HomeMy WebLinkAboutGrantApplication IV Akutan GeothermalRENEWABLE ENERGY FUND
ROUND IV GRANT APPLICATION
AEA 11-005
AKUTAN GEOTHERMAL
DEVELOPMENT PROJECT
Submitted By: City of Akutan
15 September 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.
AEA 11-005 Page 3 of 123 7/21/2010
SECTION 1 – APPLICANT INFORMATION
Name (Name of utility, IPP, or government entity submitting proposal)
City of Akutan
Type of Entity:
Municipal Government – Second Class City
Mailing Address
3380 C Street, Suite 205
Anchorage AK99503
Physical Address
100 Windy Way
Akutan, Alaska 99553
Telephone
907.275.7565
Fax
907.274.1813
Email
Jbereskin@gci.net
akutanadmin@gci.net
1.1 APPLICANT POINT OF CONTACT / GRANTS MANAGER
Name
Joseph Bereskin
Title
Mayor
Mailing Address
3380 C Street, Suite 205
Anchorage AK 99503
Telephone
907.275.7565
Fax
907.274.1813
Email
Jbereskin@gci.net
akutanadmin@gci.net
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
x A local government, or
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.
AEA 11-005 Page 4 of 123 7/21/2010
SECTION 2 – PROJECT SUMMARY
This is intended to be no more than a 1-2 page overview of your project.
Project Background
In 2008, the City of Akutan adopted a renewable energy strategy, which includes
development of both hydroelectric and geothermal resources available on Akutan Island.
The goal is to eliminate the dependence on diesel fuel, reduce the cost of power and
create a sustainable economic future for residents and business.
With funding from the City and a Round II Renewable Energy Fund grant (Grant
Agreement No. 2195475), the City conducted a reconnaissance exploration of a known
geothermal resource in the Hot Springs Bay Valley of Akutan. Exploration activities
included chemical geothermometry, soil and soil gas chemical surveys, remote sensing
studies, and deep geophysical surveys using magneto-telluric methods, and conceptual
modeling of the resource. A technical feasibility report on the results of the
reconnaissance exploration was provided to AEA in April 2010.
Through data synthesis and conceptual modeling, four sites were identified in Hot Springs
Bay Valley for potential exploratory drilling (Figure 1, below). The cost of drilling all four
wells was estimated at $4.2 million. With only $1.7 million of the Round II grant allocated
to the drilling program, the City requested additional f unding of $2.87 million through a
Round III Renewable Energy Grant application. Although highly ranked by AEA, and
recommended by the Legislature, the City’s Round III request was not approved for
funding.
Figure 1: Geothermal Drilling Sites
AEA 11-005 Page 5 of 123 7/21/2010
After review and consultation with the project technical team, the City decided to provide
additional funding for drilling two exploratory wells (Wells #2 and #4, as shown in Figure
1). The following funds were authorized by the Akutan City Council on 29 June 2010.
Cash $700,000
Power Project Fund Loan $500,000
With available funding from all sources of just over $3 million, the exploratory drilling
program began on 6 July 2010.
Results of 2010 Drilling Program
During the exploratory drilling period, 6 July – 31 August 2010, Well #TG2 was drilled to a
total depth of 833 feet. Well #TG4 was drilled to a total depth of 1500 feet. Data and
information collected during the drilling program are contained in the Preliminary Summary
of Findings: Akutan Exploratory Drilling Program, September 2010, which is attached to
this application as Section 9I.
Preparation for Phase III, Final Design and Permitting
Completion of the 2010 exploratory drilling program has confirmed the presence of a
geothermal resource sufficient for final design and permitting in Hot Springs Bay Valley.
The next step is to synthesize the data and information collected into a conceptual system
design and develop cost estimates for final design and construction, including production
well drilling. This will allow for the completion of remaining Phase II activities, including the
draft operational and business plan. It is anticipated that all Phase II milestones will be
completed not later than 30 June 2011.
This grant request is for funding to complete Phase III, Final Design and Permitting. The
application details all aspects of the City’s preparation for entering Phase III, and the funds
needed to achieve the milestones established by AEA for the design and permitting phase.
2.1 Project Title – (Provide a 4 to 5 word title for your project)
Type in your answer here and follow same format for rest of the application.
Akutan Geothermal Development Project
2.2 Project Location –
Include the physical location of your project and name(s) of the community or communities that will
benefit from your project.
Answer here.
The project is located on Akutan Island in the eastern Aleutian chain, approximately 760
miles southwest of Anchorage and 40 miles north of Unalaska/Dutch Harbor. The
communities on Akutan Island include the City of Akutan and the Native Village of Akutan,
both of which will directly benefit from the power and heat generated by the project. Power
and heat will also be supplied to Trident Seafoods’ Akutan Shore Plant, a major industrial
activity located on the island.
AEA 11-005 Page 6 of 123 7/21/2010
2.3 PROJECT TYPE
Put X in boxes as appropriate
2.3.1 Renewable Resource Type
Wind Biomass or Biofuels
Hydro, including run of river Transmission of Renewable Energy
x Geothermal, including Heat Pumps Small Natural Gas
Heat Recovery from existing
sources
Hydrokinetic
Solar Storage of Renewable
Other (Describe)
2.3.2 Proposed Grant Funded Phase(s) for this Request (Check all that apply)
Reconnaissance X Design and Permitting
Feasibility Construction and Commissioning
Conceptual Design
2.4 PROJECT DESCRIPTION
Provide a brief one paragraph description of your proposed project.
This project is the continuation of the Hot Springs Bay Valley Geothermal Reconnaissance
Project, previously funded under Alaska Energy Authority (AEA) Renewable Energy Grant
Fund Grant Agreement #2195475. Surface exploration and analysis,, a preliminary
technical feasibility assessment and economic assessment were completed in 2009 – 2010.
With the City’s commitment of an additional $1.2 million, exploratory drilling of two test wells
was completed in August 2010. The drilling program confirmed the presence of a
geothermal resource sufficient for final design and permitting as described in the Phase III
requirements listed in Section 2.5 of RFA AEA 11-005. This Round IV grant application is a
request for funds to complete Phase III, Final Design and Permitting.
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.)
There are three primary benefits to this project that support the use of Renewable Energy Fund
grant funds for continued development of the Akutan geothermal resource:
1. The project will provide a sustainable resource that eliminates diesel fuel
dependence and reduces the cost of energy by as much as 67 percent.
2. The project provides low-cost energy and heat needed to promote economic
stability and local/regional economic expansion.
3. The project will serve to eliminate more than 50,000 tons of annual carbon
emissions.
AEA 11-005 Page 7 of 123 7/21/2010
There are a significant number of indirect benefits for the project, which are discussed in detail
in Section 5 of this application.
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.
There are currently three sources of funds for the Akutan Geothermal Development Project, City
contributions of cash, Renewable Energy Grant Fund (AEA) grants and Alaska Power Project
Fund (PPF) loans. A funding breakdown is shown in Table 1, below.
Source Cash PPF Loan In-Kind Total
City of Akutan $790,000 $500,000 $1,290,000
AEA Grant Round II 2,595,000 2,595,000
AEA Grant Round III 173,790 75,000 248,790
Total $3,558,790 $500,000 $75,000 $4,133,790
Table 1: Phase I and Phase II Funding to Date
Approximately $90,000 of City funds and $1.0 million of AEA Round II grant funds were
expensed on project startup, prospecting, preliminary feasibility analysis, permitting, and
procurement for the exploratory drilling program. This left just over $3.0 million for the entire
exploratory drilling program. Consequently, the drilling program was reduced from four to two
exploratory wells.
With the completion of post-drilling activities in fall-winter of 2010, all currently available funds
will be depleted. The City is expecting to acquire funds for the completion of Phase II from other
sources. The purpose of this grant request is to acquire funds for continuation of the project
through Phase III, Final Design and Permitting. A breakdown of estimated funds needed to
complete the project is shown in Table 2.
AEA 11-005 Page 8 of 123 7/21/2010
Project Phase/Milestones Estimated Funds
Required
Anticipated Source of Funds
Phase II Feasibility, Conceptual
Design
$425,000 City contributions, stakeholder
contributions, grants
Final resource assessment
Conceptual design and
cost estimates
Detailed economic
analysis
Business and operations
plan
Final
report/recommendations
Phase III Final Design and
Permitting:
$3,050,000 Alaska Renewable Energy Grant
Fund, City contributions,
stakeholder contributions
Scoping/solicitation
Environmental
assessment
Permitting
Land use
Final design, estimates
Power agreements
Final economic
assessment and business
plan
Phase IV Construction $38,000,000 Private investment, City
contributions, stakeholder
contributions
Construction
Commissioning
Operation
Reporting
Total: $41,475,000
Table 2: Estimated Funds Needed for Project Completion, With Anticipated Source of Funds
The City intends to begin production drilling and system development by mid-2012. Therefore,
several long-lead items, such as environmental assessment and permitting, will be started prior
to the availability of funds from this Round IV grant request.
