HomeMy WebLinkAboutFUL FINAL Ketchikan Borough AEA Grant Application - reducedRenewable Energy Fund Round VII
Grant Application - Heat Projects
AEA 2014-006 Application Page 1 of 26 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.
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Grant Application - Heat Projects
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SECTION 1 – APPLICANT INFORMATION
Name (Name of utility, IPP, or government entity submitting proposal)
Ketchikan Gateway Borough
Type of Entity: Borough Fiscal Year End: June 30
Tax ID # 92-0084626 Tax Status: For-profit Non-profit x Government ( check one)
Date of last financial statement audit: 6/30/2012
Mailing Address
1900 First Avenue, Ste. 210
Ketchikan, AK 99901
Physical Address
1900 First Avenue, Ste. 210
Ketchikan, AK 99901
Telephone
907-228-6625
Fax
Email
managersoffice@kgbak.us or mikec@kgbak.us
1.1 APPLICANT POINT OF CONTACT / GRANTS MANAGER
Name
Dan Bockhorst
Title
Borough Manager
Mailing Address
1900 First Avenue, Ste. 210
Ketchikan, AK 99901
Telephone
907-228-6625
Fax
Email
managersoffice@kgbak.us or mikec@kgbak.us
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
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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.
Ketchikan Gateway Borough Biomass Heating 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.
55.35588,-131.713607 1000 Airport Terminal Way, Ketchikan, AK 99901 and
55.352793,-131.67743 2610 4th Ave Ketchikan, AK 99901
2.2.2 Community benefiting – Name(s) of the community or communities that will be the
beneficiaries of the project.
Ketchikan Gateway Borough
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.
Ketchikan Gateway Borough seeks to secure its future energy independence through the
construction of two biomass-fired building heating systems. The woody biomass fired boilers will
replace outdated heating oil boilers, which are costly to maintain and run on heating oil number
2, which is more expensive than locally sourced woody biomass. These systems will, in turn
help to stabilize and secure the forest products industry of Southeast Alaska through the
sourcing of locally-produced wood pellets.
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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.)
The economic benefit of this project will provide cost savings in terms of reduced fuel costs and
lower energy costs from a modern, highly energy efficient system. It will provide economic
benefits by way of short term jobs (i.e., construction) and long-term jobs (e.g., operation) and
much needed economic development to the Ketchikan area by creating a biomass “micro-
economy” in terms of generating and utilizing a locally available fuel source. Moreover, it will
replace an existing boiler at the Airport that is at the end of it operating life and is in urgent need
of replacement. As noted in Section 11, direct and indirect job creation will result from the
project, benefitting the Ketchikan Gateway Borough and both subsidiary entities the Ketchikan
Int’l Airport, Ketchikan Gateway Borough School District within the Borough, as well as the
overall local and regional economy.
In addition to the specific proposed project benefits, this will stimulate the local biomass “micro-
economy”. That is the pellet production industry in and around Ketchikan will receive the
greatest long-term beneficial impact from the construction of the biomass energy facilities in
Ketchikan. Currently, two other local facilities utilize pellets fuels; doubling the local demand with
this project will provide (1) market security for producers to respond with construction of pellet-
making machinery, and (2) further stimulate the local timber industry to justify equipment to
harvest young growth thinning opportunities as well as gather post-harvest forest residues
commonly left in the forest. These secondary submarkets will provide value-added to the timber
industry and improve ecological conditions in the forests. The stimulation of the local biomass
“micro-economy” will foster others to embrace biomass boilers in the community and the region.
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.
Ketchikan Gateway Borough is requesting $1,412,889 through this grant, matched by $353,222
provided directly by the Borough, to support its efforts to develop biomass energy projects at
Ketchikan Airport and Ketchikan Gateway Borough High School. Significant funds have already
been expended in evaluating the feasibility of this project, and funding for engineering design
and permitting has been secured in the amount of $143,363. The requested funding is for
construction of these two projects.
Matching funds for construction have been secured via appropriations, and are provided in a
combination of in-kind support by Borough employees, as well as cash matching contributions,
totaling 20% of anticipated project cost.
Project budgeting is provided in the sections below. Additional engineering and cost detail can
be found in Appendix H.
NOTE: Implementation of Ketchikan Airport and Ketchikan Gateway Borough High School
projects at the same time is expected to yield cost and schedule efficiencies.
2.7 COST AND BENEFIT SUMARY
Include a summary of grant request and your project’s total costs and benef its below.
