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S. Intertie Scopeing 1996
Riley Snell Z = 7 = From: Riley Snell To: David Ramseur; Pat Pourchot Ce: Wilson = Subject: UTHERN INTERTIE SCOPEIN ET Date: ay, Februa 7 6 9:28AM Chugach conducted their first public meeting on the Southern Intertie last night. There were few outsiders in attendance. Comments focused on: 1) What is the economic justification for the Project? CEA did not answer the question but said justification was based on AEA's report of 1991. There were comments that prior to public hearings on route selection CEA should make available for public scrutiny, the economic justification for the SOUTHERN INTERTIE. There were questions concerning impacts to the CEA ratepayers or to other utilities’ ratepayers as a result of their participation in the Project. Once again there was no answers forthcoming from CEA. There were also questions as to whether the PROJECT was a special interest project being advance to satisfy labor. 2) Routing questions from environomal groups focused on preference for underground cable within the Anchorage Basin, use of the established corridor along the coast north of Nikiski, and underwater cable to Beluga. It was obvious that the routing opportunity along the existing transmission corridor and across Turnagin Arm @ Bird Point (lowest cost option as indicated by the consultant's report) was not preferred by the environmental groups in attendance. Page 1 Riley Snell _[——— Tre rh rir an Thi Nah ne TTT From: Dennis McCrohan To: Randy Simmons; Riley Snell Date: Thursday, February 01, 1996 7:57AM January 31, 1996 | attended the Chugach conducted public meeting on the Southern Intertie. There were very few outside people in attendence. Commnets focused on: 1. What is the economic justification for the Southern Intertie? CEA really did not answer but said justification was based on AEA report of 1991. There were comments that prior to public discussion and proceeding with routing studies CEA should make available for public scrutiny the economic justification for the Southern Intertie. There were questions concerning impact to the CEA ratepayer which CEA did not answer. (Note that the 1991 AEA study may be quite out of date by now. Benefit cost ratios greater than 1.0 relied heavily on reliability, reductions in spinning reserves, etc. which are quite subjective). There were also questions as to whether the project wasa special interest project for the labor unions. 2. Routing questions from environmental group focused on preference for underground within the Anchorage Basin, use of the established corridor along the coast north of Nikiski, and underwater cable to Beluga. It was obvious that the routing opportunity along the existing transmission corridor and across Turnagin Arm at Bird Point(lowest cost option as indicated by Power) was not preferrred by the enviromental groups in attendence. Page 1 @oo1 CEA ENGINEERING * 4/18/96 THU 14:17 FAX 7624693 April 18, 1996 . VIA Fax Line: (907) 561-8998 (Hardcopy to follow, U.S. Mail) Alaska Industrial Development and Export Authority 480 West Tudor Road Anchorage, Alaska 99503 Attention: Mr. William R. Snell, Executive Director Subject: Southern Intertie - Aerial Photography Additional Work Dear Mr. Snell: Power Engineers/Dames & Moore have submitted a proposal to perform the engineering and environmental services necessary to prepare an EA/EIS in compliance with the NEPA process. This proposal with an overall budget of $3,347,765 was presented to you on April 16, 1996, and is being transmitted to the IPG today. As we discussed, it will be important to move ahead with the work under consideration so we can make full use of this summer for the necessary field work, During our analysis of the work required it became evident that aerial photography must be completed before the leafs come out. Utility and AIDEA approvals are not anticipated to be given in time to perform this work in a timely manner and we therefore propose to add the photography to the route selection work presently under way. Aerial photography and contact prints are estimated to cost $30,000 and would be reimbursed ftom the allocated contingency fund for the Power Engineers contract ($45,000 left). A budget increase will not be necessary. In order to allow Power to schedule the flights and take advantage of the short time available, we would need to authorize this work within the next few days. Your approval and response via FAX is therefore appreciated. I have already obtained verbal approval from AEG&T, HEA, MEA, ML&P, SES and FMUS. I have anticipated GVEA will concur. CONCURRENCE: Date 5601 Minnesota Drive = P.O. Box 196300 + Anchorage, Alaska 99519-6300 Phone 907-563-7494 * FAX 907-562-0027 @aoz * 54/18/96 THU 14:17 FAK 7624693 CEA ENGINEERING April 18, 1996 Page 2 of 2 Concur in using approximately $30,000 from contingency funds of Power Engineers’ contract to accomplish aerial photography and contact prints for the Southern Intertie proposed routes. IPG CONCURRENCE: ALASKA ELECTRIC GENERATION AND TRANSMISSION COOPERATIVE, INC. Robert Hufman, Executive Manager Date ANCHORAGE MUNICIPAL LIGHT AND POWER Thomas R. Stahr, General Manager Date CITY OF SEWARD, LIGHT AND POWER DIVISION Dave Calvert, Utility Manager Date FAIRBANKS MUNICIPAL UTILITIES SYSTEM Frank Biondi, General Manager Date GOLDEN VALLEY ELECTRIC ASSOCIATION, INC. Michael P. Kelly, General Manager Date HOMER ELECTRIC ASSOCIATION, INC, Norm Story, General Manager Date MATANUSKA ELECTRIC ASSOCIATION, INC. Wayne D. Carmony, General Manager ” Date We appreciate your cooperation in this matter. Sincerely, Se arent General Manager ENB:OL-G/ahw c: Thibert Micha! Massin Dora L, Gropp IPG CW. 89590081, Sec., 2.1.2.1, RP 4/18/96 2225p CHUGACH ELE ASSOCIATION, INC! D ) i= Alaska Industrie] Dovelopment and Export Authority November 19, 1996 Ovm Alaska Industrial Development and Export Authority 480 West Tudor Road Anchorage, Alaska 99503 Attention: Mr. Randy Simmons, Acting Executive Director Subject: Southern Intertie, EIS Process Additional Community Working Group on the Kenai Peninsula Dear Mr. Simmons: The scope of work originally covered in our contract with POWER Engineers/Dames and Moore includes establishment of a Community Working Group (CWG) in Anchorage. During the interview process it has become apparent that a similar group on the Kenai Peninsula would benefit the EIS process greatly. The consultants propose to add the Kenai CWG in a manner where meetings in Anchorage and on the Kenai can be held “back to back” thereby eliminating additional travel for the project team. It has also become apparent in our first meetings with the agencies who cooperate in the EIS process that it will be necessary to have a representative of the engineering team at the agency meetings as well. This will result in a direct response to technical questions and allow the Construction Manager to concentrate on matters concerning the owners. POWER has offered to include these services for: $ 63,971 for the Kenai CWG, and $39,076 for POWER’s participation in the CWG and Inter Agency meetings Total $103,047 A complete copy of POWER’s proposal is included. This change represents approximately a 3% increase over the present contract limit of $3,347,765. It can be funded out of the allocated contingency funds of $304,342. 5601 Minnesota Drive * P.O. Box 196300 * Anchorage, Alaska 99519-6300 Phone 907-563-7494 * FAX 907-562-0027 Additional Community Working Group on the Kenai Peninsula November 19, 1996 Page 2 of 2 The IPG has approved an amendment for the above amount to POWER Engineers’ contract in their meeting on November 19, 1996. POWER Engineers/Dames & Moore intend to hold the first CWG meetings in December or January to coincide with the agency scoping process and we will have to authorize the additional CWG as soon as possible to allow the meetings to be scheduled in a timely manner. Your cooperation in approving this change is appreciated. Sincerely, CHUGACH ELECTRIC ASSOCIATION, INC. MH Eugene Bjornstad General Manager aa (oH IPG Utility General Managers Lee Thibert Mike Massin Dora Gropp W.O. E9590081, Sec.2 RF . BZ rcecufive Orece- AL; : CHUGACH ELECTRIC ach We ASSOCIATION, INC. rgack ‘R TW Ie ASSOCIATION, INC. f PEGE Ir \| WW G =|) - = November 18, 1996 Alaska Industrial Developmen and Export Authority Alaska Electric Generation & Transmission Cooperative, Inc. 1018 Galena Street Fairbanks, Alaska 99709 Attention: Mr. Robert Hufman, Executive Manager Subject: Southern Intertie, EIS Process Additional Community Working Group on the Kenai Peninsula Dear Mr. Hufman: The scope of work originally covered in our contract with POWER Engineers/Dames and Moore includes establishment of a Community Working Group (CWG) in Anchorage. During the interview process it has become apparent that a similar group on the Kenai Peninsula would benefit the EIS process greatly. The consultants propose to add the Kenai CWG in a manner where meetings in Anchorage and on the Kenai can be held “back to back” thereby eliminating additional travel for the project team. It has also become apparent in our first meetings with the agencies who cooperate in the EIS process that it will be necessary to have a representative of the engineering team at the agency meetings as well. This will result in a direct response to technical questions and allow the Construction Manager to concentrate on matters concerning the owners. POWER has offered to include these services for: $ 63,971 for the Kenai CWG, and $39,076 for POWER’s participation in the CWG and Inter Agency meetings Total $103,047 A complete copy of POWER’s proposal is included. This change represents approximately a 3% increase over the present contract limit of $3,347,765. It can be funded out of the allocated contingency funds of $304,342. It is recommended to add the work as proposed and amend the contract accordingly. 