HomeMy WebLinkAbout2020 Renewable Energy Fund Status Report Round 13 01-27-2021-REFREDUCING THE COST OF ENERGY IN
ALASKA
2020 Renewable
Energy Fund (REF)
Status Report
Alaska Energy Authority —
Renewable Energy Fund –Round XIII
REDUCING THE COST OF ENERGY IN ALASKA
SAFE,
RELIABLE, &
AFFORDABLE
ENERGY
SOLUTIONS
Alaska State Legislature
January 2021
REDUCING THE COST OF ENERGY IN
ALASKA
REF Overview Page 3
REF Statutory Guidance Page 4
Round XIII Request for Application Schedule Page 5
REF Received Applications Summary Page 6
REF Evaluation Process Page 8
REF Funding Limits Page 12
REF Fund Balance Page 13
Renewable Energy Fund Advisory Committee (REFAC)Page 14
REFAC Roles Page 15
Non-Recommended Applications Page 16
REFAC Solicitation of Advice on Recommended Projects Page 24
Recommended Applications Summary Page 25
Applications Forwarded for Legislature’s Decision on Funding Page 27
Partial Funding Recommendation Page 28
Online Supplemental Materials Page 30
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SAFE,
RELIABLE, &
AFFORDABLE
ENERGY
SOLUTIONS
Table of Contents
REDUCING THE COST OF ENERGY IN
ALASKA
REF Overview
3
The Alaska Renewable Energy Fund (REF)is a competitive grant program that was established by the Alaska StateLegislaturein2008andisnowinitsthirteenthannualfundingcycle(i.e.Round).The program was established tohelpfundcost-effective renewable energy projects throughout the state.These projects are intended to helpcommunitiesreducetheirdependenceonfossilfuelsinordertostabilizetheircostsofbothheatandelectricity.The program also creates jobs,utilizes local energy resources,keeps money in local economies,and fosterseconomicdevelopment.As December 31,2020,the REF has funded $255 million worth of projects since itsinception.
REDUCING THE COST OF ENERGY IN
ALASKA
REF Statutory Guidance (AS 42.45.045)
Eligible projects must:
Be a new project not in operation in 2008, and
•be a hydroelectric facility;
•direct use* of renewable energy resources;
•a facility that generates electricity from fuel cells that use hydrogen from renewable energy sources or natural gas** (subject to additional conditions); or
•be a facility that generates electricity using renewable energy.
•natural gas** applications must also benefit a community that
•Has a population of 10,000 or less, and
•Does not have economically viable renewable energy resources it can develop.
*3 AAC 107.615 a project is a ”direct use” of RE resources if it uses renewable energy resources to generate or to make a fuel used to generate energy
Evaluation process
Develop a methodology for determining the order of projects that may receive assistance,
•most weight being given to projects that serve any area in which the average cost of energy to each resident of the area exceeds the average cost to each resident of other areas of the state,
•significant weight given to a statewide balance of grant funds and to the amount of matching funds an applicant is able to make available
•The REF evaluation process is comprised of four stages.
4
REDUCING THE COST OF ENERGY IN
ALASKA
DATE ACTION
Jul 20, 2020 Request For Applications (RFA) posted
Sep 28, 2020 Application submission deadline
Sep -Dec 2020 Evaluation of Applications
Jan 15,2021 Renewable Energy Fund Advisory Committee (REFAC) Meeting
Jan 29, 2021 AEA deadline for recommendations to Legislature
July 1, 2021* (Estimate)Capital funds appropriated by Legislature –Grants could begin
Request for Applications Schedule –REF Round XIII
5
REDUCING THE COST OF ENERGY IN
ALASKA
Round XIII –Received Applications Summary
The table to the right indicates the number of applications received by requested phase*, along with the corresponding grant request totals. Per the current RFA, there are four phases, listed below in chronological order, for which an applicant may indicate a funding request:
(1)Reconnaissance
(2)Feasibility and Conceptual Design
(3)Final Design and Permitting
(4)Construction
*For purposes of tabulation, if an applicant applied for more than one phase, the first chronological phase was counted, with the latter phases being excluded.
6
Requested Phase No. of applications Grant Funds Requested
Reconnaissance 4 1,327,905$
Feasibility and Conceptual Design 8 4,637,321$
Final Design and Permitting 5 3,496,737$
Construction 4 3,362,000$
Total 21 12,823,963$
REDUCING THE COST OF ENERGY IN
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Round XIII –Received Applications Summary
For REF Round XIII, AEA received a total of 21 applications yielding a total grant funding request of $12.8 million.
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Energy Region No. of Applications Grant Funds Requested
Aleutians 2 1,995,163$
Bering Straits 1 368,822$
Bristol Bay 5 5,181,156$
Copper River/Chugach 1 294,642$
Lower Yukon-Kuskokwim 4 564,750$
Northwest Arctic 2 1,628,607$
Railbelt 2 963,349$
Southeast 3 1,177,474$
Yukon-Koyukuk/Upper Tanana 1 650,000$
Total 21 12,823,963$
Technology No. of Applications Grant Funds Requested
Biomass Heat 2 1,544,000$
Geothermal 2 1,220,085$
Heat (Other)1 69,349$
Heat Recovery 1 1,303,607$
Hydro 7 6,458,772$
Storage 1 325,000$
Wind 7 1,903,150$
Total 21 12,823,963$
REDUCING THE COST OF ENERGY IN
ALASKA
REF Evaluation Process -Stage 1 –Eligibility and Completeness
The REF evaluation process is comprised of four stages. Stage one is an evaluation of applicant and project eligibility and application completeness, as per 3 AAC 107.635. This portion of the evaluation process is conducted by AEA staff.
