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VIEWS: 8 PAGES: 3

									600 Bethel AVCP RHA

Proposer:                   Association of Village Council Presidents (AVCP)

Benefit/Cost Ratio:         Applicant (self reported): N/A 1       Applicant : 0.57 AEA : 0.61

Project Description:

AVCP aims to erect two Northwind 100 turbines in Bethel, AK to supply electricity to their low income rental
units, congregate housing, office complex and warehouses. They are proposing to erect the turbines on land
that they purchase from the city. AVCP plans to work closely with the local utility provider; the project
assumes that the utility will allow the wind generated electricity to be fed into the grid, would supply it to
AVCP through the current distribution network, and will purchase and use any excess generation.

Applicant states that TDX is in the process of buying Bethel Utilities Corporation. This AVCP project appears
to be contingent upon this purchase. The existing generators in Bethel are not capable of accepting wind
generated power; TDX is planning to upgrade the infrastructure once they have purchased the utility. The
assumption that TDX will convert existing diesel generators to allow for wind generated energy is confirmed
by TDX’s AEA grant application #604.

Applicant states that TDX is aware and supportive of their efforts to convert to wind energy, but confirm that
no partnership or power purchase agreement is in place.

Applicant also mentions pursuit of a joint venture wind farm with the City of Bethel and TDX. This scenario
was not considered for this analysis as no agreements are in place.

Funding

Total estimate project costs are $3,795,000 and do not include past funds spent by AVCP on a wind energy
study in 2009. Applicant is requesting grant funds in the sum of $3,045,000. AVCP is matching $750,000 or
20% of total project costs. Applicant’s estimated total project cost covers construction of two wind turbines,
site acquisition, power generation/controls building, as well as operations and maintenance training of
permanent employees.

Contribution to Lower the Cost of Energy:

The energy produced by the two wind turbines will offset 465,988 kWh of electricity per year in a Class 4
wind zone at 80% availability. This is equivalent to 33,767 gallons of fuel per year assuming current utility’s
(BUC) diesel generation fuel efficiency of 13.8 kWh per gallon.

Assumptions Modified:

The applicant states that 582,486 kWh of electricity will be offset by the two wind turbines. This data was
supplied by the authors of their 2009 wind energy study and are reasonable for turbines in class 4 winds
that are available 100% of the time (capacity factor of 33.25%). The AEA tab assumes 80% availability and



1
    However, applicant expects a 18.2 years payback.
Northern Economics                                     1                                               12/1/11
annual net wind generation of 465,988. The net capacity factor of 26.6 is in-line with AEA engineer
estimates for a class 4 wind resource.

Applicant expects renewable generation O&M to cost $.11 per kWh. Per their comments on pg. 4 of the
application, this figure includes diesel generator O&M. The AEA benchmark for renewable energy O&M
($.05 per kWh) was used in the AEA tab.

The estimated total project cost of $3,795,000 provided by the applicant was also used in the AEA analysis.
The applicant’s cost information was determined using their records (a feasibility study was conducted in
2009), data from land appraisers, and quotes from wind turbine suppliers. It should be noted however, that
using AEA’s benchmark of $10,200 per kW of installed capacity for rural wind projects, the estimated total
project cost would be much lower at $2,040,000. In this case, the resulting B/C ratio would be > 1 (1.07).

Concerns:

Applicant’s construction cost estimates are considerably higher than AEA benchmarks.

The feasibility of this project is wholly dependent on the actions of TDX. AVCP is relying on TDX to
complete its purchase of Bethel Utilities, upgrade their diesel generators, and agree to a purchase
agreement with AVCP. Should TDX fail to complete any of these steps, the wind project will no longer be
viable. Thus far applicant has not supplied evidence of any agreement or partnership between it and TDX.

The application assumes that AVCP will see the full benefit of all wind generated electricity produced by
their turbines. Applicant does not account for charges which may be levied by the local utility for use of their
infrastructure and/or related administrative or transaction costs.

Possible Enhancements:

AVCP wishes to offset its annual diesel usage (581,573 kWh) with wind energy. The wind analysis
completed in 2009 recommends installation of two Northwind 100s and appears to assume 100% turbine
availability. At the 80% availability used in evaluating the application, the two Northwind 100s will produce
465,988 kWh and will not meet all of AVCPs needs. They may want to revisit their planned installation
capacity.

Long-term Sustainability:

Sustainability is contingent upon actions of and negotiations with TDX.

Potential public benefits:
1. Infrastructure. Project will lead to construction of a new controls building.
2. Employment. Local utility providers and AVCP staff would learn new skills through training.
3. Community Solutions. Project will benefit the low income housing residents and the member tribes
    using AVCP services by lowering program energy costs.
4. Improve Existing Energy System. This stand-alone project (not including the TDX upgrades to the
    existing generators) would improve only the AVCP generation system. However, the applicant hopes to
    form a partnership with both the City and TDX through which a larger wind farm would be built. This
    would harness economies of scale and increase community-wide energy system benefits.



Northern Economics                                     2                                               12/1/11
5. Statewide Applicability. Should this project go forward, AVCP would be the first regional headquarter in
   Bethel to utilize wind energy. This system could become an exemplary project for other organizations
   around the state.
6. Other public benefits. The project will reduce fuel consumption and associated carbon emissions.




Northern Economics                                   3                                             12/1/11

								
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