Loading...
HomeMy WebLinkAboutNorth Slope Borough Energy Assessment Final Report 1992UNIVERSITY of ALASKA ANCHORAGE INSTITUTE OF Soct ‘AL AND ECONOMIC RESEARCH Steve Colt Associate Professor of Economics 3211 Providence Drive Anchorage, Alaska 99508-4614 Physical location: 4500 Diplomacy Drive, Suite 50] Phone: 907-786-1753 + Fax: 907-786-7739 Steve_colt@uaa.alaska.edu + Www. iser.uaa.alaska.edu North Slope Borough Energy Assessment FINAL REPORT July 1992 Contributors: Analysis North Institute of Social & Economic Research nalysis iversity of Alaska, Anchorage 911 W. 8th Avenue as praia whale ei Suite 204 Anchorage, AK 99508 Anchorage, AK 99501 ASCG INCORPORATED ENGINEERS * ARCHITECTS * SCIENTISTS * SURVEYORS ASCG IREORPORATED ENGINEERS * ARCHITECTS * SCIENTISTS ¢ SURVEYORS July 7, 1992 Mr. Forrest Olemaun North Slope Borough P.O. Box 69 Barrow, Alaska 99723 Subject: NSB Project No. 50-52-19, Energy Planning Assessment Dear Mr. Olemaun: ASCG Incorporated is pleased to submit the Final Report on the North Slope Borough Energy Planning Assessment. This report presents a broad overview of village and regional energy alternatives for the Borough. Energy resources such as gas and coal were compared to the base case use of diesel fuel. Similarly, local electrical generation versus central generation and transmission systems were evaluated. Cost projections and economic analysis for nineteen alternatives were evaluated and ranked on the basis of the present value of the total cost of energy. In addition, the energy subsidy costs to the Borough and future projections were prepared for your consideration. Recommendations for Energy Efficiency Programs are also provided. We appreciated the opportunity to prepare this assessment for the Borough. We look forward to working with you on the implementation of these recommendations. ice President Science Division KMG:BS:CC: 1300-2015 301 ARCTIC SLOPE AVENUE, SUITE 200 » ANCHORAGE, ALASKA 99518-3035 (907) 349-5148 * FAX (907) 349-4213 L NORTH SLOPE BOROUGH ENERGY ASSESSMENT SECTION ES 50 A DW tm TABLE OF CONTENTS TITLE Executive Summary Introduction Current and Projected Energy Use and Cost Energy Efficiency Programs Summary of Alternative Energy Scenarios Economic Analysis of Alternatives Recommendations Reference Documents APPENDICES Population Forecast Energy Subsidy Analysis Subsistence Fuel Usage Energy Efficiency Programs Detail System Design Basis and Cost Estimates Economic Analysis Methodology Optimal Timing of a Gas Savings Investment Resource Assessment SECTION ES Executive Summary NORTH SLOPE BOROUGH ENERGY ASSESSMENT EX RY The purpose of this report is to provide the North Slope Borough with an evaluation of its current and future energy needs and to economically assess the alternatives available to meet these needs. Currently the NSB pays over $15,000,000 per year for energy subsidies. This amount does not include energy purchases for NSB facilities at the prevailing billing rates. Clearly, the NSB has a financial interest in reducing the overall cost of electric and space heating energy costs throughout the Borough. The subsidy payment and cost components are shown in the attached chart for Barrow gas and Wainwright diesel fuel. A present value analysis of nineteen scenarios for providing energy to the villages of Atqasuk, Nuiqsut, Point Hope, Point Lay and Wainwright over a thirty-five year period was performed. The attached table summarizes the results and ranks the alternatives by net benefits and benefit/cost ratios. On this basis, the following priority of recommendations are offered: Ene upply Alternatives: 1.0 Pursue the development of local gas resources. The estimated most favorable benefit/cost ratio for local gas development scenarios is 4.26 - 2.08. 1.1 Perform a gas resource assessment study for the villages of Nuiqsut, Atqasuk, Wainwright and Point Lay. The estimated cost is $220,000. Reference: Section 5 and Appendix H. ES-1 2.0 3.0 4.0 1.2 1.3 Based on the results of the resource assessment study, conduct seismic testing to support gas development in close proximity to the villages of Atqasuk, Nuiqsut, Wainwright, and Point Lay. The estimated cost for seismic evaluation is $3,500,000. Reference: Appendix H. Based on the results of seismic testing, analysis and recommendations, proceed with drilling of gas wells, and subsequent gas distribution development where gas is found. In the event local gas resources are not economically feasible, conduct a detailed evaluation of electrical transmission from Kuparuk Industrial Center (KIC) to Nuiqsut. The most favorable estimated benefit/cost ratio for the KIC-Nuiqsut electrical transmission system is 2.04. Conduct a detailed evaluation of electrical transmission from Barrow to Atqasuk, in the event local gas resources are not economically feasible. The estimated benefit/cost ratio for the Barrow-Atgasuk electrical transmission system is 1.27. For western villages where local gas development is determined not feasible, consider electrical transmission options using generation from Barrow. 4.1 Assuming local gas development in not feasible in Atqasuk, Wainwright, and Point Lay, consider electrical transmission options from Barrow to the western villages. Baseload generation in Barrow with transmission to Atgasuk, Wainwright, Point Lay, and Point Hope is feasible under conditions of (1) high growth in diesel expenses (3.4% per year), (2) capital costs for the transmission line at the low end of the reported range ($73 million), and (3) natural gas reserves of at least 265 billion cubic feet from the Walakpa field. Under these conditions, this project shows break-even economics. (B/C ratio 1.01). 5.0 4.2 Consider individual transmission line segments to serve, for example, Atqasuk and Wainwright only. Because loads vary among villages, transmission lines serving some high-load villages may be more economic than transmission lines serving all western villages. Gas pipeline, coal fired generation and district heating systems were evaluated. Due to the high capital development costs and transportation costs for coal, these alternatives do not appear to be economically feasible if developed solely for the purpose of meeting the energy demand rates considered for the villages. Energy Efficiency Improvements: 1.0 2.0 3.0 Implement the following energy efficiency programs in all 7 NSB villages: (1) Tune heating systems, (2) distribute low-flow showerheads, and (3) distribute compact fluorescent light bulbs to residences. These measures are likely to be cost-effective even in villages where local gas is developed. The estimated benefit/cost ratio range is 1.6 to 16.1. Reference: Section 3. In villages where natural gas is not an option, begin implementation of other programs identified to improve the efficiency of the building stock and equipment. The estimated benefit/cost ratio range is 1.4 to 5.3. Reference: Section 3. For subsistence camp use, encourage the replacement of white gas and kerosene appliances with units which can burn unleaded gas and diesel, respectively. These fuels appear to offer substantial cost savings. The estimated benefit/cost ratio range is 2.0 to 4.0. Reference: Section 2 Appendix C. 4.0 North Slope Borough agencies which buy electricity and diesel fuel directly from the NSB Department of Municipal Services should use the actual avoidable cost of energy production as a benchmark against which to evaluate efficiency improvements. Using the tariff rate of energy as a basis for departmental decision making may lead to bad decisions and increased overall costs to the North Slope Borough. ES-4 COMPONENTS OF THE TOTAL COST OF GAS FROM BUECI s = | 1 Interest Income from Fed. Endowment $ per Mcf Costs Payments COMPONENTS OF THE TOTAL COST OF RESIDENTIAL FUEL IN WAINRIGHT Village Fuel Program ae Assistance a Consanar Payments Fuel Cost at Refinery $ per gallon ————| Esreea Momt Fee costs payments Summary of Net Benefits and Benefit/Cost Ratios for All Alternatives, in Rank Order Present Value of Costs and Benefits from 1995-2030 at 5%, in Thousands of 1991 Dollars Most Favorable Assumptions | Least Favorable Assumptions Present Benefit Benefit Capital Cost Value | Project Net Cost | Project Net Cost Low High NIOC Cost Benefits (4) Ratio | Cost Benefits (4) Ratio 0.88 (2,697) 0. 19,457 (4,905) 0.75 19,867 (6,904) 0.65 12,177 (4,169) 0.66 21,077 (12,886) 0.39 (14,973) 0.47 0.21 6-4-AIN 2-4-ATQ 10-4-NQT 11-4-NQT 12-4-PIZ 19-6 18-6 3-5-ATQ 7-5-AIN 4-5-ATQ 15-5-PHO 1-4-ATQ 8-5-AIN 16-5-PHO 9-4-NQT 13-5-PIZ 14-5-PIZ 5-4-AIN 17-6 Local Gas Wells (2) Local Gas Wells (2) Local Gas Wells (2) Electric Transmission from KIC Local Gas Wells (2) Barrow Generation to Atqasuk Barrow generation to western villages Coal Electric & District Heat Coal Electric & District Heat (3) Coal All-Electric Heat Coal Electric & District Heat (3) Gas Pipeline from Walakpa Coal All-Electric Heat (3) Coal All-Electric Heat (3) Gas Pipeline from KIC Coal Electric & District Heat (3) Coal All-Electric Heat (3) Gas Pipeline from Walakpa via Atqasu! Mine Mouth Coal to PHO, PIZ, AIN, ATQ, BRW 19,360 23,960 (3,161) 0.87 17,760 (4,664) 0.74 25,560 (6,152) 0.76 28,611 (6,473) 0.77 21,660 (7,808) 0.64 21,760 (8,009) 0.63 29,972 (10,116) 0.66 19,260 (10,451) 0.46 19,060 (13,136) 0.31 53,105 (21,613) 0.59 153,033 (8,312) 23,960 (12,725) 0.47 17,760 (9,813) 0.45 25,560 (15,460) 0.40 28,611 (14,060) 0.51 21,660 (15,494) 0.28 21,760 (15,947) 0.27 29,972 (17,988) _ 0.40 19,260. (14,470) 0.25 19,060 (16,565) 0.13 (33,615) 0.37 Notes: (1) NIOC = Non-Fuel Incremental Operating Cost (2) Local gas well case results assume successful completion of development wells. No risk factor is assigned to the benefits reported here. (3) Results for local coal generation cases using Deadfall Syncline Coal are calculated ignoring a $15.2 million mine development cost which cannot be allocated to any one village. (4) Parentheses indicate negative numbers. SECTION 1 Introduction NORTH SLOPE BOROUGH ENERGY ASSESSMENT INTRODUCTION The purpose of this report is to provide the North Slope Borough with an evaluation of its current and future energy needs and to evaluate the alternatives available to meet those needs. This report presents an energy planning assessment to the Borough in accordance with NSB Project No. 50-52-19. Residents, businesses, and other facilities in the North Slope Borough currently consume almost 47 million kilowatt-hours (kWh) of electric power at a producing cost of about $16.2 million. Seventy percent of this electricity is generated in Barrow, where total costs are a modest 15 cents/kWh. The other 30% is produced with diesel generators in the villages and costs about 84 cents/kWh. Of the total $16.2 million cost, consumers, including various NSB departments such as the school district, pay $4.2 million. The Borough pays $11.5 million, and the State of Alaska is potentially obligated to pay $400,000 through the Power Cost Equalization Program (PCE). Village residents, businesses, and Borough facilities currently use about 1.9 million gallons of diesel directly for heating and vehicles, in addition to the 1.3 million gallons used for electricity generation. The total cost of this fuel is about $4.9 million. Residents and non-Borough commercial customers pay about $1.9 million of this cost. The Borough pays about $1.3 million in subsidies and $1.3 million in costs allocated to its own departmental operations, including schools. The federal government’s energy assistance program pays about $124 thousand towards residential fuel bills. To better understand how energy is consumed, what it is costing and what economic alternatives are available, this report addresses the following topics: 1-1 NORTH SLOPE BOROUGH ENERGY ASSESSMENT Energy use patterns and costs: Current energy demand for residential, commercial and public facilities is evaluated. Also subsistence energy uses are reported. The actual cost of gas, diesel and electricity are computed and compared with consumer rates and government subsidies. Many of the current consumer prices for energy in the NSB bear little relation to the total costs of production, storage, and distribution. For gas distributions in Barrow, we estimate the total cost to be $5.58/Mcf. Consumer payments average about $1.60, interest income from a past federal grant contributes about $1.90, and NSB subsidies cover the remaining $2.10 as shown in Figure 1-1. Similarly, Figure 1-2 shows the distribution of fuel cost and payments for home-delivered diesel in the coastal village of Wainwright at a cost of $2.96 with the NSB subsidizing $1.53/gal. With natural gas being the primary energy source in Barrow and diesel fuel used for both electric generation and space heating in the villages, the current usage patterns establish the "Base Case" for assessing the economic advantages of other energy sources for the villages. Population and associated load growth and diesel fuel costs are forecast for the next twenty years. Energy efficiency and conservation programs: Numerous areas for energy conservation in both residential and non-residential facilities are considered. A benefit/cost analysis is presented for each energy efficiency recommendation and the resulting energy savings identified over a ten year period. Energy alternatives for the villages: Nineteen scenarios are evaluated for meeting the electrical and space heating needs for the villages of Atqasuk, Nuiqsut, Point Hope, Point Lay and Wainwright. Village locations are shown in Figure 1-3. The energy sources evaluated include 1) gas pipeline systems, 2) gas well development, 3) coal power plant generation with district heating, and 4) high voltage electrical transmission systems. Local generation to meet individual 1-2 NORTH SLOPE BOROUGH ENERGY ASSESSMENT village demands are considered as well as regional and subregional concepts to meet the energy needs of these North Slope Borough communities. e Economic analysis of alternatives: The alternatives described above are economically evaluated to assess the present value of the costs of each scenario over an operating period of thirty-five years. This provides community leaders with the opportunity to make decisions based on the long term costs of energy projects. Recommendations for implementing a comprehensive energy plan for the North Slope Borough are detailed and prioritized in Section 6. To the extent possible, information from previous reports and studies were used in this assessment. These reports and other reference documents are summarized in Section 7. In order to present the information and conclusions clearly, much of the detail data and assumptions have been incorporated in the Appendices. In this manner the primary sections of the report are not burdened with all the detail information. However, should individual readers have need for this level of information, it is available in the Appendices. The following list of contacts is offered for those requiring additional information: ° Colt, Steve; Institute of Social and Economic Research, University of Alaska, Anchorage, 907-786-7710; Section 2 - Energy Use and Cost, Section 5 - Economic Analysis of Alternatives. e Mitchell, Alan; Analysis North, 907-272-3425; Section 3 - Energy Efficiency Program. 1-3 NORTH SLOPE BOROUGH ENERGY ASSESSMENT Schutte, Bob; ASCG Incorporated, 907-349-5148; Section 4 - Alternative Energy Scenarios. FIGURE 1-1__ COMPONENTS OF THE TOTAL Cost OF GAS FROM BUECI otal Cost: $5.58/Mcf _- -# a hex oot (ILL Gas Field O&M Interest Income oe Fed. Endowment $ per Mcf Costs . Payments Figure 1-2 COMPONENTS OF THE TOTAL COST OF RESIDENTIAL FUEL IN WAINWRIGHT AC NSB: Fuel Handling NSB: Fuel Purchase Federal Assistance VLE LL rrr Fuel Cost at Reaeary # $ per gallon costs payments PT. HOPE NORTH SLOPE BOROUGH, ALASKA eo Be S BARROW, [Ufort WALAKPA GAS FIE WAINWRIGHT ns an KUPARUK M ~“*ATQASUK en e e-"30 i PRUDHOE PT. LAY Hiniinii BAY DEADFALL SYNCLINE MINE ANAKTUVUK PASS @ Sea KAKTOVIK FIGURE 1-3 SECTION 2 Current And Projected Energy Use And Cost NORTH SLOPE BOROUGH ENERGY ASSESSMENT CURRENT AND PROJECTED ENERGY USE AND COST OVERVIEW Residents, businesses, and other facilities in the North Slope Borough currently consume almost 47 million kilowatt-hours (kWh) of electric power'. The total cost of producing this power -- including annualized payments on past capital outlays -- is about $16.2 million. Seventy percent of this electricity is generated in Barrow, where total costs are a modest 15 cents/kWh. The other 30% is produced with diesel generators in the villages and costs about 84 cents/kWh. Of the total $16.2 million cost, consumers, including other NSB departments? such as the school district, pay $4.2 million. The Borough pays $11.5 million, and the State of Alaska is potentially obligated to pay $400,000 through the power cost equalization program (PCE).? Village residents, businesses, and Borough facilities currently use about 1.9 million gallons of diesel directly for heating and vehicles (in addition to the 1.3 million gallons used for electricity generation). The total cost of of this fuel is about $4.9 million. Residents and non-Borough commercial customers pay about $1.9 million of this cost. The Borough pays about $1.3 million in subsidies and $1.3 million in costs allocated to its own departmental operations, including schools. The federal government’s energy assistance program pays about $124 thousand towards Village consumption is computed for FY 1991. Barrow consumption is for CY 1990. In some cases averages over Tecent past years are used due to lack of quality data. 2Schools, health, and public safety are generally billed for electricity consumption. Power is provided directly to village water plants, washeterias, and street lights since they are run by the Department of Municipal Services. If a consumer payment was imputed for this consumption, the computed level of NSB subsidies to electricity production would fall. 3PCE payments have been temporarily discontinued pending resolution of a dispute over the NSB’s compliance with PCE regulations. 2-1 NORTH SLOPE BOROUGH ENERGY ASSESSMENT residential fuel bills. Barrow residents and businesses currently burn about 600 Million cubic feet (MMcf) of natural gas. This gas costs about $3.1 million to produce, including payments on gas field capital investments. Of this cost, consumers pay about $833 thousand. Interest income from a past federal grant covers $1.1 million, and the NSB contributes over $1.2 million in subsidies. TOTAL NORTH SLOPE BOROUGH ENERGY USE A complete energy use profile and balance for building energy consumption in the the North Slope Borough is presented in Figure 2.1. This profile shows the total amounts of primary fuel - - natural gas and diesel -- flowing in to the villages and Barrow, and the final disposition of that fuel. The 7 villages used 3.2 million gallons of primary diesel in FY91 at a total cost of over $7 million. Slightly less than half of this diesel -- about 1.5 million gallons -- was burned to generate about 13 million kilowatt-hours (or 13,000 Megawatt-hours or MWh) of useful electricity. The other 1.8 million gallons was burned directly for heat. About half of the energy was ultimately lost in the conversion process. In Barrow a total of 1.2 Billion cubic feet (or 1,200 MMcf) of natural gas provided the primary energy for electric generation and heating, at a total cost of just over $5 million. Slightly more than half the gas -- 618 MM¢cf -- was used to generate about 34,000 MWh of useful electricity. The rest -- about 600 MMcf -- was used for direct heating by residential, commercial, and government users, including NARL. More than half the primary gas energy was ultimately lost in the conversion process. FIGURE 2.1: North Slope Borough FY91 Energy Balance and Profile 7 Villages Elect Heat Total 7 Villages Energy Balance Energy Balance in Billion Btu: Energy Input 201 244 445 Disposition of Energy: Residential Use 12 74 86 Other Use 34 115 149 Conversion Loss 155 55 210 Detail of Energy Used Electricity 13,356 MWh Residential 3,507 MWh Other 9,849 MWh Direct Diesel Use 1,779 ,000 gal Residential 697 ,000 gal Other 1,082 {000 gal Barrow Elect Heat Total Barrow Energy Balance Energy Balance in Billion Btu: Energy Input 637 617 1,254 Disposition of Energy: Residential Use 20 121 141 Other Use 94 311 405 z Conversion Loss 522 185 707 3 2 Detail of Energy Used 2 Electricity 33,603 MWh Residential 5,976 MWh Other 27,627 MWh Direct Gas Use 599,170 MMcf Residential 167,862 MMcf ee use Other use (A Conv loss ERE Fuel Use Other perme rene NSBTotal _Elect Heat Total NSB Energy Balance Energy Balance in Billion Btu: Energy Input 837 861 1,698 el Disposition of Energy: 1600: | Residential Use 32 195 227 1400 Other Use 128 426 554 zt Conversion Loss 677 240 917 3 1 s ElectricityUse__—46,959 MWh 8 Direct Diesel Use 1,779 ,000 gal Diesel for Elect 1,466 ,000 gal Total Diesel Use 3,245,000 gal Direct Gas Use 599 MMcf Gas for Elect Gen 618 MMcf HMM Resuse [_] Other use (77) Conv loss [gj Fuel Used Total Gas Use 1,217 MMcf NORTH SLOPE BOROUGH ENERGY ASSESSMENT CURRENT ENERGY COSTS AND PRICES Many of the current consumer prices for energy in the NSB bear little relation to the total costs of production, storage, and distribution. We estimate the total cost of gas from the Barrow Gas Fields, including Walakpa development costs, to be $4.21/Mcf. BUECI buys gas for $.32/Mcf, less than one tenth the cost, and passes the subsidy through to its direct use customers and through the electricity generating process. Figure 2.2 shows the breakdown of costs and payments for gas distributed by BUECI for direct use. The total cost is $5.58/Mcf, of which $4.21 represents the full cost of producing gas and getting it to BUECI. Consumer payments average about $1.60, interest income from a past federal grant contributes about $1.90, and NSB subsidies, chiefly of gas field costs, cover the remaining $2.10. The total cost of home-delivered village diesel ranges from $2.36/gal in the coastal villages to $3.88/gal in Anaktuvuk Pass, where fuel must be flown in. Figure 2.3 shows the distribution of fuel cost and payments for home-delivered diesel in the coastal village of Wainright. The fuel itself costs only 66 cents at the refinery. Freight and management fees paid to Eskimos, Inc. add 57 cents so that the landed cost for bulk fuel is $1.24/gal. The costs of financing the once-yearly deliveries adds 3 cents/gal, and the cost of storage facilities and administration of the village fuel program adds another 30 cents. Finally, the local distribution charge levied by the local village corporation adds $1.40/gal to the total cost. Consumers pay a retail price of $1.40 for this fuel, and 11 cents of this, on average, is offset by federal energy assistance payments to assist needy individuals. The NSB pays the $1.24 landed cost of the fuel itself, plus the storage and village fuel program costs of 30 cents/gal. 2-4 FIGURE 2.2: COMPONENTS OF THE TOTAL COST OF GAS FROM BUECI otal Cost: $5.58/Mcf bee BUEC! Capital Te Ps Interest hoo from Fed. End Consumer Pisani Gas Field O&M Gas Field Capital Payments po a Costs Payments 2-5 lowment FIGURE 2.3: COMPONENTS OF THE TOTAL COST OF RESIDENTIAL FUEL IN WAINWRIGHT lage Fuel Program RMA .VDVWV\ ISB: Fuel Handling Storage and Finance Ii N ‘aS 2.5 Local Distribution f a LZ orrrror =) : $ per gallon an ; 2 COSTS PAYMENTS NORTH SLOPE BOROUGH ENERGY ASSESSMENT Figure 2.4 shows the components of the total cost of providing diesel-fired village electricity. Wainright is again used as the example. The total cost of electricity production is 60 cents/kWh. Fuel costs of 14 cents/kWh make up 22% of this total. Plant labor costs almost as much as fuel at 12 cents/kWh. Administrative overhead adds an additional 2 cents, and the 30 cents/kWh of payments for past capital outlays comprise the remaining 50% of total cost. Figure 2.4 shows how payments cover these total costs for the residential customer class. Consumers pay an average of 12 cents/kWh, the State of Alaska Power Cost Equalization Program (PCE) pays about 8 cents, and the Borough covers the remaining 40 cents/kWh. A complete analysis of the full costs of gas, diesel, and electricity, along with an accounting of who pays these costs, is provided in Appendix B of this report. The appendix reports costs for all 7 villages separately. ENERGY USE IN SUBSISTENCE CAMPS Appendix C of this report presents an analysis of in-camp use of energy by subsistence users. Currently, white gas and kerosene provide an estimated 80% of the total energy used in subsistence camps. Some users have had good success switching to lower-cost replacements, particularly unleaded gas as a substitute for white gas. Unleaded gas costs only 40% as much as white gas while delivering the same energy content. Switching to unleaded gas requires a new stove equipped to burn unleaded. Our analysis indicates that the investment in such a stove would pay for itself in a year or less for the average subsistence user consuming 25 gallons or more per year. Interest in using propane appears to be growing among whaling captains. Of the sample we interviewed, the crew with the lowest average fuel cost used propane and paid one sixth as much 2-7 FIGURE 2.4: COMPONENTS OF WAINWRIGHT ELECTRICITY COST Total Cost: 60 cents/kWh ) 1 i i Benen PAYMENTS 2-8 NORTH SLOPE BOROUGH ENERGY ASSESSMENT per person per day as the crew with the highest average cost, which used primarily white gas and kerosene. Although propane costs about the same per Btu as white gas, it apears to be a more inexpensive source of delivered heat, based on the data we collected. This could be because of its ease of use which allows a person to more easily control the temperature for heating and cooking. In any event, most people who used propane were enthusiastic about its convenience, although it is not a feasible fuel for true cold-weather use. PROJECTIONS OF FUTURE DEMAND Electricity and heat load forecasts were prepared for all 7 villages in the NSB as a foundation for our assessment of alternative supply options and energy efficiency options. The load forecasting process began with an economic and population forecast which is presented in detail in Appendix A. The economic model produced a low, mid, and hi population forecast for each village and Barrow. We then established current load balances for each village. This process involved correction of individual meter reading reports and allocation of unmetered electric use to major NSB facilities such as water plants. With the load allocated among user groups, we used the population forecast to develop low, middle and high load forecasts for each user group: residential, commercial, and other. Assumptions favoring low growth and assumptions favoring high growth were each combined to produce a reasonably wide range of forecasts. The resulting village load forecasts are summarized in Table 2.1 and Figure 2.5. for the 7 villages combined. Overall electric demand is projected to grow at an annual rate of between .6 and 2.3% during the study period of 1995 through 2014. Baseboard heat demand is expected to grow more slowly, at between .3 and 1.5%/yr, since the existing stock of large Borough facilities (such as USDW buildings) in the villages is unlikely to grow substantially even if population increases. Total diesel use (for both electric generation and heating) is projected to grow at an intermediate rate of between .4 and 1.9%/yr, reflecting the fact that roughly 40% of the diesel is used to satisfy electricity demand. 2-9 TABLE 2.1: LOAD FORECAST FOR COMBINED NORTH SLOPE VILLAGES Avg 7 VIL 1990 1995 2000 2005 2010 2014 Growth Households Low 605 627 630 658 697 733 0.8% Mid 605 634 660 712 778 837 1.4% High 605 642 695 774 885 976 2.0% Net Electric Generation (MWh) Low 14,085 14,406 14,262 14,725 15,455 16,127 0.6% Mid 14,085 14,822 15,512 16,751 18,298 19,713 1.4% High 14,085 15,255 16,772 18,879 21,700 24,114 2.3% Peak Electric Load for LF=.55 (MW) Low 3.2 3.3 3.2 3.3 3.5 3.7 0.6% Mid 3.2 3.4 3.5 3.8 4.2 4.5 1.4% High 3.2 3.5 3.8 4.3 4.9 5.5 2.3% Baseboard Heat Demand (MMBtu) Low 188,962 190,343 185,949 189,434 196,130 202,412 0.3% Mid 188,962 193,922 198,175 209,002 222,953 235,696 0.9% High 188,962 197,295 209,329 227,459 252,432 272,695 1.5% Projected Diesel Use (,000 gal) Low 3,245 3,236 3,176 3,258 3,404 3,540 0.4% Mid 3,245 3,315 3,430 3,673 3,980 4,259 1.1% High 3,245 3,396 3,677 4,087 4,642 5,107 1.9% Projected Avoidable Diesel Cost (,000 $1991) Low 5,651 5,594 5,530 5,717 6,014 6,290 0.4% Mid 5,651 6,139 6535 7,241 8,110 8,910 1.9% High = 5,651 6,703 7,604 8943 10,719 12,283 3.3% 2-10 ISER/ASCG LOAD_SUM.WQ1 ISER/ASCG FIGURE 2.5: VILLAGES LOAD FORECAST SUMMARY Net Electric Generation 1990 1995 2000 2005 2010 2014 pee Heat I —— on 1995 2000 2005 2010 2014 Diesel Fuel Use Excluding Transportation 6000: 5000: 4 3 3 3000: 1990 1995 2000 2005 2010 2014 —= Low —— Mid —< High 2-11 VIL LOAD_SUM.WQ1 NORTH SLOPE BOROUGH ENERGY ASSESSMENT Table 2.2 and Figure 2.6 present load forecast results for Barrow. We project electricity generation to grow at between 1 and 3%/yr, while baseboard heat demand grows more slowly. This slower growth in heat demand is due in part to the projected construction of more efficient housing built to the required State of Alaska thermal standards. We also project natural gas use for power generation to grow far more slowly than generation itself. This is because of the projected addition of efficient natural gas engines to the Barrow generation mix. These engines have design heat rates of 10,000 Btu/kWh, significantly lower than the 14,500 Btu/kWh design heat rates of the current gas turbines. Because of this improving generation efficiency, we project overall use of natural gas to grow at the slower rate of heating demand: between .3 and 2.3%/yr. 2-12 TABLE 2.2: BARROW LOAD FORECAST Avg BRW 1990 1995 2000 2005 2010 2014 Growth Households Low 1,059 1,013 995 1,034 1,091 1,137 0.3% Mid 1,059 999 1,007 1,079 1,169 1,254 0.7% High 1,059 987 1,026 1,143 1,342 1,491 1.4% Net Electric Generation (MWh) Low 35,491 42,773 42,555 43,596 45,153 46,386 1.1% Mid 35,854 44,298 45,982 50,162 55,123 59,742 2.2% High 36,216 45,933 49,708 57,871 69,405 79,519 3.3% Peak Electric Load for LF=.63 (MW) Low 6.51 7.85 7.81 8.00 8.28 8.51 1.1% Mid 6.58 8.13 8.44 9.20 10.11 10.96 2.2% High 6.64 8.43 9.12 10.62 12.73 14.59 3.3% Baseboard Heat Demand (MMBtu) Low 352,692 333,954 326,720 342,365 364,034 380,139 0.3% Mid 352,692 343,779 358,545 396,351 439,718 481,289 1.3% High 352,692 354,799 392,550 457,706 554,755 637,995 2.5% Gas Use for BUECI Electricity (MMcf) Low 626 533 530 546 571 590 -0.2% Mid 633 557 584 650 657 665 0.2% High 639 583 643 637 755 830 1.1% Gas Use for Heat (incl. NARL/POW) (MMcf) Low 599 573 563 585 615 637 0.3% Mid 599 590 613 668 731 792 1.2% High 599 608 666 763 904 1,026 2.3% Cumulative Gas Use from 1/1/93 (MMcf) Low 3,319 8,775 14,349 20,163 25,023 Mid 3,440 9,289 15,634 22,283 27,974 High 3,572 9,844 16,618 24,379 31,464 2-13 ISER/ASCG LOAD_SUM.WQ1 ISER/ASCG FIGURE 2.6: BARROW LOAD FORECAST SUMMARY Net Electric Generation eo ee 1990 1995 2000 2005 2010 2014 —= Low —-— Mid —<— High Baseboard Heat Demand 700: 600: 500 z ic = = 300: 200: 100: 0" 590 1895 200020052010 2014 Natural Gas Use Heat and Electricity 2000: 1600 1200 3 = = 800: 400: 1990 1995 2000 2005 2010 2014 2-14 LOAD_SUM.WQ1 NORTH SLOPE BOROUGH ENERGY ASSESSMENT DISTRIBUTION OF FUTURE ENERGY COSTS AMONG USER GROUPS The primary purpose of this study is to assess specific energy supply options for reducing diesel use in the villages of Atqasuk (ATQ), Nuiqsut (NQT), Wainwright (AIN), Point Lay (PIZ), and Point Hope (PHO). In order to provide some context for the importance of this task, we end this section with a presentation of the projected future allocation of avoidable base case diesel system costs in the study area. Figure 2.7, with an accompanying table, shows the projected allocation of potentially avoidable diesel costs in 1995 among residential users, other users, the State of Alaska PCE program, and the NSB. As discussed in section 5, we focus on the avoidable costs of diesel because these are the dollars that can potentially be saved by the alternatives considered in this report. The total potentially avoidable costs of diesel and electricity are projected to be about $7.1 million per year at the start of the study period in 1995. Of this total cost, $4.2 million is electricity cost, while $2.9 million is direct heating cost. Overall, residential users bear an 11% share of total cost while other users, including NSB departments and schools, bear about 45% of the cost burden. The State of Alaska has a 4% stake through the PCE program, and the NSB general government pays 39% of the total bill -- over $2.8 million -- through the various subsidies analyzed in Appendix B. Clearly, Figure 2.7 shows that every group is burdened by the high cost of the current diesel system. For example, the residential class burden in Wainwright is estimated to be $231,000/yr. This amount is only spread over 140 households, however, resulting in a per-household cost burden of $1,650 per year! Because these numbers only reflect avoidable costs, the total burden is much greater than that shown here, particularly for the NSB, which is paying for large amounts of past capital investment. But just as these numbers show the current cost burden, they also show the large potential economic gains which could be enjoyed should cheaper alternative energy sources become available. 2-15 FIGURE 2.7: Distribution of 1995 Energy Costs Under Current System for AIN, ATQ, NQT, PHO, PIZ. (Mid Load, Mid Diesel price) Millions of 1991 Dollars Resident [=] Other Total Electricity [_] AK PCE (Bg NSB Estimated Distribution of 1995 Diesel System Costs (Thousands of 1991 $ Mid Load, Mid Diesel Price Group Making Payments AIN ATQ NQT PHO Residential Users 145 74 71 140 Other Users 403 228 332 305 State AK PCE 0 0 0 0 NSB Subsidy 274 216 148 261 Avoidable Heating Cost 822 518 551 706 Residential Users 86 59 58 120 Other Users 487 329 295 417 State AK PCE 81 45 44 78 NSB Subsid 295 427 351 360 Avoidable Electric Cost 949 860 748 975 Residential Users 231 133 129 260 Other Users 890 557 627 722 State AK PCE 81 45 44 78 NSB Subsidy 569 643 499 621 Avoidable Energy Cost aval 1,378 1,299 1,681 Notes: (1) Costs do not include embedded (sunk) capital costs. (2) Costs do include fixed village power plant labor. 2-16 PIZ Total % 37 467 16% 237 1,505 51% 0 0 0% 72 971 33% 346 2,943 100% 24 347 8% 197 1,725 41% 27 275 7% 403 1,836 44% 652 4,184 100% 62 815 11% 434 3,230 45% 27 275 4% 475 2,807 39% 998 7,127 100% SECTION 3 Energy Efficiency Programs NORTH SLOPE BOROUGH ENERGY ASSESSMENT ENERGY EFFICIENCY PROGRAMS Introduction As part of this energy assessment for the North Slope Borough, opportunities for improving the efficiency of energy use were evaluated. This efficiency analysis is limited to ways of reducing energy use within buildings, such as improving insulation levels and changing to lighting systems that use less energy without sacrificing lighting quality. Methods of improving the efficiency of electrical generation systems and energy delivery systems are not addressed in this section. An economic evaluation was performed for each of the energy efficiency alternatives addressed. We assumed that the efficiency improvements would be implemented through programs administered by the North Slope Borough. Efficiency improvements that will be undertaken by building owners on their own accord ("market-driven"” improvements) and efficiency improvements that are already being implemented by other programs (such as the RELI Window Installation program and the State Building Energy Efficiency Standard) were not analyzed. Only efficiency improvements that differ from these existing efforts were addressed. We estimated the costs of implementing each type of efficiency improvement, including design and program administration costs (all costs in this chapter are constant 1991 $). It was assumed that the North Slope Borough government would pay for all of the costs to implement the efficiency programs; i.e. the building owners would not pay for any of the improvement costs. Cost-sharing with building owners would reduce the costs to the Borough government but would also decrease the degree of participation in these programs. The various benefits from each efficiency program were also identified and projected over the life of the improvements made. These benefits include reduced electricity use, reduced space 3-1 NORTH SLOPE BOROUGH ENERGY ASSESSMENT heating and domestic hot water fuel use, and reduced operation and maintenance costs. The sum of these benefits, adjusting for the time-value of money, were compared against the cost of the improvements to determine whether the programs are expected to produce net economic benefits. This analysis does not attempt to address any of the environmental or local job benefits that accrue from the installation of efficiency measures. The benefits from reducing the use of energy in buildings are directly related to the cost of producing and delivering energy to the building. For the purposes of calculating benefits, we assume that Barrow will continue to rely on natural gas to supply the bulk of its electrical generation and building fuel requirements. For calculating the benefits of efficiency improvements implemented in the villages of the North Slope Borough, we assume that fuel/diesel oil will be the primary energy source for electrical generation and building fuel use. If less expensive energy supply alternatives for the villages are identified and developed, the economic benefits of improving energy efficiency will be reduced, and the results presented in this section will no longer be valid. In particular, if large quantities of natural gas are found and developed as an energy source for some of the NSB villages, many of the efficiency improvements analyzed here may be rendered uneconomic in those villages.! In calculating the benefits from reducing energy use, we only accounted for costs within the North Slope Borough that are truly avoided by reduced energy use. For example, when a homeowner reduces their use of electricity, the salary of the general manager of the electric utility company is typically not reduced. The salary is "fixed" cost and is not reduced or avoided by a decrease in electricity use. Costs that are reduced when electricity use declines are generation fuel costs, some types of operation and maintenance costs, and the cost of 'This is primarily because the development and operation costs of the natural gas system for a small village are predominantly fixed and not strongly related to the amount of natural gas supplied by the system. Efficiency improvements that reduce gas demand do not result in substantial savings in natural gas development or operation costs. Efficiency improvements can significantly lengthen natural gas field life, and thus are important if relatively small quantities of gas are initially developed. Si=2 NORTH SLOPE BOROUGH ENERGY ASSESSMENT electrical generation equipment. It is these costs that are accounted for in this analysis. Finally, this is a broad planning-level analysis that was based on a limited number of interviews and on-site inspections of North Slope buildings. The analysis is useful for roughly prioritizing efficiency-improving activities, but further data concerning these opportunities should be acquired before committing substantial funds towards their implementation. Summary of Results Table 3-1 summarizes the results of the economic analysis of the efficiency programs. The efficiency programs are split into two separate groups: those that apply to the villages and those that apply to Barrow. Separate programs were considered for these two different areas because the avoidable energy costs are very different in the two areas. The village energy supply systems are based on expensive oil, so aggressive and immediate efficiency programs can be economically justified. For Barrow, the energy supply system is based on much less expensive natural gas. Less aggressive efficiency programs were analyzed for Barrow. As shown in Table 3-1, each efficiency program is assigned code and a name. These efficiency programs are described in more detail in a subsequent section of this chapter. The table also indicates what type of building the efficiency program is applied to. Possible choices are "Resid" meaning residential housing, and "Non-Res" meaning all buildings other than residential housing. The "Total Cost" figure indicates the cost of installing the efficiency measures for the region indicated (villages or Barrow), including design and program administration costs. Some programs are targeted at new construction or upgrading equipment when it normally wears out (as opposed to programs that immediately retrofit buildings). These programs are assumed to NORTH SLOPE BOROUGH ENERGY ASSESSMENT Table 3-1: Summary of Efficiency Program Economic Analysis oe ol Building —s‘ Total Cost _ Benefit Code — Efficiency Program: Type. 1991 $, mil. Cost Ratio — For the Villages: VO1 Showerhead Giveaway Resid $0.01 15.41 VO2_~—Effic. New Non-Res Bidgs Non-Res $0.19 4.62 VO3 __—~Replace Drip-Pot Burners Resid $0.29 3.14 V0O4 ~=—s Ventilation Air Control Non-Res $0.69 2.39 VO5 ~_=—Tune Heating Systems Resid $0.26 2.01 VO6_—_s Efficient New Housing Resid $0.19 1.86 VO7 Compact Fluor. Giveaway Resid $0.11 1.78 V0O8_— Ceiling/Floor Insulation Resid $2.02 1.68 VO9_ ~=—Non-Res Lighting Retrofits Non-Res $1.03 1.67 V10_—_—sImprove Heating Efficiency Non-Res $1.77 1.52 _ *** Village Totals *** $657. 1.90" For Barrow: BO1 Showerhead Giveaway Resid $0.02 7.30 BO2 ~~ Effic. New Non-Res Bidgs Non-Res $0.05 1.95 BO3 = Non-Res Lighting Upgrades Non-Res $0.21 1.21 BO4 Compact Fluor. Giveaway Resid $0.18 0.85 BO5_—s Efffic. Free-Standing Htrs. Resid $0.19 0.42 *** Barrow Totals *** : $0.65. 1.09. be active over a 10 year period, and the costs shown are the present value” sum of costs over that period. The "Benefit to Cost Ratio" measures how cost-effective each efficiency program is. The benefit to cost ratio is calculated by dividing the total present value benefits of the program by 2A “present value” sum accounts for the time-value of money by weighting future costs less heavily than costs in the present when calculating the sum of costs. Sad NORTH SLOPE BOROUGH ENERGY ASSESSMENT the total present value costs. A benefit to cost ratio greater than 1.0 indicates that the benefits of the program exceed the costs, and the program is economically justified. For the example, program V0S, "Tune Heating Systems", has a benefit to cost ratio of 2.01. The ratio means that for every $1 of program cost, $2.01 of benefits are produced over the life of the efficiency improvements. The results of the analysis are also presented graphically in Figure 3-1. For each program, two bars are presented on the graph. The solid bar indicates the benefits of the program, and the cross-hatched bar indicates the costs. When the length of the benefit bar exceeds the length of the cost bar, the program is economically justified. The benefit to cost ratios presented in the Table 3-2: Benefit to Cost Ratios vs. Fuel prior table and graphs are calculated based on Costs. the Mid fuel cost forecast. Benefit to cost Fuel Cast Scenario — ratios for the Low fuel cost forecast are _ ProgramGroup Low Mid — High lower, since the energy savings from the effi- 10 Village Programs 1.72 1.90 2.08 ciency programs are less valuable in that _5 Barrow Programs 0.47 1.09 1.72 scenario. Similarly, higher benefit to cost ra- tios are achieved in the High fuel cost scenario. The results of the efficiency program analysis for these different fuel cost scenarios are presented in Appendix D, along with more detailed output and assumptions for all fuel cost scenarios. Table 3-2 summarizes how the overall benefit to cost ratio of the programs varies with different fuel cost scenarios, but does not present the results for individual programs. The following conclusions can be drawn from the above information: e All of the efficiency programs analyzed for the villages were found to be cost-effective. These programs reduce the amount of energy used in buildings, while maintaining the service provided by the energy. Examples include a program to install additional ceiling and floor insulation in residential housing, and a program to install more energy-efficient lighting systems in non-residential buildings. The program costs total about $6.6 million 3:9) NORTH SLOPE BOROUGH ENERGY ASSESSMENT Figure 3-1: Benefits and Costs of Efficiency Programs Showerhead Giveaway Effic. New Non-Res Replace Pot Burners Vent. Air Control Tune Heating Systems For the Villages Effic. New Housing Compact Fluorescents Ceiling/Floor Insul. Non-Res Lighting Improve Htg. Effic. Showerhead Giveaway Effic. New Non-Res For Barrow Non-Res Lighting Upg Compact Fluorescents Effic. Gas Space Htr , : 1 , $0.0 $1.0 $2.0 $3.0 $4.0 millions of 1991 $ WM Benefits Costs and are expected to return approximately $12.5 million of benefits over their life in the Mid fuel cost scenario. The high cost of oil in the villages and the cold climate are the primary reasons why the programs are so cost-effective. The measures should reduce 3-6 NORTH SLOPE BOROUGH ENERGY ASSESSMENT total fuel use for buildings in the villages by about 17% and reduce village electric use by about 11%. Because of the very long expected life of the gas fields currently serving Barrow’s energy needs and the fixed costs of extracting gas from those fields, very little efficiency investment was found to be cost-effective in Barrow. . Three small programs totalling about $0.3 million in cost are expected to return about $0.5 million of benefits in the Mid fuel cost scenario. As the Barrow gas field nears depletion, the justification for efficiency improvements increases. For a more detailed discussion of the proper timing of gas-saving investments in Barrow, see Appendix G. Recommendations for Further Effort If the North Slope Borough chooses to pursue some or all of these energy efficiency opportunities, we make the following recommendations to assist this process: Hire an Energy Manager. A comprehensive effort to improve the energy efficiency of the North Slope Borough will require a person specifically assigned that responsibility. Included in the above cost estimate is approximately $2 million for design and program administration. Some of this funding could be used to support an energy manager position for a few years until the major retrofit energy efficiency efforts are completed. The energy manager would have the responsibility of designing, coordinating implemen- tation, and evaluating the efficiency programs. Existing entities such as CIP/RELI, Municipal Services, the School District, and the Housing Authority would actually implement the programs. The energy manager would add specific energy expertise to the already substantial implementation expertise provided by the various entities involved with buildings in the North Slope Borough. Implement Programs V05, V01, and V07 First as a Means of Saving Energy and Acquiring Additional Information about the North Slope Building Stock. These three programs--"Tune Heating Systems", "Showerhead Giveaway", and "Compact Fluorescent Giveaway"--are cost-effective and relatively easily implemented. They also provide an opportunity to visit most of the residential housing stock in the villages and collect data that will assist in the implementation of other efficiency programs. For example, those homes using drip-pot oil burners can be identified, a retrofit target for program VO3. The potential for adding ceiling or floor insulation can also be assessed. In general, a database of the characteristics of the North Slope Borough housing stock can be created 3-7 NORTH SLOPE BOROUGH ENERGY ASSESSMENT during the implementation of these first three programs. The efficiency measures installed by these three programs will probably pay back their cost before any natural gas development is in place for the villages. e Begin Implementation of the Other Efficiency Programs in A Village having Little Potential for Natural Gas Development. The other efficiency programs are longer- lived and would be rendered uneconomic if large quantities of natural gas were found and developed for certain villages. Begin implementing these programs in villages that are least likely to have economically recoverable gas reserves. Also, establish a program to monitor the energy savings from these initial efforts to ensure that they are performing as expected. Some relatively low-cost techniques are available for monitoring energy savings, and it is critical that the performance of a sample of efficiency improvements is verified. Proceed with implementation in other villages after the savings from efficiency improvements have been verified, and alternative supply options have been Tuled out. Descriptions of Energy Efficiency Programs Descriptions of the energy efficiency programs are provided below, grouped by those applicable to the villages and those applicable to Barrow. Within each group, programs are listed in order of cost-effectiveness. Costs and savings per housing unit for residential programs and per square foot for non-residential programs are provided in Appendix D. Programs for the Villages V01 - Showerhead Giveaway: This program involves installation of an energy-saver showerhead in those homes with showers that currently do not utilize such a unit. Standard showerheads deliver about 3.5 gallons per minute of water. Energy-saver models provide 2.5 gallons per minute or less. Substituting such models is very cost-effective not only because of the energy saved in heating less water but also because of reduced water consumption (in Appendix D, this benefit is listed as an operation and maintenance benefit and assumes the avoidable cost of water is 1 cent/gallon). Unlike most of the inexpensive energy-saver showerheads on the market, the better products produce a satisfying shower. 