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HomeMy WebLinkAboutRussian Mission Rnd 6 Grant FINALRenewable Energy Fund Round 6 Grant Application AEA 13-006 Application Page 1 of 26 September 2012 Russian Mission Wind Feasibility Project 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 Russian Mission Wind Feasibility Project AEA13-006 Grant Application Page 2 of 26 September 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) Russian Mission Wind Feasibility and Conceptual Design 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. Russian Mission (population 303) is located on the west bank of the Yukon River in the Yukon- Kuskokwim Delta, 25 miles southeast of Marshall. It lies 70 air miles northeast of Bethel and 376 miles west of Anchorage. It lies at approximately 61.785000 North Latitude and -161.320280 West Longitude. (Sec. 31, T020N, R066W, Seward Meridian.) 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 community of Russian Mission, Alaska. 2.3 PROJECT TYPE Put X in boxes as appropriate 2.3.1 Renewable Resource Type X Wind Biomass or Biofuels Hydro, including run of river Transmission of Renewable Energy Geothermal, including Heat Pumps Small Natural Gas Heat Recovery from existing sources Hydrokinetic Solar Storage of Renewable Other (Describe) 2.3.2 Proposed Grant Funded Phase(s) for this Request (Check all that apply) Pre-Construction Construction Reconnaissance Design and Permitting X Feasibility Construction and Commissioning X Conceptual Design Renewable Energy Fund Round 6 Grant Application Russian Mission Wind Feasibility Project AEA13-006 Grant Application Page 3 of 26 September 2012 2.4 PROJECT DESCRIPTION Provide a brief one paragraph description of your proposed project. AVEC proposes to install a wind meteorological (met) tower and complete geotechnical work to determine the feasibility of installing wind turbines in Russian Mission. The work will involve obtaining a letter of non-objection from the landowner for the placement of the met tower and geotechnical fieldwork, permitting, transporting and installing a met tower at this location, studying the wind resource for one year, and conducting a geotechnical investigation to determine the soil conditions and needed engineering at the site. A concep tual design will be created based on the outcome of the met tower recordings and geotechnical investigation. Permits and site control will be obtained for the conceptual design of this project. 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 project would be to determine whether the wind resources are suitable to provide power to the community and to prepare a conceptual design of a wind facility. Assuming installation of a 150 kilowatt (kW) capacity system, it would produce 315,360 kilowatt hours (kWh) annually. The possible displacement of diesel fuel used for village power generation in Russian Mission could be 21,854 gallons per year. Using AVEC’s 2011 average cost of fuel ($3.76/gallon), this project could save about $82,171 during the first year of operation and $1,643,420 over the lifetime of the project. Russian Mission is a traditional Yup’ik Eskimo village that focuses on a subsistence lifestyle. Local employment opportunities are limited to the school, local business, fishing and seasonal employment firefighting for BLM. The 2006-2010 American Community Survey (ACS) established about twenty-seven percent of all residents had incomes below the poverty level, with the median household income of $46,875. Establishing a reliable renewable power resource would allow for more socio-economic stability. Renewable Energy Fund Round 6 Grant Application Russian Mission Wind Feasibility Project AEA13-006 Grant Application Page 4 of 26 September 2012 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 the project is $150,000 of which $142,500 is requested in grant funds from AEA. The remaining $7,500 (5%) 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. $142,500 2.7.2 Cash match to be provided $ 7,500 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) $150,000 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) $1,530,000 2.7.7 Estimated Direct Financial Benefit (Savings) $ 82,171 (year 1) $1,643,420 (lifetime) 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.) $ to be determined Renewable Energy Fund Round 6 Grant Application Russian Mission Wind Feasibility Project AEA13-006 Grant Application Page 5 of 26 September 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 would provide overall project management and oversight. AVEC is the electric utility serving Russian Mission. To further support the AVEC team in project delivery, wind resource, engineering, and environmental consultants would be selected. Brent Petrie, Manager, Community Development and Key Accounts, would lead the project management team consisting of AVEC staff, consultants, and contractors. He has worked for AVEC since 1998, where he manages the development of alternatives to diesel generation for AVEC such as using wind, hydropower, and heat recovery. He also manages relationships with AVEC’s largest customers and is the project manager for AVEC’s many construction