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Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 1 of 25 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 25 9/3/2008
SECTION 1 – APPLICANT INFORMATION
Name (Name of utility, IPP, or government entity submitting proposal)
Banner Wind, LLC
Type of Entity:
Private LLC (Independent Power Producer)
Mailing Address
PO Box 1129, Nome AK, 99762
Physical Address
400 Bering Street
Telephone
907-443-2561
Fax
907-443-4038
Email
merickson@snc.org
1.1 APPLICANT POINT OF CONTACT
Name
Melinda Erickson
Title
Executive Assistant
Mailing Address
PO Box 1129
Nome, AK 99762
Telephone
907-443-4035
Fax
907-443-4038
Email
merickson@snc.org
1.2 APPLICANT MINIMUM REQUIREMENTS
Please check as appropriate. If you do not to meet the minimum applicant requirements, your
application will be rejected.
1.2.1 As an Applicant, we are: (put an X in the appropriate box)
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.
See Exhibit : FOLDER 2 A Banner Wind Project Executive Summary
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.
We are applying for the Phase 4 CONSTRUCTION of a Commercial Wind Project
as an Independent Power Producer. The other phases have been accomplished
through early 2008.
Phase 1 – Banner Wind LLC was fortunate enough to take advantage of the reconnaissance done by the
Nome Joint Utilities System and the Alaska Energy Authority. The City of Nome along with AEA were able
to provide the maps to classify wind class and alternative energy options, see Exhibit: Folder 2 K: Nome
Region Energy Assessment. Anemometers were installed in Nome as part of this initial work to assess
the resource. Without the actual anemometer data this project would not be at the construction phase it
is now in.
Phase 2 – Resource Assessment/Feasibility Analysis of the project was stated by Brian Jackson, as “This
project is completely feasible from a technical and financial standpoint as a true generation project to
contribute meaningful, reliable, renewable, electric energy to the Nome Joint Utility Distribution Grid.”
Furthermore this was outlined by the study done by City of Nome and AEA on the wind classes and
alternative energy options. Wind Power has been identified by AEA as the most beneficial option for the
community of Nome for power generation.
This project began in 2007, but could not be formally designed until more than a full year of quality data
was made available by the Alaska Energy Authority from local anemometers. Sandra Cardon from
Renaissance Engineering & Design (www.clever-ideas.com)(RED) performed an extensive analysis of
the existing anemometer data and the regional site locations. Evaluations began with the Snake River
Valley and then included Anvil mountain and Bonanza Peak but Banner was ultimately selected for
several reasons to be the absolute best possible location for development near Nome. An array design
was completed with the complex terrain and site location on Banner Ridge specifically which confirms the
detailed wind map designation from the AEA mapping project of high wind class on Banner Ridge and low
wind class in the Snake River valley. Renaissance was hired in 2007 to complete a Feasibility Study with
existing data at that time for a wind project in Nome which included Snake River and Anvil sites as
options. Based on the final actual wind data, the project was completely designed around the new
location after all of this initial scoping was done in 2007 and early 2008. Exhibits: FOLDER 2 C RED
Data Analysis Summary Memo, FOLDER 1 B RED Brochure, FOLDER 4 H RED Sandra Cardon Resume
The business planning, project development, and project design activities have been managed by
Western Community Energy, LLC (www.westerncommunityenergy.com) (WCE). All phases of the project
have been managed and are on track for completion in 2008, (see Management Section and Resumes)
In fact, this project was moved from its original intended location and completely re-designed several
times. Despite such changes, other than the direct expenses attributed to the change in location, and
upgraded facilities, this project is “On-Time and Under-Budget” in relation to the forcasted controlled
expenses. Exhibits: WCE Brochure, WCE Documents, WCE Brian Jackson, Mike Costanti, Ian Graham
Resumes.
Phase 3 – Final design and permitting – The most important thing to note on the design is that nothing
here is “revolutionary” or “experimental” The system is benefiting from the past ten years of turbine
installations and operations in Kotzebue, Alaska. The entire O&M program for the Entegrity Turbines has
been designed around the experiences there and in other locations to provide long term reliable
operations. The final foundation design was based on geotechnical evaluations and drilling at the site to
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Grant Application
AEA 09-004 Grant Application Page 4 of 25 9/3/2008
confirm the status of the bedrock. The geotechnical evaluation was performed by Rick Mitchells at Duane
Miller Associates (DMA) (www.alaskageo.com). Geotech Report and foundation designs by Troy Feller at
BBFM Engineers (BBFM) (www.bbfm.com) are included exhibit documents. The permitting evaluations
and applications have been completely taken care of by Laurie Hulse at Hattenburg, Dilley, and Linnell
(HDL) (www.hdlalaska.com).
Phase 4 – The Banner Wind Project is currently in the Construction, Commissioning, Operation,
and Report stage. Western Community Energy is managing all phases of the project including the
final effort to get it on-line before winter sets in. Construction of this project provides for the
complete installation of eighteen Entegrity EW-50 wind generators in Nome, Alaska. This is the
first commercial wind farm to be installed in the city of Nome which currently gets 100% of its
power from diesel generation. The construction phase began in September and will wrap up in
October, with final commissioning by November 2008. The project has focused intently on a 2008
complete start and finish timeline to immediately start saving diesel fuel. Nome is a rural
community with approximately 3,500 residents and is a hub community which supports many
villages in the region. As Nome is a hub for other village support, this project is intended to be a
hub for supporting renewable energy projects in the villages starting next year. STG Inc. is the
contractor responsible for the foundation construction, roads and turbine erection services. They
have the experience and expertise to help take this project to the finish line. The project manager
for STG is Brennan Walsh under the supervision of Jim St. George. (STG) (www.STGinc.cc). Web
page description and experience information is included in Exhibits: STG.
Each of the phases are part of the total project expenses and are included as matching funds. Expenses
for any individual contract in Phase 1-3 are included as part of the total project expenses. This includes
Feasibility, Geotech, Permitting, Project Design, and Development Payments. 1-3 phases.
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 installation of this wind power project will provide a maximum output of 1,170 kW to the Nome Joint
Utility electric grid in Nome, Alaska over a 20 year extendable project timeframe. The owners of the
project are committed to sell the energy at a price below the avoided cost calculations, even without any
grant funding. Grant funding will allow further reduction in the price of approximately $0.03 per kWH for
every one million in grant funds. Selling the energy at a rate below avoided costs will provide savings to
the utility to help to lower the energy costs in the Nome area and provide some energy produced locally
that is not dependent on imported oil. Furthermore, this project helps enable future village installations in
the region by helping with a base of operations, spare parts location, local training facility and regional
hub. Providing for renewable energy projects in villages should help reduce the dependency on oil in
those locations where oil must be flown or barged in and ultimately help reduce energy rates in those
locations as well. Through implementing a power sales agreement, this project is unique in that it takes
advantage of federal tax credit incentives for wind energy projects which help offset the actual cost of
energy. Overall, this project provides a cash and tax credit based revenue stream, provides jobs and
keeps money working in the community while increasing overall power generation reliability by producing
it locally. Banner Wind LLC (jointly owned by Bering Straits Native Corporation and Sitnasuak Native
Corporation) owns the wind farm while the construction and initial operations are managed by Western
Community Energy LLC. The profits from the project which are ultimately distributed to the shareholders
of BSNC and SNC will help provide income to an area where many have very limited incomes. This is an
excellent demonstration of a commercial opportunity that needs to be eagerly developed.
