HomeMy WebLinkAboutFinal StMarysWind App
2009
Alaska Village
Electric Cooperative
11/03/2009
Renewable Energy Fund Round 3
St. Mary’s Wind Grant Application
Tab 1
Grant Application
Renewable Energy Fund Round 3
Grant Application
AEA 10-015 Application Page 1 of 19 10/7/2009
SECTION 1 – APPLICANT INFORMATION
Name (Name of utility, IPP, or government entity submitting proposal)
Alaska Village Electric Cooperative
Type of Entity:
Electric Utility
Mailing Address
4831 Eagle Street
Anchorage, AK 99503
Physical Address
(Same)
Telephone
(907) 565-5531
Fax
(907) 562-4086
Email
1.1 APPLICANT POINT OF CONTACT
Name
Brent Petrie
Title
Manager, Community Development Key
Accounts
Mailing Address
4831 Eagle Street
Anchorage, AK 99503
Telephone
(907) 565-5531
Fax
(907) 562-4086
Email
BPetrie@avec.org
1.2 APPLICANT MINIMUM REQUIREMENTS
Please check as appropriate. If you do not to meet the minimum applicant requirements, your
application will be rejected.
1.2.1 As an Applicant, we are: (put an X in the appropriate box)
X An electric utility holding a certificate of public convenience and necessity under AS
42.05, or
An independent power producer in accordance with 3 AAC 107.695 (a) (1), or
A local government, or
A governmental entity (which includes tribal councils and housing authorities);
Yes
1.2.2. Attached to this application is formal approval and endorsement for its project by
its board of directors, executive management, or other governing authority. If the
applicant is a collaborative grouping, a formal approval from each participant’s
governing authority is necessary. (Indicate Yes or No in the box )
Yes
1.2.3. As an applicant, we have administrative and financial management systems and
follow procurement standards that comply with the standards set forth in the grant
agreement.
Yes
1.2.4. If awarded the grant, we can comply with all terms and conditions of the attached
grant form. (Any exceptions should be clearly noted and submitted with the
application.)
Yes
1.2.5 We intend to own and operate any project that may be constructed with grant
funds for the benefit of the general public.
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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)
St. Mary’s Wind- Final Design, Permitting, and Construction
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 completed project involves the installation of four 225 KW wind turbines between
Pitka’s Point and Saint Mary’s and the electrical interconnection of Mountain Village to the
west and Pilot Station to the east of the presently intertied Saint Mary’s and Pitka’s Point.
The completed project will provide benefits to all four communities through the reduction
and stabilized energy costs.
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 X Transmission of Renewable Energy
Geothermal, including Heat Pumps Small Natural Gas
Heat Recovery from existing sources Hydrokinetic
Solar Storage of Renewable
Other (Describe)
2.3.2 Proposed Grant Funded Phase(s) for this Request (Check all that apply)
Reconnaissance X Design and Permitting
Feasibility X Construction and Commissioning
Conceptual Design
2.4 PROJECT DESCRIPTION
Provide a brief one paragraph description of your proposed project.
This project includes final design, permitting, construction, erection, startup, and
commissioning of four wind turbines to supplement the existing power generation and
distribution systems for the villages of Saint Mary’s, Mountain Village, and Pilot Station.
At present, Saint Mary’s and Pitka’s Point are connected by a distribution power line, but
Mountain Village and Pilot Station are stand-alone diesel powered communities. This project
would:
• Electrically intertie Mountain Village and Pilot Station to Saint Mary’s
• Install 900 kW of wind between Pitka’s Point and Saint Mary’s to create a wind-diesel
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hybrid power system
• Install a secondary load boiler to dump excess wind power
• Manage the new integrated power system with a new SCADA system
Standby generation capability will be maintained in Mountain Village and Pilot Station but
primary generation will be delivered by the existing St. Mary’s power plant.
2.5 PROJECT BENEFIT
Briefly discuss the financial and public benefits that will result from this project, (such as reduced fuel
costs, lower energy costs, etc.)
The primary financial benefit from this project will to offset fuel costs for power generation in
St. Mary’s, Pitka’s Point, Pilot Station and Mountain Village. A secondary financial benefit will
be from the transition of primary generation to standby generation of the existing power plants
in Mountain Village and Pilot Station.
Simulations of wind resource versus load demand result in an estimated gross fuel savings of
almost 176,800 gallons of diesel fuel per year (with the HOMER software model assumption of
100% wind turbine availability) between the plants in the three villages discussed in this
application. With 90% expected wind turbine availability, 159,100 gallons of diesel fuel per year
would be displaced. Note: an analysis of turbine metrics by Northern Power for NW100
turbines in operational status in Alaska yielded an approximate 90% average availability.
Previously, AVEC had estimated 82% turbine availability for Alaska wind-diesel systems, but
Northern Power’s recent analysis and AVEC’s operational experience have indicated 90% or
better turbine availability.
