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St. George Wind Turbine Into A Diesel Power Generation System Project App
Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 1 of 16 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 16 9/3/2008 SECTION 1 – APPLICANT INFORMATION Name (Name of utility, IPP, or government entity submitting proposal) Type of Entity: City of St. George – St. George Municipal Electric Utility Mailing Address P.O. Box 929 Physical Address 100 Waterfront Street Telephone 907.859.2263 or 907.240.0950 Fax 907.859.2212 Email mayormax@yahoo.com Point of Contact information: Name Everette Anderson Title Business Development/Corporate Relations Specialist Mailing Address 5470 Shilshole Ave. NW, Suite 430 Telephone 206.782.1776 Fax 206.782.1721 Email eanderson@apicda.com 1.2 APPLICANT MINIMUM REQUIREMENTS Please check as appropriate. If you do not to meet the minimum applicant requirements, your application will be rejected. 1.2.1 As an Applicant, we are: (put an X in the appropriate box) X An electric utility holding a certificate of public convenience and necessity under AS 42.05, or 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 AEA 09-004 Grant Application Page 3 of 16 9/3/2008 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 project includes the integration of a high penetration wind turbine into a diesel power generation system; this includes Site Assessment, Design and Procurement, and Construction. 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 City of St. George operates a traditional diesel power plant which currently uses multiple diesel fueled engine generators to supply all required electric power to the community of St. George Island. With fuel and fuel handling cost now at historically high levels, the community, through their partner APICDA, seeks technology alternatives to provide long term fuel-savings impact. As wind/diesel technology has been proven viable in a variety of remote applications in Alaska and internationally, APICDA has allocated resources to determine if a wind retrofit at St. George can provide a meaningful, cost effective benefit. The City of St. George, APICDA and TDX Power are all involved in delivering a high penetration wind diesel hybrid project for the community. 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 total cost for this project is $3,000,000. APICDA has secured a $1,000,000 grant from the Denali Commission on behalf of the City of St. George, the City of St. George offers $500,000 cash and $20,000 in in-kind personnel or equipment usage, and the City requests $1,500,000 with this application to the Renewable Energy Fund. 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 benefits to the community are significant. Once the wind turbine has been integrated into the system, preliminary findings indicate the following may occur: • Annual turbine production = 1,340,200 kilowatt hours • Annual turbine run time = 7,644 hours (87.3% of year) • Annual “excess” turbine production for heating use = 364,220 kilowatt hours • Annual fuel savings = 74,509 gallons • Assuming a fuel price of $6.50/gallon, total annual fuel savings would be $484,309 • Annual heating fuel savings = TBD • Total annual fuel savings in percentage = 63.5% Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 4 of 16 9/3/2008 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.) $3,000,000 2.5.2 Grant Funds Requested in this application. $1,500,000 2.5.3 Other Funds to be provided (Project match) $1,500,000 2.5.4 Total Grant Costs (sum of 2.5.2 and 2.5.3) $3,000,000 2.5.5 Estimated Benefit (Savings) $ 484,309 (annually) 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.) $ 484,309 the whole community benefits from fuel savings 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. TDX Power will use its own personnel to manage and implement virtually every aspect of the proposed St. George project scope in concert with the City of St. George and APICDA’s management team. TDX Powers’ management team has a long record of power industry accomplishment in Alaska, the lower 48 and internationally. TDX Power’s president, Bruce Levy, is a 28 year veteran of regulated and non regulated power project development, finance, and operations. A renewable and fossil technology and economics expert, he has implemented over 50 energy projects worldwide, including 12 wind farms in the U.S., Mexico and Europe. Levy was the designer of the Saint Paul project and TDX Power’s first employee. He is also a member of TDX Power’s board of directors. Nick Goodman, CEO, manages TDX Power, its subsidiaries and its operations on a daily basis. With 10 years experience in wind, hydro and fossil generation development, and facilities management, Goodman is a well known participant in the Alaska power markets and a featured energy conference speaker. He is TDX Power’s primary representative in its associations with the Company’s customers, suppliers, banks, auditors, regulatory agencies and energy institutions such as the US Department Of Energy (USDOE), the Alaska Industrial Export and Development Authority (AIDEA), AEA, the Alaska Rural Electric Cooperative Association (ARECA), and the Alaska Department of Environmental Conservation (ADEC). The Company’s chief operations officer, John Lyons, served 20 years as the Alaska Village Electric Cooperative’s operation’s manager prior to joining TDX. He has designed, built and managed the operations of over 100 energy plants in remote Alaska. As well as the primary operations manager of TDX Power’s regulated electric utilities, Lyons is directly responsible for the operations and high availability record of the Saint Paul wind/diesel facility. He will play a key and hands-on role in the implementation of the wind project at St. George. Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 5 of 16 9/3/2008 TDX Power’s chief design engineer, William Scott, provides the detailed engineering and modeling associated with all of the Company’s utilities, projects and consulting contracts. He is a Registered Professional Engineer with 35 years experience in power generation, and an acknowledged authority in renewable as well as fossil fueled reciprocating and rotating prime mover technology and thermodynamic cycles. 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 I – Site Assessment – 2 months; November - December 2008 Phase II – Design and Procurement - 5 months; December – April, 2008/09 Phase III – Construction - 3 months; May – July 2009 3.3 Project Milestones Define key tasks and decision points in your project and a schedule for achieving them. Key tasks and decision points will be defined by work done and completed in the three phases as described in 3.2 Project Schedule. Timelines may be impacted by weather, travel or other unforeseen events. Regardless, all efforts will be made to adhere to the project schedule closely. 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. Key personnel and contractors include: Bruce Levy, President TDX Power Nick Goodman, CEO TDX Power John Lyons, COO TDX Power William Scott, Chief Design Engineer TDX Power BCL & Associates, Design/Construction/Supervision Halus Power Systems, Turbine remanufacturer Connie Fredenberg, Special Projects Manager TDX Power Max Malavansky, City Administrator City of St. George Everette Anderson, Business Development/Corporate Relations APICDA Equipment used for this project will primarily be on island equipment owned by the City of St. George. Additional equipment, such as a crane, will be needed to appropriately maneuver the turbine and tower to its final installation location. Any additional pieces of machinery will need to be transported to the community. TDX Power and APICDA will rely quite a bit on local resources, whether it is labor, hardware, heavy equipment, lodging, or other services – the community will be an integral part of the success and delivery of this project. Furthermore, TDX Power has worked with the aforementioned design, construction, supervision and remanufacturing services organizations on similar projects in Alaska. Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 6 of 16 9/3/2008 3.5 Project Communications Discuss how you plan to monitor the project and keep the Authority informed of the status. This project will be monitored on a frequent basis through phone conversations and/or email correspondence. Monitoring parties will include TDX Power, the City of St. George, APICDA, and the Alaska Energy Authority The success of this project depends on open communication with all parties involved. 3.6 Project Risk Discuss potential problems and how you would address them. Potential risks that we experience could be attributed to getting equipment, labor, and/or materials in and out of St. George in a timely manner primarily due to weather conditions. If that does occur, we will ensure that we respond in a timely and safe manner to get the project back on its appropriate timeline. This project has brought together very qualified, thorough and experienced team members who have worked in identical situations to deliver very similar renewable energy power systems. With this experience come demonstrated methods of responding to difficult situations including minimizing risk in remote project sites. 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. The St. George wind/diesel high penetration project will consist of three phases: Phase I – Site Assessment, Phase II – Design and Procurement, and Phase III – Construction. In general, we anticipate starting this Phase I of this project in November, 2008 with a final installation scheduled for mid-summer 2009. The following assumptions will apply: 1) the 250 kilowatt Vestas V27 power curve, at a no higher than 225 kilowatt gross output level, which is an extremely conservative methodology, 2) the St. George location wind speed is as indicated on the AEA web site, and 3) One Caterpillar 3456 engine generator set with one Cummins in standby. Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 7 of 16 9/3/2008 With these assumptions it has been determined that the following may occur: • Annual turbine production = 1,340,200 kilowatt hours • Annual turbine run time = 7,644 hours (87.3% of year) • Annual “excess” turbine production for heating use = 364,220 kilowatt hours • Annual fuel savings = 74,509 gallons • Assuming a fuel price of $6.50/gallon (as of Oct. 1, 2008), total annual fuel savings would be $484,309 • Annual heating fuel savings = TBD • Total annual fuel savings in percentage = 63.5% The available wind resource on St. George is the most likely renewable energy option for the community of St. George. Preliminary studies have been conducted for wave and tidal energy around the island of St. George. Wave and tidal energy is still a new technology and delivery of power to the community using this technology is many years out with very high capital costs involved. The high penetration wind diesel installation is capable of delivering low cost energy to its consumers in a relatively short time period. The wind resource is clean, displaces diesel fuel and provides a long term reliable energy resource for generations to come. 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 primary diesel generator is a series 60 Detroit generator rated at 350 Kw. Generator’s 2 and 3 are identical Caterpillar 3406 rated at 175 Kw each. Generator 4 is a series 60 Detroit rated at 200 Kw; for a total generating capacity of 900 Kw. The older generators are the two 175 Kw generators. The newest generator is the #4 generator, followed by the #1 generator. The newer generators have electronic fuel injectors, making them more fuel efficient. 