AEA 11-005 Page 9 of 123 7/21/2010
2.7 COST AND BENEFIT SUMARY
Include a summary of grant request and your project’s total costs and benefits below.
Grant Costs
(Summary of funds requested)
2.7.1 Grant Funds Requested in this application. $2,695,000
2.7.2 Other Funds to be provided (Project match) $355,000
2.7.3 Total Grant Costs (sum of 2.7.1 and 2.7.2) $3,050,000
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)
$45,000,000
2.7.5 Estimated Direct Financial Benefit (Savings) $
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.)
$
AEA 11-005 Page 10 of 123 7/21/2010
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.
The City’s project management team has been in place since 2008. RMA Consulting Group
(“RMA”) acts as the City’s Program Manager for all major City projects, including airport and
harbor development, infrastructure development and renewable energy. RMA provides a
variety of professionals, including planners, management and technical consultants,
engineers, and procurement specialists, to augment City staff and manage key projects. As
with all other phases of the Akutan Geothermal Development Project, RMA will provide
support for preparation and negotiation of land use agreements, interface with major
stakeholders, contractor solicitation and procurement, preparation of funding requests,
contract management, budget analysis, cost tracking, and staffing support. AK Geothermal
has been providing geothermal expertise (resource analysis, technical reporting, management
of exploration activities, etc.), to the City since 2008
A description of specific program and project management roles is provided in Section 3.4,
below, along with a project team organizational chart. Resumes of key personnel are
provided in Section 9A of this 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.
Dr. Amanda Kolker has been managing the scientific and technical components of the Akutan
Geothermal Development Project since fall 2008. Her services are provided under a contract
between the City of Akutan and Ms. Kolker’s consulting company, AK Geothermal, LLC. Ms.
Kolker is a highly qualified and well-known geothermal geologist who has studied and
surveyed geothermal resources in Alaska, and who contributed to the development of the
State’s Renewable Energy Atlas and Assessment. A résumé for Ms. Kolker is provided in
Section 9A of this application.
3.2 Project Schedule
Include a schedule for the proposed work that will be funded by this grant. (You may include a
chart or table attachment with a summary of dates below.)
The City intends to complete Phase II, Feasibility, Conceptual Design in the fourth quarter of
FY11. This means that the conceptual design, cost estimates and conceptual business and
operations plan will be completed in time for the startup of Phase III in FY12, utilizing the funds
being requested in this grant application. The proposed schedule is shown in Table 3, below.
AEA 11-005 Page 11 of 123 7/21/2010
Activity Milestones/Tasks Schedule
Complete Phase II
Requirements
Updated resource assessment,
conceptual design, cost estimates,
financial analysis, conceptual
business/operations plan
15 April 2011
Final Report for Phase II Provide final report and
recommendations to AEA and
prospective investors
1 June 2011
Phase III Implementation Project scoping and Contractor
Solicitation
30 July 2011
Final System Design and Cost
Estimates
1 September 2011
Environmental Assessment 31 December
2011
Permit Application 31 December
2011
Final land use and site control
agreements
15 October 2011
Complete power purchase agreements 15 October 2011
Updated economic and financial
analysis
1 February 2012
Final business and operational plan 1 February 2012
Table 3: Project Schedule
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.)
There are seven milestones identified for Phase III of the Akutan Geothermal Development
Project. These are reflected in the Budget Worksheet, presented in Section 9C of this
application and further defined below:
1. Project Scoping and Contractor Solicitation
Based on the completion of Phase II and milestones/tasks completed prior to a Round IV
grant award, a detailed scoping for Phase III activities will be completed, along with an
update of the project schedule and budget allocations. Technical and engineering
support requirements will be identified and specifications developed for the solicitation of
contract services. Procurement of all necessary services, materials and supplies will be
completed, and contracts will be negotiated and executed, as needed.
2. Final System Design
Conceptual designs for access and support infrastructure, the power plant and
transmission system completed in Phase II must be finalized and final cost estimates
must be developed. Final design will identify the sites required for drilling of production
wells and reinjection wells, pad sites, pipelines and gathering system, cooling water
requirements, plant location and road/transmission construction requirements and cost
estimates.
AEA 11-005 Page 12 of 123 7/21/2010
3. Environmental Assessment and Permitting
Consistent with the proposed system design, the City will prepare and file a Coastal
Project Questionnaire and Certification Statement (CPQ). All studies, assessments and
compliance documentation required as part of CPQ processing will be completed and
provided to regulatory agencies for review. Permit applications will be prepared and
processed, as required.
4. Development Agreements and Site Control
The City has executed exclusive Exploration and Development Agreements for the Hot
Springs Bay Valley geothermal site. Akutan Corporation owns the surface rights and
Aleut Corporation owns the subsurface rights. Final development agreements must be
negotiated based on the final design developed in Phase III. These agreements will
address all issues related to access and rights of way, site control, land use, project
participation/partnership, and royalty/leasing requirements, if any.
5. Power Sales Agreements and Investment Strategies
Trident Seafoods Corporation (“Trident”) will be a primary user of power and heat
produced by the Akutan Geothermal Development Project. It is critical that Trident
execute a power purchase agreement that supports the proposed project investment. In
addition, Trident has expressed strong interest in direct investment in the project, as
have several other parties. All potential partnership agreements and investment
scenarios must be pursued and developed to the financial and operational benefit of the
project.
6. Updated Economic and Financial Analysis
The results of milestones 1 – 5 will provide the input and data necessary for an updated
economic and financial analysis of the project. The City intends to contract for
specialized financial services to complete the tasks associated with this milestone. The
selected contractor will have specific experience with the financial analysis of
geothermal projects and the development of funding strategies.
7. Final Business and Operational Plan
The completion of an updated economic and financial analysis (Milestone 6) will allow
for the development of the final business and operational plan needed to support Phase
IV, Construction and investment sourcing.
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 City of Akutan has limited staff resources for the management of large infrastructure
projects and programs such as renewable energy development. Therefore, the City has
engaged the services of RMA Consulting Group (RMA) as its Program Management team and
AEA 11-005 Page 13 of 123 7/21/2010
the consulting firm, AK Geothermal, as its geothermal project manager. RMA has been working
with the City since mid-2008 to support a variety of infrastructure projects, including a regional
airport, small boat harbor, harbor access road, hydroelectric generation and electrical
distribution, as well as the Akutan Geothermal Development Project. These projects have a
combined projected cost of development in excess of $160 million. The City’s planning and
management of these projects has provided the team with the development experience and
capacity needed to manage and administer the Akutan Geothermal Development Project.
The RMA Program Management team has provided Ak Geothermal and the technical support
team with the resources and project support needed for completing the prospecting , exploratory
drilling and technical analysis tasks of the project. RMA assists the team with the development
of detailed scoping documents, project plans, schedules and specifications necessary for
issuing bids and requests for proposal. RMA also supports the procurement process, including
proposal review, assistance with contractor selection and preparation of contract documents,
and acts as the owner’s representative and contract manager to ensure effective performance
of all contractors and consultants.
Mr. Raymond Mann, President and Senior Consultant of RMA, is the City’s Program Manager.
Mr. Mann and the RMA Program Management team will be available to support the Akutan
Geothermal Development Project throughout the project period described in Section 3.2 of this
application. Résumés for key personnel are provided in Section 9A of this application.
Amanda Kolker, Ph.D. Geologist and president of AK Geothermal, has been managing the
Akutan Geothermal Project since January 2009. Dr. Kolker provides resource analysis,
technical reporting, management of exploration activities, project planning, and other services to
the City of Akutan. She is assisted by Pete Stelling, PhD. Geologist and professor at Western
Washington University who specializes in the geology of the Aleutian islands.
The Geothermal Resources Group, Inc. (GRGI) has been providing drilling engineering support
to the City of Akutan since the initial phases of the exploratory drilling program in April 2010.
GRG has expressed interest in continuing its partnership with the City of Akutan through to the
production drilling phase (Phase IV) of the project. GRGI would help with permitting and design
of production wells and associated activities.
In compliance with the City of Akutan purchasing code, the City has procured services for the
Akutan Geothermal Development Project through Professional Services Agreements and other
service contracts approved by the Akutan City Council. All funds expended on the project are
appropriated by City Ordinance as approved by the City Council.
Currently approved contracts are:
AK Geothermal Amanda Kolker, Project Manager/Lead
Geologist
RMA Consulting Group Ray Mann, Program Manager
Mead and Hunt Engineers and Planners Kari Nichols, P.E., Engineering Manager
Stelco Magma Consultants Pete Stelling, Assistant Geologist
Geothermal Resources Group Alan Bailey, Bill Rickard, and Wendell T.
