Zach Gordon Heating System Life Cycle Cost Analysis

Heating System Life Cycle Cost Analysis

Zach Gordon Youth Center

City and Borough of Juneau

Prepared by:

Final Report September, 2014

Alaska Energy Engineering LLC

Zach Gordon Youth Center 1 Life Cycle Cost Analysis

Table of Contents

Section 1: Executive Summary 2 Introduction ................................................................. 2 Life Cycle Cost Analysis ............................................. 2

Section 2: Introduction 3 Introduction ................................................................. 3 Economic Factors ........................................................ 3 Energy Costs ................................................................ 3 Operating Costs ........................................................... 6

Section 3: Heating System Analysis 8 Introduction ................................................................. 8 Life Cycle Cost Analysis ............................................. 8

Appendix A: Calculations

Appendix B: Layout Drawings



Section 1

Executive Summary

INTRODUCTION

This report presents a life cycle cost analysis of three heating options for the Zach Gordon Youth Center in Juneau, Alaska. The building is currently heated by a fuel oil boiler that has reached the end of its service life. The intent of this analysis is to determine if there is economic incentive to convert to a wood pellet boiler or electric boiler heating system.

Cost of Heat

The chart shows that fuel oil heat is slightly less expensive than electric and pellet heat. Over time, fuel oil heat becomes the most expensive and electric heat the least expensive.

LIFE CYCLE COST ANALYSIS

The heating system analysis evaluates fuel oil, wood pellet, and electric boiler heating for the Zach Gordon Youth Center. The heating options are:

Option 1 – Fuel Oil Boiler: This option replaces the existing fuel oil boiler with a smaller, properly sized fuel oil boiler and new underground fuel tank with leak monitoring.

Option 2 – Wood Pellet Boiler: This option converts the building to wood heating by installing a staged system consisting of two wood pellet boilers and a 7 ton pellet silo.

Option 3 – Electric Boiler: This option converts the building to electric heating by replacing the fuel oil boiler with an electric boiler.

The analysis determined that the electric boiler has the lowest life cycle cost; 25% lower than the fuel oil boiler option. The wood boiler has a 12% higher life cycle cost than the fuel oil boiler option.

Life Cycle Cost Analysis – Heating Options

Option Construction Maintenance Energy Total % of Option 1

Option 1: Fuel Oil Boiler $108,000 $40,000 $497,000 $645,000 -

Option 2: Wood Pellet Boiler $236,000 $114,000 $374,000 $724,000 112%

Option 3: Electric Boiler $136,000 $16,000 $331,000 $483,000 75%

Note: Bold indicates lowest life cycle cost

$0

$20

$40

$60

$80

$100

$120

$140

$160

2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038

$ / M

MBtu

Year

Cost of Heat ComparisonFuel Oil Inflation @ 6.0%Electric Inflation @ 2.5%

Wood Pellet Inflation @ 3.7%

Fuel Oil Boiler HeatElectric Boiler HeatPellet Boiler Heat



Section 2

Introduction

INTRODUCTION

This report presents a life cycle cost analysis of three heating options for the Zach Gordon Youth Center in Juneau, Alaska. The analysis is performed by:

Jim Rehfeldt, P.E., Energy Engineer, Alaska Energy Engineering LLC

Doug Murray, P.E., Mechanical Engineer, Murray & Associates, P.C.

Barry Begenyi, P.E., Electrical Engineer, Begenyi Engineering LLC

The Zach Gordon Youth Center is currently heated by a fuel oil boiler that has reached the end of its service life. The intent of this analysis is to determine if there is economic incentive to convert to a wood pellet boiler system or an electric boiler system.

ECONOMIC FACTORS

The purpose of the feasibility analysis is to compare the life cycle cost of options for heating the building. The findings are highly sensitive to the economic factors, energy costs, and energy inflation used for the analysis. While future energy inflation often has the greatest impact, there is no authority for these values. For this reason, a sensitivity analysis is used where base case, low, and high values for fuel oil, electricity and wood pellets are evaluated.

The following economic factors are used in the analysis:

Economic Period: The economic period is set at 25 years with costs based on 2014 construction.

Nominal Interest Rate: This is the nominal rate of return on an investment, without regard to inflation. The analysis uses a rate of return of 4.5%.

Inflation Rate: The Consumer Price Index has risen at a rate of 2.75% over the past 20-years. The analysis is based on a 2.75% rate of inflation over the 25-year economic period.

