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HomeMy WebLinkAboutSt Michael Stebbins Wind Design FinalRenewable Energy Fund Round 6 Grant Application AEA 13-006 Application Page 1 of 26 September 2012 St. Michael/Stebbins Wind Energy Design and Permitting SECTION 1 – APPLICANT INFORMATION Name (Name of utility, IPP, or government entity submitting proposal) Alaska Village Electric Cooperative, Inc. Type of Entity: Not-for-profit corporation Fiscal Year End December 31 Tax ID # 92-0035763 Tax Status: For-profit or X non-profit ( check one) Mailing Address 4831 Eagle Street Anchorage, AK 99503 Physical Address 4831 Eagle Street Anchorage, AK 99503 Telephone 800.478.1818 Fax 800.478.4086 Email 1.1 APPLICANT POINT OF CONTACT / GRANTS MANAGER Name Brent Petrie Title Manager, Community Development and Key Accounts Mailing Address 4831 Eagle Street Anchorage, AK 99503 Telephone 907.565.5358 Fax 907.561.2388 Email 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. Renewable Energy Fund Round 6 Grant Application Stebbins/St. Michael Wind Energy Design and Permitting AEA13-006 Grant Application Page 2 of 26 7/3//2012 SECTION 2 – PROJECT SUMMARY This is intended to be no more than a 1-2 page overview of your project. 2.1 Project Title – (Provide a 4 to 5 word title for your project) St. Michael/Stebbins Wind Energy Final Design and Permitting Project 2.2 Project Location – Include the physical location of your project and name(s) of the community or communities that will benefit from your project in the subsections below. 2.2.1 Location of Project – Latitude and longitude, street address, or community name. Latitude and longitude coordinates may be obtained from Google Maps by finding you project’s location on the map and then right clicking with the mouse and selecting “What is here? The coordinates will be displayed in the Google search window above the map in a format as follows: 61.195676.-149.898663. If you would like assistance obtaining this information please contact AEA at 907-771-3031. St. Michael (2010 U.S. Census population 401) is located on the east coast of St. Michael Island in Norton Sound. It lies 125 miles southeast of Nome and 48 miles southwest of Unalakleet. It is situated at 63.478060 North Latitude and -162.039170 West Longitude. Stebbins (2010 U.S. Census population 585) is located on the northwest coast of St. Michael Island on Norton Sound. It lies 8 miles north of the city of St. Michael. Stebbins is situated at approximately 63.522220 North Latitude and -162.288060 West Longitude. The site recommended for installation of the wind turbine is referred to in the attached reports as Stebbins Site Two or Cape Stevens Bluff. It is located on the northwestern tip of St. Michael Island, approximately 0.20 miles west of the Stebbins Gravel Source. 2.2.2 Community benefiting – Name(s) of the community or communities that will be the beneficiaries of the project. This project will benefit the communities of St. Michael and Stebbins, which are connected by an eleven-mile long gravel road. 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) Renewable Energy Fund Round 6 Grant Application Stebbins/St. Michael Wind Energy Design and Permitting AEA13-006 Grant Application Page 3 of 26 7/3//2012 2.3.2 Proposed Grant Funded Phase(s) for this Request (Check all that apply) Pre-Construction Construction Reconnaissance X Design and Permitting Feasibility Construction and Commissioning Conceptual Design 2.4 PROJECT DESCRIPTION Provide a brief one paragraph description of your proposed project. Building on the results of the already completed wind resource (V3 Energy LLC), economic modeling (Northern Economics, Inc.) and conceptual design reports (HDL Engineering Consultants), Alaska Village Electric Cooperative, Inc. (AVEC) is proposing to complete the final design and permitting to install one EWT 900 wind turbine to supplement the existing diesel- fired power generation systems in St. Michael and Stebbins. Work under this grant would also be expended to design necessary wind integration controls for the power generation system at the new power plant in Stebbins. AVEC has completed the final design and obtained permits for the intertie between St. Michael and Stebbins. Once work done under this grant is completed, AVEC could seek funding to construct the turbines and an intertie to serve both communities. 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 primary financial benefit of this project is to offset fuel costs in St. Michael and Stebbins by providing a renewable energy resource. This project is estimated to provide 36% of the two communities’ combined electric power needs by generating 1,448,432 kWh per year. It is estimated to generate an additional 807,227 kWh per year of excess energy available for thermal loads. Assuming 80% turbine availability, this project could save $455,000 during its first full year of operation. Stebbins and St. Michael are traditional Yup’ik Eskimo villages with most residents supported by subsistence activities. Local economies are a mix of commercial fisheries and local wage positions at the schools, cities, and Native corporations. According to the 2006-2010 American Community Survey (ACS), 27.1% of the Stebbins population and 21.6% of the St. Michael population is unemployed. In Stebbins, 35.6% of the population is living below the poverty level and in St. Michael that percentage is 45.9. The median household income was $31,250 in Stebbins and $33,750 in St. Michael. Renewable Energy Fund Round 6 Grant Application Stebbins/St. Michael Wind Energy Design and Permitting AEA13-006 Grant Application Page 4 of 26 7/3//2012 Reducing the reliance on diesel fuel power generation would provide long-term socio-economic benefits to villages’ households. A renewable power resource would decrease the operating costs, giving the cities of St. Michael and Stebbins more economic stability and the ability to plan a secure future of their community. 