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Home My WebLink AboutEconomic and Financial Feasibility Assessment of the Swan-Tyee Lakes Intertie Project December 1994HDR Engineering, Inc. Economic and Financial Feasibility Assessment of the Swan/Tyee Lakes Intertie Project December 1994 Prepared by: Economic and Engineering Services, Inc. Bellevue, WA @ Olympia, WA @ Portland, OR Washington D.C. @ Vancouver, B.C. J NorTHROP, DEVINE & TARBELL, INC. ENGINEERING AND ENVIRONMENTAL SCIENCE June 20, 1995 ~wEIVe Dick Emerman, Senior Economist N Alaska Division of Energy JUN 26 1996 333 West 4th Avenue, Suite 220 ' OF ENERGY /T” Anchorage, Alaska 99501 Subject: Mahoney Lake Hydroelectric Project, Ketchikan Economic Evaluation Report Dear Dick: Several months ago we had a brief telephone conversation where I mentioned to you an economic evaluation study that was performed by Economic and Engineering Services (EES) for HDR Engineering, Inc as part of the FERC License Application work for Mahoney Lake. This study compared the costs of the Mahoney Lake Project to other alternatives for Ketchikan, including the Swan/Tyee Intertie. At that time, I agreed to transmit a copy of that report to you when it was available. Attached please find for your information a copy of the above referenced report. I hope this is of interest to you. Since we last spoke, I have moved from HDR Engineering to Northrop, Devine & Tarbell, Inc., at their Vancouver, WA. location, but I am still involved in the Mahoney Project. If you have any questions, please don't hesitate to call. Thanks. Sincerely, NORTHROP, DEVINE & TARBELL, INC. Jack Snyder, PE Western Regional Manager ce file Mahoney Lake M. Stimac (HDR) D. Campbell (Cape Fox) 4601 N.E. 77th Avenue + Suite 185 * Vancouver, Washington 98662 + Telephone: (206) 253-8235 + Fax (206) 253-9164 ECONOMIC AND ENGINEERING SERVICES, INC. P.O. Box 1989 + 12011 Bel-Red Rd. » Suite 201 Bellevue, Washington 98009 (206) 451-8015 » FAX (206) 451-8096 File #: December 15, 1994 Mr. Jack Snyder, Vice President HDR Engineering, Inc. 500 108th Avenue N.E., Suite 1200 Bellevue, WA 98004 Re: Economic and Financial Feasibility of Swan/Tyee Intertie Analysis Dear Mr. Snyder: Economic and Engineering Services, Inc. (EES) is pleased to issue 5 copies of an economic and financial feasibility analysis of the proposed Swan/Tyee Intertie Project (Project). We have incorporated your comments after review and offer the attached final report as a summary of our findings. Thank you for this additional opportunity to assist HDR Engineering and Cape Fox Corporation in its pursuits. Please call Steve Igoe or me directly with any questions or comments you may have regarding this report. We appreciate this opportunity to serve you on this project. Very truly yours, ECONOMIC AND ENGINEERING SERVICES, INC. sy Dalle Senior Vice President GSS:smn Enclosure ce: Steve Igoe Olympia, WA Bellevue. WA Vancouver. BC Portland.OR Washington. DC Contents Executive Summary 1 Introduction NNN Sn, OV CNV CW es cc cee sans casnccotcsaavtcoeaer sores tesssaseetn nese s esses 1.2 Objective of this Report id= Report Organi Zation scccssccecseerreeseeeeeee eee ee eens 2 Review of Project and Economic Assumptions 2.1 General Description of Electric Market ............ccccccscccssesseesseesseesseeeeseee 2-1 2.2 Proposed Intertie Description and Use..........ceeceecesseesceeeeseeeseeeseeeeseeess 2-1 2.3 Discussion of Resource Alternatives .........ccccceescessesecssseseceseeseeeneeeesneees 2-2 3 Economic Parameters and Analysis 3.1 Load and Resource AnalySis ..........cceccesceseesseseceseeseeseceeceseeeseeeaeeeeeensaees 3.2 Intertie Financing Alternatives and Discussion 3.3 Resource Cost Analysis OVerview.........cccccccssceseeeeeesscesseeeeteesesseeeeeeaeees 3:47 Principal Assumptions ....cscccseceeeeceesercecescteattacevusvasteceseceunsantsaatenteseecceres 3.5 The Resource Model and Its Dynamics .0............ccceesseesseceeeeeeseeeesseeeees ey Results of Economic Analyses A Nis Method 0] OGY rezececsccctazcvuaesesscecescstuce sassus susssusacsuasssosstesaveceessvacssastsaeeeeusress 4-1 4.2 Economic Findings—Cases 1 t0 6 ....c.cceccccssseeceseeseeneeeseeeeeeeeeneeeeeeeens 4-1 4.3 Sensitivity Analysis—Financing, Surplus Sales and Load Growth ...4-3 4.4 New Resource Compatibility. .................c.sccsscccsccsscsssssssscsscessesesssscceres 4-4 5 Conclusions 5.1 Economic and Financial Conclusions .............:.esceeceeeseeeeseeeeeeeeesaeeeeeeees 5-1 5.2 Other Conclusions and Observations .............:c:sccsccsescsssceceseteeeeeseeees 5-2 Bibliography Appendix A—KPU’s Load and Resource Balance Appendix B—Resource Cost Analysis Model: Cases One to Six Appendix C—Mahoney Hydroelectric Economic Summary Contents i BS=1\|/Preferred Resourcesipccsssccseccssscsserse seer eeece etree ee ee A Ca Tec a Uae ceaa rea cee eta ES-3 Qa existing) Hydro RESOURCES me acetectererestererisetecsttcen terse tectceeccees nec eetteneeees 2-2 2-2 Existing Diesel Resources............... 2-38 Resource Characteristics SuMMALY ...............cccccssscsssscsssccsescsseessescessecssseceesees 2-5 3-1 Intertie Financing Options ....... 3-3 3-2 Intertie Energy Cost Scenarios....... 3-4 3-3 Mahoney Power Purchase Scenarios.. 3-5 3-4))))| | Proposed|New; Resource Stackinnsacstrserseccscsccescoseotcesseseesenssessrcereoneoresessercad 3-7 4-1 Base Case) RESOUrCE| COSTS rset r cee ceec cee Le 4-2 4-2 Economic Base Case Resource Costs Under ISER’s High Growth HOT CCAS ee I EE EE LR LE Eee Cee EE eeE eG 4-4 4-3 Economic Base Case Resource Costs for ISER’s High Grow,thy Fore cas tieretee ee cere eee ee ee ererreereee 4-4 5-1 Resource Analysis Roadmap 5-2)||| Preferred JResources eset cecccs see ce eee eee ee ECS PEELE SEES ET ANT Seeae Seer tenets JSIVEEEREE ECU EEV LCE) 0Ee cee eee eee EEE Eee ee ee eee See eee EEE USER CEE LLEEEE CEE ee Contents i Executive Summary Introduction The City of Saxman and the Cape Fox Corporation of Ketchikan Alaska (Owner) are in the process of filing a FERC License Application Exhibit E in accordance with 18 CFR 4.41 for its Mahoney Lake Hydroelectric Project. This proposed project is characterized by a hydroelectric project with a lake tap configuration from the Mahoney Lake. This resource is intended as capacity and energy sales to Ketchikan Public Utilities (KPU). Based on the ability to offset diesel-fired generation and proposed interconnection facilities in currently isolated load centers, the Mahoney Lake Project offers several unique benefits. Background An analysis was developed to assess the Mahoney project and its alternatives, including the proposed Swan/Tyee Lakes Intertie Project and new oil-fired diesel generation. The analysis is based upon information collected from published studies and analyses, public record, and interviews with key individuals. The analysis included a load/resource balance of KPU's system including future load growth of Ketchikan and energy available from the proposed Swan/Tyee Lakes Intertie project. A resource cost model utilized power systems engineering and economic principles to predict the total cost of energy from the proposed generation facilities. The final analysis focused on an overall assessment of the economic and financial feasibility assessment of the new generation resources available to KPU. Given the uncertain economic and financial environment of power resource development in and around Southeast Alaska, this analysis accounted for several parameters in a conservative manner so as to provide a reliable and accurate economic assessment. The analysis included varying one or all of the following parameters: KPU's electric load growth, surplus energy sales to Ketchikan Pulp Company, alternative financing sources and energy costs for the Intertie Project, Alaska State grant funding availability, power purchase rate by KPU for the Mahoney Project, and finally resource technology. Economic Analysis The economic analysis performed determines the cumulative present value of the costs related to the various KPU power supply scenarios. Three power supply scenarios were analyzed—the Mahoney Lake Project, the Swan/Tyee Intertie Project, and new diesel oil-fired generation. With the Intertie, the amount of Lake Tyee power surplus to the needs of WML&P and PMP&L is determined based on Executive Summary ES-1 the average capability of the Lake Tyee Project less the requirements of these two utilities. This derived surplus is assumed to be available for delivery to KPU. The actual amount of power to be delivered to KPU is dependent on KPU's load requirement less the capability of KPU's existing hydroelectric resources. New diesel generation was brought on-line in 4,000 kW increments as needed. Existing diesel generation was excluded from serving future base load energy since it was determined they do not offer a continuos and reliable power supply over the long term. For the Base Case, KPU's power requirements are first met with KPU hydroelectric resources and the capability of the Swan Lake Project. To meet KPU's future load growth, five scenarios were developed to explore all possible mixes of new generation strategies. The associated economics for each resource scenario was evaluated to understand the first year and levelized cost of electricity. Next, the analysis focused on the available financing sources for the proposed Intertie Project. Sources included a state bond, state loan, market bond, and finally a state grant. Specific information on the financing options was provided by the State of Alaska's Department of Community and Regional Affairs (DCRA). According to the DCRA, it is unclear whether grants for the Swan/Tyee Intertie in FY96 and beyond will require specific appropriations from the State Legislature. Therefore, the analysis accounted for both possibilities by assuming no State grant funding and an annual $4 million appropriation over the life of the Intertie Project. Finally, the analysis focused on the cost of energy from the proposed Intertie Project and Mahoney Lake Project. The four State-owned hydroelectric facilities of Solomon Gulch, Swan Lake, Lake Tyee, and Terror Lake hydroelectric facilities are collectively known as the Four Dam Pool. Given the Intertie energy is drawn from one of the Four Dam Pool’s facilities (Lake Tyee), the price of energy for the Intertie Project will likely fall under their jurisdiction. Since this determination has not been made, the analysis has to rely upon a range of reasonable possibilities. Four Intertie energy cost approaches were utilized ranging from free energy to the Four Dam Pool wholesale rate. The cost of power from the Mahoney Lake Project likewise relied upon two possibilities, with the most likely being KPU's avoided cost. In absence of any Integrated Resource Plans from KPU, this analysis utilized both Mahoney’s real cost of power and KPU's wholesale rate from Swan Lake. Economic Environment Given the economic parameters and assumptions described above, the analysis established six cases or “economic environments” of significance as defined below. Each case relies upon a base of economic assumptions as follows. The base case assumes the medium growth forecast, no surplus energy sales from KPU to Ketchikan Pulp Company, no State grant funding, Intertie financing via state Executive Summary ES-2 sources (state loan, state bond, and market bond), and energy costs starting in 1999 at 6.5 cents per kWh for the Intertie Project and 8.7 cents per kWh for the Mahoney Lakes Project. The analysis continued with additional economic environments (Cases 2 to 6). They are: Case 1—Base Case Case 2—Base Case with Intertie energy at no cost Case 3—Base Case with Intertie energy at 2.6 cents/kWh in 1994 Case 4—Base Case with Intertie energy at 6.6 cents/kWh in 1994 Case 5—Base Case with $4 million State grant : Case 6—Base Case with Mahoney power purchase price at KPU's wholesale rate OOOOOO Results and Conclusions Assuming the resources were able to produce the rated energy capability upon demand, the resulting levelized cost of electricity are shown below. Each of the three resources were analyzed under the six economic environments described above. Table ES-1 Preferred Resources Mahoney @ KPU’s Intertie at Intertie at Intertie at State Wholesale Base Case No Cost 2.6 ¢/kWh 6.6 ¢/kWh Grant Rate Case 1 Case 2 Case 3 Case 4 Case 5 Case 6 Preferred Resource Mahoney Mahoney Mahoney Mahoney Mahoney Mahoney Resulting Levelized Cost (cents/kWh) 6.4 7.6 8.2 8.5 6.7 6.1 Resulting First Year Cost (cents/kWh) 8.7 8.7 8.7 8.7 8.7 12 These six economic environments were selected based on their likelihood of occurrence. Among the three new resource strategies, the Mahoney Lake Hydroelectric Project is the preferred resource under all six economic environments. Only the Mahoney Project offers the lowest cost, rate impact and risk exposure to KPU's ratepayers. The nature of Mahoney lends itself toward avoidance of diesel fuel risk and high capital requirements. The situation in which the Intertie Project is the preferred resource occurs only with a combination of parameters. If the State grant is available each year of the project and the Intertie energy is either no cost or the Four Dam Pool variable rate (starting at 2.6 cents/kWh in 1994), then the Tyee/Swan Lake Intertie project becomes the preferred resource. Executive Summary ES-3 Section 1 Introduction 1.1. Overview The City of Saxman and the Cape Fox Corporation of Ketchikan Alaska (Owner) is in the process of filing a FERC License Application Exhibit E in accordance with 18 CFR 4.41 for its Mahoney Lake Hydroelectric Project. The Owner retained HDR Engineering, Inc. (HDR) to provide engineering, environmental and licensing services for the Project. A Phase II Feasibility Study was provided by HDR to the Owner in November 1993. Economic and Engineering Services, Inc. (EES) has subsequently been retained to develop an economic and financial feasibility assessment of the proposed alternative resource, the Swan/Tyee Lakes Intertie (the Project). This report contains these economic findings of EES, including additional information from background research and interviews with key individuals. 1.2 Objective of this Report The overall objectives of this report are to provide input in the Owner’s FERC license application. To this end, there are several issues addressed in this report. Items specifically reviewed include: Q The value of Tyee/Swan Intertie energy to Ketchikan Public Utilities (KPU). Q Identify resource generation and transmission costs and develop relative ranking. Q Sensitivity of the Project’s economic feasibility to changing conditions. Q Impact of economics when considering the compatibility of the Intertie Project and the Mahoney Lake Hydro Project. 1.3 Report Organization This report is organized into five sections. This section provides a background and overview of the report. Section 2 describes the Intertie Project and discussion of three resource alternatives. The economic analysis conducted by EES including discussion of assumptions is provided in Section 3. Section 4 includes the results of the economic analysis including the methodology and economic findings of Cases 1 through 6. EES’ initial findings are summarized in Section 5. Introduction 1-1 Section 2 Review of Project and Economic Assumptions 2.1 General Description of Electric Market The power market considered in this analysis consists of the municipally-owned electric utility systems of Ketchikan, Wrangell and Petersburg, located in Southeast Alaska. The completion of the Lake Tyee project in 1984 interconnected the systems of Wrangell Municipal Light & Power and Petersburg Municipal Power & Light. Ketchikan Public Utilities is currently an isolated system from Wrangell and Petersburg. KPU is interconnected with Ketchikan Pulp Company (KPC), a large industrial operation that generates its own electricity. The Swan Lake Hydro Project currently serves only KPU, whereas Lake Tyee Project serves WML&P and PMP&L.” Both facilities are owned by the Alaska Energy Authority as a part of the Four Dam Pool. As part of the Four Dam Pool, these hydro resources are operated by the utilities they serve.” In the case of Lake Tyee, PMP&L and WML&P purchase the majority of their power requirements from Lake Tyee through the Thomas Bay Power Authority, a jointly operated utility agency. Thomas Bay purchases the power generated from Lake Tyee and sells it to PMP&L and WML&P. KPU and PMP&L both own and operate hydroelectric facilities in addition to Swan and Tyee. Power from these other resources is considered a priority resource over purchases from the Four Dam Pool. In addition to the hydro, all three utilities own diesel oil-fired generation capacity within their respective communities. 2.2 Proposed Intertie Description and Use The Intertie is intended to transmit power from the Lake Tyee hydroelectric project to KPU. The interconnection of the currently isolated electric system of Ketchikan through a transmission interconnection would offset reliance upon diesel-oil fired generation and draw upon underutilized hydroelectric facilities.” This notion spawned the proposed Swan/Tyee Lakes Intertie (the “Project” or the “Intertie”) to connect the hydroelectric facilities of Lake Tyee and Swan Lake. The Intertie has taken on several different routing alternatives over the years. For the purpose of performing economic comparisons within this report, we have chosen R.W. Beck’s preferred route as representative. This routing is characterized by a Review of Project and Economic Assumptions 2-1 57.5 mile long, 115-kV transmission line with wood pole H-frame construction and a 200-ft-wide cleared right-of-way.” The Swan/Tyee Lakes Intertie, as proposed, would deliver surplus power from the Lake Tyee project to KPU’s electrical system. Through this proposed transmission connection, the electric systems of Ketchikan, Wrangell and Petersburg would be interconnected. KPU will only purchase power from the Lake Tyee Project when it has requirements in excess of the combined capability of its own hydroelectric facilities and Swan Lake Project. According to the Four Dam Pool Contract, which governs sales of hydro power from Lake Tyee and Swan Lake, PMP&L and WML&P will always have first right to the generation capability of the Lake Tyee Project.” 2.3. Discussion of Resource Alternatives This report will focus on three resource alternatives - Swan/Lake Tyee Intertie, Mahoney Lake Hydroelectric Project, and diesel-oil fired generation. These three resources were analyzed to offer numerous “what if’ scenarios. Each scenario offered represents a possible condition in which KPU may add new resources. 