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HomeMy WebLinkAboutCity of Kotzebue Biomass REF Application Renewable Energy Fund Round 3 Grant Application AEA 10-015 Application Page 1 of 20 10/7/2009 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-III.html Grant Application Form GrantApp3.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 Costworksheet3 .doc Summary of Cost information that should be addressed by applicants in preparing their application. Grant Budget Form GrantBudget3.d oc 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 GrantBudgetInst ructions3.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 3 AEA10-015 Grant Application Page 2 of 20 10/7/2009 SECTION 1 – APPLICANT INFORMATION Name (Name of utility, IPP, or government entity submitting proposal) City of Kotzebue-Maniilaq Services, LLC Type of Entity: Local government municipality providing a full range of municipal services including solid waste and public works. The City of Kotzebue is partnered with Maniilaq Services, LLC for the Kotzebue Biomass Project. Maniilaq Services is a subsidiary of Maniilaq Association, a non-profit corporation headquartered in Kotzebue recognized under section 501(c) (3) of the Internal Revenue Code of 1972 as amended. The City of Kotzebue will oversee the project and Maniilaq Services will serve as project manager for the City. Mailing Address P.O. Box 46 Kotzebue, AK 99752 Physical Address City Hall, 258A, 3rd Avenue Kotzebue, AK 99752 Telephone (907) 442- 3401 Fax (907) 442-3742 Email rwalker@kotzebue.org 1.1 APPLICANT POINT OF CONTACT Name Michael J. Scott Title President and CEO Mailing Address 1700 Seventh Avenue Building 1700 Seventh Avenue, Suite 2100 Seattle, WA 98101 Telephone (206) 715- 7804 Fax (206) 357-8401 Email michael_scott@comcast.net 1.2 APPLICANT MINIMUM REQUIREMENTS Please check as appropriate. If you do not to meet the minimum applicant requirements, your application will be rejected. 1.2.1 As an Applicant, we are: (put an X in the appropriate box) An electric utility holding a certificate of public convenience and necessity under AS 42.05, or An independent power producer in accordance with 3 AAC 107.695 (a) (1), or X A local government, or A governmental entity (which includes tribal councils and housing authorities); YES 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 3 AEA10-015 Grant Application Page 3 of 20 10/7/2009 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) City of Kotzebue Biomass Tactical Garbage to Energy Refinery (TGER) Project. 2.2 Project Location – Include the physical location of your project and name(s) of the community or communities that will benefit from your project. City of Kotzebue, Alaska 2.3 PROJECT TYPE Put X in boxes as appropriate 2.3.1 Renewable Resource Type Wind X Biomass or Biofuels Hydro, including run of river Transmission of Renewable Energy Geothermal, including Heat Pumps Small Natural Gas Heat Recovery from existing sources Hydrokinetic Solar Storage of Renewable Other (Describe) 2.3.2 Proposed Grant Funded Phase(s) for this Request (Check all that apply) X Reconnaissance X Design and Permitting X Feasibility X Construction and Commissioning X Conceptual Design 2.4 PROJECT DESCRIPTION Provide a brief one paragraph description of your proposed project. TGER is a “Hybrid System” incorporating two complementary technologies:  Bioreactor to convert carbohydrates, sugars, some cellulosic waste into vaporous ethanol  Thermo chemical gasifier to convert bioreactor residuals into “fuel gas”  Fuel gas and vaporous ethanol are fumigated into the diesel engine as a substitute for diesel fuel  System of energy & materials exchange between subsystems for o/a system efficiency  System outputs are benign ash and CO2* * With exception of Petroleum-based plastics conversion, system is “carbon-neutral” How it Works:  Mixed waste is loaded into a chute where wet food waste is separated for fermentation  Solid waste is ground up and converted into fuel pellets for delivery to a downdraft gasifier  Hydrous ethanol from fermentation and syngas from thermal decomposition are blended and aspirated into a 60kW generator to produce electricity Products:  Electricity – can be used immediately, diverted to a power micro-grid, or used to charge batteries  Ash – environmentally benign  Engine exhaust – EPA certified  Grey water – environmentally benign (filtered and boiled)  Excess thermal energy-250,000 BTUs captured for heat, hot water, field sanitation, etc. Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 4 of 20 10/7/2009 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.) Environmental Benefits: Improve public safety, protect public health, reduce water pollution from leachate, reduce windblown debris, and reduce ground and visual pollution. Landfills or bale fills can cause health and safety problems, pollute drinking water and harm wildlife. Financial Benefits: Fuel displaced for electricity: 55,376 gallons; price of displaced fuel: $310,659.36; other financial benefits: $187,200 (reduced land fill costs). Technical Assistance Benefits: The City of Kotzebue will learn how to operate and maintain the TGER System to generate energy and reduce landfill solid waste (approximately 80%). 