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HomeMy WebLinkAboutEyak Cordova Biomass Grant Application4 Renewable Energy Fund Grant Application Round IV AEA 11-005 Application Page 1 of 37 09/10/2010 Application Forms and Instructions The following forms and instructions are provided to assist you in preparing your application for a Renewable Energy Fund Grant. An electronic version of the Request for Applications (RFA) and the forms are available online at: http://www.akenergyauthority.org/RE_Fund-IV.html Grant Application Form GrantApp4.doc Application form in MS Word that includes an outline of information required to submit a complete application. Applicants should use the form to assure all information is provided and attach additional information as required. Application Cost Worksheet Costworksheet4.doc Summary of Cost information that should be addressed by applicants in preparing their application. Grant Budget Form GrantBudget4.doc A detailed grant budget that includes a breakdown of costs by milestone and a summary of funds available and requested to complete the work for which funds are being requested. Grant Budget Form Instructions GrantBudgetInstructions4.pdf Instructions for completing the above grant budget form. • If you are applying for grants for more than one project, provide separate application forms for each project. • Multiple phases for the same project may be submitted as one application. • If you are applying for grant funding for more than one phase of a project, provide milestones and grant budget for completion of each phase. • If some work has already been completed on your project and you are requesting funding for an advanced phase, submit information sufficient to demonstrate that the preceding phases are satisfied and funding for an advanced phase is warranted. • If you have additional information or reports you would like the Authority to consider in reviewing your application, either provide an electronic version of the document with your submission or reference a web link where it can be downloaded or reviewed. REMINDER: • Alaska Energy Authority is subject to the Public Records Act AS 40.25, and materials submitted to the Authority may be subject to disclosure requirements under the act if no statutory exemptions apply. • All applications received will be posted on the Authority web site after final recommendations are made to the legislature. • In accordance with 3 AAC 107.630 (b) Applicants may request trade secrets or proprietary company data be kept confidential subject to review and approval by the Authority. If you want information is to be kept confidential the applicant must: o Request the information be kept confidential. o Clearly identify the information that is the trade secret or proprietary in their application. o Receive concurrence from the Authority that the information will be kept confidential. If the Authority determines it is not confidential it will be treated as a public record in accordance with AS 40.25 or returned to the applicant upon request. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 2 of 37 9/10/2010 SECTION 1 – APPLICANT INFORMATION Name (Name of utility, IPP, or government entity submitting proposal) Native Village of Eyak Type of Entity: Federally Recognized Tribe Mailing Address PO Box 1388 Cordova, AK 99574 Physical Address 110 Nicholoff Way Cordova, AK Telephone 907.424.7738 Fax 907.424.7739 Email 1.1 APPLICANT POINT OF CONTACT / GRANTS MANAGER Name Angela Arnold Title Executive Director Mailing Address PO Box 1388 Cordova, AK 99574 Telephone 907.424.7738 Fax 907.424.7739 Email 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 or No 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 or No 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 or No 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 or No 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 37 9/10/2010 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) Cordova Community Biomass Feasibility Study 2.2 Project Location – Include the physical location of your project and name(s) of the community or communities that will benefit from your project. The biomass feasibility study will take place in the community of Cordova, Alaska. The local community will gain the most benefit from the project. Additionally, the entire State of Alaska may gain cumulative beneficial impacts through the economic effects of the study and the information obtained from it. We will use the energy analysis portion of the feasibility study to develop a community energy audit protocol for the state, which can be applied in communities throughout Alaska. We will attempt to use in-state contractors for the feasibility study to keep the economic benefits in Alaska. 2.3 PROJECT TYPE Put X in boxes as appropriate 2.3.1 Renewable Resource Type Wind X Biomass or Biofuels Hydro, including run of river Transmission of Renewable Energy Geothermal, including Heat Pumps Small Natural Gas Heat Recovery from existing sources Hydrokinetic Solar Storage of Renewable 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. We are proposing to conduct a biomass feasibility study for the utilization of waste wood from the community to heat one or a few public buildings. Astronomical heating costs are inspiring new creativity in planning for sustainable and affordable energy sources for our community in Cordova, Alaska. We have collaborated as a community to develop solutions for our energy needs. Affordable fuel sources have been identified, chief among them the waste cardboard that is currently taken to the landfill and the wood waste generated at the community burn pile. Historically, the community has squandered these potential energy sources by burning them in an open pit. The burn pile will better serve the community when transitioned from a community dump into local-source heating fuel. The community will also save valuable landfill space by converting waste cardboard into a fuel source. The possibility of “road farming” of alder on Eyak Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 4 of 37 9/10/2010 Corporation land to the east of the city will also be evaluated. Thanks to recent advancements in LIDAR technology, the US Forest Service (USFS) has developed detailed vegetation maps of the Copper River delta region. The mapping imagery will be available to the public by mid December 2010. With a resolution of 5 meters per pixel the maps will allow us to accurately assess the availability of fuel crops in the region. The Eyak Corporation land is situated in an ideal location for this process. It primarily consists of a gravel bed layer and predominantly flat terrain, with good road access. The purpose of this project is to develop a system that will take advantage of the valuable resources currently being underutilized. The wood and cardboard waste will become fuel for a biomass boiler to heat one of our community buildings such as the city baler, pool, hospital or school. We need financial assistance to fully develop this project, which can then become self-sustaining. The first step in a renewable energy project such as this is to conduct a feasibility study that will examine our community’s energy needs and identify areas where improvements can be made. The feasibility study will look at how and where energy is being used and examine the available BTUs that can be generated by our waste stream. We must also conduct energy audits on the potential buildings to determine which building would be the most efficient and economical candidate for a waste-wood boiler. A community-wide energy audit has not been done in Alaska before, and so we can use this study to create protocol for conducting community energy audits that can be applied to other communities throughout Alaska. This information will be analyzed to determine which building would be the best fit for the project. We must also determine the heat load available so that we can then examine potential buildings and pair the current waste heat energy with a building of a comparable load. The study will also investigate the potential methods of fuel treatment and system equipment and create parameters for the system design. The design will determine required purchases – a boiler, wood chipper and other components – and identify required integration work. The City of Cordova owns and operates the burn pile and has endorsed this project. The Cordova School District, a potential beneficiary of the project, is also very supportive. See letters of support on pages 32-33. 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.)   This project will be extremely valuable to the community, both economically and culturally. The feasibility study will give us an overall picture of our community’s energy usage. This is an important first step that is often overlooked in renewable energy projects. It is vital to understand our community’s energy consumption when working towards supplementing our community’s energy needs with local resources. The community will save money through the reduction of heating costs by using affordable biomass instead of expensive heating oil. We will use the wood generated at the community burn pile and the community’s waste cardboard for fuel. These are resources that would otherwise be wasted in a time of great need. Through this biomass heating project, we can provide greater energy security for our community, as the demand for energy here is greater than the supply. By diversifying our energy sources, we will be less reliant on foreign oil. Other benefits include the increase in local employment opportunities. Temporary jobs will be created during the feasibility, design and construction phases of the project and permanent jobs will be created to process the waste wood and cardboard and operate and maintain the boiler. In addition, we hope to use in-state contractors for the feasibility portion of the project. The biomass waste heat project will also be very beneficial for the environment. The biomass boiler system will divert consumption from the oil-based heating systems thus reducing fossil fuel combustion and decreasing greenhouse gas emissions. In addition, biomass heating is considered carbon neutral. The biomass material extracts the same amount of carbon dioxide Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 5 of 37 9/10/2010 from the atmosphere during its growth as it releases into the atmosphere during combustion. Therefore, biomass-fired systems make a major contribution to climate stability. The wood boilers currently available are highly efficient and have low emissions. By generating energy from locally available fuels, this project will be an important means for our community to transition to clean, renewable energy sources. We will be diverting waste away from the burn pile and landfill, improving air and water quality. By eliminating the burn pile we will decrease harmful air pollutants and remove an aesthetic eyesore. Locally produced fuel from renewable energy creates employment opportunities, adds to cultural independence and self-sufficiency, and builds local pride and ownership. The project will also benefit rural villages throughout the state through the establishment of an energy audit protocol for Alaska. Community energy audits are an often overlooked necessity in the integration of renewable resources into power systems. A community energy audit provides a comprehensive understanding of where energy and heat sinks exist, and cost effective ways to reduce those sinks so that communities get the most return on their investments into future renewable energy systems. We are proposing the community energy audit as part of our biomass feasibility study to ensure that any heating system we develop will provide Cordova the most benefit for the least cost. Such a comprehensive study of energy use has not been done in Alaska. In light of Alaska’s unique energy and heating needs, we propose including the development of a protocol for community-scale energy audits in rural Alaska as part of this feasibility study so that other villages with astronomical heating and energy costs can benefit from our experience. We have been in contact with the Alaska Center for Energy and Power, and they are very excited about the possibility of developing community energy audit protocol for Alaskan towns and villages.   