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Home My WebLink AboutHuslia Water System & Clinic Wood BoilerALASKA Renewable Energy Fund Round 5 ,00--- ENERGY AUTHORITY Grant Application Application Forms and Instructions The following forms and instructions are provided to assist you in preparing your application for a Renewable Energy Fund Grant. An electronic version of the Request for Applications (RFA) and the forms are available online at: http://www.akenergyauthoritV.org Grant Application GrantApp5.doc Application form in MS Word that includes an outline of Form information required to submit a complete application. Applicants should use the form to assure all information is provided and attach additional information as required. Application Cost Costworksheet Summary of Cost information that should be addressed by Worksheet 5.doc applicants in preparing their application. Grant Budget GrantBudget5. A detailed grant budget that includes a breakdown of costs by Form doc milestone and a summary of funds available and requested to complete the work for which funds are being requested. Grant Budget GrantBudgetln Instructions for completing the above grant budget form. Form Instructions structions5.doc Authorized Authorized Form indicating who is authorized to sign the grant, finance Signers Form signers reports and progress reports and provides grantee information. form5.doc • 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 completion of each phase. • 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 12-001 Application Page 1 of 19 7/1/2011 A"ALSA AUTHORITY Renewable Energy Fund Grant Application Round 5 SECTION 1 — APPLICANT INFORMATION Name (Name of utility, IPP, or government entity submitting proposal) Huslia Traditional Council Type of Entity: Fiscal Year End Federally recognized tribe Tax ID # 91-1776426 Tax Status: For -profit or Xnon-profit ( check one Mailing Address Physical Address PO Box 70 Huslia, AK Huslia, AK 99746 Telephone Fax Email 907 829-2294 907 829-2409 htced@hotmail.com 1.1 APPLICANT POINT OF CONTACT / GRANTS MANAGER Name Title Kimberly Carlo Energy and Weatherization Specialist Interior Regional Housing Authority Mailing Address 828 27`h Avenue, Fairbanks, AK 99701 Telephone Fax Email 907 452-8315 907 456-8941 kcarlo@irha.org Ext 160 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) 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 X 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 or its board of directors, executive management, or other governing authority. If the No 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 or follow procurement standards that comply with the standards set forth in the grant No agreement. Yes 1.2.4. If awarded the grant, we can comply with all terms and conditions of the attached or grant form. (Any exceptions should be clearly noted and submitted with the No application.) Yes 1.2.5 We intend to own and operate any project that may be constructed with grant or funds for the benefit of the general public. No AEA12-001 Grant Application Page 2 of 19 7/1//2011 ALASK t Renewable Energy Fund ,4MNDENERGY AUTHORriY Grant Application Round 5 SECTION 2 — PROJECT SUMMARY This is intended to be no more than a 1-2 page overview of your project. 2.1 Project Title — (Provide a 4 to 5 word title for your project) Type in your answer here and follow same format for rest of the application. Huslia Water System and Clinic Wood Boiler Project 2.2 Project Location — Include the physical location of your project and name(s) of the community or communities that will benefit from your project. Location — latitude and longitude or street address or community / communities served: The community of Huslia lies at approximately 65.698610 North Latitude and-156.399720 West Longitude (Sec. 33, T004N, R012E, Kateel River Meridian) in the Interior of Alaska. 2.3 PROJECT TYPE Put X in boxes as appropriate 2.3.1 Renewable Resource Type Wind X Biomass or Biofuels Hydro, including run of river Transmission of Renewable Energy Geothermal, including Heat Pumps Small Natural Gas Heat Recovery from existing sources Hydrokinetic Solar X Storage of Renewable Other (Describe) 2.3.2 Proposed Grant Funded Phase(s) for this Request (Check all that apply) Reconnaissance X Design and Permitting Feasibility X Construction and Commissioning Conceptual Design 2.4 PROJECT DESCRIPTION Provide a brief one paragraph description of your proposed project. The project will design and construct a manual cordwood wood energy system in the community of Huslia, Alaska. The wood energy system will provide heat for the community water plant, washeteria and health clinic. The project is projected to save approximately $41,516 annually in fuel costs for the three facilities out of a total fuel expenditure of $130,416/year. The water plant and washeteria are co -located and are adjacent to the health clinic. All three facilities will be served by a common wood -fired heating plant consisting of two Gam WHS 2000 boilers and a fuel storage building. The biomass resource will be purchased from residents of the community by the Huslia Traditional Council AEA12-001 Grant Application Page 3 of 19 7/1//2011 �E ALASHKA Renewable Energy Fund Grant Application Round 5 AEA12-001 Grant Application Page 4 of 19 7/1//2011 AW41OU ALASM ENERGY AUTHORFTY Renewable Energy Fund Grant Application Round 5 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 Huslia Water System and Clinic Wood Boiler project will result in reduced fuel consumption and lower energy costs for three community facilities — the health clinic, the water plant and the washeteria. All three facilities are heavily used by community members. A reduction in energy costs will result in a reduction in operating costs — a direct benefit for the Huslia Traditional Council who operates the facilities and community members who utilize the services. The Huslia Wood boiler project will impact critical community services - the piped water system, restroom, shower, laundry and health care services — by enhancing the sustainability of the services. A reduction in operating costs will allow for capital replacement funds to be maintained at rates that will help fund replacement of facilities in the future. Reduced operating costs will also allow fees for services to community members to remain at affordable rates. The price of fuel oil in Huslia (January 2011) is $6.00/ per gallon delivered to the community, some of the highest in the state. High energy costs are set across a backdrop of low median household income and high poverty rate. In 2009, the median household income in Huslia was $22,417; the median household income in the state was $63,505. AEA's Alaska Energy, A Fist Step Towards Energy Independence calculates that residents of Huslia spend $4775 per capita on energy. A Preliminary Feasibility Assessment for High Efficiency, Low Emission Wood Heating in Huslia, Alaska (Daniel Parrent, Wood Utilization Specialist) was conducted in 2008. Three separate building clusters were indentified and evaluated for potential petroleum fuel displacement, use of forest residues for public benefit, use of local residues, sustainability of the wood supply, project implementation, operation and maintenance, and community support. The feasibility assessment identified the building cluster containing the water plant, washeteria and health clinic as cost-effective and operationally viable. Last year, Huslia spent $86,182 on fuel to run the water system and washeteria. The average fuel usage for the combined facility is 17,236 gallons. Fuel consumption at the health clinic is approximately 4500 gallons per year. At the current price of $6.00 per gallon it is projected to cost $130,416 per year for fuel oil for the water plant and clinic. The HELE cordwood fuel equivalent of 21,736 gallons of #1 fuel oil is approximately 254 cords, and at $350 cord represents a potential annual fuel cost savings of $41,516. The Huslia Water System and Clinic Wood Boiler project will require approximately 254 cords of wood per year at an estimated cost of $88,900. The price of $350/cord is an estimate. The prices per cord will likely decrease when it becomes known that there is a need for a steady supply of cordwood. Generating a small amount of cash into the economy through the local purchase of cordwood will bring an additional benefit to the project. AEA12-001 Grant Application Page 5 of 19 7/1//2011 / vmDGODGOOD ALASKA ENERGY AUTHORrrY Renewable Energy Fund Grant Application Round 5 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 is $478,982. The funding request from the AEA Renewable Energy Fund is $398,331. The project is a partnership between the Huslia Traditional Council, IRHA and ANTHC. ANTHC will provide project management as an in -kind contribution to the project; both IRHA and the Huslia Traditional Council are waiving their respective administrative overhead rates (10%). Huslia Traditional Council is contributing the land for the wood storage area and the boilers. The design and construction portion of the project cost includes the installation of Garn cordwood -fired hydronic heaters with underground insulated heat piping that distributes the heat to the three facilities in the community. A cordwood storage facility is included in the cost estimate: Material $156,374 Freight Cost $38,900 General Labor $41,833 Electrical labor $7,840 Plumbing labor $6,122 Equipment $43,300 Design/engineering $47,869 Construction management $23,041 Field Support $13,205 Project management $18,924 Permitting & Environmental analysis $2,183 Detailed energy resource analysis $5,954 Identification of land & regulatory issues $8,535 Operations plan $3,176 Land for boilers and wood storage $20,000 Administration $41,726 Total $4781982 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. $398,331.00 2.7.2 Other Funds to be provided (Project match) $80,650. 2.7.3 Total Grant Costs (sum of 2.7.1 and 2.7.2) $478,982 AEA12-001 Grant Application Page 6 of 19 7/1//2011 /&�ASKA, ENELA Renewable Energy Fund Grant Application Round 5 Project Costs & Benefits (Summary of total project costs including work to date and future cost estimates to get to a fully operational project) 2.7.4 Total Project Cost (Summary from Cost Worksheet $478,982 including estimates through construction) 2.7.5 Estimated Direct Financial Benefit (Savings) $41,516 annually 2.7.6 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.) AEA12-001 Grant Application Page 7 of 19 7/1//2011 /4ousmDALASKA Renewable Energy Fund 401UENERGY ALrrH©RrFY Grant Application Round 5 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. The project will be managed by Kimberly Carlo, Energy and Weatherization Administrator for IRHA and Carl Remley, Energy Program Manager, ANTHC, DEHE. Ross Coen, Rural Energy Specialist for TCC and UAF will advise on the project as needed. 