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Renewable Energy Fund Round IV
Grant Application
AEA 11-005 Application
Kenai Winds Expansion Project
Response to Request for Grant Applications
AEA-11-005
Kenai Winds LLC
C/O Apex Wind Energy
40 Garden St. Suite 203
Poughkeepsie, NY 12501
845.473.0311 phone
845.473.0335 fax
josh@apexwind.com
September 15, 2010
Mr. Butch White
Alaska Energy Authority
813 West Northern Lights Blvd
Anchorage, AK 99503
Dear Mr. White:
Please find enclosed the request for grant funding for the Kenai Winds Expansion Project
under the AEA’s Renewable Energy Grant Recommendation Program Round IV. The enclosed
grant is for the construction and commissioning (Phase IV) of Alaska’s first commercial wind
energy facility. The many public benefits of the Kenai Winds power facility are familiar to AEA
as it has been previously been awarded grants under Rounds I, II, and III of the Renewable
Energy Grant Program (though Round III funding was cut by the Governor). These funds have
been used to develop a 10 MW facility. During its PPA negotiations, Homer Electric
Association had requested that Kenai Winds expand to a 15 MW facility as part of their post-
2014 strategic operating plan. The project size remains at 15MW now that Kenai Winds is in
discussion with Chugach Electric on power sales. The funds requested in this application will
be used in the construction phase of the wind farm expansion.
As illustrated in the application, the Kenai Winds project is enthusiastically supported by Kenai
Peninsula residents. This ‘shovel-ready’ project is ideally situated to help them through a
period of economic downturn that began with insufficient natural gas resources needed to
support commercial industries. This project will increase the energy security of all South-
Central Alaskan residents by displacing natural gas that would otherwise be used for power
generation. Additionally the project will result in reduced greenhouse gas emissions as well as
increased stability and reliability of the HEA and CEA power grids which will improve the
operational safety of the Nikiski industrial corridor. The local highly skilled Alaskan workforce
will transition from applying skills in traditional carbon-based industry applications to the
expanding wind energy industry. The enclosed application also illustrates that this project is
well defined and designed, well financed, expertly project managed, on track to be completed,
and in the vernacular “has legs” and incentive to be operational in 2011.
In summary, this grant will support a power generation project that will result in construction of
a safe, reliable, and efficient Southcentral Alaska energy system that is sustainable and
environmentally sound.
Please do not hesitate to contact me at if you need any more information.
Sincerely,
Josh Berkow
Project Manager
Apex Wind Energy
Renewable Energy Fund
Grant Application Round IV
AEA11-005 Grant Application
Table of Contents
Grant Application
Section 1 – Applicant Information 1
Section 2 – Project Summary 2
Section 3 – Project Management Plan 7
Section 4 – Project Description and Tasks 13
Section 5 – Project Benefit 28
Section 6 - Sustainability 32
Section 7 – Readiness and Compliance with Other Grants 33
Section 8 – Local Support 33
Section 9 - Grant Budget 35
Kenai Winds Benefit Cost Worksheet Round 4 37
Kenai Winds Grant Budget Worksheet Round 4 39
Kenai Winds Authorized Signers Form 40
Appendices –
A Apex Wind Energy Resumes 41
B Project Schedule 59
C Potential EPC Contractor Statement of Qualifications 66
D Interconnection Requirements Study 84
E HEA Letter of Support 109
F Meteorological Study 111
G Kenai Winds Project Layout 114
H Coastal Zone Mgmt Statement of Project Consistency 116
I Southfork LLC Petition for/Grant of Exclusion from AS 42. 121
J FAA Determination of No Hazard to Air Navigation 127
K Letter of Kenai Winds Project Support from KPB Mayor 130
L Letter of Kenai Winds Project Support from Chugach Electric 132
M Letter of Kenai Winds Project Support from Tesoro Senior Management 134
N KPB Assembly Resolution Concerning Climate Change 136
O KPB Assembly Resolution Concerning Greenhouse Gas Emission Reduction 139
P Letter of Kenai Winds Project Support
from Co-Chair of AK House Finance Committee
142
Q Corporate Authorization Letter 144
R Electrical One-Line Diagram 146
S USFWS Avian Mortality Fact Sheet 148
T USFWS Guidance to Kenai Winds 151
U Avian Mortality Report by WEST, Inc. 157
V Wind and Property Values Report 165
Renewable Energy Fund
Grant Application Round IV
AEA11-005 Grant Application
SECTION 1 – APPLICANT INFORMATION
Name (Name of utility, IPP, or government entity submitting proposal)
Kenai Winds LLC
Type of Entity:
Delaware Limited Liability Company, Registered in Alaska as a Foreign Limited Liability Company
Mailing Address
Kenai Winds c/o Apex Wind Energy
40 Garden St. Suite 203
Poughkeepsie, NY 12601
Physical Address
Kenai Winds c/o Apex Wind Energy
40 Garden St. Suite 203
Poughkeepsie, NY 12601
Telephone
(845) 473-0311
Fax
(845) 473-0335
Email
josh@apexwind.com
1.1 APPLICANT POINT OF CONTACT / GRANTS MANAGER
Name
Josh Berkow
Title
Project Manager
Mailing Address
Apex Wind Energy
40 Garden St. Suite 203
Poughkeepsie, NY 12601
Telephone
(845) 473-0311
Fax
(845) 473-0335
Email
josh@apexwind.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
X An independent power producer in accordance with 3 AAC 107.695 (a) (1), or
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.
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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)
Kenai Winds Expansion
2.2 Project Location –
Include the physical location of your project and name(s) of the community or communities that will
benefit from your project.
The Kenai Winds power plant will be located in the Nikiski industrial area on the Kenai
peninsula. The physical location is in the vicinity of milepost 21-23 on the Kenai Spur Hwy. The
stability of power supply will benefit the west and mid-peninsula communities served by Homer
Electric (Nikiski, North Kenai, Kenai, and Soldotna) and specifically, the industrial district of
Nikiski, the hundreds of residents directly employed by said industry, and the thousands of jobs
indirectly supported by that industry. Additional benefits will accrue to those served by Chugach
Electric Association which currently dispatches the generation resources for HEA. Kenai Winds
LLC power facility is ideally situated on the railbelt grid near the large and constant industrial
electrical loads required by an operating oil refinery, liquefied natural gas plant, 3 operating
docks, and a multiproducts pipeline.
2.3 PROJECT TYPE
Put X in boxes as appropriate
2.3.1 Renewable Resource Type
X Wind Biomass or Biofuels
Hydro, including run of river Transmission of Renewable Energy
Geothermal, including Heat Pumps Small Natural Gas
Heat Recovery from existing sources Hydrokinetic
Solar Storage of Renewable
Other (Describe)
2.3.2 Proposed Grant Funded Phase(s) for this Request (Check all that apply)
Reconnaissance Design and Permitting
Feasibility X Construction and Commissioning
Conceptual Design
2.4 PROJECT DESCRIPTION
Provide a brief one paragraph description of your proposed project.
Kenai Winds LLC has received AEA support to develop and erect a 10 MW wind energy facility
located in the Nikiski industrial area on the Kenai Peninsula. Through prior discussions with
Homer Electric Association, the project size is being increased to 15MW. This proposal is
submitted to secure funding needed for the expansion. The facility will consist of 5 to 10 wind
turbines disbursed throughout the site, electrically interconnected to either HEA’s Nikiski
substation or Chugach Electric Association’s Bernice Lake substation. The project will sell its
electrical output to CEA. Letters of support from HEA and CEA are including in Appendix E
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and Appendix L.
Kenai Winds LLC was included on the Round III renewable energy projects approved by the
Alaska state legislature for funding. Due to budget cuts, those funds were not received. This
application will help restore funding which will directly result in lower power price to the Alaska
ratepayer.
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.)
Financial and public benefits that will result from the Kenai Winds Expansion include a)
immediate improvement of the energy security of Southcentral Alaska, b) immediate albeit
temporary construction employment in the hard-hit Nikiski industrial zone, c) long-term benefits
of a more stable electrical grid which directly impacts consumer safety and preserves jobs, d)
long-term benefits related to retraining a workforce with on the job experience in the expanding
wind industry e) long-term benefits related to decreasing green house gas emissions. The
expansion of the wind power plant from 10 to 15 MW will increase the magnitude of the benefits
cited above.
Improved Energy Security of Southcentral Alaska: Expansion of the Kenai Winds facility will
increase the energy security of Southcentral Alaska residents by conserving the equivalent
natural gas requirement needed to produce 15 MW of electrical power precisely when the natural
gas is needed most, during the harsh wintertime. The dwindling availability of natural gas supply
in Southcentral Alaska is a matter of fact known to all Alaskans that has already negatively
impacted the Kenai Peninsula economy. In 2007 Agrium USA started employee layoffs at its
fertilizer plant in Nikiski due to unreliable natural gas supply and the resulting high prices for
this plant feedstock. Agrium stopped production in 2008. On October 21, 2009, residents of the
Matanuska Valley, Anchorage bowl, and Kenai Peninsula were asked by a consortium of natural
gas producers, electrical utilities, and municipality leaders to voluntarily participate in a natural
gas conservation exercise. The purpose of the exercise was to prepare for the advent of
insufficient natural gas flowrates expected to occur during peak demand periods within the next
few years. To reiterate, expansion of the Kenai Winds facility will conserve natural gas
requirements to produce 15 MW of power during peak demand. A letter of support from the
Kenai Peninsula Borough Mayor Dave Carey appears as Appendix K. The mayor
enthusiastically endorses the Kenai Winds project as a significant step towards meeting the
policy goals of energy security for the Kenai Peninsula Borough. Mayor Carey is expertly aware
of the need to expand energy supply within the Kenai Peninsula having served on the board of
HEA for 20 years, 7 as president.
Kenai Winds LLC Employment Contribution.Please note that Mayor Carey also comments on the
stabilizing effect the construction of the wind farm will provide the hard-hit Nikiski industrial
zone. During the construction period, the project would create approximately 100 temporary
jobs. These temporary jobs convert into 50 Full-Time-Equivalents jobs with a total payroll
approximating $3 MM. Kenai Winds LLC is committed to use the abundant and skilled local
contract labor. The estimated indirect benefits from this local employment would be
approximately $2 MM. Post-construction, the Kenai Winds project would have four full-time
local staff with a total yearly payroll of $450,000 (escalating with inflation at 3% per year). The
estimated indirect benefits would be an additional $350,000. Over a 30-year project life, the jobs
created by the installation of the Kenai Winds power plant would have an economic impact of
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$29 MM.
Albeit difficult to quantify, one long-term benefit that would result from the Kenai Winds project
would be the increased efficiency of the electric power grid in the industrial district of Nikiski.
Utility design engineers prefer to locate generation near large electrical load centers, a strategy
that eliminates long power lines and expensive systems integration that would be required of a
generator in a remote location. Installing the Kenai Winds facility within the industrial district of
Nikiski will increase the efficiency and reliability of power distribution in that area as noted by
HEA General Manager Brad Janorschke in a letter of support in Appendix E. The industrial
district includes an LNG plant, a multiproducts pipeline, a refinery, and three waterborne docks.
Some of these facilities interface with Chugach Electric Association’s Bernice Lake Substation.
Appendix L is a letter of support from Chugach Electric Association’s Sr. Vice President for
Strategic Planning and corporate Affarits, Lee Thibert. Stabilizing the electrical grid will reduce
the occurrence of catastrophic events such as emergency shutdowns. Besides loss of production
revenue for local industries during downtime for repairs, unplanned shutdowns in hydrocarbon
processing facilities can cause rapid cooling of metal which results in flange leaks. Such
situations endanger the lives of employees and first responders. Joe Monroe, Tesoro Alaska
Company’s Senior Vice President of Corporate Development, states the refinery’s support of the
project in Appendix M. Tesoro has offered to lease Kenai Winds land to erect some of the wind
turbine structures to help achieve the outcome of a more stable industrial power grid. Lease
negotiations are currently underway.
Alaska Workforce Retraining for Green Jobs. A long-term educational benefit would result from
installing Kenai Winds power plant; however the amount cannot be exactly quantified. Sufficient
core competencies exist within the local labor pool for construction and operations/maintenance
of the facility. However, the application of these competencies and skills will transition from
carbon-based energy supply strategies to wind power generation. Due to the explosive growth in
the wind industry, experienced construction personnel are in high demand. Work on this project
will dramatically increase the value of the construction personnel involved as well as provide
Alaska with a local workforce trained for renewable energy projects. Once on line, the operations
and maintenance personnel selected to work at the facility will also have expert experience in
renewable energy projects this grant program supports. Kenai Winds is also committed to
maximizing the educational benefits by providing tours and information to local schools and
other interested educational groups.
Reduction in Greenhouse Gas Emissions.In addition to education and electric power efficiency,
the Kenai Winds project will benefit Alaskans through the direct reduction of greenhouse gas
emissions. The Kenai Peninsula Borough Assembly has passed resolutions concerned with the
impact of climate change and increased greenhouse gas emissions observed on the Kenai
Peninsula (see Appendices O and P). Pre-construction, the quantification of greenhouse gas
reductions can only be estimated. After the Kenai Winds facility is operational, system
conditions and dispatch levels can be monitored to determine exactly the quantity of greenhouse
gas emissions avoided. A preliminary estimate may be made based on the current generation mix
of Chugach Electric Association (the provider of HEA’s power). The pollutant output from
CEA’s natural gas fired generation is reported annually to the EPA and is available from the
EPA e-Grid website. Assuming all of the displaced electricity production is from natural gas,
Kenai Winds would cause greenhouse gas emission reductions of the following quantities:
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Greenhouse Gas Emission Reductions
CO2 53,153,185 lbs
NOX 79,612 lbs
SO2 4,683 lbs
The dollar savings to Alaskans as a result of these reductions are not possible to estimate. Future
carbon regulation is likely, though the form is not yet known. The effects of climate change are
also currently unknown. However, the economic impact of avoiding greenhouse gas emissions is
highly likely to be significant.
In summary, the benefits of expanding the Kenai Winds power facility include immediate
benefits of increased energy stability and power distribution for Southcentral electric power
consumers, short term economic benefits related to construction activity, long term benefits
related to operation and maintenance payroll, long term benefits related to education and training
of the Alaska work force in renewable fuels implementation, and reduced greenhouse gas
emissions. The project and its expansion are supported by business, government, and the people
of the Kenai Peninsula Borough through their elected representatives.
2.6 PROJECT BUDGET OVERVIEW
Briefly discuss the amount of funds needed, the anticipated sources of funds, and the nature and source
of other contributions to the project.
The expansion of the Kenai Winds project from 10 MW to 15 MW will increase capital
requirements $10 MM, from $21 MM to $31 MM. For this expansion proposal Kenai Winds
LLC is requesting $2.00 MM (the maximum this AEA RFP allows for a renewable fuel
construction project that serves communities within the Railbelt that have installed hydro
power). Kenai Winds has received an $80,000 grant for development activities in Round I,
$2MM for construction of the 10MW first phase in Round II, and $2MM for the 5MW
expansion in Round III. The Round III funding was not received due to budgetary cuts by the
Governor. The $26.92 MM contribution by Kenai Winds equates to a strong 6.6:1 project match.
For the 5MW expansion, the project match equates to 4:1. The Alaska portion will be frozen at a
fixed dollar amount so that any cost overruns shall be absorbed by Kenai Winds LLC. The
matching portion from Kenai Winds will be in cash, not “in-kind” contributions. The significant
funds required will be raised from debt and tax equity sources known to Apex Wind Energy.
This investment by AEA directly aligns with its mission to assist in the development of safe,
reliable, and efficient energy systems which are sustainable and environmentally sound.
The project, as currently structured, assumes the Federal government will continue the provisions
of the American Reinvestment and Recovery Act which allows wind energy facilities to claim a
30% investment tax credit or equivalent cash grant from the US Treasury. If approved by the
Alaska legislature, the project would also make use of the Alaska state production tax credit.
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)
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Renewable Energy Fund
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2.7.1 Grant Funds Requested in this application. $2,000,000
2.7.2 Other Funds to be provided (Project match) $8,000,000
2.7.3 Total Grant Costs (sum of 2.7.1 and 2.7.2) $10,000,000
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)
$10,200,000
2.7.5 Estimated Direct Financial Benefit (Savings) $9,907,736
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.)
$ 29,000,000
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Renewable Energy Fund
Grant Application Round IV
AEA11-005 Grant Application
SECTION 3 – PROJECT MANAGEMENT PLAN
Describe who will be responsible for managing the project and provide a plan for successfully
completing the project within the scope, schedule and budget proposed in the application.
3.1 Project Manager
Tell us who will be managing the project for the Grantee and include contact information, a
resume and references for the manager(s). If the applicant does not have a project manager
indicate how you intend to solicit project management support. If the applicant expects project
management assistance from AEA or another government entity, state that in this section.
The project manager for Kenai Winds is Josh Berkow of Apex Wind Energy, Inc. (the parent
companies of Kenai Winds) located in Poughkeepsie, NY. Mr. Berkow’s resume is included in
Appendix A. Holly Norwood represents Apex Wind Energy within Alaska and coordinates local
project management needs. Holly has been a resident of the Kenai Peninsula since 1985, has
twenty years of experience with process facility design and operations, capital project
construction, operations analysis, and quality control. She was employed by Tesoro Alaska for
14 years, the last 8 in management and has experience in negotiating contracts with HEA. She
has been instrumental in the development of UAA’s Process Technology A.A.S. degree and is a
charter member of the Alaska Process Industry Careers Consortium (a process industry/academic
alliance organized to identify education needs and train Alaska’s workforce just in time for
industry needs). She has a passion training Alaskan’s for Alaska’s high paying industrial jobs.
Please find Ms. Norwood’s resume in Appendix A. Other key Apex Wind Energy personnel
involved with the Kenai Winds power plant facility include Paul Curran (Senior Executive VP),
Tim Ryan (Senior Executive VP),Jim Trousdale (CFO), Eamon Perrel (Development Manager),
and Mark Goodwin (COO). Their resumes are in Appendix A.
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.)
This RFP is submitted for Phase IV, Construction, Commissioning, Operation, and Reporting of
the Kenai Winds power facility expansion. A detailed project schedule is included in Appendix
B and is summarized below. The end of Phase III per AEA’s definition blends into the
beginning of Phase IV. The next Phase III major milestones include completion of the
Interconnection Agreement and Power Purchase Agreement (PPA) negotiations with CEA and
finalizing financing. Phase IV begins with turbine selection and procurement, and selection of an
Engineering-Procurement-Construction firm. Groundbreaking is planned for July 2011 with
commercial operations in November 2011.
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.)
1. Interconnection Requirements Study (Phase 1) Completed – 4/2/2009
Homer Electric Association (HEA) contracted with EPS out of Anchorage to study the impact of
the Kenai Winds project on the HEA and Railbelt grids. The study determined that up to 18 MW
of wind energy could be reliably interconnected to HEA’s grid without adverse impacts on
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system stability. This study focused solely on the ability of the grid to integrate that quantity of
energy, and did not examine the issues around intermittency. This study will not need to be
repeated with a power sale to CEA.
HEA and Kenai Winds performed a detailed analysis on intermittency, net load, and dispatch
scenarios. These are not directly applicable to Chugach post-2014 and some additional analysis
will be required. Kenai winds anticipates kicking off an integration study with Chugach in
October 2010 with results in December 2010
2. Power Sales Term Sheets Executed – Q3/Q4 2010
Kenai Winds executed a Term Sheet for power sales with HEA in August 2009. A subsequent
MOU modifying the Term Sheet to address intermittency was signed with HEA in March 2010.
In May 2011, HEA terminated the MOU and Term Sheet to focus its limited engineering
resources on its Independent Light plan, which consists of new natural gas fired generation and
independent dispatch from Chugach. In August 2010, Kenai Winds submitted a proposal to
Chugach Electric for the sale of electric power. Kenai Winds anticipates signing an MOU with
CEA by October 15, 2010.
The original power sales MOU with HEA contemplated a sale price of 7 ¢/kWh escalating at 3%
per annum. This assumed the availability of $2MM in funding from the AEA for the 5MW
expansion, monetization of the Investment Tax Credit through the Treasury Grant program, and
Alaska State Production Tax Credits.
3. Financial Plan Secured – 02/04/2011
Kenai Winds is currently in negotiations with a number of parties on the financing of the project.
A number of parties will be involved and bring investment in a number of forms including but
not limited to: debt, equity, tax equity, power price hedges, vendor financing, loan guarantees,
and non-traditional lenders. Discussions have been held with traditional sources of funds such as
banks, and with non-traditional funders such as equipment vendors and Native Alaska
Corporations.
Starting in December 2009, Kenai Winds began the process of securing a loan guarantee from
the USDA through their offices in Palmer Alaska. The Class II Environmental Assessment
through the USDA is currently underway. Financing will be contingent of signing a power
purchase contract and interconnection agreement with a Railbelt Utility.
4. Interconnection Agreement Executed – 02/04/2011
As part of its power contract with CEA, a separate 3-party interconnection agreement will be
required between CEA, HEA, and Kenai Winds. This process also includes input from EPS, the
contractor that performed the Interconnection Requirements Study, and will result in a document
that outlines the operational characteristics of the wind project. The completed integration
studies are in Appendix D.
5. Turbine Selection Finalized – 11/14/2010
Kenai Winds is currently in discussions with a number of wind turbine vendors interested in
supplying this project. As with previous grant applications, Kenai Winds is in discussion with
both GE and Vestas which are leaders in the wind turbine market. Kenai Winds is also in
discussions with several new market entrants that can supply more advanced technology with a
more flexible time frame.
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Kenai Winds will be able to leverage the nationwide wind development activities of its parent
company, Apex Wind Energy, to secure cost effective and innovative technology at economies
of scale. Apex Wind currently has a project pipeline of over 1,000MW of wind energy projects
in the continental United States. This development pipeline gives Apex Wind and Kenai Winds a
strong bargaining position with wind turbine vendors that will translate into lower costs for the
Alaska rate payer.
6. Site Lease Executed – 12/10/2010
Kenai Winds currently has a Memorandum of Understanding in place with Tesoro and is in
negotiations for a formal lease for land for the wind turbines. Kenai Winds has also begun
discussions with neighboring landowners to lease land for this project. The entire project can be
built on lands owned or controlled by Tesoro, though the optimal layout would use lands owned
by its neighbors as well.
7. Power Purchase Agreement Executed – 12/10/2010
Kenai Winds is currently in negotiations with Chugach Electric on purchase of the energy from
the project. Kenai Winds anticipates completing negotiations by the end of 2010. In early 2011,
the document will be submitted to the Regulatory Commission of Alaska (RCA) for approval.
Kenai Winds has already discussed the PPA with the RCA and anticipates a speedy approval of
the document. As noted above, Kenai Winds will sell energy to CEA at a cost based rate which is
less than CEA’s projected future avoided cost.
8. Wind Turbine Downpayments – 12/20/2011
9. Start of Detailed Engineering – 11/15/2010
Kenai Winds will use a competitive process to bid the Engineering, Procurement, and
Construction (EPC) of the project. The Statements of Qualifications for two potential bidders
(Signal Wind Energy and STG Inc.) are included in Appendix C. Kenai Winds will use every
effort to ensure that significant numbers of local construction personnel are employed, and a
preference will be put on hiring Alaska-based subcontractors. As required by the grant, Kenai
Winds will mandate that all contractors be qualified to work in Alaska.
10. Groundbreaking – 7/15/2011
11. Turbine Components at Site – 8/05/2011
There is an existing deepwater port and oil terminal at the site. A second port, used for servicing
offshore oil and gas platforms is located a few miles to the north of the site. It is anticipated that
the blades, towers, and turbines will arrive via one of these two ports. Logistics will be
coordinated with the turbine supplier, which is typically in the scope of supply.
12. Civil Construction Complete – 9/30/2011
The civil infrastructure for this project will mainly include the turbine foundations. Since the
project area has already been cleared and graded for industrial purposes, no road construction is
anticipated.
13. Electrical Infrastructure Complete – 11/18/2011
Electrical infrastructure includes the pad-mounted transformers, underground collection system,
overhead collection system, interconnection to the substation, installation of reactive
compensation, and test of the entire system. This does not occur serially with the civil
construction, but can be begun as soon as one turbine location is finished.
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14. Turbine Erection Complete – 11/15/2011
Kenai Winds anticipates possibly hiring extra crane operators to erect turbines around the clock
and making use of the extended daylight hours available during Alaska summers. This does not
occur serially with the electrical construction, but can be begun as soon as one turbine location is
finished.
15. Commercial Operations – 11/29/2011
3.4 Project Resources
Describe the personnel, contractors, equipment, and services you will use to accomplish the
project. Include any partnerships or commitments with other entities you have or anticipate will
be needed to complete your project. Describe any existing contracts and the selection process
you may use for major equipment purchases or contracts. Include brief resumes and references
for known, key personnel, contractors, and suppliers as an attachment to your application.
Kenai Winds has five main project participants in addition to the various outside contractors
hired to perform specific services. These are Apex Wind Energy, the EPC contractor (to be
announced), Tesoro Alaska Company, Chugach Electric Association, and Homer Electric
Association.
Apex Wind Energy. Apex Wind Energy is the parent company of Kenai Winds, LLC. All Kenai
Winds personnel are Apex personnel. The resumes of Project Manager Josh Berkow,
Representative and on-site project manager Holly Norwood, and managing director Paul Curran
can be found in Appendix A. Apex Wind Energy will competitively bid the engineering,
procurement, and construction (EPC) of the project.
The EPC contractor for the project has not yet been selected although site visits have been
completed by several companies. The statements of qualifications from Signal Wind Energy and
STG, Inc. can be found in Appendix C and are included here as examples only. During Phase III,
the EPC contractor will identify via a competitive bidding process subcontractors qualified to
work in Alaska. To the maximum extent possible, the EPC contractor shall utilize the abundant
local labor available and experienced working within the Nikiski industrial corridor.
Subcontractors will be needed for civil construction infrastructure, electrical infrastructure and
construction, and setting of turbines. Civil construction tasks include turbine foundation
excavation, sub grade preparation, cage construction and concrete work, trenching, cabling,
backfilling for underground collection system, pole construction, cabling for overhead
construction system, and installation of pad mounted transformers and switchgear. Electrical
infrastructure and construction tasks include the pad mounted transformers, underground and
overhead collection systems, interconnection to the substation(s), installation of reactive
compensation, and testing of the entire system.
