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HomeMy WebLinkAboutKake Petersburg Interim Report 1982 Kake-Petersburg Intertie INTERIM REPORT EBASCO EBASCO SERVICES INCORPORATED October, 1982 INTERIM REPORT KAKE-PETERSBURG INTERTIE TRANSMISSION LINE ° qv > » & Sean mit & tt vob OOK A\ | Kepov EBASCO SERVICES INCORPORATED BELLEWE, WASHINGTON 98006 WITH ALAKSA ECONOMICS, INC. JUNEAU, ALASKA AND POLARCONSULT, INC. ANCHORAGE, ALASKA SUBMITTED OCTOBER, 1982 SUMMARY Ebasco Services Incorporated has undertaken an evaluation of alternative means for meeting the electricity requirements for Kake, Alaska. The form of this analysis includes analyzing the demand for electricty in Kake, describing the range of alternatives potentially applicable for meeting that demand, and the analyzing the most appropriate alternatives by benefit/cost ratio techniques. The analysis was undertaken to determine the economic merits of Constructing a transmission line from Petersburg to Kake. This determination was made by comparing the transmission line to the Current practice of supplying power by diesel generation, and by comparing other supply options to diesel power. For purposes of planning the electricity requirements of Kake are defined as follows: Total Consumption Base Load Peak Load Year (kWh) (kW) (kW) 1981 1,525,500 103 475 1990 2,434,700 nca/ nea! 2000 3,185,130 nca/ nea! 2005 3,711,800 247 1140 They were calculated assuming electricity prices of 20¢-36¢/kWh (1982 dollars). At that price level electricity is not used to meet heat requirenents. The options studied in terms of meeting that requirement included the following opportunities: a/ Not calculated. 1740B ji 1) Continuation of diesel electric generation, 2) Replacement of diesel units with combustion turbines, 3) Construction of the Kake-Petersburg transmission line intertie, 4) Construction of the Cathedral Falls hydroelectric project, 5) Construction of the Gunnuk Creek hydroelectric project, 6) Construction of a wood fired generating unit, 7) Installation of wind turbines, 8) Weatherization of buildings, 9) Insulation of buildings 10) Passive solar space heating, 11) Passive solar water heating, 12) Fuel oil furnaces, 13) Heat pumps, and 14) Household wood furnaces. Of these potential options the following proved sufficiently promising that they were subjected to benefit/cost (B/C) analysis: diesel electric transmission line Cathedral Falls Wood fired power generation. Of the others, combustion turbines provided to be both capital intensive and inefficient when compared to diesel. Gunnuk Creek offered insufficient power potential to be a realistic alternative to diesel. Wind power appeared to have insufficient reliability based on the data at hand. Weatherization, insulation, solar heating, oi] furnaces, heat pumps, and wood furnaces appeared to have no influence On electrical demand. Benefit/cost (B/C) ratios were constructed assuming the Alaska Power Authority methodol ogy / Assumptions used in this analysis included: 1/ See memo from R. Mohn to Engineering Staff regarding Economic Analysis, 7/1/82, for detailed assumptions. iii 1) A leveling of electricity demand after 20 years; 2) Adiscount rate of 3.5% (real); 3) An inflation rate of 0%; 4) A fossil fuel price escalation rate of 2.5% (real) for 20 years, and 0% thereafter; 5) A planning period of 53 years based upon Cathedral Falls; and 6) Various facility investment lives, per APA schedule. Given these assumptions, and the data developed in the system studies, present worth of cost (PHC) values were calculated for each systen. They are as follows: Diesel: $13.7 millon Transmission Line: $13.4 million Cathedral Falls: $14.9 million Wood Fired Plant: $17.2 million Calculation of the B/C ratios was perfomed using the following formula: PWC Diese1/PWC Alternative = B/C On this basis preliminary B/C ratios are as follows: Diesel = 1.0 Transmission Line = 1.02 Cathedral Falls = 0.93 Wood Fired Unit= 0.81 On this basis there is no real, clear, differentiation between the options. The B/C ratios for diesel, transmission line, and hydroelectric power are all essentially 1. Several factors could alter this outcome including: 1) electricity consumption over time, 2) fuel Cost, 3) fuel price escalation rate and period, and 4) discount rate. iv TABLE OF CONTENTS Page 1.0 INTRODUCTION. . 2... 22 ee wee ee ee ew ee ew ee 1-7 2.0 THE PROJECTED CONSUMPTION OF ENERGY AND ELECTRICITY IN KAKE, ALASKA .. 2.2.2.2 2 ee ee eee 2-1 2.1 CONSUMPTION ESTIMATES... 2... 2.22 eee eee 2-2 2.2 THE PLANNING ESTIMATES . 2... 2.22 eee eevee 2-2 2.3 ALTERNATIVE CONSUMPTION FORECASTS ......... 2-7 2.4 CONCLUSION . 2... 2.2. 2.2 ee ww ee eee eee 2-9 3.0 THE OPTIONS AVAILABLE FOR KAKE, ALASKA. ........ 3-1 3.1 DIESEL POWER GENERATION (BASE CASE) ........ 3-2 3.1.1 Existing Diesel System... ....2.2... 3-2 3.1.2 Future Diesel System. ......2e 222+. 3-6 3.1.3 Future Diesel Systen Functional Description 3-7 3.1.4 Future Diesel System Costs. .......2. 3-8 3.1.5 Conclusions .......2 22 ee eee -- 3-8 3.2 COMBUSTION TURBINE POWER GENERATION... ..... 3-12 3.2.1 Cost Data .. 2. 2 ee eee we ee ee ee) 318 3.2.2 Conclusions . 2... 2.22 ee eee eee 3-18 3.3. THE TRANSMISSION LINE OPTION .......2.2.2-64-4 3415 3.3.1 Line Voltage... 2... 2.2. 2 ee eee ee = 3-18 3.3.2 Line Design . 2... 2. eee ee ww nee 3-19. 3.3.3 Line Route... 2... 22 2 ee ee ee ee) 63-22 3.3.4 Costs . 2.2. 2.2. 2 eee ee eee we we we )~=63-28 3.3.5 Conclusion... 2... 2.222 ee eee ee 3429 3.4 THE HYDROELECTRIC POWER OPTION .........-.4 3-30 3.4.1 Cathedral Falls . 2... 2. 2 2 ee eee es 3-3) 3.4.2 Gunnuk Creek... 2... 2.2 eee eee ee 3-40 3.5 THE WOOD FIRED OPTION. .... 2.2.2.2 eee eee 3-51 3.5.1 Biomass Availability ............ 3-53 3.5.2 Fuel Costs... 2. 2 2 ee eee eee ew ee) 3455 3.5.3 Sizing of the Biomass Facility. ...... 3-55 3.5.4 Conceptual Design . ~~... 2.2 eee ~~ 3-56 3.5.5 Material and Energy Balance ........ 3-641 3.5.6 Environmental Impacts .........-e. 3-64 3.5.7 Cost Estimate . 2... 22 eee ee ee ee 3-67 4.0 3.6 WIND GENERATION OPTION 3.6.1 3.6 Resource Consideration. . -6.2 Siting Considerations 3.6.3 Technology Considerations 3.6.4 Conclusions oe ee ee ee 3.7 NON ELECTRICAL ALTERNATIVES. .... 3.8 CONCLUSION BENEFIT/COST ANALYSIS OF THE KAKE, ee © © © ee we ew ew ee ELECTRICITY SUPPLY OPTIONS... . 4.1 ASSUMPTIONS FOR ANALYSIS 4.2 BENEFIT/COST RATIOS... 4.3 COST OF POWER ANALYSIS . 4.4 CONCLUSION vi ee ee ALASKA TABLE OF CONTENTS (Continued) oe ee oe ee Table No. 2-1 2-2 3-1 3-2 3-3 3-4 3-5 3-6 3-7 3-8 3-9 3-10 3-11 3-12 3-13 3-14 3-15 3-16 3-17 3-18 LIST OF TABLES Title Kake Energy Consumption Surmary Kake Residential Energy Forecast Equipment List for Diesel Plant Capital Cost Estimate, Diesel Combustion Turbine Generator Specifications Capital Cost of the Combustion Turbine System Comparison of Diesel and Combustion Turbine Systems Cathedral Falls Hydro Project Significant Data Cathedral Falls Hydro Project Cost Estimate Sunnary Cathedral Falls Hydro Project Energy Generation and Utilization Surmary Distribution of Hydroelectric and Diesel Electric Power Generation for the Cathedral Falls Project Gunnuk Creek Hydro Project Significant Data Gunnuk Creek Hydro Project Cost Estimate Summa ry Di stribution of Hydroelectric and Diesel Electric Power Generation for the Gunnuk Creek Project Wood Fuel Availability in the Vicinity of Kake Operating Assumptions for the Heat Balance of the Condensing Power Pl ant Emission Rates of Air Pollutants Net Emission Change Captial Cost Estimate for a 1500 Kw Wood Fired Power Plant Wind Power Classes and Their Relationship to Kake, Alaska vii Page 2-3 2-4 3-9 3-11 3-13 3-16 3-17 3-34 3-39 3-4] 3-42 3-46 3-50 3-52 3-54 3-62 3-65 3-66 3-68 3-72 Table No. 3-19 3-20 3-21 4-1 4-2 4-3 4-4 4-5 LIST OF TABLES (continued) Title Wind Power at Nominal Tower Heights Nominal kW Capacities for Rotor Diameters Medium Sized Wind Turbine Capacities General Assumptions for Benefit-Cost Analysis Summary of Alternatives - Specific Assumptions and Values Alternative Investment Schedules by Project The Present Worth of Costs for Electricity Supply Options for Kake, Alaska Benefit Cost Ratio of the Electricity Supply Options for Kake, Alaska viii Page 3-77 3-78 3-80 4-4 4-5 4-7 LIST OF FIGURES Figure No. Title 3-1 3-2 3-3 3-4 3-5 3-6 3-7 3-88 3-8C 3-8D 3-10 3-11 3-12 3-13 3-14 3-15 3-16 3-17 An Overall View of the Diesel Generator Sets in the Kake Powerhouse A Close Up View of a 300 kW Diesel Generator Set in the Kake Powerhouse Diesel Generator Building Arrangement Combustion Turbine Layout Standard 3-Phase Line Right-of-Way and Crossam Detail 24.9 kV Overhead Cable and Right-of-Way and Blue Detail Transmission Line Route Route Alignment Strip Map A Route Alignment Strip Map B Route Alignment Strip Map C Route Alignment Strip Map D Cathedral Falls Hydroelectric Project Alternative Project Arrangement Cathedral Falls Hydroelectric Project Alternative Hydraulic Data Cathedral Falls Hydroelectric Project Alternative Dam, Power Conduit and Powerhouse Details Gunnuk Creek Hydroelectric Project Alternative Project Arrangenent Gunnuk Creek Hydroelectric Project Alternative Dam and Powerhouse Arrangenent Gunnuk Creek Hydroelectric Project Alternative Hydraulic Data General Facility Layout of Wood Fired Power Plant Schematic Diagram of Material Flow of the Wood Fired Power Plant Material and Energy Balance About Wood Fired Power Plant ix 3-4 3-10 3-14 3-20 3-2] 3-23 3-24 3-25 3-26 3-27 3-32 3-33 3-36 3-44 3-45 3-48 3-58 3-59 3-63 LIST OF FIGURES (continued) Figure No. Title Page 3-18 Possible Wind Generation Sites Adjacent to Kake 3-75 4-1 Present Worth of Costs and Timing Study Cost of Diesel Power for Kake, Alaska 4-9 4-2 Present Worth of Costs and Timing Study Cost of Transmission Line Power for Kake, Alaska 4-10 4-3 Present Worth of Costs and Timing Study Cost of Cathedral Falls Hydroelectric Power for Kake, Alaska 4-11 4-4 Present Worth of Costs and Timing Study Cost of Hydroelectric Supporting Diesel Power for Kake, Alaska 4-12 4-5 Present Worth of Costs and Timing Study Cost of Electricity from Wood Fired Plant in Kake, Alaska 4-13 KAKE-PETERSBURG INTERIM REPORT 1.0 INTRODUCTION This interim report is the first of four reports being prepared by Ebasco Services Incorporated to examine the feasibility of constructing a transmission line from the Petersburg area to Kake. This line is being considered because it could provide hydroelectric power to Kake and relieve that comunity of dependence on costly diesel fuel. The Kake-Petersburg line would transmit power produced by the Tyee Lake hydroelectric project currently under construction southeast of Wrangell. The line to Kake, however, would originate at Petersburg as there is currently a 138/69 kV transmission line being constructed fron the Tyee project site to Petersburg. An integral part of the assessment of the feasibility of such a project, jis a complete analysis of the full range of alternatives available to serve Kake's future energy sources. Such an analysis, in turn, requires a forecast of future consumption. In light of these two considerations, this interim report is intended to present a brief description of Kake's future energy needs (a more detailed summary of the electricity forecast is presented in a separate report by Alaska Economic st’, which is included in Appendix A of this Interim Report) and to present findings related to the alternatives that are being considered in this detailed feasibility study. Another important purpose of this interim report is to present preliminary findings regarding the ranking of alternatives available to meet Kake's future needs. Presenting these preliminary rankings in the V/ this report was prepared by Alaska Economics Inc. under a subcontract to Ebasco Services Incorporated as a part of the Kake-Petersburg Intertie Detailed Feasibility Report. 2778A 1-1 interim report serves to advise the Alaska Power Authority (Authority) Personnel of the conclusions likely to be found in the Final Feasibility Report. Thus, reviewers of this report are encouraged to provide Comments to Ebasco Services Incorporated so that this interim report can serve the dual purpose of describing the alternatives for meeting Kake's future needs and presenting preliminary findings related to conclusions anticipated in the Final Feasibility Report. As indicated above, this is the first of four reports to be prepared on this project. The second report, which will be released concurrently with this one, will be the Routing and Enviroment Report. The Routing and Enviroment report explains why the southern corridor was selected for the transmission line from Kake to Petersburg and presents the transmission line route selected within this corridor. A third report, the Transmission Line Cost and Engineering Report presents a detailed description of the transmission line alternative including its cost. Because this report will be forthcoming, only a brief description of the transmission line alternative is included in this interim report. The final project report, the detailed Feasibility Report, draws the infomation from the three earlier reports together and presents additional information which will aid the Authority in making its decision whether or not to proceed with any of the alternatives for providing Kake with the electricity it needs. In addition to the major findings in the three reports described above, a reconnaissance level study of providing electric service to Kupreanof and a financing plan for the selected alternative will be presented. Also, factors related to the timing of potential development of the various alternatives will be presented so that the decision-makers can assess which alternatives they should proceed with and also identify the implications of either delaying or expediting development of any of the alternatives. There are several factors to consider in reviewing this report. First, this report which draws a wide range of topics together necessarily Presents information at various level of details in different areas. In 1-2 general, this report presents the most detailed information for alternatives that are most relevant for meeting Kake's future electrical energy needs. For example, non-electrical energy applications are not well-suited for meeting the need of Kake, as thermal and electrical needs are not coincidental. These needs are met independently, by separate and distinct energy sources. Thus, the non-electrical energy systems are not treated to a major extent in this report. Such alternatives are analyzed in Polarconsult's Evaluation of Unconventional Energy Alternatives Report!/ prepared as a part of this feasibility study (this report will be an appendix of the Final Feasibility Report). Along with adopting a conservative approach, this report has been developed based on proven systems and known costs. As a result Manufacturers were contacted about specific pieces of equipment's suitability for given applications and their cost. Such information was used in this study and where used is appropriately cited in this report. Report reviewers, however, should not construe any discussion of a Particular manufacturer's product as an endorsement of that product or as a recommendation that it be used. Rather, any mention of specific Products should cannote that such equipment is available for the proposed application and that there is a firm basis for identifying its cost. In line with the above approach, all costs are calculated on an incremental basis. As a consequence the distribution system within Kake is taken as a given. No capital and operating costs in this area (including the cost of an electricity system manager) are considered in the individual alternative analyses. V/ This report was prepared by Polarconsult, Anchorage, under a subcontract to Ebasco Services Incorporated as a part of the Kake- Petersburg Intertie Detailed Feasibility Report. 1-3 2.0 THE PROJECTED CONSUMPTION OF ENERGY AND ELECTRICITY IN KAKE, ALASKA Assessing alternatives for meeting Kake's future energy needs requires a careful analysis of future energy consumption. Kake's future requirements (through 2005) are presented in detail in a separate report prepared by Alaska Economics entitled Economic and Energy Load Forecast, City of Kake, Alaska, which is included as Appendix A of this report. The highlights of Alaska Economic's forecast, particularly as they relate to the analysis of various supply alternatives, are presented below. The feasibility of constructing the Kake-Petersburg transmission line, or any other option to meet the electricity needs of Kake, depends in large measure on the demand for electrical energy. Consequently analyses were undertaken, forecasting the consumption of electricity through the year 2005. The consumption analyses were made recognizing the potential for consumers to switch between fuel and energy sources. Further, they were made recognizing the existence of one self-generator of power, the Kake Cold Storage plant. This self generator could dramatically increase electricity consumption of power to be provided by Tlingit and Haida Regional Electrical Authority (THREA), if it elected to stop generating its own power and purchase it from THREA. Such a change would likely occur if Kake Cold Storage's generating costs rose above those of the price THREA charged for its power. Current Kake Cold Storage generating costs are less than those used in this study's consumption analysis. These analyses were made assuming a cost of power of 20¢/kilowatt hour (kWh) at the low end, and 36¢/kWh at the high end (1982 dollars), consistent with Alaska Power Authority assumptions. Once the denand estimates were developed using the Alaska Economics forecast they became the basis for evaluating all of the options. These estimates established the size of systems required. 18308 Consequently, the estimates influenced capital, operating, maintenance, and fuel costs of systems. In many cases the estimates determined the relevance of evaluating any given option. 2.1 CONSUMPTION ESTIMATES In order to evaluate potential projects, four levels of demand were estimated. The basic differentiation between these scenarios is Presented below: 1) Estimate 1 - a modest rate of growth, including the Kake Cold Storage plant;2/ 2) Estimate 2 - a modest rate of growth, excluding the Kake Cold Storage plant (the planning estimate); 3) Estimate 3 - a low rate of growth, but inclding the Kake Cold Storage plant; and 4) Estimate 4 - a low rate of growth, and excluding the Kake Cold Storage plant. Of these scenarios, Estimate 2, the planning estimate has been chosen as the base case or planning estimate. As a consequence, it is discussed, in some detail, below. 2.2 THE PLANNING ESTIMATE Between the years 1981 and 2005 total Kake energy demand (all fuels) is projected to increase by 61.6 percent, and by 21.8 percent on a per Capita basis. The annual demand for electricity rises in the forecast from 2026 megawatt hours (MWh) in 1981 to 4612 MWh in the year 2005 when Kake Cold Storage requirements are included, a gain of 128 percent overall, and 71.6 percent on a per capita basis. These data are shown in Tables 2-1 and 2-2. For planning purposes, Kake Cold Storage is a/ The Kake Cold Storage Plant currently owns and operates its own diesel-electric generation system. 2-2 1981 ALL SOURCES (MMi us) RESID TAL 35658.98 COMM/GOVT 24375.27 MANUFACTURING 3912.13 ALL SECTORS 63946 .33 ELECTRICITY (oom) RESIDENTIAL 713.49 COMM/GOVT 651.36 MANUFACTURING 661.47 ALL SECTORS 2026.32 FUEL OIL (000'S GaLs) RESIDENTIAL - i 166.22 COMM/GOVT 158.38 MANUFACTURING 11.863 ALL SECTORS 336.43 BOTTLED Gas (000°s GALS) RESIDENTIAL 18.96 COMM/GOVT 1.49 MANUFACTURING 22 ALL SECTORS 20.66 woos) ‘conns) “RESIDENTIAL 600.00 COMM/GOVT 10.00 ALL SECTORS 610.00 EXCLUDES FUEL OIL USED FOR POWER GENERATION BY THREA AND THE KAKE COLD STOKAGE TABLE 2-1 KAKE ENERGY CONSUMPTION SUMMARY 1985 4437666 27945.51 5868.19 78190.36 1165.88 665.31 992.21 3023.40 206.03 178.68 17.75 402.46 27.67 1.68 +33 29.68 662.21 11.28 673.49 1990 48249.58 30149.82 6043.76 64443,17 1279.61 1011.90 1043.19 3334.70 223.99 190.66 17.75 432.61 30.29 1.79 35 32.43 115.99 12.05 728.08 1995 50708. 30 33159 .93 6219.33 90087 .56 1399.95 1228.16 1094.17 3722.28 235.35 207.11 17.75 460.21 32.77 1.95 36 35.08 733.91 13.08 746.99 2000 53713.96 35474.95 6394.90 95583.80 1532.79 1407.18 1195.15 4085.13 249.27 219.29 17.75 486.31 35.58 2.06 -38 38.02 760.28 13.85 714.12 2005 57320.61 39438.96 6570.46 103330.23 1679.13 1736.51 1196.18 4611.78 265.99 239.59 17.75 523.38 38.74 2.25 40 41.39 196.13 15.13 811.26 TABLE 2-2 KAKE RESIDENTIAL ENERGY FORECAST (MMBTU'S) 1981 1985 1990 1995 2000 2005 SPACE, HEATING FUEL OIL 18704..55 20644 08 22320.55 22879.38 23701.20 248 18.87 BOTTLED GAS 0:00 0:00 0:00 0.00 0.00 0:00 wooo 8550.00 9436.56 10202:90 10458. 35, 10834.01 1134490 ELECTRICITY 81.63 90.09 97.41 99.85 103.43 108.31 TOTAL. 27336 .18 30170.69 3262086 3343758 346 38.64 36272.09 WATER HEATING “FUEL OIL. 4253.74 7812.72 8617.81 9627.39 10727 .83 11920, 32 BOTTLED GAS 833.37 1530.63 1688. 36 1886. 16 2101.75 2335.38 wooo 0:00 0.00 0:00 0.00 0:00 0.00 ELECTRICITY 151.06 166.72 180.26 184.77 191.41 200.43 TOTAL 5238.17 9510.07 10486. 44 11698. 32 1302099 1456.13 LIGHTS & APPLIANCES FUEL OIL. 0.00 0.00 0.00 0.00 0.00 0.00 BOTTLED GAS 862.14 973.61 1052.68 1079.03 1117.79 1170.50 wooD 0.00 0.00 0.00 0.00 0.00 0.00 ELECTRICITY 2202.44 3722.29 4089.61 4493.37 4936.54 5422.08 TOTAL 3084.58 4695.90 5142.29 5572.40 6054.33 6592.59 TOTAL ALL USES FUEL OTL 22958.29 28456.76 30938. 36 32506.77 3442903 36739.19 BOTTLED GAS. 1715.52 2504.24 2741.08 2965.19 3219.54 3505.68 woop 8550.00 9436.56 10202.90 10458.35 10834.01 1134490 ELECTRICITY 2835.13 3979.10 4367.28 4777.99 5231.38 5730.83 GRAND TOTAL 35658.94 44376 .66 48249.58 50708. 30 53713.96 57320.81 removed from electrical demand, and the consumption estimates are 1525 MWh in 1981 and 3712 MWh in 2005. Using the reported 1981 peak to average load ratio for THREA, peak Kake electricity demand in the year 2005, is an estimated 2.04 megawatts (MW), of which only 1.14 MW will be required to serve the customers of the THREA. The remaining 900 kilowatts (kW) of peak capacity is projected to be self-supplied by Kake Cold Storage.2/ This demand is insensitive to the price differential between 20¢/kWh and 36//kWh due to the already high price of electricity relative to other energy sources. On an hourly basis, the base year and year 2005 system load estimates for the THREA facility (exclusive of the Kake Cold Storage plant) are: 1981 2005 Hourly Base Load 10 3kW 247kW Hourly Avg. Load 17 4kW 41 8kW Hourly Peak Load 47 5kW 1,140kW In accordance with Alaska Power Authority procedures, this forecast assumes that real electricity prices will remain at 1982 levels and that the real prices of alternative fossil energy sources will rise 2.5 percent per year. Given these price assumptions, Kake's electricity demand will be muted by the absence of a price incentive to shift to electric space heating. Even if real Kake prices for electricity substitutes rose a more rapid 5.2 percent per year, there would be no discernible difference in the electricity load forecast. 8/ The THREA generators are not demand metered. The 198] peak to average ratio was obtained by dividing an estimate of peak load (475 kW) by THREA's annual load of 1525 MWh. The estimate of peak 198] load was provided by the Kake power plant operator. The 1525 MWh annual load is from official THREA records. 2-5 Indeed, annual real price increase of 5.2 percent for alternative fuels would generate significant negative income effects on all forms of Kake energy consumption except wood for space heating. For this reason we have not given an explicitly detailed demand forecast for the 5.2 percent case. The absence of a price incentive to shift space heating from fuel oi] (68.4 percent of space heating demand in 1981), and wood (31.2 percent in 1981) to electricity (0.3 percent in 1981), is largely responsible for the conclusion reached concerning electricity demand. In 1982, the average THREA residential price for electricity, inclusive of State government subsidies, stood at $55.40 per million Btu's (maBtu' s) 2/ and the average THREA non-residential price at $88.40/MMBtu. With fuel oi] priced at $10.33/MMBtu, bottled gas at $24.63/MMBtu, and wood at $3.60/MMBtu, even a 5.2 percent rate of increase in the prices of fuel 011, wood, and bottled gas, would leave electricity as the high price alternative in the year 2005. Given the ready availablility of wood for space heating in Kake, only an absolute (as well as relative) decline in the real price of electricity to Kake users, on the order of 50 percent or more from 198] levels, would suggest the possibility of a switchover to electricity for space heating and a subsequent demand for increased peak load geneating capacity. The high cost of electricity in Kake is further dramatized by the estimate drawn from our survey that Kake households spent nearly 37 percent of their energy dollar on electricty, but received less than 7 percent of their energy consumed in return. As has been discussed earlier, the electricity consumption in Kake is expected to grow by 128 percent between 1982 and 2005, growing at a rate of about 2 percent/yr from 1985 to the turn of the century. This growth is projected to occur despite the differential in fuels and energy prices; however, it is forecast to occur ina very specific Manner. As the population increases and residents of Kake obtain more income, the residents are expected to construct more houses and a/ This is calculated on the basis of 1 kWh = 3412 Btu. 2-6 Purchase more appliances. Conmercial and governmental activities are Projected to rise over the same period, resulting in the construction of some additional buildings. The growth forecast, then, is in non- heating applications; and it is in the heating area where competition between fuels and energy suplies is most significant. A conversion of the Kake Cold Storage fron self-supplied power to THREA power would also increase THREA's peak load requirements. However, at 1982 prices, such a shift is unlikely to occur since the 1982 self- supplied price of electricity to the Cold Storage is an estimated $39.51 /MMBtu or 55 percent lower than the THREA commercial price. Should Kake-THREA electricity prices be lowered to the point where all space-heating presently supplied by fuel oil is shifted to THREA power, the implied increase in annual load would be 10,881 MWh at 1981 Consumption levels and 15,604 MWh at projected, year 2005 consumption levels. In the year 2005, peak THREA capacity requirements would rise by an additional 0.9 megawatts from 1.14 MW to 2.04 MW. Apart from the price assumptions, the premises upon which this forecast is based have been selected to produce an energy load forecast that errs on the high side of what can reasonably be projected, given present information and present expectations of economic growth. This is explained in detail in the economic and energy forecast, presented in Alaska Economics’ report in Appendix A. 2.3 ALTERNATIVE CONSUMPTION FORECASTS The above scenario has been used for planning purposes. Alternatives to it include a low growth forecast, and the inclusion of the cold storage plant into the low and modest growth scenarios. A comparison of these scenarios is presented below. 2-7 Total Elecricity Consumption (MWH) Low Demand Load Demand Modest Demand Modest Demand Without With Without With Year Cold Storage Cold Storage Cold Storage2/ Cold Storage 1981 1,525.3 2,026.3 1,525.3 2,026.3 1985 1,750.5 2,650.5 2,123.4 3,023.4 1990 1,920.3 2,820.3 2,434.7 3, 334.7 1995 2,109.9 3,009.9 2,822.3 3,722.3 2000 2,312.7 3,212.7 3,185.1 4,085.1 2005 2,531.0 3,431.0 3,711.8 4,611.8 These data illustrate that a considerable variation in electricity consumption could occur within Kake, even without including the Possibility of supplying heating requirements with electric power. Further, these variations could alter the system capacity requirements. The peak requirements for the year 2005, by scenario, are shown below to illustrate this point. Peak Demand in the Year 2005 Scenario (kW) Low Growth, No Cold Storage 772 Low Growth, Includes Cold Storage 1,672 Modest Growth, No Cold Storage2/ 1,140 Modest Growth, Includes Cold Storage 2,040 There is considerable variation in the capacity requirements between the four scenarios. This variation can be translated into capital investments as well as annual costs of operation. a/ The Planning scenario as discussed previously. 