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Home My WebLink AboutAlaska's Energy Plan 1985Alaska Power Authority LIBRARY COPY Alaska’s Energy Plan 1985 |. Forward BILL SHEFFIELD GOVERNOR STATE OF ALASKA OFFICE OF THE GOVERNOR JUNEAU February 1, 1985 Dear Alaskan: | am pleased to introduce the State of Alaska Energy Plan for 1985. The plan presents a complete description of State agencies’ current activities for energy development and conservation, and it outlines options available to us for further energy-related efforts. Options for Alaska’s energy future must be selected in the context of what needs to be done, what the State government can do best, and what our financial resources will allow us to do. We seek a future in which con- servation, new energy projects large and small, and the development of new fuel resources can provide long- term energy security at reasonable cost to the consumer, stimulus for economic development, and perhaps public revenue as well. The State's role in the realization of this future must be to facilitate energy projects and energy resource development that will provide tangible, long-term economic benefits not otherwise obtainable by private interests and local agencies working on their own. @ The State should play a role in the development and financing of energy projects that 1) represent the lowest long-term total system costs among all possible alternatives, and 2) can be planned, financed, and con- structed by the State more effectively than by local utilities. The State’s participation should encourage the development of optimal energy generation, transmission and distribution systems. This will result in the lowest energy cost to consumers in the long-run. @ The statutory mechanism for distributing the State’s cash investment in past and future hydroelectric pro- jects — pooled debt in the “Energy Program for Alaska” — must be developed to achieve the full measure of fairness to which all Alaskans are entitled. Future electric power projects, as well as the projects in the Four Dam Pool, should provide sufficient long-term savings to allow reduction of the very high cost of electricity production where only diesel generation is feasible. @ Conservation is a proven technique for decreasing energy costs. Efforts to weatherize homes should be promoted. Our goal should be to reach a high percentage of qualifying homes within the decade. Also the Power Cost Equalization program must be monitored to prevent economic disincentives to conserva- tion that it may create. e@ New Alaska fuel sources are likely to play an important role in domestic and foreign markets, providing economic development and future public revenue as well as meeting in-State energy needs. For example, North Slope natural gas may yet be transported by pipeline to foreign or domestic markets. Private industry is looking at marketing LNG in the Pacific Rim. North Slope natural gas could also play a significant role in supplying future Railbelt energy needs. In addition, increased exploration and overseas market develop- ment for Alaska’s coal resources may result in significant reductions in the cost of coal for in-State consumption. The State of Alaska is committed to the development of an equitable energy future for all Alaskans. By facilitating the construction of optimal energy systems, by accelerating conservation and weatherization, by assuring equitable benefit from State investment, and by seeking new fuel sources, we can all share in Alaska’s wealth. Sincerely, Bill Sheffield Governor Alaska’s Energy Plan 1985 Governor Bill Sheffield Prepared by: State of Alaska Department of Commerce & Economic Development Office of Energy Loren Lounsbury Jack Roderick Commissioner Director February 15, 1985 For additional copies of this report write to: Department of Commerce and Economic Development Office of Energy Pouch D Juneau, Alaska 99811 ll. TABLE OF CONTENTS PAGE Ta RORWARD sctrcsncg tes ture caus tor sie a zs aloo ou Farag oe local car es lee ore eal eae oe i PLY TABLE OF CONTENTS... 0.0.501.s:¢ 5-0 0-016 psu ie-o'0'0)uisleu 1p. S1er0]sisinelie. die e/sielaee iii TELE EST “OF CHARTS 6c. ossoic ois leit o:ccnlans wisi ois reie widens etic 0 6:0 $4) a1 wieioidl 0.5/5 ial viii PV:— TST OF —TABUES sraacoce oe 0icta sieves were oees'ese wit wibieinielersiew nie eieiereie ee ix V. LIST OF APPENDICES ........cccccccccnpsccccececsccsccessecees x 1. . INTRODUCTION. .......cccccccdacrcccccccceccccseccccscccccsees 1 PU ate Organ ZAC OM sratece ote 5: are ors oo 1qrqcrure clams wow oieie's ore ve leie 94) orl w ers 4 Plan: Devel OPMeN Cis 6: oioo.d sc, cele cies 6:4 sree elaicinceie pieleie|e.c.0.0/+.016:6 0 tieiere 6 2. ENERGY. ASSESSMENT... 2.0... ccc ccccctcnncccsccrecccccevecres 9 RESOURCES......... eee cow ral wis are) ses oascntarel o oceyeserel elas weletloaleie-eiere 1l Oi TinandrGas sis esis soe otis wee nips a a abl si oo ace tol era fore Tat 11 Leasing and Exploration.........cceseeeccceeeeecs 12 Alaskan Refineries... ..ccccccccccvccsccccccscccs 20 Oe re toca oa wr ces ore cana ars oe acel ai pie e ied sles ie inleele siete esas wieares 20 Coal LOCatiOnSs occ ipecccctectccnsessceececteesies 20 Cape Beaufort Coal... cc... cece cece cece eect ee eees 23 RAL aire: ors-076:0 4: 010) ener -'0@ orele sie: crwieiere =o wienal ova oslo oie! sqwlteseiererei ene 24 HYGVOCIECERICS. c20. 5 age esa sivetwemos ose Bist st siviois' eee 24 WING: cic ccv ewe c esse pee ose niet geivargloe essay auumeeee 27 Geothermal........ccccseecees lorie Sue’ tr0 wieiwislorsig lnisletecwiee ow 27 SOVAN. 2 ewe cc cece ce cece r swe ccrsseesens cleisiei-aie Ses 31 Te Vd wire Pics roperatt ae voltvel mole Woda aiplecdeastialyelesteitlar tareiecine tales 32 Biomass/Wood.........6- # Wie bis, 016 ae 60:8" slsvisieierecicns aisteie’ aisisze 35 Conservation.....eeeeeeee tioieceinle’s lace bselle ekeistee saloons aus eset 37 BUT IG INGS occ a cca'sc'el ais Solute ae Pic oie wit ao 0is aie sie ele eie 37 Power Production..... a laipio eiere largl ecg lareceie wee cletwiate were 37 Transportation & Communication...........eeeeeeee 38 iii Table of Contents (continued) PAGE ENERGY TECHNOLOGIES trerevevererateiororerceretteei ol -fetee toile rxsttererars 39 ElleGtrai Call RROGUGtH Olveleletterrerelensiciscloveie ce ieteroleioreielar rare 39 POSS a Sassosnocouucanmoccouspcoocd0dGnG 39 Renewab lenenetayctasiccserectorsreretcltoiero1-1clcle sasicior-r-v 44 Hydroelectricity 44 Wind 44 Solar 45 TRANSMISSION SVS COMS corer} erersrerelcieleieteicieiolcisicisiersre 46 Spacesand Water sh Ga Ging crerererereyercresetatot oversrsiouelofererekole rere 48 OiNlPandeGaS=Burnensycrcrorere)arorerersietarclaroic <ohelorelesalouero 48 Wood Combustion Burners........ceeececeeeeee 49 EV GGCICall SRESISICANGE srereiclerereicteteleleicssicle/srerchelarers 49 HE ate UMD Sierctotererer relepetelotorete larofeleres clereiscietoteieieloierere 50 SOM a Wine wie letelels elelersie ciate eteiieieeiereiaeiele eels iar 51 ENGUSSEMA Ia VER SYVSICOMS orotate c¥ere re cverolofororereyole olaterersieloVoloieloie~ 51 ENERGY@SUS Eee teers cores cesecere reer eel onre orersterctcre orasverenololereroletere 52 Consumptionsby£SOUNCC se cisceretevererctoreictercierarciicceretercrerelerere 52, Consumption/Production by Fuel Type.............- 56 R@GrO CUM Srerareratororer<coe tole orekelelorsreierel<erorsrercielereiel ofere 56 Natural Gas 60 Goalil ear rereret rete rototersrs cocucrolotore¥ehsrclerera cieicioreie [orererselsr 60 ESOC WRI Gili tyiereterorereieneroreietctorelololefonerstaleroreners srsiererahere 63 EMERGENCY ENERGY PLANNING... 2... sc cc ccccccecccccvscce 65 Civil Defense Emergencies & Natural Disasters.... 65 Rowe SysitemSahatlUGeSiec cretclercvercie icicle! o roisiesferereie cieie 65 Mayeke@t Rad VUeSircccrctocsrerersrcrctc lorie clevoreicreicle clowicicrere siete OO) ALASKAHS ENERGY SEUMURE:Hiercicasrertelersiciciclsiciciers alee icra ail OS EXP@Gtalt-t ONS ercterscrareteielesstsrencreercieieieicic ele icici eiereisiors 68 Futtire: States Revenues iccrscesrcierrccic1ecreicielo cle’ tere orale store Us iv Table of Contents (continued) PAGE 3 PEE SIL ATEN ENERGY PROGRAMS rorerteretstetevelefelereteteteteteteterteteteleretetcvekete efetetetci> 73 ENERGY, (CONSERVATION crcteleyelolornieieverercleieloletelererelolerereYelayelererororerave 79 Rural Energy Management - Technical ASSIS LANGE) yerrereettolialelcicieieielsishelenelelaleretercleleleiele 79 Conservation eaucatl On rletctleleleveleioctelorere olelelele cretelate = 80 Thermal) and: Lighting Standards .<.<..00..0310552604. 81 Insti tutdonal (Conservation: ..25 20 < cole oe cisieisiso1o 81 ENERGY) Gran tS iorspcisvrsvororerctotereroxctelesorererololoyorslorovolereratencrats is 83 Weatherization... .00sscss00006 eforerevessrers Beete ele oreiehe'e 86 Was telHeatmraciil ttt esrrfelleretelrerertereneeieeretereteteterarele 89 ENERGY SUBSIDIES! yarclsterststoletereteleleleisreictereielstereieioletste sisiste/eistetele 92 ROWERACOSUEASSI SCARCE ectoreictcloleve(cielclolsieleicieteroiclatsierel slots 92 Power Cost Equalization........... efeskeastelokelcletereierers 92 LIHEAP As wetetsrors lekeloters\elerotolereletenarereleictoirerrelsiersisinisirelelere 93 Grants and Loans........ eee eee eineS Audit Grants..... mlevatele iste elolelslelsiernietarclelalere(oleierers 95 RESTdene 141) LGaNSc.. 5:2//cicic1)ojnreieee cle erereieterotelere 95 Alternative Technology Loans..............4- 95 Bulk fuel) Coans/Grancs.-ice-eleissie eee cereletele/eierel> 96 EEEGTRIGALL SY STEMS tercretersiclcteteloteroralolelelelelletelelel-ferelererereiorsierere 97 Project Development Process....... elolsicllolelelotelelelorels 97 Barge Scale EVEGtrUt 1CaG TON < ci:c1o19 orc reic cle <icicicitiesisie 98 Small lSGal CLEVECCRITICAGCION erelelicielicilecicicisissiciei-i> 98 UETIAGY LOaNSicjcrerecerelereyevo¥e'loleie! oyovelelsiers cneisieier crete (orolereiere 100 RuraljElectri fication) Loans rc.) cies sleel-\ere LO echnit calli ASSiStanGels-.-1-1</-\e1olorelelowe's sislsvelelele/elelee rer LOL Table of Contents (continued) PAGE ALTERNATIVE ENERGY DEVELOPMENT).\5:50)0010.5.0 0010-6 cjs1010 wie e101) 102 WindBEnengy i PeageCUS lrererslljeiei-ielsleleroeielolelay sieleteroral-1ore 108 BiGEnNe nay PYOGKaMartarcterersieleyolelrelelerererevecleleteteleleteterslelers 111 Electrical iGansmiSS1 OM etreicreicreielerersterereiolelcloleleolersi clare 112 Energy Conservation. sc1s cleleisisicisiciseiieiclevelsicjevsiersisis/ aie 112 Alternative Energy Information..............eee0- 112 Microhydroelectricity Handbook.............. 113 Innovative Technology Awards............e0e- LS) Bioenergy Outreach Program...............2.- 13 Geothermal) Devel opment <ccrciiersicrerele ois ei cheleloioielerciciesiore 114 AliaskajEnergy Gen terirteyeiielss'ssleretalavelsis\ctolevetslstoteleletslo 114 University of Alaska - Research..............000- 115 UIST REGULATILONS oyeroreverereretevorelotove elerereteleterelavetereterstotore eleter- 116 EAS TINGRANDIIMARKEMING yore cletstelsloressversfelevelsierstelelotoferetelotoresoterere 117 RoyalityaPrognaltscrerecicrefalere ctolele ore cictereielelsleler sveverereteieers 117 Ot and [Gas leasdingmrrtetecrslstereretertevelersvereterersareleretererere 119 Coaliteasingerctyeseeciciete afelstoleloleleietelereioroieisielereroreteicielore 123 Geothermailiileasiingirrersteletarcroleretereiclevel rs lcletel rerenetonsl slelelo 123 Resource Marketiingircreelevereleteloisteielelateieielofelelerelefolelelelore 123 ALASKA'S ENERGY ISSUES...... Biterlelerersteleclelsteteieteisicisrresictcteteciele 125 PUANNINGHISSUESyereeleretsieleretsieieieteicisielersiereictere atorotoreferelere 139 ENERGY PRICE ISSUE...... sichshelsieherstolcleneletstsr teteteletete Sela SUBS IDIIESMES SUE vaerersrsisreieveratetayeleletexetorerelelerersiereietelel“felets 145 CONSERVATION) TSSUBOMY crereiieeteielisietelelelelelsisieieietsteleieieier= 148 vi Table of Contents (continued) PAGE ENERGYISYSTIEMS)) ISSUBCuyyerereteiielerelerctoietercrelereieterelelelers ore 151 ALTERNATIVE TECHNOLOGIES ISSUE................... 153 MECHNIGAINASS TSTANCE SISSOE yaa cr relstelerlan terres erat 156 MAJOR ENERGY: |PROJECTIS ISSUE Ye ein late cieeinele nies o's 157 SM SUNMAR YI ANDs CONCLUSIONS sc lsccterelessrererolelorsraveracoteterstercverelelelclerenteier ia 161 Ax MENergy ASSCSSMEN Gree avelsielarsiers teisicia’ +) slers sicie sieictelstelereieielsie.s 165 BENG LGY: RVOGK AMS wielarcletstavelelelcisterereleleiclelalerecieielelstercleletereverciers) cle 166 Coy Alaska's) Future) Enenay PVOgGraMS jaca eis celle cicreterele cere 166 Office lots chenGovernotias aercilsieles cleleleverstelelereicvercreivels 167 Alaska’) Power (AULMORIty sess clersieia otic lereroisiecictorcicle)ctele 168 OFFACE TOT ENERGY aelecteciereleie + clerteloiersceleioisictoretetel tetel stele 170 Division] Of sINVESMeNtS\arcrecetcletere ele eicterctelelereietelsicle/ctel~ 171 Department of Community & Regional Affairs....... val Department of Natural Resources...........eeeeeee 172 Department of Transportation & Public FACHT ACT eSlyelarereerciercisisiclelererersleierelcienicteleyererncetelerst ster 173 Department of Health & Social Services........... Ws Department of Administration............ceeeeeeee 174 Gra BUBLSTOGRERHY Aer lefetelerscerolalereloretetcielereleleveteleleleleveledeveler ef cheielers) stereterelelays 15 Tas ABBEND Xt eretstetes toyerererel crevelevetelsteteielsy Boletevelorohetoicvele) vokelototerstetete EE LOS vii Il. LIST OF CHARTS CHART 1. State Energy Planning Regions (U.S. Census Regions).. 2. 1985) Plan) Development| Process Sicreicier)s1e1srereleleicie! si oyeisielelereicic 3. Alaskan and "Lower 48" States Continental Shelf Size Compas SOnSerererrsetecitelcecteretetslsievelsisiaricletclelelelalerelefelsrolsie 4. Known Oi] & Gas Provinces in Alaska...........--.000- 5. Location of Principal Coal Fields in Alaska.......... 6. Undeveloped Hydroelectric Resources of Alaska........ 7. Annual Average Wind Power in Alaska...........eeeeeee 8. Potential Tidal Power Sites in Alaska............00.. 9. Existing Transmission) Systems. o.no 26. ese cise 10. Rural Waste Heat Recovery Projects Constructed....... 11. Rural Energy Waste Heat Evaluation Program, 1984-1985 viii TABLE wn Pe PH wn re apf, PRR wwona nm MR MH P rm oO WwWnr - MP NO rPOoOUONaMNS rm > Iv. LIST OF TABLES PAGE State of Alaska, Department of Natural Resources, Five Year Oi] & Gas Leasing Program..............eeeeeeee 13 State Petroleum Competitive Sale Areas...........eeeeeeeees 14 State of Alaska Five-Year 0i1 & Gas Leasing Program RdandaTy 1965) ileal -sa,5 <r02s olessso,oieieseseseseceiel ore, tiosovs]stsbefelossi5)syspsrscous 16 Federal OCS Leasing Schedule... ........csccccecccccesscscces 18 AlaskanePetroleum Refanenies..cccoss sree ee ee eee cere e ee oe 21 Hydroelectric Projects Operating in Alaska..............06. 26 Potential Locations for Tidal Power Plants................- 34 1983 Electric Generation Data for Alaska..........c.esceees 40 Nameplate Capacity of Diesel Generation in Alaska - 1982... 41 Coal Fired Steam Plants in the Fairbanks Area - 1984....... 43 Consumption of Energy by Source: Fossil Fuels and Pllectrtcttyntembttiad ciclo sclcee coe eceeaoiooeee 53 Consumption of Energy by Sector and Fuel Type for Alaska... 54 Total Reported Transportation Fuel Used in Alaska, POST 1 IGS wrercrerrelsieteie/eicicGrelelerers vre(cieierers ccolerornier clare eters stetorevsisicrclcls SS PetrolEumaUSey: DY cSeCEOM gerctetercraterereraloroie <Uotape prelates alelolstolerelcieterevevels 57 Production and Consumption of Refined Petroleum Products TMT ALASKA LOGLererclor scare alolerararofovolelsistejelolelelelelelolelstelersle! secexctelerote 59 Natural Gas Used by Sector.. 61 CoaleUSed by SCGUGi,. lercreiciclelerecreteleletenezocleteverotorotetade 62 Electricity Used by Sector 64 Agency Responsibilities by Energy Functional Discussion PV BaSeya! Ih9O4 ales ecrersinierste elope ccoleselerneloleioieisisicieleicielel niskeseleserete 77 Institutional Conservation Program Funding History, USB Q SUG GAD wyavicintace eeysrereye slat oteretereaielatla creleeaetele eerie rrarerrente 82 NORA ERCROVE MIM aONaMES re crorslc(- (01 oicielolelojeickeleiereseiei}si cieleisisi iaisielelsiete 84 BY (86 ecmisia Gt mel teranyUS. lapel :0ins4 o'<)a1leislofoieinlotelolovevevelele sininielars ale 85 Weatherization Funding History. 6. ee ce cates ccc ccc scccces 87 FY '84 Low Income Home Energy Assistance Program Funding... 94 Alaska Power Authority Project Approval Process - SEQUENCE) Of EVENTS « «isis icralore sxaleie:s; ola ake (olsicrckere atotols'eve sieisieisl ole sists 99 Alternative Energy Projects- =O ttl GQ@OTMENENGY eetoeeteleeters 103 Energy Issue Summary........ otverootoh stele stetoke(eYekekedelelerateleKetstelote foie aekeO: ix Appendix V. LIST OF APPENDIXES Page Alaska Statute 44.83.224 - Energy Plan.............000% 185 ACknOWlEdGeMeNtS 6.4 «+ wis spe sive cre eelewiwisigivie's oie glee sieiesciee 187 List of ConverSiOnS......cccccccccceeccccceeceeeeseeecs 193 Abbreviations Used In Plan... ccc. cece eee cece cee ee eeee 195 INTRODUCTION 1. INTRODUCTION Alaska's 1985 Energy Plan is the fifth in a series of reports developed under Alaska Statute 44.83.224 (see Appendix). Previous plans have included information regarding energy demand, assessment of energy supply options, research, conservation, and emergency planning. These plans have provided basic information and examined the long-term view of Alaska's energy future to the year 2000. Emphasis was directed to reporting current energy production and consumption, and assessing Alaska's future 20 years hence. Those plans failed to highlight energy policy and Alaska's future in the near-term. The 1985 Energy Plan combines the efforts of nine State agencies into a plan that defines each agency's energy programs, provides guidelines for future State action, and sets the energy policy direction for Alaska in the coming years. The 1985 Energy Plan adopts the view presented by energy specialist Peter Drucker who said: "Long-range planning does not deal with future decisions, but with the future of present decisions." Through the cooperation of State agencies, and from public input provided at all stages of plan development, the 1985 Energy Plan seeks ways to coordinate energy programs so that maximum benefit is provided to Alaskans in both rural and urban areas in 1985, and for many years to follow. Alaska has vast natural wealth, disparate energy costs, and wide energy consumption levels. Spread over 591,000 square miles in six distinct climatic regions, Alaska needs a consistent energy strategy that provides affordable, reliable power for all Alaskans. Energy strategies developed in the 1985 Energy Plan were cognizant of several notable energy considerations, which include: 0 Extensive nonrenewable resources are found throughout Alaska, but opportunity for conversion of those resources to useable forms of fuel is limited. 0 Renewable resources like wind and solar are also available throughout Alaska, but are not extensively used due to the high front-end costs associated with establishing working units in remote locations. 0 Due to Alaska's small population size, total petroleum consumption is small compared to other states. On a per capita basis, however, Alaskan's consume three times the national average of 303 million Btu's per year. 0 The value of Alaska's energy exports of crude oil and natural gas far exceeds the value of refined fossil fuels utilized in-State. 0 The true cost for producing energy in rural Alaska is higher than in urban centers. With certain energy subsidies, however, the cost of energy to consumers in rural Alaska is comparable to consumer costs in urban areas. PLAN ORGANIZATION Alaska's 1985 Energy Plan is presented as a three document set. These include: Oo Alaska's Energy Plan - 1985 Executive Summary - Summarizes salient points of main document. - Highlights program options to be pursued in 1985-1986. Alaska's Energy Plan - 1985 Document: - Snapshot of Alaska's energy picture in the first half of the 1980's. - Outlines potential solutions to energy problems in the form of issues, strategies and suggested program options. Alaska's Energy Plan - 1985 Regional Data Summary: - Presents energy data by community organized into 23 energy (census) regions. (Chart 1) - Includes data on consumption of energy, energy subsidies, and energy project development since 1980. Combined, these documents portray Alaska's energy status in the first half of the 1980's, and defines what direction the Sheffield Administration will take to resolve energy issues in the coming years. Both the Executive Summary and 1985 Energy Plan are divided into four major sections: oO Ener Assessment: This section includes a_ resource, technology, and energy use inventory portraying Alaska's energy picture today, an emergency energy contingency overview, and a general examination of energy supply and demand in the future. Alaska's energy balance is detailed by 23 energy regions in the Regional Data Summary; Energy Programs: State energy programs are discussed under the areas of energy conservation, energy subsidies, elec- trical systems, utility regulation, alternative technolo- gies, and leasing/marketing; Chart 1 - State Energy Planning Regions (U.S. Census Regions) STATE OF ALASKA 1 North Slope Kobuk Nome Yukon-Koyukuk Fairbanks North Star Southeast Fairbanks Wade Hampton Bethel Dillingham Bristol Bay 11 Aleutian 12 Matanuska-Susitna 13 Anchorage 14 Kenai Peninsula 15 Kodiak 16 Valdez-Cordova 17 Skagway-Yakutat-Angoon 18 Haines 19 Juneau 20 Sitka 21 Wrangell-Petersburg 22 Prince of Wales-Outer Ketchikan 23 Ketchikan - COMYNAMFSWN 0 Alaskan Energy Issues: Energy issues are described with a rief analysis of why they are an issue, what the State has done about them thus far, and what State options could be used to reduce the negative impacts of the issues in the future. 0 Summary and Conclusions: The 1985 Energy Plan is summarized and future State policy direction is discussed. PLAN DEVELOPMENT Numerous energy issues face Alaska, and the 1985 Energy Plan provides the mechanism to form an action plan to resolve those issues. How that development evolved from the initial desire to coordinate State energy programs to the final identification of program actions is shown in Chart 2. The first step in developing Alaska's Energy Plan was to determine Alaska's present and future energy goals. Six goals were developed to provide guidance to State agencies carrying out their respective energy programs. These goals are: 1. Ensure that ALL Alaskans have an adequate supply of quality energy at reasonable costs to the consumer and the State. 2. Improve energy-related services by coordinating the activities of State government agencies in a _ fiscally responsible manner. 3. State agencies will work with industry, public utilities, nonprofit organizations and consumers when developing energy plans and programs. 4. Improve the capabilities of local governments and organiza- tions, industry, utilities, in planning and developing energy services. 5. Foster efficient uses of energy that are consistent with environmental and social concerns, emphasizing local impact. 6. Encourage the development of alternative energy technologies, particularly those that utilize local resources. The second step was to complete a comprehensive summary of State energy programs, and report recent production and consumption data for Alaska. Programs used by the State in the past two years were considered the most pertinent. Energy data emphasis was placed on summarizing information since 1980. Chart 2 - 1985 Plan Development Process State’s Decision-making Process for the 1985 Energy Plan Alaska’s Six Energy Goals | SSS Ensure that ALL Alaskans have an adequate supply of quality energy at reasonable costs to the consumer and the State. Improve energy-related services by coordinating the activities of State Government agencies in a fiscally responsible manner. State agencies will work with industry, public utilities, nonprofit organizations and consumers when developing energy plans and programs. Improve the capabilities of local governments and organizations, industry and utilities, in planning and developing energy services. Foster efficient uses of energy that are consistent with environmental and social concerns, emphasizing local impact. Encourage the development of alternative energy technologies, particularly those that utilize local resources. % % & a a Alaska’s 1985 Energy Issues 1. Energy Planning 5. Energy Systems 2. Energy Price 6. Alternative Technologies 3. Energy Subsidies 7. Technical Assistance 4. Energy Conservation 8. Major Energy Projects & & & b Strategies Strategies Strategies Strategies Strategies Program Options Program Options Program Options & State Action The third step was to identify Alaskan energy issues and then focus on areas where State agencies could take action to bring program delivery closer to the six stated goals. Numerous issues were identified, and subsequently aggregated into eight issue statements to facilitate discussion. Collectively, these issues touch virtually every energy problem and opportunity that faces Alaska and address one or more of the six energy goals. Each energy issue statement was then subject to individual analysis that included a discussion of the issue and scope of problems and opportunities associated with it. Finally, within the focus of each issue discussion, energy strategies evolved which described an approach or solution for resolution of all or part of each issue statement. That evaluation provided one or more strategies under each issue. Each strategy includes one or more option. These options are the basis for possible projects or programs in the future, and represent the main thrust of the 1985 Energy Plan. ENERGY ASSESSMENT 2. ENERGY ASSESSMENT Alaska's energy assessment section includes a combination of resource inventories, energy uses, emergency contingencies, and future energy and economic projections. Together they provide a general picture of where Alaska stands in the first half of the 1980's and potentially, where Alaska may stand through the rest of this century. How Alaska uses the natural energy wealth from within, what energy imports are needed to keep Alaska moving, how Alaska can potentially avoid energy disasters, and what future considerations the State must face to remain economically sound is the focus of this section. Indi- vidual resources will be reviewed from a historical perspective, and analyzed for future potential. Actual use of energy from the major power sources, and power production technologies used in Alaska today will be reviewed. Together, this supply and demand assessment will show Alaska's energy balance. Following that assessment, a short overview of emergency contingency planning is reviewed. Finally, the section concludes with general projections of Alaska's future within the confines of technological feasibility and economic constraints. RESOURCES Alaska has a bountiful supply of energy resources. Crude oil leads the list of fossil fuels available from Alaska but natural gas, coal and peat also play an important role in both State consumption or prospective export markets. Renewable resources of water (hydro- electric), wind, solar, tidal, geothermal, wood and biomass are also contributors to Alaska's energy picture. Each of these resources is discussed individually in the following sections. OIL AND GAS Oil and gas are Alaska's primary energy resources. Total petroleum production in Alaska since the turn of the century has been over 4.3 billion barrels of oil, and over 7.9 trillion cubic feet (TCF) of natural gas with estimated reserves of 9.8 billion barrels of oi] and 39.9 trillion cubic feet of natural gas. Of the natural gas production, approximately 5.0 TCF were reinjected and 2.9 TCF were either sold, flared, or consumed in field operations. Oil has been found in coastal areas of Alaska since the 1800's, but today's large scale production is a product of exploration and drilling during the last 30 years. The only areas of production are Cook Inlet and the North Slope. Competitive leasing is the method used to provide temporary access to below ground petroleum reserves, with leased tracts spread from the Gulf of Alaska to the Beaufort Sea on federal and State lands. Refinery capacity in Alaska is limited to six refineries, but provides over 50 percent of Alaska's refined petroleum needs. Te Oil was first discovered in Alaska during the 1800's. In 1853, Russian traders first reported natural oi] seeps along Alaskan coastal areas. Until the 1940's there was a low level of oil exploration, and exploratory activities were limited through the mid-1950's. That changed in 1957 when the Swanson River Field on the Kenai Peninsula was discovered. The Swanson River discovery provided a much-needed boost to the Statehood cause and ultimately led to the State's first lease sale in 1959. Off-shore and on-shore tracts were offered in the Cook Inlet area, and about 77,000 acres were leased for a total of $4 million using a cash bonus bid and a fixed 12.5% royalty. The first North Slope acreage was offered for lease in 1964 along with Cook Inlet acreage, and in 1965, the first Beaufort Sea tracts were offered. With the opening of the Trans-Alaska Pipeline (TAPS) in 1977, oil from the Prudhoe Bay field began flowing at 1.5 million barrels per day to Valdez for transportation to the West Coast. LEASING AND EXPLORATION The State has held 43 competitive lease sales since 1959 generating about $1.7 billion in bonus monies and leasing 7.7 million acres of state-owned land. Leases are issued for a primary term up to 10 years and may be extended if petroleum is being produced or exploratory drilling is underway. A total of 1,479 leases covering 4.6 million acres are currently active (see Tables 1 and 2). The State of Alaska plans to hold an additional 16 sales through the year 1989 (see Table 3). A revised leasing schedule is issued each year in January. (The reader is directed to the Department of Natural Resource's annual report entitled "Five-Year Oi] and Gas Leasing Program, January 1985" for details on the State's leasing program.) Alaska has a very large outer continental shelf (OCS) (Chart 3). The Federal Government manages the OCS as well as federally-owned on-shore lands. An aggressive leasing program instituted by the Federal Government will see as many as 11 lease sales conducted on the OCS through 1987 (see Table 4). Areas proposed to be offered include the Cook Inlet/Gulf of Alaska, St. George Basin, Diapir Field (Beaufort Sea), Kodiak and Shumagin areas. Recent OCS lease sales include Norton Basin, St. George Basin, Navarin Basin and Diapir Field. Known geological basins are shown in Chart 4. Exploratory activities are occurring on State and federally-managed areas in Cook Inlet, Beaufort Sea, St. George Basin, Navarin Basin and on the North Slope. Many years of exploration have revealed economically producible fields in the Cook Inlet and North Slope areas. Marginally economic fields, such as the Kuparuk and Lisburne formations, are beginning to be produced due to their close proximity to the super giant field, Prudhoe Bay. Development plans are being formulated for the Endicott formation located east of Prudhoe Bay. This is the first off-shore development in the Beaufort Sea. A recent discovery was made at Seal Island in the Beaufort Sea west of Prudhoe Bay. It appears as though State and federally-managed lands may be involved. Additional drilling and testing is underway to determine the extent of the resources. -12- Table 1. State of Alaska, Department of Natural Resources, Five Year Oil & Gas Leasing Program Acres Percent Acres Tracts Tracts Bonus Sale No. and Date Offered Leased Leased $/Acre Offered Leased Received 1. Dec. 10, 1959 88,055.00 87.66 77,191.00 52.08 37 31 $4,020,342.43 2. July 13, 1960 17,567.51 93.96 16,505.57 24.70 27 26 407,654.54 3. Dec. 7. 1960 73,047.70 31.30 22,866.70 1.55 26 9 35,325.31 4. Jan. 25, 1961 400.00 100.00 400.00 679.04 3 3 271,614.40 5. May 23, 1961 97,876.00 98.06 95,980.00 74.71 102 99 7,170,464.88 6. Aug. 4, 1961 13,257.00 100.00 13,257.00 8.35 6 6 110,671.55 7. Dec. 19, 1961 255,708.44 73.14 187,025.40 79.47 68 53 14,863,049.33 8. April 24, 1962 1,061.70 100.00 1,061.70 4.80 8 8 5,097.00 9. July 11, 1962 315,668.93 87.77 264,437.13 59.43 89 76 15,714,112.60 10. May 8, 1963 167,583.06 84.43 141,490.51 29.23 200 158 4,136,224.92 11. CANCELLED 12. Dec. 11, 1963 346,782.40 71.25 247,089.00 12.31 308 207 3,042,680.74 13. Dec. 9, 1964 1,194,373.00 60.51 722,659.00 7.66 610 341 5,537,100.94 14. July 14, 1965 754,033.00 §3.45 403,000.00 15.25 297 159 6,145,472.59 15. Sept. 28, 1965 403,042.06 74.87 301,751.28 15.49 293 216 4,674,343.74 16. July 19, 1966 184,410.05 72.66 133,987.29 52'55 205 153 7,040,880.17 17. Nov. 22, 1966 19,229.70 96.67 18,589.70 7.33 36 35 136,279.67 18. Jan. 24, 1967 47,729.00 88.82 42,397.00 34.88 23 19 1,478,777.23 19. Mar. 28, 1967 2,560.00 REJECTED 12/9/74 20. July 25, 1967 311,249.89 82.39 256,447.31 73.14 295 220 18,757,340.88 21. Mar. 26, 1968 346,623.00 47.59 164,961.00 18.24 308 147 3,009,224.00 22. Oct. 29, 1968 111,199.48 54.20 60,272.15 17.29 230 125 1,042,219,90 23. Sept. 10, 1969 450,858.47 91.50 412,548.47 2,181.66 179 164 900,041,605.34 24. May 12, 1971 196,635.07 47.10 92,617.97 4.92 244 106 455,640.57 25. Sept. 26, 1972 325,401.42 54.78 178,244.71 7.43 259 152 1,324,673.40 26. Dec. 11, 1972 399,920.96 44.50 177,972.56 8.75 218 105 1,557,848.84 27. May 9, 1973 308,400.81 36.93 113,891.71 9.93 210 96 1,130,324.51 28. Dec. 13, 1973 166,648.04 58.69 97,803.69 253.77 98 62 24,819,189.91 29. Oct. 23, 1974 278,269.43 50.00 127,119.65 8.19 164 82 1,040,909.98 29A. CANCELLED 29B. July 24, 1979 34,678.04 100.00 34,678.04 4.56 20 20 158,041.78 30. Dec. 12, 1979 341,140.18 86.80 296,307.65 1,914.87 71 62 567,391,497.48 31. Sept. 16, 1980 196,268.00 100.00 196,268.00 63.12 78 78 12,387,469.60 33. May 13, 1981 815,000.00 50.99 429,978.16 10.00 202 103 4,299,781.60 32. Aug. 25, 1981 202,836.74 76.15 152,428.22 10.00 78 59 1,524,282.20 35. Feb. 2, 1982 601,171.50 21.82 131,190.69 10.00 149 31 1,311,906.90 36. May 26, 1982 56,862.41 100.00 56,862.41 573.02 13 13 32,583,451.87 37. Aug. 24, 1982 852,603.08 19.80 168,849.00 3.33 217 33 562,943.90 37A. Aug. 24, 1982 1,874.60 100.00 1,874.60 52.00 1 1 97,479.20 34. Sept. 28, 1982 1,231,517.00 46.44 571,954.00 46.71 261 119 26,713,018.17 38. CANCELLED 39. May 17, 1983 211,988.08 100.00 211,988.08 99.05 42 42 20,998,100.98 40. Sept. 28, 1983 1,044,745.02 42.44 443,354.88 TAT 284 140 3,177,178.26 43. & 43A May 22, 1984 374,152.89 95.64 357,863.02 94.53 84 81 33,827,377.15 12,844,464.09 57.80 7,425,164.25 233.40 6,043 3,640 1,733,001,598.36 -13- 1. 2. 3. 6. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. Table 2. State Petroleum Competitive Sale Areas Bidding Sale Date Description Method Wide Bay; offsh. Kenai to Ninilchik; 12/10/59 Offshore Cash Bonus, Kachemak Bay Fixed Royalty Kenai Peninsula; West Forelands; 7/13/60 Offshore/Uplands Cash Bonus, Nushagak Bay Fixed Royalty Katalla; Kalifonsky Beach; 12/7/60 Offshore Cash Bonus, Herendeen Bay; offsh. Kodiak Fixed Royalty Uplands Ninilchik 1/25/61 Uplands Cash Bonus, Fixed Royalty Tyonek; Controller Bay; Paviov Bay 5/23/61 Offshore/Uplands Cash Bonus, Fixed Royalty Controller Bay (Special Sale) 8/4/61 Tidelands Cash Bonus, Fixed Royalty Icy, Yakutat & Kachemak Bays; 12/19/61 Offshore/Uplands Cash Bonus, So. Kenai Penin.; N. Cook Inlet Fixed Royalty Big Lake 4/24/62 Uplands Cash Bonus, Fixed Royalty Tyonek; W. Forelands; Knik Arm/Kalgin Island; 7IWW62 Offshore/Uplands Cash Bonus, Chisik Island; So. Kenai Penin.; Wide Bay Fixed Royalty Tyonek; Kenai Offshore & Uplands 5/8/63 Offshore/Uplands Cash Bonus, Fixed Royalty Yakutat Bay CANCELLED Below Forelands; Knik & Turnagain Arms; Upper 12/11/63 Offshore/Uplands Cash Bonus, Cook Inlet; Kenai Penin.; Tyonek to Katunu River Fixed Royalty Fire Island; W. Forelands; Trinity Islands; 12/9/64 Offshore/Uplands Cash Bonus, Prudhoe West Fixed Royalty Prudhoe West to Canning River 7/14/65 Offshore/Uplands Cash Bonus, Fixed Royalty Fire Island & N. Cook Inlet; Kalgin Island & 9/28/65 Offshore/Uplands Cash Bonus, Redoubt Bay; Knik; S. Kenai Peninsula Fixed Royalty Kenai Penin. & Knik; Middleton Island; Fire 7/19/66 Offshore/Uplands Cash Bonus, Island, Redoubt Bay; Kalgin Island, Fixed Royalty IIliamna Mt.; N. Cook Inlet Big Lake; Kenai 11/22/66 Offshore/Uplands Cash Bonus, Fixed Royalty Katalla; Prudhoe 1/24/67 Offshore/Uplands Cash Bonus, Fixed Royalty Lower Cook Inlet 3/28/67 Offshore/Uplands Cash Bonus, Fixed Royalty Big Lake; Knik; Illiamna Mt.; Beluga; N. Cook 7/25/67 Offshore/Uplands Cash Bonus, Inlet; Kalgin Island; Ninilchik Fixed Royalty Port Heiden & Port Moller 3/26/68 Offshore Cash Bonus, Fixed Royalty Big Lake; Knik; Beluga; West Forelands; 10/29/68 Uplands Cash Bonus, Ninilchik; Kachemak & Kenai Fixed Royalty Colville to Canning River 9/10/69 Offshore/Uplands Cash Bonus, -14- Fixed Royalty 24. 25. 27. 28. 29. 29A. 298. 30. 31. 32. 33. 35. 37. 37A. 34. 38. 39. 40. 43. 