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HomeMy WebLinkAboutKwethluk Wind Rnd IV FINAL Renewable Energy Fund Round IV Grant Application AEA 11-005 Application Page 1 of 18 7/21/2010 Application Forms and Instructions The following forms and instructions are provided to assist you in preparing your application for a Renewable Energy Fund Grant. An electronic version of the Request for Applications (RFA) and the forms are available online at: http://www.akenergyauthority.org/RE_Fund-IV.html Grant Application Form GrantApp4.doc Application form in MS Word that includes an outline of information required to submit a complete application. Applicants should use the form to assure all information is provided and attach additional information as required. Application Cost Worksheet Costworksheet4.doc Summary of Cost information that should be addressed by applicants in preparing their application. Grant Budget Form GrantBudget4.doc A detailed grant budget that includes a breakdown of costs by milestone and a summary of funds available and requested to complete the work for which funds are being requested. Grant Budget Form Instructions GrantBudgetInstructions4.pdf Instructions for completing the above grant budget form.  If you are applying for grants for more than one project, provide separate application forms for each project.  Multiple phases for the same project may be submitted as one application.  If you are applying for grant funding for more than one phase of a project, provide milestones and grant budget for completion of each phase.  If some work has already been completed on your project and you are requesting funding for an advanced phase, submit information sufficient to demonstrate that the preceding phases are satisfied and funding for an advanced phase is warranted.  If you have additional information or reports you would like the Authority to consider in reviewing your application, either provide an electronic version of the document with your submission or reference a web link where it can be downloaded or reviewed. REMINDER:  Alaska Energy Authority is subject to the Public Records Act AS 40.25, and materials submitted to the Authority may be subject to disclosure requirements under the act if no statutory exemptions apply.  All applications received will be posted on the Authority web site after final recommendations are made to the legislature.  In accordance with 3 AAC 107.630 (b) Applicants may request trade secrets or proprietary company data be kept confidential subject to review and approval by the Authority. If you want information is to be kept confidential the applicant must: o Request the information be kept confidential. o Clearly identify the information that is the trade secret or proprietary in their application. o Receive concurrence from the Authority that the information will be kept confidential. If the Authority determines it is not confidential it will be treated as a public record in accordance with AS 40.25 or returned to the applicant upon request. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 2 of 18 7/21/2010 SECTION 1 – APPLICANT INFORMATION Name (Name of utility, IPP, or government entity submitting proposal) Organized Village of Kwethluk Type of Entity: Federally Recognized Tribe Mailing Address P.O. Box 130 Kwethluk, AK 99621 Physical Address Airport Road Kwethluk, AK 99621 Telephone 907-757-6714/6715 Fax 907-757-6328 Email kwtira@unicom-alaska.com (Please contact via Fax or Phone due to poor internet connectivity) 1.1 APPLICANT POINT OF CONTACT / GRANTS MANAGER Name Max Angellan Title Tribal Administrator Mailing Address P.O. Box 130 Kwethluk, AK 99621 Telephone 907-757-6714/6715 Fax 907-757-6328 Email kwtira@unicom-alaska.com (Please contact via Fax or Phone due to poor internet connectivity) 1.2 APPLICANT MINIMUM REQUIREMENTS Please check as appropriate. If you do not to meet the minimum applicant requirements, your application will be rejected. 1.2.1 As an Applicant, we are: (put an X in the appropriate box) An electric utility holding a certificate of public convenience and necessity under AS 42.05, or An independent power producer in accordance with 3 AAC 107.695 (a) (1), or A local government, or X A governmental entity (which includes tribal councils and housing authorities); Yes 1.2.2. Attached to this application is formal approval and endorsement for its project by its board of directors, executive management, or other governing authority. If the applicant is a collaborative grouping, a formal approval from each participant‘s governing authority is necessary. (Indicate Yes or No in the box ) Yes 1.2.3. As an applicant, we have administrative and financial management systems and follow procurement standards that comply with the standards set forth in the grant agreement. Yes 1.2.4. If awarded the grant, we can comply with all terms and conditions of the attached grant form. (Any exceptions should be clearly noted and submitted with the application.) Yes 1.2.5 We intend to own and operate any project that may be constructed with grant funds for the benefit of the general public. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 3 of 18 7/21/2010 SECTION 2 – PROJECT SUMMARY This is intended to be no more than a 1-2 page overview of your project. 2.1 Project Title – (Provide a 4 to 5 word title for your project) Kwethluk Wind Feasibility Analysis, Resources Assessment, and Conceptual Design 2.2 Project Location – Include the physical location of your project and name(s) of the community or communities that will benefit from your project. The proposed project will take place in Kwethluk, Alaska (pop 764), a small, remote community located on the eastern side of the Yukon-Kuskokwim Delta. The community is located on the south bank of the Kwethluk River near its junction with the Kuskokwim River. Kwethluk is about 384 air miles west of Anchorage and 16 air miles east of Bethel (the regional hub community for the Yukon-Kuskokwim Delta). 