Writing a recommendation letter for PhD advisor
Because you're being asked for a letter of recommendation for an award given to a faculty member for good mentoring, this letter is going to look very different from the kinds of letters of recommendation written for students applying to graduate programs, faculty applicants, etc.  

For your letter, the goal should be to show that this faculty member has been a good mentor to you and other students.  You can best make the case for this by describing in detail how the faculty member has mentored you.  How does he or she interact with you?  What do they say when you're struggling with something in your research?   Do they ask you to discuss your long term goals as well as your short term plans?