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Home My WebLink AboutAPT Grant Application 6 FORM FINALRenewable Energy Fund Round 6 Grant Application AEA 13-006 Application Page 1 of 29 7/3/2011 Application Forms and Instructions This instruction page and the following grant application constitutes the Grant Application Form for Round 6 of the Renewable Energy Fund. An electronic version of the Request for Applications (RFA) and this form are available online at: http://www.akenergyauthority.org/RE_Fund-6.html • If you need technical assistance filling out this application, please contact Shawn Calfa, the Alaska Energy Authority Grant Administrator at (907) 771-3031 or at scalfa@aidea.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. Renewable Energy Fund Round 6 Grant Application AEA13-006 Grant Application Page 2 of 29 7/3//2012 SECTION 1 – APPLICANT INFORMATION Name (Name of utility, IPP, or government entity submitting proposal) Alaska Power & Telephone Company Type of Entity: Utility Fiscal Year End: December 31 Tax ID # 92-0153693 Tax Status: X For-profit or non-profit ( check one) Mailing Address P.O. Box 3222 Port Townsend, WA 98368 Physical Address 193 Otto Street Port Townsend, WA 98368 Telephone 360-385-1733 Fax 360-385-5175 Email 1.1 APPLICANT POINT OF CONTACT / GRANTS MANAGER Name Robert S. Grimm Title CEO Mailing Address Alaska Power and Telephone Company P.O. Box 3222 Port Townsend, WA 98368 Telephone 360-385-1733 x 120 Fax 360-385-7538 Email bob.g@aptalaska.com 1.2 APPLICANT MINIMUM REQUIREMENTS Please check as appropriate. If you do not to meet the minimum applicant requirements, your application will be rejected. 1.2.1 As an Applicant, we are: (put an X in the appropriate box) X An electric utility holding a certificate of public convenience and necessity under AS 42.05, or An independent power producer in accordance with 3 AAC 107.695 (a) (1), or A local government, or A governmental entity (which includes tribal councils and housing authorities); Yes 1.2.2 Attached to this application is formal approval and endorsement for its project by its board of directors, executive management, or other governing authority. If the applicant is a collaborative grouping, a formal approval from each participant’s governing authority is necessary. (Indicate Yes or No in the box ) Yes 1.2.3 As an applicant, we have administrative and financial management systems and follow procurement standards that comply with the standards set forth in the grant agreement. Yes 1.2.4 If awarded the grant, we can comply with all terms and conditions of the attached grant form. (Any exceptions should be clearly noted and submitted with the application.) Yes 1.2.5 We intend to own and operate any project that may be constructed with grant funds for the benefit of the general public. If no please describe the nature of the project and who will be the primary beneficiaries. Renewable Energy Fund Round 6 Grant Application AEA13-006 Grant Application Page 3 of 29 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) Type in your answer here and follow same format for rest of the application. Upper Tanana Biomass CHP Project (Design & Permitting phase) 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 Upper Tanana Biomass CHP (Combined Heat & Power) Project will be located in the Alaska Interior community of Tok (pop. 1270), at the junction of the Alaska Highway and the Tok Cutoff to the Glenn Highway, 200 miles southeast of Fairbanks, 93 miles from the Canadian border. This project will serve an isolated power grid that connects the communities of Tok, Tanacross, Tetlin and Dot Lake (combined population estimate 1580). 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. (63.350281,-142.980194) Alaska Power & Telephone, Tok Power Plant 1314 Alaska Highway, Tok, Alaska 99780 2.2.2 Community benefiting – Name(s) of the community or communities that will be the beneficiaries of the project. Tok, Tanacross, Tetlin and Dot Lake 2.3 PROJECT TYPE Put X in boxes as appropriate 2.3.1 Renewable Resource Type Wind X 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 X Design and Permitting Feasibility Construction and Commissioning Conceptual Design Renewable Energy Fund Round 6 Grant Application AEA13-006 Grant Application Page 4 of 29 7/3//2012 2.4 PROJECT DESCRIPTION Provide a brief one paragraph description of your proposed project. Alaska Power & Telephone (AP&T) proposes to conduct a Phase III project that will complete the Final Design and Permitting for a 2MWe biomass CHP (combined heat and power) system. The system will offset up to 1M gallons of fossil fuel per year and create a market for approximately $1M of locally sourced woody biomass, much of which would otherwise be wildfire hazardous fuels. AP&T, with support from the Alaska Gateway School District, the Tok Umbrella Association, the Upper Tanana communities of Tok, Tetlin, Dot Lake and Tanacross, the State of Alaska Department of Natural Resources (DNR), and working with contracted Consultants, Foresters and Economists, is collaborating to develop a CHP system utilizing locally sourced woody biomass as fuel. The project will create the final design for the system, and thoroughly assess and prepare the permitting process for the biomass energy project. NOTE: Most of the detail in this grant application is from pre-feasibility work and the (full) Feasibility Study (FS Final Report pending November 2012, however excerpts are added to this document as attachments). AP&T is completing a screening level study of alternative generation strategies, as part of the Biomass CHP Feasibility Study. Also being considered in comparison to Biomass CHP are the following power generation scenarios: Diesel, Wind, Wind with pumping and storage, (trucked) Natural Gas, and Hydro. Renewable Energy Fund Round 6 Grant Application AEA13-006 Grant Application Page 5 of 29 7/3//2012 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 from this Phase III project will be from taking the next step in progress toward deploying a technically, financially and operationally viable Biomass CHP (combined heat and power) system to offset approximately 1 million gallons annually of fossil fuel with local renewable fuel for power generation. This project will determine the actual capital costs and design parameters of the proposed CHP system, as well as identify and process the permitting requirements. The system will provide sustainable demand power for the subject communities. AP&T strongly believes that the objectives of this project are essential to the development and replication of renewable community-scale CHP generation in other rural and urban communities as well as the establishment of Alaskan leadership in adopting and replicating renewable energy technology. When the CHP Project is fully deployed, it will provide financial and public benefits to the local (isolated) power grid of the Upper Tanana, including the Communities of Tok, Tanacross, Tetlin and Dot Lake, now fueled by diesel generators. This project would set a new standard for renewable small-scale (2-10MWe) heat and power generation for rural communities, while