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HomeMy WebLinkAboutAEA Round 6 Hotham Peak ApplicationALASEA VfU AGE ELECTRIC COOPERATIVE, INC. September 21, 2012 Alaska Energy Authority 813 West Northern Lights Boulevard Anchorage, Alaska 99503-2495 Attn: Renewable Energy Fund Grant Program Round VI: Hotham Peak Wind Resource and Intertie Assessment Dear Review Panel: The Alaska Village Electric Cooperative, Inc. (AVEC) respectfully submits the enclosed application for grant funds available through the Renewable Energy Fund Grant Program. The project would involve conducting a wind resource assessment and intertie feasibility between Noorvik, Kiana, and Selawik. The study will involve putting up a meteorology (met) tower and monitoring the wind resource at Wesley Creek near the community of Noorvik for a year. The work would also involve conducting a geotechnical study to determine ground conditions. The intertie portion of the assessment would consider intertie cost, routes, and the location of supporting diesel plants and controls to serve Noorvik, Kiana and Selawik. AVEC is seeking $207,100 from AEA under this proposal and would provide a cash match of $10,900 for this work. Please do not hesitate to contact Mr. Petrie of my staff if you have questions. Sincerely, Meera Kohler President and CEO cc: Brent Petrie, AVEC enclosures 4831 Eagle Street . Anchorage, Alaska 99503-7497 • Phone (907) 561-1818 . In State (800) 478-1818 • Fax (907) 563-9304 Renewable Energy Fund Round 6 GOOD Grant Application i®ENERGY AUTHOR" 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: hftp://www.akenergyauthority.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 scalfaC@-aidea.ora. • 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 26 7/3/2011 Renewable Energy Fund Round 6 400D 4111111117) Grant Application lif © ENERGY AUTHORrrY SECTION 1 —APPLICANT INFORMATION Name (Name of utility, IPP, orgovemment entity submitting proposal) Alaska Village Electric Cooperative Type of Entity: Not -for -profit corporation Fiscal Year End December 31 Utility Tax to M 92-0035763 Tax Status: —For-profit or non-profit ( check one) Mailing Address Physical Address 4831 Eagle Street Same Anchorage, AK 99503 Telephone Fax Email (907) 565-5358 (907) 561-2388 bpetrie@avec.org 1.1 APPLICANT POINT OF CONTACT / GRANTS MANAGER Name Title Brent Petrie Manager, Community Development & Key Accounts Mailing Address 4831 Eagle Street, Anchorage, AK 99503 Telephone Fax Email (907) 565-5358 (907) 561-2388 bpetrie@avec.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 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 26 7/3H2012 Renewable Energy Fund Round 6 � QAp Grant Application i©ENERGY AtITHORrrY SECTION 2 — PROJECT SUMMARY This is intended to be no more than a 1-2 page overview of your project. 2.1 Proiect Title Hotham Peak Wind Resource and Intertie Assessment 2.2 Project Location — Include the physical location of your project and name(s) of the community or communities that will benefit from your project in the subsections below. The communities impacted by this project are Noorvik, Kiana, and Selawik. They are all located in Northwest Alaska. 2.2.1 Location of Project— Latitude and longitude, street address, or community name. The location of the wind resource study is Hotham Ridge, between Noorvik and Selawik, Alaska. The proposed site is approximately 8.5 miles southeast of Noorvik and between 700-800 feet in elevation. The ridge is at 66.8 North Latitude and -160.8 West Longitude. Noorvik is located at approximately 66.838330 North Latitude and-161.032780 West Longitude. (Sec. 27, T017N, R011W, Kateel River Meridian.) Selawik lies at approximately 66.603890 North Latitude and-160.006940 West Longitude, and Kiana lies at approximately 66.975000 North Latitude and-160.422780 West Longitude. 2.2.2 Community benefiting — Name(s) of the community or communities that will be the beneficiaries of the project. The intertie between Noorvik, Kiana, and Selawik would electrically connect three AVLU utilities and would be over 50 miles in length. The construction of an intertie could reduce the cost of energy in the community by equalizing the cost of diesel to that of the community with the cheapest fuel: in this case, Noorvik. An intertie would also provide generation support and increased reliability for the overall electrical system. The construction of an intertie would allow for installation of distributed generation at the most ideal location; in this case, Hotham Peak, which has been observed and modeled to have a superb wind resource. AEA13-006 Grant Application Page 3 of 26 7/3/i2012 Renewable Energy Fund Round 6 e00D Grant Application eMIF—)ENERGY AUTHORITY 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 all that apply) Pre -Construction Construction Reconnaissance Design and Permitting X Feasibility Construction and Commissioning X Conceptual Design 2.4 PROJECT DESCRIPTION Provide a brief one paragraph description of your proposed project. The Northwest Arctic Borough is very large and the