HomeMy WebLinkAboutCity of Kotzebue AEA R4 Application
Renewable Energy Fund Round IV
Grant Application
AEA 11-005 Application Page 1 of 19 7/21/2010
46Application 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 19 7/21/2010
SECTION 1 – APPLICANT INFORMATION
Name (Name of utility, IPP, or government entity submitting proposal)
City of Kotzebue
Type of Entity:
Municipality
Mailing Address
P.O. Box 46
Kotzebue, AK 99752
Physical Address
258A 3rd Avenue
Kotzebue, Alaska
Telephone
(907) 442-3401
Fax
(907) 442-3742
Email
kotzengs@otz.net
1.1 APPLICANT POINT OF CONTACT / GRANTS MANAGER
Name
Derek Martin
Title
Capital Projects Manager
Mailing Address
P.O. Box 46
Kotzebue, AK 99752
Telephone
(907)442-5200
Fax
(907)442-2155
Email
kotzengs@otz.net
1.2 APPLICANT MINIMUM REQUIREMENTS
Please check as appropriate. If you do not to meet the minimum applicant requirements, your
application will be rejected.
1.2.1 As an Applicant, we are: (put an X in the appropriate box)
An electric utility holding a certificate of public convenience and necessity under AS
42.05, or
An independent power producer in accordance with 3 AAC 107.695 (a) (1), or
X A local government, or
A governmental entity (which includes tribal councils and housing authorities);
Yes 1.2.2. Attached to this application is formal approval and endorsement for its project by
its board of directors, executive management, or other governing authority. If the
applicant is a collaborative grouping, a formal approval from each participant’s
governing authority is necessary. (Indicate Yes or No in the box )
Yes
1.2.3. As an applicant, we have administrative and financial management systems and
follow procurement standards that comply with the standards set forth in the grant
agreement.
Yes
1.2.4. If awarded the grant, we can comply with all terms and conditions of the attached
grant form. (Any exceptions should be clearly noted and submitted with the
application.)
Yes
1.2.5 We intend to own and operate any project that may be constructed with grant
funds for the benefit of the general public.
Renewable Energy Fund
Grant Application Round IV
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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)
Kotzebue Paper and Wood Waste to Energy: Feasibility Analysis and Conceptual Design
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.
Kotzebue, Alaska
2.3 PROJECT TYPE
Put X in boxes as appropriate
2.3.1 Renewable Resource Type
Wind X Biomass or Biofuels
Hydro, including run of river Transmission of Renewable Energy
Geothermal, including Heat Pumps Small Natural Gas
Heat Recovery from existing sources Hydrokinetic
Solar Storage of Renewable
X Other (Cardboard and Paper-based waste)
2.3.2 Proposed Grant Funded Phase(s) for this Request (Check all that apply)
Reconnaissance Design and Permitting
X Feasibility Construction and Commissioning
X Conceptual Design
2.4 PROJECT DESCRIPTION
Provide a brief one paragraph description of your proposed project.
The purpose of this project is to determine the feasibility of converting paper, cardboard and
other wood-based waste into thermal energy for heating the municipal water system of Kotzebue,
Alaska.
The City of Kotzebue proposes to complete a feasibility study and conceptual design for a
paper/wood waste thermal energy system. To this end, the City will study the paper/wood waste
stream in Kotzebue, environmental impacts of the combustion process, and the economics of the
process. This total project concept could be segmented into the following phases:
Phase 1. Feasibility study & conceptual design.
Phase 2. Financing and paper/wood waste collection agreements.
Phase 3. Permitting, design and engineering.
Phase 4. Construction.
Phase 5. Operations and maintenance.
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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 financial benefits of the project include the following:
Reduced Cost of Water/Sewer Utilities. City of Kotzebue customers may see reduced
utility costs through lower heating costs associated with operating the municipal water
system.
Avoided Cost of Kotzebue Landfill /Expansion Upgrade. The need to expand the
Kotzebue landfill is imminent, but can be delayed by reducing the amount waste entering
the landfill. The study will determine how much longer the existing landfill useful life
can be extended.
