HomeMy WebLinkAboutUpper Kobuk River Valley Biomass AEA Grant App
Renewable Energy Fund Round IV
Grant Application
AEA 11-005 Application Page 1 of 25 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 25 7/21/2010
SECTION 1 – APPLICANT INFORMATION
Name (Name of utility, IPP, or government entity submitting proposal)
Northwest Inupiat Housing Authority
Type of Entity:
Regional Housing Authority
Mailing Address
P.O. Box 331 Kotzebue, AK 99752
Physical Address
1001 Turf Street
Telephone
907-442-3450
Fax
907-442-3486
Email
gadams@NIHA.com
1.1 APPLICANT POINT OF CONTACT / GRANTS MANAGER
Name
Guy Adams
Title
Executive Director
Mailing Address
P.O. Box 331 Kotzebue, AK 99752
Telephone
907-442-3450
Fax
907-442-3486
Email
gadams@niha.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
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
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.
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Grant Application Round IV
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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)
Upper Kobuk River Biomass – Design, Permitting & Equipment Specifications
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.
This project is located in the Upper Kobuk River Valley. Please see the maps below for a visual of this
region’s location. The communities that will benefit from this project are Ambler, AK; Kobuk, AK; and
Shungnak, AK. For this phase of the project, only one of the communities will receive design, permitting
and equipment specifications. The intent is to undertake an incremental deployment of the technology.
The selected community will serve as a demonstration site for the other two communities in the future.
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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 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 Construction and Commissioning
Conceptual Design
2.4 PROJECT DESCRIPTION
Provide a brief one paragraph description of your proposed project.
The intent of this project is to increase the use of locally available, biomass energy for thermal heating
and biomass needs. This project will be located in the upper Kobuk River Valley and will serve the
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villages of Ambler, Kobuk, and Shungnak. The applicant is Northwest Inupiat Housing Authority
(NIHA).Other project partners include NANA Regional Corporation, Maniilaq Association, WHPacific Inc.,
and the Kobuk, Shungnak and Ambler Village Councils. There are four phases to this project and this
application is for phase three.
Phase I: Pre-Feasibility
An initial woody biomass site assessment was sponsored by NANAPacific in August 2008 under a
Department of Energy Tribal Energy Grant. The study determined that a wood energy program is viable
and that all three of the villages are very interested in proceeding. In conjunction with the site visit, a
report completed in 1981 was reviewed which determined that woody biomass use was sustainable for
the region.
Phase II: Reconnaissance, Feasibility Analysis, and Conceptual Design
This phase was sponsored by NIHA under Round III funding of the AEA Renewable Energy Fund Program.
This phase is underway and is anticipated to be complete by March 2011. The major components of
phase II include the following.
1. Resource Assessment – Fieldwork has been completed and the report is in progress. The
assessments demonstrate that wood use is feasible for both chip and cord wood boilers. Fire
regeneration stands demonstrate that 35 green tons per acre of hardwood can be grown in 40
years. Active management of stands to insure hardwood regeneration will be required in order
for sustainable biomass utilization to occur. Actual amounts of wood needed for heating
systems are still being analyzed.
2. Harvest System Assessment - The field work is complete and the report is expected to be
complete in October.
3. Wood yard conceptual design – In progress with coordination of boiler conceptual design. This
will be an iterative process with villages.
4. Boiler feasibility and conceptual design – Initial boiler sizing models are in process. Conceptual
design will be determined from modeling and feasibility analysis.
5. Preliminary Business Models – This will be an iterative process following development of the
boiler feasibility and conceptual design.
6. Communication Process - Two meetings to present project scope and discuss possible business
structures has occurred in each of the three villages.
7. Final Presentation – Final report due by March 31, 2011.
Phase III Final Design, Permitting, and Equipment Specifications
This application is for phase III of the Upper Kobuk River valley biomass project. During this phase, the
following outlined tasks will be completed.
1. Project scoping and contractor solicitation
2. Permit applications
3. Final environmental assessment and mitigation plans
4. Resolution of land use and right of way issues
5. Permit approvals
6. Final system design
7. Engineers cost estimate
8. Updated economic and financial analyses
9. Negotiated power sales agreements with approved rates
10. Final business and operational plan
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Phase IV Construction
This phase will follow phase III, but is not included in this budget request. The anticipated milestones for
phase IV consist of the following.
1. Confirmation that all design and feasibility requirements are complete
2. Completion of bid documents
3. Contractor/vendor selection and award
4. Construction Phases
5. Integration and testing
6. Decommissioning of old systems
7. Final acceptance, commissioning and start-up
8. Operations reporting
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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 anticipated benefits of this program are many; primary among these is meeting the village and
regional entities’ long term energy vision of reducing the negative impact of the cost of energy on the
Upper Kobuk Region by providing a renewable energy alternative. This alternative could help stabilize
energy costs and provide long-term socio-economic benefits to village households. Locally produced,
affordable energy will empower community residents and will help avert rural to urban migration.
Environmental benefits and impacts of the project, based on reduction of hydrocarbon use, include
reduced potential for fuel spills/contamination episodes in transport, storage, or use (thus protecting
vital water and subsistence food sources), improved air quality, decreased contribution to global climate
change from fossil fuel use, and decreased coastal erosion due to climate change.
A wood energy project in the Upper Kobuk Region will potentially reduce and stabilize heating costs to
three villages with past year prices of fuel oil ranging from $7.00 - $10.00 per gallon. In May of 2010, fuel
oil was $8.50 per gallon in Ambler, $6.99 per gallon in Shungnak and $7.00 per gallon in Kobuk. A
properly constructed wood energy program for a village will have commercial customers as well as
create a consistent supply of fire wood for households. Currently a cord of household wood goes for
$300-$350 per cord. A wood energy program with a regional harvest company should be able to supply
split firewood at a profit for about $250 per cord. A consistent supply of wood will allow households to
more consistently rely on firewood for heating and will encourage investment in higher efficiency wood
burning appliances. A cord of wood at 80 percent burn efficiency will displace approximately 100
gallons of fuel. Thus, equivalency for wood heat, at current household prices, is about $2.50-$3.50 per
gallon for fuel oil. Household savings can be more than half on heat energy in a year. A minimum range
of 20,000-60,000 gallons of heating oil will be displaced for commercial buildings (school, clinic, others)
per village with a total of 133,827 or more to be displaced. Commercial boilers can easily cut current
heating prices in half on an annual basis.
A wood energy program can also reduce wildfire risk through forest thinning, enhance wildlife habitat
and most importantly, create local jobs and economy through import substitution. Schools are one of
the most expensive buildings to heat in the village and are a client that will help with economies of scale
for supporting development of a wood energy business model. Reducing and/or stabilizing energy costs
for schools and clinics reduce public support costs for education and healthcare. A wood energy
business fits with subsistence lifestyles and creates a greater level of self sufficiency within the village.
The process of developing and creating business, management and planning capacity enhances
opportunities for increasing long term opportunities for youth to stay in the village with well-paying
resource-based jobs. An integrated wood energy system is one of the best energy and community
economic development projects available to villages with quality wood resources and high cost of
heating fuels.
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.
To complete the design, permitting and equipment specifications phase of this project, NIHA will need
$270,000. NIHA is applying for $250,000 from the AEA Renewable Energy Fund and an additional
$20,000 will be matched in-kind by NANA Regional Corporation. The NANA Economic Development
Committee has not met during the timeframe of this request for proposal, but the proposal will be
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reviewed at its next meeting.