43A. Table 2. State Petroleum Competitive Sale Areas (cont.) Big Lake; Knik; Kenai; West Forelands Big Lake; Knik; Beluga; North Cook Inlet Cook Inlet (Between Forelands & Turnagain Arm) Tuxedni; Ninilchik; Kenai; Kalgin Ninilchik; Kachemak Bay; Beluga Kalgin & West Forelands; Chisik; Ninilchik N. Cook Inlet; Turnagain; Big Lake Point Thomson CANCELLED Copper River Basin Beaufort Sea (Joint Federal & State Sale) Prudhoe Uplands Lower Cook Inlet Upper Cook Inlet Lower Cook Inlet Beaufort Sea Middle Tanana & Copper River Basins Chakok River, Exempt Prudhoe Uplands Norton Basin CANCELLED Beaufort Sea Upper Cook Inlet Beaufort Sea and Colville River Delta/Prudhoe Bay Uplands 5/12/71 9/26/72 12/11/72 5/9/73 12/13/73 10/23/74 7124179 12/12/79 9/16/80 8/25/81 5/13/81 2/2/82 5/26/82 8/24/82 8/24/82 9/28/82 5/17/83 9/28/83 5/22/84 Uplands Offshore/Uplands Offshore/Uplands Offshore/Uplands Offshore/Uplands Offshore Uplands Uplands Offshore Uplands Offshore/Uplands Offshore/Uplands Offshore/Uplands Offshore/Uplands Uplands Uplands Uplands Offshore/Uplands Offshore/Uplands Offshore/Uplands Cash Bonus, Fixed Royalty Cash Bonus. Fixed Royalty Cash Bonus, Fixed Royalty Cash Bonus, Fixed Royalty Cash Bonus, Fixed Royalty Cash Bonus, Fixed Royalty Cash Bonus, Fixed Royalty Cash Bonus wiFixed Sliding Scale Royality; Net Profit Share (NPS) Bid Variable w/Fixed Royalty and Fixed Cash Bonus Cash Bonus Bid Variable with Fixed Royalty and Fixed NPS Royalty Bid Variable with Fived Cash Bonus Royalty Bid Variable with Fixed Cash Bonus Royalty Bid Variable with Fixed Cash Bonus Cash Bonus Bid Variable with Fixed Royalty and Fixed NPS Cash Bonus Bid Variable with Fixed Royalty and Fixed NPS Cash Bonus, Fixed Royalty Cash Bonus Bid Variable with Fixed Royalty and Fixed NPS Cash Bonus Bis Variable with Fixed Royalty and Fixed NPS Cash Bonus Bid Variable with Fixed Royalty Cash Bonus Bid Variable with Fixed Royalty and Fixed NPS -15- -16- Table 3. State of Alaska Five-Year Oil & Gas Leasing Program Sale Number 46A 47 45A 48 49 52 51 50 53 46 54 55 56 57 45 58 (January 1985) Sale Name Cook Inlet Kuparuk Uplands North Slope Kuparuk Uplands Cook Inlet Beaufort Sea Prudhoe Bay Uplands Camden Bay Icy Cape Holitna Basin Kuparuk Uplands Demarcation Point Alaska Peninsula North Slope Foothills Hope Basin Offshore Icy Cape Proposed Date February 1985 May 1985 September 1985 January 1986 May 1986 September 1986 January 1987 May 1987 September 1987 September 1987 January 1988 May 1988 September 1988 January 1989 May 1989 September 1989 Chart 3 - Alaskan and “Lower 48” States Continental Shelf Size Comparisons 47 \ \ \A*. \ OUTER \CONTINENTAL SHELF. | PLANNING (AREAs- ; Se Ley S Su { RING SEA REGION HAWAIIAN ARCHIPELAGO May 12 1982 | -18- Table 4. Federal OCS Leasing Schedule (as of October 1, 1984) Sale Number Sale Name 88 Gulf of Alaska - Cook Inlet 89 St. George Basin 92 N. Aleutian Basin 100 Norton Basin 107 Navarin Basin 97 Diapir Field 99 Kodiak 109 Barrow Arch 101 St. George Basin 86 Shumagin Proposed Date December 1984 April 1985 November 1985 December 1985 May 1986 August 1986 October 1986 February 1987 April 1987 June 1987 Chart 4 - Known Oil & Gas Provinces in Alaska te SOURCE: USGS 1975 -20- ALASKAN REFINERIES . Alaska's refinery capacity is limited to production from six plants. (Table 5) Chevron Oil Company opened its 26,000 barrel per day refinery at Nikiski on the Kenai Peninsula in 1962. In 1969, Tesoro Petroleum Company opened a 45,500 barrel per day refinery. It is now in the process of doubling the size of its plant on the Kenai. Phillips and Marathon companies have a 230,000 million cubic feet per day liquefied natural gas (LNG) plant, and Union Chemical Division an ammonia-urea plant, both on the Kenai Peninsula. MAPCO's North Pole refinery (near Fairbanks) was added after oi] began to flow through the TAPS, refining 46,000 barrels per day. MAPCO's refining capacity is due to be expanded also. ARCO's Prudhoe Bay topping refinery has a capacity of 14,000 barrels per day. There is also a small asphalt plant operated by Union Oil in Anchorage and within the MAPCO operation in Fairbanks. (For more details on oil and gas in Alaska, see “Historical and Pro- jected Oil and Gas Consumption, January, 1985," Division of Oil & Gas, Department of Natural Resources.) COAL Alaska's coal resources are plentiful and widespread, providing long term development potential for export and in-State use. Coal deposits range from Cook Inlet to the North Slope and offer a vast exploitable resource (Chart 5). Coal exploration and extraction operations are active throughout these areas. Only one.coal mine was active in 1983, and there was a reduced level of coal drilling in 1983 compared to the period 1981-82, but, in FY '85, a $2.0 million appropriation from the Alaska State Legislature will pave the way for Cape Beaufort explor- ation in the Kotzebue area. Financing has been arranged for the Seward coal loading facility. Alaska's measured coal reserves are approximate 6.3 billion short tons (one short ton equals 2,000 pounds) with additional hypothetical re- serves of 5.6 billion short tons. These reserves are estimated to account for up to half of total U.S. coal reserves. COAL LOCATIO Coal occurs in several major basins or fields as well as in smaller deposits statewide. The Usibelli Coal Mine, the only major coal mine in Alaska, produced over 800,000 short tons of coal in 1983 from the Nenana field. Of this amount, about 160,000 short tons were used to fire the Golden Valley Electric Association plant in Healy, and the remaining 650,000 short tons were hauled on the Alaskan railroad to the Fairbanks area for use at the University of Alaska, the Fairbanks Municipal Utility System, and for use at Ft. Wainwright and Eielson military stations. The Usibelli mine also uses waste coal and cogeneration to provide additional power locally. An additional 20,000 short tons were sold directly for residential heating. An export arrangement with the South Korean Sun Eel Corporation will -12- Table 5. Alaskan Petroleum Refineries Processing Plants Date Plant Plant in Date Plant Refinery Capacity Operation Expansion Product Destination Nikiski Chevron Refinery 18,000 BPD, 1962 JP4, Furnace Oil, Diesels, JP4, JA50, Furnace Oil, Diesels, North Slope Fuel Oil, Asphalt, Unfinished and Asphalt for Alaska; Crude Gasoline. Unfinished Gasoline, High Sulfur Fuels to Lower-48 states. Tesoro Refinery 45,500 BPD 1969 1974, 1975, 1977 Propane, Unleaded, Regular, and Alaska except No. 6 Fuel Oil to (17,500 BPD) 1980 (7500 BPD Premium Gasoline, Jet A, Diesel Lower-48 States. Hydrocracker Fuel, No. 2 Diesel, JP 4 and Unit.) No. 6 Fuel Oil. Union Chemical Ammonia 1969 1977 Anhydrous Ammonia, Urea Prills West Coast and export by tanker Division 1,100,000 and Granules. and bulk freighter. tons/yr Urea 1,000,000 tons/yr Interior Alaska North Pole Refinery 46,600 BPD 1977 Fall 1980 Military Jet Fuel (JP4), 3000- Fairbanks area, Nenana and 4000 BPD; Commercial Jet Fuel, river villages, Eielson AFB. 5000-6500 BPD; Diesel/Heating Fuel No. 1, 1000-1500 BPD; Diesel/Heating Fuel No. 2, 1800-2500 BPD, Diesel Fuel Type No. 4, 600-1800 BPD. Arco-Prudhoe Bay 14,000 BPD Transportation Facilities North Slope Field Operations Topping Plant Phillips-Marathon 230,000 1969 Liquified Natural Gas Japan LNG MCF/Day Cape Beaufort le Point Hope: pt | fiel \ Jo“ eld a ale Pr %, co ? *Chicago Creek seer os Rampart rae Nulato ag, —Lupans-y ‘ann Eagle NS — Herendeen <s eG < a c CMG EXPLANATION «# Coal exploration in 1983 Nenana Peo, Ree, \ | *» i | Broad Pass Jarvis | Creek’ \ iia lng ai Susitna : i Sea rAwell o> Matanuska \ ial = Te- Bering \ i u onal eS River -- to pies an Aaah NAY iia Sy Chart 5 - Location of Principal Coal Fields in Alaska ool yi double the Usibelli production after 1984. In addition, minor amounts of coal were recovered by individuals from the Kenai and Matanuska coal fields for space heating requirements. Coal drilling is used to estimate coal reserve potential. In 1983, such drilling in Alaska was reduced by 86 percent from the previous year. Drilling was reduced from over 80,000 feet in 1982 to 12,000 feet in 1983. Renewed drilling activity could begin since the State's proposed 70,000 acre Matanuska Valley lease sale was completed on schedule in the spring of 1985. Other coal exploratory activity is now occurring at the Bering River field near Cordova in a joint venture by Korean firms and Chugach Natives Incorporated. In the Beluga Coal Field, 45 miles west of Anchorage, Diamond Shamrock Corporation, through its subsidiary Diamond Alaska Coal Company, proposes to develop a twelve million ton per year coal mine for ship- ment to the Pacific Rim nations. Recoverable coal reserves are estimated to be a minimum of 330 million short tons. Estimated project life is approximately 34 years. The coal is low sulphur, low ash, high moisture, and approximately 7,700 Btu per pound. The federal Environmental Protection Agency has initiated preparation of an environmental impact statement to be completed in early 1986. CAPE BEAUFORT COAL Of special note is the Cape Beaufort coal development project. Located along the Arctic Slope coast west of the National Petroleum Reserve Alaska (NPRA) and the village of Point Lay, the western coal region is considered one of the world's largest coal provinces. Studies have found the quantity of the western coal region resource is immense. The quality of the coal is also excellent for space heating purposes. In 1984, the Alaska Legislature appropriated $2 million to the Alaska Native Foundation to develop a preproduction program for the Cape Beaufort area of the Western Arctic coal region. The Department of Community and Regional Affairs is responsible for managing the grant, and Arctic Slope Consulting Engineers will be performing field operations and analysis. There have been six studies conducted by the State of Alaska on the resource potential of the coal, all pointing to the Western Arctic coal fields as a viable economic alternative energy source for Western Arctic communities. A preliminary report is currently available on the Cape Beaufort project and includes: a coal resource assessment drawn from drilling activity, an environmental assessment, a permitting plan, a market evaluation, and an economic evaluation. Another study conducted by the Division of Legislative Finance estimated a local and regional marketing scenario and showed a potential for replacing up to 90 percent of existing diesel fuel needs in the region. This would displace 18.2 million gallons of diesel fuel per year by the year 2000. These preliminary studies indicate that development of the region's coal resource could result in a -23- long-term solution to the rising costs of energy in Western Alaska. More detailed information must be secured, however, before the final determination can be made. PEAT Peat has been used for years in European countries as a fuel and for agricultural purposes. The Soviet Union operates approximately 80 electrical power stations with a rated capacity in excess of 4,000 megawatts. They consume approximately 80 million tons of peat per year. Ireland consumes approximately 9 million tons for a rated capacity of 400 megawatts or one quarter of their electrical demand. Potential use of peat as a fuel source in Alaska was presented in the 1983 Department of Commerce and Economic Development report, "Peat Commercial Feasibility Analysis." It discussed Alaska's peat resource and potential commercial extraction for fuel. Based on that, and the U.S. Department of Energy criteria for peat used as a fuel source, Alaska has only a small part of the known world supply of useable peat. Peatlands with fuel grade potential cover 4.4 million acres of Alaska. With a minimum deposit thickness of five feet, these peat deposits could yield approximately 0.88 billion tons of moisture free, fuel grade peat. The potential use of this resource is clouded by the fact that much of it is in permafrost areas which normally are not considered suitable for mining. Peat assessment is now anticipated to continue in the Dillingham area and has been ongoing in the Roger's Creek and Houston areas in the Susitna Valley, and on the Kenai Peninsula. Part of the assessment will address questions concerning harvesting technologies, combustion systems and environmental impacts from mining peat for fuel. Horti- cultural peat is mined from four pits in the Fairbanks area and two in the Willow area as well. Production during 1983 is estimated at 15,000 cubic yards. HYDROELECTRIC Alaska has more undeveloped hydroelectric potential than any other state in the U.S. In the 1960's, the U.S. Bureau of Reclamation investigated thousands of potential hydroelectric sites throughout Alaska. The result was an inventory of 252 sites that may have a potential capacity of 2,500 kW. or more. The Alaska Power Admin- istration refined this list in 1968 to include only the most at- tractive sites which number 76 (Chart 6). Except for those sites which have either been developed or have received more detailed studies, the information in these lists still provide a reasonable estimate of the hydroelectric potential that exists in Alaska. Hydroelectricity can potentially offer a long-term solution to an area's electrical needs up to the rated capacity of the project. Current hydroelectric projects have a nameplate capacity of 197.7 megawatts (MW), with an additional 20.0 MW to come on line with the completion of the Terror Lake project. These projects will generate a total of 1.04 million megawatts hours (MWh) annually. Table 6 lists the hydroelectric projects in Alaska that have been developed. -24- -G2- NORTHWEST Qa PORCUPINE 21 SUBREGIONS hameant 20 WOODCHOPPER 22 - JUNCTION ISLANO 12 FORTYMLE 23 \7 \ . : —» BIG DELTA 16 . . \ 18 censree 17 \ HEALY 15 JOHNSON 18 CARLO 14 USKASNA 13 4M. CATHEORAL_BLUFFS 19 nove WATANA 46 (DENALI 48 x Numbers refer to omcts keted on Summary of Aleske Lower Priced Mydrostectric oevi. CANYON 45 TOKIGHITNA 40 y REO aa VEE 47 LANE 43 LOWER CHULITNA 39.59) SB KEETNA 4 SKWENTNA 38 WHISKERS 42 r* TALACHULITNA 37 MYENTNA 36 urven ecfuda 35 8 + Potentials /. CHAKACHAMNA 33 i aN mone £ B / ain MILLION DOLLAR 52 .W_/? be / SNOW 49 re, CHILK: “Ke rere NUYAKUK “e- Se) OO 32 rN. ~ pola 280 * IoD 8 Cass ay eye = a ten os Nee gore DIVISION 57, QWEETHEART FALLS $0 5 re he MAKSOUTOF RIVER 7 Chart 6 - Undeveloped Hydroelectric Resources of Alaska Table 6. Hydroelectric Projects Operating in Alaska INSTALLED AVERAGE ANNUAL DATE REGION SERVICE AREA PROJECT CAPACITY (MW) GENERATION (MWh) CONSTRUCTED South Central Anchorage Cooper Lake 15.0 42,000 1961 Anchorage Eklutna 30.0 147,875 1955 Kodiak *Terror Lake 20.0 139,700 1984 Valdez *Solomon Gulch 12.0 55,000 1982 Southeast Juneau Annex Creek a.0 27,500 1915 Juneau Gold Creek 1.6 6,000 1904 Juneau Snettisham 46.7 211,000 1973 Juneau Upper Salmon Creek 2.8 14,000 1914 Ketchikan Beaver Falls 5.4 36,200 1947 Ketchikan Ketchikan Lakes 4.2 16,400 1957 Ketchikan Silvis 2.2 11,000 1974 Ketchikan *Swan Lake 22.0 88,000 1984 Metlakatla Purple Lake 3.0 15,800 1956 Pelican Pelican Creek 0.5 2,500 1940 Petersburg Crystal Lake 1.6 11,000 1956 Petersburg/ Wrangell *Tyee Lake 20.0 133,000 1984 Sitka Blue Lake 8.0 39 ,800** 1961 Sitka Green Lake 18.5 46,500** 1982 Skagway Dewey Lakes 0.7 700 1909 * APA Projects. ** Firm energy rather than average annual generation. =26- WIND Wind power, suitable for generation of energy in the form of elec- tricity, heat or mechanical power, occurs most favorably in Alaskan coastal areas and mountain passes (Chart 7). Wind speeds and air density tend to increase in the winter months when most communities experience their peak electrical and heating demand. During the past few years, interest in wind generation has increased. In order to achieve sufficient economies through the use of wind power, average speeds of 13 miles per hour or greater are recommended. The National Weather Service and the University of Alaska, Arctic Environmental Information and Data Center, are good sources of information. A good survey resource is the Battelle publication, "Wind Resource Atlas Volume 10 - Alaska." Although assembled from extrapolated information, the Atlas does provide a good summary. Most wind data is provided from airports which are normally sited in low wind areas. The State does not currently have a program to obtain specific data although the APA does accumulate incidental data in its reconnaissance work. Generally speaking, at least one year of monitoring data is needed in order to assess the potential performance of a wind generator. GEOTHERMAL Alaska has an abundant supply of geothermal resources. Over 100 surface manifestations include hot springs, fumaroles, mud pots, and wells have been identified. Over 11 million acres in the State have significant geologic evidence for geothermal energy development. These are identified in DNR's "Geothermal Resources of Alaska," map published in 1984. To date, the quantity of power produced from geothermal has been limited. Over the past several decades, geothermal heat has emerged as a competitor with other forms of energy for both electrical generation and a variety of direct-use applications. Previously, its practical use was limited to its alleged curative properties for various human ailments and to its availability in remote areas for natural hot baths. Because the earth is composed largely of molten rock beneath several miles of solid crust, one could conceivably reach extremely high temperatures by drilling deep enough anywhere in the world. However, the normal temperature gradient of the earth's crust produces only a 2°F increase for every 100 feet of depth. Consequently, the drilling depth that would be required in most regions of the world prohibits the economical extraction of geothermal energy. In certain areas -- usually areas associated with volcanism, earthquakes, and other tectonic activity -- “geothermal anomalies" produce temperature gradients that are much higher. These near-surface, high-temperature resources coupled with fluid accumulations constitute reservoirs which none -82- Chart 7 - Annual Average Wind Power in Alaska Classes of Wind Power Density at 10 m and 50 m(a) 10 m (33 ft) 50 m (164 ft) Wind Wind Power Wind Power Power — Density, — Speed, () Density, Speed,(b) Clays _wattsfm2 m/s (mph) _watts/m2__ m/s (mph) 0 0 0 0. 100 — 4.4 ( 9.8) 200 ——5.6 (12.5) 1s0-——5.1 (11.5) 300 — 6.4 (14.3) 200 ——5.6 (12.5) 400 ——7.0 (15 7) 250 ——6.0 (13.4) ——— 500 ——7.5 (16.8) 300 — 6.4 (14.3) 600 ——8.0 (17.9) 400 ——7.0 (15.7, ——— 800 —— 8.8 (19.7) —— 1000 —— 9.4 (21.1) ——2000 ——11.9 (26.6) tapelanon of wind speed baved on he 1/7 power law ates wind speed is based on Rayleigh speed distubution of equiva sty. Wind speed ty tor standard yeatevel mie power density, speed incieares font mean wind power di wns La maint cond could be attractive alternative energy sources. In order for a geothermal prospect to be viable for development, it must provide the following: 0 A relatively shallow heat source. 0 A fluid to act as the heat transfer medium. 0 Reservoir conditions capable of delivering adequate fluid to the surface. 0 A market for the energy produced. Geothermal fluids can be categorized into four’ types: (1) high-pressure steam, (2) two-phase fluids consisting of a mixture of liquid and vapor, (3) high-temperature liquids (300-700°F), and (4) low temperature liquids (under 300°F). High-pressure steam can be used directly to drive electric turbines. It has been used for that purpose in Italy since the beginning of the century and, more recently, at The Geysers in northern California. The capacity for electrical generation at The Geysers is more than sufficient to meet the current power needs of the entire San Francisco metropolitan area. Both high-temperature liquids and two-phase fluids can also be used for electrical generation when the liquids are of sufficient high temperatures to "flash" into steam when their pressure is lowered. Several Pacific Rim countries have embarked on ambitious programs of geothermal power development using these relatively abundant resources. Low-temperature liquids can be used for a variety of direct-use applications such as space heating, agriculture, aquaculture, light industry, and recreational purposes. Such resources have _ been utilized worldwide for many centuries. A significant factor to consider in geothermal development is that power facilities or direct-use applications must be located near the resource. Due to its potential for heat losses, geothermal energy cannot be transported great distances. The use of hot springs in Alaska for health and recreational purposes is well documented. Commercial baths and spas have been developed at numerous sites in southeast and northcentral Alaska. At least six of these establishments have also used low-temperature geothermal fluids for other direct uses such as space heating in lodges, cabins, and greenhouses. -29- The State of Alaska has conducted three geothermal drilling programs since 1979. The first was at Pilgrim Hot Springs on the Seward Pen- insula where six wells ranging from 60 to 1,000 feet were drilled between 1979 and 1982, penetrating a 195°F (90°C) shallow reservoir. In 1980, two shallow (50-foot) geothermal wells were drilled at Summer Bay on Unalaska Island where 122°F (50°C) fluids were encountered. Since 1981, a geothermal exploration program has been ongoing at Makushin Volcano on Unalaska Island. There, a two-phase, highly productive, geothermal system was discovered at 1,950 feet with a 380°F (190°C) flowing temperature. This resource is capable of supplying several times the electrical energy needs of the island for the foreseeable future. A feasibility study is needed to determine whether geothermal energy development at the site is economically and environmentally sound. In addition to the State projects, the U.S. Department of Navy has been investigating the possibility of developing geothermal resources for electrical generation on Adak Island. The Navy is planning a geothermal exploration program for 1985. Recent advances in technology and worldwide successes in geothermal resource development assure geothermal energy a role as a viable com- petitor among the variety of energy options and alternatives. With Alaska's abundance of geothermal potential, this alternative deserves serious consideration. -30- SOLAR Solar energy has good potential for use as an additional source of energy in Alaska. Varying levels of daylight experienced in Alaska through the seasons actually permits 230 hours more sunlight in Alaska than at the equator each year. Solar energy production has the ad- vantage of being clean, safe, and could actually become cheaper with time as technology advances are made. Drawbacks of solar include being out of phase with peak heating requirements and lack of full time reliability due to storms or changing seasonal lighting conditions. These drawbacks are less important if solar is used as part of an integrated energy management system. Although the actual experience with solar energy in Alaska is limited, solar can be a valuable energy resource. Solar energy can be used in one of four forms: passive heating, active heating, photovoltaics, and daylighting. Passive solar applications capture heat without the need for auxiliary energy to move the heat. Chiefly used for space heating, passive solar technologies move heat by conduction, convection or radiation. Buildings use south-facing glazing to capture solar radiation, essentially making the entire structure a simple solar collector. Active solar technologies employ an auxiliary energy source to move heat from where it is collected to where it is used or stored (usually by a pump or fan). Active solar technologies are used for providing domestic hot water in Alaska. Active systems are less economic than their passive counterparts because of the extreme annual variation of available solar radiation in Alaska. Thus, it is rare to obtain more than 25 to 35 percent of the annual heating requirements for even a highly insulated structure. Capital costs of active heating systems are often very high. Solar energy can be directly converted to electricity using photovoltaic cells. This application is widely used where small amounts of power are needed in remote Alaskan locations. Examples include battery charging of railway signals and fish counting machines. Wider use is anticipated as system designs improve and production costs are lowered. A more obvious and often overlooked aspect of solar is the use of visible solar radiation to reduce or eliminate the need for artificial lighting in a building. Referred to as daylighting, this use can provide substantial economic benefit by reducing the need for costly rural electrical lighting. Research by the University of Alaska and the Department of Transportation and Public Facilities (DOT&PF) on the optimum use of daylighting in Alaska has only recently begun, but it is one of the oldest and most common uses of solar energy. -31- TIDAL The ebb and flow of the tide produces kinetic energy which can be harnessed to produce electricity if there is sufficient tidal range. However, the density of the kinetic energy in tidal currents is rela- tively low and harnessing this energy source is capital intensive. A conventional tidal power project includes a barrage, to create suf- ficient differences in elevation between sea level and basin level, and hydraulic turbines which generate electricity. The simplest and least expensive method to generate tidal power is by means of a single impounding, single effect basin. The basin is filled by open sluiceways during the rising or flood tide. Releasing the impounded water through turbines during the falling or ebb tide provides the generated power. The single effect operation can be modified to a double effect system by using turbines that are capable of generating power on both the ebb and flow tides. Although there are still intervals where power is not generated, the total generation time during each tide is lengthened. Because of less efficient design, the double effect turbine configur- ation will not double the amount of energy generated. Tidal power can be retimed to provide firm power. This is accomplished by using a portion of the generated power to pump water to separate basins. This water would be released and power generated, when there is insufficient difference in elevation between sea level and basin level to generate power. The principal tidal resource in Alaska is found in the Cook Inlet area which has the second highest tides in the world. Tidal power options have also been evaluated in Southeast Alaska. Cook Inlet is a major tidal estuary which is approximately 180 miles long and ranges in width from approximately 80 miles near its mouth to approximately 20 miles at the confluence of the Knik and Turnagain Arms. The most recent evaluation of Cook Inlet tidal power, "Preliminary Assessment of Cook Inlet Tidal Power" by Acres American, Inc. in September 1981, identified 16 sites that have potential for a tidal power plant (see Chart 8, and Table 7). Some of these sites could produce more electricity than what is currently consumed in the Anchorage area. In Southeast Alaska, a 1981 report by the International Engineering Company titled "Angoon Tidal Power and Comparative Analysis" indicated less economic potential for tidal power than in potential Cook Inlet applications. -32- Chart 8 - Potential Tidal Power Sites in Alaska SITE LIST . PORT GRAHAM _ KACHEMAK BAY (1) KACHEMAK BAY (2) ILIAMNA BAY CHINITNA BAY . TUXEDNI BAY ANCHOR PT FORELAND EAST/WEST . FORELAND NORTH . FIRE ISLAND/KNIK _ FIRE 1SLAND/ TURNAGAIN . POINT MACKENZIE . CAIRN POINT . EAGLE BAY 15 RAINBOW 16. SUNRISE wErNMaun — COOK INLET TIDAL POWER d 4 OFFICE OF THE GOVERNOR 1QOMISELOOVIA Ki STATE OF ALASKA PPA, PORT GRAHAM x @' CANDIDATE SITES Table 7. Potential Locations for Tidal Power Plants -34- WOODNDNHWNHHE oe Initial Tidal Estimate of Range Net Energy Site (ft) (kWh x 10°) Port Graham 14.4 117 Kachemak Bay (1) 15.5 3,730 Kachemak Bay (2) 15.5 2,230 Iliamna Bay Ze 120 Chinitna Bay 13.0 408 Tuxedni Bay/Snug Harbor 3 484 Anchor Point 14.5 63,700 Foreland East/West eS) 39,500 North Forelands 19.0 32,800 Knik/Fire Island 24.4 7,400 Turnagain/Fire Island 25.0 16,600 Point MacKenzie (A557) 6,000 Cairn Point 26.3 5,500 Above Eagle Bay/Goose Bay 27.6 3,500 Rainbow 27.5 3,000 Sunrise 30.3 1,900 BIOMASS/WOOD The term biomass traditionally includes wood residue, municipal solid waste, and agricultural products including fish processing and animal wastes. Peat is sometimes loosely classified in the biomass area. Alaska has tremendous biomass potential, particularly in the forestry area. Alaska's timberlands have the potential to produce an array of finished lumber products and provide waste material for energy con- sumption. Interior Alaska alone has 22.5 million acres of commercial forest land. In 1983, DNR estimated that of the 22.5 million acres of interior forest land available for commercial use, 10.2 million acres were State-owned, 7.6 million acres Native corporation owned, and 4.7 million acres owned by others. However, the majority of this timber is not accessible to real markets because of geography, climate, and the lack of processing facilities in the State. In spite of this, 262 million board feet of logs were harvested in Alaska in 1983, resulting in production of 146 million board feet of lumber, 240,000 short tons of pulp, and 7,000 short tons of chips. Additionally, Native corporations exported 233 million board feet of logs that year. There are more than 240 sawmills in the State with a total annual production capacity of 532 million board feet. Of these, only 30 operate year-round and the remainder are seasonal or _ sporadic operations. Operational mills include two pulp mills with a capacity of 400,000 short tons of pulp. Wood wastes comprise a potentially significant energy resource. These wastes include unusable portions of the tree, such as bark, small limbs, chips and roots; waste from logging and milling operations and wood from land clearing for agriculture lin the Delta Junction area alone this could potentially be 500,000 acres by 1990). Rotting, diseased or burn- killed wood and driftwood also add to the State's biomass resource base. Periodically, hundreds of acres of forest lands are burned to improve moose habitat. If this wood were harvested instead, it would provide a potential energy resource as well. Several sawmills in Alaska currently use mill waste to assist in pro- viding heat and electricity for plant operations and others are planning to use it. Louisiana Pacific Corporation in Ketchikan and Alaska Lumber and Pulp in Sitka both utilize wood waste to assist in the production of process steam and electricity. Alaska Timber Corporation in Klawock is currently using waste wood to fuel a 2,000 kilowatt steam generation plant to provide for its sawmill's electrical needs. Plans to develop a wood waste plant in the southeast community of Haines have been initiated. The plant is cur- rently proceeding with a project to use waste wood products to supple- ment electrical generation. -35- To date, the State has not explored in depth the energy production potential of other biomass resources in the State. For example, fish processing, agricultural and animal wastes are areas that could con- tribute to the State's biomass resource base. Because of the economics associated with the conversion processes required to turn these wastes into energy, it may be some time before the State engages in specific projects to demonstrate the usefulness of this resource. Use of municipal solid waste (garbage) and organic waste such as sewage, provide another potential biomass resource that can be used locally. The Municipality of Anchorage, for example, has cut operating costs through sewage treatment plant modifications, using organic waste to assist in providing energy for waste incineration and plant space heating. Wood is also used for space heating in many parts of Alaska. The 1983 Long Term Energy Plan estimated that 181,000 cords of wood were used for heating, and this amounted to one percent of Alaska's total energy consumption. About 40 percent of that consumption was in Fairbanks, 40 percent in all Southeast, and the balance spread statewide. Recent data indicates decreased wood consumption from the time of the 1983 Plan. Firewood removal from National Forest Service lands from October 1982 to September 1983 totalled 11,226 cords of wood. State lands provided an additional 38,890 cords of wood. This equals a total Btu energy equivalent of 860 billion Btu's. -36- CONSERVATION Energy saved through conservation is one method to provide more energy service from a given level of power, and represents one of the more accessible energy resources available in Alaska. Conservation includes improvements brought about through increasing thermal efficiencies in buildings, power generation efficiencies for electrical production, increased miles per gallon in transportation and changes in consumer attitudes on energy use. Thus, conservation offers potential benefits through more comfortable living accommodations with lower life cycle costs and reduced levels of energy spending. BUILDINGS Building insulation is one form of conservation that leads the list in providing maximum long-term energy savings for minimum investments. Increased levels of building insulation and properly installed air/vapor barriers lead the list of conservation measures incorporated in building standards developed by many states in cooperation with the conservation industry. Such standards do add from five to eight percent to building costs, but are quickly returned through reductions in heating costs by as much as 80 percent compared to similar construction not using such standards. There are many simpler forms of energy conservation. They include insulation of hot water heaters, caulking and weatherstripping, and the use of clock thermostats for heating units like furnaces or boilers. Attitude changes, the least expensive means to conserve energy, allow people to adjust their use of energy through simple lifestyle changes. These approaches tend to be most significant when addressed by educational programs which provide factual information and reinforcement for these behavioral changes. POWER PRODUCTION Production of electricity requires a substantial amount of fuel. In the production of electricity, approximately two-third of the total Btu's available from the fuel is lost to waste heat. By installing various cogeneration options, the waste heat can be captured for increased generating capacity or for use in space heating. Major examples include the development of power from waste heat to drive steam turbines in the Anchorage area, where Anchorage Municipal Light and Power produces 120,690,000 kWh's per year and Chugach Electric saves an estimated 2,900,000 MCF of natural gas per year. In rural applications, jacket waste heat from diesel generators can readily be used for space heating of large buildings in proximity to the power house. Village studies have emphasized the use of properly sized generators as well as better maintenance procedures to increase efficiency. Better quality transmission cable is also an option in electrical system designs for the reduction of line losses. ag7> The direct use of fossil fuels for heat can produce major energy savings. Because a gas or oil furnace or boiler can be designed to achieve efficiencies of up to 90 percent (versus the 30 percent in electrical generation), the use of this fuel for space heating is encouraged. It is estimated that over 100 MW of peak electric demand in the Anchorage area could be deferred with the reduction of electric space heating. Additionally, furnace and boiler retrofits can account for an increased energy output of 15 to 20 percent. TRANSPORTATION & COMMUNICATION Alaska's transportation sector uses almost one-half of the total fossil fuel consumed in the State annually. Federal regulations and increased consumer demand for fuel efficient cars have increased motor vehicle performance. Better roads and timed lighting signals have reduced stop-and-go conditions as well. Consumers are becoming more aware of the savings in transportation fuel than can be derived from a well tuned car. Carpooling programs in Anchorage and modern mass transit systems in Anchorage and Fairbanks have also helped reduce transportation fuel use. Travel by air and sea also consume a substantial amount of transporta- tion fuels. Small aircraft and larger jet aircraft have increased their efficiency through engine modifications, adjusted flight schedules to accommodate an optimum number of travelers per mile and purchases of more efficient aircraft. Boats, from pleasure craft to the larger fishing and transport vessels, have also increased conservation efforts by increasing efficiencies in power packages and design. As telecommunications improve in Alaska, the need for face-to-face contact will be reduced. Savings in transportation fuels will result. Improving methods of verbal and written communication through the electronic media will also reduce the need for travel. -38- ENERGY TECHNOLOGIES Energy technologies provide the bridge between energy supply and demand. Energy technologies refers to those devices, systems or pro- cesses which convert an energy resource into some beneficial product or end-use. For instance, an oil burner converts oil into space heat and a coal-fired steam plant converts coal into electricity. An understanding of the energy technologies that are available is essential to an energy plan since it is often the selection and development of these technologies which transforms energy policy into achievement. There are a vast number of energy technologies that are either com- mercially proven or in some phase of development. Not all of these technologies are applicable or are presently being used in Alaska. In order to minimize redundance with other technical reports, this review will describe only those energy technologies that are used in Alaska. More expansive information on these and other emerging technologies, such as fuels cells and fluidized bed boilers, which may have future application in Alaska, can be found in: ° Assessment of Ener Technologies, published June 1983 by the Alaska Department of Commerce and Economic Development; 0 Energy Alaska by Neil Davis, published 1984 by the University of Alaska Press. Since this year's energy plan considers energy conservation as a re- source and gives it separate treatment, energy conservation measures will not be considered under energy technologies. Additionally, energy technologies for transportation have not been of significant interest to Alaska. Most engines used for transportation are produced for mass markets. Alaska's role is one of being a consumer rather than a producer. ELECTRICAL PRODUCTION The following is a description of the electrification technologies that are being used in Alaska. These are categorized under the three topical headings of fossil-fuels, renewable energy and transmission systems. Total electrical capacity for Alaska from these electrification technologies in 1983 totaled 2,189 MW (Table 8). FOSSIL FUELS Diesel engines are the principal source of electric generation for most of Alaska's rural villages and many of its smaller cities, with a nameplate capacity in 1982 of 265.5 MW (Table 9). Although the cost of power from diesel generators is expensive, it is the most practical source of generation for most rural villages. Diesel engines should continue to play an important role in providing Alaska with electricity. To reduce costs, many diesel generation systems in Alaska are being considered for the installation of waste heat facil- ities. The waste heat is used to offset the consumption of oi] needed to provide space heating (see Energy Conservation Section for more details on waste heat). -39- Table 8. 1983 Electric Generation Data for Alaska Generation Installed Net AREA Source Capacit. Generation Chia) (MWh) Southeast Utility 215,747 597,759 Industrial 76,290 299,120 Total 292,037 896,879 Southcentral Utility 848,255 2,655 ,641 Industrial 127,191 360,592 Military 56,726 169,071 1,032,172 3,185,304 Yukon Utility 304,152 521,050 Industrial 58,545 118,322 Military 82,035 238,112 Total FAG 732 877,484 Arctic Northwest Utility 41,104 99,059 Industrial 283,247 829,830 Military 6,940 11,496 Total 331,291 940 ,385 Southwest Utility 38,494 76,745 Industrial - - Military 50,710 113,975 Total 89,204 190,720 Alaska Total Utility 1,447,752 3,860,254 Industrial 545,273 1,607 ,864 Military 186,411 532,654 GRAND TOTAL 2/ 2,189,436 6,090,772 1/__ From Alaska Power Administration's "Alaska Electric Power Sta- tistics, 1960-1983", September 1984. 2/ Includes 2,500 kW installed capacity and 5,500 kWh net generation from miscellaneous sources. -40- Table 9. Nameplate Capacity of Diesel Generation in Alaska - 1982 VY Region capa Net parpration Southeast 81.3 112.8 Southcentral 64.5 96.0 Yukon 49.3 186.8 Arctic & Northwest 32.0 70.6 Southwest _ 38.4 _76.7 Total 265.5 542.9 1/_ From Alaska Power Administration "Alaska Electric Power Statistics: 1960-1983", September 1984. 