3-8 NORTH SLOPE BOROUGH ENERGY ASSESSMENT This program is most effectively implemented in conjunction with program V05, "Tune Heating Systems", because most houses will be visited in program VOS5. Installation of the showerhead unit can be piggybacked on the more substantial heating system work. V02 - Efficient New Non-Residential Buildings: This program would improve the energy efficiency of future non-residential buildings built in the Borough. For buildings built by the North Slope Borough, building designers should be directed to commit more attention to the energy-efficiency aspects of their design. Designers should be required to perform "life-cycle cost" analyses that determine what level of energy efficient design minimizes the cost of owning and operating the building. Because of this extra attention to energy efficiency, funds for building design will need a modest increase. For buildings not built by the North Slope Borough, rebates could be made available for the inclusion of energy efficient features in the building design. Non-residential buildings in the North Slope Borough do not appear to be designed with high energy costs in mind. For example, the average electricity use of North Slope Borough schools is about 10.4 kilowatt-hours per square foot of floor area. This use differs little from what schools in Anchorage use, despite electricity being 5 times more expensive in the North Slope Borough villages. 45% reductions in the electricity use figure are possible and cost-effective in future buildings through better design of lighting systems and air-handling systems. North Slope Borough schools use about 1.1 gallons of fuel oil per square foot of floor area to heat spaces and domestic water. By more closely controlling the amount of fresh ventilation air brought into the building and improving building shell insulation values to Alaska Building Energy Efficiency Standard levels, fuel use of less than 0.6 gallons per square foot is possible and cost-effective in future buildings. It is critical to design energy efficiency into new buildings. Retrofitting efficiency measures 3-9 NORTH SLOPE BOROUGH ENERGY ASSESSMENT after a building is built is at least twice as expensive as installing the measures in the first place. V03 - Replace Drip-Pot Oil Burners: Although drip-pot oil burners are inexpensive and require no electric power for operation, they are very inefficient, often only delivering half of the fuel as useful heat. We estimate that 24% of the village homes use these heaters as their primary space heat source. There are two Japanese-made vented oil space heaters sold in Alaska, Monitor and Toyostove, that achieve efficiencies of about 83% and are very effective replacements for drip-pot burners.> These heaters use one double-walled pipe to exhaust combustion products and bring in combustion air through the wall behind the heater. This program would replace oil drip-pot burners with Monitor or Toyostove-type heaters. V04 - Ventilation Air Control: Many non-residential buildings such as schools have air- handling systems that distribute fresh outside air throughout the building to improve indoor air quality (the systems also recirculate air within the building). Heating the outside ventilation air to room temperature requires a substantial amount of fuel, often half or more of the building’s total heating needs. This program would involve adjustments to air-handling systems, the installation of control systems, and/or major modifications to air-handling systems in order that the amount of outside air introduced into the building more closely follows the fresh air needs of the occupants. Because the North Slope schools have computer-controlled air-handling systems (the Johnson Controls Metasys systems), some efficiency improvements may be relatively easy. One technique used by some Anchorage schools is to enter into the computer an hour-by-hour schedule of the number people in the building. The amount of fresh outside air introduced can then be controlled from this occupancy schedule. 3The author, Alan Mitchell, is on the board of directors of Rural Energy Enterprises, the company that distributes the Toyostove heater in Alaska. The stipend received for board service is fixed ($100 per meeting) and unrelated to the profits of the company. 3-10 NORTH SLOPE BOROUGH ENERGY ASSESSMENT Other more substantial changes that will reduce the heating requirements of outside air include modification of air-handling systems to variable-air-volume (VAV) systems. VAV systems vary the amount of air flow to different parts of the building depending on needs. Relative to systems that deliver a constant amount of air to all parts of the building, VAV systems can more effectively regulate the amount of outside air introduced. V05 - Tune Heating Systems: This program would clean and tune residential oil-fired heating systems in the villages. We assumed that this program would decrease fuel use for gun-type heating systems by 4%; however the program would still be cost-effective if only a2% reduction were achieved. This program could also be the delivery mechanism for programs VO1 and V07, two other residential programs that have applicability to a large number of housing units. The tune-up program could also be used to gather information for a database of characteristics of the North Slope housing stock. The database would be very useful for implementing other energy efficiency measures. V06 - Efficient New Housing: The recently adopted Alaska State Building Energy Efficiency Standard (BEES) requires that North Slope residences built with state financing or state involvement have increased levels of insulation and air tightness. The prescriptive method of complying with the standard requires R-52 ceilings, R-35 walls, R-43 floors, and R-3.0 windows (the R-value measures how well the insulation works). These insulation values result in a very thermally-efficient building shell. We assume that all new housing in the villages will at a minimum be built to this standard. The efficiency program addressed here is one that encourages going beyond the State standard in certain areas. In particular, the program addresses improving the air-tightness of the building to 1.5 air changes per hour at 50 pascals of pressure, installing a heat recovery ventilation system for bringing in fresh outside air, using a heating system with an 85% seasonal efficiency, increasing window R-values to R-5.0*, and 4An overall R-value of R-5.0 can be achieved by utilizing the new Heat Mirror Plus glazing in the vinyl windows manufactured by UIC in Barrow. 311 NorTH SLOPE BOROUGH ENERGY ASSESSMENT utilizing energy efficient lights and appliances. The techniques used to achieve this level of efficiency are taught by the Alaska Craftsman Home Program, a state-funded program that trains builders to construct energy-efficient homes. We estimate that these improvements would add $4,200 to the cost of constructing a 1,000 square foot house (relative to a house that just meets the state BEES standard). V07 - Compact Fluorescent Giveaway: This program would giveaway 3 compact fluorescent lamps to each village household. Compact fluorescent lamps are very small fluorescent lamps that can screw into normal light sockets to replace standard incandescent light bulbs. A typical unit uses one-fourth to one-third as much electricity as the ! incandescent bulb it replaces and lasts about 10 times as long. The figure to the right shows two styles of compact fluorescent lamps. V08 - Ceiling/Floor Insulation: This program would increase floor and ceiling insulation values in homes with attics and homes with floor joists that are not completely filled with insulation. For attics, insulation values would be increased to approximately R-60, which is economically justifiable given the North Slope climate and the village costs of heating oil. For floors, insulation would be blown in through holes in the band joist to fill the floor joist cavity. The Bering Straits Regional Housing Authority is performing this type of floor insulation retrofit on 150 of their housing units this summer. As well as adding insulation to the floor, this retrofit should reduce air leakage into the floor joist cavities. V09 - Non-Residential Lighting Retrofits: This program would improve the efficiency of non- residential lighting systems through the following techniques: © More efficient light sources. The installation of electronic ballasts (the device that starts and provides the correct operating conditions for fluorescent lamps) and energy-saver fluorescent lamps can reduce electric power usage 30-40% relative to standard fluorescent lamps and ballasts. Compact fluorescent lamps use 70% less energy than the standard incandescent lamps they replace. There is substantial retrofit potential for both 3-12 NORTH SLOPE BOROUGH ENERGY ASSESSMENT of these technologies in the NSB villages. More accurate lighting level design. Many spaces are provided with more light than is needed to competently perform tasks. We found many areas in the Wainwright High School and Elementary school that had more than twice as much light as minimum suggested levels. Converting 4-lamp fluorescent fixtures to 3 lamps by replacing the two 2-lamp magnetic ballasts with one 3-lamp electronic ballast can bring light levels down to more reasonable levels and improve the efficiency of the light source at the same time. Better lighting controls. Occupancy sensors are available that automatically turn off lights when people leave a room. These sensors either replace a standard light switch, or they can mounted on the ceiling and wired to the light fixture with low-voltage wire. They have been shown to reduce lighting use by more than 20% in many instances. Also, better switching strategies can save energy. For example, in the Wainwright High School, the classroom hallway lights are on the same switch as the main entry lobby lights. Because of gymnasium use, the lobby lights must stay on long hours, which forces the hallway lights to also stay on. Separate switches would save substantial energy. Improve optical efficiency of light fixtures. Some light fixtures are designed more for aesthetics than for energy efficiency. For example, a fixture using a milky-white lens (the plastic sheet that protects the lamps) puts out about 40% less light than a fixture with a clear lens. Changing the lens can allow for a reduction in the number of lamps used while still maintaining light levels. Another technique is to add mirrored reflectors to light fixtures to increase the amount of light leaving the fixture. Sometimes the improvement is enough to allow the removal of some of the lamps in the fixture (however, the improvement is usually less than claimed by the vendors of such products). The program would implement these changes on an immediate retrofit basis; i.e. functioning lighting systems would be retired early for replacement by more efficient systems. V10 - Improve Heating Efficiency: This program would be patterned after a heating system improvement program that was completed by the NSB Fire Department. Oil burners were changed to more efficient models, flue pipes were improved and made less sensitive to winds, and fan motors and controls were made more efficient. There were substantial health/safety benefits and maintenance benefits in addition to the energy savings realized (about 30% energy savings). The non-energy benefits are difficult to quantify, so our economic analysis of this program is highly uncertain. 3-13 NORTH SLOPE BOROUGH ENERGY ASSESSMENT Programs for Barrow B01 - Showerhead Giveaway: See program VO1. Because no heating system tune-up program is proposed for Barrow, the showerheads could be mailed out to residents of Barrow. Even if a substantial fraction of the showerheads are not installed, this program will still be cost- effective. B02 - Efficient New Non-Residential Buildings: See program V02, however, the Barrow program would nor include increased building shell insulation. Because heating fuel is so inexpensive in Barrow, increased insulation values are not economically justified there. B03 - Non-Residential Lighting Upgrades: This program is similar to program V09, except that the efficiency improvements should only be applied at the normal time of replacement for a lighting system or lighting component. The cost of efficiency improvement is least expensive at that time, because some level of replacement cost will be incurred even if the efficiency of the system is not improved. Efficiency improvement only adds somewhat to that replacement cost. This incremental approach to efficiency improvement is necessary in Barrow because of the relatively low electricity costs. Because the program is not a retrofit program, normal methods for replacing lighting equipment will be relied on for implementation of the efficiency measures. Rebates for use of efficient equipment could be offered as a means of altering the decisions made during these normal replacements of lighting equipment. Unlike the village program, the Barrow program should not encourage the widespread use of occupancy sensors, as they will only be cost-effective in a few situations because of low electricity costs. B04 - Compact Fluorescent Giveaway: (not found to be cost-effective with Mid Case fuel costs). See program V07. Because no heating system tune-up program is being proposed for 3-14 NORTH SLOPE BOROUGH ENERGY ASSESSMENT Barrow, the compact fluorescent lamps could be mailed out to residents of Barrow. B05 - Efficient Free-Standing Heaters: (not found to be cost-effective with Mid Case fuel costs). Approximately 40% of Barrow homes use free-standing, inefficient gas heaters for home heating. At least one high-efficiency (80% +) free-standing gas heater is available in the U.S. to replace such heating systems, a unit manufactured by Rinnai of Japan.’ This program would encourage the replacement of inefficient free-standing gas heaters with more efficient units at the normal replacement time for the inefficient unit (immediate retrofit is not meant to be encouraged by this program). Rebates could be offered to encourage such replacement. ‘The author, Alan Mitchell, is on the board of directors of Rural Energy Enterprises, a company which intends to sell the Rinnai heater in Alaska along with other firms. The stipend received for board service is fixed ($100 per meeting) and unrelated to the profits of the company. 3-15 SECTION 4 Summary of Alternative Energy Scenarios NORTH SLOPE BOROUGH ENERGY ASSESSMENT SECTION 4 SUMMARY OF ALTERNATIVE ENERGY SCENARIOS The current method, defined as the "Base Case," for delivering energy to the North Slope Borough villages of Atqasuk, Nuiqsut, Wainwright, Point Lay and Point Hope is by annual deliveries of diesel fuel which is used for both electric generation and building space heating. The alternative energy scenarios described in this section are an economic comparison of other energy sources which could be available to these villages including: Gas pipelines from existing sources. Local gas wells. Local coal fired electrical generation and district heating. ey Centralized electrical generation with a transmission system between villages. These basic concepts of providing energy sources to individual communities were evaluated in detail with consideration given to the energy demand and potential fuel sources for each village as well as the regional needs and resources of the area. This evaluation resulted in nineteen specific scenarios to meet the forecasted energy needs. The following summaries provide: 1) a definition of each alternative case scenario, 2) the capital cost estimate for facilities and infrastructure development and 3) annual non-fuel incremental operating costs relative to the diesel fuel "Base Case", and 4) the present value (PV) cost of building and operating these facilities over a thirty-five year period in comparison to the existing diesel fuel "Base Case" (data from Table 5.2). A positive PV cost indicates this scenario is more economical than the diesel fuel "Base Case" and a negative value (_) indicates the scenario is less economical than the diesel fuel "Base Case". A PV of zero indicates a break-even case where the scenario is equivalent to operating the "Base Case" diesel system. 4-1 NORTH SLOPE BOROUGH ENERGY ASSESSMENT Where possible, data was obtained from previous reports or data sources which are referenced in Section 7. Capital cost estimates and annual non-fuel incremental operating cost summaries, including operating staff requirements, are provided in Appendix E. Case numbers (3-5) are used to identify the individual scenarios. The first digit is a sequence number for the case and the second digit represents the task designation from the North Slope Borough Scope of Work document. For cases involving mining of coal from the Deadfall Syncline, the mine development costs were excluded from the present value analysis for several reasons. These include: 1) mine costs may be borne by other projects or distributed across multiple cases, 2) all coal cases have a negative PV which becomes more negative when mine costs are included. Case 1-4 ATQ_ Gas Pipeline from Walakpa Gas Field to Atqasuk This scenario provides for a 40 mile cross country pipeline from the manifold building at the Walakpa Field to Atqasuk with gas regulation and treating facilities in the vicinity of the Atqasuk generating plant. One 3512 diesel generator would be converted to natural gas operation to provide a base load capacity of 550 KW. The other diesel generators would be maintained for peaking and back-up purposes. A natural gas distribution system would be installed in Atqasuk and residential heating systems would be converted to natural gas and larger public/commercial heating systems would be converted to dual fuel (gas and diesel) for back-up purposes. Capital Cost: $28,120,000 Annual Non-Fuel Incr. Op. Costs: $30,000 PV Costs: ($6,473,000) to ($14,060,000) 4-2 NORTH SLOPE BOROUGH ENERGY ASSESSMENT 2-4 ATQ Drill Wel A This scenario provides for gas wells to be drilled in proximity to Atqasuk for the primary energy source to the community. Due to the uncertainty of how many gas wells will be drilled and how close they may be drilled to the village, a range of costs were estimated on the basis of either two wells located within two miles of the village or four wells located within ten miles of the village. After seismic testing is completed a more precise cost estimate of development costs can be prepared. Gas regulating and treatment facilities would be located in the vicinity of the Atgqasuk generating plant. Similar to the previous Case 1-4 ATQ, generator conversion, gas distribution and heating system conversions would be installed. Capital Cost: $3,920,000 to $18,720,000 Annual Non-Fuel Incr. Op. Costs: $45,000 PV Costs: $17,482,000 to ($4,905,000) Cc -5 ATO Coal Fi ogeneration at Atqasuk This scenario provides for a 1.0 MW base load coal fired generating plant located in the vicinity of the existing Atqasuk generating plant. This plant is sized to meet both the electric and district heating needs of the village. An above grade district heating distribution system would be installed with heat exchangers interfacing with existing residential and large public/commercial heating systems. The existing diesel space heating units would remain in place as a back-up or supplemental heating sources. Coal would be mined from the existing Atqasuk mine making use of the village infrastructure to support mine operations. The existing diesel generators will continue to be maintained for peaking and back-up purposes. The annual non-fuel incremental operating costs include the addition of four licensed steam boiler operators to the utility staff. 4-3 NORTH SLOPE BOROUGH ENERGY ASSESSMENT Capital Costs: $11,500,000 Annual Non-Fuel Incr. Op. Costs: $480,000 PV Cost: ($1,743,000) to ($8,312,000) Case 4-5 ATQ_ Coal Fired Generation with All Electric Heat in Atqasuk This scenario provides for a 1.5 MW base loaded coal fired generating plant located in the vicinity of the existing Atqasuk generating facility. The plant is sized to provide the energy needs of the village with all-electric space heat provided for residential and public/commercial buildings. Compact electric boilers would be installed to interface with existing heating systems. The existing diesel space heating units would remain in place as a back-up or supplemental heating source. Similar to Case 3-5 ATQ, the Atqasuk mining operation could utilize the village infrastructure and the diesel generators would be maintained for peaking and back-up. This scenario also includes annual non-fuel incremental operating costs to add four licensed steam boiler operators to the utility staff. Capital Costs: $9,900,000 Annual Non-Fuel Incr. Op. Costs: $480,000 PV Costs: ($4,664,000) to ($9,813,000) Case 5-4 Gas to Wainwright via Atqasuk Pipeline This scenario provides for a seventy-five mile pipeline running from Atqasuk to Wainwright delivering natural gas from the Walakpa Gas Field or an Atqasuk Gas Field. Two 3508 diesel generators will be converted to natural gas service for 730 KW base load operation. An underground gas distribution system and conversion of the existing heating system burners to gas for residential and dual fuel (gas and diesel) for large public/commercial buildings will be installed in Wainwright. The three remaining diesel generators will be maintained for peaking and back-up operations. 4-4 NORTH SLOPE BOROUGH ENERGY ASSESSMENT Capital Costs: $52,450,000 Annual Non-Fuel Incr. Op. Costs: $40,000 PV Costs: ($21,613,000) to ($33,615,000) 4 AIN_Drill Well Wainwrigh This scenario provides for drilling gas wells in the immediate vicinity of Wainwright as the primary energy source. Similar to Case 5-4, electric generation and space heating will be converted to natural gas. Three of the existing diesel generators will be maintained for peaking and back-up purposes. The range of capital costs represent the low costs case where two wells are drilled within two miles of the village and the high cost case is four wells drilled at a distance of ten miles from the village. After seismic testing is completed, a more precise cost estimate of development costs can be prepared. Capital Costs: $6,650,000 - $21,450,000 Annual Non-Fuel Incr. Op. Costs: $45,000 PV Costs: $24,106,000 to ($2,697,000) Case 7-5 AIN Coal Fired Cogeneration at Wainwright This scenario provides for a 2.0 MW base load coal fired cogeneration plant located in the vicinity of the existing Wainwright powerplant. This plant is sized to meet the electric and district heating needs of the village. An above grade district heating distribution system would be installed with heat exchangers interfacing with the existing residential and large public/commercial heating systems. The existing diesel space heating systems would remain in place as a back-up or supplemental heating source. Coal would be mined at the Deadfall 4-5 NORTH SLOPE BOROUGH ENERGY ASSESSMENT Syncline Mine Site and delivered annually to Wainwright via barge during the summer. Included are the mine development and infrastructure costs associated with this remote installation. The existing diesel generators would be maintained for peaking and back-up purposes. The utility staff would be increased with the addition of four licensed steam boiler operators. Capital Costs: $31,300,000 Annual Non-Fuel Incr. Op. Costs: $480,000 PV Cost: ($3,161,000) to ($12,725,000) Mine costs not included Case 8-5 AIN al Fired Generation with All Electric Heat This scenario provides for a 3.0 MW base load coal fired generation plant located in the vicinity of the existing Wainwright powerplant. The plant is sized to provide the energy needs of the village with all-electric space heat provided for residential and public/commercial buildings. Compact electric boilers would be installed to interface with existing heating systems. The existing diesel heating systems would remain in place as a back-up or supplemental heating source. Similar to the above Case 7-5 AIN, the coal source would be the Deadfall Syncline Mine Site and existing diesel generation capacity would be maintained for peaking and back-up service. Capital Cost: $29,000,000 Annual Non-Fuel Incr. Op. Costs: $480,000 PV Costs: ($7,808,000) to ($15,494,000) Mine costs not included 4-6 NORTH SLOPE BOROUGH ENERGY ASSESSMENT Case 9-4 NUI_ Gas to Nuigsut from KIC This scenario provides for a thirty mile gas pipeline from Kuparuk Industrial Center to Nuiqsut with gas regulating and treating facilities in the vicinity of the village power plant. Two of the 3406 diesel generators will be converted to natural gas operation to provide a base load capacity of 420 KW. The other three diesel generators would be maintained for peaking and back-up service. A natural gas distribution system would be installed in Nuiqsut and residential heating systems would be converted to natural gas and larger public/commercial heating systems would be converted to dual fuel (gas and diesel) for back-up purposes. Several stipulations in the Gas Sales Agreement with the Kuparuk Field Owner companies (BP Exploration) may adversely impact the feasibility of this scenario and would require further negotiations with the oil companies. Also, negotiations should include provisions for a pipeline right-of-way across the oil company leases. The following paragraphs reference Contract #50-83-301, dated 1 August, 1984. 4.(a) Price of gas is subject to annual changes. 9.0 The terms of the Gas Sales Agreement expires on 1 August, 1994. 11.0 The gas supply may be interrupted in the event the sellers exercise their rights to first utilization of the gas for operation or development of the Kuparuk River Unit. 15.0 Gas is to be used only as fuel at Kuparuk Industrial Center unless a specific agreement allows the use for other purposes. 4-7 NORTH SLOPE BOROUGH ENERGY ASSESSMENT Capital Costs: $29,530,000 Annual Non-Fuel Incr. Op. Costs: $27,000 PV Costs: ($10, 116,000) to ($17,989,000) rill Wel Nui This scenario provides for gas wells to be drilled in the vicinity of Nuiqsut for the primary energy source for the community. Due to the uncertainty of how many gas wells will be drilled and how close they may be drilled to the village, a range of costs were estimated on the basis of two wells located within two miles of the village and four wells located within ten miles of the village. After seismic testing is completed, a more precise cost estimate of development costs can be prepared. Gas regulating and treating facilities would be located in the vicinity of the Nuiqsut generating plant. Similar to the previous case 9-4 NUI, generator conversions, gas distribution and heating system conversions would be installed. The remaining three diesel generators would be maintained of peaking and back-up services. Capital Costs: $4,330,000 to $19,130,000 Annual Non-Fuel Incr. Op. Costs: $45,000 PV Costs: $16,036,000 to ($6,904,000) Case 11-4 NUI Electric Transmission from KIC to Nuigsut This scenario looks at the concept of using the Kuparuk Industrial Center as the generation source and a high voltage electrical transmission line to Nuiqsut. Existing space heating systems in residential and public/commercial buildings would be equipped with electric boilers for the primary heat source. The electric boilers would be interfaced with the existing boilers so the diesel heating systems could provide supplemental or back-up heat if required. The existing diesel generators would be maintained as peaking and back-up generation sources. 4-8 NORTH SLOPE BOROUGH ENERGY ASSESSMENT The range in the capital cost estimate is a representation of several factors affecting transmission systems including: © Conceptual design variables such as single pole versus H-frame structures which impact system reliability, maintenance costs and useful life of the system. e A broad range of previous cost estimates identified in Section 7 Reference Documents #9- Barrow Power Generation Project, #33- NACP Power Plant Evaluation, and #42- Transmission Line Atqasuk- Wainwright. © Recent discussions with contractors experienced with powerline design and construction. © Cost information for North Slope Oilfield powerline installations. Similar to the earlier Case 9-4 NUI, contractual issues concerning additional gas usage at KIC and powerline right-of-way will need to be negotiated with the oil companies at the Kuparuk River Unit. Capital Costs: $6,600,000 to $11,850,000 Annual Non-Fuel Incr. Op. Costs: $20,000 PV Costs: $7,227,000 to ($4,169,000) Case 12-4 PTL Drill Gas Wells at Point Lay Similar to the other gas well scenarios, this alternative provides for the drilling of gas wells as the primary energy source in close proximity to Point Lay. The range of costs was estimated on the basis of two wells being located within two miles of the village or four wells located 4-9 NORTH SLOPE BOROUGH ENERGY ASSESSMENT within ten miles. After seismic testing is completed, a more precise cost estimate of development costs can be prepared. Gas regulating and treatment facilities would be located in the vicinity of the Point Lay generating plant. Two 3306 generators would be converted to natural gas with a base load capacity of 300 KW. The remaining diesel generators would be maintained for peaking or back-up service. A gas distribution system would be installed in the village with residential heating systems converted to natural gas and large public/commercial buildings converted to dual fuel (gas and diesel) service for back-up purposes. Capital Costs: $5,540,000 to $20,340,000 Annual Non-Fuel Incr. Op. Costs: $45,000 PV Costs: $6,748,000 to ($12,886,000) Case 13-5 PTL Coal Fired Cogeneration at Point Lay This scenario provides for the installation of a 1.0 MW coal fired cogeneration plant for meeting the electrical and district heating needs of Point Lay. The plant would be located in the vicinity of the existing power plant and will require the addition of four licensed boiler operators to the utility staff. An above ground district heating distribution system would be installed and each residence and public/commercial buildings would be equipped with a heat exchange system interfacing with the existing diesel fired space heating system. The existing diesel generators and space heating systems would be maintained for supplemental and back-up service. In this scenario, coal would be supplied from the Deadfall Syncline Mine. Capital Costs: $26,600,000 Annual Non-Fuel Incr. Op. Costs: $480,000 PV Costs: ($10,451,000) to ($14,470,000) Mine cost not included 4-10 NORTH SLOPE BOROUGH ENERGY ASSESSMENT 14-5 PTL Coal Fired Generation with All Electric Heat at Point La In this scenario a 1.5 MW coal fired electric generation plant would be provided in the vicinity of the existing powerplant to meet both the electric and space heating needs of the village. Similar to the other coal scenarios, four licensed boiler operators would be added to the utility staff. Each residence and public/commercial buildings would be equipped with a compact electric boiler interfacing with the existing diesel heating systems. Both the existing diesel generating and space heating systems would be maintained to provide peaking/supplement and back-up service. Coal would be supplied from the Deadfall Syncline Mine facility. Capital Costs: $26,400,000 Annual Non-Fuel Incr. Op. Costs: $480,000 PV Costs: ($13,136,000) to ($16,565,000) Mine cost not included Case 15-5 PHO Coal Fired Cogeneration at Point Hope This scenario provides for a 2.0 MW coal fired cogeneration plant for Point Hope along with a district heating system. All aspects of this scenario are comparable to that described for’ the previous Case 13-5 PTL for Point Lay except for the sizing of the systems. Capital Costs: $32,900,000 Annual Non-Fuel Incr. Op. Costs: $480,000 PV Costs: ($6,152,000) to ($15,460,000) Mine costs not included 4-11 NORTH SLOPE BOROUGH ENERGY ASSESSMENT Case 16-5 PHO Coal Fired Generation with All-Electric Heating to Point Hope This scenario provides for a 3.0 MW coal fired electric plant which would provide the electric and space heating energy for Point Hope. It is similarly configured to the system described in Case 14-5 PTL for Point Lay. Capital Costs: $29,100,000 Annual Non-Fuel Incr. Op. Costs: $480,000 PV Costs: ($8,009,000) to ($15,947,000) Mine costs not included Case 17-6 Mine Mouth Generation with Electrical Transmission to Point Hope, Point Lay, Wainwright, Atqasuk and Barrow This scenario provides for a 10.0 MW base loaded centralized electric generating plant at the Deadfall Syncline Mine Site and a 365 mile high voltage transmission line connecting the villages of Point Hope, Point Lay and Wainwright with Atqasuk and Barrow. Generation capacity does not include the requirements of Barrow. BUECI would continue to operate its generating facilities to provide the needs of Barrow as well as the peaking capacity to the overall system. All communities except Barrow would be equipped with electric boilers in each building to provide space heating. The electric boilers would interface with the existing diesel heating systems. Both the existing diesel generators and diesel heating systems would be maintained for peaking/supplemental and back-up service. An additional staff of sixteen people would be employed for operation and maintenance of the centralized generating plant. Living quarters would be provided as part of the mine development infrastructure and the utility staff personnel would work on a rotating schedule. 4-12 NORTH SLOPE BOROUGH ENERGY ASSESSMENT The range in the capital cost estimate is a representation of several factors affecting the transmission system including: © Conceptual design variables such as single pole versus H-frame structures which impact system reliability maintenance costs and service life of the system. e A broad range of previous cost estimates identified in Reference Documents. © Recent discussions with contractors experienced with powerline design and construction © Cost information for North Slope Oilfield powerline installations. Capital Costs: $124, 100,000 - $188,000,000 Annual Non-Fuel Incr. Op. Costs: $1,767,000 PV Costs: ($96,351,000) to ($185,605,000) Case 18-6 Electrical Generation from Barrow with Transmission to Atqasuk, Wainwright, Point Lay and Point Hope This scenario provides for the installation of 365 mile of high voltage transmission lines with the primary generation source being the BUECI facilities in Barrow. The BUECI generating capacity would be increased by 2 MW by the addition of waste heat recovery generation capacity as recommended in Ref 13- BUECI Waste Heat Recovery Study. Future projected load growth may require the addition of generating capacity in Barrow. The economic model mid-growth case for this scenario provides for the addition of 1.5 MW in 2005 and 2011 in order to maintain an overall reserve capacity of 30% for the Barrow electrical peak demand as shown in Figure 4.1. By linking all communities together on an integral system, the BUECI generators would be base loaded making use of the Walakpa Gas Field source and the village diesel generators would be used for peaking and back-up service. Each of the communities, except Barrow, would be converted to electric space heat with compact electric boilers installed in each building. 4-13 NORTH SLOPE BOROUGH ENERGY ASSESSMENT The overall system capacity and peak loading requirements are shown in Figure 4.2 for the combination of Barrow and the four western villages. The annual average capacity factor for the BUECI facilities in this scenario ranges between 65 % - 70% through the year 2014. Figure 4.3 graphically shows the annual energy demands for both Barrow and the villages with respect to the generation capacity of Barrow and peaking demands for the village generators. Similar to the other electrical transmission cases, the range in the capital cost estimate accounts for several variables in possible design configurations, service performance and construction costs. It should be noted that this scenario does not require future capital investment in village generating capacity. Capital Costs: $80,200,000 to $144,200,000 Annual Non-Fuel Incr. Op. Costs: $183,000 PV Costs: ($474,000) to ($116,898,000) Case 19-6 Electrical Generation from Barrow with Transmission to Atqasuk This scenario is similar to that described in the above Case 18-6 with the exception that the high voltage line terminates in Atqasuk, approximately 70 miles from Barrow. Capital Costs: $14,600,000 to $26,850,000 Annual Non-Fuel Incr. Op. Costs: $35,000 PV Costs: $4,493,000 to ($14,973,000) 4-14 MW 18 16 14 12 10 8 6 4 Figure 4.1: Barrow Peak and Capacity Mid Case, no Waste Heat Added Projected Barrow Capacity Barrow Peak Load A I IM 2 i Capacity available for Village Peak ee 0 1995 2000 2005 2010 —= Total Capacity —+— Peak Load 2014 Figure 4.2: Intertied System Peak Load Barrow and Western Villages (mid case) 25 ombined Peak Demand 20 2 MW Waste Heat Added oad to be met with village resources 0 1995 2000 Tema) mere Niguel eatgeg aa "2005. 2010 | 2014 -™- BRW capacity —— Combined Peak —< vilg capacity reqt —- BRW only peak Figure 4.3: Intertied System Energy Use Barrow and Western Villages (mid case) Barrow Capability at Full Loading (Thousands) 2005 2014 [=a Baseload for BRW Baseload for Vil [ij Peak Diesel | SECTION 5 Economic Analysis of Alternatives NORTH SLOPE BOROUGH ENERGY ASSESSMENT SECTION 5 ECONOMIC ANALYSIS OF ALTERNATIVES' OBJECTIVE This section provides an assessment of the economic feasibility of each alternative scenario discussed in section 4. The total cost of each alternative is calculated and compared with the total cost of the corresponding diesel base case scenario. The net economic benefits of the alternative are defined as the difference between the total cost of meeting a village’s energy needs with the base case diesel system and the total cost of meeting the same energy needs with the alternative system. If the alternative system has a lower total cost than the base case diesel system, these net benefits will be positive and the project is said to be economically feasible. If the alternative system has a higher total cost than the diesel system, the reported net benefits will be negative and the alternative is not economically feasible. Costs which stay the same in both the base and alternative cases are irrelevant to the analysis. We therefore consider only those costs which could reasonably be expected to vary between base and alternative cases. These are the avoidable costs of the systems. It is important to remember that these avoidable costs are often completely different from the total costs of a system. For example, the depreciation expense of the electric powerhouses in the NSB villages constitutes a significant part of the total cost of supplying diesel power. However, this cost is "sunk" and not avoidable by any of the alternatives considered here. We therefore do not compute it. In contrast, the alternatives do reduce the operating hours of the diesel generator sets, thus reducing the frequency and cost of overhauls. So overhaul costs are avoidable, and we take care to account for them. IThis section was prepared by Steve Colt of ISER. 5-1 NORTH SLOPE BOROUGH ENERGY ASSESSMENT This is a "social cost" analysis. The costs considered here represent the value of all relevant economic resources used in Alaska, regardless of who is paying the bill. With the minor exception of changes in State PCE payments and federal heating fuel subsidies, the social costs considered here correspond exactly to the costs incurred by the residents, government, and businesses of the North Slope Borough. GENERAL ASSUMPTIONS The analysis is conducted in "real" dollars of constant 1991 purchasing power. The planning period begins on January 1, 1995 and lasts for 35 years to allow for the fair assessment of benefits from long-lived facilities. During the first 20 years, from 1995 through 2014, costs are evaluated in detail using escalating loads and fuel prices. For the final 15 years, all annual costs are held constant at their 2014 levels to reflect the great uncertainty about economic events occuring so far in the future. This is an accepted procedure that has been adopted in several previous Alaska energy studies. Finally, although the analysis extends for only 35 years, we do consider the effect of alternatives on the life of the Walakpa gas field. This valuable economic resource will almost surely last well beyond the end of the 35 year planning period. However, a decision to use more Walakpa gas today means less Walakpa gas available in the future. It is important to account for this fact in the analysis”. All costs occuring in future time periods are discounted back to January 1, 1995 at the rate of 5%/year. Since our analysis is inflation-adjusted, this "real" discount rate reflects the time value of money over and above the inflation rate. All cost comparisons, then, are comparisons of the present value of costs for an alternative with the present value of costs for the base case. If no account is take of eventual depletion of the gas reserves, it is easy to construct a "horror story" example of an alternative that just uses up all the gas during the 35 year planning period. Since no new gas is needed during the period, the gas appears to be free and the alternative looks extremely attractive. Obviously, however, the analysis is seriously flawed because it ignores the fact that future generations waking up at the start of year 36 will be, literally, out of gas and stuck with the enormous cost of replacing the resource or paying for diesel instead. 5-2 NORTH SLOPE BOROUGH ENERGY ASSESSMENT TREATMENT OF UNCERTAINTY The benefits of displacing existing diesel fuel use depend heavily on the following uncertain factors: 1. The price of diesel displaced. This depends on future world oil prices. 2. The quantity of diesel displaced during the planning period. This depends on the future load growth. 3s The capital cost of the alternative. This uncertainty can often be resolved by more detailed engineering studies, but for this analysis some alternatives carry a range of capital costs. 4, The geologic uncertainty as to (1) the ultimate availability of economically recoverable local gas resources and (2) the size of the Walakpa field. We deal with factors 1 through 4 by running our economic model under a range of economic and cost conditions. Low, mid, and high load growth assumptions were developed, along with low, mid, and high diesel price forecasts. These give rise to 9 possible combinations of load growth and diesel price growth. What matters for the analysis is the dollar value of diesel displaced, which is the product of load times price. Therefore, we consider the lowest, middle, and highest possible levels of diesel expense, which result from the low/low, mid/mid, and hi/hi combinations of load growth and fuel price growth. Other combinations of load and fuel are certainly possible, but these three cover the entire range of diesel expense amounts. To deal with uncertainty in capital costs, we consider low and high alternatives developed by ASCG engineers for those alternatives felt to be uncertain. In the case of local gas wells, the range of capital costs actually reflects the geologic uncertainty about where and how many wells would have to be drilled. We do not deal directly with the probability that there is no recoverable gas at all to be found. Instead, we assume gas exists and report the potential benefits of using it, conditional on its existence. NORTH SLOPE BOROUGH ENERGY ASSESSMENT To deal with uncertainty about the size of the Walakpa gas field, which affects the replacement cost of using Walakpa gas, we consider two alternatives. The "base reserves" case assumption is of a Walakpa field size of 85 Billion cubic feet (Bcf) which, when ultimately exhausted, must be replaced by diesel costing about $1.60 per gallon. The "high reserves" case assumes 265 Bef which can be ed at essentially zero economic cost. In some cases, noted below, we have simplified the analysis by assuming completely free gas. ASSUMPTIONS ABOUT AVOIDABLE DIESEL PRICES Diesel prices are ultimately determined by the world price of crude oil, a depletable resource largely under the control of a foreign cartel. Our model of delivered diesel prices assumes that the refiner’s margin, freight, storage, and distribution components of the total cost of diesel remain constant in real dollars. This assumption follows from the fact that the industries providing these services are reasonably competitive and not dealing with a depletable resource. For example, a barge operator cannot expect to double the price she charges for transporting diesel merely because the price of the diesel itself went up. Her competitors would underbid her. Our assumptions about the existing components of the avoidable cost of diesel in the NSB villages are summarized in Figure 5.1. For diesel delivered to bulk storage, these avoidable costs include crude oil, the refiner’s margin, the full cost of freight, one half the cost of the fixed management fee paid to Eskimos, Inc. > the full interest cost of inventory, and one half the cost of currently proposed replacements and additions to the NSB tank farm stock as outlined in ref. [36]. For diesel delivered to residents and businesses, we use the lowest reported distribution cost, $ .75/gal, as the avoidable cost of distribution. As the figure shows, the cost of crude oil makes up only about 25 percent of the avoidable cost of bulk diesel. 3We assume that the overall size of the fixed fee could be negotiated downward if the volume of diesel purchased were reduced. However, we assume that half of the fixed fee amount is truly fixed and not negotiable downward. 5-4 FIGURE 5.1: Components of Avoidable Cost of Diesel Fuel, 1990 $1991/gal AIN AKP ATQ KAK NQT PHO PIZ HM Crude Refiner [=] Freight Storage Dist'n Cost Component AIN AKP ATQ KAK NQT PHO PIZ Crude Oil 0.37 0.37 0.37 0.37 0.37 0.37 0.37 Refiner 0.29 0.37 0.29 0.29 0.37 0.29 0.29 Freight (& Fee) 0.50 0.98 1.29 0.50 0.64 0.50 0.50 Storage & Financ 0.13 0.08 0.12 0.08 0.05 0.11 0.18 Bulk Cost 1.29 1.80 2.07 1.24 1.43 1.27 1.34 Distribution 0.75 0.75 0.75 0.75 0.75 0.75 0.75 Delivered Cost 2.04 2.55 2.82 1.99 2.18 2.02 2.09 5-5 TABLE 5.1: PROJECTED AVOIDABLE COSTS OF CRUDE OIL AND DIESEL ($1991/GAL) Crude Oil 1990 1995 2000 2005 Low 0.36 037 0.38 0.40 Mid 0.44 049 0.55 0.62 High 0.52 062 0.71 0.84 Actual Utility Diesel 1990 1995 2000 2005 Wainwright Low 1.29 1.29 1.31 1.32 Mid 1.29 1.41 1.47 1.54 High 1.29 1.54 163 1.76 Anaktuvuk Low’ 1.79 ~~ 1.80 1.82 1.83 Mid 1.79 1.93 1.98 2.05 High 1.79 205 215 2.27 Atqasuk Low 2.07 2.07 2.09 2.10 Mid 2.07 220 225 2.32 High 2.07 232 242 2.54 Kaktovik Low 1.24 1.25 1.26 1.27 Mid 1.24 1.37 1.42 1.49 High 1.24 1.49 1.59 1.71 Nuigsut Low 1.43 1.44 1.45 1.46 Mid 1.43 1.56 1.61 1.68 High 1.43 1.68 1.78 1.90 Point Hope Low 1.28 1.28 1.29 1.31 Mid 1.28 1.40 1.46 1.53 High 1.28 1.53 1.62 1.74 Point Lay Low 1.34 1.34 1.35 1.37 Mid 1.34 1.46 1.52 1.59 High 1.34 1.59 1.68 1.81 ISER/ASCG 2010 0.41 0.69 0.96 2010 1.33 1.61 1.88 1.84 2.12 2.39 2.12 2.39 2.66 1.29 1.56 1.84 1.48 1.75 2.03 1.32 1.59 1.87 1.38 1.66 1.93 2014 0.42 0.74 1.06 2014 1.34 1.66 1.98 1.86 2.17 2.49 2.13 2.44 2.76 1.30 1.62 1.93 1.49 1.81 2.12 1.33 1.65 1.97 1.39 1.71 2.03 Avg Growth 0.7% 2.2% 3.0% Avg Growth 0.2% 1.1% 1.8% 0.1% 0.8% 1.4% 0.1% 0.7% 1.2% 0.2% 1.1% 1.9% 0.2% 1.0% 1.7% 0.2% 1.1% 1.8% 0.2% 1.0% 1.7% DIESEL.WQ1 NORTH SLOPE BOROUGH ENERGY ASSESSMENT Projections of crude oil prices from 1990 through 2010 are taken from the Alaska Energy Authority.