Aea-09-004 Renewable Energy Grant Application Second Round, November 10, 2008 Resource Monitoring, Final Design, Permitting, and Construction project



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Renewable Energy Fund

Grant Application







AEA-09-004 Renewable Energy Grant Application
Second Round, November 10, 2008
Resource Monitoring,

Final Design, Permitting, and Construction


PROJECT: Tok Wind Project
LOCATION: Seven Mile Ridge, Alaska
OWNER: Village Wind Power LLC, a wholly-owned subsidiary of Alaska Wind Power LLC, a company owned by Alaska Power & Telephone Company and LAPP Resources, Inc.


Application Forms and Instructions

The following forms and instructions are provided for preparing your application for a Renewable Energy Fund Grant. An electronic version of the Request for Applications (RFA) and the forms are available online at http://www.akenergyauthority.org/RE_Fund.html


The following application forms are required to be submitted for a grant recommendation:


Grant Application Form

GrantApp.doc

Application form in MS Word that includes an outline of information required to submit a complete application. Applicants should use the form to assure all information is provided and attach additional information as required.

Application Cost Worksheet

Costworksheet.doc

Summary of Cost information that should be addressed by applicants in preparing their application.

Grant Budget Form

GrantBudget.xls

A detailed grant budget that includes a breakdown of costs by task and a summary of funds available and requested to complete the work for which funds are being requested.

Grant Budget Form Instructions

GrantBudgetInstr.pdf

Instructions for completing the above grant budget form.




  • If you are applying for grants for more than one project, provide separate application forms for each project.

  • Multiple phases for the same project may be submitted as one application.

  • If you are applying for grant funding for more than one phase of a project, provide a plan and grant budget for completion of each phase.

  • If some work has already been completed on your project and you are requesting funding for an advanced phase, submit information sufficient to demonstrate that the preceding phases are satisfied and funding for an advanced phase is warranted.

  • If you have additional information or reports you would like the Authority to consider in reviewing your application, either provide an electronic version of the document with your submission or reference a web link where it can be downloaded or reviewed.


REMINDER:

  • Alaska Energy Authority is subject to the Public Records Act, AS 40.25 and materials submitted to the Authority may be subject to disclosure requirements under the act if no statutory exemptions apply.

  • All applications received will be posted on the Authority web site after final recommendations are made to the legislature.



SECTION 1 – APPLICANT INFORMATION

Name (Name of utility, IPP, or government entity submitting proposal)

Village Wind Power LLC


Type of Entity:

Private Wind Energy Developer, Independent Power Producer




Mailing Address

Village Wind Power LLC

10600 Prospect Drive

Anchorage, AK 99507-6494




Physical Address

Village Wind Power LLC

10600 Prospect Drive

Anchorage, AK 99507-6494



Telephone

1 907 248-7188



Fax

1 907 248-7278



Email

lapres@gci.net


1.1 APPLICANT POINT OF CONTACT

Name

David W. Lappi



Title

Member, Village Wind Power LLC




Mailing Address

10600 Prospect Drive

Anchorage, AK 99507-6494


Telephone

1 907 248-7188



Fax

1 907 248-7278



Email

lapres@gci.net


1.2 APPLICANT MINIMUM REQUIREMENTS

Please check as appropriate. If you do not to meet the minimum applicant requirements, your application will be rejected.

1.2.1 As an Applicant, we are: (put an X in the appropriate box)




An electric utility holding a certificate of public convenience and necessity under AS 42.05, or

X

An independent power producer, or




A local government, or




A governmental entity (which includes tribal councils and housing authorities);

Yes


1.2.2. Attached to this application is formal approval and endorsement for its project by its board of directors, executive management, or other governing authority. If a collaborative grouping, a formal approval from each participant’s governing authority is necessary. (Indicate Yes or No in the box )

Yes


1.2.3. As an applicant, we have administrative and financial management systems and follow procurement standards that comply with the standards set forth in the grant agreement.