Howard, Drilling Engineers
These contracts will be extended to provide for performance of the work described in Section 4
of this application. Résumés are provided in Section 9A. A team organization chart is provided,
below:
AEA 11-005 Page 14 of 123 7/21/2010
Services, equipment and supplies required for work to be performed under the Round IV grant
will be procured consistent with the requirements of Section 26 and Appendix B of the Standard
Alaska Energy Authority Grant Agreement, which is included with Requests for Grant
Applications AEA 11-015, dated 21 July 2010, and the Akutan Purchasing Code, AMC Title 5,
Chapter 5.50.
In addition to the contracted services described above, the City intends to procure the following
specialized services in support of Phase III, Final Design and Permitting:
System Design
One or more professional services solicitation(s) will be conducted to obtain the services of
individual(s) or firm(s) experienced in geothermal system design and cost estimating. The
selected contractor(s) will be responsible for the following deliverables:
Engineered and approved system configuration
Engineered and approved system design
Road and transmission design
Engineered and approved integration design
Interconnection and delivery study
Final engineers cost estimate
Financial Planning and Fund Sourcing
A professional services solicitation will be conducted to obtain the services of an individual or
firm experienced in financial planning, funding and investment strategies, and the preparation of
business plans for geothermal development projects. The selected contractor will review the
system design and cost estimates of the project for purposes of preparing a detailed financial
plan and funding strategy sufficient to attract investors for construction and operation, and to
City of Akutan
Ray Mann
Program Manager
Amanda Kolker
Project Manager
RMA
Mead & Hunt
Kari Nichols, PE
Engineering Services
Manager
GRGI
Robert Kirkman
Technical Services
Manager
Doug Miller
Project Consultant
Kathryn Mann
Administrative and
Financial Services
Manager
Marieke Armstrong,
PE
Jon Archibald, PE
Subject Matter Experts
Bill Rickard
Alan Bailey
W.T. Howard
Stelco Magma
Pete Stelling
Subject Matter Experts
AEA 11-005 Page 15 of 123 7/21/2010
support future grant requests and other financing options. The contractors will also assist the
project team with development of the final operational and business plan.
Utility Structuring and Operations
Professional services will be required to support development of an ownership and operations
plan for the geothermal system. The plan is needed to determine ownership and investor
participation, tax credits/incentives, and utility funding and operation requirements of the
Regulatory Commission of Alaska. The contractor will also assist with the development of
power purchase/sale agreements and placement of investment offerings.
3.5 Project Communications
Discuss how you plan to monitor the project and keep the Authority informed of the status.
The City and AEA have maintained a close working relationship throughout each phase and
milestone of the project. Pertinent findings of field investigations and recommendations for
project continuation have been reported to the AEA geothermal program manager and grant
manager. Regular e-mail and telephone updates are provided to the AEA project manager,
along with monthly technical and financial progress reports. All previous methods of
communication will be continued throughout the period of any grant agreement executed under
Round IV funding.
As recommended by the City, the AEA Project Manager (Neil McMahon) visited the project site
in Akutan during the startup of drilling operations in July 2010. This visit was an important step
for communicating the scope of planning, management, logistical support and financial
commitment required for exploration and field operations. The trip also provided an opportunity
for the City and AEA to directly interface with the on-site inspector assigned to the project by the
Alaska Oil and Gas Conservation Commission. A direct exchange of information took place
with respect to inter-agency requirements for geothermal exploration and development.
The City conducts a weekly Program Management review meeting for all projects. Participants
include the Mayor, City Administrator, City staff, Program Manager and Project Manager. A list
of priorities and action items is maintained, to include unresolved issues. This approach allows
the entire City project team to monitor project deliverables, milestones, financial control and
contractor performance, and helps to create a detailed record of actions taken. T hese meetings
will be held throughout the course of the project and the results will be made available to the
AEA grant manager, as requested.
The City project team employs a full range of electronic reporting systems to include financial,
administrative and technical databases, timecard tracking and payroll, project management and
communications networks. The City is very familiar with the budget expense and
reimbursement requirements for AEA and other grants, and will fully comply with the reporting
and reimbursement requirements set forth in Appendices D and E of the AEA standard grant
agreement, which is included with Requests for Grant Applications AEA 11-015, dated 21 July
2010.
3.6 Project Risk
Discuss potential problems and how you would address them.
The remoteness and harsh climate of Akutan Island make the location a challenging place to
explore for and develop renewable energy resources. Little infrastructure exists on the island,
and the geothermal area is roadless, posing problems for access, transportation and
AEA 11-005 Page 16 of 123 7/21/2010
development. These risks were successfully mitigated for the exploration phase of the project
through the use of a heliportable drill rig and the use of helicopter transport for all logistical
support operations.
Production drilling and geothermal resource development will present a variety of uncertainties
and risks that must be identified and mitigated as part of the final design and permitting
requirements of Phase III. These efforts will include:
Environmental assessment and mitigation plans
CPQ and permit processing
Final site control and right of way agreements
In addition to the physical mitigation efforts listed above, the project will require detailed
planning and implementation of a project funding strategy, to include power purchase
agreements and investor/stakeholder participation. The City plans to engage a qualified
financial advisor to assist with the following efforts:
Updated cost-benefit analysis of the project
Development of a comprehensive financial plan
Review and initiate investment/partnership opportunities
Development of power purchase agreements
Support negotiations with power users/stakeholders and investors.
The City believes the above-listed efforts, combined with the strong management and technical
team resources already in place will substantially mitigate the risks of resource development.
The work to be completed under this Round IV grant request will provide a full range of
mitigation efforts necessary to support any decision to proceed with construction and operation
of the proposed system.
Some risk remains in terms of geothermal resource assessment at Akutan, because only two of
the four planned exploratory holes were actually drilled in 2010 due to budget constraints.
However, this can be partially mitigated through detailed analysis of exploration and drilling
data, and iterative reservoir modeling with ongoing updates of input data. In fact, this type of
resource uncertainty is normal in geothermal field development, which typically follows a
progressive, multi-year path of exploration, and data development – starting with conjecture and
moving toward practical certainty, as various stages of drilling proceed. With every new hole
drilled, new information becomes available about the geothermal resource that is iterated into
the resource model. This is an inherent inconvenience of geothermal energy.
There are several risks associated with development of the proven outflow resource versus the
unproven upflow resource (see section 4.1 for explanation of the two resources). Development
of the outflow resource would likely require more production and injection wells per MW , spread
over a larger area. Additionally, there is a greater risk of technical problems (injection
breakthrough and cold water influx) in an outflow zone.
Finally, there is some risk considering that Akutan is an active volcano with frequent historical
eruptions. However, the target areas for production/development are not near the active
volcanic vent and are not located within likely paths of volcanic material.
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SECTION 4 – PROJECT DESCRIPTION AND TASKS
Tell us what the project is and how you will meet the requirements outlined in Section 2 of
the RFA.
The level of information will vary according to phase(s) of the project you propose
to undertake with grant funds.
If you are applying for grant funding for more than one phase of a project provide a
plan and grant budget form for completion of each phase.
If some work has already been completed on your project and you are requesting funding
for an advanced phase, submit information sufficient to demonstrate that the preceding
phases are satisfied and funding for an advanced phase is warranted.
4.1 Proposed Energy Resource
Describe the potential extent/amount of the energy resource that is available.
Discuss the pros and cons of your proposed energy resource vs. other alternatives that may
be available for the market to be served by your project.
The geothermal system on Akutan Island has long been considered one of the most
promising high-temperature sites in Alaska for geothermal development (Motyka et al,.
1993). The Akutan geothermal resource is a volcanic hydrothermal system, with a deep
“upflow” resource of >220 °C (>430 °F), and a shallow “outflow” resource at >180 °C (>355
°F). The heat source is conduction from the volcano area causing convection.
The 2010 drilling program included the drilling of two small-diameter core holes in the Akutan
geothermal area. The purpose of the core holes was to gather temperature gradient (TG)
data, crucial in determining the production capacity of a geothermal resource. Additionally,
the drilling plan was designed so that if geothermal fluids were encountered in the TG wells,
they could be sampled and tested. The TG drilling activities were completed on August 24,
2010. At the time of writing, partial TG data were available for both wells, with the full dataset
available in December, 2010. The full dataset includes: equilibrated regional temperature
gradient data (only available several months after drilling completion), plus temperature,
depth, and chemical composition of the shallow geothermal aquifer. These data are the
parameters required for estimating resource capacity, with resource volume being the one
unknown remaining. The reason for this is that core holes are small-diameter, therefore they
restrict natural flow rates (so resource volume cannot be measured).
The 2010 drilling program successfully proved that the geothermal resource at Akutan can
support planned development. Well TG2 encountered a shallow aquifer of 359 °F (182 °C) at
585 ft. (178 m). This is extremely shallow for a geothermal resource and is good news as it
could mean substantially reduced capital costs of development if it means that only shallow
production wells need be drilled. Since volume could not be measured, calculations based on
empirical geothermal field observations were used to predict the deliverability of a full sized
production well completed to a similar depth as TG2. These calculations yielded an
extrapolated pumped capacity of the TG2 resource ranging from 465 to 820 gallons per
minute for a single larger-diameter production well. This means that a single production well
with the same flow characteristics as TG2 would produce 1.34 MW up to a maximum of 2.38
MW. While the size of the outflow is not reliably constrained, the minimum size of outflow
system appears to be about ~1000 x 500 m and may be as large as ~3500 x 1000 m based
on magneto-telluric (MT) data. This suggests that the resource could support the drilling of
multiple production wells, if necessary.
