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Home My WebLink AboutPower Supply Study, Vol 1, City of Unalaska, June 30, 1998POWER SUPPLY STUDY UNALASKA, ALASKA Volume 1 CITY OF UNALASKA June 30, 1998 the Financial Engineering Company POWER SUPPLY STUDY UNALASKA, ALASKA Volume 1 CITY OF UNALASKA June 30, 1998 the Financial Engineering Company the Financial Engineering Company 800 East Dimond Blvd., Suite 3-310 Anchorage, Alaska 99515 Phone (907) 522-3351 Fax (907) 344-1843 June 30, 1998 Mr. Mike Golat Department of Public Utilities PO Box 610 Unalaska AK 99685 Dear Mike: Enclosed is the final copy of the Power Supply Study for the City of Unalaska’s Electric Department. The report summarizing the analysis and findings is provided in Volume I, whereas Volume II contains detailed spreadsheets summarizing the dispatch and financial analyses of the various power supply options investigated. The Financial Engineering Company appreciates the opportunity to assist the City in charting a course of action with regard to its future power supply. The efforts of the City’s staff were of significant help in preparing this report and are very much appreciated. Very truly yours, THE FINANCIAL ENGINEERING COMPANY hike Bolla Michael D. Hubbard Section ES Il Ill IV City of Unalaska Power Supply Study Table of Contents Page BSX@CUTIVe/ SUIMMIMNY jo cceecccessnccrtccssesaccseeeyescessee ES - 1 Introduction OV OnViC Wieccccresceeesceteccoresrersectectssnevesssereectases 1-1 Methodology of AnalySis...........::sscsseseseee 1-2 Self Generators sscccssecscegscsssssssssessvesecsessxsssess 1-3 Power Requirements i I-1 1-2 American President Lines - II -2 eased eicecseccrecssnteceess = Il -2 Cold Storage....... . II -3 Combined Loads cecscccecsrcecsesesoscessccceseseseeess I-3 Existing Power Supply intoductionere css ceeseeecesrrccrececessscrerssracseesces Il-1 City RESQUECES sscsecectecec-szevasessescerossesevessense=o Hl-1 DEC Operating Permit - City............... Il -2 UniSea IRCSOURCES secereprersererceestccttsercststerersencess III - 3 DEC Operating Permit - UniSea. Il -3 APL... as Il -3 Sea-Land .... se Hl - 3 Operating Cost) Tercsececcscccoscsncesscecoceceessesesese Hl - 3 Adequacy of Resources (Genta iecsscecsccscsscsreccstesescesntecessrotssensceseesess IV -1 City-Only Loads No Load Growth ......ccecesessesesseseeseseeees IV -2 1 Percent Load Growth ..........ssssseseees IV -3 2 Percent Load Growth .........sccesseeseeee IV -3 City With APL Loads ..... es IV -3 Cold Storage................ om IV -3 City With Sea-Land Loads. wes IV -3 ity Wnt Sea sesccceseretecccesescscsscesneceseccerssvosssed IV -4 CODSENVALIONS eceesecetscecsscescsescsseccssesoncecsceenees IV-4 Section VI Vil VII City of Unalaska Power Supply Study Table of Contents - Continued Potential Resources Makushin Geothermal Project Coal... Combustion Turbines Internal Combustion Fuel Cell... Other... Analysis General Reserves ... ASSUMPIONS ........scscseeseseeetseseseseseseeeeeseeeees Analysis City/UniSea Operations Separate ........ City/UniSea Operations Merged.......... Observations and Conclusions .. Action Plann .......cccsccssscsssessseeesseerseeseeeeesseeeeeees Appendixes: in io moog rn ee es OMaAKDHWNN— <e<cccc cc << 1 o VI-1 VI-2 VI -3 VI-3 vVI-4 Appendix A — Minimum/Maximum Hourly Loads Appendix B — Existing Resource Data Appendix C — Potential Resources C-1: Pyramid Hydro Project C-2: Wind C-3: Makushin Geothermal Project C-4: Coal C-5: Combustion Turbines C-6: Internal Combustion Appendix D — Dispatch Analysis (Volume II) Appendix E — Finance Runs (Volume II) Table 3a 3b CoCwmrntan fs =s 12 13 14 15 16 17 18 19 20 City of Unalaska Power Supply Study Table of Contents - Continued List of Tables Installed Capacity City Peak and Energy Requirement ...............c-sssssssssseseseseses Summary of Monthly Power Requirements (1997).............-+ Summary of Annual Power Requirements (1997-2020) Maintenance Intervals — City Resources .............s:ssssssseeeeeees Permitted Operations — City Resources..........:.ssscsssseeseeeeeees Summary of Existing Resources..............c.c.scsssscscscsssseseseseree City Reserve Margins at Present Loads..............s:ssscssssssseseees Pyramid! CreekiHy dro) Project escrccccccecercscsneecsecsecescsesessereassees Wiilicl [ReSOUNCE] COSts marseessnstensrsnestnreternassaenensest seers tenenernrentee Makushin Geothermal! Project ixcec-ccc-cecesescsusnscoversuscensnsvsveseses= Optimum Size of Coal Resource ...............-.-.-c-cscscscsssssssesseees CoalsProject Costs soos serecereseccecenecssteseconscensessnesscvesessssrsaeeceres Combustion Turbine ..0.........cccscseseseseseseeseeseseseseseseenseeeseeneneee Comparison of Emission Rates Internal Combustion wee Ficarol| Cee] | otecerocccersnecsescecersncenesrencnovsnsvecsevtccerconeseteseraranvecterszeees Fl ydro Semsitt Vit y<coccecc-scccaccecsesssseneseseeesusececrscessseswoceneseesrsessers Summary of Results (Without UniSea) «0.0.00... eeeeeeeee Summary of Results (With UniSea) ............cceeeeeeeeeeeeeeeeee ASSUMPTIONS..........cssssesesescsescesesescseecesesesesescsceseseecscseseseacseaees Figure 2a 2b 2c 10 11 12a 12b 13 City of Unalaska Power Supply Study Table of Contents - Continued List of Figures Location Map.......scccccssssescsesseseseesesesesessesesescseseessssssseseseseseees City Monthly Energy Distribution ..............ccesssseseseeteeeeeee UniSea Energy Distribution..................ssscscssssssssssssessesesceseee APL Energy Distribution ...............cscescsesesseseseseseseeeeeeeeeeseeees Average Cost of Generation ...........ccccecesesseseseseseseseseseseeeeeeees Incremental Cost of Generation ...........ccccceseesesesesssseeeeeseeeees Installed Capacity/Peak Requirements — City With No Load Growth ............cccsseseesssssssseeseseesenees Installed Capacity/Peak Requirements — City With 1% Load Growth... eseseeeeeeeeeeeeeeeeee Installed Capacity/Peak Requirements — City With 2% Load Growth...........cccccceseseseeeseseseeeeeeeeeees Installed Capacity/Peak Requirements — City With APL... ee ees eceecceseseseeceeecseseseeeeseseseneeeeseeees Installed Capacity/Peak Requirements — City With Cold Storage ........c.cccecseceseseseseseseeeeeeeeceseeeees Installed Capacity/Peak Requirements — City With Sea-Lannd ou... eesssseseseeessesseeseseeeeeeeenenessene Installed Capacity/Peak Requirements — City With WMS a ses sacs case cost cs cscs ssrssssntscaresspstscsncnevsvaseroes ‘Coal Price vs., RESOUrCE S1Ze wsestesecssssassssussveveesseusnrsesecseswssseass Coal Price for Given City Loads.............cccseseseseseseeseseseeeeeees Cost of Power (Potential Resources) ..........:ssesssesesseseseeeeeeees Page 1-4 Il -6 Il-7 Il-8 Ill - 6 Il -7 IV -6 IV -7 IV-8 IV -9 EXECUTIVE SUMMARY INTRODUCTION Since the mid 1980°s, the power requirements of the City of Unalaska’s Electric Utility (the “City”) have increased over five fold. In order to provide for this growth, the City simply continued to add diesel-fueled internal combustion generators. Other resources have been investigated, but their high capital costs and uncertainty of future loads precluded their development. Consequently, the City relies exclusively on diesel fuel for its power generation; not unlike most rural Alaskan utilities. Recently, however, it has become increasingly difficult for the City to rely on diesel generation for its existing loads as well as to provide for load growth. New environmental regulations implemented by state and federal agencies have resulted in annual production limits on the City’s existing generation. Although these limits are greater than current energy requirements, there is little margin for future load growth. Furthermore, extensive modeling efforts must be performed for new generators, and alternative sites may have to be obtained for new resources since they may not be able to be located at the existing power house. As a result of these and other events, the City issued a Request for Proposals to investigate the City’s power supply options and to make recommendations as to how to provide for future loads. The analysis is to: 1. Assess the City’s capacity constraint problem. 2. Provide a ranked assessment of the projected life-cycle costs of power supply alternatives available to the City. Identify the three most feasible options. 4. Assess the steps required to implement the three most feasible options. This report provides a summary of the investigations and analyses conducted by the Financial Engineering Company during its review of the City’s power supply options. POWER REQUIREMENTS The development of detailed projections of power requirements was not included in the scope of work. Instead, the City’s existing loads were assumed to grow at an average annual rate | percent over the 20-year study period; and the results are tested for their sensitivity to differing growth rates. However, the City is in a unique situation whereas it can significantly increase its sales simply by providing power to certain entities that presently self generate. In the past, the City has not been able to accommodate requests from several of the self generators for full service due to capacity and production constraints. Power Supply Study Executive Summary Page ES - | A meeting was held in January 1998 with the three on-shore processors and American President Lines (“APL”) to determine their power supply plans and interest in this study. APL expressed an interest in having the City provide for all of its power requirements net of crane operations, and UniSea was interested in having the City take over its power supply operations if the economics were favorable. The remaining on-shore processors wished to continue self generation and provide supplemental power to the City only on an emergency basis. Sea-Land presently has part of its overall power requirements supplied by the City and the remaining amount is provided through self generation. They were not contacted at this time, but since they have requested full service in the past, their self-generation loads are included in several cases of the analysis. The power requirements of the various load centers are provided in Table ES-1. Although a 1 percent growth rate is applied to City loads, the non-City loads are assumed to remain the same throughout the study period. A potential cold storage facility is also included in the table, although it is not certain that the facility will be constructed. Table ES-1 Peak and Energy Requirements Peak Demand (thousands of kilowatts) 1999-2000 2005 2010 2015 2020 City 5.6 5.7 5.9 6.2 6.6 6.9 APL 43 43 43 43 43 43 Sea-Land 2.3 23 23) 2 23 23 Cold Storage 1.5 1.5 1.5 L5 LS 1 ee) UniSea 10.5 10.5 10.5 10.5 10.5 10.5 Energy Requirements (thousands of kilowatt-hours) 1999 2000 2005 2010 2015 2020 City: Sales 26,800 27,068 28,449 29,900 31,425 33,028 Losses/Other 3,368 3,402 3,575 3,758 3,949 4,151 Total Requirements (City) 30,168 30,470 32,024 33,657 35,374 37,179 APL 5,503 5,503 5,503 5,503 5,503 5,503 Sea-Land 2,192 2,192 2,192 2,192 2,192 2,192 Cold Storage 4,380 4,380 4.380 4,380 4,380 4,380 UniSea 29,209 29,209 29,209 29,209 29,209 29,209 Total! 