2-8 2.4 CONCLUSION Demand for electricity in Kake, Alaska will grow slowly or modestly. Its growth will be influenced by the purchase of appliances, but not by the use of electricity to serve space heating needs. Perhaps the most significant single factor influencing demand will be whether or not Kake Cold Storage alters its current practice of being a self-generator of power, and ties into the THREA system. Because of this variation an optimistic scenario has been chosen. However, this scenario does not include the Cold Storage electricity Consumption as infomation currently available demonstrates that this specific load is more economically served in the current manner. 2-9 3.0 THE OPTIONS AVAILABLE FOR KAKE, ALASKA Numerous options are available for supplying the energy requirements of Kake, Alaska including: 1) Diesel Power Generation (the base case); 2) Combustion Turbine Power Generation; 3) The Transmission Line Intertie; 4) Hydroelectric Power Generation; 5) Wood Fired Power Generation; 6) Wind Turbine Power Generation; 7) Weatherization of Buildings; 8) Insulation of Buildings; 9) Passive Solar Space Heating; 10) Passive Solar Water Heating; 11) Fuel Oi1 Furnaces; 12) Heat Pumps; and 13) Household wood furnaces. Waste heat recovery is considered in the context of thermal power generation. It is potentially appropriate for such thermal generation systems as diesel, combustion turbines, and wood. These alternatives listed above are discussed in this section, and considered in terms of the following parameters: 1) Relevance to meeting future electricity requirements of Kake, Alaska; 2) Potential for meeting a large (e.g., greater than 50%) share of the Kake, Alaska electricity requirement; 3) Efficiency; 4) Suitability, including environmental impacts; and 5) Cost considerations. 1831B 3-1 The above parameters are used as a screening methodology. They are used to select those options which may be usefully carried forward for economic (benefit/cost) analysis. As a consequence, they merit further Comment here. Relevance in meeting the future electricity requirements of Kake is important because the economic and energy forecasts, as discussed in Section 2, demonstrate that there is a clear separation between heati ng and electricity sources of fuels and energy. Alternative fuel sources for meeting space heating requirements will not influence electricity demand, since space heating is most economically achieved using oil or wood fuel. Similarly, methods for conserving fuel used for space heating will not influence future power requirements. As a Consequence, such systems will not influence decisions to re-invest in diesel units, construct a transmission line, or opt for yet another electricity supply systen. The potential for meeting a large portion of Kake's electricity requirement is used to differentiate between apparent and real alternatives to the current (base case) diesel system. Options that generate less than 50% of future requirements are best considered as supplements to, rather than departures from, the base case. Efficiency, for thermal options, is a (fuel) cost consideration. Suitability has cost implications. Costs, such as capital outlays, also are significant issues. By use of these screening parameters, analysis of those most promising alternatives is facilitated. Comparisons can be made on an equivalent basis not only in terms of economic assumptions but also in tems of system considerations. 3.1 DIESEL POWER GENERATION (BASE CASE) 3.1.1 Existing Diesel System Currently, the electricity needs of the community of Kake are provided by a diesel generating station owned and operated by THREA. The plant 3-2 consists of two 13-year old Caterpillar generators rated at 500 kW each, and two 7-year old Caterpillar units rated at 300 kW each. Total capacity, then, is 1600 kW. Firm capacity (total capacity less the Capacity of the largest unit) is 1100 kW. The relationship between the current power plant capacity and the Present and projected loads of Kake, Alaska is shown below. The current capacity is adequate to meet present and projected needs, Particularly with a modest increase in Capacity as Current units are retired. DEMAND FOR POWER AS A FUNCTION OF FIRM AND TOTAL capactTya2b/ (PERCENTAGE BASIS ) 1981 2005 Firn_ Total Firm Total Base Load 9.4 6.4 22.5 15.4 Avg. Load 15.8 10.9 38.0 26.1 Peak Load 43.2 29.7 103.6 71.3 a/ Based upon demand values shown in Section 2, p. 2-2. b/ Excludes Kake Cold Storage. The current power plant is well maintained, as is illustrated by Figures 3-1 and 3-2. Major overhaul occurs every 3 years on each unit. Lubricating oi1 is changed every 1,000 hours on the large units and every 200 hours on the smaller units. The coolant mix of water/ anti-freeze is adequate to -31°F, and it is changed every 2 years. For purposes of this analysis it is assumed that these units have a remaining useful life of at least 7 years on the larger units and 13 years on the smaller units. This is consistent with Alaska Power Authority guidelines for estimating the useful life of power generation systems. 3-3 FIGURE 3-1 AN OVERALL VIEW OF THE DIESEL GENERATOR SETS IN THE KAKE POWERHOUSE FIGURE 3-2 A CLOSEUP VIEW OF A 300KW DIESEL GENERATOR SET IN THE KAKE POWERHOUSE The diesel units are located approximately 2 miles from town, Principally in order to minimize impacts of noise from their operation. They are quite efficient for small power plants, as is shown in the table and explained below. MANUFACTURER'S ESTIMATE FOR HEAT RATES FOR EXISTING DIESEL UNITS AT FULL LOAD AND 50% LOAD (In Btu/kWh) Unit Load 300 kW 500 kW 100% 11,060 10,550 50% 11,110 11,660 Source: Caterpillar Generator Set Manual The heat rates cited above, approximately 11,000 Btu/kWh (higher heating value basis) are comparable to central station power plant values. If achieved in practice they are quite attractive when the scale of the operation is considered. They are particularly attractive in partial load situations, as other types of equipment (e.g., steam and combustion turbines) perform less effectively in such situations. It should be noted that the heat rate cited above, and used throughout the remainder of this report, has not been adjusted for in-plant electricity consumption, or losses associated with the system beyond the generator. Such uses and losses are expected to be small. Further, a conservative assessment of alternatives is achieved by using the 11,000 Btu/kWh heat rate in calculating the costs of the base case. 3.1.2 Future Diesel System One option available to Kake, then, is to continue operating the diesel plant, investing in new equipment as replacements are required. This option is discussed below. In operating the diesel plant the capture of waste heat may be considered. Waste heat from the exhaust gases and the cooling water jacket may be captured and converted into hot water or steam for distribution to community structures (e.g., the community building, the high school) and residences. This is potentially quite attractive from an efficiency perspective. The location of the diesel plant relative to such heat users and the relatively low energy density of such structures, however, makes this Proposition appear impractical. In addition, because the power plant was moved outside of town in response to objections concerning noise and land requirements, it is doubtful that relocation to the center of town would be well received. Further, an analysis of potential sites adjacent to the potential waste heat users was conducted, and no suitable sites could be found. The diesel option, as considered, includes incremental investments to maintain the power plant as an efficient, effective unit supplying all of the power to the community. The system will be built in stages, based upon replacing existing units and systems at the end of their useful life. In 1989 the two 500 kW generators will be replaced with 600 kW units. In 1995 the two 300 kW generators will be replaced with another 600 kW unit. In 1995 the building, fuel oi] storage tanks, and other systems will also be replaced. Investments will be cycled in that manner, on a 20 year basis, to the year 2035. A functional description of the power plant, as it will exist in 1995, is provided below. 3.1.3 Future Diesel System Functional Description Fuel oi] will be stored outdoors in above ground Anerican Petroleum Institute (API) approved tanks with a suggested minimum of 30 days of fuel capacity. The tanks will be equipped with internal heaters for maintaining the fuel at a temperature above its pour point. The tank(s) will be located immediately adjacent to the powerhouse. Two 100 percent capacity fuel oi] transfer pumps will be installed inside the powerhouse. Each pump will be sized to be capable of supplying the entire needs of two generating units. The transfer pumps will supply oi] to the diesel day tanks on demand from level switches in the day tanks. The individual diesel day tanks are equipped with fuel injection pumps. Each diesel generator will be a Complete skid mounted unit. The generators will be self exciting, brushless, single bearing, close Coupled machines capable of delivering 600 kW at the rated speed. Combustion air will be drawn from outdoors for all three machines with a residentially rated exhaust silencer installed indoors and a horizontal exhaust through the powerhouse walls. A small motor driven Compressor, with air receiver will supply compressed air for starting the diesels. In the event of a black start the air in the air receiver will be capable of four (4) nomaal starts. The heat rate for these diesels is 11,875 Btu/kWh (lower heating value basis), or 11,000 Btu/kWh (higher heating value basis). The diesel generator will be supplied with all necessary controls for fully automatic operation including start up, load following, and shutdown. The complete power plant will include an all weather fully enclosed insulated structure for housing all three replacement units. A11 equipment necessary for starting, operating, and normal maintenance of the units, and synchronous control of the generators, will be inside 3-7 the structure with the exception of the fuel storage tanks. The equipment requied for this system is shown in Table 3-1. The layout of this system is shown in Figure 3-3. 3.1.4 Future Diesel System Costs The capital cost estimate for this system is calculated at $1,200, 000 or $670/kW installed. The capital cost estimate is shown in Table 3-2. As a practical matter this investment would be staged at $512,000 in 1989 and $688,000 in 1995, with subsequent cycling on that basis (20 yr schedule). Operating costs for the diesel system include a labor force of two non-supervisory operating persons at $50,000 each. Maintenance costs are annualized at 5 percent of total capital investment, assuming $1,000/year for spare parts, the continuation of the current maintenance schedule, and a major overhaul every 18,000 (machine operation) hours. Maintenance costs are annualized at $46,750/year. It is recognized that these 0 & M costs are highly conservative. However, they reflect the need for high system reliability in a remote village. They contribute to the high cost of diesel power. Fuel costs are the final variable. A survey of the Union Oil and Chevron 0i1 distributorships in Ketchikan, Alaska Provided a delivered price (1982 dollars) of $1.12/gal assuming bulk delivery. This is equal to $8.30/Btu x 10°, The difference between this price and the hone heating oi] price previously quoted is largely the cost of small lot distribution. 3.1.5 Conclusions The design described above provides a highly reliabile means for meeting 100 percent of the electricity needs of Kake, Alaska. It is an extension of current practice and is therefore used here as the base case. TABLE 3-1 EQUIPMENT LIST FOR DIESEL PLANT *Air inlet filter(s), silencer(s), and ducting *Exhaust silencer(s) and ducting *Diesel/hydraulic starter(s) or air start system system(s) *Day tank(s) *Fuel transfer punp Fuel Centrifuge Lighting *D.C. control power source *Synchronization equipment *Swi tchgear *Control panel(s) Heating and ventilating equipment *Skid mounted diesel or turbine/generator sets *Lube oi] coolers Compressor, piping, and receiver for air start systen Fuel storage tank heaters Three 600 kW Diesel Engines *Items with asterisk are included in turbine generator purchase price. 3-9 COOLING AIR INLET (TYP 3) DOUBLE VENTED DOOR (TYP 3) L Y / ! i yj | | ] ] Y L ELECTRIC DISTRIBUTION CENTER FUEL STORAGE 100,000 gal. EXHAUST SILENCER TANK COOLING AIR EXHAUST LOUVER (TYP 3) . RADIATOR SESS S DIESEL — > EXHAUST (TYP 3) RADIATOR FUEL | Feaisren | SYSTEM | ALASKA POWER AUTHORITY KAKE-PETERSBURG TRANSMISSION FEASIBILITY STUDY DIESEL GENERATOR BUILDING ARRANGEMENT FIGURE 3-3 EBASCO SERVICES INCORPORATED CAPITAL COST ESTIMATE, DIESEL SYSTEM Iten 3-600 kW Diesels Auxiliaries and Piping Electrical Systems Building and Foundations Subtotal Engineeri ng Contingencies Total Installed Cost TABLE 3-2 3-11 Cost $600,000 146,000 93,400 _100, 000 $940,000 $ 940,000 130,000 130,000 $1,200,000 3.2 COMBUSTION TURBINE POWER GENERATION The use of combustion turbines is, as a practical matter, a variant on the base case. During periods of replacement, small combustion turbines (e.g., less than 1 MW) can be substituted for diesel engines. All other equipment (e.g., structure, controls, fuel tanks, etc.) is identical for both diesel and combustion turbine power generation. The Combustion turbine option was investigated on this basis. Combustion turbine technology is well developed. The cycle considered here is the simple or open cycle. In this form a combution turbine system is small and light. It requires only a modest foundation and building, no cooling water, and can be run unattended. Its desirable characteristics for the Kake, Alaska setting include dependability, low maintenance requirements, long life, and rapid start-up and loading. Open cycle was evaluated here due to the size of the equipment. While combined cycle systems are more efficient, they are only available in much larger sizes. As a consequence, the combined cycle approach was determined to be inappropriate for Kake. Waste heat recovery for space heating was evaluated. The problems of the current site being located 2 miles from town, and noise emissions from the electricity generating station are equally appropriate for diesel and combustion turbine alternatives. Consequently, waste heat recovery was not considered to be a viable option. The specifications of combustion turbines presently available dictate replacing the two 500 kW diesels with two 500 kW combustion turbines and replacing the two 300 kW diesels with a single 800 kW unit. The specifications of these units are presented in Table 3-3. The combustion turbine layout is shown in Figure 3-4. Of critical importance are the heat rates: 17,000 Btu/kWh for the 500 kW units and 16,250 Btu/kWh for the 800 kW unit. These heat rates indicate a loss of efficiency, when compared to diesel, hence a substantial fuel cost increase. They are high, relative to most 3-12 ~ COMBUSTION TURBINE GENERATOR Iten Mfr/Model Compressor Turbine Gear box Lube System Start System Fuel Type Fuel Consumption Suggested Overhaul Heat Rate Start Time Lxwxud Skip Wt (1bs) TABLE 3-3 500 kW ONAN/560 GTD Two Stage - Radial Three Wheel - Axial SPECIFICATIONS 800 kW Solar Turbine/Saturn 8 stage - Axial 3 stage - Axial Pressure Lube - Double Spur Press. Lube, Two Reduction 16 gal., pos. disp. Press. 24V, Pneumatic (150 psig) Diesel, Fuel 0i1 460 1b/hr at 500 kW 30,000 hrs 17,000 Btu/kW-hr 10 sec 138 x 57 x 76 6800 Ibs 3-13 Stage, Planetary 110 gallon, gear type Air, D.C., or Diesel Diesel, Fuel 0i1 744 1b/hr at 800 kW 30,000 hrs 16,250 Btu/kW-hr 30 sec 239 x 70 x 90 16,010 1bs OUTDOORS <@——- | > INDOORS. INLET EXHAUST TO SILENCER MUFFLER ATMOSPHERE & FILTER DAY TANK AMBIENT AIR INTAKE COMBUSTION CHAMBER TO AIR STARTER SYSTEMS FUEL OIL STORAGE TANK HEATER COMPRESSOR AIR RECEIVER FUEL OIL TRANSFER PUMPS AGB ALASKA POWER AUTHORITY KAKE-PETERSBURG TRANSMISSION FEASIBILITY STUDY COMBUSTION TURBINE SCHEMATIC FIGURE 3-4 EBASCO SERVICES INCORPORATED Combustion turbines, due to the very small sizes of the machines. These heat rates, further, would increase dramatically under partial load conditions. Combustion turbines are highly inefficient when operated at less than 70% capacity. 3.2.1 Cost Data The combustion turbine layout is shown in Figure 3-2. Based upon this layout, and the specifications presented above, a capital cost estimate has been developed. It is shown in Table 3-4. The total capital cost is $1.7 million. Operating and maintenance costs for the combustion turbine are essentially the same as those associated with the diesel. Because the combustion turbine system is a variation on the base case, direct comparison is possible. This comparison is presented in Table 3-5. The combustion turbines have higher capital costs and higher fuel costs, as the table illustrates. 3.2.2 Conclusions Since the combustion turbine option has higher capital costs and higher fuel costs, it is less economic than the diesel option. Consequently, it is not considered for further analysis. 3.3 THE TRANSMISSION LINE OPTION The construction of a transmission line from Petersburg to Kake offers the first major alternative to the continued use of diesel power generation. The important considerations in the formulation of this alternative were the selection of the line's voltage, the line's design, and the routes the line would follow. These issues are discussed below. While they are analyzed in more detail in the Projects Routing and Environmental Report and in the Cost and Engineering Report. 3-15 TABLE 3-4 CAPITAL COSTS OF THE COMBUSTION TURBINE SYSTEM Iten Cost 2-500 kW Turbines $540,000 1-800 kW Turbine 440,000 Auxiliaries and Piping 196,600 Electrical Systems 93, 400 Building and Foundations 150,000 $1,420, 000 Subtotal Engineering Contingencies Total Installed Cost 3-16 $1,420,000 130, 000 130,000 $1, 680,000 TABLE 3-5 COMPARISON OF DIESEL AND COMBUSTION TURBINE SYSTEMS Diesel Turbine Size 3 - 600 kW units 2 - 500 kW units 1 - 800 kW units Fuel Various Oils Various Oils Heat Rates (Btu/kWh) 11,000 500 kW - 17,000 800 kW - 16,250 Building Size (ft) 40 x 50x 18 40 x 50x 18 Total Installed Cost ($) 1,200, 000 1,680,000 Annual Fuel Use @ 420 kW Average Load 310,700 gal 550,200 gal 3-17 3.3.1 Line Voltage Several line voltages were considered for the Proposed transmission line. These include: 69,000 volts (69 kV), 40 kV, 34.5 kV, 24.9 kV, and 13.9 kV. Of these five, the 69 kV or 24.9 kV lines would have the advantage of being available in Petersburg. A 69 kV line is being built from Tyee Lake to Petersburg and this voltage could be extended to Kake if load warrants. Loads in Kake, however, would not fully load a 69 kV line until well after the year 2000 if loads grow as projected in the project's forecast. The added expenditure associated with a 69 kV line is therefore not justified. The existing line from Crystal Lake to Petersburg is 24.9 and selecting the voltage for the line could eliminate the need for an additional transformer and thereby reduce project costs. A line of this voltage would also have adequate Capacity to serve Kake's load until 2015 if the projected rate of growth through 2000 continues through 2015. The 40 kV option actually consisted of a single wire ground return option. This option has disadvantages from a reliability standpoint, as One conductor carries all the power and because such a line would not be fully compatible with the existing power system in Petersburg. It, like the standard 3-phase design, requires a 55-foot or wider cleared right-of-way and has correspondingly high costs (see Section 3.3.2). Its estimated cost is higher than the most economical 24.9 kV option. No 34.5 kV lines currently existing in the Petersburg area and therefore would, at a minimum, require a new transformer. It would also provide more transmission capacity than is required and is thus not as cost-effective as the less expensive 24.9 kV option. The final voltage considered, 13.9 kV, was the least expensive, but it was determined to be inadequate in meeting Kake's long term needs. In summary, after weighing all the factors described above, the voltage of 24.9 kV was selected as the best choice for the Kake-Petersburg line. 3-18 3.3.2 Line Design Once it was determined that the optimal voltage for this line was 24.9 kV, it was necessary to select a design for the line. Designs were needed for both overhead and submarine portions of the route as the route crosses two water bodies and over 40 miles of forest land. The submarine cable segments would consist of insulated cables which would be buried beneath Wrangell Narrows and Duncan Canal. Several Overhead designs were considered. The types of overhead designs considered were a standard 3-phase Overhead line and an overhead cable option. A standard 3-phase line such as shown in Figure 3-5 was considered because such lines are the most widely used and are, in most applications, the most reliable and cost-effective. For these types of lines, however, adequate clearance must be maintained between the conductor and the ground and adjacent vegetation. Further, if trees would fall into such a line, it is likely that the line would short out. Also, if damage occurred to the line, repairs to put the line back into service could be costly. To Prevent such a situation from occurring, a relatively wide right-of-way, typically at least 55 feet wide, would have to be Cleared. There is a high cost associated with such Clearing making this alternative quite costly. The estimated cost of a standard 3-phase line, including the required submarine crossings, would be approximately $11,000,000. The other option considered was the 24.9 kV overhead cable. This option, which involves the use of a bundle of insulated conductors (referred to hereafter as a cable), as shown in Figure 3-6, can function properly for several months even if it is in contact with vegetation or lying on the ground. Thus, froma reliability standpoint this solution offers significant advantages. An overhead cable line would also require a cleared right-of-way only 20 feet wide. Compared to standard 3-phase construction, the reduced clearing greatly lowers Project costs and more than offsets the extra cost of the overhead 3-19 ALASKA POWER AUTHORITY KAKE-PETERSBURG TRANSMISSION FEASIBILITY STUDY STANDARD 3-PHASE LINE RIGHT-OF-WAY AND CROSSARM DETAIL FIGURE 3-5 EBASCO SERVICES INCORPORATED ALASKA POWER AUTHORITY KAKE-PETERSBURG TRANSMISSION FEASIBILITY STUDY 24.9 KV OVERHEAD CABLE AND RIGHT-OF- WAY AND POLE DETAIL FIGURE 3-6 EBASCO SERVICES INCORPORATED cable. The estimated cost of this option is approximately a million, less than any of the other options. It also would have less environmental impact as less right-of-way needs to be cleared under this approach than for the conventional 3-phase design. For these reasons the overhead cable design is being proposed. 3.3.3 Line Route The most reasonable route for the transmission line is shown in Figure 3-7. Figure 3-8, Sheets A through D, show the route in more detail. The Kake-Petersburg line would either originate at a tap of the existing Crystal Lake-Petersburg 24.9-kV line or would result in building the new 24.9-kV circuit from the proposed Petersburg Substation at Scow Bay to Kake. As compared to the option of tapping the existing Crystal Lake line, constructing a 24.9 kV circuit to the Proposed Petersburg Substation would add 5 miles to the length of the Project. It is likely that such a new circuit would be underbuilt on the proposed 138/69 kV Tyee Lake-Petersburg transmission line. From the point where the proposed line either taps the Crystal Lake-Petersburg 24.9 kV line or, for the Tyee underbuilding option, from a point west from the point where the line crosses the Mitkof highway, an underground/underwater cable will be constructed crossing Wrangell Narrows. This cable will be located in a trench approximately 4 feet deep and will be approximately 3,000 feet in length. The submarine cable will terminate on the west side of Wrangell Narrows south of the Tonka log transfer facility away from the unstable soils along the shoreline. At this point, the proposed line will assume an overhead position and will be constructed along existing roads west toward Duncan Canal. It will be recommended that an overhead cable (e.g., Hendrix cable) be used for the overhead line, because studies indicate that the reduced clearing required for such a line makes it the most economical alternative among conductors considered for this project. As shown on the attached strip maps (Figure 3-8A through 3-8D), the Proposed line 3-22 KAKE-PETERSBURG INTERTIE DETAILED FEASIBILITY ANALYSIS TRANSMISSION LINE STUDY CORRIDORS FiguRE 3-7 EBASCO SERVICES INCORPORATED | ALASKA POWER AUTHORITY _| POWER TALASKA POWER AUTHORITY | KAKE-PETERSBURG INTERTIE DETAILED FEASIBILITY ANALYSIS ROUTE ALIGNMENT STRIP MAP A FIGURE 3-6A SCALE IN MILES ALASKA POWER OR KAKE-PETERSBURG INTERTIE DETAILED FEASIBILITY ANALYSIS ROUTE ALIGNMENT STRIP MAP B FIGURE 3-88 EBASCO SERVICES INCORPORATED SCALE IN MILES ALASKA POWER AUTHORITY KAKE-PETERSBURG INTERTIE DETAILED FEASIBILITY ANALYSIS ROUTE ALIGNMENT STRIP MAP C FIGURE _3-8C EBASCO SERVICES INCORPORATED SCALE IN MILES ALASKA POWER AUTHORITY KAKE-PETERSBURG INTERTIE DETAILED FEASIBILITY ANALYSIS ROUTE ALIGNMENT 3 STRIP MAP D FIGURE_3-8D EBASCO SERVICES INCORPORATED follows the existing road system for approximately 7 miles until the Point where the existing road systen ends approximately 2 1/2 miles east of Duncan Canal. From there the line would follow a westerly course to Duncan Canal, where a submarine crossing, approximately 6,000 feet in length would be Constructed. As in the other underwater crossing, the proposed submarine cable will be buried to a depth of approximately 4 feet. At both the crossings two 3-phase cables will be installed for reliability purposes, the separation between them being approximately 100 feet. Continuing west from Duncan Canal, the Proposed transmission alternative will follow the route identified as Route 2 by the U.S. Forest Service. This route runs north/south and parallels the western shoreline of Duncan Canal for approximately 2 miles before heading west paralleling the shoreline along the Tidal Flat area west of Indian Point. Continuing west from this point, the line crosses primarily forest land leading to a pass at the elevation of approximately 750 feet that divides drainages leading to Duncan Canal from those leading west toward Hamilton Bay and Kake. There are no roads throughout this entire segment. The location of the route in this area is shown on Figures B and C of the attached strip maps (Figure 3-8A through 3-8). Approximately 30 miles from the eastern point on the Wrangell Narrows crossing, the proposed route intersects the existing logging road system that originates in the Kake area. The proposed route will follow this system for approximately 17 miles to Kake. Except for / several short segments, the proposed route parallels the existing road system. As mentioned before, throughout the entire overhead segment of the route, overhead cables would be used. 3-28 3.3.4 Costs A preliminary cost estimate has been developed for a 24.9 kV line consisting of segments of overhead and submarine cable. The option upon which the estimate is based would tap the Crysal Lake- Petersburg line near the point where the line to Kake would cross Wrangell Narrows. It is estimated such a line would cost approximately $9,000,000. Operation and maintenance costs were also developed. These costs were determined assuming that maintenance activities on the line will occur infrequently, although it is recognized that damage could occur to the line at any time. The schedule of operation and maintenance activity - for the first year or two after construction will involve monthly overflights. These will generally use a fixed wing aircraft, although Once a year a helicopter would be used. Overflights would be needed less frequently in future years. The annual cost of these flights would be approximately $2,500. Annual labor charges to repair and maintain the line are estimated at approximately 25 workdays or $10,000 while the materials (to replace poles and hardware) required are estimated to cost approximately $10,000 per year. In addition, every 8 to 9 years the right-of-way will need to be cleared of danger trees and other vegetation posing a threat to the line. The annualized cost of this clearing together with contingencies and other miscellaneous costs is approximately $22,500. Thus, the total annual cost of operation and maintenance activities for the transmission line is $45,000. More detailed cost data, are presented in the Cost and Engineerng Report. Transmission line losses are not considered in the operating costs presented in this Interim Report. These losses do not affect the economic analysis because the cost of Tyee power per se does not effect the economic analysis. Because line losses are an important Consideration in the decision-making process, however, they will be discussed in the feasibility report. 