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HomeMy WebLinkAboutDelta Greely School District Wood Chip Boiler Heating System Project App�, ALASKA Renewable Energy Fund 411111IL2 ENERGY AUTHORITY Grant Application 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 GrantApp.doc Application form in MS Word that includes an outline of Form 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 Costworksheet.doc Summary of Cost information that should be addressed Worksheet by applicants in preparing their application. Grant Budget GrantBudget.xls A detailed grant budget that includes a breakdown of Form costs by task and a summary of funds available and requested to complete the work for which funds are being requested. Grant Budget GrantBudgetlnstr.pdf Instructions for completing the above grant budget form. Form Instructions • 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. AEA 09-004 Grant Application Page 1 of 22 9/2/2008 GEL ALASKA 4111t- ) ENERGY AUTHORITY Renewable Energy Fund Grant Application SECTION 1 — APPLICANT INFORMATION Name (Name of utility, IPP, or government entity submitting proposal) Delta/Greely School District Type of Entity: Public School District/R.E.A.A. #15 Mailing Address Physical Address P.O. Box 527 1664 North Clearwater Avenue Telephone Fax Email 907 895-4657 907 895-4781 ford d sd.k12.ak.us 1.1 APPLICANT POINT OF CONTACT Name Title PJ Ford Slack, Ph.D. Superintendent Mailing Address P.O. Box 527, Delta Junction, AK 99737 Telephone Fax Email 907 895-4657 907 895-4781 ford d sd.k12.ak.us 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, or X A local government, or school district 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.) AEA 09-004 Grant Application Page 2 of 22 9/3/2008 /4401vv") ALASM 4011--) ENERGY AUTHORITY Renewable Energy Fund vrant Application 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. The Delta/Greely School District is proposing to overhaul their heating system (that is past its life cycle) with a Wood Chip Boiler Heating System. This Wood Chip Boiler Seating system is designed to meet the energy and heating needs of the Delta High School complex (complex houses a pre-school program, Cyber School, Alternative High School, Advanced Construction Trades Program, Delta Comprehensive High School, and serves as a primary community emergency muster site. The system design will replace 90% of current fuel oil consumption. This project is designed in four phases: Phase 1 Reconnaissance Phase 2 Resource Assessment/Feasibility/Conceptual Design Phase 3 Final Design and Permitting Phase 4 Construction The Wood Chip Boiler Heating System will have a Project Manager whose oversight will include communication with the M & O director, construction oversight and all items relating to Phase 3 and Phase 4. Under our Delta/Greely School Board Policy we may not sole source this position but instead advertise for the best applicant. However, due to the specialized technical skills required for a Wood Chip Boiler System we have contacted and begun a conversation with two agencies. Both are experts in this type of project. Both have been to our school site and are familiar with the needs of our district. The Project Manager will report to the Delta/Greely School District Director of Maintenance and Operations, Mr. Kent Scifres. 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 Delta/Greely School District proposes a Wood Chip Boiler Heating System to heat 77,000 sq. ft. of educational space in the sub -arctic. The legal description of the Delta High School complex is 64 degrees 02' 35.66" N 145 degrees 42' 57.10"W. The building would be located 50 feet away from the Delta High School new mechanical room. This Wood Chip Boiler Heating System constructs and installs the following: Cement building to house wood chip boiler, chip storage room, 4 chip storage trailers, and a chip feeding and chip drying process. The direct impact of this Wood Chip Boiler Heating System will be the Delta High School complex staff and students as well as the community groups that use this facility on a weekly basis. The following communities are served by this facility: Delta Junction, Fort Greely Garrison and its contractors, Gerstle River, and the greater Deltana area. The businesses, non- profit agencies, Farm Forum, Relay for Life, Fish and Game, Department of Motor Vehicles, Delta Chamber of Commerce, Boy Scouts and Girl Scouts to name a few groups. All use the Delta High School complex during the year. Finally, the following groups will be involved in this project: Delta/Greely School District (DGSD), the Delta/Greely School Board, DGSD Facilities Committee, Alaska Department of Natural Resources Forestry, CTA, CE2 Engineers, T.R. Miles Technical Consultants, Delta Logging and Milling Associates, and AEA 09-004 Grant Application Page 3 of 22 9/3/2008 /440wIL)) ALASHKA Renewable Energy Fund Grant Application 2.2Project Description continued USKH (an architecture, engineering, land surveying and planning company). SEE ATTACHMENT 2.2 PROJECT DESCRIPTION MAP 2.3PROJECT 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. The Delta/Greely School District is requesting $2,868.168 dollars to complete Phases 2, 3, and 4 of the proposed Wood Chip Boiler Heating Project. This money will cover the following items that are outlined on the Estimated Project Cost Summary Attachment: Biomass boiler system, biomass boiler building, biomass project plumbing and piping costs, mechanical integration, soft costs, chip vans for storage, Project Manager, and