2.6 PROJECT BUDGET OVERVIEW Briefly discuss the amount of funds needed, the anticipated sources of funds, and the nature and source of other contributions to the project. The total project cost for final design and permitting of one EWT turbine in Stebbins is $350,000 of which $332,500 is requested in grant funds from AEA. The remaining $17,500 would be matched in cash by AVEC. 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. $332,500 2.7.2 Cash match to be provided $17,500 2.7.3 In-kind match to be provided $ 2.7.4 Other grant applications not yet approved $ 2.7.5 Total Grant Costs (sum of 2.7.1 through 2.7.3) $350,000 Project Costs & Benefits (Summary of total project costs including work to date and future cost estimates to get to a fully operational project) 2.7.6 Total Project Cost (Summary from Cost Worksheet including estimates through construction) $5,000,000 (includes turbine, controls, transmission line, gravel trail) 2.7.7 Estimated Direct Financial Benefit (Savings) $455,000 (first year) $2,567,000 (20 year life) 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.) $ Renewable Energy Fund Round 6 Grant Application Stebbins/St. Michael Wind Energy Design and Permitting AEA13-006 Grant Application Page 5 of 26 7/3//2012 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. AVEC, as the electric utility serving St. Michael and Stebbins, will provide overall project management and oversight. Brent Petrie, Manager, Community Development and Key Accounts, will lead the project management team consisting of AVEC staff, consultants, and contractors. 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 wind, hydropower, solar and heat recovery. He also is the project manager for AVEC’s construction projects. Mr. Petrie has worked in the energy and resource field for more than thirty years, having worked for the 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 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 project. The key tasks and their completion dates are: Grant Award Announcement: May 2013 Authorization to Proceed: June 2013 Renewable Energy Fund Round 6 Grant Application Stebbins/St. Michael Wind Energy Design and Permitting AEA13-006 Grant Application Page 6 of 26 7/3//2012 Complete Permitting: February 2014 Complete Site Control : February 2014 Complete Final Design: May 2014 The schedule organized by AEA milestones is as follows: Milestones Tasks Start Date End Date Project Scoping and Contractor Award for Planning and Design The engineering contractor would be selected and a task order would be prepared for work planned for this phase. June 1, 2013 Aug 1, 2013 Permit Applications Permit applications, such as FAA, wetlands, and migratory birds/endangered species consultations, would be prepared and submitted Aug 1, 2013 Final Environmental Assessment and Mitigation Plans Working with regulatory agencies, environmental documents would be prepared as needed Aug 1, 2013 Feb 1, 2014 Resolution of Land Use, ROW Issues Working with the communities and corporations, AVEC would secure site control for the wind turbines Aug 1, 2013 Feb 1, 2014 Permit Approvals Permits would be issued from the Federal Aviation Administration, the U.S. Army Corps of Engineers, and the U.S. Fish and Wildlife Service. Feb 1, 2014 Final System Design The engineering contractor would complete final design of the wind system. The design would be reviewed by AVEC personnel prior to final approval. May 1, 2014 Engineers Cost Estimate Using the final design, the engineers would prepare the cost estimate for the project. June 1, 2014 Updated Economic Estimate and Financial Analysis Using the number developed in the cost estimate, an updated economic assessment and financial analysis would be prepared. July 1, 2014 Negotiated Power Sales Agreements with Approved Rates n/a Final Business and Operational Plan AVEC would work with the all the communities to finalize an Operational Plan. July 1, 2014 Renewable Energy Fund Round 6 Grant Application Stebbins/St. Michael Wind Energy Design and Permitting AEA13-006 Grant Application Page 7 of 26 7/3//2012 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 project management approach that has been used to successfully design and construct wind turbines throughout rural Alaska: a team of AVEC staff and external consultants. AVEC staff and their role on this project includes:  Meera Kohler, President and Chief Executive Officer, would act as Project Executive and would maintain ultimate authority programmatically and financially.  Brent Petrie, Manager, Manager of 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 solar array. 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.  Debbie Bullock, Manager of Administrative Services, would provide support in accounting, payables, financial reporting, and capitalization of assets in accordance with AEA guidelines.  Bill Stamm, Manager of Engineering, leads AVEC’s Engineering Department which is responsible for the in-house design of power plants, distribution lines, controls, and other AVEC facilities. Mr. Stamm has worked at AVEC since 1994. Mr. Stamm was an AVEC line superintendent before he was appointed to Manager of Engineering in 2012. Mr. Stamm’s unit will provide engineering design and supervision.  