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 X Feasibility Construction and Commissioning X Conceptual Design 2.4 PROJECT DESCRIPTION Provide a brief one paragraph description of your proposed project. Organized Village of Kwethluk (OVK) requests funding for a an AEA Round IV Phase II Feasibility Analysis to further assess technical, economic, financial, and operational viability of a wind system for Kwethluk and to narrow the focus of final design and construction of such a system. During this project, we will install a wind meteorological (met) tower to solidify the options of installing wind towers in Kwethluk. The work will involve obtaining a letter of non-objection for placement of the wind tower, permitting, transporting and installing a met tower at this location, and studying the wind resource for one year. A conceptual design for a wind farm will be created based on the outcome of the met tower recordings. At the time of this application, a small Skystream wind turbine is being installed in Kwethluk as a result of a Department of Energy EECBG grant. The turbine is being set up next to the health clinic to supplement the energy needs of the clinic and to provide an educational pilot project for the community about alternative energy options. The turbine is expected to generate at least 500-600kwH per month, which is roughly one third of the existing monthly electricity demand for the clinic. This represents a substantial energy cost savings that will be liberated for other vital community facilities and services. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 4 of 18 7/21/2010 Other research and studies have been done by outside agencies over the past several years for Kwethluk and our neighboring region; these studies have identified the existing energy systems for the community, the potential energy market and energy costs, and have encouraged continuing with wind studies for Kwethluk. Our local agencies, businesses, and individual community members have participated in the following studies to make efforts towards addressing our community‘s ever-increasing energy issues: 1. AEA Community Information Survey (Kwethluk) 2. AVCP Calista Region Biennial Energy Plan 2008-2010 (Calista Corporation/ AVCP/ AVCPRHA/YKHC/AVEC/Chaninik Wind Group/MKEC/Kwethluk Power/ Yukon Delta Fisheries Development Association 3. Lower Kuskokwim Economic Development Council Comprehensive Economic Development Strategy & Area Plan (June 2006) 4. AEA Rural Village Transmission Screening Study 2009 5. FY 2009 Statistical Report of the Power Cost Equalization Program; (March 2010) The Organized Village of Kwethluk (OVK) has always practiced a traditional Alaskan subsistence lifestyle and continues to do so today. This comprehensive and holistic lifestyle includes a great respect for the environment that sustains us. Our strong environmental ethic is now more important than ever, as remote Alaskan villages like Kwethluk continue to experience escalating energy costs. In our village, heating oil and gas now cost $8 a gallon. We simply cannot afford to delay our quest for more efficient and economical alternative energy sources that are environmentally sound. Therefore, the Organized Village of Kwethluk, as the federally recognized Tribal entity in the community, has passed a resolution (attached) supporting the AEA-funded efforts described below, as part of OVK's commitment to reducing energy consumption and costs and improving the local economy. OVK‘s long range goals are to: 1) Protect and optimize the Tribe‘s natural resources and environment, including preservation of our Traditional Alaskan subsistence lifestyle; 2) Decrease consumption of non-renewable materials and goods; 3) Encourage, implement, and manage sustainable practices throughout the community at home, at work, and at play; and 4) : Establish and maintain sustainable Tribal infrastructure and community facilities This project supports these goals by utilizing the available AEA funds to conduct the wind feasibility analysis, resources assessment, and conceptual design for a wind energy system in our community. The proposed program will be supplemented with Tribal resources. Federal and State partners will be requested to provide additional support once the project is implemented. One of the key elements of success of the Project will be the further development of local capability to provide energy efficiency and conservation services, thus reducing dependence on outside influences and preserving our Tribal sovereignty. 2.5 PROJECT BENEFIT Briefly discuss the financial and public benefits that will result from this project, (such as reduced fuel costs, lower energy costs, etc.) The proposed project will provide the information that OVK requires to carry out the next steps of a wind turbine project for the community. Based on research done by AEA, Kwethluk‘s wind power potential is similar to surrounding communities (Class 4) with existing wind power. The proposed feasibility analysis will lead to our village being able to operate and own a sustainable, green, and supplementary power system to offset the high costs of energy. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 5 of 18 7/21/2010 The cost of traditional fossil fuel-generated power is generally 3-4 times higher for rural communities such as Kwethluk. Anticipated benefits of installation of the wind turbines would be reducing the negative impact of the cost of energy by providing a renewable energy alternative. The primary financial benefit from this project would be reduced fuel costs to the people of Kwethluk, and the local community will gain the most benefit. If the conditions are suitable and wind turbines are installed, residents would benefit economically from reduced power costs. A key component of this project is increasing awareness for residents of Kwethluk for a greater understanding of how important it is to reduce energy consumption and consider alternatives. This will ensure that the community has been offered direct involvement in all aspects of this project. This approach will be beneficial to Kwethluk , surrounding communities, and the environment that sustains our Traditional lifestyle. Other Benefits to the Alaskan Public: The project will support vital community resources by reducing petroleum use and emissions while increasing energy efficiency. It will also reduce costs, improve the local economy by creating jobs, and build local capacity by informing residents on renewable energy practices. Due to the high cost of fuel, Kwethluk qualifies for the Power Cost Equalization program, so adding wind power will ultimately lessen the burden on this program and the State of Alaska. Additionally, the State of Alaska may gain cumulative beneficial impacts through the economic effects of the study and the information obtained from it. 