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Home My WebLink AboutKokhanok - GrantApplication6 -FINALRenewable Energy Fund Round 6 AW Grant Application ENERGYAUTHORrrY 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.akenergvauthoritv.or-q/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(W-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 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 1 of 23 7/3/2011 Renewable Energy Fund Round 6 )■W- A II tiC.NT' Grant Application 4- -' 601F- ' ENERGY AUTHOR[TY SECTION 1 —APPLICANT INFORMATION Name (Name of utility, IPP, or government entity submitting proposal) Kokhanok Electric Type of Entity: Fiscal Year End Tax ID # : 92-0071118 Tax Status: For- it or x non- rofit check one Telephone Fax Email 907-282-2202 1 907-866-207-0993 Kokhanok vc@yahoo.com 1.1 APPLICANT POINT OF CONTACT 1 GRANTS MANAGER Name Title Nathan Hill Tribal Administrator Mailing Address P.O. Box 1007, Kokhanok, AK 99606 Telephone Fax Email 907-282-2202 1 866-207-0993 Kokhanok vcayahoo.com 1.2 APPLICANT MINIMUM REQUIREMENTS Please check as appropriate If you do not to meet the minimum applicant requirements, your application will be rejected 1.2.1 As an Applicant, we are: (put an X in the appropriate box) 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 its 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. Yes 1.2.4 If awarded the grant, we can comply with all terms and conditions of the attached grant form (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. AEA13-006 Grant Application Page 2 of 23 713//2012 Renewable Energy Fund Round 6 -« n _ n o►�r Grant Application " e� .ENERGY AUTFiORI1Y 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) High -Penetration Wind Energy Project - Kokhanok 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 Kokhanok, Alaska is located on the southern shore of Iliamna Lake. Kokhanok is 88 miles northeast of King Salmon, Alaska. 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 ff you would like assistance obtaining this information please contact AEA at 907-771-3031 59.441600' North Latitude -154.755140' West Longitude 2.2.2 Community benefiting — Name(s) of the community or communities that will be the beneficiaries of the project. Kokhanok 2.3 PROJECT TYPE Put X in boxes as appropriate 2.3.1 Renewable Resource Type X Wind Biomass or Biofuels Hydro, including run of river Transmission of Renewable Energy Geothermal, including Heat Pumps Small Natural Gas Heat Recovery from existing sources Hydrokinetic Solar Storage of Renewable Other (Describe) 2.3.2 Proposed Grant Funded Phase(s) for this Request (Check aft that apply) Pre -Construction Construction Reconnaissance Design and Permitting Feasibility X Construction and Commissioning Conceptual Design AEA13-006 Grant Application Page 3 of 23 713/12012 Renewable Energy Fund Round 6 maw-,_ Grant A .►�K. Application � ` �_,� p p ENERGY AUTHORfTY 2.4 PROJECT DESCRIPTION Provide a brief one paragraph description of your proposed project. By the end of 2011, the high development costs of the Kokhanok wind -diesel project drove Sustainable Automation out of business. Sustainable Power Systems LLC was subsequently formed to pursue new business opportunities in the field of renewable energy systems integration. Given adequate funding, Marsh Creek LLC is comfortable that Sustainable Power Systems is ready and willing to take on the task of completing the remaining system development and commissioning work that will be required to make the Kokhanok project a success. What remains to be done at this point is to complete the development, testing, and commissioning of the software for the Hybrid System Supervisory Controller, the component that monitors and orchestrates the operation of all other system components. Specifically, the following functions remain to be fully implemented: • Automatic diesel dispatch: starting and stopping diesel gensets as required to reliably meet the net electric load (the primary load minus the renewables contribution). • Automatic inverter dispatch: starting and stopping the grid -forming inverter as required to go in and out of diesel -off mode. The system shall run diesel -off when there is, on average, sufficient wind power to completely cover the primary electric load. • Automatic feeder control., automating the feeder breaker(s) reclosure as part of an automatic power plant restart procedure after an outage. • Data logging to a local database: automatically log system performance data to an on- board (part of the HSSC) data base. Average, maximum, and minimum values shall be logged at each • Fault logs for each component: generating and storing a log of all faults that occur on each component, viewable either as a master log for the entire system or as an individual log for each component. • Data log exporting: Exporting logged data from the local database to spreadsheet readable files that can be viewed and analyzed by project stakeholders. • Automatic report generation: Automatically generate and email periodic performance to satisfy the requirements of various stakeholders (e.g. the monthly PCE report). • Fault