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HomeMy WebLinkAboutMarshall Rnd 6 Grant App FINALRenewable Energy Fund Round 6 Grant Application Marshall Wind Design and Permitting Project AEA 13-006 Application Page 1 of 27 September 2012 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 Marshall Wind Design and Permitting Project AEA13-006 Grant Application Page 2 of 27 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) Marshall Wind Energy Design and Permitting Project 2.2 Project Location – Include the physical location of your project and name(s) of the community or c ommunities 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. This project will be located near the community of Marshall (population 407) which is located on the north bank of Polte Slough, north of Arbor Island, on the east bank of the Yukon River in the Yukon-Kuskokwim Delta. It lies on the northeastern boundary of the Yukon Delta National Wildlife Refuge. It lies at approximately 61.877780 North Latitude and -162.081110 West Longitude. (Sec. 27, T021N, R070W, 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 Marshall, 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 X Design and Permitting Feasibility Construction and Commissioning Conceptual Design Renewable Energy Fund Round 6 Grant Application Marshall Wind Design and Permitting Project AEA13-006 Grant Application Page 3 of 27 7/3//2012 2.4 PROJECT DESCRIPTION Provide a brief one paragraph description of your proposed project. Building on the results of the already completed Concept Design Report (attached in Tab F), Alaska Village Electric Cooperative, Inc. (AVEC) is proposing to complete the final design and permitting to install two Northern Power Systems Northern Power 100 ARCTIC turbines for a 200 kilowatt (kW) installed wind capacity, to the existing diesel power generation system in Marshall. Once work done under this grant is completed, AVEC would seek funding to construct the turbines. 2.5 PROJECT BENEFIT Briefly discuss the financial and public benefits that will result from this project, (such as reduced fuel costs, lower energy costs, etc.) The primary financial benefit of this project would be stabilizing the high cost of energy production in the community of Marshall by offsetting the diesel fuel usage by the power generators. The Concept Design Report conducted for this project (Tab F) shows that two NP100 turbines could offset approximately 28,475 gallons of diesel fuel per year while generating 426,551 kilowatt hours per year (kWh/yr) at 80% efficiency. Marshall, population 407, is a traditional Yup’ik Eskimo village with most residents supported by subsistence activities. During the summer season, fishing, fish processing, and BLM jobs are available. Long-term positions are limited to positions with the city, school and few local businesses. According to the 2006-2010 American Community Survey (ACS), 29.4% of the population was unemployed, with 16.5% living below the poverty level. The median household income was $37,500. Reducing the reliance on diesel fuel power generation would provide long-term socio-economic benefits to village households. A renewable power resource would decrease the operating costs for the power plant. Given that energy costs can be a large portion of disposable income, reducing those energy costs gives the community and residents of Marshall more economic stability and the ability to plan for the future of their community. 2.6 PROJECT BUDGET OVERVIEW Briefly discuss the amount of funds needed, the anticipated sources of funds, and the nature and source of other contributions to the project. The total project cost for final design and permitting of six turbines in Marshall is $350,000 of which $332,500 is requested in grant funds from AEA. The remaining $17,500 would be matched in cash by AVEC. 2.7 COST AND BENEFIT SUMARY Include a summary of grant request and your project’s total costs and benefits below. Renewable Energy Fund Round 6 Grant Application Marshall Wind Design and Permitting Project AEA13-006 Grant Application Page 4 of 27 7/3//2012 Grant Costs (Summary of funds requested) 2.7.1 Grant Funds Requested in this application. $332,500 2.7.2 Cash match to be provided $ 17,500 2.7.3 In-kind match to be provided $ 2.7.4 Other grant applications not yet approved $ 2.7.5 Total Grant Costs (sum of 2.7.1 through 2.7.3) $350,000 Project Costs & Benefits (Summary of total project costs including work to date and future cost estimates to get to a fully operational project) 2.7.6 Total Project Cost (Summary from Cost Worksheet including estimates through construction) $2,509,850 2.7.7 Estimated Direct Financial Benefit (Savings) $ 99,554 (first year) $1,991,087 (project life) 2.7.8 Other Public Benefit (If you can calculate the benefit in terms of dollars please provide that number here and explain how you calculated that number in your application (Section 5.) $ Renewable Energy Fund Round 6 Grant Application Marshall Wind Design and Permitting Project AEA13-006 Grant Application Page 5 of 27 7/3//2012 SECTION 3 – PROJECT MANAGEMENT PLAN Describe who will be responsible for managing the project and provide a plan for successfully completing the project within the scope, schedule and budget proposed in the application. 