2.3.1 Existing Hydro The existing hydroelectric resources owned and operated by KPU are Silvis Lake, Beaver Falls, and Ketchikan Falls. The combined energy capability and capacity based on actual experience are 62,700 MWh (average water years) and 11,700 kW. The actual energy generation is directly related to weather conditions and fluctuates annually. KPU also enjoys interconnection with Swan Lake, an Alaska Energy Authority-owned facility. The full energy production capability of the state-owned Lake Tyee and Swan Lake projects has never been achieved because utility loads have not been large enough. The energy production for these two projects is estimated based on the design characteristics of the projects and assumed hydrologic conditions. Generating capacity in kW and annual energy production in MWh for both average and low water conditions are shown below on Table 2-1. Table 2-1 Existing Hydro Resources Energy Capability (MWh) Hydro Resource Owner Capacity (kW) Average Low Silvis, Beaver, KPU 11,700 62,700 56,000 Ketchikan Swan Lake AEA 22,500 82,000 64,000 Lake Tyee AEA 20,000 134,400 129,900 See ee eee eee eee ae a ee eee Review of Project and Economic Assumptions 2-2 2.3.2 Existing Diesel Existing diesel-oil fired facilities primarily serve as backup to the hydroelectric resources and are typically run only for emergency and testing purposes. KPU has indicated their existing diesels have not been run for any significant extended period of time for several years with the exception of a 6 month span during 1989. Operator staffing levels have been reduced to reflect the low level of diesel dependency. KPU’s existing diesel facilities are shown below on Table 2-2. Table 2-2 Existing Diesel Resources Capacity Energy Capability Diesel Resource Owner (kW) (MWh) Totem Bight #1 KPU 2,000 Fairbanks Morse S.W. Bailey #1 KPU 3,500 Worthington S.W. Bailey #2 KPU 3,500 Worthington S.W. Bailey #3 KPU 6,450 Colt Total 15,050 Discussions with KPU indicate the Totem Bight station is in process of being sold to an undisclosed third party. Given this anticipated early 1995 completion date, Totem Bight will most likely be out of the existing resource stack. Further, the Bailey station was installed during the late 1960's.” Given an estimated 30 year design life, the useful life of this station is nearly exhausted. Finally, KPU confirms that Bailey is not a long term, continuous power source for the utility. In fact, both Worthington and Colt no longer manufacturer diesel engines, which makes a major failure nearly catastrophic. 2.3.3 Mahoney Lake Project The Mahoney Lake Project site is to be located approximately 8 miles northeast of Ketchikan on land owned by the Cape Fox Corporation and U.S. Forest Service. The proposed project consists of a lake tap of Upper Mahoney Lake at a depth of about 75 feet below the natural lake level. This configuration eliminates the need for constructing a dam since it draws available water in the lake regardless of inflow. The proposed powerhouse would contain a single hydroturbine generator unit capable of generating 9,600 kW of power and 41,740 MWh of energy during an average water year Review of Project and Economic Assumptions 2-3 excluding any transmission and station load requirements. This proposed project would intertie with KPU through the existing Swan Lake transmission line.” Characteristics of the Mahoney Lake Hydro Project are based upon HDR’s November 1993 Feasibility Report. The lake tap design alternative was recommended, and hence selected as the basis for this analysis. 2.3.4 New Resource Timing KPU indicates the Intertie energized date is scheduled for November 1998.°” Review of their schedule indicates that KPU has slipped some of the early milestones, forcing the completion to either slip or necessitating schedule compression. KPU confirms that they have not abandoned the November 1998 completion date. Discussions with Cape Fox Corporation suggest plans to complete the Mahoney Project are centered around early-1998. It appears this date represents an accelerated schedule resulting from development and permitting advances. However, due to the negligible impact on project economics, this analysis assumes project commercial operation for both the Intertie and Mahoney Projects in 1999. 2.3.5 Resource Costs Resource costs used herein are believed to represent the most accurate figures available. This analysis assumes project costs of (1) $55.6 million in 1992$ for the Intertie based on R.W. Beck’s Feasibility Study and (2) $1000/kW for new diesel-oil fired generation and (3) $23.4 million 1993 dollars for Mahoney based on HDR’s Feasibility Study.” ” 2.3.6 Current Activity Current activity for the Intertie may be segregated into environmental and engineering activities. On October 17, 1994, KPU awarded Enserch Environmental a contract to finalize the route, prepare a Federal Environmental Impact Statement, necessary federal and state permits, and applications.” Further, KPU is expected to award an engineering contract to one of 38 bidders next month for all engineering and contracting activities related to the Intertie. They include developing a general procedures manual, a detailed cost estimate and project schedule, and monthly reports and project management.” Table 2-3 below represents a summary of the resource characteristics used in this analysis. Review of Project and Economic Assumptions 2-4 Table 2-3 Resource Characteristics Summary Resource Mahoney Lake Lake Tyee Intertie New Diesel Type Lake Tap Hydro Transmission Diesel Energy (MWh) 40,905 87,367 24,528 Capacity (kW) 9,600 20,000 4,000 increments Cost (000’s in period $23,442 $55,600 $1,000 per kW dollars) Period Dollars 1993 1992 1998 Year Energized 1999 1999 When Needed Review of Project and Economic Assumptions 2-5 Section 3 Economic Parameters and Analysis 3.1. Load and Resource Analysis A 30 year energy horizon was developed for this analysis. In June 1990, the Institute of Social and Economic Research (ISER) of the University of Alaska developed a 20 year electricity forecast for KPU, WML&P and PMP&L.”” Although several forecasts including CH2M Hill, KPU and AEA were reviewed, ISER was chosen as the basis of this analysis because it most closely reflects actual load growth, contains low, medium and high projections, and offers the longest time horizon. Based on the level of future electricity requirements presented in ISER, a load and resource analysis was performed to estimate the utilization of existing generation resources, and the need for future resources by KPU. A primary focus of the load and resource analysis was to determine the amount of Lake Tyee Project power available to KPU. This analysis evaluated resource needs to meet both peak demand and annual energy requirements of KPU. The time horizon for the loads and resource analysis was extended from 2010 to 2028 at the same rate in which loads from year 2000 to 2010 grew in the ISER forecast. ISER developed a Low, Base, and High case load forecasts for each community which utilized available econometric relationships. In order to examine as many conditions as possible, this analysis incorporates all three load forecasts. Further, the Alaska Pulp Company sawmill (formerly Wrangell Forest Products), recently announced mill shutdown effective December 1, 1994. After discussions with the Thomas Bay Power Authority, it was assumed that WML&P’s load is reduced by 8,550 MWh on an average annual basis. Actual energy sales of KPU from 1990 to present were obtained to better understand the probability of tracking ISER’s forecast. Comparison indicates KPU’s actual demand has tracked closely the medium or base growth ISER projection. As such, this analysis places more emphasis on ISER’s medium growth projection. 3.2 Intertie Financing Alternatives and Discussion The economic analysis developed herein is based upon an understanding of the following financing mechanisms and alternatives. This understanding is based Economic Parameters and Analysis 3-1 upon discussions with and documentation from KPU, Division of Community and Regional Affairs (DCRA), and the Alaska Energy Authority. The Alaska State Legislature has created power project funds for issuance by DCRA. The funds are supplied by revenues from the Four Dam Pool Contract, and intended for utilities that send or receives power over certain power transmission interties. In particular, Chapter 18 of the Laws of Alaska establish the Southeast Energy Fund, which is available to utilities participating in the power transmission intertie between the Swan Lake and Tyee Lake hydroelectric project. This fund receives 40% of the balance in the Four Dam Pool Transfer Fund, and is subject to appropriation from the Alaska legislature every year.” This same Chapter 18 also permits the Alaska Industrial Development and Export Authority (AIDEA) to issue revenue:bonds for certain plants or facilities for energy resources or power transmission interties. This revenue bond is capped at $40 million and extends over 20 years, at least 10 years less than the expected Intertie design life. Lastly, Chapter 19 of the Laws of Alaska make appropriations for grants and loans for hydroelectric projects including power transmission interties. Specifically, Section 5 outlines a $20 million loan for design and construction of a power transmission intertie of at least 115 kV between the Swan Lake and Tyee Lake hydroelectric projects. The agreement offers this loan at three percent (3%) for a term of 15 years. Section 12 outlines a grant to KPU for expenses relating to the Intertie.” KPU have received two grants to date, $4.5 million in FY94 and $4 million in FY95.” Since the estimated Intertie project cost exceeds the sum of the State bond and loan, a 30 year market bond at eight percent (8%) will account for the difference. An assessment of financing sources for the proposed Intertie may be summarized as: Q State of Alaska bond with $40 million cap, 20 year term, at 6.5%. Q State of Alaska loan with $20 million cap, 15 year term, at 3%. Q Market bond with 30 year term at 8%. Q State of Alaska grant with Legislature appropriated amount and term. In order to model every possible scenario to account for the numerous uncertainties associated with financing, this analysis established eight possible scenarios for the above sources. Provisions were made to account for the uncertainty associated with the availability of State grants to fund the Intertie. Options included either covering Intertie debt service with $4.0 million per year over the life of the Intertie or no grants funding. Economic Parameters and Analysis 3-2 Upon determination of four likely financing sources, the following financing options emerged as shown below in Table 3-1. Table 3-1 Intertie Financing Options Financing Option State Loan State Bond Market Bond Financing Option 1 xX _ Financing Option 2 xX xX xX Financing Option 3 xX X Financing Option 4 x 3.3 Resource Cost Analysis Overview The economic analysis performed determines the total value of alternative KPU power supply options over the expected life of the Tyee Intertie. Unless otherwise defined costs generally escalate annually with “inflation”, where inflation is defined as the average rise prices for all goods and services in the United States’ economy in any given year. Total costs are “discounted” to account for the “time value of money,” the notion that a dollar spent today is worth more than a dollar spent tomorrow or next year. To account for the time value of money, a discount rate of 2.4 percent per year above the rate of inflation is assumed. The relative costs used for each case vary in magnitude according to the specifics of the case. Each case is defined to provide similar levels of electrical energy and capacity to KPU over the analysis period. The analysis period used in this economic model is the assumed life of the Intertie, or 30 years beginning in 1999. Costs included in the analysis are the annual costs of new generation and transmission additions, operation and maintenance costs of the Intertie and operation, maintenance and fuel costs of new and existing diesel generators. Excluded costs include certain fixed operating and capital recovery costs related to KPU’s existing generation plant, both diesel and hydroelectric. These existing fixed costs do not affect the outcome of the economic analysis because they will be incurred regardless of the case being considered. The economic analysis is related to the costs of power supply additions to and operation of the KPU electric system. According to the Four Dam Pool Contract, WML&P and PMP&L have priority to the energy available from Lake Tyee facility. Therefore, their respective systems will not be affected and no cost impacts to them are included in this analysis. The cost of power from the Intertie will ultimately be set by the Four Dam Pool’s Project Management Committee.” Since this price determination has not been made, the analysis relies upon four possibilities for the Intertie energy cost that range from no cost to KPU’s wholesale rate of 6.6 cents/kWh in 1994 dollars. The cost of power from the Mahoney Lake Project in theory is based on KPU’s avoided cost, or the price of power available to KPU were Economic Parameters and Analysis 3-3 the Mahoney Lake project not available. However, since KPU has not provided such costs, the model has again accounted for two cases. First, Mahoney’s actual cost of power production, including an additional 15 percent margin, based on the capital and O&M costs provided in HDR’s November 1993 feasibility report.” Secondly the purchase price of Mahoney power is based upon KPU’s current wholesale rate from Swan Lake, or 6.6 cents per kWh in 1994 dollars. Both the Intertie Energy Cost scenarios and Mahoney Power Purchase scenarios are shown below in Tables 3-2 and 3-3. Table 3-2 Intertie Energy Cost Scenarios No Cost Wholesale Melded Variable Total Intertie Total Intertie Total Intertie Total Intertie Purchase Rate Purchase Rate Purchase Rate Purchase Rate Year (cents/kWh) (cents/kWh) (cents/kWh) (cents/kWh) 1999 0.0 7.2 6.5 3.2 2000 0.0 7.3 6.6 3.3 2001 0.0 7.4 6.7 3.4 2002 0.0 7.6 6.8 3.6 2003 0.0 7.7 6.9 3.7 2004 0.0 7.8 7.0 3.8 2005 0.0 8.0 Mel 4.0 2006 0.0 8.2 12 4.2 2007 0.0 8.3 7.3 4.3 2008 0.0 8.5 15 4.5 2009 0.0 8.7 7.6 4.7 2010 0.0 8.9 1.7 4.9 2011 0.0 9.1 7.9 5.1 2012 0.0 9.3 8.0 5.3 2013 0.0 9.5 8.2 5.5 2014 0.0 9.7 8.4 5.7 2015 0.0 9.9 8.6 5.9 2016 0.0 10.2 8.8 6.2 2017 0.0 10.4 9.0 6.4 2018 0.0 10.7 9.2 6.7 2019 0.0 10.9 9.5 6.9 2020 0.0 11.2 9.8 7.2 2021 0.0 11.5 10.1 75 2022 0.0 11.8 10.4 7.8 2023 0.0 12.1 10.8 8.1 2024 0.0 12.4 ele 8.4 2025 0.0 12.8 11.4 8.8 2026 0.0 13.1 11.8 91 2027 0.0 13.5 12.2 9.5 2028 0.0 13.9 12.6 9.9 Net Present 0 117 103 64 Value ($) Real 1994 0.0 4.5 4.0 2.5 Levelized Cost (cents/kWh) ee ees Economic Parameters and Analysis 3-4 Table 3-3 Mahoney Power Purchase Scenarios Mahoney Project Cost KPU Wholesale Year (cents/kWh) Rate (cents/kWh) 1999 8.7 72 2000 8.7 7.3 2001 8.8 7.4 2002 8.8 7.6 2003 8.9 1.7 2004 9.0 7.8 2005 9.0 8.0 2006 9.1 8.2 2007 9.2 8.3 2008 9.2 8.5 2009 9.3 8.7 2010 9.4 8.9 2011 9.5 9.1 2012 9.6 9.3 2013 9.7 9.5 2014 9.8 9.7 2015 9.9 9.9 2016 10.0 10.2 2017 10.1 10.4 2018 10.2 10.7 2019 10.3 10.9 2020 10.4 11.2 2021 10.5 11.5 2022 10.7 11.8 2023 10.8 12.1 2024 10.9 12.4 2025 11.1 12.8 2026 11.2 13.1 2027 11.4 13.5 2028 11.5 13.9 Net Present Value ($) 117 117 Real 1994 Levelized Cost 4.8 4.5 (cents/kWh) In addition, the economic analysis has been performed with alternative load growth forecasts in accordance with ISER’s report. Three growth rates are used- low, medium or base, and high. Economic Parameters and Analysis 3-5 In total, the analysis varies seven parameters: resource mix, load growth, surplus energy sales to Ketchikan Pulp Company, availability of the State grant funding, Intertie energy cost, and the Mahoney power purchase price. Given the complexity of this resource environment, inclusion of all these parameters resulted in the most accurate assessment of KPU’s costs. However, certain parameters such as load growth, financing, and surplus sales have less of an impact than others. Therefore, a base case was established in order to run sensitivity analyses. 3.4 Principal Assumptions The economic parameters discussed herein form the basis of this analysis and associated resource option analysis model. Financing parameters were provided by the DCRA. Four Dam Pool costs were provided by the Alaska Energy Authority. Diesel costs were consistent with R.W. Beck’s Intertie feasibility study. Other key analytical assumptions follow: ei All costs are stated in current period dollars unless otherwise stated. The analysis period is the economic lifetime of the Intertie, or 30 years with operation beginning in 1999. Q Estimated future nominal or current period costs are discounted to 1994 dollars using a 2.4% real (above the rate of inflation) discount rate. fe] The fixed costs of existing hydroelectric and diesel generation are not included in this analysis. a New diesel generation capacity is estimated to cost $1,000 per installed kW and is added as needed in 4,000 kW increments with a 70 percent capacity factor. These capital costs are assumed to be recovered over a 20 year period at an assumed annual market bond interest rate of 8 percent. Q The capital costs of the Intertie are assumed to be $55.6 million in 1992 dollars. This cost is escalated to 1997 dollars assuming an annual 4 percent inflation rate. Recovery is over 30 years at a rate associated with each financing option as described in Section 3.2. Q The operations and maintenance costs of diesel generation are 1.0 cents per kWh variable and $12.50 annually per kW fixed. Diesel-oil fuel is $1 per gallon in 1997 dollars escalating at inflation plus 1 percent real. Diesel generation fuel consumption is estimated at 14 kWh per gallon. Q The value of surplus hydroelectric energy sold to Ketchikan Pulp Company is assumed to be 3.5 cents per kWh in 1992 dollars. This sale of surplus hydro Economic Parameters and Analysis 3-6 to Ketchikan Pulp from KPU is only in the event of the Intertie case with surplus energy. KPC’s maximum purchase will not exceed 15,500 MWh. Q The energy production of the existing Swan Lake and Lake Tyee hydroelectric facilities are represented by capabilities based on average water years. Q Energy losses over the Intertie and Mahoney Project are 2% of the total transmitted. An additional 2% between Swan Lake and KPU is also included for the Intertie. 