•Applicant eligibility is defined as per AS 42.45.045 (l).
•“electric utility holding a certificate of public convenience and necessity under AS 42.05, independent power producer, local government, or other governmental utility, including a tribal council and housing authority;”
•Project eligibility is defined as per AS 42.45.045 (f)-(h) and is provided on the preceding page.
•Project completeness
•An application is complete in that the information provided is sufficiently responsive to the RFA to allow AEA to consider the application in the next stage (stage two) of the evaluation.
•The application must provide a detail description of the phase(s) of project proposed.
Applications which fail to meet the requirements of stage one will be rejected by the authority, and the authority will notify each applicant whose application is rejected of the authority’s decision.
8
STAGE 1 CRITERIA PASS/FAIL
Timely submittal of application PASS/FAIL
Applicant eligibility, including formal
authorization and ownership, site control,
and operation
PASS/FAIL
Project Eligibility PASS/FAIL
Complete application,including Phase
description(s)
PASS/FAIL
REDUCING THE COST OF ENERGY IN
ALASKA
REF Evaluation Process -Stage 2 –Technical and Economic Feasibility
Stage two is an evaluation concerning technical and economic feasibility. This portion of the evaluation process is conducted by AEA staff, Alaska Department of Natural Resources, and contracted third-party vendors.
The following items are evaluated as part of the stage two evaluation, as required per 3 AAC 107.645:
•Project management, development, and operations
•Qualifications and experience of project management team, including on-going maintenance and operation
•Technical feasibility –including but not limited to sustainable current and future availability of renewable resource, site availability and suitability, technical and environmental risks, and reasonableness of proposed energy system
•Economic feasibility and benefits –including but not limited to project benefit-cost ratio, project financing plan, and other public benefits owing to the project
All stage 2 criteria are weighted as follows as part of the evaluation process. Those applications that score below 40 points in this stage will be automatically rejected by the authority, however, those projects scoring above 40 can also be rejected as under 3 AAC 107.645(b) has the authority to reject applications that it determines to be not technically and economically feasible, or do not provide sufficient public benefit.
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CRITERIA CRITERIA DESCRIPTION WEIGHT
1 Project management, development, and
operation
25%
2 Qualifications and experience 20%
3 Technical feasibility 20%
4.a Economic benefit-cost ratio 25%
4.b Financing plan 5%
4.c Other public benefit 5%
REDUCING THE COST OF ENERGY IN
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REF Evaluation Process -Stage 3 –Project Ranking
Stage three is an evaluation concerning the ranking of eligible projects. This portion of the evaluation process is conducted by AEA staff in conjunction with solicitation from the Renewable Energy Fund Advisory Committee (REFAC) .
The following items are evaluated as part of the stage three evaluation, as required per 3 AAC 107.655-660:
•Cost of energy
•Applicant matching funds
•Project feasibility (levelized score from stage 2)
•Project readiness
•Public benefits (evaluated through stage 2 benefits)
•Sustainability
•Local Support
•Regional Balance
•Compliance
All stage 3 criteria are weighted as follows as part of the evaluation process. The stage 3 scoring is used to determine the ranking score.
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CRITERIA CRITERIA DESCRIPTION WEIGHT
1 Cost of Energy 30%
2 Matching Funds 15%
3 Project Feasibility (levelized score from
stage 2)
25%
4 Project Readiness 5%
5 Public Benefits 10%
6 Sustainability 10%
7 Local Support 5%
8 Regional Balance Pass/Fail
9 Compliance Pass/Fail
REDUCING THE COST OF ENERGY IN
ALASKA
REF Evaluation Process -Stage 4 –Regional Spreading
Stage four is a final ranking of eligible projects, as required per 3 AAC 107.660, which gives “significant weight to providing a statewide balance of grant money, taking into consideration the amount of money available, number and types of projects within each region, regional rank, and statewide rank.” This portion of the evaluation process is conducted by AEA staff in conjunction with solicitation from the Renewable Energy Fund Advisory Committee (REFAC) .
The following items are evaluated as part of the stage four evaluation, as required per 3 AAC 107.660:
•Cost of energy burden = [HH cost of electric + HH heat cost] ÷ [HH income] –this is used to determine target funding allocation by region –for regional spreading
Stage 4 cost of energy burden given below. The below table indicates target funding, as has been allocated, by region, this will be applied to stage 3 statewide ranking to determine the regionally-spread rank.
