil steam plant was included in the biomass project’s O&M. The recommended
system design is highly-automated and the actual operation of the equipment is not expected to be
substantially different from a project operating in a less-remote area.
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 grant-funded project
Potential power customers
The Base heat loop is located at the former US Air Force Base and serves sixteen (16) buildings.
Most of these buildings are occupied by GILA. The City also uses heat from the heat loop.
Potential Heat Sales Price
The heat sales price will be negotiated and is expected to be $20 - $30 per MMBTU.
Proposed rate of return
Please see the included Benefit-Cost analysis. The analysis indicates a B/C of 2.25, an eight (8)
year payback, and project Net NPV of 3.7 million.
Renewable Energy Fund Round VII
Grant Application - Heat Projects
AEA 2014-006 Grant Application Page 27 of 39 7/2/2013
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. Anticipated to be in excess of 3,000 green tons /YR
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 3
ii. Rated capacity of generators/boilers/other 16,735 MBH input and 150 PSIG
iii. Generator/boilers/other type
iv. Age of generators/boilers/other
v. Efficiency of generators/boilers/other 80%
b) Annual O&M cost (if system is part of the Railbelt grid, leave this section blank)
i. Annual O&M cost for labor $3,300
ii. Annual O&M cost for non-labor $4,250
c) Annual electricity production and fuel usage (fill in as applicable) (if system is part of the
Railbelt grid, leave this section blank)
i. Electricity [kWh] n/a
ii. Fuel usage
Diesel [gal] 230,000 gal. fuel
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] 230,000 gal.fuel before EEMS, est. 216,000 gpy after EEMs.
ii. Electricity [kWh]
iii. Propane [gal or MMBtu]
iv. Coal [tons or MMBtu]
v. Wood [cords, green tons, dry tons]
vi. Other
Renewable Energy Fund Round VII
Grant Application - Heat Projects
AEA 2014-006 Grant Application Page 28 of 39 7/2/2013
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.]
5 MMBTU biomass boiler
b) Proposed annual electricity or heat production (fill in as applicable)
i. Electricity [kWh] n/a
ii. Heat [MMBtu] Estimated 25,879 MMBTU
c) Proposed annual fuel usage (fill in as applicable)
i. Propane [gal or MMBtu]
ii. Coal [tons or MMBtu]
iii. Wood or pellets [cords, green
tons, dry tons]
Est. 2,300 green tons wood chips (25-45% MC)
iv. Other Est. 12,150 gal. fuel (supplement)
Project Cost
a) Total capital cost of new system $2,559,187
b) Development cost $537,711
c) Annual O&M cost of new system $122,000/yr. ($21,000 more than the existing fuel system.)
d) Annual fuel cost $460,080 in Year 1.
Project Benefits
a) Amount of fuel displaced for
i. Electricity
ii. Heat 203,850 gal/yr.
iii. Transportation
b) Current price of displaced fuel $4.44/gal (2013 AEA estimate)
c) Other economic benefits Reduced fuel costs; increased job and training opportunities;
reduced overhead expenses for the City, Tribe, and District
d) Alaska public benefits Expanded skills for local work force, expanded and improved
services for GILA students and Galena residents;
Fuel consumption moved to a renewable and predictable fuel
source, woody biomass
Heat Purchase/Sales Price
a) Price for heat purchase/sale $20-$30/ MMBTU
Project Analysis
a) Basic Economic Analysis
Project benefit/cost ratio 2.25
Payback (years) 8
Renewable Energy Fund Round VII
Grant Application - Heat Projects
AEA 2014-006 Grant Application Page 29 of 39 7/2/2013
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.
Currently there are five (5) buildings in the GILA complex that have received ASHRAE level II
energy audits through support from the Alaska Housing Finance Corporation. Summary
information for all buildings in the proposed project area is included in the table below. Building
occupancy, hours of operation and other parameters are not currently known. The City of
Galena is committed to performing energy audits in remaining GILA buildings and implementing
energy efficiency measures (EEMs) in GILA and other public buildings in Galena.
For the purposes of the proposed project we have assumed that thermal EEMs will result in a
reduction of 10% of the annual steam consumption in the GILA facilities, thus reducing the
amount of oil and wood fuel that is required from 240,000 to 216,000 gpy fuel oil diesel
equivalent. Thermal EEM savings are estimated at 24,000 gpy worth over $100,000/yr.
assuming ISER/AEA 2015 fuel prices ($4.24/gal).