3.5 The Resource Model and Its Dynamics The economic analysis is based upon a resource cost analysis model developed to better understand KPU’s future generation and transmission costs under numerous scenarios. The model integrates KPU’s load/resource balance with an economic model to determine the first year and “levelized cost” of electricity under different options or scenarics. Levelized cost is an economic method of “levelizing” the playing field for resources with different useful lives and capital/operating cost mixes. To levelize the costs of a resource, its total costs (e.g. capital investment, operations and maintenance, etc.) are divided by its benefits (energy produced in kWh). A total of five resource scenarios are shown below in_ Table 3-4. They represent KPU’s options for new generation. It has been assumed existing diesel has proven not to be a long-term, reliable power source due to reasons discussed earlier. Therefore, existing diesel is not considered a viable resource option for future planning purposes. Table 3-4 Proposed New Resource Stack (in order of development) Resource Scenario 1st 2nd 3rd 1 Mahoney Intertie Diesel 2 Intertie Mahoney Diesel 3 Mahoney Diesel cs 4 Intertie Diesel itl 5 Diesel - 010 Within the load/resource balance model, it is assumed that KPU’s power requirements are first met with KPU hydroelectric resources and the capability of the Swan Lake Project. Power requirements in excess of this supply are then met with new generation in the fashion outlined above. Economic Parameters and Analysis 3-7 Automatically within the model, the resources are added as needed in the order as shown above. When the first resource is exhausted, then the second resource fills, and so on. In the scenarios in which new diesel is added, no subsequent resource is necessary since new diesel may be added indefinitely. After assessing the sources and amounts of power from each source, the analysis derives the estimated cost of power to KPU in each year of the analysis. The costs include capital recovery, operation and maintenance, and fuel. After projection over the analysis period, these annual costs are discounted back to 1994. The summation of these total costs provide the cumulative net present value and levelized cost of each option. This first year and levelized cost were used for comparing the relative costs of the options, and are shown in Section 4. The levelized cost served as a barometer for comparing options, while the first year cost offered insight into the potential rate impact. Seven parameters were changed within the resource cost model to develop numerous cases. By varying these parameters, conclusions and insights were drawn. These conclusions and insights are described in the following section. Economic Parameters and Analysis 3-8 Section 4 Results of Economic Analysis 4.1. Methodology This analysis relies upon comparison to a base case. Definition of this base case is offered below. Economic Base Case Definition Load Growth = medium or base Financing Option #2 No Surplus Sales to KPC No State Grant Available Intertie Energy Cost = Melded rate Mahoney Purchase Price = Actual Cost per Table 3-2 per Table 3-3 Any variance for sensitivity analysis relies upon this base case. The base case represents an anchor point for comparison purposes. Through careful evaluation of all possible scenarios, it became evident six cases were key to understanding the results. These six cases were chosen due to their significant impact on the results. These six cases are described below. Case 1—Base Case Case 2—Base Case with Intertie energy at no cost Case 3—Base Case with Intertie energy at 2.6 cents/kWh Case 4—Base Case with Intertie energy at 6.6 cents/kWh Case 5—Base Case with State grant available Case 6—Base Case with Mahoney power purchase price at KPU’s wholesale rate OOOOOO In addition to the above, sensitivity studies were run on load growth, financing options, and surplus energy sales to Ketchikan Pulp Company. 4.2 Economic Findings—Cases 1 to 6 Criteria for the selection of the preferred resource option included two elements. First, the resource must offer a low levelized cost of electricity. Second, the first year cost of electricity must be reasonable to address the issue of rate impact versus current KPU retail rates. This analysis is based on annualized energy and capacity capabilities. Based on the operational characteristics of the resources analyzed, it may be prudent to understand the energy variances on a monthly basis. Results of Economic Analysis 4-1 The following results are presented below for each of the six cases defined earlier. Results of each of the six cases are attached in Appendix B. 4.2.1 Base Case or Case 1 The base case rankings indicate that Mahoney offers essentially the lowest levelized and first year cost of electricity over all other resource options. This result is driven by Mahoney’s power purchase price which is based upon actual project cost methodology. The resulting cost in cents per kWh for levelized and first year cost are shown below in Table 4-1. Table 4-1 Base Case Resource Costs (M = Mahoney; | = Swan/Tyee Intertie; D = New Diesel) Cost of Electricity (cents/kWh) Resource Scenario Resource Stack 1994 Levelized First Year 1 M, I, D 8.5 8.7 2 MD) 11.0 30.5 3 M, D 6.4 8.7 4 I,D 11.5 30.5 5 D 9.4 11.5 4.2.2 Case 2—Intertie Energy at No Cost When the Intertie energy cost from the Four Dam Pool is zero, Mahoney becomes the preferred resource. The Mahoney resource offers the lowest levelized cost at 7.6 cents. The Intertie resource yields a 100 percent rate impact over KPU’s existing retail rates with 24.1 cents per kWh in the first year, although the levelized cost is near Mahoney at 7.7 cents. 4.2.3 Case 3—Intertie Energy Cost at Variable Rate When the Intertie energy cost is tied to the Four Dam Pool’s variable power production cost, currently at 2.6 cents per kWh, Mahoney becomes the preferred resource. The resulting levelized cost for the Intertie is 10.1 cents per kWh with significant rate impacts compared to Mahoney’s 8.2 cents per kWh without significant rate impacts. Results of Economic Analysis 4-2 4.2.4 Case 4—Intertie Energy Cost at Wholesale Rate When the Intertie energy cost is tied to the Four Dam Pool’s total wholesale rate, currently at 6.6 cents per kWh, Mahoney becomes the preferred resource. Both Mahoney/Intertie (resource scenario 1) and Intertie/Diesel (resource scenario 4) have high rate impacts with first year costs exceeding 31 cents per kWh. Compare this to Mahoney’s levelized cost of 9.7 cents/kWh with first year cost at 11.5 cents per kWh, and Mahoney’s advantage is evident. 4.2.5 Case 5—State Grant Funding When the State grant is available at $4 million each year over the Intertie life (30 years), the preferred resource becomes the Mahoney Project. In this case, Mahoney’s levelized cost is 6.7 cents per kWh with first year cost of 8.7 cents per kWh. It is important to note that the Intertie/Mahoney scenario (resource scenario 2) yields a levelized cost of 6.5 cents per kWh when Intertie is first, then Mahoney is built when needed in year 2018. Although an attractive levelized cost, this scenario presents significant rate impact issues to KPU due to first year costs of 15.1 cents per kWh (near 100 percent rate increase to KPU’s ratepayers). 4.2.6 Case 6—Mahoney’s Power Purchase Price at KPU’s Wholesale Rate Lastly when Mahoney’s power purchase price is set by the current Four Dam Pool’s total wholesale rate, then Mahoney followed by diesel (resource option 3) becomes the preferred scenario. This case results in 6.1 cents per kWh levelized and 7.2 cents per kWh first year cost. 4.3. Sensitivity Analysis—Financing, Surplus Sales and Load Growth A sensitivity analysis was performed to understand the impact on results under the four financing options noted above. This sensitivity analysis resulted in two conclusions. First, option 2 yielded the lowest levelized cost of electricity. This option utilizes the $20 million of a state loan, $40 million of a state bond, and the remainder in a market bond. Second, the variance across all four financing options was marginal as it did not exceed 0.6 cents per kWh in the base case. Therefore, KPU will likely take advantage of the State financing if it is available as other financing options will not significantly effect the rankings. The surplus energy sales to Ketchikan Pulp Company was treated as an incremental condition. In the event surplus energy existed from the Intertie and provided KPC needed this energy, the sale of up to 15,500 MWh occurred at KPU’s Results of Economic Analysis 4-3 existing surplus energy rate. As an incremental condition, this parameter also had marginal impact on the economics, and no impact on relative project rankings. This analysis relied upon ISER’s medium growth forecast as the basis. As discussed earlier, KPU’s actual sales from 1990 to present have closely tracked this forecast. However, a sensitivity study examined the impact on the results and ranking when changing KPU’s demand to ISER’s low and high growth projections. KPU’s current hydroelectric energy resources generates 147,650 MWh. Assuming this supply over the 30 year time horizon, it appears KPU’s net energy and capacity requirement are in surplus based on ISER’s low growth forecast. During the high growth case, KPU will need significant amounts of energy and capacity to meet future projected growth. The load/resource balance shown in Appendix B defines these specific values. In fact, given similar new resource characteristics, both the Mahoney and Intertie Project will be fully utilized concurrently as early as the second year of operation. In all others cases where either hydro is followed by new diesel or new diesel alone, new diesel based generation acts as a filler. New diesel capacity is added as before in 4,000 kW increments up to as much as 68 MWs in resource option 5. The levelized cost and first year costs in cents per kWh shown below in Table 4-2, represent the high growth forecast for the base case. Values confirm consistent rankings as the medium growth scenario, including the state financing option edging out other financing options. Table 4-2 Economic Base Case Resource Costs Under ISER’s High Growth Forecast (M = Mahoney; | = Swan/Tyee Intertie; D = New Diesel) Cost of Electricity (cents/kWh) Resource Scenario Resource Stack 1994 Levelized First Year 1 M, I, D 9.1 13.1 2 I,M,D 9.1 12.9 3 M, D 8.2 9.5 4 I,D 9.8 13.7 5 D 8.9 9.5 4.4 New Resource Compatibility Given the five resource scenarios outlined earlier, new resource timing issues are readily addressed by examining the 30 year energy horizon. Several conclusions pertaining to resource compatibility were drawn from the base case. First, the year in which the Mahoney project and the Intertie are fully utilized by KPU Results of Economic Analysis 4-4 independent of each other is 2007 and 2018 respectively. Secondly, when Mahoney is followed by the Intertie (and vice versa) as defined in resource scenario 1 and 2, then the Intertie (or Mahoney) is not fully realized till the last year, or 2028. This suggests KPU’s net requirements allow little room for both resources concurrently. Further, consideration should be paid to capital recovery of either the Mahoney or Intertie projects in the unfavorable, yet likely event either resource is not fully utilized until several years after being energized. Lastly, economic results favor the notion there is little room for the Mahoney Project if followed by the Intertie Project. Given this occurrence in year 2018, future realities are likely to change the capital cost, load growth and bond rate. Results of Economic Analysis 4-5 Section 5 Conclusions 5.1. Economic and Financial Conclusions Ultimately the lowest cost resource is a function of what assumptions are made about future conditions. After applying discretion to over 900 possible cases, certain cases should be analyzed further. Actual resource cost models were run for all conditions as shown below. This “road map” of analysis shown below in Table 5-1 depicts the resource scenario analyzed as it relates to the six economic environments or cases described earlier. Table 5-1 Resource Analysis Roadmap Mahoney @ KPU’s Intertie at Intertie at Intertie at State Wholesale Resource Base Case No Cost 2.6¢/kWh 6.6 ¢/kWh Grant Rate Scenario Case 1 Case 2 Case 3 Case 4 Case 5 Case 6 1 x xX xX x x xX Xx xX Xx ark won PS PS OS OPS Economic results of the base case are shown in Table 4-1. The preferred resource for each of the six cases are shown below in Table 5-2. The analyses indicate that the Mahoney Project is preferred in all cases. Table 5-2 Preferred Resources Case 1 Case 2 Case 3 Case 4 Case 5 Case 6 Mahoney Mahoney Mahoney Mahoney Mahoney Mahoney Resulting Level Cost (cents/kWh) 6.4 7.6 8.2 8.5 6.7 6.1 Resulting First Year Cost (cents/kWh) 8.7 8.7 8.7 8.7 8.7 7.2 Conclusions 5-1 Economically speaking, Mahoney offers the lowest costs when conditions surrounding cases 1 through 6 exist. In these cases, only the Mahoney project offers the smallest rate impact and lowest cost to KPU’s ratepayers. Given the nature of locking into a power purchase agreement with Mahoney, KPU avoids any diesel fuel risk in the future and thus offers less exposure to KPU. Although this same benefit applies to any hydro resource including the Intertie, the significant difference with the Intertie is the high capital intensive nature of the project and its high rate impact in the initial years of operation. When the Mahoney and Intertie Projects are both done together, results yield the highest levelized cost of power. This is indicative of high capital cost spread over a relatively small KPU energy requirement. Only in the high growth forecast does this double resource addition have merit to KPU’s system. Further, economic results add value to the argument that Mahoney is not cost-effective if done after the Intertie in year 2018. Ultimately, the economic analysis suggest the Intertie is lower cost only in the following combination of conditions: receiving a State grant and obtaining free power from the Four Dam Pool. This combination of events seems unlikely. Regarding the State grant, DCRA indicates that no assurance exists within current State laws that the legislature will appropriate grant funding each and every year given the State’s decreasing oil revenues. The attached Tyee-Swan Intertie Funding letter dated May 24, 1994, by DCRA provides additional information. Regarding energy cost for Lake Tyee Intertie from the Four Dam Pool, the Project Management Committee’s decision will likely impact the outcome of these economics. Most indications from Thomas Bay Power Authority, WML&P, and PMP&L suggest the likelihood of free energy is very remote. Since variable costs do exist for production of this power, it seems likely that the minimum cost would be at least 2.6 cents per kWh. A more reasonable approach would be the melded rate in which the Four Dam Pool total wholesale rate will likely decrease slightly as fixed cost is spread over more kWh sales (see Table 3-1). 5.2 Other Conclusions and Observations Non-economic conclusions are best summarized as all other. For instance, adding new diesel generation in 4 MW blocks as suggested in resource scenario 5 may involve understanding environmental, siting, interconnection, and fuel associated implications. Further, the running of existing diesel may be prudent in delaying the short term purchasing of new diesel only if technically feasible. The expected high cost impacts of replacement parts and nearly exhausted facility life will likely be a major limiting factor. Further information regarding KPU adding new generation resources may be contained in any Integrated Resource Plan (IRP) or Least Cost Plan (LCP) that may exist. Conclusions 5-2 Bibliography (1) Lake Tyee to Swan Lake Transmission Intertie by R.W. Beck and Associates, Inc., June 1992, for the Alaska Energy Authority (2) Southeast Alaska Transmission Intertie Study by Harza Engineering Company, October 1987, for the Alaska Power Authority (3) Data for Tyee/Swan Lake Intertie Letter dated November 22, 1994 by Ketchikan Public Utilities to Economic and Engineering Services, Inc. (4) Analysis of KPU Avoided Costs Letter dated May 18, 1994 by HDR Engineering, Inc. to the Cape Fox Corporation (5) Chapter 18 of 1993 Laws of Alaska by the Legislature of the State of Alaska, dated May 13, 1993 (6) Chapter 19 of 1993 Laws of Alaska by the Legislature of the State of Alaska, dated May 13, 1993 (7) Tyee-Swan Intertie Funding Memorandum dated May 24, 1994 by Department of Community and Regional Affairs for the Division of Energy (8) Swan Lake-Lake Tyee Intertie Engineering Contract RFP Contract No. 94-51 by Ketchikan Public Utilities, September 1994 (9) Swan Lake-Lake Tyee EIS RFP Contract No. 94-41 by Ketchikan Public Utilities, October 17, 1994 (10) Long-Term Power Sales Agreement Four Dam Pool of the Alaska Power Authority (11) Electric Load Forecast for Ketchikan, Metlakatla, Petersburg and Wrangell, Alaska: 1990-2010 by the Institute of Social and Economic Research dated June 25, 1990 for the Alaska Energy Authority (12) Mahoney Lake Feasibility Report by HDR Engineering, Inc. dated November 1993 for the Cape Fox Corporation eee Bibliography KPU-Owned Swan Total w/oExisting Total w/ KPU'S EXISTING ELECTRIC RESOURCES ENERGY SUPPLY (MWh) (MWh) (MWh) (MWh) 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 (MWh) 65,650 65,650 65,650 65,650 65,650 65,650 65,650 65,650 65,650 65,650 65,650 65,650 65,650 65,650 65,650 65,650 65,650 65,650 65,650 65,650 65,650 65,650 65,650 65,650 65,650 65,650 65,650 65,650 65,650 65,650 82,000 147,650 82,000 147,650 82,000 147,650 82,000 147,650 82,000 147,650 82,000 147,650 82,000 147,650 82,000 147,650 82,000 147,650 82,000 147,650 82,000 147,650 82,000 147,650 82,000 147,650 82,000 147,650 82,000 147,650 82,000 147,650 82,000 147,650 82,000 147,650 82,000 147,650 82,000 147,650 82,000 147,650 82,000 147,650 82,000 147,650 82,000 147,650 82,000 147,650 82,000 147,650 82,000 147,650 82,000 147,650 82,000 147,650 82,000 147,650 0 147,650 0 147,650 0 147,650 0 147,650 0 147,650 0 147,650 0 147,650 0 147,650 0 147,650 0 147,650 0 147,650 0 147,650 0 147,650 0 147,650 0 147,650 0 147,650 0 147,650 0 147,650 0 147,650 0 147,650 0 147,650 0 147,650 0 147,650 0 147,650 0 147,650 0 147,650 0 147,650 0 147,650 0 147,650 0 147,650 CAPACITY SUPPLY KPU-Owned Swan (MW) 11.9 11.9 11.9 11.9 11.9 11.9 11.9 11.9 11.9 19 11.9 11.9 11.9 11.9 11.9 11.9 11.9 11.9 11.9 11.9 11.9 11.9 11.9 11.9 11.9 11.9 11.9 11.9 11.9 11.9 (MWh) 22.5 22.5 22.5 22.5 22.5 22.5 22.5 22.5 22.5 22.5 22.5 22.5 22.5 22.5 22.5 22.5 22.5 22.5 22.5 22.5 22.5 22.5 22.5 nee 22.5 22.5 22.5 22.5 22.5 22.5 Total w/oExisting Total w/ (MW) 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 (MW) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 (MW) 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 11/23/94 02:57 PM SAL 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Available Lake WML&P Available — Energy Year Tyee WML&P Mill Adj. PMP&L Energy w/ Trans Losses (MWh) (MWh) (MWh) (MWh) (MWh) (MWh) 134,400 15,815 = (8,550) 29,340 97,795 93,883 134,400 15,922 = (8,550) 29,532 97,496 93,596 134,400 15,964 (8,550) 29,584 97,402 93,506 134,400 16,005 = (8,550) 29,617 97,328 93,435 134,400 16,043 (8,550) 29,662 97,245 93,355 134,400 16,098 (8,550) 29,733 97,119 93,234 134,400 16,170 (8,550) 29,830 96,950 93,072 134,400 16,244 (8,550) 29,931 96,775 92,904 134,400 16,330 (8,550) 30,064 96,556 92,694 134,400 16,411 = (8,550) 30,182 96,357 92,503 134,400 16,461 (8,550) 30,238 96,251 92,401 134,400 16,517 = (8,550) 30,306 96,127 92,282 134,400 16,583 = (8,550) 30,397 95,970 92,131 134,400 16,649 (8,550) 30,488 95,312 91,980 134,400 16,716 = (8,550) 30,580 95,654 91,828 134,400 16,783 (8,550) 30,671 95,496 91,676 134,400 16,850 (8,550) 30,763 95,337 91,523 134,400 16,917 (8,550) 30,856 95,177 91,370 134,400 16,985 (8,550) 30,948 95,017 91,216 134,400 17,053 (8,550) 31,041 94,856 91,062 134,400 17,121 (8,550) 31,134 94,695 90,907 134,400 17,190 = (8,550) 31,228 94,533 90,751 134,400 17,258 = (8,550) 31,321 94,370 90,595 134,400 17,327 = (8,550) 31,415 94,207 90,439 134,400 17,397 (8,550) 31,509 94,044 90,282 134,400 17,466 (8,550) 31,604 93,880 90,124 134,400 17,536 = (8,550) 31,699 93,715 89,966 134,400 17,606 = (8,550) 31,794 93,550 89,808 134,400 17,677 (8,550) 31,889 93,384 89,649 134,400 17,748 = (8,550) 31,985 93,218 89,489 KPU's LAKE TYEE AVAILABILITY - ENERGY AND CAPACITY Low Growth Forecast Appendix A Lake WML&P Available (MW) (MW) (MW) (MW) (MW) 15.3 52 (0.7) 5.8 7.0 15.3 3.2 (0.7) 