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. Funding is needed to perform a feasibility study to identify the community’s energy load, develop a community energy audit protocol, and identify potential uses for Cordova’s waste wood. The feasibility study will examine and compare the economics of various sites and systems and the conceptual design which will estimate the costs for building the facility. The Native Village of Eyak is requesting funding from the Alaska Energy Authority for these tasks. The feasibility study, including the community energy audit, is estimated to cost about $150,000. Another $39,000 will be needed to hire a part time project manager to oversee the project. Including indirect charges, the project cost total is the amount requested in this application: $245,065. Other contributions include the in-kind costs of project support such as providing local transportation and meeting rooms, which has an estimated value of $3,000. 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. $245,065.00 2.7.2 Other Funds to be provided (Project match) $3,000 2.7.3 Total Grant Costs (sum of 2.7.1 and 2.7.2) $248,065.00 Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 6 of 37 9/10/2010 Project Costs & Benefits (Summary of total project costs including work to date and future cost estimates to get to a fully operational project) 2.7.4 Total Project Cost (Summary from Cost Worksheet including estimates through construction) $ 1,800,000 2.7.5 Estimated Direct Financial Benefit (Savings) $673,675 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.) $ 100,00 (money saved in other communities by developing community energy audit protocol) Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 7 of 37 9/10/2010 SECTION 3 – PROJECT MANAGEMENT PLAN Describe who will be responsible for managing the project and provide a plan for successfully completing the project within the scope, schedule and budget proposed in the application. 3.1 Project Manager Tell us who will be managing the project for the Grantee and include contact information, a resume and references for the manager(s). If the applicant does not have a project manager indicate how you intend to solicit project management support. If the applicant expects project management assistance from AEA or another government entity, state that in this section. The Native Village of Eyak will manage the grant. Heath Kocan will be the part time project manager in charge of soliciting contractors and monitoring their progress once an appropriate contractor has been selected. Heath Kocan has experience in selecting and hiring contractors, personnel management, grant management, and biomass heating. He is currently performing a wind power feasibility study of the Cordova area for the Native Village of Eyak. The Native Village of Eyak also has a solid management team to assist in the project. Angela Arnold is the executive director of NVE and will insure the project will be implemented according to schedule and budget. Scott Madison, Capital Projects Coordinator has a substantial background in managing construction projects and hiring contractors. . See attached resumes on pages 19-23. 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.) Once the grant has been awarded we will issue the Request For Proposals (RFP). We anticipate issuing the RFP in July 2011. We will give contractors one month to prepare a response for the RFP. We will meet with the Selection committee in August 2011 and select an appropriate contractor while following our procurement policies. The Biomass Feasibility Study will begin soon thereafter. We will give the contractor 1-2 months to conduct site visits and gather community information. The report will be expected 2-3 months after field work has been completed. We anticipate the feasibility study to be completed within 6 months of issuing the RFP, tentatively by December 2011. 3.3 Project Milestones Define key tasks and decision points in your project and a schedule for achieving them. The Milestones must also be included on your budget worksheet to demonstrate how you propose to manage the project cash flow. (See Section 2 of the RFA or the Budget Form.) Biomass Feasibility Study: Contractor Solicitation - We will issue the RFP once the grant has been awarded. We will select a contractor one month after issuing the RFP. We will follow our procurement policy in selecting a contractor, and hope to find a single Alaskan contractor capable of completing both the energy use survey and biomass analysis portions of the feasibility study. We also plan to include the development of a protocol for community energy audits as part of the RFP, which will allow other communities throughout Alaska to maximize their returns on renewable energy investments. Information Collection - Generally, the fist step in a feasibility study is to look at the current energy system. This Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 8 of 37 9/10/2010 will entail collecting all the required information for the study including vendor contacting, energy sources, energy costs, etc. It is expected that the Contractor will need at least a three-year energy bill history and, if possible, previous energy audits, architectural drawings and detailed lighting diagrams for the chosen municipal buildings. Site visits will be conducted, as well as requests for data and participation in the data- collecting process. Measurements will also be conducted to collect non-existing data on the buildings and other energy consumption devices. Resource Data Analysis - The Contractor will review available resource data, such as