communities are small and isolated. Typically larger transmission systems have not been possible due to challenging construction and steep economics. Constructing an intertie is a large capital investment. The intertie between Noorvik, Kiana, and Selawik would intertie three AVEC utilities and would be over 50 miles in length. The construction of an intertie could reduce the cost of energy in the community by equalizing the cost of diesel to that of the community with the cheapest fuel: in this case, Noorvik. Additionally, an intertie would provide generation support and increased reliability for the overall electrical system. The construction of an intertie would also allow for installation of distributed generation at the most ideal location, in this case Hotham Peak which, through observations and modeling, has a superb wind resource. A greater wind resource provides the opportunity for installation of larger scale wind turbines. According to modeling completed in the 2012 Noorvik Wind -Diesel Conceptual Draft Report, the most ideal location for a larger turbine would be on the southwest slope of Hotham Ridge, between Noorvik and Selawik. See Figure 1. AEA13-006 Grant Application Page 4 of 26 7/3//2012 No., Fy f NOo(VI'.. Y. -UJH EAST Sile ✓" GO( SIC Renewable Energy Fund Round 6 molu Grant Application 400RD ENEMY AUTHOR" 2.5 PROJECT BENEFIT Briefly discuss the financial and public benefits that will result from this project, (such as reduced fuel casts, lower energy costs, etc.) The financial benefits of the project include the following: Reduced Cost of Electricity. AVEC customers in Noorvik, Kiana, and Selawik will see reduced electricity costs through the construction of an intertie in addition to the installation of a 900 kW EWT wind turbine to reduce diesel fuel consumption. With only one prime power generator along the intertie to service, repair, and replace, operations and maintenance (O&M) costs will be reduced in all communities. A preliminary HOMER analysis has been done; the analysis indicated that significant fuel savings can be achieved. The public benefits of the project include the following: • Increased Power Reliability; and • Reduced Pollution and Greenhouse Gas Emissions. Reduced air, noise and ground pollution from the diesel exhaust, power plant and tank farm fuel system, respectively. The potential of reducing pollution through wind energy is an appealing option. Other benefits to the Alaskan public will also exist. An important benefit of installing the proposed wind turbines would be to reduce the direct and indirect costs of using fossil fuels in the region. This project could help stabilize energy costs and provide long-term socio-economic benefits to village households. Locally produced, affordable energy will empower community residents and may help avert rural -to -urban migration. This project would have many environmental benefits resulting from a reduction of hydrocarbon use. These benefits include: • Reduced potential for fuel spills or contamination during transport, storage, or use (thus protecting vital water and subsistence food sources); • Improved air quality; • Decreased contribution to global climate change from fossil fuel use; and • Decreased coastal erosion due to climate change. AEA13-006 Grant Application Page 6 of 26 7/3//2012 Renewable Energy Fund Round 6 4111111111D Grant Application i©ENEFiGYAUTNOR" 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. This feasibility analysis, wind resource assessment, and conceptual design phase is estimated at $218,000: $10,900 of which is provided as an AVEC funding match, and $207,100 which is requested in grant funds. The entire capital cost of the project is estimated to be approximately $23,000,000. This project has two areas of concentration: Power Intertie and Wind Generation. Intertie The intertie between Noorvik, Kiana, and Selawik will be evaluated by looking at land use, permitting, and cost. AC and DC power transmission systems will be considered for cost estimating and O&M purposes. Wind Generation The work will involve obtaining a letter of non -objection for placement of the wind tower and geotechnical fieldwork; permitting, purchasing, transporting, and installing a met tower; studying the wind resource for one year; and conducting a geotechnical investigation to determine the soil conditions and needed engineering at the site. A conceptual design will be created based on the outcome of the met tower recordings and geotechnical investigation. 