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HomeMy WebLinkAboutTazimina Round 6 Grant ApplicationGrant Application AUTHORITY Application Forms and Instructions This instruction page and the following grant application constitutes the Grant Application Form for Round 6 of the Renewable Energy Fund. An electronic version of the Request for Applications (RFA) and this form are available online at: http://www,akenergyauthority.org/RE Fund-6.html • If you need technical assistance filling out this application, please contact Shawn Calfa, the Alaska Energy Authority Grant Administrator at (907) 771-3031 or at scalfaCaaidea.org. • If you are applying for grants for more than one project, provide separate application forms for each project. • Multiple phases for the same project may be submitted as one application. • If you are applying for grant funding for more than one phase of a project, provide milestones and grant budget for each phase of the project. • In order to ensure that grants provide sufficient benefit to the public, AEA may limit recommendations for grants to preliminary development phases in accordance with 3 ACC 107.605(1). • If some work has already been completed on your project and you are requesting funding for an advanced phase, submit information sufficient to demonstrate that the preceding phases are satisfied and funding for an advanced phase is warranted. • If you have additional information or reports you would like the Authority to consider in reviewing your application, either provide an electronic version of the document with your submission or reference a web link where it can be downloaded or reviewed. REMINDER: • Alaska Energy Authority is subject to the Public Records Act AS 40.25, and materials submitted to the Authority may be subject to disclosure requirements under the act if no statutory exemptions apply. • All applications received will be posted on the Authority _web site after final recommendations are made to the legislature. • In accordance with 3 AAC 107.630 (b) Applicants may request trade secrets or proprietary company data be kept confidential subject to review and approval by the Authority. If you want information is to be kept confidential the applicant must: o Request the information be kept confidential. o Clearly identify the information that is the trade secret or proprietary in their application. o Receive concurrence from the Authority that the information will be kept confidential. If the Authority determines it is not confidential it will be treated as a public record in accordance with AS 40.25 or returned to the applicant upon request. AEA 13-006 Application Page 1 of 22 7/3/2011 Renewable Energy Fund Round 6 Grant Application - AlW .,�,�-�� SECTION 1 — APPLICANT INFORMATION Name INN Electric Cooperative, Inc. Type of Entity: Electric Cooperative Fiscal Year End 12131 Tax ID # 920082071 Tax Status: For -profit or -(_non-profit ( check one) Mailing Address Physical Address P.O. Box 210, Iliamna, AK 99606 100 Fire Lane, Newhalen, AK 99606 Telephone Fax Email 907-571=1259 907-571=1752 innmanager@innelectric.com 1.1 APPLICANT POINT OF CONTACT I GRANTS MANAGER Name Title George Hornberger General Manager Mailing Address P.O. Box 210, Iliamna, AK 99606 Telephone Fax Email 907-571=1259 907-571A752 innmanager@innelectric.com 907-227-0094 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 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 cpna 7* a&j 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 1.2A 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. AEA13-006 Grant Application Page 2 of 22 7/3//2012 Renewable Energy Fund Round 6 401D Grant Application -iMONFLD ENERGY AUTHORITY SECTION 2 — PROJECT SUMMARY This is intended to be no more than a 1-2 page overview of your project. 2.1 Project Title — (Provide a 4 to 5 word title for your project) Tazimina Hydroelectric Project Capacity Increase 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 %J Project —Latitude and longitude, street address, or community name. Latitude and longitude coordinates may be obtained from Goog/e 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: 61.195676.449.898663. If you would like assistance obtaining this information please contact AEA at 907-771-3031. 5y.`J-U44t5t5,-"I b4.fjy1'I Jti 2.2.2 Community benefiting — Name(s) of the community or communities that will be the beneficiaries of the project. Illamna, NeWnalen, Nondalton 2.3 PROJECT TYPE Put X in boxes as appropriate 2.3.1 Renewable Resource Type Wind Biomass or Biofuels X 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 Conceptual Design 2.4 PROJECT DESCRIPTION Provide a brief one paragraph description of your proposed project. INNEC proposes to conduct a feasibility study related to increasing the capacity of the existing Tazimina Hydroelectric Project by replacing either one or two of the existing generating units with larger generating units. The study will evaluate existing energy use and future energy requirements for the region. An economic analysis will compare the costs of future generation under a variety of scenarios. A procurement package will be prepared if the project is found to be feasible. AEA13-006 Grant Application Page 3 of 22 7/3//2012 Renewable Energy Fund Round 6 Grant Application 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.) Increased generation capacity will allow INNEC to capture additional energy that is available at the project site. This additional energy is expected to be at a low incremental cost since the project is already constructed and was designed for expansion. The additional energy will offset diesel energy and allow for the further expansion of the community heating system. Increasing the project's capacity produces increased energy generation without any environmental impact. 