supporting sustainable forest practices that focus on utilizing small volumes of local woody biomass. The 1,580 residents of the Upper Tanana will directly benefit from this project through lower-cost and stabilized-cost power. If replicated, this project has the potential to benefit more communities throughout Interior Alaska. It also has the potential to be a model for small-scale renewable energy systems for rural and urban communities throughout the state of Alaska. Many of this region’s residents supplement their electrical use with kerosene, oil and gas for generators, as well as for heating. Many also use propane for cooking, clothes dryers, hot water heaters, etc. When electric rates are reduced and stabilized, these other non-renewable fuel usages will likely decline, which would help clean the air and reduce toxic spills, as well as help localize the economy of the region. Energy demand is expected to grow for this area if stable power costs can be realized. Healthy local economies, based on local natural and human resources can become more self- sustaining. Anticipated benefits of installation of the CHP System would be to stabilize electric rates for AP&T’s ratepayers by offsetting diesel. Rates may be reduced as system feedstock costs stabilize and are projected to potentially be in the range of 25% lower than current prices. Since diesel costs are expected to remain volatile, this is a major improvement in energy cost predictability for AP&T’s customers. The addition of other renewable energy sources (seasonal hydro) could result in further rate reductions, but until diesel generation can be eliminated, electric rates will continue to have fluctuations. Additional benefits anticipated for Alaskans: • Energy produced by the System will displace about 12,800 MWh of diesel-generated electricity per year, resulting in energy cost savings, and cost stability. • The System will create a valuable use for biomass from wildfire risk-reduction projects. • The System will generate meaningful reductions in Greenhouse Gases (GHGs), with each MWh generated offsetting approximately 1,300 tons of GHGs annually. • The System features very low emissions with expected particulate of less than 5mg/SCM (milligrams/standard cubic meter). Renewable Energy Fund Round 6 Grant Application AEA13-006 Grant Application Page 6 of 29 7/3//2012 • The System will also include heat recovery equipment that will make thermal energy available, further offsetting fossil fuel usage for heating buildings. Options under consideration include an expansion of a (proposed) heating district loop, or heat availability to an adjacent operation (wood densification, greenhouses, refrigeration/freezing operation, or other manufacturing process applications). 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. Funding is needed to develop the final design and permitting strategy, which will establish the costs and building design plan for the facility and system. AP&T contributions will include in-kind costs of project support for administrative needs, local transportation, meeting space, and technical and administrative expertise of AP&T’s staff. The total cost for this Phase III project is $2,050,000, of which $1,990,000 is requested in grant funds. The remaining $60,000 will be matched in cash and in-kind by AP&T. AP&T has already contributed approximately $160,000 to research the technology, do a pre-feasibility study of the project, contribute match to the Phase II Feasibility Study, and to work with State of Alaska DNR Forestry on creating a long-term biomass fuel harvest contract. Total project costs through construction and deployment will depend on the outcome of Phase II completion and results, and are estimated at $18,000,000 to 20,000,000. Phase II –Feasibility Analysis, Resource Assessment & Conceptual Design $425,000 Estimated Phase III -Final Design and Permitting Requirements: $2,050,000 Estimated Phase IV –Construction: $18,000,000 Estimated Project Total (including Phase II, III, IV): $18,000,000-02,000,000 Renewable Energy Fund Round 6 Grant Application AEA13-006 Grant Application Page 7 of 29 7/3//2012 2.7 COST AN D 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. $1,990,000 2.7.2 Cash match to be provided $0 2.7.3 In-kind match to be provided $60,000 2.7.4 Other grant applications not yet approved $0 2.7.5 Total Grant Costs (sum of 2.7.1 through 2.7.3) $2,050,000 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) $18,000,000-20,000,000 2.7.7 Estimated Direct Financial Benefit (Savings) $21,560,000 20 year fuel cost savings 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.) $ 1,125,000/yr. spent locally on biomass feedstock Economic localization is often defined as sourcing the needs of a community, as much as possible, from within the community or nearby. The multiplier effect of locally sourced food, fuel and other essentials is well known. Money spent in the community cycles through the community several times before leaving, supporting other community businesses. Economic localization contributes to the overall financial viability of a community, enhances workforce development, creates more local jobs and stabilizes the community. Stable and reduced cost power and heat will also catalyze additional local industry, such as wood product manufacturing (pellets, bricks, cordwood), and other industries (greenhouse operations, value-added wood products, etc). Renewable Energy Fund Round 6 Grant Application AEA13-006 Grant Application Page 8 of 29 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. Robert Grimm, AP&T CEO 360-385-1733 Fax 360-385-5175 bob.g@aptalaska.com Benjamin Beste, AP&T Project Manager. 360-302-1379 email: ben.b@aptalaska.com 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. Once the grant has been awarded, AP&T will orient its project staff and contractors to the objectives of the AEA project; the work will begin immediately thereafter. An RFP for Final Design work will be advertised to qualified engineering firms, and an RFP for permitting research will be advertised to qualified consulting firms. Preference will be given to qualified Alaska-based firms. These timelines are estimates, and subject to timing of grant award. • Design and Costing - An engineering design will be completed • Environmental and Construction permitting requirements will be researched and identified and applications prepared for submittal • Engineering design will include buildings and system cost estimates, as well as detailed outline of development steps from permitting to commissioning • Reporting - A final report including all the items listed above will be generated and delivered Renewable Energy Fund Round 6 Grant Application AEA13-006 Grant Application Page 9 of 29 7/3//2012 Please fill out form provided below. You may add additional rows as needed. Milestones Tasks Start Date End Date 1. Project scoping and contractor orientation Develop RFPs for Design and Permitting contracts; Update data to confirm that resource is still available Month 1 Month 1 2. Permit applications completed Necessary permits obtained Month 1 Month 6 3. Final environmental