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HomeMy WebLinkAboutMatanuska Susitna Borough Waste Gasification Plant Study App Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 1 of 14 9/2/2008 Application Forms and Instructions The following forms and instructions are provided for preparing your application for a Renewable Energy Fund Grant. An electronic version of the Request for Applications (RFA) and the forms are available online at http://www.akenergyauthority.org/RE_Fund.html The following application forms are required to be submitted for a grant recommendation: Grant Application Form GrantApp.doc Application form in MS Word that includes an outline of information required to submit a complete application. Applicants should use the form to assure all information is provided and attach additional information as required. Application Cost Worksheet Costworksheet.doc Summary of Cost information that should be addressed by applicants in preparing their application. Grant Budget Form GrantBudget.xls A detailed grant budget that includes a breakdown of costs by task and a summary of funds available and requested to complete the work for which funds are being requested. Grant Budget Form Instructions GrantBudgetInstr.pdf Instructions for completing the above grant budget form.  If you are applying for grants for more than one project, provide separate application forms for each project.  Multiple phases for the same project may be submitted as one application.  If you are applying for grant funding for more than one phase of a project, provide a plan and grant budget for completion of each phase.  If some work has already been completed on your project and you are requesting funding for an advanced phase, submit information sufficient to demonstrate that the preceding phases are satisfied and funding for an advanced phase is warranted.  If you have additional information or reports you would like the Authority to consider in reviewing your application, either provide an electronic version of the document with your submission or reference a web link where it can be downloaded or reviewed. REMINDER:  Alaska Energy Authority is subject to the Public Records Act, AS 40.25 and materials submitted to the Authority may be subject to disclosure requirements under the act if no statutory exemptions apply.  All applications received will be posted on the Authority web site after final recommendations are made to the legislature. Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 2 of 14 9/3/2008 SECTION 1 – APPLICANT INFORMATION Name (Name of utility, IPP, or government entity submitting proposal) Alaska Recycling Energy, LLC Type of Entity: Alaska Limited Liability Company Mailing Address 9360 Glacier Hwy, Ste. 202 Juneau, Alaska 99801 Physical Address Office to be established in Anchorage Telephone (907) 586 3340 Fax (907) 586 6818 Email donwest@aol.com 1.1 APPLICANT POINT OF CONTACT Name Donald W. West Title Managing Member Mailing Address PO Box 584 Naperville, Illinois 60566-0584 Telephone (312) 804 4454 Fax (847) 864 2778 Email donwest@aol.com 1.2 APPLICANT MINIMUM REQUIREMENTS Please check as appropriate. If you do not to meet the minimum applicant requirements, your application will be rejected. 1.2.1 As an Applicant, we are: (put an X in the appropriate box) An electric utility holding a certificate of public convenience and necessity under AS 42.05, or X An independent power producer, or A local government, or A governmental entity (which includes tribal councils and housing authorities); Yes 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 14 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. Type in your answer here and follow same format for rest of the application. MATANUSKA-SUSITNA BOROUGH WASTE GASIFICATION PLANT STUDY -- Type of Project -- Resource Assessment/Feasibility Analysis/Conceptual Design for a proposed waste gasification plant project for Matanuska-Susitna Borough("Mat-Su"); conversion of all types of waste into energy. 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. Alaska Recycling Energy, LLC ("ARE") seeks funding to prepare a resource assessment, feasibility analysis and conceptual design study for the development of a state of the art clean waste gasification plant that will generate energy for Mat-Su and its surrounding communities. The proposed plant project will be located at the Mat-Su Municipal Landfill in Palmer. The project will principally serve those communities presently served by the Mat-Su Solid Waste Division. This study will provide the information required to develop the feedstock sources and analysis, preliminary site layout and design, plant sizing and configuration, development plan, construction, start-up and operating costs, by product markets and operating information necessary to prepare and analyze the financial information required to finance the proposed plant and to formalize a legal relationship with the Solid Waste Division for Mat-Su. The proposed plant project will convert the Mat-Su waste and landfill into electricity or fuel. Preparation of the study will involve WFT Management Company, Plasma Waste Recycling, CH2MHill, Economic Research Associates, and Alaska Recycling Energy staff in conjunction with Mat-Su Solid Waste Services and Borough staff. If needed, additional consultants will be retained. 