data previously assembled regarding biomass resources and data on the municipal waste sources of biomass. Some further resource data collection may be required. The Contractor will assist in the analysis of resource data and determinations for fuel supply to various key sites within the community. The analysis will compare fuels by delivered cost, quantity, quality, availability, and reliability. Energy Analysis - After all data is received, an energy-efficiency analysis of the entire community will be performed. This will determine whether energy efficiency improvements need to be performed before the system is installed. Energy-saving approaches will be discussed with the CREW and local stakeholders. Technology and techniques for the most beneficial energy-saving measures will also be determined. Site Selection and Load Evaluation - The most promising option for the location of a biomass energy facility will be determined. The specific matching of resources and energy loads will provide the best economic fit. The site selection will be based on the buildings energy load and efficiency rating. Steam distribution and electrical interface issues will be considered. Final analysis will be completed for a site that presents the most obvious economic opportunity. Technology Evaluation - Once the site has been selected, the various technology options will be examined. The options will include technologies such as cofired boilers/steam turbines, anaerobic digestion, biomass gasifiers, and combustors for fire-tube boilers. Capital costs, installed costs, and delivery times will be roughly estimated. Conceptual designs will be evaluated. The designs will include mass and energy balances required to determine economics. Contact with the local utility will be made to identify any incentives for distributed generation. Best-case and worst-case conceptual designs will be presented. The best-case design will focus on a high rate of return; the worst-case design will focus on other criteria beneficial to the communities while achieving a lower rate of return. It is expected that conventional reliable technology such as stokers or fluidized- bed boilers will prevail in the analysis. However, economically attractive emerging technologies such as gasification will be considered specifically for fueling diesel generators. Engineering Economic Analysis - An engineering economic feasibility analysis will be completed. The environmental permitting aspect of the project will be completed under this task, as pollution control will have a significant effect on the economics. The analysis will be based on savings from current fossil fuel and electricity costs. Forecasts for future costs will be based on escalation rates provided by suppliers. The analysis will include estimates for labor, operation, and maintenance. The analysis will be presented as a yearly cash flow, with applicable financing. Savings will be used to pay back the financing costs. Reporting - Upon completion of the analyses, recommendations for equipment updates to receive Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 9 of 37 9/10/2010 paybacks in under a 5-year period will be reported. In addition, a best-practices protocol for conducting community-wide energy audits in Alaska will be developed. A final report including all the items listed above will be generated and delivered 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 Native Village of Eyak will manage the grant. A project manager will be Heath Kocan. He will be in charge soliciting contractors and managing them once an appropriate contractor has been selected. The Native Village of Eyak has a solid management team. Angela Arnold is the executive director of NVE and will insure the project will be implemented according to schedule and budget. Scott Madison, Projects Coordinator has a substantial background in managing construction projects and hiring contractors. We have consulted with technical experts while drafting this grant proposal to gain a better understanding of what it would take to implement a feasibility study. Arctic Technical Services was contacted concerning community energy audits. Your Clean Energy was also contacted in regards to the energy audit portion of the feasibility study. NVE has also been in contact with the Energy and Environmental Research Center at the University of North Dakota concerning their biomass feasibility study done for the Native village of Port Graham. Additionally, NVE has been in contact with the Alaska Center for Energy and Power, who have extensive experience in testing and developing renewable energy projects throughout Alaska. ACEP is interested in potentially working with us. NVE has also been in contact with the University of Alaska Fairbanks to discuss the assistance they can offer with assessing our biomass resources. 3.5 Project Communications Discuss how you plan to monitor the project and keep the Authority informed of the status. The project manager (PM) will be responsible for overseeing the day-to-day tasks associated with the study. The PM will keep detailed records and report on the progress made on important project milestones. These records will be available for the Alaska Energy Authority to view at any time. The project manager will also be involved in the AEA biomass working group and report status updates to that forum. This will allow a tight networking of similar projects across Alaska. We have an approved accounting and management system and meet the requirements of a Mature Contractor under the Indian Self Determination Act and have operated our own self governance programs through a government to government contact with the United States for many years. All transactions will be approved and processed according to our standard policies and procedures. Progress reports will also be submitted to the Alaska Energy Authority that includes the status of the project, the funds expended, and the funds remaining in the budget. We conduct an annual single audit of all the operations of the Native Village of Eyak. This report will be available to the Alaska Energy Authority. We will also submit all required grant financial reports in a timely manner as outlined in the grant conditions. 