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HomeMy WebLinkAboutAEA Round 6 Cosmos Hills ApplicationAVEC.�Jc ALASEA VILLAGE 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: Cosmos Hills Wind Resource & 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 Ambler, Shungnak and Kobuk. The study will involve putting up a meteorology (met) tower and monitoring the wind resource at Wesley Creek near the community of Shungnak 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 Ambler, Shungnak, and Kobuk. AVEC is seeking $221,350 from AEA under this proposal and would provide a cash match of $11,650 for this work. Please do not hesitate to contact Mr. Petrie of my staff if you have questions. Sincerely, r( �W /1 TKV'1JIr�I\YII l/ 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 Grant Application GONE) ENERGY ALM40RITY Application Forms and Instructions This instruction page and the following grant application constitutes the Grant Application Form for Round 6 of the Renewable Energy Fund. An electronic version of the Request for Applications (RFA) and this form are available online at: http•//www akenergyauthority.org/RE Fund-6.html • If you need technical assistance filling out this application, please contact Shawn Calfa, the Alaska Energy Authority Grant Administrator at (907) 771-3031 or at scalfa0aidea. 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 26 7/3/2011 Renewable Energy Fund Round 6 Grant Application GEED ® ENERGY AUTHORITY SECTION 1 — APPLICANT INFORMATION Name (Name of utility, IPP, or government entity submitting proposal) Alaska Village Electric Cooperative Type of Entity: Not -for -profit corporation Fiscal Year End December 31 Utility Tax ID # 92-0035763 Tax Status: —For-profit orJnon-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 CONTACTIGRANTS 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 AEA13-006 Grant Application Page 2 of 26 7/3//2012 Renewable Energy Fund Round 6 GONE) ww� Grant Application 001C) ENERGY AUTHORITY 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 3 of 26 7/3//2012 Renewable Energy Fund Round 6 Grant Application © ENERGY AUTHORITY SECTION 2 — PROJECT SUMMARY This is intended to be no more than a 1-2 page overview of your project. 2.1 Project Title Cosmos Hills 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 Ambler, Shungnak, and Kobuk. These villages are located in Northwest Alaska on the Kobuk River. 2.2.1 Location of Project— Latitude and longitude, street address, or community name. Latitude and longitude coordinates may be obtained from Google Maps by finding you project's location on the map and then right clicking with the mouse and selecting "What is here? The coordinates will be displayed in the Google search window above the map in a format as follows: 61.195676.-149.898663. If you would like assistance obtaining this information please contact AEA at 907-771-3031. The location of the wind resource study is Cosmos Hills, located directly North of Kobuk and Shungnak, and east of Ambler. The proposed site at Wesley Creek is approximately 5 miles north of Shungnak and the exact coordinates will be determined through initial review. Ambler is located on the north bank of the Kobuk River, near the confluence of the Ambler and the Kobuk Rivers. It lies 30 miles northwest of Kobuk, and 30 miles downriver from Shungnak. The community lies at approximately 67.086110' North Latitude and-157.851390' West Longitude. (Sec. 31, T020N, R005E, Kateel River Meridian.) Shungnak is located on the west bank of the Kobuk River. The community lies at approximately 66.888060` North Latitude and-157.136390' West Longitude. (Sec. 09, T017N, R008E, Kateel River Meridian.) Kobuk is located on the east bank of the Kobuk River, about 7 miles northeast of Shungnak. It is the smallest village in the Northwest Arctic Borough. The community lies at approximately 66.908570` North Latitude and-156.881020' West Longitude. (Sec. 03, T017N, R009E, Kateel River Meridian.) AEA13-006 Grant Application Page 4 of 26 7/3//2012 Renewable Energy Fund Round 6 Grant Application � Q. MEE) ENERGY AUTHORITY 1 2.2.2 Community benefiting — I The residents of Ambler, Shungnak, and Kobuk will benefit from a reduction of the cost of electricity from wind energy, as well as reduced diesel fuel costs, due to an intertie between Shungnak and Ambler, which will support the existing intertie between Shungnak and Kobuk. This assessment will advise on installation placement possibilities. 