Yes


1.2.4. If awarded the grant, we can comply with all terms and conditions of the attached grant form. (Any exceptions should be clearly noted and submitted with the application.)




SECTION 2 – PROJECT SUMMARY

Provide a brief 1-2 page overview of your project.

    1. PROJECT TYPE

Describe the type of project you are proposing, (Reconnaissance; Resource Assessment/ Feasibility Analysis/Conceptual Design; Final Design and Permitting; and/or Construction) as well as the kind of renewable energy you intend to use. Refer to Section 1.5 of RFA.

Project sponsor Village Wind Power LLC proposes the Resource Monitoring, Final Design and Permitting, and Construction (and ongoing operation) of the 2 MW Tok wind power plant on State property to harness the significant wind energy potential within the Seven Mile Ridge area southwest of Tok.




    1. PROJECT DESCRIPTION

Provide a one paragraph description of your project. At a minimum include the project location, communities to be served, and who will be involved in the grant project.

The Tok Wind Project is located approximately 12 miles south of Tok near the 5,000 foot level of Seven Mile Ridge and will contribute 2 MW of clean, renewable wind power to the Alaska Power Company Tok distribution system.


The communities served will include all communities within the Alaska Power Company (APC, an Alaska Power & Telephone Company public utility subsidiary) service area including Tok (2007 population 1,353), Tanacross (173), Tetlin (165), and Dot Lake (15). The total population of the served area is 1,706.
The project will include construction of a 12 mile long transmission line, and a five mile-long construction access road across state-owned land from the old Eagle Trail west to the proposed wind power generation facility. The power generation facility will include approximately two MW of wind turbines, the size and type subject to final design. These turbines will be founded in shallow bedrock prevalent on the ridge crest. Power collection cables and control wiring will lead from each turbine to the transformer substation. Overhead transmission lines (distribution voltage) from the transformer substation will follow the access road and Eagle Trail approximately 12 miles to the existing APC distribution line on the Tok Cutoff.
The grant participants are Village Wind Power LLC who have three Alaska wind projects under development (Slana, Tok, and Bethel). There will be a number of contractors involved in completing the project. In addition to our own in-house efforts, other experienced contractors will be chosen to carry out selected components of the project. These components may include:


  • State Land Use Permit for Wind Resource Assessment

  • State easement for the transmission line and road

  • State land lease acquisition for the wind farm site

  • Topographic mapping for the wind farm, transmission line, and road

  • Wetlands mapping for the wind farm, transmission line, and road

  • Archeological review for the wind farm, transmission line, and road

  • Detailed design for the wind farm, transmission line, and road

  • Power Purchase Agreement with APC

  • Access road construction

  • Transmission line construction

  • Wind farm construction

  • Electrical hookup

  • Commissioning and testing




    1. PROJECT BUDGET OVERVIEW

Briefly discuss the amount of funds needed, the anticipated sources of funds, and the nature and source of other contributions to the project. Include a project cost summary that includes an estimated total cost through construction.

This grant application is for $8.1 million which will fund the following items:


Met Tower Permits $0.03 million

Wind Resource Assessment 0.10

Engineering Studies 0.06

Environmental Studies 0.04

Construction Permitting 0.07

Road Construction 1.00 (5 mile pioneer road)

Foundations for Turbines 2.00 (20 x $100k each)

Chopper for Turbine Construction 0.30 (charter and mob/demob)

Turbines, Towers & Commissioning 3.00 (2 MW at $1.5 mill/MW)

Transmission to & along Tok Cutoff 0.70 (12 miles X $60k per mile)

Transformer Station 0.30

Underground Power Collection 0.30

Hookup 0.20

Total $8.10 million



The above estimated total cost to develop and construct the 2 MW Tok Wind Project is $8.10 million (subject to final design). The project sponsors will directly finance any remaining funds needed to cover any additional project cost. Applying for available public grant financing will allow the project to proceed rapidly to quickly benefit power consumers in the Tok region.


    1. PROJECT BENEFIT

Briefly discuss the financial benefits that will result from this project, including an estimate of economic benefits(such as reduced fuel costs) and a description of other benefits to the Alaskan public.