3.6 Project Risk Discuss potential problems and how you would address them. It is possible that the oil prices will decrease enough that a biomass heating system will not be financially viable at this time. However, we feel that the price of fossil fuels will likely continue to fluctuate making biomass heat an investment in energy security for a stable and sustainable future. It is also possible that the feasibility analysis will conclude that a biomass boiler is not financially viable. If that is the case the Native Village of Eyak will divert our resources elsewhere to find other solutions to meet our energy needs. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 10 of 37 9/10/2010 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. The burn pile is located at Fleming Spit, two miles northwest of town. A preliminary waste stream analysis was performed on the burn pile during the Summer of 2008. The burn pile generates everything from scrap wood to brush. No accurate historical volume data exists for the burn pile; however, during the burn pile assessment conducted in Summer 2008, it was estimated that during peak volumes the burn pile produces approximately 4 cords of firewood per day, or 1,460 cords per year. If there are 14.5 million BTUs per cord then approximately 21.17 billion BTUs are produced per year at the community burn pile. If those BTUs were instead used to heat community buildings at a 75% efficiency rate then approximately 133,000 gallons of oil could be saved. At the current price of $5.00 per gallon, the community could save $667,000 by diverting the burn pile waste to usable fuel. The City of Cordova produces approximately 50-80 bales of cardboard waste per year; each bale consists of approximately 400 pounds of cardboard which gives about 10-16 tons of cardboard waste per year that can be burned for heat. Cardboard contains approximately 6,500 BTUs/lb. Therefore, up to 208 million BTUs of heat are available from the waste cardboard in the community. One 500 pound bale of cardboard is equivalent to the BTUs produced from burning 29.7 gallons of #2 heating fuel. If burning cardboard instead of oil can offset 1,300 gallons, then approximately $6,500 could be saved by burning waste cardboard. Combining the wood and cardboard waste we will save approximately $674,000. These calculations are rough estimates; the exact amount of fuel oil replaced will be dependent on the heating value of the biomass fuel and the efficiency of the wood boiler. See the break even analysis on page 31. One disadvantage of using wood boilers is that they are more expensive to install, own and operate than oil boilers. Fuel savings will likely compensate for these higher costs. 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. Community buildings in Cordova rely on individual oil furnaces for heat. These are older, inefficient heating systems. In 2008, the City of Cordova spent $267,941 in heating expenses for the City operated buildings including the city hall, maintenance building, pool, ski hill, camper park, harbor office, recreation building, and water treatment facilities. In the 2008 fiscal year the Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 11 of 37 9/10/2010 Cordova School District spent $203,960 in heating expenses; $99,826 for the elementary school, $4,458 for the district office, and $99,767 for the high school. To offset these some of these escalating and unsustainable heating expenses, biomass heat is an affordable alternative. This project will provide a first step toward solving our energy crisis and has the potential to save the community millions of dollars in the long term. 4.2.2 Existing Energy Resources Used Briefly discuss your understanding of the existing energy resources. Include a brief discussion of any impact the project may have on existing energy infrastructure and resources. The existing energy resources used are heating oil. Currently all of the City buildings use oil heat. No gallon volumes of purchased fuel oil were available. However with an average fuel price of $5.00 per gallon, the school district purchased about 40,792 gallons. Using the same average fuel cost, the City purchased approximately 53,600 gallons of fuel oil. The district heating project has the potential to decrease the demand for oil and thus decrease fuel costs. The project is intended to supplement, not replace the existing energy infrastructure. The oil-fired system will still be available for peak demand or backup. Using wood and cardboard waste for heat instead of oil could displace approximately 134,700 gallons of fuel oil. This project could potentially provide enough heat to replace the oil for the school district and City buildings. 4.2.3 Existing Energy Market Discuss existing energy use and its market. Discuss impacts your project may have on energy customers. In 2008 the City of Cordova spent approximately $267,941 on heating expenses. The Cordova School District spends approximately $203,690 on fuel costs. Combined, oil heat is costing Cordova at least $471,631 per year. This project would have a positive impact on the City’s energy costs. If the City opted to use biomass heat instead of oil, this project has the potential to displace 134,700 gallons of heating oil. That is enough to replace all of the city’s oil consumption. The City will save money by utilizing affordable biomass fuel instead of astronomically expensive heating oil. Approximately $674,000 dollars worth of heat is generated from our waste products, which could be converted to community savings by replacing heating oil with biomass for energy use. By showing the community the benefits of transitioning to biomass, we hope this program will inspire the community to transition to renewable energy for residential purposes as well. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 12 of 37 9/10/2010 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 First we will need to conduct a feasibility analysis. A feasibility study will determine how much biomass fuel is generated from our waste and examine the heat loads for the different community buildings. We want to install a biomass heating system where we will get the most “bang for our buck.” To determine which buildings have a suitable heat load, we will examine their oil consumption, square footage, and energy efficiency. We will then determine which buildings will be suitable for the wood boiler system. We will contract engineers to design the system. The new biomass system will supplement, not replace, the current oil based system. The fuel for the system will have to be handled and processed. A wood chipper and trained operator will be needed to produce the fuel for the boiler. The operator’s salary and the chipper fuel can be offset by the money saved from the decreased heating costs. This will keep the revenues in the community instead of shipping them overseas. 4.3.2 Land Ownership Identify potential land ownership issues, including whether site owners have agreed to the project or how you intend to approach land ownership and access issues. The City of Cordova owns the community buildings in which we wish to install a district heating system. We won’t know which buildings will be connected to biomass heating system and where it will be placed until the feasibility study is complete. The City is very supportive of this project and has signed a letter showing their support, see page 33. They are very excited to see the outcome of the feasibility study and system design. No other land ownership issues are anticipated. 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 No permits are required for the biomass feasibility study; however, permits will be required when construction activities ensue. Since the City is the government body that issues the local building permit and they are in support of this project, we don’t anticipate problems obtaining the proper building permits. Permits may also be required to install underground heat lines. A ‘Road Opening Permit’ would be required if any of the underground lines require excavation of a city street. Roads under the jurisdiction of the Alaska Department of Transportation would have to be permitted through their office. It is unlikely that we will need an Air Quality permit. The currently available systems have emissions that are below the standards required for an air quality Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 13 of 37 9/10/2010 permit. 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 This phase of the project is only addressing the feasibility of the project. No construction will occur with this phase. The feasibility portion will have no impact on habitats of threatened or endangered species. All wetlands and protected areas will be avoided during the site selection process. No known archaeological or historical resources will be affected with the project. No aesthetic and visual impacts will occur. The project will be beneficial to the environment by attempting to transition the burn pile into a fuel source. The removal of the burn pile will actually improve the air quality of the surrounding area, as it has been documented that plastics have been burned there releasing harmful dioxins into the atmosphere. 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 Biomass Feasibility Study is anticipated to cost approximately $150,000. The total project cost is estimated at $1.8M, however that value may change once the feasibility study has been completed. We are requesting grant funding solely for the feasibility phase. We will get a better estimate of the capital costs and development costs once the feasibility study has been completed. The Native Village of Eyak will supply an in-kind match of $3,000 towards the feasibility phase of the project. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 14 of 37 9/10/2010 4.4.2 Project Operating and Maintenance Costs Include anticipated O&M costs for new facilities constructed and how these would be funded by the applicant. (Note: Operational costs are not eligible for grant funds however grantees are required to meet ongoing reporting requirements for the purpose of reporting impacts of projects on the communities they serve.) There will be no new facilities constructed at this time. However the feasibility study will address the operation and maintenance costs associated with a biomass heating facility. 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 If applicable, this will be addressed in the feasibility study. 4.4.4 Project Cost Worksheet Complete the cost worksheet form which provides summary information that will be considered in evaluating the project. The BTUs available for the project were calculated by estimating the amount of waste biomass in the community. See the break even analysis on page 29. The specific configurations and operation and maintenance costs for each municipal building’s heating system are unknown at this time. This information will be determined during the feasibility study. The annual heating fuel usage was estimated based on the amount of money the City spent towards heating expenses and the average cost of heating fuel. See the City’s and School Districts heating expenses on pages 27 through 28. SECTION 5– PROJECT BENEFIT Explain the economic and public benefits of your project. Include direct cost savings, and how the people of Alaska will benefit from the project. The benefits information should include the following: • Potential annual fuel displacement (gal and $) over the lifetime of the evaluated renewable energy project • Anticipated annual revenue (based on i.e. a Proposed Power Purchase Agreement price, RCA tariff, or cost based rate) • Potential additional annual incentives (i.e. tax credits) • Potential additional