• Building name: See table.
• Type or primary usage of the building: See table.
• Location: GILA steam district heating system.
• Hours of operation: Variable depending on usage.
• Single structure or multiple units: Single.
• Total square footage: See table.
• Electrical consumption per year: See table. Unknown for unaudited buildings.
• Heating oil/fuel consumption per year: See table.
• Average number of occupants: See table.
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Grant Application - Heat Projects
AEA 2014-006 Grant Application Page 30 of 39 7/2/2013
Has an energy audit been performed? When? Please provide a copy of the energy audit,
if applicable. See table.
Have building thermal energy efficiency upgrades been completed? No.
o Through Alaska Department of Education and Early Development CIP grants and
legislative appropriations GCSD upgraded the following buildings on the GILA
campus with increased energy efficiencies as core aspects of building upgrades:
• GILA Gym - $3.1 million upgrade
• GILA Two Seasons Dining Hall - $3.5 million upgrade
• Building 1850 (GILA Construction Trades Vocational Shop) - $2.5 million
upgrade
o Furthermore, GCSD has two impending projects scheduled for the summer of
2015 to increase energy efficiencies:
• GILA Composite Building - $1.1 million roof upgrade
• GILA Ptarmigan Hall - $1.3 million roof upgrade
If applicable, please provide evidence of efficiency improvements including cost
and anticipated savings associated with upgrades. N/A
Estimated annual heating fuel savings: See table.
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. N/A
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Grant Application - Heat Projects
AEA 2014-006 Grant Application Page 31 of 39 7/2/2013
SECTION 5– PROJECT BENEFIT
Explain the economic and public benefits of your project. Include direct cost savings,
and how the people of Alaska will benefit from the project.
The benefits information should include the following:
• Potential annual fuel displacement (gallons and dollars) over the lifetime of the evaluated
renewable energy project. In order for the applicant to receive credit for heating fuel
displaced the applicant must provide the most recent invoice for heating fuel purchased.
• Anticipated annual revenue (based on i.e. a Proposed Heat Purchase Agreement price,
RCA tariff, or cost based rate)
• Potential additional annual incentives (i.e. tax credits)
• Potential additional annual revenue streams (i.e. green tag sales or other renewable
energy subsidies or programs that might be available)
• Discuss the non-economic public benefits to Alaskans over the lifetime of the project
• Fuel displacement over the project lifetime is expected to be 4,077,000 gallons over
twenty-five (25) years.
• Anticipated annual savings on a cost-based rate is expected to be over $3,800,000/yr.
during the first years of operation.
• There are no known additional annual incentives or additional annual revenue
streams.
• Other public benefits to Alaskans over the lifetime of the project include improved self-
sufficiency regarding future energy needs and a ‘reward’ of knowing that their efforts in the
community visioning process are beneficial to the community. Economic localization will
build confidence in the community, making way for other businesses, training opportunities
for expanded skills, and perhaps even entrepreneurial growth.
SECTION 6– SUSTAINABILITY
Discuss your plan for operating the completed project so that it will be sustainable.
Include at a minimum:
• Proposed business structure(s) and concepts that may be considered.
• How you propose to finance the maintenance and operations for the life of the project
• Identification of operational issues that could arise.
• A description of operational costs including on-going support for any back-up or existing
systems that may be require to continue operation
• Commitment to reporting the savings and benefits
The proposed business structure is similar to the existing business structure for the Galena
Base Steam Plant, whereby the City of Galena owns, operates, and maintains the energy
infrastructure, and administers all financial transactions for the sale of heat.
The project maintenance and operations will be financed through the Galena City Council
budgeting process. The City will ensure designated funds are set-aside for the O&M of the
biomass system. This process is similar to the current process the City uses to administer the
existing Galena Base Steam Plant.
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AEA 2014-006 Grant Application Page 32 of 39 7/2/2013
Operational issues that could arise
The most common operational issue for biomass projects of this type is quality fuel sourcing.
Quality fuel is characterized by consistent dimensions and moisture content, and is low in ash
content and free of foreign matter (e.g. dirt, nails). Each of these characteristics varies; for
example, moisture content can vary according to the species, harvest plot, season of harvest,
decking time, and other factors.