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 project cost is $1.6 million dollars. Maniilaq Services, on behalf of the City of Kotzebue, AK has requested grant funding from the National Energy Technology Laboratory (US Government). The decision is pending. 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. $1.6 Million 2.7.2 Other Funds to be provided (Project match) $0.00 2.7.3 Total Grant Costs (sum of 2.7.1 and 2.7.2) $1.6 Million Project Costs & Benefits (Summary of total project costs including work to date and future cost estimates to get to a fully operational project) 2.7.4 Total Project Cost (Summary from Cost Worksheet including estimates through construction) $1.6 Million 2.7.5 Estimated Direct Financial Benefit (Savings) $497,859.36 Annually 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.) $ Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 5 of 20 10/7/2009 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. Michael Scott of Maniilaq Services, LLC, a seasoned project manager, will oversee and manage the TGER Project including our primary subcontractor, Defense Life Sciences, LLC ( DLSci). Mr. Scott is a former general manager of Anchorage Municipal Light and Power as well as a former city manager for the City of Kotzebue. Mr. Scott’s resume and key DLSci and Maniilaq Services personnel are included as Attachment 1. The project manager will report to the City Manager. There will be weekly teleconference meetings among all team members. The project manager will prepare monthly report for all team members and agencies. There will be a project newsletter prepared quarterly. Project accounting, procurement policies and grant reporting will be prepared in advance of project start-up. Review of AEA project grant report will be initiated prior to project start-up. Quality control will be provided by an independent third party reporting directly to the city manager. 3.2 Project Schedule Include a schedule for the proposed work that will be funded by this grant. (You may include a chart or table attachment with a summary of dates below.) The client will have the opportunity to review the results of each step and decide whether or not to continue on with the next step in the program. Based on a 12 month program, a more detailed breakout of the 4 major steps is provided below. Total cost for the 1 year program is approximately $1.6M leading to minimal sustained annual costs. Step 1 (Sept, 2011– Oct, 2011): Defense Life Sciences, LLC ( DLSci), under the Project Management of Maniilaq Services, LLC, will execute a site survey in order to conduct an analysis of the waste stream and utility requirements and costs. DLSci will run the data collected from the site survey through three models in order to determine the scale, cost and feasibility. The three simulation models that will be used are a material and energy balance model, life cycle cost model and a carbon footprint model. Time = 2 months Cost = $80k Step 2 (Nov, 2011 thru January, 2012): DLSci designs an appropriately scaled system based on the models and updates all models based on the final design of the TGER system. Time = 3 months Cost = $240k Step 3 (Feb 15, 2012 thru June 15, 2012): DLSci fabricates, tests, certifies and ships the TGER system designed for the customer’s facility. Time = 4 months Cost = $1.05M Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 6 of 20 10/7/2009 Step 4 (July, 2012 thru Sept, 2012): DLSci installs and operates the TGER system for 3 months in order to demonstrate the day-to-day cost savings from reduced disposal and utilities costs and train municipal personnel. Turns system over to City of Kotzebue to maintain and operate. Time = 3 months Cost = $230k Total Time: 12 months Total Cost: $1.6M Please see Attachment 2 for a detailed Schedule. 3.3 Project Milestones Define key tasks and decision points in your project and a schedule for achieving them. The Milestones must also be included on your budget worksheet to demonstrate how you propose to manage the project cash flow. (See Section 2 of the RFA or the Budget Form.) Please see our response to 3.2 above, our Budget Worksheet, our Budget Form and Attachment 2 for a detailed Project Milestone Schedule and project cash flow. 3.4 Project Resources Describe the personnel, contractors, equipment, and services you will use to accomplish the project. Include any partnerships or commitments with other entities you have or anticipate will be needed to complete your project. Describe any existing contracts and the selection process you may use for major equipment purchases or contracts. Include brief resumes and references for known, key personnel, contractors, and suppliers as an attachment