11
Even Split
Energy Region Grant Funding % Total
Cost
burden
(HH
cost/HH
income)
Allocation cost
of energy basis
Additional
funding
needed to
reach 50%
% of
target
allocation % Total
Allocation
per capita
basis
Allocation
per region
basis
Aleutians $17,426,348 7%9.39%$17,935,444 ($8,458,626)97%1%$2,851,862 $21,991,472
Bering Straits $20,485,269 8%15.43%$29,456,220 ($5,757,159)70%1%$3,301,922 $21,991,472
Bristol Bay $10,911,982 5%14.40%$27,499,297 $2,837,666 40%1%$2,498,585 $21,991,472
Copper River/Chugach $23,793,838 10%6.93%$13,224,221 ($17,181,728)180%1%$3,090,571 $21,991,472
Kodiak $16,486,919 7%5.83%$11,132,481 ($10,920,678)148%1%$2,951,723 $21,991,472
Lower Yukon-Kuskokwim $37,237,089 15%17.83%$34,039,114 ($20,217,531)109%4%$8,971,788 $21,991,472
North Slope $1,251,859 1%3.87%$7,393,706 $2,444,994 17%1%$2,491,403 $21,991,472
Northwest Arctic $23,119,029 10%15.99%$30,540,928 ($7,848,564)76%1%$2,512,949 $21,991,472
Railbelt $22,059,938 9%5.05%$9,636,377 ($17,241,750)229%78%$188,445,503 $21,991,472
Southeast $54,193,791 22%5.48%$10,469,004 ($48,959,289)518%9%$22,566,950 $21,991,472
Yukon-Koyukuk/Upper Tanana $14,377,031 6%26.49%$50,579,402 $10,912,670 28%1%$2,222,940 $21,991,472
Statewide $563,101 0%0.00%
TOTAL $241,906,195 100%$241,906,195 100%$241,906,195 $241,906,195
Cumulative through Round 9
Cost of Power Allocation Population
Total Round
1-9 Funding
REDUCING THE COST OF ENERGY IN
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REF Round XIII funding limits are governed by the requested phase(s) in the application and the technology type applied. No grant request amounts were found to be in excess of the grant funding limits as stated.
Low vs High Cost Energy Areas:
•Low Energy Cost Areas are defined as communities with a residential retail electric rate of below $0.20 per kWh, before Power Cost Equalization (PCE) reimbursement is applied. For heat projects, low energy cost areas are communities with natural gas available as a heating fuel to at least 50% of residences, or availability expected by the time the proposed project is constructed.
•High Energy Cost Areas are defined as communities with a residential retail electric rate of $0.20 per kWh or higher, before PCE funding is applied. For heat projects, high energy cost areas are communities that do not have natural gas available as a heating fuel
REF Round XIII Grant Funding Limits
12
REF Funding Limits
REDUCING THE COST OF ENERGY IN
ALASKA
As of December 31st, 2020, the current REF Fund Balance is $6.5 million. The REF program is set to sunset in 2023. As indicated in the provided budget analysis, there are administrative costs related to operating budget appropriations allocated for FY22 and FY23.
With a current REF fund balance of $6.5 million, this is insufficient to cover the total grant requests of all 21 received applications of $12.8 million, a delta of ($6.2 million).
The current list of 11 recommended applications totals a recommended grant request of $4.7 million. With a REF fund balance of $6.5 million, this is sufficient to cover these requests with $1.7 million remaining for further appropriation or left within the fund, at the discretion of the Legislature.
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REF Fund Balance
REDUCING THE COST OF ENERGY IN
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Renewable Energy Fund Advisory Committee (REFAC)
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NAME TITLE SECTOR APPOINTED BY
Kohler,Meera CEO,Alaska Village Electric Cooperative Small rural electric utility Governor (pending)
VACANT TBD Business/organization involved
in renewable energy
Governor
Schubert,Gail CEO, Bering Straits Native Corporation Representative of an Alaska
Native Organization
Governor
Siira, Alicia Member,Denali Commission; Exec Dir,
Associated General Contractors of Alaska
Denali Commission Governor
Thibert,Lee CEO,Chugach Electric Association Large urban electric utility Governor
Von Imhof, Natasha Senator Senate Member 2 Senate President
Wilson, David Senator Senate Member 1 Senate President
Wool,Adam Representative House Member 2 Speaker of the House
Zulkosky, Tiffany Representative House Member 1 Speaker of the House
REDUCING THE COST OF ENERGY IN
ALASKA
Statutes (AS 42.45.045)
•AEA “in consultation with the advisory committee…develop a methodology for determining the order of projects that may receive assistance….”
•AEA “shall, at least once each year, solicit from the advisory committee funding recommendations for all grants .”
Regulations (3 AAC 107.660)
(a) To establish a statewide balance of recommended projects, the authority will provide to the advisory committee established in AS 42.45.045 (i) a statewide and regional ranking of all applications recommended for grants.
(b) In consultation with the advisory committee established in AS 42.45.045 (i), the authority will
(1) make a final prioritized list of all recommended projects, giving significant weight to providing a statewide balance of grant money, and taking into consideration the amount of money that may be available, number and types of projects within each region, regional rank, and statewide rank
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REFAC Roles
REDUCING THE COST OF ENERGY IN
ALASKA
Non-Recommended Applications –Summary
16
In AEA’s stage one evaluation, as per 3 AAC 107.635, it was determined that five applications did not meet the requirements and were rejected. Two applicants appealed their rejections as per 3 AAC 107.650 –“Requests for reconsideration”. Upon AEA’s due consideration and review of the appeals, both rejections were upheld, and final written notices issued to the applicants.