Phase III Final Design, Permitting and Equipment Specifications
Task Estimated Cost
Project scoping and contractor solicitation $5,000
Permit applications $10,000
Final environmental assessment and mitigation plans $90,000
Resolution of land use, right of way issues $5,000
Permit approvals $40,000
Final system design $70,000
Engineers cost estimate $5,000
Updated economic and financial analysis $10,000
Negotiated power sales agreements with approved rates $5,000
Final business and operational plan $10,000
2.7 COST AND BENEFIT SUMARY
Include a summary of grant request and your project’s total costs and be nefits below.
Grant Costs
(Summary of funds requested)
2.7.1 Grant Funds Requested in this application. $250,000
2.7.2 Other Funds to be provided (Project match)
An application has been submitted to the NANA Regional Corporation
Village Economic Development Committee requesting $20,000 of
project match funds to support this project. The committee did not
meet during the timeframe of this request for proposal, but is
anticipated to support a project match during their next meeting.
$20,000 (anticipated)
2.7.3 Total Grant Costs (sum of 2.7.1 and 2.7.2) $270,000
Project Costs & Benefits
(Summary of total project costs including work to date and future cost estimates to get to a fully
operational project)
2.7.4 Total Project Cost (Summary from Cost Worksheet
including estimates through construction)
$2.2 million for one
community
2.7.5 Estimated Direct Financial Benefit (Savings) $2-300,000 estimated
annual savings
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.)
The estimated public benefit
will be further refined during
the design phase.
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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.
Northwest Inupiat Housing Authority (NIHA), the lead applicant, will provide overall project oversight.
NIHA is the regional housing authority serving the Upper Kobuk communities. WHPacific will provide
project management, performing all management functions; including management of all sub-
contractors needed to fulfill the technical aspects of the project.
Guy Adams, Project Manager, Northwest Inupiat Housing Authority: On this project, Guy will serve as
the Project Manager performing all management functions including: contract oversight, financial
accounting, communication meetings and project schedule. Guy Adams has been the Executive Director
at NIHA since 2001. Mr. Adams is the Executive Director of NIHA where he supervises approximately 100
employees throughout the NANA region and provides day-to-day management of a five million dollar
annual budget. He will be assisted by financial support staff. Prior to joining NIHA, Guy was a planner
with NIHA where he assembled, wrote and submitted Annual Indian Housing Plan grants, completed
annual performance reports and assisted with management of federal budgets. (Full resume and
references attached)
Nicole McCullough, Project Support, WHPacific Inc. Nicole McCullough will assist with project
management and village coordination. Nicole has 20 years of infrastructure planning experience in
Northwest Alaska on a wide variety of projects, including energy, environmental, transportation,
sanitation, housing and business planning. She is also a successful grant writer and has helped to obtain
over $30,000,000 worth of infrastructure projects for communities throughout Alaska. (Full resume and
references attached)
Matt Bergan, PE, Mechanical Engineer, WHPacific Incorporated: Matt Bergan, PE, is a Mechanical
Engineer with over 12 years experience. He joined WHPacific with a Bachelor of Science in Mechanical
Engineering from Norwich University, Northfield, Vermont. His broad experience includes installation,
maintenance and operation of wind power projects; diesel power plant operations and maintenance;
and rural health facilities infrastructure replacement and build-out. (Full resume and references
attached)
Elia Sakeagak, Planner, WHPacific Incorporated: Elia Sakeagak will provide village coordination and
project oversight support. Elia will also provide GIS analysis as needed. She will produce status reports
and assist to develop and present the final product for this phase. (Full resume and references
attached)
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.)
Task to be Completed Date for Completion
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Project scoping and contractor award for planning and design 09/1/2011
Permit applications (as needed) 09/2011-07/2012
Final environmental assessment and mitigation plan (as
needed)
06/30/2012
Resolution of land use, right of way issues 05/31/2012
Permit Approvals 05/2012
Final system design 01/2012-04/2012
Engineers cost estimate 05/2012
Updated economic and financial analysis 05/2012
Negotiated power sales agreements with approved rates 05/2012
Final business and operational plan 05/2012
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.)
Phase III Final Design, Permitting, and Equipment Specifications
This phase will begin as soon as the project has been funded by AEA. The main project milestones are:
1. Project Scoping and Contractor Award for Planning and Design (09/1/2011)
The engineering constructor will be selected and a task order will be prepared for work planned
for this phase.
2. Permit Applications (as needed) (09/2011-07/2012)
Permit applications will be prepared and submitted.
3. Final Environmental Assessment and Mitigation Plans (as needed) (06/30/12)
4. Resolution of land use, ROW Issues (05/31/12)
NIHA will secure site control for the biomass project.
5. Permit Approvals (05/12)
6. Final System Design (01/2012-04/2012)
The engineering contractor will complete the final design of the biomass delivery system.
7. Engineers Cost Estimate (05/2012)
Engineers will complete a detailed cost estimate for the project.
8. Updated economic and financial analysis (05/2012)
Review the economic and financial analysis and update report documents as necessary.
9. Negotiated Power Sales Agreements w/approved Rates (05/2012)
Negotiate the heat sales agreement.
10. Final Business and Operational Plan (05/2012)
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 ref erences
for known, key personnel, contractors, and suppliers as an attachment to your application.
NIHA will work with WHPacific on all aspects of this project. NIHA will provide a Project Manager to be
the primary contact for WHPacific. WHPacific will use its own staff, including a project manager and a
project engineer as well as subcontract with a variety of consultants to implement this project.
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NIHA and WHPacific have subcontracted consultant William A. Wall, PhD. NANA Regional Corporation
and the Maniilaq Association will serve as partners for this project as well.
Nicole McCullough, Project Management, WHPacific Incorporated: Nicole McCullough will assist with
project management and village coordination. Nicole has 20 years of infrastructure planning experience
in Northwest Alaska on a wide variety of projects, including energy, environmental, transportation,
sanitation, housing and business planning. She is also a successful grant writer and has helped to obtain
over $30,000,000 worth of infrastructure projects for communities throughout Alaska.
Matt Bergan, PE, Mechanical Engineer, WHPacific Incorporated: Matt Bergan, PE, is a Mechanical
Engineer with over 12 years experience. He joined WHPacific with a Bachelor of Science in Mechanical
Engineering from Norwich University, Northfield, Vermont. His broad experience includes installation,
maintenance and operation of wind power projects; diesel power plant operations and maintenance;
and rural health facilities infrastructure replacement and build-out.
Elia Sakeagak, GIS Analysis, WHPacific Incorporated: Elia Sakeagak will provide village coordination and
project oversight support. Elia will also provide GIS analysis as needed. She will produce status reports
and assist to develop and present the final product for this phase.
William A. Wall, PhD, Consultant: Dr. Wall will provide technical consultation; his responsibilities will
include project assessment and development. Dr. Wall has developed biomass programs for many rural
Alaskan villages and holds a PhD in Forestry from Stephen F. Austin State University in Texas.
Allen R. Jessup Sr., Accountant, Northwest Inupiat Housing Authority: Allen R. Jessup will be the
project accountant. He is an Accountant for Northwest Inupiat Housing Authority, where he has worked
for eight years. He is responsible for budget and financial accountability for all fiscal operations at the
Housing Authority. Mr. Jessup prepares annual, semi-annual, quarterly and monthly budget reports.
Sonny Adams, NANA Liaison, NANA Regional Corporation: Sonny Adams will act as a liaison with NANA
Regional Corporation and offer community and regional support with land ownership and technical
issues. He is currently employed by NANA Regional Corporation as a Projects Manager and Community
Liaison. He coordinates team meetings and helps to implement the region’s Strategic Energy Plan.
