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Home My WebLink AboutTogiak Hydropower and Waste Heat Feasibility Findings & Recommendations 1985 Alaska Power Authority Findings and Recommendations Togiak Hydropower and Waste Heat Feasibility November 1985 Findings and Recommendations TOGIAK Hydropower and Waste Heat Feasibility November 1985 PROJECT TEAM: Bob Loeffler Project Economist David Denig-Chakroff Project Manager Jerry Larson Project Manager Brent N. Petrie Edwin L. Morris, Associate Power Systems Planning Executive Director, Planning Robert D. Heath Executive Director © 1985 Alaska Power Authority Findings and Recommendations Togiak Hydropower and Waste Heat Feasibility Table of Contents Executive Summary I. Introduction A. Project History and Previous Studies II. Existing Electric System III. Analysis of the Hydroelectric Proposal A. D. Description of the Hydroelectric Project 1. Technical Description 2. Construction Cost Estimate Data for the Economic Analysis 1. Load Forecast 2. Potential Hydroelectric Energy Supply 3. Fuel Costs 4. Operation and Maintenance Costs 5. Capacity Costs Benefit/Cost Analysis 1. Net Present Value Analysis (Expected B/C Ratio) 2. Sensitivity Analysis Conclusion IV. Analysis of the Waste Heat Proposal A. Qw Appendix Appendix Appendix Appendix Appendix Appendix F. Appendix G. . mooarQwyYp 168/427 Description of the Waste Heat Proposal 1. Technical Description 2. Construction Cost Estimates Benefit/Cost Analysis Conclusion Construction Cost Estimate The Load Forecast Detailed-Benefit/Cost Calculations - Hydro Detailed Benefit/Cost Calculations - Waste Heat Twin Hills Intertie with Hydroelectric Project Cannery Intertie with Hydroelectric Project Letters and Comments -- ii -- Page ww a List of Figures Re Project Layout - Kurtluk River Hydroelectric Project 2. Project Layout - Proposed Waste Heat Recovery System List of Tables Historic Monthly Energy Consumption . Benefit/Cost Summary (Hydroelectric Project) Sensitivity Analysis (Hydroelectric Project) Economic Analysis (Waste Heat Project) Benefit/Cost Summary (Waste Heat Project) aPWNMrH 168/427 -- iii -- Page 17 10 13 15 18 20 Executive Summary A Waste Heat Recovery System constructed for the City of Togiak would have benefits in excess of its costs. It would lower the cost of energy for the community. A proposed hydroelectric project for the community is, however, not economically feasible. The net present value of the costs of electricity produced by the hydroelectric project would be greater than that produced by continued use of diesel generators. Construction Costs. Construction costs for the proposed hydroelectric project on the Kurtluk River are estimated to be $6.5 million dollars (in 1986 dol- lars). Construction costs for the Waste Heat Recovery System are estimated to be approximately $370,000, including equipment and installation costs, and Alaska Power Authority construction management and overhead costs. The proposed waste heat system would use heat from the Alaska Village Electric Cooperative (AVEC) powerhouse to service the school. Benefit/Cost Analysis. The benefit/cost ratio for the Waste Heat Recovery System is between 1.69 and 1.74 depending on load growth assumptions. The rate of return for the project (including all costs) is 16%. However, the project may require a portion of its total costs to be grant financed if benefits are to accrue during its first year of operation. Until a financing plan is developed, the size of the required grant cannot be determined. The benefit/cost ratio for the proposed hydroelectric project is approximately 0.6. It varies somewhat depending on assumptions but does not exceed 1.0 under reasonable assumptions. l Sensitivity Analysis. Conclusions concerning economic feasibility and benefit/cost ratios are based upon certain assumptions and estimates, includ- ing construction cost, load growth, and future oi] prices. At this time, most of the estimates are somewhat preliminary. It is therefore important to test to see if changes in any of the assumptions would change the conclusions. If so, further study to refine the estimates would be necessary. If not, the conclusions can be acted upon without further investigation, which is the case with respect to this study. For the hydroelectric project, Power Authority staff analyzed 54 different scenarios with different assumptions relating to project life, load growth, fuel prices and construction costs. Only in one case was the benefit/cost ratio greater than 1.0. This case required the combination of a number of extremely optimistic assumptions. The most likely benefit/cost ratio is 0.57. If conditions change dramatically (extreme increases in oil prices, load growth, etc.), the economics of the project can easily be updated. Without such changes, the project will not pay back its costs and should not be built or studied further. A similar but less extensive analysis was conducted for the waste heat recov- ery system. It indicates that the proposed waste heat system is an economically beneficial project. Implementing the Recommendation. At the present time, the Power Authority lacks a source of funds to construct a waste heat project at Togiak. However, in its FY 87 capital budget document, the Power Authority Board of Directors has requested $37,200 in legislative appropriations to be combined with $334,800 in revenue bonds to finance the project. In the event this funding is not approved, alternative sources of funding should be investigated. 168/427 -- 2 -- Chapter I. Introduction Previous studies have indicated that a waste heat facility or a small hydro- electric project on the Kurtluk River may be feasible alternatives that would lower energy costs in Togiak. This report presents the Power Authority Findings and Recommendations for these two energy alternatives. It outlines the technical and economic feasibility of both the hydroelectric and the waste heat proposals, estimating whether and to what extent the projects would raise or lower the cost of energy to Togiak. A. Project History and Previous Studies In 1981, a consultant on contract to the Power Authority completed a Recon- naissance Study of Energy Requirements and-Alternatives for Togiak. At the same time, a consulting firm on contract to the U.S. Corps of Engineers produced a more general reconnaissance report of small hydro sites in South- west Alaska, including Togiak. Both reports identified a possible small hydroelectric site on the Quigmy River as a possible energy source for Togiak. In addition, the Power Authority reconnaissance study found that a waste heat facility might also be feasible. On the basis of the reconnaissance recommendations, feasibility investigations were begun for various sites near Togiak by Dowl Engineers on contract to the Power Authority. The investigations found that, contrary to expectations, sites on the Quigmy river were not economically feasible. This conclusion resulted primarily from the high cost of constructing the project due in part to the cost of building a construction road to the site. The analysis did indicate that a closer hydroelectric site -- on the Kurtluk River -- might be feasible. Consequently, the consultant was asked to prepare a preliminary analysis for the Kurtluk River site without gathering streamflow or detailed feasibility data. The ensuing "Pre-Reconnaissance" report indicated that a project on the Kurtluk River would have a benefit/cost ratio of between 1.13 and 1.30, depending on the assumptions utilized. 168/427 -- 3 -- During 1983 and 1984, the Power Authority gathered streamflow information on the Kurtluk River and visited the site in order to more accurately determine the project's feasibility. Also in 1984, the Power Authority performed detailed waste heat investigations for 42 communities in rural Alaska, includ- ing Togiak. This report uses the two years of detailed streamflow information, the de- tailed waste heat data, and updated economic data and parameters (fuel prices, electric load, etc.) to provide a reliable conclusion concerning the feasibil- ity of the hydroelectric and waste heat proposals for Togiak. The titles of the various reports completed for Togiak are listed below. 1. Reconnaissance Study of Energy Requirements and Alternatives: Togiak, Goodnews Bay, Scammon Bay and Grayling, February 1981, prepared by Northern Technical Services for the Alaska Power Authority. A summary report for Togiak was released in April 1981. 2. Small-scale Hydropower Reconnaissance Study, Southwest Alaska, April 1981, prepared by R.W. Beck and Associates for the U.S. Army Corps of Engineers. 3 Reconnaissance Study for Togiak Hydroelectric Project, Volume E, Final Report, August 1982, prepared by Dowl Engineers for the Alaska Power Authority. 4. Togiak Hydreelectric Project, Kurtluk River Alternative Projects, Pre-Reconnaissance Report, August 1982, prepared by Dow] Engineers for the Alaska Power Authority. 5. Rural Energy Construction Program 1984-1985, 42 Villages Waste Heat Study, April 1985, prepared by Raj Bhargava Associates for the Alaska Power Authority. 168/427 et ere Chapter II. Existing Electric System Electric power is supplied to Togiak by the Alaska Village Electric Co-Op (AVEC) with two 300-kW and one 160-kW diesel generators housed in a small metal frame powerhouse in the center of town. Distribution of power is through buried cables, and the system supplies 2400 volt, 3-phase power. AVEC serves 138 customers in Togiak including six community facility customers. The 1985 population of Togiak is estimated to be 545. AVEC's retail electricity rate is extremely high. The residential charge is 44.88¢/kWh with a minimum monthly charge of $18.60. The Power Cost Equaliza- tion program (PCE) subsidizes the first 750 kWh at 31.53¢/kWh to bring the rate for the first 750 kWh down to 13.35¢/kWh. The small commercial rate (less than 10 kW demand and 2,880 kWh/mo.) is 34.20¢/kWh with the same PCE rate applicable for the first 750 kWhs. The large power rate includes consum- ers whose power or energy requirements are greater than the limits for the small commercial rate. The price for these consumers is 32.5¢/kWh for the first 1,500 kWh/month and 24.8¢/kWh thereafter. In addition, there is a demand charge of $10/kW for each kW of peak demand over 10 kW. (Again, the PCE rate of 31.53¢/kWh subsidizes the first 750 kWh/mo. ) According to AVEC's PCE records, the April 1985 fuel price was $1.3589/gallon. In addition, the most current information (from the waste heat study) indi- cates that the City of Togiak is currently paying $1.29/gallon and the school is paying $1.12/gallon for heating oil. 168/427 a= § -- Chapter III. Analysis of the Hydroelectric Proposal A complete analysis of the hydroelectric proposal requires a determination of the technical feasibility of the project and a comprehensive economic analysis in order to determine how the project will effect electricity costs in Togiak. This section provides a technical description of the proposed project, fol- lowed by an explanation of the base data and by a benefit/cost analysis and conclusions. Data for the analysis is based on the