3-29 It is assumed that the line could be constructed within one Construction season. As a consequence, the line could be made available shortly. In addition to the costs associated with the transmission line itself, there are diesel costs considered. During the period of construction the current diesel plant must be operated to supply power to Kake. Additionally, one can ascribe a reliability factor of 95% to the transmission line system. As a consequence, diesel power will be used to supply 5% of the electricity needs of Kake, Alaska over the life of the project. 3.3.5 Conclusion The optimal transmission line for this project would be a 24.9 kV line tapping the Crystal Lake-Petersburg line. Constructing a transmission line would permit Kake to decrease its dependence on fossil energy from 100% to 5%. It provides a substitution of capital investment for annual fossil fuel costs, or capital resources for non-renewable fuel resources. Its economic attractiveness is addressed in Chapter 4. 3.4 THE HYDROELECTRIC POWER OPTION Hydroelectric power offers the second discrete alternative for Kake, Alaska. In this alternative, a free renewable resource (water) can be at least partially substituted for costly non-renewable fossil fuels. Again the process is largely one of substituting capital investments for some operating costs. There are two basic hydroelectric alternatives available for Kake, Alaska: Cathedral Falls and Gunnuck Creek. Each alternative has its own characteristics in terms of hydrology, power potential, and cost. As a consequence, each option is described separately below. In no forseeable situation would both of these facilities be constructed. 3-30 3.4.1 Cathedral Falls The Cathedral Falls Project (Project) can provide energy to meet a Part of the Kake system energy requirements and thereby reduce the amount of fuel oil presently used in electrical generation. The plant cannot provide dependable capacity to the system but is useful as a source of energy as it will operate on a run-of-river basis. Since no dependable capacity will be available from the Project, existing diesel generation Capability must be maintained. The Cathedral Falls Project consists of a low concrete gravity dam across the river, founded on rock, with an uncontrolled spillway, an intake and emergency closure gate for the power conduit, a temporary diversion structure, a power conduit approximately 470 feet long including about 360 feet placed in an excavated tunnel, and a Powerhouse containing one turbine initially and space for a second unit addition. Additional facilities include a switchyard, access road and a transmission line. Water for power operations is diverted via the steel power conduit from the dam to the powerhouse. The conduit bifurcates just prior to entering the powerhouse. Turbine flows discharge into the turbine pits and flow into the river. A general Project plan and approximate penstock profile is shown in Figure 3-9. Details of project features are shown in Figure 3-10. These general project features are essentially the same as those presented in the Cathedral Falls Reconnaissance Report prepared by the Harza Engineering Company (1979). Some concept modifications and refinements have been made, and costs have been updated. Table 3-6 presents significant data for the project. Hydrology: A daily flow duration curve was developed for the site on Cathedral Falls Creek using 4 years of data available from the Hamilton Creek gage. The flows for the site were adjusted on the basis of the ratio of drainage areas between the Hamilton Creek gage and the Project site. The flow duration curve was found to correlate very well, in the lower and more significant ranges of streamflow, to the curve developed and used by Harza in its 1979 report on Cathedral Falls. The flow duration curve developed is shown in Figure 3-11. 3-31 REMOVE ROCKS AS INDICATED TO IMPROVE SPILLWAY (FALLS) OUTLET PROTECT FACE WITH CK BOLTS AND WIRE MESH PENSTOCK 'UNNEL ENTRANCE ENCLOSED IN CONCRETE 200 FEET STATIONS POWER CONDUIT PROFILE DIVERSION DURING CONSTRUCTION ‘SPILLWAY ws. EL. \ NOTE: DRAWING REPRODUCED FROM CATHEDRAL FALLS PROJECT, A RECONNAISSANCE REPORT HARZA ENGINEERING COMPANY, 1979 ALASKA POWER AUTHORITY FEASIBILITY STUDY CATHEDRAL FALLS HYDROELECTRIC PROJECT ALTERNATIVE PROJECT ARRANGEMENT FIGURE 3-9 EBASCO SERVICES INCORPORATED ‘SPILLWAY CONCRETE SUPPORT -Rt Pp Sar CONDUIT SECTION OF DAM LOOKING UPSTREAM MAX. NORMAL WS. © 20 40 FEET EL. is ‘SALE. 125. 120. us. Ho 106. (00. 9 SOUND ROCK SPILLWAY SECTION 0 4 GFEET Li SCALE STIFFENER RING f.02 CONTINUOUS CONCRETE EMPORARY STEEL AND SUPPORT: EL. wot, TOP OF FRACTURED ‘AND JOINTED TOP OF SOUND ROCK STEEL 3. i PENSTOCK with COUPLINGS IB ANCHOR BARS 6-0 INTO ROCK at 10-0 0.c. PENSTOCK TOCK SECTION ° 4 @ FEET ° ‘SCALE SOUND ROCK ROCK BOLTS. 4 SCALE UNLINED TUNNEL WITH PENSTOCK SECTION 8 FEET TUNNEL SUPPORTS CONCRETE PER PREFABRICATED BUILDING STEEL DISCHARGE CONE WEIR TWEL. 26 POWERHOUSE TRAVERSE SECTION 4 SCALE @ FEET unit 2 (Future) --L— cust t | rot GENERATOR 00 Kw 1 ! wos DAM, SPILLWAY AND PARTS OF POWER CONDUIT INFORMATION |S BASED ON CATHEDRAL FALLS PROJECT RECONNAISSANCE REPORT. HARZA ENGINEERING COMPANY, OCTOBER 1979 ALASKA POWER AUTHORITY KAKE- PETERSBURG TRANSMISSION FEASIBILITY STUDY CATHEDRAL FALLS HYDROELECTRIC PROJECT ALTERNATIVE DAM, POWER CONDUIT AND POWERHOUSE DETAILS TURBINE DISCHARGE PIT POWERHOUSE PLAN a 4 6 FEET ‘SCALE FIGURE 3-10 EBASCO SERVICES INCORPORATED TABLE 3-6 CATHEDRAL FALLS HYDRO PROJECT SIGNIFICANT DATA RESERVOIR Water Surface Elevation, ft ms] Normal Maximum Minimum Surface Area at Nomal Maximum Elevation, ac Estimated Useable Storage, ac-ft Type of Regulation HYDROLOGY Drainage Area, sq mi Avg. Annual Runoff, cfsii2 1/ Streamflow, cfst Maximur Monthly Average Annual Minimun Monthly DAM Type Height, ft Top Elevation, ft msi SPILLWAY Type Crest Elevation, ft ms] Width, ft Design Discharge, cfs TUNNEL Diameter, ft Length, ft PENSTOCK Type Diameter, ft Length, ft Shell Thickness, in. 115 110 6.5 30 None 27.2 4.6 504 125 13 Conc. Gravity 27 125 Conc. Ogee 115 70 8,600 360 Steel 4.0 470 -188 1/ Based on data for water years 1977-1980 from Hamilton Creek gage adjusted for drainage area. 3-34 TABLE 3-6 (Continued) POWERHOUSE Number of Units (Initial) Number of Units (Ultimate) Turbine Type Rated Net Head, ft Generator Unit Rating, kW Full Load Discharge, One unit, cfs Normal Tailwater Elevation, ft ms] POWER AND ENERGY Installed Capacity, kW (Initial) Installed Capacity, kW (Ultimate) Firm Capacity, kW Avg. Annual Energy Generation, MWh COSTS AND ECONOMICS 1 2 Horizontal Francis 84 400 65 26 400 800 0 (See Table 3) Construction Cost, $1,000 (Initial at 1982 bid level) 7,048 Construction Cost, $1,000 (Addition at 1982 bid level) 413 BASIC ASSUMPTIONS Contingencies 0 percent of Direct Construction st Escalation During Construction eS percent of Direct Construction st Engineering and Owner Administration 15 percent of DCC w/contingencies and escalation during construction 3-35 POWER OUTPUT DISCHARGE (CFS) POWER OUTPUT (KW) DAILY DISCHARGE SEEN< PERCENT OF TIME FLOW-DURATION AND POWER OUTPUT VS. PERCENT TIME ALASKA POWER AUTHORITY KAKE-PETERSBURG TRANSMISSION FEASIBILITY STUDY CATHEDRAL FALLS HYDROELECTRIC PROJECT ALTERNATIVE HYDRAULIC DATA FIGURE 3-II EBASCO SERVICES INCORPORATED Power Operation: The run-of-river mode of operation allows for generation approximatey 57.5 percent of the time using the selected units. The selected units have a minimum operating level of about 45 cfs with a maximum of about 65 cfs. This corresponds to a minimun level of generation of about 280 KW. The initial unit will have a design discharge capacity of approximately 65 cfs and a maximum output of 400 KW. The future second 400 KW unit addition would increase the Capability of the plant to utilize up to 130 cfs with generation capacity of 800 KW. The second unit could operate up to approximately 28 percent of the time. A power duration curve for the initial and future units is depicted in Figure 3-11. Environmental Considerations: Potential impacts on anadromous fish populations will be minimal due to the selected mode of operation and the fact that the powerhouse will be located near the base of the existing Cathedral Falls. The existing falls forms a natural barrier to spawning salmon, thus the impact of diverting upstream flows to the base of the falls via the powerhouse will be negligible. The natural level of streamflow in the reach of the stream containing the salmon population will not be altered by power operations. Potential impacts during construction would consist mainly of a short term increase in suspended solids in the water due to the construction activities. Careful construction techniques will be employed and construction activities will be scheduled at the most desirable times to minimize impacts. Project Costs: The cost estimate for the Project is based on the preliminary arrangement and project features shown in Figures 3-9 and 3-10 as previously presented. Quantities for sone Project features were left unchanged from the 1979 Harza reconnaissance report. Quantities for other features were based on the revised arrangements. 3-37 Construction cost estimates for the Project were based on Harza unit prices escalated using U.S. Bureau of Reclamation (USBR) indices, recent Alaska project cost estimates prepared by Ebasco and manufacturers information. A summary of the construction costs for the Project is shown in Table 3-7 and reflect the estimate based ona January 1982 bid level and a construction period of approximately 1.5 years. The total construction cost includes escalation during construcion, contingencies, and engineering and owner administration. Interest during construction is not included. The factors applied to develop items other than the direct construction cost are shown in Table 3-6, as previously presented. The annual operating and maintenance costs for the Project have been estimated at $60,000 per year on a 1982 level. This cost estimate includes manpower requirements for operation and maintenance assumed to be one skilled person employed half time or $25,000/year, interin replacements equal to 0.3% of the total investment cost (TIC) or $20, 000/year, insurance equal to 0.1% of the TIC or $7,000/year, and a miscellaneous cost of $8,000/year. The interm replacement cost is included to cover relatively major items over the life of the Project such as turbine runner replacement, or rewinding of generators while the miscellaneous expenses are assumed to cover the more frequent and minor parts replacement such as bearings and seals. The mode of operation for the project as proposed will be run-of-river and as such will operate depending on the availability of water and the system load demand. Due to periods of flow below which the unit cannot operate and lack of storage, there will be periods of no generation and therefore the project will not provide any dependable capacity. In such periods diesel units will have to be operated, with their attendant costs. During periods of adequate flows it is anticipated the Project will utilize the flow available up to the units’ hydraulic Capacity or will generate at a power level equal to the system load. 3-38 TABLE 3-7 CATHEDRAL FALLS HYDRO PROJECT COST ESTIMATE SUMMARY Item Initial Development 1. Mobilization 2. Land and Land Rights 3. Reservoir Clearing 4. Diversion and Care of Water 5. Dam, Spillway, and Intake 6. Power Conduit 7. Powerhouse 8. Mechanical and Electrical Equipment 9. Roads and Bridges 10. Transmission 11. Supervisory Controls Subtotal Engineering Contingencies Total Construction Costl/ Second Unit Addition?/ 1. Mobilization 2. Mechanical and Electrical Equipment Subtotal Engineering Contingencies Total Construction Cost Ss Cost 3/ $500, 000 21,000 45,000 240,000 1,317,000 1,153,000 156,000 309,000 300,000 603,000 70, 000 4,714,000 919,000 1,415,000 7,048, 000 20, 000 279,000 299, 000 54,000 60, 000 413,000 —’ Does not include interest during construction or second unit addition. 2/ On-line date for second unit is 1/92. 3/ 1982 bid level. 3-39 Due to the nature of the Project and the system it is intended to supply, not all of the potential generation will be utilized within the system. Since high flow periods will occur throughout the day during Peak load periods and at night during minimum load periods, it is anticipated that spill will occur at night since storage is negligible and potential generation will exceed the load. In estimating the generation that would be utilized within the system it was assumed that all energy generated at base load or less would be used. Generation between the base and peak loads was assumed to be utilized at a 50 percent rate. Generation utilized within the systen, thus the fuel replacement benefit for the project, versus the potential generation for the Project is summarized in Table 3-8. Table 3-8 has been used to distribute the electricity production between hydroelectric and diesel power. This distribution is shown in Table 3-9. All diesel costs employed in the economic analysis are based upon Table 3-9. It is assumed that one replacement cycle will be required (see Section 3.1) for capital investment. All other fuels and operation and maintenance costs associated with diesel power are assumed here as well, because diesel generation would be required for about 20 percent of all electricity assumed in Kake. The above description, then, defines the second basic alternative to the base case (diesel power plant). It provides a significant replacement of fossil energy with renewable energy resources. AS a Consequence, it is evaluated in Chapter 4. 3.4.2 Gunnuk Creek The Gunnuk Creek Project (Project) will provide energy to meet a part of the Kake system energy requirements and thereby reduce the amount of fuel oil Presently used in electrical generation. The plant will not provide dependable capacity to the system but will be primarily a source of energy as it will operate ona run-of-river basis. Since no dependable capacity will be available from the Project, existing diesel generation capability must be maintained. 3-40 Energy in Generation Base Load Between Peak Year Coren pes! cabanas (evn) 1985 1,498, 400 440,200 1986 1,564,400 374,200 1987 1,630, 500 308,100 1988 1,696,500 242,100 1989 1,762,500 176,100 1990 1,828,600 110,000 1991 1,894, 600 44,000 1992'/ 1,950, 900 947,800 1993 1,987,700 911,000 1994 2,024, 400 874, 300 1995 2,061,200 837,500 1996 2,098,000 800, 700 1997 2,134,800 763,900 1998 2,171,600 727,100 1999 2,208,400 690,300 2000 2,245,200 653,500 2001 2,282,000 616,700 2002-2034 2,282,000 616,700 TABLE 3-8 CATHEDRAL FALLS HYDRO PROJECT ENERGY GENERATION AND UTILIZATION SUMMARY 1/ Second unit on-line 1/92. 2/ Based on constant increase for estimates from 1982 to 2001. 3/ Energy generated at base load or less. Generation Useable Within System in Peak 5/ Component _(KWh)— 220,100 187,100 154,100 121,100 88,100 55,000 22,000 473,900 455,500 437,200 418,800 400, 400 382,000 363, 600 345,200 326, 800 308, 400 308, 400 Total Generation Utilized in System (KWh §/ 1,718, 500 1,751,500 1,784, 600 1, 817,600 1,850, 600 1,883,600 1,916, 600 2,424, 800-/ 2,443,200 2,461 , 600 2,480,000 2,498, 400 2, 516,800 2,535, 200 2,553,600 2,572, 000 2,590,400 2,590, 400 4/ Energy generated at levels of peak demand or below less energy generated at base load or below. 5/ 50 percent utilization assumed in peak load range. 6/ Baseload component plus energy utilized between peak and base load. 7/ Peak load component defined as all energy required or generated at levels above the baseload. 3-41 TABLE 3-9 DISTRIBUTION OF HYDROELECTRIC AND DIESEL ELECTRIC POWER GENERATION FOR THE CATHEDRAL FALLS PROJECT (Values in KWh) See Percentage of Production Hydroelectric Diesel Supplied By Year Total Production Production Diesel a ere 1982 1,644,900 -0- 1,644,900 100 1983 1,764, 500 -0- 1,764,500 100 1984 1,884,100 -0- 1,884,130 100 1985 2,123, 400 1,718,500 404,900 19.1 1986 2,185,700 1,751,500 434,200 19.0 1987 2,248, 000 1,784,600 463,400 20.6 1988 2,310,200 1,817,600 492,600 21.3 1989 2,372, 500 1,850, 600 521, 900 22.0 1990 2,434,700 1,883,600 551,100 22.6 1991 2,512,200 1,916,600 595,600 23.7 1992 2,589, 700 2,424,800 164,900 6.4 1993 2,667, 300 2,443, 200 224,100 8.4 1994 2,744,800 2,461,600 283,204 10.3 1995 2,822, 300 2,480, 000 342, 300 12.1 1996 2,894,900 2,498, 400 396,500 13.7 1997 2,967, 400 2,516,800 450, 600 15.2 1998 3,040,000 2,535,200 504.800 16.6 1999 3,112,500 2,553,600 558, 900 18.0 2000 3,185,100 2,572,000 613,100 19.2 2001 3,290, 400 2,590, 400 700, 000 21.3 2002-2034 3,290,400 2,590,400 700,000 21.3 3-42 The Project will utilize the existing dam and consist of a power Conduit extending from the existing 36 inch diameter outlet works conduit to the powerhouse. The conduit will follow the route of a Previously existing wood stave penstock and an existing 6" diameter water line to the fish hatchery. A tee will be located on the power Conduit at the outlet works location to provide reservoir drawdown and sediment discharge if necessary. The powerhouse will contain two 150 KW horizontal francis turbine-generators in a standard package configuration which includes a butterfly inlet control valve. Turbine flow will discharge into the turbine discharge pits and into Gunnuk Creek. Additional facilities will include a switchyard, access road, and a transmission line. A general Project plan and approximate penstock profile is shown in Figure 3-12 and individual Project features are shown in Figure 3-13. Table 3-10 shows significant data for the Project. Hydrology: A daily flow duration curve was developed for the site using 4 years of data available from the Hamilton Creek gage. Hamilton Creek is a stream located about 8 miles southeast of Cathedral Falls on Kupreanof Island. The drainage area for the existing water supply dam was determined to be 14.5 square miles. The flows for the site were adjusted on the basis of the ratio of drainage areas between the Hanilton Creek gage and the Project site. The flow duration curve developed is shown in Figure 3-14. Power Operation and Energy Generation: The run-of-river mode of operation will allow for generation approximately 49 percent of the time, using the selected units. The selected units have a minimum operation level of 20 cfs. This corresponds to a minimum level of generation of about 100 KW. The plant will have a capacity up to approximately 60 cfs and a maximum output of about 300 KW. The average annual energy generation potential for the Project as proposed is 933,000 KWh. 3-43 EXISTING TIMBER BUTTRESS DAM 3.0' @ POWER CONDUIT ALIGNMENT EXISTING 8" PVC PIPELINE EXISTING HATCHERY EXISTING ROAD ee A TO KAKE gOS at EXISTING DAM ACCESS ROAD - : (APPROXIMATE ALIGNMENT) GUNNUK CREEK POWER CONDUIT TYPICAL SECTION ° 2 4 FEET Celle aE NOTE: PART OF PROJECT PLAN AND PROFILE INFORMATION IS BASED ON KAKE HATCHERY DEVELOPMENT PHASE IT REPORT. KRAMER, CHIN & MAYO, INC. APRIL 1980. ALASKA POWER AUTHORITY KAKE-PETERSBURG TRANSMISSION FEASIBILITY STUDY 10-00 12-00 14+00 16100 GUNNUK CREEK STATIONS HYDROELECTRIC PROJECT ALTERNATIVE POWER CONDUIT PROFILE PROJECT ARRANGEMENT FIGURE 3-12 EBASCO SERVICES INCORPORATED DAM CREST EL. 90¢ o H H H =| S| 5 4 H Hi EXISTING 36° EXISTING 30" @ OUTLET OUTLET rire ® EL. 694 IPE CONNECTED TO 8 PVC PIPE TO HATCHERY DAM-DOWN STREAM ELEVATION ) 0 20 FEET ‘SCALE TIMBER BUTTRESS a DAM S| al BRIDGE. 7 ‘SPILLWAY CHUTE GUNNUK CREEK +o + DAM- PLAN ° 0 20 FEET ‘SCALE ROOF WITH, REMOVABLE POWERHOUSE TRAVERSE SECTION CYLINDRICAL PREFABRICATED BUILDING STEEL DISCHARGE CONE ‘WEIR TWEL.IIt ° 4 6 FEET L141 ‘SCALE ‘SO'BUTTERFLY VALVE UNIT 2 (FUTURE) + ! ORIZONTAL FRANCIS ‘URBINE. RBINI BSCHARGE mm ALASKA POWER AUTHORITY KAKE- PETERSBURG TRANSMISSION a LIS Tih GUNNUK CREEK — HYDROELECTRIC PROJECT ALTERNATIVE DAM AND POWERHOUSE ARRANGEMENT FIGURE 3-13 EBASCO SERVICES INCORPORATED TABLE 3-10 GUNNUK CREEK HYDRO PROJECT SIGNIFICANT DATA RESERVOIR Normal Water Surface Elevation, ft V/ 84 Surface Area at Nomal Maximum Elevation, ac Negligible Estimated Useable Storage, ac-ft ne Type of Regulation None HYDROLOGY Drainage Area, sq mi 14.5 Avg. Annual Runoff, cfs/mi2 2/ 4.6 Streamflow, cfs £ Maximum Monthly 269 Average Annual 67 Minimum Monthly 7 DAM ; Type Timber Buttress (Existing) Height, ft 21 Top Elevation, ft V/ 90 SPILLWAY Type Broad Crested Wood Chute (Existing) Crest Elevation, ft V/ 84.0 Width, ft 29.5 Design Discharge, cfs unknown PENSTOCK Type Steel Diameter, ft 3.0 Length, ft 1,960 Shell Thickness, in. -188 1/ Elevations based on datum in the April 1980 report on the Kake Hatchery by Kramer, Chin and Mayo. 2/ Based on data for water years 1977-1980 from Hamilton Creek gage adjusted for drainage area. 3-46 TABLE 3-10 (Continued) POWERHOUSE Number of Units 2 Turbine Type Horizontal Francis Rated Net Head, ft 76 Generator Unit Rating, kW 150 Full Load Discharge, One unit, gfs 30 Normal Tailwater Elevation, ft i/ 11 POWER AND ENERGY Installed Capacity, kW 300 Firm Capacity, kW 0 Avg. Annual Energy Generation, KWh 933,000 COSTS AND ECONOMICS Construction Cost, $1,000 (1/82 bid level) 3,342 BASIC ASSUMPTIONS Contingencies a perce of Direct Construction s Escalation During Construction 7 percent of Direct Construction ost Engineering and Owner Administration 15 percent of DCC w/contingencies and escalation during construction 3-47 v q POWER OUTPUT OF UNIT 2 POWER OUTPUT POWER OUTPUT (KW) DISCHARGE (CF S) Y DISCHARGE V2 Yj LL Ys ANNNAN RSS WAALS NAXNNAN 10 20 FLOWS segee 7 Ny dS! os 3h PERCENT OF TIME FLOW -DURATION AND POWER OUTPUT VS. PERCENT TIME ALASKA POWER AUTHORITY KAKE-PETERSBURG TRANSMISSION FEASIBILITY STUDY GUNNUK CREEK HYDROELECTRIC PROJECT ALTERNATIVE HYDRAULIC DATA FIGURE 3-14 EBASCO SERVICES INCORPORATED In evaluating the average annual generation based on the flow duration Curve, a minimum fishery release of 10 cfs was used at streamflow levels equal to or greater than 10 cfs. The fishery release was Considered unusable for power generation. Water diversions at the dam for the city's water supply and hatchery purposes was assumed negligible. Enviromental Considerations: The potential impact on the fishery in Gunnuk Creek would result from varying natural flows in the creek in the reach between the existing dam and the proposed powerhouse. Fishery personnel who were operators of the hatchery and longtime Kake residents felt that a flow of about 5 cfs was adequate to maintain the fishery. In evaluating the potential generation capability of the Project a flow of 10 cfs for fishery releases was assumed. Potential impacts during construction would consist mainly of a short term temporary increase in suspended solids in the water due to the construction activities. Careful construction techniques should minimize the potential impacts and construction activities being scheduled at the most desirable time. Project Costs: The quantity and cost estimate for the Project is based on the preliminary arrangement and Project features as shown in Figures 3-12 and 3-13. In developing the construction cost for the project, unit prices were established based on recent Alaska project cost estimates prepared by Ebasco and equipment manufacturer information and these units prices were then applied to quantity estimates. A summary of the construction costs for the Project is shown in Table 3-11. This sunmary reflects the estimated costs based on a 1982 bid level and a Construction period of approximately 1.5 years. The total construction cost includes escalation during construction, contingencies, and engineering and owner administration. Interest during construction is not included. The factors applied to develop items other than the direct construction cost are shown in Table 3-10 as previously shown operating and maintenance costs are identical to those estimated for Cathedral Falls. 3-49 TABLE 3-11 GUNNUK CREEK HYDRO PROJECT COST ESTIMATE SUMMARY Item Cost V/ 1. Mobilization $300,000 2. Dam Spillway and Intake 120,000 3. Waterconductor 861,000 4. Powerhouse 92,000 5. Mechanical and Electrical Equipment 598,000 6. Access Roads and Bridges 160,000 7. Transmission 34,000 8. Supervisory Controls 70, 000 Subtotal 2,235,000 Engineering 436,000 Contingencies 671,000 Total Construction Cost2/ 3, 342,000 1/ 1982 bid level. 2/ Does not include interest during construction. 3-50 The mode of operation for the project as proposed will be run-of-river and as such will operate depending on the availability of water and the system load demand. Due to periods of flow below which the unit cannot operate and lack of storage, there will be periods of no generation and therefore the project will not provide any dependable capacity. During periods of adequate flows it is anticipated the Project will utilize the flow available up to the units hydraulic capacity or will generate at a power level equal to the system load. Since the installed capacity of the Project approximates the estimated future base loads, at the time of installation, it is anticipated that essentially all of the generation from the Project can be utilized within the systen. Because the Gunnuck Creek project is designed to produce 933,000 kWh/yr, a distribution of hydroelectric power vs. diesel power has been Calculated. This distribution is shown in Table 3-12. As is shown in Table 3-12, diesel generation must always supply one-half to three-fourths of the electricity required in Kake, Alaska over the life of the project. As a consequence, Gunnuck Creek is not really a significant alternative to diesel electric generation. Therefore, it is not analyzed further. 3.5 THE WOOD FIRED OPTION Kake, Alaska is a heavily wooded region where logging currently is on-going. Further, within reasonable (barge) transportation distances are sawaills and pulp mills. As a consequence, the use of biomass fuels in this region is not an unreasonable option. Biomass fuels are now used for power generation in the Forest Products Industry. Critical questions are fuel supply, system design, and cost. 3-51 TABLE 3-12 DISTRIBUTION OF HYDROELECTRIC AND DIESEL GENERATION FOR THE GUNNUK CREEK PROJECT (Values in KWh) Percentage of Production Total Hydroelectric Diesel Supplied By Year Production Production Production Diesel Se ee ee ee ee 1982 1,644,900 -0- 1,644,900 -0- 1984 1,884,100 933,000 951,100 50.4 1985 2,123,400 933,000 1,190,400 56.1 1990 2,434, 700 933,000 1,501,700 61.7 "1995 2,822, 300 933,000 1,889, 300 66.9 2000 3,185,100 933,000 2,252,100 70.7 2001 3,290,400 933,000 2,357,400 71.6 2002-2034 3,290, 400 933,000 2,357, 400 71.6 Sa Ra nee NE Te eT EBON Ee ANE On ne LEE 3-52 3.5.1 Biomass Availability The viability of any biomass fired power plant is intimately related to the source of fuel. Important fuel characteristics include the type of material, species, moisture content, particle size, cost, and availability. The biomass fuel available to this project includes sitka spruce and western hemlock which is common to this region of southeastern Alaska. In order to locate fuel, sawmill and logging operations within the general vicinity of Kake were surveyed by Ebasco. The results of the Survey indicate that there are in excess of 48,860 0.D. (oven dry) tons/year of residues available (see Table 3-13). Except for the fuel from Mitkof Luiber Company, all of the residues are located off of Kupreanof Island. From Table 3-13 it can be seen that there is approximately 6,870 0.D. tons/year of residues available from the Mitkof Lumber Company located at Petersburg. However, the facility does not operate any barges and would need to rely on ALP for barge transportation or would have to rent and operate the barges themselves. As can be seen from Table 3-13, the only remaining sources of fuel are that from the ALP operation at Wrangell and that from local logging operations in the vicinity of Kake. There are 23,460 0.D. tons/year available from ALP. Anple fuels (e.g., 15,000 0.D. Ton/yr) are also available from the logging operation near Kake. As indicated by the logging contractor, this material includes slash and unmerchantable trees. Under usual circumstances large diameter trees with a significant amount of butt rot offer the most economic recovery of selected clear materials. It is assumed that this is not the case here due to the expense of removing dead material from the woods. Rather, smaller pieces of logging residue are considered to be most economic. 3-53 TABLE 3-13 WOOD FUEL AVAILABILITY IN THE VICINITY OF KAKEL/ Moisture Quantity . Type of Content Tons (0.D.)