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HomeMy WebLinkAboutRed Devil Correspondence 1985MEMORANDUM Date: May 29, 1985. To? Brent N. Petrie From: Peter N. Hansen Subject: Red Devil My research for this project has included: Community Profile, Reconnaissance Study done by IECO, and personal communication with Mr. Ken Selby, City Administrator for Red Devil. The population in red Devil has been steadily declining since the Closure of the mine in 1971. Population is now 49 and the school is expected to have 4 students the coming year. The project is based an the following: Aa. The Kuspuk School District does not desire ta continue to provide power to the community telephone and the health clinic as of May, 1985. RL All residents want power. Cc. It is believed locally that rapid growth will take place in the area and power will be needed. Discussion: A. Since the State is funding the School District it should he possible to direct the School District to continue to provide power. If this is not possible is should be possible to provide power for the Clinic and the community telephone with small transportable generators as it has been done earlier. This is also currently being done during the summer when the school generators are shut down. BR. A major portion of the funding will pay for an under water cable which is to crass the river and serve only 7 residences which are scattered down alang the river. If people want to live in the middle of nowhere it should not be the responsibility of the state to pay for all the conveniences normally associated with living in a city. The cost of operating and maintaining a central power plant for a community with 49 people will be very high per unit power delivered and this should be Given serious consideration before a power plant is installed. Cc. There is no substantiation that Red Devil is going ta grow. The population has been steadily declining since the depletian of the ere deposit with the subsequent closure of the mine. The mere existence of a 4500 foot gravel runway does not warrant rapid grawth unless there is a basis for activities which would depend on the availability of a runway. Tf the number of students decline further the School District might obviously consider closing the schasl. This would make the future utility loose its largest customer and would reduce the potential for growth in the area. i) MEMORANDUM State of Alaska TO: FROM 02-001A(Rev. 10/79) R.E. Etheridge, Alaska Power Authority pate: October 11, 1985 Ed Morris, Alaska Power Authority Susan White, Alaska Power Authority FILE NO: 7 \ TELEPHONE NO: , | Ernie Whitney ole) suaJECT: Red Devil Loan Auditing Manager Application On Thursday, 10/10/85, Peter Hansen and I met with Ken Selby, consultant to Middle Kuskokwim Electric Cooperative (MKEC), to discuss the comments raised by the Planning Directorate in their review of MKEC's application (see my letter dated, 10/8/85). Selby was not interested in obtaining the additional information requested, and stated that if the application could not be present- ed at the Alaska Power Authority November Board Meeting because of the missing information, MKEC would probably not continue to pursue a loan for Red Devil at this time. The community apparently expects to receive grant funding for the electrification of Red Devil, and applied for a Power Project Loan only to cover itself in the event that a grant fails. Red Devil's loan application should be considered inactive at the present time. EW: it cc: G. Manni, Alaska Power Authority »P. Hansen, Alaska Power Authority 1506/139 MEMORANDUM Dates 18/7/85 Jo: Ernie Whitney Auditing Manager Through: Ed birt S anon Associate Executive Director af Flanning 1 : fpr arent N. Petrie Director/Systems Planning From: Peter N. Hansen My Subject: Red Devil Loan Applicatian. My review of the above mentioned loan application has raised a number of questions which may need to be adressed in more detail. i. Cost estimate. MEEC should be required to submit either a firm bid from a contractor for the construction of the entire project or a coast estimate should be prepared by a Professianal Engineer. The cost estimate presented seems very preliminary. Note fen. that "Administration" is estimated at $ 22,760 where "Engineering" has been estimated at $ 8, 6o%. 