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Construction Task Potential Contractors
Construction Management Signal Wind Energy, STG, Mortenson,
Tennessee Valley Infrastructure Group, White
Construction, Delaney
Logistics ATS, STG, Lyndon Transport, Carlile
Erection STG, Wanzcek, Anchorage Crane, wind
turbine vendor
Electrical Udelhoven, Dowland-Bach, Big G
Labor Supply CH2M Hill, Peak, Udelhoven, ASRC
Tesoro Alaska and Tesoro Corporation. Construction project management at the Tesoro refinery
in Nikiski will be coordinated by Refinery Project Manager Joe Gabriel and Maintenance
Supervisor Kevin Dix. Operational support at the refinery will be provided by Refinery Manager
Steve Hanson and Superintendent of Operations Rolf Manzek. Project coordination at Tesoro
San Antonio headquarters is handled by Leo Giron and Iype Chacko. Kip Knudson provides
local public relations and legislative support. A letter of support from Tesoro for the Kenai
Winds power facility is attached as Appendix M.
Homer Electric Association. As the interconnecting utility, Homer Electric will be intimately
involved in the project and will be a party to any interconnection or transmission services
agreement. An interconnection requirements study has been completed with HEA and is
included in Appendix D. A letter of support from HEA general Manager Brad Janorschke is
included in Appendix E. Kenai Winds will potentially interconnect to HEA’s Nikiski substation
Chugach Electric. Kenai Winds may connect to CEA’s Bernice Lake Substation and will sell its
energy to CEA. The original power sales MOU with HEA contemplated a sale price of 7 ¢/kWh
escalating at 3% per annum. This assumed the availability of $2MM in funding from the AEA
for the 5MW expansion, monetization of the Investment Tax Credit through the Treasury Grant
program, and Alaska State Production Tax Credits. The proposal Kenai Winds provided to CEA
addresses this scenario and the scenario without the ITC, PTC, or $2MM grant.
3.5 Project Communications
Discuss how you plan to monitor the project and keep the Authority informed of the status.
The Alaska Energy Authority becomes a key stakeholder in the Kenai Winds LLC project once a
financial agreement is in place. Project Manager Josh Berkow will provide monthly status
reports by email (or other method allowed by AEA if email is not available) to AEA’s project
manager once detailed engineering has commenced and construction mobilization is underway.
The report will update AEA on the progress of the project, regulatory and compliance issues,
possible delays, and grant expenditures during the period that the report covers. These monthly
reports will concisely summarize the progress made on grant tasks during the month and will
identify any difficulties in completing the tasks meeting goals or deadlines. Kenai Winds LLC
will include the report copies of any work products due to AEA during the reporting period.
Documentation and record keeping by Kenai Winds LLC will include a) the grant application, b)
the grant agreement and any amendments, c) all written correspondence or copies of emails
relating to the grant, d) reports as described above, including any consultant work products, e) a
separate accounting of grant income and expenditures, f) supporting documentation for the
expenditures charged to the grant (including supporting documentation for all required matching
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contributions).
3.6 Project Risk
Discuss potential problems and how you would address them.
The primary risk for the AEA regarding the Kenai Winds Expansion will be that the project fails
to reach full operation and give Alaska a return of the public benefit expected. In all projects that
risk of failure is greatest in the early stages of development. That is the reason that Apex Wind
Energy uses a Phased Gate development system very similar in nature to Project Phase
descriptions used by AEA in this RFP. This proposal is for construction funding for the project;
Kenai Winds power facility will reach full operation. This project is in a mode of executing
project aspects that have been well defined. This project has the full support of the community it
will serve.
For the Kenai Winds power facility, the Phase 3 risks are identified as follows:
1) Cost of delivered turbines exceeds the budget.
2) Unavailability of wind turbine vendors for the Alaska market.
3) A change in Alaska law requiring additional permits
4) Inability to finance the rest of the project.
5) An inability to execute key contracts consistent with the terms of completed MOUs.
6) Requirement to obtain a Certificate of Public Convenience and Necessity
Kenai Winds LLC believes it has successfully mitigated all the described risks to the extent
possible during Phase II. The risks that may remain will require prudent risk management.
Certainly, prior to signing a full turbine supply contract that will require several million dollars
of down-payment money, the management of Kenai Winds LLC will conduct a thorough risk
assessment of these and all other project aspects.
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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 Kenai Winds Expansion will significantly increase the capacity of the Kenai Winds power
plant from 10 to 15 MW. Dependent upon make and model of the turbine, the full facility will
include 5-10 turbines disbursed throughout the industrial area of Nikiski on the Kenai Peninsula.
The facility will be electrically interconnected to HEA’s Nikiski substation which also services
the HEA’s Nikiski generator. Electric energy will be delivered to CEA under conditions defined
by a power purchase agreement (PPA) and an interconnection agreement (IA) between the two
companies. A letter of support from CEA appears in Appendix L. A letter of support from HEA
General Manager Brad Janorschke appears as Appendix E.
Kenai Winds LLC has invested in equipment to accurately assess the potential production of the
project. Beginning in November 2007, Kenai Winds undertook a 1 year meteorological study to
assess the wind resource in Nikiski. A meteorological tower was installed within the industrial
corridor of Nikiski. A 6-month energy production estimate was commissioned based on the
Vestas V90-1.8 MW turbine. A further study based on the complete data record was recently
completed. This examined the output of 4 different turbines, and a detailed report was generated
for one of these turbines. A redacted copy of that report, removing confidential information, is
attached in Appendix F. Based on this report the full 15 MW Kenai Winds project will generate
30,600 MWh per year. The Kenai Winds Expansion will generate 10,200 MWh per year.
The proposed facility site has been determined to be ideal for wind energy production. The data
indicate that the prevailing wind directions are the NNE and SSW. As such, a row of wind
turbines following the coastline is an ideal layout. The layout shown in Appendix G describes
such a layout, using lands owned by Tesoro and neighboring industrial companies.
Existing power sources on the Railbelt grid are carbon based turbine generation and
hydroelectric. The main advantage of the Kenai Wind Expansion project is that it consumes no
fuel. Since it consumes no fuel, it has no variable cost and generates no pollution. The cost of
energy from this facility will be based entirely on the capital cost and fixed operating costs of the
facility. As shown in Section 5 of the Cost Benefit Worksheet (filename
KWCostworksheet3.doc). The cost of carbon-based energy production is expected to increase at a
rate that rapidly outpaces the inflation-based cost increases of wind energy. Furthermore, wind
energy is not impacted by uncertainties related to upcoming Federal greenhouse gas regulations
as carbon based power production is. In summary, unlike fossil-fuel power generation, a wind
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energy facility offers stable, fixed-price energy as long as a long-term PPA is in place.
Another benefit of the Kenai Winds power plant will be the reduction in greenhouse gases. The
Kenai Winds facility has the potential to avoid the emission of 53 million lbs of CO2, 79,000 lbs
of NOx, and 4700 lbs of SO2. Avoiding these emissions will provide benefit to CEA’s electricity
customers, as the costs associated with those emissions would have been passed on to the
consumer.
Another advantage of the Kenai Winds facility over other wind energy project sites is the
accessibility of the power plant. Indeed, windier locations are known to exist throughout Alaska.
Yet unlike these locations, the Kenai Winds power facility will not require expensive
transmission lines or, upgrades to infrastructure and power grid system because the facility will
be located next to an existing, large industrial load. The industrial power grid in Nikiski is ready
to accept wind energy, thus the integration costs of competing wind projects will be less.
An additional advantage of the location is the industrial nature of the site. The three primary
environmental impacts of wind energy are birds, viewshed, and noise. Existing operations make
viewshed and noise non-issues. Wind turbine noise at off-site locations will be less than 50 dB,
which is much less than the traditional hydrocarbon-based power plants serving the grid. The
support of the Kenai Peninsula Borough also indicates that view-shed is less of a concern in a
district that is already designated to be industrial. The impact on birds at this location will be
incremental at best, as the location is already non-ideal for nesting and migrating birds. Indeed,
the impact from existing operations will greatly outweigh the impact from wind energy.
The disadvantage of this resource is that it is intermittent. Energy is produced when the wind
blows. Intermittent generation of this type requires a modern electric utility grid with the
flexibility to accommodate intermittent generation, a workforce knowledgeable in understanding
wind rate predictions, and, of course, excellent SCADA and human communications. HEA and
CEA have demonstrated the willingness to learn the core competencies required to incorporate
wind energy into the industrial power grid. As part of its operations, Kenai Winds will provide
day-ahead and real-time energy production estimates to HEA and CEA to aid in dispatching other
generation, which will mitigate this intermittency. This service is typically provided by a
contractor such as AWS Truewind or Global Energy Concepts. A detailed scope of work has not
been created for this service yet, but will be specified prior to operations.
As part of its interconnection discussions with HEA, Kenai Winds has undertaken two initiatives
to better understand the intermittency of the project output. First, the meteorological tower was
retrofitted with new dataloggers to record at 1-minute intervals. The typical data interval is 10
minutes, which is acceptable for long-term trends and for project economic forecasting. As the
inertia of a wind turbine rotor acts on a timescale shorter than 10 minutes, 1 minute data is needed
to understand the short term variability and grid frequency regulation requirements. This
equipment was installed in April 2010.
In addition to retrofitting its meteorological tower, Kenai Winds also commissioned a forecast
accuracy study with AWS Truepower. AWS examined the complete record of 10 minute data,
and treated it as if it were a real-time stream of data rather than a historical record. This data and
statewide meteorological data inserted into AWS’s meso-scale models in the same manner in
which AWS creates forecasts for NYISO and ERCOT. The result was a synthetic wind forecast
which is compared to the actual meteorological data recorded. The accuracy of AWS forecasting
methods for Alaska could then be verified. This data was provided to HEA and will be provided
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to CEA.
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.
Currently, HEA operates a two-voltage transmission system at 69 and 115 kV. Electric energy is
supplied by the Bradley Lake hydroelectric plant (owned by AEA and operated and maintained
by HEA), Nikiski 1 Cogen (previously known a Soldotna 1), and imported electricity from
Chugach Electric. The Bernice Lake generating station is also on the HEA grid, yet it operates
rarely and only during electrical emergencies. HEA’s current base load is 83 MW and increases
to 106 MW during peak demand during harsh winter conditions.
The HEA grid is currently tied to the rest of Railbelt Alaska via a single transmission line at the
north end of the Kenai Peninsula. Electric reliability on the peninsula is currently an issue
because an outage on that line can impact HEA’s grid stability for weeks at a time.
Interconnection of the Kenai Winds project helps increase grid stability in times when HEA is
isolated from the rest of the Railbelt.
The Kenai Winds project will interconnect either at HEA’s Nikiski substation or CEA’s nearby
Bernice Lake substation. The Nikiski substation is currently split to interconnect HEA’s Nikiski
generator, and to supply local industrial loads. The Nikiski generator is connected to the 13 kV
bus, and will not change as a result of this project. The industrial loads, currently connected to the
4.16 kV bus will be supplied by local distribution following the interconnection of Kenai Winds.
Kenai Winds will interconnect at the 4.16 kV bus, and through two 115 kV transformers to the
transmission system.
Discussions with CEA on interconnection and power offtake are still in early stages. Kenai Winds
anticipates interconnecting to the 25kV bus at Bernice Lake which feeds the Conoco-Phillips
LNG facility and also hosts CEA’s Bernice Lake generators. The substation connects through
transformers to the 115kV grid, and ultimately back to Anchorage.
4.2.2 Existing Energy Resources Used
Briefly discuss your understanding of the existing energy resources. Include a brief discussion of
any impact the project may have on existing energy infrastructure and resources.
The existing energy resources in the Kenai Peninsula are natural gas and hydroelectric. The
Bradley Lake hydroelectric plant is owned by AEA and operated and maintained by HEA.
Nikiski 1 Cogen (previously known a Soldotna 1) uses natural gas for generation and electricity is
also imported from CEA. In 2014, HEA’s power purchase contracts with Chugach Electric and
Bradley Lake expire. Strategic planning for the loss of CEA electric supply appears to be the
driving force behind HEA’s request to increase the capacity of Kenai Winds power facility from
10 to 15 MW. HEA is considering modernizing its system by using the waste heat of Nikiski 1
Cogen to increase generation capacity and create the flexible generation system required to best
integrate wind generation.
CEA’s major generating resources are located off the Kenai Peninsula, but would likely be re-
dispatched to integrate the wind. As offtake discussions are in early phases, it is too soon to know
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which resources would be re-dispatched. CEA’s generators have similar heat rates to HEA’s
generators. Kenai Winds does not anticipate significant differences in the displacement of natural
gas from one to the other.
One impact the Kenai Winds Expansion project will have is a decrease in the amount of natural
gas required to maintain the electrical load serving the Nikiski industrial district. Over the life of
the expansion project, the project will displace 7,847,672 MCF of natural gas. The NPV of this
displaced natural gas over the life of project is estimated to be over $30 MM.
Other impacts are increased reliability and stability of the CEA and HEA grids. Increased
reliability of the grid will result by connecting the wind power plant in parallel with the electric
grid. Some form of reactive power compensation is also anticipated to be required which will
further improve the reliability of the grid. There are three main reasons for installing reactive
power compensation; all are related to voltage stability. First, the voltage of the grid may not
remain constant if the Nikiski 1 Cogen, a contributing generator, or the wind facility trips offline.
If any of these scenarios occur, the voltage and frequency at the substation will drop below
nominal while the transmission system catches up. This typically occurs on the time-scale of
seconds, which is a long time for electrical equipment. Immediately after a trip, voltage
oscillations occur with extreme dips and spikes. These typically occur on the order of
milliseconds (16.66 ms/cycle), which is an extremely short time for electrical equipment.
Reactive power compensation acts as a shock absorber for both of these phenomena, holding the
voltage constant after a trip. Thus the spikes will be softened and voltage oscillations that damage
electrical equipment will be diminished.
Wind turbine generator models proposed for this project make use of induction generators and are
designed to operate at a unity power factor (they neither make nor consume reactive power).
These induction generators are dependent on the transmission system stability and cannot control
the voltage at their connection to the grid. In order to maximize reliability for the HEA grid, the
generator output voltage should remain constant during an incident. Reactive power
compensation provides the control that makes this possible.
The stability of the grid will be improved because locating the wind project near the load keeps
the frequency of the entire grid stable in the event of failure with one of the other generators
feeding the grid.
4.2.3 Existing Energy Market
Discuss existing energy use and its market. Discuss impacts your project may have on energy
customers.
Throughout the Railbelt grid, there is no deregulated real time energy market as is common in the
lower-48 states. Consumers (industrial, commercial, and residential) do not have retail choice for
electricity. The utilities purchase electricity (or natural gas for generation) through long-term
contracts. In HEA and CEA territory, electricity prices are based primarily on natural gas.
Through a complicated contract formula, natural gas prices are based on the historical aggregate
United States natural gas, fuel oil, and crude oil prices. These contracts expire in 2014. It is
anticipated that future prices will be based more closely on current Henry Hub prices. Following
completion of the Alaska Natural Gas Pipeline, and the proposed spur line to the Railbelt, it is
anticipated that natural gas prices will be set at a higher market rate.
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4.3 Proposed System
Include information necessary to describe the system you are intending to develop and address
potential system design, land ownership, permits, and environmental issues.
4.3.1 System Design
Provide the following information for the proposed renewable energy system:
A description of renewable energy technology specific to project location
Optimum installed capacity
Anticipated capacity factor
Anticipated annual generation
Anticipated barriers
Basic integration concept
Delivery methods
The Kenai Winds Expansion project increases the facility from 10 to 15 MW which will require 5
to 10 turbines dependent upon make and model. Thirteen sites have been permitted in the Nikiski
industrial zone, but not all of them will be required for the initial installation. Potential sites
include land owned by Tesoro, land owned by the Kenai Peninsula Borough and under long term
lease to Tesoro, brownfield land owned by Chevron, and land owned by Agrium USA which is no
longer used for fertilizer production. All of the land owners are enthusiastic about the project and
lease terms will be discussed once the optimal sites for installation are chosen. As part of its Phase
3 activities Kenai Winds will work with DNV Global Energy Concepts, AWS Truewind, or
another qualified contractor to determine the optimal locations for the wind turbines within
manufacturer specifications. Wind data will be provided to the contractors and the turbine vendor
as part of the final turbine selection process. The data and layout will be analyzed for other
potential conflicts prior signing turbine purchase agreements. All of the sites are easy to connect to
Nikiski substations.
Kenai Winds has had productive discussions with several turbine suppliers eager to participate in
this project. All of the suppliers have proven and successful commercial history with the make
and model of turbines under consideration. As was discussed in Section 4.1, Kenai Winds
anticipates annual generation of 30,600 MWh for the full 15 MW project, with 10,200 MWh
supplied by expansion. This represents a net capacity factor of 24.3%.
The draft Kenai Winds project layout, shown in Appendix G, shows the approximate locations of
the wind turbines and the electrical collection system for a 2.4 MW wind turbine with a 90m rotor
The yellow dots in the diagram are scale representations of the rotor-swept area for a wind turbine
with a 90m rotor. Turbine locations have been selected to meet the design criteria of most turbine
vendors with minimum spacing of 6 rotor diameters between turbines and a setback of “1.5 times
the rotor diameter plus the turbine height” from occupied structures and off-site locations. Turbine
selection will occur in the late part of 2010 as per the schedule in Appendix B.
The project will interconnect to Homer Electric’s Nikiski substation or to CEA’s Bernice Lake
substation. The substation has 2 115/4.16 kV transformers that will be used to interconnect Kenai
Winds to the grid. A third 115/13.2 kV transformer connects to a 13.2 kV bus which connects
HEA’s Nikiski generator to the grid. The project will connect via 3 collection feeders to the 4.16
kV bus at the Nikiski substation. No major changes to the substation are contemplated as a result
of this project. Metering will be added to the 115 kV side of the substation, new relays will be
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required on the 4.16 kV bus, and existing breakers may be upgraded. The physical design and
layout of the substation will remain unchanged.
An interconnection to the Bernice Lake substation would likely occur at the 25kV bus which
currently serves the Conoco-Phillips LNG terminal. Alternatively, Kenai Winds could connect in
parallel or in lieu of existing gas generation at Bernice Lake.
Each wind turbine generates electricity at approximately 600 V. The turbine output is fed to a
4160/600 V pad-mounted transformer at the base of the turbine. These transformers are connected
in parallel to the collection system which feeds into the substation. In the immediate area of the
wind turbines, the collection system will be underground. Every effort will be made to have the
collection system follow existing electrical, pipeline, and road right-of-ways. Where appropriate,
the collection system will be above ground, to minimize costs. As part of its Phase 3 activities,
Kenai Winds will contract out preliminary engineering of the facility. Engineering, Procurement,
and Construction costs will be estimated for updating the project economics and securing long
lead-time items. Preliminary engineering will also include geotechnical and wetlands surveys.
An electrical one-line diagram of the entire facility is shown in Appendix R
As part of its interconnection discussions with HEA, Kenai Winds has undertaken two initiatives
to better understand the intermittency of the project output. First, the meteorological tower was
retrofitted with new dataloggers to record at 1-minute intervals. The typical data interval is 10
minutes, which is acceptable for long-term trends and for project economic forecasting. As the
inertia of a wind turbine rotor acts on a timescale shorter than 10 minutes, 1 minute data is needed
to understand the short term variability and grid frequency regulation requirements. This
equipment was installed in April 2010.
In addition to retrofitting its meteorological tower, Kenai Winds also commissioned a forecast
accuracy study with AWS Truepower. AWS examined the complete record of 10 minute data, and
treated it as if it were a real-time stream of data rather than a historical record. This data and
statewide meteorological data inserted into AWS’s meso-scale models in the same manner in
which AWS creates forecasts for NYISO and ERCOT. The result was a synthetic wind forecast
which is compared to the actual meteorological data recorded. The accuracy of AWS forecasting
methods for Alaska could then be verified. This data was provided to HEA and will be provided to
CEA.
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 primary landowner is Tesoro and its subsidiary Kenai Pipeline Company. Tesoro is an
enthusiastic supporter of the Kenai Winds facility (Tesoro letter of support is Appendix M). The
daft project layout shown in Appendix G shows the locations of the wind turbines on Tesoro land,
and also identifies the other area landowners. The layout is currently in draft form. At present, a
commercially viable wind farm can be constructed using land leased from Tesoro, with only a few
required easements for power line road crossings.
While the installed capacity of the project will not increase, access to the other lands allows
flexibility in the final siting determination. Kenai Winds would prefer to site the turbines to
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optimize power production. As shown on Appendix G, the other area landowners are Agrium,
Conoco-Phillips, Chevron, ASRC, and the Kenai Peninsula Borough (KPB).
The Agrium property is the site of its moth-balled fertilizer plant. The fertilizer plant does not
occupy the entire plot. The empty land was slated for a coal gasification facility, now cancelled
due to the plant closure. The Conoco-Phillips property hosts a liquefied natural gas terminal and it
does not occupy the entire plot. The Chevron property is the site of a former oil refinery which
has long since closed and been removed, leaving a large area of shovel-ready land. ASRC is an oil
and gas services company and the land available is currently a parking lot, which may not be
sufficient to host a wind turbine. The KPB land is cleared and shovel-ready and has a long term
lease with Tesoro. This land was originally slated for another oil-and-gas industrial company, but
has not been developed.
Preliminary meetings introducing the wind power project and possibility of erecting turbines on
the Agrium and Chevron brownfields were held September 2009. The proposals were
enthusiastically received as there is no commercial use of these properties planned in the future.
Follow up meetings with senior company representatives have been held. Kenai Winds is
currently in the process of acquiring leases for this land. Regarding the KPB property under long
term lease to Tesoro, KPB Land Management Officer Marcus Mueller has affirmed KPB’s
support upon documented approval of Tesoro. Letters of support for Kenai Winds from the KPB
Mayor and Tesoro can be found as Appendices L and N, respectively.
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 list of applicable permits includes Coastal Zone Management approval, FAA approval, RCA
approval for the Kenai Winds-CEA PPA, and ROW permitting by the Alaska Department of
Transportation. No zoning variances, ordinances or building permits will be required as this is an
unincorporated area of Alaska. An inspection by the state fire inspector may be required after
commercial operations.
The Alaska Coastal Zone Management Program (CZMP) governs permitting in the planned Kenai
Winds facility site. The CZMP will not require a consistency review of the Kenai Winds project
nor will it require any permits. Kenai Winds filed a coastal zone questionnaire with the Alaska
Department of Natural Resources. A response letter from the DNR and an interpretation from
Ecology and Environment (an environmental contractor with Anchorage offices) are included in
Appendix H, Coastal Zone Confirmation of Project Consistency. The letter states that the Kenai
Winds project does not require a consistency review as it does not require any permits under the
CZMP. As such the project is deemed consistent with the CZMP.
The Power Production Agreement between Kenai Winds and CEA must be approved by the
Regulatory Commission of Alaska (RCA). The PPA will be ready for RCA review in early 2011.
The RCA meets monthly and it is anticipated the PPA will be approved by the execution deadline
of May 2010. Certain provisions of Alaska statute AS 42.05 may be interpreted to apply that
Kenai Winds requires a “Certificate of Public Convenience and Necessity” prior to operation.
Kenai Winds is exploring the potential of a “public interest exemption” from all AS 42 regulations
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based upon precedent set by the exclusion granted to the Southfork Hydro LLC project. The
Southfork LLC petition for and granted exemption from AS 42 compliance is in Appendix I. The
arguments Southfork LLC makes are persuasive and directly applicable to the situation Kenai
Winds LLC has encountered. By virtue of selling 100% of its power to MEA, Southfork is
indirectly regulated by RCA. Likewise, Kenai Winds LLC will sell 100% of its power to CEA and
thus be indirectly regulated by RCA.
Kenai Winds has received a Determination of No Hazard from FAA for the 13 locations permitted
under the CZMP (see Appendix J, FAA Determination of No Hazard to Air Navigation). A
lighting plan was filed with the Obstruction Evaluation/Airport Airspace Analysis (OEAAA)
group at the Federal Aviation Administration (FAA). All developers building structures taller than
200ft. are required to file a lighting plan for approval with the FAA. Since this project is not
located within 2 miles of an FAA airport, the nature of the review was cursory.
Preliminary meetings with the Alaska Department of Transportation have confirmed that
construction ROW permits will be readily available after site selection and turbine delivery
scheme have been developed.
Kenai Winds power facility will be located in an unincorporated section of the Kenai Peninsula
Borough. As such, no municipal approvals will be required in the form of zoning variances,
ordinances, or building permits. This statement was confirmed by both Tesoro and the Kenai
Peninsula Borough Mayor’s during the Fall of 2007. A letter of support from the Kenai Peninsula
Borough Mayor’s office is included as Appendix K.
While all the necessary permits are in hand to construct the project, an additional environmental
review is required to receive a USDA loan guarantee. Kenai Winds expects to complete a Class II
Environmental Assessment in fulfillment of the USDA’s requirements under the National
Environmental Policy Act (NEPA) by end of 2011. The process included meetings with the
Alaska Historical and Preservation Office in Anchorage, Sovereign Nation of the Kenaitze Indian
Tribe in Kenai, and US Fish and Wildlife Service in Soldotna, Alaska. The USDA has made a
preliminary conclusion that no cultural resources or critical wildlife habitat will be disturbed by
the construction and operation of the Kenai Winds project. These findings will be available for
public comment. Anticipated date for public review is fall of 2011.
As part of this process, Kenai Winds has met several times with USFWS in Soldotna, including
with USFWS enforcement staff. It should be noted that USFWS has an advisory role under NEPA
and does not have regulatory power to approve or deny construction of the project. Kenai Winds
has voluntarily cooperated with USFWS to determine the pre-construction and post-construction
wildlife monitoring protocols for the project. In addition to commenting on the Coastal Zone
Consistency Determination, USFWS also provided comments to the Class II Environmental
Assessment.
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
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Land development constraints
Telecommunications interference
Aviation considerations
Visual, aesthetics impacts
Identify and discuss other potential barriers
A number of environmental impacts are commonly associated with wind energy. These are: birds,
noise, view-shed, aviation, construction, and property values. In all cases, except aviation, the
impact from existing operations will far outweigh the impact a wind energy facility at the site.