5.8 7.0 153 3.2 (0.7) 5.8 7.0 15.3 32 (0.7) 5.8 7.0 153 32. (0.7) 5.8 7.0 15.3 3.2 (0.7) 5.9 6.9 15.3 33 (0.7) 5.9 6.8 15.3 33 (0.7) 5.9 68 1533 33 (0.7) 5.9 6.8 153 i) (0.7) 5.9 6.8 1523) 33 (0.7) 6.0 6.7 15.3 33 (0.7) 6.0 6.7 15.3 33 (0.7) 6.0 6.7 15.3 3.3 (0.7) 6.0 6.7 15.3 30 (0.7) 6.1 6.7 15.3 33 (0.7) 6.1 6.6 153 3.3 (0.7) 6.1 6.6 15.3 3.4 (0.7) 6.1 6.6 15.3 3.4 (0.7) 6.1 6.5 15.3 3.4 (0.7) 6.1 6.5 15.3 3.4 (0.7) 6.2 6.5 15.3 3.4 (0.7) 6.2 6.5 15.3 3.4 (0.7) 6.2 6.4 15.3 3.4 (0.7) 6.2 6.4 15.3 3.4 (0.7) 6.2 6.4 15.3 3.4 (0.7) 6.3 6.3 153 3:5 (0.7) 6.3 6.3 15:3 3 (0.7) 6.3 6.3 15.3 35 (0.7) 6.3 6.3 15.3 32) (0.7) 6.3 6.2 11/23/94 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Available Lake WML&P Available — Energy Year Tyee WML&P Mill Adj, PMP&L Energy w/ Trans Losses (MWh) (MWh) (MWh) (MWh) (MWh) (MWh) 134,400 17,902 (8,550) 34,041 91,007 87,367 134,400 18,154 = (8,550) 34,578 90,218 86,609 134,400 18,379 = (8,550) 35,056 89,515 85,934 134,400 = 18,557 (8,550) 35,444 88,949 85,391 134,400 = 18,744 (8,550) 35,849 88,357 84,823 134,400 = 18,959 (8,550) 36,319 87,672 84,165 134,400 19,228 (8,550) 36,895 86,827 83,354 134,400 = 19,539 (8,550) 37,564 85,847 82,413 134,400 19,880 = (8,550) 38,294 84,776 81,385 134,400 20,245 = (8,550) 39,071 83,634 80,289 134,400 20,603 (8,550) 39,833 82,514 79,213 134,400 20,941 (8,550) 40,547 81,462 78,204 134,400 21,234 = (8,550) 41,196 80,520 77,299 134,400 = 21,531 (8,550) 41,855 79,564 76,381 134,400 = 21,833 (8,550) 42,525 78,593 75,449 134,400 = 22,139 (8,550) 43,205 77,606 74,502 134,400 22,448 = (8,550) 43,896 76,605 73,541 134,400 22,763 (8,550) 44,599 75,589 72,565 134,400 23,081 = (8,550) 45,312 74,556 71,574 134,400 23,405 (8,550) 46,037 73,508 70,568 134,400 = 23,732 (8,550) 46,774 72,444 69,546 134,400 24,065 (8,550) 47,522 71,363 68,509 134,400 24,401 (8,550) 48,282 70,266 67,455 134,400 24,743 (8,550) 49,055 69,152 66,386 134,400 25,089 (8,550) 49,840 68,021 65,300 134,400 25,441 (8,550) 50,637 66,872 64,197 134,400 25,797 (8,550) 51,448 65,706 63,077 134,400 26,158 (8,550) 52,271 64,521 61,940 134,400 26,524 (8,550) 53,107 63,319 60,786 134,400 26,896 (8,550) 53,957 62,098 59,614 KPU's LAKE TYEE AVAILABILITY - ENERGY AND CAPACITY Base Case-Medium Growth Forecast Appendix A Lake WML&P Available (MW) (MW) (MW) (MW) (MW) 15.3 3.6 (0.7) 6.7 5.7 153 3.7 (0.7) 6.8 5.5 15.3 oe (0.7) 6.9 5.4 15.3 Sa (0.7) 7.0 5.3 15.3 3.8 (0.7) 71 Sel 15.3 3.8 (0.7) TA 521 15.3 3.9 (0.7) 73 4.8 15.3 4.0 (0.7) 74 4.6 15.3 4.0 (0.7) 7.5 4.5 153 4.1 (0.7) 17 42 15:3 42 (0.7) 7.8 4.0 15.3 42 (0.7) 8.0 3.8 153 43 (0.7) 8.1 37 15.3 43 (0.7) 8.3 3.5 15.3) 44 (0.7) 8.4 3.3 15.3 4.4 (0.7) 8.5 3.1 153 4.5 (0.7) 8.6 2.9 15.3 4.5 (0.7) 8.8 2.7 15.3 4.6 (0.7) 8.9 2.6 15.3 4.6 (0.7) 9.0 2.4 153 4.7 (0.7) 9.2 2.2 153 4.7 (0.7) 9.3 2.0 153 4.8 (0.7) 9.4 1.8 153 4.9 (0.7) 9.5 1.7 15.3 4.9 (0.7) 97 LS 153) 5.0 (0.7) 98 13 15.3) 5.0 (0.7) 9.9 Lt 153) 5:1 (0.7) 10.0 0.9 15.3 5.1 (0.7) 10.2 0.7 15.3 52 (0.7) 10.3 0.6 11/23/94 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 KPU (MWh) 249,260 260,218 264,411 270,808 276,556 282,768 290,442 298,989 308,090 318,308 329,184 340,029 349,210 358,638 368,322 378,266 388,480 398,969 409,741 420,804 432,165 443,834 455,817 468,124 480,764 493,744 507,075 520,767 534,827 549,268 High Growth Forecast Supply Supply Netreq. Net req. (MWh) (MWh) 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 (MWh) (MWh) 101,610 101,610 112,568 112,568 116,761 116,761 123,158 123,158 128,906 128,906 135,118 135,118 142,792 142,792 151,339 151,339 160,440 160,440 170,658 170,658 181,534 181,534 192,379 192,379 201,560 201,560 210,988 210,988 220,672 220,672 230,616 230,616 240,830 240,830 251,319 251,319 262,091 262,091 273,154 273,154 284,515 284,515 296,184 296,184 308,167 308,167 320,474 320,474 333,114 333,114 346,094 346,094 359,425 359,425 BIST, S73 117 387,177 387,177 401,618 401,618 KPU (MW) 50.6 52.8 53.6 54.9 56.1 57.4 59.0 60.7 62.5 64.6 66.8 69.1 71.0 12.9) 74.8 76.9 78.9 81.1 83.3 85.5 87.8 90.2 92.6 95.1 OTT, 100.3 103.0 105.8 108.7 111.6 (MW) 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 PROJECTED TOTAL ENERGY AND PEAK DEMAND REQUIREMENTS (MW) 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 (MW) -16.2 -18.4 -19.2 -20.5 -21.7 -23.0 -24.6 -26.3 -28.1 -30.2 -32.4 -34.7 -36.6 -38.5 -40.4 -42.5 -44.5 -46.7 -48.9 “S11 -53.4 -55.8 58.2 -60.7 -63.3 -65.9 -68.6 -71.4 -74.3 -77.2 Supply Supply Netreq. Netreq. (MW) 16.2 18.4 19.2 20.5 Qed: 23.0 24.6 26.3 28.1 30.2 32.4 34.7 36.6 38.5 40.4 42.5 44.5 46.7 48.9 Sle 53.4 55.8 58.2 60.7 63.3 65.9 68.6 71.4 74.3 dee Appendix A 11/23/94 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 KPU (MWh) 140,504 141,103 141,545 141,898 142,178 142,546 135,614 136,015 136,874 137,696 138,237 138,838 138,560 138,283 138,007 137,731 137,455 137,180 136,906 136,632 136,359 136,086 135,814 135,542 135,271 135,001 134,731 134,461 134,192 133,924 Low Growth Forecast Supply Supply Netreq. Net req. (MWh) (MWh) 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 (MWh) (7,146) (6,547) (6,105) (5,752) (5,472) (5,104) (MWh) (7,146) (6,547) (6,105) (5,752) (5,472) (5,104) (12,036) (12,036) (11,635) (11,635) (10,776) (10,776) (9,954) (9,413) (8,812) (9,090) (9,367) (9,643) (9,919) (9,954) (9,413) (8,812) (9,090) (9,367) (9,643) (9,919) (10,195) (10,195) (10,470) (10,470) (10,744) (10,744) (11,018) (11,018) (11,291) (11,291) (11,564) (11,564) (11,836) (11,836) (12,108) (12,108) (12,379) (12,379) (12,649) (12,649) (12,919) (12,919) (13,189) (13,189) (13,458) (13,458) (13,726) (13,726) KPU (MW) 28.4 28.5 28.6 28.7 28.7 28.8 27.4 27-5 27.6 27.8 27.9 28.0 27.9 21:9 27.8 27.8 Cues 27.7 27.6 27.6 27.5 27.4 27.4 273 27.3 O72 272 Dil 27.) 27.0 PROJECTED TOTAL ENERGY AND PEAK DEMAND REQUIREMENTS Supply Supply Netreq. Net req. (MW) 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 (MW) 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 (MW) 6.0 59) 5.8 Sa Sa 5.6 7.0 6.9 6.8 6.6 6.5 6.4 6.5 6.5 6.6 6.6 6.7 6.7 6.8 6.8 6.9 7.0 7.0 Tal 7A ee Te Ts) ws 7.4 (MW) -6.0 519) -5.8 -5.7 Se] -5.6 -7.0 -6.9 -6.8 -6.6 -6.5 -6.4 -6.5 -6.5 -6.6 -6.6 -6.7 -6.7 -6.8 -6.8 -6.9 -7.0 -7.0 7.1 7.1 -7.2 -7.2 Ted) -7.3 -7.4 Appendix A 11/23/94 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 KPU (MWh) 173,503 175,631 177,486 178,850 180,127 181,768 183,978 186,583 189,512 192,714 9559 10 198,917 201,503 204,122 206,776 209,464 212,187 214,946 217,740 220,571 223,438 226,343 229,285 232,266 235,285 238,344 241,442 244,581 247,761 250,982 PROJECTED TOTAL ENERGY AND PEAK DEMAND REQUIREMENTS Base Case-Medium Growth Forecast Supply Supply Netreg. Net req. (MWh) (MWh) 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 147,650 (MWh) 25,853 27,981 29,836 31,200 32,477 34,118 36,328 38,933 41,862 45,064 48,261 51,267 53,853 56,472 59,126 61,814 64,537 67,296 70,090 72,921 75,788 78,693 81,635 84,616 87,635 90,694 93,792 96,931 (MWh) 25,853 27,981 29,836 31,200 32,477 34,118 36,328 38,933 41,862 45,064 48,261 51,267 53,853 56,472 59,126 61,814 64,537 67,296 70,090 72,921 75,788 78,693 81,635 84,616 87,635 90,694 93,792 96,931 100,111 100,111 103,332 103,332 KPU (MW) 34.9 35.1 35.5 35.9 36.2 36.5 36.8 37.2 37.8 38.4 39.0 40.3 40.9 41.4 42.0 42.6 43.2 43.8 44.4 45.0 45.7 46.3 47.0 47.6 48.3 49.0 49.6 50.3 51.0 51.8 (MW) 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 (MW) 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 34.4 (MW) -0.5 -0.7 “Ll al5 -1.8 -2.1 -2.4 -2.8 -3.4 -4.0 -4.6 -5.9 -6.5 -7.0 -7.6 8.2 -8.8 -9.4 -10.0 -10.6 11.3 “11.9 -12.6 -13.2 -13.9 -14.6 15.2 15.9 -16.6 17.4 Supply Supply Netreq. Net req. (MW) 0.5 0.7 el ies) 1.8 aul 2.4 2.8 3.4 4.0 4.6 S29) 6.5 7.0 7.6 8.2 8.8 9.4 10.0 10.6 3, 119 12.6 132 13.9 14.6 15.2 159) 16.6 17.4 Appendix A 11/23/94 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Available Lake WML&P Available — Energy Year Tyee WML&P Mill Adj. PMP&L Energy w/ Trans Losses : (MWh) (MWh) (MWh) (MWh) (MWh) (MWh) 134,400 30,660 (8,550) 42,942 69,348 66,574 134,400 31,160 ~ (8,550) 44,116 67,674 64,967 134,400 31,755 = (8,550) 45,574 65,621 62,996 134,400 32,348 = (8,550) 46,947 63,655 61,109 134,400 33,035 (8,550) 48,524 61,391 58,935 134,400 33,787 = (8,550) 50,254 58,909 56,553 134,400 34,599 = (8,550) 52,128 56,223 53,974 134,400 35,444 = (8,550) 54,075 53,431 51,294 134,400 36,362 (8,550) 56,185 50,403 48,387 134,400 37,372 (8,550) 58,500 47,078 45,195 134,400 38,428 = (8,550) 60,915 43,607 41,863 134,400 39,454 (8,550) 63,286 40,210 38,602 134,400 40,401 = (8,550) 65,628 36,922 35,445 134,400 41,371 — (8,550) 68,056 33,524 32,183 134,400 42,363. = (8,550) 70,574 30,013 28,812 134,400 43,380 = (8,550) 73,185 26,385 25;329) 134,400 44,421 (8,550) 75,893 22,636 21,730 134,400 45,487 = (8,550) 78,701 18,762 18,011 134,400 46,579 = (8,550) 81,613. 14,758 14,168 134,400 47,697 (8,550) 84,633 10,620 10,196 134,400 48,842 (8,550) 87,764 6,344 6,091 134,400 50,014 (8,550) 91,011 = 1,925 1,848 134,400 51,214 = (8,550) 94,379 0 0 134,400 52,443 = (8,550) 97,871 0 0 134,400 53,702 = (8,550)101,492 0 0 134,400 54,991 = (8,550)105,247 0 0 134,400 56,311 — (8,550)109,141 0 0 134,400 57,662 = (8,550)113,179 0 0 134,400 59,046 = (8,550)117,367 0 0 134,400 60,463 = (8,550)121,710 0 0 KPU's LAKE TYEE AVAILABILITY - ENERGY AND CAPACITY High Growth Forecast Appendix A Lake WML&P Available (MW) (MW) (MW) (MW) (MW) 153 44 (0.7) 8.5 Beh F533) as (0.7) 8.7 2.8 153 4.6 (0.7) 9.0 2.4 15.3 4.7 (0.7) 92 2.1 1533 4.9 (0.7) 9.6 IS E53 5.0 (0.7) 9.9 El 153 oe (0.7) 10.3 0.5 15.3 5.4 (0.7) 10.6 0.0 15:3) 5.6 (0.7) Ne -0.7 153 5.8 (COA PLS -1.3 153 6.0 (O77) 1210 -2.0 153 6.2 (OST) 12:5) -2.7 153) 6.4 (0.7) 13.0 -3.3 153 6.6 (0.7) 13.4 -4.0 15.3 6.8 (O27) |))/13:9 -4.7 153 7.1 (0.7) 14.5 -5.5 153 7.3 (0.7) 15.0 -6.2 15.3 iS) (O:7) SS) -7.0 15.3 78 (O:7)) 1631 -7.9 15:33 8.0 COM) G7 -8.7 15.3 8.3 (COM LTS -9.6 15:3) 8.6 (0.7) 18.0 -10.5 153) 8.9 (Ol7) 18-6) 115 1333 92 (07) 193 ||) =12:4 15.3 05 (0:7)))))20.0)))) 15:5 15.3 98 (0.7) 20.8 -14.5 153 10.1 (Oc7) )))/216 ||) -15:6 153 10.4 (OH) 22:6 ))) 1637, 15:3) 10.8 (Ok) 23:2 17-9 15.3 He (0.7) 24.0 -19.1 11/23/94 Base Economic Case or Case One Capital Cost Capital Cost Intertie Project Life 30 years Inflation 4.0% per year Real Discount 2.40% per year State loan term 15 years State loan rate 3.0% per year State Bond term 20 years State Bond Rate 6.5% per year Market bond term 30 years Market bond rate 8.0% per year State Grant Switch 0 f KPU Existing Energy Resource Mahoney Year Need = w/o diesel Hydro (MWh) (MWh) (MWh) 1999 173,503 147,650 25,853 2000 175,631 147,650 27,981 2001 177,486 147,650 29,836 2002 178,850 147,650 31,200 2003 180,127 147,650 32,477 2004 181,768 147,650 34,118 2005 183,978 147,650 36,328 2006 186,583 147,650 38,933 2007 189,512 147,650 40,905 2008 192,714 147,650 40,905 2009 195,911 147,650 40,905 2010 198,917 147,650 40,905 2011 201,503 147,650 40,905 2012 204,122 147,650 40,905 2013 206,776 =—:147,650 40,905 2014 = 209,464 =—-147,650 40,905 2015 212,187 147,650 40,905 2016 =. 214,946 = 147,650 40,905 2017 217,740 147,650 40,905 2018 = 220,571 ~=—:147,650 = 40,905 2019 223,438 147,650 40,905 2020 226,343 147,650 40,905 2021 229,285 147,650 40,905 2022 232,266 =147,650 40,905 2023 235,285 147,650 40,905 2024 = 238,344 147,650 40,905 2025 241,442 147,650 40,905 2026 244,581 147,650 40,905 2027 247,761 =—-147,650 40,905 2028 250,982 147,650 40,905 Net Present Value Real 1994 Levelized Cost $67.6 million 1997$ $55.6 million 1992$ $0.0 million per year EES Analysis for HDR Engineers Inc. Resource Cost Model Swan / Tyee Lakes Intertie Project, Mahoney Lake Hydro Project, Diesel 9 Intertie Energy Cost at Variable Purchase Power Rate Fixed Purchase Power Rate Esc Variable Purchase Power Rate Esc Mahoney Power Purchase - KPU Purchasing Power @ Four Dam Pool Fixed Wholesale Rate Four Dain Pool Variable Wholesale Rate Four Dain Pool Variable Wholesale Rate Esc. 2 Tyee Existing New State State (MWh) (MWh) (MWh) ($000) (000s) 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 oO 0 0 0 0 0 0 0 0 957 0 0 1,675 3,630 4,159 Cv) 0 1,675 3,630 7,356 0 0 1,675 3,630 10,362 0 0 1,675 3,630 12,948 0 0 1,675 3,630 15,567 0 0 1,675 3,630 18,221 0 0 1,675 3,630 20,909 0 0 1,675 3,630 23,632 0 0 1,675 3,630 26,390 0 0 1,675 3,630 29,185 0 0 1,675 3,630 32,015 0 0 1,675 3,630 34,883 0 0 1,675 3,630 37,787 0 0 1,675 3,630 40,730 0 0 1,675 3,630 43,711 0 0 0 3,630 46,730 0 0 0 3,630 49,789 0 0 0 3,630 52,887 0 0 0 3,630 56,026 0 0 0 3,630 59,206 0 0 0 0 59,614 0 2,813 0 0 9,518 24,169 369 937 Melded Rate 2.6 cents per kWh 1994$ 0.0% nominal per year 4.0% nominal per year Actual Cost 4.0 cents per kWh 1994$ 2.6 cents per kWh 1994$ 4.0% nominal per year ISER Load Growth Scenario - KPC Surplus Sales - KPC Surplus Energy Rate Maximum KPC Purchase Project energized date Fixed O&M cost New Diesel Capital Cost New Diesel Overhead Diesel fixed O&M cost Diesel variable O&M cost Diesel fuel in 1997 KPU diesel fuel consumption Medium or Base No 3.8 cents per kWh in $1994 0 MWhr's 1999 year $200,000 per year 1995$ $1,000 per kW in $1992 $75,000 per year 19925 $12.50 per kW in $1992 1 cents per kWh in $1992 $1 per gallon in $1997 14 kWh per gallon Appenaix p 2 0 0 0 Existing New Intertie Mahoney Mahoney Tyee Diesel Diesel Purchase = Diesel Purchase Purchase Market Grant NewDiesel Total —Intertie O&M O&M Power Fuel Power Power KPC Sales Total Total ($000s) —($000s) (5000s) ($000s) ($0008) ($0008) ——($000s) ($0008) ($0008) (cents/kWh) ($0008) ($0008) ($0008) (cents/kWh) 0 0 0 0 0 0 0 0 0 8.7 2,249 0 2,249 8.7 0 0 0 0 0 0 0 0 0 8.7 2,434 0 2,434 87 0 0 0 0 0 0 0 0 0 88 2,626 0 2,626 88 0 0 0 0 0 0 0 0 0 8.8 2,746 0 2,746 88 0 0 0 0 0 0 0 0 0 8.9 2,890 0 2,890 89 0 0 0 0 0 0 0 0 0 9.0 3,071 0 3,071 9.0 0 0 0 0 0 0 0 0 0 9.0 3,270 0 3,270 9.0 0 0 0 0 0 0 oO 0 0 OL 3,543 0 3,543 91 2,894 0 0 8,199 320 0 i) 719 0 9.2 3,763 O 12,362 29.5 2,894 0 0 8,199 333 0 0 348 0 9.2 3,763 O 12,644 28.1 2,894 0 0 8,199 346 0 0 623 0 93 3,804 0 12,973 26.9 2,894 0 0 8,199 360 0 0 888 0 94 3,845 0 13,293 25.9 2,894 0 0 8,199 375 0 0 1,126 0 9.5 3,886 0 13,586 25.2 2,894 0 0 8,199 390 0 0 1,375 0 9.6 3,927 O 13,891 24.6 2,894 0 0 8,199 405 0 0 1,636 0 97 3,968 0 14,208 24.0 2,894 0 0 8,199 421 0 0 1,910 0 98 4,009 0 14,540 23.5 2,894 0 0 8,199 438 0 0 2,198 0 99 4,050 O 14,885 23.1 2,894 0 0 8,199 456 0 0 2,501 0 10.0 4,091 0 15,247 22.7 2,894 0 0 8,199 474 0 0 2,821 0 10.1 4,131 0 15,626 22.3 2,894 0 0 8,199 493 0 0 3,158 0 10.2 4,172 0 16,023 22.0 2,894 0 0 8,199 513 0 0 3,514 0 10.3 4,213 0 16,440 21.7 2,894 0 0 8,199 533 0 0 3,891 0 10.4 4,254 0 16,878 214 2,894 0 0 8,199 S54 0 0 4,289 0 10.5 4,295 0 17,338 21.2 2,894 0 0 6,524 377 0 0 4,711 0 10.7 4,377 0 16,189 19.1 2,894 0 0 6,524 600 0 tt} 5,158 0 10.8 4418 0 16,700 19.1 2,894 0 0 6,524 624 0 0 5,632 0 10.9 4,459 0 17,239 19.0 2,894 0 0 6,524 649 0 0 6,135 0 MLL 4,540 O 17,848 19.0 2,894 0 0 6,524 675 0 0 6,669 0 11.2 4,581 O 18,449 19.0 2,894 0 0 2,894 702 0 0 7,235 0 14 4,663 0 15,494 15.5 2,894 0 1,672 4,566 730 0 386 7,508 912 ILS 4,704 0 18,805 18.2 20,170 0 253 54,110 3,150 0 58 17,351 138 123 45,378 0 120,186 219 782 0 10 2,098 122 0 2 673 5 48 1,759 0 4,659 8.5 12/09/94 Financing - Capital Cost Capital Cost $67.6 ion 1997$ $55.6 million 1992$ Intertie Energy Cost at Variable Purchase Power Rate Intertie Project Life 30 years Fixed Purchase Power Rate Esc Inflation 4.0% per year Variable Purchase Power Rate Esc Real Discount 2.40% per year State loan term 15 years State loan rate 3.0% per year Mahoney Power Purchase - State Bond tem 20 years State Bond Rate 6.5% per year KPU Purchasing Power @ Market bond term 30 years Four Dam Pool Fixed Wholesale Rate Market bond rate 8.0% per year State Grant $0.0 million per year Four Dam Pool Variable Wholesale Rate Esc. Switch 0 2 2 KPU Existing Energy Resource = Tyee Mahoney Existing New State State (MWh) (MWh) (MWh) (MWh) (MWh) (MWh) ($0008) ($0008) 1999 173,503 147,650 25,853 0 0 0 1,675 3,630 2000 175,631 147,650 27,981 0 0 0 1,675 3,630 2001 177,486 = 147,650 29,836 0 0 0 1,675 3,630 2002 178,850 147,650 31,200 0 0 0 1,675 3,630 2003 180,127 147,650 32,477 0 0 0 1,675 3,630 2004 181,768 147,650 34,118 0 0 0 1,675 3,630 2005 183,978 147,650 36,328 0 0 0 1,675 3,630 2006 186,583 147,650 38,933 i) 0 0 1,675 3,630 2007 189,512 147,650 41,862 0 0 0 1,675 3,630 2008 192,714 147,650 45,064 CV) 0 0 1,675 3,630 2009 195,911 147,650 48,261 i} 0 0 1,675 3,630 2010 198,917 147,650 51,267 0 0 0 1,675 3,630 2011 201,503 147,650 53,853 0 0 0 1,675 3,630 2012, 204,122 147,650 56,472 0 0 0 1,675 3,630 2013 = 206,776 = 147,650 59,126 0 0 0 1,675 3,630 2014 = 209,464 147,650 61,814 0 0 0 0 3,630 2015 212,187 147,650 64,537 0 0 0 0 3,630 2016 = 214,946 = 147,650 67,296 0 0 0 0 3,630 2017 =—-.217,740 147,650 70,090 0 0 0 0 3,630 2018 =220,571 + =—147,650 70,568 2,353 0 0 0 3,630 2019 223,438 = =147,650 69,546 6,242 0 0 0 0 2020 =. 226,343. 147,650 68,509 10,184 0 0 0 0 2021 229,285 147,650 67,455 14,180 0 0 0 0 2022 =. 232,266 ~=—-147,650 66,386 18,230 0 0 0 0 2023 235,285. 147,650 65,300 22,335 0 0 ct} 0 2024 = 238,344 147,650 64,197 26,497 0 0 0 0 2025 241,442 147,650 63,077 30,715 0 0 0 0 2026 = 244,581 147,650 61,940 34,991 0 0 0 0 2027 247,761 147,650 60,786 39,325 0 0 0 0 2028 =. 250,982 147,650 59,614 40,905 0 2,813 0 0 Net Present Value 15,753 40,000 Real 1994 Levelized Cost oll 1,551 Four Dain Pool Variable Wholesale Rate EES Analysis for HDR Engineers Inc. Resource Cost Model Swan / Tyee Lakes Intertie Project, Mahoney Lake Hydro Project, Diesel ki + °.