* These projections are summarized in the top panel of Table 5.1. Crude price growth tates range from 0.7%/yr to 3.0%/yr above inflation. The high case growth path assumes that crude prices double during the next 23 years. Because the non-crude components of the diesel price are not growing, the overall projected annual growth rates for village utility diesel* prices range from 0.2% to 1.8%. ASSUMPTIONS ABOUT VILLAGE LOAD GROWTH Village load forecasts were provided and discussed in section 2. The overall annual growth rate of demand for diesel ranges from about .5% to 2.0%. The projected annual growth rate of total avoidable diesel expenses ranges from about .6% (for the low/low combination of load growth and diesel price growth) to 3.6% (for the high/high combination). ASSUMPTIONS ABOUT THE EXISTING DIESEL ELECTRIC SYSTEM In the economic model, the existing diesel system in each village is modeled as a two unit power system. The "baseload" unit for each village generally has the capacity of one of the smaller existing diesel generators and is assumed to run at or slightly below the existing average heat rate for the village power system. The "peaking" unit is modeled at a heat rate 1,000 Btu/kWh higher than the "baseload" unit, or slightly above the existing average. These actual average heat rates range between 12,000 and 14,000 Btu/kwh, as compared with design heat rates of about 10,000 Btu/kWh for fully loaded units. We assume that generators converted to natural gas would run at the same high heat rates, because the converted generators would be run under the same partly loaded conditions as the current diesel units. 41989 memorandum from Richard Emerman to Robert LeResche. These prices were subsequently adopted by the AEA board of directors for planning purposes. 5We use the term "utility diesel" to refer to fuel delivered to a bulk storage tank, regardless of who the user is. 5-7 NORTH SLOPE BOROUGH ENERGY ASSESSMENT Three types of power production costs are modeled because we consider them potentially avoidable: Fuel, variable O&M, and fixed O&M. Currently, fuel costs about 13 cents/kWh. We assume variable O&M to be 1 cent/kWh, based on analysis of overhaul costs (about .6 cents/kWh) and consummables. Fixed O&M consists mostly of labor and runs about $400,000 per year in each village. This translates to a current range of 14 to 40 cents/kWh, depending on the size of the village load served. Two engineering assumptions about the disposition of the existing diesel system were provided by ASCG staff and are important to the economic analysis. First, we assume that existing diesel generators can run indefinitely if given major overhauls at regular intervals (generally 25,000 hours of run time). The cost of overhauls is accounted for as part of the variable O&M cost of 1 cent/kWh, which we assume is shared by all power generation units considered in the analysis and thus doesn’t vary appreciably between alternatives. Second, we assume that the existing diesel generation system, including personnel, would be maintained in a fully operational state for backup purposes. This assumption means, essentially, that the only components of electric power production cost which can be avoided by an alternative are variable O&M and fuel. As we just mentioned above, however, variable O&M is assumed to be the same for all power systems and hence is not really avoided by any alternative. This leaves diesel fuel as the only component of electric production costs which is actually avoided in the analysis. The practical implications of these assumptions are shown in Figure 5.2. The figure shows the present value of the potentially avoidable costs discussed above, as well as the present value of diesel costs for direct space heating. These are the base case costs against which the costs of alternatives must be measured. Variable O&M is so small that it cannot be seen in the graph, except in the right hand bar which shows combined results for the 4 western villages. Fixed electric O&M ranges from 22% of the total avoidable cost in Wainwright to 40% in Point Lay. 5-8 FIGURE 5.2: Components of Base Case Diesel System Cost: Mid Case Present Value, Millions of 1991$ 3 _ PIZ Western 4 aw Fel [__] Variable O&M [==] Fixed O&M AIN ATQ NQT PHO Components of the Present Value of Total Diesel System Cost Present Value of 1995-2030 Costs, Millions of $1991 Mid Load, Mid Diesel Price 4 Western Component AIN ATQ NQT PHO PIZ Villages Fuel Cost 25.7 18.6 17.1 23.3 10.9 78.5 Variable O&M 0.7 0.4 0.4 0.7 0.2 2.0 Fixed O&M 7.3 6.7 7.0 8.41 7.4 29.5 incl. Labor) Total Cost 33.8 25.7 24.5 32.1 18.5 110.0 5-9 NORTH SLOPE BOROUGH ENERGY ASSESSMENT Considered together, the 4 western villages, which would be served by an intertied power system under alternative 18-6, have potentially avoidable costs of $110 million, present value. Under our assumption that full backup capability is maintained, only the $78.5 million fuel component is actually avoidable. ASSUMPTIONS ABOUT THE USE OF HOME COAL STOVES Under a pilot program, the Northwest Alaska Coal Project currently delivers coal to individual residential users in Atqasuk and the western coastal villages. The coal is currently free to consumers with an estimated delivered cost of about $370+ per ton (Atqasuk) and $1200+ per ton (Deadfall Syncline) borne by the Coal Project. Future costs can be expected to drop if the mined volume of coal increases (ref [6,43,44,45]). Because current coal use through the pilot project is not currently economically attractive on a social cost basis, we could not integrate such use into an economic cost/benefit comparison. (We already know that the coal stove option would appear worse than the diesel base case on economic grounds.) Therefore, in order to give the fullest possible credit for saving diesel to the alternatives under study, we assumed that the full village heating load is met by diesel in the base case. To the extent that some heat is now and would be provided by coal stoves, the benefits of the non-diesel alternatives would be reduced below those calculated below. A simple comparison of the heat content and combustion efficiencies of the various fuels demonstrates that. in order for home-delivered coal to be economically attractive, the cost of Deadfall Syncline coal expressed in $/ton must be less than 150 times the avoidable cost of diesel in $/gal. By similar reasoning the cost of Atqasuk coal in $/ton must be less than 125 times the avoidable cost of diesel. Using the current levels of avoidable diesel costs ($2.04 in Wainwright and $2.82 in Atqasuk), these break-even costs of delivered coal are $306/ton in Wainwright and $352/ton in Atqasuk. These break-even prices do not account for the costs of 5-10 NORTH SLOPE BOROUGH ENERGY ASSESSMENT the coal stoves themselves. They also do not take into account the extra time required to tend the coal stoves currently in use, relative to a diesel system. TABLE 5.2: CALCULATION OF THE BREAKEVEN COST OF HOME-DELIVERED COAL Item Units Wainwright Atqasuk Diesel Costs Dollar Cost $/gal 2.04 2.82 Heat Content Btu/gal 137,000 137,000 Efficiency -- 0.70 0.70 Diesel net Cost $/MMBtu 21.27 29.41 Coal Costs Target Net Cost $/MMBtu 21.27 29.41 Efficiency -- 0.6 0.6 Heat Content Btu/Ib 12,000 10,040 Target Dollar Cost $/Ton 306.32 354.28 Target Cost Ratio 150 126 (If Coal cost in $/Ton is less than 150 times diesel cost in $/gal then coal is cost-effective in Wainwright, ignoring capital conversion costs) 5-11 NORTH SLOPE BOROUGH ENERGY ASSESSMENT BASIC LOGIC OF THE ECONOMIC ANALYSIS PROCESS Before presenting the economic analysis results for each alternative case, we discuss briefly the nature of the comparisons being made in the economic analysis process, using Atqasuk as an example. Figure 5.3 shows several total cost amounts related to cases 1-4 (gas pipeline to Atqasuk) and 2-4 (drill local gas wells at Atqasuk). All costs are the present value of annual costs over the 35 year planning period. The three bars on the left of the the figure show the projected range of diesel fuel expense for Atgasuk under load/diesel price combinations of low/low, mid/mid, and hi/hi. These baseline fuel costs, also shown in the accompanying table, range from $15 million to $23 million. These are the potential benefits of an alternative which displaces diesel. The fourth bar over, labelled "gaswell" and "low" shows the total cost of building and operating a gas supply system with low capital costs. The local gas wells have no "fuel" cost: their cost consists solely of capital investment (drilling and piping) and a small amount of gasfield O&M. The total present value cost of this alternative is $4.7 million. The figure clearly shows that if this alternative can be implemented, it has a far lower cost than any of the diesel scenarios. Specifically, this "low-cost gas wells" case is cheaper than the cost of a diesel system by an amount ranging from $10.3 million to $18.2 million. After a minor adjustment for backup and peaking diesel use, the difference between any one of the three diesel bars and the "low-cost gaswell" bar represents the significant net benefits of the gas well alternative. 5-12 FIGURE 5.3: Diesel Costs Compared to Alternatives: Atqasuk Example Present Value, Millions of 1991$ low/low mid/mid hi/hi gaswell gaswell gaspipe EG Fuel [4] Capital New O&M Present Value of 1995-2030 Costs, Millions of $1991 Mid Load, Mid Diesel Price Baseline Diesel low-cost _hi-cost Gas Cost Element Low/Low Mid/Mid _ Hi/Hi Gaswells Gaswells _ Pipeline Baseline Fuel 15.0 18.6 22.9 Alternative Capital 3.9 18.7 28.1 Alternative O&M 0.7 0.7 0.5 incl. new Labor Total Cost 15.0 18.6 22.9 4.7 19.5 28.6 5-13 NORTH SLOPE BOROUGH ENERGY ASSESSMENT Now consider the bar on the far right. This represents the cost of a gas pipeline from Walakpa. The capital cost -- $28.1 million -- exceeds the highest projected level of diesel expense shown by the three bars on the left. There is no way this investment can pay for itself by displacing the costs shown in the diesel bars. This project is clearly not economically feasible under any of the assumptions considered. Finally, the second bar from the right shows the total costs of a local gas well system under unfavorable geologic conditions which drive up capital costs. The total costs of this system -- $19.5 million -- fall in between the low/low diesel expense and the hi/hi diesel expense bars. This alternative is therefore cheaper than diesel under conditions of high load and price growth, but more expensive than diesel under low/low conditions. Since it will be many years before the actual load growth and diesel price growth reveals itself, a project with these costs would be Tisky. We have seen from this graphic example how the economic analysis process works. The example shows the following important points: 1. A project with a given capital cost and fixed O&M costs, such as drilling four gas wells, produces net benefits in direct proportion to the size and expense of the village load it serves. Such projects may be feasible for large villages and infeasible for small ones. Ds The present value of of diesel fuel expense places an upper limit on the amount of capital which can be invested in a feasible project. By knowing this avoidable diesel expense for a village, one can accurately screen out infeasible projects without doing anything more complicated than comparing two numbers. 3. The type of uncertainty surrounding a project can be very important to its attractiveness. Capital cost uncertainty and geologic uncertainty can often be resolved through engineering and seismic work before investment capital is expended. But the future level of diesel demand and diesel price cannot be accurately forecast. Therefore projects which depend on low capital costs or favorable geology can be pursued and dropped with 5-14 NORTH SLOPE BOROUGH ENERGY ASSESSMENT minimal loss if they don’t pan out. But projects which depend for their success on future load and fuel price growth are far more risky because all of the investment capital must be expended long before the uncertainty about load and price is resolved. SUMMARY OF RESULTS Table 5.2 summarizes the results of the economic analysis of all 19 alternative cases. The results are presented in case order, grouped by village. For each case, the table shows: A Zs The case number and case description. The range of capital costs assumed. For many alternatives capital costs are sufficiently certain that no range is necessary. The annual level and present value of non-fuel incremental operating costs (NIOC) for the alternative, as previously discussed in section 4. The total project cost, net economic benefits, and benefit to cost ratio for the alternative under the set of assumptions most favorable to the alternative. (These are generally a combination of low capital cost, high load growth, and high diesel prices.) Total project cost is defined as capital cost plus the present value of NIOC. Net economic benefits of the project are the difference in cost between the base case diesel system and the alternative, where both sets of costs are computed under the same assumptions about diesel prices and load growth. An economically feasible project has positive net benefits. The benefit to cost ratio is another way of expressing project net benefits which relates them to the overall size of the project. An economically feasible project has a B/C ratio greater than one. The table also shows project cost, net benefits, and the B/C ratio under conditions Jeast favorable to the alternative (generally: high capital cost, low load growth, low diesel prices). Tt is easy to show that the B/C ratio is equal to 1 + (NB/PC) where NB is net benefits and PC is project cost. Therefore the B/C ratio is always greater than 1 if the net benefits are greater than zero, and conversely. 5-15 9I-S Summary of Net Benefits and Benefit/Cost Ratios for All Alternatives Present Value of Costs and Benefits from 1995-2030 at 5%, in Thousands of 1991 Dollars Most Favorable Assumptions {Least Favorable Assumptions Benefit Benefit Capital Cost Project Net Cost | Project Net Cost Description Low High Cost__ Benefits (4) Ratio | Cost_ Benefits (4) Ratio Gas Pipeline from Walakpa 28,120 28,611 (6,473) 0.77 | 28,611 (14,060) 0.51 Local Gas Wells (2) 3,920 18,720 4,657 17,482 4.75] 19,457 (4,905) 0.75 Coal Electric & District Heat 11,500 19,360 (1,743) 0.91 | 19,360 (8,312) 0.57 Coal All-Electric Heat 9,900 17,760 (4,664) 0.74 Gas Pipeline from Walakpa via Atqasu Local Gas Wells (2) Coal Electric & District Heat (3) Coal All-Electric Heat (3 Gas Pipeline from KIC Local Gas Wells (2) Electric Transmission from KIC Local Gas Wells (2) 13-5-PIZ | Coal Electric & District Heat (3) 14-5-PIZ_| Coal All-Electric Heat (3 15-5-PHO | Coal Electric & District Heat (3) 53,105 (21,613) 0.59] 53,105 (33,615) 0.37 7,387 24,106 4.26] 22,187 (2,697) 0.88 23,960 (3,161) 0.87] 23,960 (12,725) 0.47 0.28 9-4-NQT 10-4-NQT 11-4-NQT 12-4-PIZ 6,277 6,748 2.08| 21,077 (12,886) 0.39 19,260 (10,451) 0.46] 19,260 (14,470) 0.25 19,060 (13,136) 0.31] 19,060 (16,565) 0.13 480 7,860] 25,560 (6,152) 0.76 | 25,560 (15,460) 0.40 16-5-PHO | Coal All-Electric Heat (3) _ 480 7,860 | 21,760 (15,947) 0.27 17-6 | Mine Mouth Coal to PHO, PIZ, AIN, ATQ, BRW | 124,100 188,000 153,033 (96,351) 0.37 [216,933 (185,605 ? 18-6 | Barrow generation to westem villages 80,200 144,200 183 2,996 |_ 83,196 (474) 0.99 19-6 Barrow Generation to Atqasuk 15,900 27,900 35 573 | 16,473 4,493 1.27 | 28,473 (14,973) 0.47 Notes: (1) NIOC = Non-Fuel Incremental Operating Cost (2) Local gas well case results assume successful completion of development wells. No risk factor is assigned to the benefits reported here. (3) Results for local coal generation cases using Deadfall Syncline Coal are calculated ignoring a $15.2 million mine development cost which cannot be allocated to any one village. (4) Parentheses indicate negative numbers. LI-S Summary of Net Benefits and Benefit/Cost Ratios for All Alternatives, in Rank Order Present Value of Costs and Benefits from 1995-2030 at 5%, in Thousands of 1991 Dollars Most Favorable Assumptions _|Least Favorable Assumptions Present Benefit Benefit Capital Cost Annual Value | Project Net Cost | Project Net Cost Description Low High |NIOC (1) — NIOC Cost__Benefits (4) Ratio | Cost Benefits (4) Ratio 6-4-AIN | Local Gas Wells (2) 6,650 21,450 45 737 7,387 24,106 4.26 | 22,187 (2,697) 0.88 2-4-ATQ |Local Gas Wells (2) 3,920 18,720 45 737 4,657 17,482 4.75 | 19,457 (4,905) 0.75 10-4-NQT | Local Gas Wells (2) 4,330 19,130 45 737 5,067 16,036 4.16] 19,867 (6,904) 0.65 11-4-NQT | Electric Transmission from KIC 6,600 11,850 20 327 6,927 7,227 2.04 | 12,177 (4,169) 0.66 12-4-PIZ | Local Gas Wells (2) 5,540 20,340 45 737 6,277 6,748 2.08 | 21,077 (12,886) 0.39 19-6 Barrow Generation to Atqasuk 15,900 27,900 35 573 | 16,473 4,493 1.27] 28,473 (14,973) 0.47 18-6 Barrow generation to western villages 80,200 144,200 183 2,996 | 83,196 0.99 | 147,196 0.21 3-5-ATQ | Coal Electric & District Heat 11,500 480 7,860 | 19,360 (1,743) 0.91] 19,360 (8,312) 0.57 7-5-AIN | Coal Electric & District Heat (3) 16,100 480 7,860 | 23,960 (3,161) 0.87 | 23,960 (12,725) 0.47 4-5-ATQ |Coal All-Electric Heat 9,900 480 7,860 | 17,760 (4,664) 0.74] 17,760 (9,813) 0.45 15-5-PHO | Coal Electric & District Heat (3) 17,700 480 7,860 | 25,560 (6,152) 0.76 | 25,560 (15,460) 0.40 1-4-ATQ_ | Gas Pipeline from Walakpa 28,120 30 491 | 28,611 (6,473) 0.77] 28,611 (14,060) 0.51 8-5-AIN | Coal All-Electric Heat (3) 13,800 480 7,860 | 21,660 (7,808) 0.64] 21,660 (15,494) 0.28 16-5-PHO | Coal All-Electric Heat (3) 13,900 480 7,860 | 21,760 (8,009) 0.63] 21,760 (15,947) 0.27 9-4-NQT _| Gas Pipeline from KIC 29,530 | 27 442 | 29,972 (10,116) 0.66 |_ 29,972 (17,988) 0.40 13-5-PIZ | Coal Electric & District Heat (3) 11,400 480 7,860 | 19,260 (10,451) 0.46] 19,260 (14,470) 0.25 14-5-PIZ | Coal All-Electric Heat (3) 11,200 480 7,860 | 19,060 (13,136) 0.31 | 19,060 (16,565) 0.13 5-4-AIN | Gas Pipeline from Walakpa via Atqasu| 52,450 40 655 | 53,105 (21,613) 0.59] 53,105 (33,615) 0.37 17-6 Mine Mouth Coal to PHO, PIZ, AIN, ATQ, BRW | 124,100 188,000 1,767 28,933 | 153,033 (96,351) 0.37 |216,933 (1 85,605) 0.14 Notes: (1) NIOC = Non-Fuel Incremental Operating Cost (2) Local gas well case results assume successful completion of development wells. No risk factor is assigned to the benefits reported here. (3) Results for local coal generation cases using Deadfall Syncline Coal are calculated ignoring a $15.2 million mine development cost which cannot be allocated to any one village. (4) Parentheses indicate negative numbers. NORTH SLOPE BOROUGH ENERGY ASSESSMENT RESULTS FOR INDIVIDUAL CASES AND VILLAGES We now present results for individual cases, organized by village. For each case, results are shown for the low/low, mid/mid, and hi/hi combinations of load growth and diesel prices. These are denoted simply as "low" "mid" and "high" in the graphs, referring to the level of avoided diesel expense. All dollar amounts are present values in millions of 1991 dollars. ATQASUK Figure 5.4 shows results for the four Atqasuk cases: gas pipeline, local gas wells with low capital costs, coal electricity with district heating, and coal all-electric heating. Only the local gas wells show positive net benefits ranging from $10 to $17.5 million dollars. As discussed above, high cost gas wells, which have an additional capital cost of $14.8 million relative to low-cost wells, do not show positive net benefits under low/low and mid/mid assumptions. In considering the gas pipeline from Walakpa, we assumed that free gas was available, to simplify the analysis. Since both the pipeline and the gas wells deliver the same product with essentially zero operating costs, any comparison between them boils down to a comparison of capital costs. The pipeline costs estimated here -- $28 million -- exceed the maximum projected diesel expenses for Atqasuk by more than $5 million, rendering the pipeline project clearly infeasible. Both coal options show negative net benefits. The coal analysis assumes low coal costs ($50/Ton), but the major incremental labor costs (about $7.5 million in present value) and high capital costs of the coal options render them infeasible, even though Atqasuk has the highest diesel costs of the 5 villages being studied. 5-18 FIGURE 5.4: Summary of Net Benefits for Atqasuk Alternatives Puerta eee 15 § 10 2 a = 5 = Ss o4 y a Cc | YW =a iY Y -10 Y) -15 5 Gaspipe Gaswell Cogen CoalE Hl Low Mid [=] High Net Benefits in Millions of 1991 Dollars 1-4-ATQ 2-4-ATQ 3-5-ATQ 4-5-ATQ load/ Low-Cost Coal diesel price Gas Pipeline Gas Wells Coal Cogen All-Elec low/low -14.1 9.9 8.3 -9.8 mid/mid -10.6 13.4 -5.3 7.3 high/high 6.5 17.5 -1.7 4.7 Notes: (1) Gas well results assume low gas well capital cost of $2.8 million. High-cost wells could reduce net benefits by up to $14.8 million. 5-19 NORTH SLOPE BOROUGH ENERGY ASSESSMENT WAINWRIGHT The same four technologies were considered for Wainwright as for Atqasuk, and the results are roughly the same. Only local gas wells show positive net benefits relative to diesel. Because Wainwright has a larger load than Atqasuk, net benefits for the gas wells are larger than in Atgqasuk. They are large enough that Wainwright could support a relatively expensive drilling program and still produce savings over diesel. With gas wells costing $19.4 million, the assumed maximum level, gas wells show positive benefits in the high/high case and almost break even (zero net benefits) in the mid/mid case. Wainwright’s larger load is insufficient to improve the economics of a gas pipeline relative to the Atqasuk case, because the increase in pipe length is more than the increase in diesel expense. (Wainwright has significantly lower diesel prices than Atqasuk because of its coastal location). It must also be remembered that the gas pipeline costs used here assume that the pipeline to Atqasuk is already in place. Coal generation with district heating looks to be close to a break even proposition, except that the numbers presented here ignore a $15.2 mine development cost which would have to be borne by any combination of coastal villages using coal. We have also used coal prices predicated on 27,500 T/yr production levels, which may be unrealistically high. As in Atqasuk, the economics of coal-fired generation suffer from high incremental labor requirements. Coal generation with all-electric heat shows unfavorable economics relative to coal electric with district heating for the simple reason that the district heating system provides heat at almost twice the overall efficiency of the all-electric heat system (45% vs 23.5%). This efficiency disadvantage is not offset by the increased capital costs of the district heating system. This case suggests that heating energy from local coal plants in the NSB is distributed more economically via district heating systems than via conversion to electricity. 5-20 FIGURE 5.5: Summary of Net Benefits for Wainwright Alternatives 30: 20: Y 3 § 1 W : ° ; Y A yam UE 3 : See A Ys oir Yj Y 2 y : Ss S -20 y YZ -30 ”~ Gaspipe Gaswell Cogen CoalE Net Benefits in Millions of 1991 Dollars 5-4-AIN 6-4-AIN 7-5-AIN 8-5-AIN load/ Low-Cost Coal diesel price Gas Pipeline Gas Wells Coal Cogen All-Elec low/low -33.6 12.1 12.7 -15.5 mid/mid -28.1 17.6 8.3 -11.8 high/high -21.6 24.1 3.2 7.8 Notes: (1) Gas well results assume low gas well capital cost of $4.6 million. High-cost wells could reduce net benefits by up to $14.8 million. (2) Net benefits calculations for coal cases ignore $15.2 joint mine development cost. 5-21 NORTH SLOPE BOROUGH ENERGY ASSESSMENT NUIQSUT Figure 5.6 shows the net benefits for the three Nuiqsut cases: gas pipeline from KIC, local gas wells, and electrical transmission from KIC. As in other villages, the gas pipeline cannot overcome its high capital cost given the medium- size Nuiqsut load. In addition, gas from KIC will have a wellhead cost. We assume a modest $1/Mcf for these cases, but the actual amount would have to be negotiated with the producers and might end up somehow indexed to the price of crude oil, which would further reduce the benefits of this option. Local gas wells offer medium-level potential benefits. The load in Nuiqsut is just large enough to justify high-cost drilling only in the high/high case. As elsewhere, low-cost wells show large net benefits. The economics of the final Nuiqsut case, electrical transmission from KIC, depend heavily on an uncertain capital cost level and on the wellhead price of gas obtainable from KIC. Figure 5.6 shows positive net benefits when the capital cost of the line is low ($6 million) and the price of gas is low ($1/Mcf). With high transmission line costs ($11.25 million) the line could still break even under high load/high diesel price conditions coupled with low gas prices. For low capital cost conditions, we have calculated the break-even gas price which, if held constant in real dollars over the planning period, would just allow the KIC-Nuiqsut transmission line to break even. These are: $1.29/Mcf for low/low conditions; $2.12/Mcf (mid/mid); and $2.83 (hi/hi). 5-22 FIGURE 5.6: Summary of Net Benefits for Nuiqsut Alternatives 207 15 2 10 Ss a 5 B 4 6 g +5 = 40 -15 -20 " : Gaspipe Gaswell KIC Xmissn HM Low Mid [=] High Net Benefits in Millions of 1991 Dollars 9-4-NQT 10-4-NQT 11-4-NQT load/ Gas Pipe Low-Cost Xmission diesel price from KIC Gas Wells from KIC low/low -18.0 7.9 14 mid/mid -14.4 11.6 4.0 high/high -10.1 16.0 7.2 Notes: (1) Gas well results assume low gas well capital cost of $2.8 million. High-cost wells could reduce net benefits by up to $14.8 million. (2) Cases using KIC gas assume a gas price of $1/Mcf. See text for discussion of the level of the break-even gas price for case 11-4. 5-23 NORTH SLOPE BOROUGH ENERGY ASSESSMENT PoInT LAY Point Lay has the lowest avoidable diesel expense of all the villages in the study area, due toa combination of low population and coastal location. Figure 5.7 shows how the economic benefits of gas wells and coal-fired generation follow the same pattern as in Wainwright, but are all significantly lower due to the lower diesel expense. As elsewhere, low-cost local gas wells could yield handsome net economic benefits in Point Lay. However, the load is too low to support significant additional drilling costs beyond the low end of the assumed range, except under high/high load and diesel price combinations. Drilling costs at the high end of the assumed range are clearly insupportable. Point Lay appears to be too small to support a coal-fired electric plant using either district heating or all-electric heating. The capital costs of the coal plants cannot be significantly reduced even though the required capacity is far less than in other villages. As with other villages, we have ignored the $15.2 million mine development cost in producing the reported results. 5-24 FIGURE 5.7: Summary of Net Benefits for Point Lay Alternatives 10: 5 2 3 0 Hy a ; Y i ] Fs Y -15 ae Gaswell Cogen Coal-Elec Hl Low Mid [==] High Net Benefits in Millions of 1991 Dollars 12-4-PIZ 13-5-PIZ 14-5-PIZ load/ Low-cost Coal Coal diesel price Gas Wells Cogen All-elec low/low 1.9 -14.5 -16.6 mid/mid 4.3 12.5 -15.0 high/high 6.7 -10.5 13.4 Notes: (1) Gas well results assume low gas well capital cost of $4.6 million. High-cost wells could reduce net benefits by up to $14.8 million. (2) Coal cases ignore $15.2 million joint mine development cost 5-25 NORTH SLOPE BOROUGH ENERGY ASSESSMENT POINT HOPE Point Hope has the largest population of the 7 NSB villages, but also experiences a significantly warmer climate. Our analysis suggests that Point Hope has slightly lower diesel expense than Wainwright as a result. Figure 5.8 shows the net economic benefits for the two coal-fired generation options considered for Point Hope. Both cases show clearly negative economic benefits, similar to the situation in Wainwright. Because of its warmer climate, Point Hope is a poorer prospect for district heating than Wainwright. More distribution capital must be invested per gallon of diesel saved because less diesel is burned per household. Because of this, the net benefits of coal electricity with district heating are about $3 million lower in Point Hope relative to Wainwright. The coal fired all-electric heat system also shows poor economics, even ignoring the $15.2 million mine development cost. 5-26 FIGURE 5.8: Summary of Net Benefits for Point Hope Alternatives 2 os 3 a a 2 S ao s S = Cogen Coal-Elec Hg Low Mid [_] High Net Benefits in Millions of 1991 Dollars 15-5-PHO 16-%-PHO load/ Coal Coal diesel price Cogan All-Elec low/low -15.5 -15.9 mid/mid -11.3 12.3 high/high 6.2 -8.0 Notes: (1) Both Cases ignore $15.2 joint mine development cost. 5-27 NORTH SLOPE BOROUGH ENERGY ASSESSMENT INTERTIED ELECTRIC SYSTEM OPTIONS The final three alternatives analysed here all involve electrical transmission from a large power plant to one or more villages. Before presenting our results, we discuss some of the special conditions and assumptions developed for these cases. Figure 5.9 shows the significant additional load which would be added to an intertied system including Barrow and the 4 western villages of Atqasuk, Wainwright, Point Lay, and Point Hope. The figure shows that the village electricity load is only 20% of the Barrow electricity load. However, the village heat load, which would be served by all-electric means under these alternatives, is only slightly smaller than the Barrow electric load. The combined village electricity plus electric heat load is sufficient to more than double the overall load connected to a power grid, relative to the Barrow load. The implication of this large increase in overall load is that any alternative proposing to use Barrow as its generation source must be carefully evaluated for its effect on the life of the Walakpa gas field. The second issue which must be considered in evaluating all-electric intertied systems is backup and peaking. Existing village diesel electric systems are sufficient to provide ample peaking and backup for the electricity portion of the total load, but clearly insufficient to provide enough backup electricity to meet the heat load. We therefore assume that backup heat could be easily provided by existing home boilers. The design of the electric boiler system allows this to occur in a simple way. The assumption of direct backup heat is incorporated into the economic modeling process: backup heat is priced at the cost of direct diesel for the period when the electrically transmitted heat is unavailable. 5-28 FIGURE 5.9: Components of Intertied Electric Load (BRW, AIN, ATQ, PHO, PIZ) MWh (Thousands) 1995 2014 [23] Barrow Elect Village Elect ZZ Village Heat Potential Intertied Load: Barrow and Western Villages (MWh) Mid Case Load Load Component 1995 % 2014 % Barrow Electricity 44,298 48% 59,742 51% Village Electricity 9,627 11% 12,853 11% Village Electric Heat 37,533 41% 45,704 39% Total Intertied Load 91,458 118,299 5-29 ISER/ASCG LOAD_SUM.WQ1 NORTH SLOPE BOROUGH ENERGY ASSESSMENT Figure 5.10 shows the general nature of the economic comparison between centralized generation with transmission and existing village diesel. The three bars on the left show the potential avoidable diesel costs. Ignoring the costs of generating the electricity, if the transmission line costs more than the present value of avoidable diesel costs, there is no way the project can show positive net benefits. Similarly, still ignoring fuel and O&M costs for generation, if the capital costs of the electric plant and transmission line exceed the present value of avoidable diesel expense, there is no way the project can show positive net economic benefits. The mine-mouth coal plant considered here as case 18-6 suffers from this problem. As the middle bar of Figure 5.10 shows, its plant capital cost plus the low estimate for the transmission line add up to $124 million, which is $25 million more than the avoidable diesel expense for the hi/hi case. The figure shows how things get worse if we also consider fixed O&M, but the figure does not show fuel costs for the mine-mouth coal plant. The two right-hand bars in Figure 5.10 show estimated non-fuel costs for a Barrow baseload system serving the same 4 western villages. It is immediately obvious that the Barrow-based system may be competitive because additional plant requirements are minimal (2 MW of waste heat recovery capacity) and the additional O&M is very small. Nonetheless, the figure shows that with high transmission line costs, the project is not feasible, regardless of natural gas costs. With this background established, we now present the economic analysis results for the specific transmission alternatives. 5-30 FIGURE 5.10 Diesel Costs Compared to Intertied Electric System Alternatives = High $ 200: : S o 5 150 = gs 3 100 > = 2 c 50 low/low hi/hi MMC high BRX high mid/mid MMC low BRX low MMC = Minemouth Coal BRX = Barrow Baseload with Transmission Present Value of 1995-2030 Costs, Millions of $1991 Baseline Diesel Mine-Mouth Coal Barrow Baseload Cost Element Low/Low Mid/Mid _ Hi/Hi low-cost high-cost low-cost high-cost Baseline Fuel 61.3 78.5 98.8 Alternative Costs: Plant 51.1 51.1 Tee 7.2 Transmission 73.0 137.0 73.0 137.0 New O&M 28.9 28.9 3.0 3.0 Total Cost 61.3 78.5 98.8 153.0 217.0 83.2 147.2 5-31 NORTH SLOPE BOROUGH ENERGY ASSESSMENT CASE 17-6: MINE MouTH COAL This case involves a remotely sited new mine mouth power plant at the Deadfall syncline mine site. Because it involves significant new amounts of plant construction and power plant labor, as well as non-trivial coal fuel costs, this case is highly uneconomic, as shown in figure 5.11. This result should not be surprising, considering that none of the local coal-fired generating options appear to be feasible. Compared to these local options, the mine mouth alternative faces the additional cost of a $73 million transmission line and in return avoids $10/Ton in coal transportation costs. One way of interpreting these results is that it may be more cost-effective to transport coal directly to the villages than to transport the coal in the form of electricity. 5-32 FIGURE 5.11: Summary of Net Benefits for Mine-Mouth Coal Plant Millions of 1991 Dollars low-cost high-cost Net Benefits in Millions of 1991 Dollars 17-6.1 17-6.2 load/ Low-cost High-cost diesel price Xmission Xmission low/low -121.7 -185.7 mid/mid -110.0 -174.0 high/high -96.4 -160.4 Xmission Line Cost 73 137 million $ 5-33 NORTH SLOPE BOROUGH ENERGY ASSESSMENT CASE 18-6: ELECTRICAL GENERATION FROM BARROW This case involves a significant addition to the amount of Walakpa gas consumption. We analysed the case in three steps. First, we considered the baseline reserves estimate of 85 Bcf for the Walakpa field provided by Allen & Crouch through the NSB Department of Industrial Development’. Combined with 25 Bef in the South field and an assumed 10 Bef still recoverable from the East field, we have a baseline total reserves estimate of 120 Bcf. This is sufficient to meet Barrow’s needs for between 70 and 100 years, depending on load growth. With the additional load added by the 4 western villages, field life drops to between 49 and 69 years. We used these revised depletion dates to calculate the social cost of using Walakpa gas, assuming that the next best alternative available at the time of depletion would range in price from zero to $12 per Million Btu. The zero-price assumption is a proxy for "good luck in finding more cheap gas," while the $12 assumption is a proxy for the cost of switching to diesel. Under the assumption that replacement fuel will cost $12/MMBtu ($1.60/gal) at the time the gas Tuns out, the social cost of gas assumes a value of between $.78/Mcf and $1.51/Mcf in 1995 and escalates thereafter. We ran the economic model under these gas price assumptions and produced the results shown in the left-hand panel of Figure 5.12. These results showed that the alternative is uneconomic under all load/diesel price combinations when total gas reserves are 120 Bef and the eventual alternative to those reserves is diesel at $12/MMBtu. This concluded step one of the analysis. 7™emo from Jerry Wilt to Honorable Jeslie Kaleak, 2/25/92. 5-34 FIGURE 5.12: Summary of Net Benefits for Barrow Baseload Case 18-6 = )WWWW’)[, Millions of 1991 Dollars SQ |) Base reserves Hi reserves Hi cost/hi rsrvs HE ow load/low ds! mid load/mid ds! [7] hi load/hi ds! Note: hi/hi bar in middle group barely shows because value is close to zero. Net Benefits in Millions of 1991 Dollars 18-6B 18-6B Low-cost Hi-cost 18-6 Xmission Xmission load/ Low-cost High gas High gas diesel price Xmission Reserves Reserves low/low 31.5 31.5 -95.5 mid/mid -41.7 -17.1 -81.1 high/high -52.9 -0.5 -64.5 Gas Reserves (MMcf) 120,000 300,000 300,000 Xmission line cost 73 73 137 million $ 5-35 NORTH SLOPE BOROUGH ENERGY ASSESSMENT The second step was to re-evaluate the case assuming completely unlimited -- hence completely free -- gas. The goal was to see if there are conditions of load, diesel price, and capital cost under which the transmission case is economic. We found that with free gas, low capital cost, high load growth, and high diesel price growth, this case shows breakeven economics. Specifically, net benefits are about $1.7 million on a project cost of $83.2 million. (These results are not presented in Figure 5.12.) This finding concluded step two of the analysis. The third and final step was to determine the amount of recoverable gas reserves which would be sufficient to support near-breakeven economics for the transmission case. After several iterations of the model we determined that if 300 Bcf of very low cost gas can be developed from the Walakpa or other gas fields close to Barrow, the social cost of the gas would be low enough that the Barrow-based transmission system to the western villages can exhibit essentially breakeven economics. In addition to the abundant gas, high load growth and high diesel price growth are required to achieve the result of $ - .5 Million in net benefits. The results of this "hi reserves" case are shown in the middle of Figure 5.12. (The bar for the hi/hi case is barely visible because the net benefits are so close to zero). Figure 5.12 also shows results for the "hi reserves" case with high capital costs. These results serve as a reminder that breakeven economics for this case depend on a simultaneous combination of low capital costs, high gas reserves, high load growth, and high diesel price growth. 5-36 NORTH SLOPE BOROUGH ENERGY ASSESSMENT BARROW-ATQASUK TRANSMISSION LINE The final case considered here is case 19-6, consisting of an electrical transmission line from Barrow to Atqasuk. This case is of interest because it places less strain on the Barrow generating capacity and gas reserves and involves a load center with high diesel costs which is relatively close to Barrow. All of these factors could be expected to improve the economics of a single segment, 60 mile Barrow-Atgasuk line relative to the longer line just considered in case 18-6. The results of the analysis, presented in Figure 5.13, are as expected. With gas costs based on 120 Bcf of Walakpa and existing reserves, this case shows negative benefits which, nonetheless are relatively closer to zero than those of the previous 4 village cases. With gas costs set to zero for ease of analysis, the Barrow-Atqasuk electrical transmission line shows positive net benefits under mid/mid and hi/hi load/diesel price combinations. Based on the previous detailed analysis of the 300 Bef reserves case, we can confidently predict that with 300 Bef of reserves, this case would continue to show significant net benefits under hi/hi conditions and breakeven economics under mid/mid conditions. As with previous cases, high capital costs of the transmission line would render the alternative uneconomic. 5-37 FIGURE 5.13: Summary of Net Benefits for BRW-ATQ Transmission Case 19-6 5+ o O § Yj : Y 5 y 5 Y ] 2 = 40 Y) a Low-cost Low cost/free gas Hi cost/free gas Hl Low Mid [J High Net Benefits in Millions of 1991 Dollars 19-6.1 19-6.2 19-6.3 load/ Low-cost Low Cost Xmi High Cost Xmission diesel price Xmission Free gas Free gas low/low -3.0 3.0 -15.0 mid/mid -2.7 0.4 -11.6 high/high -1.7 4.5 -7.5 Xmission Line Cost 15 15 27 million $ 5-38 SECTION 6 Recommendations NorTH SLOPE BOROUGH ENERGY ASSESSMENT RECOMMENDATIONS The preceding sections have provided considerable information on: ° the current and projected use and cost of energy in the North Slope Borough e various energy efficiency programs which provide economic solutions for reducing energy consumption ° alternative methods for generating electricity and providing building heat to the villages other than diesel fuel e and an economic analysis of the alternatives to understand the long term benefits and costs of energy policy decisions. This information provides a good basis for proceeding forward in a decision making process which considers the least social costs of energy to the residents and government of the North Slope Borough. RECOMMENDATION #1: It is recommended that a gas resource assessment be performed to technically evaluate existing seismic and well log data to determine the potential for local natural gas sources located in close proximity to the villages. This approach has the greatest potential to reduce the avoidable costs of energy in the villages of Nuiqsut, Atqasuk, Wainwright and 6-1 Point Lay. As shown in Table 6-1, the most favorable benefit/cost ratios range from 4.26 to 2.08. The conclusions of this assessment will determine whether site specific seismic testing should be conducted. As discussed in Appendix H, the resource assessment is estimated to cost $220,000 and will require 9 - 12 months to complete. Subsequent seismic testing is estimated to cost $3.5 million and require 12 months for testing and evaluation. Based on the results of seismic testing, decisions can be made if it is feasible to drill local gas wells and develop gas distribution systems in each respective village. In the event gas development is not successful it is recommended that electrical transmission be considered to Nuiqsut and Atqasuk from the Kuparuk Industrial Center and Barrow respectively. The respective benefit/cost ratios for these projects would be 2.04 and 1.27 in the most favorable case. RECOMMENDATION #2: Implement the following energy efficiency programs in all seven NSB villages as described in Section 3: (1) tune up heating systems, (2) distribute low-flow shower heads, and (3) distribute compact fluorescent light bulbs to residents. These measures are likely to be cost effective even if local gas is developed. The estimated benefit/cost ratio for these projects range from 1.6 to 16.1. RECOMMENDATION # 3: In villages where natural gas development is not an option, begin implementation of other programs to improve the efficiency of building stock and equipment as discussed in Section 3. RECOMMENDATION #4: For subsistence camp use, encourage the replacement of white gas and kerosene appliances with units which can burn unleaded gasoline and diesel fuel. These fuels appear to offer a substantial cost savings as discussed in Section 2 and Appendix C. The estimated benefit/cost ratios range from 2.0 to 4.0. RECOMMENDATION #5: North Slope Borough agencies which buy electricity and diesel fuel directly from the NSB Department of Municipal Services should use the actual avoidable cost of energy production as a benchmark against which to evaluate efficiency improvements. Using the tariff rate of energy as a basis for departmental decisions may lead to bad decisions and increased overall costs to the North Slope Borough. See Appendix B for further details. As shown on Table 6-1, gas pipeline, coal fired generation and district heating systems were evaluated. Due to the high capital development costs and transportation costs for coal, these alternatives do not appear to be economically feasible at the energy demand rates considered for the villages. Similarly, for home use of coal heaters to be economically competitive with the avoidable cost of diesel fuel, the cost of delivered coal must be less than 125 x avoidable cost of diesel for Atqasuk (125 gal/ton x $2.82/gal = $352/ton) and for coastal villages 150 x avoidable cost of diesel (150 gal/ton x $2.04/gal = $306/ton). For Atqasuk coal, the costs are closely approaching the avoidable costs of diesel fuel. Perhaps continued progress with development of the Western Arctic Coal Project will eventually make this option feasible for the coastal villages. See Section 5 for further details. 6-3 TABLE 6-1 Summary of Net Benefits and Benefit/Cost Ratios for All Alternatives, In Rank Order Present Value of Costs and Benefits from 1995-2030 at 5%, In Thousands of 1991 Dollars 6-4-AIN 2-4-ATQ 10-4-NQT 11-4-NQT 12-4-PIZ 19-6 18-6 3-5-ATQ 7-5-AIN 4-5-ATQ 15-5-PHO 1-4-ATQ 8-5-AIN 16-5-PHO 9-4-NQT Most Favorable Assumptions |Least Favorable Assumptions Present Benefit Benefit Capital Cost Annual Value | Project Net Cost | Project Net Cost Description Low Hig NIOC (1) _ NIOC Cost__ Benefits (4) Ratio | Cost__ Benefits (4) Ratio Local Gas Wells (2) 6,650 21,450 45 737 7,387 24,106 4.26 | 22,187 (2,697) 0.88 Local Gas Wells (2) 3,920 18,720 45 737 4,657 17,482 4.75 | 19,457 (4,905) 0.75 Local Gas Wells (2) 4,330 19,130 45 737 | 5,067 16,036 4.16] 19,867 (6,904) 0.65 Electric Transmission from KIC 6,600. 11,850 20 327 6,927- 7,227 2.04 | 12,177 (4,169) 0.66 Local Gas Wells (2) 5,540 20,340 45 737 6,277 6,748 2.08 | 21,077 (12,886) 0.39 Barrow Generation to Atqasuk 15,900 35 573 | 16,473 4,493 1.27 | 28,473 (14,973) 0.47 Barrow generation to western villages 80,200 183 2,996 | 83,196 (474) 0.99 |147,196 (116,898) 0.21 Coal Electric & District Heat (1,743) 0.91] 19,360 (8,312) 0.57 Coal Electric & District Heat (3) (3,161) 0.87} 23,960 (12,725) 0.47 Coal All-Electric Heat (4,664) 0.74] 17,760. (9,813). 0.45 Coal Electric & District Heat (3) 17,700 (6,152) 0.76 | 25,560 (15,460) 0.40 Gas Pipeline from Walakpa 28,120 (6,473) (0.77 | 28,611 (14,060) 0.51 Coal All-Electric Heat (3) 13,800 (7,808) 0.64] 21,660 (15,494) 0.28 Coal All-Electric Heat (3) 13,900 (8,009) 0.63} 21,760 0.27 Gas Pipeline from KIC 29,530 0.66 | 29,972 0.40 13-5-PIZ 14-5-PIZ 5-4-AIN 17-6 Notes: (1) (2) (3) (4) Coal Electric & District Heat (3) 11,400 Coal All-Electric Heat (3) 11,200 Gas Pipeline from Walakpa via Atqasu] 52,450 Mine Mouth Coal to PHO, PIZ, AIN, ATQ, BRW | 124,100 188,000 NIOC = Non-Fuel Incremental Operating Cost Local gas well case results assume successful completion of development wells. No risk factor is assigned to the benefits reported here. 19,260 (10,451) 19,060 (13,136) 53,105 (21,613) 153,033 96,351) Results for local coal generation cases using Deadfall Syncline Coal are calculated ignoring a $15.2 million mine development cost which cannot be allocated to any one village. Parentheses indicate negative numbers. 