projects as an energy partner of the federally funded Denali Commission. Mr. Petrie has 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, the President and CEO of AVEC. Meera Kohler has more than 30 years of experience in the Alaska electric utility industry. She was appointed Manager of Administration and Finance at Cordova Electric Cooperative in 1983, General Manager of Naknek Electric Association in 1990, and General Manager of Municipal Light & Power in Anchorage in 1997. Since May 2000, Ms. Kohler has been the President and CEO of AVEC and in this position has the ultimate grant and project responsibilities. Renewable Energy Fund Round 6 Grant Application Russian Mission Wind Feasibility Project AEA13-006 Grant Application Page 6 of 26 September 2012 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: Authorization to Proceed: August 1, 2013 Obtain Site Control/Right of Entry/Permits: September 2013 Ship Met Tower: September 2013 Erect Met Tower: September 2013 Complete Monitor Met Tower Data: October 2013-September 2014 Geotech Field Work: October 2013 Geotech Report: December 2013 Dismantle Met Tower: September 2014 Wind Resource Report: October 2014 Conceptual Design and Cost Estimate: November 2014 The schedule organized by AEA milestones is as follows: Milestones Tasks Start Date End Date 1. Project scoping and contractor solicitation AVEC would select contractor(s) for the wind feasibility, geotechnical analysis, conceptual design, and permitting immediately following AEA’s authorization to proceed. August 1, 2013 August 15, 2013 2. Detailed energy resource analysis To initiate the Wind Resource Analysis before winter, AVEC would purchase or refurbish (as necessary), ship, and erect the met tower in September 2013. AVEC would immediately seek approvals from permitting agencies, starting the process before the grant is awarded to ensure that the met tower can be installed in the late fall. The earlier the met tower is collecting data, the earlier AVEC would have the wind resource data to ascertain the suitability of use of this renewable resource. Monitoring of the met tower would continue until September 2014, when the met tower would be dismantled. The wind resource report would be drafted by the end of October 2014. September 15, 2013 October 31, 2014 Renewable Energy Fund Round 6 Grant Application Russian Mission Wind Feasibility Project AEA13-006 Grant Application Page 7 of 26 September 2012 3. Identification and resolution of land issues AVEC would work with the Russian Mission Native Corp to obtain a letter of non-objection for the placement of the met tower and geotechnical work, prior to the work. AVEC would initiate negotiations of permanent site control to place turbines, if feasible September 1, 2013 June 1, 2014 4. Detailed analysis of current cost of energy and future market AVEC would analyze the existing and future energy costs and markets in Russian Mission. The information would be based on AVEC records and community plans. A community meeting would be held to determine future energy markets. Information regarding energy markets would be incorporated into the CDR. February 1, 2014 March 30, 2014 5. Detailed economic and financial analyses An economic and financial analysis, which examines potential final design and construction costs, operating and maintenance costs, user rates, and other funding mechanisms, would be developed and included in the CDR. June 1, 2014 August 30, 2014 6. Conceptual business and operations plan Draft business and operational plans would be developed working with the City of Russian Mission and the Russian Mission Native Corp. The conceptual plan would include draft recovered heat agreements, if feasible. June 1, 2014 October 31, 2014 7. Conceptual design and costs estimate Various wind turbines would be examined to determine which would be best suited to fit the lower energy demand and single- phase electric system in Russian Mission. A reconnaissance level geotechnical study would be completed. A conceptual design and cost estimate would be prepared using information gathered from the wind study and geotechnical fieldwork. September 1, 2014 November 1, 2014 8. Permitting and environmental analysis Research would be completed to determine needed environmental permits for the design and construction phases of the project. September 15, 2014 December 15, 2014 9. Final report and recommendations All of the memoranda and reports written for the project would be combined in a final report and submitted to AEA. The December 31, 2014 Renewable Energy Fund Round 6 Grant Application Russian Mission Wind Feasibility Project AEA13-006 Grant Application Page 8 of 26 September 2012 Final CDR would include the following information:  Wind Resource  Site Control  Existing and Future Energy Costs and Markets  Economic and Financial Analysis  Conceptual Business and Operations Plan  Geotechnical Report  Conceptual Design Analysis and Cost Estimate, including a turbines analysis  Environmental Permits 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 would 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 will maintain ultimate authority programmatically and financially.  