3.1 Project Manager Tell us who will be managing the project for the Grantee and include contact information, a resume and references for the manager(s). If the applicant does not have a project manager indicate how you intend to solicit project management support. If the applicant expects project management assistance from AEA or another government entity, state that in this section. AVEC, as the electric utility serving Marshall, will provide overall project management and oversight. Brent Petrie, Manager, Community Development and Key Accounts, will lead the project management team consisting of AVEC staff, consultants, and contractors. He has worked for AVEC since 1998, where he manages the development of alternatives to diesel generation for AVEC such as using wind, hydropower, solar and heat recovery. He also is the project manager for AVEC’s construction projects. Mr. Petrie has worked in the energy and resource field for more than thirty years, having worked for the federal and state governments as consultant, planner, and project manager. He has been a utility manager or management consultant since 1993. As General Manager of Iliamna- Newhalen-Nondalton Electric Cooperative from 1994 to 1998, he reported to a seven - member, elected board of directors, and served as project manager on its hydroelectric project development. He is an elected member of the Board of Directors of the Utility Wind Interest Group representing rural electric cooperatives and serves on the Power Supply Task force of the National Rural Electric Cooperative Association. Mr. Petrie has a Master’s Degree in Water Resource Management and a Bachelor's Degree in Geography. His resume is attached. Also involved with the project management and grant administration is: Meera Kohler President and CEO of AVEC. Ms. Kohler has more than 30 years of experience in the Alaska electric utility industry. She was appointed Manager of Administration and Finance at Cordova Electric Cooperative in 1983, General Manager of Naknek Electric Association in 1990, and General Manager of Municipal Light & Power in Anchorage in 1997. Since May 2000, Ms. Kohler has been the President and CEO of AVEC and in this position has ultimate grant and project responsibilities. Renewable Energy Fund Round 6 Grant Application Marshall Wind Design and Permitting Project AEA13-006 Grant Application Page 6 of 27 7/3//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: Grant Award Announcement: May 2013 Authorization to Proceed: June 2013 Complete Permitting: February 2014 Complete Site Control : February 2014 Complete Final Design: May 2014 The schedule organized by AEA milestones is as follows: Milestones Tasks Start Date End Date Project Scoping and Contractor Award for Planning and Design The engineering contractor would be selected and a task order would be prepared for work planned for this phase. June 1, 2013 Aug 1, 2013 Permit Applications Permit applications, such as FAA, wetlands, and migratory birds/endangered species consultations, would be prepared and submitted Aug 1, 2013 Final Environmental Assessment and Mitigation Plans Working with regulatory agencies, environmental documents would be prepared as needed Aug 1, 2013 Feb 1, 2014 Resolution of Land Use, ROW Issues Working with the communities and corporations, AVEC would secure site control for the wind turbines Aug 1, 2013 Feb 1, 2014 Permit Approvals Permits would be issued from the Federal Aviation Administration, the U.S. Army Corps of Engineers, and the U.S. Fish and Wildlife Service. Feb 1, 2014 Final System Design The engineering contractor would complete final design of the wind system and intertie. The design would be reviewed by AVEC personnel prior to final approval. May 1, 2014 Engineers’ Cost Estimate Using the final design, the engineers would prepare the cost estimate for the project. June 1, 2014 Updated Economic Estimate and Financial Analysis Using the number developed in the cost estimate, an updated economic assessment and financial analysis would be prepared. July 1, 2014 Renewable Energy Fund Round 6 Grant Application Marshall Wind Design and Permitting Project AEA13-006 Grant Application Page 7 of 27 7/3//2012 Negotiated Power Sales Agreements with Approved Rates n/a Final Business and Operational Plan AVEC would work with the all the communities to finalize the Operational Plan. July 1, 2014 3.3 Project Resources Describe the personnel, contractors, accounting or bookkeeping personnel or firms, equipment, and services you will use to accomplish the project. Include any partnerships or commitments with other entities you have or anticipate will be needed to complete your project. Describe any existing contracts and the selection process you may use for major equipment purchases or contracts. Include brief resumes and references for known, key personnel, contractors, and suppliers as an attachment to your application. AVEC will use a project management approach, that includes a team of AVEC staff and external consultants, that has been successful in the design and construction of wind turbines throughout rural Alaska: AVEC staff and their role on this project includes:  Meera Kohler, President and Chief Executive Officer, will act as Project Executive and will maintain ultimate authority programmatically and financially.  Brent Petrie, Manager, Community Development and Key Accounts, will lead the project management team consisting of AVEC staff, consultants, and contractors . Together with his group, Mr. Petrie will provide oversight for the completion of the final design and permitting to install two wind turbines. The group’s resources include a project coordinator, accountant, project/construction manager (PM/CM), and a community liaison. Mr. Petrie will be the program manager for this project and will assign project manager resources to implement the project.  Debbie Bullock, Manager of Administrative Services, will provide support in accounting, payables, financial reporting, and capitalization of assets in accordance with AEA guidelines.  