At AVEC’s 2009 actual average price of fuel for these communities of $2.52/gallon, savings will
approach $445,500 per year. If the price of fuel rises to $4.31/gallon (the actual average price
for fuel in these communities during 2008), the projected savings will exceed $762,000 per
year.
By shifting the plants in Mountain Village and Pilot Station to standby status, AVEC will also
save approximately $340,000 per year in labor, generator consumables, and replacement parts.
In addition to the financial rewards of this project are the benefits of:
• reduced long-term dependence on outside sources of energy;
• reduced exposure to fuel price volatility;
• reduced air pollution resulting from reducing fossil fuel combustion;
• reduced possibility of spills from fuel transport and storage; and
• reduced overall carbon footprint and its contribution to climate change.
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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 project requires $16,616,252 to complete as proposed. AVEC is requesting $14,954,626 to
complete the proposed project. AVEC will provide $1,661,625 in cash as a project match
equaling 10% of the total estimated project costs.
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. $ 14,954,626
2.7.2 Other Funds to be provided (Project match) $ 1,661,625
2.7.3 Total Grant Costs (sum of 2.7.1 and 2.7.2) $ 16,616,252
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) $ 16,616,252
2.7.5 Estimated Direct Financial Benefit (Savings) $ 462,200 Year 1;
$20,225,285 Cumulative
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.)
$ 16,192 Annual Green Tag
Sales; $323,840 Cumulative
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 a resume and references
for the manager(s). If the applicant does not have a project manager indicate how you intend to
solicit project management support. If the applicant expects project management assistance
from AEA or another government entity, state that in this section.
AVEC will provide a project team from within its operating staff. To further support the AVEC
team in project delivery, design consultants and construction managers will be selected.
Brent Petrie, Manager, Community Development and Key Accounts will take the lead role as
project manager. He has worked for Alaska Village Electric Cooperative since 1998 where he
manages the development of alternatives to diesel generation for AVEC such as using hydro,
wind or heat recovery. He also manages relationships with AVEC’s largest customers and is the
project manager for AVEC’s many construction projects as an energy partner of the federally
funded Denali Commission.
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Mr. Petrie has been employed in the energy and resource field for more than thirty years,
having worked for the federal and state governments as consultant, planner and project
manager. He has been a utility manager or management consultant since 1993. As General
Manager of Iliamna- Newhalen-Nondalton Electric Cooperative from 1994 to 1998, he reported
to a seven-member, elected board of directors, and served as project manager on its
hydroelectric project development. He is an elected member of the Board of Directors of the
Utility Wind Interest Group representing rural electric cooperatives and serves on the Power
Supply Task force of the National Rural Electric Cooperative Association. Mr. Petrie has a
Master’s Degree in Water Resource Management and a Bachelor's degree in Geography.
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.)
Grant Award Announcement: January 1, 2010
Authorization to Proceed: July 1, 2010
Order Wind Turbines and Towers: September 1, 2010
Complete Permitting: October 1, 2010
Complete Civil Design: October 1, 2010
Turbines Ready to Ship: February 15, 2011
Complete Civil Works: October 1, 2011
Turbines On Site: June 15, 2011
Complete Turbine Erection and Electrical Works: August 1, 2011
Complete Turbine Commissioning: October 15, 2011
Complete Secondary Load Controller Commissioning: December 31, 2011
3.3 Project Milestones
Define key tasks and decision points in your project and a schedule for achieving them. The
Milestones must also be included on your budget worksheet to demonstrate how you propose to
manage the project cash flow. (See Section 2 of the RFA or the Budget Form.)
All project milestones are identified in the budget worksheet attached at the end of this
application.
Final Design and Permitting Phase
The final design and permitting phase will begin as soon as it is apparent that the project has
been selected for funding by AEA.
1. Project Scoping and Contractor Award for Planning and Design (July 2010)
The engineering constructor will be selected and a task order will be prepared for work planned
for this phase.
2. Permit Applications (as needed) (July 2010)
Permit applications, likely Wetlands, Coastal Project Questionnaire, and Migratory
Birds/Endangered species consultations, will be prepared and submitted.
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3. Final Environmental Assessment and Mitigation Plans (as needed) (July-August 2010)
Working with regulatory agencies, environmental documents will be prepared as needed.
4. Resolution of Land Use, ROW Issues (July -September 2010)
Working with the communities and corporations, AVEC will secure site control for the wind
turbines and intertie.
5. Permit Approvals (July-September 2010)
Permits will be issued from the U.S. Army Corps of Engineers, Alaska Department of Natural
Resources Coastal Management Program, and the U.S. Fish and Wildlife Service.
6. Final System Design (July-November 2010)
The engineering contractor will complete final design of the wind system and intertie. The
design will be reviewed by AVEC personnel prior to final approval.
7. Turbine/Integration Equipment Procurement (November 2010)
Because six months is required before the turbines and towers are ready to ship and because
the authorization to proceed from AEA will not be issued until July 2010, constructing the
project in 2010 will not be possible. The turbines and towers would be ordered as soon as
possible to ensure that the turbines and towers can be shipped early in the summer of 2011.