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. Alaska Recycling Energy estimates that this first phase study will cost $650,000. The required funds for this phase are being sought through this grant application. The Municipality of Mat-Su will contribute the services of its staff as needed. The total project cost could reach Sixty Million Dollars but will require information resulting from this study to size and configure the project and to develop the estimated cost of each phase and for the total cost. 2.4 PROJECT BENEFIT Briefly discuss the financial benefits that will result from this project, including an estimate of economic Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 4 of 14 9/3/2008 benefits (such as reduced fuel costs) and a description of other benefits to the Alaskan public. Converting Mat-Su waste into energy will reduce its waste disposal costs and provide a new source of affordable energy in the form of fuel or electricity at lower than current market prices. The type of energy produced will be determined by the results of the study and the desire of the Municipality of Mat-Su. The project could eliminate the landfill, reduce long term landfill monitoring costs, reduce greenhouse gases and reduce disposal costs for waste other than MSW by consolidating all types of waste into a single conversion process and by minimizing sorting or preprocessing. Additionally, the system is capable of converting sanitary sludge into energy if the Municipality elected to do so thereby creating further savings. Actual cost savings will be identified by the project study. Savings should reach over a million dollars per year for the Borough, for the medical community with lower medical waste disposal costs, and will directly or indirectly provide savings to the public. The energy or fuel produced will provide an alternate source to supplement and support a portion of the present Mat-Su energy markets at reduced cost. Reducing greenhouse gases provides health benefits to the community at large. 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.) $60,000,000 2.5.2 Grant Funds Requested in this application. $ 650,000 2.5.3 Other Funds to be provided (Project match) $ 2.5.4 Total Grant Costs (sum of 2.5.2 and 2.5.3) $ 650,000 2.5.5 Estimated Benefit (Savings) $over $1,000,000 per year 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.) $ not available at present Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 5 of 14 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. Type in your answer here and follow same format for rest of the application. Primary Project Manager will be Donald W. West, Managing Member of Alaska Recycling Energy, President of WFT Management Company and advisor to Plasma Waste Recycling. Mr. West's resume is attached. References for Donald W. West are also included. 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.) See attached Exhibit 3.3 Project Milestones Define key tasks and decision points in your project and a schedule for achieving them. See attached Exhibit 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. CH2MHill will be the engineering design team headed by Jim Riley, Senior Process Group Engineer. CH2MHill will also serve as construction manager for the construction phase. The Plasma Waste Recycling team will be led by Terry Moore, President and CEO. The resumes of Jim Riley and Steve Jenkins from CH2MHIll and the resumes of the PWR team are attached. See also the enclosed materials containing corporate materials for Plasma Waste Recycling, Economic Research Associates, Tenova Pyromet and CH2MHill. This team will provide the primary design, plant configuration, construction management, start-up and training for the plant. Alaska Recycling Energy will enter into a license agreement with Plasma Waste Recycling for the use of its proprietary technology once the project scope has been defined by the study. Mr. West has been an officer and director of PWR. Mr. West is also President of WFT Management Company which has a consulting agreement with PWR that grants it the right to exploit the PWR technology in Alaska. WFT has assigned these rights to ARE which it owns. All major portions of the construction contract will be subject to public bidding by the construction manager, CH2MHill, except for the reactor which is a proprietary design of PRW and is produced by Tenova Pyromet under an OEM agreement with PWR. Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 6 of 14 9/3/2008 3.5 Project Communications Discuss how you plan to monitor the project and keep the Authority informed of the status. Upon approval of this grant, Alaska Recycling Energy/ WFT Management Company will open and staff an office in Anchorage to administer the grant, oversee and develop the total project. Project Manager, Donald W. West, will be located at the proposed Anchorage office which will be near both the Solid Waste Division office and the AIDEA office. Progress reports, accounting and other communication services will be generated from that office. 3.6 Project Risk Discuss potential problems and how you would address them. Potential project risks resulting from the PWR process have already been addressed with a Fatal Flaw Analysis and a Hazardous Process Analysis having been undertaken by PWR under the direction of CH2MHill in conjunction with URS and Covanta. Tenova Pyromet is undertaking and guaranteeing its own testing for the reactor equipment. During construction, CH2MHill and WFT Management Company will have expediters and managers monitoring equipment ordering, staging and construction. Both companies have successful experience managing and completing major construction projects. Permitting risks resulting from the new technology created by the PWR process have been addressed by early presentation to critical agencies. Preliminary review by NEPA is typical which has informally advised that they see no potential approval problems. The permitting section of CH2MHill has reviewed the process internally and also with the Alabama Department of Environmental Management where it has received preliminary approval for projects in Alabama. A recent meeting with the California Integrated Waste Management Board and the Cal EPA also confirm there should be no problems with permits in California. Preliminary meetings with the Alaska Department of Environmental Conservation also suggest that permitting should not be a problem in Alaska. Given this exposure, we believe permitting