/ Company Location Fuel (green) Year ae nese ne NO Pale OT Mitkof Lumber Co. Petersburg 53 percent bark 50 percent 6,870 33 percent sawdust 14 pecent planer shavings Alaska Lumber Wrangell 100 percent bark 50 percent 23,460 and Pulp Alaska Lumber Rowan Bay logging residue 40 percent 18,5302/ and Pulp (bark) Local Logging Kake unmerchantable 40-50 percent 15-18,000 Operations timber and slash Se 1 . : V/ All calculations assume an average moisture content on a green basis of 50 percent, a weight density of 49.2 Ibs /ft? S.W.E. and 85 Ft? S.W.E. /unit. = An additional 25, 660-29,837 0.D. tons of bark residue are currently stockpiled at the logging site in Rowan Bay. 3-54 The material being considered is expected to be high in ash as well as moisture content. To be burned as fuel this material would have to be reduced in size to about one or two inches nominal dimension. This can be done in the woods or at the power plant. Size reduction in the woods is inappropriate for several reasons: 1) the unavailability of chip vans to carry this material from the woods to the plant, and 2) the fact that larger diameter material would need to be split before being fed to a mobile size reduction unit. As a result it would seen that this material would need to be hogged at the power plant. The equipment required for processing the wood at the plant would include a log unloader, a log splitter for larger material, a hog or similar size reduction unit, and all associated conveyors and drives. The unit would require between 500 and 600 horsepower. 3.5.2 Fuel Costs As discussed previously, fuel can be purchased and barged to Kake. The cost of doing so was evaluated during the survey, and found to be $2.40/Ml Btu, not including additional barge unloading costs. As indicated earlier fuel can also be obtained locally from logging operations in the vicinity of Kake. It was indicated by one logging contractor that there is sufficient residues available to supply 15,000 to 18,000 0.D. tons/year for between 30 and 40 years. This material would cost somewhere between $30 and $40/0.D. ton of material delivered. Thus the annual delivered cost of the fuel for the 1500 kW facility would be $684,000 or $2.20/MMBtu. Also, there is no practical way of unloading the fuel barges at Kake, short of the construction of a pneumatic unloading facility, which would be very costly. Consequently, the local fuel is preferred, and purchased fuel from ALP is not considered further. An ultimate analysis of the material was estimated by using data available for sitka spruce and western hemlock. The ultimate analysis calculated is 5.7% hydrogen; 51.8% carbon; 38.4% oxygen; 0.1% sulfur; 0.2% nitrogen; and 3.8% ash. The higher heating value (HHV) used is 9070 Btu/1b. 3-55 3.5.3 Sizing of the Biomass Facilities The biomass fired electrical generation facility was sized as a result of current loads and expected load growths in the near future. It was also designed as a base load unit although it can accept load swings with an associated decrease in efficiency. As a result a 1500 kW full Condensing power plant was chosen for electricity generation in Kake. Biomass fuel requirements for this power plant was calculated from the Conceptual design. The plant will require approximately 15,900 0.D. tons/year of fuel. This is sufficient fuel to operate the facility for 8300 hours/year which is well within achievable limits as has been demonstrated in the pulp and paper industry. 3.5.4 Conceptual Design Because there are ample fuel supplies available at a reasonable cost, a conceptual design has been developed for a 1500 kW wood fired system. This design includes the materials handling system, the boiler, the turbine generator, and other associated equipment (e.g., the air quality control system). Materials Handling. As indicated previously, ample fuel supplies exist, however, procuring, preparing, and delivering them to the power plant could be expensive. The major problem associated with material handling is processing of whole logs removed from the woods. The use of whole logs from the local logging contractors in the area also involves significant problems. The most appropriate system is to transport the logs to the power plant for size reduction as indicated earlier. This would involve a log truck unloader, a bucking station, a splitter, and the wood hog. A significant amount of conveying equipment and storage decks will be required to keep a constant feed on the hog thus maximizing its efficiency and reducing the operating time of the wood preparation facility. Further when the facility is 3-56 operating the hog will require approximately 500 to 600 hp assuming a uniform feed and another 50 hp for the conveying equipment. Due to the size of the power plant and current electrical demand, the log Preparation operation would probably need to operate at night when electricity demand is low. Power Plant Design. The system chosen for analysis here is a biomass fired full condensing power plant with a maximum electrical generating Capacity of 1500 kW. The power plant could be operated as a baseload unit near full capacity during periods of average energy demands. During the hours of low energy consumption the power plant can be run at below capacity, although the steam rate of the turbine would increase significantly. The condensing steam turbine cycle was chosen due to the lack of any significant steam loads in Kake, Alaska. Although steam district heating could be employed, the cost of the distribution system as well as the increase in the steam rate of the turbine and the increase use of fuel associated with a cogeneration plant would make the approach very costly. The 1500 kW power plant requires approximately 4-to-6 acres for the boiler house, fuel storage and handling areas, and the truck dump. A general facility layout of the power plant is presented in Figure 3-15. As can be observed the majority of the land requirements are associated with fuel storage and handling. A schematic representation of the material flows of the Proposed 1500 kW power plant is presented in Figure 3-16 (these material flows are less the handling and size reduction requirements necessary to get the fuel to the fuel storage area). This flowsheet can be readily evaluated in relation to the general layout in Figure 3-15. To understand the design constraints in the material handling flowsheet it is necessary to understand the characteristics of the fuel which will be burned. All of these measures were incorporated into the design of the material handling system. 3-57 DRAG FLIGHT CONVEYORS CONTROL ROOM TRANSFORMER AND SwiTcH “| COOLING TOWER FEEDWATER TREATMENT FEED V-BELT CONVEYOR 16% RISE RETURN V-BELT CONVEYOR AUXILLARY FEED CONTROLS MULTICLONE STACK AND ID FAN BUILDING TURBINE- GENERATOR BOBCAT GARAGE WOOD FRAME AND SHEET aff METAL ROOF 20% PITCH RECLAIMER DRAG FLIGHT CONVEYOR C GRADED AND COMPACTED DIRT FLOOR 2% “) |P—ruew STORAGE STRUCTURE DRAG FLIGHT CONVEYORS 30% RISE AUXILLARY MATERIAL PREPARATION CONTROLS TRUCK DUMP DROP GATE DRAG FLIGHT DISTRIBUTION CONVEYOR HOS DRAG FLIGHT CONVEYOR [s—10" TIMBER 1-BEAM WALLS WITH CONCRETE FOOTING RUC RANE: 4% GRADE COMPACTE SOIL AND CRUSHED ROCK ALASKA POWER AUTHORITY KAKE-PETERSBURG TRANSMISSION GENERAL FACILITY LAYOUT OF WOOD FIRED POWER PLANT FIGURE 3-15 EBASCO SERVICES INCORPORATED NOMENCLATURE AD ASH DUMPSTER FH FUEL HOUSE RECLAIMING CONVEYOR AIR HEATER FP FUEL PILE ROTARY FEEDER AP ASH PIT FS FILTER SILENCER ROTARY VALVE BOBCAT H HOG RETAINING WALL DRAG CHAIN CONVEYOR HR HAND RAKE STACK DCD DISTRIBUTION DRAG CHAIN 1D INDUCED DRAFT FAN SURGE BIN ALASKA POWER AUTHORITY FBC FEED BELT CONVEYOR DG INTERMITTENT DUMPING GRATE SCREW FEEDER KAKE—PETERSBURG TRANSMISSION FC FUEL CHUTE IFD INDIVIDUAL FEEDER DRIVES SPREADER STOKER FEASIBILITY STUDY FD FORCE DRAFT FAN MC_ MULTICLONE SOURCE TEST PLATFORM FDO FUEL DISTRIBUTOR OPENING RBC RETURN BELT CONVEYOR TRUCK DUMP ee SCHEMATIC DIAGRAM OF MATERIAL FLOWS OF THE WOOD FIRED POWER PLANT FIGURE 3-16 EBASCO SERVICES INCORPORATED | o There must be sufficient fuel stored to continue to operate the Power plant due of possible delays in logging during the winter months. Thus, a large area is required for fuel storage. 0 Because of the weather in Kake a certain amount of the fuel will be stored under cover to prevent any further gain in moisture content and to possibly allow for a certain degree of air drying. o The facility should be capable of handling chip trucks if any in-woods chipping of slash is done. The boiler will consume approximately 8400 ft? /day of fuel or 350 ft3/hour. This corresponds to 3.88 tons/hour or 7770 Ibs/hr of fuel at a 50 percent moisture content on a green basis. The covered portion of the fuel house holds an eight day continuous supply of fuel while the whole fuel house is large enough to hold a 16 day supply of fuel. Adjacent areas can also be used to store any additional quantities of fuel or logs as required. The fuel house would employ a compacted dirt floor with a 2 percent slope to facilitate runoff of water. The walls could be constructed of 4" x 10" x 10' timbers inserted in the flange of a W4 -14 I-beam ina continuous concrete footing. The roof associated with the covered portion of the fuel house is wood framed with corrugated sheet metal roofing and a 20 percent pitch to facilitate water and snow runoff. The roof of the fuel house ranges in height from 15 to 25 feet above the side walls. Approximately 50 percent of the side wall area above the 10 foot retaining wall is left open to allow the unobstructed passage of wind. From the fuel house the fuel is recovered using a reclaimer. A rubber tired bulldozer is also used to keep the reclaimer conveyor covered. The fuel is then transported by a covered belt conveyor to a drag flight conveyor which distributes the fuel to the respective 10-minute surge bins of the stokers on the combustor. The fuel is fed at 20 percent above that required for combustion, the excess being returned to the fuel house. 3-60 The boiler used in this design is a spreader stoker with a Power-dunping grate with intemittent bottom ash discharge. The spreader stoker will use reciprocating feeders with individual feeder drives and distributor openings. The Power-dumping grate spreader stoker intermittently discharges ash into the ash pit located directly under the stoker grates. Four-way hand operated Pneumatic or steam powered cylinders activate the dumping mechanism. The installation as designed does not allow for sub-floor excavation and the installation of an ash hopper and automatic ash collection system. Because of the low fuel feed rate and the high cost of sub-floor excavation and foundation work hand raking of ash was selected. The boiler to be used will produce 25,000 Ibs/hr of superheated steam at 450 psig/575°F. The turbine generator employed is manufactured by the Terry Steam Turbine Company. The unit is rated at 2000 Hp or 1500 kW with a steam rate of 14.7 1bs/kWh. 3.5.5 Material and Energy Balance The steam cycle employs the boiler, flash tanks, deaerator, blowdown heat exchanger, turbine, and the condenser. Several assumptions were made before a heat balance was calculated. These assumptions are presented in Table 3-14. A heat balance about the boiler and the steam cycle is presented in Figure 3-17. The net enthalpy gain across the boiler will be 26.5 x 10° Btu/h. This will require approximately 35 x 10° Btu/h of fuel feed with a calculated gross boiler efficiency of 72 percent. Blowdown is 3 percent. This blowdown is flashed to steam and condensate in the flash tank. The feedwater pump is operated by a steam turbine while the condensate pump is operated by and electric motor. A blowdown heat exchanger is used to preheat the makeup water. A cooling tower is employed in conjunction with the condenser. 3-61 TABLE 3-14 OPERATING ASSUMPTIONS FOR THE HEAT BALANCE OF THE CONDENSING POWER PLANT — PARAMETER VALUE BOILER CYCLE Combustion Air Temperature (to air preheater) 40°F Combustion Air Temperature (to combustor) 200 °F Stack Flue Gas Temperature 280°F Fuel Moisture Content 50 percent Excess Air 40 percent Carbon Conversion 98 percent STEAM CYCLE Bl owdown 3 percent Deaerator 10 psig Steam to Turbine Steam Conditions Turbine Efficiency (multistage) Condenser Pressure Flash Tank Split (mass and energy balance) Feedwater Turbine Steam Usage Feedwater Turbine Efficiency GENERATOR Generator Efficiency Electricity Production (gross) Electricity Production (net)! 22,534 1bs/h 450 psig/575°F 62 percent 5" HgA 25 percent steam, 75 percent condensate 349 Ibs/h 65 percent 98 percent 1500 kWh 1300 - 1400 kWh, V/ tess the requirements for the log preparation equipment. ee ae 3-62 PREHEAT AIR 1663x108 Btu/h BOILER QH=26.503x108 Btu/h n= 72% FUEL 7772Ib/h 35.246x10° Btu/h ASH 124 Ib/h Sar RADIATION Loss °°2SxI0" BtWh 1.410x 10° Btu/h 756 Ib/h 441.06 Btu/Ib 450 psig/460°F 0.333x108 Btu/Ib 25750 Ib/h 220 Btu/Ib 5.665xl0°Btu/h STACK EXHAUST 6.39 Ib/h Particulate 5.00 Ib/h NOo 4.48 Ib/h SOp 2.39 Ib/h CO 349 Ib/h 450 psig/575°F 1286.7 Btu/Ib 0.449x106Btu/h 349 Ib/h_ lO psig 0.365x10°Btu/h 1049 Btu/Ib FEEDWATER TURBINE 185 Ib/h_239°F 1160.4 Btu/Ib 0.215x10® Btu/h 22534 |b/h 28.995x10° Btu/h 2117 Ib/h 450 psig/575°F 1286.7 Btu/Ib 2724x108 Btu/h VENT LOSS 0.026 x10® Btu/h DEAERATOR 10 psig 57|Ib/h_239°F 207.8 Btu/Ib 0.118x10° Btu/ib FEEDWATER 571 |b/h 199°F 8 Bru/yp O°Btu/h oO 1500 kW GHP CONDENSATE PUMP 71 tb/h_ 28 Btu/ib_ 60°F 0.016 Btu/h HEAT EXCHANGER TO WASTE 571 Ib/h 68Btu/Ib 100°F 0.039x10 Btu/h EBASCO SERVICES INCORPORATED MAKEUP WATER ALASKA POWER AUTHORITY KAKE-PETERSBURG TRANSMISSION FEASIBILITY STUDY MATERIAL AND ENERGY BALANCE ABOUT WOOD FIRED POWER PLANT FIGURE 3-17 Based upon the data presented in Table 3-14 and Figure 3-17 a heat rate of approximately 24,000 Btu/kWh can be calculated. This heat rate Corresonds to a cycle efficiency of 14.2%. A typical heat rate for a large wood-fired unit would be approximately 14,000 Btu/kWh. The very small size of this unit, however, results in the severe efficiency penalty. Despite this penalty, however, wood fired units may be cost effective. At $2.20/million Btu, the cost of fuel is $.053/kWh. This compares to $0.91/kWh for diesel assuming a heat rate of 11,000 Btu/kWh and a fuel cost of $8.30/million Btu. 3.5.6 Environmental Impacts Due to the small size of the facility it is not expected that air pollution requirements will be difficult to meet particularly when burning wood or bark fuel. Air pollution limits were taken from Title 18 Environmental Conservation; Chapter 50, Air Quality Control; Article 1, Program Standards and Limitations for Industrial and Process and Fuel Burning Equipment. The calculated uncontrolled emission rates of particulate, nitrogen dioxide, sulfur dioxide, and carbon monoxide as well as the allowed emission limits and net emissions from the boiler are presented in Table 3-15. It can be seen that all emissions except those of Particulate are below the allowed emission limits. For the control of particulates a multiclone or a baghouse can be used. With these control methods net emissions of particulate will be 154 1bs/day and 8 Ibs/day, respectively. Current diesel emissions at this load, postulated boiler emissions in excess of 90 percent of load, and the net change of emissions around the diesel and biomass units is presented in Table 3-16. Although particulate and sulfur dioxide emissions will increase slightly the emissions of nitrogen dioxide and carbon monoxide will be significantly reduced as a result of the biomass unit being operated. 3-64 TABLE 3-15 EMISSION RATES OF AIR POLLUTANTS __ Or cM SSS Net UncontrolledS/ Allowed Emission Emission Emissions Pollutant Tbs/hr — Tbs/day ~ ppm = Limit (1bs/day) Compliance Control 1bs/day ee ee ee Particulatel/ 64.00 1536 -- 2806/ No Multiclone8/ 154 Baghouse2. 8 Nitrogen Di oxide2/ 5.00 120 94.5 no limit Yes None 120 Sulfur Dioxide3/ 4.48 108 61.2 10122/ Yes None 108 Carbon Monoxide4/ 3.20 77 74.0 4402/ Yes None 77 V/ Assumes 66 percent of ash and unburned carbon as bottom ash and 34 percent as flyash. 2/ Assumes a 20 percent conversion of fuel bound nitrogen to nitrogen dioxide. 3/ Assumes a 60 percent conversion of sulfur to sulfur dioxide with the excess of 40 percent being present in the bottom ash. 4/ Assumes 10 percent of unburned fly-carbon is converted to carbon monoxide and a carbon conversion efficiency of 98 percent. 5/ All values are at 11 percent CO? on an ACFM basis and 14 percent on an SDCFM basis. §/ This value was calculated for an emission limit of 0.15 grains/SDCFM. Z/ This value was calculated from an emission limit of 500 ppm. 8/ Assumes a multiclone efficiency of 90 percent on a weight basis. 9/ Assumes a baghouse collection efficiency of 99 percent with a multiclone efficiency of 50 percent. A low multiclone collection efficiency was used to facilitate the proper formation of flyash on the bags which directly effects bag porosity and thus the collection efficiency. _ rr eee TABLE 3-16 NET EMISSIONS CHANGE Current Postulated Net Net Emission 5yom Enission Change4/ Change4/ Diesel s!22/ From Boiler In Emissions In Emissions Pollutant lbs/hr lbs/hr lbs/nr lbs/day Particulate 0.10 6.40 multiclone 6.3 151.2 0.30 baghouse 0.2 4.8 Nitrogen Dioxide 18.05 5.00 (11.25)2/ (270)2/ Sulfur Dioxide 3.80 4.48 1.0 24 Carbon Monoxide 9.30 3.20 (5.20}2/ (125)2/ 1/ 1450 kWh or approximately 2000 BHP. </ Using manufacturers average reconmendations. Particulate 0.024 grams/HP-HR; carbon monoxide 2.17 grams/HP-HR; and nitrogen dioxide 4.2 grams/HP-HR. =’ Sulfur dioxide estimated from AP-42 estimates. Rate is 142 x 5 percent sulfur by weight in oi] = 1bs/10° gallons. Weight percent sulfur 0.3 percent in distillate oil. Fuel usage 90 gallons/hour. 142 x 5 percent/1,000 = 0.1425 1bs/gallon. Therefore, 0.142 x 0.3 x 90 = 3.80 1bs/hr. 4/ From Table 3-2. 5/ Values in parenthesis indicate a net decrease. 3-66 Bottom ash from the dumping grates will amount to approximately 125 lbs/h or 1.5 tons/day. Collected flyash from the multiclone will be 57 lbs/hr or 0.69 tons/day while collected flyash from the multiclone and baghouse if used will be 60 1bs/hr or 0.72 tons/day. The bottom ash will be hand raked into a dumpster while collected flyash will be screw feed to hoppers. This material can be land filled. 3.5.7 Cost Estimate A detailed cost estimate (bid basis) of the wood fired unit has been prepared in 1982 dollars, based upon the design presented above. It assumes no unusual site or soil conditions, a system designed for 9% relability, no auxilliary fuel, and Alaska construction conditions and Practices. The capital cost estimate is $3,625,000. It is detailed in Table 3-17. It is assumed that, through the use of package equipment, the system can be engineered and built within an 18 month time frame depending upon scheduling and weather. Consequently, the unit could be operated within two years after a decision is made to proceed. Non-fuel operating and maintenance costs are estimated at $295,000/yr. This includes two persons per shift (4-shift basis), a supervisor, and $25,000/yr for parts and general maintenance. These operating costs are significantly higher than those estimated for other systems. Wood fired units are more labor intensive because of the material handling problems. In conclusion, then, the option does exist for replacing diesel fuel with a combustible renewable resource. The trade-off is between high fuel costs and high capital and operating costs. 3-67 Iten Boiler System Turbine-Generator Systen Materials Handling System Air Quality Control Systen Other Mechanical Systens Miscellaneous Mechanical and Electrical Systems Civil Engineering Systens Subtotal Engineering Contingencies Total Installed Cost TABLE 3-17 CAPITAL COST ESTIMATE FOR A 1500 KW WOOD FIRED POWER PLANT 3-68 Cost $817,000 287,000 161,000 54,000 341 ,000 484,000 _585,000 $2, 388, 000 $2,388,000 218,000 678,000 $3,625,000 3.6 WIND GENERATION OPTION The use of windmills or wind turbines is the final electricity generation option studied as an alternative to the use of diesel power in Kake, Alaska. Again, renewable resources are substituted for fossil energy. As a consequence, this alternative is considered, in detail, here. Considerations involve resource availability, siting considerations, and technologies available.2/ 3.6.1 Resource Considerations Traditionally the area of distribution of the wind resource has been described by isopliths of wind speed. However, in defining the wind resource for use in estimating the potential output from wind machines, a more useful measure is wind power density, or the power per unit of cross-sectional area of the wind stream. Power density (P/A) can be defined by the following equation: P/A = 1/2 pW? where p = air density and v = velocity. This equation illustrates the important influence of wind speed. Power is a cubic function of wind speed. A doubling of wind speed increases wind power eight times. a/ This analysis is contained in: Barkshire, J. and M. Newell. _ 1982. Evaluation of Unconventional Energy Alternatives. Interim Report, Kake-Petersburg Transmission Line Study. Polarconsult, Anchorage, Alaska. 3-69 Unfortunately, there is very little specific data with which to form a Conclusion on wind power at Kake. Although wind speed and direction have been recorded at Kake for some time, the information exists only in unsummarized form. In addition, the wind recording equipment at Kake, while on a 30 foot high tower, is located down on the beach below the road, thus making the net height only 10-15 feet. It is further partially obstructed by the post office across the road. It is highly likely that this data is not representative of the entire Kake area. Compounding the problem of analyzing wind conditions at Kake is the fact that wind conditions in Southeastern Alaska are extremely local. The two closest wind recording stations, at Sitka and Petersburg, are probably not representative of Kake at all, as Wise has shown.1/ Most of the wind power in Southeast Alaska is generated by atmospheric pressure gradients with lowest pressure associated with stoms in the Gulf of Alaska and relatively high pressures over the mainland. The pressure gradient winds tend to blow along the isobars - mostly from the southeast - but inareas of rough terrain the wind will blow almost directly from high to low pressure. Consequently, the winds in Southeast Alaska tend to blow parallel to the axis of a channel, strait, passage, or valley. Kake's location on Keku Straight adjacent to Frederick Sound makes it a prime candidate for a fairly high wind power class rating. In lieu of accessible recorded data, we must rely on these ratings used in the above referenced work by Jim Wise. V Wise, J. “Wind Energy Resource Atlas: Volume 10 - Alaska." Prepared under contract to Battelle Pacific Northwest Laboratory, December, 1980. 3-70 Wind power classes throughout Southeastern Alaska are shown on Table 3-18, along with estimated wind classes for Kake, Alaska. The whole of Kupreanof Island has been assigned an annual average of 5, towards the upper end of the scale. Note also the table included with the illustration, detailing wind power density in watts per meter” ata 10 meter height. Wise further broke down the classes to seasonal wind power. In all but a few isolated cases in Southeast Alaska, the highest to lowest wind Power seasons are winter, autumn, spring, and summer. Seasonal power classes for the Kake area are shown in Table 3-18 as previously mentioned. It should be noted that each power class represents the range of wind power likely to be found at well exposed sites. These classes are approximations of the aerial distribution of wind power, and the demarcation between them should not be construed to represent definitive boundaries. In mountainous areas the estimates are based on the correlation between mountaintop wind speeds and free air wind speeds. Wise extrapolated upper air data to lower elevations, e.g., mountain crests - from the mean scaler wind and use of a Rayleight wind speed distribution to Produce a power estimate. To account for frictional effects near the surface, this extrapolated free-air wind speed was reduced by two-thirds for power at 10 meters, and one-third for Power at 50 meters. It should be obvious from all of the above that there is a great need to more fully determine the wind resource at Kake. The first step would be to sunmarize the existing data, coupled with a more in-depth monitoring of specific sites. Due to a lack of other data, further assumptions concerning wind generator power production in this report will be based on the wind power class rating referenced herein, of 300 watts per square meter at a ten meter height on an annual average. 3-71 TABLE 3-18 WIND POWER CLASSES AND THEIR RELATIONSHIP TO KAKE, ALASKA Wind Power Density Watts /m@ Wind Power Class (at 10 M) Wind Power Classes by Energy Density 1 100 2 150 3 200 4 250 5 300 6 400 7 1000 Seasonal Wind Power At Kake Season Power Class Winter 7 Autumn 5 Spring 4 Sumner 2 3-72 3.6.2 Siting Considerations There are some problems in siting wind generators in the Kake area. The village sits upon a very narrow coastal plain at an elevation beginning around 8 feet above sea level. At the eastern side of this plain, the hillside rises rapidly to an elevation of 100 to 150 feet. The hillside gradually steps upward from here towards the top of Kupreanof Island, with a dense spruce cover creating an almost unbroken Carpet. The highest point in the vicinity is at the northern part of the island at an elevation of 2867 feet, and is a considerable distance from Kake. Because of prevailing wind directions from the sea and the dense tree cover, siting to avoid turbulence would be of extreme importance at Kake. It is likely that towers higher than those usually used would be necessary to adequately clear the trees in the vicinity of the wind generator site. The higher tower(s) would also minimize the turbulence form the hillside behind the village. It is important to recognize that a good wind site is not only one with high winds, but also steady winds. Turbulence at high speeds is hard on wind generators, producing stresses which can destroy machines which could survive much higher winds if they were steady. Turbulence also lowers wind generator output, since the machine cannot react instantly to rapid changes in wind direction. There are two generalized areas at Kake where wind generators could be sited - adjacent to the town, or on the hilltops behind. There is one large advantage to the latter, as the turbulence discussed previously could, in theory, be minimized at the higher locations. This is by no means a given, however. A study of topographic maps combined with a flight over the hillside confirmed that there is a fairly uniform slope all the way to the top. Thus, a generator would need to be sited a considerable distance from Kake, on the ridgetops, to be theoretically free from topographically influenced turbulence. 3-73 Weighing the increase in transmission line costs and the difficulty in easy access to such a site against the possible benefits discussed above, it was decided that a site(s) closer to town would prove more feasible. Taller towers and careful siting could likely alleviate any potential turbulence problems. Wind generator sites adjacent to Kake are somewhat limited by topography, tree cover, and present land use. Three candidate sites were chosen after an exhaustive walk-through of the village area and subsequent study of topographical maps. They are illustrated in Figure 3-18. Site number 1 is located on the hillside directly above the village proper, or a small knoll at the 166 foot elevation. The hill does not rise to an evalation above this knoll for approximatly 1200-1400 feet north/northeast. Access to this site is not difficult, as a new road (under construction at this writing) connecting the newer housing subdivision to the school/city hall area is about 400 feet away. There is a dense cover of spruce at and all around the knoll; clearing of the immediate site area and access road be necessary. Although the height of trees was measured during the site visit, height of the spruce trees appears to be in the 60-80 foot range. Thus, tower requirements would dictate at least 100 foot heights for small machines; actual height would depend on wind generator size and the related rotor diameter. Site number 2 is directly adjacent to the powerhouse, approximately 1 mile south of the village proper. It is a plateau that sits ona bluff about 50 feet above the road. The area is partially cleared and has a much less dense tree cover than site number 1. Access could most easily be accomplished by running a road directly behind the powerhouse up to the plateau. Although this second site offers advantages due to its proximity to the powerhouse and its relatively clear area, the hillside does rise quicker and more sharply beyond the plateau. Elevation is approximately 100 feet higher at a distance of 800 feet from the 3-74 ROAD UNDER CONSTRUCTION, = =—S=-- tah \ = ‘EXISTING ~~ \\ANEMOMETER Visite fi Post fi oF FICE GUNNUK CREEK loo LITTLE GUNNUK CREEK in oan 100 __s 7 SITE#2 POWERHOUSE ALASKA POWER AUTHORITY KAKE-PETERSBURG TRANSMISSION FEASIBILITY STUDY POSSIBLE WIND GENERATION SITES ADJACENT TO KAKE FIGURE 3-18 EBASCO SERVICES INCORPORATED bluff. Although use of a taller tower would most likely alleviate any turbulence problems, this site would require that monitoring by instrumentation be perfomed to determine minimum tower heights prior to any capital investment for wind generator equipment. Site number 3 is located approximately 1000 feet from number 2, directly up the hillside on a knoll at 149 feet elevation. It is the highest point in a radius of 1200 feet. This site exhibits many of the same characteristics of site number 1, with slightly less dense spruce cover. It is closer to the powerhouse than site 1, and less prone to the potential of direct turbulence from the hillside behind than site 2. However, of the three sites examined, this one would have the longest and most difficult access road. In addition, the hillside ‘ above it rises to a series of peaks, forming several narrow and shallow valleys. The extent of turbulence from this phenomena is presently unknown. 