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. Energy resources on St. George island consist of diesel fuel power generation and diesel fuel powered furnaces to heat residential and commercial buildings. No other alternative energy resources are employed on island. The project will have a significant impact in the near term as the cost to operate the utility will stabilize and then decrease along with the need for diesel fuel. In the near future the cost per kilowatt hour to the consumer should decrease as well. 4.2.3 Existing Energy Market Discuss existing energy use and its market. Discuss impacts your project may have on energy customers. Residential customers in St. George had AMPY Pre-Pay meters installed in their homes in 2006. This has been beneficial to both consumers and the utility. Within 24 hrs. of installation the power plant operator noted that the community load had dropped nearly 25%. The load did go back up again, but never to the level of pre-installation. Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 8 of 16 9/3/2008 Commercial customers did not receive the pre-pay meters. Conservation is more difficult without the constant reminder of your money running backwards and commercial customers suffer the most from high rates with no state PCE subsidy to assist them. The impacts from this high penetration wind-diesel project will be significant in terms of diesel fuel displaced and ultimately in the cost per kilowatt hour reduction to all consumers, but especially to the commercial sectors of the community. The Aleutian Pribilof Island Community Development Association will be constructing a seafood processing facility on St. George. The processing facility will be hugely expensive, potentially exceeding six million dollars. Not only will the facility be expensive to construct, it too will be a large consumer of electricity. The viability of any business operation is heavily dependent on the delivery of low cost energy. Operating a business in rural Alaska, let alone a seafood processing facility is operationally expensive. Low cost energy is critical to the successful operation of this facility. APICDA will be looking to construct a tourism lodge on the island as well within the next couple of years. The lodge will require electricity as well as the potential for waste heat delivery to the structure and its outlying buildings. 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 To achieve maximum fuel savings benefit, TDX proposes a high penetration design for the St. George application. As proven by TDX Power’s Saint Paul Island project for the past seven years, the high penetration design functions with utility grade reliability and efficiency when properly deployed and maintained. The components of high penetration systems are now fairly straight forward and industry accepted, including turbines, microprocessor based sensors for simultaneously monitored instantaneous load conditions and wind speed, and specialized switchgear to allow the engine generators and wind turbines to smoothly function singly or together. The proposed St. George high penetration facility will operate in diesel-only mode during periods of no wind, and in wind-diesel parallel mode during moderate winds and in wind turbine only mode during periods of high, consistent wind speed periods. For disposition of excess energy during higher high wind conditions and low facility electric demand, a hot water storage system is included in the basic facility design at both of the proposed new facilities on island (Lodge and Fish Processing). This storage functions as a load shedding “sink” for excess-to-load wind energy as it occurs in higher wind conditions. Typically heated to the 170 to 190 degree F range, as TDX operates in Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 9 of 16 9/3/2008 Saint Paul, the turbine heated fluid can then be pumped through a radiator network at the point of use, which will reduce and at times eliminate furnace fuel. The Phase I investigations will confirm the possible requirement for this energy shedding configuration. To apply this design in St. George, TDX will use a fully reconditioned Vestas V27 wind turbine, a new Caterpillar 3456 engine generator set, and one of the existing Detroit Diesel engines currently in service as back up. The 250 kilowatt Vestas turbine was originally manufactured and deployed in 1994. TDX owns this machine and has already begun to completely rebuild and remanufacture the unit with new components at its vendor’s shop in California. Included in the re-manufacture process is a complete overhaul of the gearbox with new gears and pinions, a generator rewind which includes a new motor and new wiring, rebuilt yaw gears with new components, and a new clutch assembly with new linings and new bearings. Both the design life and useful life of the turbine will match the original Vestas specifications ranging from 15 to 25 years for different components. The original Vestas warranty provided for parts and labor coverage (without travel) for one year. TDX will provide and match this original factory warranty for the St. George application. The turbine’s original tubular, non lattice tower will be sandblasted and repainted with marine grade paint with cathodic protection. This coating system was originally designed for the extreme conditions associated with offshore wind turbine applications in Europe. The blades will be sandblasted and recoated with an epoxy coating, and an epoxy primer and coating with black Teflon paint to shed ice. The design and useful life of the tower will remain at 20+ years, as originally specified by Vestas in 1994. The original design life for V27 turbine blades varies by location. Colder, higher wind speed locations such as St. George decrease the expected design life. In discussions with Vestas and Halus, TDX’s turbine re-manufacturer, and based on TDX’s experience on Saint Paul Island, TDX believes the design life of the newly coated blades will match the design life originally provided by Vestas. For the conditions at St. George, this will likely be 15-20 years. TDX proposes replacement of the existing controls and switchgear in the St. George powerhouse. The switchgear cost estimate included in this proposal is based on TDX’s assumption and recommendation of paralleling gear in a five section