notification: Automatically notify the appropriate personnel via email and text message whenever a fault occurs on one of the power system components. • Public portal. Provide a publicly viewable web page to allow project stakeholders and interested members of the general public to get a real time overview of system performance without compromising the performance or security of the power system. Much of the remaining work can be accomplished in the Sustainable Power Systems offices and power lab in Boulder, Colorado. However, because they represent major changes to the system operation, the automatic dispatch algorithms in particular will require on -site installation and testing as part of a final commissioning process. AEA13-006 Grant Application Page 4 of 23 713I12012 Renewable Energy Fund Round 6 ._4M_ A I Grant Application __ ENERGY ALTMO -' 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.) Benefits to AEA The following benefits will accrue to AEA as a result of approving this grant request: The Kokhanok high penetration wind -diesel will be recognized as an unqualified success, in a state that badly needs successful wind power projects. This will facilitate obtaining future Renewable Energy Fund funding from the legislature. The improved data logging and reporting capability will give AEA staff a detailed window into system operating performance. AEA personnel will gain insight into best practices when implementing high penetration wind -diesel systems, particularly those incorporating energy storage. Benefits to Kokhanok Village Council and Lake and Peninsula Borough The following benefits will accrue to the KVC as a result of receiving this grant: Fuel savings will be significantly increased, since it will no longer be necessary to run one diesel at all times. Diesel maintenance costs will be reduced. Diesel maintenance is dictated primarily by run time, and because run hours will be reduced, the frequency of oil changes, overhauls, etc. will similarly be reduced. There is skepticism of the wind project amongst some Kokhanok residents. Fully implementing and supporting the system to allow it to provide sustained operation with many diesel -off hours will overcome the skepticism and validate the council's decision to pursue the project in the first place. 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. 2.7 COST AND BENEFIT SUMARY Include a summary of grant request and your project'es total costs and benefits below Grant Costs (Summary of funds requested) 2.7.1 Grant Funds Requested in this application. $185,000.00 2.7.2 Cash match to be provided $0.00 2.7.3 In -kind match to be provided $5,000.00 2.7.4 Other grant applications not yet approved $0.00 2.7.5 Total Grant Costs (sum of 2.7.1 through 2.7.3) $190,000.00 Project Costs $ Benefits AEA13-006 Grant Application Page 5 of 23 713/12012 Renewable Energy Fund Round 6 :'�•W A I A_ , Grant Application ENERGY M-0RIITY (Summary of total project costs including work to Mate and future cost estimates to get to a fully operational project) 2.7.6 Total Project Cost (Summary from Cost Worksheet $190,000.00 including estimates through construction) 2.7.7 Estimated Direct Financial Benefit (Savings) $129,933.00 2.7.8 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 your application (Section 5.) AEA13-006 Grant Application Page 6 of 23 7/31/2012 Renewable Energy Fund Round 6 M• .. .+ 'UTT Grant Application + ENERGYAUTHORMY +I 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). 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. Marsh Creek LLC will manage the project. John Lyons will be the Project Manager See attached resume for John Lyons and the Marsh Creek project team. 3.2 Project Schedule and Milestones Please fill out the schedule below. Be sure to identify key tasks and decision points in in your project along with estimated start and end dates for each of the milestones and tasks. Please clearly identify the beginning and ending of all phases of your proposed project. Please fill out form provided below. You may add additional rows as needed Start End Milestones Tasks Date Date Automatic diesel . Starting and stopping diesel gensets as dispatch: required to reliably meet the net electric load (the primary load minus the renewable contribution). • Partial completion of task identified by code review or model simulation. • Commissioning and verification to completed in task'System Verification' and all travel costs accounted for in this task. 7/1113 10121 /13 Automatic inverter • Starting and stopping the grid -forming dispatch. inverter as required to go in and out of diesel -off mode. The system shall run diesel -off when there is, on average, sufficient wind power to completely cover the primary electric load • Partial completion of task identified by code review or model simulation. • Commissioning and verification to complete in task'System Verification' and all travel costs accounted for in this task. 7/1/13 10/21/13 Automatic feeder . Automating the feeder breaker(s) control. reclosure as part of an automatic power plant restart procedure after an outage. • Partial completion of task