ENERGY COSTS

Fuel Oil

Current Cost

The City and Borough of Juneau currently pays $3.49 per gallon for #2 heating oil.

Fuel Oil Inflation

Base Fuel Oil Case: Over the past year, fuel oil prices have been dropping due to increasing domestic production. This price drop is expected to be a short-lived reprieve from the upward price trend of 6% per year that has occurred since 1992. The base case assumes that future fuel inflation will continue at this rate.

High Fuel Oil Case: There is potential for world oil demand to increase due to increased consumption by developing countries and/or an expanding global economy. Disruption of the world oil supplies could also affect supply, causing prices to rise. The high case assumes these factors and others could cause fuel inflation to be higher than the base case at 8% per year.



Low Fuel Oil Case: The U.S. Energy Information Agency predicts fuel oil inflation of 4.2% per year for the next 25-years. While this reference has historically under-predicted actual fuel oil inflation, it is possible that future fuel oil inflation may be lower than the base case due to: new technologies that increase oil field production; new sources such as oil sands; and efficiency gains that reduce global oil demand. These factors and others could lead to less demand which would result in fuel oil inflation lower than the base case at 4.2% per year.

Electricity

Current Cost

Electricity is supplied by Alaska Electric Light & Power Company (AEL&P). The building is billed for electricity use under AEL&P’s Rate 24, Large Government. This rate charges for both electrical consumption (kWh) and peak electric demand (kW). Electrical consumption is the amount of energy consumed and electric demand is the rate of consumption. AEL&P determines the electric demand by averaging demand over a continuously sliding fifteen minute window. The highest fifteen minute average during the billing period determines the peak demand. The following table lists the electric charges.

AEL&P Small Government Rate with Demand

Charge 1 On-peak (Nov-May) Off-peak (June-Oct)

Energy Charge per kWh 6.11¢ 5.73¢

Demand Charge per kW $14.30 $9.11

Service Charge per month $99.24 $99.24

Electric Inflation

Baseline Case: Over recent history, electricity inflation has been less than 1% per year, lagging general inflation. The exception is a 24% rate hike in 2011 that was primarily due to construction of additional hydroelectric generation at Lake Dorothy, which now provides the community a surplus of power. This should bring electric inflation back to the historic rate of 1% per year. However, load growth from electric heat conversions is likely to increase generating and distribution costs. Increasing fuel oil costs make it inevitable that electric load growth will continue. When the hydroelectric surplus is depleted, diesel supplementation and/or additional hydroelectric generation will be needed to supply the load. The combination of these two factors contributes to an assumed electricity inflation rate of 2.5%.

High Case: Rising fuel oil prices may increase electric heat conversions, causing the utility to supplement with diesel generation or construct additional hydropower generation. A high case of 3.5% reflects these factors.

Low Case: If fuel oil prices continue to drop, electric heat conversion will drop and the community will retain its electrical surplus. A low case of 1.5% reflects these factors.

Wood Pellets

Supply Source

Wood heating of commercial and institutional buildings is increasing in use in the United States, but the industry is in its relative infancy in Southeast Alaska. Boilers can burn pellets, chips, discs, cordwood, and hog fuel (chopped wood). Of these energy sources, only pellets are manufactured to known standards for energy content, moisture levels, ash content, etc.



Premium-grade pellets are currently the only suitable wood energy fuel for the buildings. They are selected because they are manufactured to known quality standards and are currently commercially available in Juneau. Sealaska Corporation has a distribution system in place to serve their building as well as other customers. They purchase pellets from the Pacific Northwest and transport them to communities in Southeast Alaska. The pellets are then delivered to the buildings. A long-term supply contract is likely to promote competition by other pellet brokers.

Current Costs

Haa Aaní, LLC, a subsidiary of Sealaska Corporation, has quoted a price of $401 per ton for a five ton delivery.

Pellet Inflation

Baseline Case: Sealaska has increased prices from $300 per ton in 2010 to $401 in 2014, an inflation rate of 6% per year. They report that supply and transportation costs have contributed to the price increases. These prices should stabilize as they firm up their costs to supply pellets to Southeast Alaska. However, there is considerable imbedded fuel oil energy in imported pellets, so the price is tied to fuel oil inflation. A pellet inflation rate of 3.7% is recommended.

High Case: Rising fuel oil prices may increase domestic and international demand for pellets, putting pressure on prices. A high case of 5% reflects these factors.