5601 Minnesota Drive * P.O. Box 196300 * Anchorage, Alaska 99519-6300 Additional Community Working Group on the Kenai Peninsula November 18, 1996 Page 2 of 2 POWER Engineers/Dames & Moore intends to hold the first CWG meetings in December or January to coincide with the agency scoping process and we will have to authorize the additional CWG as soon as possible to allow the meetings to be scheduled in a timely manner. Your cooperation in this matter is appreciated. Sincerely, ae . ao Eugene N. Bjornstad General Manager fh ahw Enclosure: Proposed budget in Kenai Community Working Group Meetings. c William R.Snell, Dennis McCrohan - AIDEA IPG Technical Committee Lee Thibert Mike Massin Bob Martin W.O. E9590081, Sec.2 RF Southern Intertie Route Selection Study - Phase 1B Subject: Additional CWG on the Denai Peninsula W.0.#E9590081 Preceding letter from Chugach was sent to IPG Utility General Managers and AIDEA as follows: Alaska Electric Generation & Transmission Cooperative, Inc. Attention: Mr. Robert Hufman 1018 Galena Street Fairbanks, Alaska 99709 Alaska Industrial Development & Export Authority Attention: Mr. William R. Snell, Executive Director 480 West Tudor Road Anchorage, Alaska 99503 c: Dennis V. McCrohan Anchorage Municipal Light and Power Attention: Mr. Thomas Stahr, General Manager 1200 East First Avenue Anchorage, Alaska 99501 c: Tim McConnell City of Seward, Light and Power Division Attention: Mr. Dave Calvert, Utility Manager P.O. Box 167 Seward, Alaska 99664 Fairbanks Municipal Utilities System Attention: Mr. Frank Biondi, General Manager P.O. Box 72215 Fairbanks, Alaska 99707 Golden Valley Electric Association, Inc. Attention: Mr. Michael Kelly, General Manager P.O. Box 71249 Fairbanks, Alaska 99707 c: Steve Haagenson Homer Electric Association, Inc. Attention: Mr. Norm Story, General Manager 3977 Lake Street Homer, Alaska 99603 c: Don Stead Matanuska Electric Association, Inc. Attention: Mr. Wayne Carmony, General Manager P.O. Box 2929 Palmer, Alaska 99645 c: Jim Hall (See attached CEA Distribution) November 19, 1996 OU i) ECEIVE 4 | OOM November 11, 1996 29 | ‘Alaska Industrial Bay Dora Gropp, PE and Export Authority Manager Transmission & Special Projects Chugach Electric Association 5601 Minnesota Dr. P O Box 196300 Anchorage, AK 99519-6300 Subject: Southern Intertie Project - Chugach Contract #95-208 Power Project # 120376 Proposed Change in Scope of Work, Kenai Community Working Group Meetings Dear Ms. Gropp, Our current scope of work for Public Involvement includes conducting interviews in Anchorage and on the Kenai Peninsula to identify key individuals who could participate in a Community Working Group (CWG) in Anchorage and Kenai, and one set of five CWG meetings in Anchorage. Subsequent to our interviews on the Kenai Peninsula, our work plan states that we will recommend whether a CWG on the Kenai Peninsula is needed, based on those interviews. Our current scope includes Dames and Moore planning and conducting the Anchorage CWG meetings, along with a total of nine Agency Interdisciplinary Team meetings. Power Engineers participation in the Anchorage CWG is limited to three of the five meetings, and is limited to five of the nine Interdisciplinary Team meetings under our current scope of work. Proposed Additional Work and Change in Scope Based on the results of our interviews with key individuals, the purpose of this letter is to propose a change in our scope of work to include: e A set of five CWG meetings on the Kenai Peninsula e Power Engineers attendance at all five (5) Anchorage CWG meetings e Power Engineers attendance at all nine (9) Agency Interdisciplinary Team Meetings Attached is a summary of the results of our interviews and a detailed explanation of why we are recommending adding these activities to our public involvement program. In brief, the public interest in this project is high, due to their concern for potential impacts that may result from the Project, and the visibility of other intertie projects and power outages in Alaska. Several of the interviewees stated that the CWG meetings would be critical, both for Anchorage and on the Kenai Peninsula. We strongly recommend CWG’s for both Anchorage and the Kenai Peninsula. In addition, it has become apparent HLY 0000 POWER Engineers, Incorporated EE a a, Phone (208) 788-3456 Fax (208) 788-2082 3940 Glenbrook Dr. * P.O. Box 1066 Hailev Idaho 83333 elopmen Chugach Electric Association November 11, 1996 Page 2 as a result of our agency meetings to date that it would also be very beneficial for Power Engineers to be present at each of the CWG and Agency ID Team meetings. Please refer to the attachment for more details. Proposed Change in Budget The proposed additional work would effect our current budgets for Tasks 1, 2, 3, 4, and 5. Attached is a detailed Budget Summary and breakdown of our proposed labor and expenses for this additional work, for each of the Tasks. In preparing the proposed budget, where possible we have minimized labor and expenses for the Anchorage and Kenai CWG’s, by combining the proposed activities with currently budgeted CWG and ID Team meetings, and by planning to hold the Anchorage and Kenai CWG’s on consecutive days. In this way we have tried to limit the cost of the proposed additional work. In order to be able to take advantage of the cost reductions realized through scheduling the Kenai CWG’s on consecutive days with the Anchorage CWG meetings, we need to have approval of this change in scope by November 22. This is because our first Anchorage CWG meeting is scheduled for December 1996, and we need time to invite all participants to attend the meetings, and to agree on a schedule for the meetings. Schedule The addition of these activities would not change the major schedule milestone dates, as the proposed additional meetings would dovetail into our existing schedule and work plan. Please advise with any questions or comments you may have. We look forward to discussing this with you. Sincerely, POWER Engineers, Inc. KL (lla se be Randy Pollock, PE Project Manager #) % EAS Southern Intertie Project Summary of Proposed Budget Power Engineers and Dames Moore Summary of Proposed Budget Kenai CWG and PEI attendance at all Anchorage CWG and ID Team Meetings Power Engineers Dames & Moore* Total Labor Expenses L&E L&E Task 1 - Scoping $7,980 $3,015 $10,995 $12,794 $23,789 Task 2 - Inventory $4,431 $1,660 $6,091 $12,794 $18,885 Task 3 - Impact Assessment/Mitigation Planning $7,098 $2,710 $9,808 $12,794 $22,602 Task 4 - Alternative Selection $5,313 $1,965 $7,278 $25,588 $32,866 Task 5 - Draft EIS $3,549 $1,355 $4,904 $0 $4,904 Totals $28,371 $10,705 $39,076 $63,971 $103,047 * Includes 2% Subcontractor Markup November 11,1996 Budget Summary, Page 1 Southern Intertie Project Detail of Proposed Budget Power Engineers and Dames Moore Task 1 - Scoping Additional work includes preparation, attendance, and follow-up for one(1) new CWG meeting in Kenai by D&M and Power, and Power to attend one(1) additional CWG in Anchorage, and one(1) additional ID Team Meeting Total Hrs. Rate/Hr. PEI Labor Tabulation Sr. Project Manager 56 $110.25 Project Engineer 8 $93.45 Staff Support 24 $44.10 PE! Labor PEI Expense Tabulation Airfare - Lower 48 Airfare - Anchorage/Kenai Per Diem Rental Car Phone/Fax/Misc PEI Expenses PEI Labor and Expenses Dames and Moore - Subcontractor Costs with 2% markup Total Labor and Expenses: Task 1 - Scoping Task 2 - Inventory Additional work includes preparation, attendance, and follow-up for one(1) new CWG meeting in Kenai Proposed Budget $6,174 $748 $1,058 $7,980 $1,800 $300 $450 $165 $300 $3,015 $10,995 $12,794 $23,789 by D&M and Power, and Power to attend one(1) additional ID Team Meeting Total Hrs. Rate/Hr. PEI Labor Tabulation Sr. Project Manager 32 $110.25 Project Engineer 4 $93.45 Staff Support 12 $44.10 PEI Labor PEI Expense Tabulation Airfare - Lower 48 Airfare - Anchorage/Kenai Per Diem Rental Car Phone/Fax/Misc PEI Expenses PEI Labor and Expenses Dames and Moore - Subcontractor Costs with 2% markup Total Labor and Expenses: Task 2 - Inventory November 11, 1996 Proposed Budget $3,528 $374 $529 $4,431 $900 $200 $300 $110 $150 $1,660 $6,091 $12,794 $18,885 Budget Summary, Page 2 Southern Intertie Project Detail of Proposed Budget Power Engineers and Dames Moore Task 3 - Impact Assessment/Mitigation Planning Additional work includes preparation, attendance, and follow-up for one(1) new CWG meeting in Kenai by D&M and Power, and Power to attend one(1) additional ID Team Meeting Total Hrs. Rate/Hr. PE! Labor Tabulation Sr. Project Manager 48 $110.25 Project Engineer 8 $93.45 Staff Support 24 $44.10 PE! Labor PEI Expense Tabulation Airfare - Lower 48 Airfare - Anchorage/Kenai Per Diem Rental Car Phone/Fax/Misc PE! Expenses PEI Labor and Expenses Dames and Moore - Subcontractor Costs with 2% markup Total Labor and Expenses: Task 3 - Impact Assessment/Mitigati Task 4 - Alternative Selection Additional work includes preparation, attendance, and follow-up for two(2) new CWG meeting in Kenai Proposed Budget $5,292 $748 $1,058 $7,098 $1,800 $200 $300 $110 $300 $2,710 $9,808 $12,794 $22,602 by D&M and Power, and Power to attend one(1) additional CWG in Anchorage. Total Hrs. Rate/Hr. PEI Labor Tabulation Sr. Project Manager 40 $110.25 Project Engineer 4 $93.45 Staff Support 12 $44.10 PE! Labor PEI Expense Tabulation Airfare - Lower 48 Airfare - Anchorage/Kenai Per Diem Rental Car Phone/Fax/Misc PEI Expenses PE! Labor and Expenses Dames and Moore - Subcontractor Costs with 2% markup Total Labor and Expenses: Task 4 - Alternative Selection November 11, 1996 Proposed Budget $4,410 $374 $529 $5,313 $900 $300 $450 $165 $150 $1,965 $7,278 $25,588 $32,866 Budget Summary, Page 3 Southern Intertie Project Detail of Proposed Budget Power Engineers and Dames Moore Task 5 - Draft EIS Additional work includes preparation, attendance, and follow-up for Power to attend one(1) additional ID Team Meeting Proposed Total Hrs. Rate/Hr. Budget