line up. This equipment will contain circuit breakers and PLC based controls, a master control section and a section for feeder control. The system will be designed to control from a local touch screen and capable of remote operation via a standard WEB browser. These control details and requirements will be fully determined as part of the Phase II scope. The last and highly critical major component for the project involves the foundation. The Vestas V27 can be installed with one of four different foundation designs. These include: • The European standard foundation, which requires a 20 foot by 20 foot concrete slab, five feet deep. This design is typically deployed where deep excavation is cost prohibitive, but requires a large volume of concrete. • The tensionless foundation, which requires a 20 foot deep by 12 foot diameter cylindrical hole. Two rings, similar to culverts, are inserted into the hole and concrete is poured to fill the gap between the two rings. The space in the middle of the inner ring is filled with gravel and sand. Excavation to 20 feet can be difficult, but if possible, this is the preferred design for stability and cost, as much less concrete is required. Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 10 of 16 9/3/2008 • The rock anchor foundation, which involves driving large anchor bolts into pre drilled bedrock then securing the bolts with concrete slurry. This design can only be used in locations where the foundation is comprised of suitable bed rock. • The driven pile foundation, which entails driving piles to a depth predetermined by geotechnical analysis and core samples. This design is recommended for locations with weak foundation support such as loose or fractured rock surrounded by soft soils. As the optimum St. George foundation design is not yet determined, TDX based its proposal on the tensionless foundation. This is the design TDX has used on St. Paul Island, and the cost is roughly in the middle of the four options. During Phase I, TDX will drill test holes with a drill rig currently in Bethel. The resulting geotechnical analysis will dictate the type of foundation, at which time the budget will be refined. 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. Land is owned by the St. George Tanaq Corporation. The City is currently in discussions about having the land appraised and coming to terms with the St. George Tanaq Corporation about a fair market value offer for the land. The St. George Tanaq Corporation fully supports this project. We anticipate no problems. 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 FAA SHPO Department of Defense USFWS All of the above agencies were contacted during the wind resource monitoring project on St. George. At that time there were no concerns by FAA, SHPO, and DOD. USFWS was initially concerned about low flying Red-legged Kittiwakes in fog. Art Sowls, an agent for USFWS, was on island and consulted in the placement of the anemometer tower. An extensive monitoring project was conducted for two years. We have been assured that USFWS is confident the placement of the turbine will have no detrimental avian effects. SHPO and USFWS have given preliminary approval and have said written approval can be obtained upon securing funding for project development. 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 Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 11 of 16 9/3/2008 • Aviation considerations • Visual, aesthetics impacts • Identify and discuss other potential barriers As addressed in the permitting section, endangered species, habitat, archaeological and historical resources, land development constraints, and aviation consideration have been addressed with the proper agencies well in advance of this application. We do not believe there will be any telecommunications interference at the location. Visual and aesthetics were discussed at a Community Economic Forum prior to installing the anemometer tower. The community was, and continues to be, overwhelmingly in approval of a wind-diesel 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 Total project costs are anticipated to be $3,000,000. Requested grant funding is $1,500,000. Applicant will match with $480,000. With an additional $20,000 in-kind donated to the project. Other funding sources include $1,000,000 from the Denali Commission. Projected capital cost of the proposed project is $1,931,432. Projected development cost of the project is $155,714. 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 Anticipated O&M costs for the new facilities constructed are $30,000 for the first year. Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 12 of 16 9/3/2008 This includes a $7,500 parts inventory and extensive oversight and training of local personnel by TDX Power. Costs beyond the first year will depend upon the level of local capacity achieved, which will determine the level of involvement by TDX Power. It is assumed that TDX Power will remain a part of the O&M for the near future, but to a lesser degree each year. This amount will be included in the grant request. 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 Power will be purchased by local residents, commercial, governmental and other businesses located in the community. Governmental and businesses in the community consist of the USFWS, NOAA, Puffin Seafood processing facility, Summer Wind Lodge, the School, Health Clinic, local store and a few others. The electric rate in St. George is currently $.43/kWh for residential. Commercial customers pay $.65/kWh at the old fuel rate of $5.42/gallon. We anticipate keeping the rates at this level until an actual cost to produce power has been proven. The City anticipates a rate adjustment of 0.56 cents a kilowatt hour residential and 0.72 cents a kilowatt hour commercial based on the current fuel rate of $6.50 a gallon. 4.4.4 Cost Worksheet Complete the cost worksheet form which provides summary information that will be considered in evaluating the project. Included with this application. 