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 total project cost is $161,000. The total AEA request is $145,000 Wind Feasibility Analysis (Contractor) $130,000 Funding is needed for a 14 month project to perform the feasibility analysis to identify the community‘s energy load, develop a community energy audit and protocol, and identify potential wind energy systems. The feasibility analysis will also examine and compare the suitability of various sites and systems and the conceptual design will estimate costs for a potential wind farm. .25 FTE Project Manager (To be hired) $15,000 The Project Manager will oversee the project and t work closely with the contractor for scheduling, reporting, and work done in the Village. This local position will enable OVK to build capacity for continued phases of the project utilizing local knowledge and will build a more sustainable approach to the long term plan. Other contributions to the project: 1. OVK Cash and In-Kind: $16,000. 2. EECBG Federal Grant: $59,400 The project is being implemented as a ―pilot project‖ to install a small SkyStream wind turbine to offset the costs of fuel used to operate our community health clinic. Training is underway to teach local staff to monitor and record energy savings, and to increase awareness in the community about renewable energy options. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 6 of 18 7/21/2010 2.7 COST AND BENEFIT SUMMARY Include a summary of grant request and your project’s total costs and benefits below. Grant Costs (Summary of funds requested) 2.7.1 Grant Funds Requested in this application. $145,000 2.7.2 Other Funds to be provided (Project match) $16,000 2.7.3 Total Grant Costs (sum of 2.7.1 and 2.7.2) $161,000 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) $1,466,813 (AEA est) 2.7.5 Estimated Direct Financial Benefit (Savings) $1,638,000 (AEA est) For electric 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.) $ N/A 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 will be managed by OVK's Administrative Office, which will track all AEA -funded project measurements and results. The OVK Administrative Office is responsible for developing sustainability programs and practices within Tribal departments, employees, and the community and has a long history of successful management of Federal, State and Tribal resources. The Tribal Administrator, along with the guidance of the Tribal Council will also hire a local .25 FTE Project Manager who will assist with coordination of project activities with the project contractor, seek additional financial resources for future project development, and conduct open community meetings. The hiring process will comply with OVK‘s policies and procedures for hiring qualified individuals. A Request for Proposals (RFP) will be published for the selection of a contractor to conduct the feasibility analysis, resources assessment, conceptual design. The contractor will also prepare progress and technical reports with the assistance of the Program Manager and Tribal Administrator, who will submit the reports to AEA as required. The Tribal Administrator will work with the Tribe‘s Environmental Department and Tribal Council to review project progress and provide advice throughout the project. The Tribal Administrator, Max Angellan will be responsible for the Project implementation and will provide progress reports to the Tribal Council and to AEA. Max Angellan has worked as the Tribal Administrator since September 14, 2009 for the Organized Village of Kwethluk, Kwethluk IRA Council. At no additional compensation, he will oversee the AEA Project, and supervise the Project Manager to ensure that grant requirements are met. Mr. Angellan has been with OVK for more than 20 years in various positions. Currently, he is also the Housing Director for the Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 7 of 18 7/21/2010 Kwethluk Tribal Resident Council, Inc., a local housing entity under OVK and has held this position since February of 1998. In addition, he currently supervises OVK‘s COPS Programs, Tribal Energy Program, EPA Indian General Assistance Program, Child Care Assistance Program, and management of OVK‘s BIA PL-638 funds. His many years of experience with federal and local programs will be a valuable asset to the project, as he has spent his life in the community and is well known and respected for his professional abilities. He is an excellent communicator within the community as a fluent Yupik speaker. 3.2 Project Schedule Include a schedule for the proposed work that will be funded by this grant. (You may include a chart or table attachment with a summary of dates below.) The Project is expected to take 14 months to complete. Once the grant has been awarded, (est. August, 2011) OVK will issue a job posting for the Project Manager and a RFP for the contractor. We expect to issue the RFP by September 2011, depending on grant award date. We will give contractors one month for a response and will select an appropriate contractor according to our procurement policies. The wind feasibility analysis will begin soon thereafter; we expect that the contractor will need two months to conduct site visits, gather community information, and conduct the resources assessment. The report will be expected three months after field work has been completed. We expect that the feasibility analysis will be completed within six months of issuing the RFP, tentatively, April, 2012. The conceptual design will be created based on the outcome of the met tower recordings