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HomeMy WebLinkAboutGulkana Village AEA Grant App Renewable Energy Fund Round IV Grant Application AEA 11-005 Application Page 1 of 20 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 complet e 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 20 7/21/2010 SECTION 1 – APPLICANT INFORMATION Name (Name of utility, IPP, or government entity submitting proposal) Gulkana Village Council Type of Entity: Tribal Government Mailing Address P.O. Box 254 Gakona, AK 99586 Physical Address Mile 127 Richardson Highway Telephone 907-822-3746 Fax 907-822-3976 Email admin@gulkanacouncil.org 1.1 APPLICANT POINT OF CONTACT / GRANTS MANAGER Name Sandra Tsinnie Title Program Coordinator Mailing Address P.O. Box 254 Gakona, AK 99586 Telephone 907-822-3172 Fax 907-822-3976 Email stsinnie@gulkanacouncil.org 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 attache d 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 20 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) Gulkana Village Pellet Fuels Project 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. Gulkana Village is located in the Copper River basin in south-central interior Alaska at mile 127 of the Richardson Highway, 12 miles north of Glennallen, approximately one-half mile east of the Gulkana River bridge. The Village is connected by the Alaska highway system to other villages and “urban” areas of Alaska, situated approximately 200 miles east of Anchorage via the Glenn Highway, and approximately 250 miles south of Fairbanks via the Richardson Highway. The Copper River basin is a large sparsely populated interior drainage basin approximately the size of the state of Ohio, containing approximately 3,000 residents in several small settlements and villages scattered throughout the basin. We have an existing project on a smaller scale which generated orders from all over the Copper River Valley Basin and Valdez to Fairbanks. These communities and areas and all distant areas will benefit in the near future as distribution system is developed. 2.3 PROJECT TYPE Put X in boxes as appropriate 2.3.1 Renewable Resource Type Wind X Biomass or Biofuels Hydro, including run of river Transmission of Renewable Energy Geothermal, including Heat Pumps Small Natural Gas Heat Recovery from existing sources Hydrokinetic Solar Storage of Renewable Other (Describe) 2.3.2 Proposed Grant Funded Phase(s) for this Request (Check all that apply) Reconnaissance X Design and Permitting Feasibility X Construction and Commissioning X Conceptual Design Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 4 of 20 7/21/2010 2.4 PROJECT DESCRIPTION Provide a brief one paragraph description of your proposed project. We are constructing a facility to manufacture wood fuel pellets utilizing local wood and biomass that has no other commercial value and would normally go to waste as feedstock. Our operation will involve harvesting, chipping, and processing the material into wood fuel pellets for residential and commercial markets. The first phase of the project is under construction. We are erecting a 30’ by 40’ metal building for the pellet plant. The first pellet production line will be installed in the building. We will shortly be accepting delivery of the equipment for this first line, which will produce one ton of pellets per hour. Based on the number of inquiries and orders we have already received, we anticipate this will not keep up with demand. We anticipate expanding the operation by installing additional production lines as demand warrants. 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.) Financially, this would be a benefit to the Gulkana Village and surrounding communities by burning wood pellets. Money that would normally go toward fuel oil would be spent on pellets which will greatly reduce fuel cost. This project will serve other rural communities in Alaska for community heating with a renewable resource. It is going to provide a cheap green alternate from fossil fuel dependency. The project will use readily available and abundant biomass from the local area, reducing dependence on expensive fossil fuels that have to be trucked in over great distances. In addition, the project will be the first facility in the Copper River Basin that will produce real jobs, real wealth, and it is anticipated be profitable and self-sustaining utilizing local resources. 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. See Attachment "Budget Narrative & Summary Budget" PROJECT BUDGET Personnel $364,515 Fringe benefits $80,193 Equipment/Machinery $281,500 Travel $16,460 Supplies $6,700 Equipment Rental/Repair/Maint. $100,050 Other $105,582 TOTAL PROJECT BUDGET $955,000 Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 5 of 20 7/21/2010 2.7 COST AND BENEFIT SUMARY Include a summary of grant request and your project’s total costs and benefits below. Grant Costs (Summary of funds requested) 2.7.1 Grant Funds Requested in this application. $955,000 2.7.2 Other Funds to be provided (Project match) $99,000 (funds we've invested) 2.7.3 Total Grant Costs (sum of 2.7.1 and 2.7.2) $955,000 Project Costs & Benefits (Summary of total project costs including work to date and future cost estimates t o get to a fully operational project) 2.7.4 Total Project Cost (Summary from Cost Worksheet including estimates through construction) $1,054,000 2.7.5 Estimated Direct Financial Benefit (Savings) $4.00 for every