3.2 Project Schedule Include a schedule for the proposed work that will be funded by this grant. (You may include a chart or table attachment with a summary of dates below.) The project timeline is September 1, 2012 to August 31, 2013. Task 1. Grant Administration. Huslia Traditional Council and IRHA will set-up the administrative component of the grant. This task includes facilitating and institutionalizing communication between project partners — Huslia Traditional Council, IRHA and ANTHC and the Alaska Energy Authority. Document management systems will be set-up in order to track objectives, budgeted versus actual expenditures and all procurement rules.. This task will also ensure all AEA reporting requirements are met. This task is ongoing throughout the project. Task 2. Design of the system will be conducted by ANTHC. This will involve geotechnical and site planning, mechanical design of hydronic modifications to the water treatment plant and washeteria, mechanical design for clinic heating, surveying and site plans for the buildings and heat lines, electrical and controls. The plans and specifications for the project will be stamped by registered professional engineers in the State of Alaska. Task 3. Permitting and environmental analysis. IRHA will conduct an environmental analysis of the site of the boilers and the wood storage unit. Categories of impact that will be examined include: land us, vegetation and wildlife resources, socioeconomic and infrastructure conditions including cultural, historical or archeological resources, air quality, water quality and solid and hazardous wastes. This task will take approximately six weeks, in order to allow for responses from appropriate agencies. Permitting required based on sealed engineering plans include fire marshal approval and ADEC permits. Task 4. Identification of land and regulatory issues/detailed energy resource analysis. This task will involve mapping of specific areas to be harvested for cordwood. It will be based on existing electronic community maps (based on aerial photography) and augmented by TCC's GIS system. There are no anticipated regulatory issues. This task is expected to require 52 hours of work by IRHA and tribal personnel. Task 5. Procurement of major long lead components. Procurements and consolidation of all construction materials Task 6 Mobilize, hire local crew, unload barge/planes, inventory and stage materials. Service local equipment. AEA12-001 Grant Application Page 8 of 19 7/1//2011 /mu ALASKA Renewable Energy Fund ® ENERGY AUTHORITY Grant Application Round 5 Task 7. Staking and layout of project; site grading, electrical service and underground piping. Task 8. Install 30' x 40' cordwood storage building. Task 9. Construct connections in new heating building, water treatment plant/washteria and clinic mechanical installations. Task 10. Commission system. Task 11. Operation and maintenance Training. Administrative management training. 3.3 Project Milestones Define key tasks and decision points in your project and a schedule for achieving them. The Milestones must also be included on your budget worksheet to demonstrate how you propose to manage the project cash flow. (See Section 2 of the RFA or the Budget Form.) Refer to Section 3.2 Project Schedule 3.4 Project Resources Describe the personnel, contractors, 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. The Huslia Traditional Council has partnered with IRHA and ANTHC for the project. The Council has an interest in providing quality, affordable services to residents of the community. As such, the Council is committed to lowering energy/operating costs wherever possible. IRHA has extensive project management and project construction experience. IRHA also has the staff and capacity to conduct environmental reviews, prepare a detailed energy resource analysis, and develop an operations plan for the biomass project. ANTHC excels at the technical engineering design and construction. Between the three entities, a well -designed wood energy project will be constructed that is sustainable with a business and operation plan that is relevant to the project and community. The project will utilize local equipment wherever possible. For equipment purchases (other than Garn Boilers) all state and federal procurement rules will be followed. Resumes of key positions are attached. 3.5 Project Communications Discuss how you plan to monitor the project and keep the Authority informed of the status. Personnel from IRHA and ANTHC and the Huslia Traditional council will be in regular communication about all aspects of the project. At a minimum, monthly teleconferences will be conducted so all partners know of the status of all aspects of the project. Minutes will be taken at the monthly meetings and forwarded to all partners and AEA. The original site visit will include a presentation either at a tribal council or community meeting. Both IRHA and ANTHC utilize software that tracks expenditures and related project budgets. This information will be used to keep AEA informed on a regular basis of project progress, expenditures and other project related issues. 3.6 Project Risk Discuss potential problems and how you would address them. A feasibility assessment has been conducted for the project; it is difficult to envision problems with a project that will lower energy costs in a community. However, one potential risk or AEA12-001 Grant Application Page 9 of 19 7/1//2011 /� ALASKAENERGY ALrFHORrrY Renewable Energy Fund Grant Application Round 5 problem is that oil prices could decrease to the point that the project doesn't represent a clear savings in energy costs. If this were to happen, the project would continue forward. Regardless of the cost of oil, the stimulation of the local economy, the project sustainability and community self sufficiency are considerable positive aspects of the project. A potential problem with any construction project is that the cost estimate is not a reflection of actual costs. Should that be in the case in this project, the partners will determine if any costs can be cut in order to make the project budget. Consideration will be given to the community providing equipment at no cost, and whether any non -construction personnel costs can be given in -kind rather than billed to the project. AEA12-001 Grant Application Page 10 of 19 7/1//2011 ALASKA Renewable Energy Fund ,MI--DENERGY AUTHORITY Grant Application Round 5 SECTION 4 — PROJECT DESCRIPTION AND TASKS • Tell us what the project is and how you will meet the requirements outlined in Section 2 of the RFA. • The level of information will vary according to phase(s) of the project you propose to undertake with grant funds. • If you are applying for grant funding for more than one phase of a project provide a plan and grant budget form for completion of each phase. • 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. The energy resource is locally available biomass in the form of cord wood. The attached study clearly indicates the abundance of this resource. The Interior villages have limited options for renewable or alternative energy sources. Biomass is the most efficient and cost-effective strategy. Wind has been mapped by AEA and Huslia is ranked a Class 2; not enough resource to pursue. Hydro, geothermal and natural gas do not exist in the region as an energy resource. Solar is a possibility, but high capital costs, a limited resource and no practical storage options, it does not compare to the benefits biomass will bring to projects in the region. 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 water plant/washeteria is co -located in one building. Space heat and process heat for the facility is provided by two relatively new Burnham PV89Wt-GBWF28 oil -fired boilers rated at 260 MMBH (net each). The health clinic is heated by a relatively new single Weil -McLain Gold P-WGO-5 oil fired boiler rated at 152 MBH (net). Heat is distributed via hot water baseboard heaters and domestic hot water is provided by BoilerMate unit. The water plant/washeteria consumed approximately 17,236 gallons of fuel last year; the health clinic consumed 4,500 gallons. 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 existing energy resource used in the community of Huslia is typically fuel oil for space heat as well as water system process heat. In the case of the facilities in the proposed project, fuel oil AEA12-001 Grant Application Page 11 of 19 7/1//2011 j�;ALASM Renewable Energy Fund ENERGY AUTHORITY Grant Application Round 5 would be displaced by cordwood. There is an abundant supply of wood in and around the community, both with cordwood and driftwood gathered from the river. The project impact on existing energy infrastructure and resources will be a positive one. With the installation of a cordwood wood energy system, a significant amount of fuel oil will be displaced with a lower cost resource. The project will reduce energy costs, contribute to the local cash economy, keep money (through the sale of fuel oil) from leaving the community, wildfire protection, and the potential to enhance wildlife habitat. 4.2.3 Existing Energy Market Discuss existing energy use and its market. Discuss impacts your project may have on energy customers. Existing energy use in the community is fuel oil for space heat and diesel for power generation. The Huslia Water System and Clinic Wood Boiler project will reduce the amount of fuel oil consumed for space heat and reduce the total cost of energy for the Huslia Traditional Council and the residents of the community who use the services. Currently local split and seasoned cord wood sells for $350. 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 system will consist of a "pole barn type metal building for use as an "energy building", to be erected in close proximity to the water treatment plant, washeteria and clinic. The building will house 2 each, 2000 gallon Garn cord wood hydronic boilers and storage of seasoned cord wood. Insulated heat lines will be routed to the water plant/washeteria and clinic. Design in the water plant will focus on heat required for the water storage tank, circulating water lines and building space heat. Heat for the clinic will be for building space heat. The units are to be designed to make use of "low quality" heat, to insure maximum yield throughout the firing of the units. 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. AEA12-001 Grant Application Page 12 of 19 7/1//2011 ALASKA Renewable Energy Fund Grant Application Round 5 There will be no land ownership issues with the proposed project. The Huslia Traditional Council owns the land adjacent to the health and the water plant and will utilize their land for the project. 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 Fire marshal review and ADEC permits are anticipated for the project. An environmental review will be conducted by IRHA on the project site. I n the event that the review indicates a need for any permits, IRHA will pursue the required permits. The environmental review process should take approximately six weeks. 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 IRHA will conduct an environmental review that includes all of the above mentioned issues. IRHA routinely conducts these reviews for its other construction and rehabilitation projects. 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 AEA12-001 Grant Application Page 13 of 19 7/1//2011 c ALASKA Renewable Energy Fund lam- �. ENERGY AUTHORITY Grant Application Round 5 The design and construction portion of the project cost includes the installation of Garn cordwood -fired hydronic heaters with underground insulated heat piping that distributes the heat to the two facilities in the community. A cordwood storage facility is included in the cost estimate. Material $156,374 Freight Cost $38,900 General Labor $41,833 Electrical labor $7,840 Plumbing labor $6,122 Equipment $43,300 Design/engineering $47,869 Construction management $23,041 Field Support $13,205 Project management $18,924 Permitting & Environmental analysis $2,183 Detailed energy resource analysis $5,954 Identification of land & regulatory issues $8,535 Operations plan $3,176 Land for boilers and wood storage $20,000 Administration $41,726 Total $478,982 The cost estimate for the design and construction of the project was developed by ANTHC (August 2011). The cost estimate for land was based on recent similar land sales in the region. The cost estimate for permitting and environmental review, energy resource analysis, land and regulatory issues and the operations plan was developed by IRHA based on recent experience with similar tasks. The administrative cost of 10% is based on audited financial statements of the organizations. 