71,452 71,754 73,308 74,941 76,658 78,463 1 Total energy requirements will depend on which load centers become City customers. Total not provided for peak demand since system peak will be less than the sum of individual peaks due to system diversity. Power Supply Study Executive Summary Page ES - 2 EXISTING POWER SUPPLY In order to provide for their respective power requirements, the City and others own, operate, and maintain a number of diesel-fueled internal combustion generators. All of these are operated under air quality operating permits issued by the State of Alaska’s Department of Environmental Conservation (“DEC”). The City has eight generating units with a combined capacity of 6,500 kilowatts at its power house and another 1,000-kilowatt generator in a mobile van in Unalaska Valley. The latter unit was placed in that location in the event of a service disruption between the two islands and is operated as required. The City’s air quality operating permit limits the production of its eight primary resources to approximately 39.6 million kilowatt-hours or 2.8 million gallons of fuel per year. These restrictions are resource specific in that once the energy or fuel limit for a particular resource is reached, that resource cannot be used for the rest of the year. Therefore although the energy production limit is greater than present annual energy requirements, the air quality permit limitations could create production shortfalls towards the end of the year if resource generation is not scheduled properly through the year. The City also purchases supplemental energy from UniSea, but the present contract provides for power to be delivered on an as-available basis. Therefore, it should not be included as capacity when comparing generating capability with peak loads. UniSea operates six Fairbanks-Morse units and two small Caterpillar units with the waste heat from the Fairbanks-Morse units used to heat company facilities. The combined capacity of the six primary units is 15,150 kilowatts, but UniSea’s DEC air quality operating permit limits operations to four units at any one time. Therefore, the effective capacity of the units is 10,350 kilowatts, the total of the four largest units. APL and Sea-Land also have their own generation that are operated under separate DEC permits. If either one of these are brought on as a City customer, new generating resources would probably be acquired in lieu of these resources being transferred to the City. Therefore, detailed data on these units were not obtained. ADEQUACY OF EXISTING RESOURCES Figure ES-1 at the end of this section provides a summary of the City’s peak requirements and existing capacity over the study period ending in 2020. Although there is sufficient capacity for existing loads, a | percent load growth would require additional capacity by 2006 in order for there to be adequate reserve margins. As a minimum, the City should have sufficient capacity such that the annual peak load can be met if the largest unit is unavailable due to an unscheduled outage. Based on the peak requirements provided in Table ES-1, Figure ES-1 shows that the APL, Sea-Land, or the proposed cold storage facility loads cannot be accommodated unless the City augments its existing power supply. This holds true even if the loads of the City’s existing customers do not increase. Power Supply Study Executive Summary Page ES - 3 Figure ES-2 provides a summary of the City’s loads and resources if the City was to acquire UniSea’s power production operations. Installed capacity includes all of the City’s existing resources and UniSea’s 10,350 kilowatts of permitted capacity. Since three UniSea units would have to be off-line before the UniSea capacity is not available, the largest-unit contingency in Figure ES-2 should be based on the City’s largest unit. However, a largest unit contingency is not shown, because it is felt that one of the remaining UniSea units could be used on an emergency basis if a City resource was unavailable at peak periods. The combined peak of the City and UniSea loads does not equal the sum of the two individual peaks since a degree of diversity exists between the two systems. Hourly load patterns for 1997 were used to estimate this diversity, but it is important to note that UniSea’s operations are significantly dependent on when fish arrive for processing. Therefore future load patterns will not be identical to historical, and the combined system peak of the two systems in the future could differ in either direction from that assumed in the analysis. Although the combined system provides sufficient capacity for existing loads and some load growth, there is inadequate existing capacity to include APL or Sea-Land into the system. The proposed cold storage facility could be included, but spinning reserves would be inadequate during peak periods and greater than expected load growth on the City or UniSea system would cause capacity shortages. The comparisons summarized in Figures ES-] and ES-2 are limited in that they do not take into account certain issues that must be addressed. These include: e The installed capacity is based on full rated output. If full loading is required for prolonged periods for a resource, maintenance costs could increase. For this reason, the loadings of City resources are typically limited to 85 percent of each unit’s rated output. e Capacity includes Unit 7 which is located in a portable van in Unalaska Valley. The City wishes to operate this resource only in emergencies, and load growth or maintenance on other units could increase the reliance on Unit 7 absent energy from UniSea. e DEC energy and fuel limitations are resource specific on a calendar-year basis. If a particular resource is dispatched for large periods of time in the early months, then it may reach its permitted energy production or fuel use prior to the end of the year. In such an event, capacity shortfalls may occur. e In order to prevent capacity shortfalls due to the DEC limits, it may be necessary to dispatch the City resources in a manner that is not the most economic. ¢ Other potential resources may exist that are more economic than the existing resources. Even with these limitations, several observations can be made from the comparisons. These include the following which are also drawn from the detailed data provided in Section IV of this report. 1. The City has adequate capacity to meet the present level of loads of its existing customer base. However in order to avoid purchases the City must: Power Supply Study Executive Summary Page ES - 4 ¢ Operate resources at full capacity during the peak period in February. ¢ Operate Unit 7 for certain periods if production on City resources is limited to 85 percent of rated capacity. The City typically restricts operations of its resources to 85 percent of rated capacity to prolong maintenance cycles and useful lives. 2. The City cannot provide full service to APL without the addition of at least 3,000 kilowatts of capacity. The actual amount required will depend on estimated load growth of the City’s existing customer base and the size of the largest unit in the revised system. 3. The inclusion of Sea-Land’s self-generated loads also causes reserve margins to fall below acceptable levels. Energy could be sold to Sea-Land on an as- available basis, but this could: e Create the need to operate City resources at greater than 85 percent of their rated output, and e Increase the need to purchase supplemental power from UniSea due to DEC energy production limits. 4. The inclusion of the proposed cold storage facility will cause reserve margins to fall below acceptable levels, and the system could not incur any additional load growth without resource additions. 5. UniSea’s own loads are approaching their permitted capacity of four units operating at any one time, or 10,350 kilowatts, making UniSea an unlikely source for firm capacity. 6. Load growth on the City’s system can better be accommodated if the City’s resources and loads were combined with those of UniSea’s. However, APL’s or Sea-Land’s loads cannot be met under such a system due to DEC operating restrictions. POTENTIAL RESOURCES A number of potential resources exist that can be installed by the City in an attempt to better provide for its existing customers or to increase installed capacity so that APL, Sea-Land, or the proposed cold storage facility can be included into the customer base. Detailed descriptions of these resources are provided in Section V and Appendix C but are summarized below. PYRAMID CREEK HYDROELECTRIC PROJECT This potential hydroelectric resource consists of tapping into the City’s existing water supply pipeline near the chlorination building and diverting water through a penstock to a powerhouse to be constructed at tidewater. Since the project diverts water away from the City water system, increases in domestic water use will decrease the amount of water available for energy production. The capital costs have been estimated by the State of Alaska’s Division of Energy (“DOE”) to be approximately $2.2 million for a 600 kilowatt facility. Firm capacity Power Supply Study Executive Summary Page ES - 5 benefits may not exist, however, since a report commissioned by DOE states that there are significant periods when there would be little or no energy production. WIND Even though there are a number of sites available in Alaska that are conducive to wind turbines, there has been very limited development of these resources within the state. High capital costs, lack of capacity benefits, and environmental considerations (i.e., remote locations, icing, salt spray, inconsistent wind patterns, and others) can significantly reduce resource economics. Recently, however, Kotzebue Electric Association installed three 66-kilowatt turbines at a cost of approximately $1,000/kilowatt. These turbines were placed into operation in May and July 1997. Initial problems existed, but reliable operations have occurred since November 1997. Based on information gathered from Kotzebue Electric Association, the manufacturer (Atlantic Orient Corporation), and other sources, construction and operating costs of a five-turbine facility were estimated. Energy production was based on historical hourly wind data recorded at Pyramid Valley next to the City’s water reservoir. MAKUSHIN GEOTHERMAL PROJECT The Makushin Geothermal Project has been studied intermittently by the State of Alaska and others since at least the early 1980's. Since the time of the last review in 1996, the rights to develop the resource have been transferred to Kiiguusi Suuluta Land Company (“KSLC”). KSLC proposes to construct a 14-megawatt (net of station service) resource at an estimated cost of $78.6 million. COAL DOE recently commissioned a study to estimate the construction and operating costs of small, coal-fired resources. Project economics will depend in part on the size of the resource, and economics will typically improve as resource size is increased since fixed costs can be spread over a greater amount of energy production. However in the City’s case, increased resource size does not necessarily result in increased energy production due to limited energy requirements. Therefore, two separate unit sizes were investigated: 3,500 kilowatts and 5,000 kilowatts. The lower capacity represents a reasonable size if UniSea loads are not included with the City, and the larger size represents a size that might be constructed if their loads are included. For purposes of this analysis, the construction costs are assumed to be $10.3 million for the 3,500-kilowatt unit and $13.2 million for the 5,000-kilowatt unit in 1998 dollars. Capitalized interest and other financing costs would increase these amounts accordingly. Since the coal resource would use fossil fuel, it would have to go through an extensive DEC permitting process. No emissions data were available at this time. Power Supply Study Executive Summary Page ES - 6 COMBUSTION TURBINES Although diesel would still be the primary fuel, combustion turbines offer the City an alternative to its existing internal combustion generators. Combustion turbines typically require more fuel per kilowatt of output, but they offer the advantage of lower maintenance costs and lower emissions. As such, it would be possible to increase the City’s capacity and yet show a net reduction in potential emissions. Various turbine manufacturers were contacted for capital and operating cost data, and two provided detailed data. Unit sizes selected for the analysis included 1,204 kilowatts, 3,636 