Pre-Reconnaissance Report using the updated economic parameters and streamflow, electric load, and fuel price data. The following tasks were completed as part of the update: (1) Substi- tution of actual streamflow information for the synthesized hydrology to calculate the electric production available from the project, (2) Use of updated turbine efficiency parameters to calculate the electric production potential, (3) Use of improved load-duration information to calculate the project's useable electric production, (4) Update of load forecast based on recent load information (including both the energy and capacity forecast), (5) Update of the fuel price assumptions based on recent fuel price informa- tion, (6) Update of the construction cost from 1982 to 1986 dollars, and (7) Revision of the economic assumptions to be consistent with current Power Authority parameters and experience including discount rate, fuel escalation rate, diesel fuel efficiency, project life, and operation and maintenance cost. A. Description of the Hydroelectric Proposal 1. Technical Description. The layout of the Kurtluk River hydroelec- tric site is shown in Figure 1. The proposed damsite is in a 42-foot deep, narrow canyon immediately downstream from the confluence of the Kurtluk River and a major tributary. The proposed design would require a 40-foot high, concrete faced, rockfill dam. The penstock would be 36-inches in diameter, 8,400 feet long, and would divert the project flows out of the Kurtluk Basin over an intervening ridge. An impulse turbine would utilize 160 feet of head 168/427 -- 6 -- z f tes OZ TWIN HIL Transmission Line {ae : FIGURE 1. Project Layout - Kurtluk River Hydroelectric Project and the maximum flow of 36 CFS to produce 340 kW. The project would be a run-of-river project. (The impoundment is necessary to boost the water to sufficient height to make the interbasin diversion possible.) The Kurtluk River contains various species of fish. Alaska Department of Fish and Game escapement estimates for chum salmon in the Kurtluk River are 1,200 chums in 1977, 400 in 1978, and 200 in 1979. In addition, the Alaska Fisheries Atlas indicates that dolly varden trout, rainbow trout, whitefish, and northern pike may also be present. No information is available on the upstream extent of spawning. According to the 1982 Reconnaissance Report, a field survey noted coho salmon, dolly varden trout, and coast-range sculpin in the river. The report also states that "the Togiak Village Council reported that almost no use is made of the Kurtluk River for subsistence or sport fishing." Because the proposed hydroelectric project would sometimes divert the entire flow of the river into the adjacent river basin, the impact on whatever fishery exists in the river would probably be severe. No attempt is made in this report to assess the level of the impact or the cost of possible mitiga- tion measures. There are two additional load centers near Togiak: (1) the Village of Twin Hills, approximately four miles east, and (2) the cannery across the bay. (See Figure 1.) Twin Hills' annual electricity use is estimated to be approx- imately 150,000 kWh. Due to the cost of constructing an intertie to Twin Hills and the community's low energy use, the potential benefits gained from building a transmissien line to Twin Hills to provide power from the hydro- electric project are very small. Such benefits have almost no effect on the economic feasibility of the hydroelectric project. A discussion of the costs and benefits of connecting Twin Hills to the Kurtluk River hydroelectric project is contained in Appendix E. The situation for the Togiak cannery is similar to that of Twin Hills. The benefits of connecting the cannery to Togiak's electric system just balance 168/427 -- 8 -- the cost of constructing the intertie. The presence of the cannery therefore has no effect on the decision to build the hydroelectric project. A dis- cussion of the costs and benefits of connecting the cannery to the hydroelec- tric project are contained in Appendix F. 2. Construction Cost Estimate. The 1982 Kurtluk Pre-Reconnaissance study estimated the cost of constructing the hydroelectric project to be $5,810,000 in January 1982 dollars. This cost estimate has been updated to January 1986 dollars using the past and projected inflation rates given below. The 1986 cost estimate for the project is $6,780,000. Details of the estimate are contained in the Pre-Reconnaissance Study and are reproduced in Appen- dix A. January 1982 $5,810,000; Inflation = 4.3% January 1983 $6,060,000; Inflation = 4.1% January 1984 $6,310,000; Inflation = 3.6% January 1985 $6,540,000; Inflation = 3.7% January 1986 $6,780,000; B. Data for the Economic Analysis 1. Load Forecast. AVEC submits monthly energy generation figures to the Alaska Power Authority as part of the Power Cost Equalization Program. Available monthly energy consumption figures for Togiak for the period from July 1983 through March 1985 are shown in Table 1. The average annual power generation for the period was 999,868 kWh/yr. The 1985 electric load is estimated to be 1,005,000 kWh/yr. On that basis three alternative load forecasts were developed assuming 0%, 2%, and 4% load growth for twenty years. Since there are no large energy-consumptive developments expected in Togiak in the near future, these three growth scenarios are expected to bracket Togiak's future energy growth. Table B-1 in Appendix B shows the load forecast for the three growth scenarios. A comparison of 168/427 -- 9 -- Tables B-1 and B-2 shows that both the 2% and 4% growth rates are significant- ly higher than the load forecast used in the 1982 reconnaissance study. Table 1. Historic Monthly Energy Consumption Month 1983 1984 1985 (kWh) (kWh) (kWh) January - 85,147 51,240 February - 99 ,344 177 ,635 March - 68 ,738 83 ,038 April - 71,951 - May - 67,219 : - June - 93,817 - July 55,405 72,857 - August 79,360 85 ,557 - September 63,717 73,292 - October 92,531 96 ,690 - November 79,010 92,618 - December 79,911 97 ,671 - 2. Potential Hydroelectric Energy Supply. The Pre-Reconnaissance Study's energy supply estimate was updated using the monthly streamflows taken in Kurtluk River from the time gauging began in October 1982 until a flood damaged the gauge in September 1984. The update calculated the average monthly power output of the stream (assuming 8,400 foot, 36-inch diameter penstock, 75% turbinexgenerator-transformer efficiency and 5% down time). It then compared the average monthly power output from the hydroelectric project to a hypothetical load duration curve estimated for Togiak, in order to estimate the amount of useable energy produced by the project. In general, during the early years of the load forecast, the hydroelectric project could produce approximately 95% of Togiak's energy. As Togiak grows, the proportion drops. For the 2% load forecast, the proportion drops to 90% in the year 168/427 -- 10 -- 2004; for the 4% forecast, it drops to 80%. In general, the proportions are only slightly less than those assumed in the 1981 reconnaissance study. 3. Fuel Costs. For purposes of this analysis, a diesel generator efficiency of 12 kWh/gallon is assumed. Although the current generator efficiency at Togiak is only about 10 kWh/gallon, it is anticipated that the efficiency will improve as newer replacement generators are put on line. The price of diesel fuel is taken from AVEC's April 1985 Power Cost Equaliza- tion application as $1.3589/gallon. This fuel price is higher than that paid by other utilities in the general area, thus it might slightly overstate the benefits of the hydroelectric project. In this report, the real fuel escalation rate used (the rate of expected fuel price increases above the rate of inflation) is consistent with other studies performed by the Power Authority. It assumes that the 1986 price of diesel fuel will be 4% less than the 1985 price, that the price will remain constant (in real terms) from 1986 until 1989, and that the price will escalate from 1989 through 2004 at 2% per year (real). After 2004, the price is again assumed to remain constant. 4. OQperation and Maintenance Costs. Operation and Maintenance (0 & M) is required for both the hydroelectric and the diesel systems. It is assumed that the same size powerplant staff would be able to maintain both the hydro- electric system and its back-up diesel generators as would maintain the diesel system alone. Consequently, the labor component of 0 & M costs is not includ- ed in the analysis. -Rarts and supplies required to maintain diesel generators cost approximately 2¢/kWh. Parts and supplies requirements for the hydroelec- tric component are minimal and assumed to be zero in this analysis. 5. Capacity Costs (Diesel Replacement Costs). The Power Authority assumes that small diesel generators have a useful economic life of 10 years. This analysis assumes that in the absence of the hydroelectric project, half of the diesels generators are replaced every five years, thus, the entire set 168/427 -- ll -- is replaced within ten years. If the hydroelectric project were built, the diesels would be used much less. The analysis assumes that the hydroelectric project doubles the useful life of the diesels, thus half of the required capacity is replaced every ten years and the entire set is replaces within 20 years. The replacement cost is assumed to be $700 per kW. C. Benefit/Cost Analysis. 1. Net Present Value Analysis (Expected Benefit/Cost Ratio). The benefit of the hydroelectric project is the money saved by not running AVEC's diesel generators to produce electricity. The value of the project can be determined by comparing the costs of maintaining and operating a diesel system with the cost of building and operating a hydroelectric system. The hydro- electric alternative would require a large up-front cost but relatively low operating costs, whereas the diesel system would require a smaller up-front cost but would. require high annual costs for the life of the system. In order to compare these contrasting cash flow patterns, a present worth analysis was conducted. The analysis projects the real annual costs for the 30-year life of the project and then compares the two systems on a present worth basis using a discount rate of 3.5 percent. The net present values of 30 years of operating a utility at Togiak under the three load forecasts using a diesel system or the proposed hydroelectric project are shown in Table 2. The table shows the present value of the different components (hydroelectric construction, diesel replacement, diesel fuel, and diesel 0 & M) of each project and the total present value for the 0%, 2%, and 4% load growth scenarios. The detailed calculations summarized in Table 2 are contained in Appendix C. The table clearly shows that the proposed hydroelectric project is not econom- ically viable. Its costs are much greater than the cost of continuing with the present diesel system. In no case does the present value of 30 years of fuel use come close to paying back the construction cost of the hydroelectric project. 