2014-13710. Denali Commission Fiscal Year 2014 Draft Work Plan

AGENCY:

Denali Commission.

ACTION:

Notice.

SUMMARY:

The Denali Commission (Commission) is an independent federal agency based on an innovative federal-state partnership designed to provide critical utilities, infrastructure and support for economic development and training in Alaska by delivering federal services in the most cost-effective manner possible. The Commission was created in 1998 with passage of the October 21, 1998 Denali Commission Act (Act) (Title III of Public Law 105-277, 42 U.S.C. 3121). The Act requires that the Commission develop proposed work plans for future spending and that the annual Work Plan be published in the Federal Register, providing an opportunity for a 30-day period of public review and written comment. This Federal Register notice serves to announce the 30-day opportunity for public comment on the Denali Commission Draft Work Plan for Federal Fiscal Year 2014 (FY 2014).

DATES:

Comments and related material to be received by July 14, 2014.

ADDRESSES:

Submit comments to the Denali Commission, Attention: Sabrina Hoppas, 510 L Street, Suite 410, Anchorage, AK 99501.

FOR FURTHER INFORMATION CONTACT:

Ms. Sabrina Hoppas, Denali Commission, 510 L Street, Suite 410, Anchorage, AK 99501. Telephone: [phone]. Email: [e-mail].

Background

The Denali Commission (Commission) is an independent federal agency based on an innovative federal-state partnership designed to provide critical utilities, infrastructure and support for economic development and training in Alaska by delivering federal services in the most cost-effective manner possible. The Commission was created in 1998 with passage of the October 21, 1998, Denali Commission Act (Act) (Title III of Public Law 105-277, 42 U.S.C. 3121).

The Commission's mission is to partner with tribal, federal, state, and local governments and collaborate with all Alaskans to improve the effectiveness and efficiency of government services, to develop a well-trained labor force employed in a diversified and sustainable economy, and to build and ensure the operation and maintenance of Alaska's basic infrastructure.

By creating the Commission, Congress mandated that all parties involved partner together to find new and innovative solutions to the unique infrastructure and economic development challenges in America's most remote communities.

Pursuant to the Act, the Commission determines its own basic operating principles and funding criteria on an annual federal fiscal year (October 1 to September 30) basis. The Commission outlines these priorities and funding recommendations in an annual Work Plan. The Work Plan is adopted on an annual basis in the following manner, which occurs sequentially as listed:

• Project proposals are solicited from local government and other entities.
• Commissioners forward a draft version of the Work Plan to the Federal Co-Chair.
• The Federal Co-Chair approves the draft Work Plan for publication in the Federal Register providing an opportunity for a 30-day period of public review and written comment. During this time, the draft Work Plan is also disseminated widely to Commission program partners including, but not limited to, the Bureau of Indian Affairs (BIA), the Economic Development Administration (EDA), and the United States Department of Agriculture—Rural Development (USDA-RD).
• Public comment concludes and Commission staff provides the Federal Co-Chair with a summary of public comment and recommendations, if any, associated with the draft Work Plan.
• If no revisions are made to the draft, the Federal Co-Chair provides notice of approval of the Work Plan to the Commissioners, and forwards the Work Plan to the Secretary of Commerce for approval; or, if there are revisions the Federal Co-Chair provides notice of modifications to the Commissioners for their consideration and approval, and upon receipt of approval from Commissioners, forwards the Work Plan to the Secretary of Commerce for approval.
• The Secretary of Commerce approves the Work Plan.
• The Federal Co-Chair then approves grants and contracts based upon the approved Work Plan.

FY 2014 Appropriations Summary

The Commission has historically received federal funding from several sources. These fund sources are governed by the following general principles:

• In FY 2014 no project specific direction was provided by Congress.
• The Energy and Water Appropriation (i.e. discretionary funding) is eligible for use in all programs.
• Certain appropriations are restricted in their usage. Where restrictions apply, the funds may be used only for specific program purposes.
• Final appropriation funds received may be reduced due to Congressional action, rescissions by the Office of Management and Budget, and other federal agency action. Final program available figures may not be provided until later in FY 2014.
• All Energy and Water Appropriation funds, including operating funds, designated as “up to” may be reassigned to other programs, if they are not fully expended in a program component area or a specific project.
• Total FY 2014 Budgetary Resources provided:

These are the figures that appear in the rows entitled “FY 2014 Appropriation” and are the original appropriations amounts which do not include Commission operating funds. These funds are identified by their source name (i.e., Energy and Water Appropriation, TAPL, etc.). The grand total for all appropriations appears at the end of the FY 2014 Funding Table.