2.7 COST AND BENEFIT SUMARY Include a summary of grant request and your project's total costs and benefits below. Grant Costs (Summary of funds requested) 2.7.1 Grant Funds Requested in this application. $207,100 2.7.2 Cash match to be provided $10,900 2.7.3 In -kind match to be provided $0.00 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) $218,000 Project Costs & Benefits (Summary of total project costs including work to date and future cost estimates to get to a fully operational ro'ect 2.7.6 Total Project Cost (Summary from Cost Worksheet $23,000,000 including estimates through construction) 2.7.7 Estimated Direct Financial Benefit (Savings) $25,000,000 est. from constructed project 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 7 of 26 7/3//2012 Renewable Energy Fund Round 6 L�`, n I. AQrr- Grant Application 6 411111111117) ENERGY AUTHORITY SECTION 3 — PROJECT MANAGEMENT PLAN Describe who will be responsible for managing the project and provide a plan for successfully completing the project within the scope, schedule and budget proposed in the application. 3.1 Project Manager Tell us who will be managing the project for the Grantee and include contact information, a resume and references for the manager(s). 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. Alaska Village Electric Cooperative (Avtt.l, Tne eiecTric unity servnig ivuuivrn, o„. Selawik, will provide overall project management and oversight. Brent Petrie, Manager, Community Development and Key Accounts, will take the lead role as project manager. He has worked for Alaska Village Electric Cooperative since 1998, where he manages the development of alternatives to diesel generation for AVEC such as using hydro, wind, solar, or heat recovery. He also manages relationships with AVEC's largest customers and is the project manager for AVEC's many construction projects as an energy partner of the federally funded Denali Commission. Mr. Petrie has been employed in the energy and resource field for more than thirty years, having worked for federal and state governments as consultant, planner, and project manager. He has been a utility manager or management consultant since 1993. As General Manager of Iliamna- Newhalen-Nondalton Electric Cooperative from 1994 to 1998, he reported to a seven - member, elected board of directors, and served as project manager on its hydroelectric project development. He is an elected member of the Board of Directors of the Utility Wind Interest Group representing rural electric cooperatives, and serves on the Power Supply Task force of the National Rural Electric Cooperative Association. Mr. Petrie has a Master's Degree in Water Resource Management and a Bachelor's Degree in Geography. His resume is attached. Also involved with the project management and grant administration is Meera Kohler as the President and CEO of AVEC. Ms. Kohler has more than 30 years of experience in the Alaska electric utility industry. She was appointed Manager of Administration and Finance at Cordova Electric Cooperative in 1983, General Manager of Naknek Electric Association in 1990, and General Manager of Municipal Light & Power in Anchorage in 1997. Since May 2000, Ms. Kohler has been the President and CEO of AVEC and in this position has the ultimate grant and project responsibilities. AEA13-006 Grant Application Page 8 of 26 7/3//2012 Renewable Energy Fund Round 6 WED AJ2:112�A Grant Application ® ENERGY AUTHORFIY 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 rn,....,., sou ....a i........ . ;A A k 1.... Vn.. mnv orlrl nrirlifinnol rnwc as nPPr1Pr1 Milestones Tasks Start Date End Date Project scoping and contractor solicitation: 8/2013 Authorization to proceed Engineering contractor selection Detailed energy resource analysis 9/2013 9/2014 Obtain site control/right of way/permits 9/2013 Ship and erect met tower 10/2013 Identification of Land and Regulatory Issues 1/2014 Land and Regulatory Issues Memorandum Permitting and environmental analysis 1/2014 Environmental and Permitting Memorandum Detailed analysis of existing/future energy costs and markets 2/2014 Conceptual business and operations plans 6/2014 Conceptual Business Plan Conceptual Operating Plan Assessment of alternatives 8/2014 Geo-tech Field Work 6/2014 Draft Wind Resource Report 7/2014 Geo-tech Report 7/2014 Alternatives Assessment 7/2014 Detailed economic and financial analysis 10/2014 Dismantle met tower 9/2014 Analyze data 10/2014 Conceptual design analysis and cost estimate 11/2014 Wind Resource Report Conceptual Design and Cost Estimate Final project report and recommendations 12/2014 Final Combined Report AEA13-006 Grant Application Page 9 of 26 7/3//2012 Renewable Energy Fund Round 6 4NED Grant Application �4NEEDENERGY 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. AVEC will use a team of AVEC statt and external consultants in a project management approacn that has been used to successfully design and construct wind turbines throughout rural Alaska. AVEC staff and their role on this project includes the following: • Meera Kohler, President and Chief Executive Officer, will act as Project Executive and will maintain ultimate authority programmatically and financially. • Brent Petrie, Manager of Community Development & Key Accounts, will be the project manager. Together with his group, Brent will provide coordination of the installation of the met tower, geotechnical work, and conceptual design. The group's resources include a project coordinator, accountant, project/construction manager (PM/CM), and a community liaison. Specific duties