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Grant Application
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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.
The funds for the project construction have come from BSNC and SNC directly in the form of capital
investments and loans to facilitate the construction and keep the project on track for a 2008 on-line finish
date. All of the funds expended to date consist of private financing. The project stands as a privately
owned independent power producer to own and operate the facility through a power sales agreement to
the local utility. As such, the sale of energy provides for the ongoing operations and maintenance
expenses for the life of the project and for the bank debt payments for the project loan. Offsetting the
capital investment with a grant will allow the project to sell the energy to the utility at a reduced cost.
The funds requested are $4.126M with a 20% matching fund from Bering Straits Native Corporation and
Sitnasuak Native Corporation conjointly through Banner Wind LLC, the project Company. The 20%
match funds total $1.031M. The estimated total cost of the project is thus 5.157M. See Detailed Budget
in Exhibits: 6_Schedule, Budget, Cost, Photos: WCE Budget Breakdown.
The following table shows the budget breakdown. The Project Owner has committed the resources to
build the project and the funds state funds will be distributed on a re-imbursement basis for some of the
funds already expended. The sources of funding for the project to date have been direct capital
investments and bank financing.
Milestone or Task State Funds
Local Match
Funds (Cash) TOTALS
1 Project Design, Permitting, Consulting $0.00 $138,443.00 $138,443.00
2 Turbines and Turbine
Equipment $2,738,082.00 $684,520.00 $3,422,602.00
3 Construction, Roads,
Foundations $615,232.00 $153,808.00 $769,040.00
4 Wind Turbine Erection,
Assembly $157,116.00 $39,279.00 $196,395.00
5 Electrical and Turbine Wiring $272,049.00 $15,521.00 $287,570.00
6 Support Structures, SCADA, O&M
Facility $343,808.00 $0.00 $343,808.00
A majority of these costs are based on contracts already completed and firm construction quotes so this
budget represents very close to final numbers. The final shipment of spare parts and the final
construction of the O&M Shop facility are scheduled for Spring 2009 with materials on the first barge to
Nome. These items were revised during the first phase of construction in September and are not part of
the commissioning and commercial operation, but are key to the long term viability of the project in the
coming years.
It is important to note that this project is on a fast track construction schedule with completion in Mid -
November. The funds being used for construction are based on capital investments and loan financing to
get it done. The budget information is as accurate as possible at the time and the project is on track to
finish without any delays or surprises at this time.
Initially, this project was intended to be installed adjacent to the Utility power line. The new location on
Banner Ridge will produce a tremendous amount of output compared to the initial site as discussed in the
feasibility analysis. However, this new location will require a pproximately 2 miles of new 25kV line
extension. To support the extra energy production and encourage the development of a more productive
resource for the long term energy benefits, Nome Joint Utility Services board of directors approved the
construction of the new distribution line. As part of the interconnection agreement and the power
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Grant Application
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purchase agreement NJUS is managing and installing the 25kV Utility line extension to the project
themselves in close coordination with the actual wind farm construction activities.
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.
The BSNC Board of Directors passed a Resolution requiring that 50% of all their profits from this project
be reinvested in renewable energy projects in the 17 villages that make up the Bering Straits Region. This
is a significant first step to create a low cost hub which can support the surrounding communities with
future installations. A hub project will enable more cost effective, better maintained village projects in the
future while continually creating annual revenues to support more development. In some ways a grant
towards this project becomes the “gift that keeps on giving.” It supports itself through ongoing project
revenues but creates a strong presence for other projects. The goal is to expand development of
commercially viable projects without needing grants to justify their development. The grant for this project
offsets the increased capital costs from moving the project to the ridge top instead of the valley, but also
directly helps reduce the cost of the wind component of the energy supply for Nome for the life of the
project.
Success of this project will lead to exporting the profits and technical expertise to the villages who are
suffering even higher costs than Nome. The entire region is in a wind category ranging from Class 4 to
Class 7 winds. Wind energy is classified in a scale from 1 to 7, 1 being light winds and 7 on the other end
of the spectrum. Wind is a good energy resource when it hits the Class 4 scale. The majority of the
villages that make up the Bering Straits Region have primarily a “subsistence lifestyle” as they lack a true
cash economy. Seal, walrus, moose, caribou and fish make up their primary food source. High energy
costs for gas, fuel oil and electricity put an even higher burden of distress on these residents. Our Native
citizens make use of all of the animal resources and environment; it is time to add the wind and take
advantage of what has previously been a burden and source of hardship. The primary goal is to ultimately
add wind energy to all the villages of the region, and this is the start.
The Board also made the decision to sell the wind energy to Nome Joint Utilities at a rate below the
“avoided costs” with a goal to benefit all residents of Nome. The goal of everyone involved has been to
create a lasting influence with no compromises on the installation itself to have a project that will be
reliable and sustainable and support itself after construction.
The first benefit this project provides to the community is a departure from the 100% dependency on
imported fuels from outside of Alaska. Though the State of Alaska benefits from the sale of Oil as an
export product. The villages, however, are dependent on imported fuel from outside the state as their
only source of energy. This represents a small microcosm reflecting the status of the nation as a whole.
The United States is taking serious and dramatic steps to reduce our dependence on foreign oil. The
villages in Alaska must do the same thing. The first step towards a sustainable future requires a project
like this that reaches out and is implemented for the sake of the future of the community. This project is
absolutely a win-win scenario for everyone involved.
Direct Financial Benefits to the Nome Community:
Up to 200,000 gallons of diesel fuel annually (expected range from 175,000 to 209,000 gallons
per year from production estimations and actual utility value of 15.81 kwh per gallon.)
At $ 3.72 per Gal. (actual last purchase price) * 200,000 gallons = $744,000 one year of savings
based on last actual purchase
The avoided cost calculations tend to lag behind the immediate cost of fuel This project is basing
the savings on a discount to the Utility Avoided Cost of Energy calculation. Thus, this AEA
Renewable Energy Fund Grant provides to the Ratepayers and Community a direct savings on
their energy rate of $0.12 per kWh for every kWh produced and sold to the Utility. Instead of
selling the energy at $0.21 (which is still below the avoided cost) the project will sell the energy at
$0.09.
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Grant Application
AEA 09-004 Grant Application Page 7 of 25 9/3/2008
With a target expectation of 3,000,000 kWh per year (at $0.12 per kwh discount) that represents
a direct savings to the community of $360,000 per year while still providing a reasonable return
on the substantial local investment of over $1M in the project. (BASED ON THE LAST
PURCHASE OF 200,000 gallons for $744,000 THE TRUE SAVINGS ANNUALLY COULD BE A
LOT HIGHER THAN THE $360k USED IN THIS EXAMPLE)
This savings will continue year after year for 20 years in the community and provide a meaningful
percentage of energy that is produced locally. Over a 20 year period that savings amounts to
$7,200,000 in the community for a direct benefit. Thus the benefit cost ratio for the grant is $7.2M
over a cost of $4.126M which equals: 1.74.
If the savings were to be calculated based on the last actual purchase of Diesel Fuel and that
price was assumed constant for 20 years they would be calculated at $744,000 per year or a total
of $14.880M and the benefit cost ratio would be over 3.6. If the cost of diesel continued to
escalate, that ratio would do the same.
The payback for the grant to the direct benefit to the community on energy sales price alon e is
LESS THAN 11.5 YEARS (5.5 years using the diesel savings of $744k per year for current price)
Additional Benefits are Listed beyond these direct financial benefits in Section 5 below.