0.46 0.31 0.59 0.37 19,260 19,060 53,105 216,933 (14,470) 0.25 (16,565) 0.13 (33,615) 0.37 (185,605) 0.14 SECTION 7 Reference Documents 1) 2) 3) 4) 5) 6) 8) 9) 10) 11) 12) 13) 14) 15) 16) 17) REFERENCE DOCUMENTS Alaska Electric Power Statistics, 1984 through 1990, Alaska Energy Authority Alaska Energy Authority Village Power System Survey, January 1990, RSA Engineering, Inc. Alaska Population Overview - 1990 Census and Estimates, July 1991, Alaska Department of Labor Aluaq Mine Study, November 1989, ASCG Atqasuk Coal Conversion Preliminary Feasibility Study, July 1989, ASCG Atqasuk Coal Mine Project Phase III Project Report, September 1990, ASCG Barrow Energy Study, April 1983, Coffman Engineers, Inc. Barrow Gas Field Monthly Report, December 1991, NSB Department of Industrial Development Barrow Power Generation Coal Conversion Study, February 1989, ASCG BUECI Monthly Operating Report, December 1990 and December 1991, BUECI BUECI printout: 1990 and 1991 Actual, Customers/ #of Bills, Units of Sales, Revenue January 1992, Sheldon Tiegland Building Energy Efficiency Standard, September 1, 1991, State of Alaska Department of Community and Regional Affairs. BUECI Waste Heat Recovery Study, RSA Engineering/ASCG, Dec. 1989 Climatic Atlas of the Outer Continental Shelf Areas and Coastal Regions of Alaska, Volume III Chukchi-Beaufort Sea, 1988, Arctic Environmental Information and Data Center, UAA Commercial-Sector Conservation Technologies, LBL-18543, February 1985, Lawrence Berkeley Laboratory. Comprehensive Annual Financial Report of the North Slope Borough, Alaska, 1980 through 1990, NSB Department of Administration and Finance Diesel Recaps, occasional FY87 - FY89, NSB Village Fuel Program 7-1 18) 19) 20) 21) 22) 23) 24) 25) 26) 27) 28) 29) 30) 31) 32) 33) District Central Heating System - Wainwright, July 1980, Arctic Slope Technical Services District Wide CIP Six Year Facilities Plan FY92, 1991, North Slope Borough School District DMS Monthly Fuel Summary, FY90-91, NSB DMS Village Services Division Economic Analysis of Coal-Fired Power Plants to serve Nome, Kotzebue and the Red Dog Mine, September 19, 1991, ASCG/Analysis North Historical and Projected Oil and Gas Consumption, January 1985, State of Alaska DNR, Division of Oil and Gas North Slope Borough Budget Document, FY89-90 through FY 91-92, NSB North Slope Borough Capital Improvements Program FY 1985 - FY 1990, June 1984, NSB Planning Department and Alaska Consultants, Inc. North Slope Borough Census of Population and Economy, December 1989, NSB Department of Planning and Community Services North Slope Borough Community Housing Program, Phase I: Feasibility Study, March 1, 1991, ASCG North Slope Borough Energy Plan, November 1983, Coffman Engineers, Inc. North Slope Borough 1980 Housing Survey Analysis (DRAFT), January 1982, Alaska Consultants, Inc. North Slope Borough Regional Energy Management Plan Resource Volume, December 1986, Heat Loss Analysis North Slope Borough School District Energy Audit and Conservation Plan, 1991, RSA Engineering North Slope Borough Semi-Annual Economic Profile, Spring 1989 and Spring 1990, NSB Planning Department Northwest Alaska Coal Project Coal Pricing, Final Report, September 1991, Northern Economic Northwest Alaska Coal Project Power Plant Evaluation Final Report, September 1991, SFT, Inc. 34) 35) 36) 37) 38) 39) 40) 41) 42) 43) 44) 45) PCE Eligibility Filings Submitted to the APUC, 1990 and 1991, NSB Division of Municipal Services Point Barrow, Lighting Efficiency Plan, April 4, 1991, Sycom Enterprises Six Year Capital Projects Estimate for Fuel-Related Code and Life/Safety Upgrades, North Slope Borough and Village Corporation Facilities (DRAFT), February 1992, NSB Mayor’s Office Fuel Division and NSB CIP/RELI Division Statistical Reports of the Power Cost Equalization Program, 1988, 1990, and 1991, Alaska Energy Authority Study of Areawide Electrical Power Subsidies, October 1989, BTS/LCMF Joint Venture Summary Characteristics for Governmental Units and SMSA’s: Alaska, 1980 Census of Population and Housing, September 1982, US Bureau of the Census Summary Population and Housing Characteristics: Alaska, 1990 census of Population and Housing, August 1991, Bureau of the Census Third Annual Statistical Report of the Power Cost Equalization Program, September 1991, Alaska Energy Authority Transmission Line, Barrow - Atqasuk - Wainwright, September 1981, JAW-RWRA/IECO-HGA Western Arctic Coal Demonstration Project Phase IV, Project Report, September 1990, ASCG Western Arctic Coal Demonstration Project Phase IV, Project Report, September 1991, ASCG Atqasuk Coal Demonstration Project, Phase IV, Project Report, September 1991, ASCG 7-3 APPENDIX A Population Forecast APPENDIX A: ECONOMIC AND POPULATION FORECASTS? As discussed in the text, our projections of energy demand are based on a set of population forecasts. We forecast the population of the North Slope Borough using a model? which calculates total population change based on (1) calculation of natural population increase in single-year age cohorts and (2) assumptions about economic growth, available employment, and migration. As the number of jobs rises and falls, the number of people who choose to live in the Borough changes in response. The growth of the economy and the corresponding changes in the population depend on a variety of uncertain conditions. To reflect the range of possibilities, we constructed three scenarios, each of which incorporates a different set of economic and demographic conditions. The growth of the total resident population under each of the three scenarios is shown in Figures A.1, A.2, and A.3. Between 1990 and 2015, Borough population grows at an average rate of between .7 and 1.4 percent. From roughly 1990 through about 2000 in all of the scenarios, the Borough population reaches a maximum and contracts slightly as revenues and jobs decline and many non-Natives leave. After 2000, the Borough population stabilizes at a new, slower growth Tate that is driven by growth in the Native population and a stable non-Native population. The most important distinctions among the three scenarios are the duration of the contraction after 1990 and the eventual long-term growth rate of the Borough after 2000. The post-1990 contraction lasts longest in the low case and is shortest in the high case. The eventual long-term steady-state growth rate is lowest in the low case and highest in the high case. The high case gets an extra boost of growth beyond the steady-state growth rate in the latest years due to ANWR development. 1This appendix was prepared by Eric Larson of ISER. The North Slope Model used here was first created by Gunnar Knapp of ISER under contract to the Minerals Management Service. A-1 For each of the scenarios we have also forecast the Native, non-Native, and total population for each village. In both Barrow and the outlying villages, we project a decline in non-Native population set off against continuing growth in the Native population during the 1990s. Because Barrow has a sufficiently high percentage of non-Natives, This decline in non-Native population is sufficient to cause a slight overall decline in Barrow total population and in NSB total population. To repeat, this decline is solely a result of non-Native population decline in Barrow. The population in the villages continues to grow under all scenarios. To create this range of three possibilities, we adjusted six different parameters in the model. The aim of the exercise was to capture the fullest plausible range of outcomes between the Low and High projections. In keeping with that aim, we grouped assumptions together so that they would reinforce each other. In reality, it is unlikely that all the assumptions leading to "Low" growth will actually come true. The following parameters were adjusted. 1) Maximum unemployment rate for Natives: When the unemployment rate for Natives goes above this maximum, all newly unemployed Natives leave the Borough in search of work. This maximum is set at 100% in the high case so that effectively no out-migration occurs. In the middle and low cases, the maximum rate is 50% and 40% respectively. This maximum affects the population level only in the later years of the low scenario. 2) Percent of newly unemployed who leave: This is the percentage of all newly unemployed non-Native workers who leave each year. The rate is set at zero in the high case so that there is no out-migration. It is set at 20% and 30% in the middle and low cases respectively. This parameter is the most critical link between changes in the economy and changes in the population. As jobs are lost in the Borough over the next ten years, Natives and non-Natives respond differently. Non-Natives are assumed to out-migrate at a much higher rate than Natives when jobs are lost. As a result, most of the contraction in the Borough after 1990 is due to non-Natives leaving to seek jobs elsewhere. A-2 3) Annual percentage change in property value: Reliable forecasts of property value from the Alaska Department of Revenue extend only to 2000. Beyond this date, the value of property (excluding ANWR development) is assumed to be constant in the high and middle cases. In the low scenario, the value of property declines four percent per year to match the approximate rate of decline in the value of property forecast for the 1990s. Taxes on the value of property are the primary source of revenue for the Borough government. More revenues can be raised in the middle and high scenarios than in the low scenario. As a result, the Borough can hire more workers and sustain the growth of the economy. 4) We assume the Arctic National Wildlife Refuge (ANWR) is developed for oil production in the high case. We assume production begins in 2003 and takes five years to reach full capacity, and that ultimate capital investment is half of the total accumulated investment in oil production on the North Slope thus far. Effectively, we assume ANWR to be "half" of a Prudhoe Bay. Taxes on ANWR oil properties increase the Borough’s overall wealth, its cash flow, and its sustainable level of job-creating expenditures. With more jobs available, more people stay in and more people move to the Borough. 5) The percent of capital investment expenditures financed by cash holdings has several effects on the forecasts. Using cash holdings (instead of issuing bonds) to finance capital projects causes cash balances to be depleted faster. Depletion of cash balances reduces interest income which in turn reduces operating revenues. Also, using cash holdings to finance projects implies the need to sell fewer bonds, thereby reducing future debt payment requirements. This decision about how much capital to finance with bonds is especially crucial if higher future income is expected (such as revenues from property taxes on ANWR development). The percent of near- term capital investments financed by cash holdings is set at 30% in the High case to reflect the fact that the Borough would likely defer the cost of current capital projects into the future when the revenues would be available from taxing development at ANWR. In the middle and low cases, the percent financed by cash is set higher (at 40% and 50%) to reflect the preference to pay for projects on a cash basis instead of waiting to pay with uncertain future revenues. A-3 6) Property Tax Rate. The maximum rate at which the Borough can legally tax property is substantially above that rate at which it has taxed the property in the past. In order to estimate the actual (rather than legal maximum) tax rate used by the Borough government, we estimate a "politically expedient" property tax rate based on the average rate used in the past. The Borough government will have some latitude in the future to raise or lower this tax rate. In the high scenario, we assume that the Borough aggressively taxes the new property value available at ANWR and taxes at a higher rate than in other scenarios. This enables the Borough to accumulate cash balances from these higher taxes and to continue financing capital investment well into the future. In the low and middle scenarios, tax rates are set at less aggressive levels, closer to those from the recent past. Even with this wide range of assumptios about future economic growth and migration, it is difficult to induce a wide range of population growth rates. This is because most population change in the Borough is driven by natural increase among the Native population. Unless Native migration patterns change dramatically and unexpectedly during the next decade, it is unlikely that population will deviate from the long-run growth path resulting from natural increase. A-4 Figure A.1 Resident ee of the North Slope Borough Ww. és Thousands ws 1712 148 at wo ue 1mm 1072 07 tans 10s 1053 «tay «OM Oe) «NESS 1064 1074 «108S«1007«AN11 «11211991146 1113 Goce ° eee tt 1990 1991 1992 1983 19841995 1996 1997 1988 1999 2008 2001-2002 2003} 2004 2005 2006) 2007 2008S 2008 201020112012 20132014 2015 _.— Total _,._ Native —_._ Non—Native Resident Population of Barrow Ww ri tT Thousands T T § § g £ § g ¥ ¥ g 3 g g g g g 8 g a z 3 E g g § & 164 ga 1104 9 3 8484 TBST NS MHC ZL HZ HHS 9S HBTS 45g, ° m — 4 at 4 heen 4 4. nm a Seemann 1. a 4 4 4 a 1 4 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002-2003 2004 «= 2005) 2006 «= 2007 2008 «62009 «2010 2011. 2012-2013 2014-2015 _.— Total _._ Native —,— Non-—Native Resident Population of Seven Villages * 3 Low Scenario Thousands | T T 8 E 8 8 E a a 9s m1) “2 ——* * ——————— +—* +—* t * * + ~+——a ° 1 1 1 1 1. . . r n pcr, rn n n r . 1 rn ary . ri . 1. . . 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003-2004 «2005-2006 «2007-2008 «2009 20102011 «2012 +2013~«2014~—-2015 poeaeee Ota _.— Native _,_ Non—Native * Seven Villages include LOW SCENARIO ASSUMPTIONS: High out—migration Anaktuvuk Pass, Atqasuk, Kaktovik, ANWR not developed Nuiqsut, Point Hope, Point Lay, and Wainwright Decline in value of Non—ANWR property after 2000 Low borrowing — high cash capital projects financing A-5 Low property tax rate ~ Thousands oa 1 110s) Thousands Thousands Figure A.2 Resident Population | of the North Slope Borough was 1712 47 agg le 1900 1175 1121 10871066 10541062 «1073 OKS 1085110) 1HH0«N6«112S Ste 1180«1196 1213118 ee Oe 4 ft ae 4 +--+ — + 4 ~ 1990 1991 1852 1953 1994 1995 1996 1997 1998 1999 2000 2801 2oN2 OGY 004 2005 2006 2007 008 009 2010 201 «20122013 2014 2015 _.— Total _.— Native —. Non-—Native Resident Population of Barrow Middle Scenario 4 n _ 4 4 4 1 1 4 n n 4 4 4 4 1 4 Amecenea 1 at 4 4 1 1 1990 1991 1992 1993 196 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 )«=— 2009 2010 2011. «2012-2013 2014 = 2015 —_.— Total _,— Native —,— Non-Native Resident Population of Seven Villages * iddle Scenario see se eee 196 177 18k SCS SECC sO: ra a ee a ee ee ee ee 1990 1991 1982 1993 194 1995 19961997 1998 1999 2000 2001-2002 2003 2004 = 2005 2006 «= 2007 2008 «= 2008) 2010 2011 «20122013 2014S 2015 -— /otal _,— Native _,— Non—Native * Seven Villages include MIDDLE SCENARIO ASSUMPTIONS: Mid out-migration Anaktuvuk Pass, Atqasuk, Kaktovik, ANWR not developed Nuiqsut, Point Hope, Point Lay, and Wainwright No change in value of Non—ANWR property after 2000 Mid borrowing — mid cash capital projects financing A-6 Mid property tax rate Thousands Thousands Figure A.3 Resident copes ot the North Slope Borough 143 1711647 15461585 1622-165 Ss ws 19 (126 (1361 Mig «1466215805 Hes 116 1199 1109 1002108110410) NAS TST 1990 1991 1992 1993 1994 1985 1996 1997 1998 1999 2000 2001 2002-2003 2004 «2005 «2006 «2007 2008 2009) 2010 201120122013) 01e 2015 _.— Total _,_ Native —.— Non—Native Resident Population of Barrow High Scenario 9s 14531399 1239 179 «13 1M6 S77 107 = 1202 12 1107 5 1053 Mor«1186 ee a ee ee 1 4 4 4 4 4 denne 4 A. Seseenseretmemeseadl 1 A. 4 + 1 a at heel 1 1990 1991 1992 1993 1994 «1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 same) 210 «2011 2012, 2013 2014S 2015 —_.— Total _,.— Native —,.— Non—Native Resident Population of Seven Villages * High Scenario Se 16 06 een me 1 same et heart ke ede A 1 1 1 1. 1 1. 0 1991 1992 1993 19941995 me 1997 1998 = 1999 2000 2001 2002, 2003 2004 «= 2005 2006 «2007 2008 «= 2009 2010 2011 «2012, 2013-2014 = 2015 _. Total _.— Native —,_ Non—Native * Seven Villages include HIGH SCENARIO ASSUMPTIONS: Low out-migration Anaktuvuk Pass, Atqasuk, Kaktovik, ANWR developed Nuiqsut, Point Hope, Point Lay, and Wainwright No change in value of Non—ANWR property after 2000 High borrowing — low cash capital projects financing A:T High property tax rate APPENDIX B Energy Subsidy Analysis APPENDIX B. ENERGY SUBSIDY ANALYSIS! OVERVIEW Residents, businesses, and other facilities in the North Slope Borough currently consume almost 47 million kilowatt-hours (kWh) of electric power’. The total cost of producing this power -- including annualized payments on past capital outlays -- is about $16.2 million. Seventy percent of this electricity is generated in Barrow, where total costs are a modest 15 cents/kWh. The other 30% is produced with diesel generators in the villages and costs about 84 cents/kWh. Of the total $16.2 million cost, consumers, including other NSB departments? such as the school district, pay $4.2 million. The Borough pays $11.5 million, and the State of Alaska is potentially obligated to pay about $400,000 through the power cost equalization program (PCE).‘ Village residents, businesses, and Borough facilities currently use about 1.9 million gallons of diesel directly for heating and vehicles (in addition to the 1.3 million gallons used for electricity generation). The total cost of of this fuel is about $4.9 million. Residents and non-Borough commercial customers pay about $1.9 million of this cost. The Borough pays about $1.3 million in subsidies and $1.3 million in costs allocated to its own departmental operations, including schools. The federal government’s energy assistance program pays about $124 thousand towards residential fuel bills. This appendix was prepared by Lexi Hill and Steve Colt of ISER. The authors thank the numerous NSB employees who provided data to support the analysis. 2Village consumption is computed for FY 1991. Barrow consumption is for CY 1990. In some cases averages over recent past years are used due to lack of quality data. 3Schools, health, and public safety are generally billed for electricity consumption. Power is provided directly to village water plants, washeterias, and street lights since they are run by the Department of Municipal Services. If a consumer payment was imputed for this consumption, the computed level of NSB subsidies to electricity production would fall. 4PCE payments have been temporarily discontinued pending resolution of a dispute over the NSB’s compliance with PCE regulations. B-1 INTRODUCTION This appendix describes the components and magnitude of the current sotal cost of providing gas, diesel and electricity in the North Slope Borough. By total cost we mean annualized dollar amounts covering all costs including current operating costs and payments on past capital outlays. Other sections of this report focus on avoidable costs. These are the costs which could be saved in the short to medium term if consumption were reduced but not eliminated. In the very long run, all costs are potentially avoidable because capital is paid off, wears out, and may or may not be replaced. We look at the total cost of energy in two ways. First, we show what the money is used for: fuel, freight, storage, labor, payments on past capital outlays, etc. Second, we show who pays what part of the total cost: residents, businesses, borough departments, State of Alaska, etc. We then calculate the NSB general government subsidy as the difference between total costs and total payments by user groups. Although much of the data comes from accounting records, this is a broad economic analysis, not a detailed financial accounting statement. We consider past investments in the energy system and include prospective costs of facilities now under construction, such as the Walakpa gas fields. Other sections of this report focus on the future and carefully consider how specific alternatives might reduce future costs. In contrast, this analysis provides a compilation of past and present costs which are currently being paid, to give the reader a sense of how much money is "tied up" in the current energy supply system. The main source of direct operating subsidies is clearly the Borough government, financed by oil property taxes. The State of Alaska’ subsidizes the cost of electricity outside of Barrow through the PCE program. The federal government provides only a small annual subsidy to residential diesel consumers through its energy assistance program (EAP). But the federal government set up a major ongoing subsidy of Barrow gas energy by transferring to the NSB the developed Barrow gas fields along with a $30 million cash grant in the mid 1980’s. Interest B-2 from the $30 million, combined with capital improvements paid for by the Borough, lets BUECI buy natural gas for less than one-tenth the total cost of production. Electricity in the villages costs residential consumers 10% to 17% of total cost, and residential heating fuel is priced at one-third to one-half its total cost. As the oil property tax base declines during the later 1990s°, there will be less money available for both state and Borough subsidies. Many of these subsidies are nowhere near as obvious as the PCE credit line on an electric bill, but rather are found in many different parts of the NSB budget. None of the information in this section should be taken to indicate that ratepayers "should" be paying more for energy. Much of the total cost outlined here (all of the capital investment) is "sunk" and unavoidable. The Borough has already spent the money, and cannot reduce past expenditures. However, Borough leaders planning to meet future energy needs should be aware of all the components of energy cost. In the long run, many of the current capital facilities will have to be replaced or augmented, so total costs, even if unavoidable in the short run, provide a good guide to the potential need for future spending. Most Borough officials are well aware that current energy prices in the NSB are often completely unrelated to costs. For instance, the price BUECI pays for natural gas ($.324 per thousand cubic feet, or Mcf) was originally based on the price of gas in Anchorage, adjusted by several economic measures of the overall cost of living on the North Slope. There was no reference in the formula to the actual cost of producing the gas. Furthermore, the original formula rate of $ .324/Mcf was adopted by ordinance in 1984 and has never been adjusted since. We calculate the average total cost of Barrow gas to be $4.21/Mcf. Of this, more than half Tepresents capital costs, which are sunk and cannot be reduced even if the field were completely shut down. The other half, amounting to $1.95/Mcf, covers the annual operations and maintenance (O&M) costs of the gas field facilities. This could be avoided only if output were reduced to zero for some significant period of time. In the short run, the cost of an additional > Although there has been a continual brightening of the tax base outlook over the past few years, published projections by the State and NSB continue to show an eventual downturn in the tax base beginning in about 1995. See, eg, North Slope Borough Financial Outlook, December 1990. NSB Admin & Finance Department. B-3 Mcef is zero, as long as there is spare delivery capacity in the current system. Which concept of costs "should" be reflected in the consumer price? We cannot answer this question. There is no one "right" price in a place like the NSB, where providing services to all residents is an important social goal. What is crucial, however, is to use the appropriate measure of cost, rather than price, as a benchmark when making energy planning decisions. Many NSB agencies currently make energy payments to the Department of Municipal Services (DMS) based on consumer prices. An energy-saving investment may reduce their budgetary costs based on their consumer rate. But these accounting savings may be far greater or lesser than the actual change in costs experienced by the NSB as a whole. If actual overall costs do not go down much, then the investment is a waste of money for the NSB as a whole, even though it seems to make sense for the agency. The remainder of this section presents our detailed analysis of NSB diesel and electricity costs. The information is presented in 9 tables. Table B.1 covers Barrow. Table B.2 covers the 7 villages taken together. Tables B.3 through B.9 show costs for each village. The remainder of the text explains how the tables were constructed. BARROW GAS FIELDS Cost information for the existing Barrow gas fields is shown in the left panel of Table B-1. Total costs are $4.21/Mcf. Of this cost, about $1.90 is covered by interest on the $30 million federal grant which has been preserved as an endowment. Capital costs were obtained from the Borough’s annual financial reports and annualized at a 5% real interest rate over 15 years®, except for Walakpa facilities, which are amortized over 35 years. Payments from all the applicable investments were summed each year, and the average annual payment for the period 1985 to 1995 is used as the annualized capital cost. Operations and maintenance, interest © Based on recommendations provided by Sharpe Associates Financial Mgmt Services for a previous study of electric power subsidies. Ref [38], appendix H. Among other things, Sharpe pointed out that the NSB uses a 15 year life for utility plant at Service Area 10. B-4 income, and customer revenue are from the NSB’s 1990 financial statements. The Borough subsidy to gas sales is simply costs minus revenues. To allocate costs and subsidies to BUECI and other purchasers (chiefly NARL), costs and interest revenues were pro-rated on an even per- unit basis. Since BUECI pays less than other purchasers, the per-Mcf NSB subsidy to them ($1.99/Mcf) is greater than to non-BUECI purchasers ($1.70/Mcf). BARROW UTILITIES AND ELECTRIC COOPERATIVE, INC. (BUECI The Barrow Utilities Electric Cooperative Inc (BUECI) sells natural gas for home heating and generates electricity with natural gas fired generators. The calculation of the total cost of direct gas and electricity from BUECI is shown in the center and right panels of Table B-1. BUECI buys its gas at a nominal rate of $.324 per Mcf from the Borough, which operates the Barrow gas fields. In addition to below-cost gas, BUECI benefits from Borough-funded capital projects for generation and distribution of electricity. Barrow natural gas delivered for home heating actually costs $5.58/Mcf. Of this, about $2.60/Mcf is Borough-paid capital investment. Interest income from the gas fields’ $30 million endowment essentially covers gas field operations and maintenance costs. Thus BUECI’s natural gas rates cover BUECI’s O&M costs and the depreciation costs for the plant it paid for. BUECI residential customers pay an average of $1.90/Mcf, and commercial customers $1.70/Mcf. Barrow electricity costs 14.9 cents/kWh to produce, when the gas used for generation is accounted for at its full cost. Gas field subsidies cover about 7 cents/kWh of this total. Average customer revenue (averaged over all classes) covers about 6 cents/kWh. The remaining 2 cents/kWh represents NSB provision of capital equipment. Residential customers pay an average of 8.1 cents/kWh; commercial customers pay an average of 6.4 cents/kWh. Allocations to several other electric user groups, such as schools and large power customers, are not shown in the Table B.1. B-5 Table B.1: Barrow Energy Cost Analysis Gas Fields Production (1) Direct Gas Usage (2) Electric Generation (3) Dollars $/Mcf Dollars $/Mef Dollars $/kWh Total Costs: 5,240,800 4.21 | BUECI Costs 829,135 1.69 | BUEC! Costs: 2,599,503 0.077 Annualized Capital 2,817,705 2.26 Annualized Capital 153,981 0.31 Annualized Capital 973,870 0.029 O&M —-2,423,091 1.95 O&M 514819 1.05 O&M 1,416,802 0.042 Fuel Purchases @ .324/Mcl 160,335 0.33 Fuel Purchases 208,831 0.006 Revenues: Payments to BUECI: Payments to BUECI: Total = .2,785;140" Gp Consumer purchases 775,312 1.58 Consumer Payments 2,066,287 0.061 Intereston $30MM 2,357,750 1.89 Subsidy 53,824 = 0.11 Other & Discounts (160,068) (0.005) Customer Purchases 427,390 0.34 Total 829,135 1.69 Subsidy 693,284 0.021 NSB Subsidy to Gas Sales: 2,455,660 1.97 Total 2,599,503 0.077 Quantity Sold: Mcf % | Total Cost of Gas: Dollars $/Mef | Total Cost of Electricity: Dollars $/kWh ToBUEC! 1,150,000 92%| Gas Field AnnualizedCap 1,107,098 2.26| + GasField Annualized Cap 1,398,999 0.042 To Others (NARL) 95,000 8% Gas Field O & M 952,051 1.95 Gas FieldO&M 1,203,072 0.036 Total 1,245,000 BUECI Annualized Cap 153,981 0.31 BUECI Annualized Cap =: 973,870 0.029 BUECI O&M 514,819 1.05 BUECIO&M 1,416,802 0.042 Total 2,727,949 5.58 Total Cost of Electricity 4,992,743 0.149 Allocation to BUECI: Dollars $/Mef Total Allocated Costs: 4,840,900 4.21 | Total Payments for Gas: [Total Payments for Electricity: Consumer Payments 775,312 1.58 Consumer Payments (net) 1,906,219 0.057 BUECI Payment 369,166 0.32 Interst Income 926,378 1.89 Interst Income 1,170,630 0.035 Interest Revenues 2,177,841 1.89 | NSB Gas Production Subsi: 975,742 1.99 NSB Gas Production Subsidy 1,219,243 0.036 NSB Subsidyto BUEC] 2,293,892 1.99 Other NSB Subsidy 50,518 0.10 Other NSB Subsidy 696,651 0.021 Total Revenue/Subsidy 2,727,949 5.58 Total Revenue/Subsidy 4,992,743 0.149 Quantity Sold: Mcf Quantity Sold: kWh Allocation to Others: Total 489,170 Total 33,602,859 Portion of Total Costs 399,900 4.21 Residential 167,862 Residential 5,975,803 Commercial 187,566 Commercial 15,850,767 Payment for Gas 58,224 0.61 School District 63,891 Other 11,776,289 Interest Revenues 179,909 1.89 Quantity Fuel Used (Mcf) 618,146 Mcf NSB Subsidy to Others 161,768 1.70 Allocation of Cost to Residential Sales: Allocation of Costs to Residential Sales: Total Cost 936,115 5.58 Total Cost 887,890 0.149 Consumer Payments 319,203 1.90 Consumer Payments 482,493 0.081 Interst Income 317,893 1.89 Interst Income 208,180 0.035 NSB Gas Production Subsi- 331,094 1.97 | NSB Gas Production Subsidy 216,825 0.036 NSB Subsidy (BUEC! Profit (32,075) -0.19| NSB Subsidy (BUECI Profit) (19,608) —0.003 Total Payments 936,115 5.58 Total Payments 887,890 0.149 Allocation of Costs to Commercial Sales: (Allocation of Costs to Commercial Sales: Total Cost 1,045,995 5.58 Total Cost 2,355,121 0.149 Consumer Payments 319,415 1.70 Consumer Payments 1,009,921 0.064 Interst Income 355,207 1.89 Interst Income 567,500 0.036 NSB Gas Production Subs. 369,958 1.97] NSB Gas Production Subs. 459,383 0.029 Other NSB Subsidy 1,415 0.01 Other NSB Subsidy 318,317 0.020 Total Payments 1,045,995 5.58 Total Payments 2,355,121 0.149 Allocation of Costs to School Dist. Sales: Total Cost 356,300 5.58 Price 86,677 1.36 Interst Income 120,995 1.89 NSB Gas Production Subs. 126,020 1.97 Other NSB Subsidy 22,609 0.35 Total Payments 5.58 Notes: (0) Data are for Calendar year 1990. Some estimation necessary to reconcile NSB fiscal year data with BUECI calendar year data. (1) Includes capital costs incurred from 1985 through completion of Walakpa project. 15 year life for development of South and East field, 35 yr life on Walakpa cay, (2) 15 yr life assumed on utility plant (3) 15 yr life assumed on utility plant B-6 ASCG NSB ALtemative Energy Project BRW_SUBS.WK3 28—Jun- BUECI cost data are from monthly operating reports and from BUECI printouts of annual sales and revenue totals. Capital investments completed by the Borough for natural gas distribution’ are amortized over 15 years at a 5% real interest rate. Gas and electric sales are allocated to residential and commercial classes, showing the different level of subsidies each receives. VILLAGES OVERVIEW Combined village energy costs are presented in Table B.2. Individual village data is provided in Tables B.3 through B.9. The Borough subsidizes home heating in the villages by supplying the village corporations with residential fuel oil free of charge. In theory, homeowners pay only enough to cover the village corporations’ distribution costs. The Borough also pays the costs of capital improvements for diesel storage and electric generation and distribution. Finally, the State PCE program pays about 10 cents/kWh for the first 750 kWh per month consumed by each household, and for some commercial electric sales as well. The total cost of home-delivered diesel in the villages ranges from $2.36/gal in the coastal villages to $3.88/gal in Anaktuvuk pass, where fuel must be flown in. Residents pay a distribution fee ranging from $.75 to $1.50/gal to the village corporations. Electricity costs from $.60 to $1.15/kWh to produce. The state potentially® picks up around 10 cents/kWh for the portion of residential and commercial bills which is PCE-eligible; this is about 90% of residential use and 20% of commercial use. Residents pay between 10.7 and 18.5 cents/kWh, on average. Commercial users use more electricity and thus have more kWh billed at the higher rates per kWh which are charged for higher consumption levels. They pay 25 to 30 cents/kWh on average. 7 Capital investments through 1987 for gas & electric distribution and tank farms throughout the borough were taken from ref [38]; projects completed since then were estimated from the 1985 CIP for the Borough, due to our inability to obtain up-to date information on completed section 13 capital projects in time for inclusion in this report. ®The NSB is currently not receiving PCE payments due to problems with regulatory compliance. We assume that this situation will be corrected soon so that payments will be resumed. B-7 COMPONENTS OF DIESEL COST The Borough contracts for delivered bulk fuel with Eskimos, Inc., who secure barge deliveries from refineries to Point Hope, Point Lay, Wainright, Barrow, and Kaktovik. The Borough reimburses Eskimos, Inc. for its fuel and freight costs, and pays a fixed management fee. Although we have expressed the fixed fee on a per-gallon basis, the total amount does not change depending on actual quantity delivered. The Borough then arranges for diesel to be cat trained from Barrow to Atqasuk one time per year. In addition, there are separate orders for Nuigsut and Anaktuvuk Pass. Fuel is flown from Fairbanks to Anaktuvuk Pass. The Borough builds an ice road each spring from the Kuparuk Industrial Center (KIC) to Nuiqsut, and fuel is either purchased from the topping plant at Kuparuk or trucked to Kuparuk from Fairbanks. In our tables, local distribution costs are assumed to be equal to the price charged residential consumers by the village corporation. This price may not be a completely accurate indication of the real costs of distribution. (For example, in Anaktuvuk pass the same consumer price is charged for residential and commercial fuel, even though the NSB is reimbursing the village corporation only for the cost of residential fuel.) However, it is the best available estimate. The electric utility, school district, and Borough facilities are allocated no distribution costs because of on-site fuel tanks, piping to the main tank farm (in many cases) and the ability to use Borough resources to move fuel. The purchase financing component is the cost of carrying a year’s worth of fuel inventory. If the money hadn’t been spent for fuel, it could be invested and earning interest. The purchase financing costs are calculated using a 5% real interest rate applied to one-half the delivered cost of bulk fuel. The one half factor represents the fact that the average gallon of inventory is held for a six month period. B-8 Table B.2: NSB 7 Villages Energy Costs ASCG NSB Energy Alternatives Project DIESEL COSTS Per Gallon Total Residential Electric NSB = Schools Comm/Othr Fuel $0.73 $2,331,890 $468,471 $948,733 $282,171 $267,187 $365,330 Freight $0.55 $1,773,424 $324,316 $723,120 $228,741 $174,620 $322,627 Fixed Fee $0.12 $398,451 $79,604 $160,623 $47,398 $44,353 $66,473 Distribution $1.25 $1,469,825 $795,157 $0 $0 $0 $674 668 Purchase Fin. $0.04 $112,594 $21,810 $45,812 $13,958 $12,154 $18,861 Cap Storage $0.21 $679,791 $129,424 $274,523 $91,480 $72,593 $111,771 Vil Fuel Prog $0.14 $446,202 $90,170 $182,020 $54,761 $51,683 $67,568 | Total Cost $7,212,177 $1,908,951 $2,334,831 $718,508 $622,590 $1,627,298 # gals 3,202,350 638,225 1,291,417 378,979 356,288 537,441 Total Cost per gallon $2.25 $2.99 $1.81 $1.90 $1.75 $3.03 ESTIMATED ALLOCATION OF COST Total Residential Electric NSB = Schools Comm/Othr Consumer Purchases $1,918,484 $670,248 $1,248,236 Federal Assistance $124,908 $124,908 NSB Fuel Purchase $3,749,335 $872,391 $1,832,476 $558,309 $486,160 NSB Fuel Handling $1,238,587 $241 403 $502,355 $160,199 $136,431 $198,199 Other Subsidy $180,862 $180,862 Total Payments $7,212,177 $1,908,951 $2,334,831 $718,508 $622,590 $1,627,298 ESTIMATED ALLOCATION OF COSTS PER AVERAGE GALLON USED Consumer Purchases $0.60 $1.05 $2.32 Federal Assistance $0.04 $0.20 NSB Fuel Purchase $1.17 $1.37 $1.42 $1.47 $1.36 NSB Fuel Handling $0.39 $0.38 $0.39 $0.42 $0.38 $0.37 Other Subsidy $0.06 $0.34 Total Payments $2.25 $2.99 $1.81 $1.90 $1.75 $3.03 Avg Residential Price $1.25 Avg Commercial Price $2.32 Average Avoidable Cost $2.17 $1.42 ELECTRICITY Commercial COSTS Per kWh Total Residential (includes gov't) Other Fuel Cost $0.176 $2,334,831 $548,918 $1,059,602 $726,311 Variable O & M $0.010 $132,607 $31,580 $59,910 $41,117 Plant Labor $0.188 $2,490,895 $570,882 $1,162,181 $757,832 Fixed O&M $0.012 $153,704 $34,451 $72,568 $46,685 Admin. Overhead $0.034 $454,361 $104,201 $211,811 $138,349 Capital Investment $0.423 $5,605,096 $1,312,002 $2,569,726 $1,723,367 Total $11,171,494 $2,602,034 $5,135,798 $3,433,662 Total Use (kWh) 13,260,700 3,158,000 5,991,000 4,111,700 Total Cost per kWh $0.842 $0.824 $0.857 $0.835 Commercial ESTIMATED ALLOCATION OF COST Total Residential (includes gov't) Other Consumer Purchases $2,300,000 389,000 1,577,000 334,000 State of AK PCE $442,538 269,912 172,626 NSB Subsidy $8,428,956 $1,943,122 $3,386,172 $3,099 662 Total Payments $11,171,494 $2,602,034 $5,135,798 $3,433,662 ESTIMATED ALLOCATION OF COSTS per kWh USED Consumer Purchases $0.173 $0.123 $0.263 $0.081 State of AK PCE $0.033 $0.085 $0.029 NSB Subsidy $0.636 $0.615 $0.565 $0.754 Total Payments per kWh $0.842 $0.824 $0.857 $0.835 7VIL B-9 Diesel$4.wk3 04~Apr—92 Capital storage costs are the average annual costs when all the appropriate capital improvements are amortized at a 5% real interest rate over 15 years. The village fuel program component is the average administrative cost of the village fuel program allocated to the villages in proportion to the amount of fuel they use. In Nuiqsut, the estimated cost of the ice road’? is also included here. The quantity of diesel used, in total and by each type of user, was estimated from NSB Diesel Recaps, with some information from the School District and the Department of Municipal Services (DMS) electric utility monthly summaries. Data on commercial/other usage is the least reliable since it was estimated as a residual quantity, and commercial deliveries do not have to be recorded in diesel recap reports. DIESEL PAYMENTS Consumer payments are estimated as (total gallons sold) times (price) minus federal assistance. Village corporation prices are taken from the North Slope Borough Semi-Annual Economic Profile (ref [31]). Federal energy assistance is reported separately from residential consumer payments. NSB fuel payments (fuel, freight and fixed fee components) are allocated on a per gallon basis to residential, electric utility, schools, and other NSB government user groups," but not to commercial/other users. The other major NSB subsidy components -- purchasing finance, capital storage, and the village fuel program administration -- are allocated to all users. We report a final, residual, category of payments necessary to balance total payments with total costs. This is the difference between the estimated total costs of fuel for commercial/other users ' The ice road costs about $50,000 for salaries, fuel, supplies and parts, and another $50,000 in capital costs of equipment (which the borough owns), per Forrest Olemaun, NSB Village Fuel Program. We have allocated to fuel costs only the avoidable $50,000, since the borough would own the equipment needed to build the road whether or not it was built. No money was formally budgeted for the ice road in the FY92 budget ordinance. Ut is extremely difficult to trace the intergovernmental payments from NSB operating departments to the Village Fuel program. Certainly DMS and the NSB School District make direct payments. Of course, these interdepartmental transfers do not affect the overall costs of energy to the NSB. B-10 and total payments by this group. In most villages this difference is positive, suggesting that perhaps commercial users are not paying their full costs even after allowing for the fact that the NSB subsidizes storage. It is unclear who is paying this difference."* In two villages the difference is negative, suggesting that perhaps revenues from commercial users are contributing to village corporation profits beyond the "normal" level provided for by distribution charges. The data on commercial use and costs are too poor to support any conclusions about this issue, however. ELECTRIC COSTS Fuel cost for electric generation in the villages is developed in the "Electric" column of the top (diesel) panels of Tables B.3 through B.9. The remaining cost components of the electric system are addressed in the bottom panels. Variable operations and maintenance is assumed to be 1 cent/kWh in all villages'®. Fixed operations and maintenance is calculated as the remainder of the average DMS budget across FY 1988 to FY 1992 for each village’s electric utility. By far the largest component of this is plant labor, which has comprised 75% to 90% of total operations and maintenance (excluding fuel) in every village from FY 88 onward. Administrative overhead is a portion of the cost of the DMS central office. The central office budget was allocated among its divisions according to the size of each division’s budget; the portion allocated to the Village Services Division was further allocated to each village, and then to the light and power activity within each village. Capital investment (again) is the cost of capital spending for electric generation and distribution plant amortized over 15 years at 5% real interest. - One possibility is that residential distribution charges are higher than costs and used to subsidize the commercial price. This seems to be the case in Anaktuvuk Pass, where the commercial and residential consumer price appears to be the same, even though the residential price is only supposed to reflect distribution costs while the commercial price is supposed to reflect the full cost of fuel plus distribution costs. In other cases the actual costs of distribution to commercial customers may be lower than for residential, but we have assumed them to be equal due to lack of data on true costs. This difference in actual costs could explain the calculated residual payments. BISER estimate; based on analysis by ISER and Analysis North of detailed costs of other rural Alaska power plants, modified by the NSB DMS budget for the plants we are considering. B-11 ELECTRIC PAYMENTS AND USE All per-unit electricity costs and payments are calculated on the basis of total use. Total use means kilowatt-hours actually consumed by an identifiable user to provide a service, such as lighting. Total use excludes the economically useless kWh lost during generation (station service) and distribution (line losses). We have estimated total use by carefully reviewing monthly meter reading reports. Much of what was thought to be "line losses" during the late 1980s was actually unmetered use. It is important to calculate costs, payments, and subsidies per kWh on the basis of actual use rather than gross physical power generation, because actual use represents the total amount of final, useful output from the electric system. No one can be billed for a kWh of "line loss." Residential and Commercial sales are those reported in Alaska Electric Power Statistics and monthly PCE filings. Other use is total use - residential - commercial. Thus, the Other category includes a few "other" customers paying for electricity and a large number of kWh provided directly to DMS facilities such as water plants and street lights. PCE payments are reported by the Alaska Energy Authority (ref [37,41]). Per kWh PCE amounts are the average over all kWh, not merely PCE eligible kWh. B-12 Table B.3: Wainwright Energy Costs ASCG NSB Energy Alternatives Project DIESEL COSTS Per Galion Total Residential Electric NSB Schools Comm/Othr Fuel $0.66 $467,209 $103,006 $173,666 $48,268 $49,493 $92,777 Freight $0.44 $312,865 $68,977 $116,295 $32,323 $33,143 $62,128 Fixed Fee $0.13 $89,137 $19,652 $33,133 $9,209 $9,443 $17,701 Distribution $1.40 $415,359 $218,530 $0 $0 $0 $196,829 Purchase Fin. $0.03 $21,730 $4,791 $8,077 $2,245 $2,302 $4,315 Cap Storage $0.18 $127,110 $28,024 $47,248 $13,132 $13,465 $25,241 Vil Fuel Prog $0.12 $87,595 $19,312 $32,560 $9,050 $9,279 $17,394 Total Cost $1,521,006 $462,293 $410,979 $114,227 $117,124 $416,384 # gals 708,000 156,093 263,170 73,145 75,000 140,592 Total Cost per galion $2.15 $2.96 $1.56 $1.56 $1.56 $2.96 ESTIMATED ALLOCATION OF COST Total Residential Electric NSB = Schools Comm/Othr Consumer Purchases $597,156 $200,686 $396,469 Federal Assistance $17,844 $17,844 NSB Fuel Purchase $696,607 $191,635 $323,094 $89,800 $92,078 NSB Fuel Handling $236,435 $52,127 $87,885 $24,427 $25,046 $46,950 Other Subsidy ($27,036) (27,036) Total Payments $1,521,006 $462,293 $410,979 $114,227 $117,124 $416,384 ESTIMATED ALLOCATION OF COSTS PER AVERAGE GALLON USED Consumer Purchases $0.84 $1.29 Federal Assistance $0.03 $0.11 NSB Fuel Purchase $0.98 $1.23 $1.23 $1.23 $1.23 NSB Fuel Handling $0.33 $0.33 $0.33 $0.33 $0.33 $0.33 Other Subsidy ($0.04) ($0.19)! Total Payments $2.15 $2.96 $1.56 $1.56 $1.56 $2.96 Residential Price $1.40 Commercial Price $2.82 Avoidable Cost | ELECTRICITY Commercial COSTS Per kWh Total Residential (includes gov't) Other FuelCost $0.137 $410,979 $90,629 $141,419 $178,931 Variable O & M $0.010 $30,020 $6,620 $10,330 $13,070 Plant Labor $0.116 $347,831 $76,704 $119,690 $151,437 Fixed O&M $0.011 $32,824 $7,238 $11,295 $14,291 Admin. Overhead $0.022 $67,188 $14,816 $23,120 $29,252 Capital Investment $0.306 $920,078 $202,895 $316,602 $400,580 Total $1,808,920 $398,902 $622,456 $787,561 Total Use (kWh) 3,002,000 662,000 1,033,000 1,307,000 Total Cost per kWh $0.603 $0.603 $0.603 $0.603 Commercial ESTIMATED ALLOCATION OF COST Total Residential (includes gov't) Other Consumer Purchases $468,000 $77,000 $263,000 $128,000 State of AK PCE $89,514 $50,906 $38,608 NSB Subsidy $1,251,406 $270,996 $320,848 $659,561 Total Payments $1,808,920 $398 902 $622,456 $787,561 ESTIMATED ALLOCATION OF COSTS per kWh USED Consumer Purchases $0.156 $0.116 $0.255 $0.098 State of AK PCE $0.030 $0.077 $0.037 NSB Subsidy $0.417 $0.409 $0.311 $0.505 Total Payments per kWh $0.603 $0.603 $0.603 $0.603 AIN B-13 Diesel$4.wk3 04—Apr—92 Table B.4: Anaktuvuk Pass Energy Costs DIESEL COSTS Per Galion Total Residential Electric NSB Schools Comm/Othr Fuel $0.73 $273,375 $43,297 $113,752 $18,267 $29,160 $68,900 Freight $0.92 $346,125 $54,819 $144,023 $23,128 $36,920 $87,235 Fixed Fee $0.11 $42,488 $6,729 $17,679 $2,839 $4,532 $10,708 Distribution $1.50 $230,858 $89,088 $0 9 $0 $141,770 Purchase Fin. $0.04 $16,550 $2,621 $6,886 $1,106 $1,765 $4,171 Cap Storage $0.18 $66,437 $10,522 $27,645 $4,439 $7,087 $16,744 Vil Fuel Prog $0.12 $46,396 $7,348 $19,305 $3,100 $4,949 $11,693 Total Cost $1,022,228 $214,424 $329,290 $52,878 $84,413 $341,222 # gals 375,000 59,392 156,038 25,057 40,000 94,513 Total Cost per gallon $2.73 $3.61 $2.11 $2.11 $2.11 $3.61 ESTIMATED ALLOCATION OF COST Total Residential Electric NSB = Schools Comm/Othr Consumer Purchases $213,013 $71,244 $141,770 Federal Assistance $17,844 $17,844 NSB Fuel Purchase $495,144 $104,845 $275,454 $44,233 $70,612 NSB Fuel Handling $129,383 $20,491 $53,836 $8,645 $13,801 $32,609 Other Subsidy $166,844 166,844 Total Payments $1,022,228 $214,424 $329,290 $52,878 $84,413 $341,222 ESTIMATED ALLOCATION OF COSTS PER AVERAGE GALLON USED Consumer Purchases $0.57 $1.20 $1.50 Federal Assistance $0.05 $0.30 NSB Fuel Purchase $1.32 $1.77 $1.77 $1.77 $1.77 NSB Fuel Handling $0.35 $0.35 $0.35 $0.35 $0.35 $0.35 Other Subsidy $0.44 $1.77 Total Payments $2.73 $3.61 $2.11 $2.11 $2.11 $3.61 Residential Price $1.50 Commercial Price $1.50 | ELECTRICITY Commercial COSTS Per kWh Total Residential (includes gov't) Other FuelCost $0.212 $329,290 $80,599 $188,135 $60,555 Variable O &M $0.010 $15,525 $3,800 $8,870 $2,855 Plant Labor $0.215 $334,089 $81,774 $190,877 $61,438 Fixed O&M $0.016 $24,457 $5,986 $13,973 $4,498 Admin. Overhead $0.039 $61,199 $14,980 $34,965 $11,254 Capital Investment $0.448 $696,135 $170,391 $397,728 $128,017 Total $1,460,696 $357,529 $834,549 $268,617 Total Use (kWh) 1,552,500 380,000 887,000 285,500 Total Cost per kWh $0.941 $0.941 $0.941 $0.941 Commercial ESTIMATED ALLOCATION OF COST Total Residential (includes gov't) Other Consumer Purchases $312,000 $43,000 $267,000 $2,000 State of AK PCE $51,354 $31,502 $19,852 NSB Subsidy $1,097,342 $283,027 $547,697 $266,617 Total Payments $1,460,696 $357,529 $834,549 $268,617 ESTIMATED ALLOCATION OF COSTS per kWh USED Consumer Purchases $0.201 $0.113 $0.301 $0.007 State of AK PCE $0.033 $0.083 $0.022 NSB Subsidy $0.707 $0.745 $0.617 $0.934 Total Payments per kWh $0.941 $0.941 $0.941 $0.941 AKP B-14 ASCG NSB Energy Alternatives Project Diesel$4.wk304—Apr—92 Table B.5 Atqasuk Energy Costs ASCG NSB Energy Alternatives Project DIESEL COSTS Per Gallon Total Residential Electric NSB = Schools Comm/Othr Fuel $0.66 $247,463 $33,515 $108,605 $56,757 $13,198 $35,38E Freight $1.23 $460,650 $62,388 $202,168 $105,652 $24,568 $65,874 Fixed Fee $0.13 $47,213 $6,394 $20,720 $10,828 $2,518 $6,752 Distribution $1.30 $135,738 $66,024 $0 $0 $0 $69,714 Purchase Fin. $0.05 $18,883 $2,557 $8,287 $4,331 $1,007 $2,700 Cap Storage $0.39 $146,265 $19,809 $64,192 $33,546 $7,801 $20,916 Vil Fuel Prog $0.12 $46,396 $6,284 $20,362 $10,641 $2,474 $6,635 Total Cost $1,102,607 $196,972 $424,334 $221,756 $51,566 $207,979 # gals 375,000 50,788 164,578 86,008 20,000 53,626 Total Cost per gallon $2.94 $3.88 $2.58 $2.58 $2.58 $3.88 ESTIMATED ALLOCATION OF COST Total Residential Electric NSB = Schools Comm/Othr Consumer Purchases $195,652 $48,180 $147,472 Federal Assistance $17,844 $17,844 NSB Fuel Purchase $647,312 $102,297 $331,493 $173,237 $40,284 NSB Fuel Handling $211,543 $28,650 $92,841 $48,518 $11,282 $30,251 Other Subsidy $30,256 30,256 Total Payments $1,102,607 $196,972 $424,334 $221,756 $51,566 $207,979 ESTIMATED ALLOCATION OF COSTS PER AVERAGE GALLON USED Consumer Purchases $0.52 $0.95 $2.75 Federal Assistance $0.05 $0.35 NSB Fuel Purchase $1.73 $2.01 $2.01 $2.01 $2.01 NSB Fuel Handling $0.56 $0.56 $0.56 $0.56 $0.56 $0.56 Other Subsidy $0.08 $0.56 Total Payments $2.94 $3.88 $2.58 $2.58 $2.58 $3.88 Residential Price $1.30 Commercial Price $2.75 | ELECTRICITY Commercial COSTS Per kWh Total Residential (includes gov't) Other FuelCost $0.251 $424,334 $81,805 $156,334 $186,195 Variable O & M $0.010 $16,910 $3,260 $6,230 $7,420 Plant Labor $0.198 $334,274 $64,443 $123,154 $146,677 Fixed O&M $0.008 $13,837 $2,668 $5,098 $6,072 Admin. Overhead $0.035 $59,719 $11,513 $22,002 $26,204 Capital Investment $0.414 $699,903 $134,931 $257,859 $307,113 Total $1,548,977 $298,620 $570,676 $679,681 Total Use (kWh) 1,691,000 326,000 623,000 742,000 Total Cost per kWh $0.916 $0.916 $0.916 $0.916 Commercial ESTIMATED ALLOCATION OF COST Total Residential (includes gov't) Other Consumer Purchases $239,000 $54,000 $156,000 $29,000 State of AK PCE $50,900 $28,884 $22,016 NSB Subsidy $1,259,077 $215,736 $392,659 $650,681 Total Payments $1,548,977 $298,620 $570,676 $679,681 ESTIMATED ALLOCATION OF COSTS per kWh USED Consumer Purchases $0.141 $0.166 $0.250 $0.039 State of AK PCE $0.030 $0.089 $0.035 NSB Subsidy $0.745 $0.662 $0.630 $0.877 Total Payments per kWh $0.916 $0.916 $0.916 $0.916 ATQ B-15 