Final Project Design
This grant will speed the confirmation of the wind resource and completion of final environmental and design studies, land lease, and ROW acquisition. The State’s land lease procedures put the project participants in the awkward position of spending significant funds on many of these tasks before the State makes its final decision on a land lease for the project. We intend to vigorously pursue the land lease and ROW acquisition. These grant funds will speed the final design process so that construction and commissioning can be completed in 2010. If studies and permitting take longer to complete than we have projected, the wind farm can be completed and commissioned during the summer of 2011.
Transmission Line and Construction Access
This grant will fund the construction of a 12-mile–long transmission line adjacent to the Tok Cutoff from the end of the Tok electric grid and a parallel five-mile-long construction access road across state land from the Tok Cutoff to the proposed wind power generation facility. When a transmission line linking the Mentasta and Tok is constructed, a portion of this transmission line will serve as a vital link in the connection.
The Tok Wind Project Generally:
APC is currently producing all of their power from diesel fuel. They have proposed building a small run-of-the-river hydro plant that will serve their needs during most summer months, but during the winter, their loads will require continued reliance on diesel fuel. The Tok Wind Project will likely displace much of this winter diesel fuel use reducing power costs in Tok.
With dynamic VAR support associated with the wind farm, APC’s grid could be strengthened by regulating and stabilizing voltage levels. Our generation will provide an additional source of local power for consumers in Tok region.
All APC’s consumers could benefit from this project if oil prices rise, since our power price will be largely fixed and not fluctuate with Alaska’s oil and gas prices. The project sponsors intend to sell Tok renewable wind power to APC under a long-term contract, reducing their consumers’ uncertainty as fossil fuel prices fluctuate.
Air quality in downtown Tok will also improve as we will be displacing hydrocarbon combustion with clean renewable energy when the ridgetop has windy days. This will also reduce the significant exposure APC’s customers have to carbon tax or CO2 cap and trade proposals likely to pass in the near future. Some of the proposals Congress has considered recently could add up to two cents per kWh to the price of fossil fueled electricity ($0.25 per gallon of diesel burned. Wind-generated electricity could save consumers this money through long-term electricity supply contracts.
Development of the wind resource will benefit not just Alaska, but the entire nation. Hydrocarbons that Alaskans do not use can be exported, reducing our reliance on oil imported from countries in less secure parts of the world, and reducing the outflow of wealth from our country.
Alaska’s consultants and contractors will benefit from wind farm construction activities, and the ongoing operation of the wind farm will generate several well-paid full-time employment opportunities for local residents.
Wind farm tourism opportunities will also exist, and we expect the wind farm to attract visitors since the pioneer road will provide one of the only access points to alpine environments in the area. Visitors will still be able to use the land within the wind farm for other uses since the turbine foundations will only occupy a small area.


    1. PROJECT COST AND BENEFIT SUMARY

Include a summary of your project’s total costs and benefits below.

2.5.1 Total Project Cost

(Including estimates through construction.)

$8.10 million

2.5.2 Grant Funds Requested in this application.

$8.10 million

2.5.3 Other Funds to be provided (Project match)

As required to complete.

2.5.4 Total Grant Costs (sum of 2.5.2 and 2.5.3)

$8.10 million

2.5.5 Estimated Benefit (Savings)

$14.12 million

2.5.6 Public Benefit (If you can calculate the benefit in terms of dollars please provide that number here and explain how you calculated that number in your application.)

$ 1.05 million

over 20 years, plus royalties (see below)

Estimated Benefit (Savings): Avoided project cost of borrowing $8.10 million over 20 years at 6% = $14.12 million.