2. Maintenance Costs. The budget presented does not include any expenses far unscheduled repairs. Only $ 1,604 has been budgeted for parts this will at best cover expenses such as filters and lubrication oil. 3. FPrajected annual income. The applicant should be asked ta submit a statement from the Kuspuk School District that the District intends to purchase power from the project. If the District imtends to centinue to operate its own generators, &74 af the projected revenue disappears. 4, Projected annual income. The applicant sheuld be asked to submit a statement from the Vanderpool Road House that the Roadhouse is interested in purchasing the amount of power stated in the application. If this igs not the case, 16% of the projected revenue disappears. §. Anticipated annual kilowatthour usage. a . The tetal projected lead is 119, 00% kilowatthours. This corresponds ta an average load of only 12.6 kilowatts. for summer operation when the school will not be in the generators seem over sized at 4@ and S@ kilowatt. See also attached copy of Memorandum of 5/29/85. Especially operation, 3 MEMORANDUM Date: May 29, 1985. Tot Brent Ny Petrie From: Peter N. Hansen Subject: Red Devil . My research for this project has included: Community Profile, Reconnaissance Study done by ITECO, and personal commanicatian with Mr. Ken Selby, City Administrator for Red Devil. The population ino red Devil has been steadily declining since the closure of the mine in 1971. Fopulation is now 49 and the school is expected to have 4 students the coming year. The project is based on the following: As The Kugpuk School District does not desire to continue to provide power to the cammunity telephone and the health clinic as of May, 1985. Be AL’ residents want power. Ge It is believed locally that rapid growth will take place in the area and power will be needed. Discussion: Ra Since the State is funding the School District it should be possible to direct the School District to continue to provide power. If this is not possible is should be possible to pravide power for the Clinic and the community telephane with small transportable generators as it has been done earlier. This is also currently being done during the summer when the school generators are shut down. RB. A major partion ef the funding will pay for an under water cable which is te crass the river and serve only 7 residences which are scattered down along the river. If people want to live ain the middle of nowhere it should not be the responsibility of the state to pay for all the conveniences normally associated with living in a city. The cast of operating and maintaining a central power plant for a community with 49 people will be very high per wit power delivered and this should be given serious cansideration before a power plant is installed. Gs There is no substantiation that Red Devil is going to grow. The papulation has been steadily declining since the depletion of the ere deposit with the subsequent closure of the mines The mere existence of a 4500 foot gravel runway does not warrant rapid grawth unless there ig a basis for activities which would depend on the availability af a runway. If the nmumber of students decline further the School District might obviously consider cloging the school. This would make the future utility loose its largest customer and would reduce the potential for growth in the area. MEMORANDUM Rudy Etheridge DATE: TO: FROM 02-001A(Rev. 10/79) Assoc. Exec. Director/Projects Ed Morris © FILE NO: Assoc. Exec. Director/Planning TELEPHONE NO: Co Ernie Whitney SUBJECT: Auditing Manager State of Alaska October 1, 1985 Loan Application for Red Devil Attached is an application for a $250,000 loan from the Power Project Fund submitted by the Middle