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. TDX expects that reduction of engine run time will have generally commensurate and proportional effect on diesel powerhouse maintenance expense. At minimum, the run time reduction caused by the contribution of the wind energy component will extend the otherwise expected intervals for scheduled, preventative top and bottom end inspections and maintenance. O&M specific to the wind generation system, however, creates a new and critical category of operational responsibility and expense. TDX recommends a systematic preventative maintenance regime for the wind generators. A knowledgeable and conscientious technician should perform this. Although TDX is confident that the Vestas V27 is an advanced design capable of sustained duty in harsh environments, constant observation, basic care and the ability to react immediately to alarm conditions is mandatory. The key component of a successful maintenance program is human. TDX strongly suggests that individuals within the St. George labor force be identified to address this job scope. The person needs to be of sufficient health to be able to routinely climb the towers, but otherwise age or gender should make no difference. Experience in the power generation field or experience with sophisticated equipment should not be a factor. TDX Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 13 of 16 9/3/2008 believes the main ingredients required to create a capable plant operator are attitude and training. Based on preliminary discussions with the City of St. George and the sites existing plant operator, TDX feels confident that existing personnel can comfortably perform all maintenance and operations of the wind turbine with training provided by TDX in the post construction phase. Approximately three weeks of factory training and two weeks on site training will enable the trainee to begin functioning professionally. In TDX’s experience in similar climate conditions, gearbox failure is the most common cause of catastrophic turbine failure and unscheduled downtime. Again, based on our experience in St. Paul, TDX maintains a spare gearbox in inventory in Alaska, and is able to deploy this to St. George within days in the event a failure occurred. From such a beginning, based on TDX’s experience with similar situations, the operator will require between one and two years of periodic support, which in most cases can be provided by telephone, or from St. Paul island based technicians. Such ongoing contact increases operator confidence, improves system performance and pays long term dividends in lower costs and less unscheduled downtime. In addition to TDX, a variety of other experienced companies could provide these support services at minimal expense. Ideally, the wind plant operator would also be responsible for the entire hybrid plant, including its thermal component. In addition to training and support programs, TDX recommends an inventory of spare parts be maintained in St. George. Also, equipment manufacturers publish rigid service interval recommendations, and strict observance is the key to reliability. On site spares are vital, and the inventory contributes to the operator’s understanding of how equipment is actually being used. TDX suggests that the type and quantity of spares on-hand should target equipment that is either subject to high stress cycles or equipment that significantly contributes to the system’s peak performance and reliability. These target areas include: • Critical engine and control system spares • Engine control and master control cells • Distribution feeder cell spares • Wind turbine and ancillary control system spares • Thermal storage system spares Equipment failure is most likely to occur during initial start-up through approximately the first years’ operation. Repair, and most parts will be covered by manufacturer’s warranties in this timeframe and the spares inventory should be adjusted based on events, experience, and trends. Operations through the second and third year typically involve scheduled component change, which should follow the recommended protocol specified by the manufacturer. As is typical with virtually all new power plants, the most critical time is the fourth and fifth year of operation. During this prone-to-failure period the parts inventory should be thoughtfully adjusted to address general local experience and historical failure trends. The City of St. George and APICDA will fully comply with all the recommendations as proposed by TDX Power. 4.4.6 Analysis and Recommendations Provide information about the economic analysis and the proposed project. Discuss your Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 14 of 16 9/3/2008 recommendation for additional project development work. In addition to the important integration of wind into the diesel power plant facility, we do need to consider conservation, weatherization, and new energy technology management for the homes and businesses. Once the wind diesel hybrid system is operational, it will be just as critical to investigate what home owners and businesses can install in their respective structures to continue to reduce the cost of energy. For instance, integrating an electric furnace in line with existing diesel fuel fired furnaces would further reduce the need for diesel fuel but also utilize the lower cost electricity produced by the new wind turbine and fuel efficient diesel power generation system. The City of St. George will continue to evaluate homes and businesses and identify some creative energy efficiency solutions such as electric furnaces, in-floor heating systems, and hot water heating system via the wind turbine. 