3.6.3 Technology Considerations There are about 50 manufacturers of wind generators in the United States today and an equal number abroad. Machines range from experimental first generation units to well-proven production models with several years of operating experience. Because of the wide variability in size, type, and energy output of wind generators, it is desirable to reduce these variables to a single Parameter that reflects potential output capability. This parameter is defined as rotor swept area. The amount of energy intercepted by a wind turbine and converted to usable energy is primarily dependent upon this swept area; i.e., the area of the windstream that is intercepted by the wind turbine. Once the swept area is defined, potential output can be calculated by assuming an overall operating efficiency representative of today's high speed wind turbines. 3-76 Thus, in equation forn: P/A x Ax % efficiency = Mean Power Output where, P/A is power density as described above and Ais the swept area. Mean Power Output (MPO) is a measure of the average output of the turbine, is independent of the generator size, and can be used to produce an average energy output over any time period. Annual Energy Output is most often used. Wind speed and hence power increase with height above the ground. The above calculations are based on wind power at 10 meters height (33 feet). Most small machines will use at least 60 foot towers; at Kake the tower height will be greater for utility intertied machines due to topography and tree cover. Therefore, it will be necessary to increase the MPO or Annual Energy Output to reflect the increased power available at greater heights. Wind power data for various nominal tower heights are shown in Table 3-19. TABLE 3-19 WIND POWER AT NOMINAL TOWER HEIGHTS (kW) ee SZ ee Power Class W/n2 100 Ft. 150 Ft. 200 Ft. eee 1 100 161 192 217 2 150 242 288 326 3 200 322 384 434 4 250 403 479 543 5 300 483 575 651 6 450 725 863 977 7 1,000 1,611 1,918 2,170 3-77 Wind Turbine Types and Sizes. Wind turbine rotors spin about either a hori zontal or vertical axis. At present, vertical axis machines are not at commercial maturity. In addition, the turbines are typically Mounted on very short towers, a problem at the Kake wind sites. For these reasons, our analysis will center on horizontal axis turbines. Wind generators have comionly been referred to by the size of the generator; this reflects conventional power plant design. Because wind speed varies so widely, it becomes necessary to define a wind speed at which a particular generator reaches its rated capacity. As there is no standard rated wind speed, generator size is a poor indicator of either Mean Power Output or Annual Energy Output. The methodology chosen for analysis uses rotor diameter to define wind generator sizes. Table 3-20 illustrates some comparisons between rotor diameter, kW capacity, and machine size. TABLE 3-20 NOMINAL KW CAPACITIES FOR ROTOR DIAMETERS kW Capacityl/ Rotor Diameter Snail 0-50 0-15 meters Medium 50-1000 25-75 meters Large 1000-5000 75+ meters V/ Rated at 30 mph. It should be noted that the large machine category reflects wind generators such as the MOD-1 at Boone, North Carolina, ad the MOD-2 at Goodnoe Hill, Washington. This size of machine is not applicable at Kake, for the following reasons: 3-78 1. Capital cost is in the multi-million dollar range. 2. Stability to the grid is questionable in comparison to multiple medium sized units. 3. Flexibility to match future incremental loads as they come on line is diminished; i.e., overbuilding of capacity at an early stage. 4. Experimental nature. Smal] machines, operated at 30 mph wind speed, have a maximun capacity of 10-50 kW. Consequently, they would make little contribution to the supply of electricity in Kake. Further analysis, therefore, is limited to medium sized machines. No units in the medium size range have been installed in Alaska. Several units have been installed in the lower 48 and in Canada. There are only a handful of manufacturers presently building machines of this size and none are in mass production. However, a considerable number of hours have been logged on these machines and data on reliability and perfomance is available through the Department of Energy's MOD-OA Program and tests done by WTG systems. Medium sized machines range in capacity from 200 to 500 kW of capacity, as is shown in Table 3-21. Most are in the 200-250 kW range. Asa consequence a wind fam of 6-7 units would be required to meet the electricity needs of Kake, even at optimal wind speeds. Wind fams of less than 3-4 units would be incapable of meeting 50% of the peak load of Kake, even in favorable conditions. Further, because wind power, like run-of-river hydroelectric power, replaces energy but not dependable capacity; a complete diesel system would have to be Maintained in order to supply anywhere from 0 to 100% of the electricity requirements of Kake. 3-79 TABLE 3-21 MEDIUM SIZED WIND TURBINE CAPACITIES Manufacturer KW Capacity// Rotor Diameter WTG Systens 200 25 meter DAF 230 37 x 34 meter Alcoa 300-500 38 x 27 meter Westi nghouse 200 38 meter Voland 250 28 meter V/ — Rated at 30 mph. 3-80 3.6.4 Conclusions There are clear uncertainties in the wind resource available at Kake, Alaska. While the location is generally favorable, data are not available permitting reliable resource estimation at this time. What data are available, however, demonstrate that the wind resource varies widely in quality throughout the year. This variation makes capital utilization difficult, at best, to plan. It carries the implication that any development would result ina system with less than the desired reliability, particularly given the lack of an intertie for electricity supply. In addition to questions concerning the resource there are significant uncertainties concerning the viablity of sites available. Further, there are substantial limitations concerning the technology, and these limitations make it questionable that wind power could provide a significant share of Kake's electrical needs ina cost-effective manner. Further, a complete diesel system would have to be maintained ina state of total readiness to support wind generation because of reliability issues. For these reasons economic analysis of wind energy is not carried forward. 3.7 NON ELECTRIC ALTERNATIVES There are numerous non-electric alternatives which have been considered for Kake. These are addressed in a report by Polarconsult as a part of the feasibility analyses. Results appear as an appendix to the Final Feasibility Report. These include: Weatheri zation of buildings; Insulation of buildings; Passive solar space heating; Passive solar water heating; Fuel oil furances; Heat pumps, and Household wood furnaces. 3-81 Many of these options are being used, at least partially, now. Others ; . : : ; a make sound economic sense in their own right, as studies have shown.2/ The economic analyses of e1 ectricity demand in Kake as presented in Chapter 2 of this report, demonstrate that heating requirements are unrelated to electricity requirements in that community. Asa consequence practices such as insulation and weatherization, if implenented, would not significantly alter the demand for electricity in Kake. Similarly, alternative means for heating of households will not alter demand for electricity. It is useful to note that there is one partial exception to the total segregation of thermal and electrical systems. That exception is heat - Pump technology. Heat pumps basically transfer heat from a cooler location (outside a house) to a hotter location (inside a house). In the process the heat is intensified. Electrically powered heat pumps have been demonstrated successfully in Juneau, Alaska. Climatic similarities indicate that technical success could be achieved in Kake, as heat pumps can be effiective at temperatures as low as 25°F (the mean low temperature in Kake is 36°F). Polarconsult, however, has concluded that heat pumps are not appropriate for Kake. The cost of electricity in Kake of 20-36¢/kWh (Compared to 3.6¢/kWh in Juneau) makes their operation prohibitively expensive. Polarconsult concludes: "It is clear that without a radical reduction in electric prices heat pumps are not viable at Kake."2/ a/ This analysis is contained in: Barkshire, J. and M. Newell. 1982. Evaluation of Unconventional Energy Alternatives. Interim Report, Kake-Petersburg Transmission Line Study. Polarconsult, Anchorage, Alaska. 3-82 As a consequence of this assessment heat pumps have not been included in the load forecast. Further, like the other thermal options, they are not included in the subsequent economic analysis. 3.8 CONCLUSION There are numerous alternative means for meeting the electricity requirenents of Kake, Alaska. Of them, the following show considerable promise: Diesel Generation; Transmission Line Interite; Cathedral Falls Hydroelectric Project; and A Wood Fired Power Plant. Each option identified has distinct advantages and disadvantages in areas of capital cost, operating cost, and fuel cost. They are all Subjected to present worth and benefit/cost analysis in Chapter 4. 3-83 4.0 BENEFIT/COST ANALYSIS OF THE KAKE, ALASKA ELECTRICITY SUPPLY OPTIONS Four options have been carried forward for economic evaluation: 1) Diesel-electric generation (the base case); 2) The Kake-Petersburg transmission line intertie; 3) The Cathedral Falls hydroelectric project, with supplemental diesel generation; and 4) The wood fired power plant option. Each of these alternatives is based upon an established reliable energy technology. Each option can supply the electricity needs of Kake and, with the exception of the base case, can displace over 50 percent of the fossil based generation with renewable energy resources. Consequently, all options except the base case afford a significant measure of protection from escalating fossil energy prices. Benefit/cost (B/C) analysis is the method employed to evaluate these options. Benefits are defined as the present worth of all costs associated with the base case (benefits are defined as cost foregone). Benefits may also include values outside the base case costs (e.g., the value of oil displaced by district heating). However, these values did not occur in the Kake situation. Costs are defined as the present worth of all costs associated with the alternatives to the base case. 4.1 ASSUMPTIONS FOR ANALYSIS In order to perform this B/C analysis numerous assumptions have been made. The general assumptions are presented in Table 4-1. With regard to these assumptions it is useful to note that the project base year is defined by the dollar base required. The termination year is defined by the life of the longest enduring alternative project (hydro), after it has been built. 1833 4-1 TABLE 4-1 GENERAL ASSUMPTIONS FOR BENEFIT-COST ANAL YSIS Capital Investment Assumptions 1) Base Year = 1982 (Project Year 0); 2) Project Planning Period = 1982 - 2001 3) Termination Year = 2034 (Project Year 52); 4) Discount Rate = 3.5% (Real Basis) and 5) Salvage Value = Capital Investment x Unused Project Life otal Project Life Electricity Supply Assumptions 1) Electricity demand will follow the Reaune Projection to the year 2001; and 2) Electricity demand will be constant for the years 2003-2034. Inflation Assumptions 1) Fossil fuel prices will escalate at a real rate of 2.5% to the year 2002, and remain constant thereafter; 2) Operating and maintenance costs will escalate at the rate of inflation (real rate = 0%); and 3) Capital costs will escalate at the rate of inflation (real rate = 0). In addition to the general assumptions applicable to all cases, numerous specific assumptions and values have been developed for each Case. These are presented in Table 4-2. With respect to the assumptions in Table 4-2 it is important to note that the capital investment values are for one plant of the selected technology. Whereas in the economic analysis of the alternatives, the total dollar value of diesel generation units installed over the project evaluation period is $2.9 million. The total dollar value of investnents in the transmission line is $17.6 million. For the Cathedral Falls project the total investment, including diesel units, is $8.40 million. The total investment in wood fired systems is $10.9 million. These values are not discounted, and do not include reductions for salvage value. Capital investment schedules, by project, are presented in Table 4-3. The assumptions in Table 4-2 are made increasingly complex by the distribution of alternative power vis a vis diesel power. In the case of Cathedral Falls, the system planned is a run-of-river project. As a consequence, a full diesel generation station must be maintained in a state of readiness. This implies a full work force, a regular Maintenance schedule, and one investment rotation. The life of the new machines is considered sufficient to last through the life of the hydroelectric power facility due to reduced operating hours. The diesel component of the transmission line and wood fired units is estimated based upon reliability of the primary systems. In both cases 956 reliability is assumed. This reliability value may appear high, particularly for the wood fired units. However, 8,300 hr/yr is commonly achieved in well designed hog fuel boilers and cogeneration systems owned and operated by the pulp and paper industry as previously discussed (see Chapter 3, Section 3.5). Because of this reduced diesel requirement no investment cycle is required, and diesel O& costs are largely subsumed into the work crews of the primary units, except in the year 1983, when the primary (transmission or wood) units are not operating. TABLE 4-2 SUMMARY OF ALTERNATIVE-SPECIFIC ASSUMPTIONS AND VALUES (Dollars are 1982 Dollars) Project Transmission Cathedral Wood Fired Parameter Base Case Li ne* Falls Plant Capital Cost ($ million) 1. 2008/ 8.988 7.461b/ 3.625 Project Life (yrs) 20 30 50 20 Electricity Supply (Percent of total Kake requirement) 100 g5c/ 60-70¢/ gsc/ Heat Rate (Btu/kWh) 11,000 n/ad/ nsad/ 24,000¢/ Fuel Cost ($/million Btu) 8.30 N/A N/A 2.20 0 & M Costs ($thousand s) 147 120 45e/ 295 * All values are preliminary. a/ Staged as replacements for existing units as per Chapter 3. b/ Includes $0.413 million for second turbine. one cycle of diesel generation replacement. £/ The remainder is supplied by diesel. 4/ The diesel heat rate applies to the percentage of power generated by that technology. Does not include £/ This does not include 0 & M costs for a full diesel plant. 4-4 TABLE 4-3 ALTERNATIVE INVESTMENT SCHEDULES BY PROJECT (values in million 1982$) ' Year _ ! Calendar Project 1983 1 1984 2 1989 7 199 9 1995 13 2003 al * 2009 27 2013 31 2015 33 2023 4 2029 47 2034 52 8/ Salvage values. Project Alternatives Diesel System 0.513 0.687 0. 513 0.687 0.513 (0.42)2/ Transmission Line 8.988 8. 988 (2.70)2/ 4-5 Hy dro 7.048 -413 (0.06)2/ Diesel for Hydro Wood 0.513 0.687 3.625 3.625 3.625 (1.63)3/ For evaluation purposes capital investments are assumed to start in the base year, 1982. This assumption is made for consistency in the economic analysis. It will be relaxed in the consideration of optimun timing, to be presented in the final report. 4.2 BENEFIT/COST RATIOS Based upon the previously mentioned values, the present worth of costs has been calculated for each option based upon the previously mentioned values. These values are presented in Table 4-4. They provide for a preliminary ranking of options as follows: 1) Transmission line; 2) Diesel electric (base case); 3) Hydroelectric generation ; and 4) Wood fired power generation. This ranking is slightly deceptive. The transmission line and diesel options have present worth of costs over 52 years of less than $14 million. The hydroelectric option has a present worth of cost value of $14.9 million. There is little, if any, difference between transmission line, diesel, and hydroelectric alternatives. The wood fired option is the most expensive alternative. These values are based upon the present worth of costs as calculated. This ranking can also be illustrated by the primary analytical tool, the B/C ratio. B/C values are presented in Table 4-5. This confims the slight apparent advantage of the transmission line, the convergence of the transmission, diesel, and hydroelectric systems, and the relative disadvantage of the wood fired unit. TABLE 4-4 THE PRESENT WORTH OF COSTS FOR ELECTRICITY SUPPLY OPTIONS FOR KAKE, ALASKA (Values in Millions of 1982 Dollars) Diesel Transnission Hydroelectric Wood Fired Base Case Line Power Unit Primary Unit 13.7 12.4 8.3 16.2 Diesel Backup N/A 1.0 6.6 1.0 Total 13.7 13.4 14.9 17.2 TABLE 4-5 BENEFIT COST RATIO OF THE ELECTRICITY SUPPLY OPTIONS FOR KAKE, ALASKA Calculation Option atues in $ million) B/C Ratio Diesel (Base Case) $13.7 1 13. Transmission Line $13.7 1.02 13.4 Hydroelectric Generation $13.7 0.92 $14.9 Wood Fired Generation $13.7 0.80 17.2 4.3 COST OF POWER ANALYSIS The closeness of the options is illustrated not only by the B/C ratios but also by costs of power analysis. As a Consequence cost of power data are presented here for the four options analyzed. Cost of power is calculated, for each option, by the following formula: CP ($/kih) = 1x CRF + O&M +F y Where CP = cost of power, I = investment (other than sunk costs), CRF = Capital Recovery Factor, OaMy, = operating and maintenance costs for any given year, Fy = fuel costs in any year, and Py = power Produced in any year. Capital recovery factors, based upon a 3.5% discount rate, are as follows: 20 yr investment life, .0704; 30 yr investment life, .0544; 50 yr investment life, .0428. Figures 4-1 through 4-5 present these data on a discounted cost basis for the primary element of all four options. In the Cathedral Falls hydroelectric case, both the cost of hydro and diesel power are presented due to the strong diesel component in that situation. With respect to these figures it is significant to note the similarity among most curves. Costs decline in response to capital utilization and time value of money. They rise in response to initial capital investments in the diesel case (see Figure 4-1). The hydroelectric case is, perhaps the most complex. The Cathedral Falls project per se has the lowest cost of power over time. However, the cost of diesel power in this case is very high as it suffers from decreasing (and fluctuating) capital utilization rates, the need for new capital investments, and rising fuel costs (see Figures 4-3 and 4-4). The melded price curve of hydro and diesel for Cathedral Falls essentially parallels, if not duplicates, the diesel (base case) curve. 4-8 TEKTRONIX,INC. PART NO. 006-2410-00 ACOTD AAYFTOCFHA AMV WOAYrrlros FIG. 4-1. PRESENT WORTH OF COSTS AND TIMING STUDY COST OF DIESEL POWER FOR KAKE, ALASKA NET PRESENT WORTH OF COSTS : 139675256 —-— DISCOUNTED —— _ NOND. 8 S 1@ 15 2 2 30 35 40 45 £58 1982 YEARS ACOD AAPFPeOOFHA AMV HAYrroev 8.32 Q.27 @.24 8.21 8.18 8.15 8.12 8.89 8.86 8.83 FIG. 4-2. PRESENT WORTH OF COSTS AND TIMING STUDY COST OF TRANSMISSION LINE POWER FOR KAKE, ALASKA 1982 YEARS 2034 Acort Aq>EeOCrHA AMV HAYrrovo FIG. 4-3. PRESENT WORTH OF COSTS AND TIMING STUDY COST OF CATHEDRAL FALLS HYDROELECTRIC POWER FOR KAKE, ALASKA 8.38 8.27 Q@.24 8.21 1982 YEARS 2034 Accor AAYFreOCFHA AMV AADYITrTrosU 1.38 Le 1.84 8.91 8.78 6.65 8.52 8.39 0.26 FIG. 4-4. PRESENT WORTH OF COSTS AND TIMING STUDY COST OF HYDRO SUPPORTING DIESEL POWER FOR KAKE, ALASKA ACcCOTt AAPTOOFHnA AMV WAYrrev 8.28 8.16 8.12 8.88 8.84 FIG. 4-5. PRESENT WORTH OF COSTS AND TIMING STUDY COST OF ELECTRICITY FROM WOOD FIRED PLANT IN KAKE, ALASKA 1982 YEARS 2034 4.4 CONCLUSION The data presented above all illustrate the virtual identify of the diesel base case, the transmission line, and the Cathedral Falls options. These data illustrate the point in present worth of cost rankings, in B/C ratios, and in power cost curves. These values are based upon a preliminary cost estimate for the transmission line as previously stated. Further, they assume no power acquisition costs for the Kake-Petersburg line. Values in the final report will be considered further in terms of project timing and project financing. 4-14 ECONOMIC AND ENERGY LOAD FORECAST ~ CITY OF KAKE, ALASKA (FINAL REPORT) prepared for The Alaska Power Authority under subcontract to Ebasco Services, Incorporated August 27, 1982 David M. Reaume ALASKA ECONOMICS, INC. 8453 KIMBERLY ST. © JUNEAU, ALASKA 99801 © (907) 586-9677 Il. Ill. IV. CONTENTS Executive Summary. .... ccc cee c eee ce cree cee e cece seeeeeeecces 1 ECONOMIC PrOJECtION.... cece ecw c cece e ccc e esc e es eeeeecees 7 Commercial Fishing........ccceeecc ccc ec cece esec ee eeeeeeeees 9 Logging and Sawmil1S....... cece cece ee eee cece e eee e et ee eens 11 Earnings Outside Kake....... cece e ee cece eee eee eee e neces 12 Methodological Considerations...........c cece cece cece eeeees 13 Growth 1970-1980....... ccc cece cece cece eect cece cece cece eeees 14 Kake Energy Consumption, 1981..........ccceeeecc cece eeeeees 17 Kake Electricity Consumption, 1981............ceeeeeeeeeeee 19 Other Kake Energy Consumption, 1981..........ceeeeeeeeeeees 19 Distinguishing Features........ cece eee ee cece eee ee eeeeees 20 The April 1982 Survey........ssc cc eeeec cece cece eeeeeeeeeees 21 Residential Survey.......sce cece ee cere cece cece eeeeeeeeeeees 22 Commercial/Public Building Survey..........seeeeseecceeeecs 34 Manufacturing Sector... ... cece eee e eee e eee e eee e ee eeeeenes 35 Soderberg Logging Company.........seeeeeeeeeeeeeeeeeee 36 Kake Cold Storage..... cc sce e cece cece cece e eee e tenes 37 Keku Canning Company...........eeeceeee ccc ceeeeceeeees 37 Kake Energy Consumption Forecast, 1981-2005................ 39 Price EFFECTS... ccc cece cee e cece e cece rete eee teeeeeees 47 Income EFFECES.... ccc eee cece eee eee e eee eect teen eeeeecs 52 TWO CaVeatS.... cece cece cece cece teen cece cece tee ceeceees 58 The Effect of Deep Price Discounts.........cceeeeeeeeeceees 59 CONCTUSION..... eee eee c cece eee e cette eect tenes eeeeeeeees 61 I. EXECUTIVE SUMMARY Table I-1 gives the base case forecast of Kake energy demand through the year 2005. This forecast is premised on the Kake economic forecast presented in Section II, and on a set of behavioral demand assumptions discussed in Sec- tion IV. Between the years 1981 and 2005 total Kake energy demand (all fuels) is pro- jected to increase by 61.6 percent, and by 21.8 percent on a per capita basis. Kake's annual demand for electricity rises in the forecast from 2026 megawatt hours (MWh) in 1981 to 4612 MWh in the year 2005, a gain of 128 percent overall, and 71.6 percent on a per capita basis. Using the reported 1981 peak to average load ratio for THREA, peak Kake electricity demand in the year 2005, is an estimated 2.04 megawatts (MW), of which only 1.14 MW will be required to serve the customers of the Tlingit-Haida Regional Electric Authority (THREA). The remaining 900 kilowatts (KW) of peak capacity is projected to be self-supplied by the Kake Cold Storage. !/ On an hourly basis, our base year and year 2005 estimates for the THREA facility (exclusive of the Cold Storage) are: 1981 2005 Hourly Base Load 103KW 247KW Hourly Avg. Load 174KW 418KW Hourly Peak Load 475KW 1,140KW T/The THREA generators are not demand metered. The 1981 peak to average ratio was obtained by dividing an estimate of peak load (475 KW) by THREA's annual load of 1525 MWh. The estimate of peak 1981 load was provided by the Kake power plant operator. The 1525 MWh annual load is from official THREA records. ALL SOURCES (MMBTUS) RESIDENTIAL COMM/GOVT MANUFACTURING ALL SECTORS ELECTRICITY (MWH) RESIDENTIAL COMM/GOVT MANUFACTURING ALL SECTORS FUEL OIL (000'S GALS) RESIDENTIAL COMM/GOVT MANUFACTURING ALL SECTORS BOTTLED GAS (000'S GAL RESIDENTIAL COMM/GOVT MANUFACTURING ALL SECTORS WOOD (CORDS) RESIDENTIAL COMM/GOVT ALL SECTORS EXCLUDES FUEL OIL USED THE KAKE COLD STORAGE 1981 35658.94 24375 .27 3912.13 63946. 33 713.49 51.36 61.47 2026.32 Ss) 600.00 10.00 610.00 1985 44376 .66 27945.51 5868.19 78190.36 1165.88 865.31 992.21 3023.40 206.03 178.68 17.75 402.46 27.67 1.68 +33 29.68 662.21 11.28 673.49 TABLE I-1 KAKE ENERGY CONSUMPTION SUMMARY 1990 48249 .58 30149 .82 6043.76 84443017 1279.61 1011.90 1043.19 3334.70 223.99 190.86 17.75 432.61 30.29 1.79 +35 32.43 715.99 12.05 728.04 FOR POWER GENERATION BY THREA AND 1995 50708.30 33159.93 6219.33 90087 .56 1399.95 1228.16 1094.17 3722.28 235.35 207.11 17.75 460.21 2000 53713.96 35474 .95 6394.90 95583.80 1532.79 1407.18 1145.15 4085.13 249.27 219.29 17.75 486.31 35.58 2.06 +38 38.02 760.28 13.85 774.12 2005 57320.81 © 39438 .96 6570.46 103330.23 1679.13 1736.51 1196.14 4611.78 265.99 239.59 17.75 523.34 38.74 2.25 41.39 796.13 15.13 811.26 As required by the Alaska Power Authority, this forecast assumes that real electricity prices will remain at 1982 levels and that the real prices of alternative energy sources will rise 2.6 percent per year. Given these price assumptions, Kake's electricity demand will be muted by the absence of a price incentive to shift to electric space heating. Even if real Kake prices for electricity substitutes rose a somewhat more rapid 5.2 percent per year, there would be no discernible difference in the electricity load forecast. Indeed, annual real price increases of 5.2 percent for alternative fuels would generate significant negative income effects on all forms of Kake energy consumption except wood for space heating. For this reason we have not given an explicitly detailed demand forecast for the 5.2 percent case. Kake-THREA generating capacity in 1981 was 1.6 MW or 40 percent greater than the projected peak THREA demand in the year 2005. In the absence of a substan- tial reduction in the price of electricity to Kake users, the 1981 capacity should be adequate to handle year 2005 loads, assuming normal maintenance of generating units, and their replacement after twenty years. The absence of a price incentive to shift space heating from fuel oi] (68.4 vercent of space heating demand in 1981), and wood (31.3 percent in 1981) to electricity (0.3 percent in 1981), is largely responsible for the conclusion reached in this study. In 1982, the average THREA residential price for elec- tricity, inclusive of State government subsidies, stood at $55.40 per million BTu's (MMBTu's), and the average THREA non-residential price at $88.40/MMBtu. With fuel oil priced at $10.33/MMBTu, bottled gas at $24.63/MMBTu, and wood at $3.60/MMBTu, even a 5.2 percent rate of increase in the prices of fuel oil, wood, and bottled gas, would leave electricity the high priced alternative in the year 2005. Given the ready availability of wood for space heating in Kake, only an absolute (as well as relative) decline in thereal price of electricity to Kake users, on the order of 50 percent or more from 1981 levels, would suggest the possibility of a switchover to electricity for space heating and a sub- sequent demand for increased peak load generating capacity. The high cost of electricity in Kake is further dramatized by the estimate drawn from our survey that Kake households spent nearly 37 percent of their energy dollar on electricity, but received less than 7 percent of their energy consumed in return. A shiftover of the Kake Cold Storage from self-supplied power to THREA power would also increase THREA's peak load requirements, However, at 1982 prices, such a shift is unlikely to occur since the 1982 self-supnlied price of elec- tricity to the Cold Storage is an estimated $39.51/MMBTu or 55 percent lower than the THREA commercial price. Should Kake-THREA electricity prices be lowered to the point where all space heating presently supplied by fuel oil is shifted to THREA power, the implied increase in annual load would be 10,8€1 MWh at 1981 consumption levels and 15,604 MWh at projected, year 2005 consumotion levles. In the year 2005, peak THREA capacity requirements would rise by an additional 4.9 megawatts from 1.14 MW to 6.04 MW. Apart from the erie assumptions, the premises upon which our forecast is based have been selected to produce an energy load forecast that errs on the high side of what can reasonably be projected, given present information and pre- sent expectations of economic growth. (This point is discussed in Section IV, below.) This was done in order to strengthen our fundamental conclusion that THREA's 1981 Kake capacity of 1.6 MW, would be adequate to handle projected loads throughout the forecast period, assuming normal maintenance and replace- ment of generators after a twenty year uselife. THREA Kake Electric Power Consumption Total *Tlingit Haida Regional Electrical Authority Non-Residential o—o—o—o—o Residential s—s—s—s—s® Theysand 200- 190 - 180 - 170 - 160 - 150 - 140 130- 120- 110- 100- 90- 80- 70- 60- 50- 40- 30- 20- 10- II. ECONOMIC PROJECTION The Kake economic forecast presented in Table II-1, while necessarily limited by data availability in the variety of community economic characteristics sampled, fairly represents our somewhat optimistic view of the City's long- term (twenty-five year) economic outlook. In brief, the Kake economy is highly likely to remain small and oriented toward commercial fishing, sub- sistence harvesting, and logging, with much of the future job growth in logging and sawmills provided in the village of Klawock, or at remote log cutting sites elsewhere in Southeast Alaska (Prince of Wales, Chichagof, and Baranof Islands). Some additional jobs for Kake residents may be provided in the mining industry at locations such as Noranda's Greens Creek operation on Admiralty Island, and U.S. Borax's molybdenum mine at Quartz Hill. The growth in Kake nonagricultural employment shown in Table II-1 after 1985 is primarily support sector growth stimulated by the spending of wages earned by Kake residents in the fishing and timber industries, and at jobs held out- 1/ side Kake itself. Much of the difference between Kake personal income ‘ and Kake nonagricultural payrolls shown in TableII-1 is proprietors' income of commercial fishermen, and wages earned outside of Kake. We envision no change in this structural relationship. 