Loading...
HomeMy WebLinkAboutSoldotna Sports Complex Correspondence, Memos 1989March 6, 1989 Mr. Richard Underkofler City Manager City of Soldotna 177 North Birch Soldotna, Alaska 99669 Subject: Cogeneration proposal for the Central Peninsula Sports Arena. / Dear Mr. Underkofler: At your request our engineering staff has reviewed the cogeneration proposal for the sports arena. As you may know, the Alaska Power Authority has active- ly been promoting cogeneration systems in Rural Alaska for several years and we have designed and built such systems in more than 20 different communities. There is nothing exotic about the methods and materials utilized, and properly designed, built, and maintained, such systems should Provide substantial benefits over a number of years. In reviewing this proposal, it appears that the estimated savings have been calculated using average values for heating and power demands, and this always tends to provide a somewhat optimistic estimate of the potential benefits. Consequently, our “Computerized Waste Heat Utilization Simulation Program" was adapted to this project in order to compare actual demands to availability of power and heat in one hour increments over the entire year. Also, the proposal did not address issues such as the disposal of excess power and heat and part load fuel economy. This proposal anticipated 100% availabi- lity of the unit; yet ft should be noted that any outage lasting longer than 15 minutes would have a significant impact on the economic benefits in the month, during which the outage occurred. Compared to the proposal, these factors reduce the estimated benefits substantially, and while the project still appears to be feasible, it no longer appears to be a clear cut and obvious choice. In order to find the most economic method of operating the proposed system, Homer Electric Association (HEA) was contacted, and it was learned that a new rate structure will be proposed to the Alaska Public Utilities Commission within a few weeks. This rate structure will address some of the provisions in the existing rate structure, which in reality makes it possible to utilize HEA as a very inexpensive source of peak load capacity. While no details have been provided about specific changes in the rate structure, it appears that the proposed changes will have a negative effect ona project of this type. A cursory audit performed on the facility by Alaska Power Authority staff has determined that the existing heating system is indeed compatible with a 5157/945(1) cogeneration system of the type proposed. In order to determine the most economic methods in which to deal with the high energy costs for this facili- ty, it is proposed that the following be done: 1. An energy audit should be performed on the building in order to establish the potential for reductions in demand and consumption of both power and heat through other means. Several firms in the Anchorage area provide this service. 2. Once HEA's new rate structure is known, the project should be re-evaluated using realistic values for future demand and consump- tion of both power and heat. The optimum size of the unit should be established through simulation and other issues such as insurance, environmental concerns, and realistic operating and maintenance procedures and expenses should be investigated. 3. Assuming that the project still appears feasible, a set of technical specifications and enforceable performance specifications should be developed and additional proposals should be solicited. 4. Such proposals should be evaluated based on technical as well as economic parameters and, assuming that a favorable proposal is iden- tified, a design-build type contract should be developed in order to avoid any confusion about project responsibility. 5. Prior to any contract being signed, Enstar Natural Gas Company and Homer Electric Association should be invited to comment on the proposed project in its final form and should be given an opportuni- ty to offer amendments to existing delivery contracts as alterna- tives to this project. While this project certainly is exciting and could offer significant benefits to the City of Soldotna, I would advise against making any decisions without reviewing all aspects and alternatives carefully. The Alaska Power Authority will be available to offer limited assistance in this process, and please do not hesitate to contact me with any comments and suggestions to this letter. Sincerely, _— Al ee eee ee Brent N. Petrie Director of Agency Operations PH/BNP/ch 5157/945(2)