2017 BIA Providers Conference

Denali Commission – An independent Federal Agency Created in 1998 – Denali Commission Act Identify gaps where others are not operating Complement, but not duplicate the work of others The Denali Commission was created as a coordinating agency to bring the infrastructure in rural Alaska to standards of the rest of America. The Commission is modeled after regional commissions in the lower 48. The Denali Commission is unique in many ways, foremost is that we serve 1 state. The Commission is comprised of seven Commissioners including a federal co-chair and a state co-chair. The intent of the Denali Commission was to create a federal agency seemingly unlike other bureaucracies of the day – build an organization that was, above all, committed to coordination and convening. And within that framework, bring infrastructure to rural Alaska that had become standard throughout the rest of America.

Typical Commission Investments Half of all projects and investments have been for energy. Over $1.1 Billion in capital investments to 1300+ projects

Historic Programming Energy – bulk fuel, power generation, transmission Health facilities – primary care clinics Transportation – roads, waterfront Sanitation – washeterias, solid waste Housing – senior, teacher, domestic violence shelters Training Economic Development

Denali Commission’s Energy Program Types of projects funded: Bulk Fuel Storage Rural Power System Upgrades (RPSU) Distribution/Interties Energy Cost Reduction Projects Renewable, Alternative and Emerging Energy Technologies Primary Program Partners: Alaska Energy Authority Alaska Village Electric Cooperative Alaska Native Tribal Health Consortium Alaska Center for Energy & Power Cold Climates Housing Research Center Pilot Point RPSU Buckland Bulk Fuel

Denali Commission’s Bulk Fuel Program 145 fuel storage facilities in 110 communities built over 18 years Approximately $225 million of Commission funding spent Projects originally prioritized based on 1999 condition list Priority list updated in 2015 First Program established by the Commission In 1998 virtually every tank farm in rural Alaska needed significant upgrades to be code-compliant Letter report – Upgrade alternative selection – Design – Construction Since 2015 13 Letter Reports 5 projects under design

Denali Commission’s Remote Power System Program Nearly 100 projects since 1999 Approximately $240 million of Commission funding spent Priority lists developed with partners Power plants, interties, renewable energy, microgrids Energy efficiency AEA and AVEC primary partners for RPSU ANTHC primary partner for Energy Efficiency Emmonak Power Plant

Denali Commission’s Energy Program Strategic Goals & Objectives: Facilities Management: Invest in projects and initiatives that maintain, sustain, and protect existing rural infrastructure. Energy: Continue to invest in projects and initiatives that improve the affordability, safety, and/or reliability of fuel storage, the production and storage of energy, electrical distribution systems, and heating the built environment. Looking to the Future the Commission recently developed and published a Strategic Plan for FY 2018 – 2022 The plan has several goals and objectives here are two that are directly pertinent to the Energy program. Invest in both capital and non-capital projects/initiatives that include data collection, energy planning, maintenance & improvement, and training.

As Funding Declines, Now What? Funding for the Commission’s Programs has gone from a high of $140 million annually to about $20 million. This chart shows the annual funding amounts. But our funding as decreased From $140M in FY2006 to $19.6M for FY2017 $1.7M for Bulk Fuel $7M for Energy Projects/Initiatives

Remaining Unmet Need Power System Upgrades: $200 million (AEA) Bulk Fuel Storage Upgrades: $170 million (AEA) Electric Interties for Close Pair Villages: $250M (AVEC) Main takeaway: There is still considerable need in rural Alaska communities for improved energy facilities. Despite reduced funding tremendous need remains.

Difficulties Facing Energy Facilities Operation and maintenance of existing facilities Training for operators Utility administration Inactive and abandoned tank farms Genset Emission Requirements So far, we’ve focused on the physical problems these facilities are facing. Many of them are upwards of 30 or 40 years old and so that is to be expected in many ways. The slide outlines some of the other problems that energy facilities operators/administrators are dealing with. Regular operations and maintenance. Even as facilities age, they can be kept safe and functional with good operation. Making sure not to overfull tanks, following correct procedure for fuel delivery, keeping the workplace clean and safe, noting whether a liner appears to be holding water after it rains. Training for operators. AVTEC does offer a two-week training course twice a year in Seward. The tank farm only needs to cover transportation costs to Seward to pay for this. It is a great program- very informative, but somewhat limited by the fact that it is in Seward, not in the operators’ communities. Administration. Important that tank farm owners are setting aside money to pay for longer term repairs. As we’ve discussed- there are limited government funds available at this point, and so it is all the more important that communities are saving on their own. There is currently no tank farm specific training for administrators, although there are more general programs out there. Some specific topics like price setting might not be covered in those, however. Inactive tanks. Many communities, as you know, have old tanks that are no longer in use. These tank present environmental and safety threats to a community and it can be expensive to remove them. RAFS provides this service at the cost of about $4,500 a tank, depending on capacity. Climate change and erosion. In addition to all these factors, climate change and erosion can present problems for tank farms, especially older ones that were built without taking such concerns into consideration. Tank farm operators participating in an AVTEC training in Seward

New Approaches to Funding “Life-extension” projects as opposed to full replacements So in light of these problems, where does the Commission spend it’s money in order to maximize impact and encourage sustainability? One option- invest in smaller, “life-extension” projects, designed to extend a facility’s life for 15-20 years at far less cost. In these photos, the Commission partnered with AVEC to refurbish the tanks in Scammon Bay for a cost of about $900,000, rather than the several million dollars a full replacement would have cost. Generally, these projects involve inspecting, cleaning and painting tanks, installing or fixing secondary containment, and installing safety features like fences and lighting. Lets the Commission assist more communities. Projects would be between $500k and $1M approximately, depending on size, as opposed to several million.

Facilities Management Approach Neglecting maintenance and operator training (red line) = failure before a properly maintained facility (green line) Condition Increase investments in Sustainability to include training, maintenance and improvement projects. Promote preventative maintenance practices and inform owner/operators on how they can pay for these services. The economic life cycle graph on the right shows how, in general, neglecting maintenance and operator training (red line) can cause a facility to fail well before a properly maintained facility (green line). Time

Maintenance and Improvement (M&I) Maintain, Sustain, Protect Operator Training Circuit Rider Program DERA Program Small M&I Projects Another area the Commission is investing is on small maintenance and improvement and administrative O&M projects such as those listed here. These are small fixes that are designed to make the facility safer, although not necessarily code-compliant. AVEC has repaired tank farm fences in 5 communities.

Collaboration with Partners Partner with the Alaska Energy Authority to provide local, one-on-one training to tank farm operators and power plant operator training Partner with the State of Alaska Division of Community and Regional Affairs to expand the RUBA program to assist tank farm administrators and to add bulk fuel farm information to Community On-line database Partner with the Alaska Community Foundation to make it simpler and more affordable for tank farm owners to save money to fund repairs to their own facilities Partner with RAFS to provide bulk fuel farm operations assistance.

QUESTIONS? Contact Information: Tom Wolf: twolf@denali.gov 907-271-5232

907.271.1414 • 888.480.4321 www.denali.gov