kilowatts, 4,269 kilowatts, and 6,467 kilowatts. INTERNAL COMBUSTION A medium-speed Caterpillar diesel was also included in the analysis which would be compatible with the City’s existing resources. The unit size selected for analysis was a 3,300-kilowatt unit at a cost of approximately $1.6 million. FUEL CELL Fuel cells are similar to a battery in that electric power is produced through a chemical reaction. A clean, hydrogen-rich fuel, such as natural gas or propane, reacts with oxygen in the atmosphere to produce electricity. Heat and water are the primary by-products that can be used for other purposes. There has been limited research in the past on adapting the process to diesel fuel, but these units are not commercially available at this time. Based on the relatively high installed cost (in dollars/kilowatt) and the lack of a propane storage facility sufficient to handle the expected volume, this resource was not included in the detailed analysis. The costs of each resource type are summarized in Figure ES-3, and this data can be used in screening resources for specific uses. For example if a resource is expected to be used only for reserves with little run time, then a resource with low installed costs and high energy costs might be best suited. If, on the other hand, a resource is expected to run for a significant amount of time, then a resource with low energy or melded (fixed and variable costs combined) costs should be sought. For most applications, resources would provide both capacity and energy; and units with lower melded costs should be sought. It is important to note that the energy and melded costs in Figure ES-3 are based on all potential energy production from a particular resource being usable. To the extent that a resource cannot be fully utilized, then per unit costs would increase. ANALYSIS Although the installed capacity/annual peak comparisons in Figures ES-1 and ES-2 provide some insight into the City’s power supply, the comparisons are limited and cannot reveal all the issues. Therefore, a computer dispatch model was constructed to simulate the loads and Power Supply Study Executive Summary Page ES -7 resources of the various options investigated. The analysis is performed on an hourly basis so that usable energy from the large. base-load resource options can be estimated. The City can pursue any one of a number of different options regarding both customer base and resources. As previously described, customer base options include the following. ¢ City by itself with no customer base expansion eCity with APL e City with Sea-Land e Provisions made for the proposed cold storage facility e Inclusion of UniSea loads and resources into City operations Any one or combination of the options can be pursued by the City. Each customer base option will provide a different set of demand and energy sales that the City’s costs can be allocated to. Therefore, the analysis is performed on a cents/kilowatt-hour basis rather than a total dollars basis. Costs included in the analysis are as follows: 1. Fuel, maintenance, and purchased power costs that are estimated in the dispatch model; 2. Amortized debt payments for each of the new resources being considered; 3. Additional operating costs, if any, of the new resource; 4. Costs of implementing reserve units, if required; and 5. Other costs of the Electric Utility. Other costs of the Electric Utility were estimated by eliminating fuel, purchased power, supplies, and general contractor expenses from the 1998 Operating Budget. The remaining amount of approximately $2.5 million was thought to be a reasonable proxy of those costs not included in the first four items of the above list. Expansion of the customer base will increase the total system costs due to increases in fuel usage, maintenance costs, other variable operating costs, and other cost components. However, these cost increases will be spread over increased sales, and the City’s existing customers could still benefit. The results of the various customer base/resource options analyzed are shown in Table ES-2 and ES-3. The amounts shown in the tables represent the present value of the system costs (in cents/kilowatt-hour) over the 1999-2020 study period using a 6 percent discount rate. Also shown in the tables are the number of additional |,000-kilowatt units that are required so that adequate reserve capacity is available. The costs of these reserve units are included in the overall system costs. OBSERVATIONS AND CONCLUSIONS Based on the analysis conducted and summarized herein, certain observations and conclusions can be made regarding the City’s present power supply and what Power Supply Study Executive Summary Page ES-8 resource/customer base options may provide economic benefits. These include the following. 1. 10. He 128 The City’s resource base is adequate to provide for existing loads only with no significant load growth. If the City’s loads increases at an average rate of | percent per year, small amounts of unserved energy will occur by approximately 2010. This unserved energy will occur even with the use of Unit 7 and with purchases from UniSea. Any load growth on the system will increase the City’s dependency on Unit 7 production and purchases. In order to provide service to APL, Sea-Land, or the proposed cold storage facility, it will be necessary for the City to add to its resource base. In many of the cases evaluated, the incremental cost (in dollars/kilowatt-hour) of providing service to an expanded customer base is less than the average system cost. Existing customers could therefore benefit if new, large customers are brought into the system and pay the regular tariffs. However, no additional labor requirements to serve these new customers are included in the analysis. Additional labor may be required if generation is located at the customer site. If provisions are not made to include the proposed cold storage facility in the system, that facility, if built, will have to rely on self generation. In that event, it will be more difficult to bring them into the City system at some future time. Expansion of the customer base may require additional units to be installed for reserve purposes so that load can still be met if the largest resource is off-line during peak periods. This is especially true with APL and Sea-Land due to their relatively high demands. The Sea-Land load is expected to have a relatively low load factor such that energy requirements are low with respect to demand. Therefore if Sea-Land is brought on as a customer, demand charges should be thoroughly reviewed to ensure that the rates will recover revenues commensurate with the incremental cost of providing service. Based on the assumptions described herein, benefits could be gained by combining the UniSea and City systems. In all the customer base scenarios evaluated, the most economic resource option included a 4,269-kilowatt combustion turbine. For the Without UniSea scenarios, the combustion turbine combined with a wind turbine was the most economic. For the With UniSea scenario, the combustion turbine by itself was the most economic. The inclusion of wind turbines in the City’s resource mix carries an amount of risk since this type of resource does not have a long operational history in the area. Consequently, the level of uncertainty associated with both construction and operating costs is probably higher than other potential resources. Construction grants may be available for several resources including coal, wind, and hydro; and these grants would improve the economics of each of these. Power Supply Study Executive Summary Page ES-9 Apnig Ajddng 4anog AMDUUUNG DALINIAXT OL - $7 a80q Table ES - 2 Present Value of System Costs 1999 - 2020 @ 6% Discount Rate (Without UniSea) Reserve Reserve Reserve Units Cost Units Cost Units Req'd (cents/kWh) Req'd (1) Not run. Considered uneconomic or has significant amounts of unserved energy without the use of reserve units. Bold Face denotes cases with slight amounts of unserved energy without the use of reserve units. (iddng 1amog Apng AIDUILUNG BAIINIAXT I] - SJ 230d Table ES - 3 Present Value of System Costs 1999 - 2020 @ 6% Discount Rate (With UniSea) ‘old Stora; Case Unit None Firm Reserve Capacity Year Cost Added Added | (cents/kWh) Reserve Units Req'd 0 Cost Reserve Units Cost Req'd (cents/k Wh) 0 Reserve Units Req'd Reserve Coal Coal Hydro Turbine es Turbine Turbine creel tnelaewerhnicheniebeoeeensnhe Turbine eveerenafeveeeseveeafensafesstf sonny tatfenenfeeenfne Geothermal Hydro Turbine Hydro Turbine (1) Not run. Considered uneconomic or has significant amounts of unserved energy without the use of reserve units. Bold Face denotes cases with slight amounts of unserved energy without the use of reserve units. ymnareoven eentoneesee eatnannseeee) eeneofesecceneaseefpeceseriontahoes Figure ES-1 Existing Capacity/Annual Peak (City Only) WLM Tl | ce ee VILZAMHLQX vc i«i«iCi_ LSS N See ZAZKWW=W™Ww«W«CW(QRQQQ QQ WWV eas 2 TX _ CCD ————— Ss MW’”’w«—w—< Dw 3 C-<—Ci Ci CC KeKeKeCOSOiC Ci CCCiCiziCEi CC. ZZ “tt ; A WW] oD 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 8,000 SY ,000 6,000 Power Supply Study Page ES - 12 Figure ES-2 Existing Capacity/Annual Peak (City/UniSea) Wid WM @@C@E@E@EE@EL@E XE WMA M@EC@E@E EET MMC!!! M!@E@EX@€X@{ Hd Wd AA ULLAL LALLA LLL LLL ZAC ULLAL, ——— ULLAL LLL ULLAL LLL ULLAL ULLAL LALLA a : ee CLAN LLLLLLLLLL WL CLAM LILLLLLLA LLL ‘ # LLL ears 4 é lll 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 20,000 18,000 14,000 + 22 28 8 a Ss oo c = = || \|2 + av Power Supply Study Executive Summary Page ES - 13 Figure ES - 3 Cost of Generation (Potential Resources) Installed Costs ($/kilowatt) $8,000 $7,000 $6,000 $5,000 $4,000 $3,000 $2,000 $1,000 $ = Ll Pee en bee | hae) ee | Nery Le | | elit A yi wy wf lyr 7 s Energy Costs (PV @ 6%) 0.08 + 0.07 4 Boos. 0.05 + 0.04 foo 0.02 oo | & & & € ££ SF EF FC Ef * #& oF ¢ ¢ < Ry , ¥ & o | | f & # # # e Melded Costs (Based on All Energy Usable) 0.10 0.09 0.08 0.07 + i 0.06 0.05 + : 0.04 + 0.03 + 0.02 + 0.01 + 0.00 + Power Supply Study Executive Summary Page ES - 14 I. INTRODUCTION OVERVIEW Like many other rural Alaskan utilities, the City of Unalaska’s Electric Utility (the “City”) has relied on diesel-fueled internal combustion generation for its power requirements. Other resources have been investigated but were never developed due primarily to their high capital costs and uncertainty of future loads. Consequently, new diesel units were added as resource retirements and load growth dictated. In the early to mid 1990’s, however, new environmental regulations were implemented by state and federal agencies in an attempt to prevent further degradation of air quality in certain areas. The Unalaska/Dutch Harbor area was of concern to the regulators since the City’s power requirements had increased five fold since the mid 1980’s and several processors had established their own generators at various sites. Therefore, temporary limits were placed on the amount of energy that the City and others could annually produce until long-term operating permits could be put into effect. These temporary limits had several effects on the City. First, even though the City had adequate installed capacity to provide for loads, supplemental energy had to be purchased from one of the self generators. Second, requests by two self-generators, American President Lines (“APL”) and Sea-Land, for full City service had to be denied and system expansion was curtailed. In 1996, the City was successful in obtaining an air quality operating permit for its generating resources. This permit increased the amount of energy that could be produced by the City from the levels provided in the temporary permit. However, the City still faces a number of issues regarding its power supply. These include: e Loads have grown to the point where the City will soon have insufficient reserve margins based on having enough capacity at peak load periods if the largest unit is not available. e Energy production limits contained in the City’s air quality operating permit are greater than present energy requirements. However, the limits are resource specific and could result in energy shortages towards the end of a calendar year if a resource is used too much in the early months. e New fossil-fueled resources must undergo a_ permitting process, and environmental restrictions may increase the installed costs to the point where other forms of generation are more economic. e It is unclear whether the incremental cost of providing service to APL or Sea- Land would be offset by the incremental revenues gained from power sales. Power Supply Study Introduction Page l-1 Accordingly, the City issued a Request for Proposals to investigate the City’s power supply options and to make recommendations as to how to provide for future loads. The analysis is to: 1. Assess the City’s capacity constraint problem. 