1. Avian Impacts
Birds are an important part of the beauty of the Cook Inlet and several studies have shown that a
wide variety of species are present during various points of the year. It has been widely
documented that birds coexist well with wind turbines throughout the world. However, as with all
tall structures, highways, and industrial complexes, some impact may
Apex Wind Energy project managers have been in contact with the Unites States Fish and Wildlife
Service in Soldotna, Alaska since the fall of 2008 specifically to discuss the potential for avian
mortality. USFWS provided valuable comments to Kenai Winds following its Coastal Zone
Consistency determination, and additional comments to its Class II Environmental Assessment.
In its initial letter to Kenai Winds, included in Appendix T, USFWS provided a number of useful
siting guidelines for the project. Most notably, USFWS recognized that that are “…no federally
listed or proposed species and/or designator or proposed critical habitat within the action area of
the proposed project.” USFWS also noted that compliance with siting “…guidelines is voluntary,
not mandatory.” USFWS specifically made the following recommendations:
1. Minimize site disturbance
2. Avoid locations with high risk to birds and bats
3. Avoid active raptor nest sites
4. Avoid site clearing during nesting season
5. Site projects on previously disturbed lands
6. Minimize construction practices that attract prey and predators
7. Construct transmission lines below ground
8. Avoid guy wires
9. Use FAA-approved strobe lights rather than steady-burning lights
10. Minimize facility lighting
11. Avoid roosting, nesting, or feeding sites
12. Use tubular towers
13. Minimize access roads
14. Use native species when replanting
It is clear from these guidelines that siting the project at an active industrial facility, such as those
in the Nikiski Industrial Zone is a prudent and an appropriate form of development. A USFWS
fact sheet on avian mortality is included in Appendix S. The fact sheet correctly shows that many
human activities contribute to avian mortality. Wind energy is not an identified activity on the fact
sheet, but is one of the only contributors to avian mortality that has an overall positive
environmental impact due to its displacement of fossil fuels.
Included in Appendix U is report from WEST, Inc. presented at the AWEA Windpower 2010
conference. WEST is one of the leading companies studying incidences of avian and bat mortality
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and wind energy facilities. As a global expert in this field they are employed not only by wind
project developers but by government agencies to study and track avian mortality.
The WEST report covers 37 projects across the continental United States. The national average
reported by WEST was 3 fatalities per installed MW per year. As the average wind turbine size at
the projects studied was 1.5MW, which equates to approximately 4.5/turbine/year. Given the other
causes and numbers of avian mortality identified by the USFWS, this number is statistically
insignificant. The Kenai Winds project would cause approximately 36 avian fatalities per year.
This is less than the number of fatalities that could be expected from a mile of highway.
2. Noise
Wind turbines are generally not noisy and the sound profile is well documented for each
manufacturer’s turbines. The noise map shown below was created for Apex Wind Energy’s Steel
Winds project in Lackawanna NY. Noise sensors were placed at varying distances from the
proposed wind turbine locations to measure ambient background noise. The expected noise output
of the wind turbines is plotted on the map. At these locations, the background noise was greater
than the noise of the turbines. Given the industrial nature of the Kenai Winds area and its inherent
existing background noise, similar results are expected. In any case, a full noise report will be
produced at part of the Phase III activities.
3. Visual Impact
Wind turbines are tall and visible from a distance. Given the shoreline location, Kenai Winds will
be visible from ships and planes travelling around the Cook Inlet. Due to the wooded nature of the
surrounding areas, the wind turbines are not expected to be visible from residences. Whether the
turbines are viewed as an eyesore or an icon is clearly “in the eye of the beholder” and is debated
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at many wind projects. Kenai Winds is in an area of Alaska that already hosts a refinery, chemical
plant, an LNG terminal, and a gas-to-liquids facility. Apex Wind Energy is developing wind
projects at a number of similar sites around the United States, and there is a general consensus
among residents at other project sites that the visual impact of a wind project on the area is a great
improvement. We will not opine on either view but will produce a series of photo montages as
part of the Phase 3 activities. During its Phase 2 activities, Kenai Winds has produced the
following two photo-montages. Wind turbines were inserted into existing photographs at
approximately the scale they would appear to the human eye. Public reception to-date has been
favorable.
4. Aviation Impact
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Wind turbines do not pose a threat to area aviation. Turbines are typically less than 450 feet to the
top of rotation and planes fly far higher than that. However, the FAA has clear regulations as to
notification that we will adhere to. All developers building structures in excess of 200 feet are
required to notify the FAA. The turbines of the Kenai Wind project will appear on all aviation
maps for the area. The FAA was notified of the meteorological tower erected on the site in 2007.
FAA approved lighting will be installed on top of the turbines to advise pilots of their presence.
Kenai Winds filed a Notice of Proposed Construction or Alteration with the FAA in January 2009.
A Determination of No Hazard was issued in February 2009. The DNE states that the project does
not pose a hazard to aviation.
5. Construction Disruption
During construction there will be several trucks delivering major turbine components to the
Nikiski area. Such deliveries will obviously be for a short period of time, but we will work with
the state police and Department of Transportation and Public Facilities to ensure that all required
permits are obtained for wide loads and extended length road vehicles. In addition there will be a
greater labor presence in the area during construction, which is, generally a good thing. We will
coordinate with other industries in the area to avoid simultaneous peaks in labor demand as well as
use of port facilities.
6. Local Property Values
The impact of wind energy on property values is a poorly understood and poorly documented
phenomenon. Several major studies have been conducted in the continental United States yielding
results that are difficult to gauge and are often contradictory. These studies tend to focus solely on
the impact of wind turbines without analyzing any other factors. The recent boom in wind energy
development has coincided with both a bubble and a collapse in the US housing market. While
equal numbers of studies show positive, negative, and no impact from wind turbines; the results of
these studies are suspect due to the other factors affecting the housing market.
The clearest action a developer can undertake in this respect is related to public perceptions of
wind turbines. Negative attitudes toward wind energy may lower property values. These negative
attitudes are often linked to a perceived lack of local control over a project, and a sense of being
subjected to some form of injustice. Apex Wind Energy has consistently had good relations with
local residents at all of its project sites. Good communication with residents and local stakeholders
help inform everyone about the project and give a sense of local ownership. Once the site has been
better defined, Kenai Winds will meet with local Chambers of Commerce and other stakeholders
to answer questions and respond to concerns. Informal preliminary meetings with smaller groups
of residents have been favorable.
A research paper presented to the AWEA Windpower 2010 conference by Lawrence Berkeley
National Laboratories is included in Appendix V. The research study surveyed 24 wind projects in
9 states. It concluded there is an absence of evidence that wind turbines have had a downward
effect on nearby property values.
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.
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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 Grant Budget Form (filename KWGrantBudget3.doc) states the following:
Total Anticipated Project Cost: $10 million
Total Phase IV Cost: $10 million
Requested Phase IV Grant Funding: $2 million
Total Requested Grant Funding: $2 million
Applicant Matching Funds: $8 million
Total Development Cost: $0.2 million ($200,000)
Total Capital Cost: $10.2 million (includes construction, turbines and down payments,
balance of plant, interest during construction)
Kenai Winds, in requesting $2 million, is requesting a fixed amount. The requested amount
remains fixed regardless of any changes in the project capital cost. If the project cost goes up
or down, the requested grant amount remains the same.
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.)
Kenai Winds is negotiating use of existing Tesoro facilities during construction. This strategy
precludes the need for new office and storage facilities required by the construction phase of the
project. Use of highly skilled local contractors who are familiar with working on Tesoro capital
projects and knowledgeable of Tesoro’s safety policy and procedures will minimize surprises that
could otherwise delay construction.
Wind turbines are purchased under warranty. To insure warranty guarantees, an O&M contract
may be made with the turbine vendor. Typically the O&M contract term is for the first 5 years,
after which the vendor will continue to provide O&M support under a new contract. In some
cases, a third party contractor provides the O&M. This is typically for older model turbines that
have been in service for many years. As the turbines age and the domestic wind industry develops
Kenai Winds will explore this option.
An alternative option for O&M post commissioning would be a separate arrangement with HEA.
In September 2009 HEA expressed interest in being considered for an O&M contract. HEA has
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operated and maintained the Bradley Lake facility for AEA for many years.
Currently, Kenai Winds estimates the annual O&M costs to be $255,345, escalating with inflation
at 3% per year. The estimate includes the warranty, O&M, on-site project manager, and insurance.
This will be paid out of project revenues.
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
Kenai Winds has previously executed a Memorandum of Understanding with Homer Electric
regarding the sale of energy from this project at a rate of 7¢/kWh escalating at 3% per annum.
HEA subsequently terminated the MOU in order to focus its limited engineering resources on its
plan to secure natural gas fired generation independent of Chugach Electric
In August 2010, Kenai Winds submitted a similar offer to CEA. Kenai Winds anticipates signing
an MOU with CEA in October 2010, and signing a PPA in February 2011. The PPA proposal
assumed two scenarios. The first scenario includes the Federal Treasury Grant in lieu of the ITC, a
State PTC, and total funding from the AEA of $4.08MM. This results in a power price of 7¢/kWh
escalating at 3% per annum. In absence of these incentives, the power rate would be revised to
8.5¢/kWh escalating at 3% per annum.
Kenai Winds expects to receive a 9% unleveraged internal rate of return from the project.
4.4.4 Project Cost Worksheet
Complete the cost worksheet form which provides summary information that will be considered in
evaluating the project.
The explanation of assumptions/methodology used to generate the Project Cost Benefit
Worksheet are as follows:
Project output is estimated from an Energy Production Estimate provided by RAM Associates, a
world-class expert in wind energy meteorology.
Capital costs were developed from industry sources based on work for prior Apex Wind Energy
projects and confidential discussions with several wind turbine vendors.
Development costs were estimated from Apex Wind Energy’s internal data from prior projects,
and actual costs incurred to date on Kenai Winds.
O&M costs were developed from internal data, industry sources, and confidential discussions with
wind turbine vendors.
Fuel displacement was developed from Regulatory Commission of Alaska documents describing
the heat rate of Railbelt power plants. Working backwards from the known heat rate and estimated
generation from the Kenai Winds expansion, it was possible to estimate the fuel displacement.
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Alaska public benefits were developed from industry sources and a 2002 study on Agrium by the
Juneau-based McDowell Group. A detailed discussion below illustrates how the $9.9 MM benefit
to the public over the life of the project was determined.
Payback was developed by summing the annual savings to HEA based on probable future gas
prices outlined in Section 5 of the worksheet.
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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
DETERMINATION OF ANNUAL FUEL DISPLACEMENT. The annual fuel displacement is
shown in the Cost Benefit Worksheet for the project (filename KWCostworksheet3.doc). Project
benefits are shown in Section 5 of the worksheet. This RFA is for the Kenai Winds Expansion
which will generate 4.4 additional MW (10,200 MWh annually).
Kenai Winds estimated the natural gas displacement using information on the heat rate and
avoided cost of Railbelt power plants available from the Regulatory Commission of Alaska.
Working backwards from the known heat rate and estimated generation from the Kenai Winds
expansion, it is estimated the expansion project will displace 7,847,672 mcf of natural gas through
the life of the project (June 2010 – Dec. 2039).
DETERMINATION OF PROJECT LIFETIME PUBLIC BENEFIT. The public benefit that will
be realized is determined by forecasting the price of natural gas and combining this estimate with
the amount of natural gas displacement. The methodology is explained in detail below. The value
of the natural gas displaced and thus the benefit to the public is over $9.9 MM over the life of the
Kenai Winds Expansion.
Determination of natural gas baseline price. Kenai Winds has performed a detailed analysis on
historical Alaskan natural gas prices in order to determine a baseline price for natural gas going
forward over the life of the Kenai Winds project. The gas supply contracts between Chugach and
gas producers were used to determine prices because Homer Electric currently buys a large portion
of its electricity and natural gas through contracts with Chugach Electric. These contracts are
publicly available and very familiar to the Alaska Energy Authority; AEA has used the formulas
to evaluate a previous grant application. For completeness, the contract formula and its
application to derivation of public benefit is detailed below:
Chugach purchases natural gas using the complex formula shown below. The formula is based on
the historical costs of natural gas, fuel oil, and crude oil in the lower-48 states:
B = price of natural gas per mcf
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Pb = base price of natural gas when the contracts were signed in the late 1980’s
dG, dF, and dC = coefficients based on the increase in commodity prices since the late 1980’s
The final price is updated quarterly. The coefficients are recalculated each time based on
commodity prices for a period beginning 15 months prior to the fiscal quarter and ending 3
months prior to the fiscal quarter.
Projection of natural gas prices based on probability scenarios.
The Kenai Winds project is anticipated to be operational in 2010 and project life will be evaluated
to 2039. The price of natural gas per MMBTU from 2005 through 2030 is has been estimated by
Kenai Winds and is shown below.
Alaska Natural Gas Prices
0
5
10
15
20
25
Apr-05 Dec-07 Sep-10 Jun-13 Mar-16 Dec-18 Sep-21 May-24 Feb-27 Nov-29Real $/MMBTU$200oil MMBTU Parity
$200oil MMBTU Parity
$200oil $12NG
Prices Constant
Prices Constant
$100oil $7.55NG
$100oil $12NG
AEA Projection
$100oil $7.55NG
Chugach Projection
Probable Market Based
Probable Regulated
Known
Prices
Projected
Prices
Several pricing scenarios are included in this chart. In all cases, prepared by Kenai Winds, fuel oil
and crude oil have equivalent prices on a per MMBTU basis.
1. Oil reaches $200/bbl. Natural Gas reaches parity with oil a per MMBTU basis by Sept.
2009. Prices escalate at 3% per year (as per general inflation).
2. Oil reaches $200/bbl. Natural gas reaches $12/MMBTU by Aug. 2008. Prices escalate at
3% per year.
3. Starting from August 2008, prices escalate at 3% per year.
4. Oil reaches $100/bbl. Natural gas reaches $7.55/MMBTU in Oct. 2008. Prices escalate at
3% per year.
5. Oil reaches $100/bbl in Jan. 2009. Natural gas reaches $12/MMBTU in Aug. 2008. Prices
escalate at 3% per year.
6. Projections based on the Energy Information Administration Annual Energy Outlook, as
provided by the Alaska Energy Authority.
7. Projections from Chugach Electric based on a 2006 generation plan.
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8. In 2016, current gas contracts expire, the natural gas pipeline to the lower-48 states is
complete, and Alaska gas prices are de-regulated. The first 5 scenarios are each re-
represented; assuming Alaska gas prices are equivalent to Henry Hub.
9. Probabilities were assigned to each of the preceding cases. Two further gas price scenarios
were created based on the probability of each scenario. The first assumes gas prices are
regulated and ignores the 2016 Henry Hub cases. The second assumes gas prices are de-
regulated and includes all the cases.
The probabilities assigned to each scenario are given in the table below. If the price of natural gas
stays regulated post-2106, the pre-2016 probabilities apply.
Gas Price Probabilities
Scenario Pre-2016 Post-2016
$200oil, MMBTU Parity (market) 0.00% 2.00%
$200oil, MMBTU Parity 5.00% 4.00%
$100oil, $12NG (market) 0.00% 15.00%
$200oil, $12NG 5.00% 0.00%
Prices Constant (market) 0.00% 15.00%
Prices Constant 16.25% 10.00%
$100oil, $7.55NG (market) 0.00% 9.00%
$100oil, $12NG 21.25% 10.00%
AEA Projection 21.25% 15.00%
$100oil, $7.55NG 21.25% 15.00%
Chugach Projection 10.00% 5.00%
Total Probability 100% 100%
Using this probabilistic gas price model, Kenai Winds has estimated the avoided cost of electricity
through 2030. Chugach is the primary provider of electricity to HEA, so the Chugach avoided cost
was used as a starting point. Historical avoided costs, the heat rates of Chugach generating
stations, and the actual avoided cost filings were used to validate the model for the present day
cost of energy shown above. The annual impact of the Bradley Lake hydro project is also
included. The estimated avoided cost of electricity for the Kenai Winds Expansion was determined
to be $30,702,134 over the life of the project (NPV June 2010-Dec 2039).
AEA’s method for determining benefits to the Alaska public is to take the difference of the NPV
of displaced fuel and the NPV of O&M costs for the project. Thus $9,907,736 is the Alaska public
benefits realized over the life of the project. This does not take into account the economic
multiplier effects from employing workers during construction and operations on the Kenai
Peninsula.
PROJECT REVENUES. The anticipated annual revenue will be from proceeds of energy sales to
HEA which will be based on HEA’s avoided cost of purchasing 4.4 MW of power over the life of
the project (10,200 MWh annually) from carbon based alternatives. As HEA’s contracts for
energy from Bradley Lake and Chugach Electric expire in 2014, HEA is currently planning its
own generation portfolio to supply its load. In addition, most natural gas contracts are currently
based on historical indices from the contiguous 48 states. These contracts also expire in 2014. In
the event these changes to Alaskan energy markets significantly change the economics of an
avoided cost contract, HEA and Kenai Winds will renegotiate a pricing structure so the project
remains of maximum benefit to both parties. Kenai Winds expects to receive a 9% unleveraged
internal rate of return from the project.
As a renewable energy project, Kenai Winds can take advantage of a number of Federal incentives
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created by the American Reinvestment and Recovery Act (ARRA). The two primary incentives
are bonus depreciation and Treasury Department cash grant. Specifically, ARRA allows projects
achieving commercial operations in 2009 to depreciate up to 50% of the value of the project in the
first year of operations. Due to the economic downturn, this was not fully utilized nationwide
during 2009, and it is widely anticipated to be extended through 2010.
OTHER POSSIBLE INCENTIVES AND REVENUES
In addition, the American Recovery and Reinvestment Act of 2009 (ARRA) made changes to the
tax incentives available to renewable energy projects. Traditionally, wind projects could make use
of a Production Tax Credit (PTC) valued at 2¢/kWh. Given the economic downturn, it became
difficult to monetize the PTC as potential investors could not rely on a forward stream of revenue
required to use the tax credit. ARRA allows developers to claim a 30% investment tax credit (ITC)
worth up to 30% of the capital cost of the project. ARRA further allows developers to claim the
ITC as a cash grant from Treasury Department. This applies only to projects entering construction
in 2010, so Kenai Winds is clearly eligible. Given the recent advances in wind technology, it is
widely anticipated that the availability of the ITC will continue beyond 2010.
Another potential revenue stream comes from the sale of Renewable Energy Credits (RECs). At
present, Alaska does not have an in-state requirement for renewable energy. Kenai Winds is
currently formalizing its business plan for selling RECs. Potential buyers are Alaska utilities, large
industrial customers, and the United States Military (which does have a requirement to buy
renewable energy). The United States Congress is currently discussing a national renewable
energy requirement which would expand the market and demand for these credits and provide
considerable flexibility in monetizing this resource.
Another potential revenue incentive may materialize if some form of Alaska Senate Bill 31
Renewable Energy Production Tax Credit is passed and is found applicable to Kenai Winds. The
current version of SB31 would limit the total PTC to 10% of capital investment, allow the energy
producer to claim applicability of the tax credit for the first years of production, and allow the
credit to be used to offset taxes and/or allow the sale, assignment, exchange, or conveyance of the
tax credit.
NON ECONOMIC PUBLIC BENEFITS
A detailed discussion of public benefit of the Kenai Wind Expansion project can be found in
section 2.5 of this RFA. The public benefits not yet listed in this section include a) immediate
improvement of the energy security of Southcentral Alaska, b) immediate albeit temporary
construction employment in the hard-hit Nikiski industrial zone and the economic multiplier effect
related to it, c) long-term benefits of a more stable electrical grid which directly impacts consumer
safety and preserves jobs, d) long-term benefits related to retraining a workforce with on the job
experience in the expanding wind industry e) long-term benefits related to decreasing green house
gas emissions. The expansion of the Kenai Winds power facility from 10 to 15 MW will increase
the magnitude of the benefits cited above. The investment AEA would make in the Kenai Winds
project expansion directly aligns with its mission to assist in the development of safe, reliable, and
efficient energy systems which are sustainable and environmentally sound.
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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
Currently, Kenai Winds estimates the annual O&M costs to be $255,345, escalating with inflation
at 3% per year. The estimate includes the turbine warranty, O&M, on-site project manager, and
insurance. This will be paid out of project revenues. Post commissioning, the operations and
maintenance may be performed partially by the turbine vendor, partially by the existing skilled
workforce, or perhaps under contract to the local power company, HEA. Regardless of the
optimal O&M chosen, the location on the Kenai Peninsula gives Kenai Winds unrivaled access to
a highly skilled workforce that can be rapidly retrained to service the equipment. The project is
located on Kenai Spur Hwy in the middle of the Nikiski industrial district with an available
workforce specially trained for rotating equipment, high voltage equipment, and modern safety
procedures. Furthermore, UAA has recently announced plans to have the Alaska Vocational
Technical Center (AvTec) develop the curriculum for an occupational certificate in renewable
fuels, specifically targeting wind industry operations and maintenance. AvTec is located in
Seward, Alaska on the Kenai Peninsula. Regarding financing, Kenai Winds is currently in
negotiations with a number of interested parties on the financing of the project. A number of
parties will be involved and bring investment in a number of forms including but not limited to:
debt, equity, tax equity, power price hedges, vendor financing, loan guarantees, and non-
traditional lenders. Note that Tim Ryan, a partner in Apex Wind Energy and Kenai Winds,
arranged project financing for over 19.000 MW of power projects prior to his entering the wind
energy industry. He arranged financing for the 135 MW Judith Gap wind project in 2005. In
2006, Apex Wind Energy arranged for construction and permanent financing of the 20 MW Steel
Winds project. We have the experience and ability to finance the Kenai Winds project.
The main operational challenge will be the intermittent nature of wind power generation. Energy
is only produced when the wind blows. Intermittent generation of this type requires a modern
electric utility grid with the flexibility to accommodate intermittent generation, a workforce
knowledgeable in understanding wind rate predictions, and, of course, excellent SCADA and
human communications. HEA and CEA have demonstrated the willingness to learn the core
competencies required to incorporate wind energy into the industrial power grid. As part of its
operations, Kenai Winds will provide day-ahead and real-time energy production estimates to
HEA and CEA to aid in dispatching other generation, which will mitigate this intermittency.
As part of its interconnection discussions with HEA, Kenai Winds has undertaken two initiatives
to better understand the intermittency of the project output. First, the meteorological tower was
retrofitted with new dataloggers to record at 1-minute intervals. The typical data interval is 10
minutes, which is acceptable for long-term trends and for project economic forecasting. As the
inertia of a wind turbine rotor acts on a timescale shorter than 10 minutes, 1 minute data is needed
to understand the short term variability and grid frequency regulation requirements. This
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equipment was installed in April 2010.
In addition to retrofitting its meteorological tower, Kenai Winds also commissioned a forecast
accuracy study with AWS Truepower. AWS examined the complete record of 10 minute data, and
treated it as if it were a real-time stream of data rather than a historical record. This data and
statewide meteorological data inserted into AWS’s meso-scale models in the same manner in
which AWS creates forecasts for NYISO and ERCOT. The result was a synthetic wind forecast
which is compared to the actual meteorological data recorded. The accuracy of AWS forecasting
methods for Alaska could then be verified. This data was provided to HEA and will be provided to
CEA.
As with any industrial production facility, ongoing support of the Kenai Winds facility will be a
primary concern to all stakeholders in the LLC. The advantage of a wind energy facility is its low
cost to maintain. Once the targeted return on investment is achieved, the project continues to
provide revenue as an operating asset. Since there is no fuel cost, this revenue is easily predictable
and presents a significant value to the owner. With proper maintenance procedures the project life
can be extended beyond 20 years and be a valuable asset for many years beyond that.
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.
Kenai Winds LLC will complete Phase III- Final Design and Permitting of the Kenai Winds
facility by May 2011 and will start Phase IV-Construction, Commissioning, Operation, and
Reporting thereafter. A complete timeline of milestones is listed in Section 3.3 of this RFA and
the Gantt chart time line can be found in Appendix B. This project is in a mode of executing
project aspects that have been well defined. This project has the full support of the community it
will serve. Kenai Winds has received $80,000 from the AEA’s first round of solicitations under
this grant project and $2,000,000 from the second round.
This RFP is for expanding the wind project from 10 to 15 MW per the request of HEA.
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 merits of the Kenai Winds power facility are recognized and endorsed by the public of the
Kenai Peninsula Borough through their representatives. The following statements of support can
be found in the Appendices as noted:
Letter of Support from Kenai Peninsula Borough Mayor is in Appendix K.
Letter of Support from Chugach Electric is in Appendix L.
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Letter of Support from HEA General Manager is in Appendix E.
Letter of Support from Tesoro Alaska Company Senior Management is Appendix M.
Kenai Peninsula Borough Resolution 2007-009 Concerning a Local Climate Change
Implementation Plan is Appendix N.
Kenai Peninsula Borough Resolution 2008-007 Concerning Reduction in Greenhouse Gas
Emissions is Appendix O.
The merits of the Kenai Winds power facility are recognized and endorsed by state of Alaska
representatives.
Letter of Support from Alaska State House of Representatives Finance Committee Co-Chair Mike
Chenault is Appendix P.
Furthermore, the Alaska Energy Authority has recognized the merit of the Kenai Winds power
facility by granting prior stages of the project $2.08 MM. The expansion of the Kenai Winds
power facility from 10 to 15 MW will increase the magnitude of the Kenai Winds power facility.
The investment AEA would make in the Kenai Winds project expansion directly aligns with its
mission to assist in the development of safe, reliable, and efficient energy systems which are
sustainable and environmentally sound.
Page 34
Renewable Energy Fund
Grant Application Round IV
AEA11-005 Grant Application
SECTION 9 – GRANT BUDGET
Tell us how much you want in grant funds Include any investments to date and funding sources,
how much is being requested in grant funds, and additional investments you will make as an
applicant.
Include an estimate of budget costs by milestones using the form – GrantBudget3.doc
The total budget through construction of the Kenai Winds project is $10 million. This grant
application is for $2 million, leaving a funding requirement of $8 million. This will be provided
by a combination of funds from Apex Wind Energy and project-specific financing. To date,
Apex Wind has provided $165,000 in funding for Phases 1, 2, and 3 of the project.
