HomeMy WebLinkAboutElva Feasibility Study Findings and Recommendations 1981reel dri~ · (.1
f,nJi CLftd
AI.,ASKA t•O\VI~U AIT'l'IIOUI'I'Y
LAKE ELVA HYDROELECTRIC PROJECT
FEASIBILITY STUDY
FINDINGS AND RECOMMENDATION
April 30, 1981
A preliminary assessment of the Lake Elva Hydroelectric Project was
initially made and presented in the "Bristol Bay Energy and Electric Power
Potential" study conducted by Robert W. Retherford Associates for the Alaska
Power Administration in 1979. This study prompted a "Reconnaissance Study of
the Lake Elva and Other Hydroelectric Power Potentials in the Dillingham Area"
which was conducted for the Alaska Power Authority by Robert W. Retherford
Associates, also in 1979. For the community of Dillingham, the reconnaissance
study indicated that the Lake Elva Project was the most cost effective option,
although the cost of Lake Elva power was projected to be slightly higher than
would result from development of a significantly larger regional project on
the Tazimina River.
The ensuing feasibility study was prompted by the reconnaissance study
recommendation and from strong local support for the Lake Elva Project. Fund-
ing for this feasibility study was made available to the Power Authority in
July of 1980 and R. W. Beck and Associates was the engineering firm selected
to conduct the investigations.
If developed, the Lake Elva Project would feed into the Nushagak Electric
Cooperative distribution system which currently supplies diesel power to the
communities of Aleknagik and Dillingham. The 1980 load for the Cooperative was
approximately 7,632,000 KWH with a peak demand of 1,452 KW.
PROJECT DESCRIPTION:
The Project site is located in Southwest Alaska within the Wood-Tikchik
State Park approximately 45 air miles NNW of Dillingham, and is situated
between Little Togiak Lake on the south and Amakuk Arm of Lake Nerka on the
north. Hydrologic investigations conducted for the project indicate that the
basin yields an average of 39,800 acre-feet (55 cfs) of runoff in an average
year.
The Project would include a 120-foot high rockfill dam located about 8,500
feet downstream from the outlet of the existing Lake Elva; a reservoir which
would provide 26,800 acre-feet of active storage; a 6,700-foot long power conduit
comprised primarily of buried concrete cylinder pipe; a steel-framed powerhouse
containing two hot'izontal shaft Crossflow-type turbines each capable of delivering
750 KW under a rated net head of 280 feet; a 10-mile temporary construction road
leading from the north end of Lake Aleknagik to the dam and powerhouse sites;
about 1.5 miles of permanent site access roads; and approximately 33 miles of
new 34.5-KV transmission line extending from the Project to the Village of
Aleknagik, plus upgrading of approximately 22 miles of existing single-phase
transmission line which extends from Aleknagik to Dillingham.
The 1,500 KW Project, as planned, would provide dependable capacity of 1,200
KW. It would be capable of delivering 7,961,000 kwh of energy in an average
year, and 7,769,000 kwh of firm annual energy, to the load center in Dillingham.
FINDINGS:
The Lake Elva Hydroelectric Project has been found to be feasible from a
technical and environmental standpoint and could provide a reliable source of
electricity for Nushagak Electric Cooperative, Inc. by early 1985. Field in-
vestigations and studies revealed nothing unusual about the project site with
respect to hydrological, geotechnical and other technical aspects. The project
design concept is straightforward and typical of designs for similar size pro-
jects of this type.
Environmental concerns identified in the study include the impacts of flow
interruptions, flow regime changes, and the loss of flow over a portion of Elva
Creek. These impacts could alter groundwater flows to the Lake Nerka beaches
where salmon spawn and could change water quality, most notably temperature and
possibly cadmium concentrations. Other concerns include the impacts of access
road and transmission line corridors upon anadromous waterways, accessability
to prime moose habitat, and visual resources.
The total estimated construction cost of the project is high, primarily due
to its remote location. The estimated total construction cost based on January
1981 price levels is $29,449,000. According to Power Authority criteria for
conducting economic analyses using discounted life cycle costs, the Project is
equal in cost to the alternative of continued expansion of NEC's diesel electric
generation system. In other words, the benefit-to-cost ratio is 1 to 1.
The Project cannot be financed without state assistance. The Governor's
financing program contained in HB 310 permits the project to be financed while
minimizing state financial assistance. Of the three state assisted financing
plans evaluated, a three percent loan for a 35-year term would provide the
lowest cost energy to consumers, but the greatest cost to the State.
RECOMMENDATIONS:
If the Lake Elva Hydroelectric Project is to be pursued, the next step
would be preparation and submittal of a license application, followed by
continued environmental studies and project design. Construction could begin
immediately after receipt of the license which can be anticipated not earlier
than July 1982.