2. Provide a ranked assessment of the projected life-cycle costs of power supply alternatives available to the City. 3. Identify the three most feasible options. 4. Assess the steps required to implement the three most feasible options. This report provides a summary of the investigations and analyses conducted by the Financial Engineering Company during its review of the City’s power supply options. METHODOLOGY OF ANALYSIS A number of alternatives exist for the City regarding both power supply and power requirements. Therefore, the analysis summarized herein compares the cost of power under various assumptions regarding: e Customer base e Load growth e Resource alternatives e General economic/financial conditions Central to the analysis is estimating the amount of power produced from each generating resource over the study period, and this was accomplished by constructing a computer- simulated dispatch model. The model uses an economic dispatch methodology such that the least-cost resource for a given hourly load is dispatched first, followed by the next least-cost resource, and so on. Costs in the dispatch model are defined as fuel, amortized costs of overhauls, and provisions for miscellaneous maintenance. The capital costs of replacing a resource when it is retired were not considered when estimating the appropriate dispatch order. The analysis is performed on an hourly basis, and detailed load patterns had to be developed. Patterns used for each year of the study period are based on estimates of hourly loads during calendar year 1997, and the development of this data is described later in this report. Typical power supply studies evaluate power supply options by comparing total production costs of various resource alternatives over the study period. In this case, however, total production cost is probably not the correct index to use. If the City incorporates APL into the customer base, for example, total production costs will increase. However, this could result in lower costs for the City’s existing customers since fixed costs can be spread over a larger customer base. Therefore, total system costs, including non-production costs, were estimated over a 22-year study period beginning January 1999 and ending December 2020. These costs and the estimated sales are then used to develop average system costs in dollars/kilowatt-hour from which assessments of various power supply and customer base options could be made. Power Supply Study Introduction Page 1-2 SELF GENERATORS The first step in the analysis was to determine which self-generators, if any, were interested in being included as part of the City’s power supply options or load requirements. In addition to the City, there are now seven major self generators located in the area. Figure | at the end of this section provides the location of the City’s existing generating sites, a general description of its distribution system, and the location of the self generators. Total installed capacity is equal to 42 megawatts and is detailed in Table 1. Table 1 Installed Capacity (megawatts) Installed Capacity City 74 Alyeska Seafoods... 6.4 American President Lines 1.4 Icicle Seafoods.......... 2.1 Offshore Systems, Inc 1.3 Sea-Land.. 1.4 UniSea’.... 152) Westward Seafoods .. _6.9 42.1 1 Exclusive of portable gensets and generation dedicated to crane operations. 2 Exclusive of Caterpillar units. A meeting was held with the three processors (Alyeska Seafoods, UniSea, and Westward Seafoods) and APL to discuss the scope of this study and their plans regarding future power supply. Alyeska Seafoods and Westward Seafoods both indicated that they wished to continue self generation and did not want to provide the City with any supplemental power requirements other than for emergency purposes only. UniSea, however, expressed an interest in having the City take over its power supply if the economics were favorable. APL also expressed an interest in having the City provide its power requirements. Power for crane operations would, however, continue to be provided from their own generators. Sea-Land (who was not contacted at this time) currently purchases part of its power requirements from the City and self-generates the remaining amount. In the past, they have indicated a desire to purchase all of its power requirements from the City; but under the City’s previous production limits, Sea-Land could not be accommodated. However, these loads are included in this study based on their prior requests. Offshore Systems, Inc. (“OSI”) has not expressed a strong interest in the past to be a City customer, and their excess capacity is fairly minimal relative to City requirements. Therefore, they were not contacted and are not included in the study. Power Supply Study Introduction Page | - 3 Figure 1 2a west 0 <SLAND/ /— POWER HOUSE AND SUB STATION DUTCH ert) HARBOR + iE A . iGo pe MARGARET BAY SUB BOA ws J UNISEA SUB STATION CAPT. BAY ‘ ‘sop station J# SUB STATION <q, wmewers 34.5 KV —— 12.470 Kv 4.160 KV sore: IWIS MAP WAS DIGITIZED FROM U.S.G.5. DUTCH HARBOR PROVISIONAL HAP, DATED 1990, SCALE 125000, Power Supply Study Introduction Page | - 4 Il. POWER REQUIREMENTS The development of detailed projections of power requirements for each of the load centers was not included in the scope of work of this review. Instead, data for the most recent year was used as a base from which different annual growth rates could be applied. The following provides a description of the loads assumed for each load center, and the resulting monthly peak and energy requirements are provided at the end of this section. CITY Although the City’s energy requirements have increased over five fold since the mid 1980's, loads have remained essentially constant since 1995. Table 2 provides a summary of City peak and energy requirements over the past five years. Table 2 City Peak and Energy Requirements (FY 93 - FY 97) FY 93 FY 94 FY 95 FY 96 FY 97 Peak Demand (kW).......... N/A 5,125 5,730 5,510 5,505 Energy Requirements (MWh): Residential - 3,986 3,924 3,948 4,075 4,057 Small Gen Sve 5,205 5,128 5,094 4,325 4,673 Large Gen Svc... 2,73. 4,822 7,819 6,989 4,727 Industrial .. 8,965 10,607 11,636 11,872 13,304 Subtotal .... 20,868 24,480 28,497 27,261 26,761 Losses/Other 1,588 1,701 2,546 2,602 3,407 Total Requirements . 22,456 26,181 31,043 29,863 30,168 Sources of Energy: Generation 21,910 25,183 26,566 27,427 29,798 Purchases . 546 998 4.477 2.436 370 Total Sources. 22,456 26,181 31,043 29,863 30,168 1 Includes station use, Street Lights, and distribution losses. The monthly distribution of the preceding energy requirements are provided in Figure 2a at the end of this section. As can be seen in the figure, the City’s highest loads occur in the February to April time period. Power Supply Study Power Requirements Page Il-1 Hourly loads were estimated based on data provided by the City. This data represented generation demand levels at four-hour intervals for calendar year 1997, and preliminary estimates of hourly loads were developed by interpolating between each four-hour reading. The resulting loads were then adjusted so that the total energy for each month equaled actual power requirements. The resulting minimum and maximum load levels for each day of the year are provided in Appendix A-1. A | percent annual growth rates has been applied to these 1997 loads for most of the analysis in the study. Where appropriate, other growth rates are used to test the sensitivity of the results. UNISEA During the past two calendar years, UniSea’s power requirements have remained fairly constant at approximately 29 million kilowatt-hours per year. Figure 2b provides the monthly energy requirements for these two years, and the amounts shown for each year are very similar. High load periods are in the February to April and the September through October time periods. Bi-hourly energy production data from each of UniSea’s six primary generating units was obtained and was simply divided by two to estimate hourly loads. UniSea also uses two auxiliary Caterpillar units that accounted for approximately 13 percent of total energy production in 1997. The data for these units was available only on a monthly basis and had to be averaged over each hour of the month. The combined load used in the analysis may therefore be slightly flattened from actual usage patterns. Finally, purchases by the City were subtracted from the data to obtain UniSea’s native load. The resulting daily minimum and maximum loads are summarized in Appendix A-2. AMERICAN PRESIDENT LINES Bi-daily energy production readings were provided by APL for both calendar years 1996 and 1997. The time each reading was made was not available; and for purposes of this analysis, it was assumed that the readings were made on equal 12-hour increments. Hourly data was developed by simply dividing the total 12-hour production of all the generating units by 12. This, too, may flatten the load from actual usage patterns; but given the random nature of refrigerated van loads, the estimated hourly loads may not be too far from actual. Figure 2c provides the monthly usage patterns, and daily minimum and maximum loads are included in Appendix A-3. If APL becomes a City customer, the crane will continue to be powered by their own generation. Therefore, the hourly loads are based on energy production from all of APL’s generators expect those dedicated to crane operations. SEA-LAND Sea-Land presently purchases part of its overall power requirements from the City and self- generates the rest. Based on past conversations with Sea-Land officials, it is estimated that additional energy requirements from the City would total approximately 2.2 million kilowatt- hours with the load occurring in the January — March and August — October time periods. Power Supply Study Power Requirements Page Il-2 ipph ig The total monthly energy requirements were assumed to be shaped similar to APL loads on an hourly basis. COLD STORAGE In February 1998, an engineering firm in Anchorage contacted the City regarding power supply for a cold storage plant that they were designing. Based on preliminary designs, the facility is expected to have a peak load of approximately 1,500 kilowatts and an average load of 500 kilowatts. COMBINED LOADS Based on the preceding load data, the power requirements used in the analysis are summarized in Tables 3a and 3b. Table 3a provides monthly power requirements based on existing load levels and do not include any provisions for load growth. Table 3b, on the other hand, provides annual requirements and includes a | percent average annual growth rate for City loads and no load growth for the other load centers. Power Supply Study Power Requirements Page II - 3 Apnig Ajddng sanog sjuauaainbay 4anod >I] Bbq Table 