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HomeMy WebLinkAboutREF Round 16 Status ReportREDUCING THE COST OF ENERGY IN ALASKA Renewable Energy Fund Round 16 Status Report Alaska Energy Authority —Renewable Energy Fund –Round XVI REDUCING THE COST OF ENERGY IN ALASKA SAFE, RELIABLE, & AFFORDABLE ENERGY SOLUTIONS Alaska State LegislatureJanuary 2024 REDUCING THE COST OF ENERGY IN ALASKA 2 SAFE, RELIABLE, & AFFORDABLE ENERGY SOLUTIONS Table of Contents REF Overview Page 3 REF Statutory Guidance Page 4 Round XVI Request for Applications Schedule Page 5 REF Evaluation Process Page 6 REF Funding Limits Page 10 Proposed REF Capitalization for Round 16 (FY2025)Page 11 REF Received Applications Summary Page 12 Non-Recommended Applications Summary Page 14 REFAC Roles Page 18 REFAC Current Members Page 19 Recommended Applications Summary Page 20 Applications Forwarded for Legislature’s Decision on Funding Page 22 Partial Funding Recommendations Page 25 REDUCING THE COST OF ENERGY IN ALASKA Renewable Energy Fund (REF) Overview Established in 2008, the REF is a unique and robust competitive grant program, which provides critical financial assistance for statewide renewable energy projects. The REF’s sunset date provision was repealed with House Bill 62, signed into law by Governor Dunleavy on May 25, 2023. $317 million in REF appropriations by the State. 100+ operational projects, 44 in development, and 18 projects funded for FY24. The 33rd Alaska State Legislature appropriated $17 million for 18 projects recommended by AEA and approved by the REF Advisory Committee. The REF funds projects across all development phases, serving as a catalyst for the continued pursuit of integrating proven and nascent technologies within Alaska’s energy portfolio. 03 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: o Has a population of 10,000 or less, and o does not have economically viable renewable energy resources it can develop. ELIGIBLE APPLICANTS INCLUDE: electric utility holding a certificate of public convenience and necessity (CPCN); independent power producer ; local government; or, or other governmental utility, including a tribal council and housing authority. 04 REDUCING THE COST OF ENERGY IN ALASKA REF Rounds 16 Timeline June 29, 2023 August 29, 2023 January 9, 2024 January 25, 2024 July 1, 2024December 2023 Request for Application Posted AEA’s Evaluation of Applications Complete Application Submission Deadline Meeting with Renewable Energy Fund Advisory Committee (REFAC) If Capital Funds Are Appropriated by Legislature, and approved by the Governor, Issuance of Grant Agreements Can Begin AEA Provides Recommendations Approved by REFAC to Legislature 29 REDUCING THE COST OF ENERGY IN ALASKA 5 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 1 is an evaluation of the applicant, project eligibility and, completeness of the application, 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 2) of the evaluation. •The application must provide a detailed description of the phase(s) of project proposed. Applications that fail to meet the requirements of Stage 1 are rejected by the Authority. Each applicant whose application is rejected is notified of the Authority’s decision. 6 STAGE 1 CRITERIA 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 2 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 economists. The following items are evaluated as part of the Stage 2evaluation, 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; and, •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. Applications that score below 40 points in this stage are automatically rejected by the Authority, however, those projects scoring above 40 may 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. 7 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 ALASKA REF Evaluation Process: Stage 3 Project Ranking Stage 3 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. 