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HomeMy WebLinkAboutEva Creek Wind Turbine Purchase 2010 Application Renewable Energy Fund Round IV Grant Application AEA 11-005 Application Page 1 of 45 7/21/2010 Application Forms and Instructions The following forms and instructions are provided to assist you in preparing your application for a Renewable Energy Fund Grant. An electronic version of the Request for Applications (RFA) and the forms are available online at: http://www.akenergyauthority.org/RE_Fund-IV.html Grant Application Form GrantApp4.doc Application form in MS Word that includes an outline of information required to submit a complete application. Applicants should use the form to assure all information is provided and attach additional information as required. Application Cost Worksheet Costworksheet4.doc Summary of Cost information that should be addressed by applicants in preparing their application. Grant Budget Form GrantBudget4.doc A detailed grant budget that includes a breakdown of costs by milestone and a summary of funds available and requested to complete the work for which funds are being requested. Grant Budget Form Instructions GrantBudgetInstructions4.pdf Instructions for completing the above grant budget form. • If you are applying for grants for more than one project, provide separate application forms for each project. • Multiple phases for the same project may be submitted as one application. • If you are applying for grant funding for more than one phase of a project, provide milestones and grant budget for completion of each phase. • If some work has already been completed on your project and you are requesting funding for an advanced phase, submit information sufficient to demonstrate that the preceding phases are satisfied and funding for an advanced phase is warranted. • If you have additional information or reports you would like the Authority to consider in reviewing your application, either provide an electronic version of the document with your submission or reference a web link where it can be downloaded or reviewed. REMINDER: • Alaska Energy Authority is subject to the Public Records Act AS 40.25, and materials submitted to the Authority may be subject to disclosure requirements under the act if no statutory exemptions apply. • All applications received will be posted on the Authority web site after final recommendations are made to the legislature. • In accordance with 3 AAC 107.630 (b) Applicants may request trade secrets or proprietary company data be kept confidential subject to review and approval by the Authority. If you want information is to be kept confidential the applicant must: o Request the information be kept confidential. o Clearly identify the information that is the trade secret or proprietary in their application. o Receive concurrence from the Authority that the information will be kept confidential. If the Authority determines it is not confidential it will be treated as a public record in accordance with AS 40.25 or returned to the applicant upon request. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 2 of 45 7/21/2010 SECTION 1 – APPLICANT INFORMATION Name (Name of utility, IPP, or government entity submitting proposal) Golden Valley Electric Association Type of Entity: Non-Profit Cooperative Electric Utility Mailing Address P.O. Box 71249 Fairbanks, AK 99707 Physical Address 758 Illinois Street Fairbanks, AK 99701 Telephone 452-1151 Fax Email 1.1 APPLICANT POINT OF CONTACT / GRANTS MANAGER Name Mike Wright Greg Wyman Title VP, Transmission & Distribution Manager of Construction Services Mailing Address P.O. Box 71249 Fairbanks, Alaska 99707 Telephone (907)451-5679 (907) 451-5629 Fax Email mjw@gvea.com gew@gvea.com 1.2 APPLICANT MINIMUM REQUIREMENTS Please check as appropriate. If you do not to meet the minimum applicant requirements, your application will be rejected. 1.2.1 As an Applicant, we are: (put an X in the appropriate box) X An electric utility holding a certificate of public convenience and necessity under AS 42.05, or An independent power producer in accordance with 3 AAC 107.695 (a) (1), or A local government, or A governmental entity (which includes tribal councils and housing authorities); Yes 1.2.2. Attached to this application is formal approval and endorsement for its project by its board of directors, executive management, or other governing authority. If the applicant is a collaborative grouping, a formal approval from each participant’s governing authority is necessary. (Indicate Yes or No in the box ) Yes 1.2.3. As an applicant, we have administrative and financial management systems and follow procurement standards that comply with the standards set forth in the grant agreement. Yes 1.2.4. If awarded the grant, we can comply with all terms and conditions of the attached grant form. (Any exceptions should be clearly noted and submitted with the application.) Yes 1.2.5 We intend to own and operate any project that may be constructed with grant funds for the benefit of the general public. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 3 of 45 7/21/2010 SECTION 2 – PROJECT SUMMARY This is intended to be no more than a 1-2 page overview of your project. 2.1 Project Title – (Provide a 4 to 5 word title for your project) Eva Creek Wind Turbine Purchase 2.2 Project Location – Include the physical location of your project and name(s) of the community or communities that will benefit from your project. The project site is located on the east side of the Nenana River near Ferry, Alaska. It will benefit members of the GVEA Cooperative in the communities served by GVEA. These communities include Cantwell, Healy, Ferry, Anderson, Nenana, Ester, Fox, Fairbanks, Ft. Wainwright, North Pole, Eielson AFB, Salcha, Ft. Greely, and Delta Junction. 2.3 PROJECT TYPE Put X in boxes as appropriate 2.3.1 Renewable Resource Type X Wind Biomass or Biofuels Hydro, including run of river Transmission of Renewable Energy Geothermal, including Heat Pumps Small Natural Gas Heat Recovery from existing sources Hydrokinetic Solar Storage of Renewable Other (Describe) 2.3.2 Proposed Grant Funded Phase(s) for this Request (Check all that apply) Reconnaissance Design and Permitting Feasibility X Construction and Commissioning Conceptual Design 2.4 PROJECT DESCRIPTION Provide a brief one paragraph description of your proposed project. GVEA plans to award the EPC contract and a Wind Turbine Purchase contract in April, 2011. The Wind Turbine Purchase contract will require a 10% down payment based on discussions with possible wind turbine suppliers. GVEA will be purchasing 12 – 24 wind turbines depending on the results of a wind turbine evaluation. The turbines under review are sized from 1 – 2.2 MW. The total planned output of the Eva Creek Project is 24 MW. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 4 of 45 7/21/2010 2.5 PROJECT BENEFIT Briefly discuss the financial and public benefits that will result from this project, (such as reduced fuel costs, lower energy costs, etc.)  