Low Case: If fuel oil prices continue to drop, pellet demand and transportation costs will drop. A low case of 3% reflects these factors.

Summary

The following table summarizes the energy and economic factors used in the analysis. A sensitivity analysis is also provided to determine how modest variations in energy inflation affect the results. The following table shows the base, high and low case energy inflation that is applied to the analysis.

Summary of Economic and Energy Factors

Factor Rate or Cost Factor Rate or Cost

Nominal Discount Rate 4.5% Wood Pellets (2014) $401/ton

General Inflation Rate 2.75% Wood Pellet Inflation 3%, 3.7% (Base), 5%

Electricity (2013) 10.5¢ per kWh Fuel Oil (2014) $3.48 / gallon

Electricity Inflation 1.5%, 2.5% (base), 3.5% Fuel Oil Inflation 4%, 6% (Base), 8%

1. The inflation rates for fuel oil, electricity, and pellets are for the low, base, and high case for each energy source.

Cost of Heat Comparison

The following chart provides a 25-year heating cost comparison for fuel oil, electric, and wood pellet heating. Currently, fuel oil heat is slightly less expensive than electric and pellet heat. Over time, heating costs trend upward in accordance with their projected inflation rates. Fuel oil heat becomes the most expensive and electric heat the least expensive.



OPERATING COSTS

Operating costs include maintenance and repair cost—on an annual and intermittent basis—and equipment replacement costs at the end of its expected service life. The costs are derived from industry standards for the long-term operation of the systems.

Fuel Oil Boilers

Maintenance

The following maintenance requirements are recommended:

Weekly: Inspection of heating plant operation; 30 minutes

Monthly: Check burner and fuel system; Check gaskets for unusual wear, overheating, and leakage; 1 hour.

Annual: Drain boiler, check interior for scale, clean combustion surfaces, perform combustion test, remove and clean low water cutoff probe, burner maintenance, replace any leaking elements or element gaskets; 8 hours.

Annual Parts Allowance: $125 per year.

Replacement

A fuel oil boiler has an expected service life of 35 years. The boiler has a salvage value at the end of the 25 year economic period.

Efficiency

Fuel oil boilers have full load combustion efficiency of 85%. Additional losses due to jacket heat loss, cycling losses, and air flow up the flue cause the seasonal efficiency to be much lower. The seasonal efficiency of the plant was determined to be 72%.

Electric Boilers

Maintenance

Electric boilers are in use throughout Juneau; one can be readily retrofit into the building. The boiler is supplied with controls to stage the heating elements and minimize demand charges.

$0

$20

$40

$60

$80

$100

$120

$140

$160

2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038

$ / M

MBtu

Year

Cost of Heat ComparisonFuel Oil Inflation @ 6.0%Electric Inflation @ 2.5%

Wood Pellet Inflation @ 3.7%

Fuel Oil Boiler HeatElectric Boiler HeatPellet Boiler Heat



Daily: Inspection of heating plant operation

Monthly: Check elements and gaskets for unusual wear, overheating, and leakage. Check fuses and elements with ohm meter for proper values; 1 hour.

Annual: Drain boiler, check interior for scale. Clean control panel of dust, check tightness of conductors, spot check torque element flange bolts, check condition of contactors, check all wiring, check hand hole/manhole gaskets, check float operations, remove and clean low water cutoff probe, replace any leaking elements or element gaskets; 4 hours.

Every Ten Years: Replace or repair equipment. Replace element, contactors, floats, frayed or brittle wiring, and/or low water cutoff probe; 8 hours.

Efficiency

Electric boilers experience jacket losses of approximately 1% of their capacity. Since heating loads average about 20% of the peak load, this results in a seasonal efficiency of 95%.

Wood Pellet Boilers

Wood boilers require increased space for the equipment including the boiler vessel and ancillary equipment, fuel storage, and heating water buffer tank. Wood boilers have more moving parts and will require additional operational and maintenance time (O&M) over the existing fuel oil boiler.

The analysis is based on Maine Energy Systems MESYS pellet boiler. These boilers are installed in Southeast Alaska and are being installed in the Sealaska Heritage Institute in Juneau. The manufacturer and local heating companies will support the product.

Maintenance

The CBJ will need to develop the necessary expertise to maintain the boilers in-house. The following maintenance requirements are based on MESYS recommended practices.

Weekly: Visual inspection of the boilers; 45 minutes.