Jackie Hill, Administrator: Tribal Governments, Maniilaq Association: Jackie Hill will act as a village
liaison for this project. She is a Tribal Government Services Administrator for Maniilaq Association,
where she has worked for three years. She oversees all Tribal Government Services programs and has
worked closely with the village councils in Ambler, Kobuk and Shungak.
Jackie Eakan, Planner, Maniilaq: Jackie Eakan will act as a village liaison for this project. She is a Planner
and Grant Writer for Maniilaq, where she assists with project development for a wide range of services
for organizations and villages in the Maniilaq service area.
Louis “Charlie” Nelson, Planner, Tupiq Services: Charlie Nelson will provide technical assistance
concerning landownership. Mr. Nelson is a Deputy Director and Planner at Tupiq Services.
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3.5 Project Communications
Discuss how you plan to monitor the project and keep the Authority informed of the status.
Mr. Adams and other team members will conduct regular teleconferences to ensure the project’s goals
are being met. NANA, Maniilaq, AEA, Tribal and City staff will be invited to attend all meetings.
Telephone, fax and e-mail will provide the basic day-to-day communication among the project team and
with AEA; accurate meeting minutes will be maintained. A monthly abbreviated status report in addition
to quarterly reports will be provided to keep AEA informed on the projects status.
Community outreach is vital to a successful outcome. Community involvement has been an ongoing
component of this project. Several meetings have already occurred and as the project moves forward,
the communities will continue to be informed of the status of the project. NIHA has worked with
Maniilaq to create a public involvement plan for the second phase of this project, and that plan will be
adjusted as needed for the third phase. Examples of possible techniques that may be outlined in the
Public Involvement Plan include brochures or newsletters at key points during the project, public
meetings, attendance and Council meetings, presentations at regional energy conferences such as the
Alaska Federation of Natives Convention and the Department of Energy’s Tribal Conference and articles
in NANA’s newsletter.
3.6 Project Risk
Discuss potential problems and how you would address them.
Phase III Final Design, Permitting and Equipment Specifications
The risks associated with the final design, permitting, and equipment specifications phase include:
The availability of appropriately sized equipment might be limited. Coordination with existing
equipment providers will be needed in order to obtain the correct sized machinery.
The project does not have secured funds. This will be mitigated at the design, permitting and
equipment specifications phase.
The availability of biomass resources may be limited. In order to combat this issue, the system
will need to be designed to account for limited resource availability.
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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.
In 1981, a study was conducted and determined that wood energy was feasible in the Upper Kobuk River
valley. In July 2010, a field study was conducted by William Wall, PhD and Clare Doig, CF, of Forest and
Land Management to determine sustainable levels of forest harvest and forest management that could
be applied to lands within a 10 mile radius of Ambler and Kobuk/Shungnak. Analysis is still in progress,
however, post-fire hardwood stands demonstrated that up to 35 green tons per acre could be grown in a
40-year rotation, and that stands averaged 16 tons per acre of spruce and hardwoods. It is expected that
there is enough wood to meet the needs of current scale of fuel use for commercial buildings on NANA
lands in the surrounding communities.
However, sustainability of the project will require active forest management for the fast growing species
in the region which are expected to be cottonwood, aspen and birch. These species all grow much faster
than spruce. The report and final conclusions will be integrated with a modeling effort to determine the
optimum size and types of boilers for each of the villages.
Although wood energy systems require a significant amount of labor, planning and management; these
alternative energy systems can displace more diesel fuel for heat than any other alternative system
including wind, solar and river run hydro. Wood can work effectively and be integrated with other
systems. In addition, wood can be used effectively to stabilize and possibly decrease heating costs of
both commercial buildings and individual households. Wood energy creates a new, local industry if
structured correctly as a for-profit business that creates jobs and captures funds currently being paid
outside the village.
The primary barrier is that wood energy systems take a significant amount of labor, planning and
management, which many villages do not have the capacity to support. Also, the business must be
integrated among various key organizational components, including forest management, harvest and
delivery of wood and operation of boiler and district heating systems. The Upper Kobuk Wood Energy
Project is supported by NANA, NIHA and the Northwest Arctic Borough, with engineering support from
WHPacific. These are all regionally based entities with strong managerial and technical capacity. Thus,
the issue of local capacity can be developed from regional support.
4.2 Existing Energy System
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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 primary energy source for the production of heat and electricity in the Upper Kobuk Region is #1 fuel
oil, also known as “diesel fuel” and “home heating oil”. The oil is an “arctic blend” (or “arctic #1”) that
does not jell in extremely low temperatures. Energy content of fuel oil is typically 125,000-135,000
British Thermal Units (BTUs) per gallon.
Diesel generator sets use fuel oil to produce community electric power. Fuel oil is also burned in boilers
or furnaces to produce heat for commercial and residential facilities. The commercial energy systems
capacity in Ambler totals 6,136,000 BTUs per hour. Commercial energy systems capacity in Shungank
totals 3,118,000 BTUs per hour. The commercial energy systems capacity in Kobuk is still being totaled.
See below for descriptions of planned expansions to the current energy systems along with tables
summarizing diesel power generation for each community.
Ambler
The AVEC Ambler power plant is not scheduled for upgrade at this time. The Ambler school was built in
the last 10 years and no expansion is planned. A new water treatment plant is planned for construction
beginning in 2010 (pending resolution of naturally occurring asbestos issues1). The water treatment
plant will be of similar construction and capacity to that of the new Shungnak water treatment plant (the
Shungnak plant boiler has a capacity of 696 MBH). A new secondary heat system is planned for
connection of the new water treatment plant to the AVEC power plant.
Ambler Diesel Power Generation (Estimated)
Annual Diesel Electricity Generated 1,321,573 kWh/year
Annual Diesel Fuel Consumption 93,867 gal/year
Average Diesel Efficiency 14.08 kWh/gal
Fuel Cost $0.37/kWh
Non-Fuel Cost $0.27/kWh
Diesel COE $0.64/kWh
Estimated Local Fuel Cost @ $107.50/bbl $5.27
Projected Fuel Cost/year $494,679
Non-Fuel Costs/year $352,572
Total Electric $847,000
Shungnak
AVEC is planning for a new power plant in Shungnak. The proposed plant will be located near the school
for secondary heat utilization. The Shungnak School was recently remodeled and no additional upgrades
are planned. Kobuk is connected to the generators in Shungnak via a transmission line, so the following
numbers include diesel power generation for Kobuk.
1 Concerns about naturally occurring asbestos in the ground are slowing the water treatment plant project and other
projects in Ambler. Resolution to the issue should be achieved by summer 2010.
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Shungnak Diesel Power Generation (Estimated)
Annual Diesel Electricity Generated 1,483,862 kWh/year
Annual Diesel Fuel Consumption 107,611 gal/year
Average Diesel Efficiency 13.79 kWh/gal
Fuel Cost $0.38/kWh
Non-Fuel Cost $0.25/kWh
Diesel COE $0.63/kWh
Estimated Local Fuel Cost @ $107.50/bbl $5.22
Projected Fuel Cost/year $561,729
Non-Fuel Costs/year $370,236
Total Electric $932,000
Kobuk
The Kobuk school is expanding with a major addition for the high school and a gym. Heating demand
created by the addition will likely double the needed heat capacity of the school to roughly 1,200-1,400
MBH.
