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HomeMy WebLinkAboutStebbins Wind Feasibility Round IV Grant ApplicationAlaska Village Electric Cooperative, Inc. Stebbins Wind Feasibility Renewable Energy Fund-Round IV Grant Application Submitted by: Alaska Village Electric Cooperative, Inc 4831 Eagle Street Anchorage, Alaska 99503 Submitted to: Alaska Energy Authority 813 West Northern Lights Blvd. Anchorage, AK 99503 September 15, 2010 ALASKA VILLAGE ELECTRIC COOPERATIVE,INC. Renewable Energy Fund Round IV Grant Application AEA 11-005 Application Page 1 of 18 7/21/2010 SECTION 1 –APPLICANT INFORMATION Name (Name of utility, IPP, or government entity submitting proposal) Alaska Village Electric Cooperative, Inc. Type of Entity: Electric Utility Mailing Address 4831 Eagle Street Anchorage, AK 99503 Physical Address Telephone (907) 565-5531 Fax (907) 562-4086 Email 1.1 APPLICANT POINT OF CONTACT / GRANTS MANAGER Name Brent Petrie Title Manager, Community Development Key Account Mailing Address 4831 Eagle Street Anchorage, AK 99503 Telephone (907)565-5531 Fax (907)562-4086 Email BPetrie@avec.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) X 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 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. Alaska Village Electric Cooperative, Inc. Stebbins Wind Feasibility Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 2 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) Stebbins Wind Phase II Feasibility 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. Stebbins (pop. 577) is located on the northwest coast of St. Michael Island, on Norton Sound.It lies 8 miles north of St. Michael and 120 miles southeast of Nome. 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. To determine the feasibility of installing wind towers in Stebbins,AVEC proposes to continue to monitor the existing wind meteorological (met) tower that was erected this year using funding from the Denali Commission. AVEC would also perform geotechnical work to support an engineering effort. The work would involve obtaining a letter of non-objection from the landowner for geotechnical fieldwork, studying the wind resource for one year, and conducting a geotechnical investigation to determine the soil conditions and needed engineering at the site. A conceptual design would be created based on the outcome of the met tower recordings and geotechnical investigation.Permits and site control would be obtained for the conceptual design of this project. AVEC is currently planning an electric intertie between Stebbins and St. Michael. Information regarding St. Michael is included in this application because once this intertie is constructed, the wind project would serve both communities. Alaska Village Electric Cooperative, Inc. Stebbins Wind Feasibility Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 3 of 18 7/21/2010 2.5 PROJECT BENEFIT Briefly discuss the financial and public benefits that will result from this project, (such as reduced fuel costs, lower energy costs, etc.) The primary financial benefit from this project would be to determine whether the wind resources are suited to provide power to the community and to prepare a conceptual design of a wind facility. The possible displacement of diesel fuel used for village power generation in Stebbins could be 65,420 gal/yr (assuming 80% turbine availability). This project could save $233,106 during its first full year of operation (expected to be 2014). AVEC is currently planning a new 10-mile long, 15 kV overhead primary power transmission line from Stebbins to Saint Michael, with a prime power plant in Stebbins.A wind project in Stebbins would benefit both Stebbins and St. Michael when the intertie is constructed. Detailed benefits are listed in Section 5.0. 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 cost for the project is $145,000 of which $137,750 is requested in grant funds from AEA. The remaining $7,250 (5%) will be matched in cash by AVEC. 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.$137,750 2.7.2 Other Funds to be provided (Project match)$7,250 2.7.3 Total Grant Costs (sum of 2.7.1 and 2.7.2)$145,000 Project Costs & Benefits (Summary of total project costs including work to date and future cost estimates to get to a fully operational project) 2.7.4 Total Project Cost (Summary from Cost Worksheet including estimates through construction)$ 4.0 M 2.7.5 Estimated Direct Financial Benefit (Savings)$To be determined 2.7.6 Other Public Benefit (If you can calculate the benefit in terms of dollars please provide that number here and explain how you calculated that number in your application (Section 5.) $To be determined SECTION 3 –PROJECT MANAGEMENT PLAN Describe who will be responsible for managing the project and provide a plan for successfully Alaska Village Electric Cooperative, Inc. Stebbins Wind Feasibility Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 4 of 18 7/21/2010 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. AVEC would provide overall project management and oversight.AVEC is the electric utility serving Stebbins and St. Michael.To further support the AVEC team in project delivery, wind resource, engineering, and environmental consultants will be selected. Brent Petrie, Manager, Community Development and Key Accounts,would lead the project management team consisting of AVEC staff, consultants, and contractors.He has worked for Alaska Village Electric Cooperative since 1998, where he manages the development of alternatives to diesel generation for AVEC such as using wind, hydropower, and heat recovery. He also manages relationships with AVEC’s largest customers and is the project manager for AVEC’s many construction projects as an energy partner of the federally-funded Denali Commission. Mr. Petrie has worked in the energy and resource field for more than thirty years, having worked for the federal and state governments as consultant, planner,and project manager.He has been a utility manager or management consultant since 1993.As General Manager of Iliamna-Newhalen-Nondalton Electric Cooperative from 1994 to 1998, he reported to a seven- member, elected board of directors, and served as project manager on its hydroelectric project development.He is an elected member of the Board of Directors of the Utility Wind Interest Group representing rural electric cooperatives and serves on the Power Supply Task force of the National Rural Electric Cooperative Association.Mr. Petrie has a Master’s Degree in Water Resource Management and a Bachelor's degree in Geography.His resume is attached. 