4.4.2 Project Operating and Maintenance Costs Include anticipated O&M costs for new facilities constructed and how these would be funded by the applicant (Note: Operational costs are not eligible for grant funds however grantees are required to meet ongoing reporting requirements for the purpose of reporting impacts of projects on the communities they serve.) The Huslia Water System and Clinic Wood Boiler project will design and construct a high efficiency, low emission wood fired boiler and wood storage facility. The project will lower the energy costs of existing facilities. The operating and maintenance costs of the wood -fired boiler are rolled into the operating and maintenance costs of the larger facility — the combined water plant and washeteria. Huslia Water Development is the entity that runs the water plant/washeteria. It is operated by the city and owned by the Tribe. Financial information for AEA12-001 Grant Application Page 14 of 19 7/1//2011 /Mwl--: ALASM Renewable Energy Fund 4MUi ENERGY AUTHORITY Grant Application Round 5 2010 shows an annual operating cost of $145,000. Utility rates for residential customers are increasing from $75.00/month to $100.00 month; commercial rates are increasing from $675.00/month to $1400.00/month. These rate increases will bring revenues in line with current expenditures (without the project). The installation of the wood -fired boiler system will displace 17,236 gallons of fuel oil for the water utility, for a potential savings of $103,416. The cost of cord wood for the boilers is estimated to be $70,350 — 201 cords x $350/cord. Overall savings are estimated to be $33,066 for the water utility. The project will decrease operating and maintenance costs and increases the sustainability of the utility. The health clinic currently uses 4500 gallons a year of fuel oil to heat the facility. The project will displace the fuel oil with 53 cord of wood at a total cost of $18,550. this represents a decrease in operating costs of $8450 per year. 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 N/A 4.4.4 Project Cost Worksheet Complete the cost worksheet form which provides summary information that will be considered in evaluating the project. Download the form, complete it, and submit it as an attachment. Document any conditions or sources your numbers are based on here. 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 (gal and $) over the lifetime of the evaluated renewable energy project • Anticipated annual revenue (based on i.e. a Proposed Power Purchase Agreement price, RCA tariff, or cost based rate) • Potential additional annual incentives (i.e. tax credits) • Potential additional annual revenue streams (i.e. green tag sales or other renewable energy subsidies or programs that might be available) • Discuss the non -economic public benefits to Alaskans over the lifetime of the project The Huslia Water System and Clinic Wood Boiler project is projected to displace 21,736 gallons AEA12-001 Grant Application Page 15 of 19 7/1//2011 /ALASKA Renewable Energy Fund �ENERGYAUTHORITY Grant Application Round 5 of fuel annually. At the current price of $6.00/gallon, this represents an annual cost savings of $41,516. The amount of fuel displaced will remain consistent over the life of the project. Cost savings will fluctuate with the price of oil, so it is difficult to project savings over the life of the project. However, the US Energy Information Agency predicts a gradual increase in the price of a barrel of oil, so an assumption that the current rate of savings will continue is a safe one. The project will benefit the community by displacing fuel and reducing the cost of services delivered to residents. The region will benefit by having a project design and construction to and up to date cost estimate to ut9ilzie when planning or implementing their own site specific projects. Areas across the state that have determined that biomass is a viable energy option can also benefit from the project. Other non -economic benefits are those that accrue from a methodical wood harvest. Local demand for biomass fuels will provide opportunities to improve local safeguards against wildfires and enhance the wildlife habitat. 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 The project will displace a high cost energy source with a lower cost renewable energy source. Operating costs will be decreased by the reduction in the cost of fuel oil and will increase by a lesser amount (resulting in overall savings) for the purchase of cord wood. No additional staff costs will be incurred; it has been determined that existing water plant staff can operate and maintain the boilers. All three facilities will have oil furnaces as back-up in the event of a wood - fired boiler failure. An operations plan will be developed before the system becomes operational. Training for operations is included in this proposal. AEA12-001 Grant Application Page 16 of 19 711H2011 /ZEE� ALASKA Renewable Energy Fund E% ENERGY AUTHORrrY Grant Application Round 5 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 community of Huslia has identified energy savings as a top community priority. The Huslia Traditional Council has a stated goal of providing services, in this case - water, restroom, laundry and health services - to residents of the community. With the recent increase in energy costs, the sustainability of services is becoming problematic. The community has identified experienced partners in order to proceed quickly with the project.. Both IRHA and ANTHC have extensive experience in designing and constructing projects in the region. Once the grant has been awarded, work will begin immediately. IRHA has been awarded an AEA grant to conduct feasibility assessments for eight other Interior villages for biomass projects. That work is ongoing. 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. There is no opposition to the Huslia Water System and Clinic Wood Boiler project. There is enthusiastic support from the community, from IRHA and from ANTHC (see attached resolution and letters of support). AEA12-001 Grant Application Page 17 of 19 7/1//2011 ALASKA Renewable Energy Fund Grant Application Round 5 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. Include an estimate of budget costs by milestones using the form — GrantBudget5.doc Provide a narrative summary regarding funding sources and your financial commitment to the project. AEA12-001 Grant Application Page 18 of 19 7/1//2011 ALASKA ME— ENCR(.33YAUTHOMYY Renewable Energy FUnd A. Contact information, resumes of Applicants 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 d*' not want their resumes posted. E. An electronic version of the entire application on CD per RFA Section 1.7. G. Governing Body Resolution or other formal action taken by the applican-rs- 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. H. 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 . .. . ... ... ........ t) C7111< (I L, Signature Title J Date c, AEA1 2-001 Grant Application Page 18 of 18 7111/2011 1 ; ALASKA Renewable Energy Fund Round 5 Ml::D ENERGY AUTHORITY Project Cost/Benefit Worksheet Please note that some fields might not be applicable for all technologies or all project phases. The level of information detail varies according to phase requirements. 1. Renewable Energy Source The Applicant should demonstrate that the renewable energy resource is available on a sustainable basis. Annual average resource availability. The project anticipates the use of 254 cords of wood annually. This is minimal compared to the existing forest resources and driftwood resource available in the community. Unit depends on project type (e.g. windspeed, hydropower output, biomasss fuel) 2. 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 2 Burnham PV89WT-GBWF28 oil -fired boilers, 1 Will -McLain Gold P-WGO-5 oil -fired boiler ii. Rated capacity of generators/boilers/other 260 MMBH each; 152 MBH iii. Generator/boilers/other type iv. Age of generators/boilers/other Approximately five years old v. Efficiency of generators/boilers/other Good b) Annual O&M cost (if system is part of the Railbelt grid, leave this section blank) i. Annual O&M cost for 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] ii. Fuel usage Diesel [gal] Other iii. Peak Load iv. Average Load v. Minimum Load vi. Efficiency vii. Future trends d) Annual heating fuel usage (fill in as applicable) i. Diesel [gal or MMBtu] 21,736 gallons per year ii. Electricity [kWh] 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. RFA AEA12-001 Application Cost Worksheet Page 1 7-1-11 /6wff-:`D ALASKA Renewable Energy Fund Round 5 �ENERGYAUTHORITY Project Cost/Benefit Worksheet iii. Propane [gal or MMBtu] iv. Coal [tons or MMBtu] v. Wood [cords, green tons, dry tons] vi. Other a) Proposed renewable capacity 1,900,000 Btu/hr (Wind, Hydro, Biomass, other) [kW or MMBtu/hr] b) Proposed annual electricity or heat production (fill in as applicable) i. Electricity [kWh] ii. Heat [MMBtu] 1,900,000Btu/hr 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] 254 cords of wood/year iv. Other a) Total capital cost of new system 378,484 b) Development cost c) Annual O&M cost of new system d) Annual fuel cost 88,900 (254 cords x $350/cord) 5. Project Benefits a) Amount of fuel displaced for i. Electricity ii. Heat 21,736 gallons/year iii. Transportation b) Current price of displaced fuel c) Other economic benefits d) Alaska public benefits 6. Power Purchase/Sales Price a) Price for power purchase/sale 7. Project Analysis $6.00/gallon RFA AEA12-001 Application Cost Worksheet Page 2 7-1-11 /Nwr-?D ALASM Renewable Energy Fund Round 5 GOLD ENERGY AUTHORITY project Cost/Benefit Worksheet a) Basic Economic Analysis Project benefit/cost ratio Payback (years) 9.09 years RFA AEA12-001 Application Cost Worksheet Page 3 7-1-11 r ti Al i J r Om N Ili CO C) rn r rnLQ rn O M O M v dN m LL L rL+ O O BYO = V LL C (' M O M � U c :c ca '� yLL CLO � (q I c C9 oo c C(o � CD � Eta Eta 69 H} Eta 613 Efl Eft Ef3 EA 69 Ef3 Eta 61) Eta bq EA ER M V c c LL LL WN v LL L � cl Cl M CO (M f� (.0 O O O O m M rn fl- LO Cn cl f- O Cl) O O M O) M M Cl) Cl) - M OD c) M Z — N 0) M Cl) ER Efi ER Eta EA Eta Ef3 69 Et3 Ef3 Eta Et3 EA EA Eta � CD +. c c6 M O M V y O Cl) r M M �:. N O N � Q E M O N O U N M m ` J a�i H o O co O a c H � •L 0 C O N Y a U co E w O L O @ O O (D L U '0 - .o N O a w: o �L y N C . 