All homes within each village currently use Weil-McClain boilers and monitors; many residential boilers
are outdated and inefficient. A minimum of 125,000 gallons for all three villages has the potential to be
displaced with wood energy in a district heating system that services the primary commercial buildings.
These typically include the school, clinic, water-treatment plant and tribal or city office buildings.
Displacing 125,000 gallons of fuel will require capturing the heat from generators and utilizing
approximately 1,600 tons of wood annually. Modeling is currently underway to determine wood boiler
sizes and type; either stick or chip fired.
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.
Fuel oil is the primary energy used for heating commercial buildings. Households may be heated with a
combination of heating oil and locally gathered wood. Fuel oil prices depend on whether a barge has
been able to reach the villages. Last year, when fuel had to be flown into each village, oil prices were as
high as $9.00 per gallon. Locally harvested wood is sold by the load but equates to $350-400 per cord.
An organized system of gathering wood could drop the price to as low as $250 for split and delivered
cords of wood for households or for stick fired boilers for commercial buildings. Chips could be delivered
for as low as $200 per ton for automated boilers. Feasibility studies for the various villages will
determine the best business model, configuration of boilers and sustainable level of harvests.
4.2.3 Existing Energy Market
Discuss existing energy use and its market. Discuss impacts your project may have on energy
customers.
There are two market levels in each village, the household market and the commercial buildings
market. The commercial buildings will drive the actual economies of scale for a feasible project to
include a harvesting group and a district heating system. The following table lists last year’s fuel prices
and estimated quantities of fuel used by commercial buildings in each village.
Once completed, a district heating system would stabilize local fuel costs to commercial customers and
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could reduce overall costs. This would reduce the amount of fuel oil consumed by commercial
customers. Since most fuel is currently flown into the villages in smaller amounts, the bulk price of
fuel would not be significantly affected by reduction in overall amounts. Even if the bulk price is
somewhat increased, the amount of savings more than compensates.
Commercial Quantity Residence
Bulk Fuel Heating Oil
$ per Gallon
Gallons per
year
Heating Oil Cost per
Gallon
Ambler $9.00-$9.50
City $9.70 2,607.1
City Rental Unit 2,607.1
Water Plant 16,827.9
Clinic $9.40 2,001.6
School &Teacher H.$9.00 40,000.0
Tribe
592,623.4
Kobuk $7.00
City & Water 13,200.0
Clinic $7.00 2,555.0
School & Teacher H $9.00 9,000.0
Tribe 500.0
$191,785.00
Shungnak $8.09
City, Safety, VPSO,
Housing, Water $8.09 7,616.5
Housing/Water $8.09 7,616.5
Clinic $7.69 1,913.5
School & Teacher H $9.00 35,000.0
Tribe
$398,956.89
$1,183,365.30
Fuel Oil Utilization & Cost Reports
Entity
Village Total
Proprietary data; tribe operates a fuel business
Village Total
Located in City Office building
TOTAL
Survey conducted Sept. 18 - Oct. 7, 2008 by Maniilaq Association Planning Department,
with gratitude to all of the many regional entities providing data.
Village Total
Data Limitations:
The price of heating oil steeply varies depending on amount ordered and method of delivery.
The Bulk fuel heating oil costs per gallon are rough averages. In Ambler, fuel prices varied by
$4.59 per gallon due to quantity purchased; by combining bulk oil purchases, commercial
entities in Ambler reduced their fuel cost from $9.70 per gallon to $5.11 per gallon.
Most prices are based on the previous year’s usage and cost data. Monthly cost data were
extrapolated to reach an annualized cost estimate.
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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 following points describe the conceptual system design:
Renewable energy technology specific to project location
All three villages are being modeled currently for application of both stick and chip fired boilers
with heat capture from generators where possible. Garn boilers are the stick-fired standard
being used in the modeling process and Kob chip boilers are being used as the standard for chip
fired boilers. A determination will be made in the feasibility and conceptual design phase of the
project, which is on-going.
Optimum installed capacity
Ideally, utilizing both generator captured heat and a configuration of wood boilers, a district
heating system will optimize at 90% displacement of fuel oil used by commercial buildings.
Anticipated capacity factor
Boiler sizing is currently under development in the feasibility and conceptual design phase.
Anticipated annual generation
Annual generation, once all three villages have developed an online, will be enough BTUs to
displace 90% of the commercial fuel use or approximately 112,000 gallons.
Anticipated barriers
No technical barriers are anticipated. Wood delivery, forest management, boiler operations, and
for-profit business management are labor intensive and require capacity development that may
not be readily available in each of the villages. However, in the case of this project, regional
partners do have the capacity to support local development of needed skills.
Basic integration concept
Heat from both the generators and wood boilers will be delivered through a heat exchanger
between the district heating system and currently installed boilers. The system will be
developed such that if the district heating system fails for any reason the building system will
automatically pick up the heat load of the specific building. Contractual agreements between the
district heat system and the client will require that the client maintain their current heat system
with fuel available for use.
Delivery methods
Heat will be delivered by district heating system via hot water through insulated pipe and a
utilidor.
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.
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A Memorandum of Understanding between NANA Regional Corporation and the Tribal Councils will
initially address forest management and any potential stumpage charges. Once a final business plan is
developed, a contractual agreement will be established. Major commercial interests and Tribal and City
Councils will work together to establish a boiler location and wood yard site.
4.3.3 Permits
Provide the following information as it may relate to permitting and how you intend to address
outstanding permit issues.
List of applicable permits
Anticipated permitting timeline
Identify and discussion of potential barriers
The necessary permits will be dependent on the course of action that is determined for this project. The
permits that may need to be obtained include:
NWAB Development Permit
ADNR Permit
USACE Section 404/401
ADF&G Title 16
Coastal Zone Consistency Determination
It is anticipated that this process will take a year to complete, and a potential barrier is timing. Some of
these permits need to be obtained sequentially and can only be obtained during specific times of the
year. To mitigate this problem a schedule will be created to obtain the permits in a timely manner.
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
This section will address the environmental concerns of both the current application for boilers and the
project for biomass harvesting:
Threatened and Endangered Species – There are no listed species in the project area.
Habitat issues – NANA Regional Corporation is developing a Forest Stewardship Plan which
addresses ownership and includes a five year Forest Management Plan. A Harvest Plan and a final
project design will be completed as part of Phase III. A review of caribou and moose habitat and
migratory routes and times will be conducted and incorporated into forest and transportation
planning to reduce potential disturbance. Opportunities to enhance caribou and moose habitat
will be sought and developed. Harvesting of over-mature spruce and hardwood could have a
small scale, local impact on Neotropical bird migration. Over-mature hardwoods are not
expected to be a major portion of harvested biomass production stands. No significant negative
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habitat impacts outside the natural range of variation, in this fire driven ecosystem, are
expected.
Wetlands and other protected areas – The provisions of the Alaska State Forest Practices Act will
be incorporated into regional harvest practices. During harvests crossing of streams, riparian
zones and wetlands will be scheduled to preclude negative impacts. Wetlands crossing will only
occur during the winter months when the wetland is frozen to mitigate impact. NANA Regional
Corporation’s Geographic Information System will be utilized to support and monitor forest
access, management, biomass transportation, and planning. Villages will be consulted to
determine culturally and historically sensitive areas unsuitable for biomass harvest.
Land Development Constraints – No constraints are anticipated at this time.
Telecommunications Interference – No interference is anticipated at this time.
Aviation Considerations – No aviation issues are anticipated at this time.
Visual and aesthetic impacts – The harvesting of biomass can impact the aesthetics of a forest.