identified by code review or model simulation. • Commissioning and verification to be completed in task'System Verification' and all travel costs accounted for in this task. 711/13 10121 /13 AEA13-006 Grant Application Page 7 of 23 7131/2012 Renewable Energy Fund Round 6 . I"On_; n I n.4 _1-" _, Grant Application v Y� . ENERGY AUTHORITY Data logging to a local . Automatically log system performance database: data to an on -board (part of the HSSC) data base Average, maximum, and minimum values shall be logged at each • Partial completion of task identified by code review or model simulation. + Commissioning and verification to be completed in task'System Verification' and all travel costs accounted for in this task. 711/13 10/21/13 Fault logs for each . Generating and storing a log of all faults component: that occur on each component, viewable either as a master log for the entire system or as an individual log for each component. • Partial completion of task identified by code review or model simulation. • Commissioning and verification to be completed in task'System Verification' and all travel costs accounted for in this task. 7/1113 10/21 /13 Data log exporting: a Exporting logged data from the local database to spreadsheet readable files • Partial completion of task identified by code review or model simulation. • Commissioning and verification to be completed in task'System Verification' and all travel costs accounted for in this task. 711113 10/21 /13 Automatic report . Automatically generate and email generation: daily/weekly/monthly power and system performance reports to satisfy the requirements of various stakeholders (e.g. the monthly PCE report). • Partial completion of task identified by code review or model simulation. • Commissioning and verification to be completed in task'System Verification' and all travel costs accounted for in this task. 7/1/13 10/21/13 Fault notification: • Automatically notify the appropriate personnel via email and text message whenever a fault occurs on one of the power system components • Partial completion of task identified by code review or model simulation. • Commissioning and verification to complete in task'System Verification' and all travel costs accounted for in this task. 711/13 10/2113 Public portal: . Provide a publicly viewable web page to allow project stakeholders and interested members of the general public to get a real time overview of system performance without compromising the performance or security of the power system. • Partial completion of task identified by code review or model simulation. 1 711113 1 10/21/13 AEA13-006 Grant Application Page 8 of 23 7/31/2012 Renewable Energy Fund Round 6 ;M it — Grant Application � ENERGY �o • Commissioning and verification to complete in task'System Verification' and all travel costs accounted for in this task. System Verification • Travel to site for 6 Days of commissioning work. (Travel for Sd party engineer, Sustainable Power representative, and Project Manager). • Final commissioning of all equipment and milestones listed in grant paperwork. 10/15/13 10/21/13 Final Acceptance Commissioning Reporting • Provide AEA and Kokhanok Village Council with final commissioning reports and updates to Wind System OEM 10/22/13 10/31/13 *AII milestones to be considered Partially Completed or Fully Completed when signed off on by AEA Project Manager, Yd party validation (Vladimir Leonov), Project Manager, and re resentative from Kokhanok Villa a Council. AEA13-006 Grant Application Page 9 of 23 713112012 Renewable Energy Fund Round 6 A I A-rmy Grant Application ENrAurl�ioRmr 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 Lake and Peninsula Borough contracted Marsh Creek LLC to design and build the existing wind -diesel project. Marsh Creek subcontractor, Sustainable Power Systems LLC (formerly Sustainable Automation), has done a tremendous amount of research and development on the Hybrid System Supervisory Controller. Although the company initially underestimated the amount of time and manpower necessary to complete the final programming, we are confident they have the technical ability to finish the job. The Kokhanok Village Council intends to continue this project under a contract with Marsh Creek LLC and its subcontractor, Sustainable Power Systems LLC. 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. Marsh Creek LLC personnel will assist the Kokhanok Village Council to provide up to date reporting on the status of the project. An alternative contact person would be: Maggie McKay 2000 E.881h Avenue Anchorage, AK 99507 907.258.0050 Maacie.mckay[a)marshcreekllc.com 3.5 Project Risk Discuss potential problems and how you would address them. The most obvious problem would be that Sustainable Power Systems LLC will once again underestimate the number of hours necessary to complete programming of the Hybrid System Supervisory Controller. A performance based contract with third party verifiable performance milestones will be used to prevent this from happening. No funding advances will be provided — payment will only be made for performance. AEA13-006 Grant Application Page 10 of 23 713//2012 Renewable Energy Fund Round 6 :<1Ift Si;� Grant Application _`ENERGYAUTHORfrY 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 foi an advanced phase is warranted. 