3.2 Project Schedule Include a schedule for the proposed work that will be funded by this grant. (You may include a chart or table attachment with a summary of dates below.) Authorization to Proceed:September 2011 Select Contractors:September 2011 Complete Monitoring Met Tower Data:October 2011-September 2012 Geotechnical Field Work:October 2011 Geotechnical Report:December 2011 Dismantle Met Tower:September 2012 Wind Resource Report:October 2012 Alaska Village Electric Cooperative, Inc. Stebbins Wind Feasibility Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 5 of 18 7/21/2010 Conceptual Design and Cost Estimate:November 2012 Permits for Conceptual Design:December 2012 3.3 Project Milestones Define key tasks and decision points in your project and a schedule for achieving them. The Milestones must also be included on your budget worksheet to demonstrate how you propose to manage the project cash flow.(See Section 2 of the RFA or the Budget Form.) 1.Project scoping and contractor solicitation (September 1-September 15, 2011) AVEC would select a contractor for the wind feasibility, geotechnical analysis, conceptual design, and permitting immediately following AEA’s authorization to proceed. 2.Detailed resource assessment (September 15, 2011-October 31, 2012) We will extend monitoring of the met tower placed between Stebbins and St. Michael through September 2012, when the met tower would be dismantled. The wind resource report would be drafted by the end of October, 2012. 3.Identification and resolution of land issues (September 1,2011-June 1, 2012) AVEC has a letter of non-objection for the met tower at its current location. AVEC would work with the Corporation to obtain permanent site control to place turbines. 4.Detailed analysis of current cost of energy and future market (February 1-March 30, 2012) AVEC would draft a memorandum documenting the existing and future energy costs and markets in Stebbins (and St. Michael, assuming the intertie will be constructed). The information will be based on AVEC records and community plans. A community meeting would be held to determine future energy markets. 5.Detailed economic and financial analyses (June 1-August 30, 2012) An economic and financial analysis, which examines potential final design and construction costs, operating and maintenance costs, user rates, and other funding mechanisms,would be developed. 6.Conceptual business & operations plan (June 1-October 31, 2012) Draft business and operational plans will be developed working with the City of Stebbins and the Stebbins Native Corporation. The conceptual plan would include draft recovered heat agreements. 7.Conceptual design and costs estimate (September 1-November 1, 2012) A conceptual design and cost estimate would be prepared using information gathered from the wind study and geotechnical fieldwork. 8.Permitting and environmental analysis (September 15-December 15, 2012) Environmental permits would be obtained for the conceptual design of the project. Alaska Village Electric Cooperative, Inc. Stebbins Wind Feasibility Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 6 of 18 7/21/2010 9.Final report and recommendations (December 31, 2012) All of the memoranda and reports written for the project would be combined in a final report and submitted to AEA. The Final Report would include final drafts of the following: Wind Resource Report Existing and Future Energy Costs and Markets Memorandum Economic and Financial Analysis Conceptual Business and Operating Plan Geotechnical Report Conceptual Design Analysis and Cost Estimate Environmental Permits 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. AVEC would use a project management approach that has been used to successfully design and construct wind turbines throughout rural Alaska: A team of AVEC staff and external consultants. AVEC staff and their role on this project includes: Meera Kohler, President and Chief Executive Officer,would act as Project Executive and would maintain ultimate authority programmatically and financially. Brent Petrie, Manager, Community Development and Key Accounts,would lead the project management team consisting of AVEC staff, consultants, and contractors. Together with his group, Brent would provide coordination of the installation of the met tower, geotechnical work, conceptual design, and permitting. The group’s resources include a project coordinator, contracts clerk, accountant, engineer, and a community liaison.Brent would be responsible for reporting directly to AEA on the status of the project. Mark Teitzel, Vice President/Manager of Engineering,would provide technical assistance and information on the existing power system and possible issues and project study needs. Debbie Bullock, manager of administrative services,would provide support in accounting,payables, financial reporting, and capitalization of assets in accordance with AEA guidelines. Anna Sattler, community liaison,would lead development of the Existing and Future Energy Costs and Markets Memorandum and the Conceptual Business and Operating Plan. Ms. Sattler would also communicate directly with Stebbins residents to ensure that the community is informed An AVEC project manager would lead this project.It is likely that one of AVEC’s in-house contractors would lead the work.The project manager wi would ll be responsible for: Obtaining site control/access and permits for the installation of the met tower and geotechnical work Alaska Village Electric Cooperative, Inc. Stebbins Wind Feasibility Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 7 of 18 7/21/2010 Selecting, coordinating, and managing the wind resource, geotechnical,engineering, and permitting consultants and ensuring that their deliverables are on time and within budget Working with AVEC’s Community Liaison to develop the Existing and Future Energy Costs and Markets Memorandum and the Conceptual Business and Operating Plan