The ke Elva Project would provide 74 percent of the projected Dillingham
electrical energy demand in 1985 and a decreasing proportion thereafter. The
project was found to be marginally feasible with the same life cycle cost as
continued use of diesel, utilizing established Power Authority economic criteria.
These criteria include an assumption of 3.5 percent diesel fuel escalation over
and above the rate of inflation for twenty years. The Lake Elva Project does
have the benefit, however, of producing inflation free renewable energy so
that in the event fossil fuels escalate at higher rates than those assumed in
the economic analysis, the cost of Lake Elva power would be less than continued
diesel generation. The project also has the benefit of providing power on line
three or more years earlier than the larger regional Tazimina River Hydroelectric
Project.
The Tazimina Project has the potential of fully satisfying the electrical
~nergy requirements of fifteen communities within the Bristol Bay Region, in-
cluding Dillingham for at least 20 years. Furthermore, the Tazimina Project
could possibly produce electrical energy at a lower unit cost than Lake Elva,
primarily due to better site conditions and economies of scale. However, the
Tazimina Project would not come on line until early 1988, provided no serious
environmental problems are encountered. The Tazimina Project has not had the
benefit of a detailed feasibility study as has the Lake Elva Project, so there
is some degree of uncertainty as to its technical, economic and environmental
feasibility. There appears to be a high degree of local support for both pro-
jects.
Beginning in June 1981, the Power Authority will conduct a feasibility
study of the Tazimina Hydroelectric Project, and an interim assessment of the
project's feasibility will be available in February, 1982. In the event the
Tazirnina Project does not prove feasible, one year would be lost in advancing
the Lake Elva Project if licensing is not pursued immediately.
It is therefore the recommendation of the Power Authority that a license
application for the Lake Elva Project be prepared and submitted to the Federal
Energy Regulatory Commission. When the interim assessment of Tazimina's fea-
sibility becomes available in February of 1982, a decision should be made at
that time to proceed with final design and construction of the Lake Elva Project
or instead to turn to Tazirnina hydroelectric development or another more cost
effective project.
~?.~~
Eric P. Yould
Executive Director
LAKE ELVA
PLM OF FINANCE
Prepared by the
Alaska Power Authority
April, 1981
.....
A plan of finance is prepared for any new power project identified in a
feasibility study as the most feasible alternative for development. The
purpose of a plan of finance is to present various alternatives available
to finance the power project and to identify the most appropriate means to
achieve the lowest cost electric power for consumers while minimizing the
amount of state assistance required.
The Lake Elva project is marginally ible based upon a life cycle cost
present worth analysis as compared to the base case plan of all diesel
generation. The alternative means available to finance the projects are
low interest loans from the Rural Electrification Administration (REA),
Power Authority tax exempt revenue bonds, and state financing assistance in
some form. REA loan funds may not be available due to federal budget
reductions which may seriously impact the REA program. The Power Authority,
under the current financing program, could not finance the project since
the credit of the local community is not sufficient to provide security
to bond purchasers of its capacity to repay the large debt. Therefore, state
assistance in some form will be necessary to finance the project.
Table I presents the annual costs of the Lake Elva project under 35 year
levelized debt service for interest rates of 8.5% and 10.0%. Cost of
energy for the Lake Elva plan is reflected in Table II. The analysis is
based upon hypothetical financing conditions including general inflation,
8.5% interest rate, and 3.5% escalation of fuel prices above the general
inflation rate for 20 years. Cost of energy for the base case plan of con-
tinued all diesel generation is reflected in Table III which is based on
the same factors.
The 8. interest rate used herein is the standard rate currently used by
the Power Authority to make its cost of power analysis of projects. Since
the project can not be financed without state assistance, the cost of
energy was also analyzed based upon a financing interest rate of the previous
years average from municipal bond yield rates reported in the 30 year
revenue index of the Weekly Bond Buyer, which is currently approximately
10%. ble IV presents the cost of energy in ¢/KWH.
Lake Elva Lake Elva
and Diesel and Diesel All Diesel
Year 1 35 r 8. r 8.5%/20 year
1985 54.3 45.3 20.4
1990 52.5 45.3 30.7
1995 61.1 55.0 51.7
2000 73.7 72.3 80. 1
State assistance employed to finance the project could be accomplished in
various ways, including direct grants, or equity investments, low interest
loans, and graduated interest loans, or with a combination of financing
measures as presented in HB 310. Three alternatives for state assistance
will be analyzed.
l. A state grant of 60% of the Total Construction Cost and Power Authority
revenue bond financing of 40% of the Cost at a rate estimated to be
ll% in the current market.