3a Monthly Power Requirements (1997) Energy Requirements (Megawatt-hours) Jan_ Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total City 2,405 3,034 3,076 2,509 2,121 2,063 2,128 2,497 2,359 2,786 2,402 2,787 30,167 UniSea 2,412 3,419 2,660 2,700 2,067 1,855 1,852 1,845 3,731 3,038 1,838 1,792 29,209 APL 226 1,164 899 459 301 296 276 257 557 608 238 222 5,503 Sea-Land 300 390 380 - - - - 320 435 367 - - 2,192 Cold Storage 372 336 372 360 372 360 372 372 360 372 360 372 4,380 Total 5,715 8,343 7,387 6,028 4,861 4575 4,628 = 5,290 7,442 7,171 4,838 5,172 71,451 Peak Requirements (Megawatts) City 4.0 5.6 5.1 4.4 3.7 3.8 3.8 4.3 45 48 4.2 4.7 5.6 UniSea 10.5 10.0 7.0 6.3 6.0 5.7 48 5.0 9.6 14 5.6 4.5 10.5 APL 11 3.3 43 1.9 1.2 0.8 0.8 1.4 3.0 1.7 0.8 0.9 43 Sea-Land 1S 11 1.8 - - - - 1.7 2.3 1.0 - - 2.3 Cold Storage LS L5 15 L5 L5 Ls L5 L5 1.5 is 15 15 15 Total’ 18.7 21.4 19.8 14.1 12.4 11.8 10.9 13.9 20.9 16.3 12.1 11.6 24.2 1 Represents sum of non-coincident peaks. Actual combined peak will be less due to system diversity. Apnig 4jddng sanog sjuauaainbay 4anodg Table 3b ¢ - 1, 280g Annual Power Requirements 1997 ~ 2020 Energy Requirements _—___(Megawatt-hours) 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2015 2020 City 30,167 30,469 = 30,773 31,081 31,392 31,706 32,023 32,343 32,667 32,993 33,323 33,656 33,993 34,333 36,084 37,925 UniSea 29,209 29,209 29,209 29,209 29,209 29,209 29,209 29,209 29,209 29,209 29,209 29,209 29,209 29,209 29,209 29,209 APL 5,503 5,503 5,503 5,503 5,503 5,503 5,503 5,503 5,503 5,503 5,503 5,503 5,503 5,503 5,503 5,503 Sea-Land 2,192 2,192 2,192 2,192 2,192 2,192 2,192 2,192 2,192 2,192 2,192 2,192 2,192 2,192 2,192 2,192 Cold Storage 4,380 4,380 4,380 4,380 4,380 4,380 4,380 4,380 4,380 4,380 4,380 4,380 4,380 4,380 4,380 4,380 Total 71,451 71,752 72,057 72,365 72,676 72,990 73,307 73,627 73,950 74277 74,607 74,940 75,277 75,617 77,368 79,209 Peak Requirements (Megawatts) City 5.6 5.6 5.7 5.7 5.8 5.8 5.9 6.0 6.0 6.1 6.1 6.2 6.3 6.3 6.7 7.0 UniSea 10.5 10.5 10.5 10.5 10.5 10.5 10.5 10.5 10.5 10.5 10.5 10.5 10.5 10.5 10.5 10.5 APL 43 43 43 43 43 43 43 43 43 43 43 43 43 43 43 43 Sea-Land 2.3 23 23 2.3 2.3 23 23 23 2.3 23 2.3 2.3 23 23 2.3 23 Cold Storage 5 15 1.5 LS 15 LS LS 15 15 LS 15 15 15 15 15 1s Total’ 24.2 24.2 24.3 24.3 24.4 24.4 24.5 24.6 24.6 24.7 24.7 24.8 24.9 24.9 25.3 25.6 1 Represents sum of non-coincident peaks. Actual combined peak will be less due to system diversity. Apnig (jddng sanod SJUBUAAL nbay AOMOd 9-1] 280g Percent of Annual Requirements 12% 10% 8% 6% 4% 2% 0% Figure 2a Monthly Energy Requirements (City Loads) Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Dec Nov a on] 8 ; 8 a o 7) oo 2 2 z z = 32 L 3 ags 2 5 Ss BS = SH mes aS r z= 5 é 3 = e < 5 2 3 aa 5 2 ° 2 €§ &§ &€ & & & & & wv vt on foal nN nN -_ _ SANOY-}}UMESIFAL Power Supply Study Power Requirements Page Il -7 Figure 2c Monthly Energy Requirements (APL Loads - 1997) Nov Jul Jun Feb Jan 1,400 1,200 1,000 3 8 SANOY-}JEMESIFAL 200 Power Supply Study Power Requirements Page Il-8 Ill. EXISTING POWER SUPPLY INTRODUCTION In order to provide for their respective power requirements, the City and others own, operate, and maintain a number of diesel-fueled internal combustion generators. All of these are operated under air quality operating permits issued by the State of Alaska’s Department of Environmental Conservation (“DEC”). The following provides a description of the existing resources, and a summary is provided in Table 6 at the end of this section. CITY RESOURCES The City owns and operates nine Caterpillar units. Eight of these are located in the main powerhouse on Amaknak Island, and another is located in a mobile van in Unalaska Valley on Unalaska Island. This latter unit was placed in that location in the event of a service disruption between the two islands and is operated only on an emergency basis. The City maintains its resources pursuant to schedules recommended by the manufacturer. During a maintenance cycle, a minor overhaul is performed, then an in-frame inspection, another minor overhaul, and finally a major overhaul. At that time, the cycle is repeated until the unit is retired. According to the equipment supplier, each resource should last, if properly maintained, at least 150,000 — 200,000 operating hours. At that time, the engine block is expected to be fairly worn and may have to be replaced or the unit retired. Retirement/replacement of a unit will be a function of a number of factors including: ¢ air quality and other permit restrictions, e cost of increased maintenance, if any, associated with older units, e reliability, e cost of new units, e differences in fuel efficiencies, e load levels, and e differences in emissions. Maintenance schedules in effect for the City resources are summarized in Table 4. Cost of maintenance is at times expressed in “dollars per kilowatt-hour of Power Supply Study Existing Power Supply Page Ill - 1 generation.” However overhauls are a function of run-time: and if a particular resource is operated at less than full output for a significant amount of time, dollars per kilowatt-hour may not be reflective of actual costs. Therefore, maintenance costs are expressed in this analysis in “dollars per hour of run time” for all existing units regardless of the expected dispatch. Table 4 Maintenance Intervals City Resources' Minor Overhaul In-Frame Inspection Major Overhaul Total [Hours [ Cost Hours | Cost (S/hour) 10,000; 30,000 10,000; 30,000 10,000; 30,000 10,000; 30,000 10,000; 30,000 7.500; 15,000 10,000; 30,000 7,500; 15,000 1 2 3 4 > 6 8 9 PAAAAH HH PFAAHAHA MM MH PAAAANAMNM 1 Unit 7 is not included since it is operated on an emergency basis only. DEC OPERATING PERMIT - CITY The City’s Air Quality Control Permit allows the City to operate its generating units at the powerhouse as shown in Table 5. Although a combined total is shown in the permit, the energy and fuel limitations are on a resource-specific basis. Therefore once the energy or fuel limit for a particular resource is reached, that resource cannot be used for the remainder of the year. Table 5 Permitted Operations — City Resources’ Allowable Allowable Annual Annual Capacity Energy Fuel (kW) (MWh) (gallons) 300 1,090.62 84,638 300 1,090.62 84,638 600 3,708.11 284,462 830 5,129.55 373,509 620 3,831.71 273,234 1,440 9,422.96 673,874 1,180 7,721.59 504,235 1,230 7,601.62 535,238 6,500 39,596.78 2,813,828 2 5 4 5 6 8 9 1 Exclusive of Unit 7 which is not located at the powerhouse. Power Supply Study Existing Power Supply Page Ill - 2 UNISEA RESOURCES UniSea owns and operates six Fairbanks-Morse units and two small Caterpillar units with waste heat from the Fairbanks-Morse units used to heat company facilities. According to UniSea personnel, a separate boiler is required for heat if only one generating unit is operating. Two operating units can provide sufficient heat for the dock, loading pits, and one dormitory; and three operating units can provide heat for all UniSea facilities including the hotel. UniSea also maintains a set maintenance schedule for its resources. Operators have indicated that inspections are performed every 20,000 operating hours at a cost of $30-40,000 per unit, and major overhauls are performed every 40,000 hours at a cost of $250,000 per unit. This results in a variable maintenance cost of approximately $7.13 per operating hour. While this is significantly higher than the City’s cost per hour of run time, the capacity of the UniSea resources are greater than the City’s. Therefore on a per-kilowatt-hour basis, the variable maintenance costs of the UniSea resources will be comparable to the City’s resources. DEC OPERATING PERMIT - UNISEA UniSea’s permit with DEC is not energy constrained but rather limits operations to four units at any one time. Therefore, the 15,150 kilowatts of installed capacity in the six Fairbanks-Morse units is limited to a maximum of 10,350 kilowatts, the total of UniSea’s four largest units. APL APL has three primary units to provide power for buildings and for part of the refrigerated vans. Small, portable units are also used to provide additional power when the van load is high. Detailed data regarding these resources was not obtained since these units are fairly old and would probably not be used as primary generators if APL became a City customer. These resources could be transferred to other APL operations or used as standby units in the event of unscheduled outages occurring with the City’s primary resources. APL operates its resources pursuant to the terms of its air quality operating permit with DEC. If the City acquired APL as a customer, the City should investigate if the non-crane portion of the permit can be transferred. If so, then this may provide the City with an alternative means of adding capacity to its system. SEA-LAND Data on Sea-Land’s resources and operating permit were not collected for this analysis. OPERATING COST Fuel consumption at 25, 50, 75, and 100 percent loading of the City’s resources were provided by City personnel, and these are included in Tables B-1 and B-2 of Appendix B to Power Supply Study Existing Power Supply Page II] - 3 this report. Such detailed data were not available for UniSea’s resources, but monthly generating efficiencies were obtained. These are also provided in Appendix B, Table B-3. Based on this fuel data and the previously described maintenance costs, the variable operating costs of the resources at various loadings were estimated and are provided in Figure 3. The inverse relationship between cost and output is primarily a function of operating costs being a function of operating hours. As the output of a particular resource increases, maintenance costs per kilowatt-hour of output decrease. The cost of fuel included in Figure 3 is assumed to be 78.43 cents/gallon; the City’s base fuel cost when its contract with the primary fuel supplier was signed in 1997. The contract provides for changes in fuel prices depending on the OPIS fuel index. UniSea’s cost of fuel was not obtained, and it may be higher due to the City not having to pay tax. However, should the City obtain the UniSea system, then presumably it would purchase the fuel for all units, including those presently operated by UniSea. The incremental cost of generation from each resource is provided in Figure 4. This represents the additional cost to provide an additional kilowatt of output if a resource is already running. At times, the City must supplement its own resources with purchases from UniSea. The price of this energy is equal to one cent per kilowatt-hour less than the industrial rate established by Ordinance No. 94-26. The energy rate in the referenced ordinance is equal to 12.75 cents per kilowatt-hour, and the purchase power rate of 11.75 cents is included in the figures. Specific conclusions regarding proper dispatch orders are difficult to be made from the two figures alone. Actual dispatch will depend on real-time load levels, expected load levels, maintenance schedules of resources, air quality permit constraints, and other factors. Certain general observations, however, can be made; and these include the following. e City 6 has a higher average cost of generation than the other resources. It is only at high outputs that its cost compares favorably with others. Therefore, City 6 should be operated such that its output is at or near its full capacity. e The incremental cost of generation is always lower than the average cost. Therefore as the output of a resource is increased, cost will decrease in terms of dollars/kilowatt-hour. e Ifthe most efficient units are being used to meet load at any time and they are not fully loaded, small increases in load levels should be met by resources with additional capacity in lieu of starting other resources. The information shown in Figures 3 and 4 will