Mark Bryan, the Manager of Operations, is a Certified Journeyman Electrician and supervises the AVEC’s line operations, generation operations and all field construction programs. He has worked at AVEC since 1980, was appointed Manager of Construction in May 1998 and was promoted to Manager of Operations in June 2003. Mr. Bryan’s unit will oversee operation of this project as part of the AVEC utility system.  Anna Sattler, Community Liaison, will communicate directly with Stebbins and St. Michael residents to ensure that the community is informed. An AVEC project manager would lead this project. It is likely that one of AVEC’s in-house contractors would lead the work. The project manager would be responsible for:  Selecting, coordinating, and managing the geotechnical, engineering, and permitting consultants and ensuring that their deliverables are on time and within budget; and  Working with AVEC’s Community Liaison to involve the community in the project and gain site control. Contractors for this project would include: Renewable Energy Fund Round 6 Grant Application Stebbins/St. Michael Wind Energy Design and Permitting AEA13-006 Grant Application Page 8 of 26 7/3//2012  Geotechnical consultant. AVEC would select and employ an experienced geotechnical consultant who would conduct a detailed geotechnical and natural hazards field study and report of the project area.  Engineering consultant. AVEC currently has an on-call contract with HDL Engineering Consultants for engineering services. HDL would provide final design, engineering specifications, and a cost estimate for the wind turbines.  Environmental Consultant. HDL would consult with agencies and develop and submit permit applications for the wind farm.  Wind Resource Consultant. AVEC currently has an on-call contract with V3 Energy, LLC for wind resource studies and reports. It is likely that V3 would work on this project. Resumes are included under Tab A. Selection Process for Contractors/Vendors: The contractor selection will be made from a pre- qualified list of contractors with a successful track record with AVEC. Pre-qualified contractors have been selected based upon technical competencies, past performance, written proposal, quality, cost, and general consensus from an internal AVEC technical steering committee. The selection of contractors would occur in strict conformity with AVEC’s procurement policies, and conformance with OMB circulars. 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 has systems in place to accomplish reporting requirements successfully. In 2011, AVEC successfully met reporting requirements for 16 state and 19 federal grants. An independent financial audit and an independent auditor’s management letter completed for AVEC for 2011 did not identify any deficiencies in internal control over financial reporting that were considered to be material weaknesses. In addition, the letter stated that AVEC complied with specific loan and security instrument provisions. The project will be managed out of AVEC’s Community Development Department. For financial reporting, the Community Development Department’s accountant, supported by the Administrative Services Department, will prepare financial reports. The accountant will be responsible for ensuring that vendor invoices and internal labor charges are documented in accordance with AEA guidelines and are included with financial reports. AVEC has up-to-date systems in place for accounting, payables, financial reporting, and capitalization of assets in accordance with AEA guidelines. AVEC will require that monthly written progress reports be provided with each invoice submitted from contractor(s). The progress reports will include a summary of tasks completed, Renewable Energy Fund Round 6 Grant Application Stebbins/St. Michael Wind Energy Design and Permitting AEA13-006 Grant Application Page 9 of 26 7/3//2012 issues or problems experienced, upcoming tasks, and contractor’s needs from AVEC. Project progress reports will be collected, combined and supplemented as necessary and forwarded as one report to the AEA project manager each month. Quarterly face-to-face meetings will occur between AVEC and AEA to discuss the status of all projects funded through the AEA Renewable Energy Grants program. Individual project meetings will be held, as required or requested by AEA. 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 Environmental Permitting. Sometimes site control for the placement of turbines is difficult; however, because the community supports the project it is not expected that gaining site control would be difficult. Letters of support have been received from community leaders (see Tab B). Environmental Permitting. HDL will continue to consult with agencies in order to flesh out location, natural and social environment, specific species, and mitigation issues. The consultant would work openly with the agencies and conduct studies as appropriate. Weather. Weather could delay getting consultants from getting into the community to conduct site visits and/or the geotechnical survey however, HDL is familiar with Alaskan weather conditions. AVEC is responsible to its member communities and a board of directors and provides a cash match to the project; therefore, staying on schedule and within budget is essential. This project will result in decreasing electricity costs, and AVEC’s member communities are very interested in this project because costs can be a large portion of their budgets. AVEC member communities expect status updates on village projects including when and what work will occur, who will be involved, and when it will be completed. If work does not occur according to the schedule, AVEC’s CEO and Board of Directors are usually alerted by member communities, and there are repercussions. 