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 At the current fuel price of $6.50/gallon the estimated 74,509 gallons of diesel expected to be displaced is worth $484,309. Multiply that by the life expectancy of 20 yrs. for a total savings of $9,686,180 in fuel costs. It is optimistic to assume that the price of diesel will stay at or below $6.50 for the next 20 years, so the actual value of the 1,490,180 gallons of lifetime displaced fuel will likely be worth considerably more. The successful implementation of this high penetration wind-diesel system in St. George will benefit other communities in rural Alaska by setting an example of what can be done in a good wind regime. Decreasing fuel barge traffic will reduce the potential for fuel spills that could affect coastal communities and contaminate the food chain. Decreased diesel exhaust from less diesel generation will benefit Alaskans by reducing greenhouse gases that exacerbate climate change and reducing the emissions that increase asthma and aggravate other respiratory conditions. The current electric rate in St. George is $.50/kWh. The rate will remain the same until a new cost of producing power can be determined with historical data. If the turbine can produce 1,340,200 kWh annually with 364,220 of them expected to be used for thermal loads, the remaining 975,980 kWh would be valued at $487,990. There are no additional annual incentives, i.e. tax credits that will benefit this project. The Bonneville Foundation’s current price for green tags is $4.50/MW of energy produced annually. The St. George turbine is expected to produce 1,340.2 MW annually. The sale of these green tags will bring $6,030.90 in revenue to the City of St. BCL & Associates For the St. George turbine installation, TDX will use the services of its close affiliate, BCL & Associates of Palm Desert, California. BCL will assist TDX primarily in the areas of foundation design, foundation construction, and on-site turbine erection supervision. The Company’s principal, BC Lees, has over 25 years experience in wind turbine and wind farm construction as well as turbine O&M. Formerly head of California based Field Service, Inc., the wind industry’s largest field O&M provider, Lees has supervised the construction of over 1,500 wind energy machines in the US as well as Mexico, Costa Rica, Ireland and the United Kingdom. Over 100 of these have been done in conjunction with the TDX Power team. Since 1982, BCL has supplied turbine erection and total wind farm project construction supervision services to virtually every major wind energy project developer in the United States. The Company has installed machines ranging in size from 100 kilowatts to 2.5 megawatts, and has erected machines in virtually every climate and from virtually every major manufacturer, including Bonus, Nordex, Nordtank, NEG Micon, Mitsubishi, WindMaster, Vestas and GE. In 1989, BC Lees received the first “Windsmith of the Year” award from the American Wind Energy Association (AWEA), the trade group’s highest recognition for technical services providers. Lees was a founding officer of the Desert Wind Energy Association and is a member of AWEA’s Legislative Activities committee as well as a long term member of the association’s Technical Committee. Halus Power Systems Press Releases 7 Oct, 2008 Halus Power Systems is a renewable energy products and services company. We help people produce electricity that is both environmentally sound and economical. We are North America’s leading supplier of remanufactured wind turbines and have supplied projects with the largest and widest capacity range of remanufactured wind turbines available anywhere. We stock dozens of wind turbines from 65 kW to 500 kW at our 40,000 square foot facility in Hayward, California. As the wind industry continues to manufacture larger units and have discontinued production of previous models, remanufactured wind turbines offer the market sizes no longer provided by the world’s major manufacturers. Rebuilt wind turbines are suitable for projects requiring under 5 MW of generation. We specialize in remanufacturing wind turbines originally produced by Vestas, currently the world’s leading wind turbine manufacturer. Our turbines feature options never before installed in North America , such as tubular towers for Vestas turbines under 150 kW. Our wide range of choices gives us the flexibility to accommodate varied requirements. With a satisfied client list from California to New York and even remote locations in Alaska, we have developed the expertise required to supply most locations. Having converted and supplied the industry’s first wind turbine from 50Hz to 60Hz several years ago, we also have the necessary experience to supply international projects with grid voltage and frequency environments other than those used in North America. Thank you for visiting this site. We look forward to serving your renewable energy needs. Home | Wind Turbines | Solar Electricity | Wind Resource Assessment | Company Information Send questions or comments about this web site to the webmaster. Copyright © 2008 Halus Power Systems. http://www.halus.com/default.htm10/7/2008 3:54:01 PM Halus Power Systems Press Releases 7 Oct, 2008 Halus Power Systems Thank you for taking the time to visit the Halus Power Systems web site. Our goal has been to do whatever possible within our areas of expertise to serve those wanting to generate clean electricity using renewable sources. While we have always been a renewable energy products and services provider since our inception more than 6 years ago, Halus has expanded supply offerings over the years and today we are the industry's leading provider of remanufactured commercial wind turbines. Our very first transaction back in 2000 was the rental of a modest 10-meter wind testing tower to an Oregon farmer looking to evaluate his wind potential for a possible wind turbine installation. During the first couple years in business we designed, fabricated, and supplied many meteorological testing towers for wind assessment. We expanded supply options in 2003 to include remanufactured wind turbines, and in 2004 to also include solar photovoltaic systems. We look forward to 2007 and will continue to do our best to help with increasing the amount of energy people generate (and consume) from