Fuel dimension can vary based on the maintenance of the chipping or grinding machine, the
species processed, and other factors. Additionally, fuel can be unavailable due to equipment
downtime or poor management. The Galena Community Wood Heat Project has the benefit of
coordinating a timber inventory and sale, fuel manufacturing equipment, with the wood heat
project in the project design phase.
Another operational issue that could arise is proper operations and maintenance of the steam
system. Because the City of Galena has successfully operated and maintained a steam system
for a number of years, this is not expected to be a significant challenge.
Operational costs include replacement parts, operations, and maintenance. Such costs include
refractory replacement (est. year 10), greasing bearings, cleaning any flue gas collection and
heat exchangers, steam trap and make-up water treatment, ash removal, routine checks, and
other maintenance.
Monitoring and reporting
The City of Galena currently practices extensive record keeping for monitoring purposes on the
existing Galena Base Steam Plant. Fuel usage, steam production, temperature data, and more is
available on an hourly basis for the past two (2) years. Such data collection is routinely practiced
for the purposes of monitoring the Steam Plant performance and swiftly addressing any issues of
concern. The Project Team, including Dalson Energy, is committed to applying similar record
keeping and additional analysis for the purpose of completing periodic operation and
maintenance reports as required by the grant. Such reports will include actual O&M, fuel, and
equipment costs; O&M measures and schedule; energy output; project availability; conversion
efficiency; renewable energy resource; and recommendations.
In accordance with the project monitoring plan described previously, Louden Tribal Council will
co-manage the project with Dalson Energy Inc. The co-managed project team will be in charge of
analyzing and synthesizing all project data for the purposes of reporting to AEA. The Tribal
Administrator, March Runner, has been managing and monitoring federal and state grants for the
tribe since 2006, and supervises the Tribal staff in daily operations. An on-site Project
Coordinator, Mr. Phil Koontz, will serve at the discretion and direction of March Runner.
The Project team is aware of the requirement by the Authority to provide a Performance/O&M
Report annually for ten (10) years after Project completion. Reports will include: 1) a detailed
description of Project operations and maintenance activities and issues; and (2) a detailed
description of Project performance, including energy output, estimated fuel savings resulting from
the operation of the Project, and any other relevant measures of Project performance reasonably
requested by the Authority, a description of repairs and modifications to the Project, and
recommendations for improvements for similar future projects. The City understands its
commitment to this reporting and is prepared to budget for these costs for the duration of the ten-
year period.
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Grant Application - Heat Projects
AEA 2014-006 Grant Application Page 33 of 39 7/2/2013
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.
Local coordination and awareness of mutual benefit among the stakeholders groups is strong,
and a Joint Resolution of Support is attached with this request. As referenced earlier, the
community has undertaken timber inventories, conducted strategic planning work sessions and
participated in feasibility studies that all point to a project like this. In 2011, Louden employees
cleared approximately nine (9) acres of mostly birch trees which were removed to a staging area
near the City landfill, and which have been made available to Elders and the community. The
remaining wood was put up for bid by the City.
In order to prepare for this project, contracts have been implemented to clear approximately six
(6) acres in total. The clearing is in two (2) areas, one (1) of which is west of the runway and the
other is immediately north of the dike around the Air Force base/GILA school complex. The
clearing includes sixteen )16) small (100 foot square) plots with traffic corridors connecting
them. Considerations to expand those cutting areas will provide about two miles of corridors
about 50 to 100 feet wide to simulate a fuel harvest plan. Available equipment is mainly
chainsaws and dump trucks, plus an excavator and tree shear, most of which is rented
locally. The trees in the area are second growth hardwoods, mainly mature cottonwoods and
related species.
Over the past several years, the community has participated in planning activities and feasibility
studies to address the energy challenges that are quickly changing the sustainability options for
Galena.
a. 2010: Reconnaissance Survey of Renewable Energy Systems for Use in Galena, Alaska,
WH Pacific.
b. 2011: Alaska Energy Authority Round 4 Feasibility Study, Dalson Energy;
The Louden Tribal Council received funding from AEA for a combined wood-fired heat and
power system in Galena. The evaluation was conducted early in 2012 by Dalson Energy.