also be useful when performing general screening of alternative resources. This will be presented in more detail in Section V. Power Supply Study Existing Power Supply Page Ill - 4 Apnig Ajddng 1anog Ajddng 4anog BUNSIX] § - II] 28g Table 6 Summary of Existing Resources Existing Unit Location Type Hours Capacity RPM (RW) Cat D353E 14,428 300 1,200 Cat D353E 26,377 300 1,200 Cat D398 Cat 3512 Cat 3512 Cat 3516 Cat 3512 Cat 3516 Incre- No Load mental (gph) Ceorawnwe wn = wn = 1 2 3 4 5 6 Apnig Ajddng sanog Ayddng samog Bunsixq 9 - Il] a8bd dollars/kWh Figure 3 Average Cost of Generation 0.14 0.13 — City 1 and 2 0.09 0.08 0.07 0.06 0.05 Unit Loading (kilowatts) Apnig Ajddng samog Ajddng samog 8uissixq7 L- I] 230d dollars/kWh Figure 4 Incremental Cost of Generation 0.14 0.13 0.12 0.11 om —— City 1 and 2 sores City 3 ——City 4 0.09. $Y ee City 5 —— City 6 ae City 8 ——City 9 asee Purchases 0.07 0.06 0.05 + 0.04 $4 4 a 500 1,000 1,500 2,000 2,500 Unit Loading (kilowatts) GENERAL IV. ADEQUACY OF RESOURCES As shown in Table 7, the City’s resources will provide sufficient capacity to meet present loads as well as adequate reserve margins. Various criteria are used when establishing target reserve margins; but as a minimum, there should be sufficient capacity or access to firm power so that the annual peak load can be met if the largest unit is unavailable due to an unscheduled outage. Purchases from UniSea would not be considered firm since power is provided on an “as-available” basis. Table 7 City Reserve Margins at Present Loads (kilowatts) Installed Capacity 7,430 Largest Unit (1,420) Net 6,010 Annual Peak (5,505) Net 505 Although the City has sufficient capacity at this time, there are a number of issues that the City must address when evaluating its power supply. These include the following. i The capacity shown in Table 7 is based on full rated output. If full loading is required for prolonged periods for a resource, maintenance costs could increase. For this reason, the loadings of City resources are typically limited to 85 percent of each unit’s rated output. Capacity includes Unit 7 which is located in a portable van in Unalaska Valley. The City wishes to operate this resource only in emergencies, and load growth or maintenance on other units could increase the reliance on Unit 7 absent energy from UniSea. Load growth on the system will reduce reserve margins such that new resources could be required in the near future. New loads anticipated by the City include a library, museum, UV plant for wastewater treatment, and the new Public Works/Public Utilities building. New large customers, such as the proposed cold storage facility, might not be able to be accommodated without the addition of new resources. Furthermore, APL or Sea-Land could not be included in the customer base without additional resources. Power Supply Study Adequacy of Resources Page lV -1 5. DEC energy limitations are resource specific on a calendar-year basis. If a particular resource is dispatched for large periods of time in the early months, then it may reach its permitted energy production or fuel use prior to the end of the year. In such an event, capacity shortfalls may occur. 6. In order to prevent capacity shortfalls due to the DEC limits, it may be necessary to dispatch the City resources in a manner that is not the most economic. 7. Attimes, more than one City resource may be off-line for maintenance. 8. Other resources may exist that are more economic than the existing resources. These issues will be addressed in detail in the following sections of this report. However in order to better understand the issues and to narrow the focus of the analysis, comparisons of installed capacity and peak requirements under various customer base and load growth scenarios have been performed and provided in this section. These comparisons are somewhat limited in nature and will not reveal all the nuances that should be considered. They should, therefore, be considered a guide to when new capacity is required, when reserves should be supplemented, the risks associated with resource outages, and other general factors. The inclusion of large, new customers into the City’s system will result in different patterns in monthly peak requirements for the combined loads. Therefore, the comparisons in this section are performed on a monthly basis in order to better understand the system limitations. It should be noted that generating capabilities and fuel efficiencies of resources will change on a seasonal basis as inlet air temperatures change. Both rated output and fuel efficiency decrease with increased temperatures, and manufacturers typically provide data at various temperatures. For purposes of this analysis, output is based on 40 degree Fahrenheit inlet air temperatures. CITY-ONLY LOADS (FIGURES 5 - 7) No LOAD GROWTH (FIGURES 5A AND 5B) Figure 5a at the end of this section shows that, as expected, reserve margins are adequate at present load levels. However during the months of February and March, efforts should be made to have all resources available. If one of the larger units is off-line for maintenance during that time period and another unit tripped off unexpectedly, then capacity shortfalls could occur. Figure 5b is based on limiting resource loading to 85 percent of rated output, which is the City’s current practice. Reserve shortages indicated in this comparison should not be considered absolute since resources can be operated at the higher loadings in Figure 5a for short periods of time. However, the figure does indicate that even at present day load levels, one would expect to use Unit 7 or purchase energy from UniSea during at least the month of February. Whenever the difference between the monthly peak and the installed capacity is less than Unit 7°s capacity of 1,000 kilowatts, then either Unit 7 will have to be run or energy must be purchased from UniSea. Power Supply Study Adequacy of Resources Page IV -2 The permitted energy production shown at the bottom of the figures includes powerhouse production only and does not include potential production from Unit 7. Permitted production is well over energy requirements; but as was described in Section III, the production limits are resource specific. Therefore a resource may not be available in the latter part of the year if it is operated for extended periods earlier. If loads are high enough during the time the resource is not available, the City would have to rely on Unit 7 or purchases from UniSea. If daily and seasonal load patterns change from historical patterns, it will become increasingly difficult to anticipate the optimum dispatch order that will minimize Unit 7 generation or purchases. The detailed analysis summarized in Section VI showed that annual energy requirements of 30,000 — 35,000 megawatt-hours could cause situations where these shortfalls occur. 1 PERCENT LOAD GROWTH (FIGURES 6A AND 6B) The potential problems in the No Load Growth scenario are further accented in the scenario that assumes City loads increase at an average rate of 1 percent per year. Furthermore by the year 2005 or slightly thereafter, reserve margins become inadequate. Energy limitations become of increasing importance; and by 2020, energy requirements are quite close to permitted production. 2% LOAD GROWTH (Figures 7a and 7b) If power requirements increase at a rate of 2 percent per year, reserve margins are inadequate by 2002/2003, and demand cannot be met sometime after 2010. Energy requirements could be of concern around 2005 and exceed permitted production by 2012. CITY WITH APL LOADS (Figures 8a and 8b) Even with no additional load growth for the City’s present customers, the inclusion of APL’s loads causes not just inadequate reserve margins but capacity shortages as well. If the power requirements of the City’s existing customer base increased (such as that shown in Figures 6 and 8), these capacity shortfalls would further increase. As explained previously, APL’s existing generating capacity has not been included with City resources. COLD STORAGE (Figures 9a and 9b) The proposed cold storage facility increases the City’s load such that reserve margins are minimal even with no other load growth on the City’s system. Energy may be somewhat of a problem, too; and increased production from Unit 7 or purchases from UniSea may have to be relied on. CITY WITH SEA-LAND LOADS (Figures 10a and 10b) The inclusion of Sea-Land’s self-generated loads does not place as severe a strain on the system as APL’s load, but the City’s reserve margins are still inadequate in at least two Power Supply Study Adequacy of Resources Page IV - 3 months. As with the APL case, loads are based on no load growth for the City’s existing customer base. CITY/UNISEA (Figures | 1a and 1 1b) The resources included in this comparison include all of the City’s existing resources and four of UniSea’s six resources. Since three UniSea units would have to be off-line before the UniSea capacity is not available, the largest-unit contingency in Figure 11 should be based on the City’s largest unit. However, a largest unit contingency is not shown, because it is felt that one of the remaining UniSea units could be used on an emergency basis if a City resource was unavailable at peak periods. The figures show that installed capacity is adequate at existing load levels with or without the 85 percent limitation on the City resources. The system could incur up to approximately 2,000 kilowatts of additional load before capacity limitations would occur. Such an amount is still less than APL’s coincident load, and therefore they could not be brought into the customer base without new resources. OBSERVATIONS Several observations can be made regarding the comparison of peak requirements and installed capacity. These include the following. 1. The City has adequate capacity to meet the present level of loads of its existing customer base. However in order to avoid purchases the City must: e Operate resources at full capacity during the peak period in February. e Operate Unit 7 for certain periods if production on City resources is limited to 85 percent of rated capacity. 2. A 1 percent annual load growth will cause reserve margins to fall below acceptable levels by the year 2010. A 2 percent annual load growth will create reserve margin shortfalls by 2002 or so. 3. The City cannot provide full service to APL without the addition of at least 3,000 kilowatts of capacity. The actual amount required will depend on estimated load growth of the City’s existing customer base and the size of the largest unit in the revised system. 4. The inclusion of Sea-Land’s self-generated loads also causes reserve margins to fall below acceptable levels. Energy could be sold to Sea-Land on an as- available basis, but this could: e Create the need to operate City resources at greater than 85 percent of their rated output, and e Increase the need to purchase supplemental power from UniSea due to DEC energy production limits. 5. The inclusion of the proposed cold storage facility will cause reserve margins to be at minimal levels, and the system could not incur any additional load growth without resource additions. Power Supply Study Adequacy of Resources Page IV -4 6. UniSea’s own loads are approaching their permitted capacity restriction of four units operating at any one time, or 10,350 kilowatts. Therefore, the City’s agreement with UniSea for the purchase of supplemental energy on an as- available basis can probably not be converted to firm capacity. 