Working to develop the Economic and Financial Analysis Contractors for this project would include: Wind Resource Consultant.AVEC currently has an on-call contract with V3 Energy, LLC for wind resource studies and reports.It is likely that V3 would work on this project. Doug Vaught’s (V3’s owner) resume is attached.V3 w would ill: o Supervise the installation of the met tower o Consult on the operation and maintenance of the tower o Draft the wind resource report o Geotechnical consultant.AVEC would select and employ an experienced geotechnical consultant who would: o Conduct a geotechnical and natural hazards field study and report of the project area Engineering consultant.AVEC would select and employ an engineering consultant who would: o Provide conceptual design and engineering specifications for the wind turbines Environmental Consultant.AVEC currently has an on-call contract with Solstice Alaska Consulting, Inc for environmental permitting. It is likely that Solstice would work on this project. Robin Reich’s (Solstice’s president) resume is attached. Solstice would: o Consult with agencies, o Develop and submit permit applications o Document mitigation requirements Selection Process for Contractors:The geotechnical and engineering consultant selection would be based upon technical competencies, past performance, written proposal quality, cost, and general consensus from the technical steering committee.The selection of the consultant would occur in strict conformity with corporate procurement policies, conformance with OMB circulars, and DCAA principles. 3.5 Project Communications Discuss how you plan to monitor the project and keep the Authority informed of the status. AVEC would require that monthly written progress reports be provided with each invoice submitted from contractors. The progress reports would include a summary of tasks completed, issues or problems experienced, upcoming tasks, and contractor’s needs from AVEC. Project progress reports would be collected and forwarded as one package to the AEA project manager each month. Quarterly face-to-face meetings would occur between AVEC and AEA to discuss the status of all wind projects funded through the AEA Renewable Energy Grants program. Individual project meetings would be held, as required or requested by AEA. Alaska Village Electric Cooperative, Inc. Stebbins Wind Feasibility Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 8 of 18 7/21/2010 3.6 Project Risk Discuss potential problems and how you would address them. Weather.Weather could delay geotechnical fieldwork and/or the erection of the met tower; however, an experienced consultant, familiar with Alaskan weather conditions, would be selected. It unlikely that a delay in the total project schedule would occur if the field work or erection of the met tower is delayed.It is possible to erect the met tower during winter months.The met tower would be installed to handle Stebbins’winter weather conditions. The met tower would be monitored by local AVEC personnel to ensure the met tower is up and functioning properly throughout the year. Construction Funding.By having the project designed and permitted, AVEC would be prepared to capitalize on many funding opportunities. Environmental Permitting.Permits would be acquired for the turbines and associated infrastructure.AVEC would hire an environmental consultant familiar with permitting wind projects in Alaska. Early consultation with agencies would occur in order to flesh out location, natural and social environment, specific species, and mitigation issues. The consultant would work openly with the agencies and conduct studies as appropriate. 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. According to the AEA Alaska high-resolution wind resource map, Stebbins is rated as a class 4 to 5 wind regime. Correlating AVEC’s meteorological data from Shaktoolik, which is also in a 4 to 5 wind regime,AVEC expects the annual wind resource to be 30% of installed wind turbine capacity.Multiple wind turbines totaling 400 to 600 kW can be expected to produce around 925,000 kWh.The appropriate total rating would be determined by this feasibility study. Other energy resources are not feasible for the following reasons: Photovoltaic solar arrays do not provide much energy during the villages’ peak electrical demand season (winter), and the installed cost would be on the order of ten times that Alaska Village Electric Cooperative, Inc. Stebbins Wind Feasibility Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 9 of 18 7/21/2010 of wind. Generating power from ocean tidal motion is not yet an established technology for arctic applications. Hydropower requires hillier topography than is found in the Stebbins-St. Michael area, and a year-round source of flowing water. 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. AVEC currently provides power to the communities of Stebbins and St. Michael with diesel generators. Once the communities are connected by a planned intertie, the St. Michael plant would be closed, and a backup generator would be installed. The Stebbins power plant includes three CMS generator sets with a capacity of 499 kW (3 years old,overhauled in 2007), 305 kW (4 years old,overhauled in 2006), and 250 kW (17 years old, overhauled in 2000).The combined capacity at the Stebbins power plant is 871 kW. The peak demand in 2009 in Stebbins was 295 kW.The Stebbins plant generated 13.29 kWh for each gallon of fuel consumed in 2009.Stebbins is currently planning a new power plant and tank farm, which will be constructed once funding is available. St. Michael has three diesel generator sets with a combined capacity of 1,020 (CMS 499 kW [5 years old], DD 314 kW [10 years old,overhauled in 2006] and DD 207 kW [15 years old, overhauled in 2006].St. Michael’s peak demand in 2009 was 397 kW.The St. Michael plant generated 14.79 kWh per gallon in 2009. 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. Stebbins and St.Michael use diesel and heating oil as primary energy resources.Diesel fuel consumption for power generation in Stebbins in 2009 was 105,745 gallons; in St. Michael diesel fuel consumption was 125,108 gallons. If this study finds the wind resource suitable, installation of wind turbines in the community would decrease the amount of diesel fuel used for power generation.The diesel generator use in Stebbins would be decreased,thereby decreasing generator operations and maintenance costs and enabling generators to last longer and require fewer overhauls. 