of the project manager will include the following: o Obtaining site control/access and permits for the installation of the met tower and geotechnical work. o Selecting, coordinating, and managing the engineering consultant. o Communicating with Noorvik, Kiana, and Selawik residents to ensure that the community is informed. • Debbie Bullock, Manager of Administrative Services, will provide support in accounting, payables, financial reporting, and capitalization of assets in accordance with AEA guidelines. AVEC will employ an engineering consultant who will: • Provide wind resource assessment services including installation of the met tower, operation and maintenance of the met tower, and a draft wind resource report. • Provide Feasibility Analysis, Wind Resource Assessment, and Conceptual Design of a Noorvik, Kiana, Selawik intertie and wind generation facilities in the vicinity of Hotham Peak. • Provide business and operational models for Public/Private Partnership (PPP) relationship. • Supervise geotechnical investigation and draft the geotechnical report. AEA13-006 Grant Application Page 10 of 26 713H2012 Renewable Energy Fund Round 6 i)� Grant Application i E) ENERGY AUTHORITY 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. AVEC will assign a project manager to the project who will compile periodic progress reports for use by the Alaska Energy Authority. Weekly and monthly project coordination meetings will be held with the project team to track progress and address issues as they arise. Meera Kohler, AVEC's President and CEO, may be contacted as an alternative manager. 3.5 Project Risk Discuss potential problems and how you would address them. Site Control/Access and Permitting. In the NANA Region Strategic tnergy Nlan, community members expressed support for investigating the potential for wind power. It is expected that the community would support erection of the met tower. Consultation with the U.S. Fish and Wildlife Service would be conducted to comply with the Endangered Species Act. AVEC would work openly with the agency, and conduct studies as appropriate. Weather. Weather could delay geotechnical field work; however, an experienced consultant, familiar with Alaskan weather conditions, will be selected. It is unlikely that a delay in the total project schedule would occur if the field work is delayed. The met tower will be installed to withstand Hotham Peak's winter weather conditions. The met tower will be monitored to ensure the met tower is up and functioning. Logistics. Transport of the met tower to Hotham Peak will be challenging. There is good barge access to the community of Noorvik, but transporting the tower to Hotham Peak will take planning with which AVEC is familiar. SECTION 4 — PROJECT DESCRIPTION AND TASKS • The level of information will vary according to phase(s) of the project you propose to undertake with grant funds. • If some work has already been completed on your project and you are requesting funding for an advanced phase, submit information sufficient to demonstrate that the preceding phases are satisfied and funding for an advanced phase is warranted. 4.1 Proposed Energy Resource Describe the potential extent/amount of the energy resource that is available. Discuss the pros and cons of your proposed energy resource vs. other alternatives that may be available for the market to be served by your project. For pre -construction applications, describe the resource to the extent known. For design and permitting or construction projects, please provide feasibility documents, design documents, and permitting documents (if applicable) as attachments to this application. There are numerous ways to extrapolate the expectea annual average winu ,Pvcu a. L,lu Hotham Peak site. One method is through utilizing the high resolution wind map produced by AWS True Wind. Figure 2 reveals that the southwestern slope of the Ridge is a Class 3 wind AEA13-006 Grant Application Page 11 of 26 713112012 Renewable Energy Fund Round 6 400D Grant Application i�ENIW AUTHORMY resource. The area also benefits from two wind studies completed in Noorvik. The wind data from these studies can be scaled up to a Class 3 mean annual wind speed of 6.4 m/s. This data can be used to predict the turbine output of a wind turbine located on that ridge. It should be noted that any estimations of wind speed is arbitrary and is merely an 'educated guess' based on modeling. WP Class 1 WP Class 3 WP Class 2 By zooming in at the Hotham Peak site, Figure 3, it is apparent that there exists a large area to consider for turbine placement. Further modeling and analysis, including installation of a met tower, would provide needed insight on site determination. AEA13-006 Grant Application Page 12 of 26 7/3//2012 Renewable Energy Fund Round 6 Previous WASP studies, completed by Doug Vaught of V3 Energy, confirm the higher quality wind resource on the ridge. A study is underway to model the resource based upon the two previous met tower installations. Preliminary results from this study show an annual wind speed of 6.98 meters per second (at 33.5 meters) and a power density of 663 watts per meters squared. With WASP having more accurate data for analysis, this wind speed is used for the HOMER calculations. 