7. Load growth on the City’s system can better be accommodated if the City’s resources and loads were combined with those of UniSea’s. However, APL’s loads cannot be met under such a system due to DEC operating restrictions. Power Supply Study Adequacy of Resources Page IV-5 Figure 5a City Only - No Load Growth (Full Loading of Units) Dec WEES SSR Nov Aug Sep Oct ZAI XS SSF"F.. odd Jul City Only - No Load Growth IZ SESS Jun May Mar Apr Fer sss AAAS All Resources Largest Unit Out Feb 7,000 6,000 5,000 SS iN ! Y 000 Y Y 000 | & Jan Figure 5b (85% Loading of Units) WER CDRYXY XY QV“ HSS SSE rn EZZET?i8 SSF". U EZR EZZARE&XSSS&X WW 0 WHS SSX¥EEE84 EZ x>S SSS FH Mar Apr SSS SSS Se Se ce ce ce 2 2 3 2 2 & wo wo vt a nN = SHEMOTPY Jul Aug Sep Nov Dec Oct Jun May Feb Jan 39,597_ MWh Permitted Energy Production: 30,167, MWh Energy Requirements: By REF. Page IV -6 Adequacy of Resources Power Supply Study Figure 6a City Only - 1% Load Growth (Full Loading of Units) § 2 FOR, fg = ZS IWIN S PA WW § 5 fl ; a EZZZB =e RQ Qa aaw 8 cman | ds CSS ALS WW Ff WO § FE , | ; 5 ZZIRSS WHS 2 | S23 WH. NNNS 2 WOES : | 2 i | os E i > B 33S Ss fs Fe ge F r > | SBI ge) BF g Seni #3 t Ts & ee Ti SE | oO r | ZEISS 3 SS EEEE8 a | luemama BEE WE 3 SS 2 | |ES8S83 L Resaaqq 8 ES SH ffi. —t Z2SSssq pisaaaai. (Oe | oo 6 oS w hl “ a = | 3 SEMOTDY | Page IV-7 Adequacy of Resources Power Supply Study Figure 7a City Only - 2% Load Growth (Full Loading of Units) Tt f _ | | | SN 2 | 2 Vi Welenaa & | s | | b | » | Soaps 3 | 71) me 5 | is 7] | fi ——?7CWWisiasans—s«S§ | USO V3 USO : “RSS z z | . OKO ; XIII = COLS Po £2 L | 18 So | = a STIG £2 7E gs |§ e2F = | /| z BAG SI EF ok fe 2x 4 | TIO oe Bs Pt oO 3 3 = = gece 8 & |gsggas P . | ESaSSY 5 a ig efeeeee2ee. 23232222228 ty rd ry Co Kn TFT MN (on r¥ co Hn tT NN & | 3 SHEMOTT} SHEMOTPY | Page lV -8 Adequacy of Resources Power Supply Study Figure 8a Existing City Load + APL (Full Loading of Units) Figure 8b Existing City Load + APL (85% Loading of Units) eee EA Rn AWN (\(W—EX SSS RSS". SS EZARSSSSSS UZARRS 10,000 9,000 + 7,000 ~ 8,000 - ZZ C.rEz. Ww SS EZ. RSS 222228 sneMorry & Zz XO & f z 3 2.3 Z2-NS 5 3 = 8 WR 5 ce ce Se Se ce ce s ce ce 2222223228 a o ~ wo wo zt on nN _ SHEMOTNY ae laa ec eee ree alee Dec Page lV -9 Nov 39,597 MWh Aug Sep Oct Jul Jun Permitted Energy Production: (Note: Does not include APL's permitted __generation) Adequacy of Resources Feb Mar Apr May 35,670 MWh Jan Energy Requirements: Power Supply Study Figure 9a Existing City Load + Cold Storage (Full Loading of Units) KZZEESSESSSS a 8,000 7,000 1 4,000 + SHRMOTPY 3,000 2,000 + 1,000 + A A | fA Aug Sep Oct Nov Jul Jun Mar Apr May Feb Jan Figure 9b Existing City Load + Cold Storage (85% Loading of Units) Jun May WE—’'WYEY SSS en ZZ SQ SB BF. KZZARSSE SS... 22 Aug Sep Oct EIS Swi —__”—7};K&XQq Cow Sy PB x TR Ww EZ ESSE. ZOO Z7’ISSSSSSS ZTABRSSSSS EKEIERSSESSSS | = 3 7 A Va ESS Largest Unit Out — Monthly Peak 7,000 6,000 5 5,000 + 4,000 SHEMOTDY 3,000 + 2,000 - 1,000 + '-IAAB’RRRSSESES Dec Jul Nov Feb Mar Apr Jan 39,597_ MWh Permitted Energy Production: 34,547, MWh Energy Requirements: Page IV - 10 Adequacy of Resources Power Supply Study Figure 10a Existing City Load + SeaLand (Full Loading of Units) 8,000 7,000 - 6,000 5,000 + SHEMOTPY 1,000 + Dec Aug Sep Oct Nov Jul Mar Apr May Jun Feb Jan Figure 10b Existing City Load + Sea-Land (85% Loading of Units) EX EVO. BARRE HESS SV EKA SEV 8,000 7,000 + a—EQXQ ww 77 sneMopry a Nov Oct Jul Aug Sep un Mar Apr May = J Feb Jan 39,597_MWh Production: Permitted Ener; 32,359 MWh Energy Requirements: Page IV - 11 Adequacy of Resources Power Supply Study | CLL LL LEZELELLLL LILI ZEEE VL TET 130,263 MWh LLL PULL | EEL TRL EEL Jul Aug Sep Oct Nov Dec CE PE LLL LE CZ Jul Aug Sep Oct Nov Dec EET ZZ EET Page IV - 12 Figure lla Existing City Load + UniSea (Full Loading of Units) LLL LLL ttt ULLLLLLLA 20,000 = = = = = Feb Mar Apr May Jun Jan Figure 11b Existing City Load + UniSea (85% Loading of City Units) ZEEE VL , 18,000 16,000 + Lz, 1 =) Ss 2 x = 12,000 + 4,000 2,000 + Feb Mar Apr May Jun Jan Permitted Energy Production: 59,376 MWh Energy Requirements: (Note: Includes UniSea's four-unit on-line restriction at full baseload operation.) Adequacy of Resources Power Supply Study V. POTENTIAL RESOURCES GENERAL The installed capacity/peak requirements comparisons in the previous section has shown that the only scenario that provides sufficient reserve margins is the no-load growth scenario with no additional customers. Even this scenario will require Unit 7 to be used or full loading of units at peak periods to reduce the need for purchased power. Scenarios that include load growth or an expansion in customer base result in insufficient reserve margins or the inability to meet load altogether. Therefore, it is realistic for the City to consider the addition of new resources that provide both capacity and energy benefits. Prior to installing new fossil-fueled resources, however, the City and others are now required to notify DEC and have the planned facilities reviewed. Conversations with DEC have indicated that if the resource is replacing a unit and net reductions in emissions can be expected, then emissions modeling does not have to be accomplished. If, on the other hand, net increases in emissions are expected, then the resource may not be allowed at the present generating location. In such an event, several options exist and include: e Locating the resource at a site where emissions would not add to the area of concern. e Locating the resource at another existing generation site (such as APL) if a net reduction in emissions can be demonstrated. ¢ Undertake extensive modeling efforts in an attempt to reduce emission restrictions. Such an undertaking may be fairly expensive, and the desired outcome is not guaranteed. One source of capacity, albeit a small amount, would be from UniSea. However, their peak demands are approaching their permitted generation, and UniSea would probably not be able to provide firm service. They may, however, represent a source of capacity on an emergency basis since only four of their six resources can be operated at onetime. This will be discussed in greater detail in the next section. A number of other generating resources are also available to the City. Several of these are fixed in size while others can be sized depending on expected loads and load patterns. These resources may provide capacity benefits, energy benefits, or both. It is entirely possible that a particular resource alternative may provide a different set of benefits under different customer base/load growth assumptions. The resource alternatives that have been considered in this analysis are described as follows. Several of these will require DEC review due to air emissions, and emissions data was obtained when possible. Power Supply Study Potential Resources Page V-1 PYRAMID CREEK HYDROELECTRIC PROJECT The State of Alaska’s Division of Energy (“DOE”) recently commissioned a review that, among other things, investigated several potential hydroelectric facilities in Unalaska. Five alternatives were evaluated in a preliminary manner, and four of these were further investigated. Of these, the fourth alternative was found to be the most economic. This project consists of tapping into the City’s existing water supply pipeline near the chlorination building and diverting water through a penstock to a powerhouse to be constructed at tidewater. The major assumptions regarding Pyramid Creek are provided in Table 8, and estimated daily energy productions are provided in Appendix C-1. Since the project diverts water away from the City water system, increases in domestic water use will decrease the amount of water available for energy production. The production estimates in the DOE report are based on present levels of domestic water use, and details are not provided regarding the extent production decreases with increased domestic water use. Additionally, the production estimates do not take into account any minimum instream flows which may reduce production. Such minimum flows, if required, would not be known until the project proceeds through the licensing process. Table 8 Pyramid Creek Hydroelectric Project (1998 Price Levels) Installed Capacity 600 kilowatts Annual Energy Production 2,570 MWh Capital Costs: Standard Construction $2,177,800 Force Account $1,557,900 Capital Replacement Costs ... $9,000 per year (Chpperestinn oi COSts teeseenareneesterecessnensrsstenereeseeenes $48,000 per year The analysis performed thus far on Pyramid Creek has not revealed any capacity benefits. Even though the water is diverted from the City reservoir where production levels could be regulated, the DEC report states that there are nine months of the year with periods of no energy production. Further analysis may reveal that there could be capacity benefits, but for purposes of this report, the project is assumed to provide energy benefits only. The State of Alaska recently granted $92,000 to the City for engineering and permitting activities. A separate grant request for construction is pending with the federal government. At this time, it is not known when a decision will be made regarding this grant request. WIND Wind turbines can provide energy at little or no variable cost of generation if a suitable site can be found. Wind conditions that are typically sought include the following. e Sustained wind ¢ Wind speeds less than the design shut-down speed Power Supply Study Potential Resources Page V-2 e Minimum directional shifts This type of resource, however, has a number of disadvantages including high installation costs, lack of capacity benefits, and a history or somewhat unreliable operations. Recent technological improvements have resulted in increased reliability and lowered capital costs, and there has been a renewed interest in this type of resource. Here in Alaska, Kotzebue Electric Association (*KEA”) constructed three 66-kilowatt turbines to supplement their diesel-fueled generation. The first of these units was placed in operation in May 1997 and the other two in July 1997. KEA experienced problems initially but has had reliable operation since November. The turbines at KEA are manufactured by Atlantic Orient Corporation, and_ their representative here in Alaska was contacted for construction and operating cost information. Preliminary estimates of capital costs were provided based on a proposed facility in St. Paul, Alaska. However, operating costs were not provided; and estimates were derived from data published in an Electric Power Research Institute (“EPRI”) Technical Assessment Guide. Cost information of a potential wind resource is summarized in Table 9 and provided in detail in Appendix C-2. Table 9 Wind Resources Installed Capacity (5 @ 66 kW)............. 330 Turbines $330,000 Transformers/Connections 20,000 CRBHE xscssses552. 5,000 Foundations 25,000 Other .. 50,000 $430,000 Operating COS oo nccerececencecsssecrectessczceres $25/kW-year 8.2 mph Shut-down Speed .. 55 mph Peak Survival Speed 133 mph Energy generation was estimated from hourly wind data recorded at Pyramid Valley next to the City’s water reservoir during 1995 and 1996. The power output/wind speed graph supplied by Atlantic Orient was then used to estimate resource generation for the recorded wind speeds. MAKUSHIN GEOTHERMAL PROJECT The Makushin Geothermal Project (“Makushin”) has been studied intermittently by the State of Alaska and others since at least the early 1980°s. The most recent detailed study conducted was in 1995 followed by a limited review in 1996. The 1996 review was a result of the developer proposing to construct the resource using a new process technology for converting geothermal heat into steam to drive the turbines. Since then, however, the rights to develop the resource have been transferred to Kiiguusi Suuluta Land Company (“KSLC”). Power Supply Study Potential Resources Page V -3 KSLC proposes to construct a 14-megawatt (net of station service) resource using process technology included in earlier proposals and not the new technology proposed in 1996. Based on communications with KSLC and data available from the 1995 study, the following assumptions are used in evaluating Makushin. Details of several of these assumptions are provided in Appendix C-3 to this report. Table 10 Makushin Geothermal Project (1998 Price Levels) Installed Capacity (Net of Station Service)... 