8. Engineers Cost Estimate (November 2010)
Using the final design, the engineers will prepare the cost estimate for the project.
9. Updated Economic Estimate and Financial Analysis (September-November 2010)
Using the number developed in the cost estimate, an updated economic assessment and
financial analysis will be prepared.
10. Negotiated Power Sales Agreements w/Approved Rates (Not Applicable)
11. Final Business and Operational Plan (August-November 2010)
AVEC will work with the all the communities to finalize a Business and Operational Plan. The
existing Business Plans will be combined and will be reworked to include the wind system and
connecting the communities.
Construction Phase
The construction phase will begin immediately following completion of the tasks above.
1. Confirmation that all Design and Feasibility Requirements are Complete (December 2010)
AVEC will work with the engineering contractor to confirm that all the design needs are in place
prior to moving forward with selection of the construction contractor.
2. Completion of Bid Documents (Not Applicable)
3. Contractor/Vendor Selection and Award (December 2010)
The construction contractor will be selected, and a construction task order will be prepared.
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4. Construction Tasks (January 2011-August 2011)
Construction tasks, outlined below, will occur starting at the beginning of 2011. Construction of
the turbines will be completed by the end of the summer of 2011. Site work needs to be done
before the turbines arrive in Pitka’s Point. To ensure that the work is completed site work
equipment will be transported to St. Mary’s and transported to Pitka’s Point on the first barge
of the 2011.
4.1 Obtain Surety Bonds (January 2011)
4.2 Foundation Material Procurement (February 2011)
4.3 Mobilization (July 2011)
4.4 Site Access and Foundation Installation (July 2011)
4.5 Distribution Line Installation/Upgrades (August 2011)
4.6 Tower/Turbine Erection (August 2011)
4.7 System Integration Component Installation (August 2011)
4.8 Construction Survey/As-Built Diagrams (August 2011)
4.9 Demobilization (August 2011)
5. Integration and Testing (August 2011)
Once the turbines are installed and the intertie is in place, integration and testing of the system
will occur.
6. Decommissioning Old Systems (Not Applicable)
7. Final Acceptance, Commissioning and Start-up (August 2011)
The commissioning needs to be done early enough in the season to allow time to commission
and tune the secondary load controller.
8. Operations Reporting (September 2011)
Turbine operations will begin and required reporting will occur following start up.
3.4 Project Resources
Describe the personnel, contractors, equipment, and services you will use to accomplish the
project. Include any partnerships or commitments with other entities you have or anticipate will
be needed to complete your project. Describe any existing contracts and the selection process
you may use for major equipment purchases or contracts. Include brief resumes and references
for known, key personnel, contractors, and suppliers as an attachment to your application.
AVEC will ultimately be responsible for successful completion of the project, using partners that
have successfully installed similar systems in the recent past. Electrical system engineering will
be contracted, using current internal procurement practices and selection of engineering
service providers from prequalified organizations. STG will provide the wind turbine
foundations on a design/build basis, as they have done on previous similar projects. STG will
also provide all ancillary electrical equipment and install the wind turbines and the electrical
balance of plant.
It is likely that refurbished 225 kW Vestas V27 turbines will be used to complete the project and
our project team’s savings estimates have been based on this particular unit. The V27 turbine
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design is well proven across the global wind industry and units have been successfully
integrated with remote wind-diesel systems in Alaska. The technology is proven and most
suitable to the larger load profiles that will be created through the interconnection of the four
villages. AEA would be consulted prior to selection of another turbine type.
3.5 Project Communications
Discuss how you plan to monitor the project and keep the Authority informed of the status.
AVEC will assign a project manager to the project. One responsibility of the project manager
will be to compile periodic progress reports for use by the Authority. Weekly and monthly
project coordination meetings will be held with the project team to track progress and address
issues as they arise.
3.6 Project Risk
Discuss potential problems and how you would address them.
In general, logistics, construction activities and weather all contain significant risks. AVEC
routinely purchases Builder’s Risk insurance to mitigate its exposure to these risks. In addition
to outside insurance, the experienced team of AVEC and STG with projects much like this one in
similar circumstances reduces much of the risk.
Logistics is a routine issue in rural Alaska. AVEC and STG both have extensive experience with
the logistical conditions found in this Alaskan village. Advance planning and allowing time for
contingencies is crucial to success in such environments.
Construction can be challenging in rural Alaska. Both AVEC and STG routinely conduct
construction operations in villages much like this one.
Weather is another challenge when working in rural Alaska. AVEC and STG have worked in this
area together for the past 5 years. As with logistics, allowing time for contingencies is
important.
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.