This entire project went through extensive planning and design stages through the summer of 2008 with a
construction start in September 2008 and a project construction finish in October 2008. Final
commissioning and on-line operations will be November 2008. This project is a testimony to the
possibilities for future projects with fast deployment and strong local support. Clearly , it has become time
to “quit studying and start doing.” This project will immediately start saving up to 200,000 gallons of
diesel fuel per year based on current production estimates. Western Community Energy has managed
each phase of the project and it is on track for on-time completion. Furthermore, Western Community
Energy will manage the operations and maintenance of the project over the next five years completely
while helping to promote wind development in the region. The construction of an on-site facility is
commencing and is intended to serve as the wind farm O&M and training facility. This shop will ultimately
have high speed internet, direct fiber network communications to each turbine, small wind and solar
energy systems, high bay service with overhead winch and equipment storage facilities, living quarters,
as well as office space. Western Community Energy will have the full use of this facility for all O&M
Activities and also already have on site for the project a late model F350 4x4 Truck with Mattrax track
gear for year round turbine access and maintenance. This facility along with the modern 18 turbine wind
farm it supports will become a regional training facility as well as a maintenance support hub (with spare
parts and tools). The Banner Wind Project is a prototype project that provides enough critical mass to
enable and support the future village projects. The Entegrity Wind turbine coupled with a strong
maintenance and service platform provides reliable energy and can be erected in villages with low cost
foundations coupled with a tilt-up system that does not require cranes See Exhibit: FOLDER 3 B
EWSI_Tilt-Up Diagrams. With the 2008 Completion and commissioning of the Banner Wind Project, four
new villages are being evaluated with an objective of installing 10-12 turbines in the summer of 2009.
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.)
$ 5.157M
2.5.2 Grant Funds Requested in this application. $ 4.126M
2.5.3 Other Funds to be provided (Project match) $ 1.031M
2.5.4 Total Grant Costs (sum of 2.5.2 and 2.5.3) $ 5.157M
2.5.5 Estimated Benefit (Savings) $0.12/kwhx3M kwh/yr
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.)
$ 7.2M over a 20 year
period based on the
energy rate discount only.
Calculating the true
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Public Benefit in terms of
dollars based on the
specific items listed in
Section 2.4 is difficult.
The Public Benefit of
reducing our 100%
dependence on imported
fuel could be “priceless.”
Note: Each $1 million in grant funds offsets the selling price by almost $0.03 per kW h.
Estimated production on an annual basis is 3 million kWh. A $4.126 million grant results in a reduction in
the cost to the utility of $360,000 per year or $7.2 million over the 20 year period. As stated previously,
this is a gift that keeps on giving.
ALSO: THIS PROJECT HAS AN OUTPUT OF 1.17MW AT A TOTAL INSTALLED COST OF $5.157M
WHICH REPRESENTS A CAPITAL COST OF $4,400 PER KW INSTALLED WHICH IS LIKELY THE
LOWEST COST DEVELOPED WIND PROJECT IN ALASKA BASED ON OTHER NUMBERS FROM
PROJECTS ACROSS THE STATE. EVEN WHEN THE TOTAL UTILITY LINE EXTENSION IS TAKEN
INTO CONSIDERATION THE TOTAL INSTALLED COST IS LESS THAN $5,000 PER KW WHICH IS A
SUBSTANTIAL VALUE IN THE PROJECT DESIGN AS IMPLEMENTED.
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 project management is under the leadership and direction of Western Community Energy
(www.westerncommunityenergy.com ). Western Community Energy has developed this project from the
initial design to the project construction and completion. WCE is assisting the owners in contractor
selection and management throughout the project and is also responsible for ongoing maintenance and
operations after construction. Brian Jackson and Mike Costanti have several decades of combined
experience in energy and energy systems. Ian Graham is the local project manager providing daily
supervision and direction of project activities during construction. Western Community Energy is the
exclusive value-added reseller of the Entegrity Wind Turbines for the Northwest including Alaska, Oregon,
Washington, Idaho, and Montana. This project represents a long-term relationship between all of the
entities involved including Banner Wind, Western Community Energy, and Nome Joint Utilities. The
project is the result of extensive analysis and design from the initial resource assessment to the project
location, layout, foundation design, and construction.
Brian Jackson, P.E., C.E.M., M.B.A. , Western Community Energy
Brian Jackson, P.E., C.E.M., M.B.A., is one of the founders of Western Community Energy and combines
17 years of mechanical engineering experience in electricity generation and project management with a
master's degree in Business Administration to provide effective consulting and system design services
that are relevant to a client's bottom line through increased productivity and profits or significant s avings.
He is also a Certified Energy Manager with the American Association of Energy Engineers and spent 11
years working for Idacorp/Idaho Power Company in the field of power generation. Several of those years
focused on various types of renewable energy sources including multi-megawatt hydro-electric power
plant construction, photovoltaics, wind, and biomass. He also spent several years working with
commercial and industrial customers in the areas of distributed generation and cogeneration.
See Exhibits: FOLDER 1 A WCE Brochure, FOLDER 4 MANAGEMENT Resumes: Brian Jackson, Mike
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Costanti, Ian Graham
In addition to the WCE Team, BSNC and SNC have provided extensive project leadership, expertise, and
support for the project through See Exhibits: FOLDER 4 MANAGEMENT RESUMES, Jerald Brown, Neal
Foster, and Matt Ganley. This project has been through several board review meetings and has the
support of both companies as well as the entire community to be finished as planned.
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 project Schedule chart below with the listed target and completion dates outlines the actual schedule
being attained for the project.
The main point to make is that this project is on task and on-time with the most critical dates past. The
arrival of the last barge to Nome on the first week of October has been one of the most time sensitive
issues of the entire summer since the last group of turbines is on that barge and it is critical to finishing
the project before winter 2008. That barge had mechanical delays and is arriving a week past the target
date, but the rest of the project should not be dela yed by that in the end.
(See DETAILED WCE GRANT PROJECT SCHEDULE IN EXHIBITS)
Folder 6: Schedule, Budget, Cost Worksheet Photos:
WCE Banner Wind PROJECT SCHEDULE
WCE Banner Wind PROJECT SCHEDULE 11x17 (large format pdf file)
BANNER WIND PROJECT
Schedule Summary
Accomplishment Target Date Start Date
Finish
Date
Complete Turbine Order Feb-08 May-08 Done
Schedule Shipping Barges June-Sept 08 Sep-08 Done
Final Wind Analysis Jun-08 Jun-08 Done
Permitting Start Jun-08 Jun-08 Done
Geotech Field Analysis Jul-08 Jul-08 Done
Foundation Design Aug-08 Aug-08 Done
Final Site Design July-Aug 08 Aug-08 Done
Construction Start: Roads, Foundations Sep-08 Sep-08 Done
Arrival of Last Barge; Wire, 7 Turbines
October_3
2008
October 6,
2008 Arrived
Turbine Erection Oct-08 Sep-08 Oct-08
Turbine Electrical Wiring Oct-08 Oct-08
Utility Interconnection Oct-08 Oct-08
Turbine Commissioning Oct-08 Nov-08
Final Operations and SCADA
Networking Nov-08 Nov-08
O&M Shop Facility Spring 09
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It could not be overemphasized that this project has gone from a late start to project
commissioning and completion in a total time window of 6 months from Mid-May 2008 to Mid-
November 2008.
