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Home My WebLink AboutGalena Appendix E Reconnaissance Study of Energy Requirements & Alternatives 5-1982VIL-A 002 Galena RECONNAISSANCE STUDY OF ENERGY REQUIREMENTS AND ALTERNATIVES APPENDIX E: GALENA MAY 1982 PROPERTY OF: Alaska Power Authority 334 W. 5th Ave. Anchorage, Alaska 99501 Prepared by: Aint TABLE OF CONTENTS Section Page A - SUMMARY OF FINDINGS AND RECOMMENDATIONS ...............20000- E-1 A.1 - General .... cece cece ccc cece cee e eee tect eeeeceees E-1 A.2 - Alternative Plan Descriptions .......... cece eee e cence E-2 B - DEMOGRAPHIC AND ECONOMIC CONDITIONS ...........cc cece cece eeee E-5 Bil - Location ..... ccc ccc cece eee eee eeeeeenes E-5 B.2 - Population .... eee cc cece cece e eee tence eeeeees E-5 B.3 = ECOMOMY 2... cece cc cece cece eee cece cece e eee ence eeeeee E-5 B.4 - Government ........ cee cece eee c cece eect e eee eeeeeeee E-6 B.5 - Transportation 1... ccc cece ccc ccc cece teen ee eeeeees E-6 C - COMMUNITY MEETING REPORT ......... cece cece cece cece teen eeees E-7 D - EXISTING POWER AND HEATING FACILITIES ............ cece eee eee E-8 D.1 - Existing Power Facilities ........ ccc cece cece eee eee E-8 D.2 - Existing Heating Facilities ......... cee cece cee eee E-9 E - ENERGY BALANCE ........ eee cc cece cece cece et eeeeeeeaes E-11 F - ENERGY REQUIREMENTS FORECAST ........ ccc cece cece eee e eee eeeeee E-14 F.1 - Capital Projects Forecast ........... cece cece eee ceeeaee E-14 F.2 - Population Forecast ........ cc cece ee cece cece cence ences E-14 F.3 - Electrical Energy Forecast ......... cece eee cece eee eeees E-15 F.4 - Thermal Energy Forecast .........c cece cece cece cence ees E-17 G - VILLAGE TECHNOLOGY ASSESSMENT .......... cece cece e cece eee cece E-21 H - ENERGY PLAN DESCRIPTIONS AND ASSUMPTIONS ..............0000- E-25 H.1 - Base Case Loic cece cece eee e ete eeeeeeees E-25 H.2 - Alternative Plan "AY Joo. e cece cece cece cece ete eees E-27 H.3 - Alternative Plan "BY wo... cece ccc ccc cece e eee ceeees E-30 I - ENERGY PLAN EVALUATIONS .......... cee cece cece cece cette ee eeee E-34 I.1 - Base Case ... ee ccc ccc ccc cece eee e eee e eee e cence 1.2 - Alternative Plan "A" 1.3 - Alternative Plan "B" TABLE OF CONTENTS (Continued) J.6 Section Page J - COMMENTS AND DISCUSSION ......... cece cece e eect e eee e evens E-47 J.1 - Comments Received From Mr. Don Martin ...............0. E-48 J.2 - Comments Received From U. S. Department of the Army, Alaska District, Corps of Engineers ................085 E-57 J.3 - Comments Received From The Alaska Power Administration ........ cee cece cece cece eee ec eee eeneees E-61 J.4 - Comments Received From The State of Alaska, Department of Fish and Game .......... cece eee eee eee E-66 J.5 - Comments Received From U.S. Fish and Wildlife Service in Anchorage ........ cc cece cece cece cece eeeee E-69 Comments Received From U.S. Bureau of Land Management ....... cece cece cece cece eee eee ee teen eens E-74 No. an fF WwW MY N 10 11 LIST OF TABLES Title Comparative Estimated Electrical Energy Prices For Base Case and Alternatives ................ Energy Use Profile For Galena - 1980.......... Village Electric Energy Use Forecast .......... Net Thermal Requirements ..............ee eens Village Technology Assessment ..............0.45 Estimated Costs of Galena Base Case (Central Diesel With Waste Heat Recovery) ..... Estimated Non-Electrical Benefits of Base Case Estimated Costs of Galena Alternative Plan "A" (Hydro Power at Kalakaket Creek) ..... Estimated Non-Electrical Benefits of Alternative Plan "A"... . cece cece cece ee eee eee Estimated Non-Electrical Benefits of Alternative Plan "BY ooo... ccc e ec c eee eee ees E-3 E-12 E-16 E-19 E-24 E-35-36 E-37 E-39-40 E-41 £-43-44 E-45 Title LIST OF FIGURES Energy Cost Summary .......... ccc cece cece ccc ceeecececeuce Energy Balance Page E-4 E-13 E-18 GALENA E-1 A_- SUMMARY OF FINDINGS AND RECOMMENDATIONS A.1 - General Galena is located on the Yukon River approximately 50 miles upstream of the confluence with the Koyukuk River and 270 miles west of Fairbanks. Three electric power alternatives were evaluated in detail for this village including central diesel power with waste heat recovery (Base Case) > hydroelectric power at Kalakaket Creek (Alternative "A"), and hydroelectric power at Melozitna River (Alternative "B"). The following conclusions are drawn regarding energy use and energy alternatives for Galena. 1. Continued development of the central diesel power system, which has a waste heat recovery system already installed, appears to be the most economical means by which to produce power in Galena within the planning period of this study (years 1982 through 2001). Development of the hydroelectric potential at Kalakaket Creek does not appear to be an economical venture within the planning period under .consideration in this study. Given a relatively low electrical energy forecast for the region, development of the hydroelectric potential at the Melozitna River as a major regional approach to electrification does not appear to be an economical alternative to central diesel within the Planning period. Before this alternative is ruled out, however, further evaluation in a feasibility study should be given to the probable plant configuration and costs of constructing the site and transmitting power. Electrical energy forecasts for the region should be reviewed and updated. The forecasts should include involvement of industry and government at all levels. If major development takes place in the region (as some residents believe inevitable), the Melozitna project could possibly provide very economical and virtually inflation-proof power. Substantial savings in energy costs to homeowners could be achieved with an ambitious energy conservation program, including the widespread installation of more efficient heating systems. GALENA E-2 Evaluation of alternatives suggests impacts on electric power costs as indicated in Table 1. It should be noted that the energy cost figure in $/kWh is not necessarily the cost which would be billed to the ultimate customer. This figure, expressed in terms of 1981 dollars, does not take into account costs associated with distribution of energy within the village, which can add about $0.10/kWh to the customer's cost. The costs shown also do not indicate the effects of various government subsidy and grant programs which may be available. Prices include the benefit of fuel savings with diesel waste heat recovery in those cases where appropriate. Figure 1 illustrates projected costs of energy resources available to Galena. A.2 - Alternative Plan Descriptions A.2.1 - Base Case The Base Case studied for Galena addresses the continued development of the diesel-based central utility system (with waste heat recovery) presently serving the old and new sites. This plan has a net present worth of $20,220,000 for the period 1982 through 2041. A.2.2 - Alternative Plan "A" This alternative addresses the development of the hydroelectric potential at Kakakaket Creek with a run-of-the-stream power plant that could provide electric power from May through October starting in 1992. Central diesel would provide power to the village during the winter months. The net present worth of this plan is $22,463,000 for the period 1982 through 2041. A.2.3 - Alternative Plan "B" This alternative addresses the development of the hydroelectric potential at Melozitna River with a 20 MW plant coming on line in 1992. The project represents a major regional approach to electrification. The hydro plant would serve Galena, Ruby, Kaltag, Huslia, Koyuk, Nulato, and possibly others with year-round electric power. The net present worth of this plan is $46,263,000 for the period 1982 through 2041. Costs of this project allocated to Galena were prorated based on the village's electrical energy consumption. The present worth is based on a low electric energy forecast for the region. TABLE 1 COMPARATIVE ESTIMATED ELECTRICAL ENERGY PRICES FOR BASE CASE PLAN AND ALTERNATIVES Energy Base Case Plan Alternative "A" Alternative "B" Production Energy Price (a) Energy Price (b) Energy Price (c) Year (MWh) ($/kWh) ($/kWh) ($/kWh) 1982 1106 0.28 0.28 0.28 1983 1175 0.28 0.28 0.28 1984 1249 0.27 0.27 0.27 1985 1329 0.27 0.27 0.27 1986 1412 0.29 0.29 0.29 1987 1502 0.29 0.29 0.29 1988 1599 0.28 0.28 0.28 1989 1702 0.28 0.28 0.28 1990 1812 0.29 0.29 0.29 1991 1928 0.29 0.29 0.29 1992 2126 0.29 0.35 1.06 1993 2206 0.29 0.35 1.02 1994 2288 0.29 0.35 0.99 1995 2372 0.30 0.35 0.95 1996 2462 0.30 0.35 0.90 1997 2555 0.30 0.35 0.87 1998 2652 0.30 0.35 0.84 1999 2752 0.31 0.35 0.81 2000 2863 0.31 0.35 0.78 2001 2972 0.31 0.35 0.75 2002 2972 0.31 0.35 0.75 through 2041 Notes: (a) Central diesel with waste heat recovery (b) Hydropower at Kalakaket Creek (c) Hydropower at Melozitna River €-3 WN31V9 GALENA E-4 (UN1/$) 1SOD AOYANA g & 2 : Zz DELIVERED 8 8 Q ° 8 > 0 m 3 « © — <a 2 3 > | : r ¢ 8 8 ae 1809 A9YAN3 - FIGURE | GALENA GALENA E-5 B - DEMOGRAPHIC AND ECONOMIC CONDITIONS B.1 - Location Galena is located on the north bank of the Yukon River approximately 20 miles east of the confluence of the Koyukuk and the Yukon. It is 270 air miles directly west of Fairbanks and lies in the Koyukuk Lowland, a flat flood plain characterized by muskeg, sloughs, oxbow lakes, marsh and thaw lakes. B.2 - Population Date: 1960 1970 1980 19811 Population: 261 302 7652 8052 Because of the local availability of gravel, the military built an air field and Air Force base in Galena, and the size of the community has grown steadily since 1950. The village was severely flooded in 1971, and in 1975 development of a new town site began three miles away. Currently (1981) there are 174 residents at the old site, and 287 residents at the new site. The village is approximately two-thirds native. There are 198 housing units in the new and old sites. The school and city offices are located in new site, while the post office and hotel are in the old site. (There are 299 military personnel and 45 civilians at the U.S. Air Force Base. ) B.3 - Economy Galena's economy centers around its function as a regional "hub": state and federal agencies locate field representatives here, and the community is a transportation center for the surrounding villages. The U.S. Air Force Base is also an economic influence on Galena, employing some residents and drawing visitors to the village. Subsistence plays a role in many residents' lives, with salmon fishing in the Yukon during summer and trapping in winter. In 1981, the school employed 18; the city, 7; the 1 Local census 2 Includes 300 at air force base GALENA E-6 clinic, 20; Village Corporation (Gana-A-Yoo), 5-8; contractors, 2-3; a sawmill, 2 winter, 4 summer; Huntington Fisheries, 20-30 summer only. There are about 20 unemployed. Services include a post office, magistrate, state troopers, BLM fire base, FAA, state public works (aviation), a fire department, two air taxi operators, three stores, and a hotel. Miners use Galena as a supply point. B.4 - Government Galena was incorporated as a second class city in 1971, and as a first class city in 1976, and functions under a city council - manager and mayor government, elections being held annually the first Tuesday in October. The city has a 3 percent sales tax. Municipality owned facilities include water, refuse collection, and sewer. There is a school board, a planning and zoning commission, and several city employees, including a manager, clerk/treasurer, attorney, police chief, fire chief, and health coordinator. The native residents of Galena are shareholders in Gana-A-Yoo Corporation, incorporated in accordance with the terms of the Alaska Native Claims Settlement Act. B.5 - Transportation Galena is a regional transportation center with a 6,665 foot paved runway. The FAA maintains air traffic control and is equipped for instrument approach. Wien flies to Galena five days a week from Fairbanks and Anchorage, and Galena Air and Harold's Air are both based in Galena. There are no roads to Galena; and, passengers, mail, and cargo arrive by air. Barge service is performed on a weekly basis in summer by Yutana Barge Lines. Residents use river boats in summer and snowmachines in winter to travel around the area GALENA E-7 C - COMMUNITY MEETING REPORT A community meeting was held in the library of Galena School at 7:00 p.m. on November 17, 1981. Seventeen people attended the meeting including the mayor, the city manager, the president