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. Renewable Energy Fund Round 6 Grant Application Stebbins/St. Michael Wind Energy Design and Permitting AEA13-006 Grant Application Page 10 of 26 7/3//2012 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. Based on the Concept Design Report by HDL and a Wind Feasibility Study completed by V3 Energy (TAB F), the wind resource measured at both St. Michael and Stebbins is very good. The Stebbins Site Two area was chosen as the best wind turbine site based on the wind modeling results. The site is located in a low Class 5 (excellent) or higher wind resource and is within 1.25 miles of the new power plant in Stebbins. AVEC selected two wind turbine configurations for evaluation, and based on the technical analysis determined that one EWT 52-900 wind turbine would provide the best results as an alternative energy resource for Stebbins and St. Michael. Other energy resources are not feasible for the following reasons:  Photovoltaic solar arrays do not provide much energy during the villages’ peak electrical demand season (winter), and the installed cost would be on the order of ten times that of wind.  Generating power from the ocean tidal motion is not yet an established technology for arctic applications.  Hydropower requires a more hilly topography than is found in the Stebbins-St. Michael area, as well as a year-round source of flowing water.  Bio-mass is limited by the lack of wood resources near the communities. Wind energy as a supplement to diesel generators for electricity generation is considered the most viable and developable source of renewable energy for St. Michael and Stebbins. 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. AVEC currently provides power to the communities of Stebbins and St. Michael with separate diesel generators. After the communities are connected by a planned intertie, the St. Michael plant would be closed, and a backup generator module would be installed. Currently, a new power plant in Stebbins, of sufficient capacity to power both communities, is scheduled for construction in the summer of 2013. Commitment for intertie funding has been received, and it is expected to be constructed in 2013. The existing diesel power plant in Saint Michael consists of three generators: a 499 kW Cummins, a 314 kW Detroit Diesel, and a 207 kW Detroit Diesel. These generators were Renewable Energy Fund Round 6 Grant Application Stebbins/St. Michael Wind Energy Design and Permitting AEA13-006 Grant Application Page 11 of 26 7/3//2012 installed or overhauled in 2005, 2006, and 2006 respectively. St. Michael’s plant generated 1,780,774 kWh (total) of electricity with 124,533 gallon of diesel in 2011. The plant efficiency was 14.26 kW/gal in 2011. The existing diesel power plant in Stebbins consists of three generators: a 499 kW Cummins, a 350 kW Cummins, and a 250 kW Cummins. These generators were installed or overhauled in 2007, 1992, and 2006 respectively. The Stebbins’ power plant generated a total of 1,387,552 kWh (total) with 101,003 gallons of diesel in 2011. The average plant efficiency was 13.75 kW/gal. A new power plant is fully funded through construction, and is now in final design and procurement stages. When construction is complete in 2013, the plant will operate four Caterpillar 3456 diesel engine generators each with the capacity of 450kW and at efficiency of 15.3 kW/gal. 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. St. Michael and Stebbins use diesel fuel for electrical power generation, heating oil for boiler (thermal) and home heating, and diesel and gasoline fuel for transportation needs. Diesel fuel consumption for power generation in Stebbins in 2011 was 101,003 gallons; in St. Michael diesel fuel consumption was 124,553 gallons. The electric power generation and fuel use will change once the new power plant is installed. Installation of one 900 EWT turbine and an intertie would decrease the amount of diesel fuel used for power generation. Diesel generator use would be curtailed thereby decreasing generator operations and maintenance costs and enabling generators to last longer and need fewer overhauls. Another anticipated effect of this project is less use of heating fuel for boiler operations at the St. Michael water supply intake due to injection of excess wind power as thermal heat to that system. 4.2.3 Existing Energy Market Discuss existing energy use and its market. Discuss impacts your project may have on energy customers. According to a 2006-2010 American Community Survey (ACS), about 35.6% of Stebbins residents and 45.9% of St. Michael residents live below the poverty line. Stabilizing the high cost of energy in the community would provide long-term socio-economic benefits to village households. Currently both communities have stand-alone electric power systems with no intertie or connection beyond the villages. The electricity consumption (sold) in Stebbins was 1,354,235 Renewable Energy Fund Round 6 Grant Application Stebbins/St. Michael Wind Energy Design and Permitting AEA13-006 Grant Application Page 12 of 26 7/3//2012 kWh in 2011, and in St. Michael it was 1,683,181 kWh. The load is highest during the winter months, when the community experiences heavy winds and extended periods of darkness. The addition of the wind turbine to the electric generation system could reduce the amount of diesel fuel used for power generation. 