Reduced Site Development and Construction Costs. All waste generated in Kotzebue
is brought to the City of Kotzebue baler building where it is compacted, baled and sealed
in plastic. City land is available adjacent to the bailer building where the paper/waste
stream can be segregated for conversion to heat. The heat can then be piped to the water
treatment plant located within 500ft. A new water treatment plant is planned for the
vicinity as well.
The public benefits of the project include the following:
Jobs Creation. Additional workforce will be need to collect and process the wood/paper
waste. Costs previously associated with purchasing the heating fuel could now go to
wages for the operation and maintenance of the conversion process.
An “eco-conscious” community. The City of Kotzebue presently heats a portion of the
municipal water system with secondary heat from the Kotzebue Electric Association
powerplant (Denali Commission Project #403020). The remaining portion of the heating
needs of the municipal water system could come from the conversion of paper/wood
waste to thermal energy. In particular the raw water supply from Devil’s Lake needs to
be heated prior to the chemical treatment process. The raw water is presently heated with
fuel oil. Paper/wood derived heat can reduce or eliminate the need for heat diesel fuel
heating. Diesel fuel would become a standby energy source to the wood/paper waste and
the KEA heat.
Other Benefits to the Alaskan public will also exist. An important benefit of installing the
proposed paper/wood energy conversion system would be to reduce the direct and indirect costs
of using fossil fuels in the region. This project could help stabilize energy costs and provide
long-term socio-economic benefits to businesses and households. Locally produced, affordable
energy will empower community residents and may help avert rural to urban migration. This
project would have many environmental benefits resulting from a reduction of hydrocarbon use.
These benefits include:
Reduced potential for fuel spills or contamination during transport, storage, or use (thus
protecting vital water and subsistence food sources);
Application of the study results to other communities in Rural Alaska.
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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.
This feasibility analysis and conceptual design phase is estimated at $94,250 of which $85,000 is
requested in grant funds. The remaining $9,250 will be matched in staff labor by the City of
Kotzebue. The entire project, through the construction phase, is estimated to cost approximately
$2,000,000 in the following 4 phases with potential sources of funding or financing:
1) Feasibility analysis, resource assessment, and conceptual design $93,000 (AEA-R4)
2) Planning, permitting, and design $100,000 (Denali Commission)
3) Equipment Procurement and General Construction $1.7M (USDA/AIDEA)
The overall project has two areas of concentration: paper/wood waste collection and energy
conversion.
Waste Paper/wood waste collection and processing
Successful conversion of Kotzebue’s paper and wood waste to useful thermal energy begins at
the waste generator end. The major commercial and non-profit entities in Kotzebue will need to
consciously segregate paper waste to separate containers for collection by the City. Some
entities already do this and have compacted, bales of cardboard ready for pick-up by the City
(Alaska Commercial Company for example). Special or dedicated trucks may be needed by the
City to retrieve the paper waste from major generators and also “clean” (lacking nails, oils,
paints, etc) wood from worksites and residents.
Retrieved paper and wood waste will need to then prepared for burning once back at the City
facility. The type of energy conversion equipment selected will determine how the paper/wood
“fuel” will need to be prepared: i.e. shredded, ground or “briquetted” possibly.
Waste Paper/wood energy conversion
Specialized equipment will be needed to process or prepare the waste paper/wood fuel.
“Briquetting” is one process that is being evaluated in the Bethel area and will be evaluated for
Kotzebue. A grinder or shredder unit may be another type of processing that will work to
prepare the paper/wood waste for the combustion process. This study will evaluate the different
types of equipment and which is best suited for the Kotzebue biomass derived waste-stream.
Once the paper/wood is prepared it will be converted to heat in a boiler or incinerator unit.
There are many types and sizes of equipment for this purpose that will need to be evaluated.
Combustion efficiency and particulate emissions control from the burner unit will be closely
evaluated. The facility to house the burner unit(s) and hydronic system piping will also be
considered as part of this phase of the study.
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Grant Application Round IV
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2.7 COST AND BENEFIT SUMARY
Include a summary of grant request and your project’s total costs and benefits below.