part of a Technology Technician in order to maintain and monitor a paperless/web based communication system. The DGSD will hire two maintenance people to be the point people on maintaining and operating the Wood Chip Boiler System. DGSD will also provide in -kind services from its partner, the Partners for Progress in Delta, a group that trains plumbers, pipe -fitters, welders, carpenters at both the high school level and the adult level. SEE ATTACHMENT 2.3 ESTIMATED PROJECT COST SUMMARY 2.3 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. The main benefit would be the reduction in fuel cost to the school district. Based on the current economic spreadsheet, assuming the entire project is funded, the school is estimated to save around $135,000 in fuel oil cost the first year, and with conservative inflation rates, would save nearly $6,880,000 over 20 years. The other economic benefit would be that this money would go to local businesses and stay within the local economy. Further, school district instructional dollars would once again be able to used for instruction not heating costs. SEE ATTACHMENT 2.4 FUEL OIL/WOOD CHIPS COST COMPARISON 2.4 PROJECT COST AND BENEFIT SUMARY Include a summary of your project's total costs and benefits below. 2.5.1 Total Project Cost $2,868,000.00 (including estimates through construction. 2.5.2 Grant Funds Requested in this application. $2,868,000.00 2.5.3 Other Funds to be provided (Project match) $0 2.5.4 Total Grant Costs (sum of 2.5.2 and 2.5.3) $2,868,000.00 2.5.5 Estimated Benefit (Savings) Current savings are approximately $135,000 in SEE ATTACHMENT 2.5 ESTIMATED PROJECT COST the first year and over SUMMARY $6,880,000 for 20 years. AEA 09-004 Grant Application Page 4 of 22 9/3/2008 /4401vV) ALASM Renewable Energy Fund vrant AMication Proiect Cost and Benefit Summary continued i I Currently savings are 2.5.6 Public Benefit (If you can calculate the benefit in terms of approximately $135,000 in dollars please provide that number here and explain how the first year and over you calculated that number in your application.) $6,880,000 for 20 years. All savings realized would SEE ATTACHMENT 2.5 ESTIMATED PROJECT COST be passed on to SUMMARY education benefits including curriculum, vocational education programs, student activities, and salaries and benefits for teachers and staff. 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. The Delta/Greely School District will be contracting for a professional engineering firm. Solicitation for this firm will follow Delta/Greely School District Policy as stated in Delta/Greely School District Board Policy 7420. The Delta/Greely School District will request Alaska Energy Authority's assistance in oversight of this project, specifically someone with wood heating experience. This project will be managed by the following entities: Superintendent of Delta/Greely School District, Delta/Greely School District Facilities Committee (this committee is made up of teachers, administrators, board members and community members who are vetted by the Delta Greely School Board) — chaired by the Head of M and O, and a Project Manager to be named. The RFP (Request For Proposal) process will be used for award of the construction contract. SEE ATTACHMENT 3.1 DGSD BIDDING PROCESS 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. Phase 1 Reconnaissance - FEASIBILITY ASSESSMENT FOR WOOD HEATING — T.R. MILES Technical Consultants, Inc. Phase 2 Resource Assessment/Feasibility Analysis/Conceptual Design. Phase 3 Final Design and Permitting Phase 4 Construction SEE ATTACHMENT 3 — FEASIBILITYASSESSMENT FOR WOOD HEATING SEE ATTACHMENT 3.2 PROJECT SCHEDULE GANNT CHART AEA 09-004 Grant Application Page 5 of 22 9/3/2008 /4401LE)) ALASKA ONE) ENERGY AUTHORITY Renewable Energy Fund Grant Application 3.3 Project Milestones Define key tasks and decision points in your project and a schedule for achieving them. Phase 1 Reconnaissance — FEASIBILITY ASSESSMENT FOR WOOD HEATING — T.R. MILES Technical Consultants, Inc completed this study in 2004. Mr. Miles has a firm grasp on the needs of the Delta/Greely School District and has maintained contact with the district regarding the status of this conversion. Recently Mr. Miles met with the Superintendent to review his report and propose where the district should head in light of the current fuel costs. Phase 2 Resource Assessment/Feasibility Analysis/35% plan set complete. Existing data will be collected. A geotechnical investigation will be conducted on the side of the proposed bulk wood heat boiler / wood chip storage building by bringing a truck mounted geotechnical drill rig down from Fairbanks and drilling at least two holes on the proposed location of the building. The engineer will gather sample chipped wood fuel from local forests and sawmills to examine for moisture, handling, and combustion characteristics. A fuel handling system will be developed that will be suitable for the boiler system. This will be done in collaboration with the local State Forester and potential wood chip suppliers. The size of the wood -fired boiler will be done to match to the high school's heating system. Then a plan view and elevations will be developed of the building that will house the boiler, fuel handling equipment, and chip storage. The 35% plan set will be developed and the feasibility report will be completed and submitted to the Delta/Greely School District, AEA and other parties for review and comment. Phase 3 Final Design and Permitting After review and comment, the 35% plan will be developed