renewable sources. The company name was inspired by one of my favorite high school classes, Greek Mythology, where we read about Helios, god of the sun; and Aeolus, god of the wind. They are not only symbols of fantastic stories, but also of respect and awe for the earth. Halus Power Systems will always respect the environment. The gods are watching! Please contact me with any questions or comments. Sincerely, Louis A. Rigaud Founder Halus Power Systems 25352B Cypress Avenue Hayward, CA 94544 Tel: (510) 780-0591 Fax: (510) 780-0534 Email: louis@halus.com Home | Wind Turbines | Solar Electricity | Wind Resource Assessment | Company Information Send questions or comments about this web site to the webmaster. Copyright © 2008 Halus Power Systems. http://www.halus.com/companyinformation/about/abouthalus.htm10/7/2008 3:54:26 PM Renewable Energy Fund Application Cost Worksheet Please note that some fields might not be applicable for all technologies or all project phases. Level of information detail varies according to phase requirements. 1. Renewable Energy Source The Applicant should demonstrate that the renewable energy resource is available on a sustainable basis. Annual average resource availability. Wind: AEA report Wind Power Class Rating = 7 Unit depends on project type (e.g. windspeed, hydropower output, biomass fuel) 2. Existing Energy Generation a) Basic configuration (if system is part of the Railbelt 1 grid, leave this section blank) i. Number of generators/boilers/other 4 Diesel units ii. Rated capacity of generators/boilers/other #1 - 150kw, #2-256 kW; #3-256 kW, #4-240kw iii. Generator/boilers/other type None iv. Age of generators/boilers/other #1 May 1996; #2 October 1993; #3 October 1993; #4 December 2006 v. Efficiency of generators/boilers/other Unit 1 burns 10.3 gpm, Unit 2 burns 16.2 gpm, Unit 3 burns 16.2 gpm, Unit 4 burns 17.9 gpm b) Annual O&M cost (if system is part of the Railbelt grid, leave this section blank) i. Annual O&M cost for labor $20,000 ii. Annual O&M cost for non-labor $10,000 c) Annual electricity production and fuel usage (fill in as applicable) (if system is part of the Railbelt grid, leave this section blank) i. Electricity [kWh] 1,350,000 (2004 est.) 1,507,300 (est. with fish processing and Lodge) ii. Fuel usage Diesel [gal] 86,800 gallons (2004 estimate, based on % of total fuel consumption used for electric generation in comparison with community of Sand Point) 117,300 gallons (est. future with fish processing and Lodge) Other 10,300 gallons, (2004 estimate, based on % of total fuel consumption used for auto and other in comparison with community of Sand Point) iii. Peak Load 450 kW (est. future with new load including fish processing and Lodge) 1 The Railbelt grid connects all customers of Chugach Electric Association, Homer Electric Association, Golden Valley Electric Association, the City of Seward Electric Department, Matanuska Electric Association and Anchorage Municipal Light and Power. RFA AEA 09-004 Application Cost Worksheet revised 9/26/08 Page 1 Renewable Energy Fund iv. Average Load 115 kW (est. future with new load including fish processing and Lodge) v. Minimum Load 80 kW (est. future with new load including fish processing and Lodge) vi. Efficiency 2004 estimate ~15.3 kWh / gal with existing engines at higher load. Est. future ~12.8 kWh / gal with upgraded power plant and including fish processing and Lodge operating art lower loads. vii. Future trends Stable with expectation of a Lodge and Seafood processing plant; Lodge load assumed to have annual use of 67,500 kWh. Seafood Processing load assumed to have annual use of 432,000 kWh (average efficiency estimate similar to like seafood processing facility) d) Annual heating fuel usage (fill in as applicable) i. Diesel [gal or MMBtu] 2004 est. 53,300 gallons ii. Electricity [kWh] Unknown iii. Propane [gal or MMBtu] N/A iv. Coal [tons or MMBtu] N/A v. Wood [cords, green tons, dry tons] N/A vi. Other 3. Proposed System Design a) Installed capacity 225 kW wind turbine b) Annual renewable electricity generation i. Diesel [gal or MMBtu] ii. Electricity [kWh] 1,340,200 kWh: Expected average annual wind turbine production iii. Propane [gal or MMBtu] N/A iv. Coal [tons or MMBtu] N/A v. Wood [cords, green tons, dry tons] N/A vi. Other 4. Project Cost a) Total capital cost of new system $2,087,146 b) Development cost $912,854 c) Annual O&M cost of new system $30,000 d) Annual fuel cost Annual fuel savings = 74,509 gallons; Assuming a fuel price of $6.50/gallon (as of Oct. 1, 2008), total annual fuel savings would be $484,300 RFA AEA 09-004 Application Cost Worksheet revised 9/26/08 Page 2 Renewable Energy Fund 5. Project Benefits a) Amount of fuel displaced for i. Electricity 74,509 gallons ii. Heat 364,000 kWh (Potential to displace from excess wind generation.) 2,050 mmBtu (Potential to displace from Diesel Engine jacket water.) iii. Transportation N/A b) Price of displaced fuel $6.50/gallon c) Other economic benefits $484,300 annual savings from reduction of fuel for electrical generation only. Additional benefit from excess wind generation and Diesel jacket cooling water are not included. d) Amount of Alaska public benefits 6. Power Purchase/Sales Price a) Price for power purchase/sale Current rate is $.56 cents a kilowatt hour residential and $.72 cents a kilowatt hour for commercial. 