4.2.3 Existing Energy Market Discuss existing energy use and its market.Discuss impacts your project may have on energy customers. Stebbins is located on Saint Michael Island, about 120 miles southeast of Nome. Average summer temperatures range from 40 to 60° F; winter temperatures average -4 to 16 F°.St. Michael is located on the east coast of St. Michael Island in Norton Sound.It lies 125 miles southeast of Nome and 48 miles southwest of Unalakleet.St. Michael is located 10 miles east of Alaska Village Electric Cooperative, Inc. Stebbins Wind Feasibility Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 10 of 18 7/21/2010 Stebbins by road.Summer temperatures average 40 to 60; winters average -4 to 16. Extremes from -55 to 70 have been recorded. In Stebbins, 42 percent of the population is below the poverty line, and the median household income is $23,125—less than half of the State’s median household income of $59,036. In St. Michael, the median household income is $33,036 and 22.88 percent of residents live below the poverty level in St. Michael. The electricity consumption (kWh sold)in Stebbins in 2009 was 1,339,953kWh while the consumption in St.Michael was 1,720,048 kWh. The load of is highest during the winter months, with the bulk of electricity consumed by residences and the school.If this study finds that winds are suitable, the addition of wind turbines to the electric generation system could reduce the amount of diesel fuel used for power generation. Energy costs would be stabilized in Stebbins, and after the Stebbins-St. Michael intertie is constructed, wind turbines would stabilize energy costs for two villages. Like all of Alaska, Stebbins and St.Michael are subject to long periods of darkness.Reliable electric service is essential for the operation of home lighting, streetlights, and security lighting. Outside lighting greatly improves the safety of village residents.Residents rely on subsistence resources including fish, seal, walrus, reindeer, and beluga whale.Subsistence food is gathered and harvested and stored in refrigerators and freezers. Refrigeration is essential for the extended storage of perishable foodstuffs, and reliable electric service is essential for proper freeze storage of food.The construction of the proposed project would augment and improve the existing power generation system by incorporating a locally available renewable resource. 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 Renewable Energy Technology.AVEC plans to conduct a feasibility analysis,resources assessment,conceptual design, and permitting to assess the possibility of using wind power in Stebbins. If the wind resource proves suitable and funding is obtained, wind turbines would be installed to serve the community of Stebbins and later St. Michael, when the intertie is constructed. Optimum installed capacity/Anticipated capacity factor/Anticipated annual generation.The purpose of this work is to gather background information to plan a future alternative energy facility. The capacity is unknown at this time. It is expected to be around 925 MWh (80% avail.); Alaska Village Electric Cooperative, Inc. Stebbins Wind Feasibility Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 11 of 18 7/21/2010 however, this is an estimate. Anticipated barriers.The potential barriers to success of this project include weather and logistics, permitting, and construction funding.Weather and logistics barriers are minor and do not pose a threat to the completion of this project.Permitting, based on an initial investigation does not appear to be a significant hurdle to completing this phase of the project. Construction funding will be easier to obtain with design and permits in hand. Basic integration concept/Delivery methods.This project would study how the project would be connected to the future intertie.Conceptual design, to be completed as a part of this project, would detail how power from a wind turbine would be integrated and delivered into the intertied Stebbins and St.Michael system. 4.3.2 Land Ownership Identify potential land ownership issues, including whether site owners have agreed to the project or how you intend to approach land ownership and access issues. A met tower is currently installed at a location between Stebbins and St. Michael on St. Michael Corporation-owned land. Obtaining site control for future wind turbines would be accomplished as a part of this project. Because site control was granted for the existing met tower, because wind power is a priority in the Stebbins Local Economic Development Plan and the St. Michael Local Economic Development Plan, and because letters of support for this project have been received from St. Michael Corporation (as well as St. Michael Tribal Council,City of Stebbins,and the Stebbins Native Village),site control should not be an issue for this project. 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 Permits have been acquired for the met tower that is in place. For potential future turbines, the following permits or authorizations will be required: FAA Air Navigation Hazard Permitting.A non-hazard determination would be sought from the Federal Aviation Administration as soon as it is determined that the wind resource is suitable and the turbine location and type have been selected.In order to ensure that enough time and resources are allocated to this effort,AVEC would do this early in the process once suitable construction sites have been determined, based on the conceptual design report,. It is expected to take about 3 month to obtain the determination. Endangered Species Act/Migratory Bird Treaty Act Consultation:Consultation with the U.S. Fish and Wildlife Service (USFWS)in compliance with the Endangered Species Act and Migratory Bird Treaty Act would be required to construct wind turbines.A finding letter stating that the constructed project would not be expected to impact threatened or endangered species or birds would be drafted and submitted to the USFWS once