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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 wind resource in Saint Mary’s has been studied in depth since 2007 and much is now known
about it. In October 2007, a 40 meter met tower was installed at the site labeled “Pitka’s Point
Met Tower” (see section 4.3.2). It collected data through February 2009 when it collapsed in an
ice storm. The site shows outstanding (wind power class 6) potential for wind power
development with an annual wind speed average (at 38 meters) of 7.72 m/s and a projected
wind power density at 50 m of 660 W/m2. Other aspects of the wind resource also are
promising for wind power development. By IEC 61400-1 3rd (IEC3) edition classification, the
Pitka’s Point site is category II-C indicating low turbulence (mean TI at 15 m/s = 0.076) and
moderate 50 year extreme wind probability. The site does, however, present some challenges
with respect to rime icing which was detected during the winter months and was responsible for
the February, 2009 met tower collapse. Part of the design effort for this project will be to
develop methods to mitigate icing problems to minimize the impact on turbine availability.
In addition to the Pitka’s Point met tower, a second met tower was erected in August 2008 at
the location labeled “Saint Mary’s Met Tower” (see Section 4.3.2). The purpose of this met
tower was to determine the trade-off, if any, between wind resource and icing issues
documented at the Pitka’s Point site. The other rationale for the Saint Mary’s met tower
location was the very positive efforts and desire of the Saint Mary’s village corporation to locate
a wind power project on their land. To that end, site control has already been obtained for the
Saint Mary’s site. The Saint Mary’s met tower has been collecting data for 14 months although a
two month data gap occurred from February to April 2009 after collapse of the tower during the
same ice storm that affected the Pitka’s Point met tower. It was felt that sufficient data had
been collected at the Pitka’s Point site, but not yet enough in Saint Mary’s, hence replacement
of the tower in April. To date, the Saint Mary’s site indicates a lower wind resource than the
Pitka’s Point site, with an annual wind speed average (at 38 meters) of 6.47 m/s and a projected
wind power density at 50 m of 360 W/m2. Turbulence is slightly higher than at the Pitka’s Point
site, but still IEC3 category C. Not enough data has been collected to confidently calculate
extreme wind probabilities, but IEC3 class II or III is assumed for planning purposes.
In a further effort to optimize wind power development in Saint Mary’s, a third project met
tower is planned for installation near Mountain Village in November 2009. This met tower, at
50 meters, is intended to determine if the Mountain Village site perhaps has a wind resource
equivalent to that at Pitka’s Point but with less icing.
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.
The existing diesel power plant in Saint Mary’s consists of three generators: a 299 kW Cummins
QSX15G9, a 611 kW Cat 3508 and a 908 kW Cat 3512.. These generators were installed in 2006,
1987 and 1995 respectively. Aggregate generator efficiency in Saint Mary’s in 2008 was 14.09
kWh/gal.
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The existing diesel power plant in Mountain Village consists of four generators: a 350 kW Cat
3412, a 505 kW Cat 3456, a 601 kW Cat 3412, and a 756 kW MTU 12V2000. These generators
were installed in 1984, 2005, 1982, and 2003 respectively. Aggregate generator efficiency in
Mountain Village in 2008 was 14.84 kWh/gal.
The existing diesel power plant in Pilot Station consists of three generators: a 397 kW Cummins
KTA19, a 499 kW Cummins QSX15G9, and a 314 kW Detroit Series 60. These generators were
installed in 1998, 2005, and 2002 respectively. Aggregate generator efficiency in 2008 was
12.84 kWh/gal.
4.2.2 Existing Energy Resources Used
Briefly discuss your understanding of the existing energy resources. Include a brief discussion of
any impact the project may have on existing energy infrastructure and resources.
Existing energy infrastructure in Saint Mary’s, Mountain Village, and Pilot Station is diesel fuel
for electrical power generation, heating oil for boiler (thermal) and home heating, thermal heat
recovery from the diesel engines at the power plant, and diesel and gasoline fuel for
transportation needs. The proposed project would add four wind turbines to the electrical
power system. The anticipated effects are less usage of diesel fuel for electrical power
generation and less usage of heating fuel for boiler operations (due to injection of excess wind
power to the thermal heat recovery loop in St. Mary’s).
4.2.3 Existing Energy Market
Discuss existing energy use and its market. Discuss impacts your project may have on energy
customers.
Saint Mary’s/Pitka’s Point, Mountain Village, and Pilot Station are stand-alone electric power
systems with no intertie or connection beyond the villages themselves. The electricity user
bases of these villages are limited to household, government, and commercial customers. The
intent of the proposed wind power project is to lower the cost of electricity for the residents
and commercial interests in Saint Mary’s, Pitka’s Point, Mountain Village, and Pilot Station.
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
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• Delivery methods
Description of renewable energy technology. Wind power is the renewable energy option of
choice for Saint Mary’s. Of the wind turbine options available on the market, the “village” scale
turbine size (50 to 250 kW) is considered most appropriate for the combined load profile of
Saint Mary’s, Mountain Village, and Pilot Station. It is likely that remanufactured Vestas V27
(225 kW rated output) turbine or its close equivalent will be used for this project. This turbine is
proposed because it is at the high end of the desired power output range and hence suitable for
the large combined power system when all four villages are electrically interconnected, it can be
configured for cold climate operations, it is highly efficient with pitch-control rotor blades, it has
market availability, and it has a positive track record of performance in Alaska on Saint Paul
Island and the Long Range Radar Station located in Tin City.