investigation; we anticipate that this will be completed by June, 2012. Start Date End Date Activity 08/11 09/11 Award notification; Project scoping; Job posting for Project Manager; hiring process 09/11 10/11 RFP for contractor; solicitation and selection process 10/11 02/11 Detailed energy resource analysis 10/11 04/12 Identification of land and regulatory issues 11/11 08/12 Permitting and environmental analysis 02/12 06/12 Detailed analysis of existing and future energy costs and markets 09/12 11/12 Conceptual design and cost estimate 09/12 12/12 Detailed economic and financial analysis 09/12 12/12 Conceptual business and operations plans 10/12 12/12 Final reports and recommendations 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. Project scoping and contractor solicitation completed (August 1- September 30, 2011) OVK will hire a Project Manager select a contractor for the wind feasibility, resource analysis, and conceptual design immediately following AEA‘s authorization to proceed. 2. Detailed resource assessment completed (October 1- December 31, 2011) To initiate the Wind Resource Analysis before winter, the contractor will ship and erect the met tower in October 2011. OVK will immediately seek approvals from permitting agencies, starting the process before the grant is awarded to ensure that the met tower can be installed in the late fall. The earlier the met tower is collecting data, the earlier OVK will have the wind resource data to ascertain the suitability of use this renewable resource. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 8 of 18 7/21/2010 The Contractor will assist in the analysis of resource data and determinations for fuel supply to various key sites within the community. The analysis will compare fuels by delivered cost, quantity, quality, availability, and reliability. After all data is received, an energy-efficiency analysis of the entire community will be performed. This will determine whether energy efficiency improvements need to be performed before any wind systems are installed. Energy- saving approaches will be discussed with the local stakeholders. Technology and techniques for the most beneficial energy-saving measures will also be determined. 3. Land use, permitting and environmental analysis completed (November 1, 2011- January 31, 2012) OVK and the contractor will conduct site control discussions with the land owners and detail site control needs in a memorandum. The most promising option for the location of a wind farm will be determined. The specific matching of resources and energy loads will provide the best economic fit. The site selection will be based on wind resource data. OVK and its contractor will discuss the project with regulatory agencies to determine permitting requirements. Need permits and any studies (i.e. bird studies) will be documented in a memorandum. An engineering economic feasibility analysis will be completed. The environmental permitting aspect of the project will be completed under this task, as pollution control will have a significant effect on the economics. The analysis will be based on savings from current fossil fuel and electricity costs. Forecasts for future costs will be based on escalation rates provided by suppliers. The analysis will include estimates for labor, operation, and maintenance. The analysis will be presented as a yearly cash flow, with applicable financing. Savings will be used to pay back the financing costs. 4. Detailed analysis of current cost of energy and future market completed (February 1-March 30, 2012) Information collection will entail collecting all the required information for the study including vendor contacting, energy sources, energy costs, etc. It is expected that the Contractor will need at least a three-year energy bill history and, if possible, previous energy audits, architectural drawings and detailed lighting diagrams for local buildings. Site visits will be conducted, as well as requests for data and participation in the data-collecting process. Measurements will also be conducted to collect non-existing data on the buildings and other energy consumption devices. OVK will draft a memorandum documenting the existing and future energy costs and markets in Kwethluk. The information will be based on OVK records and community plans. A community meeting will be held to determine future energy markets. 5. Conceptual design and cost analysis completed (October 1-December 31, 2012) The met tower would be dismantled and the Draft Wind Resource Report would be finalized by incorporating the last 3 months of data. A conceptual design and cost estimate will be prepared for the preferred alternative. 6. Detailed economic and financial analysis completed (September 1-October 31, 2012) An economic and financial analysis which examines potential final design and construction costs, operating and maintenance costs, user rates, and other funding mechanisms will be developed. 7. Conceptual business and operations plans completed (April 1-June 30, 2012) Draft business and operational plans will be developed working with the City of Kwethluk and the Kwethluk Tribal Corporation. Final analysis will be completed for a site that presents the most obvious economic opportunity. Once the site has been selected, the various wind systems will be examined. Capital costs, installed costs, and delivery times will be roughly estimated. Conceptual designs will be evaluated. Contact with the local utility will be made to identify any incentives for distributed generation. Best-case and worst-case conceptual designs will be presented. The best-case design will focus on a high rate of return; the worst-case design will focus on other criteria beneficial to the community while achieving a lower rate of return. