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AEA Board Meeting Oct 7 2008
/=ALASKAqaENERGYAUTHORITY laska Industrial DevelopmentandExportAuthorityxot AGENDA Alaska Energy Authority Board of Directors Tuesday,October 7,2008 Anchorage,Alaska CALL TO ORDER BOARD OF DIRECTORS ROLL CALL PUBLIC ROLL CALL PUBLIC COMMENTS -Limit 3 minutes per speaker PRIOR MINUTES -June 12,2008 OLD BUSINESS NEW BUSINESS DIRECTOR COMMENTSNQOas A.Director's Status Report Renewable Energy Fund -RFA Update Initiatives »2008 Alaska Energy Authority Initiatives >Least Cost Option Evaluation >Community and Regional Evaluations >Resource Matrix AEA Projects e AEA Programs B.Next meeting date -December 11,2008 Proposed AEA Board Meeting Dates 2009 Thu.Jan 22,2009 Thu.Feb 26,2009 Thu.Apr 2,2009 Thu.May 14,2009 Thu.June 25,2009 Thu.Aug 6,2009 Thu.Sept 17,2009 Thu.Oct 29,2009 Thu.Dec 10,2009 8.BOARD COMMENTS 9.ADJOURNMENT 813 West Northern Lights Boulevard e Anchorage,Alaska 99503-2495 www.aidea.org e 907/771-3000 «FAX 907/771-3044 e Toll Free (Alaska Only)888/300-8534 «www.akenergyauthority.org /=ALASKAez)ENERGY AUTHORITY Al an aska industrial DevelopmentidExportAuthority AGENDA Alaska Energy Authority Board of Directors Tuesday,October 7,2008 Anchorage,Alaska 1.CALL TO ORDER 2.BOARD OF DIRECTORS ROLL CALL 3.PUBLIC ROLL CALL 4.PRIOR MINUTES -June 12,2008 5.OLD BUSINESS 6.NEW BUSINESS 7.DIRECTOR COMMENTS A.Director's Status Report e Renewable Energy Fund -RFA Update e Initiatives >2008 Alaska Energy Authority Initiatives >Least Cost Option Evaluation >Community and Regional Evaluations >Resource Matrix e AEA Projects e AEA Programs B.Next meeting date -December 11,2008 Proposed AEA Board Meeting Dates 2009 Thu.Jan 22,2009 Thu.Feb 26,2009 Thu.Apr 2,2009 Thu.May 14,2009 Thu.June 25,2009 Thu.Aug 6,2009 Thu.Sept 17,2009 Thu.Oct 29,2009 Thu.Dec 10,2009 8.BOARD COMMENTS 9.PUBLIC COMMENTS -Limit 3 minutes per speaker 10.ADJOURNMENT 813 West Northern Lights Boulevard e Anchorage,Alaska 99503-2495 www.aidea.org e 907/771-3000 «FAX 907/771-3044 @ Toll Free (Alaska Only)888/300-8534 e www.akenergyauthority.org /=ALASKAqa)ENERGY AUTHORITY*bs Alaska Industrial DevelopmentandExportAuthority MINUTES Alaska Energy Authority Board of Directors Thursday,October 7,2008 Anchorage,Alaska 1.CALL TO ORDER Chairman John Kelsey called the meeting of the Alaska Energy Authority to order on October 7, 2008 at 2:06pm. 2.BOARD OF DIRECTORS ROLL CALL A quorum was established.Members present in Anchorage:Chairman John Kelsey (Public Member);Commissioner Patrick Galvin (Department of Revenue);Commissioner Leo von Scheben (Department of Transportation &Public Facilities);Commissioner Emil Notti (Department of Commerce,Community &Economic Development). Absent:Vice Chair John Winther (Public Member). 3.PUBLIC ROLL CALL Staff Present in Anchorage:Ted Leonard (AIDEA Executive Director);Chris Anderson (Deputy Director-Credit);Sara Fisher-Goad (Deputy Director-Operations);James Hemsath (Deputy Director-Development);Valorie Walker (Deputy Director-Finance);Bruce Chertkow (Loan Officer);Karl Reiche (Projects Development Manager);Karsten Rodvik (Project Manager);Mark Schimscheimer (Project Manager);Brenda Fuglestad (Administrative Manager);and Sherrie M. Siverson (Administrative Assistant). Others Present:Brian Bjorkquist and Mike Mitchell (Department of Law);and Paul D.Kendall (Public). PUBLIC COMMENTS Chairman Kelsey asked the public speakers to keep their comments to three minutes. Mr.Paul D.Kendall distributed materials to the board members.He stated he feels that we are in a new age of energy and fossil fuel energy has hit the wall.He stated he is not sensing the feel for new energy,and fossil fuel is the last thing that should be embraced.He sent a letter requesting the names of all the teams AEA is working with,when they meet and also asked AEA to coordinate meetings between all the teams.He asked why AEA is not having an Energy Conference.He is waiting to see what is going to be unveiled regarding the Energy Plan in December.Everything should be focused towards energy,no schools,no roads,everything should be focused on turning the whole community towards energy. 813 West Northern Lights Boulevard *Anchorage,Alaska 99503-2495 www.aidea.org *907/771-3000 ®FAX 907/771-3044 ®Toll Free (Alaska Only)888/300-8534 ©www.akenergyauthority.org AEA Board Meeting October 7,2008 Meeting Minutes Page 2 4.PRIOR MINUTES -June 12,2008 The minutes from June 12,2008 were approved as presented. 5.OLD BUSINESS There was no old business. 6.NEW BUSINESS There was no new business. 7.EXECUTIVE DIRECTOR COMMENTS Mr.Haagenson said the Request for Applications (RFA)for the Renewable Energy Fund was a result of HB 152 that provides AEA with statutory direction.Meetings with LB&A provided an opportunity to listen to their expectations. Mr.Rutz stated the RFA went out on September 3,2008 and is unique as there are two separate submittal dates:October 8 and November 10.The Renewable Energy Fund Advisory Committee assisted AEA in the development of the RFA.AEA will evaluate the RFA's and make a recommendation for the different projects,rather than awarding the grants.AEA will present the recommendations to LB&A for approval of the 2009 grants and submit the second round recommendations to the full Legislature for the 2010 grants.Once projects are selected,they will come back to AEA for grant administration,construction and project management services. Mr.Haagenson stated another unique feature included in the evaluation process in a public benefit to cost ratio.This measure identifies the public benefit and compares this benefit to the grant funds provided.Most projects are currently evaluated on a project benefit to cost ratio. The addition of a public benefit to cost ratio provides a look at the benefits obtained from public funds.Projects that have high project benefit to cost ratios may not have a high public benefit to cost ration. Mr.Rutz said the RFP was broken down by project phases of reconnaissance,pre-feasibility, design,pre-construction,or construction.Initial funding in the early phases would allow for a verification step before obtaining money for the following phases. At the LB&A hearing,Representative Kelly asked if the Board had approved the project evaluation list.Mr.Bjorkquist stated that in the By-Laws,the Board has already delegated to the Executive Director of AEA the general authority to administer the day-to-day business activities of AEA,subject to the boards review and oversight.He stated that in his professional view, what LB&A has requested is already within that delegation. The Board agreed that staff would rank the proposals and provide a copy to the Board for their information. Discussions ensued regarding HB152 and the amount of grants that could be received and the workload impact at AEA staff.The current plan is to expand to meet the workload through the use of contractors. AEA Board Meeting October 7,2008 Meeting Minutes Page 3 Mr.Haagenson stated $300 million in weatherization funds were provided to Alaska Housing Finance Corporation through a separate program. Alaska Energy Plan Mr.Haagenson said the Alaska Energy Plan is moving forward.ISER,working with authority staff,has completed the list of fuel use by community.The technology teams have met and identified the technology that we will deploy. Both rural and Railbelt issues will be included in the energy plan.Local energy options will be identified for each non-Railbelt community.Options in the Railbelt region will be considered and evaluated as part of the Integrated Resource Plan (IRP)that will be completed in late 2009. CLI Organizational Assessment In an earlier meeting,Terry Stimson and Dick LaFever discussed questions they asked staff on their opinions of AEA,appropriate changes and methods of receiving information.The general feeling from Staff is they wanted to be involved in decision that would affect them and be part of developing the vision for AEA.Mr.Haagenson stated the AEA staff worked together to draft a mission,vision and value statement for AEA. Draft AEA Vision,Mission and Values Statement Vision:Affordable and sustainable energy for Alaska. Mission:Provide world-class,customer focused energy services to Alaska. Values:Building relationships founded on culture awareness,integrity and accountability. Railbelt Electric Grid Authority Study The Railbelt Electric Grid Authority (REGA)report recommended the formation of a state authority which would not be regulated.We have heard several utilities and agencies voice concern over the non-regulated entity recommendation.We're listening to all parties to gain support for the REGA concept.REGA will continue to identify common ground for all participants as we move toward implementation. 8.BOARD COMMENTS Commissioner Galvin recognized Steve for the tremendous amount of work he has accomplished and stated he is pleased with the work that he has done. Mr.Haagenson stated the credit goes to the committed people at AEA. AEA Board Meeting October 7,2008 Meeting Minutes Page 4 9.ADJOURNMENT There being no objection and no further business of the Board,the meeting was adjourned at 3:06p.m. Steve Haagenson,Executive Director Alaska Energy Authority MINUTES ALASKA ENERGY AUTHORITY Board of Directors Thursday,June 12,2008 Anchorage,Alaska 1.CALL TO ORDER Chairman John Kelsey called the meeting of the Alaska Energy Authority to order on June 12, 2008 at 1:53pm.A quorum was established. 2.BOARD OF DIRECTORS ROLL CALL Members present in Anchorage:Chairman John Kelsey (Public Member);Vice Chair John Winther (Public Member);Deputy Commissioner Brian Andrews (Designee for Department of Revenue);Emil Notti (Department of Commerce,Community and Economic Development);and Commissioner Leo von Scheben (Department of Transportation &Public Facilities). Vice Chair John Winther (Public Member)joined the meeting at 1:58 p.m. 3.PUBLIC ROLL CALL Staff Present in Anchorage:Steve Haagenson (AEA Executive Director);Ted Leonard (AIDEA Executive Director);Sara Fisher-Goad (Deputy Director-Operations);Mike Harper (Deputy Director-Rural Energy);James Hemsath (Deputy Director-Development);Chris Rutz (Procurement Manager);Jim Strandberg (Project Manager);Brenda Fuglestad (Administrative Manager);and Sherrie M.Siverson (Administrative Assistant). Others Present:Brian Bjorkquist and Mike Mitchell (Department of Law);Paul D.Kendall (Public); Percy Frisby and Andrei Chakine (Tlingit &Haida Indian Tribes of Alaska,Central Council). 4.PUBLIC COMMENTS A discussion ensued between Mr.Paul D.Kendall,Mr.Haagenson and members of the Board regarding public testimony.Mr.Haagenson stated that at the end of Mr.Kendall's public testimony if the Board Members had questions,they could be addressed at that time. VERBATIM You should all have a packet in front of you.My name is Paul middle initial D Kendall.|live in Anchorage.|have some background as an energy and political activist.|see something very very special in Alaska.It has to do with electricity and the moving of electricity to the residential units across your state.If |see some things that |think are of historical and monumental impact.|had thought you had received this packet well in advance of my arrival,you would be able to purview it as the packet itself with a list of discussions and questions.|believe that there should be a ton of questions after receiving a packet from me most typically.1 didn't come prepared to just be able to just sit here and spiel something off for three minutes for somebody's . entertainment or a quick presentation and |don't typically look to place a hook to gain another man's interest.|typically like to call the shots as |see them in honest dialogue between men and some great ideas in some direction we're headed.So |don't know where we are going in three minutes.|don't know too many men who can go some place in three minutes,but |will AEA Board Meeting June 12,2008 Meeting Minutes Page 2 try my best to do that.First |want to inform you that |may be a candidate for the U.S.Senate.| am in the breach and taking strong consideration of that.If |join that will be of a multitude or purpose and one of them will be able to define energy for Alaskans as |think they need itbecausetheremaybealackofleadershipinthatarea. |would like to remind you,|would like to make a formal request of Mr.Haagenson,on the record,that is to get a copy of Steve Pratt's report to the Alaska Power Authority,which |was denied recently.|would also like to get a copy of the,|guess as |understand it,ISER was requested to do a study for you and |would like to get a copy of that request to ISER.|would like to get a copy of whatever the Board there furnished and this Board in reference to Energy and that's for the record.I'd also like to talk about financing some type of energy forum. |think Alaska is in a very very special place gentleman.This is,the magnitude of this is huge.| think some of the members of this board heard this the last time |was before you.|continue to see the largeness of that.Let me put this into some kind of perspective for you.I'm convinced that if |could tie you to a chair and play AGIA and Dan Dickison all day,it would kill all of you okay.The pain and the complexity of the gas and the fossil fuel distribution is just overwhelming.Now keeping that in mind,typically in trains-of-thoughts there's a thing called a dot and that is your center.The circle in a frame of thought is the outlying areas that lead to that and then you come to what is known as a spherical thinking,which is a ball like,which looks at all aspects of all agencies.|you look at what's happening up there on the slope with the oil and the gas,there is a great mystery as to what's happening here.Something is wrong in Alaska ladies and gentlemen.|think that your time is repeating itself in some type of cycle.In the early 80's you had a chance to be a hydrogen,you had a chance to be a geothermal,you were headed places where men dreamed of going.The bottom of the oil fell out,everything collapsed.There're dialogues (audio not clear)from Wally J.Hickel on geothermal.You had the first hydrogen study done that |know of in the world,241 pages (audio not clear)Old Harbor.You have a magnificent history.|would suggest to you that what is happening with the energy today is that you are about to see another smack down.This is going to come hard and fast.I'm very concerned about the mystery as to what has happened at last with that pipeline going half or two third's empty for twenty years.Keeping that in mind,if you look at electricity with the thousands of sites of hydroelectric potential that you have,you have the capacity to laundry an electrical infrastructure.If you move that infrastructure towards your homes you'll notice in your packets there I've delineated a home's many aspects of energy.Most people just think of electricity.That is not true.You have heating and cooking.Those are BTU factors can be converted to electricity.You also have transportation about a thousand gallons.If you move that to electricity you can initiate the electric vehicle.Then you come to water and trash and things like that.But in essence if you move that electricity towards the single family home,you in essence will stabilize your society,stabilize your work force and as you move electricity into that single family home you will move gas out.As that gas goes out it generates you another revenue market,in the open market.And it also begins to compound its impact because the money that you pay out now for gas and fossil fuels is an extrapolation of capital.Generally utility bill you have 15-20 percentage for operation and maintenance.The other 60-80 percent is called a feedstock which goes to the owner.So not only do you push the gas to the market to sell but you hold your capital within the community and the State of Alaska.There are multiplying impacts of moving electricity to the home.!f you continue to move that electricity into the home,you also stabilize your society which may also impact crime and lots of other social costs we're having to pay for.But in addition to that,if one of your homeowners can come to you and say they bought an electric car.The Chinese are introducing $11,000 124-mile range car in Austin next year.There are a multitude of electric cars coming to the market.If you initiate that electric car,now you not only save more money,but now you push out the refinery AEA Board Meeting June 12,2008 Meeting Minutes Page 3 materials into the open market again stabilizing and increasing your cash flow.And when you come into the totality of the breech of the electricity,you are now converging with hydrogen. And ladies and gentlemen,it's hard for me to talk unless you have a picture in front of you,from Popular Science magazine,it's worth a thousand words.That picture shows a house of the future.You'll notice that it shows down at the bottom a hydrogen tank and a hydrogen fuel cell, right?Now I'm not interested in the fuel cell.A multitude of corporations and individuals are. Powerful people.You'll notice BMW was on the weekend twice with their car made of water and the guy from BMW said "hey,we just you to know we're ready when you're ready.” Hydrogen is here ladies and gentlemen.In addition to that,|have a packet of information in the back of your book that shows in 1991 Dupont,Conoco Phillips,and some others,were able to manufacture hydrogen with a 1.7 year payback on their total investment.So we know it's here, okay?But setting the hydrogen aside,what happens with your society,if you implement the electrical grid system,the backbone of the great state of Alaska,you will stabilize all sectors, create multiple streams of revenue,and in essence you will technologically upscale your people. You will have a place in the world with recognition beyond your wildest dreams.You have a chance to have it all.All,gentlemen.So that's my ... End of Verbatim 5.PRIOR MINUTES --April 10,2008 The April 10,2008 minutes were approved with one correction:change spelling of the word trawlers to trollers on page 4. 