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HomeMy WebLinkAboutPort Heiden Wind Grant Application4-2 Renewable Energy Fund Round IV Grant Application AEA 11-005 Application Page 1 of 18 7/21/2010 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.akenergyauthority.org/RE_Fund-IV.html Grant Application Form GrantApp4.doc Application form in MS Word that includes an outline of 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 Worksheet Costworksheet4.doc Summary of Cost information that should be addressed by applicants in preparing their application. Grant Budget Form GrantBudget4.doc A detailed grant budget that includes a breakdown of costs by milestone and a summary of funds available and requested to complete the work for which funds are being requested. Grant Budget Form Instructions GrantBudgetInstructions4.pdf Instructions for completing the above grant budget form.  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. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 2 of 18 7/21/2010 SECTION 1 – APPLICANT INFORMATION Name (Name of utility, IPP, or government entity submitting proposal) The Lake and Peninsula Borough Type of Entity: Borough Mailing Address PO Box 495 King Salmon, AK 99613 Physical Address 101 Jensen Drive King Salmon, AK 99613 Telephone 907-246-3421 Fax 907-246-6602 Email jordankeeler@lakeandpen.com 1.1 APPLICANT POINT OF CONTACT / GRANTS MANAGER Name Jordan Keeler Lamar Cotten Title Grant Manager Program Manager Mailing Address PO Box 495 King Salmon, AK 99613 Telephone 907-246-3421 Fax 907-246-6602 Email jordankeeler@lakeandpen.com 1.2 APPLICANT MINIMUM REQUIREMENTS Please check as appropriate. If you do not to meet the minimum applicant requirements, your application will be rejected. 1.2.1 As an Applicant, we are: (put an X in the appropriate box) 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 X A local government, or A governmental entity (which includes tribal councils and housing authorities); Yes 1.2.2. Attached to this application is formal approval and endorsement for its project by its board of directors, executive management, or other governing authority. If the applicant is a collaborative grouping, a formal approval from each participant’s governing authority is necessary. (Indicate Yes or No in the box ) Yes 1.2.3. As an applicant, we have administrative and financial management systems and follow procurement standards that comply with the standards set forth in the grant agreement. Yes 1.2.4. If awarded the grant, we can comply with all terms and conditions of the attached grant form. (Any exceptions should be clearly noted and submitted with the application.) Yes 1.2.5 We intend to own and operate any project that may be constructed with grant funds for the benefit of the general public. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 3 of 18 7/21/2010 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. Port Heiden Wind Turbine 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. The City of Port Heiden, Alaska 2.3 PROJECT TYPE Put X in boxes as appropriate 2.3.1 Renewable Resource Type x Wind Biomass or Biofuels Hydro, including run of river Transmission of Renewable Energy Geothermal, including Heat Pumps Small Natural Gas Heat Recovery from existing sources Hydrokinetic Solar Storage of Renewable Other (Describe) 2.3.2 Proposed Grant Funded Phase(s) for this Request (Check all that apply) 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 Lake and Peninsula Borough, along with the City of Port Heiden, proposed to install a single commercial-grade wind tower in Port Heiden to reduce the amount of fuel burned and to lower electricity rates for customers. Prompted by the success of small-scale wind towers and recommendations laid out in the 2008 Lake and Peninsula Borough Regional Energy Plan, the Borough commissioned a private firm, Knight-Piesold, to analyze Port Heiden. The results of this wind study indicated a favorable cost/benefit ratio and the Borough plans to move forward with the project. Drawing on the unique methods used by the Borough in a successful wind tower installation in the Village of Kokhanok, the Borough proposes a four-step process to reach the end goal of a successful installation of a wind tower. The first step will be the Borough selecting an owner’s representative to provide engineering and technical support. The second step will be the Borough, Port Heiden, and the owner’s representative to create an RFP for the actual wind tower construction and maintenance, and evaluate the bids on the RFP. The third and forth stages are construction of the wind turbine and systems upgrade, followed by a five- year maintenance and operation contract with the winning bidder that incorporates training for Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 4 of 18 7/21/2010 local employees. This will be discussed in further detail later in the application. 2.5 PROJECT BENEFIT Briefly discuss the financial and public benefits that will result from this project, (such as reduced fuel costs, lower energy costs, etc.) The goal of this project is to complete the four steps necessary for a successful project that will reduce the amount fuel burned by the utility and to lower the cost of electricity by 25%, or nearly $.32 kWh (based on current energy trends), and create a local workforce capable of any repairs and maintenance. The savings figures are taken from The Lake and Peninsula Borough Port Heiden Wind Power Feasibility Study Final Report (copy attached to application)and are based on current fuel prices; any increase in fuel prices will result in greater savings. Performance measures for this project will be measured by the actual fuel and cost savings once the project comes online. 