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 but can reap significant benefits in the form of reduced energy costs. This proposed project will include the completion of a Wind Resource Assessment in Cosmos Hills near Wesley Creek. The placement of the met tower will be north of Shungnak approximately five miles. In order to fully reap the benefits of wind energy in the Upper Kobuk region, and to reduce the cost of electricity for those communities, an intertie between Ambler and Shungnak will also be evaluated. All three communities are members of Alaska Village Electric Cooperative (AVEC) who has completed other similar studies for greater community benefit. AVEC has installed numerous interties between communities, some with wind turbine generators, and has been able to successfully reduce the cost of power. AEA13-006 Grant Application Page 5 of 26 7/3//2012 Renewable Energy Fund Round 6 400D Grant Application ©EMEFWAnHORITY 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.) The financial benefits of the project include the following: Reduced Cost of Electricity. AVEC customers in Ambler, shungnak, and Kobuk 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 AEA13-006 Grant Application Page 6 of 26 7/3//2012 Renewable Energy Fund Round 6 ©fir Grant Application i4�ENERCaYAUTHORrry proposed wind turbines would be to reduce the direct and indirect costs of using fossil tuels 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. 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 pnase Is estimatea at $233,000. AVEC will be providing a 5% match of $11,650. $221,350 is being requested in grant funds. The entire capital cost of the project is estimated to be approximately $11,150,000. This project has two areas of concentration: Power Intertie and Wind Generation. Intertie The intertie between Ambler and Shungnak 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. $221,350 2.7.2 Cash match to be provided $11,650 2.7.3 In -kind match to be provided $ 2.7.4 Other grant applications not yet approved $ AEA13-006 Grant Application Page 7 of 26 7/3//2012 Renewable Energy Fund Round 6 �� Grant Application GENIE) ENERGY AUTHORFY 2.7.5 Total Grant Costs (sum of 2.7.1 through $233,000 2.7.3) Project Costs & Benefits (Summary of total project costs including work to date and future cost estimates to get to a fully operational project) 2.7.6 Total Project Cost (Summary from Cost $11,150,000 Worksheet including estimates through construction) 2.7.7 Estimated Direct Financial Benefit (Savings) $13,052,660 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.) 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 (AVEC), the electric utility serving Ambler, Shungnak, and Kobuk, will provide overall project management and oversight. Brent Petrie, Manager, Community Development and Key Accounts, would lead the project management team consisting of AVEC staff, consultants, and contractors. Together with his group, Brent would provide coordination of the installation of the met tower, geothechnical work, and conceptual design. The group's resources include a project coordinator, accountant, project/construction manager (PM/CM), and a community liaison. Mr. Petrie will be the program manager for this project and will assign project manager resources to implement the project. 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 Application Page 8 Renewable Energy Fund Round 6 400D Grant Application �4MENDENERGY AUTHORITY 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. 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 Milestones Tasks Start Date End Date Project scoping and contractor solicitation Authorization to proceed 8/2013 Engineering contractor selection 8/2013 Detailed energy resource analysis Obtain site control/right of way/permits 9/2013 9/2014 Ship and erect met tower 10/2013 Identification of land and regulatory issues Land and Regulatory Issues Memorandum 1/2014 Permitting and environmental analysis Environmental and Permitting Memorandum 1/2014 Detailed analysis of existing/future energy costs and markets 2/2014 Conceptual business and operations plans Conceptual Business Plan 6/2014 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 AEA13-006 Grant Application Page 9 of 26 7/3//2012 Renewable Energy Fund Round 6 Grant Application i�ENUWAUfHCIWY Analyze data 10/2014 Conceptual design analysis and cost estimate 11/2014 Wind Resource Report 11/2014 Conceptual Design and Cost Estimate 11/2014 Final project report and recommendations 12/2014 Final Combined report 12/2014 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 AVEC will use a team of AVEC staff and external consultants in a project management approach 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. Mr. Petrie will be the program manager for this project and will assign project manager resources to implement the project. 