Grant Costs
(Summary of funds requested)
2.7.1 Grant Funds Requested in this application. $ 85,000
2.7.2 Other Funds to be provided (Project match) $ 9,250
2.7.3 Total Grant Costs (sum of 2.7.1 and 2.7.2) $ 94,250
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)
$ 2,500,000
2.7.5 Estimated Direct Financial Benefit (Savings) To be determined
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.)
To be determined, based on
avoided fuel costs, landfill
expansion costs and jobs
created.
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Grant Application Round IV
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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.
The City of Kotzebue will provide overall project management and oversight.
Derek Martin, Capital Projects Manager, will take the lead role as project manager. He has
worked for the City of Kotzebue since 2005, where he manages the development of
infrastructure improvement projects.
3.2 Project Schedule
Include a schedule for the proposed work that will be funded by this grant. (You may include a
chart or table attachment with a summary of dates below.)
The project’s seven key milestones or tasks, and their subtasks, are listed below with
estimated completion dates (by task or subtask if subtasks are spread over more than one
month):
1. Project scoping and contractor solicitation: September 2011
AEA project authorization: September 1, 2011
Engineering contract notice to proceed: October 1, 2011
2. Detailed paper and wood waste-stream resource analysis: October 2011-Feb 2012
Paper/cardboard waste quantification summary: March 1, 2012
“Clean” wood waste quantification summary: March 1, 2012
3. Paper and wood waste processing/burning equipment options analysis: March-May 2012
Recommended equipment Memorandum: June 1, 2012
4. Permitting and environmental analysis: June-July 2012
Environmental and Permitting Memorandum: August 1, 2012
5. Conceptual design and ROM cost estimate: August 2012
Conceptual Design and Cost Estimate: September 1, 2012
6. Economic and financial analysis: August-October 2012
Economic Feasibility Report: November 1, 2012
7. Final project report and recommendations: November 2012
Final Combined Report: December 1, 2012
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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.)
To determine the viability of heating City water with paper and wood waste, the project will
implement the following milestones:
1. Project scoping and contractor solicitation (September 1-September 30, 2011)
The City of Kotzebue will select an engineering contractor to accomplish the feasibility study
and conceptual design immediately following AEA’s authorization to proceed.
2. Detailed paper and wood waste-stream resource analysis (October 1-February 28, 2012)
A thorough analysis of the paper and wood waste generated in Kotzebue will be be conducted to
determine the quantity and heating value of “fuel” available for conversion to heat. The analysis
will consider the amount paper/wood waste being generated at present and how much more
could be collected through paper waste segregation methods at the customers business-place.
Wood waste generated by construction projects and residential waste will also be quantified and
analyzed to determine the content of pollutants and non-combustibles (nails, metal, wire, etc.).
3. Paper and wood waste processing/burning equipment options analysis (March 1, 2012-
May 31, 2012)
Appropriate equipment for collecting, handling, preparing (possibly “briquetting”) and burning
the paper/wood waste will investigated.
4. Permitting and environmental analysis (June 1, 2012-July 31, 2012)
The City of Kotzebue will discuss the project with regulatory agencies to determine permitting
requirements. Needed permits and any special studies (i.e., bird studies) will be documented in a
memorandum.
5. Conceptual design and ROM cost estimate (August 1-31, 2012)
A conceptual design and cost estimate will be prepared for the preferred equipment and site
option.
6. Economic and financial analysis (August 1-October 31, 2012)
An economic and financial analysis which examines potential final design and construction
costs, operating and maintenance costs and funding mechanisms will be developed.
7. Final project report and recommendations (November 1-30, 2012)
All of the memoranda and reports written for the project will be combined in a final report and
submitted to AEA.
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
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you may use for major equipment purchases or contracts. Include brief resumes and references
for known, key personnel, contractors, and suppliers as an attachment to your application.
The City of Kotzebue will use a team of City staff and external consultants. City of Kotzebue
staff and their role on this project includes the following:
Rick Hohnbaum, City Manager, will act as Project Executive and will maintain ultimate
authority programmatically and financially.