Grant Costs
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(Summary of funds requested)
2.7.1 Grant Funds Requested in this application $ 1,412,889
2.7.2 Cash match to be provided $ 296,936
2.7.3 Total In-kind match to be provided (sum of lines below) $ 56,286
Biomass or Biofuel inventory on hand $ 0
Energy efficiency improvements to buildings to be
heated (within past 5 years or committed prior to
proposed project completion)
$ 0
Other In-Kind match to be provided $56,286
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) $ 1,766,111
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. $ 1,957,261
2.7.8 Additional Performance Monitoring Equipment not covered
by the project but required for the Grant Only applicable to
construction phase projects.
$ 25,945 (Grant Requested
for Operations
Equipment; KGB in-kind
match for reporting)
2.7.9 Estimated Direct Financial Benefit (Savings) $
2.7.10 Other Public Benefit If you can calculate the benefit in terms
of dollars please provide that number here and explain how you
calculated that number in Section 5 below.
$
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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 Borough intends to release a Request for Proposals to hire a Project Manager that will be
able to provide the appropriate guidance and recommendations to the Borough to ensure that
the project is designed and executed to the maximum efficiencies that control scope and bring
costs in line also keeping projects on schedule.
In house project over-site will be conducted by the Managers for both facilities. For the
Ketchikan International Airport it will be Mike Carney, Airport Manager. For the Ketchikan High
School it will be Mike Williams, District Maintenance Superintendent.
3.2 Project Schedule and Milestones
Please fill out the schedule below. Be sure to identify key tasks and decision points in in your
project along with estimated start and end dates for each of the milestones and tasks. Please
clearly identify the beginning and ending of all phases of your proposed project.
Please fill out form provided below. You may add additional rows as needed.
KGB-High School1
1. Design and feasibility requirements completed 7/1/2014 8/1/2014
Confirm Completion of Design and Feasibility Requirements 7/1/2014 7/15/2014
Confirm Resource Availability 7/1/2014 8/1/2014
2. Bid documents completed 7/15/2014 10/15/2014
Solicit RFQ for Construction and Installation 7/15/2014 10/15/2014
3. Vendor selected and award in place 10/15/2014 12/31/2014
Negotiate Vendor Contract 10/15/2014 10/31/2014
Construction Plan and Schedule 11/1/2014 12/31/2014
4. Construction
Site Grading and Container Pad 5/1/2015 6/1/2015
Process Equipment 6/1/2015 7/15/2015
Utility Hook-ups 7/15/2015 8/15/2015
Construction Monitoring 5/1/2015 8/15/2015
Actively track project costs against the project budget 5/1/2015 8/15/2015
Environmental Monitoring 6/15/2015 8/15/2015
Modifications to final design during construction 5/1/2015 8/15/2015
5. Integration and testing 6/15/2015 8/15/2015
Piping and Interconnection to Energy Users 7/15/2015 8/15/2015
Commissioning Plan and Schedule 7/15/2015 8/15/2015
Coordination of conversion, integration, or surplus of existing system 7/15/2015 8/15/2015
7. Final acceptance, commissioning and start-up complete 8/15/2015 9/31/2015
Commisisoning of Equipment - Start up 8/15/2015 9/1/2015
Update business plans and power purchase agreements (as needed)9/1/2015 9/30/2015
8. Operations reporting *7/1/2014 9/30/2015
Operations and Reporting Equipment 7/1/2014 9/30/2015
Continuous monitoring to verify and update projections and
system efficiency 9/30/2015 n/a
Milestones Tasks Start Date Anticipated
Completion Date
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Ketchikan Airport1
1. Design and feasibility requirements completed 7/1/2014 8/1/2014
Confirm Completion of Design and Feasibility Requirements 7/1/2014 7/15/2014
Confirm Resource Availability 7/1/2014 8/1/2014
2. Bid documents completed 7/15/2014 10/15/2014
Solicit RFQ for Construction and Installation 7/15/2014 10/15/2014
3. Vendor selected and award in place 10/15/2014 12/31/2014
Negotiate Vendor Contract 10/15/2014 10/31/2014
Construction Plan and Schedule 11/1/2014 12/31/2014
4. Construction
Process Equipment 6/1/2015 7/15/2015
Utility Hook-ups 7/15/2015 8/15/2015
Construction Monitoring 5/1/2015 8/15/2015
Actively track project costs against the project budget 5/1/2015 8/15/2015
Environmental Monitoring 6/15/2015 8/15/2015
Modifications to final design during construction 5/1/2015 8/15/2015
5. Integration and testing 6/15/2015 8/15/2015
Piping and Interconnection to Energy Users 7/15/2015 8/15/2015
Commissioning Plan and Schedule 7/15/2015 8/15/2015
Coordination of conversion, integration, or surplus of existing system 7/15/2015 8/15/2015
6. Decommissioning of old system complete 6/1/2015 6/15/2015
Decommission Old Heating System 6/1/2015 6/15/2015
7. Final acceptance, commissioning and start-up complete 8/15/2015 9/31/2015
Commisisoning of Equipment - Start up 8/15/2015 9/1/2015
Update business plans and power purchase agreements (as needed)9/15/2015 9/30/2015
8. Operations reporting 7/1/2014 9/30/2015
Operations and Reporting*7/1/2014 9/30/2015
Continuous monitoring to verify and update projections and
system efficiency 9/30/2015 n/a
Milestones Tasks Start Date Anticipated
Completion Date
NOTE: Implementation of Ketchikan Airport and Ketchikan Gateway Borough High School
projects are anticipated to be implemented on the same schedule yielding cost and schedule
efficiencies.