PEI Labor Tabulation Sr. Project Manager 24 $110.25 $2,646 Project Engineer 4 $93.45 $374 Staff Support 12 $44.10 $529 PE! Labor $3,549 PEI Expense Tabulation Airfare - Lower 48 $900 Airfare - Anchorage/Kenai $100 Per Diem $150 Rental Car $55 Phone/Fax/Misc $150 PEI Expenses $1,355 PEI Labor and Expenses $4,904 Total Labor and Expenses: Task 5 - Draft EIS $4,904 Summary of Tasks 1 through 5 Proposed Budget Addition Total PEI Labor and Expenses $39,076 Total Dames and Moore Labor and Expenses $63,971 Total Labor and Expenses $103,047 November 11, 1996 Budget Summary, Page 4 Dames and Moore Labor Tabulation Mtg.1 Bergdale 8 Tetherow 16 Ranta 24 Moss 40 Support 24 Total Labor Mtg. 2 8 16 24 40 24 Dames and Moore Expense Tabulation Reproduction (Meeting Materials) Southern Intertie Project Dames and Moore Kenai CWG - Proposed Budget Mtg. 3 8 16 24 40 24 Travel (R/T Anchorage-Kenai, including CWG member) Per Diem (including CWG member) Car Rental Room Rental (including refreshments) Phone/Fax Mailing Misc Total Expenses Total D & M Expenses and Labor Two percent (2%) markup Total D & M with markup Mtg. 4 8 16 24 40 24 Prorated over 5 Meetings (Total Expenses and labor divided by 5) Two percent (2%) markup Total D & M with markup per CWG meeting Dames and Moore Budget by Task Labor Expenses Task 1 $10,346.15 $2,448.00 Task 2 $10,346.15 $2,448.00 Task 3 $10,346.15 $2,448.00 Task 4 $20,692.29 $4,896.00 Total November 11, 1996 Total $12,794.15 $12,794.15 $12,794.15 $25,588.29 $63,970.73 Mtg. 5 Total Hrs. 8 16 24 40 24 $1,500.00 $3,000.00 $3,000.00 $500.00 $1,500.00 $1,000.00 $500.00 $1,000.00 $12,000.00 40 80 120 200 120 S$/Hr. $261.41 $164.06 $72.18 $57.73 $57.73 Total $ $10,456.40 $13,124.80 $8,661.60 $11,546.00 $6,927.60 $50,716.40 $12,000.00 $62,716.40 $1,254.33 $63,970.73 $12,543.28 $250.87 $12,794.15 < L Page 5 Southern Intertie Project Power Engineers Kenai and Anchorage CWG - Detail of Proposed Budget Additions and Additional ID Team Meetings Round Trip from Lower 48 Preparation for and attendance at one CWG or ID Team Meeting Power Engineers Labor Tabulation Sr. Project Manager 24 Travel 8 Meeting 8 Preparation 8 Project Engineer (support) 4 $93.45 Staff Support 12 $44.10 Total Labor $110.25 Power Engineers Expense Tabulation Airfare - Lower 48 $900.00 1 Per Diem $150.00 Rental Car $55.00 2 Phone/Fax/Misc Total Expenses Total Expenses and Labor Added Labor and Expenses when an Anchorage and Kenai CWG can be combined on the same trip. It is assumed that the Anchorage and Kenai CWG meetings would be on consecutive days Power Engineers Labor Tabulation Sr. Project Manager 8 Power Engineers Expense Tabulation $110.25 Airfare - Anchorage/Kenai $100.00 Per Diem $150.00 i Rental Car $55.00 Total added Labor and Expenses Tabulation of CWG and ID Team Meetings $2,646.00 $373.80 $529.20 $3,549.00 $900.00 $300.00 $110.00 $150.00 $1,460.00 $5,009.00 $882.00 $100.00 $150.00 $55.00 $1,187.00 Current Meetings (and PEI additional proposed) - CWG Meetings (Anchorage only) and ID Team Meetings CWG Meetings ID Team Meetings D&M PEI PE! New D&M Meetings Budgeted Budget Budget Proposed Budget Task 1 1 0 1 1 0 Task 2 1 1 0 1 0 Task 3 1 1 0 1 0 Task 4 2 1 1 1 1 Task 5 3 2 Task 6 2 2 Totals 5 3 2 9 5 Proposed Meetings for the Kenai and Anchorage CWG Meetings and Proposed Budget Proposed CWG Trips KenaiCWG Anchorage CWG PEI PEI PEINew Round Meetings Proposed Budget Proposed Trip Task 1 1 0 1 1 Task 2 1 1 0 0 Task 3 1 1 0 1 Task 4 2 1 1 1 Task 5 Task 6 Totals § 3 2 3 November 11, 1996 PEI Budget Proposed Combined Adder 1 1 0 2 PEI New 1 kROo-0O-4 Round Trip 1 ROR O-2 Proposed ID Trips Combined Adder 0 eceooo°coe Page 6 Labor Tabulation Sr. Project Manager Project Engineer Staff Support Total Labor Expense Tabulation Airfare - Lower 48 Airfare - Anchorage/Kenai Per Diem Rental Car Phone/Fax/Misc Total Expenses Total Labor and Expenses Round Trips Hrs number 24 3 4 3 12 3 $$ number $900.00 3 $100.00 3 $150.00 3 $55.00 3 $150.00 3 Southern Intertie Project Power Engineers Kenai and Anchorage CWG - Detail of Proposed Budget Additions and Additional ID Team Meetings Power Engineers - Kenai and Anchorage CWG Proposed Budget Combined Adder hrs ° $$ 100 150 55 number an number annan Power Engineers - Four additional ID Team Meetings Proposed Budget Labor Tabulation Sr. Project Manager Project Engineer Staff Support Total Labor Expense Tabulation Airfare - Lower 48 Airfare - Anchorage/Kenai Per Diem Rental Car Phone/Fax/Misc Total Expenses Total Labor and Expenses Round Trips Hrs. number 24 4 4 4 12 4 $$ number $900.00 4 $100.00 4 $150.00 4 $55.00 4 $150.00 4 Combined Adder hrs number 8 0 0 0 0 0 $$ number 0 0 100 0 150 0 55 0 0 0 Total Hrs. 112 12 36 Total Hrs. 96 16 48 Total CWG and ID Team Additional Proposed Budgets - Labor and Expenses November 11, 1996 Proposed Rate/Hr. Budget $110.25 $12,348.00 $93.45 $1,121.40 $44.10 $1,587.60 $15,057.00 $2,700.00 $800.00 $1,200.00 $440.00 $450.00 $5,590.00 $20,647.00 Proposed Rate/Hr. Budget $110.25 $10,584.00 $93.45 $1,495.20 $44.10 $2,116.80 $14,196.00 $3,600.00 $400.00 $600.00 $220.00 $600.00 $5,420.00 $19,616.00 $40,263.00 Page 7 TECHNICAL PROPOSAL FOR COMMUNITY WORKING GROUPS FOR THE ANCHORAGE AND KENAI PENINSULA AREAS SOUTHERN INTERTIE PROJECT Prepared by DAMES & MOORE 5600 B Street Anchorage, Alaska 99518 October 25, 1996 D&M Job No. 09203-007-050 INTRODUCTION The purpose of this proposal is to recommend a Community Working Group (CWG) for the Kenai Peninsula, as well as an integrated Anchorage and Kenai Peninsula CWG approach. The April 15, 1996 proposal (Revision 1) for the Southern Intertie Environmental Impact Statement (EIS) and Preliminary Engineering Program identified the CWG approach as a part of the Public Involvement Program. The proposal outlined the purpose and role for a CWG in Anchorage, and proposed a series of interviews to determine the appropriateness of a CWG to represent the interests of the Kenai Peninsula. This proposal contains the following: ¢ Requirement for Kenai Peninsula CWG * Approach to identifying CWG members and recommendations for Anchorage and Kenai CWG members; * Outline of CWG meetings and schedule; * Interaction between Kenai area and Anchorage CWGs; and * Interaction between CWGs and agency interdisciplinary teams. REQUIREMENT FOR A KENAI PENINSULA CWG: We strongly recommend CWG’s for both the Anchorage and the Kenai Peninsula. The basis for determining the appropriateness and necessity of a CWG to represent the Kenai Peninsula has been developed from a combination of 31 community leader and key informant interviews conducted in the Anchorage area, and 20 interviews conducted on the Kenai Peninsula. The individuals interviewed and a summary of key and observations are attached. In general, the representatives interviewed from both the Anchorage and Kenai Peninsula areas supported the value and importance of public involvement and input to the planning and National Environmental Policy Act process. Specifically, they felt that the input through CWG’s with broad representation and diverse interests would be very beneficial to the pubic involvement program. Some stated that CWG’s would be critical, both for Anchorage and the Kenai Peninsula areas. The need for the Kenai Peninsula CWG is both technical and political. Land use, ownership, recreation, visual and native issues, among others, require the technical support of a Kenai Peninsula CWG to assist in developing criteria for mitigation on route selection. In addition, there is a perception from many of the individuals interviewed that the need for the project is primarily SOUTHERN INTERTIE PROJECT OCTOBER 25, 1996 D&M Jos No. 09203-007-050 1 to benefit Anchorage, that the Kenai Peninsula’s interests will be overshadowed, and that project decisions will be driven by the interests associated with the Anchorage area. In summary, we have confirmed our initial proposal to create a CWG in the Anchorage area, and established the need for a Kenai Peninsula CWG based on the following: . It is important to create equal representation in both the Anchorage and Kenai Peninsula areas in order to: 1) address local siting issues associated with alternatives on the Peninsula; 2) develop consistent public input to the route selection process; 3) provide equal representation for stakeholders to participate in the public involvement program; and 4) ensure that the Anchorage area does not dominate the process. APPROACH TO IDENTIFYING CWG MEMBERS AND RECOMMENDATIONS: The following is a five step approach to selecting members of the CWGs for the Anchorage area and Kenai Peninsula. The results of steps one through three have been completed. 1. Conduct key informant interviews to identify issues and concerns associated with the project. 2. Analyze issues identified through interviews by “profiling” each individual interview and creating an overall summary of issues. 