The overall benefit of the Eva Creek Wind project is the reduced reliance on oil fired generation for GVEA and its members. The cost of power from the project will be rate neutral or result in a slight reduction of the cost of power based on the current and projected price of oil. If carbon taxes are implemented in the future the cost saving to GVEA and its member will increase based on the amount of fossil fuel that is off-set by the wind farm and the tax rate. The reduction in oil fired local generation in Fairbanks also helps with the air quality issues currently facing the Fairbanks North Star Borough. 2.6 PROJECT BUDGET OVERVIEW Briefly discuss the amount of funds needed, the anticipated sources of funds, and the nature and source of other contributions to the project. The total estimated cost of the project is $93,300,000. GVEA has been awarded $2,000,000 REF Round I Funds. The estimated cost of the wind turbine purchase is $37,702,600 based on a year 2008 proposal. GVEA is requesting and additional grant for $1,463,200 towards the wind turbine purchase. GVEA has been approved for $93,000,000 in Clean Renewable Energy Bond (CREB) financing which will be used for the balance of the project. The actual cost for the turbine purchase can not be determined until the turbine selection is final. 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. $ 1,463,200 2.7.2 Other Funds to be provided (Project match) $ 36,329,400 2.7.3 Total Grant Costs (sum of 2.7.1 and 2.7.2) $ 37,702,600 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) $ 93,300,000 2.7.5 Estimated Direct Financial Benefit (Savings) $7.8 - $10.3million (fuel) 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.) $ Approximately 50,000 tons of CO2 offset per year Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 5 of 45 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. 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. Greg Wyman – Project Manager – gew@gvea.com – (907) 451-5629 Mike Wright – Project Sponsor – mjw@gvea.com – (907) 451-5679 A firm with wind farm construction/project management experience will be hired to act as the owners-engineer to assist with project management. A firm with wind turbine economic experience will be hired to assist with the selection and to negotiate the purchase contract. 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.) GVEA intends to execute a contract for the purchase of wind turbines and towers in the second quarter of 2011. The following is a complete project schedule: 2009: Initial decision to proceed to detailed feasibility phase 3/2010 – 11/2010: Complete initial feasibility assessment as follows: • Complete initial project wind turbine layout using typical WTG • Determine additional meteorological tower layout requirements • Determine estimated project production based on preliminary information • Determine all land requirements for access, electrical, roads, and other infrastructure. • Determine electrical interconnect requirements and location • Determine permit requirements for avian study (consideration is given to conduct preliminary Avian assessment to help determine final permitting requirements), wet lands, other constraints and noise analysis requirements. Please see Appendix B for a listing of potential environmental assessment, permitting and licensing areas. • Prepare initial development and construction scope to minimize risk • Refine development schedule and capital cost estimate • Refine project operating and financial model Identify required information specification for WTG and any other major equipment (transformers, switchgear) commitments. • Establish definitive plan, schedule and budget for development to major equipment commitments • Additional meteorological towers are erected, most likely multiple towers at hub height. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 6 of 45 7/21/2010 • Refine cost effectiveness of project in reducing GVEA fuel and overall power costs • Prepare final project evaluation results for final presentation to management. 5/2010: Board commitment to proceed to the development phase and the following development activities are initiated: • Permitting, Environmental Impact, Avian (incorporate all prior study information into plan) and Noise studies effort are initiated as required for project permitting. • Interconnect plan is developed. • Required land acquisition/royalty agreements are initiated. • Project civil and electrical design effort is initiated. • A definitive development and construction strategy is defined. • Wind turbine, major equipment suppliers and contractors are engaged to develop a supplier and contracting plan. 3/2011: All of the conditions precedents have been achieved for a decision to proceed to construction: • 12 months of additional meteorological data has been acquired with micro siting met towers, correlated to long term sites, a definitive WTG layout has been made and definitive production estimates have been developed. A net energy production assessment is completed. • All environmental permits have been negotiated or substantially complete. • All required land acquisition/royalty agreements are in place or substantially complete. • Project civil and electrical design is complete based on assumed turbine type, subject to minor modifications with alternative turbine selection. • The project procurement plan is in place and the following agreements may be ready for execution: • Wind Turbine Supply and Erection • Transformer and Switchgear (Unless included in construction contracts) • Substation and Transmission Construction • Engineering, Balance of Plant and Construction • A definitive capital cost budget and operating/financial model have been refined that reflect the appropriate returns for the investment based on all information acquired to date. 7/2011: Detailed engineered civil and electrical design is completed 7/2011: Begin civil/electrical underground construction to engineered design 4/2012: Begin major equipment delivery 6/2012: Complete project civil and electrical underground construction Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 7 of 45 7/21/2010 8/2012: Complete: • WTG erection and commissioning • Electrical construction and electrical commissioning including substation and transmission interconnect 9/2012: Commercial Operation • All equipment installed and engineer sign off for proper installation and operation • All infrastructure support services (O&M building, Operations center, SCADA system, internal utility support systems, and trained technicians with proper vehicles, tools and spare parts supply) in place Final turbine supply operation criterions’ testing begin and is completed according to wind turbine supply agreement for availability and power performance. 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.) EVA Creek 24 MW Wind Project Milestones The following typical milestone schedule follows that is based on a 33 month development plan for commercial operation of a potential project at Eva Creek for operation in September 2011: 1/2009: Initial decision to proceed to detailed feasibility phase (assuming funding) 4/2010: Complete initial feasibility assessment 5/2010: Final management commitment is to proceed to the development phase. 