Optimum installed capacity. Proposed are four (4) Vestas V27 turbines or their close equivalent
to operate as a wind-diesel hybrid power system that will supply wind generated electricity to
Saint Mary’s, Pitka’s Point, Mountain Village and Pilot Station. Electrical distribution interties
will be installed to connect the communities of Pilot Station and Mountain Village to St. Mary’s.
Installed wind capacity will be 900 kW.
Anticipated capacity factor. HOMER software was used to estimate capacity factor and system
penetration (or renewable fraction) of four Vestas V27 turbines in a power system that
combines Saint Mary’s, Pitka’s Point, Mountain Village, and Pilot Station. Using Pitka’s Point
wind data as discussed in section 4.1, at 100% availability the turbine capacity factor is predicted
to be 38.1%. With 90% wind turbine availability (see discussion in Section 2.5), a 34.3% capacity
factor is anticipated. It is possible that a close equivalent of the V-27 may ultimately be selected
and would have similar anticipated production.
Anticipated annual generation. HOMER software estimates wind production with four V27
turbines of 2,944,000 kWh/yr with 271,300 kWh/yr of excess energy (3.5 % of electricity
production) that would be diverted to a secondary load boiler (100% turbine availability). At
90% turbine availability, production of 2,650 MWh/yr production is predicted.
Anticipated barriers. No barriers to successful installation and integration of a wind turbine in
Saint Mary’s/Pitka’s Point are expected. The project design is modeled on recent successful
projects of similar design.
Basic integration concept. The integration design concept is comprised of four Vestas V27
turbines, a secondary load boiler to augment an existing diesel generator heat recovery loop, a
secondary load controller to manage the “dumping” of excess electricity (electricity generated in
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excess of the load), a SCADA system to manage the combined operation of the diesel generators
and wind turbines, and remote viewing and system access capability to enable remote
monitoring and control of the wind-diesel hybrid power plant.
Delivery Method. Power generated by the wind turbines will be distributed via the existing
electrical distribution system in the four villages and to Mountain Village and Pilot Station via
new intertie lines.
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 proposed turbine sites in Pitka’s Point and Saint Mary’s are noted in the topographic and
Google Earth images below. The preferred wind site is the Pitka’s Point location due to its
superior wind resource. These sites were selected during a reconnaissance visit in May 2007
and deemed of excellent wind power development potential due to their close proximity to
Saint Mary’s and the existing power line connecting Saint Mary’s to the airport and Pilot Station,
close distance from the airport, good exposure to the prevailing winds, village corporation
ownership, and ease of access. At the present time, AVEC has site control of the Saint Mary’s
location and is working on obtaining site control at the Pitka’s Point location.
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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
It is likely that the following permits will be needed to construct the wind turbines and intertie:
• Section 404 Permit (Wetlands Permit) from the U.S. Army Corps of Engineers
• Coastal Zone Consistency Determination from the Alaska Department of Natural
Resources Division of Coastal and Ocean Management
• Fish Habitat Permit from the Alaska Department of Fish and Game for a river crossing
• FAA Determination of No Hazard to Air Traffic
• Consultation with U.S. Fish and Wildlife Service and the potential implementation of
avian protection equipment (bird diverters on installed power lines)
No major permitting issues are expected.
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
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• Land development constraints
• Telecommunications interference
• Aviation considerations
• Visual, aesthetics impacts
• Identify and discuss other potential barriers
Threatened or endangered species. The U.S. Fish and Wildlife Service will be consulted to
ensure that the construction of the wind turbines and interties will have no affect on threatened
or endangered species. Construction will be timed to avoid impacts to migratory birds in
compliance with the Migratory Bird Treaty Act. It is likely that bird monitoring will be a
requirement of permits.
Habitat issues. During permitting, the project team will work with Federal and State agencies to
ensure that the project would not impact any refuges, sanctuaries, or critical habitat areas,
federal refuges, or national parks within proximity to the project site and intertie routes.
Wetlands and other protected areas. It is likely that the wind turbines and intertie could be
placed in wetland locations. An U.S. Army Corps of Engineers’ wetlands permit would be
needed.
Archaeological and historical resources. Compliance with the National Historic Preservation Act
with the State Historic Preservation Officer will be conducted prior to construction of the wind
turbines and intertie.
Land development constraints. AVEC is currently working with the City of St. Mary’s and the
community of Pitka’s Point to gain site control.
Aviation considerations. The turbines and intertie will be located away from the active airport
and outside any important operational aircraft area.
Visual, aesthetics impacts. It is likely that residents will be willing to forego some aesthetic
impacts in the interest of lowering the cost of energy. AVEC will conduct community meetings
to discuss community impacts and how they could be minimized.
