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Home My WebLink AboutRenewable Energy Fund Round 6 - Nelson LagoonRenewable Energy Fund Round 6 A I A Grant Application aw Ans. A'KA -' p p 4=' -� ENERGY AUTHORITY Application Forms and Instructions This instruction page and the following grant application constitutes the Grant Application Form for Round 6 of the Renewable Energy Fund. An electronic version of the Request for Applications (RFA) and this form are available online at: http://www.akenergyauthority.org/RE Fund-6.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.or . • 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 satisfied 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. REMINDER: • Alaska Energy Authority is subject to the Public Records Act AS 40.25, and materials submitted to the Authority may be subject to disclosure requirements under the act if no statutory exemptions apply. • All applications received will be posted on the Authority web site after final recommendations are made to the legislature. • In accordance with 3 AAC 107.630 (b) Applicants may request trade secrets or proprietary company data be kept confidential subject to review and approval by the Authority. If you want information is to be kept confidential the applicant must: o Request the information be kept confidential. o Clearly identify the information that is the trade secret or proprietary in their application. o Receive concurrence from the Authority that the information will be kept confidential. If the Authority determines it is not confidential it will be treated as a public record in accordance with AS 40.25 or returned to the applicant upon request. AEA 13-006 Application Page ' of 21 7I312011 Renewable Energy Fund Round 6 Grant Application SECTION 1 —APPLICANT INFORMATION Name (Name of utility, IPP, or government entity submitting proposal) Nelson Lagoon Electric Cooperative - A I Ate' - MERGYAUTHORIIYJ- Type of Entity: Electrical Utility Fiscal Year End Tax ID # Tax Status: --For-profit or Mailing Address Physical Address PO Box 13 Same Nelson Lagoon, Alaska 99571 Telephone Fax 1 Email 907-984-2204 907-989-2233 J_gundell2s@aol.com 1.1 APPLICANT POINT OF CONTACT 1 GRANTS MANAGER Name Title Ernie Weiss Natural Resource Director Aleutians East Borough Mailing Address 3380 C St. Ste 205 Anchorage, AK 99571 Telephone Fax Email 907-274-7557 907-276-7569 eweiss@aeboro.org 1.2 APPLICANT MINIMUM REQUIREMENTS Please check as appropriate If you do not to meet the minimum applicant requirements your application will be rejected 1.2.1 As an Applicant, we are: (put an X in the appropriate box) X An electric utility holding a certificate of public convenience and necessity under AS 42.05, or An independent power producer in accordance with 3 AAC 107.695 (a) (1), or A local government, or A governmental entity (which includes tribal councils and housing authorities); Yes 1.2.2 Attached to this application is formal approval and endorsement for its project by or its board of directors, executive management, or other governing authority. If the No applicant is a collaborative grouping, a formal approval from each participant's governing authority is necessary. (Indicate Yes or No in the box ) Yes 1.2.3 As an applicant, we have administrative and financial management systems and or follow procurement standards that comply with the standards set forth in the grant No agreement. Yes 1.2.4 If awarded the grant, we can comply with all terms and conditions of the attached or grant form. (Any exceptions should be clearly noted and submitted with the No application.) Yes 1.2.5 We intend to own and operate any project that may be constructed with grant or funds for the benefit of the general public. If no please describe the nature of the AEA13-006 Grant Application Page 2 of 21 7/3//2012 Renewable Energy Fund Round G -��_ n �►.r Grant Application ENERGY AUTHORITY project and who will be the primary beneficiaries. SECTION 2 — PROJECT SUMMARY This is intended to be no more than a 1-2 page overview of your project 2.1 Project Title — (Provide a 4 to 5 word title for your project) Nelson Lagoon Wind Energy Project 2.2 Project Location — Include the physical location of your project and names) of the community or communities that will benefit from your project in the subsections below. Nelson Lagoon is situated on the north coast of the Alaska Peninsula on a slender strand of sand between the Bering Sea and a lagoon of the same name, approximately 580 miles southwest of Anchorage. 