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 following proposed budget is taken from the The Lake and Peninsula Borough Port Heiden Wind Power Feasibility Study Final Report on table 5 on page 23, assuming that an Enercon- E- 33 model is the final choice. It is important to note that while the study used an Enercon E-33 and other industry standard wind turbines for study and evaluation purposes, any decision on which model to choose will ultimately be based on the proposals and discussions with the owner’s representative. Turbine+Tower $593,750 Shipment (turbine+other components) 192,000 Transformer 40,000 Supervisory controller 100,000 Secondary controller 40,000 Boiler and misc 25,000 Power line$300k/mi 75,000 Geotechnical investigation & report 87,800 Engineering/Permitting/Construction/Erection 532,730 SUBTOTAL $1,686,280 w/ contingency 20 percent $2,023,536 5-year maintenance and operation contract $40,000 Owner’s Representative $60,000 _________________________________________________ Total $2,123,536 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. $ 1,700,000 Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 5 of 18 7/21/2010 2.7.2 Other Funds to be provided (Project match) $ 448,536 2.7.3 Total Grant Costs (sum of 2.7.1 and 2.7.2) $ 2,123,536 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 including estimates through construction) $2,123,536 2.7.5 Estimated Direct Financial Benefit (Savings) $ 1,020,000 (details provided below) 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.) $ 0 Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 6 of 18 7/21/2010 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 Lake and Peninsula Borough will manage this grant. As part of this grant, the Borough will issue an RFP for a manager’s representative. The manager’s representative will be selected on a basis of the applicant’s experience in working with alternative energy projects in remote communities. The manager’s representative will continue to work with the Borough for the lifespan of the project. 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.) Notice of Award Day 1 Issue RFP for Manager’s Representative Day 30 Selection of Manger’s Representative Day 60 Issue of RFP for Project Contractor Day 90 Selection of Project Contractor Day 120 Contract Signed with Project Contract Day 145 Data Review and Geotechnical Work Completed Day 190 Foundation and Systems Design Completed Day 240 Environmental Permits Obtained Day 280 Fabrication and Shipping Day 300 Construction Completed Day 360 Commissioning of Tower Day 420 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.) - Step One: The first step of the project is to select an owner’s representative. The owner’s representative is an engineering firm with expertise and experience in the alternative energy field, and they will work with the Borough and the City of Port Heiden to analyze the results of the wind study and to help the Borough craft a Request for Proposals (RFP) for the design and building of the wind tower. This step should take 90 days to complete after the Borough and AEA finalize the grant agreement, which will be considered Day 1. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 7 of 18 7/21/2010 - Step Two: During the RFP stage of the project, the owner’s representative will continue to work with the Borough and Port Heiden to review the RFPs that have been submitted for consideration. The Borough, Port Heiden, and the owner’s representative will jointly review the RFPs for completeness, technical merit, understanding of goals, and experience in engineering and building systems in rural Alaska. The Borough Assembly will select a proposal based on the recommendations by all three parties. This step will shall be completed within 145 days of the start of the project - Step Three: This step will consist of permitting for project, engineering the wind tower system, and the installation of the wind tower and any necessary upgrades to the existing power infrastructure in Port Heiden. The winning bidder will have experience in all three parts of Step Three. Local hires will be used as much as possible to benefit the community as well as to lower the costs of the project, a model that successfully resulted in savings in the installation of the Kokhanok wind tower. Power plant employees in Port Heiden will be starting their training on repair and maintenance at this stage of the project. This step of the project will be completed no later than 420 days after the start of the project. - Step Four: The project will consists of a 5-year maintenance and operation (M&O) with the winning bidder. The firm must guarantee their work and continue to train Port Heiden utility workers to be able to handle routine maintenance and repair of the system. The Borough believes that it is not enough for a firm to merely install the wind tower but they must continue to support their product and local workers to avoid any pitfalls in the future. This last step will consist of 5 years, but the Borough will finalize the grant paperwork and the close-out documents no later than 450 days from the start of the project. 