Public Benefit No 1: Our power purchase agreement is not yet negotiated with APC, however entering into a long-term contract to sell power at a fixed price will allow the utility to hedge their fuel price risk. If we save consumers just one cent per kWh over the price of generating electricity using diesel:
2 MW Wind Farm X 30 percent Capacity Factor X 8,760 hours per year =
about 5.256 million kW hours per year, or more than
$52,000 per year in savings, or more than $1.05 million over 20 years, plus:
Public Benefit No 2: The State of Alaska will receive royalties on the wind generation at rates still to be negotiated in the land lease.
Public Benefit No 3: Air quality in the region of APC’s current generation facilities (downtown Tok) will improve (including a reduction in winter ice fog) proportional to the amount of fossil fuel combustion that we displace. The dollar value of reduced health care costs is hard to calculate, but it will be a real benefit.
Public Benefit No. 4: A portion of the money that used to leave the Tok area (and Alaska) each year to buy diesel fuel will now circulate within the local community and Alaska generally, strengthening the local economy. If we consider the “multiplier effect” this benefit could be significant.


SECTION 3 – PROJECT MANAGEMENT PLAN

Describe who will be responsible for managing the project and provide a plan for successfully completing the project within the scope, schedule and budget proposed in the application.

3.1 Project Manager

Tell us who will be managing the project for the Grantee and include a resume and references for the manager(s). If the applicant does not have a project manager indicate how you intend to solicit project management Support. If the applicant expects project management assistance from AEA or another government entity, state that in this section.


Village Wind Power LLC will be the lead manager of the project, assisted as needed by Alaska Wind Power LLC’s Alaska experience. The project team also includes the parent companies of the project proponents above; Alaska Power & Telephone Company, and Lapp Resources, Inc.

 

Alaska Wind Power LLC is managed by its members, Alaska Power & Telephone Company (AP&T), a certificated Alaska utility specializing in renewable energy (mainly hydropower), and LAPP Resources, Inc. (LRI), an Alaska-owned private resource development company. Both AP&T and LRI are employee-owned. AP&T’s CEO is Mr. Bob Grimm and LRI’s CEO is Mr. David Lappi. Both have significant project management experience.


AP&T’s web site (see http://www.aptalaska.com/index.php) describes the company as follows:
Recognized as one of the most progressive utilities in Alaska, the keys to AP&T's continued success lay primarily in its willingness to promote and develop long-term reliable energy and communication solutions while capitalizing on the innovation and technical expertise of its skilled and dedicated employees.
AP&T currently provides service to communities located above the Arctic Circle, deep in the Wrangell Mountains, and throughout the islands of Southeast Alaska. We travel by boat, floatplane, snow machine, riverboat, helicopter, and all terrain vehicles.
We maintain systems on windswept mountaintops and storm-battered islands. Our power and telecommunications lines cross rainforest, taiga, and tundra. We operate facilities in places that are among the wettest, driest, windiest, coldest, and most remote regions on earth. We live and work in Alaska. [The low temperature in Tok last winter was -72.5° F, and the lights stayed on.]
Alaska Power & Telephone Company proudly marks 2007 as its 50th year of growth, innovation, and leadership in the utility industry. AP&T serves over 30 communities stretching from the Arctic Circle to the southernmost tip of Southeast Alaska. In five decades, AP&T moved from humble beginnings to take a leadership role in the development of renewable resource energy in Alaska. Through a combination of low impact hydro, wind, and experimental underwater river turbine projects, AP&T’s 134 employee-owners work to further minimize our environmental footprint while ensuring the availability of energy resources necessary for future years.
LAPP Resources, Inc. has been involved in the Alaska energy business since 1991. During the last 17 years, LRI has been instrumental in exploring new energy sources for both the rail belt and rural Alaska, from wind energy, to remote sensing for geothermal exploration on the Alaska Peninsula, to shallow gas and coalbed methane exploration in the Cook Inlet basin and Interior (see http://home.gci.net/~lapres/index.html).


3.2 Project Schedule

Include a schedule for the proposed work that will be funded by this grant. (You may include a chart or table attachment with a summary of dates below.)