6.OLD BUSINESS There was no old business. 7.NEW BUSINESS There was no new business. 8.DIRECTOR COMMENTS Mr.Haagenson asked Mike Harper to provide an overview of Programs and Projects Updates. OVERVIEW OF AEA PROJECTS and PROGRAMS , Mr.Harper asked Board members to review the AEA Programs and Projects Fact Sheets in their packets and contact him if they have any questions.He stated that at this time of year AEA is normally very busy building bulk fuel tank farms or power plants in the bush.However, AEA is not as busy as it normally would be because the same level of funding is not available from the Denali Commission.Funds may become available at a later date,but they are down at least a third from previous levels. AEA has constructed over 60 bulk fuel tank farms and 30 power plants in the past 7-8 years. AEA is busier than ever with increased interest in alternative energy and the passage of House Bill 152.HB 152 is an alternative energy bill will have a huge impact on Alaska and will be facilitated through AEA and its Board. AEA Board Meeting June 12,2008 Meeting Minutes Page 4 Mr.Winther asked if there were enough Bulk Fuel Loan Funds to cover the villages that apply due to the increase in gas prices. Ms.Anderson responded that AEA is in good shape,but has noticed an increase in average requests.The amount requested has to be weighed with the ability to pay it back. Ms.Fisher-Goad added that AEA Legislation House Bill 338 went through the legislative process last year.Originally proposed by AEA,the bill was introduced and carried by Representative Mary Nelson.The bill passed and is waiting for transmittal to the Governor. The bill included two amendments.One amendment,through the Committee,increased the maximum bulk fuel loan limit from $400K to $500K.Applications have been received requesting that higher dollar amount.The other change in the bill reflects the bridge-loan program, managed through the Department of Commerce,and is now in statute. A significant change allows AEA to use the Power Project Fund for cash flow purposes for loans which maximizes loan value.There are some limitations.AEA is conservative with respect to what was originally proposed.With the current increase in fuel costs AEA may use all of the resources from that fund.In the future,AEA may see additional pressure to increase the loan amount but that has to be balanced with the purpose of the loan and how it would be paid back. Ms.Anderson stated that there are currently three applications at the half-million dollar level but not all requests are approved for the amount requested.Mr.Haagenson asked if AEA anticipated running out of bulk fuel loan program funds this year and whether or not there is an 85%increase,to which Ms.Anderson replied no.She stated they have received 9 requests in the past week and expects an increase in applications in September.The applications,on average,were larger than previous requests.Mr.Haagenson asked if the increases were extrapolated out,would there be enough funds to cover an estimated $6 million dollar excess. Ms.Anderson replied that they were going to have to look at the potential for additional funding for the program,but probably not for this year.At this time the program is more reactive to people's needs and is repeat business,but 7-8 communities have come to us who in the past have always self-funded.In general there's more need. Commissioner von Scheben stated he had received an email about the high cost of fuel and perishable food supplies in bush communities.This person made a comment about some type of shift regarding people leaving the villages and asked if anyone knew of a shift because some of the villages are not able to hang on because of the high costs. Mr.Haagenson reported seeing a huge shift.George Cannelos,Denali Commission,hired ISER to analyze that shift from Bethel to Wasilla,from smaller areas into hubs,like Bethel. There is a huge shift going on because the cost of energy is bringing the cost of everything up. He called it the death spiral. Commissioner Notti added that he heard Bethel had 34 homes for sale,a big percentage for the size of the community. Commissioner von Scheben said he was thinking of smaller communities like Chauthbalak and Kalskag and doesn't know how they can survive with fuel and milk that costs up to $10 a gallon. Mr.Haagenson said the smaller villages have been double whammied.One of the charts in the packet shows that in small communities,the energy costs might be the same (as /arger communities),but the average income is only half.In hubs like Bethel they tend to make more AEA Board Meeting June 12,2008 Meeting Minutes Page 5 money so it is easier to absorb,but it is still hurting them.He spoke with a person in Bethel who said last year he had two apartment buildings 100%full,with a waiting list,but this year he only has 20%occupancy,a sign of worse things to come. Commissioner Notti said he thought there would be more demand for bulk fuel loan funds.Mr. Haagenson and Ms.Anderson both anticipated seeing an increase in demand.TBush Caucus is already discussing an increase in the bulk fuel and power project fund. Ms.Anderson said that AEA may be swamped with requests in the future,but it is not solely a matter of increasing funds,it's a matter of how they pay it back.The tougher question is,is it going to be affordable to these people to pay back these loans?Requests are coming in for $400,000,no matter what the needs is,but we do not always approve what they ask for.They may be approved for $200K or $250K,what we determine they are able to repay. A discussion ensued about how the high cost of fuel affects fishermen.They expect to catch one hundred million tons less fish in Bristol Bay this year because they are unable to compete with the price of Puget Sound Salmon. Mr.Haagenson stated that the first issue is a cash flow problem which is what a bulk fuel loan helps with.When fuel is delivered now,it must be paid for within 2-3 weeks.Moneys sits in the tank and no kilowatt hours have been generated to reap revenue.Making electricity from the really expensive fuel is going to make the price go up with no sales to cover the costs.As Chris said earlier "Is this a good loan to make and can they pay it back?”There may be risky times ahead. Mr.Harper distributed an information sheet about AEA Projects showing pictures of a tank farm before and after it received a new code-compliant sustainable tank. Steve Haagenson provided an update on the status of the Energy Plan. The Alaska Energy Plan is going very well.Meetings have been held in 26 communities.While on site in Chitina an extra meeting was conducted.Three more meetings will be held in Haines, Petersburg and Emmonak.Good information has been received and is being put into a matrix showing almost every community in Alaska.Across the top of the matrix are all of the resources available.The matrix will then be matched to the energy required to run each community which includes electricity,space heating and transportation.You will be able to look at the community needs and compare it with other options. For example,while the group was in Bethel,one community member mentioned that when he was a kid his job was to clean trash out of the flue at Nyak.What and where is Nyak?It is a hydro project about 60 miles from Bethel and when you think of Bethel,you don't usually think of hydro.There is another site right next to it called Kisaralik which an in-house hydrologist said generates approximately 30-megawatts.Mr.Haagenson looked at the estimate required for energy for space-heating and electricity in Bethel,converted it to BTUs from diesel fuel and then converted it to electricity.Approximately 17 megawatts were needed so now a possibility exists that Bethel can run on electric heat.This is the value of understanding what energy needs are required.A resource can be matched with a need.Installation of heat pumps can actually reduce the amount required for space heating by a factor of three,If you had 12 kW electric heat in your house,you'd drop down to four.Options like this are being explored that would allow a mini-grid around Bethel that picks up all of the communities on the Kusko-Delta and AEA Board Meeting June 12,2008 Meeting Minutes 'Page 6 provides electric heat and electricity for their homes.This is the value of the process we are going through right now. Mr.Brad Reeve from Kotzebue said that when they built the local hospital they drilled a hole down to water-well depth and found 160-degree water.A geothermal site in Kotzebue will now be investigated.The comments from community meetings have been very valuable and the communities are going to get buy-in because they are now part of the process. A Technology Day is being planned to explore the different technologies required to convert the energy sources and put each community need together with the resources available and make sure that those energy sources match.We are on right on track with this project. There is information in the board packet on the energy relief plan marked confidential.Any discussion or questions require the Board adjourn to Executive Session. The capital budget has been approved with a 60-day statutory limit to make agreements for transferring funds and finalizing agreements with the different recipients.An attachment shows the energy projects that were approved from the capital budget.When Sara Fisher-Goad testified on HB 152,she informed the legislature that we could use the existing RFP.We have an RFP for approximately $4 million dollars for the Denali Commission and $1 million dollars for the Alaska Energy Authority.If we need additional funds we can use that RFP to award HB 152 funds.Prior to that,we have to work with Alaska Legislative Budget &Audit Committee (LB&A) to get approval and the list from them.When the RFP went out it had a couple of limits:(1) "construction of a project with a cap of $1 million dollars”and (2)"for preliminary work with a cap of $100,000.”We are looking at the possibility of awarding funds from that initial RFP in the near future upon approval from LB&A. A Request for Applications (RFA)will go out later this summer that will allow us to do a rapid evaluation and we would like to publish the RFA for the remainder of the $50 million dollars for this year. Funds were approved for Susitna Hydro.AEA will do an evaluation and assessment of need to determine what the utilities need for electricity,look at future loads,and an integrated resource plan.The next step will be to determine what the river can produce for as far as hydro-electric energy. In response to a question from Commissioner von Scheben,Mr.Haagenson stated the previous Susitna Hydro study was for a 1600 megawatt project with a cost to build the plant estimated at approximately $10 billion dollars.Mr.Haagenson feels this was too big so AEA needs to determine how big it should be and once that is identified,go to the river and decipher what the river can produce.There are some interesting studies after the fact that if you were to build with thin-shell concrete,like the one in the Devils Canyon Dam,you run a river back and even though it's a 1600 megawatt capacity,only 100 megawatts of water runs through that small impoundment area.If you put the big one in,the Wantana Dam,you'll likely get 1000 megawatts,but it costs the most.So the question is,is there some way to put both of them in so you get close to 600 megawatts at the bottom,because it holds back most of the water.We are looking at different sizes and options that will give us 600 megawatts at a low cost. Commissioner von Scheben asked if the environmentalists will buy into the project this time. Mr.Haagenson said that in his opinion the reason the original project was killed was not because of environmental issues,but mainly because it was going to power a smelter.They AEA Board Meeting June 12,2008 Meeting Minutes Page 7 said they didn't want a smelter there and made sure it didn't happen.At the same time oil went to $9 a barrel and it was decided not to waste time when oil was so cheap.That was what was on their minds with the previous Susitna study.A friend who worked on the project said that if it had been built,we would probably have two-cent power up and down the railbelt and $30 billion dollars in the bank.What's the best time to plant a tree?30 years ago,and the second best time is today.We owe it to Alaska to take a look and see if it makes sense and move forward. It it doesn't,we'll look elsewhere. Commissioner von Scheben stated that he previously offered DOT services,which caused some confusion.He suggested that if villages or communities fairly close to each other could be connected by road,if they don't exist right now,they could share services such as a single- power plant,transmission lines,schools,and clinics (e.g.St.Mary's and Mt.Village,Upper and Lower Kalskag). Mr.Winther asked if any of the current hydro projects in the state have not been hugely successful,maybe not at the time they were built,but at this point in time.Mr.Haagenson said there are not that many in the state:Eklutna was built by the federal administration;Snettisham; Cooper Lake;Bradley;Swan Tyee;Terror Lake;and Solomon Gulch.Mr.Winther said they probably produce the cheapest power there is right now.Mr.Haagenson said that in Wrangell 150 people have converted from oil heat to electric heat.Mr.Winther said you can't build enough hydro soon enough,regardless of the cost.To a certain extent,if the size is doubled it's still going to be perfect in 20 years.Mr.Haagenson said you get a very stable price.Once you make the investment in the dam you know the price forever. Commissioner Notti added that when the Eklutna hydro project was built,the headline in Anchorage was "enough energy to last 100 years.We're going to have more growth in Alaska,” but we didn't expect it to be this big. Mr.Winther said that in the last two years Petersburg has gone from 40%usage at Tyee to 60% usage by converting to electric heat and other things.A hydro project big enough for the long term just can't be built.Mr.Haagenson added that the challenge is finding one that has a high- level wake which doesn't affect fish runs.Technology is improving at hydro-kinetic sites,so all different resources are being considered.Tidal wasn't really available 20-30 years ago,but it's getting closer today. The next AEA Board meeting is scheduled for August 14,2008. 9.BOARD COMMENTS ..