HomeMy WebLinkAboutInstallation of High Efficiency Low Emissions Wood Boilers Lake and Peninsula Borough App
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 1 of 15 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 15 9/3/2008
SECTION 1 – APPLICANT INFORMATION
Name (Name of utility, IPP, or government entity submitting proposal)
Lake and Peninsula Borough
Type of Entity:
Borough Government
Mailing Address
PO Box 495, King Salmon, AK 99613
Physical Address
Same
Telephone
907.246.3421
Fax
907.246.6602
Email
ljcotten@gci.net
1.1 APPLICANT POINT OF CONTACT
Name
Lamar Cotten
Title
Borough Manager
Mailing Address
PO Box 495, King Salmon, AK 99613
Telephone
907.301.8737
Fax
907.272.5076
Email
ljcotten@gci.net
1.2 APPLICANT MINIMUM REQUIREMENTS
Please check as appropriate. If you do not to meet the minimum applicant requirements,
your application will be rejected.
1.2.1 As an Applicant, we are: (put an X in the appropriate box)
An electric utility holding a certificate of public convenience and necessity under AS
42.05, or
An independent power producer, or
X A local government, or
A governmental entity (which includes tribal councils and housing authorities);
Yes
or
No
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
or
No
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
or
No
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 15 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.
Final Design and Permitting
2.2 PROJECT DESCRIPTION
Provide a one paragraph description of your project. At a minimum include the project location,
communities to be served, and who will be involved in the grant project.
The Lake and Peninsula Borough seeks funding for design and permitting to install High
Efficiency Low Emissions (HELE) wood boilers in five communities in the Lake and Peninsula
Borough providing heat to the local school and adjacent teacher housing. The communities to
be considered are Pedro Bay, Newhalen/Iliamna, Nondalton, Kokhanok and Port Alsworth.
The schools in these communities served 225 children in the 07-08 school year.
All of these communities are in heavily wooded areas and with the exception of Port Alsworth
they are have few or no land use issue that need to be resolved. The wood resource near Port
Alsworth resides in Federal Park land and ANCSA land, the Borough will utilize area experts
to resolve any impediments to sustainable wood harvest.
An initial feasibility indicates that these communities could displace tens of thousands of
gallons of diesel currently used to heat the facilities. Actual fuel consumption for school year
07/08 was used in the analysis. A simple payback analysis offered periods of 1.6 to 2.9 years.
The Lake and Peninsula Borough will work with the school district and a HELE unit vendor to
complete the project. Contract employee, Bob Loeffler will work with local authorities to
ensure that any land issues related to a sustainable wood fuel harvest are resolved.
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.
In this phase the Borough is seeking $77,000 in AEA Renewable Grant funds to hire a
Mechanical/Heating System Engineer to conduct a reconnaissance site visit of five to six
Borough schools and design a supplemental wood heat system. The wood heat system would
consist of a high efficiency low emissions wood boiler located in an exterior shed. It would be
to be piped into existing systems and would be designed so provide supplemental wood heat
for roughly 32 weeks a year.
Based on our reconnaissance study, the total installed and interconnect cost of the
supplemental wood heat boilers appears to be on the order of $160,000 to $180,000 per
school.
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 4 of 15 9/3/2008
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 supplemental wood head will allow the schools to replace $60 to $70 per MMBtu oil heat
with $20 per MMBtu wood heat.
This results in an annual fuel savings (net of increased O&M associated with wood heat) that
ranges from $7000 for small schools that already incorporate secondary heat recovery from
local diesel gen sets to $40,000 for large schools.
See Biomass Screening in Attachment E for more detail.
2.5 PROJECT COST AND BENEFIT SUMARY
Include a summary of your project’s total costs and benefits below.
2.5.1 Total Project Cost
(Including estimates through construction.)