241 < Alaskan coal-fired steam plants have a nameplate capacity of 87 MW. All of this capacity is in the Fairbanks area. The installations using this technology are as shown in Table 10. With the exception of the Golden Valley Electric Association (GVEA) unit at Healy, each of these units provide district heating. The source of coal in each case is the Usibelli Mine near Healy. Alaska has an abundance of coal resources and additional coal-fired steam plants are a distinct possibility. New projects that are being planned include an improved $7 million coal handling facility for the Fairbanks Municipal Utility Service plant. Additional coal-fired capacity in the Railbelt will be largely influenced by the ability to finance construction of the Susitna Hydroelectric Project. Coal-fired steam plants have been considered for the rural areas of Alaska, although economies-of-scale are a potential problem. The Alaska Power Authority (APA) has investigated the possibility of a coal-fired steam plant in Kotzebue which would include a district heating system. COMINCO, who plans to develop the Red Dog Mine near Kotzebue, is also considering coal as a source of electricity. COMINCO is evaluating the potential of a fluidized bed system which would be a new technology for Alaska. Combustion turbines are another source of power generation in Alaska. In 1983, the nameplate capacity for combustion turbines in Alaska totaled 901.6 MW which generated 2390.8 GWh of energy. In addition, Chugach Electric Association is considering installation of an 80 MW combustion turbine at Beluga. The Alaska Electric Generation and Transmission Cooperative (AEG&T, cooperative of Homer Electric and Matanuska Electric Associations) is installing a 39 MW gas turbine Plant in Soldotna. Future additions hinge on the development of the Susitna Project and the availability of natural gas after the turn of the century. Natural gas is used to drive electric generating turbines in the Railbelt area. In the Anchorage/Kenai Peninsula area, gas turbines provide both peak and base load and in 1982, made up 86% of the installed capacity for utilities. In the "Lower 48," gas turbines are infrequently used for base load since natural gas tends to be an expensive fuel and simple cycle gas turbines are not as efficient as more conventional coal-fired power plants. However, the low price of Cook Inlet natural gas, the low installation costs of natural gas generators and the use of combined cycle turbines has made combustion turbines an economically attractive choice for Anchorage utilities. Combustion turbines are also used by the industrial sector. In 1982, the nameplate capacity for Alaska's industrial sector totaled 253.7 MW which was used to generate 943.7 GWh of energy. Most of this capacity is associated with the oil and gas industry. These totals were included as part of the above figures in 1983. -42- Table 10. Coal Fired Steam Plants in the Fairbanks Area - 1984 INSTALLATION NAMEPLATE AVERAGE ANNUAL unt 2/ DATE CAPACITY (MW) HEAT RATE (Btu/kWh) GVEA-Healy 1967 25.0 13,200 FMUS Chena #1 1954 5.0 18,000 FMUS Chena #2 1952 2.0 22,000 FMUS Chena #3 1952 1.5 22,000 FMUS Chena #5 1970 20.5 13,320 U of Alaska 1980 13.0 12,000 Ft. Wainwright 1953 20.0 19,000 1/ Battelle Northwest Report "Existing Generating Facilities - Volume VI," September 1982 2/ GVEA - Golden Valley Electric Association FMUS - Fairbanks Municipal Utility Service NOTE: No change to 1984 - personal correspondence. -43- Organic Rankine cycle generators act as a cogenerator utilizing the thermal energy in waste heat streams to generate electricity. These have recently been tested for Alaskan applications. Approximately 15-25% of the waste heat can be converted to electricity without any increase in fuel consumption. The waste heat can come from a thermal power plant, such as a diesel generator, or an industrial process. Organic Rankine cycle generators can also be used as a primary source of generation which has applicability in remote locations. The Alaska Department of Transportation and Public Facilities recently completed a demonstration project where organic Rankine cycle generators, fueled by propane, were used to provide power for a runway lighting system in Noorvik. The project was considered a success both economically and technically. This experience could lead to further applications in Alaska. RENEWABLE ENERGY Renewable energy resources of hydroelectricity, wind, and solar power are available in Alaska using proven and off-the-shelf technologies. Hydroelectricity Hydroelectricity, as most often developed in Alaska, takes advantage of naturally occurring elevated lakes. This usually requires a relatively small (hence inexpensive) dam for the size of reservoir and a small amount of head or vertical distance from the water source to the generator. With the Lake Tyee Project, a tunnel was used for a lake tap which bypasses the need for a dam. This technique has been widely used in Scandinavian countries and could find further application in Alaska. More so than other energy projects, the design and feasibility of a hydroelectric project is largely determined by the site. Topography, precipitation and geotechnical considerations strongly influence the size of the project. Table 6 earlier listed utility system hydroelectric projects that are operating in Alaska. In addition, there are a number of privately owned small scale hydroelectric projects. The Alaska Power Authority (APA) is investigating the feasibility of a number of potential hydroelectric sites. Two of the sites, Susitna River and Bradley Lake, have advanced to the stage of a Federal Energy Regulatory Commission license application. Wind During the past few years there has been considerable interest in Alaska regarding the potential for wind generated electricity. Both the State and the private sector have installed a number of demon- stration and commercial systems. In order to survey the number of wind generators in operation and determine their effectiveness, the Department of Commerce and Economic Development undertook a study -44. ("Alaska's Wind Energy Systems," by Steve Konkel, January, 1984) which reported the existence of at least 140 wind generators in Alaska ranging from 1 kW to 20 kW. Although there was considerable variance in the performance, the study concluded that with current technology, it appears that wind generators can be economically feasible for rural Alaska if the wind regime is suitable and the installation and operation properly managed. Future interest in wind generators by State agencies will probably concentrate on operational systems for utilities; i.e., interfacing wind farms to diesel generators, rather than demonstration projects. In order to avoid frequency and voltage fluctuations within the utility, wind generators must have various load management options incorporated in their installation. These may include “energy dumps" such as water or space heating applications which will absorb excess capacity which may occur in high wind situations. The single greatest deterrent to future development is the small electrical load which exists in our strongest wind power sites. It is a deterrent to third-party financing and requires special technical solutions as well. Solar Applications of solar technology in Alaska range from the simplest form of passive solar heating to the more technologically advanced use of photovotaics for the production of electricity. Two references best explain the pros and cons of solar use in Alaska, they are: oO A Solar Design Manual For Alaska by Richard Seifert, published July IT by the Institute of Water Resources, University of Alaska, Fairbanks. 0 Assessment _of Energy Technologies, published June 1983 by the Alaska Department of Commerce and Economic Development. Photovoltaic systems are commercially available in Alaska, but the technology is still undergoing development by manufacturers and research institutions. New developments are needed to reduce installation costs and to increase market penetration. Besides installation costs, a key factor in determining the economic feasibility of a photovoltaic system is the solar insulation rate which is measured in British thermal units per square foot per day. The Geophysical Institute at the University of Alaska-Fairbanks has an ongoing program to measure insulation values. Photovoltaic systems have had successful, albeit limited, application in Alaska. Photovoltaic systems are being used in low wattage, remote uses such as fish-counting equipment, communication equipment and railroad crossings. Also, innovative individuals in Alaska have used photovoltaic systems to supplement other sources of intermittent power such as wind generators. A Mt. McKinley resident only recently was given a national award for an integrated stand alone system of wind and photovoltaics. -45- TRANSMISSION SYSTEMS Chart 9 illustrates the transmission lines that currently exist in Alaska and those that are under construction. Most of the existing transmission lines were built to connect a source of power, such as the Snettisham Hydroelectric Project, Beluga Gas Turbines, or Healy Coal-Fired Power Plant, to a local load center. During the past few years, greater emphasis has been placed on de- veloping interties between utility systems and/or load centers. The interties allow sharing of capacity and exchange of energy. Also reliability can be increased because a load center is less dependent on the operation of a single power plant. The most significant intertie effort is the $122.5 million trans- mission line from Willow to Healy that has been built by the APA. This transmission line will be operated at 138 kV, but can be upgraded to 345 kV. The intertie will provide Fairbanks utilities with economic energy being generated by Cook Inlet natural gas and allow Anchorage utilities to use the reserve capacity that exists in Fairbanks. The development of the intertie has necessitated closer cooperation among utilities in the Railbelt area. The State has also given attention to creating interties between util- ities in rural villages. A single wire ground return system has been built as an alternative to conventional transmission systems. The interties serve a traditional purpose of using a larger diesel generator at more optimum capacity -- in this case one powerhouse serves two communities with the idle plant as backup. Two single wire ground return systems have been completed and are located between the rural communities of Kobuk-Shungnak and Bethel-Napakiak. The APA is considering the possibility of an intertie in Southeast Alaska. One consideration is to intertie the Lake Tyee Project to Ketchikan. Lake Tyee has surplus capacity, and Ketchikan anticipates the need for additional capacity, particularly when the U.S. Borax Company begins development of a molybdenum mine at Quartz Hill. The large power needs of the Quartz Hill Project, up to 44 MW for the first phase, have opened consideration of other sources of power that are available, particularly the opportunities that exist with B.C. Hydro (British Columbia, Canada) which has significant amounts of unused hydroelectric capacity. The Yukon Territory also has unused hydroelectric capacity which it may want to sell to Alaska. The APA is beginning to investigate the feasibility of an intertie which would connect Southeast Alaska to British Columbia and the Yukon Territory. New technological developments with DC transmission lines could be a significant factor in determining the feasibility of an intertie through Southeast Alaska. -46- | Under Const uction Pawitio r wy Fa Satine ue : 115KV>-ePalmer YB oriivine 7 ity A Q ih , \ —. iS 6o/138KV ~ SF Ty00 h Hydro y 7 cK Chart 9 - Existing Transmission Systems Scale in miles 100 150 A.PA.-Sept, 1984 Ge SPACE AND WATER HEATING Space and water heating developments are important to the State because they help determine future demand for various fuels. Space heating combustion technologies that are used by residential and commercial facilities are largely the result of economics, product availability, and awareness of options. Some of these developments are worthy of elaboration because of their potential for greatly reducing demand of finite and expensive fossil fuels. OIL AND GAS BURNERS Oil and Gas fired boilers burn natural gas and fuel oils and use the heat of combustion for hot water or steam production. The advantages over solid fuel counterparts include lower capital costs, minimum operator attention, minimum maintenance, and higher reliability. Three areas of interest where fuel savings of 20 percent or greater are the norm include: the use of "pulse combustion" furnaces and boilers and "heat extractors" in natural gas combustion; the use of "flame retention burners" in oi] furnaces and boilers; and the use of smaller kerosene/oil unit heaters in replacement of oi] pot burners. The pulse combustion burner incorporates the use of a _ pressurized chamber and spark to produce heat, unlike the direct combustion of conventional appliances. These units were originally developed as boilers, but are now available as forced air furnaces with various design modifications. Fuel efficiencies between 85 and 95 percent are routine, compared to seasonal efficiencies of 65 to 70 percent for conventional equipment. The current market for their technologies has been relatively low due to their higher up front costs. Heat extractors are also receiving more attention. They are essentially a chamber for return air (or water, in the case of a boiler), to be preheated by captured waste heat otherwise lost up the chimney. Oil burners are predominately equipped with flame retention burners. Newer burners are quite efficient, and those manufactured before 1978 can be retrofitted to gain similar efficiencies for usually under $500.00. 0i1 pot burning stoves have been widely used in rural Alaska, but because of the large air supply demanded by combustion, much of the heat generated is lost up the chimney. These are slowly being replaced by more efficient, compact unit heaters with capacities of 30,000 Btu's and more. Kerosene is the designated fuel, but high grade fuel oil processed in Alaska is reported to work without negative effects and could become a lower cost fuel substitute. Efficiencies for these compact units are 85 percent, compared to the pot burner's 40 to 60 percent. -48- WOOD COMBUSTION BURNERS Wood burning efficiencies have been primarily improved through air-tight construction of combustion chambers and dampening adjustments, and the use of catalyst conversion systems. Additionally, combustion of volatile exhaust gases and better designs in heat exchangers add to the efficiency of wood burners. The catalytic converters alone can increase efficiencies to 70 percent, a 20 percent improvement over most stoves. Drawback of these advanced designs include higher initial cost and the expense for replacement of the catalytic converters should they be damaged or worn out. ELECTRICAL RESISTANCE Electrical resistance is used mainly for heat and offers maximum po- tential when used in applications that convert electricity directly into heat. Applications from direct current generation from wind or solar power production units are primary uses for this energy technology. Electrical resistance heat is also used in residences for heating using alternating current electricity. Electrical resistance is a relatively easy use of converting electricity to heat since it requires simple installation, minimum maintenance, infrequent operator attention, and easy repair. This technology may not be as efficient a heating source as other technologies. -49- HEAT PUMPS A heat pump is a thermodynamic refrigeration cycle machine that moves heat from a low temperature source to a higher temperature sink by the addition of heat. When air conditioning or refrigeration is wanted, the heat pump moves unwanted heat to a higher temperature sink. When warmer temperatures are wanted, the heat pump supplies the energy by drawing it from a low temperature source. There is relatively little difference between the operation of a refrigerator and a heat pump; the difference is entirely in the purpose of the process. The predominant use of heat pumps sold for commercial and residential purposes is for space heating in the winter and cooling in the summer. There are varying economies and configurations of heat pumps, with a similar variety of costs for operation and maintenance. Heat pump technology has achieved its widest commercial acceptance in Scandinavia where approximately 15,000 single family homes are heated by this means. The system incorporates a _ vapor-compression refrigeration cycle which extracts heat from a brine circulated through buried plastic pipe. In a condenser, the heated vapor liquifies and releases its heat to a third medium, either water or air, for space heating. Alaskan application of this technology is presented in "A Ground Source Heat Pump Demonstration" by H.C.S. Nielsen of the Geophysical Institute and John Zarling of the U.A. Department of Mechanical Engineering. This publication documents results of one season's test use of several off-the-shelf heat pump technologies. -50- SOLAR Passive solar use is one of the simplest forms of converting solar into useable forms of energy. Solar energy is transmitted to an interior space where it is used directly, allowing naturally occurring air currents to distribute the heat spacially, or through storage of the heat in some form of medium that permits its use at a latter time. The only maintenance involves preparing an insulated space to hold the collected heat and routine checks on the storage mediums. As outlined earlier, passive solar may also be considered as a means of saving other energy resources when it is used in "daylighting" situations, or using natural light instead of forms of generated light. In heating applications, passive solar has a varying cost/benefit ratio dependent upon the site conditions and the building heat load. Active solar systems are quite expensive and are less cost effective uses of solar energy. Active systems collect heat in one location and move it to another location through a series of pumps, valves, and storage tanks. INDUSTRIAL SYSTEMS Industrial energy systems are usually designed to produce steam and/or electricity. The source of energy and the technology for its utili- zation usually depends on the process being used. Frequently, waste products can be utilized as a source of fuel. For instance, cogener- ation technology can convert waste heat into electricity. Also, wood wastes can be used as a boiler fuel. Some industries use conventional technologies to self-generate electricity. In Alaska, fish processors often use diesel engines to generate their own electricity since their power needs are seasonal and greater than the capacity of many rural utilities. All of these have been discussed earlier. -51- ENERGY USE Alaskans consumed over 411 trillion Btu's of energy in 1982 which constituted the largest level of energy consumption in Alaska's 20-plus years of Statehood (Table 11). The industrial sector alone consumed 229.0 trillion Btu's or 56 percent of the total Btu's consumed in 1982. This was followed by transportation at 25 percent, commercial at 10 percent and residential at 9 percent (Table 12). CONSUMPTION BY SOURCE Residential energy consumption has increased about 5 percent per year since 1960. Residential sector consumption has increased from 8.1 trillion Btu's in 1960 to 38.8 trillion Btu's in 1982. The energy consumption budget has also changed during that time, shifting from 64 percent petroleum fuel in 1960 to 55 percent electricity in 1982. By 1982, natural gas had also become an important part of the residential energy budget, accounting for 27 percent of total energy consumed. Wood and coal were also known fuel sources, but the exact level of consumption of those fuels is unknown. The growth of energy consumption in the commercial sector has been around 10 percent per year since 1960. Natural gas was the dominant fuel used accounting for over 60 percent of the total 41.2 trillion Btu's consumed. Electrical consumption was 11.5 trillion Btu's and fuel oil 4.8 trillion Btu's. Commercial sector applications refer to businesses other than heavy industrial uses and use power mostly for space heating, lighting and small machinery. By far the largest impact on the Alaskan energy balance in 1982 was the industrial sector. Since statehood, industrial energy consumption increased from 17.1 trillion Btu's in 1960 to 228.9 trillion Btu's in 1982. Natural gas dominated the 1982 consumption picture, with 208.4 trillion Btu's used, accounting for 77 percent of Alaskan industrial consumption. Petroleum consumption was 36.3 trillion Btu's and electricity 16.3 trillion Btu's. Industrial consumption in Alaska directly increased and decreased with cyclic economic growth. The most dramatic increase occurred between 1981 and 1982 when consumption increased 100 percent, driven largely by increases in consumption of natural gas. Transportation continues to play a dominant role in Alaska's energy consumption, averaging one-quarter to one-half of the total energy consumed in the State annually. In 1982, petroleum was the primary fuel consumed (88 percent), but 300 billion Btu's of natural gas and 100 billion Btu's of electricity were also used. Total transportation consumption was 102.3 trillion Btu's in 1982, compared to 27.6 trillion Btu's in 1960, representing less than 2 percent increase per year since statehood. Consumption by aviation, marine and highway users are summarized in Table 13. -52- Table 11. Consumption of Energy by Source: Fossil Fuels and Electricity Combined af (Trillions of Btu’s) 1960 198019811982 Residential 8.1 34.4 33.4 38.8 Commercial 18 34.5 31.9 41.2 Industrial 17.1 138.7 109.2 228.9 Transportation 27.6 89.5 101.0 102.3 TOTAL 60.3 29731 275.2 411.3 y Information from U.S. Department of Energy, State Energy Data Report, Consumption Estimates 1960-1982. 353¢ Table 12. Consumption of Energy by Sector and Fuel Type for Alaska is (Trillions of Btu’s) 1960 1980 1981 1982 Residential Total 8.1 34.3 33.1 38.8 Coal 0.4 0.0 0.0 0.0 Natural Gas 0.2 8.1 8.1 10.8 Petroleum 2/ 5.2 7.0 5.4 6.8 Electricity 3/ 2.3 19.2 19.6 21.2 Commercial Total 7.5 34.5 31.9 41.2 Coal 0.8 0.0 0.0 0.0 Natural Gas 0.0 16.9 16.6 24.9 Petroleum 2/ 5.2 4.8 4.4 4.8 Electricity 3/ 1.5 12.8 10.9 11.5 Industrial Total 17.2 138.7 109.2 266.9 Coal 5.0 0.0 0.0 5.9 Natural Gas 1.9 102.4 70.1 208.4 Petroleum 2/ 9.5 22.9 23.2 36.3 Electricity 3/ 0.8 13.4 15.9 16.3 Transportation Total 27.6 89.4 101.1 102.4 Coal 0.1 0.0 0.0 0.0 Natural Gas = 0.1 0.3 0.3 Petroleum 2/ 27.5 89.3 100.7 102.0 Electricity 3/ * * 0.1 0.1 All Sectors Combined Total 60.3 297.1 275.2 411.4 Coal 6.3 4.7 5.6 5.9 Natural Gas 2.0 157.3) 125.1 244.4 Petroleum 2/ 47.4 129.4 138.4 155.2 4.6 Electricity 3/ 5.7 6.1 5.9 1/7 Information from U.S. Department of Energy, State Energy Data Report, Consumption Estimates 1960-1982. 2/ ‘Includes Distillate Fuel, Kerosene, and LPG. 3/ Electric sales and electric energy losses due to transmission gener- ation. * Less than 0.1, not included in totals. -54- Table 13. Total Reported Transportation Fuel Used in Alaska, 1981-1983 (Millions of Gallons) YEARLY 1981 19821983 AVERAGE Aviation 323.9 445.4 361.6 376.9 Marine 88.3 88.8 89.8 88.9 Highway $12.9 613.3 _ 611.7 _ 579.3 TOTAL 925.1 1,147;55 1,063.1 1,045.1 y Information from Alaska Department of Revenue and Alaska Depart- ment of Transportation and Public Facilities numbers. -55- CONSUMPTION/PRODUCTION BY FUEL TYPE Four major fuel types comprise Alaska's energy consumption and pro- duction picture. These are petroleum, natural gas, coal, and elec- tricity. The next sections quantifies recent data on the production and consumption of these four fuel sources. PETROLEUM Petroleum products are the most diverse form of energy consumed in Alaska (Table 14). In 1982, 27.4 million barrels (1.1 billion gallons) of petroleum products were consumed in 13 product forms. That consumption equates to 155 trillion Btu's, or 37 percent of the total Alaskan Btu consumption in 1982. Forty-two percent of that consumption is for jet fuel, 20 percent each for gasoline and distillate fuels, and the balance is consumed as other miscellaneous forms of fuel from kerosene to road oil. Daily consumption of these fuels averaged 75,000 barrels (3.15 million gallons) of oi] per day in 1982. Alaska's three petroleum refineries produced 104,764 barrels (4.4 million gallons) of refined petroleum products per day in 1982 (Table 15). Fifty-three percent of that production resulted in residual fuels, and the balance to the lighter, more easily used forms of motor and aviation gasoline, jet fuel and diesel fuel. Additionally, the MAPCO refinery in Fairbanks, which obtains crude oil directly from the Trans-Alaska Pipeline (TAPS), reinjects 30,000 barrels of residual oi] a day back into TAPS for mixing with regular crude oil destined for delivery to tankers in Valdez. Alaskan refineries produce 48,765 barrels of light distillates and 55,999 barrels of residual oil daily. Comparison of Alaska's 1982 production and consumption of refined petroleum products shows a net export of those products with some need for imports. Much of that production surplus results from inclusion of residual oi], which is mostly unmarketable in Alaska or reinjected into TAPS for export mix with crude oil. Despite Alaska's petroleum export capabilities, there remains a net deficit of refined products which is resolved by imports of those refined petroleum distillates. These imports average 15,034 barrels (631,000 gallons) a day. Predictions by the oi] producers estimate that fuel production from Alaska should remain strong through the rest of this century, although the actual level of crude oil production should continue to shrink during that time. -56- Table 14. Petroleum Use by Sector (Thousand Barrels) Residential Distillate Fuel Kerosene LPG Total Residential Commercial Distillate Kerosene LPG Motor Gasoline Residential Fuel Total Commercial Industrial 2/ Asphalt Distillate Fuel Kerosene LPG Lubricants Motor Gasoline Residual Fuel Road 0i1 Other Total 1960 866 36 902 268 130 464 868 47 878 90 229 344 1596 1980 1172 58 1230 577 10 258 849 307 1784 19 119 21 111 14 1425 3802 a 1981 910 41 951 532 250 789 289 2059 36 104 20 12 20 1270 3812 1982 1125 68 1193 481 24 12 349 869 388 2420 1238 129 18 14 1805 6014 -57- 1 Table 14. Petroleum Use by Sector Be (continued) (Thousand Barrels) 1960 1980 1981 1982 Transportation 3/ Aviation Gas 811 431 445 372 Distillate Fuel 528 2605 2489 1701 Jet Fuel 2251 9618 10876 11531 LPG 0 4 0 3 Lubricants 3 94 90 82 Motor Gasoline 1536 3306 4205 4726 Residual Fuels 15 0 7 0 Total 5144 16058 18112 18415 Electrical Utilities Heavy Oils 3 353 219 299 Light Oils 95 538 557 585 Total 98 891 776 884 All Sectors Combined Asphalt 47 307 289 388 Aviation Gas 811 431 445 372 Distillate Fuel 2540 6138 5990 5727 Heavy/Light Oils 99 891 775 884 Jet Fuel 2251 9618 10876 11531 Kerosene 90 19 36 1262 LPG 46 191 152 212 Lubricants 7 115 110 100 Motor Gasoline 1666 3675 4467 5089 Residual Fuel 708 18 27 3 Road Oi] 0 2 2 2 Other 344 1425 1270 1805 Total 8609 22830 24439 27375 1/_ Information from U.S. Department of Energy, State Energy Data Report, Consumption Estimates 1960-1982. 2/ ‘Includes military and utility consumption. 3/ Includes off highway, aviation and marine. -58- Table 15. Production and Consumption of Refined Petroleum Products in Alaska - 1982 (Thousand Barrels) IN-STATE PRODUCT CONSUMPTION PRODUCTION IMPORTS Motor Gasoline 13,942 12,010 380 Aviation Gasoline 1,019 0 1,230 Jet Fuel 31,593 22,491 7,901 Diesel 15,690 14,264 5,523 Other 12,756 55,999 2/ 0 Total 75,000 104,764 15,034 1/_ Information from U.S. Department of Energy, State Energy Data Report, Consumption Estimates 1960-1982, and Fuel Consumption and Pricing in Alaska - A Regional Analysis by House Research Agency, January 1984. j 2/ Residual fuel production only. 30,000 barrels per day reinjected into Trans-Alaska Pipeline with crude oil destined for export through Valdez Terminal. -59- NATURAL GAS Natural gas is the predominate source of energy in Alaska, comprising 244 trillion Btu's, or 60 percent, of Alaska's energy consumption. (Table 16) Of the 238 billion cubic feet of natural gas consumed in 1982, 172 billion cubic feet were used by the industrial sector, elec- trical utilities burned 31 billion cubic feet, the commercial sector used 24 billion cubic feet, and the residential sector used 11 billion cubic feet. Even the transportation sector used 300 million cubic feet of natural gas in 1982. The growth of natural gas consumption has been directly proportional to the finds and production from Lower Cook Inlet fields and low price to the consumer. At Statehood, only 2 billion cubic feet of natural gas per year was used in Alaska. In contrast, during 1982, 238 billion cubic feet of natural gas (650 million cubic feet per day) was consumed. Industrial consumption alone rose over 70 percent between 1980 and 1982. Natural gas will continue to grow in importance, especially if a pipeline is constructed to move North Slope gas to the population centers of Alaska, and could even become a more important export product than crude oil. There are two natural gas processing facilities in Alaska and both are located in the Kenai Borough. The Phillips Petroleum/Marathon Oil plan processes natural gas into approximately one million tons of liquified natural gas (LNG) annually. The LNG is shipped to Japan via tankers. The Union Chemical plant manufactures approximately 1.2 million tons of ammonia and one million tons of urea annually for shipment to South Korea. Input volumes to each of these facilities amounts to about 50 billion cubic feet per year. Some urea has also been produced and exported to Taiwan. COAL Coal has largely been used by electric utilities with some residential heating known but unquantified (Table 17). At Statehood, all sectors used some coal, but this use faded as petroleum, natural gas and elec- trical sources of power were produced. In 1982, 336 thousand short tons of coal were consumed by electric utilities to produce 5.9 trillion Btu's of electrical energy used in the Fairbanks-Northern Railbelt area. Coal is becoming a major export product for Alaska, but will probably not grow into a primary source of energy for Alaska in this century because of the availability of oil and gas. -60- Table 16. Natural Gas Used by Sector vV (Billion Cubic Feet) 1960 1980 1981 1982 Residential = 8.0 8.0 11.0 Commercial 0.0 17.0 16.0 24.0 Industrial 2.0 100.0 68.0 172.0 Transportation = 0.1 0.3 0.3 Electrical Utilities 0.0 29.0 29.0 31.0 Total 2.0 154.1 121.3 238.3 * Less than 0.1, not included in total. 1/ Information from U.S. Department of Energy, State Energy Data Report, Consumption Estimates, 1960-1982. -61- Table 17. Coal Used by Sector —/ (Thousand Short Tons) 1960 19801981982 Residential 22 0 0 20 Commercial 42 0 0 0 Industrial 256 0 0 0 Transportation . 0 0 0 Electric Utilities 52 273 321 316 Total 377 273 321 336 1/_— Information from U.S. Department of Energy, State Energy Data Report, Consumption Estimates, 1960-1982. ELECTRICITY Electricity produced from hydropower and fossil fuels is an important element of Alaska's energy picture (Table 18). Production of elec- tricity in 1982 consumed 336 short tons of coal, 31 billion cubic feet of natural gas and 884 thousand barrels of heavy and light petroleum oils. A total of 2.4 billion kilowatt hours of electricity was produced for sale from fossil fuels and hydroelectric generation. An estimated 7.4 billion kilowatt hours of electricity went to electric energy losses incurred in the generation and transmission of electricity plus plant use and unaccounted for electrical energy losses. That 9.8 billion kilowatt hours of electricity produced in 1982 compares to 1.1 billion kilowatt hours produced in 1960. Electricity production comprised 5.9 trillion Btu's of energy, or less than one percent of Alaska's total Btu output in 1982. b6ae 1 Table 18. Electricity Used by Sector a! (mw) STATEHOOD 1960 1980 1981 1982 1983 2/ Residential 151.0(539.0) 2/ 1092.0(4552.0) 1228.0(4499.0) 1408.0(4806.0) 1516.0 Commercial 98 .0(349.0) 725.0(3022.0) 686.0(2513.0) 767.0(2617.0) 4/ * Industrial 16.5(0.6) 127.9(10.8) 96.7(12.5) 216.3(12.6) 4/ * Transportation 1.0(4.0) 3.0(12.0) 5.0(17.0) 5.0(16.0) - Total 266.5(892.6) 1947.9(7596.8) 2015.7(7041.5) 2396.3(7451.6) BeLas0 Information from U.S. Department of Energy, State Energy Data Report, Consumption Estimates, 1960-1982. From Alaska Power Administration "Alaska Electric Power Statistics; 1960-1983", September 1984. Commercial and industrial combined, no transportation or waste figures available. Bracketed numbers () are Electrical Energy Losses incurred in the generation and transmission of electricity plus plant use and unaccounted for electrical energy losses. Total amount is 1,757.5 million kWh for commercial and industrial consumption combined. -64- EMERGENCY ENERGY PLANNING Emergency energy planning in Alaska touches all forms of civil defense or natural disasters, plus restrictions to refined petroleum products due to international market failures. Alaska's remote areas must also prepare for special power failure emergencies, where the loss of electricity in harsh winter conditions could pose a serious threat to those affected. All three areas are explored in this section. CIVIL DEFENSE EMERGENCIES & NATURAL DISASTERS Civil defense and natural disaster emergency energy planning is currently done by the Division of Emergency Services within the Department of Military Affairs. The mission of the division is to develop an integrated, comprehensive emergency management program for disaster emergencies, whether natural, technological, or war related. To that end, the Department of Military Affairs has recently issued a 12 volume document that touches on multiple aspects of emergency planning. POWER SYSTEMS FAILURES Governor Sheffield's Rural Mini-Cabinet has undertaken emergency plan- ning that addresses emergencies resulting from electrical generator failures in rural Alaska. Such failures, in harsh winter conditions, bring on an immediate crisis situation. The Mini-Cabinet is designing a quick response system to mitigate the effects of such failures. Although Military Affairs is an integral part of that response, the Mini-Cabinet effort is an insurance policy to assure immediate and direct aid is provided to the disaster area. The Alaska Power Authority is completing this task in cooperation with the Division of Emergency Services of the Department of Military Affairs and electric utilities throughout the State. This task will develop a power systems failure policy which will provide a State response to the problem of electric system failures in isolated communities; a policy of prevention rather than reaction. The policy fosters a four-part approach for providing assistance on both a preventative and emergency basis. The first part is continuation of the emergency response capabilities of the Division of Emergency Services. These capabilities are mobilized only upon the Governor's formal declaration of a disaster. The Division maintains several modular unit generators and switchgear which may be flown to the scene of a disaster. The Division also provides trained personnel who install the equipment and operate emergency power plants. State equipment is made available until the local utility replaces the failed units or performs necessary maintenance to bring the normal system back on-line. The second part of the policy concerns development of a mutual as- sistance program among cooperating utilities. This program, sponsored by the Alaska Power Authority and the Alaska Systems Coordinating Council (an organization of sixteen Alaskan utilities), establishes a -65- network of utilities willing to provide equipment and personnel to a utility in need. Emergency electric system failures, preventative maintenance on a scheduled basis, and a mutual assistance program are included. The third element of the power systems failure policy is expansion of the Alaska Power Authority's reconnaissance and feasibility programs to include documentation of the condition of existing systems and to make recommendations for system improvements. It is hoped that this too will help prevent potential electric system failures. The final element involves providing rural electric utilities with financial management assistance. It has been observed that small rural systems often lack necessary funds for proper preventative maintenance even though they possess the technical expertise to perform such maintenance. The shortage of financial resources appears to result from inappropriate billing and collection procedures and a general lack of financial management that sets aside sufficient reserves for generator overhauls and preventative system maintenance. Financial management assistance could prevent potential system failures caused by improper maintenance. MARKET FAILURES The Military Affairs and Mini-Cabinet Emergency Plans do not address the problem of a fuel supply cutoff to Alaska. Economic disruption of fuel supplies are not as severe as civil defense or natural disaster emergencies, and do not require the same level of response. For this reason, existing State legislation governing fuel supply disruptions may be considered too extreme. On the federal level, legislation concerning state fuel disruption emergencies was considered in the last legislative session, but was not passed out of committee. The State presently has no policy, so without legislation, the State's legal ability to respond to an economic fuel supply disruption is uncertain. To fill that gap, Alaska should develop legislation authorizing the Governor to react to emergency fuel supply disruptions. If patterned after legislation adopted in other states, it would allow the Governor to "set aside" in-State, refined fuel to meet local consumption needs. A plan to handle emergency fuel supply disruptions needs to include information that will assist the State in making informed decisions. Important considerations include the following: 1. Amount and type of petroleum products refined annually in-State, and current storage and distribution problems; 2. Amount and type of refined petroleum products brought in from out-of-State and their current storage and distribution patterns; 3. Fuel storage capacity in the distribution network, particularly jin rural areas; -66- 4. Regional consumption patterns by fuel type; 5. Planning emergency distribution of fuel supplies to meet seasonal transportation and consumption needs; 6. Impact of fuel costs, particularly on low income residents, in a fuel disruption emergency. "Fuel Consumption and Pricing in Alaska -- a Regional Analysis," prepared by the House Research Agency, January 1984, contains background information essential to a good fuel disruption emergency plan. This document covers refinery output, statewide fuel consumption, product pricing and other areas concerning the status of petroleum refining in Alaska. Combining this data with other State agency information, the Office of Energy will submit to the Governor a plan to address emergency fuel supply disruptions. To avoid duplication of effort, the plan will consider agencies and resources identified in the Department of Military Affairs' Emergency Plan. This is particularly important in implementation of a plan where working details have been defined on all levels. -67- ALASKA’S ENERGY FUTURE Alaska's future energy picture has been projected using various models, all having their own set of assumptions. These projections are frequently used to determine the economic feasibility of major energy projects. The 1983 Long Term Energy Plan used the A.D. Little econometric model. The model used three economic scenarios to forecast State development, taking into consideration both the possible range of Pacific Rim and world market developments and related economic development in natural resources, manufacturing, and energy projects within the Alaskan economy. The 1984 Energy Plan utilized the ADL model with considerations of the DELPHI study when discussing Alaska's development through the year 2000 to derive an estimate of parameters that may drive Alaska's future energy picture. This same plan presented an overview of no less than 25 available economic and energy models. It is not the intent of the 1985 plan to select one particular model or source of information as best portraying Alaska's energy future. Instead, these are used collectively to provide a glimpse of how Alaska may develop. Also, each agency involved in long-term energy projects (such as the APA power projects and DNR's oil leasing) have developed models specific to its purpose. Each of these models is fairly complex but offer energy planners some basis for deciding what future demand will be and what supply options need to be considered. Within the context of those generalities and with information from various State and private energy agencies, Alaska's future energy picture can be surmised. EXPECTATIONS Certain projects will continue to dominate Alaska's energy future. 