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. Known personnel that will work on this project include Lamar Cotten, Borough Manager; Jordan Keeler, Community Development Coordinator; and Bob Loeffler, Consultant to the Borough. Other personnel and contractors will be selected based on their responses to the RFP issued by the Borough for the various stages of this project 3.5 Project Communications Discuss how you plan to monitor the project and keep the Authority informed of the status. Borough staff will have bi-weekly meetings with the Manager’s Representative and have e-mail and telephone contact as needed. Monthly summaries from the contractor to monitor progress will be used once the contractor is selected and will continue throughout the duration of the project. The Borough will submit the necessary quarterly reports to keep the Authority apprised of progress on the project. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 8 of 18 7/21/2010 3.6 Project Risk Discuss potential problems and how you would address them. The proposed installation of a wind turbine in Port Heiden is low-risk project and the Borough has successfully completed a similar project without any problems. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 9 of 18 7/21/2010 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. A year-long wind study indicated that a stable Class-V wind is present in Port Heiden and has the potential to generate electricity for the city’s power grid. Installing a mid-to-high penetration wind system, using current fuel price of $5.50/gallon, will result in a reduction from $.75/kWh to a $.52/kWh price before PCE and will save approximately $1,020,000 in diesel fuel costs over the 20-year lifespan of the project. Given that fuel prices are likely to rise, using $6.50/gallon diesel fuel as the assumed price, this project could save over $1,437,000 in diesel costs over the 20-year lifespan of this project. Wind power is the only feasible alternative energy source available for Port Heiden. The flat, marshy terrain is not conducive to hydro power due to a lack of suitable streams. Solar power is not feasible due to the cloudy and overcast nature or Port Heiden. Port Heiden also lacks any geothermal and wood power potential. 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. Data from the Lake and Peninsula Borough Port Heiden Wind Study shows an average electric load of approximately 75 kW, peaks of 160 kW, and with a baseline energy consumption of approximately 1450 kWh/day. These estimates are thought to be still applicable for the next 10- 20 year of development at Port Heiden. The City of Port Heiden utilizes approximately 60,000 gallons of utility diesel in a typical year. Additionally, about 7,500 gallons of heating grade diesel is used for the school heating system. The generators at Port Heiden show nameplate ratings of 190 kW and 230 kW. Only one generator is working most of the time, and there is no specific heat recovery system, though the radiational and natural convection heat from the motor and generator are enough to keep the power house and annexed fire house warm during cold months. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 10 of 18 7/21/2010 The levelized cost of unit energy (COE) varies with the oil prices, and in 2009 ranged between 0.57 and 0.75 $/kWh (not counting PCE). 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 project will have an overall positive effect on the existing energy resources. The current system relies on two oversized generators that produce more electricity than is needed on most days. By installing a wind-diesel system with upgraded controls, the system will run more efficiently, thus lowering diesel consumption and lower the rate of electricity. 4.2.3 Existing Energy Market Discuss existing energy use and its market. Discuss impacts your project may have on energy customers. The electricity market is primarily composed of residential users and a few small commercial and governmental entities. The peak demand is 160kW with an average load of 75kW. The project aims to lower the non-PCE rate from $.75/kWh to approximately $.52/kWh. The lower prices will enable business to access electricity at lower prices and reduce their operating costs. A lower electric rate also allows for the possibility of value-added fish processing, a business operation that is currently not economical due the energy-intensive nature of fish processing. 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 While a specific model of wind turbine has not been selected, the wind study found that an Enercon E-33 wind turbine was the most economical of the turbines examined in the study. The following figures are taken from the study using the Enercon E-33 as a model. The optimum capacity for an Enercon E-33 wind turbine integrated with the existing two- Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 11 of 18 7/21/2010 generator system is around 80 kW to meet the average daily demand. Combing the current system with the wind turbine would create an overall total maximum peak capacity of 770 kW: 340 kW through the diesel generators and a maximum of 330 kW from the Enercon E-33. Annual production from the proposed system would total 1,382,439 kW: 1,089,654 kW from the wind turbine and 283,784 kW from the diesel generators. The Borough does not anticipate any barriers with the project. The budget allocated funds to purchase an integrated switching system that allows for the wind turbine and generators to work in tandem. A high-voltage line will run from the wind turbine to the current generation site located approximately .25 miles from the planned wind turbine site. 4.3.2 Land Ownership Identify potential land ownership issues, including whether site owners have agreed to the project or how you intend to approach land ownership and access issues. The proposed site and all electric utility right-of-ways are owned by the City of Port Heiden and they have passed a resolution of support for this project and no ownership issues are anticipated. 