4.1 Proposed Energy Resource Describe the potential extenttamount 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. According to the Wind Resource Report prepared by Doug Vaught for the Kokhanok Village Council in 2007: The wind resource in Kokhanok is superb by any measure — the winds are steady, smooth, low shear, highly directional and high power class. The selected wind site, near the tip of the spit of land jutting into Lake Riamna is ideal for wind turbine installations... The wind turbines have performed quite well since installation in October of 2010. In fact, there is an effort in progress to increase the rating of the Vestas V-17 wind turbines from 90 kW to 105 kW based on their performance in Kokhanok. Wood is also plentiful in the area. A project is in progress to exploit the beetle kill spruce for heating purposes in a Garne Boiler. Please see O&M Manual on disk included with this application 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. (1) John Deere 4045 65 kW diesel generator 14,993 hours of operation (1) John Deere 6068 110 kW diesel generator 44,717 hours of operation (1) John Deere 6081 225 kW diesel generator 4,529 hours of operation (1) John Deere 4045 117 kW diesel generator 4,137 hours of operation (2) 90 kW Vestas V-17 wind turbines — Refurbished in 2010 (1) Synchronous Condenser — Installed 2010 336 hours of nominal battery storage (lead acid batteries) — Installed 2010 AEA13-006 Grant Application Page 11 of 23 713112012 Renewable Energy Fund Round 6 AW,_ A i c% „ Grant Application ENERGY� 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. Located on the south shore of Lake Iliamna, Kokhanok has a superb Class 6 wind resource with steady, low shear, highly directional winds. This project will allow the existing infrastructure to operate as originally envisioned. It will capture the full power of the wind resource and allow the diesel generators to rest for significant periods of time as the wind carries the load. Decreased run time will reduce required oil changes and overhauls, save wear and tear on equipment and reduce maintenance expenses for the utility. Importing diesel to Kokhanok is difficult and often requires flying in fuel. A fully functional high penetration wind -diesel system will reduce the number of these very expensive flights. 4.2.3 Existing Energy Market Discuss existing energy use and its market. Discuss impacts your project may have on energy customers. In 2011 just over 500,000 kWhs were produced by the wind -diesel system and just over 413,000 kWhs were sold. Excess kWhs went into the thermal tank to displace diesel heat at the school. The school saved 1,229 gallons of diesel over their 2010 usage. The electric utility displaced only 230 gallons of fuel over 2010. The uneven savings is a direct result of not being able to turn the diesel generators off. Although the school district saved money on fuel, the electric utility saw little savings. The rate for customers has not changed as a result. Programming and commissioning the Hybrid System Supervisory Controller is the final piece to make the Kokhanok system truly high penetration. This critical piece will enable the electric utility to save significant fuel and lower customer rates. Although the current structure of the State of Alaska's PCE system will then counter that effect by lowering the subsidy to residential and community facility rate -payers, the commercial customers will enjoy a reduced rate for power. The Kokhanok Council expects lowering the cost of doing business will benefit everyone in the community. As the recipient of recovered heat from the hybrid system, the school stands to save on both heat and power. These savings can be used to improve classrooms, purchase additional materials or in other ways enrich the education of Kokhanok's youth. AEA13-006 Grant Application Page 12 of 23 713112012 Renewable Energy Fund Round 6 � n �_�►, Grant Application a ENERGYAUfHORrrY 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 • Basic integration concept • Delivery methods Please see attached original equipment manual on CD (includes a full set of drawings and all relevant information). 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 are no land ownership issues. The system is already installed and operating. This grant is to be used exclusively to complete the programming for existing equipment. 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 system has been installed since 2010. All permitting issues have been successfully addressed. 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 The system has been installed since 2010. All environmental issues have been successfully addressed. AEA13-006 Grant Application Page 13 of 23 7/3//2012 Renewable Energy Fund Round 6 : 10 AI nQ Grant Application OW_ ENERUY u yoRrrY �? 