Owing to the subsequent stage two evaluation for the remaining applications, it was concluded by the authority that a further five applications, as per 3 AAC 107.645, were not technically and economically feasible. Applicants were then notified of their rejection. Four applicants appealed their rejections. Upon the authority’s receipt of the appeals, and af tera thorough review of the applicants’ applications, the rejections were upheld. The applicants were then notified in writing of AEA’s final determination of non-recommendation.
There are 11 remaining applications which are recommended, with 10 being rejected during stage one and stage two evaluations, of an initial total of 21 applications. In terms of grant funding requests, a total of $2 million was rejected in stage one and a total of $4 million rejected in stage two, yielding a total of $6.7 million in grant request monies remaining . With a current REF fund balance of $6.5 million, there are insufficient funds to cover the total grant request amount, prior to AEA funding level recommendations as addressed later in the presentation, with a delta of ($219,476).
REDUCING THE COST OF ENERGY IN
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Count Energy Region ID
Application
ID Project Name Applicant Tech
B/C
Ratio
Impacted
Population
Household
Energy Cost
Stage 2
Score
Stage 3
Score
Regional
Rank
Statewide
Rank
Requested
Phase Cost
Applicant Grant
Requested
Applicant
Match Offered Rec Phase(s)
AEA Rec
Funding Level Rec Funding
Cumulative
Funding
1 Railbelt 1132 13004
Building Integrated Technologies
Potential in Alaska
University of Alaska
Anchorage
Heat
(Other)0 7877 1,428$ 0 N/A N/A N/A 105,872$ 69,349$ 36,523$ N/A Stage 1 Reject
Not
Recommended 69,349$
2 Bristol Bay 1136 13008 Chignik Hydroelectric Dam Project City of Chignik Hydro 0.57 95 5,826$ 24.67 N/A N/A N/A 1,276,656$ 1,276,656$ -$ N/A Stage 2 Reject
Not
Recommended 1,346,005$
3 Bering Straits 1137 13009
Pilgrim Hot Springs Geothermal Power
Plant Conceptual Design Kawerak, Inc.Geothermal 1.01 3690 7,531$ 42.46 N/A N/A N/A 505,715$ 368,822$ 136,893$ N/A Stage 2 Reject
Not
Recommended 1,714,827$
4 Aleutians 1140 13012
Engineering Alaska's Geothermal Energy-
HSBV, Akutan
University of Alaska
Fairbanks - Alaska Division
of Geological & Geophysical
Surveys Geothermal 0 990 8,418$ 0 N/A N/A N/A 947,156$ 851,263$ 95,893$ N/A Stage 1 Reject
Not
Recommended 2,566,090$
5 Southeast 1143 13015 Burro Creek Hydro Project Burro Creek Holdings, LLC Hydro 1.56 1045 4,885$ 53.17 N/A N/A N/A 612,000$ 586,000$ 26,000$ N/A Stage 2 Reject
Not
Recommended 3,152,090$
6 Southeast 1144 13016
Elfin Cove Hydro Final Permitting and
Design
Community of Elfin Cove
Non-Profit Corporation,
Elfin Cove Utility
Commission Hydro 0.73 11 8,007$ 40.33 N/A N/A N/A 162,500$ 130,000$ 32,500$ N/A Stage 2 Reject
Not
Recommended 3,282,090$
7 Bristol Bay 1145 13017
KNUTSON CREEK HYDRO PROJECT
CONSTRUCTION Pedro Bay Village Council Hydro 0.34 36 7,117$ 28.33 N/A N/A N/A 1,715,000$ 1,710,000$ 5,000$ N/A Stage 2 Reject
Not
Recommended 4,992,090$
8 Railbelt 1147 13019 NENANA BIOMASS AND WASHETERIA City of Nenana
Biomass
Heat 0 362 5,072$ 0 N/A N/A N/A 894,000$ 894,000$ -$ N/A Stage 1 Reject
Not
Recommended 5,886,090$
9
Lower Yukon-
Kuskokwim 1148 13020 Akiachak Reconnaissance Study Akiachak Ltd & Subsidiaries Wind 0 724 8,068$ 0 N/A N/A N/A 91,000$ 91,000$ -$ N/A Stage 1 Reject
Not
Recommended 5,977,090$
10 Bristol Bay 1149 13021 Port Heiden Reconnaissance study City of Port Heiden Wind 0 105 7,703$ 0 N/A N/A N/A 91,000$ 91,000$ -$ N/A Stage 1 Reject
Not
Recommended 6,068,090$
TOTAL 6,400,899$ 6,068,090$ -$
Note:
orange cells indicate heat project applications
blue cells indicate standard electric project applications
Non-Recommended Projects Project Costs Recommendation
Non-Recommended Applications –Summary
17
The following applications were not recommended for funding, owing to the authority’s stage one and stage two evaluation criteria, as indicated below:
REDUCING THE COST OF ENERGY IN
ALASKA
Non-Recommended Applications –Stage One
18
Below are the five identified applications which were rejected owing to the stage one evaluation:
Count
Energy
Region ID
Application
ID Applicant Name Project Name Technology
Requested
Phase(s)
Rejected
Stage
B/C
Ratio
Stage 2
Score
Grant
Request ($)Rejection Reasoning
1 Railbelt 1132 13004 University of Alaska Anchorage
Building Integrated
Technologies Potential in Alaska Heat (Other)Feas 1 N/A N/A $ 69,349 Ineligible project
2 Aleutians 1140 13012
University of Alaska Fairbanks -
Alaska Division of Geological &
Geophysical Surveys
Engineering Alaska's Geothermal
Energy- HSBV, Akutan Geothermal Recon; Feas 1 N/A N/A $ 851,263 Ineligible project
3 Railbelt 1147 13019 City of Nenana
NENANA BIOMASS AND
WASHETERIA
Biomass
Heat Const 1 N/A N/A $ 894,000 Late submittal, Incomplete application
4
Lower Yukon-