3. Identify candidates for the CWG that will, as a group, represent the full range of issues that result from the interviews. (See attachment) 4. Propose CWG candidates and their representation of the issues to IPG. 5. Invite candidates to participate in the CWG process. SOUTHERN INTERTIE PROJECT OCTOBER 25, 1996 D&M Jos No. 09203-007-050 2 OUTLINE OF CWG MEETINGS AND SCHEDULE: The following is the proposed sequence of meetings planned for both the Anchorage and Kenai Peninsula CWGs. Representation from Dames & Moore and Power Engineers will be required at each meeting. D&M will organize and facilitate each meeting, provide materials, and follow-up communication. Engineering input will include meeting presentations, response to comments, and preparing follow-up materials, as required. Project Introduction and Scoping Review Schedule: December 1996 The purpose of this meeting will be to assemble members of the Anchorage and Kenai Peninsula CWGs to: ¢ Introduce members, ¢ Discuss and agree on roles, * Review status of EIS process including the Federal Lead Agency and cooperating agencies, ¢ Review project purpose, need, and alternatives, « Review results of scoping meetings, and ¢ Agree on project issues. Resource Inventory and Impact Assessment Criteria Schedule: January 1997 This will be a working session where the results of the resource inventory are reviewed and criteria for assessing environmental impacts are determined. Impact Assessment Results Schedule: March 1997 The purpose of this meeting will be to review the results of the environmental impact assessment for alternative routes and to discuss mitigation measures. Ranking of Alternative Route Schedule: May 1997 This meeting will give the CWGs the opportunity to review and comment on the ranking of alternative routes. Optional Meeting: We need to anticipate an additional meeting on a topic(s) that the CWGs want to spend more time on (i.e., EMF, property value issues, local routing issues, specific resource studies, ranking of alternatives). SOUTHERN INTERTIE PROJECT OCTOBER 25, 1996 D&M Jos No. 09203-007-050 3 In addition, other related tasks will include preparing meeting materials, preparing and mailing meeting minutes, informal communication with CWG members between meetings, and reviewing and incorporating CWG input into the study process. INTERACTION BETWEEN KENAI AREA AND ANCHORAGE CWGS: The alternative route comparison and decision analysis will originate on the Kenai Peninsula relative to the choice of the Tesoro, Enstar, or Quartz Creek alternatives. The strategic role of the Kenai CWG will be to share issues and concerns, and agree on criteria relative to the assessment and comparison of these routes. The ranking of these routes will be a strong influence on the termination point in the Anchorage area. As a result, the Anchorage CWG must be kept informed of the progress associated with Kenai CWG. Conversely, the issues associated with the alternative routes in Anchorage must be conveyed to the Kenai CWG. In order to facilitate the interaction between the two groups, we are proposing that a rotating member of each CWG attend the other CWG meetings. This will allow for a direct exchange of information and unify the process. INTERACTION BETWEEN CWGs AND THE INTERAGENCY INTERDISCIPLINARY (ID) TEAM: As noted in our proposal, we are planning to conduct a series of ID team meetings with the lead and cooperating agencies at key milestones throughout the study process. The interaction between the ID team and the CWGs is illustrated on Figure 1. SOUTHERN INTERTIE PROJECT OCTOBER 25, 1996 D&M Jos No. 09203-007-050 4 FIGURE 1 INTER-AGENCY/COMMUNITY WORKING GROUP INTERACTION INTERAGENCY STUDY COMMUNITY INTERDISCIPLINARY (ID) PROCESS/TASKS WORKING TEAM GROUP (CWG) SCOPING REVIEW/ ISSUES PUBLIC SCOPING MEETINGS SCOPING REVIEW/ ISSUES TASK 1 ISSUE IDENTIFICATION TASK 2 INVENTORY BASELINE INVENTORY REVIEW INVENTORY REVIEW TASK 3 DEVELOP AGENCY IMPACT DEVELOP CWG INPUT TO ASSESSMENT IMPUT TO ASSESSMENT CRITERIA CRITERIA ASSESSMENT CRITERIA TASK 3 REVIEW ENVIRONMENTAL REVIEW ASSESSMENT IMPACT ASSESSMENT/ ASSESSMENT MITIGATION PLANNING TASK 4 REVIEW RANK REVIEW AND ALTERNATIVES AND COMMENT ! COMMENT ESTABLISH AGREEMENT ON RANKING OF ALTERNATIVE ROUTES TASK 4 IPG REVIEW PROPOSED AND ROUTE COMMENT TASK 5 ENVIRONMENTAL ANALYSIS REPORT CHUGACH ELECTRIC ASSOCIATION, INC. CONTRACT NO. 95-208 Bn a | SOUTHERN INTERTIE PROJECT OCTOBER 25, 1996 - COMMUNITY WORKING GROUP ISSUES - PRELIMINARY COMMUNITY WORKING GROUP RECOMMENDATIONS FOR INFORMATION CONTACT: - Tim R. Tetherow, ASLA Randy Pollock, P.E. Niklas O. Ranta Mike Walbert, P.E. 344 POWER ENGINEERS, INC. + P.O. BOX 1066 + HAILEY, IDAHO 83333 (208) 788-3456 + FAX (208) 788-2082 DAMES & MOORE + 5600 B STREET + ANCHORAGE, ALASKA 99518-1641 (907) 562-3366 + FAX (907) 562-1297 INTRODUCTION This booklet contains information concerning the recent Community Working Group Interviews and outlines the major issues identified during the interview process. In addition, a preliminary list of CWG member recommendations is included. Selection of persons to interview were based on recommendations from Chugach Electric Association, community leaders, and Dames & Moore representatives. The intent is to develop a working group which represent a wide range of viewpoints and concerns. Selection criteria for the preliminary recommendations included the consideration of the following: . Interest in project ° Knowledge of issues and concerns related to transmission line projects . Previous experience on advisory boards or similar planning processes . Availability . Interaction within community - Connections with residents and peers in the local area . Diverse backgrounds SOUTHERN INTERTIE PROJECT Community Working Group (CWG) Interview Summaries ANCHORAGE AREA Key Points/Observations October 25, 1996 FEDERAL Col. Wm. Brown, Director, Physical Planning, Fort Richardson Army Base . meeting scheduled for week of 10-28 STATE E.A. Corky Caldwell, Aviation Operations Manager, Anchorage International Airport . Supported infrastructure development . Need to evaluate all lakes for impacts to float plane activity . Concerned about impacts to future development of International Airport - NO CONFLICTS . Current location of transmission line at north end of runway is acceptable, but it could become a problem when the runway is extended . Not interested in CWG LOCAL AGENCIES Mer einiatiie oe Ane) Community Planning and Development Thede Tobish, Senior Planner Lance Wilber, Transportation Planning Manager ° Concerned about visual and land use impacts to Oceanview and Bayshore areas . Possible conflict with New Seward Highway improvements - if they ever occur ° Compliance with Coastal Management Plan - Impacts to wetland areas . Overlap of issues with MOA planning MOA Utility Corridor Plan is not designed for this type of project Proposed prison at “C” Street and O’Malley Must adhere to planning regarding road right-of-way and incorporate existing easements Point Woronzof seems to be the best landfall Environmental process and permitting process should be conducted together - good idea to incorporate needs for 404 permitting and FAA requirements Either Lance or Thede would like to be on CWG - possibly both Physical Planning Division Caren Mathis, Physical Planning Manager Kathy Hammond, Planner Cooperative effort with current update of MOA Comprehensive Plan Interested in approach - well thought out program, should invite cooperative input into process Cautioned to include as much public involvement as possible Will the EA/EIS incorporate needs for all the agencies which require this type of study? Does not like transmission lines - impacts to scenery Public can become annoyed if not given enough information and opportunity to comment EMF is always a concern What would happen if the submarine lines were damaged - fish impacts? Are any substations going to be built along the way? Thede or Lance would most likely be the representatives from the MOA Division of Parks and Recreation David Gardner, Supervisor, Senior Landscape Architect Does this project produce any power for Whittier? Good Luck! Nobody wants a power line in their back yard. No lines through parks - current policy is to underground all transmission lines through parks. Conflict with proposed Tony Knowles Coastal Trail Visual pollution, conflict with trail system What did Chugach State Park have to say? Enstar pipeline seems to minimize disturbance and visual issues on the Peninsula Interested in being on CWG NATIVE CORPORATIONS Cook Inlet Region Incorporated Mike Franger, Land Manager William Tai, Senior Land Management Officer Fire Island is CIRI land Would like a substation on the island Must consider all alternatives to get public approval, nobody wants it in their back yard No major concerns specific to CIRI lands - but Native groups may have their own Should contact Native Groups on the Peninsula (provided contact list) Should get a hold of the DOT mailing list for the recent studies they completed Interested in CWG BUSINESS/ECONOMIC GROUPS Dea Turner, President, Alaska Association of Realtors . Will provide additional contacts . Liked idea of including Community Councils being contacted . Environmental groups will be “after” any project like this . Concerned about health effect - EMF . Power lines will disrupt neighborhoods ° Visual impacts - can they be buried . Will the submarine routes effect fishing in the Inlet? . Interested in CWG Paula Easely, Vice President, Anchorage Chamber of Commerce ° EMF concerns - just read about cancer in the paper ° “Don’t want to see something ugly ... look at the Glen Highway” ° Limit noise, Power lines seem to make noise . Any connection with Unidentified Flying Objects (UFOs), has seen outages occur from encounters . Interested in CWG David Pease, Lawyer, Private Practice ° Family is longtime resident of Anchorage area . Concerned about disruption to Potter Marsh, waterfowl ° Who is the transmission line going to effect - land use . Will any other alternatives be considered? “looks like their might be additional options” Railroad corridor seems acceptable through town but will be difficult to get to from the south (Potter Marsh) Very interested in process, would like to be involved, especially if it goes forward Knows the Turnagain Arm area very well SCHOOL DISTRICTS Bob Crystal, Superintendent, Anchorage School District ° Transmission lines and schools are not compatible - health effects ° Should contact facility planning to discuss locations . Public will not allow transmission lines to have any chance of harming children ° Would like to recommend someone to be on CWG - Will get back to us, possibly himself or physical planning director Bob Price, Facilities Manager, Anchorage School District ° Very concerned about the location of lines in proximity to schools Interested in CWG, thinks it will provide the ability to influence the final decision ° Has discussed the project with the Superintendent and