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.
The following employess will also help oversee various areas of the project:
Ketchikan Airport Project:
Mike Carney, Ketchikan Airport, Project Manager
Mike has 30 plus years in the industry and has been the project manager or involved with over
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$70 million dollars of projects over the last eight years.
Mike Houts, Ketchikan Gateway Borough, Finance Director
Mike has over 30 years of financial management experience Specializing in accounting systems
for Forest Products and Construction Companies.
Maureen Crosby, CPA., Ketchikan Gateway Borough, Controller
Maureen has been a Certified Public Accountant for 13 years, and has been in public
accounting for nearly 20.
Amy Briggs, Ketchikan Gateway Borough, Procurement Officer
As the Borough’s Procurement Officer, Amy has worked as both Project Administrator and
Grant Administrator for several years. She has been directly involved in the procurement of
millions of dollars in goods and services utilizing grant funds. She is also the Borough’s
contract writer.
Ketchikan High School Project:
Mike Williams, Ketchikan School District, Project Manager
Mike Williams is the supervisor of all School District buildings and grounds, Mike has over 30
years in the maintenance and construction field. For the last 7 years he has been responsible
for the maintenance of all the Borough School buildings totalling $90 million in assets. In 2011
he managed the $3.4 million re-roof of the Ketchikan High School. In 2013 will be managing
the Valley park Elementary school reroof costing $1.7 million.
Matt Groves, Ketchikan School District, Administration and Contracting
Matt has over 6 years experience as the Business Manager for the Ketchikan Gateway
Borough School District. Matt currently manages a $41 million dollar budget, $30 million
general fund, with a large portion of the remaining $11 million in grant funds.
3.4 Project Communications
Discuss how you plan to monitor the project and keep the Authority informed of the status.
Please provide an alternative contact person and their contact information.
The Ketchikan Gateway Borough project manager will be responsible for project monitoring and
direct contact with AEA. The project manager will, at a minimum, provide AEA with monthly
progress reports, report dispersal of grant funds, and organize monthly update meetings.
Progress Reports
Written progress reports will highlight activities undertaken with dates, results achieved,
progress towards stated milestones, and outline any unexpected delays, problems or difficulty
that arise as the project progresses. Reports will be submitted on a monthly basis. Financial
Reports
Concurrent with the progress reports, a financial report will be submitted. This report will outline
the utilization and dispersal of grant funding for the month, and over the life of the project. This
report will also actively track project costs against the project budget. Propose budget
modifications and manage cost overruns, as needed.
Monthly Meetings
Monthly meetings will take place via conference call or in person at a mutually agreed upon
time. Meetings will routinely take place 3-5 business days after progress and financial reports
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are submitted. This is intended to allow AEA the opportunity to review the reports and ask
questions regarding project progress and grant utilization.
Monitoring and Performance Reporting Plan
Regular monitoring and performance will be documented and submitted to AEA for approval.
This will include continuous monitoring to verify and update projections and system efficiency.
3.5 Project Risk
Discuss potential problems and how you would address them.
