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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. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 3 of 25 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) 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. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 4 of 25 7/21/2010 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 Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 5 of 25 7/21/2010 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 Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 6 of 25 7/21/2010 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 Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 7 of 25 7/21/2010 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 Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 8 of 25 7/21/2010 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. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 9 of 25 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. 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 Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 10 of 25 7/21/2010 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. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 11 of 25 7/21/2010 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. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 12 of 25 7/21/2010 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. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 13 of 25 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. 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 Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 14 of 25 7/21/2010 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. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 15 of 25 7/21/2010 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 Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 16 of 25 7/21/2010 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. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 17 of 25 7/21/2010 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. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 18 of 25 7/21/2010 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 Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 19 of 25 7/21/2010 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 Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 20 of 25 7/21/2010 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 Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 21 of 25 7/21/2010 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 Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 22 of 25 7/21/2010 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 Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 23 of 25 7/21/2010 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 Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 24 of 25 7/21/2010 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. Renewable Energy Fund Round 4 Project Cost/Benefit Worksheet 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 Renewable Energy Fund Round 4 Project Cost/Benefit Worksheet 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