Monthly: Check critical functions, remove ash and clinkers, repairs; 1.25 hours.

Annual Maintenance: Inspections, lubing, burner maintenance, internal critical function checks, possible equipment replacement; 8 hours annually.

Annual Parts Allowance: $150 per year.

Storage Sizing

Pellets will be delivered by Haa Aaní, LLC. A 7 ton pellet silo is recommended. The building will consume 40 tons of pellets and require eight 5 ton deliveries.

Boiler Efficiency

Pellet boilers have a full load combustion efficiency of 84%. Data on the seasonal efficiency of pellet boilers could not be found. A pellet boiler is similar to a fuel oil boiler in terms of firing vessel size and standby losses but the two boilers will have greater standby losses and the buffer tank increases heat loss. It also requires a longer time period to achieve a full burn. It is assumed that pellet boiler will have a seasonal efficiency of 72%.

Replacement

Pellet boilers have undergone significant technological advancements in recent years. As such, there is no data on their expected service life. The manufacturer predicts a 30-year life but in the U.S. the longest operating boiler is 5 years old and internationally it is 15 years old. The analysis is conservatively based on a 20-year service life since there is no data to support the manufacturer’s claim.



Section 3

Heating System Analysis

INTRODUCTION

The heating system analysis evaluates fuel oil, wood pellet, and electric heating for the Zach Gordon Youth Center.

LIFE CYCLE COST ANALYSIS

Heating Options

Option 1: Fuel Oil Boiler

This option replaces the existing fuel oil boiler with a smaller, properly sized fuel oil boiler. The boiler size is reduced by 25% from the existing size due to improvements in the building envelope. The fuel tank size is also reduced by 50%.

Minimal architectural and mechanical modifications are required for this option. A correctly sized modern boiler will meet minimum clearance requirements in the existing boiler room.

A fuel oil boiler system requires minimal training for staff and parts are stocked by the CBJ or local companies.

The construction scope includes:

395 MBH fuel oil boiler and burner

500 gallon underground fuel oil tank and piping connected to boiler

Connect the boiler flue to the existing chimney

Connect the boiler to the existing heating supply and return piping

Startup and commissioning.

Option 2: Wood Pellet Boiler

This option converts the building to wood heating by installing two pellet boilers manufactured by Maine Energy Systems (MESYS). MESYS does not make a single boiler that is large enough to heat the building, so two are required.

MESYS was chosen as the basis of the analysis because it has a local presence with a few boilers in SE Alaska and local mechanical contractors that are factory trained in their installation and maintenance. The two boiler MESYS system is less expensive than a larger single boiler.

Wood boilers require downtime for maintenance and repair; unfortunately, there have also been several failures in Southeast Alaska that have resulted in downtime to procure parts and make repairs. A backup heating source is essential. Unfortunately, the boiler room is too small to fit a backup boiler and the electrical service cannot feed a preferred electric boiler. Given the constraints of adding a backup boiler, the analysis relies on two wood boilers to provide redundancy. If one boiler fails, there will be sufficient heat for the building on a cold day if the air handling units are turned off.

A wood boiler will require additional training of maintenance staff at the manufacturer’s plant. Parts and service may not be locally available or timely in case of malfunctions.



Architectural and mechanical modifications are required to accommodate the much larger footprint of the wood boilers. Modifications include a boiler room expansion with 1-hour fire walls, reconfiguration of piping, a new expansion tank, site costs for a storage silo, and routing of pneumatic pellet feed lines through the existing storage space. The wood boiler system will take-over space within the building and in the courtyard that is currently available for ZGYC uses.


A boiler room expansion

Two 191 MBH wood pellet boilers and burners.

7 ton pellet silo and two feed augers connected to each boiler pellet storage container

Connect the boiler flues to the existing chimney

Replace and relocate the expansion tank and reconfigure existing piping

Connect the boilers to the existing heating supply and return piping

Power the wood boilers and boiler circulation pumps from the main panel and the subpanel in the mezzanine

Startup and commissioning

Option 3: Electric Boiler

This option replaces the existing fuel oil boiler with an electric boiler and upgrades the electric service to supply the load. Minimal architectural and mechanical modifications are required for this option. A correctly sized modern boiler will meet minimum clearance requirements in the existing boiler room. An electric boiler system requires minimal training for staff.