Brent Petrie, Manager, Community Development and Key Accounts, would lead the project management team consisting of AVEC staff, consultants, and contractors. Together with his group, Brent would provide coordination of the installation of the met tower, geotechnical work, conceptual design, and permitting. 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. He will also be responsible for reporting directly to AEA on the status of the project.  Bill Stamm, Manager of Engineering, would provide technical assistance and information on the existing power system and possible issues and project study needs.  Debbie Bullock, Manager of Administrative Services, would provide support in Renewable Energy Fund Round 6 Grant Application Russian Mission Wind Feasibility Project AEA13-006 Grant Application Page 9 of 26 September 2012 accounting, payables, financial reporting, and capitalization of assets in accordance with AEA guidelines.  Anna Sattler, Community Liaison, would communicate directly with Russian Mission 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:  Obtaining site control/access and permits for the installation of the met tower and geotechnical work  Selecting, coordinating, and managing the wind resource, geotechnical, engineering, and permitting consultants and ensuring that their deliverables are on time and within budget  Working with AVEC’s Community Liaison to develop the Existing and Future Energy Costs and Markets Memorandum and the Conceptual Business and Operating Plan  Working to develop the Economic and Financial Analysis Contractors for this project would include:  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. Doug Vaught’s (V3’s owner) resume is attached. V3 would:  Consult on the installation, operation, and maintenance of the met tower  Draft the wind resource report  Geotechnical consultant. AVEC would select and employ an experienced geotechnical consultant who would:  Conduct a reconnaissance level geotechnical and natural hazards field study and report of the project area  Engineering consultant. AVEC would select and employ an engineering consultant who would:  Provide conceptual design and engineering specifications for the wind turbines  Environmental Consultant. AVEC currently has an on-call contract with Solstice Alaska Consulting, Inc. for environmental permitting. It is likely that Solstice would work on this project. Robin Reich’s (Solstice’s president) resume is attached. Solstice would:  Consult with agencies  Develop and submit permit applications for the met tower  Document permit needs for future wind project Selection Process for Contractors: The geotechnical and engineering consultant selection would be based upon technical competencies, past performance, written proposal quality, cost, and general consensus from an internal AVEC technical steering committee. The selection of the consultant would occur in strict conformity with AVEC’s procurement policies, and conformance with OMB circulars. Renewable Energy Fund Round 6 Grant Application Russian Mission Wind Feasibility Project AEA13-006 Grant Application Page 10 of 26 September 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. AVEC would require that monthly written progress reports be provided with each invoice submitted from contractors. The progress reports would include a summary of tasks completed, issues or problems experienced, upcoming tasks, and contractor’s needs from AVEC. Project progress reports would be collected, combined, and supplemented as necessary and forwarded as one report to the AEA project manager each quarter. Semi-annual face-to-face meetings would occur between AVEC and AEA to discuss the status of all wind projects funded through the AEA Renewable Energy Grants program. Individual project meetings would be held, as required or requested by AEA. Meera Kohler, President and CEO, is AVEC’s alternative contact. 3.5 Project Risk Discuss potential problems and how you would address them. Site Control/Access. Sometimes site control for the placement of met towers or turbines is difficult; however, because the community supports the project (letters of support have been received from all community entities), it is not expected that gaining site control would be difficult. Weather. Weather could delay geotechnical fieldwork and/or the erection of the met tower; however, experienced consultants and contractors, familiar with Alaskan weather conditions, would be selected. It is unlikely that a delay in the total project schedule would occur if the fieldwork or erection of the met tower is delayed. It is possible to erect the met tower during winter months. The met tower would be installed to handle the Russian Mission’s winter weather conditions. The met tower would be monitored by local AVEC personnel to ensure the met tower is up and functioning properly throughout the year. Construction Funding. By having the project designed and permitted, AVEC would be prepared to capitalize on many funding opportunities. Permitting. Permits for the met tower would be acquired, including approvals for the Federal Aviation Administration and the U.S. Fish and Wildlife Service. AVEC would hire an environmental consultant familiar with permitting wind projects in Alaska. Early consultation with agencies would occur 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. Renewable Energy Fund Round 6 Grant Application Russian Mission Wind Feasibility Project AEA13-006 Grant Application Page 11 of 26 September 2012 SECTION 4 – PROJECT DESCRIPTION AND TASKS  The level of information will vary according to phase(s) of the project you propose to undertake with grant funds.  