4.3 Proposed System Include information necessary to describe the system you are intending to develop and address potential system design, land ownership, permits, and environmental issues. 4.3.1 System Design Provide the following information for the proposed renewable energy system:  A description of renewable energy technology specific to project location  Optimum installed capacity  Anticipated capacity factor  Anticipated annual generation  Anticipated barriers  Basic integration concept  Delivery methods Description of renewable energy technology. Wind power is the renewable energy option of choice for Stebbins and St. Michael. Two wind turbine configurations-- Four Northern Power 100 Arctic turbines and one EWT 52-900 turbine --were evaluated. HDL Engineering Consultants within the Conceptual Design Report, and V3 Energy within the feasibility study have recommended the EWT 52-900 for this project. It is an IEC Class II-A wind turbine rated at 900 kW with a 40- meter (131 feet) tower. It is equipped with a direct drive, permanent magnet, synchronous generator and can be equipped with an arctic package enabling operation at temperature down to 40 o F. It has a maximum power generation of 900 kW but can be modulated using blade pitch control down to 250 kW. Pitch control allows the turbine to optimize energy output through a range of wind speeds and to protect the turbine from damage by feathering the blades during extreme wind events. EWT turbines have been successfully implemented in Kotzebue and are currently planned for construction in Nome . The turbine would be installed on a monopole tower with precast concrete and rock anchor foundation. Optimum installed capacity. The turbine has a 900 kW generation capacity, which exceeds the current combined peak electrical load of Stebbins and St. Michael. Anticipated capacity factor. According to V3 Energy, the capacity factor for the EWT 52-900 is 28.6%. Anticipated annual generation. AVEC can expect the EWT wind turbine to supply 2,437,600 kWh annually (assuming 80% availability). Wind energy produced for power is estimated at 1,448,423 kWh/yr, and wind energy for heat is estimated at 807,227 kWh/yr. Renewable Energy Fund Round 6 Grant Application Stebbins/St. Michael Wind Energy Design and Permitting AEA13-006 Grant Application Page 13 of 26 7/3//2012 Basic integration concept. The wind energy will be easily integrated into the new power plant in Stebbins. A simplistic one‐line diagram of the integration between the new power plant and the wind turbines is included in the CDR’s Sheet E.1, Appendix A. Delivery Method. Power generated by the wind turbines would be distributed via the existing electrical distribution system in both communities. 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 proposed turbine site in Stebbins, pictured below, is owned by the Stebbins Native Corporation. Although formal site control is not yet in hand for the turbine, problems are not anticipated. The community of Stebbins supports this project and supports the selection of this site as does the leadership of the Stebbins Native Corporation. AVEC will begin negotiating land agreements as soon as grant awards are announced. The proposed turbine site in Stebbins. Renewable Energy Fund Round 6 Grant Application Stebbins/St. Michael Wind Energy Design and Permitting AEA13-006 Grant Application Page 14 of 26 7/3//2012 EWT 52-900 turbine layout at Stebbins Site 2 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 FAA Air Navigation Hazard Permitting. AVEC will begin seeking a no-hazard determination from FAA once the layout of the turbine has been determined (35% design). AVEC would do this early in the process to ensure that adequate time and resources are allocated to this effort. It is expected to take about 3 months to obtain the determination for the turbine. Endangered Species Act/Migratory Bird Treaty Act Consultation. Consultation with the U.S. Fish and Wildlife Service (USFWS) in compliance with the Endangered Species Act and Migratory Bird Treaty Act would be required to construct the wind turbine. A finding letter stating that the constructed project would not be expected to impact threatened or endangered species or birds would be drafted and submitted to the USFWS. It is expected that AVEC would receive concurrence from the Service within one month. Clean Water Act (Section 401) Permit. A U.S. Army Corps of Engineers (Corps) Wetlands Permit may be needed for the placement of the turbine. The construction notice would be submitted to the Corps once funding is assured, and the permit would be issued prior to initiating work. Renewable Energy Fund Round 6 Grant Application Stebbins/St. Michael Wind Energy Design and Permitting AEA13-006 Grant Application Page 15 of 26 7/3//2012 To permit the turbine, an individual wetland permit would be sought from the Corps. The application would be submitted once conceptual design has been completed. It is expected that the permit would be issued within 3 months. National Historic Preservation Act. Cultural Resource Consultants, LLC (CRC) conducted a review of the Alaska Heritage Resource Survey (AHRS) files for the site. According to the AHRS files there are no known AHRS sites within the project areas at the site. However, there are known sensitive sites located adjacent to the project areas of interest, including one site listed on the National Register of Historic Places. Per the recommendation of Cultural Resource Consultants, LLC, the undertaking would need to be reviewed by the State Historic Preservation Office, but further field surveys will likely not be required. 