Bill Stamm, Manager of Engineering, leads AVEC’s Engineering Department which is responsible for the in-house design of power plants, distribution lines, controls, and other AVEC facilities. Mr. Stamm has worked at AVEC since 1994. Mr. Stamm was an AVEC line superintendent before he was appointed to Manager of Engineering in 2012. Mr. Stamm’s unit will provide engineering design and supervision.  Mark Bryan, the Manager of Operations, is a Certified Journeyman Electrician and supervises the AVEC’s line operations, generation operations and all field construction programs. He has worked at AVEC since 1980, was appointed Manager of Construction in May 1998 and was promoted to Manager of Operations in June 2003. Mr. Bryan’s unit will oversee operation of this project as part of the AVEC utility system.  Anna Sattler, Community Liaison, would communicate directly with Marshall residents to ensure that the community is informed. Renewable Energy Fund Round 6 Grant Application Marshall Wind Design and Permitting Project AEA13-006 Grant Application Page 8 of 27 7/3//2012 An AVEC project manager would lead this project. It is likely that one of AVEC’s in-house contractors would lead the work. The project manager would be responsible for:  Selecting, coordinating, and managing the geotechnical, engineering, and permitting consultants and ensuring that their deliverables are on t ime and within budget.  Working with AVEC’s Community Liaison to involve the community in the project and gain site control. Contractors for this project would include:  Geotechnical consultant. AVEC would select and employ an experienced geotechnical consultant who would: o Conduct a detailed geotechnical and natural hazards field study and report of the project area.  Engineering consultant. AVEC would select and employ an engineering consultant who would: o Provide final design, engineering specifications, and a cost estimate for the wind turbines.  Environmental Consultant. AVEC has hired HDL, an engineering consultant familiar with permitting wind projects in Alaska, for environmental permitting. HDL will: o Consult with agencies; and o Develop and submit permit applications for the wind farm. Resumes are included under Tab A. Selection Process for Contractors: The geotechnical, environmental, and engineering consultant selection would be based upon technical competencies, past performance, written proposal quality, cost, and general consensus from the internal AVEC committee. The selection of the consultant would occur in strict conformity with AVEC’s procurement policies, and conformance with OMB circulars. 3.4 Project Communications Discuss how you plan to monitor the project and keep the Authority informed of the status. Please provide an alternative contact person and their contact information. AVEC has systems in place to accomplish reporting requirements successfully. In 2011, AVEC successfully met reporting requirements for 16 state and 19 federal grants. An independent financial audit and an independent auditor’s management letter completed for AVEC for 2011 did not identify any deficiencies in internal control over financial reporting that were considered to be material weaknesses. In addition, the letter stated that AVEC complied with specific loan and security instrument provisions. The project will be managed out of AVEC’s Community Development Department. For financial reporting, the Community Development Department’s accountant, supported by the Administrative Services Department, will prepare financial reports. The accountant will be Renewable Energy Fund Round 6 Grant Application Marshall Wind Design and Permitting Project AEA13-006 Grant Application Page 9 of 27 7/3//2012 responsible for ensuring that vendor invoices and internal labor charges are documented in accordance with AEA guidelines and are included with financial reports. AVEC has up-to-date systems in place for accounting, payables, financial reporting, and capitalization of assets in accordance with AEA guidelines. AVEC will require that monthly written progress reports be provided with each invoice submitted from contractor(s). The progress reports will include a summary of tasks completed, issues or problems experienced, upcoming tasks, and contractor’s needs from AVEC. Project progress reports will be collected, combined, and supplemented as necessary and forwarded as one package to the AEA project manager each quarter. Quarterly face-to-face meetings will occur between AVEC and AEA to discuss the status of all projects funded through the AEA Renewable Energy Grants program. Individual project meetings will be held, as required or requested by AEA. Meera Kohler, AVEC’s President and CEO, may be contacted as an alternative manager. 3.5 Project Risk Discuss potential problems and how you would address them. Site Control/Access and Environmental Permitting. Sometimes site control for the placement of turbines is difficult; however, because the community supports the project it is not expected that gaining site control would be difficult. Letters of support have been received from community leaders (see Tab B). Environmental Permitting. AVEC has hired HDL, an engineering consultant familiar with permitting wind projects in Alaska. HDL will begin consultation with agencies in order to flesh out location, natural and social environment, specific species, and mitigation issues. The consultant would work openly with the agencies and conduct studies as appropriate. Weather. Weather could delay getting consultants from getting into the community to cond uct site visits and/or the geotechnical survey however, an experienced consultant, familiar with Alaskan weather conditions, would be selected. AVEC is responsible to its member communities and a board of directors and provides a cash match towards the project; therefore, staying on schedule and within budget is essential. This project will result in decreasing