- Mr.Winther stated that he 'enjoyed working with the new AEA Executive Director,Steve Haagenson.Oy 10.ADJOURNMENT There being no objection and no further business of the Board,the meeting was adjourned at 2:36 p.m. Steve Haagenson,Executive Director/Secretary Alaska Energy Authority /=ALASKA -Renewable Energy Fund IMPORTANT NOTICE Requests for Grant Applications (RFA)AEA-09-004 for Renewable Energy Grant Program RFA ISSUE DATE:September 3,2008 Interested applicants that want to be notified of updates or changes to the Renewable Energy Grant Request for Applications MUST fill out the following information and reply via email or fax;otherwise we will be unable to notify the applicant of possible addenda to this RFA. Please provide the following information by FAX or e-mail to the contact below: Company Name Contact Name Company Address Telephone Number Fax Number E-mail!Address Public Records Notice to Applicants: e 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. e All applications received will be posted on the Authority web site after final recommendations are made to the Legislature. Return to: Grant Manager:Butch White Alaska Energy Authority 813 West Northern Lights Blvd. Anchorage,AK 99503 FAX:(907)771-3942 Phone:(907)771-3048 E-mail:re_fund@aidea.org Requests for Grant Applications AEA-09-004 Page 1 of 25 9/30/08 Requests for Grant Applications HAEA-09-004 for Renewable Energy Grant Program RFA ISSUE DATE:September 3,2008 Grant Manager:Butch White E-mail:re_fund@aidea.org Alaska Energy Authority 813 West Northern Lights Blvd. Anchorage,AK 99503 FAX:(907)771-3942 Phone:(907)771-3048 Requests for Grant Applications AEA-09-004 Page 2 of 25 9/30/08 Table of Contents 1.Introduction and INStructions ............cccccccccsssssceccceresssssnsssrsccsesesececssesssnnsnecseseseesens 5 1.1 PULPOSE..........eeessssnseressscesssenecscsssnssncorccssesensusccesseceenscuauarecessnevensansacsssreesraraveeserecserees 5 1.2 -INEFOCUCTION 20...ccccssssececssesesecosnscnnccesesecensseneneeceseseussaceeseesseesscausscscanecsssseseccscenezencens 5 1.3 Government Roles and Responsibilities .............cccccsssssssessscersecccsssecececeecenssecssscceeess 5 1.4 Eligible Applicants ............eeesssssssseccccecssessnserecseecesssceceesesseecsuacsvescscsecaseessecsctseeeecess 6 1.5 Eligible Project ...........sssscssscsssssscrececeesssensscssececerensnecscceceserensenecsssncunessessesesssnsnsorssens 7 1.6 Filing An Application...ccsessessssrsececcnecsccseeeeeesesessesecseeesteassecasevecsecescescuseassesanenses 7 1.7 Application Deadlines...cesscsstcccececssccscsssecetessseeeerscsetstseceunecessecesecesevsuctenscececs 8 1.8 RFA Project Web Site...ccsccscccceseecscssesscstcessssenseessseenssecusessessscusescessssensessnsnss 8 1.9 Questions about the RFA 20.0.2...cstsescterccecceteccceesnsecsceeeseeseauensoasconcucesecvensecuscenense 9 1.10 Modifications of the RFA .........ccccccsssssssssssssssccersesscccccssnseteseesseacesssssencecesesseceacsssescees 9 1.11 RFA Schedule ..........sscscssseseccececcecescescnsessessseseseesnssssaseesssasenssescesscececcesesceesateneeeeeanes 9 1.12 Development of Grant Regulations .......ccsccccccsssssssssscceesestocsensseserconsceccnscreessceseees 10 1.13 Grant FUNING qu...cceccteeetcccessensccesesoenssonsesenssssasesesessnsnsanssesecccerscssccsenssseneccuecees 10 1.14 Applicant Match .........csccccccssscssssssssssecsssstssssssscsesssnsssssssscsssscsscssescessascesvessvecesssseses 11 1.15 Application Preparation Costs........cssssssssssssssseesesccessccsensssecescccccsssenscosessasecacessesss 11 1.16 Application Content Requirements ............:ss:sssssscsscsesscsssscsccnsssnssssscsssesssesssasessnes 11 1.17 Authorized Signatur e............ccccsccccccssssssssssssssssseeeeeseecnnensensesceesececcsscussescesescnecenssees 12 1.18 Applicant's Certification ...........ccccccccssssscsssessscesceessssseccccnsnsssssecoceccnseseeeseseeceeesanenens 12 1.19 Correction,Modification or Withdrawal of Applications ..............0.sssssssesecenenseess 12 1.20 Review of Applications -General ..............ccscsssssescccovecsecccsnsreccnscuscussensserseesserseess 12 1.21 Public Notice and Recommendations to the Legislature............cccccccccsscssssseeeens 13 1.22 Notice of Intent to Award a Grant ...........cccccsssssserecccnsserecccsnsseceescseccecsscssersussersesees 13 1.23 Grant AgreeMent ..........ccscccccsesctsccscnsenserseseccenecsonsnccessoesacsecaesonerseeceocccenanssesesessonios 13 1.24 Failure to Proceed........csscescceecescecsssscesssseeeeeseeeseceescosecsnsssstesesseoensseseresssesessenasneesenen 14 2.Project REQUITEMENHS..........ccccccernrescecosesseneeserensesssoscnseecssssessenccaecesseessersessoousssenes 14 2.1 Project Management Requirements .............sscccescsssssseccccscsscccscescccscsssccccensseseosesseeess 14 2.2 Project Phase DeSCriptions ..............:ccscsssccecsscccescseessscaseseseesesoacceneceesesereceneeeeeeersoers 15 2.3 Phase |-Reconnaissance RequireMent .........ccssccescesccesssrccerssescesseeessenassescnsvasenses 15 2.4 Phase Il -Feasibility Analysis and Conceptual Design Requirements ................17 2.5 Phase Ill -Final Design and Permitting Requirements ...............ssscccsssesessccnseeeeees 18 2.6 Phase IV -Construction Requirements..............sccccsscsssseccesessencssessccecsscessscnesccncers 18 3.Grant REquireMent .......ccccscccscscssesseecscscssscecscenecssseeessonssceusuanasscoosssessnsecarsasaonesenees 19 3.1.Declaration of Public Benefit..................ccsssssssssseeeeececcccecssssssesscorsenssseeceseceenessoessneens 19 3.2.Grantee Project Manager .........ssscsccsssssesccccssssssereccsscssecocspasseccsenesssnsnssesscaessnsscoennenes 19 3.3.Approval to Proceed With Next Phase..............ccsscscsssccssssssssessccseascessessenseeesccoessenss 20 3.4.Contracts for Engineering Services...............sccsscccceescccscessssssnsccconsccesccceceeeesseenenenss 20 3.5.Site COMO]0.0...eee cssesssnensenssosevoesccnsseeensenanensessosecessessccunsessoscansssonsnssoucopensseessenpenenss 20 3.6. PELiMitS .......ssssececesssccnssnessoneeeeescececaseusenscuseecenanensoseescenssansesconsccsssonsrscacensessensentsssnossonees 20 3.7.Exclusion of Existing Environmental Hazards ..................::ssecssssssesssessesscssseonesnoenes 20 3.8.Environmental Standards ..........ccccccccssccssssesseccesssscnsssceesecsccnsssssasseneonensssssscessessnacoenss 20 3.9.Current Prevailing Rates of Wage and Employment Preference .............:scssseee 21 3.10.Construction Plans and Specifications ReViIeW.............cccccsccsscconsscecnenenceseeecerecs 21 3.11.Construction Contractor Insurance and Bonding ...............csscsssesseeeeeeeesceesensenees 21 3.12.Post Construction Certification ..............csssssssssssesseeeccnscsssseseescesssssenserersnenessnnoness 21 3.13.Ownership Of Facilities .............ccccssscccsssseercsssccvesseccenccceseececeersnsessusessecensscusessaseess 21 3.14.Operation and Maintenance Of FacilitieS...........cccccccscsssssssssceecessssssscsscsesessnseesees 21 3.15.Operation and Maintenance (O&M)Reporting..............sssccccsssscrsssessucccsssaneenessenes 22 3.16.Tariffs &Rates for Use of Grant-Funded Assets .............ccsccccccssssssseseesereceeneessess 22 3.17.Grant-Funded Assets Not Included in PCE...ssessssssssccecccsresssccescceneccnensens 22 Requests for Grant Applications AEA-09-004 Page 3 of 25 9/30/08 4.Application Evaluation Process ............ccccccscscsnessscssssesssssesseeeseetecuecesenseeeseaseseors 22 Stage 1 Review:Completeness and E|ligibility...............csccccsscssscsscssssersnseesseessesssenseseeoes 23 Stage 2 Review:Project Feasibility ............cscssscsscssscsssscsnccesssssssscsscceessrsusenseasssessaseeeoess 23 Stage 3 Review:Final Evaluation &Ranking ............ssccesseeececccescssssssscnsesescnenssenseenseesereoers 24 5.APPeNdICeS ...........ccsseeseeeenees wecceaeeecnuaeeccnececcsusneeecceesersonsencuseenseseaeereceanerssnnseesouss 25 Application FOr .......ccccccesesseseecccnssereeeceonccccssererseneeesscescoesnsenssesccuseuensucossssanceessscasseesersenesecss 25ApplicationCostWorksheetseseenencecunsaccesonsnscausossecsssenseeceeousescoeessssecuccersneucasensensecesereesesease25 Grant Budget Form and Budget Form Instructions........cccccccccssssscsscsssscsssseccsssscereesecereees 25 Sample Grant Agreement ........cscssscsssssccseceerssessssesevecsssscnnersascneuneccnssosessscensuesccsssceseesseeetees 25 Requests for Grant Applications AEA-09-004 Page 4 of 25 9/30/08 1.Introduction and Instructions 1.1 Purpose Pursuant to Chapter 31 Session Laws of Alaska 2008 (referred to below as the program legislation),which establishes the renewable energy grant recommendation program in new Alaska Statute AS 42.45.045,the Alaska Energy Authority ("AEA”or "Authority”)is soliciting competitive applications from qualified applicants for the purpose of recommending grants for renewable energy projects to be funded by the Alaska State Legislature.Applications will be accepted and evaluated in accordance with AS 42.45.045 and this Request for Applications (RFA).The program legislation,including new AS 42.45.045,can be found on-line at http:/Avww.ledis.state.ak.us/PDF/25/Bills/HB0152Z.PDF 1.2 Introduction This RFA sets out the purpose,instructions,requirements,evaluative criteria,and other information on submitting an application to the Authority for recommendation for grant funding. This RFA is organized as follows: Section 1:Introduction and Instructions -describes program and procedural requirements for preparing and submitting an application. Section 2:Project Requirements -describes project information that is required to be discussed in each application. Section 3:Grant Requirements -describes specific.grant terms and conditions related to this program. Section 4:Application Evaluation Process and Criteria -describes the criteria that will be used to evaluate and rank each application. Section 5:Appendices -provides additional reference material to assist in application preparation,application forms,grant documents,and applicable law. Accompanying this RFA are application forms and instructions to use in preparing your application for a Renewable Energy Grant. 1.3.Government Roles and Responsibilities The Alaska Legislature established the Renewable Energy Grant Fund and the Renewable Energy Grant Recommendation Program in Chapter 31 SLA 2008,which the Legislature enacted in 2008.This bill included a new statute,AS 42.45.045, outlining the program and giving the Alaska Energy Authority responsibility for administering the program. Requests for Grant Applications AEA-09-004 Page 5 of 25 9/30/08 The Legislature is responsible for final approval and funding of all grant projects.For FYO9 grants,Chapter 31 SLA 2008 established an expedited process of review of projects by the Legislative Budget and Audit Committee (LB&A). The Authority is a public corporation of the State of Alaska with the purpose to promote, develop,and advance the general prosperity and economic welfare of the people of the State by providing a means of financing and operating power projects and by carrying out the powers and duties assigned to it.AS 42.45.045 gives AEA the authority to solicit applications for projects,develop and implement regulations,and recommend grants for renewable energy projects to the Legislature.The Authority also has the responsibility of establishing regulations for the purpose of implementing this program. An Advisory Committee has been established for the Authority to consult with in the development of regulations and ranking of applications. The AEA Grant Manager is responsible for accepting applications,coordinating the evaluation of all applications,and developing the list of grant projects to be recommended to the Legislature. An AEA Project Manager will be assigned to assist each Grantee whose application is selected for grant funding.Tasks and level of the Authority's project management will vary according to the project management plan developed under the grant agreement. At a minimum,the AEA Project Manager will clarify grant requirements,review reports and billings,and track progress of the grant project. The Executive Director of AEA or his designee will approve the final grant and carry out all other duties as defined in statues,regulations,and this RFA. 1.4 Eligible Applicants To be eligible for a grant recommendation the applicant must demonstrate formal approval and endorsement of its project by its governing authority (such as board of directors or executive management if it does not have a governing board)and be one of the following types of entities: 1.An electric utility holding a certificate of public convenience and necessity under AS 42.05; 2.An independent power producer (for the purposes of this grant an independent power producer is a corporation,person,agency authority, or other legal entity or instrumentality that owns or operates facilities for the generation of energy to be used at least 50%by the public and that is not an electric utility); 3.Alocal government;or 4.A governmental entity,(which includes tribal councils and housing authorities). Applications whose applicants do not meet these requirements will be rejected without further evaluation. Requests for Grant Applications AEA-09-004 Page 6 of 25 9/30/08 1.5 Eligible Projects The Authority may recommend grants for feasibility studies,reconnaissance studies, energy resource monitoring,and/or work related to the design and construction of an eligible project.Applications for projects that are not within the scope of eligible projects will be rejected without further evaluation. To be eligible for a grant recommendation the applicant's project must: 1.5.1.Be a new project not in operation on August 20,2008 or an addition to an existing project made after August 20,2008. and 1.5.2 Bea project that generates energy from or involves the direct use of: e wind,solar,geothermal,wasteheat recovery,hydrothermal,wave,tidal,river in-stream,hydropower;or e low-emission nontoxic biomass based on solid or liquid organic fuels from wood,forest and field residues,or animal or fish products;or e dedicated energy crops available on a renewable basis;or e landfill gas and digester gas. Or e be a facility that generates electricity from fuel cells that use hydrogen from renewable energy resources or natural gas. Or e bea natural gas project (other than landfill or digester gas)that benefits a community that: e has a population of 10,000 or less;and e does not have economically viable renewable energy resources it can develop. Or e bea transmission or distribution infrastructure located in Alaska that links an eligible renewable energy project or eligible natural gas project to other transmission or distribution infrastructures.(An applicant requesting a grant for transmission or distribution infrastructure is not required to be involved in the financing or construction of the renewable energy project or natural gas project it may be connecting.) 1.6 Filing an Application Applicants must submit one (1)hard copy of their complete application,including appendices that can be duplicated,and one (1)electronic version on CD in PDF or other print-ready electronic format in a sealed envelope(s)clearly labeled: From:Applicant's Return Address Requests for Grant Applications AEA-09-004 Page 7 of 25 9/30/08 To:Alaska Energy Authority AEA-09-004 -Renewable Energy Grant Application 813 West Northern Lights Blvd Anchorage,AK 99503 Phone:907-771-3000 1.7 Application Deadlines The Authority is seeking to recommend projects based on applications that clearly demonstrate a public benefit from the proposed project.It is understood that some projects may be ready to proceed immediately and others will require more work to develop.To address differing readiness and need for funding,the Authority intends to solicit applications in two rounds. The first round is intended to solicit applications for projects that may be ready and able to proceed quickly with the anticipation that grants would be awarded by December 2008. The second round is intended to solicit applications for projects that may require further development or that may take more time to prepare applications.Additionally,the second round is intended to provide the Authority with recommendations to the Legislature for Fiscal Year 2010 funding. First round applications should be received by the Authority at the address in Section 1.6 no later than 5:00 p.m.,October 8,2008. Second round applications must be received by the Authority at the address in Section 1.6 no later than 5:00 p.m.,November 10,2008. Failure to meet the deadlines may result in the application being rejected without review. The Applicant is solely responsible for complete and timely submission of its application. The Authority accepts no responsibility for submission of applications or for applications that are received after the application deadlines,whether because they were misdirected,delayed,or erroneously addressed or for any other reason. 