Risk is extremely low for the Ketchikan Gateway Borough Biomass Energy Project. Common
sources of risk such as financial instability, siting concerns, feedstock availability and public
perception are identified in the projects’ Feasibility Studies. Funding has been largely secured
as noted in section 4.4.1 through various sources. Siting of the project will occur within the
footprint of existing systems, or within property already held and in use by the applicant. Public
support for the project is very high, as this is a project proposed by the community for the
benefit of the community. Furthermore, there is a pressing need to see these ends
accomplished as the old boilers are quickly becoming outdated, and are in urgent need of
replacement.
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.
Pellet fuels are the most consistent of all biomass feedstocks. Pre-processing of pellets to
standard specifications greatly reduces compatibility problems and operational issues with
combustion equipment. It is anticipated that the project will seek Pellet Fuels Institute Standard-
grade fuel pellets and equipment will be engineered to handle this grade. The higher allowable
ash content in the Standard-grade pellet can be made from non-merchantable biomass containing
some bark rather than the clean white heartwood required for Premium-grade pellets. Equipment
designed for Standard grade pellets will accept Premium-grade pellets if that is the only supply
availability. It is expected that the recommended pellet boiler equipment be capable of processing
microchip fuel should that become available in the area.
Fuel pellet specifications can be found at the Pellet Fuels Institute website http://pelletheat.org/pfi-
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standards/pfi-standards-program/. Feedstock will be delivered via bulk truckload delivery by fuel
contractor.
Amount: Combined approximately 1,230 tons/year
Pricing: 500 Tons/year over 5 years. $275/ton
Infrastructure Requirements: Pellet Silo1, feed Auger
4.1.2 For Biomass Projects Only
Identify any wood inventory questions, such as:
Ownership/Accessibility. Who owns the land and are their limitations and restrictions to
accessing the biomass resource?
Inventory data. How much biomass is available on an annual basis and what types
(species) are there, if known?
The Ketchikan Gateway Borough is committed to using locally sourced woody biomass in order to
support Alaskan business. KGB has previously contacted Tongass Forest Enterprises to secure
a long term supply of wood pellets. Tongass Forest Enterprises has identified two local entities
from which they will be purchasing pulp-grade wood to produce wood pellets.
Leask Lakes sale
Brown mountain road boundary sale
In a letter to the Borough, Tongass is on record as offering contracts up to 5 years in length, for
volumes exceeding 500 tons/year at a price that is financially viable for this project.
Southeast Alaska as a whole has an opportunity, and perhaps a need to leverage woody biomass
resources for energy purposes. In a 2010 study conducted by the USFS entitled “Economic
Analysis of Southeast Alaska: Envisioning a Sustainable Economy with Thriving Communities”, it
is noted that:
“A potential young growth market is biomass energy, although the potential remains unclear. Current
demand for biomass in Southeast Alaska is relatively small; wood chips and other mill wastes are sufficient
to meet local heating demands. But diesel is widely used for power and heat in Southeast Alaska, and
biomass might be developed into a more cost-effective energy sources. Wood fiber produced from thinning
young forests might be processed into wood pellets and other energy sources if demand comes to exceed
supply of wastes.”
This same report notes that 400,000 acres of Tongass National Forest are in young growth of
various native species, thus ensuring an ample supply for this and other wood energy projects in
the area.
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 space heating system at Ketchikan Airport currently consists of two 1971 Cleaver Brooks oil-
fired boilers with combined nameplate output of 5.36 MMBTU/hr and a peak operating efficiency
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of 72%. These boilers are at the end of their economic life and are scheduled for replacement.
Replacing the system with two new oil-fired boilers has been estimated to cost $700-800
thousand. Retrofitting a pellet fuel system specified at 1.5 MMBTU/hr (28% the size of existing
units) with electricity backup is expected to cost $589,684.
Ketchikan High School also uses fuel oil –fired boilers, and is heated by three units, one at 3.7
MMBTU/hr and two at 4.07 MMBTU/hr. The project feasibility study specifies one 4.7 MMBTU/hr
pellet-fuel system in a stand-alone boiler housing. Existing oil-fired boiler equipment can be
salvaged for use after installation of a pellet-fired heating system, and can account for 15% of
average load requirements and peak heating needs, reducing capital cost and scale required for
the pellet system.
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.
The primary fuel source presently used to generate heat in the Ketchikan Gateway Borough is
fuel oil. The physical properties of fuel oil are well understood, and the current price in Ketchikan
for fuel oil #2 is $3.53-$3.59/gallon.
The proposed project will help the city by reducing the use of expensive fuel oil. The key impact
on infrastructure will involve changing buildings from liquid to solid fuel storage systems. This is
anticipated to be accomplished by erecting storage facilities adjacent to the heating buildings.