90 kW electric boiler

Connect the boiler to the existing heating supply and return piping

Startup and commissioning

Upgrade of the electric service including a new underground service, new current transformer and meter base, and new main distribution board to supply the existing electrical loads and the electric boiler. Power to the building originates from a 225kVA, 120/208 volt, 3-phase pad mounted transformer located on the northwest side of the site. The service entrance feeder is routed underground from the pad mounted transformer to the main distribution board in the boiler room. The pad mounted transformer also feeds the Public Safety Building to the west. The service entrance feeder to Zach Gordon will be abandoned below grade. A new service entrance feeder will be provided to a new current transformer and utility meter enclosure mounted on the west side of the building. The main distribution board in the boiler room will be replaced with a 400 amp, 120/208 volt, 3-phase unit. The new main distribution board will be connected to the utility equipment with a new feeder. All of the existing panelboards and equipment will be reconnected to the new main distribution board. See Appendix B for proposed equipment locations and single line diagrams of the existing and new power distribution system configurations.



Life Cycle Cost Analysis

Life cycle cost analysis is used to compare the three options. The analysis identifies costs associated with each heating system but does not include all project costs such as removing the existing fuel oil tank.

The analysis determined that the electric boiler option has a 25% lower life cycle cost than the fuel oil boiler option. The wood boiler has the highest life cycle cost due to higher installation and maintenance costs that are not offset by lower energy costs. This results in the wood boiler having a 12% higher life cycle cost than the fuel oil boiler option.

The sensitivity analysis confirms this result for all cases. For the electric boiler to be a worthy of investment—likely siphoning dollars from other opportunities—it should overwhelmingly offer a life cycle savings. The electric boiler meets the criteria.

Life Cycle Cost Analysis – Heating Options

Option Construction Maintenance Energy Total % of Option 1

Base Case: 6% Fuel Oil, 2.5% Electricity, 3.7% Wood Pellet




High Fuel Oil Case: 8% Fuel Oil




Low Fuel Oil Case: 4% Fuel Oil




High Electricity Case: 3.5% Electricity




Low Electricity Case: 1.5% Electricity




High Wood Pellet Case: 5% Wood Pellet




Low Wood Pellet Case: 3% Wood Pellet




Note: Bold indicates lowest life cycle cost


Appendix A

Calculations

Alaska Energy Engineering LLC Life Cycle Cost Analysis25200 Amalga Harbor Road Tel/Fax: 907.789.1226

Juneau, Alaska 99801 [email protected]


Summary

Basis

25 Study Period (years) 2.75% General Inflation4.5% Nominal Discount Rate 6.0% Fuel Inflation1.7% Real Discount Rate 2.5% Electricity Inflation

3.7% Wood Pellet Inflation

Results Construction Annual Energy Total % of Base

Base Case: 6% Fuel Oil, 2.5% Electricity, 3.7% Wood PelletOption 1: Fuel Oil Boiler $108,000 $46,000 $497,000 $651,000 -Option 2: Wood Pellet Boiler $236,000 $125,000 $374,000 $735,000 113%Option 3: Electric Boiler $136,000 $21,000 $331,000 $488,000 75%

High Fuel Oil Case: 8% Fuel OilOption 1: Fuel Oil Boiler $108,000 $46,000 $649,000 $803,000 -Option 2: Wood Pellet Boiler $236,000 $125,000 $374,000 $735,000 92%Option 3: Electric Boiler $136,000 $21,000 $331,000 $488,000 61%

Low Fuel Oil Case: 4% Fuel OilOption 1: Fuel Oil Boiler $108,000 $46,000 $386,000 $540,000 -Option 2: Wood Pellet Boiler $236,000 $125,000 $374,000 $735,000 136%Option 3: Electric Boiler $136,000 $21,000 $331,000 $488,000 90%

High Electricity Case: 3.5% ElectricityOption 1: Fuel Oil Boiler $108,000 $46,000 $497,000 $651,000 -Option 2: Wood Pellet Boiler $236,000 $125,000 $374,000 $735,000 113%Option 3: Electric Boiler $136,000 $21,000 $373,000 $530,000 81%

Low Electricity Case: 1.5% ElectricityOption 1: Fuel Oil Boiler $108,000 $46,000 $497,000 $651,000 -Option 2: Wood Pellet Boiler $236,000 $125,000 $374,000 $735,000 113%Option 3: Electric Boiler $136,000 $21,000 $295,000 $452,000 69%