1.8 RFA Project Web Site The Alaska Energy Authority web site at www.akenergyauthority.org has been set up to make information available to the public regarding the project.The site contains the following information and documents: The RFA Application and Grant forms A summary of relevant questions received regarding the RFA and responses Clarifications and addenda to the RFA A list of all applications received Status of applications received upon completion of each review stage Requests for Grant Applications AEA-09-004 Page 8 of 25 9/30/08 e PDF versions of all applications received (upon completion of the review and ranking process) 1.9 Questions about the RFA Applicants should carefully review all documents and the Authority web site prior to contacting the Grant Manager with questions.Any questions regarding the RFA or grant documents should be directed to: Grant Manager:Butch White Alaska Energy Authority 813 West Northern Lights Blvd Anchorage,AK 99503 Phone:(907)771-3048 Fax:(907)771-3942 E-mail:re_fund@aidea.org Questions that require clarification or interpretation of this RFA that the applicant cannot answer by careful review of the RFA should be submitted in writing (letter or e-mail)no later than 10 business days before the November 10,2008 application due date. The Grant Manager may contact the applicant directly by phone or e-mail to respond to non-material questions.The Grant Manager will post the answer to material questions on the Project website. 1.10 Modifications of the RFA Applicants may submit written requests for modifications to this RFA to the Grant Manager no later than September 17,2008. Acceptance or denial of the request is solely in the discretion:of the Authority.The Authority may not modify the requirements of AS 42.45.045 or Chapter 31 SLA 2008. Failure of the Grant Manager to issue a written modification within 10 days from submittal of request shall be considered a denial of the request. Modifications to this request for applications may be issued at any time prior to the deadline for receipt of applications at the Authority's option.If modifications are issued within 10 days of the deadline for applications,the application deadline may be extended to allow time for applicants to respond to any changes.All modifications to this RFA will be in writing and posted to the Project web site at www.akenergyauthority.org and the Authority will provide e-mail notice to those registered to receive notices as described on the cover page of this RFA. 1.11.RFA Schedule Below is a schedule of critical dates as it relates to this request and award of grants. Actual dates after the application due dates are tentative and may vary depending on the number of applications received,the complexity of applications,and timely completion of review by the Legislature. Requests for Grant Applications AEA-09-004 Page 9 of 25 9/30/08 Task Round One Round Two Application Due Date 10/08/08 11/10/08 Complete Evaluation of Applications 11/10/08 12/19/08 Submit Projects for Approval by Legislative 11/19/08 1/30/09 Budget &Audit (LB&A)or Legislature Projects approved for funding (contingent upon |12/8/08 5/15/09 LB&A and Legislative Action) Finalize Award Documents (Contingent upon the |12/19/08 7/1/09 Authority receiving all documentation needed for award) These dates are based on the assumption that Round One involves FY2009 funding and Round Two involves only FY2010 funding.Actual award dates for Round Two may vary if FY2009 funding is still available or additional appropriations are made available prior to 5/15/2009. 1.12 Development of Grant Regulations Applicants should be aware that the Authority will be following the public process to develop regulations for this program as required by statute (AS.45.45.045 (d)(1)).Draft regulations may be posted during the solicitation period of this RFA.This RFA,and any grants awarded as a result of this RFA,may be modified if there are any conflicts between the regulations and this RFA or proposed grant terms or conditions. 1.13 Grant Funding A grant resulting from this RFA is subject to legislative appropriation.The program legislation indicates the Legislature intends to provide $50 million per year for the next five (5)years for Renewable Energy Grants under this program;however the actual amounts available for the program and for any particular grant depend on the Legislature's appropriations.The Legislature has appropriated $100 million for FY2009 grant awards subject to LB&A approval. The Authority must receive approval from the Legislature or LB&A prior to award of any grant. AEA has established initial funding allocation targets as indicated below as goals in its selection of projects to recommend.The targets are preliminary and subject to adjustment based on the available funding and the type,number,and quality of projects submitted in each round of submissions. Project Type Target Allocation -%of Grant $'s Recommended Reconnaissance Study 20% Feasibility/Conceptual Design or Energy Resource Monitoring Final Design and Permitting 80% Construction Requests for Grant Applications AEA-09-004 Page 10 of 25 9/30/08 Grantees may proceed with work on projects prior to award,provided that: 1)They do so at their own risk as there is no guarantee projects will be funded or funded at the level requested in their application. 2)They must have sufficient funds from sources,other than this program to meet their project commitments. 3)No work performed or obligations incurred prior to August 20,2008 will be considered for reimbursement. The Authority may recommend eligible projects for FY2009 funding from either Round One or Round Two. 1.14 Applicant Match When reviewing applications the Authority will favorably consider applications that commit the applicant to provide either a fixed amount or percentage of matching funds to complete the project. Applicants should identify the amount and source of matching funds or other resources (collectively referred to as "match”)the applicant will contribute to the project based on the total proposed grant project budget. Proposed match based on a percentage of total project budget means that the applicant will contribute a percentage of cash or in-kind support based on the total project budget.For example,if the total project budget is $60,000,and the Grantee's match is 20%of the project costs,the Grantee must provide $12,000 ($60,000 x .2=$12,000).The amount of grant funds would be $48,000. If matching funds or in-kind contributions are proposed,the applicant will be required in the grant award to provide the match as proposed. See the budget form instructions and clarification of matching requirements. 1.15 .Application Preparation Costs The Authority shall not pay for any costs incurred by the Applicants to prepare and submit their application.No costs incurred by the Applicants in preparation of their application may be charged as an expense of performing the grant. The only reimbursable costs will be those allowed in the grant agreement signed by the Authority. 1.16 Application Content Requirements The application must address all the information required as noted in Section 2 for the type of project proposed.Applicants should download and complete the MS Word application and Excel budget forms provided from the Project web site (www.akenergyauthority.orq). Requests for Grant Applications AEA-09-004 -Page 11 of 25 9/30/08 Below is a list of document names and their purpose: Document Name Description Date |Software version GrantApp.doc Application Form and Instructions 9/3/08 |Word 2003Costworksheet.doc Application Cost Worksheet 9/3/08 |Word 2003 GrantBudget.xls Grant Application Budget Form 9/3/08 |Excel 2003 GrantBudgetinstr.pdf Instructions for Application Budget |9/3/08 |Word 2003 Form SampleGrantAgreement.pdf |Example of Standard Grant Form 9/3/08 |Acrobat 7 1.17 Authorized Signature Applications must be signed by an individual authorized to bind the Applicant to its provisions.The application will be considered valid for a minimum of 180 days.The application may be extended by the mutual agreement of the Authority and the Applicant... 1.18 Applicant's Certification By signature on their application,Applicants certify that their application is truthful and certify that they are complying and will comply with:1)the laws of the State of Alaska; 2)the applicable portion of the Federal Civil Rights Act of 1964;3)the Equal Employment Opportunity Act,the Americans with Disabilities Act (ADA)and the regulations issued thereunder by the federal government;and 4)all terms and 'conditions set out in this RFA. 1.19 Correction,Modification or Withdrawal of Applications An application may be corrected,modified or withdrawn by providing a written request from an authorized representative of the Applicant to the grant manager before the time and date set for receipt of the applications. After applications are opened,modifications may be allowed prior to completion of the evaluation process if the Authority determines that it is in the best interest of the program to allow modifications. Applicants who may be recommended for grant awards may be requested to clarify, modify,or correct their application prior to recommendations being sent to the Legislature or prior to award of a grant if the Authority determines that it is in the best interest of the program. Applicants who fail to respond to requests for clarifications,modifications,or corrections within the period specified in the request may have their application rejected or removed from the list of recommended projects. 1.20 Review of Applications -General Applications will be reviewed in three stages by application evaluation committees, which may include the Authority staff,consultants,and members of the Advisory Committee established under the program legislation. Requests for Grant Applications AEA-09-004 Page 12 of 25 9/30/08 Stage 1 -Completeness and Eligibility Review Stage 2 -Technical and Financial Feasibility Review Stage 3 -Final Evaluation and Ranking for Recommendations Criteria that will be used for each stage are listed in Section 4. Applications that do not comply with AS 42.45.45 and all of the material and substantial terms,conditions,and requirements of this RFA may be rejected.If an application is rejected the applicant will be notified in writing that its application has been rejected and the basis for rejection. The Authority may waive minor requirements of the RFA that do not result in a material change in the requirements of the RFA and do not give an applicant an unfair competitive advantage. At any stage in the review process the Authority may request clarifying information and the applicant will have a specified amount of time to respond to the request for information.Failure to respond timely or provide adequate information will result in the application being rejected. If information is sufficient the application will be forwarded through to the next stage of review. 1.21.Public Notice and Recommendations to the Legislature Upon completion of Stage 3 the Authority will forward to the Legislature a summary of all applications received,their status,the technical score and the final rank of all applications,and the Authority will post on its web site the applications,a brief summary of each project,and the final ranking and disposition of all applications.The total cost of all recommended projects may be for more or less total dollars than the current funding authorized by the Legislature.Funding of any project is subject to LB&A approval for Fiscal Year 2009 projects and Legislative approval for Fiscal Year 2010 projects. Applicants may be required to provide additional information to the Legislature upon request. 1.22 Notice of Intent to Award a Grant Upon approval by LB&A for FY2009 grants or approval by the Legislature for FY2010 grants,the Authority will provide a Notice of Intent to Award a grant to the applicant for each approved grant project.Grantees whose authorizations are less than what was requested or whose project scope,schedule,or budget may have changed from when their application was originally submitted will be required to update their application to assure the grant is consistent with proposed project and the funding available. 1.23 Grant Agreement Applicants whose projects are selected for grant funding will be required to sign a Grant Agreement prepared by the Authority that contain the terms and conditions in the Sample Grant Agreement form dated 9/3/08 included as an appendix to this document. The Authority may modify its standard form grant agreement if necessary for this program or for particular projects. Requests for Grant Applications AEA-09-004 Page 13 of 25 9/30/08 1.24 Failure to Proceed If an Applicant is unable to respond and indicate acceptance of the Grant Agreement within 30 days of receipt of the Grant Agreement or provide an update to its project as may be required;then the offer of the grant may be withdrawn by the Authority and the grant funds may be offered to another eligible grant applicant. 2.Project Requirements Renewable energy projects funded under this grant program should proceed in phases as described in this section,with the Grantee expected to substantially complete each phase before receiving approval and funding to proceed to the next phase. Applicants are expected to follow the accompanying instructions and use the application forms to provide information required to be considered for a grant recommendation. An application under the RFA should propose grant funding for one or more phases of the Applicant's renewable energy project as described below,and should include sufficient information to allow for the evaluation and ranking of the application.The depth of information needed with the application will vary depending on the type and complexity of the project,the number of phases for which grant funding may be requested,the amount of grant funds requested,and the estimated total project costs. All applicants are required to have a project management plan they intend to follow that includes who is going to manage the project,how it is going to be managed,a schedule with milestones,and how project risks will be mitigated.The level of detail in the plan will vary depending on the project phase(s),amount of funds requested,and complexity of the project. 2.1.Project Management Requirements The Applicant is responsible for implementing and executing a plan for managing the project so that the project is completed within the scope,schedule and budget proposed in the application. Skint te GES "oes.Project Managementsitesi eaters aeProjectManagerTheApplicantmustdesignateaprojectmanager(s)responsible for managing the project for the Grantee.This may be: e Anemployee of the Grantee e Aconsultant e Or other partners committed to the project (for example, Native Corps,other Utilities,IPPs,or Government Entities. e If not known,the Grantee should indicate how they intend to select project managers. Project Schedule _|Schedule for the proposed work that will be funded by this grant.Project Milestones |Identifies key tasks and decision points in the project schedule.Project management milestone charts and descriptions of major project decision points are encouraged. Project Resources |Identifies what people,equipment,or services will be used to accomplish the project.Includes any commitments the Grantee Requests for Grant Applications AEA-09-004 Page 14 of 25 9/30/08 may have or reference any existing contracts or the selection process that may be used for major equipment purchases or contracts. Project Identifies how the Grantee will monitor the project and keep the Communications Authority informed of the status. Project Risk Identifies potential problems and how they will be addressed. 2.2.Project Phase Descriptions The application should describe the project proposed for grant funding by phases and demonstrate a likelihood that the project will be successfully completed and will provide substantial public benefits.Applicants who have completed a project phase will be required to document successfully completing the phase and show a positive public benefit resulting from the project prior to the Authority releasing funds for a following phase. Each type of technology may have issues or tasks that are specific to that technology that may need to be addressed in addition to the specific issues or tasks identified in each phase. Project phases that should be addressed in the applicant's project description are as follows.Within each phase,the major project tasks necessary to complete the phase should be addressed. Phase 1 -Reconnaissance A preliminary feasibility study designed to ascertain whether a feasibility study is warranted. Phase II -Feasibility Analysis,|Detailed evaluation intended to assess technical, Resource Assessment,economic,financial,and operational viability and to Conceptual Design narrow focus of final design and construction. Phase Ill -Final Design and Project configuration and specifications that guide Permitting construction.Land use and resource permits and leases required for construction. Phase IV -Construction,Completion of project construction and beginning of Commissioning,Operation,operations.It also includes follow-up O&M reporting and Reporting requirements. 