to 95%, which will include all civil, structural, electrical, process piping, mechanical, and electrical sheets. The 95% plan set will be submitted to the Delta/Greely School District Board and Facilities Committee, AEA and other parties for review and comment. After review and revision, the plan set is submitted to the State Fire Marshal for review, comment, and approval. Any revisions are made at this time and the plan set is developed to 100%. School board approval is obtained for the plan set and the project approved for bid. Phase 4 Construction A Request for Bid is issued, and a bid award is made. Construction begins in summer 2010 and is completed by fall of 2010. A contract to supply wood chips is developed. The wood heating system is commissioned and started up. Final inspection is performed and a punch list is created and corrected. Training of the School District Staff is performed for operation and maintenance of the new system. An O&M Manual is completed. Close out of the AEA grant is performed. Substantial Completion Check List and letter is received fall of 2010 to complete the grant. As with all projects it is important to keep the basics in mind: Planning, design, bidding, construction and occupancy (operation/maintenance). This process is repeated until a facility is into demolition or adaptive reuse. SEE ATTACHMENT 3— FEASIBILITYASSESSMENT FOR WOOD HEATING AEA 09-004 Grant Application Page 6 of 22 9/3/2008 /44'W`:) ALASM Renewable Energy Fund Grant Application 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. Personnel Wood Chip Boiler Project Manager ( to be hired following district policy) PJ Ford Slack, Ph.D. - Delta/Greely School District Superintendent Kent Scifres - Director of Maintenance and Operations Gary Hall Construction Teacher Career Advancement Center Maintenance Personnel to oversee Wood Chip Boiler Heating System Students of Delta/Greely School District Construction Trades Program Delta/Greely School Board Delta Partners for Progress in Delta, Inc. — is made of the following members: UAF Tanana Valley Campus, UAF Cooperative Extension Service, Delta Mine Training Center, Alaska Works Partnership, and Delta/Greely School District Contractors Purchasing regulations will dictate this list of contractors as stated in Delta/Greely School Board Policy 7420. Concrete Company— local Mechanical contractor Electrical contractor Equipment companies General Labor Specialized firm for Wood Heat Engineers Construction Manager Project Manager Consultant on Resources: Division of Forestry JDO Law Firm for contract review USKH for the Weatherization Project SEE ATTACHMENT 3.1 DGSD BIDDING PROCESS Equipment Purchasing regulations will dictate these companies as stated in Delta/Greely School Board Policy 7420. SEE ATTACHMENT 3.1 DGSD BIDDING PROCESS Government/Aiencies City of Delta Junction Fort Greely Garrison UAF/Cold Climate Housing Research Center Dent. of Environmental Conservation AEA 09-004 Grant Application Page 7 of 22 9/3/2008 /4wEk_D) ALASAUTORITY 4INED ENERGYHKA Renewable Energy Fund Grant Application 3.4 Project Resources continued State Dept. of Public Safety/Fire Marshall Alaska Division of Forestry Services Firm or firms for Wood Chip Delivery Technical Providers for Wood Chip Heating System Extra Maintenance Personnel The majority of Delta Junction's community service providers will be utilized throughout the completion of this project. Wrigley's Farm ( Barley Production) Bid Process listed — Delta/Greely Policy Manual - Board Policy 7420 SEE ATTACHMENT 3.1 DGSD BIDDING PROCESS Delta/Greely School District Personnel Resumes SEE ATTACHMENT 3.4 PJ FORD SLACK, Ph. D. VITAE SEE ATTACHMENT 3.4.1 KENT SCIFRES RESUME SEE ATTACHMENT 3.4.3 GAR HALL RESUME Facilities Committee Members Resumes SEE ATTACHMENT 3.4.2 FACILITIES COMMITTEE MEMBERS 3.5 Project Communications Discuss how you plan to monitor the project and keep the Authority informed of the status. The Delta/Greely School District is applying for a Wood Chip Boiler Heating System not only because of bio-fuel costs but also to continue to teach our students and community how to "green" our operations in education. To that end, we will make every attempt to communicate with respecting the Earth's resources in mind. Our Technology Coordinator will help keep the communication for this project open to the public and in the 21St century. Two web portals will be established. For the project principals, daily communication will be done through a DGSD web -portal for this project. This portal will require the principals of the project (Superintendent, Director of Maintenance, Business Manager, Board Member, Project Manager, Construction Contractor, Design Contractor, and others during Phase 3 and Phase 4 to communicate. This web portal allows the latest drawings, meeting notes, key communications, and specifications, as well as other project information to be available to key team members 24/7 as well as allowing for AEA to monitor project status. We will also set up a general public website to allow the community and students to stay abreast of the project. As part of this project email archiving and recording will be planned for. All principals listed below will be able to check project status and meeting notes through the web - portal. The project secretary will also help facilitate both electronic and paper communication. Daily — Director of Maintenance (Mr. Scifres) and Wood Chip Boiler Heating System Project Manager Weekly — Superintendent Ford Slack AEA 09-004 Grant Application Page 8 of 22 9/3/2008 /adow')ENERGYALASHKA Renewable Energy Fund Grant Application 3.5 Project Communications continued Bi-monthly — Delta Greely School board Monthly — DGSD Facilities Committee, Delta Junction City Council Quarterly — AEA (electronically or written report as the Grantor desires/requires) AEA — site visit 3 times during the life of the Wood Chip Boiler Heating System Project 3.6 Project Risk Discuss potential problems and how you would address them. 1) Timing of bids. Risk — Contractor availability is limited in the Interior of Alaska. Solve — Bid process to begin Feb. 2009 2) Inflation Costs Risk - With current inflation rates, materials and shipping costs are rising exponentially in Alaska. Solve — Early engineering of the project will help to contain the cost of shipping and purchasing materials. 