Derek Martin, City Capital Projects Manager, will be the project manager. Specific duties
of the project manager will include the following:
Coordination with City staff for collection of energy and financial data for use in
the feasibility report.
Selecting, coordinating, and managing the engineering consultant.
Communicating with Kotzebue residents to ensure that the community is
informed.
Ryan Cope, Finance Director, will provide support in accounting, payables, financial
reporting, and capitalization of assets in accordance with AEA guidelines.
Ernie Hyatt, City of Kotzebue Refuse Department Manager and 14 year City Employee,
will be a key information source and will help in collection of paper and cardboard waste
data.
Contractors for this project will include the following:
o Engineering consultant. The City of Kotzebue will employ an engineering
consultant who will assist in all milestones on the project.
Selection Process for Contractors: The engineering consultant selection will be based upon
technical competencies, past performance, written proposal quality, cost, and general consensus
from the technical steering committee. The selection of the consultant will occur in strict
conformity with municipal procurement policies, conformance with OMB circulars, and DCAA
principles.
3.5 Project Communications
Discuss how you plan to monitor the project and keep the Authority informed of the status.
The City of Kotzebue has assigned Derek Martin as project manager for project who will
compile periodic progress reports for use by the Alaska Energy Authority. Monthly project
coordination meetings will be held with the project team to track progress and address issues as
they arise.
3.6 Project Risk
Discuss potential problems and how you would address them.
At the feasibility and conceptual design phase of the project there is negligible risk.
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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.
The proposed energy source is biomass derived waste products consisting of:
1) Business and education generated paper.
2) Store generated cardboard shipping waste.
3) Household generated cardboard and paper waste.
4) Construction and residentially generated wood waste (dimensional lumber, pallets,
plywood, logs/brush, etc).
Previous estimates by the City of Kotzebue indicate that roughly 5-8 tons of paper waste are
generated per day in Kotzebue. Through public education efforts and potential financial
incentives the paper/cardboard waste-stream can be increased.
Positive aspects of use of the biomass-derived waste-stream for heating include:
1) Increased landfill life. Presently 75% of the waste being placed at the Kotzebue landfill is
biomass derived, combustible waste. The City of Kotzebue landfill is filling at rate that
will require construction of additional space in approximately 10-15 years. Rough costs
of increasing the landfill size are unknown. If the combustible paper/wood waste stream
can be diverted to heating purposes the life of the existing landfill can be extended
2) Reduced City heating fuel consumption. Less fuel will need to be purchased and stored
by the City for water heating purposes. Fuel savings of roughly 100,000 gallons may be
achieved.
3) Job Creation. Funds previously used for the purchase of heating fuel for water heating
can be diverted to the operations and maintenance of the paper/wood heating system.
Several new jobs may be created for the process.
Adverse aspects of the use of biomass-derived waste-stream for heating include:
1) Air pollution generation and ash issues.
2) Social concerns regarding burning “trash” and any odors that may be produced.
Heating fuel is the primary source of heat Kotzebue and has become the accepted means of
heating spaces and water. Air pollution from burning heating fuel is accepted as a necessary by
product of a comfortable environment. This project will seek to determine a means of providing
heat to offset heating fuel derived heat in an environmentally and socially acceptable manner.
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4.2 Existing Energy System
4.2.1 Basic configuration of Existing Energy System
Briefly discuss the basic configuration of the existing energy system. Include information about
the number, size, age, efficiency, and type of generation.
Two 1.5 MMBtu/hr oil fired boilers currently heat the City raw and treated water systems. Jacket
water secondary heat from the Kotzebue Electric Association power plant also provides heat to
the treated water system. The boilers are approximately 20 years old.
A new water treatment plant adjacent to the existing plant is planned for construction in the next
5-7 years.
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.
Diesel fuel burned in diesel generator sets and boilers is the single source of energy used for
heating water in the City of Kotzebue water system.
Two 1.5MMBtu/hr oil-fired boilers at the City water treatment plant provide heat through heat
exchangers to warm and maintain water temperatures in the treated water and raw water systems.
The boilers also proved space heating to the water treatment facility.