8 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 4 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 of advice from the Renewable Energy Fund Advisory Committee (REFAC). As statutorily required per AS 42.45.045 and set forth in 3 AAC 107.660, the authority is to solicit advice from the REFAC concerning making a final list / ranking of eligible projects. 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] 9 Cumulative through Round 15 Total Round 1-15 Funds Cost of Power Allocation Population 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 $18,383,998 6%13.50%$27,352,549 ($4,707,724)67%1%$3,225,814 $26,416,303 Bering Straits $23,486,724 8%16.18%$32,769,215 ($7,102,116)72%1%$3,938,859 $26,416,303 Bristol Bay $15,866,614 5%15.99%$32,386,656 $326,714 49%1%$2,763,603 $26,416,303 Copper River/Chugach $28,163,273 10%10.23%$20,723,627 ($17,801,460)136%1%$3,198,033 $26,416,303 Kodiak $16,659,519 6%6.96%$14,095,649 ($9,611,694)118%2%$5,116,531 $26,416,303 Lower Yukon-Kuskokwim $39,888,116 14%21.01%$42,550,198 ($18,613,017)94%4%$10,428,334 $26,416,303 North Slope $2,069,151 1%2.56%$5,191,136 $526,417 40%1%$3,913,896 $26,416,303 Northwest Arctic $29,166,133 10%16.94%$34,315,088 ($12,008,589)85%1%$3,033,763 $26,416,303 Railbelt $31,253,205 11%5.72%$11,594,529 ($25,455,941)270%77%$224,530,668 $26,416,303 Southeast $65,672,877 23%8.23%$16,669,020 ($57,338,367)394%10%$28,490,396 $26,416,303 Yukon-Koyukuk/Upper Tanana $18,933,832 7%26.13%$52,931,665 $7,532,000 36%1%$1,939,434 $26,416,303 Statewide $1,035,888 0%0.00% TOTAL $290,579,331 100%$290,579,331 100%$290,579,331 $290,579,331 REDUCING THE COST OF ENERGY IN ALASKA REF Funding Limits REF Round XVI Grant Funding Limits Phase Low Energy Cost Areas*High Energy Cost Areas** Total Project Grant Limit $2 Million $4 Million Phase I:Reconnaissance Phase II:Feasibility and Conceptual Design The per project total of Phase I and II is limited to 20% of anticipated construction cost (Phase IV), not to exceed $2 Million. Phase III: Final Design and Permitting 20% of anticipated construction cost (Phase IV), and counting against the total construction grant limit below. Phase IV:Construction and Commissioning $2 Million per project, including final design and permitting (Phase III) costs, above. $4 Million per project, including final design and permitting (Phase III) costs, above. Exceptions Biofuel projects Biofuel projects where the applicant does not intend to generate electricity or heat for sale to the public are limited to reconnaissance and feasibility phases only at the limits expressed above. Biofuel is a solid, liquid or gaseous fuel produced from biomass, excluding fossil fuels. Geothermal projects The per-project total of Phase I and II for geothermal projects is limited to 20% of anticipated construction costs (Phase IV), not to exceed $2 million /$4 million (low/high cost areas). Any amount above the usual $2 million cap spent on these two phases combined shall reduce the total Phase III and IV grant limit by the same amount, thereby keeping the same total grant dollar cap as all other projects. This exception recognizes the typically increased cost of the feasibility stage due to test well drilling. REF Round XVI funding limits are governed by the requested phase(s) in the application and the technology type applied. Low vs High Cost Energy Areas: *Low Energy Cost Areas are defined as communities connected to the Railbelt electrical grid or 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. 10 REDUCING THE COST OF ENERGY IN ALASKA Proposed REF Capitalization for FY2025 / Round XVI The State of Alaska FY2025 proposed capital budget allocates $5 million for REF Round 16 grant funding of recommended projects. The current list of 24 recommended applications yields a total grant request of $32,006,012. With the proposed REF budget of $5 million, there would be insufficient funding to cover the current Round 16 recommendations. Additional funding of $27.06 million would need to be allocated to fund all of the current Round 16 recommendations or some of the Round 16 recommendations will not be funded. The table to the right indicates historical REF program funding from the inception of the REF program to the FY2024 appropriation. $17M was approved in the FY2024 capital budget for REF Round 15, the largest REF capitalization since FY2014. 