3) Logistics Risk — Missing the bidding season of contractors and materials Solve — To go out for bid pre -construction season. Will have a lot more to do with Grantor AEA, this depends on grant awarding process and Alaska Legislative funding. 4) Construction Lead Time Risk — Specialty system with limited contractors, limited contractors to fill needs in Alaskan interior. Solve - To avoid missing the bidding season it is essential to receive this award in a timely manner. 5) Markets are dynamic and unstable Risk — Ordering of materials or equipment (wood chip boiler) needs as much lead time as possible. Solve - To avoid a long delay and cost overruns a timely awarding of this grant will assist in controlling costs. 6) Possible larger contingency costs with inflation then currently calculated. Solve — This one is very difficult to predict with rising inflation and shipping costs. 7) Wood Chip Fuel Risk — Size of chip and quality can cause maintenance issues. Solve - We will write a tight contract with our contractor for chip size and quality to be delivered. Supply of consistently high grade chips in the Delta/Greely area is not an issue. 8) Project Manager Risk — We need a high quality person with Alaska and Wood Heat experience. Solve - We have been in conversation with two nationally recognized biomass consulting firms who will assist with finding a qualified project manager. 9) Weather Risk - this is Alaska and the Interior building season could be two days or two months. Solve - Assure that construction contractor has successful experience building and completing projects in subzero temperatures. We will also utilize the skills of our high school construction trades students. 10) Overruns Risk — Build shell and work inside during winter months. Solve - Need experienced construction contractor who has success completing projects in subzero temperatures. 11) Wood chip size Risk — needs to be correct size for chipper. Solve - Write a tight contract with wood chip source to maintain accurate size. AEA 09-004 Grant Application Page 9 of 22 9/3/2008 A L A S K A /401 DENERGYAUTHORITY Renewable Energy Fund Grant Application 3.6 Project Risk continued 12) Only having one fuel source Risk — We currently have one reliable wood chip delivery source. Solve - The Forestry and DGSD have actively encouraged other local businesses to consider wood chips as an industry. There is a possibility that barley could be supplied as a fuel source by a local farmer. 13) Insurance Risk - If a school cannot get insurance, it would be difficult to use this method of heating. Solve - On June 5, 2008, APEI responded that the Bio Mass System is acceptable as long as adequate engineer, fireproofing and alarm systems were in place. 14). Purchase of Wood Chip Boiler Risk — Supply depends on availability of chips to boiler systems in place in 2009 and 2010. Solve - The earlier we are awarded the grant the earlier we can go to bid on the boiler. 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. 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. FOREST LAND BASE The Delta Junction School District has several forest land ownerships in the vicinity that could potentially be used to supply wood for the proposed wood boiler. The land base in the Delta Management Area is categorized by ownership as follows: ACRES 463,000 Tanana Valley State Forest Lands 1,237,000 Other Forested State Lands 948,000 Other Non -Forested State Lands 650,000 Military Lands 469,000 BLM Lands 230,000 Native Corporation Lands 130,000 All Private Lands (includes farms, residential lots, homesteads, native allotments, etc.) 4,127,000 TOTAL LAND BASE AEA 09-004 Grant Application Page 10 of 22 9/3/2008 ALASKA ) ENERGY AUTHORITY Renewable Energy Fund Grant Application 4.1 Proposed Energy Resource continued The biggest supplier of timber to the local area is the State's Forestry Office in Delta Junction. The State of Alaska, develops timber sales on state lands managed by the Delta Area Office providing wood for the local sawmills, export markets, firewood, house logs, and private timber sales. The other land owners listed above have also made timber available. Private lands could be a significant supplier of wood energy for the school when land is cleared to develop homes, businesses and farms. Forests cleared for developments on private land has historically been windrowed and burned or hauled to an approved burning site. The close proximity of the private lands that surround the school would seem to make it the most feasible energy source. The Delta High School Complex estimated energy need is 1,400 to 2,100 tons of wood chips per year. This roughly equates to 50 to 75 acres of low grade commercial quality forest. This is a very low quantity in