of the village corporation (Gana-A-Yoo), and the manager of the Chevron bulk fuels depot. The purpose of the meeting was fourfold: to explain the objectives of the study, to briefly describe potential energy alternatives, to obtain background information on the village, and to solicit public comment regarding community preferences. In the general discussion following opening comments, several attendees expressed strong interest in a regional approach to electrification based on development of the hydroelectric potential at the Melozitna River, which is generally referred to as the Melozi River by residents in the region. The river enters the Yukon River from the north near Ruby, about 50 miles from Galena. In the proposed scheme, electric power would be distributed to six villages by transmission intertie. These villages include Galena, Ruby, Koyukuk, Nulato, Kaltag, Husila, and possibly more. Proponents of the hydro site maintained that it would stimulate economic development in the region, particularly mining, while greatly reducing regional dependence on fuel oil and the escalating costs of energy. Efforts by community representatives to interest state authorities in the project have failed so far. The river is not protected under the National Wild and Scenic River System, thus making it available for development. Indications were that the hydro plan has been a hotly debated issue in Galena. In the community meeting some opposition to the hydro plan surfaced, but this opposition was not as vocal as proponents of the dam. As part of the reconnaissance study, Acres proposed to examine the hydro plan in more detail so that a better fix on costs and potential problems would be available. To date the hydro potential at Melozitna has never been studied, even at the reconnaissance level. Some attendees expressed interest in seeing alternative energy technologies investigated before proceeding with development of the Melozitna site. Alternatives mentioned included the hydro potential at Kalakaket Creek (which was previously surveyed by Ott Water Engineers for the Corps of Engineers), a small coal-fired power plant, biomass systems, and geothermal energy. A hot spot was said to exist on the other side of Mount Galena about 20 miles away. Increased energy conservation in the village was also believed possible. There was general consensus at the meeting that Galena will continue to grow as a city and expand its role as an operations hub for the region. The meeting lasted approximately 2-1/2 hours and proved valuable to the reconnaissance team in identifying energy alternatives of interest to the community. GALENA E-8 D_- EXISTING POWER AND HEATING FACILITIES D.1 - Existing Power Facilities Galena is served by M&D Power, a privately owned utility company. Present aggregate capacity of the central plant is 635 kW provided by the following three diesel units: Caterpillar D343, 1,800 rpm, 250 kW Caterpillar D343, 1,800 rpm, 250 kW Caterpillar 0333, 1,800 rpm, 135 kW The two 0343 units are approximately 5 years old and in good running condition. The 033 unit is approximately 10 years old, but was recently overhauled. The diesel units are housed in a steel-framed platform building with space for three units. The floor is constructed of plate steel. The overall structure is about 5 years old and in good condition. The utilities' peak load is 300 kW which occurs in the winter. Electric power is supplied by two units operating in parallel. All three units are regularly alternated to reduce machine wear. Approximately 150 residential and 25 commercial and institutional customers are served by this system over 11.5 miles of distribution line. The generation and distribution voltages are 2,400 V, 3-phase. A waste heat recovery system was being installed at the time of the site visit and should be fully operational by the end of February 1982. Heat recovered from the jacket water cooling system will be used to heat the city water plant and health clinic, and heat trace the above ground domestic water loop which is maintained by the city and is about 1/4 mile long. For this service, the city has an agreement with the electric utility to pay for the metered electrical cost of operating the powerhouse, of which it is expected that a large percentage will go to running fans and pumps associated with the waste heat recovery system. The city will also assume responsibility for maintenance of the waste heat system. Final installed cost of this system was projected to be $325,000. In addition to the central utility, the school district maintains a standby, 125 kW diesel generator. This unit can be remotely activated from the power plant to pick up the school load in case of emergency, thus giving the utility added flexibility and reliability. Several small standby generators are also maintained by residents in the village. The Air Force Base at Galena supplies its own electric power from four diesel units with total capacity of 2 MW. The peak demand for this system is 970 kW with no foreseeable changes. A fairly substantial on-base civilian sector is served by this power plant. GALENA E-9 M&D Power sells electricity at the base rate of $0.33/kWh (January 1982) to all customers. An additional fuel surcharge of $0.043/kWh brings the total cost to $0.373/kWh. As a result of the Power Cost Assistance Program recently implemented by the State, the customer actually pays $0.17/kWh. The power plant owner reported a 10 percent increase in electricity consumption over the first several months after this program was implemented. During 1980, 1,000 MWh was produced by M&D Power at a fuel consumption rate of 8.8 kWh/gallon or 22 percent efficiency, assuming higher heating value for the fuel. Commercial and institutional customers purchase about 65 percent of this energy, while the remaining 35 percent is sold to households. The school district, including six faculty trailer homes, is the largest customer for M&D Power. Other major consumers include two stores; the fish processing plant which operates for about six weeks in the summer; and the city government including the health clinic, city hall, maintenance building, police station, and water plant among others. The fish processing plant is particulary advantageous because it picks up a large part of the load dropped by the school during summer recess. The military base annually produces about 6,000 MWh of electricity. Approximately 92 percent of this energy serves the base while the remaining 8 percent is sold to nonmilitary users located on base. These users include the Federal Aviation Administration, Bureau of Land Management, State of Alaska offices, and various other private sector users including airline offices, warehouses, shops and trailer homes. Civilian businesses and organizations on base, not directly associated with military operations or airline services, have recently been directed to relocate in Galena. This shift will result in a small increase of M&D Power's electric load. 0.2 - Existing Heating Facilities Most residences in Galena are heated with a combination of wood and fuel oil. With the rising cost of oil, residents in recent years have turned more to wood as the primary source of heat. This trend is supported by the dwindling fuel oil sales to residents as reported by the manager of the bulk fuels depot. Wood stoves and pot burners are the predominant residential heating systems, with some newer homes using gun-fired oi] heating systems. Commercial and institutional facilities are heated primarily with fuel oil using hydronic heat distribution systems. A representative home in Galena fully heated with wood is estimated to consume between 10 and 12 cords of wood annually. In calculating space heating loads, 35 percent efficiency for wood stoves and oi] pot burners was assumed, while 65 percent efficiency was assumed for systems based on gun-fired furnaces. Given a residential mix of home heating systems, including more efficient wood stoves and baseboard hot water systems in GALENA E-10 some homes, it was estimated that the composite home heating efficiency for Galena was about 45 percent. Nonresidential buildings are typically heated by hydronic systems with the higher 65 percent efficiency. When placed into operation, the power plant waste heat recovery system will supplement the heating fuel requirement for the health clinic, water plant, domestic water loop, and possibly the city garage. Because of the high cost of energy and water (8 cents per gallon delivered), few homes (approximately 10) have domestic hot water systems. Water is expensive because of the truck hauling system to deliver water and pick up sewage. Extensive purification is also required to remove contaminating minerals. The majority of residents use the community washeteria (subsidized by the city) for showers and washing clothes. Propane (sold by Gana-A-Yoo) is the major source of fuel for cooking in Galena. Use of propane will vary widely from home to home, but it was estimated that approximately 2-1/2 propane tanks (100 pounds each) are consumed annually by each household. Most fuel oi] purchased in Galena is obtained through the Chevron bulk fuels depot. Storage at this facility includes nine tanks with a total capacity of 1,200,000 gallons. A large storage capacity is maintained to carry the village through the winter months when the Yukon River is frozen. During the summer, fuel is barged to Galena from Nenana. GALENA E-11 E_- ENERGY BALANCE Table 2 presents an energy use profile for Galena based on the year 1980, which was the last year for which complete data were available for the study. Figure 2 shows how this energy is distributed to the community. As can be readily seen in Figure 2, transportation and space heating are the largest end uses of energy in Galena, with electricity generation a distant third. Galena's role as a "hub" city accounts for transporation's unusually large impact. Space heating is the second largest end use of energy in Galena. Esimates suggest that 50 percent of the eneray consumed for residential heating for 1980 was provided by wood with the balance coming from oil. As indicated earlier, the trend toward consuming more wood for home heating is gaining popularity such that it is now believed over 80 percent of the heating load is achieved with this resource. GALENA E-12 TABLE 2 ENERGY USE PROFILE FOR GALENA -1980 Total Heat Content Type of Fuel cost (4) End Uses ‘4) quantity'9) (10° Btu) #1 Fuel Oi] $1.69/gal Space Heating 212,000 gal 29.3 Residences (52%) Commercial (13%) Institutional (34%) #2 Fuel Oil $1.64/gal Electricity 123,000 gal 17.0 Generation (98%) Transportation'* (5%) Motor Gasoline $1.52/gal Transportation") 182,000 gal 22.8 Jet Fuel $1.76/gal Space Heating (65%) 126,000 gal 16.4 Transportation (35%) Aviation Gas $1.83/gal Transportation 54,000 gal 7.0 80 A iation Gas $1.88/gal Transportation 185,000 gal 24.1 100 Propane $68/tank'>) cooking 40,000 1p'") —g.g (c) : : (h) Wood $100/cord Residential Space 890 cords 13.5 130.1 NOTES: (a) January 1982 bulk fuel cost for 400 gallons or more delivered by tanker truck. (b propane. (c wood. (d > Oo ( ( ) ) Estimated cost of wood if purchased. ) operation, power tools, etc. +3} Energy consumption is based on data for 1980. h Estimates. Deliveries below 200 gallons are handled by a retail outfit that charges an additional $0.30/gallon. Fuels Depot. Propane is distributed by Gana-A-Yoo. Source: Chevron Bulk Tanks contain 100 pounds of Most residents collect their own Quantities in parentheses indicate estimate of percentage energy used by sector. ) Space heating includes energy consumed for domestic water heating. ) Transportation energy includes energy consumed for heavy equipment BRUNING 44-132 42222 ENERGY RESOURCE END USE RESIDENTIAL SYSTEM SPACE HEATING LOSSES (15.2) | (13.5) (27.7) woop (13.5) FUEL OIL (46.2) USEABLE HEAT (12.5) COMMERCIAL AND SYSTEM LOSSES GOV'T. SPACE (9.82) HEATING (15.1) UseABLE HEAT(5.29) > ELECTRIC POWER SYSTEM GENERATION LOSSES 6.1) (12.6) USEABLE HEAT AVIATION FUEL (47.5) TRANSPORTATION (71.0) GASOLINE (22.8) (22.8) PROPANE (08) (0.8) COOKING (08) ——— —$—$—$—$—————— NOTES: ALL UNITS IN 109 BTU/YR GALENA ENERGY BALANCE (1981) FIGURE 2 ‘ACRES AWERICAN INCORPORATED e173 WN31V9 GALENA E-14 F - ENERGY REQUIREMENTS FORECAST F.1 - Capital Projects Forecast F.1.1 - Scheduled Capital Projects None F.1.2 - Potential Developments (a) Increase in mining activity on the part of Anaconda Mining and other mineral companies engaged in mineral exploration in the region. (b) Small increase in timber and fish harvesting. (c) Establishment of state and federal branch offices. (d) Expansion of University of Alaska services. (e) Construction of a new hotel. (f) Construction of a regional hospital to replace the one recently closed in Tanana. (g) Reclassification of Galena as a non-hardship military base which would allow military families to move here (a remote possibility). F.1.3 - Economic Forecast Galena's role as the “hub” of the region has increased greatly over the last decade and this trend is expected to continue as more regional services are based here. State and federal agencies are beginning to locate regional representatives here, the health clinic now serves four villages, and air and ground transportation services are well developed. Although no major industrial development is scheduled, Galena's economy will grow significantly without industry, solely because of this "hub" factor. F.2 - Population Forecast Galena's annual population growth rate from 1970 to 1980, excluding the Air Force Base, was 4.4 percent and from 1960 to 1980 was 1.7 percent. Since GALENA E-15 the new town site was started in 1975, Galena has experienced a high growth rate on the order of 5 to 10 percent per year. Many residents anticipate this growth rate to continue even without major industrial development. The city government projected a maximum population expansion of 500 persons over the next 10 years. The population forecast below is calculated on the basis of an annual civilian growth rate of 5 percent from 1982 to 1991, and 2.5 percent annually thereafter. The number of military personnel stationed at the base was held constant at 300 persons. 