Well TG4 did not encounter much fluid flow, but preliminary analysis of TG data from TG4
show evidence for an anomalously high temperature gradient, indicating regional favorability
AEA 11-005 Page 18 of 123 7/21/2010
for a developable resource, and suggesting a deeper, hotter, aquifer is present. This deeper
“upflow” resource is predicted to be >220 °C (>430 °F; see “Akutan Geothermal Project
Preliminary Technical Feasibility Study,” 2010, by Kolker, Cumming, and Stelling). The 2009
exploration data suggests that the likely location for this hotter aquifer is in the vicinity of the
fumarole field. This poses access limitations because the fumarole is located 350 m up a
very steep hillside.
Because of the modest demand at Akutan, either the upflow or the outflow resource might be
adequate to support planned development for power production and direct use applications.
The shallow outflow resource of 182°C is less risky, as it has been proven to be accessible
for development at Akutan. The outflow resource is comparable to the developed resource at
several geothermal fields in the western USA, such as the Casa Diablo field at Long Valley,
CA and the Steamboat Springs Field near Reno, NV. Even handicapping the Akutan
resource by 50% relative to these reservoirs (because of the unknown volume), would give
an analogous total resource capacity estimate of 20 MW. Because the high temperature
resource might exist, a more optimistic capacity estimate for the entire system would be as
high as 100 MW. The “undiscovered” deeper, hotter, upflow resource of >220°C might be
targeted in the future because of its potentially lower development cost.
Pros
Geothermal provides baseload energy, which means the energy source (heat) is constantly
available. Geothermal energy is available 24 hours a day, 365 days a year. Geothermal
power plants have average availabilities of 90% or higher, compared to about 75% for coal
plants, according to National Renewable Energy Laboratory. This makes it the only
renewable resource that would get remote communities completely off diesel, as opposed to
wind or solar or even hydro (which in most Alaskan communities has seasonal availability
issues as well). At Akutan, the geothermal energy resource could likely match or exceed the
total 7-8 MW combined peak load for the village and Trident Seafoods.
Geothermal energy is a mature industry and therefore carries minimized risks at the
development level (most of the risk is at the exploration level). With the exploratory drilling
complete at Akutan, the riskiest stage has already passed.
The City of Akutan is considering taking a modular approach to geothermal development that
minimizes risks even further. This means adding power generation capacity as wells become
operational, scaling output to meet demand. As more wells become operational, a modular
system would allow for growth to satisfy the increasing usage loads including that of the
seafood processing facility. The containerized modular systems are relatively easy to
transport especially considering the rugged terrain. Further, a modular system utilizing the
ORC units described in section 4.3 greatly reduces on-site preparation and installation efforts
and costs.
In addition to power generation, geothermal development can address a variety of other
energy needs. The use of geothermal energy for space heating will further reduce diesel fuel
consumption and the cost of energy for village residents. This is because heating fuel costs
are even higher than the costs of fuel for power generation. Other applications include cold
storage for fish processing, and greenhouse agriculture.
Cons
The major drawback with geothermal development at Akutan is the capital costs, or up-front
costs, of the project. While geothermal power immunizes user communities against
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fluctuations in fuel cost, capital costs for geothermal plants can often be prohibitively high.
This is especially true in remote Alaskan villages where the immense distances can more
than double costs. However, drilling accounts for most of the costs of geothermal plants, and
these could be substantially reduced due to the extremely shallow resource depth at Akutan.
Additionally, the high cost of production drilling can potentially be offset by sharing
mobilization/demobilization costs among two or more projects; for example between
Unalaska (Makushin Geothermal Project) and Akutan. The City of Akutan has been exploring
this option with the landowners at Makushin, and believes that the timing of production well
drilling could very well overlap between the Akutan and Makushin projects.
The location of Hot Springs Bay Valley poses some problems in terms of resource
development. The valley is remote, and is a swampy marsh area ringed by steep and rugged
mountains. These characteristics will make construction activities (road, transmission lines,
and plant infrastructure) expensive and challenging.
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.
Milestone 6 of the City of Akutan–AEA (Round II) Grant Agreement #2195475 required the
preparation of a preliminary economic assessment for the project. Information Insights, LLC
was engaged to develop the assessment, which was submitted to AEA on 15 March 2010 as
Akutan Geothermal Development Project: Geothermal Energy Demand & Stakeholder
Assessment.
Since detailed cost and financial data for geothermal system development will not be
available until late in Phase II or early in Phase III, the economic assessment focused on
existing and potential demand for electric power and heating. The information provided in
this Section 4.2 is based upon the research, findings and recommendations as presented in
the Information Insights report.
There are three primary components of the energy system at Akutan:
Diesel produced energy for power and heating of the village and public
facilities.
Diesel produced energy for power and heating of the Trident Seafoods’
Akutan Shore Plant
Hydroelectric power to augment power production for the village and public
facilities.
Diesel and hydroelectric power for the village and public facilities is provided by Akutan
Electric Utility. Space heating for individual homes, businesses and public facilities is
provided by each owner through on-site delivery of diesel heating fuel.
Trident Seafoods provides its own power and heat using diesel fuel, heating fuel and some
fish oil. The Trident system also includes power generation heat recovery. There is no
distribution or power sharing connection between the City and Trident.
AEA 11-005 Page 20 of 123 7/21/2010
The power generation system operated by Akutan Electric Utility is configured as follows:
A. Diesel Plant Facility
Akutan Electric Utility Inc. operates a diesel power generating facility that can
provide electricity to the entire community. The power plant is located at the
west end of the City. It houses two diesel generators: 70 kW Caterpillar
engine, 150 kW Perkins engine and associated switchgear. The switchgear
includes a Direct Logic 205 PLC and equipment for a third generator. The 205
PLC was set up for an I/O interface with the hydro plant via radio
communications, although no communication link has been installed.
B. Hydroelectric Facility
The City also operates a hydroelectric powerhouse at the east end of the city.
It is a stand-alone generation facility consisting of a self-contained 175 kVA
(105 kW peak capacity) Canyon Industries hydro generator, backed by a 125
kW Perkins diesel generator in the same module. The facility features a 4-
inch plastic penstock, which provides water to a Pelton wheel turbine from a
reservoir 800 feet above the powerhouse. The hydro plant has a PLC based
control system that allows for the hydro generator to be paralleled with the
diesel. The controls also provide remote monitoring and control of the
powerhouse. The system operates intermittently due to equipment and
maintenance issues, which are being addressed through a Round III
renewable energy grant.
These two facilities have a total power generation capacity as shown in Table 4, below.
Power Plant Generator Capacity
Main Plant Caterpillar 70 kw
Main Plant Perkins 150 kw
Hydroelectric Plant Canyon Industries 105 kw
Hydroelectric Plant Perkins 125 kw
TOTAL: 450 kw
Table 4: Akutan Electric Utility Power Generation Capacity
There are two power-related projects currently underway in Akutan that effect the energy
system. A field survey and conceptual design for the hydroelectric system (“Town Creek”) is
being funded by AEA Renewable Energy Grant Agreement #2195473. A Round III grant
award in the amount of $1.4 million (pending Grant Agreement) will be devoted to additional
work on the Town Creek system. The purpose of this work is to design a repair and upgrade
for the hydroelectric system that will optimize the production of hydroelectric produced power
and reduce the consumption of diesel fuel. AEA is also managing a Denali Commission
funded distribution system upgrade. This project will include replacement or upgrade of the
existing system to improve distribution and long-term safety and efficiency. Expected
completion is in October 2010. Note: For further information on the Town Creek
Hydroelectric project refer to Town Creek Hydroelectric Project Field Report and
Recommendations for Improvement and Town Creek Hydroelectric Project Safety Report on
file with AEA.
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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.
As detailed in Section 4.2, above, with the exception of intermittent power provided by the
Town Creek hydroelectric plant, both the City and Trident are entirely dependent on diesel
fuel for power and heating. Table 5 summarizes fuel utilization for 2008.
Fuel Usage Gallons Per Year Estimated Annual Cost
City of Akutan Power 45,000 $179,925
City of Akutan Heat 37,500* $157,500
Trident Power 2,495,172 $7,610,375
Trident Heat 2,063,064 $6,292,425
Total: 4,640,736 $14,240,225
*Assumes 750 gallons per household
Table 5: Fuel Utilization 2008
As a combined power and heat system, the Akutan Geothermal Development Project will
eliminate diesel fuel dependence for the City, its residents and Trident. In addition, more
than 50,000 tons of carbon emissions from existing and planned facilities will be
eliminated.