should not pose a problem for this new technology. Equipment fabrication of proprietary equipment that could pose time delays have been addressed by PWR which has OEM contracts with suppliers for its critical items. Those manufacturers are world leaders in their respective fields and have already prepared programs for the production of PWR equipment. PWR has retained and associated itself with world leaders in the various applicable fields so the technical skills and experience needed to properly and successfully undertake projects like this have been fully addressed. The availability of feedstock to maintain operations on a 24/7 basis are critical since the plants cannot operate on a start and stop basis or even with major flow reductions. The sourcing, logistics and staging of feedstock required to maintain continuous operations are a potential source of problems. The location of the proposed plant on the Mat-Su landfill will provide a continual reserve source of feedstock that should address this problem. Communications problems are likely to create the primary problems during the study stage. Relationships with Greg L. Goodale, Solid Waste Division Manager and Mat-Su Borough staff have been established by Mr. West who will be located in Anchorage. In Juneau, Robert Loescher, former CEO of Sealaska, has been retained to provide liaison to state officials along Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 7 of 14 9/3/2008 with ARE's attorney, Paul M. Hoffman. CH2MHill has a major office in Anchorage that designed the Mat-Su landfill and will coordinate its involvement. Mr. West is an advisor to PWR and part of its team will locate in Alaska during the study. Mr. West has worked on various projects with ERA for many years and has close relations there. Given Mr. West's fifty years of experience in development, most challenges at this stage should be manageable. 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 proposed plant will use the PWR process which is a base load self-sustaining energy project. The underlying energy resource that is available for the project will be the 200 plus tons of daily municipal solid waste generated by Mat-Su and the waste contained in its landfill. Other sources of waste will be identified during the first phase study that could add to this supply. The conversion of this waste could produce up to 6,000 gallons of diesel fuel per day or produce 4 MW per day of electricity for sale into the Mat-Su market above the amount produced that is required to run the plant. The pros of the PWR process are that it totally recycles waste without creating emissions or residue. It captures virtually all of the carbon and BTU content from the feedstock and generates enough electricity to be self-sufficient. Moreover, saleable byproducts will be produced to create economic efficiencies and income. This is the only completely clean waste conversion technology we are aware of today. Moreover, the economic benefits and savings will benefit Mat-Su. The primary con is that this is new technology and before it is clearly understood and has an operational history, it may face some opposition. The proposed new plant will require some changes in operating procedures used by Mat-Su Solid Waste Division. Cost savings and efficiencies should facilitate this change. Finally, public opinion will have to be addressed since this is a new concept which may challenge some people. Other waste to energy and alternate energy systems that make similar claims are on the market but cost more to build and to operate and they are not completely green. These will be distinguished in the proposed study. Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 8 of 14 9/3/2008 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 proposed Alaska Recycling Energy plant is a self-sufficient internal generating base load energy operation. Although it will be connected to the electrical grid and can provide supplement power generation to it, it will not replace any existing energy system nor is it relying on any existing energy system to provide power to it. There are no existing energy systems at the landfill, therefore existing energy systems information is not pertinent to this project. The energy or fuel produced can be used by the Borough to lower its operating costs and also be sold into the local Mat-Su market. Electricity or fuel for sale into the public market from the plant will supplement existing supplies. The proposed study will examine and discuss these market options and contrasting costs. 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. No effort has been made to study the existing fuel or energy market at present. The primary impact of the proposed project will be to reduce operating costs for the Mat-Su Borough and for the products sold into the public market. To the extent there are sales into the public market, the effect will be lower energy or fuel costs for products produced. This should translate into public savings and could have some market effect. 4.2.3 Existing Energy Market Discuss existing energy use and its market. Discuss impacts your project may have on energy customers. The existing energy use in the Mat-Su market will be studied as part of the assessment portion of the proposed study. Excess production could be sold to the Borough, the military and into the commercial market. Such an entry will provide lower cost electricity or fuel and could result in a major impact on energy customers. It is anticipated that corporate customers would request primary consideration to lower production costs. This type of analysis and the impact on the various market segments will be part of this proposed study. 