the conceptual design is completed. It is Alaska Village Electric Cooperative, Inc. Stebbins Wind Feasibility Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 12 of 18 7/21/2010 expected that AVEC would receive concurrence from the Service within one month. Clean Water Act (Section 401) Permit:An U.S. Army Corps of Engineers (Corps)Wetlands Permit may be needed for the geotechnical work and for the placement of turbines.Because of the limited footprint of the geotechnical work,a “Nationwide Permit”would be sought. The application/preconstruction notice would be submitted to the Corps once funding is assured, and the permit would be issued prior to initiating geotechnical work in October 2011. To permit the potential turbines, an individual wetland permit would be sought from the Corps. The application would be submitted once conceptual design has been completed. It is expected that the permit would be issued within 3 months. Coastal Plan Consistency Determination-A State of Alaska Department of Natural Resources, Division of Coastal and Ocean Management Coastal Project Questionnaire and Enforceable Policies Consistency Determination would be prepared and submitted after the conceptual design is completed. By statute, it would take at least 60 days to complete the permitting process. 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 Much of the work conducted for this project will be to determine whether the environmental issues listed above will need to be addressed. Threatened or endangered species.The USFWS would be consulted to ensure that the construction of the wind turbines would have no affect on threatened or endangered species. Construction would be timed to avoid impacts to migratory birds in compliance with the Migratory Bird Treaty Act. Habitat issues.During permitting, the project team would work with agencies to ensure that the project would not impact any State refuges, sanctuaries, or critical habitat areas, federal refuges or wilderness areas, or national parks. Wetlands and other protected areas.A Corps Engineers Wetlands Nationwide Permit could be needed to conduct geotechnical work and install future turbines, depending on if the work is within wetlands. Archaeological and historical resources.Compliance with the National Historic Preservation Act and consultation with the State Historic Preservation Officer would be conducted prior to construction of the wind turbines. Alaska Village Electric Cooperative, Inc. Stebbins Wind Feasibility Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 13 of 18 7/21/2010 Land development constraints.Negotiations with the Corporation to obtain site control would be needed if the study finds that the wind turbines are feasible.Since the location of the existing met tower has been accepted by the community and since both communities support this project, it is expected that there will not be any land issues associated with the project.An existing road connects the two villages, and an intertie is being proposed that would follow the road alignment.It would be necessary to install distribution lines from the wind turbine site to the road and intertie. Aviation considerations.The turbines would be located away from the active airport and outside any important operational aircraft area; however, a no hazard determination would be sought from FAA once the project is considered feasible and the turbine location and type has been determined. Visual, aesthetics impacts.The existing met tower is between Stebbins and St. Michael. Because it is likely that the turbines would be constructed between the communities, it is likely that there would be little concern for visual or aesthetic impacts.AVEC would conduct community meetings to discuss visual impacts and how they could be minimized, in the unlikely event that visual issues arise. 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 Total anticipated project cost, and cost for this phase/requested grant funding/matching funds.AVEC plans to conduct a study,prepare the design, and complete permitting to assess the possibility of using wind power near Stebbins and St. Michael. This work will cost $145,000. AVEC requests $137,750 from AEA. AVEC will provide $7,250 (5% match)as a cash contribution. Identification of other funding sources.If the wind resource proves suitable, the next phase of this project would be final design and construction. Although it is difficult to determine without an assessment of the resource and what type, size, and number of turbines would be needed, AVEC expects that final design would cost $4.0 million. It is possible that the funding for this work could come from a USDA Rural Utility Service program, the Denali Commission, or another grant program. Alaska Village Electric Cooperative, Inc. Stebbins Wind Feasibility Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 14 of 18 7/21/2010 Projected capital cost of proposed renewable energy system/projected development cost of proposed renewable energy system.The final phase of this project would be Design and Construction and Commissioning (Phase IV). AVEC estimates that this phase could cost $4.0 million assuming installation of four 100 kW wind turbines or two 300 kW wind turbines. AVEC would provide a 10% cash match ($400,000)for the construction project. 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.) The met tower would require monthly monitoring and data management.It is expected that this would cost $700 total for the year that the met tower is erected.The cost will be funded by this grant award. 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 Identification of potential power buyer(s)/customer(s).AVEC, the existing electric utility serving Stebbins and St. Michael,is a member-owned cooperative electric utility and typically owns and maintains the generation, fuel storage, and distribution facilities in the villages it serves. Stebbins includes about 86 households and community facilities, including a health clinic, city office, tribal council office, and water treatment plant, which would continue to purchase power from AVEC. St. Michael, which could be connected to this project via intertie in the near future, has about 97 households and community facilities. Potential power purchase/sales price/ Proposed rate of return from grant-funded project. Based on assumptions of saving 65,421 gallons of fuel per year, a 20 year life, and an installed cost of $4 million, the payback period on this project would be 14.9 years. 