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 overall project budget is $2.6M from which $2.3M is assumed to come from RE funds and $300k from matching contributions from INNEC. The Phase 1 Feasibility Study is budgeted at $190,000 with $30,000 coming from contributions by INNEC and the remainder coming from RE funds. 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. $ 160,000 2.7.2 Cash match to be provided $ 15,000 2.7.3 In -kind match to be provided $ 15,000 21A Other grant applications not yet approved $ 0 2.7.5 Total Grant Costs (sum of 2.7.1 through 2.7.3) $ 1903000 . 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 $ 23600,000 AEA13-006 Grant Application Page 4 of 22 7/3//2012 Renewable Energy Fund Round 6 Grant Application including estimates through construction) 2.7.7 Estimated Direct Financial Benefit (Savings) $ 2.7.8 Other Public Benefit (If you can calculate the benefit in $ terms of dollars please provide that number here and explain how you calculated that number in. your application (Section 5.) AEA13-006 Grant Application Page 5 of 22 7/3//2012 Renewable Energy Fund Round 6 Grant Application - 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. INNEC is the single point of contact and will execute all grant, contractual and administrative responsibilities. HDR Alaska will provide all site investigation, analysis and evaluation. George Hornberger, INNEC General Manager, is the Grant Manager. He is the single point of contact with AEA and will execute all grant contractual and administrative responsibilities. Mr. Hornberger is skilled in tracking budgets, communications, and in his ability to deal. smoothly and professionally with employees, vendors, and customers in day4o-day and occasionally adverse situations. Paul Berkshire, P.E., a senior engineer and hydropower program lead for HDR Alaska, will serve as the Project Manager, Mr. Berkshire was the original design manager for the project and as such is intimately familiar with the project. He will work with the Grant Manager to commit essential engineering disciplines to ensure a successful project. He will establish specific man hour and reimbursable budgets, and schedule the necessary technical staff. He will track specific contractual deliverables against the schedule to ensure adequate resources are available to meet critical milestones. Mr. Berkshire will oversee all technical work and coordinate the efforts of our team to ensure the efficient and cost effective production of project work products. He will develop a realistic project schedule to address critical issues in proper sequence to minimize cost and maximize construction resources. 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. Please fill out form provided below. You may add additional rows as needed. Start End Milestones Tasks Date Date Receive Round VI RE Grant 7/1/13 7/1/13 Site Visit Complete Document as -built conditions at hydroelectric project, identify potential load centers, review historical energy use 8/5/13 8/9/13 Draft feasibility Report Identification of alternatives, fuel price forecasts, load forecasts, economic analysis 8/12/13 1/1/14 Final feasibility report QA/QC 1/1/14 1/15/14 Go/No Go Decision 1/20/14 Prepare Procurement Documents Specifications, installation instructions, design drawings showing powerhouse modifications 1/20/14 6/1/14 End of Round VI RE Grant 6/1/14 Apply for Round VII RE Grant 9/1/14 AEA13-006 Grant Application Page 6 of 22 7/3//2012 Renewable • Fund Round • Grant Application - IMINED ENERGY AUTHORITY Receive Round VII Grant Funds 7/1/14 Award Contract 9/1/14 Install New Units 6/1/15 11/1/15 AEA13-006 Grant Application Page 7 of 22 7/3//2012 Renewable Energy Fund Round 6 Grant Application .A -- !ems •- 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. INNEC has teamed with the engineering firm of HDR Alaska for the performance of this feasibility study. HDR provides unmatched in-depth expertise and real -world experience in the full range of hydropower -related disciplines. • Hydrologic and basin modeling experts for the development of stream flow models, energy generation projections, and basin operation/unit dispatch models. • Design engineers and specialists with proven track records in project design, construction management, and project startup. • Current expertise in the licensing, relicensing, and regulatory processes of the FERC and other agencies. • Current expertise in NEPA environmental assessments, reports, and impacts statements, including Applicant -Prepared