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 Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 9 of 14 9/3/2008  Delivery methods See Attached Exhibit 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 proposed plant site is at the existing Mat-Su Municipal landfill located in Palmer. Discussions with the Mat-Su Solid Waste Division have indicated a willingness and desire to locate a waste to energy plant there and they have identified the preferred location on that landfill for a proposed plant. Formal agreements have not been reached but since Mat-Su desires to have an interest in or possibly own and operate the plant, land issues should not pose a problem. Access is fully addressed since Mat-Su waste collection routes presently go there and need not be changed. 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 See Attached Exhibit 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 Since the proposed plant site is on an existing and permitted landfill, there are no environmental or other constraints anticipated. The low profile of the proposed plant creates no Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 10 of 14 9/3/2008 telecommunication, aviation, visual or other impacts. In fact, the plant design does not require a stack so evidence of a waste treatment plant is not obvious. 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 cost information will be developed by the proposed study. Any additional grant funding desired for the project will be determined once the proposed study is completed. Commercial market funds are available for these types of projects, AIDEA might consider participation in such an investment or some future grant funds may be desired. 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 The operating and maintenance costs will be determined once the project scope and design are developed by the proposed study. Part of these costs will be the reallocation of existing Municipal costs and others will be covered by project income. The pro-forma plant operational financials will demonstrate that the plant should be self-sustaining economically. No grant funding is anticipated for operating and maintenance costs. 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 This information will be developed during and by the proposed study. 4.4.4 Cost Worksheet Complete the cost worksheet form which provides summary information that will be considered in evaluating the project. Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 11 of 14 9/3/2008 Download the form, complete it, and submit it as an attachment. Document any conditions or sources your numbers are based on here. Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 12 of 14 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. The operating plan will be developed by the proposed study but it is expected that Solid Waste Division of Mat-Su will be the operators. Covanta and Waste Management have expressed interest in operating plants if an operator is needed. At a minimum, with income from the feedstock inputs and from the sale of outputs, the projected cash flow of the proposed plant will show not only that the plant will sustain itself but that it should be very profitable. There are several possible business structures that might include ownership interests for a lender/investor or that Mat-Su Borough will want to own and operate this proposed plant based on discussions held with representatives from Mat-Su. 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 purpose of the proposed study will develop the economic information and analysis for the proposed project. Since this technology represents the state of the art waste conversion technology and provides the ultimate alternate energy solution to the environmental, air, and energy problems of our country, we believe this project should be supported in its entirety. 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 This information will be developed by the proposed study. Alaskans will benefit from lower municipal operating costs, cleaner air and much less pollution from waste. 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. Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 13 of 14 9/3/2008 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. All potential funding sources for the proposed project will be developed as part of the study. PWR has spent substantial sums of money developing the PWR technology and process. Their ongoing operational support will entail a major financial commitment. The initial study will advance this project and demonstrate the substantial benefits to Mat-Su and to Alaska. Several commercial lenders have expressed an interest in participating in funding the actual project if Alaska does not elect to do so itself. SECTION 7 – ADDITIONAL DOCUMENTATION AND CERTIFICATION SUBMIT THE FOLLOWING DOCUMENTS WITH YOUR APPLICATION: A. Resumes of Applicant’s Project Manager, key staff, partners, consultants, and suppliers per application form Section 3.1 and 3.4 B. Cost Worksheet per application form Section 4.4.4 C. Grant Budget Form per application form Section 6. D. An electronic version of the entire application per RFA Section 1.6 E. Governing Body Resolution per RFA Section 1.4 Enclose a copy of the resolution or other formal action taken by the applicant’s governing body or management that: - authorizes this application for project funding at the match amounts indicated in the application - authorizes the individual named as point of contact to represent the applicant for purposes of this application - states the applicant is in compliance with all federal state, and local, laws including existing credit and federal tax obligations. Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 14 of 14 9/3/2008 F. CERTIFICATION The undersigned certifies that this application for a renewable energy grant is truthful and correct, and that the applicant is in compliance with, and will continue to comply with, all federal and state laws including existing credit and federal tax obligations. Print Name DONALD W. WEST Signature Title MANAGING MEMBER Date SEPTEMBER 20, 2008