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 59'58.16"N 161 12'26.16' V1I 2.2.2 Community benefiting — Name(s) of the community or communities that will be the beneficiaries of the project. Nelson Lagoon 12.4 PROJECT DESCRIPTION Provide a brief one paragraph description of your proposed project. AEA13-006 Grant Application Page 3 of 21 713112012 Renewable Energy Fund Round 6 - W-11 A I A-^C0K. Grant Application ENEFWAUTHORrrY Nelson Lagoon requests funding for this wind study as the first step towards supplementing the high cost of diesel generators currently in use. The wind study will result in a feasibility report on the technical, economic, financial, and operational viability and guidance of implementing the next three phases of a wind energy system. The grant would be managed by the Aleutian East Borough and calls for the solicitation off a contractor to perform the analysis and a community meeting with the contractor for presentation, review and discussion of the results Participants in the project will include: 1. Nelson Lagoon Electrical Cooperative (owned by the Native Village of Nelson Lagoon) 2. Aleutians East Borough who will provide overall project management 3. A contractor firm who will provide civil and electrical system engineering 2.5 PROJECT BENEFIT Briefly discuss the financial and public benefits that will result from this project, (such as reduced fuel costs, lower energy costs, etc.) This project will reduce fuel and the overall energy costs to the Nelson Lagoon community. Nelson Lagoon currently produces all of their electricity from diesel generators and heating from burning fossil fuels. Little biomass is currently available to offset home heating and hydrokinetic and solar energy does not seem practical in Nelson Lagoon, but the wind resource is good based on surveys of local community members/ The estimated annual electricity savings, based on the use of a couple 10KW turbines will be 32,880 kWh. This will translate into a financial savings of $11,837 per year (estimated at $.36/kWh). Larger wind turbines will provide more power and more savings, but improvements to the electrical utility would be necessary; this will be investigated if the project is funded. Other project benefits will include: • Reduced dependence on diesel fuel and the expense involved in its transportation and storage. • Save on current operation and maintenance costs by less time from using diesel generators • Contribute to the reduction of air pollution and affects on climate change. 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 project cost total is $223,195. Aleutians East Borough staff time will also be contributed as in - kind to this project for project administration and management ($5,000). The total requested is $218,195 2.7 COST AND BENEFIT SUMARY Include a summary of grant request and your projects total costs and benefits below Grant Costs AEA13-006 Grant Application Page 4 of 21 7/3//2012 Renewable Energy Fund Round 6 !-:Am A .._ Grant Application .:ENERGY A1117-IORIiY (Summary of funds requested) 2.7.1 Grant Funds Requested in this application. $218,195 2.7.2 Cash match to be provided $5,000 2.7.3 In -kind match to be provided 2.7.4 Other grant applications not yet approved 2.7.5 'total Grant Costs (sum of 2.7.1 through 2.7.3) $223,195 Project Costs & Benefits (Summary of total project costs including work to date and future cost estimates to get to a fully operational project) 2.7.6 Total Project Cost (Summary from Cost Worksheet $Not Available including estimates through construction) 2.7.7 Estimated Direct Financial Benefit (Savings) $ 58,999 2.7.8 Other Public Benefit (If you can calculate the benefit in $ Not Available terms of dollars please provide that number here and explain how you calculated that number in your application (Section 6.) SECTION 3 - PROJECT MANAGEMENT PLAN Describe who will be responsible for managing the protect 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). 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 Aleutians East Borough uses a team approach in project management and development. AEB staff maintains routine communications with the Nelson Lagoon Tribal Administration in all aspects of community development and projects. This close contact and coordination will continue in the Nelson Lagoon Wind Power Project. The Nelson Lagoon Tribal Council has authorized the AEB to provide overall project administration and management ofthis project. Upon project funding, the AEB will select and work with Marsh Creek design and construction management consultants to initiate, oversee, and complete the project. Aleutian East Borough Project Management staff includes: Aleutian East Borough Project Management staff includes: • Ernie Weiss, Natural Resource Director 907-274-7557, eweiss@aeboro.orjz • Anne Bailey, Community Development Coordinator 907-274-7580, abaile a.aeboro.or • Roxann Newman, Finance Director. 907-497-2588, rnewman aeboro.or Attached are their resumes. AEA13-006 Grant Application Page 5 of 21 713112012 Renewable Energy Fund Round S ,=K- A I Ar-MZ-A Grant Application _'ENF-RGYAUTHORTY 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 protect. Please fill out form provided below. You may add additional row-, a-, neexlel Start End Milestones Tasks Date Date CDR accepted by AEA Finalize and submit CDR report 1/31/13 Project scoping and community Project Management solicitation for planning and design Travel to community and hold stakeholder meeting to identify community needs. Update schedule and budget Create communication and responsibility matrix, identify hold points. 