Kuskokwim Electric Cooperative for the electrification of the community of Red Devil, Alaska. Please review the application and provide your recommendation to me not later than October 18, 1985. If you require additional information, please advise me as soon as possible so that I may request it from the applicant. Attachment as stated. EW/fs cc: Gloria Manni Susan White 1357/464 MIDDLE KUSKOKWIM ELECTRIC COOPERATIVE g GENERAL DELIVERY CROCKED CREEK, ALASKA 99575 Robert D. Heath September 27, 1985 Director Alaska Power Authority 334 W. 5th Ave. 2nd Flr Anchorage, Alaska 99501 RE: Loan request Dear Mr. Heath; ALASKA POWER AUTROAITY The Middle Kuskokwim Electric Cooperative (MKEC), in response to a request by the community of Red Devil is presenting this power project fund loan request, Enclosed, you will find the necessary and requeired documentation called for per section 44,83.170. of the APA Statutes and keg- ulations, If the loan is approved to provide service to Red Devil, MKEC will install two fossil fuel generators, power house, poles, line and transformers sufficient in number and size to provide electricity to all existing commercial and residential areas to include the airport shop and school, The entire start up operation and facility will cost $250,000. (see attached vendors estimates and price list). The commercial and residential users at Red Devil will be charged the same prevailing MKEC rates as in the existing four service area communities, The community of Red Devil has a population of fourtyseven with eleven houses, ten commercial users and four public. Four of the houses ‘are located on the west side of the Kuskokwim River. Pres- ently, there is no public electrical power to individual houses, The Red Devil School has two 50kw generators, However, this power is for school use only and is not shared with the surrounding houses, Limited electrical power for the public use has continued to restrict the growth of the community. MKEC is presently pursuing approval by A.P.U.C. for the authority to operate in the Red Devil area. Presently, MKEC operates power utility to four communities in the Middle Kuskokwim area, MKEC is able to provide continuous power to Red Devil. Based on past performance, MKEC has been in business for three years Supplying service to villages and cities up and down the river from Red Devil, It is a logical step for MKEC to assist Red Devil in supplying power at this time. MKEC request to <_.vice Red Devil - cont. §& 7/85 Attached is a Resolution from Red Devil Corporation requesting that MKEC provide electrical power to the community, If you have any further questions regarding this request, please contact me at 248-0853, Sincerely, en tethy Ken Selby MKEC Consultant C421 eed lw Anchorage, Av G9s0zr RESOLUTION 85 - 4 A RESOLUTION BY THE MIDDLE KUSKOKWIM ELECTRIC COOPERATIVE REQUESTING A TWO HUNDRED FIFTY THOUSAND DOLLAR LOAN FROM THE ALASKA POWER AUTHORITY FOR THE ELECTRIFICATION PROJECT AT RED DEVIL ALASKA WHEREAS, The Middle Kuskokwim Electric Cooperative (MKEC ) has been requested by the Red Devil Corporation to provide electrical power service to the community; and, WHEREAS, MKEC has studied and planned the project to determine the type and cost of power service needed; and, WHEREAS, MKEC has applied for and received authority to operate the electrical service in the Red Devil area as part of MKEC's Certificate of Operation; and, WHEREAS, There is no current public distribution of electrical power to the community; and, WHEREAS, The MKEC Board has made a committment to Red Devil to provide the service and securing the loan is essential to this committment; NOW THEREFORE BE IT RESOLVED, that the Middle Kuskokwim Electric Cooperative has passed this resolution to request funding in the amount of $250,000.00 from the Alaska Power Authority to provide electrical power to the community of Red Devil. PASSED AND APPROVED THIS Qt aay of Deg Neral. » 1985, MIDDLE KUSKOKWIM ELECTRIG COOFERATIVE =a ff fey . . \ de PRESIDENT f ih semp (Lo A ATTESTED: ; a, WG 8S x DATE SECRETARY Lo 2 A. Z DATE 9 / 20/85 Supplement to A,P,U.C, letter 7/15/85 COST TO CONSTRUCT Distribution System: meters, drop boxes, poles, line, transformers - contractor Bill Frances $141,000, Generators; (1) 50kw, (1) 40kw quote by Waukesha Alaska, Corp. 42,000, Power House; Generator Building - with interior wiring ISI Industry services inc, 18,000. Engineering - Contract 8,600, Freight 15,200, Administration .22,700. Consulting - Preparation of application 2,300. N heck Dieleve| BUM FAL LIA Ue il pe $250,000. COST TO MAINTAIN Fuel- 17,000 gallons @ $1.47 $ 24,990, Operator - $700.00 per month x 12 8,400. Parts - 1,640, Administration 3,200, Debt service - $250,000.00 @ 5% 32,376,14 (based on ten year loan) Wo Tp) MKEC Raree § $¢70,606,14 fomerrcrel SI4/KWH PROJECTED ANNUAL INCOME CesdeaQ 474) kWH Kuspuk school facility - $5,250, x 9 mos, $47,250, Vanderpool Road House - 930, x 12 mos, 11,160, State of Alaska equip. shop - 120,00 x 12 1,440, Airport building - $150, x 12 : 1,800, Eleven residential units (avg, $818, per unit) 9,000, $70,650, ANTICIPATED ANNUAL KILOWATT HOUR USEAGE Commercial (includes school facilities) 71,500kw per year Residential 38,500kw " " fie PQ ool ih Cee SLOT fe U as TG Sa G} Pe ATINE PROVTOS Pwr PC , eta ss thon reengriees whe Gower Ley DONE GF Whiwiaed, § 0 forum ot pate aoe NOW os co om .! Asuopted this wt der Legh ue Vil. cons Sey fe om eal edie ee ee ee . pg Gs ' MIDDLE KUSKOKWIM ELECTRIC COOPERATIVE PROPOSED RED DEVIL SERVICE AREA The following Townships, Ranges and Sections apply: Seward Meridian . 20N, R.4S5W, Sections 25, 26, . 20N, R.44w, Sections 29, 30, . 21N, R.45wW, Sections 1, 2, E. . 21N, R.44w, Sections 5, 6, E. 2,500" This map provided by U.S.G.S. MIDDLE KUSKOKWIM ELECTRIC COOPERATIVE ACQUISTION OF PERMITS MKEC has contracted with Glen wade of T.R.E,E, Associates to provide the distribution design, permit(s) authority and in- Stallation of the Red Devil Electrical Project, Mr. Wade will be responsible for abtaining the permit to cross the Kuskokwim River by the Corps. of Engineers, Request to the Corps, waS Submitted in June and an affirmative response is expected soon, Right-of-way within the community area to each dwelling or com- mercial hook-ups has already been approved. ‘The powerlines and drop lines will follow the community's road system fronting each lot. Authority to operate in the Red Devil service area will be coming from the Alaska Public Utilities Commission in early October. MIDDLE KUSKOKWIM ELECTRIC COOPERATIVE, INC, STATEMENTS OF OPERATIONS eas FOR THE PERIOD, BNDED/ JULY 31, 1985 OPERATING REVENUES $177,775 OPERATING EXPENSES: FUEL 61,874 LABOR 37,620 OPERATION AND MAINTENANCE 28,185 LEASE PAYMENTS 10,200 TRAVEL 5,377 ACCOUNTING 3,040 MISCELLANEOUS 2,587 DEPRECIATION 298 $149,181 NET MARGIN $_28,594 MIDDLE KUSKOKWIM ELECTRIC COOPERATIVE, INC. BALANCE SHEETS AS OF JULY 31, 1985 UTILITY PLANT: Electric plant in service, less $ 11,916 1,314,000 contribution in aid of construction in 1984 Less accumulated depreciation <298> 11,618 CURRENT ASSETS: Cash 12,501 Accounts receivable 20,820 Inventory 35,883 Prepaid expenses 1,546 TOTAL CURRENT ASSETS 70,750 82,368 EQUITIES AND MARGINS AND LIABILITIES EQUITIES AND MARGINS $(58,121> LONG-TERM DEBT, less current portion * 96,878 CURRENT LIABILITIES: Accounts payable 40,611 Current portion of long-term debt 3,000 TOTAL CURRENT LIABILITIES 43,611 $ 82,368 MIDDLE KUSKOKWIM ELECTRIC COOPERATIVE, INC. STATEMENTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1984 OPERATING REVENUES OPERATING EXPENSES: NET MARGIN SlarAup Slha) biome 2130] 64 FUEL LABOR OFERATION AND MAINTENANCE TRAVEL INSURANCE OFFICE SUPPLIES MISCELLANEOUS TOTAL EXPENSES $170,336. 128,838, 77,326, 35,087. 13,087. 3,084, 2,419. 2,541, $262,784, Le 92,448. MIDDLE KUSKOKWIM ELECTRIC COOPERATIVE, INC. BALANCE SHEET AS OF DECEMBER 31, 1984 ASSETS UTILITY PLANT: $ None Electric plant in service, less 1,314,000 contribution in aid of construction in 1984 CURRENT ASSETS: Cash, 11,932 Accounts receivable, 27,021 Inventory 69,929 TOTAL CURRENT ASSETS $ 108,882 EQUITIES AND MARGINS AND LIABILITIES EQUITIES AND MARGINS $ <86,715> LONG-TERM DEBT 96,277 CURRENT LIABILITIES: Accounts payable 98,321 Accrued taxes . 