assessment and mitigations plans completed All environmental issues have been previously assessed and mitigated Month 1 Month 6 4. Resolution of land use, right of way issues Confirmation of land use authorizations Month 1 Month 6 5. Permitting, rights of way, site control completed Obtain all necessary permit authorizations Month 1 Month 6 6. Final system design completed Finalize engineered and approved system design and integration design; Final engineered and approved energy system configuration, including upgrades and interconnection study Month 1 Month 5 7. Final cost estimate completed Finalize engineer’s estimate of project cost Month 1 Month 6 8. Updated economic and financial analyses completed Detail financial analysis Month 1 Month 6 9. Power or heat sale agreements in place Execute power sales agreement(s) – N/A N/A N/A 10. Final business and operational plan completed Finalize operation and business plan Month 1 Month 9 Renewable Energy Fund Round 6 Grant Application AEA13-006 Grant Application Page 10 of 29 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. AP & T Alaska Power & Telephone (AP&T) will manage the grant and the project. AP&T has been generating electricity with hydroelectric and diesel power plants throughout Alaska since 1957. Now serving twenty-four (24) communities, AP&T has personnel certified as electrical, civil, and mechanical engineers who maintain the facilities to the highest professional standards. AP&T has a consistent history of excellent performance in reliability, customer service, and a long-standing reputation for being a low cost provider of electric service. Additionally, AP&T is committed to transitioning from fossil fuel power generation to renewable energy. AP&T’s budgets include several 50% grant funded projects for installation of transmission lines on Prince of Wales Island, and three RUS (Rural Utilities Service) 100% grants for the installation of transmission lines to Tetlin, Lutak, and communities along the Haines Highway. AP&T’s engineering staff has been involved in the design, construction and operation of hydroelectric projects since the 1980’s. AP&T currently maintains over 250 miles of transmission line and has seasoned staff to maintain diesel generators and hydro power plants. AP&T has administrators responsible for multi-million dollar budgets, including the management of 60+ employees, equipment, and all generation and distribution resources. Key AP&T Project Personnel: Benjamin Beste will be the Project Managers for the Upper Tanana Biomass Combined Heat & Power Phase III Design and Permitting Project. Mr. Beste is an Engineer, and has been the Project Manager of the AP&T Feasibility Study. Robert Grimm, AP&T’s CEO has a 40-year career with the company where he has been responsible for management, supervision, operating functions and financial performance. His breadth of experience within the company encompasses general management, accounting, purchasing and billing, regulatory affairs, and tariff conformance and development. Please refer to the attached resumes. Dalson Energy, Inc. is a long-time contract consultant to AP&T. Dalson provides Project Coordination services and Biomass Energy project consulting. Dalson has been providing project coordination services to the AP&T Biomass Energy project since its inception through the current Feasibility Study. Dalson is available to AP&T to continue work on the Biomass CHP project. Alaska-based Engineering firms have been identified as potential vendors for Engineering Design and Costing, and will be on the list to receive an RFP (request for proposals) for contracted Final Design services. Alaska-based Permitting and Environmental firms are also available for contract services. Renewable Energy Fund Round 6 Grant Application AEA13-006 Grant Application Page 11 of 29 7/3//2012 3.4 Project Communications Discuss how you plan to monitor the project and keep the Authority informed of the status. Please provide an alternative contact person and their contact information. The project manager will be responsible for overseeing the day-to-day tasks associated with the Phase III Design and Permitting project. The project manager will keep detailed records and report on the progress made on important project milestones and will form the basis of reports to AEA. The reports will show progress made on the various tasks/milestones. Updating of the management files will be on a monthly basis. All transactions will be approved and processed according to AP&T’s standard policies and procedures. Progress reports will also be submitted to the Alaska Energy Authority that includes the status of the project, the funds expended, and the funds remaining in the budget. An alternative contact for project information will be Bob Grimm, CEO of AP&T. 3.5 Project Risk Discuss potential problems and how you would address them. Potential risks expected to be encountered and the risk mitigation plans are as follows: Identified Risk: Design and Permitting contract cost overruns Risk Mitigation: The Project team has obtained preliminary estimates of Final Design budgets from several Engineering firms. The estimates are consistent, in the range of 10-12% of total project cost. Project team intends to structure the RFPs for Design and Permitting services to include cost caps and performance guarantees. Design and Permitting services are commonly provided to projects similar to this one by multiple engineering and architectural/engineering firms in Alaska, as well as in the lower 48. Renewable Energy Fund Round 6 Grant Application AEA13-006 Grant Application Page 12 of 29 7/3//2012 SECTION 4 – PROJECT DESCRIPTION AND TASKS • The level of information will vary according to ph ase(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. AP&T is completing the final report for the Phase II Feasibility Study (FS) at the time of this Phase III application (September 2012). Indications are that the project will be recommended for progress to Phase III. The final report of the Phase III Feasibility Study will be available in November 2012. The FS has assessed that available (woody biomass) energy resources using industry standards including field measurements, negotiations with landowners (including the State of Alaska), and other onsite activities as outlined below. * * * Biomass Resource Sustainability Analysis for Upper Tanana Biomass CHP project Assess current forest resource situation: Tok, Tetlin Village, Tanacross, Dot Lake Identified local wood manufacturing facilities and identify equipment, manufacturing capacity, products, employment, and potential for expansion. Identified contractors in the Tok vicinity with the capability and equipment for harvesting wood biomass fuel and sawlogs/house logs. Identified potential competition for wood biomass fuel Identified sustainable sources of woody biomass: State of Alaska – Tanana Valley State Forest Tanacross Incorporated Tetlin Native Corporation Tetlin Village Private landowners Developed conceptual harvest plans for most likely local sources of wood biomass: Detailed economic analysis of harvest options Estimated delivered