Kuskokwim 1148 13020 Akiachak Ltd & Subsidiaries Akiachak Reconnaissance Study Wind Recon 1 N/A N/A $ 91,000 Late submittal, Incomplete application
5 Bristol Bay 1149 13021 City of Port Heiden
Port Heiden Reconnaissance
study Wind Recon 1 N/A N/A $ 91,000 Late submittal
Total $ 1,996,612
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Non-Recommended Applications –Stage Two
19
Below, and continued on the following pages, are the five identified applications which were rejected owing to the stage two evaluation:
Count
Energy
Region ID
Application
ID Applicant Name Project Name Technology
Requested
Phase(s)
Rejected
Stage
B/C
Ratio
Stage 2
Score
Grant
Request ($)
1 Bristol Bay 1136 13008 City of Chignik
Chignik
Hydroelectric Dam
Project Hydro Design 2 0.57 24.67 $ 1,276,656
Reasoning
This project is not recommended due primarily to poor economics: high cost of study for marginal benefits and required long life
for the investment to achieve economic payback.
The potential load (diesel displacement) and resource (annual precipitation) are both very limited. Any decrease in load or
resource in a year will not be made up in another year because of the limitations of demand or resource.
Capital and operational costs are frequently greater than estimated. However, this application is for almost $1.3 million dollars
for final design and permitting of a small hydroelectric facility. Other projects can tend to have final design and permitting more
in the range of half a million dollars plus or minus.
Application did not meet the minimum score of 40 points in stage 2.
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Non-Recommended Applications –Stage Two
20
Count
Energy
Region ID
Application
ID Applicant Name Project Name Technology
Requested
Phase(s)
Rejected
Stage
B/C
Ratio
Stage 2
Score
Grant
Request ($)
2 Bering Straits 1137 13009 Kawerak, Inc.
Pilgrim Hot Springs
Geothermal Power
Plant Conceptual
Design Geothermal Feas 2 1.01 42.46 $ 368,822
Reasoning
Insufficient information was available for the applicant analysis, so the AEA analysis is the same as that of the applicant. The
project’s public benefits may be significant but are not easily monetized and there is no existing electrical system to use as the
basis for estimating benefits from displaced diesel-generated electricity. For illustrative purposes we assume the applicant would
pursue the developments, without the geothermal resource, by using diesel generators.
The applicant assumes that the electrical system will lead to economic development and attract tourists. A demand/market
analysis or business plan could help to determine how many visitors can be expected and how many staff will be required to
operate the site.
This project is predicated on a future tourism- based community. The tourism demand is not fully developed, and subject to
seasonality and volatility.
The specified powerhouse capacity is based on the geothermal resource estimate, not an existing or estimated community
electrical load.
The detail and funding for the necessary business planning, tourism development, and infrastructure construction that would
justify the design and construction of a geothermal power plant at Pilgrim Hot Springs were not provided. Therefore, AEA does
not recommend funding this project.
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Non-Recommended Applications –Stage Two
21
Count
Energy
Region ID
Application
ID Applicant Name Project Name Technology
Requested
Phase(s)
Rejected
Stage
B/C
Ratio
Stage 2
Score
Grant
Request ($)
3 Southeast 1143 13015
Burro Creek
Holdings, LLC
Burro Creek Hydro
Project Hydro Feas; Design 2 1.56 53.17 $ 586,000
Reasoning
This project is not recommended due primarily to lack of diesel displacement. Currently almost all energy used by local utility is
generated from hydropower such that an intertie with the local utility would not displace diesel fuel. Potential diesel loads to be
displaced are given as dock electrification, transmission to the Yukon for mine loads, and various electric transportation in
Skagway.
Electrification of dock for cruise ships poses very substantial technical challenges. Displacement of cruise ship power would occur
only part of the year and part of a week. A connection for cruise ships would not enable ships to go off diesel. Transportation
and mines are other possible future demands that are not currently present. The project likely has a significant higher direct and
indirect cost than estimated. Prior to any sales various infrastructure upgrades to the utility system would need to occur. Power
sales from this project would need to go through the local utility. The utility may choose to meet new loads by developing their
own projects and not purchasing power from an Independent Power Producer.
A large percent of the application is for a business plan. To determine the project market an Integrated Resources Plan needs to
be prepared with the local utility to determine the future possible loads and projects to meet the loads.