2.3 Phase 1l-Reconnaissance Requirements The purpose of a Reconnaissance Study is to determine whether further study is warranted.A Reconnaissance Study is required to consider and address the information and tasks below. ie HTNLeaSESE 5Ss Phase |=Reconnaissance seeseradie een:Proposed Energy |General description of the extent and amount of the renewable Resource resource Existing Energy For rural power systems and/or facility heating systems System e Basic configuration (number,size,age,and type of gensets Requests for Grant Applications AEA-09-004 Page 15 of 25 9/30/08 and boilers;efficiency;operating hours) Capital and replacement costs Annual O&M cost and schedule Annual fuel consumption and fuel price Load information (peak,minimum,average,and future trends) Plans for system upgrades For all systems Residential and commercial electrical service rates Avoided cost of energy Proposed System Design Description of renewable energy technology specific to project location Alternative system discussion Optimum installed capacity Annual generation Anticipated barriers Basic integration concept Proposed System Costs Total anticipated project cost for this phase Projected capital,O&M,and fuel costs Projected debt financing if applicable Project Benefits Annual fuel displacement and savings over the project life Annual revenue from energy sales,tax credits,green tags, and other incentives Discussion of non-monetary benefits Energy Purchase/Sale Identification of potential energy market Potential energy purchase and sales rates Land Ownership Landowner(s)identified and contacted Permits List of applicable permits Anticipated permitting timeline Potential regulatory barriers Environmental Complete environmental screening that addresses: Threatened and Endangered species and other habitat impacts Fisheries and wildlife protection Water and air quality impacts Wetland and protected areas Archaeological and historical resource impacts Land development constraints Telecommunications and aviation impacts Visual and aesthetics resource impacts Other environmental barriers Analysis and Recommendations Basic economic analysis of alternatives Recommendations for additional project development work Requests for Grant Applications AEA-09-004 Page 16 of 25 9/30/08 2.4 Phase Il -Feasibility Analysis and Conceptual Design Requirements Phase Il Feasibility Analysis requires a detailed evaluation intended to further assess technical,economic,financial,and operational viability of a project and to narrow the focus of final design and construction.In addition to addressing all the requirements of the Phase |described above,a feasibility analysis should address the information and tasks below. Se Riese RIN Phase Il -Feasibility Analysis,Conceptual Design 3:en73ieKs? Proposed Energy Site-specific assessment of available energy resource following Resource industry standards usually based on field measurements, discussions with resource owners,and other onsite activities. Examples of assessment activities include e Collection and analysis of meteorological tower data at proposed wind turbine locations e Assessment of geological data from surface investigation and test wells for geothermal and natural gas projects e Stream gauging and hydrological modeling for hydroelectric projects e Analysis of wood and sawmill residue availability and delivered cost to biomass energy project locations Existing Energy e Annual load profile-power projects may require onsite System measurement e Load growth projections e Transmission system layout and capacity e Retirement schedule Proposed System e Identification and analysis of system alternatives Design e Recommended alternative including discussion of impacts on existing system e Assessment of project site,including geotechnical characteristics as necessary e Annual energy production profile e Conceptual system design e Conceptual integration design e Identification of remaining technical barriers Project Costs e Conceptual level cost estimates for final design and construction e Annual O&M and fuel costs e Other project costs including leases,taxes,insurance,andfinancing. Project Benefits e Annual fuel displacement and savings over the project life e Detailed analysis of revenue from energy sales,tax credits,green tags,and other incentives e Discussion of non-monetary benefits Energy e Preliminary energy purchase or sales agreement Purchase/Sale Land Ownership e Assessment of site control requirements for proposed project e Authorization from land owners for onsite feasibility Requests for Grant Applications AEA-09-004 Page 17 of 25 9/30/08 activities Permits Obtain authorizations from all applicable agencies for any use of land or resources for feasibility activities Environmental Site-specific assessment of resources that may be significantly affected.Examples include fish and wildlife habitat assessment,visual impact modeling,and air quality assessment. Plan for addressing potential environmental impacts Analysis and Recommendations Comprehensive economic and financial analyses of alternatives Recommendations for project design and construction activities Draft operational and business plan 2.5 Phase IIl --Final Design and Permitting Requirements Building on information gathered in Phase |and Il applicants are required to complete Phase Ill prior to construction.The purposes of Phase Ill are to establish the project configuration and specifications that will be used to:guide construction,refine project costs estimates,finalize business plans,and obtain land use and resource authorizations required for construction.Work should address the information and tasks below. WALIE gih gteiete neeteEeeRNGipRa3yeaRenewableEnergy Resource ye alas itPhase Ill -Final Design &Permitting "<>: Updated data to confirm that resource is still available Existing Energy System Final engineered and approved energy system configuration including upgrades Proposed System Design Final engineered and approved system design Final engineered and approved integration design Interconnection study Project Cost Final engineer's estimate of project cost Project Benefits Detailed financial analysis based on chosen business structure and applicable costs,revenues,and incentives Power Purchase/Sale Executed power purchase/sales agreement Land Ownership Final land use authorizations obtained Permits All necessary permits obtained Environmental All environmental issues resolved Analysis and Recommendations Final operational and business plan 2.6 Phase IV -Construction Requirements The purpose of the construction phase is to construct and commission the project,begin operations,and provide follow-up reports on operations and maintenance for a specific period of time to document the program's impact on the community.Grantees are expected to cover all costs of operations and maintenance in compliance with their Requests for Grant Applications AEA-09-004 Page 18 of 25 9/30/08 operational and business plans developed in Phase IIl.The construction phase will address the information and tasks below mors”.Phase IV-Co Renewable Energy Resource nstruction,Commissioning,Operation,and Reporting ..°.\2"Lu: Monitoring to verify and update projections and system efficiency Existing Power System Coordination of conversion,integration,or surplus of existing system Proposed System Design Construction plan and schedule Commissioning plan and schedule Modifications to final design during constructionProjectCostActivelytrackprojectcostsagainsttheprojectbudget Propose budget modifications as needed Manage cost overruns Environmental Environmental monitoring as required Permitting Reports as required by permitting agencies Analysis and Recommendations Update business plans and power purchase agreements as needed to account for actual construction costs e Final project report including as-built specifications and drawings,final budget,schedule,and recommendations e Periodic operation and maintenance reports as required by grant including actual O&M,fuel,and equipment costs; O&M measures and schedule;energy output;project availability;conversion efficiency;renewable energy resource;and recommendations |3.Grant Requirements To receive renewable energy grants,applicants must comply with the following standard terms and conditions and the other terms and conditions in the Authority's standard grant document (see SampleGrantAgreement.pdf).If the Grantee is a tribal entity,a waiver of sovereign immunity also will be required as a condition of the grant. 3.1.Declaration of Public Benefit The Grantee acknowledges and agrees that the Project shall be constructed,owned and operated for the benefit of the general public and will not deny any person use and/or benefit of Project facilities due to race,religion,color,national origin,age, physical handicap,sex,marital status,changes in marital status,pregnancy or parenthood. 3.2.Grantee Project Manager For construction projects,the Grantee will contract or hire competent persons to manage all phases of the Project subject to approval by the Authority.Work at a minimum will include:management of Grantee's labor for the project,engineering firms and consultants,procurement,management of construction contractors,selection of Requests for Grant Applications AEA-09-004 Page 19 of 25 9/30/08 equipment,review of plans and specifications,on-site inspections and review and approval of work,and other duties to ensure that the completed work conforms with the requirements of the grant and the construction documents. If the Grantee fails to provide adequate project management the Authority may terminate the Grant or assume project management responsibilities with the concurrence of the Grantee.Costs for a Project Manager must be reasonable to be considered an eligible grant expense. 3.3.Approval to Proceed with Next Phase A grant award may be for one or more phases of a project.The Grantee must achieve substantial completion of work or of designated construction milestones and receive approval from the Authority prior to proceeding to the next phase of work. 3.4.Contracts for Engineering Services In the event the Grantee contracts for engineering services,the Grantee will require that the engineering firm certify that it is authorized to do business in the State of Alaska and provide proof of licensing and insurance. 3.5.Site Control If the grant Project involves the occupancy and use of real property,the Grantee assures that it has the legal right to occupy and use such real property for the purposes of the grant,and further that there is legal access to such property.The Grantee is responsible for securing the real property interests necessary for access and the construction and operation of the Project,through ownership,leasehold,easement,or otherwise,and for providing evidence satisfactory to the Authority that it has secured these real property interests. 3.6.Permits It is the responsibility of the Grantee to identify and ensure that all permits required for the construction and operation of this Project by the Federal,State,or Local governments have been obtained unless otherwise stated in Appendix C.These permits may include,but are not limited to,Corps of Engineers'Wetlands Permit,State Historic Preservation Office,State Fire Marshal approval,rights-of-way for the pipelines, and site control,including any necessary Coastal Zone Management coordination through the Division of Coastal and Ocean Management (DNR). . 3.7.Exclusion of Existing Environmental Hazards Grant funds will not be awarded for and may not be used for environmental investigation,removal or remediation of contamination,remediation of existing facilities or properties,or any other environmental matters,unless specifically provided in the Grant Agreement.In addition,grant funds will not be awarded for and may not be used for the decommissioning or removal of any existing facilities except as specifically provided in the Grant Agreement. 3.8.Environmental Standards The Grantee will comply with applicable environmental standards,including without limitation applicable laws for the prevention of pollution,management of hazardous waste,and evaluation of environmental impacts. Requests for Grant Applications AEA-09-004 Page 20 of 25 9/30/08 3.9.Current Prevailing Rates of Wage and Employment Preference Certain grant Projects are constrained by the provisions of AS 36.PUBLIC CONTRACTS.To the extent that such provisions apply to the Project,which is the subject of this Grant Agreement,the Grantee shall pay the current prevailing rates of wage to employees as required by AS 36.05.010.The Grantee shall also require any contractor to pay the current prevailing rates of wage as required by AS 36.05.010. Further,in accordance with AS 36.10.010,95%(percent)of the work force employed in the completion of this Project shall be local residents where they are available and qualified.If 10 or fewer persons are employed,then 90%(percent)of the project work force shall be local residents where they are available and qualified. 3.10.Construction Plans and Specifications Review Prior to public notice of bidding a construction project the Grantee will provide the plans and specifications to the Authority for review.Concurrence that the plans and specifications are consistent with the grant award must be received before grant funds will be released for construction related costs. 3.11.Construction Contractor Insurance and Bonding The Grantee must require construction contractors to provide proof of adequate insurance and payment and performance bonding prior to beginning construction on a project in accordance with AS 36.25.010. 3.12.Post Construction Certification Upon completion of construction the Grantee will submit a final report that includes: e Certification that all work is completed in accordance with the grant and all costs claimed are eligible costs and represent work completed on the Project e Summary of total project cost including detailed funding sources and any outstanding debt e Certification that there is a release of any contractor or subcontractor liens on the project e ldentification of any outstanding construction issues e As-built drawings 3.13.Ownership of Facilities The Grantee shall assume all liabilities arising from the ownership and operation of the Project.Grantee will not sell,transfer,encumber,or dispose of any of its interest in the facilities constructed with this grant funding during the economic life of the Project without prior written approval of the Authority. 3.14.Operation and Maintenance of Facilities The Grantee is required to maintain and operate the facilities defined in their application for the useful life of the facility or the specific period of time designated in the grant agreement. In the event that the Grantee is no longer operating the facilities for the intended purposes the Authority may require the Grantee to reimburse the Authority an amount based on the total contribution of the Authority,the value of the assets,and the terms Requests for Grant Applications AEA-09-004 Page 21 of 25 9/30/08 and conditions of this agreement.The Authority may require that the assets acquired under this agreement be sold and the proceeds returned to the Authority. 3.15.Operation and Maintenance (O&M)Reporting For all construction projects the Grantee must provide an O&M report that provides detailed description of operations and maintenance activities and cost,energy output and fuel displacement estimations,and discussion of operational issues.Failure to provide this information may result in the Grantee being ineligible for future grant funds from the Authority. 3.16.Tariffs &Rates for Use of Grant-Funded Assets Rates for power provided as a result of generation or transmission facilities built with grant funds may be subject to review and approval by the Regulatory Commission of Alaska (RCA),or if the rates are not subject to RCA review and approval,they may be subject to review and approval by the Authority to ensure reasonable and appropriate public benefit from the Project. 