Other anticipated impacts include:
Power and heat to support the Akutan small boat harbor (to be constructed
in 2010-12), and resulting fishing fleet activities.
Power and heat to support the Akutan airport marine link system facilities
(to be constructed 2011-12) on Akutan Island.
Power and heat to support local economic growth and business
opportunities, including greenhouse agriculture, industrial applications such
as the production of ice and/or alternative fuels, recreation/tourism, and
other options
Stimulation of regional and local economic development and jobs creation.
Expansion of Bering Sea fishery activities, including Trident Seafoods.
Without the renewable energy resource available from the Akutan Geothermal
Development project, all of the above activities must be supported by additional diesel
power generation, adding to the already high cost of diesel dependence, and contributing
to an expanded carbon emissions footprint.
4.2.3 Existing Energy Market
Discuss existing energy use and its market. Discuss impacts your project may have on
energy customers.
In the small community of Akutan there are two distinct energy users and energy producers;
the City of Akutan and the Trident Seafoods processing plant. Despite the fact that these two
entities exist very close to each other on Akutan Island, they have completely separate
energy systems. Trident operates as an industrial enclave, producing all of the energy it
needs for its operations. The City has a local utility that serves local residents and
AEA 11-005 Page 22 of 123 7/21/2010
businesses (with the exception of Trident). The local utility does not have the capacity to
meet Trident’s energy needs so there has been little reason to engage the processor in
conversations about purchasing energy before now.
The City of Akutan burns an estimated 45,000 gallons of diesel per year generating
electricity. At an average cost of $4.00 per gallon, the utility spends as much as $180,000 per
year for fuel. The cost to residential users is offset by Power Cost Equalization (PCE) funds
and a city subsidy so the majority of potential savings from geothermal development would
accrue to the State of Alaska through a reduction in the PCE subsidy, the City, and to local
businesses that are not eligible for PCE. The City of Akutan generates electricity at a rate of
$0.32 per kWh.
Sales Revenue
Class Customers Revenue
Residential 37 $70,441
Commercial 17 $67,775
Community Facilities 12 $41,709
Total: $179,925
Table 6: Sales Revenue, 2008
Trident Seafoods uses considerably more electricity, burning an estimated 2.5 million gallons
per year to meet the plants’ electric energy needs. Total estimated cost for fuel associated
with electricity generation is roughly $7.6 million per year. At $3.05 per gallon of fuel, we
estimate Trident is effectively paying $0.21 per kWh for electricity.
Gallons Per Year $/kWh (Estimated
for Trident)
Estimated Total
Costs
Trident Plant
(Electric)
2,495,172 0.21 $7,610,373
Akutan (Electric) 45,000 0.32 $179,925
Total: 2,540,172 $7,790,298
* Based on FY08 PCE report for Akutan and assumes an average 13 kWh per gallon
Table 7: Fuel Use - Electricity Generation
Cost estimates are always a snapshot; the cost of fuel is a moving target. The last few years
have seen wild variation in price in relatively short periods of time. The costs associated with
fuel presented in the table above are based on EIA 2009 base case with cost increments
associated with refining, barging from Seattle to Akutan, and carbon tax on refining, going
into the future. This model produces fuel prices of between $3.05 and $4.00 for electric
generation depending on the buyer.
Space heating is the other significant piece of the energy equation in Akutan. The City of
Akutan uses around 37,500 gallons of fuel for space heat per year. At an estimated cost of
$4.20 per gallon. The average homeowner pays a little over $3,000 per year to heat their
home. The community as a whole spends approximately $157,000 per year on space
heating at today’s rates.
The Trident plant consumes 2.1 million gallons of fuel per year for heat energy at an
estimated cost of $6.3 million dollars. Fuel use is based on conversations with Trident
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personnel. Cost estimates are produced through review of Trident’s energy production
inventory and independent analysis.
Gallons Per Year Cost Per Gallon Estimated Total
Costs
Trident Plant (Heat) 2,063,064 3.05 $6.292,426
Akutan (Heat) 37,500* 4.20 $157,501
Total 2,100,564 $6,449,927
*Assumes an average 750 gallons of heating fuel per residential household
Table 8: Fuel Use – Heat Generation
The tables below estimate the value of energy required on Akutan Island in 2012 and the net
present value of energy consumed between 2012 and 2030. Total net present value of
energy in Akutan is more than $200 million, with just over half of that value consumed in
electric energy.
$/Year Electric ($/Year) Heat ($/Year)
Akutan $312,580 $155,079 $157,501
Trident $13,902,798 $7,610,373 $6,292,426
Total $14,215,379 $7,765,452 $6,449,927
Table 9: Annual Cost of Energy in Akutan – 2012
$ Electric ($) Heat ($)
Akutan $4,520,313 $2,263,948 $2,256,364
Trident $207,749,254 $113,721,659 $94,027,595
Total $212,269,566 $115,984,608 $96,283,959
Note: assumes a 5% discount rate
Table 10: NPV Akutan Energy Market - 2012 To 2030
Estimates of the value of the local energy market assume a modest increase in the price of
diesel as well as a future and increasing cost associated with carbon emissions. We assume
no population growth or contraction in the community. Likewise we assume a steady rate of
activity at the Trident plant.
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
AEA 11-005 Page 24 of 123 7/21/2010
Delivery methods
Description of renewable energy technology specific to project location
The proposed geothermal energy system at Akutan is based on 1-6 production wells producing
between 540 and 820 gpm, approximately, of hot water at 359 °F or greater (see section 4.1 for
resource description). Production well(s) in Hot Springs Bay Valley would be completed with
large-diameter casing so that a 12” downhole pump could be run in the casing and the well(s)
would be pumped. This system would be capable of satisfying part or all of the electrical and
thermal loads of the village and Trident Seafoods. Development of the extraction infrastructure at
the geothermal site will necessarily involve both production and injection wells to keep the
geothermal resource renewable.
The basic approach to power production using the Akutan geothermal resource involves the
installation of a high efficiency Organic Rankine Cycle (ORC) binary system to generate
electrical energy using the thermal gradient between the geothermal fluid (359 °F) and the
ambient air and/or water (34-40 °F). Depending on demand, power could be brought online in a
scalable fashion, adding generation units as wells are drilled. As more wells become operational,
a modular system would allow for growth to satisfy the increasing usage loads including that of
the seafood processing facility. The modular system design greatly reduces on-site preparation
and installation efforts and costs. All necessary electrical, mechanical, fluid and control sub-
systems are installed in the modular containerized package. These come in both stationary as
well as wheel mounted, mobile versions. The units require only a simple mounting platform and
external hookup to the geothermal fluid source and electrical connection.
The ORC binary system would use an environmentally friendly secondary working fluid such as
R245fa. The current technology in ORCs using R245fa as the working fluid is capable of
converting thermal energy into electrical energy at 11% (summer) to 17% (winter) conversion
efficiency depending on ambient cooling air temperature. However, several companies have
approached the City of Akutan to discuss improvements that would advance the technology, with
ORC systems capable of conversion efficiency exceeding 25%. This would be possible due to
both technology improvements and the fact that the heat sink on Akutan is lower-temperature
than normal ambient worldwide. It is Akutan’s intention to work with these companies to optimize
the power system for Akutan users. The heat sink for the power plant would be either ambient air
or an infiltration gallery utilizing cold water from nearby creek(s), depending on the engineer’s
determination of which provides greater efficiency.
Optimum installed capacity
Based on demand, the optimum installed capacity for the Akutan geothermal project is around
10 MW. The proven Akutan resource would be able to produce an electrical power output
between 2 and 20 MW (see section 4.1); more drilling must be completed before these estimates
can be refined further. In combination with the “undiscovered” deeper, hotter, upflow resource,
the total field capacity estimate could be as high as 100 MW.
Anticipated capacity factor
We anticipate the standard capacity factor for geothermal power system; on the order of 90-98%.
AEA 11-005 Page 25 of 123 7/21/2010
Anticipated annual generation
Akutan is considering taking a modular approach to geothermal development. This means
adding power generation capacity as wells become operational, scaling output to meet demand.
Initially, the anticipated annual generation may be designed to meet only part of the total
demand, corresponding to the production capacity of the well(s). Ultimately, generation could
exceed 40 million kWh of electricity annually, corresponding to demand.
Anticipated barriers
The Akutan geothermal project faces many challenges, but nothing that could be called a
“barrier” at this time. The challenges are mostly related to the intertwined problems of project
capital costs and the remote location of Akutan.
Basic integration concept
The basic integration concept is to drill enough geothermal production wells and brine injection
wells to supply a binary ORC power plant of 10 MW net output capacity. After confirming that
the geothermal reservoir will support a geothermal power plant of 10 MW for 30 years a
geothermal power plant of 10 MW net output complete with switch yard and 480/4160 volt
transformer will be constructed. In addition to the power plant and facilities, a 4160 volt
transmission line will be constructed between the power plant in the Akutan geothermal field and
the village of Akutan. It is anticipated that the power output from the geothermal power plant
would replace the 7.1MW combined City-Trident demand, and provide power for planned and
proposed infrastructure improvements and industrial expansion (see Akutan Geothermal Project:
Geothermal Energy Demand and Stakeholder Assessment, Information Insights, January 2010).