REDUCING THE COST OF ENERGY IN
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Count
Energy
Region ID
Application
ID Applicant Name Project Name Technology
Requested
Phase(s)
Rejected
Stage
B/C
Ratio
Stage 2
Score
Grant
Request ($)
4 Southeast 1144 13016
Community of Elfin
Cove Non-Profit
Corporation, Elfin
Cove Utility
Commission
Elfin Cove Hydro
Final Permitting and
Design Hydro Design 2 0.73 40.33 $ 130,000
Reasoning
This project is not recommended due primarily to poor economics: high cost of study for marginal benefits, required long life for
the investment to achieve economic payback and the associated uncertainty about whether the resource will be available used for
its economic life. The potential load (diesel displacement) and resource (annual precipitation) are both very limited. Any
decrease in load or resource in a year will not be made up another year because of the limitations of demand or resource.
Capital and operational costs are frequently greater than estimated. The construction cost estimate uses 18% for contingency.
This project will be small, remote, few bidders, and there are questions on how items will be constructed. Similar small projects in
the Southeast have had cost increases greater than 20%.
This phase of design and permitting work has received grant funding from the Renewable Energy Fund and the time and cost
have substantially increased from initial estimates. The substantial increases provide AEA with less confidence in completion of
current phase and construction phase.
Non-Recommended Applications –Stage Two
22
REDUCING THE COST OF ENERGY IN
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Non-Recommended Applications –Stage Two
23
Count
Energy
Region ID
Application
ID Applicant Name Project Name Technology
Requested
Phase(s)
Rejected
Stage
B/C
Ratio
Stage 2
Score
Grant
Request ($)
5 Bristol Bay 1145 13017
Pedro Bay Village
Council
KNUTSON CREEK
HYDRO PROJECT
CONSTRUCTION Hydro Const 2 0.34 28.33 $ 1,710,000
TOTAL 4,071,478$
Reasoning
This project is not recommended due primarily to poor economics. With a B/C ratio of less than 1.0, the calculated future
benefits of the project are less than the costs. The model B/C Ratio calculated is likely optimistic as the capital construction cost
of the project and operation & maintenance costs for two systems (hydro and diesel) tend to be more than estimated.
Capital and operational costs are frequently greater than estimated. The Grant would be used for phase 1 of the project with
additional sources of funds not identified for phase 1 cost increases or future phases. This project will be small, remote, few
bidders, and breaking a project into phases over many years as funding is sought will increase costs because of multiple
mobilizations and length of project management time. There are significantly limited reasonable funding options that would be
available to the applicant to cover phase 1 cost increases/overruns or future phase costs in a timely manner. Any loan
commitments on the part of the applicant would further depress the B/C ratio. Application did not meet the minimum score of 40
points in stage 2.
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ALASKA
Solicitation of Advice from REFAC
As statutorily required per AS 42.45.045 and set forth in 3 AAC 107.660, the authority solicited advice from the REFAC, on Jan 15, 2021, during the posted public meeting concerning making a final list / ranking of eligible projects, which gives “significant weight to providing a statewide balance of grant money, taking into consideration the amount of money available, number and types of projects within each region, regional rank, and statewide rank.” This finalized list is provided herein for consideration by the legislature for recommendation in accordance with AS 42.45.045(d)(3). Any grant awards are subject to legislative appropriation.
The right-hand table is provided to assess the “regional spreading” of REF funding. As indicated, both the Railbelt and the Southeast energy regions currently exceed 200% of their target allocation based on their cost of energy burden. Bristol Bay, Yukon-Koyukuk/Upper Tanana, and the North Slope energy regions are the remaining regions where the allocation, based on the cost of energy burden, has not met 50% of their potential allocation, categorizing these regions as “under-served”.
The authority solicits advice from the REFAC relating to any recommendations in changes to funding level, ranking, and/or total amount of funding and number of projects.
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Even Split
Energy Region Grant Funding % Total
Cost
burden
(HH
cost/HH
income)
Allocation cost
of energy basis
Additional
funding
needed to
reach 50%
% of
target
allocation % Total
Allocation
per capita
basis
Allocation
per region
basis
Aleutians $17,426,348 7%9.39%$17,935,444 ($8,458,626)97%1%$2,851,862 $21,991,472
Bering Straits $20,485,269 8%15.43%$29,456,220 ($5,757,159)70%1%$3,301,922 $21,991,472
Bristol Bay $10,911,982 5%14.40%$27,499,297 $2,837,666 40%1%$2,498,585 $21,991,472
Copper River/Chugach $23,793,838 10%6.93%$13,224,221 ($17,181,728)180%1%$3,090,571 $21,991,472
Kodiak $16,486,919 7%5.83%$11,132,481 ($10,920,678)148%1%$2,951,723 $21,991,472
Lower Yukon-Kuskokwim $37,237,089 15%17.83%$34,039,114 ($20,217,531)109%4%$8,971,788 $21,991,472
North Slope $1,251,859 1%3.87%$7,393,706 $2,444,994 17%1%$2,491,403 $21,991,472
Northwest Arctic $23,119,029 10%15.99%$30,540,928 ($7,848,564)76%1%$2,512,949 $21,991,472
Railbelt $22,059,938 9%5.05%$9,636,377 ($17,241,750)229%78%$188,445,503 $21,991,472
Southeast $54,193,791 22%5.48%$10,469,004 ($48,959,289)518%9%$22,566,950 $21,991,472
Yukon-Koyukuk/Upper Tanana $14,377,031 6%26.49%$50,579,402 $10,912,670 28%1%$2,222,940 $21,991,472
Statewide $563,101 0%0.00%
TOTAL $241,906,195 100%$241,906,195 100%$241,906,195 $241,906,195
Cumulative through Round 9
Cost of Power Allocation Population
Total Round
1-9 Funding
REDUCING THE COST OF ENERGY IN
ALASKA
Round XIII –Recommended Applications Summary
There are 11 remaining recommended applications for Round XIII, totaling $4.7 million. Two applications, pursuant to 3 AAC 170.655(b), are recommended for partial funding, for the initial phase of those requested by the applicant; this accounts for the reduction in grant monies requested from $6.7 million to $4.7 million.