7. Project Analysis a) Basic Economic Analysis Project benefit/cost ratio 484,300/3,000,000 = .16 Payback 3,000,000/484,300 = 6.19 years RFA AEA 09-004 Application Cost Worksheet revised 9/26/08 Page 3 Alaska Energy Authority ‐ Renewable Energy FundBUDGET INFORMATIONBUDGET SUMMARY: St. George High Penetration Wind/Diesel HybridMilestone or Task Federal Funds State FundsLocal Match Funds (Cash)Local Match Funds (In‐Kind)Other FundsTOTALS1 ‐ Site Assessment $49,544.00 $49,544.00 $112,500.00 $5,000.00 $216,588.002 ‐ Design and Procurement $571,038.00 $1,271,038.00 $265,000.00 $5,000.00 $2,112,076.003 ‐ Construction $379,418.00 $179,418.00 $102,500.00 $10,000.00$671,336.00TOTAL $1,000,000.00 $1,500,000.00 $480,000.005$0.006$0.00$3,000,000.00Milestone # or Task #BUDGET CATAGORIES:1 23456TOTALSDirect Labor and Benefits $5,000.00 $5,000.00 $10,000.00 $20,000.00Travel, Meals, or Per Diem $4,248.00 $5,872.00 $10,120.00Equipment $51,000.00 $1,655,432.00 $225,500.00 $1,931,932.00Supplies $28,125.00 $50,000.00 $132,625.00 $210,750.00Contractual Services $76,965.00 $73,749.00 $150,714.00Construction Services $219,383.00 $237,844.00 $457,227.00Other Direct Costs $51,250.00$108,512.00$59,495.00$219,257.00TOTAL DIRECT CHARGES $216,588.00 $2,112,076.00 $671,336.00 $0.00 $0.00 $0.00 $3,000,000.00RFA AEA09-004 Budget Form APICPA Haginaa Kidul . H~ping to Grow Aleutian Pribilof Island Community Development Association 234 Gold Street· Juneau, Alaska 99801 • (907) 586-0161 • Fax: (907) 586-0165 509 West 3rd Avenue, Suite 107' Anchorage, Alaska 99501 • (907) 929-5273 • Fax: (907) 929-5275-. - October 8, 2008 Alaska Energy Authority Attn: Mr. Butch White 813 West Northern Lights Blvd Anchorage, AK 99503 Dear Mr. White: APICDA (Aleutian Pribilof Island Community Development Association) would like to state their support for the development and implementation of a wind energy development project in St. George, Alaska. APICDA is a 501 (c) (3) non-profit organization incorporated in the State of Alaska. St. George is one of six communities that we serve. APICDA is carrying out its corporate mission by assisting St. George to enhance its long-term social and economic viability through economic development opportunities. Early next month APICDA will go out to bid for construction of a new shoreside processing facility in St. George. Total construction costs may exceed $6 million, all of which will be funded by APICDA less a $2 million grant from the United States Economic Development Administration. Construction is scheduled for next summer. Additionally, APICDA will continue to evaluate the viability of constructing a world class lodge on the island. These projects represent very significant expenditures by APICDA and display our commitment to the community of St. George. The existing exorbitant cost of power,however,threatens the economic viability of these projects. St. George residents wish to live in an affordable environment and not be forced out of their community because the cost of energy to heat and light their homes is so distressingly disproportional to the rest of Alaska and the United States. In addition, a critical component to ensuring that businesses succeed in extremely remote environments is directly related to the accessibility oflow-cost energy. With the support and expertise of the AIDEA (Alaska Industrial Development and Export Authority) through the Alaska Energy Authority's wind program, wind data collected on the island has verified the presence of a superior wind resource. The AEA recognizes St. Mr. Butch White, AEA October 8, 2008 Page 2 George's pro-active approach to identifying alternative sources of energy and has stated their intent to support St. George in this extremely important initiative. Subsequent steps taken by the City of St. George and APIA (Aleutian Pribilof Island Association), such as commissioning a feasibility study which validated the viability and cost saving of wind energy on St. George, underscore their genuine desire to address high energy costs for the community and residents. Wind development in St. George will result in high diesel displacement for the community's wholly diesel generated power supply, with an estimated 74,509 gallons of fuel saved annually -equating to a fuel savings of $484,309. With exorbitantly high and continued rising diesel fuel costs, a wind system will significantly benefit the community by reducing the cost of energy. Sincerely," {jJ;5c..,. ~ ~~~r'CEO' ~ st. George Wind-Diesel High Penetration Project APICDA-LOS ,1gubtic Mtít ítíeg @o m tto :vattt f ^- ,.rfaft- .-7) l.Ll t dsÈbs à\'-- .-L^ -'L' [,efüficute lþuütic @snbcníenæ nnù freteßßity / Hautng found th.at the grantee of thß certificate is fit, usitling and able to protlicle the utititg seroices applied tor and that such seruices are required for the contsenience anil necessitg of the public, the Alaska Public Utilities Commisnon, pursuant to the authoritg tsesteil in it bg ãS |Z.OS, herebg iss¿es this certificate of Public conuenicnce and Necessitg to CITY OF ,ST. GEOR,GE outhorizing it to operate a public utilitg, as d.eÍtned, by AS 42.0ı. 7Ol (2') G)* fo" the purpose o! turnkhing ELECTRIC S ERV ICE Thís Certt'ficate is issued uncler, and subject to, the proußions of .4S 42.05 ønd, all rules,regulotiols ønd orders from time to time promulgated bg the Commissíon gouerníng the rotes, chorges, sensice1, tacilitíes, and practices of utilíty operations of the kind authorized herein. The specílic nature, scope, terms, condLtíons and li¡nitatíons of the authority grantecl bg úhis Certificate, os amended to date, are set forth inthe appendiæ hereto andinthe jotlou:ing orãer@l ol the Cotnmission ushích, bg this reJerence, are incorporated in and made o part hereo! as though tully set torth herei.n. Docket No. Detc of Ordcr U-86-6ı (/) Nouember 3, 1988 (Chronoto.gA- eTLd sequice. g,recL d,escriptío,¡'t, shoutn'on øttaclîe-d Append,ir A) IN WITNESS T¡IEREOF, the undersigned members of the Cotnmission haue eæecuted this Certificate of Pubtic Conuenience anil Necessitg ot Anchorage, Alaska on this gth dag of November lggg 0t *See Appendix A $luøha Jfluhltc tïtd*wø 6smnÍss|orn APPENDIX A Certificate of public Convenience and Necessity No. 4L0 granted to CITY OF ST. GEORGE DESCRTPTION OF SERVTCE T4l_S Rl_29Vü T41S Rl_3 ovt T42S R]-29W T42S Rl_3ovf (411 the above with AREA: Sections: All Sections: Sections: Sections: reference to the Seward Meridian) All All All *As 42-o5.7o1- (2) (4) $/as renumbered and reorganized toarphabetize the defined terms, in r-983. rt i; novrAS 42.O5.72o (4) (A) . CHRONOLOGY: Original Certificate granted 1L/3/BB (U-86-6s(1) ) (APUC 4!O, App. A, page t- of 1, Issued November g, 19gB)