costs of biomass from various sources over the life of the project Identified options for long term supply - timber sale contract - (25 years). Identified issues of costs for harvesting and delivering logs/chips to specified locations Identified Appraisal issues of wood biomass/standing timber (payment to landowner) Renewable Energy Fund Round 6 Grant Application AEA13-006 Grant Application Page 13 of 29 7/3//2012 Long Term Harvest Contract The State of Alaska Department of Natural Resources (DNR) Division of Forestry has been negotiating with AP&T toward completion of an agreement for a 25-year biomass fuel harvest contract, encompassing approximately 27,000 acres of State forestland in the Upper Tanana. The designated 27,000 acres is more than sufficient resources for the required system feedstock, and does not represent the entirety of the sustainable annual yield of the Upper Tanana State Forest, according to DNR’s latest assessments. The proposed system will convert approximately 30,000 green tons of woody biomass per year to heat and power. This will use approximately 750 acres per year (at 40 tons per acre), or a total of 18,750 acres over twenty- five (25) years. This does not take into consideration additional feedstock of standing dead trees from the 2010 wildfire that will likely be added to the acreage available for removal, nor additional acreage from any future wildfires in the area. Tok Area DNR Forester, Jeffrey Herrmanns stated in 2012 that State of Alaska forestlands near the project area could provide much more woody biomass on a sustainable basis. He also states that the wildfire risk is an ongoing danger to communities in the Upper Tanana, and that harvest for energy production will avoid some wildfire fighting costs, while providing compensation to the State for the removed biomass fuel. These suppositions will be confirmed in the final report of the FS, by a thorough forest resource analysis, conducted by an independent Certified Forester, Clare Doig of Forest and Land Management, Inc. 4.2 Existing Energy System 4.2.1 Basic configuration of Existing Energy System Briefly discuss the basic configuration of the existing energy system. Include information about the number, size, age, efficiency, and type of generation. The existing electrical energy market in the Upper Tanana area consists of a local isolated power grid serving the communities of Tok, Tetlin, Dot Lake and Tanacross, as well as the other rural residents of the area. All four communities are on the same local grid and are therefore supplied by the existing diesel power plant. Peak demand has been approximately 1,800 kW, in both winter and summer. Production by the diesel power plant has averaged about 12,000 MWh/yr for the last ten years, with minor fluctuations corresponding to diesel price fluctuations. The completed project, if confirmed as feasible and sustainable, is expected to lower and stabilize electric rates for AP&T’s customers by offsetting diesel. Rates may be reduced as system feedstock costs stabilize and are projected to be 25% or more reduction from current prices. These projections will be confirmed in the FS final report with the latest available data from ISER projections and the results of AP&T’s Forest Resource Analysis. Since diesel costs are expected to remain volatile, this is a major improvement in energy cost and predictability for AP&T’s customers. The addition of other renewable energy sources could result in f urther rate reductions, but until diesel generation can be eliminated, electric rates will continue to have fluctuations and continued cost escalation. Many customers supplement their electrical use with kerosene, oil and gas for generators, as well as for heating. Several customers also use propane for cooking, clothes dryers, hot water heaters, etc. When electric rates stabilize, these other non-renewable fuel sources usage may decline, which would help clean the air and reduce toxic spills, as well as help localize the economy of the region. Energy demand is expected to grow for this area. Stable power costs are attractive to Renewable Energy Fund Round 6 Grant Application AEA13-006 Grant Application Page 14 of 29 7/3//2012 manufacturers and businesses looking to locate in this area. Healthy local economies, based on local natural and human resources can become more self-sustaining. There are 6 gensets in the Tok diesel power plant that supply electricity to all four communities, as follows: Unit #3 = CAT Model D3516, 1320 kW, Purchased / Installed 1999 Unit #4 = CAT/KATO Model 3516, 1135 kW, Purchased / Installed 1989 Unit #5 = CAT/KATO Model 3516, 1135 kW, Purchased / Installed 1995 Unit #7 = CAT Model C175-16, 1800 kW, Installed 2007 (is on loan from CAT as a test unit) Unit #8 = CAT/KATO Model D3508, 440 kW, Purchased / Installed 1985 Unit #9 = CAT/KATO Model 3512C, 1050 kW, Purchased / Installation in progress 2008 The project will reduce the cost of generation by AP&T, and the savings would be passed on to AP&T’s customers in Tetlin, Tok, Tanacross and Dot Lake who currently pay $0.50 per kWh (excluding PCE). A cost savings is projected for ratepayers, when current diesel costs, projected biomass costs and other factors are taken into consideration. Final estimate of savings is subject to final design. 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. Currently much of the power and heat generated in Alaska is from fossil fuel, including coal, diesel, natural gas or nuclear fuels. The need to move away from fossil fuel energy is painfully apparent in rural Alaska with high and escalating costs exacerbated by transportation challenges in rural communities. Biomass is a readily accessible local fuel source that is grossly underutilized as a result of the availability of previously affordable fossil fuels. The proposed Project will use this renewable and clean fuel source, thus minimizing dependence on fossil fuels and demonstrating community- energy sustainability and independence. 4.2.3 Existing Energy Market Discuss existing energy use and its market. Discuss impacts your project may have on energy customers. This Phase III Final Design and Permitting project is a continuation of the work already done to develop the Upper Tanana Biomass CHP project. The existing energy market for the Upper Tanana Biomass CHP Project is the isolated power grid serving the Upper Tanana region, including the communities of Dot Lake, Tetlin, Tanacross, Tok and surrounding areas. The communities are supplied by the Tok diesel power plant. Peak demand is about 1,800 kW. The project does not intend to eliminate the existing diesel generating capacity, but to put it in reserve as backup, rather than primary status. We expect the direct impact on energy customers to be negligible in practical terms, and beneficial in economic and cultural terms. The same reliable electricity grid with a cleaner air shed, more stable energy costs, more local economic stimulation, and lower wildfire risk. The completed project will utilize local biomass woodchips to fuel the system. Biomass fuel is a readily accessible local fuel source that creates local jobs to harvest