°.,-+-«-«;-,:°« +«~~«Lt<..ca: °° °° °° "(oo igy Cost - ISER Load Growth Scenario - Melded Rate 2.6 cents per kWh 1994S 0.0% nominal per year 4.0% nominal per year Actual Cost 4.0 cents per kWh 1994$ 2.6 cents per kWh 1994$ 4.0% nominal per year 0 Market = Grant’ New Diesel ($0008) ($000s) (8000s) 679 679 679 679 679 679 679 679 679 679 679 679 679 6719 679 679 679 679 679 679 679 679 679 679 679 679 679 679 679 0 0 0 0 0 0 0 cv) 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 679 2 eceooeooceoo oe oeoceo oo oo eCOoC oOo oC ooo eo 1,67: 8,869 0 253 344 0 10 SPC S| Sales - KPC Surplus Energy Rate Maximum KPC Purchase Project energized date Fixed O&M cost New Diesel Capital Cost New Diesel Overhead Diesel fixed O&M cost Diesel variable O&M cost Diesel fuel in 1997 KPU diesel fuel consumption Mediuin or Base No 1999 year $200,000 per year 1995$ $1,000 per kW in $1992 $75,000 per year 1992$ $12.50 per kW in $1992 1 cents per kWh in $1992 $1 per gallon in $1997 14 kWh per gallon Appendix B 2 0 0 Existing New Intertie Mahoney Mahoney Tyee Diesel Diesel Purchase Diesel Purchase Purchase Total Intetie O&M O&M Power Fuel Power Power KPC Sales Total Total ($0008) ($0008) ($0008) ($0008) ($0008) ($0008) (cents/kWh) ($0008) ($0008) ($0008) (centskWh) 5,985 234 0 0 1,678 0 8.7 0 0 7,897 30.5 5,985 243 0 0 1,839 0 8.7 i} 0 8,067 28.8 5,985 253 0 0 1,989 0 88 0 0 8,226 276 5,985 263 0 0 2,114 0 88 0 0 8,362 26.8 5,985 274 0 0 2,238 0 8.9 0 0 8,496 26.2 5,985 285 0 0 2,391 0 9.0 0 0 8,660 25.4 5,985 296 0 0 2,586 0 9.0 0 0 8,867 24.4 5,985 308 0 0 2,815 0 91 0 0 9,107 23.4 5,985 320 0 0 3,074 0 9.2 0 0 9,379 22.4 5,985 333 0 0 3,362 0 9.2 0 0 9,680 21.5 5,985 346 oO 0 3,662 0 93 0 0 9,993 20.7 5,985 360 0 0 3,961 0 94 0 0 10,306 20.1 5,985 375 0 0 4,244 0 9.5 0 0 10,603 19.7 5,985 390 0 0 4,542 0 9.6 0 0 10,916 19.3 5,985 405 0 0 4,857 0 97 0 O 11,246 19.0 4,309 421 0 0 5,189 0 98 0 0 9,920 16.0 4,309 438 0 0 5,540 0 99 0 O 10,288 15.9 4,309 456 0 0 5,911 0 10.0 0 0 10,676 15.9 4,309 474 0 0 6,303 0 10.1 0 O 11,087 15.8 4,309 493 0 0 6,523 0 10.2 240 0 11,565 15.9 679 S13 0 0 6,623 0 10.3 643 0 8,458 11.2 679 533 0 0 6,723 0 10.4 1,059 0 8,995 4 679 S54 0 0 6,824 0 10.5 1,489 0 9,547 17 679 577 0 0 6,924 0 10.7 1,951 O 10,131 12.0 679 600 0 0 7,024 0 10.8 2,412 O 10,716 12.2 679 624 0 0 7,124 0 10.9 2,888 O 11,315 12.5 679 649 0 0 7,222 0 Md 3,409 0 11,959 12.8 679 675 0 0 7,319 0 11.2 3,919 0 12,592 13.0 679 702 0 0 7,415 0 14 4,483 O 13,278 13.3 2,351 730 0 386 7,508 912 ILS 4,704 0 16,590 16.1 64,874 4,770 0 58 49,765 138 123 5,074 0 124,679 283 2,515 185 0 2 1,929 5 48 197 0 4,834 11.0 12/09/94 EES Analysis for HDR Engineers Inc. Resource Cost Model Swan / Tyee Lakes Intertie Project, Mahoney Lake Hydro Project, Diesel Appesnssa B Financing - Capital Cost Capital Cost $55.6 million 1992$ Intertie Project Life 30 years Inflation 4.0% per year Real Discount 2.40% per year State loan tenn 1S years State loan rate 3.0% per year State Bond term 20 years State Bond Rate 6.5% per year Market bond tenn 30 years Market bond rate 8.0% per year $67.6 million 1997$ Intertic Energy Cost - Intertie Energy Cost at Variable Purchase Power Rate Fixed Purchase Power Rate Esc Variable Purchase Power Rate Esc Mahoney Power Purchase - KPU Purchasing Power @ Four Dain Pool Fixed Wholesale Rate Four Dam Pool Variable Wholesale Rate Four Dam Pool Variable Wholesale Rate Esc. State ($0008) 2 State ($000s) State Grant $0.0 million per year Switch 0 3 KPU Existing Energy Resource Mahoney Existing Tyee New (MWh) (MWh) (MWh) (MWh) (MWh) (MWh) 1999 173,503 147,650 25,853 0 0 oO 2000 175,631 147,650 27,981 0 0 0 2001 177,486 = 147,650 29,836 0 0 0 2002 178,850 147,650 31,200 0 0 0 2003 180,127 147,650 32,477 0 0 0 2004 181,768 147,650 34,118 0 i} 0 2005 183,978 147,650 36,328 0 0 0 2006 186,583 147,650 38,933 0 0 0 2007 189,512 147,650 40,905 0 0 957 2008 192,714 147,650 40,905 0 0 4,159 2009 195,911 147,650 40,905 0 0 7,356 2010 198,917 147,650 40,905 0 0 10,362 2011 201,503 147,650 40,905 0 0 12,948 2012. 204,122, 147,650 40,905 0 0 15,567 2013 206,776 ~=—:147,650 40,905 0 0 18,221 2014 = 209,464 147,650 40,905 0 0 20,909 2015 212,187 147,650 40,905 0 0 23,632 2016 = 214,946 147,650 40,905 0 0 26,390 2017 217,740 147,650 40,905 0 0 29,185 2018 220,571 147,650 40,905 0 0 32,015 2019 223,438 ~=—:147,650 40,905 0 0 34,883 2020 226,343 147,650 40,905 0 0 37,787 2021 229,285 147,650 40,905 0 0 40,730 2022 =. 232,266 »=—:147,650 40,905 0 0 43,711 2023 235,285 147,650 40,905 0 0 46,730 2024 238,344 147,650 40,905 0 0 49,789 2025 241,442, 147,650 40,905 0 0 52,887 2026 =. 244,581 147,650 40,905 0 0 56,026 2027 =. 247,761 147,650 40,905 0 0 59,206 2028 =. 250,982 147,650 40,905 0 0 62,426 Net Present Value Real 1994 Levelized Cost °o ecocooceoosc ooo Oooo OO COCO CCC oCOSCC OOS eocoocoeoeoeo eo oc ooo CoO oC oO CoC OOO CCC C Oo Melded Rate 2.6 cents per kWh 1994$ 0.0% nominal per year 4.0% nominal per year Actual Cost 4.0 cents per kWh 1994$ 2.6 cents per kWh 1994$ ISER Load Growth Scenario - KPC Surplus Sales - KPC Surplus Energy Rate Maximum KPC Purchase Project energized date Fixed O&M cost New Diesel Capital Cost New Diesel Overhead Diesel fixed O&M cost Diesel variable O&M cost Diesel fuel in 1997 Medium or Base No 3.8 cents per kWh in $1994 0 MWhr's 1999 year $200,000 per year 1995$ $1,000 per kW in $1992 $75,000 per year 1992$ $12.50 per kW in $1992 1 cents per kWh in $1992 $1 per gallon in $1997 4.0% noi I per year KPU diesel fuel consumption 14 kWh per gallon 2 0 0 0 Existing New _ Intertie Mahoney Mahoney Tyee Diesel Diesel Purchase Diesel Purchase Purchase Market Grant New Diesel Total Intertie O&M O&M Power Fuel Power Power KPC Sales Total Total ($0008) ($000s) ($0008) ($000s) ($000s) ($0008) ($0008) ($000s) ($0008) (centkWh) ($0008) ($0008) ($0008) (cents/kWh) 0 0 0 0 0 0 0 0 0 8.7 2,249 0 2,249 8.7 0 0 0 0 0 0 0 0 0O 87 2,434 0 2,434 8.7 0 0 0 0 0 0 0 0 0 88 2,626 0 2,626 88 0 0 0 0 0 0 0 0 0 88 2,746 0 2,746 88 0 0 0 i) 0 0 0 0 0 89 2,890 0 2,890 8.9 0 0 0 0 0 0 0 0 0 9.0 3,071 0 3,071 9.0 0 0 0 0 0 0 0 0 0 9.0 3,270 0 3,270 9.0 0 0 0 0 0 0 0 0 0 91 3,543 0 3,543 o1 0 0 D4 734 0 0 195 0 1 9.2 3,763 0 4,803 ILS 0 0 4 734 0 0 232 0 508 9.2 3,763 0 5,237 11.6 0 0 734 734 0 0 270 0 O44 93 3,804 0 5,751 11.9 0 oO 4 734 0 0 306 0 1,396 9.4 3,845 0 6,280 12.2 0 0 734 734 0 0 337 0 1,831 9.5 3,886 0 6,788 12.6 0 0 74 734 0 0 370 0 2,312 9.6 3,927 0 7,342 13.0 0 0 T3400 734 0 0 403 0 2,841 97 3,968 0 7,946 13.4 0 0 734 734 0 0 437 0 3,423 98 4,009 0 8,602 13.9 0 0 734734 0 0 471 0 4,062 9.9 4,050 0 9,317 14.4 0 0 1,778 1,778 0 0 556 0 4,763 10.0 4,091 O 11,188 16.6 0 0 1,778 1,778 0 0 592 0 5,531 10.1 4,131 0 12,032 17.2 0 0 1,778 1,778 0 0 628 0 6,371 10.2 4,172 0 12,949 17.8 0 0 1,778 1,778 0 0 665 0 7,289 10.3 4,213 0 13,945 18.4 0 0 1,778 1,778 0 0 703 0 8,290 10.4 4,254 0 15,025 19.1 0 0 1,778 1,778 0 0 TAL 0 9,383 10.5 4,295 O 16,197 19.8 0 0 1,778 1,778 0 0 780 0 10,573 10.7 4,377 0 17,508 20.7 i} 0 1,778 1,778 0 0 820 0 11,868 10.8 4418 O 18,884 21.5 0 0 3,207 3,207 0 0 ol 0 13,277 10.9 4,459 0 21,854 24.1 0 0 3,207 3,207 0 0 953 0 14,809 ML 4,540 0 23,509 25.1 0 0 3,207 3,207 0 0 995 0 16,472 11.2 4,581 0 25,256 26.1 0 i} 2474 2,474 0 0 1,038 0 18,277 114 4,663 0 26,452 26.4 0 0 2,474 2,474 0 0 1,082 0 20,235 11.5 4,704 0 28,495 27.6 0 0 9,194 9,194 0 0 3,550 0 37,112 123 45,378 0 95,234 166 0 0 356 356 0 0 138 0 1,439 48 1,759 0 3,692 64 12/09/94 ppewuix B EES Analysis for HDR Engineers Inc. Resource Cost Model Swan / Tyee Lakes Intertie Project, Mahoney Lake Hydro Project, Diesel ISER Load Growth Scenario - Medium or Base Capital Cost $67.6 million 1997$ Intertie Energy Cost at Melded Rate KPC Surplus Sales - No Capital Cost $55.6 million 1992$ Variable Purchase Power Rate 2.6 cents per kWh 1994$ Intertie Project Life 30 years Fixed Purchase Power Rate Esc 0.0% nominal per year KPC Surplus Energy Rate 3.8 cents per kWh in $1994 Inflation 4.0% per year Variable Purchase Power Rate Esc 4.0% nominal per year Maximum KPC Purchase 0 MWhr's Real Discount 2.40% per year Project energized date 1999 year State loan term 15 years Fixed O&M cost $200,000 per year 1995$ State loan rate 3.0% per year Mahoney Power Purchase - New Diesel Capital Cost $1,000 per kW in $1992 State Bond term 20 years New Diesel Overhead $75,000 per year 19925 State Bond Rate 6.5% per year KPU Purchasing Power @ Actual Cost Diesel fixed O&M cost $12.50 per kW in $1992 Market bond tenn 30 years Four Dam Pool Fixed Wholesale Rate 4.0 cents per kWh 1994$ Diesel variable O&M cost 1 cents per kWh in $1992 Market bond rate 8.0% per year Four Dam Pool Variable Wholesale Rate 2.6 cents per kWh 1994$ Diesel fuel in 1997 $1 per gallon in $1997 State Grant $0.0 million per year Four Dam Pool Variable Wholesale Rate Esc. 4.0% nominal per year KPU diesel fuel consumption 14 kWh per gallon 2 0 0 Switch 0 4 2 0 Existing = New Intertic Mahoney Mahoney KPU Existing Tyee Diesel Diesel Purchase Diesel Purchase Purchase Energy Resource Tyee Existing Mahoney New State State Market Grant NewDiesel Total Intertie O&M O&M Power Fuel Power Power KPC Sales Total Total (MWh) (MWh) (MWh) (MWh) (MWh) (MWh) ($000s) (5000s) ($0008) ($000s) ($0008) (5000s) ($0008) (5000s) ($000s) ($0005) (5000s) (centWkWh) ($0005) ($0008) ($0008) = (centa/kWh) 1999 173,503 147,650 25,853 0 0 0 1,675 3,630 679 0 0 5,985 234 0 0 1,678 0 87 0 0 7,897 30.5 2000 175,631 147,650 27,981 0 0 0 1,675 3,630 679 0 0 5,985 243 0 0 1,839 0 87 0 0 8,067 28.8 2001 177,486 147,650 29,836 0 0 0 1,675 3,630 679 0 0 5,985 253 0 0 1,989 0 88 0 0 8,226 27.6 2002 178,850 147,650 31,200 0 0 0 1,675 3,630 679 0 0 5,985 263 0 0 2114 0 88 0 0 8362 268 2003 180,127 147,650 32,477 0 0 0 1,675 3,630 679 0 0 5,985 274 0 0 2,238 0 8.9 0 0 8496 = 26.2 2004 181,768 147,650 34,118 0 0 0 1,675 3,630 679 0 0 5,985 285 0 0 2,391 0 9.0 0 0 8660 254 2005 183,978 147,650 36,328 0 0 0 1,675 3,630 679 0 0 5,985 296 0 0 2,586 0 9.0 0 0 8867 244 2006 186,583 147,650 38,933 0 0 oO 1,675 3,630 679 0 0 5,985 308 0 0 2,815 0 o1 0 0 9,107 23.4 2007 189,512 147,650 41,862 0 0 0 1,675 3,630 619 0 0 5,985 320 0 0 3,074 0 9.2 0 0 9,379 © 224 2008 192,714 147,650 45,064 0 0 0 1,675 3,630 679 0 0 5,985 333 0 0 3,362 0 92 0 0 9680 21.5 2009 195,911 147,650 48,261 0 0 0 1,675 3,630 679 0 0 5,985 346 0 0 3,662 0 93 0 0 9,993 20.7 2010 198,917 147,650 51,267 0 0 0 1,675 3,630 679 0 0 5,985 360 0 0 3,961 i} 94 0 0 10,306 20.1 2011 201,503 147,650 53,853 0 0 0 1,675 3,630 679 0 0 5,985 375 0 0 4,244 0 9.5 0 0 10,603 19.7 2012 204,122 147,650 56,472 0 0 0 1,675 3,630 679 0 0 5,985 390 0 0 4,542 0 9.6 0 0 10,916 = 19.3 2013 206,776 147,650 59,126 0 0 cv} 1,675 3,630 679 0 0 5,985 405 0 0 4,857 0 97 0 O 11,246 19.0 2014 209 464 147,650 61,814 0 0 0 0 3,630 679 0 0 4,309 421 0 0 5,189 0 98 0 0 9,920 16.0 2015 212,187 147,650 64,537 0 0 0 0 3,630 679 CV) 0 4,309 438 0 0 5,540 0 99 0 0 10,288 15.9 2016 214,946 147,650 67,296 0 0 0 0 3,630 679 0 0 4,309 © 456 0 0 5,911 0 10.0 0 0 10,676 159 2017 217,740 147,650 70,090 0 0 0 0 3,630 679 0 0 4,309 44 0 0 6,303 i} 10.1 0 O 11,087 15.8 2018 220,571 147,650 70,568 0 0 2,353 0 3,630 679 0 1,130 5,439 493 0 281 6,523 468 10.2 0 0 13,204 18.1 2019 223,438 147,650 69,546 0 0 6,242 0 0 679 0 1,130 1,809 513 0 329 6,623 1,304 10.3 0 0 10,577 14.0 2020 226,343 147,650 68,509 0 0 10,184 0 0 679 0 1,130 1,809 533) 0 377 6,723 2,234 10.4 ) O 11,676 148 2021 229,285 147,650 67,455 0 0 14,180 0 0 679 0 1,130 1,809 554 0 426 6,824 3,266 10.5 0 0 12,879 15.8 2022 232,266 147,650 66,386 0 0 18,230 0 0 679 0 1,130 1,809 577 0 476 6,924 4,409 10.7 0 0 14,195 16.8 2023 235,285 147,650 65,300 0 0 22,335 0 0 679 0 1,130 1,809 600 0 526 7,024 5,673 108 0 0 15,632 178 2024 238,344 147,650 64,197 0 0 26,497 0 0 679 0 2,959 3,238 624 0 628 7,124 7,066 10.9 0 0 18,680 206 2025 241,442--147,650 63,077 0 0 30,715 0 0 679 0 2,559 3,238 649 0 681 7,222 8,600 Wl 0 0 20,390 © 21.7 2026 244,581 147,650 61,940 0 0 34,991 0 0 679 0 2,559 3,238 675 0 734 7,319 10,288 12 0 0 22,254 23.0 2027 247,761 147,650 60,786 0 0 39,325 0 0 679 0 2,559 3,238 702 0 789 7415 12,140 14 0 0 24,283 24.3 2028 250,982 147,650 59,614 0 0 43,718 0 0 679 0 2,559 3,238 730 0 845 7,508 14,171 ILS 0 0 26491 25.6 Net Present Value 15,753 40,000 8,869 0 3,855 68,477 4,770 0 1,203 49,765 12,761 123 0 0 = 136,975 297 Real 1994 Levelized Cost oil 1551-344 0 149 2,655 185 0 47 1929 4954.8 0 0 5310 ILS 12/09/94 EES Analysis for HDR Engineers Inc. Resource Cost Model Swan / Tyee Lakes Intertie Project, Mahoney Lake Hydro Project, Diesel Appendix B Financing - Capital Cost $67.6 million 1997$ Capital Cost $55.6 million 1992$ Intertie Project Life 30 years Inflation 4.0% per year Real Discount 2.40% per year State loan term 1S years State loan rate 3.0% per year State Bond term 20 years State Bond Rate 6.5% per year Market bond term 30 years Market bond rate 8.0% per year State Grant $0.0 million per year Switch 0 5 KPU Existing Energy Resource Existing Mahoney Intertic Energy Cost - Intertie Energy Cost at Variable Purchase Power Rate Fixed Purchase Power Rate Esc Variable Purchase Power Rate Esc Mahoney Power Purchase - KPU Purchasing Power @ Four Dain Pool Fixed Wholesale Rate Four Dam Pool Variable Wholesale Rate Four Dam Pool Variable Wholesale Rate Esc. 2 Tyee New State State (MWh) (MWh) (MWh) 1999 173,503 -:147,650 2000 =—-175,631 147,650 2001 =—:177,486 147,650 2002 178,850 147,650 2003 180,127. 147,650 2004 = 181,768 147,650 2005 183,978 147,650 2006 186,583 147,650 2007 —-189,512 147,650 2008 = 192,714 147,650 2009 =—-195,911 147,650 2010 = =198,917 147,650 2011 = 201,503 147,650 2012 204,122, 147,650 2013 = 206,776 =—-147,650 2014 = 209,464 = 147,650 2015 212,187 147,650 2016 = 214,946 147,650 2017 = 217,740 147,650 2018 = 220,571 = 147,650 2019 223,438 ~=—-147,650 2020 = 226,343. 147,650 2021 = 229,285 147,650 2022 = 232,266 =—-:147,650 2023 235,285 147,650 2024 =. 238,344 147,650 2025 = 241,442 —-147,650 2026 «=. 244,581 147,650 2027. 247,761 = 147,650 2028 = 250,982 147,650 ecococeoocooeocoecocoecoooeooecooococs Net Present Value Real 1994 Levelized Cost (MWh) eooeooeoeo oo eo Ooo COCO CoO OoO OC OCoOCoOSe (MWh) (MWh) ($000s) ($0005) 25,853 27,981 29,836 31,200 32,477 34,118 36,328 38,933 41,862 45,064 48,261 51,267 53,853 56,472 59,126 61,814 64,537 67,296 70,090 72,921 75,788 78,693 81,635 84,616 87,635 90,694 93,792 96,931 100,111 103,332 ecoococeoocoocoosceoeooooooeecoococo[e eccoocoooeooeo oo ooo eoeC ooo eCeCOoOoCOoCoCS ecoocoooceoccoceooeoeo coco oo eo oCceece Melded Rate 2.6 cents per kWh 1994$ 0.0% nominal per year 4.0% nominal per year Actual Cost 4.0 cents per kWh 1994$ 2.6 cents per kWh 1994S 4.0% nominal per year 0 Market Grant New Diesel (5000s) ($0008) (000s) 536 1,094 1,094 1,094 1,094 1,094 1,094 1,094 1,094 1,094 1,094 1,919 1,919 1,919 1,919 1,919 1,919 1,919 1,919 1,919 2,558 2,000 2,000 2,000 2,000 2,000 2,000 2,000 3,608 3,608 ecoooececoeocoeoocoeooeoeCooooOoocCOoeCeocCS eooocoocoocecoocoeoeococoocecooeoeocoos 0 0 19,006 0 0 237 ISER Load Growth Scenario = KPC Surplus Sales - KPC Surplus Energy Rate Maximum KPC Purchase Project energized date Fixed O&M cost New Diesel Capital Cost New Diesel Overhead Diesel fixed O&M cost Diesel variable O&M cost Diesel fuel in 1997 KPU diesel fuel consumption Medium or Base No 3.8 cents per kWh in $1994 0 MWiu's 1999 year $200,000 per year 1995$ $1,000 per kW in $1992 $75,000 per year 1992$ $12.50 per kW in $1992 1 cents per kWh in $1992 $1 per gallon in $1997 14 kWh per gallon 2 0 0 Existing New Intertie Mahoney Mahoney Tyee Diesel Diesel Purchase Diesel Purchase Purchase Total = Intertie O&M O&M Power Fuel Power = Power KPC Sales Total Total Capital O&M Cost Cost Cost Cost Cost Cost TotalCost Offset Cost Cost ($0008) ($0008) ($0008) ($0008) ($0008) ($0008) (cenukWh) — ($000s) (5000s) (centwkWh) 536 0 0 407 0 2,036 8.7 0 0 2,979 WS 1,094 0 0 482 0 2,314 87 0 0 3,890 13.9 1,094 0 0 505 0 2,590 88 0 0 4,189 14.0 1,094 0 0 523 0 2,844 88 0 0 4,461 14.3 1,094 0 0 340 0 3,109 89 0 0 4,743 14.6 1,094 0 0 561 0 3,429 9.0 0 0 5,084 49 1,094 0 0 588 0 3,834 9.0 0 0 5,516 15.2 1,094 0 0 619 0 4,314 94 0 0 6,027 15.5 1,094 0 0 654 0 4,871 9.2 0 0 6,618 15.8 1,094 0 0 691 0 5,505 9.2 0 0 7,290 16.2 1,094 0 0 729 0 6,191 93 0 O 8,013 16.6 1,919 0 0 815 0 6,905 94 0 0 9,639 18.8 1,919 0 0 847 0 7,616 95 0 O 10,382 19.3 1,919 0 0 879 0 8,386 9.6 0 O 11,184 19.8 1,919 0 0 912 0 9,219 97 0 0 12,050 20.4 1,919 0 0 946 0 10,120 98 0 0 12,985 21.0 1,919 0 0 980 0 11,094 99 0 O 13,993 217 1,919 0 0 1,015 0 12,147 10.0 0 O 15,081 22.4 1,919 0 0 1,051 0 13,284 10.1 0 0 16,253 23.2 1,919 0 0 1,087 0 14,511 10.2 0 0 17,517 24.0 2,558 0 0 1,174 0 15,836 10.3 0 0 19,567 25.8 2,000 0 0 1,212 0 17,265 104 0 0 20,477 26.0 2,000 0 0 1,250 0 18,806 10.5 0 0 22,056 27.0 2,000 0 0 1,289 0 20,467 10.7 0 O 23,757 28.1 2,000 0 0 1,329 0 22,257 10.8 0 0 25,587 29.2 2,000 0 0 1,370 0 24,186 10.9 0 0 27,556 30.4 2,000 0 0 1,412 0 26,263 1a 0 0 29,674 31.6 2,000 0 0 1,454 0 28,499 11.2 0 0 31,953 33.0 3,608 0 0 1,547 0 30,905 14 0 0 36,060 36.0 3,608 0 0 1,591 0 33,494 1S 0 0 38,693 37.4 19,006 0 0 10,109 0 106,503 123 0 0 135,619 242 737 0 0 392 0 4,129 48 oO 5,258 94 12/09/94 Case Two—intertie Energy at No Cost EES Analysis for HDR Engineers Inc. Resource Cost Model Swan / Tyee Lakes Intertie Project, Mahoney Lake Hydro Project, Diesel ISER Load Growth Scenario - Medium or Base Capital Cost $67.6 million 1997$ Intertie Energy Cost at No Cost KPC Surplus Sales - No Capital Cost $55.6 million 1992$ Variable Purchase Power Rate 0 cents per kWh 1994$ Intertie Project Life 30 years Fixed Purchase Power Rate Esc 0.0% nominal per year KPC Surplus Energy Rate 3.8 cents per kWh in $1994 Inflation 4.0% per year Variable Purchase Power Rate Esc 4.0% nominal per year Maximum KPC Purchase 0 MWhr's Real Discount 2.40% per year Project energized date 1999 year State loan tenn 15 years Fixed O&M cost $200,000 per year 1995$ State loan rate 3.0% per year Mahoney Power Purchase - New Diesel Capital Cost $1,000 per kW in $1992 State Bond term 20 years New Diesel Overhead $75,000 per year 1992$ State Bond Rate 6.5% per year KPU Purchasing Power @ Actual Cost Diesel fixed O&M cost $12.50 per kW in $1992 Market bond tenn 30 years Four Dam Pool Fixed Wholesale Rate 4.0 cents per kWh 1994$ Diesel variable O&M cost 1 cents per kWh in $1992 Market bond rate State Grant 8.0% per year $0.0 million per year Four Dam Pool Variable Wholesale Rate Four Dam Pool Variable Wholesale Rate Esc. 2.6 cents per kWh 1994$ 4.0% nominal per year Diesel fuel in 1997 KPU diesel fuel consumption $1 per gallon in $1997 14 kWh per gallon Appendix B 0 0 0 Switch 0 2 0 Existing New Intertie Mahoney Mahoney KPU Existing Tyee Diesel Diesel Purchase Diesel Purchase Purchase Energy Resource Mahoney — Tyee Existing New State State Market = Grant’ NewDiesel Total Intenie O&M O&M Power Fuel Power = Power KPC Sales Total Total (MWh) (MWh) = (MWh) (MWh) (MWh) (MWh) ($0008) ($0008) ($0008) ($000) ($000s) ($0008) ($0008) ($0008) ($0008) ($0008) ($0008) (centa/kWh) ($000) ($000s) ($0008) (cents/kWh) 1999 173,503 147,650 25,853 0 0 0 0 0 0 0 0 tt} 0 0 0 0 0 8.7 2,249 0 2,249 8.7 2000 175,631 147,650 27,981 0 0 0 0 0 0 0 0 0 0 0 0 0 0 8.7 2,434 0 2,434 87 2001 177,486 147,650 29,836 0 0 0 0 0 0 0 0 0 0 0 0 0 0 88 2,626 0 2,626 8.8 2002 178,850 147,650 31,200 0 0 0 0 0 0 0 0 0 0 0 0 0 0 88 2,746 0 2,746 88 2003 180,127 147,650 32,477 0 0 0 0 0 0 0 0 0 0 0 0 0 0 8.9 2,890 0 2,890 8.9 2004 181,768 147,650 34,118 0 0 0 0 0 0 0 0 0 0 0 0 0 0 9.0 3,071 0 3,071 9.0 2005 183,978 147,650 36,328 0 0 0 0 0 0 0 0 0 0 0 0 0 0 9.0 3,270 0 3,270 9.0 2006 186,583 147,650 38,933 0 0 0 0 0 0 0 0 0 0 0 0 0 0 9.1 3,543 0 3,543 91 2007 189,512 147,650 40,905 957 0 0 1,675 3,630 2,894 0 0 8,199 320 0 0 0 0 9.2 3,163 O 12,283 29.3 2008 192,714 147,650 40,905 4,159 0 0 1,675 3,630 2,894 0 0 8,199 333 0 i} 0 0 9.2 3,763 0 12,296 27.3 2009 195,911 147,650 40,905 7,356 0 0 1,675 3,630 2,894 0 0 8,199 346 0 0 0 0 9.3 3,804 0 12,350 25.6 2010 198,917 147,650 40,905 10,362 oO 0 1,675 3,630 2,894 0 0 8,199 360 0 0 0 0 94 3,845 0 12,405 24.2 2011 201,503 147,650 40,905 12,948 0 0 1,675 3,630 2,894 0 0 8,199 375 0 0 0 0 9.5 3,886 0 12,460 23.1 2012 204,122, 147,650 40,905 15,567 0 0 1,675 3,630 2,894 0 0 8,199 390 0 0 0 0 9.6 3,927 0 12,516 22.2 2013 206,776 147,650 40,905 18,221 0 0 1,675 3,630 2,894 0 0 8,199 405 0 0 0 0 9.7 3,968 O 12,572 21.3 2014 209,464 147,650 40,905 20,909 0 0 1,675 3,630 2,894 0 0 8,199 421 0 0 0 0 98 4,009 0 12,629 20.4 2015 212,187 147,650 40,905 23,632 0 0 1,675 3,630 2,894 0 0 8,199 438 0 0 i} 0 99 4,050 0 12,687 19.7 2016 = 214,946 = 147,650 40,905 26,390 0 0 1,675 3,630 2,894 0 0 8,199 456 0 0 0 0 10.0 4,091 0 12,746 18.9 2017 217,740 147,650 = 40,905 29,185 0 0 1,675 3,630 2,894 0 0 8,199 474 0 0 0 0 10.1 4,131 0 12,805 18.3 2018 = 220,571 +~=—:147,650 40,905 32,015 0 0 1,675 3,630 2,894 0 0 8,199 493 0 0 0 0 10.2 4,172 O 12,865 17.6 2019 = 223,438 ~=— 147,650 40,905 34,883 0 0 1,675 3,630 2,894 0 0 8,199 513 0 0 0 0 10.3 4,213 O 12,925 17.1 2020 =. 