The study was conducted earlier this year. Although an analysis of the payback on
insulation improvements is outside the scope of the study, it is well-documented that
insulation is usually the most cost effective way to reduce energy costs, particularly in
regions with Galena’s climate and fuel costs.
c. 2011:Galena Strategic Community Plan, Tanana Chiefs Conference Community Planning
Program, approved in April, 2012.
d. 2012: AEA Round 6 Phase III. Building on information gathered in Phases I and II, the
Project Team is currently implementing the Phase III grant project to develop the system
design. In July 2013 the City of Galena contracted with Dalson Energy Inc. to manage the
AEA Phase III (Round 6) design and permitting grant. The Dalson team immediately
mobilized the project and identified its staff, team, and resources for the project. Dalson
Energy identified an engineering firm, Engineering Design and Consulting (EDC), who is
qualified and available to prepare a Conceptual Design Report and Drawings for the new
biomass thermal plant. Services of EDC have included the mechanical investigation and a
conceptual design needed for Phase IV Construction.
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Grant Application - Heat Projects
AEA 2014-006 Grant Application Page 34 of 39 7/2/2013
Phase III Accomplishments to date:
Milestone #1, Project Scoping and Contractor Solicitation. Work was accomplished
through several teleconferences and by identifying, qualifying, and contracting the
engineering firm.
Progress was made on Milestone #6: Final System Design on July 30th when Dalson
Energy, Inc. sent its team to Galena for the first site visit and kickoff meetings. The site
visit and data gathering accomplished the initial portion of Milestone #6 during meetings
with the Plant Operators, City, Tribal, and School Administrators.
The 35% design is close to completion, and the Phase III project is on schedule. Additional
milestones that will be completed for Phase III include the completion of permit applications,
environmental assessment, establish site control, finalize system design with final cost
estimates, and complete the business and operational plan in preparation for Phase IV
construction. Phase III’s final design and cost estimates – including all milestones - are
expected to be completed on schedule.
SECTION 8 – LOCAL SUPPORT AND OPPOSITION
Discuss local support and opposition, known or anticipated, for the project. Include letters of
support or other documentation of local support from the community that would benefit from this
project. The Documentation of support must be dated within one year of the RFA date of July 2,
2013.
The cost of energy in Galena has escalated due to world market prices and costly transport of
petroleum-based fuel. Given the current cost of diesel fuel and the belief that fuel prices will
continue rising, Galena’s ultimate goal is to replace all fossil fuel consumption for the generation
of heat and electricity for Galena, and replace fossil fuels with a locally derived, woody,
sustainable fuel source. Furthermore, Galena seeks an energy system where the dollars spent
to harvest and process the fuel source will be substantially retained within the community,
enabling Galena to be self-sufficient regarding future energy needs.
From 1997 to October 2008, GILA shared Air Force facilities and costs of those facilities with the
Pacific Air Force Command. However, Galena Air Force Base was officially closed in October
2008 through the Base Realignment and Closure (BRAC) process. The Air Force provided
transition fuel to support Galena’s efforts to grow into these facilities; however GILA remains the
primary tenant in these facilities and Galena City School District bears the primary financial
responsibility for all maintenance and utilities. Current projections estimate that the U.S. Air
Force transition fuel will be consumed by FY2017. Failure to secure an alternative, predictable,
sustainable, and less expensive energy source prior to the transition diesel fuel being consumed
jeopardizes the continued growth and operation of one of the state’s critical educational assets
that also serves as a pillar of the economic infrastructure for Galena and the Yukon-Koyukuk
region.
Since 2009, the community of Galena has identified reducing heat costs for GILA as the
first critical step in ensuring Galena is self-sufficient regarding future energy needs. The GILA
biomass heat project will allow the community to grow into the biomass business with a “small
scale” heat project that can then grow into biomass heat projects for other public community
buildings with the ultimate goal of a combined heat and power biomass project that would
provide heat for the GILA campus and electricity for the community of Galena.
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Grant Application - Heat Projects
AEA 2014-006 Grant Application Page 35 of 39 7/2/2013
In 2010, WHPacific was contracted by Louden Tribal Council to perform a reconnaissance
survey of renewable energy systems that could be utilized in Galena, Alaska. Their findings
indicated that biomass fuel was the most promising alternative energy source available.
The community of Galena fully understands that the process to move a community
currently dependent on fossil fuels will take multiple steps. The first step in this process is
to substantially reduce the energy costs of GILA, one of the largest hubs of the community. GILA
has developed into a regional and statewide educational asset and is utilizing buildings and
infrastructure on the vacated Galena Air Force Base.