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 9 of 18 7/21/2010 8. Final report and recommendations (December 31, 2012) A draft wind resource report will be written using the first 3 quarters of collected met tower data. A draft Alternatives Assessment Memorandum will be drafted detailing the reasonable alternatives and the preferred alternative using the wind data. It is expected that alternatives will vary in number and size of wind turbines and their configuration. A final Alternatives Assessment will incorporate the last three months of the wind monitoring findings and will specify the alternative to bring forward to conceptual design. All of the memoranda and reports written for the project will be combined in a final report and submitted to AEA. The Final Report will include final drafts of the following: • Land and Regulatory Issues Memorandum • Environmental and Permitting Memorandum • Existing and Future Energy Costs and Markets Memorandum • Conceptual Business Plan • Conceptual Operating Plan • Wind Resource Report • Alternatives Assessment • Economic and Financial Analysis • Conceptual Design Analysis and Cost Estimate • 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. The Project will be managed by OVK's Administrative Office, which will track all AEA-funded project measurements and results and provide accounting services for the grant. The OVK Administrative Office is responsible for developing sustainability programs and practices within Tribal departments, employees, and the community and has a successful history of management of Federal, State and Tribal resources. The Tribal Administrator will be responsible for the Project implementation and will provide reports to the Tribal Council and to AEA as required. The Tribal Administrator will work with the Tribe‘s Environmental Department and Tribal Council to review project progress and provide advice during implementation. The Administrator will also hire a local Project Manager who will assist with coordination of project activities with the local contractor, seek additional financial resources for future project development, conduct open community meetings and will report to AEA as required. The Organized Village of Kwethluk has a long history of effective collaboration with the City, School District, and other entities in our community on mutually beneficial projects. Once funds are awarded, OVK will also attempt to partner with other Federal and State programs to leverage future funding for the completed project. This will ensure that the project is continued and has outcomes far beyond the AEA project. Selection Process for Contractors: The engineering and environmental contractor selection will be based upon technical competencies, past performance, written proposal quality, cost, and general consensus from the OVK Tribal Council and Tribal Administrator. The selection of the consultant will occur in strict conformity with our procurement policies, and will be advertised once a grant agreement is in place. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 10 of 18 7/21/2010 3.5 Project Communications Discuss how you plan to monitor the project and keep the Authority informed of the status. OVK will hire a Project Manager who will work with the contractor to develop periodic progress reports for submission the Tribal Council. These reports will be included with the contractors reports for submission to AEA. Weekly and monthly project coordination meetings will be held with the Tribal Administrator to track progress and expenses and address issues as they arise. The Tribal Administrator will be responsible for supervising and working with the Project Manager for scheduling activities with the community, the contractor, and other local agencies. OVK‘s accounting manager will maintain financial records for the project and provide reports as required. The Tribal Administrator will also provide reports to the Tribal Council and ensure that the reports are submitted to AEA as required. The Tribal Administrator is a key liaison for the community as he is an excellent communicator as a fluent Yupik speaker. 3.6 Project Risk Discuss potential problems and how you would address them. There is the risk that the wind study will show that the cost-benefit ratio for Kwethluk is not more then 1.0. By following the approved AEA phases, and awarded funding in increments is based on milestones, OVK reduces the risk of overinvesting if the wind study should prove that the wind resource is not sufficient to warrant further phases. However, all preliminary data and research suggest that Kwethluk is a good candidate for a wind supplemented power utility. Site Control/Access and Permitting. It is expected that the community will support erection of the met tower. Consultation with the Department of Transportation will be conducted to discuss the options for utilizing the old air strip in the community as a possible site for the constructing the wind turbine system (this site is scheduled for transfer to the City of Kwethluk in January of 2011); other sites within the community will also be considered and discussed with the City of Kwethluk as well. Consultation with the U.S. Fish and Wildlife Service will be conducted to comply with the Endangered Species Act. OVK will work openly with the agency and conduct studies as appropriate. Weather. Weather could delay field work; however, an experienced consultant, familiar with Alaskan weather conditions, will be selected. It is unlikely that a delay in the total project schedule would occur if the field work is delayed. The met tower will be installed to handle the Kwethluk winter weather conditions. The met tower will be monitored to ensure the met tower is up and functioning. Logistics. Transport of the met tower to Kwethluk will not be difficult, since there is a reliable air transport available to the community. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 11 of 18 7/21/2010 SECTION 4 – PROJECT DESCRIPTION AND TASKS  Tell us what the project is and how you will meet the requirements outlined in Section 2 of the RFA.  The level of information will vary according to phase(s) of the project you propose to undertake with grant funds.  If you are applying for grant funding for more than one phase of a project provide a plan and grant budget form for completion of each phase.  If some work has already been completed on your project and you are requesting funding for an advanced phase, submit information sufficient to demonstrate that the preceding phases are satisfied and funding for an advanced phase is warranted. 