4.4.4 Project Cost Worksheet Complete the cost worksheet form which provides summary information that will be considered in evaluating the project. Please see cost/benefit sheet under Tab C. Alaska Village Electric Cooperative, Inc. Stebbins Wind Feasibility Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 15 of 18 7/21/2010 SECTION 5–PROJECT BENEFIT Explain the economic and public benefits of your project.Include direct cost savings, and how the people of Alaska will benefit from the project. The benefits information should include the following: Potential annual fuel displacement (gal and $) over the lifetime of the evaluated renewable energy project Anticipated annual revenue (based on i.e. a Proposed Power Purchase Agreement price, RCA tariff,or cost based rate) Potential additional annual incentives (i.e. tax credits) Potential additional annual revenue streams (i.e. green tag sales or other renewable energy subsidies or programs that might be available) Discuss the non-economic public benefits to Alaskans over the lifetime of the project Potential annual fuel displacement:The possible displacement of diesel fuel used for village power generation in Stebbins could be 65,420 gal/yr and 1,308,420 gallons over the project’s lifetime (assuming 80% turbine availability). This project could save $233,106 during its first full year of operation (expected to be 2014). AVEC is currently planning a new 10-mile long, 15 kV overhead primary power transmission line from Stebbins to Saint Michael, with a prime power plant in Stebbins.A wind project in Stebbins would benefit both Stebbins and St. Michael, when the intertie is constructed. Anticipated annual revenue/Potential additional annual incentives/Potential additional annual revenue streams.Because this project is in the feasibility and conceptual design stage, revenue and incentives are unknown. Non-economic public benefits.The anticipated benefits of installation of the wind turbines would include the reduction of the negative impact of the cost of energy by providing a renewable energy alternative.This project could help stabilize energy costs and provide long- term socio-economic benefits to village households.Locally-produced, affordable energy would empower community residents and could help avert rural to urban migration, which would help larger Alaska communities This project would help AVEC to determine potential locations to be served by recovered heat. If determined feasible, the terms of recovered heat agreements would be negotiated with entities to be served. Once the wind project is constructed and heat recovery systems are in place, costs to operate important community facilities (e.g. water treatment plants, schools, washeterias, etc.) would be decreased, enabling managing entities (city governments, tribes, school districts) to operate more economically. This project would help with the understanding of the wind resource in western Alaska. Data acquired from this study assist nearby communities, like St. Michael, and Kotlik, to understand their wind resource.Data collected from this project could also be used to improve the accuracy of the State High Resolution Wind Map. Stabilized energy costs would allow community entities, including the Cities and Tribes to plan and budget for important community infrastructure listed in the Stebbins Local Economic Development Plan (Kawerak, April 2004) including water and sewer improvements, freightcommunity housing, and dumpsite improvements (community priorities 1, 2, and 3). Other priority infrastructure Alaska Village Electric Cooperative, Inc. Stebbins Wind Feasibility Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 16 of 18 7/21/2010 could be constructed in St. Michael including more housing, roads, and a public safety building (community priorities #1, 2, and 3 in the St. Michael Local Economic Development Plan [Kawerak, April 2004]).In addition, wind power generation is a goal of both communities’ economic plans, and installation of a wind project would help the communities realize an important goal. Stebbins and St. Michael residents’health and safety would benefit from the environmental benefits resulting from a reduction of hydrocarbon use, including: Reduced potential for fuel spills or contamination during transport,storage, or use (thus protecting vital water and subsistence food sources) Improved air quality Decreased contribution to global climate change from fossil fuel use The wind turbine would provide a visual landmark for sea, air, and overland travelers, which would help navigation in the area.Wind turbine orientation and rotor speed would provide visual wind information to residents. 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 As a local utility that has been in operation since 1968, AVEC is completely able to finance, operate, and maintain this project for the design life. AVEC has capacity and experience to operate this project. AVEC has operating wind projects throughout the state and is very familiar with planning, constructing, operating, and maintaining wind systems. Business Plan Structures and Concepts which may be considered:The wind turbines would be incorporated into AVEC’s power plant operation. Local plant operators provide daily servicing. AVEC technicians provide periodic preventative or corrective maintenance and are supported by AVEC headquarters staff, purchasing, and warehousing. How O&M will be financed for the life of the project:The costs of operations and maintenance would be funded through ongoing energy sales to the villages. Operational issues which could arise:There are no known operational issues. Operating costs:AVEC’s existing NW 100-A wind turbines at other sites require two maintenance visits a year.Each visit costs AVEC $1,750 per turbine; therefore, maintenance visits currently cost AVEC $3,500 per turbine per year. The new Northwind 100-B model requires only one maintenance visit each year. Therefore, the four new turbines at Stebbins could require a combined annual