and process; it is also a resource that is called hazardous fuels by DNR, representing a severe wildfire risk unless managed. Alaska’s seventy-year average annual loss to wildfire is approximately 1,000,000 Renewable Energy Fund Round 6 Grant Application AEA13-006 Grant Application Page 15 of 29 7/3//2012 acres burned annually. The cost of fighting wildfires, calculated from recent (2010) wildfires was up to $10,000 per acre. The environmental cost of a million acres of wildfires per year is virtually incalculable. The CHP System will create direct local employment through the harvest, transportation and processing of the woody biomass required for the System and in operating/maintaining the equipment. On replication, the System has the capacity to result in the construction of multiple Systems throughout Alaska. Each individual System will create up to 35 FTE (full time employee) positions (engineering, fabrication and mechanical/electrical installation) in addition to approximately 2-3 full time System Operator positions and other indirect jobs related to biomass harvesting and System maintenance. Long-term fossil fuel prices are widely expected to rise. In 2013, Ultra Low Sulfur Diesel (ULSD) will be mandated for most power generators, which is projected to be a 20% fuel cost increase. The rise in overall costs of delivered fossil fuels will result in escalating conventional power production costs, and this enhances the urgency of the search for stable cost alternatives. Energy from woody biomass fuel is an ideal stable cost alternative, and has the additional benefit of being “demand power,” available as needed, as opposed to solar and wind power. Currently, the cost per unit of thermal energy derived from fossil fuels is higher (by approximately $4/GJ and escalating) than woody biomass-derived heat. 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 AP&T proposes to contract for Final Design on a 2MW Biomass CHP (combined heat and power) system, as fully described in the (pending) Feasibility Study final report. The system will be designed using reliable commercial technology, proven in similar cold climates, and appropriate to the scale required for this project. • The proposed 2MW system would match the existing load with a small reserve. The technology includes a turndown ratio that allows load matching, and could be integrated with other power inputs from seasonal hydro and existing diesel-fired power. Biomass CHP is demand-power, available as needed, as opposed to wind or solar power that must include battery storage to be available as needed. • The proposed system would be scalable in 2MW increments, or in smaller increments by incorporating ORC (organic rankine cycle) systems or other power generation inputs. An increase of generating capacity to meet additional load could be accomplished to allow for growth by additional business, industrial or community power needs. The biomass CHP system would be designed to be scalable from 2MW in small increments. • Anticipated capacity factor of 100% of historical load, with the existing diesel generators Renewable Energy Fund Round 6 Grant Application AEA13-006 Grant Application Page 16 of 29 7/3//2012 available if needed for peak loads beyond 2MW. • Anticipated annual generation of 12,000 kWh, matching historical power demand. • Anticipated barriers include the possibility of feedstock availability interruptions, mitigated by stockpiling both raw fuel in the form of decked trees, and woodchip storage. • Basic integration concept is as a separate and integrated primary generating system, tied into the existing grid, in parallel to the diesel generators that will assume secondary status. The System would deliver power to the electrical grid in the same manner as the existing system. The primary difference would be the source of fuel for the generators will be local and renewable, rather than non-renewable non-local fossil fuels. 4.3.2 Land Ownership Identify potential land ownership issues, including whether site owners have agreed to the project or how you intend to approach land ownership and access issues. There are no identified land ownership issues for the system site, as AP&T owns the land upon which the project can be located, with nearby alternate sites also available for purchase by AP&T. The five (5) acres of land proposed is suited for industrial purposes and will be provided to the project as part of the matching contributions. The new construction portion of the project is an estimated 17,600 SF metal building for the CHP system and a 30,000 SF shed for woodchip storage. 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 No permits are required for the Final Design and Permitting project; however, permits will be required when construction activities begin. AP&T will issue an RFP to contract with an Environmental and Permitting firm. The anticipated permits may include a development permit, emissions permit, and building permit. Any environmental issues will be identified and mitigated through the Final Design and Permitting project. There are no anticipated barriers to obtaining any of the required permits and AP&T has a process in place that has previously been successful in securing necessary permits and authorizations for AP&T power projects. Renewable Energy Fund Round 6 Grant Application AEA13-006 Grant Application Page 17 of 29 7/3//2012 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 This phase of the project addresses the environmental issues of the project; no construction will take place with this phase. The Final Design and Permitting portion will investigate the potential impact on habitats of threatened or endangered species, any known archaeological or historical resources that may be affected and any potential aesthetic and visual impacts. The proposed Biomass CHP Demonstration Project will take place in the Upper Tanana region, in Tok. AP&T will adequately assess any potential environmental and/or land use issues that may arise from the project, as follows: T&E Species: Investigate if any threatened or endangered species could be affected by the proposed project. Habitat Issues: Investigate if any threatened or endangered species habitat could be affected by the proposed project, as well as any potential impact to migratory animal corridors. Wetlands: The study will investigate any potential affect on any existing body of water, floodplain or wetland. Archaeological Issues: The study would investigate potential effects to historical, archeological or cultural sites. Telecommunications Interference: The study would investigate potential effects regarding telecommunications interference. Aviation Considerations: This project is neither near an airport nor typical flight pattern, nor will the infrastructure be more than 45 feet above ground, well below safe flying elevation. This will be confirmed. Visual & Aesthetic Impacts: The study would investigate potential effects to any visual resources or landscape alterations. A strategic plan to mitigate any identified issues will be developed and initiated in this phase of the project. Renewable Energy Fund Round 6 Grant Application AEA13-006 Grant Application Page 18 of 29 7/3//2012 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 The entire proposed Upper Tanana Biomass CHP Project is expected to cost $18,000,000 for CAPEX; $2,050,000 for this design and permitting phase; and $425,000 for the Feasibility Study, for a total project cost of $20,475,000. For this Phase, AP&T will supply an in-kind match of $60,000 towards the Final Design and Permitting phase of the project, which will include administrative costs, local transportation, meeting space, and expertise of AP&T’s staff. The total cost for this Final Design and Permitting phase is $2,050,000, of which $1,990,000 is requested in grant funds. 