226,343, --147,650 40,905 37,787 0 0 1,675 3,630 2,894 0 0 8,199 533 0 0 0 0 10.4 4,254 0 12,987 16.5 2021 229,285 147,650 40,905 40,730 0 0 1,675 3,630 2,894 0 0 8,199 554 0 0 0 0 10.5 4,295 0 13,049 16.0 2022 = 232,266 »=—-147,650 40,905 43,711 0 0 0 3,630 2,894 0 0 6,524 577 0 0 0 0 10.7 4,377 O 11,478 13.6 2023 = 235,285 147,650 40,905 46,730 0 0 0 3,630 2,894 0 O 6,524 600 0 0 0 0 10.8 4,418 O 11,542 13.2 2024 238,344 = 147,650 40,905 49,789 0 0 0 3,630 2,894 0 0 6,524 624 0 0 0 0 10.9 4,459 0 11,606 12.8 2025 241,442 147,650 40,905 52,887 0 0 0 3,630 2,894 0 0 6,524 O49 0 0 0 0 Md 4,540 O 11,713 12.5 2026 244,581 147,650 40,905 56,026 tt} 0 0 3,630 2,894 0 0 6,524 675 0 0 tt} 0 11.2 4,581 O 11,780 12.2 2027 247,761 147,650 40,905 59,206 0 0 0 0 2,894 0 0 2,894 702 0 0 0 0 114 4,663 0 8,259 8.2 2028 250,982 147,650 40,905 59,614 0 2,813 0 0 2,894 0 1,672 4,566 730 0 386 0 912 11.5 4,704 O 11,297 10.9 Net Present Value 9,518 24,169 20,170 0 253 54,110 3,150 0 58 0 138 123 45,378 0 102,835 196 Real 1994 Levelized Cost 369 937 782 0 10 2,098 122 0 2 0 5 48 1,759 0 3,987 716 12/09/94 Capital Cost Capital Cost Intertie Project Life Inflation Real Discount State loan tenn State loan rate State Bond term State Bond Rate Market bond term Market bond rate State Grant Switch KPU Energy Year Need (MWh) 1999 173,503 2000 175,631 2001 177,486 2002 ~=—-178,850 2003 180,127 2004 181,768 2005 183,978 2006 186,583 2007 189,512 2008 192,714 2009 195,911 2010 198,917 2011 201,503 2012 204,122 2013 206,776 2014 209,464 2015 212,187 2016 = 214,946 2017 217,740 2018 = 220,571 2019 =. 223,438 2020 = 226,343 2021 229,285 2022 232,266 2023 235,285 2024 238,344 2025 241,442 2026 244,581 2027: 247,761 2028 =. 250,982 Net Present Value $67.6 million 1997$ $55.6 million 1992$ 30 years Fixed Purchase Power Rate Esc 4.0% per year Variable Purchase Power Rate Esc 2.40% per year 15 years 3.0% per year Mahoney Power Purchase - 20 years 6.5% per year KPU Purchasing Power @ 30 years Four Dam Pool Fixed Wholesale Rate 8.0% per year Four Dam Pool Variable Wholesale Rate $0.0 million per year Four Dam Pool Variable Wholesale Rate Esc. 0 4 2 Existing Resource Tyee Existing Mahoney New State State (MWh) (MWh) (MWh) (MWh) (MWh) ($0008) —($000s) 147,650 25,853 0 0 0 1,675 3,630 147,650 27,981 0 0 0 1,675 3,630 147,650 29,836 0 0 0 1,675 3,630 147,650 31,200 0 0 i) 1,675 3,630 147,650 32,477 0 0 0 1,675 3,630 147,650 34,118 0 0 0 1,675 3,630 147,650 36,328 0 0 0 1,675 3,630 147,650 38,933 0 0 0 1,675 3,630 147,650 41,862 0 0 0 1,675 3,630 147,650 45,064 0 0 0 1,675 3,630 147,650 48,261 0 0 0 1,675 3,630 147,650 51,267 0 0 0 1,675 3,630 147,650 53,853 0 0 0 1,675 3,630 147,650 56,472 0 0 0 1,675 3,630 147,650 59,126 0 0 0 1,675 3,630 147,650 61,814 0 0 0 0 3,630 147,650 64,537 0 0 0 0 3,630 147,650 67,296 0 0 0 0 3,630 147,650 70,090 0 0 0 0 3,630 147,650 70,568 0 0 2,353 0 3,630 147,650 69,546 0 0 6,242 0 0 147,650 68,509 0 0 10,184 0 0 147,650 67,455 0 0 14,180 0 0 147,650 66,386 0 0 18,230 0 0 147,650 65,300 0 0 22,335 0 0 147,650 64,197 0 0 26,497 0 0 147,650 63,077 0 0 30,715 0 0 147,650 61,940 0 0 34,991 0 0 147,650 60,786 0 0 39,325 0 0 147,650 59,614 0 0 43,718 0 0 15,753 40,000 6ll 1,551 Real 1994 Levelized Cost Intertic Energy Cost - Intertie Energy Cost at Variable Purchase Power Rate EES Analysis for HDR Engineers Inc. Resource Cost Model Swan / Tyee Lakes Intertie Project, Mahoney Lake Hydro Project, Diesel No Cost 0 cents per kWh 1994$ 0.0% nominal per year 4.0% nominal per year Actual Cost 4.0 cents per kWh 1994$ 2.6 cents per kWh 1994$ 4.0% nominal per year 0 Market Grant Bond Offset Capital ($0008) ($000s) ($000s) 679 679 679 679 679 679 679 679 679 679 679 679 679 679 679 679 679 679 679 679 679 679 679 679 679 679 679 679 679 679 1,13 1,13 1,13 1,13 1,13 1,13 2,55 2,55 2,55 ie 2 8,869 0 344 0 3,855 149 New Diesel cooocooeoeoeo oc eoCcoecSe 0 0 0 0 0 0 10 2,559 2,559 9 9 9 ISER Load Growth Scenario - KPC Surplus Sales - KPC Surplus Energy Rate Maximum KPC Purchase Project energized date Fixed O&M cost New Diesel Capital Cost New Diesel Overhead Diesel fixed O&M cost Diesel variable O&M cost Diesel fuel in 1997 KPU diesel fuel consumption Medium or Base No 3.8 cents per kWh in $1994 0 MWhr's 1999 year $200,000 per year 1995$ $1,000 per kW in $1992 $75,000 per year 1992$ $12.50 per kW in $1992 1 cents per kWh in $1992 $1 per gallon in $1997 14 kWh per gallon Appenaix B 0 0 0 Existing New Intertie Mahoney Mahoney Tyee Diesel Diesel Purchase Diesel Purchase Purchase Total Intenie O&M O&M Power Fuel Power Power KPC Sales Total Total ($000s) ($0008) ($0008) $000s) (5000s) ($000s) (cents/kWh) (5000s) ($0008) ($0008) © (centwkWh) 5,985 234 0 0 0 0 87 0 0 6,219 24.1 5,985 243 0 0 0 0 8.7 0 0 6,228 22.3 5,985 253 0 0 0 0 88 0 0 6,238 20.9 5,985 263 0 0 0 0 88 0 0 6,248 20.0 5,985 274 0 0 0 0 8.9 0 0 6,258 19.3 5,985 285 0 0 0 0 9.0 0 0 6,269 18.4 5,985 296 0 0 0 0 9.0 0 0 6,281 17.3 5,985 308 0 0 0 0 9.1 0 0 6,293 16.2 5,985 320 0 0 0 0 9.2 0 0 6,305 15.1 5,985 333 0 0 0 0 9.2 0 0 6,318 14.0 5,985 346 0 0 0 0 9.3 0 0 6,331 13.1 5,985 360 0 0 0 0 9.4 0 0 6,345 124 5,985 375 0 0 0 0 9.5 0 0 6,359 118 5,985 390 0 0 0 0 9.6 0 0 6,374 113 5,985 405 0 0 0 0 97 0 0 6,390 10.8 4,309 421 0 0 0 0 98 0 0 4,731 77 4,309 438 0 0 0 0 9.9 oO 0 4,748 14 4,309 456 0 0 0 0 10.0 0 0 4,765 TA 4,309 474 0 0 0 0 10.1 0 0 4,783 6.8 5,439 493 0 281 0 468 10.2 0 0 6,682 9.2 1,809 513 0 329 0 1,304 10.3 0 0 3,954 5.2 1,809 533 0 377 0 2,234 10.4 0 0 4,953 6.3 1,809 S54 0 426 Oo 3,266 10.5 0 0 6,055 74 1,809 577 0 476 0 4,409 10.7 0 0 7,270 8.6 1,809 600 0 526 0 5,673 10.8 0 0 8,607 9.8 3,238 624 0 628 0 7,066 10.9 0 0 11,556 12.7 3,238 O49 0 681 0 8,600 1d 0 0 13,168 14.0 3,238 675 i} 734 0 10,288 1.2 0 0 14,935 154 3,238 702 0 789 0 12,140 114 0 0 16,869 16.9 3,238 730 0 845 0 14,171 ILS 0 0 18,983 18.4 68,477 4,770 0 1,203 0 12,761 123 0 0 87,210 199 2,655 185 0 47 0 495 48 0 0 3,381 V7 12/09/94 Case Three—Intertie Energy at Four Dam Pool’s Variable Rate Capital Cost Capital Cost Intertie Project Life Inflation Real Discount $67.6 million 1997$ $55.6 million 1992$ 30 years 4.0% per year 2.40% per year Intertie Energy Cost at Variable Purchase Power Rate Fixed Purchase Power Rate Esc Variable Purchase Power Rate Esc EES Analysis for HDR Engineers Inc. Resource Cost Model Swan / Tyee Lakes Intertie Project, Mahoney Lake Hydro Project, Diesel Variable Rate 2.6 cents per kWh 1994$ 0.0% nominal per year 4.0% nominal per year ISER Load Growth Scenario - KPC Surplus Sales - KPC Surplus Energy Rate Maximum KPC Purchase Project energized date Medium or Base No 3.8 cents per kWh in $1994 0 MWhr's 1999 year Appenaix B State loan tenn 15 years Fixed O&M cost $200,000 per year 1995$ State loan rate 3.0% per year Mahoney Power Purchase - New Diesel Capital Cost $1,000 per kW in $1992 State Bond term 20 years New Diesel Overhead $75,000 per year 1992$ State Bond Rate 6.5% per year KPU Purchasing Power @ Actual Cost Diesel fixed O&M cost $12.50 per kW in $1992 Market bond tenn 30 years Four Dain Pool Fixed Wholesale Rate 4.0 cents per kWh 1994$ Diesel variable O&M cost 1 cents per kWh in $1992 Market bond rate 8.0% per year Four Dam Pool Variable Wholesale Rate 2.6 cents per kWh 1994$ Diesel fuel in 1997 $1 per gallon in $1997 State Grant $0.0 million per year Four Dam Pool Variable Wholesale Rate Esc. 4.0% nominal per year KPU diesel fuel consumption 14 kWh per gallon 3 0 0 Switch 0 1 2 0 Existing New Intertie Mahoney Mahoney KPU Existing Tyee Diesel Diesel Purchase Diesel Purchase Purchase Energy Resource Mahoney = Tyee Existing New State State Market Grant NewDiesel Total = Intertie O&M O&M Power Power Power KPC Sales Total Total (MWh) (MWh) (MWh) (MWh) (MWh) (MWh) ($0008) ($0005) ($0008) ($0008) ($000) ($000s) ($000) ($0008) ($000) (8000s) ($0008) (centwkWh) ($000) ($0008) ($000s) (centwkWh) 1999 173,503 147,650 25,853 0 0 0 0 0 0 0 0 0 0 0 0 0 0 8.7 2,249 0 2,249 8.7 2000 175,631 147,650 27,981 0 0 0 0 0 0 0 0 0 0 0 0 0 0 87 2.434 0 2434 8.7 2001 177,486 147,650 29,836 0 0 0 0 0 0 0 0 0 0 0 0 0 0 8.8 2,626 0 2,626 88 2002 178,850 147,650 31,200 0 0 0 0 0 0 0 0 0 0 0 0 0 0 8.8 2,746 0 2,746 88 2003 180,127 147,650 32,477 0 0 0 0 0 0 0 0 0 0 0 0 0 0 89 2,890 0 2,890 89 2004 181,768 147,650 34,118 0 0 0 0 0 0 0 0 0 0 0 0 0 0 9.0 3,071 0 3,071 9.0 2005 183,978 147,650 36,328 0 0 0 0 0 0 0 0 0 0 0 0 0 0 9.0 3,270 0 3,270 9.0 2006 186,583 147,650 38,933 0 0 0 0 0 0 i} 0 0 0 0 tt} 0 0 91 3,543 0 3,543 ot 2007 189,512 147,650 40,905 957 0 0 1,675 3,630 2,894 0 0 8,199 320 0 0 41 0 9.2 3,763 O 12,324 29.4 2008 192,714 147,650 40,905 4,159 0 0 1,675 3,630 2,894 i} 0 8,199 333 0 0 187 0 9.2 3,763 0 12,483 27.7 2009 195,911 147,650 40,905 7,356 0 0 1,675 3,630 2,894 0 0 8,199 346 0 O 344 0 93 3,804 0 12,694 26.3 2010 198,917 147,650 40,905 10,362 0 0 1,675 3,630 2,894 0 0 8,199 360 0 0 505 0 94 3,845 0 12,909 25.2 2011 201,503 147,650 40,905 12,948 0 0 1,675 3,630 2,894 0 0 8,199 375 0 0 656 0 9.5 3,886 O 13,116 24.4 2012 = 204,122 147,650 40,905 15,567 0 0 1,675 3,630 2,894 0 0 8,199 390 0 0 820 0 9.6 3,927 O 13,336 23.6 2013 = 206,776 =—147,650 40,905 18,221 0 0 1,675 3,630 2,894 0 0 8,199 405 0 0 998 0 97 3,968 0 13,570 23.0 2014 = 209,464 147,650 40,905 20,909 0 0 1,675 3,630 2,894 0 0 8,199 421 0 0 L191 0 98 4,009 O 13,821 22.4 2015 212,187 147,650 40,905 23,632 0 0 1,675 3,630 2,894 0 0 8,199 438 0 0 1,400 0 9.9 4,050 0 14,087 218 2016 = 214,946 = 147,650 40,905 26,390 0 0 1,675 3,630 2,894 0 0 8,199 456 0 0 1,626 0 10.0 4,091 0 14,372 214 2017 —-.217,740 =—-147,650 40,905 29,185 0 0 1,675 3,630 2,894 0 0 8,199 474 0 0 1,870 0 10.1 4,131 0 14,675 20.9 2018 220,571 147,650 40,905 32,015 0 0 1,675 3,630 2,894 0 0 8,199 493 0 0 2,134 0 10.2 4,172 0 14,998 20.6 2019 = =223,438 = 147,650 = 40,905 34,883 0 0 1,675 3,630 2,894 0 0 8,199 513 0 0 2418 0 10.3 4,213 O 15,343 20.2 2020 =. 226,343. 147,650 40,905 37,787 0 0 1,675 3,630 2,894 0 0 8,199 533 0 0 2,724 0 104 4,254 0 15,711 20.0 2021 229,285 147,650 40,905 40,730 0 0 1,675 3,630 2,894 0 0 8,199 534 0 0 3,053 0 10.5 4,295 0 16,102 19.7 2022 =. 232,266 =—-147,650 40,905 43,711 0 0 0 3,630 2,894 0 0 6,524 577 0 0 3,408 0 10.7 4,377 0 14,886 17.6 2023 = 235,285 147,650 40,905 46,730 0 0 0 3,630 2,894 0 0 6,524 600 0 0 3,789 0 10.8 4418 O 15,331 17.5 2024 =. 238,344 147,650 40,905 49,789 0 0 0 3,630 2,894 0 0 6,524 624 0 0 4,199 0 10.9 4,459 0 15,805 174 2025 241,442 147,650 40,905 52,887 0 0 0 3,630 2,894 0 0 6,524 O49 0 0 4,638 0 Ml 4,540 0 16,352 174 2026 = 244,581 147,650 40,905 56,026 0 0 0 3,630 2,894 0 0 6,524 675 0 0 5,110 0 11.2 4,581 0 16,890 174 2027. 247,761 ~=—:147,650 40,905 59,206 0 0 0 0 2,894 0 0 2,894 702 0 0 5,616 0 14 4,663 0 13,875 13.9 2028 =. 250,982 147,650 40,905 59,614 0 2,813 0 0 2,894 0 1,672 4,566 730 0 386 5,881 912 1S 4,704 0 17,178 16.6 Net Present Value 9,518 24,169 20,170 0 253 54,110 3,150 0 58 12,072 138 123 45,378 0 114,906 2 Real 1994 Levelized Cost 369 937 782 0 10 2,098 122 0 2 468 $ 48 1,759 0 4,455 8.2 12/09/94 Appendix B EES Analysis for IIDR Engineers Inc. Resource Cost Model Swan / Tyee Lakes Intertie Project, Mahoney Lake Hydro Project, Diesel Financing - Tntertic Energy Cost - ISER Load Growth Scenario - Medium or Base Capital Cost $67.6 million 1997$ Intertie Energy Cost at Variable Rate KPC Surplus Sales - No Capital Cost $55.6 million 1992$ Variable Purchase Power Rate 2.6 cents per kWh 1994$ Intertie Project Life 30 years Fixed Purchase Power Rate Esc 0.0% nominal per year KPC Surplus Energy Rate 3.8 cents per kWh in $1994 Inflation 4.0% per year Variable Purchase Power Rate Esc 4.0% nominal per year Maximum KPC Purchase 0 MWh's Real Discount 2.40% per year Project energized date 1999 year State loan term 15 years Fixed O&M cost $200,000 per year 1995$ State loan rate 3.0% per year Mahoney Power Purchase - New Diesel Capital Cost $1,000 per kW in $1992 State Bond tenn 20 years New Diesel Overhead $75,000 per year 1992$ State Bond Rate 6.5% per year KPU Purchasing Power @ Actual Cost Diesel fixed O&M cost $12.50 per kW in $1992 Market bond term 30 years Four Dam Pool Fixed Wholesale Rate 4.0 cents per kWh 1994$ Diesel variable O&M cost 1 cents per kWh in $1992 Market bond rate 8.0% per year Four Dam Pool Variable Wholesale Rate 2.6 cents per kWh 1994$ Diesel fuel in 1997 $1 per gallon in $1997 State Grant $0.0 million per year Four Daim Pool Variable Wholesale Rate Esc. 4.0% nominal per year KPU diesel fuel consumption 14 kWh per gallon 3 0 0 Switch 0 4 2 0 Existing New Intertie Mahoney Mahoney KPU Existing Tyee Diesel Diesel Purchase Diesel Purchase Purchase Energy Resource Tyee Existing Mahoney New State State Market Grant NewDiesel Total Intertie O&M O&M Power Fuel Power Power KPC Sales Total Total (MWh) (MWh) (MWh) (MWh) (MWh) (MWh) ($0008) ($0008) ($0008) ($000s) ($000s) (5000s) ($0008) ($0008) ($000s) ($0008) ($0008) (centykWh) ($0008) ($0008) ($0008) (cents/kWh) 1999 173,503 147,650 25,853 0 0 0 1,675 3,630 679 0 0 5,985 24 0 0 818 0 87 0 0 7,037 27.2 2000 175,631 147,650. 27,981 0 0 0 1,675 3,630 679 0 0 5,985 243 0 0 921 0 8.7 0 0 7,149 25.5 2001 =—-:177,486 147,650 29,836 0 0 0 1,675 3,630 679 0 0 5,985 253 0 0 1,021 0 88 0 0 7,259 24.3 2002 -178,850 147,650 31,200 0 0 0 1,675 3,630 679 0 0 5,985 263 0 0 1,110 0 88 0 0 7,358 23.6 2003 = 180,127 147,650 = 32,477 0 0 0 1,675 3,630 679 0 0 5,985 274 0 0 1,202 0 8.9 0 0 7,460 23.0 2004 = -:181,768 147,650 34,118 0 0 0 1,675 3,630 679 0 0 5,985 285 0 0 1,313 0 9.0 0 0 7,582 22.2 2005 = 183,978 += :147,650 36,328 0 0 0 1,675 3,630 679 0 0 5,985 296 0 0 1,454 0 9.0 0 0 7,735 21.3 2006 = 186,583 147,650 38,933 0 0 0 1,675 3,630 679 0 0 5,985 308 0 0 1,621 0 91 0 0 7,913 20.3 2007. —-:189,512, 147,650 41,862 0 0 0 1,675 3,630 679 0 0 5,985 320 0 0 1,812 0 9.2 0 0 8,117 19.4 2008 192,714 147,650 45,064 0 0 0 1,675 3,630 679 0 0 5,985 333 0 0 2,029 0 9.2 0 QO 8,347 18.5 2009 «195,911 147,650 48,261 0 0 0 1,675 3,630 679 0 0 5,985 346 0 0 2,260 0 93 0 O 8,591 178 2010 = 198,917 147,650 51,267 0 0 0 1,675 3,630 679 0 0 5,985 360 0 0 2,497 0 94 0 O 8,842 17.2 2011 = 201,503 147,650 53,853 0 0 0 1,675 3,630 679 0 0 5,985 375 0 0 2,727 0 9.5 0 0 9,087 16.9 2012 = 204,122, 147,650 56,472 0 0 0 1,675 3,630 679 0 0 5,985 390 0 0 2,974 0 9.6 0 0 9,349 16.6 2013 206,776 ~=—-147,650 59,126 0 0 0 1,675 3,630 679 0 0 5,985 405 0 0 3,239 0 9.7 0 0 9,629 16.3 2014 = 209,464 147,650 61,814 0 0 0 0 3,630 679 0 0 4,309 421 0 0 3,522 0 98 0 0 8,252 13.4 2015 212,187 147,650 64,537 0 0 0 0 3,630 679 0 0 4,309 438 0 0 3,824 0 99 0 0 8,571 13.3 2016 = 214,946 =—:147,650 67,296 0 0 0 0 3,630 679 0 0 4,309 456 0 0 4,147 0 10.0 0 0 8,912 13.2 2017. 217,740 147,650 70,090 0 0 0 0 3,630 679 0 0 4,309 474 0 0 4,492 0 10.1 0 0 9,275 13.2 2018 = 220,571 ~=—-147,650 70,568 0 0 2,353 0 3,630 679 0 1,130 5,439 493 0 281 4,703 468 10.2 0 O 11,385 15.6 2019 = 223,438 += 147,650 69,546 0 0 6,242 0 0 679 0 1,130 1,809 513 0 329 4,820 1,304 10.3 0 0 8,775 11.6 2020 = 226,343 147,650 68,509 0 0 10,184 0 0 679 0 1,130 1,809 533 0 377 4,938 2,234 10.4 0 0 9,891 12.6 2021 = 229,285 147,650 67,455 0 0 14,180 0 0 679 0 1,130 1,809 S54 0 426 5,057 3,266 10.5 0 O 1112 13.6 2022. 232,266 =—:147,650 66,386 0 0 18,230 0 0 679 0 1,130 1,809 577 0 476 5,176 4,409 10.7 0 0 12,446 14.7 2023) 235,285 147,650 65,300 0 0 22,335 0 0 679 0 1,130 1,809 600 0 526 5,295 5,673 10.8 0 O 13,902 15.9 2024 = -238,344 147,650 64,197 0 0 26,497 0 0 679 0 2,559 3,238 624 0 628 S414 7,066 10.9 0 0 16,969 18.7 2025 241,442——-:147,650 63,077 0 0 30,715 0 0 679 0 2,559 3,238 649 0 681 5,532 8,600 Ml 0 0 18,700 19.9 2026 = 244,581 147,650 61,940 0 0 34,991 0 0 679 0 2,559 3,238 675 0 734 5,650 10,288 11.2 0 0 20,584 21.2 2027. 247,761 + =—:147,650 60,786 0 0 39,325 0 0 679 0 2,559 3,238 702 0 789 5,766 12,140 14 0 0 22,635 22.6 2028 = 250,982 147,650 59,614 0 0 43,718 0 0 679 0 2,559 3,238 730 0 845 5,881 14,171 11.5 0 O 24,865 241 Net Present Value 15,753 40,000 8,869 0 3,855 68,477 = 4,770 0 1,203 32,505 12,761 123 0 0 119,716 259 Real 1994 Levelized Cost 611 1,551 344 0 149 2,655 185 0 47 1,260 495 48 0 0 4,641 10.1 12/09/94 Case Four—Intertie Energy at Four Dam Pool’s Wholesale Rate Capital Cost Capital Cost Intertie Project Life Inflation Real Discount State loan tem State loan rate State Bond term State Bond Rate Market bond term Market bond rate State Grant Switch KPU Energy (MWh) 1999 173,503 2000 175,631 2001 177,486 2002 178,850 2003 180,127 2004 181,768 2005 183,978 2006 186,583 2007 189,512 2008 192,714 2009 195,911 2010 198,917 2011 201,503 2012 204,122 2013 206,776 2014 209,464 2015 212,187 2016 214,946 2017 217,740 2018 = 220,571 2019 223,438 2020 =. 226,343 2021 229,285 2022 =. 232,266 2023 235,285 2024 238,344 2025 241,442 2026 = - 244,581 2027 247,761 2028 =. 