1984 saw the appropriation of a $210 million loan to the Four Dam Pool (Ketchikan, Wrangell, Petersburg, Kodiak and Valdez) hydroelectric projects, $100 million to the Susitna hydroelectric program, $50 million to the Bradley Lake Dam, and $21 million for rural Power Cost Equalization, 1984 also saw the acquisition by the State of the Alaska Railroad which will begin hauling coal from Usibelli Coal Mine, near Healy, to Seward for shipment to Korea and the issuance of coal leases in the Palmer area. Congress has prohibited the export of Alaska oi] beginning with the Trans-Alaska Pipeline Authorization Act of 1968 and continuing through amendments to the Export Administration Act (EAA) of 1969. As a result, approximately 800,000 barrels of Alaska crude are now being shipped each day to the Gulf Coast on U.S. flag vessels at a cost of over $5.00 per barrel. By shipping to Japan, even in U.S. flag vessels, a substantial cost per barrel savings, perhaps as great as $3.00 per barrel, would be experienced. The U.S. maritime industry opposes export of Alaskan oi] and has, thus far, been able to prevent Congressional modifications. Eventually, economic benefits to the nation should permit such export. -68- Potentially, either a tidewater LNG Trans-Alaska Gas System (TAGS) or cross-Canada, Alaska Natural Gas Transport System (ANGTS) pipeline will be built within the next decade to bring North Slope natural gas to market. It is possible, with 40 trillion cubic feet of gas on the North Slope, that LNG could be shipped to the Pacific Rim nations and natural gas piped to the South-48. In 1985, Atlantic Richfield Company, in cooperation with Yukon Pacific Corporation, is beginning a $5 million, pre-feasibility study of the Japanese market for Alaskan LNG. Companion studies of Korean and Taiwanese markets are anticipated. In the 1983 Long Term Energy Plan, A.D. Little made the following "Major Findings:" a. Energy Use in the Rural Alaska (Bush): "It is generally either technically difficult or uneconomical to alter the dependence of Bush communities on oi]. Except for conservation, Bush villages or households have few alternatives which they can implement with confidence where cost savings will exceed investment and operating costs. Many alternatives, while very attractive on the drawing board, experience operation and maintenance problems which quickly negate any cost savings. Reliability and simple technology are therefore essential. Alternative supply options must be developed on a site-specific basis." (Page 21 During the past two years, this finding has not changed. What has changed is that the State now has more site-specific experience with alternative sources of energy and is prepared to proceed with reliable technology through the means of third-party financing. Also, a significant change has been the advent of a new energy subsidy for rural Alaska - Power Cost Equalization. It remains to be seen what impact this program will have on alternative sources of energy. -69- b. Energy Use in the Southeast. "Electricity demand in the Southeast will continue to be met by oil and hydroelectric power. Wood and electric heat pumps offer alternatives for space heating. Regional electric transmission ties and site-specific solutions such as wind power offer electricity supply alternatives. Conservation will continue to play an important role in the Southeast." (Page 22) Experience has shown that few, if any, wind power projects have proved successful in Southeast Alaska. The generation of power from the Tyee and Swan Lake hydroelectric projects has begun to change the energy picture in this region of Alaska, and potential transmission upgrades and interties will enhance that picture even further. c. Energy Use in the Railbelt. "Thermal needs in the Anchorage Bowl can best be served by natural gas. Fairbanks and Valdez will continue to depend on fuel oi] and electricity for their thermal needs in the foreseeable future, unless a tidewater North Slope gas pipeline is constructed. The Railbelt has several cost-competitive alternatives for electric generation - i.e., large hydroelectric projects (Susitna), mine mouth coal-fired steam-electric generators, and natural gas-fired combined cycle turbines. The Susitna Project offers the lowest long-term electricity costs, but it has the drawback of high initial capital cost. A coal-fired power plant can realize the advantage of economies of scale, subject to environmental considerations, only if developed in conjunction with an export mine development. Natural gas combined cycle generators offer low capital costs, but leave the Railbelt vulnerable to fuel price increases. In addition, natural gas used as a utility fuel for electric generation does not conserve this fuel for its best uses: space heating, process heat, and feedstocks. Unless North Slope gas finds its way to the Railbelt, reserves from the Cook Inlet might prove insufficient after the year 2000." (Page 22) Since 1983, several oi] companies and the Cook Inlet Regional (Native) Corporation (CIRI) have planned to liquefy an additional one million tons of natural gas annually for shipment to Japan. For the past 15 years, approximately one million tons of LNG from Cook Inlet have been shipped each year to Japan. To the extent natural gas is exported, it is unavailable for the Railbelt market, so that a net deficit of over 3 TCF in the Cook Inlet area is a real possibility. Space heating needs in the Railbelt will most probably be supplied by North Slope gas, if, in fact, Cook Inlet gas proves insufficient. -70- An additional point not made by A.D. Little is the potential use of coal fired electrical generation plants in the Cook Inlet region. Projects for mine-mouth generation of electricity from coal have been discussed for the Palmer area feeding into the Anchorage-Fairbanks grid, and other coal development projects may arise in the western Cook Inlet area. Another parameter that will "drive Alaska's future energy picture" is the decline of oi] production from the Prudhoe Bay reservoir and the apparent lack of discovered resources to make up its deficit. The State is attempting, through its leasing program, to provide high potential areas for the oil industry to explore, but there are no guarantees that oil will be discovered. Declining revenues will severely affect the State's energy programs along with other State programs. FUTURE STATE REVENUES How Alaska secures future energy supplies may be largely dependent on the amount of revenue available from taxes, royalties, and investment earnings. Although the level of funding is uncertain, Alaska prepares quarterly revenue projections to anticipate what money may be available to run State-sponsored programs. Much like the models discussed earlier, these revenue projections are based on certain assumptions, with the well head price of oi] being the most important, and are considered best estimates. Petroleum revenue estimates, which make up from 85 to 90 percent of the total, are available for every decile over the range of probability. The State generally uses a conservative 30 percent case (30 percent probability revenues will be lower, 70 percent it will be higher) for budgeting purposes. Only toward the end of the current fiscal year is the less conservative, mean case revenue scenario used. Numbers shown herein are the 30 percent case. Actual revenues could be greater or less depending on a number of variables. Revenue projections are made for three fiscal years, two in the future and the current one. As soon as actuals are available for the most recent fiscal year, they are also presented. -71- State revenue forecasts are largely comprised of petroleum revenues. Petroleum revenues peaked at 90 percent of total State revenues in 1980, but since have shrunk slightly to 85 percent. In FY ‘84, petroleum revenues were $2.86 billion and nonpetroleum revenues $0.53 billion of the total revenue picture of $3.4 billion. By 1987, these figures are expected to decrease to $3.28 billion. By the year 2000, this FY '87 figure is expected to shrink to $2.23 billion, at which time it will largely be comprised of and sustained by non-petroleum revenues. As a comparison, FY ‘84 revenues are $3.4 billion, supported by $908 million in sustainable revenues, whereas in the year 2000, the figures will be $2.23 billion and $2.02 billion, respectively. These forecasts act as a navigational aide, keeping the State on track with programs requested by Alaskans, but within the State's ability to fund such programs. In FY '85, the funded operational and capital budget totaled $3.89 billion. The FY '85 revenue projection, at the conservative level, is $3.35 billion, or $540 million less than presently slated for spending. These numbers are just the beginning of future spending limitations that may confront Alaska, and within those restrictions the need to maximize the use of each dollar in the most efficient manner. Although this FY '85 difference is expected to be covered, declines in petroleum revenues from reduced North Slope production after 1990 and decreasing world oil prices in the near future require fiscal restraint. With that in mind, it becomes obvious that Alaska needs programs that fit into reduced budgets today while preparing Alaska for the future. Future revenue projections demand it. ae STATE ENERGY PROGRAMS = 3. STATE ENERGY PROGRAMS The State of Alaska continues to give high priority to domestic and export energy issues. Virtually every State agency has some direct or indirect involvement in energy. Several Departments have direct re- sponsibility for implementing energy projects or programs. The involvement of other State agencies tends to be based on peripheral concerns, such as environmental permitting. State agencies with direct responsibility for energy programs are: 1. Department of Commerce and Economic Development (DCED) 0 Office of Energy (OE) - Energy planning, alternative energy development, marketing of fossil fuels. 0 Division of Investments (DI) - Energy loan programs. 0 Office of Minerals Development (OM) - Assist in developing contacts and encouraging mineral development in-state. (Programs not outlined in this plan.) ° Alaska Power Authority (APA) - Planning and development of district heating and electrical systems. 0 Alaska Public Utilities Commission (APUC) - Regulation of electric and gas utilities and pipeline carriers. ° Oil and Gas Conservation Commission - Regulates oil and gas production. 2. Department of Community and Regional Affairs (DCRA) Oo Division of Community Development (DCD) - Weatherization program, public information efforts, community planning. 0 Municipal and Regional Assistance Division (MARAD) - Community grant and bulk fuel loan administration. 3. Department of Health and Social Services (DHSS) 0 Division of Public Assistance - Low Income Home Energy Assistance Program. 4. Department of Natural Resources (DNR) 0 Division of Geological and Geophysical Surveys - Investigates 011, gas, coal and geothermal resources. 0 Division of Oil and Gas - Manages oil, gas and geothermal leasing programs, royalty oil sales, and issues permits for exploration and development plans. ° Division of Mining - Manages coal leasing programs. 5. Department of Transportation and Public Facilities (DOT/PF) 0 Research Section - Energy conservation in public facilities. 6. Department of Administration (DOA) 0 Direct grants administration of legislative appropriations to unincorporated communities. 7. University of Alaska (UA) 0 Energy Extension Service. 0 Institute of Water Resources. 0 Geophysical Institute. 8. Department of Revenue (DOR) 0 Research Section - State revenue forecasting (program not outlined in this plan). 9. Department of Military and Veterans Affairs 0 Division of Emergency Services - Civil defense and natural laa emergency planning (program not outlined in this plan). 10. Office of the Governor (GOV) 0 Office of Management and Budget (OMB) - State budgeting (program not outlined in this plan). State agencies perform energy-related activities in six major areas. These are energy conservation, energy subsidies, electrical systems, utility regulations, alternative technologies and leasing/marketing. Table 19 lists the activities of each State agency by these functional areas. In addition to efforts by State agencies, numerous federal agencies, local governments, nonprofit organizations and private corporations are actively involved in energy projects or programs in Alaska. This years energy plan made a concerted effort to involve’ these organizations in the 1985 Energy Plan but it is not the intent of the energy plan to report on non-State energy activities. Such an effort would be difficult to complete because non-State organizations have different planning requirements and planning cycles. The following is an overview of current State energy programs. Sections are organized according to functional responsibilities. Those activities which took place in FY 1984 and activities that are expected to continue or be initiated in FY 1985 are considered current. -76- Table 19. Agency Responsibilities by Energy Functional Discussion Areas - 1984 unctional Area ENERGY CONSERVATION Conservation Education X X Energy Grants X X Institutional Conservation X Largescale Electrification X Rural Electric Loans | X | Rural Tech. Assistance | X Smallscale Electrification X | eae | i—+ Thermal/Light Standards + X _| | | 4 Xa {tf Utility Loans Waste Heat Weatherization ENERGY SUBSIDIES Power Cost Assistance Power Cost Equalization LIHEAP Audit Grants Residential Weather- ization Loans Alternative =jJj= Table 19. Agency Responsibilities by Energy Functional Discussion Areas - 1984 (continued) unctional Area PF] DNR] U 7 ELECTRIC SYSTEMS Bulk Fuel Loans Xx =| | |. Bulk Storage Grants X uk ororage srants __} _j_a_t poh — Legislative Grants X Xx Xx X ar rr pa alana ——T ——— —- ALTERNATIVE ENERGY Demonstration Projects Le X | Information X = ea eee es | a ee le Alaska Energy Center Projects X Z| tote | Research X Bes 1 + + Grants and Loans X X X a UTILITY REGULATIONS ff ff} Kt LEASING & MARKETING Royalty Program a et gra rie Oil/Gas Leasing | X Coal Leasin X [+ Geothermal Leasin X Sang Specs cae esa eee ea elec [ciel ee Resource Marketin [eerie | erent PA 1/ See text for agency abbreviations. =J5— ENERGY CONSERVATION This section includes those activities related to conservation of energy, including programs that improve energy management practices in rural communities. Alaska has a variety of assistance programs that aid low income families to weatherize their homes, help communities obtain funds to increase power generation efficiencies and educate communities on ways to conserve limited fuel supplies. The Alaska Power Authority (APA) conducts conservation efforts through large and small scale electrification projects, utility loans, rural technical assistance, and construction of waste heat facilities. The Department of Transportation and Public Facilities also participates in conservation activities. AS 46.11.010 requires the Department to complete a set of thermal and lighting standards for public facilities built and maintained by the State. The Department of Community and Regional Affairs (DCRA) through its Division of Community Development (DCD) is the lead agency in conservation activities. The Division provides weatherization assistance with pass-through money from State and federal sources, assists communities in defining energy needs and funding procurement, and monitors legislative grants and contracts. DCRA's energy management program has been concerned with the high costs of heating fuel and electricity, which have forced many low income families to choose among essentials, such as food, shelter, clothing, basic comfort and transportation. Energy conservation offers one of the most cost-effective near term solutions to these and other State energy problems. There is potential for mitigating the impacts of high energy costs by adopting energy conservation strategies that efficiently manage energy use. DCRA's energy conservation activities fall within five major categories. These are: (1) Rural energy management and technical assistance, (2) thermal and lighting standards, (3) institutional conservation, (4) energy grants and (5) weatherization. RURAL ENERGY MANAGEMENT — TECHNICAL ASSISTANCE Rural community energy management has been identified by Governor Sheffield's Mini-Cabinet for rural issues as an issue to receive priority attention. Community energy management looks at the total energy conservation potential of a community. It includes such strategies as providing education on energy conservation to residents of the community, weatherization of low-income residents' homes, residential oil heating system retrofits, fuel management, energy planning and electrification technical assistance. In 1983, the Rural Alaska Community Action Program completed, through a contract with DCRA, a pilot community education project in eight villages in the Calista and Doyon regions. A team of two energy -79- specialists worked with the respective regional nonprofit organization in each region in developing and undertaking energy programs tailored to each community's needs. The energy team assisted communities in such areas as community planning, electrification, weatherization, energy conservation and bulk fuel storage. One-to-one consultation with village leaders and community workshops were emphasized. In 1984, Tanana Chiefs Conference received funding to provide education and technical assistance to the communities in its region on bulk fuel storage, electrification, community planning, weatherization and alternative energy. These programs have been well received and a clearly demonstrated need has been shown. One goal of DCRA is to expand this block grant approach to other areas of the State for the purpose of fostering the growth of regional energy planning and management. DCRA will be refining its role in community energy management in FY '86 under the guidance of Governor Sheffield's Rural Mini-Cabinet task force on technical assistance. The agenda will include closer coordination with the Alaska Power Authority on electrification issues and cooperation between the complimentary bulk fuel storage grant and loan programs of DCRA and DCED's Division of Investments. DCRA will also include the development of handbooks on rural electrification and fuel management. CONSERVATION EDUCATION The DCRA Urban Outreach Program recognizes the current demand by con- sumers for technical information on energy conservation and alternative technologies. This is particularly true in the Anchorage area, which contain over half of the State's population. To provide Alaska's urban residents with energy information, the Department has contracted with the University of Alaska's Cooperative Extension Service (CES). The CES has an established outreach network, particularly in the State's urban areas. Through its contract, CES has hired an energy specialist for its Anchorage office and has undertaken activities in the areas of consumer response, workshop presentation, factsheet development and printing, an energy information referral service and newspaper weekly columns. In FY '84, DCRA focused on expanding the low-income weatherization program to include consumer education. Previously, energy education was not delivered to communities in adjunct to their participation in the weatherization program. Often homeowners receiving weatherization assistance did not receive information on how to maintain their energy improvements and what other low cost/no cost measures they could undertake to further reduce their energy consumption. With federal funds, the Division of Community Development is in the process of completing the development of weatherization publications, video tapes, a bulk materials purchase program and community workshops. -80- THERMAL AND LIGHTING STANDARDS The DCRA Division of Community Development is also responsible for formulating a set of lighting and thermal efficiency standards for new commercial and residential buildings. The statute that mandate the standards, AS 46.11.040, require that any nonpublic building constructed and financed with State funds must meet a minimum set of standards established by the Division. The statute recognizes the need for more efficient housing in Alaska because of the colder climates and high energy costs. The statute reads that if the State is going to subsidize the construction of commercial and residential buildings it has an interest to ensure that they are efficient and affordable to maintain. A Lighting and Thermal Standards Advisory Committee has _ been established and consists of 17 members from facets of the building industry. The group includes bankers, engineers, designers, home builders, Alaska House Finance Corporation (AHFC), rural consumers, urban consumers and a legislative aide. The first meeting of the group was held in February 1984. DOT/PF is responsible for establishing a set of lighting and thermal standards for public facilities. AS 46.11.010 requires, as far as economically feasible, that minimum standards be developed and implemented in State facilities before the end of this decade. INSTITUTIONAL CONSERVATION DCRA's Institutional Conservation Program helps Alaskan schools, hospitals, local governments and public institutions reduce the impact that increasing energy costs are placing on their operating budgets. Yukon Flats School District, for example, pays an annual energy bill of over $4 million. The Institutional Conservation Program directly assists Alaskan institutions by financing energy audits and technical analysis. Schools and hospitals are eligible for conservation improvements. Improvements made under the program largely result in a payback in energy savings within 15 years. Historically, most funded projects have a payback of seven years or less. To date, 83 grants have been issued through the program totaling $4,888,882 . 1980 to 1984 funding is shown in Table 20. The U.S. Department of Energy makes direct grants to the institutions on a 50 percent match basis. The State may provide up to 90 percent of the required match and the participating institute provides the remaining amount. Due to the scope of this program and its many complicated regulations, however, many of the concerns of Alaska institutions are not addressed. For example, federal regulations prohibit local governments from receiving financial assistance for energy conservation improvements. The DCD is currently exploring options that will make the program more suitable to Alaskan needs and permit federal funds to be leveraged for this purpose. Table 20. Institutional Conservation Program Funding History, 1980-1984 INSTI- FEDERAL STATE TUTIONAL YEAR INSTITUTION FUNDING FUNDING MATCH 1980 Alaska Gateway School District $ 8,000 $ -0- $ 8,000 1980 City & Borough of Juneau 88,019 16,732 66,351 1980 City of Hoonah School District 6,393 -0- 2,178 1980 City of Kodiak 2,500 -0- 2,500 1980 City of Seward 159,056 -0- 159,056 1980 City of Skagway School District 6,672 624 2,485 1980 Fairbanks North Star Borough 104,788 -0- 54,374 1980 Haines Borough School District 52,000 37,648 14,352 1980 Lower Kuskokwim School District 189,123 82,138 74,851 1980 Nenana City Public Schools 38,234 -0- 12,158 1980 Tri-Valley School 330,815 -O- 330,815 1980 Providence Hospital (Anchorage) 142,536 20,188 113,066 1980 South Peninsula Hospital 14,036 -0- 6,964 1980 Southwest Regional School District 209,261 56,759 105,283 1980 Valley Hospital 3,871 -0- 2,669 1980 Yukon Flats School District 9,600 -0- 9,600 1981 City & Borough of Juneau 639,922 219,596 251,801 1981 Fairbanks North Star Borough 233,695 32,343 201,352 1981 Lower Kuskokwim School District 55,775 44,620 11,155 1981 Palmer Junior High School 4,200 -0- 4,200 1981 Alaska Psychiatric Institute 7,000 -0- 7,000 1982 Cordova Junior/Senior High 4,400 -0- 4,400 1982 Fairbanks North Star Borough 76,759 25,553 19,967 1982 Kodiak High School 83,200 -0- 83,200 1982 Ft. Yukon School 100,442 80,354 20,088 1983 Fairbanks North Star Borough 150,825 117,644 33,181 1983 Galena City School 124,216 -0- 155553 1983 Kodiak Junior High School 80,054 62,442 29 643 1983 Nome Public Schools 16,000 6,400 9,600 1983 Norton Sound Health Corporation 8,613 6,891 1,723 1983 Petersburg School District 68,793 26,628 42,165 1983 Valdez Senior High School 15,000 -0- 15,000 1983 Ft. Yukon School 57,456 32,192 27,419 1983 City of St. Paul 4,750 1,900 2,850 1984* Alaska Pacific University 21,642 -0- 21,645 1984* City of Aniak 4,500 3,600 900 1984* City of St. George 11,124 8,899 Znee5) 1984* Kodiak Elementary School 62,478 49,982 12,496 1984* Lower Kuskokwim School District 82,721 66,177 16,545 1984* Norton Sound Health Corporation 90,714 7,332 10,894 1984* St. George School 5,000 4,000 1,000 1984* St. Mary's Mission 109,000 101,800 21,800 1984* Valdez Senior High School 178,391 114,866 293,258 *The 1984 projects have been recommended by the State. The DOE is currently reviewing the grant applications. -82- ENERGY GRANTS DCRA's Energy Mini-Grants (Table 21) were initiated to encourage com- munities and nonprofit organizations to develop energy education pro- grams. Emphasis was placed on programs with simple and innovative designs. The program was based on information that the delivery of energy programs in a centralized manner is very difficult and many times unsuitable to community needs and that program delivery could be enhanced through the development of regional and local capacities. Under this program a grant could not exceed $10,000. For the first year of the program, 35 applications with requests totaling $274,609 were received. Of these applications, nine proposals for $70,926 were funded, and the Alaska Legislature has appropriated an additional $100,000 for the mini-grant program in FY '85. The Fifth Annual Alternative Energy Conference took place in Fairbanks in 1984 providing nearly 500 Alaskans (including professionals such as architects, engineers, builders, bankers, planner, legislators and local government officials) information on state-of-the-art energy Management and renewable technologies. The Sixth Annual Conference will be taking place in Anchorage in March 1985. DCRA also used a federal grant to support the Municipality of Anchorage carpooling program. Previously, the municipality had received funding for its carpool office, but there was no funding for promotion. With DCRA support, the municipality can now undertake a promotion campaign. Administration of legislative grants is completed by DCRA and the Department of Administration (Table 22). Grants are generated by the Legislature in response to a request from a community. Projects range from the $2 million Cape Beaufort Coal Development Program to small scale electrification projects. Table 21. 1984 Energy Mini-Grants GRANTEE City of Aniak North Slope Borough Tanana Chiefs Conference Cooperative Extension Service Anchorage Community Development Corp. RurAL CAP Prince William Sound Community College City of Tanana Conservation and Renewable Energy -84- PROJECT DESCRIPTION Conservation Education Program Energy Conservation Videotape Community Freezer Videotapes Electrification Manual Commercial Energy Education Bethel Energy Conference Photovoltaics Seminar Local Energy Education Program Energy in Real Estate Seminar AMOUNT OF GRANT $ 9,968 10,000 9,950 10,000 10,000 10,000 1,893 3,135 5,980 Table 22. FY ’85 Legislative Grants DEPARTMENT OF COMMUNITY AND REGIONAL AFFAIRS NAME Arctic Village Electrification Upgrade Beaver Electrification Birch Creek Electrical Upgrade Cape Beaufort Coal Development Copper Center Geothermal Exploration Chitina Hydro Project Healy Lake Electrification Iguigig Electrification Karluk Electrification Karluk Street Lighting Kokhanok Electrification Kwigillingok Power Generator Metlakatla Dam Repair Minto Electrification Noatak Electrification Nunam Kitlusisti Energy and Mineral Development Participation Program Nunam Kitlusisti Village Energy Demand and Use Coordination Pedro Bay Electrification Tanana Chiefs Conference Energy Self-Sufficiency Program Telida Electrification Venetie Electrification Distribution System DEPARTMENT OF ADMINISTRATION NAME Dillingham Electrification Ekwok Electrification Fairbanks Electrification Nightmute Electrification Saint Paul Island Electrification Selawik Electrification AMOUNT $ 150,000 330,000 425 ,000 2,000,000 100 ,000 261,000 30,000 167 ,000 233,000 27,000 425 ,000 80,000 100,000 100,000 75,000 125,000 75,000 900 ,000 120,000 25,000 220,000 AMOUNT $ 703,500 300 ,000 45,000 100,000 125,000 350,000 -85- WEATHERIZATION DCRA's Weatherization Program is another essential aspect of community energy management. Since its inception, the Weatherization Program has provided low-income Alaskans with direct, immediate and long-lasting benefits. It has reduced the annual home heating costs of low-income Alaskans by as much as 25 percent and has increased the personal health and well-being of its recipients. It has done so by repairing and upgrading the thermal soundness of low-income housing stock in rural Alaska with such items as insulation, caulking, and other low-cost weatherization functions. The State's weatherization program has undergone a_ progressive evolution from largely federal funding to State sponsorship (Table 23). From FY '77 through FY '82, the Weatherization Program was 100% federally funded through the Department of Energy (DOE) and the Low Income Energy Assistance Program (LIHEAP administered through the State Department of Health and Social Services). Federal funding was inadequate to provide statewide assistance, however, and _ federal regulations were particularly unsuited for Alaska's unique climatic and economic conditions. The Alaska Legislature recognized the inadequacy of the federal program and its funding level and appropriated $2.3 million in FY ‘82 for a State weatherization program. In FY '83, this figure was increased to approximately $5.0 million and the program was placed under the direction of DCRA. DCRA subsequently revised the State Weatherization Program regulations to include State and federal weatherization funds, thus increasing the benefit level to each home. At the same time, regionalized income criteria were developed to reflect the higher cost of living in rural areas. Additionally, during FY '84, the DCRA designed and implemented a program to educate residents about weatherization improvements. DCRA's weatherization program administers contracts and equitably distributes funds. Program funds are distributed based on "need," with priority given to the elderly and the handicapped. Each home is given an energy assessment and, on the basis of that assessment, materials are purchased and installed for the household. Household members receive one-to-one energy education on low cost/no cost type future conservation efforts. As funding permits, community level workshops concerning weatherization and other appropriate energy conservation measures are held. Funds are distributed through contracts awarded on an annual basis. Local governments, nonprofits, and profit businesses are all eligible to administer the program at the local level. The weatherization program has short and long-term goals. Short term goals include gathering and computerizing statewide weatherization data to more efficiently deliver service, cross reference information, improve outreach programs for available services and programs, and coordinate these with other departments. -86- Table 23. Weatherization Funding History DEPT. OF ENERGY LIHEAP STATE YEAR 1/ PROGRAM PROGRAM PROGRAM TOTAL 1978 $ 500,000 $ Bi. 8 0 $ 500,000 1979 1,200,000 0 0 1,200,000 1980 900 ,000 0 0 900,000 1981 1,400,000 0 0 1,400,000 1982 800,000 500,000 0 1,300,000 1983 1,300,000 650,000 2,300,000 4,250,000 1984 900,000 500,000 5,000,000 6,400,000 1985 Unknown 1,000,000 5,000,000 6,000,000 $7 ,000 ,000 $2,650,000 $12,300,000 $21,950,000 1/_ Calendar year - State Fiscal Year included as part of next calendar year, and federal year is same as calendar year. Long range goals include raising the consumer education level on conservation so that the general public recognizes the full value of cost savings derived from applying conservation measures in their homes, and weatherizing at least 50 percent of the eligible homes in Alaska as timely as funding permits. Unfortunately, the number of eligible, unweatherized homes under the State's current income guidelines is staggering. Approximately 40,000 homes of low-income elderly and handicapped Alaskans still need to be weatherized. It will take a serious State commitment to provide al] low-income Alaskans with this service. At the current rate of funding (approximately $6 million in State and federal appropriated funds in FY '85) it will take approximately 20 years to meet today's need. The State has the option of maintaining the status quo and not com- pleting weatherization for 20 years or selecting a weatherization goal of a pre-determinated percentage of eligible homes and then dedicating the necessary resources to obtain it. The following options are available: 1. Six million dollars annually means approximately 10 years to weatherize 50 percent of the homes. 2. Eight million dollars annually means approximately eight years to weatherize 50 percent of the homes. 3. Ten million dollars annually means approximately six years to weatherize 50 percent of the homes. It should be noted that only 15 percent of the eligible homes have been weatherized since implementation of the program seven years ago. Eligible homes are estimated to be approximately 33 percent of the total homes in the State. -88- WASTE HEAT FACILITIES The Alaska Power Authority initiated a waste heat program with an appropriation of $500,000 from the 1980 Alaska Legislature. Through that program, data from villages throughout the State was collected and analyzed. Based on this analysis, two rural communities were selected for the installation of waste heat recovery systems. The systems were designed and constructed in Unalaska and Ouzinkie. The Alaska Power Authority also monitored a system at the seven-mile camp on the Prudhoe Haul Road. Installation of Waste Heat Conservation Facilities has proven to be an efficient and cost effective method of conserving fuel oi] in rural Alaska villages. For example, at least two-thirds of the energy con- sumed by diesel engine generators is not utilized in the production of electricity. With the installation of proper waste heat equipment about one-half of the wasted heat can be recaptured and used for space or water heating, which will increase the efficiency of the generator by one-third. This will result in a reduction of the space heating cost for schools, community buildings and other State or municipal facilities. In addition to these immediate savings, the local utility or community will receive a secondary income from heat sales which should ultimately reduce the fuel cost portion of the electrical rates. In 1981, Unalaska and Ouzinkie (Kodiak Island) were selected as sites to investigate the utility of waste heat recovery systems. These demonstration projects performed as planned and proved to be cost effective. As a result, waste heat facilities were installed in 1983 at 11 additional villages. These villages are Ambler, Angoon, Elim, Kiana, Savoonga, Shungnak, St. Mary's, Unalakleet, Goodnews Bay, Grayling and Kaltag (Chart 10). It is estimated that the installation of waste heat conservation facilities in these villages will replace 336,375 gallons of fuel oi] annually having a value of $562,689 in 1982 fuel costs. Total project costs for the 11 villages were approximately $3.9 million which indicates an average payback period of approximately seven years. Based on a life expectancy of 20 years, the 11 facilities will save 6,727,500 gallons of fuel oil in addition to being very cost effective. In FY '85, the APA received another appropriation of $1,131,000 for waste heat facilities. This appropriation will be used to install a fairly large waste heat system in Tanana and the undertake a feasibility study of waste heat potential in 35 additional villages. It is estimated that the Tanana facility will annually displace approximately 74,500 gallons of fuel oil for space heating and have a payback of 7.3 years. Chart 11 reflects the interest in waste heat facilities and the scope of APA's statewide evaluation program. -89- Chart 10 - Rural Waste Heat Recovery Projects Constructed SHUNGNAK SAVOONGA UNALAKLEET KALTAG . | ‘ S MARYS GRAYUNG -& MCGRATH | \ 3 %. y . 