Environmental Assessments. • Effective and cooperative working relationships with federal, state and local agencies, tribes, and native corporations nationwide. • Proven performance leading licensing and design teams on major new hydroelectric projects and plant upgrades. • Complete in-house civil, structural, mechanical, and electrical design engineers; along with environmental, licensing, regulatory, and permitting specialists. HDR's project experience list includes hundreds of operational facilities in the hydroelectric, power, and energy arena. HDR's project team will be led by Paul Berkshire, P.E. Mr. Berkshire has over 20 years of experience in consulting civil engineering, small hydropower development and generation facility operation. He has performed at a high level throughout much of his career as Lead Civil Engineer and/or Project Manager for both public and private clients throughout the United States and Latin America. Paul is well versed in small hydropower development and has completed a substantial number of project evaluations, feasibility studies, and designs of new projects and due diligence reviews of existing facilities. Paul's design and construction oversight experience in public works and infrastructure projects includes highways and roads, canals and pipelines and water storage and diversion structures. Paul has proven himself to be a highly capable and has a diversity of experience and knowledge well suited to the hydropower industry. Mr. Berkshire is uniquely qualified for this project since he was the original design manager for the design and construction of the Tazimina hydroelectric project. 3.4 Project Communications Discuss how you plan to monitor the project and keep the Authority informed of the status. Please provide an alternative contact person and their contact information. The Authority Project Manager will be kept up to date on the project status by periodic email AEA13-006 Grant Application Page 8 of 22 7/3//2012 Renewable Energy Fund Round 6 WED GNIED Grant Application -4IIIIIIIIIIIIIED ENERGY AUTHORITY and/or verbal status reports, in addition to written quarterly reports submitted by the INNEC Grant Manager. Periodic reports will provide general information regarding project status and any unforeseen circumstances that need to be resolved. The quarterly Grant Manager reports will include specific information on project completion status vs. project schedule; project labor reports — including hours, rates and costs; and current project expenditures relative to budgeted project costs. The alternate contact will be: Paul Berkshire, P.E. HDR Alaska 2525 C Street, Suite 305 Anchorage, AK 99503 Paul, berkshireCc hdrinc.com (907) 360- 10 15 3.5 Project Risk Discuss potential problems and how you would address them. Risk mitigation will be accomplished by implementing a risk identification and mitigation program for the duration of the project. At this initial stage, the primary risks and our proposed mitigation plan are as follows: Risk of increased project cost —the cost estimate to expand the hydroelectric facility is currently at the preliminary stage of development. There is a risk that the cost estimate will increase during the final design and construction. This risk will be mitigated by carefully monitoring the scope and scale of the project, ensuring that cost effective measures are implemented to hold costs down, and by developing a detailed and thorough implementation plan that accurately reflects the scope of the project. Risk of being able to obtain the necessary authorizations from resource agencies. There is a risk that the necessary approvals from the resource agencies could be difficult and costly to obtain. The project team will contact the resource agencies as part of the feasibility study to introduce them to the project and to identify and issues. There are additional elements of risk that arise in any rural Alaska construction project; however, the risk associated with this project is well managed. A highly competent team of professionals has been assembled with the skills and motivation necessary to see this project through to successful completion. The project has been devised to proceed in distinct phases, with carefully planned go/no go decision intervals. AEA13-006 Grant Application Page 9 of 22 7/3//2012 Renewable Energy Fund Round 6 I MIMED Grant Application - ENERGY AUTHORITY SECTION 4 - PROJECT DESCRIPTION AND TASKS • The level of information will vary according to phase(s) of the project you propose to undertake with grant funds. • If some work has already been completed on your project and you are requesting funding for an advanced phase, submit information sufficient to demonstrate that the preceding phases are satisfied and funding for an advanced phase is warranted. 