2. A state loan for a 35 year term at a subsidized interest rate of 3% on
the unpaid balance.
3. A state grant of $4,707,500 based upon $2,500 per capita for the 1656
residents of Dillingham and 227 residents of Aleknagik, revenue financing
at 10.5 of the remaining construction costs (improved interest rate
based upon the completion fund feature of HB 310 and the debt adjust-
ment funding of the project, which is also a characterization of HB
310), and an appropriation of $12,000,000 for a debt assistance loan
fund for the project.
FINANCING ALTERNATIVE l.
Total Construction Cost (l/81 Bid)
Grant (60% of TCC)
To be Financed
Escalation (7% per year)
Total Remaining Construction Cost
Interest During Construction (ll%)
Total Investment Cost
Financing Expenses
Reserve Fund
Total Capital Requirements
Annual Debt Service
Annual O&M, Administration, Insurance
and Interim Replacements
TOTAL ANNUAL COST
$29,499,000
17,699,400
$11,799,600
l ,498,400
$13,298,000
l ,732,000
$15,030,000
494,000
l ,976,000
$17,500,000
$ l ,976,000
331,000
$2,307,000
Table V presents the cost of energy for financing alternative l. The
present worth cost of the state assistance is the value of the grant which
is $17,699,400.
FINANCING ALTERNATIVE 2.
Total Construction Cost (l/81 Bid)
State Loan (3% for 35 years)
To Be Financed
$29,499,000
29,499,000
Interest During Construction and Construction Inflation
could be paid from investment earnings on the loan
amount.
Annual Debt Service
Annual O&M, Administration, Insurance and
Interim Replacements
TOTAL ANNUAL COST
$ l , 373,000
331,000
$ l ,704,000
Table VI presents the cost of energy for financing alternative 2. The
present worth of the state assistance is the present value of the dif-
ference between the annual debt service presented in Table IV and the
annual debt service for financing alternative 2 for the 35 years of debt
service repayment. The effective debt service in Table IV is the annual
debt service of $4,360,000 less the interest earnings on the reserve fund,
or $3,924,000. Therefore, the annual difference is $3,924,000-$1,373,000 =
$2,551,000. The present worth value at 10% of $2,551,000 of annual assistance
over 35 years discounted at 10% is $24,602,000.
FINANCING IVE 3.
Total Construction Cost (l/81 Bid)
Grant
To Be Financed
Escalation (7% per year)
Total Remaining Construction Cost
Interest During Construction (10.
Total Investment Cost
Financing Expenses
Reserve Fund
TOTAL CAPITAL REQUIREMENTS
Annual Debt Service
Annual O&M, Administration, Insurance, and
Interim Replacements
TOTAL ANNUAL COST
$29,499,000
4,707,500
'$24,701 '500
3,173,500
$27,965,000
3,535,000
$31,500,000
1,036,000
3,964,000
$36, soo-,ooo
3,964,000
331 ,000 -r 4,295,000
Table VII presents the cost of energy for financing alternative 3. The
present worth cost of state assistance for this alternative is the value of
the per capita grant, or $4,707,500. Table VIII illustrates the rate
impacts and funding provided by the debt assistance feature of the financing
program in HB 310. Each year a loan is made to the utility to lower the
cost of energy sold to utility consumers to the rate which would have been
charged for continuation of the present diesel generation. The loan interest
rate is the same as the revenue bond yield rate (assumed to be 10.5% in
this alternative), and principal and interest payments are deferred as
necessary to permit the utility and consumers to repay the debt assistance
loans when the benefits of the project are realized. Since the return to
the state is ultimately realized at market rates, the present value of the
assistance provided by this financing feature over the full term of this
loan is zero. The debt assistance fund must be capitalized at $12,000,000
for the project. This should be sufficient, together with assumed invest-
ment earnings of 1 to fund the annual debt assistance loans.
SUMMARY AND CONCLUSIONS
Summarized below is the estimated system cost of energy (¢/kwh) for various
years for the three state assisted financing options analyzed and the
estimated present value of the state assistance. This can be compared to
the previously summarized cost of energy examples wherein no state assistance
is provided.
Alternative Alternative 2 Alternative 3
Year 60% Grant 3% Loan HB 310
1985 29.1 25.0 20.4
1990 32.5 29.2 30.7
1995 44.2 41.4 51.7
2000 62.7 60.2 80.1
2004 87.1 34.8 116.0
Present Value
of state Assistance $17,699,400 $24,602,000 $4,707,500
In the early years of project operation, Alternative 3 provides lowest
system cost of energy and minimized the amount of state assistance. Alter-
natives 1 and 2 provide a higher cost of energy in the first 5 years of
project operation due to the particular terms of the respective financing
plans. In Alternative 1, the percentage of the total construction cost of
Lake Elva to be financed by a grant could be increased. In Alternative 2,
the state loan to finance construction could be made at lower interest
rates. Either of these scenarios, which would lower the cost of energy in
the early years, would also consequently increase the present value of the
state assistance.