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. This study will evaluate electrically connecting the three communities of Noorvik, Kiana, and Selawik. In order to provide some detail on system infrastructure, Noorvik (being physically closer to Hotham Peak) will be examined in more detail. The Noorvik power plant is currently equipped with two peak load generator sets capable of individually meeting the current peak load requirements: a relatively high -efficiency Cummins KTA19G4 with step timing control, and a relatively high -efficiency 1800 RPM MTU 12V2000. A third generator is a state-of-the-art, electronically controlled 1800 RPM Detroit Diesel Series 60. The installation of the higher -capacity MTU 12V2000 generator set inside one of the existing fireproof engine -generator modules has also been completed. AEA13-006 Grant Application Page 13 of 26 7/3/12012 Renewable Energy Fund Round 6 GOOD dEND r,rant Annliration �GUENDENERGY AUTHORITY Engine Mfg Engine Generator Generator Year of Set Model Model Mfg Rating Detroit 12V2000 Kohler 750ROZD4 2001 710 Diesel/MTU Cummins KTA19-G4 Martin MCD-500 1998 499 Machinery Detroit Diesel Series 60 Stramford HC1504C1 363 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 communities of Noorvik, Kiana, and Selawik each have a local power plant that is owned and operated by AVEC. Currently, there is no road or electrical infrastructure connecting these three villages. This has led to each community being dependent on the local cost and availability of fuel. In addition, any distributed wind project must be located at or very near the community in order to reduce the necessary cost of a line extension to the potential wind site. In the area of these three communities, Hotham Peak appears to have a valid wind resource which could offset large amounts of fuel if a larger scale wind turbine was installed to capture the wind. However, a large turbine must have a larger load to absorb the generated electricity. Constructing an intertie can create this larger load. One community would maintain the power plant, fuel tanks, and integration equipment. The other two communities would maintain a backup power plant system. 4.2.3 Existing Energy Market Discuss existing energy use and its market. Discuss impacts your project may have on energy customers. The combined electrical loads for all three communities can oe caicuiatea usuig Me Hld�Kd Village Load Calculator. According to 2011 PCE data, Selawik has a population of 846 with 16 commercial users. Kiana has a population of 383 people with 15 commercial consumers and Noorvik has a population of 642 with 9 commercial consumers. This computes to a total consumption of 5,335,229 kWh per year with an average load of 609 kW. The intertie will serve to reduce the cost of electricity to the end users. AEA13-006 Grant Application Page 14 of 26 7/3//2012 Renewable Energy Fund Round 6 AQ1 � vrant Application 9 GENIE) ENERGY AUTHORrry 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 There are numerous large scale wind turbines currently being installed in Alaska including the GE 1.5 MW turbine, the 2.05 MW RePower turbine, and the 900 kW EWT turbine (recently installed in Kotzebue, Alaska). In order to create regional economies of scale for maintenance and operation, the EWT 900 kW would be an ideal turbine to consider. A 900 kW turbine, without any curtailment, would produce 3,013282 kWh per year with a 38.2% capacity factor (Figure 4). There would be excess electricity that would need to be taken into consideration, especially during the summer. Figure 4: Wind Power Production (Blue) and Intertie Load (Blue) Alternatively, the turbine could be capped to 600 kW to avoid any excess electricity as seen in Figure 5. This would limit the wind power output to 2,419,679 kWh per year having a capacity factor of 30.7%. AEA13-006 Grant Application Page 15 of 26 7/3//2012 Renewable Energy Fund Round 6 ©� Figure 5: Wind Power Production 600 kW (Green) and Intertie Load (Blue) 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. The final location of the met tower, geotechnical work and routing of the intertie will be determined during this study. 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 U.S. Fish and Wildlife Service. Consultation with the U.S. Fish and Wildlife Service, in compliance with the Endangered Species Act, will be required to install the met tower. AVEC will work with the agency to ensure that the requirements of the Act are met, while allowing for the success of the project. U.S. Army Corps of Engineers (USACE) Section 404 (Wetlands) Permit. A U.S. Army Corps of Engineers Wetlands Permit may be needed for the geotechnical work. The Corps has a "Nationwide Permit" for survey work, including geotechnical field work. This permit usually takes no more than three weeks to obtain. Since a Corps' Nationwide Permit exists, a State of Alaska Department of Natural Resources, Division of Coastal and Ocean Management Coastal Project Questionnaire and Enforceable Policies Consistency Determination are not needed. 