This schedule was made possible by a team approach and a commitment by all entities involved
to deliver results. The goal has always been to get this project on-line in 2008 and use it for a
base to support future village installations with training and local O&M expertise.
Also, with the rising costs of fuel, the community support and enthusiasm for this project has
been substantial and important. Every single entity listed under 3.4 Project Resources is to be
commended for the accomplishment to date and the commitment to a str ong finish over the next
critical month.
The last project item, the O&M Facility was planned for Spring 2009 construction and is the only
activity with a 2009 implementation. This is not crucial for the operations and maintenance of the
wind project during the current year and was planned for 2009 on purpose to avoid any
distractions during the wind farm development. It would be a tragedy to have a great O&M Shop
Facility and miss any part of the Wind Project Schedule so the rest of that will be implemented to
have all the materials and items needed on the first spring barge to Nome. Other operations
facilities are available in Nome for Western Community Energy to operate out of for the first winter
season. The shop design itself represents a departure from conventional construction and an
innovative, cost effective solution to be replicated in other hub communities.
3.3 Project Milestones
Define key tasks and decision points in your project and a schedule for achieving them.
The key project Schedule Milestones are outlined in the Attached Exhibit: FOLDER 6 E WCE Project
Schedule with the detailed point by point subtask listing. ALL OF THOSE MILESTONES ARE
ACHIEVED UP TO OCTOBER 6, 2008. CONFIRMATION HAS BEEN ASSURED OF THE ARRIVAL OF
THE LAST 2008 BARGE TO NOME WHICH CONTAINS THE LAST SEVEN WIND TURBINES AND IS
BEING UNLOADED ON OCTOBER 6, 2008. This barge is approximately one week late due to
mechanical difficulties, however, the project is making quick adjustments to the schedule to get the last
turbines installed on time. Meanwhile the electrical interconnection work is proceeding by the Utility and
the electrical contractor.
The Five project Milestones from a Budget Standpoint and Key Project Cost Breakdown Standpoint are:
1. Project Design, Reports, Permitting, Consulting, Legal
2. Turbines and Turbine Equipment
2. Construction, Roads, and Foundations
3. Wind Turbine Erection
4. Electrical and Turbine Wiring
5. Support Structures, O&M, Controls, Final Commissioning
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 refe rences
for known, key personnel, contractors, and suppliers as an attachment to your application.
Every company and individual involved with this project was hand selected based on proven results,
experience, and accomplishments. This project has been m oving at an extremely fast pace from concept
to completion. Maintaining the budget expenses and managing the project with so many unknowns from
the beginning was not a small effort. Doing that while managing shipping schedules and working toward
a short construction window has been extreme. Everyone involved had to rely on the others to get their
part done on time and never compromise safety or quality. Brochures and information from the following
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 11 of 25 9/3/2008
companies are included as exhibits.
Exhibits Folders:
1_Business Documents, Qualifications, Brochures
4_Project Management Resumes
Western Community Energy, LLC: Brian Jackson, Mike Costanti, Ian Graham, Kelsey Buhr
Renaissance Engineering & Design, PLLC: Sandra Cardon
Entegrity Wind Systems, Inc.: Malcolm Lodge
Apterra Technologies, LLC: Ted Schwartz
STG Inc: Jim St. George, Brennan Walsh – Foundation Construction, Roads, Crane and
Erection
Dwayne Miller and Associates: Rick Mitchells – Geotech Analysis and Report
www.alaskageo.com
BBFM Engineers Inc: Troy Feller – Foundation Design www.bbfm.com
Hattenburg, Dilley, and Linnell (HDL): Laurie Hulse – Permitting www.hdlalaska.com
Eagle Electric: Rob Bensin
Bering Straits Development Company: Tony Parsons
Nome Joint Utility Systems (NJUS): John Handeland
The Partners that compose Banner Wind LLC (BSNC and SNC) including the management, employees
and both boards of directors have shown incredible leadership in stepping out with this project instead of
waiting for someone else to build it. Clearly, they are fully committed to the Banner Wind Project and
have allocated sufficient funds and support to ensure that it proceeds to completion with or without grant
monies. Three key individuals have been responsible for the day to day support and decision processes
involved with this project development and their resumes are included Exhibit: FOLDER 4
MANAGEMENT RESUME: Jerald Brown, Neal Foster, Matt Ganley.
Brochures and web page company descriptions of these companies are included in Exhibits: WCE-
Company Intro and Bios, WCE-Brian Jackson Resume, WCE-Mike Costanti Resume, WCE-Ian Graham
Resume, RED-Renaissance Eng Brochure, RED-Sandra Cardon Resume, EWSI-SOQ,Warranty, EWSI-
Wind Turbine Information Manual, EWSI Entegrity Tilt Up Design; EWSI Lifting Instructions; STG, DMA,
BBFM, HDL, Eagle Electric.
3.5 Project Communications
Discuss how you plan to monitor the project and keep the Authority informed of the status.
The construction part of the project will be completed and fully operational when funding is provided. The
project will have a fiber optic local area network solution that has extremely reliable data collection and
communications capabilities to the main control room at the site. A major concern was the
communications reliability and that part of the system has also gone through extensive design
considerations. The initial design has now been determined and the equipment is in the process of being
ordered at this time. A wireless radio modem will be utilized to connect the project to the internet through
a link to the Bering Straits office building in downtown Nome. The Entegrity Turbines come with a
network interface that can interface with each individual turbine. The project will be enhanced by a local
Scada control package that will allow monitoring and operations of the project from the maintenance
office or from the computer at the Nome internet connection.
Apterra Technologies, LLC provides services and solutions for real-time data acquisition, monitoring and
management of wind farms and other renewable energy systems. Apterra’s systems are field-proven and
deployed widely in the United States, Canada and the United Kingdom.
The company’s Supervisory Control and Data Acquisition (SCADA) systems easily integrate with a variety
of turbine controllers and sensor networks. Components of this system include the Hawkeye Remote
Terminal Unit (“Hawkeye RTU”), which provides remote data acquisition, monitoring and control services,
and the Hub Server which enables centralized access to networked Hawkeye RTUs.
The Hawkeye RTU is implemented as an embedded computer which interfaces with turbine controllers
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 12 of 25 9/3/2008
via a serial port or Ethernet connection. Features include a web-accessible application that enables
users to remotely view the real-time state of monitored wind turbines and to configure and control the
turbine through a web browser.
The Hawkeye RTU captures turbine state and statistical averages in 10-minute intervals. The captured
data is persisted in the Hub Server’s central database to enable farm -wide analysis and reporting. The
Hawkeye RTU also delivers daily summaries of turbine performance by email and its error notification
feature facilitates prompt turbine troubleshooting.
The Apterra Hub Server enables efficient management and control of the wind farm through the
aggregation of farm-wide data in a central, industry standard SQL database. This database serves as the
foundation of the Hub’s rich data reporting and charting capabilities. The Hub Server is hosted and
supported at a managed, commercial-grade site hosting facility to ensure high availability.
Apterra is also specifically providing software and hardware consulting support to enhance the core
capabilities of its off-the-shelf systems with client-defined custom features vital to ensuring project
success. Apterra is developing and integrating custom modules to enhance this system usefulness and
value by allowing a complete local control and reporting network. Some sample screens and control
interface and reporting information is included as an exhibit along with the Apterra Brochure.
This project thus has a complete plan for the O&M Team as well as the project owners to monitor the
performance as well as operate the equipment with an internet platform as well as a local LAN direct fiber
connection solution.