comparison to the potential available. At least twice this amount of forest is presently being cleared on private lands in the Delta Area in the last 12 months. Even if the schools needs were 2-3 times more than projected there is more available. The State of Alaska's timber sale program and it's estimated sustained yield harvest is summarized in the "Delta Area Forestry Five -Year Schedule of Timber Sales, Fiscal Years 2008 to 2012" (FYSTS). The report states, "the Delta Area can be expected to support a sustained yield of 4,873,600 cubic feet of white spruce and 5,412,700 cubic feet of hardwoods on roughly 5,092 acres per year". There has been an average harvest of 167 acres of commercial timber in the last 5 years from state lands in the Delta Area. There is an exceeding surplus of wood available to meet the energy needs of the public school even if the amount was tripled. SAWMILL RESIDUE There are presently three (3) small commercial sawmills operating in the Delta Area as a primary business. Logging and Milling Associates (LMA) is presently harvesting more timber annually than its competitors, Granite Mountain Alaska Lumber (GMAL), and Delta Lumber (DL). Sawmill residue may also be available from Fairbanks, Glenallen and Tok, but it was not considered for this report. Each of the local sawmills has logging and sawmill residue in the form of log tops, edgings, sawdust and planner shavings. None of these residue types make high quality chips but they could be made into fuel. The total available amount of the residue is roughly estimated to be about 2,000 tons per year not including limbs. Approximately a third of this residue is sold as firewood. About 10% is being used in a boiler system at LMA, and the remainder is burned or discarded. Two pellet mills are under construction in Delta and it is predicted that a third to 100% of the residue could be made into wood pellets for home heating. The log tops and edgings comprise over 60% of the residue. Both of these could easily be made into chips but they would have bark on them. The best thing about this fuel source is its ability to be air dried before being chipped, improving its heating value. EXISTING AND FUTURE TIMBER SALES The timber sale logging contractors have been supplied with multiple timber sales that exceed near term requirements of the local sawmills. Portions of these timber sales could be used for the school during the next 2-3 years. Additional timber sales are planned in the state's FYSTS. There is presently at least another 1,000 acres of timber sales in various stages of completion and review to be auctioned in the future. Sales are being planned that could be used specifically AEA 09-004 Grant Application Page 11 of 22 9/3/2008 ALASKA G.. _; ENERGY AUTHORITY Renewable Energy Fund Grant Application 4.1 Proposed Energy Resource continued for the school. As long as the state continues to fund the timber staff there will be an ongoing supply to accommodate the potential market. SEE ATTACHMENT 4.1.1 DELTA 5 FYSTS 08-12 MAPS SEE ATTACHMENT 4.1.2 PUBLIC REVIEW OF DELTA 5YR SCHEDULE SPREADSHEET SEE ATTACHMENT 4.1.3 PUBLIC REVIEW OF DELTA 5YR SCHEDULE NARRATIVE SEE ATTACHMENT 4.1.4 LOGGING & MILLING ASSOCIATES LETTER 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 Delta/Greely High School was constructed in ten stages from 1960 through 1986. A separate heating and ventilation system was provided for each stage of construction. With minor exceptions, the existing equipment dates back to original construction. The systems have been well maintained over the years as evidenced by the fact that they are still operational after at a minimum 20 years and in the most extreme case as long as 50 years. Attached at the end of this narrative is a plan of the entire school showing the mechanical spaces and the areas of the school served by each of these mechanical spaces. The dates used in the labeling of the various additions refer to the date used on the construction drawings for each of the additions rather than the actual date of construction. Existing control systems are, for the most part, pneumatic. 1960 Original Classroom Building 1963 Classroom and Multipurpose Room Addition 1966 and 1969 Classroom Additions 1974 Gymnasium Addition 1975 Metal Shop and Wood Shop Addition 1977 Home Economics Addition 1980 Classroom Addition 1980 Art Room Addition 1981 Vocational Education Building 1986 Classroom Addition SEE ATTACHMENT 4.2 DELTA HS MECHANICAL IMPROVEMENT RECOMMENDATIONS AEA 09-004 Grant Application Page 12 of 22 9/3/2008 41L41L> ALASKA �.)ENERGY AUTHORITY Renewable Energy Fund Grant Application 4.2.2 Existing Energy Resources Used Briefly discuss your understanding of the existing energy resources. Include a brief discussion of any impact the project may have on existing energy infrastructure and resources. The energy currently used by the Delta High School complex is approximately 58,343.7 gallons of heating fuel per year. The fuel usage for the Delta High School complex would be reduced by converting to wood as a fuel. The reduction in the sale of heating fuel would be minor for the local fuel oil distributor. There would be a slight increase in the per gallon cost associated with the reduced amount of fuel oil purchased by the Delta/Greely School District. 