4.1 Proposed Energy Resource Describe the potential extent/amount of the energy resource that is available. Discuss the pros and cons of your proposed energy resource vs. other alternatives that may be available for the market to be served by your project. Kwethluk is strongly influenced by storms and patterns in the Bering Sea and also by inland continental weather. Kwethluk's precipitation averages 16 inches, with snowfall of 50 inches. Summer temperatures average from 42 to 62 °F; winter averages are -2 to 19 °F. Extremes have been recorded from -46 to 86 °F. The Kuskokwim is typically ice-free from June through October. According to the AEA Wind Resource of Alaska map, Kwethluk is rated as a class 4 wind regime. The Alaska Energy Plan says ―Due to the high cost of diesel-fired electrical generation in rural Alaska, wind turbines may be economical in some rural Alaskan communities with a wind power class of 3 or above‖. Kwethluk‘s location is 12 miles east of Bethel. This project will conduct a more focused assessment of the community‘s available energy resource following industry standards based on field measurements, discussions with local owners, and other activities within the community. The installed meteorological tower will provide wind energy data at various turbine locations. 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. Existing systems in Kwethluk are typical to bush Alaska. Diesel-fired generators with soon-to-be more expensive (Ultra Low Sulfur) Diesel fuel. Current estimate of increase is $.48/gallon additional cost. Current usage -107,188 gallons diesel/yr Current generation – 1,414,800 kWh/yr Load peak –approx 300kW 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. In our community, heating oil and unleaded gasoline now cost $8 a gallon and electricity is currently 52 cents kilowatt-hour, and is steadily rising. High-energy costs are an important piece of the myriad of challenges we are struggling with to resolve to maintain our Traditional lifestyle. We simply cannot afford to delay our quest for more efficient, affordable, and environmentally sound renewable energy sources. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 12 of 18 7/21/2010 4.2.3 Existing Energy Market Discuss existing energy use and its market. Discuss impacts your project may have on energy customers. Existing energy use is typical to small Bush Communities. Primarily residential with some commercial and institutional use, all users are vulnerable to escalating fuel costs and resulting power costs. Renewable energy deployment is likely the only method where the existing energy ―market‖ remains viable. Continued fossil fuel cost escalation is not simply not tolerable. 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 OVK will use the wind feasibility analysis to determine the appropriate system and system design. Recommended alternatives including discussions of impacts on the existing system will be implemented. Potential project sites will be considered and discussed with the entire community and an annual energy production profile will be developed. The conceptual system design will be developed, along with identification of technical barriers to the successful completion of the project. 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 project team will conduct an assessment of site control requirements for the wind turbine farm and take steps to ensure authorization is gained from land owners for onsite feasibility activities. The Met tower will be erected on the potential wind turbine site as determined by the initial phases of this study. Land use discussions will take place for the use of the DOT abandoned airstrip and for other potential sites in the community that are at a higher elevation, out of FAA range, and on good solid ground above the flood plain. At this time, there are no access issues. 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 project team will obtain authorizations from all applicable agencies for any use of land or resources for feasibility activities. In addition, a permitting plan will be addressed as a result of the study. OVK will follow the analysis as it progresses so that any permitting issues can be pursued in an timely manner, and in order not to delay further progress on the project. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 13 of 18 7/21/2010 4.3.4 Environmental Address whether the following environmental and land use issues apply, and if so how they will be addressed:  Threatened or Endangered species  Habitat issues  Wetlands and other protected areas  Archaeological and historical resources  Land development constraints  Telecommunications interference  Aviation considerations  Visual, aesthetics impacts  Identify and discuss other potential barriers A site-specific assessment of the above listed resources will be conducted and a plan will be developed for addressing potential environmental impacts. OVK is aware that wind turbines can be an endangerment to migratory birds, and may require extensive and often expensive studies. The project budget includes funding for environmental consulting. OVK will use the Best Management Practices described by the ―Guidelines for Building and Operating Wind Energy Facilities in Alaska‖ when they choose the final site for the study. 4.4 Proposed New System Costs and Projected Revenues (Total Estimated Costs and Projected Revenues) The level of cost information provided will vary according to the phase of funding requested and any previous work the applicant may have done on the project. Applicants must reference the source of their cost data. For example: Applicants Records or Analysis, Industry Standards, Consultant or Manufacturer‘s estimates. 