The existing diesel powered generating units would be converted to standby generation units in
case problems were encountered with the geothermal generating plant or transmission line.
Akutan’s electric utility stakeholders are strong supporters of the Akutan geothermal project and
will work to ensure that the existing infrastructure is updated to accommodate renewable sources
of power, including the geothermal and hydro systems.
Delivery methods
The delivery method for the above integration concept is to confirm an existing geothermal
discovery well in the Akutan geothermal field with several additional geothermal production wells
with enough deliverability to sustain a 10 MW net output generating facility. After confirming the
generating sustainability of the Akutan geothermal reservoir, a power plant will be designe d and
built simultaneously with the construction of a 4160 volt transmission line from the Akutan
geothermal field to the village of Akutan (see Figure 2, below). Deliverability of clean non-
polluting electricity will be used to replace existing diesel powered electricity production for the
village of Akutan and the fish plant which is the principle employer in the village. Milestones of
the project will be (1) the confirmation of 10 MW net deliverability from the Akutan geothermal
reservoir, (2) design and construction of a 10 MW net capacity geothermal generating facility, (3)
construction of a 4160 volt transmission line from the Akutan geothermal field to the village of
Akutan, and (4) conversion of the existing diesel generation facilities to standby status.
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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.
As identified in the City’s existing Round 2 Grant Agreement, surface rights to the geothermal
resource exploration site are owned by Akutan Village Corporation, including access to the site,
rights of way for ancillary facilities and transmission lines. Land required for the project within
City boundaries is owned by the City of Akutan. Subsurface rights are owned by The Aleut
Corporation. The City has executed Exploration and Development agreements with both Native
Corporation land owners. These agreements provide for the exclusive rights of the City of
Akutan to access, explore and develop the geothermal resources of Hot Springs Bay Valley.
The development plans resulting from the completion of Phase III milestones proposed in this
application, must be provided to both land owners for review and discussion. The City has
proposed the creation of a consortium, which will allow the corporations to participate in
development and to become investors. Final negotiations will determine the financial
components of land use and development rights needed to complete a final business plan.
The City has prepared an annexation request that will expand the area of the City by 133 square
miles, to include all lands necessary for the geothermal development project. The application
has been reviewed by staff of the State of Alaska Local Boundary Commission and a formal
submission of the request is expected in early 2011.
4.3.3 Permits
Provide the following information as it may relate to permitting and how you intend to address
outstanding permit issues.
List of applicable permits
Anticipated permitting timeline
Identify and discussion of potential barriers
The City completed a Coastal Project Questionnaire and Certification Statement (CPQ) for the
exploratory drilling program conducted July – August 2010. A Consistency Determination letter
was issued on 22 March 2010 with a determination that permits would be required from
Department of Fish and Game, Department of Natural Resources (DNR) Division of Mining,
Land, and Water, and DNR Division of Oil and Gas. All necessary permits were issued prior to
the commencement of drilling operations. It should be noted that authority for issuance of
geothermal drilling permits was transferred from DNR Division of Oil and Gas to Alaska Oil and
Gas Conservation Commission (AOGCC) in May 2010. All necessary drilling permits,
inspections and compliance requirements were approved by AOGCC before and during drilling
operations.
The City will follow the same CPQ permitting process to obtain permits for production drilling and
system development. It is assumed that environmental review and permitting will be more
extensive for this phase of the project. Therefore, the project schedule will allow 10 -12 months
for processing of required permits.
Based on the experience of obtaining permits for exploratory drilling, the City believes there are
no known significant barriers to permit approval for system development. Necessary permits will
likely include:
AEA 11-005 Page 27 of 123 7/21/2010
Water use
Materials excavation
Geothermal drilling – production and reinjection
Waterbody/waterway use
Solid waste disposal
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
As indicated in Section 4.3.3, above, the City has conducted an extensive environmental review
and permitting process to support the 2010 exploratory drilling program. Federal, state and local
agencies were contacted to determine potential environmental impacts and land use constraints.
Although exploratory drilling operations employed helicopter transport to reduce or mitigate
certain impacts, most of the determinations made for Phase II will apply to the more significant
requirements of Phase III. These determinations include:
1. There are no threatened or endangered species that will be directly impacted by
geothermal development in Hot Springs Bay Valley.
2. The development area is uninhabited other than the presence of 20 -30 feral cattle. The
area consists of remote terrain covered by mixed grass alpine tundra, heath meadows
and barrens.
3. In cooperation with State Office of Historic Preservation (SHPO), the City employed an
archaeological team to survey the entire Hot Springs Bay Valley prior to and during
exploratory drilling. No archaeological, paleontological or historic resources were
identified. A final report of the survey will be provided to SHPO and AEA.
4. Land development will occur in accordance with the final approved system design and
the placement of supporting infrastructure, such as roads and transmission lines. All
identified constraints will be mitigated as a result of permit approval and construction
methodology.
5. There are no known potential impacts on telecommunications or aviation.
6. The landscape of Hot Springs Bay Valley will be impacted visually and aesthetically;
however, the site is physically separated from Akutan village and settlement lands. The
isolated nature of the site will offset any potential impacts.
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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
Geothermal development at Akutan will entail five phases: I) Prospecting; II) Exploratory well
drilling; III) Final permitting and system design; IV) Production well drilling; and V) Construction
of the power generating facility. Geothermal resource analysis is an ongoing, iterative process
that occurs throughout these phases, but most extensively after the completion of Phases I, II
and IV.
We have completed the first two phases, at a cost of $4.1 million. This Round IV grant
application is requesting funds to complete Phase III, Final Design and Permitting, at a cost of
$2.695 million. Additional in-kind and cash contributions of the city for Phase III are budgeted at
$355,000, making the total cost for Phase III $3,050,000.
The costs of the remaining two phases of the project are the largest components of the project
cost and are also the most difficult to estimate, as many variables may affect the expense of
production well drilling and the cost of the power generating facility. Industry guidelines suggest
that each production and injection well could cost $2 million or more. However, it is unclear how
this will compare to production drilling costs at Akutan where the drilling could be abnormally
shallow (lowering costs) but the remote location could make rig costs abnormally high.
Moreover, it is unknown how many production and injection wells will be needed – anywhere
from one to six production wells may be needed; the same goes for injection wells. Again, only
ongoing and iterative resource analysis will resolve that question.
The industry standard cost for geothermal field development and power plant is around $2500-
$4500 per installed kW in the U.S., according to the United States Department of Energy.
Normally, the larger the plant the better the cost/kW, however, in the case of Akutan, estimates
should always err towards the high end due to the remote location. Hence, for a 10 MW plant,
we estimate that the Hot Springs Bay Valley Geothermal Project will require $45 million to bring
to completion. For a smaller plant, the cost/kW would be greater, perhaps on the order of $6000-
8000/kW. Hence, for a 1.5 MW plant, the cost would be estimated around $9-12 M. Note that this
second number is of interest only if the Akutan Geothermal project were to develop in a modular
fashion; the ultimate installed capacity of the geothermal plant at Akutan is anticipated to be ~10
MW.
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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.)
An industry standard rate for estimating operational and maintenance costs is $0.03/kWh. Given
the remote location of the facility and the difficulty in delivering replacement equipment and
personnel, we have increased this estimate to $0.08/kWh. Some plants can charge more during
peak demand periods. Given the average electrical demand on Akutan of 4.3 MW, and assuming
8,000 working hours annually (~30 days downtime), this calculates to ~$3.0M annual O&M cost.
These expenses will be covered by the cost of the electricity to the users. Assuming a cost of
$0.13/kWh (37% of the current cost of electricity on Akutan), the net revenue generated (after
O&M) is ~$1.5M annually.
4.4.3 Power Purchase/Sale
The power purchase/sale information should include the following:
Identification of potential power buyer(s)/customer(s)
Potential power purchase/sales price - at a minimum indicate a price range
Proposed rate of return from grant-funded project
The single largest power user for this project is Trident Seafoods Corporation. With an annual
cost of electric and heating between $10 million - $14 million, Trident is eager to reduce energy
costs and eliminate its total dependence on diesel. The Akutan Geothermal Development
Project: Geothermal Energy Demand and Stakeholder Assessment (Information Insights,
January 2010) estimates that Trident is effectively paying $0.21 per kWh for electricity, and more
than $6 million annually for heating. This means Trident can substantially reduce costs through
the development of the Hot Springs Bay Geothermal Resource. The US standard cost per
kilowatt-hour at active geothermal power generation projects is $0.031 to $0.080. Even if the
high-end estimate were doubled for Akutan at $0.16 per kWh, the project would still be
economically viable as it is well below Trident’s power costs of $0.21 per kWh and the City’s
costs of $0.32 per kWh.