3/2011: All of the conditions precedents have been achieved for a decision to proceed to construction. Major equipment orders are placed 7/2011: Detailed engineered civil and electrical design is completed 7/2012: Begin civil/electrical underground construction to engineered design 4/2012: Begin major equipment delivery 6/2012: Complete project civil and electrical underground construction 8/2012: Complete WTG erection and commissioning 9/2012: Commercial Operation Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 8 of 45 7/21/2010 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. GVEA personnel and contracted consultants will be working on this project. The GVEA team includes: • Kathryn K. Lamal, Vice President of Power Supply, GVEA • Mike Wright, PE, Vice President of Transmission and Distribution, GVEA • Tim DeVries, PE, Manager of Engineering Services, GVEA • Paul Morgan, GVEA Wind Specialist and Alternative Energy Team member • Daniel R. Bishop, PE, GVEA Senior Engineer • Henri Dale, PE, GVEA Power System Manager • Greg Wyman, PE, GVEA Manager of Construction Services GVEA will coordinate all resources for the project, contracting equipment or personnel as needed. GVEA anticipates selecting a turbine vendor who will provide overall WTG design, an engineering firm to assist with civil and electrical design and civil/electrical contractors for construction. The vendors, engineers and contractors will be selected as needed within the project timeline. 3.5 Project Communications Discuss how you plan to monitor the project and keep the Authority informed of the status. GVEA proposes to provide quarterly progress reports and more if needed and appropriate during the actual construction and installation of the wind turbine farm. Greg Wyman will be the point of contact for all progress reports and communication about the project. Any unexpected delays, issues, problems and/or concerns will be communicated to ensure AEA is apprised and can offer a perspective on an appropriate resolution or project adjustment. Communication through quarterly reports will: • Detail project activities completed to date, • Identify existing or potential problems not previously anticipated, • Outline the activities targeted for the next reporting period, and • Provide project photos to demonstrate progress on the project especially when it gets to the construction phase. The quarterly report will also account for expenditures to date and identify discrepancies between budget and new cost estimates. Other required reporting requested by AEA will be accommodated. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 9 of 45 7/21/2010 3.6 Project Risk Discuss potential problems and how you would address them. The greatest risk of any wind project is the availability of wind, and in this instance we know we have a consistent wind resource as a result of our six years of work studying wind resources in the GVEA service area. Meteorological towers which have been on- site since 2003 demonstrate we have a good wind capacity factor of 33 - 36% at Eva Creek. The latest modeling for wind at 80 meters has a 38 – 40% gross capacity factor. The construction risks associated with the Eva Creek Wind Project will be similar to the risks of any construction project in Alaska. There is nothing we have uncovered through feasibility studies and our understanding and experience in working during the Interior’s limited construction season that we believe will pose problems to prevent a successful installation. With funding we can move ahead relatively quickly to secure the required permits and mitigate concerns. Environmental issues can be a potential problem; however, in this case GVEA has recent experience obtaining permits in the proposed project area during the permitting process for the Northern Intertie. Specific permitting and environmental issues are discussed in Section 4. The location of the proposed wind project will make construction more of a challenge. GVEA will need to make road improvements as part of the project. GVEA’s construction experience with the Northern Intertie will likewise prove valuable during this project. Availability of large WTG’s is also a risk factor. GVEA has been and will continue to be in discussions with WTG vendors to ensure availability if this grant application is approved. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 10 of 45 7/21/2010 SECTION 4 – PROJECT DESCRIPTION AND TASKS • Tell us what the project is and how you will meet the requirements outlined in Section 2 of the RFA. • The level of information will vary according to phase(s) of the project you propose to undertake with grant funds. • If you are applying for grant funding for more than one phase of a project provide a plan and grant budget form for completion of each phase. • If some work has already been completed on your project and you are requesting funding for an advanced phase, submit information sufficient to demonstrate that the preceding phases are satisfied and funding for an advanced phase is warranted. 4.1 Proposed Energy Resource Describe the potential extent/amount of the energy resource that is available. Discuss the pros and cons of your proposed energy resource vs. other alternatives that may be available for the market to be served by your project. The Eva Creek Wind Project is planned to be a 24 MW wind farm located on the east side of the Nenana River near Ferry, Alaska, in the GVEA service territory in the Interior. Preliminary wind resource studies indicate that the gross capacity factor for this project would be approximately 36% with a net capacity factor of approximately 33%. This capacity factor translates into an annual energy production of 68.5 GWh. Current modeling of the wind resource at 80 meters results in a gross capcity factor of 38 – 40%. [Note: Benefits are addressed in Section 2 above.] The Eva Creek Wind project would provide clean, renewable energy that would (a) reduce the emission of greenhouse gasses, (b) help GVEA meet its renewable energy pledge of 20% by 2014, and (c) support Federal facilities in GVEA’s service area meet their green mandates. Furthermore, the cost of production (including capital recovery) would likely be below the variable cost of generation for many of GVEA’s existing generation resources. The Eva Creek project would be subject to intermittent energy generation that would necessitate daily resource regulation planning which would likely result in periodic inefficiencies in operation of its existing assets. GVEA has a diversified mix of generation as discussed previously in this application. Other alternatives to wind in GVEA service territory are biomass; hydro, solar and geothermal. The proposed projects are relatively small and will not be sufficient to meet GVEA renewable energy pledge. The cost of power may also come in close to avoided cost which would provide no rate relief to GVEA’s members. Solar is too costly at this time; however, GVEA does support small scale solar projects through the SNAP program. GVEA has received grants to study hydro resources along the Nenana and Tanana rivers which proved to not be commercially viable. GVEA does support the renewed study of the Susitna Hydro project and would enter into a power sales agreement if the project were to move forward. There has recently been the development of a small geothermal plant at the Chena Hot Springs Resort east of Fairbanks; however, it is over 30 miles to the nearest GVEA electrical facilities. GVEA has contacted or has been contacted by several firms to determine if a Power Purchase Agreement for non-GVEA owned wind farm would be more cost effective than building our own plant. All the proposals received exceeded our estimated cost of power from the Eva Creek Project. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 11 of 45 7/21/2010 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. GVEA is a not-for-profit, rural electric cooperative providing electric service to a large area in the interior of Alaska, including residents in the Fairbanks, Delta, Nenana, Healy, and Cantwell areas. The GVEA mission statement is “To provide our member-owners and communities with quality electric service, quality customer service and innovative energy solutions at fair and reasonable prices.” To meet this objective, GVEA relies on its self-owned generation, transmission, and distribution facilities described in this section and depicted in Figure 2-1. It also participates in firm and non-firm power purchase exchanges. GVEA currently operates and maintains 3,047 miles of transmission and distribution lines and 36 substations. GVEA transmission facilities extend as far south as Healy, north to the Ft. Knox substation, and southeast to the Jarvis Creek substation and to Alyeska Pump Station 9. The system is interconnected with Fort Wainwright, Eielson Air Force Base, the University of Alaska-Fairbanks, and the electric utilities in the Railbelt by way of the Anchorage-to-Healy Intertie (AH Intertie). GVEA is the northern control point for the AH Intertie, which has a maximum rating of 79 MW of transfer capability. The AH Intertie is owned by the State of Alaska and operated under multi-party agreements. Currently GVEA has a total firm capacity resources of 258.6 MW (peak winter ratings), comprised of 217.6 MW of self-owned generation capacity, 20 MW from Bradley Lake, and 21 MW of firm energy purchases from Aurora Energy. The primary characteristics of these resources are shown in Table 2-1. As seen in the table, GVEA’s existing capacity is a mixture of combustion turbine (190.6 MW), coal (27 MW), contracted hydroelectric capacity (20 MW) and contracted coal (21 MW). Most units have already achieved a long service life with all combustion turbine units except for the new combined-cycle plant on-line prior to 1977, and the coal (Healy) facility has been in operation since 1967. The Bradley Lake hydroelectric facility is relatively new, however, as it came on-line in 1991 and, as with most hydroelectric facilities, is expected to have a unit life of 50 years or more. As shown in Figure 2-1, the GVEA generating plants are dispersed in and around Fairbanks, with the exception of the Healy coal unit and Bradley Lake. Table 2-1 also lists the fuel type and heat rate of the GVEA resources. GVEA’s combustion turbine capacity operates on heavy atmospheric gas oil (HAGO) with the exception of the John Brown unit, which operates on No. 1 diesel fuel. The full load, net plant heat rates for the combustion turbine units range from a low of 6,638 Btu/kWh for North Pole 1X1 combined cycle plant, to 14,587 Btu/kWh for Zehnder 2. GVEA also owns and operates two 2.8 MW diesel generators used for peaking and black start situations. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 12 of 45 7/21/2010 Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 13 of 45 7/21/2010 Table 2-1 GVEA-Owned Capacity and Bradley Lake Contracted Capacity GVEA Generation Resources Characteristics Location Type Year Installed Fuel Capacity (January) Full Load NPHR (Btu/kWh)(4) North Pole 1 North Pole CT Frame 7 1976 HAGO 63.6 MW 10,085 North Pole 2 North Pole CT Frame 7 1977 HAGO 65.5 MW 9,886 Zehnder 1 Headquarters CT Frame 5 1971 HAGO 19.6 MW 14,325 Zehnder 2 Headquarters CT Frame 5 1972 HAGO 18.8 MW 14,587 John Brown Delta CT Frame 5 1976 De#1 23.1 MW 13,587 Healy 1 Healy ST-Coal 1967 Coal 27.0 MW 11,501 Bradley Lake Homer Hydro 1991 Hydro 20.0 MW 0.0 BESS Fairbanks Energy Storage 2003 Battery 46 MW (for 5 min) NA North Pole 1x1 North Pole CC- LM6000 April, 2006 Naphtha 59.9 MW 6,638 Aurora Fairbanks ST - Coal 21.0 / 4 MW - Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 14 of 45 7/21/2010 4.2.2 Existing Energy Resources Used Briefly discuss your understanding of the existing energy resources. Include a brief discussion of any impact the project may have on existing energy infrastructure and resources. The interaction of net plant heat rate and fuel cost generally determine the dispatch order on a utility system. Following the principles of economic dispatch, the North Pole CT units are operated at a higher capacity factor than the Zehnder units or John Brown. GVEA combustion turbine operation is also economically dispatched against the availability of economy power sales from Chugach Electric or Anchorage Municipal Light & Power over the Anchorage – Healy Intertie. Healy 1 has a full load, net plant heat rate estimated to be 13,596 Btu/kWh, although its low fuel cost results in a base load dispatch of the facility during the year. GVEA also purchases 100% of the output as base load from the Aurora Energy coal plant located in Fairbanks. Under the operating agreement for Bradley Lake, Chugach Electric dispatches the hydro facility but GVEA is afforded scheduling flexibility and is able to largely use the Bradley Lake energy in a peak shaving mode where it has the greatest value. The principal value of a wind project in the GVEA system is to displace higher electric energy resources. The energy from the proposed Eva Creek Project will be used to off-set combustion turbine energy. Reducing emissions from fossil fuels with a renewable resource is a major benefit of the project. The reduction in emissions will be from reduced oil consumption by GVEA’s combustion turbine. Wind power will not be able to eliminate all CT energy as some level of CT generation will be required to provide regulation due to the variability of wind. An additional goal of this project is to reduce the cost of power to the rate payer. Regulation costs in order to integrate a large scale wind project such as EVA Creek into the GVEA system may be expensive due to the weak nature of the interconnected Railbelt grid. The reduction in capital costs to the rate GVEA’s rate base through a grant will improve the cost benefit to the rate payer. 4.2.3 Existing Energy Market Discuss existing energy use and its market. Discuss impacts your project may have on energy customers. GVEA sells over 1.3 billion kWh of electricity a year. The majority of this energy comes from burning fossil fuel as discussed previously. Energy sales are split evenly among residential, commercial and industrial loads. The impact of this project will be the reduction of fossil fuel burned by GVEA to generate electric energy with a secondary goal of also reducing the overall cost of power to all ratepayers. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 15 of 45 7/21/2010 4.3 Proposed System Include information necessary to describe the system you are intending to develop and address potential system design, land ownership, permits, and environmental issues. 4.3.1 System Design Provide the following information for the proposed renewable energy system: • A description of renewable energy technology specific to project location • Optimum installed capacity • Anticipated capacity factor • Anticipated annual generation • Anticipated barriers • Basic integration concept • Delivery methods The Eva Creek Wind project is proposed to have a capacity of 24 MW. The estimated capacity factor for this project is 36.2% (gross) and 32.6% (net), resulting in an annual energy generation of 68.5 GWh. Current modeling with 80 meter towers indicates that the gross capacity factor may reach 38 – 40%. Anticipated barriers include the high capital cost (on the order of $4000/kW) and potential permitting issues as discussed in Section 4.3.3. Basic integration concept – the project will operate intermittently depending on wind resource to displace the cost of otherwise operating less economical hydrocarbon fuel combustion turbines. However, the intermittent nature of the wind resource will necessitate system regulation requirements and associated costs of implementation. Cost of regulation includes the cost of always maintaining the ability to pick up or drop generation on fast-reacting combustion turbines. The cost of regulation may vary significantly depending on factors such as wind variability, system load, available system resources, fuel costs, etc. A study will be conducted to determine the possibility of using GVEA’s Battery Energy Storage System to provide regulation. Delivery methods – energy will be generated and delivered into the existing GVEA system. The proposed collection substation will be constructed adjacent to the Northern Intertie. 4.3.2 Land Ownership Identify potential land ownership issues, including whether site owners have agreed to the project or how you intend to approach land ownership and access issues. The land identified for the GVEA Eva Creek wind generation farm is currently owned by the following agencies and entities. • State of Alaska, Department of Natural Resources (DNR) • State of Alaska, DOT • University of Alaska • Private Land Owners • Unpatented State Mining Claims • Alaska Railroad Corporation Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 16 of 45 7/21/2010 The State of Alaska, DNR, is the largest land owner in the area. GVEA has met with DNR on a preliminary basis and they are supportive of this project. No formal land use or permit applications have been submitted. There is an existing 100-foot wide access road (Ferry Road/Eva Creek Road). Portions of the existing road will serve well as is and other portions will need to be upgraded or widened to accommodate trucks transporting equipment to the site. GVEA will work with the State of Alaska DNR and DOT on the road use and any necessary changes to the existing road. The Alaska Railroad will be the access point to the project and will be involved in material staging. The other land owners have not been contacted at this point. 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 GVEA staff has identified a number of permits required before we can proceed with the project. Listed below are the areas and the Government Agencies involved: • List of applicable permits State of Alaska, DNR State Historical Preservations Office (SHPO) Fish & Game Forestry DEC (road work) DOT/PF Alaska Railroad (ARRC) Federal Aviation Administration (FAA) U.S. Army Corp of Engineers (USACE) Wetlands River Crossing Easements (Private land owners) Potential barriers include: Historically, the biggest detraction of wind energy projects from an environmental standpoint is the effect on avian mortality. Much of this detraction has been remedied through the design and use of turbine blades that spin slower. Depending on the location of the project, noise can also be an issue. Critics of wind energy projects have raised concerns that the noise emitted from operation of a wind turbine constitutes a nuisance or harms wildlife. Some states have enacted statutes prescribing allowable noise levels that must be met by a project. Other environmental concerns with the permitting of wind projects involve wildlife issues where a project may disturb wildlife habitat. In addition, because the development of a site often requires grading and construction, erosion issues and the effect of the construction on habitats and riparian zones may have to be addressed. • It is anticipated that permitting will take at least one year and is scheduled for completion in 2011. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 17 of 45 7/21/2010 • Ferry Road will require realignment and grading, taking improvements outside the 100 foot right-of-way, it is unknown at this time whether there will be opposition to this re-alignment. This May GVEA held an informal meeting in the community which was well attended to discuss the potential project. Ferry is a community of approximately 20 households. In addition, there are a number of seasonal cabins located in the area. • As with all Wind projects, the avian interaction will be closely looked at; however, the US Fish and Wildlife has expressed support for renewable energy projects and their willingness to work with GVEA. GVEA conducted an extensive avian study which included this area as part of the Northern Intertie project. 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 Any potential issues and mitigating measures with respect to the following will be identified during the agency review and public comment period through the State permit process. • Threatened or endangered species – unlikely in this area based on the work conducted for the Northern Intertie project. • Habitat issues – little impact to wildlife habitat, hunting activities may be slightly impacted, but we have had some discussions with local residents and don’t believe access will be limited. • Wetlands and other protected areas – no protected areas but some areas of ridge top wetlands will require an individual permit. • Archaeological and historical resources – Surveys have been done at the current met (meteorological) sites and no significant findings have been found. Individual WTG tower sites will be examined. • Land development constraints – dependant on public comment and DNR stipulations. • Telecommunications interference – Area is outside of microwave and cell corridors, no interference is expected. • Aviation consideration – The area does not affect commercial traffic, but is in an area between Fairbanks and Healy, subject to both private and military low flying aircraft. Based on public and FAA comments, measures may be taken to mitigate. • Visual, aesthetics impacts – area falls about 12 miles east of the transportation corridor and may be visible along ridge tops. Public comment will be taken as part of the permitting process. Avian study - Area has previously been identified as a major Sandhill Crane migration route and will require further study to mitigate any impacts. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 18 of 45 7/21/2010 4.4 Proposed New System Costs and Projected Revenues (Total Estimated Costs and Projected Revenues) The level of cost information provided will vary according to the phase of funding requested and any previous work the applicant may have done on the project. Applicants must reference the source of their cost data. For example: Applicants Records or Analysis, Industry Standards, Consultant or Manufacturer’s estimates. 4.4.1 Project Development Cost Provide detailed project cost information based on your current knowledge and understanding of the project. Cost information should include the following: • Total anticipated project cost, and cost for this phase • Requested grant funding • Applicant matching funds – loans, capital contributions, in-kind • Identification of other funding sources • Projected capital cost of proposed renewable energy system • Projected development cost of proposed renewable energy system Total anticipated project cost - $93,300,000 Design costs - $3,000,000 Construction costs - $90,300,000 Requested grant funding - $1,463,200 Applicant matching funds - $36,329,400 (for this application) Other funding sources • $2,000, 000 REF Grant (design and construction) • CREB funding for the balance of the project 4.4.2 Project Operating and Maintenance Costs Include anticipated O&M costs for new facilities constructed and how these would be funded by the applicant. (Note: Operational costs are not eligible for grant funds however grantees are required to meet ongoing reporting requirements for the purpose of reporting impacts of projects on the communities they serve.) The following table summarizes the estimated annual operating costs for the project for the first five years of operation. Subsequent year costs are escalated at 2.5%. Note that the first two years of operation are assumed to be under manufacturer warranty, as indicated by a lower WTG maintenance cost than subsequent years. This estimate was prepared by Sterling Energy for our 2008 grant application. In our current financial model we are using a more conservative O&M rate of $1,000,000 for the first year with 2.5% per year escalator. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 19 of 45 7/21/2010 O&M Cost Details ($) Year 1 Year 2 Year 3 Year 4 Year 5 Labor Support / Supplies $342,116 $342,116 $418,346 $418,346 $418,346 Required Equipment Costs $3,592 $3,592 $7,926 $7,926 $7,926 Parts Usage After Warranty $99,575 $99,575 $99,575 O&M Facilities $16,460 $16,460 $16,460 $16,460 $16,460 O&M Transmission $34,000 $34,000 $34,000 $34,000 $34,000 O&M Electrical Usage $8,000 $8,000 $8,000 $8,000 $8,000 Subtotal Annual Cost $404,168 $404,168 $584,307 $584,307 $584,307 Cost per Turbine 16 WTGs $25,261 $25,261 $36,519 $36,519 $36,519 Parts Initial Purchase for Stock Year 3 $799,035 Cost per Turbine $49,940 Annual G&A Costs $100,000 Costs quoted in year 2008 prices Annual cost escalator: 2.50% 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 GVEA members will purchase the power generated by the Eva Creek Wind Project. GVEA’s financial modeling indicates that the cost of power from the wind farm will be less than our current avoided cost of energy which is approximately 0.10/kWh. The estimated cost – benefit ratio of the project is 1.2 based on 17 years, 2% CREB financing and $7.8 million in annual savings. The return will vary and be directly related to the cost of fossil fuels and any potential carbon taxes. 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. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 20 of 45 7/21/2010 SECTION 5– PROJECT BENEFIT Explain the economic and public benefits of your project. Include direct cost savings, and how the people of Alaska will benefit from the project. The benefits information should include the following: • Potential annual fuel displacement (gal and $) over the lifetime of the evaluated renewable energy project • Anticipated annual revenue (based on i.e. a Proposed Power Purchase Agreement price, RCA tariff, or cost based rate) • Potential additional annual incentives (i.e. tax credits) • Potential additional annual revenue streams (i.e. green tag sales or other renewable energy subsidies or programs that might be available) • Discuss the non-economic public benefits to Alaskans over the lifetime of the project Potential annual fuel displacement (gal and $) over the lifetime of the evaluated renewable energy project: Potential fuel savings will be dependant on what power is displaced by the wind energy. GVEA’s NPP GT 1 & 2 use 4,952,000 gallons of HAGO ($2.08/gal) to produce 68,000MWhrs for an annual savings of $10,300,000. NPEP uses 4,195,000 gallons of naphtha ($1.87/gal) to produce 68,000MWhrs for an annual savings of $7,845,000. GVEA’s members will save between $157 and $206 million dollars over the 20 year life of the project based on current fuel prices. Essentially fuel savings will be somewhere between 84 to 100 million gallons. Potential additional annual incentives: There may be additional future savings to GVEA when carbon tax legislation is developed. The savings will be dependent on the tax rate and fuel source offset by the wind energy. Discuss the non-economic public benefits to Alaskans over the lifetime of the project: Wind is increasingly seen as an important renewable energy source to harness to mitigate the negative impacts of fossil based fuels. Although in some instances aesthetics of windmills has caused community issues and turbine design initially affected avian populations, the improvements in design and careful consideration of location provide a relatively quiet and a clean source of power. Nationwide electric customers are supporting their utilities efforts in developing renewable energy; and GVEA has had an active Green Power committee which helped shape the board’s renewable energy strategy for the cooperative. GVEA met 2007 board goals of its Green Power Pledge to use 10% of the 2007 peak system load (223 MW) with renewable sources and has committed to meet a 20% goal by 2014. GVEA takes pride in being responsive to its membership when it can incorporate new ideas without excessive cost to its membership. GVEA is in the unique position of having six years of reliable data on the feasibility of Eva Creek as a site for what is likely to be the United States’ largest Arctic wind generation project. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 21 of 45 7/21/2010 In addition to the benefit of reducing our carbon footprint through the integration of renewable energy sources into our system and the benefit of reduced costs to our members, there are other benefits to the state of Alaska as a whole. For example, with the investment in this infrastructure and the lessons learned from completion of this first major Arctic wind generation project in America, GVEA contributes to the understanding of the challenges of such construction in northern climates. Any future installation should be easier because of this “model” project. Of special significance to Alaska, is the capability to expand the system at Eva Creek to provide additional renewable energy to Railbelt Utilities at a cost far less than the initial investment. The Eva Creek site can accommodate expansion; it will have already been permitted and early operation will work out and resolve any unanticipated issues. Another benefit is the ability of the Interior and Fairbanks to build an image of a clean energy destination which has had an impact elsewhere on attracting conventions, travelers, new residents and businesses to an area. Finally, this project will develop a skilled workforce to operate and maintain wind generation systems. 