3.17.Grant-Funded Assets Not Included in PCE The Grantee agrees that it will not include the value of facilities,equipment,services,or other benefits received under this grant as expenses under the Power Cost Equalization Program or as expenses on which wholesale or retail rates or any other energy tariffs are based. 4.Application Evaluation Process Applications will be reviewed in three stages by application evaluation committees, which may include the Authority staff,consultants,and Advisory Committee members: Stage 1-Completeness and Eligibility Review Stage 2 -Technical and Financial Feasibility Review Stage 3 -Final Evaluation and Ranking for Recommendations Applications that do not comply with AS 42.45.45 and all of the material and substantial terms,conditions,and requirements of this RFA may be rejected.If an application is rejected the applicant will be notified in writing that its application has been rejected and the basis for rejection. The Authority may waive minor requirements of the RFA that do not result in a material change in the requirements of the RFA and do not give an applicant an unfairadvantageinthereviewprocess. Upon submission of the final recommendations to the Legislature the Authority will make all applications available for review on the Authority's web site. Decisions made in each stage of the review process will be documented in writing and made a part of the grant file. Requests for Grant Applications AEA-09-004 Page 22 of 25 9/30/08 Stage 1 Review:Completeness and Eligibility All applications received by the deadline will initially be reviewed by the Authority staff to assess if the application is complete,meets the minimum submission requirements,and has adequate information to proceed to Stage 2 -Technical Evaluation. The following pass-fail criteria will be used to determine if the application meets the minimum requirements. Application 1.The application is submitted by an Eligible Applicant (sec 1.4). must meetall |2.The project meets the definition of an Eligible Project (sec 1.5).3.A resolution or other forma!authorization of the applicant's governing body is included with the application to demonstrate :the applicant's commitment to the project (sec 1.4).considered 4.The application provides a detailed description of the phase(s) further.of project proposed-i.e.reconnaissance,feasibility analysis/conceptual design,final design/permitting,and/or construction (sec 2.2). 5.The application is complete in that the information provided is sufficiently responsive to the RFP to allow AEA to consider the application in the next stage of evaluation. 6.The applicant provides evidence of having the minimum technical,financial,and management capability to complete the work as proposed in the grant or a reasonable plan to obtain it. of these criteria to be lf an application is ambiguous regarding questions 1-6,the Authority may request clarifying information and the applicant will have a specified amount of time to provide the requested information.Failure to respond timely or provide an adequate explanation will result in the application being rejected. Stage 2 Review:Project Feasibility All applications that pass Stage 1 will be reviewed for feasibility in accordance with the criteria below: Application 1.Project Management,Development,and Operation.must a.The proposed schedule is clear,realistic,and described in adequate detail.substantially b.Project development,operation,maintenance,fuel,andmeettheseothercostandsavingsestimatesarerealistic. criteria to be c.The project team's method of communicating, considered monitoring,and reporting development progress is further.described in adequate detail. d.Logistical,business,and financial arrangements for operating and selling energy from the completed project are reasonable and described in adequate detail. 2.Qualifications and Experience a.The applicant,partners,and contractors have sufficient knowledge and experience to successfully complete and Requests for Grant Applications AEA-09-004 Page 23 of 25 9/30/08 operate the project. b.The project team has staffing,time,and other resources to successfully complete and operate the project. c.The project team is able to understand and address technical,economic,and environmental barriers to _successful project completion and operation. d.Use of local labor and training of local labor workforce. 3.Technical Feasibility a.The renewable energy resource is available ona sustainable basis and project permits and other authorizations can reasonably be obtained. b.Asite is available and suitable for the proposed energy system. c.Project technical and environmental risks are reasonable. d.The proposed energy system can reliably produce and deliver energy as planned. e.lf ademonstration project is being proposed: e specific benefits of proposed technology are likely (such as application in other areas of the State); e need for this project is shown;(and e the risks of the proposed system are reasonable and warrant demonstration. 4.Economic Feasibility and Benefits a.The project is shown to be economically feasible b.The project has an adequate financing plan for completion of the grant-funded phase and has considered options for funding subsequent phases of the project. c.Other benefits to the Alaska public are demonstrated. The Authority may develop a preliminary list of feasible applications and may request additional information from applicants at this stage to confirm a complete understanding of the project proposed. lf information is requested,the applicant may be required to provide information within a short time frame to allow for the Authority to continue to the next stage of the review process. Applicants that fail to respond to requests for information or to adequately address the criteria in the technical review may be rejected. Stage 3 Review:Final Evaluation and Ranking All applications that pass the technical review will be scored and ranked based on the following criteria which include criteria required by AS 42.45.045. Requests for Grant Applications AEA-09-004 Page 24 of 25 9/30/08 Final Ranking 1.Cost of energy per resident in the effected project area Criteria to be relative to other areas. Used for 2.The type and amount of matching funds and other resources determining an applicant will commit to the project. applications 3.A statewide balance of grant funds to assure funding is made to recommend available for feasible projects in all regions of the State. to Legislature 4.Project feasibility (value from Stage 2) 5.Project readiness.How quickly the proposed work can begin and be accomplished 6.Success in previous phases of project development. 7.Economic Benefit to the Alaska Public 8.Other Alaska Public Benefit (such as ability to use technology in other parts of Alaska). 9.Sustainability -Operations and Maintenance 10.Local Support During this stage of review the evaluation team may conduct interviews of applicants to determine a more complete understanding of the technical or financial aspects of their application. The Authority may recommend a project be funded for an amount different than what was requested. 5.Appendices Application Form Application Cost Worksheet Grant Budget Form and Budget Form Instructions Sample Grant Agreement Requests for Grant Applications AEA-09-004 Page 25 of 25 9/30/08 2008 Alaska Energy Authority Initiatives JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC ALASKA ENERGY PLAN _____ 7 1 'Develop The AlaskaEnergy Plan :ee en ee |ae a ||;:2 'Determine energy use by Community-Prelim _I 7 oe 7 l i _4.-bo ,;: LG 3 'Town Hall Meetings Se 'a ee |-i es en oe |..|,'7 4 Form Technology Teams ek a ee en Se ne _Rp!5 "Technology Days |-|cc be ee pe -+.|:re . $4 ©'Technology Evaluation and Cost Estimates oh ae -_ee ;|oo Lof;'Determine energy use by Community-Final -HSER __.{a -oe uw a __ ! :8 |Technology Selection and Recommendation ;7 oo oe t te ;_|rs ca{9 'HB 152 Task Force a ne Se |po a}10:Town Hail Migs/Community Feedback--i i”-oo fe ee IT]I11|Business Development Training oo |ee .-ee oe _. |i |F412!'Legislative Focus on Energy Projects en |oe tb ___-1 4 og+313)Deployment-Public/Private Partnerships |-[oe i to oo ._oT -7 i .|:i _Ld Vision/Mission/Values Strategic Plan/Scorecard oo oe oo.Ce ee _. 1 'Vision Statement ee ee es ee ee a |i +:: 9 Mi ,|||aan ine spon °.|fe(Mission and Values Statement en ne ee i _ee ee eed ee ee +wee ee i 3 Situational Analysis ee [._es ee fee Y :te ok4'Ten Year Vison of AEA -Sh ene a "|__._et :i .: 5 'Gap Analysis Whee cee pee poe -I 1.:!+fo ;-6 'Strategic Plan ee ch ee -|spon cafes whee a '|_;: 7 AEA Strategic Balanced Scorecard oo be 7 |-.ek.\-\'8 1 bod [oo Le.7 |fy ¢! CAPITAL BUDGET-Energy Projects ee an Coe oe ee rs 1 ;Governor Approval ;aL 7 |oe dee.+_a -|an2[Negotiate Transfer Agreements wi Named Recipients ||ppp fe | 3 'Manage Grant Agreements for compliance rs _!oe fo 4 , 4.Loo.i _|a ee ene i _oe Lage HB 152-Renewable Energy Projects -oo.___.-cee wee gp ee oe i ,- 1 'Governor Approval -_ |.es +wenn -- |Ly.i 2 :Draft Regulations ee eee ft _i __.es es tf few3'Comment Period on Draft Regulations._i __.|en ee ee eee ._..|aa _}Loe 4 iRefine the RFP Process PO en ee a es re 5 jForm Advisory Committee ye So _i es \to |.a 6 'Develop the Program RFP _I)__ann 7 ||-!- 7 .Request Proposals through the RFP OO __ne nes een 10 _ 8 Evaluate Proposals pa tO --ce fe ef +--.Jl.tf Eo a.9 |LBO Review of Selection for the first Year _Ce ee ee be --}-_a -es ne ee Se _.om _10 Award Projects ee ee |__re nn ae |a Cc [| 11!Negotiate Grant Agreements ee |a _|ee vee pee -=f ns CJ ; 12'Manage Grant Agreements for compliance __oe eee eee en a a a i re ,13'Legislative Review of Selection for subsequent years _ee ee oe _woe |__4 +-{-ide 'te 14'Legislative Selection of Projects -om ed ee ee |.ie |!i 15 Award Projects cp fp _[{.Sopa a __4 .: 16 Negotiate Grant Agreements _|.oe a a |a a es a :i17'Manage Grant Agreements for compliance aie i”ok __es One eee tL Pelee ie. 2008 Alaska Energy Authority Initiatives 1 2 4 6 7 SUSITNA HYDROELECTRIC EVALUATION \Governor Approval'Feasibility Study and Cost Estimate 'Determine Financing Options :'Environmental/Socio-economic Impact Study Field Work-limited 3 'Integrated Systems Energy Plan for the Railbelt 5 'Determine cost of Power for Selectected Alternatives DENALI COMMISSION GRANT ADMINISTRATION 1 2 3 :Denali Commission Grants Approved'Negotiate Grant Agreements a 'Manage Grant Agreements for compliance 4 .red1 .Letter from AVEC 85%increase in Fuel Costs 'Brainstorm Solutions 3 Review PPF,Buik Fuel,Line-of-Credit options RURAL BULK FUEL CASH FLOW 2 4 'Determine State Level of Support LEGEND: E On schedule,within costs,meeting quality.Caution-there are areas of concern that must be resolved for successful completion.| Alert-This activity will need major attention for successful completion. __|Not Co pleted |Completed_ Activity with specific time _|Intermidiate Milestone _ _|Completion Milestone Alaska's Energy Picture The Blessings and the Curses By Steven Haagenson Executive Director -Alaska Energy Authority Energy Coordinator August 25,2008 We Alaskans live in a magnificent state that not only has many blessings when it comes to energy,but also some curses.Simply put,we are truly blessed with abundant natural resources,but cursed with long distances and low usages. At the Alaska Energy Authority (AEA),we are well into the process of developing the Alaska Energy Plan.This Plan will serve as a tool that will allow each community to review locally available resources and determine the least cost energy options for that community.Recognizing the curse of distance,alternatives will be evaluated using the delivered cost of energy to that community. The energy use in each community is composed of three major components:electricity, space heating and transportation.The level of usage and cost differs across Alaska.For instance,Anchorage residents pay less for electricity and space heating but get pinched for the high cost of transportation due to heavy dependence on vehicle travel.Rural Alaskans see lower vehicle travel,but experience much higher costs for heating oil and electricity.All of America is struggling with the high cost of energy,but here in Alaska, we have the resources and the ability to create long-term solutions that will greatly benefit our children and our grandchildren. In developing the Alaska Energy Plan,our goal is to reduce the cost of energy to all Alaskans through deployment of energy sources that are vertically integrated,economic, long-term stable priced and sustainable.The Plan will attempt to provide energy that is in a form that can be used in existing infrastructure.For example,if your engine or boiler runs on diesel fuel today,we will attempt to identify a fuel that will function for you tomorrow. Alaska Energy Plan Development -First Steps Our first step was to identify each community's current usage for electrical generation, space heating and transportation.It is very important to know the usage levels,because a community with small usage could require a different solution than one with a very large usage.These initial estimates were then analyzed and firmed up by the Institute of Social and Economic Research (ISER). AEA also conducted 28 Town Hall Meetings across Alaska.We engaged many Alaskans in the process of gaining answers to three fundamental questions:What resources near your community -where you live,work,play,fish and hunt -could possibly be developed to help lower your energy costs?What resources do you prefer not to develop? Then,why not? Page 2 The information we gathered from these valuable Town Hall Meetings was used to develop a resources matrix for each community.Potential resources were identified and include hydroelectric,in-stream hydro,wind,solar,wave,tidal,biomass,geothermal, municipal waste,natural gas,propane,coal,diesel,coal bed methane and nuclear.We also identified technologies for gasification and Fischer-Tropsch liquids. For each resource,AEA formed Technology Teams to identify available technologies that could be deployed to use the identified resources.People with expertise and passion were brought in as active participants in the Technology Workgroups to help determine the most appropriate route.Alaska Center for Energy and Power was brought in to help guide the technology discussions and assist with the Plan development. Current Status At this stage in the process,the Technology Workgroups are using the acquired information on usage,resources and technologies to determine capital costs,and operations and maintenance costs for each technology.Capital costs and O&M will be adjusted to each community through use of factors developed by HMS Construction Cost Consultants. Net Result The net result will be a focusing tool that will provide each community with the least cost options for their electricity,spacing heating and transportation needs.Prices will be based on a delivered cost that includes capital cost for infrastructure and alternative infrastructure that may be required for alternative fuel options.O&M costs will be included as well as modest profits or margins.The delivered cost number is intended to identify the real cost of current and alternative energy sources. This energy lens will be shared with each region of Alaska in a December timeframe.It will be a tool that will help Alaskans identify their preferred source or sources of energy for their respective communities and regions.Every Alaskan has felt the pain of high energy costs,and the need for a detailed focusing document of this nature -one for the entire state of Alaska -has been very great.Governor Palin and the Legislature are to be commended for their understanding of Alaska's energy issues and their willingness to take action to reduce the cost of energy for all Alaskans. Focus To The Vision The Alaska Energy Plan will provide focus to the vision that all Alaskans should have access to affordable power.By acknowledging the reality that Alaska's energy picture is one of both blessings and curses;by acting with courage,determination and skill to meet our local energy needs from locally available resources,we will then change our curses into an expansion of our blessings,thus creating a secure and prosperous future for our great state. Alaska Energy Authority Vision,Mission Value Statement VISION: Affordable and sustainable energy for Alaska. MISSION: Provide world-class customer-focused energy services to Alaska. VALUES: Building relationships founded on cultural awareness,respect,integrity and accountability. September 25,2008 In ten years,we will be...