4.1 Proposed Energy Resource Describe the potential extent/amount of the energy resource that is available. Discuss the pros and cons of your proposed energy resource vs, other alternatives that may be available for the market to be served by your project. For pre -construction applications, describe the resource to the extent known. For design and permitting or construction projects, please provide feasibility documents, design documents, and permitting documents (if applicable) as attachments to this application. The potential increase in available energy is conceptually estimated to be between 2-2.6 million kWhs annually. This feasibility study will provide a detailed analysis of this estimate. The pro's of this project is that the hydroelectric project has already been constructed and provisions were included in the original design to allow for a straight forward capacity expansion. As such, the $/kW for additional capacity is expected to be low. The con is that there might not be enough load in communities to economically justify the project. The most readily alternative for generation is diesel generation from the existing generation plant. 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 Tazimina Hydro Plant currently has 2 Francis turbines made by Gilkes. Each of these are turning a 412 Kw Kato Generator. These units are going on 16 years old. The INN Electric diesel plant has 3 Cat 3412 engines turning 300 Kw Kato generators and 1 Cat 3412 turning a 600 Kw Kato generator. These units are 30 years old. Our efficiency is 12.51 Kwh per gallon of fuel. 4.2.2 Existing Energy Resources Used Briefly discuss your understanding of the existing energy resources. Include a brief discussion of any impact the project may have on existing energy infrastructure and resources. The Tazimina River provides the water for most of the electrical energy needs of INNEC. The remaining energy resource is diesel which is brought in intermittently by barge in the summer months and mostly flown in. Diesel is used for electrical energy generation, transportation and heat. The only negative impact to the existing energy resources will be the loss of hydroelectric generation from the existing units as they are being replaced. However, this loss of generation is expected to be short in time and can be coordinated with other resources by INNEC. The positive impact is that diesel fuel needs could potentially be reduced. AEA13-006 Grant Application Page 10 of 22 7/3//2012 Renewable Energy Fund Round 6 Grant Application - i MMIE) ENERGY AUTHORITY 4.2.3 Existing Energy Market Discuss existing energy use and its market. Discuss impacts your project may have on energy customers. By uzing surplus hydroelectric power to provide interruptible electric space heat to major commercial and community facilities, the hydroelectric project will be further reduce diesel fuel consumption in the communities. 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 The Tazimina Hydroelectric Project is a conventional run -of -river hydroelectric operation that uses the natural flow of the Tazimina River. This is proven technology that exists throughout Alaska and the world. The project has no impoundment and relies on the natural river flow. Rvier flows are diverted into a penstock, through a generator turbine installed in a powerhouse, and returned to the river at the base of the falls. Optimum Installed Capacity: 1,500 kW Anticipated Capacity Factor: 45% Anticipated Annual Generation: 6,000,000 kWh Anticipated Barriers Winter operation hampered by freezing river flow and powerhouse discharge Winter maintenance for road access to powerhouse Basic Integration Concept The project will be a part of the existing system. As such, it is already fully -integrated. Delivery Methods Project generation will intertie with the existing INNEC distribution via the existing project transmission line 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. AEA13-006 Grant Application Page 11 of 22 7/3//2012 Renewable Energy Fund Round 6 MMID Grant Application - ENERGY AUTHORITY INNEC has all rights to the project lands. As such, no land ownership issues are expected. 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 The existing project is subject to regulations of both State and Federal agencies. As there will be no land disturbing activities, a minor permitting effort is expected related to replacement of the existing generation units. Authorization is expected to be required from Alaska Department of Natural Resources (DNR), Alaska Department of Fish and Game (ADF&G) and the FFederal Energy Regulatory Commission (FERC). 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 Since the base project is already constructed and there will be no ground disturbing activities associated with replacing the generating units, none of the above environmental issues apply. 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 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 understanding of AEA13-006 Grant Application Page 12 of 22 7/3//2012 Renewable Energy Fund Round 6 4NED Grant Application - ENERGY AUTHORITY The total anticipated project cost is currently estimated at $2.6M. This cost is derived from vendor budgetary estimates for equipment and an engineer's estimate for design, permitting, construction management, installation and startup and testing. Phase 1 of the project will be the economic analysis and feasibility study. Assuming a positive result from the economic analysis the final procurement documents will be prepared. The budget for Phase I is $190,000 of which $160,000 is assumed to come from RE funds and $30,000 from INNEC. The overall project cost is estimated at $2.6M for which anticipates contributing $3001000. Since this is an upgrade of an existing renewable energy project there are no new development costs. 