Diesel$4.wk304—Apr—92 Table B.6: Kaktovik Energy Costs ASCG NSB Energy Alternatives Project DIESEL COSTS Per Gallon Total Residential Electric NSB Schools Comm/Othr Fuel $0.66 $322,691 $61,254 $96,892 $46,984 $39,594 $77,967 Freight $0.44 $216,089 $41,018 $64,884 $31,462 $26,514 $52,210 Fixed Fee $0.13 $61,565 $11,686 $18,486 $8,964 $7,554 $14,875 Distribution $0.75 $158,230 $69,617 $0 $0 $0 $88,613 Purchase Fin. $0.03 $15,009 $2,849 $4,507 $2,185 $1,842 $3,626 Cap Storage $0.23 $113,471 $21,539 $34,071 $16,521 $13,923 $27,416 Vil Fuel Prog $0.12 $60,500 $11,484 $18,166 $8,809 $7,423 $14,618 Total Cost $947,555 $219,449 $237,006 $114,925 $96,850 $279 326 # gals 489,000 92,823 146,829 71,198 60,000 118,150 Total Cost per gallon $1.94 $2.36 $1.61 $1.61 $1.61 $2.36 ESTIMATED ALLOCATION OF COST Total Residential Electric NSB = Schools Comm/Othr Consumer Purchases $323,518 $51,773 $271,745 Federal Assistance $17,844 $17,844 NSB Fuel Purchase $455,293 $113,959 $180,262 $87,410 $73,662 NSB Fuel Handling $188,980 $35,873 $56,744 $27,515 $23,188 $45,660 Other Subsidy ($38,080) (38,080)| Total Payments $947,555 $219,449 $237,006 $114,925 $96,850 $279,326 ESTIMATED ALLOCATION OF COSTS PER AVERAGE GALLON USED Consumer Purchases $0.66 $0.56 Federal Assistance $0.04 $0.19 NSB Fuel Purchase $0.93 $1.23 $1.23 $1.23 $1.23 NSB Fuel Handling $0.39 $0.39 $0.39 $0.39 $0.39 $0.39 Other Subsidy ($0.08) ($0.32)| Total Payments $1.94 $2.36 $1.61 $1.61 $1.61 $2.36 Residential Price $0.75 Commercial Price $2.30 | ELECTRICITY Commercial COSTS Per kWh Total Residential (includes gov't) Other Fuel Cost $0.169 $237,006 $41,918 $98,710 $96,378 Variable O & M $0.010 $14,022 $2,480 $5,840 $5,702 Plant Labor $0.262 $367,907 $65,070 $153,229 $149,608 Fixed O&M $0.010 $14,127 $2,499 $5,884 $5,745 Admin. Overhead $0.046 $64,796 $11,460 $26,987 $26,349 Capital Investment $0.660 $924,876 $163,578 $385,200 $376,098 Total $1,622,733 $287,005 $675,849 $659,879 Total Use (kWh) 1,402,200 248,000 584,000 570,200 Total Cost per kWh $1.157 $1.157 $1.157 $1,157 Commercial ESTIMATED ALLOCATION OF COST Total Residential (includes gov't) Other Consumer Purchases $230,000 $46,000 $168,000 $16,000 State of AK PCE $45,512 $29,778 $15,734 NSB Subsidy $1,347,221 $211,227 $492,115 $643,879 Total Payments $1,622,733 $287,005 $675,849 $659,879 ESTIMATED ALLOCATION OF COSTS per kWh USED Consumer Purchases $0.164 $0.185 $0.288 $0.028 State of AK PCE $0.032 $0.120 $0.027 NSB Subsidy $0.961 $0.852 $0.843 $1.129 Total Payments per kWh $1.157 $1.157 $1.157 $1.157 KAK B-16 Diesel$4.wk304—Apr—92 Table B.7: Nuigsut Energy Costs ASCG NSB Energy Alternatives Project DIESEL COSTS Per Gallon Total Residential Electric NSB = Schools Comm/Othr Fuel- $1.19 $432,690 $96,983 $192,484 $68,133 $65,793 $9,297 Freight- $0.12 $43,633 $9,780 $19,410 $6,871 $6,635 $938 Fixed Fee~ $0.13 $45,778 $10,261 $20,364 $7,208 $6,961 $984 Distribution $1.00 $89,311 $81,498 $0 $0 $0 $7,813 Purchase Fin- $0.04 $13,053 $2,926 $5,806 $2,055 $1,985 $280 Cap Storage~ $0.17 $61,437 $13,770 $27,330 $9,674 $9,342 $1,320 VilFuelProgy- $0.26 $94,986 $21,290 $42,255 $14,957 $14,443 $2,041 Total Cost $780,887 $236 507 $307,650 $108,899 $105,158 $22,673 # gals 363,605 81,498 161,751 57,255 55,288 7,813 Total Cost per gallon $2.15 $2.90 $1.90 $1.90 $1.90 $2.90 ESTIMATED ALLOCATION OF COST Total Residential Electric NSB = Schools Comm/Othr Consumer Purchases $79,280 $63,654 $15,626 Federal Assistance $17,844 $17,844 NSB Fuel Purchase $510,882 $117,023 $232,258 $82,212 $79,388 NSB Fuel Handling $169,475 $37,986 $75,392 $26,686 $25,770 $3,642 Other Subsidy $3,406 3,406 Total Payments $780,887 $236 507 $307,650 $108,899 $105,158 $22,673 ESTIMATED ALLOCATION OF COSTS PER AVERAGE GALLON USED Consumer Purchases $0.22 $0.78 Federal Assistance $0.05 $0.22 NSB Fuel Purchase $1.41 $1.44 $1.44 $1.44 $1.44 NSB Fuel Handling $0.47 $0.47 $0.47 $0.47 $0.47 $0.47 Other Subsidy $0.01 $0.44 Total Payments $2.15 $2.90 $1.90 $1.90 $1.90 $2.90 Residential Price $1.00 Commercial Price $2.00 | ELECTRICITY Commercial COSTS Per kWh Total Residential (includes gov't) Other FuelCost $0.187 $307,650 $87,339 $139,331 $80,980 Variable O & M $0.010 $16,450 $4,670 $7,450 $4,330 Plant Labor $0.209 $343,405 $97,489 $155,524 $90,392 Fixed O&M $0.013 $22,194 $6,301 $10,051 $5,842 Admin. Overhead $0.038 $62,505 $17,744 $28,308 $16,453 Capital Investment $0.414 $681,180 $193,380 $308,498 $179,301 Total $1,433,383 $406,924 $649,161 $377 ,298 Total Use (kWh) 1,645 000 467,000 745,000 433,000 Total Cost per kWh $0.871 $0.871 $0.871 $0.871 Commercial ESTIMATED ALLOCATION OF COST Total Residential (includes gov't) Other Consumer Purchases $318,000 $52,000 $207,000 $59,000 State of AK PCE $67,195 $38,060 $29,135 NSB Subsidy $1,048,188 $316,864 $413,026 $318,298 Total Payments $1,433,383 $406,924 $649,161 $377,298 ESTIMATED ALLOCATION OF COSTS per kWh USED Consumer Purchases $0.193 $0.111 $0.278 $0.136 State of AK PCE $0.041 $0.081 $0.039 NSB Subsidy $0.637 $0.679 $0.554 $0.735 Total Payments per kWh $0.87 1 $0.871 $0.871 $0.871 NQT B-17 Diesel$4.wk304~Apr—92 Table B.8: Point Hope Energy Costs ASCGNSSB Energy Alternatives Project Diesel$4.wk304—Apr—92 DIESEL COSTS Per Gallon Total Residential Electric NSB = Schools 9 Comm/Othr Fuel $0.66 $422,960 $97,831 $188,435 $22,068 $43,553 $71,072 Freight $0.44 $283,234 $65,512 $126,185 $14,778 $29,165 $47,593 Fixed Fee $0.13 $80,695 $18,665 $35,951 $4,210 $8,309 $13,560 Distribution $1.40 $358,333 $207,551 $0 $0 $0 $150,781 Purchase Fin. $0.03 $19,672 $4,550 $8,764 $1,026 $2,026 $3,306 Cap Storage $0.15 $94,680 $21,900 $42,182 $4,940 $9,750 $15,910 Vil Fuel Prog $0.12 $79,299 $18,342 $35,329 $4,138 $8,166 $13,325 Total Cost $1,338,873 $434,351 $436,846 $51,161 $100,969 $315,546 # gals 640,945 148,251 285,551 33,442 66,000 107,701 Total Cost per gallon $2.09 $2.93 $1.53 $1.53 $1.53 $2.93 ESTIMATED ALLOCATION OF COST Total Residential Electric NSB = Schools Comm/Othr Consumer Purchases $432,035 $189,707 $242,327 Federal Assistance $17,844 $17,844 NSB Fuel Purchase $654,664 $182,008 $350,571 $41,057 $81,028 NSB Fuel Handling $193,652 $44,792 $86,275 $10,104 $19,941 $32,540 Other Subsidy $40,679 40,679 Total Payments $1,338,873 $434,351 $436,846 $51,161 $100,969 $315,546 ESTIMATED ALLOCATION OF COSTS PER AVERAGE GALLON USED Consumer Purchases $0.67 $1.28 Federal Assistance $0.03 $0.12 NSB Fuel Purchase $1.02 $1.23 $1.23 $1.23 $1.23 NSB Fuel Handling $0.30 $0.30 $0.30 $0.30 $0.30 $0.30 Other Subsidy $0.06 $0.38 Total Payments $2.09 $2.93 $1.53 $1.53 $1.53 $2.93 Residential Price $1.40 Commercial Price $2.25 | ELECTRICITY Commercial COSTS Per kWh Total Residential (includes gov't) Other Fuel Cost $0.151 $436,846 $135,261 $223,776 $77,809 Variable O & M $0.010 $28,970 $8,970 $14,840 $5,160 Plant Labor $0.141 $408,049 $126,344 $209,025 $72,680 Fixed O&M $0.005 $14,435 $4,470 $7,395 $2,571 Admin. Overhead $0.025 $73,860 $22,869 $37,835 $13,156 Capital Investment $0.402 $1,165,195 $360,780 $596,876 $207,539 Total $2,127,355 $658,694 $1,089,746 $378,914 Total Use (kWh) 2,897,000 897,000 1,484,000 516,000 Total Cost per kWh $0.734 $0.734 $0.734 $0.734 Commercial ESTIMATED ALLOCATION OF COST Total Residential (includes gov't) Other Consumer Purchases $517,000 $96,000 $354,000 $67,000 State of AK PCE $106,270 $75,192 $31,078 NSB Subsidy _ $1,504,085 $487,502 $704,668 $311,914 Total Payments $2,127,355 $658,694 $1,089,746 $378,914 ESTIMATED ALLOCATION OF COSTS per kWh USED Consumer Purchases $0.178 $0.107 $0.239 $0.130 State of AK PCE $0.037 $0.084 $0.021 NSB Subsidy $0.519 $0.543 $0.475 $0.604 Total Payments per kWh $0.734 $0.734 $0.734 $0.734 PHO B-18 Table B.9: Point Lay Energy Costs ASCG NSB Energy Alternatives Project DIESEL COSTS Per Gallon Total Residential Electric NSB = Schools Comm/Othr Fuel $0.66 $165,503 $32,586 $74,899 $21,694 $26,396 $9,929 Freight $0.44 $110,829 $21,821 $50,156 $14,527 $17,676 $6,649 Fixed Fee $0.13 $31,576 $6,217 $14,290 $4,139 $5,036 $1,894 Distribution $1.27 $81,997 $62,847 $0 $0 $0 $19,149 Purchase Fin. $0.03 $7,698 $1,516 $3,484 $1,009 $1,228 $462 Cap Storage $0.28 $70,392 $13,859 $31,856 $9,227 $11,227 $4,223 Vil Fuel Prog $0.12 $31,030 $6,109 $14,042 $4,067 $4,949 $1,862 Total Cost $499,023 $144,955 $188,726 $54,662 $66,511 $44,168 # gals 250,800 49,380 113,500 32,874 40,000 15,046 Total Cost per gallon $1.99 $2.94 $1.66 $1.66 $1.66 $2.94 ESTIMATED ALLOCATION OF COST Total Residential Electric NSB Schools Comm/Othr Consumer Purchases $77,831 $45,003 $32,828 Federal Assistance $17,844 $17,844 NSB Fuel Purchase $289,435 $60,624 $139,344 $40,359 $49,108 NSB Fuel Handling $109,119 $21,484 $49,382 $14,303 $17,403 $6,546 Other Subsidy $4,794 4,794 Total Payments $499,023 $144,955 $188,726 $54,662 $66,511 $44,168 ESTIMATED ALLOCATION OF COSTS PER AVERAGE GALLON USED Consumer Purchases $0.31 $0.91 Federal Assistance $0.07 $0.36 NSB Fuel Purchase $1.15 $1.23 $1.23 $1.23 $1.23 NSB Fuel Handling $0.44 $0.44 $0.44 $0.44 $0.44 $0.44 Other Subsidy $0.02 $0.32 Total Payments $1.99 $2.94 $1.66 $1.66 $1.66 $2.94 Residential Price $1.27 Commercial Price $2.18 | ELECTRICITY Commercial COSTS Per kWh Total Residential (includes gov't) Other FuelCost $0.176 $188,726 $31,366 $111,896 $45,463 Variable O & M $0.010 $10,710 $1,780 $6,350 $2,580 Plant Labor $0.332 $355,340 $59,057 $210,682 $85,600 Fixed O&M $0.030 $31,830 $5,290 $18,872 $7,668 Admin. Overhead $0.061 $65,095 $10,819 $38,595 $15,681 Capital Investment $0.483 $517,730 $86,047 $306,964 $124,719 Total $1,169,431 $194,359 $693,360 $281,712 Total Use (kWh) 1,071,000 178,000 635,000 258,000 Total Cost per kWh $1,092 $1,092 $1.092 $1.092 Commercial ESTIMATED ALLOCATION OF COST Total Residential (includes gov't) Other Consumer Purchases $216,000 $21,000 $162,000 $33,000 State of AK PCE $31,793 $15,591 $16,202 NSB Subsidy $921,638 $157,768 $515,158 $248,712 Total Payments $1,169,431 $194,359 $693,360 $281,712 ESTIMATED ALLOCATION OF COSTS per kWh USED Consumer Purchases $0.202 $0.118 $0.255 $0.128 State of AK PCE $0.030 $0.088 $0.026 NSB Subsidy $0.861 $0.886 $0.811 $0.964 Total Payments per kWh $1,092 $1.092 $1.092 $1.092 PIZ B-19 Diesel$4.wk304—Apr—92 APPENDIX C Subsistence In-Camp Fuel Use APPENDIX C. SUBSISTENCE IN-CAMP FUEL USE IN THE NORTH SLOPE BOROUGH! OVERVIEW In this appendix we discuss the types and the amounts of fuels used by North Slope Borough (NSB) residents in subsistence camps. We considered the fuel used for cooking, heating, and lighting, but not transportation. The data in this section was collected in a case study format by use of personal interviews. The information collected gives some indication of which types of fuels are the most economical for subsistence camp use. Presently, the people interviewed in this study use eight different types of fuel in subsistence camps: propane, white gas”, unleaded gasoline, kerosene, diesel, natural gas, driftwood, and coal. The interviewees tend to be using white gas and kerosene which are two of the most expensive fuels that can be purchased in the NSB. The data indicates that people would be better off switching from white gas and kerosene to propane, unleaded gasoline, and diesel, which are more cost-effective fuels in terms of energy provided per dollar of cost. ORGANIZATION The first section of this appendix discusses the method of collecting the data. The second section discusses the general use of fuel. The third section discuss the uses of fuel in different subsistence activities. The fourth section examines the potential savings from using unleaded gasoline. The fifth section is a summary of appendix C. The sixth section makes suggestions for future research on the in-camp subsistence use of energy. The seventh section discusses the limitations of the data collected in Tables C-7 though C-13. 'This appendix was prepared by Richard Geiger of ISER 2 Many interviewees called white gas by the name of Blazo and Coleman Fuel which are trade names. C-1 DATA COLLECTION In order to collect the data on fuel use in subsistence camps, we flew to Barrow and Wainwright at the beginning of February 1992 and interviewed 15 people”. The fuel use data was collected for a one year period starting the end of November of 1990 and ending the fall of 1991. Eleven of the fifteen people interviewed are active whaling captains who participate in subsistence activities throughout the year. The interviews were conducted in an informal fashion by sitting down with people and asking them questions about whaling, goose hunting, summer, fall, and winter subsistence activities. The fuel use data has been compiled by subsistence activity in the Tables C-7 though C-13. GENERAL DISCUSSION OF FUEL USE There are eight different types of fuel that are used in subsistence camps: propane, white gas, unleaded gasoline, kerosene, natural gas, diesel, driftwood and coal. The general recognition of the positive and negative attributes of the eight different fuels can be summarized as follows (see Table C-1). Propane is easy to use since the bottles do not require attention other than having them refilled; however, propane is nearly impossible to use in temperatures of 20 to 30 degrees below zero Fahrenheit. White gas stoves are easy to take along on trips and are rugged, but the fuel is expensive. Unleaded gasoline has the same qualities as white gas, but it is less expensive and can be used in ATVs, snowmobiles, and outboard motors. Kerosene is a fuel that is not affected by cold temperatures; nevertheless, it is an expensive fuel and emits an unpleasant odor when burned. Diesel costs less than kerosene, but #1 diesel must be used so it will not gel in cold temperatures. Driftwood and coal have the benefits of being free but ? We could not have possibly interviewed all 15 people in three and a half days without the help. We are grateful to Karen Brewster for setting up interviews and introducing us to people in Barrow, and Frances Hopson for introducing us to people in Wainwright. Likewise, we would like to thank all the people who spent their time talking to us about their personal uses of fuel. C-2 they require time to collect. Table C-2 summarizes what fuels were used for cooking, heating, and lighting. In addition, Table C-2 includes information on the estimated prices that whaling captains and the general public paid for the fuels in 1991. The table also includes the Btus per unit of measure and two additional columns on the thousands of Btus per dollar. Table C-23 indicates that propane, white gas, kerosene, and natural gas are much more expensive than unleaded gasoline and diesel. Propane costs $.046 per thousands of Btu, white gas $.048, kerosene $.037, and natural gas $.49. By contrast unleaded gasoline costs $.018 per thousand Btu and diesel costs $.016 per thousand Btu. By burning unleaded gasoline instead of white gas, a person would spend 60 percent less and have about the same Btus per gallon. If a person switched from kerosene to diesel for heating, a person could spend 50 percent less per gallon for the same amount of Btus per gallon. In both cases a person would have to purchase new stoves in order to burn these fuels. A lantern would also have to be purchased in order to utilize unleaded gasoline. Table C-4 shows that overall white gas makes up 42 percent of all Btus used and kerosene is 34 percent of all Btus used. These two fuels together make up 76 percent of all Btus used. The low cost per Btu fuels such as unleaded and diesel make up only 3 percent and 6 percent respectively. Propane which appears to be an efficient burning fuel makes up just 13 percent of the total Btus; however, propane can not be used in the winter because cold temperatures affect it. Table C-3 and Figure C-1 show the average Btus per person per day. Table C-6 shows that overall white gas makes up 49 percent of ‘all dollars spent and kerosene is 29 percent of all dollars spent. These fuels together make up 78 percent of all dollars spent. The low cost fuels such as unleaded and diesel each make up 2 percent of the expenditures. Propane which appears to be an efficient burning fuel makes up just 16 percent the overall cost. Table C-5 and Figure C-2 show the average expenditures per person per day. 3 The cost per BTU does not take into account how efficiently the fuel can be burned in a cook stove, heater, or lantern. C-3 Table C -1 Positive and Negative Attributes of the 8 Different Fuels 1. Easy to use once set up 1. Transportation of heavy bottles 2. Burns for along time without needing attention | 2. Affected by cold temperature of 20 to 30 3. More economical than white gas degree below zero Fahrenheit 3. Needs more maintenance than white gas stoves 1. Fuel is expensive 2. Fuel has been hard to get in Barrow 3. Stove needs to be pumped up every few of hours to keep pressure in the fuel tank 1. Stove needs to be pumped up every few of hours to keep the pressure in the tank 1. Stoves are rugged 2. Stoves are easy to take along on trips 3. Fuel is easy to store 1. Stoves are rugged 2. Stoves are easy to take along on trips 3. Fuel more convenient since ATVs, snowmobiles, and outboard motors use the same fuel 4. Unleaded gasoline is about half the cost of white gas and has about the same BTUs Kerosene 1. Temperature does not effect kerosene much 1. Fuel is expensive 2. Gives off an unpleasant smell when burned 3. Stoves are b and hard to carry around a BTUs in cold temperatures Natural Gas | 1. Inexpensive compared to other Fuels 1. The bottles are heavy to carry around 2. The fuel does not need to be flown in or 2. Gas can only be bought from B.U.E.C.L.® shipped in Driftwood 1. Free 1. Must spend time to collect 2. Must spend time to cut up 3. Rusts stove pipe because it is saturated with salt water [Coal fa Free. Must spend time to collect 4 Barrow Utilities and Electric Cooperative, Inc. C-4 Table C -2 Uses, Cost, and BTU Content of Fuels, 1991 Ge fae [Pe ee | Cusine [tm | [ne [ee Gasoline _| Lighting [Kerosene | Heating | S417 porgal__|$5.00pergal | 134876 pereal_| 01] ___07| a a [ee eee | ee Heating Driftwood | Heating saturated with salt N/A N/A water thus heat content is low ee eee] 14,000 per Ib 4 The cost per BTU does not take into account how efficiently the fuel can be bumed in a cook stove, heater, or lantern. Units: Ib = pounds, gal = gallons, cf = cubic foot C-5 Table C.- 34 Energy Use by Fuel Type and Activity for 14 Interviews, 1991 BTUs per Person per Day pring pring W Overall Hunting White 06 04,04 5 15,327 43,107 S216 peers AUT Ebe bere a eri Uirecetlr Ieee ILE EAL tee ere are ELV cee Gasoline PDiesel@ | OY 8037182 31,082 [3,735 ® The average BTUs/person/day was calculated by taking the total fuel used and dividing by the total number of person-days spent on that activity. > Propane is not used in the winter because it is affected by the cold weather. © Only two interviewees used diesel. 4 Only one interview used natural gas during spring whaling. Table C -4 Percentage Shares of Total Fuel Used pring pring Whaling Goose Hunting G (a) Source: Table C-3 C-6 Table C - 54 Average Expenditures for Fuel, 1991 Average Expenditure/Person/Day by Activity (Dollars) e pring pring W Overal Whaling Goose Average Hunting eee Ue er Eee on Ee ee hite 00 0 0 oct IT eee rea Gascline arose ete Cost® ® The average Cost/person/day was calculated by taking the total fuel used and dividing by the total number of person-days spent on that activity. > Propane is not used in the winter because it is affected by the cold weather. © Only two interviewees used diesel. 4 Only one interview used natural gas during spring whaling. Table C - 6 Percentage Shares of Total Fuel Expenditures, 1991 pring pring W Overall! Hunting 0% 16% O% 69 Source: Table C-5 C-7 Activity Figure C-1. Average Energy Use Per Person Per Day (14 Interviews) Thousands of BTUs 0 20 40 60 80 100 Whaling Goose H. Fall Winter Diesel Natural Gas Unleaded Gas 01 Kerosene Propane EA White Gas Note: The average BTU/person/day was calculated by taking the total fuel used and dividing by the total number of person-days spent on the activity. Figure C-2. Average Expenditures Per Person Per Day (14 Interviews) Dollars $0.00 $1.00 $2.00 $3.00 $4.00 Whaling Goose H. Summer Fall Winter Unleaded Gas 0 Kerosene Diesel EJ Natural Gas Note: The average expenditures/person/day was calculated by taking the total fuel used and dividing by the total number of person-days spent on the activity. FUEL USED IN DIFFERENT SUBSISTENCE ACTIVITIES Spring Whaling For the year of 1991, spring whaling started in the middle of April and lasted from 15 to 56 days* depending on the whaling crew. The average crew size ranges from 5 to 11 people on the lead edges of the ice. Each whaling crew has at least one member that made a supply trip back to Barrow or Wainwright every two to five days. The movement in and out of the whaling camps increases during the weekend because some of the crew has in-town employment responsibilities. Over the years, traditional petroleum products were white gas and kerosene for cooking food and heating tents. Starting in the spring of 1991 some whaling crews used propane for the first time. Interview 11 had the lowest cost per person per day of $1.06 by almost exclusively using propane. Interview 3 had the highest cost per person per day of $5.95 with the use of white gas and kerosene. The remaining whaling crews fell between the two extremes by using combinations of propane, white gas, unleaded gasoline, and kerosene. The percentage of total Btus used for whaling is 41 percent, white gas; 39 percent, kerosene; 16 percent, propane; 3 percent, natural gas; and 2 percent, unleaded gasoline. Most whaling crews used their heaters and the cook stoves 24 hours a day because people were sleeping in shifts and eating 5 or 6 meals a day. Interview 1 used propane for all their cooking and heating by operating their propane stove 24 hours a day until the 100 pound bottle was empty. A 100 pound bottle of propane lasted an average of two weeks before being changed. The other crews filled their kerosene heaters every 12 to 18 hours depending on the temperature. White gas stoves would have to be filled and pumped every few hours to maintain fuel and pressure in the fuel tank. The crew that used natural gas for cooking and heating had to change the 300 cubic foot bottle every two days. Changing the bottles became a hassle since the crew had only two bottles, and in addition they would have to transport the bottles back to * See the Tables C-7 though C-13 on spring whaling, spring goose hunting, summer, fall, and winter activities. c-9 B.U.E.C.I.° to have them filled. The whaling captains who did not use propane, were uniformed about its advantages. But once informed about propane, they were interested in possibly pursuing its use during the coming whaling season. They seemed willing to switch if the propane was cost effective. Spring Goose Hunting Spring goose hunting activities started after spring whaling and lasted 1 to 2 weeks with 2 to 7 people participating per group. Most goose hunters stayed in tents when in the field because they wanted mobility. White gas was mainly used for cooking and kerosene was used to heat tents. The few people who used cabins mainly used propane for cooking. Mobile hunters did not like propane in the field because of the difficulty in dealing with the bottle which does not fit easy into a snowmobile sled. The cost per person per day ranged from a low of $0.43 for interview 11, using mostly propane and unleaded gasoline to a high of $4.28 for interview 4, using white gas and kerosene. The percentage of total Btus used for goose hunting is 51 percent, white gas; 24 percent, kerosene; 11 percent, diesel; 9 percent, propane; and 4 percent, unleaded gas. Summer Summer activities started the beginning of July and concluded the end of August. People spent 6 to 56 total days in groups of 1 to 15 people for these activities. The trips varied from day trips to all summer outings. The peoples’ summer activities were fishing, caribou and marine mammal hunting. Many of the interviewees based at their cabins and then ventured out along the rivers to tent over night. Propane was mainly used in the cabins, but some people did take propane burners with 11 pound bottles while traveling along the rivers; however, most people used white gas. While on marine mammal hunting trips, people would use white gas stoves to warm up beverages in their boats. 5 Barrow Utilities and Electric Cooperative, Inc. C-10 Interview 10 had the lowest cost per person per day of $0.35 by using white gas and kerosene. Interview 1 had the highest cost per person per day of $5.51 by using white gas. The number of people can lower the cost per person per day since adding two or three additional people does not require much more fuel. Interview 10 had 5 adults and 10 children all summer along and they used white gas and kerosene and had the lowest cost per person per day. Interview 11 had the second lowest cost per person per day of $0.43 using propane and unleaded gasoline. The percentage of total Btus used for summer activities is 58 percent, white gas; 19 percent, kerosene; 14 percent, propane; and 8 percent, unleaded gasoline. Fall Fall hunting spanned September, October and ending the middle of November. People spent from 4 to 56 total days and group sizes ranged from 1 to 7 people. At the beginning the season whaling, caribou and marine mammal hunting were usually day trips. White gas was usually used on these trips for preparing food and beverages. Toward the end of the season some interviewees would spend two to three weeks at their cabins hunting and fishing. This was the first time the interviewees mentioned using lanterns. The interview 11 had the lowest cost per person per day of $0.52 by using propane and unleaded gasoline. The interview 4 had the highest cost per person per day of $10.61 by using white gas and kerosene. The per person per day cost $10.61 is double what any other interviewee used; thus, the interviewee most likely report extra fuel taken along in case of bad weather which was not used. The percentage of total Btus used for fall activities is 32 percent, white gas; 29 percent, kerosene; 15 percent, diesel; 13 percent, propane; and 11 percent, unleaded gasoline. Winter Winter starts the end of November 1990 and continues to the end of March 1991. People spent 7 to 36 days total and groups ranged from 1 to 6 people. Winter trips were usually a week long and were spent at cabins near Barrow or in the Brooks Range foot hills. The subsistence activities this time of the year included trapping, wolf and wolverine hunting. The interview 3 C-11 (6 people) had the lowest cost per person per day of $1.51 by using white gas and kerosene. The interview 2 (one person) had the highest cost per person per day of $9.49 by using white gas and kerosene. The percentage of total Btus used for goose hunting is 44 percent, white gas; 31 percent, diesel; and 25 percent, kerosene. White gas and kerosene are the most used fuels during this time of the year. None of these people used propane in the winter because propane does not perform well when the temperature exceeds 20 to 30 degrees below zero Fahrenheit. Most of the groups left their kerosene and diesel heaters burning when they were out hunting since they wanted to return to a warm cabin after being gone all day. White gas lanterns were used for light at night. POTENTIAL SAVING FROM USING UNLEADED GASOLINE In the previous sections unleaded gasoline was described as being a cost-effective fuel in terms of the energy provided per dollar of cost. The following three examples will show how much a person might save by using unleaded gasoline over white gas. 1. Ifa person already had an unleaded Coleman stove, the stove would cost about 60 percent less to operate per gallon using unleaded gasoline over white gas 2. Ifa person had to buy a new unleaded Coleman stove for $60 to $70 in order to burn unleaded gasoline, it would pay for itself in one year if a person burns 25 gallons gasoline or more a year. 3. Ifa person had to replace a worn-out stove, the extra cost of an unleaded stove would be about $10 to $15 more than a white gasoline stove. Almost every one in the study burned at least 25 gallons of white gasoline; thus, it might be beneficial to use unleaded gasoline instead of white gasoline. SUMMARY People use a wide range of fuels for their subsistence activities, but a large percentage of the fuel they use is based on traditional use. The two fuels people might be better off using are unleaded gasoline and diesel fuel because they are low cost fuels. C-12 Propane was not the least cost fuel per Btu, but many people appreciated its ease of use when whaling and for use in their cabins. Also, it appears to be a more efficient source of delivered heat than white gas and kerosene perhaps due to the ease of operation which allows a person to control the temperature for cooking and heating. However, propane does not operate well in cold temperatures. Once people discover the advantage of propane, many more people will likely use it in the spring, summer, and fall seasons. FUTURE RESEARCH There are several avenues that could be taken for future research on the subsistence fuel use in the NSB. The first approach would use the data collected in this report and try to extrapolate to the general fuel use in subsistence camps all over the NSB. Two previous studies® discuss the total amount of subsistence activity in Barrow. These studies could be combined with the data on fuel use and estimated the overall fuel use in the NSB. The second approach would be to expand this study by collecting data from larger random samples of the NSB residents and using the data to estimate the total level of subsistence fuel use. Expanding the study would require more time and money than was spent on this inquiry. Either approach would provide better data on total subsistence fuel use for helping with borough planning. However, the second approach might yield better estimates because of a larger sample size. LIMITATIONS OF THE DATA The fuel use data is biased because it is not derived from a random sample of Barrow’s and Wainwright’s population. Except for one person, the interviewees had regular jobs with limited vacation time which over-represents part-time subsistence users. Because of the unpredictably 6 North Sl Borough isten tudy: Barrow _1987 and North Slope Borough Subsistence Study: Barrow 1988 were funded by Mineral Management Services, and prepared by Stephan R. Braund & Associates along with John A. Kruse of the Institute of Social and Economic Research. C-13 of weather, practically all interviewees took along extra fuel. In many cases, the extra fuel.may have been reported as fuel used so the fuel numbers might be inflated. The interviewees tended to remember long trips more than the short trips; thus, they probably under reported short trips. Fuel use on short trips tended to be minimal and the fuel was likely to be white gas for heating food and beverages. The last problem with the data was a small sample size. For the reasons stated above, we would caution against making sweeping generalizations about the in-camp use of fuels in the NSB. We excluded driftwood and coal from the tables because accurate data was not available. Driftwood and coal are mainly used in cabin stoves and are collected as needed which makes it hard to quantify their uses. From the interviews, driftwood and coal appeared to be an important source of fuel. C-14 Table C-7. Actual Reported Fuel Use by 14 Subsistence Users, 1991 Tntervew# #1 +2 #3 #4 #8 6 #7) #8 #10 #11 #12 #13 #14 Spring Whaling: Total Days 35 - 6 35 42 25 15 42 28 - 2 21 18 56 Avg # of People 1 - § 10 9 ou o 6 1 - 8 8 5 Fuel Uses: Propane (1b) 300 - 0 260 120 100 40 80 0 - 150 0 150 0 White Gas (gal) S - 80 30 =«:110 20 15 15 25 - 0 55 7 120 Unleaded Gas (gal) 0 - 0 0 0 0 15 0 0 - Ss 0 0 0 Kerosene (gal) 0 - 80 10-110 55 45 30 0 - 5 55 3 80 Diesel (gal) 0 - 0 0 0 0 0 0 0 - 0 0 0 0 Natural Gas (gal) 0 - 0 0 0 0 0 04,200 : 0 0 0 0 Spring Goose Hunting: Total Days 7 - 10 11 - 14 7 13 - - 14 7 7 1 Avg # of People 3 - 4 3 : 3 3 4 - - 7 2 4 Fuel Uses: 2 Propane (1b) 0 - 0 0 - 25 20 0 - - 30 0 0 0 White Gas (gal) 10 - 5 10 - 5 0 15 - - 0 10 5 6 Unleaded Gas (gal) 0 - 0 0 - 0 0 0 - - 5 0 0 0 Kerosene (gal) 0 - 0 15 - 0 7 0 - - 0 5 0 S Diesel (gal) 0 - 0 0 - 15 0 0 - - 0 0 0 0 Natural Gas (gal) 0 : 0 0 : 0 0 0 : : 0 0 0 0 Summer: Total Days 6 56 - 7 - 16 16 8 7 56 56 16 16 6 Avg # of People 3 2 - 3 - 3 5 1 3 15 3 6 8 3 Fuel Uses: Propane (Ib) 0 25 - 0 - 25 50 5 0 0 35 0 25 0 White Gas (gal) 15 S - 5 - 8 5 0 5 25 0 10 16 10 Unleaded Gas (gal) 0 0 - 0 - 0 0 0 0 0 15 0 0 0 Kerosene (gal) 0 S - Si - 0 0 0 0 25 0 0 0 0 Diesel (gal) 0 0 - 0 - 0 0 0 0 0 0 0 0 0 Natural Gas (gal) 0 0 - 0 : 0 0 0 0 0 0 0 0 0 Fall: Total Days - - 2 4 - 42 14 7 - - 56 30 20 it Avg # of People - - Z 2 - 3 1 3 - - 3 2 3 3 Fuel Uses: Propane (Ib) - - 0 10 - 25 40 0 - - 50 0 66 0 White Gas (gal) - - 2 0 - 0 Si 10 - - 0 25 3 5 Unleaded Gas (gal) - - 0 0 - 10 0 0 - - 15 0 0 0 Kerosene (gal) : - 0 15 : 0 10 0 - - 0 30 9 5 Diesel (gal) - - 0 0 - 35 0 0 - - 0 0 0 0 Natural Gas (gal) : - 0 0 : 0 0 0 : - 0 0 0 0 Winter: Total Days - 35 9 - - - 7 - - - - - 36 21 Avg # of People - 1 6 - - - 2 : - - - - 2 4 Fuel Uses: Propane (Ib) - 0 0 - - - 0 - - - - - 0 0 White Gas (gal) - 20 Z - - - 10 - - - - - 15 30 Unleaded Gas (gal) - 0 0 - - - 0 - - - - - 0 0 Kerosene (gal) - 40 7 : : : 0 - - : 7 ° 0 0 Diesel (gal) - 0 0 - - : 0 - - - - - 60 0 Natural Gas (gal : 0 0 - - : 0 : : : : : 0 0 Notes: The "0" represents that the interveiwee did not use a particular fuel during a certain activity. The "-" represents that the interviewee did not participate in a particular activity. C-15 Table C-8. Estimated Fuel Cost by 14 Subsistence Users (In Dollars), 1991 Tntervew# #1 93 4 =O ~—SOGSCOSSC«aSSC*«S~SC«aAO.~=S«#)'=S<‘i WS Spring Whaling: Total Days 35 - 26 35 42 25 15 42 28 - 21 21 18 56 Avg # of People 7 - 5 10 9 11 7 6 7 - 8 8 6 5 Fuel Cost (Dollars) Propane 294 - 0 255 118 98 39 B 0 - 147 0 147 0 White Gas 28 - 440 165 606 110 83 83 138 - 0 303 39 (661 Unleaded Gas 0 - 0 0 0 0 30 0 0 - 10 0 0 0 Kerosene 0 - 334 42 459 229 188 125 0 - 2 229 13, 334 Diesel 0 - 0 0 0 0 0 0 0 - 0 0 0 0 Natural Gas : 0 0 0 0 0 O18: = 0 0 0 0 Total Cost 322 ~__774__462_1,182_ 438340 286327 ~__178__ 532-198-994 Spring Goose Hunting: Total Days 7 - 10 il - 14 a 13 - - 14 7 7 ll Avg # of People 3 - 4 3 - 3 3 4 - - 7 2 2 4 Fuel Cost (Dollars) Propane 0 - 0 0 - 25 20 0 - - 2 0 0 0 White Gas 66 - 33 66 - 33 0 9 : - 0 66 33 40 Unleaded Gas 0 - 0 0 - 0 0 0 - - 13 0 0 0 Kerosene 0 - 0 675 - 0 35 0 - - 0 25 0 25 Diesel 0 - 0 0 - 33 0 0 - - 0 0 0 0 Natural Gas 0 - 0 0 : 0 0 0 - : 0 0 0 } Total Cost 66 : 33141 0 91 35 99 : - 42 91 33 65 Summer: Total Days 6 56 - 7 - 16 16 rae 56 16 16 6 Avg # of People 3 2 - 3 - 5 15 3 6 8 3 Fuel Cost (Dollars) Propane 0 25 - 0 - 25 49 5 0 0 34 0 25 0 White Gas 99 33 - 33 - 53 33 0 33 «165 0 66 = 106 66 Unleaded Gas 0 0 - 0 - 0 0 0 0 0 38 0 0 0 Kerosene 0 25 - 25 - 0 0 0 0 125 0 0 0 0 Diesel 0 0 - 0 - 0 0 0 0 0 0 0 0 0 Natural Gas 0 0 - 0 : 0 0 0 0 0 0 0 0 0 Total Cost 99 83 : 58 - 71 82 5 33-290 72 66 _:130 66 Fall: Total Days - - 25 4 - 42 14 7 - - 56 30 20 7 Avg # of People - - 7 2 - 3 1 3 - - 3 2 3 3 Fuel Cost (Dollars) Propane - - 0 10 - 2 39 0 - - 49 0 65 0 White Gas - - 165 0 - 0 33 66 - : 0 165 17 33 Unleaded Gas - - 0 0 - 25 0 0 - : 38 0 0 0 Kerosene - - 0 1S : 0 50 0 : : 0 150 45 25 Diesel - - 0 0 - 77 0 0 - - 0 0 0 0 al jas - : 0 : 0 0 : : 0 Total Cost : ~__ 165 85 = 127122 66 : : 87 315126 58 Winter: Total Days - 35 9 - - - 7 - - - - - 36 21 Avg # of People - 1 6 - : - 2 : : : : : 2 4 Fuel Cost (Dollars) Propane - 0 0 - - : 0 - - - - - 0 0 White Gas - 132 46 - - - 6 - - - - - 9 198 Unleaded Gas - 0 0 - - - 0 - - - - - 0 0 Kerosene - 200 35 - - - 0 - - - - - 0 0 Diesel - 0 0 - - - 0 - : - - - = 133 0 Natural Gas - 0 0 - - : 0 - : : - : 0 0 Total Cost Samy) 81 : : 66 - - : -__232__—:198 Notes: The "O" represents that the interveiwee did not use a particular fuel during a certain activity. The "-" represents that the interviewee did not participate in a particular activity. C-16 Table C-9. Spring Whaling Fuel Use and Estimated Cost by 12 Subsistence Users, 1991 Thervew? Soa~s~=<“‘ ODUM CUMULUS SCM) SC‘ )S~*~<‘( ;;) swe Total Days 35 26 aS eqende ees 15 aalnmaiae Saiyenlaael aes 36 Avg # of Ne 7 5 10 9 il ah 6 7 8 8 6 5 Fuel Used: Propane (Ib) 300 260 120 100 40 80 190 150 White Gas (gal) 5 80 30 110 20 15 1S 2s SS a 120 Unleaded Gas (gal) 15 5 Kerosene (gal) 80 10 110 5S 45 30 5 SS 3 80 Natural Gas (cf) —EEEEeE—_——————EE Fuel Used per Day: Propane (Ib) 8.57 743 2.86 4.00 2.67 1.90 7.14 8.33 White Gas (gal) 0.14 3.08 0.86 2.62 0.80 1.00 0.36 0.89 2.62 0.39 2.14 Unleaded Gas (gal) 1.00 0.24 Kerosene (gal) 3.08 0.29 2.62 2.20 3.00 0.71 0.24 2.62 0.17 143 Natural Ges 150.00 Fuel Uses per Person: Propane (Ib) 42.86 26.00 13.33 9.09 571 13.33 18.75 25.00 White Gas (gal) 0.71 16.00 3.00 12.22 1.82 2.14 250 3.57 6.88 117 %A.00 Unleaded Gas (gal) 2.14 0.63 Kerosene (gal) 16.00 1.00 12.22 5.00 643 5.00 0.63 6.88 0.50 16.00 Natural Gas (cf) 600.00 Fuel Uses Per Person Per Day: Propane (Ib) 1.22 0.74 0.32 0.36 0.38 0.32 0.89 139 White Gas (gal) 0.02 0.62 0.09 0.29 0.07 0.14 0.06 0.13 0.33 0.06 0.43 Unleaded Gas (gal) 0.14 0.03 Kerosene (gal) 0.62 0.03 0.29 0.20 043 0.12 0.03 0.33 0.03 0.29 Natural Gas 2143 Cost of Fuel (Dollars): Propane 294.30 255.06 = 117.72 98.10 39.24 7848 147.15 147.15 White Gas 27.53 440.48 165.18 605.66 110.12 82.59 82.59 137.65 302.83 38.54 660.72 Unleaded Gas 30.12 10.04 Kerosene 333.60 41.70 458.70 229.35 =—-187.65 125.10 2085 229.35 12.51 333.60 Natural Gas 189.00 ‘otal 321.83 4.08 461.94 ii 4 339.60 1 26. 178.04 32.18 198.20 994. Cost of Fuel Per Day (Dollars): Propane 841 1.29 2.80 3.92 2.62 1.87 701 8.17 White Gas 0.79 16.94 4.72 1442 4.40 5.51 197 492 14.42 2.14 11.80 Unleaded Gas 2.01 048 Kerosene 12.83 1.19 10.92 9.17 1251 2.98 0.99 10.92 0.70 5.96 Natural Gas 6.75 y, . 13. }. f § 1 fe Cost of Fuel Per Person (Dollars): Propane 42.04 25.51 13.08 8.92 5.61 13.08 18.39 2AS3 White Gas 3.93 88.10 16.52 67.30 10.01 11.80 13.77 19.66 37.85 642 132,14 Unleaded Gas 4.30 1.26 Kerosene 66.72 4.17 50.97 20.85 26.81 20.85 261 28.67 2.09 6.72 Propane 1.20 0.73 0.31 0.36 0.37 0.31 0.88 1.36 White Gas O11 3.39 0.47 1.60 0.40 0.79 0.33 0.70 1.80 0.36 2.36 Unleaded Gas 0.29 0.06 Kerosene 257 0.12 121 0.83 1.79 0.50 0.12 137 0.12 1.19 Natural Gas 0.96 C-17 Table C-10. Spring Goose Hunting and Estimated Cost by 10 Subsistence Users, 1991 nterview Number 1 1 1 1 Total Days 7 10 11 14 7 13 14 7 7 11 Number of People 3 4 3 3 3 4 7 2 2 4 Fuel Used: Propane (1b) 25 20 30 White Gas (gal) 10 5 10 5 15 10 5 6 Unleaded Gas (gal) 5 Kerosene (gal) 15 7 5 5 Diesel (gal) 15 Fuel Used per Day: Propane (1b) 1.79 2.86 2.14 White Gas (gal) 1.43 0.50 0.91 0.36 1.15 1.43 0.71 0.55 Unleaded Gas (gal) 0.36 Kerosene (gal) 1.36 1.00 0.71 0.45 Diesel (gal) 1.07 Fuel Uses per Person: Propane (1b) 8.33 6.67 4.29 White Gas (gal) 3.33 1.25 3.33 1.67 3.75 5.00 2.50 1.50 Unleaded Gas (gal) 0.71 Kerosene (gal) 5.00 2.33 2.50 1.25 Diesel (gal) 5.00 Fuel Uses Per Person Per Day: Propane (1b) 0.60 0.95 0.31 White Gas (gal) 0.48 0.13 0.30 0.12 0.00 0.29 0.71 0.36 0.14 Unleaded Gas (gal) 0.05 Kerosene (gal) 0.45 0.33 0.36 0.11 Diesel (gal. 0.36 Cost of Fuel (Dollars): Propane 24.53 19.62 29.43 White Gas 66.07 33.04 66.07 33.04 99.11 66.07 33.04 39.64 Unleaded Gas 12.55 Kerosene 75.06 35.03 25.02 25.02 Diesel 33.15 Total Cost 66.07 33.04 141.13 90.71 54.65 99.11 41.98 91.09 33.04 64.66 Cost of Fuel Per Day (Dollars): Propane 1.75 2.80 2.10 White Gas 9.44 3.30 6.01 2.36 7.62 9.44 4.72 3.60 Unleaded Gas 0.90 Kerosene 6.82 5.00 3.57 2.27 Diesel 2.37 Cost Per_day 9.44 3. 12.83 6.48 781 7.62 3.00 13.01 4.72 88 Cost of Fuel by Person (Dollars): Propane 8.18 6.54 4.20 White Gas 22,02 8.26 22.02 11.01 24.78 33.04 16.52 9.91 Unleaded Gas 1.79 Kerosene 25.02 11.68 12.51 6.26 Diesel 11.05 Cost Per Person 22.02 8.26 _47.04 30.24 18.22___24.78 6.00 45.55 16.52 16.17 Cost of Fuel Per Person Per Day (Dollars): Propane 0.58 0.93 0.30 White Gas 3.15 0.83 2.00 0.79 1.91 4.72 2.36 0.90 Unleaded Gas 0.13 Kerosene 2.27 1.67 1.79 0.57 Diesel 0.79 Per Person Per Day 3.15 0.83 4.28 2.16 2.60 1.91 0.43 6.51 2.36 1.47 C-18 Table C-11. Summer Fuel Use and Estimated Cost by 12 Subsistence Users, 1991 interview 1 1 1 1. Total Days 6 36 7 16 16 8 7 56 36 16 16 6 Avg # of People 3 2 3 3 5 1 3 15 3 6 8 3 Fuel Used: Propane (Ib) 25 25 50 5 35 25 White Gas (gal) 15 5 s 8 5 5 25 10 16 10 Unleaded Gas (gal) 15 Kerosene (gal) 5 5 25 Fuel Used per Day: Propane (Ib) 045 1.56 3.13 0.63 0.63 1.56 White Gas (gal) 2.50 0.09 O71 0.50 0.31 0.71 0.45 0.63 1.00 1.67 Unleaded Gas (gal) 0.27 Kerosene (gal) 0.09 0.71 0.45 Fuel Uses per Person: Propane (Ib) 12.50 8.33 10.00 5.00 11.67 3.13 White Gas (gal) 5.00 2.50 1.67 2.67 1.00 1.67 1.67 0.00 1.67 2.00 3.33 Unleaded Gas (gal) 5.00 Kerosene (gel) 2.50 1.67 1.67 0.00 Fuel Uses Per Person Per Day: Propane (Ib) 0.22 0.52 0.63 0.63 0.21 0.20 White Gas (gal) 0.83 0.04 0.24 0.17 0.06 0.24 0.03 0.10 0.13 0.56 Unleaded Gas (gal) 0.09 Kerosene (gal) 0.04 0.24 0.03 Cost of Fuel (Dollars): Propane 2AS3 2A.53 49.05 4.90 4 AAS3 White Gas 99.11 33.04 = 33.04 52.86 33.04 33.04 165.18 66.07 = 105.71 66.07 Unleaded Gas 37.65 Kerosene 25: 25.02 125.10 A a 8.06 38 ; 4 04 028 Cost of Fuel Per Day (Dollars): Propane 044 1.53 3.07 0.61 0.61 1.53 White Gas 16.52 0.59 472 3.30 2.06 4.72 2.95 4.13 6.61 11.01 Unleaded Gas 0.67 Kerosene 045 3.57 2.23 Cost of Fuel Per Person (Dollars): Propane 12.26 8.18 9.81 4.90 1145 3.07 White Gas 33.04 16,52 11.01 17.62 6.61 11.01 11.01 11.01 13.21 2.02 Unleaded Gas 12.55 Kerosene. 12.51 8.34 8.34 5. 4 5. 2 16.4: r ! k . 7 Cost of Fuel Per Person Per Day (Dollars): Propane 0.22 0.51 0.61 0.61 0.20 0.19 White Gas 5.51 0.29 157 1.10 0.41 1.57 0.20 0.69 0.83 3.67 Unleaded Gas 0.22 Kerosene 0.22 1.19 0.15 Per Person 5.51 0.74 76, 1.61 1,03 0.6: 1.57 0.35 0.43 0.69 1.02 3.67 C-19 Table C-12. Fall Fuel Use and Estimated Cost by 9 Subsistence Users, 1991 Interview # #3 #4 #6 #7 #8 #11 #12 #13 #14 ys 4 1 Avg # le. 1 3 1 3 3 2 3 3 Fuel Used: Propane (gal) 10 25 40 50 66 White Gas (gal) 25 Ss 10 25 3 Ss Unleaded Gas (gal) 10 15 Kerosene (gal) 15 10 30 9 5 Diesel 35 Fuel Used per Day: Propane (gal) 2.50 0.60 2.86 0.89 3.30 White Gas (gal) 1.00 0.36 1.43 0.83 0.13 0.71 Unleaded Gas (gal) 0.24 0.27 Kerosene (gal) 3.75 0.71 1.00 0.45 0.71 Diesel 0.83 Fuel Uses per Person: Propane (gal) 5.00 8.33 40.00 16.67 22.00 White Gas (gal) 3.57 5.00 3.33 12.50 0.83 1.67 Unleaded Gas (gal) 3.33 5.00 Kerosene (gal) 7.50 10.00 15.00 3.00 1.67 Diesel 11.67 Fuel Uses Per Person Per Day: Propane (gal) 1.25 0.20 2.86 0.30 1.10 White Gas (gal) 0.14 0.36 0.48 0.42 0.04 0.24 Unleaded Gas (gal) 0.08 0.09 Kerosene (gal) 1.88 0.71 0.50 0.15 0.24 Diesel 0.28 Cost of Fuel (Dollars): Propane 9.81 24.53 39.24 49.05 64.75 White Gas 165.18 33.04 66.07 165.18 16.52 33.04 Unleaded Gas 25.10 37.65 Kerosene 75.06 50.04 150.12 45.04 25.02 Dit 7735 Total Cost 165.18 84.87 -49.63__—:122.31 66.07 86.70 315.29 126.30 58.06 Cost of Fuel Per Day (Dollars): Propane 2.45 0.58 2.80 0.88 3.24 White Gas 6.61 2.36 9.44 5.51 0.83 4.72 Unleaded Gas 0.60 0.67 Kerosene 18.77 3.57 5.00 2.25 3.57 Diesel 1.84 Cost Per da’ 6.61 21.22 18 8.74 .44 155 10.51 6.31 8.29 Cost of Fuel Per Person (Dollars): Propane 4.90 8.18 39.24 16.35 21.58 White Gas 23.60 33.04 22.02 82.59 5.51 11.01 Unleaded Gas 8.37 12.55 Kerosene 37.53 50.04 75.06 15.01 8.34 Diesel 25.78 Cost Per Person 23.60 42.44 1654 122.31 22.02 28.90 157.65 42.10 19.35 Cost of Fuel Per Person Per Day (Dollars): Propane 1.23 0.19 2.80 0.29 1.08 White Gas 0.94 2.36 3.15 2.75 0.28 157 Unleaded Gas 0.20 0.22 Kerosene 9.38 3.57 2.50 0.75 1.19 Diesel 0.61 Per Person Per Da‘ 0.94 10.61 0.39 8.74 3.15 0.52 5.25 2.10 2.76 C-20 Table C-13. Winter Fuel Use and Estimated Cost by 5 Subsistence Uses, 1991 Interview # #2 #3 #7 #13 #14 Total Days 35 9 7 36 21 Avg of People 1 6 2 2 4 Fuel Used: White Gas (gal) 20 7 10 15 30 Kerosene (gal) 40 7 Diesel (gal) 60 Fuel Used per Day: White Gas (gal) 0.57 0.78 1.43 0.42 1.43 Kerosene (gal) 1.14 0.78 Diesel 1.67 Fuel Uses per Person: White Gas (gal) 20.00 1.17 5.00 7.50 7.50 Kerosene (gal) 40.00 Lid Diesel (gal) 30.00 Fuel Uses Per Person Per Day: White Gas (gal) 0.57 0.13 0.71 0.21 0.36 Kerosene (gal) 1.14 0.13 Diesel 0.83 Cost of Fuel (Dollars): White Gas 132 46 66 99 198 Kerosene 200 35 Diesel 133 Total Cost 332.30 81.28 66.07 __ 231.71 _ 198.21 Cost of Fuel Per Day (Dollars): White Gas 3.78 5.14 9.44 2.75 9.44 Kerosene 5.72 3.89 Diesel 3.68 Cost Per_day 9.49 9.03 9.44 6.44 9.44 Cost of Fuel Per Person (Dollars): White Gas 132.14 7.71 33.04 49.55 49.55 Kerosene 200.16 5.84 0.00 Diesel 66.30 Cost Per Person 332.30 13.55 33.04 _:115.85 49.55 Cost of Fuel Per Person Per Day (Dollars): White Gas 3.78 0.86 4,72 1.38 2.36 Kerosene S72 0.65 Diesel 1,84 Per Person Per Day 9.49 1.51 4.72 3.22 2.36 C-21 APPENDIX D Energy Efficiency Programs Detailed Results and Assumptions NoRTH SLOPE BOROUGH ENERGY ASSESSMENT APPENDIX D: ENERGY EFFICIENCY PROGRAMS Detailed Results and Assumptions Detailed Results of Economic Analysis Tables D-1 through D-3 provide detailed results of the economic analysis of the energy efficiency programs. There is one table for each fuel cost scenario--Low, Mid, and High. The following descriptions and comments refer the numbered columns in the tables. Column Descriptions and Comments for Tables D-1 - D-3 10. ne 2s Efficiency program code. Name of efficiency program. Type of building that program is applied to: Res = Residential Housing, Non-Res = Non-Residential Buildings. Total present value cost of the program in 1991 $. Includes installation costs of the efficiency measures, design costs, and program administration costs. Assumes programs are administered over a 10 year period. Present value of operation and maintenance benefits provided by the efficiency improvements. Negative numbers (indicated by parentheses) indicate that the efficiency measure increases operation and maintenance costs. Present value of building fuel savings brought about by the efficiency program. Negative numbers (indicated by parentheses) indicate an increase in fuel use. Efficiency measures that reduce electricity use usually increase space heating fuel use because the measures decrease the amount of heat released by the electricity using equipment in the building. Present value of building electricity savings caused by the efficiency program. Could be negative for efficiency measures that save fuel but actually increase electricity use. Total present value benefits, the sum of columns 5 through 7. The ratio of total benefits to total costs, column 8 divided by column 4. Building fuel savings brought about by the program in millions of Btus for the year 2004 (the 10th year of program operation). Building fuel savings in the year 2004 (column 10) expressed as a percentage of the total building fuel consumption for the area served by the program (all 7 villages or Barrow). Electricity savings brought about by the program in megawatt-hours in the year 2004 (the D-1 NoRTH SLOPE BOROUGH ENERGY ASSESSMENT 10th year of program operation). 