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
Renewable Energy Fund
Grant Application Round 3
AEA10-015 Grant Application Page 15 of 19 10/7/2009
This application is for the intertie between St. Mary’s, Mountain Village, and Pilot Station, along
with the installation of four 225 kW Vestas V27 wind turbines to be installed between Saint
Mary’s and Pitka’s Point. All four communities will receive benefits from the completed
renewable energy installation through the ability to transmit project energy supplies through
the new distribution lines.
The project will cost $16,616,252 to complete. $14,954,627 is requested from AEA through the
REF grant program, and AVEC will provide $1,661,625 (10%) as a cash contribution towards the
proposed 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.)
Operation and Maintenance costs for the proposed project are based on the historical costs
documented at existing wind installations owned and maintained by AVEC. AVEC’s existing
NW100 wind turbines at other sites require two maintenance visits a year and have been used
as a basis to determine O&M estimated for the V-27 turbines proposed in this application.
Annual O&M visits to existing wind systems in Alaska currently cost AVEC $3,500 per turbine per
year. The new Northwind 100 model requires only one maintenance visit each year. To be
conservative with our estimate, this annual cost is doubled in the development of V-27 O&M
expectations for the four turbines proposed for St. Mary’s to require a combined annual
maintenance cost of $28,000. This cost will be funded by ongoing energy sales in the villages
and the estimated annual income of $16,192 generated through the anticipated sale of Green
Tags.
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
Energy produced from the completed wind/intertie project will be sold to AVEC’s existing
customer base in the communities of St. Mary’s, Pitka’s Point, Mountain Village, and Pilot
Station. The sales price for the wind generated electricity will be determined by the Regulatory
Commission of Alaska as is done in all AVEC villages. The delivered cost of energy will be
reduced as much as possible for customers within these four communities under current
regulations, but that price is expected to be reduced by approximately 25% from current levels
in each community. Currently, AVEC villages with wind power systems experience the lowest
electricity cost of within the utility (54 villages). Similar energy cost reductions are expected
with the completed project proposed in this application.
Renewable Energy Fund
Grant Application Round 3
AEA10-015 Grant Application Page 16 of 19 10/7/2009
The grant funded portion of the project has an expected payback of 17.8 years and an estimated
IRR of 4.15%.
4.4.4 Project Cost Worksheet
Complete the cost worksheet form which provides summary information that will be considered
in evaluating the project.
Please see attached cost worksheet.
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
.
HOMER software predicts an annual fuel savings of 165,090 gallons with four Vestas V27
turbines operating at 90% availability. Over a 25 year project life, lifetime fuel savings would
equal 4,127,200 gallons (90% availability). Beginning with an estimated 2010 fuel cost of $3.42
per gallon, a 4.0% inflation rate, annual O&M savings from placing the Mountain Village and
Pilot Station power plants in standby status, and considering the cost of annual turbine
maintenance visits, the cumulative project benefit is $29.570 million. The benefit/cost ratio for
our proposed project is 1.78 with a 17.8 year payback period. The project IRR is 4.15%
Tax credits are not expected to be beneficial to the project due to AVEC’s status as a non-profit
entity. Nonetheless, in addition to saving the direct cost of fuel, AVEC could sell green tags from
the project. At a conservative estimate of $0.0055/kWh for those green tags today, to the
project could generate $16,192 in additional income annually, or an additional $404,800 over
the 25-year life of the project.
The non-economic benefits to the Alaskan population at large will be primarily from the reduced
carbon footprint of the power plant. Reducing the amount of fuel burned within the
communities of St. Mary’s, Mountain Village, and Pilot Station will prevent a significant amount
of carbon dioxide from entering the atmosphere each year. With four V27 wind turbines,
HOMER modeling estimates annual emissions reductions of 1,762 metric tons of carbon dioxide,
4,350 kg of carbon monoxide, and 38,800 kg of nitrogen oxides.
Renewable Energy Fund
Grant Application Round 3
AEA10-015 Grant Application Page 17 of 19 10/7/2009
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
Business Plan Structures and Concepts which may be considered: The wind turbine would be
incorporated into AVEC’s existing power plant operation in St. Mary’s. Local plant operators
would provide daily servicing. AVEC technicians provide periodic preventative or corrective
maintenance and are supported by AVEC headquarters staff, purchasing, and warehousing.
How O&M will be financed for the life of the project: The costs of operations and maintenance
will be funded through ongoing energy sales to the villages.
Operational issues which could arise: Although turbine blade icing is a concern, AVEC expects to
address this issue during the development of this project.
Operating costs: The new wind turbines would require an annual maintenance cost
approximately $28,000. This cost will be funded by ongoing energy sales in the villages and the
estimated annual income of $16,192 generated through the anticipated sale of Green Tags.
Commitment to reporting the savings and benefits: AVEC is fully committed to sharing the
savings and benefits accrued from this project information with their shareholders and AEA.
SECTION 7 – READINESS & COMPLIANCE WITH OTHER GRANTS
Discuss what you have done to prepare for this award and how quickly you intend to proceed
with work once your grant is approved.