11 REDUCING THE COST OF ENERGY IN ALASKA AEA received 29 applications with a total grant request of $39.5 million. One application was submitted past the deadline and deemed ineligible, reducing the total grant request to $37.8 million for the remaining 28 applications. Round XVI –Received Applications Summary 12 Applications by Energy Region No.of Applications REF Funds Requested Bering Straits 1 $ 4,000,000 Bristol Bay 5 $ 7,166,471 Lower Yukon-Kuskokwim 6 $ 4,609,666 Northwest Arctic 1 $ 4,000,000 Railbelt 9 $ 9,147,514 Southeast 4 $ 5,661,724 Yukon-Koyukuk Tanana 2 $ 3,231,113 Total 28 $37,816,488 Applications by Technology No.of Applications REF Funds Requested Biomass 3 $2,607,514 Hydro 8 $ 8,505,236 Natural Gas 1 $ 150,000 Solar 9 $ 17,166,182 Storage 4 $ 5,698,827 Wind 3 $ 3,688,729 Total 28 $37,816,488 $0 $2,000,000 $4,000,000 $6,000,000 $8,000,000 $10,000,000 $12,000,000 $14,000,000 $16,000,000 $18,000,000 $20,000,000 Biomass Hydro Natural Gas Solar Storage Wind Requested Funding By Technology $0 $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 $7,000,000 $8,000,000 $9,000,000 $10,000,000 Funding By Energy Region REDUCING THE COST OF ENERGY IN ALASKA Round XVI –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 request funding: (1)Reconnaissance (2)Feasibility and Conceptual Design (3)Final Design and Permitting (4)Construction Several applications received in Round 16 requested funding for more than one phase. 13 $0 $2,000,000 $4,000,000 $6,000,000 $8,000,000 $10,000,000 $12,000,000 $14,000,000 $16,000,000 $18,000,000 $20,000,000 Requested Funding by Project Phase Applications by Project Phase No.of Applications REF Funds Requested Construction 13 $ 18,505,570 Design 1 $ 883,012 Design, Construction 8 $ 14,554,156 Feasibility 3 $ 3,430,500 Reconnaissance 1 $ 121,250 Reconnaissance, Design 1 $ 52,500 Reconnaissance, Feasibility 1 $ 269,500 Total 28 $37,816,488 REDUCING THE COST OF ENERGY IN ALASKA Stages 1 and 2 Review: Non-Recommended Applications Summary 14 In AEA’s Stage 1 evaluation, as per 3 AAC 107.635, it was determined that one application was ineligible and was rejected. This application was submitted after the published deadline. The applicant was notified of the rejection and did not appeal. In AEA’s Stage 2 evaluation of technical and economic feasibility, as per 3 AAC 107.645, four applications received scores below 40 points and were not recommended by the Authority. 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 were issued to those applicants. With an initial receipt of 29 applications and five applications rejected during Stages 1 and 2, there are 24 remaining applications that are recommended in REF Round 16. In terms of grant funding requests, $1.7 million was rejected in Stage 1 and a total of $2 million rejected in Stage 2. The total grant funds request is further reduced by $3.8 million owing to five of the remaining 24 applications receiving recommendations for partial funding due to various reasons discussed later in the presentation, yielding a total of $32 million in grant funds requested. Partial funding recommendations, which are discussed further along in the presentation, were made in full consideration of project phases applied for, application scoring, project scope eligibility, and household cost of energy. With the current proposed REF fund allocation of $5 million for FY2025, there are insufficient REF funds to cover one-hundred percent of the applications recommended in Round 16. REDUCING THE COST OF ENERGY IN ALASKA Stage 1 Non-Recommended Applications 15 Below is the 1 application