4.2.3 Existing Heating Energy Market
Discuss existing energy use and its market. Discuss impacts your project may have on energy
customers.
The proposed project does not anticipated selling heat on the open market. It is intended to offset
present use of heating oil for boilers operated by the applicant. At present, total fuel oil usage is
over 111,000 Gallons per year, with a fuel price of approximately $3.53-$3.59/gallon of fuel oil.
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
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Optimum installed capacity
Anticipated capacity factor
Anticipated annual generation
Anticipated barriers
Basic integration concept
Delivery methods
Energy efficiency measures (building envelope)
The Ketchikan Borough is proposing the construction of two boiler systems that will be located at
Ketchikan Airport and Ketchikan Gateway Borough High School. Preliminary feasibility studies
have been performed for both systems and can be found in the appendix. These systems are not
physically connected and transfer of materials or thermal energy between the two is not
anticipated. Pelleted woody biomass fuel will be produced by an independent biomass vendor,
and transported to Ketchikan by barge. The wood pellets will then be transported to the boiler
sites, via truck.
The first system will be placed at the existing Ketchikan Airport. The current heating system in the
complex for the first system (32,000 sq. ft.) consists of 2 Cleaver Brooks oil fired boilers installed
in 1971. They supply heating and domestic hot water to the facility. These oil-fired boilers are at
the end of their economic life and are scheduled for replacement. Based on feasibility study data,
it is proposed that they be replaced with a 450kW Wood Pellet boiler and a 360kW electrical
backup. These boilers will replace the existing boilers both in utility and location. Therefore, no
additional infrastructure will be required to house the boilers. Adjacent to the boiler building, a
pellet silo will be erected. An auger will run between the pellet silo and the boiler building for
feedstock transfer from storage to the boiler. In this way, fuel flow will be highly automated.
System ash will be removed manually according to vendor specifications and transported to the
local landfill.
The second system will be placed at Ketchikan High School. The heating area of this system is
approximately 110,000 square feet and is presently serviced by one 3,770,000 Btu/hr output hot
water boiler and two 4,070,000 Btu/hr output hot water boilers. The existing boilers run on fuel oil,
are original to renovation work in the mid 1990’s and are in good condition. However, a recent
feasibility study estimates that a 4.7 MMBtu/hr hot water boiler would be sufficient to meet base
load demands. It is further estimated that meeting this base load would represent approximately
85% of the facility’s thermal usage in a given year. One or more of the existing boilers will remain
to accommodate peak loads and biomass boiler downtime. Because the existing boilers are to
remain in place, it is anticipated that additional housing will be required for the new boiler system.
A standalone boiler building will be erected to meet this need. Adjacent to the boiler building, a
pellet silo will be erected. An auger will run between the pellet silo and the boiler building for
feedstock transfer from storage to the boiler. In this way, fuel flow will be highly automated.
System ash will be removed manually according to vendor specifications and transported to the
local landfill.
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.
Land anticipated to be used for construction of this project is owned by the applicant.
Biomass harvested for use in this project will be locally sourced, but ownership issues associated
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with biomass harvest will be the domain of the biomass supplier, not the applicant.
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
The project will likely trigger the needs for several permitting and regulatory requirements to be
approved for operation. These permits may include various federal, state and local environmental,
construction and land use permits. It is likely that both facilities will be below the air permitting
requirements pursuant to Alaska Air Quality Regulations 18-AAC-50. An Air Quality Feasibility
Study was conducted by Resource Systems Group, Inc. in conjunction with the Ketchikan High
School Feasibility Study (Ketchikan HS Pre-Feasibility Assessment, Appendix 1B) which
determined that project would not require an air permit. The Ketchikan Airport facility is assumed
to be accessible to the same exemption, but may be required to obtain additional permitting per
FAA regulations. This will be reviewed early in the engineering and permitting process under this
proposed grant.
Other permits are expected to be required, including EPA construction general permit and
NPDES storm water permit (for High School facility building construction only) local construction
and operating approvals, and Boiler permitting and boiler operator licenses per Alaska Statutes,
Sec. 18.60.210 (a) (9), and Sec. 18.60.395 (b) (2), respectively. It is not expected that these
permitting and regulatory procedures will impact the overall project schedule or scope
4.3.4 Environmental
Address whether the following environmental and land use issues apply, and if so how they will
be addressed:
Threatened or endangered species
Habitat issues
Wetlands and other protected areas
Archaeological and historical resources
Land development constraints
Telecommunications interference
Aviation considerations
Visual, aesthetics impacts
Identify and discuss other potential barriers
Threatened or endangered species /Habitat Issues
o No endangered or threatened species will be impacted by the construction of this
project.
o Biomass will only be purchased from vendors who practice sustainable harvesting
techniques.