If some work has already been completed on your project and you are requesting funding for an advanced phase, submit information sufficient to demonstrate that the preceding phases are satisfied and funding for an advanced phase is warranted. 4.1 Proposed Energy Resource Describe the potential extent/amount of the energy resource that is available. Discuss the pros and cons of your proposed energy resource vs. other alternatives that may be available for the market to be served by your project. For pre-construction applications, describe the resource to the extent known. For design and permitting or construction projects, please provide feasibility documents, design documents, and permitting documents (if applicable) as attachments to this application. Russian Mission experiences heavy northern winds during the fall and winter months. This project will study the effects these winds will have on reducing the high cost of diesel fuel generation. Class 4 wind is assumed and the appropriate total rating would be determ ined by this feasibility study. 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 power generation system in Russian Mission consists of 3 diesel engine generators: 250 kilowatt (kW) Cummins LTA10 1800, a 363kW Detroit Diesel S60K4c 1800, and a 236kW Detroit Diesel S60K4c 1200, which were installed in 1989, 2010, and 1994 respectively. Individual generator efficiency is not tracked, but the aggregate diesel generator efficiency in 2011 was 13.00 kilowatt hours per gallon (kWh/gallon). 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. Existing energy infrastructure in Russian Mission is diesel fuel for electrical power generation, heating oil for boiler (thermal) and home heating, wood burning for residential heating, and diesel and gasoline fuel for transportation needs. Between January 2011 and December 2011, 87,943 gallons of diesel fuel were consumed to generate 1,141,530kWh at the AVEC facilities. The anticipated effects are less dependence on diesel fuel for electrical power generation, decreasing generator operations and maintenance costs that will enable generators to last longer and need fewer overhauls. Renewable Energy Fund Round 6 Grant Application Russian Mission Wind Feasibility Project AEA13-006 Grant Application Page 12 of 26 September 2012 4.2.3 Existing Energy Market Discuss existing energy use and its market. Discuss impacts your project may have on energy customers. Russian Mission has a stand-alone electric power system with no intertie or connection beyond the village itself. 1,082,431kWh were consumed in 2011, with the highest loads during the late fall and winter months. If this study finds that winds are suitable, the addition of a wind turbine to the electrical generation system could reduce the amount diesel fuel consumed for power generation. Providing the residents and local businesses with a reliable and renewable energy source wou ld allow the community to maintain essential community resources. In Russian Mission, water is obtained from wells and is treated. The community facilities such as t he school and homes are connected to a piped water and sewer system. Reliable 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 inter ruptions in service. Russian Mission is an isolated village located on the Yukon River that is accessible by barge and small boat during the summer months, but primarily relies on air transportation for goods, mail and passenger service. Dependable electric service is essential to maintaining vital navigation aids for the safe operation of aircraft. Runway lights, automated weather observation stations, VASI lights, DME’s and VOR’s are all powered by electricity. 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. Reliable telephone service and tele-medicine require reliable electric service. Being a traditional Yup’ik Eskimo village, Russian Mission residents rely on fishing, hunting and trapping to support their subsistence lifestyle. Dependable electric service is vital for the refrigeration of perishable food stuffs. Like all of Alaska, Russian Mission is subject to long periods of darkness. Reliable electric service is essential for the operation of home lighting, streetlights, and community buildings. Outside lighting greatly improves the safety of village residents. The high cost of electricity is particularly difficult for families and a major hindrance for any economic development to occur in already impoverished communities. This project will allow the community to plan and budget for the future. Sources: Alaska Community Database. Renewable Energy Fund Round 6 Grant Application Russian Mission Wind Feasibility Project