The City of Kotzebue also purchases heat from the local power company Kotzebue Electric
Association (KEA). The City “Lagoon Loop” water main absorbs heat from the KEA generator
jacket water system and then spread the heat to the other loops in Kotzebue. KEA has sold heat
energy to the City of Kotzebue for several years, thus keeping dollars in the community.
Impacts to existing infrasture would be minimal. Oil fired boilers would remain intact and in a
standby/back-up state. Primary heat would from the KEA heat system and the biomass-derived
combustion system.
4.2.3 Existing Energy Market
Discuss existing energy use and its market. Discuss impacts your project may have on energy
customers.
Crowley Marine Services is the sole supplier of diesel fuel to Kotzebue and surrounding villages.
The cost of diesel fuel rises and falls based on world market prices. As the sole provider of fuel
to the region there is not a “competitor” to help drive fuel costs down.
By utilizing less diesel fuel and using it as a secondary source, the City of Kotzebue is less
susceptible to world oil cost fluctuations. There are no impacts to local energy customers.
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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
Biomass-derived solid waste (biogenic municipal solid waste). The City of Kotzebue plans to
conduct a Feasibility Analysis and Conceptual Design to assess the possibility of heating the City
water system with biomass-derived solid waste.
Optimum installed capacity/Anticipated capacity factor/Anticipated annual generation. The
purpose of this work is to gather background information to plan a future biomass waste to energy
facility. The capacity is unknown at this time.
Anticipated barriers. The potential barriers to success of this project include permitting and
public concerns The barriers are minor and do not pose a threat to the completion of this project
or tasks which must be accomplished for this grant application.
Basic integration concept/Delivery methods. Conceptual design, to be completed as a part of
this project, will detail how heat from the biomass waste to energy plant would be integrated and
delivered into the existing system. If the biomass waste-stream is suitable for development, the
biomass-waste to energy plant will interconnect with the water treatment plant hydronic boiler
system or be dedicated to the raw water feed to the water treatment system.
4.3.2 Land Ownership
Identify potential land ownership issues, including whether site owners have agreed to the
project or how you intend to approach land ownership and access issues.
The City of Kotzebue is the land owner for the potential project 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
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Identify and discussion of potential barriers
Milestone #4 of this project will determine what permits may be needed if the project does go
forward with construction. An EPA/DEC air permit may be the significant permit to be acquired
for the system to operate.
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
The purpose of this work is to gather background information to plan for a potential biomass-
derived waste to energy plant. Compliance with the Endangered Species Act will be needed. Also
a U.S. Army Corps of Engineers Wetlands Nationwide Permit may be needed to conduct
geotechnical work, depending on if the work is located within wetlands. Further work to comply
with other environmental laws, including the National Environmental Policy Act (if federal
funding is sought for construction), the Clean Water Act (for work in wetlands), and the National
Historic Preservation Act, would be conducted during the next stage of development, if the
economics and waste-stream resource are suitable for moving forward with the installation of
plant.
Environmental Review and Due Diligence Approach. City of Kotzebue’s consultant will
organize a pre-application meeting to be coordinated with the ADNR, OC&OM office for the
project. All agencies, including federal agencies, will be asked to participate. The meeting will
identify and discuss appropriate permit issues and provide agency perspective on the proposed
development. Discussions will include actions to avoid, minimize, and mitigate wetlands impacts.
Possible compensation for wetlands loss will also be discussed. Preliminary concerns for impacts
to the National Preserve and possible cultural sites will be identified. Results of this agency pre-
application meeting will be a 3-5 page meeting report summarizing agency concerns, issues, and
possible mitigation or compensation proposals. This will be as comprehensive as possible but
may not identify all permits required for project development given the preliminary nature of the
development proposal.