Wetlands and other protected areas
o Biomass will only be purchased from vendors who practice sustainable harvesting
techniques.
Archaeological and historical resources
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o Construction will take place within the footprint of existing facilities which have
undergone assessments for archaeological and historically significant sites.
Land development constraints
o None anticipated
Telecommunications interference
o None anticipated. Infrastructure will be at height with surrounding buildings.
Aviation considerations
o None anticipated. Infrastructure will be at height with surrounding buildings.
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
A detailed financial analysis supporting the costs associated with this project can be found in
Appendix H. A summary of the requested parameters is provided below:
Total anticipated project cost $1,957,261
Cost for this phase $1,766,111
Requested grant funding $1,412,889
Applicant matching funds – loans, capital
contributions, in-kind
$353,222
Identification of other funding sources $143,393 from the USDA WBUG Grant
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.)
Annual O&M costs for the new facilities have been estimated by previous feasibility studies to be
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approximately $15,000 per year. This is in addition to an estimated annual fuel cost of $368,100
per year.
It is important to note that these boilers will be replacing existing systems. Thus, the O&M costs
as well as fuel costs will be borne by the applicant using funds previously budgeted for the
existing system. These costs are anticipated to represent a significant improvement over the
status quo.
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
Heat generated from the proposed system would be used by the applicant, and thus will not be
made available for sale. The primary revenue stream for this project, is then avoided costs of
energy purchases.
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. In excess of the required 1227 tons/year
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 5
ii. Rated capacity of generators/boilers/other 2units @ 5.36 MMBTU/hr,
2units @ 4.07 MMBTU/hr
1 unit @3.7MMBTU/hr
iii. Generator/boilers/other type Boilers
iv. Age of generators/boilers/other 30-40 Years
v. Efficiency of generators/boilers/other 72%
b) Annual O&M cost (if system is part of the Railbelt grid, leave this section blank)
i. Annual O&M cost for labor $8,876
ii. Annual O&M cost for non-labor $8,825
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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] 0
ii. Fuel usage
Diesel [gal] 0
Other 0
iii. Peak Load 0
iv. Average Load 0
v. Minimum Load 0
vi. Efficiency 0
vii. Future trends 0
d) Annual heating fuel usage (fill in as applicable)
i. Diesel [gal or MMBtu] 111,033 Gallons
ii. Electricity [kWh] 0
iii. Propane [gal or MMBtu] 0
iv. Coal [tons or MMBtu] 0
v. Wood [cords, green tons, dry tons] 0
vi. Other 0
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]
Woody Biomass Pellets
1 Unit @ 4625 MBH
1 Unit @ 1535 MBH
b) Proposed annual electricity or heat production (fill in as applicable)
i. Electricity [kWh]
ii. Heat [MMBtu] 14,085
c) Proposed annual fuel usage (fill in as applicable)
i. Propane [gal or MMBtu] 0
ii. Coal [tons or MMBtu] 0
iii. Wood or pellets [cords, green tons,
dry tons]
1227
iv. Other 0
Project Cost
a) Total capital cost of new system $1,041,603
b) Development cost $897,930
c) Annual O&M cost of new system $15,000
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d) Annual fuel cost $368,100
Project Benefits
a) Amount of fuel displaced for
i. Electricity
ii. Heat 111,033 gallons of #2 heating oil
iii. Transportation
b) Current price of displaced fuel $3.59/gallon
c) Other economic benefits
d) Alaska public benefits Fuel oil can be diverted for necessary electricity
production.
Heat Purchase/Sales Price
a) Price for heat purchase/sale N/A
Project Analysis
a) Basic Economic Analysis
Project benefit/cost ratio 3.35 @ 20 Years (High School)
Payback (years) 8.1 (High School)
20 (Airport)
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.
The table below displays the requested data for both buildings effected by this grant proposal.
The requested energy audits may be found in the appendix.