to your application. The project resources for this project will be provided through Maniilaq Association Planning and its affiliate Maniilaq Services. Maniilaq Services, LLC, as the Project Manager, will oversee and manage Defense Life Sciences (DLSci), LLC, the lead company that partnered with Purdue University to design and operationally test and validate the hybrid biorefinery concept following a DoD study on biotechnology. We propose to install, commission, and operate the Tactical Garbage to Energy Refinery (TGER) System for the City of Kotzebue, Alaska. The system will not only dramatically reduce energy cost, but also practically eliminate the transportation costs and fees associated with waste dump charges.. Maniilaq Association and its affiliate Maniilaq Services will provide the personnel, office, facilities, project and technical support to the City of Kotzebue for the design, planning, installation, commissioning, and operation of the Tactical Garbage to Energy Refinery (TGER) System. Maniilaq Association has provided technical assistance to communities in Northwest Alaska for over 35 years. Maniilaq has had a solid waste coordinator working within the region to forge strategies with communities to engage in reducing, recycling and reusing materials away from the landfills. Defense Life Sciences, (DLSci) is dedicated to the development of commercial Life Sciences and other advanced technologies for National and Civil Defense. They bring commercial products to the Department of Defense, Department of Homeland Security, the Intelligence Community and other Federal Agencies. DLSci conducts R&D and product development in the growing field of bio-energy; commercial Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 7 of 20 10/7/2009 representation and sales for emerging products, strategic studies and consulting services. DLSci's staff is a unique team of experts in the fields of scientific, military and acquisition backgrounds. DLSci's mission is to bring into being a market where the Life Sciences will expand beyond the current medical and bio-defense areas into broader applications of energy, engineering, materials science, logistics and other main stream commercial applications. Our projects receive expert ethical, legal and federal policy review to ensure the needs of the government and public are met in a responsible manner. DLSci has the following direct experience with the TGER System:  Defense Life Sciences, LLC partnered with Purdue University to develop the hybrid biorefinery concept following a DoD study on biotechnology;  Aug 04 – RDECOM/ECBC awarded a Phase I STTR contract to Defense Life Sciences, LLC to study the feasibility of the TGER concept ($100K);  Sep 05 – ECBC awarded a Phase II contract to build the first prototype system ($850K)  Jul 07 – Rapid Equipping Force awarded contract to build second prototype and upgrade the original prototype ($2.3M);  Mar 08 – Second prototype complete;  May 08 – 2 TGER prototypes sent to Camp Victory, Iraq for a 90-day field test;  Sep 08 – ATEC Third Party Assessment complete; and  Sep 08 – RDECOM FAST completes in-theater analysis/observation. Michael Scott of Maniilaq Services, LLC, a seasoned project manager, will oversee and manage the TGER Project including our primary subcontractor, Defense Life Sciences, LLC ( DLSci). Michael's resume, DLSci' key personnel resumes, and a letter of reference from the City of Kotzebue are included as Attachment 1 and Attachment 3. 3.5 Project Communications Discuss how you plan to monitor the project and keep the Authority informed of the status. Maniilaq Services brings a partnering culture to work seamlessly with AEA Officials and the City of Kotzebue to establish and maintain effective communications at all levels. As a strategic partner with AEA, Maniilaq Services will put in place a formal communications plan, which lays the foundation for a long-term relationship with our partners. The Maniilaq Services' plan ensures our management team communicates frequently and effectively with each constituent within the AEA and City of Kotzebue. Approach to Maintaining Effective Communications. The following elements of our communications plan are discussed below:  Principal Interfaces, Communication Points and Conflict Resolution;  Electronic Status Reporting;  Regularly Scheduled Meetings; and  Open Informal Communications. Principal Interfaces, Communication Points and Conflict Resolution. Coordination with the AEA and City at every practical level is an integral part of Maniilaq’s communications plan. This approach offers rapid, appropriate response to our AEC and City customers and encourages regular and open communications to enhance operational harmony. Maniilaq establishes and Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 8 of 20 10/7/2009 confirms a meeting within four hours of receipt of a query regarding status of work and complaints. The objective is to identify differences or potential