168/427 -- 12 -- An intertie from Togiak to the Village of Twin Hills or to the cannery would have little or no effect on the conclusions of this analysis. A discussion of the costs and benefits of constructing the interties is given in Appendices E and F. Table 2. Benefit/Cost Summary 0% Growth 2% Growth 4% Growth Scenario Scenario Scenario Hydro Alternative Hydro Construction Cost $6,550,725 $6,550,725 $6 ,550 ,725 Diesel Replacement Cost 154,299 154,299 245 ,212 Operation and Maintenance 38 742 56,489 106 ,504 Fuel Cost 232 ,062 357 ,288 710.373 ~ Total: $6,975 558 $7,118,801 . $7,612,814 Diesel Alternative Hydro Construction Cost $ 0 $ 0 $ 0 Diesel Replacement Cost 419 ,637 419 ,637 659,192 Operation and Maintenance 383 ,284 484 ,357 620 ,645 Fuel Cost 2,442 ,003 3,135,740 4,078 ,850 otal: $3,244,924 $4,039,734 $5,358, BENEFIT/COST RATIO: 0.47 0.57 0.70 2. Sensitivity Analysis. The conclusions of the economic feasibility section above are based upon certain assumptions and estimates relating to construction cost, load growth, and future oi] prices. Most of these esti- mates are preliminary in nature and it is important to test to see if changes in any of the assumptions would change the conclusions of the analysis. If so, further study to refine the assumptions would be necessary. If not, the hydroelectric proposal should be disapproved without additional study. A sensitivity analysis was conducted, based on the load forecast (0%, 2% and 4% load growth scenarios), the construction cost (three hydroelectric con- struction cost estimates including the base cost estimate, a 20% cost over- run, and a 20% cost under-run), two project life estimates (a 30-year and a 50-year project life), and three fuel escalation rates. Varying these 168/427 -- 13 -- assumptions required a total of 54 different scenarios. The results of the analysis are outlined in Table 3. The benefit/cost ratio varied under these assumptions from a low of 0.33 toa high of 1.19. Only one scenario out of the 54 has a benefit/cost ratio greater than 1.0. This scenario required assumptions of a 20% decrease in hydroelectric construction costs, a "high" load forecast, a 50-year project life, and a high fuel escalation rate. The probability of all of these assumptions occurring concurrently is extremely small. The most likely scenario, assuming a 30-year project life, a 2% load growth, standard con- struction costs, and a medium fuel escalation rate, has a benefit/cost ratio Of 05577. D. Conclusion The economic analysis makes clear that a hydroelectric project on the Kurtluk River is no the most economic energy alternative for Togiak. The sensitivity analysis shows that there is little likelihood that a change in assumptions (economic parameters, construction cost, etc.) would change the conclusion. Therefore, no further studies are necessary on the hydroelectric project on the proposed Kurtluk River. In addition, the 1982 Reconnaissance Report demonstrated that the Quigmy River sites were less favorable than those on the Kurtluk River. Unless load requirements and real oil prices significantly increase above those assumed, the Power Authority recommends that no further funds be expended studying either the Kurtluk or Quigmy River hydroelectric projects. 168/427 fe Table 3. 30 Year Project Life 0% Load Growth Scenarios It I 50 Year Project Sensitivity Analysis (Hydroelectric Project) Life 0% Load Growth Scenarios | | | | Present Value Estimates i Present Value Estimates ! -------- Fuel Escalation Rates -—-—-—-|| -------- Fuel Escalation Rates ------- | Low Med High i Low Med High | Diesel: $2,685,410 $3,244,924 $3,560,895 |! Diesel: $3,313,684 $3,689,403 $4,556, ds | Hydro -- Low Const Cost: $5,636,118 $5,665,413 $5,681,957 |! Hydro -- Low Const Cost: $5,688,092 $5,729,416 $5, 753, iS | Hydro -- Std Const Cost: $6,946,263 $6,975,558 $6,992,102 11 Hydro -- Std Const Cost: $6,998,237 $7,039,560 $7,063, 33% | Hydro -- High Const Cost: $8,256,408 $8,285,703 $8,302,247 |! Hydro -- High Const Cost: $8,306,382 $8,349,705 $8, 373,475 | Wl | 30 Year Project Life i 50 Year Project Life | 0% Load Growth Scenarios i 0% Load Growth Scenarios 1 Benefit/Cost Ratios I Benefit/Cost Ratios Po acer Fuel Escalation Rates -------1| -------- Fuel Escalation Rates ------- | Low Med High |! Low Med | Hydro -- Low Const Cost: 0.48 0.57 0.63 11 Hydro -- Low Const Cost: 0.58 9.64 . | Hydro -- Std Const Cost: 0,39 0.47 0.51 1! Hydro -- Std Const Cost: 0.47 0.52 0.65 | | Hydro -- High Const Cost: 0.33 0.39 0.43 11 Hydro -- High Const Cost: 0.40 0.44 6.54 | es ~------------- == ----- | | ---—--— anna anna nanan anne nnnnnnnnne- | W Year Project Life i 50 Year Project Life | 2% Load Growth Scenarios I 2% Load Growth Scenarios | Present Value Estimates Wl Present Value Estimates | -------- Fuel Escalation Rates. ------- na UD Ee ——- Fuel Escalation Rates ------- | Low Med High " Low Med High | Diesel: $3,273,297 $4,039,734 $4,474,923 11 Diesel: $4,160,293 $5,268,091 $5, 908, 344 | Hydro -- Low Const Cost: $5,740,862 $5,808,656 $5,847,549 11 Hydro -- Low Const Cost: $5,844,047 $5,945,966 $6, 005, 353 { Hydro -- Std Const Cost: $7,051,007 $7,118,801 $7,157,694 I! Hydro -- Std Const Cost: $7,154,192 $7,256,110 $7,315, Su3 | Hydro -- High Const Cost: $8,361,152 $8,426,946 $6,467,839 11 Hydro -- High Const Cost: $8,464,337 $8,566,255 $6,625, 648 | | 30 Year Project Life i 50 Year Project Life | 2% Load Growth Scenarios it 2% Load Growth Scenarios \ Benefit/Cost Ratios WW Benefit/Cost Ratios | -------- Fuel Escalation Rates -------|| ---—--- Fuel Escalation Rates ------- | Low Med High || Low Med High | Hydro —- Low Const Cost: 0.57 0.70 0.77 || Hydro -- Low Const Cost: 0.71 0.89 0.98 | Hydro — Std Const Cost: 0.46 0.57 0.63 11 Hydro -- Std Const Cost: 0.58 0.73 OGL | Hydro -- High Const Cost: 0.39 0.48 0.53 11 Hydro -- High Const Cost: 0.49 0.61 0.68 nnn nnn nn renee nnn enn | | eee e mene n nnn nnn nnn nnn nn nnn nnn nnn nme I 30 Year Project Life WW 50 Year Project Life 1 4% Load Growth Scenarios I 4% Load Growth Scenarios ! Present Value Estimates It Present Value Estimates | Fuel Escalation Rates ----—--I! Fuel Escalation Rates ------- | Low .._- Med High i Low Med High | Diesel: $4,305, 324° $5,358,687 $5,960,027 11 Diesel: $5,666,008 $7,223,629 $8, 127, 350 | Hydro -- Low Const Cost: $6,122,414 $6,302,669 $6,407,485 || Hydro -- Low Const Cost: $6,391,819 $6,677,920 $6,846, 321 | Hydro -- Std Const Cost: $7,432,559 $7,612,814 $7,717,630 11 Hydro -- Std Const Cost: $7,701,963 $7,988,065 $8, 156, 466 | Hydro -- High Const Cost: $8,742,704 $8,922,959 $9,027,775 I! Hydro -- High Const Cost: $9,012,108 $9,298,210 $9,466,611 | I | 30 Year Project Life i 50 Year Project Life \ 4% Load Growth Scenarios I 4% Load Growth Scenarios | Benefit/Cost Ratios i Benefit/Cost Ratios | Fuel Escalation Rates —-----1| -------- Fuel Escalation Rates ~------- | Low Med High II Low Med High | Hydro — Low Const Cost: 0.70 0.85 0.93 11 Hydro -- Low Const Cost: 0.89 1.08 1.19 | Hydro -- Std Const Cost: 0.58 0.70 0.77 11 Hydro — Std Const Cost: 0.74 0.90 1.00 | Hydro -- High Const Cost: 0.49 0.60 0.66 |! Hydro —- High Const Cost: 0.63 0.78 0.66 |---—--------- | | ae 15 <0 Chapter IV. Analysis of the Waste Heat Proposal The information in this chapter is taken from the April 1985, Rural Energy Construction Program 1984-1985, 42 Village Waste Heat Study. A. Description of the Waste Heat Proposal 1. Technical Description. AVEC's small, metal powerhouse is located in the middle of town close to the school. (See Figure 2.) The largest heat energy consumers in the village include the nearby school complex, the fire station, the pump house, the City Garage, and the City Office. The school complex uses over three times more heating fuel than the remaining buildings combined. There is insufficient room in AVEC's powerhouse to install additional equip- ment. Consequently, the proposed waste heat system would consist of an eight-by-twelve foot prefabricated metal building located adjacent to the powerhouse to contain the waste heat equipment. A common cooling manifold would be installed on the AVEC generators and would run from the generator building to the new heat recovery module. Two remote radiators would be installed on wood pilings next to the new module. From October to June, the school complex could use more heat than the proposed system could produce. The least expensive system that would use the maximum amount of waste heat involves connecting only the school. 2. Construction Cost Estimate. The construction cost estimate, taken from the 42 village waste heat study is $309,869 including equipment costs and installation costs. Design, construction management and overhead cost are estimated to be $61,974 for a total construction cost of $371,843. B. Benefit/Cost Analysis The costs of the proposed waste heat facility will include the construction cost, and the annual operation and maintenance costs. The primary benefit 168/427 -- 16 -- Figure 2. Project Layout - Proposed Waste Heat (taken from the 42 Village Waste He at Study) TOGIAK BAY TO \AK RAJ BHARGAVA ASSOCIATES ENGINEERING IN ALASKA eae 301 EAST FIREWEED LANE (907) 276-3768 ANCHORAGE, AK 99503 3100 S$. CUSHMAN ST., #204, FAIRBANKS (907) 452-3768 would be the annual saving of 25,420 gallons of heating fuel for the school ($28,470 at $1.12/gallon). The value of the savings would increase if the load were to increase and if more heat were available. In addition, benefits would increase if the real cost of heating fuel were to increase. A secondary benefit would be that the net powerhouse station load would decrease saving $18,466 in the first year of the system's operation. A summary of the costs and benefits of the project are listed in Table 4. (The same three load forecasts used for the hydro analysis in the previous chapter are used for this waste heat analysis.) The detailed financial calculations for the analysis are listed in Appendix D. Table 4. Economic Analysis (Waste Heat Recovery System) TOGIAK WASTE HEAT 0% Load 2% Load 4% Load Growth Growth Growth COSTS Construction Cost $309 ,869 $309 ,869 $309 ,869 Design $21,691 $21,691 $21,691 Construction Management $27 ,888 $27 ,888 $27 ,888 APA Administrative $12,395 $12,395 $12,395 Total Construction Costs $371,843 $371 ,843 $371 ,843 Annual 0 & M Cost $6,197 $6,197 $6,197 BENEFITS (1985 Data) Heating Fuel Saved (gal) 25 420 25 ,420 25 ,420 Fuel Price ($/gal) $1.12 $1.12 $1.12 Value of Saved Fuel ($) $28 ,470 $28 ,470 $28 ,470 Station Load Savings ($) $18 ,466 $18 466 $18 ,466 Load Growth Forecast 0% 2% 4% Economic Life (years) 20 20 20 BENEFIT/COST COMPARISON. Savings - Year 1 (1985) ($2 ,937) ($2,937) ($2,937) - Year 5 (1989) $3 ,967 $4 632 $5,297 - Year 10 (1994) $23 ,042 $23 ,890 $24,917 - Year 20 (2004) $87 ,151 $89 ,013 $90 875 Net Present Value (@ 10%) $147,951 $154 ,737 $161,524 Internal Rate of Return 16% 17% 17% Equity Needed (total) $6 ,080 $5,167 $4,255 Equity Needed (% of Costs) 2% 1% 1% Table 4 shows both the economic data and a summary of the conclusions for the Proposed waste heat recovery system. The costs assume that the construction 168/427 -- 18 -- cost is amortized at 10% over a 20 year project life and that the $6,197 operation