Building name Airport Terminal High School
Type or primary usage of the building Airport Terminal High School
Location
1000 Airport Terminal
Way, Ketchikan, AK
99901
2610 4th Ave
Ketchikan, AK 99901
Hours of operation Daily from 5:45 am to
9:30 pm
Monday -Friday
6am-9pm
Single structure or multiple units Single Structure Single Structure
Total square footage 32,600 180,614
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Electrical consumption per year None relating to
building heat
None relating to
building heat
Heating oil/fuel consumption per year 22,700 127,900
Average number of occupants
Staff - 85
Passengers - 600/ day
Local traffic - 350 /day
Students – 560
Staff - 40
Has an energy audit been performed? When?
Please provide a copy of the energy audit, if
applicable.
Yes – Oct 2011 Yes – Nov 2012
Have building thermal energy efficiency
upgrades been completed?
No No
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
Bioenergy facility construction produces multiple positive effects for a region or locality in which
the facility is built.
Firstly, it will displace the use of heating oil in the project’s effected area. Over a 20 year
lifespan, the proposed system would displace over 2.20 Million gallons of diesel fuel, worth
nearly $8 Million in today’s dollars. This displacement will save the Borough over 600 thousand
dollars in direct fuel costs.
Engineering and construction jobs will also be created during plant construction, and jobs for
personnel to manage and operate the facility are also created. Indirect jobs and industries also
benefit from the feedstock and other supply materials logistical requirements of the facility. The
facility support impacts spread further and affect more industries than the facility itself. Known
as multipliers, these effects are often far greater than the direct production of the facility.
Ketchikan Gateway Borough will give local construction contractors preferential bidding status
through the design process, to provide specific local building code and design conditions
experience to the team. This will locally distribute funding dollars throughout the project. A
number of qualified firms are available to provide construction contracting services to the project
through the construction phase.
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Upon completion, the project is expected to create several direct full time positions for each
facility in the form of qualified boiler operators. Additional job creation benefits will spread far
into the community, including local pellet fuel providers, forest industry, civil and electrical facility
maintenance services, and other local industries. A region-wide expansion to pellet fuel heat
can produce cost savings on the order of $2.1 billion in cumulative net worth over a 50-yr period
while increasing job opportunities and reinvesting capital directly into the community.
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
Proposed business structure:
This project will maintain a high level of stability, in part because all resources will be used
internally within the borough. There will be no sale of products, and thus no need for complicated
business structures and payouts.
How you propose to finance the maintenance and operations for the life of the project
Funding has been secured for substantial portions of the overall project. The Airport has
$1,197,500 in funds available in a legislative grant. These funds will be divided between 1)
replacing the failing airport terminal heating system as per the proposed biomass heating
project, and 2) making other energy saving improvements.
Planning is underway to secure the remainder of the financing for the High School. The
School District anticipates applying for CIP funds in FY 2013 for disbursement in FY 2015.
In-kind matching funds will be provided by the Ketchikan Gateway Borough, Ketchikan
Airport, and Ketchikan School District to oversee and internally manage the project.
Operational Costs
Fuel costs will be borne by the applicant in much the same way that it currently is with the
diesel boiler system. Fuel is anticipated to be purchased from local suppliers at a rate of
$300/ton of pellets.
Labor will be provided by employees who operate existing boiler units.
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
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meet the requirements of previous grants.
Prior to apply for grant funding from AEA, the Ketchikan Gateway Borough has taken multiple
steps to ensure project success. Third party engineering firms have been hired to perform
energy audits for all effected facilities, and to perform feasibility studies regarding construction of
the proposed biomass boilers. These reports may be found in the appendix.
Data from these studies was used to apply for the USFS Woody Biomass Utilization Grant. The
Borough received $129,210 in grant funding from the USFS Woody Biomass Utilization Grant in
May of 2013, which will be used to fund final design of facilities. The Borough is currently in the
process of sending out a bid for design services.
Further funding has also been secured for substantial portions of the overall project. The Airport
has $1,197,500 in funds available in a legislative grant. These funds will be divided between 1)
replacing the failing airport terminal heating system as per the proposed biomass heating project,
and 2) making other energy saving improvements.
Planning is underway to secure the remainder of the financing for the High School. The School
District anticipates applying for CIP funds in FY 2013 for disbursement in FY 2015.
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.
This project has been proposed by the community for the benefit of the community. This
construction is anticipated to create local jobs, improve local infrastructure, and As such,
support is very high as is the desire to act swiftly. Letters of support can be found in the
appendices.
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.
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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.