1/Personal income is defined to be the resident sum of wages and salaries, rental income of persons, interest and dividend income of persons, and transfer payments received, less employee contributions for social insurance. (U.S. Department of Commerce definition.) TABLE II - 1 THE KAKE ECONOMY, 1980-2005 BASE CASE eceHistoryqn-- 0 teen nn ne neennnn---- ForecaSt--------------------- 1980 1981 1985 1990 1995 2000 2005 Population, April 1 555 569e 628 679 696 721 755 Personal Income (000's of 1981 $) 2,850e 2,962e 5 ,006 5,500 6,043 6,639 7,292 _ Housing stock!/ (Units) 181 188e 214 239 245 264 269 Commercial /Public Buildings NA 41 44 47 51 54 59 Nonagricultural Employment 56e 60e 147 155 165 178 184 Government 32e 32e 37 40 43 46 49 Private 24e 28e ‘110 115 122 132 135 Nonagricultural, Payroll (000's of 1981 $) 866.le 1,020e 2,499 2,797 3,160 3,619 3,971 Commercial Fishing Permits Held NA 92 95 100 105 110 115 Hand Troll, Salmon NA 63 63 63 63 63 63 Power Troll, Salmon NA 5 5 5 5 5 5 Seine, Salmon NA i 11 iB} im 11 im} Gill Net, Salmon NA 1 1 1 1 1 1 Long Line NA 12 15 20 25 30 35 1/Includes 50 mobile units added in 1982 in association with the Hobart Bay - Kake transhipment venture. e - estimated by Alaska Economics, Incorporated NA - not available Compound annual average rates of growth implicit in Table II-1 for the twenty-four year period 1981 through 2005 are: POPUTATION...... cece cece cece cece eee e eee e eee eeeeees 1.2 percent Real Personal Income..........ececceeeeecceeeeeeees 3.8 percent .Real Per Capita Personal Income*.............eee00- 2.6 percent Housing StOCK..... cece eee cece cece cece cece eeeeneees 1.5 percent Nonagricultural Employment (in Kake).............0. 4.8 percent Real Nonagricultural Payroll.........see eee ee eee eee 5.8 percent Real Nonagricultural Payroll Per Job............... 1.0 percent Number of Commercial Salmon Permits.............-.. 0.0 percent Number of Commercial Long Line Permits............. 4.6 percent *$5206 in 1981. $9658 in 2005. This forecast is premised on the following assumptions. COMMERCIAL FISHING!/ Alaska's limited entry salmon permitting system is projected to remain in effect throughout the forecast period. An increasing number of Kake fishermen are assumed to enter the halibut, pacific cod, rockfish, and black cod fisheries in response to State and Federal initiatives to increase the domestic harvest of these species. We view this assumption as reasonable in terms of its implications for Kake income from commercial fishing, but by no means transparently obvious in terms of its details. At the present time, conflicts with Canadian authorities 1/Much of this discussion is based on talks with staff of the Alaska Office of Commercial Fisheries Development, the Alaska Commercial Fisheries Entry Commission, and the Commercial Fisheries Division of the Alaska Department of Fish and Game. and Washington State Native tribes over allocations of salmon stocks, the possible (probable ?) construction of the Stikine River Dam in British Columbia, and an economically conditioned hatchery preference for the pro- duction of pink and chum salmon, leave considerable doubt as to the overall future size of the Southeast Alaska salmon fishery, and its future com- position. Conditions today suggest stable or declining stocks of troll fishery salmon (king and silver salmon) and considerable potential for increased stocks of / seine and gill net fishery salmon (pink and chum salmon). | If such trends continue, one can expect holders of hand troll and power troll limited entry salmon permits to either cease fishing, enter other salmon fisheries, or to enter fisheries presently of limited importance to Southeast Alaska (e.g. octopus, clams, shrimp, bottomfish). Present limited entry regulations do not preclude the creation of additional limited entry permits if one or more fishery stocks increase sufficiently. With respect to bottomfish, it is clear that our long line projection in Table II-1 is probably too generous, if projected out to all of Southeast Alaska in proportion to Kake's relative share of the population of commercial fishermen. One should view the long line projection as a measure of overall effort toward bottomfish (long line, seine, trawl). The question of capital cost to enter the fishery looms large here. Implicit in our assumption is adequate financing for boats and gear from such institutions as the Alaska Commercial Fishing and Agricultural Bank, and expansion of processor and/or - cold storage facilities to handle an increased catch. (The Kake Cold Storage T/This is particularly true for the Inside waters of the Alexander Archipelago, where the bulk of Kake handtroller effort has been concentrated. For a dis- cussion of the outlook for the Southeast salmon fishery see the "Comprehensive Salmon Plan For Southeast Alaska, Phase I," developed by the Joint Southeast Alaska Regional Planning Teams, April 1981. (available from the Alaska Department of Fish and Game, FRED Division) 10 facility owned by the Kake Tribal Corporation is in the process of doubling its freezer capacity this season and has discussed the possibility of further plant expansion.) !/ Finally, we note that although our projection of salmon troll permits is numerically constant, given present limitations on the resale of hand troll permits, it implies an actual increase in re-sellable permits held by Kake residents, assuming at least some holders of non-marketable permits die or otherwise leave the fishery over the twenty-five year forecast period. LOGGING AND SAWMILLS With the passage of the Alaska National Interest Lands Conservation Act on December 2, 1980, and subsequent and pending conveyances of land titles to Southeast Alaska Native corporations, the entry of Southeast Alaska Native village corporations into the timber industry became a reality. Coordinating the efforts of the village corporations is the Sealaska Timber Corporation, a subsidiary of the Sealaska Native Corporation. Present and projected logging and log transporting operations at Kake include a projected annual harvest of twenty to twenty-five million board feet of spruce and hemlock (some yellow cedar), and Valentine Logging Company's plans to load on Japanese freighters up to twenty-five million board feet per year of logs cut at Hobart Bay. (The logs are to be rafted from Hobart Bay to Kake.)2/ T/Per Phillip Riggs, Ocean Fresh Seafoods (a subsidiary of the Kake Tribal Corporation.) The Kake long liners presently target on black cod. 2/Per Sealaska Timber Corporation. 1 According to Sealaska Timber Corporation, Valentine Logging Company will establish a 50 unit mobile home camp in Kake to house up to 100 longshoremen and loggers engaged in the nine month per year operation. The sharp increase in Kake private sector nonagricultural employment shown in 1985 (Table II-1) is caused by the addition of the 100 jobs associated with the Hobart Bay venture (75 jobs on a full time annual basis) and multi- plier induced support sector growth. Our forecast assumes that long term annual average timber production at Kake will be 25 million board feet per year and that combined logging and transshipping employment will cycle about the 1985 level through the year 2005. In effect, we are assuming that once established as a transshippment point, Kake will remain so, if necessary, shipping logs harvested in locations other than Hobart Bay. Given the sensitivity of the Alaska logging industry to World market conditions, we view this as an opti- mistic statement, designed to preclude downward bias in our economic projection, and, therefore, downward bias in our energy load forecast. EARNINGS OUTSIDE KAKE Apart from commercial fishing and logging, the major sources of Kake income are transfer payments and income earned by Kake residents who work in other parts of Southeast Alaska for all or part of the year. While no current data are available on the size of the latter (outside Kake earnings), discussions with Kake community leaders and officials of the Sealaska Native Corporation have made it clear that Sealaska's long term prospects in a variety of South- east Alaska ventures (logging and mining in particular) hold promise for the future employment of Sealaska shareholders. Our Kake income projection 12 embodies the assumption that these opportunities will materialize and be taken advantage of at a rate that allows total Kake “outside” income to keep pace with the growth in other sources of Kake income. METHODOLOGICAL CONSIDERATIONS Data for the Kake economy are fragmentary at best. The official U.S. Department of Commerce personal income series was last updated for 1977. Alaska Department of Labor employment and payroll data are available only on a government-private basis, and only through the third quarter of 1980. (Further disaggregation is precluded by disclosure regulations.) Housing stock data consist of the decenniel Census counts and an April 1982 count taken by AEI in conjunction with our survey of energy use characteristics. Much of the 1980 Census detail has not yet been made available. Under these conditions, it is clear that econometric forecasting techniques are valueless. Indeed, they were not even considered for this project. Our forecast is strictly judgemental. Care has been taken to keep fore- casted magnitudes reasonable in light of what we know about the actual opportunities for economic growth in the Kake area. These opportunities are limited to (i) exploitation of local timber resources, '/ (ii) gains in commercial fishing, and (iii) very very preliminary and tentative discussions 1/Any expansion of Southeast Alaska sawmill or pulp operations is likely to occur in places such as Klawock, where such operations presently exist (Alaska Timber Corporation) and can be expanded more economically than at Kake. Because Alaska Native corporations are exempt from Federal prohibi- tions against round log exportation, logging operations near Kake are most likely to center on the production of round logs for export. Such is the case in the Valentine Logging, Hobart Bay operation which will use Kake as a transshipment point only. Given the relatively high cost of sawmilling and pulp making in Alaska, there is no reason to expect a change in this state of affairs in the ee Manufacturing Lights, Appliances, Industrial Processes - Per establish- ment demand rises at the rate of growth of Kake limited entry com- mercial fishing permits, (Assumption 15). All other components of demand are held constant on a per capita or per establishment basis (that is, rise at the rate of growth of population or the number of establishments). Alaska data (Statewide) published by the U.S. Department of Energy's Alaska Power Administration in Alaska Electric Power Statistics 1960-1980 (published August 1981) suggest an historical Alaska residential real income elasticity of electric power demand lying between 0.73 and 1.59. Between 1970 and 1979, Alaska residential electric power consumption per customer rose 45.2 percent. Real Alaska per capita personal income rose 28.4 percent over the same period, while real average residential electricity prices declined 24.4 percent. Ata zero price elasticity of demand, the implied income elasticity of demand is 1.59, assuming no income price effects. Assuming a price elasticity of demand of -1.0, the implied income elasticity of demand is +0.73.!/ The same Alaska data for small commercial customers show that electricity consumption per customer rose 79.4 percent over this period, while the number of customers rose 84.4 percent. As was the case for residential prices, however, real average prices for commercial electricity fell, in this case by 29.0 per- cent. The simple ratio of the percent change in per customer demand to the percent change in the number of customers was 0.94. T/Empirical estimates of the long run price elasticity of electricity demand range from zero to -2.00 for residential demand, and from -1.25 to -1.94 for commercial industrial demand. (Taylor, Lester, "The Demand For Electricity: A Survey", The Bell Journal of Economics, Spring 1975.) 56 Given that real electricity prices fell over the 1970-1979 period, while at the same time real fuel oi] prices (the primary substitute in space heating) were rising, the residential demand elasticities and trends in per establish- ment electricity demand for Kake would certainly seem to lie on the high side of reasonable, particularly when one considers that (i) the trend toward energy conservation in all forms should exert a much stronger effect over the present forecast horizon,-than during the 1970's and (ii) real Kake elec- tricity prices are held constant in this forecast. We view the assumptions upon which this load forecast is based as optimistic given Kake's low income, and potentially increasing use of conservation measures intended to reduce space heating and water heating energy requirements. For example, it is not at all unlikely that per capita or per establishment Kake space heating energy requirements will decline. (The April 1982 survey showed limited use of weather stripping and other conservation measures.) Particularly in the case where real fuel oi1, bottled gas, and wood prices are assumed to rise at a 5.2 percent annual rate, the increasing budget shares that would be devoted to energy purchases can be expected to act as a powerful stimulant to the adoption of conservation measures, and/or a partial shift to lower priced wood as fuel for space heating. The motive for adopting relatively optimistic demand assumptions came from a preliminary finding that existing Kake electrical generation capacity was likely to be adequate to handle year 2005 electric power demands (assuming normal maintenance and replacement of units after a 20 year uselife). The projections show that even if the growth in Kake electricity demand is on the high side of "reasonable," existing capacity would remain adequate. 57 TWO CAVEATS Existing Kake (THREA) generating capacity would not be adequate to handle future loads if either (a) the Cold Storage were to shift to THREA power or (b) electric space heating were to be adopted by enough households and commercial/ government establishments. In 1981, residential fuel 011 consumption for purposes of residential space heating was an estimated 18704.553 MMBTu's. Were this energy requirement to be shifted’to electricity, an additional 5480 MWh of electric power would-have - been required, an additional load equal to approximately 79 percent of Kake's total electricity consumption in that year, inclusive of Cold Storage consump- tion. (See Table III-1, above.) A comparable switch to electric space heating for commercial/government establishments would have added another 5128 MWh of load. Running at peak capacity, twenty-four hours a day, all year, the THREA facility would not have been able to handle such a load, and, c.early, would have been greatly overloaded during times of peak electricity demand. !/ This calculation shows rather dramatically that the relative price assumptions upon which the load forecast has been premised strongly condition the fundamental conclusion that THREA capacity will be adequate to handle future loads. Were relative electricity prices to decline to a level below that of fuel oil, and competitively close to that of wood, a major shift to electrical space heating would occur, resulting in a need for much greater generating capacity at the THREA facility, or a transmission line intertie to an outside source of power such as Tyee. ‘ T/The implied peak capacity requirement for just the increments would be 3.3 megawatts. - 58 THE EFFECT OF DEEP PRICE DISCOUNTS Table IV-5, above, gives the following average historical (1982) residential energy prices: electricity ($55.40/MMBTu), fuel oil ($10.33/MMBTu), and wood ($3.60/MMBTu). At these prices, Kake residents will obtain 0.3 percent of the 1982 space heating requirements from electricity, 31.3 percent from wood, and 68.4 percent from fuel oi1, assuming 1981 consumption patterns hold in 1982, (see Table IV-2). Not counting the disincentive to electricity conver- sion represented by the capital costs of purchasing electric space heating units, a 1982 price of $10.00/MMBTu for electricity would clearly provide a financial incentive for Kake residents to shift to electric space heating from fuel oil. At a price of $10.00/MMBTu for residential electric power, Kake's 1982 total residential energy bill, if all space heating were shifted to electricity, would be reduced by $116,727.00. !/ However, only $6,172.50 of this reduction would stem from reduced costs of space heating, an amount equal to about $30.00 for each of Kake's 190 residences. Since the bulk of the savings that such a price reduction would generate could be realized without converting to electric space heating from fuel oil, and since the $30.00 per household savings, even if capitalized at a 3.0 percent real annual rate of discount, would fail to cover the capital cost of heating unit conversion or new purchase, one might presume that even at $10.00/MMBTu, a shift to electric space heating by Kake residences would be slowly drawn out over time. T/Reduction in residential electric power bills = (55.40 - 10.00) * 2435.13 MMBTu = $110,554.90. Reduction in residential space heating fuel oi] bills = (10.33 - 10.00) * 18704.55 MMBTu = $6,172.50. 59 Other considerations, however, suggest that at a price of $10.00/MMBTu (approximately 3.4¢ per KWh), residents may well shift heavily to electric space heating. Theseconsiderations are: 1. expectations of rising real fuel prices and stable electricity prices (particularly if hydro-electric power were to be supplied at $10.00/MMBTu (3.4¢/KWh) 2. ability to use the 1982 savings and subsequent years' savings on electric bills ($110,554.00 in 1982 if the price were $10.00/MMBTu instead of $55.40/MMBTu) to finance the capital cost of conversion to electric space heat The present discounted 1982 value of future savings on residential space heat- ing energy bills if space heating energy requirements rise as projected, if expected and actual fuel oil prices rise at a real 2.6 percent annual rate, and if all residential space heating were shifted to electricity at a constant price of $10.00 MMBTu, is $1.5 million (real discount rate of 3 percent, horizon year 2005). This amount of savings on residential space heating costs would clearly make it worthwhile for residents to shift to electric space heating since additional savings on electricity bills for uses other than space heating could readily finance conversion over the first several years. If electricity prices were set higher than $10.00/MMBTu, a comparable incentive to shift to electric space heating could arise as soon as real fuel oil prices rose above electricity prices. (In the example above, the first year price difference was only 33¢ per MMBTu.) For example, (referring now to Table IV-5) a permanent average price of $12.00 per MMBTu for electricity (4.1¢ per KWh) 60 could produce an incentive to shift to electric space heating in the year 1990, if real fuel oil prices rose 2.6 percent per year, and in 1985 if real fuel oil prices rose 5.2 percent per year. Given the potential for space heating energy requirements to swamp existing THREA capacity, it is clear that if the Kake-Petersburg transmission line were to be built, the resultant load would be heavily dependent upon the price charged to Kake users for electricity. In other words, the conclusion that existing Kake generating capacity will be adequate to handle projected loads, is valid only if electric power to Kake users is not deeply discounted from 1982 THREA levels. Finally, we note that electricity prices at or near the 1982 THREA price for electricity would produce little financial incentive to shift space heating from fuel oil to electricity, even if fuel oi] prices were to rise very rap- idly, provided that wood remained a relatively cheap substitute. A greatly reduced price of electricity relative to fuel oi] is not sufficient to pro- duce an incentive to shift to electricity, if both prices are significantly higher than the BTu price of wood. Given absolutely high prices for electri- city and fuel oi1, the likely shift in Kake would be to increased use of wood for space heating, particularly if wood prices rose much slower than fuel oil prices. CONCLUSION Given the price assumptions upon which this study has been based, and given the economic projection presented in Section II, we project the following year 61 2005 electricity load characteristics for THREA: Annual Load - 3,800 megawatt hours !/ Peak Instantaneous Load - 132 megawatts@/ The 1982 installed capacity is 1.6 megawatts. Provided normal maintenance and replacement occurs, present THREA capacity would appear adequate to handle projected loads through the year 2005, although some additional backup capacity may be desireable. Because the THREA generating units are not demand monitored, actual readings on instantaneous peak and baseload are not available. Given the relative price assumptions, the Kake Cold Storage is likely to continue to supply its own requirements. T/Derived by subtracting an estimated 800 MWh Cold Storage load from the total (Table IV-1) of 4611.78 MWh. 2/The absence of structural change in our economic forecast, the continuation of self-supplied power at the Kake Cold Storage, and the load smoothing po- tential of time of day pricing all suggest that the year 2005 peak to average load ratio will not exceed the 1981 ratio. The projection of a peak load of 1.2 megawatts is based on the estimated 1981 peak to average load ratio given to AEI by Marvin Kadake, Kake Power Plant operator. 62 of possible future mining operations somewhere "near" Kake. The overriding consideration is that nothing we have found points in the direction of major structural change in the Kake economy. Our 2.5 percent per year compound average rate of growth of real Kake personal income should, therefore, be viewed as at least reasonable, if not optimistic. GROWTH 1970-1980 Growth rates for the decade of the 1970's can provide an historical prespective against which to judge the forecast in Table II-1. There is, of course, no automaticity to the growth process. There is, however, the meaningful question as to whether or not the present forecast, on the whole, calls for higher or lower than historical growth rates. Between 1970 and 1980, the U.S. Census Bureau recorded a gain in Kake City population of 107 persons. For the decade as a whole, the recorded annual average growth in Kake population was 2.2 percent. At least some part of this growth is attributable to State funded municipal grant programs, loan programs, and public transfer payments that grew rapidly in the late 1970's. !/ Studies by David Reaume, by the Alaska Pacific Bancorporation, and by the University of Alaska, all have shown that recent historical rates of increase in State government spending are not sustainable beyond ee 1/Between fiscal year 1976 and fiscal year 1980 real (inflation adjusted) Alaska State government grants to local communities rose an average of 4.3 percent per year. (U.S. Census, State Government Finances) 14 the late 1980's. !/ The 1.1 percent annual average 1980-2005 rate of growth of Kake population implicit in Table II-1 hardly seems low from this per- spective. We would, therefore, expect our energy load forecast to be some- what high, at least from the point of view of its dependence on forecasted population growth. Between 1970 and 1980, the estimated Statewide timber harvest (most of which is taken from Southeast Alaska) declined from 628 million board feet to approx- imately 550 million board feet .2/ Conversations with Regional Forester John Sandor (U.S. Forest Service, Juneau), and our own market analysis, suggest a max- jmum annual harvest of 650 million board feet (all lands) for the forseeable future. Thus it would appear that unless a greater percentage of harvest is concentrated in the Kake area, the potential for sustained growth in employment and income from this source is limited. 1/(a) Reaume, D.M., "Government Fiscal Planning In the Face of Declining Resource Revenue," (mimeo, September 1978); (b) Alaska Pacific Bank, "Alaska's Emerging Fiscal Crisis," (1978); and (c) University of Alaska Institute For Social and Economic Research, "Alaska Revenue Forecasts and Expenditure Options," in Alaska Review of Social and Economic Conditions, July 1978. Alaska Economics, Incorporated has recently updated these actuarial calculations. Given presently projected State oil revenue (actually September 1981 projections which are higher than the current official projections), a 3 percent per year real gain in non-oil related economic activity, and a real yield of 3 percent per year on general fund and Permanent Fund assets, real State spending and lending growth rates in excess of 2 percent per year could not be sustained past 1992 without tapping the principal of the Permanent Fund. At historic average real spending growth rates, the Permanent Fund would be fully depleted by 1997. 2/The Alaska Statistical Review 1980 (Alaska Department of Commerce and Economic Development, Page B-8; and The Quarterly Report of the Alaska Economic Information and Reporting System, January 1981 (same source), Page 28. 15 The total real (1967 dollars) value of all fish landed in the Petersburg- Wrangell district (ADF&G@ District) rose from $3.138 million in 1970 to $11.345 million in 1980, !/ for an annual average real gain of 13.4 percent per year. We do not believe that such gains can reasonably be projected into the future, at leastnoton a sustained twenty-five year basis, unless a major breakthrough occurs in the Southeast Alaska bottom fishery, an event that would require either or both of two conditions to be fulfilled: (1) massive public sector financial involvement, or (2) removal of foreign fleets from the "200 mile limit" fishing grounds. We hesitate to project either event. In sum, despite hefty increases in State government spending, lending, and grants to local government, and an annual average 13.4 percent real gain in regional fishermen's income between 1970 and 1980, Kake population grew only slightly faster during the 1970's than the 1.1 percent rate embodied in our 1980-2005 projection. Given no indication of major new economic development in the Kake area, and no dramatic shift in Kake's percentage of State govern- ment spending and Wrangell-Petersburg fishing income, the economic projection given above appears to be judiciously biased toward the high side - a con- clusion which will become more meaningful as the features of the energy load forecast are described below 1/Nominal values from Alaska Catch and Production Statistics, 1970 and 1980 (Alaska Department of Fish and Game, Division of Commercial Fisheries). Real values are nominal values deflated by the Anchorage all items consumer price index. 