To comply with the provisions of the FPA and mitigate aesthetic impacts a buffer will be
maintained between harvesting areas and visible corridors. Wood yards will be fenced and sited
on the edge of each village. The noise impacts resulting from wood chip deliveries will be
mitigated through proper scheduling.
Potential Project Barriers - The project developers have attempted to address all of the barriers
of converting a village from unsustainable diesel heating to a sustainable woody biomass
heating; however, additional barriers may emerge as the project moves forward.
Organization cooperation - It is critical to develop cooperation among participating
organizations. A Memorandum of Understanding between NANA Regional Corporation, NANA
subsidiaries, and the village tribal councils defining roles, responsibilities and means of
cooperation will be included in a final business plan. Cultivating cooperation will be an ongoing
process.
For Profit Model Simultaneous Development of Supply and Delivery/Demand - Creating a local
for-profit harvesting and woody biomass energy utility model is key to fostering confidence in
the biomass supply resulting in BTU demand. Thus we have two key components to the project:
biomass harvest – supply; and boiler installation and operations – demand. A final business plan
will include economic incentives, development of an integrated biomass harvest conversion,
delivery and operations system. More local ownership in the project results in more benefits to
the community.
Business Management Capacity - Development of a commercial biomass harvest company is a
new enterprise in three villages where most services, including utilities, are controlled on a
regional level. Local business management capacity will need developing. A commercial biomass
harvest company requires expertise, labor intensive management, and planning along with
extensive field operations. These capacities must be developed locally. A five year forest harvest
plan will be developed with an annual implementation plan; however, these plans will be
impacted by weather patterns, ice thickness, and ground moisture patterns. Intensive local
management is critical to secure adequate wood supplies and reduce the final cost. Training is
planned for business management, structure, forest planning, and harvest management. A well
trained labor pool is critical to the success of this project.
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
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source of their cost data. For example: Applicants Records or Analysis, Industry Standards,
Consultant or Manufacturer’s estimates.
4.4.1 Project Development Cost
Provide detailed project cost information based on your current knowledge and understanding of
the project. Cost information should include the following:
Total anticipated project cost, and cost for this phase
Requested grant funding
Applicant matching funds – loans, capital contributions, in-kind
Identification of other funding sources
Projected capital cost of proposed renewable energy system
Projected development cost of proposed renewable energy system
Total anticipated project cost, and cost for this phase - Total project installed costs will depend
on the modeled capacity determined in the current feasibility study underway. If Ambler were
selected as the pilot project, then total installed capacity would be large enough to displace
approximately 58,000 gallons of fuel. Total capital cost would be approximately $2.5 million.
Phase 3 is anticipated to cost $270,000.
Requested grant funding - NIHA is requesting $250,000 from AEA for completion of Phase 3 for
final design, permitting, and equipment specifications.
Applicant Matching funds - NIHA has applied for $20,000 matching funds from NANA.
Identification of other funding sources - No other funds are being sought for phase 3. However,
NIHA will explore multiple funding sources for construction including USDA REAP, DOE Tribal
Energy Program, and Denali Commission programs.
Projected capital cost of proposed renewable energy system - $2.5 million
Projected development cost of proposed renewable energy system - $300,000
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.)
This information is being gathered in the Reconnaissance; Resource Assessment/Feasibility
Analysis/Conceptual Design phase. This phase is underway and is expected to be completed in March
2011. Operating and Maintenance costs will be developed in the initial business plan and feasibility
study currently underway. The For-Profit Business anticipated to be developed for a wood energy utility
will pay the costs of O&M.
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
This information is being gathered in the Reconnaissance; Resource Assessment/Feasibility
Analysis/Conceptual Design phase. This phase is underway and is expected to be completed in March
2011. BTU purchase agreements will be tied to costs of fuel oil for heating but it is expected that BTU
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costs will stabilize the cost at between $5-6/ gallon. There will be agreements developed with the NWAB
School District and the local City and Village Councils.
4.4.4 Project Cost Worksheet
Complete the cost worksheet form which provides summary information that will be considered
in evaluating the project.
Please see the attached cost worksheet.
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 benefits for the proposed biomass program are included below.
Fuel Displacement: The annual projected fuel displacement in three villages for commercial
buildings is 133,827 gallons at the current price range of $7.05 per gallon is $943,480. At a
project life of 15 years, the total gallons displaced are 2,007,405 with a total gross displacement
value of $14,152,205.
Anticipate Revenues: At a delivered wood fuel price of $200 per ton of chips and total demand
of 2,000 tons, the wood harvest and delivery company will derive an annual gross income of
$400,000 which is equal to $17.33 per million BTUs. At $7.05 per gallon a million BTUs of heat
costs $50.90. The wood utility operators of the boilers will develop a long term BTU agreement
with the commercial buildings to stabilize the heat equivalent price at $5-6 per gallon of fuel
depending on the feasibility study and cost structure determined.
Annual Incentives: Tax credits or other annual incentives have not been explored as of yet.
Green Credits: Green Credits may be explored once the scope of the project and the need for
additional incentives has been fully understood.
Non-economic benefits: These two projects, woody biomass harvest and boiler installations, in
combination create significant non-economic benefits. Community members believe wood
energy will create local jobs that are consistent with their subsistence lifestyles. Community
leaders believe utilizing local resources helps create a culture of sustainability, self-sufficiency,
and drastically reduce dependence on outside energy sources.
Building upon NWAK’s Energy vision of becoming reliant on regionally available energy resources for
heating and power generation, NIHA is excited about the design phase of this program. It is their vision to
decrease the need for transportation fuel imported into the region. As part of this vision, imported fossil
fuels would be relied upon only as emergency or back-up fuel. Regionally available resources include
renewable resources such as hydropower, solar, wind, geothermal, biomass, hydrogen and fuel cells;
alternative fuels such as regionally available coal to gas resources; and regional fossil fuels such as
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natural gas and coal. The focus of our energy vision is on what can be developed locally, within our
region. WHPacific and its parent company NANA Regional Corporation are working with regional,
statewide, and national partners to address the energy crisis in Northwest Alaska. The work includes
development of a comprehensive regional plan encompassing energy conservation, infrastructure
development, improved efficiency and locally available energy resource development. The hydroelectric
projects that could be developed out of the proposed assessment activities will help meet these goals
and help stabilize energy costs, providing long-term socioeconomic benefits to villages.
The NIHA’s service region is confronted by the reality that plagues much of rural Alaska: extremely
limited economic opportunity combined with an almost astronomical cost of living. Recent increases in
the price of oil have had a direct and drastic impact on the cost of diesel-generated power, especially in
Alaska's sub-arctic regions. In NANA's remote corner of the state, electricity can exceed 60 cents per
kilowatt hour (Khw) and fuel costs are often upwards of $7 per gallon and continuing to climb. Many of
the region's disadvantaged residents are forced to choose between heating their homes and buying
groceries. The impacts felt within the NANA region are magnified by the additional costs associated with
bulk fuel shipping, the poor economies of scale in power generation and distribution, and the possible
reduction and/or elimination of PCE program and the State-Municipal Revenue Sharing programs. High
fuel costs directly harm rural residents, eroding the health and well-being of the community. The high
cost of living is also causing an increasing number of rural households to move to regional and urban
centers, a trend which potentially threatens the long-term health of our communities. Faced with the
challenges of high costs, limited local employment options and the need to support their families, many
rural Alaskans are forced to leave village life behind in order to relocate to larger cities in search of
employment and affordable living.
