Notice: The Department of Air Force (Air Force) requests an expression of interest from industry participants that are experienced and capable of financing, constructing, operating, and maintaining a geothermal energy power generation facility. The Air Force seeks information regarding potential development of the facility and associated information parties would require in order for parties to fully analyze and make proposals for the opportunity, as well as questions and concerns that market participants might have about the project. Please see the list of questions below. The Air Force will consider other approaches to this business opportunity and respondents are encouraged to submit alternative business models, including other energy sources, to improve the return to the Air Force. Please submit any questions or additional information you would like included in a solicitation, should this project proceed. Background: In early 2012, the Air Force completed a preliminary study on the Utah Test and Training Range's (UTTR) south western edge within the proximity of the Wendover, NV region. The primary focus of the study was to identify geothermal characteristics within the region and to identify potential sites which may merit further exploration for potential geothermal energy production. The study was conducted with the participation of Idaho National Laboratory (INL), University of Utah (U of U), the Energy and Geoscience Institute (EGI), and the Utah Geological Survey (UGS). This study resulted in the identification of an area on the south western edge of the UTTR and near the Nevada and Utah border as a target area for geothermal resource discovery and geothermal energy production. If a favorable geothermal resource is validated and commercial viability supports the development of a facility, it is anticipated that the land use requirement will be refined to a project area sufficient to support a geothermal production facility. The Air Force may enter into a long-term Enhanced Use Lease (EUL) for a period of up to 50 years in a landlord/tenant relationship under authority of 10 USC § 2667, which authorizes the Secretary of the Air Force to out-lease non-excess real property. The Air Force must receive, in return for the land lease, an amount of rent equal or exceeding the Fair Market Value (FMV) of the leasehold interest. Additionally, the Air Force has received both fixed and/or percentage rents in the form of cash or in-kind goods or services. Expression of Interest Desired: The Air Force is interested in gauging the interest of qualified developers to privately explore, finance, construct, manage and maintain a geothermal energy production facility and to provide a return to the Air Force of cash or in-kind consideration equal to or greater than the FMV of the asset. Please include in your response to this Request for Information (RFI) detailed answers to the following requirements: 1. Provide information on your entity's experience in exploring, developing and producing a geothermal production facility and the experience and training of the primary personnel that might be involved. 2. Although the Air Force will share the geothermal study conducted in 2012 to potential lessees, further exploration may be required to validate resource availability and refine the most advantageous area for well drilling. Some of the factors that may require further study include resource temperature, depth, quality, size, and longevity. Describe the exploration activities and methods that might be used. 3. Any operations requiring personnel to be located on site will need to be scheduled with the appropriate UTTR authority. Provide an estimate of working days within the calendar year you anticipate personnel located on site and how this might impact business operations? 4. Due to the proximity of Air Force operations, spectral usage on the site can potentially become a significant source of encroachment to UTTR activities. Describe the types of spectral requirements you might have, in particular, with regard to remote controllers and frequencies. 5. There currently is no infrastructure in the immediate area for electric power transmission. Not only would the lessee be responsible for installation of transmission lines, the lessee will also need to arrange all utility interconnection agreements. Provide your anticipated method. 6. The Air Force cannot provide a Power Purchase Agreement (PPA) commitment as part of this EUL project. Therefore, the developer would need to obtain off take agreements from utility providers or other entities. How would you approach this from a business perspective and do you view this as a major obstacle? 7. Provide information on your marketing plan and timeline to (1) achieve profitable status, and (2) achieve your ultimate geothermal production level. 8. The State has several energy related incentives available for potential developers of alternative energy. For example, the Energy Infrastructure Authority issues tax free revenue bonds for "energy delivery projects". In addition, State energy tax incentives are available to include the Utah Alternative Energy Development Incentive providing a fixed post-performance credit of 75% of all newly generated state revenues for 20 years, the Renewable Energy Systems Tax Credit (Production Tax Credit) provides a $0.0035/kilowatt hour credit for a project's first four years, and Alternate Energy Sales and Use Tax Exemptions exists for purchases made by a facility that is an "alternative energy electricity production facility, that is one megawatt or greater. Provide information on if and/or how you anticipate using these and or other public-private funding sources to support the project. 9. Describe your suggested method of calculating, and the timeline of lease payments and/or other in-kind consideration that provides the Air Force with the greatest return. 10. Provide your total Air Force estimated annual lease payment projections. 11. Hill AFB desires to support and establish a proven, convenient method of providing geothermal energy through execution of this project. Describe concerns, challenges or issues in developing and managing the proposed geothermal project. 12. Include any other information that might help the Air Force understand and evaluate your interest and capabilities in this potential business opportunity. Handling and Processing: All responses received will be considered. Under this RFI or under future issuances, the Air Force may terminate or continue to pursue this topic. The Air Force will use competition to pursue any leases, agreements, etc. that may be issued as a result of this endeavor. All responses received may be held for an extended period of time or destroyed; they will not be returned to the originator. Please mark all information that you desire or require to be handled as proprietary or as confidential business information and it will be safeguarded in accordance with applicable Government regulations. This RFI is for planning purposes and does not constitute a commitment, implied or otherwise, that a procurement action will be issued. No entitlement to payment by the Government of direct or indirect costs will arise as a result of the submission of information. The Government shall not be liable for any consequential damages a submitter may suffer for any improperly identified proprietary information. General Due Date: Responses to this RFI are preferred via regular USPS mail with an additional copy by email and should be received no later than July 10, 2013. POC: Erik Castle Email:
[email protected] Telephone (801) 775-6977 Mailing Address: Enhanced Use Lease (EUL) Office 5713 Lahm Lane, Bldg 593, Room 117 Hill AFB, Utah 84056