rejected during the Stage 1 evaluation: Application Number Applicant Application Name Technology Phase Community Funds Requested Election District Rejection Reason 16029 Chugach Electric Association Godwin Creek Hydroelectric Project Hydro Feasibility and Conceptual Design Railbelt $1,729,000 various Application was submittedafter the published deadline. REDUCING THE COST OF ENERGY IN ALASKA Stage 2 Non-Recommended Applications 16 Below are the 4 applications that were rejected during the Stage 2 evaluation: Application Number Applicant Application Name Technology Phase Community Funds Requested Election District Rejection Reason 16002 City of North Pole, Alaska North Pole CHP Conceptual Design Project Natural Gas Feasibility North Pole $150,000 33-Q Insufficient information to complete the technical and financial evaluations. 16011 Mark K. Johnson dba Beric Alaska Energy Beric Alaska Energy Solar One Solar, Storage Recon, Design Railbelt $52,500 various Insufficient information to complete the technical and financial evaluations. 16017 Native Village of Port Heiden Port Heiden Turbine, Battery, ETS Construction Wind, Other Construction Port Heiden $949,750 37-S Application did not meet the minimum score of 40 in Stage 2. 16027 City of Tenakee Springs dba Tenakee Springs Electric Department Indian River Construction Project Matching Funds Hydro Construction Tenakee Springs $890,000 2-A Application did not meet the minimum score of 40 in Stage 2. REDUCING THE COST OF ENERGY IN ALASKA Stage 2 –Non-Recommended Application Reasoning 17 App. #Project Funds Requested Partial Funding Reasoning 16002 North Pole CHP Conceptual Design Project $150,000 Project did not achieve the required 40 points, as per Section 4 of the REF Round 16 RFA to advance onto stage 3. AEA staff identified several issues with the application including: •Application was for a natural gas project but did not include support for why renewable resources were not viable; •Insufficient information was included in the application to complete economic and technical evaluations; •Estimated total cost of final project is vague, between $40 and $80 million; •No commentary provided as to how applicant would go about securing funding for future phases; and, •The site is known to be contaminated.The application states that the site will be cleaned per ADEC requirements but specificrequirements are not stated. 16011 Beric Alaska Energy Solar One $52,500 Project did not achieve the required 40 points, as per Section 4 of the REF Round 16 RFA to advance onto stage 3. AEA staff identified several issues with the application including: •Insufficient information was included in the application to complete economic and technical evaluations; •No information provided regarding the qualifications and experience of contractors; •No discussion on the project benefit or fuel displacement; •Scope of project is unclear; and, •No commentary provided as to how applicant would go about securing funding for future phases. 16017 Port Heiden Turbine, Battery, ETS Construction $949,750 Project did not achieve the required 40 points, as per Section 4 of the REF Round 16 RFA to advance onto stage 3. AEA staff identified several issues with the application including: •Project has poor economics resulting in a benefit/cost ratio below 1; •Requested phase is for construction but the applicant has not secured funding to complete needed upgrades to its distribution system; and, •The distribution upgrades should be completed before adding renewables to the system. 