AEA13-006 Grant Application Page 13 of 26 September 2012 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 Renewable Energy Technology. AVEC plans to conduct a feasibility analysis, resources assessment, conceptual design, and permitting to assess the possibility of using wind power in Russian Mission. If the wind resource proves suitable and funding is obtained, wind turbines would be installed to serve the community. Currently, AVEC anticipates that a 150kW capacity system could be installed; however, this study will assist in determining the best wind energy generation alternative. Optimum installed capacity/Anticipated capacity factor/Anticipated annual generation. The purpose of this work is to gather background information to plan a future alternative energy facility. Anticipated capacity and generation would be examined for a number of turbine types to determine the best option for the community. Anticipated barriers. The potential barriers to success of this project include weather, permitting, site control, and construction funding. Weather is a minor barrier and does not pose a threat to the completion of this project. Permitting, based on an initial investigation, does not appear to be a significant hurdle to completing this phase of the project. Construction f unding would be easier to obtain with design and permits in hand. Site control should not be difficult to obtain, since the City, Tribe, and Russian Mission Native Corporation support the project (See Section 8 and Tab B). Basic integration concept/Delivery methods. The wind turbines would need to interconnect with the existing diesel power plant. Secondary load control would dispatch boilers as required to use excess wind energy while allowing the diesel generators to continue running at efficient levels. Conceptual design, to be completed as a part of this project, would detail how power from a wind turbine would be integrated and delivered into the existing system in Russian Mission. The delivery method would be examined, to determine what turbine type would be best suited for the system, area, and load. Renewable Energy Fund Round 6 Grant Application Russian Mission Wind Feasibility Project AEA13-006 Grant Application Page 14 of 26 September 2012 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. AVEC has not obtained site control for the placement of the met tower or conducting geotechnical fieldwork. A letter of non-objection would be sought from the corporation or city, depending on location, after project funding is assured. Starting with a community mee ting to announce that the project has been funded, AVEC’s community liaison would lead the effort to gain site control. Further investigation to determine the best location for the met tower and possibly future turbines would be completed prior to grant award. Since the major landholders support the project (See Section 8 and Tab B), site control is not expected to be obstacle to the placement of the met tower and conducting geotechnical fieldwork. 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. The met tower placement would be selected based on airspace availability and limitations to meet the FAA’s Notice Criteria. If the project proves feasible and the turbine location and type have been selected, AVEC would seek a no-hazard determination from FAA for the potential turbines. 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 FAA determination for the turbines. 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 install the met tower. A finding letter stating that the project would not be expected to impact threatened or endangered species or birds would be drafted and submitted to the USFWS once AVEC is assured this project is funded. It is expected that AVEC would receive concurrence from the Service within one month. The authorization would be issued prior to initiating met tower work in September 2013. Clean Water Act (Section 401) Permit. If the met tower is erected within designated wetlands, a US Army Corps of Engineers authorization would be required. Because of the limited footprint of the met tower and geotechnical work, a “Nationwide Permit” would be sought. The application/preconstruction notice would be submitted to the Corps once funding is assured, and the permit would be issued prior to initiating met tower work in September 20 13. Renewable Energy Fund Round 6 Grant Application Russian Mission Wind Feasibility Project AEA13-006 Grant Application Page 15 of 26 September 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 Threatened or endangered species. The U.S. Fish and Wildlife Service would be consulted to ensure that installation of a met tower would have no effect on threatened or endangered species. If clearing is required for the installation of the met tower, it 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. If the met tower is placed in designated wetlands, a U.S. Army Corps of Engineers’ wetlands permit would be needed. Archaeological and historical resources. Compliance with the National Historic Preservation Act and consultation with the State Historic Preservation Officer would be conducted prior to construction of the wind