The following resolutions and support documents are attached:
o Joint Resolution of the Galena City Council, between the City of Galena, Galena City
School District, and Louden Tribal Council, in support of the project
o City of Galena Letter of Support and Match Commitment
o Louden Tribal Council Letter of Support Match Commitment
o Galena City School District Letter of Support, Commitment to Matching Funds, and
Purchase Heat Commitment
o Gana’A-Yoo Limited Letter of Support
o City Council Member, Jonathan Korta Letter of Support (copy, original was submitted with
the Round 6 application)
o Cooperative Project Agreement between Louden Tribal Council and the City of Galena
SECTION 9 – GRANT BUDGET
Tell us how much you are seeking in grant funds. Include any investments to date and funding
sources, how much is being requested in grant funds, and additional investments you will make
as an applicant.
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, (I. Reconnaissance, II. Feasibility and Conceptual Design, III.
Final Design and Permitting, and IV. Construction and Commissioning). Please use the tables
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 Calfa, at scalfa@aidea.org.
The City of Galena is requesting funding from Alaska Energy Authority in the amount of
$3,096,898 for the project. Contingency costs of 15% have been added to the building and
equipment budget for unanticipated cost increases. A total of $47,302 in cash and In-Kind
match contributions has been committed by the City of Galena and our project partners, Louden
Tribal Council and the Galena City School District.
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Grant Application - Heat Projects
AEA 2014-006 Grant Application Page 36 of 39 7/2/2013
The Project team is aware of the requirement by the Authority, identified in Section 3.15 of the
RFA, to provide a Performance/O&M Report annually for ten (10) years after Project
completion. The selected boiler system is modern and automated in general operation. The
system includes performance monitoring equipment and will work in harmony with the
automation that was added to the existing boilers in 2013. Reports will include: 1) a detailed
description of Project operations and maintenance activities and issues; and (2) a detailed
description of Project performance, including energy output, estimated fuel savings resulting
from the operation of the Project, and any other relevant measures of Project performance
reasonably requested by the Authority, a description of repairs and modifications to the Project,
and recommendations for improvements for similar future projects. The City understands its
commitment to this reporting and is prepared to budget for these costs for the duration of the
ten-year period.
Milestone or Task
PHASE IV
Construction
Anticipated
Completion
Date
RE- Fund
Grant Funds
Grantee
Matching
Funds
Source of Matching
Funds:
Cash/In-kind/Federal
Grants/Other State
Grants/Other
TOTALS
(List milestones based on
phase and type of project.
See Milestone list below.)
1. Design and
feasibility
requirements
completed.
Month 1 $30,733 $6,757 COG, LTC, GCSD* $37,490
2. Bid documents
completed. Month 2 $365,454 $6,757 COG, LTC, GCSD* $372,211
3. Vendor selected
and award in
place
Month 4 $10,733 $6,757
COG, LTC, GCSD*
$17,490
4. Construction Month 6 $2,579,367 $6,757 COG, LTC, GCSD* $2,586,124
5. Integration and
testing with
existing system
Month 15 $31,188 $6,757
COG, LTC, GCSD*
$37,945
6. Final acceptance,
commissioning
and start-up
complete
Month 17 $61,642 $6,757
COG, LTC, GCSD*
$68,399
7. Operations
Reporting Month 18 $17,781 $6,760 COG, LTC, GCSD* $24,541
TOTALS $3,096,898 $47,302 $3,144,200
Budget Categories:
Direct Labor and Fringe $46,592 $47,302 COG, LTC, GCSD* $93,894
Travel & Per Diem $0 $0 $0
Equipment $1,389,822 $0 $1,389,822
Materials & Supplies $0 $0 $0
Contractual Services $491,119 $0 $491,119
Construction Services $484,303 $0 $484,303
Other - Freight $281,119 $0 $281,119
Contingency – 25% $403,943 $0 $403,943
TOTALS $3,096,898 $47,302 $3,144,200
*City of Galena (COG), Louden Tribal Council (LTC), Galena City School District (GCSD)
Renewable Energy Fund Round VII
Grant Application - Heat Projects
AEA 2014-006 Grant Application Page 37 of 39 7/2/2013
Project Milestones that should be addressed in Budget Proposal
Reconnaissance Feasibility Design and
Permitting Construction
1. Project scoping and
contractor solicitation.