maintenance cost of $7,000. Alaska Village Electric Cooperative, Inc. Stebbins Wind Feasibility Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 17 of 18 7/21/2010 Commitment to reporting the savings and benefits:AVEC is fully committed to sharing the savings and benefits accrued from this project information with their shareholders and information regarding project savings and benefits with AEA. SECTION 7 –READINESS & COMPLIANCE WITH OTHER GRANTS Discuss what you have done to prepare for this award and how quickly you intend to proceed with work once your grant is approved. Tell us what you may have already accomplished on the project to date and identify other grants that may have been previously awarded for this project and the degree you have been able to meet the requirements of previous grants. Work under this award could be initiated immediately, since the met tower is already installed and is currently monitoring the wind regime. Once funding is known to be secured, AVEC would seek contractors to complete the geotechnical work before winter.Work that can be completed before the wind study is completed would occur over the winter, including analysis of current cost of energy and future market and the economic and financial analyses. Once the wind study is completed, the conceptual design and permitting would occur. With Denali Commission funding, AVEC installed the met tower that is currently operating between Stebbins and St. Michael. Also with Denali Commission funding, AVEC prepared a Conceptual Design Addendum in June 2007. The addendum updated critical elements of the CDR that could be used for design of the proposed bulk fuel storage and power generation facilities. Important to this grant application, the addendum reexamined the potential for and included a cost estimate for wind energy (2 to 4 turbines), a 10 mile intertie between Stebbins and St. Michael, and heat recovery to serve the school, the City’s water treatment plant and / or the Corporation’s office and store. SECTION 8–LOCAL SUPORT Discuss what local support or possible opposition there may be regarding your project. Include letters of support from the community that would benefit from this project. The Stebbins Local Economic Development Plan (Kawerak, April 2004)shows support for this project.Development Goal 2 lists obtaining more buildings and services for the community for economic growth. One of the objectives (D) under this goal is to develop alternative and cheaper forms of energy to improve the cost of living by developing wind generator, solar or thermal energies as an alternative energy source. The St. Michael Local Economic Development Plan (Kawerak, April 2004)shows support for this project.Development Goal 3 list protecting environmental conditions for a healthier community.One of the objectives under this goal (B) is to keep the environment clean and use less energy to preserve our natural resources by developing wind power and solar power to power community storage freezers. Letters of have been received from the City of Stebbins, the Stebbins Native Village, and the Stebbins Native Corporation in support of this project. In addition, support letters have been Alaska Village Electric Cooperative, Inc. Stebbins Wind Feasibility Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 18 of 18 7/21/2010 received from the St. Michael Tribal Council and the St. Michael village corporation.(See Tab D.) 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 AVEC plans to conduct a feasibility analysis, resources assessment,conceptual design, and permitting to assess the possibility of using wind power in Stebbins.This work would cost $145,000. AVEC requests $137,750 from AEA. AVEC will provide $7,250 as cash contribution. A detail of the grant budget follows. Also see Tab 4. Milestone or Task Grant Funds AVEC Cash Match TOTALS 1.Project scoping and contractor solicitation $1,900 $100 $2,000 2.Detailed resource assessment (includes monitoring and reporting)$26,600 $1,400 $28,000 3.Identification and resolution of land issues $4,750 $250 $5,000 4.Detailed analysis of current cost of energy and future market $9,500 $500 $10,000 5.Detailed economic and financial analyses $4,750 $250 $5,000 6.Conceptual business & operations plan $1,900 $100 $2,000 7.Conceptual design and costs estimate (includes geotechnical work)$78,850 $4,150 $83,000 8.Permitting and environmental analysis $6,650 $350 $7,000 9.Final report and recommendations $2,850 $150 $3,000 TOTALS $137,750 $7,250 $145,000 To date, AVEC has used other funding to obtain land and permits to install a met tower between Stebbins and St. Michael. If the wind resource proves to be suitable, AVEC would seek funding to construct turbines in Stebbins/St. Michael. AVEC would provide a 10% cash match to any obtained funding. Tab A Resumes V3 Energy, LLC Douglas Vaught, P.E. 19211 Babrof Drive Eagle River, AK 99577 USA tel 907.350.5047 email dvaught@mtaonline.net Consulting Services : • Wind resource analysis and assessment, including IEC 61400-1 3 rd ed. protocols • Wind turbine siting, FAA permitting, and power generation prediction • Wind-diesel power plant modeling and configuration design • Cold climate and rime icing environment analysis of wind turbine operations • Met tower/sensor/logger installation and removal (tubular towers 10 to 60 meters in height) Partial List of Clients: • Alaska Village Electric Cooperative • NANA Pacific, LLC • enXco Development Corp. • Bristol Bay Native Corp. • Naknek Electric Association • Kodiak Electric Association • Barrick Gold • Alaska Energy Authority • North Slope Borough • Manokotak Natives Ltd. Representative Projects: • Alaska Village Electric Cooperative. Site selection, FAA permitting, met tower installation, data analysis/wind resource assessment, turbine energy recovery analysis, rime icing/turbine effects analysis, powerplant system modeling. Contact information: Brent Petrie, Key Accounts Mgr, 907-565-5358 • Kodiak Electric Association. Met tower installation, data analysis and modeling for Alaska’s first utility scale turbines (GE 1.5sle) on -line July 2009. Contact information: Darron Scott, CEO, 907 -486-7690. • NANA Pacific, LLC. Site reconnaissance and selection, permitting, met tower installation, wind