A feature of Alternative 3 which is less attractive is that the local
consumers may not realize the benefits of the hydroelectric project until
beyond the 40th year of project operation, when all state debt assistance
loans are repaid. This time period for realizing the benefits would be
advanced in relation to the actual increases in the cost of diesel genera-
tion. Table VIII illustrates the relationship between the cost of energy
and the rate of repayment of the state debt assistance loans. If diesel
fuel costs escalate above 3. over the rate of general inflation for a
period in excess of 20 years, the state debt assistance loans would be
repaid more rapidly. Alternative 3 assumes that the cost of energy to be
charged consumers would be equivalent to the cost of energy with an all
diesel system. Table VIII shovJS that an all diesel system would generate
power cheaper than the system with Lake Elva for the first 13 years of Lake
Elva operation, therefore, annual state debt assistance loans would be
necessary. In succeeding years, the higher cost of energy associated ~<lith
an all diesel system v10uld be charged to customers in order to achieve a
revenue return to repay the state debt assistance loans.
The analysis was based upon nominal dollars which illustrate the impacts of
a general inflation rate of per annum and a fuel escalation rate of 3.
for only 20 years. If the cost of energy in future years is discounted at n the assumed rate of inflation, the real cost of energy in the market
area of the project would actually decrease for Alternatives 1 and 2, and
only increases gradually due to the rising costs of di fuel and the
repayment of the debt assistance loans in Alternative 3. The discounted
cost of energy would be:
Alternative Alternative 2 Alternative 3
Year 60% Grant 3;; Loan HB 31
1985 29.1 25.0 20.4
1990 23.2 20.8 21.9
1995 22.5 21.0 26.3
2000 22.7 21.8 .0
2004 24. l 23.4 32. 1
In conclusion, Alternative 2 provides the lowest cost energy, but with the
greatest state assistance Alternative 3 minimizes sta assistance but
results in appreciably higher energy costs. The reason the project does
not provide significant benefi to the market area is that the economic
feasibility of the project based upon specific assumptions is marginal in
that the benefit to cost ratio of the system with Lake Elva compared to an
all diesel system is 1 .0. The benefits of lower cost energy in future
years from the project are largely based upon the state assistance or
subsidy provided with each financing alternative. All other benefits
derived from the renewable resource generation are provided by the infla
tion nature of the investment of the project.
AI.~ASiiA t•O\VI~U AIT'I'IIOI:I'I'Y
CAPITAL COSTS:
Interest Rates
TABLE I
LAKE ELVA PROJECT
PROJECT ANNUAL COSTS
COST OF POWER ANALYSIS
Total Construction Cost ...................... .
(January 1981 Bid)
calation (7% per year) .................... .
Total Construction Cost ..................... ..
(January 1983 Bid)
Net Interest during Construction ............ .
Total Investment Cost ........................ .
Financing Expenses (2. of TCR) ........... .
Reserve Fund (One Year 1 s Debt
Service) ................................. .
TOTAL CAPITAL REQUIREMENTS (TCR) ............. .
ANNUAL COSTS: ( 1)
Net Debt Service ............................. .
Operating Costs:
Operation and Maintenance ................... .
Administrative and General
(34% of O&M) ............................. .
Insurance (0.1 of TCR) .................. .
Interim Replacements (0.14% of TCR) ........ .
TOTAL ANNUAL COST ........................... .
(1) -Annual Costs for Operation in 1985.
