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HomeMy WebLinkAboutBrevig Mission Heat Recovery - Project Report - Jun 2019 - REF Grant 7071040Grantee: City of Brevig Mission Project Title: Brevig Mission Water System Heat Recovery Grant Number: 7071040/403070 Close Out Report BACKGROUND RDF TTJ ,,F ,� Ire JUN 1 0 2019 AIDEA 4EA In 2014, the City of Brevig Mission received funding from the Alaska Energy Authority s (AEA) Renewable Energy Fund to design and construct a heat recovery project. The project was intended to recover heat from the Alaska Village Electric Cooperative (AVEC) power plant and utilize that heat at the water treatment plant (WTP) and washeteria. The 2013 heat recovery feasibility study estimated that this project could reduce the city's fuel usage by 14,726 gallons annually. ACTIVITIES The City of Brevig Mission entered into a cooperative project agreement with Alaska Native Tribal Health Consortium (ANTHC) to manage the project in December 2014. ANTHC contracted with CRW Engineering to design the heat recovery system. During the design process it was determined that the WTP could utilize all of the recovered heat so the washeteria was removed from the scope of work in an effort to reduce construction costs. The design was finalized in July 2017. When the design was completed, ANTHC received an update construction cost estimate that exceeded the available funds. ANTHC began identifying and securing other funding sources. ANTHC project managers secured supplemental funding from the Environmental Protection Agency and Norton Sound Economic Development Council (NSEDC). For the remaining budget shortfall ANTHC and the City of Brevig Mission were pre -approved for a subsidized loan from the Alaska Department of Environmental Conservation (DEC) State Revolving Fund (SRF) loan program. The SRF program determined that the project was eligible for 80% loan forgiveness. By using the money saved from the heat recovery system that would have otherwise been spent on heating fuel, the City could have paid back the loan in four years. ANTHC project manager travelled to Brevig Mission several times to discuss options for moving the project forward. In August 2018, the City Council passed a resolution reaffirming their commitment to the project and stated their intention to apply for the subsidized loan. In October 2018, the newly elected City Council announced that they were considering a competing solar and wind project that would supply heat to the WTP using electric boilers. In December 2018, ANTHC attended a special energy meeting in Brevig Mission with the City Council, Kawerak, Deerstone Consulting, AVEC, and NSEDC so that the Council could make an informed decision on which project to pursue. The supporting agencies were in agreement that the heat recovery project was the cost effective option that would save the most money for the community. A cost/benefit analysis was presented that compared potential savings, risks, and challenges for each project. If heat recovery was selected, AVEC even offered to help develop a smaller grid -tied system so that the community could still utilize wind and solar. The Council elected to pursue the renewable energy project. ANTHC requested written confirmation from the City Council but has yet to receive any official notice. Since there were strict nn I JUN 10 2019,� _., timelines associated with some of the project funding, ANTHC notified funding a��hat the project was not moving forward. PROJECT COSTS The original award from AEA to the community was $731,400. ANTHC spent $112,945.45 of that funding. The following table represents incurred project costs. Design Cost & Engineering Services $94,009.99 —CRW Engineering ANTHCStaff— developingdesign $18,935.46 contract, reporting, and project planning Total Costs $112,94S.45 ANTHC agreed to provide $21,941 in matching funds. To date, ANTHC has spent $13,407 of the matching funds. The remaining amount from the AEA grant is approximately $618,455. PROJECT OUTCOMES Although this project did not result in the construction of a heat recovery system, the community has a designed system that can be built if the community determines that heat recovery is a viable project. The competing renewable energy project was funded from NSEDC but also had a budget shortfall. LESSONS LEARNED Despite the project not being constructed, ANTHC identified a funding source that can be used to develop energy saving water & sewer projects in other communities. Presenting financing as a funding option to the City Council highlighted several issues and strategies that will be useful for other projects that opt to use the SRF as a project funding mechanism. CONCLUSIONS AND RECCOMENDATIONS This heat recovery project had the potential to make a significant impact on the City's operating costs. ANTHC and other supporting agencies presented the cost benefit analysis of both the heat recovery system and the competing renewable energy project. ANTHC is not connected to the renewable energy project in anyway. ANTHC will remain an available resource should the community request future technical assistance.