ARRA as discussed in Section 5 has caused many changes in the business structure of a
commercial wind energy facility. A significant portion of the financing will be sourced from “tax
equity” investors that can monetize the depreciation benefits of the project. In addition, 30% of
the project cost will be provided by the Federal Government in the form of a cash grant in-lieu of
tax credits. Apex Energy has experience in monetizing the tax benefits and has excellent
relationships with such tax investors. These tax incentives typically allow Independent Power
Producers (IPPs) to produce renewable energy at rates less than regulated electric utilities.
Additional amounts of capital will be financed using the projected cash flow of the project. This
may be in the form of debt and/or equity. Apex Wind has already entered into discussions with a
number of potential investors including banks, equity funds, and native corporations. Finally,
construction financing will be required, which usually takes the form of short-term loans. Again,
Apex Wind Energy has excellent relationships with providers of these kinds of financing.
Note that Tim Ryan, a partner in Apex Wind Energy, arranged project financing for over 19.000
MW of power projects prior to his entering the wind energy industry. He arranged financing for
the 135 MW Judith Gap wind project in 2005. In 2006, Apex Wind Energy arranged for
construction and permanent financing of the 20 MW Steel Winds project. We have the
experience and ability to finance the Kenai Winds project.
The Corporate Authorizations Letter required for the RFA is in Appendix Q.
Page 35
Renewable Energy Fund
Grant Application Round IV
AEA11-005 Grant Application
SECTION 9 – ADDITIONAL DOCUMENTATION AND CERTIFICATION
SUBMIT THE FOLLOWING DOCUMENTS WITH YOUR APPLICATION:
A. Contact information, resumes of Applicant’s Project Manager, key staff, partners,
consultants, and suppliers per application form Section 3.1 and 3.4.
B. Cost Worksheet per application form Section 4.4.4.
C. Grant Budget Form per application form Section 9.
D. Letters demonstrating local support per application form Section 8.
E. An electronic version of the entire application on CD per RFA Section 1.6.
F. Authorized Signers Form.
G. Governing Body Resolution or other formal action taken by the applicant’s
governing body or management per RFA Section 1.4 that:
- Commits the organization to provide the matching resources for project at the
match amounts indicated in the application.
- Authorizes the individual who signs the application has the authority to
commit the organization to the obligations under the grant.
- Provides as point of contact to represent the applicant for purposes of this
application.
- Certifies the applicant is in compliance with applicable federal, state, and local,
laws including existing credit and federal tax obligations.
H. CERTIFICATION
The undersigned certifies that this application for a renewable energy grant is truthful
and correct, and that the applicant is in compliance with, and will continue to comply
with, all federal and state laws including existing credit and federal tax obligations.
Print Name Paul Curran
Signature
Title Senior Executive Vice President
Date 9/14/2010
Page 36
Renewable Energy Fund Round 4
Project Cost/Benefit Worksheet
RFA AEA11-005 Application Cost Worksheet
Please note that some fields might not be applicable for all technologies or all project
phases. The level of information detail varies according to phase requirements.
1. Renewable Energy Source
The Applicant should demonstrate that the renewable energy resource is available on a
sustainable basis.
Annual average resource availability. 98% (24.3% net capacity factor)
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
ii. Rated capacity of generators/boilers/other
iii. Generator/boilers/other type
iv. Age of generators/boilers/other
v. Efficiency of generators/boilers/other
b) Annual O&M cost (if system is part of the Railbelt grid, leave this section blank)
i. Annual O&M cost for labor
ii. Annual O&M cost for non-labor
c) Annual electricity production and fuel usage (fill in as applicable) (if system is part of the
Railbelt grid, leave this section blank)
i. Electricity [kWh]
ii. Fuel usage
Diesel [gal]
Other
iii. Peak Load
iv. Average Load
v. Minimum Load
vi. Efficiency
vii. Future trends
d) Annual heating fuel usage (fill in as applicable)
i. Diesel [gal or MMBtu]
ii. Electricity [kWh]
iii. Propane [gal or MMBtu]
iv. Coal [tons or MMBtu]
v. Wood [cords, green tons, dry tons]
vi. Other
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.
Page 37
Renewable Energy Fund Round 4
Project Cost/Benefit Worksheet
RFA AEA11-005 Application Cost Worksheet
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]
4.4 MW (wind)
b) Proposed annual electricity or heat production (fill in as applicable)
i. Electricity [kWh] 10,200 MWh
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]
iv. Other
4. Project Cost
a) Total capital cost of new system $10,000,000
b) Development cost $200,000
c) Annual O&M cost of new system $255,345
d) Annual fuel cost $0
5. Project Benefits
a) Amount of fuel displaced for
i. Electricity 7,847,672 mcf natural gas (June 2010 – Dec 2039)
ii. Heat
iii. Transportation
b) Current price of displaced fuel $30,702,134 (NPV of June 2010 – Dec 2039)
c) Other economic benefits
d) Alaska public benefits $9,907,736
6. Power Purchase/Sales Price
a) Price for power purchase/sale 7¢/kWh escalating 3% per year
7. Project Analysis
a) Basic Economic Analysis
Project benefit/cost ratio 20 yr NPV basis: 1.52
Payback (years) 6.18 years
Page 38
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 (List milestones based on phase and type of project. See Attached Milestone list. ) $ $ $ Remaining Wind Turbine Payments $1,525,000 $6,150,970 Cash $7,675,970 Engineering $0 $46,697 Cash $45,697 Balance of Plant $250,000 $856,166 Cash $1,106,166 Construction $125,000 $523,839 Cash $648,839 Contractor Fees $100,000 $242,255 $342,255 Contingency $0 $180,073 $180,073 $ $ $ $ $ $ $ $ TOTALS $2,000,000 $8,000,000 $10,000,000 Budget Categories: Direct Labor & Benefits $ $ $ Travel & Per Diem $ $ $ Equipment $1,775,000 $7,008,136.11 $8,783,136 Materials & Supplies $ $45,697.15 $45,697 Contractual Services $225,000 $946,167 $1,117,167 Construction Services $ $ $ Other $ $ $ TOTALS $2,000,000 $8,000,000 $10,000,000 Applications should include a separate worksheet for each project phase (Reconnaissance, Feasibility, Design and Permitting, and Construction)- Add additional pages as needed Page 39
Page 40
Renewable Energy Fund
Grant Application Round IV
AEA11-005 Grant Application
APPENDIX A: APEX WIND ENERGY RESUMES
Page 41
•
Renewable Energy Fund
Grant Application Round IV
AEA11-005 Grant Application
APPENDIX B: PROJECT SCHEDULE
Page 59
IDTask NameStartFinishPredecessorsDuration0Kenai Winds Project ScheduleThu 3/1/07Tue 12/13/1162.45 mons1Phase 1Thu 3/1/07Fri 8/24/076.35 mons2Preliminary Feasibility StudyThu 3/1/07Fri 7/13/0797 days3Preliminary Economic ModelThu 4/12/07Fri 7/13/072FF67 days4Preliminary Stakeholder MeetingsMon 7/16/07Fri 8/24/07230 days5Phase 2Mon 8/27/07Wed 8/3/1151.4 mons6Meteorological AssessmentMon 8/27/07Tue 12/7/1042.85 mons7Access Agreement with TesoroMon 8/27/07Fri 10/5/0741.5 mons8Meteorological Tower InstallationMon 10/29/07Mon 10/29/077FS+16 days0 mons9Meteorological StudyWed 10/31/07Tue 3/30/108FS+1 day31.5 mons108 Month Meteorological AssessmentWed 6/11/08Tue 8/12/089SS+8 mons45 days1112 Month SummaryWed 10/29/08Tue 12/9/089SS+13 mons30 days122 Year Energy EstimateWed 9/30/09Tue 10/20/099SS+25 mons15 days13Short Interval Meteorological AssessmentWed 3/31/10Tue 12/7/1099 mons14Update Economic ModelWed 8/13/08Tue 8/19/08105 days15Infrastructure ReviewWed 8/13/08Mon 8/18/0814SS4 days16Preliminary Environmental ReviewWed 8/13/08Tue 9/16/0815SS25 days17Preliminary Plant LayoutWed 9/17/08Tue 9/30/081610 days18AEA Grant Funding Rounds I - IVWed 9/3/08Wed 8/3/1138.05 mons19AEA Round I & II Funding AnnouncementWed 9/3/08Wed 9/3/080 mons20Application PrepWed 9/3/08Wed 10/8/081926 days21Round I Preconstruction Application SubmittedWed 10/8/08Wed 10/8/0820,170 mons22Application PrepThu 10/9/08Mon 11/10/082123 days23Round II Construction Application SubmittedMon 11/10/08Mon 11/10/08220 mons24Round I Project ReviewThu 10/9/08Wed 2/25/09215 mons25Kenai Winds Awarded Round I FundingWed 2/25/09Wed 2/25/09240 mons26Round II Project ReviewThu 2/26/09Wed 3/25/09251 mon27Kenai Winds Awarded Round II FundingWed 3/25/09Wed 3/25/09260 mons28Scope Discusisons with AEAThu 3/26/09Wed 11/4/09278 mons29Grant Agreement NegotiationsThu 11/5/09Wed 3/3/10284.25 mons30Kenai Winds Grant Agreement ExecutedWed 3/3/10Wed 3/3/10290 mons31Round III Funding AnnouncementWed 10/7/09Wed 10/7/0923FS+237 days0 mons32Application PrepThu 10/8/09Tue 11/10/093124 days10/299/310/811/102/253/253/310/7Qtr 4Qtr 1Qtr 2Qtr 3Qtr 4Qtr 1Qtr 2Qtr 3Qtr 4Qtr 1Qtr 2Qtr 3Qtr 4Qtr 1Qtr 2Qtr 3Qtr 4Qtr 1Qtr 2Qtr 3Qtr 4Qtr 120072008200920102011TaskSplitProgressMilestoneSummaryProject SummaryExternal TasksExternal MileTaskSplitProgressMilestoneSummaryPage 1Project: Kenai Winds Project ScheduleDate: Tue 9/14/10Page 60
IDTask NameStartFinishPredecessorsDuration33Round III Construction Application SubmittedTue 11/10/09Tue 11/10/09320 mons34Round III Project ReviewWed 11/11/09Tue 4/27/10336 mons35Round III Legislative ReviewWed 4/28/10Tue 6/8/10341.5 mons36Round III Budget CutsTue 6/8/10Tue 6/8/10350 mons37Round IV Funding AnnouncementWed 7/21/10Wed 7/21/1036FS+31 days0 mons38Application PrepThu 7/22/10Wed 9/15/103740 days39Round IV Construction Application SubmittedWed 9/15/10Wed 9/15/10380 mons40Round IV Project ReviewThu 9/16/10Wed 5/11/11398.5 mons41Grant Agreements ExecutedWed 8/3/11Wed 8/3/1140FS+3 mons0 mons42Phase 3Mon 10/8/07Tue 11/29/1154.1 mons43Site ControlWed 5/14/08Fri 2/4/1135.65 mons44Lease Term Sheets with TesoroWed 5/14/08Tue 9/2/089SS+140 days80 days45Updated JDA with TesoroWed 9/3/08Tue 3/31/0944150 days46Tesoro Lease Option AgreementFri 7/24/09Mon 9/7/0945,6145 edays47Neighboring Landowner DiscussionsMon 7/27/09Fri 10/16/0946SS3 mons48Lease NegotiationsMon 10/18/10Fri 12/10/10702 mons49Execute Tesoro LeaseFri 2/4/11Fri 2/4/1170,720 mons50Execute Neighbor LeasesFri 2/4/11Fri 2/4/1170,720 mons51PermittingTue 11/11/08Fri 2/4/1129.2 mons52Coastal Zone Consistency Application PrepTue 11/11/08Tue 1/20/092351 days53CZM ReviewWed 1/21/09Fri 2/6/095213 days54Kenai Winds Determined to be Consistent with CZMFri 2/6/09Fri 2/6/09530 mons55FAA Obstruction EvaluationMon 1/26/09Thu 2/12/0953SS+3 days14 days56Determination of No Hazard Issued by FAAThu 2/12/09Thu 2/12/09550 mons57Permit Review by Ecology and EnvironmentFri 2/13/09Thu 3/12/0956,5520 days58DoT Right of Way PermitsMon 12/13/10Fri 2/4/11862 mons59OfftakeMon 10/8/07Fri 4/29/1146.5 mons60Preliminary Discussions with Homer ElectricMon 10/8/07Fri 7/25/08710.5 mons61Offtake / Interconnect Term Sheets with HEAFri 4/3/09Fri 7/24/0978112 edays62Signed Term Sheet with HEAFri 7/24/09Fri 7/24/09610 mons63Chugach DiscussionsMon 7/27/09Fri 10/16/096260 days64PPA NegotiationsMon 10/19/09Fri 3/5/10635 mons65Signed MOU with HEAFri 3/5/10Fri 3/5/1064,810 mons11/106/87/219/158/32/42/42/62/127/243/5Qtr 4Qtr 1Qtr 2Qtr 3Qtr 4Qtr 1Qtr 2Qtr 3Qtr 4Qtr 1Qtr 2Qtr 3Qtr 4Qtr 1Qtr 2Qtr 3Qtr 4Qtr 1Qtr 2Qtr 3Qtr 4Qtr 120072008200920102011TaskSplitProgressMilestoneSummaryProject SummaryExternal TasksExternal MileTaskSplitProgressMilestoneSummaryPage 2Project: Kenai Winds Project ScheduleDate: Tue 9/14/10Page 61
IDTask NameStartFinishPredecessorsDuration66HEA MOU TerminationFri 5/7/10Fri 5/7/1065,830 mons67Initial Chugach Offtake DiscussionsMon 5/10/10Fri 8/6/10663.25 mons68Offtake Proposal Submitted to CEAFri 8/6/10Fri 8/6/10670 mons69MOU Negotiations with CEAMon 8/9/10Fri 10/15/10682.5 mons70Signed MOU with CEAFri 10/15/10Fri 10/15/10690 mons71PPA Negotiations with CEAMon 10/18/10Fri 12/10/10702 mons72Signed PPA with CEAFri 2/4/11Fri 2/4/1171,870 mons73Prepare Regulatory FilingsMon 2/7/11Fri 3/4/11721 mon74RCA ReviewMon 3/7/11Fri 4/29/11732 mons75RCA ApprovalFri 4/29/11Fri 4/29/11740 mons76InterconnectionFri 11/28/08Fri 2/4/1128.5 mons77Negotiation Interconnection Requirements Study ScopeFri 11/28/08Fri 12/12/0823FS+14 days14 edays78System Impact StudyMon 12/15/08Fri 4/3/097780 days79Chugach DiscussionsMon 7/27/09Fri 10/16/096160 days80Extended System Study Scope NegotiationsMon 10/19/09Fri 11/13/09791 mon81Intermittency EvaluationMon 11/16/09Fri 3/5/10804 mons82Wind Forecast Accuracy StudyMon 3/8/10Fri 6/11/10813.5 mons83Dispatch EvaluationMon 3/8/10Fri 5/7/10812.25 mons84Legislative Funding Request for Frequency RegulationMon 3/8/10Fri 5/28/10813 mons85Legislative Funding CutTue 6/8/10Tue 6/8/1084,360 mons86CEA System Integration StudyMon 10/18/10Fri 12/10/10702 mons87Interconnection Agreement NegotiationsMon 12/13/10Fri 2/4/11862 mons88Signed Interconenction Agreeement with CEA and HEAFri 2/4/11Fri 2/4/11870 mons89Turbine ProcurementWed 4/1/09Tue 11/29/1134.75 mons90Initial Vendor DiscussionsWed 4/1/09Tue 10/13/09457 mons91Initial Term SheetsWed 10/14/09Tue 2/2/1062,904 mons92Turbine SelectionFri 10/15/10Sun 11/14/10701 emon93New Term SheetsFri 12/10/10Sun 1/9/11711 emon94Negotiation of Turbine ContractsSun 1/9/11Tue 2/8/11931 emon95Turbine Reservation FeeTue 2/8/11Tue 2/8/11940 mons96Signature of Turbine ContractsFri 4/29/11Fri 4/29/1195,750 mons97DownpaymentFri 5/6/11Fri 5/6/1196FS+1 wk0 mons98Manufacture of TurbinesTue 2/8/11Fri 7/8/11955 emons5/78/610/152/44/296/82/42/84/295/6Qtr 4Qtr 1Qtr 2Qtr 3Qtr 4Qtr 1Qtr 2Qtr 3Qtr 4Qtr 1Qtr 2Qtr 3Qtr 4Qtr 1Qtr 2Qtr 3Qtr 4Qtr 1Qtr 2Qtr 3Qtr 4Qtr 120072008200920102011TaskSplitProgressMilestoneSummaryProject SummaryExternal TasksExternal MileTaskSplitProgressMilestoneSummaryPage 3Project: Kenai Winds Project ScheduleDate: Tue 9/14/10Page 62
IDTask NameStartFinishPredecessorsDuration99Progress PaymentSat 4/9/11Sat 4/9/1198SS+2 emons0 mons100Ex Works PaymentFri 7/8/11Fri 7/8/11980 mons101Towers at SiteMon 7/11/11Fri 8/5/111001 mon102Turbines at SiteMon 7/11/11Fri 8/5/111001 mon103Blades at SiteMon 7/11/11Fri 8/5/111001 mon104Commissioning PaymentTue 11/15/11Tue 11/15/111670 mons105Vendor Commissioning SupportWed 11/16/11Tue 11/29/111672 wks106Final PaymentTue 11/29/11Tue 11/29/111680 mons107EngineeringMon 7/27/09Fri 4/1/1122 mons108Interviews and Contractor Site VisitsMon 7/27/09Fri 11/13/09624 mons109Finalize Site LayoutMon 10/19/09Fri 11/13/09471 mon110Preliminary Engineering and Cost EstimateMon 11/16/09Fri 12/11/091091 mon111Scope and Bid Detailed EngineeringMon 10/18/10Fri 11/12/10701 mon112Detailed EngineeringMon 11/15/10Fri 1/7/111112 mons113Bid EPCMon 2/7/11Fri 3/4/11112,721 mon114Negotiate and Execute EPC ContractMon 3/7/11Fri 4/1/111131 mon115FinancingMon 7/27/09Fri 4/29/1123 mons116Initial Bank MeetingsMon 7/27/09Fri 10/30/09623.5 mons117Initial Equity Provider MeetingsMon 7/27/09Fri 10/30/09623.5 mons118Initial USDA Loan Guarantee MeetingsMon 11/2/09Fri 11/27/091161 mon119Detailed Finance MeetingsWed 2/3/10Tue 3/30/10912 mons120USDA Class II Environmental AssessmentWed 2/3/10Tue 12/7/109111 mons121USDA Loan Guarantee ApprovalWed 12/8/10Tue 3/29/111204 mons122Finance NegotiationsMon 10/18/10Fri 2/4/11704 mons123Financial CloseFri 4/29/11Fri 4/29/1188,95,114,121,1220 mons124Phase 4 - ConstructionMon 5/2/11Tue 12/13/118.1 mons125Full Notice to ProceedMon 5/2/11Fri 5/6/111231 wk126Order Long Lead ItemsFri 5/6/11Fri 5/6/111250 mons127EngineeringMon 5/9/11Fri 6/24/111.75 mons128ElectricalMon 5/9/11Fri 5/27/111253 wks129Foundation - DesignMon 5/9/11Fri 5/27/111253 wks130Site Plan and Detail DrawingsMon 5/30/11Fri 6/10/111292 wks131Construction PlanMon 6/13/11Fri 6/17/111305 days4/97/811/1511/294/295/6Qtr 4Qtr 1Qtr 2Qtr 3Qtr 4Qtr 1Qtr 2Qtr 3Qtr 4Qtr 1Qtr 2Qtr 3Qtr 4Qtr 1Qtr 2Qtr 3Qtr 4Qtr 1Qtr 2Qtr 3Qtr 4Qtr 120072008200920102011TaskSplitProgressMilestoneSummaryProject SummaryExternal TasksExternal MileTaskSplitProgressMilestoneSummaryPage 4Project: Kenai Winds Project ScheduleDate: Tue 9/14/10Page 63
IDTask NameStartFinishPredecessorsDuration132O&M PlanMon 6/20/11Fri 6/24/111315 days133Owner ApprovalMon 6/13/11Fri 6/17/111301 wk134Material & Equipment ProcurementFri 5/6/11Fri 9/9/114.5 mons135PMTs and ConductorFri 5/6/11Fri 9/9/1112618 ewks136UG MaterialMon 7/4/11Fri 7/29/11133FS+2 wks4 wks137OH MaterialMon 7/4/11Fri 7/29/11133FS+2 wks4 wks138Metering & RelaysMon 7/4/11Fri 7/15/11133FS+2 wks2 wks139Embeds & BoltsMon 7/4/11Fri 7/15/11133FS+2 wks2 wks140Start of ConstructionFri 7/15/11Fri 7/15/111390 mons141WTG FoundationsMon 7/18/11Fri 9/30/112.75 mons142ExcavationMon 7/18/11Fri 8/5/111403 wks143Additoinal Sub-Grad Prep & Mud MatsMon 7/25/11Fri 8/12/11142SS+1 wk3 wks144Install Steel, Bolt Cage, & ConduitsThu 7/28/11Wed 8/10/11143SS+3 days2 wks145PourTue 8/2/11Mon 8/15/11144SS+3 days2 wks146Install GroundingFri 8/5/11Thu 8/18/11145SS+3 days2 wks147BackfillWed 8/10/11Tue 8/23/11146SS+3 days2 wks148PMT Pads & ConduitMon 9/12/11Fri 9/30/117SS+1 wk,135,1363 wks149Collection SystemWed 8/17/11Fri 10/14/112.15 mons150Trench, Cable, & BackfillWed 8/17/11Tue 8/30/11136,147SS+1 wk2 wks151OverheadWed 8/17/11Tue 8/30/11137,147SS+1 wk2 wks152Set PMT's & Terminate MVMon 10/3/11Fri 10/7/11148,1501 wk153TestMon 10/10/11Fri 10/14/111521 wk154SubstationMon 10/10/11Fri 11/18/111.5 mons155Test Existing EquipmentMon 10/10/11Fri 10/21/11153SS2 wks156Install New MeteringMon 10/24/11Fri 11/4/11155,1382 wks157Install New RelaysMon 10/24/11Fri 11/4/11155,1382 wks158Connect to Collection SystemMon 11/7/11Fri 11/11/11156,1571 wk159Collection System BackfeedMon 11/14/11Fri 11/18/111581 wk160WTG InstallationWed 8/24/11Tue 11/15/113 mons161Set Converters, Bases, Lower Mids, & GroutWed 8/24/11Tue 9/20/11101,1471 mon162Set Upper Mids, Tops, & NacellesWed 9/7/11Tue 10/4/11102,161SS+2 wks1 mon163Install RotorsWed 10/5/11Tue 11/1/11103,1621 mon164Install Wiring & ElevatorsWed 10/12/11Tue 11/8/11163SS+1 wk1 mon7/15Qtr 4Qtr 1Qtr 2Qtr 3Qtr 4Qtr 1Qtr 2Qtr 3Qtr 4Qtr 1Qtr 2Qtr 3Qtr 4Qtr 1Qtr 2Qtr 3Qtr 4Qtr 1Qtr 2Qtr 3Qtr 4Qtr 120072008200920102011TaskSplitProgressMilestoneSummaryProject SummaryExternal TasksExternal MileTaskSplitProgressMilestoneSummaryPage 5Project: Kenai Winds Project ScheduleDate: Tue 9/14/10Page 64
IDTask NameStartFinishPredecessorsDuration165Final Walkdowns and PunchlistsWed 10/26/11Tue 11/8/11164SS+2 wks2 wks166Backfeed and Turnover to CommissionWed 11/9/11Tue 11/15/111651 wk167Guaranteed Infrastructure CompletionTue 11/15/11Tue 11/15/111660 mons168CommissioningWed 11/16/11Tue 11/29/111672 wks169Roads Reshaped & ReclaimedWed 11/30/11Tue 12/13/111682 wks170Commerical OperationsTue 11/29/11Tue 11/29/111680 mons11/1511/29Qtr 4Qtr 1Qtr 2Qtr 3Qtr 4Qtr 1Qtr 2Qtr 3Qtr 4Qtr 1Qtr 2Qtr 3Qtr 4Qtr 1Qtr 2Qtr 3Qtr 4Qtr 1Qtr 2Qtr 3Qtr 4Qtr 120072008200920102011TaskSplitProgressMilestoneSummaryProject SummaryExternal TasksExternal MileTaskSplitProgressMilestoneSummaryPage 6Project: Kenai Winds Project ScheduleDate: Tue 9/14/10Page 65
Renewable Energy Fund
Grant Application Round IV
AEA11-005 Grant Application
APPENDIX C: EPC STATEMENTS OF QUALIFICATIONS
Page 66
September 12, 2008
Josh Berkow
BQ Energy, LLC
20 Jon Barrett Road
Patterson, NY 12563
Re: Signal Wind Energy: Statement of Qualifications
Dear Josh:
We are very interested in discussing ways that Signal Wind can assist you with your future Projects.
Our Preconstruction Services division offers a variety of services to aid wind energy owners and
developers in bringing their projects from the conceptual stage to construction. Currently, we are
providing preconstruction assistance to a variety of developers and would be happy to discuss with
you ways in which we can help you bring your projects to fruition.
Our Projects division is currently constructing a 100MW project in Kansas for BP Alternative Energy,
as well as over 200 MW in other areas of the United States for other owners, including Noble
Environmental Power, an affiliate of JP Morgan.
Signal Wind is one of the most experienced Balance of Plant general contractors in the United
States. I am sending this letter to give you and your team more information about Signal Wind and
its qualifications. Included in this letter is information about our parent company, our project
history, our organizational structure, our Safety Program and our financial strength.
A. Statement of Qualifications
Signal Wind is a subsidiary of EMJ Corporation, one of the nation’s largest commercial general
contractors. EMJ is consistently ranked as one of the nation’s top general contractors in terms of
annual revenue volume (59th in 2007, Engineering News Record Magazine; 59th in 2006, Building
Design and Construction Magazine;), total square footage built (4th in 2005, Retail Operations and
Construction Magazine) and shopping center square footage built (3rd in shell space and 3rd in
interior space for 2005, Retail Traffic Magazine). EMJ has offices in Chattanooga, Dallas, Boston
and Sacramento, and is licensed in 45 states. EMJ has an unlimited bonding capacity
Signal Wind brings the professionalism and expertise of EMJ to the wind industry. Signal Wind is a
design/build general contractor and provides Balance of Plant (BOP) services for wind energy
projects located throughout the continent. Our BOP contracts normally include basic infrastructure
such as foundation design and construction for each wind turbine, access road design and
construction to simplify wind turbine transport to each foundation, installation of turbines and
Page 67
towers, an electrical collection system to bring the power to one point, design and construction of
the project substation(s) and the interconnection of the wind farm to the power grid. The highly
qualified project management team we have assembled has an established record of excellence
within the wind energy industry, satisfying the requirements of a wide range of clients.