2 OOONEWS - + IN| we Vv ey Oo S OUZINKIE mS LEGEND q 3 cS @ WASTE HEAT PROVECTS cae eo OP . e UNALASKA -90- -16- Chart 11 - Rural Energy Waste Heat Evaluation Program, 1984-1985 e Atkasook @ Noatak e Anaktuvuk Pass Shishmaret e Wales@—~ © Selawik Fort Yukon @ Teller Birch Creek@ ai '@ Shaktoolik m St. Michael Emmonak mt Milledge @ Shageluk @ Pilot Station Lower Kalskag® @ Aniak ae Akiachak Napaklak @ Nikolai ENERGY SUBSIDIES Energy subsidies provided directly to the consumer by the State are received from the following programs: Power Cost Assistance, Power Cost Equalization, and the federal block grant Low Income Housing Energy Assistance Program as well as certain energy loans made by the Department of Commerce and Economic Development. Other State funded programs for weatherization and related projects may be considered subsidies; those are discussed under other sections of this report. POWER COST ASSISTANCE Power Cost Assistance (PCA) was established by the Alaska State Legis- lature in 1980, and is administered by the APUC and the APA. In FY '84, $8.9 million was appropriated to this program. PCA is available to utilities with retail rates that are more than 12¢/kWh and less than 45¢/kWh less any return on equity. The entire rate of 12¢/kWh is increased by 1¢/kWh every fiscal year and was at 14¢/kWh in FY '84, PCA applies to only the first 600 kWh consumed per month by each customer or, for community operated facilities, the consumption equivalent to 55 kWh per month per resident of the community. In 1982, the average residential sector consumption for rural Alaska was about 319 kWh/month. PCA applies to those electric utilities that meet the above conditions and which provide the information needed for the Alaska Public Util- ities Commission (APUC) and the Alaska Power Authority (APA) to certify statutory compliance. PCA applies to 95 percent of the eligible costs of each utility. The consumer pays 5 percent of the actual costs that are between the entry rate and the ceiling rate. As of June 1984, 128 communities were participating in this program, and in October, 1984, the Power Cost Assistance Program was replaced by the Power Cost Equalization Program. POWER COST EQUALIZATION Power Cost Equalization (PCE) became effective in October, 1984 and received a continuing appropriation in the FY '85 budget at $16.3 million and for FY '86 at $21.7 million. APA also administers this program. The intent of the PCE program is to provide customers of rural Alaska electric utilities with rates that are comparable to the "mean of the cost per kilowatt hour in Anchorage, Fairbanks and Juneau." The difference between the rate specified by statute and actual utility costs per kWh is paid for by the State. PCE reduces the entry rate to 8.5¢/kWh for eligible utilities and increases the ceiling to 52.5¢/kWh. These rates can be changed annu- ally. PCE will pay up to the consumption level equal to 750 kWh per ao for each customer and 70 kWh a month per resident for community facilities. -92- As with Power Cost Assistance, the subsidy applies to 95 percent of the eligible costs of each utility. The consumer pays 5 percent of the actual costs that are between the entry rate and the ceiling rate. PCE is applicable only to those utilities which provide the information required for certification, had residential sector consumption levels of less than 7,500 MWh (or 15,000 MWh if serving two or more communities) during calendar year 1983, use diesel-fired generators to provide more than 75 percent of their electrical generation during calendar year 1984, and are subject to APUC rate regulations or have had at least 25 percent of their customers petition for PCE if the utility itself has not voluntarily requested this assistance. It is uncertain the exact number of communities which may be covered by PCE. It is anticipated that the new rate of subsidy will encourage more participation from other communities as well as continued participation by those included in the Power Cost Assistance Program. LIHEAP The Low Income Home Energy Assistance Program (LIHEAP) provides a federal block grant to the Alaska Department of Health and Social Services (DHSS) through the Division of Public Assistance and seven tribal grantees (Table 24). Concern focuses mainly on using LIHEAP funds to reduce home energy costs for low-income Alaskans. Low-income households are most affected by rising home energy costs since they must pay a greater percentage of their income for those costs than do middle or upper-income households. Funding in FY ‘84 totalled $11.3 million. The majority of funds go directly to subsidize home energy costs, but grantees may use up to 15 percent of the block grant for energy conservation and weatherization. The Energy Assistance Program distributes federal LIHEAP funds statewide through the DHSS Division of Public Assistance, and various tribal organizations. The tribal organizations administering LIHEAP block grants in FY ‘84 were the Association of Village Council Presidents, Bristol Bay Native Corporation, Cook Inlet Native Association, Kenaitze Indian Tribe, Ketchikan Indian Corporation, Tanana Chiefs Conference and the Tlingit and Haida Central Council. The Division of Public Assistance delivers its program through 18 district offices and village fee agents. Tribal organizations use their own social service staff in program delivery. LIHEAP grantors will serve approximately 10,000 low income households in FY '84, GRANTS AND LOANS The Department of Commerce and Economic Development (DCED) has been providing State funds for energy programs for many years. From 1980 to 1983, residential weatherization grants of up to $300 were provided to homes having completed an energy audit. During those same years, the now defunct Northern Alternative Technology Grants program was initiated to encourage alternative technology research. Over 203 grants totalling $1.3 million were distributed in that grant program, which DCRA is presently closing out. Table 24. FY 84 Low Income Home Energy Assistance Program Funding LIHEAP DHSS ORGANIZATION GRANT TRANSFER TOTAL Bristol Bay Native Association $ 125,257 $ 232,036 $ 357,293 Cook Inlet Native Association 424,919 344,406 769,325 Assoc. Village Council Pres. 525,607 1,031,436 1,557,043 Tlingit & Haida Central Council 240,370 241,796 482,166 Tanana Chiefs Conference 335,452 664,872 1,000,324 Kenaitze Indian Tribe 32,587 38,333 70,920 Ketchikan Indian Corporation 45 ,667 46,284 91,951 TOTAL $1,729,859 $2,599,163 $4,329,022 DHSS FY '84 LIHEAP Block Grant $ 9,610,607 Minus Tribal Transfers 2,599,163 DHSS FY '84 Total $7,011,444 Alaska's FY '84 LIHEAP Block Grant Funding DHSS and Tribal Grants $11,340,466 Zoau Beginning in 1980, DCED began making residential energy conservation, alternative energy and alternative technology loans as well. Unlike the grant programs, the Division of Investments and the Division of Accounting and Collections within DCED continue to make and service long-term energy loans. AUDIT GRANTS One program that had wide public appeal but which terminated in December, 1983, was the residential energy audit - $300 weatherization grant program. This audit-grant program was extremely popular and raised the energy consciousness of a substantial number of Alaskans. Although plagued with numerous administrative problems, the grant program reached into 41,505 homes during fiscal years 1981, 1982 and 1983. The audit program was designed to educate consumers about weatherization in their own homes. Up to $300 was given to the home- owner to make weatherization improvements in areas recommended in the energy audit. A total of $6.4 million was distributed under this program. Residential loans, discussed in the next section, were also available under the original audit program. RESIDENTIAL LOANS The Residential Energy Conservation Loan Fund provides loans to pur- chase, construct and install energy conservation improvements in existing buildings. Loans under the program may not exceed $5,000 or the amount equal to the estimated total energy savings attributable to the improvement over a 10 year period, whichever is less. Interest on loans made prior to December 30, 1983 was five percent. Since that date, interest rates are equal to an average of municipal bond yields for the 12 months preceding the loan. Over $6.5 million was loaned from FY '81 to FY '83 to 1,692 recipients. ALTERNATIVE TECHNOLOGY LOANS Two alternative energy loans programs have also distributed low-interest loan money to Alaskans. The Alternative Technology and Energy Revolving Loan Fund currently makes loans for the purchase, construction and installation of alternative energy systems, including wood stoves with catalytic converters, solar systems, wind systems, hydrosystems and centralized, multi-fuel heating systems. The maximum loan amounts are $30,000 over 20 years at 5 percent interest for the first $15,000 and 15 percent for the amount of loan that exceeds $15,000, computed as a composite rate. The Alternative Technology Loan Program, which terminated June 30, 1984, made loans to develop and implement methods of waste disposal, recycling, food production, transportation and building design and industrial enterprise. Loans were made to produce more efficient, less costly or less energy intensive methods than those presently utilized and which were appropriate to the Alaska environment. The maximum loan of $30,000 for 20 years carried an interest rate of 9-1/2 percent. -95- The Alternative Technology and Energy Revolving Loan program has committed $12.2 million in loans to 2,116 people between July 1, 1979 and June 30, 1983. In FY '84, the loan activity included approximately 376 loans which averaged $8,538. The default rate for the loan program is less than one percent. An additional $1.0 million was appropriated to the Alternative Technology and Energy Revolving Loan Fund in FY '85. BULK FUEL LOANS/GRANTS Bulk fuel storage enables a community to purchase large volumes of fuel oil in one delivery, thereby reducing transportation costs and the cost of diesel generation. However, without State assistance, Many rural communities would not have needed funds to purchase large quantities of fuel oi] or the storage tanks. The Department of Commerce and Economic Development, through its Di- vision of Investments, offers communities a loan program for bulk fuel oil purchases. No interest is charged on the first loan and an interest rate of 5 percent is charged on additional loans. The Department of Community and Regional Affairs, through its Division of Community Development, administers the State's bulk fuel oil storage tank grant program. Each community is allowed one-time grant of up to $100,000 for the construction of a bulk fuel storage facility. The State appropriated $600,000 for this program in FY '85. Bulk fuel storage is critical to most rural communities since it helps lower electrical and heating costs. The ability to restore spent fuel is minimal or non-existent during the fall to spring period and bulk fuel storage is one way to avoid crisis due to fuel shortage or depletion in the dead of winter. -96- ELECTRICAL SYSTEMS Electrical systems refer to the generation, transmission, and distri- bution facilities that are needed to provide consumers with electrical power. These facilities are maintained by electric utilities which are either publicly, cooperatively or investor owned. During the past few years, the State has directly participated in the development of Alaska's electrical systems. This participation has been in two directions: 0 Through planning, financing, construction and operating power projects using virtually any source of energy except nuclear power, which is statutorily prohibited. 0 By electrification grants and technical assistance to rural communities. The Alaska Power Authority has been involved with development of large and small scale hydroelectric projects and administration of electri- fication loans to communities or power utilities. The DCRA has provided technical assistance to rural communities, and_ has administered in-house and legislative energy grants. Additional legislative energy grants have been administered by the Department of Administration. PROJECT DEVELOPMENT PROCESS An important aspect of the APA's efforts is its project development process. The full development of a power project involves a five step process which includes the following: 1. Reconnaissance Study - assesses the electrical energy and space heating needs of a region or community and identifies those power supply options that merit more detailed eval- uation; 2. Feasibility Study - provides a detailed evaluation of the technical, economic, social and environmental viability of those options which appear to be feasible. Typically, the options are compared to the base case (existing electrical system). A financing plan is prepared for the best alterna- tive; 3. pecensing and/or Detailed Design - follows approval of the feasibility study and financing plan. Licensing includes the permits required by local, State and federal agencies. For most hydroelectric projects, the Federal Energy Regulatory Commission (FERC) license application requires the most comprehensive effort; 4. Project Construction - begins once the detailed design is complete and a required licenses and permits have been obtained; and 5. Operation - Operation and maintenance (O&M) of the project by the APA or by a local utility which has an operating agreement with the APA. The Alaska Power Authority also has a planning schedule that has been adopted by the APA Board of Directors (Table 25). LARGE SCALE ELECTRIFICATION Major, large-scale electrification projects are carried out through the Energy Program for Alaska which was initiated by the Legislature in 1981. This program supports the construction of power generation and transmission projects that will be owned and operated by the APA. Projects that are currently included in this program are: 1. Solomon Gulch, a 12.0 MW hydroelectric project serving Cooper Valley Electric Association. Completed in January 1982. 2. Swan Lake, a 22.5 MW hydroelectric project serving Ketchikan. Completed in February 1984. 3. Tyee Lake, a 20.0 MW hydroelectric project serving Wrangell and Petersburg. Completed in March 1984. 4. Terror Lake, a 20.0 MW hydroelectric project serving Kodiak and Port Lyons. Completed in November 1984. 5. Anchorage-Fairbanks Intertie, a 345 kV transmission line serving the Railbelt. Completed in December, 1984. An important objective of the Energy Program for Alaska is to provide each project included in the program with identical financing forms. This is achieved by pooling the State equity appropriated to each project by the State and the debt service needed to complete con- struction financing. The wholesale power price for each project is based on its share of debt service as well as operation and maintenance costs and costs for inspections. SMALL SCALE ELECTRIFICATION Small scale electrification projects are funded through a variety of structured and unstructured means in Alaska. The Alaska Power Authority, the Department of Community and Regional Affairs and the Department of Administration all provide money to Alaskan communities for electrification improvements. -98- i Table 25. Alaska Power Authority Project Approval Process at Sequence of Events Step Approved by No. Description Staff Board OMB Leg. 1. Annual Plan for Reconnaissance Studies X 2. Appropriation Request for Reconnaissance Studies X x X 3. Award Contract for Reconnaissance Study X 4. Authorization to submit Reconnaissance Study to OMB X 5. Approval of Reconnaissance Study X* 6, Annual Plan for Feasibility Studies X 7. Appropriation Request for Feasibility Study X X X 8. Award Contract for Feasibility Study X 9. Approve Conditional Power Sales Agreements X 10. Approval of Feasibility Study and Preliminary Plan of Finance and Authorization for Submittal to OMB and Legislature X 11. Recommend Project Approval or Disapproval to Governor and Legislature ) kod 12. Authorization of Project and Construction Cost xX 13. Approval to Submit License Application to FERC X 14. Annual Plan for Design X 15. Appropriation Request for Design X X X 16. Approval of Initiation of Detailed Design, Updated Power Sales Agreements, and Updated Plan of Finance X 17. Award Contract for Detailed Design X 18. Annual Plan for Construction X 19. Approval of Final Plan of Finance and Power Sales Agreements X 20. Appropriation for Construction X x X 21. Approval of Start of Project Construction X 22. Award Construction Contracts X 1/_ ‘For all significant power projects, some steps concurrent. NOTE: ei Indicates statutory requirements. OMB's review is required for new projects that are larger than 1.5 MW for generation projects or cost more than $3,000,000 for transmission projects. -99- The APA's Rural Electrification Program, which is separate from the Rural Electrification Revolving Loan Fund, includes reconnaissance and feasibility studies of Alaska's rural villages, waste heat recovery facilities for diesel generator systems (discussed under the Energ Conservation Section), development of small-scale (less than 1.5 MW electric systems which provide an alternative to diesel generators and technical assistance to utilities regarding proper installation of electrification projects. Funding for the technical assistance program began in FY 1985. Numerous projects come under each of these programs and a list of APA projects is in the Regional Data Summary. The DCRA administers grants to unincorporated communities in Alaska pursuant to AS 37.05.317. The role of the agency is to assure that the municipality: "(1) will spend the grant for the purpose specified in the appro- priation or allocation; (2) will allow, on request, an audit by the State of the uses made of the grant; and (3) assures that, to the extent consistent with purpose of the appropriation or allocation, the facilities and services provided with the grant will be available for the use of the general public." Summarizing, this program provides funds to unincorporated communities for energy projects identified through DCRA's technical assistance program, or through miscellaneous appropriations made by the Legislature based on a community request. The Department of Administration (DOA) distributes legislative appro- priations to incorporated communities in Alaska pursuant’ to AS 37.05.315. According to statute, the DOA does not have authority to approve the technical design or economic feasibility of a legislatively funded electrification project, so monitoring of project results is limited to confirmation that appropriations have been expended. UTILITY LOANS The Power Project Loan Fund provides State financing for power projects that will be owned and operated by the local utility. Terms for these loans are established by statute. The repayment term must not exceed 50 years and the interest rate must not be less than five percent nor more than the average weekly yield of municipal bonds for the 12 months proceeding the date of the loan. -100- Loans which have been made from the Power Project Fund are: Borrower Principal Alaska Electric Light and Power $13,200,000 City of King Cove 200,000 Bethel Cogeneration Utility 1,000,000 I] iamna-Newhalen 300 ,000 City of Sitka 15,000,000 RURAL ELECTRIFICATION LOANS The Rural Electrification Revolving Loan Fund (RERLF) was created by the Legislature in 1981 in order to provide low-interest loans for the extension of distribution lines to new customers. The repayment term of 20 years is established by regulation and the interest rate of two percent is established by statute. To date, $7,500,000 has been appropriated to the RERLF of which $3,928,316 has been approved as loans to five utilities. These include: Date of Loan Borrower Principal 6/81 1] iamna-Newhalen $ 230,000 7/82 I] iamna-Newhalen 1,340,000 1/83 Andreanof Electric 200,000 10/83 Egegik Light & Power 130,000 11/83 Yakutat Power 134,000 1/84 City of Unalaska 250,000 1/84 City of Unalaska 1,560,486 7/84 Egegik Light & Power 83 ,830 Loans being considered are: Matanuska Electric Assn. $ 720,000 Homer Electric Assn. 87,418 TECHNICAL ASSISTANCE Technical assistance is provided by both the APA and DCRA. The APA is bringing the services of a consulting engineer on board to assist communities which request small energy systems planning, design, troubleshooting, inspection, electric rate evaluation and maintenance. DCRA is initiating a Rural Electrification and Technical Assistance Program. The purpose of this program is to help rural communities develop a better understanding of the need for local energy planning, how to develop an electrification system and what capabilities are needed for its operation. This is discussed in further detail in the Energy Conservation Section of this plan. -101- ALTERNATIVE ENERGY DEVELOPMENT Alternative energy technologies are those that use renewable sources of energy and tend to be most suitable for energy demands that are relatively small and dispersed. Alaska is considered to have good potential for the introduction of alternative energy technologies because of the high fossil fuel costs encountered throughout most of the State. Rural Alaska remains ripe for continued weatherization of its housing stock and increased efficiency from its predominately diesel senerated utilities. Yet energy consumption levels are small enough so that alternative technologies can provide a significant portion of the energy needed. Rural residents also tend to favor’ the self-sufficiency that renewable resources inherently provide. In order to take advantage of these potentials, the State has sponsored numerous alternative energy demonstration projects and provides a low-interest loan program to help finance individual development efforts. The general purpose of this support has been: (1) to test emerging technologies under Alaskan conditions, (2) to provide the catalyst needed for development of commercially feasible products and then, (3) to replace expensive sources of energy, such as diesel generators, with those alternative energy products that are less costly. The State's organizational structure for alternative energy development has been in a state of flux. From FY 1976-1983, most of the State alternative energy development activities, including those funded by federal grants, were under the Division of Energy and Power Development (DEPD). However, the Legislature did not fund this Division in FY '84 and redistributed funds for alternative energy development and energy conservation from DEPD to the Department of Community and Regional Affairs. Following this, Governor Sheffield transferred most of the alternative energy development projects back to the Department of Commerce and Economic Development. In the fall of 1983, the Department of Commerce and Economic Development established an Office of Energy to complete existing demonstration projects and to determine the potential for additional alternative energy development effort. The University of Alaska also plays an important research role in alternative energy development. Table 26 indicates which projects have been undertaken by the State, showing which ones are complete, and which ones are presently active in FY '85. In the past five to seven years the State of Alaska has undertaken a number of alternative energy projects in an effort to determine their feasibility in far northern latitudes. Examples include wind turbine generators, geothermal drilling projects, peat feasibility studies, bioenergy projects, electrical transmission experiments as well as more traditional conservation efforts. -102- Table 26. Alternative Energy Projects - Office of Energy NAME OF PROJECT A. Wind Energy Bering Straits Wind Holy Cross Wind Kotzebue Wind Nelson Lagoon Wind Newhalen Wind Port Alexander Wind Sheldon Point Wind Skagway Wind Wind & Solar Equipment Nelson Lagoon Newhalen Port Alexander Sheldon Point Skagway Fairbanks APPROPRIATION LOCATION (approx. $) Bering 375,000 Straits Villages Holy Cross 40,000 Kotzebue 190,000 250,000 100 ,000 30,000 282 ,000 100,000 50,000 DESCRIPTION Small wind generator installation and assessment. Complete. Wind feasibility and possible small system installation. Complete. Proposed installation of 85 kW wind system intertied with local utility grid. Ongoing. Installation and assessment of a 20 kW wind diesel intertie system. Complete. Non-feasible project. Battery bank installation was replaced by centralized utility grid serving I1]iamna-Newhalen- Nondalton. Complete. 20 small wind/battery in- stallations for individual households. Complete. Five 2.5 kW battery bank installations for individual households. Complete. 12 kW wind turbine intertied with sewage treatment plant. Complete. University of Alaska, Fairbanks research equipment purchase. -103- Table 26. Alternative Energy Projects - Office of Energy (continued) NAME OF PROJECT LOCATION APPROPRIATION (approx. $) B. Biomass Research, Development and Feasibility AVEC/Mitkof Wood Gasifier Research Dillingham Peat Feasibility study of Charcoal Production & Electrical Co- Generation Stirling Engine Development Project Valley Sawmill Residue Utilization Feasibility * This project 50% federally funded. Anchorage Dillingham Willow Anchorage Anchorage 1,000 ,000* 160,000 13 ,200** 195 ,000 23 ,757** ** This project is 100% federally funded. -104- COMMENTS Experimentation with two separate wood gasification systems to determine the feasibility of using low Btu gas to power generator systems for village applications. Complete. Peat harvesting and residential use. Demonstration project. Ongoing. Examination of feasibility of constructing a charcoal pro- duction plant in the Matanuska-Susitna Valley. Study includes determination of wood supplies, plant costs and marketing research. Ongoing. Fabrication and coupling of solid fuel wood combustor with 3 kW free piston Stirling Engine. Ongoing. Consumer marketing research on the feasibility of using sawmill waste for firewood, and study of production economics of converting saw- mill waste to useable fuel. Ongoing. Table 26. Alternative Energy Projects - Office of Energy Alternatives for disposal of land clearing wastes. Study includes determination of waste wood value, useable pro- ducts resulting from process- ing, environmental impacts and economies of wood waste recovery program. Ongoing. (continued) APPROPRIATION NAME OF PROJECT LOCATION (approx. $) COMMENTS Juneau/Sitka Wood Waste Juneau/Sitka 28 ,500** Plans Wrangell Forest Wrangel1 23 ,800** Products C. Electrical Transmission Bethel-Napakiak SWGR Bethel-Napakiak 710,000 Kobuk-Shungnak SWGR Kobuk/Shungnak 540,000 D. Solar and Energy Conservation Multi-fuel Stoves Kotzebue 8,999 Super Insulated Office Fairbanks 75,000 * This project 50% federally funded. ** This project is 100% federally funded. Feasibility of adding a new, wood-fueled boiler plant to mill site, with possibility of including a steam turbine and generator for co- generation of electric power. Ongoing. Feasibility of a single wire ground return transmission system. Complete. Feasibility of a single wire ground return transmission system. Complete. Residential application of solid and liquid fuel heating systems. Complete. Retrofit of a commercial building to apply thermal insulation to exceed in- dustry standards. Complete. -105- Table 26. Alternative Energy Projects - Office of Energy Springs * This project 50% federally funded. ** This project is 100% federally funded. -106- Information and technical literature exchange for governmental agencies and private industry. Ongoing. U.S. Department of Energy project directed at locating and awarding unique energy conservation applications throughout the United States. Publication of book designed to assist in determining feasibility of 160 kW hydro— electric projects under Complete. (contined) APPROPRIATION NAME OF PROJECT LOCATION (approx. $) COMMENTS E. Alternative Energy Information Bioenergy Outreach Anchorage 20 ,000** Innovative Technology Anchorage -0- Awards Complete. Micro-Hydroelectric Anchorage 47,000 Information Project 150 kW. F. Geothermal Development Pilgrim Hot Springs Pilgrim Hot 200,000 Soil analysis and drilling project to determine geothermal potential of hot springs. Complete. Table 26. Alternative Energy Projects - Office of Energy NAME OF PROJECT LOCATION G. Energy Center Projects Alcohol Fuel Kenai Energy Resource Fairbanks Handbook Ground Source Heat Pump Fairbanks Hydroelectric Icing Fairbanks Solar Panel Fairbanks Demonstration Zeolite Energy Storage Fairbanks * This project 50% federally funded. (continued) APPROPRIATION (approx. $) 190,000 55,820 229,780 150,000 120,000 149,591 ** This project is 100% federally funded. COMMENTS Construction of ethanol fuel plant designed to utilize used grain from livestock feed and livestock waste for a methanol source. Complete. A comprehensive evaluation of Alaskan energy resources. Complete. Installation of residential heat exchangers to extract heat from surface soil. Complete. Study concerning problems associated with the forma- tion of ice at hydroelectric dam sites. Complete. Demonstration of solar hot water production in a recrea- tional building. Ongoing. Study of Alaska zeolites to determine potential for thermal storage. Complete. -107- Fueled by the oil embargo of 1973, Alaska followed a growing national trend of experimentation with alternative technologies up through the late 1970's and into the early 1980's. As different technologies developed across the U.S., the State was faced with the problem of installing and testing equipment that did not have a long history of successful operation. An additional difficulty for Alaska was determining the impact of climate on mechanical operation. On the administrative side, rapidly growing energy program budgets strained State resources. Millions of dollars were rapidly appropriated for conservation and alternative energy projects during this period. The State was faced with developing effective project and program management plans, regulations, and procedures for handling a variety of popular programs. Project administrators worked to develop technical expertise in areas that were largely unfamiliar. In the alternative energy field, projects were implemented on the basis of specific legislative appropriations or federal dollars that required the State grantees to limit research or applications to a specific technology or locality of the State. The resulting alternative energy program encompassed a checkerboard of projects, which ranged from research and development to fully commercialized technologies. At present, the Office of Energy's alternative energy activities include completion of demonstration projects that were previously appropriated to the DEPD, acquiring federal funding for additional alternative energy projects, and creating an attractive climate for investment in projects by the private sector. Projects are discussed by topical area in the next sections. WIND ENERGY PROJECTS Power generation from the wind has been part of Alaska's power development scheme since 1976. At that time, the Department of Commerce and Economic Development began several demonstration projects as a result of an appropriation made by the Alaska Legislature. Demonstration projects were performed to determine the feasibility of both electrical grid intertie machines and battery storage type systems. Alaska's initial attempts to use wind turbine generators (WTG) were saddled with a number of liabilities. WTG technologies were largely experimental, with only a few projects in Europe and California achieving economic viability. Alaska demonstration projects were far removed from technicians and suppliers, and logistical costs were high. And the failure rate within this budding industry was and continues to be a concern. The project objectives were, consequently, more oriented toward technical performance than economic feasibility. -108- Despite these drawbacks, nine separate WTG projects were undertaken with State money. Two very early installations took place in Nelson Lagoon and Sheldon Point. The former was an intertie machine, a 20 kW Grumman, while the latter was comprised of a series of 2 kW battery bank installations providing individual homes with electricity. The 20 kW Grumman encountered mechanical problems and was finally dismantled after providing some 2,000 hours of operation with over 70 percent of the average load being met at various times. The Sheldon Point project has gone through a major redesign and is now providing satisfactory power to five households with anticipated expansion to seven others. Unalakleet, Skagway and Port Alexander continue to operate inter- mittently successful projects. Small installations in Shishmaref and Wales hold promise for future development in the Bering Straits area. However, projects in Kotzebue and Newhalen are no longer operational due to equipment failure and the lack of an operations and maintenance (0&M) network to keep generators on line. Continued work includes a proposed installation in the Kotzebue area and a reconnaissance of Western Alaskan villages for both electric and thermal power options. The Kotzebue installation will test an ESI 54 wind turbine. This machine has been used in several California wind farm applications. During that same initial period several wind monitoring studies were funded. The most notable was an appraisal of the Bristol Bay area which charted specific wind regions around the area. The purchase of some 20 anemometers for distribution and data collection was initiated and eventually taken over by the Arctic Environmental Information Data Center (AEIDC) at the University of Alaska. Although wind energy resources are considered in various Alaska Power Authority reconnais- sance studies, it has most often been in a secondary role. Development by private investors has failed to materialize in a subs- tantive way. Alaska's remoteness and severe weather conditions have made investors reluctant to approach the potential market. Still many private WTG's exist across the State as an electrical supplement to predominantly diesel generation. The most recent information available on the statewide wind energy picture is a report titled, "Alaska's Wind Energy Systems," by Steven Konkel. It documents an inventory of over 140 wind generators producing electricity in the range of 17.5¢/kWh to $1.53/kWh. (These costs include the price of equipment, installation and O&M.) The lower end of this generating cost is very competitive with diesel which can easily exceed 60¢/kWh for unsubsidized production. -109- Successful implementation of a future WTG program by the State should satisfy three primary objectives, which are: 0 Determine the tolerable levels of wind supplemented power vis-a-vis existing diesel plants and transmission lines. Establish an adequate technical support network for operation and maintenance. Provide economic incentives necessary to encourage manufacturers and wind farm developers to undertake the risk of market penetration in rural Alaskan areas. To insure the commercial feasibility of a WTG project, the following steps should be taken: Oo -110- Details related to site selection should be worked out well in advance of development. Sites should be monitored for wind data for at least one year, if existing data is questionable. The local utility should be actively engaged in the project to the point of having trained technicians capable of servicing equipment as needed. Installations should be sufficiently large to attract the most reputable manufacturers and to insure quality of power in the event of down time to a particular machine. If the WIG sponsor is not a utility, there should be a power sales agreement between the sponsor and the utility with emphasis or intertie arrangements and buy back rates. Wind farm development design should be done in cooperation with the manufacturer, who is the best qualified to determine appropriate design. Sufficient information on demand, condition of existing conventional generators, and monitoring/load management should be available to insure quality power. BIOENERGY PROGRAM The goal of Alaska's Bioenergy Program is to promote the efficient use of wood, agricultural, animal and municipal solid waste for energy production. Over the past several years, State biomass expenditures have emphasized research and development in the area of wood gasi- fication. In the early 1980's, the State experimented with a commercially avail- able wood gasifier, which was designed to fuel a 125 kW engine generator using wood chips. This effort was followed by the construction of a prototype wood gasifier, which was linked to a 398 kW engine generator, designed to produce 250 kW of electricity. The goal of this research was to provide a foundation for the use of wood resources for energy production in rural Alaskan communities. This proved to be unrealistic, as the level of technology was too experimental for rural on-site application. In 1983-84, the State sponsored research on a prototype wood gasifier coupled with a free-piston Stirling engine. This project, completed at the end of 1984, attempts to lay new groundwork for a_ rural residential energy system which produces space heat, domestic hot water, and 3 kW of electricity. The same time period also included an unsuccessful effort by Kenai Peninsula Community College to demonstrate the use of Alaskan grain for energy production. This project is discussed further in the Alaska Energy Center Section. In the early 1980's, groundwork was layed for a residential peat project in Dillingham. Specific objectives for the project were: (1) test the federal and State permitting process for peat harvesting, (2) measure environmental impact on the ecology of the bog, (3) measure community reaction to peat harvesting for residential use, (4) test wet bog harvesting, drying, storage and delivery mechanisms and (5) to gather data on a sample of residential end users. This Dillingham project is now being carried forward by DNR's Division of Geological and Geophysical Surveys to assess the quality of the local resources. Resource studies of peat were also done during this time, including: "Peat Resource Estimation in Alaska"; "Peat Resource Maps for Areas of Dillingham, Talkeetna, Western Anchorage, and Tyonek"; "State of Alaska Peat Resource Assessment Program"; and "Peat Commercial Feasibility Analysis." Today, the State's biomass effort is carried out in cooperation with Bonneville Power Administration under the U.S. Department of Energy regional Bio-Energy Program. Alaska will fund at least four biomass feasibility studies under this program in 1984-85, using a $150,000 federal grant. -111- ELECTRICAL TRANSMISSION Between 1979 and 1982, the State performed feasibility studies, which culminated in the construction and operation of two single wire ground return transmission lines. These lines were constructed between the Alaska Village Electric Cooperative-owned Shungnak diesel plant and the community of Kobuk, and between the private Bethel Utilities and the community of Napakiak. The purpose of these demonstration projects was to determine the costs and technical feasibility of a electrical transmission system which provides centralized electrical generation systems to rural Alaska. The single wire ground return transmission system uses the ground as one conductor of the circuit. This system also uses a_ simple free-standing "A" frame structure, held upright by guy wires and/or line tension to support the one insulated circuit conductor. The line between Bethel and Napakiak was energized in October, 1980. The Bethel/Napakiak project was selected among the top five in the prestigious consulting Engineering Association of California's 1982 Engineering Excellence Awards Program. The performance report and