8.5%
$29,449,000
3, 701,000
$33,150,000
_2, 978 !000
$36, 128,000
1,021,000
3,683,000
$40,832,000
$ 3,683,000
159,000
54,000
61,000
57,000
$ 4,014,000
10.0%
$29,449,000
$33,150,000
3,503,000
$36,653,000
1,050,000
4,360,000
$42,063,000
$ 4,360,000
159,000
54,000
62,000
59,000
$ 4,694,000
i*
LE II
Tot a 1
Annual Total Project Diesel Diesel Total
Generation Annual Debt Interest Project Generation Diesel Fuel Annual Cost of
ired Sales Service Earnings O&M Cost Required O&M Cost Cost Cost Power
Year (Mwh) (Mwh) ($000) ($000) ($000) (Mwh) __ ( $000) ($000) ($000) (¢/kwh)
1985 10,692 9,844 3,683 (313) 331 2,731 384 371 4,456 45.3
1986 11,219 10,324 3,683 (313) 354 3,258 410 490 4,624 44.8
1987 11,761 10,818 3,683 ( 313) 379 3,800 440 631 4,820 44.6
1988 12,317 11,323 3,683 ( 313) 405 4,356 470 799 5,044 44.6
1989 12,888 11,840 3,683 (313) 434 4,927 503 999 5,306 44.8
1990 13,472 12,368 3,683 ( 313) 464 5,511 538 1,235 5,607 45.3
1991 13,982 12,834 3,683 (313) 497 6,021 828 1,491 6,186 48.2
1992 14,487 13,293 3,683 ( 313) 532 6,526 886 1,786 6,574 49.5
1993 14,989 13,750 3,683 (313) 569 7,028 948 2' 125 7,012 51.0
1994 15,498 14,213 3,683 (313) 609 7,537 1,014 2,518 7' 511 52.8
1995 16,003 14, 1 3,683 (313) 651 8,042 1,085 2,969 8,075 .0
1996 16,430 15,057 3,683 ( 313) 697 8,469 1,161 3,455 8,683 57.7
1997 16,848 15,433 3,683 (313) 745 8,887 1,243 4,006 9,364 60.7
1998 17,257 15,801 3,683 ( 313) 798 9,296 1,329 4,630 10,127 64.1
1999 17,647 16,149 3,683 ( 313) 853 9,686 1,423 5,331 10,977 68.0
18, 16,492 3,683 ( 313) 913 10,071 1,522 6,125 11,930 72.3
1 18,400 16,820 3,683 (313) 977 10,439 1,629 7,015 12,991 77.2
2002 18,750 17,100 3,683 ( 313) 1 ,046 10,789 1,743 8,012 14' 171 82.9
2003 19,100 17,350 3,683 (313) 1,119 11 '139 1,865 9,140 15,494 89.3
2004 19,500 17,725 3,683 ( 313) 1,197 11,539 1,995 10,463 17, 5 96.1
TABLE I II
COST DIESEL GENERATI
tal New New
Annual Diesel Diesel Diesel Diesel Total
Generation Interest Capacity Generation Debt Diesel Fuel Annual Cost of
Required Earnings Required Required Service O&M Cost Cost Cost Power
Year {~1wh {$000) (kw) -{Mwh) ($000) ($000) (SOOO) ($000) (¢/kwh)
1985 10,692 9,844 0 0 10,692 0 5 1,454 2,006 20.4
1986 11,219 10,324 0 0 11,219 0 590 1,686 2,276 22.1
1987 11 '761 10,818 0 0 11 '761 0 632 1,953 2,585 23.9
1988 12,317 11 ,323 0 0 12,317 0 676 2,260 2,936 25.9
1989 12,888 11,840 0 0 12,888 0 723 2,614 3,337 28.2
1990 13,472 12,368 0 0 13,472 0 77<'1, 3,019 3,793 30.7
1991 13,982 12,834 (22) 1,250 13,982 255 1 ,052 3,462 4,747 37.0
1992 14,487 13,293 (22) 0 14,487 255 1 '172 3,964 5,369 40.4
1993 14,989 13,750 {22) 0 14,989 5 1,256 4,532 6,021 43.8
1994 15,498 14,213 (22) 0 15,498 255 1,344 5,178 6,755 47.5
1995 16,003 14,671 (22) 0 16,003 2 1,438 5,908 7,579 51.7
1996 16,430 15,057 (22) 0 16,430 255 1,538 6,702 8,473 56.3
1997 16,848 15,433 (22) 0 16,848 255 1,646 7,594 9,473 61.4
1998 17,257 15,801 {22) 0 17,257 255 1,761 8,596 10,590 67.0
1999 17,647 16,149 (22) 0 17,647 255 1,884 9,713 11,830 73.7
2000 18,032 16,492 (22) 0 18,032 255 2,016 10,967 13,216 80.1
2001 18,400 16,820 (22) 0 18,400 255 2,157 12,365 14,755 87.7
2002 18,750 17,100 ( ) 0 18,750 255 2,309 13,924 16,466 96.3
2003 19,100 17,350 (22) 0 19,100 2 2,470 15,673 18,376 105.9
2004 19,500 17,725 (22) 0 19 '500 255 2,643 17,681 20,557 116.0
TABLE IV
PROJECT
ECT GENERATI Or!