electricity costs, and AVEC’s member communities are very interested in this project because energy costs can be a large portion of disposable income. AVEC member communities expect status updates on village projects including when and what work will occur, who will be involved, and when it will be completed. If work does not occur according to the schedule, AVEC’s CEO and Board of Directors are usually alerted by member communities, and there are repercussions. Renewable Energy Fund Round 6 Grant Application Marshall Wind Design and Permitting Project AEA 13-006 Application Page 10 of 27 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. AVEC was awarded a grant from the AEA to complete wind feasibility and concept design work in Marshall. A met tower was installed at the proposed wind turbine site in Marshall on December 18, 2008 and was in continuous operation until October 10, 2009 when an anchor failed du ring an exceptionally strong wind storm and the tower collapsed. An average wind speed of 6.0 meters per second (m/s) was measured, with a wind power density of 332 watts per meter squared (W/m2) (Class 4 wind resource). Because the two missing months are mid-October to mid- December, typically the windiest period of time of the year, the actual annual wind speed average and wind power density may well be higher than reported. Other aspects of the wind resource are also promising for wind power development. By International Electrotechnical Commission (IEC) 61400-1 3rd edition classification, Marshall is category II-c or III-c, indicating low turbulence (mean turbulence intensity (TI) at 15 m/s = 0.095) and moderate to low 50 year extreme winds. The latter measure is more difficult to quantify with only ten months of data, but the site clearly is not energetic enough to be IEC extreme wind Class I. The NW100/21 is designed for IEC II-B sites, so the Marshall site is well within the design parameters of the turbine. Icing has also proven not to be a significant issue in the met tower data. Please refer to the Marshall Wind-Diesel Feasibility Study (Tab F) for more detailed wind resource information. Wind energy as a supplement to diesel generators for electricity generation is considered the most viable and developable source of renewable energy for Marshall. Of other common renewable energy sources, solar power is limited by the high cost and low capacity factor during the high load winter months, hydro power potential has not been fully investigated in Marshall but is not likely to be viable unless a run-of-the-river system is considered, and bio-mass is limited by the lack of wood resources near Marshall. Renewable Energy Fund Round 6 Grant Application Marshall Wind Design and Permitting Project AEA13-006 Grant Application Page 11 of 27 7/3//2012 4.2 Existing Energy System 4.2.1 Basic configuration of Existing Energy System Briefly discuss the basic configuration of the existing energy system. Include information about the number, size, age, efficiency, and type of generation. AVEC’s power plant is located within the community of Marsha ll. The plant was first energized in 1971 and consists of a “Butler Building”, wood dock, control module, storage van, crew module, and pad mounted transformers. The building and modules are constructed on a mixture of elevated timber post, grade beam and crib foundations. The “Butler Building” contains the following generator sets: (1) Cat 3456 with Cat LC6 Generator, rated at 500KW (1) Detroit Series 60 DDEC4 with Kato 6P4-1450, rated at 363KW (1) Detroit Series 60 DDEC4 with Kato 6P4-1450, rated at 236KW 1,099 kW Total Generation Capacity The power plant also includes generator appurtenances, day tank, miscellaneous tools and equipment, transfer pump, starting batteries, and station service equipment. The building contains a combined cooling system for all three generators with two remote radiators. Power is generated at 277/480V three phase and there are five fused distribution switches that distribute power to the village: one switch is a low voltage feed to the water plant, one is a single phase switch feeding the west part of town, and the other three are “A, B, and C” switches feeding the east part of town, the school, and airport. Distribution voltage is 7200V. 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. Marshall uses diesel fuel for electrical power generation, heating oil for boiler (thermal) and home heating (with limited wood burning), thermal heat recovery from the diesel engines at the power plant, and diesel and gasoline fuel for transportation needs. Between January and December 2011, 116,245 gallons were consumed to generate 1,678,844 kWh (gross) at the AVEC facility. The anticipated effects of this project are less usage of diesel fuel for electrical power generation, and less use of heating fuel for boiler operations due to injection of excess wind power to the thermal heat recovery loop. This would decrease generator operations and maintenance costs, enabling generators to last longer and need fewer overhauls. Renewable Energy Fund Round 6 Grant Application Marshall Wind Design and Permitting Project AEA13-006 Grant Application Page 12 of 27 7/3//2012 4.2.3 Existing Energy Market Discuss existing energy use and its market. Discuss impacts your project may have on energy customers. According to a 2006-2010 American Community Survey (ACS) about 16% of Marshall residents live below the poverty line, with an average median household income of $37,500. Stabilizing the high cost of energy in the community would provide long-term socio-economic benefits to village households. Currently, Marshall has a stand-alone electric power system with no intertie or connection beyond the village itself. The electricity consumption (sold) in Marshall in FY2011 was 1,594,247kWh. The load is highest during the winter months, when the community experiences heavy winds and extended periods of darkness. The addition of the wind turbines to the electric generation system could reduce the amount of diesel fuel used for power generation. An isolated village, Marshall is only accessible by airplane, barge, snowmachine or small boat, and so relies on air transportation, especially for delivery of medical goods and the transport of sick or injured individuals, or mothers nearing childbirth. Reliable electric service is essen tial to maintaining vital navigation aids for the safe operation of aircraft; runway lights, automated weather observation stations, VASI lights, DMEs and VORs (aircraft navigation systems) are all powered by electricity. This project will increase efficiencies and lower the costs of the energy system in Marshall Emergency medical service is provided in the health clinic by a health aide. Medical problems and emergencies must be relayed by telephone or by some other communication means for outside assistance. Tele-medicine is rapidly growing in rural Alaska as a means of regular and emergency care, as winter conditions sometime impede air transport and accessibility. Reliable telephone service and tele-medicine require reliable and affordable electric service. The majority of the city is served by a piped circulation water system served by five wells. Most residents and buildings are equipped with full plumbing. Reliable and affordable electric service is required for the continuous operation of the water and wastewater systems and to prevent freezing of the systems, which would cause extensive damage and interruptions in service. Like all of Alaska, Marshall is subject to long periods of winter darkness. Reliable electric service is essential for the operation of home lighting, streetlights, and security lighting. Outside lighting greatly improves the safety of village residents. Many residents harvest salmon, moose, bear and waterfowl and engage in trapping. Refrigeration is essential for the extended storage of perishable food stuffs, and reliable electric service is essential for proper freezer storage of food. The construction of the proposed project would augment and improve the existing power generation system by incorporating a locally available renewable resource. Sources: Alaska Community Database. Renewable Energy Fund Round 6 Grant Application Marshall Wind Design and Permitting Project AEA13-006 Grant Application Page 13 of 27 7/3//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. Wind power is the renewable energy option of choice for Marshall. Of the wind turbine options available on the market, the Northern Power 100 ARCTIC, formerly known as the Northwind 100 Arctic, at a 37 meter hub height , is considered most appropriate for the load profile of Marshall. The Northern Power 100 ARCTIC is rated at 100 kW and is equipped with a permanent magnet, synchronous generator, is direct drive (no gearbox), is equipped with heaters, and has been tested to ensure operation in extreme cold climates. The turbine has a 21-meter diameter rotor operating at a 37-meter hub height. The turbine is stall-controlled and in the proposed version will be equipped with an arctic package enabling continuous operation at temperatures down to -40° C. More details on the proposed wind technology are included in the CDR under Tab F. Optimum installed capacity. AVEC proposes to install two Northern Power turbines to operate as a wind-diesel hybrid power system that would supply wind -generated electricity to Marshall. The installed wind capacity would be 200 kW. Anticipated capacity factor. HOMER software was used to estimate capacity factor and system penetration (or renewable fraction) of two NP 100 turbines in a power system for Marshall. Using the wind data discussed in the CDR under Tab F, at 80% availability the turbine capacity factor is predicted to be 25%. Anticipated annual generation. HOMER software estimates wind production with two NP 100 turbines at 426,551 kWh annually (at 80% turbine availability). Basic integration concept. No barriers to successful installation and integration of wind turbines in Marshall are expected. The project will be designed and modeled using knowledge of previous successful wind-diesel projects. Delivery Method. Power generated by the wind turbines would be distributed via the existing electrical distribution system in Marshall. Renewable Energy Fund Round 6 Grant Application Marshall Wind Design and Permitting Project AEA13-006 Grant Application Page 14 of 27 7/3//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. The proposed turbine site in Marshall is noted in the Google Earth image below. It is on the high spot of the road between the village and the airport, and very near the intersection of the new road leading to a communication tower on Mt. Pilcher (off -screen, upper center). This site was selected during a site reconnaissance visit in 2007 due to its proximity to Marshall, distance from the airport, good exposure to the prevailing winds, village corporation ownership and ease of access. At the present time, AVEC has a lease agreement for the met tower, which is in the same location as the proposed turbine site. The project has enthusiastic and positive community support. (See letters of support from the community in Tab B.) Although formal site control is not yet in hand for the turbines, problems are not anticipated. Renewable Energy Fund Round 6 Grant Application Marshall Wind Design and Permitting Project AEA13-006 Grant Application Page 15 of 27 7/3//2012 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. On August 26, 2012, a request for