16027 Indian River Construction Project Matching Funds $890,000 Project did not achieve the required 40 points, as per Section 4 of the REF Round 16 RFA to advance onto stage 3. AEA staff identified several issues with the application including: •Project has poor economics resulting in a benefit/cost ratio below 1; •Requested phase is for construction but the applicant has not secured funding to complete the phase and grants applied for and pending decisions would not cover the full cost; and, •Required FEMA repairs should be completed prior to moving forward with the rest of the construction. REDUCING THE COST OF ENERGY IN ALASKA REFAC Roles 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 18 REDUCING THE COST OF ENERGY IN ALASKA REFAC Advisory Committee 19 NAME TITLE SECTOR APPOINTED BY Clay Koplin Chief Executive Officer, Cordova Electric Cooperative Small rural electric utility Governor Rose,Chris Founder / Executive Director, RenewableEnergy Alaska Project (REAP)Business/organizationinvolved in renewable energy Governor Iliodor Philemonof III Government Relations Administrator, Calista Corporation Representative of an Alaska Native Organization Governor Amberg, Alicia Executive Director, Associated General Contractors of Alaska Denali Commission Governor Janorschke,Bradley General Manager,Homer Electric Association Large urban electric utility Governor Stedman, Bert Senator Senate Member 2 Senate President Wilson, David Senator Senate Member 1 Senate President Carpenter, Ben Representative House Member 2 Speaker of the House Cronk, Mike Representative House Member 1 Speaker of the House REDUCING THE COST OF ENERGY IN ALASKA There are 24 recommended applications, totaling a request of $32 million. Round XVI –Recommended Applications Summary 20 Applications by Energy Region No.of Applications REF Funds Requested Bering Straits 1 $ 4,000,000 Bristol Bay 4 $ 6,144,569 Lower Yukon-Kuskokwim 6 $ 3,226,092 Northwest Arctic 1 $ 3,675,000 Railbelt 7 $ 6,957,514 Southeast 3 $ 4,771,724 Yukon-Koyukuk Tanana 2 $ 3,231,113 Total 24 $32,006,012 Applications by Technology No.of Applications REF Funds Requested Biomass 3 $2,607,514 Hydro 7 $ 7,615,236 Solar 8 $ 13,670,456 Storage 4 $ 5,373,827 Wind 2 $ 2,738,979 Total 24 $32,006,012 $0 $2,000,000 $4,000,000 $6,000,000 $8,000,000 $10,000,000 $12,000,000 $14,000,000 $16,000,000 Biomass Hydro Solar Storage Wind Recommend Funding by Technology $0 $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 $7,000,000 $8,000,000 Recommend Funding by Energy Region REDUCING THE COST OF ENERGY IN ALASKA Round XVI Geographical Distribution of Recommended Applications 21 REDUCING THE COST OF ENERGY IN ALASKA Applications Forwarded to the Legislature for a Decision on Funding 22 *If appropriated by the Legislature and approved the Governor, this funding would become effective July 1, 2024 for inclusion in the Fiscal Year 2025 budget. Orange line indicates the limit of recommended projects able to be funded with a $5 million appropriation; funding additional projects will require an increased appropriation to the total recommended funding amount. The Kotzebue Community Scale Energy Storage and Inertia Project would only be funded up to $991,887. Recommended Projects Recommendation App. #Applicant Project Title Phase Energy Region Election District Technology Community Grant Funds Requested Matching Funds Stage 3 Score Benefit / Cost Ratio HEC RegionRank State Rank Funding Level Funding Amount 16028 Tanana Chiefs Conference Ruby Community Solar PV and Battery Storage Design, Construction Yukon-Koyukuk/Upper Tanana 36-R Solar, Storage Ruby $2,008,113 $874,906 90 1.23 $12,913 1 1 Full w/Special Provision $2,008,113 16005 Solstice Energy LLC Kenai Peninsula Solar Farm Design, Construction Railbelt various Solar HEA service area $2,000,000 $48,027,664 88 1.77 $7,120 1 2 Full $2,000,000 16022 Kotzebue Electric Association Kotzebue Community Scale Energy Storage and Inertia Construction Northwest Arctic 40-T Storage Kotzebue $4,000,000 $3,500,000 85 1.73 $7,920 1 3 Partial $3,675,000 16015 Alaska Electric & Energy Coop AEEC / KPB CPL Landfill Gas CHP Project Construction Railbelt 6-C Biomass Homer $1,115,014 $875,000 84 1.61 $7,120 2 4 Full $1,115,014 16013 Igiugig Village Council Igiugig Tribal Utility Solar PV Design, Construction Bristol Bay 37-S Solar Igiugig $1,723,709 $20,933 77 1.03 $13,627 1 5 Full $1,723,709 16008 City of Pelican, Utilities Pelican Hydro Relicensing Project, Restoration, Repair Design, Construction Southeast 2-A Hydro Pelican $650,474 $50,000 76 1.63 $6,374 1 6 Full $650,474 16020 Naknek Electric Association Naknek Solar PV on Cape Suwarof Construction Bristol Bay 37-S Solar Naknek $3,210,000 $900,000 74 0.57 $9,551 2 7 Partial $3,137,848 16014 Goat Lake Hydro, Inc.Goat Lake Storage Expansion Study Reconnaissance Southeast 3-B Hydro Skagway $121,250 $52,250 71 0 $6,371 2 8 Full $121,250 Please see related summary report for details concerning the evaluation and description of the individual applications. REDUCING THE COST OF ENERGY IN ALASKA 23 Recommended Projects Recommendation App. #Applicant Project Title Phase Energy Region Election District Technology Community Grant Funds Requested Matching Funds Stage 3 Score Benefit / Cost Ratio HEC RegionRank State Rank Funding Level Funding Amount 16003 Nuvista Light &Electric Coop Nuvista Kwethluk Wind and Battery Project Completion Construction Lower Yukon-Kuskokwim 38-S Wind, Transmission, Storage Kwethluk $738,979 $0 71 0.67 $7,869 1 9 Full w/Special Provision $738,979 16007 Alaska Village Electric Cooperative Quinhagak Battery Energy Storage System Project Construction Lower Yukon-Kuskokwim 38-S Storage Quinhagak $443,956 $707,625 70 0.88 $6,962 2 10 Full $443,956 16018 City of Nenana Nenana Biomass District Heat System, Final Phase Construction Yukon-Koyukuk/Upper Tanana 36-R Biomass Nenana $1,223,000 $168,322 69 1.14 $6,864 2 11 Full $1,223,000 16025 Puvurnaq Power Kongiganak 100 kW Solar Energy Design, Construction Lower Yukon-Kuskokwim 38-S Solar Kongiganak $728,603 $674,330 69 0.6 $9,427 3 12 Partial $720,453 16009 Alaska Renewables Railbelt Wind Diversification Alaska Renewables Feasibility Railbelt various Wind, Transmission, Storage Railbelt $2,000,000 $2,187,000 69 1.22 $5,458 4 13 Full $2,000,000 16001 City of Homer Homer Energy Recovery Project Construction Railbelt 6-C Hydro Homer $280,000 $90,000 68 0.01 $7,120 5 14 Full $280,000 16026 Atmautluak Tribal Utilities Atmautluak ETS Installation, Integration and Commissioning Construction Lower Yukon-Kuskokwim 38-S Wind, Other Atmautluak $286,227 $188,160 68 0.29 $8,538 4 15 Full $286,227 16021 Southeast Alaska Power Agency Southeast Alaska Grid Resiliency (SEAGR)Design, Construction Southeast 1-A, 2A Hydro Ketchikan, Petersburg, Wrangell $4,000,000 $18,592,510 68 0 $6,730 3 16 Full $4,000,000 Please see related summary report for details concerning the evaluation and description of the individual applications. Applications Forwarded to the Legislature for a Decision on Funding REDUCING THE COST OF ENERGY IN ALASKA 24 ** Note: On Jan. 9, 2024, the REFAC voted to change the rank for application #16024 from a rank of 11 to a rank of 23 due to potential technical risks associated with fuel supply commitments. Recommended Projects Recommendation App. #Applicant Project Title Phase Energy Region Election District Technology Community Grant Funds Requested Matching Funds Stage 3 Score Benefit / Cost Ratio HEC RegionRank State Rank Funding Level Funding Amount 16006 Alaska Village Electric Cooperative, Chevak Battery Energy Storage System Project Construction Lower Yukon-Kuskokwim 38-S Storage Chevak $968,644 $0 66 0.62 $6,902 5 17 Full $968,644 16023 Pedro Bay Village Council Knutson Creek Hydro Project Construction Construction Bristol Bay 37-S Hydro Pedro Bay $400,000 $7,200,000 65 0.08 $9,390 3 18 Full w/Special Provision $400,000 16016 Akiachak, Ltd Akiachak Native Community 200 kW Solar Energy Project Design, Construction Lower Yukon-Kuskokwim 38-S Solar Akiachak $1,443,257 $2,265,809 64 0.33 $8,870 6 19 Partial w/Special Provision $67,833 16019 Nome Joint Utility System NJUS Solar Nome Banner Ridge Solar Farm Construction Bering Straits 39-T Solar Nome $4,000,000 $50,000 60 0.57 $9,139 1 20 Full $4,000,000 16012 Matanuska Electric Association Hunter