10% LOAN FOR 35 YEARS
Total New
ft.nnua 1 Tota 1 Project Diesel Diesel Diesel Total
Generation Annual Debt Interest Project Generation Debt Diesel Fuel Annual Cost of
Required Sales Service Earnings O&M Cost Required Service O&M Cost Cost Cost Power
Year ( Mv;h') ( ~1wh) ($000) ($000) ($000) (Mwh) ($000) ($000) ($000) ($000) (¢/kwh)
1985 10,692 9,844 4,694 (436) 331 2,731 0 384 371 5,344 54.3
1986 11,219 10,324 4,694 (436) 354 3,258 0 410 490 5,512 53.4
1987 11,761 10,818 4,694 (436) 379 3,800 0 440 631 5,708 52.8
1988 12,317 11,323 4,694 (436) 405 4,356 0 470 799 5,9 52.4
1989 12,888 11,840 4,694 (436} 434 4,927 0 503 999 6,194 52.3
1990 13,472 12,3 4,694 (436) 464 5,511 0 538 1,235 6,495 52.5
1991 13,982 12,834 4,694 (436) 497 6,021 0 1,491 7,074 55.1
1992 14,487 13,293 4,694 (436) 2 6,526 0 886 1,786 7,462 . 1
1993 14,989 13,7 4,694 (436) 569 7,028 0 948 2 '125 7,900 57.5
1994 15,498 14,213 4,694 (436) 609 7,537 0 1,014 2,518 8,399 59.1
1995 16,003 14,671 4,694 (436) 651 8,042 0 1,085 2,969 8,963 61.1
1996 16,430 15,057 4,694 (436) 697 8,469 0 1,161 3,455 9,571 63.6
1997 16,848 15,433 4,694 (436) 745 8,887 0 1,243 4,006 10,252 66.4
1998 17,257 15,801 4,694 (436) 798 9,296 0 1,329 4,630 11,015 69.7
1999 17,647 16,149 4,694 (436) 853 9,686 0 1,423 5,331 11 ,865 73.5
2000 18,032 16,492 4,694 (436) 913 10,071 0 1,522 6,125 12,818 77.7
2001 18,400 16,820 4,694 (436) 977 10,439 0 1,629 7,015 13,879 82.5
2002 18,750 17,100 4,694 (436) 1 ,046 10,789 0 1,743 8,012 15,059 88.1
2003 19,100 17,350 4,694 (436) 1' 119 11 '139 0 1,865 9,140 16,382 94.4
2004 19,500 17,725 4,694 (436) 1,197 11 '539 0 1,995 10,463 17,913 101.1
E V
LAKE ELVA PROJECT
COST OF PROJECT GENERATI
Financing Alternative 1
Total
Annual Project Diesel Diesel Total
Generation Debt Interest Project Diesel Fuel Annual Cost of
Required Service Earnings O&f-1 Cost 0&~·1 Cost Cost Cost Pmver
Year (Mwh ($000) ($000) ($000) ($000) ($000) ($000) l¢/kwh)
1985 10,692 9,844 1,976 (197) 331 2,731 384 371 2,865 29.1
1986 11,219 10,324 1,976 ( 197) 354 3,258 410 490 3,033 29.4
1987 11,761 10,818 1,976 ( 197) 379 3,800 440 631 3,229 29.9
1988 12,317 11 ,323 1,976 (197) 405 4,356 470 799 3,453 30.5
1989 12,888 11 ,840 1,976 ( 1 ) 434 4,927 503 999 3, 715 31.4
1990 13,472 12,368 1,976 ( 197) 464 5 '511 538 1,235 4,016 32.5
1991 13,982 12,834 1,976 (197) 497 6,021 828 1,491 4,595 35.8
1992 14,487 13,293 1,976 (197) 532 6,526 886 1,786 4,983 37.5
1993 14,989 13,7 50 1,976 ( 197) 569 7,028 948 2,125 5,421 39.4
1994 15,498 14,213 1,976 (197) 609 7,537 1,014 2,518 5,920 41.7
1995 16,003 14,671 1 '976 (197) 651 8,042 1,085 2,969 6,484 44.2
1996 16,430 15,057 1,976 (197) 697 8,469 1,161 3,455 7,092 47.1
1997 16,848 15,433 1,976 ( 197) 745 8,887 1 '243 4,006 7 '773 50.4
1998 17,2 15,801 1,976 ( 197) 798 9,296 1,329 4,630 8,536 54.0
1999 17,647 16,149 1,976 ( 197) 853 9,686 1,423 5,331 9,386 58.1
2000 18,032 16,492 1,976 (197) 913 10,071 1,522 6,125 10,339 62.7
2001 18,400 16,820 1,976 (197) 977 10,439 1,629 7,015 11,400 67.8
2002 18,750 17,100 1,976 ( 197) 1,046 10,789 1,743 8,012 12,580 73.6
2003 19,100 17,350 1,976 ( 197) 1,119 11,139 1,865 9,140 13,903 80.1