4.4.1 Project Development Cost Provide detailed project cost information based on your current knowledge and understanding of the project. Cost information should include the following:  Total anticipated project cost, and cost for this phase  Requested grant funding  Applicant matching funds – loans, capital contributions, in-kind  Identification of other funding sources  Projected capital cost of proposed renewable energy system  Projected development cost of proposed renewable energy system Conceptual level cost estimates for final design and construction will take form as the study progresses, but the wind feasibility analysis will need to be completed before cost and revenues can be fully developed. In addition, the study will consider more current O&M and fuel costs, along with other costs such as insurance and financing that will be needed to fully develop the project. For now, OVK is using the AEA Energy Model Community preliminary study estimate for construction of a wind farm capital costs at Kwethluk to be $1,466,813. Overall annual savings are predicted at $81,900. This Phase II study will cost $161,000. Detailed project development costs will be developed by the contractor as a result of the feasibility study. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 14 of 18 7/21/2010 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.) AEA estimated the O & M costs for a Wind—Diesel system in Kwethluk were $31,868 in 2008. A more accurate estimate of Wind-Diesel O & M costs will be developed during this study of the project. 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 The wind feasibility analysis will identify power / purchase sale information accurately. The power buyers consist of 147 homes and 5 community facilities. 4.4.4 Project Cost Worksheet Complete the cost worksheet form which provides summary information that will be considered in evaluating the project. Download the form, complete it, and submit it as an attachment. Document any conditions or sources your numbers are based on here. The project cost worksheet is attached. SECTION 5– PROJECT BENEFIT Explain the economic and public benefits of your project. Include direct cost savings, and how the people of Alaska will benefit from the project. The benefits information should include the following:  Potential annual fuel displacement (gal and $) over the lifetime of the evaluated renewable energy project  Anticipated annual revenue (based on i.e. a Proposed Power Purchase Agreement price, RCA tariff, or cost based rate)  Potential additional annual incentives (i.e. tax credits)  Potential additional annual revenue streams (i.e. green tag sales or other renewable energy subsidies or programs that might be available)  Discuss the non-economic public benefits to Alaskans over the lifetime of the project The cost of power is generally 3-4 times higher for rural communities such as Kwethluk. Anticipated benefits of installation of the wind turbines would be reducing the negative impact of the cost of energy by providing a renewable energy alternative. The primary financial benefit from this project would be reduced fuel costs to the people of Kwethluk, and the local community will gain the most benefit. If the conditions are suitable and wind turbines are installed, residents would benefit economically from reduced power costs. A key component of this project is increasing awareness for residents of Kwethluk for a greater understanding of how important it is to reduce energy consumption and consider alternatives. This will ensure that the community has been offered direct involvement in all aspects of this project. This approach will be beneficial to Kwethluk, surrounding communities, and the Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 15 of 18 7/21/2010 environment that sustains our Traditional lifestyle. The proposed project will provide the information that OVK requires to carry out the next steps of a wind turbine project for the community. Based on research done by AEA, Kwethluk‘s wind power potential is similar to surrounding communities (Class 4) with existing wind power. The proposed feasibility analysis will lead to our village being able to operate and own a sustainable, green, and supplementary power system to offset the high costs of energy. On a non-economic level the people of Kwethluk have collectively decided they want to become less dependent on the variable price of diesel fuel, lessen the Environmental risks of transport up their River and on site storage hazards by requiring less diesel fuel to power their community. The logistics of getting fuel to Kwethluk by barge and the large amounts needed d uring the long, cold winters is not only a cost issue, but also an environmental issue. This project could dramatically decrease Kwethluk‘s carbon footprint by including wind power in their energy plan. Environmental benefits could also result from a reduction of hydrocarbon use, including: • Reduced potential for fuel spills or contamination during transport, storage, or use (thus protecting our vital water and subsistence food sources) • Improved air quality • Decreased contribution to climate change from fossil fuel use • Decreased river erosion due to climate change Due to the high cost of fuel, Kwethluk qualifies for the Power Cost Equalization program, so adding wind power will ultimately lessen the burden on this program and the State of Alaska. Additionally, the State of Alaska may gain cumulative beneficial impacts through the economic effects of the study and the information obtained from it. 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 Kwethluk Power (KP) currently operates the power plant and electrical distribution system in Kwethluk. KP will incorporate an O & M surcharge into its rate structure to recoup the costs of operating and maintaining the renewable energy infrastructure. Actual O & M costs will be determined once specifications are developed for the wind turbines to be installed as a result of this study. There will be a learning curve in operating the proposed wind-diesel system. Adequate training and support will be budgeted during additional phases. Selection of the wind turbine system will take into account surrounding communities systems already in existence. This will positively contribute to the wind market penetration to support trained personnel. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 16 of 18 7/21/2010 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. At the time of this submission, Kwethluk is in the process of installing its first wind turbine into the community as part of an innovative energy distribution system through an EECBG grant. Last year, OVK applied to the Department of Energy for a Kwethluk Energy Efficient Grant Project (EECBG) and was awarded $59,400 in September 2009. The intent of the project, now underway, is to take our first steps towards development of a wind energy distribution system in Kwethluk. The project consists of installation of one Sky Stream wind turbine with a ‗new to Alaska‘ innovative method of anchoring the system to tundra. The EECBG project is being implemented as a ―pilot project‖ to offset the costs of fuel used to operate our community health clinic. Training is underway this fall (2010) to teach local staff to monitor and record energy savings, and to increase awareness in the the community about renewable energy options. The initial ‗first wind turbine‘ project is linked to OVK's goal of establishing sustainable community facilities, and with the goal of decreasing consumption of non-renewable resources. The turbine is being installed on Tribal/Government property adjacent to the Betty A. Guy Memorial Clinic. These first steps will provide additional information and data for this AEA request – a Feasibility Analysis Phase II project – that will hopefully result in a permanent renewable commercial wind farm on our closed airport runway. The energy costs avoided or offset by use of renewable wind resources will free up funds for use elsewhere within the community operations budget. The Organized Village of Kwethluk has a long history of successful collaboration with other entities in our community on mutually beneficial projects. For the EECBG project, OVK's partner is the community health clinic, which is affiliated with the Yukon Kuskokwim Health Corporation. OVK is also attempt to partner with Federal and State programs to ensure that the project has sustainable factors and outcomes well beyond the initial funded project. Activities related to the Kwethluk Energy Efficiency Project include: 1. A focus on the utilization of wind technology to supplement the energy needs of our health clinic facility by installing one wind turbine. The turbine is expected to generate at least 500-600kwH per month, which is roughly one third of the existing monthly electricity costs for the clinic. This represents a substantial energy cost savings that will be liberated for other vital community facilities and services. 2. Capacity Development and job creation through training and education regarding renewable energy: the EECBG project consists of training on renewable energy technology, environmentally sound practices at home and work, and the possible development of ―green‖ jobs within the village. Community members have already been involved in some aspects of preparing for the wind turbine installation, and are obtaining knowledge regarding operation and maintenance and installation for future reference as the project expands. Three jobs have been created as a result of the project. The project is consistent with the goal of encouraging sustainable practices throughout the community. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 17 of 18 7/21/2010 SECTION 8– LOCAL SUPORT Discuss what local support or possible opposition there may be regarding your project. Include letters of support from the community that would benefit from this project. OVK has been working for several years in pursuit of integrating wind power into our community. Some challenges have occurred with staff changes that have delayed the process, but there has been no community opposition to the project. The community also supported the DOE EECBG project for the installation of the wind turbine this year. In addition to our OVK Tribal Resolutions, we have attached letters of support from:  Kwethluk Incorporated  City of Kwethluk 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 project cost is $161,000. The total AEA request is $145,000 Funding is needed for a 14 month project to perform the feasibility analysis to identify the community‘s energy load, develop a community energy audit and protocol, and identify potential wind energy systems. The feasibility analysis will also examine and compare the suitability of various sites and systems and the conceptual design will estimate costs for a potential wind farm. Due to Kwethluk‘s remote location, travel, lodging, and shipping of supplies is very expensive; the feasibility study, including the community energy audit is estimated to cost $130,000. Another $15,000 will be needed to hire a part time (.25 FTE) project manager to oversee the project and to work closely with the contractor for scheduling, reporting, and work done in the Village. This local position will enable OVK to build capacity for continued phases of the project utilizing local knowledge and will build a more sustainable approach to the long term plan. Other contributions to the project: 1. OVK Cash and In-Kind: Contributions by OVK include the in-kind costs of project support such as providing administrative oversight at no cost to the project, accounting services, local transportation, meeting space, and office space/technology, which has an estimated value of $16,000. 2. EECBG Federal Grant: Last year, OVK applied to the Department of Energy for a Kwethluk Energy Efficient Grant Project (EECBG) and was awarded $59,400 in September 2009. The intent of the project, now underway, was our first steps towards development of a wind energy distribution system in Kwethluk. The project consists of installation of one Sky Stream wind turbine with a ‗new to Alaska‘ innovative method of anchoring the system to tundra. The project is being implemented as a ―pilot project‖ to offset the costs of fuel used to operate our community health clinic. Training is underway to teach local staff to monitor and record energy savings, and to increase awareness in the community about renewable energy options. The Milestone Budget Form is attached.