4.2.3 Existing Energy Market Discuss existing energy use and its market. Discuss impacts your project may have on energy customers. The Delta/Greely School District does not plan to be an energy supplier. The energy currently used by the Delta High School complex is approximately 58,343.7 gallons of heating fuel per year. The local fuel distributors have been the recipients of the heating fuel contract. It is anticipated that there will be a significant reduction in the demand for heating fuel from the local distributors. We expect the market for wood chips to increase. Market demand for wood chips may offer additional jobs and opportunities for businesses in the community. 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 A description of renewable energy technology specific to project location: Delta High School will use a biomass boiler to help heat the school. Wood chips will be made from timber harvesting in the region and burned in the boiler to heat water which will circulate through the school to heat the school. Optimum installed capacity: The optimum boiler size is approximately 50% of the connected load of the school. Typical load profiles for schools show that approximately 90% of the boiler run hours occur at 50% of the peak load or less. Sizing the boiler at this smaller size allows the boiler to operate in the medium and high fire range more often which optimized efficiency and reduces emissions. During the design process, a energy model of the facility will be developed to determine the final optimum boiler size. Anticipated capacity factor: The anticipated capacity factor is 0.25 to 0.30. Unlike a power plant with a consistent base load, a biomass boiler is used to heat a building, which has a variable load. The amount of heat generated is directly proportional to outside air temperature. This capacity factor is actually two to three times better than the existing connected heating equipment. AEA 09-004 Grant Application Page 13 of 22 9/3/2008 49r-, ALASKA Renewable Energy Fund Grant Application 4.3.1 System Design continued • Anticipated annual generation: The biomass boiler is estimated at 8,700,000,000 Btu per year, which is approximately 800 green tons of chips. • Anticipated barriers: Some anticipated barriers would be: 1. The distance of this site from the boiler system manufacturers. During construction, this creates a longer lead time for the boiler to be manufactured and shipped to Delta Junction. The construction schedule will be closely monitored to make sure this does not cause any project delays. 2. Access to wood fuel in winter. This will be addressed further in design. The request for proposal process used to select a wood fuel vendor would also address this. • Basic integration concept: The biomass boiler building would be constructed near where a future consolidated boiler room will be located. The biomass boiler would simply be one boiler in the new boiler system. A primary — secondary pumping system would be utilized to allow the biomass boiler to be the primary boiler and allow the fuel oil boilers to operate to supplement the biomass boiler in peak heating conditions and/or at other times when the biomass boiler is not functioning. • Delivery methods: The biomass boiler building would be constructed similar to any school capital project. The building and systems would be designed by licensed professionals who will generate construction documents to be bid out to contractors. The successful contractor would then mobilize and construct the building. 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 Delta High School Complex sits on land currently held by the Alaska Division of Natural Resources. Mr. Robert Layne, DNR, has worked tirelessly over the past 25 years to secure title for all the property for the district. We are currently in the final stages of securing final title to all land. SEE ATTACHMENT 4.3.2 LAND OWNERSHIP - DNR 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 All applicable permits will be acquired through design and construction. Currently the only local permit that we are aware of is to show the construction design to the City of Delta. This permit has no cost attached and is only to afford the City time to review a project that will be built in a floodplain area. A Plan Review and Approval to Construct Certificate is required from the Alaska State Fire Marshall. An air quality permit is not required from the Alaska Department of Environmental Conservation at this time. 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 AEA 09-004 Grant Application Page 14 of 22 9/3/2008 ' _) ALASKA M_)ENERGY AUTHORITY Renewable Energy Fund Grant Application 4.3.4 Environmental continued • Archaeological and historical resources • Land development constraints • Telecommunications interference • Aviation considerations • Visual, aesthetics impacts • Identify and discuss other potential barriers • Threatened or Endangered species — Does not apply • Habitat issues — Does not apply • Wetlands and other protected areas — Does not apply • Archaeological and historical resources — addressed during construction • Land development constraints — Does not apply • Telecommunications interference — The Wood Heat building will not be higher than that of the existing school. The only telecommunications antennas nearby are on the Alascom tower, which is high enough and far enough away from the school to not be affected. • Aviation considerations — less emissions to affect the local aviation concerns • Visual, aesthetics impacts — Does not apply • Identify and discuss other potential barriers — None 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 • Total anticipated project cost, and cost for this phase - $2,988,168.00 ($120,000.00 is Delta/Greely School District cost for 2 Maintenance people attached to