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 AEA13-006 Grant Application Page 16 of 26 ii3iieu-I z Renewable Energy Fund Round 6 409L, oL e=QJ& A . /4,� k. Grant Application I f>tJ ENERGY AUTHORITY • Archaeological and historical resources • Land development constraints • Telecommunications interference • Aviation considerations • Visual, aesthetics impacts • Identifv and discuss other potential barr Threatened and Endangered Species. The purpose of this work is to gather background information to plan for future wind turbines and a renewable energy transmission line/intertie. A met tower will be installed, and geotechnical field work will be completed. As stated above, compliance with the Endangered Species Act will be needed. Land Development Constraints. AVEC will obtain permission to place the met tower and conduct geotechnical fieldwork from the land owner as a part of this project. The community has supported this project in the past, and it is not expected that a right of entry will problematic. Further work to obtain a long term lease will be needed if the study finds that the wind turbines are feasible. 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 An economic analysis is premature at this point in the assessment. However, 1 EWT would contribute 38% of the overall load of all three communities. This equates to a diesel fuel offset of 178,130 gallons per year. AVEC plans to conduct a Feasibility Analysis, Wind Resource Assessment, and Conceptual Design to assess the possibility of using wind power on Hotham Peak via transmission/intertie line between Noorvik, Kiana, and Selawik. This work will cost $218,000. AVEC requests $207,100 from AEA, and will provide $10,900 (5%) as a cash match contribution. If the wind resource and intertie prove suitable, the next phase of this project would be Final Design and Permitting. Although it is difficult to determine without an assessment of the AEA13-006 Grant Application Page 17 of 26 7/3//2012 Renewable Energy Fund Round 6 GOOD Q Grant Application ©�t]*MYAtrTNOPM resource what type, size, and number of turbines would be needed, AVEC expects that Final Design and Permitting would cost $2,000,000. It is possible that the funding for this work could come from the AEA Renewable Energy Program, the Denali Commission, a USDA Rural Utility Service program, or another grant program. The final phase of this project would be Construction and Commissioning. AVEC estimates that this phase could cost $23,000,000. It is possible that the funding for this work could come from the AEA Renewable Energy Program, the Denali Commission, AIDEA, a USDA Rural Utility Service program, or another grant program. 4.4.2 Project Operating and Maintenance Costs Include anticipated O&M costs for new facilities constructed and how these would be funded by the applicant. (Note: Operational costs are not eligible for grant funds however grantees are required to meet ongoing reporting requirements for the purpose of reporting impacts of projects on the communities they serve.) The met tower will require monthly monitoring and data management. It is expected that this will cost $700. The cost will be funded by this grant award. 4.4.3 Power Purchase/Sale The power purchase/sale information should include the following: • Identification of potential power buyer(s)/customer(s) • Potential power purchase/sales price - at a minimum indicate a price range • Proposed rate of return from grant -funded project Identification of potential power buyer(s)/customer(s). AVEC, the existing electric utility serving Noorvik, Kiana, and Selawik, is a member -owned cooperative electric utility and typically owns and maintains the generation, fuel storage, and distribution facilities in the villages it serves. In Noorvik Kiana, and Selawik, AVEC has 580 consumers (186, 155, and 239 respectively) and a health clinic, city office, school, and watertreatment plant/washeteria in each community which purchase power from AVEC. At this point in project development, the potential power price and rate of return on the project is unknown. Potential power purchase/sales price/ Proposed rate of return from grant -funded project. At this point in project development, the potential power price and rate of return on the project is unknown. Work done under this grant would determine this. AEA13-006 Grant Application Page 18 of 26 7/3//2012 Renewable Energy Fund Round 6 � MEND Grant Application 4001E) ENERGY AUTHORITY 4.4.4 Project Cost Worksheet Complete the cost worksheet form which provides summary information that will be considered in evaluating the project. Please fill out the form provided below Renewable Energy Source The Applicant should demonstrate that the renewable energy resource is available on a sustainable basis. Annual average resource availability. 