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 Ambler, Shungnak, and Kobuk 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. AEA13-006 Grant Application Page 10 of 26 7/3//2012 Renewable Energy Fund Round 6 Grant Application i � ENERGY AUTHORrrY • Provide Feasibility Analysis, Wind Resource Assessment, and Conceptual Design of an Ambler, Shungnak, and Kobuk intertie and wind generation facilities in the vicinity of Cosmos Hills. • Provide business and operational models for Public/Private Partnership (PPP) relationship. • Supervise geotechnical investigation and draft the geotechnical report. 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 Energy Plan, 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 Cosmos Hills' 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 Cosmos Hills will be challenging. There is good barge access to the community of Noorvik, but transporting the tower to Cosmos Hills will take planning with which AVEC is familiar. AEA13-006 Grant Application Page 11 of 26 7/3//2012 Renewable Energy Fund Round 6 sty WED Grant Application MEED ENERGY AUTHORITY 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 have been no previous Wind Resource Assessments in the area. Doug Vaught of V3 Energy has previously completed a reconnaissance trip during the fall of 2008 in search of potential wind sites. The Wesley Creek area was determined to be ideal because there is a road from Shungnak which heads north to Bornite, a potential mining site, which is located along Ruby Creek on the north side of the Cosmos Hills. The National Renewable Energy Laboratory wind resource map shows that this site has a potential Class 3 wind resource. In HOMER modeling a wind resource of 6.1 meters per second was used. 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 Ambler, Shungnak, and Kobuk. With the introduction of an intertie, one community would continue to be the primary power provider, while the other communities would maintain back-up generation. Therefore, the existing infrastructure is not relevant or necessary to the new infrastructure. 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 Ambler, Shungnak, and Kobuk each have a local power plant that is owned and operated by AVEC. Currently, there is no road or electrical infrastructure connecting Ambler AEA13-006 Grant Application Page 12 of 26 7/3//2012 Renewable Energy Fund Round 6 GEM GOOD Grant Application �6111111111111C)ENERGY AuTHoRITY to the other villages. Shungnak and Kobuk have been electrically connected since 1980. The isolated location of Ambler has left them to be 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, Wesley Creek (north of Shungnak) 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 back-up power plant system. This study will determine the optimum configuration. 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 can be calculated for all three communities using the Alaska Village Load Calculator. According to 2011 PCE data, Ambler has a population of 277 with 12 commercial users. Shungnak has a population of 269 people with 7 commercial consumers and Kobuk has a population of 119 with 7 commercial consumers. This computes to a total consumption of 2,059,744 kWh per year with an average load of 235 kW. The intertie will serve to reduce the cost of electricity to the end users. 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. AEA13-006 Grant Application Page 13 of 26 7/3//2012 Renewable Energy Fund Round 6 Grant Application ENEMY AUTHOR" Being that the average load of the combined three communities is 235 kW, it is expected that the 900 kW would initially have a reduced set point of 500 kW in order to avoid power quality problems. This excess capacity might be able to be used for commercial operations such as at nearby Bornite. A 900 kW turbine, without any curtailment, would produce 2,542,174 kWh per year with a 32% capacity factor (Figure 1). There would be excess electricity that would need to be taken into consideration, especially during the summer. Figure 1: Wind Power Production (Blue) and Intertie Load (Blue) Alternatively, the turbine could be capped to 400 kW to reduce the amount of excess electricity as seen in Figure 2. 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 14 of 26 7/3//2012 Renewable Energy Fund Round 6 MID Grant Application idENDENERGY AUTHORITY Figure 2: Wind Power Production 400 kW (Green) and Intertie Load (Blue) This turbine size is significantly oversized for smaller primary loads between the three communities. The feasibility study and conceptual design will evaluate the best option for wind power along the proposed intertie. 