High Wood Pellet Case: 5% Wood PelletOption 1: Fuel Oil Boiler $108,000 $46,000 $497,000 $651,000 -Option 2: Wood Pellet Boiler $236,000 $125,000 $439,000 $800,000 123%Option 3: Electric Boiler $136,000 $21,000 $331,000 $488,000 75%

Low Wood Pellet Case: 3% Wood PelletOption 1: Fuel Oil Boiler $108,000 $46,000 $497,000 $651,000 -Option 2: Wood Pellet Boiler $236,000 $125,000 $344,000 $705,000 108%Option 3: Electric Boiler $136,000 $21,000 $331,000 $488,000 75%

September 23, 2014

Page 1

Alaska Energy Engineering LLC Life Cycle Cost Analysis25200 Amalga Harbor Road Tel/Fax: 907.789.1226Juneau, Alaska 99801 [email protected]


Option 1: Fuel Oil Boiler

Basis



Construction Costs Qty Unit Base Cost Year 0 Cost

Fuel Oil SystemUnderground fuel oil tank with monitoring 500 gallon 1 ea $35,000.00 $35,000Fuel oil piping to boiler room 40 lnft $20.00 $800Connection to boiler: tiger loop, filter, valves, etc. 1 ls $1,000.00 $1,000

Heating SystemFuel oil boiler 395 MBH 1 ls $13,000.00 $13,000Connection to exist heating piping 2 ea $750.00 $1,500Connect flue to exist chimney 1 LS $500.00 $500

ElectricalReconnect circuit to new burner 1 ea $750.00 $750

CloseoutStartup 1 LS $1,000.00 $1,000Commissioning 1 LS $1,000.00 $1,000

ContingenciesEstimating contingency 15% $8,183Overhead & profit 30% $18,820Design fees 15% $12,233Project management 15% $14,068

Total Construction Costs $108,000

Annual Costs Maintenance $50.00 Qty Unit Base Cost Present Value

Heating PlantPlant Observation

Weekly Heating Plant Observation 30 min/wk 1 - 25 26 hrs $50.00 $25,847Fuel Oil Boilers

Fuel Oil Boiler MaintenanceParts Allowance, each 1 - 25 1 boilers $125.00 $2,485Monthly, each 1 hrs/mo/blr 1 - 25 12 hrs $50.00 $11,930Annual, each 8 hrs/yr/blr 1 - 25 8 hrs $50.00 $7,953

Boiler salvage value 25 - 25 -1 ea $3,714.29 ($2,394)Total Annual Costs $46,000

Energy Costs Qty Unit Base Cost Present Value

Fuel Oil 1 - 25 4,458 gallon $3.69 $497,392Wood Pellets 1 - 25 ton $415.84 $0Electricity 1 - 25 kWh $0.113 $0

Total Energy Costs $497,000

$651,000

0

0

0

0

Present Worth

Years

0

Years

00

September 23, 2014

Year

000

000

Page 2




Basis




Boiler Room AdditionDemo existing wall 256 sqft $30.00 $7,680Construct new wall 224 sqft $80.00 $17,920Relocate door 1 ea $375.00 $375

Pellet Storage SystemConcrete foundation 1 ls $5,000.00 $5,000Pellet silo 7 ton 1 ls $10,000.00 $10,000Feed auger installation 80 lnft $11.00 $880Cut and patch exterior wall 1 ea $500.00 $500

Heating SystemPellet boiler 191 MBH 2 ls $25,000.00 $50,000Primary piping to accumulator tank 2 ls $1,200.00 $2,400Primary pump 2 ea $1,500.00 $3,000Replace expansion tank 1 ea $1,000.00 $1,000Accumulator tank 1 ea $5,000.00 $5,000Relocate piping conflicts 1 ea $1,000.00 $1,000Connection to exist heating piping 2 ea $1,500.00 $3,000Connect flue to exist chimney 2 LS $700.00 $1,400

ElectricalRelocate storage room light switch 1 ea $500.00 $500Reconnect exist circuit to boiler 1 ea $750.00 $750Boiler and primary pump circuits from Mezzanine 3 ea $2,000.00 $6,000

CloseoutStartup 1 LS $1,500.00 $1,500Commissioning 2 LS $750.00 $1,500

ContingenciesEstimating contingency 15% $17,911Overhead & profit 30% $41,195Design fees 15% $26,777Project management 15% $30,793