both agree the school district should be represented. Jim Tibor, Director of Facility Planning, University of Alaska Anchorage ° Primary concern is to limit encroachment on University site ° Agrees with purpose and need - doesn’t like all the outages ° Suggested contacting school professors to see if they would like to use this study as a class project ° Can the existing line be upgraded, seems to be a good idea . Not interested in CWG - “just keep me informed” DEVELOPERS James Misko, Developer, Empire North ° Anything that will promote growth is O.K. - but don’t harm the wildlife ° Anchorage will continue to grow - need power to do that Should put line through the Refuge, there is nobody there, the wildlife need habitat improvement anyway Interested in CWG CITIZENS ORGANIZATIONS Community Councils Al Tamagni, Federation of Community Council Delegate, Abbot Loop Visual pollution - stopped development of a subdivision recently because of that School located at Dowling - what impact could this project have on that? What will it cost and who will pay for it? Is the CWG a requirement under NEPA Interested in CWG Doug Perkins, Chair, Bayshore/Klatt New road alignment for both Klatt and Victor Roads - your alternative is not going to work Where would the submarine connection point be? - It should be screened and buried if possible Coastal trail is already an issues - this will be bigger than that - this will be a direct conflict Liked the Quartz Creek and Tesoro alternatives the best Some neighbors are environmentalists - will not approve of anything effecting wetlands Important to minimize change to the Bluffs Very interested in CWG Dave Wilson, Supervisory Board Member, Girdwood Will this directly help Girdwood - need better power for resort and economy Lots of experience in planning and public meetings Concerned about visual impact along highway Very supportive of project and need Significant experience with ice loading (ski lifts), the Tesoro route could have lots of ice problems due to the proximity of the Inlet and cold air. Will it enter town at all? Sixmile - Bird Point crossing seems best submarine alternative and worst visually Interested in CWG Indicated a diverse group will provide best results Barbara Weinig, Chair, Rabbit Creek Has stopped Chugach before on projects Legislation should be put into effect that will require all new Power lines to be built underground Anything that happens on the “Hillside” will bring everyone out in force Does not understand need - Appears that Chugach and utilities are just trying to make more money Mary Minder, Sand Lake Chugach Electric Board Member - Conflict of interest? Visual pollution - enjoy rural surroundings Julie Olsen, Chair, Old Seward/Ocenview Will this directly effect the Ocenview area? . Mentioned public concern over EMF . Suggested consolidating right-of way with other projects - comprehensive planning should be considered instead of piece by piece . Very supportive of process and interest in CWG James Johnston, Member, Hillside Area Land Owners . Potential impacts to wildlife, especially birds . Visual pollution is a major concern both in Anchorage and in Cooper Landing - owns a house there : . Wife is somewhat of a “Greenie” but rational regarding environmental issues . Potter Marsh provides very important wildlife habitat . Suggested contacting Friends of Potter Marsh - adhock advisory group . Questioned need for project - “are there any other alternatives?” . Very interested in CWG Judy Calt, Chair, Huffamn/O’Malley (telephone interview) ° Suggested contacting Barbara Weineg . Transmission line should be put in industrial corridors George Lyle, Chair, University . Interested in project, especially if near the University area ° Does not have the time to commit to the CWG and asked if anyone in his council area would be interested - none were. Ed Earnhardt, Chair, Taku/Campbell (Telephone interview) 10 ° Will see if anyone in council area is interested Mary-Jo Thill, Chair, Girdwood Advisor Board (Telephone interview) ° Suggested contacting Dave Wilson Ralph Rollman, Chair, Old Seward/Oceanview (Telephone interview) . Suggested contacting Julie Olsen Paul Snowden, Chair, Rogers Park (Telephone interview) . Project is too far from area ° Is it really needed? SPECIAL INTEREST GROUPS Cliff Aemes, Director, Alaska Center for the Environment (ACE) (Telephone interview) . CWG is critical, public will want input ° Group should be diverse ° ACE has not decided to attack this project yet . Suggested contacting Al Smith at the Wilderness Society . Currently over committed on advisory panels Kevin Harun, Alaska Center for the Environment (Telephone Interview) . Very interested in the project, but not able to commit the time to it . Would check to see if anyone would have the time 11 Alan E. Smith, Director, Alaska Chapter - Wilderness Society (Telephone interview) . Meeting to take place as soon as his schedule allows . Interested in being a representative . If Enstar route is selected - Wilderness Society and affiliates will attack it with everything they have . Enstar corridor is untouched wilderness 12 Tom Meacham, Ex-President, Chugach State Park Citizens Advisory Panel (Telephone interview) . Questioned need for project . Impacts to Chugach State Park should be avoided . Meeting to be scheduled as soon as he return from vacation . Interested in CWG process, would like to involved jt} SOUTHERN INTERTIE PROJECT Community Working Group Interview Summaries KENAI PENINSULA Key Points/Observations October 25, 1996 LOCAL AGENCIES Kenai Peninsula Borough Lisa Parker, Director, Planning Department (Telephone interview) ° Borough has already approved a road easement along the Tesoro pipeline ° Some of the remote residences along Tesoro pipeline will want it, others will not . Compliance with the Coastal Management Plan and the Kenai River Special Management Plan. ° Cooper Landing is sensitive - currently re-writing the community plan ° Conflicts and cumulative impacts associated with the road improvements in Cooper Landing . Provided a list of contacts ° May have time for CWG, thinks its a great idea City of Soldotna Tom Bodeker, City Manager Sharon Baldwin, Administrative Assistant ° No major concerns - outside of Soldotna City Limits Suggested contacting the Soldotna Airport - possible concerns for aviators . Enstar pipeline route seem least obtrusive . Tesoro route submarine crossing is risky 14 . Not interested in CWG unless the community wants them to attend City of Kenai Kerry Graves, City Manager . No concerns - outside of city limits . Transmission lines should be planned in advance of residential and commercial development . Not interested in CWG - too busy NATIVE VILLAGES AND GROUPS Kenai Natives Association, Inc. Diana Zirul, President Gary Williams, Administrator . Public planning process is key - Similar to the Whittier Access project . Public approach is excellent, agree that a working group will be beneficial to end result - everyone will not agree on result but should agree that process is OK. . Previous experience on this type of a project . Gary Williams is new but could be representative if needed Tyonek Native Association Bart Garber, Chief Financial Officer . Meeting scheduled for week of 10-28 Pt. Possession Group Dave Hanson, Representative . Provides pro-bono representation . Suggested contacting group members - fishing village is remote. They like it that way . Native Allotment is located at Point Possession - this cannot be condemned and the group will not like it going through 15 Will require congressional approval Could also impact the section within the refuge - it is for sale and this may cause price to go down Would assume an EIS is required if possibly affecting USFWS lands NEPA study must consider all alternatives equally Significant experience in a natural resource mediation To be cost effective incorporate all federal, state and local requirements into the Record of Decision Suggested Betty Gilcrest as possible CWG member for the Kenai working group Sam Kallander, Member Concerned about impacts to fishing sites by installation and operation of a submarine cable. Access to the fishing village and Point Possession is sometimes by air - Sammy was concermed that overhead lines could impact the landing/takeoff of airplanes on the beach Villagers have lived there since Captain Cook first came to the Cook Inlet. They have a historic village and burial site located near the beacon on the west side of the Peninsula. Opposed to the transmission (either overhead or underground) on the allotment or in the vicinity Betty Gilcrest, Member May be able to attend CWG if her work schedule on the North Slope allows Does not approve of the project near the Point Possession lands Salamatof Native Association Jim Segura, President (telephone interview) Very interested in project 16 . Concerned about native lands - do not have a lot and do not want what they have disturbed . Person-to-person meeting scheduled for week of 09-30-96 Kenaitze Indian Tribe Sasha Lindgren, Representative . Cultural resources are a big concern . Kenaitze Indian Tribe doesn’t own lands but are concerned about the potential impacts to historic sites . Visual impacts are also a major concern - tourism BUSINESS/ECONOMIC GROUPS Ronald Johnson, Realtor, Real Estate Specialists- ERA ° Support anything that will let Kenai area grow ° Lots of property available for development . Does this project benefit Kenai at all, of just Anchorage - if so this wont be popular . Former member of City Council . Supportive of CWG idea and interested in being involved Joe Arness, General Manager, Kenai Merit Inn . Dad built the Arness Dock in Nikiski . Longtime resident - grew up in the area north Kenai ° Knows the area north of Captain Cook State Park very well . Will this project benefit the Kenai or just Anchorage? . Enstar route appear to be best option. The least amount of development would