$1,265,000
2.5.2 Grant Funds Requested in this application. $77,000
2.5.3 Other Funds to be provided (Project match) $18,000
2.5.4 Total Grant Costs (sum of 2.5.2 and 2.5.3) $95,000
2.5.5 Estimated Benefit (Savings) $122,151
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.)
$ 122,151 net annual
savings to L&P Schools
See Cost Worksheet Attachment B
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 5 of 15 9/3/2008
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.
Lamar Cotten, Borough Manager, will manage the project, working in close coordination with
Bob Loeffler, Borough Energy Planner, and the school superintendent in the Lake and Peninsula
Borough. Wood boilers require a relatively small up front capital investment, creating additional
costs associated with administration and management of the design stage can destroy the
feasibility of the project.
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.)
Site visits and design – first & second quarter 2009
Secure Funding for Construction Project – first & second quarter 2009
Issue RFP for Procurement, Installation and Testing – 3rd quarter 2009
Construction – 4th quarter 2009 – 3rd quarter 2010
See Project Schedule Attachment D
3.3 Project Milestones
Define key tasks and decision points in your project and a schedule for achieving them.
Site visits and design – first & second quarter 2009
Secure Funding for Construction Project – first & second quarter 2009
Issue RFP for Procurement, Installation and Testing – 3rd quarter 2009
Construction – 4th quarter 2009 – 3rd quarter 2010
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.
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 6 of 15 9/3/2008
The Lake and Peninsula Borough has a five full time employee positions and three contract
employees. This project will rely on time and expertise from Borough staff - Lamar Cotten, Bob
Loeffler and Rosie Fay and from a HELE unit vendor, potentially Alaska Heat Technologies. The
Borough has not chosen a vendor for major equipment purchases. During the next phase of the
project the Borough will evaluate vendors based on the reliability of their products and services
paying special attention to how they have performed in remote Alaska locations.
The Borough will work in collaboration with Lake and Peninsula school superintendent John
Owens. The school district has indicated interest in exploring the wood opportunities available
to assist in offsetting the high cost of heating their buildings.
See resumes for Lamar Cotten and Bob Loeffler in attachment A
3.5 Project Communications
Discuss how you plan to monitor the project and keep the Authority informed of the status.
The Borough Manager will manage communication on the project, including benchmark memos
to updates to the Authority. Any consultants or vendors brought into the project will provide the
Borough Manager with weekly updates via email.
3.6 Project Risk
Discuss potential problems and how you would address them.
Fuel price risk. We will continue to monitor the long run outlook of the price of fuel oil. To the
extent that it appears likely that it will continue its most recent decline, we will revisit the need
for the project as we seek funding for the construction portion of the project and again before
bid award.
Capital project cost risk. We will be diligent in our preparation of design and bid documents to
mitigate against undue uncertainty in the bid price and we will monitor the construction project
to ensure all communications are clear and concise to reduce uncertainty and unnecessary costs.
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.
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 7 of 15 9/3/2008
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 cost of heating oil around the Lakes region of the Lake & Peninsula Borough is very high even by
remote rural Alaska standards due to the increasingly frequent necessity of having to fly fuel into the
communities because river barges are unable to justify the risk of delivery in any given year because of
low water and logistical delays. As a result heating oil costs are running from $6 to $9 per gallon. We
estimate heating oil costs will moderate somewhat over the long term and have assumed heating oil
costs in the $6 to $7 range for the current project analysis.
In contrast, local suppliers have been gathering wood and making it available at around $200 a cord or
roughly $20 per MMBTU (realized heat value).
Initial reconnaissance indicates adequate supplies of wood are available locally.
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 schools currently have oil fired boilers and many of them make use of secondary heat from local
diesel fired electric generation.
This project would provide supplemental wood heat.
This phase of the project would include the sizing and design of the wood heat system to optimize the
size of the new wood heating system so that it would provide cost effective supplemental heating to the
existing systems.