4.3.4 Environmental Address whether the following environmental and land use issues apply, and if so how they will be addressed:  Threatened or Endangered species  Habitat issues  Wetlands and other protected areas  Archaeological and historical resources  Land development constraints  Telecommunications interference  Aviation considerations  Visual, aesthetics impacts  Identify and discuss other potential barriers Threatened or Endangered species. The U.S. Fish and Wildlife Service would be consulted to ensure that the construction of the wind turbine would have no harmful impact on threatened or endangered species. Construction would be timed to avoid impacts to migratory birds in compliance with the Migratory Bird Treaty Act. Habitat issues. During permitting, the project team would work with agencies to ensure that the project would not impact any State refuges, sanctuaries or critical habitat areas, federal refuges or wilderness areas, or national parks. Wetlands and other protected areas. It is likely that the wind turbine could be placed in designated wetland locations. A U.S. Army Corps of Engineers’ wetlands permit would be needed. Archaeological and historical resources. Compliance with the National Historic Preservation Act through the State Historic Preservation Officer would be conducted prior to construction of the wind turbine. Renewable Energy Fund Round 6 Grant Application Stebbins/St. Michael Wind Energy Design and Permitting AEA13-006 Grant Application Page 16 of 26 7/3//2012 Land development constraints. Negotiations with the Corporation to obtain site control would be needed. Since the location of the met tower (on a site neighboring the proposed site for the wind turbine) was accepted by the community, and since the community supports this project, it is expected that there will not be any land issues associated with the project. Aviation considerations. A FAA Determination of No Hazard to Air Traffic would be sought for the installation of the wind turbine. Visual, aesthetics impacts. The turbine would be constructed outside the community; therefore, it is likely that there would be little concern for visual or aesthetic impacts. Communities often note that the turbines offer a helpful visual guide point when traveling outside the village. AVEC would conduct community meetings to discuss visual impacts and how they could be minimized, in the unlikely event that visual issues arise. 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 Total anticipated project cost, and cost for this phase/requested grant funding/matching funds. This application is for the final design and permitting of one EWT wind turbine in Stebbins. This phase of the project would cost $350,000 to complete. AVEC is requesting $332,500 from AEA through the REF grant program, and AVEC would provide $17,500 as a cash match for this phase. Identification of other funding sources. AVEC expects the final construction and commissioning phase of the project would cost $5,000,000. It is possible that the funding for this work would come from AEA’s Renewable Energy Fund program, the USDA Rural Utility Service Program, or another grant program, supplemented by AVEC funds. Projected capital cost of proposed renewable energy system/projected development cost of proposed renewable energy system. The final phase of this project would be Construction and Commissioning. AVEC estimates this phase could cost $5,000,000. AVEC would provide a 10% Renewable Energy Fund Round 6 Grant Application Stebbins/St. Michael Wind Energy Design and Permitting AEA13-006 Grant Application Page 17 of 26 7/3//2012 cash match for the construction project. 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.) Once the turbine is installed, AVEC estimates the cost of operating and maintaining to be around $48,752 annually. These estimates are based on AEA’s default cost of wind energy of $0.02/kWh. AVEC will provide the funds to operation of the turbines. 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 AVEC, the existing electric utility serving Stebbins and St. Michael, is a member owned cooperative electric utility and typically owns and maintains the generation, fuel storage, and distribution facilities in the villages it serves. No power purchase or sale would be needed for this project. 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. Low Class 5 (excellent); 6.50 m/s wind speed Unit depends on project type (e.g. wind speed, hydropower output, biomass fuel) Existing Energy Generation and Usage a) Basic configuration (if system is part of the Railbelt1 grid, leave this section blank) 1 The Railbelt grid connects all customers of Chugach Electric Association, Homer Electric Association, Golden Valley Electric Association, the City of Seward Electric Department, Matanuska Electric Association and Anchorage Municipal Light and Power. Renewable Energy Fund Round 6 Grant Application Stebbins/St. Michael Wind Energy Design and Permitting AEA13-006 Grant Application Page 18 of 26 7/3//2012 i. Number of generators/boilers/other 6 ii. Rated capacity of generators/boilers/other Stebbins: 1,099 kW; St. Michael: 1,020 kW (New power plant: 1,350 kW) iii. Generator/boilers/other type Diesel generators iv. Age of generators/boilers/other Stebbins: 4 years, 19 years, and 5 years St. Michael: 7 years, 5 years, 5 years v. Efficiency of generators/boilers/other Stebbins: 13.75 kWh/gal St. Michael: 14.26 kWh/gal b) Annual O&M cost (if system is part of the Railbelt grid, leave this section blank) i. Annual O&M cost for labor $633,379 (labor and non-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 [kWh] Stebbins: 1,387,552 kWh (2011 total) St. Michael: 1,780,774 kWh (2011 total) ii. Fuel usage Diesel [gal] Stebbins: 101,003 gal St. Michael: 124,533 gallons Other iii. Peak Load Stebbins: 289 kW St. Michael: 370 kW iv. Average Load Stebbins: 159 kW St. Michael: 204 kW v. Minimum Load vi. Efficiency Stebbins: 13.74 kW/gallon St. Michael: 14.26 kW/gallon vii. Future trends 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 Renewable Energy Fund Round 6 Grant Application Stebbins/St. Michael Wind Energy Design and Permitting AEA13-006 Grant Application Page 19 of 26 7/3//2012 (Include any projections for continued use of non-renewable fuels) a) Proposed renewable capacity (Wind, Hydro, Biomass, other) [kW or MMBtu/hr] One EWT wind turbine, 900 kW capacity b) Proposed annual electricity or heat production (fill in as applicable) i. Electricity [kWh] 1,448,423 kWh/yr (@80% availability) ii. Heat [MMBtu] 807,227 kWh/yr (@ 80% availability) c) 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 $5,000,000 b) Development cost c) Annual O&M cost of new system $48,752/yr. (based on AEA’s $0.02/kWh for wind energy) d) Annual fuel cost Project Benefits a) Amount of fuel displaced for i. Electricity 100,013 gal/yr (based on the new power plant efficiency of 15.3 kWh/gal) ii. Heat 26,072 gal/yr iii. Transportation b) Current price of displaced fuel Stebbins: $4.03/gallon (2011 AVEC) St. Michael: $4.28/gallon (2011 AVEC) c) Other economic benefits d) Alaska public benefits Power Purchase/Sales Price a) Price for power purchase/sale Renewable Energy Fund Round 6 Grant Application Stebbins/St. Michael Wind Energy Design and Permitting AEA13-006 Grant Application Page 20 of 26 7/3//2012 Project Analysis a) Basic Economic Analysis Project benefit/cost ratio 1.049 (V3 LLC report); 1.49 (Northern Economics report) Both 80% availability Payback (years) Undiscounted Payback Period: 10.37 years; Discounted Payback Period: 12.5 years (Northern Economics) 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 Potential annual fuel displacement. Integration of wind turbine power into the proposed electrical power generation system will offset diesel consumption in Stebbins and St. Michael by 100,013 gallons per year (based on new power plant efficiency of 15.3 kW/gallon and 80% turbine availability). The project will displace 26.072 gallons/year for heat. Based on ISER’s 2015 estimated fuel costs for these communities, this project could save $466,060 during its first full year of operation. (The 2015 projected fuel cost number was derived from ISER’s 2015 medium fuel cost projection for the Stebbins plus the mid-price of social cost of carbon per gallon in 2011 dollars). Anticipated annual revenue/Potential additional annual incentives/Potential additional annual revenue streams. Tax credits are not expected to be beneficial to the project due to AVEC’s status as a non-profit entity. Nonetheless, in addition to saving the direct cost of fuel, AVEC could sell green tags from the project. Renewable Energy Fund Round 6 Grant Application Stebbins/St. Michael Wind Energy Design and Permitting AEA13-006 Grant Application Page 21 of 26 7/3//2012 Non-economic public benefits. The anticipated benefits of installation of the wind turbine would be reducing the negative impact of the cost of energy by providing a renewable energy alternative. This project could help stabilize energy costs and provide long-term socio-economic benefits to village households. Locally produced, affordable energy would empower community residents and could help avert rural- to- urban migration. Once the wind project is constructed and heat recovery systems are in place, costs to operate important community facilities (e.g., water treatment plants, schools, washeterias, etc.) would be decreased, enabling managing entities (e.g., city governments, tribe, school district) to operate more economically. Stabilized energy costs would allow community entities to plan and budget for important community infrastructure and programs. Residents’ health and safety would be enhanced by the environmental benefits resulting from a reduction of hydrocarbon use, including:  Reduced potential for fuel spills or contamination during transport, storage, or use (thus protecting vital water and subsistence food sources);  Improved air quality; and  Decreased contribution to global climate change from fossil fuel use. The wind turbine would provide a visual landmark for sea, air, and overland travelers, which would help navigation in the area. Wind turbine orientation and rotor speed would provide visual wind information to residents. Stebbins and St. Michael are accessible only by airplane, barge, snowmachine or small boat, and so rely mainly on air transportation, especially for delivery of medical goods and the transport of sick or injured individuals, or mothers nearing childbirth. Reliable electric service is essential to maintaining vital navigation aids for the safe operation of aircraft; runway lights, automated weather observation stations, VASI lights, DMEs and VORs (aircraft navigation systems) are all powered by electricity. This project will increase efficiencies and stabilize the costs of the energy system in Stebbins and St. Michael. Emergency medical service is provided in the health clinic by a health aide. Medical problems and emergencies must be relayed by telephone or by some other communication means for outside assistance. Tele-medicine is rapidly growing in rural Alaska as a means of regular and emergency care, as winter conditions sometime impede air transport and