(vivid picture of AEA in the ten year future) Least Cost Option Evaluation Cost Estimator by Zip Code JL Fuel, -_Y I&D Debt \/ O&M Cost --)Fuel Costs T&D Debt ,\/Fuel Supply O&M Cost --\-/Losses [&D Debt . O&M Cost Conversion Delivered Costs Delivery > Community:Akutan The community of Akutan is located in the eastem Aleutian Isiands 766 air miles from Anchorage.The largest local employer,Trident Seafoods, generates their own power and averages 3.5-4MW for most of the year.Akutan has one school with 18 students in attendance in 2006. The hydro power plant has limited storage capacity (2 days total),which limits output.A second hydro site exists near the town which could be developed,but is likely to have less storage potential than the existing system. Wind resource data has been collected for a period of one year and indicates an average yearly windspeed of 7.2m/s (i6mph),with a seasonal low in summer months averaging 6m/s,to a high in winter averaging 8m/s.Gusts as high as 150mph have been recorded in the winter months.A potential wind site has been located approximately 2 miles from the community,however transmission infrastructure and a road would be required. Akutan Island has a potential geothermal site in Hot Springs Bay Valley,12 miles from the village.No test wells or extensive surveys have been conducted in Hot Springs Valley.The first step in developing the Akutan geothermal resource would be to conduct a more extensive survey of the resource and site some geothermal wells.Additional improvements would need to be made before the resource could be developed;including a transmission line and road between the community and the resource. While there is little woody biomass available on Akutan Island,there is the potential for using fish oil from Trident Seafoods as a fuel.Fish oil can eitherbeuseddirectlyindieselgenerators,or by converting tt into biodiesel.The Trident facility currently uses raw fish oil for process heat. Like many communities in the Aleutians,Akutan also may have potential tidal and wave power sites,neither of which have been assessed.in-stream hydrokinetic,natural gas,coal,and coalbed methane are not locally available resources. Population:773 (160 year-round) Hub community:Dutch Harbor Distance to Hub: Predominant Economic Activity:Fishing EXISTING GENERATION: Existing Power Plant Efficiency Utility:Akutan Electric Akutan currently has two stand-alone power generation facilities.The facility at the west end _16 .= Average Load:46kW of the town has two diesel generators,a 150kW and a 70kW backup.The other facility has a S14 woExistingGeneration:105kW Canyon Industries hydro power pliant,and a 125kW diesel generator.Both power plant 2 -S150kWdiesel(age)facilities feed Akutan's power distribution grid,which extends a total of 6.5 miles.g 10 i 7OkW diesel (age);;g :125kW diesel (age)The average power generation year-round in 2006 was 46kW,or 487.710kW-hrs.87,549kW-=4 105kW hydro hrs was generated from the hydropower plant in 2006 (approximately 18%of total load),which =2 Bulk Fuel Capacity:is below the peak yearly output of 183,000 hours in 1997.A total of 42,507 gailons of fuel was =5 - .purchased for power generation in 2006,at an average cost of $3/gallon delivered.o3Od8Ad3waoo SNOwNN GRADE:D (compared to 15kW/gal standard) s|iles Projected S/W $/2)21s le ::lee)]=g =&w 2 g '2 3 =ze a _.:: : 2alg=8 g 2 Des Se!a =bz]2 Lad 2 g 2 =N 7 +t bi!ss1S8jF)e/st F/R Sa ap epee aya alaypajpayatayl2sfa]73B]}]e ],¢:: ©g 3 ]°;= 3 . Improvements to >Existing PP Facility - Diesel Efficiency ey Hydro Eee aBiomass. <2 {Geothermal ee a€[Wid - &Solar - s ag [Wave nmmend =eG3Hydrokinetic ia Natural Gas Not Appticable Coal Not Applicable Coalbed Methane Not Applicable Nuclear Not Applicable Municipal Waste ees 3 Dr el=[Geothermal heel Other Not Appticable Direct Combustion Pellet Input Fuel Processing 2,000 tons/yr Fuel $104,040 $4.25 Supply 32,000 mmBTUA/yr |1&D $88,962 $3.63 24,480 mmBTU/yr Capex $1,000,000 Efficiency O&M $365 $0.019 $0.0270 /kWh Debt 20 years 24,480 mmBTU/y Run Time Total $89,327 [$7.30 I/mmBTU Interest 6.25% Delivery 24,480 mmBTUAr |Losses $1,934 $0.08 §Delivery Costs Delivery 0.002 miles !&D $40,293 $1.66 24,235 mmBTUAr Capex $500,000 Losses O&M $25,000 $1.039 $0.0095 /kWh Debt 30 years Load Factor Total $65,293 [$2.77 [immBTU Interest 7.0% Use Conversion 100,000 BTU/hr Fuel $4675 $11.86 Supply 438 mmBTUAr 1&0 $890 $2.26 394 mmBTUAr Capex $10,000 Efficiency 90% O&M $365 $0.939$0.0513 /AWh Debt 20 years 394 mmBTUAr Run Time 50% Total $1,255[$15.04 [/mmBTU Interest 6.25% Delivery 394 mmBTUAr Losses $59 $0.15 [Delivery Costs Delivery 0.002 miles 1&D $32 $0.08 390 mmBTU/r Capex $400 Losses 1% O&M $4 $0.01 1 $0.0008 /kWh Debt 30 years Load Factor Total $36 l $0.24 [/mmBTU Interest 7.0% Fuel/Loss $4,734 $12.13 [Total Delivered Costs 1&D $922 $2.36 390 mmBTU/yr O&M $369 $0.959 $0.0527 /kWh Total $1,291$15.44 f/mmBTU Zip Conservation]Hydroelectnc |Wind ff Biomass Geothermal Municipal Solar River Tidal Wave Naturai Gas Propane Coal Coal Bed J]Gasiicaton |Fischer-Tropsch]Diese!NuclearCommuniCodePopulation(Cnye.Aug 08)Waste Hydrokinetic Methane Efficiency[Akutan 99553 TZ x OK XX x x x x Adak.90546 436 x XX xX Xx x x x Atha 99547.90.x xX xX x x xtAttuStationnla415,x x.=x x [Cold Bay 9957 69)x =x x EE x x Faise Pass 9958.46.x XxX x x x [3 x x ing Cove 9961 723,x XX =x x E x x 34 XX XX 25 miles away x x 2 x x =Xx x ca x x”XXX,n XK,X x x Xx A 1K 99555 237,x xx [)E x xX x9956495xOX[e reed x x X Lagoon 09585 86 x x ie XXX x x x Lake 99548 U7 x XxX (e OK x x995686x[e E x x 9957 ran x xX x x x EE x xX x 9957 81 x fe EE x 99580 118.x [e)x [Goodnews Bay 99589 238 x x [e x iguana 99613 50,x is)[iamna 99606 469 x Xx Q x ivanof Bay 99695 er x Q xKingSalmon99613426xxx=EE x xoI99606179xxx[e X X x 99576 157 x x fe)x x xX9962554)x x x 7e x x99628437xx3x2eXx99633MECLE)x &=aE .7 (=u X au 99571 70;x {o)x xX x99638461x°x x x9960¢167]x fe)x 0 x xNondaiton9964196xo)x Q x x Pedro Bay 9964:a2 x x °x 0 x x[Per 99648 119 x x io)x x x Pilot Point 9964!73 x {eo}x EE x x Xx Port Aisworth 9965 706 x x x °x Q X x x [Port Heen 9954!119 x XX o x EE x x xX [South Naknek 9967 'at x =x EE x x x Togiak 9967!779 x xX [o}x -£x xX x |Twin Hills.9957:71 x [o}xX E xX xX x Ugashik 9964!13 x [eo X EE xX x x Alcan Border,997380 17'x x [e}x 9 x x Chenega 82.x xX x fe}x 9 x x Chicken 19 x XX x fe]x x x x[Chistochina 93 x x e)0 ¢X xChitinaTio|x XX x x 9 (con Xx x xe Copper Center 337 |x xX x =x x x X x Cordova 2288)x XXX.x {eo}xX XXX,BERING x x Delta Junction 975)x XX {s]x 9 XXX x x Dot Lake.15,x XX x (eo)x Q x x ry Creek 94,x x [se]x 2 x -agle 140)x.x {eo}x (a)x agile Vilage 67)Xx x [*)x 9 x yak 37 XX x 2.x XXX x[Gakona 36 x x G)¥x x x|Glenalen 18 xX XX.oO KX x xX.sud Guikana.43 x x o xX x X x XxX Healy Lake 37,x x {eo}x x 'enny Lake.99573 434 x )=¢€x x x ake Louise 99588 91 x )x x X x x McCarthy 99588 54 x 2)9 c9958868Q8¢X x x jentasta Lake 99780 1091 x O ==X x x nia 32 Q xX x x x 99764 81 fe)Cc x x 99764 6t [e)C x x 99776 173)xXx 9 Cc x x 99677 102 Q )x 99588 219 (e X x X x x 99779 165 ie]0 [oj x x x 99780.1.353.fe)x.te]0 x xX. nia 76 xX X [e)x c x x x 99686 J4.383.Xx BK Xx fe)x x x xX. x x x KEY FOR CNYE 08/08 «Kk° OP El RD CONFIRMED RESOURCE VERY GOOD POTENTIAL SOME POTENTIAL NO POSITIVE INDICATION OF POTENTIAL EXTREMELY UNLIKELY TO HAVE POTENTIAL NEEDS MORE THOUGHT BASIN HAS INDUSTRIAL-SCALE EXPt.POTENTIAL COAL SHIPPED ON ROAD SYSTEM FROM NEARBY MINE REGIONAL OR STATEWIDE DISTRIBUTION OF F-T FUELS NOTE:"POTENTIAL CONCERNS PRESENCE OR ABSENCE OF A SHALLOW HYDROTHERMAL SYSTEM,AND DOES NOT CONSIDER ECONOMIC VIABILITY. Conservatong Hydroelecinc J Wind ff Biomaas Geothermal Municipal Solar River Tidal Wave Natural Gas Propane Coal Coal Bed J Gasificaton |Fischer-Tropsch Diesel NuclearCommunCodaPopulation(Crye.Aug 08)Waste Hydrokin Methane EfficrencyCem-_ -= Diomede Diomede 99762 132 x (a x x x 6 0 x x x intenior 135 x x ]x x interior 84.x ey x x intenor 26 x o EE x x Interior 97,x x fe}x Interior 2 x fo)EE x x interior 90.x x fe)X x x Interior 3570 x fe}x EE.x x 4 x. interior 4 x x x x interior 202 x °EE x x interior 621 x ie)x x interior 202,x 3 EE x x x af Kodiak Island {Afognak 9969 of x fe)x x x Kodiak isiand Akhiok 9961 33 xX x 9 x x x Kodiak Island Chak.9961 42 x io)x x x Kodiak island Karluk 9960:27.xx x ie x x x Kodiak isisnd [Kodial 9964 Spe!x x p04 x x x x C (Sakriak is}x x Kodiak Island Larsen Bay 99624 97,x xX fe x x X x Kodiak Istand Old Harbor 9964:200,x XXX O x x X x Kodiak talend [Quznke 99644 191 x OX X 0 x X X Kodiak jstend Port Lions 99550 179 x xx x 6 x x X X Kodiak latand Women's Bay 99615 830 x OK x 6 x X x Koyokuk Alatna 99720 30 X x 6 x x Koyokuk [Allakaket 99720 95 X x ©x x Kovokuk [Betties 99726 3 X x 0 x x x Koyokuk Coldfoot 09701 44.O x C [TRAMWAY Ber)x Koyokuk 99726 191 O x ia x x Kovokuk 99745 69 x 0 X x x Koyokuk 99746 285 9 X x x Koyokuk 99790 18 fs X c x x Lower [Akiachak 644 x x fe)Xx xX x Lower Aluak Ei x x fo)x x X Lower Atmautlauk,304 x x fe)x x x Lower ]601 x x x X?(Bethe!Basin)x x x Lower Chefonak 457 x ie X x 291 X x 534,is)x?X x 688 Q x '427 fe x x 895,O x xX?x 361 0 x 373 6 xX?x 428]O xX?X so Q xX?x 38]O x 642 O x x 466 x O x x 370 x x x?x x Lower Yukon 99554 678 (e}EE xX Lower Yukon 99558 99 ie)x Lower Yukon 99563 916 fe}x Lower Yukon 99581 740)ie)EE x Lower Yukon 99590 71 x x 9 x x x x, Lower Yukon 99602 at x 9 x x x x Lower Yukon 99620 09 x ie x EE x x x. Lower Yukon 99585 70]x 9 x x Lower Yukon Mountain Vil 90632 ee]Xx 9 x x Lower Yukon 201,x [e)Xx EE xX x Lower Yukon S65|x is)Xx x x Lower Yukon 03]x [e)x x x Lower Yukon 29 x fe}x x x Lower Yukon 6 28,x [o)x x X Lower Yukou Si Marys Andreafsky 99658 15]x (-)x x KEY FOR CNYE 08/08 XXX CONFIRMED RESOURCExxVERYGOODPOTENTIALxSOMEPOTENTIAL =NO POSITIVE INDICATION OF POTENTIAL te)EXTREMELY UNLIKELY TO HAVE POTENTIAL rr NEEDS MORE THOUGHT EE BASIN HAS INOUSTRIAL-SCALE EXPL POTENTIAL i COAL SHIPPED ON ROAD SYSTEM FROM NEARBY MINE RO REGIONAL OR STATEWIDE DISTRIBUTION OF F-T FUELS NOTE:"POTENTIAL”CONCERNS PRESENCE OR ABSENCE OF A SHALLOW HYDROTHERMAL SYSTEM,AND DOES NOT CONSIDER ECONOMIC. VIABILITY. Biomass - RiverZipConservationfHydroeiecinc§Wind Geothermal Municipal Solar Tidal Wave Natural Gas.Propane Coal Coal Bad |Gasification |Fischer-Tropschy Diese!Nuclear'Communit Code Population __(Crys Aug '08 Waste rokinatic Methane Efficienc:ae -aaeveruvee Middle Diak,5 Xx .is}x x x Middie Cl ous 90.x x ie]xX xX x Middle Crooked Creek 129 x {e]x x Middle [Lime Village 28)x [*)x (Holitna)x Middle Lower Kalskag 252 (e)x Middle K indie Kusko 416 [o]xMiddle[Red Deva 34 ie} Middle.S 75,fe}=X X Middle Stony River 42.2.=X x Middle Upper Kaistag 276.x [e}x x x Middle Yukon [Galena 654 &x 4 o.x reg x x x Middle Yukon [Kaitagq 227,x x x fe)x x x x Middle Yukon oyukuk 97,x x x i;x x x xX Middie Yukon Nulato 319.x x x fe)XO x x Middle Yukon Ruby 185 x x x [e)x 222 Bd x Xx Middle Yukon |Stevens Vilage.87 x x {eo}x x x x Middle Yukon Tanana,281 x x [s)x x x x NANA Ambler 283 XX x.[e}x XX(Park)x Xx x NANA 434,[e)x XK x x x NANA Deering 139 fe)x XX x x x NANA jana 380 xX x [e)x XX(Park)x x x NANA ivalna,385,fe x x xX x NANA <obuk 430.x [e x XX(Park)x x x NANA otzebus 3120)x xX =.x XodPark)x x _& NANA Noatak,473.x O x x x x NANA Noorvic 628 x x O x XX(Park)x x x NANA Selawk 830.x x XX(Park)x xX x NANA Shungnak 259 x xX x o)x XX(Park)xX xX x Nelson Is [Newtok 99559 345.Xx [e}xX x x xX x Nelson Is.Nightmute.99690 234 [e)xX x x x Xx Neleon Is.Toksook Bay 99637 596 X [s]x x x xX x North Siope [Anaktuvuk Pass (9721/9073:27 x 6 x EE x x x North Siope Atgasuk 99791 223 x [e)X EE XXX x x x North Siope jarrow 99723 4.054 Xu __XXX .iX Kus North Slope Kakiovik 99747 287.Q xX XXKEXPL x x North Siope Nuigsut 99789 403 x XXX x x x North Slope Point Hope.99786 704)X EE xX x x x North Slope Point Lay 99759 250 x EE TOK X x x North Slope Wainwnght 99782 340)xX Q x [a3 XxX x x x Nunivak Island Mekoryuk 29630 4102 X (o]x x x x x Pribiof Islands St.George 99591 114 x =.xX x x x x x Pribiiof Isiands St Paul 99660 488.x =xX x x x x x Raibert Anchorage 283,338 x XX x is)x x XXX C_x Xx x Raibek Faxbankg.31,839 x.XK x.QO (Chena =X)x EE ¢x Xx x. Raibett Homer.9960.3.504 x XX.x ce)x x XXX XXX Xx Xx x. enai 9961 fe)XXX XXX Raibet |Seward 9966.2,867 Xx xX x fe)x xX ¢x xX x Raibett [Soldotna 99669 3,983 x XX.xX...x XXX x xX x Raibett Wasilla 90687 7,028 x XX Xx {eo}x XXX c x x Cook Inlet Tyonek (29882/9969%181 x XX x (at Spurr 40 mi dstan:x x OK OX x x x KEY FOR CNYE 08/08 CONFIRMED RESOURCE VERY GOOD POTENTIAL SOME POTENTIAL NO POSITIVE INDICATION OF POTENTIAL, EXTREMELY UNLIKELY TO HAVE POTENTIAL NEEOS MORE THOUGHT BASIN HAS INOUSTRIAL-SCALE EXPL POTENTIAL COAL SHIPPED ON ROAD SYSTEM FROM NEARBY MINE REGIONAL OR STATEWIDE DISTRIBUTION OF F-T FUELSBomorxX NOTE:"POTENTIAL”CONCERNS PRESENCE OR ABSENCE OF A SHALLOW HYDROTHERMAL SYSTEM,AND DOES NOT CONSIDER ECONOMIC. VIABLLITY. Biomass Municpal River Natural Gas Propane Coal Coal Bed |Gasificaton Oreset NuclearCommuniWasteHydrokimetic!Methane Efficiency--_ x x x x €) x x EE x x X Golovin x x EE x x xKovukxxcEXxxxX A.x EE x x &:4 Shaktoolk.(o)x EE x x xX[Shishmaret ie)x x x x Q x EE x x x [s x EE x x x ©x x x x t x x [s x EE x x x X[Wales x x 9.x x x x White Mountain x x °x x x X Nanwalek xX fe]x x (J x x xX Port Graham.x xX fe)x x x x x x SeKova xX XX fe}x x XXX,x x x [Angoon X xX x =x x x x x x Chilkat Valley x YOK x =x x x x Cc x x =xX x x x x 4 OX x =x x Xx x. x XX Pad Oo x x x x x x x fe]xX x x xX xX x ROC x is]x Xx x xX. X XX x 30 x x x XOOC x Q x x x X XXX x O x x x KOCK x.e)xX x x 4 XX x -)x x &.x Ks x XX x [s]x xX x x xROK__X x x XK x X XK x x x x x Xx XX x x x x XXX x x Xx x xXx x x ROOK x 4 Xe x XOOK x X X x x XXX x x XX x x ROOK x x x Xx OOK X x x Xx. x x xX EE X.x Xx xX. x x xX x [Gambell x ()x EE x x x Savoonga xX [e)Xx EE x x Xx [Cake Minchumina x x xX x XK[McGrath x x C fTenzona)xX x x Nikolas x fe x C (Tonzona)x xX x Tebda x O Tokotna x Oo Hooper Bay 3.x 2)xX xX x [Nunapitchuk 4 x ©)x X?(Bethel Basin)xX x Scammon Bay 0 x O xX xX x Tununak 28.x Q x x x x x KEY FOR CNYE 08/08 CONFIRMED RESOURCE VERY GOOD POTENTIAL SOME POTENTIAL NO POSITIVE INDICATION OF POTENTIAL EXTREMELY UNLIKELY TO HAVE POTENTIAL NEEDS MORE THOUGHT BASIN HAS INDUSTRIAL-SCALE EXPL POTENTIAL COAL SHIPPED ON ROAD SYSTEM FROM NEARBY MINE REGIONAL OR STATEWIDE DISTRIBUTION OF F-T FUELS.Bomgo:XkNOTE:"POTENTIAL"CONCERNS PRESENCE OR ABSENCE OF A SHALLOW HYDROTHERMAL SYSTEM,AND DOES NOT CONSIDER ECONOMIC. VIABILITY. [=ALASKA€x_)ENERGY AUTHORITY Alaska Industrial DevelopmentandExportAuthority Reviewed:September 25,2008 Project Fact Sheet:BRADLEY LAKE HYDROELECTRIC PROJECT CURRENT STATUS:Inspections indicate Bradley is in good condition.In 2006,the governor control system was replaced.Bradley's responsiveness to changes in output improved greatly. In 2007,the turbine runners were replaced.No major projects are planned for 2008.Bradley continues to perform well and maintenance activities are proceeding as planned. PROJECT COST:$317 million (original cost plus major capital improvements through June 30, 2007) DESCRIPTION:The project has 126 MW of installed capacity hydroelectric project located 27 air miles southeast of Homer on the Kenai Peninsula.The project consists of Bradley Lake,a 125 foot high concrete faced,rock filled dam structure,three diversion structures,a 19,063 ft. long power tunnel and vertical shaft,generating plant,interior substation,20 miles of transmission line,and substation.Due to its remote location,the project has its own airstrip, boat dock,residential quarters,and utility system.The project is normally automatically operated by remote dispatch by Chugach Electric Association from Anchorage. PURPOSE:The Bradley project provides 5-10%of the annual railbelt electric power needs at the lowest generation cost.Bradley is most important to the railbelt electric system during the cold winter months.Demand for both electric power and gas for heat is at its highest.Utilities limited by available gas are able to use Bradley power to meet the high electric demand. SOURCE OF FUNDS:Legislative appropriations and AEA revenue bonds repaid by participating utilities. PARTICIPANTS:Under the Power Sales Agreement,100%of the project's capacity has been sold to the power purchasers:Chugach Electric Association,Inc.(30.4%);Municipality of Anchorage (25.9%);Alaska Electric Generation &Transmission Cooperative,Inc.(25.8%); acting on behalf of Homer Electric Association,Inc.(12.0%)and Matanuska Electric Association, Inc.(13.8%);Golden Valley Electric Association,Inc.