The following project schedule is proposed:


Task Time Period
State LUP Application/Grant Jan-June 09

Met Tower Construction/Monitoring June 09 – June 2010

Topographic mapping July 09

Wetlands mapping July 09

Archeological review July 09

Avian Studies Complete June- Sept 09

Detailed road & line design Sept-Oct 09

Detailed wind farm design Sept-Oct 09

State road & line easement Oct-Dec 09

State land lease acquisition Oct-Dec 09

Interconnection study Oct-Dec 09

Power Agreement with utility Jan 2010

Road & Trans Line Construction April - July ‘10

Wind Farm construction & commissioning June- Sept ‘10




3.3 Project Milestones

Define key tasks and decision points in your project and a schedule for achieving them.






  • Successful completion of final design and environmental studies is required prior to final permitting – October 2009.

  • Transmission Line and access road easement, and Land Lease – Long-term access to the site is required – December 2009.

  • Completion of Integration Study and Power Purchase Agreement – A stable long-term contract for power sales is required for the project to proceed – January 2010.

  • Access road and transmission line construction – April – July 2010.

  • Successful wind farm construction (June-Sept 2010), and commissioning is expected in September 2010.




3.4 Project Resources

Describe the personnel, contractors, equipment, and services you will use to accomplish the project. Include any partnerships or commitments with other entities you have or anticipate will be needed to complete your project. Describe any existing contracts and the selection process you may use for major equipment purchases or contracts. Include brief resumes and references for known, key personnel, contractors, and suppliers as an attachment to your application.


Village Wind Power LLC will be the lead manager of the project, assisted as needed by Alaska Wind Power LLC’s and its owner’s Alaska experience. Their experience is listed above under 3.1 Project Manager.


Contractors have not been selected to carry out any of the Project tasks, but the tasks will be completed using optimal wind industry practices. The tasks may include:
Mapping contractors to complete topographic and wetlands mapping.

Engineering contractor to complete final road right-of-way alignment and design.

Contractors to construct the following:

access road and transmission line,

intra wind farm roads

turbine foundations

turbines and towers assembled

transformer substation

power collection system

electrical hookup of all components

testing and commissioning


3.5 Project Communications

Discuss how you plan to monitor the project and keep the Authority informed of the status.


Village Alaska Wind Power LLC will work closely with the selected contractors and keep the AEA informed of progress by regular e-mail updates as components of the project are completed. The contractor’s Interim and Final reports will be submitted promptly when completed. Further details may be specified in the final Grant Agreement. Close liaison will be maintained with the contractors throughout the project. Issues to be tracked include scope clarifications, progress relative to budget, schedule, data recovery, and health and safety.




3.6 Project Risk

Discuss potential problems and how you would address them.


The design and environmental studies have a low completion risk associated with them. The studies could uncover a conflict between our wind farm proposal and some aspect of the public or wildlife interest. In that case, modifications or various mitigation measures could be evaluated, for instance turbine sites or proposed rights of way could be moved.


The surface access right-of-way alignment will be surveyed to avoid any wetlands in the project area. The final road alignment will also be developed in consultation with the Department of Natural Resources, elected officials and affected stakeholders, to avoid public access use conflicts and maximize the public benefits that can be gained by access to state land in the project area.
The pioneer road is being constructed across forest and alpine land underlain by generally well-drained weathered bedrock soils, thought to be good construction materials for roads. The turbines will be founded in shallow bedrock prevalent at the site. There is little risk of unexpected or expensive construction conditions, so we believe the road construction has a low completion risk.
The wind farm construction also carries a low completion risk since we will be using relatively small wind turbines.
We believe that our power will prove attractive to APC and Tok consumers, and they are likely to be receptive to accepting our power at commercially-viable rates. This risk will be mitigated by negotiating this agreement by January 2010.
Another low-risk possibility is long-term climate (wind) change. Studies have shown that over a 25 year period, the variability in wind is generally less than five percent. Our commercial contracts will be priced and adjusted to account for this risk. This variability could also prove positive for the project.





SECTION 4 – PROJECT DESCRIPTION AND TASKS

  • Tell us what the project is and how you will meet the requirements outlined in Section 2 of the RFA. The level of information will vary according to phase of the project you propose to undertake with grant funds.