problems before they become conflicts and to seek resolutions in accordance with the following principles:  A commitment on both sides to find a mutually acceptable solution;  Absolute honesty in accepting the reality of the situation without making excuses; and  Acceptance and implementation of the agreed upon solution. The graphic below shows the interfaces and communication points between Maniilaq and Managers and Alpha Company. Communication Points Maniilaq and DLSci Management AEA and City Management Project Manager City Manager, AEA Grant and Project Managers, Department Managers, City Safety Manager Managers and Safety Specialist Department Managers and City Safety Manager Supervisors Key Supervisors and End User Customers Electronic Reporting System. Maniilaq Services uses an electronic status reporting system that provides the AEA and City management with a weekly report that highlights key performance metrics. Linc uses a number of systems to track performance and manage work, including our computerized management system, our financial accounting system, and project management system. All these systems play a significant role in various elements of contract administration, customer communications, project operations and financial performance measurements, and reporting. Regularly Scheduled Meetings. Maniilaq Services schedules and hosts quarterly executive performance review meetings between the AEC Managers, City Managers, and the Maniilaq Project Manager and DLSci on-site Manager. At these meetings, Maniilaq Services provides an overview of program activities for the previous quarter with its strengths and weaknesses and corrective actions taken or planned, the major initiatives planned for the coming quarter, and reach agreement on the coming quarter’s priorities and common goals for Maniilaq and the AEC. Maniilaq Services schedules and hosts monthly Performance Assessment meetings between the Maniilaq Project Manager and City Department Managers. Open Informal Communications. Maniilaq Services promotes cordial, open communications with our valued customers at all levels. All of our employees complete initial and recurring annual customer satisfaction training and customer communications is a key element of this training. 3.6 Project Risk Discuss potential problems and how you would address them. We conduct risk assessments for each process for the installation and operation of the TGER system. This approach emphasize establishing multiple risk mitigation scenarios for each potential risk For example, risk mitigation strategies may include multiple strategies such as detailed planning, training, back-up processes, and even strategic application of technology. The following chart provides an overview of our preliminary risk assessment and risk abatement plan. Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 9 of 20 10/7/2009 TGER Project Risk Assessment and Risk Abatement Risk Element Description Probability of Failure Consequence of Failure Risk Abatement Plan High Winds Northwest Alaska is prone to high winds that would make installation of the TGER System hazardous. High Low Installation of the TGER system will be curtailed during high wind situations. This will mitigate the risk. TGER System Configuration Control Maintain system design integrity and safety and environmental protection envelopes by ensuring parts, materials, and line replacement units are equal to and installed according to approved specifications and design criteria. Medium High Require specifications development support and the signoff by the Project Manager on all replacement materials and parts to ensure exact form, fit, and function. TGER Project Risk Assessment and Risk Abatement Risk Element Description Probability of Failure Consequence of Failure Risk Abatement Plan Safety Equipment/PPE Provision of Safety Equipment and Respiratory protection Services Low High The PM will be responsible to acquire all required safety equipment. The PM will ensure supervisors require personnel certifications to be current prior to assigning any craft person to duty where PPE is a prerequisite for safety. Line supervisors will physically inspect PPE on a monthly basis and return and defective or suspect respiratory PPE to the PM for maintenance and repair or replacement. Life Safety Systems Caution and Safety Envelopes Medium High Extreme caution and safety will be observed when dealing with vital safety systems and work in extremely hazardous areas (i.e., compressed gas systems, underground, enclosed spaces, tanks, etc.). The PM will sign off on work plans for these areas, and establish hold points for safety walkthroughs, pre- work start verification of personnel certifications, and knowledge of emergency / contingency plans. Snow and Ice Removal Removal to protect Maniilaq and DLSci Employees Low Medium The Maniilaq PM will use a proactive approach to snow and ice removal tasks at the TGER site during installation and operation to