the Wood Heat Boiler System). SEE ATTACHMENT 4.4.1 ESTIMATE OF PROBABLE COST OF DESIGNAND CONSTRUCTION • Requested grant funding - $2,868,168.00 • Applicant matching funds — loans, capital contributions, in -kind Delta/Greely School District will provide $120,000.00 for Maintenance personnel to maintain the Wood Heat Boiler System. Partners for Progress in Delta and Delta Construction Trades Program will lend assistance during the construction phases of this project. • Identification of other funding sources N/A • Projected capital cost of proposed renewable energy system $2,556,168.00 • Projected development cost of proposed renewable energy system $189,296.00 AEA 09-004 Grant Application Page 15 of 22 9/3/2008 /441ELD ALASM Renewable Energy Fund Grant Application 4.4.1 Project Development Cost continued 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. Consultant & Manufacturer's estimates: Decton, Kob, Messersmith, BCT, Means, including 30% increase for rural Alaska. 10% escalation. SEE ATTACHMENT 4.4.1 ESTIMATE OF PROBABLE COST OF DESIGN AND CONSTR UCTION 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 • Total anticipated project cost for this phase — Over a 5 year period, the Bio Mass System operating costs are $565,080.00 plus an estimated $600,000.00 in extra personnel �--- salaries and benefits to maintain the system. • Requested grant funding - $2,868,168.00 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 Not Applicable 4.4.4 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. See Cost Worksheet at the end of the grant. 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. This is a facility that will fall under the annual Delta/Greely school facilities maintenance. 4.4.6 Analysis and Recommendations Provide information about the economic analysis and the proposed project. Discuss your recommendation for additional project development work. The project was evaluated using a 30-year cash flow analysis. A basic benefit to cost (B/C) ratio was calculated as well as accumulated cash flow. The B/C ratio is the cumulative cash flow divided by the initial cost. Accumulated cash flow is similar to simple payback with the exception that accumulated cash flow takes the cost of financing and fuel escalation into account. AEA 09-004 Grant Application Page 16 of 22 9/3/2008 /44'EV)) ALASM Renewable Energy Fund Grant Application 4.4.6 Analysis and Recommendations continued For many building owners, a positive accumulated cash flow of about 10 years maximum is considered necessary for implementation. Positive accumulated cash flow in year one indicates a strong project. Positive accumulated cash flow in year 20 or more indicates a challenged project. The existing conditions section of the analysis is based on data collected at the school. The cost of wood chips ($80/ton) is based on a local lumber mill quote. The biomass boiler efficiency was assumed to be 65%. Wood fired boilers efficiencies can reach 70% to 75%, so 65% is conservative. The wood chips were assumed to be at approximately 35% moisture content, yielding 5400 Btu/lb. Power is very expensive in Alaska compared to the continental US. Because of this the cost of the additional electricity used by the new boiler plant was accounted for in the analysis. The power use is based on historical data from a wood fired school boiler plant in Darby, Montana. The O&M inflation rate was assumed to be 5%. The fuel cost escalation for petroleum based fuels was estimated at 8% annually. This is based on long term historical data and is conservative, as the annual inflation rate for fuel oil since 1990 is approximately 12%. Fuel cost escalation for wood based fuels was estimated at 6% annually. At low loads, the biomass plant will not be able to sufficiently turn down to operate efficiently. During these times, the fuel oil boilers will operate. Also at the building peak heating load, the biomass boiler will not be large enough, so the fuel oil boilers will operate to supplement the heating system. Because of these two reasons, it is assumed the biomass system will supplant 90% of the facilities fuel oil use. Based on discussions with other biomass system users, system manufacturers, and estimates of operator time required, additional operation and maintenance time on average of 4 hours per week were assumed. The cost of this over a 40 week operation period at $20/hour was used for the analysis. In addition, experience has shown that the first two heating seasons have extra maintenance time as the system "bugs" are worked out and the maintenance staff learns the system. The analysis includes an additional 4 hours per week for the first two years to account for this. Economics based on the estimated project costs and the assumptions listed above were assembled and is shown on the attached summary. With the project fully funded, the economic analysis shows a positive cash flow in the first year of approximately $135,000 and positive accumulated cash flow (PAC) of $2,077,400 in year 10, $6,877,800 in year 20; and $17,777,900 in year 30. This indicates a strong project. The simple payback is 21 years. The B/C ratios are 1.39 at year 15; 2.39 at year 20; and 6.19 at year 30. Since the project is expected to have a 30 year life, a B/C ratio greater than 1.0 in year 15 indicates a strong project. AEA 09-004 Grant Application Page 17 of 22 9/3/2008 �� ALASHKA ENERGY Renewable Energy Fund vrant Application 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 The health benefits of this project relate to cleaner breathable air both