(16.9%);and City of Seward (1.0%) BENEFITS:Authority ownership now assures the railbelt area of a long-term source of power at a stable cost and promotes economic development in the region. ADDITIONAL BACKGROUND:The power generation potential of Bradley Lake was first studied by the U.S.Corps of Engineers and presented in a report dated March 1955.The project was authorized by Congress in 1962,but,despite its feasibility,federal funds were not available for its construction.The Alaska Energy Authority (then Alaska Power Authority)assumed responsibility for the project in 1982.Preliminary plans and field investigations started in 1982. In April 1984,the Authority submitted an application for license to the Federal Energy Regulatory Commission (FERC).The license to construct the project was issued on December 31,1985.In December 1987,the Authority and the railbelt utilities entered into a Power Sales Agreement to 813 West Northern Lights Boulevard «Anchorage,Alaska 99503-2495 www.aidea.org e 907/771-3000 e FAX 907/771-3044 e Toll Free (Alaska Only)888/300-8534 e www.akenergyauthority.org Bradley Hydroelectric Project Project Fact Sheet Page 2 of 2 delineate responsibilities.Project was declared in commercial operation September 1,1991. 'Bradley has been producing power for 16 years.In 2007,Bradley produced 392,000 MWh of power at a cost of approximately $.039 per kWh. A Bradley Project Management Committee (BPMC)was formed in 1993 with representatives from each of the power purchasers and Alaska Energy Authority.The BPMC is responsible for the management,operation,maintenance,and improvement of the project,subject to the non- delegable duties of the Alaska Energy Authority. SC)ENERGY AUTHORITYWAlaskaIndustrialDevelopment and Export Authority Revised September 29,2008 Project Fact Sheet:LARSEN BAY HYDROELECTRIC PROJECT CURRENT STATUS:Upgrades to the Larsen Bay Hydro Facility are in progress. Replacement of the switchgear,related controls and repairs to the intake structure are scheduled for completion November of 2008.The utility is now supplying a portion of the cannery's energy needs.The new replacement hydro switchgear is scheduled to ship October 1°.The design for the intake structure is complete and the repair material has arrived in Larsen Bay. PROJECT COST:$320,000 DESCRIPTION:The Larsen Bay hydro facility has experienced many operating problems over the last few years.The problems are mainly related to the aging of the control switchgear, much of which was installed twenty years ago.Improvements that will be made to the hydroelectric facilities to improve operational reliability will include the replacement of the hydro switchgear and controls with new data acquisition and remote monitoring capabilities.Ice damage to the water intake structure will be repaired.A portion of the cannery domestic load will be isolated and separately metered in order to facilitate increased use of hydro power during the summer without impacting the power to the city. PURPOSE:The project intent is to increase the reliability,power quality and efficiency of the hydro and turn over ownership of the system to the City of Larsen Bay. SOURCE OF FUNDS:In 2004,the City of Larsen Bay applied for and received a CDBG Grant to upgrade the hydro facility.In 2005,AEA negotiated a Grant Agreement with the City of Larsen Bay and CDBG to manage the hydro upgrade project.Subsequently,the project was awarded $320,000 from CDBG. PARTICIPANTS:Alaska Energy Authority and the City of Larsen Bay BENEFITS:When operating reliably and efficiently the hydro can displace 90%of the communities diesel fuel used for electrical generation.The utility can now provide a portion of the cannery's energy needs.This has resulted in increased revenue to the utility.Sales to the cannery during the summer of 2007 allowed the City of Larsen Bay to pay its loan obligations for FY 2007 and 2008.The intent is to turn the hydro facility over to the City after the improvements have been made and the facility has proven its reliability ADDITIONAL BACKGROUND:This 475-kilowatt project went into commercial operation in mid-1991 with construction costs of approximately $1.6 million.In addition to producing electricity for this isolated Kodiak Island community,the project replaced the City of Larsen Bay's old water supply system and provides a better source of water with reduced maintenance and improved water quality.The original intent of the hydro project was to turn the facility over to the City of Larsen Bay once it had been demonstrated to be operationally viable over a few years.The hydro operated only intermittently and unreliably for many years;therefore the community would not agree to accept the facility until these problems were worked out.In 2004,the City of Larsen Bay agreed to seek CDBG funding to make improvements to the hydro facility. 813 West Northern Lights Boulevard *Anchorage,Alaska 99503-2495 www.aidea.org ¢907/269-3000 *FAX 907/269-3044 *Toll Free (Alaska Only)888/300-8534 ¢vwavw.akenergyauthoritv.crga ALASKA ENERGY AUTHORITY Alternative Energy and Energy Efficiency Program Overview Currently Alaska Energy Authority's (AEA's)Alternative Energy and Energy Efficiency (AEEE)program manages and funds 33 projects and initiatives totaling $31.5 million in state and federal funding.Substantially increased program activity is expected as AEA launches the new Renewable Energy Fund established by HB 152.An AEEE update is available on AEA's website at www.akenergyauthority.org Program Description The AEEE program promotes the use of renewable resources as alternatives to fossil fuel-based power and heat,and measures to improve energy production and end use efficiency.In rural areas the program may support developing local sources of coal and natural gas as diesel alternatives.The AEEE program is divided into seven separate program areas: Biomass Energy Program develops projects using wood,sawmill residue,and municipal wastes for energy;tests air emissions and performance of fish oil and diesel blends as fuel;and assesses the viability of recovering fish oil from fish processing wastes. Diesel Generation Efficiency Program provides assistance in developing projects that use high efficiency generators and recover "waste heat”from diesel generators., End Use Efficiency (Conservation)Program has completed 40%of a project upgrading lighting and heating efficiency in over 150 schools and other facilities in 50 villages,is conducting energy audits,and working with Alaska Housing Finance Corporation to develop statewide efficiency policy recommendations and demonstrate impact of aggressive,village-wide measures in Nightmute. Geothermal Program supports projects such as the Chena Hot Springs power plant,organizes workshops and training sessions,and coordinates state assistance in developing other potential projects such as Mt.Spurr on the Railbelt and Makushin in Unalaska via a statewide development plan. Hydroelectric Program provides technical assistance through staff and contractors for hydro feasibility assessment and manages public funding for project construction. Ocean and River Energy Program evaluates technology and feasibility of converting wave motion and tidal and river flow into power in partnership with Alaskan utilities and Electric Power Research Institute. Wind Program assists utilities and communities in resource evaluation,training,environmental assessment, regional development,conceptual design and economic feasibility of rural wind-diesel systems,and Railbelt wind integration studies. Funding AEA's alternative energy program has received funding since the early 1980s from the US Department of Energy (USDOE)and more recently from the Denali Commission and the EPA.In June AEA and the Denali Commission offered $7.5 million in grants for 37 alternative energy and efficiency projects.The new Renewable Energy Fund,offering up to $100 million in fyO9 and potentially $200 million over the following four years will greatly increase program activity.The Energy Cost Reduction RFP,an earlier program,has provided $8.4 million in grant funds to match $12.4 million in local funds for projects that are displacing or will displace 1.4 million gallons per year of diesel and equivalent natural gas.For more detail,see the AEA's Biennial AEEE Assistance Plan on the AEA website. Reviewed 9/08 ALASKA ENERGY AUTHORITY Loan Programs Power Project Fund (PPF) Number of loans:42 Outstanding portfolio balance:$24,738,490 Committed &un-disbursed funds:§1,106,181 Uncommitted funds:$12,163,364 As of 8/31/08,there was 1 loan past due 90 days or more in the amount of $215,000,which was .87%of the outstanding portfolio balance. Program Background:The PPF program provides loans to local utilities,local governments or independent power producers for the development or upgrade of electric power facilities, including conservation,bulk fuel storage,and waste energy conservation.The loan term is related to the productive life of the project,but cannot exceed 50 years.Interest rates vary between tax-exempt rates at the high end and zero on the low end.This rate is equal to the percentage that is the average weekly yield of municipal bonds for the 12 months preceding the date of the loan commitment. Bulk Fuel Revolving Loan Fund (BFRLF) Number of loans:36 Outstanding portfolio balance:$3,958,959 Committed &un-disbursed funds:$5,794,720 Uncommitted funds:$5,378,739 As of 8/31/08 there were no loans that were past due 90 days or more. Program Background:The purpose of the BFRLF program is to assist communities,utilities or fuel retailers in small rural communities in purchasing emergency,semi-annual or annual bulk fuel supplies.Loans are for the purchase of new fuel.Loans are not provided for fuel already purchased,in the process of being used or already consumed.The Alaska State Legislature appropriated an additional $5.5 million to this revolving loan fund in August 2008. Revised 9/24/08 ALASKA ENERGY AUTHORITY Power Cost Equalization Program Current Status The original FYO8 PCE appropriation was $26,760,000.00 which was further capitalized by a $1.2 million dollar supplemental appropriation,increasing the total funding to $27,960,000.00.FY08 budget funding levels remained at the 100%level for the entire fiscal year.This caused the program to go over budget by what is currently $486,484.21.The legislature approved a $600,000 supplemental appropriation for PCE's FYO8 expenditures. Effective October 1,2008,the power cost for which PCE is paid (the "ceiling”)will be raised from $.525 to $1.00 for the remainder of the FY 2009.The PCE Program has been provided an open ended General Fund Appropriation estimated to be $23 million. Program Description The goal of Alaska Energy Authority's (AEA)Power Cost Equalization program is to provide economic assistance to customers in rural areas of Alaska where the kilowatt-hour charge for electricity can be three to five times higher than the charge in more urban areas of the state.PCE only pays a portion of approximately 30%of all kWh's sold by the participating utilities. PCE fundamentally improves Alaska's standard of living by helping small rural areas maintain the availability of communications and the operation of basic infrastructure and systems,including water and sewer,incinerators,heat and light.PCE is a core element underlying the financial viability of centralized power generation in rural communities. The Legislature established different functions for AEA and the Regulatory Commission of Alaska (RCA) under Alaska Statutes 42.45.100-170,which govern PCE program responsibilities. AEA determines eligibility of community facilities and residential customers and authorizes payment to the electric utility.Commercial customers are not eligible to receive PCE credit.Participating utilities are required to reduce each eligible customer's bill by the amount that the State pays for PCE. RCA determines if a utility is eligible to participate in the program and calculates the amount of PCE per kWh payable to the utility.More information about the RCA may be found at www.state.ak.us/rca PCE Endowment Fund The PCE Endowment Fund was created and capitalized in FY 2001 with Funds from the Constitutional Budget Reserve and the Four Dam Pool Project sale proceeds.The PCE Endowment Fund is an Alaska Energy Authority Fund managed by the Department of Revenue;it is invested to earn at least 7%over time.$182.7 million was appropriated to the fund in FY 2007.The deposit occurred in October 2006. AS 42.45.085 provides that 7%of the PCE Endowment Fund's 3 year monthly average market value may be appropriated to the PCE Rural Electric Capitalization Fund for annual PCE program costs.After the FY 2007 capitalization,7%of the market value equals the estimated full funding amount for the program. Revised 9/2008 ALASKA ENERGY AUTHORITY Training Program Current Status The Alaska Energy Authority (AEA),along with the Denali Commission Training Fund,provides training - opportunities to local residents for their energy projects and infrastructure.In FYO7,the AEA Training Program provided training to 131 rural Alaskans.For FY08,the program was funded at $416,435 and at least 118 rural Alaskans are expected to be trained. Program Description The intent of this training is to ensure that community personnel have the best skills with which to sustain their energy infrastructure in a business-like manner.With proper training,utilities can keep their facilities code-compliant and sustainable. The training program currently offers the following courses: e Bulk Fuel Operator Training e =Itinerant Bulk Fuel Operator Training e =©Bulk Fuel Business Training ¢Power Plant Operator Training e Advanced Power Plant Operator Training e =Electric Utility Business Training e §=PCE Utility Clerk Training e Hydro Power Plant Training Reviewed 9/2008 ALASKA ENERGY AUTHORITY Rural Power Systems Upgrade Program Current Status Between the calendar years 2000 through 2008,38 communities have benefited from powerhouse and distribution upgrades.11 additional communities are currently undergoing or are scheduled for construction upgrades in 2009.12 more communities are in conceptual design or final design stage. Program Description The Rural Power System Upgrade (RPSU)program concentrates on powerhouse and electrical distribution upgrades.Typical project include powerhouse upgrades or replacements,distribution line assessments and upgrades,line extensions to new customers,demand-side improvements and repairs to generation and distribution systems.Energy efficiency,reliability,safety and sustainability are primary drivers during the conceptual design,final design and construction process.Identification of available alternative energy and interoperability with any existing alternative energy sources is high priority with the rising cost of fuel and carbon emissions concerns. Examples of programmatic efforts include: °Rebuilding or replacement of worn-out,inefficient diesel generator units. °Rebuilding or replacement of old,hazardous and non-code compliant distribution systems. e Construction of new power generation systems that meet State and Federal codes. e Inclusion of waste heat recovery systems in new powerhouses. °Force account labor and technical assistance to rural communities through AEA personnel and/or contractors with experience in rural construction. System upgrades to be funded may be identified through a variety of ways,including via technical assistance,advanced by the local community or directed by the Legislature.The Majority of funds are via the Denali Commission.Other sources include Community Development Block Grant (CDBG),Indian Community Development Block Grant (ICDBG)and Rural Utility Service (RUS).BROANUrnerneeeMconteEMEHO__RPSUFunding1999-2007. Program Progress Annual Fuel Savings from New Powerhouses Electricity provides for lighting,communications, =e rojas heat and power necessary to operate infrastructure=m aie haben te %|that supports all other elements needed in any™Tp aa y 21 community to permit safe and healthy living=m 4 |conditions.In rural communities throughout Alaska, man F a 2 q electricity is generated by a small local "system”oe Fr 4 'Q (generation and distribution)using diesel fuel at a200.090 fee .Fi a *%<a cost that is three to five times higher than that inwennPe|||e 'll urban parts of the state.Of the 200 rural rego fy rae communities,approximately half are served byELLER:':cooperatives or another form of utility that performsCPELPHEeLPHSHoe#under a well-established organization.Others are served by very small entities,many which experience technical and administrative problems due to lack of economies of scale and/or lack of specialized skills in the community.%%,Revised 9/2008