1960 1970 1980 1986 1991 1996 2001 Population 261 302 765! 945! 1123! 1231! 13541 #Residences N/A 66 183 245 313 354 401 #Commercial N/A N/A 8 11 14 16 18 #Gov't/Other N/A N/A 9 12 #416 18 2 F.3 - Electrical Energy Forecast Electrical energy forecasts should consider the maturity of the existing power system, the quality and cost of service available, and the readiness of villagers to accept changes in lifestyle; as well as anticipate new loads. In Galena, central electric power has been available for some 15 years. The market is largely saturated as major users are in Place, such as the school, and most homes have acquired major appliances and assumed a consistent electricity use pattern. Typical household appliances include lights, refrigerator, freezer, television, vacuum cleaner, stereo, power tools, and miscellaneous small items. Because of the high cost of water, most homes do not have electric washers, dryers, and dishwashers, nor are these appliances expected to become widely used in the near future. Under these conditions, an electricity forecast was developed (see Table 3) with the following assumptions: o Approximately 75 percent of the existing households in Galena (or 150 homes) presently receive electric power. This percentage was assumed to increase steadily until 95 percent of the existing homes obtain electricity by year 2001. All new homes constructed after 1981 were assumed to receive electricity. o Of the households connected, present annual consumption averages about 2,350 kWh per home based on data provided by M&D Power. Per household Consumption was projected to increase 2 percent annually. 1 Figure includes 300 military personnel on Galena Air Force Base. Year 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 Sesh SSS Notes: Residentia 101 353 111 388 121 425 133 466 145 509 158 555 173 606 189 661 205 719 223 781 235 825 249 871 262 918 276 967 291 1020 307 1075 323 1132 340 1191 359 1259 378 1325: TABLE 3 VILLAGE ELECTRIC ENERGY USE FORECAST (4) 157 163 169 175 182 189 196 204 212 221 257 262 267 272 277 282 288 293 299 305 (a) Excludes military base Includes all government sales ‘Includes commercial sales only (b) (c) Schools (b) Mi. 550 570 592 614 637 662 688 715 744 774 902 919 936 953 971 989 1008 1027 1047 1067 58 62 66 71 168 81 87 93 100 106 114 119 124 129 134 140 146 152 159 166 Other a 203 217 232 249 266 285 305 489 503 373 399 416 434 452 471 491 512 534 557 580 ota a 316 1106 335 1175 356 1249 379 1329 403 1641 429 1502 456 1599 486 1702 517 1812 550 1928 607 2126 630 2206 653 2288 677 2372 703 2462 729 2555 757 2652 785 2752 817 2863 848 2972 9L-3 WNIT GALENA E-17 o Electricity consumption in the institutional sector was projected to grow in proportion to the population growth rate with a second school added in 1992. o Electricity consumption in the commercial sector was projected to grow at a rate 2 percent above the population growth rate. o Peak load demand was forecast based on an across-the-board load factor of 0.40 which is a reasonable assumption based on data provided by M&D Power. With these basic assumptions, Galena was projected to increase electric energy consumption by 75 percent over the next 10 years and 170 percent over the next 20 years. The forecast was based on historical prices for electricity (e.g., 1981 sale price of $0.37/kWh). Under this price structure, it was assumed that Galena has largely achieved market saturation and that major growth spurts characteristic of newly electrified villages would not occur. Figure 3 presents graphically the energy and power forecast for the villages. This forecast, however, does not consider the impact of the Power Cost Assistance Program which was recently implemented by the State and which probably will take several years to mature (i.e., for consumption levels to achieve a new saturation level). This program more than halved the cost of electricity to all customers in Galena. As a result, an immediate increase in electricity consumption was experienced, particularly in the residential sector. Since the economic analyses were based on busbar cost of electricity, it was assumed that customers continued to pay the higher price of electricity as reflected in the mild growth rates projected. F.4 - Thermal Energy Forecast A thermal energy forecast for electricity generation, space heating, and domestic water heating was projected for Galena. Results of this forecast are shown in Table 4 in terms of net heating requirements. Net heat refers to the heat energy that actually goes to heating the building space, thus excluding losses up the stack. An advantage of presenting net rather than gross heating needs is that the quantity of electricity required to displace oil- and wood-dependent heating systems can be readily determined. Because the efficiency of electric resistance heating is always 1.0, the electrical energy required to heat a village would be equivalent to the net heating requirements as shown in the table, using the conversion factor of 3,413 Btu/kWh. Gross heating values can be estimated by simply dividing the projected composite heating efficiency of the village into the net heating requirements for any given year. The forecast does not project energy consumed by the transportation sector or the military base. GALENA E-18 ENERGY CONSUMPTION (MWh) GALENA-FIGURE 3 GALENA E- 19 TABLE 4 NET THERMAL REQUIREMENTS (a) Electricity Residential Schools ()) Other Total Year (10%Btu) ——(10%Btu) __——(10%tu)__(10°Btu) _(10tu) 1982 3.8 13.8 2.5 9.1 25.4 1983 4.0 14.1 2.5 9.4 30.0 1984 4.3 14.4 2.5 9.6 30.8 1985 4.5 14.8 2.5 9.9 31.7 1986 4.8 15.1 2.5 10.2 32.6 1987 5.1 15.7 2.5 10.6 33.9 1988 5.5 16.4 2.5 11.0 35.4 1989 - 5.8 17.1 2.5 11.4 36.8 1990 6.2 17.8 2.5 11.8 38.3 1991 6.6 18.6 2.5 11.8 39.5 1992 7.3 19.0 4.5 12.0 42.8 1993 7.5 19.4 4.5 12.2 43.6 1994 7.8 19.8 4.5 12.4 44.5 1995 8.1 20.3 4.5 12.7 45.6 1996 8.4 20.7 4.5 12.9 46.5 1997 8.7 21.1 4.5 13.1 47.4 1998 9.1 21.6 4.5 13.3 48.5 1999 9.4 22.1 4.5 13.5 49.5 2000 9.8 22.6 4.5 13.8 50.7 2001 10.1 23.1 4.5 14.0 52.4 (a) Does not include military base (b) A second school is introduced in 1991 GALENA E-20 For the thermal energy forecast, existing residences in Galena were estimated to have an annual net space heating requirement of 67 MBtu. Starting in 1986, this heating requirement was reduced 10 percent as a result of assumed energy conservation measures placed into effect such as increased insulation and weatherstripping. For new homes constructed in 1986 and after, heating requirements were reduced 25 percent to reflect implementation of improved energy conserving construction techniques such as double-walled homes and triple-glazed windows. New commercial and other structures were assumed to have an annual space heating requirement equivalent to four existing homes. GALENA E-21 G - VILLAGE TECHNOLOGY ASSESSMENT 1. Coal. Several coal deposits exist along the banks of the Yukon both above and below Galena. These deposits were once mined at the turn of the century to provide fuel for steamboats that traveled the Yukon. Since then, these mines have been closed down. Previous cost estimates to reopen these mines to provide fuel for space heating and other end uses have shown the projects to be uneconomical (Ref. 17, Main Report). As an alternative to new mining, the costs of delivering coal from the commercial mine at Healy were examined in this study. Estimates show that coal delivered to Galena from the source would be approximately $150 per ton including mine-mouth costs and the costs of handling, barging, and storing. This would make it marginally less expensive than oil] but more expensive than wood. Technical and environmental problems are also a concern. Long-term storage of Healy coal in bulk quantities creates problems with spontaneous combustion which must be controlled. Most residents were not enthusiastic about using coal as a source of fuel because of environmental drawbacks related to air pollution. Wood. Wood is widely used in Galena as a home heating fuel. Sources Of wood include driftwood from the Yukon River and forest areas surrounding the village. Reid, Collins (Ref. 20, Main Report) assesses the wood resource potential for commercial development as fair relative to other interior Alaskan villages. Some concern exists among residents of Galena regarding future economical availability of this resource as Galena grows in size. Geothermal. Some geothermal potential was reported approximately 20 miles south of Galena. Although temperatures at this site are not known, it was believed by the reconnaissance team to be too far away for practical consideration. Hydroelectric. Ott Water Engineers identified Kalakaket Creek as a potential hydroelectric site near Galena (Ref. 19, Main Report). This site was evaluated in alternative "A". Residents of Galena also expressed keen interest in the hydroelectric potential at the Melozitna River. In response to this interest, this site was evaluated in alternative "B". 5. 6. GALENA E-22 Wind. Average annual wind speed for Galena is reported as 3.9 mph. Residents commented that wind is indeed not good in the area and should not be investigated as an alternative. Photovoltaic. This technology is presently too expensive for consideration in any Alaskan utility application. Fuel Oi]. Fuel oil is delivered by barge from Nenana during the summer months when the Yukon River is passable. Availability is good and storage facilities at Galena are excellent because of the Chevron fuels depot located here. Transmission Line to Fairbanks System. As another regional approach to electrification, 1t was suggested by residents that Galena and other villages be intertied with the Fairbanks coal-based power system. A brief economic analysis of this alternative suggested a power cost ranging between 10 and 65 percent above the power cost given in the base case analysis for year 2001. This estimate was based on a transmission line of 500 miles at $200,000 per mile, and a purchase price of electricity from the grid in Fairbanks of $0.08/kWh. Costs of the transmission line were prorated to Galena based on energy consumption. Because the costs appeared higher than central diesel, this alternative was not given further evaluation. However, any feasibility analysis of the Melozitna hydroelectric alternative should consider the transmission intertie as a potential alternative. Lack of information regarding terrain, potential transmission right of ways, etc., prevent fair evaluation of this concept in this reconnaissance study. It should also be noted that the environmental barriers to construction of such a transmission line would be formidable. Diesel Power Supplied by the Military Base. Another option for electrical power involves the purchase of power from the military base by the village. The military base maintains tremendous excess capacity, and the impact of assuming the village load would be relatively minor. An arrangement could be negotiated between the two parties whereby the military sells power to, say, M&D Power, and M&D Power becomes fully responsible for the distribution of power to the village. Similar arrangements between school districts and villages exist throughout Alaska. Such an arrangement, of course, would only be acceptable to the village if the power could be purchased at a rate cheaper than what is already available. Although this alternative may have some merit, it was not reviewed in this reconnaissance study. Village reaction to such a plan is not known, and there are significant political issues involved. GALENA £-23 Table 5 presents the results of the preliminary evaluation of resources and technologies as applied to the community. Methods and criteria used in developing this table are covered in Section C of the main report. The results of this preliminary assessment were used as guidance in development of plans evaluated in the final stages of the study. GALENA £-24 TABLE 5 VILLAGE TECHNOLOGY ASSESSMENT FOR GALENA TECHNOLOGY Electric Coal Fired Steam Wood Fired Steam Geotherma Diesel (base) Gas Turbine Hydroelectric Wind Photovoltaic Heating Diesel Waste Heat Recovery Electric Resistance Passive Solar Wood Coal 0i1 (base) Other Coal Gasification Wood Gasification - Diesel Biogas Waste Fired Boiler Peat Binary Cycle Generator Conservation wuwnonr Pr FF nor RF NY NY RP RF eR yor FP NY DY FY CO OC oOo oO ON FR Fe oO RF FR ee Re www Or WHY Nor Won NY NS 1. 