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AK 99508-3440 • Phone: (9071 729-3600 - Fax: (907) 729-4090 • www.anthc.ore August 24, 2011 Chief Carl Burgett Huslia Traditional Council PO Box 70 Huslia, AK 99746 Dear Chief Burgett: Re: Letter of Commitment for matching funds to a proposal for Alaska Energy Authority, Renewable Energy Funds Round V. It is with pleasure that the Alaska Native Tribal Health Consortium (ANTHC), Division of Environmental Health and Engineering (DEHE) is partnering with the Huslia Traditional Council, in your proposed project to the Renewable Energy Fund of the Alaska Energy Authority. Your biomass heating projects is one of exceptional importance to the future energy needs of your community and one that ANTHC DEHE fully supports. In support of your project, ANTHC DEHE will commit $ 18,924 as an in -kind match in the form of project management services. These matching funds will be tracked and reported, as required for purposes of quarterly reporting to the Alaska Energy Authority, in the event that they award you the project. We wish you every success on your proposal and look forward to working with you on this important project. Sincerely, N uffwp� Steven M. Weaver, P.E. Senior Director INTERIOR REGIONAL HOUSING AUTHORITY zr � 06 .M'L'16 r MOM August 24, 2011 Alaska Energy Authority 813 W., Northern Lights Blvd. Anchorage, AK 99503 Re: Letter of Support for Huslia Traditional Council Renewable Energy Fund Proposal Interior Regional Housing Authority supports the Huslia Traditional Council application for the Huslia Water System and Clinic Wood Boiler project. IRHA and the Alaska Native Tribal Health Consortium will team with the Tribe to design and construct the project. Both IRHA and ANTHC have extensive experience with construction projects in the region. We are pleased the Tribe has recognized and is pursuing reducing energy consumption as a strategy for the community. WE are all well aware that biomass has the potential to significantly decrease energy costs in our communities. This project will provide an opportunity to design, construct and monitor costs for a wood -fired boiler project. This information can be used on future projects across the region. Thank you for considering the Huslia Traditional Council's proposal. Please do not hesitate to contact me if you need further information. Sincerely, Irene Catalone Chief Executive Officer 828 27"' Avenue / Fairbanks, AK 99701 / 907-452-8315 / 800-478-IRHA (4742 ) 1 Fax: 907-456-8941 Preliminary Feasibility Assessment for High Efficiency, Low Emission Wood Heating In Huslia, Alaska Prepared for: Orville H. Huntington, Huslia Tribal Council and Carl Burgett, City of Huslia Huslia, Alaska Prepared by: Daniel Parrent, Wood Utilization Specialist Juneau Economic Development Council July 23, 2008 Notice This Preliminary Feasibility Assessment for High Efficiency, Low Emission Wood Heating was prepared by Daniel Parrent, Wood Utilization Specialist, Juneau Economic Development Council on behalf of Orville H. Huntington, Huslia Tribal Council and Carl Burgett, City of Huslia, Huslia, AK This report does not necessarily represent the views of the Juneau Economic Development Council (JEDC). JEDC, its Board, employees, contractors, and subcontractors make no warranty, express or implied, and assume no legal liability for the information in this report; nor does any party represent that the use of this information will not infringe upon privately owned rights. This report has not been approved or disapproved by JEDC nor has JEDC passed upon the accuracy or adequacy of the information in this report. Funding for this report was provided by USDA Forest Service, Alaska Region, Office of State and Private Forestry Table of Contents Abstract Section 1. Executive Summary 1.1 Goals and Objectives 1.2 Evaluation Criteria, Project Scale, Operating Standards, General Observations 1.3 Assessment Summary and Recommended Actions 1.3.1 "Downtown" cluster 1.3.2 Jimmy Huntington School 1.3.3 Water plant, washeteria and health clinic Section 2. Evaluation Criteria, Implementation, Wood Heating Systems 2.1 Evaluation Criteria 2.2 Successful Implementation 2.3 Classes of Wood Heating Systems Section 3. The Nature of Wood Fuels 3.1 Wood Fuel Forms and Current Utilization 3.2 Heating Value of Wood Section 4. Wood Fueled Heating Systems 4.1 Low Efficiency High Emission Cordwood Boilers 4.2 High Efficiency Low Emission Cordwood Boilers 4.3 Bulk Fuel Boiler Systems Section 5. Selecting the Appropriate System 5.1 Comparative Costs of Fuels 5.2(a) Cost per MMBtu Sensitivity — Cordwood 5.2(b) Cost per MMBtu Sensitivity — Bulk Fuels 5.3 Determining Demand 5.4 Summary of Current Conditions Section 6. Economic Feasibility of Cordwood Systems 6.1 Initial Investment Cost Estimates 6.2 Operating Parameters of HELE Cordwood Boilers 6.3 Hypothetical OM&R Cost Estimates 6.4 Calculation of Financial Metrics 6.5 Simple Payback Period for HELE Cordwood Boilers 6.6 Present Value, Net Present Value and Internal Rate of Return Values for HELE Cordwood Boilers Section 7. Economic Feasibility of Bulk Fuel Systems Section 8. Conclusions References and Resources 2 Appendices Appendix A Appendix B Appendix C Appendix D Appendix E Appendix F Appendix G Appendix H AWEDTG Evaluation Criteria Recoverable Heating Value Determination List of Abbreviations and Acronyms Wood Fuel Properties Financial Metrics Operational Parameters of HELE Cordwood Boilers Calculation of Present Value, Net Present Value and Internal Rate of Return Garn Boiler Specifications List of Tables and Figures Table 4-1 HELE Cordwood Boiler Suppliers Table 4-2 Emissions from Wood Heating Appliances Table 5-1 Comparative Cost of Fuel Oil vs. Wood Fuel Figure 5-1 Effect of White Spruce Cordwood (MC30) Cost on Cost of Delivered Heat Table 5-2 Reported Annual Fuel Oil Consumption, Huslia Facilities Table 5-3 Estimate of Heat Required in Coldest 24 Hr Period Table 5-4 Estimate of Total Wood Consumption, Comparative Costs and Potential Savings Table 6-1 Initial Investment Cost Scenarios for Hypothetical Cordwood Systems Table 6-2 Labor/Cost Estimates for HELE Cordwood Systems Table 6-3 Summary of Total Annual Non -fuel OM&R Cost Estimates Table 6-4 Simple Payback Period Analysis for HELE Cordwood Boilers Table 6-5 PV, NPV and IRR Values for HELE Cordwood Boilers 3 Key words: HELE, LEHE, bulk fuel, cordwood ABSTRACT The potential for heating various public buildings in Huslia with high efficiency, low emission (HELE) wood boilers is evaluated for the Huslia Tribal Council and City of Huslia. Early in 2008, organizations and local/tribal governments were invited to submit a Statement of Interest (SOI) in wood energy heating projects to the Alaska Wood Energy Development Task Group (AWEDTG). Task Group members reviewed all the SOIs and selected projects for further review based on the selection criteria presented in Appendix A. AWEDTG representatives met with the representatives of the Huslia Tribal Council and City of Huslia in Huslia in July 2008. Preliminary assessments were made and challenges identified. Potential wood energy systems were considered for each facility using AWEDTG, USDA and AEA objectives for energy efficiency and emissions. Preliminary recommendations are made for each facility. SECTION 1. EXECUTIVE SUMMARY 1.1 Goals and Objectives • Identify various public buildings as potential candidates for heating with wood • Evaluate the suitability of the facility(s) and site(s) for siting a wood -fired boiler • Assess the type(s) and availability of wood fuels • Size and estimate the capital costs of suitable wood -fired system(s) • Estimate the annual operation and maintenance costs of a wood -fired system • Estimate the potential economic benefits from installing a wood -fired heating system 1.2 Evaluation Criteria, Project Scale, Operating Parameters, General Observations • This project meets the AWEDTG objectives for petroleum fuel displacement, use of hazardous forest fuels or forest treatment residues, sustainability of the wood supply, project implementation, operation and maintenance, and community support • Wood -fired systems are not feasible for very small applications. These may be satisfied with domestic wood appliances, such as wood stoves or pellet stoves/furnaces • Individual facilities consuming less than 3,000 gallons per year represent minimal savings with wood -fired systems unless such systems can be enclosed in an existing structure, and wood and labor are very low cost or free • Marginal economic metrics (such as those associated with small installations) can be improved with low-cost buildings and piping systems • Medium and large energy consumers have the best potential for feasibly implementing a wood energy system and deserve detailed engineering analysis • Efficiency and emissions standards for Outdoor Wood Boilers (OWB) changed in 2006, which could increase costs for small systems 4 1.3 Assessment Summary and Recommended Actions Overview. Three separate building "clusters" were identified: 1. The "Downtown" cluster, consisting of 4 or 5 individual structures 2. The Jimmy Huntington School (Yukon -Koyukuk School District) 3. The water plant, washeteria and health clinic 1.3.1. "Downtown" Cluster • Overview. The "downtown' cluster consists of the Huslia city office building, Huslia Tribal Council office building, the Environmental Office, the Nutrition Center, and possibly, the Head Start facility 1.3.1.1. The Huslia city office building, is a small, frame structure, heated by a Weil -McLain Gold P-WTGO-4 boiler rated at 131,000 Btu per hour (net), in good condition. Reported annual fuel consumption amounts to approximately 1,500 gallons per year. 1.3.1.2. The Huslia Tribal Council office building, is a small, 3-sided log structure, heated by a Weil -McLain Gold P-WTGO-4 boiler rated at 131,000 Btu per hour (net), in good condition. Reported annual fuel consumption amounts to approximately 1,500 gallons per year. 1.3.13. The Environment Office, is a small, 3-sided log structure, heated by a Monitor space heater (size and condition unknown). Reported annual fuel consumption amounts to approximately 2,250 gallons per year. 1.3.1.4. The Nutrition Center, is a larger, 3-sided log structure, heated by a Weil - McLain Gold P-WGO-3 boiler rated at 100,000 Btu per hour (net), in fair condition (due for replacement). Heat is distributed by 7/8" copper fin tube pipe (2" x 2 1/4" x 60 fins per foot) in fairly good condition. Reported annual fuel consumption amounts to approximately 3,500 gallons per year. 1.3.1.5. The Head Start building, is a small, frame structure located between the Tribal Council office building and the City office building. The building was inaccesible at the time of our field visit, and the heating system specifications were unknown. Estimated annual fuel consumption amounts to approximately 1,000 gallons per year. Total fuel consumption = 9,750 • Potential Savings. At the current price of nearly $6.00 per gallon, the current cost of heating the "downtown cluster" amounts to $58,500 per year. The HELE cordwood fuel equivalent of 9,750 gallons of #1 fuel oil is approximately 114 cords, and at $350 per cord represents a potential annual fuel cost savings of $18,600 (debt service and non -fuel OM&R costs notwithstanding). • Required boiler capacity. The estimated required boiler capacity (RBC) to heat the entire "downtown cluster" is approximately 321,229 Btu/hr during the coldest 24-hour period. • Recommended action re arding a cordwood system. Given the initial assumptions and cost estimates for the alternatives presented in this report, this project appears to be marginally viable. Further consideration is probably warranted. (See Section 6) M • Recommended action re arding a bulk fuel wood system. Given the relatively small heating demand, lack of known fuel supplies, and the probable costs of such a project, a "bulk fuel" system is not cost-effective for the "downtown cluster". 