  • If you are applying for grant funding for more than one phase of a project provide a plan and grant budget for completion of each phase.

  • If some work has already been completed on your project and you are requesting funding for an advanced phase, submit information sufficient to demonstrate that the preceding phases are satisfied and funding for an advanced phase is warranted.




4.1 Proposed Energy Resource

Describe the potential extent/amount of the energy resource that is available.

Discuss the pros and cons of your proposed energy resource vs. other alternatives that may be available for the market to be served by your project.

The wind energy resource of the Tok Wind Project will be evaluated with one 50 meter meteorological tower for a minimum of 12 months. We believe this monitoring will document a resource which would support an economically viable two MW wind farm considering the market and alternatives to generate power using diesel fuel. Modeling by AWS Truewinds shows a good wind resource on the ridgetop. A two MW wind farm at our location is expected to produce a minimum of 5.256 million kWh of clean, renewable energy every year.


Pros: The Tok Wind Project will allow more efficient use of fossil fuels where renewables are less applicable, such as in transportation and/or to be exported to regions where wind generation is not an option. The Tok Wind Project will improve air quality in the Tok region by reducing fossil fuel use at the existing power plant in this area.
As a renewable energy source, there are really no other good options to replace wind energy for wintertime use in the Tok area. Other renewable sources include solar and run-of-the river (Yerrik Creek) or in-stream hydro (Tanana River), both of which are not available during high-demand winter months. The in-stream hydro option is not likely to be economic within the near future. Geothermal energy could be available in the region but no nearby sources are known at present and new and expensive exploration of the potential sources would be needed.
In the intermediate future, a gas pipeline may be built from the North Slope to Fairbanks and southeast through Tok to the Lower-48, but neither the schedule for construction and completion, nor the price of natural gas from this source is currently known. The recent worldwide decline in the price of natural gas, and new technologies allowing for more economical recovery of natural gas from Lower-48 oil shale resources may delay a North Slope gas line to the Lower-48 for an undetermined period.
All fossil fuel sources of electricity are likely to be governed by future “cap and trade” or “carbon tax” regimes designed to reduce CO2 emissions growth or output. Wind power will not be subject to these added costs, and may in-fact benefit wind power consumers by helping to limit rate increases. Environmental attributes or “carbon credits” created by renewable wind power generation will be sold to help reduce electric rates.
Cons: Wind energy is not dispatchable, as it is an intermittent resource, however, numerous grid studies have shown that a significant penetration of wind can occur without major system upgrades or increases in spinning reserves. Also, improved wind forecasting over a 24 hour period has helped integrate wind into the grid. Wind also has environmental impacts such as avian and bat mortality. This will be studied in more detail in 2009.


4.2 Existing Energy System


4.2.1 Basic configuration of Existing Energy System

Briefly discuss the basic configuration of the existing energy system. Include information about the number, size, age, efficiency, and type of generation.


Tok currently gets all its power from reciprocating diesel fuel generation at APC’s downtown Tok power plant. Village Wind Power will undertake an interconnection study with Alaska Power Company to identify the design, equipment, and operating procedures required to ensure APC’s system stability when accepting power from the Tok Wind renewable energy project. Since APC is a project participant through its parent Alaska Power & Telephone Company, the study should be accomplished without undue delay.


APC is currently contemplating building a run-of-river hydroelectric project on Yerrik Creek near Tok that will supply some of the electric requirement for Tok during the summer months, but its water resource will not be available in sufficient quantities during the winter. Wind energy from this proposed project will integrate well with the hydro project since our wind resource peaks during the winter months.


4.2.2 Existing Energy Resources Used

Briefly discuss your understanding of the existing energy resources. Include a brief discussion of any impact the project may have on existing energy infrastructure and resources.


See 4.2.1 above. We will conduct an interconnection study through APC to identify necessary measures to minimize the impact of wind power integration on their grid. This study will likely be competed by the end of 2009. Our project will benefit air quality in Tok, since less fossil fuel will need to be burned in existing power plant to follow APC’s load.