In such small communities, each household is important to the well-being of the entire community. With
more affordable energy available in the villages, more of our region's households will be able to afford to
stay in their communities, promoting community stability and wellness and helping to stem the tide of
rural migration.
Our region will enjoy a wide range of benefits from the proposed project, including increased
employment, substantial energy cost savings, and positive cultural and social impacts. The great expense
of powering homes in this remote region is often crippling to families with limited resources. The high
cost of living in our region and lack of local employment opportunities drive many residents away from
the villages to Alaska's urban areas. Employment generated locally by this project and the stabilization of
energy costs will empower community members by providing new local opportunities, reducing the
costly burden of energy bills, and keeping electrical payments in the local economy, thereby improving
socio-economic conditions in the villages. We believe that these benefits will help stop and possibly even
reverse the flow of rural-urban migration, contributing in a very important way to the long-term stability,
health and well-being of our villages and our Inupiat Eskimo culture.
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
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The Upper Kobuk River valley biomass project has the support of three regional entities, NANA Regional
Corporation, Northwest Arctic Borough, and NIHA, and their continued support is anticipated.
A business plan is currently being developed under the Reconnaissance, Feasibility Analysis, and
Conceptual Design phase that will determine the business structure and budget for future maintenance
and operations costs.
Some operational issues that may arise include the cost of training new personnel to operate the biomass
delivery system. Also, providing operations maintenance in an arctic environment can be costly. These
issues will be addressed during the second phase of this project.
Operators of the biomass delivery system will be trained to collect data and will be required to report all
cost savings and benefits.
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.
An initial woody biomass site assessment was sponsored by NANA Pacific in August 2008 under a
Department of Energy Tribal Energy Grant. The study determined that a wood energy program is viable
and that all three of the villages are very interested in proceeding. In conjunction with the site visit a
report completed in 1981 was reviewed which determined that woody biomass use was sustainable for
the region. The Maniilaq Association received a $257,212.00 grant from the Bureau of Indian Affairs for
aerial photos with coverage around the Ambler, Kobuk, and Shungnak areas. The next phase of the
project, the reconnaissance, feasibility study, and conceptual design, was sponsored by NIHA under
Round III funding of the AEA Renewable Energy Fund Program.
This phase is scheduled to be completed in March 2011- the project management team has met all
requirements of these previous grants- the Reconnaissance report is 90 percent complete, the harvest
and resource assessment field work is 100 percent complete, and the reports are scheduled to be
complete in October.
In the following months, the boiler assessment should be done. The business plan has begun and a draft
is scheduled for January. The final plan is scheduled to be complete in February with presentations in
March to conclude this phase of the project. The final design, permitting and equipment specifications
phase can begin in April if funds are granted.
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.
During prefeasibility, public meetings were held in each village in the fall of 2009. The wood energy
concept was presented and discussed. Follow up public meetings were held on March 24, 2010, in
Ambler and Shungnak and on March 25, 2010, in Kobuk in collaboration with the NIHA and the local
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governmental entities in each village. During the meetings, representatives from WHPacific, Solstice
Alaska Consulting, Incorporated, and Alaska Wood Energy Associates discussed the Upper Kobuk River
Valley Biomass project. Generally, each village expressed positive interest in the project.
Please also see the attached letters of support, meeting minutes, and public education documents.
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
To complete the final design, permitting and equipment specifications phase of this pilot project, NIHA is
requesting $250,000 from AEA and will pursue an additional $20,000 from NANA Regional Corporation.
Additional funding will be secured during this phase of the project for the project implementation.
Appendix A - Resumes
Appendix B – Project Cost/Benefit Worksheet
Renewable Energy Fund Round 4
Project Cost/Benefit Worksheet
RFA AEA11-005 Application Cost Worksheet Page 1 7-21-10
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. 900 tons annually average of 16 - 20 tons / acre
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 Railbelt1 grid, leave this section blank)
i. Number of generators/boilers/other Ambler – 3 generators, Shungnak – 4 generators,
Kobuk – 1 generator
ii. Rated capacity of generators/boilers/other Ambler – 271 kW, 314 kW, 397 kW; Shungnak –
202 kW, 297 kW, 314 kW, 397 kW; Kobuk – 50 kW
iii. Generator/boilers/other type All diesel generators
iv. Age of generators/boilers/other
v. Efficiency of generators/boilers/other Approximately 30%
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)
Kobuk is connected with a transmission line to Shungnak, so the following numbers for
Shungnak include Kobuk’s electricity and fuel usage.
i. Electricity [kWh] Ambler - 1,321,573 kWh/year, Shungnak – 1,483,862 kWh/year
ii. Fuel usage
Diesel [gal] Ambler - 93,867 gal/year, Shungnak – 107,611 gal/year
Other
iii. Peak Load Ambler – 290 kW, Shungnak – 348 kW
iv. Average Load Ambler – 130 kW, Shungnak – 157 kW
v. Minimum Load
vi. Efficiency Ambler – 14.08 kWh/gal, Shungnak – 13.79 kWh/gal
vii. Future trends
d) Annual heating fuel usage (fill in as applicable)
i. Diesel [gal or MMBtu] 64,000 gallons
ii. Electricity [kWh] 195,000 KWh annually to operate systems
iii. Propane [gal or MMBtu]
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.
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RFA AEA11-005 Application Cost Worksheet Page 2 7-21-10
iv. Coal [tons or MMBtu]
v. Wood [cords, green tons, dry tons] Households
vi. Other
3. Proposed System Design Capacity and Fuel Usage
(Include any projections for continued use of non-renewable fuels)
a) Proposed renewable capacity
(Wind, Hydro, Biomass, other)
[kW or MMBtu/hr]
b) Proposed annual electricity or heat production (fill in as applicable)
i. Electricity [kWh]
ii. Heat [MMBtu]
c) Proposed annual fuel usage (fill in as applicable)
i. Propane [gal or MMBtu]
ii. Coal [tons or MMBtu]
iii. Wood [cords, green tons, dry tons] 900 green tons annually
iv. Other Captured heat from generators approximately 25%
4. Project Cost
a) Total capital cost of new system $1.8 million plus $400,000 for harvest equipment
$2.2 million
b) Development cost $300,000
c) Annual O&M cost of new system $75,000
d) Annual fuel cost $180,000
5. Project Benefits
a) Amount of fuel displaced for
i. Electricity
ii. Heat 64,000 gallons annually
iii. Transportation
b) Current price of displaced fuel $8.50
c) Other economic benefits Create local jobs
d) Alaska public benefits Stable cost of heat fuel for school and health care
6. Power Purchase/Sales Price
a) Price for power purchase/sale $5-6/gallon equivalent
7. Project Analysis
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RFA AEA11-005 Application Cost Worksheet Page 3 7-21-10
a) Basic Economic Analysis
Project benefit/cost ratio
Payback (years) 6.28 years for boiler infrstructure
Appendix C – Grant Budget Form
Renewable Energy Fund Grant Round IV Grant Budget Form 7-21-10
Design & Permitting Phase- Proposed
Milestone or Task Anticipated
Completion Date
RE- Fund
Grant
Funds
Grantee
Matching
Funds*
Source of Matching Funds:
Cash/In-kind/Federal Grants/Other
State Grants/Other
TOTALS
(List milestones based on phase and type of project.