Signal Wind utilizes experienced wind project personnel along with proven general contractor and
project management systems to complete projects on schedule and within budget. As a full EPC
Balance of Plant contractor, Signal Wind is experienced and fully capable in all aspects of wind farm
balance of plant construction, including the following:
• Design and construction of civil infrastructure, including: roads, crane pads, operations and
maintenance buildings and all related structures;
• Design and construction of WTG foundations;
• Design and construction of electrical collection systems;
• Design and construction of substations and interconnection facilities;
• Design and construction of transmission lines; and
• Turbine erection.
Signal Wind has been an innovator in considering and implementing design alternatives that save
our clients money and time with no sacrifice of quality. Our philosophy is to work with our clients to
design a project that is optimized in the areas of cost, construction time, quality and safety.
Below is a partial list of Signal Wind projects:
Location Project Information
Panhandle, TX 76 GE 1.5MW turbines—114 MW
Signal Wind’s scope of work includes the design and construction of all aspects of this project,
which will ultimately be a total of 240 MW. Phase I consists of two (2) 34.5kV/115kV substations,
76 WTGs, all civil infrastructure, foundations, underground collection system, turbine erection and
overhead transmission to a central 115kV switchyard. Phase II will begin in early 2009 and will
consist of 84 GE 1.5 MW WTGs.
Medicine Lodge, KS 40 Clipper C-96 turbines – 100MW
Signal Wind’s scope of work includes the design and construction of all aspects of typical BOP
construction including all civil infrastructure, WTG foundations, electrical collection system, O&M
Building and turbine erection.
Forest Creek, TX 54 Siemens 2.3 MW turbines—124MW
Signal Wind’s scope of work included the design and construction of all aspects of typical BOP
construction including all civil infrastructure, WTG foundations, electrical collection system,
substation (for this project as well as an adjacent 100+ MW project) and 5+ miles of 138kV
transmission line. Turbine erection was performed by the manufacturer.
Panhandle, TX 38 Suzlon S88 2.1 MW turbines-80MW
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Signal Wind’s scope of work included the design and construction of all aspects of typical BOP
construction, including all civil infrastructure, WTG foundations, electrical collection system,
substation and turbine erection.
Texhoma, TX 16 Suzlon S88 2.1 MW turbines-34MW
Signal Wind’s scope of work included the design and construction of all aspects of typical BOP
construction, including all civil infrastructure, WTG foundations, electrical collection system and
turbine erection.
Snyder, TX 21 Vestas V90 3.0 MW turbines-63MW
Signal Wind’s scope of work includes the design and construction of all aspects of typical BOP
construction including all civil infrastructure, WTG foundations, electrical collection system and
substation Turbine erection will be performed by the manufacturer.
St. Leon, MB, Canada 63 Vestas V82 1.65 MW turbines-104MW
Signal’s scope of work included the managing design and construction of all aspects of typical BOP
construction, including all civil infrastructure, WTG foundations, electrical collection system,
substation and turbine erection as well as turbine delivery.
Gruver, TX 24 Suzlon S64 1.25 MW turbines-30MW
Signal Wind’s scope of work included the design and construction of all aspects of typical BOP
construction, including all civil infrastructure, WTG foundations, electrical collection system and
turbine erection.
Panhandle, TX 40 Suzlon S64 1.25 MW turbines—50MW
Signal Wind’s scope of work includes the design and construction of all aspects of typical BOP
construction, including all civil infrastructure, WTG foundations, electrical collection system and
turbine erection.
Multiple Projects, MN & IL Suzlon S88 2.1 MW turbines
Signal Wind’s scope of work includes the design and construction of all aspects of typical BOP
construction, including all civil infrastructure, WTG foundations, electrical collection system and
turbine erection.
Signal Wind has an impressive staff of experienced wind farm professionals. Below is a list of wind
farm construction projects in which Signal Wind personnel have been involved:
Project Description
Buffalo Mountain, TN 15 Vestas 1.8 MW turbines 2004
Hyde Cty. Wind Park, SD 27 GE 1.5 MW turbines 2003
Carroll, IA 1 Vestas V80 1.8 MW turbine 2003
Bowling Green, OH 2 Vestas V80 1.8 MW turbines 2003
Rio Vista, CA 15 Vestas V47 turbines 2003
Ft. Sumner, NM 136 GE 1.5 MW turbines 2003
Indian Mesa I, II, TX 107 GE 1.5 MW turbines 2001
Monfort, WI 20 Enron 1.5 MW turbines 2001
Lake Benton, MO 257 Zond 750 kW turbines 2000
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Storm Lake, IA 259 Zond 750 kW turbines 1999
Evanston, WY 80 Vestas 1.8 MW turbines 2004
Fenner , NY 20 GE 1.5 MW turbines 2001
Sommerset, PA 6 GE 1.5 MW turbines 2002
Mill Run, PA 10 GE 1.5 MW turbines 2002
Mountaineer, W VA 44 NEG Micon 1.5 MW turbines 2003
Whitewater, CA 41 GE 1.5 MW turbines 2003
Sky River, CA 342 Vestas V27 turbines 2003
Oak Creek, CA 33 NEG Micon 48 turbines 1999
Delaware Mtn., TX 40 Enron 750 kW turbines 1999
Big Spring, TX 42 Vestas 660 kW turbines 2002
Sibley, IA 1 Vestas 660 kW turbine 2003
Sibley, IA 5 Gamesa 800 kW turbines 2003
Sibley, IA 10 Gamesa 950 kW turbines 2003
Kimball, NE 7 Neg Micon 1.5 MW turbines 2002
McCamey, TX 242 Vestas 670 kW turbines 2000-2006
McCamey, TX 214 1.3 MW Bonus turbines 2000-2006
Ainsworth, NE 36 NEG Micon V-82 1.65MW WTGs 2005
B. Pre-Construction Services
Signal Wind emphasizes project efficiency and value engineering on all of its wind energy projects.
As part of the services we offer to our clients, we can assist in the development and planning of your
wind project in order to bring it to the point of constructability. Our Pre-Construction Services
Department is available to help in the performance of a number of project tasks, including the
following:
• Assisting in the preparation of an outline project format, setting forth preliminary goals including
the overall scope of work, design intent, preliminary budget, schedule, and assignment of
project team responsibilities.
• Preparing the preliminary master construction schedule.
• Evaluating the existing site conditions and coordinating/procuring site investigations and
studies.
• Assisting in reviewing the requirements of governmental agencies having jurisdiction over the
project, advising on the cost impact of these requirements and suggesting possible alternatives,
if necessary.
• Reviewing the project interconnection requirements and procuring engineering for
interconnection with the utility, as well as coordinating meetings with the utility to verify design
standards.
• Monitoring the budget throughout the design development and working drawing preparation
periods.
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• Conducting a value engineering analysis including cost, construction feasibility, and schedule
impact. Preparing cost estimates on alternate design considerations and making
recommendations for a cost effective design to meet the project goals.
• Conducting regular project team meetings.
• Refining the project budget and schedule throughout the pre-construction phase based on
preliminary findings.
• Developing a procurement strategy for time critical engineering and suppliers with consideration
for schedule and cost.
• Reviewing plans and specifications while issuing invitations to bid.
• Soliciting, receiving and analyzing engineering and supplier proposals.
• Awarding engineering/supplier contracts to keep the project on schedule.
• Awarding contracts for preliminary civil infrastructure design, preliminary foundation design,
preliminary electrical collection system design and preliminary electrical substation design.
Signal Wind is pleased to be able to offer these pre-construction services in an effort to help our
clients bring their wind projects to fruition. Our intent in developing a relationship at the pre-
construction phase is to be in a position to enter into a contract for the construction of the balance
of plant for the wind project, assuming that we can meet the clients’ budget and scheduling
requirements.
C. Project Organizational Structure
Signal Wind is committed to devoting to each of our projects a personnel structure that reflects our
commitment to quality, safety and overall project success. Accordingly, we staff each of our wind
projects with the following personnel:
• Project Manager: Signal Wind Project Managers are responsible for overall project oversight.
Each of our Project Managers are industry professionals, with all having extensive wind farm
experience, engineering degrees and backgrounds, or both.
• Site Managers: Signal Wind Site Managers are responsible for the day to day operation of the
project. They are accountable to the Project Manager and are the primary contact for all
subcontractors working on site. Our Site Managers have extensive experience in all aspects of
wind farm construction.
• Superintendents: Each Signal Wind project has a site Superintendent assigned to oversee the
construction of specific areas of the wind farm construction: Mechanical, Electrical, and Civil.
The Superintendents each have specific knowledge in their area of expertise and oversee this
work to insure overall project success.
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• Third Party Oversight: Signal Wind also employs third-party consultants to assist in the oversight
of critical project construction items. On many projects, Signal Wind employs third party
engineers to review the wind turbine foundation design engineering, typically in cases where the
foundation design is unique or must withstand unusually challenging site conditions or loads.
Signal Wind requires that the foundation design engineer observe the foundation installation to
make sure that the construction is executed as designed. In addition, Signal Wind requires that
the geotechnical engineer responsible for the geotechnical report for the project be present for
the excavation to confirm that the soil conditions are the same as those contained in the
geotechnical report.
• Safety Manager: As explained more fully below, all Signal Wind projects have a Site Safety
Manager that is in charge of implementing and enforcing our Safety Program.
• Quality Manager: Each site has a Quality Manager that has the primary responsibility of
overseeing the implementation of our site specific Quality Plan for the project.
D. Safety Program and Record
Signal Wind is committed to making safety an integral part of the wind farm construction process.
Safety is our primary concern on each project. Our Safety Department, consisting of credentialed
professionals, is intimately involved in the planning and execution of each project. They interface
with clients and subcontractors to ensure a safe and productive work site.
Staff
Our Safety Department staff consists of a Corporate Safety Director, a Company Safety Director and
Site Safety Managers. Each project is assigned an on-site Site Safety Manager.
Project Safety Management
1. Safety Evaluation – Each bid proposal is evaluated by the Company Safety Director to
determine specific project needs as well as client requirements. This process is intended to
ensure adequate resources for the site management team.
2. Site Specific Safety Plan – The Company Safety Director, in conjunction with the Site Safety
Manager, will prepare an initial site safety plan for each project. The plan will include, at a
minimum, individual project safety responsibilities, site safety rules, job hazard assessments,
special hazard considerations, emergency action plan, and any other items dictated by site
conditions or client requirements.
3. Subcontractor Selection – Signal Wind selects qualified subcontractors to meet the specific
needs of each project. In order to qualify, subcontractors are required to submit detailed safety
documentation. Some of the Signal Wind subcontractor safety targets include:
• EMR Rating Less than or equal to 1
• Recordable incidence rates at or below industry standards
• Acceptable safety/environmental programs policies and procedures pertinent to their
contracted scope of work
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• In the event a subcontractor does not meet a specific requirement, Signal Wind will require a
detailed explanation from the subcontractor and will make a hiring determination based on
the information provided. If an exception is made, it is on a probationary basis and the
subcontractor is scrutinized closely for safety performance.
4. Project Safety Administration – Each project is assigned a Site Safety Manager. This
individual reports directly to the Company Safety Director and is responsible for the administration
and enforcement of all safety programs, policies, and procedures pertaining to the project.
He/she works closely with clients, subcontractors, and Signal Wind site personnel to ensure that
safety is not compromised on any aspect of the project.
5. Safety Inspections/Audits – The identification and abatement of existing and predictable
hazards in the workplace is paramount to injury prevention. Accordingly, Signal Wind imposes 5
levels of safety inspections/audits on each project.
• Daily Inspections – The Site Safety Manager is required to perform daily visual inspections of
all active construction areas. In addition to the Site Safety Manager, the Site Manager and
Superintendents are also required to conduct these daily visual inspections in their respective
areas of responsibility. Any deficiencies noted in these inspections, as well as assigned
responsibilities and corrective actions, are logged and tracked on the Safety Audit Action Item
Log.
• Monthly Inspections – The Site Safety Manager is required to perform one documented Site
Safety Audit each month. This audit includes a visual inspection for physical hazards, as well
as a review of Signal Wind and subcontractor program documentation. Once complete, the
audit is reviewed by the Site Manager, as well as the Project Manager, for any action required
on their part. It is then submitted to the Company Safety Director for review and approval.
• Quarterly Safety Inspections – The Company Safety Director will conduct a minimum of one
safety inspection/audit per quarter for each Signal Wind project. This inspection is similar to
the monthly inspection in that it includes both physical program inspections. The results of
this audit are forwarded to the Vice President of Projects and the Corporate Safety Director for
review. These audits are also tied to the Safety Bonus Program.
• Corporate Safety Inspections – The Corporate Safety Director will conduct at least one safety
inspection/audit per project. The basis of the inspection is similar to the quarterly inspection.
The results of this audit are also sent to EMJ executive staff for review. This inspection is also
tied to the Safety Bonus Program.
• Third Party Inspections – Each Signal Wind project requires one safety inspection to be
conducted by our current insurance carrier and one inspection through the OSHA Consultation
Services. Both of these inspections are tied to the Safety Bonus Program
6. Subcontractor Safety Performance – In addition to following their own safety policies and
procedures, subcontractors are required contractually to adhere to all Signal Wind and client
safety policies, procedures, and processes. Compliance is monitored and enforced daily by our
site management staff. In addition to compliance, subcontractors are also required to conduct
daily safety meetings with their respective crews and attend at least one safety meeting per week,
conducted by the Site Safety Manager. This meeting will consist of a weekly training topic, as well
as discussion and resolution of any project open safety issues. All subcontractor personnel are
Page 73
required to attend an initial site safety orientation, advising them of the programs, policies, and
procedures associated with the project, as well as any special hazards.
7. Landowner Safety – It is understood that landowners may require access to the site.
However, they will be informed of and held to the same safety standards as any other visitor.
8. Visitor Safety – Each visitor to the site will be required to attend a visitor’s safety
orientation. This orientation will be conducted by the Site Safety Manager and will be appropriate
to the scope of their visit.
9. Accident Investigation – Signal Wind believes firmly that all occupational injuries and
illnesses are preventable. However, when they do occur, we are left only with the opportunity to
learn from circumstances surrounding the event in order to prevent a re-occurrence. For this
reason, each injury incident, property damage incident, environmental incident, and near miss is
investigated by both Signal Wind and the employer involved in the incident. The impetus of this
investigation is always to determine causal relationships and implement corrective actions.
10. Safety Statistics- As a subsidiary of EMJ, Signal Wind’s safety record is combined with that
of EMJ for purposes of establishing a Workers Compensation Experience Modification Rating
(EMR). The current combined Signal Wind/EMJ EMR is 0.62. Signal Wind’s consistent emphasis
on safety is exemplified by this low rating, reserved only for the safest construction companies.
E. Statement of Financial Strength
In addition to being a leader in general contracting, EMJ Corporation has strong financial backing as
evidenced in its unlimited bonding capacity. This gives Signal Wind the ability to bond any wind
project. Signal Wind is capable of obtaining a performance and payment bond on any project of up
to $100 million. If necessary, this amount can be increased for specific projects.
We hope that this information will be helpful to you in assessing Signal Wind’s suitability for any
projects you are considering. Please do not hesitate to contact us at any time if you would like to
discuss Signal Wind, our availability to work on a project, or any other matter.
We look forward to working with you.
Sincerely,
Jeffrey J. Krysiak
Pre-Construction Manager
cc: Julian Bell, Director of Pre-Construction Services
Page 74
STATEMENT OF QUALIFICATIONS
11820 S. Gambell Street • Anchorage, Alaska 99515 • Phone: (907) 644‐4664 • Fax: (907) 644‐4666
info.stginc@gci.net • www.stginc.cc
Page 75
Over the past fifteen years, STG, In remier construction services and
management company. Dealing mainly in rural Alaska, the company has played a major role in high
profile projects such as wind energy installations, communication tower installations, and community
bulk fuel and diesel generation upgrades, to name a few. STG specializes in remote project logistics, pile
foundation installations, tower erections, and construction management. STG takes pride in its wealth of
experience, gained from years of work throughout “bush” Alaska, and through its ability to deal with the
diverse and challenging logistics and conditions which it encounters on nearly every project it
undertakes in remote locations.
Company Overview
In 1996, St. George Construction was incorporated as STG, Inc.
Since incorporation, STG has become the preferred construction
management company for both the Alaska Energy Authority (AEA)
and the Alaska Village Electric Cooperative (AVEC). Many of the
projects executed by these two entities are managed and constructed
by STG.
STG’s core competencies include bulk fuel systems, power plant
construction (both modular and steel-framed), wind farms, and pile
foundations (driven piles, post tension rock anchors, helical anchor
systems, freeze back, and active refrigerated piles). STG is the
prevalent pile foundation contractor for Interior and Western Alaska.
Additionally, STG has expanded to become United Utilities’
preferred contractor for its “Delta Net Project”, which involves the
installation of communication towers and related equipment
throughout the Yukon Kuskokwim Delta. STG has achieved this
preferred status by demonstrating competitive rates and the ability to
perform in remote locations with extreme logistical challenges.
Qualifications
The STG team has developed and maintained the capacity to manage projects through a set of key
deliverables to ensure appropriate management of jobs across the complete project cycle including:
• Provision of a quality project at a fair and reasonable price
• Timely delivery within budget
• Safe and professional performance on all work
• Positive relationships with clients to ensure that project deliverables are met
• New modern equipment that results in high productivity
• State of Alaska Professional Land Surveyor (Reg. 10192) on staff with modern Topcon GPS
Control through Detailed Project Planning
STG focuses pre-construction efforts on planning and preparation. A project team is identified which
includes management, administrative, and field supervision personnel. The team establishes budgets,
c. has grown and developed into a p
Page 76
production targets, a master construction schedule, and detailed work plan for each project.
The planning process involves key supervisory
personnel as all aspects of the project are analyzed
with particular attention to logistics, labor and
equipment resource needs, along with specific
material requirements. This results in a clear
understanding of the goals of the client, the
ontractual requirements, scope of work, and
entification of potential obstacles that may impact
ion of the job.
ough to the administrative level
, accurate documentation and reporting, and on to the field level where clear goals of
roduction and quality are reinforced through the superintendent’s and foremen’s daily huddles and
ost Containment
anagement decisions. The project manager and field
ork together through this reporting
y potential problems and direct resources
rform “crisis management” while providing clients with
TG employees
’s civic responsibility to local
c
id
the successful complet
The project-planning phase also establishes key
systems which help assure quality throughout the
project. This begins at the management level with a
commitment to providing a quality project to the client and carries thr
with timely
p
schedule reviews.
C
STG maintains budgets for all labor, material, and
equipment for each project allowing managers to
effectively manage project costs. Expense categories are
tracked and updated weekly by the project managers and
this information is then communicated to the field
pervision level for use in making timely, proactive su
m
superintendent w
system to identif
as required to address issues before they impact the work.
This proactive approach prevents STG from having to
pe
on-budget, on-time, turnkey deliveries of completed projects
built to engineered specifications.
STG maintains a philosophy to deliver the highest level of quality within the industry. S
also realize the company’s commitment to its clients along with STG
communities. The work that STG performs is a reflection of this commitment.
Page 77
Construction Management and Project Supervision Experience
STG has built a reputation of professionalism an
products within a set schedule and defined budget.
construction services and management contracts wit
• Alaska Village Electric Cooperative (A
• Alaska Energy Authority (AEA)
• United Utilities Inc. (Recently acquire
STG has built a wealth of knowledge
d thoroughness by delivering the highest quality
As a result, STG has been awarded and maintains
h the following clients:
VEC)
d by GCI, Inc.)
and experience for
lanning, execution, and completion of projects across
ral Alaska. Over the years, STG has also enjoyed the
ay of
he company prides itself in its ability to professionally
eal with all the different entities that are related to a
roject. In this regard, STG maintains a close working relationship with AVEC’s engineering
presentatives, a so id relationship with the AVEC management staff, along with strong connections to
rs and vendors across the state of Alaska.
e-of-the-art dump trucks, loaders, excavators, pile
ural construction projects. During the
efficiently supported logistically from two
cation shop located in Anchorage, AK and its
ons, company construction crews are fully
needs that may arise during the course of the
p
ru
opportunity to successfully implement a large arr
projects specifically for AVEC including bulk fuel
upgrades, diesel power, wind generation, and energy
distribution systems. STG can also coordinate all project
logistics from procurement, to transportation, to the final
project demobilization.
T
d
p
re l
various sub-contracto
STG operates a modern fleet of fourteen cranes, stat
drivers, and other equipment needed to support full scale r
construction phase of STG projects, remote field crews are
STG offices: the company’s headquarters and fabri
staging yard located in Bethel, AK. From these locati
supported in the field for parts, groceries, and any other
project.
Page 78
STG Projects
Selawik Power Plant, Tank Farm, and Wind Turbine Installation
Client: AVEC
Year Completed: 2004
The Selawik Bulk Fuel Upgrade Project exemplifies STG’s diverse capabilities. STG was highly
he tank farm and power plant. The company executed the pile
site, erected four 65kW wind turbines,
of pipelines.
n Kasigluk, STG once again demonstrated its abilities to execute
omplex, multi-faceted projects. This project entailed transferring
primary power generation from Nunapitchuk to Akula Heights while
maintaining power generation to these two villages and also m intaining
power to Old Kasigluk. As part of this project, STG constructed a new
bulk fuel retail facility for the communities of Akula Heights and Old
Kasigluk along with a new bulk fuel storage facility, totaling over
600,000 gallons of storage capacity in all. This project also included the
construction of a power distribution system to the three aforem
villages, the installation of a new diesel generation plant, the erection of
three 100 kW wind turbines, the installation of a heat recovery system,
upgrades to the school districts bulk fuel facilities, and the installation of
a standby generator in Nunapitchuk.
involved with the planning and design of t
foundation work, fabricated ten 50,000 gallon storage tanks on-
and tied the completed system together with a complex network
Nunapitchuk-Kasigluk Bulk Fuel Upgrade, Power Plant, and Wind Turbine Installation
Client: AVEC
Year Completed: 2006
I
c
a
entioned
Page 79
Toksook Bay Power Plant, Wind Generation, and Interties
and Nightmute are located in Western Alaska on Nelson Island, an ideal
installation of 23 miles of
ower lines.
STG orchestrated schedules, equipment, materials, field work and logistics to successfully bring this
project to completion. Due to the impassible summer tundra conditions, all the intertie work took place
in the winter season during sub-zero temperatures.
many different levels of scope.
iversity in rural construction and
e Alaska Energy Authority
the set-up, installation, and
ties along the middle
g the winter
Client: AVEC
d: 2008 Year Complete
oksook Bay, Tununak,T
location for wind generation. STG helped deliver a wind/diesel integrated power project for these
communities. With three Northwind 100kW wind turbines and a new power plant complete with switch
gear and heat recovery module in Toksook Bay, power can now be produced from either diesel fuel, or
the natural powers of the wind. In order to capture the greatest value for all island residents, an intertie
etwork was established, which connected the three communities through the n
p
Additional STG Projects
STG has completed numerous projects for AVEC throughout the state on
The company would also like to highlight a few other examples of its d
management for other clients.
STG has managed and constructed over a dozen bulk fuel upgrades for th
across the western half of Alaska. The most notable of these projects was
commissioning of eight modular power plants in eight unique communi
Kuskokwim River. The units were built and prepared in STG’s Anchorage yard durin
months, then delivered and installed on each site during the short summer season.
Page 80
The company has also gained valuable experience dealing with tower erection and foundation design.
ontract with UUI, STG has built foundations for, and has erected, over thirty
hroughout western Alaska. This project, known as the Delta-Net Project, has
nked dozens of communities for tele-medicine and broadband communication. Two of the most
hich
unity of St. Paul.
Under its term c
communication towers t
li
notable towers are the 305-foot tower in Eek, and the 60-foot tower on top of Marshall Mountain w
also required construction of a five-mile access road from the village of Marshall.
STG has grown into one of the most experienced integrators of alternative energy systems within the
state of Alaska. In addition to the previously referenced projects, this experience is documented through
STG’s work to erect and install two Vestas 225 kW wind turbines for TDX Power on the remote Bering
Sea island comm
Page 81
Key STG Personnel
STG’s organization consists of approximately 25 full-time employees with many more returning
seasonal workers. STG’s staff consists of experienced and professional project managers, a registered
land surveyor, a full-time expediting crew, accounting and administrative personnel, welders, carpenters,
crane and heavy equipment operators, pipe fitters, plumbers, and electricians. STG personnel have the
nowledge and skills necessary to provide construction management services and su
ccessfully complete
ns STG, Inc. while overseeing the performance of projects
roughout the state of Alaska. With over 30 years of varied construction experience, he specializes in
nt and his expertise ranges from
phases of work, including planni
ary Matthews – Project Manager
r. Matthews has over 30 years of construction experience. His experience includes the total
oordination of projects starting with bidding/estimating; negotiating; scheduling manpower, equipment
nd materials in extremely remote locations; communication tower erection; and government
ontracting. For the last year Mr. Matthews has successfully managed the construction of the UUI
elta-Net tele-medicine and broadband communication towers throughout Western Alaska for STG.
se visit our website at www.stginc.cc or contact us at the information below.
k
projects anywhere inside of the state of Alaska.
James St. George - President
Mr. St. George operates and co-ow
th
rural construction manageme
rm construction and upgrades as well as renewa
xperience in the field involves all
echanical, electrical, piling installation, and tank c
ew and more efficient means for accom
be a great asset in the company’s co
avid E. Myers – Project Manager
r. Myers has over 15 years of comp
emediation. His responsibilities hav
pliance, logistics, cost estima
nergy upgrades, civil and vertical
batement, demolition, drum remova
reas of expertise include: remo
overnment contracting. For the la
elivery of multiple energy upgr
communication tower construction, to tank
ble energy projects. Mr. St. George’s extensive
ng, logistics, budgeting, dirt work,
onstruction. He has been progressive in introducing
t goals. Mr. St. George’s versatility has proven
letion of projects across rural Alaska.
tion and environmental
nagement, quality control, safety,
porting and client relations in the areas of rural
aterials, confined space entry, asbestos
inated water treatment and soil remediation.
civil construction, environmental remediation,
responsible for the successful
fa
e
m
n
to
plishing projec
mp
rehensive experience in construc
e included project ma
ting, fieldwork, re
construction, hazardous m
l, mining, contam
te construction, heavy
st four years Mr. Myers has been
ade projects for STG.