4.2.3 Existing Energy Market

Discuss existing energy use and its market. Discuss impacts your project may have on energy customers.



Tok is a small town of about 1,700 people in central Alaska. This town and a few outlying connected communities will consume the electricity generated by this project. In addition to Tok, those cities are Tanacross, Tetlin, and Dot Lake. We believe that our project will help shelter utility customers from the effects of carbon taxes or emissions trading schemes that we believe are about to be implemented. These new taxes could cost Tok area consumers an additional $0.02 per kWh on their electrical bills. Power costs to rate payers would be no greater than other non-renewable new generation, which might be brought online in the future. Indeed, our project has potential to reduce power costs to the rate payer, depending on factors such as financing ultimately realized. Wind fuel is “free” and a long-term tariff would be sought, so any potential rate increase(s) with time would be less likely than with fossil fuel generation.




4.3 Proposed System

Include information necessary to describe the system you are intending to develop and address potential system design, land ownership, permits, and environmental issues.


4.3.1 System Design

Provide the following information for the proposed renewable energy system:



  • A description of renewable energy technology specific to project location

  • Optimum installed capacity

  • Anticipated capacity factor

  • Anticipated annual generation

  • Anticipated barriers

  • Basic integration concept

  • Delivery methods




  • The Tok Wind Project will generate renewable electricity from wind resources in the Seven Mile Ridge area near Tok.

  • The optimum installed capacity will be dependent on our power purchase contracts with the utility, and is not limited by the wind resource available.

  • We anticipate a minimum capacity factor of 30 percent.

  • The project will generate about 5.256 million kW hours per year from 2 MW of nameplate installed capacity.

  • Barriers include upfront environmental, engineering, and permitting studies; i.e., information required to achieve project permit approval and State land lease. Other barriers could include unanticipated wildlife or bird issues arising from our specific site.

  • Integration will be by step-up transformers and a 12 mile long distribution-voltage transmission line built to get our power to the APC grid.

  • The power will be sold wholesale to APC and delivered to consumers by their utility as it is now.




4.3.2 Land Ownership

Identify potential land ownership issues, including whether site owners have agreed to the project or how you intend to approach land ownership and access issues.


The access route and site are vacant State land, however a portion of the access road is on State Forest land. We do not believe that this will prove a barrier to development. Completion of our avian and design studies is required to proceed to a State land lease for the wind farm site and rights of way for the transmission line and construction access road.




4.3.3 Permits

Provide the following information as it may relate to permitting and how you intend to address outstanding permit issues.






  • State Land Use Permit for Resource Monitoring – June 09

  • Wetlands Permit (if applicable) – July 09

  • SHPO Review – July 09

  • DOTPF driveway and powerline easement – Oct-Dec 09

  • State land lease - Oct-Dec 09

  • Interconnection and Power Purchase Agreement – Jan 2010




4.3.4 Environmental

Address whether the following environmental and land use issues apply, and if so how they will be addressed:



  • Threatened or Endangered species

  • Habitat issues

  • Wetlands and other protected areas

  • Archaeological and historical resources

  • Land development constraints

  • Telecommunications interference

  • Aviation considerations

  • Visual, aesthetics impacts

  • Identify and discuss other potential barriers

For the wind farm proposal generally:




  • No threatened or endangered species are known in the local area. The avian studies that are already planned are a key element of our environmental study.

  • The area is used by moose and caribou (Macomb Herd) and predators. Few wind farms have been built in caribou habitat. Discussions would be held with ADFG and USFWS on any needed information to support permit decisions.

  • Riverine habitat exists near a small creek along the proposed road ROW. Corps of Engineers 404 b(1) guidelines require developers to (1) avoid wetlands, (2) minimize impacts if unavoidable, and (3) mitigate unavoidable impacts. The road will avoid wetlands negating the need for 404 permitting.

  • Few archaeological and historical resources are known in the area. A SHPO 106 review would be undertaken.