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.) There will be no new facilities constructed during the Final Design and Permitting phase. The Feasibility Study final report, due in November 2012, will address the operation and maintenance (O&M) costs associated with the proposed CHP facility. 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 AP&T is a registered and regulated utility, so a power purchase agreement is not applicable. The revenues will be determined by the RCA (Regulatory Commission of Alaska). The RCA regulates the rates, services, and practices of utilities that meet the criteria for a certificate of public convenience and necessity to provide service to the public for compensation. Renewable Energy Fund Round 6 Grant Application AEA13-006 Grant Application Page 19 of 29 7/3//2012 4.4.4 Project Cost Worksheet Complete the cost worksheet form, which provides summary information that will be considered in evaluating the project. 1. Renewable Energy Source The Applicant should demonstrate that the renewable energy resource is available on a sustainable basis. Annual average resource availability. 192,000 tons annual woody biomass woodchip feedstock, 100 year rotation (DNR estimate) 2. Existing Energy Generation and Usage a) Basic configuration (if system is part of the Railbelt 1 grid, leave this section blank) i. Number of generators/boilers/other Six Diesel Gensets at Tok ii. Rated capacity of generators/boilers/other 6910 kWe (total of 6 units) iii. Generator/boilers/other type Diesel CAT (list in 4.2.1) iv. Age of generators/boilers/other 2-24 years old (list in 4.2.1) v. Efficiency of generators/boilers/other 14.41kWh/gallon (2011 average from PCE Report) b) Annual O&M cost (if system is part of the Railbelt grid, leave this section blank) i. Annual O&M cost for labor $416.896 ii. Annual O&M cost for non-labor $322,341 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] 10,902,597 kWh generated in 2011 (PCE Report) ii. Fuel usage Diesel [gal] (1,268,323 gal 2008; 871,129 gal 2009) 756,791 gal 2011 Other iii. Peak Load 2MWe iv. Average Load 1.4MWe v. Minimum Load .9MWe vi. Efficiency 14.41/kWh vii. Future trends Growth projected at 2% d) Annual heating fuel usage (fill in as applicable) i. Diesel [gal or MMBtu] 190,000 gallons/year for commercial heating (2012 survey); 90,000 gallons/year residential (est) ii. Electricity [kWh] iii. Propane [gal or MMBtu] 3,000 gallons (Northern Energy-distributor) 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 AEA13-006 Grant Application Page 20 of 29 7/3//2012 iv. Coal [tons or MMBtu] v. Wood [cords, green tons, dry tons] 4,200 cords used in region (DNR est.) vi. Other 3. 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] Biomass CHP 1.9MW net electrical 10+MMBtu/hr net usable thermal b) Proposed annual electricity or heat production (fill in as applicable) i. Electricity [kWh] 10,400,000 kWh ii. Heat [MMBtu] 76,800,000 MMBtu 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] 15,000 dry tons (30,000 green tons) iv. Other 4. Project Cost a) Total capital cost of new system $18,200,000. b) Development cost $2,730,000 (Est. 15% of CAPEX) c) Annual O&M cost of new system $364,000 d) Annual fuel cost 30,000t/yr biomass x $47/t = $1,410,000 est. 5. Project Benefits a) Amount of fuel displaced for i. Electricity 95% of diesel = 950,000 gallons ii. Heat 90,000 gallons est. iii. Transportation N/A b) Current price of displaced fuel 1,000,000 gal x $3.36 = $3,360,000 (2011–PCE) 1,205,000 gal x $3.29 = $3,964,450 (2008-PCE) c) Other economic benefits Local jobs, lower power costs, reduced wildfire risk d) Alaska public benefits Lower PCE (power cost equalization) expenses 6. Power Purchase/Sales Price - N/A Renewable Energy Fund Round 6 Grant Application AEA13-006 Grant Application Page 21 of 29 7/3//2012 7. Project Analysis a) Basic Economic Analysis Project benefit/cost ratio TBD in FS final report (due November 2012) Payback (years) TBD in FS final report 4.4.5 Proposed Biomass System Information Please address the following items, if know. (For Biomass Projects Only) • What woody biomass technology will be installed (cord wood, pellets, chips, briquettes, pucks). Woody biomass woodchips from local area forest sources. • Efficiency of the biomass technology. 18% Biomass BTU/Power conversion. • Thermal or electric application. Both electrical and thermal application (power generation and captured heat). • Boiler efficiency. 72% (steam). • Displaced fuel type and amount. Diesel fuel, approximately 1 million gallons annually. • Estimated tons of wood pellets or chips (specify) to be used per year, and average moisture percentage. Estimated 15,000 dry tons (30,000 green tons), usable up to 40+% MC. • Estimated cords of wood to be used per year, specify whether dry or green and the moisture percentage. N/A • Ownership/Accessibility. Who owns the land and are their limitations and restrictions to accessing the biomass resource? The majority of the woody biomass is expected to be accessed from State of Alaska forest lands, through a long-term biomass fuel harvest contract. • Inventory data. How much biomass is available on an annual basis and what types (species) are there, if known? DNR Forestry estimates an annual sustained available tonnage of 192,000 tons of mixed species on a 100-year rotation, in the Upper Tanana on State Forest land. (Doug Hanson, Inventory Forester, Alaska Department of Natural Resources, Division of Forestry, Northern Region, 2012 update) This DNR inventory update documents significantly more tonnage is available than is needed for this project. Renewable Energy Fund Round 6 Grant Application AEA13-006 Grant Application Page 22 of 29 7/3//2012 SECTION 5– PROJECT BENEFIT Explain the economic and public benefits of your project. Include direct cost savings, and how the people of Alaska will benefit from the project. The benefits information should include the following: • Potential annual fuel displacement (gallons and dollars) over the lifetime of the evaluated renewable energy project • Anticipated annual revenue (based on i.e. a Proposed Power Purchase Agreement price, RCA tariff, or cost based rate) • Potential additional annual incentives (i.e. tax credits) • Potential additional annual revenue streams (i.e. green tag sales or other renewable energy subsidies or programs that might be available) • Discuss the non-economic public benefits to Alaskans over the lifetime of