2. 3. 4. 5. 6. 7. 8. any £& F&F We Ww ON NM KF YP LY e& ON NM OO NM FY OO oF OOO OW Oo PP WwW OOwWwW OA WW WeY DY WH N © WW OO ™N NSN Regional Hydro NOTE: Higher numbers are more favorable. GALENA E-25 H_- ENERGY PLAN DESCRIPTION H.1 - Base Case Base case begins with the present central utility system as described in Section D (i.e., 3 diesel units of 250 kW, 250 kW, and 135 kW capacities). The electrical energy forecast shows that by 1986, the utility system demand will surpass the capacity of the existing plant. The basic criterion assumed for utility planning is that the system's largest machine can be out of service and the load will still be met. In keeping with the criterion, a new 440 kW unit is brought on line in 1986, followed by a second 440 kW unit in 1990. Meanwhile, the 135 kW unit installed in 1972 will be retired at the end of 1989, two years prior to the 20-year operating lifetime assumed for this study. This will prevent unwarranted over-expansion of the existing powerhouse. In 1995, the two existing 250 kW units will also be retired and replaced by a third 440 kW unit. At this point, the utility will have three 440 kW units which will provide sufficient power to meet projected loads through year 2001. At the time field personnel visited Galena in November 1981, a waste heat recovery system was being installed at M&D Power to supply heat to the health clinic, water plant, domestic water loop, and city garage. An estimate for the year 1982 showed that the equivalent value of 29,500 gallons of fuel oi1 could be saved with waste heat recovery given the assumptions listed later in this section. The basic assumptions used for the base case present worth and power cost calculations are as follows: Diesel Plant 0 Utility planning is carried out as previously described. 0 Costs are given in 1981 dollars. 0 Diesel generators are valued at a purchase price of $300/kW plus $500/kW for installation for a total installed cost of $800/kW, which is amortized over 20 years. The real discount rate (net from inflation) is assumed to be 3 percent annually. 0 General operations and maintenance is valued at $50,000 per year. This expense covers the cost of operating personnel for the power plant and routine maintenance items such as replacement of lubricating oil. As the study deals only with busbar costs, the cost of maintaining the distribution system is omitted as this system is GALENA E-26 common to all alternatives. Similarly, administration costs are excluded from the analysis. Costs associated with major overhauls and fuel purchases were not included under 0&8 as is frequently done. These costs were itemized separately. ° Each diesel is overhauled every 10 years at one-third of its purchase price or $100/kW. Annual overhaul costs are established as a 3 percent sinking fund designed to provide the equivalent of $100/kW every 6 years. 0 Electricity is produced at the fuel consumption rate of 8.82 kWh per gallon based on actual operating data provided by M&D Power. 0 Annual fuel cost is based on the 1981 price of $1.64 per gallon with the real cost rising 2.6 percent annually to $2.67 by year 2001 and remaining constant thereafter. Waste Heat Recovery System ° 27 percent of input energy to the diesel engines is rejected to the jacket water heat recovery system. 0 Piping and miscellaneous heat losses are 10 percent. 0 50 percent of the heat available is actually used by end users. 0 Efficiency of existing heating systems in buildings served by the waste heat system is 65 percent. ° Installed cost of the waste heat recovery system is $325,000 based on the actual cost of the system. This cost is amortized over 10 years, after which all existing equipment is replaced. The real discount rate (net from inflation) is assumed to be 3 percent annually. 0 Annual O&M cost is valued at $10,000 including piping inspection, periodic heat exchanger and pump maintenance, and miscellaneous expenses. 0 Expansion of the system takes in year 1992 costing an additional $100,000 which is amortized in the same manner as the initial investment. With these assumptions, benefits of the waste heat recovery system were assumed to increase annually as electrical demand increases. For Purposes of this analysis, the following simple calculation was used to estimate the fuel displacement benefit of the system: GALENA E-27 (#kWh) (0.27) (0.50) (0.90) ($/gal) (8.82 kWh/gal) (0.65 eff.) Dollar Benefit = This calculation was performed for estimating purposes only. A feasibility analysis of such a system would necessitate considerably more detail that takes into account the coincidence of heat availability with heat demand. Table 6 in Section I presents the present worth and power cost calculations of the base case (continued development of the central diesel system with waste heat recovery). Table 7 in Section I presents the fuel savings benefit of the waste heat recovery system. Power costs are determined by subtracting the final savings benefit of each year from the total annual costs of the system and then dividing by the energy production. The financial arrangements established between the city and the power plant, however, do not allow fuel savings to be reflected in reduced power costs as these calculations show, because the city has assumed full responsibil- ity for the waste heat system. In actuality, these benefits will be passed on to residents in some other form such as reduced taxes or water bills. Although planners expect little return from the waste heat recovery system in the early years, these benefits should increase as real fuel costs rise, the central diesel system expands, and more heat becomes available through the jacket water cooling systems. Indeed, the costs of power as estimated here would be the same without the waste heat recovery system for 1982; but in 2001, a cost reduction of 9 percent could be realized. The power costs shown in Table 6 (Section I) also do not reflect the actual costs of electricity to residents. These costs represent busbar costs--the cost of producing power at the generator. Distribution, administration, and miscellaneous costs common to all alternatives are not represented in the present worth analysis. H.2 - Alternative Plan "A" Alternative "A" addresses the construction of a run-of-the-stream hydroelectric power plant at Kalakaket Creek some 20 miles south of Galena. It is sometimes called Kala Creek or even just KKK. The site was recently reviewed by Ott Water Engineers with findings published in May 1981 (Ref. 19, Main Report). GALENA E-28 For this alternative, it was assumed that the hydro site comes on line in 1992. Hydro energy would be available only from May through October with average annual production estimated at 1,729 MWh. During the winter months, Galena would rely on diesel generated power with utility system planning as described for the base case. The waste heat recovery system would operate as before assuming little impact as a result of the hydro plant (although this may be an optimistic assumption). Because the hydro plant produces more power than could be used by Galena during the summer months, it was assumed that all energy not used by the village would be transmitted to the military base. Otherwise, the hydro plant would clearly be uneconomical. From data provided by M&D Power, it was estimated that 40 percent of annual electrical energy demand occurs from May through October. Thus, for the purposes of comparing the present worth of this alternative with the base case, it was assumed that the total annual costs of the hydro plant in any given year would be prorated based on the percentage of produced energy actually delivered to the village. It was assumed that the hydro plant satisfied 100 percent of Galena's electrical energy demand over the summer months throughout the planning period. Thus, as electric power demand increases in Galena, so does its share of total annual costs. The estimated capital cost of the Kakakaket Creek hydro plant is given below based on Ott Water Engineer's estimates: Cost Item ($1,000) (1) Diversion Dam 163.3 (2) Canal and Flume 2,639.0 (3) Penstock 650.0 (4) Mechanical and Electrical Equipment 684.9 (5) Powerhouse 144.0 (6) Transmission Line (9.8 miles) 392.0 (7) Winter Haul Road 282.0 Subtotal 4,955.2 (8) Mobilization, Demobilization, Contractor's Profit @ 30 percent 1,486.6 Subtotal 6,441.8 (9) Geographic Index Factor, 0.81 5,217.9 Total Construction Cost 11,659.7 (10) Contingencies @ 20 percent 2,331.9 (11) Planning and Engineering @ 16 percent 1,865.6 rm Total Project Cost 15,857. GALENA E-29 Other assumptions for the present worth and power cost calculations of alternative "A" are as follows: 0 Hydro plant costs $15,857,000 which is amortized over a 50-year operating lifetime from 1992 through 2041. The real discount rate (net from inflation) is assumed to be 3 percent annually. 0 Annual overhaul (replacement) costs of mechanical and electrical components are $19,000. ° Annual operation and maintenance costs are $30,000. 0 Transmission line costs are singled out from the balance of the hydro plant and are amortized over a 20-year operating lifetime. The real discount rate (net from inflation) is assumed to be 3 percent annually. 