and maintenance cost increases at the same rate as inflation. The benefits include fuel savings, which increases as a function of load growth and fuel price escalation, and the station load savings which is assumed to increase at only half the rate of projected inflation. The result is as internal rate of return for that the project between 16% and 17%. Although, the first year benefits of the project would be negative, savings would increase annually, yielding positive benefits by year 4, even with 0% load growth. The "Equity Needed" entry in Table 4 shows the amount of downpayment (cash in the first year) that would be needed to offset the first year negative cash flow for the project. The last entry in the table shows that the State would only need to provide a 2% equity contribution to the project for the project to show positive benefits for every year of its operation. The analysis assumes, however, that 100% of the benefits could be used to pay off the 10% loan for the project. Until a financing plan is completed, the exact proportion of equity and loan needed cannot be determin- ed. Table 5 presents the economic data as benefit/cost ratios using a 0% real inflation rate and a 3.5% discount rate. Using these economic parameters, the benefit/cost ratios can be compared directly to the hydroelectric project analysis. The Table shows benefit/cost ratios of between 1.69 and 1.74, depending on load growth assumptions. C. Conclusion The Proposed Waste Heat Recovery system for Togiak is a straightforward, economically viable project. It would utilize standard construction tech- niques and would produce benefits to the community that would far exceed its costs. Assuming a 10% loan for the entire project, including Power Authority design, construction management, and overhead, the project's benefits would increase from approximately zero in its first year of operation, to approxi- mately $90,000 per year by the end of the project life. If, however, the 168/427 -- 19 -- Table 5. Benefit/Cost Summary (Waste Heat Project) 0% Load 2% Load Growth Growth COSTS Construction Cost $309 ,869 $309 ,869 Design $21,691 $21,691 Construction Management $27 ,888 $27 ,888 APA Administrative $12 ,395 $12,395 Total Construction Costs $371 ,843 $371 ,843 Annual 0 & M Cost $6,197 $6,197 BENEFITS (1985 Data) Heating Fuel Saved (gal) 25 ,420 25 ,420 Fuel Price ($/gal) $1.12 $1.12 Value of Saved Fuel ($) $28 ,470 $28 ,470 Station Load Savings ($) $18,466 $18,466 Load Growth Forecast 0% 2% Economic Life (years) 20 20 BENEFIT/COST COMPARISON Savings - Year 1 (1985) ($2,937) ($2,937) - Year 5 (1989) ($3,138) ($2,580) - Year 10 (1994) $1,710 $2,325 - Year 20 (2004) $13 544 $14,295 Net Present Value (@ 3.5%) $26,758 $34,985 Benefit/Cost Ratio 1.69 1.72 4% Load Growth $309 ,869 $21,691 $27 ,888 $12,395 $371,843 $6,197 25 420 $1.12 $28 ,470 $18,466 4% 20 ($2,937) ($2,022) $2,941 $15,045 $43,212 1.74 State of Alaska funds part of the costs with a State appropriation, the benefits to Togiak would be even greater. Implementing the Recommendation. At the present time, the Power Authority lacks a source of funds to construct a waste heat project at Togiak. However, in its FY 87 capital- budget document, the Power Authority Board of Directors has requested $37,200 in legislative appropriations to be combined with $334,800 in revenue bonds to finance the project. In the event this funding is not approved, alternative sources of funding should be investigated. 168/427 -- 20 -- Appendix A. Construction Cost Estimate (taken from the Pre-Reconnaissance Study Table I) KURTLUK ALTERNATIVE PROJECT 340 kW CONSTRUCTION COSTS t Item Quantity Unit Unit Price Amount Mobilization Ls 450,000 Access Road ane ML 130,000 416,000 Dam (40' high) Cofferdam 1,000 cy 50 59,900 Rypass Line, 48" 300 oF 450 135,900 Foundation Treatment 430 SY nb; 32,250 Trim (rock) 325 cy 30 9,750 Conc. Membrane & Toe 150 cy 1,200 180,000 Reinforcing Steel 17,000 LB Lens 29,410 Rock Fill 4,300 cy 50 215,000 651,410 Intake Slide Gate, 36" 1 EA 32,000 32,000 Slide Gate, 48" i EA 40,000 40,000 Trashracks 2 EA 5,000 10,000 Concrete 10 cy 1,400 14,000 96,000 Penstock Steel, 36" 300 LF 175 52,500 Fiberglass, 36" 8,100 LF 120. 972,000 Excavation 5,800 cy 17 98,600 Backfill 5,300 cy 9 47,700 1,170,800 Powerhouse Prefab Building . LS 47,000 f Turbine & Generator LS 510,000 Auxillary System Ls 120,000 Concrete 110 cY 1,200 132,000 Reinforcing Steel 12,000 LB ers 20,760 829,760 Spillway Excavation Rock 4,300 cy 30 129,000 Concrete 30 cy 1,200 36,000 Reinforcing Steel 3,400 LB oa: 5,882 170,882 Transmission Line 257 MI 141,000 380,700 et SUBTOTAL (rounded) 4,165,000 Contingencies 765,000 Contract Cost 4,930,000 Engineering & Administration 880,000 TOTAL PROJECT COST 5,810,000 (1982 $) 6,060,000 (1983 $) 6,310,000 (1984 $) 6,540,000 (1985 $) 6,780,000 (1986 $) =e Year 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 0% Load Growth Annual Energy Use Community Needs (KWH/yr) 1, 005, 000 1, 005, 000 1,005, 000 1,005, 000 1,005, 000 1,005, 000 1,005, 000 1,005, 000 1, 005, 000 1,005, 000 1,005, 000 1,005, 000 1,005, 000 1,005, 000 1,005, 000 1,005, 000 1,005, 000 1, 005, 000 1,005, 000 1, 005, 000 1,005, 000 Hydro Supply (KWH/yr) 952, 379 952, 379 952, 379 952, 379 952, 379 962, 379 982, 379 952, 379 952, 379 982, 379 952, 379 952, 379 982, 379 952, 379 952, 379 952, 379 952, 379 982, 379 952, 379 952, 379 952, 379 Peak KW 249 249 249 249 249 249 249 249 249 249 249 249 249 249 249 249 249 249 249 249 249 Appendix B. Load Forecasts Table B-1 Load Forecast for Togiak 2% Load Growth Annual Energy Use Community Needs (KWH/yr) 1, 005, 000 1,025,100 1, 045, 602 1,066, 514 1,087, 844 1, 109, 601 1,131, 793 1, 154, 429 1,177,518 1, 201, 068 1,225, 089 1,249, 591 1,274, 583 1, 300, 075 1, 326, 076 1,352, 598 1, 379, 650 1,407, 243 1, 435, 387 1, 464, 095 1,493, 377 Hydro Supply (KWH/yr) 952, 379 970, 323 988, 603 1,006,676 1,025, 194 1,044,540 1, 063, a15 1, 082, 375 1, 102, 517 1,119,072 1,139,267 1,161,039 1, 178, 086 1, 198, 840 1,221, 365 1,238, 268 1,257,518 1,282,270 1,304, 350 1,318, 490 1,344, 089 -- 22 -- Peak KW 249 254 259 264 270 275 281 286 292 8 310 316 HRESERER 4% Load Growth Annual Energy Use Community Needs (KWH/yr) 1,005, 000 1,045, 200 1,087, 008 1,130, 488 1,175, 708 1,222, 736 1,271,646 1,322, 511 1,375,412 1,430, 428 1,487, 646 1,547, 151 1,609, 037 1,673, 399 1,740, 335 1,809, 948 1,882, 346 1,957, 640 2,035, 946 2, 117, 383 2,202,079 Hydro Supply (KWH/ yr) 952, 379 988, 223 1, 024, 406 1, 062,589 1, 100, 822 1,139, 261 1,175,371 1,218, 081 1,255, 763 1,299, 875 1,339, 041 1,377,929 1,427,791 1,460,548 1,514, 886 1,543,259 1,595, 646 1,637, 190 1,674, 155 1,718,808 1,739, 024 Peak KW 249 259 269 280 291 303 315 328 341 369 415 431 449 ERRES Appendix B (continued) Load Forecast taken from the 1982 studies (Volume E, Togiak Hydroelectric Project, Table VII-3.) Table B-2 PROJECTED ANNUAL DIRECT ELECTRICAL DEMAND TOGIAK Number Annual Energy Peak Type of of Demand Demand Year Consumer Customers (1000 kWh) (kW) 1980 Residential 95 260 69 Small Commercial 5 24 7 Public and School 12 316 90 Twin Hills 1/ 21 120 36 Total isa 720 202 1985 Residential 105 BoM 85 Small Commercial 6 42 12 Public and School 12 364 99 Twin Hills 23) 149 41 Total TI BoD Zor 1990 Residential 115 413 98 Small Commercial 7 59 15 Public and School 12 382 104 Twin Hills 25 L71 43 Total 159 1.025 260 2000 Total 175 1,286 326 2001 Total id 1,314 333 ——————— 1/ Twin Hills is not served in the existing system but it was included for purposes of the projections. The use and demand of Twin Hills were assumed to be 20 percent of the Togiak values. --23 -- Appendix C Detailed Benefit/Cost Calculations - Hydroelectric Project This appendix contains six spreadsheets that provide a year-by-year calcu- lation of electricity costs for three load forecasts for both diesel and hydroelectric power generation. For example, spreadsheet #1 projects the costs assuming that Togiak remains on diesel generation and that the load does not grow -- 0% load forecast. Spreadsheet #2 uses the same load but forecasts the costs assuming that the Kurtluk River Hydroelectric Project is construct- ed. Thus, the costs for the two spreadsheets can be compared to determine which system is the least expensive. Spreadsheets #3 and #4 use a 2% load growth scenario, and #5 and #6 compare diesel and hydroelectric under a 4% scenario. The spreadsheets are in real 1985 dollars (that is, they assume no inflation) and all discounting assumes a real 3.5% discount rate. 168/427 -- 24 -- -- 6z -- Diesel Costs - 0% Load Growth Fuel Efficiency 12 KWH/gallon 1985 Fuel Price $1.3589 /gallon Fuel Escal lation: 1985-1986 _* 1986-1989 om 1985-2004 x 2004+ om Diesel Cost $700 /KW Diesel O&M 90.02 /KWH Construction Cost $6, 780, 000 Net Present Value Hydro Construction 0 Diesel Replacement $419,637 Diesel O&M $383, 204 Diesel Fuel $2, 442, 003 Total: $3,244, 924 Seeseeeg SGSGR=S Table C-1. ©%Load Growth Annual Energy Use Communit y Hydro Diesel Peak Needs ‘Supply Use KW 1,005, 000 0 1,005,000 249 1,005, 000 0 1,005,000 249 1,005, 000 0 1,005,000 249 1,005,000 0 1,005,000 249 1,005, 000 © 1,005,000 249 1,005, 000 0 1,005,000 249 1,005, 000 0 1,005,000 249 1,005, 000 0 1,005,000 249 1,005, 000 © 1,005,000 249 1,005,000 0 1,005,000 249 1,005, 000 0 1,005,000 249 1,005, 000 © 1,005,000 249 1,005, 000 © 1,005,000 249 1,005,000 0 1,005,000 249 1, 005, 000 0 1,005,000 249 1,005, 000 0 1,005,000 249 1,005, 000 0 1,005,000 249 1,005, 000 0 1,005,000 249 1, 005, 000 0 1,005,000 249 1,005,000 0 1,005,000 249 1,005, 00 0 1,005,000 249 1,005, 000 0 1,005,000 249 1, 005, 000 0 1,005,000 249 1,005, 000 © 1,005,000 249 1,005, 000 0 1,005,000 249 1,005,000 0 1,005,000 249 1, 005, 000 © 1,005,000 249 1,005, 000 0 1,005,000 249 1, 005, 000 0 1,005,000 249 1,005, 000 0 1,005,000 249 1, 005, 000 0 1,005,000 249 1,005, 000 0 1,005,000 249 DIESEL COMPONENT HYDRO DIESEL FUEL FUEL FUEL CONSTRUCT'N REPLACEMENT USE (gal) 83,750 83, 750 83,750 83, 750 63,750 83, 750 83,750 83, 750 83,750 83, 750 83,750 83, 750 63,750 83, 750 83,750 83, 750 83,750 83, 750 83,750 83, 750 83,750 83, 750 83,750 83, 750 83,750 83, 750 83,750 83, 750 83,750 83, 750 83,750 83, 750 PRICE cost ($/gal) ($) 1.36 $113, 808 1.30 $109, 256 1.30 $109, 256 1.30 $108,256 1.30 $109, 256 1,33 $111,441 1.36 $113,669 1.38 $115,943 1.41 $118, 262 1.44 $120,627 1.47 $123,040 1.50 $125,500 1.53 $128,010 1.56 $130,571 1.59 $133, 182 1.62 $135, 846 1.65 $138,562 1.69 $141,334 1.72 $144, 160 1.76 $147,044 1.76 $147,064 1.76 $147,044 1.76 $147,044 1.76 $147,044 1.76 $147,044 1.76 $147,044 1.76 $147,044 1.76 $147,044 1.76 $147,044 1.76 $147,044 1.76 $147,044 1.76 $147,044 Cost SCHEDULE (s) (KW) $0 eoBecce8ccceScocc Sec co Sco co Be ccc] DIESEL REPLACEMENT OuM cost COsT ($) (s) $0 $20, 100 $0 $20, 100 $0 $20, 100 $0 $20, 100 $140,000 $20, 100 $0 $20, 100 $0 $20, 100 $0 $20, 100 $0 $20, 100 $140,000 $20, 100 $0 $20, 100 $0 $20, 100 $0 $20, 100 $0 $20, 100 $140,000 $20, 100 $0 $20, 100 $0 $20, 100 $0 $20, 100 $0 $20, 100 $140,000 $20, 100 $0 $20, 100 $0 $20, 100 $0 $20, 100 $0 $20,100 $140,000 $20, 100 $0 $20, 100 $0 $20, 100 $0 $20, 100 $0 $20, 100 $140,000 $20, 100 $0 $20, 100 ($182, 000) $20, 100 TOTAL SYSTEM COST ($) $133, 908 $129, 356 $129, 356 $129, 356 $269, 356 $131,541 $133, 769 $136, 043 $138, 362 $280, 727 $143, 140 $145, 600 $148, 110 $150,671 $293, 282 $155, 946 $158, 662 $161,434 $164,260 $307, 14 $167,144 $167,144 $167,144 $167, 14 $307, 14 $167,144 $167,144 $167,144 $167,144 $307, 14 $167,144 ($14, 856) NPV: $3,244, 924 Hydroelectric Costs - 0% Load Growth Table C-2. -- 92 -- Fuel Efficiency 12 KWH/gallon 1985 Fuel Price $1. 