7/1/13 8/1/13 Permit applications (as needed) Project Management DoD Notice, FAA Notice, SHPO Notice, 7/1511 USFWS Notice, any local permitting 3 9/15/13 Final environmental assessment and Project Management mitigation plans (as needed) Reassess Avian and determine mitigation tans for construction, provide SWPP 8/1113 111/14 Resolution of land use, right of way Project Management issues Determine Site ownership issues, if any Document, if any community concerns with sight and sound at location (Community Notice and meeting) 711/13 7/1114 Permit approvals DoD Notice, FAA Notice, SHPO Notice, 9/1511 12/15/1 USFWS Notice, any local permitting 3 3 Final system design Project Management Finalize Geotech evaluation Provide 30% design drawing package Provide 65% design drawing package 7/1113 7/1114 Engineers cost estimate Project Management Provide detailed budget and tasks for project construction based off of 65% design ROM 1/1114 711/14 Updated economic and financial Project Management analysis Calculate rate for electricity that displaces diesel through the heat recovery system. Review PCE reporting and evaluate potential heat recovery tariff. 1/1114 7/1/14 Final business and operational plan Project Management Work with community and utility board to create business and operational plan. Provide preventative and predictive maintenance plan. Work with community to identify potential wind turbine operators and coordinate training with AVTEC and WTG 3115/1 manufacturer 4 711/14 AEA13-006 Grant Application Page 6 of 21 7/3112012 Renewable Energy Fund Round 6 ,V=-I n Ir tirINi' Grant Application � : '� ENERC,Y AUTHORITY 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 Aleutians East Borough staff will be responsible for implementation and successful completion of the project. The AEB will confer routinely with the Nelson Lagoon Tribal Council while simultaneously working with qualified consultants (Marsh Creek LLC, general contractors, and wind turbine vendors) to develop and complete the project. The AEB will follow its procurement and bid policies as far as selecting firrns and purchasing equipment, supplies, and materials. Selection of A&E firms and general contractors will be based on the type and amount of past wind project experience of the firm as well as individual work experience, experience and familiarity in the AEB region, and project cost. 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 AEB Community Development Coordinator will be the project liaison and contact person among all parties (Nelson Lagoon Tribe, engineering firm, general contractor, vendors, and the AEA). He will help coordinate all project team communications, meetings, and disseminate information on a routine basis. The coordinator will be responsible for all periodic progress reports and other information requests to the AEA. AEB will work closely with the selected contractors and keep the AEA informed of progress by regular e-mail updates as components of the project are completed. The contractor's interim and final reports will be submitted promptly when completed. Close liaison will be maintained with the contractors throughout the project. Issues to be tracked include scope clarifications, progress relative to budget, schedule, data recovery, and health and safety. These will include the project matching funds. 3.5 Project Risk Discuss potential problems and how you would address them. There are potential problems in project logistics and construction in remote areas such as Aleutians East Borough communities. Adverse weather conditions can also cause project delays. Aleutians East Borough staff has much experience in setting up and managing community development projects in AEB communities. Similarly, local labor has much experience, savvy, and know-how to get the job done in adverse conditions such as poor weather. Good team planning and reliance on local knowledge about community conditions help reduce the risk in development projects in remote areas. The US Fish and Wildlife Service was consulted about avian and environmental concerns. Endangered waterfowl use the area so avian studies and careful placement of the met tower (and later the turbines) will be necessary. Transmission lines may pose a threat to birds, and the avian study will consider that and make recommendations if the cables should be buried or not. But the AEA13-006 Grant Application Page 7 of 21 713112012 Renewable Energy Fund Round 6 ,. A r n — -.m -~Grant Application "ENERGY- AUTHORrrY transmission lines should be minimal as the proposed turbine site is close to the power plant. 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 extentlamount 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. Nelson Lagoon may have class 7 wind with miles upon miles of sites for wind installation. Accordingly, the wind resource could exceed the community's electrical energy needs when the wind is blowing. Several issues to resolve the use of this resource are integration with the existing grid and addressing the possible affects to waterfowl especially endangered eiders. Little biomass is currently available to offset home heating and river/stream hydro and solar energy do not seem practical in Nelson Lagoon, but the wind resource is good based on surveys of local community members. 