1.3.2. Jimmy Huntington School • Overview. The Jimmy Huntington School is operated by the Yukon -Koyukuk School District, with main offices located in Fairbanks. The school consists of several separate buildings, including the main school building, administration building and elementary school classrooms, the Taylor Building (carpenter's shop), 6 teacher housing units, and at least 3 "outbuildings" (unheated). The main school building is heated by two Burnham V905A oil -fired boilers rated at 562 MBH (net, each) in reasonably good condition. Heat is distributed in the classrooms via box -style radiators and with air handlers in the gymnasium. Domestic hot water is provided by a BoilerMate unit. The administration building is heated by two Burnham V903A oil -fired boilers rated at 302 MBH (net, each), and the Taylor Building is heated by a single Burnham PV84WC-G5 boiler rated at 110 to 138 MBH (net). Each teacher housing unit has its own small boiler. • Fuel Consumption. The Jimmy Huntington School reportedly consumes about 17,000 gallons of #1 fuel oil per year, although consumption data by building was not provided. • Potential Savings. At the current price of about $6.00 per gallon, the cost of oil for the Jimmy Huntington School amounts to $102,000 per year. The HELE cordwood fuel equivalent of 17,000 gallons of # 1 fuel oil is approximately 199 cords, and at $350 per cord represents a potential annual fuel cost savings of $32,350 (debt service and non -fuel OM&R costs notwithstanding). • Required boiler capacity. The estimated required boiler capacity (RBC) to heat the Jimmy Huntington School (based on annual fuel consumption of 17,000 gpy) is approximately 559,629 Btu/hr during the coldest 24-hour period. • Recommended action regarding a cordwood system. Given the initial assumptions and cost estimates for the alternatives presented in this report, this project appears to be marginally viable. Further consideration is probably warranted. (See Section 6) • Recommended action regarding a bulk fuel wood system. Given the heating demand, lack of known fuel supplies, and the probable costs of such a project, a "bulk fuel" system is not cost-effective for the Jimmy Huntington School. 1.3.3. Water plant, washeteria and health clinic • Overview. The water plant, washeteria and health clinic are new facilities located near the old landing strip. The water plant and washeteria are co -located in one building, and the clinic is next door in its own building. The water plant/washeteria was still under construction at the time of our field visit, but they should be ready for use within a couple months. Space heat and process heat is provided by two new Burnham PV89WT-GBWF28 oil -fired boilers rated at 260 MBH (net, each). The new health clinic (open for business) is heated by a single Weil -McLain Gold P- WGO-5 oil -fired boiler rated at 152 MBH (net). Heat is distributed via hot water baseboard heaters and domestic hot water is provided by a BoilerMate unit. • Fuel Consumption. Water plant: Approximately 100 households are connected to the municipal water system and current usage can amount to 20,000 gallons per day, which the existing water plant struggles to meet. Well -water comes into the plant at approximately 35 degrees F, and is heated 12 to 14 degrees before distribution. Water quality is currently fair to poor, which limits consumption. Water quality from the new well at the new water plant is reported to be very high, and consumption is expected to increase, perhaps by as much as 100%. The current water plant uses approximately 12,000 gallons of fuel oil per year. Since the new plant is not yet online, fuel consumption is unknown. A figure of 20,000 gallons is being used for purposes of this report (assuming greater water consumption and improved efficiencies). Fuel consumption at the health clinic is reportedly 4,500 gallons per year • Potential Savings. It appears that the water plant and clinic could be served by a common wood -fired heating plant consisting of a number of large boilers. At the projected price of about $6.00 per gallon, it is projected to cost approximately $147,000 per year for fuel oil for the water plant and clinic. The HELE cordwood fuel equivalent of 24,500 gallons of #1 fuel oil is approximately 287 cords, and at $350 per cord represents a potential annual fuel cost savings of $46,550 (debt service and non -fuel OM&R costs notwithstanding). • Required boiler capacity. The estimated required boiler capacity (RBC) to heat the water plant, washeteria and health clinic during the coldest 24-hour period is undeterminable, since most of the fuel will be used to heat water. • Recommended action regarding a cordwood system. Given the initial assumptions and cost estimates for the alternatives presented in this report, this project appears to be cost- effective and operationally viable. Further consideration is warranted. (See Section 6) • Recommended action regarding a bulk fuel wood system. Given the heating demand, lack of known fuel supplies, and the probable costs of such a project, a "bulk fuel" system is not cost-effective for the water plant/washeteria and clinic. SECTION 2. EVALUATION CRITERIA, IMPLEMENTATION, WOOD HEATING SYSTEMS The approach being taken by the Alaska Wood Energy Development Task Group (AWEDTG) regarding biomass energy heating projects follows the recommendations of the Biomass Energy Resource Center (BERC), which advises that, "[The most cost-effective approach to studying the feasibility for a biomass energy project is to approach the study in stages." Further, BERC advises "not spending too much time, effort, or money on a full feasibility study before discovering whether the potential project makes basic economic sense" and suggests, "[gndertaking a pre feasibility study ... a basic assessment, not yet at the engineering level, to determine the project's apparent cost-effectiveness". [Biomass Energy Resource Center, Montpelier, VT. www.biomasscenter.org] 2.1 Evaluation Criteria The AWEDTG selected projects for evaluation based on the criteria listed in Appendix A. The Huslia projects meet the AWEDTG criteria for potential petroleum fuel displacement, use of forest 7 residues for public benefit, use of local residues (though limited), sustainability of the wood supply, project implementation, operation and maintenance, and community support. In the case of cordwood boiler applications, the wood supply from forest fuels and/or local processing residues appears adequate and matches the application. Currently, "bulk fuel" (chips, bark, sawdust, etc.) supplies are non-existent. 2.2 Successful Implementation In general, four aspects of project implementation have been important to wood energy projects in the past: 1) a project "champion", 2) clear identification of a sponsoring agency/entity, 3) dedica- tion of and commitment by facility personnel, and 4) a reliable and consistent supply of fuel. In situations where several organizations may be responsible for different community services, it must be clear which organization(s) would sponsor or implement a wood -burning project. (NOTE: This is not necessarily the case with the Huslia projects but the issue should be considered.) Boiler stoking and/or maintenance is required for approximately 5-15 minutes per boiler several times a day (depending on the heating demand) for manual wood -fueled systems, and dedicating personnel for the operation is critical to realizing savings from wood fuel use. For this report, it is assumed that new personnel would be hired or existing personnel would be assigned as necessary, and that "boiler duties" would be included in the responsibilities and/or job description of facilities personnel. 2.3 Classes of Wood Energy Systems There are, essentially, two classes of wood energy systems: manual cordwood systems and automated "bulk fuel" systems. Cordwood systems are generally appropriate for applications where the maximum heating demand ranges from 100,000 to 1,000,000 Btu per hour, although smaller and larger applications are possible. `Bulk fuel" systems are systems that burn wood chips, sawdust, bark/hog fuel, shavings, pellets, etc. They are generally applicable for situations where the heating demand exceeds 1 million Btu per hour, although local conditions, especially fuel availability, can exert strong influences on the feasibility of a bulk fuel system. Usually, an automated bulk fuel boiler is tied -in directly with the existing oil -fired system. With a cordwood system, hot water or glycol from the existing oil -fired boiler system would be circulated through a heat exchanger at the wood boiler ahead of the existing oil boiler. A bulk fuel system is usually designed to replace 100% of the fuel oil used in the oil -fired boiler, and although it is possible for a cordwood system to be similarly designed, they are usually intended as a supplement, albeit a large supplement, to an oil -fired system. In either case, the existing oil -fired system would remain in place and be available for peak demand or backup in the event of a failure or other downtime (scheduled or unscheduled) in the wood system. One of the objectives of the AWEDTG is to support projects that would use energy -efficient and clean burning wood heating systems, i.e., high efficiency, low emission (HELE) systems. SECTION 3. THE NATURE OF WOOD FUELS 3.1 Wood Fuel Forms and Current Utilization Wood fuels in western interior Alaska are most likely to be in the form of cordwood, derived from standing trees. For communities located along major rivers, such as Huslia, driftwood can be a significant source of wood. The forest industry infrastructure in the Huslia area is limited to very small, subsistence -scale sawmills. Local forest resources are owned by the Koyukuk National Wildlife Refuge, Huslia Village Council, and K'oyitl'ots'ina Limited. There is some (small, limited) tree mortality as a result of bark beetle activity, but the threat of wildfires is significant. For this report, it is assumed that wood supplies, in the form of cordwood, driftwood, and/or occasional mill residues, are sufficient to meet the heating needs of the facilities under consideration. Supply issues must be resolved at the local level prior to installing a wood fired heating system of any substantial size. 3.2 Heating Value of Wood Wood is a unique fuel whose heating value is quite variable, depending on species of wood, moisture content, and other factors. There are also several `heating values', namely high heating value (HHV), gross heating value (GHV), recoverable heating value (RHV), and deliverable heating value (DHV), that may be assigned to wood at various stages in the calculations. For this report, white spruce cordwood at 30 percent moisture content (MC30, calculated on the "wet" or "green" weight basis) is used as the benchmark. The HHV of white spruce at 0% moisture content (MCO) is 8,890 Btu/lb' and the GHV at 30% moisture content (MC30) is 6,223 Btu/lb The RHV for white spruce cordwood (MC30), given the variables in Appendix B, is calculated at 12.22 million Btu per cord, and the DHV, which is a function of boiler efficiency (assumed to be 75%), is 9.165 million Btu per cord. The delivered heating value of 1 cord of white spruce cordwood (MC30) equals the delivered heating value of 85.5 gallons of #1 