determination from the FAA was submitted for two Northwind 100 Towers (Reference No. 2012-WTW-7872-OE and 2012-WTW-7873-OE). AVEC is currently awaiting FAA’s response regarding the request for determination. Endangered Species Act/Migratory Bird Treaty Act Consultation: Consultation with the U.S. Fish and Wildlife Service (USFWS) in compliance with the Endangered Species Act and Migratory Bird Treaty Act would be required to construct the wind turbines. A finding letter stating that the constructed project would not be expected to impact threatened or endangered species (including Spectacled Eiders) or birds would be drafted and submitted to the USFWS. It is expected that AVEC would receive concurrence from the Service within one month. Clean Water Act (Section 401) Permit: To permit the turbines, an individual wetland permit would be sought from the U.S. Army Corps of Engineers. The application would be submitted once conceptual design has been completed. It is expected that the permit would be issued within 3 months. National Historic Preservation Act Consultation: According to the Alaska Heritage Resource Survey (AHRS) files, there are no known historic or archaeological sites within the proposed project area. According to existing research and the findings of previous investigations, there is a relatively low probability of undiscovered archaeological and historic sites within the area proposed for development. In accordance with the National Historic Preservation Act , the undertaking will need to be reviewed by the SHPO. During formal Section 106 consultation , the SHPO will determine whether additional surveys and mitigation will be required. Renewable Energy Fund Round 6 Grant Application Marshall Wind Design and Permitting Project AEA13-006 Grant Application Page 16 of 27 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 Threatened or Endangered species. The U.S. Fish and Wildlife Service would be consulted to ensure that the construction of the wind turbines would have no ha rmful impact on threatened or endangered species. Construction would be timed to avoid impacts to migratory birds in compliance with the Migratory Bird Treaty Act. Habitat issues. During permitting, the project team would work with agencies to ensure that the project would not impact any State refuges, sanctuaries or critical habitat areas, federal refuges or wilderness areas, or national parks. Wetlands and other protected areas. It is likely that the wind turbines could be placed in designated wetland locations. A U.S. Army Corps of Engineers’ wetlands permit would be needed. Archaeological and historical resources. Compliance with the National Historic Preservation Act with the State Historic Preservation Officer would be conducted prior to cons truction of the wind turbines. Land development constraints. Negotiations with Maserculiq, Inc. (the Native corporation for Marshall) to obtain site control would be needed. Since the location of the met tower was accepted by the community, and the community supports this project, it is expected that there will not be any land issues associated with the project. Aviation considerations. If needed, an FAA Determination of No Hazard to Air Traffic would be sought for the installation of the wind turbines. Visual, aesthetics impacts. The turbines would be constructed outside the community and it is likely that there would be little concern for visual or aesthetic impacts. Communities often note that the turbines offer a helpful visual guide point when traveling outside the village. AVEC would conduct community meetings to discuss visual impacts and how they could be minimized, in the unlikely event that visual issues arise. Renewable Energy Fund Round 6 Grant Application Marshall Wind Design and Permitting Project AEA13-006 Grant Application Page 17 of 27 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 Total anticipated project cost, and cost for this phase/requested grant funding/matching funds. This application is for the final design and permitting of two NP 100 turbines in Marshall. The project would cost $350,000 to complete. AVEC is requesting $332,500 from AEA through the REF grant program, and AVEC would provide $17,500 as a cash match for this phase. Identification of other funding sources. AVEC expects the final construction and commissioning phase of the project would cost $2,509,850. It is possible that the funding for this work would 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 Construction and Commissioning. AVEC estimates this phase could cost $2,509,850. AVEC would provide a 10% cash match for the construction project. 4.4.2 Project Operating and Maintenance Costs Include anticipated O&M costs for new facilities constructed and how these would be funded by the applicant. (Note: Operational costs are not eligible for grant funds however grantees are required to meet ongoing reporting requirements for the purpose of reporting impacts of projects on the communities they serve.) Once the turbines are installed, AVEC estimates the cost of operating and maintaining to be around $20,000 annually. These estimates are based on AEA’s default cost of wind energy of $0.0469/kWh. AVEC will provide the funds to maintain consistent operation of the turbines. Renewable Energy Fund Round 6 Grant Application Marshall Wind Design and Permitting Project AEA13-006 Grant Application Page 18 of 27 7/3//2012 4.4.3 Power Purchase/Sale The power purchase/sale information should include the following:  Identification of potential power buyer(s)/customer(s)  Potential power purchase/sales price - at a minimum indicate a price range  Proposed rate of return from grant-funded project AVEC, the existing electric utility serving Marshall, is a member owned