Tell us what you may have already accomplished on the project to date and identify other grants
that may have been previously awarded for this project and the degree you have been able to
meet the requirements of previous grants.
Renewable Energy Fund
Grant Application Round 3
AEA10-015 Grant Application Page 18 of 19 10/7/2009
SECTION 8– LOCAL SUPPORT
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.
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 project will cost $16,616,252 to complete. $14,954,627 is requested from AEA through the
REF grant program, and AVEC will provide $1,661,625 as a match.
Total development costs for the project are estimated to be $496,000. Total capital costs of the
proposed system are projected to be $16,120,252.
Total Phase III (Final Design and Permitting) costs for the project are estimated to be
$3,415,750 and total Phase IV (Construction) costs for the project are estimated to be
$12,704,502.
Further information regarding specific line item costs and project milestones can be found in
the attached grant budget worksheet.
Renewable Energy Fund
Grant Application Round 3
AEA10-015 Grant Application Page 19 of 19 10/7/2009
SECTION 9 – ADDITIONAL DOCUMENTATION AND CERTIFICATION
SUBMIT THE FOLLOWING DOCUMENTS WITH YOUR APP LICATION:
A. 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. 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.
F. 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 Meera Kohler
Signature
Title President and CEO, Alaska Village Electric Cooperative
Date November 10, 2010
Tab 2
Resumes
Tab 3
Cost Worksheet
Renewable Energy Fund Round 3
Project Cost/Benefit Worksheet
RFA AEA10-015 Application Cost Worksheet Page 1 10-7-09
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.80% (wind speed > 3.5 m/s)
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 10 generators (Saint Mary’s, Mountain Village, and
Pilot Station)
ii.Rated capacity of generators/boilers/other 5.240 kW
iii.Generator/boilers/other type diesel
iv.Age of generators/boilers/other see Section 4.2.1 of application
v.Efficiency of generators/boilers/other 14.03 kWh/gal (average of Saint Mary’s, Mountain
Village, and Pilot Station; 2008 AVEC Operations)
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 170,000 per power plant=$51,000
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]7,409,850 (AVEC 2008 Ops data for Saint Mary’s, Mountain Village, and Pilot
Station)
ii.Fuel usage
Diesel [gal]527,862 (AVEC 2008 Ops data for Saint Mary’s, Mountain Village, and Pilot
Station)
Other
iii.Peak Load 1,565 kW (estimated by HOMER software)
iv.Average Load 846 kW (AVEC Operations data 2008, Saint Mary’s, Mountain Village, and
Pilot Station combined)
v.Minimum Load 329 kW (estimated by AK Village Load Calculator, Saint Mary’s, Mountain
Village, and Pilot Station combined)
vi.Efficiency 14.03 kWh/gal (AVEC Operations data 2008, average of Saint Mary’s,
Mountain Village, and Pilot Station)
vii.Future trends Electricity generated by the three villages in 2006 –1,206,928 kWh, 2007 –
1,209,476 kWh; 5%documented increase from 2006 to 2008
1 The Railbelt grid connects all customers of Chugach Electric Association,Homer Electric Association,Golden Valley Electric
Association,the City of Seward Electric Department, MatanuskaElectric Association and Anchorage Municipal Light and Power.
Renewable Energy Fund Round 3
Project Cost/Benefit Worksheet
RFA AEA10-015 Application Cost Worksheet Page 2 10-7-09
d)Annual heating fuel usage (N/A)
i.Diesel [gal or MMBtu]
ii.Electricity [kWh]
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
(Include any projections for continued use of non-renewable fuels)
a)Proposed renewable capacity
(Wind, Hydro, Biomass, other)
[kWh or MMBtu/hr]
Wind power –900 kW installed capacity (four Vestas V27,
225 kW rated output turbines)
b)Proposed Annual electricity or heat production
i.Electricity [kWh]2,944,000 kWh/yr (100% turbine availability)
ii.Heat [MMBtu]
c)Proposed Annual fuel Usage (N/A)
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 $16,616,252
b)Development cost
c)Annual O&M cost of new system $28,000
d)Annual fuel cost No fuel cost for wind power.
