HomeMy WebLinkAboutChignik Lake Application
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 1 of 14 9/2/2008
Application Forms and Instructions
The following forms and instructions are provided for 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.html
The following application forms are required to be submitted for a grant recommendation:
Grant Application
Form
GrantApp.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
Costworksheet.doc Summary of Cost information that should be addressed
by applicants in preparing their application.
Grant Budget
Form
GrantBudget.xls A detailed grant budget that includes a breakdown of
costs by task and a summary of funds available and
requested to complete the work for which funds are being
requested.
Grant Budget
Form Instructions
GrantBudgetInstr.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 a plan
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.
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 2 of 14 9/3/2008
SECTION 1 – APPLICANT INFORMATION
Name (Name of utility, IPP, or government entity submitting proposal)
Alaska Green Energy, LLC (AGE)
Type of Entity:
Independent Power Producer
Mailing Address
1150 S. Colony Way, Suite 333
Palmer, Alaska 99645
Physical Address
634 S. Bailey, Suite 201
Palmer, Alaska 99645
Telephone
907-746-4796
Fax
907-746-4798
Email
rgross@akgreenenergy.com
www.akgreenenergy.com
1.1 APPLICANT POINT OF CONTACT
Name
Robert Gross
Title
Vice President, Operations
Mailing Address
1150 S. Colony Way, Suite 333
Palmer Alaska 99645
Telephone
907-360-3880
Fax
907-746-4798
Email
rgross@akgreenenergy.com
www.akgreenenergy.com
1.2 APPLICANT MINIMUM REQUIREMENTS
Please check as appropriate. If you do not to meet the minimum applicant requirements, your
application will be rejected.
1.2.1 As an Applicant, we are: (put an X in the appropriate box)
An electric utility holding a certificate of public convenience and necessity under AS
42.05, or
X An independent power producer, 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 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.)
Renewable Energy Fund
Grant Application
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SECTION 2 – PROJECT SUMMARY
Provide a brief 1-2 page overview of your project.
2.1 PROJECT TYPE
Describe the type of project you are proposing, (Reconnaissance; Resource Assessment/
Feasibility Analysis/Conceptual Design; Final Design and Permitting; and/or Construction) as
well as the kind of renewable energy you intend to use. Refer to Section 1.5 of RFA.
Project Title: Chignik Lake CBM Concept Design
Project Type: This project will include the Reconnaissance and Resource
Assessment/Feasibility/Concept Design Phase.
AEA Funding Request: $1,995,000
Project Location: Chignik Lake Alaska. See Exhibit A Location Map
Project Goals:
1. To determine if commercially viable quantities of CBM gas are available to provide a
new base energy source for Chignik Lake.
2. To determine if it would be viable to distribute the CBM gas to the communities of
Chignik Lagoon and Chignik.
3. To develop a Conceptual CBM Development and Distribution Plan that will serve the
Chignik Villages.
2.2 PROJECT DESCRIPTION
Provide a one paragraph description of your project. At a minimum include the project location,
communities to be served, and who will be involved in the grant project.
The Lake and Peninsula Borough, the Lake and Peninsula School District and the Bristol Bay
Native Corporation have indicated written or verbal support for this project (see attached letters
of support). The Lake and Peninsula School District supplies power to the school and Chignik
Lake community with their diesel generators. They used over 65,000 gallons of diesel in the
2007/2008 school year which must transported 5000 gallons at time in a tanker truck from
Chignik via a small vessel that can navigate the Chignik River. Diesel cost $3.87 a gallon
delivered to Chignik plus a $1.10 per gallon surcharge to transport it from Chignik to Chignik
Lake for a total of $323,050 for the 2007/2008 school year.
The State of Alaska Department of Natural Resources February 2000 report titled Coalbed
Methane and Exploration Targets for Rural Alaska Communities identifies the Chignik Bay
Basin within the Alaska Peninsula Province as having potential CBM resources. The Chignik
Basin is underlain by bituminous coal. This project will confirm this potential resource by drilling,
coring and testing CBM resources in the Chignik Lake area. A specific drilling plan will be
prepared during the Reconnaissance Phase. Once the final location is determined, the drilling,
coring and testing will take place during the Resource Assessment/Feasibility phases.
While the community is assessing other alternative energy resources, CBM gas is the only
potential resource that could provide Chignik Lake with a sustainable, low cost fuel option 24/7,
365 days a year without interruption. This assessment project will determine CBM’s viability
and compare its potential to other alternative energy resources.