3589 /gallon Fuel Escal lation: 1985-1986 ~* O% Load Growth 1986-1989 ox DIESEL COMPONENT 1985-2004 % Annwal Energy Use HYDRO DIESEL DIESEL TOTAL 2004+ on FUEL FUEL FUEL CONSTRUCT’N REPLACEMENT REPLACEMENT 08M ‘SYSTEM Comunity Hydro = Diesel Peak USE PRICE = COST Cost «= SCHEDULE cost cost cosT Diesel Cost $700 /Ki YEAR Needs Supply Use Kw (gal) ($/gal) (s) (s) (KW) ($) (s) (s) Diesel O&M $0.02 /KWH Construction Cost $6, 780, 000 1985 1,005, 000 0 1,005,000 249 83,750 1.36 $113,808 $6,780,000 0 $0 $20, 100 $6,913, 908 1986 1,005,000 952,379 52,621 249 4,385 1.30 $5,720 0 $0 $1,052 $6, 773 Net Present Value 1987 1,005,000 952,379 52,621 249 4,385 1.0 $5,720 0 $0 $1,052 $6,773 Hydro Construction $6,550, 725 1988 1,005,000 952,379 Se,62i 249 4,385 1.30 $5,720 0 $0 $1,052 $6,773 Diesel Replacement $154,299 1989 1,005,000 952,379 2,621 249 4,385 1.0 $5,720 o $0 $1,052 $6,773 Diesel O&M $38,472 1990 1,005,000 952,379 S2,621 249 4,385 1.3 $5,635 0 $0 $1,052 $6, 887 Diesel Fuel $232, 062 1991 1,005,000 952,379 52,621 249 4,385 1% $5,952 0 $0 $1,052 $7,004 oe sna See 1992 1,005,000 952,379 S2,621 249 4,385 1.38 $6,071 0 $0 $1,052 $7,123 Total: $6,975, 558 1993 1,005,000 952,379 52,621 249 4,385 1.41 $6,192 0 $0 $1,052 $7,244 1994 1,005,000 952,379 52,621 249 4,385 1.44 $6,316 0 $140,000 $1,052 $147,368 1995 1,005,000 952,379 52,621 249 4,385 1.47 $6, 442 200 $0 $1,052 $7,495 1996 1,005,000 952,379 $2,621 249 4,385 1.50 $6,571 0 $0 $1,052 $7,623 1997 1,005,000 952,379 52,621 249 4,385 1.53 $6,702 0 $0 $1,052 $7,755 1998 1,005,000 952,379 S2,621 249 4,385 1.56 $6,837 0 $0 $1,052 $7,889 1999 1,005,000 952,379 52,621 9249 4,385 1.59 $6,973 0 $0 $1,052 $8,026 2000 1,005,000 952,379 52,621 249 4,385 1.62 $7,113 0 $0 $1,052 $8, 165 2001 1,005,000 952,379 52,621 249 4,385 1.65 $7,255 0 $0 $1,052 $8,307 2002 1,005,000 952,379 52,621 249 4,385 1.69 $7,400 0 $0 $1,052 $8, 452 2003 1,005,000 952,379 52,621 249 4,385 91.72 $7,548 0 $0 $1,052 $8,600 2004 1,005,000 952,379 52,621 249 4,385 1.76 $7,699 0 —- $140,000 $1,052 $148,751 2005 1,005,000 952,379 52,621 249 4,385 1.76 $7,699 200 $0 $1,052 $8, 751 2006 1,005,000 952,379 52,621 249 4,385 1.76 $7,699 0 $0 $1,052 $8,751 2007 1,005,000 952,379 52,621 249 4,385 1.76 $7,699 0 $0 $1,052 $8, 751 2008 1,005,000 952,379 52,621 249 4,365 1.76 $7,699 0 $0 $1,052 $8, 751 2009 1,005,000 952,379 52,621 249 4,385 1.76 $7,699 0 $0 $1,052 $8, 751 2010 1,005,000 952,379 52,621 249 4,385 «1.76 $7,699 0 $0 $1,052 $8,751 2011 1,005,000 952,379 52,621 249 4,385 1.76 $7,699 0 $0 $1,052 $8,751 2012 1,005,000 952,379 52,621 249 4,385 1.76 $7,699 0 $0 $1,052 $8,751 2013 1,005,000 952,379 ° 52,621 249 4,385 «1.76 $7,699 0 $0 $1,052 $8, 751 2014 1,005,000 952,379 52,621 249 4,385 1.76 $7,699 0 $140,000 $1,052 $148, 751 2015 1,005,000 952,379 52,621 249 4,385 1.76 $7,699 200 $0 $1,052 $8, 751 2016 1,005,000 952,379 52,621 249 4,385 «1.76 $7,699 0 ($196,000) $1,052 ($187,249) NPV: $6,975, 558 Diesel Costs - 2% Load Growth Fuel Efficiency 12 KWH/gallon 1985 Fuel Price $1.3589 /gallon Fuel Escal lation: 1985-1986 4% 1986-1989 On 1985-2004 ray 2004+ oo Diesel Cost $700 /KW Diesel O&M $0.02 /KWH Hydro Construction $6, 780, 000 Net Present Value Hydro Construction $0 Diesel] Replacement $419, 637 Diesel 0&4 $484, 357 Diesel Fuel $3, 135, 740 Total: $4,039, 734 -- (2 -- 1985 1986 1987 1991 2010 20 2012 2013 2014 2015 2016 Table C-3. 2% Load Growth Annual Energy Use Community Needs 1,005, 000 1,025,100 1,045, 602 1,066,514 1,087, 844 1,109,601 1,131, 793 1,154, 429 1,177,518 1,201,068 1,225, 089 1,249,591 1,274,583 1,300,075 1, 326, 076 1,352,598 1,379,650 1,407,243 1,435, 387 1,464, 035, 1,493 377 1,493,377 1, 493, 37 1,493,377 1,493,377 1,493,377 1,493, 377 1,493, 377 1,493, 37 1,493,377 1,493,377 1,493,377 Hydro Diesel Supply Use © 1,005, 000 © 1,025, 100 0 1,045, 602 0 1,066,514 0 1,087, 644 0 1,109,601 © 1,131,793 0 1,154,429 0 1,177,518 0 1,201, 068 © 1,225, 089 0 1,249,591 0 1,274, 583 0 1,300, 075 0 1,326, 076 0 1,352,598 0 1,379,650 0 1,407,243 © 1,435, 387 0 1,464,095 0 1,493, 377 0 1,493, 377 0 1,493, 377 0 1,493, 377 © 1,493, 377 0 1,493, 377 0 1,493, 37 0 1,493, 377 0 1,493, 377 © 1,493,377 0 1,493, 377 0 1,493, 377 SEsBRResseage Ff SYSSYSSSSSHASRHEK $3 DIESEL COMPONENT HYDRO DIESEL FUEL FUEL FUEL CONSTRUCT’N REPLACEMENT USE (gal) 83,750 85, 425 87,134 88, 876 90, 654 92, 467 4,316 9%, 202 98, 126 100, 089 102, 091 104,133 106, 215 108, 340 110,506 112,716 114,971 117,270 119,616 122, 008 124,448 124, 448 124,448 124,448 124,448 124,448 124,448 124, 448 124,448 124, 448 124,448 124, 448 PRICE cost ($/gal) ($) 1.36 $113, 808 1.30 $111,441 1.30 $113,669 1.30 $115,943 1.30 $118, 262 1.33 $123,040 1.36 $128, 010 1.38 $133, 182 1.41 $138, 562 1.44 $144, 160 1.47 $149, 984 1.50 $156,044 1.53 $162,348 1.56 $168,907 1.59 $175, 731 1.62 $162, 830 1.65 $190,217 1.69 $197,901 1.72 $205,897 1.76 $214,215 1.76 $218, 499 1.76 $218,499 1.76 $218, 499 1.76 $218,499 1.76 $218, 499 1.76 $218,499 1.76 $218, 499 1.76 $218,499 1.76 $218,499 1.76 $218,499 1.76 $218, 499 1.76 $218,499 cost ‘SCHEDULE ($s) (KW) #0 o8cccc8cccc 8 coc Soc c co Bocce 8 cocce DIESEL REPLACEMENT om cost COST ($) (s) $0 $20, 100 $0 $20,502 $0 $20, 912 $0 $21,330 $140,000 $21, 757 $0 $22, 192 $0 $22, 636 $0 $23,089 $0 $23, 550 $140,000 $24, 021 $0 $24, 502 $0 $24,992 $0 $25, 492 $0 $26,001 $140,000 $26, 522 $0 $27,052 $0 $27,593 $0 $28, 145 $0 $28, 708 $140,000 $29, 282 $0 $29, 068 $0 $29, 868 $0 $29, 068 $0 $29, 868 $140,000 $29, 868 $0 $29, 868 $0 $29, 068 $0 $29, 868 $0 $29, 068 $140,000 $29, 868 $0 $29, 868 ($182, 000) $29, 868 TOTAL ‘SYSTEM COST ($) $133, 908 $131,943 $134,582 $137,273 $280,019 $145,232 $150, 646 $156,270 $162, 113 $308, 182 $174, 486 $181, 036, $187,840 $194, 908 $342, 252 $209, 882 $217, B10 $226, 046 $234,604 $383, 497 $248, 367 $248, 367 $248, 367 $248, 367 $388, 367 $248, 367 $248, 367 $248, 367 $248, 367 $388, 367 $248, 367 $66, 367 NPV: $4,039, 734 Hydroelectric Costs - 2% Load Growth Fuel Efficiency 12 KWH/gal lon 1985 Fuel Price $1. 3589 /gallon Fuel Escal lation: 1985-1986 a 1986-1989 om 1985-2004 x 2004+ on Diesel Cost $700 /Ki Diesel O&M $0.02 /KWH Construction Cost $6, 780, 000 Net Present Value Hydro Construction $6,550, 725 Diesel Replacement $154,299 Diesel O&M $56, 489 Diesel Fuel $357, 288 Total: $7,118,801 -- 92 -- 1985 1986 1987 RSPERSSSESRR SAREE Table C-4. 2% Load Growth Annual Energy Use Community Needs 1,005, 000 1,025, 100 1,045, 602 1,066,514 1,087, 844 1,103, 601 1,131, 793 1,154, 429 1,177, 518 1,201,068 1,225, 089 1,249, 591 1,274, 583 1,300,075 1, 26, 076 1,382, 598 1,379, 650 1,407, 243 1,435, 387 1,464, 095 1, 493, 37 1,493,377 1,493, 37 1,483,377 1,493, 377 1,483,377 1,493, 37 1,483,377 1, 493, 377 1,483,377 1,493, 377 1,493,377 Hydro Supply 0 970, 323 988, 603 1,006, 676 1,025, 194 1,044,540 1,063, 815 1,082, 375 1,102, 517 1,119,072 1,139,267 1,161,039 1,178, 086 1,198,840 1,221, 365 1,238, 268 1,257,518 1,282,270 1,304, 350 1,318,490 1,344, 089 1,344, 089 1,344, 089 1,344, 089 1,344, 089 1,344,089 1,344, 089 1,344,089 1,344, 089 1,344,089 1,344,089 1,344,089 Diesel Use 1,005, 000 4,777 56,999 53, 638 62,650 65, 061 67,978 72,054 75, 001 81,996 85, 822 68, 552 9%, 497 101,235 104, 712 114,329 122, 131 124,973 131,038 145, 605 149, 289 149, 289 149, 289 149, 289 149, 289 149,289 149, 289 149, 289 149, 289 149, 289 149, 289 149, 289 SESERRESsegRe sf we as SISIISISSSSSHMES HSK DIESEL COMPONENT HYDRO DIESEL FUEL FUEL FUEL CONSTRUCT'N REPLACEMENT USE (gal) 83,750 4,565 4,750 4,986 5,221 5,422 5,665 6,005 6,250 6,833 7,152 7,379 8,041 8,436 8,726 9,527 10,178 10,414 10,920 12,134 12,441 12,441 12,441 12,441 12,441 12,441 12,441 12,441 12,441 12,441 12,441 12,441 PRICE (/gal) 1.36 $113,808 $6, 780, 000 1.30 B8zteeREeese HRAAHAHAAHRHAASARS cost ($) $5,955 $6, 196 $6,505 $6,811 $7,214 $7,689 $8,313 $8, 826 $9,042 $10,507 $11,058 $12,291 $13,152 $13, 676 $15,454 $16, 639 $17,575 $18, 796 $21,304 $21, 843 $21,843 $21,043 $21,843 $21, 43 $21,843 $21, 043 $21,843 $21, 843 $21,843 $21, 043 $21,043 cost ‘SCHEDULE ($) (KW) oS ccccccccoScccccc ccc ccoc coco] DIESEL REPLACEMENT OuM cost COST (s) (s) $1,096 $1,140 $1,197 $1,253 $1,301 $1,360 $1,441 $1,500 $1,640 $1,716 $1,771 $1,930 $2, 025 $2,094 $2,287 $2, 443 $2,499 $2, 621 $2, 912 $2, 986 $2, 986 $2, 986 $2, 986 $2, 986 £2, 986 $2, 986 $2, 986 $2, 986 $2, 986 $2, 986 ($196,000) $2, 986 $140, $140, $140, s8sessssessisssessssssessssesss TOTAL SYSTEM cosT ($) $20, 100 $6,913, 908 $7,051 $7,336 $7, 702 $8, 064 $8,516 $9,048 $9,754 $10, 326 $151, 482 $12,223 $12,829 $14, 221 $15,177 $15,971 $17,740 $19, 281 $20,074 $21,417 $164,216 $24, 628 $24, 828 $24, 828 $24,828 $24, 628 $24, 828 $24, 628 $24, 828 $24, 628 $164,828 $24, 828 ($171,172) NPV: $7,118,801 eee Diesel Costs - 4% Load Growth Fuel Efficiency 12 KWH/gallon 1985 Fuel Price $1. 3589 /gallon Fuel Escal lation: 1985-1986 4% 1986-1989 on 1985-2004 a 2004+ on Diesel Cost $700 /Kbl Diesel O&M $0.02 /KWH Construction Cost ‘$6, 780, 000 Net Present Value Hydro Construction 0 Diesel Replacement $659,192 Diesel O&M $620, 645 Diesel Fuel $4,078, 650 Total: $5,358, 687 -- 62 -- SsSsssss SASaREsS Table C-5. 4% Load Growth Annual Energy Use Comunity Hydro Diesel Needs ‘Supply Use 1,005, 000 © 1,005, 000 1,045, 200 0 1,045,200 1,087, 008 © 1,087,008 1,130,488 © 1,130,488 4,175, 708 © 1,175, 708 1,222, 736 0 1,222,736 1,271, 646 © 1,271,646 1,322,511 0 1,322,511 1,375, 12 0 1,375,412 1,430, 428 © 1,430, 428 1, 487, 646 0 1,487, 646 1,547, 151 0 1,547,151 1,609, 037 0 1,609, 037 1,673, 399 © 1,673,399 1,740, BS © 1,740, 335 1,809, 948 0 1,809, 948 1,082, 46 © 1,882, 346 1,957,640 0 1,957,640 2, 085, H6 0 2,085, 46 2,117, 383 © 2,117,383 2,202, 079 0 2,202,079 2,202,079 0 2,202,079 2,202, 079 0 2,202,079 2,202,079 0 2,202,079 2,202, 079 0 2,202,079 2,202,079 © 2,202,079 2,202, 079 0 2,202,079 2,202,079 0 2,202,079 2,202, 079 0 2,202,079 2,202,079 0 2,202,079 2,202, 079 0 2,202,079 2,202,079 0 2,202,079 Peak KW 249 =] 269 280 231 303 oS 328 aw 3s 39 467 RRRFELERRRRERKS DIESEL COMPONENT HYDRO DIESEL FUEL FUEL FUEL CONSTRUCT'N REPLACEMENT USE (gal) 63,750 87, 100 90,584 94,207 97,975 101,895 105,970 110,209 114,618 119, 202 123,970 128, 929 134, 086 139, 450 145, 028 150,829 156, 862 163,137 169, 662 176,449 183,507 183,507 183,507 183, 507 183,507 183,507 183,507 183,507 183,507 183,507 183,507 183,507 PRICE cosT ($/gal) (s) 1.36 $113, 808 1.30 $113,626 1.30 $118, 171 1.30 $122,898 1.30 $127,814 1.33 $135,585 1.36 $143, 628 1.38 $152,573 1.41 $161,649 1.44 $171,690 1.47 $182, 129 1.50 $193,202 1.53 $204,949 1.56 $217,409 1.59 $230, 628 1.62 $244,650 1.65 $259,525 1.69 $275, 304 1.72 $292, 043 1.76 $309, 799 1.76 $322, 191 1.76 $322,191 1.76 $322, 191 1.76 $322,191 1.76 $322, 191 1.76 $322,191 1.76 $322, 191 1.76 $322, 191 1.76 $322, 191 1.76 $322,191 1.76 $322, 191 1.76 $322,191 cost ‘SCHEDULE ($s) (Ki) $0 ePocccd ccc cPococ Beco cB cc oo 8 ccoc] DIESEL REPLACEMEN Om Cost cOsT ($) (s) $0 $20, 100 $0 $20,904 $0 $21, 740 $0 $22,610 $210,000 $23, 514 $0 $24,455 $0 $25, 433 $0 $26,450 $0 $27, 508 $210,000 $28, 609 $0 $29, 753 $0 $30,943 $0 $32, 181 $0 $33,468 $210,000 $34, 607 $0 $36,199 $0 $37, 647 $0 $39, 153 $0 $40, 719 $245,000 $42, 348 $0 $44, 042 $0 $44, 042 $0 $44, O42 $0 $44, 042 $245,000 $44, 042 $0 $44, 042 $0 $44, 042 $0 $44, 042 $0 $44, O42 $245,000 $44, 042 $0 $44, O42 ($318, 500) $44, 042 TOTAL SYSTEM COST ($) $133, 908 $134,530 $139,911 $145,507 $361,328 $160, 039 $169, 261 $179, 023 $189, 358 $410,298 $211,881 $224, 145 $237, 129 $250, 877 $475, 435, $280, 849 $297, 172 $314, 457 $332, 761 $597, 146 $366, 232 $366,232 $366, 232 $366, 232 $611,232 $366, 232 $366,232 $366, 232 $366, 232 $611, 232 $366, 232 $47, 732 NPV: $5, 356, 687 Hydroelectric Costs - 4% Load Growth Fuel Efficiency 1985 Fuel Price $1. 