be impacted . Interested in CWG 17 Dave Feekan, Broker/Owner, REMAX ° Impacts to Resurrection Trail could be a problem . Can the right-of-way be used for mountain biking - this could be a benefit . Western coast of Kenai is desirable for development - transmission line could be a conflict . Interested in CWG SCHOOL DISTRICTS John Dalgren, Assistant Superintendent, Kenai School District . Interested in CWG . Not popular to harm School grounds - EMF could be a problem . Visual impacts are always a concern - what about burying the line through the refuge . North Kenai Schools could be in close proximity - this will not be acceptable CITIZENS ORGANIZATIONS Bob Baldwin, President, Cooper Landing Homeowners Association . Just completed 1 4 year planning effort in Cooper Landing . Preservation of aesthetics is a major concern - incorporated this into the plan Amount of land for an easement is a concern, right-of-way width should be minimized . Fact that the proposed transmission line is not in the plan does not mean that the transmission line cannot be built . Owns family property on the Lake (Kenai) Transmission lines are always perceived as being very large - What is size of this one? . Very interested in CWG David Rhodes, Resident, Cooper Landing 18 (Telephone interview) . Visual impacts a major concern in Cooper Landing ° Sixmile Creek Drainage is also sensitive - lots of recreation and fishing, residents will not like it ° Knows many of the residents in Hope and Sunrise . Avoid the Conservation easement along the mouth of Sixmile Creek. ° Would like to be on CWG Bill Stockwell, Member, Cooper Landing Homeowners Association . Anything that effects the fishery is going to be a problem ° Most residents like the rural lifestyle . If it does go through the area can the other line be taken down ° Interested in being on CWG Laura Measles, Director, Soldotna Chamber of Commerce (Telephone interview) . Positive about idea . Unclear on need ° Meeting to be scheduled Ted Whip, Resident, North Kenai Area . Suggested by Steve Braund . Meeting to be scheduled 19 PRELIMINARY RECOMMENDATIONS ANCHORAGE AREA COMMUNITY WORKING GROUP October 25, 1996 LOCAL AGENCIES 1. Municipality of Anchorage (MOA) Thede Tobish, Senior Planner 343-4224 2. MOA Parks and Rec. Dave Gardner, Director 343-4521 NATIVE CORPORATIONS 3. Cook Inlet Regional Corp. (CIRI) William Tai, Senior Land Manager 274-8638 BUSINESS/ECONOMIC GROUPS 4. Alaska Association of Realtors Dea Turner, Executive Vice President 563-7133 2 Anchorage Area Resident David Pease, Attorney 345-6322 20 SCHOOL DISTRICTS 6. Anchorage School District Bob Price, Director of Maintenance 343-4521 DEVELOPERS uk Empire North Jim Misko, Realtor 562-2520 CITIZENS ORGANIZATIONS 8. 10. ie 12. 3" 14. Abbott Loop Community Council Al Tamagni, FCC Delegate 562-3938 Bayshore/Klatt Community Council Doug Perkins, Chair 349-6835 Girdwood Supervisory Board Dave Wilson, Board Member 783-2707 Hillside Area Land Owners James L. Johnston, Member 346-3784, 346-7124 Old Seward/Oceanview Community Council Julie Olsen, Chair 345-6575 Rabbit Creek Community Council Barbara Weinig, Chair 345-1599 Taku/Campbell Community Council Ed Earnhardt 561-2996 21 SPECIAL INTEREST GROUPS 15. | Chugach State Park Advisory Board Tom Meacham, Ex-President 346-1077 22 PRELIMINARY RECOMMENDATION KENAI PENINSULA AREA COMMUNITY WORKING GROUP October 25, 1996 LOCAL AGENCIES 1. Kenai Peninsula Borough Lisa Parker, Planning Director 262-8618 NATIVE VILLAGES AND GROUPS Ds Kenai Natives Association, Inc. Gary Williams, Administrator 283-4851 3 Point Possession Inc. Betty Gilcrist, Director 262-6899 4, Point Possession Inc. Sammy Kallander, Director 333-6794 D5 Salamatof Native Association Jim Segura, President 283-7864 6. Tyonek Native Corporation Bart Garber, CFO 272-0707 de Kenaitze Indian Tribe Sasha Lindgren 283-3633 BUSINESS/ECONOMIC GROUPS 8. Commercial Fisherman Association Ted Whip, Member 248-9501 23 10. 1: 12% 13° ERA - North Kenai Real Estate Specialists Ron Johnson, Realtor 775-5153 Kenai Chamber of Commerce Laura Measels, Director 283-7989 Kenai Merit Inn Joe Arness, General Manager 283-6131 REMAX of the Peninsula Dave Feekan, Owner/Realtor 283-5888 Soldotna Chamber of Commerce Justine Polzin, Director 262-9814 SCHOOL DISTRICTS 14. Kenai School District John Dalgren, Associate Superintendent 562-5846 CITIZENS ORGANIZATIONS IBY 16. Cooper Landing Resident David Rhodes, Photographer 595-1314 Cooper Landing Homeowners Association Bob Baldwin, President 562-2428 24 CHUGACH ELECTRIC ASSOCIATION, INC. Cikee ASSOCIATION, INC. oar (n\ hh ECEWE|) October 8, 1997 D w WY Alaska Industrial Development evelopment and Export Authority Alaska Indust ial oie 480 West Tudor and Export Authority Anchorage, Alaska 99503 Attention: Mr. Dennis V. McCrohan, P.E., Deputy Director, Project Development and Operations Subject: Southern Intertie - EIS Process DFI Economic Feasibility Study Update Dear Mr. McCrohan: We have received your letter of October 6, 1997 and wish to apologize for inadvertently bypassing the distribution of the above subject report to your office. We will make a conscious effort in the future to ensure that AIDEA is included on the cc: list for items distributed to the IPG for this project. At the last distribution of this report however, there has since been an additional update (August 1997, Revision 1). The attached page is an explanation of the revisions made followed by the report itself. As of this transmittal, all IPG participants and AIDEA will receive this report. Again, we extend our apologies for the error. If there are any questions, please contact me at 762-4626 by telephone, or fax to 762-4617 or by e-mail to dora_gropp@chugachelectric.com. Sincerely, Dora L. Gropp, P.E. Transmission & Special Projects DLG/ahw (CNDATA\ANNALISA|WPDOCS E9908 \PHIB\AIDEAOOI.LTR Enclosure: “Review and Update of Economic Feasibility of Southern Intertie Project” Prepared by Decision Focus Incorporated, August 1997, Revision 1. -. Le c: - W.O.4E9590081, Sec.,2221 CC. \) RS ( KL / Sout us RF 5601 Minnesota Drive * P.O. Box 196300 * Anchorage, Alaska 99519-6300 Phone 907-563-7494 * FAX 907-562-0027 Review and Update of Economic Feasibility of Southern Intertie Project Prepared by: Stephen Haas Annette Hulse Decision Focus Incorporated 650 Castro Street, Suite 300 Mountain View, California 94041-2055 (415) 960-3450 Prepared for: Power Engineers Incorporated 3940 Glenbrook Drive Hailey, ID 83333 August 1997 Revision 1 TABLE OF CONTENTS Introduction and Summary... 1.1 Background........ 1.2 Updated Benefits Estimates 1.3 Range of Benefits 1.4 Additional Analysis .........sssssssssssesssesssnessssesnsssnessnessneecsneccsnecssnsesnecensecsneessnees 3 Benefits Estimation Methodology ......s..ssssssssssssesesssneessnseceneccsssnessssneessanecsssneesennseesene 4 2.1 Capacity Sharing........scsssssssssssssssssssssssesssnsenecensecnsecssssnscssnsessnscessecsnsecnsesensesses 4 2.2 —_ Economy Energy Transfer........csssscsssssssessccssscssseessnsecssnsesessnneccsnscessnsecssnseesense 5 213) bReliability sees ee ee ee een 6 Updates of Key Data Items....ssssessssssssssessssessssacsssnsessnecssnscssssnecssssnessessccssaneccennecessues 6 3.1 Converting to 1997 Dollars .......s.sssscssssssesssseesseesnesenecsssecesnecssneesssessnecssessoneceses 7 3.2 Discount Rateccscrcsccsesssssssacessecsessonsatscassasseroressonsseesessonsonsecvesentsorsvenecessons cesseesconss 7 3.3 3.4 Generating Capacity: Planned Additions and Retirements... 3.5 Cost of New Combustion Turbine.........scssesssessssessecssneessse 9 3.6 HOES csscesessnseesoucssesseesosassossacsassesossossorerserserssssvesseroeceseascossecsoeevoesesotecssceseeese 9 3.7 —_ Level of Customer Outages.......ssscsssessessecsssesessesesneecsssnesesssnecsssnecesaneeessneess 11 3.8 —_- Value of a Customer Outage.......ssecssesssserssesssesssessseesssesssneessneccsnecsnsccenecesneees 11 LIST OF TABLES Table Page 1 Net Present Value of Benefits of Proposed SIP ..ssssssssssssssssssssecsseessnsesssnsesssneecsseeesssneees 2 2 Comparison of Peak Demand Forecasts for 2010 (MW)......cssssscssssessssecssssesssneeseseessese 8 3 Comparison of 1997 Fuel Price Forecast with Actual Prices........sssssssssssssssssseeeees 10 4 Comparison of Fuel Price Forecasts for 2010 Made in 1989 with those Made in 1997.........sssssssssessssssssssssssssseessssesssseesesnecssnvecssnsecesses 10 Decision Focus Incorporated - Confidential ii R2947a Rev1 1.0 Introduction and Summary 1.1 Background In 1989 Decision Focus Incorporated (DFI) carried out an economic analysis of the benefits of several proposed transmission line upgrades or additions in the Railbelt area of Alaska. The results of the analysis were documented in a December 1989 report entitled “Economic Feasibility of the Proposed 138 KV Transmission Lines in the Railbelt”. One of the lines studied in the 1989 analysis, the Southern Intertie Project (SIP) between Anchorage and Kenai, is currently under serious consideration, and an environmental impact statement (EIS) is being prepared for the proposed project. Because DFI’s 1989 analysis helped to justify the project, it is desirable to review that analysis to determine whether any changes have occurred in the years since 1989 that would alter the conclusions of the analysis. The December 1989 report estimated benefits of new transmission lines in six different categories: capacity sharing economy energy transfer reliability transmission losses operating reserve sharing state revenue from gas royalty and severance taxes SSO REN The current review and update, described in this report, concentrates on the first three categories, which accounted for about 90 per cent of the total benefits in the 1989 study. The update focused on the key data values underlying the estimates, determined how these data values have changed, and calculated the impacts on the benefits estimates. In addition, all benefit estimates were converted to 1997 