The following permits and/or authorizations may be necessary for installation of a thermal
energy plant:
USACE Section 404/401 Wetlands Permit and Water Quality Assurance
ADNR, OC&OM Coastal Zone Consistency Determination
Title 16 Fish Habitat Permit
SHPO “No Historic Properties Affected”
Storm Water Pollution Prevention Plan
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Alaska Pollutant Discharge Elimination System
Vegetation Clearing Not Permitted between May 20 and July 20, except for black scoter
habitat where the end of the avoidance period is August 10
4.4 Proposed New System Costs and Projected Revenues
(Total Estimated Costs and Projected Revenues)
The level of cost information provided will vary according to the phase of funding requested and
any previous work the applicant may have done on the project. Applicants must reference the
source of their cost data. For example: Applicants Records or Analysis, Industry Standards,
Consultant or Manufacturer’s estimates.
4.4.1 Project Development Cost
Provide detailed project cost information based on your current knowledge and understanding of
the project. Cost information should include the following:
Total anticipated project cost, and cost for this phase
Requested grant funding
Applicant matching funds – loans, capital contributions, in-kind
Identification of other funding sources
Projected capital cost of proposed renewable energy system
Projected development cost of proposed renewable energy system
The City of Kotzebue plans to conduct a Feasibility Analysis and Conceptual Design to assess the
possibility of producing heat from biomass-derived municipal solid waste in Kotzebue. This work
will cost $94,250. The City requests $85,000 from AEA. The City intends to contribute $9,250 of
staff time to the project as an in-kind match.
If the biomass waste-stream and economics prove suitable, the next phase of this project would be
Final Design and Permitting. Although it is difficult to determine the scale and scope of the
project at this point a Final Design and Permitting phase would cost roughly $100,000. It is
possible that the funding for this work could come from the AEA Renewable Energy Program,
the Denali Commission Solid Waste Program, a USDA Rural Utility Service program, or another
grant program.
The final phase of this project would be Construction and Commissioning. A rough estimate is
that this phase could cost $2,000,000. It is possible that the funding for this work could come
from the AEA Renewable Energy Program, the Denali Commission, AIDEA, a USDA Rural
Utility Service program, or another grant program.
4.4.2 Project Operating and Maintenance Costs
Include anticipated O&M costs for new facilities constructed and how these would be funded by
the applicant.
(Note: Operational costs are not eligible for grant funds however grantees are required to meet
ongoing reporting requirements for the purpose of reporting impacts of projects on the
communities they serve.)
No O&M costs are anticipated for this study project.
Renewable Energy Fund
Grant Application Round IV
AEA11-005 Grant Application Page 16 of 19 7/21/2010
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
At this point in project development, the potential power price and rate of return on the project is
unknown.
4.4.4 Project Cost Worksheet
Complete the cost worksheet form which provides summary information that will be considered
in evaluating the project.
See attached.
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
Potential Fuel Displacement: The possible displacement of diesel fuel used for municipal water
heating in Kotzebue will be determined. The exact amount of fuel displacement at this point in
the project is not known.
Anticipated annual revenue/Potential additional annual incentives/Potential additional
annual revenue streams. Because this project is in the feasibility and concept design stage,
revenue and incentives are unknown.
Non-economic public benefits. An “eco-conscious” community. The City of Kotzebue
presently heats a portion of the municipal water system with secondary heat from the Kotzebue
Electric Association powerplant generators (Denali Commission Project #403020). The
remaining portion of the heating needs of the municipal water system could come from the
conversion of paper/wood waste to thermal energy. In particular the raw water supply from
Devil’s Lake needs to be heated prior to the chemical treatment process. The raw water is
presently heated with fuel oil. Paper/wood derived heat can reduce or eliminate the need for heat
Renewable Energy Fund
Grant Application Round IV
AEA11-005 Grant Application Page 17 of 19 7/21/2010
diesel fuel heating. Diesel fuel would become a standby energy source to the wood/paper waste
and the KEA heat.
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
Business plan structures and concepts which may be considered: The biomass-waste plant
would be incorporated into City of Kotzebue’s water plant operation. Local plant operators
provide daily servicing. City technicians provide periodic preventative or corrective maintenance
and are supported by City Public Works staff, purchasing, and warehousing.
How O&M will be financed for the life of the project: The costs of operations and maintenance
will be funded through ongoing municipal service sales to the community (water, sewer, trash
collection, sales tax).
Operational issues which could arise: TBD (to be determined).
Operating costs: TBD.