See Attached Milestone list. )
$ $ $
Project scoping and contractor solicitation for
planning and design
10/1/2011 $5,000 $1,000 In-Kind $6,000
Permit applications (as needed) 08/2011-07/2012 $10,000 $2,000 In-Kind $12,000
Final environmental assessment and mitigation
plans (as needed)
07/30/2012 $90,000 $5,000 In-Kind $104,000
Resolution of land use, right of way issues 08/31/2012 $5,000 $1,000 In-Kind $6,000
Permitting, rights of way, site control 05/2012 $40,000 $3,000 In-Kind $43,000
Final system design 01/2012-04/2012 $70,000 $4,500 In-Kind $74,500
Engineers cost estimate 05/2012 $5,000 $1,000 In-Kind $6,000
Negotiated power sales agreements with
approved rates
Not applicable $5,000 $1,000 In-Kind $6,000
Final business and operational plan 05/2012 $10,000 $1,500 In-Kind $11,500
TOTALS $250,000 $20,000 $270,000
Budget Categories:
Direct Labor & Benefits $5,000 $600,000
Travel & Per Diem $5,000 $131,020
Equipment $ $400,000
Materials & Supplies $ $180,000
Contractual Services $250,000 $ $420,000
Construction Services $ $200,000
Other $10,000 $268,980
TOTALS $ $2,200,000
Allocation for grantee matching funds are still to be determined.
Applications should include a separate worksheet for each project phase (Reconnaissance, Feasibility, Design and Permitting, and Construction)
Renewable Energy Fund Grant Round IV Grant Budget Form 7-21-10
Conceptual Construction Budget- Actual Amounts will be determined. Comparable total installed cost is estimated at $2.2 million.
Milestone or Task Anticipated
Completion Date
RE- Fund
Grant
Funds
Grantee
Matching
Funds*
Source of Matching Funds:
Cash/In-kind/Federal Grants/Other
State Grants/Other
TOTALS
Confirmation that all design and feasibility
requirements are complete. TBD $20,000 TBD TBD $20,000
Completion of bid documents TBD $25,000 TBD TBD $25,000
Contractor/vendor selection and award TBD $25,000 TBD TBD $25,000
Construction Phases TBD $1,765,000 TBD TBD 1,765,000
Integration and testing TBD $150,000 TBD TBD $150,000
Decommissioning old systems TBD $150,000 TBD TBD $150,000
Final Acceptance, Commissioning and Start-up TBD $50,000 TBD TBD $50,000
Operations Reporting TBD $25,000 TBD TBD $25,000
TOTALS
Budget Categories:
Direct Labor & Benefits TBD TBD TBD TBD
Travel & Per Diem TBD TBD TBD TBD
Equipment TBD TBD TBD TBD
Materials & Supplies TBD TBD TBD TBD
Contractual Services TBD TBD TBD TBD
Construction Services TBD TBD TBD TBD
Other TBD TBD TBD TBD
TOTALS
Appendix D –Resolutions and Letters of Support
September 14, 2010
Alaska Energy Authority
Renewable Energy Fund Round IV - 2012 Funding
Review Committee
To whom It May Concern:
Working with our subsidiary, WHPacific, Inc., NANA Regional Corporation, Inc. (NANA) is proactively
pursuing and supporting renewable and alternative energy projects through the “Renewable Energy
Project” proposal for the Alaska Energy Authority (AEA).
Recent surveys of our shareholders have shown that NANA regional residents are supportive of
renewable energies as a viable alternative to fossil fuels. Affordable energy is a key component in
ensuring that our villages can create stable, sustainable economies for the shareholders of tomorrow.
Skyrocketing energy costs cause a real financial and personal burden to our shareholders. NANA is
working hard to identify ways to harness alternative and renewable energy sources to help our villages
and people cope with the current energy crisis.
NANA is committed to assisting the Northwest Inupiat Housing Authority (NIHA) to develop a design and
equipment specifications for the woody biomass energy system for the Upper Kobuk Region. The Upper
Kobuk Region includes Kobuk, Shungnak, and Ambler. NRC will help develop these projects by providing
services of Projects Manager Sonny Adams, Lands Director Abraham Snyder and Assistant Director Jeff
Nelson. The Biomass Team will be supported by senior management, the President’s office and Vice
President Lance Miller.
NANA Regional Corporation was the recipient of a forestry stewardship grant which is valued at $58,000.
NANA Regional Corporation believes that a forest management plan is an important component of our
Land and Resources Department. Furthermore, NANA Regional Corporation commissioned a $10,000
pre-feasibility assessment of woody biomass potential in the Upper Kobuk Region.
As the primary landowner of much of the forest resources in the Upper Kobuk Region, NRC will work
with NIHA and its technical team, WHPacific, and Dr. Bill Wall on the biomass energy program. NRC will
also provide access to its land for biomass feasibility study activities.
Finally, WHPacific, affiliate of NANA Regional Corporation, will be providing support services including
project/construction management, technical and planning services and procurement, as the prime
subcontractor.
NANA Regional Corporation is committed to supporting our communities and partners in their efforts at
decreasing the cost of energy for our shareholders.
Sincerely,
Lance Miller
Vice President of Resources
Appendix E – Authorized Signers Form
Appendix F – Meeting Notes and Public Education Materials
Page 1 of 4
Kobuk River Valley Biomass
Cosmos Hills Hydroelectric
C
PUBLIC MEETING MINUTES
Project Numbers: 209.538201 & 209.539301 Minutes By: Elia Sakeagak
Meeting Locations:
Ambler, 3/24/10 at 12 p.m. Shungnak, 3/24/10 at 7 p.m. Kobuk, 3/25/10 at 12 p.m.
Project team:
Name Organization
Matt Bergan WHPacific
Robin Reich Solstice Alaska Consulting Inc.
Elia Sakeagak WHPacific
William (Bill) Wall Alaska Wood Energy Associates
Brian Yanity WHPacific
MEETING NOTES:
The project team traveled to the villages of Ambler, Shungnak, and Kobuk where they conducted public
meetings. The main purpose of the meetings was to inform community members about the Upper Kobuk River
Valley Biomass Study and the Cosmos Hills Hydroelectric Feasibility Study projects. The other purposes for the
meetings were to begin gathering local knowledge about the study areas, to answer questions, and to hear any
concerns that community members may have about the projects.
Each meeting followed the same agenda. Elia S. began each meeting by inviting a local elder to open with a
prayer, which she followed with introductions of the project team members. Next, Bill Wall gave his presentation
on the Upper Kobuk River Valley Biomass project, followed by Brian Yanity’s presentation on the Cosmos Hills
Hydroelectric Feasibility Study. Each presentation was followed by a question and answer period. Toward the
end of each meeting the team invited community members up to the presentation tables where maps depicting
study areas were laid out. There community members pointed out subsistence use areas, animal migration routes,
dominant wind directions, and other miscellaneous pieces of information. Each meeting ended with a raffle
consisting of small AVEC and WHPacific items such as beanie hats, small lights, water bottles, etc.
Refreshments provided at each meeting consisted of cookies, mandarin oranges, coffee, and juice.
Generally, each village expressed positive interest in the two projects.
Ambler
The public meeting was held at the Ivisaappaat Traditional Council Community building. Seventeen people
attended the meeting, of which 7 were city or tribal council members or employees. The following table outlines
the questions, comments, or concerns that arose during and after the biomass presentation:
Table 1: Biomass presentation questions and comments in Ambler
There haven’t really been any forest fires nearby recently – they are mostly over towards Selawik.
What size boiler will be used – how big is the tank and how long will it last?
How much moisture can these systems tolerate? (Dry vs. green wood)
Once we utilize wood around our area, are there any studies to see how long it will take to grow back? We have a
short growing season. Over the past few years we have gotten little rain and snow, it seems most of that wet
weather has moved towards the Great Lakes area.