cooperative electric utility and typically owns and maintains the generation, fuel storage, and distribution facilities in the villages it serves. No power purchase or sale would be needed for this project. Identification of potential power buyer(s)/customer(s). Energy produced from the completed wind project would be sold to AVEC’s existing customer base in the community of Marshall. Marshall has 100 households and a health clinic, city office, tribal council office, and water treatment plant, with purchase power from AVEC. Potential power purchase/sales price/Proposed rate of return from grant -funded project. The sales price for the wind-generated electricity would be determined by the Regulatory Commission of Alaska as is done in all AVEC villages. The delivered cost of energy would be reduced as much as possible for customers within Marshall under current regulations. Currently, AVEC villages with wind power systems experience the lowest electricity cost within the utility (55 villages). Similar energy cost reductions are expected upon project completion, as proposed in this application. The project has an expected payback of:  Undiscounted Payback Period: 20.74 years  Discounted Payback Period: 31.15 years (Discount factor is 3% per AEA guidelines) Renewable Energy Fund Round 6 Grant Application Marshall Wind Design and Permitting Project AEA13-006 Grant Application Page 19 of 27 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. 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. average wind speed of 6.0 m/s was measured, with a wind power density of 332 W/m2 (Class 4 wind resource) 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 CAT=505kw; DD=363kW; DD=207kW Total=1,075kW iii. Generator/boilers/other type Diesel generators iv. Age of generators/boilers/other 2 years; 7 years; 18 years v. Efficiency of generators/boilers/other b) Annual O&M cost (if system is part of the Railbelt grid, leave this section blank) i. Annual O&M cost for labor $140,000/year (combined labor and non-labor) ii. Annual O&M cost for non-labor c) Annual electricity production and fuel usage (fill in as applicable) (if system is part of the Railbelt grid, leave this section blank) i. Electricity [kWh] 1,678,844 kWh (2011 gross) ; 1,594,247 kWh consumed ii. Fuel usage Diesel [gal] 116,254 gal (2011 actual) Other iii. Peak Load 344 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 Marshall Wind Design and Permitting Project AEA13-006 Grant Application Page 20 of 27 7/3//2012 iv. Average Load 191 kW (2011 actual) v. Minimum Load vi. Efficiency 14.44 kWh/gallon vii. Future trends d) Annual heating fuel usage (fill in as applicable) i. Diesel [gal or MMBtu] ii. Electricity [kWh] iii. Propane [gal or MMBtu] iv. Coal [tons or MMBtu] v. Wood [cords, green tons, dry tons] vi. Other Proposed System Design Capacity and Fuel Usage (Include any projections for continued use of non-renewable fuels) a) Proposed renewable capacity (Wind, Hydro, Biomass, other) [kW or MMBtu/hr] Wind, 200 kW capacity(two NP 100s, 37-meter hub height) b) Proposed annual electricity or heat production (fill in as applicable) i. Electricity [kWh] 426,551 kWh; 80% avail., actual wind distribution 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 $2,509,850 b) Development cost c) Annual O&M cost of new system $20,000 (based on $0.0469/kWh for wind energy) d) Annual fuel cost Project Benefits a) Amount of fuel displaced for i. Electricity 26,475 gal/yr Renewable Energy Fund Round 6 Grant Application Marshall Wind Design and Permitting Project AEA13-006 Grant Application Page 21 of 27 7/3//2012 ii. Heat iii. Transportation b) Current price of displaced fuel $3.77/gal (AVEC’s 2011 cost in Marshall) c) Other economic benefits d) Alaska public benefits Power Purchase/Sales Price a) Price for power purchase/sale n/a Project Analysis a) Basic Economic Analysis Project benefit/cost ratio 0.93 (HOMER analysis) 0.71 (Northern Eco) See CDR for explanation. Payback (years) 20.74 (undiscounted), 31.15 (discounted) 4.4.5 Proposed Biomass System Information Please address the following items, if know. (For Biomass Projects Only) N/A SECTION 5– PROJECT BENEFIT Explain the economic and public benefits of your project. Include direct cost savings, and how the people of Alaska will benefit from the project. The benefits information should include the following:  Potential annual fuel displacement (gallons and dollars) over the lifetime of the evaluated renewable energy project  Anticipated annual revenue (based on i.e. a Proposed Power Purchase Agreement price, RCA tariff, or cost based rate)  Potential additional annual incentives (i.e. tax credits)  Potential additional annual revenue streams (i.e. green tag sales or other renewable energy subsidies or programs that might be available)  Discuss the non-economic public benefits to Alaskans over the lifetime of the project Potential annual fuel displacement. Placing two NP 100 turbines (a 200kW capacity) in Marshall could decrease diesel fuel use by 28,475 gallons per year, and 569,500 gallons over a project lifetime of twenty years (based on preliminary numbers and 80% turbine availability). Renewable Energy Fund Round 6 Grant Application Marshall Wind Design and Permitting Project AEA13-006 Grant Application Page 22 of 27 7/3//2012 Based on ISER’s 2015 estimated fuel costs for Marshall, this project could save $121,873 during its first full year of operation. (The 2015 projected fuel cost number was derived from ISER’s 2015 medium fuel cost projection for Marshall [$4.01] plus the mid-price of social cost of carbon per gallon [$0.27]). Anticipated annual revenue/Potential additional annual incentives/Potential additional annual revenue streams. Tax credits are not expected to be