4.2 Existing Energy System 4.2.1 Basic configuration of Existing Energy System Briefly discuss the basic configuration of the existing energy system. Include information about the number, size, age, efficiency, and type of generation. The Native Village of Nelson Lagoon owns and operates the Nelson Lagoon Electrical Cooperative and the Nelson Lagoon Fuel Company. The Nelson Lagoon Electrical Cooperative operates the power utility and serves 47 residential, 11 commercial, two Federal/State Facilities, and nine community facilities customers. The generator building was built in 1998 and is located near the community dock, tank farm, and Nelson Lagoon Storage Building. Across the road from the community dock, Nelson Lagoon Enterprises owns a tank farm consisting of nine fuel tanks, each with a capacity of 27,000 gallons. The tanks contain a variety of fuels: A V gas, Unleaded, Heating Fuel #1, and Diesel #2. Diesel #2 is used exclusively for power generation. There are three John Deere diesel generators used for power generation. Generator #1 has a rated capacity of 125 kW and generator #2 has a capacity of 100kW. Generator #3 (90 kW) is currently out of service. The peak load is 75 kW with an average load of49kW. The community has used an -average of 33,252 gallons per year of diesel #2 for electrical generation for the last three years. The _ AEA13-006 Grant Application Page 8 of 21 713/12012 Renewable Energy Fund Round 6 Grant Application ■:� p � -? ENERGY AIJiHOFirrY utility's power distribution system is all underground 3-phase wire operating at 12,470 volts grounded Y. 4.2.2 Existing Energy Resources Used Briefly discuss your understanding of the existing energy resources. Include a brief discussion of any impact the project may have on existing energy infrastructure and resources. The Nelson Lagoon Power Plant produces electrical energy by burning diesel fuel in engine driven generators. This satisfies a community power consumption of approximately 388,000 kWh per year (a four-year average). This consumption does not include power that is used to operate the power plant, or power lost in distribution. The power demand of the community will significantly increase upon completion of the new Bering Pacific Sea Food Plant being constructed in the summer of2010. By integrating wind power into the existing system, our goal is to generate the same amount of energy output, using substantially less fuel than is currently being used. Another goal is to use any excess power produced from wind energy to heat water, which will further reduce the amount of diesel fuel required 4.2.3 Existing Energy Market Discuss existing energy use and its market. Discuss impacts your project may have on energy customers. Nelson Lagoon is an isolated community situated on the north coast of the Alaska Peninsula on a slender strand of sand between the Bering Sea and a lagoon of the same name. It is approximately 580 miles southwest of Anchorage and accessible only by air and barge transportation. The community experiences long and cold winter nights. Severe winter storms can be continuous. Existing power consumption is approximately 388,000 kWh per year (a four-year average). Reliable power service is essential for airport lights (especially in winter), the health clinic, school, government buildings and facilities, commercial enterprises, and residences. Wind power will ultimately lower monthly electricity costs which keep increasing due to the reliance of fuel for power generation. 4.3 Proposed System Include information necessary to describe the system you are intending to develop and address potential system design, land ownership, permits, and environmental issues. 4.3.1 System Design Provide the following information for the proposed renewable energy system: • A description of renewable energy technology specific to project location • Optimum installed capacity • Anticipated capacity factor • Anticipated annual generation • Anticipated barriers AEA13-006 Grant Application Page 9 of 21 713112012 Renewable Energy Fund Round 6 A I A,C*J;e Grant Application ' ""� = p p � a-� ENERGY AUTHORITY • Basic integration concept • Delivery methods Nelson Lagoon will use the Wind Study to determine the appropriate system and system design. Marsh Creek LLC has extensive experience with system design and has offered four different turbines systems as a possibility for Nelson Lagoon. • Remanufactured Vestas V -27 • NorthWind 100 • Nordtank 300kW Wind • Micon MS30-2SOW 4.3.2 Land Ownership Identify potential land ownership issues, including whether site owners have agreed to the project or how you intend to approach land ownership and access issues. There is a potential wind turbine site located at the tribal generator building. There is currently an APICDA wind turbine currently at this site. The Nelson Lagoon Tribal Council is agreeable to a potential wind turbine project being sited on their land. 