5.Project Benefits
a)Amount of fuel displaced for
i.Electricity 176,800 gal (HOMER modeling result, 100%turbine availability) plus
271,300 kWh/yr excess electricity to secondary load boiler
ii.Heat 6,630 gal (boiler fuel displaced)
iii.Transportation
b)Price of displaced fuel 2010 fuel price: $3.42/gal (estimated)
2009 fuel price: $2.52/gal (Saint Mary’s)
2008 fuel price: $4.31/gal (Saint Mary’s)
c)Other economic benefits $16,192 annual green tag sales
d)Amount of Alaska public benefits
6.Power Purchase/Sales Price
Renewable Energy Fund Round 3
Project Cost/Benefit Worksheet
RFA AEA10-015 Application Cost Worksheet Page 3 10-7-09
a)Price for power purchase/sale N/A
7.Project Analysis
a)Basic Economic Analysis
Project benefit/cost ratio 1.78 (based on 25 year project life, est. 2010 fuel price, 90% turbine
availability,4.0% interest rate)
Payback 17.8 years
Tab 4
Grant Budget Form
Renewable Energy Fund Grant, Round III
Grant Application Budget Form, Page 1 of 2
St. Marys Wind/Intertie - Final Design, Permitting and Construction
Design and Permitting Phase
Includes Turbine/Integration Equipment Procurement
11/8/2009
1. Project Scoping and Contractor Award for Planning and Design July 2010 6,750$750$cash 7,500$
2. Permit Applications (as needed)July 2010 14,850$1,650$cash 16,500$
3. Final Environmental Assessment and Mitigation Plans (as needed)August 2010 9,000$1,000$cash 10,000$
4. Resolution of Land Use, ROW Issues September 2010 13,500$1,500$cash 15,000$
5. Permit Approvals (as needed)September 2010 4,500$500$cash 5,000$
6. Final System Design November 2010 324,000$36,000$cash 360,000$
7. Turbine/Integration Equipment Procurement November 2010 2,627,775$291,975$cash 2,919,750$
8. Engineers Cost Estimate November 2010 49,500$5,500$cash 55,000$
9. Updated Economic Estimate and Financial Analysis November 2010 10,800$1,200$cash 12,000$
10. Negotiated Power Sales Agreements w/Approved Rates Not Applicable -$-$
11. Final Business and Operational Plan November 2010 13,500$1,500$cash 15,000$
TOTALS 3,074,175$341,575$3,415,750$
Budget Categories:
Direct Labor & Benefits 112,500$12,500$cash 125,000$
Travel & Per Diem 18,000$2,000$cash 20,000$
Equipment 2,564,775$284,975$cash 2,849,750$
Materials & Supplies 6,750$750$cash 7,500$
Contractual Services 372,150$41,350$cash 413,500$
Construction Services -$
Other -$
TOTALS 3,074,175$341,575$3,415,750$
Applications should include a separate worksheet for each project phase (Reconnaissance, Feasibility, Design and Permitting, and Construction)-
Add additional pages as needed
TOTALSMilestone 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
1
Renewable Energy Fund Grant, Round III
Grant Application Budget Form, Page 2 of 2
St. Marys Wind/Intertie - Final Design, Permitting and Construction
Construction Phase
11/8/2009
1. Confirmation that all Design and Feasibility Requirements are
Complete December 2010 2,250$250$cash 2,500$
2. Completion of Bid Documents Not Applicable -$-$
3. Contractor/Vendor Selection and Award December 2010 13,500$1,500$cash 15,000$
4. Construction Phase
4.1 Obtain Surety Bonds January 2011 435,572$48,396$cash 483,968$
4.2 Foundation Material Procurement February 2011 549,529$61,059$cash 610,588$
4.3 Mobilization June 2011 522,244$58,027$cash 580,271$
4.4 Site Access and Foundation Installation July 2011 490,950$54,550$cash 545,500$
4.5 St. Mary's/Mt. Village Distribution Line Installation August 2011 5,539,500$615,500$cash 6,155,000$
4.6 St. Mary's/Pitkus Pt. Distribution Line Upgrade August 2011 481,500$53,500$cash 535,000$
4.7 St. Mary's/Pilot Station Distribution Line Installation August 1, 2011 2,668,500$296,500$cash 2,965,000$
4.8 Tower/Turbine Erection August 1, 2011 353,385$39,265$cash 392,650$
4.9 System Integration Component Installation August 1, 2011 536,085$59,565$cash 595,650$
4.10 Construction Survey/As-Built Diagrams August 1, 2011 35,437$3,938$cash 39,375$
TOTALSMilestone 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
1
4.10 Construction Survey/As-Built Diagrams August 1, 2011 35,437$3,938$cash 39,375$
4.11 Demobilization August 1, 2011 85,500$9,500$cash 95,000$
5. Integration and Testing August 1, 2011 85,500$9,500$cash 95,000$
6. Decommissioning Old Systems Not Applicable -$-$
7. Final Acceptance, Commissioning and Start-up August 1, 2011 76,500$8,500$cash 85,000$
8. Operations Reporting September 1, 2011 4,500$500$cash 5,000$
TOTALS 11,880,452$1,320,050$13,200,502$
Budget Categories:
Direct Labor & Benefits 613,260$68,140$cash 681,400$
Travel & Per Diem 40,500$4,500$cash 45,000$
Equipment -$
Materials & Supplies -$
Contractual Services -$
Construction Services 11,226,692$1,247,410$cash 12,474,102$
Other -$
TOTALS 11,880,452$1,320,050$13,200,502$
Applications should include a separate worksheet for each project phase (Reconnaissance, Feasibility, Design and Permitting, and Construction)-
Add additional pages as needed
1
Tab 5
Delegation of Authority
Tab 6
Supplemental Materials