Results of the assessment will be presented in a report that will also make recommendations on
how best to delivery the CBM resource to Chignik Lake if commercially viable quantities of the
resource are found. The report will also identify possible means of delivering the CBM to
Chignik Lagoon and Chignik and identify additional study or testing requirements.
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Grant Application
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If viable quantities of CBM gas are found, AGE will work with the Chignik Lake community, the
Bristol Bay Borough, BBNC, Chignik Lake Traditional Council and Chignik River Limited to fund
future phases. The CBM development will employ Fowler Oil and Gas Company’s horizontal
drilling which allows a larger well spacing and minimizes land use impacts. Fowler’s technology
also employs down well dewatering to avoid above ground water management and its
associated environmental issues.
2.3 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. Include a project cost summary that includes an estimated total cost
through construction.
Funding for the Reconnaissance Phase and the Resource Assessment/Feasibility/Conceptual
Design is proposed with AEA Renewable Energy Grant Funds. AEA grants and other funding
sources will be sought for the final design and construction if commercially viable amounts of
CBM gas area found. See the Budget Summary below.
2.4 PROJECT BENEFIT
Briefly discuss the financial benefits that will result from this project, including an estimate of economic
benefits(such as reduced fuel costs) and a description of other benefits to the Alaskan public.
Chignik Lake and its sister communities of Chignik Lagoon and Chignik suffer from the same
dependence on extremely expensive diesel fuel to provide heat and power to their communities
as other rural Alaskan communities. If commercially viable quantities of CBM gas is found in
the Chignik Lake area, then the community will have new, sustainable base energy resource
24/7, 365 days a year for a minimum of 25 years or longer depending on resource availability.
Significantly replacing diesel with CBM would improve Chignik Lake’s air quality, reduce its
carbon footprint and address safety concerns with the transportation, delivery and transfer of
65,000 gallons of diesel fuel which occurs 5000 gallons at a time 13 trips a year.
Chignik Lagoon and Chignik use similar amounts of diesel fuel annually. If CBM gas is found
and it is viable to deliver CBM to Chignik Lagoon and Chignik, then another 115,000 gallons of
diesel will be displaced. AGE will determine the viability of delivering CBM gas Chignik Lagoon
and Chignik as a means of reducing their dependency on diesel fuel. The results of this
analysis will be contained in the final assessment report.
The State of Alaska currently subsidizes rural power costs. Reducing rural Alaska’s
dependency on diesel fuel and reducing the need for State subsidies benefits all Alaska.
The Chignik Lake annual fuel displacement savings for power generation is estimated at
$240,000 with an additional annual fuel displacement savings of roughly $480,000 for both
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Grant Application
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Chignik Lagoon and Chignik. This equates to $720,000 annually or $18,000,000 over the
project 25 year life of the project. This assumes that all capital costs are funded through grants
or State appropriations and that there is no capital debt repayment.
Providing for the long term economic viability and maintaining the cultural integrity of the
communities is the ultimate benefit of this project.
2.5 PROJECT COST AND BENEFIT SUMARY
Include a summary of your project’s total costs and benefits below.
2.5.1 Total Project Cost
(Including estimates through construction.)
$1,995,000.00
2.5.2 Grant Funds Requested in this application. $1,995,000.00
2.5.3 Other Funds to be provided (Project match) $0.0
2.5.4 Total Grant Costs (sum of 2.5.2 and 2.5.3) $1,995,000.00
2.5.5 Estimated Benefit (Savings) $ 720,000 annual fuel
displacement for the 3
Chignik Communities
2.5.6 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.)
$ See section 2.4
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.
Project Manager: Bob Gross, AGE’s Vice President of Operations, will manage this project.
Bob has extensive experience as a project manager for large oil field; major public and defense
infrastructure; and, commercial master planning and development projects. Bob will be
responsible all aspects of the project management including being the point of contact with
AEA.
Bob’s resume and references are attached.
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 preconstruction phases are estimated to take 12 months. Exhibit B provides a detailed
project schedule and milestones.
3.3 Project Milestones
Define key tasks and decision points in your project and a schedule for achieving them.
Key milestones will occur at different points in both the Reconnaissance and Feasibility Phases.
A decision will be made at these points whether or not to fund move on to the next phase.
Exhibit B provides detailed project milestones.
3.4 Project Resources
Describe the personnel, contractors, equipment, and services you will use to accomplish the
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Grant Application
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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.
AGE will provide management to and will use Kansas Geological Surveys as our seismic
contractor. Scientific Drilling will perform the drilling, coring, and testing.
3.5 Project Communications
Discuss how you plan to monitor the project and keep the Authority informed of the status.