4.2.2 Existing Energy Resources Used
Briefly discuss your understanding of the existing energy resources. Include a brief discussion
of any impact the project may have on existing energy infrastructure and resources.
The Lake and Peninsula Borough has basic fuel storage infrastructure through bulk fuel tanks. The
landed price of fuel is very high, making alternative space heating very attractive. Many schools in the
Borough utilize waste heat from the local utility but still have to burn significant amounts of fuel. The
wood boilers will reduce the Borough’s reliance on fossil fuels and would no negatively impact any
other energy systems.
4.2.3 Existing Energy Market
Discuss existing energy use and its market. Discuss impacts your project may have on
energy customers.
The communities being considered for HELE units to serve the school buildings and potentially
adjacent teacher housing had the following actual fuel consumption in their school buildings in the
school year 07-08.
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 8 of 15 9/3/2008
Community School Fuel Consumption Cost at $7/Gallon
Pt. Alsworth 2,266 gallons $15,862 @ $7/gallon
Pedro Bay 2,000 gallons $14,000 @ $7.5/gallon
Kokhanok 6,200 gallons $46,500 @ $7.5/gallon
Nondalton 12,000 gallons $84,000 @ $7/gallon
Newhalen/Iliamna 18,000 gallons $126,000 @ $7/gallon
Total 40,466 $286,362
The change to HELE generated space heating in the school buildings and teacher housing should have
no negative impacts on other energy users. Positive impacts include decreased reliance on fossil fuels,
development of local knowledge of an alternative system for space heating, and local job creation
through contracting to collect wood and stoke the boiler. See Biomass Screening Attachment E
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 9 of 15 9/3/2008
4.3 Proposed System
Include information necessary to describe the system you are intending to develop and address
potential system design, land ownership, permits, and environmental issues.
4.3.1 System Design
Provide the following information for the proposed renewable energy system:
A description of renewable energy technology specific to project location
Optimum installed capacity
Anticipated capacity factor
Anticipated annual generation
Anticipated barriers
Basic integration concept
Delivery methods
This recon/design phase of this project would investigate the local systems and develop a
system design to provide cost-effective supplemental heat.
Please see attached spreadsheets for our initial reconnaissance level assessment of how
effective a basic conservative wood boiler installation would supplement existing heating
systems and displace high cost fuel oil. See screening studies in attachment E and F
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 Lake and Peninsula Borough and the school district have agreed to the project. Any land
issues related to the harvest of wood will be referred to contract employee Bob Loeffler. Land
ownership is not an impediment in this project.
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
Part of the design and permitting grant described herein will allow for the creation of a
permitting process. It is not anticipated that permitting will create barriers for this project.
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 10 of 15 9/3/2008
Aviation considerations
Visual, aesthetics impacts
Identify and discuss other potential barriers
It is unknown if any of these environmental barriers apply to the project. The Borough has attempted to
select sites that appear to have the fewest potential environmental issues. HELE units are clean
burning, emitting very little into the air.
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 Cost = $1,265,000
Total Cost for this phase = $95,000
Requested Grant Funding for Recon/Design = $77,000
Applicant Matching Funds this phase (in-kind housing, local systems research) = $18,000
Sources of estimate: Lake & Peninsula Borough Energy Plan Screening Report (in-progress). See
attached spreadsheets for documentation of individual assumptions.
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
It is expected that the switch to wood heat will incur additional operational costs associated with
handling wood and cleaning. We have incorporated these into our recon analysis. In order to be
conservative at this phase in the analysis, we have added additional costs for wood operations
compared to recent preliminary feasibility studies. See attached spreadsheet for details.
4.4.3 Power Purchase/Sale
The power purchase/sale information should include the following:
Identification of potential power buyer(s)/customer(s)
Potential power purchase/sales price - at a minimum indicate a price range
Proposed rate of return from grant-funded project
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 11 of 15 9/3/2008
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.