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 Based on the Kokhanok wind projects and the Lake and Peninsula Borough Port Heiden Wind Study, the following permits are anticipated for this project. - FAA permitting - Construction Permitting - ACMP Permitting - USFWS-ADF&G Consultation - SHPO-OHA Consultation - Land Uses Rights-of-Way - Wetlands Surveying The Borough does not believe these permits will be a problem as the site is currently developed and owned by the City of Port Heiden. The permitting process is not expected to take more than 100 days. 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 Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 12 of 18 7/21/2010  Land development constraints  Telecommunications interference  Aviation considerations  Visual, aesthetics impacts  Identify and discuss other potential barriers No environemtnal or land 4.4 Proposed New System Costs and Projected Revenues (Total Estimated Costs and Projected Revenues) The level of cost information provided will vary according to the phase of funding requested and any previous work the applicant may have done on the project. Applicants must reference the source of their cost data. For example: Applicants Records or Analysis, Industry Standards, Consultant or Manufacturer’s estimates. 4.4.1 Project Development Cost Provide detailed project cost information based on your current knowledge and understanding of the project. Cost information should include the following:  Total anticipated project cost, and cost for this phase  Requested grant funding  Applicant matching funds – loans, capital contributions, in-kind  Identification of other funding sources  Projected capital cost of proposed renewable energy system  Projected development cost of proposed renewable energy system The total project cost is $2,023,536 for the entire project and the Borough is requesting $1,600,00 in funding from AEA. The City of Port Heiden is making an in-kind contribution of $20,000 in land and right-of-way access and the Lake and Peninsula Borough is dedicating $425,000 to the project. The projected capital costs for the project total $1,065,750 and the development costs are $620,530. 4.4.2 Project Operating and Maintenance Costs Include anticipated O&M costs for new facilities constructed and how these would be funded by the applicant. (Note: Operational costs are not eligible for grant funds however grantees are required to meet ongoing reporting requirements for the purpose of reporting impacts of projects on the communities they serve.) Final O&M costs will depend on the specific model of wind turbine selected. The following figures are from the Enercon-E33 used in the Lake and Peninsula Borough Port Heiden Wind Study. Component Capital ($/yr) Replacement($/yr) O&M ($/yr) Fuel($/yr) Total($/yr) 134,759 0 8,500 0 143,259 4.4.3 Power Purchase/Sale Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 13 of 18 7/21/2010 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 - The potential buyers and customers are the existing customers of the current city-run utility in Port Heiden. Lower electricity prices could induce local residents to start their own value-added fish processing operations. - Based on data from The Lake and Peninsula Borough Port Heiden Wind study, the projected non-PCE costs would be $.52/kWh, which is significantly less than the current rate of $.75/kWh - The proposed rate of rate of return is 10.2 years at current fuel prices. Any increase in fuel prices will increase the rate of return. 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 This project has tremendous potential for fuel displacement. The current system burns approximately 160,000 gallons of fuel per year to generate electricity. At the current fuel price of $4.95/gallon, the yearly fuel bill is $792,000. Using an Enercon E-33 as model, the proposed wind turbine installation is projected to reduce consumption to 29,370 gallons of diesel fuel per year, saving the utility $145,380 per year in fuel costs. Assuming a 20-year lifespan for the project, the lifetime fuel savings will be 587,400 gallon of diesel. The actual savings in dollar terms is hard to predict, but the very conservative estimate of $5.50/gallon for diesel fuel results in a lifetime savings of $2,907,600. Given that oil prices have never decreased for a long period of time, it is safe to project larger savings than the conservative models used in the wind study. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 14 of 18 7/21/2010 This project certainly has non-economic benefits to Alaskans. The primary benefit is the reduction in the amount of fuel being barged and transferred in the Bristol Bay watershed. While the risks are minimal, a reduction in the amount of fuel being barged a stored significantly decreases the odd that a spill will happen in transport or transfer. Less on-site fuel storage in bulk tanks also decreases the odds of a major leak that could contaminate the watershed. Another important benefit is the reduction of carbon dioxide and other harmful emissions into the atmosphere. Using the Enercon E-33 as a model, the amount of carbon dioxide emitted yearly would drop from 311,667kg/year to only 5,721kg/year. The economic benefit of a large reduction of greenhouse gases is cannot be directly calculated, but the non-economic benefit to all Alaskans cannot be overstated. 