Bob Gross will be AGE’s prime point of contact for AEA and will be available by cell phone and
e-mail at presented in Section 1.1 of this grant application. Monthly status reports and quarterly
financial reports will be provided per the requirements identified in the Sample Grant
Agreement. AGE will meet or exceed all project and financial reporting requirements for this
grant.
Additionally, Alaska Green Energy will utilize a web-based project management system to track
and communicate with large groups of people on our specific projects. This system is state-of-
the-art and ensures that everyone involved in the project has clear guidelines on task
completion and responsibility.
Effectively, this will allow AGE and AEA staffs to collaborate and share data, irrespective of their
geographic location. This system will also dynamically create GANTT charts for each project
and have discussion forums associated with various milestone requirements dictated for each
project when it is undertaken.
As it is web-based, loss of data and security are both assured by our webmaster.
We will issue a username and password to our AEA designated point-of-contact who will then
be able to monitor and make communications about the project, information, files, forums etc.
Please visit our website at www.akgreenenergy.com to view this system.
3.6 Project Risk
Discuss potential problems and how you would address them.
The risks during these initial project phases are minimal. The Reconnaissance and Resource
Assessment/Feasibility/Conceptual Design Phase should identify potential risks associated with
construction a working CBM well in the Chignik Lake area. Once specifically identified, these
risks will be addressed and mitigated during the Final Design/Permitting Phase prior to
construction.
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 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 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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Grant Application
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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.
Coalbed Methane gas is the proposed energy resource. State and federal reports indicate that
the United States has 50% of the world’s coal reserves. Alaska has 50% of the coal reserves in
the United States or 25% of the world’s reserves. These same reports estimate that there is
over 1,000 trillion cubic feet of CBM resources in Alaska. These reports point to CBM as the
energy solution in rural Alaska communities with CBM resources.
State and federal agencies, universities and several Regional Native Corporations have
collaborated to identify 38 rural communities that have potential Coal Bed Methane resources.
These reports identify Chignik Lake, Chignik Lagoon and Chignik as being locate atop the
Chignik Basin Coalfield with bituminous coals as the resource with potentially high amounts of
CBM gas available. AGE narrowed the location further based on conversations with state and
local officials.
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.
Chignik Lake Electric Utility purchases power from the school during the school year and
produces power during the summer months. Chignik Lake’s primary diesel generator is 80KW.
Chignik Lake also uses diesel to provide heat to the school. In combination, total diesel usage to
power the community and to heat the school is 65,000 gallons. Chignik Lagoon has 525 KW
diesel fuel and Chignik has a 300KW diesel generator.
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.
Chignik Lake uses approximately 65,000 gallons of diesel fuel annually at a current cost of
$4.97per gallon or $323,050 annually. Significant savings will occur if commercially viable CBM
resources are found and developed. If it proves feasible to deliver CBM gas to Chignik Lagoon
and Chignik, all three communities will experience a significant reduction in energy costs.
4.2.3 Existing Energy Market
Discuss existing energy use and its market. Discuss impacts your project may have on energy
customers.
Chignik Lake residents, agencies and commercial businesses are the existing customers. If
commercially viable CBM gas can be delivered to Chignik Lake, its residents will have a much
less expensive, sustainable base fuel source available 24/7, 365 days a year. Diesel will be
required in smaller quantities as a backup fuel source.
If it is feasible to delivery CBM to Chignik Lagoon and Chignik, then these communities will also
become customers and will see a significant reduction in energy costs.
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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
This project will assess the availability of CBM resources in the Chignik Lake area. AGE will
work with Lake and Peninsula School District and Chignik Lake Electric Utility to determine what
modifications to their existing systems will be required to convert their generators to CBM gas. A
similar analysis will be prepared for Chignik Lagoon and Chignik communities. These
recommendations will be part of the final assessment report. The following depicts a possible
scenario that ties the CBM resource into a Combined Heat and Power Plant:
Again, any proposed modifications to the existing power generation system or system
replacement will be part of the final assessment report.
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.
Chignik River Limited is the surface estate owner and the Bristol Bay Native Corporation owns
the subsurface estate. All appropriate rights-of-entry will be obtained from these entities during
the Reconnaissance Phase prior to initiating the Resource Assessment, Feasibility and Concept
Design Phase.