design manual were published in April, 1982. A similar demonstration was energized in early 1982 in Northwest Alaska linking the villages of Shungnak and Kobuk. Both projects remain fully operational, saving the two communities costs over more expensive, local electricity generation. ENERGY CONSERVATION The Multi-fuel Stoves Project was a residential energy conservation effort carried out in the Kotzebue area. The original purpose was to test stoves that were capable of burning oil, wood or coal. This project was not completed as originally intended because of improper sizing and weight of the three units that were purchased. The Superinsulated Office Building Project was undertaken in Fairbanks in 1981. It's purpose was to replicate the success of the construction retrofits performed in Saskatchewan, Canada. The project objectives were diminished by the fact that the prime contractor, Minority Business Enterprises, was not suitably familiar with the methods and material necessary in this approach. The building has been monitored at various times by DOT/PF for infiltration problems. As a general conclusion, the building's thermal performance appears to be most affected by infiltration losses from both its walk-through traffic and poor detail work in the retrofit, including failure to use an air-vapor barrier prior to the insulation work. ALTERNATIVE ENERGY INFORMATION Several major projects were undertaken to make alternative technologies more accessible to the general public in Alaska. These included development of a micro-hydro electricity handbook, an innovative technology awards program, and a bioenergy outreach program. -112- MICROHYDROELECTRICITY HANDBOOK Funding for a micro-hydroelectricity handbook was provided by the Federal Government through the Federal Non-Nuclear Energy Research and Development Act of 1974. Funds were channeled through the Alaska Power Administration to support development of a small-scale hydroelectric sourcebook. The goal was to produce a tool for the layperson to perform a low level feasibility study for projects of less than 100 kW. A second component was to provide engineering assistance. The resultant Hydroelectric Commercialization Kit provided information on stream flow measurements, equipment, power production calculations, permit requirements and transmission. Although small hydroelectric development has a _ relatively expensive front loaded cost, the publication has been very popular. The original printing has been completely distributed and a second printing is underway. The number of projects begun because of this kit is unknown, however. INNOVATIVE TECHNOLOGY AWARDS The Federal Department of Energy has initiated a program for energy innovation in order to compile an annotated list of outstanding pro- jects. The goal is to provide a sourcebook to stimulate the replication of appropriate technologies. The awards for 1984 were recently announced and will constitute the first entries for a publication expected to be printed in spring, 1985. BIOENERGY OUTREACH PROGRAM The goal of the Outreach Program is to assist in the development of business opportunities for using biomass (wood residue, agricultural refuse, and municipal solid wastes). This goal is accomplished by promoting the use of biomass for energy production, and results in stimulation to forestry and agriculture industries by advocating effective use of natural resources. The Bioenergy Outreach Program serves as a centralized clearinghouse for bioenergy information in the State. Efforts initially were con- centrated on solicitation of information, particularly studies and technologies applicable to Alaska's biomass resources. Currently, work is underway to improve public access to bio-energy materials by compiling an annotated, bibliographic index. Subject areas include: resource assessment, technical, economic and environmental aspects of biomass recovery and utilization; and energy conversion processes and technologies (for example, gasification, co-generation). Sawmill residue and timber waste are the most frequently addressed biomass resource, but information is available on a wide variety of sources (from municipal solid waste to hog manure). Mailing lists of individuals, businesses, and organizations within the State concerned about bioenergy issues are available, and interested parties can receive newsletters and bioenergy information from the Office of Energy. U.S. wide information resources are also being -113- developed for people interested in defining levels of biomass technology, locating particular biomass combustion equipment, or doing feasibility studies on biomass potential for specific sites. GEOTHERMAL DEVELOPMENT Test drilling was done at Pilgrim Hot Springs to identify the site's potential to provide an alternative electrical generation resource for the Nome area. Drilling began in 1979 and concluded in 1982. The project also addressed other possible resource uses such as the siting of Mary's Igloo near the hot springs area, development of a recre- ational area and development of a State-operated reindeer experimental station. The project is described in a February, 1983 final report and an April, 1983 drilling results report by Woodward-Clyde Consultants. A petroleum engineering evaluation done at the University of Alaska, Fairbanks in December, 1982 concluded that deeper test holes were needed to identify geothermal resources having the capacity to serve Nome's electrical needs. ALASKA ENERGY CENTER The Alaska Energy Center was established by the Legislature in 1980 as a public corporation empowered to develop alternative energy technologies. Within a year of start-up, the Legislature reversed itself and vetoed further appropriations to the Energy Center. Projects arising from the short existence of the Energy Center included: 0 Alcohol Fuel Study - Kenai Community College. The project was expected to demonstrate the feasibility of using grains from the Alaska barley crop for fermentation into alcohol fuel. The network necessary for completion has not proved effective and the project was disbanded. 0 Energy Resource Handbook - A Geophysical Institute Project. A compendium of information on Alaskan energy resources from fossil fuels to renewables. Publication was in the fall of 1984. Neil Davis is the author. 0 Ground Source Heat Pump Study - University of Alaska project to test the performance of an air to air and fluid to air heat pump utilizing three foot deep ground coils and a freon type transfer medium. The project showed good promise prior to completion and should have received longer term funding to study the impact upon soils and ground heat recovery. 0 Hydroelectric Icing - A University of Alaska Geophysical Institute study of icing problems inherent in the construction and operation of hydroelectric facilities in Alaska and ways to overcome them was completed. -114- 0 Mary Siah Recreation Center Solar Panel Demonstration - A Fairbanks North Star Borough Project. The largest active solar project in the State, the project's objective was to produce 15 percent of the annual thermal demands put upon the building. Data monitoring is not fully in place to determine results as yet. 0 Zeolite Energy Storage Research - University of Alaska study of zeolites aS a Storage medium for thermal energy production. Completed. UNIVERSITY OF ALASKA — RESEARCH The University of Alaska (UA) is involved with a number of research and development projects related to improving energy efficiencies. For example, a prototype design employing passive solar heating and superinsulation techniques was implemented in the construction of the Two Rivers Elementary School in Fairbanks. The building is being monitored and a report on its performance should be available in 1985. UA analysis of existing energy systems has also added to the research and development information available to Alaskans. Energy projects are completed within the Institute of Water Resources and the Engineering Experimental Station with funding from the Department of Transportation and Public Facilities. The first area of research is a rural power quality program designed to determine the extent of electric power disturbances affecting rural State facilities. The results of this project will include analysis of 12 months of data collected in a monitoring period, a tabulation of power system disturbances, and a set of recommendations on how to protect electrical components from such disturbances. A second project has been undertaken to survey home and small scale commercial heating units to determine typical operating efficiencies and the effect of maintenance on the performance of such units. Third, a two phase program will evaluate air qualities and thermal resistances. Heat exchange rates and the variables associated with building ventilation characteristics will analyze the air exchange rates in nine buildings. The thermal resistance of 6-inch and 8-inch walls with metal studs will also be compared to other structure performances. And finally, analyses of insulation shape factors will lead to development of design criteria for insulation foundations based on the relationships of shape to heat loss. -115- UTILITY REGULATIONS The Alaska Public Utilities Commission (APUC) is the only State agency authorized to certify and regulate public utilities and pipeline car- riers. The goal of the APUC is to ensure that utilities and pipeline carriers are able to provide adequate, efficient and safe services to the public and that rates, terms and conditions are just and reasonable. The APUC consists of five commissioners, an executive director and 45 employees who report to the executive director. The commissioners approves all rates, rules and regulations of the utilities it regulates and responds to complaints by consumers. Some electric utilities can be exempt from APUC regulations. These include: 1. a utility owned and operated by political subdivisions of the State such as municipalities; 2. a cooperative utility that elects to be exempt; 3. a utility that grosses less than $50,000 annually; or 4. a utility that grosses less than $325,000 annually and elects to be exempt. There are 59 electric utilities that are certified by the APUC, of which 34 are regulated. The Regional Data Summary lists these utilities. The APUC also regulates pipeline carriers. The APUC certifies requests from eligible utilities for monthly Power Cost Equalization payments and determines what costs are eligible. The Power Cost Equalization Program is described in the Subsidies Section of this plan. In December 1981, the APUC adopted regulations to comply with federal Public Utilities Regulatory Policies Act (PURPA). These regulations intend to promote the three purposes of PURPA which are conservation of energy, efficient use of facilities and resources by electric and natural gas utilities, and establishment of equitable rates for electric and natural gas consumers. PURPA regulations require utilities to purchase power from small power producers and cogeneration facilities to sell power to utilities at the avoided cost of the utility. APUC regulations (3 AAC 40.750-.820) determine avoided cost by dividing the fuel and variable operation and maintenance costs for a 12 month period by the number of kilowatt hours sold for that period. Expenses and kilowatt hours sold associated with hydroelectric generation must be specifically excluded from the computation of avoided costs for an electric utility which relies on hydroelectric generation for 29 percent or more of its total power requirement. -116- LEASING AND MARKETING Alaskan resources are obtained through the leasing of State and federal land and sales of royalty to in-State and out-of-State markets. Leasing of tracts for fossil and geothermal power sources is done by the Department of Natural Resources. Sales of royalty oil and natural gas are handled by the Department of Natural Resources, while the Department of Commerce and Economic Development,through the Office of Energy, fosters opportunities for public and private sales agreements with national and world markets. ROYALTY PROGRAM As a result of the lessees' production from both the Prudhoe Bay and Kuparuk River Units on the North Slope, the State is entitled to receive as its royalty share 12.5 percent of the oil and gas produced. AS 38.05.182(a) states, in part, that any royalty "may be taken in-kind rather than in money if the Commissioner (Department of Natural Resources) determines that taking in-kind would be in the best interest of the State." When royalties are taken in money (in-value), individual lessees market the State's share of production. The State subsequently receives the money value the lessee realizes from the sale of the oil as measured by several alternatives provided in the lease forms. These include the actual sales price, the reported prices of neighboring leases and, when available, posted field prices. When the State takes its share of production in-kind, the State actually receives the oi] and the Commissioner of Natural Resources, acting on behalf of the State, disposes of the oi] to third parties through noncompetitive, negotiated sales or through competitive sales to the highest qualified bidder. In 1983, about 78 million barrels of royalty oil were produced (214,000 barrels per day). Of the total royalty oil produced, about 45 million barrels or 123,000 barrels per day were taken in-value. About 33 million barrels or 91,000 barrels per day were taken in-kind and sold to in-State refiners. State royalty income is about $1.5 billion per year. Taxes from the petroleum industry amount to $1.5 billion per year. Together these amount to 85 percent of total State income. The statutes which govern the Department's sale of royalty oil clearly favor competitive sales to maximize economic gain, unless it is de- termined that no competition exists, or that it is not in the State's best interest to sell competitively. Although the State of Alaska has conducted both competitive and noncompetitive disposals, most disposals have been long-term, negotiated contracts with in-state processors. The State currently has contracts with Chevron for 18,000 barrels per day from Prudhoe Bay, Tesoro for 7,000 barrels per day from Cook Inlet fields and 40,000 barrels per day from Prudhoe Bay (this will increase by 26,000 barrels per day in 1985), MAPCO for 35,000 barrels per day from Prudhoe Bay and Golden Valley Electric for 5,000 barrels per day from Prudhoe Bay. -117- Rather than attempting to maximize economic benefit alone, in most recent sales of royalty oil, the Commissioner of Natural Resources has determined that it was in the State's best interest to provide a secure supply of royalty oil to in-state refiners at prices at or above the in-value price of the State's oil. These decisions were based on the applicable statutes and regulations, which require that the in-state needs be met before oil can be sold for export from the State. In each instance where noncompetitive sales have been favored, other factors, such as a secure in-state supply of refined products and increased tax base and expanded employment were considered in addition to price offered in the negotiated contracts. A competitive royalty oil sale was held December 11, 1984. About 90,000 barrels per day from Prudhoe Bay and Kuparuk reservoirs were offered in 5,000 barrel per day lots. Eight lots were sold under six-month contracts, and 10 were sold under 12-month contracts. Companies that sell refined petroleum products in Alaska received a bidding priority to allow them to meet the highest bid prices. Backup contracts were solicited prior to the sale in case all of the offered oil was not sold or a successful purchaser defaults on its contract. Backup contracts were established with USA, Inc.; Texaco; U.S. Oi] and Refining Company; and Chevron U.S.A., Inc. The State received an extra $17.6 million from the sale, and all lots were sold. Companies won the lots by submitting bids on a premium over and above the base price of the oil. U.S. Oil and Refining Company was the high bidder, offering the State $18.96 per barrel, $1.04 over the base price for Prudhoe Bay oil of $17.92 per barrel. Kuparuk River oi], with a base price of $16.92 per barrel, received bids ranging from 17 cents to 82 cents over the base price. Successful bidders included Texaco, Inc. with a premium bid of 64 cents for eight lots (40,000 barrels); Chevron U.S.A., Inc. with a premium bid of $1.03 for four lots of Prudhoe Bay oil (20,000 barrels) and bids of 17 cents and 82 cents for two lots of Kuparuk River oil (10,000 barrels); U.S. Oi] and Refining Company with a bid of $1.04 for two lots of Prudhoe Bay 011, Sohio Alaska Petroleum with a bid of 51 cents for one lot of Prudhoe Bay oil, and Union Oil Company with a bid of 53 cents for one lot of Kuparuk Oi]. In 1983, about 1.07 billion cubic feet of royalty natural gas was produced, most of it from Cook Inlet fields. There is no system in place to transport natural gas from the North Slope; however, the State does receive compensation for royalty gas used in the maintenance of the oil production at Prudhoe Bay and Kuparuk Units. A total of 1.02 billion cubic feet of natural gas was taken in-value. This generated about $6.8 million for the State. Approximately 45 million cubic feet were taken in-kind from Cook Inlet fields and sold to Enstar Natural Gas Company for consumption in Southcentral Alaska. The State received $147,000 as the result of this contract which ended July 1, 1984, -118- OIL AND GAS LEASING Through identification and inventory of oil and gas resources, the Department of Natural Resources (DNR) selects lands with oil and gas potential and places them on its five-year oil and gas leasing schedule. (See "Five-Year 0i1 and Gas Leasing Program," DNR, Division of Oi] and Gas, January 1985). The schedule is put together on the basis of nominations by industry, State and local interests. The current schedule is shown on Table 3. Title 38 of the Alaska Statutes, Public Lands, charges DNR with primary responsibility for management of the State of Alaska's subsurface hydrocarbon and mineral resources. Title 38 was amended in 1978 to include a requirement that DNR submit to the Legislature an annual report detailing a five-year schedule for the leasing of State land for oil, gas, and coal exploration. In FY '85, DNR has been appropriated $2.6 million to carry out activities related to leasing and resource investigations. The objectives of the oil and gas leasing schedule are: 1. To adhere to an oil and gas leasing program, as required by State statute, that is predictable and dependable, so that the petroleum industry, the public, and the federal and State governments may efficiently plan oil and gas related activities and fiscal expenditures. 2. To coordinate leasing with nearby owners of subsurface rights, particularly the federal government, so _ that: (1) statewide oil, gas and coal leasing activities are cohesive regardless of land ownership; (2) geologic and environmental data may be shared if possible; (3) drainage of commonly owned petroleum reservoirs may be equitable; and (4) oi], gas, coal and other mineral exploration and development may continue while ownership disputes are being resolved. 3. To collect resource information adequate to estimate a fair return to the State when developing leasing procedures and terms of sales and for long-term fiscal planning. 4. To obtain the maximum economic return to the State and its citizens from the sale of State-owned oi] and gas resources by using an optimal mix of bidding methods and by encouraging competition. 5. To lease first in the most prospective areas and near areas in which development has been or is taking place so that potential additional development may take advantage of existing facilities wherever possible. 6. To maintain access to promising 011, gas and coal areas by reserving access corridors and by avoiding commitments to incompatible surface uses in key transportation corridors. -119- 7. To avoid hindering development or placing an undue burden on industry, by simplifying necessary regulations so they are fair and effective. 8. To work with local citizens, local governments, special interest groups, and other government agencies when selecting areas for leasing, designing lease sales, and when approving permits. 9. To encourage the petroleum industry to provide local training programs and to hire local people for available jobs. 10. To protect the integrity of affected cultures, the environ- ment, and fish and wildlife resources through plans of oper- ations, leasing and permit stipulations, and comprehensive monitoring operations. The Five-Year Leasing Program is developed within a framework of private and public fiscal considerations. Although it is impossible to accurately forecast future State revenue requirements and future hydrocarbon developments, it is worthwhile to look at projected revenue from existing reservoirs and determine the magnitude and timing of future discoveries that would be needed to maintain an adequate level of State revenues. Both physical production and revenue (estimated price at which the oi] may be sold) are considered in developing forecasts on State leasing opportunities. In 1978, the Legislature amended the State's oil and gas leasing statutes in an effort to infuse a broader range of public purposes in the leasing process. AS 38.05.180(a) states: "The Legislature finds that: (1) the people of Alaska have an interest in the development of the state's oil and gas resources to (A) maximize the economic and physical recovery of the resources ; (B) maximize competition among parties seeking to explore and develop the resources; and (C) maximize use of Alaska's human resources in the development of the natural resources; (2) it is in the best interests of the state to encourage an assessment of its oi] and gas resources and to allow the maximum flexibility in the methods of issuing lease to (A) recognize the many varied geographical regions of the state and the different costs of exploring for oil and gas in these regions; and (B) minimize the adverse impact of exploration, development, production, and transportation activity." Although the simultaneous maximization of these various purposes is mathematically impossible, the amended statutes provide the Department of Natural Resources with a variety of options for their realization. -120- AS 38.05.180(f) authorized seven different leasing methods that are combinations of cash bonuses, royalties, net profit shares (NPS), and work commitments. These leasing methods are composed of two types of payments, up front payments, such as a bonus, and contingency payments, such as royalties and/or net profit shares. The contingency payments are a liability to the firm only if a commercial discovery is made and production occurs, whereas the bonus is a payment for the right to explore and develop. These methods of payment distribute geological and economic risks between lessor (State) and the lessee as well as_ influencing incentives to explore and develop. With bonus payments, geological and economic risks reside with the lessee. Contingency payments redistribute some of these risks to the lessor. The one risk not shared is the dry hole risk. That is, the full cost of an exploratory well is still borne by the lessee even though the lessee may have a substantial royalty or NPS liability should a commercial discovery occur. Thus, there is a fundamental asymmetry between who bears the costs and who receives the benefits in leasing systems that rely heavily on royalties, severance taxes or NPSs. This asymmetry is a disincentive to the drilling of exploratory wells. Exploration Incentive Credits (EICs) are designed to offset these disincentives and encourage frontier exploration. Exploration Incentive Credits are authorized by AS 38.05.180(i) which states in part: "The Commissioner (DNR) may provide for the establishment of an exploration incentive credit system under which a lessee of State land drilling an exploratory well on that land may earn credits based upon the footage drilled and the region in which the well is situated .... Credits may be used during a limited period established by the Commissioner and may be assigned during that period. Credits may be applied against (1) oi] and gas royalty and rental payments payable to the State or (2) taxes payable under AS 43.55.0111 -- 43.55.150." Sale 36, Beaufort Sea near Flaxman Island, held May 26, 1982, was the first sale to employ EICs. A total of 13 tracts covering approximately 56,862 acres were put up for lease and all were leased. Lease terms included a 40 percent NPS and EICs of $750 per foot drilled not to exceed 40 percent of the total exploratory well cost. This credit was applicable to the initial exploratory well on a given tract. Sale 36 has generated one exploratory well, G-2, drilled by a consortium made up of Exxon, British Petroleum Exploration, and Sohio. The well was plugged and abandoned on August 22, 1983. The well cost approximately $49 million. The State's share of expenses was about $12.4 million. -121- Sale 37, held on August 24, offered 217 tracts in the Tanana and Copper River basins. Thirty-three tracts comprising about 168,849 acres were leased. The lease terms included a 30 percent net profit share balanced by an exploration incentive credit of $250 per foot, not to exceed 30 percent of exploratory well costs. ARCO has drilled on exploratory well in the Sale 37 area. Totek Hills No. 1 was spudded on July 19, 1984. Sale 34 (September 28, 1982) represented the largest offering of acreage in State history. Approximately 1,231,517 acres were offered and 571,954 acres leased. The sale had two sets of lease terms. One had a 40 percent NPS with EICs of $500 per foot drilled, the other a 30 percent NPS with EICs of $375 per foot drilled. Two exploratory wells have been drilled in the Sale 34 area. Union and ARCO participated in Leffingwell No. 1 which was spudded on February 2, 1984 and abandoned on August 12, 1984. The State's share of the exploration expenses was $7,412,000. On March 27 of this year, Exxon spudded Alaska State J-1. The well was plugged and abandoned on June 14, 1984. Exxon has not submitted cost data as yet. In addition, Exxon has a permit to drill Alaska State K-1 in the same general area as J-1. As of this date the well has not been spudded. Sale 39 offered 211,988 acres of submerged and on-shore lands northwest of Prudhoe Bay and north of Kuparuk on the Beaufort Sea coast. All 42 tracts received bids in the May 17, 1983 sale. Tracts in Sale 39 had either NPS shares of 30 or 40 percent and EICs of $1,600 or $1,200 per foot drilled. The differing shares and rates were related to the Division's evaluation of a particular area's potential. One well has been drilled in the Sale 39 area. Sohio began drilling Long Island No. 1 January 26, 1984. The well was drilled to a total depth of 11,600 feet. Long Island No. 1 was abandoned on March 6, 1984. No cost information has been submitted to the State. Texaco has received a permit to drill two wells. Colville Delta No. 1 is scheduled to begin in January 1985. Texaco's Jones Island prospect is also scheduled for drilling this winter. Sale 43A is the most recent sale involving NPS and EICs. Sale 43A was held in conjunction with Sale 43 on May 22, 1984. Fifteen tracts were encumbered with an NPS of 30 percent balanced by EICs of $1,200 or $375 per foot. The differing rates are a reflection of the expenses associated with off-shore as opposed to on-shore exploratory drilling. Since Sale 30 (December 12, 1979), the State has issued 317 NPS leases of which 223 are combined with EICs. A very small percentage of these EICs will be exercised because most tracts probably have insufficient hydrocarbon potential to justify the drilling of an exploratory well. -122- Even so, the program may result in significant State expenditures in the long run. It should be remembered that the EIC program is designed to offset some of the disincentives (royalties, severance taxes, NPS, and income taxes) to exploration inherent in the State's posture toward the oi] and gas industry. Even with minimal taxes and royalties, the State collects from 25 to 28 percent of each dollar of oil revenue from commercial discoveries. However, commercial discoveries require the drilling of an exploration well. It seems obvious that 25 to 28 percent of zero revenue adds little to the State's future. The EIC program will encourage the drilling of exploration wells by sharing the dry hole risk with the lessee. The planning and execution of an oil and gas lease sale is lengthy, taking up to 61 months to complete a 21 step process. Involved are DNR, other State agencies, the public, local communities and private sector business interests. The early announcement of a potential sale encourages the early mobilization of public and private resources for the purpose of gathering geological/geophysical, environmental and socioeconomic information relevant to the proposed sale area. COAL LEASING Coal lease sales are completed in conjunction with the development of coal atlases. Five-year lease schedule proposals call for work in the Chignik-Herendeen, Kenai, Farewell, Bering River, and North Slope fields. Scheduled coal lease sales have included the western one-third of the Matanuska coal field in 1984, and the middle and eastern sections of the Matanuska field will be leased throughout the next six years. GEOTHERMAL LEASING Geothermal sites are found throughout Alaska. Lease sales for development of this natural power source are anticipated. There are no specific lease sales planned at present and there are no active geothermal prospecting permits. During the State's first geothermal lease sale in 1983, only one bid was offered, and one lease issued. Most geothermal resources are located too far from potential markets to be of interest based upon current economies and technology. RESOURCE MARKETING The Office of Mineral Development (DCED) works closely with DNR on mineral extraction schedules and resource mapping. The Office of Energy (OE) acts as a facilitator or catalyst for private sector marketing of petroleum products out-of-state. The OE also acts as a marketing advocate by encouraging private investment in alternative technology development and by sponsoring federally funded projects that will lead to utilization of Alaskan resources for power development. -123- ALASKA’S ENERGY ISSUES -125- 4. ALASKA’S ENERGY ISSUES Numerous energy issues face Alaska, and the 1985 Energy Plan provides the mechanism to form an action plan that seeks to resolve those issues. Previous sections of this plan have been a prelude of technical information from which a State energy action plan can be drawn. Energy issues were grouped into eight discussion areas. These are: 0 Planning 0 Energy Systems 0 Energy Costs 0 Alternative Technologies 0 Subsidies oO Technical Assistance ° Conservation ° Major Energy Projects Collectively, these issues touch virtually every energy problem and opportunity that faces Alaska Each issue was then analyzed. Focus was placed on areas where State agencies could take action to bring program delivery closer to the six stated goals prepared at the onset of the 1985 Energy Plan development process. Strategies to resolve the individual issues were synthesized next, and from those strategies evolved one or more program options. Options are the action items of the 1985 Energy Plan. Each option includes a brief description as well as the specific action that is needed to carry it through. The type of action includes budget requests (BR), proposed legislation (L), regulations (R), memorandums of understanding between agencies (MOU), administrative orders from the executive branch (AQ) and continuation of existing effort (C). Alaska's energy issues, proposed strategies, and itemized list of options as presented in Table 27. The sections to follow look at each energy issue and propose a series of options that can be selected when formulating Alaska's future energy actions. -127- Table 27. Energy Issue Summary ENERGY ISSUE STRATEGY OPTION AGENCY y ACTION a PAGE # 1. PLANNING 1. Improve states knowledge 1. Coal assessment - DNR C of primary energy Matanuska resources ~ 2. Coal assessment - DCRA c % Cape Beaufort 3. Reconnaissance and Feasibility work APA G 4. Unalaska Geothermal APA G Exploration Project 5. Computer library and DNR C mapping program 2. Energy date collection 1. Reporting units OE BR workgroup 2. Electric consumption APA BR 3. Export/import data OE/DNR BR 3. Methodology for 1. APA process adoption GOV AO project feasibility 2. Uniform format to OE CG request project funds Table 27. Energy Issue Summary (continued) ENERGY ISSUE STRATEGY OPTION agency 1/ action 2/ pace # 1. PLANNING 4. Energy Contingency 1. Rural Mini-Cabinet APA/DCRA G (Continued) Plan generator failure task 2. Market filures plan OE BR 3. Circuit rider program APA BR 5. Systematic planning 1. Long-term planning OE C with public coordination 2. Power systems planning APA BR 3. State block grants DCRA BR 4. Expand community profiles DCRA BR -62I- ENERGY ISSUE 2. ENERGY PRICE -O€I- STRATEGY 1. Reduce energy costs especially electricity and heating 2. Reduce consumer price disparities Table 27. Energy Issue Summary (continued) OPTION . Generator sizing and operator training . Fuel oi1/fuel tank grants and loans . Weatherization . Waste heat development . Cooperative fuel buying . Advisory Committee on power costs . Continue PCE and investigate alternatives . Real power cost comparisons . Price comparison between fuels and regions acency 2/ action 2/ pace # APA DCRA/DI DCRA APA DCRA GOV APA APA APA/OE BR Cc BR BR AO BR BR BR Table 27. Energy Issue Summary (continued) ENERGY ISSUE STRATEGY OPTION agency 2/ action 2/ pace # 3. SUBSIDIES 1. Cost effective 1. Grants administration DCRA/DOA Cc electrification grants 2. Design and feasibility APA ¢ criteria for grants 3. Advance funding for APA BR design and cost estimating 4. Systematic energy grant OE MOU review 5. Grant completion DCRA BR follow-up 2. Incentives for 1. Amend PCE for utility APA R improved efficiencies eligible cost reductions 2. Amend PCE for utility OE L customer benefit 3. Prevent fuel substitutions APA R 3. Alternative subsidy 1. Target essential needs OE L rates 2. Power subsidies to APA R customers 4. Continue to administer 1. Continue LIHEAP DHSS Cc federal assistance 2. Seek federal block DHSS Cc grant money wLoey Table 27. Energy Issue Summary (continued) ENERGY ISSUE STRATEGY OPTION acency 2/ action 2/ pace # 4. CONSERVATION 1. Thermal and lighting 1. Fulfill regulation DOT/PF R standards AS 46.11.010, public facilities 2. Fulfill regulation DCRA C AS 46.11.040, residential standards aCels 3. Life cycle costs in State DOT/PF C constructed facilities under AS 35.10.160-.200 4, Energy Conservation Plan APA BR for power projects under AS 44,83.400_ .- 2. Thermal efficiency 1. Furnace retrofit. i DCRA BR improvements program expansion 2. Energy rating systems GOV AO 3. HUD adoption of local DCRA Cc requirements 4, Review energy conservation DCRA G programs 5. Low interest conservation OE/DI BR loans 6. Energy education DCRA BR 7. Building incentives DCRA BR ENERGY ISSUE 4. =e8t- CONSERVATION (Continued) 3: STRATEGY Reduce public facilities energy costs . Reduce State trans- portation expenditures Table 27. Energy Issue Summary (continued) OPTION . Design build competion . State/federal match to institutions Complete audits . Telecommunications instead of travel . Encourage car pooling and mass transit Improve gas mileage of State motor vehicle fleet acency 2/ action 2/ pace # DOT/PF C DCRA BR DOT/PF BR DOA Cc DOT/PF Cc DOT/PF Cc ENERGY ISSUE STRATEGY 5. ENERGY SYSTEMS 1. Upgrade rural electrical distribution system vel 2. Bulk fuel facilities 3. Regional grids or interties Table 27. Energy Issue Summary (continued) OPTION agency 2/ action 2/ pace # 1. Provide financing to APA BR utilities 2. Statewide assessment of APA BR distribution lines 3. Criteria for upgrade or APA R replacement 4. Amend rural electrification APA R revolving loan fund 1. Inventory of bulk fuel DCRA BR facilities and needs 1. Anchorage-Fairbanks intertie APA C power dispatching 2. Regionalize grid require- APA BR ments | : ENERGY ISSUE 6. ALTERNATIVE =SEl= TECHNOLOGIES STRATEGY 1. Emphasize applied research and commercial applications 2. Third party financing and market tests 3. Technical personnel network 4. Regulations and tax laws favoring alter- native technology investments 5. R&D grants program 6. PCE incentives to promote alternative technologies Table 27. Energy Issue Summary (continued) OPTION . Project manager procedure . University of Alaska research coordinated with other State agencies . Advertise Alaskan third party financing interest . Provide low interest loans . Advisor group . Expand State loans . Tax credits . Innovative research grants program Allow alternative tech- nology development while PCE active acency -/ action 2/ pace # OE C OE BR OE CG DI L OE BR OE/DI L OE L OE C OE E -9€I- Table 27. Energy Issue Summary (continued) ENERGY ISSUE STRATEGY OPTION acency 2/ action 2/ pace # 7. TECHNICAL ASSISTANCE 1. State financing of 1, Use APA technical APA C technical assistance assistance for power system problem resolution 2. Utilize Mini-Cabinet DCRA Cc technical assistance workgroup 3. MOU intergrating DCED APA/DCRA MOU (APA) and DCRA programs 4. Support community energy DCRA BR Management program 8. MAJOR ENERGY =LEt- ENERGY ISSUE PROJECTS STRATEGY 1. Four Dam Pool power sales agreements 2. Susitna evaluation 3. Bradley Lake evaluation 4. Cook Inlet natural gas Table 27. Energy Issue Summary (continued) OPTION . Long-term supply at equitable costs . Continue Susitna FERC application . Negotiate Susitna power sales agreement Susitna finance plan . Continue Bradley Lake FERC application . Negotiate Bradley Lake power sales agreement . Bradley Lake finance plan Gas leasing Domestic/foreign sales Electric conversions to natural gas Motor vehicle conversion to natural gas Exploration incentives acency 2/ action 2/ pace # APA APA APA APA APA APA APA DNR OE OE OE OE BR BR oOo oa & ~8EI- ENERGY ISSUE Table 27. Energy Issue Summary (continued) STRATEGY OPTION 8. MAJOR ENERGY PROJECT (Continued) s 5. North Slope natural gas 1. Keep advised of Pacific Rim gas developments 2. Comparison to other energy alternatives 3. Feasibility studies 6. Stepped development 1. APA project approval process process adoption Agency Legend: DOA - DCED DCRA DI OE APA APUC DHSS DOT/P DNR GOV cat tet f Department of Administration Department of Commerce and Economic Development Department of Community and Regional Affairs Division of Investments, DCED Office of Energy, DCED Alaska Power Authority, DCED Alaska Public Utilities Commission, DCED Department of Health and Social Services Department of Transportation and Public Facilities Department of Natural Resources Office of the Governor Action Legend: BR - C AO L MOU R = Budget Request Ongoing or within routine budget request Administrative Order Legislation Memorandum of Understanding Regulation Change acency 2/ OE APA APA APA acTION 2/ PAGE # BR BR PLANNING ISSUE Alaska will face a number of energy choices in the future and a comprehen- sive plan is needed to chart the course which best meets the State’s goals. Alaska State Law (AS 44.83.224) requires that the Alaska Department of Commerce and Economic Development prepare and annually revise a long- term energy plan. In previous years, the long-term energy plan was written primarily by consultants. Although the information in each plan provided a reasonable analysis of the supply and demand for energy in Alaska, the plan was not a commitment to a strategy. Based on the response from previous public meetings and hearings, there is need for a strategic energy plan which recommends energy choices through an analysis of the issues. The 1985 Energy Plan differs from previous energy plans by first, placing emphasis on the short-term strategies of those State agencies that have direct responsibility for energy programs or projects, second, using an interagency working group to write the plan, and third, seeking resolution of issues in the long-term. This approach has made State agencies more aware of the information needs and decision-making procedures that should be included in a strategic energy plan as well as some of the shortcomings that currently exist. It has become apparent that identifying energy issues and measuring program effectiveness can be improved with better data. Strategy: 1: Improve the State’s knowledge of Alaska’s primary energy resources. OPTIONS: 1. More detailed assessment of coal deposits in the Matanuska Valley. Would require budget request by DNR, ongoing. 