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KGB – High School
RE- Fund Grantee Matching Source of Matching
Funds:
Grant Funds Funds
Cash/In-
kind/Federal
Grants/Other State
Grants/Other
1. Design and feasibility requirements completed 8/1/2014 $12,000 $3,000 in-kind $15,000
7/15/2014
8/1/2014
2. Bid documents completed 10/15/2014 $13,600 $3,400 in-kind $17,000
10/15/2014
3. Vendor selected and award in place 12/31/2014 $546,400 $136,600 cash $683,000
10/31/2014
12/31/2014
4. Construction
Site Grading and Container Pad 6/1/2015 $7,687 $1,922 cash $9,609
Process Equipment 7/15/2015 $108,336 $27,084 cash $135,420
Utility Hook-ups 8/15/2015 $16,000 $4,000 cash $20,000
Construction Monitoring 8/15/2015 $14,080 $3,520 cash $17,600
Actively track project costs against the project budget 8/15/2015 $5,600 $1,400 In-kind $7,000
Environmental Monitoring 8/15/2015 $8,000 $2,000 In-kind $10,000
Modifications to final design during construction 8/15/2015 $156,862 $39,215 cash $196,077
5. Integration and testing 8/15/2015 $8,000 $2,000 in-kind $10,000
8/15/2015
8/15/2015
8/15/2015
7. Final acceptance, commissioning and start-up complete 9/31/2015 $32,000 $8,000 in-kind $40,000
9/1/2015
9/30/2015
8. Operations reporting *9/30/2015 $12,609 $3,152 in-kind $15,761
9/30/2015
n/a
TOTALS $941,174 $235,293 $1,176,467
Direct Labor & Benefits $$$44,761
Travel & Per Diem $$$20,000
Equipment $$$683,000
Materials & Supplies $$$216,077
Contractual Services $$$27,600
Construction Services $$$185,029
Other $$
TOTALS $$$1,176,467
*The Authority will work with the grantee to
implement this required reporting. The cost of any equipment
to monitor the system performance should be included in the
project cost. Any equipment needed to fulfill the grant’s
monitoring requirements that are not already project costs
should be included in section 2.7.8 of the application form.
TOTALS
Budget Categories:
Milestones Anticipated
Completion Date
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Ketchikan Airport
RE- Fund Grantee Matching Source of Matching
Funds:
Grant Funds Funds
Cash/In-
kind/Federal
Grants/Other State
Grants/Other
1. Design and feasibility requirements completed 8/1/2014 $12,000 $3,000 in-kind $15,000
7/15/2014
8/1/2014
2. Bid documents completed 10/15/2014 $16,000 $4,000 in-kind $20,000
10/15/2014
3. Vendor selected and award in place 12/31/2014 $133,600 $33,400 cash $167,000
10/31/2014
12/31/2014
4. Construction
Process Equipment 7/15/2015 $80,080 $20,020 cash $100,100
Utility Hook-ups 8/15/2015 $32,000 $8,000 cash $40,000
Construction Monitoring 8/15/2015 $14,080 $3,520 cash $17,600
Actively track project costs against the project budget 8/15/2015 $16,000 $4,000 In-kind $20,000
Environmental Monitoring 8/15/2015 $8,000 $2,000 In-kind $10,000
Modifications to final design during construction 8/15/2015 $78,619 $19,655 cash $98,274
5. Integration and testing 8/15/2015 $24,000 $6,000 in-kind $30,000
8/15/2015
8/15/2015
8/15/2015
6. Decommissioning of old system complete 6/15/2015 $12,000 $3,000 in-kind $15,000
6/15/2015
7. Final acceptance, commissioning and start-up complete 9/31/2015 $32,000 $8,000 in-kind $40,000
9/1/2015
9/30/2015
8. Operations reporting 9/30/2015 $13,336 $3,334 in-kind $16,670
9/30/2015
n/a
TOTALS $471,715 $117,929 $589,644
Direct Labor & Benefits $$$75,000
Travel & Per Diem $$$20,000
Equipment $$$167,000
Materials & Supplies $$$100,100
Contractual Services $$$102,600
Construction Services $$$124,944
Other $$
TOTALS $$$589,644
*The Authority will work with the grantee to
implement this required reporting. The cost of any equipment
to monitor the system performance should be included in the
project cost. Any equipment needed to fulfill the grant’s
monitoring requirements that are not already project costs
should be included in section 2.7.8 of the application form.
TOTALS
Budget Categories:
Milestones Anticipated
Completion Date
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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