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
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• Identify and discussion of potential barriers
Issuer Issue Date Description
Alaska State Fire
Marshall
Spring 2010
Alaska Department of
Environmental
Conservation
Spring 2010 Title V Air Quality Construction and Final Permit
Alaska Department of
Environmental
Conservation
Spring 2010 Wastewater Discharge – UIC, Plan approval
Lake and Pen Borough Spring 2010 Local Coastal Management Review
Alaska Department of
Environmental
Conservation
Spring 2010 Contingency Plan
Alaska Department of
Environmental
Conservation
Spring 2010 NPDES Stormwater Permit - Construction
Alaska Department of
Environmental
Conservation
Spring 2010 Oil Discharge & Contingency plan determination
Alaska Department of
Environmental
Conservation
Spring 2010 Temporary Camps
Alaska DOT Spring 2010 Right of Way
Alaska Department of
Natural Resources
Spring 2010 Alaska Coastal Management Program
Alaska Department of
Natural Resources
Spring 2010 Div of Mining, Land, & Water Tundra Travel
Alaska Department of
Natural Resources Div
of Oil and Gas
Spring 2010 Plan of Operations
Alaska Department of
Natural Resources Div
of Oil and Gas
Spring 2010 Geophysical Exploration Permit
* AGE sees no barriers to obtaining these permits by the identified dates.
4.3.4 Environmental
Address whether the following environmental and land use issues apply, and if so how they will
be addressed:
• Threatened or Endangered species
• Habitat issues
• Wetlands and other protected areas
• Archaeological and historical resources
• Land development constraints
• Telecommunications interference
• Aviation considerations
• Visual, aesthetics impacts
• Identify and discuss other potential barriers
Threatened or Endangered species, habitat issues, wetlands and other protected areas, and
archaeological and historical resources are addressed in the State permitting process listed
above. Land development constraints have and will be further identified through the local
permitting process and working with the surface and subsurface estate owners.
Telecommunications interference will not be an issue. Aviation considerations may temporarily
result due to locations of drilling rigs. Proper approvals will be obtained from the FAA and
NOTAM’s will be issued. Visual aesthetics impacts from this work will be mitigated on a case-by-
case basis following the local permitting and approval processes.
The important environmental solutions provided by AGE’s proposed construction technology if
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viable quantities of CBM gas are found is that the well spacing is a larger well spacing. Lower 48
CBM industrial practices have significant impacts due the well spacing of 1 well per 10 or 20
acres and supporting spider webs of roads needed to service these multiple wells. Down well
dewatering eliminates the environmental and costly above ground management of produced
water which is often contaminated.
4.4 Proposed New System Costs (Total Estimated Costs and proposed 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
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.
• Total anticipated project cost for this phase
• Requested grant funding
Accurate O & M costs will be determined during the feasibility stage and incorporated into the
Business Plan for the project. O&M costs will cover the maintenance of the CBM well, the
distribution system and the power plant.
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4.4.3 Power Purchase/Sale
The power purchase/sale information should include the following:
• Identification of potential power buyer(s)/customer(s)
• Potential power purchase/sales price - at a minimum indicate a price range
• Proposed rate of return from grant-funded project
The customers of Chignik Lake Electric are the potential energy buyers. A preliminary estimate
is that the cost of power could be reduced from $0.75 per KWH to $0.25 per KWH assuming no
debt repayment on the capital improvements. This provides a benefit cost ratio of 3 derived by
dividing the existing cost by the project cost.
4.4.4 Cost Worksheet
Complete the cost worksheet form which provides summary information that will be considered
in evaluating the project.
The Cost Work Sheet is found under Section 7B of the Grant Submittal.
4.4.5 Business Plan
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.
A business plan will be developed among BBNC, Chignik River Limited, Chignik Lake
Electric Utility and AGE or the ultimate developer of the well to establish ongoing
maintenance requirements and services, major maintenance and well monitoring.
Accurate costs of O&M will be included in the Business Plan. Royalties will have to be
negotiated. This work will be addressed during this project.
4.4.6 Analysis and Recommendations
Provide information about the economic analysis and the proposed project. Discuss your
recommendation for additional project development work.
CBM gas has been identified by the AEA and other State and Federal agencies as a means of
resolving the energy crises facing rural Alaskan communities with potential CBR resources. The
initial assessments have been completed by State and Federal Agencies. The next step is to
drill, core and test the CBM resources in these communities. If commercially viable CBM
resources are found, then the community will have a sustainable base energy resource available
24/7, 365 days a year to reduce their dependency on expensive diesel fuel. It will never be
known if CBM will provide up to 38 rural Alaskan communities energy needs unless the next step
in the assessment process is taken to prove if commercially viable amounts of CBM is available.