13. Electricity savings in the year 2004 (column 12) expressed as a percentage of the total building electricity consumption for the area served by the program (all 7 villages or Barrow). D-2 Table D-1 Results of Energy Efficiency Program Analysis Fuel Cost Scenario: Low 1 2 3 4 5 6 7 8 9 10 1 12 13 Total ------- Benefits, $ mil. Pres. Value Benefit/ ------ Energy Savings In 2004 ------ Bullding Cost Oper. & Fuel Electric Total Cost Fuel %of Total Electric % of Total Code Efficlency Program Type | $mil.,PV Maint Savings Savings Benefits _Ratlo MMBtu FuelLoad MWh __ElecLoad For the Villages: V01 Showerhead Giveaway Resid $0.010 $0.065 $0.082 $0.000 $0.147 14.71 485 0.2% 0 0.0% V02 Effic. NewNon-Res Bldgs Non-Res}| $0.186 $0.000 $0.456 $0.282 $0.738 3.96 2,745 0.9% 154 1.0% VO3 Replace Drip-Pot Burners Resid $0.285 ($0.044) $0.952 ($0.076) $0.631 2.91 7,608 2.6% (66) -0.4% V04 Ventilation Air Control Non-Res} $0.694 ($0.144) $1.515 $0,097 $1.467 eat 12,406 4.3% 62 0.4% VO5 Tune Heating Systems Resid $0.264 $0.000 $0.490 $0.000 $0.490 1.86 3,449 1.2% 0 0.0% VO6_ Efficient New Housing Resid $0.192 ($0.014) $0,324 $0.009 $0.319 1.66 2,048 0.7% 6 0.0% VO7 Compact Fluor. Giveaway Resid $0.114 $0.030 ($0.120) $0.271 $0.181 1.59 (844) -0.3% 206 1.3% V08 Ceiling/Floor Insulation Resid $2.022 $0.000 $3.066 $0.000 $3.066 1.52 12,205 4.2% 0 0.0% VO9 Non-Res Lighting Retrofits Non-Res| $1.032 $0.000 ($0.517) $2.042 $1.525 1.48 (3,472) -1.2% 1,250 8.0% V10 Improve Heating Efficiency Non-Res| $1.765 $0.944 $1.463 $0.138 $2.544 1.44 12,560 4.3% 119 0.8% *** Village Totals *** $6.566 $0.836 $7.710 $2.762 $11.308 1.72 49,189 16.9% 1,731 11.1% For Barrow: B01 Showerhead Giveaway Resid $0.016 $0.103 $0.000 $0.000 $0.103 6.52 764 0.1% 0 0.0% B02 Effic. New Non-Res Bldgs Non-Res| $0.053 $0.000 $0.000 $0.028 $0.028 0.53 644 0.1% 111 0.2% B03 Non-Res Lighting Upgrades Non-Res} $0.210 $0.000 $0.000 $0.116 $0.116 0.55 (1,834) -0.3% 655 1.4% B04 Compact Fluor. Giveaway Resid $0.180 $0.047 $0.000 $0.060 $0.107 0.59 (1,331) -0.2% 325 0.7% BOS Effic. Free-Standing Htrs. Resid ($0.030) _ $0.000 ($0.016) '$0.046) 2.5% 130) *** Barrow Totals *** $0.652 $0.120 $0,000 $0.187 $0.307 0.47 12,229 2.2% 961 2.1% Descriptions of each column are provided in the text prior to this table. D-3 Table D-2 Results of Energy Efficiency Program Analysis Fuel Cost Scenario: Mid 1 2 3 4 5 6 7 8 9 10 11 12 13 Total ------- Benefits, $ mil. Pres. Value Benefit/ ------ Energy Savings In 2004 ------ Bullding Cost Oper. & Fuel Electric Total Cost Fuel %ofTotal Electric % of Total Code Efficiency Program Type | $mil.,PV Maint Savings Savings Benefits _—_— Ratio MMBtu FuellLoad MWh _ElecLoad For the Villages: 01 Showerhead Giveaway Resid $0.010 $0.065 $0.089 $0.000 $0.154 15.41 485 0.2% 0 0.0% V02_ Effic. New Non-Res Bldgs Non-Res| $0.186 $0.000 $0.527 $0.335 $0.861 4.62 2,745 0.9% 154 1.0% V03 Replace Drip-Pot Burners Resid $0.285 ($0.044) $1.025 ($0.085) $0.896 3.14 7,608 2.6% (66) -0.4% V04 Ventilation Air Control Non-Res| $0.694 ($0.144) $1.694 $0.108 $1.658 2.39 12,406 4.3% 62 0.4% VO5 Tune Heating Systems Resid $0.264 $0.000 $0.530 $0.000 $0.530 2.01 3,449 1.2% 0 0.0% VO6 Efficient New Housing Resid $0.192 ($0.014) $0.362 $0.010 $0.358 1.86 2,048 0.7% 6 0.0% V0O7 Compact Fluor. Giveaway Resid $0.114 $0.030 ($0.130) $0.303 $0.203 1.78 (844) -0.3% 206 1.3% V08 Ceiling/Floor Insulation Resid $2.022 $0.000 $3.396 $0.000 $3.396 1.68 12,205 4.2% 0 0.0% VO9 Non-Res Lighting Retrofits Non-Res} $1.032 $0.000 ($0.570) $2.294 $1.724 1.67 (3,472) 1.2% 1,250 8.0% V1i0_ Improve Heating Efficiency Non-Res} $1.765 $0.944 $1.584 $0.153 $2.680 1.52 12,560 4.3% 119 0.8% *** Village Totals *** $6.566 $0.836 $8.507 $3.118 $12.461 1.90 49,189 16.9% 1,731 11.1% For Barrow: BO1 Showerhead Giveaway Resid $0.016 $0.103 $0.012 $0.000 $0.115 7.30 764 0.1% 0 0.0% B02 Effic. New Non-Res Bldgs Non-Res} $0.053 $0.000 $0.021 $0.082 $0.103 1.95 644 0.1% W1 0.2% B03 Non-Res Lighting Upgrades Non-Res} $0.210 $0.000 ($0.031) $0.286 $0.255 1.21 (1,834) 0.3% 655 1.4% B04 Compact Fluor. Giveaway Resid $0.180 $0.047 ($0.017) $0.123 $0.153 0.85 (1,331) -0.2% 325 0.7% BOS Effic. Free-Standing Htrs. Resid $0.194 ($0.030) $0.150 ($0.037 $0.082 0.42 13,986 2.5% -0.3% *** Barrow Totals *** $0.652 $0.120 $0.134 $0.454 $0.708 1.09 12,229 2.2% 961 2.1% Descriptions of each column are provided in the text prior to this table. Table D-3 Results of Energy Efficiency Program Analysis Fuel Cost Scenario: High 1 2 3 4 5 6 7 8 9 10 11 12 13 Total ------- Benefits, $ mil. Pres. Value Benefit/ ------ Energy Savings In 2004 ------ Bullding Cost Oper. & Fuel Electric Total Cost Fuel %ofTotal Electric % of Total Code Efficiency Program Type | $mil.,PV Maint Savings Savings Benefits _Ratlo MMBtu_ FuelLoad MWh _ElecLoad For the Villages: v0O1 Showerhead Giveaway Resid $0.010 $0.065 $0.096 $0.000 $0.161 16.12 485 0.2% 0 0.0% Vv02 Effic. New Non-Res Bldgs Non-Res| $0.186 $0.000 $0.600 $0.389 $0.989 5.31 2,745 0.9% 154 1.0% V03 Replace Drip-Pot Burners Resid $0.285 ($0.044) $1,098 ($0.093) $0.961 3.37 7,608 2.6% (66) -0.4% V04 Ventilation Air Control Non-Res} $0.694 ($0.144) $1.874 $0.120 $1.850 2.66 12,406 4.3% 62 0.4% VO5 Tune Heating Systems Resid $0.264 $0.000 $0.571 $0.000 $0.571 2.16 3,449 1.2% 0 0.0% VO6 Efficient New Housing Resid $0.192 ($0.014) $0.401 $0.011 $0.398 2.07 2,048 0.7% 6 0.0% V07 Compact Fluor. Giveaway Resid $0.114 $0.030 ($0.140) $0.335 $0.225 1.97 (844) 0.3% 206 1.3% V08 = Ceiling/Floor Insulation Resid $2.022 $0.000 $3.735 $0.000 $3.735 1.85 12,205 4.2% 0 0.0% VO9 Non-Res Lighting Retrofits Non-Res} $1.032 $0.000 ($0.624) $2.548 $1.924 1.86 (3,472) -1.2% 1,250 8.0% V10 Improve Heating Efficiency Non-Res} $1.765 $0.944 $1.705 $0.168 $2.816 1.60 12,560 4.3% 119 0.8% *** Village Totals *** $6.566 $0.836 $9.316 $3.477 = $13.630 2.08 49,189 16.9% 1,731 11.1% For Barrow: BO1 Showerhead Giveaway Resid $0.016 $0.103 $0.025 $0.000 $0.128 8.11 764 0.1% 0 0.0% B02 Effic. New Non-Res Bldgs Non-Res} $0.053 $0.000 $0.042 $0.139 $0.181 3.42 644 0.1% 111 0.2% B03 Non-Res Lighting Upgrades Non-Res| $0.210 $0.000 ($0.064) $0.463 $0.399 1.90 (1,834) 0.3% 655 1.4% B04 Compact Fluor. Giveaway Resid $0.180 $0.047 ($0.035) $0.189 $0.201 1.12 (1,331) 0.2% 325 0.7% BOS Effic. Free-Standing Htrs. Resid $0.194 ($0.030) $0.305 '$0.059) $0.216 1.11 13,986 2.5% (130) -0.3% *** Barrow Totals *** $0.652 $0.120 $0.273 $0.731 $1.124 1.72 12,229 2.2% 961 2.1% Descriptions of each column are provided in the text prior to this table. D-5 NORTH SLOPE BOROUGH ENERGY ASSESSMENT Assumptions for Energy Efficiency Program Analysis Table D-4 summarizes a number of the assumptions concerning the energy efficiency programs that were used in the economic analysis. The following descriptions and comments apply to numbered columns in the table. The limited budget for this project did not allow for detailed documentation of the calculations and data used to develop the material in the table. Further information is available from the author: Alan Mitchell; Analysis North; 911 W. 8th Avenue, Suite 204; Anchorage, AK 99501; Phone 907-272-3425. Column Descriptions and Comments for Table D-4 ne 2s ek Efficiency program code. Name of Efficiency Program. Type of building that program is applied to: Res = Residential Housing, Non-Res = Non-Residential Buildings. Indicates when the efficiency improvements are installed. "Retrofit" indicates that the improvements are performed immediately on existing buildings, replacing equipment before it normally retires. "Norm Repl" indicates that the improvement should be initiated on existing buildings at the point when the component or equipment is normally replaced. "New Constr" indicates that the efficiency improvement is to occur when a new building is being constructed. Costs and savings in this table are expressed on a per unit basis. For non-residential buildings the unit is "square foot", and for residential housing the unit is "household". The cost of the efficiency measure per unit of analysis (column 5). This figure includes design and program administration costs. For "Retrofit" (see column 4 description) programs, design and program administration costs were figured at 50% of direct costs (material, freight, and installation labor). For "Norm Repl" and "New Constr" programs (see column 4 description), design and program administration costs were figured at 25% of direct expenses. Life of the efficiency measure in years. Annual operation and maintenance benefits of the efficiency measure per unit of analysis (column 5). Negative numbers (indicated by parentheses) indicate that the efficiency measure increases operation and maintenance costs. Annual building fuel savings in million Btu per unit of analysis (column 5). Negative values mean that the efficiency measure increases fuel use, such as electricity-saving measures that increase space heating fuel use through a reduction of internal heat gains. D-6 NORTH SLOPE BOROUGH ENERGY ASSESSMENT 10. Be 12. 135 This analysis splits fuels costs into two separate components: the cost of fuel at the bulk storage facility and the delivery cost. Some large buildings such as schools have bulk storage facilities for fuel that eliminate much of the fuel delivery expense. The "% of Fuel Delivered" factor indicates what fraction of the fuel saved by the efficiency measure would have required delivery to a building. For efficiency measures applied to large buildings with their own storage, the factor would be 0%. For efficiency measures applied to buildings requiring fuel delivery, the factor is 100%. For an efficiency measure applying to a combination of both types of buildings, the factor is somewhere between 0% and 100%. Annual electricity savings in kilowatt-hours per unit of analysis (column 5). Negative values indicate that the efficiency program measure increases electricity use. Indicates the percentage of the building stock for "Retrofit" or "Norm Repl" measures or the percentage of new construction for "New Constr" measures that the efficiency measure could potentially apply to. Indicates the percentage of the building stock for "Retrofit" or "Norm Repl" measures or the percentage of new construction for "New Constr" measures that the efficiency program - is likely to affect. This figure is less than column 12 because the program will typically not reach all potential applications. However, the participation for the efficiency programs is assumed to be high because it is assumed that the program administrator will pay for the bulk of the costs for installing the efficiency measures. Table D-4 Assumptions for Energy Efficiency Program Analysis 1 2 3 4 5 6 iM 8 9 10 11 12 13 Bullding When Unit of Installed Life Operat. FuelSave %ofFuel ElecSave Potential Achievable Code Efficiency Program Type | Performed Analysis Cost Years & Maint. _MMBtu Delivered kWh _ Applications Applications For the Villages: VO1 Showerhead Giveaway Resid Retrofit household $35 15 $22 Urs 100% 0 60% 45% Vo2_ Effic. New Non-Res Bidgs Non-Res| New Constr square foot $7.00 30 $0.00 0.080 55% 4.50 100% 75% VO3 Replace Drip-Pot Burners Resid Retrofit household $2,250 10 ($45) 60 100% -520 24% 20% V04 Ventilation Air Control Non-Res| Retrofit square foot $2.25 15 ($0.045) 0.0402 20% 0.20 55% 50% VO5 Tune Heating Systems Resid Retrofit household $248 4 $0 8 100% oO 75% 68% Vo6 Efficient New Housing Resid | NewConstr household $4,230 20 ($25) 35 100% 100 100% 75% VoO7 Compact Fluor. Giveaway Resid Retrofit household $81 4 $6 -1.48 100% 361 100% 90% VO8 = Ceiling/Floor Insulation Resid Retrofit household $5,800 30 $0 35 100% 0 60% 55% Vo9 Non-Res Lighting Retrofits Non-Res| Retrofit square foot $2.23 16 $0.00 -0.0075 55% 2.70 100% 75% V10_ Improve Heating Efficiency Non-Res| Retrofit square foot $5.20 10 $0.36 0.037 80% 0.35 65% 55% *** Village Totals *** For Barrow: BO1 Showerhead Giveaway Resid Retrofit household $35 15 $22 a7, 100% Oo 60% 45% Bo2 Effic. New Non-Res Bldgs Non-Res}| New Constr square foot $2.75 30 $0.00 0.026 100% 450 100% 75% BO3 Non-Res Lighting Upgrades Non-Res} Norm Repl square foot $0.62 16 $0.00 -0.0042 100% 1.50 100% 65% BO4 Compact Fluor. Giveaway Resid Retrofit household $81 4 $6 -1.48 100% 361 100% 90% BOS Effic. Free-Standing Htrs. Resid | Norm Repl household $1,000 10 ($20) 56 100% (620) 40% 25% *** Barrow Totals *** Descriptions of each column are provided in the text prior to this table. D-8 NORTH SLOPE BOROUGH ENERGY ASSESSMENT Other General Assumptions A number of other general assumptions were used in the analysis, and some are summarized in the following table. Assumption Villages Barrow Number of new housing units to be constructed in the 78 80 10 years from 1995-2004, Mid Case. Number of new non-residential square feet to be con- structed in the 10 years from 1995-2004, Mid Case. 46,700 33,000 Total housing units in 1995. 634 999 Total non-residential square feet in 1995. 617,000 1,075,000 1995 Heating Fuel Cost without delivery to a building ae eon (Avoidable portion), $/MMBtu: Low, Mid , High Cases $12.30 $2.18 Heating Fuel Cost Escalation Rates (real, inflation- cal eo adjusted): Low, Mid, and High Cases. 1.23% 5% Avoidable Heating Fuel Delivery Cost, $/MMBtu. (assumed to be the same in all fuel cost cases and to $5.60 $0.00 have 0% real escalation). Fuel Cost Component of Electric Cost in 1995, $0.138 $0.000 $/kWh: Low, Mid, High Cases poe $0.016 . ’ ’ . $0.161 $0.033 Electric Fuel Cost Escalation Rates (real, inflation- ae os adjusted): Low, Mid, High Cases B.FS% 5% . ’ ' . 1.23% 5% Other avoidable Electric Costs in 1995, $/kWh. (assumed to be the same in all fuel cost cases and to $0.011 $0.021 have 0% real escalation). Total Fuel Consumption in 2004, Mid Case, MMBtu 292,000 556,000 Total Electric Consumption in 2004, Mid Case, MWh 15,600 46,200 Inflation-adjusted Discount Rate for calculating Present Value amounts = 5.0%. D-9 APPENDIX E System Design Basis and Cost Estimates NORTH SLOPE BOROUGH ENERGY ASSESSMENT APPENDIX E Pipeline and Gas Field Development Conversion of Generator Sets from Diesel to Natural Gas Engines Community Gas Distribution System Coal Fired Power Plant Sizing District Heating All Electric Heating Deadfall Syncline Mine Development High Voltage Transmission System Operating Scenarios and Cost Summaries E TABLES E-1 E-2 E-3 E-1 E-2 E-3 E-4 E-5 E-6 E-7 E-8 & E-9 E-10 E-11 E-12 E-13 NORTH SLOPE BOROUGH ENERGY ASSESSMENT APPENDIX E Walapka Gas Field Development Costs Gas Distribution System Estimate Summary of NSB Energy Alternatives Proposed Gas or District Heating Distribution Layout For: Atqasuk Nuiqsut Point Hope Point Lay Wainwright Natural Gas Burner Conversion Data Rural Alaska Coal Power Generating Plant Costs District Heating Distribution Piping System District Heating Supplemented by Existing Diesel Boiler Electric Space Heat Supplemented by Existing Diesel Boiler Packaged Electric Hydronic Boilers Alaska State Statute Title 18, Boiler Operator Regulations NORTH SLOPE BOROUGH ENERGY ASSESSMENT APPENDIX E System Design Basis and Cost Estimates This appendix provides a summary of the design basis assumptions and operating scenarios used in preparing the capital and operating cost estimates. The cost elements for each case are shown in attached Table E-3. 1. Pipeline and Gas Field Development: Based on the Walapka Gas Field Development Costs, Table E-1 provided in February 1992, unit costs based on this current Arctic project experience were developed for each of the following categories: ° 6" cross-country pipelines including VSMs, ice $560,000/mile roads for construction and manifold facilities. e 3" infield pipelines including VSMs, ice roads for $300,000/mile construction, pads and well houses and control power to well houses. e Seismic testing for Walapka area. $1,300,000 e Geoscience evaluation of seismic data. $500,000 e Drilling costs of gas wells. $1,900,000/well NORTH SLOPE BOROUGH ENERGY ASSESSMENT The above unit rates include the costs of project administration, professional services, miscellaneous costs such as lodging and transportation of personnel, mob/demob, equipment fuel usage and all materials, freight and labor. The development costs were discussed with assigned project personnel to account for any costs associated with the Barrow Gas Field or other non-recurring costs. It is felt that this cost structure is representative of project costs for similar development of the gas options considered for the North Slope Borough Villages. Conversion of Generator Sets from Diesel to Natural Gas Engines: For those scenarios where natural gas is considered to be the primary energy source for a community, a portion of the existing diesel generator sets are converted over to natural gas to provide adequate capacity for base load service with natural gas fuel. The conversion process results in a derating of the generator capacity and involves the replacement of the engine, installation of an aftercooler for the turbocharged combustion air system, and the installation of a new natural gas fuel system. The new engine is essentially a drop-in replacement of the old diesel unit and does not require significant rework of existing facilities. Based on cost information provided by N.C. Machinery, conversion cost estimates include the following considerations: ° New spark ignited natural gas fuel engine . Aftercooler e Installation labor, material and freight e Core value of old diesel engine ° One time avoidance of major overhaul costs for old diesel engine NORTH SLOPE BOROUGH ENERGY ASSESSMENT shown on Table E-2 and equipment cut sheets for natural gas burner conversions are attached for information, Figure E-6. The village gas distribution system configuration and installation cost estimates are based on recent projects completed in Barrow. Coal Fired Power Plant Sizing: Several previous design studies have been prepared for rural Alaska installations of coal fired plants. Plant capacities range in size from 1 MW up to 50+ MW. The attached graph, Figure E-7, summarizes these cost estimates in the form of a plot comparing plant costs to plant size. It graphically shows that smaller plants in the range of 1 - 10 MW experience considerably higher costs on a per kilowatt basis due to their small scale. Information sources for plant costs include: ° Ref. (18) District Central Heating System Wainwright July 1980, Arctic Slope Technical Services, pgs 30, 53. ° Correspondence with TAS Coal Systems, Mr. R. Sheahan, dated 2-11-92. ° Correspondence with SFT, Inc., Mr. L.S. Joachim, preliminary estimates, dated 2-24-92. e° Ref. (33) Northwest Alaska Coal Project Power Plant Evaluation Final Report, SFT, Inc., dated 9-91. E-4 NORTH SLOPE BOROUGH ENERGY ASSESSMENT e Communications with Golden Valley Electric Association, Inc., Mr. S. Haagenson, dated 2-12-92. The cost information from the above references has been adjusted for configurations which included district heating and electrical transmission systems. Also previous cost estimates were escalated at 4% per year to establish costs in 1991 dollars. The data summarized in this Figure E-7 is representative of electrical generation capacity and does not include distribution systems. In the economic model, fuel consumption has been modeled for electrical generation at a thermal plant efficiency of 25% and for district heating at 50% thermal plant efficiency. For the economic model, the plant sizing and associated capital costs are based on the MID-CASE electrical and heat demand forecast. The plants were sized at approximately 70% of the annual forecasted peak load, based on an economic analysis to determine the optimal plant sizing. The sizes chosen closely correlate to the maximum average monthly heating load associated with each community. As discussed in the respective scenarios, peaking electrical demand would be met with existing diesel generators. In the all electric space heating case, peak demand will be controlled by switching the larger users such as schools over to direct diesel heating for intermittent periods of time. E-5 NORTH SLOPE BOROUGH ENERGY ASSESSMENT District Heating: In the coal fired cogeneration scenarios, the plants were sized to meet both electrical and heating needs of each village by means of a district heating system. The system concept of above grade distribution piping using insulated pipe, half-culvert enclosures and wooden sleepers for support as described in reference 18, District Central Heating System for Wainwright, is preferred for reasons of maintainability and reduced installation costs. The cost estimates provided in reference 18 have been escalated at 4% per year to arrive at costs expressed in 1991 dollars. Heat losses from the district heating circulating piping system were estimated to be 10% for economic modeling purposes. The recommended routing for a district heating system is at the rear of adjoining properties similar to that described for the natural gas distribution system as shown in the attached village plot plans, Figures E-1 thru E-5. Also attached are Figures E-8 and E-9 from reference 18 showing the above grade distribution piping configuration. Circulating pumps and heat exchangers would be located at the power plant and individual user heat exchangers would be provided to interface with the existing heating systems. End user heating systems would have the controls set so the primary heat demand is met by district heat and peaking or back-up heat is provided by the existing units as shown in Figure E-10. Based on the quantity of unit installations and estimated footage for the distribution systems, the following costs were estimated for installing the district heating distribution system in each village: E-6 NORTH SLOPE BOROUGH ENERGY ASSESSMENT Atqasuk $2,200,000 Wainwright $5,300,000 Point Lay $2,100,000 Point Hope $6,900,000 All Electric Heating: In this configuration, the coal fired power plants are sized to provide electrical energy for heating homes and commercial/large public buildings as well as the current electrical needs. End user heating systems would be provided with an electric boiler which would interface with the existing diesel boiler. Boiler controls would be set so the primary heat demand is met by the electric unit as shown in Figure E-11. During periods of peak electrical demand, large users of heat such as schools would switch over to diesel heating as previously described in paragraph four. Attached are supplier cut sheets describing compact residential units and larger commercial electric boilers for heating systems, Figure E-12. Installations will likely require upgrades of electrical service drops to end users and may result in the need to upgrade village distribution systems. The following estimates include the cost for converting to electric space heat and reflects the potential costs to upgrade portions of the village electrical distribution systems. E-7 NORTH SLOPE BOROUGH ENERGY ASSESSMENT COST ESTIMATE RANGE Lower Range Upper Range Nuiqsut $ 600,000 $ 800,000 Atqasuk $ 600,000 $ 800,000 Wainwright $ 900,000 $1,200,000 Point Lay $ 400,000 $ 532,000 Point Hope $1,000,000 $1,330,000 Total Except Nuiqsut $2,900,000 $3,862,000 Deadfall Syncline Mine Development: Preparation of this cost estimate is based on an annual coal production rate of up to 100,000 ton per year. In this case the mine would be capable of supplying the needs of coal fired plants located in the villages of Wainwright, Point Lay and Point Hope or meeting the demands of a mine mouth 10 MW plant. The Aluaq Mine Study, Reference Document #4, provides an estimate basis for producing 1,000,000 tons per year. This document was used as the base source with selected elements such as Camp Development Costs and Production Equipment scaled for a reduced production rate. E-8 NORTH SLOPE BOROUGH ENERGY ASSESSMENT DFS Mine Development Cost Estimates Camp Development (Case 2) $1,200,000 5.4 Mile road @ $708,000/mile $3,800,000 Lagoon Stockpile Pad $ 400,000 Barge Slip $ 800,000 Production Equipment $4,000,000 Design and Construction Management $1,500,000 Permitting and ROWs $ 500,000 Contingency $3,000,000 Total $15,200,000 High Voltage Transmission System: In evaluating the installed costs of a high voltage transmission system, numerous sources were considered including previous cost estimates prepared for the North Slope Borough and ASRC, recent information from engineering and construction contractors of HV transmission systems and actual cost data for systems installed at the North Slope Oilfields. Reference documents #9 - Barrow Power Generation Study, #33 - NACP Power Plant Evaluation and #42 - Transmission Line - Barrow- Atqasuk- Wainwright identify the cost of HV transmission systems ranging from $70,000 to $165,000 per mile with costs adjusted to 1991 dollars. A recent estimate prepared by a firm experienced in Arctic powerline construction provides costs ranging from $270,000 to $375,000 per mile. Cost data provided for actual powerline installations at the North Slope Oilfields range from $350,000 to $450,000 per mile. The range in these estimates can, in part. be attributed to conceptual design variables such as pole spacings, single pole vs. H-frame structures, E-9 NORTH SLOPE BOROUGH ENERGY ASSESSMENT frequency of dead-end structures and design voltage levels. In addition to initial costs, these variables also impact long term maintenance costs, system reliability and the useful operating life of the system. With these considerations in mind an estimate range of $200,000 to $375,000 per mile was used in this assessment and the economic analysis will identify the economic limit of capital investment for a high voltage transmission system. ‘ost Estim Description Low High Kuparuk Industrial Center to Nuiqsut $ 6,000,000 $ 11,250,000 @ 30 miles Barrow to Point Hope @ 365 miles $73,000,000 $137,000,000 Barrow to Atqasuk @ 70 miles $14,000,000 $ 26,250,000 The reliability of an electrical transmission system is expected to be very high. Contacts with personnel responsible for operations of high voltage transmission lines for Golden Valley Electric Association and Chugach Electric Association confirm this. It is reasonable to expect an availability factor of 99%+ from a high quality transmission system. In most cases the interruptions are transient and the line is reclosed in a matter of minutes. The economic model allocates 97% availability to the transmission system to reflect conservative assumptions for local back-up diesel generation. E-10 NORTH SLOPE BOROUGH ENERGY ASSESSMENT Operating Scenarios and Cost Summaries: The following summary provides the annual non-fuel incremental operating cost relative to the "Base Case" for each scenario. As discussed previously in this report, this means that only those costs which differ from the diesel generation and space heating "Base Case" are identified. Several cost factors and assumptions are consistent across many of the scenarios and are summarized as follows: e All cases assume that utility operating and maintenance personnel will continue to be assigned to service the village utilities. Although alternative generation sources are considered, operating personnel must be prepared to maintain and operate the existing diesel generating facilities on short notice as back-up and peaking demands require. Additionally, in some scenarios, plant personnel will be required to perform additional responsibilities as in the cases of gas pipeline or well operations, high voltage transmission, or local coal plant operations. This will require training of personnel to assure they have the skills necessary to operate the utility systems safely and reliably. In most cases, it is expected that these additional responsibilities will also provide personal growth opportunities for interested individuals and diversity in their daily work activities. e For those scenarios where the diesel engines are being converted to natural gas service, the major overhaul periods are extended from 25,000 hours to 40,000 hours. The resulting cost savings are included in the economic analysis for these cases. ° For the case of Barrow generation, in those scenarios requiring diesel generators for back-up or peaking service, 97% transmission system availability has been assumed. This results in diesel generator operations for one week at full demand E-11 NORTH SLOPE BOROUGH ENERGY ASSESSMENT due to assumed transmission system failures and one hour per week for standby testing and loading throughout the year. Similarly, for coal and natural gas scenarios, a 94% availability is assumed to allow for maintenance and unanticipated outages of equipment. This case allows for diesel generator back- up operations of three weeks at full demand and one hour per week for standby testing and loading throughout the year. For the coal plant scenarios, four licensed steam boiler operators have been added to the utility staff of each plants to assure that a qualified operator is in attendance at all times for safe boiler operations. Attached Figure E-13 is a copy of the Alaska State Statute Title 18, Boiler Regulations. AS 18.60.395 and 8ACC80. 130 describe licensing requirements. It is to be noted that licensing of boiler operators is not mandatory in the state of Alaska, however, licensing Tequirements are established by employers. For coal plant scenarios in this assessment, it is assumed that one licensed operator is on each shift. An alternate consideration might be to have one licensed operator on only one shift per day and arrange for the licensed operator to be on call during non-working hours. Initially, it is likely that these personnel will be recruited form outside the local village. Over time, as skills and experience are gained by the local residents, licensed operators may be recruited locally. Labor estimates for licensed operators are based on 12 hour shifts, week on/off. Where identified, all consumable and maintenance labor costs are in addition to the costs currently incurred for the diesel generating facilities. E-12 NORTH SLOPE BOROUGH ENERGY ASSESSMENT Case summaries of annual non-fuel incremental operating costs: 1-4 AT Pipelin W. Fiel Quarterly service inspections by Sr. Gas $ 5,000 Operators from Barrow Consumables and maintenance labor $10,000 Annual pipeline inspection and maintenance $10,000 @ $250/mile x 40 miles Contingency @ 20% _$ 5,000 Total $30,000 Case 2-4 ATQ Gas Well at Atgasuk Quarterly service inspections by Sr. Gas $ 5,000 Operators from Barrow Consumables and maintenance labor $20,000 Professional Services of Reservoir/ Petroleum Engineer $10,000 Contingency 20% $ 7,000 Total (round to) $45,000 E-13 NORTH SLOPE BOROUGH ENERGY ASSESSMENT - Fir ion istrict Heat at A k Add four licensed operators to staff $452,000 Consumables and maintenance labor $ 20,000 Contingency $ 8,000 Total $480,000 4-5 AT! al Fir eneration with Electric Heat Same as Above Case 3-5 ATQ $480,000 Case 5-4 AIN Gas to Wainwright via Atqasuk Line Quarterly service inspections by Sr. Gas $ 5,000 Operators from Barrow Consumables and maintenance labor $10,000 Annual pipeline inspection and maintenance $18,750 @ $250/mile x 75 miles Contingency @ 20% $ 6,250 Total $40,000 E-14 NorTH SLOPE BOROUGH ENERGY ASSESSMENT Case 6-5 AIN Gas Wells at Wainwright Quarterly service inspections by Sr. Gas Operators from Barrow Consumables and maintenance labor Professional services of Reservoir/ Petroleum Engineer Contingency @ 20% Total (round to) 7 Fi neration Add four licensed operators to staff Consumables and maintenance labor Contingency Total C -5_AIN Coal Fired Same as above Case 7-5 E-15 Wainwrigh neration with Electri $ 5,000 $20,000 $10,000 -$ 7,000 $45,000 $452,000 $ 20,000 $480,000 t $480,000 NORTH SLOPE BOROUGH ENERGY ASSESSMENT Case 9-4 NUI Gas to Nuiqsut from KIC Quarterly service inspection by Sr. Gas $ 5,000 Operators from Barrow Consumables and maintenance labor $10,000 Annual pipeline inspection and maintenance @ $250/mile x 30 miles $ 7,500 Contingency @ 20% $ 4,500 Total $27,000 1 Dril Wells at Nui Quarterly service inspections by Sr. Gas $ 5,000 Operators from Barrow Consumables and maintenance labor $20,000 Professional services of a Reservoir/ Petroleum Engineer $10,000 Contingency @ 20% -$ 7,000 Total (round to) $45,000 E-16 NORTH SLOPE BOROUGH ENERGY ASSESSMENT -4 i issi ine from KI Nui Annual inspection and maintenance $20,000 -4 i Wi int La’ Use same basis as Case 10-4 NIU $45,000 13-5 PTL Fir eneration at Poin Use same basis as Case 4-5 AIN $480,000 14- Fi ion with Electric Hi Same as Case 13-5 PTL $480,000 15-5 PH' Fi ‘cogeneration at Point H Same as Case 13-5 PTL $480,000 E-17 NORTH SLOPE BOROUGH ENERGY ASSESSMENT 16-5 PH! Fi neration with Electric Hi Same as Case 15-5 PHO $480,000 17-6 Mine Mou! en Power plant staffing based on 12hr/shift, week on/off at 2200 hours/year for each position. 4- Licensed boiler operators $452,000 4- Assistant operators $320,000 2- Electricians $204,000 2- Mechanics $182,000 2- Roustabouts $114,000 2- Plant Supervisors _$226,000 $1,498,000 Consumable and maintenance $70,000 Contingency @ 20% (Cons. & Maint.) _$14,000 $1,584,000 Inspection and maintenance of transmission line at $500/mile x 365 miles $183,000 E-18 NORTH SLOPE BOROUGH ENERGY ASSESSMENT 18-6 Electrical Generation from Barrow to Point H Inspection and maintenance of transmission line @ $500/mile x 365 miles $183,000 19-6 Electri neration from Barrow to Atqasuk Inspection and maintenance of transmission line @ $500/mile x 70 miles $ 35,000 E-19 WALAPKA GAS FIELD DEVELOPMENT - - casts z Administration : Wages, Utilities, etc. $632,526 3 Professional Fees $3,902,000 . oft Costs: Billeting, Fuel etc $1,365,500 g Direct Drilling $14,842,000 Pipeline $8,100,000 z Infield Piping $2,100,000 : Seismic $2,128,000 : Geoscience $954,000 Sum Total $34,024,026 SENT BY‘NORTH SLOPE BOROUGH Village Res/SmPubUnits Comm/LgPubUnits LFT Gas Line Materials Trench&install Freight Mob/Demob Design&CM BoilerConvRes/SmPub BoilerConvComm/LgPub Contingency TOTAL Table E-2 Gas Distribution System Estimate Atqasuk 52 10 10700 $115,000 $270,000 $40,000 $100,000 $55,000 $32,000 $150,000 $90,000 $852,000 Nuiqsut Pt Hope 89 173 7 10 23500 35700 $160,000 $290,000 $590,000 $900,000 $70,000 $70,000 $100,000 $100,000 $90,000 $135,000 $55,000 $105,000 $85,000 $150,000 $150,000 $225,000 $1,300,000 $1,975,000 Pt Lay 35 5 11800 $80,000 $295,000 $20,000 $100,000 $50,000 $21,000 $75,000 $80,000 $721,000 Wainwright 125 11 28000 $240,000 $700,000 $50,000 $100,000 $110,000 $75,000 $165,000 $180,000 $1,620,000 NORTH SLOPE BOROUGH ENERGY ASSESSMENT TABLE E-3 SUMMARY OF NSB ENERGY ALTERNATIVES 1-4-ATQ Gas Pipeline to Atqasuk From Walakpa Field $28,120 2-4-ATQ Drill Gas Wells at Atqasuk $3,920 - $18,720 3-5-ATQ | Coal Fired Cogeneration at Atqasuk $11,500 $480 -5-ATQ Coal Fired Generation With All Electric Heating Capital Cost (in thousands) NIOC/YR (in thousands) $480 sé 15-5-PHO | Coal Fired Cogeneration at Pt. Hope $32,900 $480 $29,100 $480 4. ; $30 4 ; ,920 - $18, $45 eae ay 1 7 4-5- i ; $480 $40 $45 $480 , ; ; $27 J ; ; ,330 - $19, $45 600 - $11, $20 - $20, $45 80 8-5-AIN Coal Fired Generation With All Electric Heat $29,000 $480 16-5-PHO | Coal Fired Generation w/All Electric Heating at Pt. Hope NORTH SLOPE BOROUGH ENERGY ASSESSMENT SUMMARY OF NSB ENERGY ALTERNATIVES eee NIOC/YR (in ii (in thousands) Mine Mouth Generation With Electric Transmission Line to Pt. Hope, $124, 100 - $1,767 Pt. Lay, Wainwright, Atqasuk & Barrow $188,000 Electrical Generation From Barrow With Transmission to Atqasuk, $80,200 - $183 Wainwright, Pt. Lay & Pt. Hope $144,200 fi9-6 | Electrical Generation From Barrow With Transmission to Atqasuk $15,000 - $27,000 Note: NIOC/YR = Non-fuel Incremental Operating Cost/Year Description NoRTH SLOPE BOROUGH ENERGY ASSESSMENT NORTH SLOPE BOROUGH ENERGY ASSESSMENT Capital Case No. Description Cost (in thousands) Case 1-4 ATQ Gas to Atqasuk from Walakpa Gas Field $28,120 Cross country gas line from Walakpa manifold building to Atqasuk $27,000 $30 (40 miles) and gas treating facilities. Conversion of (1) diesel generator (3512/550 kw) to natural gas for base load. NICO/YR (in thousands) $220 $ S Distribution facilities and conversion of space heating to natural gas or dual fuel service (gas & diesel) for backup. N N A A Continue pilot coal project for space heating supplement. a Maintain (2) diesel generators for peaking and back-up _— $3,920 - $18,720 $2,800 - $17,600 $220 Case 2-4 ATQ Drill Gas Wells at Atqasuk Drill Gas wells in vicinity of Atqasuk and gas treating facilities. $45 Convert (1) diesel generator (3512/550 kw) to natural gas. Distribution facilities and conversion of space heating to natural gas or dual fuel service (gas & diesel) for backup. Continue pilot coal project for space heating supplement. N/A Pe Maintain (2) diesel generators for peaking and back-up. N/A NORTH SLOPE BOROUGH ENERGY ASSESSMENT NORTH SLOPE BOROUGH ENERGY ASSESSMENT Capital Case No. Description Cost NICO/YR (in thousands) (in thousands) Case 3-5 ATQ Coal Fired Cogeneration at Atqasuk $11,500 Continue pilot coal project for space heating supplement. Maintain diesel generators for back-up ame 1.0 MW base load boiler/turbine generator/coal storage. $9,300 $480 Maintain diesel space heating for back-up : a0 Atqasuk mine development and coal transportation costs. District heating facilities including heat exchangers/pumps/ $2,200 distribution system/user exchangers. Case 4-5 ATQ Coal Fired Generation w/All Electric Heating in Atqasuk $9,900 1.5 MW base load boiler/turbine generator/coal storage. $9,300 Atqasuk mine development and coal transportation costs $480 Continue pilot coal project for space heating supplement Maintain diesel generators for back-up Maintain diesel space heating for back-up. Upgrade electric distribution and install electric heating units. N/A N/A N/A $600 N/A N/A N/A NORTH SLOPE BOROUGH ENERGY ASSESSMENT NORTH SLOPE BOROUGH ENERGY ASSESSMENT Capital Case No. Description Cost NICO/YR (in thousands) (in thousands) Case 5-4 AIN Gas to Wainwright Via Atqasuk Line a Oe, Cross country line from Walakpa field via Atqasuk line (75 miles) $50,400 $40 and gas treating facilities. Convert (2) diesel generator set (3508/365 kw) to natural gas for $350 Distribution facilities and conversion of space heating to natural gas $1,700 or dual fuel (gas & diesel) as backup. Continue pilot coal project for space heating supplement. PMO ese NT Maintain (3) diesel generator sets for peaking and back-up. MeN AS Case 6-4 AIN Drill Gas Wells at Wainwright $6,650 - $21,450 Drill Gas wells in vicinity of Wainwright and gas treating facilities. | $4,600 - $19,400 $45 Convert (2) diesel generator set (3508/365 kw) to natural gas. $350 Distribution facilities and convert space heating to natural gas or $1,700 dual fuel service (gas & diesel) for backup. Continue pilot coal project for space heating supplement. NNN eee a NAA N/A Maintain (3) diesel generator sets for peaking and back-up. NORTH SLOPE BOROUGH ENERGY ASSESSMENT NORTH SLOPE BOROUGH ENERGY ASSESSMENT Case 7-5 AIN Coal Fired Cogeneration at Wainwright | g3i300 | Ps 2.0 MW base load boiler/turbine generator/coal storage $10,800 $480 Deadfall Syncline mine development and coal transportation to $15,200 generating site. District heating facilities including heat exchanger/pumps/piping $5,300 system/user exchangers. Capital Cost (in thousands) NICO/YR (in thousands) Continue pilot coal project for space heating supplement. Maintain diesel generators for back-up and peaking. Maintain diesel space heating for back-up. Case 8-5 AIN Coal Fired Generation w/All Electric Heat $29,000 |__| SMW tase toad boiterturbine generatr/eoal storage. | $12,900 | S480 [Paste ererntemenee [sey [OT generating site. |__| Upgrade etectric distribution and instal electric heating units. | $900 | |__| Continue pitot coal project for space heating supplement. | A | | wa | | i 3 wa | A Maintain diesel generator for back-up. Maintain diesel space heating for back-up. NORTH SLOPE BOROUGH ENERGY ASSESSMENT NORTH SLOPE BOROUGH ENERGY ASSESSMENT Capital Description Cost NICO/YR Case No. (in thousands) (in thousands) Case 9-4 NUI Gas to Nuiqsut From KIC $29,530 Cross country line from KIC to Nuiqust (approx. 30 miles) and gas $28,000 $ treating facilities Convert (2) diesel generator sets to natural gas for base load $230 (3406/210 kw) Distribution facilities and conversion of space heating to natural gas $1,300 or duel fuel (gas & diesel) as back-up. Maintain (3) diesel generator sets for peaking and back-up. N/ 27 ms Case 10-4 NUI | Drill Gas Wells at Nuiqust $4,330 - $19,130 Drill Gas wells in vicinity of Nuiqsut and gas treating facilities $2,800 - $17,600 $45 Convert (2) diesel generator set (3406/210 kw) to natural gas for $230 base load. Distribution facilities and conversion of space heating to natural gas $1,300 or dual fuel (gas & diesel) as back-up. HA Maintain (3) diesel generator sets for peaking and back-up. NORTH SLOPE BOROUGH ENERGY ASSESSMENT NORTH SLOPE BOROUGH ENERGY ASSESSMENT Case No. Description (in thousands) $6,600 - $11,850 $6,000 - $11,250 $20 $ (in thousands) Case 11-4 NUI | Electrical Transmission from KIC to Nuiqsut Install high voltage transmission system (approx. 30 miles). S Upgrade community electrical distribution and install electric space heating. Maintain community diesel generation set for back-up and peaking. N/A Maintain diesel space heating for back-up. N/A Case 12-4 PTL | Drill Gas Wells at Pt. Lay $5,540 - $20,340 $4,600 - $19,400 $210 $730 Drill Gas wells in vicinity of Pt. Lay and gas treating facilities. $45 Convert (2) diesel generators (3306/150 kw) to natural gas. Distribution facilities and conversion of space heating to natural gas or dual fuel service (gas & diesel) for backup. N N ~~ A A Continue pilot coal project for space heating supplement. ~~ Maintain (1) diesel generator for peaking and back-up. NORTH SLOPE BOROUGH ENERGY ASSESSMENT NORTH SLOPE BOROUGH ENERGY ASSESSMENT Capital Case No. Description Cost NICO/YR (in thousands) (in thousands) Case 13-5 PTL | Coal Fired Cogeneration at Pt. Lay $26,600 a 1.0 MW base load boilers/turbine generator/coal storage. $9,300 $480 Deadfall Syncline mine development and transportation of coal to $15,200 a Pt. Lay. Space heating with coal by end users as an alternate to district heating Maintain diesel generator sets for back-up. Maintain diesel space heating for back-up. Case 14-5 PTL | Coal Fired Generation w/All Electric Heating at Pt. Lay 1.5 MW base load boilers/turbine generator/coal storage. District heating facilities including heat exchangers/pumps/piping $2,100 system/user exchangers. NORTH SLOPE BOROUGH ENERGY ASSESSMENT AAACN VVTAIVVE Maintain diesel space heating for back-up N/A NORTH SLOPE BOROUGH ENERGY ASSESSMENT Capital Cost (in thousands) Description NICO/YR (in thousands) Maintain diesel generator for back-up. Case 15-5 PHO | Coal Fired Cogeneration at Pt. Hope | $32,900 | 2.0 MW base load boilers/turbine generator/coal storage $10,800 $480 Deadfall Syncline mine development and transportation of coal to $15,200 Pt. Hope. District heating facilities including heat exchangers/pumps/piping $6,900 system/user exchangers. Space heating with coal by end users as an alternate to district heating. N/A Maintain diesel generator sets for back-up Maintain diesel space heating for back-up Case 16-5 PHO | Coal Fired Generation w/All Electric Heating to Pt. Hope | $29,100 | 3.0 MW base load boilers/turbine generator/coal storage. $12,900 $480 Deadfall Syncline mine development and transportation of coal to $15,200 Pt. Hope. 10 NORTH SLOPE BOROUGH ENERGY ASSESSMENT NORTH SLOPE BOROUGH ENERGY ASSESSMENT Capital Description Cost NICO/YR (in thousands) (in thousands) Upgrade electric distribution and install electric heating units. Space heating with coal by end users as a supplement to electric heating. Maintain diesel generator for back-up. Maintain diesel space heating for back-up. Mine Mouth Generation with Electric Transmission to Pt. Hope, $124,100 - Pt. Lay, Wainwright, Atqasuk & Barrow $188,000 10 MW base load boilers/turbine generator/coal storage facility. $32,000 Deadfall Syncline mine development and operation. $15,200 High voltage transmission system (approx. 365 miles). Upgrade community electrical distribution and install electric space heating. Maintain community diesel generator sets for back-up. Maintain diesel space heating for back-up. Continue pilot coal project for space heating supplement. 11 NORTH SLOPE BOROUGH ENERGY ASSESSMENT NORTH SLOPE BOROUGH ENERGY ASSESSMENT Capital Case No. Description Cost NICO/YR (in thousands) (in thousands) Case 18-6 Electrical Generation from Barrow With Transmission to $80,200 - Atqasuk, Wainwright, Pt. Lay & Pt. Hope $144,200 Increase waste heat recovery electrical generation capacity in $3,300 Barrow. (2000 kw) High voltage transmission system (approx. 365 miles). $73,000 - $137,000 $183 Upgrade community electrical distribution and install electric space $3,900 heating, except Barrow. Maintain community diesel generator sets for back-up. N/A Maintain diesel space heating for back-up. N/A Continue pilot coal project for space heating supplement. N/A 12 NORTH SLOPE BOROUGH ENERGY ASSESSMENT NORTH SLOPE BOROUGH ENERGY ASSESSMENT Capital Cost NICO/YR (in thousands) (in thousands) Electrical Generation from Barrow With Transmission to $14,600 - $26,850 Atqasuk $14,000 - $26,250 Upgrade community electrical distribution and install electric space heating in Atqasuk. Maintain diesel space heating for back- PL poe) rH Continue pilot coal project for space heating supplement. VT ence EL Maintain community diesel generator sets for back-up. N/A i i up. N/A j i : N/A 13 FIGURE E-1 LEGEND: NSB REAL PROPERTY (August, 1990) 1. School Classrooms (4-Plex) . Health Clinic , Public Safety Office . Fire Station . Warm Storage & Shop . School Complex . Utility Bldg. - . Generator Facility . CATV Headend Bldg. . Telephone CDO Bldg. . Storage . USDW , City Office . NSB Garage PROPOSED GAS OR DISTRICT HEATING DISTRIBUTION LAYOUT FOR ATQASUK, ALASKA FIGURE E-2 LEGEND: NSB REAL PROPERTY ‘Date Unknown, Room $2 c. Primary Classroom #3 d. Generator Shed #4 e. Storage Shed #6 f£ Bunkhouse #7 g. Teacher Housing #8 h. Teacher Housing #9 i Teacher Housing $10 i Storage Garage #12 4. Health Qinic . Public Safety ABldg. 1. Aiport Terminal Bldg. 2 Worm Storage & Shop J. Old School Complex @. Classroom #1 b. Multi-Purpose . Teachers Four—Plex 5. Fire Station a 2. Generator Facility i. Water Treatment Foc. . Tonk Farm 5. Central Dial Ofice j. CATV Headend Bidg. O a Es <— eal ae ES 0 a ee a a Ce © Y << O a Ea Q © A, Oo re Oy DISTRIBUTION LAYOUT FOR NUIQSUT ALASKA ) 8 “ cD S | D 3S fe] SS D § 2 23 > ca Ss & i 5 ae S aq e.any GG CS 2 = ER) 5.8 ww ~ | BSyesgrses, SE BS Hs = > ——— os os _ Qc eS ESEGEEEEx~ ES SF EF BE a) eeeee Ss & S 4 ~ e S20 wa] SEScBSRRBBSRES LS SS Ez a a SS ssouSldusssst PSeSeESsss & 3s a 4 & ~uy Ds SELSBSEBRBROR o xm oeoOKY uy Salt 26S _ SSSsgssy SS E"ESC*tS Sa ~ SS sss SesSSSSSSSTSSLSRTESL oS} PC SPSFRUGGFLCLLLSHSHTTESSSISS = as Sees = eee ee re 2 ANS ¥GGNGISHAUYGSNSISANIA ALASKA ? DISTRIBUTION LAYOUT FOR POINT HOPE O J Es < [=] an b = Oe, E ee a a O Y < O a fs wn” Oo a, Oo ae A, FIGURE E-4 LEGEND: NSB REAL PROPERTY October, 1989 1. Central Dial Office 2. Vehicle Maint. Warm Storage J. Water Treatment Facility 4. Generator Plant — ™ 5. Construction Camp 6. Community Center 7. Fire Station & Elementary & High School Complex 9. Teacher's Quarters 10. Health Clinic PROPOSED GAS OR DISTRICT HEATING DISTRIBUTION LAYOUT FOR POINT LAY, ALASKA FIGURE E-5 LEGEND: NSB REAL PROPERTY (Date Unknown) 1. Tonk Farm-Shop #1 2. Tank Farm—Shop 42 3. Elementary & High Sch. Complex a. Utility Bldg. b. Elementary & H.S. Pool Addition c. Acedemic and Gymnosium Complex d. Voc Ed/Shop & Village Generator Plant 4. Four-Plex #1 5. Four-Plex #2 6. Public Safety Office 7. Fire Station 8 Water/Sewer Treatment Facility a. Laundry & Water Treatment Fac. b. Generator Bldg. c. Shop/Garage Bldg. 9. Health Clinic 10. Old B.A. School Complex a. Classrooms b. Maintenance Shed ¢. Teacher Housing #1 a. Emergency Generator Plant e. Storage Bldg. ft Storage Bldg. g. Storage Bldg. A. classrooms i. Studio Apt. J Storage Bldg. k. Storage Bldg. 11. Vehicle Maint. & Warm Storage Fac. 12. Old Clinic 13. Teacher Housing 14. Central Dial Office 15. CATV Headend Bldg. 16. Generator Bidg. - TE PROPOSED GAS OR DISTRICT HEATING DISTRIBUTION LAYOUT FOR WAINWRIGHT, ALASKA FEB-27-1992 11:37 FROM AK PIPE ANC/CMCL , FIGURE E-6 EXCLUSIVE ADJUSTABLE FLAME SPREADER — SAVES GAS & CASH Wayne's new compact power gos burner fea- tures on exclusive adjustable flame spreader which propertly sizes the flame to a round, square or rectangular shoped combustion chamber, Tests prove thar this design reduces the gas heat- ing costo minimum of 10% over o non- odjustoble type bumer, Your inventory can be drastically reduced by stocking only one bumer which conforms to various appliances. Addi- tional gas is saved due to electronic ignition — WAYNE HOME EQUIPMENT 601 GLAsGow AVE., FORT WAYNE, IND. 46809 TO 3434213 P.8 on the pilot is on only during the heating cycle. Optional standing pilots are olso available for boilers with rankless coils or water heaters. Wayne's unique forced droft design provides the precise amount of air for flame retention and overpowers poor flue conditions. Oil fired boil- ens, furnoces and water heaters con be essily converted to clean and efficient, low cost natural OF propene gas. & Scott Fetzer company FEB-27-1992 11:38 FROM AK PIPE ANC/CMCL TO MAXIMUM 8TU INPUT MINIMUM BTU INPUT 50,000 COMBUSTION CHAMBER 7” Wide, 8” Long SIZE — Minimum Dimensions 7” High or 8” Round GAS PRESSURE REQUIRED Natural Gas ..........0seceee 4.5" to 10.5" WC. Lengt A94213 P.