accessibility. Reliable telephone service and tele-medicine require reliable and affordable electric service. The majority of both cities are served by piped circulation water systems. Most residents and buildings are equipped with full plumbing. Reliable and affordable electric service is required for the continuous operation of the water and wastewater systems, and to prevent freezing of the systems, which would cause extensive damage and interruptions in service. Renewable Energy Fund Round 6 Grant Application Stebbins/St. Michael Wind Energy Design and Permitting AEA13-006 Grant Application Page 22 of 26 7/3//2012 Like all of Alaska, Stebbins and St. Michael are subject to long periods of winter darkness. Reliable electric service is essential for the operation of home lighting, streetlights, and security lighting. Outside lighting greatly improves the safety of village residents, especially in the winter months. Many residents harvest salmon, moose, bear and waterfowl and engage in trapping. Refrigeration is essential for the extended storage of perishable food stuffs, and reliable electric service is essential for proper freezer storage of food. The construction of the proposed project would augment and improve the existing power generation system by incorporating a locally available renewable resource. 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 As a local utility that has been in operation since 1968, AVEC is completely able to finance, operate, and maintain this project for the design life. AVEC has the capacity and experience to operate this project. AVEC has operated wind projects throughout the state and is very familiar with planning, constructing, operating, and maintaining wind systems. Business Plan Structures and Concepts which may be considered: The wind turbine 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 would be financed for the life of the project: The costs of operations and maintenance would be funded through ongoing energy sales to AVEC’s member-owners in the villages. Operational issues which could arise: Integration of the wind power into the new diesel power plant will require a large secondary load controller to prevent overloading the grid with excess energy and tripping the wind generator offline. This will be incorporated into the new power plant in Stebbins. Operating costs: Using AEA’s default cost of wind energy, estimated O&M would cost $48,752 Renewable Energy Fund Round 6 Grant Application Stebbins/St. Michael Wind Energy Design and Permitting AEA13-006 Grant Application Page 23 of 26 7/3//2012 (based on AEA’s $0.02/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 information with its member-owners, and sharing information regarding savings and benefits with AEA. 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. AVEC is ready to move forward on this project. The wind report, conceptual design and analysis of current cost of energy and future markets, the economic and financial analyses are complete. All required permitting would be completed prior to initiation of construction. HDL Engineering Consultants prepared the Stebbins Wind Project Concept Design Report that is in draft form as of September 2012 (Tab F). 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. Both Stebbins and St. Michael support this project and are interested in moving forward with the installation of the turbine. Letters of support have been received by all governing entities. Please see Tab B. 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 complete final design and permitting of a new wind project in Stebbins/St. Michael. This work would cost $350,000. AVEC requests $332,500 from AEA and will provide $17,500 as a cash contribution. A detail of the grant budget follows. AVEC, with Denali Commission funding, completed preliminary design of the intertie (Tab F). AVEC expects the final construction and commissioning phase of the project would cost $7,449,000. AVEC will seek outside funding for this project after it is designed and permitted. AVEC will likely provide a 10% cash match for construction of the project. Renewable Energy Fund Round 6 Grant Application Stebbins/St. Michael Wind Energy Design and Permitting AEA13-006 Grant Application Page 24 of 26 7/3//2012 Milestone or Task Anticipated Completion Date RE- Fund Grant Funds Grantee Matching Funds Source of Matching Funds: Cash/In- kind/Federal Grants/Other State Grants/Other TOTALS Project scoping and contractor solicitation for planning and design Aug 1, 2013 $4,750 $250 cash $5,000 Permit applications $19,000 $1,000 cash $20,000 Final environmental assessment and mitigation plans Feb 1, 2014 $14,250 $750 cash $15,000 Resolution of land use, right of way issues Feb 1, 2014 $38,000 $2,000 cash $40,000 Permit approvals Feb 1, 2014 $4,750 $250 cash $5,000 Final system design May 1, 2014 $190,000 $10,000 cash $200,000 Engineers’ cost estimate June 1, 2014 $42,750 $2,250 cash $45,000 Updated economic and financial analysis July 1, 2014 $9,500 $500 cash $10,000 Negotiated power sales agreements with approved rates $0 $0 $0 Final business and operational plan July 1, 2014 $9,500 $500 cash $10,000 TOTALS $332,500 $17,500 $350,000 Budget Categories: Direct Labor & Benefits $57,000 $3,000 cash $60,000 Travel & Per Diem $14,250 $750 cash $15,000 Equipment $ - $ - $ - Materials & Supplies $ - $ - $ - Contractual Services $261,250 $13,750 cash $275,000 Construction Services $ - $ - $ - Other $ - $ - $ - TOTALS $332,500 $17,500 $350,000 Tab A Resumes Tab B Letters of Support Tab D Governing Body Resolution Tab E Certification Tab F Additional Materials