dollars for easy comparison to current cost estimates of the proposed line. 1.2 Updated Benefits Estimates Table 1 summarizes the conclusions of the update. The dollar values shown are the net present value of benefits in each category over the expected 40-year life of the new transmission line. In 1989 the line was expected to come into operation in 1994, so the 1989 benefits values are for the period 1994-2033; the line is now planned to come into operation January 1, 2004, so the benefits values are for the period 2004-2043. The 1989 study calculated all present values in 1994, the year the line was expected to come into operation; here we display the present values of the individual categories for 2004, the year the line is now expected to come into operation, and the total for both 2004 and 1997; the 1997 value is simply the 2004 value discounted seven years at the indicated discount rate. Decision Focus Incorporated - Confidential R2947a Rev1 Table 1 Net Present Value of Benefits of Proposed SIP December 1989 December 1989 December 1989 New Value New Value Value (millions | Value (millions | Value (millions (millions of (millions of of 1990 $, 4.5% of 1997 $, 4.5% of 1997 $, 6% 1997 $, 4.5% 1997 $, 6% Category discount rate) discount rate) discount rate) discount rate) discount rate) Capacity Sharing 22.6 20.9 * in 1994 for 1989 study, and in 2004 for current update. The new total benefits estimate is substantial, but is lower than for the 1989 study, when expressed in the same year dollars, due primarily to lower forecasts of fuel prices and a lower cost of new generating capacity. The changes in benefits and the reasons for them are explained in Sections 2 and 3. The biggest change is for the capacity sharing and economy energy transfer benefits, which are significantly lower, primarily as a result of lower cost of new generating capacity and lower fuel price projections. Benefits of improved reliability are the same as the 1989 study, except for the conversion to 1997 dollars, because complete updating of the reliability numbers was beyond the scope of this update; it would require significant data analysis and review of a number of subjective assumptions. Benefits in the other categories are the same as the 1989 study, except for the conversion to 1997 dollars; they were significantly smaller than the first three categories, so we did not attempt to update them. To put the benefits of the proposed SIP in context, it is helpful to compare them to the current level of expenditures (total paid by retail customers) on electricity in the Railbelt. These are roughly $450 million per year. If we assume these will grow at 2 per cent per year, then the net present value of these expenditures over the period 2004- 2043, for which we have estimated the benefits of the proposed Kenai-Anchorage line, is about $9 billion. 1.3 Range of Benefits Estimating the future benefits of a project like the SIP is difficult because it depends on numerous factors that can not be predicted or measured with precision, ranging from future fuel prices to how much consumers would pay to avoid an outage to how the Decision Focus Incorporated - Confidential R2947a Rev1 Railbelt utilities will choose to operate their interconnected systems in the future. Asa result, there is necessarily a great deal of uncertainty and imprecision in the benefits estimates presented here. The December 1989 study showed a range of values within which the benefits were expected to lie. This review takes the midpoint of that range as a starting point, but does not try to update the range. This should not be interpreted as a failure to recognize the uncertainty and lack of precision; if anything, the range of possible benefits may be even wider than presented in the December 1989 study. (See page 6-1 of the Railbelt Intertie Feasibility Study — Final Report, prepared by the Alaska Energy Authority, March 1991 for further discussion of this point.) 1.4 Additional Analysis Time and budget constraints limited the extent of this review. In particular, we have not revisited operating scenarios for the Railbelt system, i.e., how the overall system is likely to be operated with and without the proposed line. Conditions and expectations have changed since the 1989 study. For example, at that time Bradley Lake was not yet on line, but was expected to provide spinning reserve; now it is on line, but is not providing spinning reserve. As another example, consideration is now being given to adding battery energy storage (BESS) or superconducting magnetic energy storage (SMES) to the Railbelt system; the value of the proposed transmission line could vary significantly if storage is added. If additional analysis of the benefits of the SIP is considered warranted, it should focus on the following areas: a Economy energy benefits: projections of how the entire Railbelt system would be operated, with and without the new line, should be developed, instead of simply adjusting the 1989 estimates in proportion to the change in projected fuel prices. a Spinning reserve benefits: projections of how the entire Railbelt system would be operated, with and without the new line, will impact spinning reserve costs as well. 7: Impacts of adding BESS or SMES in addition to the SIP to the Railbelt system; Anchorage Municipal Light and Power (AMLP) has estimated that the savings in spinning reserve costs from adding storage would be $1 million per year for AMLP alone, but only if there is adequate transmission capacity. a Reliability benefits: the assumptions about the extent to which unserved energy would be reduced by constructing the proposed line, and about the value of each unit of unserved energy, should be reviewed. Decision Focus Incorporated - Confidential R2947a Rev1 a Other potential benefits not included in either study, such as transmission system stability and economies of scale in installing new generating capacity. a Uncertainty in projections of fuel prices and load growth. Specifically, we recommend a re-examination of how the overall generating system is likely to be operated without the proposed line, with the proposed line, and with both the proposed line and BESS or SMES. Such a re-examination would require considerable interaction with staff of the IPG members, and would include factors such as unit commitment and dispatch policies, hydro-thermal coordination, spinning reserve, and transmission line loading policies. The re-examination would provide more credible values for the economy energy and spinning reserve benefits of the proposed transmission line. 2.0 Benefits Estimation Methodology This section outlines the methodology used for calculating the numerical estimates in each of the three major categories, summarizing the key assumptions and listing the major data items affecting the estimates. 2.1 Capacity Sharing Capacity sharing benefits occur when: © one region has a capacity shortfall (i.e., demand plus the required reserve margin exceeds the capacity available) another region has a capacity surplus e transmission links allow the first region to rely on excess capacity in the second region, even if only for a limited time Increased transmission capacity allows one region to rely more heavily on generation capacity in another region, for capacity as well as for energy. For the Railbelt, the SIP would allow Anchorage to rely on a greater portion of the Kenai Peninsula generation capacity surplus for meeting the Anchorage capacity requirement, thus deferring the need to build new generation capacity in Anchorage. There are two types of capacity sharing benefits: 1. As load grows in a region, enough capacity must be available to meet the peak load in that region plus a required reserve margin. Increased transmission capacity increases access to generation capacity in regions with surplus capacity, thus making it possible to defer adding generation capacity in the first region Decision Focus Incorporated - Confidential R2947a Rev1 2. The larger and more interconnected a system, the lower the reserve margin required to provide the same level of reliability. Increasing transmission capacity increases the level of interconnectedness for the Railbelt, allowing utilities to permanently avoid building some of the capacity that would have been constructed to maintain the desired reserve margin. Construction of the SIP would produce both types of capacity sharing benefits. Demand growth, taken together with available capacity, determines the timing of any capacity sharing benefits. Demand tends to grow over time, while unless new generating -units—are—installed, capacity holds-steady—or—shrinks-somewhat-due-to-——__— retirements. Therefore, capacity sharing benefits tend to first grow over time as surplus is eliminated in relatively capacity-poor regions, then fall as surplus also disappears in the relatively capacity-rich regions. The capacity sharing benefit in a year is the amount of capacity avoided or deferred in the year, measured in kilowatt-years, times the cost of a kilowatt-year of capacity. For the latter we use the annualized fixed cost of a new combustion turbine, including both the installed capital cost and the fixed operations and maintenance cost; this is a standard yardstick for measuring the value of capacity. key data items: e total generating capacity available e peak demand growth e required reserve margin e fixed cost of new combustion turbine 2.2 Economy Energy Transfers This benefit occurs when high cost energy in one area is displaced by lower cost energy from another area. In the Railbelt all available hydro energy, which uses no fuel and for which the variable cost is essentially zero, will be used with or without the proposed new transmission line. Thus the benefits in this category result from displacing electricity generated from thermal units (gas-fired or oil-fired) with electricity from other thermal units with lower variable