250,982 Net Present Value Real 1994 Levelized Cost 0 $67.6 million 1997$ $55.6 million 1992$ 30 years 4.0% per year 2.40% per year 15 years 3.0% per year 20 years 6.5% per year 30 years 8.0% per year $0.0 million per year Existing Resource Mahoney Year Need w/o diesel. Hydro (MWh) (MWh) 147,650 25,853 147,650 27,981 147,650 29,836 147,650 31,200 147,650 32,477 147,650 34,118 147,650 36,328 147,650 38,933 147,650 40,905 147,650 40,905 147,650 40,905 147,650 40,905 147,650 40,905 147,650 40,905 147,650 40,905 147,650 40,905 147,650 40,905 147,650 40,905 147,650 40,905 147,650 40,905 147,650 40,905 147,650 40,905 147,650 40,905 147,650 40,905 147,650 40,905 147,650 40,905 147,650 40,905 147,650 40,905 147,650 40,905 147,650 40,905 Intentic Energy Cost - Intertie Energy Cost at Variable Purchase Power Rate Fixed Purchase Power Rate Esc Variable Purchase Power Rate Esc Mahoney Power Purchase - KPU Purchasing Power @ Four Dam Pool Fixed Wholesale Rate Four Dam Pool Variable Wholesale Rate 2 Tyee Existing New State State (MWh) (MWh) (MWh) ($0008) ($0008) 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 957 0 0 1,675 3,630 4,159 0 0 1,675 3,630 7,356 0 0 1,675 3,630 10,362 0 0 1,675 3,630 12,948 0 0 1,675 3,630 15,567 0 0 1,675 3,630 18,221 0 0 1,675 3,630 20,909 0 0 1,675 3,630 23,632 0 0 1,675 3,630 26,390 0 0 1,675 3,630 29,185 0 0 1,675 3,630 32,015 0 0 1,675 3,630 34,883 0 0 1,675 3,630 37,787 0 0 1,675 3,630 40,730 0 0 1,675 3,630 43,711 0 0 0 3,630 46,730 0 0 ct} 3,630 49,789 0 0 0 3,630 52,887 0 0 0 3,630 56,026 0 0 0 3,630 59,206 0 0 0 0 59,614 0 2,813 0 0 9,518 24,169 369 937 Four Dam Pool Variable Wholesale Rate Esc. EES Analysis for HDR Engineers Inc. Resource Cost Model Swan / Tyee Lakes Intertie Project, Mahoney Lake Hydro Project, Diesel SSS ISER Load Growth Scenario - 6.6 cents per kWh in 1994$ 2.6 cents per kWh 1994$ 0.0% nominal per year 4.0% nominal per year Actual Cost 4.0 cents per kWh 1994$ 2.6 cents per kWh 1994S 4.0% nominal per year Market Grant 0 New Diesel ($0008) ecoocoocoeo 2,894 2,894 2,894 2,894 2,894 2,894 2,894 2,894 2,894 2,894 2,894 2,894 2,894 2,894 2,894 2,894 2,894 2,894 2,894 2,894 2,894 2,894 20,170 782 ($000s) 0 0 ecooocooeoecoococeoc ooo COO OC OOOO Coo ($0008) Nococooeocoeceoeocecc ooo Sco oOo ooo ocooe 1,67: 253 10 Total ($0008) 0 ecooooc]e 0 8,199 8,199 8,199 8,199 8,199 8,199 8,199 8,199 8,199 8,199 8,199 8,199 8,199 8,199 8,199 6,524 6,524 6,524 6,524 6,524 2,894 4,566 54,110 KPC Surplus Sales - KPC Surplus Energy Rate Maximum KPC Purchase Project energized date Fixed O&M cost New Diesel Capital Cost New Diesel Overhead Diesel fixed O&M cost Diesel variable O&M cost Diesel fuel in 1997 KPU diesel fuel consumption Medium or Base No 3.8 cents per kWh in $1994 0 MWhr's 1999 year $200,000 per year 1995$ $1,000 per kW in $1992 $75,000 per year 19925 $12.50 per kW in $1992 1 cents per kWh in $1992 $1 per gallon in $1997 14 kWh per gallon 0 0 Appendix B Existing New Intertie Mahoney Mahoney Tyee Diesel Diesel Purchase Diesel Purchase Purchase Intertie O&M O&M Power Fuel Power Power KPC Sales Total Total ($000s) ($0008) —($000x) (5000s) ($000s) (centskWh) ($000s) ($0008) ($0008) (cents/kWh) 0 0 0 0 0 8.7 2,249 O 2,249 87 0 0 0 0 0 87 2,434 0 2,434 8.7 0 0 0 0 0 88 2,626 0 2,626 88 0 0 0 0 0 88 2,746 0 2,746 88 0 0 0 0 0 89 2,890 0 2,890 8.9 0 0 0 0 0 9.0 3,071 0 3,071 9.0 0 0 0 0 0 9.0 3,270 0 3,270 9.0 0 0 0 0 0 o1 3,543 0 3,543 o1 320 0 0 80 0 9.2 3,763 0 12,363 29.5 333 0 0 354 0 9.2 3,763 0 12,649 28.1 346 0 0 639 0 9.3 3,804 0 12,989 26.9 360 0 0 919 0 94 3,845 O 13,324 26.0 375 0 0 1,174 0 9.5 3,886 O 13,634 25.3 390 0 a 1,443 0 9.6 3,927 0 13,959 24.7 405 0 0 1,727 0 97 3,968 0 14,299 24.2 421 0 0 2,028 0 9.8 4,009 O 14,657 23.7 438 0 0 2,345 0 99 4,050 0 15,033 23.3 456 0 0 2,682 0 10.0 4,091 O 15,427 22.9 474 0 0 3,038 0 10.1 4,131 O 15,842 22.6 493 0 0 3,414 0 10.2 4,172 0 16,279 22.3 513 0 0 3,813 0 10.3 4,213 0 16,738 22.1 533 0 0 4,235 0 10.4 4,254 0 17,222 21.9 554 0 0 4,683 0 10.5 4,295 0 17,732 21.7 577 0 0 5,156 Oo 10.7 4,377 0 16,634 19.7 600 0 0 5,658 0 10.8 4418 0 17,200 19.6 624 0 0 6,190 0 10.9 4,459 0 17,797 19.6 649 0 0 6,754 0 Ml 4,540 0 18,467 19.7 675 0 0 7,351 0 11.2 4,581 0 19,131 19.7 702 0 0 7,984 0 14 4,663 O 16,243 16.2 730 0 386 8,266 912 11S 4,704 0 19,563 18.9 3,150 0 58 18,784 138 123 45,378 0 121,619 220 122 0 2 728 5 48 1,759 0 4,715 8.5 2,098 12/09/94 Financing - Capital Cost Capital Cost $67.6 million 1997$ $55.6 million 1992$ Tntertic Energy Cost - Intertie Energy Cost at Variable Purchase Power Rate EES Analysis for HDR Engineers Inc. Resource Cost Model Swan / Tyee Lakes Intertie Project, Mahoney Lake Hydro Project, Diesel 6.6 cents per kWh in 1994$ 2.6 cents per kWh 1994$ Intertie Project Life 30 years Fixed Purchase Power Rate Esc 0.0% nominal per year Inflation 4.0% per year Variable Purchase Power Rate Esc 4.0% nominal per year Real Discount 2.40% per year State loan tenn 15 years State loan rate 3.0% per year Mahoney Power Purchase - State Bond tenn 20 years State Bond Rate 6.5% per year KPU Purchasing Power @ Actual Cost Market bond tenn 30 years Four Dam Pool Fixed Wholesale Rate 4.0 cents per kWh 1994$ Market bond rate 8.0% per year Four Dam Pool Variable Wholesale Rate 2.6 cents per kWh 1994$ State Grant $0.0 million per year Four Dain Pool Variable Wholesale Rate Esc. 4.0% nominal per year Switch 0 4 2 0 KPU _ Existing Energy Resource Tyee Existing Mahoney New State State Market Grant New Diesel (MWh) (wh) (MWh) (MWh) (MWh) (MWh) ($0008) (5000s) ($0008) ($0008) (8000s) 1999 173,503, 147,650 25,853 oO 0 0 1,675 3,630 679 oO 0 2000 175,631 147,650 27,981 0 0 0 1,675 3,630 679 0 0 2001 177,486 = 147,650 29,836 0 0 0 1,675 3,630 679 i} 0 2002 178,850 147,650 31,200 0 0 0 1,675 3,630 679 0 0 2003 180,127 147,650 32,477 0 0 0 1,675 3,630 679 0 0 2004 181,768 147,650 34,118 0 0 0 1,675 3,630 679 0 0 2005 183,978 147,650 36,328 0 0 0 1,675 3,630 679 0 0 2006 186,583 147,650 38,933 0 0 0 1,675 3,630 679 0 0 2007 189,512 147,650 41,862 0 0 0 1,675 3,630 679 0 0 2008 192,714 147,650 45,064 0 0 0 1,675 3,630 679 0 0 2009 195,911 147,650 48,261 0 0 0 1,675 3,630 679 0 0 2010 198,917 147,650 51,267 0 0 0 1,675 3,630 679 0 0 2011 201,503 147,650 53,853 0 0 0 1,675 3,630 679 0 0 2012, 204,122, 147,650 56,472 0 0 0 1,675 3,630 679 0 0 2013 206,776 147,650 59,126 0 0 0 1,675 3,630 679 0 0 2014 209,464 147,650 61,814 0 0 0 0 3,630 679 0 0 2015 212,187 147,650 64,537 0 0 0 0 3,630 679 0 0 2016 = 214,946 147,650 67,296 0 0 0 0 3,630 679 0 0 2017 217,740 147,650 70,090 0 0 0 0 3,630 679 0 0 2018 = 220,571 = :147,650 70,568 0 0 2,353 0 3,630 679 0 1,130 2019 =. 223,438 =—:147,650 69,546 0 0 6,242 0 0 679 0 1,130 2020 =. 226,343. 147,650 68,509 0 0 10,184 0 0 679 0 1,130 2021 229,285 147,650 67,455 0 0 14,180 0 0 679 0 1,130 2022 = 232,266 = 147,650 66,386 0 0 18,230 0 0 679 0 1,130 2023 235,285 147,650 65,300 0 0 22,335 0 0 679 0 1,130 2024 =. 238,344 147,650 64,197 0 0 26,497 0 0 679 0 2,559 2025 241,442) —-147,650 63,077 0 0 30,715 0 0 679 0 2,559 2026 = 244,581 147,650 61,940 0 0 34,991 0 0 679 0 2,559 2027 = 247,761 =—-147,650 60,786 0 0 39,325 0 0 679 0 2,559 2028 = 250,982. 147,650 59,614 0 0 43,718 0 0 679 0 2,559 Net Present Value 15,753 40,000 = 8,869 0 3,855 Real 1994 Levelized Cost 611 1,551 344 0 149 ISER Load Growth Scenario - KPC Surplus Sales - KPC Surplus Energy Rate Maximum KPC Purchase Project energized date Fixed O&M cost New Diesel Capital Cost New Diesel Overhead Diesel fixed O&M cost Diesel variable O&M cost Diesel fuel in 1997 KPU diesel fuel consumption Existing New Tyee Diesel Diesel Total Intertie O&M O&M (5000s) (5000s) (5000s) ($000s) 5,985 24 0 0 5,985 243 0 0 5,985 253 0 0 5,985 263 0 0 5,985 274 0 0 5,985 285 0 0 5,985 296 0 0 5,985 308 0 0 5,985 320 0 0 5,985 333 0 0 5,985 346 0 0 5,985 360 0 0 5,985 375 0 0 5,985 390 0 0 5,985 405 0 0 4,309 421 0 0 4,309 438 0 0 4,309 456 0 0 4,309 414 0 0 5,439 493 0 281 1,809 513 0 329 1,809 533 0 377 1,809 554 0 426 1,809 577 0 476 1,809 600 0 526 3,238 624 0 628 3,238 649 0 681 3,238 675 0 734 3,238 702 0 789 3,238 730 0 845 68,477 4,770 0 1,203 2,655 185 0 47 1 Medium or Base No 3.8 cents per kWh in $1994 0 MWhr's 1999 year $200,000 per year 1995$ $1,000 per kW in $1992 $75,000 per year 1992$ $12.50 per kW in $1992 1 cents per kWh in $1992 $1 per gallon in $1997 14 kWh per gallon 0 0 Appenuia B Intertice Mahoney Mahoney Purchase Diesel Purchase Purchase Power Fuel Power Power KPC Sales Total Total Cost Cost Cost TotalCost Offset Cost Cost ($0008) ($0008) (cents/kWh) ($0003) (5000s) ($0008) (centwkWh) 1,852 0 87 0 0 8,071 31.2 2,040 0 87 0 0 8,268 29.5 2,214 0 88 0 0 8452 28.3 2,358 0 88 0 0 8,606 276 2,501 0 89 0 0 8,759 27.0 2,678 0 9.0 0 0 8947 26.2 2,907 0 9.0 0 0 9,188 25.3 3,178 0 91 0 0 9,471 24.3 3,487 0 io 0 0 9,792 23.4 3,832 0 9.2 0 0 10,149 22.5 4,190 0 9.3 0 0 10,521 218 4,547 0 94 0 0 10,892 21.2 4,882 0 9.5 0 O 11,241 20.9 5,233 0 9.6 0 0 11,608 20.6 5,604 0 97 0 0 11,994 20.3 5,994 0 98 0 0 10,725 174 6,405 0 99 0 O 11,153 17.3 6,838 0 10.0 0 0 11,604 17.2 7,295 0 10.1 0 0 12,079 17.2 7,526 468 10.2 0 0 14,207 19.5 7,602 1,304 10.3 0 O 11,556 15.2 7,679 2,234 104 0 0 12,632 16.1 7,155 3,266 10.5 0 0 13,811 16.9 7,831 4,409 10.7 0 O 15,102 17.8 7,907 5,673 10.8 0 0 16,514 18.8 7,982 7,066 10.9 0 0 19,537 21.5 8,055 8,600 ILL 0 O 21,223 22.6 8,127 10,288 11.2 0 0 23,062 23.8 8,197 12,140 a4 0 0 25,066 25.0 8,266 14,171 ILS 0 0 27,249 26.4 56,452 12,761 123 0 0 143,663 310 2,189 495 48 0 0 5,570 12.0 12/09/94 Case Five—State Grant Funding EES Analysis for HDR Engineers Inc. Resource Cost Model Swan / Tyee Lakes Intertie Project, Mahoney Lake Hydro Project, Diesel Financing - Capital Cost Capital Cost Intertie Project Life Inflation Real Discount State loan tem State loan rate State Bond term State Bond Rate Market bond tem Market bond rate State Grant Switch KPU Energy Year Need (MWh) 1999 173,503 2000 175,631 2001 177,486 2002 178,850 2003 180,127 2004 181,768 2005 183,978 2006 186,583 2007 189,512 2008 192,714 2009 195,911 2010 198,917 2011 201,503 2012 204,122 2013 206,776 2014 209,464 2015 212,187 2016 214,56 2017 217,740 2018 220,571 2019 223,438 2020 226,343 2021 229,285 2022 232,266 2023 235,285 2024 238,344 2025 241,442 2026 244,581 2027 247,761 2028 250,982 Net Present Value Real 1994 Levelized Cost $67.6 million 1997$ $55.6 million 1992$ Intertie Energy Cost at Variable Purchase Power Rate 30 years Fixed Purchase Power Rate Esc 4.0% per year Variable Purchase Power Rate Esc 2.40% per year 15 years 3.0% per year Mahoney Power Purchase - 20 years 6.5% per year KPU Purchasing Power @ 30 years Four Dam Pool Fixed Wholesale Rate 8.0% per year Four Dam Pool Variable Wholesale Rate $4.0 million per year 1 2 Existing Resource Mahoney = Tyee Existing New State State (MWh) (MWh) (MWh) (MWa) (MWh) (5000s) ($0008) 147,650 25,853 0 0 0 0 0 147,650 27,981 0 0 0 0 0 147,650 29,836 0 0 0 0 0 147,650 31,200 0 0 0 0 0 147,650 32,477 0 0 0 0 0 147,650 34,118 0 0 0 0 0 147,650 36,328 0 0 0 0 0 147,650 38,933 0 0 0 0 0 147,650 40,905 957 0 0 1,675 3,630 147,650 40,905 4,159 0 0 1,675 3,630 147,650 40,905 7,356 0 0 1,675 3,630 147,650 40,905 10,362 0 0 1,675 3,630 147,650 40,905 12,948 0 0 1,675 3,630 147,650 40,905 15,567 0 0 1,675 3,630 147,650 40,905 18,221 0 0 1,675 3,630 147,650 40,905 20,909 0 0 1,675 3,630 147,650 40,905 23,632 0 0 1,675 3,630 147,650 40,905 26,390 0 0 1,675 3,630 147,650 40,905 29,185 0 0 1,675 3,630 147,650 40,905 32,015 0 0 1,675 3,630 147,650 40,905 34,883 0 0 1,675 3,630 147,650 40,905 37,787 0 0 1,675 3,630 147,650 40,905 40,730 0 0 1,675 3,630 147,650 40,905 43,711 0 0 0 3,630 147,650 40,905 46,730 0 0 0 3,630 147,650 40,905 49,789 0 0 0 3,630 147,650 40,905 52,887 0 0 0 3,630 147,650 40,905 56,026 0 0 0 3,630 147,650 40,905 59,206 0 0 0 0 147,650 40,905 59,614 0 2,813 0 0 9,518 24,169 369 937 Four Dam Pool Variable Wholesale Rate Esc. Melded Rate 2.6 cents per kWh 1994$ 0.0% nominal per year 4.0% nominal per year Actual Cost 4.0 cents per kWh 1994$ 2.6 cents per kWh 1994$ 4.0% nominal per year Market Grant New Diesel (5000s) ($000s) ($0008) 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 2,894 (4,000) 0 2,894 (4,000) 0 2,894 (4,000) 0 2,894 (4,000) 0 2,894 (4,000) 0 2,894 (4,000) 0 2,894 (4,000) 0 2,894 = (4,000) 0 2,894 (4,000) 0 2,894 (4,000) 0 2,894 (4,000) 0 2,894 (4,000) 0 2,894 (4,000) 0 2,894 (4,000) 0 2,894 (4,000) 0 2,894 (4,000) 0 2,894 (4,000) 0 2,894 (4,000) 0 2,894 (4,000) 0 2,894 (4,000) 0 2,894 (2,894) 0 2,894 (2,894) 1,672 20,170 (27,534) 253 782 (1,067) 10 ISER Load Growth Scenario - Medium or Base KPC Surplus Sales - No KPC Surplus Energy Rate 3.8 cents per kWh in $1994 Maximum KPC Purchase 0 MWhr's Project energized date 1999 year Fixed O&M cost New Diesel Capital Cost New Diesel Overhead Diesel fixed O&M cost Diesel variable O&M cost Diesel fuel in 1997 KPU diesel fuel consumption $200,000 per year 1995$ $1,000 per kW in $1992 $75,000 per year 1992$ $12.50 per kW in $1992 1 cents per kWh in $1992 $1 per gallon in $1997 14 kWh per gallon 2 0 0 Existing New Intertie Mahoney Mahoney Tyee Diesel Diesel Purchase Diesel Purchase Purchase Total Intertie O&M O&M Power Fuel Power Power KPC Sales Total Total (8000s) ($000) ($0008) ——($000s) ($000s) ($0008) (cemts/kWh) ($0008) ($0008) ($0008) (centskWh) 0 0 0 0 0 0 87 2,249 0 2,249 87 0 0 0 0 0 0 87 2,434 0 2434 87 0 0 0 0 0 0 88 2,626 0 2,626 88 0 0 0 0 0 0 88 2,746 0 2,746 88 0 0 0 0 0 0 89 2,890 0 2,890 8.9 0 0 0 0 0 0 9.0 3,071 0 3,071 9.0 0 0 0 0 0 0 9.0 3,270 0 3,270 9.0 0 0 0 0 0 0 a1 3,543 OQ 3,543 9.1 4,199 320 0 0 79 0 9.2 3,763 0 8,362 20.0 4,199 333 0 0 348 0 9.2 3,763 0 8,644 19.2 4,199 346 0 0 623 0 9.3 3,804 0 8973 18.6 4,199 360 0 0 888 0 94 3,845 0 9,293 18.1 4,199 375 0 0 1,126 0 9.5 3,886 0 9,586 178 4,199 390 0 0 1,375 0 9.6 3,927 0 9,891 17.5 4,199 405 0 0 1,636 0 9.7 3,968 0 10,208 17.3 4,199 421 0 0 1,910 0 98 4,009 0 10,540 mW 4,199 438 0 0 2,198 0 99 4,050 0 10,885 16.9 4,199 456 0 0 2,501 0 10.0 4,091 O 11,247 16.7 4,199 474 0 0 2,821 0 10.1 4,131 0 11,626 16.6 4,199 493 0 0 3,158 0 10.2 4,172 0 12,023 16.5 4,199 513 0 0 3,514 0 10.3 4,213 0 12,440 16.4 4,199 533 0 0 3,891 0 10.4 4,254 O 12,878 16.4 4,199 554 0 0 4,289 0 10.5 4,295 0 13,338 16.3 2,524 577 0 0 4,711 0 10.7 4,377 O 12,189 144 2,524 600 0 0 5,158 0 10.8 4418 0 12,700 14.5 2,524 624 0 0 5,632 0 10.9 4,459 0 13,239 14.6 2,524 O49 0 0 6,135 0 1d 4,540 O 13,848 148 2,524 675 0 0 6,669 0 11.2 4,581 0 14,449 49 0 702 0 0 7,235 0 14 4,663 0 12,600 12.6 1,672 730 0 386 7,508 912 11.5 4,704 0 15,911 154 26,576 3,150 0 58 17,351 138 123 45,378 0 92,652 173 1,030 122 0 2 673 5 48 1,759 0 3,592 67 12/14/94 Capital Cost Capital Cost Intertie Project Life Inflation Real Discount State loan tenn State loan rate State Bond tenn State Bond Rate Market bond tenn Market bond rate State Grant $4.0 million per year Four Dam Pool Variable Wholesale Rate Esc. Switch 0 2 2 KPU Existing Energy Resource Tyee Mahoney Existing New State State (MWh) (MWh) (MWh) (MWh) (MWh) (MWh) ($0008) $000s) 1999 173,503 147,650 25,853 0 0 0 1,675 3,630 2000 175,631 147,650 27,981 0 0 0 1,675 3,630 2001 177,486 147,650 29,836 1) 0 0 1,675 3,630 2002 178,850 147,650 31,200 0 i) 0 1,675 3,630 2003 180,127 147,650 32,477 0 0 0 1,675 3,630 2004 181,768 147,650 34,118 0 0 0 1,675 3,630 2005 183,978 147,650 36,328 0 0 0 1,675 3,630 2006 186,583 147,650 38,933 0 0 0 1,675 3,630 2007 189,512 147,650 41,862 0 0 0 1,675 3,630 2008 192,714 147,650 45,064 0 0 0 1,675 3,630 2009 195,911 147,650 48,261 0 0 0 1,675 3,630 2010 198,917 147,650 51,267 0 0 0 1,675 3,630 2011 201,503 147,650 53,853 0 0 0 1,675 3,630 2012 204,122) 147,650 = 56,472 0 0 0 1,675 3,630 2013 206,776 = 147,650 59,126 0 0 0 1,675 3,630 2014 209.464 147,650 61,814 0 0 0 0 3,630 2015 212,187 147,650 64,537 0 0 0 0 3,630 2016 = 214,946 =—:147,650 67,296 0 0 0 0 3,630 2017 217,740 147,650 70,090 0 0 0 0 3,630 2018 = 220,571 = 147,650 70,568 2,353 0 0 0 3,630 2019 =.223,438 = 147,650 69,546 6,242 0 0 0 0 2020 = 226,343. 147,650 68,509 10,184 0 0 0 0 2021 229,285 147,650 67,455 14,180. 0 0 0 0 2022 =. 232,266 »=-147,650 66,386 18,230 0 0 0 0 2023 = 235,285 147,650 65,300 22,335 i} 0 0 0 2024 = 238,344 147,650 64,197 26,497 0 0 0 0 2025 241,442 147,650 63,077 30,715 0 0 0 0 2026 =. 244,581 147,650 61,940 34,991 0 o 0 0 2027 247,761 147,650 60,786 39,325 0 0 0 0 2028 =. 250,982 147,650 59,614 40,905 0 2,813 0 0 Net Present Value 15,753 40,000 Real 1994 Levelized Cost oll 1,551 $67.6 million 1 997$ $55.6 million 1992$ 30 years 4.0% per year 2.40% per year 15 years 3.0% per year 20 years 6.5% per year 30 years 8.0% per year EES Analysis for HDR Engineers Inc. Resource Cost Model Swan / Tyee Lakes Intertie Project, Mahoney Lake Hydro Project, Diesel Intertie Energy Cost at Variable Purchase Power Rate Fixed Purchase Power Rate Esc Variable Purchase Power Rate Esc Mahoney Power Purchase - KPU Purchasing Power @ Four Dam Pool Fixed Wholesale Rate Four Dain Pool Variable Wholesale Rate Melded Rate 2.6 cents per kWh 1994$ 0.0% nominal per year 4.0% nominal per year Actual Cost 4.0 cents per kWh 1994$ 2.6 cents per kWh 1994$ 4.0% nominal per year KPC Surplus Sales - KPC Surplus Energy Rate Maximum KPC Purchase Project energized date Fixed O&M cost New Diesel Capital Cost New Diesel Overhead Diesel fixed O&M cost Diesel variable O&M cost Diesel fuel in 1997 KPU diesel fuel consumption Medium or Base No 3.8 cents per kWh in $1994 0 MWhr's 1999 year $200,000 per year 1995$ $1,000 per kW in $1992 $75,000 per year 19925 $12.50 per kW in $1992 1 cents per kWh in $1992 $1. per gallon in $1997 14 kWh per gallon Appian 3 2 0 0 1 Existing New Intertie Mahoney Mahoney Tyee Diesel Diesel Purchase Diesel Purchase Purchase Market Grant New Diesel Total Intentie O&M O&M Power Fuel Power Power KPC Sales Total Total (000s) (5000s) (5000s) (3000s) ($000s) (000s) ($0008) ($0008) ($0008) (centwkWh) ($0008) ($0008) (5000s) (cent Wh) 679 (4,000) QO 1,985 234 0 0 1,678 0 87 0 0 3,897 15.1 679 (4,000) 0 1,985 243 0 0 1,839 0 8.7 0 0 4,067 14.5 679 (4,000) O 1,985 253 0 0 1,989 0 88 0 O 4,226 14.2 679 — (4,000) 0 1,985 263 0 0 2,114 0 88 0 0 4,362 14.0 679 (4,000) O 1,985 274 0 0 2,238 0 89 0 0 4,496 13.8 679 (4,000) O 1,985 285 0 0 2,391 0 9.0 0 0 4,660 13.7 679 = (4,000) O 1,985 296 0 0 2,586 0 9.0 0 0 4,867 13.4 679 (4,000) 0 1,985 308 i} 0 2,815 0 on 0 O 5,107 13.1 679 (4,000) 0 1,985 320 0 0 3,074 0 9.2 0 0 5,379 12.8 679 (4,000) 0 1,985 333 0 0 3,362 0 9.2 0 0 5,680 12.6 679 (4,000) O 1,985 346 0 0 3,662 0 9.3 0 0 5,993 12.4 679 (4,000) O 1,985 360 0 ct} 3,961 0 94 0 0 6,306 12.3 679 (4,000) 0 1,985 375 0 0 4,244 0 9.5 0 0 6,603 12.3 679 (4,000) 0 1,985 390 0 0 4,542 0 9.6 0 0 6,916 12.2 679 (4,000) O 1,985 405 0 0 4,857 0 97 0 0 7,246 12.3 679 = (4,000) 0 309 421 0 0 5,189 0 9.8 0 0 5,920 96 679 (4,000) 0 309 438 0 0 5,540 0 9.9 0 O 6,288 97 679 (4,000) 0 309 456 0 0 5,911 0 10.0 0 0 6,676 99 679 (4,000) 0 309 474 0 0 6,303 0 10.1 0 0 7,087 10.1 679 = (4,000) 0 309 493 0 0 6,523 0 10.2 240 0 7,565 10.4 679 (679) 0 0 513 0 0 6,623 0 10.3 643 0 7,778 10.3 679 (679) 0 0 533 0 0 6,723 0 10.4 1,059 O 8,316 10.6 679 (679) 0 0 554 0 0 6,824 0 10.5 1,489 0 8,867 10.9 679 (679) 0 0 577 tt} 0 6,924 0 10.7 1,951 0 9,452 11.2 679 (679) 0 0 600 0 0 7,024 0 10.8 2,412 0 10,036 11.5 679 (679) 0 0 624 0 0 7,124 0 10.9 2,888 0 10,636 117 679 (679) 0 0 649 0 0 7,222 0 11d 3,409 0 11,280 12.0 679 (679) 0 0 675 0 0 7319 0 11.2 3,919 O 11,913 12.3 679 (679) 0 0 702 0 0 7,415 0 114 4,483 0 12,599 12.6 679 (679) 1,672 1,672 730 0 386 7,508 912 11.5 4,704 0 15,911 154 8,869 (45,460) 253 19,415 4,770 0 58 49,765 138 123 5,074 0 79,219 167 344 (1,762) 10 753 185 0 2 1,929 5 48 197 i} 3,071 6.5 12/4/94 Capital Cost Capital Cost Intertie Project Life Inflation Real Discount State loan term State loan rate State Bond term State Bond Rate Market bond term Market bond rate State Grant Switch KPU Energy Year Need (MWh) 1999 173,503 2000 175,631 2001 177,486 2002 178,850 2003 180,127 2004 181,768 2005 183,978 2006 186,583 2007 189,512 2008 192,714 2009 195,911 2010 198,917 2011 201,503 2012 204,122 2013 206,776 2014 = 209,464 2015 212,187 2016 = 214,946 2017) —.217,740 2018 = 220,571 2019 223,438 2020 226,343 2021 229,285 2022 =. 232,266 2023 = 235,285 2024 = - 238,344 2025 =. 241,442 2026 =. 244,581 2027: -247,761 2028 =. 