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 Eva Creek Wind Project will become a portion of GVEA generation mix with GVEA operating and maintaining the equipment. It will require additional employees to be hired which will be incorporated into our existing Healy staff. We will also contract with the turbine vendor for some maintenance requirements which will be negotiated in the turbine purchase agreement. The O&M costs for the project will be rolled up into the capital costs which will result in a per kWh charged that GVEA intends to flow through COPA much like Bradley Lake costs. There may be some O&M issues that will have time delays due to the availability of a crane large enough to work the turbine if removal is necessary; however, turbines are a mature technology at this time and are quite robust with availability factors greater than 98%. GVEA intends to construct O&M facilities adjacent to the substation collection point so there will be the availability on site repairs. This project is not required to meet GVEA’s capacity requirements so there is no back- up generation required by the project. GVEA will operate a gas turbine to provide any regulation for the project. GVEA will be reporting to its members annually on the savings from this project and are willing to report back to AEA as required. It may be that we will develop a website that is able to display real time generation and accumulated output from the project. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 22 of 45 7/21/2010 SECTION 7 – READINESS & COMPLIANCE WITH OTHER GRANTS Discuss what you have done to prepare for this award and how quickly you intend to proceed with work once your grant is approved. Tell us what you may have already accomplished on the project to date and identify other grants that may have been previously awarded for this project and the degree you have been able to meet the requirements of previous grants. GVEA has been recording wind data at the EVA Creek Project site for seven years. The following is a list of activities accomplished since February 2009: Grantee: Golden Valley Electric Association Project Name: Eva Creek Wind Farm Feasibility Grant # 2195425 Period of Report: _2/21/09_______to__8/31/10______ Project Activities Completed: • Digging of test pits along the Ferry Road and potential on-site borrow areas for material suitability. • Conducted public stakeholder meeting with residents and mining claim holders in Healy, AK. • Completed field studies and radar tracking of avian migration for phase II of the Avian study for the proposed Eva Creek wind Farm. • Attended the 2010 AWEA conference in Dallas, TX and met with several vendors and contractors to elicit interest in Balance of Plant contracts and acceptable turbine manufacturers. • Developed scope of work and cost breakdown for Grant. • Conducted stakeholder meetings with ARRC and Metallica Resources. • Initial permit meetings with Alaska DNR. • Power Engineers completed Transient Stability Analysis and Two Minute Mean Wind Speed analysis. • Met with Darren Scott in Kodiak regarding logistics, construction and integration of their 4.5MW wind farm. • Met with Stantec Engineering in Portland on wind development and tour of several large wind farms under construction in Eastern Oregon and Washington with an emphasis on logistics. • Conducted field studies and draft report for Phase I of the Avian interaction with the proposed Eva Creek. • Contracted with AeroMetric to map proposed site from previous photography. • Retained Natural Power Consultants, LLC to conduct a site screening and constraint assessment. • Site visit and geotechnical investigation with Golder Associates, Inc. for potential borrow areas and road construction suggestions. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 23 of 45 7/21/2010 • Initiate Phase II of the avian study for spring migration using radar and field observation. • Contracted with Power Engineers to design transmission line tie-in and substation. • Conducted site visit with V-Bar meteorologist and Natural Power Consultants to verify suitability of preliminary turbine layout. Possible alternative access routes were evaluated and eliminated from consideration. • Evaluated suitability of Walker Dome for possible wind farm location. Wind data indicated an excellent wind resource; however, the cost to install infrastructure (ie. roads, transmission line and terrain) was determined to offset the higher capacity factor. • Completed a fluid dynamics modeling of wind flow at Eva Creek to be used in energy yield analysis of suitable WTG’s. • Completion of project planimetric mapping and geo-referenced photos for project planning. GVEA intends to continue working in the design phase for the EVA Creek project and will go out to bid for the turbines and construction during the first quarter of 2011. If the prices come in at the engineers estimate and the Board gives its approval the funds requested in this grant will be spent in April of 2011 for a down payment on the wind turbines with progress payments taking place over the following 12 months. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 24 of 45 7/21/2010 SECTION 8– LOCAL SUPORT Discuss what local support or possible opposition there may be regarding your project. Include letters of support from the community that would benefit from this project. GVEA has regularly monitored the interest of its members to green power. The following table from our latest survey identifies an increased commitment to power generated from environmentally sound sources: Member Interest in/Commitment to Green Power 2003 vs. 2000 34% 38% 58% 26% 43% 22% 22% 18% 14% 17% 14% 22% 24%40% 5% 3% 0% 20% 40% 60% 80% 100% You strongly consider environmental impact when making product purchases - 2000 You strongly consider environmental impact when making product purchases - 2003 It means a lot to you if electricity comes from environmentally sound sources - 2000 It means a lot to you if electricity comes from environmentally sound sources - 2003 Strongly Agree Somewhat Agree Neutral/ DK Disagee The Eva Creek Project will be constructed in a remote area. The nearest community of about a dozen families is Ferry. We have met twice with the local residents of Ferry to share what is going on with this project. There have been no complaints at this time. There will be a public process as part of the permit process where we will gain any further questions and mitigate any of their concerns. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 25 of 45 7/21/2010 SECTION 9 – GRANT BUDGET Tell us how much you want in grant funds Include any investments to date and funding sources, how much is being requested in grant funds, and additional investments you will make as an applicant. Include an estimate of budget costs by milestones using the form – GrantBudget3.doc The following spreadsheet is a record of cost to date towards construction and design of the Eva Creek Wind Project with respect to Grant # 2195425. GVEA has spend additional funds over $1,000,000 collecting wind data. The attached grant budget form includes the breakdown for the requested round IV grant funds and indicates milestones tied to the overall Eva Creek Wind Project. Grantee: Golden Valley Electric Association Project: Eva Creek Wind Farm Feasibility Period: __6/8/10_____to__8/16/10___ Grant Number: 2195425 A B C D= B + C E = A - D Budget Summary TOTAL GRANT BUDGET PRIOR EXPENDITURE S EXPENDITURE S THIS PERIOD TOTAL EXPENDITURE S GRANT BALANCE BY TASK OR MILESTONE Milestone 1 $1,054,900 217,541.33 121,493.24 - $0 Milestone 2 $390,000 34,139.01 55,677.52 - $0 Unallocated * $855,100 189,166.37 $2,000,000 TOTAL $2,000,000 $189,166 $0 $0 $0 BY BUDGET CATEGORIES Direct Labor & Benefits $115,000 20,143.03 8,534.95 - $0 Travel $25,000 3,866.16 1,504.20 - $0 Contractual Services $2,160,000 193,532.14 111,454.09 - $0 TOTAL $0 $0 $0 $0 $0 BY FUND SOURCES Grant Funds $2,000,000 189,166.37 - - $0 Grantee Match - Cash $300,000 28,374.96 - - $0 Grantee Match - In Kind - $0 Other Contributions - $0 TOTAL $0 $0 $0 $0 $0 Note: Highlighted totals were changed between Milestones from June 2010 billing. These numbers are correct. See original backup for details. ABR invoices are avian studies. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 26 of 45 7/21/2010 SECTION 9 – ADDITIONAL DOCUMENTATION AND CERTIFICATION SUBMIT THE FOLLOWING DOCUMENTS WITH YOUR APPLICATION: A. Contact information, resumes of Applicant’s Project Manager, key staff, partners, consultants, and suppliers per application form Section 3.1 and 3.4. B. Cost Worksheet per application form Section 4.4.4. C. Grant Budget Form per application form Section 9. D. Letters demonstrating local support per application form Section 8. E. An electronic version of the entire application on CD per RFA Section 1.6. F. Authorized Signers Form. G. Governing Body Resolution or other formal action taken by the applicant’s governing body or management per RFA Section 1.4 that: - Commits the organization to provide the matching resources for project at the match amounts indicated in the application. - Authorizes the individual who signs the application has the authority to commit the organization to the obligations under the grant. - Provides as point of contact to represent the applicant for purposes of this application. - Certifies the applicant is in compliance with applicable federal, state, and local, laws including existing credit and federal tax obligations. H. CERTIFICATION The undersigned certifies that this application for a renewable energy grant is truthful and correct, and that the applicant is in compliance with, and will continue to comply with, all federal and state laws including existing credit and federal tax obligations. Print Name Michael J Wright Signature Title VP, Transmission and Distribution Date September 14, 2010 Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 41 of 45 7/21/2010 B. Project Cost/Benefit Worksheet 1. Renewable Energy Source The Applicant should demonstrate that the renewable energy resource is available on a sustainable basis. Annual average resource availability. 38 - 40 % Gross output based on wind speed Unit depends on project type (e.g. windspeed, hydropower output, biomasss fuel) 2. Existing Energy Generation and Usage a) Basic configuration (if system is part of the Railbelt1 grid, leave this section blank) i. Number of generators/boilers/other ii. Rated capacity of generators/boilers/other iii. Generator/boilers/other type iv. Age of generators/boilers/other v. Efficiency of generators/boilers/other b) Annual O&M cost (if system is part of the Railbelt grid, leave this section blank) i. Annual O&M cost for labor ii. Annual O&M cost for non-labor 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] ii. Fuel usage Diesel [gal] Other iii. Peak Load iv. Average Load v. Minimum Load vi. Efficiency vii. Future trends d) Annual heating fuel usage (fill in as applicable) i. Diesel [gal or MMBtu] ii. Electricity [kWh] Will depend on turbine’s cold weather package iii. Propane [gal or MMBtu] iv. Coal [tons or MMBtu] v. Wood [cords, green tons, dry tons] vi. Other 3. Proposed System Design Capacity and Fuel Usage 1 The Railbelt grid connects all customers of Chugach Electric Association, Homer Electric Association, Golden Valley Electric  Association, the City of Seward Electric Department, Matanuska Electric Association and Anchorage Municipal Light and Power.    Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 42 of 45 7/21/2010 (Include any projections for continued use of non-renewable fuels) a) Proposed renewable capacity (Wind, Hydro, Biomass, other) [kW or MMBtu/hr] Greater than 33% b) Proposed annual electricity or heat production (fill in as applicable) i. Electricity [kWh] 68,000,000 @ 33% Capacity Factor and 98% availability ii. Heat [MMBtu] c) Proposed annual fuel usage (fill in as applicable) i. Propane [gal or MMBtu] ii. Coal [tons or MMBtu] iii. Wood [cords, green tons, dry tons] iv. Other 4. Project Cost a) Total capital cost of new system $93,300,000 b) Development cost $ 3,000,000 c) Annual O&M cost of new system $ 1,000,000 with 2.5% escalator per year d) Annual fuel cost 5. Project Benefits a) Amount of fuel displaced for i. Electricity 4.2 - 5.0 million gal of oil per year ii. Heat iii. Transportation b) Current price of displaced fuel $1.87 – $2.08/gal c) Other economic benefits Potential GHG reduction credits d) Alaska public benefits 50,000 tons/year CO2 production offset 6. Power Purchase/Sales Price a) Price for power purchase/sale 7. Project Analysis a) Basic Economic Analysis Project benefit/cost ratio 1.2 (2% CREB interest, 17 year life, $7,843,000 annual savings) Payback (years) Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 43 of 45 7/21/2010 C. Grant Budget Form 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 Phase IV Construction $ $ $ Wind Turbine Order Placed (Milestone) April 2011 $ $ 3,770,260 Cash, CREB Financing $ 3,770,260 Progress Payment July 2011 $ 1,463,200 $ 2,307,060 Cash, CREB Financing $ 3,770,260 Progress Payment Nov 2011 $ $ 3,770,260 Cash, CREB Financing $ 3,770,260 Progress Payment Feb 2012 $ $ 3,770,260 Cash, CREB Financing $ 3,770,260 1 month prior to Delivery May 2012 $ $ 7,540,520 Cash, CREB Financing $ 7,540,520 Delivery Jun 2012 $ $11,310,780 Cash, CREB Financing $11,310,780 Turbine Completion (Milestone) Aug 2012 $ $ 2,827,695 Cash, CREB Financing $ 2,827,695 Final Project Acceptance (Milestone) Sep 2012 $ $ 942,565 Cash, CREB Financing $ 942,565 $ $ TOTALS $ Budget Categories: Direct Labor & Benefits $ $ $ Travel & Per Diem $ $ $ Equipment $ 1,463,200 $ 32,469,140 $33,932,340 Materials & Supplies $ $ $ Contractual Services $ $ 3,770,260 $ 3,770,260 Construction Services $ $ $ Other $ $ $ TOTALS $ 1,463,200 $ 36,239,400 $ 37,702,600 Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 44 of 45 7/21/2010 F. Governing Body Resolution Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 45 of 45 7/21/2010