fuel oil when the wood is burned at 75% conversion efficiency and the oil is burned at 80% efficiency. A more thorough discussion of the heating value of wood can be found in Appendix B and Appendix D. SECTION 4. WOOD -FUELED HEATING SYSTEMS 4.1 Low Efficiency High Emission (LEHE) Cordwood Boilers Most manual outdoor wood boilers (OWBs) that burn cordwood are relatively low-cost and can save fuel oil but have been criticized for low efficiency and smoky operation. These could be called low efficiency, high emission (LEHE) systems and there are dozens of manufacturers. In 2006, the State of New York instituted a moratorium on new LEHE OWB installations due to concerns over emissions and air quality'. Other states have also considered or implemented new regulations6°7,8,9 Since there are no standards for OWBs ("boilers" and "furnaces" were exempt from the 1988 EPA regulations10), OWB ratings are inconsistent and can be misleading. Prior to 2006, standard procedures for evaluating wood boilers did not exist, but test data from New York, Michigan and elsewhere showed a wide range of apparent [in]efficiencies and emissions among OWBs. In 2006, a committee was formed under the American Society for Testing and Materials (ASTM) to develop a standard test protocol for OWBs". The standards included uniform procedures for determining performance and emissions. Subsequently, the ASTM committee sponsored tests of three common outdoor wood boilers using the new procedures. The results showed efficiencies as low as 25% and emissions more than nine times the standard for other industrial boilers. Obviously, these results were deemed unsatisfactory and new OWB standards were called for. Z In a news release dated January 29, 200712, the U.S. Environmental Protection Agency announced a new voluntary partnership agreement with 10 major OWB manufacturers to make cleaner - burning appliances. The new phase -one standard calls for emissions not to exceed 0.60 pounds of particulate emissions per million Btu of heat input. The phase -two standard, which will follow 2 years after phase -one, will limit emissions to 0.30 pounds per million Btus of heat delivered, thereby creating an efficiency standard as well. To address local and state concerns over regulating OWB installations, the Northeast States for Coordinated Air Use Management (NeSCAUM), and EPA have developed model regulations that recommend OWB installation specifications, clean fuel standards and owner/operator training. (http://www.gpa.jzov/woodheaters/ and b=://www.nescaum.or2/topics/outdoor-hydronic-heaters) Implementation of the new standard will improve air quality and boiler efficiency but will also increase costs as manufacturers modify their designs, fabrication and marketing to adjust to the new standards. Some low -end models will no longer be available. 4.2 High Efficiency Low Emission (HELE) Cordwood Boilers In contrast to low efficiency, high emission cordwood boilers there are a few units that can be considered high efficiency, low emission (HELE). These systems are designed to burn cordwood fuel cleanly and efficiently. Table 4-1 lists three HELE boiler suppliers, all of which have units operating in Alaska. Greenwood and TarmUSA, Inc. have a number of residential units operating in Alaska, and a Garn boiler manufactured by Dectra Corporation is used in Dot Lake, AK to heat several homes and the washeteria, replacing 7,000 gallons per year (gpy) of fuel oil.14 Two Garn boilers were recently installed in Tanana, AK to provide heat to the washeteria and water plant, and two others were installed near Kasilof. Several more are being planned. Table 4-1. HELE Cordwood Boiler Suppliers Btu/hr ratings Supplier Tarm 100,000 to 198,000 Tarm USA www.tartnusa.com Greenwood 100,000 to 300,000 Greenwood www.GreenwoodFumace.com Garn 350,000 to 950,000 Dectra Corp. www.dectra.net/garn Note: Listing of any manufacturer, distributor or service provider does not constitute an endorsement. Table 4-2 shows the results for a Garn WHS 1350 boiler that was tested at 157,000 to 173,000 Btu/hr by the State of Michigan using the new ASTM testing procedures, compared with EPA standards for wood stoves and boilers. It is important to remember that wood fired boilers are not entirely smokeless; even very efficient wood boilers may smoke for a few minutes on startup 4,1s 10 Table 4-2. Emissions from Wood Heating Appliances Appliance Emissions ( ams/1,000 Btu delivered) EPA Certified Non Catalytic Stove 0.500 EPA Certified Catalytic Stove 0.250 EPA Industrial Boiler (many states) 0.225 GARN WHS 1350 Boiler* 0.179 Source: Intertek Testing Services, Michigan, March 2006. Note: *With dry oak cordwood; average efficiency of 75.4% based upon the high heating value (HHV) of wood 4.3 Bulk Fuel Boiler Systems The term "bulk fuel" as used in this report refers, generically, to sawdust, wood chips, shavings, bark, pellets, etc. Since the availability of bulk fuel is non-existent in Huslia, the cost of bulk fuel systems is so high (i.e., $1 million and up), and the relatively small heating demand for the projects under consideration, the discussion of bulk fuel boiler systems has been omitted from this report. SECTION 5. SELECTING THE APPROPRIATE SYSTEM Selecting the appropriate heating system is, primarily, a function of heating demand. It is generally not feasible to install automated bulk fuel systems in/at small facilities, and it is likely to be impractical to install cordwood boilers at very large facilities. Other than demand, system choice can be limited by fuel (form) availability, labor, financial resources, and limitations of the site. The selection of a wood -fueled heating system has an impact on fuel economy. Potential savings in fuel costs must be weighed against initial investment costs and ongoing operating, maintenance and repair (OM&R) costs. Wood system costs include the initial capital costs of purchasing and installing the equipment, non -capital costs (engineering, permitting, etc.), the cost of the fuel storage building and boiler building (if required), the financial burden associated with loan interest, the fuel cost, and the other costs associated with operating and maintaining the heating system, especially labor. 5.1 Comparative Costs of Fuels Table 5-1 compares the cost of #1 fuel oil to white spruce cordwood (MC30). In order to make reasonable comparisons, costs are calculated on a "per million Btu (MMBtu)" basis. Table 5-1. Comparative Cost of Fuel Oil vs. Wood Fuel FUEL RHVa (Btu) Conversion DHVa (Btu) Price per unit Cost per MMBtu Efficiency' ($ (delivered, ($ ) Fuel oil, #1, 107,200 5.50/gal 51.306 6.00 55.970 1 gallon 134000 , 80o�p per gallon 6.50 60.634 White spruce, 12.22 9.165 300/cord 32.733 350 38.189 1 cord, MC30 million 75 0 �0 million 400 43.644 Notes: a from Appendix D 11 5.2(a) Cost per MMBtu Sensitivity — Cordwood Figure 5-1 illustrates the relationship between the price of white spruce cordwood (MC30) and the cost of delivered heat, (the slanted line). For each $10 per cord increase in the price of cordwood, the cost per million Btu increases by about $1.09. The chart assumes that the cordwood boiler delivers 75% of the RHV energy in the cordwood to useful heat and that oil is converted to heat at 80% efficiency. The dashed lines represent #1 fuel oil at $5.50, $6.00 and $6.50 per gallon ($51.306, $55.97 and $60.624 per million Btu respectively). At high efficiency, heat from white spruce cordwood (MC30) at $512.96 per cord is equal to the cost of oil at $6.00 per gallon, before considering the cost of the equipment and operation, maintenance and repair (OM&R) costs. At 75% efficiency and $350 per cord, a high -efficiency cordwood boiler will deliver heat at about 32% less than the cost of #1 fuel oil at $6.00 per gallon ($38.189 versus $55.97 per MMBtu). Figure 5-1 indicates that, at a given efficiency, savings increase significantly with decreases in the delivered price of cordwood and/or with increases in the price of fuel oil. 70.000 Cost ($) per MMBtu as a Function of Cordwood Cost Cordwood cost, $ per cord Fuel Oil at $6.50 per gallon — — — — — — — — — — — Fuel Oil at $6.00 per gallon ....................................••• Fuel Oil at $5.50 per gallon — • — • — • — • — ..... . Figure 5-1. Effect of White Spruce Cordwood Price on Cost of Delivered Heat 5.2(b) Cost per MMBtu Sensitivity — Bulk Fuels Not included in this report 12 5.3 Determining Demand Table 5-2 shows the amount of fuel oil consumed by the various building clusters in Huslia. Table 5-2. Reported Annual Fuel Oil Consumption, Huslia Facilities Facility Reported Annual Fuel Consumption Gallons Cost ($) @ $6.00/gallon Downtown cluster 9,750 58,500 Jimmy Huntington School 17,000 102,000 Water plant, washeteria and health clinic 24,500 147,000 TOTAL 51,250 307,500 Wood boilers, especially cordwood boilers, are often sized to displace only a portion of the heating load since the oil system will remain in place, in standby mode, for "shoulder seasons" and peak demand. Fuel oil consumption for the Huslia building clusters was compared with heating demand based on heating degree days (HDD) to determine the required boiler capacity (RBC) for heating only on the coldest 24 hour day (Table 5-3). While there are many factors to consider when sizing heating systems it is clear that, in most cases, a wood system of less -than -maximum size could still replace a substantial quantity of fuel oil. Typically, installed oil -fired heating capacity at most sites is two to four times the demand for the coldest day. This appears to be true for the Jimmy Huntington School, even without including the installed heating capacity in the teacher housing units, which would push the multiple even higher. That multiple cannot be determined for the Downtown cluster, given that the heating capacity of the appliances in the Environmental Office and Head Start building are unknown. But for those buildings whose boiler heating capacities are known (City office building, Tribal Council office building and Nutrition Center), it appears that the multiple is less than 2. The multiplier is also less than 2 at the Health Clinic, based on reported consumption of 4,500 gpy. And lastly, for the water plant and washeteria, required boiler capacity for heating cannot be determined because, 1) most of the fuel will be used to heat water for domestic consumption, and 2) there are no fuel consumption records, as the plant is not yet operational. Manual HELE cordwood boilers, equipped with special tanks for extra thermal storage, can supply heat at higher than their rated capacity for short periods. For example, while rated at 425,000 Btu/hr (heat input) each, a pair of Garn VMS 2000 boilers can store more than 2'/z million Btu, which would be enough to heat the Downtown cluster during the coldest 24-hour period for nearly 8 hours (2,544,000 - 321,229). 