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.) No additional operating or maintenance costs are expected. 4.4.3 Power Purchase/Sale The power purchase/sale information should include the following: • Identification of potential power buyers)/customer(s) • Potential power purchase/sales price - at a minimum indicate a price range • Proposed rate of return from grant4unded project There are many potential customers in the service area that would benefit from excess power salesI Including, Iliamna Air Taxi, Pebble Limited Partnership. State of Alaska, Newhalen City, Nondalton City, Iliamna Trading and any other business. At this time INN Electric has an interruptible power agreement with Lake and Peninsula School District for the Newhalen School and Nondalton School. With this agreement we are utilizing 100 percent of the available power from the Tazimina Hydro Plant in the winter. INNEC is selling this power at 12 cents per KWh. This price is based on 75% of LPSD's avoided cost of stove oil at $5.20 per gallon. With more available power and more interruptible power available INNEC would like to lower this cost even more. AEA13-006 Grant Application Page 13 of 22 7/3//2012 Renewable Energy Fund Round 6 Grant Application - 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 The project will use the Tazimina River which flows year round. The sustainability of this resource is demonstrated by 14 years of operation at the existing hydroelectric project. Unit depends on project type (e.g. windspeed, hydropower output, biomasss fuel) Existing Energy Generation and Usage a) Basic configuration (if system is part of the Railbelt' grid, leave this section blank) i. Number of generators/boilers/other ii. Rated capacity of generators/boilers/other iii. Generator/boilers/other type iv. Age of generators/boilers/other v. Efficiency of generators/boilers/other 2 hydro generators 4 diesel generators (2) 412 Kw Hydro (3) 300 Kw diesel (1) 600 Kw diesel All Kato Generators Diesels are Caterpillar Diesel Generators are 30 years old Hydro 14 years 12.5 kW/gallon b) Annual O&M cost (if system is part of the Railbelt grid, leave this section blank) i. Annual O&M cost for labor $751000 ii. Annual O&M cost for non -labor $125,000 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] ii. Fuel usage Diesel [gal] Other iii. Peak Load iv. Average Load v. Minimum Load vi. Efficiency vii. Future trends 2011 total power production 4,015,461 KWh 6056 gallons for power production 813 Kw hydro 500 Kw hydro 200 kW Increased sales of interruptible energy 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. AEM M06 Grant Application Page 14 of 22 7/3//2012 Renewable Energy Fund Round 6 Grant Application - i41111111111D ENERGYAUTHORITY 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 1.5 MW (Wind, Hydro, Biomass, other) [kW or MMBtu/hr] b) Proposed annual electricity or heat production (fill in as applicable) i. Electricity [kWh] 670001000 kWh initially ii. Heat [MMBtu] c) Proposed annual fuel usage (fill in as applicable) i. Propane [gal or MMBtu] 0 ii. Coal [tons or MMBtu] 0 iii. Wood [cords, green tons, dry tons] 0 iv. Other 0 Project Cost a) Total capital cost of new system $2.6M b) Development cost c) Annual O&M cost of new system 0 (included in cost of existing system) d) Annual fuel cost 0 Project Benefits a) Amount of fuel displaced for i. Electricity ii. Heat For Lake and Peninsula School District we have displaced over 50,000 gals. This amount is expected to increase with more available energy iii. Transportation b) Current price of displaced fuel $7.85/gallon c) Other economic benefits d) Alaska public benefits AEA13-006 Grant Application Page 15 of 22 7/3//2012 Renewable Energy Fund Round 6 iMMID GOOD Grant Application 4111111IMED ENERGY AUTHORITY Power Purchase/Sales Price a) Price for power purchase/sale Price will be determined by a rate study Project Analysis a) Basic Economic Analysis Project benefit/cost ratio 1.6 Payback (years) 4.4.5 Proposed Biomass System Information Please address the following items, if know. (For Biomass Projects Only) • What woody biomass technology will be installed (cord wood, pellets, chips, briquettes, pucks). • Efficiency of the biomass technology. • Thermal or electric application. • Boiler efficiency. • Displaced fuel type and amount. • Estimated tons of wood pellets or chips (specify) to be used per year, and average moisture percentage. • Estimated cords of wood to be used per year, specify whether dry or green and the moisture percentage. • Ownership/Accessibility. Who owns the land and are their limitations and restrictions to accessing the biomass resource? • Inventory data. How much biomass is available on an annual basis and what types (species) are there, if known? AEA13-006 Grant Application Page 16 of 22 7/3//2012 Renewable Energy Fund Round 6 Grant Application - 