16 III. KAKE ENERGY CONSUMPTION, 1981 The Tlingit-Haida Regional Electric Authority (THREA) has supplied detailed Kake electricity use data for the period January 1979 through April 1982. These data are disaggregated into consumption by residential, small commercial, large commercial, and public users. In this section we describe how the 1981 THREA data were further disaggregated within each customer class into consump- tion for (1) lights and appliances, (2) space heating, (3) water heating, and / (4) industrial processes, ‘’ and how we apportioned THREA "commercial" useage between manufacturing (logging camp and Kake Cold Storage) and "other" commer- cial. The apportioned 1981 data constitute the base year electricity con- sumption database presented in Table III-1. Data on Kake consumption of wood, fuel oi], and bottled gas (propane) are not 100 percent tabulated by any source. The base year estimates of consumption of these fuels by use end use category, also presented in Table III-1, have been built up from observations made during an April 1982 survey of Kake households and establishments conducted by Alaska Economics, Incorporated. Fuel and bottled gas consumption figures were compared to data compiled by the U.S. 2/ Army Corps of Engineers on shipments into the Kake Harbor during 1978. T/Office equipment is included in “industrial process." 2/Waterborne Commerce of the United States, calendar year 1978, part 4, Water- ways and Harbors, Pacific Coast, Alaska and Hawaii. (The most recent issue available.) At a conversion factor of 280 gallons of fuel oil per short ton, the Corps reports 304,080 gallons shipped into Kake Harbor in 1978. The approximate 1981 consumption we estimate is 336,493 gallons for final consump- tion and 219,169 gallons for the THREA power plant and Kake Cold Storage. The Cold Storage was not in operation in 1978 and the THREA power plant's predecessor used an undetermined (but smaller) quantity of fuel oil (less generating capacity). Given that the Corps of Engineers' figures report shipments rather than consumption, and therefore, that fuel oi] inventories may have been drawn down in 1978, the 1981 fuel oi] consumption estimate shown in Table III-1 appears to be reasonably accurate. In the absence of of better 1978 and 1981 data we are inclined to accept our 1981 estimate. 17 gL TABLE III - 1 1981 BASE YEAR KAKE ENERGY CONSUMPTION BY END USE Total = [_-.--Electricity-----] [-------Fuel O{1----------] [------Bottled Gas--------] [-n----Woodeceeeeeee Percentaye All Fuels Botried Gas 1 [------Wood To oF Total (MMBtu) - (Thous. KWh) (MMBtu) (Thous. Gallons) (M'Btu) _(Thous. Gallons) (MMBtu) (No. Cords) (MMBtu) Kake Requirement Space Heating --Residential 27336.182 23.917 81.629 135.447 18704.553 600 8550 42.749% --Commercial/Gov. —17653.852 3.3 11.263 *126.725 17500.089 10 142.5 27.607% --Manufacturing __1329.047 __ 6.237 21.287 * 9.470 1307.76 076% ~-TOTAL 46319.081 33.454 114.179 271.642 37512.402 610 8692.5 72..432% Water Heating --Residential 5238.17 44.259 151.056 30.803 4253.74 9.211 833.374 8.192% --Commercial/Gov. 4391.62 4.873 16.632 * 31.681 4374.988 . 6.868% --Manufacturing © __-359.213 9.476 32.342 * 2.367 326.871 __. 562% --TOTAL 9989.003 58.608 200.03 64.851 8955.599 9.211 833.374 15.622% Lights/App1iances . --Residential 3084.584 645.31 2202.443 9.75 882.141 4.824%, --Comnerc ial /Gov. 748.354 179.82 613.726 1.488 134.628 1.17% --Manufacturing 344.379 95.07 324.474 -220 19.905 5396 --TOTAL 417.317 920.2 3140.643 11.458 1036 .674 6.533% Industrial Process : --Residential --Conmercial/Gov. 1581.444 ** 463.359 1581.44 2.473% --Manufacturing __1879.488 ** 550.685 _1879.488 _ 2.939% --TOTAL 3460.932 1014.044 + -3460.932 5.412% GRAND TOTAL 63946.333 2026.306 + =—6915.784 —-***336.493 46468.001 20.669 1870.048 610 8692.5 % Of Kake Total 10.815% 72.667% 2.924% . _-13.594% 100.00 & *Assumes 80% space heat and 20% hot water. **Industrial processes in the commercial/government and manufacturing sectors are defined as total consumption minus space, water heating, and lights. ***Does not include the 219,169 gallons of fuel oil consumed by the Kake Power Plant and Kake Cold Storage to generate electricity. The fuel oil estimates presented in Table III-1 exclude fuel oi] used in power generation by both THREA and the Kake Cold Storage. KAKE ELECTRICITY CONSUMPTION - 1981 In 1981 Kake consumed 2.026 megawatt hours (MWH) of electric power of which - 1.525 MWH were supplied by THREA and 0.501 MWH were self-supplied by the Kake Cold Storage. Installed peak capacity at the THREA plant was 1.6 megawatts (two 0.500 MW and two 0.300 MW generators). The Kake Cold Storage had three 0.325 MW generators on line, and now plans to install a fourth. Total installed and scheduled capacity at Kake is, therefore, 2.9 megawatts. THREA reported a peak instantaneous load of approximately 0.475 mw. !/ In April 1982, Alaska Economics, Incorporated surveyed 21 percent of Kake households and 56 percent of Kake public and commercial buildings in order to obtain the data needed to apportion published THREA electricity consumption data across the categories shown in Table III-1. Details of the procedure used are reported below. OTHER KAKE ENERGY CONSUMPTION - 1981 Based on the April 1982 survey of Kake energy users, estimated 1981 Kake fuel oil consumption, net of fuel oil used for electricity generation was 336.5 million gallons, (No. 2 distillate except for the Soderberg logging camp which used No. 1 distillate). Number 1 and 2 distillate fuel oil is supplied through the Kake Tribal Corporation for the village, No. 1 on direct purchase by Soderberg to residents of the logging camp. The bulk of Kake 1981 fuel oi] consumption was used in space heating. Virtually no Kake residences or 1/The THREA generating units are not demand metered. The peak load of 475 KW was estimated by power plant operator Marvin Kadake. commercial/public buildings used electric space heat or water heat in 1981. Bottled gas consumption in Kake (21,000 gallons propane) was used in smal] amounts for residential water heating, and for powering lights and/or appli- ances in all sectors (largely for residential cooking and clothes drying). Wood use in Kake is limited to space heating. Based on our April 1982 survey an estimated 610 cords of wood (spruce, hemlock) provided 8,692 MMBTU of space heating energy, or 18.8 percent of Kake's total space heating energy require- ments in the base year. DISTINGUSHING FEATURES Kake energy consumers all but ignored electricity for space heating and water heating purposes in 1981, using principally fuel oi] (82.5 percent of total BTU energy useage for these purposes) and wood (15.4 Perexnt). At average 1981 prices the incentive to use electricity was slight, given the lower cost alternatives. Per MMBTU, mean 1981 prices paid by Kake residential energy users were; electricity ($72.67), bottled gas ($24.01), fuel oi] ($10.07), and wood ($3.51). Some 50.0 percent of Kake electricity useage (including the Kake Cold Storage) powered industrial processes, with another 45.4 percent powering lights and a variety of appliances. Without a dramatic reduction in the relative price of electricity these patterns can be expected to continue. 20 THE APRIL 1982 SURVEY A random forty household residential probability sample was taken in Kake between April 14 and April 23, 1982 and the households surveyed. !/ The Survey questionaire was designed to inventory the existing appliance stock, provide estimates of fuel oil, bottled gas, and wood useage, estimate the potential for energy conservation, and to otherwise assist in dividing residential electricity consumption and other residential energy consumption into the categories (1) space heating, (2) water heating, and (3) lights and appliances. The households sampled were identified by THREA meter number. (One hundred percent of Kake residences are electrified, per THREA.) Meter number cross references to monthly electricity bills (provided by THREA) facilitated the construction of detailed electricity use characteristics for the residen- tial sample. In addition to the residential survey, a commercial/public building energy use survey of twenty-two (of thirty-nine total) structures was conducted. In ten of the twenty-two interviews, detailed energy use data were obtained from billing records. In the remaining twelve cases, user estimates and physical use characteristics of appliances, machinery, and lighting systems were combined to complete the sample record. Because electricity consumption totals were available monthly for each residential and non-residential user, the survey was needed only to apportion electricity consumption among end uses. In contrast, the absence of a Kake control total for fuel oil, bottled gas, and wood useage required the esti- mation of total consumption of these fuels, as well as its apportionment across end uses. T/The three residential areas which were surveyed partitioned: the town. Each was sampled in proportion to its share of Kake housing units. RESIDENTIAL SURVEY Table III-2 relates building size, number of persons in the household, total insulation, and lighting stock to energy consumption by fuel type. The "none" entries in propane and fuel oil consumption are for households that did not use these fuels. It was necessary to rely entirely on respon- dents' estimates and records of consumption of propane, wood, and fuel oil because there were no individual customer records available from suppliers. Fuel oi] is supplied by the Kake Tribal Fuel Corporation and propane is sold in both Bean's store and Jackson's store. The incomplete entries for “electrical consumption are for households that moved during the 1981 base year. THREA operators change meters as a standard procedure when new occupants move into a house. No record is kept of the previous occupant's meter number, making it impossible in these cases to track electrical con- sumption either by occupants or building if occupants move from one house to another. The average household in the sample was insulated to an R-value of 7.8 in the floor, 11.9 in the ceiling, and 8.7 in the walls. Other weatherization measures noted in the 40 household sample were as follows: - 13 households had at least some weatherstripping around doors and windows - 2 households had storm doors - 19 households had windows with double pane glass - 2 households had attended to all of the above weatherization measures 22 TABLE ttt - 2 40 HOUSEHOLD RESIDENTIAL SAMPLE Estimated Prop. Estimated KW Total Elec. KW E! Sample Sq. Fe. Sq. Ft. @ of Per Imated Wood = *Total R-value f# Watts # Watts Number House Windows — in Housel Consumption Fuel O11 Cons./ Consumption Consunpt ton of Insulation Incande- Nee ih (gallons) Yr. (gallons) Keerdy ee scent t 1170 126 6 400 Unknown 3982 10 xv 355 80 2 1120 126 2 Nowe 700 5842 0} ||| 33- 580 80 ’ 1120 126 5 None 1000 4870 e ” 470 tor 4 180 186 10 500 1440 5868 6 ” 1215 80 5 1yA0 186 8 200 2200 6035 10 0 1215 80 6 1120 126 4 100 500 3022 4 x” ns 105 , 1120 126 1 None 300 2955 2 3 660 80 8 t5A0 186 7 600 600 6483 10 0 1250 80 9 1120 126 6 None 1000 7110 o 0 720 80 " 1056 118 6 l None Unknown ri eee 7 4 695 80 wv 1248 1%6 6 None 800 5890 9 41 900 80 MM 1200 196 5 500 2000 6550 5 a 530 155 ih 1056 18 7 100 1700 3260 1 41 65 80 6 1056 118 3 None 750 4010 5 4l 360 80 18 aga 198 3 800 Unknown Ot inte None o 525 155 m. 1600 168 4 Unknown None 3310 Unknown a 600 160 22 2400 296 9 2400 2400 5010 12 27 1200 80 2 14a 167 1 300 900 2081 6 4 900 80 24 1008 62 8 400 1200 2228 4 None 0 M5 o 25 583 79 6 1600 Unknown 4580 None a 500 25 26 1008 252 5 400 oe. Set lone 3280 6 0 1120 105 2 492 16 2 559 326 rn None ° 510 0 2A 1000 16 4 800 1000 ter None o 30 0 29 612 6 1 ao Unknown 208 Hons 16 4m an ” 1260 140 7 600 800 7210 None 22 160 4 720 108 5 600 500 1666 None 3 35 ° 5 850 % ? 400 1200 3460 None uw 360 6 1697 84 3 200 300 1527 3 ° 525 ” 1120 100 3 200 500 4320 10 36 40 120 39 484 75 3 None 500 reiie 6 19 205 0 40 756 96 4 None 700 4180 None a 720 25 al 1404 120 7 1200 2400 5280 None i 300 thy 42 1344 108 5 None Unknown 10563 4 4 920 530 43 1200 %6 4 300 None 330 2 37 1000 ° 44 1152 na |1| 2 900 650 2989 None 33 1700 ° 45 500 %6 Vacant ° Unknown 3663 None 3 660 o 46 720 6 Vacant ° 1000 teeaeest| nna i Ea 5 49 660 14 5 1200 720 4643 1 3 900 ° 50 1899 128 3 300 800 tee 680 135 st 50 _105 _4 _200 _None_ ieattsost i 840 _o TOTAL, 43929 5089 183 15950 28884 156593 12a 26875 2953 Average 1098.225 127.225 4.575 408.974 875.27 3915. 3.10, 28.48 671.875 73.825 Range 2400 296 10 2400 2400 10563 12 37 1700 330 L432 62 0 300 330 ° ° 40 0 ‘Total of insulation R-value for floor, walls, and ceiling without regard to relative effictency. Table III-3 summarizes our sample and population estimates of residential energy consumption for appliances. The following appliance and water heater characteristics were also noted in the survey. Space Heaters (7 total found in sample) Water Heaters (34 Average capacity - 33.91 gallons Thermostat setting - low (less than 120°) - 5 heaters - medium (120-140°) - 26 heaters - high (greater than 140°) - 3 heaters Dryers (27 Three households in the sample noted that they had electric dryers but did not use them at all because they were too expensive to operate. A majority of respondents indicated that they hung their clothes out to dry for at least part of the year while only 5 said that they used their clothes dryers all year long. Dishwashers (6 Two households had electric dishwashers , but did not use them because of the expense of operation. Referigerators (39) Average capacity - 16.33 cubic feet Freezers (37 Average capacity - 17.59 cubic feet Five households had two food freezers. A majority of households with food freezers indicated that they unplugged their units for part of the year. 24 APPLIANCE SATURATION AND CONSUMPTION DATABASE GENERATED FROM SAMPLE USING NATIONAL AVERAGE TABLE III - 3 USEAGE INTENSITY DATA Estimated EEI Est. MRI Est. Mw Est. **00E Est. Total Annual » “Estimated Saturation Individual Total Annual Total Annual Total Annual Total Annual Consumption For Anoliance # In Sample _# In Population Percentage Ann. Cons. _Consuinption/]__Consumption/2 Consumption/3 _Consumption/4 _Kake, Alaska (est.) Space Heater Oi] Heater 36 171 90 856 gal. 1182_therms. 146376 gal. Woods tove 24 114 60 26 cords et ***500_ tera Portable Electric . Heater 4 19 10 2079 kwh 2558 kWh 1800 _Kwh 39501_Kwh Portable Kerosene 7 Heater 3 15 8 50_gal. 750 gal. Water Heater Oil Fired 24 4 60 292 gal. 403 therms. 33288 gal. Propane , 34 18 269 gal. 403 therms. 3Tas-ga Electric 3 15 8 4873 Kwh 4219 Kuh 4046 _KWh 4515 kWh 6710 kwh 73095 Kah Range/Oven Propane 21 101 53 63 gal. 95 therms. (both) 8757 gal. Data Unavailable Sropane S.C. 3 2 zo. 15 For S.C. ectric KWh, T175_KWh 782 _Kwh ZO71_Kwh 750_Kwh 57360_Kwh Electric S.C. 2 1) 5 T205 kWh 205 kwh 12050 KWh Clothes Washer ° Electric 38 181 95 94 kwh 103 KWh 88_KWh 90 kWh 17014 Kah Clothes Dryer Propane 5 25 13 37 gal. 55 _therms. 925 gal. Electric 22 105 35 985 _Kwh 393 Kuh Tose kwh 993 Kwh 320 Kwh 03425 "kwh Dishwasher Electric 6 29 15 292_Kwh 363_Kwh 149 kwh 363 Kwh 8468 _KWh Refrigerator 1/8 Model 18 86 45 1447_KWh 1665_KWh 1228 kWh 124442 kWh [8 Frost Free 18 86 cy “627 _Kwh 1795 Kwh Ta58_KWh KWh / le i} 15 8 T627_KWh 24405 KWh Freezer ~ Chest Type 19 9 48 1330_KWh 1320. kWh 1342_KWh 1480_Kwh 1176 kwh 121030_kWh Thest Type FF TO _ eB 25 T985_KWh T985_KWh 95280_KWh Upright 6 29 T5___****1359 Kwh 39411_KWh Uoright FF 2 10" > 2028 Kh ~2028_Kwh 20280_KWh Television Color 42 200 105 268 KWh 268 KWh 53600_KWh Black & white 24 114 60 T29_Kwh Kwh 4706_KWh weee*video Recorder 17 82 3 136 kWh TT52_Kwh Misc. Appliances . Stereo 35 167 88 109 kWh. 109 kwh 18203_KWh CB Radio 2c 110 , 58 86_KWh 86_KWh, 9460_Kwh. Microwave 6 29 15 T90_KWh____190_Kwh 0 Kuh Heat Tapes 6 29 5 No Data Household Lights Neon and Incandescent 40 190 100 1000_Kwh 1000_kwWh 190000_kWh. Calculations involved in Table III 3: To blow up sample date to population - (number of each appliance in sample)/(40 household sample size) = saturation percent. - (saturation percentage) X (190 household population) = estimated number of each appliance in Kake. Annual consumption data - (number of each appliance in population) X (national average annual consumption by appliance) = total Kake consumption at national useage intensity. Estimated individual annual consumption data is computed by where DOE information is therms, by converting it to the appropriate fuel type. of appliances in the sample and consequent number of each appliance in the community b; data. *There was an average of 190 occupied households in Kake for 1981. **High efficiency and low efficiency are averaged. ***Generated from sample data only. ***tWeighted average assumes ratio of consumption *eee*Assumes 62 watts/hour X 2200 hours average viewing/year = 136 Kwh. from DOE. 1/Edison Electric Institute, “Annual Energy Requirements of Electric Household Appliances,” for regular chest type to chest type frost free holds for upright models. 2/Midwest Research Institute, "Patterns of Energy Use By Electrical Appliances," Kansas City, MO, 1979. 3/Mercbandising Week, “Tabbing Appliance Energy,” P. 3, December 1973. 4/Deoartment of Energy, “Estimate of Appliance Average for Consumer Products, June 30, 1980. Annual Operating Costs, 25 New York, New York, 1975. averaging the four national data sources for the particular appliance or, in the cases The purposes of this approach are to calculate the saturation levels y fuel type and to benchmark Kake appliance useage to national Wattage per set comes from local Magnovox dealer and average viewing hours comes " Office of Conservation and Solar Energy - Energy Conservation Program The most intensive use of food freezers occurs during August, September, and October when most households are freezing fish and game for winter consumption. Television Sets (83) There was only one occupied household in the Kake sample without a tele- vision set, fifteen households owned more than one television set. All but one reported that they watched their set(s) more than three hours per day. Miscellaneous Appliances Of the twenty-three households with CB radios, a majority said that they had them on for more than twelve hours per day. Six houses in the sample indicated that they used heat tapes extensively during the winter to keep pipes from freezing. Other appliances noted in the sample but not listed in Table III-3 included 2 video games, one convection oven, a battery charger (used "“daily"),a table saw (used “often"), and one large "Casablanca" type ceiling fan. Table III-4 provides a comparison of use ratios for various electrical and propane fueled appliances found in the Kake residential sample with national average use ratios published by the U.S. Department of Energy. The most striking difference between the Kake sample and the national averages is Kake's considerable substitution of propane and fuel oil for electricity in the appliance stock. Other major differences, such as Kake's greater per household use of freezers, can be explained by Kake's fishing based economy and the expense of bringing in grocery store items to the community, or in the case of the greater percentage of clothes washers and dryers, by the cold, damp Southeast Alaska climate. 26 TABLE III - 4 COMPARISON OF ELECTRICAL APPLIANCE USE RATIOS!/ KAKE SAMPLE DATA VS. NATIONAL AVERAGE APPLIANCE KAKE NATIONAL DIFFERENCE Refrigerator/Freezer "98% 95.6% + 2.4% Freezer ; 82.5% 45% +37 .5% Dishwasher 15% 42% -27% Clothes Dryer 55% 43% +12% Water Heater 8% 40% -32% Color Television 85% 85% ZERO Black & White ; Television 35% 99% -64% Conventional Range 30% 71% -41% Clothes Washer 95% 75% ~ +20% Furnace 0% 14% -14% Heat Pump 0% 3% - 3% PROPANE FUELED APPLIANCES Clothes Dryer 13% 15% - 2% Water Heater 18% 55% -37% Conventional Range 73% 29% +44% Furnace 0% 44% -44% SOURCE: Department of Energy 1/The "use" ratio is defined as the ratio of the number of households having an appliance to the total number of households. 27 Until 1979, Kake had one television channel. In that year, a satellite receiving dish was purchased by the community and thereby added a second channel. According to Marvin Kadake, power plant operator and City council member, a cable television distribution system will be in place by the end of 1982. This will add four more channels to the present television system. Table III-5 allows a comparison of the various fuels used by Kake households in terms of their relative importance as energy sources and their price per million BTu's (MMBTu's). This table dramatically illustrates the disparity in prices between electricity and other end-use energy sources. Electricity per BTu is over 20 times as expensive as wood, seven times as expensive as fuel oil, and three times as expensive as propane. It should be noted that the price of fuel oil listed here does not include the cost of sels Likewise, the propane price does not include a $100 refundable tank deposit requirea for initial service. !/ Only three households in the sample purchased their wood and these at $50 per cord, This figure may be subject to considerable small sample bias. 1/Approximately one-half the households interviewed purchased their fuel at the fuel dock in 55 gallon drums and thus avoided an explicit delivery charge. The charge for delivered fuel (20¢ per gallon in quantities of 50 gallons or more) raises the final price of fuel oil by 14 percent. 28 TABLE III - 5 RESIDENTIAL SAMPLE CONVERSION TABLE % OF KAKE : HOUSEHOLD ENERGY SOURCE TOTAL BTU'S ENERGY USEASE PRICE/MMBTU Fuel 0i1 2.2958E10 = 64.67% $10.07 Propane 1.7155E9 = 4.83% $24.01 Wood 8.3933E9 = 23.64% $ 3.51 *Electricity 2.4351E9 = 6.86% $72.67 TOTAL 3.5502E10 = 100.00% Assumes the following conversion factors: Diesel Fuel or Stove Oi] - 1 gallon = 138095 BTu's @ $1.39/gallon Propane - 1 gallon = 90476 BTu's @ $2.17/gallon (100 1b. bottle contains 24.4 gallons and sells for $53.00 in Kake) Wood - 1 cord = 14.25 million BTu's @ $50/cord (assumes each cord contains 4 hemlock and 4 spruce and that half of-each species is green or wet and 4 seasoned) Electricity - 1 KWh = 3413 BTu's @ $.24803/KWh (1981 household rate average including the Alaska Power Cost Assistance subsidy) Sources: 4- For BTu's - Department of Energy, price - Tlingit-Haida Corporation For BTu's - Department of Energy, price - Jackson's Inc., Kake, gallons/100 1b. bottle - Petrolane, Juneau For Btu's - U.S. Forest Service, Juneau, price information came from 3 separate households in the sample that purchased wood, most people in Kake cut it themselves For BTu's - Department of Energy, price - THREA *Actual 1981 useage. 29 The great majority of households cut their own wood and thus aside from gas and oi] incur only the opportunity cost of their own time and labor. With logging areas in close promixity to town and with unemployment at very high levels for much of the year, this opportunity cost was understandably viewed as slight by those sampled. The price of residential electricity shown in Table III-5 is an effective average rate that includes the KWh charge from the residential rate schedule, a fuel surcharge, the State of Alaska Power Cost Assistance subsidy, and local sales tax.!/ Though all residential customers face the same rate schedule for electricity prices they do not necessarily pay the same price per KWh. The Federal Energy Assistance Program makes payments directly to energy vendors if a low income resident is unable to pay his or her -Eill and to those residents who meet qualification criteria. Since January 1982, the program has been administered directly by the Tlingit-Haida Regional Council. According to Art Holmberg, Council Director, about $42,000.00 will be made in payments in 1982 with 65 families qualifying for the program. The Soderberg logging camp supplies No. 1 distillate ($1.18 per gallon) and propane ($40 per 50 1b. tank) to its employees at cost. In January of each year, those employees that have worked for the camp during the entire logging / season receive a payment equal to one-half of their year's electrical bill.? 1/Individual customer detail withheld for reasons of confidentiality. 2/Virgil Soderberg, Soderberg Logging Company, general manager. 30 Given the average annual consumption rates for the various energy sources itemized in Table III-5, a typical annual energy bill for a Kake household is: Fuel’ oil - 875 gallons @ $1.39/gal. $1,216.25 or 48.27% of totat!/ Propane - 409 Ibs. @ $.53/1b. $ 216.77 or 8.6% of total!/ Wood - 3.1 cords @ $50/cord = $ 155.00 or 6.16% of total Electricity - 3755 KWh @ $.24803/KWh $ 931.37 or _36.97% of total TOTAL ENERGY BILL $2,519.37 or 100.00% A comparison of the percent of the Kake energy dollar spent on electricity with the percent of household energy obtained from electricity (Table III-5, above) is enlightening. In 1981, Kake households spent nearly 37 percent of their energy budget on electricity, but received only 7 percent of their consumed energy in the form of electricity. Since December 1981, the State of Alaska Power Cost Assistance Program has increased the residential rate subsidy for THREA users to 21.86¢/KWh for the first 55 KWh consumed by each resident in the community. Table III-6 lists the available information on energy subsidy payments made to date (April 1982) to residential users in Kake. T/Assumes fuel oi] purchased at Tlingit-Haida Corporation and propane at Jackson's Inc. . 31 TABLE III - 6 SUBSIDY PAYMENTS TO KAKE RESIDENTS State of Alaska Energy Assistance@/ Power Cost Program Total Assistance Program State/THRC Subsidy 1980 September - $ 3509.55!/ October - 5531.70 November - 7457.89 December - 7488.97 1980 TOTAL $23988.11 1981 January - $ 7516.18 February - 6569.47 March - 4182.20 April - 7195.91 . May - 7779.34 June - 9346.88 July - 10994.33 August - 7730.07 September - 12078.47 October - 9187.65 November - 18149.39 December - _21866.34 1981 TOTAL $122596.23 1982 January - $20709.96 February - 19,731.27 March - 19718.82 April - _18928.18 1982 TOTAL $79088.23 $42000.00°/ $121088.23 SOURCES: 1/THREA 2/Jim Dalman, Director, Alaska Energy Assistance Program. 3/Art Holmberg, Director, Tlingit-Haida Regional Council, Low Income Energy Assistance Program. s TABLE III - 7 KAKE PUBLIC BUILDING/COMMERCIAL ESTABLISHMENT SAMPLE DATA 7 1981 Est. 1981 Est. 1981 Actual 1981 Effec. + Est. Annual wee Sample Sq. Ft. in Sq. Ft. of Number of Propane Fuel Oil KWh Elec. Total R-value Avg Price’ 1981 Total No. of Watts No. of Watts Wood Cons. THREA Rate Number Building Windows Employees Consumption Consumption Consumption of Insulation Electricity Electric Bill Incandescent Neon (cords) Classification 1 20950 1342 22 Emp. Unknown *2139 gal. 148510 4 -37538 55747 .62 20000 8000 woe 42 : 104 Stud. | 2 5100 9 Included None *5193 gal. 22678 20 35921 8146.13 --- 6720 aaa 42 In Above 3 14642 3212 23 Emp. Unknown *1495 gal. 39142 F 30 -39304 15384.24 580 4960 sues 42 103 Stud. y ‘ 4 1926 404 4 Emp. None Unknown 15750 22 -21406 3371.41 750 4000 haetote 52 5 6750 648 13 Renters None 6000 gal. 3051 68 24179 737.70 7920 900 eaoe. 33 15 for Lunch 1220 144 1 Emp. None Unknown 56650 22 22756 12876 .39 1410 --- 33 @ 1326 185 2 Emp. None 4500 gal. 3220 . 22 +33759 1087.04 1320 100 and. 52 8 8149 130 . 5 Emp. 800 Ibs. 4800 yal. No Data 19 oo-- oer 600 1200 see 52 23 Child. § 1500 40 1 Emp. None 1200 gal. 4047 19 -23904 967.38 600 360 at ical 52 10 2501 50 Unknown Unknown 1300 gal. 3560 22 24396 868.50 720 960 5) VW 984 44 2 Emp. None . Unknown 10378 4 33763 3503.88 1100 o-- aden! 22 12 990 25 1 Emp. None Unknown 3690 33 33864 1249.58 165 1360 ats 42 3 _ 1600 72 Transient — Unknown Unknown 1990 30 35745 711.32 1200 --- ote 42 4 875 136 1 Emp. Unknown Unknown 3610 33 -34278 1237.45 210 320 4 42 18 450 24 Transient None Unknown 1450 . 