0 During the winter, Galena continues to derive full benefit from the waste heat recovery system as achieved with the base case. ° Because the diesel generators are idle for most of the summer, overhaul costs are provided through a sinking fund based on a 10-year rather than 6-year period between overhauls as was assumed for the base case. ° O&M costs for the diesel systems remain at $50,000. Table 8 in Section I presents the present worth and power cost calculations of alternative "A" (hydroelectric power at Kalakaket Creek). The fuel savings benefit of the waste heat recovery system that operates off the diesel generators during winter was assumed to be the same as the base case as shown in Table 7 (Section I). This may be an optimistic assumption since the hydro plant was assumed to be operating during October when waste heat could surely be utilized. The cost estimate for the hydro site was based on an estimate developed by Ott Water Engineers. The present worth and power cost calculations suggest that the hydro site at Kalakaket Creek would not be more economical than the central diesel system of base case "A" within the planning period. GALENA E-30 H.3 - Alternative "B" Residents in the central Yukon region have expressed interest in development of the hydroelectric potential at Melozitna River. They proposed a facility that could supply the long-term electrical energy needs of at least six villages and stimulate economic growth in the region by encouraging industrial development, such as mining. As part of this reconnaissance study, three dam sites on the Melozitna River were evaluated, all of which are potentially feasible. A project summary of these arrangements follows: Low Head Medium Head High Head Dam Crest Elevation 455 565 620 Normal Max. Operating Level (ft) 440 550 600 Min. Reservoir Level (ft) 310 385 550 Max. Reservoir Drawdown (ft) 130 165 50 Reservoir Volume (acre-feet) 400,000 2,100,000 3,700,000 Reservoir Surface Area (acres) 6,500 28,000 44,300 Dam Volume (cubic yards) 2,250,000 5,710,000 8,500,000 Spillway and Outlet Facility Capacity (cfs) 50,000 50,000 50,000 Powerhouse Installed Capacity (MW) 20 64 104.8 Approximate Tailwater (ft) 225 225 225 Firm Annual Potential Generation (GWh) 87.6 282 436 The project costs of these arrangements were estimated as follows: GALENA E-31 20 MW 64 MW 1048 MW Low Head Cost Medium Head Cost High Head Cost Item ($1,000) ($1,000) ($1,000) Power Plant/Powerhouse 35,000 52,300 63,300 Dam 33,800 85,700 127,500 Spillway 32,000 45,000 50,000 Intake 17,300 27,000 20,000 Penstocks 2,500 4,000 5,000 Land 7,000 29,600 38,800 Reservoir Clearing 5,500 11,000 15,000 Diversion/Cofferdams 27,000 30,500 32,800 Tailrace/Surge Chamber 2,500 3,300 3,600 Switchyard 900 2,500 4,800 Airstrip/Main Access 10,800 10,800 10,800 Site Facilities 66,000 95,000 114,000 Transmission Line 11,700 18,300 18,300 Subtotal 252,000 415,000 503,900 20% Contingency 50,400 83,000 100,800 12.5% Engineering, Owner 37,800 62,300 75,600 Cost, Administration TOTAL PROJECT COST $340,200 $560,300 $680,300 Alternative "B" addresses construction of the low head hydro arrangement at the Melozitna River. For this alternative it was assumed that the hydro site comes on line in year 1992. The hydro power would be available year- round with emergency backup diesels maintained in each village. For the purpose of comparing the present worth of this alternative with the base case, it was assumed (as with alternative "A") that the total annual costs of the hydro plant in any given year would be prorated based on the percentage of saleable energy that is actually delivered to Galena. To ascertain Galena's role in the purchase of power from the hydro plant, a regional electrical energy forecast was projected for the six village potentially served by this dam, including the air base in Galena. The villages involved are Galena, Ruby, Nulato, Kaltag, Huslia, and Koyukuk. The electrical energy forecast is presented below: Regional Electrical Demand 1982 1986 1991 1995 2001 GWh 9.6 10.2 10.9 11.5 12.4 MW 2.7 2.9 3.1 3.2 3.5 1 Assumes 0.40 load factor GALENA E-32 The basic assumptions for the present worth and power cost assumptions of alternative "B" are as follows: ° ° 0 From 1982 to 1991, alternative "B" is identical to the base case. Starting in 1992, the Melozitna hydro project comes on-line. The cost of the low head hydroelectric scheme is $340,200,000 which is amortized over a 50-year operating lifetime from 1992 through 2041. The real discount rate (net from inflation) is assumed to be 3 percent annually. Annual overhaul (replacement) costs of mechanical and electrical components are $450,000. Annual operation and maintenance costs are $400,000. Transmission line costs are singled out from the balance of the hydro plant and are amortized over a 20-year operating lifetime. The real discount rate (net from inflation) is assumed to be 3 percent annually. Costs of the hydro plant are prorated to Galena as a percentage of electrical energy delivered to the village. Because the hydro plant can provide year-round power, the waste heat recovery system is retired at the end of its 10-year economic life in 1991 and not replaced. Diesel backup capacity is maintained in Galena after the hydro plant comes on line with 880 kW provided by year 2001. Annual 0& costs of maintaining diesel backup are valued at $3,000. No annual overhaul costs of the diesel generators are assumed. Table 9 in Section I presents the present worth and power cost calculations of alternative "A" (low head hydroelectric power at Melozitna River). Table 10 in Section I presents the fuel savings benefit of the waste heat recovery system which is retired when the hydro plant comes on line. The present worth and power cost calculations suggest that the Melozitna hydroelectric project would not be economical within the planning period given the electrical energy forecast presented for the region. The electrical energy forecast is projected based on the needs of the six villages and the military base at Galena. Many residents in Galena, however, believe that most forecasts have been too low for the region and that industrial development, particularly mining, will generate rapid GALENA E-33 future growth. If such development does take place, considerable reduction in power costs could be achieved with the Melozitna hydroelectric project. For example, with the low head hydro scheme, for the year 2001, assuming all firm power is sold, the estimated cost of electricity would be $0.168/kWh. This cost of electricity represents over 40 percent reduction in power costs compared to the base case. The firm energy of a 20 MW plant was estimated to be 87.6 GWh per year. GALENA E-34 I - ENERGY PLAN EVALUATIONS TABLE 6 ESTIMATED COSTS OF GALENA BASE CASE (Central Diesel With Waste Heat Recovery ) FUEL COSTS SYSTEM ADDITIONS FIXED COSTS Energy Diesel Fuel Fuel Capital Annual Overhaul Total Fixed Production | Fuel Used x Price = Costs Costs Costs + Fund + O&M = Costs Year (MWh) (1,000 gal) ($/gal) ($1,000) Component ($1,000) ($1,000) ($1,000) ($1,000) _($1,000) 1982 1,106 125 1.64 205 o Existing diese! system 833 72 10 60 142 consists of 3 genera- 1983 1,175 133 1.68 233 tors (135 kW, 250 kW 72 10 60 142 250 kW) and waste heat 1984 1,249 142 1.73 246 recovery system 72 10 60 142 1985 1,329 151 1.77 267 72 10 60 142 1986 1,412 160 1.82 291 Expand facility to add 352 96 17 60 173 new 440 kW unit 1987 1,502 170 1.86 316 96 17 60 173 1988 1,599 181 1.91 346 96 17 60 173 1989 1,702 193 1.96 378 96 17 60 173 1990 1,812 205 2.01 412 Retire 135 kW unit and 352 112 21 60 193 replace with new 440 kW 1991 1,928 219 2.07 453 unit 112 21 60 193 1992 2,126 241 2.12 511 Expand waste heat re- 100 121 21 61 203 covery system 1993 2,206 250 2.18 545 121 21 61 203 1994 2,288 259 2.23 578 121 21 61 203 1995 2,372 269 2.29 616 121 21 61 203 1996 2,462 279 2.35 656 Retire both 250 kW 352 118 20 61 199 units and replace with 1997 2,555 290 2.41 699 one 440 kW unit 118 20 61 199 1998 2,652 301 2.47 743 118 20 61 199 1999 2,752 312 2.54 792 118 20 61 199 2000 2,863 325 2.60 845 118 20 61 199 2001 2,972 337 2.67 900 118 20 61 199 2002-2041 2,972 337 2.67 900 118 20 61 199 S€-3J WN3I1V9 TABLE 6 (Cont'd) Total Discounted Fuel Fixed Annual Annual Energy Costs + Costs = Costs Costs Costs Year __ ($1,000) ($1,000) ($1, 000) ($1,000) _ ($/kWh) 1982 205 142 347 337 0.28 1983 233 142 375 353 0.28 1984 246 142 388 355 0.27 1985 267 142 409 363 0.27 1986 291 173 464 400 0.29 1987 316 173 489 410 0.29 1988 346 173 519 422 0.28 1989 378 173 551 435 0.28 1990 412 193 605 464 0.29 1991 453 193 646 481 0.29 1992 511 203 714 516 0.29 1993 545 203 748 525 0.29 1994 578 203 781 532 0.29 1995 616 203 819 541 0.30 1996 656 199 855 549 0.30 1997 699 199 898 560 0.30 1998 743 199 942 570 0.30 1999 792 199 991 582 0.30 2000 845 199 1,044 595 0.31 2001 900 199 1,099 609 0.31 2002-2041 900 199 1,099 14,066 0.31 TOTAL $ 23,665 Total present worth of non-electrical benefits $ (3,445) Net present worth $ 20,220 All costs shown in thousands of dollars Note 1: Diesel fuel use is calculated at a consumption rate of 8.82 kWh produced per gallon of fuel used. Note 2: Diesel fuel price Is expressed in terms of 1981 dollars, with prices escalated at 2.6 percent above general inflation. Note 3: Total annual fixed costs include funds for equipment amortization (calculated at 3%), a sinking fund for equipment overhaul and replacement, and general O&M work. 9€-3 YNI1VO TABLE 7 GALENA E-37 ESTIMATED NON-ELECTRICAL BENEFITS OF BASE CASE Total Annual Benefits Discounted Year _(Space Heating Fuel Saving) Benefits 1982 38 37 1983 42 40 1984 46 42 1985 50 44 1986 55 47 1987 60 50 1988 65 53 1989 71 56 1990 77 59 1991 85 63 1992 95 69 1993 102 72 1994 108 74 1995 115 76 1996 122 78 1997 130 81 1998 139 83 1999 149 88 2000 158 90 2001 168 93 2002 168 2150 through 2041 TOTAL: $ 3445 All cost figures shown are in thousands of dollars. GALENA E38 I.1 - Base Case I.1.1 - Social and Environmental Evaluation There would be no adverse social or environmental impacts beyond what are experienced already with diesel generators if the central utility expands to meet future load projections. Possibility of increased employment at the utility as the system expands could be a benefit. Minor environmental gains will be achieved with waste heat recovery by displacing oi] that otherwise would be burned for space heating. 1.1.2 - Technical Evaluation No technical barriers are foreseen to the expansion of the existing M&D Power system to meet future electricity demands. Forecasts show that expansion of plant capacity will be required by the year 1986. To accommodate this new capacity, expansion of building facilities to add a fourth unit (440 kW) will be necessary. To avoid further expansion of building space, it is recommended that the 135 kW unit be retired in 1989 after its 18th (rather than 20th) year of Operation to allow space for a second 440 kW unit. Twenty years was the economic lifetime assumed for diesel generators in this study. By early retirement of the 135 kW unit, future expansion of capacity can be carried out through the end of the planning period without additional building changes beyond the allotment for four units. Installation of the waste heat recovery system was 90 percent complete at the time field reconnaissance personnel visited Galena. Discussion with residents revealed major concern about the mismatch between the waste heat recovery system and the hydronic heating system of the new health clinic, which was designed for an in-house boiler and a much hotter operating temperature than supplied by the waste heat distribution system. As a result, the health clinic will not be able to take full advantage of the heat recovery system, thus reducing the benefit of the system. Action to correct the problem at the health clinic is pending. TABLE 8 ESTIMATED COSTS OF GALENA ALTERNATIVE PLAN "A" (Hydro Power at Kalakaket Creek) FUEL COSTS SYSTEM ADDITIONS FIXED COSTS Energy Diesel Fuel Fuel Capital Annual Overhaul Total Fixed Production | Fuel Used x Price = Costs Costs Costs + Fund + 08M = Costs Year (MWh) (1,000 gal) ($/gal) ($1,000) Component ($1,000) ($1,000) ($1,000) ($1,000) ($1,000) 1982 1,106 125 1.64 205 o Existing diesel system 833 72 10 60 142 consists of 3 genera~ 1983 1,175 133 1.68 233 tors (135 kW, 250 kW, 72 10 60 142 250 kW) and waste heat 1984 1,249 142 1.73 246 recovery system 72 10 60 142 1985 1,329 151 1.77 267 72 10 60 142 1986 1,412 160 1.82 291 o Expand facility to add 352 96 7 60 173 new 440 kW unit 1987 1,502 170 1.86 316 96 17 60 173 1988 1,599 181 1.91 346 96 7 60 173 1989 1,702 193 1.96 378 96 7 60 173 1990 1,812 205 2.01 412 o Retire 135 kW unit and 352 112 21 60 193 replace with new 440 kW 1991 1,928 219 2.07 453 unit 112 21 60 193 1992 2,126 145 2.12 307 o Kalakaket hydro plant 15,957 440 21 76 537 comes on line and waste 1993 2,206 150 2.18 327 heat recovery system is 454 22 76 552 expanded 1994 2,288 156 2.23 348 466 22 71 565 1995 2,372 161 2.29 369 480 22 78 580 1996 2,462 167 2.35 392 o Retire both 250 kW 352 490 23 78 591 units and replace with 1997 2,555 174 2.41 419 one 440 kW unit 503 23 79 605 1998 2,652 180 2.47 445 516 24 79 619 1999 2,752 187 2.54 4715 535 24 80 639 2000 2,863 195 2.60 507 548 25 81 654 2001 2,972 202 2.67 539 566 25 82 673 2002-2041 2,972 202 2.67 539 566 25 82 673 6€-3 WNA1V9 TABLE 8 (Cont'd) Total Discounted Fuel Fixed Annual Annual Energy Costs + Costs = Costs Costs Costs Year ($1,000) ($1,000) ($1,000) ($1,000) ($/kWh) 1982 205 142 347 337 0.28 1983 233 142 375 353 0.28 1984 246 142 388 355 0.27 1985 267 142 409 363 0.27 1986 291 173 464 400 0.29 1987 316 173 489 410 0.29 1988 346 173 519 422 0.28 1989 378 173 551 435 0.28 1990 412 193 605 464 0.29 1991 453 193 646 481 0.29 1992 307 537 844 610 0.35 1993 327 552 879 617 0.35 1994 348 565 913 622 0.35 1995 369 580 949 627 0.35 1996 392 591 983 631 0.35 1997 419 605 1,024 638 0.35 1998 445 619 1,064 644 0.35 1999 4715 639 1,114 654 0.35 2000 507 654 1, 161 662 0.35 2001 539 673 1,212 671 0.35 2002-2041 539 673 1,212 15,512 0.35 TOTAL $ 25,908 Total present worth of non-electrical benefits + 3,445) Net present worth $ 22,463 All costs shown in thousands of dollars Note 1: Diesel fuel use is calculated at a consumption rate of 8.82 kWh produced per gallon of fuel used. Note 2: Diesel fuel price is expressed in terms of 1981 dollars, with prices escalated at 2.6 percent above general inflation. Note 3: Total annual fixed costs include funds for equipment amortization (calculated at 3%), a sinking fund for equipment overhaul and replacement, and general O&M work. Ob-3 VN3ITV9 TABLE 9 GALENA E-41 ESTIMATED NON-ELECTRICAL BENEFITS OF ALTERNATIVE PLAN "A" Total Annual Benefits Discounted Year (Space Heating Fuel Saving) _ Benefits 1982 38 37 1983 42 40 1984 46 42 1985 50 44 1986 55 47 1987 60 50 1988 65 53 1989 71 56 1990 77 59 1991 85 63 1992 95 69 1993 102 72 1994 108 74 1995 115 76 1996 122 78 1997 130 81 1998 139 33 1999 149 88 2000 158 90 2001 168 93 2002 168 2150 through 2041 TOTAL: $3445 All cost figures shown are in thousands of dollars. GALENA E-42 1.2 - Alternative Plan "A" 1.2.1 - Social and Environmental Evaluation Potential environmental impacts of the Kalakaket Creek hydro site are unknown, but the standard problems with hydro projects such as damage to fishlife, disruption to wildlife, and disfigurement of the land are anticipated. Salmon, whitefish, and arctic grayling are reported to be present in the stream. Occasionally arctic char are also present. A historic site and cemetery are located at Louden. The area has high potential for peregrin falcon nesting (Ref.19, Main Report) . Construction of a dam at this site could provide significant temporary employment to local residents of Galena. 