  • There are no known land development constraints, aside from winter winds that at times exceed 100 mph, with drifting snow. Access is to our proposed site is via vacant public land. No incompatible land use(s) affect wind farm development.

  • Telecommunication interference is unlikely. There are no businesses and few residences within 10 miles of the site. We are not within line-of-sight paths for microwave communications.

  • Aviation use of the nearby area is frequent, since it is near the Tok Cutoff that runs through Mentasta Pass. Civilian airmen often fly along the Tok Cutoff. Notices to Airmen and obstruction lights on met towers and turbines will alert the aviation community of the potential hazard.

  • Aesthetic and visual impacts will be reduced by locating the wind farm several miles from the highway where the majority of travelers will not see it from close quarters. Some find wind turbines graceful additions to the countryside, a reminder that we can live well while reducing our use of fossil fuels. About half of the transmission line will be adjacent to the highway, and its western half is along our proposed access road. Most travelers will not see the western half of the line, since it will be some distance away from the highway.




4.4 Proposed New System Costs (Total Estimated Costs and proposed Revenues)

The level of cost information provided will vary according to the phase of funding requested and any previous work the applicant may have done on the project. Applicants must reference the source of their cost data. For example: Applicants Records or Analysis, Industry Standards, Consultant or Manufacturer’s estimates.


4.4.1 Project Development Cost

Provide detailed project cost information based on your current knowledge and understanding of the project. Cost information should include the following:



  • Total anticipated project cost, and cost for this phase

  • Requested grant funding

  • Applicant matching funds – loans, capital contributions, in-kind

  • Identification of other funding sources

  • Projected capital cost of proposed renewable energy system

  • Projected development cost of proposed renewable energy system




  • The total project cost for the two MW Tok Wind Farm is $8.10 million.

  • The grant request for this phase is $8.10 million (permitting, final design, road, transmission line, and wind farm construction).

  • Company capital contribution matching funds and labor will be supplied as required to complete the project.

  • Sufficient funds are required to complete project final design and permitting, and a bankable feasibility study.

  • Construction financing could be sought from other funding sources including the Power Project Fund, commercial loan funds and/or joint venture with others.

  • The total estimated project capital cost for a two MW project is $8.10 million.

  • The total estimated project pre-development costs (for studies, permitting, legal review, and engineering) for the project is $300,000.




4.4.2 Project Operating and Maintenance Costs

Include anticipated O&M costs for new facilities constructed and how these would be funded by the applicant.



  • Total anticipated project cost for this phase

  • Requested grant funding




  • For this grant application, there is no O&M cost associated with the design studies, and a low cost associated with the access road. Road maintenance will be required during the summer of 2010 during the construction phase of the project, but that road O&M cost will be carried in the construction budget.

  • For the Tok Wind Project, direct O&M costs are estimated (based on industry experience) at about three cent per kWh. More definitive numbers will be available as the final design is settled.

  • This grant application has requested $8.10 million on an $8.10 million project. If additional monies are required to complete the project the participants will supply the required capital.




4.4.3 Power Purchase/Sale

The power purchase/sale information should include the following:



  • Identification of potential power buyer(s)/customer(s)

  • Potential power purchase/sales price - at a minimum indicate a price range

  • Proposed rate of return from grant-funded project




  • No wholesale power purchase agreement has been negotiated at this time with the utility.

  • We expect that the sale of our power will be at rates close to APC’s actual avoided cost.

  • We expect that the majority of the project will be funded using this grant. When commissioned, our project will help Alaska meet its increasing energy requirement, stabilize power costs, and avoid a portion of future taxes on carbon fuels, CO2 emissions, or carbon sequestration requirements. We will be able to better calculate a rate of return after the final design, permitting, and power sales agreement has been accomplished.




4.4.4 Cost Worksheet

Complete the cost worksheet form which provides summary information that will be considered in evaluating the project.



Download the form, complete it, and submit it as an attachment. Document any conditions or sources your numbers are based on here.


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