inside and outside the school building. Our current set of boilers and furnaces are neither efficient nor clean emission producing. This Wood Chip Boiler System will emit fewer particles in the air. Vocational skills acquired: Delta High School has an exemplary Construction Trades Program. Every year a number of our students are accepted into apprenticeships. This project offers the high school and adult students an opportunity to practice and work with professionals during Phase 3 and Phase 4. Academic Skills acquisition: Students at Delta High School, New Horizons High School, Delta Cyber School, and Ft Greely Middle School have an opportunity to determine and report to the board on the energy savings of this project. Cold Climate Housing Research Center has discussed adding sensors to various locations in the building to collect data. Because this project touches so many parts of living in Delta/Greely we also hope other businesses in the area see this as a demonstration project and come to us for advice and guidance. It is a great lesson in citizenship and giving back to our community. SEE ATTACHMENT S FUEL OIL/WOOD CHIPS COST COMPARISON 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 This is a grant request by a public school district. Our district is categorized by the State of Alaska as an REAA (Regional Educational Attendance Agency) REAA # 15, Delta/Greely School District. We serve 869 students locally and an additional 300 students statewide, through Delta Cyber School. Our district has no tax base to draw on and cannot bond for Capital Improvement projects. Delta/Greely School District is requesting $2,556,166.00 dollars to cover the design and construction phases of this project. There will be additional costs borne by the district in the form of at least two extra maintenance personnel to maintain the Wood Chip Boiler Heating System, during the months of school operation, 7 days a week and 24 hours a day. These costs, at today's negotiated agreement represent a commitment of $120,000.00 in salary and benefits per year. AEA 09-004 Grant Application Page 18 of 22 9/3/2008 ALASKA /GIVL_ ENERGY AUTHORITY Renewable Energy Fund Grant Application SECTION 6 — GRANT BUDGET The school district has been researching this option since 2003. The Reconnaissance Phase was completed in 2004 by T.R. Miles Inc. The conversation has continued over the years, as fuel prices have risen to almost unsustainable levels. Our largest issue is our old heating system which consists of 8 separate boiler and furnace systems, all past their life. We currently have a Capital Improvement Plan into the Department of Education and Early Development to consolidate our boiler and furnace system and relocate them to one mechanical room in the high school complex. The cost of that project is approximately 10 million dollars. That project, if funded, will provide additional support to this project for piping and plumbing needs. We have located the new mechanical room to support the Wood Chip Boiler System. With advice from numerous mechanical engineers and also with USKH, an architectural firm, we believe we have located the wood chip boiler to maximize efficiency, as well as providing a location where wood chip trucks will not disrupt the current traffic pattern within Delta City Limits. We consider the use of our students (both high school and adult) to assist with the design and construction of the building to house the wood chip boiler as an investment. The Construction Trade Program assisted in designing their Career Advancement Center, which houses their program. Under the leadership and expertise of Mr. Gary Hall, many of these students have been accepted to apprenticeship programs with Alaska unions. This Center is located across the street from the proposed Wood Chip Boiler Heating System. The students will also learn about the plumbing and maintenance of this system. That is an investment to the community and the region at large. Our summer program students come from Glenallen, Tok, North Pole, and Salcha so we see this as an investment to the interior region. Delta Greely School District is also committed to sending key personnel and facility committee members to Darby, MT. and Craig, Alaska, bio mass heating sites, and any other sites that are recommended. We are also committed, as mentioned above to provide positions to maintain this system during the year. That commitment may cause the district to fall out of the required expenditures called 70/30. We have the right to ask for a waiver from that Alaska regulation. I am sure that this will be granted given that the district has designed a demonstration project that may be used by other schools in the sub -arctic region. We will also continue working with the UAF Cold Climate Housing Research Center in order to provide opportunities to collect data on the efficiency of the system. This will provide our students an opportunity for hands-on work with a bio mass heating system. This work will assist them in making smarter choices in their future lives. See Grant Budget worksheet at the end of the grant. AEA 09-004 Grant Application Page 19 of 22 9/3/2008 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. F. CERTIFICATION F- 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 PJ Ford Slack, Ph.D. Signature L Title Superintendent Delta/Greely School District Date A AEA 09-004 Grant Application Page 19 of 21 9/3/2008 ALASKA Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 21 of 22 9/3/2008 AEA 09-004 Grant Application Page 22 of 22 9/2/2008