annual revenue streams (i.e. green tag sales or other renewable energy subsidies or programs that might be available) • Discuss the non-economic public benefits to Alaskans over the lifetime of the project The district heating project will be very beneficial for Cordova. With a transition to biomass heat, the amount of fuel displaced will be approximately 134,735 gallons annually. At $5.00 a gallon this amounts to an estimated $673,675 in savings. This money saved can be reinvested into the Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 15 of 37 9/10/2010 community. This project will provide much needed employment opportunities in Cordova. This project will also be beneficial to the environment through the reduction of emissions from eliminating the burn pile and reduced oil usage. Fossil Fuel Emissions reduced per year are as follows: Emissions Avoided Oil Diverted (gal) CO (lbs) SO2 (lbs) NOx (lbs) 134,735 673.7 956.6 2,694.7 Emissions factors (lbs/gal) CO - 0.005 SO2 – 0.0071 NOx - 0.02 Emission factors are from EPA AP 42, 1.3 Fuel Oil Combustion 9/98. The elimination of the burn pile will also reduce the emissions of harmful dioxins released from burning plastic. The burn pile audit conducted last summer documented plastic and tire burning. By removing the burn pile we will encourage the community to dispose of their waste properly. In addition, the development of a community energy audit protocol for the state of Alaska will allow other communities to save an estimated $100,000 per community by enabling local leaders to conduct an energy audit themselves rather than hiring an outside contractor to do so. Additional savings per community will be realized from the implementation of the results of each community energy audit. 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 The building that houses the heating system will be selected during the feasibility study. At that time we will also examine the business structure for the facility and how the operation and Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 16 of 37 9/10/2010 maintenance will be financed. Once the feasibility study has been completed this information will be more apparent. We anticipate that once the structure has been constructed, the operation and maintenance will be paid for using the money saved from the heating bill. We will report all savings and benefits as a result of the energy audits and we will report the anticipated savings and benefits determined from the feasibility study. 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. A burn pile assessment was conducted in the Summer of 2008 to identify the items left at the burn pile and to gain a better understanding of the waste generated there. Once completed, a report was compiled documenting the results. A biomass resource assessment was also completed this past summer with funding through the EPA Indian General Assistance Program. The objective of the assessment was to identify and analyze our available biomass resources and provide a preliminary cost analysis for a district heating system. We have already been contacting contractors for quotes. Once the grant is approved we can issue a RFP for the Feasibility Study and begin the selection process. 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 have received an outpouring of local support for this project. Everyone seems to think it is a no-brainer to be using resources that would otherwise be wasted in a time of great need. We do not anticipate any opposition or resistance to cleaning up the burn pile and using those resources in a positive manner. Letters of support from the City of Cordova, and Cordova Electric Co- Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 17 of 37 9/10/2010 operative are included on pages 32-33. 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 We are very committed to this project; our community’s energy security is depending on it. We have been submitting similar grants for this project for several years and are determined now more than ever to get it funded. We are requesting $245,065 in grant funds for the feasibility study costs. We will invest our support into the project though the utilization of our meeting space and transportation. Our in kind contribution amounts to $3,000 in equipment usage. See attached budget work sheets on page 29 and break even analysis on page 31. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 18 of 37 9/10/2010 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. B. Cost Worksheet per application form Section 4.4.4. C. Grant Budget Form per application form Section 9. D. Letters demonstrating local support per application form Section 8. E. An electronic version of the entire application on CD per RFA Section 1.6. F. Authorized Signers Form. G. Governing Body Resolution or other formal action taken by the applicant’s governing body or management per RFA Section 1.4 that: - Commits the organization to provide the matching resources for project at the match amounts indicated in the application. - Authorizes the individual who signs the application has the authority to commit the organization to the obligations under the grant. - Provides as point of contact to represent the applicant for purposes of this application. - Certifies the applicant is in compliance with applicable federal, state, and local, laws including existing credit and federal tax obligations. H. CERTIFICATION The undersigned certifies that this application for a renewable energy grant is truthful and correct, and that the applicant is in compliance with, and will continue to comply with, all federal and state laws including existing credit and federal tax obligations. Print Name Signature Title Date Renewable Energy Fund Grant Application Round IV AEA 11-005 Application Page 24 of 37 09/10/2010 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. Approximately 21.4 billion BTU’s of biomass 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 5 hydro turbines, 4 diesel generators ii. Rated capacity of generators/boilers/other 2 x 500kW Kato/Francis turbine, 1 x 250 kW Kato/Turgo turbine, 2 x 3,000 kW Gilkes turbines, 1 x EMD generator 2.500 kW, 1 x Fairbanks/Morse 2,403 kW generator, 2 x 1,090 kW Caterpillar generator iii. Generator/boilers/other type See above. iv. Age of generators/boilers/other 24 years on diesel generators. 