resource assessment and preliminary power system modeling for Northwest Arctic Borough villages and Red Dog Mine. Contact information: Jay Hermanson, Program Manager, 907-339-6514 • enXco Development Corp. Met tower installation documentation, site reconnaissance , analysis equipment management for utility-sca le wind projects, including Fire Island near Anchorage. Contact information: Steve Gilbert, Alaska Projects Manager, 907-333-0810. • Naknek Electric Association. Long -term wind resource assessment at two sites (sequentially), including site selection, met tower installation, data analysis, turbine research, performance modeling, and project economic analysis. Contact information: Donna Vukich, General Manager, 907-246-4261 • North Slope Borough (with Powercorp Alaska, LLC). Power system modeling, site reconnaissance and selection, FAA permitting, wind turbine cold climate and icing effects white paper. Contact information: Kent Grinage, Public Works Dept., 907-852-0285 Recent Presentations: • Wind Power Icing Challenges in Alaska: a Case Study of the Native Village of Saint Mary’s, presented at Winterwind 2008, Norrköping, Sweden, Dec. 8, 2008. Tab B Cost Worksheet Renewable Energy Fund Round 4 Project Cost/Benefit Worksheet RFA AEA11-005 Application Cost Worksheet Page 1 7-21-10 Stebbins Wind Feasibility Please note that some fields might not be applicable for all technologies or all project phases.The level of information detail varies according to phase requirements. 1.Renewable Energy Source The Applicant should demonstrate that the renewable energy resource is available on a sustainable basis. Annual average resource availability.Wind Class 5 (est.); 33% gross turbine CF (est.) Unit depends on project type (e.g. windspeed, hydropower output, biomasss fuel) 2.Existing Energy Generation and Usage a)Basic configuration (if system is part of the Railbelt1 grid, leave this section blank) i.Number of generators/boilers/other 6 generators in Stebbins and St Michaels ii.Rated capacity of generators/boilers/other Stebbins: 499 kW, 314 kW and 207 kW St. Michael: 271 kW, 350 kW, 250 kW iii.Generator/boilers/other type Diesel fired generators iv.Age of generators/boilers/other Stebbins: 499 kW (3 years), 305 kW (4 years), and 250 kW (17 years-OH in 2000); St. Michael:499 kW (5 years), 314 kW (10 years -OH in 2006)and 207 kW (15 years -OH in 2006). v.Efficiency of generators/boilers/other 13.29kW/gal (Stebbins)/14.79 (St. Michael) (2009) b)Annual O&M cost (if system is part of the Railbelt grid, leave this section blank) i.Annual O&M cost for labor 140,000 (labor and non-labor combined) ii.Annual O&M cost for non-labor N/A c)Annual electricity production and fuel usage (fill in as applicable)(if system is part of the Railbelt grid, leave this section blank) i.Electricity [kWh]1,405,729 (Stebbins); 1,850,895 (St. Michael) (2009) ii.Fuel usage Diesel [gal]230,853 gal (105,745 gal in Stebbins/125,108 gal in St. Michael; 2009 AVEC operations data) Other iii.Peak Load 300 kW (2008) iv.Average Load 160 kW (2008) v.Minimum Load vi.Efficiency 13.29kW/gal (Stebbins)/14.79 (St. Michael) (2009); 14.14 kW/gal combined vii.Future trends d)Annual heating fuel usage (fill in as applicable) i.Diesel [gal or MMBtu]N/A ii.Electricity [kWh] iii.Propane [gal or MMBtu] 1 The Railbelt grid connects all customers of Chugach Electric Association, Homer Electric Association, Golden Valley Electric Association, the City of Seward Electric Department, Matanuska Electric Association and Anchorage Municipal Light and Power. Renewable Energy Fund Round 4 Project Cost/Benefit Worksheet RFA AEA11-005 Application Cost Worksheet Page 2 7-21-10 iv.Coal [tons or MMBtu] v.Wood [cords, green tons, dry tons] vi.Other 3.Proposed System Design Capacity and Fuel Usage (Include any projections for continued use of non-renewable fuels) a)Proposed renewable capacity (Wind, Hydro, Biomass, other) [kW or MMBtu/hr] Wind, 400 kW capacity expected (NW100 turbine) b)Proposed annual electricity or heat production (fill in as applicable) i.Electricity [kWh]925,000 kWh (80% avail.) ii.Heat [MMBtu] c)Proposed annual fuel usage (fill in as applicable) i.Propane [gal or MMBtu] ii.Coal [tons or MMBtu] iii.Wood [cords, green tons, dry tons] iv.Other 4.Project Cost a)Total capital cost of new system $4.0M ($10,000/kW installed) b)Development cost c)Annual O&M cost of new system $20,860 (wind only; $0.022/kWh, 1st yr, 2.5%↑/yr)) d)Annual fuel cost 5.Project Benefits a)Amount of fuel displaced for i.Electricity 65,420 gal/yr (80% turbine avail.) ii.Heat iii.Transportation b)Current price of displaced fuel $3.01/gal (ISER,Stebbins 2010) c)Other economic benefits d)Alaska public benefits 6.Power Purchase/Sales Price a)Price for power purchase/sale 7.Project Analysis a)Basic Economic Analysis Project benefit/cost ratio 0.88 Payback (years)14.9 years Tab C Budget Form Renewable Energy Fund Grant Round IV Grant Budget Form 7-21-10 STEBBINS WIND FEASIBILITY Milestone or Task Anticipated Completion Date RE-Fund Grant Funds Grantee Matching Funds Source of Matching Funds: Cash/In-kind/Federal Grants/Other State Grants/Other TOTALS 1.Project scoping and contractor solicitation Sept 15, 2011 $1,900 $100 Cash $2,000 2.Detailed resource assessment (includes monitoring and reporting) Oct 31, 2012 $26,600 $1,400 Cash $28,000 3.Identification and resolution of land issues June 1, 2010 $4,750 $250 Cash $5,000 4.Detailed analysis of current cost of energy and future market Mar 30, 2012 $9,500 $500 Cash $10,000 5.Detailed economic and financial analyses Aug 30, 2012 $4,750 $250 Cash $5,000 6.Conceptual business & operations plan Oct 31, 2012 $1,900 $100 Cash $2,000 7.Conceptual design and costs estimate (includes geotech work) Nov 1, 2012 $78,850 $4,150 Cash $83,000 8.Permitting and environmental analysis Dec 31, 2012 $6,650 $350 Cash $7,000 9.Final report and recommendations Dec 31, 2012 $2,850 $150 Cash $3,000 TOTALS $137,750 $7,250 $145,000 Budget Categories: Direct Labor & Benefits $$4,000 $4,000 Travel & Per Diem $$3,000 $3,000 Equipment $$$ Materials & Supplies $$250 $250 Contractual Services $137,750 $$137,500 Construction Services $$$ Other $$$ TOTALS $137,750 $7,250 $145,000 Tab D Letters of Support Tab E Authorized Signers Form Tab F Authority