Creek Hydroelectric Feasibility Study Project Feasibility Railbelt various Hydro, Transmission, Storage MEA service area $1,280,500 $384,500 58 0.67 $5,920 6 21 Full $1,280,500 16010 City of Chignik Chignik Hydroelectric Power System Design Bristol Bay 37-S Hydro Chignik $883,012 $44,346 57 1.06 $7,701 4 22 Full $883,012 **16024 Golden Valley Electric Healy Unit 2 Coal to Biomass Fuel Conversion Recon, Feasibility Railbelt various Biomass GVEA service area $269,500 $58,500 70 0 $8,420 3 23 Full $269,500 16004 Utopian Power LLC Sterling Solar Project Design, Construction Railbelt 8-D Solar Sterling $2,000,000 $2,000,000 37 0.7 $7,120 7 24 Partial w/Special Provision $12,500 Applications Forwarded to the Legislature for a Decision on Funding REDUCING THE COST OF ENERGY IN ALASKA Round XVI –Partial Funding Reasoning 25 App. #Project RequestedFunding Recommended Funding Partial Funding Reasoning 16022 Kotzebue Community Scale Energy Storage and Inertia $4,000,000 $3,675,000 Maximum award amount per project is currently $4 million for high energy cost areas as per section 1.15 of the Round 16 RFA. InRound 13, KEA was awarded a REF grant (#7013018) in the amount of $325,000 for the study and design of the now proposed BESSsystem. As such, the requested amount of $4 million is reduced correspondingly by $325,000 to provide a revised funding recommendation of $3,675,000. 16020 Naknek Solar PV on Cape Suwarof $3,210,000 $3,137,848 Partial Funding adjustment is owing to exclusion of funding for final design cost of $71,152 which is currently ongoing and already funded. Only costs incurred after July 1, 2024, and which are within the scope of the grant agreement are eligible for funding under the REF program.Revised funding recommendation: $3,137,848 16025 Kongiganak 100 kW Solar Energy $728,603 $720,453 Costs associated with the applicant's administration of the REF grant are not eligible uses of REF funds. The line item for "AEA Grant and NTP" for $8,150 is therefore removed from the funding recommendation, yielding a revised funding recommendation of $720,453. 16016 Akiachak Native Community 200 kW Solar Energy $1,443,257 $67,833 Funding for final design only in Round 16 is recommended prior to recommendation for funding the construction phase,which will better inform the additional solar capacity integration.AEA requested a copy of the USDA award, solar resource study, and updated HOMER model from the applicant. Applicant provided the USDA grant agreement, but neither the solar resource study, or the updated HOMER model. The applicant may re-apply in a future REF round for the construction phase once the final design is completed.In addition, funding for grant administration is not allowable under the REF program. The $8,150 for the line item entitled "AEA award and NTP" under the final design budget is removed from the funding recommendation, for a recommendation of $67,833 in Round 16. 16004 Sterling Solar Project $2,000,000 $12,500 Funding for final design and permitting recommended prior to recommendation for funding the construction phase. Many aspects ofthe project at this juncture are unclear and need to be revised. The applicant may re-apply in a future REF round for the construction phase once the final design is completed. AEA staff identified several issues with the application including:lack of detail on proposed system design, no letters of support included,not specific in stating required permits,lack of discussion of model results and no technical analysis of proposed system was provided. As part of the evaluation process and pursuant to 3 AAC 170.655(b), 5 applications, as provided below, have been recommended for partial funding. Partial funding recommendations were made in full consideration of project phases applied for, application scoring, project scope eligibility, and household cost of energy. REDUCING THE COST OF ENERGY IN ALASKA 26 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