1.2.2 - Technical Evaluation A major disadvantage of this hydro project is that flows are minimal during winter months when power is most needed, and storage is not practical. One resident who has visited the site indicated that it was not particularly good for hydro development because of the very low head and its tendency to "glacier" during the winter. Some, however, had suggested that the site was attractive because it could intertie into the transmission line extending to Campion Station (about 10 miles south of Galena), thus reducing transmission line costs. In discussions with the owner of M&D Power, however, it was commented that the lines were old and needed replacement. TABLE 10 ESTIMATED COSTS OF GALENA ALTERNATIVE PLAN "BY FUEL COSTS: SYSTEM ADDITIONS FIXED COSTS Energy Diesel Fuel Fuel Capital Annual Overhaul Total Fixed Production | Fuel Used X Price = Costs Costs Costs + Fund + 08M = Costs Year (MWh) (1,000 gal) _($/gal) ($1,000) Component ($1,000) ($1,000) ($1,000) ($1,000) ($1,000) 1982 1,106 125 1.64 205 o Existing diesel system 833 72 10 60 142 consists of 3 genera- 1983 1,175 133 1.68 233 tors (135 kW, 250 kW, 72 10 60 142 250 kW) 1984 1,249 142 1.73 246 72 10 60 142 1985 1,329 151 1.77 267 72 10 60 142 1986 1,412 160 1,82 291 o Expand facility to add 352 96 7 60 173 new 440 kW unit 1987 1,502 170 1.86 316 96 17 60 173 1988 1,599 181 1.91 346 96 7 60 173 1989 1,702 193 1.96 378 96 7 60 173 1990 1,812 205 2.01 412 o Retire 135 kW unit and 352 112 21 60 193 replace with new 440 kW 1991 1,928 219 2.07 453 unit. Retire waste 112 21 60 193 heat recovery system 1992 2,126 0 2.12 0 o Melozitna hydro plant 340,200 2,124 68 63 2,255 comes on line. Diesels 1993 2,206 0 2.18 0 maintained as backup 2,124 68 63 2,255 only 1994 2,288 0 2.23 0 2,124 68 63 2,255 1995 2,372 0 2.29 0 2,124 68 63 2,255 1996 2,462 0 2.35 0 o Retire both 250 kW 2,097 68 63 2,228 units and do not 1997 2,555 0 2.41 0 replace 2,097 68 63 2,228 1998 2,652 0 2.47 0 2,097 68 63 2,228 1999 2,752 0 2.54 0 2,097 68 63 2,228 2000 2,863 0 2.60 0 2,097 68 63 2,228 2001 2,972 0 2.67 0 2,097 68 63 2,228 2002-2041 2,972 0 2.67 0 2,097 68 63 2,228 €v-3 WN31V9 TABLE 10 (Cont'd) Total Discounted Fuel Fixed Annual Annual Energy Costs + Costs = Costs Costs Costs Year ($1,000) ($1,000) ($1,000) ($1,000) ($/kWh) 1982 205 142 347 337 0.28 1983 233 142 375 353 0.28 1984 246 142 388 355 0.27 1985 267 142 409 363 0.27 1986 291 173 464 400 0.29 1987 316 173 489 410 0.29 1988 346 173 519 422 0.28 1989 378 173 551 435 0.28 1990 412 193 605 464 0.29 1991 453 193 646 481 0.29 1992 0 2,255 2,255 1,629 1.06 1993 0 2,255 2,255 1,582 1.02 1994 0 2,255 2,255 1,536 0.99 1995 0 2,255 2,255 1,491 0.95 1996 0 2,228 2,228 1,430 0.90 1997 0 2,228 2,228 1,388 0.87 1998 0 2,228 2,228 1,348 0.84 1999 0 2,228 2,228 1,309 0.81 2000 0 2,228 2,228 1,271 0.78 2001 0 2,228 2,228 1,234 0.75 2002-2041 0 2,228 2,228 28,516 0.75 TOTAL $ 46,754 Total present worth of non-electrical benefits $ (491) Net present worth $ 46,263 All costs shown in thousands of dollars Note 1: Diesel fuel use is calculated at a consumption rate of 8.82 kWh produced per gallon of fuel used. Note 2: Diesel fuel price is expressed in terms of 1981 dollars, with prices escalated at 2.6 percent above general inflation. Note 3: Total annual fixed costs include funds for equipment amortization (calculated at 3%), a sinking fund for equipment overhaul and replacement, and general 08 work. vy-3 = WN31V9 GALENA E-45 TABLE 11 ESTIMATED NON-ELECTRICAL BENEFITS OF ALTERNATIVE PLAN "B" Total Annual Benefits Discounted Year (Space Heating Fuel Saving) Benefits 1982 38 37 1983 42 40 1984 46 42 1985 50 44 1986 55 47 1987 60 50 1988 65 53 1989 71 56 1990 77 59 1991 85 63 1992 0 0 1993 0 0 1994 0 0 1995 0 0 1996 0 0 1997 0 0 1998 0 0 1999 0 0 2000 0 0 2001 0 0 2002 0 0 through 2041 TOTAL: $ 491 All cost figures shown are in thousands of dollars. GALENA E-46 I.3 - Alternative Plan "B" 1.3.1 - Social and Environmental Evaluation Potential environmental impacts from construction of the Melozitna hydro plant are unknown, but the standard problems of hydro projects such as damage to fish life, disruption to wildlife, and disfigurement of the land are probable. Construction of the Melozitna plant would be a major undertaking involving substantial movement of earth. Though the site was not included in the National Wild and Scenic River program, many residents of Ruby value the region for its beauty and hunting and trapping benefits. The Melozitna River supports runs of chimock and chum salmon. Routing of the transmission line would probably face tremendous resistance from environmental interest groups. Construction of the dam would provide substantial temporary employment in the region as over 1,000 persons are foreseen for this undertaking. Construction would probably last four years. Construction would require development of a camp site and runway for airplane and helicopter landings. 1.3.2 - Technical Evaluation The proposed Melozitna hydro site was not visited by the reconnaissance field personnel, but a glimpse from the air suggested good possibilities for hydro development. People in the region who have visited the site confirm this viewpoint. The dam would probably be earth filled, but this would depend on the condition of the canyon which can only be determined by site investigations. Possibly a thin arch dam would be more practical. The site would have enough storage to allow control of the timing of generation and regulation of the river flow. Provisions could be made for future expansion by staging entry of turbines. A major undertaking would be the network of transmission lines interconnecting the villages with the dam site. GALENA E-47 J_- COMMENTS AND DISCUSSION GALENA E- 48 J.1 - Comments Received From Mr. Don Martin {Original Letter Retyped Here For Clarity] E-1 Summary GALENA E-49 Mr. Eric Yould Alaska Power Authority 334 West 5th Ave Anchorage, AK 99501 Mr. Yould, I would like to take this opportunity to respond to the draft report on Reconnaissance of Energy Requirements and Alternatives (Galena) as Prepared by Acres American Inc. dated March 1982. Indicator in the left margin relates to the page number the response is directed to: Waste Heat benefits - While presumably the City will, over the long term, realize some benefit from the waste heat system in reduced space heating cost for City buildings - the installation of the system will only generate income for the Electrical Utility to the extent that the city will pay the metered electrical cost of operating the powerhouse, most, if not all of which will be directly related to the cost of operating the remoted fans and Pumps associated with the waste heat system. O&M costs of the utility will increase due to the sophistication of the engine controls and cooling system required to utilize the waste heat. The impact on electrical costs to the consumer will be negligible, or at any rate, of much less importance than is place by the draft. Expansion of M&D Electrical utility to incorporate any projected loads on the Airforce base will potentially increase not decrease cost to utility consumers. 1) Military has indicated that they will continue to service all Federal and State operations relating to the airport or federal mission - leaving as potential consumers only Wien operations and two air taxis. 2) High transmission costs as the lines will need to be routed under the runway and be buried in the ramp area also the voltage would have to be stepped up from the present 2400 V requiring transformers and associated support systems. Maintence cost higher on a per mile basis than the existing system - witness FAA problem with airfield lighting in runway conduits - Pg E-4 Pg E-7 Pg E-8 Pg E-9 Pg E-10 Pg E-14 E-18 E-19 GALENA E-50 Energy Conservation to the degree that it would significantly impact village energy requirements not likely: 1) Energy conservation is primarily a very individual endeavor. 2) Space heating with wood not as likely to induce conservation. 3) subsidized electricity does not promote conservation. 4) imposition by regulation or ordinance or code is not reasonably expected to be productive in the "village" environment. Population is not racially segregated as indicated Building data erroneous on M&D Powerhouse - School will not be heated by waste heat as designed or installed; in fact the school by itself would require more heat than the waste heat system is capable of producing utilizing jacket water. What actually will be served by the waste heat system is the City Waterplant, Clinic and domestic water loop maintained by the City (about 1/4 mi.) : Again reference to base load expansion - little impact one way or the other as relates to consumer electrical cost - certainly not 30% as indicated - No impact on school heat cost - primary expense associated with the domestic water service provided by the city is the cost of the truck haul system delivering water and picking up sewage from the individual homes Many questions remain unanswered in using wood as a primary source for space heating: 1) long term environmental impact (permafrost) 2) real costs evaluation 3) Limited wood available over the long term within an economical radius of town among others. Growth rates (pop) proposed could be argued - Changing lifestyles will most probably bring about a larger percentage of households utilizing Electricity and per capita consumption - should be KWH - Electrical consumption will likely double in 10 years. Civilian load on base not likely to have a significant impact on the cost to the consumer or MWH sold in that location Would not see energy conservation measures having nearly so great an impact as is assumed. E-24 E-22 E-35 GALENA E-51 If higher load growth assumed the equipment upgrade cost would be erroneous - Life of Diesel Equipment as installed in Galena more in the range of 5-6 years before major overhaul or replacement - 08M cost unrealistically low if held at constant level throughout study period. Don't feel that the rating method is realistic as relates to Hydro development on a medium to large scale due to extremely long life expected (50 - 100 years) - need to plan and build a much longer range project with Hydro - emphasis on much lower 08M cost with hydro (per KWH) - promotion of Economic development on regional scale - emphasis on fuel cost (Hydro being all but free) Corps of Engineers very preliminary development cost projections for a 30 MW firm power concrete arch Dam, even with a high inflation factor, would be half that projected by Acres American. I generally feel that many basic assumptions in the draft are erroneous and therefore the conclusions would be questionable. Sincerely, Don M. Martin Don Martin PO Box 28 Galena, AK 99741 1. Comment : Response: Comment: Response: Comment: Response: GALENA E-52 ACRES' RESPONSE "The impact on electrical costs to the consumer will be negligible, or at any rate, of much less importance than is place by [sic] the draft." In the draft report, the potential benefit of the waste heat recovery system was overestimated. This benefit was reduced for the final report and the new assumptions included. New estimates confirm the position that immediate benefits will be marginal. However, as electrical energy use in the village increases, more waste heat will become available to end users such that the system would become more economically attractive. Expansion of this system could be possible in the 1990's. "Expansion of M&D Power to incorporate any projected loads on the Airforce [sic] base will potentially increase not decrease cost to utility consumers." Acres was not aware that the military base is obligated to serve most non-military funcions on base, thus limiting the potential commercial market available to M&D Power. Acres was also unaware of the unusual technical complications in providing power to potential on-base customers. With available on-base load limited to the relatively small airline services, this alternative was withdrawn from the report. "Energy conservation to the degree that it would significantly impact village energy requirements not likely Acres agrees in principle with each point raised regarding energy conservation in the villages. However, it is believed that relatively easy improvements to existing structures can reduce energy consumption by 10 percent. In most cases, improving the efficiency of the home heating system would realize this benefit (e.g., more efficient stoves). Of course, these systems would cost more money and that may be the rub. Efforts to bring about such improvements will have to come solely from the homeowner. Possibly the State could provide instructional support. The construction of new homes is another matter. Construction of more efficient homes should become a Comment : Response: Comment : Response: Comment : Response: Comment : Response: Comment : GALENA E-53 governmental policy. One good example is in Shishmaref, where double-walled homes are now being constructed by the government. On the whole, however, the government has not put the money up front into constructing more expensive, high efficiency homes with the long-term benefit of energy savings in heating. "Population is not racially segregated as indicated." The statement was withdrawn from the final report. "Building data erroneous on M&D Powerhouse ..." Description of the waste heat recovery system was corrected for the final report. See also response for Comment No. 1. "Again reference to base load expansion - little impact one way or the other as relates to consumer electrical cost - certainly not 30 percent as indicated." Draft report stated that if M&D Power took in the non-military load at the base, this would necessitate a 30 percent increase in the utility's generating capacity. This was based on information provided by the base and M&D Power. Since, in fact, as reported, the full non-military load would never switch over to the city utility, Acres withdrew the case description as one of the alternatives. "...primary expense associated with the domestic water service provided by the city is the cost of the truck haul system delivering water and picking up sewage from the individual homes." If this is indeed the case, then the revenues from all water sales must subsidize the hauling service. In November 1981, water was sold at the home for $0.08/gal, yet it was sold at the safe waterhouse for $0.05/gal. The final report was revised, however, to indicate that hauling was the major cost of operating the system. "Many questions remain unanswered in using wood as a primary source for heating..." Response: 9. Comment: Response: 10. Comment: Response: GALENA E-54 It is agreed that the use of wood for home space heating is not free of problems, especially for a village growing as fast as Galena. However, the report never recommended wood as an alternative heating fuel. Rather, it stated what was observed: more residents were turning to wood as the price of oil continued to rise. In fact, as is reported, wood heating systems are generally less efficient than oil. Also, the price of wood was held constant in real dollars because this was a basic assumption of the study as handed down by APA. Oi] was the only fuel allowed to rise in price (in real dollars) in the forecasts. "Growth rates (pop) could be argued ... Electrical consumption will likely double in 10 years." Since the development of the new site, Galena has rapidly grown in population. The village is also assuming the lead role in the region as a supply and service hub. With these factors, Galena should continue to see good population growth. Prediction of future population growth for Galena, however, depends a lot on speculation, particularly because there are no large capital projects scheduled in the near term. For this reason, an annual growth rate of 5 percent was projected for the next ten years. Residents reported that they expected to see a 5 to 10 percent growth rate, so the estimate in the report is at the low end of resident expectations. After reviewing the electrical energy forecast, however, Acres agrees that the forecast was possibly too low. Therefore, the forecast was revised upward for the final report. Basic assumptions of the new forecast are presented in the final text. One factor that greatly complicates any electrical forecast at this time is the newly implemented power cost assistance program. Until this program has been in effect several years, it will be highly speculative to project future power needs of any village affected by it. "Civilian load on base not likely to have a significant impact on the cost to the consumer or MWH [sic] sold in that location." See earlier responses. 11. Comment: Response: 12. Comment: Response: 13. Comment: Response: GALENA E£-55 "Would not see eneray conservation measures having nearly so great an impact as is assumed." See earlier response. "Life of diesel equipment as installed in Galena is more in range of 5-6 years before overhaul or replacement." If three machines are in place, and two are operating and one is kept as backup at all times, and 40,000 hours is assumed before a unit is overhauled (given there is good maintenance, which we believe Galena has), then a period of 6.9 years between overhauls is predicted. For the final report, an assumption of six years between overhauls has been made. At the end of six years, units cannot be replaced based on the 20-year life assumptions established for diesels by APA. Therefore, units must be rebuilt periodically until the end of their economic lifetime, at which point they are retired. An overhaul fund was established to provide monies for this purpose. Please note also that all costs are in real dollars so O&M expenses would not rise over the planning period. "Don't feel the rating method is realistic as relates to Hydro development on medium to large-scale due to extremely long-life expected (50-100 years) need to plan and build a much longer range project with hydro - emphasis on much lower O&M cost with hydro (per KWH [sic]) - promotion of economic development on regional scale - emphasis on fuel cost (hydro being all but free). It is standard practice to give hydro plants a 50-year economic lifetime, though it is proven that such plants may last considerably longer. The Corps of Engineers, APA, and others use this life time period to project annual plant costs, and it was a requirement of this study. One of the best assets of a hydro plant is the low O&M cost. The estimate used for the proposed Melozitna project was based on standard hydropower cost estimating techniques. The O&M cost includes replacement costs for mechanical and electrical components, general operating expenses such as labor and routine maintenance, and maintenance of transmission systems. The cost presented is believed reasonable considering the conceptual stage of this project. Keep in mind also, that these costs are based on installed 14. Comment: Response: GALENA E-56 capacity (MW) rather than energy production (MWh). Therefore, as the plant sees greater use, the O&M cost per kWh generated goes down. One major drawback to the Melozitna project is that the site has excessive hydroelectric potential in light of present regional needs. Even with optimistic assumptions, the region would be hard pressed to use a large percentage of the project's potential. At this point, a feasibility study is needed that focuses on the hydro site and on a regional electrical energy forecast. "Corps of Engineers very preliminary development cost projections for a 30 MW firm power concrete arch Dam, even with as high inflation factor, would be half that projected by Acres American." Until detailed site information is known, a concrete arch dam should not be assumed. Therefore, Acres based its cost estimate on an earth-filled dam. Also, concrete arch dams are not necessarily cheaper--their costs are site dependent. The project is too conceptual to really speculate on the configuration of the dam. Based on the little information available regarding this site, Acres does not believe its cost estimate is out of line. GALENA E- 57 J.2 - Comments Received From U. S. Department of the Army Alaska District, Corps of Engineers NPAEN-PL-& DEPARTMENT OF THE ARMY et ALASKA DISTRICT. CORPS OF ENGINEERS rad e0// GALENA E-58 P.O. BOX 7002 Vv ANCHORAGE. ALASKA 99510 REPLY TO ATTENTION OF; J 1 MAR io om od ry REGEIVED -- APR - 2 1982 Mr. Eric Yould 334 West 5th Avenue ALASKA POWER .AUTHOAITY Anchorage, Alaska 9950] Dear Mr. Yould: Tnank you for the opportunity to review your draft energy reconnais reports for FY 1982. In general, we found the reports to be comp potentially helpful in our planning studies for both hydropewer anu buat narbors. We would appreciate copies of the final reports when they are available. We have limited our comments to the reports that considered the areas we are uiost familiar with; however, some of the comments may apply to tne ctner reports as well. The attached pages list specific comments for various Communities. If we can be of further assistance, please feel free to contact Mr. Loran dsxter or my staff at 552-3461 Sincerely, 1 Incl BRROAR E- Luke 7 As statec Chief, Engineering Division GALENA E-59 {Original Comment Retyped Here for Clarity] Galena: In a letter dated 9 June 1981 (copy previously furnished to your office), Ott Water Engineers stated that they felt that a storage project with a 100 to 300-foot dam may be feasible. The Corps will be taking a second look at this site this summer to determine if a feasibility study is warranted. GALENA E-60 ACRES' RESPONSE “1. Comment: "... a storage project with a 100- to 300-foot dam may be feasible. The Corps will be taking a second look at this site this summer to determine if a feasibility study is warranted." Response: This study work will be mentioned in the final report text. GALENA E-61 J.3 - Comments Received From The Alaska Power Administration [Original Letter Retyped Here For Clarity] GALENA E-62 April 12, 1982 Mr. Eric P. Yould Executive Director Alaska Power Authority 334 West 5th Avenue, Second Floor Anchorage, Alaska 99802 Dear Mr. Yould: We have reviewed the two draft sets of reconnaissance reports of energy requirements and alternatives for numerous small Alaskan villages, transmitted to us by your March 3 letter. One was prepared by Acres American, Inc. and one by Northern Technical Services (NORTEC). We agree with the recommendations in the Acres summary report (pp. 0-6 and 0-7), and the individual village NORTEC reports. However, there appears to be a discrepancy in that the recommendations of the NORTEC summary report are not presented in the same priority as some of the individual reports. Specifically the individual reports recommend investigation before specific action is taken on new projects, while the summary report recommends immediate installation of central diesel generators in eight villages. We offer a few general comments for consideration. There appears to be a disparity between the two reports in that Acres assumed that conservation was not within the scope of consideration while NORTEC did, Neither put a "value" on conservation in terms of energy reduction. A summary comparison of energy cost per kWh for each generation technology would enhance the Acres report. Presentation of costs in terms of kWh units and a summary by technologies would also enhance the NORTEC report. Neither report addresses actual present and projected electric power costs with or without consideration of the residential subsidy under AS 44.83.162. GALENA Extending a single energy cost for a given technology to several communities leads to risk of invalid comparison based on local conditions. The description of each technology in each report is a good approach to inform lay consumers of the basic parameters. It is good to see a description of the state-of-the art of technologies that are not yet practical for power generation in remote locations such as wind, biomass, and geothermal. Thanks for the opportunity to comment. Sincerely, Robert J. Cross Administrator FSUMMERS:gs:sr 3/18/82 Yould Letter FLOYD4 E-63 1. 