2. Resource
identification and
analysis
3. Land use, permitting,
and environmental
analysis
4. Preliminary design
analysis and cost
5. Cost of energy and
market analysis
6. Simple economic
analysis
7. Final report and
recommendations
1. Project scoping
and contractor
solicitation.
2. Detailed energy
resource analysis
3. Identification of
land and regulatory
issues,
4. Permitting and
environmental
analysis
5. Detailed analysis
of existing and
future energy costs
and markets
6. Assessment of
alternatives
7. Conceptual design
analysis and cost
estimate
8. Detailed economic
and financial
analysis
9, Conceptual
business and
operations plans
10. Final report and
recommendations
1. Project scoping
and contractor
solicitation for
planning and
design
2. Permit
applications (as
needed)
3. Final
environmental
assessment and
mitigation plans
(as needed)
4. Resolution of
land use, right of
way issues
5. Permit approvals
6. Final system
design
7. Engineers cost
estimate
8. Updated
economic and
financial analysis
9. Negotiated
power sales
agreements with
approved rates
10. Final business
and operational
plan
1. Confirmation that all
design and feasibility
requirements are
complete.
2. Completion of bid
documents
3. Contractor/vendor
selection and award
4. Construction Phases
–
Each project will have
unique construction
phases, limitations,
and schedule
constraints which
should be identified
by the grantee
5. Integration and
testing
6. Decommissioning
old systems
7. Final Acceptance,
Commissioning and
Start-up
8. Operations
Reporting
Renewable Energy Fund Round VII
Grant Applicati on -Heat Projects
I SECTION 10 -AUTHORIZED Sl GNERS FORM
Community/Grantee Name: City of Galena
Regular Election is held:
Authorized Grant S l gner(s ):
Pri nted Name Ti tle
March Runner Tribal Admin i strator
Phil Koontz Project Coordinator
,~
Date :
Term Si gnature
/-/ . ) .;.)
t
~4f~
Shanda Hunti ngton Galena City Clerk b?l-r~J.--·-JL~h
I authorize the above person (s ) to s ign Grant Documents:
(Highest ranking organization/community/municipal offici al)
Printed Name T itle Term
Russ Sweetsi r Mayor
Grantee Co ntac t Info rmation :
Mai ling Address.: P.O . Box 244
Galena , A K 99741
Phone Number: 907-656-1711
Fax Number: 907-656-1716
()
Si gnature
~~~ ---;;:-.
E-mail Address: Phil.koontz@gmail .com
Federal Tax ID #: 92-0081515
Please submit an updated form whenever there is a c hange to the above Information.
AEA 20 14-006 Application Page 7/2/201 1
.)
J
Renewable Energy Fund Round VII
Grant Application -Heat Projects ,·~A' *S&'A
ENERGY AUTHORITY
SECTION 11 -ADDITIONAL DOCUMENTATION AND CERTIFICATION
SUBMIT THE FOLLOWING DOCUMENTS WITH YOUR APPUCATION:
A. Contact i nformation, resumes of Applicant's Project Manager, key staff, partners,
consultants, and suppliers per applicati on form Section 3.1 and 3.4. Applicants
are asked to provi de resumes submitted with applications In separate electronic
documents i f the i ndi viduals do not want their resumes posted to the proj ect web
site.
B . Letters or resol utions demonstrating local support per application form Section 8.
C. For heat projects only: Most recent invoice demonstrating the cost of heating fuel
for the buildl ng(s) i mpacted by the project
D. Govern i ng 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 i ndicated in the application.
Authorizes the Individual who signs t he application has the authority to
commit the organization to the obligations under t he grant
Provi des as poi nt of contact to represent the applicant for purposes of this
application.
Certifies the· applicant i s In compliance w i th applicable federal, state, and local,
laws including existing c redit and federal tax obligat ions.
E. One paper copy and one electronic version of the entire application on CO or other
electroni c media, per RFA Section 1.7.
F. CERTIFICATION
The undersi gned certifies that this application for a renewable energy grant Is truthful
and correct, and that the applicant is In compliance with, and w ill continue to comply
w ith, all federa l and state laws I ncluding ex isting cred it and federal tax obligations and
that they can Indeed commit the entity to these obligations.
P rint Name Greg Moyer
Signa ture I ~~. 7/~
nu., City lan age,V
Oato o/ft.f3
AEA 2014 .()06 Grant Application Page 2of 2 712/2013