D
M
r
com
e
a
A
g
d
G
M
c
a
c
D
For further inquiries, plea
Page 82
STG, Inc. • 11820 S. Gambell Street • Anchorage, Alaska 99515 • Phone: (907) 644-4664 • Fax: (907) 644-4666
info.stginc@gci.net • www.stginc.cc
Page 83
Renewable Energy Fund
Grant Application Round IV
AEA11-005 Grant Application
APPENDIX D: INTERCONNECTION REQUIREMENTS STUDY
Page 84
WWW.EPSINC.COM
PHONE (425) 883-2833 4020 148th AVE NE, SUITE C, REDMOND, WASHINGTON 98052 FAX (425) 883-0464
PHONE (907) 522-1953 3305 ARCTIC BLVD., SUITE 201, ANCHORAGE, ALASKA 99503 FAX (907) 522-1182
Alaskan Electric & Energy Cooperative
Homer Wind Generation Study
Phase 1A Report
April 21st , 2009
David W. Burlingame, P.E.
David A. Meyer
The image cannot be displayed. Your computer may not have enough memory to open the image, or the image may have been corrupted. Restart your computer, and then open the file again. If the red x still appears, you may have to delete the image and then insert it again.
Page 85
AEEC – HEA Generation Study – Phase 1A
WWW.EPSINC.COM
PHONE (425) 883-2833 4020 148th AVE. NE, SUITE C, REDMOND, WASHINGTON 98052 FAX (425) 883-0464
PHONE (907) 522-1953 3305 ARCTIC BLVD., SUITE 201, ANCHORAGE, ALASKA 99503 FAX (907) 522-1182
ii
Summary of Changes
Revision Revision Date Revision Description
0 April, 2009 Initial Release
Page 86
AEEC – HEA Generation Study – Phase 1A
WWW.EPSINC.COM
PHONE (425) 883-2833 4020 148th AVE. NE, SUITE C, REDMOND, WASHINGTON 98052 FAX (425) 883-0464
PHONE (907) 522-1953 3305 ARCTIC BLVD., SUITE 201, ANCHORAGE, ALASKA 99503 FAX (907) 522-1182
iii
Table of Contents
SUMMARY OF CHANGES ............................................................................................. II
TABLE OF FIGURES .................................................................................................... IV
LIST OF TABLES .......................................................................................................... IV
EXECUTIVE SUMMARY ................................................................................................ 1
1 INTRODUCTION ...................................................................................................... 2
1.1 Base Cases ........................................................................................................................................................... 2
1.2 Transmission Data ............................................................................................................................................. 4
1.3 Analysis Methods ............................................................................................................................................... 4
2 WINTER PEAK CASE ............................................................................................. 5
2.1 Line Faults .......................................................................................................................................................... 5
2.2 Unit Trips ............................................................................................................................................................ 5
2.3 Conclusions ......................................................................................................................................................... 6
3 SUMMER PEAK CASE ........................................................................................... 9
3.1 Line Faults .......................................................................................................................................................... 9
3.2 Unit Trips ............................................................................................................................................................ 9
3.3 Conclusions ....................................................................................................................................................... 10
4 SUMMER VALLEY CASE ..................................................................................... 13
4.1 Line Faults ........................................................................................................................................................ 13
4.2 Unit Trips .......................................................................................................................................................... 13
4.3 Conclusions ....................................................................................................................................................... 14
5 RESULTS & CONCLUSIONS ............................................................................... 16
Page 87
AEEC – HEA Generation Study – Phase 1A
WWW.EPSINC.COM
PHONE (425) 883-2833 4020 148th AVE. NE, SUITE C, REDMOND, WASHINGTON 98052 FAX (425) 883-0464
PHONE (907) 522-1953 3305 ARCTIC BLVD., SUITE 201, ANCHORAGE, ALASKA 99503 FAX (907) 522-1182
iv
Table of Figures
Figure 2-1 Line Fault – Winter Peak – Tie Closed ......................................................................... 7
Figure 2-2 Beluga Unit 7 – Winter Peak – Tie Closed ................................................................... 8
Figure 3-1 Line Fault – Summer Peak, Tie Closed, No Import .................................................... 11
Figure 3-2 Line Fault – Summer Peak, Tie Closed, No Import .................................................... 12
Figure 4-1 Line Fault, Summer Valley, Tie Open ........................................................................ 15
List of Tables
Table 1-1 Power Flow Case Summary ........................................................................................... 3
Table 1-2 Line Disturbances ........................................................................................................... 4
Table 1-3 Loss of Generation Disturbances .................................................................................... 4
Table 2-1 Line Faults Results Summary – Winter Peak ................................................................. 5
Table 3-1 Line Faults Results Summary – Summer Peak .............................................................. 9
Table 3-2 Unit Trip Results Summary – Summer Peak ................................................................. 9
Table 4-1 Line Faults Results Summary – Summer Valley ......................................................... 13
Table 4-2 Unit Trip Results Summary – Summer Valley ............................................................. 14
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AEEC – HEA Generation Study – Phase 1A
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Executive Summary
The purpose of the study is to analyze the effects on system response due to the addition of a 9
MW wind farm to the Homer electric system.
This study of the Railbelt system shows that there is very little difference in transient
performance due to the addition of a 9 MW wind farm. During unit trip events and line fault
scenarios, the difference in performance is negligible.
Page 89
AEEC – HEA Generation Study – Phase 1A
4/21/2009 2 of 20
1 Introduction
Homer Electric Association (HEA) contracted EPS to perform stability analysis on the
Railbelt system to find the impact of a 9 MW wind farm located close to the Tesoro
substation. The wind farm is to comprise of six 1.5 MW units. Power flow and dynamics
data information was added to the existing Railbelt database case to determine possible
differences in performance during disturbance events. The studies were run using three
seasons, and multiple generation dispatch scenarios for each season.
1.1 Base Cases
Power flow base cases were selected that represent the peak loading conditions for the
winter season, the summer season, and minimum loading conditions in the summer
season, for 2015. The system power totals are shown in Table 1-1, and the cases are
described below. The name of the power flow season case used in the study is in
parentheses. The generation scenario (described below) is then concatenated to the end
of the power flow season.
Winter Peak 2015 (wp15) – This case represents the heavy winter load condition. The
net generation for load is 104.3 MW. The topology of the case represents the current
electrical system in its normal operating state, with expected 2015 upgrades.
Summer Peak 2015 (sp15) - This case represents the heavy summer load condition.
The net generation for load is 90.4 MW. The topology of the case represents the
current electrical system in its normal operating state, with expected 2015 upgrades.
Summer Valley 2015 (sv15) – This case represents the light summer load condition.
The net generation for load is 63.6 MW. The topology of the case represents the
current electrical system in its normal operating state, with expected 2015 upgrades.
The base cases represent the expected case loading conditions for the Railbelt system for
2015. Operating experience has shown that the heavy winter loading and light summer
condition cause the Railbelt system to operate closer to its stability limits.
The expected 2015 upgrades include the following.
New Sterling 115 kV substation between Soldotna and Quartz Creek.
New Pioneer 115 kV substation between Kasilof and Anchor Point
Diamond Ridge transformer
New Tesoro 115 kV substation – with transmission lines to Soldotna and Bernice
New Bernice 115 kV substation – with transmission lines to Tesoro and Nikiski
Two new LM2500 (30 MW each) units at Soldotna
For the three different seasons, multiple generation scenarios were also created. This
was done to show the importance of operational changes for the HEA area, and its effect
upon the results.
HEA zero import (closed_0) – Dave’s Creek – Hope tie is closed, and all HEA load is
served by HEA owned generation units on the Kenai.
HEA zero import Bradley full (Bradley) – Dave’s Creek – Hope tie is closed. Bradley
generation is on full output (90 MW total) and Dave’s Creek – Hope flow is at the
Page 90
AEEC – HEA Generation Study – Phase 1A
4/21/2009 3 of 20
maximum transfer limit of 75 MW. All HEA load is served by HEA owned generation
units on the Kenai.
HEA generation import (closed_import) – Dave’s Creek – Hope tie is closed. HEA
imports generation from off of the Kenai to serve HEA load.
HEA islanded (open) – Dave’s Creek – Hope tie is opened. All HEA load is served
by HEA owned generation units on the Kenai. Sewerd load is served by Cooper
units.
HEA islanded, generation switch (opena) - Dave’s Creek – Hope tie is opened.
Assumed generation exchange between HCCP and Bradley.
The summer valley cases were also run with lighter than expected load. This was to
determine the effects of load level on system performance. These cases were run only in
the islanded configuration (open) for the summer valley season. They are differentiated
by having (light) at the end of the case name.
Table 1-1 Power Flow Case Summary
26.5
917.5
25.5
917.3
21
912
22
913
22
913.1
51
942
56
947
22
913
52
943
21
912
39
930
49.9 2 6 36 7
n/a n/a
36.2
927.2
37.4
929
47
938
33.3
924.3
33.3 27
951
7
58
26
58
58
7
12
8
11
0
n/a
36
5
90
4
36
90
11
11
28
58 5
5
Condense
58 90
13
36
0
10
3
0
7
13
11
10
10
36
sp15_closed_import
sp15_open
sp15_opena (Bradley at Full
Island Output ‐ 36 MW)
49.9
63.2‐38‐31
62.7
62.7
90.5
90.5
63.632.5
74.7 72.3
wp15_closed_0
wp15_bradley (Bradley at 90
MW output)
wp15_closed_import
wp15_open
wp15_opena (Bradley at Full
Island Output ‐ 36 MW)
90.411.5
74.5 101
92.6‐67
sv15_open_light
sv15_open_lighta (Bradley at
Full Island Output ‐ 36 MW)
74.3
‐38‐50
‐55
sv15_closed_0
sv15_bradley (Bradley at 90 MW
output)
sv15_closed_import
sv15_open
sv15_opena (Bradley at Full
Island Output ‐ 36 MW)
sp15_closed_0
sp15_bradley (Bradley at 90 MW
output)
103.2
112
102
102
Tesoro
Generation
(MW)
New
Generation
(MW)
HEA Load
+ Losses
(MW)
Nikiski
(MW)
n/a na/ n/a n/a
6
6
48
Power Flow Case Name
Daves Crk ‐
Hope Flow
(MW)
HEA
Export
(MW)
Cooper
Generation
(MW)
Bradley
Generation
(MW)
Wind
(MW)
39.9 104.3 58
6
6
6
6
6
6
6
6
6
6
6
6
6
6
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AEEC – HEA Generation Study – Phase 1A
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1.2 Transmission Data
EPS used the most current Railbelt database for this study. The database includes both
power flow and transient stability data for the Railbelt.
1.2.1 Power Flow Issues
The MEA 115 kV loop through the valley was closed from Eklutna through to
Teeland, to mitigate problems within MEA from impacting the MLP transmission
planning results. Also a 60 MW power plant was added at the Palmer 115 kV
substation, configured as a 50 MW combustion turbine (CT) with a 10 MW heat
recovery steam generator (HRSG). Note that this study is designed to focus on
transmission needs within the HEA system, not needs within the MEA system.
The power flow data for the new generators was also added. Each generator
configured on its own 12.47 kV bus with a step up transformer to the 138 kV bus.
1.2.2 Transient Stability Issues
The transient stability database was reviewed in this study and in previous
studies conducted by EPS. A Clipper 1.5 MW wind turbine model was used for
the study. The 60 MW of new Palmer generation is modeled similarly to the North
Pole units 3 and 4.
1.3 Analysis Methods
To analyze the differences between the generator types and generator location, stability
analysis was run using disturbances consisting of line faults and trips, and also loss of
generation events. A list of disturbances is shown in Tables 1-2 and 1-3.
Table 1-2 Line Disturbances
Table 1-3 Loss of Generation Disturbances
Near End Far End
d1 Soldotna ‐ Tesoro 100 170 1 Soldotna 5 5
d2 Tesoro ‐ Soldotna 170 100 1 Tesoro 5 5
d3 Soldotna ‐Sterling 100 102 1 Soldotna 5 5
d4 Soldotna ‐ Beaver Tap 1904 1000 1 Beaver Tap 5 30
d7 Soldotna ‐ Bradley 100 110 1 Soldotna 5 5
d8 Bradley ‐ Soldotna 110 100 1 Bradley 5 5
d9 Tesoro ‐ Bernice 170 590 1 Tesoro 5 5
Name Line Fault
Location
Clearing Time (Cycles)To From ID
Name Generator
g1 Bradley 1
g2 Nikiski
g3 Soldotna LM2500
g4 Beluga Unit 7
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AEEC – HEA Generation Study – Phase 1A
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2 Winter Peak Case
The 2015 winter peak case represents the future winter maximum condition. Line faults as
well as loss of generation disturbances were run for the different generation dispatches,
seasons, and new generation configurations.
2.1 Line Faults
The cases were run using PSS/E software for transient analysis. Plots were created of
the line fault scenarios for all cases. The amount of load shedding that occurred, due to
both, islanding areas of the grid with no generation and due to system response, was
calculated and tabulated into a spreadsheet for comparison purposes, shown in Table 2-1.
Table 2-1 Line Faults Results Summary – Winter Peak
2.2 Unit Trips
The cases were run using PSS/E software for transient analysis. Plots were created of
the unit trip scenarios for all cases. The amount of load shedding that occurred, due to
both, islanding areas of the grid with no generation and due to system response, was
calculated and tabulated into a spreadsheet for comparison purposes, shown in Table 2-2.
Table 2-2 Unit Trip Results Summary – Winter Peak
result
load
loss
(MW)
result
load
loss
(MW)
result
load
loss
(MW)
result load loss
(MW)result
load
loss
(MW)
result
load
loss
(MW)
result load loss
(MW)
24 14
92414
85 14
98514
33 33 10 14 NW VC 10
933331014 NW LV
14 22
91422
stable stable stable 15
9NW VC NW VC NW LV
wind farm is in island, voltage collapse wind farm is in island, sustained low voltage
wp15_opena * (Bradley at
Full Island Output ‐ 36 MW)
wp15_open
wp15_closed_import
wp15_bradley (Bradley at
90 MW output)
wp15_closed_0
Case d2d1Wind
Amount
(MW)
d7 d8d3d4
stable
Soldotna Stability Results
stable
d9
stable
stable
stable
stable
Fault Disturbance
stable
stable
stable stable
stablestable
stable stable
stable
stable
NW VC NW VC
stable
stable
stable
stable
stable
stable
stable
stable
stable
stable stable
stablestable
result load loss
(MW)result load loss
(MW)result
load
loss
(MW)
result load loss
(MW)
70
970
70
959
70
970
50 18
92510
stable 25
9 925
wp15_opena * (Bradley at Full
Island Output ‐ 36 MW)
wp15_open
wp15_closed_import
wp15_bradley (Bradley at 90
MW output)
wp15_closed_0
Case
Generation Disturbance
g1 (Bradley) g2 (Nikiski) g3 (Soldotna 1)g4 (Beluga 7)Wind
Amount
(MW)
n/a
n/a
n/a
stable
stable
stable
stable
stable
stable
stable
stable
stable n/a
stable
stable
stable
stable
stable
stable
stable
Soldotna Stability Results
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AEEC – HEA Generation Study – Phase 1A
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2.3 Conclusions
The results of the study show the effect of adding 9 MW of wind on the system’s
performance. The addition of the wind farm has the ability to reduce the generation on
HEA’s units, thus forcing HEA to run with more spin on their system. This increase in spin
is in part, the reason for the marginal impact of the additional wind on the system. An
important consideration is that the 9 MW wind farm does not have the ability to displace
thermal generation entirely. The fact that no thermal units are displaced minimizes the
impact of the wind generation on system performance. Wind generation was used to
offset energy from conventional generation units, with only one case allowing for any
generation to be completely turned off. In all cases it was assumed that transfer tripping
was in place to open Nikiski breaker NB-4 for faults which can island the wind farm
without thermal generation.
Page 94
AEEC – HEA Generation Study – Phase 1A
4/21/2009 7 of 20
Figure 2-1 Line Fault – Winter Peak – Tie Closed
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AEEC – HEA Generation Study – Phase 1A
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Figure 2-2 Beluga Unit 7 – Winter Peak – Tie Closed
Page 96
AEEC – HEA Generation Study – Phase 1A
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3 Summer Peak Case
The 2015 summer peak case represents the future summer maximum condition. Line
faults as well as loss of generation disturbances were run for the different generation
dispatches, seasons, and new generation configurations.
3.1 Line Faults
The cases were run using PSS/E software for transient analysis. Plots were created of
the cases. The amount of load shedding that occurred, due to both islanding with no
generation and due to system response, was calculated and tabulated into a spreadsheet
for comparison purposes, shown in Table 3-1.
Table 3-1 Line Faults Results Summary – Summer Peak
3.2 Unit Trips
The cases were run using PSS/E software for transient analysis. Plots were created of
the unit trip scenarios for all cases. The amount of load shedding that occurred, due to
both, islanding areas of the grid with no generation and due to system response, was
calculated and tabulated into a spreadsheet for comparison purposes, shown in Table 3-2.
Table 3-2 Unit Trip Results Summary – Summer Peak
result
load
loss
(MW)
result
load
loss
(MW)
result
load
loss
(MW)
result load loss
(MW)result
load
loss
(MW)
result
load
loss
(MW)
result load loss
(MW)
12
9 12
63 13
9 63 12
28 28 47 12 NW VC 9
928284712 NW LV
12 13.5
91213.5
12
9 12
wind farm is in island, voltage collapse wind farm is in island, sustained low voltage
sp15_bradley (Bradley at 90
MW output)
sp15_closed_0
sp15_opena (Bradley at
Full Island Output ‐ 36 MW)
sp15_open
sp15_closed_import
Case d2d1Wind
Amount
(MW)
d7 d8
stable stable
stablestable
stable stable
d3 d4
stable
stable
stable stable
stable stable
stable stable
NW VC NW VC
stable
stable
stable
stable
stable
stable
Soldotna Stability Results
stable
stable
d9
stable
stable
stable
stable
stable
stable
stable
Fault Disturbance
stable stable stable
result load loss
(MW)result load loss
(MW)result
load
loss
(MW)
result load loss
(MW)
9
54
9 44
9
23 9
9169
16
9
sp15_bradley (Bradley at 90
MW output)
sp15_closed_0
sp15_opena (Bradley at
Full Island Output ‐ 36 MW)
sp15_open
sp15_closed_import
Case
Generation Disturbance
g1 (Bradley) g2 (Nikiski) g3 (Soldotna 1)g4 (Beluga 7)Wind
Amount
(MW)
stable
stable
stable
stable
stable
stable
stable
stable
n/a
stable
stable
stable
stable
stable
stable
n/a
stable
stable
stable
n/a
Soldotna Stability Results
Page 97
AEEC – HEA Generation Study – Phase 1A
4/21/2009 10 of 20
3.3 Conclusions
The results of the study show the effect of added 9 MW of wind on the system
performance. The addition of the wind farm has the ability to reduce the generation on
HEA’s units, thus forcing HEA to run with more spin on their system. This is part of the
cause of the increase in performance for the cases with wind. Wind generation was used
to offset conventional generation units, with only one case allowing for generation to be
completely turned off. There are several cases where the Northwest Kenai suffers a
voltage collapse due to the area having only the wind farm as a source of generation.
There are a couple of cases where the Northwest Kenai suffers from continuous low
voltage. This result is questionable as the wind farm is in an islanded configuration without
a synching source.
Page 98
AEEC – HEA Generation Study – Phase 1A
4/21/2009 11 of 20
Figure 3-1 Line Fault – Summer Peak, Tie Closed, No Import
Page 99
AEEC – HEA Generation Study – Phase 1A
4/21/2009 12 of 20
Figure 3-2 Line Fault – Summer Peak, Tie Closed, No Import
Page 100
AEEC – HEA Generation Study – Phase 1A
4/21/2009 13 of 20
4 Summer Valley Case
The 2015 summer valley case represents the future summer minimum condition. Line
faults as well as loss of generation disturbances were run for the different generation
dispatches, seasons, and new generation configurations.
4.1 Line Faults
The cases were run using PSS/E software for transient analysis. Plots were created of
the cases. The amount of load shedding that occurred, due to both islanding with no
generation and due to system response, was calculated and tabulated into a spreadsheet
for comparison purposes, shown in Table 4-1.
Table 4-1 Line Faults Results Summary – Summer Valley
4.2 Unit Trips
The cases were run using PSS/E software for transient analysis. Plots were created of
the unit trip scenarios for all cases. The amount of load shedding that occurred, due to
both, islanding areas of the grid with no generation and due to system response, was
calculated and tabulated into a spreadsheet for comparison purposes, shown in Table 4-2.
result
load
loss
(MW)
result
load
loss
(MW)
result
load
loss
(MW)
result load loss
(MW)result
load
loss
(MW)
result
load
loss
(MW)
result load loss
(MW)
24 24 8 NW VC 6
92424 8 NW LV
24 24 41 85 NW VC 6
92424418 NW LV
24 24 30 8 NW VC 6
92424168 NW LV
25 25 8 NW VC 6
92525 8 NW LV
24 24 8 NW VC 6
92424 8 NW LV
NW VC 24 NW VC 24 8 NW VC 6
9NW LV 24 NW LV 24 8 NW LV
NW VC 24 NW VC 24 stable stable stable stable stable 6
9
wind farm is in island, voltage collapse wind farm is in island, sustained low voltage
sv15_closed_import
sv15_bradley (Bradley at 90
MW output)
sv15_closed_0
sv15_opena_light* (Bradley
at Full Island Output ‐ 36
sv15_open_light
sv15_opena (Bradley at Full
Island Output ‐ 36 MW)
sv15_open
Case d2d1Wind
Amount
(MW)
stable
d7 d8
stablestable
stable stable
d3 d4
stable
stable
stable
stable
stable
stablestable
stablestable
stable
stable
stable
stable
Soldotna Stability Results
stable
stable
n/a n/a n/a
d9
stable
n/a n/a n/a n/a
NW VC NW VC stable
stable
Fault Disturbance
NW VCNW VC
NW VC stable
NW VC
NW VCNW VC
NW VC
NW VC
Page 101
AEEC – HEA Generation Study – Phase 1A
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Table 4-2 Unit Trip Results Summary – Summer Valley
4.3 Conclusions
The results of the study show the effect of added 9 MW of wind on the system
performance. The addition of the wind farm has the ability to reduce the generation on
HEA’s units, thus forcing HEA to run with more spin on their system. This is part of the
cause of the increase in performance for the cases with wind. Wind generation was used
to offset conventional generation units, with only one case allowing for generation to be
completely turned off. There are several cases where the Northwest Kenai suffers a
voltage collapse due to the area having only the wind farm as a source of generation.
There are a couple of cases where the Northwest Kenai suffers from continuous low
voltage. This result is questionable as the wind farm is in an islanded configuration without
a synching source.
result load loss
(MW)result load loss
(MW)result
load
loss
(MW)
result load loss
(MW)
27
9
33
923
9
30
9 16
66
9 6
10
98
stable 8 stable
9
sv15_closed_import
sv15_bradley (Bradley at 90
MW output)
sv15_closed_0
sv15_opena_light* (Bradley
at Full Island Output ‐ 36
sv15_open_light
sv15_opena (Bradley at Full
Island Output ‐ 36 MW)
sv15_open
Case
Generation Disturbance
g1 (Bradley) g2 (Nikiski) g3 (Soldotna 1)g4 (Beluga 7)Wind
Amount
(MW)
stable
stable
stable
stable
n/a
n/a
n/a
n/a
n/a
n/a
n/a n/a
n/an/a
stable
stable
stable
stable
stable
stable
stable
stable
stable
stable
stable
n/a
Soldotna Stability Results
n/a n/a
Page 102
AEEC – HEA Generation Study – Phase 1A
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Figure 4-1 Line Fault, Summer Valley, Tie Open
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AEEC – HEA Generation Study – Phase 1A
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5 Results & Conclusions
The addition of 9 MW of wind has been shown to have negligible impact on the stability of the HEA
system during contingency events. At the current load levels, the addition of the wind farm allows HEA
to be able to effectively run with more spin without needing to change the generation dispatch (ie. turning
units off), increasing system performance under certain conditions.
Page 104
PHONE (907) 522-1953 3305 ARCTIC BLVD., SUITE 201, ANCHORAGE, AK 99503 FAX (907) 522-1182
PHONE (425) 883-2833 4020 148TH AVE. NE, REDMOND, WA 98052 FAX (425) 883-0464
PHONE (907) 789-2474 2213 JORDAN AVE, JUNEAU, AK 99803 FAX (907) 789-4939
WWW.EPSINC.COM
9 MW Wind Integration at Nikiski
Interconnection and Protection Assessment
Scope of Work and Cost Estimate
October 14, 2009
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Page 105
Homer Electric Association
Nikiski Wind Interconnection and Protection Assessment
September 16, 2009 Page 1
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1 Background
Homer Electric Association (HEA) is requesting a scope of work and cost estimate from Electric
Power Systems, Inc. (EPS) to evaluate the interconnection of a 9 MW wind farm at the Nikiski
substation.
2 Scope of Work
The Scope of Work for the study is defined in separate work sections below.
2.1 Nikiski Substation Equipment:
EPS will review the proposed interconnection of the 9 MW of wind power at the Nikiski
substation. The following items will be evaluated.
A. EPS will recommend the use of one or two transformers. EPS will include an
evaluation of the impact of transformer configuration on project operations,
substation maintenance, and contingency analysis.
B. EPS will evaluate any possible problematic interactions with transformer T3 and
Nikiski Generator.
1.
2.3 Transmission and Substation Protection (deleted from Scope)
A. EPS will evaluate and recommend protection schemes for two different scenarios
based upon the timing of the project interconnection in relation to the Bernice Lake
transmission upgrades:
1. Pre-Bernice transmission upgrades (existing system).
2. Post-Bernice transmission upgrades.
EPS will make recommendations in accordance with typical HEA protection
equipment and schemes (SEL421, SEL311C, POTTs, etc). EPS personnel will work
closely with HEA personnel to ensure adequate HEA input.