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 Cost to date is $2.465M. The projected cost for this final phase is $190,000. We are requesting $185,000 for this grant per consultant's estimate. The Kokhanok Village Council will provide $5,000 of in -kind funds. There are no other funding sources being used for this phase. The only projected cost for this project is this final phase — all other costs cited are actual costs. 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-) In 2009 the RCA approved utility expenses of $9,586 for generation plant maintenance. In 2011 the RCA approved $10,550 in maintenance expenses. The personnel budget did not change between 2009 and 2011. The take and Pen Borough negotiated a maintenance contract with Marsh Creek LLC to oversee the Kokhanok wind plant for 5 years following installation of the turbines. The Borough has secured funding for all 5 years. The contract includes training for local personnel to maintain the equipment. Local capacity to maintain the system will help keep O&M costs to a minimum after the funded 5 year contract with Marsh Creek LLC has ended. 4.4.3 Power Purchase/Sale The power purchase/sale information should include the following: Identification of s AEA13-006 Grant Application Page 14 of 23 7/3//2012 Renewable Energy Fund Round 6 r.M_, A i AIP-lu ,!L Grant Application I = i=NERGYAUTHORrrY • Potential power purchase/sales price - at a minimum indicate a price range j • Proposed rate of return from grant -funded Droiect The market for Kokhanok's wind -diesel energy is limited to the community of Kokhanok. The Kokhanok Village Council Electric Utility has a five year contract to sell the green attributes of its wind energy, Renewable Energy Credits/RECS, to Native Energy for $2.00/MWh produced annually. If the market price of RECS goes over $4.00/MWh in a given year, Native Energy will split the additional monies with Kokhanok. If a carbon tax is enacted in the future, the price of RECS will rise significantly. The Council chose to make a short term contract with Native Energy —just in case the price does rise. Currently, the per kWh cost for all customers except the largest user, the L&P School District, is $.901kWh. LPSD paid $.6175/kWh in August of 2012. The sale price has been kept high due to the volatile cost of fuel being flown into the village and the incomplete state of the wind -diesel system. The utility is building a Repairs and Replacement account to better prepare for the future. The cost of power will be lowered once the hybrid system is fully commissioned and fuel use drops accordingly. If the system lives up to just the minimum of 30% predicted fuel displacement we plan to initially decrease the rate to $.75/kWh. (This rate was calculated using a fuel cost of $7/gallon — the current price is $6.20/gallon.) This rate decrease coupled with decreased fuel usage will lower the PCE rate. Under the current formula, we estimate this will result in a $.01/kWh difference between what residential and community facility ratepayers are currently charged after PCE. The rate will, however, be a significant reduction for commercial customers and the school. The rates will be reviewed annually. It is hoped that performance of the high penetration system will warrant further rate reductions. The Council is conservative in its predictions, but very hopeful there will be further rate reductions. The community of Kokhanok as a whole wins big by reducing the need to import fuel. 4.4.4 Project Cost Worksheet Complete the cost worksheet form which provides summary information that will be considered in evaluating the project. rtease.pu out tne.jorm proviaea below Renewable Energy Source The Applicant should demonstrate that the renewable energy resource is available on a sustainable basis. Annual average resource availability 7.84 m/s Unit depends on protect type (e g. windspeed. hydropower output biomasss fuel) Existing Energy Generation and Usage AEA13-006 Grant Application Page 15 of 23 713112012 Renewable Energy Fund Round 6 "AIIIIIIIIIII11T A Grant Application _ � �'�iv1`' MWZ: ENERGY AUTHORITY a) Basic configuration (if system is part of the Railbelt' grid, leave this section blank) Number of generatorslboilers/other (4) Diesel Generators (2) Wind Turbine Generators ii Rated capacity of generatorslboilers/other Diesels: 65 kW, 110 kW, 225 kW, 117 kW Wind Turbine Generators. 2 at 90 kW each iii Generator/boilers/other type John Deere Diesel Generators Vestas V-17 Wind Turbine Generators (Refurbished) iv Age of generators/boilers/other Vestas V-17 Wind Turbine Generators were refurbished by Halus just prior to installation in 2010. Hours of Operation: 65 kW Diesel 14,993 110 kW Diesel 44,717 225 kW Diesel 4,529 117 kW Diesel 4,137 v Efficiency of generators/boilers/other The generation efficiency of the hybrid system in 2011 averaged 12.9 kWhs/gallon of fuel. b) Annual O&M cost (if system is part of the Railbelt grid, leave this section blank) i Annual O&M cost for labor $32,288 (2011) ii Annual O&M cost for non -labor $10,550 (2011) 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] 500,173 kWh (2011) ii Fuelusage Diesel [gal] 39,100 (2011) Other ill Peak Load 106 kW iv Average Load 65 kW v Minimum Load 32 kW vi. Efficiency 12.99 kWh/gallon (2011) vii. Future trends Fuel efficiency will increase with integration of the battery bank. d) Annual heating fuel usage (fill as applicable) Diesel [gal or MMBtla] Electricity [kW hl Propane [gal or MMBtu] iv Coal (tons or MMBtu] v Wood [cords green tons, dry tons] vi. Other 1 The Railbeit 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 16 of 23 7/31/2012 Renewable Energy Fund Round 6« Grant Application ww—tNEFWAUTHORITY Proposed System Design Capacity and Fuel Usage (Include any projections for continued use of non-renewable fuels) a) Proposed renewable capacity 180 kW Wind Power (Wind, Hydro, Biomass, other) [kW or MMBtulhr] b) Proposed annual electricity or heat production (fill in as applicable) i Electricity [kWh 400,000 kWh ii Heat. [MMBtu] c) Proposed annual fuel usage (fill in as applicable) Propane [gal or MMBtuI n Coal [tans or MMBtu] iii Wood [cords, green tons, dry tons] iv Other 27,370 gallons of diesel (2011) 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 i Electricity 11,730 gallons ii Heat 8,000 gallons iii. Transportation b) Current price of displaced fuel c) Other economic benefits d) Alaska public benefits IPower Purchase/Sales Price $2,275,000 $190,000 (to complete) $43,000 (personnel + non -fuel) (2011) $169,694 ($6.20 x 27,370) $122, 326 $7,607 in fuel savings for school heat (2011) a) Price for power purchase/sale $.75/kWh (initial rate reduction — then evaluate future reductions based on actual system performance) Project Analysis a) Basic Economic Analysis AEA13-006 Grant Application Page 17 of 23 7/3//2012 Renewable Energy Fund Round 6 ,491�i A I A_ Grant Application � _; ENERGYAUTMORITY Project benefit/cost ratio $122,3261$190,000 = .644 Payback (years) 1.6 years payback on this grant. 4.4.5 Proposed Biomass System Information Please address the following items, if know. (For Biomass Projects Only) SECTION 5— PROJECT BENEFIT Explain the economic and public benepts 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 energv 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 a tax credits) • Potential additional annual revenue streams (i a 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 A conservative estimate of 30% reduction in current fuel use at the diesel plant would put annual savings at 11,730 gallons of diesel. Over the projected 20 year lifetime of the system that equates to 227,400 gallons of diesel. The projected fuel savings for the school is 8,000 gallons of diesel displaced for heating. That is an additional 160,000 gallons of diesel which will not need to be imported to Kokhanok. The anticipated annual revenue is $.751kWh with annual sales over 413,000 kWh for a total of $309,750 in annual revenue. Tax credits are not available for this project. With the existing contract with Native Energy, renewable energy credits for 400,000 kwhs annual wind energy production would net the utility an additional $8,000. Non -economic benefits to Alaskans over the lifetime of the project are the obvious avoidance of fuel transport and fuel spill risks in addition to the reduction in emissions. SECTION 6— SUSTAINABILITY Discuss your plan for operating the completed protect 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 AtAIJ-uue urant Application Page 18 of 23 713112012 Renewable Energy Fund Round 6 :�� n i►r� Grant Application ENERGYAUTHORMY The Kokhanok Electric Utility has been certificated since 2002 and has done an excellent job of keeping the lights on. No change in this business structure are proposed. The Operations and Maintenance agreement with Lake and Peninsula Borough will be in effect from 1/1/11 through 12/31/16. This agreement covers the wind plant and integration. Training for local operators is also included in this agreement and will mitigate high costs following termination. We don't foresee any operational issues that can't be dealt with. 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 nave been able to meet the requirements of previous grants This project has all hardware successfully installed and operating. Funding from a USDA/RUS grant paid for all hardware. This proposal is for funding the final programming and commissioning of the Hybrid System Supervisory Controls. 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 project. There is nothing but support for this project in Kokhanok — maybe some impatience over how long it's taking to complete — but still only support. 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 Provide a narrative summary regarding funding sources and your financial commitment to the project. The expected cost of this final piece for the Kokhanok High Penetration System is $190,000. To date $2,465,000 in grant funds and local contributions have been spent on this project. The Lake and Peninsula Borough has a separate O&M contract with Marsh Creek LLC for maintenance on the wind system. This contract is in place until 12/31/2016. AEA13-006 Grant Application Page 19 of 23 7/31/2012 Renewable Energy Fund Round 6 - mm .. •+ _ Grant Application I+- :_: ENERGYAUTHOi31TY Applications should include a separate worksheet for each project phase that was identified in section 2.3.2 of this application, (Reconnaissance, Feasibility, Conceptual Design, Design and Permitting, and Construction). 