0000

September 23, 2014

Year

0

00

0

0

00

0

00

0

0

0

0

000

0

0

0

Page 3




September 23, 2014



Weekly Heating Plant Observation 45 min/wk 1 - 25 39 hrs $50.00 $38,771Wood Boiler

Maintenance training 0 - 0 2 ea $2,500.00 $5,000Pellet Boiler Maintenance - Small Capacity

Parts Allowance, each 1 - 25 2 boilers $150.00 $5,965Monthly, each 1.25 hrs/mo/blr 1 - 25 30 hrs $50.00 $29,824Annual maintenance 8 hrs/yr/blr 1 - 25 16 hrs $110.00 $34,993

Boiler Replacement 20 - 20 2 ea $25,000.00 $35,071Boiler salvage value 25 - 25 -2 ea $18,750.00 ($24,173)

Total Annual Costs $125,000


Fuel Oil 1 - 25 gallon $3.69 $0Wood Pellets 1 - 25 40 ton $415.84 $373,853Electricity 1 - 25 kWh $0.113 $0


$735,000

Years

Present Worth

Years

Page 4



Option 3: Electric Boiler

Basis




DemolitionRemove chimney, patch roof 1 ea $6,000.00 $6,000Remove fuel oil piping to/in boiler room 1 LS $250.00 $250

Heating SystemElectric boiler 90 kW 1 ls $12,000.00 $12,000Connection to exist heating piping 2 ea $750.00 $1,500

ElectricalUpgrade Electric Service

Upgrade AEL&P service 1 ls $15,000.00 $15,000Upgrade bldg service 1 ls $27,054.85 $27,0553-phase power to boiler 1 ls $5,000.00 $5,000

CloseoutStartup 1 LS $1,000.00 $1,000Commissioning 1 LS $1,000.00 $1,000

ContingenciesEstimating contingency 15% $10,320.73Overhead & profit 30% $23,737.67Design fees 15% $15,429.49Project management 15% $17,743.91




Weekly Heating Plant Observation 10 min/wk 1 - 25 9 hrs $50.00 $8,616Electric Boiler Maintenance

Parts Allowance, each 1 - 25 1 LS $75.00 $1,491Monthly, each 0.5 hours/month 1 - 25 6 hrs $50.00 $5,965

Annual, each 4 hours/year 1 - 25 4 hrs $50.00 $3,97710-year Maintenance 10 - 10 8 hrs $50.00 $33210-year Maintenance 20 - 20 8 hrs $50.00 $281

Total Annual Costs $21,000


Fuel Oil 1 - 25 gallon $3.69 $0Wood Pellets 1 - 25 ton $415.84 $0Electricity 1 - 25 137,141 kWh $0.123 $331,223


$488,000

00

00

September 23, 2014

Year

Present Worth

00

00

0

00

Years

Years

00

Page 5

Alaska Energy Engineering LLC Life Cycle Cost Analysis25200 Amalga Harbor Road Tel/Fax: 907.789.1226

Juneau, Alaska 99801 [email protected]


Sizing and Energy Analysis

Building LoadsHeating Design Load, MBH Fuel, gals Efficiency kBTU/gal Energy, kBTU

288 4,720 68% 138.5 444,530

Option 1: Fuel Oil BoilerSizing Analysis

Boilers Boiler Design Load, MBH Factor Boiler MBHB-1 288 117% 336

Energy AnalysisFuel Oil Boilers Load, kBTU % Load Net, kBTU Efficiency kBTU/gal Fuel, gals

444,530 100% 444,530 72% 138.5 4,458

Option 2: Wood Pellet BoilerSizing Analysis Boiler Design Load, MBH Factor Boiler MBH

Boilers B-1 288 66% 191B-2 288 66% 191Total 133% 382

Energy Analysis Load, kBTU % Load Net, kBTU Efficiency kBTU/ton Pellets, tonsWood Pellet Boiler 444,530 100% 444,530 72% 15,560 39.7

Option 3: Electric BoilerSizing Analysis Boiler Design Load, MBH Factor Boiler MBH Boiler kW

Boilers B-1 288 107% 307 90

Energy Analysis Load, kBTU % Load Net, kBTU Efficiency kBtu/kWh kWhElectric Boiler 444,530 100% 444,530 95% 3.412 137,141

September 23, 2014

Page 6


Appendix B

Layout Drawings

M-1

M-2

Documents

Zach Gordon Heating System Life Cycle Cost Analysis