3,013282 kWh peryear with an EWTTurbine 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) i. Number of generators/boilers/other n/a considering this is an intertie ii. Rated capacity of generators/boilers/other iii. Generator/boilers/other type iv. Age of generators/boilers/other v. Efficiency of generators/boilers/other b) Annual O&M cost (if system is part of the Railbelt grid, leave this section blank) i. Annual O&M cost for labor n/a considering this is an intertie 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) i. Electricity [kWh] 5,335,229 kWh per year ii. Fuel usage Diesel [gal] 355,612 gallons per year (Based on an average efficiency of 15 kWh/gallon) Other iii. Peak Load 1,000 kW estimated iv. Average Load 609 kW v. Minimum Load vi. Efficiency 15 kWh/gal vii. Future trends d) Annual heating fuel usage (fill in as applicable) i. Diesel [gal or MMBtu] ' 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 19 of 26 7/3//2012 Renewable Energy Fund Round 6 Grant Application ii. Electricity [kWh] iii. Propane [gal or MMBtu] iv. Coal [tons or MMBtu] v. Wood [cords, green tons, dry tons] vi. Other ri,r . ' . �' ►.�� s 111--- Proposed System Design Capacity and Fuel Usage (Include any projections for continued use of non-renewable fuels) a) b) c) Proposed renewable capacity Wind, 900 kW (Wind, Hydro, Biomass, other) [kW or MMBtu/hr] Proposed annual electricity or heat production (fill in as applicable) i. Electricity [kWh] 3,013282 kWh per year ii. Heat [MMBtu] Proposed annual fuel usage (fill in as applicable) i. Propane [gal or MMBtu] ii. Coal [tons or MMBtu] iii. 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 $23,000,000 $15,000 a) Amount of fuel displaced for i. Electricity 200,885 gallons/year ii. Heat iii. Transportation b) Current price of displaced fuel $5.06/gallon c) d) Other economic benefits Alaska public benefits Power Purchase/Sales Price a) Price for power purchase/sale n/a AEA13-006 Grant Application Page 20 of 26 7/3//2012 Renewable Energy Fund Round 6 //)= Q660 Grant Application I MEND ENERGY AUTHORITY Project Analysis a) Basic Economic Analysis Project benefit/cost ratio 1.10 Payback (years) 20 4.4.5 Proposed Biomass System Information Please address the following items, if know. (For Biomass Projects Only) N/A 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 The potential annual fuel displacement for electricity is projected to be 4,060,303 gallons over a 20-year project lifetime which equates to $22,901,359 over 20 years based on $5.64 per gallon. There is significant excess electricity in the proposed system which could be used to meet the thermal needs of Noorvik, Kiana, and Selawil<. One 9001<W EWT will produce 710,300 kWh/year of electricity that cannot be used for the primary load. It is available to be used for heating commercial buildings, such as the school, in each community. If all the excess electricity was used for thermal energy, the savings of diesel fuel would be approximately 17,000 gallons per year. Over 20 years the savings would add up to $2,380,000. The total project savings are $25,281,359 over 20 years. With an estimated $23,000,000 capital investment the simple benefit cost ratio would be 1.10. There are numerous non -economic public benefits to Northwest Alaska over the lifetime of this project. AEA13-006 Grant Application Page 21 of 26 7131/2012 Renewable Energy Fund Round 6 GIND Grant Application I dIIIIIIIIIED 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 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 Business plan structures and concepts which may be considered: The wind turbines and intertie, if feasible, would be incorporated into AVEC's power plant operation. Local plant operators provide daily servicing. AVEC technicians provide periodic preventative or corrective maintenance and are supported by AVEC headquarters staff, purchasing, and warehousing. How O&M will be financed for the life of the project: The costs of operations and maintenance will be funded through ongoing energy sales to the villages. Operational issues which could arise: There are no known operational issues. Operational issues of the proposed turbines and intertie would be determined. Operating costs: Different turbines have different operating costs; however, using AEA's default cost of wind energy, estimated 0&M would cost $33,313 (based on $0.0469/kWh for wind energy). Commitment to reporting the savings and benefits: AVEC is fully committed to sharing the savings and benefits accrued from this project with their shareholders, and sharing the project information with AEA. In addition, AVEC acknowledges and agrees that if/when the wind-intertie is constructed, it shall be constructed, owned, and operated for the benefit of the general public and will not deny any person use and/or benefit of project facilities due to race, religion, color, national origin, age, physical handicap, sex, marital status, changes in marital status, pregnancy or parenthood. 