begin assembling – staffing- equipment-materials prior to the onset of snow and ice storms. Work will commence in non-core hours to all extent practicable so that snow and ice hazards are mitigated. All personnel will be trained to know hazards involved with loss of metal elasticity during near- and below-freezing conditions, a higher risk for pressurized systems than those non pressurized. Drawings and Utility Maps Area Surveys Low High The Maniilaq PM will require area surveys during the planning of TGER system installation work. Surveys will validate above- and below ground drawing and utility maps, including Underground Utility Maps (UUMs). Detectors and probes will be used to Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 10 of 20 10/7/2009 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 TGER System is "waste to energy" system. Waste-to-energy facilities produce clean, renewable energy through the combustion of municipal solid waste in specially designed power plants equipped with the most modern pollution control equipment to clean emissions. Trash volume is reduced by 80% and the remaining residue is regularly tested and consistently meets strict EPA standards allowing reuse or disposal in landfills. There are 89 waste-to-energy plants operating in 27 states managing about 13 percent of America's trash, or about 95,000 tons each day. Waste-to-energy facilities generate about 2,500 megawatts of electricity to meet the power needs of nearly 2.3 million homes, and the facilities serve the trash disposal needs of more than 36 million people. The $10 billion waste-to-energy industry employs more than 6,000 American workers with annual wages in excess of $400 million. The use of waste-to-energy technology prevents the release of forty million metric tons of greenhouse gases in the form of carbon dioxide equivalents that otherwise would be released into the atmosphere on an annual basis, according to an analysis developed by the U.S. Environmental Protection Agency and the Integrated Waste Services Association (IWSA) using EPA's Decision Support Tool program. Annual reporting by IWSA to the U.S. Department of Energy's Voluntary Reporting of Greenhouse Gases Program confirms that waste-to-energy also prevents the release each year of nearly 24,000 tons of nitrogen oxides and 2.6 million tons of volatile organic compounds from entering the atmosphere. America's waste-to-energy facilities dispose of trash, and are an alternative to land disposal that releases methane (a potent greenhouse gas) as trash decomposes. Waste-to-energy also produces validate location of underground structures and utilities. Discrepancies will be redlined and provided to the City of Kotzebue. High Voltage Personnel Safety High High Only journeyman high voltage electricians will be permitted to connect, disconnect, maintain, inspect, or support predictive maintenance and inspection on HV systems. Two man rules will be required and enforced. Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 11 of 20 10/7/2009 electricity, lessening reliance on fossil fuel power plants that release carbon dioxide, another greenhouse gas, into the atmosphere when coal or oil is burned. Operation of waste-to-energy plants avoid the release of methane that otherwise would be emitted when trash decomposes, and the release of CO2 that would be emitted from generating electricity from fossil fuels. System Description: TGER is a “Hybrid System” incorporating two complementary technologies:  Bioreactor to convert carbohydrates, sugars, some cellulosic waste into vaporous ethanol  Thermo chemical gasifier to convert bioreactor residuals into “fuel gas” • Fuel gas and vaporous ethanol are fumigated into the diesel engine as a substitute for diesel fuel • System of energy & materials exchange between subsystems for o/a system efficiency • System outputs are benign ash and CO2* * With exception of Petroleum-based plastics conversion, system is “carbon-neutral” How it Works:  Mixed waste is loaded into a chute where wet food waste is separated for fermentation  Solid waste is ground up and converted into fuel pellets for delivery to a downdraft gasifier  Hydrous ethanol from fermentation and syngas from thermal decomposition are blended and aspirated into a 60kW generator to produce electricity Products:  Electricity – can be used immediately, diverted to a power micro-grid, or used to charge batteries  Ash – environmentally benign  Engine exhaust – EPA certified  Grey water – environmentally benign (filtered and boiled)  Excess thermal energy – 250,000 BTUs can be captured for heat, hot water, field sanitation, etc. TGER Performance Data: Theoretical/Optimal TGER Performance Data Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 12 of 20 10/7/2009 Power Output Power Efficiency Diesel Consumption Rate Ethanol Consumption Rate Ethanol Production Rate Solid Waste Processing Rate (Pellet Production) Liquid Waste Processing Rate Total Waste Processing Rate