Commitment to reporting the savings and benefits: The City of Kotzebue is fully committed to
sharing the savings and benefits information accrued from this project with other communities and
AEA.
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.
In recent years, the City of Kotzebue has explored various means of reducing the amount of waste
generated by the community and the amount going to the landfill. This includes:
1) Burning wood waste materials in-situ by the Kotzebue Fire Department.
2) Raising refuse collection fees for commercial customers.
3) City of Kotzebue AEA RE Fund Round II application for conversion of municipal solid
waste to electricity with the “TGER” system (not funded).
Work can proceed immediately on this feasibility and conceptual design project.
No other grants have been awarded on this project. This feasibility study and conceptual design
will combine the knowledge gained in other Alaskan communities with biomass waste conversion
(Swanson’s store in Bethel) to determine the best means of developing an economically and
Renewable Energy Fund
Grant Application Round IV
AEA11-005 Grant Application Page 18 of 19 7/21/2010
environmentally feasible biomass waste to thermal energy plant in Kotzebue, Alaska.
SECTION 8– LOCAL SUPORT
Discuss what local support or possible opposition there may be regarding your project. Include
letters of support from the community that would benefit from this project.
The City of Kotzebue has not faced any opposition to the project at this stage of resource
identification. This feasibility study and conceptual design project will examine what opposition
and support there is for a constructed project. The City of Kotzebue will conduct community
meetings in conjuction with the City of Kotzebue recycling Committee to gauge opposition and
support of the proposed concept. The City of Kotzebue is committed to ensuring a positive
process as well as an effective outcome.
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
The City of Kotzebue plans to conduct a Feasibility Analysis, Biomass-derived Waste Resource
Assessment, and Conceptual Design to assess the possibility of producing thermal energy from
the biogenic municipal solid waste. This work will cost $94,250. The City requests $85,000 from
AEA. The City will contribute $9,250 of staff time toward the project as an in -kind match. The
detail of the grant budget follows:
Milestone
Grant
Request
City
In-kind
Match Total Cost
1. Project development, scoping and contractor solicitation $0 $5,000 $5,000
2. Detailed paper/wood resource analysis $10,000 $500 $10,500
3. Assessment of equipment alternatives $10,000 $500 $10,500
4. Permitting and environmental analysis $5,000 $250 $5,250
5. Conceptual design and ROM cost estimate $20,000 $1000 $21,000
6. Economic and financial analysis $20,000 $1000 $21,000
7. Final report and recommendations $20,000 $1,000 $21,000
TOTALS $85,000 $9,250 $94,250
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. 5-8 Tons of paper/wood waste per day
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 2
ii. Rated capacity of generators/boilers/other Approx 2,000,000 Btu/hr
iii. Generator/boilers/other type Oil-fired boiler
iv. Age of generators/boilers/other Approx 20 years old
v. Efficiency of generators/boilers/other ~ 80%
b) Annual O&M cost (if system is part of the Railbelt grid, leave this section blank)
i. Annual O&M cost for labor This will be determined during the feasibility phase.
ii. Annual O&M cost for non-labor This will be determined during the feasibility phase.
c) Annual electricity production and fuel usage (fill in as applicable) (if system is part of the
Railbelt grid, leave this section blank)
i. Electricity [kWh] n/a
ii. Fuel usage
Diesel [gal]
Other
iii. Peak Load
iv. Average Load
v. Minimum Load
vi. Efficiency
vii. Future trends
d) Annual heating fuel usage (fill in as applicable)
i. Diesel [gal or MMBtu] Approx 100,000 gal. This will be determined during study.