IF FUNDED, THIS PROJECT W ILL HAVE A SPECIFIC WEB PORTAL JUST AS THE OWNERS HAVE
FOR ACCESS SO THE ALASKA ENERGY AUTHORITY CAN LOG INTO THE WIND FARM AND
MONITOR THE OPERATIONS AND PERFORMANCE. THE DATA AS DESCRIBED IS LOGGED AND
TRACKED THROUGH AN ON-LINE DATABASE FOR LONG TERM PERFORMANCE REPORTING
AND ANALYSIS.
3.6 Project Risk
Discuss potential problems and how you would address them.
There are basically two types of project risk associated with this wind project: Construction Risk and
Operations Risk. Both categories have been dealt with at the highest level to manage the risk and ensure
the quality and reliability of the final project.
1. Construction Risk
Construction Risk has been mitigated every step of the way through diligent design and extremely
careful selection of contractors and project participants. This project went through four separate
design iterations while working towards the September/October 2008 construction period. The
biggest variable that added to construction costs also helped with construction ris ks. The project
was moved from soft soils to a rocky mountain. Through the geotechnical exploration, the
bedrock was determined to be solid at 6 to 10 feet below the surface. Mounting the towers to
bedrock with rock anchors and steel columns proved to be an excellent solution to insure a solid
base and also control construction costs.
2. Operations Risk
Operations Risk has been mitigated as much as possible throughout every design step. There is
no doubt that this is a harsh environment and some of the key efforts that have been
implemented to insure long and reliable operations follow:
Black Turbine Blades: Through experience in Kotzebue over the past ten years the
implementation of black blades on the Entegrity Wind Turbines has helped minimize icing
Underground power utility lines
Access Roads to Site improvement
Access Road on Project to each turbine
Turbine controllers centralized in heated shack structure
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 13 of 25 9/3/2008
Fiber optic local communications network to each turbine controller.
Local Nome O&M Facility and Operations support
Beyond the measures listed, the emphasis throughout this project has been to invest substantially in the
project in areas that will insure long-term reliable operations. The key is to provide the maintenance on a
steady, reliable platform that is structured around the long term operations goals. This project provides
for risk reduction for its own installation, but also through the support and facilities, it will also provide for
reliable future village installations and their relia bility. Western Community Energy is committed to long
term O&M Support for this project and future village installations. The local Nome O&M and Training
Facility will be the first of its kind in Alaska to provide structured wind maintenance technician o perator
training in addition to the support for village applications.
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.
Per Alaska Energy Authority the project location falls under the class 5 and 6 wind category. See Exhibit: FOLDER 2 B
AEA Wind Map
The City of Nome, with NETL, AEA with the Department of Energy did a study of various alternative energy options.
The study indicated that wind would be the best and most cost effective solution in the short term, in order to provide an
immediate benefit to the residents of Nome.
BSNC and SNC teamed up in 2008 and took the leadership to implement a project that could be accomplished in the
current year time frame.
The energy resource has been evaluated and validated through several means to determine that the wind project could
be built for less than $5,000 per kW installed cost and that the expected capacity factor would be above 25%. This
project was an extensive undertaking requiring huge efforts from everyone involved in the project from its beginning
concept to the construction phase in October.
The resource itself around Nome is extensive and substantial. Unfortunately it is on the mountain top and not in the
valley as originally hoped. The cost of developing a project adjacent to the powerline in the valley could have been
substantially lower; however, the permitting and project delays could have been greater. It turns out that the mountain
top was a place of lower concern from both a wetlands, and a coastal birds standpoint. Building on solid rock was a
design constraint. However, the fractured rock surface allowed for trenching for the underground wiring.
The powerline running up the mountain is sufficient to allow more turbines to be installed on the top of Banner Ridge at
a future date without having to upgrade the existing line. After the extensive data and site analysis work done on
virtually every ridge around Nome, the project team is confident that this is absolutely the best possible wind
development project in the region and the best location.
The following bullets summarize some of the resource information:
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 14 of 25 9/3/2008
Class 5 and 6 Wind Resource – Banner Ridge, Nome Alaska. 18 Turbine Wind Farm,
Entegrity Wind Turbine EW50:
1.17 MW Max Capacity with production of 2,936,000 kWh annual production estimate
from wind farm array including array losses which represents a 29% capacity factor on
the maximum output capability of the turbine.
This is based on actual data analysis and actual array layout design modeled for the site
and location from the Snake River Anemometer installed by AEA.
Turbine Availability Assumed 95%, production estimation 2,789,200 = 27% Capacity
Factor
(NOTE: Entegrity is achieving 98% availability on turbines with full O&M Package as
WCE is providing that are maintained properly)
(Also, this does not take into account the expected substantial increased output for air
density in the coastal arctic location)
More detailed information is presented in the Exhibits: Folder 2_Project Design and Reports
with the Renaissance Engineering & Design Summary Document from the Feasiblity Analysis
work for the project.
4.2 Existing Energy System
Following information Provided by NJUS about currently installed NJUS Existing Generating Equipment
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.
Existing Generating
Equipment (Brand & Model #)
Size (kW) Age
(Years)
Avg. Efficiency
(kWh/Gal Diesel)
EMD #20-645F4B 2,865 23 13.08
EMD #12-645E4 1,500 19 12.84
Caterpillar #3616 3,660 17 16.39
Caterpillar #3516B-LS 1,875 9 14.35
Wärtsilä #12V32B 5,211 3 16.32
Wärtsilä #12V32B 5,211 3 16.32
Caterpillar #3456B 430 3 Black start; haven't had to run it
enough to get #
Boiler 1.5M BTU 3 Emergency use; haven't run to get #
Boiler 1.5M BTU 3 Emergency use; haven't run to get #
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.
There is no current renewable energy resource being used. 100% of the energy used is diesel powered generators.
The impact of this wind project is of very important concern to the local community. The interesting thing is that the gold
mine is contracting for energy supply from the utility in addition to the community itself. The mine’s load may be larger
than the community and more steady. Thus, the impact of the wind farm as part of the total energy is much smaller at
about 1MW at peak output than it would be otherwise. The result of that is also that even if this project offsets
approximately 200,000 gallons of diesel fuel per year as expected, the net consumption by the utility will still likely
double from what it was before the mine came on line for the energy.
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 15 of 25 9/3/2008
4.2.3 Existing Energy Market
Discuss existing energy use and its market. Discuss impacts your project may have on energy customers.