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Energy Region No. of applications Grant Funds Requested
Aleutians 1 139,000$
Bristol Bay 2 1,103,500$
Copper River/Chugach 1 294,642$
Lower Yukon-Kuskokwim 3 473,750$
Northwest Arctic 2 1,628,607$
Southeast 1 461,474$
Yukon-Koyukuk/Upper Tanana 1 650,000$
Total 11 4,750,973$
Technology No. of applications Grant Funds Requested
Biomass Heat 1 650,000$
Heat Recovery 1 1,303,607$
Hydro 3 1,756,116$
Storage 1 325,000$
Wind 5 716,250$
Total 11 4,750,973$
REDUCING THE COST OF ENERGY IN
ALASKA
Round XIII –Recommended Applications Summary
With a current REF Fund Balance of $6.5 million and a remaining total grant request amount of $4.7 million, there is sufficient REF funds to cover the recommended grant amounts, with a remaining $1.7 million balance remaining in the fund.
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Requested Phase No. of Applications Grant Funds Requested
Reconnaissance 1 294,642$
Feasibility and Conceptual Design 5 1,608,250$
Final Design and Permitting 3 2,090,081$
Construction 2 758,000$
Total 11 4,750,973$
REDUCING THE COST OF ENERGY IN
ALASKA
Count Energy Region ID
Application
ID Project Name Applicant Tech
B/C
Ratio
Impacted
Population
Household
Energy Cost
Stage 2
Score
Stage 3
Score
Regional
Rank
Statewide
Rank
Requested
Phase Cost
Applicant Grant
Requested
Applicant
Match Offered Rec Phase(s)
AEA Rec
Funding Level Rec Funding
Cumulative
Funding
1
Copper
River/Chugach 1141 13013 Cordova Hydro Storage Assessment Project
Cordova Electric
Cooperative, Inc.Hydro 0.99 2343 6,740$ 78.17 70.13 1 1 444,642$ 294,642$ 150,000$ Recon; Feas Full 294,642$ 294,642$
2 Southeast 1138 13010
Water Supply Creek Hydro Final Design -
Hoonah, AK
Inside Passage Electric
Cooperative Hydro 1.35 782 6,297$ 85.83 70.09 1 2 536,474$ 461,474$ 75,000$ Design Full 461,474$ 756,116$
3
Yukon-
Koyukuk/Upper
Tanana 1134 13006
Walter Northway School Wood Chip Heating
System
Alaska Gateway School
District
Biomass
Heat 1.42 60 8,246$ 84.54 69.7 1 3 683,500$ 650,000$ 62,375$ Const Full 650,000$ 1,406,116$
4
Lower Yukon-
Kuskokwim 1142 13014
Improved airfoil for wind turbines in
Kongiganak Puvurnaq Power Company Wind 2.02 523 8,111$ 89.5 69.66 1 4 117,000$ 108,000$ 9,000$ Const Full 108,000$ 1,514,116$
5 Northwest Arctic 1139 13011 Shungnak Heat Recovery Expansion City of Shungnak
Heat
Recovery 1.03 253 11,601$ 73.5 64.44 1 5 1,303,607$ 1,303,607$ -$ Design; Const Full 1,303,607$ 2,817,723$
6
Lower Yukon-
Kuskokwim 1130 13002
Goodnews Bay Wind Energy Feasibility and
Conceptual Design Project
Alaska Village Electric
Cooperative, Inc.Wind 0.15 284 6,832$ 66.33 58.77 2 6 135,000$ 128,250$ 6,750$ Feas Full 128,250$ 2,945,973$
7 Bristol Bay 1129 13001
Nuyakuk River Hydroelectric Project (Run of
River Project)
Nushagak Electric &
Telephone Cooperative Hydro 0.25 3306 6,323$ 53.58 56.45 1 7 12,280,000$ 2,000,000$ 10,280,000$ Feas Partial 1,000,000$ 3,945,973$
8
Lower Yukon-
Kuskokwim 1131 13003
Kotlik Wind Energy Feasibility and Conceptual
Design Project
Alaska Village Electric
Cooperative, Inc.Wind 0.25 649 7,223$ 57.42 54.73 3 8 250,000$ 237,500$ 12,500$ Feas Full 237,500$ 4,183,473$
9 Bristol Bay 1133 13005
Naknek Service Area Wind and Solar Power
Feasibility and Conceptual Design
Naknek Electric Association,
Inc.Wind 0.63 488 7,814$ 50.33 53.45 2 9 115,000$ 103,500$ 11,500$ Feas Full 103,500$ 4,286,973$
10 Northwest Arctic 1146 13018
Kotzebue Community-Scale Energy Storage
System
Kotzebue Electric
Association Storage 0.85 3112 7,264$ 48.54 51.52 2 10 425,000$ 325,000$ 100,000$ Design Full w/ SP 325,000$ 4,611,973$
11 Aleutians 1135 13007
City of Unalaska Wind Power Feasibility and
Final Design
City of Unalaska -
Department of Public
Utilities Wind 0.54 4592 4,997$ 54.33 46.41 1 11 1,271,000$ 1,143,900$ 127,100$ Feas Partial 139,000$ 4,750,973$
TOTAL 17,561,223$ 6,755,873$ 4,750,973$
Note:
orange cells indicate heat project applications
blue cells indicate standard electric project applications
Recommended Projects Project Costs Recommendation
Applications Forwarded for Legislature’s Decision on Funding
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On January 15, 2021 the REFAC voted unanimously in favor of the authority’s recommended applications and assigned ranking, aspresented below in descending order:
REDUCING THE COST OF ENERGY IN
ALASKA
Round XIII –Partial Funding Recommendations