beneficial to the project due to AVEC’s status as a non-profit entity. Nonetheless, in addition to saving the direct cost of fuel, AVEC could sell green tags from the project. Non-economic public benefits. The anticipated benefits from the installation of wind turbines would be reducing the negative impact of the cost of energy by providing a renewable energy alternative. This project could help stabilize energy costs and provide long -term socio-economic benefits to village households. This project would help AVEC to determine if recovered heat is an option. If it proves feasible, potential locations to be served by recovered heat would be evaluated and agreements would be negotiated. Once the wind project is constructed, costs to operate important community facilities (e.g. water treatment plants, schools, washeterias) would be decreased, enabling managing entities such as city governments, tribe, and school district to operate more economically. Stabilized energy costs would allow community entities to plan and budget for important community infrastructure and programs. Marshall residents’ health and safety would be enhanced by the environmental benefits resulting from a reduction of hydrocarbon use, including:  Reduced potential for fuel spills or contamination during transport, storage, or use (thus protecting vital water and subsistence food sources);  Improved air quality; and  Decreased contribution to global climate change from fossil fuel use . The wind turbines would provide a visual landmark for sea, air, and overland travelers, which would help navigation in the area. Wind turbine orientation and rotor speed would provide visual wind information to residents. Renewable Energy Fund Round 6 Grant Application Marshall Wind Design and Permitting Project AEA13-006 Grant Application Page 23 of 27 7/3//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 the capacity and experience to operate this project. AVEC has operated wind projects throughout the state and is very familiar with planning, constructing, operating, and maintaining wind systems. Business Plan Structures and Concepts which may be considered: The wind turbines would be incorporated into AVEC’s power plant operation. Local plant operators provide daily servicing. AVEC technicians provide periodic preventative or corrective maintenance and are supported by AVEC headquarters staff, purchasing, and warehousing. How O&M would be financed for the life of the project: The costs of operations and maintenance would be funded through ongoing energy sales to the villages. Operational issues which could arise: The Northern Power Systems turbine has a proven performance record in rural communities and arctic climates. Operating costs: Using AEA’s default cost of wind energy, estimated O&M would cost $20,000 (based on $0.0469/kWh for wind energy). Commitment to reporting the savings and benefits: AVEC is fully committed to sharing the savings and benefits accrued from this project information with their shareholders and sharing information regarding savings and benefits with AEA. Renewable Energy Fund Round 6 Grant Application Marshall Wind Design and Permitting Project AEA13-006 Grant Application Page 24 of 27 7/3//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. AVEC is ready to move forward on this project. The wind report, geotechnical work and analysis of current cost of energy and future market, the economic and financial analyses, and conceptual design has been completed and attached to this application . All required permitting would be completed prior to initiation of construction. 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 of Marshall supports this project and is interested in moving f orward with the installation of the turbines. Letters of support have been received by all governing entities. Please see Tab B. SECTION 9 – GRANT BUDGET Tell us how much you want in grant funds Include any investments to date and funding sources, how much is being requested in grant funds, and additional investments you will make as an applicant. AVEC plans to complete final design and permitting of a wind farm in Marshall. This work would cost $350,000. AVEC requests $332,500 from AEA and will provide $17,500 as a cash contribution. A detail of the grant budget follows. Renewable Energy Fund Round 6 Grant Application Marshall Wind Design and Permitting Project AEA13-006 Grant Application Page 25 of 27 7/3//2012 Milestone or Task Anticipated Completion Date RE- Fund Grant Funds Grantee Matching Funds Source of Matching Funds: Cash/In- kind/Federal Grants/Other State Grants/Other TOTALS Project scoping and contractor solicitation for planning and design Aug 1, 2013 $4,750 $250 Cash $5,000 Permit applications Sept 1, 2013 $19,000 $1,000 Cash $20,000 Final environmental assessment and mitigation plans Feb 1, 2014 $14,250 $750 Cash $15,000 Resolution of land use, right of way issues Feb 1, 2014 $38,000 $2,000 Cash $40,000 Permit approvals Feb 1, 20014 $4,750 $250 Cash $5,000 Final system design May 1, 2014 $190,000 $10,000 Cash $200,000 Engineers’ cost estimate June 1, 2014 $42,750 $2,250 Cash $45,000 Updated economic and financial analysis July 1, 2014 $9,500 $500 Cash $10,000 Negotiated power sales agreements with approved rates n/a $0 $0 n/a $0 Final business and operational plan July 1, 2014 $9,500 $500 Cash $10,000 TOTALS $332,500 $17,500 $350,000 Budget Categories: Direct Labor & Benefits $57,000 $3,000 Cash $60,000 Travel & Per Diem $14,250 $750 Cash $15,000 Equipment $ - $ - $ - Materials & Supplies $ - $ - $ - Contractual Services $261,250 $13,750 Cash $275,000 Construction Services $ - $ - $ - Other $ - $ - $ - TOTALS $332,500 $17,500 $350,000 Tab A Resumes 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