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 durinstnls stu 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 AEA13-006 Grant Application Page 15 of 26 7/3//2012 Renewable Energy Fund Round 6 © Q Grant Application ENERGYAUTHORfTY 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 • Archaeological and historical resources • Land development constraints • Telecommunications interference • Aviation considerations • Visual, aesthetics impacts • Identify and discuss other potential barriers 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 be 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 AEA13-006 Grant Application Page 16 of 26 7/3//ZU12 Renewable Energy Fund Round 6 411111111D Grant Application GONE) ENERGY AUTHORITY 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 108,462 gallons per year. AVEC plans to conduct a Feasibility Analysis, Wind Resource Assessment, and Conceptual Design to assess the possibility of using wind power at Wesley Creek via a transmission/intertie line between Ambler, Shungnak, and Kobuk. This work will cost $233,000. AVEC requests $221,350 from AEA, and will provide $11,650 (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 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 $13,150,000. 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) AEA13-006 Grant Application Page 17 of 26 7/3//2012 Renewable Energy Fund Round 6 401U Grant Application MIIIIIIIII—L) ENERGY AUTHORITY 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 Ambler, Shungnak, and Kobuk, 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 Ambler, Shungnak, and Kobuk, AVEC has 452 consumers (112, 87, and 54 respectively) and a health clinic, city office, school, and water treatment 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. 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. Estimated 6.4 m/s, but data needs to be collected 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) L 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 ' 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 18 of 26 7/3//2012 Renewable Energy Fund Round 6 GOOD AjlnHL?_�A GOOD Grant Application �001C)ENERGY AUTHORrrY 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 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 2,059,744kWh per year [kWh] ii. Fuel usage Diesel [gal] Other iii. Peak Load iv. Average Load v. Minimum Load vi. Efficiency vii. Future trends 147,124 gallons per year at 14% efficiency 600 kW estimated 235 kW 14% estimated d) Annual heating fuel usage (fill in as applicable) i. Diesel [gal or MMBtu] ii. Electricity [kWh] iii. Propane [gal or MMBtu] iv. Coal [tons or MMBtu] v. Wood [cords, green tons, dry tons] vi. Other Proposed System Design Capacity and Fuel Usage (Include any projections for continued use of non-renewable fuels) a) Proposed renewable capacity (Wind, Hydro, Biomass, other) [kW or MMBtu/hr] 900 kW EWT de -rated as needed until primary and secondary loads can be increased. b) Proposed annual electricity or heat production (fill in as applicable) i. Electricity [kWh] 1,235,546 kWh per year ii. Heat [MMBtu] c) Proposed annual fuel usage (fill in as applicable) i. Propane [gal or MMBtu] AEA13-006 Grant Application Page 19 of 26 7/3//2012 Renewable Energy Fund Round 6 Grant Application 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 a) Amount of fuel displaced for i. Electricity ii. Heat iii. Transportation $11,150,000 01 /l C�+t2 A �40ME) ENERGY AUTHORITY $17,000/year estimated 87,618 gallons/year 20,844 gallons/year n/a b) Current price of displaced fuel c) Other economic benefits d) Alaska public benefits Power Purchase/Sales Price a) Price for power purchase/sale Project Analysis a) Basic Economic Analysis Project benefit/cost ratio Payback (years) 1.26 $4.92/gallon Reduced O&M and reduced electric rates from intertie 1 4.4.5 Proposed Biomass System Information AEA13-006 Grant Application Page 20 of 26 7/3//2012 Renewable Energy Fund Round 6 4SED � Grant Application ®ENERGYAUTHORMY 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 The potential annual fuel displacement is projected to be 2,169,240 gallons over a 20-year project lifetime which equates to $10,672,660/year based on $4.92 per gallon. There is significant excess electricity in the proposed system which could be used to meet the thermal needs of Ambler, Shungnak, and Kobuk. One 900 kW BUT will produce 658,389 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. There are numerous non -economic public benefits to Northwest Alaska over the lifetime of this project. 