bag of pellets (estimate) 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.) $ 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. Pellet Project Coordinator: This position will provide direct supervision to Pellet Project and its staff. This individual will also be responsible for completing the day-to-day task of this project as outline in the scope of work and will serve as the point of contact for the tribe. Other staff that will be involved to administer and provide support for the project will be the Tribal Administrator, the Administrative Secretary, and the Tribal Accountant/Admin Assistant. Tribal Administrator: This position is responsible for overall project oversight and supervision. The Tribal Administrator is an existing and currently staffed position. Tribal Accountant/Admin Assistant: This position will provide financial management support for the project, including oversight of accounting and bookkeeping functions as may be necessary. This is an existing and currently staffed position Administrative Secretary: This position will provide administrative and clerical support for the project, including filing, copying, mail, phone, typing, and other services as may be necessary. The Administrative Secretary is an existing and currently staffed position. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 6 of 20 7/21/2010 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.) See Project Schedule (Chart) Attachment "A" 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.) See Milestones on attached Project Schedule (Chart) Attachment "A" Milestone 1: Reconnaissance. This phase is complete, done by Gulkana Village. Milestone 2: Complete the ordering of the equipment to finalize the project. We will finish the electric on the pellet mill and hammer mill that we already have. Order the rest of the machines and equipment we need to complete the four total number of pellet machines. We need to fulfill our demands. This we expect to be completed by Aug, 1st and then get the fire marshal's approval to go ahead by August 1, 2011. Milestone 3: Install the conveyor belts, air filters, baggers and dryers to completion. We expect this to be one machine and month. It is expected to take four month for shipping. During our waiting time we will install the rest of equipment while it's being reconditioned. The completion of the installation will be completed by the local labor and local contractor as needed. Milestone 4: Start complete production. At this point we expect to be up and running 3 shifts by March 31, 2012. 3.4 Project Resources Describe the personnel, contractors, equipment, and services you will use to accomplish the project. Include any partnerships or commitments with other entities you have or anticipate will be needed to complete your project. Describe any existing contracts and the selection process you may use for major equipment purchases or contracts. Include brief resumes and references for known, key personnel, contractors, and suppliers as an attachment to your application. The Gulkana Village Council has a number of ongoing projects which employ 20 people which we would be able to utilize to perform any construction and maintenance. Gulkana Village has maintained and operated the piped community water and sewer systems for twenty years and have complied with all State of Alaska Department of Environmental Conservation water standards. In addition to the maintenance staff listed above Gulkana Village has one person on staff that is Operator in Training Certified. One person is a level one provisional certificate. The Water Operators maintains the boilers as well as the water and sewer systems. We also built a building and installed a wood biomass system/tarn boiler. Installed and plumbed the entire system using our own personnel. Carpenters, laborers, cement finishers are on staff or are available locally. Gulkana Village has equipment: D3 Caterpillar six way blade, John Deer back hoe with front end loader and Kenworth dump truck to aide us in land preparation for the pellet plant. Gulkana Village is a sovereign tribe recognized by the State of Alaska and by the Bureau of Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 7 of 20 7/21/2010 Indian Affairs (BIA) of the U. S. Department of the Interior. This is confirmed by the fact that Gulkana Village is listed as a federally recognized tribe in the Alaska Native Claims Settlement Act, and in the March 22, 2007, Federal Register (Volume 72, Number 55) Notice titled “Indian Entities Recognized and Eligible to Receive Services from the United States Bureau of Indian Affairs”. The tribe qualifies for federal services and benefits under the BIA, the Federal Highway Administration, the Environmental Protection Agency, and other federal agencies. The GVC is the governing body of the tribe, duly elected by tribal members, and is authorized and directed by the tribal members to exercise the tribe’s inherent right to self-determination. In this capacity, the GVC has ultimate authority for governance of the tribe and to execute legal agreements on behalf of the tribe. The GVC has delegated authority to the Tribal Administrator to conduct the day-to-day business of the tribe, including executing legal agreements excepting only those that require tribal ordinances, resolutions, or similar GVC action to implement. The goal of the GVC is to become self-sufficient by utilizing the talents and capabilities