2004 19,500 17,725 1,976 ( 197) 1,197 11 ,539 1,995 10,463 15,434 87.1
E VI
LAKE ELVA
COST OF PROJECT GENERATION
ternative 2 -
Tot a 1
Annual Tota 1 Project Diesel Tota 1
Generation Annual Debt Interest Project Diesel Fuel Annual Cost of
Required Sales Service Earnings O&M Cost O&M Cost Cost Cost Powel~
Year (Mwh) Mwh ($000) ($000) ($000) $000) ($000) ($000) (¢/kwh)
1985 10,692 9,844 1.373 0 331 2 '731 384 371 2,459 25.0
1986 11,219 10,324 1,373 0 331 3,258 410 490 2,627 . 5
1987 11,761 10,818 1,373 0 331 3,800 440 631 2, 3 26.1
1988 12,317 11,323 1,373 0 331 4,356 470 799 3,047 26.9
1989 12,888 11 ,840 1,373 0 331 4,927 503 999 3,309 27.9
1990 13,472 12,368 1,373 0 331 5,511 538 1,235 3,610 29.2
1991 13,982 12,834 1,373 0 1 6,021 828 1,491 4,189 32.6
1992 14,487 13,293 1,373 0 ~ 331 6,526 886 1,786 4, 577 34.4
1993 14,989 13,750 1,373 0 331 7,028 948 2,125 5,015 36.5
1994 15,498 14,213 1,373 0 331 7,537 1,014 2,5 5,514 38.8
1995 16,003 14,671 1,373 0 331 8,042 1,085 2,969 6,078 41.4
1996 16,430 15,057 1,373 0 331 8,469 1,161 3,455 6,686 44.4
1997 16,848 15,433 1,373 0 1 8,887 1,243 4,006 7, 47.7
1998 17,257 15,801 1,373 0 331 9,296 1,329 4,630 8,130 51.5
1999 17,647 16,149 1,373 0 331 9,686 1,423 5,331 8,980 55.6
2000 18.032 16,492 1,373 0 331 10,071 1,522 6, 5 9,933 60.2
16,820 1,373 0 331 10,439 1,629 7 ,015 10,994 65.4
2002 18,750 17,100 1,373 0 331 10,789 1,743 8,012 12,174 71.2
2003 19,100 17,350 1,373 0 331 11 '139 1,865 9,140 13,497 77.8
2004 19.500 17,7 1,373 0 331 11,539 1,995 10,463 15,028 84.8
TABLE VII
LAKE ELVA PROJECT
COST OF PROJECT GENERAl!
Financing Alternative 3
tal
nual Total Project Diesel Diesel Total
Generation Annual Debt Interest Project Generation Diesel Fuel Annual Cost of
Required Sales Service Earnings O&M Cost Required O&M Cost Cost Cost Power
Year (Mwh) _(Mwh) ($000) ($000) ($000) (Mwh) ($000) ( $000) ( $000 )_ (¢/kwh)
1985 10,692 9,844 3,964 (404) 331 2,731 384 371 4,646 47.2
1986 11,219 10,324 3,964 (404) 354 3,258 410 490 4,814 46.6
1987 11 '761 10,818 3,964 (404) 379 3,800 440 631 5,010 46.3
1988 12,317 11 '323 3,964 (404) 405 4,356 470 799 5,234 46.2
1989 12,888 11,840 3,964 (404) 434 4,927 503 999 5,496 46.4
1990 13,472 12,368 3,964 (404) 464 5,511 538 1,235 5,797 46.9
1991 13,982 12,834 3,964 (404) 497 6,021 828 1,491 6,376 49.7
1992 14,487 13,293 3,964 (404) 532 6,526 886 1,786 6,764 50.9
1993 14,989 13,750 3,964 (404) 569 7,028 948 2 '125 7,202 52.4
1994 15,498 14,213 3,964 (404) 609 7,537 1, 014 2,518 7,701 54.2
1995 16,003 14,671 3,964 (404) 651 8,042 1 ,085 2,969 8,265 56.3
1996 16,430 15,057 3,964 (404) 697 8,469 1,161 3,455 8,873 58.9
1997 16,848 15,433 3,964 (404) 745 8,887 1,243 4,006 9,554 61.9
1998 17,257 15,801 3,964 (404) 798 9,296 1,329 4,630 10,317 65.3
1999 17,647 16,149 3,964 (404) 853 9,686 1,423 5, 1 11,167 69.1
2000 18,032 16,492 3,964 (404) 913 10,071 1,522 6,125 12,120 73.5
18,400 16,820 3,964 (404) 977 10,439 1,629 7,015 13' 181 78.4
2002 18,750 17,100 3,964 (404) 1,046 10,789 1,743 8,012 14,361 84.0
2003 19,100 17,350 3,964 (404) 1,119 11 '139 1,865 9 '140 15,684 90.4
2004 19,500 17,725 3,964 (404) 1,197 11,539 1,995 10,463 17,215 97.1
TABLE VIII
LAKE ELVA PROJECT
COST OF POWER GENERATI