EPS will compare changes necessary in both scenarios against existing substation
equipment.
B. EPS will evaluate and recommend substation protective relaying, including bus
differential, transformer differential, protective line relays and other relays required by
the addition of the wind farm..
C. EPS will evaluate and recommend protection schemes and equipment to be used to
ensure wind project interconnection point(s) will not adversely impact HEA substation
Page 106
Homer Electric Association
Nikiski Wind Interconnection and Protection Assessment
September 16, 2009 Page 2
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or system equipment. EPS will include any probable interconnections to the wind
farm project needed for protection concerns.
2.4 SCADA and Communications (Deleted from Scope)
A. EPS will evaluate the adequacy of the SCADA connections to CEA needed for
dispatching.
B. EPS will evaluate the adequacy of the SCADA connections to HEA needed for
monitoring and controlling the substation.
C. EPS will evaluate and recommend wind farm SCADA connections to both HEA and
CEA needed for monitoring and controlling the wind farm.
D. EPS will utilize to complete the
communication path assessments and estimates.
3 Cost Estimate and Schedule
Below is a schedule of the work to be completed. EPS will include weekly progress reports and
weekly opportunities for detailed discussions with HEA.
Table 1. Schedule
Commence Work Immediately upon receipt of required data from HEA
Interconnection Data
Review 2 weeks after all requested data is delivered.
Condition Assessment Removed from Scope
Draft Final Report 6 weeks weeks after data review.
Final Report 2 weeks after comments are received from HEA on the Draft
report.
Table 2 below shows the cost estimate to fully incorporate the wind farm into the PSSE Railbelt
model.
The personnel assignments, estimated man-hours, and estimated costs for each task follows:
Table 2. Cost Estimate
Page 107
Homer Electric Association
Nikiski Wind Interconnection and Protection Assessment
September 16, 2009 Page 3
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Task Personnel Estimated
Manhours
Estimated
Cost
1 Nikiski Substation Equipment
Evaluation D. Burlingame 0 $ -
Nikiski Substation Equipment
Evaluation C. Muschany 0 $ -
Nikiski Transformer T-2 Testing C Clayton 0 $ -
Nikiski Transformer T-1 Testing C Clayton 0 $ -
Nikiski Breaker NB-4,5,6, PT, CT
Testing C Clayton 0 $ -
4 Protection Review D. Burlingame 0 $ -
4 Protection Review C. Muschany 0 $ -
4 5 kV Switchgear Review C. Muschany 0 $ -
Modifying CEA SCADA Algorithm D. Burlingame 0 $ -
Communications Analysis NHI 0 $ -
5 System Revisions and Additions D. Burlingame 60
5 Railbelt Modeling J Cote 120
5 Railbelt Simulations D. Meyer 120
7
Draft Report and Weekly Progress
Reports D. Burlingame/J Cote 40
7
Draft Report and Weekly Progress
Reports D Meyer 60
8 Final Report D. Burlingame 30
Totals 430
The EPS cost estimate is a Not-to-Exceed cost estimate.
Staff
Personnel are as listed in the cost table above. Depending on the timing of the project, certain staff level
positions may be substituted with other personnel at the actual time of the work.
Information Needs
Additional data needs may arise as the evaluation is performed and EPS will provide HEA with an information
request as soon as those needs are identified.
If you have any questions, please feel free to give me a call at 907-646-5103.
Sincerely,
David W. Burlingame, P.E.
Principal Engineer
Page 108
Renewable Energy Fund
Grant Application Round IV
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APPENDIX E: HEA LETTER OF SUPPORT
Page 109
Page 110
Renewable Energy Fund
Grant Application Round IV
AEA11-005 Grant Application
APPENDIX F: METEOROLOGICAL STUDY
Page 111
Energy Assessment for , Alaska
Prepared for
Josh Berkow
Apex Wind Energy
By
Jack Kline
RAM Associates
October 19, 2009
Wind data has been measured at a 60 m meteorological tower located on the Kenai Peninsula,
near Nikiski, Alaska. The period of data made available for analysis was from November 1,
2007 to April 13, 2009.
Data from a long-term reference site located two km (1.2 miles) to the north-northwest on a pier
at Nikiski for the period August 1996 through April 2009 has been provided. The mean wind
speed (mean of monthly means) for the full reference period at Nikiski was 4.22 m/s.
The observed mean wind speed (mean of monthly means) at the 58.5 m level of the Kenai site
was 5.54 m/s over its period of observation. However, the mean wind speed at the Nikiski pier
site during the concurrent period was 4.16 m/s, which is 1.4% below its long term average. A
climatological adjustment to the 58.5 m level wind speed at the Kenai site was made and its
long-term average wind speed is estimated to be 5.60 m/s. This represents a 1.1% increase from
its observed mean wind speed.
The observed vertical shear power law exponent, α, was measured to have a value of 0.21 at the
Kenai met tower. Assuming that this shear remains constant up to the turbine hub height of 80
m, the long-term mean wind speed at that level is estimated to be 5.98 m/s.
The project is designed to include 6 2.4 MW turbines with a 100 m rotor diameter and
a hub height of 80 m. The siting of the six turbines was performed by Apex Wind Energy. The
six sites are all located near the coast in an approximate north-northwest to south-southeast
orientation. Two of the sites are in forested areas and one is near an industrial area, downwind
of some of the associated structures. As such, these three turbines have surface roughness
elements that will reduce their effective hub heights on the order of four to eight meters, thus
reducing the mean wind speed at hub height marginally of those locations.
55 Cloverleaf Circle Ph. 925-240-7855
Brentwood, CA 94513 Fx. 925-240-7881
Page 112
Topographic variation of the wind speed was estimated based on the turbine sites’ elevations
and local exposure. Topographic wind speed effects were applied to each turbine site and
combined with the local shear effects to produce individual mean speed estimates. The
combined mean hub height wind speed for the six turbines is 5.92 m/s.
Local site air density at the 80 m level was calculated based on observed station pressure and
temperature data from the Anchorage ASOS station. The pressure data was corrected to hub
height using a hypsometric correction and the average air pressure was calculated to be 1.25
kg/m3. A power curve for the at that density was provided by .
Gross energy was calculated for each turbine using hourly average wind speed data from the
anemometer tower combined with scaling factors for each turbine site so that the mean speed
for each towers’ calculation was equal to the projected long-term hub height wind speed.
Array losses were calculated using an energy-conserving wake model developed by RAM
Associates. The wind regime indicates that the majority of the energy will come from north-
northeasterly wind directions. The design of the array is such that wake losses are calculated to
be very small, at 0.66% annually, as there will be little wake interaction between the turbine
sites, based on the wind rose and array design.
Other losses were taken for availability (assumed to be 95%), electrical losses, blade soiling and
icing, grid availability, power curve losses and turbulence losses and high speed stop/restart
hysteresis.
The gross energy was calculated to be 34.7 GWh/year (27.5% GCf) and after all losses were
taken the net energy was calculated to be 30.6 GWh/year (24.3% NCf).
55 Cloverleaf Circle Ph. 925-240-7855
Brentwood, CA 94513 Fx. 925-240-7881
Page 113
Renewable Energy Fund
Grant Application Round IV
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APPENDIX G: PROJECT LAYOUT
Page 114
È 6x 90m Rotor Turbines
Rotor Diameter: 90m
Setbacks: 243.75m
Turbine Spacing: 540m
Foundation Diameter: 18.3m
Parcels:
Other Owners
OWNER
AGRIUM US INC
ASRC ENERGY SERVICES INC
CHEVRON USA INC C/O CHEVRON CORP
CONOCOPHILLIPS COMPANY
KENAI PENINSULA BOROUGH
KENAI PIPELINE CO
TESORO ALASKA COMPANY
0 480 960240 Meters
PRIVELEGED AND CONFIDENTIAL
Turbines funded under
AEA Round 3
Turbines funded under
AEA Round 2
Page 115
Renewable Energy Fund
Grant Application Round IV
AEA11-005 Grant Application
APPENDIX H: COASTAL ZONE CONSISTENCY REVIEW
Page 116
Kenai Winds, LLC
c/o BQ Energy
20 Jon Barrett Rd., Suite 2
Patterson, NY 12563
Attn: Josh Berkow
Re: ACMP Review and Permits for Kenai Winds Project
I have received from you, and have reviewed your submittal to the Division of Coastal
and Ocean Management (DCOM) of the State of Alaska DNR for determination of
consistency with the Alaska Coastal Zone Management Program (ACMP).
The response from the DCOM dated February 6, 2009 indicates that the project located
near the Tesoro Kenai refinery does not require a State review for consistency with the
ACMP because it does not require permits subject to the ACMP. I have reviewed your
submittal and the response to determine if any other permits may be required for this
project.
In our discussions I am aware that, although not a permit, the project must comply with
Federal Aviation Administration (FAA) requirements for adequate warning lights and
that you will seek required authorization for power generation from State Agencies
and/or the regulatory commission of Alaska.
You will require a right of way to cross the State right of way with the buried power line
and it will likely be prudent to contact the State Historic Preservation Office (SHPO)
even though the submittal indicated that it is very unlikely that in the disturbed form
industrial areas to be used by the project that there will be any issues.
You have informed us that the Kenai Peninsula Borough or Nikiski does not have a
building permit requirement for the area in question.
Page 117
2
Overall; unless an issue is raised by one of the agencies copied by the DCOM, it would
appear that, other than the issues raised in this letter, no other permits will be required for
this project.
Sincerely,
ECOLOGY & ENVIRONMENT INC.
James D. Gill P.E.
Anchorage Manager
Page 118
SARAH PALIN, GOVERNOR
DEPARTMENT OF NATURAL RESOURCES
DIVISION OF COASTAL AND OCEAN MANAGEMENT
http://www.a/askacoast.state.ak.us
o SOUTHCENTRAL REGIONAL OFFICE o CENTRAL OFFICE
550 W 7'h AVENUE SUITE 705 302 GOLD STREET, SUITE 202
ANCHORAGE, ALASKA 99501 P.O. Box 111030
PH: (907) 269-7470 FAX: (907) 269-3891 JUNEAU, ALASKA 99811-1030
PH: (907) 465-3562 FAX: (907) 465-3075
February 6, 2009
Kenai Winds, LLC
Attn: Josh Berkow
c/o BQ Energy
20 Jon Barrett Rd., Suite 2
Patterson, NY 12563
SUBJECT: ACMP REVIEW NOT REQUIRED AT THIS TIME
Kenai Winds Project
ID2009-0134AA
Dear Mr. Berkow:
The Division of Coastal & Ocean Management (DCOM) has reviewed the Coastal Project
Questionnaire (CPQ) and other pertinent information regarding the above referenced project. Based
upon the information you have supplied, your proposed project does not require a State review for
consistency with the Alaska Coastal Management Program (ACMP), because it does not require
permits subject to the ACMP.
You are not relieved from obtaining required permits and approvals from state, federal or local
agencies before you begin the proposed work. Nothing in this letter excuses you from compliance
with other statutes, ordinances, or regulations that may affect any proposed work.
This decision is ONLY for the proposed project as described. If there are any changes to the
proposed project, including its intended use, prior to or during its siting, construction, or operation,
contact this office immediately to determine if further review and approval of the revised project is
necessary.
Thank you for your cooperation with the ACMP.
Sincerely,
Peter Boyer
Project Review Coordinator
"Develop, Conserve, and Enhance Natural Resources for Present and Future Alaskans. " Page 119
end: CPQ, page 1&2
cc: Adele Lee, ACMP Liaison, DML W
David Gann, DCOM
Marla Carter, ADFG
Ellen Simpson, ADFG
Fran Mann, FWS
Fran Roche, DEC -JNU
Gary Williams, Coastal District Coordinator
Ginny Litchfield, ADFG/Habitat
Lee McKinley, ADFG/Habitat
Linda Markham, ADOT&PF
Lynnda Kahn, FWS
Pamela Russell, Kenai River Center
Sean Palmer, DEC -ANC
SHPO, DNRlSHPO
Susan Chihuly, ADFGIHabitat
USACE Regulatory Branch, USACE
Page 120
Renewable Energy Fund
Grant Application Round IV
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APPENDIX I: SOUTH FORK LLC PETITION TO THE RCA
Page 121
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STATE OF ALASKA
THE REGULATORY COMMISSION OF ALASKA
Before Commissioners:
In the Matter of the Petition Filed by Southfork
Hydro LLC for an Exemption from Regulation
under AS 42.05.711(d)
u-08-1 02(2) - (021 0e | 200e)
Page 1 of 5
Robert M. Pickett, Chairman
Kate Giard
Mark K. Johnson
Anthony A. Price
Janis W. Wilson
u-08-102
ORDER NO. 2
BY THE COMMISSION:
Summary
We grant the petition of Southfork Hydro LLC (Southfork) for exemption
from regulation. We close this docket.
Backqround
Southfork filed a petition for an exemption from the requirements of
AS 42.05, in accordance with AS 42.05.711(ü.1 Matanuska Electric Association, Inc.
(MEA)filed a response to the Petition.2
'Letter from P. Janke, filed August 20, 2008 (Petition).
zPetition for Waiver Pursuanf fo AS 42.05.711(d), filed August 29, 2008 (MEA
Response), as corrected by Errata to MEA's Response to Petition for Waiver Pursuant
fo AS 42.05.711(d), filed September 2,2008.
Page 122
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Discussion
Southfork is single-project company that is developing a small run-of-the-
river hydroelectric generation facility within MEA's service territory that is planned to
produce less than 5 gigawatt-hours of electricity per year for sale to MEA.3 Once in
operation, Southfork will likely come within the statutory definition of a "public utility" that
is subject to regulation by us.a The Petition requests that we exempt Southfork from
regulation under AS 42.05.711(d):
The commission may exempt a utility, a class of utilities, or a utility service
from all or a portion of this chapter if the commission finds that the exemption
is in the public interest.
The Petition asserts that for a small renewable energy producer
Southfork, regulation is very costly and onerous because its support organizations
'Petition at 1, MEA Response at 1.
oAS ¿2.05.990(4) provides in part:
"public utility" or "utility" includes every corporation whether public,
cooperative, or othen¡uise, company, individual, or association of individuals,
their lessees, trustees, or receivers appointed by a court, that owns,
operates, manages, or controls any plant, pipeline, or system for (A)
furnishing, by generation, transmission, or distribution, electrical services to
the public for consumption.
AS 42.05.990(3) provides in part:
"public" or "general public" means
(B) one or more customers that purchase electrical service for use within
an area that is certificated to and presently or formerly served by an electric
utility if the total annual compensation that the electrical utility receives for
sales of electricity exceeds $50,000; and
(C) a utility purchasing the product or service or paying for the transmission
of electric energy, natural or manufactured gas, or petroleum products that
are re-sold to a person or group included in (A) or (B) of this paragraph or
that are used to produce the service or commodity sold to the public by the
utility.
u-08- 1 02(2) - (02t 0e | 200e)
Page 2of 5
like
are
Page 123
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comprised of only a few non-specialist people not proficient with regulation, and that
over-regulation will chill the development of renewable energy. Southfork also states
that it will be indirectly regulated because MEA will need to obtain our approval of its
purchase contract with Southfork.5
MEA states that it will be the sole purchaser of the output of the Southfork
facility, and because of its location the project will only affect consumers on the MEA
distribution system.6 MEA agrees that its agreement to purchase the Southfork output
will be subject to our approval under AS 42.05.361(a), so granting the requested
exemption will not result in any increased risks to consumers.t The MEA Response
expresses concern that our administrative burden would increase if we went through the
process of issuing certificates of public convenience and necessity to Southfork and
other small distributed generation prolects in the MEA service area, resulting in higher
regulatory cost charges to MEA.8 MEA is also concerned that the distributed generation
projects could have overlapping service territories that would likely cause confusion to
consumers and require additional proceedings before us to resolve.e MEA expresses
concern that the Southfork project and other similar projects may not be economical
with the added burden of regulation, and therefore regulation would tend to discourage
these projects.lo MEA supports the Petition and also urges us to consider adopting
rules that would exempt small generators from regulation.ll
sPetition at 1.
6MEA Response at 1.
'td. aT 2.
Btd.
etd. atg.
to rd.
tt rd.
u-08- 1 02(2) - (02t }st 200e)
Page 3 of 5 Page 124
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We find that it is in the public interest at this time to exempt Southfork from
regulation. Southfork's sole customer, MEA, is a sophisticated regulated electric utility,
and MEA supports granting the exemption. The purchase and sale agreement between
Southfork and MEA is subject to our approval underAS 42.05.361(a) even if we grant
the exemption to Southfork. So long as Southfork operates only one small distributed
generation project, it will remain a relatively small company for which the expense of
regulatory compliance would be relatively large. Exemption from regulation in
appropriate circumstances may encourage small distributed renewable generation
projects. Finally, if a change circumstances occurs that warrants or requires that we
regulate Southfork, we have the authority to revoke this exemption. For these reasons
we grant Southfork's request for exemption from regulation under AS 42.05.
Final Order
This order constitutes the final decision in this proceeding. This decision
may be appealed within thirty days of the date of this order in accordance with
AS 22.10.020(d) and the Alaska Rules of Court, Rule of Appellate Procedure
(Ak. R. App. P.) 602(a)(2). ln addition to the appellate rights afforded by
AS 22.10.020(d), a party may file a petition for reconsideration as permitted by
3 AAC 48.105. lf such a petition is filed, the time period for filing an appeal is then
calculated under Ak. R. App. P. 602(a)(2).
Docket Closure
With the above determinations, no substantive or procedural matters
remain in this proceeding, and there are no allocable costs under AS 42.05.651 and
3 AAC 48.157. Accordingly, we close this docket.
u-08-1 02(2) - (02t 0e | 200s)
Page 4of 5 Page 125
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ORDER
THE COMMISSION FURTHER ORDERS:
1. The request for exemption from regulation filed August 17,
Southfork Hydro LLC is granted.
2. Docket U-08-102 is closed.
DATED AND EFFECTIVE at Anchorage, Alaska, this 9th day of February,200g.
BY DIRECTION OF THE COMMISSION
(Commissioners Kate Giard and Anthony A. price,
not participating.)
u-08- 1 02(2) - (02t 0e t 200e)
Page 5 of 5
2009, by
Page 126
Renewable Energy Fund
Grant Application Round IV
AEA11-005 Grant Application
APPENDIX J: FAA DETERMINATION OF NO HAZARD
Page 127
Federal Aviation Administration
Air Traffic Airspace Branch, ASW-520
2601 Meacham Blvd.
Fort Worth, TX 76137-0520
Aeronautical Study No.
2009-WTW-847-OE
Page 1 of 2
Issued Date: 02/18/2009
Josh Berkow
BQ - Kenai
20 Jon Barrett Rd. Suite 2
Patterson, NY 12563
** DETERMINATION OF NO HAZARD TO AIR NAVIGATION **
The Federal Aviation Administration has conducted an aeronautical study under the provisions of 49 U.S.C.,
Section 44718 and if applicable Title 14 of the Code of Federal Regulations, part 77, concerning:
Structure: Wind Turbine KT-1
Location: Kenai, AK
Latitude: 60-39-59.57N NAD 83
Longitude: 151-22-33.64W
Heights:459 feet above ground level (AGL)
609 feet above mean sea level (AMSL)
This aeronautical study revealed that the structure does not exceed obstruction standards and would not be a
hazard to air navigation provided the following condition(s), if any, is(are) met:
As a condition to this Determination, the structure is marked and/or lighted in accordance with FAA Advisory
circular 70/7460-1 K Change 2, Obstruction Marking and Lighting, white paint/synchronized red lights -
Chapters 4,12&13(Turbines).
It is required that FAA Form 7460-2, Notice of Actual Construction or Alteration, be completed and returned to
this office any time the project is abandoned or:
_____ At least 10 days prior to start of construction (7460-2, Part I)
__X__ Within 5 days after the construction reaches its greatest height (7460-2, Part II)
This determination expires on 02/18/2011 unless:
(a) extended, revised or terminated by the issuing office.
(b) the construction is subject to the licensing authority of the Federal Communications Commission
(FCC) and an application for a construction permit has been filed, as required by the FCC, within
6 months of the date of this determination. In such case, the determination expires on the date
prescribed by the FCC for completion of construction, or the date the FCC denies the application.
NOTE: REQUEST FOR EXTENSION OF THE EFFECTIVE PERIOD OF THIS DETERMINATION
MUST BE POSTMARKED OR DELIVERED TO THIS OFFICE AT LEAST 15 DAYS PRIOR TO THE
EXPIRATION DATE.
Page 128
Page 2 of 2
Additional wind turbines or met towers proposed in the future may cause a cumulative effect on the national
airspace system. This determination is based, in part, on the foregoing description which includes specific
coordinates and heights . Any changes in coordinates will void this determination. Any future construction or
alteration requires separate notice to the FAA.
This determination does include temporary construction equipment such as cranes, derricks, etc., which may be
used during actual construction of the structure. However, this equipment shall not exceed the overall heights as
indicated above. Equipment which has a height greater than the studied structure requires separate notice to the
FAA.
This determination concerns the effect of this structure on the safe and efficient use of navigable airspace
by aircraft and does not relieve the sponsor of compliance responsibilities relating to any law, ordinance, or
regulation of any Federal, State, or local government body.
If we can be of further assistance, please contact our office at (770) 909-4401. On any future correspondence
concerning this matter, please refer to Aeronautical Study Number 2009-WTW-847-OE.
Signature Control No: 616247-108311804 ( DNE -WT )
Earl Newalu
Specialist
Page 129
Renewable Energy Fund
Grant Application Round IV
AEA11-005 Grant Application
APPENDIX K: LETTER OF SUPPORT FROM KPB MAYOR
Page 130
Page 131
Renewable Energy Fund
Grant Application Round IV
AEA11-005 Grant Application
APPENDIX L: LETTER OF SUPPORT FROM CEA
Page 132
Page 133
Renewable Energy Fund
Grant Application Round IV
AEA11-005 Grant Application
APPENDIX M: LETTER OF SUPPORT FROM TESORO
Page 134
Page 135
Renewable Energy Fund
Grant Application Round IV
AEA11-005 Grant Application
APPENDIX N: KPB ASSEMBLY RESOLUTION ON CLIMATE
CHANGE
Page 136
Kenai Peninsula Borough, Alaska New Text Underlined; [DELETED TEXT BRACKETED]Resolution 2007-069
Page 1 of 2
Introduced by:Long, Gilman, Martin, Smith
Date:10/23/07
Action:Postponed Until 11/20/07
Action:Postponed Until 01/08/08
Action:Adopted as Amended
Vote:6 Yes, 3 No, 0 Absent
KENAI PENINSULA BOROUGH
RESOLUTION 2007-069
A RESOLUTION COMMITTING TO THE DEVELOPMENT OF A LOCAL CLIMATE
CHANGE IMPACT PLAN
WHEREAS,the Kenai Peninsula Borough Assembly has recognized the need to develop a
community understanding of the potential impacts, adaptation to, and opportunities
from climate change and learn what local actions could be taken and then consider
appropriate steps to address these issues; and
WHEREAS,numerous Alaskan commissions and panels charged with identifying Alaska’s
climate change indicators, have been considering the local impacts measured through
research and observations. These include the University of Alaska International
Polar Year Scenarios Network for Alaska Planning (SNAP) activities, Alaska Center
for Climate Assessment and Policy (ACCAP) research on public infrastructure
impact costs, the Denali Commission’s community surveys, Governor Palin’s Sub-
Cabinet Panel on Climate Change, the Alaska Army Corp of Engineers, and Homer’s
Global Warming Task Force; and
WHEREAS,numerous University of Alaska scientists have presented information developed from
their research that points to both short term and long term impacts to the natural
environment and surrounding communities, including increased risks of forest fire,
floods, and coastal erosion; and
WHEREAS,local actions to increase energy efficiency and alternative energy developments are
expected to reduce the high cost of energy needed to heat our homes and our
businesses and, when incorporated into a borough energy plan that would reduce the
use of fossil fuels, will be effective in adapting to climate impacts, producing
financial savings, strengthening our economy, improving air quality and lead to a
healthier, sustainable community;
NOW THEREFORE, BE IT RESOLVED BY THE ASSEMBLY OF THE KENAI
PENINSULA BOROUGH:
SECTION 1.That the Kenai Peninsula Borough commits to develop a Climate Change Impact
plan that will promote public awareness of the benefits of developing and
implementing a plan that improves our local economy, and that protects our
resources and borough residents.
Page 137
Resolution 2007-069 New Text Underlined; [DELETED TEXT BRACKETED] Kenai Peninsula Borough, Alaska
Page 2 of 2
SECTION 2.That the Assembly requests the Mayor to specifically develop a Climate Change
Impact plan that includes:
1. Study and assess the Borough’s vulnerability
The Kenai Peninsula Borough shall work with local and agency experts to assess
vulnerabilities and opportunities associated with climate change.
2. Set goals and prioritize
Based on the assessment, the borough shall develop a prioritized list of goals and targets that
reduce climate change vulnerabilities and enhance opportunities, including goals based on
a borough energy plan that prioritizes cost savings and reduces emissions.
3. Develop the plan
Produce a concise plan that describes the action and policies for adapting to climate change
by reducing the negative impacts and taking advantage of opportunities. The plan will
include a description of timing, financial impact, responsible parties, and potential partners.
4. Implement the plan
The Borough administration will implement the plan provided that any parts of the plan
requiring appropriation will necessitate Assembly approval and/or notification.
5. Monitor efforts and reevaluate the plan
The responsible parties will document results and accomplishments towards the goals in the
plan and will periodically report those findings to the Mayor, Assembly and public in order
that they may determine if revision of the plan or if an alternative approach is necessary to
reach the goals set in the plan.
SECTION 3.That this resolution takes effect immediately upon its adoption.
ADOPTED BY THE ASSEMBLY OF THE KENAI PENINSULA BOROUGH THIS 8TH
DAY OF JANUARY, 2008.