the project The potential benefits of the deployment of the first viable and replicable community-scale biomass CHP system in rural Alaska will be many and significant: These numbers updated on September 12, 2012: • CHP system offset of 95% of the 2011 consumption of 756,791 gallons of diesel fuel = 718,951 gallons saved annually • Potential fuel cost savings of $1,005,677 in year 1. (at 2011 price of $3.36/gal ULSD ultra low sulfur diesel) 30,000 Tons Biomass Fuel @ $47/T=$1,410,000. versus 718,951 gals diesel fuel (saved) @ $3.36/gal = $2,415,677 =$1,005,677 annual fuel savings projected Ultra Low Sulfur Diesel (ULSD) use in the Tok generators has been mandated, at a 20% cost increase, in addition to chronic cost increases. Over a 20 year project: Projected offset of diesel fuel is estimated to be over 19M gallons. Projected fuel cost savings is estimated to be over $20M (at current diesel costs). • Possible Carbon Credit, Green Tag and/or other renewable energy incentive income if these programs survive. Non-Economic Benefits This project will demonstrate the feasibility of woody biomass fuel to generate power and heat at community scale in Alaska. The potential benefit of replication in other Alaskan sites is obvious. An additional benefit will be from the realization of potential—Alaska has enormous natural resources and great potential to be a leader in renewable energy deployments. This project could be groundbreaking in demonstrating an alternative to fossil fuel generation of demand power. The System to be operated by AP&T for the Upper Tanana power grid will have a significant net positive environmental impact and will be designed as a Biomass CHP showcase. The System will be designed to operate at low PM emissions levels, with no discharges of wastewater or other pollutants. Renewable Energy Fund Round 6 Grant Application AEA13-006 Grant Application Page 23 of 29 7/3//2012 The System will be designed to deliver peak energy production of 30 MMBTU/hr (32 GJ/hr) using locally sourced wood fuel delivered to the site. The System will also include heat recovery equipment and which may be integrated into a district energy system, or sold to nearby manufacturing process users. The System will be designed to meet or exceed all local, state and federal emission requirements. This system will increase the potential viability for a biomass densification manufacturing plant, as well as other manufacturing and processing facilities. Stable priced power has been shown in other communities to catalyze further economic development and job creation. Job creation and workforce development are also benefits of using sustainable local fuel versus imported fossil fuels. Careful management of local forests for multiple uses including biomass energy also reduces wildfire risk. 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 AP&T proposes to build on the existing power generation and distribution business structure, and will consider options including a community distributed heat distribution system (connected to the proposed Tok school heat loop project). Additional concepts include sales of captured heat from the biomass CHP system for use in adjacent operations, potentially including greenhouses, densified wood product manufacturing, and other heat users. The current structure is sustainable as a power utility, with revenues from ratepayers covering fuel costs, O&M and regulated profit structure. As a regulated utility, AP&T is already required to report its revenues, O&M and power generation fuel costs. Savings and benefits will be directly experienced by the utility ratepayers. 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. AP&T has managed all project efforts to date. As this is a complex and large-scale project with multiple partners and entities involved, many steps have already been taken to move the project forward. These steps and actions include: • Phase II Feasibility Study final report is due November 2012 (REF Round IV grant). Renewable Energy Fund Round 6 Grant Application AEA13-006 Grant Application Page 24 of 29 7/3//2012 • Strategic planning meetings to develop a project management plan, establish long-term feedstock sustainability and other elements of the project. • Feasibility Study research on the viability of renewable community-scale biomass combined heat & power systems in rural communities, specifically in the unique environment of Alaska. • Established strategic partnerships with a variety of entities, including state, federal, and private entities that all have resources that are needed for the project. • Working with State of Alaska DNR Forestry on a long-term biomass fuel harvest contract. AP&T has a proven track record as an electrical utility as well as a developer of hydroelectric and other renewable energy projects. AP&T currently operates six hydroelectric projects, two storage, and four run-of-rivers, with the Reynolds Creek Hydro Project under construction. Since 2001 AP&T has installed over seventy-five (75) miles of 34.5 kV transmission line on Prince of Wales Island, Alaska, all with in-house personnel. Many more miles of transmission lines, substations and transformers have been constructed since then. During 2009-2010, AP&T designed, engineered, permitted, and constructed the 2MWe run-of-river Kasidaya Creek Hydroelectric Project. Several of the projects were funded by grants, demonstrating significant grant administration experience. AP&T is familiar with and has successfully obtained AEA funding in the past, and has regularly and successfully met funding requirements and reports. 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. Please see attached letters of support. This project enjoys widespread support in the Upper Tanana, and throughout Alaska. Letters included are from earlier grant applications for this same project. The names “Alaska Biomass CHP Project” and “Upper Tanana Biomass CHP Project” are interchangeable. This project has written support from: 1. Alaska Department of Natural Resources (DNR)– Forestry Division 2. Tok Umbrella Corporation 3. Alaska Center for Energy & Power (ACEP) 4. National Renewable Energy Lab (NREL) 5. University of Alaska Fairbanks (UAF) School of Natural Resources & Agricultural Sciences 6. Cold Climate Housing Research Center (CCHRC) No active opposition to the Biomass CHP project has been identified, and AP&T has done significant outreach to the communities in the region and in Fairbanks. Potentially concerned citizens and groups have been invited to participate in public meetings to express any concerns. Renewable Energy Fund Round 6 Grant Application AEA13-006 Grant Application Page 25 of 29 7/3//2012 SECTION 9 – GRANT BUDGET Tell us how much you want in grant funds Include any investments to date and funding sources, how much is being requested in grant funds, and additional investments you will make as an applicant. Provide a narrative summary regarding funding sources and your financial commitment to the project. Milestones to be Completed AEA Request AP&T Share Total 1. Project scoping and contractor orientation $15,000 $6,500 $21,500 2. Detailed energy resource