We adjusted the cost and benefit estimates contained in:
“Preliminary Feasibility Assessment for High Efficiency, Low Emission Wood Heating in
Kokhanok, Alaska”
June, 2007
Daniel Parrent, Wood Utilitization Specialist
Juneau Economic Development Council
To reflect higher costs in 2008 for fuel oil, wood, wood boilers, freight, and wood operations.
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 12 of 15 9/3/2008
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.
There are both successful and unsuccessful large scale wood boilers operating in Alaska today.
The units that are providing clean, reliable and affordable energy are those that have: 1) a
paid staff person whose charge is to maintain the unit and 2) individuals receiving payment for
collecting and delivering wood.
Once the HELE units have been installed the school district will take over management of the
units. A local job will be created in each community to gather wood for the unit and to stoke
the fire – providing operations and maintenance for the boiler.
4.4.6 Analysis and Recommendations
Provide information about the economic analysis and the proposed project. Discuss your
recommendation for additional project development work.
As part of the development of the Lake & Peninsula Energy Plan, we conducted a screening
study of projects that appeared likely to provide net economic benefits to residents, businesses
and public and private enterprises in the Borough.
With the high cost of heating oil around the Lakes region, we found that supplemental wood
heat looks economically attractive.
We targeted the schools in the area because they have a base of institutional support that
typically includes a local maintenance person who can keep an eye on new installations to
ensure that they are performing adequately. In addition, the schools are interested in
outsourcing the wood supply in the hopes of creating local jobs. In addition we anticipate
there may be opportunities for others in the community to take advantage of the school acting
as an anchor tenant in the development of a local wood supply business.
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
For details on comparisons of economic benefits see Screening Study Heat Attachment F
The non-economic benefits to Alaskans over the lifetime of the project are twofold:
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 13 of 15 9/3/2008
1 – Creation of local jobs. Creating employment in an area with few employment opportunities
adds to the sustainability of the place.
2 – Reduction in school costs. Reducing the cost to operate a school in rural Alaska is an
important piece of keeping schools operating in remote places. Numerous studies have
indicated that when the school shuts down the village will die, community sustainability relies
on our ability to keep schools open.
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
Provide a narrative summary regarding funding sources and your financial commitment to the
project.
In addition to providing local housing and assistance with understanding the local school and
teacher housing heating systems and requirements, the Borough expects to provide additional
resources for the construction phase of the project, including oversight and management of the
procurement and construction process.
See Grant Budget Form Attachment C
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 14 of 15 9/3/2008
SECTION 7 – ADDITIONAL DOCUMENTATION AND CERTIFICATION
SUBMIT THE FOLLOWING DOCUMENTS WITH YOUR APPLICATION:
A. Resumes of Applicant’s Project Manager, key staff, partners, consultants, and
suppliers per application form Section 3.1 and 3.4
B. Cost Worksheet per application form Section 4.4.4
C. Grant Budget Form per application form Section 6.
D. An electronic version of the entire application per RFA Section 1.6
E. Governing Body Resolution per RFA Section 1.4
Enclose a copy of the resolution or other formal action taken by the applicant’s governing
body or management that:
- authorizes this application for project funding at the match amounts indicated in
the application
- authorizes the individual named as point of contact to represent the applicant for
purposes of this application
- states the applicant is in compliance with all federal state, and local, laws including
existing credit and federal tax obligations.
F. CERTIFICATION
The undersigned certifies that this application for a renewable energy grant is truthful
and correct, and that the applicant is in compliance with, and will continue to comply
with, all federal and state laws including existing credit and federal tax obligations.
Print Name Lamar Cotten
Signature
Title Borough Manager
Date 10.8.08
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 15 of 15 9/3/2008
List of Attachments
A – Resumes and Statement of Qualifications
B – Cost Worksheet
C – Budget Form
D – Project Schedule
E – Biomass Screening
F – Tech Heat Screening
G – Borough Resolution
H - Diesel Price Projections