13 Table 5-3. Estimate of Heat Required in Coldest 24 Hr Period Facility Fuel Oil Used Heating Btu/DDC Design RBCe Installed (net) gal/year' Degree Days TempdF Btu/hr Btu/hra Downtown cluster City Office bldg. 1,500 10,762 49,947 131,000 Tribal Council bldg. 1,500 10,762 49,947 131,000 Nutrition Center 3,500 25,110 115,712 100,000 Environmental Ofc. 2,250 16,142 74,609 unknown Head Start 1,000 7,174 33,505 unknown Total 9,750 14,942 69,950 -45 321,229 362,000+unknown School Admin & grade school (Bettles) 604,000 Main school bldg 17,000 121,965 559,629 1,124,000 Taylor Bldg (shop) 138,000 Teacher housing unknown Total 1,866,000+unknown Water plant/washeteria 20,000 unknown unknown 520,000 Health Clinic 4,500 32,285 148,595 152,000 Total 24,500 unknown unknown 672,000 Table 3-7 Notes: a From SOI and site visit; net Btu/hr b NOAA, July 1, 2005 through June 30, 2006: ftp://ftpcvc.n_c_eo.nose.eov/htdocs/oroducts/analvsis monitorine/cdus/deeree days/archives/Heatine%20dearee%20Days/Monthly%2OCity/2006/iun%202006t 1 e Btu/DD= Btu/year x oil furnace conversion efficiency (0.85) /Degree Days d Alaska Housing Manual, 4th Edition Appendix D: Climate Data for Alaska Cities, Research and Rural Development Division, Alaska Housing Finance Corporation, 4300 Boniface Parkway, Anchorage, AK 99504, January 2000. e RBC = Required Boiler Capacity for the coldest Day, Btu/hr-- [Btu/DD x (65 F-Design Temp)+DD]/24 hrs 14 .r bA � O O O Vl O V1 O O y p � " 00 M cv k Vi r U Q � N a o� o0 os 0 $ 000 �+ < N O U.: o c o 0 0 p In y U O O O C � N O yM 0000 00 CQ i. CL `a N a U e r� o rn ri M O O o o o o 3 p d voi O ram to c 0 in ou !1 ON N y o 0 o kn > h C� �W yo cli o � bA U � .L•' v� Ll ww 3 a o F CIS� SECTION 6. ECONOMIC FEASIBILITY OF CORDWOOD SYSTEMS 6.1 Initial Investment Cost Estimates DISCLAIMER: Short of having an actual Design & Engineering Report prepared by a team of architects and/or engineers, actual costs for any particular system at any particular site cannot be positively determined. Such a report is beyond the scope of this preliminary assessment. However, several hypothetical systems are offered as a means of comparison. Actual costs, assumptions and "guess-timates " are identified as such, where appropriate. Recalculations of financial metrics, given different/updated cost estimates, are readily accomplished. Wood heating systems include the cost of the fuel storage building (if necessary), boiler building (if necessary), boiler equipment (and shipping), plumbing and electrical connections (including plumbing, heat exchangers and electrical service to integrate with existing distribution systems), installation, and an allowance for contingencies. Before a true economic analysis can be performed, all of the costs (investment and OM&R) must be identified, and this is where the services of qualified experts are necessary. Table 6-1 (next page) presents hypothetical scenarios of initial investment costs for four cordwood boiler heating installations in medium and large heating demand situations. Building(s) and plumbing/connections are the most significant costs besides the boiler(s). Building costs deserve more site -specific investigation and often need to be minimized to the extent possible. Piping from the wood -fired boiler is another area of potential cost saving. Long plumbing runs and additional heat exchangers substantially increase project costs. The high cost of hard copper and/or iron pipe normally used in Alaska now precludes its use in nearly all applications. If plastic or PEX® piping is used significant cost savings may be possible. Allowances for indirect non -capital costs such as engineering and contingency are most important for large systems that involve extensive permitting and budget approval by public agencies. This can increase the cost of a project by 25% to 50%. For the examples in Table 6-1, a 25% contingency allowance was used. NOTES: a. With the exception of the list prices for Garn boilers, all of the figures in Table 6-1 are gross estimates. b. The cost estimates presented in Table 6-1 do not include the cost(s) of any upgrades or improvements to the existing heating/heat distribution system currently in place. Table 6-1. Initial Investment Cost Scenarios for Hypothetical Cordwood Systems Huslia Building Clusters Downtown Cluster Jimmy Huntington Water Plant/Washeteria School and Health Clinic Fuel oil consumption (gallons per year) 9,750 17,000 24,500 Required boiler capacity (RBC), Btu/hr 321,229 559,629 Undetermined Cordwood boiler Model (2) Garn WHS 2000 (1) Garn WHS 3200 (2) Garn WHS 3200 (2) Garn WHS 3200 Rating - Btu/hr 850,000 combined 950,000 1,900,000 combined 1,900,000 combined Btu stored 2,544,000 combined 2,064,000 4,128,000 combined 4,128,000 combined Building and Equipment (B&E) Costs (for discussion purposes only), $ Fuel storage buildings 45,600 79,600 114,800 (fabric bldg, gravel pad, $20 per sf) (114 cords, 2,280 sf.) (199 cords, 3,980 sf.) (287 cords, 5,740 sf.) Boiler building @ $150 per sf 38,400 60,000 60,000 (minimum footprint, w/concrete pad)b (16' x 16) (20' x 20) (20' x 20 ) Boilers Base price' 29,800 32,900 65,800 65,800 Shippingd 5,000 5,000 7,500 7,500 Bush delivery' 5,000 5,000 7,500 7,500 Plumbing/connections' 20,000 40,000 40,000 Installation' 15,000 25,000 25,000 Subtotal - B&E Costs 158,800 161,900 285,400 320,600 Contingency (25%)' 39,700 40,475 71,350 80,150 Grand Total 198,500 202,375 356,750 400,750 Notes: a A cord occupies 128 cubic feet. If the wood is stacked 6Y: feet high, the area required to store the wood is 20 square feet per cord. b Does not allow for any fuel storage within the boiler building c List price, Dectra Corp, May 2006 d To Anchorage or Fairbanks; e guess-timate"; for illustrative purposes only 6.2 Operating Parameters of HELE Cordwood Boilers A detailed discussion of the operating parameters of HELE cordwood boilers can be found in Appendix F. 6.3 Hypothetical OM&R Cost Estimates The primary operating cost of a cordwood boiler, other than the cost of fuel, is labor. Labor is required to move fuel from its storage area to the boiler building, fire the boiler, clean the boiler 17 and dispose of ash. For purposes of this analysis, it is assumed that the boiler will operate every day for 210 days (30 weeks) per year between mid -September and mid -April. Table 6-2 presents labor/cost estimates for various HELE cordwood systems. A detailed analysis of labor requirement estimates can be found in Appendix F. Table 6-2. Labor/Cost Estimates for HELE Cordwood Systems Downtown cluster Jimmy Huntington Water Plant/Washeteria (114 cds/yr) School and Health Clinic (199 cds/yr) (287 cds/ r) System (Garn Model) (2) WHS 2000 (1) WHS 3200 (2) WHS 3200 (2) WHS 3200 (combined capacity) (combined capacity) Total Daily labor (hrs/yr)a (hrs/day X 210 days/yr) 155.76 114.00 222.36 320.69 Total Periodic labor (hrs/yr)b 114.00 114.00 199 287 (hrs/wk X 30 wks/yr) Total Annual labor (hrs/yr)b 40 20 40 40 Total labor (hrs/yr) 309.76 248.00 461.36 647.69 Total annual labor cost ($/yr) 6,195.20 4,960.00 9,227.20 12,953.80 (total hrs x $20) Notes: a From Table F-2 b From Appendix F There is also an electrical cost component to the boiler operation. An electric fan creates the induced draft that contributes to boiler efficiency. The cost of operating circulation pumps and/or blowers would be about the same as it would be with the oil -fired boiler or furnaces in the existing heating system. Lastly there is the cost of maintenance and repair items, such as fire brick, door gaskets, water treatment chemicals, etc. For the following examples, a value of $1,000 per boiler is used. Table 6-3. Summary of Total Annual Non -Fuel OM&R Cost Estimates Cost/Allowance ($) Downtown cluster Jimmy Huntington Water Plant/Washeteria (114 cds/yr) School and Health Clinic (199 cds/ r) (287 cds/ r) (2) WHS 2000 (1) WHS 3200 (2) WHS 3200 (2) WHS 3200 (combined capacity) (combined capacity) Labor a 6,195.20 4,960.00 9,227.20 12,953.80 Electricity 2,536.62 812.87 1,419.06 1 2,046.30 Maintenance/Repairs 2,000.00 1,000.00 2,000.00 2,000.00 Total non -fuel OM&R ($) 10,731.82 6,772.87 12,646.80 17,000.10 Notes: a From Table 6-2 b Electrical cost based on a formula of horsepower x kWh rate x operating time. Assumed kWh rate = $0.80 18 6.4 Calculation of Financial Metrics Biomass heating projects are viable when, over the long run, the annual fuel cost savings generated by converting to biomass are greater than the cost of the new biomass boiler system plus the additional operation, maintenance and repair (OM&R) costs associated with a biomass boiler (compared to those of a fossil fuel boiler or furnace). Converting from an existing boiler to a wood biomass boiler (or retrofitting/integrating a biomass boiler with an existing boiler system) requires a greater initial investment and higher annual OM&R costs than for an equivalent oil or gas system alone. However, in a viable project, the savings in fuel costs (wood vs. fossil fuel) will pay for the initial investment and cover the additional OM&R costs in a relatively short period of time. After the initial investment is paid off, the project continues to save money (avoided fuel cost) for the life of the boiler. Since inflation rates for fossil fuels are typically higher than inflation rates for wood fuel, increasing inflation rates result in greater fuel savings and thus greater project viability." The potential financial viability of a given project depends not only on the relative costs and cost savings, but also on the financial objectives and expectations of the facility owner. For this reason, the impact of selected factors on potential project viability is presented using the following metrics: Simple Payback Period Present Value (PV) Net Present Value (NPV) Internal Rate of Return (IRR) Total initial investment costs include all of the capital and non -capital costs required to design, purchase, construct and install a biomass boiler system in an existing facility with an existing furnace or boiler system. A more detailed discussion of Simple Payback Period, Present Value, Net Present Value and Internal Rate of Return can be found in Appendix E. 6.5 Simple Payback Period for HELE Cordwood Boilers Table 6-4 presents a Simple Payback Period analysis for hypothetical HELE cordwood boiler installations. Table 6-4. Simple Payback Period Analysis for HELE Cordwood Boilers (2) WHS 2000 (1) WHS 3200 (2) WHS 3200 (2) WHS 3200 (combined capacity) (combined capacity) Fuel oil cost ($ per year @ $6.00 per gal.) 58,500 102,000 147,000 Cordwood cost $ per year $350 per cord 39,900 69,650 100,450 Annual fuel cost savings ($) 18,600 32,350 46,550 Total Investment Costs ($)b 198,500 202,375 356,750 400,750 Simple Payback` (yrs) 10.67 10.88 11.03 8.61 Notes: a From Table 6-3 b From Table 6-1 c Total investment costs divided by annual fuel cost savin s 19 6.6 Present Value (PV), Net Present Value (NPV) and Internal Rate or Return (IRR) Values for HELE Cordwood Boilers Table 6-5 presents PV, NPV and IRR values for hypothetical small and large HELE cordwood boilers. Table 6-5. PV, NPV and IRR Values for HELE Cordwood Boilers (2) WHS 2000 (1) WHS 3200 (2) WHS 3200 (combined capacity) (2) WHS 3200 (combined capacity) Discount Rate 3% Time, "t", (years) 20 Initial Investment ($)b 198,500 202,375 356,700 400,750 Annual Cash Flow ($)c 7,868 11,827 19,703 29,550 Present Value (of expected cash flows, $ at "t" years) 117,056 175,956 293,131 439,629 Net Present Value ($ at "t" years) -81,444 -26,419 -63,569 38,879 Internal Rate of Return (%at,,t,, -2 12 1.53 0.97 4.02 ears) See Note #_ below 1 2 3 4 Notes: a real discount (excluding general price inflation) as set forth by US Department of Energy, as found in NIST publication NISTIR 85-3273-22, Energy Price Indices and Discount Factors for Life Cycle Cost Analysis — April 2008 b From Table 6-1 c Equals annual cost of fuel oil minus annual cost of wood minus annual non -fuel OM&R costs (i.e. Net Annual Savings) Note #1. With areal discount rate of 3.00% and after a span of 20 years, the projected cash flows are worth $117,056 today (PV), which is less than the initial investment of $198,500. The resulting NPV of the project is-$81,444, which means that the project, given the stated assumptions and cost estimates, will not achieve the stated return [i.e., 31/o] at the end of 20 years. Given the assumptions and cost estimates for this example, this alternative does not appear to be cost-effective. However, the initial investment cost estimates and/or OM&R cost estimates could be too high, and/or annual fuel cost savings too low. Furthermore, annual cash flows will increase if oil prices continue to increase above the general rate of inflation and/or disproportionately to the cost of wood fuel. Note 42. With a real discount rate of 3.00% and after a span of 20 years, the projected cash flows are worth $175,956 today (PV), which is less than the initial investment of $202,375. The resulting NPV of the project is-$26,419, which means that the project, given the stated assumptions and cost estimates, will not achieve the stated return [i.e., 3%] at the end of 20 years. Given the assumptions and cost estimates for this example, this alternative appears to be marginally cost- effective; the internal rate of return is positive. However, the initial investment cost estimates and/or OM&R cost estimates could be too high, and/or annual fuel cost savings too low. Furthermore, annual cash flows will increase if oil prices continue to increase above the general rate of inflation and/or disproportionately to the cost of wood fuel. Note #3. With a real discount rate of 3.00% and after a span of 20 years, the projected cash flows are worth $293,131 today (PV), which is less than the initial investment of $356,700. The resulting NPV of the project is-$63,569, which means that the project, given the stated assumptions and cost estimates, will not achieve the stated return [i.e., 3%] at the end of 20 years. Given the assumptions and cost estimates for this example, this alternative appears to be somewhat marginally cost-effective; the internal rate of return is positive, though barely. However, the initial investment cost 20 estimates and/or OM&R cost estimates could be too high, and/or annual fuel cost savings too low. Furthermore, annual cash flows will increase if oil prices continue to increase above the general rate of inflation and/or disproportionately to the cost of wood fuel. Note #4. With a real discount rate of 3.00% and after a span of 20 years, the projected cash flows are worth $439,629 today (PV), which is greater than the initial investment of $400,750. The resulting NPV of the project is $38,879, and the project achieves an internal rate of return of 4.02% at the end of 20 years. Based on the assumed inputs, these numbers are reasonably positive and would indicate that this project is cost-effective. SECTION 7. ECONOMIC FEASIBILITY OF BULK FUEL SYSTEMS The discussion of bulk fuel systems is not included in this report SECTION 8. CONCLUSIONS This report discusses potential wood -fired heating projects in Huslia in western interior Alaska, and attempts to demonstrate, by use of realistic, though hypothetical, examples, the feasibility of installing high efficiency, low emission cordwood boilers in various medium and large applications. Wood is a viable heating fuel in a wide range of institutional applications, however, below a certain minimum and above a certain maximum, it may be impractical to heat with wood, or it may require a different form of wood fuel and heating system. Huslia Clusters Three building "clusters" were identified as potential heating projects in Huslia. The "Downtown" cluster consists of the Huslia city office building, Huslia Tribal Council office building, the Environmental Office, the Nutrition Center, and possibly, the Head Start facility. Cluster 2 consists of the Jimmy Huntington School complex, and cluster 3 consists of the water treatment plant, washeteria and health clinic. Each of these clusters is analyzed in this report. The individual fuel oil consumption for each of these buildings is reasonably well known (with the exception of the new water plant), and taken all together, these buildings consume an estimated 51,250 gallons of fuel oil per year. Each of the clusters could be served by its own boiler system consisting of one or two cordwood boilers of various sizes. The heat distribution systems within all the buildings appear to be in reasonably good condition, so costs of modifying them should be minimal. In the hypothetical examples presented in Section 6, the gross annual fuel cost savings ranged from $18,600 for the smallest cluster to $46,550 for the largest cluster. Downtown cluster. Two boiler configurations were considered for the Downtown cluster. With a pair of medium boilers (Garn WHS 2000) being fired approximately 6 times per day, the simple payback period would be 10.67 years (given a cordwood boiler installation costing an estimated $198,500). The present value, net present value and internal rate of return after 20 years, assuming a real discount rate of 3%, would be $117,056,-$81,444 and -2.12% respectively. With a single large boiler (Garn WHS 3200) being fired approximately 4 times per day, the simple payback period would be 10.88 years (given a cordwood boiler installation costing an estimated $202,375). However, due to lower estimated OM&R costs, the other financial metrics were more 21 positive. The present value, net present value and internal rate of return after 20 years, assuming a real discount rate of 3%, would be $175,956,-$26,419 and 1.53% respectively. Jimmy Huntington School. With a pair of large boilers (Garn WHS 3200) being fired an average of 3.3 times per day, the simple payback period would be 11.03 years (given a cordwood boiler installation costing an estimated $356,750). The present value, net present value and internal rate of return after 20 years, assuming a discount rate of 3%, are $293,131,-$63,569 and 0.97% respectively. Water plant, washeteria and health clinic. With a pair of large boilers (Garn WHS 3200) being fired an average of 4.8 times per day, the simple payback period would be 8.61 years (given a cordwood boiler installation costing an estimated $400,750). The present value, net present value and internal rate of return after 20 years, assuming a discount rate of 3%, are $439,629, $38,879 and 4.02% respectively. Closer scrutiny of these projects by qualified professionals would be justified. Observations regarding relative fuel costs The difference in the cost of heat derived from wood versus the cost of heat derived fuel oil can be significant. It is this difference in the cost of heat that must "pay" for the substantially higher investment and OM&R costs associated with wood -fuel systems. However, the situation in Huslia is somewhat problematic, given the projected cost of wood fuel ($350 per cord) versus the expected cost of fuel oil ($6.00 per gallon). Or, put in another way, $38 per MMBtu (for wood) versus $56 per MMBtu (for oil). In most places, the cost of wood (on a Btu basis) is roughly half that of oil. That would mean about $257 per cord given oil at $6 per gallon. But even at $300 per cord, the financial picture of the proposed projects would improve significantly. The least cost-effective alternative (i.e., (2) WHS 2000 boilers at the Downtown cluster), would become strongly cost-effective with an estimated simple payback of 8.17 years, given wood at $300 per cord. The present value, net present value and internal rate of return after 20 years, assuming a discount rate of 3%, would be $201,858, $3,358 and 3.18% respectively. I am not suggesting that $350 per cord is not a fair price, given current harvesting practices and production methods. However, it may be possible to reduce that price if wood can be processed faster and/or more efficiently. With a demand of 600 cords per year (if all three clusters were converted to wood), a firewood producer could probably justify the purchase of a commercial firewood processor and keep costs in check. ON Grant Documents Authorized Signers Please clearly print or type all sections of this form. . ...... . ..... Community/Grantee Name: Huslia Village th Regular Election is held: October 4 , 2011 Date: August 24, 2011 .... . . - - ---- Authorized Grant Sioner(s): Printed Name Title . . ... . ...... .. . Term ..........._........- Signature Speedy Sam . ........ Second Chief .. 10/13 . . . ......... Darrell Vent Sr. Council Member 10/11 1 Jossjin _Olin Council Member 10/12 w. . ............. S. Joyce Sam_ Council Member 10/13 1 I authorize the above person(s) to sign Grant Documents: (Highest ranking organization/community/municipal official) Printed Name Title Term .... . .. . ..... . Signature Eileen R. Jackson Tribal Administrator Grantee Contact Information: Mailing Address: PO Box 70 ........... Phone Number: 907 829-2294 Fax Number: 907 829-2214 E-mail Address: Huslia tribe08@hotm"ail.com Fiscal Year End: September 30 I Entity _Type ff2tpEqf!t or non-profit status): Federally recognized tribe, non-profit I Federal Tax ID #: 91-1776426 Please submit an updated form whenever there is a change to the above information. ... . .. . ................ Please return the original completed form to: Alaska Energy Authority 813 W. Northern Lights Blvd. Anchorage, AK 99503 Attn: Butch White, Grants Administrator C:\Users\Eiieen.Jackson\Documents\Grant0ocumentsAuthorizedSigners5.doc Resolution 11-19 Resolution Authorizing Huslia Tribal Council to seek and apply for Alaska Energy Authority Renewable Energy funding, round 5 WHEREAS, it is the Huslia Tribal Council is the Tribal Government for Huslia, Alaska, an Alaska Native village, and WHEREAS, high energy costs in Huslia are leading to higher costs of service delivery, and WHEREAS, Huslia Tribal Council is seeking a lower cost renewable energy source is an important strategy to maintain a sustainable community, and WHEREAS, in 2008 a Preliminary Feasibility Assessment for High Efficiency, Low Emission Wood Heating in Huslia, Alaska was conducted, and WHEREAS, the assessment evaluated three building clusters in the community for biomass potential and indicated the water plant & health clinic cluster appears to be cost effective and operationally viable, and WHEREAS, biomass has been identified by the Alaska Energy Authority as a viable strategy to reduce energy consumption and energy cost in Interior villages, and Be it Therefore Resolved that the Huslia Tribal Council authorizes that Speedy Sam, 2nd chief, as the signatory of the applications and designates Eileen R. Jackson, TA with the authority to commit Huslia Tribal council to the obligations under the grant, Be it also Resolved that Eileen R. Jackson, TA will act as point of contact for the Huslia Tribal Council for purpose of this grant; Be it Further Resolved that the Huslia Tribal Council certifies that the council is in compliance with applicable federal, state, and local laws including existing credit and tax obligations, Be it further resolved that the Huslia Tribal Council will partner with Interior Regional Housing Authority and Alaska Native Tribal Health Consortium for the purpose of the Huslia Wood boiler project. CERTIFICATION: This resolution was duly considered and adopted at a meeting of the Huslia Tribal Council in Huslia on August 25, 2011 at which a quorum of Council members were in attendance. For Against _ r SpcQf Sam, Secdnd Chief ©bstain - Eileen R. Jackson f:P'ribal Administrator