999 TOTAL CURRENT LIABILITIES 99,320 /08 882 MEMORANDUM Staic of Alaska To: R. E. Etheridge pate: November 12, 1985 Assoc. Exec. Director/Projects FILE NO: Edwin L. Morris Assoc. Exec. Director/Planning TELEPHONE NO: From = Ernie whitney 4G (ker) susvect: Red Devil Loan Auditing Manager Application The Middle Kuskokwim Electric Cooperative (MKEC) has decided to continue to pursue a $250,000 Power Project Fund loan. MKEC representatives met with Peter Hansen and myself on October 25 to discuss the original application's deficiencies (outlined in my letter dated 10/8/85) and has provided additional information as well as a revised budget for the project. Attached for your review is the original loan application, my letter of 10/8/85, and the additional information provided by MKEC. ‘ re-evaluate the package and forward your recommendation % me. MKEC would like to see their request presented at the December Board of Directors meeting. Attachment as stated. KS/EW/fs cc: Susan White lease R Our, IN ‘Ch 7664 ea Q R, GL R ©” Rous, qo £QuEs "ORe quest p i GW HAND, E Te ip ang APPROVE ( oe KE ; EP 6 van ; View RD ! “ 1896/497 Fi 02-001A(Rev. 10/79) San MIDDLE KUSKOKWIM ELECTRIC COOPERATIVE GENERAL DELIVERY CROCKED CREEK, ALASKA 99575 Robert D. Heath September 27, 1985 Director Alaska Power Authority 334 Ww. 5th Ave. 2nd Flr Anchorage, Alaska 99501 RE: Loan request =~ Dear Mr. Heath: The Middle Kuskokwim Electric Cooperative (MKEC), in response to a request by the community of Red Devil is presenting this power project fund loan request, Enclosed, you will find the necessary and requeired documentation called for per section 44,83.170. of the APA Statutes and keg- ulations, : If the loan is approved to provide service to Red Devil, MKEC will install two fossil fuel generators, power house, poles, line and transformers sufficient in number and size to provide electricity to all existing commercial and residential areas to include the airport shop and school, The entire start up operation and facility will cost $250,000, (see attached vendors estimates and price list). The commercial and residential users at Red Devil will be charged the same prevailing MKEC rates as in the existing four service area communities, The community of Red Devil has a population of fourtyseven with eleven houses, ten commercial users and four public. Four of the houses ‘are located on the west side of the Kuskokwim River. Pres- ently, there is no public electrical power to individual houses, The Red Devil School has two 50kw generators. However, this power is for school use only and is not Shared with the surrounding houses, Limited electrical power for the public use has continued to restrict the growth of the community. MKEC is presently pursuing approval by A.P.U.C. for the authority to operate in the Red Devil area. presently, MKEC operates power utility to four communities in the Middle Kuskokwim area, MKEC is able to provide continuous power to Red Devil. Based on past performance, MKEC has been in business for three years Supplying service to villages and cities up and down the river from Red Devil. It is a logical step for MKEC to assist Red Devil in supplying power at this time. MKEC request to __-rvice Red Devil - cont. 27/85 Attached is a Resolution from Red Devil Corporation requesting that MKEC provide electrical power to the community, If you have any further questions regarding this request, please contact me at 248-0853, Sincerely, / kon Ll, Ken Selby MKEC Consultant RESOLUTION 85 - 4 A RESOLUTION BY THE MIDDLE KUSKOKWIM ELECTRIC COOPERATIVE REQUESTING A TWO HUNDRED FIFTY THOUSAND DOLLAR LOAN FROM THe ALASKA POWER AUTHORITY FOR THE ELECTRIFICATION PROJECT AT RED DEVIL ALASKA WHEREAS, The Middle Kuskokwim Electric Cooperative (MKEC) has been requested by the Red Devil Corporation