30 .35712 517.83 50 240 eta 42 16 9800 i 254 2 Emp. 800 Ibs. 3000 gal. 38671 30 33619 13000.84 480 4200 eae 22 V7 5307 280 4 Emp. 500 Ibs. 1350 gal. 15154 22 + 33786 5119.97 255 480 6 22 18 288 9 None None None None Unknown ---- art Unknown Unknown ee 22 19 280 9 None None None 16179 Unknown 33754 5461.15 Unknown Unknown — 20 800 72 3 Emp. **2200 Ibs. **1683 gal. 6010 33 .23081 1988.17 840 400 ae Ue 2 1776 190 1 Emp. 1200 Ibs. 4300 gal. 5600 33 -33243 1861.61 2475 160 ee : : 22 5880 121 4 Emp. None **1060 gal. 77271 49 -33514 25896 .61 450 8320, ee) TOTAL 93394 7373 5500 Ibs. 70739 gal. 476521 160157.51 41125 42740 Average 4245 355 250 3215 21660 28 -28978 7279.89 1869 1943 *Conmputed by a square foot weighted average of total oi] consumption for the school district. Source: Will Riggen, Kake Superintendent of Schools. **Actual 1981 THREA billing data, price in $/KWh. Total bill in dollars. *** The THREA rate classification schedule is Class 11 - Residential; Class 22 -Small Business; (less than 10 KW demand); Class 33 - Large as follows: Commercial (greater than 10 KW demand); Class 42 - Public Building (State or U.S. Government); Class 5) - Churches andCharitable Organizations; Class §2 -Community 3uilding. COMMERCIAL/PUBLIC BUILDING SURVEY A total of twenty-two non-residential establishments were surveyed (out of a 1981 total of thirty-nine metered establishments in service). The same questionaire and techniques were used as in the residential survey. Indivi- dual electricity bills for 1980 and 1981 were cross referenced to survey data using electricity meter numbers. Table III-7 is a listing of the Kake commercial/public building sample. The typical or average building in the sample was insulated to R-value 4.7 in the flcor, R-value 14.2 in the ceiling, and R-value 9.3 in the walls. All of the buildings in the sample, with the exception of the Sitka Phone Company switching center used fuel oi] for space and water heating. Two buildings had auxilary wood heat. Lighting accounted for about 35% of the total electrical consumption. '/ The four retail establishments in the sample had a total of 560.5 cubic feet of referigerator space, 1742.5 cubic feet of freezer space, and one commercial sized ice maker. The Kake Community Center, currently under construction, will be a major energy consumer. When completed, the 15,825 square foot steel building will contain a gymnasium, locker rooms, and 3,000 square feet of office space. There will be no insulation in the floor. The ceiling over the offices will be insulated to R-value 42, the ceiling over the rest of the T/Total lighting watts = (83,865 W X 2,000 hours/year)/1,000 hours/KWh = 167,730 KWh/476,521 total electric consumption = .351989 or 35% of total electric conservation. 34 building R-value 11, and the walls to R-value 25. If one assumes the same fuel oil/sq. ft. ratio as in the rest of the non-residential sample, the Community Center will consume approximately 13,000 gallons of No. 2 distillate per year. A peak load capacity of 31 KW (30480 W) was computed off of the main circuit breaker panel. An average daily load of 20 KWh is expected, according to Marvin Kadake, power plant operator. Assuming the building is used 10 hours per day, all year, it would consume 73,000 KWh of electricity. The building will have 17.5 KW of lighting and an all electric kitchen is planned. MANUFACTURING SECTOR There are three industrial plant operations in the Kake area at the present time: the Soderberg Logging Camp, Ocean Fresh Seafoods (Kake Cold Storage), and Keku Canning Company. 35 Soderberg Logging Company The main camp complex includes the following building stock: 2 bunkhouses - 800 square feet each 1 cook's quarters - 800 square feet 1 office - 800 square feet 1 cookhouse - 1,600 square feet 1 laundromat - 600 square foot trailer 1 owner's trailer - 840 square feet 1 shop - approximately 5,000 square foot steel building An average of fifty loggers and six office personnel are employed in the camp for the nine month logging season. In addition to the buildings in the main camp complex listed above, there are thirty-three trailers occupied by logging families for a total camp population of about 150 people. Each trailer in the camp with the exception of those included in the main complex, has it own electric meter. The Soderberg Logging Company plans to move its logging operation to Portage Bay this summer. '/ Another operation of approximately the same magnitude is expected to take its place at the Kake logging camp site. Non-disclosure problems prevent a building by building breakout of appliance stock and useage intensity. Data on energy consumption for the logging camp are in- cluded in Table III-1. 1/Virgil Soderberg, General Manager. 36 Ocean Fresh Seafoods (Kake Cold Storage) The Cold Storage is the fastest growing operation in the Kake industrial sector. The plant opened in June 1981 and is expected to provide some fifty-five jobs for the May 1 through September 15 season. The main 22,800 square foot steel building contains 92,944 cubic feet of freezer capacity and is insulated to R-value 11 in the ceiling and walls. The company plans to double the present capacity by the 1983 fishing season. !/ Federal law requires fish processing plants to have a backup electrical generating system. The Cold Storage plant chose to instal] its own primary, as well as backup generating system because management estimates that own produced electricity will cost only 15¢/Kwhe/ as opposed to the 1981 effective ; THREA large commercial rate of 32.74¢/KWh. As of May 1982, the average Cold Storage power load was 250 KW with peak load near 450 KW. By the end of the 1982 summer, peak load demand is expected to reach 800 KW. Keku Canning Company The Kake salmon cannery will not be operating during the 1982 season. Furthermore, there are no plans at present to operate in the future. The last of its one pound can processing lines has been sent to Icicle Seafoods in Petersburg in return for Icicle's processing of fish taken by Keku boats .2/ ——— 1/Lloyd Williams, Chief Engineer and Purchasing Agent. 2/Price includes fuel, oil and filters, maintenance, depreciation, and contingency fund. 3/Ed Hansen, General Manager. 37 Existing building stock at the cannery includes: 3 unheated warehouses totalling 26,250 square feet 2 building, unheated, cannery complex totalling 30,000 square feet 2 bunkhouses totalling 4,500 square feet 1 mess hall at 1,500 square feet 6 small crew houses with unknown dimensions At present the warehouses and cannery complex are used for storage. There is a minimal amount of electrical consumption for lights and power tools as fishermen work on boats, hang nets, etc. during the off season. The cannery has its own 275 KW backup generator that is not being used. 38 IV. KAKE ENERGY CONSUMPTION FORECAST 1981 - 2005 In 1981 the Tlingit-Haida Regional Electrical Authority (THREA) and the power generation facility owned and operated by the Kake Cold Storage produced a combined 2,026 megawatt hours of electric power (1,525 MWH by THREA and 501 MWH produced for own consumption at the Kake Cold Storage). The peak in- stantaneous load registered at the THREA facility was a reported 475 kilowatts, that at the Cold Storage, 450 KW. Peak generating capacity at THREA was 1,600 KW, and at the Cold Storage, 975 KW. The average 1981 price per million British thermal units (MMBTu) paid by THREA residential users was $72.67, or 7.2 times the average 1981 price per MMBTu paid in Kake for fuel oil, and approximately 1.9 times the cost of self-generated power to the Cold Storage. The average 1981 price paid by Kake's THREA non-residential users came to $95.35 per MMBTu. Increased State subsidies to Kake users have lowered average 1982 electricity prices to $55.41/MMBTu for residential users and $88.15/MMBTu for non-residential users. On a'¢/KWh basis inclusive of State of Alaska subsidies to Kake residential users the average 1981 price of electrical power was: 24.83¢/KWh - residential 32.58¢/KWh - non-residential Average 1982 prices through April were: 18.93¢/KWh - residential 39.12¢/KWh - non-residential Tables IV-1 through IV-4 give the detailed base case energy load forecast for Kake by class of user and end use, premised on the economic forecast presented in Section II and the following additional postulates. The rationale for each is discussed below. 39 Cb 1981 ALL SOURCES (MMBTUS) RESIDENTIAL 35658.94 COMM/GOVT 24375 .27 MANUFACTURING 3912.13 ALL SECTORS 63946. 33 ELECTRICITY (MWH) RESIDENTIAL 713.49 COMM/GOVT 651.36 MANUFACTURING 661.47 ALL SECTORS 2026.32 FUEL OIL (000'S GALS) RESIDENTIAL 166.22 COMM/GOVT 158.38 MANUFACTURING 11.83 ALL SECTORS 336.43 BOTTLED GAS (000'S GALS) RESIDENTIAL 18.96 COMM/GOVT 1.49 MANUFACTURING 222 ALL SECTORS 20.66 WOOD (CORDS) RESIDENTIAL 600.00 COMM/GOVT 10.00 ALL SECTORS 610.00 1985 4437666 27945.51 5868.19 78190.36 1165.88 865.31 ~ 992.21 3023.40 206.03 178.68 17.75 402.46 27.67 1.68 33. 29:68 662.21 11.28 673.49 TABLE IV-1 KAKE ENERGY CONSUMPTION SUMMARY 1990 4B249.58 30149.82 6043.76 B4443.17 1279.61 1011.90 1043.19 3334.70 223.99 190.86 17.75 432.61 30.29 1.79 +35 32.43 715.99 12.05 728.04 EXCLUDES FUEL OIL USED FOR POWER GENERATION BY THREA AND THE KAKE COLD STORAGE 1995 50708 .30 33159.93 6219.33 90087 .56 - 1399.95 1228.16 1094.17 3722.28 235.35 207.11 17.75 460.21 32.77 1.95 +36 35.08 733.91 13.08 746.99 2000 53713.96 35474 .95 6394.90 95583.80 1532.79 1407.18 1745.15 4085.13 249.27 219.29 17.75 486.31 35.58 2.06 +38 38.02 760.28 13.85 774.12 2005 57320.81 39438.96 6570.46 103330.23 1679.13 1736.51 1196.14 4611.78 265.99 239.59 17.75 523.34 38.74 2.25 40 41.39 796.13 15.13 811.26 lt SPACE HEATING FUEL OIL BOTTLED GAS wooD ELECTRICITY TOTAL WATER HEATING FUEL OIL BOTTLED GAS wooD ELECTRICITY TOTAL LIGHTS & APPLIANCES FUEL OIL BOTTLED GAS wooD ELECTRICITY TOTAL TOTAL ALL USES FUEL OIL BOTTLED GAS WwooD ELECTRICITY GRAND TOTAL 1981 18704 .55 0.00 8550.00 81.63 27336.18 4253.74 833.37 0.00 151.06 5238.17 0.00 882.14 0.00 2202.44 3084.58 22958 .29 1715.52 8550.00 2435.13 35658.94 1985 20644 .04 0.00 9436.56 90.09 30170.69 7812.72 1530.63 0.00 166.72 9510.07 0.00 973.61 0.00 3722.29 4695.90 28456.76 2504.24 9436.56 3979.10 44376 .66 TABLE [V-2 KAKE RES(DENTIAL ENERGY FORECAST (MMBTU'S) 1990 22320.55 0.00 10202.90 97.41 32620.86 8617.81 1688.36 0.00 180.26 10486.44 0.00 1052.68 0.00 4089.61 5142.29 30938.36 2741.04 10202.90 4367.28 4829.58 1995 22879.38 0.00 10458 .35 99.85 33437 .58 9627.39 1886.16 0.00 184.77 11698. 32 0.00 1079.03 0.00 4493.37 5572.40 32506.77 2965.19 10458 .35 4777.99 50708.30 2000 23701.20 0.00 10834.01 103.43 346 38.64 10727 .83 2101.75 191.41 13020.99 1117.79 4936.54 6054.33 34429 .03 3219.54 10834.01 5231.38 53713.96 2005 24818. -00 11344, 108. 36272. 11920, 2335. -00 43 14456. 200 36739. 3505. 11344, 5730. 57320. 87 90 31 09 32 38 13 .00 1170, -00 5422. 6592. 50 08 59 19 88 90 83 81 ev SPACE HEATING FUEL OIL ELECTRICITY wooD TOTAL WATER HEATING FUEL OIL ELECTRICITY TOTAL LIGHTS & APPLIANCES BOTTLED GAS ELECTRICITY TOTAL INDUSTRIAL PROCESSES ELECTRICITY TOTAL TOTAL ALL USES FUEL OIL BOTTLED GAS ELECTRICITY wooD GRAND TOTAL 1981 17500.09 11.26 142.50 17653.85 4374.99 16.63 4391.62 134.63 613.73 748.35 1581.44 1581.44 21875 .08 134.63 2223.07 142.50 24375 .27 1985 19743 .69 12.71 160.77 19917.17 4935.88 18.76 4954.65 151.89 TON ND 946.38 2127.31 2127.31 24679.57 151.89 2953.27 160.77 27945.51 TABLE IV-3 KAKE COMMERCIAL/GOVERNMENT ENERGY FORECAST (MMBTU'S) 1990 21089.85 13.57 171.73 21275.15 5272.42 20.04 5292.47 162.24 915.21 ‘1077.45 2504.75 2504.75 26362.27 162.24 3453.58 171.73 30149 .82 1995 22884 .73 14.73 186.35 23085.81 5721.14 21.75 5742.89 176.05 1090.29 1266.35 3064.89 3064.89 28605 .87 176.05 4191.66 186.35 33159.93 2000 24230.89 15.59 197.31 24443.80 6057.68 23.03 6080.71 186.41 1232.52 1418.93 3531.52 3531.52 30288.57 186.41 4802.66 197.31 35474.95 2005 2647449 17.04 215.58 26707.11 6618.57 25.16 6643.73 203.67 1490.04 1693.71 4394.41 4394.44 33093.07 203.67 5926.65 215.58 39438.96 ev TABLE Iv-4 KAKE MANUFACTURING ENERGY FORECAST (MMBTU'S) 1981 i 1985 1990 1995 2000 2005 SPACE HEATING “FUEL OIL 1307.76 1961.64 1961.64 1961.64 1961.64 1961.64 ELECTRICITY 21.29 31.93 31.93 31.93 31.93 31.93 TOTAL 1329105 1993.57 1993.57 1993.57 1993.57 1993.57 WATER HEATING “FUEL OIL. 326 .87 490.31 490.31 490.31 490.31 490.31 ELECTRICITY 32.34 48.51 4g .51 48.51 48.51 48.51 TOTAL 359.21 538.82 538.82 538.82 538.82 538.82 LIGHTS & APPLIANCES BOTTLED GAS 19.91 29.86 31.43 33.00 34.57 36.14 ELECTRICITY 324.47 486.71 512.33 537.94 563.56 589.18 TOTAL 344: 38 516.57 543.76 570.94 598.13 625.32 INDUSTRIAL PROCESSES ELECTRICITY 1879.49 2819.23 2967.61 3115.99 3264.37 3412.75 TOTAL 1879.49 2819.23 2967.61 3115.99 3264.37 3412.75 TOTAL ALL USES FUED O10 |<. 1634.63 2451.95 2451.95 2051.95 2451.95 2451.95 BOTTLED GaS 19.91 29:86 31.43 33.00 34.57 36.14 ELECTRICITY 2257.59 3386.39 3560.38 3734.38 3908.38 4082.37 GRAND TOTAL 3912.13 5868.19 6043.76 6219.33 6394.90 6570.46 EXCLUDES FUEL OIL USED FOR POWER GENERATION BY THREA AND THE KAKE COLD STORAGE Assumption 1: Assumption 2: Assumption 3: Assumption 4: Assumption 5: Assumption 6: Real (inflation adjusted) subsidized, THREA electriatty prices remain at 1982 levels. . Real fuel oil, bottled gas, and wood prices rise at a constant 2.6 percent per year. Residential energy consumption for space heating, (all fuels), rises at the rate of Kake population growth. Per capita residential energy consumption for water heating, (fuel oil and bottled gas), rises at a rate equal to 1.25 times the rate of growth of real per capita income. Per capita residential energy consumption for water heating (electricity) holds at the 1981 level. Per capita residential energy consumption for lights and appliances, (electricity), grows at the rate of growth . of real per capita income. Assumption 7: Assumption 8: Assumption 9: Assumption 10: Per capita residential energy consumption for lights and appliances, (bottled gas), remains constant. Per establishment commercial/government consumption for space heating, (all fuels), remains constant. Per establishment commercial/government consumption for water heating, (all fuels), remains constant. Per establishment commercial/government consumption for electricity (for lighting) rises 15.0 percent every five / years. 1/0ffice machine energy consumption is included under "industrial processes" in the commercial sector. de Assumption 11: Assumption 12: Assumption 13: Assumption 14: Assumption 15: Per establishment commercial/government consumption of bottled gas for lighting remains constant. Per establishment commercial/government consumption of electricity for industrial processes rises 50.0 percent every five years (8.5 percent per year). Between 1981 and 1985, manufacturing consumption of energy (all uses) rises 50.0 percent (largely Cold Storage expansion). Between 1985 and 2005, manufacturing consumption of energy for space heating and water heating remains constant. Between 1985 and 2005, manufacturing consumption of energy for lights and appliances, and for industrial processes rises at the rate of growth of Kake commercial fishing permits. Given these assumptions, total Kake end use energy consumption, all fuels, in the year 2005, will be an estimated 103,330.24 MMBTu's (Table IV-1), of which 15.2 percent will be supplied by electric power, 70.0 percent by fuel oil, and the remainder by bottled gas (3.6 percent) and wood (11.2 percent). !/ 1/Respective percentages in the base year (1981) were 10.8 percent (electricity), 72.7 percent (fuel oi1), 2.9 percent (bottled gas), and 13.6 percent (wood). The rise in electricity's share of total MMBTu consumption over the forecast period is due to increasing appliance saturation by residential and commercial/ government users. 45 On an MWH basis, inclusive of self-supplied power at the Kake Cold Storage, terminal year (2005) electricity consumption, all sectors, all users, is an estimated 4,611.78 MWH, implying a peak load of 1.14 megawatts for THREA and 900 kilowatts at the Kake Cold Storage (given 1981 peak to average ratios for each), or a combined peak load of 2.040 megawatts. Current (1982) peak generating capacity at the THREA facility is 1.6 megawatts, and at the Cold Storage 975 kilowatts, with a planned addition of 325 kilowatts -at the Cold Storage. This capacity appears adequate to handle projected peak loads through the year 2005, assuming normal maintenance and replacement of" generating units after a 20 year use life. Base load estimates for the Kake power plant must be estimated indirectly because the Kake generators are not demand metered. Using 1981 monthly KWh consumption data supplied by THREA (based on monthly readings of household actBics pire 6.0 percent line loss) and defining base load as the smallest monthly KWh consumption estimate made by THREA, the 1981 ratio of base load to average load was .529. The Kake power plant operator has judgementally estimated a base to average ratio of .657. These two estimates when mul- tiplied by our year 2005 forecast of average THREA hourly consumption (defined as average annual consumption divided by 8760) yield a year 2005 hourly base load forecast of between 220KW and 274KW (exclusive of the Cold Storage) , the arithmetic mean of which is 247KW. In 1981, the estimated hourly base 46 * load, using the same method was 103KW. In summary, we estimate the following THREA hourly base load, average load, and peak load totals: 1981 2005 fourly Base Load 103KW 247KW Hourly Avg. Load 174KW 418KW Hourly Peak Load 475KW 1,140KW (Figures exclude Kake Cold Storage) PRICE EFFECTS Table IV-5 (next page) gives average real Kake energy prices ($/MMBTu) through the year 2005 under the price increase assumptions mandated for this study by Alaska Power Authority regulations. Real electricity prices are assumed to hold at their 1982 levels, other prices to inflate at 2.6. percent per year (base case) or 5.2 percent per year (alterna- tive). At 2.6 percent or 5.2 percent annual rates of increase, electricity prices remain significantly higher than the prices of alternative fuels, with one exception. Given a 5.2 percent per year relative price increase of bottled gas, its price per MMBTu would exceed the price of residential electricity by the year 2000. 47 TABLE IV - 5 RELATIVE KAKE ENERGY PRICES ($/MMBTu) 1982 1985 1990 1995 2000 2005 ELECTRICITY Residential 55.40 55.40 55.40 55.40 55.40 55.40 Non-resid. 88.15 88.15 88.15 88.15 88.15 88.15 Cold Storage 39.51 39.51 39.51 39.51 39.51 39.51 FUEL OIL @2.6% 10.33 11.16 12.69 14.43 16.40 18.65 @5.2% 10.59 12.33 15.89 20.47 26.38 33.98 BOTTLED GAS 02.6% 24.63 26.60 30.24 34.38 39.09 44.45 @5.2% 25.26 29.41 37.89 48 .83 62.91 81.06 WOOD 02.6% 3.60 3.89 4.42 5.03 5.72 6.50 @5.2 3.69 4.30 5.54 7.14 9.20 11.85 NOTES: (1) Base year is 1981 (survey responses elicited for 1981). (2) Cold Storage electricity prices are assumed to accellerate at the same rate as THREA prices. Hence they are shown con- stant, (i.e. relative price variation is captured by increases in fuel oi], bottled gas, and wood relative to electricity). 48 The maintained disparity in the relative price of electricity heavily influences the base case load forecast (2.6 percent price increases for fuels other than electricity), and assures that an alternative electricity load forecast pre- mised on a 5.2 percent per year decline in relative electricity prices will not differ significantly from the base case forecast presented in Tables IV-1 through IV-4. If relative electricity prices decline no faster than 5.2 percent per year in Kake, one can safely project that energy requirements for space heating and for water heating in Kake will continue to be met by fuel oil and wood. Given no price incentive for residential and ccmmercial/government users to shift to electric space heating and water heating (see Tab’e IV-5), there is no reason to expect total THREA Kake electricity demand to exceed that level which can be met from THREA's existing (1982) peak generating capacity, unless the Kake Cold Storage plant is shifted over from sel f-supplied to THREA supplied electric power. With self-supplied power at the Cold Storage available at less than one-half the THREA non-residential average price, there is no price incentive for the Cold Storage to shift to THREA power. Because relative prices so clearly dictate that THREA users not shift to electric water heating and space heating, the base case load forecast presented above is driven solely by income, population, and the number of commercial/government establishments. We have not presented a detailed forecast for the 5.2 percent relative price case, because the additional impacts on electricity consumption over the 2.6 percent base case would be so slight. Indeed, if fuel oi1, bottled gas, and 49 wood prices were to advance at a steady 5.2 percent annual rate, the result would not be increased consumption of electricity but rather the opposite. More rapid escalation of these prices (provided the posted prices do not rise to the level of electricity prices) would exert what economists refer to as a negative income effect on all forms of energy consumption. Given an annual average price increase of 5.2 percent for fuel oi], bottled gas, and wood, (all other things equal to the base case), we would project reduced consumption of energy in total relative to the base case as consumers turn more heavily to the cheapest fuel for space heating (wood), and take steps to conserve on overall energy consumption. An examination of Kake residential energy bills and Kake personal income wil] clarify this point. Table IV-6 gives the relevant calculations. The calculations show projected Kake residential energy consumption and expen- diture in the 2.6 percent price increase base case, and show expenditure as it would be if real energy prices other than electricity prices rose at a 5.2 percent annual rate, and if consumption patterns did not change from the base case. In the 2.6 percent base case, total residential energy bills in Kake absorb only a slightly higher percent of Kake personal income in the year 2005 than in 1981 (16.9 percent versus 16.2 percent). In the 5.2 percent alternative case, the higher prices of wood, fuel oil, and bottled gas (relative to the base case) imply a considerable extra expenditure for energy both in the ab- solute and as a percentage of personal income, assuming no substitution toward lower priced fuels occurs. Substitution possibilities do, however, exist. As shown in Table IV-5, above, real wood prices would remain considerably below fuel oil prices throughout the | forecast horizon. A switch .from fuel oi] to wood for residential space heating could yield significant savings. 50 TABLE IV - 6 KAKE RESIDENTIAL ENERGY BILLS (Expenditure in 009's of 1982 $) 1981 1985 1990 1995 2000 2005 FUEL OIL MMBTu's 22958.29 28456.76 30938.36 32506.77 34429.03 36739.19 Expenditure (2.6%) 231.2 317.6 392.6 469.1 564.6 685.2 Expenditure (5.2%) ol.2 350.9 491.6 665.4 908.2 1248.4 BOTTLED GAS MMBTu's 1715.52 2504.24 2741.04 2965.19 3219.54 3505.88 Expenditure (2.6%) 41.2 66.6 82.9 101.9 125.9 155.8 Expenditure (5.2%) 41.2 73.6 103.9 144.8 202.5 284.2 wooD MMBTu 's 8550.00 9436.56 10202.90 10458.35 10834.01 11344.90 Expenditure (2.6%) 30.0 36.7 45.1 52.6 62.0 1327 Expenditure (5.2%) 30.0 40.6 56.5 74.7 99.7 134.4 _ ELECTRICITY MMBTu 's 2435.13 3979.10 4367.28 4777.90 5231.88 5730.83 Expenditure 177.0 220.4 241.9 264.7 289.8 317.5 TOTAL EXPENDITURE AS PERCENT OF PERSONAL INCOME 2.6% Case 16.2 12.8 13.9 14.7 15.7 16.9 5.2% Case 16.2 13.7 16.3 19.0 - 22.6 27.2 51 If, for example, one-half of the projected year 2005 base case residential fuel oi] consumption for space heating (total of 24818.7 MMBTu's, Table IV-2), was shifted to wood consumption at $11.85 per MMBTu in the 5.2 percent alternative case, residential energy bills would decline by $275 thousand from the amounts shown in Table IV-6, bringing total year 2005 residential energy expenditure down to 23.4 percent of personal income. An additional shift of one-half (year 2005) fuel oi] consumption for water heating to wood would save another $132 thousand, and would bring total 2005 residential energy expenditure in Kake down to 21.7 percent of personal income. Increased conservation and technological advances in home heating unit con- struction could yield further savings. What can not be expected under either the 2.6 percent price assumption or the 5.2 percent price assumption is a price induced shift to electric space and water heating from fuel oi], bottled gas, and wood. In either the 2.6 percent or the 5.2 percent case, electricity prices remain prohibitively high through the year 2005. INCOME EFFECTS In neither the 2.6 percent case nor the 5.2 percent case do relative THREA electricity prices decline enough to induce a measureable price substitution effect in favor of increased electricity consumption. Rising real per capita incomes in Kake, and an increasing population do, however, portend an increasing demand for electricity. The important question is, How much of an increase? 52. An elasticity is a ratio of two percent changes. If a 10 percent increase in real per capita income produces a long term (2+ years for our purposes) 15 percent increase in the demand for electricity to operate appliances, we say that the long term income elasticity cf appliance electricity demand is 1.5 (ratio of 15 to 10). Although the database for Kake is much too small to allow one to confidently estimate Kake income elasticities for energy sources, one can at least exa- mine behavior in other parts of Alaska and the United States to gain some potentially valuable insights. Table IV-7 is reproduced from a survey article by Lester Taylor. It summarizes econometric work published prior to 1975 pertaining to measurement of the income elasticity of electricity demand. Measured income elasticities for residential energy demand vary from -0.20 to 1.94. The only estimate of the commercial income elasticity of demand is 0.86. A more recent survey of energy elasticities published by Resources For the Future, shows that measured income elasticities of electricity demand for residential and commercial users continue in this range. !/ On a per capita or per customer basis, theory tells us that the income elasticity of electricity demand should be lower for very low income demanders , than for higher income demanders. Much of the historical increase in electri- city demand attributable to income gains, was generated in a two stage, derived demand process. Rising incomes led to increased purchases of energy-using 1/Bohi, Douglas R., Analyzing Demand Behavior, A Study of Energy Elasticities, (Resources For the Future by Johns Hopkins Press, Baltimore), 1981. 53 TABLE IV - 7 SUMMARY OF INCOME ELASTICITIES OF ELECTRICITY DEMAND SHORT-RUN LONG-RUN TYPE OF DATA RESIDENTIAL Study No. 1 (1962) 1.16 NE CS, Cities Study No. 2 (1962) 0.10+ Small CS-TS, States Study No. 3 (1970) 0.13 1.94 TS, US Study No. 4 (1971) NE O+ CS, SMSA's Study No. 5 (1973) 0.02 0.20 - CS-TS, States Study No. 6 (1973) NE 0.80 CS, States Study No. 7 (1973) (-0.20) CS-TS, Utility Svc. Areas Study No. 8 (1973) 0.14 1.64 CS-TS, States COMMERCIAL Study No. 5 (1973) 0.11 0.86 CS-TS, States NOTE:. NE - Not Estimated CS - Cross Section TS - Time Series SOURCE: Taylor, Lester, "The Demand For Electricity: A Survey," The Bell Journal of Economics, Spring 1975, excerpted from Table 4. 54 appliances, or more frequent and intensive use of the existing appliance stock. This, in turn, generated an increased demand for energy. Lower in- come energy consumers can be expected to increase their derived demand for energy as real per capita income goes up, but may divert a larger portion of their income gains to such necessities as food and medical expenses or to improving their means of transportation, than would higher income consumers. In 1981, estimated Kake real per capita personal income was $5,205.00 or just about 36 percent of the Statewide level. Although our economic projection shows Kake real per capita personal income rising to $9,658.00 by the year 2005, this is still just 67 percent of 1981 Statewide real per capita income. Kake qualifies as a low income community relative to the Statewide average, throughout the forecast horizon. A check of the assumptions used to generate the Kake energy demand projections will show that at a minimum, per capita (or per establishment) energy demand remains constant. In certain cases per capita (or per establishment) energy demand has been projected to increase using income or per establishment elasticities greater than or equal to 1.0. Those cases where increased per capita (per establishment) demand have been projected are: Residential Water Heating (Fuel 0i1, Bottled Gas) - The income elasticity per capita of demand is 1.25, (Assumption 4). Residential Lights and Appliances (Electricity) - The income elasticity per capita demand is 1.0, (Assumption 6). Commercial/Government Lighting (Electricity) - Per establishment demand rises 2.85 percent per year, (Assumption 10). Commercial/Government Industrial Processes - Per establishment demand rises 8.5 percent per year, (Assumption 12). 55