7 years on hydro turbines. All generators and turbines re-built in 2006. v. Efficiency of generators/boilers/other Diesel efficiency is 13.65kWh/gal, 1999-2007 average. b) Annual O&M cost (if system is part of the Railbelt grid, leave this section blank) i. Annual O&M cost for labor $662,390 ii. Annual O&M cost for non-labor $595,486 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] Mean kWh (5 year average) 25,862,001 2005-2009 ii. Fuel usage Diesel [gal] 747,434 gallons (2005-2009 average) without Humpback Creek in service Other Water iii. Peak Load 7,355 kW iv. Average Load 3500 kW average in summer (May 1 – September 30), 2,000 kW average the rest of the year v. Minimum Load 1,400 kW vi. Efficiency Diesel efficiency is 13.65kWh/gal, 1999-2007 average. vii. Future trends Sharply increasing peak demand in summer and decreasing demand in 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 Grant Application Round IV AEA11-005 Grant Application Page 25 of 37 9/10/2010 winter. d) Annual heating fuel usage (fill in as applicable) i. Diesel [gal or MMBtu] Approx. 134,900 gallons ii. Electricity [kWh] Unknown iii. Propane [gal or MMBtu] Unknown iv. Coal [tons or MMBtu] Unknown v. Wood [cords, green tons, dry tons] Unknown 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] Biomass b) Proposed annual electricity or heat production (fill in as applicable) i. Electricity [kWh] ii. Heat [MMBtu] 21.4 million BTU’s 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] 1,460 cords iv. Other 4. Project Cost a) Total capital cost of new system Unknown b) Development cost Unknown c) Annual O&M cost of new system Unknown d) Annual fuel cost Unknown 5. Project Benefits a) Amount of fuel displaced for i. Electricity ii. Heat 134,900 gallons iii. Transportation b) Current price of displaced fuel #1 diesel $3.56/gal (85% of city use), #2 diesel $3.66/gal (15% of city use) c) Other economic benefits Jobs d) Alaska public benefits $100,000 Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 26 of 37 9/10/2010 6. Power Purchase/Sales Price a) Price for power purchase/sale n/a 7. Project Analysis a) Basic Economic Analysis Project benefit/cost ratio n/a Payback (years) n/a Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 27 of 37 9/10/2010 Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 28 of 37 9/10/2010 Renewable Energy Fund Grant Application Round IV AEA 11-005 Application Page 29 of 37 09/10/2010 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 Information collection September 2011 $31,478.38 $3,000 In-kind $34,478.38 Resource data analysis December 2011 $26,478.38 $ $26,478.38 Load evaluation December 2011 $26,478.38 $ $26,478.38 Site selection December 2011 $21,478.38 $ $21,478.38 Technical evaluation December 2011 $41,478.38 $ $41,478.38 Economic evaluation December 2011 $26,478.38 $ $26,478.38 Reporting December 2011 $44,716.38 $ $44,716.38 $ $ $ $ $ $ $ $ TOTALS 245,065 $248,065 Budget Categories: Direct Labor & Benefits $39,000 $ $39,000 Travel & Per Diem $3238 $ $3238 Equipment $ $ $ Materials & Supplies $ $3,000 $3,000 Contractual Services $150,000 $ $150,000 Construction Services $ $ $ Other $52,827 $ $52,827 TOTALS $245,065 $3,000 $248,065 Applications should include a separate worksheet for each project phase (Reconnaissance, Feasibility, Design and Permitting, and Construction)- Add additional pages as needed Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 30 of 37 9/10/2010 Project Milestones that should be addressed in Budget Proposal Reconnaissance Feasibility Design and Permitting Construction 1. Project scoping and contractor solicitation. 2. Resource identification and analysis 3. Land use, permitting, and environmental analysis 5. Preliminary design analysis and cost 4. Cost of energy and market analysis 5. Simple economic analysis 6. Final report and recommendations 1. Project scoping and contractor solicitation. 2. Detailed energy resource analysis 3. Identification of land and regulatory issues, 4. Permitting and environmental analysis 5. Detailed analysis of existing and future energy costs and markets 6. Assessment of alternatives 7. Conceptual design analysis and cost estimate 8. Detailed economic and financial analysis 9, Conceptual business and operations plans 10. Final report and recommendation s 1. Project scoping and contractor solicitation for planning and design 2. Permit applications (as needed) 3. Final environmental assessment and mitigation plans (as needed) 4. Resolution of land use, right of way issues 5. Permit approvals 6. Final system design 7. Engineers cost estimate 8. Updated economic and financial analysis 9. Negotiated power sales agreements with approved rates 10. Final business and operational plan 1. Confirmation that all design and feasibility requirements are complete. 2. Completion of bid documents 3. Contractor/vendor selection and award 4. Construction Phases – Each project will have unique construction phases, limitations, and schedule constraints which should be identified by the grantee 5. Integration and testing 6. Decommissioning old systems 7. Final Acceptance, Commissioning and Start-up 8. Operations Reporting Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 31 of 37 9/10/2010 Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 32 of 37 9/10/2010 Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 33 of 37 9/10/2010 Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 34 of 37 9/10/2010 Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 35 of 37 9/10/2010 Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 36 of 37 9/10/2010 Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 37 of 37 9/10/2010