to provide electrical power service to the community; and, WHEREAS, MKEC has studied and planned the project to determine the type and cost of power service needed; and, WHEREAS, MKEC has applied for and received authority to operate the electrical service in the Red Devil area as part of MKEC's Certificate of Operation; and, WHEREAS, There is no current public distribution of electrical power to the community; and, WHEREAS, The MKEC Board has made a committment to Red Devil to provide the service and securing the loan is essential to this committment; NOW THEREFORE BE IT RESOLVED, that the Middle kKuskokwim Electric Cooperative has passed this resolution to request funding in the amount of $250,000.00 from the Alaska Power Authority to provide electrical power to the community of Red Devil, ; PASSED AND APPROVED THIS /9*day of Deg lena , 1985, MIDDLE Lo ELECTRIG COOPERATIVE eu & Lot, plo CoCr PRESIDENT soak ATTESTED: LLG /B Ss DATE SECRETARY Lrdbruw Pucbirmced DATE 7/ 20/85 MIDDLE KUSKOKWIM ELECTRIC COOPERATIVE, INC. EE PU EE RATINE, LNG, KEY PERSONNEL AND AGENCIES Principal Officers of MKEC President... seAndrew Gusty Vic President ‘Dave Peters Secretary ~ Andrew ‘Fredricks Consultants Ken Selby Planning & Management Consultant 6421 Reed Lane Selby Consultant Service Anchorage, AK 248-0853 99502 Glen Wade Engineering & Construction 213 W. 6th Ave Two Rivers Electrical Engineering Co, Anchorage, AK 272-2132 995011 ... Lenora Langman Financial Consultant 550 W. 7th Ave .Touche Ross & Co. Anchorage, AK , 272-8462 9950 e3. Key Contacts for APA application Ken Selby = Pe@ject Manager - - 248.0853 Anchorage Dennis Thomas - General Manager - - 432-8001 Crooked Creek MKEC Supplement to A,P,U.C., letter @... COST TO CONSTRUCT Distribution System; meters, drop boxes, poles, line, transformers - contractor Bill Frances $141,000. Generators; (1) 50kw, (1) 40kw quote by Waukesha Alaska, Corp, 42,000. Power House; Generator Building - with interior wiring ISI Industry services inc, 18,000, Engineering - Contract 8,600, Freight 15,200, Administration 22,700, Consulting -- Preparation of application 2,300. $250,000. COST TO MAINTAIN Fuel- 17,000 gallons @ $1.47 $ 24,990, Operator - $700.00 per month x 12 8,400. Parts - 1,640, Administration 3,200, Debt service - $250,000.00 @ 5% 32,376.14 (based on ten year loan) — $70, 606,14 PROJECTED ANNUAL INCOME Kuspuk school facility - $5,250, x 9 mos, $47,250, Vanderpool Road House - 930, x 12 mos, 11,160, State of Alaska equip. shop - 120,00 x 12 1,440, Airport building - $150, x 12 ; 1,800, Eleven residential units (avg. $818. per unit) 9,000, $70,650. ANTICIPATED ANNUAL KILOWATT HOUR USEAGE Commercial (includes school facilities) 71,500kw per year Residential 38,500kw " " me OR 85-7 ed wo TE SO: OR TE QU STG NY a i. ba it SATIN PROWIES Fowhr 9C TRE Con la Wee les eye eG a thn Pecugrieas hid Vie Govecphuy eG ot ae ; = 9 the icles , be Bo CY WTO. pk Heo Vo. i.8 wall! s mg “he , crue of ed tae Tews frees — Ms ete 3. atts 1) twtr : ! ~ onde ign eee. ta Hhe mo poy ac Qhece dent os Hay ne i i oes Auspted thie / des --OF Sete? it : Ae ne a Cerne elem sl weVTl. COR ORS TIO , oa ‘ od : Ny) )\ 32 GW // \ fat ( - 7 r (ZN ( i | & 7 ZZ : MIDDLE KUSKOKWIM ELECTRIC COOPERATIVE °) FR 7 a PROPOSED RED DEVIL SERVICE AREA AS yy U i (ee AVA eo The following Townships, Ranges and Sections 35) oa KAD 7 apply: 1 a ¢ ZL is Seward Meridian - SS oor T, 20N, R.4SW, Sections 25, 26, 35, & 36 “WO i x T, 20N, R.44w, Sections 29, 30, 31, & 32 & AES 7, 21N, R.45W, Sections 1, 2, E.s of 11,12 } 2 \ > T, 21N, R.44W, Sections 5, 6, E.g of 7 & olay y iv \ >)\) \ 1" = 2,500' This map provided by U.S.G.5S. MIDDLE KUSKOKWIM ELECTRIC COOPERATIVE ACQUISTION OF PERMITS MKEC has contracted with Glen wade of T.R.E.E. Associates to provide the distribution design, permit(s) authority and in- Stallation of the Red Devil Electrical Project, Mr. Wade will be responsible for abtaining the permit to cross the Kuskokwim River by the Corps, of Engineers, Request to the Corps, was Submitted in June