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 emading the Grant Administrator, Shawn Calfa, at scalfa@aidea.org. Milestone or Task Anticipated Completion Date RE- Fund Grant Funds Grantee Matching Funds Source of Matching Funds. Cash/In- kind/Federal GrantslOther state Grantslother TOTALS Automatic diesel dispatch Automatic inverter dispatch 10/21/13 10/21/13 $21,900 $21,900 $450 $450 In -kind In -kind $22,350 $22,350 Automatic feeder control 10/21/13 $19,830 $450 In -kind $20,280 Data logging to a local database 10/21/13 $20,555 $450 in -kind $21,005 Fault to s for each component 10/21/13 $20,555 $450 In -kind $21,005 Data log exporting 1o121113 $8,773 $450 in -kind $9,223 Automatic report generation 10/21/13 $8,772 $450 In -kind $9,222 Fault notification 10/21/13 $9235 $450 In -kind $9,685 Public portal System verification 10/21/13 10/21/133 $9235 $33,585 $450 $500 In -kind In -kind $9,685 $34,085 Final Acceptance Commissionin 10/31/13 $10,660 $450 in -kind $11,110 $185,000 $5,000 $190,000 Project Milestones that should be addressed in Budget Proposal 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,2. 3. Identification of Permit documents and environmental land and regulatory applications (as needed) 3. Contractor/vendor analysis issues, selection and award 4. Preliminarydesign g 4. Permitting and g 3. Final environmenta! 4. Construction Phases AEA13-006 Grant Application Page 20 of 23 7/31/2012 Renewable Energy Fund Round 6 1AW A A-M", -_ Grant Application I =- ENERGYAlnrloRrn�;��`� analysis and cost environmental assessment and — 5. Cost of energyand analysis mitigation plans (as needed) Each protect will have market analysis 5. Detailed analysis of unique construction 6. Simple economic existing and future 4. Resolution of phases, limitations, analysis energy costs and land use, right of and schedule markets way issues constraints which 7. Final report and 6. Assessment of 5. Permit approvals should be identified recommendations alternatives by the grantee 7. Conceptual design 6. Final system design , 5Integration and analysis and cost testing estimate Engineers cost 6. Decommissioning old 8. Detailed economic estimate systems and financial 8• Updated economic and 7. Final Acceptance, analysis financial analysis Commissioning and 9, Conceptual Start-up business and g, Negotiated powersafes 8• Operations Reporting operations plans agreements with 10. Final report and approved rates recommendations 10. Final business and operational plan AEA13-006 Grant Application Page 21 of 23 713112012 Renewable Energy Fund Round 6 n I A_cN-rr Grant Application t = .. ENERGYAUTfio � SECTION 10 -- AUTHORIZED SIGNERS FORM Community/Grantee Name: Kokhanok Village Date: 10/8/12 Authorized Grant Signer(s): Printed Name Title Term Signature Nathan Hill Kokhanok Village Administrator NA I authorize the above person(s) to sign Grant Documents: (Highest ranking organ izationlcommunitylmunicipal official) Printed Name Title Term Signature Terry Mann Tribal Council President ,Zo l+ Grantee Contact Information: Mailing Address: P.O. Box 1007, Kokhanok, AK 99606 Phone Number: 907-282-2202 Fax Number: 907-282-2264 E-mail Address: Kokhanok—Vc@yahoo.com Federal Tax ID #: 92-0071118 Please submit an updated form whenever there is a change to the above information. AEA13-006 Grant Application Page 22 of 23 713112012 Renewable Energy Fund Round 6 114M A A Grant Application ENERGY AUTHORI'y 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 Nathan Hill Signature Titi Tfibal Council Administrator Date 10/8/2012 AEA13-006 Grant Application Page 23 of 23 713/12012 KOKHANOK TRIBAL COUNCIL P.O. Box 1007 KOKHANOK, ALASAK 99606 907 282-2202-telephone 1907 282.2264-facsmile Kokhanok_vc@yahoo.com RESOLUTION # 2012-10-08 A RESOLUTION OF THE KOKHANOK VILLAGE COUNCIL SUPPORTING THE SUBMITTAL OF A RENEWABLE ENERGY PROJECT GRANT APPLICATION TO COMPLETE PROGRAMMING AND COMMISSIONING OF THE HYBRID SYSTEM SUPERVISORY CONTROLS ON OUR HIGH PENETRATION WIND -DIESEL SYSTEM TO BE SUBMITTED TO THE ALASKA RENEWABLE ENERGY FUND ROUND 6 GRANT PROGRAM. WHEREAS, the Kokhanok Village Council is a federally recognized Tribe and is the duly authorized governing entity to conduct business on behalf of the village, and WHEREAS, our community has long experienced volatile rises in diesel fuel costs, and WHEREAS, diesel fuel costs contribute significantly to the cost of providing power and heat to our village, and WHEREAS, reducing the cost of heat and power will decrease the cost of living in our village, thereby encouraging our families to remain, and WHEREAS, the successful installation of two (2) Vestas V-17 wind turbines in Kokhanok have proven that wind energy can consistently produce power in our community, and WHEREAS, the Council wishes to see this hybrid system fully commissioned and able to operate with diesel generators off, saving the maximum amount of imported fuel. NOW, THEREFORE BE IT RESOLVED that the Kokhanok Village Council will submit a grant application to complete the programming