Diesel Savings 54 kW 90% 1 gph 1 gph 1 gph 60 lbs/hr 13 lbs/hr 1,752 lbs/day 3.6 gph System Qualities:  Compact – fits standard shipping containers, trailerable  Fast - converting 2,500 lbs waste to energy w/i 24 hrs  Efficient • Unique hybrid design (Bio & Thermo) > efficiency • Parasitic costs to run the system are less than 10%  Flexible – tolerates variable waste streams well  Cost effective (Energy and Materials Balance Model) • Not an expensive garbage disposal • Focused on energy dense waste • Paper, Plastic, Packaging & Food waste • No glass, metal, human, hazardous waste • Very productive balance of waste disposal and energy production The TGER System is an alternative supplement energy system that will complement and expand the existing City energy resources. . 4.2 Existing Energy System 4.2.1 Basic configuration of Existing Energy System Briefly discuss the basic configuration of the existing energ y system. Include information about the number, size, age, efficiency, and type of generation. Current City of Kotzebue Utilities: Water is supplied by the 150-million-gallon Vortac Reservoir, located one and a half miles from the city. Water is treated and stored in a 1.5-million- gallon tank. Water is heated with a waste heat recovery system at the electric plant and distributed in circulating mains. Piped sewage is treated in a 32-acre zero discharge facultative lagoon west of the airport. Around 80% of homes are fully plumbed, and 521 homes are served by the city system. A transfer station and Class 2 permitted landfill with bale fill is available. Recycling and hazardous waste disposal are provided. Kotzebue uses 17 50 kilowatt wind turbines to supplement electricity. Electricity is provided by Kotzebue Electric Association. Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 13 of 20 10/7/2009 Kotzebue Electric Association: Kotzebue Electric Association (KEA) is a non-profit cooperative that provides power for Kotzebue, Alaska. The city of Kotzebue is located 67 deg. North latitude, 162 deg. West longitude at the tip of the Baldwin Peninsula on Kotzebue Sound in North-western Alaska. Climatic conditions at Kotzebue are characterized by long cold winters and cool summers. Kotzebue is a community of over 3000 people and is the service hub for 11 communities in Northwest Alaska. KEA has a peak electrical load of approximately 4 megawatts. Kotzebue Electric Association (KEA) is a pioneer in the use of wind energy in the United States. KEA's 17 utility-grade wind turbines generate seven (7) percent of Kotzebue's electricity, which translates to a savings of 100,000 gallons of diesel per year. Cost savings in 2008 are expected to be well above $300,000. KEA provides waste heat to the city to heat its water systems which allows the City of Kotzebue to reduce its costs of heating the system by 30 percent. A Proven System: DLSci has the following direct experience with the TGER System:  Defense Life Sciences, LLC partnered with Purdue University to develop the hybrid biorefinery concept following a DoD study on biotechnology;  Aug 04 – RDECOM/ECBC awarded a Phase I STTR contract to Defense Life Sciences, LLC to study the feasibility of the TGER concept ($100K);  Sep 05 – ECBC awarded a Phase II contract to build the first prototype system ($850K)  Jul 07 – Rapid Equipping Force awarded contract to build second prototype and upgrade the original prototype ($2.3M);  Mar 08 – Second prototype complete;  May 08 – 2 TGER prototypes sent to Camp Victory, Iraq for a 90-day field test;  Sep 08 – ATEC Third Party Assessment complete; and  Sep 08 – RDECOM FAST completes in-theater analysis/observation. As shown above, the TGER is a fully developed and proven system available now for deployment. 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. Please see our response to 4.2.2 above. The current cost of electricity for the City is $0.245 per kwh w/Power Cost Equalization and $5.61 per gallon for diesel fuel. Our initial approach for the TGER System is saving on the consumption of electricity and heating fuel to power and heat the Kotzebue government buildings while diverting over 80% of the waste stream from the landfill to create fuel to spin a generator for electric and heat purposes. Future opportunities for use of the system include the eleven (11) communities surrounding the City of Kotzebue and other small communities throughout rural Alaska. 4.2.3 Existing Energy Market Discuss existing energy use and its market. Discuss impacts your project may have on energy customers. The energy savings for the City can be used for other needed projects and ongoing operations. The system will sell excess generated power at KEA’s avoided cost to reduce the cost of energy to Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 14 of 20 10/7/2009 residential customers. Additionally, as outlined above, use of the system will have a significant positive impact on the environment and the health of the citizens of Kotzebue. 