assessment $0 $0 $0 3. Identification of land and regulatory issues $10,000 $6,500 $16,500 4. Permitting and environmental analysis $125,000 $6,500 $131,500 5. Detailed analysis of current cost of energy & future market $0 $6,500 $6,500 6. Assessment of alternatives completed $20,000 $6,000 $26,000 7. Final design and costs estimate $1,790,000 $6,000 $1,796,000 8. Detailed economic and financial analyses $0 $6,000 $6,000 9. Conceptual business & operations plan $0 $6,000 $6,000 10. Final report and recommendations $30,000 $10,000 $40,000 Total Project Cost $1,990,000 $60,000 $2,050,000 Alaska Power & Telephone has already invested over $160,000 and over 2 years in CHP technology research, pre-feasibility work, Feasibility Study, and negotiations for a long-term biomass harvest contract for this project. The cost projections for the Final Design and Permitting phase of this project are $2,050,000, including AP&T’s cash and in-kind contributions for staff, facilities, offices, and administration. AP&T is committed to the long-term success of this project, as demonstrated by the time and expense already invested, and the ongoing dedication of staff and contractors. Budget Category Phase III Match Total Request Direct Labor and Benefits $65,000 $55,000 $120,000 Travel & Per Diem: $0 $5,000 $5,000 Equipment $0 $0 $0 Materials and Supplies $0 $0 $0 Contractual Services $1,925,000 $0 $1,925,000 Construction Services $0 $0 $0 Other $0 $0 $0 TOTAL $1,990,000 $60,000 $2,050,000 Renewable Energy Fund Round 6 Grant Application AEA13-006 Grant Application Page 26 of 29 7/3//2012 Milestone or Task PHASE III Design and Permitting Anticipated Completion Date RE- Fund Grant Funds Grantee Matching Funds Source of Matching Funds: Cash/In- kind/Federal Grants/Other State Grants/Other TOTALS 1. Project scoping and contractor solicitation completed Month 1 $15,000 $6,500 AP&T In-Kind $21,500 2. Permit applications completed Month 6 $0 $0 AP&T In-Kind $0 3. Final environmental assessment and mitigation plans completed Month 6 $10,000 $6,500 AP&T In-Kind $16,500 4. Resolution of land use, right of way issues Month 6 $125,000 $6,500 AP&T In-Kind $131,500 5. Permitting, rights of way, site control completed Month 6 $0 $6,500 AP&T In-Kind $6,500 6. Final system design completed Month 5 $20,000 $6,000 AP&T In-Kind $26,000 7. Final cost estimate completed Month 6 $1,790,000 $6,000 AP&T In-Kind $1,796,000 8. Updated economic and financial analyses completed Month 6 $0 $6,000 AP&T In-Kind $6,000 9. Power or heat sale agreements in place Month 6 $0 $6,000 AP&T In-Kind $6,000 10.Final business and operational plan completed Month 9 $30,000 $10,000 AP&T In-Kind $40,000 TOTALS $1,990,000 $60,000 $2,050,000 Budget Categories: Direct Labor & Benefits $65,000 $55,000 $120,000 Travel & Per Diem $0 $5,000 $5,000 Equipment $0 $0 $0 Materials & Supplies $0 $0 $0 Contractual Services $1,925,000 $0 $1,925,000 Construction Services $0 $0 $0 Other $0 $0 $0 TOTALS $1,990,000 $60,000 $2,050,000 Renewable Energy Fund Round 6 Grant Application AEA13-006 Grant Application Page 27 of 29 7/3//2012 Project Milestones that should be addressed in Budget Proposal Reconnaissance Feasibility Design and Permitting Construction 1. Project scoping and contractor solicitation. 2. Resource identification and analysis 3. Land use, permitting, and environmental analysis 4. Preliminary design analysis and cost 5. Cost of energy and market analysis 6. Simple economic analysis 7. Final report and recommendations 1. Project scoping and contractor solicitation. 2. Detailed energy resource analysis 3. Identification of land and regulatory issues, 4. Permitting and environmental analysis 5. Detailed analysis of existing and future energy costs and markets 6. Assessment of alternatives 7. Conceptual design analysis and cost estimate 8. Detailed economic and financial analysis 9, Conceptual business and operations plans 10. Final report and recommendations 1. Project scoping and contractor solicitation for planning and design 2. Permit applications (as needed) 3. Final environmental assessment and mitigation plans (as needed) 4. Resolution of land use, right of way issues 5. Permit approvals 6. Final system design 7. Engineers cost estimate 8. Updated economic and financial analysis 9. Negotiated power sales agreements with approved rates 10. Final business and operational plan 1. Confirmation that all design and feasibility requirements are complete. 2. Completion of bid documents 3. Contractor/vendor selection and award 4. Construction Phases – Each project will have unique construction phases, limitations, and schedule constraints which should be identified by the grantee 5. Integration and testing 6. Decommissioning old systems 7. Final Acceptance, Commissioning and Start-up 8. Operations Reporting Renewable Energy Fund Round 6 Grant Application AEA13-006 Grant Application Page 28 of 29 7/3//2012 SECTION 10 – AUTHORIZED SIGNERS FORM Community/Grantee Name: Alaska Power & Telephone Regular Election is held: Date: Authorized Grant Signer(s): Printed Name Title Term Signature Robert Grimm CEO I authorize the above person(s) to sign Grant Documents: (Highest ranking organization/community/municipal official) Printed Name Title Term Signature Grantee Contact Information: Mailing Address: P.O. Box 3222, Port Townsend, WA 98368 Phone Number: 360-385-1733 Fax Number: 360-385-5177 E-mail Address: bobg@aptalaska.com Federal Tax ID #: 92-0153693 Please submit an updated form whenever there is a change to the above information. Renewable Energy Fund Round 6 Grant Application AEA13-006 Grant Application Page 29 of 29 7/3//2012 SECTION 11 – ADDITIONAL DOCUMENTATION AND CERTIFICATION SUBMIT THE FOLLOWING DOCUMENTS WITH YOUR APPLICATION: A. Contact information, resumes of Applicant’s Project Manager, key staff, partners, consultants, and suppliers per application form Section 3.1 and 3.4. Applicants are asked to separate resumes submitted with applications, if the individuals do not want their resumes posted. B. Letters demonstrating local support per application form Section 8. C. An electronic version of the entire application on CD per RFA Section 1.7. D. Governing Body Resolution or other formal action taken by the applicant’s governing body or management per RFA Section 1.4 that: - Commits the organization to provide the matching resources for project at the match amounts indicated in the application. - Authorizes the individual who signs the application has the authority to commit the organization to the obligations under the grant. - Provides as point of contact to represent the applicant for purposes of this application. - Certifies the applicant is in compliance with applicable federal, state, and local, laws including existing credit and federal tax obligations. E. CERTIFICATION The undersigned certifies that this application for a renewable energy grant is truthful and correct, and that the applicant is in compliance with, and will continue to comply with, all federal and state laws including existing credit and federal tax obligations and that they can indeed commit the entity to these obligations. Print Name Signature Title Date