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 Threatened Species (U.S. Fish & Wildlife) The USFWS is concerned about bird kills caused by birds flying into wind turbines, towers and guy wires. They have not adopted a formal position against installing wind turbines. In fact, the USFWS is in the process of installing vertical axis wind turbines at their complex in nearby Cold Bay. The USFWS staff in Cold Bay has expressed the position that at potential wind turbine sites the flight patterns of birds should be assessed before turbine installation so that bird kills can be minimized. There is concern about potential bird kills caused by birds flying into wind turbines, towers and guy wires. The U.S. Fish & Wildlife (USFWS) have not adopted a formal position against installing wind turbines. Currently, the USFWS is in the process of installing vertical axis wind turbines at their complex in Cold Bay. The USFWS staf fin Cold Bay has expressed the position that at potential wind turbine sites the flight patterns of birds should be assessed before turbine installation so that bird kills can be minimized. We may follow the Cold Bay model in Nelson Lagoon. Aviation Considerations (FAA). Because of the proximity of the Nelson Lagoon airport to potential wind turbine sites in town, there will need to be a hazard determination of the turbine site in relation to the runway. Telecommunication Impacts (National Communications Information Administration and AEA13-006 Grant Application Page 10 of 21 713112012 Renewable Energy Fund Round 6 A I ,,.. Grant Application MAML T Eo — the National Weather Service) Wind turbines may interfere with communications signals by generating electromagnetic noise and or creating physical obstructions that distort communications signals. State Historic Preservation Office (SHPO) Final site location will have to be reviewed and an application submitted to determine that there are no historic properties affected, 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 Land development constraints As all identified land owners are agreeable to a potential wind turbine located on their property, the only potential land development constraints may arise from site location issues with: Threatened or Endangered species (U.S. Fish & Wildlife) • Telecommunications interference (National Communications Information Administration and the National Weather Service) • Aviation considerations (FAA) Potential peanut issues with the above will be addressed early in the project development process. 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 fundina AEA13-006 Grant Application Page 11 of 21 7I3112012 Renewable Energy Fund Round fi •• A, Grant Application _ OW--JETERUYAUTHORITY+ .. it • 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 enerav system The AEA Energy Model Community preliminary study has estimated the Wind Farm capital costs at Nelson Lagoon to be $1,760,000. We will approach the federal government (DOE) for funding the next phases of the wind project. Overall annual savings are predicted at $173,347. This study phase will cost $218,500. Detailed project development costs will be developed by Marsh Creek, LLC as a result of the feasibility study. Nelson Lagoon expects to follow the Alaska Energy Plans approach to reducing Project Cost Capitol based on the benefit to cost outcome derived by the energy plan highlighted in yellow. Alternative Energy Resources Wind Diesel Hybrid Capbi cost ;1,7soAes per kW hr Wes, Installed KW 200 Annual Capital $118,332 $0.29 $05.34 kW-hryear 4os2gp Anntud OM ;19,m $0.05 $13.75 Met Towers no Fuel cost: $0 $0.00 Homer Data? yes Total Annual Cost $137.394 $0.34 $99,08 Wnd Class 7 Non -Fuel Costs 3M07 Avg wind speed 8.50 mts Alter'nstive COB; $0.40 % Community energy 18o% .Savings New Community C.OE ;0.611 ($58,999) du ma-fto and dR" cost,) Diesel Engine Heat Recovery Heat Recovery System Installed? Y Capltal cast $72iM Is it working now? Y Annual ID $6,032 BILDG6 connected and working: Powarhome Only Annual OM $1,440 Value Total Annual costs $7,472 Savings Water Jacket 2,068 gal ;11,616 Stack Heat 0 gal $0 Heat cost $32.70 ;1MMBtu $4,143 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 then serve.) AEA estimated the 0 & M costs for a Wind -Diesel system in Nelson Lagoon to be $19,062. Currently the 0 & M costs at the diesel plant are not recoverable. The city is unable to charge an energy rate that will cover the 0 & M costs because the customers can not afford energy at that cost. A more accurate estimate of Wind -Diesel 0 & M costs will be developed by the Wind Study. Combining wind into the AEA13-006 Grant Application Page 12 of 21 7/3//2012 Renewable Energy Fund Round 6 ,,�� A Grant A lication p ENERGY AUTHORrry diesel system will allow the Utility to keep energy pricing affordable to residents without losing money on its 0 & M costs. 4.4.3 Power Purchase/Sale The power purchase/sale information should include the following: • Identification of potential power buyer(s)lcustomer(s) • Potential power purchase/sales price - at a minimum indicate a price range • Proposed rate of return from grant -funded project AEA estimates that Wind -Diesel cost of energy as potentially $0.83 per kwH The AEP has provided the potential cost range of power from a wind -diesel system. The cost of displaced fuel will be used as a pricing method for Nelson Lagoon. Table 34. Wind Sydem Cost Range - Rural Alaska Reconnaissance Capital Cost Operating Cost Total Cost RIM) ($Iturbinetyr) ($fkwh) Low High Low High Low High Love Wind Penetration $2200 $2800 $0.10 High Wind Penetration $3600 $60,000 $0.28 DOE Small (a 40k" $0.38 $0.60 Wind Turbine Verification Project Cost Targets40 Source: Section 2.1.6 Characterization of Existing Technology Deployed in Alaska 4.4.4 Project Cost Worksheet Complete the cost worksheet form which