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: 1. Reduced potential for fuel spills or contamination during transport, storage, or use (thus protecting vital water and subsistence food sources); 2. Improved air quality; 3. Decreased contribution to global climate change from fossil fuel use; and 4. Decreased coastal erosion due to climate change. AEA13-006 Grant Application Page 21 of 26 7/3//2012 Renewable Energy Fund Round 6 m GUND Grant Application © ENERGY AUTHORITY SECTION 6— SUSTAINABILITY Discuss your plan for operating the completed project so that it will be sustainable. Include at a minimum: • Proposed business structure(s) and concepts that may be considered. • How you propose to finance the maintenance and operations for the life of the project • Identification of operational issues that could arise. • A description of operational 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 O&M would cost approx. $28,980 (based on $0.0469/kWh for wind energy) but the assumption for this larger scale turbine is that the O&M will be $17, 000/year. Commitment to reporting the savings and benefits: AVEC is fully committed to sharing the savings and benefits information accrued from this project with their shareholders and 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. AEA13-006 Grant Application Page 22 of 26 7/3//2012 Renewable Energy Fund Round 6 400D Grant Application i®ENERGY AUTHORITY 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. 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 Cosmos Hills for the benefit of Ambler, Shungnak, and Kobuk. 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 Ambler, Shungnak, and Kobuk. AVEC would own and operate the transmission line and maintain back-up/emergency power in all communities in the event of power disruption. AVEC would also own and operate any wind generation in the vicinity of Cosmos Hills. 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. 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 Ambler, Shungnak, and Kobuk. This work is estimated to cost $233,000. AVEC requests $221,350 from AEA. AVEC will provide $11,650 as a cash contribution. A detail of the grant budget follows. To date, no funds have been obtained for this project. AEA13-006 Grant Application Page 23 of 26 7/3//2012 Renewable Energy Fund Round 6 Grant Application 40011D ENERGY AUTHORITY If the wind resource proves to be suitable, AVEC would seek funding to construct turbines on Cosmos Hills. AVEC would provide a 10% cash match to any obtained funding. Source of Matching Anticipated RE- Fund Grantee Funds: Cas Milestone or Task Completion Grant Matching kind/Federal kind/Feede TOTALS Date Funds Funds Grants/Other State Grants/Other Project Scoping and 8/2013 $1,900 $100 $2,000 Contractor Selection Detailed Energy Resource 9/2014 $42,750 $2,250 $45,000 Analysis Identification of land and 1/2014 $6,650 $350 $7,000 regulatory issues Permitting and 1/2014 $9,500 $500 $10,000 environmental analysis Detailed analysis of existing and future energy costs 2/2014 $9,500 $500 $10,000 and markets Assessment of alternatives 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 $221,350 $11,650 $233,000 Budget Categories: Direct Labor & Benefits $19,950 $1,050 $21,000 Travel & Per Diem $17,575 $925 $18,500 Equipment $19,000 $1,000 $20,000 Materials & Supplies $4,750 $250 $5,000 Contractual Services $154,850 $8,150 $163,000 Construction Services $ $0 $0 Other $5,225 $275 $5,500 TOTALS 1 $221,350 $11,650 $233,000 AEA13-006 Grant Application Page 24 of 26 7/3//2012 Renewable Energy Fund Round 6 GEND n L AQ1e�A 41111111111117) Grant Application MEN--) ENERGY AUTHORITY SECTION 10 — AUTHORIZED SIGNERS FORM Community/Grantee Name: Alaska Village Electric Cooperative Regular Election is held: Date: Annually Each March A�hhnrionfl r-rnnf Sinnnrlcl- 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 Title Term Signature Meera Kohler President/CEO unlimited r:rnnfaa rnntnrt Infnrmnfinn- Mailing Address: 4831 Eagle Street Anchorage, AK 99503 4831 Eagle Street Anchorage, AK 99503 Phone Number: 907-561-5531 (907) 561-1818 Fax Number: 907-562-4086 (907) 561-2388 E-mail Address: mkohler@avec.org bpetrie@avec.org Federal Tax ID #: 92-0035763 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 4NED GOOD Grant Application �)Er1ERGYAUTHORrY 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 Meera Kohler Name Signature Title President and Chief Executive Officer Date September 21, 2012 AEA13-006 Grant Application Page 26 of 26 7/3//2012