@9 24 Volt Combination Gas Valve Standing Pilot Electronic Available VOLTAGE 420 Volt 60 Hz | | GAS CONNECTION Ye" NPT Adj. Flange Standard Pedestal Optional! MOUNTING Over 100 Years Leadership in the Manufacture of Burners and Boiler Equipment RAW POWER PRESSURE BURNERS FULLY AUTOMATIC FOR NATURAL GAS OR LIGHT OIL Listed by Underwriters’ Laboratories, Inc. Size 2, PCPF TYPE Ray Type PCP Combination Gas and Oil pressure burners produce high combustion efficiency over wide capacity requirements. These heavy duty burners, in appropriate sizes, have a capacity range of three to forty-seven gallons of oil per hour or equivalent gas capacity of 420,000 to 6,600,000 BTU per hour. Special aluminum alloy housing, precision machining and balancing, and rugged construc- tion are features of this quiet operating burner. All are fully automatic and equipped with the latest types of safety and operating controls. These controls are mounted and wired as an integral part of the burner FULLY AUTOMATIC ELECTRONIC CONTROL INSTANT FUEL CHANGEOVER FORCED DRAFT APPLICATION PCP making them ideal for use on boilers as packaged boiler- burner units. Ray fully automatic combination gas-oil pressure burners are manufactured to cover a wide range of heating re- quirements and have particular value where continuous uninterrupted heat is imperative. Within their capacity range, they are ideal for homes, apartments, churches, schools, hospitals, stores, shops, bake ovens, kilns, galvan- izing pots, forges, ranges, incinerators, power boilers and many other heating purposes. This type of burner is indispensable where gas utilities demand standby oil heating facilities. RAY BURNER CO. 1301 SAN JOSE AVENUE - SAN FRANCISCO, CALIFORNIA 94112 DISTRIBUTORS IN MOST PRINCIPAL CITIES OF THE WORLD 410-1 410-1 GENERAL FEATURES OF RAY TYPE PCP BURNERS Operation and Construction: Ray Type PCP com- bination burners are for use with diesel oil, #2 C.S.G. or lighter fuels and natural gas. They are high pressure atomizing burners which furnish 100% of the combus- tion air through the burner for firing rates up to rated capacity. Oil atomization is accomplished through pres- sure generated by a gear type high-speed fuel pump assem- bled as a unit with an oil strainer and pressure regulating valve which is an integral part of the burner. Injection of oil by pressure through the nozzles produces a very fine oil spray. Air is delivered by a multi-vane fan through a steel non-reverberating blower tube equipped with a Ray combustion head and is intimately mixed with the oil mist for efficient combustion. The gas is introduced through a double wall blower tube and in- jected into the air just before it enters the combustion chamber. The main housing is cast aluminum alloy upon which is mounted the motor, fan, ignition transformer and two- stage fuel pump. The steel blower tube extends from this housing into the combustion chamber and contains the atomizing nozzles and electric ignition system. Parts in this blower tube are assembled together and are easily removable for inspection and service. The burner is one completely assembled unit. Moter: Burners can be used to fire with natural draft, induced draft, or against positive combustion chamber pressure. In many cases, using the 3450 RPM motor and a sealed combustion chamber, the heat receiver can be fired under forced draft operating conditions, the burner air pressure being sufficient to overcome flue passage losses and expel the flve gas from the breeching. Burners with 1725 RPM motors require negative combustion chamber pressure conditions or natural or induced draft. Standard with 3450 RPM. Available in 1725 RPM on special order. Over 100 Years Leadership in the Manufacture of Burners and Boiler Equipment SIZE 1, PCP Pedestal mounted showing gas pilot Capacity: Three to nine gallons of oil per hour — 420,000 to 1,260,000 BTU/hr. (See capacity rating table.) Motor: 1/, H.P., 3450 RPM. Barrel Length: 10” extending 4¥2” through furnace plate. Nozzle: Specify GPH when ordering. Mounting: Adjustable pedestal standard. Resilient flange mount- ing available at extra cost. Flange mounting specified PCPF. Standard Equipment: Electronic control, one limit control, oil check valve, combustion head, electric gas and oil valves, manual gas cocks, two hex keys and instruction book. Finish: Blue Hammertone. Shipping Weight: Approximate crated shipping weight 130 lbs., cube 9 ft. SIZE 3, PCPF Flange mounting showing 2-stage firing system Capacity: Eighteen to thirty gallons of oil per hour—2,500,000 to 4,200,000 BTU/hr. Motor: 1'. H.P., 3450 RPM. Barrel Length: 10” extending 412" through furnace plate. Nozzles: Standard assembly with multiple variable flow rate nozzles. Specify GPH when ordering. Mounting: Adjustable pedestal standard. Resilient flange mount- ing available at extra cost. Flange mounting specified PCPF. Standard Equipment: Electronic control, electric gas and oil valves, manual gas cocks, high and low gas pressure interlocks, low-fire start (usable as high-low fire modulating system by the addition of an extra limit control), limit control, oil check valve, three hex keys and instruction book. Finish: Blue Hammertone. Shipping Weight: Approximate crated shipping weight 275 lbs., cube 18 ft. Over 100 Years Leadership in the Manufacture of Burners and Boiler Equipment 410-1 a SIZE 2, PCPSF Inverted type for Scotch Marine application (Shows optional full modulation) Capacity: Seven to eighteen gallons of oil per hour—1,000,000 to 2,520,000 BTU/hr. Motor: 3/4 H.P., 3450 RPM. Barrel Length: 10” extending 4%” through furnace plate. Nozzles: Standard assembly with multiple nozzles. Specify GPH when ordering. Mounting: Adjustable pedestal standard. Resilient flange mount- ing available at extra cost. Flange mounting specified PCPF. Standard Equipment: Same as Size 1. Finish: Blue Hammertone. ‘Shipping Weight: Approximate crated shipping weight 205 lbs., cube 14 ft. SIZE 5, PCP Showing optional full modulation Capacity: Thirty to forty-seven gallons of oil per hour—4,200,000 to 6,580,000 BTU/hr. Motor: 3 H.P., 3450 RPM, 3-phase only. Barrel Length: 12” extending 442” through furnace plate. Nozzles: Variable flow multiple nozzles. Mounting: Adjustable pedestal standard. Resilient flange mount- ing available at extra cost. Flange mounting specified PCPF. Standard Equipment: Same as Size 3. Finish: Blue Hammertone. Shipping Weight: Approximate crated shipping weight 400 Ibs., cube 26 ft. Controls: All units are furnished with electronic con- trols the entire system mounted and wired on the burner. Variou: types of controls are available, and desired type should be specified with order. Where control cabinet is required, the size and type is determined by the size and complement of the controls specified. An electric oil valve controls the oil supply to the nozzles, while electric operated gas valves controls the gas supply. Sizes 1 and 2 burners are available with three specifica- tions — fixed fire, low-fire start, or full modulation, with the maximum rate in each case determined by the nozzles furnished. GPH should be specified when ordering. Sizes 3 and 5 burners are available with either the low-fire start or full modulation. In either case, the burner advances gradually to a high fire setting. The low-fire start system may be used as a high-low firing system by use of an extra limit control. Return to low-fire occurs (1) upon burner shutdown, (2) when being used as a high-low fire system or (3) in event of flame failure. Gas input rates are ad- justed at the job to match the oil input rates. A gas butter- fly valve operates from the low-fire system to vary the gas fire and is mounted as part of the burner assembly. An air supply safety switch is mounted on all PCP burners to insure operation of the fan before the gas valve can operate. It serves to assure the air supply for safe com- bustion. This switch immediately shuts off the main gas valve in the event of air supply failure. Air Control: When Sizes 1 or 2 fixed fire burners are specified, the air inlet shutters can be set and locked in any position desired. On variable firing rate systems, such as the low-fire start or full modulation, the air shut- ters operate automatically to match air input to fuel input. Air is introduced into the combustion chamber through a combustion head mounted in the end of the blower tube. This device produces a very even, highly efficient flame which is stable even under adverse refractory and draft conditions. Because of the use of larger diameter fans and the air pressure differential through the combustion head, draft fluctuations have little effect on the operation and efficiency of this burner. Extremely high CO, set- tings can be realized with this equipment if desired. 410-1 Nozzles: Burners use single or multiple nozzles depend- ing on firing rate and burner size Fuel Changeover: A gas-oil selector switch is mounted on the burner and selection of fuel to be burned is made by merely moving the selector to either “gas” or “oil.” No other operation is necessary to change from one fuel to another. Automatic electric changeover with a patented purge system is available as an option. Electrical Characteristics: | These burners are avail- able in all common electrical specifications. Sizes 1, 2 and 3 can be furnished with either single or 3-phase motors. 3-phase motors are standard on Size 5. Ignition: The ignition for oil firing is by electric spark from a 10,000 volt transformer mounted on the burner. The Ray Ir-RAY-diator, a specially designed radioactive safety device, is standard equipment on all PCP burners, and provides a field of free electrons in the spark gap for sure-fire ignition and elimination of spark delay. This bridge of free electrons is insurance against a major cause of ignition failures and poor burner performance. In addi- tion to increasing ignition reliability, the Ir-RAY-diator helps lengthen transformer and ignition-tip life and pro- longs burner dependability. PCP burners use a separate gas pilot system for igni- tion when gas is being used as the main fuel. This pilot = Over 100 Years Leadership in the Manufacture of Burners and Boiler Equipment system consists of the pilot assembly, pilot solenoid valve, and a 6,000 volt pilot ignition transformer all mounted and wired on the burner. This unique pilot is supplied with air under pressure from the burner blower so its operation does not depend on firebox draft for its air supply. This also allows the pilot to operate even in forced draft conditions where positive firebox pressure would normally preclude use of an atmospheric type pilot. Mounting: All PCP burners are furnished standard with pedestal mounting. Flange mounting is available at extra cost. When specifying flange mounting, add the letter “F” to the burner designation (e.g. PCPF). All sizes are also available in flange mounted inverted models for ap- plication to Scotch Marine boilers. With the fan housing mounted below the blower tube, there is no possibility of interference with boiler doors. This type of burner is designated PCPSF. Standard Equipment: Standard equipment for all sizes includes electronic control, electic gas and oil valves, manual main and pilot gas shutoff cocks, pilot regulator, limit control, check valve, and combustion head. Guarantee: All Ray burners aré guaranteed for one year from date of shipment against any defects in material or workmanship. HOURLY CAPACITY RATINGS? Oil Equivalent Heat Capacity Boiler U.S. Gallons HP Equivalent* Lbs. Steam Generated BTU Capacity Input Thou. Motor- — Gas Equivalent ized Press. at Sq. Ft. Steam Gas Burner Radiation Valve _ Inlet Size In. WC Con” Motor Horsepower Min. Max. Min. = Max. Min. = Max. in, Max. Min. = Max. 3450 RPM 1-PCP 3 2 10 30 345 1035 2-PCP 7 18 23 60 800 2070 3-PCP 18 30 100 = 2070 3450 5-PCP 30 47 157 3450 5417 {Sea level ratings. *Steam capacity based on steam F & A 212°F, 1400 4200 WV” Wy” 3220 8400 2m 2” 8400 14000 2” 2” 14000 22000 3” af Heating capacities cre based upon 140,000 btu per gal. of oi! or equivalent gas btu input and upon an overall efficiency of 80%. When variable firing rate equipment is used, a low-fire start or modulated rate, down to approximately 40%, of these minimum and maximum values, can be obtained on "P" type burners. These ratings are predicated upon specified conditions of draft and furnace volume. It may be permissible, under desirable conditions, to operate at higher rates, or advisable under restricted conditions, to operate at reduced rates. CATALOG NO. 410-1 2500 1/e2 cPC MAR-22-1982 @9:@9 FROM AK PIPE ANC/CYEL TO 3494213 P.@3 PRICE BULLETIN NO. 990 RAY BURNER COMPANY . January 1, 1988 Page #2 PRESSURE BURNERS - PRICE SHEETS: SIZE th (FF) (2-8M) (MM) CAT. FIXED TWO STAGE FULL REF, FIRE FIRING MODULATION $2 O1L PDF(SF) 270-1 $2,286.00 $3,598.00 $3,882.00 NATURAL GAS PGPF(SF) 320-1 $3,484.00 $4,617.00 $4,963.00 PCPF(SF) 410-1 $4,220.00 $5,404.00 $5,881.00 Fox standard equipment - see pages 8 - 9 For options - see pages 22 - 33 SIZE #2 (FF) (2-SM) (4M) CAT. FIXED TWO STAGE FULL + REF, FIRE FIRING MODULATION #201L, PDF(SF) 270-1 $2,713.00 $3,919.00 $4,236.00 NATURAL _GAS : PGPF(SF) 320-1 $4,070.00 $5,152.00 $8,499.00 COMBINATION #2 OLL/GAS , PCPF(SF) 410-1 $4,878.00 $6,066.00 $6,564.00 For standard equipment - sée pages 10 = 11 For options - see pages 22 ~ 33 MAR-@2-1952 @9:@9 FROM AK PIPE ANC/CMCL TO 3494213 P.@9 RAY BURNER COMPANY PRICE BULLETIN NO. 990 January 1, 19688 Page #1 \_/ PRESSURE BURNERS - PRICE SHEETS: cat. FIXED FIRE ONLY REF. NATURAL GAS ONLY Z 28o pa oat eee MUUIN) = BLZ6 J 32d-1 $1,320.00 For standard equipment - see page 5 For options ~ call factory 7 SIZE $1 (FF) (2-$M) (MM) CAT. FIXED TWO STAGE FULL REF. FIRE FIRING MODULATION b2O1n {1) SPE 270-1 $1,383.00 $2,882.00 $3,306.00 NATURAL GAS (2) (2) (2) JGE 320-2A $2,209.00 $3,708.00 $4,006.00 COMBINATION #2 OLL/GAS (3) (3) (3) JCE 150-1 $3,492.00 $4,992.00 $5,289.00 For standard equipment - see pages 6-7 For options - see pages 22 - 33. (1) For reduce input start - RIS (extra ofl valve in series with back pressure relief valve - set at 100 psig) ....... List add $300.00 ad (2) FOr input capacity or .ess than 500,000 wiusine.a i/6 oF .LTES AEE motor is provided. Please specify (SI2B 0) .. List deduct $50.00 (3) For burner capacity less than 2.8 GPH or 400 CFM, must add a Mnosepiece insert; P/N 53350B ...ccecesceeseeeses List add $116.00 TOTAL P.@9 FIGURE E-'7 HEALY CLEAN COAL PROJECT 20 30 40 50 60 PLANT SIZE, MW RURAL ALASKA COAL POWER GENERATING PLANT COSTS IN ‘91 $ _ FIGURE E-8 « WAINWRIGHT CENTRAL. DISTRICT HEATING STUD DISTRIBUTION SYSTEM FOR SPACE HEATING BY LIQUID MEDIUM MAINS FOR HEATING FLUID SECTION MAIN SUPPLY LINE SPLIT CORRUGATED STEEL CULVERT PROTECTION - MAIN RETURN LINE PRE-iINSULATED PIPING INSULATION. GROUND LEVEL MAINS FOR HEATING FLUID ELEVATION 6 FT. CENTRES > /STRIBUTION SYSTEM FOR pace HEATING BY a CENTRAL DISTRICT HEATING stuDY dlid mepium ROAD UNDERPASS FOR HEATING MAINS ROAD RAMP Y) ne ee na GROUND LEVEL CULVERTS vo's FIGURE E-10 PLATE & FRAME p= HEAT SET TEMP, LIVING | oe eu DISTRICT CONTROL SPACE i bt OH HEAT SUPPLY HEATING | - i a SET TEMP. X 1 CONTROL LJ | Bypass X = RO MINIMUM Mm A | FLOW r LiL J = | SS | x |DIESEL FUEL| \-=- \BOILER UNIT) Ke ~ STR ay SCHEMA TIC_DIAGRAM LEGEND NEW EQUIPMENT =m RESTRICTION ORIFICE EXISTING EQUIPMENT METER PUMP 1 BALANCING VALVE VALVE CONTROL VALVE TEMPERATURE CONTROL DISTRICT HEATING SUPPLEMENTED BY EXISTING DIESEL BOILER FIGURE E-11 SET TEMP. CONTROL ELECTRIC BOILER Boe LIVING SPACE CONTROL HEATING | (NA Tt DIESEL FUEL BOILER UNIT SCHEMATIC DIAGRAM LEGEND NEW EQUIPMENT —— = EXISTING EQUIPMENT ke PUMP. bd VAL VE @ TEMPERATURE CONTROL ELECTRIC SPACE HEAT SUPPLEMENTED BY EXISTING DIESEL BOILER FIGURE E-1 WEIL: Mc LAL d HEATING CAPACITY: 51,000 to 85,000 BTU/Hr. 15 to 25 KW CAST '80N CONSTRUCTION The one-piece cast iron boiler section is built in accordance with the requirements of the A.S.M.E. boiler and pressure vessel code. Large water content (5.2 gallons) eliminates rapid internal tem- perature changes to assure better control response and nearly constant supply temperature. The section is insu- lated with one-inch fiberglass to reduce heat loss. A built-in air eliminator diverts air bubbles to the automatic air vent...no separate air eliminating device necessary. Internal separators in the section assure full flow of water over the heating elements. HEAVY-DUTY JACKET The steel jacket is finished in at- tractive blue hammerloid with a hinged front door to per- mit access to all internal components. Brackets on the back of the unit facilitate wall mounting. Elements are easily removed through the side plate on the right-hand side of the jacket. The Weil-McLain P-ER Electric-Hydronic Boiler represents a notable advance in electric boiler technology. Designed specifically for forced hot water heating systems in homes and apartments, the P-ER is factory-assembled and wired with circulator, compression tank and controls...all enclosed in a compact, clean-lined jacket. Before shipment, the boiler is factory-inspected and tested with all components. The control system of the boiler stages the heating ele- ments on in 24-minute intervals; off in 10-second intervals. Thus, because of the time delay, full boiler capacity is not used to satisfy one zone of a multi-zone system. The P-ER is designed for fast, low-cost installation...for new buildings or for replacement. The unit mounts on the wall, saving valuable living space, and no flue or vent is re- quired. Standard components are used and electrical connec- tions are required only for power supply and thermostat. Piping connections are the same as for any hot water boiler. DESIGN AND CONSTRUCTION FEATURES HEATING ELEMENTS Incoloy-sheathed, low-density ele- ments (approximately 55 watts per square inch) resist the corrosive effects of all chemicals found in domestic water systems. If it is ever necessary to replace an element, a standard water heater element (four-bolt flange—1%%” bolt centers) may be used. COMPRESSION TANK ANDCIRCULATOR The P-ER Boiler is furnished with a large-capacity compression tank which has a flexible diaphragm to prevent water from contacting the tank charge for positive system protection. The 144” circulator is an industry standard, noted for long life and dependability. FACTORY-WIRED CONTROLS All controls are factory- wired and standard electrical components are used. The componentized control system provides the advantage of easier replacement at lower unit cost. The P-ER requires only one three-wire service to simplify wiring. INTERNAL FUSINS The P-ER Boiler is supplied with a separate fuse for each element leg plus a fuse for the cir- culator and control circuitry. This safety feature eliminates the need for external fusing. ma cONING Because of the control system, zoning may be readily accomplished with either zone valves or additional circulators. Indoor-outdoor controls and timing devices, necessary for many zoning applications, are not required with the P-ER Boiler. DOUBLE LINE-EREAK CONTACTORS The contactors close both legs of the power source on a call for heat... open both legs of each element when the thermostat is satisfied. See TUN cRIzel ayia The control system of the P-ER Boiler incorporates heavy- duty double line-break contactors and solid-state time-delays to sequence elements on and off. On a call for heat, the first contactor instantly energizes the first heating element and the first time-delay. Simulta- neously, the circulator relay starts the circulator. After 2% to 3 minutes, the second element is energized. Additional ele- ments are energized in 2% to 3-minute intervals as long as there is a call for heat. RATINGS The elements remain energized until the thermostat is satisfied or boiler water temperature reaches the operating control setting. When either condition occurs, the Fret ele- ment energized is immediately deenergized. Remaining ele- ments are deenergized in 10-second intervals. If boiler water temperature reaches the high-limit setting, or if there is a power failure, all elements are instantly de- energized. The operating cycle always resumes with the first element. F COMPRESSION ‘TANK SIZING The expansion volume for the No. 109 compres- eon {| Hoon ose soker sion tank supplied with the P-ER Boiler is suit- Model Capacty Votts) | No. 8, Sie Saoienum Water | Approx. able for a forced hot water series loop or one-pipe = a Tew | ames | Were | Elements | 90°¢ Copper Only” coment iene convector baseboard system in a one or two-story house. For systems with cast iron baseboard or P-ER-15| 51.000] 15 | 65 | 240/1/3| 3-SKW #4 5.229 | 220 radiators, an additional No. 15 Extrol tank is P-ER-20| 68,000 | 20 | 86 | 240/1/3| 4-5KW #3 5.229 | 222 required. P-ER-25 | 85,000 | 25 | 107 | 240/1/3 | 5-SKW #1 5.229 | 223 + Delete “P" for ER boiler (assembled boiler without circulator and Fill-Trol). All ratings are based on 240-volt power input. For other voltages, seutiony heating capacity by the following percentages: 200V.— 70%; 220V.—85%; 230V.—92%. “ oes en standard test procedures praseried by the United States Department of Energy. rounded to nearest 1 BTU/Hr. Piping toss to the building loss to determine total heating requirement. **Consult national or jocal electrical code manuals for runs in excess of 50 feet. NOTE: Boilers tested at 50 P.S.I. working pressure. Dyas Confined to the heated space should be added TANDARD- EQUIPMENT: Time-Delays Fuse for Each Element Leg Fuse for Circulator and Control Circuit Jacket with Wall-Mounting Brackets One-Piece insulated Casting Incoloy-Sheathed, Low-Watt- Density Elements 24-Volt Control System Heavy-Duty Contactors Power Input Terminal Connection Combination Pressure and Temperature Gauge Boiler Drain Cock (P-ER only) Low-Voltage Thermostat 30 P.S.1. ASME Safety Relief Valve Automatic Air Vent (P-ER only) Combination Operating and High-Limit Control Low-Voltage Terminal Block Circulator (P-ER only) Circulator Relay No. 109 Fill-Trol (compres- sion tank and fill valve —P-ER only) In the interest of continual improvement in products and performance, Weil-McLain reserves the right to change specifications without notice. Form No. C-497-R7(482) Litho in U.S.A Wril-McLAIN HEATING CAPACITY: 82,000 to 137,000 BTU/Hr. 24 to 40 KW The Weil-McLain Model CER Electric-Hydronic Boiler is designed for forced hot water heating systems in homes, apartments and commercial buildings requiring 82,000 to 137,000 BTU/Hr. heating capacity. The CER is factory assembled and wired with all controls; before shipping, each boiler is factory inspected and tested with all components. The CER is designed for fast, low-cost installation for new heating systems or for replacement of older boilers. The unit mounts on the wall in an alcove, storeroom or other small area, saving valuable living space. No flue or vent is necessary. Standard components are used, and electrical connections are required only for power supply, circulator, and thermostat. Piping is the same as for any hot water boiler, and two or more units may be headered together for multiple applications. CAST IRON CONSTRUCTION The one-piece cast iron boiler section is built in accordance with the require- ments of the A.S.M.E. boiler and pressure vessel code. Large water content eliminates rapid internal tempera- ture changes to assure better control response and nearly constant supply temperature. The section is insulated with fiberglass to reduce heat loss. A built-in air separa- tor at the top of the casting diverts air bubbles to the automatic air vent or expansion tank... no separate air eliminating device is necessary. HEAVY-DUTY JACKET The steel jacket is finished in attractive blue hammerloid with a hinged front door to permit access to all internal components. Brackets on the back of the unit facilitate wall mounting. Elements are easily removed through the side plate on the right- hand side of the jacket. HEATING ELEMENTS Incoloy-sheathed, low-density elements resist the corrosive effects of all chemicals found in domestic water systems. FACTORY-WIRED CONTROLS All controls are fac- tory wired, and standard electrical components are used. The componentized control system provides the advan- tage of easier replacement at lower unit cost. INTERNAL FUSING The CER Boiler is supplied with a separate fuse for each element leg. This safety feature eliminates the need for additional external sub-fusing. Before purchasing this appliance, read important energy cost and efficiency information available from your retailer. =.> OPERATING SEQUENCE The control system of the CER incorporates heavy-duty contac- tors and time-delays to energize the heating elements individ- ually. Solid-state time-delays sequence the elements on in approximately 24-minute intervals. Elements remain energized until the thermostat is satisfied or the boiler water temperature reaches the operating control setting. Thermal time-delays de- Ee om @ energize the elements in 10-second intervals. The first element energized is the first to be de-energized. The circulator operates whenever the thermostat is calling for heat. If boiler water temperature exceeds the high-limit setting, all elements are instantly de-energized. Wire Si : Boiler DOE Heating No. & Size Total Amperes | Fuse Size | so°c. Necperonij-* Geller: Sere Model Capacity KW of Content Weight No. BTU/Hr. 4 « Elements 240/172 | 240/3/3 | 240/112 | 240/3/3 | 246/1/2 | 240/3/3 | Gals.) | (tbs.) cer24 | 82.000 | 24 | 3exw | 101 | 58 50 30 #2 | #4 5.2 175 CER-32 | 109,000 32 4-8KW 134 77 50 ] 30 CER-40 | 137,000 40 5-8KW 167 97 +Based on standard test procedures prescribed by the United States Department of Energy, rounded to nearest 1,000 BTU/Hr. Piping loss not confined to the heated space should be added to the building loss to determine total heating requirement. *All ratings are based on 240 or 480-volt power input. For other voltages, multiply heating capacity by the following percentages: 200V. or 400V.—70%; 210V. or 4220V.—78%; 220V. or 440V.—85%; 230V. or 460V.—92%. **Consult national or local electrical code manuals for temperature ratings of conductors other than 90°C. and for runs in excess of 50 feet. NOTE: Boilers tested at 50 P.S.I. working pressure. NOTE: CER Boiler available for other voltages and phases: See Weil-McLain Trade Price Sheet or consult Application Engineering Department. All Boilers Jacket with Wall-Mounting Brackets One-Piece Insulated Casting 30 P.S.1. ASME Safety Relief Valve Combination Pressure and Power Input Terminal and Fuse Block 24-Volt Control System Incoloy-Sheathed, Low-Watt Density Solid-State Time-Delays Temperature Gauge Elements Thermal Time-Delays Combination Operating and High- Low-Voltage Transformer Heavy-Duty Contactors Limit Control Fuse for Each Element Leg Thermostat Terminal Block Circulator Relay (separate power source must be furnished) In the interest of continual improvement in products and performance, Weil-McLain reserves the right to change specifications without notice. Form No. C-510R7(982) Litho in U.S.A. CE ‘WATER BOILER The Weil-McLain Model CE Electric Boiler is designed for hot water or steam heating systems in homes, apart- ments, commercial and institutional buildings. The CE is factory assembled and wired with all controls; before shipping, each boiler is factory inspected and tested with all components. The CE is designed for fast, low-cost installation for new heating systems or for replacement of older boilers. The HEATING CAPACITY: WATER: 164,000 to 436,864 BTU/Hr. STEAM: 55,000 to 327,648 BTU/Hr. CE STEAM BOILER unit mounts on the wall in an alcove, storeroom or other small area, saving valuable living space. No flue or vent is necessary. Standard components are used, and electri- cal connections are required only for power supply, cir- culator, and thermostat. Piping is the same as for any hot water or steam boiler, and two or more units may be headered together for multiple applications. DESIGN AND CONSTRUCTION FEATURES 2 CAST IRCN CONSTRUCTION The one-piece cast iron boiler section is built in accordance with the requirements of the ASME boiler and pressure vessel code. Large water content eliminates rapid internal temperature changes to assure better control response and nearly constant sup- ply temperature. The internal baffling system assures dry steam and a steady water level. Thecastingis insulated with fiberglass to reduce heat loss. A built-in air separator at the top of the casting diverts air bubbles to the automatic air vent or expansion tank . . . no separate air eliminating device is necessary. REA YEH Sd §. 96 Kee The steel jacket is finished in at- tractive blue hammerloid with a hinged front door to per- mit access to all internal components. Brackets on the back of the unit facilitate wall mounting. Elements are easily removed through the side plate on the right side of the jacket. HEATING ELEMENTS _ Incoloy-sheathed, low-watt-density elements resist the corrosive effects of all chemicals found in domestic water systems. FACTORY-WIRED CONTROLS All controls are factory wired and standard electrical components are used. The componentized control system provides the advantage of easier replacement at lower unit cost. INTERNAL FUSING The CE Boiler is supplied with a separate fuse for each element leg. This safety feature eliminates the need for additional external sub-fusing. HEAVY-DUTY CO!NTACTORS The contactors close all legs of the power source on a call for heat . . . open all legs of each element when the thermostat is satisfied. iE SEQUENSE The CE control system uses y-duty contactors and time-delays.to sequence the heat- ing elements. On a call for heat, the first contactor instantly energizes the first heating element and the first time-delay. Additional ele- ments are sequenced in intervals as long as there is a call for eat. The elements remain energized until the thermostat is satis- fied or the boiler water temperature reaches the operating control setting. When either condition occurs, the first ele- ment energized is immediately de-energized. If the boiler water temperature exceeds the high-limit setting, all elements are immediately de-energized. Before purchasing this appliance, read important energy cost and efficiency information available from vour retailer RATINGS LISTED DOE | Boiler DOE Lbs. of Steam No. & Size No. of Circuits 208. 240V. 480 V. Model | Heating {Kw | per hour of Elements Required* 1 Phase 3 Phase 1 Phase 3 Phase_ 7 al 5 ead Eeurtind aor 1 Phase | 3 Phasefl Phase/3 Phase |Amps° | Wire+ | Amps° | Wire+ | Amps°} Wire+ | Amps® wil +— = +t WATER CE-48-W | 164,000 48 _ 6-8KW | 3-16KW] 2 1 116/116 uw 135 ° 100/100 2/2 117 58 6 CE-56-W | 191,000 56 _ 7-8KW _ 2 _- 154/116 oo/1 - - 134/100 o/2 - — = CE-64-W | 218,000 64 - 8-8KW | 4-16KW 2 1 154/154 00/00 180 000 134/134 o/0 155 78 3 CE-80-w | 273,000 | 80 - — | S1skw] — 2 _ — {135/90 | oov2 =e — fuze 58/40| 6/8 CE-96-W | 327,648a| 96 - _- 6-16KW} — 2 - _ 135/135 0/0 — _- 117/117 58/58| 6/6 CE-112-W| 382,256a| 112 - _- 7-16KW | — 2 - - 180/135 | 000/0 - - 155/117 78/58| 3/6 CE-128-W| 436,864a| 128 - = 8-16KW} — 2 - - 180/180 | 000/000 _ = 155/155 78/78| 3/3 STEAM CE-16-S 55,000 16 56.3 2-8KW | 1-16KW 1 1 78 45 6 67 4 39 20 8 CE-24-S 82,000 24 84.5 3-8KW - 1 _- 117 1 - = 102 2 - — - CE-32-S | 109,000 32 112.6 4-8KW | 2-16KW 2 1 78/78 3/3 90 2 | 67/67 4/4 78 39 8 CE-40-S | 137,000 40 140.8 5-8KW _- 2 _- 117/78 3 _- - 102/67 214 oo os _ CE-48-S | 164,000 43 169.0 6-8KW | 3-16KW 2 1 117/117 uw 135 10 102/102 2/2 117 59 6 CE-64-S | 218,000 64 2253 _- 416KW) — 2x - i 90/90 2/2 - 2/2 78/78 78 3 CE-80-S | 273,000 80 281.6 _- S16KW) — a - - 135/90 0/2 _- - 117/78 98 2 CESS | 327.6484) 96 337.9 — | e16Kw) — x | - — 41357135] 0/0 ae - 117/117 117 1 +Based on standard test procedures prescribed by the United States Department of Energy, rounded to nearest 1,000 BTU/Hr. Gross output ratings in BTU/Hr. NOTE: Piping loss not confined to the heated space should be added to the building loss to determine total heating requirement. *Number of circuits required to ar power to the boiler. CTotal amperes in each circuit supplying power to the boiler. +Minimum wire sizes based on runs of 50 feet or less using 90°C. copper only. Consult national or local electrical code manuals for temperature ratings of conductors other than 90°C., and for runs in excess of 50 feet. D0 NOT USE ALUMINUM CONDUCTORS. x 480V. boilers require only one circuit. Fuse Sizes: 208/240V.—60 amp; 480V.—JKS 30 amp. Boiler Water Content (all sizes): Water—10.2 ge Steam—7.0 gal. Approximate Shipping Weight (all sizes): 300 Ibs. Boilers tested at 50 P.S.1. working pressure. WATER STEAM TOP TOP Oo bee, WATER WATER / STEAM STEAM LEFT SIDE RIGHT SIDE LEFT SIDE *24” minimum wall clearance required for element removal. By Jacket with Wall-Mounting Brackets For Water Boilers For Steam Boilers One-Piece Insulated Casting ; Incoloy-Sheathed, Low-Watt-Density Elements ASME Safety Relief Valve ASME Safety Valve 24 Volt Control System Combination Pressure and High-Limit Pressure Control Fuse for Each Element Le Temperature Gauge Operating Pressure Control Thermostat Terminal Bloc Combination Operating and Low-Water Cutoff Power Input Terminal and Fuse Block High-Limit Control Water Gauge Glass Thermal Time-Delay Relays Low-Water Cutoff (CE-128-W only) Gauge Cocks Heavy-Duty Contactors Steam Pressure Gauge Electronic Time-Delay Relay In the interest of continual improvement in products and performance, Weil-McLain reserves the right to change specifications without notice. 2 =| | ee | --ye oT ' 4 oii t Litho in U.S.A. Form No. C-523R6(382) FEB-27-1992 15:27 FROM AK PIPE ANC/CMCL TO 3494213 P.@1 een 349-4213 ser-a2 & SUPAY ING hh. ‘AS CE Bi 20 ht . BOB SCHYITE, 2900 &. 63rd © Anchorage, AK 99507 chee Weil McLain “peneecmentres tanta nerecmmcnmmem Elect Bele. frites Weil Mclain * PER~U5 220” Agro% me GR Res be 16) 82. CER- 24. 7s* ree CER-32 175% L 96R ee CER-to 72s 24126 2* CE~4¢w Bee 372662. CE~B0K/ a 3) 63422 CE~RbuY 300% 4,299 Lanked Ancforage LS, More Tuto a come. g-12 weeks " Hank, es FEB-27-1992 11:34 FROM AK PIPE ANC/CMCL TO 3434213 P.@2 DOura-Power COMMERCIAL ELECTRIC WATER BOILERS NW-37 THRU NW-670 A... Shou [Laue Designed for use 2s a hot water boiler for space heating applications. FEATURES ASME CODE CONSTRUCTION - All vessels manufactured to applicable ASME Code. Vessels with maximum working pressure of 160 psi or less (standard design is for 125 psi) at 250°F maximum tempereture bear the ““H‘' symbol per Section IV of ASME Code. Vessels with greater than 160 psi working pressure or higher than 250°F operating tem- perature will bear the “’S’ symbol per Section | of ASME Code. INCOLOY IMMERSION HEATERS - Heavy duty medium watt density elements (3 per immersion heater) have in- coloy sheathing; provides excellent protection against oxi+ dation and scaling, The input ranges from 45KW to 6,000KW (see accompanying chart), FUSING - Control and power circuit fusing to meet the National Electrical Code. 100,000 amp 1.C. cartridge- A SME type fuses protect all elements and contactors. PILOT SWITCH and LIGHT - Permits manual starting * Unit shown with optional accessories. and stopping of heater by interrupting power to control circuit. Pilot light indicates when control circuit is en+ ergized. LIMITED WARRANTY OUTLINE If the tank should leak any time during the first year, under the terms of the warranty, then A. O. Smith will repair or replace the boiler (tank) less elements and controls; installation, labor, handling and local delivery extra. This outline is not a warranty. For complete information, consult the written warranty or A, O. Smith Water Products Company. MAGNETIC CONTACTORS - Heavy duty UL rated for 100,000 cycles. LOW WATER CUTOFF - Probe type, electric low water cutoff prevent energizing of elements in the event of low water condition. 120 VOLT CONTROL CIRCUIT - Powered by fused transformer. MODULATING STEP CONTROL - A solid state modulating step contro! modulates heat input to match load through Progressive sequencing of steps. Stendard on models with SOKW or above (optional below 9OKW). UL LISTED - All boilers are UL listed per Underwriters’ Laboratories Standard No. 834. OTHER STANDARD FEATURES ® Two high ternperature limit controls @ Cabinet has bonderized undercoat with baked enamel finish @ Rectangular jacket made with 18 gauge (minimum) steel @ 3” fiber glass insulation @ Color coded Circuitry for easier servicing © Standard voltages include 208, 240, 480 and 575 volt, single or three-phase © Factory installed terminal block(s) © Combination Temperature/Pressure Gauge @ Boiler drain valve @ ASME pressure relief valve, Revisea November 1987 E 105.2 FEB-27-1992 OPTIONAL CONTROL FEATURES MANUAL RESET LOW WATER CUTOFF - Available factory mounted to meet local codes or specifications, Float type or probe type are available, MANUAL RESET HI-LIMIT - A control that, in the event of over temperature condition interrupts contro! circuit de-energizing elements, must be manually reset. SAFETY DOOR INTERLOCK - Prevents opening of con- trol panel door when boiler supply is on. NOTE: Once door is opened boiler may be energized if necessary for service diagnosis. INDICATING LIGHTS and OVERRIDE SWITCHES - A simple form of toad contro! allows all or part of unit input to be controlled manually. Up to one indicating light and override switch per contactor is available, CIRCUIT BREAKER - Factory mounted, available for those installations where there is no breaker et the elec- trical power source, or the breaker Is not within sight of the boiler, A safety device which disconnects power to the heater in the event of overcurrent. GROUND FAULT INTERRUPTER - A safety device (circuit breaker) which disconnects power to the boiler in the event of a current leak to ground exceeding the 11:34 FROM AK PIPE ANC/CMCL TO 3434213 P.@ GROUND FAULT DETECTOR : A device to provide a warming signal if there is current leak to ground ex- ceeding the adjustable set point. ALARMS - Horns, bells, or lights may be furnished to display or warn of any condition for which sensors have been specified. METERS - Any of the following meters can be furnished mounted on the boiler or in @ panel for remote mounting: Voltmeter Ammeter Watthourmeter OPTIONAL TANK LINING: GLASS LINED TANK - AJ! internal surfaces of the vessel exposed to water shall be glass lined with an alkaline boro: silicate composition that has been fused-to-steel by firing at a temperature range of 1400°F to 1600°F, This glass was specially developed for use in water heaters. Consult factory for operating temperature range. EPOXY LINED TANK - A solventiess two component epoxy lining applied to a minimum 10-mill (0.010") dry thickness. This coating is approved for use in potable water systems by U.S.D.A. and F.D.A. Available on NW-160 and larger tanks. Consult factory for operating temperature range. adjustable set point value; breaker must be manually reset. SHUNT TRIP CIRCUIT BREAKER - A safety device (cir- cuit breaker) which disconnects power to the heater in the event of overcurrent, high temperature, or low water level; breaker must be manually reset. SAMPLE SPECIFICATION Electric hot water boiler system shall be A, O, Smith Dura-Power model number NW-37-150K with 37 gallons capacity ASME “'H” code for 125 psi working pressure, The boiler will be complete with 3” of fiber gisss insulation, 18 gauge stee! jacket and control cabinet. Trim to consist of ASME safety relief valve, pressure tempereture geuge, Maximum jacket dimensions will be 32” wide, 30” deep and 42” high, Boller systern will be complete with ten 15 kilowstt incoloy sheathed heating elements with prewited 24” terminal leads, Each element shall be easily replaced by removing 4 bolts. Boiler output to be 511,950BTU or 150 KW at 480V, 3 phase, 60 Hertz levcles), Heating elements to be switched by 50 ampere magnetic contactors with @ minimum duty rating of 100,000 cycles at full load, Each contactor and heating clement circuit is protected by fusing with @ minimum of 100,000 empere interruptingcapecity. Control circuit for energizing and magnetic contactor coils shall be 120V with one side grounded, obtained through a control cirevit transformer whieh is fused on both input legs and the ungrounded output leg. The control circuit shall have the following edditions! items: on.ott pilot switch, pilot light, 2 high temperature limit controls, electric low water cutoff end solid state step control. The opereting contro! shall consist of @ S stage solid state modulating step control which will switch and balance the power input to the heating demand, This control will time delay each stage and progressively add or subtract stages as required by the temperature sensor. This control shall not allow more than one stage to be switched on at one time, The control shal! have even losd progressive sequencing, which utilizes the “first-on, Tirstoff” principte, thereby equalizing the operating time of the heeting elements and contoctors, In case of power feilure, ovtomatic recycle function will Occur, The boiler wiring will be prewired to solderless terming! tugs for ficid electrical connection, The entire boiler system shall be factory tested and bear the Underwriters’ Lobel Service label for UL standard 834, A. 0, Smith Water Products Company A Division of A,0, Smith Corporation Seattle, Washington E1 Paso, TX Veldhoven, The Netherlands A. 0, Smith Corporation reserves the right to make product changes of improvements at any time without notice. McBee. South Caroline Stretford, Ontario E 105.3 CA. ©. Smith Corp., 1987 Printed In U.S.A, *A0128} UNSUOD MHOOO9 OF MHOOPE anites 3 'B1L0N 3 0548 9* 0216 61 sz ove'ese'ot Ost @2+ 024 tz sz OeZ’err'OL Osh @aL+ OzL ez 02 O22" rE0'OL x OSb o ms+ ozres oz 090'rz9'6 \ 0st 01+ o2b #04 02 cor'sie’s / 4501 Ors's08's ost eer ot ee Oe00L 086's6e'S 06 OZ+ 02 9G 96S oz 906" OSt Oyt+ ozt dt OSE 3 OL* O24 8S 0G @9+ 021 06 OSL &Z+ zee o98'92S'2 Oe zo4'2 Ovd' 2529 Oat'ere's Corer ss Ota"Bt6 Ss 090°629'S 005'644'S 096602" Ost'ooc’r 009'S60"r Oz3"06e"s Ov0'9eo"e o92" tse’ Oer'oz2't 024 26+ 08 Og OSt aL O54 99% 028m 093 z+ CZ Oe 024 Gar ZL 09+ 06 82 0246 9+ 06 Oy Ooze rr os eo 02h z+ 06 08 POPUSURKOS OLY POP) ————-—___- me 06 8 OL 00z'120"e 08 4+ 06 86 026'999'2 06 49+ 09 ay Opi'z99'z 08 O r+ 02.99 06 82+ OH e8 09 901 09 8e+ oc az 0993+ OF Or Ovz"ee9"h oer 6 oses+ocas ose’ ses's yosr 96 o9erroees O99’ tert wozy 6 oo Fer ogee 020" Lee's 406E % . 0992+ o¢ee "azz" 6 ) 09d4* 0806 6 08 r 09 09 0981+ Ofer oe as ocey spap+oeeec ores S2¢4 ooe) spe eos SST “syun 19828] PUC UO}IE6 96 UO a5eq PIAS [2UUEYD PUG sn) BUY] “poysjuuny 9q Aew 2yBiay peonpad ¥ YUM Jassan JaroUINIP 4968) © WeIQOad # 1 146104 1180 S12 we "pesuels 0g 111M 4068) Put ,,y H6UI33}5 [Ny “OdA) Papeadys oq {IM ,,” 4OPUN SUID TY *AlO% NS 21NSUOD ‘M0009 Ob MAOOPE 0109 404 F3.LON Nivwa | -L371N0 wads anv eL35NI Eterere OL OWOYONY SdIid > =WOeS ~SE:TT cé6et-ce-dad 34394213 PP. UL MINIMUM CLEARANCE REQUIREMENTS: 24°° ALL SIDES, 12" TOP, NOTE: ALLOW 90" CLEARANCE FOR HINGED CONTROL COMPARTMENT DOORS. Ltelld oe ELEMENTS CAN BE CHANGED WITH 24°* CLEARANCE. FEB-27-1992 11:36 FROM AK PIPE ANC/CMCL TO FIELO WIRING COMPARTMENT ELEMENTS INSTALLED FROM THIS SIDE ONLY ALIFTING LUGS. {TYPICAL 2) CONTROL COMPARTMENT ULL pofe ccc wcnccmcccnncrcncmccndng ¢ ij i |- 430 © LLL BOILERS WITH SINGLE CONTROL PANEL CAN BE SS AN ADDITIONAL CONTROL PANEL IS REQUIRED ON FURNISHED WITH PANEL MOUNTED RIGHT OR NS UNITS ABOVE 500 KW RATED AT 208 OR 240 VOLTS. LEFT SIDE FACING INLET. 480 VOLT UNITS WILL REQUIRE ONLY ONE PANEL. MODELS: NW-37, NW-60, NW-96, and NW-150 ALIFTING LUGS (TrPtca 2) |_. BUSS END SITTING SUPPLIED SY OTHERS UL MINIMUM CLEARANCE REQUIREMENTS: 24" ALL SIDES, 12" TOP NOTE: ALLOW 30°" CLEARANCE FOR HINGED CONTROL COMPARTMENT DOORS. ELEMENTS CAN BE CHANGED WITH 24" CLEARANCE. ADDITIONAL CABINET HEIGHT REQUIRED WHEN CABLE POWER FEEDS ARE UTILIZED, WILL VARY i" * DEPENDING UPON SIZE ANO ‘ ‘ ‘ RELIEF VALVE FITTING TYPICAL CONNECTION . TO A BUS DUCT VOLTMETER (OPT) CONTROL COMPARTMENT MODELS: NW-220, NW-334, NW-400, NW-500 and NW-670 FIGURE E-1 ALASKA STATUTES TITLE. 18. CHAPTER 60. ARTICLE 3. BOILERS. Section 180. Regulations 190. Effect of regulations 200. New boilers and unfired pressure vessels 210. Exemptions 220. Duties of the Department of Labor 230. Appointment of deputy inspectors 240. Appointment and qualifications of special inspectors 250. Compensation for special inspectors prohibited 260. Duty of special inspectors 270. Report of inspection 280. Right of inspection 290. Examination for deputy and special inspectors 300. Revocation or suspension of state commission 310. Replacement of lost or destroyed certificate or commission 315. Inspection Standards 320. Inspection of boilers and unfired pressure vessels 330. Rules of inspection 340. Inspection certificates. ho. 350. Suspension of inspection- certificate 360. Inspection fees 370. Appeals 380. [Repealed 1968 -- Creation of boiler fund] 390. Inspection certificate required 395. Licensing of boiler operators AS 18.60.180. REGULATIONS. The Department of Labor shall formulate definitions, rules and regulations for the safe and proper construction, installation, repair, use and operation of boilers and for the safe and proper construction, installation and repair of unfired pressure vessels. The definitions and regulations must be based upon and shall follow the generally accepted nationwide engineering standards, formula , and practices established for boiler and unfired pressure vessel construction and safety. The Department of Labor may adopt the existing published codification of these definitions and regulations, known as the Boiler Construction Code of the American Society of Mechanical Engineers, and may adopt the amendments and interpretations made and published by that society. The Department of Labor shall adopt amendments and interpretations to the code immediately upon their adoption by the American Society of Mechanical Engineers so that the definitions and regulations at all times follow generally accepted nationwide engineering standards. (§ 1(c) ch 132 SLA 1955) AS 18.60.190. EFFECT OF REGULATIONS. (a) The regulations adopted by the Department of Labor have the force and effect of Jaw. However, the regulations applying to the construction of new boilers and unfired pressure vessels do not prevent their installation until the regulations become mandatory as provided in (b) of this section. (b) Amendments in the regulations are permissive immediately upon adoption and become mandatory 12 months after adoption. (§ 1(d) ch 132 SLA 1955) Ye i / ‘certificate, or at a pressure exceeding that specified in the inspection certificate, is a misdemeanor and the owner, user, or operator is punishable by a fine of not more than $1,000 or by imprisonment for not more than six months, or by both. Each day of unlawful operation is a separate offense. (§ 11 ch 132 SLA 1955) AS 18.60.395. LICENSING OF BOILER OPERATORS. (a) The Department of Labor shall adopt regulations for the licensing of boiler operators. The regulations shall conform to the generally accepted nationwide standards and practices established for boiler operators. (b) Operators' licenses shall be provided in the following categories: (1) fireman -- apprentice, (2) third class -- boiler capacity not to exceed 3,500 pounds of steam an hour or 3,500,000 British thermal units per hour for high temperature or high pressure water boilers, (3) second class -- boiler capacity not to exceed 100,000 pounds of steam an hour or 100,000,000 British thermal units per hour for high temperature or high pressure water boilers, (4) first class -- unlimited. (c) This section does not require a person to. be licensed in order to be a boiler operator. (§ 1 ch 68 SLA 1970; am §§ 12,13 ch 21 SLA 1981) TITLE 8. LABOR PART 4. OCCUPATIONAL SAFETY & HEALTH DIVISION CHAPTER 80. BOILER AND PRESSURE VESSEL CONSTRUCTION CODE Article 1. Boiler and Pressure Vessel Construction Code (8 AAC 80.010 - 8 AAC 80.060) Operation Controls (8 AAC 80.070 - 8 AAC 80.090) Special Requirements Repair Authorization (8 AAC 80.100 - 8 AAC 80.120) Requirements for Boiler Operator License (8 AAC 80.130) on oo w nN . . . . Definitions (8 AAC 80.900) ARTICLE 1. BOILER AND PRESSURE VESSEL CONSTRUCTION CODE Section 10. Boiler and pressure vessel construction code 20. Inspection fees 30. Certificates of inspection 40. Identification of special inspectors 50. Installation and Notification 60. Inspection and stamping Editor's Note: For the purposes of 8 AAC 80, the Anchorage office of the department can be contacted at Mechanical Inspection, P. 0. Box 107020, 3301 Eagle Street, Suite 301, Anchorage, Alaska 99510, Phone (907) 264-2447, ARTICLE 4. REQUIREMENTS FOR BOILER OPERATOR LICENSE Section 130. Requirements for boiler operator license 8 AAC 80.130. REQUIREMENTS FOR BOILER OPERATOR LICENSE. (a) An applicant for a boiler operator license must show documentation of qualifications for the respective license category as follows: (1) fireman - no experience required; (2) third class - six months of experience in the trade or six months of boiler training; (3) second class - third class license for one year or experience in the trade for at least one year; (4) first class - second class license for one year or experience in the trade for at least two years. (b) An examination will be given upon approval of an application. If the applicant fails the examination, the applicant must wait 30 days before reexamination. (c) A licenses is valid for three years and is renewable upon request by contacting the Anchorage office of the department. (Eff. 6/21/84, Register 90) Authority: AS 18.60.180 AS 18.60.395 Editor's Note: For the purposes of 8 AAC 80, the Anchorage office of the department can be contacted at Mechanical Inspection, P. 0. Box 107020, 3301 Eagle Street, Suite 301, Anchorage, Alaska 99510, Phone (907) 264-2447. ARTICLE 5. GENERAL PROVISIONS Section 900. Definitions 8 AAC 80.900. DEFINITIONS. In this chapter and in AS 18.60.180 -- AS 18.60.395, unless the context requires otherwise, (1) “alteration” means a change in any item described on the original manufacturer's data report which affects the pressure capability of a boiler or unfired pressure vessel, and includes, for example, a non-physical change such as an increase in the maximum allowable working pressure (internal 14 APPENDIX F Economic Analysis Methodology APPENDIX F, ECONOMIC ANALYSIS METHODOLOGY’ This appendix provides sample outputs from the economic analysis model as well as a sketch of how the model works. THE BASIC VILLAGE ECONOMIC MODEL Separate versions of a Quattro Pro spreadsheet model were constructed for each of the 5 villages being studied. Each model contains a library of load growth scenarios, diesel price scenarios, power plant characteristics, and the parameters describing the specific alternatives under study, all calibrated with actual village data. One major function of the model is simply to manage all these various possible inputs in a coordinated manner so that the results are based on the correct set of assumptions for the analysis being conducted. The model calculates electricity and heat production separately. The heart of the electric section is a polynomial equation which determines how much of the load must be met with peaking Tesources, due to actual peak demand conditions or unavailability of the baseload unit. Once this allocation between baseload and peak production is made, the rest of the computation of total costs of electric power production is straighforward. Fuel use is tallied based on output and unit heat rates, and variable O&M is determined based on output and unit costs. The model then looks up the specified vector of fuel prices and computes total fuel cost. Total electric production cost is computed as the present value of (Fuel cost plus Variable O&M plus Fixed O&M plus new capacity costs) for each year, plus the one time cost of initial capital investments in alternative plants. The heating calculations are also straighforward. The model starts with net baseboard heat demand from the load forecast and subtracts off the available waste heat supplied by diesel or gas-fired engine generators to determine net heat load which must be met by the primary system. Total fuel use is simply net heat demand divided by the assumed efficiency of the heating 1This appendix was prepared by Steve Colt of ISER. F-1 system, a parameter which is specific to the alternative being evaluated. Fuel cost is calculated as total use times the appropriate price. The present value of these annual costs is added to the initial equipment conversion cost and the present value of any future capital investments. The result is the total cost of providing space heat. For most of the cases evaluated in this report, this simple version of the model is sufficient. By running the model once with the base case diesel system and then again with the alternative system, the net benefits of the alternative are easily obtained as the difference between the two total costs. MODEL LOGIC FOR INTERTIED TRANSMISSION CASES The analysis of the intertied transmission cases required the construction of a modified model suitable for the task. This "transmission version" is designed to keep track of the heat versus electricity portion of the all-electric demand, since it is assumed that only the electricity portion of the demand will be backed up with diesel. The model was also modified to take account of the fact that in an intertied system, transmission line failures only lead to loss of loads beyond the failure point. Specifically, the model must recognize that the Barrow load can still be served with cheap Barrow generation when the transmission line to the villages is unavailable. While the basic model treats backup and peaking power as the same thing -- a demand for peaking generation --, the transmission version distinguishes between the two phenomena. Backup energy costs are calculated on a total basis as the unavailability percentage of the transmission line times the present value of total base case diesel system energy costs. This calculation covers both electric and heat backup provided by the diesel system. Finally, the transmission version of the model was further modified to keep track of cumulative natural gas usage and to calculate field depletion times for the Walakpa gas field. These calculations are necessary because the social cost of using gas today changes when the depletion date of the field changes. Since the intertied system scenarios dramatically affect the depletion time of the gas field, it is necessary to iterate the model twice to ensure that the gas prices being F-2 used reflect the actual, new depletion time expected after the addition of the village load as. part of the alternative case. SAMPLE MODEL OUTPUT The following model output sheets are provided to give the reader a better sense of how it works. The author (Steve Colt of ISER) welcomes further questions. Plant characteristics specification for Nuiqsut alternatives. Base case Nuiqsut diesel system run for the mid load/mid diesel price case. Alternative case run for case 11-4-NQT: electrical transmission from KIC. Model run of the mid/mid case for case 19-6: Electrical transmission from Barrow to the Pea 4 western villages. PNT.WQ1 Plant Characteristics Alt-A to Restore Base Case Assumptions Location: Nuiqsut Nuigsut Summary with High Capital Costs Assumes high ($11.25 million) power line cost and high ($17.6 million) gas well cost Variable Configuration Name KIC Gasline | Base Diesel Baseload Unit: Heat Rate Btu/kWh 13,000 13,000 Fuel Type 5 2 Fuel Type Kuparuk Gas| Utility Diesel Variable O&M mills/kWh 10.0 10.0 Capacity MW 0.42 0.23 Availability 93.7% 100.0% Xmission/Sta Sve Loss @ Full Load 9.0% 9.0% net Waste Heat Supplied ,OOOMMBTU 1.9 1.9 Peak Units: Heat Rate Btu/kWh 14,000 14,000 Fuel Type 2 2 Fuel Type Utility Diesel | Utility Diesel Variable O&M mills/kWh 10.0 10.0 Onsite Fuel Type 5 3 Onsite Fuel Type Kuparuk Gas} Retail Diesel Onsite Heating Plant Effic. 