provides summary information that will be considered in evaluating the project. Please f ll out the form provided below Renewable Energy Source The Applicant should demonstrate that the renewable energy resource is available on a sustainable basis. Annual average resource availability Estimated to be a class 7 wind resource Unit depends on project type (e g windspeed. hydropower output, biomasss fuel) Existing Energy Generation and Usage a) Basic configuration (if system is part of the Railbelt' grid, leave this section blank) 1 The Railbelt grid connects all customers of Chugach Electric Association, Homer Electric Association, Golden Valley Electric Association, the City of Seward Electric Department, Matanuska Electric Association and Anchorage Municipal Light and Power. AEA13-006 Grant Application Page 13 of 21 7/3//2012 Renewable Energy Fund Round 6 A I A Grant Application - ENERGYAUTHORrFY Number of generators/boilers/other 3 Diesel Generators ii Rated capacity of generatorslboilerslother #1 125kW iii Generatorlboilers/other type iv Age of generators/boilers/other v Efficiency of generators/boilers/other #2 100 kW #3 90 kW None Not Available 11.23 kWh/gal. b) Annual O&M cost (if system is part of the Railbelt grid, leave this section blank) i Annual O&M cost for labor 104,990 ii Annual O&M cost for non -labor c) Annual electricity production and fuel usage (fill in as applicable) (if system is part of the Railbelt grid, leave this section blank) Electricity [kWh] 388,000 ii Fuel usage Diesel [gal] 33,252 Other iii Peak Load 75kW iv Average Load 49kW v Minimum Loan vi Efficiency vii Future trends d) Annual heating fuel usage (fill in as applicable) Diesel [gal or MMBtu] Est. 71,150 gallons/year ii Electricity [kWh] iii Propane [gal or MMBtu] iv Coal [tons or MMBtu] v Wood [cords green tons, dry tons] vi. Other Proposed System Design Capacity and Fuel Usage (Include any projections for continued use of non-renewable fuels) a) Proposed renewable capacity (Wind, Hydro, Biomass, other) [kW or MMBtulhr] To be completed in CDR Report b) Proposed annual electricity or heat production (fill in as applicable) i Electricity [kWh] ii Heat [MMBtu] c) Proposed annual fuel usage (fill in as applicable) i Propane [gal or MMBtu] AEA13-006 Grant Application Page 14 of 21 7/31/2012 Renewable Energy Fund Round 6 n .. �-.- Grant Application 10---'.-'ENERGY AUTHo.. ii. Coal [tons or MMBtu] M. Wood [cords green tons. dry tons] iv Other Project Cost a) Total capital cost of new system b) Development cost c) Annual O&M cost of new system d) Annual fuel cost Project Benefits a) Amount of fuel displaced for Electricity ii Heat M. Transportation b) Current price of displaced fuel c) Other econornic benefits d) Alaska public benefits Power Purchase/Sales Price a) Price for power purchase/sale Project Analysis a) Basic Economic Analysis Project benefit/cost ratio Payback (years) To be completed in CDR Report Sale of green tags if project is constructed To be completed in CDR Report To be completed in CDR Report 4.4.5 Proposed Biomass System Information Please address the following items, if know. (For Biomass Projects Only) • What woody biomass technology will be installed (cord wood, pellets, chips, briquettes, pucks). AEA13-006 Grant Application Page 15 of 21 713112012 Renewable Energy Fund Round 6 0—" A A.0 Grant Application ;ENE,GrAUTHoR(Ty— • Efficiency of the biomass technology. • Thermal or electric application. • Boiler efficiency. • Displaced fuel type and amount. • Estimated tons of wood pellets or chips (specify) to be used per year, and average moisture percentage. • Estimated cords of wood to be used per year, specify whether dry or green and the moisture percentage. • Ownership/Accessibility. Who owns the land and are their limitations and restrictions to accessing the biomass resource? IP Inventory data. How much biomass is available on an annual basis and what types (species) are there, if known? SECTION 5— PROJECT BENEFIT Explain the economic and public benefits of your project Include direct cost savings, and how the people of Alaska will benefit from the project The benefits information should include the following • Potential annual fuel displacement (gallons and dollars) over the lifetime of the evaluated renewable energy project • Anticipated annual revenue (based on i e a Proposed Power Purchase Agreement price, RCA tariff, or cost based rate) • Potential additional annual incentives (i.e_ tax credits) • Potential additional annual revenue streams (i.e. green tag sales or other renewable energy subsidies or programs that might be available) • Discuss the non -economic public benefits to Alaskans over the lifetime of the project According to the AEP study, Nelson Lagoon has the potential to save 5173,347, or over 3 0, 000 gallons in displaced fuel annually. There have been no Proposed Power Purchase Agreement price, RCA tariff, or cost based rates for the proposed wind -diesel system developed at this time. The people of Nelson Lagoon would like to be less dependent on the variable price of diesel fuel, lessen the environmental risks of fuel transport and storage hazards by requiring less diesel fuel to power their community AEA13-006 Grant Application Page 16 of 21 7/3//2012 