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 Please see our response to Section 4.1 above for the design and description, optimum capacity, and delivery methods of the TGER System. We do not anticipate any barriers to the installation and operation of the system. Please see our Kotzebue Project Analysis (attached) for detailed information on our assumptions, electricity and heat production, annual fuel usage, project cost, project benefits, power purchase sales price, and a basic economic analysis. 4.3.2 Land Ownership Identify potential land ownership issues, including whether site owners have agreed to the project or how you intend to approach land ownership and access issues. The City of Kotzebue fully supports the installation and operation of the TGER System on City land. The TGER will be housed immediately adjacent to the City’s existing baler building within the municipal public works compound. The baler building received the solid waster daily and serves as the source separation point to provide the feedstock to the new TGER system. 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 Maniilaq Services will work with the City of Kotzebue Administrative and Public Works Departments to identify and obtain permits required by the City of Kotzebue and State of Alaska. We will obtain all required permits within 30 days of Grant award. We do not anticipate any barriers. 4.3.4 Environmental Address whether the following environmental and land use issues apply, and if so how they will Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 15 of 20 10/7/2009 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 TGER System impact on the environment is all positive. There are no negative impacts or barriers in the operation of the system. All of these issues were dealt with in the siting of the baler building. The TGER is compliant with the current environmental regulations for the facility.. 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 Please see our attached Grant Budget form. 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.) We project the TGER O&M costs to be minimal - estimated annual operation, preventive and repair maintenance cost - $120,000.00 annually. 4.4.3 Power Purchase/Sale The power purchase/sale information should include the following:  Identification of potential power buyer(s)/customer(s)  Potential power purchase/sales price - at a minimum indicate a price range  Proposed rate of return from grant-funded project Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 16 of 20 10/7/2009 Initially the TGER System will directly offset current supplier cost of electricity and fuel. Potentially, the City can sell electricity to KEA at a purchase / sales price of $0.30 per kWh. Estimated rate of return from this grant-funded project is 2.24 years. Please see our Kotzebue Project Analysis (attached) for detailed information on our assumptions, electricity and heat production, annual fuel usage, project cost, project benefits, power purchase sales price, and a basic economic analysis. Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 17 of 20 10/7/2009 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. Sources for our numbers are from the City of Kotzebue and DLSci, LLC. Project Cost Worksheet and our Kotzebue Project Worksheet are attached. 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 Please see our Kotzebue Project Analysis (attached) for detailed information on our assumptions, electricity and heat production, annual fuel usage, project cost, project benefits, power purchase sales price, and a basic economic analysis. Non-economic benefits include improved public safety, protection of public health, reduction of water pollution from leachate, reduction of windblown debris, and reduction of ground and visual pollution. Landfills or bale fills can cause health and safety problems, pollute drinking water and harm wildlife. SECTION 6– SUSTAINABILITY Discuss your plan for operating the completed project so that it will be sustainable. Include at a minimum:  Proposed business structure(s) and concepts that may be considered.  How you propose to finance the maintenance and operations for the life of the project  Identification of operational issues that could arise.  A description of operational costs including on-going support for any back-up or existing systems that may be require to continue operation  Commitment to reporting the savings and benefits The City of Kotzebue will finance the maintenance and operations for the life of the project. As stated above, we anticipate these costs to be minimal ($120,000 per year). The City of Kotzebue Department of Public Works personnel will be trained on the operations and maintenance of the TGER System during the installation, commissioning, and operation of the system during the last three months of the project. Mike Scott of Maniilaq Services and the City will be responsible for all project evaluation which will include a formative and summative evaluation by reports made to AEA and the Maniilaq Board of Directors and the Maniilaq Association President/CEO. We will use the evaluation tools Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 18 of 20 10/7/2009 below.  