costs. These lower costs may result from access to less expensive fuel or from some units being more efficient (converting a greater fraction of the energy content of the fuel to electricity) than others. The economy energy benefit is equal to the increased amount transferred between Kenai and Anchorage (as a result of the new line) times the difference in marginal variable operating costs between the two regions. Secondary impacts result from being able to better operate units at or near their optimal loading levels, and improved hydro-thermal coordination. Decision Focus Incorporated - Confidential R2947a Revi The variable costs of producing electricity, i.e., costs of economy energy, are roughly proportional to fuel prices. This means that higher fuel prices translate directly to a higher level of economy energy transfer benefits; a percentage increase in fuel prices translates to roughly the same percentage increase in economy energy benefits if all fuel prices in both regions are increased by the same percentage. Similarly, a reduction in price forecasts for all fuels translates directly to reductions in economy energy transfer benefits. Changes in load growth forecasts since 1989 may impact economy energy amounts transferred, also impacting the benefits in this category, but this is a smaller effect and has not been estimated. key data items: a fuel price projections a load growth projections 2.3 Reliability Reliability is determined by the number, magnitude, and duration of customer outages. Reliability benefits occur if customer outages are reduced as a direct consequence of constructing a new transmission line. The proposed SIP is expected to reduce both the frequency and duration of generation- and transmission-related outages, i.e., outages related to unexpected loss of generating units or the existing Anchorage-Kenai transmission line. In the event of an outage, unserved energy is defined as the electricity that would have been consumed if the outage had not occurred. The reliability benefit is equal to the expected reduction in unserved energy as a result of the proposed line times the value of each unit of unserved energy. Several studies have shown that the value per unit of unserved energy depends on the customer class affected and the duration of the outage. key data items: a reduction in unserved energy as result of new line a value of unserved energy 3.0 Updates Of Key Data Items The major factors that go into determining benefits of capacity sharing, economy energy, and reliability include: a discount rate Decision Focus Incorporated - Confidential R2947a Rev1 demand forecasts generating capacity: planned additions and retirements cost of new capacity fuel price projections level of customer outages (number, size, duration) and outage causes a value of customer outages Each of these is discussed below, followed by a qualitative discussion of the impact on benefits estimates given the new information. 3.1 Converting to 1997 Dollars The first challenge in comparing 1989 estimates with current estimates is to make sure that the numbers are all based on the same year’s dollars; this eliminates the effects of inflation that make a dollar today not as valuable as a dollar was 7 or 8 years ago. DFI’s 1989 benefits study expressed all values in 1990 dollars. For this update all values are expressed in 1997 dollars. Therefore, before we can compare the data from the previous study to the new information, we have to inflate it so that we can compare old values expressed in 1997 dollars to new values expressed in 1997 dollars. We have assumed an annual average inflation rate over the last 7 years of 3.23 per cent, which is the annual average increase in the Consumer Price Index from 1990 to 1997. With this inflation rate, a value of $1.00 in 1990 dollars corresponds to $1.25 in 1997 dollars. 3.2 Discount Rate In order to make simple comparisons between two or more multi-year streams of costs or benefits, the multi-year streams are usually converted to a net present value by discounting costs and benefits that occur in future years back to an initial year, and summing over all years. This means that costs or benefits that occur in the future carry less weight than those occurring now. For example, at a discount rate of 6 per cent, $1 of benefits in 1998 is worth $0.94 now, while $1 of benefits in 2010 is worth only $0.47 now. The choice of discount rate can make a significant difference to the net present value of a benefits stream if many of the benefits occur in the future. A lower discount rate gives relatively more weight to future benefits than a higher discount rate. Which discount rate to use for evaluating projects such as the SIP is not obvious. The discount rate is supposed to reflect the time preference of the party or parties making the decisions. Is this the state, the ratepayers, or some other entity? Should a higher discount rate be used to reflect the riskiness of the project? Decision Focus Incorporated - Confidential R2947a Rev1 We believe that for the SIP the appropriate discount rate should reflect the cost (or value) to the ratepayer of investing money today to capture future benefits. The cost of capital for the investing organization is a good measure of the cost to the ratepayer. For instance, Chugach Electric Association has an average historic cost of debt of about 8.6 per cent. This means that, on average, when Chugach has borrowed money in the past, it has paid a nominal interest rate of 8.6 per cent on the debt. The nominal interest rate includes inflation; to get the equivalent real interest rate we take out the effects of inflation. Fuel prices provided by Golden Valley Electric Association indicate a projected forward-looking inflation rate of 2 per cent, and historical inflation has been 2.5 to 3 per cent over the last 5 years. For this update of the 1989 study, we have used a discount rate of 6 per cent as representative of the real cost of capital for the Railbelt area (8.6 per cent nominal = 6 per cent real + 2.6 per cent inflation). Present values of benefits are shown in Table 1 using both 6 per cent and 4.5 per cent discount rates. Using a 6 per cent discount rate instead of 4.5 per cent, as was used in the 1989 study, with no other changes in assumptions lowers the present value of benefits by 15 to 20 per cent, depending on the pattern of benefits over time. For rates between 4.5 and 6 per cent, the present value of benefits would lie between those calculated using these two rates. Note that both the 4.5 per cent rate used in 1989 and the 6 per cent rate suggested here are real discount rates, i.e., rates excluding inflation. The switch from 4.5 to 6 per cent does not reflect any changes in underlying conditions, but rather a change in assumptions away from a rate mandated by a government agency to a rate more appropriate for a utility and its ratepayers. 3.3 Demand Forecasts Table 2 compares the demand forecast used in the 1989 study with current demand forecasts, by looking at the forecast for the year 2010. Table 2 COMPARISON OF PEAK DEMAND FORECASTS FOR 2010 (MW) Fairbanks Decision Focus Incorporated - Confidential R2947a Rev1 10 Table 3 Comparison of 1997 Fuel Price Forecast with Actual Prices [$/million Btu] 1989 Forecast of 1997 1989 Forecast of 1997 Actual Price 1997 Price Price (1990 $) (1997 $) (97 $) $1.98 $2.20 om Pil Coal1 |Chena $2.79 $3.48 Coal 2 |Healy $1.44 $1.80 NA - no data provided Table 4 compares the 1989 fuel price forecasts for 2010 with current fuel price forecasts for 2010. As in Table 3, all numbers are converted to 1997 dollars. We see a similar pattern, in that the prices forecast today for 2010 are 10 to 50 per cent lower than the prices that were forecast for 2010 in 1989. Table 4 Comparison of Fuel Price Forecasts for 2010 Made in 1989 With Those Made in 1997 [$/million Btu] 1989 Forecast of 1997 Forecast of 2010 Price 2010 Price (1997 $) (1997 $) $1.50 1989 Forecast of 2010 Price (1990 $) $253 $231 Fairbanks ‘Chena 6 $7.63 Seward North Fote 279 Coal 1 Coal 2 Decision Focus Incorporated - Confidential R2947a Revi 11 Lower fuel prices reduce the value of the benefits from economy energy. Without detailed system modeling (i.e., how each generating unit would be operated over the 40-year time horizon, with and without the proposed new transmission line), it is impossible to say precisely how much the benefits are reduced (see recommendation in Section 1.4). However, in aggregate, we would expect that if all fuel prices are lower by some percentage, then the benefits will similarly go down by about the same percentage. 3.7 Level of Customer Outages Two key assumptions about the impact of the new Kenai-Anchorage line were made in the 1989 study: a the new line would reduce outages (unserved energy) in the Kenai by about 55 per cent from historical levels (1986-1987); this assumption took into account the fraction of time that energy was flowing in each direction, and the likely impact of an outage for each direction of flow. a the new line would reduce outages in the Anchorage area by 30 to 60 megawatthours; this is based on avoiding 1 to 2 outages of 30 MW and one hour duration per year. The current update uses these same assumptions. New outage data has been provided, but it is incomplete, and completely redoing the reliability benefits component was beyond the scope of this update (see recommendation in Section 1.4). 3.8 Value of a Customer Outage Except for converting to 1997 dollars, we used the same assumptions as the 1989 study. About 88 per cent of outages are industrial or commercial, with the remainder residential. The outages that would be impacted by the proposed line range from a few minutes to a few hours in duration. Based on the distribution by customer class and duration, the average value of each kilowatthour of unserved energy avoided is about $22 (1997 dollars). Decision Focus Incorporated - Confidential R2947a Revi