Grace Merkes, Assembly President
ATTEST:
Sherry Biggs, Borough Clerk
Yes:Gilman, Knopp, Long, Martin, Smith, Sprague
No:Fischer, Superman, Merkes
Absent:None
Page 138
Renewable Energy Fund
Grant Application Round IV
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APPENDIX O: KPB ASSEMBLY RESOLUTION ON
GREENHOUSE GASES
Page 139
Kenai Peninsula Borough, Alaska New Text Underlined; [DELETED TEXT BRACKETED]Resolution 2008-007
Page 1 of 2
Introduced by:Smith
Date:01/22/08
Action:Adopted
Vote:9 Yes, 0 No, 0 Absent
KENAI PENINSULA BOROUGH
RESOLUTION 2008-007
A RESOLUTION COMMITTING TO REDUCING ENERGY CONSUMPTION AND
GREENHOUSE GAS EMISSIONS BY PARTICIPATING IN THE ENERGY STAR
SEVEN STEP CHALLENGE PROGRAM
WHEREAS,the cost to the taxpayers of the Kenai Peninsula Borough for purchased energy has
risen to unprecedented levels, both in total dollars and as a percentage of budget; and
WHEREAS,the Kenai Peninsula Borough Assembly has recognized the need to develop a plan
to understand and control the rising costs of energy for heating, lighting and
powering Borough activities. At a minimum, this includes all energy consuming
activities within Borough buildings and schools, transportation and maintenance use,
solid waste operations, plus operational and management practices; and
WHEREAS,numerous University of Alaska scientists have presented information developed from
their research which indicate that high levels of green house gases have led to both
short term and long term impacts to the natural environment and surrounding
communities; including weather anomalies, increased risk of forest fire, floods and
coastal erosion; and
WHEREAS,actions which reduce energy consumption also reduce greenhouse gas emissions; and
WHEREAS,numerous municipalities and businesses throughout Alaska and the United States
have realized dramatic savings by developing and implementing an Energy Action
Plan based on proven methodology; and
WHEREAS,nationwide experience indicates that the most benefit is derived when some staff is
dedicated to an energy management program in order to set goals, track progress and
promote energy management; and
WHEREAS,Borough actions to increase energy efficiency and utilize alternative energy
developments are expected to reduce the amount of energy used by Borough
activities and would reduce the use of fossil fuels, produce financial savings,
strengthen our economy, reduce dependence on foreign oil, improve air quality and
lead to a healthier, sustainable community;
Page 140
Resolution 2008-007 New Text Underlined; [DELETED TEXT BRACKETED] Kenai Peninsula Borough, Alaska
Page 2 of 2
NOW THEREFORE, BE IT RESOLVED BY THE ASSEMBLY OF THE KENAI
PENINSULA BOROUGH:
SECTION 1.That in order to increase energy efficiency and conserve tax dollars, the Kenai
Peninsula Borough Assembly commits to develop an Energy Efficiency Action Plan
using the Energy Star Challenge seven step program created by the U.S. Departments
of Energy and Environmental Protection.
SECTION 2.That the Assembly requests the Mayor to develop and coordinate, for all borough
operations, an Energy Efficiency Action Plan following Energy Star guidelines and
present that plan for Assembly approval.
SECTION 3.That this resolution takes effect immediately upon its adoption.
ADOPTED BY THE ASSEMBLY OF THE KENAI PENINSULA BOROUGH THIS 22ND
DAY OF JANUARY, 2008.
Grace Merkes, Assembly President
ATTEST:
Sherry Biggs, Borough Clerk
Yes:Fischer, Gilman, Knopp, Long, Martin, Smith, Sprague, Superman, Merkes
No:None
Absent:None
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Renewable Energy Fund
Grant Application Round IV
AEA11-005 Grant Application
APPENDIX P: LETTER OF SUPPORT FROM AK HOUSE
REPRESENTATIVE
Page 142
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Renewable Energy Fund
Grant Application Round IV
AEA11-005 Grant Application
APPENDIX Q: CORPORATE AUTHORIZATION LETTER
Page 144
APEX WIND ENERGY, INC.
40 GARDEN ST. SUITE 203
POUGHKEEPSIE, NY 12601 845-473-0300
WWW.APEXWIND.COM
Alaska Energy Authority September 15, 2010
813 West Northern Lights Blvd
Anchorage, AK 99503
Attn: Mr Butch White
RE: AEA‐11‐005 Renewable Energy Grant Application
Dear Mr White,
Apex Wind wholeheartedly endorses the application of Kenai Winds LLC to the Alaska Energy
Authority for financial support under RFP AEA‐11‐005. Apex Wind LLC is currently the sole
member of Kenai Winds and we will continue to do all in our powers to ensure that this
important project is built and operated in a fashion that will make the people of Nikiski and the
entire State of Alaska proud.
Apex Wind is a member‐managed Delaware limited liability company. As such we do not have a
formal Board of Directors as described in your RFP. However, I am authorized by the members
of Apex Wind to state that Apex Wind is committed to complete the development of the Kenai
Winds facility in accordance with the business plan described in this submittal. Although not as
large as some wind farms, we think that the location and setting make the Nikiski site ideal for a
wind farm development. We are very much looking forward to finalizing development and
construction of this important project.
The role of Apex Wind in this venture will continue to be diverse. We are the project manager.
In the world of energy development, that means we are responsible for all aspects of the
project. Although we do not have the in‐house expertise on all aspects of any project, it is our
responsibility to ensure that we find and deploy such expertise for any project need of Kenai
Winds. This expertise can come from industry experts such as federal tax experts, or financing
organizations. The expertise and resources can also come from our fellow stakeholders at
Tesoro, Homer Electric, and Chugach Electric who have great knowledge of the local area and
community as well as tremendous awareness of the Alaska energy outlook. Apex Wind will
bring these capabilities together to the advantage of Kenai Winds LLC to ensure its success.
Financing of the venture is a key Phase 3 activity and we remain confident of the success in that
area as evidenced by our matching aspect of this bid which will exceed 50%
We look forward to working with the Alaska Energy Authority on this key project.
Senior Executive VP
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Renewable Energy Fund
Grant Application Round IV
AEA11-005 Grant Application
APPENDIX R: ELECTRICAL ONE-LINE DIAGRAM
Page 146
115 kVTO BERNICE LAKE & SOLDOTNA STATIONS2000 AOCBN B7NIKISKI 138.0 MVA0.85 PF13.8 kV3PH, 60 CYC1500 AZ = 7.1%115 kV / 13.2 kV21/33/45 MVANIKISKI T3Z = 7.1%115 kV / 13.2 kV21/33/45 MVANIKZ = 7.1%115 kV / 13.2 kV21/33/45 MVANIK2000 AOCBN B72000 AOCBN B72000 AOCBN B42000 AACBN12000 AOCBN B72000 AVCBN B112000 AVCBN B82.4 MWWind Turbine Generator12.4 MWWind Turbine Generator22.4 MWWind Turbine Generator32.4 MWWind Turbine Generator42.4 MWWind Turbine Generator5Z = 5%4.16 kV - 600 V2.5 MVA2.4 MWWind Turbine Generator6Z = 4.5%13.8 kV - 480 V500 kVAStation Servicejberkow@axiopower.comKENAI WINDS 14.4 MW WIND ENERGY PROJECT115 kV & 4.16 kV ONE LINE DIAGRAMPROPOSED MODIFICATIONS TO NIKISKI SUBSTATIONLOCATIONDATEREVNIKISKI, AK11 / 06 / 20090SCALE1:1SHEET1OF120 JON BARRETT RD.SUITE 2PATTERSON ,NY 12563USA115 kV SWITCHYARDKENAI WINDS 5MW EXPANSIONPage 147
Renewable Energy Fund
Grant Application Round IV
AEA11-005 Grant Application
APPENDIX S: USFWS AVIAN MORTALITY FACT SHEET
Page 148
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Renewable Energy Fund
Grant Application Round IV
AEA11-005 Grant Application
APPENDIX T: USFWS GUIDANCE TO KENAI WINDS
Page 151
1
Josh Berkow
From:Lynnda_Kahn@fws.gov
Sent:Tuesday, November 24, 2009 2:32 PM
To:josh.berkow@bqenergy.com
Cc:Douglas_Palmer@fws.gov; Ellen_Lance@fws.gov; gwilliams@borough.kenai.ak.us
Subject:BQ Energy / Kenai Winds
Importance:High
Hi Josh. Thanks for talking with me last week. I am providing some information that I hope will
assist you with your endeavors.
The U.S. Fish and Wildlife Service (Service) is the primary wildlife agency involved with wind
power development, with regulatory responsibilities for birds, bats and three marine mammals in
Alaska, including sea otters. The Service's authority for wildlife issues is defined in the Endangered
Species Act (ESA), Migratory Bird Treaty Act (MBTA), Bald and Golden Eagle Protection Act
(BGEPA), the Fish and Wildlife Coordination Act, and all the implementing regulations for these
laws. The most important issue for the Service regarding wind power development is the avoidance
and mitigation of bird and bat collisions with wind turbines and associated power transmission
structures.
There is substantial information on the effects of wind power development on birds in other parts of
the U.S. but very little in Alaska. The Service has therefore approached the development of wind
power in Alaska with caution until the level of risk to birds in different environments is better
understood. The Service supports the development of alternative energy projects in Alaska,
understanding the importance of reducing greenhouse gas emissions and addressing climate
changes which may have wide-ranging and significant effects on bird populations, especially in the
arctic. Our challenge is to protect birds from incidental mortality (under the directive of the MBTA
and BGEPA) while gathering data about the level of actual mortality from wind projects under
different conditions. We understand there may be bird mortalities at wind power developments,
even if all of the guidance has been followed. However, we are attempting to gather data on
seasonal effects, identify problem areas (e.g. recurrent, significant mortality events), identify types
of situations with little or no risk to birds, and would like to work with power developers to
minimize or mitigate any problem situations if they arise. We therefore encourage developers to
communicate with us about their monitoring efforts and general results, even if no problems are
encountered.
The following information is being provided to assist BQ Energy with its Kenai Winds Project.
This guidance is intended to be useful for all wind power developments, whether or not they have
federal involvement.
Threatened and Endangered Species
We have reviewed this project for potential impacts to endangered or threatened species, pursuant
to section 7 of the Endangered Species Act (ESA) of 1973 (87 Stat. 884, as amended, 16 U.S.C.
1531 et seq.). Our records indicate no federally listed or proposed species and/or designated or
proposed critical habitat within the action area of the proposed project. Therefore, no further
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2
consultation pursuant to the ESA is required for this project at this time. However, obligations
under section 7 of the Act must be reconsidered and consultation reinitiated if new information
reveals project impacts that may affect listed species or critical habitat in a manner not previously
considered or if this action is subsequently modified in a manner which was not considered in this
assessment.
Potential Impacts to Bald Eagles
Bald eagles may nest near the project vicinity. Bald eagles, their eggs, and their nests are protected
throughout the United States by the Bald and Golden Eagle Protection Act (BGEPA), and by the
MBTA. These federal laws forbid “take”, which is defined to include pursue, hunt, shoot, shoot at,
poison, wound, kill, capture, trap, collect, possess, molest, or disturb. To help landowners,
developers, and others avoid such impacts, the Service has developed guidelines for management
of nest sites. Compliance with the guidelines is voluntary, not mandatory. Those who follow the
guidelines reduce the risk of impacting eagles, and of violating the laws that protect these birds.
Those who do not follow the guidelines increase the risk of impacts and of prosecution if take
occurs. The National Bald Eagle Management Guidelines can be downloaded at:
http://www.fws.gov/migratorybirds/issues/BaldEagle/NationalBaldEagleManagementGuidelines.p
df . Additional help determining whether your activity may disturb eagles and suggestions for
avoiding disturbance, are available at: http://alaska.fws.gov/birds/guidelines/index.html.
Potential Impacts to Migratory Birds
Under the Migratory Bird Treaty Act (MBTA) it is illegal for anyone to “take” migratory birds,
their eggs, feathers or nests. “Take” under the MBTA includes by any means or in any manner, any
attempt at hunting, pursuing, wounding, killing, possessing or transporting any migratory bird, nest,
egg, or part thereof. The MBTA does not distinguish between intentional and unintentional take. In
Alaska, all native birds except grouse and ptarmigan (protected by the State of Alaska) are
protected under the MBTA. The Service has oversight and enforcement responsibility but does not
issue permits for projects impacting birds.
The MBTA has provisions limiting vegetation clearing to non-nesting seasons, thus clearing should
be performed prior to May 1st or after July 15th to avoid "take". While the Kenai Winds Project
apparently won’t have a federal nexus, BQ Energy is still responsible for avoiding "take" as
described under the MBTA and BGEPA. There is no "take" provision authorized by the MBTA.
That is why we strongly encourage developers to coordinate with the Service about pre-
construction surveys and siting of structures as such relates to potential "take" of migratory birds /
eagles. The Service released voluntary, interim guidelines in July of 2003
(http://www.fws.gov/habitatconservation/wind.pdf) regarding effective siting measures to reduce
potential "take" as such relates to land-based wind-energy facilities. The Service is in the process of
developing final national recommendations but they are not expected to be available in time to
inform the Kenai Winds wind farm plans, so the interim guidelines remain current.
Wind energy facilities have the potential to adversely impact migratory birds. In the case of the
Kenai Winds Project, the primary concern is to prevent birds from colliding with turbines and
associated structures. Collision risks occur with any tall structure such as wind turbines,
particularly in times or areas of low visibility, and are amplified by the presence of attractants.
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3
Attractants include lights that may confuse and cause birds to circle the light source in periods of
low visibility, and feeding or resting habitat that draws flocks of migrating birds from surrounding
areas or higher altitudes and through the rotor-swept area in the course of landing or take-off, when
they may be less able to control and re-direct their flight.
Data regarding collision risks is more readily available for communication towers at this time than
for wind turbines, but many of the same principles apply, particularly in regard to risks associated
with light attractants. The following summary information from Manville (2005) is relevant to
planning for the Kenai Winds wind farm:
From a collision perspective the towers that cause the most problems
are…..illuminated at night with solid or pulsating incandescent red lights, guyed, near
wetlands, in major songbird migration pathways or corridors, and with a history of
inclement weather during spring and fall migrations. All towers, however, have the
potential to kill birds. Light appears to be a key attractant for night-migrating
songbirds, especially on nights with poor visibility, low cloud ceilings, heavy fog, or
various forms of precipitation associated with either passing or stationary cold fronts.
(P. 1056)
Wind generation has one significant down side: rotor blades kill birds – especially
raptors….birds can strike the towers….and wind farms may impact bird movements
and habitat use. (P. 1058)
Even with a bright future for growth, and with low speed tubular-constructed wind
turbine technology now being stressed, larger and slower moving turbines still kill
raptors, passerines, waterbirds, other birds, and bats. Low wind speed turbine
technology requires much larger rotors . . . and blade tips can reach speeds in excess
of 320 kph (200 mph) under windy conditions . . . When birds approach spinning
turbine blades, “motion smear” – the inability of the bird’s retina to process high
speed motion stimulation – occurs primarily at the tips of the blades, making the
blades deceptively transparent at high velocities. This increases the likelihood that a
bird will fly through this arc, be struck by a blade, and be killed. (P. 1059)
The following Best Management Practices for wind energy development in Alaska are intended to
assist developers who are in the planning and design process to further reduce potential impacts to
wildlife:
1. Minimize, to the extent practicable, the area disturbed by site development, construction and
operation.
2. Avoid locations identified to have high risk to birds and bats, including, but not limited to, areas
within:
a) ½ mile of all coastlines;
b) 1 mile of major wildlife staging areas;
c) ½ mile of seabird nesting colonies, and;
d) migration corridors or travel corridors between feeding and roosting/nesting sites.
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4
3. Avoid disturbing active raptor nest sites.
4. Time site-clearing and development activities to avoid the bird nesting season.
5. If eagles congregate or their nests occur on or within ¼ mile of the site, follow the Bald Eagle
Management Guidelines, which can be found at:
http://www.fws.gov/migratorybirds/issues/BaldEagle/NationalBaldEagleManagementGuidelines.p
df.
6. Site wind power projects on disturbed lands where possible, unless development there would
result in greater risk to wildlife than on undisturbed lands.
7. Minimize construction and management activities that may attract prey and predators to the wind
turbine site (e.g., avoid replacing native vegetation with grass that could attract geese; avoid
creating perches that would attract hunting raptors).
8. To reduce bird collisions, place transmission lines associated with the wind energy development
underground, to the extent possible, unless burial of the lines is prohibitively expensive (i.e., where
shallow bedrock exists), or where greater impacts to biological resources would result. Overhead
lines may be acceptable if they:
a) are sited away from areas used by high numbers of birds crossing between roosting and
feeding areas, or between lakes, rivers and nesting areas;
b) employ bird flight diverters or related deterrent devices, or are otherwise bird-friendly and
visible so that collision risk is reduced;
c) and all transformers, conductors and related infrastructure are designed to be bird- friendly
and fully comply with the Avian Power Line Interaction Committee 2006 “Suggested
Practices for Avian Protection on Power Lines” and 1994 “Mitigating Bird Collisions at
Power Lines” (currently being rewritten with publication anticipated in early 2010).
9. Guy wires and tower lighting should be avoided when possible. Use self-supporting towers for
wind turbines as well as temporary and permanent meteorological towers. If guy wires are
necessary, bird flight diverters or high visibility marking devices should be used. If lights are
necessary on towers or turbines, see recommendations in 10 and 11 below.
10. To avoid disorienting or attracting migratory birds, FAA-required visibility lighting of wind
turbines should employ only strobe, strobe-like or blinking incandescent lights; no steady burning
lights should be used.
11. Keep lighting at both operation and maintenance facilities, as well as any substations located
within ½ mile of the turbines, to the minimum level needed for safety and security:
a) use lights with motion or infrared sensors and switches to keep lights off when not
required;
b) lights should be hooded, down-shielded and directed to minimize horizontal and skyward
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5
illumination; and
c) do not use high intensity lighting, steady-burning, or bright lights such as sodium vapor or
spotlights.
12. Establish buffer zones to avoid disturbing raptor nests, bat roosts, areas of high bird or bat use,
or special-status habitats identified in pre-construction studies. Determine the extent of the buffer
zone in consultation with the Service, State and local wildlife biologists, and land management
agencies (e.g., BLM).
13. Locate turbines to avoid separating birds and bats from their daily roosting, feeding, or nesting
sites.
14. Use tubular towers (as opposed to lattice towers) or best available technology to reduce ability
of birds to perch and to reduce collision risk.
15. Minimize the number and length of access roads.
16. Use only plants native to the area for seeding or planting.
17. Where warranted, develop a project specific habitat conservation and/or restoration plan to
avoid or minimize negative impacts to vulnerable wildlife while maintaining or enhancing habitat
values for other species.
18. For projects that are either large (more than 10 large turbines or 15 medium-sized turbines) or
located in areas of concern for birds or bats, developers may need to work with the Service to craft
an Avian and / or Bat Protection Plan.
Based on your October 1, 2008 email (below) to Gary Williams (ACMP), we understand BQ
Energy planned to conduct a NEXRAD radar survey to determine the potential for strike impacts
on birds. The Service would like to review the survey data resulting from this study, as well as the
site plan, and we would appreciate the opportunity to discuss this with you further. We look
forward to working with you on this project and will be happy to assist in any way we can. If you
have any questions you may reach me at (907) 260-0131. Thank you for your cooperation.
References
Manville, Albert M. 2005. Bird Strikes and Electrocutions at Power Lines,
Communication Towers, and Wind Turbines: State of the Art and State of the Science
– Next Steps Toward Mitigation. USDA Forest Service Gen. Tech. Rep. PSW-GTR-
191.
Lynnda Kahn
Fish & Wildlife Biologist
U.S. Fish & Wildlife Service
Kenai Fish & Wildlife Field Office
43655 Kalifornsky Beach Road
Soldotna, AK 99669-8296
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Grant Application Round IV
AEA11-005 Grant Application
APPENDIX U: WIND ENERGY AVAIN MORTALITY REPORT
BY WEST INC.
Page 157
Updated Summary of Bird and
Bat Fatalities from Wind-Energy
Facilities… and other stuff
Wallace Erickson, Kimberly Bay, Matt Kesterke
May 25, 2010
Collision Mortality
Focus Groups/Species
•Raptors
–Ferruginous hawk
–Burrowing owl
–Golden eagle
•New “take”
provisions
•Bats
•Songbirds – resident
and nocturnal
•Waterfowl
•Other waterbirds
Mortality Studies in North
America
Western (13)
Washington, Oregon,
California
Rocky Mountain (3):
Montana, Wyoming,
Alberta (Canada)
Upper Midwest (7):
Iowa, Illinois, Minnesota,
Nebraska, Wisconsin
Southern Plains(2):
Texas, Oklahoma
Eastern (12):
Maine, New York,
Pennsylvania, Tennessee,
West Virginia
All Bird Mortality
~3/MW/yr
Raptor Mortality
0.13 /MW/yr
Page 159
Mortality by Bird Species
• 180 identifiable
avian species
recorded as
causalities.
• 1,847 total avian
casualties
across all of the
sites reviewed.
Species Fatalities % Composition
horned lark 281 16.8
golden-crowned kinglet 111 6.6
American kestrel 80 4.8
European starling 61 3.6
red-eyed vireo 60 3.6
red-tailed hawk 57 3.4
ring-necked pheasant 51 3.0
western meadowlark 46 2.7
ruby-crowned kinglet 23 1.4
rock pigeon 21 1.3
chukar 19 1.1
dark-eyed junco 18 1.1
mallard 17 1.0
red-winged blackbird 17 1.0
Mortality by Raptor Species
Raptor Species Fatalities
%
Composition
American kestrel 80 38.3
red-tailed hawk 57 27.3
burrowing owl 13 6.2
short-eared owl 10 4.8
Swainson's hawk 8 3.8
barn owl 5 2.4
golden eagle 5 2.4
sharp-shinned hawk 5 2.4
ferruginous hawk 4 1.9
northern harrier 3 1.4
unidentified buteo 3 1.4
white-tailed kite 3 1.4
barred owl 2 1.0
broad-winged hawk 2 1.0
Cooper's hawk 2 1.0
long-eared owl 2 1.0
merlin 2 1.0
prairie falcon 1 0.5
rough-legged hawk 1 0.5
unidentified accipiter 1 0.5
Other Raptor Species 22 10.5
Overall 209 100
38.3
27.3
6.2
4.8
3.8
2.4
2.4
2.4
1.9
10.5
American kestrel
red-tailed hawk
burrowing owl
short-eared owl
Swainson's hawk
barn owl
golden eagle
sharp-shinned hawk
ferruginous hawk
Other raptor species
Bat Mortality
~7/MW/yr
Page 160
Mortality by Bat Species
44.3
23.4
10.3
8.1
4.2
3.7 2.9 2.5
0.7 hoary bat
silver-haired bat
eastern red bat
little brown bat
tricolored bat
big brown bat
Mexican free-tailed
bat
unidentified bat
Other Bat Species
Species Fatalities
%
Composition
hoary bat 2,261 44.3
silver-haired bat 1,195 23.4
eastern red bat 527 10.3
little brown bat 414 8.1
tricolored bat 216 4.2
big brown bat 187 3.7
Mexican free-
tailed bat 146 2.9
northern long-
eared bat 4 0.1
western red bat 4 0.1
long-legged bat 1 0.0
Overall 5,108 100
Bat Mortality Timing
• Results may be limited by search effort; many studies focus
primarily on spring and fall seasons.
• Date of mortality not presented in all studies, so fewer
casualties included in timing figures than overall results.
0
200
400
600
800
1,000
1,200
1,400
# of Bat FatalitiesMonth
Bats
Basic Fatality Monitoring Objectives
and Precision
•Estimate
mortality with
reasonable
precision and
accuracy
•Is there a
fatality
problem?
•“4 vs. 40”
STATE GUIDELINES
Collision Risk Modeling
•Approach necessary in situations
with little empirical data on
collision risk
•Sophisticated computer simulation
to address collision risk potential
•Used for northwest coastal species
and others (e.g. marbled murrelet,
whooping crane)
•Assumptions regarding
avoidance/attraction critical
–Literature is expanding on empirical
estimates of avoidance/attraction
120 Degrees L
Velocity = v
Stick Bird
w deg/sec
Model Summary
• Individual-based
• Incorporates details for
– Birds
– Wind turbines
– Wind park
– On-site wind conditions
• Potential collisions with all
structures
• Temporal variability and
spatial variability for wind
conditions, bird flight etc.
• Output: collision probability
estimates
Example
•75 MW turbine project
•Single linear string
•1400 passes of a species
•10% in risk zone
•75% avoidance – literature
suggests higher
Page 162
Example Results
Small Medium Large0
0.2
0.4
0.6
0.8
1
Turbine SizePredicted Annual Fatalities
No curtailment
Lowest level curtailment
Moderate level curtailment
Low level curtailment
Highest level curtailment
Raptor Nesting Impacts and Risks
•Heightened concern over longer
term impacts on nesting raptors
•Little empirical data on the
potential longer-term impacts
–Recent Wyoming study – 15 yrs
after projects built
•Wildlife Agencies have
recommended increasingly larger
buffers from turbines to nests
•No supporting data, but also
limited data that provides “safe
distances”
Measures of Turbine Exposure on Nests
Of available
directions (360
degrees) for flight
from the nest,
11.8% are
occupied by
turbines within 1
mile
0.6% of 2-d area
within 1 mile of
nest occupied by
turbines
Percent of flight
space in rotor-swept
zone actually
occupied by turbines
within 1 mile = 0.02%
Page 163
Conclusions
• More information available for predicting
impacts and risk and in evaluating fatality
monitoring study designs
• Sophisticated models available for
predicting risk of collision from rare or
unstudied species
• Nesting impact assessment lacking
longer term empirical data for
understanding impacts, but metrics like
measures of “exposure” may be useful
• MORE DATA IS GOOD
• “The guesses which served
to give mental unity and
wholeness to a chaos of
scattered particulars, are
accidents which rarely occur
to any minds but those
abounding in knowledge and
disciplined in intellectual
combinations”
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Renewable Energy Fund
Grant Application Round IV
AEA11-005 Grant Application
APPENDIX V: WIND AND PROPERTY VALUES REPORT
Page 165
1Energy Markets and Policy Group • Energy Analysis Department
4Energy Markets and Policy Group • Energy Analysis Department
7Energy Markets and Policy Group • Energy Analysis Department
10Energy Markets and Policy Group • Energy Analysis Department
13Energy Markets and Policy Group • Energy Analysis Department
16Energy Markets and Policy Group • Energy Analysis Department
19Energy Markets and Policy Group • Energy Analysis Department
Renewable Energy Fund
Grant Application Round IV
AEA11-005 Grant Application