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 (Le. green tag sales or other renewable energy subsidies or programs that might be available) • Discuss the non -economic public benefits to Alaskans over the lifetime of the project The Tazimina River has much untapped potential. The Tazimina hydroelectric project was originally designed with future expansion in mind to use this untapped resource as the loads in the communities grew. Installation of new turbine/generator sets will allow for this excess energy to be captured. It is estimated that up to 160,000 gallons of diesel could be avoided per year if all the surplus energy could be used. At today's prices that equates to approximately $1.25M annually. Since this energy will be surplus, INNEC would like to expand its current program of displacing diesel fired heating with electric boilers utilizing this surplus energy. By generating additional energy at a low incremental cost everyone in the community will benefit from the displacement of diesel. 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 AEA13-006 Grant Application Page 17 of 22 7/3//2012 :Zenewa le • Energy • Round • 4NED I ONE) Grant Application •' INNEC currently owns and operates the Tazimina hydroelectric project and has done so for the last 14+ years. The expansion of capacity by replacement of the existing generating units will not require any additional operation & maintenance costs or changes to the organizational structure. The saving that will come from the project will be incorporated in the rates. As a cooperative, INNEC performs all of its business activities in the best interests of it `s ratepayers. SECTION 7 —READINESS &COMPLIANCE WITH OTHER GRANTS Discuss what you have done to prepare for this award and how quickly you intend to proceed with work once your grant is approved. Tell us what you may have already accomplished on the project to date and identify other grants that may have been previously awarded for this project and the degree you have been able to meet the requirements of previous grants. The biggest preparation for this work was the incorporation of the future expansion plans in the original design and construction of the existing Tazimina hydroelectric project. As such, there will be no modifications required for the intake, penstock, powerhouse or tailrace. For the expansion project, INNEC has been discussing the project with equipment vendors, contractors and their design engineer. 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 use of surplus energy for community heating has broad support from the community. No opposition is expected from increasing this benefit. AEA13-006 Grant Application Page 18 of 22 7/3//2012 Renewable Energy Fund Round 6 Grant ADDlicati-on - SECTFON 9 —GRANT BUDGET Tell us how much you want in grant funds Include any investments to date and funding sources, how much is being requested in grant funds, and additional investments you will make as an applicant. Provide a narrative summary regarding funding sources and your financial commitment to the project. The Phase 1 Feasibility Study is budgeted at $190,000. INNEC proposes to contribute $30,000 towards the study. The additional $160,000 of funds are expected to come from RE grants. Applications should include a separate worksheet for each project phase that was identified in section 2.3.2 of this application, (Reconnaissance, Feasibility, Conceptual Design, Design and Permitting, and Construction). Please use the tables provided below to detail your proposed project's budget. Be sure to use one table for each phase of your project. If you have any question regarding how to prepare these tables or if you need assistance preparing the application please feel free to contact AEA at 907-771-3031 or by emailing the Grant Administrator, Shawn Calfa, at scalfa@aidea. org. Source of Matching Anticipated Grantee Funds: Milestone or Task Completion Fund Matching Cash/In- TOTALS Date ran Grant Funds Funds kind/Federal Grants/Other State Grants/Other Project Scoping & Contractor Selection 9/1/12 0 0 n/a 0 Detailed Energy Resource Analysis 1/5/14 $25,000 $0 n/a $25,000 Identification of land and regulatory issues n/a n/a n/a n/a n/a Permitting and environmental analysis n/a n/a n/a n/a n/a Detailed Analysis of existing and future energy costs and 1/5/14 $25,000 $0 n/a $25,000 markets Assessment of alternatives 1/5/14 $10,000 $0 n/a $10,000 Conceptual design analysis and cost estimate 1/5/14 $50,000 $10,000 In -kind $60,000 AEA13-006 Grant Application Page 19 of 22 7/3//2012 Renewable Energy Fund Round 6 Grant Application - • ENERGY AUTHORITY Detailed economic and financial analysis 1/5/14 $30,000 $0 n/a $30,000 Conceptual business and operations plans 1/5/14 $10,000 $10,000 $5k cash/$5k in kind $20,000 Final report and recommendations 1/5/14 $10,000 $10,000 cash $20,000 TOTALS1 $160,000 $30,000 $190,000 Budget Categories: Direct Labor & Benefits $ $25,000 $ Travel & Per Diem $ $5,000 $ Equipment $ $ $ Materials & Supplies $ $ $ Contractual Services $160,000 $ $. Construction Services $ $ $ Other $ $ $ TOTALS $160,000 $25,000 $190,000 AEA13-006 Grant Application Page 20 of 22 7/3//2012 Renewable Energy Fund Round 6 Grant Application SECTION 10 — AUTHORIZED SIGNERS FORM Community/Grantee Name: Regular Election is held: Authorized Grant Sianer(Cp Date: 1I IWA,WINf, Printed Name Title Term)Signature George Hornberger General Manager I authorize the above persons) to sign Grant Documents: (Highest ranking organization/community/municipal official) mew 0 ash Grantee Contact Information: Mailing Address: i�O, 3ok a►o r I�u,�,,��,.