In a number of meetings with the City and AEA, Trident has expressed interest in the Akutan
Geothermal Development project, and a desire to participate in the development. In that regard,
the City and Trident have executed the Memorandum of Understanding provided in Section 9D.
It is assumed that Trident will become an investor in the project and the primary user of the
resulting power. Therefore, any power purchase agreement for Trident will be subject to a
negotiated “ownership” agreement and most likely a number of requirements of the Regulatory
Commission of Alaska. These activities will be completed as part of the Phase III requirements
defined in this grant application.
4.4.4 Project Cost Worksheet
Complete the cost worksheet form which provides summary information that will be considered
in evaluating the project.
Download the form, complete it, and submit it as an attachment. Document any conditions or
sources your numbers are based on here.
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SECTION 5– PROJECT BENEFIT
Explain the economic and public benefits of your project. Include direct cost savings,
and how the people of Alaska will benefit from the project.
The benefits information should include the following:
Potential annual fuel displacement (gal and $) over the lifetime of the evaluated
renewable energy project
Anticipated annual revenue (based on i.e. a Proposed Power Purchase Agreement price,
RCA tariff, or cost based rate)
Potential additional annual incentives (i.e. tax credits)
Potential additional annual revenue streams (i.e. green tag sales or other renewable
energy subsidies or programs that might be available)
Discuss the non-economic public benefits to Alaskans over the lifetime of the project
The Akutan Geothermal Development Project provides substantial public and financial benefit
for:
a. Achieving national and state goals for the development of renewable energy
resources.
b. Developing State and regional strategies for remotely located renewable energy
resources, particularly the Aleutian Arc of geothermal resources.
c. Eliminate the local dependence on diesel fuel for power and heating – currently
4.6 million gallons annually - and the associated carbon emissions of 50,000 tons
per year.
d. Substantially reduce the cost of power and eliminate State power cost
equalization (PCE) and City of Akutan subsidies.
e. Support local and regional economic expansion related to the Bering Sea fishery;
resource development, including oil and gas; energy dependent industries,
including agriculture; and tourism.
f. Provide a sustainable energy resource that eliminates the uncertainties of rising
fuel costs and a corresponding rise in the cost of goods and services.
The sustainable nature of the project not only protects community and tribal values, but helps to
maintain an important tax base of the City, Aleutians East Borough and the Stat e of Alaska
through the collection of a raw fish tax.
It is important to note that the Akutan Geothermal Development Project is based on a multi-
component model that would provide power and heat for a variety of purposes, including
economic expansion, jobs creation, enhanced tax revenues, and the promotion of new
industries, such as greenhouse agriculture and alternative fuel development. When viewed in
this way, as opposed to a single purpose power project, the potential long-term benefits of this
project certainly warrant the investment of State funds for project continuation.
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Finally, the Akutan Geothermal Development Project provides the added benefits of a public-
private partnership. The geothermal resource is located on private land owned by the Ak utan
Village Corporation and Aleut Regional Native Corporation. The City of Akutan has executed
exploration and development agreements with both owners. It is anticipated that these
agreements will evolve into a consortium approach to resource development and future funding.
In addition, the City intends to seek private equity investment and development funding for the
project, particularly beyond production well drilling. Creating a development partnership with
private investors will both enhance and protect the State’s investment in the project.
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 City of Akutan is committed to the development of this project as a sustainable resource of
the community, the region, and the State of Alaska, as discussed in Section 5, above. This will
require a public-private partnership, where the City, State and federal governments should invest
in identifying and capturing the resource, and private sector partners should build, operate and
maintain a “geothermal utility”. This makes additional renewable energy grant funding requested
in this application extremely important. It also means that the City must continue to invest in the
project through matching funds, loan commitments, in-kind support, and targeted requests for
federal funding.
At the same time, the City’s business model addresses the need for private sector participation.
The following opportunities are actively being pursued by the City:
Participation and equity investment by property owners and power/heat users,
including the City, Trident Seafoods, Akutan Corporation, Akutan Native Village,
and The Aleut Corporation.
Execution of a development agreement with a qualified geothermal development
partner for the design, build, operate and maintain elements of the project.
Identification of government and industrial power/heat users to locate at Akutan,
including resource extraction, Coast Guard operations, alternative fuel production
and recreation/tourism.
The completion of Phase II of the project during the next six months will provide needed
information for the variables of project cost, equity participation, power purchase/sales and O&M
costs. The evaluation of funding strategies will also include an examination of available tax
credits, subsidies, loan guarantees and other incentives which could greatly benefit the long-term
sustainability of the project.
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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.
As detailed in Section 2.6 of this grant application, the Akutan Geothermal Development
Project has been funded to date by City of Akutan cash and in-kind contributions, and AEA
renewable energy grant #2195475, for a total of $4.1 million. With the com pletion of
exploratory drilling in August 2010, additional funding is needed for design and permitting of
production drilling and system development.
Approval of this Round IV grant request will allow the City to complete Phase III of the
project, including the final operational and business plan that will be needed to attract
development partners and investors. It is the intention of the City to complete Phase III
requirements in sufficient time to begin production well drilling in summer 2012.
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.
Two recent reports have documented support by stakeholders, potential investors and the
general public. These are Akutan Geothermal Project: Geothermal Energy Demand and
Stakeholder Assessment, Information Insights, January 2010, and Infrastructure and
Community Development Impact Assessment, RMA Consulting Group, June 2010. Both
studies verify a high level of interest in the project and support for the continuation of
development.
Public meetings were held in Akutan in fall 2009 and spring 2010 to review project status and
receive input from the community. Although there were differing opinions expressed about
the feasibility and potential of the project, support was nearly unanimous that development of
Akutan’s geothermal resource will promote long-term stability and create economic and job
opportunities.
The results of the City’s efforts to measure support for the project and address identified
concerns, include the following:
1. The general community strongly supports development of the Hot Springs Bay
Valley geothermal resource, to provide long-term sustainability of community and
traditional values, to aid economic growth and provide jobs.
2. The Akutan and Aleut Native Corporations continue to support the project and
have reaffirmed their desire to participate in project development through a
consortium approach that would include the Akutan Traditional Tribal Council.
3. In keeping with the Memorandum of Understanding between the City of Akutan
and Trident Seafoods Corporation (Section 9D), Trident participated in a meeting
with AEA in December 2009, to affirm its commitment to the project and its intent
to purchase power from the geothermal project. Since that time, Trident
AEA 11-005 Page 33 of 123 7/21/2010
participated in the development of the energy demand and impact assessments
referenced above. In addition, Trident provided substantial logistical support and
in-kind services for the exploratory drilling program in summer 2010, estimated at
$75,000 - $100,000.
4. When the conceptual design and preliminary business plan tasks of Phase II are
completed, Trident Corporation is prepared to immediately enter negotiations with
respect to power purchase and equity participation, as set forth in Section 3 of the
Memorandum of Understanding. Trident has recently engaged in informal
discussions with the City of Akutan to express the desire to provide project
investment funding. These discussions are continuing.
5. Support was also expressed by other stakeholders and interested parties,
including Aleutians East Borough, Akutan Traditional Tribal Council and
Aleutians-Pribilof Islands Community Development Association (see Akutan
Geothermal Project: Geothermal Energy demand and Stakeholder Assessment,
Information Insights, January 2010).
Letters of support gathered for Phase II of the project are provided in Section 9D of this
application. The City will continue to provide AEA with copies of letters and agreements
pertaining to support for continuation of the project.
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
Provide a narrative summary regarding funding sources and your financial commitment to
the project.
As documented throughout this grant application, both the City and State of Alaska have
directly invested in the exploration of geothermal resources in the Hot Springs Bay Valley of
Akutan. The completion of exploratory drilling in July – August 2010 confirms the presence
of a viable and accessible resource (Section 4.1, above). It is now necessary to complete
Phase II of the project with a conceptual system design and preliminary cost estimates. The
City of Akutan anticipates completing these milestones in the second half of FY 11, using
City funds and possible stakeholder contributions.
With the completion of Phase II, the City will need funds to complete Phase III, Final Design
and Permitting. The City estimates the need for at least $3,050,000 to complete Phase III,
as shown in the Grant Budget Form in Section 9C of this grant application. If additional
funds are needed for Phase III, the City will arrange for needed funds through sources other
than the Renewable Energy Grant Fund.
Total project development costs are estimated at $45 million (Section 4.4.1, above). This
means with the completion of Phases II and III, an additional $38 million will be required for
construction and system development. The City’s goal is to obtain these funds through
stakeholder investment and private equity placement(s).
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The Grant Budget Form in Section 9C of this application provides a listing of project
milestones, funds requested and the City’s proposed matching funds.
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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.
AEA 11-005 Page 36 of 123 7/21/2010
A. Contact information, resumes of Applicant’s Project Manager, key staff,
partners, consultants, and suppliers per application form Section 3.1 and 3.4.
.
Renewable Energy Fund
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B. Cost Worksheet per application form Section 4.4.4.