Identify the current and projected pounds of waste generated by the City of Kotzebue (daily; weekly; and monthly);  Assess the City of Kotzebue typical weather conditions impact on the TGER system;  Work with the City of Kotzebue to tentatively identify and document the TGER system physical location and the logistics of setting-up the waste stream;  Establish a plan to transport, install, configure, start-up, commission, and operate the TGER system;  Estimate the amount of waste to energy the system will produce on a daily basis and design a process to document and track this information [power output; power efficiency; diesel consumption rate; ethanol consumption rate; ethanol production rate; solid waste processing rate (pellet production); liquid waste processing rate; total waste processing rate; and diesel savings].  Estimate the impact on reducing landfill waste and the associated cost reduction;  Estimate the overall savings generated for the City; and  Design a measuring system to measure the positive impact on the environment. SECTION 7 – READINESS & COMPLIANCE WITH OTHER GRANTS Discuss what you have done to prepare for this award and how quickly you intend t o proceed with work once your grant is approved. Tell us what you may have already accomplished on the project to date and identify other grants that may have been previously awarded for this project and the degree you have been able to meet the requirements of previous grants. As outlined earlier, the TGER System is a proven prototype. The City of Kotzebue, Maniilaq Services and DLSci, LLC understand the milestones in detail on the TGER Project and all parties have identified the TGER as a priority project. We will immediately proceed with the work upon AEA approval of the grant. SECTION 8– LOCAL SUPORT Discuss what local support or possible opposition there may be regarding your project. Include letters of support from the community that would benefit from this project. We have attached letters of support (Attachment 3) for the City of Kotzebue TGER System project from the City of Kotzebue, Northwest Arctic Borough School District, Maniilaq Association, Chukchi College and a Letter of Commitment from Defense Life Sciences, LLC. There has been no opposition to the project. SECTION 9 – GRANT BUDGET Tell us how much you want in grant funds Include any investments to date and funding sources, how much is being requested in grant funds, and additional investments you will make as an applicant. Include an estimate of budget costs by milestones using the form – GrantBudget3.doc Provide a narrative summary regarding funding sources and your financial commitment to the project. The following investments have be made on the TGER System: Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 19 of 20 10/7/2009  Defense Life Sciences, LLC partnered with Purdue University to develop the hybrid biorefinery concept following a DoD study on biotechnology;  Aug 04 – RDECOM/ECBC awarded a Phase I STTR contract to Defense Life Sciences, LLC to study the feasibility of the TGER concept ($100K);  Sep 05 – ECBC awarded a Phase II contract to build the first prototype system ($850K)  Jul 07 – Rapid Equipping Force awarded contract to build second prototype and upgrade the original prototype ($2.3M);  Mar 08 – Second prototype complete;  May 08 – 2 TGER prototypes sent to Camp Victory, Iraq for a 90-day field test;  Sep 08 – ATEC Third Party Assessment complete; and  Sep 08 – RDECOM FAST completes in-theater analysis/observation. Maniilaq Services, LLC on behalf of the City of Kotzebue, AK has requested grant funding from the National Energy Technology Laboratory (US Government). The decision is pending. We are applying for an AEA Round 3 Grant in the amount of $1.6 million. Our completed GrantBudget3.doc is attached. SECTION 9 – ADDITIONAL DOCUMENTATION AND CERTIFICATION SUBMIT THE FOLLOWING DOCUMENTS WITH YOUR APPLICATION: A. Resumes of Applicant’s Project Manager, key staff, partners, consultants, and suppliers per application form Section 3.1 and 3.4. Attachment 1. B. Cost Worksheet per application form Section 4.4.4. Attached. C. Grant Budget Form per application form Section 9. Attached. D. Letters demonstrating local support per application form Section 8. Attachment 3. E. An electronic version of the entire application on CD per RFA Section 1.6. Attached. 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. Attachment 3. - Provides as point of contact to represent the applicant for purposes of this application. Attachment 3. - 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. Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 20 of 20 10/7/2009 Print Name Rich Walker Signature Title City Manager Date 11-9-09