within the tribe. The Council works aggressively to achieve this goal. On the administrative side, efficiencies and capacity building continue with the Tribal Administrator and the Accountant attending management and financial trainings and conferences. Further efficiencies have been provided through the acquisition and use of up-to-date computers, printers, and through the development of a computer automated accounting system. The GVC has successfully negotiated and is now administering its third year of a P.L. 93-638 self-determination contract with the Bureau of Indian Affairs, which now totals $571,461. The GVC administers several other programs, including the EPA IGAP grant ($110,000 for the current year), a wildfire fuels reduction project ($155,000), a dump assessment project ($70,000), and a Native American Lands Environmental Mitigation Program ($80,000) funded by the Department of Defense that is oriented toward assessment and clean up as may be necessary of old military sites. The GVC has in the recent past administered and completed the requirements of a $322,000 P.L. 93-638 contract for the design and engineering phase of a project to upgrade and pave Village roads, and install street lighting. Consequent to the successful completion of this contract, the Village has been awarded $2.9M for the construction phase of the project. The GVC is currently acquiring rights-of-way, completing required preliminary work or projects that will impact the road paving project (i.e. upgrade of existing sewer system), and negotiating terms of necessary contracts to complete the project. Other major projects that GVC has secured are:  A $1.0M renovation of the Village water storage tank, with a new water source and treatment plant. This project is on tap to be completed within the next year.  A $1.2M renovation and upgrade of the Village sewer system. This project included replacement of damaged or failed sections of sewer mains, extension of other sewer mains to provide sewer service to residents that previously did not have it, and installation of a new, large capacity septic system and leach field. This project was completed just this month (July 2007), however, work to tie the new system in with the old revealed the old system had deteriorated to the point of imminent failure and needs to be completely replaced. In addition, the GVC in the recent past has completed a BIA Water Resources grant ($40,000), and implemented an ongoing ICWA program ($38,000 per year). And, as has been discussed previously, the tribe recently completed a project to assess the viability and status of the tribe’s native language (an $80,000 project, $61,000 provided by an ANA grant). Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 8 of 20 7/21/2010 The management systems and accounting practices employed by the GVC are subject to evaluation by an independent auditor through the annual single agency audit report that is required by current statute and OMB Circular A-128, and as stated in CFR 25 §900.40 (b). Just this past year, the tribe reached the $500,000 federal funding expenditure level that requires an audit. Consequently, the tribe is currently undergoing its first ever single agency audit. Results from this audit will not be available until about the end of April. However, the GVC ICWA program has been audited in the recent past with no substantial findings, and in 2006, the tribe was audited by the IRS with no findings. 3.5 Project Communications Discuss how you plan to monitor the project and keep the Authority informed of the status. The Tribal Administrator provides oversight and supervision for all Gulkana Village Council staff and programs. As the GVC’s efforts to achieve self-sufficiency and self-determination for the Tribe have increased, so has the staff has increased in the past three years from six positions to thirteen currently staffed or authorized positions, several of which are considered professional or skilled positions. Project Management includes oversight of Pellet Project and coordinating activities between the Alaska Energy Authority and GVC Pellet project manager and assistant. The project manager will be responsible for quarterly reporting, budget tracking, organizing task, and maintaining the tribal technical support objectives. The project manager will be the primary contact between the Alaska Energy Authority and the Gulkana Village Council. In addition, the tribal project manager and project assistant shall coordinate with the Alaska Energy Authority in identifying and attending training(s) and conference(s) that are pertinent to the success of the project and that build tribal capacity. The goal for attending training is to build the capacity of the tribe to perform a safe environment (ie. hazmat, work safety, etc.) and to work in an efficient and safe manner, while attending conferences will provide the tribe knowledge of the rules and regulations of Biomass productions. Trip report summaries and meeting minutes will be included in all quarterly reports submitted to the Alaska Energy Authority by the 15th day of each month following the completion of a quarter. 3.6 Project Risk Discuss potential problems and how you would address them. The only risk that we foresee if the possibility of competition but we are trying to eliminate that risk factor by mass production and getting there first. Not being able to get there first is our biggest risk. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 9 of 20 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. Gulkana has over 300 cords laying on the ground ready to be chipped. Our fire reduction program is going to produce 75 acres of wood. We are not finished with clearing up a old military dump grounds which we are clear cutting consisting of about 80 acres and there is a possibility of another military cleanup site consisting of near about a quarter section. We also and a tentative agreement with Ahtna for an indefinite supply for the future. 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. 1. The Clinic has a single hot water boiler system, 80,000 BTU output, estimated replaced in the early 1980’s, 80% efficient and is powered by fuel oil. 2. The Shop/Garage has an over head gun furnace, 80,000 BTU output, estimated installation time in the late 1980’s, 75% efficient and powered by fuel oil. 3. The Teen Fitness Center has two heat sources, one being a forced air gun furnace 75,000 BTU output, replaced in 2005, 75% efficient and powered by fuel oil. The other fuel source being a toyostove, 55,000 BTU output, replaced in 1997, 88% efficient and powered by fuel oil. 4. The Hall/Administration is powered by three toyostoves, 55,000 BTU output, replaced in 1997, 88% efficient and powered by fuel oil. 5. The Office Building has a single hot water boiler, 150,000 BTU output, installed new 2008, 80% efficient and powered by fuel oil. 6. The Four Duplex are powered by four hot water boilers, 150,000 BTU output each, installed 2007, 80% efficient and powered by fuel oil. 7. The Transit Shop/Office facility that is under construction that will be powered by new wood fired boiler, 250,000 BTU output. 8. The Community Water System is powered by two hot water boilers, 150,000 BTU output each, installed in 1988, 75% efficient and powered by fuel oil. We want to replace existing systems with new efficient wood stoves. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 10 of 20 7/21/2010 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. Existing energy resources in the Copper River Valley are wood and mainly fuel oil systems. The impact would be to lessen dependency on fuel oil and to encourage consumption of renewable form of energy. We know that the fuel prices are going to continue to rise and so will the concerns associated with the burning of fossil fuels. 4.2.3 Existing Energy Market Discuss existing energy use and its market. Discuss impacts your project may have on energy customers. The local existing energy market relies heavily on fuel oil, which is getting extremely expensive. The Gulkana pellet project will significantly reduce heating cost for community throughout the Copper River Basin. 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 Gulkana Village is located in the Copper River Basin in south-central interior Alaska. The basin and its surrounds, including the entire Copper River drainage, encompass an area approximately the size of the state of Ohio. As indicated previously, an estimated 3,500 people reside in the basin. The population of the Village ranges from approximately 80 in the winter to approximately 120 during summer months when subsistence fishing and hunting is occurring. Gulkana is an Athabascan village. Ancient lifestyles and traditions still play a significant role in modern culture. There is no economic base in the Village and employment opportunities are extremely limited. The GVC is the sole employer in the Village, employing a minimal number of Village residents, mostly in temporary and part-time positions. A few other residents are employed by other entities in the local area, mostly in temporary and seasonal work. Residents of Gulkana still depend on subsistence activities (i.e. hunting, fishing, trapping and gathering) to supplement cash incomes. Gulkana remains an unincorporated community and does not lie within any organized borough. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 11 of 20 7/21/2010 Tribal government affairs are conducted by the GVC, a traditional tribal council elected by tribal membership. A village clinic provides immediate, basic medical care for Village residents. In-depth medical care, extended care, and hospitalization services are available at a slightly larger, better equipped facility in Glennallen, or at modern comprehensive hospitals in the Anchorage area. Housing in the Village is limited, and individual housing units are small and substandard by any reasonable criteria. At present, there are approximately 30 housing units in Gulkana, of which 5 are vacant largely because they are dilapidated and not reasonably habitable. Currently, the local housing authority is constructing three new homes. Within the past 5 years, four duplex apartment buildings were built to replace an eight-unit apartment complex that was destroyed by fire in 2004. Other non-residential buildings in the Village include a community hall, tribal offices, a teen center/library, a water treatment facility, a church, and a small clinic. There are no schools or preschool programs located in the Village. Preschool children are eligible to participate in a Head Start program located in Copper Center. However, there is no Head Start transportation that serves the Village. To participate in Head Start, a child must catch the Copper River School District (CRSD) high school bus to Glennallen, and from there via the Head Start bus to Copper