and an affirmative response is expected soon, Right-of-way within the community area to each dwelling or com- mercial hook-ups has already been approved. The powerlines and drop lines will follow the community's road system fronting each lot. Authority to operate in the Red Devil service area will be coming from the Alaska Public Utilities Commission in early October. MIDDLE KUSKOKWIM ELECTRIC COOPERATIVE, INC, STATEMENTS OF OPERATIONS [610 Pei Phe FOR THE FER LOD, ENDED JULY 31, 1985 OPERATING REVENUES $177,775 OPERATING EXPENSES: FUEL 61,874 LABOR 37,620 OPERATION AND MAINTENANCE 28,185 LEASE PAYMENTS 10,200 TRAVEL 5,377 ACCOUNTING 3, 040 MISCELLANEOUS 2,587 DEPRECIATION 298 $149,181 NET MARGIN $_28,594 MIDDLE KUSKOKWIM ELECTRIC COOPSRATIVE, INC, BALANCE SHEETS AS OF JULY 31, 1985 ASSETS UTILITY PLANT: Electric plant in service, less $ 11,916 1,314,000 contribution in aid of construction in 1984 Less accumulated depreciation <298> 11,618 CURRENT ASSETS: Cash 12,501 Accounts receivable 20,820 Inventory 35,883 Prepaid expenses 1,546 TOTAL CURRENT ASSETS 70,750 82, 368 EQUITIES AND MARGINS AND LIABILITIES EQUITIES AND MARGINS ; $(58,121> LONG-TERM DEBT, less current portion * 96,878 CURRENT LIABILITIES: Accounts payable 40,611 Current portion of long-term debt 3,000 TOTAL CURRENT LIABILITIES 43,611 $ 82, 368 _ MIDDLE KUSKOKWIM ELECTRIC COOPERATIVE, INC. STATEMENTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1984 Blo2 - Ir 4s OPERATING REVENUES $170,336, OPERATING EXPENSES: FUEL 128,838, LABOR 77,326. OFERATION AND MAINTENANCE 35,087. TRAVEL 13,087, INSURANCE 3,084, OFFICE SUPPLIES 2,419, MISCELLANEOUS 2,541. TOTAL EXPENSES $262,784, NET MARGIN L$ 92,448.5 MIDDLE KUSKOKWIM ELECTRIC COOPERATIVE, INC. BALANCE SHEET AS OF DECEMBER 31, 1984 ASSETS UTILITY PLANT; 7 $ None Electric plant in service, less 1,314,000 contribution in aid of construction in 1984 CURRENT ASSETS: Cash, 11,932 Accounts receivable, 27,021 Inventory 69,929 TOTAL CURRENT ASSETS $ 108,882 EQUITIES AND MARGINS AND LIABILITIES EQUITIES AND MARGINS $ <86,715> LONG-TERM DEBT 96,277 CURRENT LIABILITIES: Accounts payable 98,321 Accrued taxes 999 TOTAL CURRENT LIABILITIES 99,320 $ 108,882 October 8, 1985 Mr. Ken Selby Selby Consulting Service 6421 Reed Lane Anchorage, Alaska 99502 Subject: Red Devil Loan Application Dear Ken: Our Planning directorate has reviewed the Middle Kuskokwim Electric Cooperative's (MKEC) application and has the following comments: 1) 2) 3) 4) The cost estimate presented seems very preliminary. In order to establish a more accurate estimate of project costs, we fee] that either a firm bid for construction of the entire project should be solicited from a contractor or that a cost estimate should be prepared by a Professional Engineer. An example of our concern is in the amounts allocated for administration (seems excessive) and engineering (seems low). The operating budget includes no provision for unscheduled repairs. Only $1,640 has been budgeted annually for parts; this amount seems only adequate to cover expenses such as filters and lubrication, with no provision for repairs. Written commitments to purchase power should be obtained from Targe customers. The economic feasibility of the project is largely dependent upon the purchase of power by the Kuspuk School District and the Vanderpool Road House, which account for almost 83% of projected revenues. Written commitments from these future customers would help assure that the project is feasible. Generators may be too large. One 40kW and one 50kW unit have been proposed for Red Devil. Based on the projected system's loads (110,000 kwh), we feel these units may be too large, resulting in poor fuel efficien- cy. 1453/460 Page 2 Our staff will be happy to meet with you to discuss these problems and to help identify solutions to them. Sincerely, Ernie Whitney Auditing Manager EW: it cc: R.E. Etheridge, Alaska Power Authority Ed Morris, Alaska Power Authority Peter Hansen, Alaska Power Authority Susan White, Alaska Power Authority 1453/460