• Total FY 2014 Program Available Funding:

These are the figures that appear in the rows entitled “FY 2014 Appropriations—Program Available” and are the amounts of funding available for program(s) activities after Commission operating funds have been deducted. The FY 2014 appropriations bill contains language that the Commission may utilize more than five percent for operating costs, Notwithstanding the limitations contained in section 306(g) of the Denali Commission Act of 1998.

However only, five percent of Trans Alaska Pipeline Liability (TAPL) Trust Funds are used for agency operating purposes. The grand total for all program available funds appears at the end of the FY 2014 Funding Table.

• Program Funding:

These are the figures that appear in the rows entitled with the specific Program and Sub-Program area, and are the amounts of funding the Draft FY 2014 Work Plan recommends, within each program fund source for program components.

• Subtotal of Program Funding:

These are the figures that appear in rows entitled “subtotal” and are the subtotals of all program funding within a given fund source. The subtotal must always equal the Total FY 2014 Program Available Funding.

Denali Commission FY 2014 funding table	Totals
FY 2014 Energy & Water Appropriation	$10,000,000.
FY 2014 Energy & Water Appropriation—Operating Funds	$3,000,000.
FY 2014 Energy & Water Appropriation—Program Available	$7,000,000.
Energy:
• Bulk Fuel Tank Replacements (to be funded in full with TAPL funding)	$0.
• Rural Power System Upgrades*	$2,448,000.
Total Energy Projects	$2,448,000.
Initiatives, Programs, Projects:
• Sanitation Energy Efficiency	Up to $2,148,000.
• START Program Energy Efficiency Upgrades	Up to $1,250,000.
• Additional Community Scale Energy Efficiency	Up to $854,000.
Community Energy Efficiency Total	Up to $4,252,000.
• Pre-Development Program	Up to $300,000.
Total Initiative, Programs, Projects	Up to $4,552,000.
Sub-total, FY 2014 Energy & Water—Program Available	Not to exceed $7,000,000.
FY 2014 TAPL Trust	$4,000,000.
FY 2014 TAPL—Program Available (less 5% operating funds)	$3,800,000.
Bulk Fuel Planning, Design & Construction	$3,800,000.
Sub-total	$3,800,000.
Total FY 2014 Program Available	$10,800,000.
* Funding for the four initiatives, programs and projects are listed as an upper amount and it is possible that several of these initiatives may require less funds than listed in the table. Under these circumstances, the remaining Energy and Water appropriations will be used for Rural Power System Upgrades.

FY 2014 Program Details & General Information

The following section provides narrative discussion for each of the Commission Programs identified for funding in the FY 2014 funding table above.

Energy Program

Basic Rural Energy Infrastructure

The Energy Program is the Commission's original program and focuses on bulk fuel facilities and rural power system upgrades/power generation (RPSU) across rural Alaska. About 94% of electricity in rural communities is produced by diesel generators and about half of the fuel storage in most villages is used for these power plants. The majority of the Commission's work in the energy program is carried out by two of our long-standing partners: Alaska Energy Authority (AEA), an agency of the State of Alaska, and the Alaska Village Electric Cooperative (AVEC), a non-profit member Organization serving 56 communities.

Since inception of the agency, the Commission has partnered with AEA on rural energy investments, and shortly thereafter, AVEC also became a program partner to address deficiencies in fuel storage and generation in the cooperative's communities. In recent years, a single combined list of energy projects has been compiled for both bulk fuel and RPSU programs. AEA maintains documents on their Web site that identify the universe of need for each of the programs and provides project status updates (see following links). http://www.akenergyauthority.org/​PDF%20files/​BFUStatusList_​Sept2013.pdf http://www.akenergyauthority.org/​PDF%20files/​RPSUStatusListSept2013.pdf

In addition, the Commission has been exploring opportunities to identify and reduce the consumption of energy in rural communities. Energy efficiency measures can be demonstrated to reduce the use of fossil fuels as well as reducing costs to residents and users, which can contribute to enhanced community services. The Alaska Native Tribal Health Consortium (ANTHC) has been a long-standing program partner on rural clinics and sanitation systems. ANTHC has developed a rural energy initiative to address the high cost of energy associated with clinics and sanitation systems. Previously, the Commission has invested in some clinic energy efficiency improvements with ANTHC. In addition, the Commission for the past two years has collaborated with the US Department of Energy—Office of Indian Energy Policy and Programs on a Strategic Technical Assistance and Response Team (START) program. The START program is a community-driven model to identify local solutions for the local challenges with the high cost of energy.