250,982 Net Present Value Real 1994 Levelized Cost $67.6 million 1997$ $55.6 million 1992$ Intertie Energy Cost at Variable Purchase Power Rate 30 years Fixed Purchase Power Rate Esc 4.0% per year Variable Purchase Power Rate Esc 2.40% per year 15 years 3.0% per year Mahoney Power Purchase - 20 years 6.5% per year KPU Purchasing Power @ 30 years Four Dam Pool Fixed Wholesale Rate 8.0% per year Four Dain Pool Variable Wholesale Rate $4.0 million per year Four Dain Pool Variable Wholesale Rate Esc. 4 2 Existing Resource Tyee Existing © Mahoney New State State (MWh) = (MWh) (MWh) (MWh) (MWh) ($0008) ($000) 147,650 25,853 0 0 0 1,675 3,630 147,650 27,981 0 0 0 1,675 3,630 147,650 29,836 0 0 0 1,675 3,630 147,650 31,200 0 0 0 1,675 3,630 147,650 32,477 0 0 0 1,675 3,630 147,650 34,118 0 0 0 1,675 3,630 147,650 36,328 0 0 0 1,675 3,630 147,650 38,933 0 0 0 1,675 3,630 147,650 41,862 0 0 i} 1,675 3,630 147,650 45,064 0 0 0 1,675 3,630 147,650 48,261 0 0 0 1,675 3,630 147,650 51,267 0 0 0 1,675 3,630 147,650 53,853 0 0 0 1,675 3,630 147,650 56,472 0 0 0 1,675 3,630 147,650 59,126 0 0 i} 1,675 3,630 147,650 61,814 0 0 0 0 3,630 147,650 64,537 0 0 0 0 3,630 147,650 67,296 0 0 0 0 3,630 147,650 70,090 0 0 0 0 3,630 147,650 70,568 0 0 2,353 0 3,630 147,650 69,546 0 0 6,242 0 0 147,650 68,509 0 0 10,184 0 0 147,650 67,455 0 0 14,180 0 0 147,650 66,386 0 0 18,230 0 0 147,650 65,300 0 0 22,335 0 0 147,650 64,197 0 0 26,497 0 0 147,650 63,077 0 0 30,715 0 0 147,650 61,940 0 0 34,991 0 0 147,650 60,786 0 0 39,325 0 0 147,650 59,614 0 0 43,718 0 i} 15,753 40,000 6ll 1,551 EES Analysis for HDR Engineers Inc. Resource Cost Model Swan / Tyee Lakes Intertie Project, Mahoney Lake Hydro Project, Diesel Melded Rate 2.6 cents per kWh 1994$ 0.0% notninal per year 4.0% nominal per year Actual Cost 4.0 cents per kWh 1994$ 2.6 cents per kWh 19945 4.0% noininal per year Market = Grant’ New Diesel Boud = Offset Capital (5000s) ($0008) ($0005) 679 (4,000) 0 679 (4,000) 0 679 (4,000) 0 679 = (4,000) 0 679 (4,000) 0 679 = (4,000) 0 679 = (4,000) 0 679 = (4,000) 0 679 = (4,000) 0 679 (4,000) 0 679 = (4,000) 0 679 = (4,000) 0 679 = (4,000) 0 679 — (4,000) 0 679 (4,000) 0 679 (4,000) 0 679 (4,000) 0 679 == (4,000) 0 679 (4,000) 0 679 (4,000) 1,130 679 (679) 1,130 679 (679) 1,130 679 (679) 1,130 679 (679) 1,130 679 (679) 1,130 679 (679) 2,559 679 (679) 2,559 679 (679) 2,559 679 (679) 2,559 679 (679) 2,559 8,869 (45,460) 3,855 344 (1,762) 149 ISER Load Growth Scenario - KPC S: sakes KPC Surplus Energy Rate Maximum KPC Purchase Project energized date Fixed O&M cost New Diesel Capital Cost New Diesel Overhead Diesel fixed O&M cost Diesel variable O&M cost Diesel fuel in 1997 KPU diesel fuel consumption Medium or Base No 3.8 cents per kWh in $1994 0 MWhr's 1999 year $200,000 per year 1995$ $1,000 per kW in $1992 $75,000 per year 1992$ $12.50 per kW in $1992 1 cents per kWh in $1992 $1 per gallon in $1997 14 kWh per gallon 2 0 0 Existing New Intertie Mahoney Mahoney Tyee Diesel Diesel Purchase Diesel Purchase Purchase Tol lntenie O&M O&M Power Fuel Power ~— Power KPC Sales Total Total ($0008) ($000s) ($0008) ($0008) ($0008) ($000s) (cents/kWh) ($0008) ($0008) ($0008) (cents/kWh) 1,985 234 0 0 1,678 0 87 0 0 3,897 15.1 1,985 243 0 0 1,839 0 87 0 0 4,067 14.5 1,985 253 0 0 1,989 0 88 0 0 4,226 14.2 1,985 263 0 0 2,114 0 88 0 0 4,362 14.0 1,985 274 0 0 2,238 0 89 0 0 4,496 138 1,985 285 0 0 2,391 0 9.0 0 0 4,660 13.7 1,985 296 0 0 2,586 0 9.0 0 0 4,867 13.4 1,985 308 0 0 2,815 0 9.1 0 0 5,107 13.1 1,985 320 0 0 3,074 0 9.2 0 0 5,379 12.8 1,985 333 0 0 3,362 0 9.2 0 0 5,680 12.6 1,985 346 0 0 3,662 0 9.3 0 0 5,993 124 1,985 360 0 0 3,961 0 94 0 0 6,306 12.3 1,985 375 0 0 4,244 0 on 0 0 6,603 12.3 1,985 390 0 0 4,542 0 96 0 0 6,916 12.2 1,985 405 0 0 4,857 0 97 0 O 7,246 12.3 309 421 0 0 5,189 0 98 0 0 5,920 9.6 309 438 0 0 5,540 0 99 0 O 6,288 97 309 456 0 0 5,911 0 10.0 0 0 6,676 9.9 309 474 0 0 6,303 0 10.1 0 0 7,087 10.1 1,439 493 0 281 6,523 468 10.2 0 0 9,204 12.6 1,130 513 0 329 6,623 1,304 10.3 0 0 9,898 13.1 1,130 533 0 377 6,723 2,234 10.4 0 0 10,997 14.0 1,130 S54 0 426 6,824 3,266 10.5 0 0 12,200 49 1,130 577 0 476 6,924 4,409 10.7 0 O 13,516 16.0 1,130 600 0 526 7,024 5,673 10.8 0 0 14,953 71 2,559 624 0 628 7,124 7,066 10.9 0 0 18,000 19.8 2,559 649 0 681 7,222 8,600 Id 0 O 19,711 21.0 2,559 675 0 734 7319 10,288 11.2 0 0 21,575 22.3 2,559 702 0 789 7415S 12,140 14 0 0 23,604 23.6 2,559 730 0 B45 7,508 14,171 11.5 0 O 25,812 25.0 23,017 4,770 0 1,203 49,765 12,761 123 0 0 91,515 180 892 185 0 47 1,929 495 48 0 0 3,548 7.0 1214/94 Case Six—Mahoney Power Purchase Rate at KPU’s Wholesale Rate Capital Cost $67.6 million 1997$ Intertie Energy Cost at Capital Cost $55.6 million 1992$ Variable Purchase Power Rate Intertie Project Life 30 years Fixed Purchase Power Rate Esc Inflation 4.0% per year Variable Purchase Power Rate Esc Real Discount 2.40% per year State loan tem 15 years State loan rate 3.0% per year Mahoney Power Purchase - State Bond term 20 years State Bond Rate 6.5% per year KPU Purchasing Power @ Market bond term 30 years Four Dam Pool Fixed Wholesale Rate Market bond rate 8.0% per year Four Dam Pool Variable Wholesale Rate State Grant $0.0 million per year Four Dain Pool Variable Wholesale Rate Esc. Switch 0 2 KPU Existing Energy Resource Mahoney Tyee Existing New State State (MWh) (MWh) (MWh) (MWh) (MWh) (MWh) ($0008) ($000s) 1999 173,503 147,650 25,853 0 0 0 0 0 2000 175,631 147,650 27,981 0 0 0 0 0 2001 177,486 = 147,650 29,836 0 0 0 0 0 2002 178,850 147,650 31,200 0 0 0 0 0 2003 180,127 147,650 32,477 0 0 0 0 0 2004 181,768 147,650 34,118 0 0 0 0 0 2005 183,978 147,650 36,328 0 0 0 0 0 2006 186,583 147,650 38,933 0 0 0 0 0 2007 189,512 147,650 40,905 957 0 0 1,675 3,630 2008 192,714 147,650 40,905 4,159 0 0 1,675 3,630 2009 195,911 147,650 40,905 7,356 0 0 1,675 3,630 2010 198,917 147,650 40,905 10,362 0 0 1,675 3,630 2011 201,503 147,650 40,905 12,948 0 0 1,675 3,630 2012 = 204,122) 147,650 40,905 15,567 0 0 1,675 3,630 2013 206,776 ~=—-147,650 40,905 18,221 0 0 1,675 3,630 2014 209,464 147,650 40,905 20,909 0 0 1,675 3,630 2015 212,187 147,650 40,905 23,632 0 0 1,675 3,630 2016 =. 214,946 147,650 40,905 26,390 0 0 1,675 3,630 2017). 217,740 = 147,650 40,905 29,185 0 0 1,675 3,630 2018 = =220,571 ~=—:147,650 40,905 32,015 0 0 1,675 3,630 2019 223,438 147,650 40,905 34,883 0 0 1,675 3,630 2020 226,343 147,650 40,905 37,787 0 0 1,675 3,630 2021 229,285 147,650 40,905 40,730 0 0 1,675 3,630 2022 =. 232,266 »=—:147,650 40,905 43,711 0 0 0 3,630 2023 235,285 147,650 40,905 46,730 0 0 i) 3,630 2024 =. 238,344 147,650 40,905 49,789 0 0 0 3,630 2025 241,442 —-147,650 40,905 52,887 0 0 0 3,630 2026 «= 244,581 147,650 40,905 56,026 0 0 0 3,630 2027 = 247,761 =—:147,650 40,905 59,206 0 0 0 0 2028 =. 250,982 147,650 40,905 59,614 0 2,813 0 0 Net Present Value 9,518 24,169 Real 1994 Levelized Cost 369 937 EES Analysis for HDR Engineers Inc. Resource Cost Model Swan / Tyee Lakes Intertie Project, Mahoney Lake Hydro Project, Diesel Melded Rate 2.6 cents per kWh 1994$ 0.0% nominal per year 4.0% nominal per year KPU's Wholesale Rate 4.0 cents per kWh 1994$ 2.6 cents per kWh 1994$ 4.0% nominal per year ISER Load Growth Scenario - KPC Surplus Sales - KPC Surplus Energy Rate Maximum KPC Purchase Project energized date Fixed O&M cost New Diesel Capital Cost New Diesel Overhead Diesel fixed O&M cost Diesel variable O&M cost Diesel fuel in 1997 KPU diesel fuel consumption 3.8 cents per kWh in $1994 0 MWhrs 1999 year $200,000 per year 1995$ $1,000 per kW in $1992 $75,000 per year 1992$ $12.50 per kW in $1992 1 cents per kWh in $1992 $1. per gallon in $1997 14 kWh per gallon 2 1 0 0 Existing = New Intertie Mahoney Mahoney Tyee Diesel Diesel Purchase Diesel Purchase Purchase Market Grant New Diesel Total Interie O&M O&M Power Fuel Power Power KPC Sales Total Total ($000s) —($000s) (5000s) ($0008) ($0008) ($0008) ($0008) ($0008) ($0008) (cent/kWh) ($0008) ($000s) ($0008) (centa/kWh) 0 0 0 0 0 0 0 0 0 72 1,852 O 1,852 712 0 0 0 0 0 0 0 0 0 73 2,040 0 2,040 713 0 0 0 0 0 0 0 i} 0 14 2,214 0 2,214 14 0 0 0 0 0 0 0 0 0 7.6 2,358 0 2,358 716 tt} 0 0 0 0 0 0 0 0 17 2,501 0 2,501 17 0 0 0 0 0 0 0 0 0 718 2,678 0 2,678 718 0 0 0 0 0 0 0 0 0 8.0 2,907 0 2,907 8.0 0 0 0 0 0 0 0 0 0 8.2 3,178 0 3,178 8.2 2,894 0 0 8,199 320 0 0 719 0 8.3 3,407 0 12,006 28.7 2,894 0 0 8,199 333 0 0 348 0 8.5 3,478 0 12,359 274 2,894 0 0 8,199 346 0 0 623 0 8.7 3,552 0 12,720 264 2,894 0 0 8,199 360 0 0 888 0 89 3,628 0 13,076 25.5 2,894 0 0 8,199 375 0 0 1,126 0 91 3,708 0 13,408 24.9 2,894 0 0 8,199 390 0 0 1,375 0 9.3 3,791 0 13,755 24.4 2,894 0 0 8,199 405 i} 0 1,636 0 9.5 3,877 O 14,118 23.9 2,894 0 0 8,199 421 0 0 1,910 0 9.7 3,967 0 14,497 23.5 2,894 0 0 8,199 438 0 0 2,198 0 99 4,060 0 14,896 23.1 2,894 0 0 8,199 456 0 i} 2,501 0 10.2 4,157 0 15,313 22.8 2,894 0 0 8,199 474 0 0 2,821 0 10.4 4,258 O 15,752 22.5 2,894 0 0 8,199 493 0 0 3,158 0 10.7 4,362 O 16,213 22.2 2,894 0 0 8,199 513 0 0 3,514 0 10.9 4471 0 16,698 22.0 2,894 0 0 8,199 533 0 0 3,891 0 11.2 4,585 0 17,208 21.9 2,894 0 0 8,199 554 0 0 4,289 0 15 4,703 0 17,746 217 2,894 0 0 6,524 577 0 0 4,711 0 Ws 4,825 0 16,637 19.7 2,894 0 0 6,524 600 0 0 5,158 0 12.1 4,953 0 17,235 19.7 2,894 0 0 6,524 624 0 0 5,632 0 12.4 5,086 0 17,866 19.7 2,894 0 0 6,524 649 0 0 6,135 0 12.8 5,224 0 18,532 19.8 2,894 0 0 6,524 675 0 0 6,669 0 13.1 5,367 0 19,235 19.8 2,894 0 O 2,894 702 0 0 7,235 0 13.5 5,516 0 16,347 16.3 2,894 0 1,672 4,566 730 0 386 7,508 912 13.9 5,672 0 19,773 19.1 20,170 0 253 54,110 3,150 0 58 17,351 138 17 43,480 0 118,287 211 782 0 10 2,098 122 0 2 673 5 45 1,686 0 4,586 8.2 12/14/94 EES Analysis for HDR Engineers Inc. Resource Cost Model Swan / Tyee Lakes Intertie Project, Mahoney Lake Hydro Project, Diesel ISER Load Growth Scenario - Medium or Base Capital Cost $67.6 million 1997$ Intertie Energy Cost at Melded Rate KPC Surplus Sales - No Capital Cost $55.6 million 1992$ Variable Purchase Power Rate 2.6 cents per kWh 1994$ Intertie Project Life 30 years Fixed Purchase Power Rate Esc 0.0% nominal per year KPC Surplus Energy Rate 3.8 cents per kWh in $1994 Inflation Real Discount 4.0% per year 2.40% per year Variable Purchase Power Rate Esc 4.0% nominal per year Maximum KPC Purchase Project energized date 0 MWhrs 1999 year State loan tenn 15 years Fixed O&M cost $200,000 per year 1995$ State loan rate 3.0% per year Mahoney Power Purchase - New Diesel Capital Cost $1,000 per kW in $1992 State Bond term 20 years New Diesel Overhead $75,000 per year 1992$ State Bond Rate 6.5% per year KPU Purchasing Power @ KPU's Wholesale Rate Diesel fixed O&M cost $12.50 per kW in $1992 Market bond tenn 30 years Four Dam Pool Fixed Wholesale Rate 4.0 cents per kWh 1994$ Diesel variable O&M cost 1 cents per kWh in $1992 Market bond rate 8.0% per year Four Dam Pool Variable Wholesale Rate 2.6 cents per kWh 1994$ Diesel fuel in 1997 $1 per gallon in $1997 State Grant $0.0 million per year Four Dam Pool Variable Wholesale Rate Esc. 4.0% nominal per year KPU diesel fuel consumption 14 kWh per gallon 2 1 0 Switch 0 2 2 0 Existing New — Intertie Mahoney Mahoney KPU Existing Tyee Diesel Diesel Purchase Diesel Purchase Purchase Energy Resource Tyee Mahoney Existing New State State Market Grant NewDiesel Total Intetie O&M O&M Power Fuel Power = Power KPC Sales Total Total (MWh) (MWh) (MWh) (MWh) (MWh) (MWh) ($000s) ($0008) (5000s) ($0008) ($0008) ($000s) ($000) ($0008) (000s) ($0008) ($0008) (cents/kWh) —($000s) ($0008) ($0008) | (cents/kWh) 1999 173,503 147,650 25,853 0 0 0 1,675 3,630 679 0 0 5,985 234 0 0 1,678 0 72 0 0 7,897 30.5 2000 175,631 = 147,650 27,981 0 0 0 1,675 3,630 679 0 0 5,985 243 0 0 1,839 0 73 0 0 8,067 28.8 2001 177,486 147,650 29,836 0 0 0 1,675 3,630 679 0 0 5,985 253 0 0 1,989 0 14 0 0 8,226 276 2002 178,850 147,650 31,200 0 0 0 1,675 3,630 679 0 0 5,985 263 0 0 2,114 0 76 0 0 8,362 26.8 2003 180,127 147,650 32,477 0 0 0 1,675 3,630 679 0 0 5,985 274 0 0 2,238 0 eel, 0 0 8,496 26.2 2004 181,768 147,650 34,118 0 0 0 1,675 3,630 679 0 0 5,985 285 0 0 2,391 tt} 718 0 0 8,660 25.4 2005 183,978 147,650 36,328 0 0 0 1,675 3,630 679 0 0 5,985 296 0 0 2,586 0 80 0 0 8,867 244 2006 186,583 147,650 38,933 0 0 0 1,675 3,630 679 0 0 5,985 308 0 0 2,815 0 8.2 0 0 9,107 23.4 2007 189,512 147,650 41,862 0 0 i} 1,675 3,630 679 0 0 5,985 320 0 0 3,074 i} 83 0 0 9,379 224 2008 192,714 147,650 45,064 tt} 0 O 1,675 3,630 679 0 0 5,985 333 0 0 3,362 0 B85 0 0 9,680 21.5 2009 195,911 147,650 48,261 0 0 0 1,675 3,630 679 0 0 5,985 346 0 0 3,662 0 87 0 0 9,993 20.7 2010 198,917 147,650 51,267 0 0 0 1,675 3,630 679 0 0 5,985 360 0 0 3,961 0 89 0 0 10,306 20.1 2011 201,503 147,650 = 53,853 0 0 0 1,675 3,630 679 0 0 5,985 375 0 0 4,244 0 oO. 0 0 10,603 19.7 2012 204,122, 147,650 56,472 0 0 0 1,675 3,630 679 0 0 5,985 390 0 0 4,542 0 93 0 0 10,916 19.3 2013, 206,776 =—147,650 59,126 Qo 0 0 1,675 3,630 679 0 0 5,985 405 0 0 4,857 0 9.5 0 O 11,246 19.0 2014 209,464 147,650 61,814 0 0 0 0 3,630 679 0 0 4,309 421 0 0 5,189 0 97 0 0 9,920 16.0 2015 212,187 147,650 64,537 0 0 0 0 3,630 679 0 0 4,309 438 0 0 5,540 0 9.9 0 O 10,288 15.9 2016 214,946 147,650 67,296 0 0 0 0 3,630 679 0 0 4,309 456 0 0 5,911 0 10.2 0 0 10,676 15.9 2017 = .217,740 = 147,650 70,090 0 0 0 0 3,630 679 0 0 4,309 474 0 0 6,303 0 10.4 0 0 11,087 15.8 2018 220,571 147,650 70,568 2,353 0 0 0 3,630 679 0 0 4,309 493 0 0 6,523 0 10.7 251 O 11,576 15.9 2019 = 223,438 =—-147,650 69,546 6,242 0 0 0 0 679 0 0 679 513 0 0 6,623 0 10.9 682 0 8497 11.2 2020 = 226,343 »=-147,650 68,509 10,184 0 0 0 0 679 0 0 679 533 0 0 6,723 0 11.2 1141 0 9,077 1S 2021 229,285 147,650 67,455 14,180 0 0 0 0 679 0 0 679 554 0 0 6,824 0 11.5 1,630 0 9,688 119 2022 232,266 = 147,650 66,386 18,230 0 0 0 0 679 0 0 679 577 0 0 6,924 0 11.8 2,151 O 10,331 12.2 2023 235,285 = 147,650 65,300 22,335 0 0 0 0 679 0 0 679 600 0 0 7,024 0 12.1 2,704 0 11,008 12.6 2024 = 238,344 147,650 64,197 26,497 0 0 0 0 679 0 0 679 624 0 0 7,124 0 12.4 3,294 O 11,721 12.9 2025 241,442 147,650 63,077 30,715 0 0 0 0 679 0 0 679 649 0 0 7,222 i} 12.8 3,922 O 12,472 13.3 2026 =. 244,581 147,650 61,940 34,991 0 0 0 0 6719 0 0 679 675 0 0 7,319 0 13.1 4,591 O 13,264 13.7 2027 =. 247,761 = 147,650 60,786 39,325 0 0 0 0 679 0 0 679 702 0 0 7,415 0 13.5 5,303 0 14,099 M4 2028 = 250,982 147,650 59,614 40,905 0 2,813 0 0 679 0 1,672 2,351 730 0 386 7,508 912 13.9 5,672 0 17,558 17.0 Net Present Value 15,753 40,000 8,869 0 253 64,874 4,770 0 58 49,765 138 117 5,812 0 125,417 284 Real 1994 Levelized Cost oll 1,551 344 0 10 2,515 185 0 2 1,929 5 4.5 225 0 4,862 11.0 12/14/94 Capital Cost $67.6 million 1997$ Intertie Energy Cost at Capital Cost $55.6 million 1992$ Variable Purchase Power Rate Intertie Project Life 30 years Fixed Purchase Power Rate Esc Inflation 4.0% per year Variable Purchase Power Rate Esc Real Discount 2.40% per year State loan term 1S years State loan rate 3.0% per year Mahoney Power Purchase - State Bond term 20 years State Bond Rate 6.5% per year KPU Purchasing Power @ Market bond tenn 30 years Four Dam Pool Fixed Wholesale Rate Market bond rate 8.0% per year Four Dam Pool Variable Wholesale Rate State Grant $0.0 million per year Four Dain Pool Variable Wholesale Rate Esc. Switch 0 2 KPU Existing Energy Resource Mahoney Existing Tyee New State State (MWh) (MWh) (MWh) (Miwa) (MWh) (MWh) ($0008) (5000s) 1999 173,503 147,650 25,853 0 0 0 0 0 2000 «175,631 =—-147,650 27,981 0 0 0 0 0 2001 177,486 = 147,650 29,836 0 0 0 0 0 2002 178,850 147,650 31,200 0 0 0 0 0 2003 180,127 147,650 32,477 0 0 0 0 0 2004 181,768 147,650 34,118 0 ct} 0 0 0 2005 183,978 147,650 36,328 0 0 0 0 0 2006 186,583 147,650 38,933 0 0 0 0 0 2007 189,512 147,650 40,905 0 0 957 0 0 2008 192,714 147,650 40,905 0 0 4,159 0 0 2009 195,911 147,650 40,905 0 0 7,356 0 0 2010 198,917 147,650 40,905 0 0 10,362 0 0 2011 201,503 147,650 40,905 0 0 12,948 0 0 2012 204,122, 147,650 40,905 0 0 15,567 0 0 2013, 206,776 = 147,650 40,905 0 0 18,221 0 0 2014 209464 = 147,650 40,905 0 0 20,909 0 0 2015 212,187 147,650 40,905 0 0 23,632 0 0 2016 = 214,946 147,650 40,905 0 0 26,390 0 0 2017 217,740 = :147,650 40,905 0 0 29,185 0 0 2018 = 220,571 147,650 40,905 0 0 32,015 0 0 2019 = 223,438 = 147,650 40,905 0 0 34,883 0 0 2020 = 226,343 147,650 40,905 0 0 37,787 0 0 2021 229,285 147,650 40,905 0 0 40,730 0 0 2022. © -232,266 »=—:147,650 40,905 0 0 43,711 0 0 2023 = 235,285 147,650 40,905 0 0 46,730 0 0 2024 = 238,344 147,650 40,905 0 0 49,789 0 0 2025 241,442 147,650 40,905 0 0 52,887 0 0 2026 = 244,581 147,650 40,905 0 0 56,026 0 0 2027. 247,761 =—-:147,650 40,905 0 0 59,206 0 0 2028 = 250,982 147,650 40,905 0 0 62,426 0 0 Net Present Value 0 0 Real 1994 Levelized Cost 0 0 EES Analysis for HDR Engineers Inc. Resource Cost Model Swan / Tyee Lakes Intertie Project, Mahoney Lake Hydro Project, Diesel Melded Rate 2.6 cents per kWh 1994$ 0.0% nominal per year 4.0% nominal per year KPU's Wholesale Rate 4.0 cents per KWh 1994$ 2.6 cents per kWh 1994$ 4.0% nominal per year ISER Load Growth Scenario - KPC Surplus Sales - KPC Surplus Energy Rate Maximum KPC Purchase Project energized date Fixed O&M cost New Diesel Capital Cost New Diesel Overhead Diesel fixed O&M cost Diesel variable O&M cost Diesel fuel in 1997 KPU diesel fuel consumption Medium or Base No 3.8 cents per kWh in $1994 0 MWhrs 1999 year $200,000 per year 1995$ $1,000 per kW in $1992 $75,000 per year 1992$ $12.50 per kW in $1992 1 cents per kWh in $1992 $1 per gallon in $1997 14 kWh per gallon 2 1 0 0 Existing New Intertie Mahoney Mahoney Tyee Diesel Diesel Purchase Diesel Purchase Purchase Market Grant New Diesel Total Intertie O&M O&M Power Fuel — Power Power KPC Sales ($0008) (5000s) ($0008) (5000s) ($000s) ($0008) ($0008) ($0008) ($0008) (cenwkWh) ($0008) ($000s) 0 0 0 0 0 0 0 0 0 12 1,852 0 0 0 0 0 0 0 0 0 0 13 2,040 0 0 0 0 0 0 0 0 0 0 74 2,214 0 0 0 0 0 0 0 0 0 0 76 2,358 0 0 0 0 0 0 0 0 0 0 17 2,501 0 0 0 0 0 0 0 0 0 0 718 2,678 0 0 0 0 0 0 0 0 0 0 8.0 2,907 oO 0 0 0 0 0 0 0 0 0 8.2 3,178 0 0 0 734.0 «734 0 0 195 0 Mt 8.3 3,407 0 0 0 734 734 0 0 232 Q 508 8.5 3,478 0 0 0 4 734 0 0 270 0 944 8.7 3,552 0 0 0 73400 734 0 0 306 0 1,396 89 3,628 0 0 0 734 (734 0 0 337 0 1,831 o1 3,708 0 0 0 734-734 0 0 370 0 2,312 93 3,791 0 0 0 4 734 0 0 403 0 2,841 95 3,877 0 0 0 73400 734 0 Oo 437 0 3,423 97 3,967 0 0 0 7340 «734 0 0 471 0 4,062 99 4,060 0 0 0 1,778 1,778 0 0 556 0 4,763 10.2 4,157 0 0 0 1,778 1,778 0 0 592 0 5,531 10.4 4,258 0 0 0 1,778 1,778 0 0 628 0 6,371 10.7 4,362 0 0 0 1,778 1,778 0 0 665 0 7,289 10.9 4,471 0 0 0 1,778 = 1,778 0 0 703 0 8,290 11.2 4,585 0 0 0 1,778 1,778 0 0 741 0 9,383 ILS 4,703 0 0 0 1,778 1,778 0 0 780 0 10,573 11.8 4,825 0 0 0 1,778 1,778 0 0 820 0 11,868 12.1 4,953 0 0 0 3,207 3,207 0 0 91 0 13,277 12.4 5,086 0 0 0 3,207 3,207 0 0 953 0 14,809 12.8 5,224 0 0 0 3,207 3,207 0 0 995 0 16,472 13.1 5,367 0 o 0 2,474 2,474 0 0 1,038 0 18,277 13.5 5,516 0 0 0 2,474 2,474 0 0 1,082 0 20,235 13.9 5,672 0 0 0 9,194 9,194 0 0 3,550 0 37,112 117 43,480 0 0 0 356 356 0 0 138 0 1,439 45 1,686 0 Total Total Cost Cost ($0008) (cent Wh) 1,852 72 2,040 73 2,214 14 2,358 716 2,501 17 2,678 78 2,907 8.0 3,178 8.2 4,447 10.6 4,952 11.0 5,499 4 6,063 11.8 6,610 12.3 7,206 12.8 7,855 13.3 8,560 13.8 9,327 14.5 11,254 16.7 12,158 17.3 13,139 18.0 14,203 18.7 15,356 19.5 16,605 20.3 17,957 21.2 19,420 22.2 22,481 24.8 24,192 25.8 26,041 26.9 27,305 27.3 29,462 28.5 93,336 158 3,618 6.1 12/14/94 Mahoney Hydroelectric Project Lifetime Economic Summary All cost assumptions stated in 1998 dollars Investment cost $28,521 O&M $280 Bond revenue 2866 Administration 70 Financing 807 Insurance 57 Working capital 70 Interim replace 57 Total capital $32,264 Total variable costs $464 Bond rate 7.0 percent per year ~ Bond term 30 years Inflation rate 4.0 percent per year Real discount rate 2.9 percent per year Energy Debt Variable Project Total Total Year Qutput Service Costs Margin Cost Cost (MWh) (000s) (000s) (000s) (000s) (cents/kWh) 1999 40.905 $2,600 $483 $462 $3,545 8.7 2000 40,905 2.600 502 465 3.567 8.7 2001 40,905 2,600 522 468 3.590 8.8 2002 40,905 2,600 543 471 3,614 8.8 2003 40,905 2,600 565 475 3.639 8.9 2004 40,905 2,600 587 478 3.665 9.0 2005 40.905 2,600 611 482 3,692 9.0 2006 40,905 2,600 635 485 3,720 9.1 2007 40,905 2,600 660 489 3,750 9.2 2008 40,905 2,600 687 493 3,780 9.2 2009 40,905 2,600 714 497 3.811 9.3 2010 40,905 2,600 743 501 3,844 9.4 2011 40,905 2,600 a3 506 3,879 9.5 2012 40,905 2,600 803 511 3,914 9.6 2013 40,905 2,600 836 515 3,951 9.7 2014 40,905 2,600 869 520 3,989 9.8 2015 40,905 2,600 904 526 4,029 9.9 2016 40,905 2,600 940 531 4,071 10.0 2017 40,905 2,600 978 537 4.114 10.1 2018 40,905 2,600 1,017 543 4.159 10.2 2019 40,905 2,600 1,057 549 4,206 10.3 2020 40,905 2,600 1,100 555 4,255 10.4 2021 40,905 2,600 1,144 562 4,305 10.5 2022 40,905 2,600 1,189 568 4,358 10.7 2023 40,905 2,600 1,237 576 4.413 10.8 2024 40,905 2,600 1,286 583 4,469 10.9 2025 40,905 2,600 1,338 591 4,529 11.1 2026 40,905 2,600 1,391 599 4,590 11.2 2027 = 40,905 2,600 1,447 607 4,654 11.4 2028 40,905 2,600 1,505 616 4,721 11.5 Net present value $47,720 $117 Real levelized cost in 1994 dollars 2,398 5.1 12/08/94 05:31 PM CGK