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. Once funding is known to be secured, AVEC would seek a non -objection letter from NANA and begin the FAA and USFWS permitting process for the met tower. AVEC would seek contractors to install the met tower and complete the geotechnical work once the grant agreement is in place. AEA13-006 Grant Application Page 22 of 26 7/3//2012 Renewable Energy Fund Round 6 400D Grant Application MOW) EN AUTHoRITy Met tower installation and geotechnical work would occur before winter. Work that can be completed before the wind study is completed would occur over the winter, including analysis of current cost of energy and future market, and the economic and financial analyses. Once the wind study is completed, the conceptual design and permitting would occur. No other grants have been secured for this work in the past. 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 interest by all parties to develop wind energy in the general area of Hotham Peak for the benefit of Noorvik, Kiana, and Selawik. The proposed roles and responsibilities include the following: 1. AVEC Role. Alaska Village Electric Cooperative (AVEC) is the Regulatory Commission of Alaska recognized power provider in Noorvik, Kiana, and Selawik. AVEC would own and operate the transmission line and maintain backup/ emergency power in all communities in the event of power disruption. AVEC would also own and operate any wind generation in the vicinity of Hotham Peak. 2. NANA Regional Corporation (NRC) Role. NRC will help facilitate the concept, negotiate the arrangement, and provide technical services as needed. NRC can also provide land for installation of wind turbines. 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. AVEC plans to conduct a feasibility analysis, resources assessment, conceptual design, and permitting to assess the possibility of using wind power and an intertie connecting Noorvik, Kiana, and Selawik. This work is estimated to cost $218,000. AVEC requests $207,100 from AEA. AVEC will provide $10,900 as a cash contribution. A detail of the grant budget follows. To date, no funds have been obtained for this project. If the wind resource proves to be suitable, AVEC would seek funding to construct turbines on Hotham Peak. AVEC would provide a 10%cash match to any obtained funding." Applications should include a separate worksheet for each project phase that was identified in section AEA13-006 Grant Application Page 23 of 26 7/3//2012 Renewable Energy Fund Round 6 �4NED Grant Application annIE)ENERGY ADTHORITY 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 emailing the Grant Administrator, Shawn Calla, atscalfa@aidea.org. - -- Source of Matching Funds: Milestone or Task Anticipated Completion RE- Fund Grant Funds Grantee Matching Cash/in- kind/Federal TOTALS Date Funds Grants/Other State Grants/Other Project Scoping and 8/2013 $1,900 $100 $2,000 Contractor Selection Detailed Energy Resource 9/2014 $28,500 $1,500 $30,000 Analysis Identification of land and 1/2014 $6,650 $350 $7,000 regulatory issues Permitting and environmental 1/2014 $9,500 $500 $10,000 analysis Detailed analysis of existing and future energy costs and 2/2014 $9,500 $500 $10,000 markets Assessment of altematives 8/2014 $80,750 $4 250 $85,000 Conceptual design analysis 11/2014 $34,200 $1,800 $36,000 and cost estimate Detailed economic and 12/2014 $14,250 $750 $15,000 financial analysis Conceptual business and 12/2014 $14,250 $750 $15,000 operations plans Final report and 1/2015 $7,600 $400 $8,000 recommendations TOTALS $207,100 $10,900 $218000 Categories: -Budget Direct Labor & Benefits $19,950 $1,050 $21,000 Travel & Per Diem $8,075 $425 $8 500 $14,250 $750 $15,000 -Equipment Materials & Supplies $4,750 $250 $5,000 Contractual Services $154,850 $8,150 $163,000 Construction Services $0 $0 $0 Other $5,225 $275 $5,500 TOTALS $207,160 $10,900 $218,000 AEA13-006 Grant Application Page 24 of 26 7/3//2012 Renewable Energy Fund Round 6 � Grant Application I�011111111111DENERGY AUTHORITY SECTION 10 — AUTHORIZED SIGNERS FORM Community/Grantee Name: Alaska Village Electric Cooperative Regular Election is held: Date: Annually Each March A nF6�risnrl r-ron4 Rinnar/sl' Printed Name Title Term Signature Brent Petrie Manager of Community Development and Key Accounts unlimited I authorize the above person(s) to sign Grant Documents: (Highest ranking organization/community/municipal official) Printed Name i Title Term I Signature Meera Kohler President/CEO unlimited I mv, (�8 Grantee Contact Information: Mailing Address: 4831 Eagle Street Anchorage, AK 99503 Phone Number: 907-561-5531 Fax Number: 907-562-4086 E-mail Address: mkohler@avec.org Federal Tax ID #: 92-0035763 Please submit an updated form whenever there is a change to the above information. AEA13-006 Grant Application Page 25 of 26 7/3//2012 Renewable Energy Fund Round 6 Grant Application i4MMEWEDENERGYAUTHORMY 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 Meera Kohler Signature Title President and Chief Executive Officer Date September 21, 2012 AEA13-006 Grant Application Page 26 of 26 7/3//2012