Renewable Energy Fund Round 6 A Grant Application ENERGY AUTHORITY 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 casts including ors -going support for any back-up or existing systems that may be require to continue operation • Commitment to reporting the savings and benefits The Nelson Lagoon Electrical Cooperative currently operates the power plant and electrical distribution system in Nelson Lagoon. The Utility will incorporate an 0 & M surcharge into its rate structure to recoup the costs of operating and maintaining the renewable energy infrastructure. Actual 0 & M costs will be determined once specifications are developed for the wind turbines to be installed as a result of this study. There will be a learning curve in operating the proposed wind -diesel system. Adequate training and support will be budgeted during additional phases. Selection ofthe wind turbine system will take into account surrounding communities systems already in existence. This will positively contribute to the wind market penetration to support trained personnel. 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 i ne Aleutians r,asi tsorougn was awarded a $15,000 grant from the Alaska Energy Authority on July 27, 2009 to perform a renewable energy resource feasibility study for the communities of Cold Bay, False Pass, and Nelson Lagoon (the AEB contributed $5,000 cash and $10,000 in -kind to the project). The study project was completed on May 18, 2010 and submitted to the AEA on June 2,2010. The study contains an analysis of existing energy power systems, potential renewable energy resources, and recommendations for renewable energy projects in the three communities. The study provides the basis for much of the information contained in this grant. Nelson Lagoon and the Aleutians East Borough are currently receiving assistance from the Aleutian Pribilof Island Association and Marsh Creek, Inc. to follow-up on the project recommendations contained in the completed Renewable Energy Feasibility Study. Specifically, we are refining the type of equipment specified in the plan as well as developing work plans for project implementation This AEA13-006 Grant Application Page 17 of 21 713112012 Renewable Energy Fund Round S A I A.Ct- Z Grant Application '�"° pp � ; ENERGY AUTHORITY work also provides the basis for much of the information in this application. SECTION 8— LOCAL SUPORT Discuss what local support or possible opposition there may be regarding your project Include letters of support from the community that would benefit from this prglect. The Nelson Lagoon Tribal Council and the Aleutians East Borough Assembly both passed resolutions in public meetings in support of the Renewable Energy Fund Round IV Grant, entitled, "The Nelson Lagoon Electric Grid Connect Wind Project with Electric Thermal Heat Recovery." Please see the enclosed resolutions. SECTION 9 — GRANT BUDGET Tell us how much you want 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 Source of Matching Milestone of Task Anticipated Completion RE- Fund Grantee Matchma Funds. Cashlin- TOTALS Date Grant Funds Funds kind/Federal Grants/Other State Grants/Other (List milestones based on phase and type of project. $ $ See Milestone list below. Completion of CDR 1/31/2013 $33,000 In Kind $33,000 Project scoping and In Kind contractor solicitation for 8/1/2013 $8,920 $500 $9,420 planning and design Permit applications (as needed 9/15/2013 $5,400 $500 In Kind $5,900 Final environmental In Kind assessment and mitigation 1/1/2014 $30,000 $500 $30,500 plans as needed Resolution of land use, right of issues 7/1/2014 $20,000 $500 - In Kind $20,500 way Permit approvals 12/15/2013 $27,000 $500 In Kind $27,500 Finals stem design 7/1/2014 $59,375 $500 In Kind $59,875 Engineers cost estimate 7/1/2014 $7,500 $500 In Kind $8,000 Updated economic and financial analysis 7/1/2014 $9,000 $500 In Kind $9,500 Final business and operational plan 7/1/2014 $18,000 $1000 In Kind - TOTALS $218,195 $5,000 $223,195 Budget Categories. Direct Labor& Benefits $211,195 $5,001) $216,195 AEA13-006 Grant Application Page 18 of 21 7/3112012 Renewable Energy Fund Round 6 '-1w n Ir Grant A plication ENEFIGYAUTHORa Travel & Per Diem $7,000 $ $7,000 Equipment $ $ $ Materials & Supplies M -Ck I d. Construction Services I_ TOTALS I I $218195 1 $5,000 1$223,195 Reconnaissance FeasibilityDesign and Permitting Construction 1. Project scoping and 1. Project scoping 1. Project scoping 1. Confirmation that all contractor solicitation. and contractor and contractor design and feasibility 2. Resource solicitation. solicitation for requirements are identification and 2. Detailed energy planning and complete. analysis Y resource analysis Y design 2. Completion of bid 3. Land use, permitting, 3. Identification of 2. Permit documents and environmental land and regulatory g ry applications (as needed) 3• Contractor/vendor analysis issues, selection and award 4. Preliminarydesign g 4. Permitting and g 3. Final environmental 4. Construction Phases analysis and cost environmental assessment and 5. Cost of energyanalysis and mitigation plans Each project will have market analysis 5. Detailed analysis of (as needed) unique construction 6. Simple economic existing and future 4. Resolution