2. Comment: Response: Comment : Response: GALENA E-64 ACRES' RESPONSE . Acres assumed that conservation was not within the scope of consideration." No such assumption was ever made either explicitly or implicitly. In a number of village reports, the primary recommendation was that aggressive energy audit programs be undertaken forthwith. It was repeatedly noted that village residents were more concerned about the costs of home heating and the inefficiencies of their homes than they were about the supply of electricity within their village. While the study of the means necessary to achieve any meaningful savings of space heating energy was beyond the scope of the study, the effects of such savings were incorporated where appropriate. It was assumed that new housing designs which would be implemented in the villages after 1985 would be 25 to 30 percent more efficient than existing units. No "value" was placed on such improvements for the reason noted above. It is the opinion of Acres' staff that electrical energy conservation is a function of electric energy cost and is inversely related to disposable income: consumers will purchase and use those electricity-consuming devices for which they feel a need or desire. As the real cost of using these items increases, their use will likely (but not necessarily) decrease. The incorporation of so-called energy efficient lights or motors is not expected to have perceptible impact on any village's energy or demand forecast. No comment or change in report text is needed. "A summary comparison of energy cost per kWh for each generation technology would enhance the Acres report." Without site-specific parameters such as fuels costs, construction costs, and annual O&M charges, such a summary would be meaningless. Not all technologies are appropriate or available to all villages. Even where two villages may share access to a particular technology, such as diesel generation, local conditions including fuel costs, fuel consumption rates, and O&M considerations may make comparisons invalid. The comment is noted to be contradictory to the later comment that "Extending a single energy cost for a given technology to several communities leads to risk of invalid comparison based on local conditions." No comment or change in report text is needed. 3. Comment : Response: GALENA E-65 ACRES' RESPONSE "Neither report addresses actual present and projected electric power costs with or without consideration of the residential subsidy under AS 44.83.162." This omission is deliberate at the direction of the Alaska Power Authority. Study costs given are busbar costs calculated without governmental subsidy. The availability of a subsidy does not affect the economics of a power production facility; it merely shifts the burden of paying the operation costs to the government. It is also worth noting that the subsidy programs are continued from year to year at the pleasure of the legislature. No comment or change in report text is needed. GALENA E-66 J.4 - Comments Received From The State of Alaska epartment of Fish and Game GALENA E-67 STATE OF ALASKA [>= DEPARTMENT OF FISH AND GAME OFFICE OF THE COMMISSIOHER F.0--BOX 32000 JUNEAU, ALASKA 99802 PHONE: 465-4100 April 8, 1982 RECEIVED APR 1 2 1989 ALASKA POWER AUTHORITY Alaska Power Authority 334 West 5th Avenue Anchorage, Alaska 99501 Attention: Eric P. Yould, Executive Director Gentlemen: The Alaska Department of Fish and Game has reviewed the Power Authority's Draft FY 82 Energy Requirement Reconnaissance Reports for several Alaska communities. We have no comments to offer at this time. We wish, however, to review subsequent studies as they become available. Sincerely, = On bo tnauirE a fe Ronald 0. Skoog Commissioner GALENA E-68 ACRES' RESPONSE No comment or change in report text is needed. GALENA E-69 J.5 - Comments Received From U. S. Fish and Wildlife Service in Anchorage GALENA E-70 United States Department of the Interior FISH AND WILDLIFE SERVICE IN REPLY AEFEA TO: Western Alaska Ecological Services 733 W. 4th Avenue, Suite 101 WAES Anchorage, Alaska 99501 RECEIVED APR ~ 9 1999 (907) 271-4575 Mr. Eric P. Yould Executive Director ALASKA POWER AUTHORITY Alaska Power Authority 334 West 5th Avenue @ APR 1982 Anchorage, Alaska 99501 Dear Mr. Yould: We have reviewed the Alaska Power Authority's (APA) Draft FY 1982 Energy Reconnaissance Reports. If the conclusions and recommendations stated in the individual reports become those of the APA, and if the APA undertakes feasi- bility studies in fulfillment of the recommended alternatives, then the U.S. Fish and Wildlife Service (FWS) requests that the information and studies outlined below be made a part of the feasibility studies. Without current site-specific resource information and a more complete description of the proposed project, it is difficult to assess what impacts, if any, will occur to fish and wildlife resources and associated habitat. Information should be acquired and studies conducted to identify the fish and wildlife resources of the study area, identify adverse project impacts to those resources, assess alternatives to the proposed action and devise a mitigation plan that would prevent a net loss to fish and wildlife resources. Specific information to be collected and studies to be conducted which the FwS feels are necessary to adequately assess potential impacts include the following: l. Plans for construction activities and project features to minimize damage to fish, wildlife, and their habitats should be devised, e.g., erosion control, revegetation, transmission line siting, construction timing, siting the powerhouse, diversion weir, and penstock above salmon spawning habitat, etc. 2. Losses of fish and wildlife habitat should be held to a minimun, and measures to mitigate unavoidable losses and enhance resources should be devised. 3. If there is to be a diversion of water or if substantial water temperature fluctutations are imminent, then these factors should be addressed because of their possible influence on water quality and fish habitat. Aquatic data collection should at least include the following: (a) (>) (ce) GALENA E-71 Page 2 Identification of species composition and distribution of resident and anadromous fish within and downstream of the pro- ject area. Standard sampling methods such as fyke netting and minnow trapping, as well as visual observation of spawning and/or redds, should be used. Surveying and mapping of fish spawning, rearing, and over- wintering habitat as defined in the FWS Instream Flow Techniques or similar guidelines. Harvest levels and subsistence use data, if applicable. It should be incumbent upon the APA to document animal species within the project boundary. If it is determined that impacts to terrestrial mammals or bird habitat is imminent, the APA should gather habitat and population infor- mation in a manner consistent with the FWS' Habitat Evaluation Procedures. 4. Terrestrial data collection should include the following: (a) (b) Verification of game and non-game species use and occurrence within the project area. 1. Mammals. ae Historical and current harvest levels and subsistence use data. b. Site-specific wildlife observations, including wild- life sign, denning sites, feeding sites, migration routes, winter use areas, and calving areas. 2. Birds. Raptor nesting surveys within the project area. Description of vegetation, cover typing, and areal extent of each type. The FWS requests that bald eagle surveys be undertaken. If nest sites are encountered, the APA should notify the FWS. The FWS seeks to maintain a 330-foot protective zone around all active and inactive nests. Compliance with provisions of the Bald Eagle Protecton Act is mandatory. We request that the following be accomplished during the course of the studies: l. During the period of project planning, the APA should consult with federal, state, and local agencies having an interest in the fish and wildlife resources of the project area, including the Fish and Wildlife Service, prior to preparing any environmental reports. 2. The APA shall investigate and document the possible presence of any endangered or threatened species in the project area. If endangered of threatened species are determined to be present, the FWS should be notified. GALENA E-72 3. The APA shall design and conduct at project cost, as soon as prac- ticable, preparatory studies in cooperation with the FWS and the Alaska Department of Fish and Game. These studies shall include, but not be limited to, the above aquatic and terrestrial data. The studies shall also identify and evaluate general measures to avoid, offset, and/or reduce adverse project-caused impacts on fish and wildlife resources. Information from these fish and wildlife related studies shall be provided to the concerned state and federal resource agencies. Future correspondence on this, or other projects proposed by the APA should include a clear map, in sufficient detail to show the exact location of the project. This will enable the FWS to accurately determine whether or not Interior managed lands are involved. t is the desire of the FWS to work with the APA to resolve any concerns relating to fish, wildlife, and other resources. If it is determined that the project will result in resource impacts, the FWS will assist the APA in attempting to modify the project to alleviate or mitigate any adverse effects. Please feel free to contact me if you have any questions regarding our suggested feasibility studies. Sincerely, Lebet Ler Field Supervisor 1. Comment : Response: GALENA E- 73 ACRES' RESPONSE "Without current site-specific resource information and a more complete description of the proposed project, it is difficult to assess what impacts, if any, will occur to fish and wildlife resources and associated habitat. Information should be acquired and studies conducted to identify the fish and wildlife resources of the study area, identify adverse project impacts to those resources, assess alternatives to the proposed action and devise a mitigation plan that would prevent a net loss to fish and wildlife resources." The reconnaissance study scope does not provide for any but the most general identification of sites, definition of project design characteristics, and assessment of environmental consequences. The level of study effort suggested in the USF&WS letter is appropriate to a feasibility-level study of a project. No change in report text is required. GALENA E-74 J.6 - Comments Received From U.S. Bureau of Land Management (BLM) vee “REPLY REFER TO United States Department of the Interjor GALENA E-75 BUREAU OF LAND MANAGEMENT Anchorage District Office 4700 East 72nd Avenue Anchorage, Alaska 99507 APR 6 1982 RECEIVED APR - 8 1982 Mr. Eric P. Yould ‘ALASKA POWER AUTHORITY Alaska Power Authority 334 West 5th Avenue Anchorage, AK 99501 Dear Mr. Yould; ‘Reference your letter dated 3 March 1982 in which you requested This agency agrees with the contractors basic conclusions that further feasibility studies of hydro power potential should be evalu- ated at applicable locations. Generally there is little or no BLM land involved at any sites. Most locations are native selected or other non-BLM land. When actual construction plans formulate land use and ownership will be determined on a case by case basis, The opportunity to comment on this report is appreciated. Should you have further questions feel free to contact me. Sincerely, eeu aU GALENA E-76 ACRES' RESPONSE No comment or change in report text is needed. PROPERTY OF: Alaska Power Authority 334 W. 5th Ave. Anchorage, Alaska 99501