Financing Alternative 3
Debt Assistance
Cost of Tota 1 Cost of Annual Deferred Loan B ance Annual
Power Annual Power Debt Assist. Interest or Accrued Payment on
w/Lake Elva Sales Diesel Only Loan Amount 10.5~~ Principal Loans
Year (¢/kwh) (Mwh) (¢/kwh) ($000) ($000) ($000) ($000)
1985 47.2 9,844 20.4 2,638 0 2,638 0
1986 46.6 10,324 22.1 2,529 277 5,167 0
1987 46.3 10,818 23.9 2,423 543 8 '133 0
1988 46.2 11,323 25.9 2,299 854 11 ,286 0
1989 46.4 11,840 28.2 2,155 1,185 14,626 0
1990 46.9 12,368 30.7 2,004 1,536 18,166 0
1991 49.7 12,834 37.0 1,630 1,907 21,703 0
1992 50.9 13,293 40.4 1,396 2,279 25,378 0
1993 52.4 13,750 43.8 1,183 2,665 29,226 0
1994 54.2 14,213 47.5 9 3,069 33,247 0
1995 56.3 14,671 51.7 675 3,491 37,413 0
1996 58.9 15,057 56.3 391 3,928 41,732 0
1997 61.9 15,433 61.4 77 4,382 46,191 0
1998 65.3 15,801 67.0 0 4,581 50' 772 269
1999 69.1 16,149 73.7 0 4,588 55,360 743
2000 73.5 16,492 80.1 0 4,725 60,085 1,088
2001 78.4 16,820 87.7 0 4,745 64,830 1,564
2002 84.0 17,100 96.3 0 4,704 69,534 2,103
2003 90.4 17,350 105.9 0 4,612 7 4 '146 2,689
2004 97.1 17 '725 116.0 0 4,435 78,581 3,350
ntinuation of this schedule beyond 2004 reflects an ability of the utility to increase
annual loan payments based upon the general rate of inflation and the diesel generators
in the all diesel system.
Debt Assistance \Cont.)
Cost of Total Cost of Annual Deferred Loan Balance Annual
Power Annual Power Debt Assist. Interest or Accrued Payment on
w/Lake Elva Sales Diesel Only Loan Amount 10.5% Principal Loans
Year {¢/kwh) (Mwh) {¢/kwhl ($000) ($000) ($000) ($000)
2005 101.0 18,000 122.1 0 4,453 83,034 3,798
2006 105.2 18,250 128.8 0 4,412 87,446 4,307
2007 109.7 18,500 135.8 0 4,354 91,800 4,828
2008 114.5 18,750 143.3 0 4,239 96,039 5,400
2009 119.5 19,000 151.2 0 4,061 100,100 6,023
2010 126.6 19,000 161.7 0 3,842 103,942 6,669
2011 134.2 19,000 172.9 0 3,561 107,503 7,353
2012 142.2 19,000 184.9 0 3,175 110,678 8 '113
2013 150.9 19,000 197.8 0 2 '710 113 '388 8,911
2014 160.1 19,000 211.5 0 2,140 115,528 9,766
2015 170.0 19,000 226.3 0 1,433 116,961 10,697
2016 180.6 19,000 242.0 0 615 117,576 11 ,666
2017 191.9 19,000 258.8 0 0 117,211 12 '711
2018 204.0 19,000 276.9 0 0 115,667 13,851
2019 217.0 19,000 296.2 0 0 112,764 15,048
2020* 191.3 19,000 320.7 0 0 100,018 24,586
2021 227.0 19,000 342.8 0 0 88,718 22,002
2022 242.9 19,000 366.4 0 0 74,568 23,465
2023 259.9 19,000 391.7 0 0 57,356 25,042
2024** 278.1 19,000 400.0 0 0 40,217 23,161
2025** 297.6 19,000 400.0 0 0 24,984 19,456
2026** 318.4 19,000 400.0 0 0 12,103 15,504
2027** 340.7 19,000 400.0 0 0 2,107 11,267
2028 364.5 19,000 376.8 0 0 0 2,328
2029 390.1 19,000 390.1 0 0 0 0
* An increased amount of funds are available in year 2020 for repayment of state debt
because revenue bond debt service has expired, and the Reserve Fund is also used to
reduce the state loan balance.
** Rates are held constant at $4.00/kwh until the debt service on state debt assistance
loans is repaid. The rate increases beyond year 2020 after retirement of Revenue
bond debt service could be decreased if it is desirable to extend the repayment period
on state debt beyond 44 years.