3589 /gallon Fuel Escal lation: 1985-1986 a 1986-1989 om 1985-2004 x 2004+ on Diesel Cost $700 /KW Diesel O&M $0.02 /KWH Construction Cost $6, 780, 000 Net Present Value Hydro Construction $6,550, 725 Diesel Replacement $245,212 Diesel O&M $106, 504 Diesel Fuel $710, 373 Total: $7,612, 614 -- 0€ -- 12 KWH/gal lon Table C-6. 4% Load Growth Annual Energy Use Community Needs 1,005, 000 1,045, 200 1,087, 008 1,130, 488 1, 175, 708 1,222, 736 1,271, 646 1,322,511 1,375,412 1,430, 428 1, 487, 646 1,547, 151 1,609, 037 1,673,399 1, 740, 335 1,803, 948 1, 882, 346 1,957,640 2, 035, 46 2, 117, 383 2, 202, 079 2,202, 079 2,202, 079 2,202, 079 2, 202, 079 2,202, 079 2, 202, 079 2, 202, 079 2, 202, 079 2,202, 079 2, 202, 079 2,202, 079 Hydro Supply Diesel Use © 1,005, 000 968, 223 1,024, 406 1,062, 589 1,100, 822 1,139,261 1,175, 371 1,218, 081 1,255, 763 1,299,875 1,339, 041 1,377,929 1,427, 731 1,460,548 1,514, 886 1,543,259 1,595, 646 1,637, 190 1,674, 155 1,718, 808 1,739, 024 1,739,024 1,739, 024 1,739, 026 1,739, 024 1,739, 026 1,739, 024 1,739, 024 1,739, 024 1,739, 024 1,739, 024 1,739, 024 56,977 62,602 67,300 74, 885 63,475 %, 275 104,430 119, 649 130, 553 148, 604 169, 223 181,267 212,851 225, 448 266, 689 286, 700 320,450 361,791 398, 576 463, 064 463, 054 463, 054 463, 054 463, 054 463, 054 463, 054 463, 054 463, 064 463, 054 463, (54 463, 054 Peak Ki 24g 259 269 280 231 3 35 328 a RELZSLARRSSERRE DIESEL COMPONENT HYDRO DIESEL FUEL FUEL FUEL CONSTRUCT’N REPLACEMENT USE (gal) 83,750 4,748 5,217 5,658 6,240 6,956 8,023 8, 703 9,971 10,879 12,384 14,102 15,104 17,738 18,787 22,224 23,092 26, 704 30,149 3,215 38,588 38, 588 38, 588 38, 588 38,588 38, 588 38,588 38, 588 38, 588 38, 588 38, 588 38, 588 PRICE ($/gal) COsT ($) 1,36 $113,808 1.30 1.30 1.30 1.0 1.33 1.3% 1.38 1.41 1.44 1.47 1.50 1.3 Be OA Bt Ot Bt Ot Ot Bt at ot ot $6,194 $6, 806 $7, 362 $8, 141 $9,256, $10, 689 $12, 048 $14, 079 $15,670 $18, 193 $21, 132 $23, 086 $27,654 $29, 876 $36, 048 $39, 528 $45, 065, $51, 896 $58, 316 $67, 750 $67, 750 $67, 750 $67,750 $67, 750 $67, 750 $67, 750 $67,750 $67, 750 $67,750 $67, 750 $67,750 cost SCHEDULE (s) (KW) $6, 780, 000 0 0 0 0 0 0 0 0 0 0 300 0 0 0 0 0 0 0 0 0 so ° o 0 0 0 o 0 0 o 30 ° DIESEL REPLACEMENT 0am cost COST ($) ($) TOTAL ‘SYSTEM cost (s) $0 $20, 100 $6,913, 908 $1,140 $1,252 $1,358 $1,498 $1,670 $1,925 $2, 089 $2, 393 $2,611 $2,972 $3, 384 $3, 625 $4,257 $4,509 $5,334 $5, 734 $6,409 $7,236 $7,972 $9,261 $9,261 $9,261 $9,261 $9, 261 $9,261 $9, 261 $9,261 $9, 261 $9,261 $9, 261 ($343, 000) $9, 261 s S eSsesssesssisessssesesesSsssssses 5 $7,334 $8, 058 $8, 740 $9,639 $10, 326 $12,815 $14, 136 $16, 472 $228, 281 $21, 165 $24,516 $26, 711 $31,911 $34, 385, $41, 382 $45, 262 $51,474 $59, 132 $311,288 $77, 012 $77,012 $77, 012 $77,012 $77, 012 $77, 012 $77, 012 $77, 012 $77, 012 $322, 012 $77, 012 ($265, 988) NPV: $7,612, 614 Appendix D. Detailed Benefit/Cost Calculations - Waste Heat This appendix contains three spreadsheets that provide a year-by-year calcula- tion of the benefits from the construction of the proposed waste heat recovery system. Spreadsheet #1 shows the costs and benefits assuming that Togiak remains on diesel generation and that the load does not grow -- 0% load forecast. Spreadsheet #2 shows the same information assuming a 2% load growth, and #3 assumes a 4% load growth. The spreadsheets are in nominal dollars assuming a 5% projected inflation rate and an additional rate for fuel escalation shown in the spreadsheets of Appendix C. The discount rate used is a 10% nominal rate. 168/427 -- 31 ' 1 w DS 1 1 Table D-1. TOGIAK WASTE HEAT 0% Load Growth costs Construction Cost $309,869 Design $21,691 Construction Management $27,888 APA Administrative $12,395 Total Construction Costs $371,843 Annual O & M Cost $6,197 BENEFITS (1985 Data) Heating Fuel Saved (gal) 25,420 gal Fuel Price ($/gal) $1.12 Value of Saved Fuel ($) $28,470 Station Load Savings ($) $18,466 Load Growth Forecast 0% Economic Life 20 years BENEFIT/COST COMPARISON Savings - Year 1 (1985) ($2,937) - Year S (1989) $3,967 - Year 10 (1994) $23,042 - Year 20 (2004) $87,151 Net Present Value (@ 10%) $147,951 Internal Rate of Return 16% Simple Payback 7 Equity Needed (total) $6,080 Equity Needed (% of Costs) 2% Year 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 RRRRERERERE Costs CHAKRA RER Debt Svc $43,677 $43,677 $43,677 $43,677 $43,677 $43,677 $43,677 $43,677 $43,677 $43,677 $43,677 $43,677 $43,677 $43,677 $43,677 $43,677 $43,677 $43,677 $43,677 $43,677 Oa M Cost $6,197 $6,427 $6,703 $7,018 $7,390 $7,752 $8,155 $8,563 $8,991 $9,441 $9,913 $10,408 $10,929 $11,475 $12,049 $12,651 $13,284 $13,948 $14,646 $15,378 Total Cost $49,874 $50,103 $50,380 $50,695 $51,067 $51,429 $51,832 $52,240 $52,668 $53,117 $53,589 $54,085 $54,605 $55,152 $55,726 $56,328 $56,961 $57,625 $58,322 $59,054 Heating Savings $28,470 $28,343 $29,562 $30,951 $33,243 $35,570 $38,168 $40,877 $43,780 $46,888 $50,217 $53,783 $57,601 $61,691 $66,071 $70,762 $75.786 $81,167 $86,930 $93,102 Station Savings $18,466 $18,766 $19,573 $20,493 $21,791 $23,085 $24,528 $26,014 $27,593 $29,271 $31,054 $32,948 $34,962 $37,103 $39,378 $41,797 $44,368 $47,103 $50,011 $53,103 Total Savings $46,936 $47,109 $49,135 $51,444 $55,034 $58,654 $62,695 $66,891 $71,373 $76,159 $81,271 $86,731 $92,563 $98,793 $105,449 $112,559 $120,155 $128,270 $136,941 $146,205 NET BENEFITS ($2,-937) ($2,994) ($1,245) $750 $3,967 $7226 $10,864 $14,652 $18,705 $23,042 $27,682 $32,646 $37,958 $43,642 $49,723 $56,231 $63,194 $70,645 $78,618 $87,151 1 1 w a ' ' Table D-2. TOGIAK WASTE HEAT 2% Load Growth COSTS Construction Cost $309,869 Design $21,691 Construction Management $27,888 APA Administrative $12,395 Total Construction Costs $371,843 Annual O & M Cost $6,197 BENEFITS (1985 Data) Heating Fuel Saved (gal) 25,420 gal Fuel Price ($/gal) S112 Value of Saved Fuel ($) $28,470 Station Load Savings (S$) $18,466 Load Growth Forecast 2% Economic Life 20 years BENEFIT/COST COMPARISON Savings - Year 1 (1985) ($2,937) - Year S (1989) $4,632 - Year 10 (1994) $23,980 - Year 20 (2004) $89,013 Net Present Value (@ 10%) $154,737 Internal Rate of Return 17% Simple Payback 2 Equity Needed (total) $5,167 Equity Needed (% of Costs) 1% Year 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 RR RRRREEERH Costs THERA RERER Debt Sve $43,677 $43,677 $43,677 $43,677 $43,677 $43,677 $43,677 $43,677 $43,677 $43,677 $43,677 $43,677 $43,677 $43,677 $43,677 $43,677 $43,677 $43,677 $43,677 $43,677 ‘O&M Cost $6,197 $6,427 $6.703 $7,018 $7-390 $7,752 $8,155 $8,563 $8,991 $9,441 $9,913 $10,408 $10,929 $11,475 $12,049 $12,651 $13,284 $13,948 $14,646 $15,378 Total cost $49,874 $50,103 $50,380 $50,695 $51,067 $51,429 $51,832 $52,240 $52,668 $537317 $53,589 $54,085 $54,605 $55,152 $55,726 $56,328 $56,961 $57,625 $58,322 $59,054 Heating Savings $28,470 $28,910 $30,153 $31,570 $33,908 $36,281 $38,931 $41,695 $44,655 $47,826 $51,222 $54,858 $58,753 $62,925 $67,392 $72,177 $77,302 $82,790 $88,668 $94,964 Station Savings $18,466 $18,766 $19,573 $20,493 $21,791 $23,085 $24,528 $26,014 $27,593 $29,271 $31.054 $32,948 $34,962 $37,103 $39,378 $41,797 $44,368 $47,103 $50,011 $53,103 Total Savings $46,936 $47,676 $49,726 $52,063 $55,699 $59,366 $63,459 $67,709 $72,248 $77,097 $82,275 $87,807 $93,715 $100,027 $106,770 $113,974 $121,670 $129,893 $138,679 $148,067 NET BENEFITS ($2,937) ($2,427) ($654) $1,369 $4,632 $7.937 $11,627 $15,470 $19,581 $23,980 $28,686 $33,722 $39,110 $44,875 $51,045 $57,646 $64,710 $72,268 $80,357 $89,013 -- $f -- Table D-3. TOGIAK WASTE HEAT 4% Load Growth costs Construction Cost $309,869 Design $21,691 Construction Management $27,888 APA Administrative $12,395 Total Construction Costs $371,843 Annual O & M Cost $6,197 BENEFITS (1985 Data) Heating Fuel Saved (gal) 25,420 gal Fuel Price ($/gal) $1-12 Value of Saved Fuel ($) $28,470 Station Load Savings ($) $18,466 Load Growth Forecast 4% Economic Life 20 years BENEFIT/COST COMPARISON Savings - Year 1 (1985) ($2,937) - Year 5 (1989) $5,297 - Year 10 (1994) $24,917 - Year 20 (2004) $90,875 Net Present Value (@ 10%) $161,524 Internal Rate of Return 17% Simple Payback 7 Equity Needed (total) $4,255 Equity Needed (% of Costs) 1% Year 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 RRRRRRE EER RRKKRRRRER osts Debt Sve $43,677 $43,677 $43,677 $43,677 $43,677 $43,677 $43-677 $43,677 $43,677 $43,677 $43,677 $43,677 $43.-677 $43.677 $43,677 $43,677 $43,677 $43,677 $43,677 $43,677 O&M Cost $6,197 $6,427 $6.703 $7,018 $7,390 $7,752 $8,155 $8,563 $8,991 $9,441 $9,913 $10,408 $10,929 $11,475 $12,049 $12,651 $13,284 $13,948 $14,646 $15,378 Total Cost $49,874 $50,103 $50,380 $50,695 $51,067 $51,429 $51,832 $52,240 $52,668 $53,117 $53,589 $54,085 $54,605 $55,152 $55,726 $56,328 $56,961 $37,625 $58,322 $59,054 Heating Savings $28,470 $29,477 $30,744 $32,189 $34,573 $36,992 $39,694 $42,513 $45,531 $48,764 $52,226 $55,934 $59,905 $64,159 $68,714 $73,592 $78,818 $84,414 $90,407 $96,826 Station Savings $18,466 $18,766 $19,573 $20,493 $21,791 $23,085 $24,528 $26,014 $27,593 $29,271 $31,054 $32,948 $34,962 $37,103 $39,378 $41,797 $44,368 $47,103 $50,011 $53,103 Total Savings $46,936 $48,243 $50,317 $52,682 $56,364 $60,077 $64,222 $68,527 $73.