turbines. Land development constraints. No land development constraints are currently identified; however, if any should arise, AVEC will work with the appropriate agencies to ensure the project is in compliance. Telecommunications interference. Met tower placement location would be selected as to not interfere with telecommunication services. Aviation. The met tower placement would be selected based on airspace availability and limitations to meet the FAA’s Notice Criteria. Visual, aesthetics impacts. If final data supports placement of wind turbines, AVEC will conduct community meetings to discuss visual impacts and how they could be mitigated. Renewable Energy Fund Round 6 Grant Application Russian Mission Wind Feasibility Project AEA13-006 Grant Application Page 16 of 26 September 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 Total anticipated project cost, and cost for this phase/requested grant funding/matching funds. AVEC plans to conduct a Feasibility Analysis, Resources Assessment, and Conceptual Design to assess the possibility of using wind power in Russian Mission. This work would cost $150,000. AVEC requests $142,500 from AEA. AVEC would provide $7,500 as a matching cash contribution. Identification of other funding sources. Once the turbine type is determined, the next phase of this project would be final design and construction. Although it is difficult to determine without an assessment of the resource and what t ype, size, and number of turbines would be needed, AVEC expects that final design and construction would cost $1,530,000. It is possible that the funding for this work could come from AEA’s Renewable Energy Fund program, USDA Rural Utility Service program, or another grant program. Projected capital cost of proposed renewable energy system/projected development cost of proposed renewable energy system. The final phase of this project would be Design and Construction and Commissioning (Phase IV). AVEC est imates that this phase could cost $1,530,000. AVEC would provide a 10% cash match for the construction project. Renewable Energy Fund Round 6 Grant Application Russian Mission Wind Feasibility Project AEA13-006 Grant Application Page 17 of 26 September 2012 4.4.2 Project Operating and Maintenance Costs Include anticipated O&M costs for new facilities constructed and how these would be funded by the applicant. (Note: Operational costs are not eligible for grant funds however grantees are required to meet ongoing reporting requirements for the purpose of reporting impacts of projects on the communities they serve.) The met tower would require monthly monitoring and data management. It is expected that this would cost $700 total for the year that the met tower is erected. The cost would be funded by this grant. If the turbines prove feasible, their maintenance would be funded by AVEC’s general operating costs. 4.4.3 Power Purchase/Sale The power purchase/sale information should include the following:  Identification of potential power buyer(s)/customer(s)  Potential power purchase/sales price - at a minimum indicate a price range  Proposed rate of return from grant-funded project Identification of potential power buyer(s)/customer(s). AVEC, the existing electric utility serving Russian Mission, is a member-owned cooperative electric utility and typically owns and maintains the generation, fuel storage, and distribution facilities in the villages it serves. Russian Mission has 73 households and a health clinic, city office, school, and water treatment plant, which purchase power from AVEC. At this point in project development, the potential power price and rate of return on the project is unknown. Potential power purchase/sales price/ Proposed rate of return from grant -funded project. At this point in project development, the potential power price and rate of return on the project is unknown. Work done under this grant would determine this. Renewable Energy Fund Round 6 Grant Application Russian Mission Wind Feasibility Project AEA13-006 Grant Application Page 18 of 26 September 2012 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. Class 4 wind assumed Unit depends on project type (e.g. windspeed, hydropower output, biomasss fuel) Existing Energy Generation and Usage a) Basic configuration (if system is part of the Railbelt1 grid, leave this section blank) i. Number of generators/boilers/other 3 ii. Rated capacity of generators/boilers/other CMS=250kW; DD=363kW; DD=236 Total=849kW iii. Generator/boilers/other type Diesel engine generators iv. Age of generators/boilers/other 14 years; 2 years; 18 years v. Efficiency of generators/boilers/other 13.00 kWh/gallon (aggregate for all generators) b) Annual O&M cost (if system is part of the Railbelt grid, leave this section blank) i. Annual O&M cost for labor $140,000/ year (labor and non-labor combined) 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] 1,141,530 kWh (2011 actual) ii. Fuel usage Diesel [gal] 87,943 gal (2011 actual) Other iii. Peak Load 261 kW (2011 actual) iv. Average Load 130 kW (2011 actual) 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 Russian Mission Wind Feasibility Project AEA13-006 Grant