b. Annual O&M Costs
i. Provide your annual Labor O&M costs ($) $1,187,403
ii. Provide your annual Nonlabor O&M costs (S) 6,958,135
c. Annual Electricity Production and Fuel usage
i. Provide Annual Electricity Produced (2007 data in kWh) 30,542,141
ii. Provide Annual Fuel Usage (2007 data in gallons)
Diesel 1,932,287
Other 0
iii. Peak Load (2007 data in MW/kW) 5,080
iv. Average Load (2007 data in MW/kW) 4,030
v. Minimum Load (2007 data in MW/kW) 2,173
vi. Efficiency (2007 data in kWh/gal of diesel) 15.81
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
SEE EXHIBITS IN FOLDERS ON CD:
2.PROJECT DESIGN AND REPORTS FOLDER
Banner Wind Executive Summary
Wind Map – Alaska Energy Authority
Renaissance Engineering & Design Feasibility Analysis Summary Memo (RED)
RED Nome Wind Data Summary Report (from Complete Feasibility Analysis)
Western Community Energy Project Design Documents (WCE)
WCE Project Overview Site Map
WCE Electrical Design One-Line
WCE 25kV and 480V Powerlines Trenching and Turbine Locations
WCE Wind Turbine Control Shack Layout and Design
WCE Banner Wind PROJECT SCHEDULE
Geotech (DMA), Foundation Design (BBFM), SCADA Design (Apterra) Documents
3.ENTEGRITY WIND TURBINE INFO (EWSI)
EWSI Entegrity SOQ – Statement of Qualifications
EWSI Entegrity National Renewable Energy Laboratory Performance Tests
EWSI Entegrity Wind Turbine Information Package
EWSI Entegrity Tilt Up Tower Option
EWSI Lifting Instructions
6.PROJECT PHOTOS AND SUPPORTING DOCUMENTS
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 16 of 25 9/3/2008
See Exhibit: FOLDER 7 Letters of Support
SYSTEM DESIGN SUMMARY:
The project consists of 18 Entegrity Wind Turbines with a total peak output of 1170 kW or 1.17MW
Nameplate capacity. The Entegrity turbines have a nominal rated output of 50kW with winds below
30mph, but in the dense Alaska coastal air they are expected to operate often at the peak output of 65kW
each. These turbines have a 50’ blade diameter and are mounted on 100’ lattice tower structures.
The anticipated capacity factor is between 25% and 28% from modeling analysis based on data from near
the site.
Anticipated annual generation is 2,936,000 kWh.
These turbines are unique in the small wind generator realm. They have been described as the “largest
small generator” in comparison to other turbines in the marketplace which may be the “smallest large
generators”. The Entegrity was specifically chosen after a detailed analysis of its specific suitability for
village installations. It is a very simple machine with simple yet critical maintenance requirements, not
unlike a John Deere tractor. With the appropriate maintenance they can be kept operating for decades.
The design has gone through extensive analysis and testing at the National Renewable Energy
Laboratory in Golden Colorado. Those full reports are available on-line, but the document covers and test
numbers are included in the exhibits.
The Entegrity turbines have a simple induction generator with no sensitive power electronics. They have
power factor correction capacitance built into the control system and are designed for complete
standalone operations with direct integration to existing utility grids with monitoring and control through
internet connections. The Entegrity turbine has no yaw motors or gears as it passively aligns downwind
with the incoming winds.
Entegrity provides through Western Community Energy a complete 5 YEAR Operations and
Maintenance and Warranty Program. Thus, this project has no additional Operating and
Maintenance expenses for the first five years. Project revenues are budgeted every year however, to
provide for ongoing O&M for years 6-20 as well as boosting facilities and personnel for support of future
village installations.
In addition to other cold weather modifications as special connectors, gearbox heater, and sealed control
panels, the Arctic Versions have black blades and special leading edge coatings for shedding ice as
quickly as possible. Many modifications are the result of years of operations in Kotzebue, Alaska. In fact,
personal visits and interviews were conducted in Kotzebue regarding this turbine and operations there
before selection was made. The entire O&M plan presented by WCE was based on detailed invest igation
into operations of these Entegrity turbines in arctic environments. The selection was based on multiple
issues, but focused around the ability to manage foundation costs, utilize the turbine in village installations
without requiring cranes, and overall simplicity of the units.
The WCE design modifications to the standard manufacturers equipment included a complete on-site 5
year O&M commitment, local operations facility and an intensely managed plan from the beginning. The
design incorporates a fiber optic local area network linking all of the turbines and their controls with heated
control shack facilities housing the circuit breakers and controls for each turbine in a weatherproof safe
environment for years of service and operator safety. The shacks are designed for extreme weather and
shelter for turbine O&M services on site. Five shacks are included with four controls in each of four
shacks and two sets of controls in one shack. A support desk and centralized site operations wireless
point to point internet will operate from this second control shack. The wireless point to point connection
will have clear line of site to the high speed secure internet services at the 3 Story Bering Straits Native
Corporation headquarters 4 miles away in downtown Nome.
Another key aspect of this project is the complete O&M Facility to be built on the hill at the wind farm. This
facility will store spare parts for the Nome project as well as other villages. This facility will have an
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 17 of 25 9/3/2008
office/control room, along with living quarters for training technicians from other locations utilizing the
operating wind farm as a hands-on training tool. The facility itself is intended to be an energy efficient
example for other renewable energy applications in the future including small wind, solar thermal, solar
photovoltaic, and other technologies with an adjacent proximity to the wind farm grid. Future applications
of bulk energy storage technologies are possible at that location with minimal modifications .
4.3.2 Land Ownership
Identify potential land ownership issues, including whether site owners have agreed to the
project or how you intend to approach land ownership and access issues.
The land is currently owned by Sitnasuak Native Corporation, in split-estate with Bering Straits Native
Corporation. The project owner Banner Wind LLC is jointly owned by these two corporations and has a
Lease Agreement for the project from the land owner companies.
See Exhibit: FOLDER 5 D Land Lease
4.3.3 Permits
Provide the following information, it may relate to permitting and how you intend to address
outstanding permit issues.
List of applicable permits
Anticipated permitting timeline
Identify and discussion of potential barriers
The following lists of permits have been covered through the various appropriate agencies. The
partners hired a consulting firm, HDL to perform the permitting tasks with Laurie Hulse leading this
task. HDL has extensive experience in Alaska and permitting for wind projects as well as other
construction and development projects.
List of Applicable Permits:
FAA Form 7460-1 Notice of Proposed Construction
ADNR Coastal Zone Consistency Determination/Review
USFWS Threatened and Endangered Species Determination
COE Wetlands Determination and/or 404 Permit
Adherence to NEPA was not a requirement because there was no federal funding involved in the project.
However, the partners have conducted their own cultural and historical evaluations with their staff
archeologist.
Anticipated permitting timeline
50 to 120 days (started in mid-July 2008) Communications with agencies and their timely responses have
determined that FAA is the only permit required. This determination of hazard/no hazard is currently in
review at FAA.
Identify and discussion of potential barriers
A driveway permit from the Alaska DOT was required for the utility road access to the Nome Teller
Highway. That permit actually did create a delay in finishing the road for a couple weeks in September
while that process was finalized. Permission was finally given by DOT and the road has been finished as
requested to allow construction access from the South side of the project.
FAA could possibly delay the project approval process through their final review and could potentially
determine that the site and/or tower elevations could present a hazard to air traffic. Local FAA personnel
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 18 of 25 9/3/2008
have been contacted with the crane location on site as well as all activities and have expressed support
and even enthusiasm for the project. Final FAA determination is imminent, but not secured, however this
risk is remote and should be offset by the existing project design parameters which have taken all of that
into consideration as part of the selection process. Specifically: The total height of the tower is 100’ with a
50’ blade diameter. Thus the tip of the turbine blade is approximately 125’ from the existing terrain.
Typically the FAA is not concerned with structures below 150’ in total height at all. Also, Banner Ridge is
not in the approach or departure path of either runway at Nome. This was taken into consideration when
evaluating the other possible locations in the area around Nome. Other ridges in the region such as
Newton Peak are in the flight line from the runway and even Anvil was considered within a certain angle of
the flight path, though it has the existing Military Radar Structures on it from World War II operations.
Banner is NOT in the flight line of either runway. The likely mitigation in the event of future discussions
may be the addition of some tower lighting.
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
USFWS determined that any threatened or endangered species were unlikely to fly that far inland, so this
issue is cleared.