2. Complete detailed assessment of Cape Beaufort coal deposits. Work completed by cooperation between DNR and ODCRA. Specific budget request by DCRA, ongoing. 3. Continue reconnaissance and feasibility assessments to determine potential power sites and improvements’ in presently installed power systems. Would require budget request by DCED (APA), ongoing. 4. Complete the Unalaska Geothermal Exploration Project. Continuation of DCED (APA) effort. -139- Conduct resource studies to identify potential energy uses and store information in a computerized system capable of producing resource maps on a scale of 1:2,500,000 and in narrative summaries. Would require budget request, DNR, ongoing. m 2: Develop capabilities for the State to routinely collect regionalized data on Alaska’s energy consumption by end-user and determine prices at the local, regional and state level. OPTIONS: te Organize a workgroup to define comparable reporting units that are consistent among State agencies and obtain energy use and supply data that is consistent with computer entry and use routines. Complete a Memorandum of Understanding (MOU) that defines agency responsibility for collection and reporting of data. Report energy information in the annual energy plan. Agencies include DCED, DCRA, DHSS, ONR, DOT/PF, Department of Labor, and Department of Revenue. Lead agency, DCED (0E) would require budget request. Continue data collection and reporting by APUC and APA on electrical energy consumption and prices. Within routine budget request of DCED (APA) and DCED (APUC). Collect and report energy data on exports and imports for oil, gas, coal, electricity, and miscellaneous energy resources. Would require budget request by DCED (OE) and DNR. Strategy 3: Establish methodologies for energy projects which involve State funding that provide a reasonably accurate and objective determination of the engineering, economic, and environmental feasibility of a proposed project and its alternatives. OPTIONS: 1 -140- Adopt Alaska Power Authority's present value methodology for determining economic feasibility of energy projects. Would require an Administrative Order by the Governor to implement the process presently ongoing within DCED (APA). Standardize energy project budget request information to permit evaluation and prioritization of those requests. Included for comparison should be life cycle costing analysis, real dollar and socioeconomic benefits of project and total project cost (plus repayment amount and terms, if any) on detailed budget form 4A. DCED (OE). Within routine budget request. f Sk __ Strategy 4: Develop a contingency plan for the State which ranges from local emergen- S (i.e., diesel generator failure) to the impacts on Alaska from fossil fuel market failures. OPTIONS: iN Utilize the Rural Mini-Cabinet forum, in cooperation with the Governor's Office and Division of Emergency Services in the Department of Military Affairs, to develop a program to respond to diesel generator failures. DCRA and DCED (APA), ongoing program. Prepare an Alaskan Emergency Contingency Plan for market failures through a working group comprised of State agencies, resource suppliers, utility managers, community leaders, and other energy organizations. A joint chair by the Office of the Governor and DCED (OE) should be used. Would require budget request by DCED (OE). Develop a circuit rider program to reduce the number of diesel generator failures and improve operating efficiencies. Would require budget request by DCED (APA). ¥ PP ernie should be systematic and involve all levels of effort, including par- ’ pation by local communities, utilities, and nonprofit groups. OPTIONS: Me The Office of Energy should be the State's lead agency for coordinating organizations participating in the State's annual energy plan. Emphasis to include data needs and issues discussion. Within routine budget request by DCED (OE). Program ongoing. , The APA should develop and continue its regional and statewide electric power systems planning process. This process includes systems coordination and planning so that, as existing systems expand and new systems evolve, generation and transmission facilities are coordinated and planned such that they will operate economically and efficiently when they are eventually interconnected. Would require budget request by DCED (APA). ~141- -142- Analyze the concept of a state block grant to form local energy advisory groups which incorporates participation by local government, utilities, nonprofits, and the general public. Analyze the Fish and Game advisory committee method as an example of local input. Prepare an opinion for public discussion. Would require budget request by DCRA. Expand DCRA Community Profiles to include more explanation of energy needs and costs, plus an inventory of power sources. Also expand the number of community profiles Prepared annually. DCRA. Would require expanded budget request. _ ENERGY PRICE ISSUE There are significant disparities between urban and rural Alaska in the price of energy. Analysis has shown that in rural Alaska the price for electricity, space heating fuels and transportation fuels is higher than urban Alaska and the rural resident wants relief (for reference, compare Appendix tables for urban and rural regions). These differences in prices are compounded by differences in income. A 1980 study ("The Impact of Rising Energy Costs on Rural Alaska" by ISER) reported that in rural Alaska during 1978, Native households spent 28.8% of their income on heating oi] and electricity and Native plus non-Native households spent 16.4%. By comparison, the proportion of household income for energy in Fairbanks at that time was 5.7%. Although the current price of energy to the rural consumer has decreased because of recent State assistance (i.e., Power Cost Assistance and Weatherization programs) the price still remains high. A February 1984 report by RurAL CAP ("Energy Use and Expenditures in Alaskan Village Households: The Energy Crisis Lives On") shows that for eight selected villages analyzed in the Spring of 1983, the average percentage of household income spent on energy is 27.4%. However, the price for energy in these villages should experience some reduction when the Power Cost Equalization program becomes effective. State programs which reduce the price of energy to the rural consumer tend to mask the fact that the actual costs for energy, in most cases, remains high. As long as the actual costs remain high, the rural consumer is vulnerable to price increases if and when funding for State assistance programs is reduced. Subsidies are not considered long-range solutions to high energy costs. Some of the differences in energy costs between rural and urban Alaska are due to economies-of-scale. Rural villages have relatively smal] populations with energy demands that are below efficient levels of operation for many technologies. Also, most rural villages are separated by miles of often difficult terrain which results in expensive transportation costs. By contrast, Anchorage has established access to the least expensive natural gas prices in the U.S. and is of sufficient size to make efficient use of most energy technologies. -143- Strategy 1: State agencies should continue and expand efforts to reduce the actual costs a energy in rural Alaska with emphasis on electrical generation and residential space eating. OPTIONS : 1. Improve the heat rate of diesel generators by assuring proper sizing of units and by offering training programs for operators. Would require budget request by DCED (APA). 2. Continue loans for fuel oil purchases and grants for con- struction of tank storage in order to facilitate bulk pur- chases of fuel oil by villages. DCED (DI) and ODCRA. Ongoing. Would require budget request. 3. Improve the heat retention of rural housing by continuing the State weatherization program to all qualified residential buildings at increased level of funding. Would require budget request by DCRA. 4. Waste heat potential should be developed when technically and economically feasible. DCED (APA) ongoing. 5. Encourage cooperative buying of fuel oi] amongst villages in order to reduce transportation costs. DCRA. Would require budget request. Strategy 2: Develop administrative mechanisms which reduce consumer price disparities between regions of the State. OPTIONS: 1. Appoint an advisory committee to investigate administrative mechanisms used by other states and provincial governments to levelize statewide power production costs. Administrative Order, Office of the Governor. 2. Continue the Power Cost Equalization program and investigate alternatives such as lifeline rates or energy credits. Budget request by DCED (APA). 3. Compare power production costs on a standardized basis to illustrate real costs between different power sources. Would require budget request by DCED (APA). 4, Develop a data base which compares the subsidized and unsub- sidized price of electricity, fuel oil and gasoline between rural and urban Alaska. Budget request by DCED (APA) and DCED (OE). -144- State subsidies directed to energy projects and energy consumers may result in less efficient use of energy and produce inequities between regions or communities. During the past few years, the State has provided substantial subsidies for many energy projects and programs. These include the projects that are in the Energy Program for Alaska, the Power Cost Equalization Program, and electrification grants to municipalities. While these subsidies have provided needed relief to many recipients and provided a means for distributing State wealth, it should be recognized that as a result, there are significant differences in many cases between the price of energy to the consumer and its actual costs. These differences should raise concerns about efficiency and equity. Subsidized energy prices can result in higher levels of demand and substitution to less efficient fuels. Frequently, inefficient uses of energy occur when higher levels of demand are encouraged. Also, some State programs, such as Power Cost Equalization, do not provide energy producers (i.e., utilities) with incentive to improve efficiency. A long-term concern is that subsidies will encourage wasteful consumer habits and inefficient generation that can only be sustained by a substantial amount of subsidy. The ability of the State to continue these subsidies after oi] revenues start declining is uncertain at best. To mitigate this concern, the State needs to include with its energy subsidy programs, incentives which result in efficient consumption and generation of energy. The distribution of energy project and program subsidies also raises questions about equity. These are: (1) do more energy-intensive con- sumers receive a greater level of subsidy than more modest consumers and (2) is there an equitable allocation of subsidy throughout the Alaskan population. Energy subsidies should be structured to provide an equitable distribution of State wealth. Strategy 1: Implement conditions and standards for electrification grants which improves the cost effectiveness of projects. OPTIONS: 1. Continue to administer legislative grants to communities. DCRA & DOA, ongoing. 2. Establish design and feasibility criteria for energy grants. Regulation by DCED (APA) within ongoing budget. -145- Provide advanced funding for planning preliminary design and fark) estimating. Would require budget request by ODCED APA). Establish a technical review procedure that systematically reviews all energy grants. MOU between DOA, DCRA, DCED, with DCED (OE) leading group. Initiate follow-up procedures to assure completion of grants per specifications. DCRA. Would require budget request. Strategy 2: Structure energy subsidy programs to include incentives for improved efficiencies. OPTIONS: ANE Amend the Power Cost Equalization program to provide incen- tives to utilities to reduce their eligible costs. Regula- tions by DCED (APA). Modify the Power Cost Equalization program so that utility customers who generate their own power receive full benefit eae avoided cost) of their effort. Legislation by DCED OE). Prevent subsidies from causing fuel substitution to those fuels which are less economically efficient in terms of real {RPA} rather than consumer price. Regulations by DCED APA). Strategy 3: Examine alternative subsidy rates and mechanisms which would result in more equitable distribution of State wealth. OPTION: NS -146- Target subsidies to include only the "essential needs" of each customer. Legislation by DCED (0E). Distribute power subsidies on a per customer basis rather than a per kWh basis. Regulations by DCED (APA). Strategy 4: Continue to administer federal low income assistance to needy Alaskans. OPTION: 1. Use the established federal standards used in the DHSS administered Low Income Home Energy Assistance Program. DHSS, ongoing. 2. Continue to seek federal block grant assistance through the DHSS Energy Assistance Program. Ongoing. -147- CONSERVATION ISSUE The State can reduce energy costs for its facilities and for the residential and commercial sector by expanding its energy conservation efforts. Energy conservation practices translate into an economically efficient source of energy. Conservation programs funded by the State have been effective in reducing actual energy costs. Most notable is the weatherization program (which also receives federal funding), admin- istered by the Department of Community and Regional Affairs, which has reduced space heating costs by approximately 18% per home per year. However, the State has not yet implemented all of the energy conser- vation measures required by statute. This includes thermal and lighting standards (AS 46.11.010-.040) and APA energy conservation measures (AS 44.83.400). In addition, there are other opportunities which are working in the lower 48 which could be implemented in Alaska. What may prove to be a barrier to some energy conservation Measures is interest in increasing consumption levels in order to more fully utilize some energy projects (i.e., Lake Tyee Hydroelectric Pro- ject) or to justify projects under consideration. Strategy 1: Fulfill statutory requirements for energy conservation programs. OPTIONS: 1. Develop thermal and lighting standards for public facilities to comply with AS 46.11.010. Adopt regulations by DOT/PF. 2. Adopt standards for new commercial and residential buildings that are recommended by the Lighting and Thermal Standard Advisory Committee to comply with AS 46.11.040. DCRA, ongoing. 3. Institutes a life cycle cost program that requires State constructed facilities to meet design standards and incorporate energy costs when calculating lowest life cycle costs to comply with AS 35.10.160-.200. DOT/PF, ongoing. 4. Develop an energy conservation plan for power projects that are included in the APA's Energy Program for Alaska to comply with AS 44.83.400. Would require budget request by DCED (APA). -148- Strategy 2: Improve the thermal efficiency of Alaska’s housing stock. OPTIONS: 1. Expand the furnace burner retrofit program which has, on a pilot project basis, successfully improved the efficiency of oil burners. Would require budget request by DCRA. 2. Apply an energy rating system like that being developed by the Municipality of Anchorage, which is similar to that which has been successfully used in the Northwest to Alaska Housing Finance Corporation (AHFC) housing loans. Governor, Administrative Order. 3. Continue effort to have HUD financed housing meet thermal standards that are consistent with local heating degree day requirements. DCRA, within ongoing budget. 4. Undertake a review of residential energy conservation programs in the "Lower 48" and Canada to determine which Programs could be applicable to Alaska. DCRA, ongoing. 5. Provide low interest loans for residential energy conservation improvements. Guidelines drawn up based on programs in the Northwest with DCED (OE) as lead agency and loan appropriation secured by DCED (DI). Program developed within routine budget by DCED (0E). 6. Continue efforts to educate the public on the benefits of energy conservation with publications, newspaper columns, video tapes, and workshops. Would require a budget request by DCRA via the weatherization program for an RSA with the University of Alaska, Cooperative Extension Service. 7. Provide rural housing authorities and private contractors with incentive to build thermally efficient residential, commercial, and industrial facilities. Program developed by DCRA, within routine budget request. Strategy 3: Reduce the operational maintenance costs of public facilities by improving thermal and lighting efficiencies. OPTIONS: 1. Use the Rural Mini-Cabinet Forum to develop a design-build contest that leads to incorporation of energy efficient design in new facilities. DOT/PF ongoing. -149- Continue to provide a State match to the U.S. Department of Energy Institutional Conservation Program which funds energy conservation projects for schools, hospitals and local government facilities. Within routine budget request, DCRA. Complete previous DOT/PF effort to perform energy audits of State facilities and use those audits as the basis for capital improvements. Within routine budget request, DOT/PF. Strategy 4: Reduce transportation expenditures of State agencies. OPTIONS: 1. Encourage wider use of telecommunications as a substitute for travel. DOA, ongoing. 2. Encourage car pooling and mass transit use by State workers when available. DOT/PF, ongoing. 3. Improve gas mileage of State motor vehicle fleet. Ongoing -150- action by DOT/PF. Improvements are needed in Alaska’s electrical energy systems in order to safely, reliably and economically meet existing and future demand. In many cases, Alaska's electrical energy delivery systems, particularly electrical distribution lines, do not meet acceptable standards such as those used by the Rural Electrification Administration. Also, Alaska's growing population is straining some of these electrical energy delivery systems. In order to meet Alaska's current demand and to accommodate future growth, attention should be given to improving the existing energy systems. Strategy 1: Upgrade Alaska’s existing rural electrical distribution system to reduce line losses and outages and to provide extensions. OPTIONS: eo Provide utilities with financing, if not otherwise available, for improvements to distribution systems. Would require budget request by DCED (APA). 2. Assess, on a statewide basis, the condition of utility we lines. Would require budget request by DCED APA). 3. Establish criteria for replacement and upgrade of existing power production systems. Regulations by DCED (APA). 4. Amend regulations to the Rural Electrification Revolving Loan Fund to accommodate additional utility needs and to determine economic and financial feasibility of loan applications. New regulations by DCED (APA). Strategy 2: Provide fuel storage facilities to small rural villages as a way to assure conti- nuing power production. OPTION: 1. Complete an inventory of bulk fuel storage facilities estab- lished and requested, then prioritize for future grants and loans. Would require budget request by DCRA. -151- Strategy 3: Explore regional grid or utility intertie opportunities to lower power costs and improve reliability. OPTIONS: Me -152- Use the Anchorage Fairbanks Intertie transmission line to provide more economic dispatching of power amongst utilities in the Railbelt. Ongoing effort by DCED (APA). Regionalize power grid energy distribution requirements where feasible over the next several years. Would require budget request by DCED (APA). ALTERNATIVE TECHNOLOGIES ISSUE _ Alternative energy technologies have some potential in Alaska and should be given an opportunity to compete with conventional technologies. During the past few years, the State has sponsored numerous alternative energy demonstration projects. While some of the projects have been successful, many have not produced the results that were expected. Some of the reasons for this lack of success includes: 0 Strong project management capabilities were not adequately developed by the lead agency. 0 Too much responsibility was delegated to contractors. 0 A methodology for accurately assessing the technical and economic feasibility of a demonstration project was often lacking. 0 Efforts to collect performance data were often inadequate or lacking. 0 There tended to be unrealistic expectations as to the amount of effort or time needed to demonstrate commercial feasi- bility of a new technology. 0 Potential users of the project were not committed to its success. Despite these problems, the current potential in Alaska for some alternative energy technologies is improved due to the efforts of manufacturers and other states. Consequently, the State should continue alternative energy demonstration projects, but incorporate specific measurable objectives that identify the utility. of technologies in an Alaskan setting. A key policy decision is whether the State should assume an active role in alternative energy demonstration projects or provide incentives for the private sector to assume much of the responsibility. -153- Strategy 1: Alternative energy demonstration projects should emphase applied research and commercial applications. OPTIONS: 1. Establish project manager procedures (which establishes tasks, data requirements, etc.) for alternative energy demonstration projects that are completed by State agencies. DCED (OE) ongoing. 2. Coordinate the research and development efforts at the University of Alaska with other State agency alternative energy demonstration projects. Would require budget request by DCED (0E). Strategy 2: Consider the use of third party financing in order to provide the State with a market test for a proposed project and to tap state-of-the-art expertise. OPTIONS: 1. Develop recognition that Alaska is interested in third- party financing. Ongoing effort by DCED (OE). 2. Provide third-party financing with low-interest loans if the project needs a subsidy in order to have competitive energy costs. Legislation introduced by DCED (DI). Strategy 3: Establish a technical network of people in State agencies which can be call- ed on to provide technical advise for demonstration projects. OPTION: 1. Form a working group of select advisors from both government and private sector areas that can be called on to provide technical advice on demonstration projects. Would require budget request by DCED (0E). eae 4: Establish regulations and tax laws that favor investments in alternative energy projects. OPTION: 1. Expand State loan terms and maximize loan size to accommodate commercial applications of alternative technologies. Legislation submitted by DCED (0E). 2. Provide tax credits for alternative energy development pro- jects in Alaska. Legislation submitted by DCED (0E). -154- Strategy 5: Develop a grants program for research and development in alternative technology areas. OPTION: 1. Evaluate a grants program that permits innovative research by individual Alaskans. Within ongoing program, DCED (OE). Strategy 6: Use the Power Cost Equalization program to provide incentives for alter- native technologies that are feasible. OPTION: 1. Propose legislation to encourage the use of alternative technologies without negating the ability of a community to receive Power Cost Equalization. Legislation prepared by DCED (OE). -155- _ TECHNICAL ASSISTANCE ISSUE Local communities need technical assistance from the State if they are to incorporate proper planning and project management capabilities when developing energy projects such as electrification. Most communities in the State do not have available the technical knowledge needed for adequate energy planning or for proper design and installation of a project. Without these technical skills, there is a higher probability of cost overruns or poor project performance. State agencies can help mitigate these problems by providing technical assistance to communities that are considering or undertaking energy projects. As described under the energy conservation section, DCRA has a rural energy management program which includes technical assistance. In addition, the APA now provides engineering advice to communities that are planning or developing electrification projects. Strategy 1: Provide State financial support for technical assistance programs. OPTIONS: 1. Continue to utilize the established technical expertise within. the APA to provide direct technical assistance to rural utilities and communities for power system problems. DCED (APA), ongoing program. 2. Utilize the rural mini-cabinet technical assistance workgroup to organize a network for agency participation, DCRA, ongoing. 3. Complete a Memorandum of Understanding (MOU) between DCED (APA) and DCRA that integrates APA's technical assistance with DCRA's Community Energy Management Program. Within routine budget requests to complete MOU. 4. State support for DCRA's Community Energy Management Program, which develops capabilities for financial planning, education and outreach, fuel management, facility siting, the economic influence of a technology operation and maintenance assistance, and energy conservation measures for existing commercial, residential, and public buildings. Would require expanded budget request by DCRA. -156- _ MAJOR ENERGY PROJECTS ISSUE X The State can participate in the planning, financing, and construction of energy projects that assist local utilities and communities to realize sav- ings from the selection of energy alternatives that offer the lowest long- term system cost. Direct resource extraction for oil, gas, and coal has been primarily conducted and financed by the private sector. The State maintaines an active interest in the marketing and transport of those resources, and by virtue of enacted legislation and appropriations, has decided to play an active role in developing major Alaskan power projects. Major hydroelectric projects have been developed by the APA through the Energy Program for Alaska. Initial projects developed under the Energy Program for Alaska include the Anchorage/Fairbanks Intertie and the Four Dam Pool consisting of Solomon Gulch (Valdez), Swan Lake (Ketchikan), Tyee Lake (Wrangell/ Petersburg) and Terror Lake (Kodiak). Operational arrangements for the Four Dam Pool are uncertain at this time because the respective utilities have not signed long-term power sales agreements. The Four Dam Pool difficulties stem from the fact that the State proceeded with development of some of the projects before key details, such as power sales agreements, were worked out. The State has also expressed interest in providing a long-term solution to the power needs of the Railbelt. Based on current estimates for the amount of recoverable natural gas that is available for Railbelt power generation, a substitute for natural gas will be needed soon after the turn of the century. Energy resources which could provide a substitute include hydroelectricity, coal, natural gas (new Cook Inlet discoveries or North Slope natural gas), tidal or a mix of these resources. The Alaska Power Authority has filed license applications with the Federal Energy Regulatory Commission for the Bradley Lake and Susitna hydroelectric projects. However, both projects need power sales agreements from the utilities before expenditures are made on detailed design. Both projects need final plans of finance. The Governor's Council and Railbelt Electrification, consisting of utility representatives and the APA, has been formed to resolve these details. Strategy 1: Obtain power sales agreements for the Four Dam Pool. OPTION: 1. Complete negotiations with the involved utilities to arrive at an agreement which satisfies financing commitments, assures long-term energy supplies, and equitably allocates costs. DCED (APA), ongoing. -157- Strategy 2: Continue efforts to determine if the Susitna Project should proceed to construction. OPTIONS: 1. Continue funding for the Susitna FERC license application. Budget request by DCED (APA). 2. Continue efforts to negotiate power sales agreements via the Governor's Council on Railbelt Electrification. Ongoing effort by DCED (APA). 3. Develop plan of finance for the Susitna Project. Ongoing effort by DCED (APA). Strategy 3: Continue efforts to develop the Bradley Lake Project. OPTIONS: 1. Continue to support the FERC license application. Budget request by DCED (APA). 2. Continue efforts to obtain a power sales agreement from Railbelt utilities. Ongoing effort by DCED (APA). 3. Develop a plan of finance for the Bradley Lake Project. Ongoing effort by DCED (APA). Strategy 4: Encourage further production of Cook Inlet natural gas. OPTIONS: 1. Continue DNR's five-year oi] and gas leasing in all parts of Alaska including the Cook Inlet area. DNR, ongoing. 2. Seek additional outlets for domestic and foreign sales of Cook Inlet natural gas. Ongoing within DCED (0E). 3. Work with Anchorage utilities to encourage space heating conversions from electric to natural gas in the Anchorage area. DCED (OE), ongoing. 4. Investigate further the conversion of motor vehicles from gasoline to forms of natural gas (compressed natural gas as an example). DCED (OE), ongoing. 5. Provide incentives to exploration companies to further explore the Cook Inlet area for additional natural gas. Legislation prepared by DCED (0E). -158- Stragety 5: Examine feasibility of using North Slope gas for electric and thermal needs in the railbelt area. OPTIONS: NE Keep advised of all negotiations between Pacific Rim Nations and gas pipeline developers that promote sales agreements for North Slope gas. Ongoing program in DCED (0E). Compare the use of North Slope natural gas with Susitna and other energy alternatives or combination of alternatives to power the Railbelt. Alternatives include coal, natural gas, wind, solar, tidal and small scale hydroelectric resources in the Cook Inlet area. Would require budget request by DCED (APA). Collect further information on the feasibility of using North Slope natural gas to meet the thermal and electrical requirements in the Railbelt area. Would require a budget request by DCED (APA). Strategy 6: Develop a step-by-step process which provides control over the development of a major power project from the reconnaissance stage through completion of construction. OPTIONS: Ne The APA Board of Directors has approved a project approval process which could be adopted as regulations. Ongoing effort by DCED (APA). -159- SUMMARY AND CONCLUSIONS -161- 5. SUMMARY AND CONCLUSIONS Alaska's Energy Plan - 1985 gives direction to the economic and financial objectives of Governor Bill Sheffield's energy development policy, supporting orderly, prudent resource development which currently or potentially contribute in a substantial way to the economic vitality of the State. By placing emphasis on the short-term strategies of State agencies having direct responsibility for energy programs, using an interagency workgroup to write the plan, and seeking resolution of issues in the long-term, State agencies have more effectively coordinated informational needs and decision making procedures. The 1985 Energy Plan provides both a snapshot of State energy programs and energy use today, and a mechanism for developing Administration policy on Alaskan energy issues in the future. Alaska's future development has been projected in many economic models. One such model, by A. D. Little in 1983, projects a real growth in the economy of 2-3 percent per year, and a population increase of 3-4 percent through the year 2000. Pacific Rim nations are expected to need increased levels of natural gas and oil by 1995, and given Alaska's ability to provide those fuels, additional employment opportunities attached to increased Alaskan production to feed Pacific Rim markets can be expected commencing around 1990. Certain projects will continue to play a dominant role in determining Alaska's energy future. An FY '85 loan appropriation of $210 million was made to the Four Dam Pool (Ketchikan, Wrangell, Petersburg, Kodiak and Valdez) hydroelectric projects, $100 million to the Susitna hydroelectric program, $50 million to the Bradley Lake Dam, and $21.7 million for rural Power Cost Equalization. 