70.0% 70.0% Onsite Variable O&M $/MMBtu $0.00 $0.00 Equipment Conversion Cost $,000 $1,300 $0 Economic Discount Rate %lyear 5.0% Analysis Period years 35 Extension Multiplier 3.91 Alternative Scenarios 2 3 Not Used KIC Xmission GasWells KIC Gasline 13,652 17,065 13,000 13,000 1 5 4 5 Coal Kuparuk Gas LocalGas Kuparuk Gas 10.0 10.0 10.0 10.0 0.44 2.10 0.42 0.42 93.7% 93.7% 93.7% 93.7% 9.0% 3.0% 9.0% 9.0% 0.0 0.0 1.9 1.9 14,000 14,000 14,000 14,000 2 2 2 2 Utility Diesel Utility Diesel__Utility Diesel _Utility Diesel 10.0 10.0 10.0 10.0 1 3 4 5 Coal Retail Diesel LocalGas Kuparuk Gas 45.0% 70.0% 70.0% 70.0% $0.00 $0.00 $0.00 $0.00 $2,200 $600 $1,300 1,300 Electric Power and Space Heat Cost Model Location: Nuiqsut Notes: Plant Type: Base Diesel 1 Case BASE-NQT Load Forecast: Mid 30-Mar-92 Diesel Price Forecast: Mid 2 13:34 Present Variable Uni Value 1994 1995__ 1996 __1997_-1988_—1988_— 200020012002 200320042005 2008 = 2007_— 2008 2008S 2010 2011_—S 022013 04 Busbar Electric Energy Demand MWh 1,636 1,651 1,663 1,882 1,804 1,829 1,956 1,988 2,020 2,053 2,088 2,125 2,163 2,203 2,245 2,268 2,333 2,377 2,424 2,470 Peak Demand MW 038 038 0.39 0.39 0.39 040 0.41 0.41 0.42 043 043 «4044 0.45 046 047 047 048 0.49 0.50 «(0.51 Electric Power Generation Technology Baseload Capacity after Station Svc Mw 020 020 020 0.20 0.20 020 020 020 0.20 020 020 0.20 0.20 020 020 020 020 0.20 020 0.20 Baseload / Peak Demand % 054 053 053 0.52 0.52 0.51 0.50 0.50 0.49 048 047 0.48 0.46 045 0.44 043 0.42 0.42 0.41 0.40 Baseload Capacity Factor % 93.7% 94.0% 94.3% 04.6% 95.1% 95.5% 96.0% 96.5% 96.9% 87.3% 97.7% 98.0% 96.3% 98.6% 96.8% 99.0% 99.1% 99.3% 09.4% 99.4% Load Supplied, by Generation Type Baseload MWh 1,681 1,687 1,692 1,698 1,707 1,715 1,723 1,731 1,739 1,746 1,753 1,750 1,764 1,769 1,773 1,777 1,778 1,782 1,783 1,785 Peak Gen for Peak Load MWh 155, 164 171 183 197 214 235 256 281 307 335 366 398 434 472 S11 553 506 640 685 Peak Gen for Backup (non-heat) MWh 0 ° ° 0 ° o o ° oO 0 0 0 oO ° o 0 Oo o oO o Variable Costs of Electric Power : Fuel Use Baseload ,000 MMBtu 24 24 24 24 24 24 2 25 2 2 25 23 25 25 2 2 3 2 25 2 Peak ,000 MMBtu 2 3 3 3 3 3 4 4 4 5 5 6 6 7 7 8 9 9 10 abl Fuel Price Baseload $/MMBtu 11.38 11.46 11.54 11.62 11.70 11.78 11.68 1168 12.08 1218 1228 1236 1248 1258 1268 12.78 1288 1298 13.08 13.18 Peak ‘$/MMBtu 11.36 11.48 11.54 11.62 11.70 11.76 11.88 11.08 1208 1218 12.28 1238 1248 1256 1268 1278 1288 1298 13.08 13.18 Fuel Cost Baseload $,000 5,048 273 276 279 262 285 269 202 296 300 04 we a 315 318 321 324 327 330 333 336 Peak $000 1,287 27 2 3% 33 35 38 4a 47 52 37 63 70 7 84 92 101 110 119 129 139 Variable O&M Costs Baseload $000 314 18 19 19 19 19 19 19 19 19 19 19 19 19 19 19 20 20 20 20 20 Peak $ ,000 72 2 2 2 2 2 2 3 3 3 3 4 4 4 5 5 6 8 7 Z 8 Total Variable Costs $ ,000 6,721 321 325 330 335 we 349 357 365 374 384 304 404 415 426 438 450 463 476 489 502 Fixed Costs of Electric Power Unavoldable Fixed Labor, O&M, Ad = $ ,000 7,008 428 428 428 428 428 428 428 428 426 428 428 428 428 428 428 428 428 428 428 428 Incremental Labor Costs $000 0 0 0 0 ° oO 0 0 o 0 oO 0 Oo oO oO oO 0 oO oO 0 o Incremental Other Fixed O&M $000 o oO o o o oO oO oO oO ° o oO oO oO o oO oO oO oO oO o Total Fixed Costs $,000 7,008 428 428 428 428 428 428 4268 428 428 428 428 428 428 428 428 428 4268 428 428 428 New Capital Investment $,000 oO oO o ° ° ° ° ° 0 oO o o oO oO 0 oO oO 0 0 ° oO oO Space Heating Costs Non-elect. Baseboard Heat Load ,000 MMBtu 276 8627.7 «027.7 27.8 26.1 26.3 2836 289 2.2 206 8390.0 303 30.7 N12 316 32.1 326 33.0 35 340 Heat from Waste Heat and Coal ,000 MMBtu 1.9 1.9 1.8 1.9 1.9 1.9 1.8 1.9 1.9 1.9 1.8 1.9 1.8 1.8 1.9 1.9 19 1.9 1.9 19 Net Non-electric Heat Load ,000 MMBtu 25.7 25.8 258 260 262 264 267 27.0 27.3 27.7 260 264 268 223 22.7 302 36 311 316 321 Heating Fuel Price ‘$/MMBtu 15.02 15.10 15.18 15.26 15.34 15.42 15.52 15.62 15.72 1562 15.92 16.02 16.12 16.22 16.32 1642 1652 1662 1672 16.82 Heating Cost per Delivered MMBtu $/MMBtu 21.46 21.57 21.68 21.80 21.91 22.03 22.17 22.31 22.46 22.60 22.74 22.89 23.03 23.17 23.32 23.46 23.60 23.74 23.89 24.03 Total Heating Fuel Cost $,000 10,785 551 556 560 568 573 581 592 602 613 625 638 651 664 678 693 708 723 739 755 7 Equipment Conversion Cost $ ,000 o 0 oO oO oO oO o o oO oO oO ° o o o o ° o oO o o oO Total Cost of Providing Space Heat $,000 10,785 oO 551 556 560 566 573 581 592 602 613 625 638 651 664 678 693 708 723 739 755, 71 [TOTAL AVOIDABLE COSTS $,000 24,515 ° 1,300 1,309 1,318 1,329 1,343 1,358 1,377 1,396 1,416 1,437 1,450 «1,483 —«*1,507_~—«1,532—«*1,550 «1,586 1,614 1,643 1,672 1,701 Present Cumulative Fuel Use by Type of Fuel Unit Value __1995-2030_1995__1996__1997__ 1998 19899 200020012002, 2003 200420052006 =— 2007 —2008_=—2009— 20102011. = 01220132014 Coal Tons 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Utility Diese! ,000 gal 8,382 193 194 196 198 = 200, 203 206 209 213 217, 220 225 229 233 238 243248 253258263 Retail Diesel ,000 gal 10,905 268 269 269° 271 273 275 278 261 265 268 292 206 301 305 310 315 320 325 330 335 Local Gas MMcf oO 0 oO o oO 0 0 oO 0 0 0 0 oO oO °o 0 oO 0 ° 0 oO Kuparuk Gas MMcf oO 0 0 Oo 0 O oO oO O ° O oO oO oO O oO 0 0 o 0 ° Fuel Cost by Type of Fuel . Coal $,000 0 0 0 0 0 0 o ) 0 0 0 ° 0 0 0 0 0 0 0 0 0 Utility Diese! $,000 6,335 300 305 309 315 321 327) 335 344 352 61371 381 391 402 413 425437 44D ATS Retail Diese! $,000 10,785 551 556 560 566-5573 581 S92. GOs“ HACG7B GHB. 708_—- 723: 739785771 Local Gas $000 ° 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Kuparuk Gas $,000 0 0 ° ° o o 0 0 ° 0 ° 0 0 0 0 ° 0 o 0 0 0 Total Fuel Cost $ ,000 17,120 852 661 869 881 694 909 927 946 966 987 1,009 1,031 1,055 1,080 1,106 1,132 1,160 1,188 1,217 1,246 Electric Power and Space Heat Cost Model Location: Nuiqsut Notes: Plant Type: Base Diesel a Case BASE-NQT Load Forecast: Mid 2 30-Mar-92 Diesel Price Forecast: Mid 2 13:34 APPROXIMATE DISTRIBUTION OF AVOIDABLE COSTS for DIESEL SYSTEM Present % of Unit Value Total 19951906 = 198719981998 = 20002001 2002 2003 2004 2005, 2008 2007, 2008S 2008S 10 011 = 01213014 Consumer Pmts for Res. Diese! $,000 1,327 12% n 72 72 72 73 74 7 76 7 78 73 60 a 83 a4 68 87 88 90 1 Other User Diese! Payments $,000 6,449 60% 332 334 336 340 344 348 354 360 367 374 381 389 397 405 414 422 432 441 450 460 NSB Payments for Res. Diesel $000 3,010 28% 148 150 152 154 156 158 163 166 170 173 177 182 186 190 195 200 205 210 215 220 Total Avoidable Heating Cost $,000 10,785 100% 551 556 560 566 573 581 592 602 613 625 636 651 664 678 683 708 723 738 755 mM Residential Electric Payments $,000 1,168 9% 58 59 59 60 61 62 63 65 66 67 69 70 72 14 75 7 79 a1 83 85 Other User Electric Payments $,000 5,596 41% 205 207 298 m1 04 308 313 317 322 327 333 336 344 350 357 363 370 a7 384 391 State of Alaska PCE Payments $,000 844 6% “4 “4 4 od 46 46 47 48 48 49 50 51 52 53 34 5S 536 57 58 38 NSB Provision of $,000 6,119 45% 351 353 355 357 358 360 32 364 366 368 370 373 375 a7 380 383 385 368 3901 385 Total Avoidable Electricity Cost 13,729 100% 749 753 758 763 770 7 785 783 802 812 822 632 843 854 866 678 891 904 917 930 Combined Energy System Total User Payments $ ,000 14,542 59% 756 762 766 773 782 783 805 618 832 646 862 678 894 912 830 948 968 987 1,007 1,027 Total State of AK PCE Payments $,000 844 3% 44 “4 45 45 4 4 47 48 48 49 50 51 52 33 54 55 56 57 58 58 Total NSB Payments $000 9,129 37% 499 503 507 511 515 519 524 530 536 542 548 554 561 568 575 582 590 598 606 615 Total Avoidable Energy Cost $,000 24,515 100% 1,300 1,000 1,018 1,020 1,043 1,068 1,077 1,006 1,416 1,437 1,450 1,483 1,607 1,602 1,500 1,606 1,614 1,643 1,672 1,701 Electric Power and Space Heat Cost Model Location: Nuiqsut Notes: Plant Type: KIC Xmission 3 low cost ($6 million) electric transmission from KIC Case 11-4-NQT Load Forecast: Mid 2 assumes $1/Mcf gas at KIC for generation 30-Mar-92 Diesel Price Forecast: Mid 2 17:46 Present Variable Unit Value 1994 18051996 «1997-1986 1999 2000-2001 200220032004 20052008 2007_— 2008 200901001112 13-14 Busbar Electric Energy Demand MWh 10,414 10,453 10,478 10,540 10,622 10,722 10,842 10,965 11,100 11,240 11,301 11,550 11,711 11,886 12,068 12,251 12,446 12,639 12,637 13,034 Peak Demand Mw 244 245 248 247 249 252 284 257 261 264 267 271 275 278 283 2868 292 297 301 3.06 Electric Power Generation Technology Baseload Capacity after Station Svc = MW 2.04 204 204 204 204 204 204 204 204 204 204 204 204 204 204 204 204 204 2.04 204 Baseload / Peak Demand % 083 083 083 082 082 081 080 079 O78 077 076 O75 O74 073 0.72 O71 0.70 069 068 087 Baseload Capacity Factor % 57.4% 57.6% 57.7% 58.1% 58.5% 50.0% 59.6% 60.3% 61.0% 61.7% 62.5% 63.4% 64.3% 65.2% 66.2% 67.1% 68.2% 69.2% 70.2% 71.3% Load Supplied, by Generation Type Baseload MWh 10,250 10,286 10,309 10,368 10,442 10,535 10,648 10,764 10,882 11,025 11,169 11,320 11,474 11,642 11,815 11,990 12,175 12,357 12,541 12,723 Peak Gen for Peak Load MWh 48 50 52 55 60 65 70 76 81 86 a1 96 100 10 «111117, 124133143155 Peak Gen for Backup (non-heat) MWh 1600«117,—'s117— 118 120, 122128125 127 128 132s 18H 18K 1881411448147 150 18318 Variable Costs of Electric Power Fuel Use Baseload ,000 MMBtu 180 «-181=Ss«181—i—«*B8Des—sBHC‘dNBSHC (CBT: 18Zes«s18H—s1KH—i 1H HD SHH 2421722 Peak ,000 MMBtu 2 2 2 3 3 3 3 3 3 3 3 3 3 4 4 4 4 4 4 4 Fuel Price Baseload S/MMBtu 0.97 0.87 097 097 0.87 097 097 097 097 0.97 0.87 0.97 0.97 0987 0.97 0987 0.97 087 097 0.97 Peak $/MBtu 11.38 11.46 11.54 11.62 11.70 11,78 11,88 11.08 12.08 12.18 12.28 1238 1248 1258 1268 12.78 12868 1208 13.08 13.18 Fuel Cost Baseload $,000 3,197 175 «176«=—«176Ss«177'—'—s«*178ss 180182184188 188181 183 198 188 O22 OB 4 IT Peak $,000 695, 27 28 28 29 30 32 33 35 36 38 30 a “a “ 48 48 50 53 56 59 Variable O&M Costs Baseload $,000 1,890 106 «108 «= 108 107, «108s 108.—'i— 10d 1121141117118 120 122s 1248 128 127128131 Peak $000 40 2 2 2 2 2 2 2 2 2 2 2 2 2 3 3 3 3 3 3 3 Total Variable Costs $,000 —*5,867 we~C«)(“(iéitTSCSC(téiSSCiSC(<iéiSCSC(‘iaCOCKC(‘iaOCCSCGSC(‘i‘ia SCC (tC SSCSCi‘éATT. Fixed Costs of Electric Power Unavoldable Fixed Labor, O&M,Ad $,000 7,008 428 428428 428428 428 428 428 428428 4284284282828 428428 AOR 428428 Incremental Labor Costs $ ,000 ° 0 ° 0 ° 0 0 ° 0 0 ° 0 ° ° ° ° ° ° ° 0 0 Incremental Other Fixed O&M $,000 327 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 Total Fixed Costs $,000 (7,338 448 ~«ASs(“(i«é‘ikSCABSCABEC(“Cié‘ikKCOCABC(‘é‘ikMOOC«MMBSOCMABSCASsC(iéi‘ikKBSOCCAHCti«CCiCité‘«iSCié«iSSCit«CCCté‘iBCCACC(ti«CA New Capital Investment $,000 6,000 6,000 ° 0 ° ° 0 ° ° ° ° ° o ° ° 0 ° ° 0 ° ° o Space Heating Costs Non-elect. Baseboard Heat Load 000 MMBtu WOT 1700-11800 («1800 180 180 180 18 18 1.8 19 #18 20 20 20 21 21 21 24 Heat from Waste Heat and Coal ,000 MMBtu 00 00 00 00 06 06 06 00 0f 06 Of 06 06 O08 06 O60 00 00 06 00 Net Non-electric Heat Load ,000 MMBtu tt, ue 1700-1800 «1800 180 1.8 18001800 18 18 1.8 1.8 20 2020 tlt Heating Fuel Price ‘S/MMBtu 15.02 15.10 15.18 15.26 15.34 15.42 15.52 15.62 15.72 15.82 15.92 1602 16.12 1622 1632 1642 1652 1662 1672 16.82 Heating Cost per Delivered MMBtu = $/MMBtu 21.46 21.57 21.68 21.80 21.91 22.03 2217 2231 2246 2260 22.74 2289 23.03 23.17 23.32 23.46 23.60 23.74 23.89 24,03 Total Heating Fuel Cost $,000 725 a7 38 38 38 398 38 40 “a a1 42 43 44 45 48 48 47 48 49 50 81 ui Conversion Cost $ ,000 600 600 o oO oO o oO oO oO oO 0 oO ° ° 0 o o o o oO o Total Cost of Providing Space Heat $,000 ‘1,025 600 37 38 38 38 38 38 40 ry] 41 42 43 a4 45 46 46 47 48 49 50 St [TOTAL AVOIDABLE CosTS $000 20,522 6600 795 707 798 601 605 609 615 620 626 a2 630 645 O52 600 667 675 683 602 O01 O10 Present Cumulative Fuel Use by Type of Fuel Unit Value 1995-2090 1995 1996 _1997__ 1998 __1999 2000 -2001_—« 200220032004 20052008 2007_— 2008-2009 0102011 201220132014 Coal Tons 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Utility Diesel ,000 gal 962 7 18 18 18 19 20 20 21 22 23 23 24 25 26 27 268 29 30 a1 33 Retail Diesel ,000 gal 731 18 18 18 18 18 19 19 19 19 19 20 20 20 20 21 21 21 22 22 2 Local Gas MMct ° 0 ° ° ° ° 0 ° ° ° ° ° 0 0 ° 0 ° ° 0 ° 0 Kuparuk Gas MMct 7,098 175 176 176 177 178 180 182 184 186 188 191 193 1968 199 202 205 208 211 214 217 Fuel Cost by Type of Fuel Coal $000 ° ° ° ° ° ° ) 0 ° ° ° ° o 0 ° 0 0 ° ° ° Utility Diesel $000 695 27 28 28 29 30 32 33 35 36 38 39 a 43 44 46 48 50 53 56 59 Retail Diesel $000 725 37 38 38 38 39 39 40 at 41 42 43 44 45 46 46 47 48 49 50 51 Local Gas $ ,000 0 0 o 0 0 ° ° 0 0 0 0 0 0 0 ° 0 ° ° o ° ° Kuparuk Gas $,000 _3,197 175.176 ~—='176~S177_~Ss178 S180 182184 1868 188 S191 ~—s 193 —S 198 ~— 1989S 02 0S BH S24 17 Total Fuel Cost $,000 4,617 239° ~«241~=S«CiM2CAsCiTSCiCSTCSSCSCSSCSCSSCiBHC«iC(itSCHSCKC<CSC*«‘iCTSSCSC Electric Power Cost Model for Transmission Location: BRW Xmission Notes: BRW Baseloaded to Grid Supplying All-Electric Heat Plant Type: BRW Baseload low ($73 million) xmission line cost; low cost gas (300 Bcf, $.05 1995 UC-HH case) Case 18-6 18-6 Barrow Heat Rate: 12,000 04-Apr-92 Load Forecast: Mid 21:10 Diesel/Gas Price Forecast: Mid Present Variable Unit Value 1994 1995 1996 1997 1996 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Electricity Demand at the Local Busbar Barrow Electric Energy MWh 44,298 44,558 44,732 45,043 45,438 45,982 46,775 47,592 48,431 49,284 50,162 51,072 52,014 53,013 54,052 55,123 56,241 57,380 58,551 59,742 Village Electricity and Heat MWh 47,180 47,325 47,447 47,717 48,078 48,520 49,048 49,568 50,175 50,785 51,439 52,124 52,822 53,580 54,365 55,162 56,005 56,843 57,702 58,557 Peak Demand Mw 16.97 19.06 1912 1924 1940 1960 19867 20.16 2045 20.76 21.07 21.40 21.74 2211 2249 2287 23.28 23.69 2411 2454 Electric Power Generation Technology Baseload Capacity after Station Svc Mw 15.37 15.37 15.37 15.37 15.37 15.37 1537 1537 15.37 15.37 15.37 16864 1684 1684 1664 1684 1664 1830 1830 1830 Baseload / Peak Demand % 081 081 080 080 0789 O78 O77 O76 O75 O74 O73 O78 O77 O76 O75 O74 O72 O77 O76 0.75 Baseload Capacity Factor % 66.3% 66.6% 66.8% 67.2% 67.7% 68.4% 69.3% 70.3% 71.3% 72.3% 73.4% 68.2% 69.3% 70.4% 71.6% 72.8% 74.0% 69.4% 70.6% 71.8% Load Supplied, by Type Baseload for Barrow MWh 44,208 44,558 44,732 45,043 45,438 45,982 46,775 47,502 48,431 49,284 50,162 51,072 52,014 53,013 54,052 55,123 56,241 57,380 56,551 59,742 Baseload for villages MWh 44,981 45,118 45,223 45,459 45,778 46,171 46,639 47,123 47,651 48,197 48,776 49,592 50,215 50,696 51,606 52,318 53,058 54,018 54,782 55,561 Peak (allocated to Villages) MWh 788 810 825 852 684 966 1,008 1,050 1,097 1,154 998 1,054 §61,1068 1,163 1,226 1306 1,154 1,216 1,278 Variable Costs of Electric Power Fuel Use Baseload for Barrow ,000 MMBtu 542 548 548 552 556 563 573 583 583 603 614 625 637 649 662 675 689 703 v7 732 Baseload for Villages ,000 MMBtu 568 570 571 574 578 583 589 595 602 608 616 626 634 643 651 660 670 682 692 701 Peak ,000 MMBtu 10 "1 "1 "1 W 12 13 13 14 14 15 13 14 14 15 16 17 15 16 17 Fuel Price Baseload: Walakpa Gas ‘$/MMBtu 0.01 0.01 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.03 0.03 0.03 0.03 0.03 0.03 0.03 Peak: Utility Olt $/MMBtu 11.37) 11.45 11.53 «11.61 11.68 611.77 11.87 11.07 12.07 1217 1227 1237 1247 1257 1267 1277 1287 1287 13.07 13.17 Fuel Cost Baseload for Barrow $000 252 7 8 ° 9 9 10 10 " 12 13 14 15 16 7 18 19 20 22 23 25 Baseload for Villages $,000 255 8 8 9 9 10 10 W "1 12 13 14 15 15 16 18 19 20 21 23 24 Peak $ ,000 2,629 116 121 124 129 1344 141 148 157 165 174 184 160 171 181 192 203 218 195 207 219 Variable O&M Costs Baseload for Barrow $,000 6,636 452 455 456 480 464 469 477 486 494 503 512 521 531 541 552 562 574 586 507 610 Baseload for Villages $,000 6,440 464 465 468 469 472 476 481 486 491 497 503 511 518 525 532 538 547 557 565 573 Peak $000 175 8 8 8 9 8 9 10 10 ahi 1 12 10 bal uN 12 12 13 12 42 13 ‘otal Variable Costs ,000 20,587 1,055 1,064 1,063 1,083 1,096 1,115 1,138 1,161 1,185 210 «1,238 «1,232 1,261 1,201 1,322 1,355 1,303 1,362 1,427 1,463 Fixed Costs of Electric Power Fixed Village Labor, O&M $,000 28,538 1,804 1,804 1,804 1,804 1,804 1,604 1,604 1,804 1,804 1,604 1,604 1,604 1,804 1,804 1,604 1,804 1,804 1,804 1,804 1,804 Incremental Labor Costs $000 oO o 0 o 0 0 0 0 0 o 0 0 0 0 0 0 oO o o 0 0 Incremental Other Fixed O&M $ ,000 2,996 183 183 183 183 183 183 183 183 183 183 183 183 183 183 183 183 1863 183 163 183 ,000 32,536 1,987 = 1,987 Fc K 967 1,98; 1 96; 1,98 1,98 1,98: 98: 1,98; 1,98; 1,88; 1,987 1,887 1,98 1,987 1,98; New Capital investment $,000 82,145 80,200 0 o o o 0 o o 0 o oO o 2,000 o o 0 o o 2,000 0 o Diese! Backup Costs Transmission Line Availability 87.0% Total Variable Village Diese! Cost $,000 60,477 (Taken from Village Base Case Runs) Backup Diesel Costs this Case $,000 2,414 OTAL COSTS 137,682 80,200 3,042 051 050 3,070 3,085 3,102 3,125 3,148 172 197 3,225 5,219 3,248 3.278 3,342 380 5,379 414 450. Gas Usage Summary 1995 1996 1997 19968 1998 2000 2001 2002 2003 2004 2005 2006 2007 2008 2008 2010 2011 2012 2013 2014 Gas use for BRW Electricity MMcf 527 530 532 535 540 547 556 566 576 566 596 607 618 630 643 655 669 682 696 710 Gas use for Villages MMcf 551 553 554 557 561 566 572 578 584 5e1 508 608 615 624 641 650 662 672 681 Gas use for BRW/NARL Heating MMcf 590 580 562 597 603 613 624 635 646 657 668 680 691 704 718 73H 748 761 778 782 Total Gas Use MMcf 1,667 1,673 1,678 1,690 1,705 1,725 1,751 1,778 1,806 1834 1,862 1895 1,825 1958 1983 2,028 2,065 2,105 2,144 2,183 Cumulative Gas Use (from 1/1/83) MMcf 5,002 6675 6,353 10,043 11,748 13,473 15,224 17,002 18,808 20,642 22,505 24,309 26,324 28,283 30,275 32,303 34,368 36,473 36,617 40,799 Assumed Gas Field Size MMcf —-:300,000 0.01 Field Lifetime 141 Year of Field Exhaustion 2134 APPENDIX G Optimal Timing of a Gas Savings Investment NORTH SLOPE BOROUGH ENERGY ASSESSMENT APPENDIX G Optimal Timing of a Gas Savings Investment One of the most important questions facing NSB planners is how to ‘make the best possible use of its valuable natural gas resources. As part of our investigation of energy efficiency options, we addressed the question of when to invest in a gas-saving technology. This is a complicated but very important question. Our theoretical analysis showed that it is possible to answer these timing questions and allowed us to build a simple model to address actual situations. This model could be used by the Borough in the future, once a final determination of Walakpa gas reserves is made, to help determine the lowest cost way of using these resources. This technical appendix presents our theoretical analysis and an example of the application of the applied model. APPENDIX G. WHEN IS THE BEST TIME TO INVEST IN CONSERVATION OF A DEPLETABLE RESOURCE? Energy planners are often asked to consider whether or not a particular investment in energy conservation is worth its cost. A question asked far less often, but which may be just as important, is when is the best time to make such an investment, assuming it is feasible. When the energy being conserved is derived from a depletable resource, the value as well as the appropriate timing of conservation investments depends upon the expected life of the reserves and the costs of potential substitutes; that is, it depends on the backstop technology. This appendix discusses the economic conditions under which conservation of nonrenewable resources is worth the cost, and the optimal timing of such investments. To facilitate the discussion, we use a simplified model of a hypothetical investment decision. The model examines a single one-time investment with a constant real capital cost, Y, which can be made at any time t, between the present (t=0) and the time the nonrenewable resource is expected to run out (t=). When the resource deposit is exhausted at time ¢ = f, a backstop technology is available at a constant real cost, P,. With a discount rate of 6, the user cost, P, is given by P(t) = Pye" (1) where r is the (real) discount rate. CosTs In the examples below, we assume that implementing the conservation technology does not change the operating cost of producing energy from the exhaustible resource. Thus the entire cost of conservation is a capital investment, Y, made at some time ty between now and the time when the resource would otherwise be used up, t2. The present discounted cost of conservation, C, therefore, is equal to the discounted capital cost: C=Ye™ (2) G-1 BENEFITS Since there is no hypothesized change in operating costs, the benefits of making a conservation investment derive from an acquired ability to delay having to switch over to the backstop technology. Let q(t) represent consumption at time ¢ (before making any conservation investments). Suppose also that the conservation technology saves a constant fraction a of q(t). Then the benefits in year ¢ >t, B(t), are equal to user cost -- the opportunity cost of using up the depletable resource -- times the amount of consumption saved at time 1: : B(t) = Pe” ag(t) (3) One of the effects of the conservation technology is that it changes the date of depletion of the nonrenewable resource. If the change is significant -- e.g., greater than one year -- then the user cost will be altered. That is, equation (3) only accurately represents the benefits of a small incremental conservation investment. Let us assume for simplicity that consumption (without the investment) grows at a constant rate 6: q(t) = qoe™ Then if the depletion date is extended -- say from 12 to f2+x -- total present discounted benefits, B, may be represented as _ ff? (-r+6) B i Piqoe at (4) The fraction of consumption conserved by the investment, a, does not appear in equation (4) directly. However, it obviously affects the size of benefits indirectly through its effect on x, the grace period after making the investment during which one puts off paying for the expensive backstop technology. we ignore for the moment the relationship between a and x. Equation (4) may be integrated directly, producing the following result: B- (7:0) ert Oke [i _ efrt0*], (6 = r) (5) The present discounted benefit shown in equation (5) implies that the user cost changes as a result of making the investment. Before the conservation technology is installed, the user cost at time ¢, will have risen to: Pu) = Pere (©) Immediately upon installing the new technology at time 4, the user cost drops to POY) = Pye (7) MAXIMIZING NET BENEFITS The problem to solve may be summarized as follows: Given an opportunity to invest in a technology with a capital cost of Y which saves a fraction a of consumption, at what time 4 (if ever) should the investment take place to maximize net benefits. The first-order conditions for a maximum are that marginal cost with respect to t, equals marginal benefit. That is, the optimal timing is obtained by setting dC/dt, = -rYe7" (8) equal to aB/ dt, = Pygo e"*X2* (de/dt,) (9) and solving for 1. Let us call the optimal time 1,°. If the investment should be undertaken at all, it should be undertaken at time t,", where the marginal discounted benefit equals marginal discounted cost. It should be undertaken, of course, if By) > CG) To understand more about the optimum time t°, we need to address the relationship between the fraction of original consumption saved by the technology, a, and x, the extra life of reserves "purchased" by the conservation investment. In general, x(4) = fle,0G)9G)] where Q(t) represents the amount of reserves remaining at time ¢. Reserves remaining before the investment is made: Hn) = f° a(e)at must equal those remaining immediately after the investment: O(t) = f°" d- ada(nat Consequently, the assumption that consumption grows at a constant rate implies q(t) = G00" = faye at = f°" a)gge “at (20) Integrating equation (10) and solving for x yields the following: x=(5)inz, when 6 «0, where (11) e*? — ae” [a] -(4 =e -t,), whend=0 (12) Interpreting the first-order conditions for t;” requires understanding dx/dt;. The change in additional reserve life with a change in the investment date may be written as follows: dx/dt, = “Oe | dt,) = a > e 2-4), when 6 =0 (13) when 6=0 (14) -a Under what conditions does an optimum 1," exist as specified by the set of conditions defined in equations (8),(9), (13), and (14)? For O<a<1l, the term L in equations (11) and (13) must be positive in order for x to be defined. This holds when G-4 §. 2 (15) The numerator, the logarithm of a fraction less than one, is negative, so 6, the growth rate of demand, may be quite a large negative rate as long as the conservation fraction is relatively small. These equations are saying that a solution to the model does not exist when the investment conserves so much of the resource relative to future demand that the user cost of the resource is zero. When x is defined, equation (8) shows that the marginal cost is a nonincreasing function of t; (assuming a nonnegative discount rate). Similarly, the benefits always decrease with t, in equation (9), because dx/dt, is negative whenever x is defined. The second-order conditions -- the change in marginal costs and marginal benefits with respect to t, - show that under reasonable assumptions a t,* satisfying O<t <t, exists which maximizes net benefits. The second derivative of total cost with respect to t;* is @C/dt? = r?Ye™ (16) As long as Y is positive, equation (16) insures that d*C/dt,? is positive. The second derivative of the benefits equation is d?B/ dt? = Pigg e*°X2**)| (d?x/dt,?) - (7 - 6)(de/adt,” ] (17) Equation (17) has the same sign as [(d?x/dt,2) - (r - 5)(dx/dt,) |. But d?x/dt,? again depends on the value of 6: d?x/dt,? = 6 (dx/dt,)[1 - (dt/de,)}, when 6 «0 (18) d*x/dt, =0, when 6 =0 (19) This implies that @B/ dt? = Pygy eo" i E <I when 6 = 0 (20) dB) dt,? = Pigg &-"*X2*”)[ (de /dt, [ 6— r(de/dt,)]}, when 6 «0 (21) G-5 For = 0, equation (20) shows that the marginal benefit is a decreasing function of t, for any positive discount rate, r. When 60, equation (21) shows that, since dx/dt, is negative, a delay in implementing conservation will yield a maximum unless the following condition is true: 6< r(dx/dt,) < 0 (22) Inequality (22) only holds in situations with a decreasing demand in association with a long reserve life. The equation is saying that if demand declines fast enough relative to the discount rate, the model does not work because the user cost after the conservation investment falls to zero. In the usual case, with 6 = 0 and a positive user cost, the second derivatives show that an optimal 4" satisfying O< 4 <t, exists. The economic reasoning behind the solution is as follows. Delay in making the conservation investment reduces the cost in present value terms at the discount rate. However, after some point in time, the benefits will begin to fall even faster than the costs because there remain less reserves to conserve, and the rate of depletion (production as a fraction of remaining reserves) inevitably increases as the reserves start to run out. AN APPLICATION The problem of making investments to conserve natural gas produced from Barrow gas fields provides an application of the model. The figures calculated below derive from an assumed possibility of saving 20 percent of consumption with an investment of $6 million (the cost does not change in real dollars over time). The assumed present consumption is 1.14 x 10!2 BTUs per year, and we analyze the present value of costs and benefits using a 5 percent real discount rate. Table G-1 lists the specific assumptions used to run the model for each of three scenarios corresponding to low, medium, and high energy cost projections. G-6 & Table G-1. Model Assumptions for Three Scenarios Variable Variable units Lowscenario Mid scenario High scenario Fuel price (P5) _$/MMBTUs 9 12 15 Growth rate (5) annual rate 1.1% 21% 3.3% Initial life (t2 ears from t=0 79 51 32 Figure G-1a, Figure G-2a, and Figure G-3a show a graphical representation of total benefits, B, total costs, C, and net benefits for the low, mid, and high scenarios, respectively. Figures G-1b through G-3b show how the user cost falls after making the conservation investment in each of the respective scenarios. The example conservation investment is feasible under all three scenarios, but the optimal timing varies greatly. Figure 1 shows that under the scenario associated with the longest reserve life, the net benefits of making the conservation investment continue to grow until roughly halfway through the life of the field. In the mid scenario, net benefits are maximized by waiting only six years, even though the field still has 45 more years of life. In the high scenario, the backstop price is so high that it is best not to delay and make the investment right away. Table G-2. Model Results for the Three Scenarios Variable Variable units Lowscenario Mid scenario High scenario Invest. yr (t1* ears from t=0 36 6 0 Extra life (x ears from t=t2 8.2 6.8 4.6 $MM (PD 2.3 14.7 37.7 Net PDV (B Figure G-la Benefits and Costs of Making Investment to Conserve a Depletable Resource Barrow Gas Fields Example Present discounted value (Millions) 0 5 10 7% 20 25 30 85 40 45 650 Investment year in the future To COSTainitara Benefit —— Net benefit Low case scenario assumptions Figure G—1b Opportunity Cost of Using Natural Gas (User Cost) Barrow Gas Fields Example Dollars per MMBtu 2.5 2 1.5 1 0.5 ° 5 10 15 20 25 30 35 40 45 £50 Years in the Future —— Without Investment ~----- With Investment Low case scenario assumptions Figure G-2a Benefits and Costs of Making Investment To Conserve a Depletable Resource Barrow Gas Fields Example Present discounted value (Millions) 0 5 10 15 20 25 30 35 40 45 #50 Investment year in the future — Cost ----- Benefit —— Net benefit Mid case scenario assumptions Figure G-2b Opportunity Cost of Using Natural Gas (User Cost) Barrow Gas Fields Example Dollars per MMBtu Years in the Future —— Without Investment ~----- With Investment Mid case scenario assumptions f Figure G-3a Benefits and Costs of Making Investment to Conserve a Depletable Resource Barrow Gas Fields Example Present discounted value (Millions) 40 30 20 i: Poou poetry yp pai priya papi pri yy jt 0 5 10 15 20 25 30 35 Investment year in the future — Cost ---- Benefit —— Net benefit High case scenario assumptions Figure G-3b Opportunity Cost of Using Natural Gas (User Cost) Barrow Gas Fields Example Dollars per MMBtu 16 147 Zr 107 0 5 10 #15 20 25 30 35 40 45 50 Years in the Future —— Without Investment ~---~- With Investment High case scenario assumptions G- 10 APPENDIX H NSB Village Resource Assessment NORTH SLOPE BOROUGH ENERGY ASSESSMENT NSB VILLAGE RESOURCE ASSESSMENT As part of the comprehensive energy assessment for the North Slope Borough, local gas resources in close proximity to the villages should be evaluated for the potential of supplying low cost energy for electrical generation and building space heating. Where local natural gas sources are available, reliable energy can be provided at the lowest costs. Attached is a brief summary of existing information which provides a very preliminary assessment of gas potential in the vicinity of Nuiqsut, Atqasuk, Wainwright, Pt. Lay and Pt. Hope. Also included are cost estimates to perform an assessment of existing data to select specific areas for further seismic testing and development in proximity to the villages. Ownership of selected surface and subsurface lands and availability of these lands for development will be determined by the assessment. It is to be noted that based on our current expectations of moderate probability of locating gas at Nuiqsut and Atqasuk, the initial Seismic Testing Estimate provides for data acquisition suitable to be used for developmental drilling at these two villages. Recommendations In order to provide the most economical energy resources to the villages, it is recommended that local gas sources be technically evaluated as potential energy supplies. It is proposed that this be done in two phases as follows: NORTH SLOPE BOROUGH ENERGY ASSESSMENT Phase I - Evaluation of existing seismic and well log data at an estimated cost of $220,000. Phase II - Preliminary seismic testing to support gas development in the villages at an estimated cost of $3.5 million. Specific scope of this Phase II testing will be defined during the Phase I evaluation. H-2 NORTH SLOPE BOROUGH ENERGY ASSESSMENT NUIQSUT Nuiqsut village lands are owned by ASRC. ASRC owns most of the subsurface rights in the immediate vicinity of Nuiqsut while the Kuupik Inupiat Corporation owns the surface rights. NPRA exploration has occurred west of Nuiqsut within the NPRA while to the east private exploration has been ongoing since the early 1960’s. There are three exploratory wells within a 20-mile radius of Nuiqsut. The ARCO Itkillik No. 1 is located approximately 11 miles south; the SOHIO Nechelik No. 1 is located approximately 12 miles north; and the Union Kookpuk No. 1 is located approximately 14 miles northeast. Seismic exploration in the region consists of approximately 44 miles of nonproprietary NPRA data; approximately 40 miles of spec data shot by Western Geophysical; and an unidentified amount of industry data. The area of seismic coverage can be expanded to the West within NPRA if need be. ARCO Alaska, Inc. has made plans to run a seismic program this spring. Some of this data will be obtained in the vicinity of Nuiqsut over ASRC lands. ASRC’s agreement with ARCO is that ASRC will receive the rights to view the data one year after acquisition. Nuiqsut subsurface data indicates a gas resource potential for the area. The SOHIO Nechelik No. 1 well had oil shows in the interval from 7110 to 7150 feet in what was identified as Kuparuk River sandstone equivalent. Higher in the well there are minor gas kicks in the silty sands of the Torok Formation at about 6100 to 6150 feet. Quality of the Union Kookpuk No. 1 well logs make it difficult to determine the presence of shallow gas in this well. Resistivity logs are needed to evaluate the ARCO Itkillik No. 1 well. Exploration wells drilled outside of the 20 mile radius to the west, north and northeast generally show the presence of shallow gas at depths less than 6000 ft. in the Torok Formation and in the overlying Colville Group. NORTH SLOPE BOROUGH ENERGY ASSESSMENT Resistivity logs need to be purchased to evaluate both the ARCO Itkillik No. 1 and the Union Kookpuk No. 1 wells better. NPRA seismic data is available but the southern ends of Western Geophysical lines would be necessary to do a more complete assessment of resource potential around Nuigqsut. Summary There is a moderate probability of finding quantities of gas sufficient enough to provide an energy source to the village of Nuiqsut. Additional well log and seismic analysis are recommended to better determine the energy potential in the Nuiqsut village area. H-4 NORTH SLOPE BOROUGH ENERGY ASSESSMENT ATQASUK Atgasuk village subsurface lands are owned by BLM. NPRA exploration has covered the Atqasuk area. Three wells were drilled in the Atqasuk region: the South Meade No. 1 well is 16.5 miles NE of Atqasuk, the Meade No. 1 well is 29.7 miles to the south, and the Topagruk No. 1 well is 38.5 miles NE. Seismic exploration in NPRA covered the Atqasuk area. NPRA lines are available for inspection. There is approximately 75 miles of seismic in a 20 mile radius of the village. Atqasuk subsurface data indicates potential in coal and methane. Coal beds are present in Atqasuk subsurface from 100 to 500 feet below surface. Coal is lignitic with sub-bituminous stringers. Coal beds are 2 to 5 feet thick, approximately 9 seams. Methane shows are associated with the coal beds. The South Meade No. 1 well also encountered gas-bearing sandstone from 1838 to 1853 ft. and 1870 to 1885 feet. The sands are fine to medium grained, fairly well sorted and are of moderate reservoir quality. Assorted minor gas and oil shows were encountered in deeper strata, from 4400 to 7500 feet. A gas sample was taken from the 13-3/8" * 20" casing; analysis was 95.33% methane. The gas is either from the coal beds or the shallow sand. BTU content = 1061 BTU/cu. ft. NORTH SLOPE BOROUGH ENERGY ASSESSMENT Summary Overall, the Atqasuk area shows moderate to poor coalbed methane potential, and moderate to good sandstone methane potential. Normally, a reservoir at 1800 feet would be too cold to produce, but the Meade River area may contain anomalously thin permafrost. This needs more study. H-6 NORTH SLOPE BOROUGH ENERGY ASSESSMENT Wainwright Wainwright village subsurface lands are owned by ASRC. NPRA exploration has occurred in the Wainwright area. The three nearest wells are: Peard Test Well No. 1, 24 miles to ENE; Kugrua Test Well No. 1, 33 miles to ESE and Tunelik Test Well No. 1, 40 miles to SW. Seismic exploration covers the Wainwright area. NPRA lines are available for inspection. There is approximately 90 miles of seismic in a 20 mile radius of the village. Wainwright subsurface data indicates resource potential in coal and methane. Coal beds are present in the Wainwright subsurface from 0 to approximately 1800 ft. There are about 20 coal seams, according to Peard data, most are 5 to 7 ft. thick. Seams may be thicker at Wainwright. Coals are lignitic to bituminous in rank. Maximum seam thickness is probably 10 to 15 ft., minimum is approximately 2 ft. Drilling data indicates methane shows at most coal seams, even those in permafrost. Total thickness of all coal seams is approximately 100 to 150 feet. The coal beds are in the nonmarine unit of the Corwin Formation, Nanushuk Group. The same formation contains the coal at Deadfall Syncline. The Wainwright coal seams are a likely prospect for coalbed methane. Development of coalbed methane in permafrost is an unknown, but may be accomplished with a small rig. Wainwright area wells also showed gas in several sands of the Torok Formation, Nanushuk Group. The Peard well had sandstone-related gas shows from 1470 - 5810 feet. Well logs show sandstone development in many of the Cretaceous units, although lateral continuity of these units has yet to be shown. Typical sands are approximately 30 ft. thick and very fine-grained with low to moderate porosity. H-7 NORTH SLOPE BOROUGH ENERGY ASSESSMENT Summary Wainwright area beds show good potential for coalbed methane. Coals within 1000 ft. of surface may be developed at relatively low cost, by using a small drill rig. Wainwright lands show moderate to poor potential for sandstone-reservoir methane. Gas shows have been recorded in many horizons, but lateral continuity of these zones is unknown. NORTH SLOPE BOROUGH ENERGY ASSESSMENT Pr. Lay Pt. Lay village subsurface lands are owned by ASRC and surface lands are owned by the Cully Corporation. Resource potential in the Pt. Lay region is most likely restricted to coal and possible coalbed methane as in Wainwright. There is no subsurface data available in the immediate vicinity of Pt. Lay. The nearest information for the area is from the Deadfall Syncline area 40 miles south. The coal at Deadfall Syncline is currently being mined and distributed to Pt. Lay for energy. The quality of coal at Deadfall Syncline is some of the highest quality coal in the world. It has low-ash, low-sulfur, and low moisture and high BTU values. Historically Pt. Lay residents have mined coal from near what villagers called the Tepsako River, 15 miles east of the village. There is no Tepsako River on USGS maps although there is a northward-flowing tributary of the Kokolik River about 15 miles east of the village, but occurrences of coal along this tributary have not been documented. The closest known coal exposure to Pt. Lay is on the Kokolik River approximately 35 miles east of Pt. Lay. These coals are exposed in the Tupikchak and Flintchip synclines. This coal has an extremely high ash content. A coal occurrence reported to be mined by village residents is located about 10 miles south of Pt. Lay. These coals are exposed in the Epizetka anticline. The limbs of the anticline are steeply dipping thus restricting potential for mining. Nine coal beds of less than 8 feet thick have been observed on the Kokpowruk River. These coals are located between the Barbara syncline and the Snowbank anticline approximately 22 miles SSE of Pt. Lay. NORTH SLOPE BOROUGH ENERGY ASSESSMENT Summary As stated above, there are coals in the immediate vicinity of Pt. Lay but exposures are limited to rivercuts. Mining of coal closer to Pt. Lay would be expensive since the coal is not exposed at the surface (except in river cuts). The coal in the area may have methane potential, similar to Wainwright, but this could only be determined by drilling a well in the area. H-10 NORTH SLOPE BOROUGH ENERGY ASSESSMENT Pr. HOPE Pt. Hope village lands are owned by ASRC. ASRC has both surface and subsurface rights in the Lisburne Hills area approximately 12 miles east of the village, and ASRC and Tigara Corporation own the subsurface and surface lands along the coast north of Pt. Hope. Coal bed methane and sandstone methane gas resource potential in the Pt. Hope area is considered poor. Coal resource potential is moderate. There are known exposures of Mississippian low-volatile bituminous and semianthracitic coals in the Lisburne Hills. Seam thicknesses are generally less than 6 feet and are structurally complex; most of the beds are deformed and broken. Coal quality is generally good with 0.4 to 0.8% sulfur and 2 to 18% ash, with a heating value of 11,500 to 14,750 BTU/Ib. Structural complexities in the area would make economical recovery of coal very difficult. Additional literature and possible field analysis is recommended to make a full appraisal of this coal being a possible local energy source for the village of Pt. Hope. Some of the best exposures of Mississippian coal-bearing rocks are in the sea cliffs near Cape Dyer about 25 miles northeast of Pt. Hope. There have been 13 coalbeds ranging from 2.5 to 11 feet thick identified in this area. Structural complexities in the coal-bearing section will make development expensive and mining difficult. The coals are of relatively good quality with high BTU values. Relative proximity to Pt. Hope warrants investigation for possible local use. Summar y Additional research into the coal potential in the Pt. Hope region is recommended. Known coal deposits of relatively high quality have been identified by past researchers in the area. There may be enough reserves present in the structurally complicated coal-bearing units either to the H-11 NORTH SLOPE BOROUGH ENERGY ASSESSMENT east or the north of the village to warrant development for local use. Gas resource potential in the Pt. Hope region is considered poor and not warranting further exploration. H-12 NORTH SLOPE BOROUGH ENERGY ASSESSMENT COST ESTIMATE FOR INITIAL VILLAGE RESOURCE ASSESSMENT 1. Acquisition of Historical Seismic and Well Log Data. Labor: $32,000 Data Procurement: 25,000 Ds Literature Search, Personal Contacts, On-Site Evaluations at Point Hope. Labor: 64,000 Travel: 5,000 3. Data Evaluation and Selected Reprocessing as Necessary. Labor: 32,000 Data Reprocessing: 20,000 4, Project Management and Support Services __ 20,000 $198,000 5: Contingency - 10% __ 20,000 $218,000 Allow 9 - 12 months to complete. H-13 NORTH SLOPE BOROUGH ENERGY ASSESSMENT COST ESTIMATE FOR PRELIMINARY SEISMIC TESTING NSB VILLAGE RESOURCE ASSESSMENT 1.A. At Atqasuk: $1.0 MM Perform a seismic program which fulfills the needs of development drilling. 1.B. At Nuiqsut: $0.5 MM Perform a seismic program which fulfills the needs of development drilling. It is estimated that a reduced program can be utilized due to the quantity of existing seismic data which will be available. 1.C. At Wainwright & Pt. Lay: $1.0 MM Perform exploratory seismic to assess a broad area for each village. Localized data is not available. If results are promising, development seismic testing will be included in the development costs of the gas fields. ($0.5 MM/village) 1.D. At Pt. Hope: $0 Due to the nature of subsurface geology, there is a very low probability of finding gas reserves at Pt. Hope. For this reason, it is felt that seismic testing is not warranted. H-14 NORTH SLOPE BOROUGH ENERGY ASSESSMENT Sub-total - Seismic Evaluation Costs: $2.5 MM De Geoscience Evaluation of Seismic Data $0.5 MM 3: Project Management, Support Staff, Permitting & Travel $0.2 MM Sub-total: $3.2 MM Contingency - 10%: $0.3 MM TOTAL $3.5 mm Allow 12 months to complete after initial resource assessment is finished. H-15