The economics of rural energy is that many rural residents are expending up to 40% of their
income to heat and power their homes. Rural energy costs are bankrupting rural residents and
communities. Although CBM development has a moderately high initial cost of about $7,000,000
per well, its long term social and economic benefits to rural residents and communities are
immeasurable.
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SECTION 5– PROJECT BENEFIT
Explain the economic and public benefits of your project. Include direct cost savings,
and how the people of Alaska will benefit from the project.
The benefits information should include the following:
• Potential annual fuel displacement (gal and $) over the lifetime of the evaluated
renewable energy project
• Anticipated annual revenue (based on i.e. a Proposed Power Purchase Agreement price,
RCA tariff, or avoided cost of ownership)
• Potential additional annual incentives (i.e. tax credits)
• Potential additional annual revenue streams (i.e. green tag sales or other renewable
energy subsidies or programs that might be available)
• Discuss the non-economic public benefits to Alaskans over the lifetime of the project
• Potential annual fuel displacement (gal and $) over the lifetime of the evaluated
renewable energy project:
Assuming 180,000 gallons at $4.00 per gallon average for the three communities, the annual
displacement would be $720,000 x 25 years = $18,000,000. This assumes that all capital costs
will be funded with grants or State appropriations and that their will be no capital debt repayment.
• Anticipated annual revenue (based on i.e. a Proposed Power Purchase Agreement price,
RCA tariff, or avoided cost of ownership):
A preliminary estimate is that the cost of power could be reduced from $0.75 per KWH to $0.25
per KWH assuming no debt repayment on the capital improvements. This equates to a positive
benefit cost ratio of 3.
• Potential additional annual incentives (i.e. tax credits): Possible federal incentives.
• Potential additional annual revenue streams (i.e. green tag sales or other renewable
energy subsidies or programs that might be available): N/A
• Discuss the non-economic public benefits to Alaskans over the lifetime of the project:
Chignik Lake and its sister communities of Chignik Lagoon and Chignik suffer from the same
dependence on extremely expensive diesel fuel to provide heat and power to their communities
as other rural Alaskan communities. If commercially viable quantities of CBM gas is found in the
Chignik Lake area, then the community will have new, sustainable base energy resource 24/7,
365 days a year for a minimum of 25 years or longer depending on resource availability.
Significantly replacing diesel with CBM would improve Chignik Lake’s air quality, reduce its
carbon footprint and address safety concerns with the transportation, delivery and transfer of
65,000 gallons of diesel fuel which occurs 5000 gallons at a time 13 trips a year.
Chignik Lagoon and Chignik use similar amounts of diesel fuel annually. If CBM gas is found
and it is viable to deliver CBM to Chignik Lagoon and Chignik, then another 115,000 gallons of
diesel will be displaced. AGE will determine the viability of delivering CBM gas Chignik Lagoon
and Chignik as a means of reducing their dependency on diesel fuel. The results of this analysis
will be contained in the final assessment report.
The State of Alaska currently subsidizes rural power costs. Reducing rural Alaska’s dependency
on diesel fuel and reducing the need for State subsidies benefits all Alaska.
The Chignik Lake annual fuel displacement savings for power generation is estimated at
$240,000 with an additional annual fuel displacement savings of roughly $480,000 for both
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Chignik Lagoon and Chignik. This equates to $720,000 annually or $18,000,000 over the project
25 year life of the project. This assumes that all capital costs are funded through grants or State
appropriations and that there is no capital debt repayment.
Providing for the long term economic viability and maintaining the cultural integrity of these
communities is the ultimate benefit of this project.
SECTION 6 – GRANT BUDGET
Tell us how much your total project costs. Include any investments to date and funding sources,
how much is requested in grant funds, and additional investments you will make as an
applicant.
Include an estimate of budget costs by tasks using the form - GrantBudget.xls
AEA grant funds will be the source of these project phases. Possible funding sources
for construction will be identified as part of the assessment process. See Tab 7C for the
Grant Budget.
SECTION 7 – 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
B. Cost Worksheet per application form Section 4.4.4
C. Grant Budget Form per application form Section 6.
D. An electronic version of the entire application per RFA Section 1.6
E. Governing Body Resolution per RFA Section 1.4
Enclose a copy of the resolution or other formal action taken by the applicant’s
governing body or management that:
- authorizes this application for project funding at the match amounts indicated in
the application
- authorizes the individual named as point of contact to represent the applicant for
purposes of this application
- states the applicant is in compliance with all federal state, and local, laws
including existing credit and federal tax obligations.
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 14 of 14 9/3/2008
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 Robert Gross
Signature
Title Vice President, Operations
Alaska Green Energy
Date 11/10/2008