1984 saw the acquisition of the Alaska Railroad by the State which will begin hauling coal from Usibelli Coal Mine - near Fairbanks - to Seward for shipment to Korea and the issuance of coal leases in the Palmer area. Federal legislation prohibits the export of Alaska oil. As a result, approximately 800,000 barrels of Alaska crude are now being shipped each day to the Gulf Coast on U.S. flag vessels at a cost of over $5.00 per barrel. By shipping to Japan, even in U.S. flag vessels, a substantial cost per barrel savings perhaps as great as $3.00 per barrel would be experienced. Either a tidewater (TAGS) or cross-Canada (ANGTS) pipeline may bring North Slope natural gas to foreign and domestic markets within the next decade. It is possible, with 40 trillion cubic feet of gas on the North Slope, that LNG could be shipped to the Pacific Rim nations and natural gas piped to the South-48, concurrently. At the moment, gas prices make either venture appear uneconomic. In 1985, Atlantic Richfield Company is expected to begin a pre-feasibility study of the Japanese market for Alaskan LNG. Companion studies of Korean and Taiwanese markets are anticipated. -163- Long-term electrical power source(s) for the Railbelt - where three-quarters of Alaskans live - is a question still waiting to be answered. Alternatives to the Susitna hydroelectric project appear to be mine-mouth coal (Beluga), or gas-fired turbines supplied from either Cook Inlet or North Slope natural gas, or a combination of these. The Governor's Council on Railbelt Electricity (G-CORE), formed in 1984 with representatives of local utilities, is attempting to address the questions of the price of Susitna power to Railbelt consumers and which alternative(s), if any, might be preferable. The State will look to the electrical utilities to indicate which power source(s) should be promoted for the Railbelt. Funding for Alaska's energy programs will largely be determined by available revenues. Declines in petroleum revenues from reduced North Slope production after 1990, decreasing world oil prices in the near future, and changes to the level of oil consumption worldwide are all real possibilities that must be considered when preparing Alaska for the future. What energy policy should the State embrace? Expectations for reduced State revenues and Alaska's continual growth must work hand in hand, which means applying today's revenues to assuring a quality Alaska tomorrow. To do so requires Alaska's energy policy to be founded on the premise that all Alaskans can be assured an adequate supply of acceptable quality energy at a fair price within the financing limits to the State. Extracted resources must provide optimum benefits without leaving the State with energy shortfalls. Alaska must use today's revenues to protect Alaska from future energy "shocks." Major energy projects must be weighed against less costly options, and potential in-State and export revenue generating capabilities must be quantified. Large projects that require energy must reflect the proper balance between Alaska's needs for revenue generation and personal needs of State residents. These same non-energy projects must be analyzed for potential power generation opportunities, such as incorporating tidal power generation with a road crossing of Cook Inlet, for example. Rural Alaska power should be made more accessible, reliable, and less costly through the use of interties, alternative technologies, and more efficient use of cogeneration capabilities where they exist. Generally, Alaska must plan a stepped approach to assuring quality power, a growing economy, and adequate life cycle cost of every large project undertaken. Aggressive pursuit of short-term projects with long-term benefits must start today. Weatherization is a proven method to lower power costs and assure a warm, comfortable home and should be provided in line with developing statewide thermal and lighting standards. Conservation must be a byword. Knowing how and where to conserve is a primary step, and education is the key to successful implementation. In schools, and at the consumer level, Alaskans must have their energy consciousness raised to a point that efficiency is expected. Reducing consumption through efficiencies without degradating accustomed life styles must be a key objective. Reductions to State energy subsidies -164- would be benefit of such savings as well. Generally, active pursuit of programs and projects that are relatively low cost yet widespread over rural and urban areas will net considerable energy savings now and in the long run. Ultimately, Alaskans will determine where the State goes on economic development and energy adequacy. This final section of the 1985 Energy Plan summarizes Alaska's energy picture today, and what can be done to improve that picture in the coming years. ENERGY ASSESSMENT Alaskans consumed 411 trillion Btu's of energy in 1982, continuing an increasing consumption trend that has prevailed since Statehood in 1959. In 1982, Alaska consumed 1.15 billion gallons of petroleum, 238 billion cubic feet of natural gas, 672 million pounds of coal, and 2.3 billion kilowatt hours of electricity. In total, Alaska ranked first in consumption compared to all other states in the nation, and per capita consumption of 926 million Btu's was three times the national per capita average of 305 million Btu's. Alaska's increasing consumption of 5 percent per year since Statehood closely parallels the overall economic growth of 3 to 5 percent. Alaskan energy production continued to expand in 1984. On a daily basis, in-State refineries produce approximately 4.4 million gallons of refined liquid petroleum products and over 1.6 million barrels of crude oil flowed from the North Slope to Valdez. On the Kenai Peninsula, 1984 saw 1.0 million tons of ammonia and urea and 1.0 million tons of LNG produced from Cook Inlet natural gas. Coal production from the railbelt was 800,000 short tons. Renewable energy sources also provided power for Alaska in 1984, as hydroelectric capacity reached 217 megawatts and alternative energy projects in the form of wind and geothermal began approaching a_ point of commercialization at select Alaskan sites. Alaska's energy reserves are substantial. Estimated reserves of 9 billion barrels of crude oil, 39.9 trillion cubic feet of natural gas and 6.3 billion short tons of coal are known. Additionally, over 75 sites suitable for hydroelectric power have been identified. Alternative forms of energy like wind, geothermal, solar, and tidal are known but remain largely unquantified on a site specific basis. Energy production will continue to tap Alaska's vast energy resource potential. An active program of oi]1, gas and mineral leasing should proceed. Construction of new energy projects should be made in line with the consumer interest for such projects as expressed in power sales agreements. Energy resources for export markets need to be moved to locations where they can be shipped, and present impediments to the exports of crude oil to Pacific Rim nations should be overcome. Alternative forms of power generation must be considered when looking for optional energy solutions. Power production, overall, must provide an equitable energy future for all Alaskans. -165- ENERGY PROGRAMS The State continues to place a major emphasis on energy through the programs administered by some 20 different State agencies. The bulk of those programs are completed by the Department of Commerce and Economic Development, the Department of Community and Regional Affairs, and the Department of Natural Resources. State energy programs provide aid to private development of Alaska's natural resources, and direct subsidies in the form of loans, grants, and through the pursuit of specific demonstration and power development projects. State subsidies are the backbone of the rural energy program. The Power Cost Equalization program will channel $21.7 million to rural utilities to reduce consumer electrical costs. Heating costs will be reduced by the construction of bulk fuel storage facilities, through grants and loans for improvements to electrical generation and transmission facilities, by developing waste heat recycling facilities, and through low interest loans and grants for conservation improvements. Weatherization continues to be provided to low-income households, and conservation education programs are widely used. The State also administers over $11 million in federal funds to help low-income Alaskans pay for their energy requirements. Power development projects and demonstration projects for alternative technologies are either contemplated, under construction, or in place. The Rural Electrification Revolving Loan Fund permits rural utilities to extend electrical services, and the Power Project Loan Fund develops new ones. Reconnaissance and feasibility studies precede State participation in these endeavors. Alternative energy projects for wind, solar, peat, bioenergy and geothermal are in place, and future activities are being funded with loan programs and through direct State development efforts. ALASKA’S FUTURE ENERGY PROGRAM Alaska's future energy picture has been projected using various models, all having their own set of assumptions. These projections are frequently used to determine the economic feasibility on major energy projects. In the 1983 Energy Plan, three economic scenarios were used to forecast State development. Taking into consideration both the possible range of Pacific Rim and world market developments and related economic development in natural resources, manufacturing, and energy projects within the Alaskan economy. In the 1984 plan, DELPHI study considerations were discussed to assess Alaska's development through the year 2000. The 1985 Energy Plan did not select one particular model or source of information as_ best portraying Alaska's energy future. Instead, these sources were combined with information from State, federal and private agencies to project Alaska's future energy picture. Certain generalities and predictable events can be foreseen. -166- Upon consideration of those projections, and after review of present State agency programs, the Sheffield Administration has reviewed the potential energy options presented in the 1985 Energy Plan and has selected those new or ongoing activities that best reflect the Administration's energy policy direction. Selections include both long-term and short-term options. Short-term options are those that can be completed in the FY '86 budget year. Long-term programs show only the FY '86 budget request. Selected options are presented as agency programs and categorized as: Continuation of Ongoing Effort, FY '86 Budget Request or Administrative Actions. The numbers within parenthesis identify which issue, strategy and option, respectively, is being referenced. These programs comprise the policy mandate of the Sheffield Administration as expressed in the FY '86 budget request. OFFICE OF THE GOVERNOR A. Continuation of Existing Effort: ; Advisory Committee on Statewide Power Production Costs (2.2.1) - The Advisory Committee appointed by the Governor presented its report to the APA Board of Directors on December 15, 1984. Mortgage Energy Rating System (4.2.2) - An organization of home builders, realtors, bankers, State agencies in- cluding AHFC, and local governments are investigating a voluntary system for a mortgage energy rating system. B. FY '86 Budget Request: ° Continuation energy budget. C. Administrative Actions: ° None formalized in this plan for action in 1985 Legislature at this time. -167- ALASKA POWER AUTHORITY A. -168- Continuation of Existing Effort: ° Unalaska Geothermal Exploration Project (1.1.4) - An FY 82 appropriation of $5,000,000 is being used to continue geothermal drilling and completion of feasi- bility studies. Data on Electrical Energy Consumption (1.2.2) - The APA will continue to gather data on electrical energy con- sumption, for feasibility studies and planning efforts. Economic Feasibility Methodology (1.3.1) - The APA routinely calculates life cycle cost, on a _ present worth basis, when evaluating the feasibility of a project. Improved Diesel Generator Operation (2.1.1) - To improve the efficiency of electrification projects, the APA provides engineering advice to villages which are planning electrification projects. The APA has allocated $125,000 for this purpose using an FY '84 appropriation of $3,281,000 for rural electrification. Anchorage/Fairbanks Intertie (5.3.1) - The APA will continue to work with Railbelt utilities in order to optimize utilization of the intertie. Technical Assistance for Rural Utilities (7.1.1) - See option 2.1.1. Four Dam Pool Power Sales Agreement (8.1.1) - The APA is negotiating interim power sales agreements with the utilities that are part of the Four Dam Pool. Susitna FERC License Application (8.2.1) - An FY '85 appropriation of $100,000,000 will be used to continue support for the FERC license application which should require about $20,000,000 in FY '86. Governor's Council on Railbelt Electrification (8.2.2) - The purpose of the Council is to provide a forum for the APA and Railbelt utilities to negotiate power sales agreements for the Susitna Project. Susitna Plan of Finance (8.2.3) - The APA is evaluating financing options for the Susitna Project. Bradley Lake FERC License Application (8.3.1) - Previous appropriations are being used to support this effort. Bradley Lake Power Sales Agreement (8.3.2) - Negotiations are underway. Bradley Lake Plan of Finance (8.3.3) - The APA is evaluating financing options for the Bradley Lake Project. FY '86 Budget Requests: ° Statewide Electrical Planning (1.5.2) - A budget request for $250,000 will be used for statewide power systems planning and another budget request’ for $250,000 will be used for rural reconnaissance studies. Waste Heat Projects (2.1.4) - A budget request for $2,000,000 will continue the APA's efforts to install waste heat facilities on diesel generators in rural villages. Previous funding is being used to evaluate the waste heat potential in 35 villages. Power Cost Equalization (2.2.2) - A continuing appro- priation of $21,700,000 for Power Cost Equalization will fund the program in FY '86. Improvements to Distribution Systems (5.1.1) - A budget request of $2,000,000 to the Rural Electrification Revolving Loan Fund will provide financing for the extension of distribution lines. Regional Power Grids (5.3.2) - A budget request for $400,000 will fund studies to determine feasibility of a Southeast intertie. Administrative Actions: ° Amend Rural Electrification Revolving Loan Fund Regu- lations (5.1.1) - The APA board, at its December 1984 meeting, approved amendments to these regulations and initiation of public hearings. Memorandum of Understanding (MOU) Between the APA and DCRA (7.1.3) - An MOU is needed to intergrate APA's technical assistance to rural villages and DCRA's Community Energy Management Programs. Project Approval Process (8.6.1) - The APA board, at its December 1984 meeting, approved the adoption of regulations for the project approval process. -169- OFFICE OF ENERGY A. Continuation of Existing Effort: ° Market Failure Planning (1.4.2) - Planning for emergency fuel set asides and conservation will continue to be developed. Annual Energy Plan (1.5.1) - The Office of Energy is the lead agency for coordinating the State's annual energy plan. Continue effort required by statute and expand to define comparable reporting units. (1.2.1) and standardizing energy budget requests (1.3.2). Low Interest Loans (4.2.5) - Evaluate Pacific Northwest Zero Interest Loan Programs. Project Manager Procedures (6.1.2) - The Office of Energy develops project management procedures for each alternative energy demonstration project that it Manages. Third Party Financing (6.2.1) - The Office of Energy tries to encourage opportunities for third party financing. Cook Inlet Natural Gas (8.4.2) - An ongoing effort with the Office of Energy is to encourage the development of markets for Alaska's energy resources. Conversions (8.4.3) - Work with Anchorage utilities to convert buildings and institutions using electric space heating to natural gas. North Slope Gas (8.5.1) - Same as 8.4.2. FY '86 Budget Requests: ° Continuation energy budget. Administrative Actions: ° -170- None formalized within this plan for action in 1985 Legislature at this time. DIVISION OF INVESTMENTS A. Continuation of Existing Effort: ° Fuel Oi] Loans (2.1.2) - For FY '86, loans will be made from the existing loan fund balance and repayments of principal and interest from prior loans. Residential Energy Conservation Loans (4.2.5) - Loans at municipal bond market interest rates will continue to be available in FY ‘86. No appropriation is being requested since existing loan balance and repayments of principal and interest from previous loans shall be adequate. B. FY '86 Budget Requests: ° Alternative Energy Loans (6.4.1) - Loan terms are not being expanded but an additional $1,775,500 is being requested in FY '86. C. Administrative Actions: ° None formalized within this plan for action in 1985 Legislature at this time. DEPARTMENT OF COMMUNITY & REGIONAL AFFAIRS A. Continuation of Existing Effort: ° Cape Beaufort Coal (1.1.2) - In FY '85, DCRA received an appropriation of $2,000,000 to be used to develop a preproduction program for Cape Beaufort coal deposits. This has resulted in a grant to the Alaska Native Foun- dation to undertake this work. Diesel Generator Failure (1.4.1) - The Rural Mini-Cabinet is investigating problems associated with diesel failures. Grants administration (3.1.1) - Continue to administer legislative grants to unincorporated communities. Lighting and Thermal Standards (4.1.2) - An advisory committee has been established to develop standards. Furnace Burner Retrofit (4.2.1) - Continue the furnace burner retrofit program as part of the weatherization program. HUD Housing Thermal Standards (4.2.3) - DCRA continues to advocate that the thermal efficiency of HUD housing needs to be improved. -171- Conservation Programs (4.2.4) - Review conservation programs in other locations for application in Alaska. Institutional Conservation (4.3.2) - Continue administration of federal conservation funds and seek further State match. Rural Mini-Cabinet (7.1.2) - The Rural Mini-Cabinet provides an opportunity to coordinate agency activities. B. FY '86 Budget Requests: ° Fuel Tank Grants (2.1.2) - Funding request for FY '86 will be $600,000, which is the same as FY '85. Weatherization program (2.1.3) - Budget Request for the weatherization program will be $2,500,000. In ad- dition, more than $2,000,000 in federal funds may be available for weatherization. C. Administrative Actions: ° MOU Between APA and DCRA (7.1.3) - An MOU is needed to integrate APA's technical assistance to rural villages and DCRA's Community Energy Management Program. DEPARTMENT OF NATURAL RESOURCES A. Continuation of Existing Effort: ° B. FY -172- Matanuska Coal (1.1.1) - In December 1984, DNR completed three coal lease sales, totaling 4,224 acres, jin the Matanuska Valley. Data Collection on Energy Resources (1.1.5) - An im- portant activity of the Division of Geological and Geophysical Surveys is to inventory energy resources. Data on Oil and Gas Consumption (1.2.3) - Statutes require that DNR prepare an annual report which include oil and gas historic consumption, projected consumption, remaining reserves, and estimated royalty surplus. Oil and Gas Leasing (8.4.1) - An ongoing responsibility of DNR is to schedule oil and gas leases, including leases in the Cook Inlet area. ‘86 Budget Request: Continuation energy budget. C. Administrative Actions: ° None formalized within this plan for action in 1985 Legislature at this time. DEPARTMENT OF TRANSPORTATION & PUBLIC FACILITIES A. Continuation of Existing Efforts: ° Thermal and Lighting Standards (4.1.1) - Development of thermal and lighting standards can be accomplished within existing budget but actual implementation will require a capital budget request. Life Cycle Costs (4.1.3) - Life cycle costs of State facilities which includes energy costs can be ac- complished within existing budget. Design-Build Contest (4.3.1) - This activity is being done in conjunction with the Rural Mini-Cabinet. Two projects have been initiated. Improve Mileage for Vehicle Fleet (4.4.3) - An ongoing effort of DOT/PF is to improve the efficiency of the State motor vehicle fleet and to encourage the use of Mass transit and car pooling (4.4.2). B. FY '86 Budget Request: ° Continuation energy budget. C. Administrative Actions: ° None formalized in this plan for action in 1985 Legislature at this time. DEPARTMENT OF HEALTH & SOCIAL SERVICES A. Continuation of Existing Effort: . Low Income Home Energy Assistance Program (3.4.1 and 3.4.2) - Federal funding for this program is expected to continue. B. FY '86 Budget Request: ° Continuation energy budget. C. Administrative Actions: ° None formalized in this plan for action in 1985 Legislature at this time. -173- DEPARTMENT OF ADMINISTRATION A. Continuation of Existing Efforts: . Grants Administration (3.1.1) - Continue to administer legislative grants to incorporated communities. Encourage Use of Telecommunications Instead of Travel (4.4.1) - Continue to encourage use of teleconferencing and use of electronic communications within Alaska government. B. FY '86 Budget Request: ° No specific energy budget. C. Administrative Actions: ° None formalized in this plan for action in 1985 Legislature at this time. -174- BIBLIOGRAPHY -175- 6. BIBLIOGRAPHY "Alaska Forest Service Market Report," U.S. Forest Service, Volume 6, March 1984, "Alaska Historical and Projected 0i1 and Gas Consumption," Institute of Social and Economic Research, University of Alaska; and Division of Minerals and Energy Management, Department of Natural Resources, January, 1981. "Alaskan North Slope Operators Push Projects to Recover Third-Generation 0i1," Oi1 and Gas Journal, June 25, 1984. "Alaska's Energy Resources - 0i1," Gene Rutledge, Alaska's Energy Resources, Alaska Journal of Commerce, May 25, 1984. "Alaska's Energy Resources - Wind," Gene Rutledge, Alaska's Energy Resources, Alaska Journal of Commerce, March 19, 1984. "Biomass to Electricity for 50-500 kW Systems," Systems Engineering & Manufacturing, 1983. "Conservative Flourescent Light Regulating System Test Report," Longstaff, T.W., PE, Longstaff Engineering, June, 1981. Davis, Neil, "Energy Alaska," University of Alaska Press, 1984. Department of Community & Regional Affairs, "Capital Improvements Planning Guidebook for Rural Alaskan Communities," September, 1984, Department of Commerce and Economic Development, "A Delphi Forecast of Alaska's Development; The Year 2000 and Beyond," June 1983. Department of Commerce and Economic Development, Alaska Energy Technology Series, 31 Volume Set, 1983: Department of Commerce and Economic Development, "Assessment of Energy Technologies," June, 1983. Department of Commerce and Economic Development, Division of Energy & Power Development, "Hydroelectric Commercialization Kit," September, 1981. Department of Commerce & Economic Development, Division of Energy and Power Development, "Technical Energy Audit Manual," 1982. Department of Commerce and Economic Development, Division of Energy & Power Development, "Wind - A Technical Assessment," February, 1984. -177- Bibliography (Continued) Department of Commerce and Economic Development, "Evaluation of Ice Problems Associated with Hydroelectric Power Generation in Alaska: Final Report to the State of Alaska," 1981. Department of Commerce and Economic Development, Office of Mineral Development, Department of Natural Resources, Division of Geological and Geophysical Survey, "Alaska's Mineral Industry - 1983," June, 1984. Department of Commerce and Economic Development, "1981 Long Term Energy Plan," April 1981. Department of Commerce and Economic Development, "1982 Long Term Energy Plan," May 1982. Department of Commerce and Economic Development, "1983 Energy Report," May 1983. Department of Commerce and Economic Development, "1983 Long Term Energy Plan," May 1983. Department of Commerce and Economic Development, "1984 Long Term Energy Plan," May 1984. Department of Commerce and Economic Development, "Peat Commercial Feasibility Analysis, Volumes I and II," June, 1983. Department of Natural Resources, "Division of Forestry 1983 Annual Report," 1983. Department of Natural Resources, Division of Forestry, "Outlook for Supplying Wood for Personal Use in Southeast Alaska," 1982. Department of Natural Resources, Division of Minerals and Energy Management, "Historical and Projected 0i1 and Gas Consumption," January, 1984. Department of Natural Resources, "Five Year Oi] and Gas Leasing Program," January, 1985. Department of Revenue, "Petroleum Production Revenue Forecast," January, 1985. Department of Revenue, "Quarterly Revenue Sources, FY 1984 to FY 1986," June, 1984. Department of Transportation & Public Facilities, "A Solar Design Manual for Alaska," Report 81-01, 1982. -178- Bibliography (Continued) Department of Transportation & Public Facilities, "A Thermal Performance Design Optimization Study for Small Alaskan Rural Schools," Report 81-21, 1981. Department of Transportation & Public Facilities, "A Thermal Performance Design Optimization Study for Small Alaskan Rural Schools," Report 83-02, 1983. Department of Transportation & Public Facilities, “Air Flow in Fairbanks, Memorial Hospital Intensive Care Unit," Report 83-33, 1983. Department of Transportation & Public Facilities, "Air-To-Air Heat Recovery Devices for Small Buildings," Report 81-12, 1981. Department of Transportation & Public Facilities, "Air-To-Air Heat Recovery Devices for Small Buildings," Report 82-23, 1982. Department of Transportation & Public Facilities, "An Analytical Study of Passive Solar Energy and Mass Storage: Observations from a Test Building in Fairbanks, Alaska," Report 83-29, in publication process, 1984. Department of Transportation & Public Facilities, "Passive Solar Alaskan School, Phase I," Report 81-10, 1981. Department of Transportation & Public Facilities, "Passive Solar Fire Station Demonstration Project," Report 81-11, 1981. Department of Transportation & Public Facilities, "Passive Solar Heating in Alaska," Report 81-15, 1980. Department of Transportation & Public Facilities, "Public Facilities Building Codes," Report 84-03, 1984. Department of Transportation & Public Facilities, "Report Supplement: Thermal and Cost Analysis of Thermal Envelopes for a Small Rural School," Report 83-03, 1983. Department of Transportation & Public Facilities, "Thermal Standards for Small Rural Schools," Report 83-04, 1983. Department of Transportation & Public Facilities, "Two Rivers Passive Solar Design Analysis," Report 82-18, 1982. Department of Transportation & Public Facilities, U.S. Department of Agriculture - U.S. Forest Service, "Alaska Forest Resource, U.S. Forest Service Bulletin PNW-19," 1967, -179- Bibliography (Continued) Department of Transportation & Public Facilities, "Use of Passive Solar Additions in the Alaskan Climate," Report 82-25, 1982. Department of Transportation & Public Facilities, "Ventilation Study of State Courthouse at Fairbanks, Alaska," Report 83-32, 1983. "Direct Conversion of Peat to Liquid Fuel: Alaska's Resource and Opportunity," Peter Moulton, Alex Fassbender, and Michael Brown, The Northern Engineer Vol. 16, No. 1, pg. 14-19. "Drilling and reservoir engineering analysis of Pilgrim Hot Springs, Alaska," UAF/Petroleum Engineering, DEPD Report 83-514-2, December, 1982. "Environmental Assessment Report: Proposed Nulato Wood Energy Project," Environmental Services Limited, August 30, 1980. "Final Report: Wood Gasification/Power Generation Development Project," Marenco, Inc. for AVEC, March, 1982. "480 Volt Distribution System, Nikolai, Alaska," Robert W. Retherford Associates, Consulting Engineers, 1983. Forbes, Gedney, VanWormer & Hook, "A Geophysical Reconnaissance of Pilgrim Springs, Alaska," UAF Geophysical Institute for U.S. Atomic Energy Commission, February, 1975. “Fuel Consumption and Pricing in Alaska," House Research Agency, Report 83-C, January, 1984. "Fuel Oil Metering and Energy Audits," 1981. Gosink, J.P. and Osterkamp, T.E., "A Theoretical Investigation of the Potential Modifications of Ice Formation in Kachemak Bay by the Bradley Lake Hydroelectric Power Project," Final Report of research performed under contract #DACA 89-81-K-0001 for the U.S. Army, 1981. H.G.W. Marshall, R.P.F. Reid, Collins Alaska, Inc., "Use of Wood Energy in Remote Interior Alaska," September, 1981. Hawkins, Daniel B. and Mueller, George S., "A Zeolite Energy Storage Unit," Institute of Water Resources, UAF, April, 1983. Humphrey, T.D., "Kobuk-Shungnak Transmission Line, Service Manual," February 1, 1984. Hutchison, 0.K., "Alaska Forest Resource, U.S. Forest Service Resource Bulletin PNW 19," 1967. -180- Bibliography (Continued) Kamp, D. Lagen; Nelson, J.; Englund, T.; "Geophysical Report: Electrical Resistivity Survey for Geothermal Resources," Pilgrim Springs, Alaska Harding-Lawson Associated For R.F. Stefano & Associates, 1983. Konkel, Steve, "Alaska's Wind Energy Systems," February 1984. "Lower Kuskokwim Single Wire Return Transmission System Phase II Report," International Engineering Co., Inc., 1983. Markle, Don, Editor; Rawlinson, Stu, "Peat Resource Assessment Program Summary Report," Division of Geological & Geophysical Surveys, State of Alaska, November, 1982. Nebesky, Wm., "Alternatives in Greenhouse Design For the Pilgrim Springs Demonstration Project," September 20, 1979. Nielson, H.C., (Geophysical Institute UAF) and Zarling, John, (Department of Mechanical Engineering), "Ground Source Heat Pump Demonstration," 1983. Osterkamp, Kawasaki, Gosink, "Shallow Magnetic Induction Measurements for Delineating Near-Surface Hot Groundwater Sources in Alaska Geothermal Areas," UAF Geophysical Institute, Journal of Energy Resources Technology, June, 1983. "Peat Commercial Feasibility Analysis, Volume I," Wheelabrator-Frye, Inc., DEPD Report 83-08-73-7-526-R5. "Peat Commercial Feasibility Analysis, Volume II," Wheelabrator-Frye, Inc., DEPD Report 83-08-73-7-526-R6. "Peat Commercial Feasibility Analysis, Executive Summary," Wheelabrator-Frye, Inc., DEPD Report 83-08-73-7-526-R5. "Peat Resource Estimation in Alaska, Final Report, Volume I," Northern Technical Services and EKONO, Inc., August, 1980. Power Administration, U.S. Department of Energy, "Alaska Electric Power Statistics, 1960-1982," August 1983. "Qualitative Assessment of Marenco Wood Gasification System," Analysis of Reported Data Project 40905 Topical Report, IGT October, 1982. "Qualitative Assessment of Marenco Wood Gasification System" Project 40904, Institute of Gas Technology, Topical Report, March, 1982. Reid, Collins, "Use of Wood Energy in Remote Interior Alaska," September, 1981. -181- Bibliography (Continued) Rollinson, Stu (Division of Geological & Geophysical Services) and Markle, Don (Alaska Division of Energy & Power Development), Editors, "State of Alaska Peat Resource Assessment Program, Summary Report," November, 1982. Rural Alaska Community Action Program/Energy Department, "Report to the Governor and the Alaska State Legislature, Results of the $1.5 Million Appropriation for Emergency Fuel Loans to Alaska Villages," 1983. Sampson, George R.; Ruppert, Forrest A.; and McBeath, Jenifer H.; "Densified Fuel from Land Clearing Biomass; and Long-Term Chip Storage for Fuel--Interior Alaska;" Proposed for proceedings 36th Alaska Science Conference, Energy from Forest Biomass Symposium, Whitehorse, Yukon, September 28 - October 1, 1983. "Sheldon Point Wind Project," Final Report, Phase I, 4 Winds of Alaska, (Under contract to DCED/DEPD). "Single Wire Ground Return Transmission Line Demonstration Project, Phase I, Ray Bhargava Associates and Environmental Services Limited, 1984. "Single Wire Ground Return Transmission Line Demonstration Project, Supplement to Phase I," Ray Bhargava Associates and Environmental Services Limited, 1984, "Single Wire Power in Alaska," R.W. Retherford Associates, Division of International Engineering Co., Inc., February, 1982. "State Energy Data Report, Consumption Estimates, 1960-1982," Energy Information Administration, Washington, D.C., May, 1984. Turner, D.L. and Forbes, R.B., Eds., "A Geological & Geophysical Study of the Geothermal Energy Potential of Pilgrim Springs, Alaska," DEPD and U.S. DOE, January, 1980. Wescott, E. and Turner, D., Eds., "Geothermal Reconnaissance survey of the Central Seward Peninsula, Alaska," UAF Geophysical Institute to Division of Geothermal Energy, U.S. DOE, July, 1981. -182- APPENDIX Appendix 1. Alaska Statute 44.83.224 The Department of Commerce and Economic Development, assisted by the Alaska Power Authority, shall, after public hearings, prepare and annually revise a long-term energy plan. The plan, and its annual revisions, shall be submitted to the Commissioners of the Departments of the Executive Branch of the government for review and to the Governor for his approval. After approval, the plan shall be submitted to the Legislature not later than February 1, of each year. The plan, its annual revisions, shall include: (1) an "end-use" study examining and reporting on the nature and amount of energy used and the purpose of its use; and (2) an energy development component for meeting projected thermal, electrical and transportation energy needs in the state at the lowest reasonable cost, including environmental and social costs, consistent with acceptable standards of reliability, giving an equal consideration as practicable to all types of energy sources (except those based on nuclear fuels) which are technologically feasible, and which promote the efficient use of facilities and fuels consistent with energy conservation goals, and the considerations specified in AS 44.56.180(e); (3) an energy conservation component, including but not limited to, (A) conservation goals for reducing consumption of energy, identifying the region for which applicable, and the source or type of energy to which the goals are applicable; and (B) specific methods and means for achieving the goals of (A) of this paragraph; (4) a component for emergency energy conservation measures applicable during times of emergency; and (5) a report on areas or subjects of research and development and demonstration projects involving alternative energy systems, local energy sources, and energy conservation. -185- Appendix 2. Acknowledgements Alaska's Energy Plan - 1985 has been completed by the Office of Energy with the assistance and guidance of many people in and out of State government. Special thanks are mentioned here. First, to former Commissioner of Commerce and Economic Development, Richard A. Lyon, for his constant support and advice. Second, to Gordon Harrison and Ben Harding for their attention to accurately expressing Sheffield Administration policy. Third, to Wanda Springsted for typing this final report and several previous drafts. And finally, to the workgroup members and their staff who worked diligently throughout the plan development process. Acknowledgements are expressed to both these individuals and to others as shown on the following list. Mark Miller Plan Coordinator and Editor Office of Energy Jack Roderick Director Office of Energy STATE AGENCY PARTICIPATION A. WORKGROUP MEMBERS: NAME Sandra Borbridge Jim Dahiman Andy Ebona Jack Farleigh Ned Farquhar Carl Gonder Ben Harding TITLE Special Staff Assistant Director Governmental Coordinator Executive Director Special Assistant to the Commissioner Strategic Planner Special Staff Assistant OFFICE/DEPARTMENT Office of the Governor Energy Assistance, Department of Health & Social Services Office of Management & Budget, Office of the Governor Alaska Public Utilities Commission Department of Natural Resources Statewide Planning, Department of Transportation and Public Facilities Office of the Governor -187- Appendix 2. Acknowledgements (Continued) A. WORKGROUP MEMBERS: (Continued) NAME George Matz Mark Miller Karen Perdue Brent Petrie Jack Roderick TITLE Special Assistant to the Commissioner Plan Coordinator, Editor Director Director Director B. COMMENTS AND ASSISTANCE: NAME Steve Baden Ginger Baim Norman Bair William Beardsley Guy Bell Susan Betit Bob Brean -188- AFFILIATION OFFICE/DEPARTMENT Department of Commerce & Economic Development Office of Energy, Department of Commerce & Economic Development Division of Community Development, Department of Community & Regional Affairs Project Development, Alaska Power Authority Office of Energy, Department of Commerce & Economic Development Division of Community Development - Department of Community and Regional Affairs Legislative Aide - Office of Senator Vic Fisher Division of Community Development - Department of Community and Regional Affairs Economic Analysis Section - Department of Commerce and Economic Development Office of Management & Budget - Office of the Governor Department of Transportation and Public Facilities Division of Community Development - Department of Community and Regional Affairs Appendix 2. Acknowledgements (Continued) B. COMMENTS AND ASSISTANCE: (Continued) Michael Cushing David Denig-Charkroff Paul Engleman Jim Gurke Gordon Harrison Alexander Hoke Gretchen Keiser Don Markle Ted Morinski Kristina O'Connor Craig Olson Merlyn Paine Robert Schiller Richard Seifert Jackie Stewart Division of Community Development - Department of Community and Regional Affairs Alaska Power Authority - Department of Commerce and Economic Development Economic Analysis Section - Department of Commerce and Economic Development Office of Energy - Department of Commerce and Economic Development Office of Management & Budget - Office of the Governor House Research Agency House Research Agency University of Alaska Alaska Public Utilities Commission - Department of Commerce and Economic Development Division of 011 & Gas - Department of Natural Resources Division of Forestry - Department of Natural Resources Department of Transportation & Public Facilities Economic Analysis Section - Department of Commerce and Economic Development University of Alaska Economic Analysis Section - Department of Commerce and Economic Development -189- Appendix 2. Acknowledgements (Continued) B. COMMENTS AND ASSISTANCE: (Continued) Susan Woldridge Dr. Tunis Wentig Pat Woodell Vincent Wright Department of Administration University of Alaska, Fairbanks Office of Energy - Department of Commerce and Economic Development Department of Revenue, Research Section C. ADMINISTRATIVE SUPPORT: NAME Zona Cafferata Cheryl Rapp Karen Rhinevault Wendi Sollenberger Wanda Springsted Carol Whelan AFFILIATION Department of Administration Department of Commerce and Economic Development Department of Commerce and Economic Development Department of Commerce and Economic Development Department of Commerce and Economic Development Department of Commerce and Economic Development D. TELECONFERENCE STAFF: NAME Micki Hensen Linda Hoff David Jensen Barbara Norrel] —190= AFFILIATION Legislative Information Office - Anchorage Legislative Information Office - Juneau Legislative Information Office - Anchorage Legislative Information Office - Anchorage Appendix 2. Acknowledgements (Continued) E. PUBLIC PARTICIPATION AND COMMENTS: NAME, David Allison Wayne Beckwith Art Chance Neil Davis Kurt Dzinich Michael Deman Claude Frank Eugene Furman Robert Hufman Mary Jim Mike Kelley Steven Konkel Nancy Lee Fred Nishimura Thomas Nisninginga Roger Poppe Peter Poray John Rainier Gene Rutledge Steve Shows Michelle Sydeman Bob Taylor Mead Treadwell AFFILIATION Attorney - Juneau Anchorage Chamber of Commerce - Anchorage Southeast Solar - Juneau Energy Specialist - Fairbanks Juneau Energy Committee - Juneau Southeast Alaska Community Action Program - Juneau Naknek Electric Association - Naknek Accountant - Anchorage Utilities Consulting Services - Anchorage Nunam Kitlutsisti - Rural Alaska Golden Valley Electric - Fairbanks Konkel & Company - Juneau Energyfocus, Anchorage Bristol Bay Native Association - Dillingham Private Citizen - Barrow Office of Representative Mike Szymanski - Anchorage Municipality of Anchorage - Anchorage U.S. Forest Service - Juneau Energy Specialist - Anchorage Juneau Energy Committee - Juneau Rural Alaska Community Action Program - Anchorage Maniilaq Association - Kotzebue Yukon Pacific Corporation - Anchorage ~L91= Appendix 2. Acknowledgements (Continued) E. PUBLIC PARTICIPATION AND COMMENTS: (Continued) NAME. AFFILIATION Jeff Wetzlin Tanana Chiefs Conference - Fairbanks Jerry Wongitillin Mayor - Savoonga Matt Zencey Rural Alaska Community Action Program - Anchorage -192- Appendix 3. List of Conversions Btu energy equivalents: ENERGY FORM A. Electricity - Capacity - Generation B. Oil - Crude oi] - Diesel fuel - Distillate fuel oil - Motor gasoline - Aviation gasoline - Jet fuel - Kerosene - LPG (liquified petroleum gas) - Lubricants - Resid. (residual fuel oi1) STANDARD UNITS kW (Kilowatt) MW (Megawatt) kWh (kilowatt hour) MWh (Megawatt hour) bb] (barrel) gal (gallon) bb1 gal bb1 gal bb] gal bbl gal bbl gal bb] gal bb1 gal bb] gal bb] gal BTU EQUIVALENT 3,412 3,412,000 5,800,000 138,095 5,825,000 138,690 5,825,000 138,690 5,253,000 125,070 5,048,000 120,190 5,355,000 127,500 5,670,000 149,690 4,011,000 95,500 6,065 ,000 144,400 5,287,000 149 ,690 —1.93> Appendix 3. List of Conversions (Continued) 1. Btu energy equivalents (Cont.): ENERGY FORM STANDARD UNITS BTU EQUIVALENT C. Coal - Alaskan coal Short ton (2000 1bs) 16,440,000 1b 8,220 - Domestic Short ton 23,250,000 anthracite 1b 11,760 - Domestic Short ton 22,430,000 bituminous 1b 11,215 - Coke Short ton 26,000,000 D. Natural gas SCF (Standard cubic foot) 1,020 MCF (Thousand cubic feet) 1,020,000 1 therm 100,000 1 gallon of liquified petroleum gas (LPG) 95,475 E. Peat - Alaskan peat 1b 6,000 - 9,000 F. Wood - Sitka Spruce cord 17,100,000 2. Measurement Equivalents: 1 ton 2,000 pounds 1 bb] (barrel) 42 gallons 1 MCF 1,000 cubic feet 1 therm 100,000 Btu 1 quad one quadrillion Btu 1 MW (megawatt) 1,000,000 kilowatts 1 kW (kilowatt) 1,000 watts 1 GWh 1,000,000 kilowatts 1 Btu The quantity of heat required to raise the temperature of one pound of water one degree Fahrenheit. -194- Appendix 4. Abbreviations Used In Plan (Continued) Arctic Environmental Information Data Center Alaska Public Utilities Commission, DCED barrel, where one barrel equals approximately 42 British thermal unit - measure of power or heat Ongoing or within routine budget request Cooperative Extension Service - University of Alaska measure of wood that would fit into 128 cubic feet Department of Commerce and Economic Development Division of Energy and Power Development (expired Department of Community and Regional Affairs Department of Health and Social Services ABBREVIATION ABBREVIATION DESCRIPTION AAC Alaska Administrative Code AEIDC AHFC Alaska House Finance Corporation ANGTS Alaska Natural Gas Transport System AO Administrative Order APA Alaska Power Authority, DCED APUC A.S. Alaska Statute bb1 gallons BPD barrels per day BR Budget Request Btu G CES CIRI Cook Inlet Regional Corporation cord DC direct current electricity DCED DEPD (12/31/83) DCRA DHSS DI Division of Investments, DCED DNR Department of Natural Resources 5 = Appendix 4. Abbreviations Used In Plan ABBREVIATION ABBREVIATION DESCRIPTION DOA Department of Administration DOT/PF Department of Transportation and Public Facilities EIC exploration incentive credits FERC Federal Energy Regulatory Commission FY fiscal year: State July 1 to June 30 Federal October 1 to September 30 gal gallons GOV Office of the Governor GWh gigawatt hours (1 million kilowatts) kV kilovolt (1,000 volts) kW kilowatt (1,000 watts) kWh kilowatt hour L Legislation 1b pound LIHEAP Low Income Energy Assistance Program LNG liquified natural gas LPG liquified petroleum gas MCF thousand cubic feet MOU Memorandum of Understanding MW megawatts (100,000 watts) MWh megawatt hours (100,000 watts) NPS net profit shares O&M operation and maintenance activities = 9 6= Appendix 4. Abbreviations Used In Plan Power Cost Assistance Program (expired 10/84) Power Cost Equalization Program (began 10/84) Rural Electrification Revolving Loan Fund ABBREVIATION ABBREVIATION DESCRIPTION ocs Outer Continental Shelf OE Office of Energy, DCED PCA PCE PURPA Public Utilities Regulatory Policies Act R Regulation Change RERFL SCF standard cubic foot short ton two thousand (2,000) pounds TAGS Trans-Alaska (Natural) Gas System TAPS Trans-Alaska (0i1) Pipeline System TCF trillion cubic feet WTG wind turbine generator Or —