� RK o,q(Q��j Phone Number: 90"'7- 7 �- s gas g Fax Number: E-mail Address: 1 v1 h 1MCL Vj &4% C Ovr, Federal Tax ID #: Please submit an updated form whenever there is a change to the above information. AEA13-006 Grant Application Page 21 of 22 7/3//2012 Renewable Energy Fund Round 6 Grant Application - SECTION 11 —ADDITIONAL DOCUMENTATION AND CERTIFICATION SUBMIT THE FOLLOWING DOCUMENTS WITH YOUR APPLICATION: A. Contact information, resumes of Applicant's Project Manager, key staff, partners, consultants, and suppliers per application form Section 3.1 and 3.4. Applicants are asked to separate resumes submitted with applications, if the individuals do not want their resumes posted. B. Letters demonstrating local support per application form Section 8. C. An electronic version of the entire application on CD per RFA Section 1.7. D. Governing Body Resolution or other formal action taken by the applicant's governing body or management per RFA Section 1.4 that. - Commits the organization to provide the matching resources for project at the match amounts indicated in the application. - Authorizes the individual who signs the application has the authority to commit the organization to the obligations under the grant. Provides as point of contact to represent the applicant for purposes of this application. Certifies the applicant is in compliance with applicable federal, state, and local, laws including existing credit and federal tax obligations. E. CERTIFICATION The undersigned certifies that this application for a renewable energy grant is truthful and correct, and that the applicant is in compliance with, and will continue to comply with, all federal and state laws including existing credit and federal tax obligations and that they can indeed commit the entity to these obligations. Print Name eft Coo, weC1�in�er �,r Signature Title �eher a Date AEA13-006 Grant Application Page 22 of 22 7/3//2012 George Hornberger George Hornberger has worked as General Manager for INN Electric Cooperative for the last 3.5 years. During this time George managed approximately 700,000 dollars in grant money for repairs, maintenance and upgrades to the Tazimina Hydroelectric Plant. George is in charge of day to day operations of INN Electric Cooperative and is highly capable and has very diverse experience living and working in Bush Alaska. His experience includes 20 years as Chief Pilot for Iliamna Air Taxi, welding, mechanical, carpentry,construction and commercial fishing. . George has a very good working relationship with Alaska Energy Authority, George Hornberger has assisting him in financial and accounting services, Terri Harper, Manager of Financial Services for Rural Alaska Fuel Services and Del Conrad, CEO Rural Alaska Fuel Services. Paul A. Berkshire -Page 6 September 20, 2012 Renewable Energy Fund, Round 6 Alaska Energy Authority 813 West Northern Lights Blvd. Anchorage, AK 99503 Re: INN Electric Cooperative —Renewable Energy Fund Round 6 Grant Application — Letter of Commitment Feasibility Study Funding Request — Tazimina Hydroelectric Project Application Review Committee. INN Electric Cooperative (INNEC) is pleased to submit the attached application for a Renewable Energy Fund Grant for a feasibility study to evaluate adding capacity to the existing Tazimina Hydroelectric Project, an eligible renewable energy project as defined under AS 42.45.045. INNEC is authorized by the Regulatory Commission of Alaska to provide power to the communities of Iliamna, Newhalen and Nondalton under Certificate of Public Convenience and Necessity, CPC&N No. 280. The attached Application documents and describes the request for feasibility study funding for the hydroelectric project. The total estimated cost is 5190,000. INNEC commits to this project a match of $15,000 in direct labor costs (wages and benefits), and a cash match of $15,000. INNEC strives to keep electric costs as low a possible by maximizing operating efficiencies and reducing operating costs. The addition of additional capacity at the project will allow us to capture unused energy that is available and offer that back to the communities at a greatly reduced rate. This project can be easily implemented as the original design and construction of the project anticipated future expansion. Additionally this project- can be implemented with no environmental or permitting obstacles. INNEC welcomes the Alaska Energy Authority to implement this essential renewable energy project, and requests the Review Committee carefully consider the merits of this application. We look forward to working with you on this project. Please feel free to contact me at (907) 5714259 with questions. General Manager, INNEC P.O. Box 210 Iliamna, Alaska 99606 inrunanager@innelectric. com