Habitat issues
USFWS determined that adverse effects on habitat is unlikely
Wetlands and other protected areas
The area is not classified as a wetland
Archaeological and historical resources
Not applicable when federal funding is not used, however, staff archaeologist has reviewed and has been
monitoring project construction. Note specifically Matt Ganley’s resume included in the management
resume section as monitoring the project in this regard from the initial site walk through construction.
Land development constraints
Not applicable
Telecommunications interference
Not applicable
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 19 of 25 9/3/2008
Aviation considerations
FAA Notice of Proposed Construction has been approved.
Visual, aesthetics impacts
Not applicable
Identify and discuss other potential barriers
The Alaska DNR Division of Coastal and Ocean Management determined that a Consistency Review was
not required for this project.
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
The Exhibits contain a document: Banner Wind Project Detailed Budget Breakdown in the Folder
6_Schedule, Budget, Photos etc. As stated elsewhere most of these costs are finalized and many are
already delivered. This project is on-time and under budget (for all the items that were not subject
to major location changes in scope) which is a major achievement in Alaska any year but
particularly when managed in a 6 month time frame.
The total project cost complete is estimated at $5.157M with a request of 80% $4.126M from the
State and 20% cash contribution by Banner Wind LLC totaling $1.031M.
This represents completely a completely installed and operating wind farm over with over 1MW
capacity at a total cost LESS THAN $5,000 per kw INSTALLED with ZERO ADDITIONAL O&M
EXPENSES FOR THE FIRST FIVE YEARS.
THIS PROJECT IS INTENDED TO SET A NEW PRECEDENT FOR WIND IN ALASKA WITH
A SUSTAINABLE BUSINESS MODEL AND LONG TERM VALUE.
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
WESTERN COMMUNITY ENERGY is providing local Operations and Maintenance for this facility along
with the Warranty support functions at no additional charge to the project for the first f ive years during the
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 20 of 25 9/3/2008
warranty period. Full warranty support is included for the first five years completely.
Ongoing O&M for years 6-20 are the major expense anticipated for this The minimum energy sales price
is taking this into consideration. There is also a need to fund future upgrades and improvements targeted
near the end of the second ten year period. Since this is a commercial venture the goal is for continuous
improvements and quality operations throughout the life of the project.
The following bullet points outline the budgeted O&M expenses:
O&M Plan is a Pay Ahead Deposit Program for Future Needs – Budget Increases with Fleet Age,
These are high O&M Estimates but these turbines will be in high production and require “pro-
active” maintenance more than typical “re-active” maintenance:
Years 1-5: $0 Actual Cost, Covered by Western Community Energy and Entegrity Completely.
Budget Retained annually for O&M account in future years: $75k per year minimum – Target of
$90,000 per year (Approx $0.03 per kWh).
Years 6-10: Beginning Balance in O&M Account. Assume O&M Budget continues with
contribution of $90K per year as O&M and component (blade/brakes/etc.) replacement/upgrade
funds in later years. (Approx $0.03 per kWh)
Years 10-20: Assume $0.04 per kWh budgeted for future increased O&M and upgrades.
Years 20+: Assume $0.05 per kWh budgeted as part of new contract at that date or other
arrangements.
According to manufacturer’s documentation: Typically, the system requires 2 man days of annual
inspection and adjustment and 3 hours a month or less in routine inspection. A remote monitoring system
as described is also provided which will allow remote diagnosis and performance monitoring. At the time of
commissioning EWSI will conduct operations and maintenance training for personnel if requested. WCE
will use local personnel as much as possible for all of the facility work and will provide training and
oversight for future village installations through the Nome facility.
The operation and maintenance cost must ultimately be funded through project revenues. The grant
funding will offset the capital costs of the project and the minimum ongoing project revenues will be utilized
to cover all future O&M expenses.
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
It is anticipated that 100% of power generated by the project will be sold to Nome Joint Utilities System,
under a power purchase agreement yet to be finalized. Several meetings have ensued with all parties to
the agreement to date. The final terms of the purchase are dependent on project costs and the outcome
of this grant request application. At all times the goal has been to keep the energy sales price as low as
possible and prove that wind can be installed and provided a lower cost to the communities.
If this BANNER WIND PROJECT grant request is fully funded we anticipate a selling price of $0.09 per
kWh. For comparison purposes NJUS’s cost of producing power, under the current system is
approximately at least $0.23 per kWh, just for the fuel, not including any other costs. Without any grant
funds we anticipate the selling price to be close to $0.21 per kWh.
Banner Wind LLC is not seeking to profit from the grant funded portion of the project. The grant funded
portion of this project is utilized to directly lower the cost of energy to the utility. Banner Wind LLC, is
anticipating a return of $0.05 per kWh or roughly $150,000 per year based on a target of 3,000,000 annual
kWh production based on approximately $1.1M in capital invested on the portion of the funding not
provided by the grant. The land lease portion of the energy sales is set at $0.01 per kWh paid to BSNC
and SNC specifically for the land. The O&M portion is targeted at $0.03 per kWh and is set aside from the
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 21 of 25 9/3/2008
beginning of the project to help fund future repairs and upgrades. This is the methodology that leads to
the targeted sales price of $0.09 per kWh if the grant is funded.
The project also benefits from a short term cash sale of green tags from the project as well as federal tax
incentives. Banner Wind will maximize the project benefits to all parties while Western Community Energy
insures the operational excellence and maintenance of the project. As stated earlier, BSNC has
committed 50% of their total profits from the project to future village installations. Returns to the
shareholders of each native corp will help many people in the community of Nome.
It is absolutely critical that this project is sustainable from a business standpoint as well as from a
mechanical and installation standpoint.
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.
Almost all of these costs are based on firm quotes for contracts on tasks that are already finished
or significantly in progress. These are not hypothetical costs with unknown parameters. WCE
has been managing the project each step of the way and each of the contractors involved.
The budget overview from section 2.3, section 2.5, the Milestone Items from Section 3.3 and the
listed expenses and funds for Section 4.4.1 are all discussed and presented in the overall see
Exhibits: FOLDER 5 BUDGET INFORMATION SUMMARY and this COST WORKSHEET.
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.
Banner Wind LLC will be operated by both Bering Straits Native Corporation and Sitnasuak Native
Corporation. See Exhibit: FOLDER 5 F Operating Agreement.
Western Community Energy has helped manage this project as well as the overall business model. The
solution implemented for this project clearly demonstrates a business solution that delivers results and
gets equipment in the ground. The project is completely sustainable from its beginning to the longer term
operations. The model is simple, a private company builds a commercially viable project capturing the
federal tax incentives and sells the energy to the utility company at a price below their cost of generation.
Furthermore, some profits from that project are further dedicated to expanding installation of renewable
energy projects in the surrounding villages.
Though the model is simple, it has taken months of work to implement a design and solution and then
stage a two month construction window with precise execution stages . As stated before, every contractor
and each person involved with this project has committed to the resources and schedule to get this proj ect
done.
Western Community Energy will have a long term involvement and presence with this project to provide
the Complete Operations and Maintenance in the first 5 years locally and to manage the Entegrity Wind
Systems Inc. complete five year warranty on the EW 50 Wind Turbines. This time frame starts and
becomes effective at the time of turbine installation and successful commissioning or ninety (90) days after
the shipping date, whichever occurs first.
BSNC and SNC will work with Western Community Energy on a long term basis long after the completion
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 22 of 25 9/3/2008
of the project and on into the years 6-20 operations to ensure stability of the project.