Center. Elementary school children and high school students ride CRSD busses to Glennallen Elementary and High School, respectively, approximately 15 miles south of the Village. Glennallen High School is the only secondary school for grades 7-12 in the Copper River Basin and its surrounds (an area approximately the size of the state of Ohio). The Village is considered a remote, “bush” village in south-central Alaska. It does have a distinct advantage over most other remote villages throughout the state in that it is located adjacent to a major highway of the state road system. It is a long, somewhat arduous drive to Anchorage or Fairbanks from the Village, but these larger metropolitan areas of the state provide supplies and services relatively conveniently and inexpensively (relative to other bush areas of the state) for Village residents. The Village currently does not have a functioning washeteria. The Public Health Service constructed a laundromat in 1976, but the Village did not have adequate funding to maintain and upgrade the facility over time, and it is not functioning at present. This is one of the major current needs in the community. Copper Valley Electric Association provides electrical service to the Village through a commercial power grid. This service is generally reliable, and CVEA does an excellent job of providing and maintaining its service. However, the service is hampered by the logistics of a very large and sparsely populated service area, combined with the difficulties and hazards associated with extreme climate conditions. Power is generated primarily with diesel generators, supplemented by a hydro-generation plant and a turbine generator utilizing waste heat from the Petro Star refinery near Valdez. These factors combine to make power feed to the outlying villages sometimes inconsistent, with occasional brown downs, bumps, and outages. Electric power is very expensive, among the highest rates in the entire nation. In summary, the Village is isolated in “bush” Alaska. There is no sustainable economy in the Village. Housing is limited and substandard at best. Most residents live in conditions that would be considered abject poverty in the lower 48 states, or even in more populous areas of Alaska. The nearest source of essential services (i.e. more complete health care, communications, Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 12 of 20 7/21/2010 washeteria, schools, etc.) and supplies (i.e. groceries, heating fuel, etc.) is Glennallen, 15 miles to the south of the Village, and because of the sparse population in the basin, such services and supplies are minimal and expensive. The nearest Post Office is 5 miles to the northwest of the Village in Gakona. None of these services and supplies is available in the Village. This information is presented to illustrate the need for a more economic, reliable, and potentially renewable source of electrical and heat energy. Due to the sparse population and large geographic area, logistics make energy distribution systems prohibitively expensive and almost impossible. An alternate source of energy would better serve the area if it did not require a large, centralized generation plant, or tank farm storage, or other requirements associated with traditional power generation or fuel distribution systems. The Gulkana Village Pellet Fuels Project will largely address these issues. Currently, there is no renewable energy system in the Copper River Basin that would serve the basin as a whole. Many homes use wood as supplemental heat, but very few use wood as a primary heat source. The Gulkana Village Pellet Fuels Project will be the first that will provide a renewable energy source utilizing an abundant but otherwise largely untapped resource. Though this project will not be large enough to employ a significant number of basin residents, its benefits will affect the entire basin, and possibly the entire state. And, the jobs that it does provide will be full-time, retirement length jobs that will certainly be significant to the Village residents and their families. Ultimately, the effects of reduced energy costs will be enjoyed far and wide consequent to the Gulkana Village Pellet Fuels Project. Other less direct benefits will also be realized from the project. For example, obtaining raw materials for pellet production will create opportunities for harvesting biomass; haulage of raw materials to the pellet plant, and distribution of the finished product will create opportunity for trucking employment; etc. In total, all of this will create real wealth and a revenue stream for the entire basin unlike any that has been known, a revenue stream that will benefit local businesses and suppliers, and will improve the general economy of the entire basin. 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. No land ownership or access issues. The land is owned by Gulkana Village Council. GVC supported project by documented action, 7/26/2010. This action is memorialized in the GVC meeting minutes of that date, and subsequently in Resolution 10-07. 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 only permit is the certificate from Alaska State Fire Marshal. At this time there appears to be no other requirements for permits for this facility. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 13 of 20 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  No threatened or endangered species are known to exist in the Gulkana Village area (as per US Fish & Wildlife list of species [/www.fws.gov/endangered/wildlife] and Alaska Dept of Fish & Game, Division of Wildlife Conservation [www.wc.adfg.state.ak.us/index.cfm?adfg= endangered. list] as of June 2005).  The Copper River basin is an increasingly popular area for hunting and fishing activities. Moose, bear, caribou, and other game animals abound within the basin. Virtually every type of wildlife common to interior Alaska can be found in the basin. Some exotic species, i.e. American bison, have been introduced to the basin and have survived and multiplied if not thrived. Other species, i.e. cougars, not normally known in or rare to Alaska have been sighted in the basin. The entire basin can be considered prime wildlife habitat. However, the Village is located in an area that has no unusual or high value wildlife habitat beyond that common to the basin. The Village is not located in or near to known calving areas, unique habitat for endangered species, etc. The Gulkana River flows through Gulkana Village townsite lands for approximately one half mile only a couple of hundred yards to the west of the populated residential area of the Village. The Copper River flows approximately one half mile to the southeast of the populated residential area of the Village. Both of these rivers are anadromous rivers utilized heavily by king, red, and silver salmon, and grayling. The Gulkana River is a world renowned sports fishery. However, there are no known streams or other water bodies suitable for spawning, as a food source, or other critical fishery habitat in the near vicinity of the Village. Neither of these nearby rivers will be affected by the pellet project.  There are no high value wetlands within the populated residential areas of the Village, and none known within town site lands. A couple of small ponds and adjacent wetland area, collectively known locally as “Stink Lake” because of the strong organic odor it emits, across the highway from the Village have been utilized in the past by swans as a nesting site. However, increased use of the Gulkana River by fishermen, and the subsequent increase in fish carcasses and entrails near the river, have enticed a substantial increase in the number of gulls nesting at the ponds. This has driven the swans elsewhere. None have nested there for 10-15 years. A few other small ponds and pocket wetlands are located adjacent to or within a short distance of Village lands, but none will be affected by the pellet project.  There are no historic sites in Gulkana Village listed on the National Register of Historic Places (NRHP). The nearest historic site that is listed on the NRHP is the Gakona Historic Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 14 of 20 7/21/2010 District, about 4 – 5 miles from the Village; this site will not be affected by the project. This does not say that there are no historic sites in the vicinity of and of value to the Village. The site of most value to the Village is the old village site on the west side of the Gulkana River, across from the present village site. The old village site contains a variety of house pits, graves, and other remnants and artifacts of ancient Native life. Much of the site has been desecrated by gravel mining and highway construction operations. However, the Village desires that remaining artifacts of the old village be preserved. The pellet project will not affect this historic site. Other sites of lesser historic significance to the Village are the remnants and artifacts associated with the old Gulkana Roadhouse and appurtenant structures and facilities, the Orr stage station, and various minor military facilities from the World War II era. None of these miscellaneous sites are well documented, and are difficult to identify in the field. Virtually all of these sites are within a private Native allotment to the northwest of and adjacent to Village town site lands. None of these sites, nor any other known site with any historic significance, will be affected by the pellet project.  The only land constraints are by the Gulkana Village Council and they have approved this project by Resolution 10-07 (See Attachment "B")  No Telecommunication interference.  The nearest airport is 9 miles away which poses no problems.  We are located on the road system and our building is behind a bluff area but easy access to the building.  There are no other potential barriers or concerns that will affect the environment. 4.4 Proposed New System Costs and Projected Revenues (Total Estimated Costs and Projected Revenues) The level of cost information provided will vary according to the phase of funding requested and any previous work the applicant may have done on the project. Applicants must reference the source of their cost data. For example: Applicants Records or Analysis, Industry Standards, Consultant or Manufacturer’s estimates. 4.4.1 Project Development Cost Provide detailed project cost information based on your current knowledge and understanding of the project. Cost information should include the following:  Total anticipated project cost, and cost for this phase  Requested grant funding  Applicant matching funds – loans, capital contributions, in-kind  Identification of other funding sources  Projected capital cost of proposed renewable energy system  Projected development cost of proposed renewable energy system The total project cost = $955,000 Requested grant funding = $955,000 Identification of other funding sources = BIA, Gulkana Village Council, NALEMP, and VFA. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 15 of 20 7/21/2010 Projected capital cost of project = $382,500  Machines Purchased - $41,500  Machines that we don't have yet - $281,500  Metal Building - $14,500  Land - $15,000 an acre = $45,000 Projected development cost of project = $1,030,000 4.4.2 Project Operating and Maintenance Costs Include anticipated O&M costs for new facilities constructed and how these would be funded by the applicant. (Note: Operational costs are not eligible for grant funds however grantees are required to meet ongoing reporting requirements for the purpose of reporting impacts of projects on the communities they serve.) Estimated annual O&M costs = $514,725 Electricity = $50,000 (Includes all lighting and equipment usage) Consumables = $6,700 (Replacement of pellet supplies and miscellaneous consumables) Labor = $364,515 (Maintenance on the pellet equipments) 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 Not Applicable 4.4.4 Project Cost Worksheet Complete the cost worksheet form which provides summary information that will be considered in evaluating the project. Project Cost/Benefit Worksheet The AEA Renewable Energy Fund Round 4 Project Cost/Benefit Worksheet does not really “fit” our project. Several aspects of the worksheet (i.e. System Design, Project Cost, etc.) are covered in other sections of the grant application and supporting materials. Following is a basic cost/benefit analysis based on estimates of anticipated expenses and income from the project. Basic Project Cost/Benefit Analysis Total Estimated Project Cost: $ 1,030,000 Annual Estimated O&M Cost: 673,500 Total Estimated Start-Up Cost: $ 1,703,500 Estimated Production, year 1: Est. Production/hour 2,000 lbs/hr Est. avg. 2 shifts/day, 8 hr/shift, 300 days/year 4,800 hr/yr Annual Production (2000 x 4800): 9,600,000 lbs Assuming product is in 40 lb bags: 240,000 bags Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 16 of 20 7/21/2010 Estimated Income, year 1: Estimated income/bag (based on market analysis) $ 6.00 Estimated expenses/bag (raw wood supply, product transportation/shipping, maintenance, etc.) $ 3.00 Total Income, year 1 (240,000 bags x $3/bag) $ 720,000 These estimates are based on the current market rate for bulk (i.e. not bagged) product. Assuming this rate of production continues for the foreseeable future (5 years), the project will recoup start - up expenses in 2 years and 4 months. We anticipate this is a very conservative assumption. Previous experience has shown significant demand. It is anticipated demand will continue to grow until the maximum capacity (4 tons/hour) of our project is achieved. As indicated elsewhere, we expect this maximum to be reached within approximately 2 years from start-up. At maximum production, the project will return an estimated $2.9M annually. This is assuming only 2 shifts per day, but it could be expected that the plant could be running 3 shifts, 24 hours per day, 300 days per year. 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 This would greatly improve the efficiency of reduction and utilization of the biomass byproducts. A bag of pellets is equivalent to 2.47 gallons of fuel. We know that fuel prices are going to continue to rise so will the potential profits off pellets. It has also been shown by outside contacts that there is a significant market for wood pellets. This may provide opportunity to profit from selling the excess pellets as there will be much more than we can use for heating Village facilities. As a result of purchasing the bigger pellet mill it will help us in the future to be more self sufficient and provide opportunities for employment in this severely economically depressed area. For these reasons, we feel that this pellet operation is a win-win opportunity for all involved. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 17 of 20 7/21/2010 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 Gulkana Village Council is the ultimate governing authority for the Native Village of Gulkana. The Council operates a number of programs and projects, including:  BIA Fire Fuels Reduction project;  NALEMP program;  A Tribal Transit program dba Soaring Eagle Transit, the only public transit system serving the entire Copper River basin;  Etc. Several of these programs have been described previously. The Council will be the ultimate authority in the management and operation of the Gulkana Village Pellet Fuels Project. The Council has delegated day-to-day oversight and supervision for all Gulkana Village Council programs and projects to the Tribal Administrator. He will have broad oversight responsibilities for the Pellet Project. The Pellet Project Coordinator will have primary day-to-day supervisory and management for the project. This position will be responsible for assuring pellet production operations are conducted safely and efficiently, pellet manufacturing equipment is properly maintained and operated, and will have on-site supervisory responsibility for the pellet project workforce. The Pellet Project Assistant will provide general administrative support for the Project Coordinator, including timesheets, production reports, correspondence, etc. The Gulkana Village Accountant will provide accounting support, including payroll, budget preparation and reporting, etc. The Gulkana Village Pellet Fuels Project start-up phase is currently being constructed. This phase consists of the construction of a building to house pellet production equipment and operations, purchase and installation of the first pellet production line. Gulkana Village Council has invested scarce resources into the building and equipment for the first production line. The Council, not having a source of steady, real income, has maxed out its capacity to finance the operation with this investment. The funds applied for with this application will allow the Council to develop the business/operational plan for the Pellet Project as outlined. The current business plan calls for the first production line to be operational by January 1, 2011, for start-up and testing, and will be at full production by approximately February 1, 2011. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 18 of 20 7/21/2010 Once in full production, this initial start-up operation will produce one ton of pellets per hour. Operations will continue at this rate until demand for the product exceeds our ability to produce pellets. At this point, we will expand the operation by installing a second production line, hiring additional personnel, and increasing production to meet demand. This same pattern will continue until the pellet production plant is at design capacity; that is, four production lines will be installed and functional. At full capacity, the plant will produce up to four tons of pellets per hour. At present, it is anticipated that equipment for all four production lines will be installed and functional in approximately two years. Ultimately, as proceeds from pellet production “catch up” to and surpass expenses, it is anticipated the operation will become self-supporting and ultimately profitable. At this point, this cash flow will cover the cost of continued operations and maintenance. The project is designed with four production lines with intent. We expect that any breakdowns of equipment will not occur in all production lines at the same time. Therefore, if a piece of equipment is out of service for maintenance or repair, we will be able to continue production with the other three production lines. This will also allow us to avoid most breakdowns as we will be able to idle each production line on a rotational basis to perform necessary preventive maintenance. The Council fully expects this Pellet Project to ultimately be a profitable operation. Since the Council is recognized as a non-profit organization, at the point in time the project becomes profitable, it is expected a new management structure will be required, which may include establishing a corporation to continue pellet production operations. 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. Gulkana Village Council initiated a small wood pellet production operation to facilitate deposal of slash and debris. We have been producing pellets with the small pellet mill and has been a very positive effort. To test our pellets we were able to largely heat the village community hall with wood pellets last year. In addition, our pellet operation has generated significant interest from other agencies and entities that are working to reduce dependence on fossil fuels and create alternate environmentally friendly sources of energy. We were able to take a tour of two pellet production facilities here in Alaska. The visits were very useful and gave us many new insights into the pellet operation. Purchased 1 pellet mill and 1 hammer mill with the help of another program's and constructed the metal building. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 19 of 20 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. We don't have local government to provide general support for the resident of the basin however we have generated a lot of interest in our pellet production from Valdez to Fairbanks. At a statewide biomass meeting in 2010, Ahtna Corporation offered to supply materials for anyone that was going to go into this direction. We specifically spoke with Ahtna to use their land for wood supply. Alaska BIA is in full support of our production and they funded our initial test equipment for the Pellet Plant. They are very interested in seeing any tribe develop business that can advance their self sufficiency. Demand by local community and others: -Commercial outlets (want to order by the ton). -City of Valdez (wants to order semi-loads for their city buildings. -Local Spark's store requested 44 tons. -Pellet Stove Dealers -Commercial outlet source in Valdez and all surrounding towns. -Chistochina Village (Potential boiler system) Gulkana Village Council strongly supports this project see Attachment "B" 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 See Grant Budget Attachment "C" Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 20 of 20 7/21/2010 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. SEE ATTACHED RESUMES B. Cost Worksheet per application form Section 4.4.4. SEE Section 4.4.4. C. Grant Budget Form per application form Section 9. SEE ATTACHMENT "C" D. Letters demonstrating local support per application form Section 8. SEE ATTACHMENT "B" E. An electronic version of the entire application on CD per RFA Section 1.6. CD VERSION IN PACKAGE F. Authorized Signers Form. SEE ATTACHMENT "D" 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. SEE ATTACHMENT "B" 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 Signature Title Date