What is the displacement in gallons of a ton of wood?
Will the study consider usage of wood for homes? People already gathering wood – will that be factored in?
How much moisture content could you withstand with the wood?
September 9, 2010
2
What if snow-go haulers take trees from a certain area with slow growth? (Question about balancing potential
commercial biomass harvests with local use).
Perhaps a system like this will help take care of the beetle kill problem. (Bill asked if there is a beetle problem t o
which members said that a lot of trees are getting red. Bill noted that perhaps the trees are getting old).
Who will be responsible for forest management?
We may get a few jobs out of this, but I am worried that there may be a decrease in our independ ence – so this
may be a problem. (referring to the possibility that the project may be connected to other villages or if NANA or
other regional entities are responsible for managing systems)
Can you generate electricity from this?
How will it affect the animals? (tree harvests at this scale)
The following table outlines the questions, comments, or concerns that arose during and after the hydroelectric
presentation:
Table 2: Hydroelectric presentation questions and comments in Ambler
Will you consider studying our wind resources?
How much drop in elevation do you need?
How big of a generator is needed?
There are a lot of caribou that migrate through the Jade Creek canyon – how might they be affected?
How big would the pipe be?
What kind of pipe would you use? Welded steel? Plastic? HTP pipe is good in this area, PVC pipe pulls out –
not good.
What is the furthest north hydroelectric project?
Several creeks will be studied, but will you only install a system in 1 creek?
Seasonal – when the hydroelectric plants are shut down for winter, will there be water in the penstock pipe?
Have you investigated using in-stream hydropower turbines in this area?
River – less rain/snow - lower
River confluences – activity
If they were to start this at Jade Creek, how will we go about this with the asbestos problem? The asbestos
problem has been stalling gravel use since about 1999.
When will public involvement occur again?
Break up is anywhere from May 10 – 20, NOAA has some running data on that.
What would happen if we dam the Shungnak River? (A member explained that he walked the river before and in
some areas there are high walls on both sides of the river and where it is only 4 ft wide. He expressed his concern
about damming the river in that area and the possibility of changing the course of the river).
Here in Ambler we use about 270 kilowatts.
Shungnak River – water seeping through rock, don’t need a very big dam. It has its own mind. In the winter
there are times when there is overflow due to temperature changes, sometimes it is open, usually in the turbulent
spots.
Is there a small waterfall behind Jade mountain? Someone said there is a small waterfall back there, maybe in
June during break up, we suggest you check out that spot.
Will the study include Kogoluktuk and Shungnak River?
Have there been any studies about storing heat from the sun and wind? And from those can you create heat?
It is just a matter of educating ourselves about how to best use our resources – we can survive.
There is a little creek nearby (between airport and village) – it would be dangerous to put a dam there. When the
weather gets very cold (40 below) sometimes a big piece of ice pops up out of the creek.
The tribal entity is very interested in collaborating with other entities on renewable energy projects.
Shungnak
The public meeting was held at the Shungnak School Gymnasium. Fourteen people attended the meeting, of
which 4 were city or tribal council members or employees. During the opening Elia S. a nnounced that the project
team was looking to hire 1 or 2 snowmachines with a driver and a sled to transport team members and gear to
September 9, 2010
3
Kobuk the following morning. The following table outlines the questions, comments, or concerns that arose
during and after the biomass presentation:
Table 3: Biomass presentation questions and comments in Shungnak
How far along is the project in Ft. Yukon?
An elder explained that back in the 1940’s the school used to have a good boiler. Initially, they used coal but later
they switched to using wood. There would usually be about 150 cords of wood stacked outside the building. It
was harvested with manual saws (there were not motorized chainsaws) and axes. Usually the wood was
transported down the river, then hauled up the hill with a winch. There was a rail line alongside the hill that was
powered by a 1 cylinder engine. He also explained that a cord of wood went for about $8.
What is a cord? We use about 500 gallons of heating fuel per year – to which Bill replied that 1 cord would
displace about 90 to 100 gallons of fuel.
Would dry or wet wood be used? (Note: often times people in the area call birch “dry wood” and pine “wet
wood”.)
Who will fund this?
So who would own this and would they make a profit?
Could we use NANA Economic Development money?
If we cut here, then over there how will we be sure that there is time for trees to grow back?
(There was a native allotment concern)
There are always trees falling along the river banks, perhaps it would be useful to harvest those trees. Whoever
has the job should get those trees.
The following table outlines the questions, comments, or concerns that arose during and after the hydroelectric
presentation: (I did not take notes after Brians presentation)
Table 4: Hydroelectric presentation questions and comments in Shungnak
Kobuk
The public meeting was held at the Kobuk Traditional Council Office. Twelve people attended the meeting, of
which 9 were city or tribal council members or emplo yees. The following table outlines the questions, comments,
or concerns that arose during and after the biomass presentation:
Table 5: Biomass presentation questions and comments in Kobuk
A load of wood goes for $50 to $70.
Would we use the wood around here and not run out? Or use wood from other areas (near other villages) so we
don’t use up all the wood?
How long does it take for a tree to grow?
(Bill’s response: Big spruce is probably 100-125 years old. We would probably want to use younger trees.
Willow and cottonwood grows faster. Birch takes longer to grow).
Do they use this kind of boiler in Ft. Yukon?
Helpful definitions
Upper Kobuk River
Biomass Feasibility Study
Biomass Plant material, vegetation, or agricultural waste used as a
fuel or energy source. In this case, wood from forests.
Conceptual design A description of how a new product will work and how it will
meet its performance requirements.
District heating
system
A system that sends heat to more than one building from a
central location.
Feasibility study An evaluation of the possible impact of a planned project. Is
it technically possible? Is it doable within the estimated cost?
Will it be economic to build?
Non-renewable
energy
Energy created from fuels such as diesel, propane, gasoline,
and coal. Once they are used they are gone.
Renewable energy Energy generated from natural resources such as sunlight,
biomass, wind, rain, tides, and geothermal heat. These types
of energy resources can be naturally renewed.
Supply chain The entire process and all the resources involved in getting a
product or service from the supplier to the customer.
Vertically
integrated
A company that owns separate business lines in a complete
supply chain. For example, the company would own a wood
harvesting company, a wood yard company, and the utility
company.
For more information please contact:
Matt Bergan, WHPacific
c/o Nana Regional Corporation
P. O. Box 49, Kotzebue, AK 99752
907-442-8136
mbergan@whpacific.com
Reducing Energy Costs
Will It Work?
The cost of energy in the Upper Kobuk is
one of the highest in the nation. This
prompted NANA Regional Corporation
(NRC) and Northwest Inupiat Housing
Authority (NIHA) to examine ways to
reduce these costs. Their efforts paid off
and they received funding to prepare the
Upper Kobuk River Valley Woody
Biomass Feasibility Study.
This study will examine a wood-fired
district heating system in Ambler,
Shungnak, or Kobuk and will focus on
answering several questions.
What would be the best way to
harvest and process the wood?
Which heating system would work
best?
What type of business set-up would
work best for a wood-fired district
heating system in Northwest Alaska?
Do residents want to develop this type
of alternative energy?
What are the pros and cons of
developing a biomass projects?
How much wood could be cut without
hurting the forest?
Benefits of renewable energy
Monetary benefits
Money spent on fuel remains in
local community
Potential tax credits for utility
Local jobs
Environmental benefits
Wildfire mitigation
Habitat enhancement
Social benefits
Increase energy independence
Local ownership and control over
energy resources
Increase self-reliance