and commissioning of the Hybrid System Supervisory Controls for our High Penetration Wind -Diesel System under Round 6 of the Renewable Energy Fund request for proposal process. Adopted on this day October 8, 2012, with a vote of (4) yes, (0) no, (1) abstention. ATTEST: '"� D v 1� 1 a- pS - La r 2 President Date Kokhanok Village Council KOKHANOK TRIBAL COUNCIL P.O. Box 1007 KOKHANOK, ALASAK 99606 907 282-22024elephone 1907 282-2264-facsmile Kokhanok_vc@yahoo.com October 8, 2012 Alaska Energy Authority 813 West Northern Lights Boulevard Anchorage, AK 99503 Re: Kokhanok Village Council Application for the Renewable Energy Fund Round 6 Dear Project Reviewer, The Kokhanok Village is writing to express our support for Kokhanok's application to the Renewable Energy Fund Round 6. The community's approach to projects, both in the energy field and elsewhere, has been one of consensus followed by success. Kokhanok has an excellent track record on renewable energy projects including the successful installation and operation of two (2) Vestas V-17 wind turbines. Kokhanok's proposal for funding to complete the programming and commissioning ofthe Hybrid System Supenisory Controls for their High Penetration Wind -Diesel System is the final piece in getting this cutting edge system to work as envisioned. Alternative energy has a vital role in the sustainability of all rural communities, especially with fuel costs nearing seven dollars a gallon. Again, the Lake and Peninsula Borough is in full support of Kokhanok's application. Sincerely, vvz- ,s KOKHANOK TRIBAL COUNCIL P.O. Box 1007 KOKHANOK, ALASAK 99606 907 282-2202-telephone 1907 282-2264-facsmile Kokhanok—vc@yahoo.com October 8, 2012 Renewable Energy Grant Fund Alaska Energy Authority 813 West Northern Lights Blvd. Anchorage, AK 99503 Re: Kokhanok Village Council- Renewable Energy Fund Grant Application - Letter of Commitment Application Review Committee: Kokhanok Village Council d/b/a Kokhanok Electric Company is pleased to submit the attached application for a Renewable Energy Fund Grant to complete the programming and commissioning of the Hybrid System Supervisory Controls for our High Penetration Wind -Diesel power system. This project is an eligible renewable energy project as defined under HB 152. Kokhanok Village Council is authorized by the Regulatory Commission of Alaska to provide power to the community of Kokhanok under Certificate of Public Convenience and Necessity, CPC&N No. 660. The attached Application documents and describes the proposed work to be completed. The total estimated cost of the work is $190,000. Kokhanok Village Council commits to this project an in -kind contribution of $5,000. Kokhanok Village Council strives to keep electric costs as low a possible by maximumizing operating efficiencies and reducing operating costs. This project will provide a significant improvement toward meeting this continued goal, and will greatly benefit the community of Kokhanok, as well as other rural Alaska communities interested in integrating renewable technologies in a high penetration configuration. Kokhanok Village Council welcomes and fully supports this opportunity to work with the Alaska Energy Authority to implement this innovative project, and requests the Review Committee carefully review the merits of this application. We welcome your review and evaluation of our proposal, and look forward to working with you on this project. If you have any questions about this project, please feel free to contact me at (907) 282-2202. Sincerely, Kokhanok tillage Council Terry D. Mann President E Ve9ulatory Commission ofqlas/, Certificate of Public Convenience and Necessity No. 660 Having found that the grantee of this certificate is fit, willing, and able to provide the utility services applied for and that such services -are required for the convenience and necessity of the public, the Regulatory Commission of Alaska, pursuant to the authority vested in it by AS 42.05, hereby issues this certificate of Public Convenience and Necessity to KOKHANOK ELECTRIC UTILITIES authorizing it to operate a public utility, as defined by AS 42.05.990(4) (A) for the purpose offurnishing ELECTRIC SERVICE This Cert fcate is issued under, and subject to, the provisions of AS 42.05 and all rules, regulations, and orders from time to time promulgated by the Commission governing the rates, charges, services, facilities, and practices of utility operations of the kind authorized herein. The specyzc nature, scope, terms, conditions, and limitations of the authority granted by this Certificate, as amended to date, are set forth in the appenarx hereto and in the following orders) of the Commission whkk by this reference, are incorporated in and made apart hereof as though fully set forth herein. Docket No. Date of Order U-88.068(1) December30, 2002 (Chronology and service area description shown on the attached Appendix A) IN WITNESS THEAEQF, the undersigned members of the Commission have executed this Certificate of Public Convenience and Necessity at Anchorage, Alaska oit this 1 i" day of January 2003. Regulatory Commission of Alaska 6 • (CHAI NO MS3idNER1