Renewable Energy Fund
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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. Continuous for estimated 30-year project life.
Unit depends on project type (e.g. windspeed, hydropower output, biomass 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 1 hydropower; 3 diesel
ii. Rated capacity of generators/boilers/other Hydro: 105 kW; Diesel: 70 kW, 125 kW, 150 kW
iii. Generator/boilers/other type Hydro Plant: 1 Canon Industries hydro, 1 Perkins
Diesel
Diesel Plant: 1 Caterpillar diesel, 1 John Deer
diesel
iv. Age of generators/boilers/other 1 Canyon hydro, 15 years; 2 Perkins diesel, 10
years; 1 John Deere diesel, 2 years
v. Efficiency of generators/boilers/other 70% - 80%
b) Annual O&M cost (if system is part of the Railbelt grid, leave this section blank)
i. Annual O&M cost for labor FY 08 - $79,697
ii. Annual O&M cost for non-labor FY 08 - $281,118 (including fuel)
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] 692,000 kWh generated; 560,000 kWh sold
ii. Fuel usage
Diesel [gal] 48,000 gallons
Other
iii. Peak Load 108 kW
iv. Average Load 84 kW
v. Minimum Load 50 kW
vi. Efficiency 14.14 kWh/gallon
vii. Future trends Significant 5-10 year growth to support new infrastructure, Trident Seafoods
and economic expansion.
d) Annual heating fuel usage (fill in as applicable)
i. Diesel [gal or MMBtu] 37,500 gallons
ii. Electricity [kWh]
iii. Propane [gal or MMBtu]
iv. Coal [tons 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
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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]
10 MW
b) Proposed annual electricity or heat production (fill in as applicable)
i. Electricity [kWh] 36.8 million kWh*
ii. Heat [MMBtu] 125,400 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 $45 million
b) Development cost $30 million
c) Annual O&M cost of new system $3.0 million
d) Annual fuel cost none
5. Project Benefits
a) Amount of fuel displaced for
i. Electricity 2.5 million gallons*
ii. Heat 2.1 million gallons*
iii. Transportation
b) Current price of displaced fuel $14.2 million
c) Other economic benefits Expansion of local/regional economy, jobs creation,
increased industrial capacity
d) Alaska public benefits Elimination of PCE subsidy, elimination of 50,000 tons
of carbon emissions, expansion of regional economy,
increased tax revenue
6. Power Purchase/Sales Price
a) Price for power purchase/sale Estimated: $0.13 - $0.16/kWh
7. Project Analysis
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a) Basic Economic Analysis
Project benefit/cost ratio To be determined.
Payback (years)
*Includes Trident Seafoods plant.
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C. Grant Budget Form per application form Section 9.
Renewable Energy Fund Round IV
Grant Application
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Milestone or Task Anticipated
Completion Date
RE- Fund
Grant Funds
Grantee Matching
Funds
Source of Matching
Funds:
Cash/In-kind/Federal
Grants/Other State
Grants/Other
TOTALS
(List milestones based on phase and type of project.
See Attached Milestone list. ) $ $ $
1. Project Scoping and Contractor Solicitation $55,000 $20,000 Cash $75,000
2. Final System Design $2,175,000 $110,000 Cash/in-kind $2,285,000
3. Environmental Assessment and Permitting $195,000 $60,000 Cash $255,000
4. Development Agreements and Site Control $70,000 $25,000 Cash $95,000
5. Power Sales Agreements and Investment
Strategies $35,000 $35,000 Cash/in-kind $70,000
6. Updated Economic and Financial Analysis $125,000 $25,000 Cash $150,000
7. Final Business and Operational Plan $40,000 $80,000 Cash/in-kind $120,000
$ $ $
$
$
TOTALS $2,695,000 $355,000 $3,050,000
Budget Categories:
Direct Labor & Benefits $ $120,000 $120,000
Travel & Per Diem $ $40,000 $40,000
Equipment $ $ $
Materials & Supplies $ $5,000 $5,000
Contractual Services $2,695,000 $190,000 $2,885,000
Construction Services $ $ $
Other $ $ $
TOTALS $2,695,000 $355,000 $3,050,000
Applications should include a separate worksheet for each project phase (Reconnaissance, Feasibility, Design and Permitting, and Construction)-
Add additional pages as needed
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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
recommendations
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 Round IV
Grant Application
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Appendix D: Letters demonstrating local support per application form Section 8.
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Appendix E: An electronic version of the entire application on CD per RFA
Section 1.6.
(Disc provided separately)
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F. Authorized Signers Form.
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Grant Documents Authorized Signers
Please clearly print or type all sections of this form.
Community/Grantee Name:
City of Akutan
Regular Election is held:
Date:
Authorized Grant Signer(s):
Printed Name Title Term Signature
Joseph Bereskin Mayor
I authorize the above person(s) to sign Grant Documents:
(Highest ranking organization/community/municipal official)
Printed Name Title Term Signature
Hermann J. Tuna
Scanlan, D.P.A.
City Administrator
Grantee Contact Information:
Mailing Address: 3380 C Street Suite 205
Anchorage AK 99503
Phone Number: 907.274.7565
Fax Number: 907.1813
E-mail Address: akutanadmin@gci.net
Federal Tax ID #:
Please submit an updated form whenever there is a change to the above information.
Please return the original completed form to:
Alaska Energy Authority
813 W. Northern Lights Blvd.
Anchorage, AK 99503
Attn: Butch White, Grants Administrator
Renewable Energy Fund
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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.
Renewable Energy Fund
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Introduced by: Mayor Joe Bereskin
Date: September 14, 2010
Public Hearing: September 14, 2010
CITY OF AKUTAN, ALASKA
RESOLUTION NO. 11-
A RESOLUTION OF THE AKUTAN CITY COUNCIL AUTHORIZING THE MAYOR OF
AKUTAN TO SERVE AS THE CITY’S POINT OF CONTACT WITH RESPECT TO AN
ALASKA ENERGY AUTHORITY GRANT APPLICATION THROUGH THE STATE OF
ALASKA RENEWABLE ENERGY FUND FOR THE HOT SPRINGS BAY VALLEY
GEOTHERMAL PROJECT; CONFIRMING THE LOCAL MATCH MADE IN THE CITY’S
APPLICATION; AND CERTIFYING COMPLIANCE WITH APPLICABLE FEDERAL, STATE
AND LOCAL LAWS.
WHEREAS, in 2008 the Alaska Legislature passed House Bill 152 establishing a Renewable
Energy Fund and authorizing the Alaska Energy Authority (AEA) to distribute renewable energy
grants to Alaskan communities to meet current and prospective energy needs through
alternative energy sources and a reduction in dependence on fossil fuels; and
WHEREAS, in March 2009, the City of Akutan was awarded funding for the Hot Springs Bay
Valley Geothermal (HSBV) Project during AEA’s Round II application phase; and
WHEREAS, the City of Akutan has successfully completed the feasibility and reconnaissance
milestones of the HSBV grant and has begun the exploratory drilling milestone in July 2010; and
WHEREAS, The City wishes to seek further funding through the Round IV Renewable Energy
Fund application process to continue the drilling program, ascertain access, and continue
business plan development; and
WHEREAS, The City of Akutan is a second class city, and as a local government with an
electric utility holding a certificate of public convenience and necessity, qualifies as an eligible
applicant;
NOW THEREFORE BE IT RESOLVED BY THE COUNCIL OF THE CITY OF AKUTAN:
SECTION 1. The Mayor of Akutan is authorized to serve as the City’s point of contact, to
represent the City for purposes of its application to AEA for Round IV funding for Hot Springs
Bay, and to administer any grants from AEA which may be awarded.
SECTION 2. The Council authorizes submittal of a grant application to AEA for the Hot Springs
Bay Valley alternative energy project, through Round IV funding from the Renewable Energy
Fund, at the match amounts stated in those applications.
SECTION 3. The Council certifies that to the best of the City’s belief and knowledge, the City is in
compliance with all federal state, and local laws, including existing credit and federal tax
obligations.
SECTION 4. Effective Date. This Ordinance shall become effective immediately upon
adoption.
Renewable Energy Fund
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PASSED this __ day of September, by a vote of ___ in favor and ___ opposed.
Joe Bereskin, Mayor
ATTEST:
_________________________________
Amanda Tcheripanoff, City Clerk
Renewable Energy Fund
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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.*
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*The City of Akutan is currently resolving its compliance obligations with the State of Alaska
Public Employees Retirement System (PERS) with respect to certain employee enrollment
dates and classifications. Also, there is a $735.09 underpayment of Federal payroll taxes (Form
941) for the tax year/period 2009/12 being resolved. To the best of my knowledge, the City is in
compliance with all other federal and State laws.
Renewable Energy Fund
Grant Application Round IV
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I. Preliminary Summary of Findings: Akutan Exploratory Drilling Program
Renewable Energy Fund
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Renewable Energy Fund
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Renewable Energy Fund
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