This grant request does not diminish the business case, but offsets the intended power sales price to
create a LONG TERM PRICE REDUCTION for energy in Nome from this project. It is imperative that the
minimum energy sales price of $0.09 per kWh is a number that covers the long term O&M as well as the
financing charges and debt payments for the COST SHARE part of the project expense by Banner Wind
LLC.
The goal of Banner Wind LLC is not to have a project with zero investment, but to be able to sell the
energy to Nome Joint Utility System at a low price that helps to actually lower the energy rates in the
community in a substantial way instead of just a small discount.
However, even at a small discount at $0.02 below the utility costs, the wind energy will help the community
by displacing as much as 200,000 gallons of diesel fuel per year. As fuel prices may increase, the value of
the fuel savings could dramatically increase.
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 economic benefit for the residents of Nome would be the significant reduction in the cost of power. We
recommend additional funding for wind power for the community.
This project had its beginnings with a high energy cost USDA grant application in 2007. Attached are a
number of letters of support that were obtained for the USDA project that was not granted. See Exhibits
Folder: 7_2007 Letters of Support for Wind Project. Banner Wind LLC is a business entity that was
created to build a wind farm and get it done immediately. The approval and commitments to the project
were formalized in May of 2008 with a target completion of November 2008. With shipping schedules and
short construction windows everyone knew this was not going to be easy. This was extremely aggressive
and involved tremendous efforts on the part of the manufacturer – Entegrity Wind Systems Inc., the project
managers – Western Community Energy, the system design and permitting team, Renaissance
Engineering, DMA, BBFM, HDL, Apterra; the road and foundation construction contractor STG, Inc and
the local crews and utility, Eagle Electric, Bering Straits Development Company, and particularly also
Nome Joint Utility Service.
More projects like this should be encouraged where the local community helps invest in the projects and
has a stake in making a difference in their communities. Projects that can be designed and built within a
single construction season are exciting and show momentum. They encourage the communit y by showing
that things can be done and are being done now, not “some day” to help the energy costs.
Regions like the Bering Straits (and truly the Western Coast of Alaska) with very high wind resources offer
immediate opportunities to help offset diesel fuel usage. We recommend an emphasis on support for
projects that can happen right away like this project for 2008, but also in the 2009 construction season,
more than some later date in the future.
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 23 of 25 9/3/2008
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
Electricity Price Benefits:
The installation of this wind power project will provide an output of up to 1,170 kW to the Nome Joint Utility
electric grid in Nome, Alaska over a 20 year extendable project timeframe. The production is
approximately 3,000,000 kWh per year, The owners of the project are committed to sell the energy at a
price below the avoided cost calculations, even without any grant funding. Grant funding will allow further
reduction in the price of approximately $0.03 per kWH for every one million in grant funds. Selling the
energy at a rate below avoided costs will provide savings to the utility to help to lower the energy costs in
the Nome area and provide some energy produced locally that is not dependent on imported oil.
It is anticipated that 100% of power generated by the project will be sold to Nome Joint Utilities System,
under a power purchase agreement yet to be finalized. If our grant request if fully funded we anticipate a
selling price of $0.09 per kWh. For comparison purposes NJUS’s cost of producing power, under the
current system is at least $0.23 kWh, just for the fuel, not including any other costs.
The impact on energy customers from full funding of this grant request would result in a benefit to the
customer of a savings of $0.12 kWh and over a 20 year span we are looking at a savings of over $7.2M,
which would go towards the community.
TOTAL ANNUAL REVENUE ESTIMATE: at $0.09 and 3,000,000 annual kWh
Total Project Revenue: $270,000 per year ($0.09 Total price)
Land Lease Payment: $30,000 per year ($0.01)
O&M Set Aside: $90,000 per year ($0.03)
Investment Return: $150,000 per year ($0.05)
A short term five year additional revenue stream from the sale of Green Tags has been negotiated at
approximately $0.01 per kWh.
The project will use as much of the federal tax credits as possible. The federal incentive is approximately
$0.02 per kWh, but it is not clear how much of the federal credit can be used with the state grant. The
assumption at this point is that with 20% of the capital contributed to the project construction, the tax credit
should be at a minimimum $0.004 per kWh.
Fuel Savings Benefits:
Up to 200,000 gallons of diesel fuel annually (expected range from 175,000 to 209,000 gallons per
year from production estimations and actual utility value of 15.81 kwh per gallon.)
At $ 3.72 per Gal. (actual last purchase price) * 200,000 gallons = $744,000 one year of savings
based on last actual purchase
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 24 of 25 9/3/2008
If the savings were to be calculated based on the last actual purchase of Diesel Fuel and that
price was assumed constant for 20 years they would be calculated at $744,000 per year or a total
of $14.880M and the benefit cost ratio would be over 3.6. If the cost of diesel continued to
escalate, that ratio would do the same.
Some detail of the economic benefits is also outlined in Section 2 above.
The following bullets identify several key PUBLIC BENEFITS that this project will bring to Alaska in
general, the Bering Straits region, and the community in Nome:
Local Jobs for Project Construction: (3 major local (Anchorage) consultants contracts for project
design phase) (major local contractor (Anchorage) for construction activities) (4 local contracts
(Nome Companies)for trucking, loading, tower assembly, electrical) (construction jobs up to 30
Full Time people at once for several weeks on site)
Revenue for local energy production stays in local economy instead of leaving local economy to
imported fuel. Project helps lower energy price for residents. Profits from project are distributed
to many local residents who are then more able to pay their energy costs. Percentage of profits
dedicated to other village renewable energy projects.
O&M Employment (1+ ongoing technicians) Local O&M presence creates lasting employment in a
highly skilled new technology job opportunity.
Expansion of Projects to Other Villages (more local technicians, more local benefits in region)
(more diesel fuel savings in region) (more project reliability in villages based on Nome O&M
centralized support)
Creation of Nome Renewable Energy T echnician Training Center – Training Facility to Provide
Skilled People for New Job Opportunities and Growth of Wind Industry.
Reduced cost of energy to local businesses at critical time – increases local economy and
encourages growth vs. increased energy costs depress economy and discourage even staying in
business in rural locations.
Increased sustainability for decreased dependence on imported diesel fuel for energy production.
Less risk of running out of energy “when the tank is low” with more locally installed wind
generation.
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
The funds requested are $4.126M with a 20% matching fund from Bering Straits Native Corporation and
Sitnasuak Native Corporation conjointly through Banner Wind LLC, the project Compan y. The 20%
match funds total $1.031M. The estimated total cost of the project is thus 5.157M.
See Detailed Budget in Exhibits: 6_Schedule, Budget, Cost, Photos: WCE Budget Breakdown.
Also See GrantBudget Document BANNER WIND PROJECT.xls in Folder 6 as requested.
Also see section 2.3 for a budget overview analysis and description.
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 25 of 25 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
Folder 4 Management Resume
B. Cost Worksheet per application form Section 4.4.4
Folder 6 Grant and Budget Forms
Grant Budget Form per application form Section 6.
Folder 6 Grants and Budget Forms
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. BANNER WIND NEAL FOSTER LETTER OF
AUTHORITY
F. CERTIFICATION
The undersigned certifies that this application for a renewable energy grant is truthful
and correct, and that the applicant is in compliance w ith, and will continue to comply
with, all federal and state laws including existing credit and federal tax obligations.
Print Name Neal Foster
Signature
Title President
Date 11/03/08