Application Page 19 of 26 September 2012 v. Minimum Load vi. Efficiency 13.00 kWh/gallon (2011 actual) 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 (Include any projections for continued use of non-renewable fuels) a) Proposed renewable capacity (Wind, Hydro, Biomass, other) [kW or MMBtu/hr] Wind, 150 kW capacity b) Proposed annual electricity or heat production (fill in as applicable) i. Electricity [kWh] 315,360 kWh ii. Heat [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] iv. Other Project Cost a) Total capital cost of new system $1,530,000 b) Development cost c) Annual O&M cost of new system $14,790/year (based on $0.0469/kWh for wind energy) d) Annual fuel cost Project Benefits a) Amount of fuel displaced for i. Electricity 21,854 gal/yr Renewable Energy Fund Round 6 Grant Application Russian Mission Wind Feasibility Project AEA13-006 Grant Application Page 20 of 26 September 2012 ii. Heat iii. Transportation b) Current price of displaced fuel $3.76/gal c) Other economic benefits d) Alaska public benefits Power Purchase/Sales Price a) Price for power purchase/sale Project Analysis a) Basic Economic Analysis Project benefit/cost ratio 0.90 Payback (years) 17 years 4.4.5 Proposed Biomass System Information Please address the following items, if know. (For Biomass Projects Only) N/A Renewable Energy Fund Round 6 Grant Application Russian Mission Wind Feasibility Project AEA13-006 Grant Application Page 21 of 26 September 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 Potential annual fuel displacement. The estimated annual fuel displacement for the completed project would be 21,854 gallons per year (based on preliminary numbers and 80% turbine availability) and 437,080 gallons over the anticipated 20 year lifetime of the installation. Based on ISER’s estimated fuel costs for 2015, this project would save approximately $91,131 during its first full year of operation. (2015 projected fuel cost number was derived from ISER’s 2015 medium fuel cost projection for the community 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. Because this project is in the concept design stage, revenue and incentives are unknown. Non-economic public benefits. Providing a reliable renewable resource would benefit all of Alaskans as it mitigates potential hazardous environmental incidents that could threaten water and land resources. There would be a reduced potential for fuel spills or contamination, improved air quality, and the decreased reliance on fossil fuels. Data from this project will provide important information regarding wind resources in rural Alaska to be applied in future projects. Renewable Energy Fund Round 6 Grant Application Russian Mission Wind Feasibility Project AEA13-006 Grant Application Page 22 of 26 September 2012 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 capacity and experience to operate this project. AVEC has operating 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(s) would be incorporated into AVEC’s power plant operation. Local plant operators provide daily servicing. AVEC technicians provide periodic preventative or corrective maintenance and are supported by AVEC headquarters staff, purchasing, and warehousing. How O&M will be financed for th e life of the project: The costs of operations and maintenance would be funded through ongoing energy sales. Operational issues which could arise: There are no known met tower operational issues. Operational issues of the proposed turbines would be determ ined. Operating costs: Different turbines have different operating costs; however , using AEA’s default cost of wind energy, the estimated O&M would be $14,790/year (based on $0.0469/kWh for wind energy). Commitment to reporting the savings and benefits: AVEC is fully committed to sharing the savings and benefits information accrued from this project with its member owners and with AEA. Renewable Energy Fund Round 6 Grant Application Russian Mission Wind Feasibility Project AEA13-006 Grant Application Page 23 of 26 September 2012 SECTION 7 – READINESS & COMPLIANCE WITH OTHER GRANTS Discuss what you have done to prepare for this award and how quickly you intend to proceed with work once your grant is approved. Tell us what you may have already accomplished on the project to date and identify other grants that may have been previously awarded for this project and the degree you have been able to meet the requirements of previous grants. Once funding is known to be secured, AVEC would seek a non -objection letter from Russian Mission Native Corporation and begin the FAA and USFWS permitting process for the met tower. AVEC would seek contractors to install the met tower and complete the geotechnical work once the grant agreement is in place. Met tower installation and geotech nical work would occur before winter. Work that can be completed before the wind study is completed would occur over the winter, including analysis of current cost of energy and future market, and the economic and financial analyses. Once the wind study is completed, the conceptual design and permitting would occur. No other grants have been secured for this work in th e past. SECTION 8– LOCAL