ii. Electricity [kWh]
iii. Propane [gal or MMBtu]
iv. Coal [tons or MMBtu]
v. Wood [cords, green tons, dry tons]
vi. Other Better insulated water mains are decreasing water
heating load
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
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]
ROM 3,000,000 Btu/hr paper/wood waste hydronic boiler
system
b) Proposed annual electricity or heat production (fill in as applicable)
i. Electricity [kWh]
ii. Heat [MMBtu] 10,000,000,000 – 16,000,000,000 Btu per year
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]
iv. Other 1,000-1,500 tons of paper/wood waste per year
4. Project Cost
a) Total capital cost of new system $2.0 - 2.5 million
b) Development cost Approx $190,000
c) Annual O&M cost of new system To be determined
d) Annual fuel cost To be determined
5. Project Benefits
a) Amount of fuel displaced for
i. Electricity 0
ii. Heat Approx 100,000 gallons (to be determined by this study)
iii. Transportation To be determined
b) Current price of displaced fuel Heating fuel: Approx $5.00/gal
c) Other economic benefits This will be determined during the feasibility phase.
d) Alaska public benefits This will be determined during the feasibility phase.
6. Power Purchase/Sales Price
a) Price for power purchase/sale This will be determined during the feasibility phase.
7. Project Analysis
a) Basic Economic Analysis
Project benefit/cost ratio This will be determined during the feasibility phase.
Payback (years) This will be determined during the feasibility phase.
Renewable Energy Fund Grant Round IV Grant Budget Form 7-21-10
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
1. Project development, scoping, and contractor
solicitation October 1, 2011 $0 $5,000 In-kind $5,000
2. Detailed paper/wood resource analysis
September 30,
2012 $10,000 $500
In-kind
$25,500
3. Assessment of equipment alternatives January 31, 2012 $10,000 $500 In-kind $2,750
4. Permitting and environmental analysis January 31, 2012 $5,000 $250 In-kind $8,000
5. Conceptual design analysis and cost estimate March 30, 2012 $20,000 $1,000 In-kind $5,500
6. Detailed economic and financial analysis June 30, 2012 $20,500 $1,000 In-kind $8,250
7. Final report and recommendations August 30, 2012 $20,000 $1,000 In-kind $5,750
TOTALS $85,000 $9,250 $94,250
TOTALS $
Budget Categories:
Direct Labor & Benefits $ $9,250 In-kind $9,250
Travel & Per Diem $ $ $
Equipment $ $ $
Materials & Supplies $ $ $
Contractual Services $85,000 $ $85,000
Construction Services $ $ $
Other $ $ $
TOTALS $85,000 $9,250 $94,250
Applications should include a separate worksheet for each project phase (Reconnaissance, Feasibility, Design and Permitting, and Construction)-
Add additional pages as needed
Renewable Energy Fund Grant Round IV Grant Budget Form 7-21-10
Project Milestones that should be addressed in Budget Proposal
Reconnaissance Feasibility Design and Permitting Construction
1. Project scoping and
contractor solicitation.
2. Resource identification and
analysis
3. Land use, permitting, and
environmental analysis
5. Preliminary design analysis
and cost
4. Cost of energy and market
analysis
5. Simple economic analysis
6. Final report and
recommendations
1. Project scoping and contractor
solicitation.
2. Detailed energy resource
analysis
3. Identification of land and
regulatory issues,
4. Permitting and environmental
analysis
5. Detailed analysis of existing
and future energy costs and
markets
6. Assessment of alternatives
7. Conceptual design analysis
and cost estimate
8. Detailed economic and
financial analysis
9, Conceptual business and
operations plans
10. Final report and
recommendations
1. Project scoping and contractor
solicitation for planning and
design
2. Permit applications (as
needed)
3. Final environmental
assessment and mitigation
plans (as needed)
4. Resolution of land use, right of
way issues
5. Permit approvals
6. Final system design
7. Engineers cost estimate
8. Updated economic and
financial analysis
9. Negotiated power sales
agreements with approved
rates
10. Final business and operational
plan
1. Confirmation that all design
and feasibility requirements
are complete.
2. Completion of bid documents
3. Contractor/vendor selection
and award
4. Construction Phases –
Each project will have unique
construction phases, limitations,
and schedule constraints which
should be identified by the
grantee
5. Integration and testing
6. Decommissioning old
systems
7. Final Acceptance,
Commissioning and Start-up
8. Operations Reporting
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 pro-
actively 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 region 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 City of Kotzebue to complete a feasibility study and
conceptual design for a paper/wood waster thermal energy system.
Sincerely,
Lance Miller
Vice President of Resources