-124 $78,035 $83,280 $88,882 $94,867 $101,261 $108,092 $115,389 $123,186 $131,517 $140,418 $149,929 NET BENEFITS ($2,937) ($1,860) ($62) $1,988 $5,297 $8,648 $12,390 $16,287 $20,456 $24,917 $29,690 $34,797 $40,262 $46,109 $52,366 $59,061 $66,225 $73,892 $82,096 $90,875 Appendix E Twin Hills Intertie with Hydroelectric Project Twin Hills lies approximately four miles east of Togiak on a slough of the Togiak River (see Figure 1). According to the 1982 Reconnaissance Study, the community had only 12 customers. Projected energy use in 1985 is only 150,000 kWh per year. The 1982 study also made a preliminary estimate of $30,000 (1982 dollars) for connecting the community to Togiak using URD cable laid in Togiak Bay. That amount is equivalent to $350,000 in January 1986 dollars. This estimate has been reviewed by the Power Authority and appears to be somewhat low; however, it is used in this report as a conservative estimate for the purpose of economic analysis. Twin Hills' current utility costs include fuel, diesel operation and mainte- nance, and diesel replacement. If Twin Hills becomes part of the Togiak system, its fuel and operation costs will be almost eliminated although it is assumed that the diesel generators would be maintained as a stand-by system and would operate about 5% of the time. With an intertie, Twin Hills con- sumers would have to absorb the cost of construction of the transmission line. Other costs such as distribution expenses and meter-reading are common to both alternatives and are therefore neglected for the purpose of the economic analysis. The economic analysis for the Twin Hills intertie is very similar to that performed for the Kurtluk River hydroelectric project. Three load forecasts were developed at 0%, 2%, and 4% annual load growth from the 1985 base load. For each growth scenario, calculations were made of the cost of providing power both with and without the intertie/hydroelectric system. The primary conclusion of the analysis is that although construction of the intertie would provide some economic benefit to the proposed hydroelectric project, it would not provide enough benefits to make the proposed hydroelectric system an economic project. Table E-1 shows the total benefits and benefit/cost ratios of the hydroelectric project with and without construction of the Twin Hills 168/427 -- 35 -- intertie. The "Without the Intertie" figures are taken from Table 2 in the main body of this report. The calculations summarized in Table E-1 is based on a conservative assumption that the hydroelectric project could produce all of Twin Hills' electricity needs. Twin Hills' electric demand is so small (17 kW average demand in 1985) that extra capacity of the hydroelectric project would adequately supply Twin Hills most of the time. However, during times when the hydroelectric project would be serving Togiak at maximum capacity, there would be no hydroelectric energy available for Twin Hills. Because the calculations somewhat overesti- mate the availability of hydro energy, they exaggerate the benefits of the hydroelectric intertie system. This problem is most severe in the 4% load growth case. Table E-1 Benefits of the Kurtluk River Hydroelectric Project With and without the Twin Hills Intertie 0% Growth 2% Growth 4% Growth Without the Intertie: Present Value - Hydro: $6,957 ,558 $7,118,801 $7 ,612,814 Present Value - Diesel: 3,244,924 4,039,734 5,358 ,687 Benefit/Cost Ratio: 0.47 0.57 0.70 With the Intertie: Present Value - Hydro: $7 379,546 $7 546,721 $8 070,987 Present Value - Diesel: 3,719,063 4,629,502 6,125,216 Benefit/Cost Ratio: 0.50 0.61 0.80 Evaluating the hydroelectric project with the inclusion of the Twin Hills intertie increases the benefits of the project only slightly. In the 0% growth case, the benefit/cost ratio changes only 0.03. In the 2% case, the change is 0.04. In the 4% case the change is 0.10; however, the benefits of that case are probably somewhat exaggerated as the estimated availability of hydroelectric energy to Twin Hills is somewhat exaggerated. In no case does inclusion of the Twin Hills intertie have a dramatic effect on the benefit/cost ratio of the entire project. The hydroelectric project remains an economic loss with or without the intertie. 168/427 -- 36 -- Appendix F Cannery Intertie with Hydroelectric Project A cannery owned by Togiak Fisheries Ltd. is located across the bay from the present townsite (Figure 1). The installed capacity of the cannery is much greater than that of Togiak, although the cannery operates during the summer months only. During that time, it could absorb all of the excess energy the Proposed hydroelectric project could produce. This appendix analyzes the costs and benefits of constructing an intertie to the cannery. The primary conclusion is that the hydroelectric project's "excess" energy during the summer months, when the cannery is in operation, would not produce enough benefits to justify the cost of constructing an intertie across the bay. The estimated benefits of constructing an intertie from Togiak to the cannery just balances the construction cost, thus the intertie with the cannery would have virtually no effect on the economic analysis of the hydroelectric project. For the purpose of this analysis, power system cost data contained in Appen- dix C have been modified to include both the costs of an intertie to the cannery and the benefits gained from selling hydroelectric energy to the cannery for the avoided diesel cost. Using streamflow records and load forecasts for Togiak, an estimate was made of the "excess" hydroelectric energy that would be available. It was assumed that the cannery would only purchase power for the three summer months, thus the "excess" energy was only calculated for June, July, and August. As Togiak's load increases, there would be less and less energy available to serve the cannery. In the 4% load forecast, by the year 2002, there would be less than 50,000 kWh available for the three summer months. This corresponds to an average availability of less than 25 kW. At this level, it was assumed that it was not economical to transmit power to the cannery and it was assumed that the cannery would stop purchasing power from the Togiak system. During the period that the cannery would purchase excess energy from the hydroelectric project, it is assumed that the purchase price would be 100% of 168/427 =- 37 -- the avoided diesel fuel cost. The calculations assume that the cannery purchases fuel at the same price as AVEC and that it achieves a 12 kWh/gallon fuel efficiency. The cannery income is included in the analyses as a negative cost. It offsets some of the other hydroelectric costs for Togiak and lowers the overall present value of the hydroelectric system. A summary of the results are outlined in Table F-1 below. Table F-1 Benefits of the Kurtluk River Hydroelectric Project With and Without the Cannery Intertie 0% Growth 2% Growth 4% Growth Without the Cannery/Intertie: Present Value - Hydro: $6,957 ,558 _ $7,118,801 $7 ,612 ,814 Present Value - Diesel: ~ 3,244,924 4,039,734 5,358 ,687 Benefit/Cost Ratio: 0.47 0.57 0.70 With the Cannery/Intertie: Present Value - Hydro: $6,613,519 $7,050,213 $7 ,786 ,546 Present Value - Diesel: 3,244,924 4,039,734 5,358 ,687 Benefit/Cost Ratio: 0.49 0.57 0.69 The table shows that constructing the intertie to the cannery has almost no effect on the value of the hydroelectric project. The cost of the intertie approximates the value of the "excess" energy produced by the hydroelectric system. The presence of the cannery therefore has no influence on the deci- sion whether or not to build the project. In the 0% load forecast, the cannery intertie has a marginally positive effect, but in the 4% growth forecast (in which the hydroelectric project has greater benefits) the cannery intertie decreases the value of the hydroelectric project. The detailed calculations are included below. Table F-2 shows the calcula- tions for the 0% load forecast, Table F-3 shows the 2% forecast, and F-4 shows the 4% forecast. All tables use the medium fuel escalation rates. 168/427 598 |= =o eras Fuel Efficiency 1985 Fuel Price Fuel Escallation: 1985-1986 1986-1989 1989-2004 2004+ Diesel Cost Diesel O&M Construction Cost (Hydro) Construction Cost (Cannery) Net Present Value Construct ion Cannery Income Diesel Replacement Diesel O&M Diesel Fuel Total: Table F-2 12 KWH/gallon $1. 3589 /gallon ~*% O% Load Growth on DIESEL COMPONENT x finnual Energy Use HYDRO DIESEL om Cannery Cannery FUEL FUEL FUEL CONSTRUCT'N REPLACEMENT Communi ty Hydro Peak ~—s Diesel Use = Income USE —— PRICE cost COsT ‘SCHEDULE $700 /KW YEAR Needs Supply KW Use (KWH) (s) (gal) ($/gal) (s) ($) (KW) $0.02 /KWH $6, 780, 000 1985 1,005, 000 0 249 1,005, 000 0 0 0 1.36 $0 $7,130, 000 0 $350, 000 1986 1,005,000 952,379 249 = 52,621 245,998 $26, 743. 4,385 1.30 $5,720 0 1987 1,005,000 952,379 249 52,621 245,998 $26, 743 4,385 1.80 $5,720 0 1988 1,005,000 952,379 269 52,621 265,998 $26, 743 4,385 1.30 $5,720 0 $6, 888, 869 1989 1,005,000 952,379 249 52,621 245,998 $26, 743 4,385 1.0 $5,720 0 ($570, 623) 1990 1,005,000 952,379 269 S2,621 245,998 $27,278 4,385 1.33 $5,835 0 $154,299 1991 1,005,000 952,379 249 52,621 245,998 $27,623 4,385, 1.% $5,952 0 $19, 051 1992 1,005,000 952,379 249 = 52,621 245,998 $28, 380 4,385 1,38 $6,071 0 $122, 103 1993 1,005,000 952,379 249 52,621 245,998 $28, 947 4,385 1.41 $6,192 0 1994 1,005,000 952,379 249 52,621 245,998 $29, S26 4,385 1.44 $6,316 0 $6,613,519 1995 1,005,000 952,379 249) 52,621 = 245,998 $30, 117 4,385 1.47 $6,442 200 19% 1,005,000 952,379 249 52,621 245,998 $30,719 4,385 1.50 $6,571 0 1997 1,005,000 952,379 249) 52,621 = 245,998 $31,334 4,385 1.53 $6, 702 0 1998 1,005,000 952,379 249 52,621 245,998 $31,960 4,385 1.56 $6,837 0 1999 1,005,000 952,379 249 52,621 «245,998 $32,599 4,385 1,59 $6,973 0 2000 1,005,000 952,379 249 = S2,621 245,998 = $33, 251 4,385 1.62 $7; 113 0 2001 1,005,000 952,379 249 52,621 245,998 $33,916 4,385 1.65 $7,255 0 2002 1,005,000 952,379 249 S2,621 245,998 $34,595 4,385 1.69 $7,400 0 2003 1,005,000 952,379 249 52,621 245,998 $35,287 4,385 1.72 $7,548 0 2004 1,005,000 952,379 249 «52,621 245,998 $35, 992 4,385 1.76 $7,699 0 2005 1,005,000 952,379 249 52,621 245,998 $35,992 4,365 1.76 $7,699 200 2006 1,005,000 952,379 269 52,621 245,998 $35,992 4,385 1.76 $7,699 a’) 2007 1,005,000 952,379 249 52,621 245,998 $35, 992 4,385 1.76 $7,699 0 2008 1,005,000 952,379 249 + S2,621 245,998 $35, 992 4,385 «1.76 $7,699 0 2009 1,005,000 952,379 249 = 52,621 = 245, 998 $35, 992 4,385 1.76 $7,699 0 2010 1,005,000 52,379 249 52,621 245,998 + $35,992 4,385 1.76 $7,699 0 2011 1,005,000 952,379 249 52,621 245,998 $35, 992 4, 385 1.76 $7,699 0 2012 1,005,000 952,379 249 S2,621 245,998 $35,992 4,385 1.76 $7,699 0 2013 1,005,000 952,379 249 52,621 245,998 $35,992 4,385 1.76 $7,699 0 2014 1,005,000 952,379 269 «52,621 245,998 $35, 992 4,385 «1.76 $7,699 0 2015 1,005,000 952,379 249 52,621 245,998 $35,992 4,385 1.76 $7,699 200 2016 1,005,000 952,379 249 52,621 245,998 $35,992 4,385 1.76 $7,699 0 DIESEL ($) $140, $140, ssessesssSsssssssssissessssss $140, 000 +0 TOTAL O&M SYSTEM cost cost (s) (s) #0 $7, 130, 000 $1,052 ($19,970) $1,052 ($19,970) $1,052 ($19,970) $1,052 ($19,970) $1,052 ($20, 390) $1,052 ($20,819) $1,052 ($21,257) $1,052 ($21,703) $1,052 $117,842 $1,052 ($22,622) $1,052 ($23,096) $1,052 ($23,579) $1,052 ($24,071) $1,052 ($24,574) $1,052 ($25,086) $1,052 ($25, 609) $1,052 ($26, 142) $1,052 ($26, 686) $1,052 $112,759 $1,052 ($27,261) $1,052 ($27,241) $1,052 (827,241) $1,052 ($27,241) $1,052 ($27,241) $1,052 ($27,241) $1,052 (827,241) $1,062 ($27,241) $1,052 (827,241) $1,052 $112,759 $1,052 (827,241) ($196,000) $1,052 ($223,241) WV: $6,613,519 Table F-3 Fuel Efficiency 12 KWH/gallon 1985 Fuel Price $1. 