As part of the evaluation process and pursuant to 3 AAC 170.655(b), two application, as indicated below, have been recommended for partial funding. To caveat, if these partial funding recommendations are reversed and full funding recommended, this would raise the total grant request amount for all remaining 11 recommended applications to $6.7 million. At $6.7 million, the current REF fund balance of $6.5 million is insufficient to fund the total grant request amount, yielding a delta of ($219,476). The REFAC did concur with the authority’s findings on these matters of recommended partial funding.
Application #13001 –Partial Funding: AEA is recommending funding for the feasibility and conceptual design portion of the project in the amount of $1,000,000, as indicated by the applicant in their application's budget schedule. Such funding does address the applicant's concern over phase II of their project regarding limited possible and eligible sources of funds for feasibility studies. The applicant is in a position to begin feasibility study work in the project site area owing to th eirsecuring of a special use permit from the Alaska Dept. of Natural Resources' Div. of Parks & Outdoor Recreation. AEA understands there are risks relating to the project regarding FERC permitting requirements and potential risks related to significant project cost overages. Owing to this, AEA finds that it is prudent and appropriate at this time to recommend only funding the feasibility and conceptual design portion of the proposed project.
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Count Energy Region ID
Application
ID Project Name Applicant Technology
Stage 2 Score
(Tech/Econ)
Stage 3
Ranking Score
Regional
Rank
Statewide
Rank
Applicant
Phase(s)
Requested
Applicant
Grant
Requested
AEA
Recommended
Phase(s)
AEA Recommended
Funding Level
Recommended
Funding ($)Delta
6 Bristol Bay 1129 13001 Nuyakuk River Hydroelectric Project (Run of River Project)Nushagak Electric & Telephone Cooperative Hydro 53.58 56.45 1 6 Feas; Design 2,000,000$ Feas Partial 1,000,000$ 1,000,000$
10 Aleutians 1135 13007 City of Unalaska Wind Power Feasibility and Final Design City of Unalaska - Department of Public Utilities Wind 54.33 46.41 1 10 Feas; Design 1,143,900$ Feas Partial 139,000$ 1,004,900$
TOTAL 3,143,900$ 1,139,000$ 2,004,900$
REDUCING THE COST OF ENERGY IN
ALASKA
Round XIII –Partial Funding Recommendations
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Application #13007 –Partial Funding: AEA recommends partial funding for the proposed project. It is recommended the feasibility and conceptual design (CDR) phase, requested at $139,000, be funded prior to funding the final design phase. The integration of the Geothermal plant, expected on-line in 2024, with the proposed wind system, potential ESS, and the existing diesel plant is complex and will likely require some study as part of the initial feasibility phase to gauge the requirements for integration. As the feasibility portion of the requested phases is anticipated to finish in April 2022, thisallows more time for other components of the project to develop and will refine the scope of the proposed wind system . Successful completion of the feasibility CDR will allow for a determination to be made on the selection of the generational capacity of the proposed wind system. At present, the applicant has provided a range of 2 to 5 MW.
REDUCING THE COST OF ENERGY IN
ALASKA
Supplemental materials as listed below have been made available on AEA’s website for reference by interested parties:
•2020 REF Recommendations
•REF Round XIII Status Report
•REF Round XIII Application Summaries Report
•RED Round XIII Economic Evaluations Summaries Report
•Application Documents
•REF Round 13 Cover Letter
•Request for Applications Solicitation
•Standard Application Form
•Heat Application Form
•Best Practices Guides
•Guide provided for each eligible technology type –Biomass, Heat Pump, Heat Recovery, Hydro, Solar, and Wind
•Economic Evaluation Model
•Additional Documents
Online Supplemental Materials
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REDUCING THE COST OF ENERGY IN ALASKA 31
SAFE,
RELIABLE, &
AFFORDABLE
ENERGY
SOLUTIONS
ALASKA ENERGY AUTHORITY
813 West Northern Lights Blvd.
Anchorage, Alaska 99503
Phone: (907) 771-3000
Fax: (907) 771-3044
Toll Free (Alaska Only) 888-300-8534