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 This project is inherently sustainable as the project seeks to incorporate proven technology into an existing utility. There is a proven and reliable demand for electricity in Port Heiden and the incorporation of a wind turbine ensure the continued demand by allowing ratepayers access to affordable electricity. Wind turbines are not new in the community as several private residences A key feature of this project is a 5-year M&O clause that any bidder would be required to accept as part of the contract. The M&O contract requires the winning bidder to be responsible for all routine maintenance during the first f ive years of the contract, plus, the winning bidder is responsible for training the utility crew in basic repairs and maintenance of the system. The initial funding for M&O is allocated for in the budget, and M&O costs after five years would be done by the utility and funded by the general revenue stream. The main operational concern for this project is the presence of enough wind to make this project viable. However, the wind study clearly shows that the wind in Port Heiden has a consistent and strong enough velocity to justify the installation of a wind turbine. Training local crews to maintain the wind turbine is also a concern, but the project has a 5 -year training period for local crews to learn the necessary skills to perform routine Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 15 of 18 7/21/2010 maintenance. Given that wind is not a stable, constant source of energy, the electric utility will still have to maintain a generator to meet the load demands on calm days. If a wind turbine is installed, fuel costs for a single generator will be roughly $151,000 per yea r, assuming fuel is $5.15 per gallon, in addition to $6580 per year in maintenance. These costs will be ongoing, but significantly less than running two generators to meet the demand. There is a strong commitment to reporting the savings and benefits of this project. The Lake and Peninsula Borough seeks to be a leader in alternative and renewable energy and has several projects in various stages. The Borough will closely monitor this project to calculate the savings and benefits of this project in order to demonstrate that our communities are capable of installing and maintaining alternative and renewable energy projects. The Borough works closely with our State representatives and strives to demonstrate that the Borough has earned the opportunity to make the best possible use of State funds. 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 Borough is rather well–positioned to take advantage of this grant and ready to proceed immediately. Following the success of a similar project in Kokhanok, the Borough used funding from to do an analysis of previous wind meter data. At the end of the year-long study, the Borough and its contractor produced The Lake and Peninsula Borough Port Heiden Wind Study, which thoroughly explored the feasibility of a wind turbine in Port Heiden. The study, which states that wind power is feasible at oil prices at or above current levels, has been the basis for this application and will guide the Borough should this project advance. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 16 of 18 7/21/2010 SECTION 8– LOCAL SUPORT Discuss what local support or possible opposition there may be regarding your project. Include letters of support from the community that would benefit from this project. The City of Port Heiden supports this project and there is a resolution of support attached to this application. The Lake and Peninsula Borough Assembly has also indicated support and the document containing the approval is also attached to this application. 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 – GrantBudget3.doc Provide a narrative summary regarding funding sources and your financial commitment to the project. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 17 of 18 7/21/2010 Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 18 of 18 7/21/2010 SECTION 9 – ADDITIONAL DOCUMENTATION AND CERTIFICATION SUBMIT THE FOLLOWING DOCUMENTS WITH YOUR APPLICATION: A. Contact information, resumes of Applicant’s Project Manager, key staff, partners, consultants, and suppliers per application form Section 3.1 and 3.4. B. Cost Worksheet per application form Section 4.4.4. C. Grant Budget Form per application form Section 9. D. Letters demonstrating local support per application form Section 8. E. An electronic version of the entire application on CD per RFA Section 1.6. F. Authorized Signers Form. G. Governing Body Resolution or other formal action taken by the applicant’s governing body or management per RFA Section 1.4 that: - Commits the organization to provide the matching resources for project at the match amounts indicated in the application. - Authorizes the individual who signs the application has the authority to commit the organization to the obligations under the grant. - Provides as point of contact to represent the applicant for purposes of this application. - Certifies the applicant is in compliance with applicable federal, state, and local, laws including existing credit and federal tax obligations. 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. Print Name Lamar Cotten Signature Title Borough Manager Date 9/15/2010