FY 2014 Project Selection Process

Bulk Fuel and RPSU Projects

The legacy projects prioritized for FY 2014 funding are listed below within the two energy program themes: bulk fuel and RPSU. The selected projects in the table below exceed FY 2014 funding levels (both TAPL and Energy and Water Appropriation), with the understanding that projects may proceed out of order due to factors such as the extended period of time between project selections, draft Work Plan development, and grant execution; match funding availability; and due diligence requirements.

Beginning in FY 2012, Energy and Water Appropriations were subject to a statutory cost share requirement for construction activities of 20% for distressed communities and 50% for non-distressed communities. That cost share match requirement has since been applied to all energy program funding sources. All projects prioritized for FY 2014 funding, with the exception of Shungnak bulk fuel upgrade, are in distressed communities and will include at least a 20% project cost share match.

In FY 2014, the Commission, AEA, and AVEC will investigate opportunities with existing bulk fuel storage facilities to refurbish the infrastructure resulting in code compliance and significant extension of the life of the facilities at a reduced cost versus complete replacement. The Commission provided funding to AEA to update the statewide bulk fuel inventory assessment, which will help inform all parties of the potential for refurbishment of facilities. The updated assessment is scheduled to be completed by the end of FY 2015. The refurbishment approach was considered for the AVEC projects listed in the bulk fuel project table.

Bulk fuel projects	Total project cost	Cost share	DC funding	Program partner
Pilot Station AVEC Tanks	$4,621,000	$924,200	$3,696,800	AVEC.
Pilot Station Community Tanks	4,456,000	891,200	3,564,800	AVEC.
Chalkyitsik	2,600,000	520,000	2,080,000	AEA.
Togiak AVEC Tanks	4,656,000	931,200	3,724,800	AVEC.
Togiak Community Tanks	6,045,000	1,209,000	4,836,000	AVEC.
Beaver	2,300,000	460,000	1,840,000	AEA.
Shungnak	1,100,000	550,000	550,000	AVEC.
Venetie	2,100,000	420,000	1,680,000	AEA.
RPSU projects **	Total project cost	Cost share	DC funding	Program partner
Pilot Station Relocation	1,556,000	311,200	1,244,800	AVEC.
Perryville	3,200,000	640,000	2,560,000	AEA.
Togiak	7,409,000	1,481,800	5,927,000	AVEC.
Koliganek	2,900,000	580,000	2,320,000	AEA.
** The Commission expects to receive prior year USDA Rural Utilities Service funds in FY 2014 which will be used to address a portion of the Perryville RPSU project. The balance of funding necessary to complete the Perryville project will be provided from FY 2014 Energy and Water appropriations and some prior year funds from energy projects that were completed under budget and therefore have a surplus of funds.

Project management	Total project cost	Cost share	DC funding	Program partner
AEA/AVEC/ANTHC Project Management	$10,800,000	N/A	$932,688 ***	AEA/AVEC/ANTHC.
*** Project management costs have been estimated pending final project selection.

Initiatives, Programs, Projects

Community Energy Efficiency

In FY 2014, the Commission will collaborate with federal, state, and local agencies to coordinate and provide funding for community energy efficiency projects. Projects for the FY 2014 year will include completion of energy efficiency improvements previously determined by energy audits in 39 communities, energy audits for an additional 39 communities with circulating water systems, as well as, funding for energy efficiency improvements in START round one which includes five communities. Specific types of energy efficiency activities that will be carried out in funded communities will include, but are not limited to, replacement of old inefficient circulating pumps, lighting changes, installation of occupancy sensors for lights, weather sealing work for doors and windows, insulation work, control upgrades for thermostats and heating and ventilation systems, and education of building operators to decrease building interior set points.

Pre-Development Program Investment

The Pre-Development program has been a historic investment of the Commission since 2007, when the Commission partnered with the Alaska Mental Health Trust Authority, the Rasmuson Foundation, and the Foraker Group to “stand up” the program. The Pre- Development program provides technical assistance to prospective Commission grantees on capital development projects. In 2010 the Mat-Su Health Foundation joined as a partner to the Pre-Development program. Further information about the program can be obtained at the following link: http://www.forakergroup.org/​index.cfm/​Shared-Services/​Pre-Development.

Discussion on Future Commission Investments

The agency is exploring what is our role in a time of decreasing Federal and State of Alaska budgets and therefore limited funds for pressing rural Alaska needs. It is the intent of the Commissioners to carry out a public dialogue on what are the core areas of need and how best can Commission investments address these needs while complementing the work of many other State and Federal agencies operating in rural Alaska. We welcome comments about this question, but more importantly, we are alerting the public and our current program partners that we will be raising this question in the future.

Joel Neimeyer,

Federal Co-Chair.