SUPORT Discuss what local support or possible opposition there may be regarding your project. Include letters of support from the community that would benefit from this project. The community is very committed to moving this project forward and fully supports this project. Letters of support for this project have been received from the City of Russian Mission, the Iqurmuit Traditional Council, and the Russian Mission Native Corporation. (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 conduct a feasibility analysis, resources assessment, conceptual design, and permitting to assess the possibility of using wind power in Russian Mission. This work is estimated to cost $150,000. AVEC requests $142,500 from AEA. AVEC will provide $7,500 as a cash contribution. A detail of the grant budget follows. To date, no funds have been obtained for this project. If the wind resource proves to be suitable, AVEC would seek funding to construct turbines in Russian Mission. AVEC would provide a 10% cash match to any obtained funding. Renewable Energy Fund Round 6 Grant Application Russian Mission Wind Feasibility Project AEA13-006 Grant Application Page 24 of 26 September 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 1. Project scoping and contractor solicitation Aug 2013 $1,900 $100 Cash $2,000 2. Detailed energy resource analysis Oct 2014 $19,000 $1,000 Cash $20,000 3. Identification of land and regulatory issues Jun 2014 $4,700 $250 Cash $5,000 4. Permitting and environmental analysis Dec 2014 $6,650 $350 Cash $7,000 5. Detailed analysis of existing and future energy costs and markets March 2014 $4,750 $250 Cash $5,000 6. Assessment of alternatives Nov 2014 $4,750 $250 Cash $5,000 7. Conceptual Business & Operations Plan Oct 2014 $1,900 $100 Cash $2,000 8. Concept Design and Costs Estimate Nov 2014 Geotech $23,750 $1,250 Cash $25,000 Concept Design $55,100 $2,900 $58,000 9. Detailed economic and financial analysis Dec 2014 $9,500 $500 Cash $10,000 10. Conceptual business and operations plans Dec 2014 $7,600 $400 Cash $8,000 11. Final report and recommendations Dec 2014 $2,850 $150 Cash $3,000 TOTALS $142,500 $7,500 $150,000 Budget Categories: Direct Labor & Benefits $9,500 $500 Cash $10,000 Travel & Per Diem $9,500 $500 Cash $10,000 Equipment $9,500 $500 Cash $10,000 Materials & Supplies $0 $0 $0 Contractual Services $114,000 $6,000 Cash $120,000 Construction Services $0 $0 $0 Other $0 $0 $0 TOTALS $142,500 $7,500 $150,000 Tab A Resumes V3 Energy, LLC Douglas Vaught, P.E. 19211 Babrof Drive Eagle River, AK 99577 USA tel 907.350.5047 email dvaught@mtaonline.net Consulting Services : • Wind resource analysis and assessment, including IEC 61400-1 3 rd ed. protocols • Wind turbine siting, FAA permitting, and power generation prediction • Wind-diesel power plant modeling and configuration design • Cold climate and rime icing environment analysis of wind turbine operations • Met tower/sensor/logger installation and removal (tubular towers 10 to 60 meters in height) Partial List of Clients: • Alaska Village Electric Cooperative • NANA Pacific, LLC • enXco Development Corp. • Bristol Bay Native Corp. • Naknek Electric Association • Kodiak Electric Association • Barrick Gold • Alaska Energy Authority • North Slope Borough • Manokotak Natives Ltd. Representative Projects: • Alaska Village Electric Cooperative. Site selection, FAA permitting, met tower installation, data analysis/wind resource assessment, turbine energy recovery analysis, rime icing/turbine effects analysis, powerplant system modeling. Contact information: Brent Petrie, Key Accounts Mgr, 907-565-5358 • Kodiak Electric Association. Met tower installation, data analysis and modeling for Alaska’s first utility scale turbines (GE 1.5sle) on -line July 2009. Contact information: Darron Scott, CEO, 907 -486-7690. • NANA Pacific, LLC. Site reconnaissance and selection, permitting, met tower installation, wind resource assessment and preliminary power system modeling for Northwest Arctic Borough villages and Red Dog Mine. Contact information: Jay Hermanson, Program Manager, 907-339-6514 • enXco Development Corp. Met tower installation documentation, site reconnaissance , analysis equipment management for utility-sca le wind projects, including Fire Island near Anchorage. Contact information: Steve Gilbert, Alaska Projects Manager, 907-333-0810. • Naknek Electric Association. Long -term wind resource assessment at two sites (sequentially), including site selection, met tower installation, data analysis, turbine research, performance modeling, and project economic analysis. Contact information: Donna Vukich, General Manager, 907-246-4261 • North Slope Borough (with Powercorp Alaska, LLC). Power system modeling, site reconnaissance and selection, FAA permitting, wind turbine cold climate and icing effects white paper. Contact information: Kent Grinage, Public Works Dept., 907-852-0285 Recent Presentations: • Wind Power Icing Challenges in Alaska: a Case Study of the Native Village of Saint Mary’s, presented at Winterwind 2008, Norrköping, Sweden, Dec. 8, 2008. Tab B Letters of Support Tab D Governing Body Resolution Tab E Certification Tab F Additional Materials