of phases, limitations, analysis energy costs and markets land use, right of and schedule 7. Final report and 6. Assessment of way issues constraints which should be identified recommendations alternatives 5. Permit approvals by the grantee 7. Conceptual design 6. Final system 5. Integration and analysis and cost design testing estimate 7. Engineers cost 6. Decommissioning old 8. Detailed economic estimate systems and financial 8. Updated 7. Final Acceptance, analysis economic and Commissioning and 9, Conceptual financial analysis Start-up business and 9. Negotiated 8. Operations Reporting operations plans power sales 10. Final report and agreements with recommendations approved rates 10. Final business and operational plan AEA13-006 Grant Application Page 19 of 21 7/3//2012 Renewable Energy Fund Round 6 Grant Application ALASKA L. X., , 'o F - ;11.1! 4 SECTION 10 - AUTHORIZED SIGNERS FORM Community/Grantee Name: Native Village of Nelson Lagoon Regu neia., Authorized Grant Si n S): ---Printed Name .1 . . . . . . . Title Paul Gunderson n_t____ Term ')Signature �/a 4 1 authorize the above person(s) to sign Grant Documents: (Highest ranking organization/community/municipal official) Printed Name Title Term Signature Grantee Contact Information: Mailing Address: PCB Box 13, Nelson Lag-0-o'n- , AK 99571 Phone Number: Fax Number: E-mail Address: 907-989-2233 Jgunde1126@aol .com Federal Tax ID #: 92-011009 riesse suomit an Updated form whenever there is a change to the above Information. AEA1 3-006 Grant Application page 19 of 20 7/:WOCQ 12 Renewable Energy Fund Round 6 Grant Application �� r SECTION 11 — ADDITIONAL DOCUMENTATION AND CERTIFICATION SUBMIT THE FOLLOWING DOCUMENTS WITH YOUR APPLICATION: A. Contact information, resumes of Applicant's Project Manager, key staff, partners, consultants, and suppliers per application form Section 3.1 and 3.4. Applicants are asked to separate resumes submitted with applications, if the individuals do not want their resumes posted. B. Letters demonstrating local support per application form Section 8. C. An electronic version of the entire application on CD per RFA Section 1.7. D. Governing Body Resolution or other formal action taken by the applicant's governing body or management per RFA Section 1.+4 that: - Commits the organization to provide the matching resources for project at the match amounts indicated in the application. - Authorizes the individual who signs the application has the authority to commit the organization to the obligations under the grant, Provides as point of contact to represent the applicant for purposes of this application. Certifies the applicant is in compliance with applicable federal, state, and local, laws including existing credit and federal tax obligations. E. CERTIFICATION The undersigned certifies that this application for a renewable energy grant is truthful and correct, and that the applicant is in compliance with, and will continue to comply with, all federal and state laws including existing credit and federal tax obligations and that they can indeed commit the entity to these obligations. Print Name Paul Gunderson r Signature Title President Date 9/24/2012 AEA12-106 Grant Applioation Page 20 of 20 713li2012 RESOLUTION 13-04 A RESOLUTION BY THE ALEUTIANS EAST BOROUGH ASSEMBLY SUPPORTING THE SUBMITTAL OF AN APPLICATION FROM THE NATIVE VILLAGE OF NELSON LAGOON'S ELECTRICAL COOPERATIVE TO THE ALASKA, ENERGY AUTHORITY FOR A RENEWABLE ENERGY ROUND VI GRANT. WHEREAS, the Aleutians East Borough provides assistance to six communities in the district which includes Akutan, Cold Bay, False Pass, King Cove, Nelson Lagoon and Sand Point; and WHEREAS, the Aleutians East Borough seeks to implement long term energy goals that result in sustainable and measurable energy savings to Aleutian East Borough Communities; and, WHEREAS, Nelson Lagoon, Alaska is a community with an undeveloped renewable source of wind energy; and WHEREAS, the Aleutians East Borough is working with the community of Nelson Lagoon to implement the renewable energy project recommendations contained in the 2010 AEB Renewable Energy Assessment. NOW THEREFORE BE IT RESOLVED, the Aleutians East Borough Assembly supports the submittal of the Renewable Energy grant for the design phase of the Nelson Lagoon Isolated Grid Wind Project by the Native Village of Nelson Lagoon's Electrical Cooperative for consideration by the Alaska Energy Authority in order to reduce dependence on diesel fuel resulting in a sustained and measurable energy savings; and BE IT FURTHER RESOLVED that the Aleutians East Borough agrees to provide project management and grant administration services valued at a minimum of $2500.00 through completion of the project as an in -kind contribution to the project; and BE IT FURTHER RESOLVED that the Aleutians East Borough Community Development Coordinator is designated as the Borough point of contact for this grant, and is authorized to sign grant reports and other documents related to the grant as needed to fulfill the Borough commitment to provide project management and grant administration for the project. PASSED AND APPROVED by the Aleutians East Borough on this 2$'' day of August, 2012. 4tanley a Mayor ATTEST: A Tina Anderson, Clerk