3589 /gallon Fuel Escal lation: 1985-1986 ~4% 2% Load Growth 1986-1989 On DIESEL COMPONENT 1989-2004 on Annual Energy Use HYDRO DIESEL DIESEL TOTAL 2004+ On —————— Cannery Cannery FUEL FUEL FUEL CONSTRUCT'N REPLACEMENT REPLACEMENT Otm SYSTEM Community Hydro Peak ~~ Diesel Use = Income USE = PRICE Cost cosT ‘SCHEDULE cost = COST COsT Diesel Cost $700 /KW YEAR Needs Supply Kid Use (KWH) ($) (gal) ($/gal) (s) ($) (KH) ($) (s) (s) Diesel O&M 90.02 /KWH Construction Cost (Hydro) $6, 780, 000 1985 1,005, 000 0 249 1,005,000 0 0 83, 750 1.36 $113,808 $7, 130,000 0 $0 $20, 100 $7,263, 908 Construction Cost (Cannery) $350,000 1986 1,025,100 970,323 254 54,777 41,205 = $26, 222 4,565 1.30 $5,955 0 $0 $1,09% ($19,171) 1987 1,045,602 988,603 259 56,999 236,316 $25,690 4,7 1.30 $6,196 0 $0 $1,140 ($18,354) Net Present Value 1988 1,066,514 1,006,676 264 59,838 231,330 $25,148 4, 986 1.30 $6,505 0 $0 $1,197 ($17,447) Construction $6, 888, 889 1989 1,087,644 1,025,194 270 62,650 226,244 $24,595 5,221 1.30 $6,811 0 $0 $1,253 ($16,532) Cannery Income ($406, 734) 1990 1,109,601 1,044,540 275 65,061 221,056 $24,512 5, 422 1.33 $7,214 0 $0 $1,301 = ($15,996) Diesel Replacesent $154, 299 1991 1,131,793 1,063,815 281 67,978 215,764 $24, 404 5,665 1.36 $7,689 0 $0 $1,360 ($15,356) Diesel O&M $56, 489 1992 1,154,429 1,082,375 286 72,054 210,366 $24,269 6, 005 1.38 $8,313 0 © $1,441 ($14,515) Diesel Fuel $357, 288 1993 1,177,518 1,102,517 292 75,001 204,865 $24, 107 6,250 1.41 $8,826 0 $0 $1,500 ($13, 782) — 1994 1,201,068 1,119,072 298 81,99 199,257 $23,916 6,833 1.44 $9,842 0 $140,000 $1,640 $127,565 i Total: $7,050,231 1995 1,225,089 1,139,267 304 85,822 193,529 $23,693 7,182 1.47 $10,507 200 $0 $1,716 ($11,470) ' 1996 1,249,591 1,161,039 310 88,552 187,709 $23,440 7,379 «1.50 $11,058 0 $0 $1,771 ($10,611) 8 1997 1,274,583 1,178,086 316 9,497 181,750 $23,150 BOs = 1.53 $12,291 0 $0 $1,930 ($8,929) ‘ 1998 1,300,075 1,198,840 322 101,235 175,749 $22,833 6,436 1.56 $13, 152 0 $0 $2,025 ($7,656) x 1999 1,326,076 1,221,365 329 104,712 169,551 $22,469 8, 726 1.59 $13,876 0 $0 $2,094 = ($6, 498) 2000 1,352,598 1,238,268 335 114,329 163,397 $22,086 9,527 1.62 $15,454 o # $2,287 = ($4, 346) 2001 1,379,650 1,257,518 342 122,131 156,92 $21,639 10,178 1.65 $16,839 0 $0 $2,443 = ($2,358) 2002 1,407,243 1,282,270 349 124,973 150,777 $21,204 10,414 1.69 $17,575 0 $0 $2,499 = ($1,129) 2003 1,435,387 1,304,350 356 131,038 144,112 $20,672 10,9201. 72 $18,796 0 $0 - $2,621 $745 2004 1,464,095 1,316,490 363 145,605 137,287 $20,087 12,134 1.76 $21,304 0 $140,000 $2,912 $144,129 2005 «(1,493,377 1,344,089 370 149,289 131,091 $19,180 12,441 1.76 $21,843 200 $0 $2,986 $5, 648 2006 «1,493,377 1,344,089 370 149,289 131,091 $19,180 12,441 1.76 $21,843 0 $0 $2,986 $5, 648 2007 1,493,377 1,344,089 370 149,289 131,091 $19, 180 12,441 1.76 $21,843 0 $0 $2,986 $5,648 2008 1,493,377 1,344,089 370 149,289 131,091 $19, 180 12,441 1.76 $21,643 0 $0 $2,986 $5,648 2009 1,493,377 1,344,089 370 149,289 131,091 $19, 180 12,441 1.76 $21,843 0 $0 $2,986 $5, 648 2010 1,493,377 1,344,089 370 149,289 131,091 $19, 180 12, 441 1.76 $21,843 0 90 $2,986 $5,648 2011 1,493,377 1,344,089 370 149,289 131,091 $19,180 12,441 1.76 $21,843 0 $0 $2,986 $5, 648 2012 1,493,377 1,344,089 370 149,289 131,091 $19, 180 12,441 1.76 $21,843 0 $0 $2,986 $5, 648 2013 1,493,377 1,344,089 370 149,289 131,091 $19,180 12,441 1.76 $21,843 0 $0 $2,986 $5, 648 2014 1,493,377 1,344,089 370 149,289 131,091 $19, 180 12,441 1.76 $21,843 0 $140,000 $2,986 $145,648 2015 1,493,377 1,344,089 370 149,289 131,091 $19,180 12,441 1.76 $21,843 200 #0 $2,986 $5,648 2016 1,493,377 1,344,089 370 149,289 131,091 $19, 180 12,441 1.76 $21,843 0 ($196, 000) $2,986 ($190, 352) WV: $7,050,231 Fuel Efficiency 1985 Fuel Price Fuel Escal lation: 1985-1986 1986-1989 1989-2004 2004+ Diesel Cost Diesel O&M Construction Cost (Hydro) Construction Cost (Cannery) Net Present Value Construction Cannery Income Diesel Replacement Diesel O14 Diesel Fuel Total: 12 KilH/gal lon $1. 3589 /gallon cad on a mn $700 /KH $0.02 /KWH $6, 780, 000 $350, 000 ‘$6, 888, 889 ($213, 323) $294, 102 $106, 504 $710,373 $7, 786, 546 1985 1986 1987 1988 1989 1990 1991 1992 1993 1995 1996 197 1998 1999 EBSRRFER 2010 e011 2012 2013 2014 2015 Table F-4 4% Load Growth finrwal Energy Use Community Hydro Peak ~—_—Diesel Needs Supply i] Use 1,005, 000 0 — 249 1,005,000 1,045,200 988,223 259 56,977 1,087,008 1,024,406 269 62,602 1,130,488 1,062,589 280 67,900 1,175,708 1,100,822 291 74,885 1,222,736 1,139,261 303 43,475 1,271,646 1,175,371 315 96,275 1,322,511 1,218,081 328 104,430 1,375,412 1,255,763 341 119,649 1,430,428 1,299,875 355 130,553 1,487,646 1,339,061 369 148,604 1,547,151 1,377,929 383 169,223 1,609,037 1,427,791 399 181,247 1,673,399 1,460,548 415 212,851 1,740,335 1,514,886 431 225,448 1,809,948 1,543,259 449 256,689 1,882,346 1,595,646 467 286, 700 1,957,640 1,637,190 485 320,450 2,035,986 1,674,155 505 361,791 2,117,383 1,718,808 S25 396,576 2,202,079 1,739,024 SAG 463,054 2,202,079 1,739,024 SA6 463,054 2,202,079 1,739,024 SH6 463,054 2,202,079 1,739,026 S46 463,054 2,202,079 1,739,024 S46 463,054 2,202,079 1,739,024 SAG 463,054 2,202,079 1,739,024 S46 463,054 2,202,079 1,739,026 S46 463,054 2,202,079 1,739,024 S46 463,054 2,202,079 1,739,024 S46 463,054 2,202,079 1,739,024 S46 463,054 2,202,079 1,739,024 S46 463,054 ecooocooco ooo coo ooo SSSSSSSSESESSEES DIESEL COMPONENT HYDRO DIESEL FUEL FUEL FUEL CONSTRUCT'N REPLACEMENT USE PRICE =— COST COST SCHEDULE. (gal) ($/gal) (s) (s) (Ka) 63,750 1. 36 $113,808 $7, 130,000 0 4,748 1.30 $6,194 0 5,217 1.30 $6,806 0 5,658 1,30 $7,382 0 6,240 1.30 $8, 141 0 6,956 1.33 $9,256 ° 8,023 1.36 $10,889 0 6,703 1.38 $12,048 0 9971 1.41 $14,079 0 10,879 1.44 $15,670 0 12,384 1.47 $18,193 300 14,102 1.50 $21, 132 0 15,104 1.53 $23,086 ° 17,738 1.56 $27,654 ° 18,787 1.59 $29,876 0 22,224 1.62 $35,048 0 23,892 © 1.65 $39,528 0 26,704 = 1.69 $45,065 0 3,149 1.72 $51,896 0 33,215 1.76 $58,316 0 38,588 1.76 $67,750 350 38, 588 1.76 $67,750 “0 38,588 = 1.76 $67,750 ° 38588 1.76 $67,750 0 38,588 =—1.76 $67,750 0 38,588 1.76 $67,750 ° 38,588 1.76 $67,750 0 34,588 «1.76 $67,750 ° 38,588 = 1.76 $67,750 0 4,588 1.76 $67,750 o 38,588 = 1.76 $67,750 350 38,588 1.76 $67,750 0 DIESEL ($) $210, SssssssssSsssssssssFsssssssss $245, 000 $0 Om cost ($) $20, 100 $1,140 $1,252 $1,358 $1,498 $1,670 $1,925 $2,089 $2, 393 $2,611 $2,972 $3, 384 $3, 625 $4,257 $4,509 $5, 334 $5, 734 $6, 409 $7,236 $7,972 $9,261 $9, 261 $9, 261 $9, 261 $9, 261 $9, 261 $9, 261 $9, 261 $9, 261 $9, 261 $9, 261 ($196,000) $9, 261 TOTAL ‘SYSTEM cOsT (s) $7, 263, 908 ($18, 367) ($16,559) ($14,750) ($12,680) ($10,596) (87,821) ($5,522) (82, 115) $210, 846 $4,963 $9,586 $13,311 $19,891 $23,694 $31,899 $37, 386 $51,474 $59, 132 $311,288 $77,012 $77,012 $77,012 $77,012 $77,012 $77,012 $77,012 $77,012 $77,012 $322,012 $77,012 ($118, 988) NPV: $7, 786,546 Appendix G Letters and Comments The following letters and comments were received by the Alaska Power Authority in response to the draft copy of this report, dated August 1985. 168/427 oo AD a0 DOWL_ Engineers 4040 ‘’B’’ Street Anchorage, Alaska 99503 Telephone (907) 562-2000 September 23, 1985 W.0. #051920 Ms. Susan G. Rogers Alaska Power Authority ALASAA 2050 AUTHORITY 334 West 5th Avenue Anchorage, Alaska 99501 Subject: Findings and Recommendations Togiak Hydropower and Waste Heat Feasibility Dear Ms. Rogers: As requested, we have briefly reviewed the draft of the refer- enced report. Of course, we are not knowledgeable on the waste heat aspects of this report. The hydropower sections appear to be in order. Sincerely, DOWL ENGINEERS LQ. O.NG Qu? Melvin R. Nichols, P.E. Partner MRN: kf =e 49 <= MEMORANDUM State of Alaska to: Robert D. Heath cate) September 24 Ie Executive Director SE? 26 Alaska Power Authority FILENO: 0985-IV-0186 - A TELEPHONE NO 267-2346 ae FROM Lance L. crane susvect! Togiak Hydropower Regional Supervisor and Waste Heat Region IV Feasibility Habitat Division Department of Fish and Game The Alaska Department of Fish and Game (ADF&G) has reviewed the Draft Findings and Recommendations for Togiak Hydropower and Waste Heat Feasi ity prepared by the Alaska Power Authority (APA). We note that benefit/cost analyses suggest that the hydropower project is not feasible but that waste heat recovery is a viable option for decreasing energy costs in Togiak. Given that the hydropower project has been determined to be unfeasible, under current reasonable assumptions, your proposal will not likely affect fish and wildlife resources. We have no major comments on the waste heat portion of the report. However, we do have some specific comments on the hydropower portion. Page 7: In addition to the five reports listed regarding Togiak power projects, the draft Preliminary Evaluation of the Proposed _kKurtluk River Hydroelectric Site (Togiak), prepared by DOWL Engineers in October 1983, should be acknowledged. Page 12 aragraph 3: Fisheries information presented in DOWL Engineers preliminary 1983 report is more detailed than that presented in this current feasibility report. Although no more current information is available on chum salmon escapements, there is some information on the upstream extent of spawning of several species of fish in the Kurtluk River. If the Kurtluk River hydropower project is reconsidered for feasibility in the future even more detailed fishery information, as well as suitable proposals for mitigation of any losses to fish resources, will be .required. Page 12 and 17: We note that neither potential losses of fish resources nor costs of mitigation are factored into benefit/cost analyses. Given the value of fish and wildlife resources to the public, the potential impact of this hydropower project to those resources, and the legal requirements to mitigate such impacts we ==.44cs= 02-001A(Rev. 10/79) 1985 WER EY, op Robert D. Heath September 24, 1985 and benefits accruing to APA h fish and wildlife be addressed CORRESPONDENGE O'ISTRISUTION ACTION: INF CRMATION: &.Mmns. DATE REC'D on Western Alaska Ecological Services Sunshine Plaza, Suite 2B 411 W. 4th Ave. 2 nchorage, Alaska 99501 Mr. Cavid Denig-Chakroff, Manager SEP 4 6 1985 1 ak Hydro and Waste F et ha Power Authority a Asn’ VEER ALU Sth Avenue Aiasksa 99591 feo- Fini and Recoammendat, ans 26 SFr 175 aay joist iah Aydropower and Waste Heat Fea Ly ue 1 g-Chakroff: c o o =| 4 4 OQ o 3 The v.3. Fish and & Service (FWS) has reviewed the document From the perspective of @nviranmental mitigation. We have mad@ no strempt to te the cost scenarios presented rom the summary presented 1m Appendix A., const C evident that na environmenta mitig 3 red i mto the @vaiudtion. Mitigation ~OStS assoc ated with the comstruction of this Hydroelectric project would Further reduce the already poor bemefit/cost ratio. rom the geseription provided, w»&@ assume mo environmental miti vould De required For constructian and operation of the waste ee Pro;2ct In the preparation of future Findings and Recommendations, it wouwid & appropriate to include a brief enviranmental analysis and the estimated ts of mitigation. These dats should be utilized in developing a @ thorough economic analysis. id Thank you for the opportunity t vw 3h to discuss our comments, p at 271-4575. oO review an updated draft copy. lease contact Hank Hospning of my om a m< uw 2 oO o > ov mo Field Supervisor =-ASee=