14 megawatts Construction Costs $68,836,000 Drilling, Field Development, etc. .. $10,770,000 Annual Operating Costs: Payroll..............0008 $968,000 Subcontracts/Wellfield Maintenance .. $1,998,300 Administrative.. $142,000 Insurance... $158,000 Wellfield Insurance .. $32,000 Wellfield Maintenance Steamfield Royalty (Percent of Busbar Costs): $1,260,000 every 7 years Year | 2.5% Year 11 3.5% Year 21... 5.0% COAL DOE recently commissioned a study to estimate construction and operating costs of small coal-fired resources. The technology included in the DOE study is based on a fluidized-bed system and can, therefore, use several different types of fuel including diesel. Therefore, a cost comparison of diesel and coal was performed to determine the least-cost fuel. A Northern Economics report provided the cost of coal for both developed and undeveloped mines; and for purposes of this study, the price of coal was based on the Healy mine since that mine is operating.’ Based on the estimated coal price in the Northern Economics report, coal is less expensive than diesel on an energy equivalent basis. The Northern Economics report also provided a cost estimate for coal from another operating mine. That coal, mined from the Powder River Basin in Wyoming and Montana, was assumed to be transported by rail to Vancouver, British Columbia, and then barged to Unalaska. The estimated cost of delivered coal was slightly less than the price estimated for Healy ($3.73/million BTU versus $3.86/million BTU), but detailed analysis regarding mining costs was not performed by Northern Economics. Therefore, this site was not considered as a fuel source for this analysis. As size of the resource increases, construction and operating costs will also increase but at a lesser rate. Therefore, annual costs expressed in dollars/kilowatt-hour will be inversely related to unit size. (See Figure 12a at the end of this section.) However, this assumes ' Domestic Coal Handling Study, Northern Economics, October 1997. Power Supply Study Potential Resources Page V-4 baseload operation where the resource output can be fully utilized. For unit sizes greater than the City’s minimum system load, incremental amounts of energy can only be partially used. This, in turn, can cause per-unit costs to increase if the unusable energy cannot be sold to self generators. Figure 12b provides the relationship between cost and unit size for several load assumptions on the City system. As can be seen, approximately 3,000 kilowatts represents the installed capacity with the minimum per unit cost for the existing City loads. As the City’s customer base is increased, the optimum size increases and the per-unit costs decrease. This does not include any growth on the City’s existing system, however; and Table 11 provides the optimum size for two different load growth scenarios at the end of five and ten years of load growth. Table 11 Optimum Size of Coal Resource At End of Year Shown - City Loads Only (kilowatts) 1% Growth | 2% Growth 1998 3,000 2005 3,500 2010 3,500 + Two unit sizes were selected to be included in the study, 3,500 and 5,000 kilowatts. The lower capacity represents a reasonable size to construct if UniSea loads are not included with the City, and the larger capacity represents a size that might be constructed if their loads are included. Table 12 provides the input assumptions included in the analysis for these two installed capacities, and details of these assumptions are provided in Appendix C-4. Table 12 Coal Project (1998 Price Levels) 3,500 kW 5,000 kW. COMstrurction) COSts srevicceresetecscesesetececsscecteseesceseretecese $10,288,000 $13,206,000 Fuel: Price ($/ton) 60.17 60.17 Energy Content (BTU/Ib). 7,800 7,800 Full-load Heat Rate (BTU/k Wh) 19,015 18,570 Limestone (Pct of Coal Costs) 10% 10% Ash: Formation (Pct of Coal Weight). 10% 10% Removal Costs ($/ton).. 20.00 20.00 Incremental Operating Staff 0 0 Parts/Supplies.. $583,334 $833,334 Utilities $145,833 $208,333 Estimated emissions data is not available for a coal-fired resource and will be of concern. However, the economics of this resource will first be examined before pursuing such data. Power Supply Study Potential Resources Page V-5 COMBUSTION TURBINES Combustion turbines typically require more fuel per kilowatt of output than internal combustion resources, although they offer the advantage of lower maintenance costs and lower emissions. Therefore, several turbine manufacturers were contacted to obtain cost and operating information. Two manufacturers, Rolls Royce/Allison and Solar Turbines, provided data: and UNC Industrial Power provided general information. Details of the information provided is included in Appendix C-5 and summarized in Table 13. Since these units will be operated in a baseload manner, the overhaul costs were not converted to dollars/hour of run time. Instead, overhaul and miscellaneous variable operating costs are combined and expressed in cents/kilwatt-hour. The amounts shown in Table 13 are conservatively high and are reflective of a cost where the manufacturer assumes most of the maintenance responsibilities. If these responsibilities shifted to the City, the cost could be lowered. Table 13 Combustion Turbines (Dollars in thousands) 1204kW 3.636kW 4,269kW 6,467kW Purchase) Price sistensctsscstststssetsss $550 $1,650 $1,700 $3,200 Engineering/Shipping/Installation... 200 561 566 580 Total Capital Cost .. $750 $2,211 $2,266 $3,780 Full-load Fuel Consumption (BTO/KWh) eee eee 13,898 12,357 8,552 8.611 Variable Operating Costs — Without Fuel (cents/kKWh).........s:ssseceseee 0.5 0.5 0.5 0.5 Detailed emissions data was obtained for one of the turbines. As shown in Table 14 on the next page, it may be possible to replace an existing unit at the powerhouse with a turbine, increase total capacity, and show a net reduction in NO, and CO emissions. DEC has indicated that they are more concerned with these two than with particulates which do not show a reduction. Air flow differs between turbine and internal combustion resources; and therefore, net reduction in emissions by itself does not guarantee that a turbine can be located at the existing powerhouse. Power Supply Study Potential Resources Page V-6 Apnig (jddng sanog SIIANOSAY JONUAIOd L-Aa3bg 1,090,620 1,090,620 3,708,108 5,129,549 3,831,712 9,422,957 7,721,590 Existing Resources 1 2 3 4 5 6 8 9 39,596,777 Rolls Royce/Allison Solar Mercury 50 Solar Centaur 40 Energy and fuel limits and emission rates of existing resources provided in Air Quality Operating Permit No. 9625-AA003 7,601,621 84,638 84,638 284,462 373,509 273,234 673,874 504,235 535,238 2,813,828 Fuel assumptions per Permit No. 9425-AA003 7.1 Ibs/gal 19,700 BTU/Ib Emission rates for Rolls Royce/Allison unit provided by manufacturer. Rates for Solar units not available and prorated based on capacity. Table 14 Comparison of Emission Rates Particulates Tons per year for turbines are based on an assumed plant factor of 90 percent. Ibs/hr_ | Egy Limit INTERNAL COMBUSTION Similar to combustion turbines, internal combustion generating units offer the advantage of a relatively inexpensive source of capacity since installed costs are lower than many other resources on a dollars/kilowatt basis. With present fuel prices, this type of resource can also provide energy at a moderate price. However, the price of energy will fluctuate as fuel prices vary over time. All of the City’s existing generating units are Caterpillar internal combustion gen-sets; and at the request of the City, the local Caterpillar representative prepared a budget estimate for a new 3,300 kilowatt unit. This estimate is summarized in Table 15 and provided in detail in Appendix C-6. Table 15 Internal Combustion Installed Capacity 3,300 kilowatts Purchase Price $1,587,000 Fuel Consumption @ 93% Load 201.3 gallons/hour Preventive Maintenance, Components 4.7 mills/kWh Overhauls: Minor @ 15,091 hours $80,224 Major @ 30,183 hours $301,809 Major @ 60,366 hours $435,335 FUEL CELL Fuel cells have been in existence for a number of years but on a fairly limited scale. Similar to a battery, a fuel cell produces power through chemical reactions. A clean, hydrogen-rich fuel, such as natural gas or propane, reacts with oxygen in the atmosphere to produce electricity. Heat and water are the primary by-products which can be used for other purposes. Very small amounts of hydrocarbons and carbon monoxide are also emitted. Fuel cells have been used extensively in the space program but have until recently seen limited commercial applications. A number of utilities are now investigating the merits of fuel cells, but benefits are typically dependent on: e Use of the heat produced e Access to a source of clean fuel ¢ Requirements for quality power ONSI Corporation, a developer of fuel cells, was contacted to obtain cost and operating data. According to ONSI, there has been limited research in the past regarding the use of liquid fuels. However, that research is no longer being conducted, and commercially reliable fuels include natural gas, propane, methane, and industrial waste hydrogen. Power Supply Study Potential Resources Page V-8 Based on conversations with ONSI and others, the following cost and operating data was developed. Table 16 Fuel Cell Data (All data per 200-kilowatt unit) Installed Capacity 200 kilowatts Cost per Unit: Purchase Price (FOB Connecticut) $700,000 Shipping 7,750 Installation/Engineering 75,000 Total Installed Cost $782,750 Annual Operating Cost (excluding fuel) $25,000 Fuel Consumption at Rated Output:' Propane 18.6 gal/hour Natural Gas 1,700 cubic feet/hour 1 Based on 40 percent efficiency and heat contents of propane and natural gas of 91,850 BTU/gallon and 1,000 BTU/cubic foot. respectively. Two propane suppliers were contracted to obtain an estimate of the delivered cost of propane to Unalaska for the quantities required. Neither supplier provided the requested information, although one provided an estimate of approximately 60 cents/gallon at Kent, Washington. OTHER Other generating technologies exist that were not included in the analysis. Such resources include the following. 1. Combined Cycles — This type of resource may provide economic benefits if waste heat can be used in sufficient quantities. At this time, large heat recipients have not been identified, and this resource is not considered. 2. Batteries — This resource will provide economic benefits only under certain conditions. These conditions include, but are not limited to: e Large fluctuations in loads occurring with a great deal of frequency e Availability of low-cost energy (hydro, wind, etc.) that cannot be fully utilized in loads e Large spinning reserve requirements 3. Solar — Sunlight to electrical energy conversion efficiencies are felt to be too low for this type of resource to be economic in Unalaska. 4. Tidal — This type of resource is felt to be too experimental at this time. 5. Biomass/Refuse Fueled — The amount of fuel available is felt to be too limited for this to be economic. Power Supply Study Potential Resources Page V-9 Another resource that is not specifically considered is a combustion turbine that has been proposed by the Exergy Corporation. Their proposal, albeit preliminary in nature, is based on constructing a combustion turbine that uses a new process technology. Exergy was contacted for preliminary cost estimates to include in this analysis; but the developer wished to keep such information confidential. Therefore, their proposed facility cannot be evaluated and is not included in the analysis. Several of the resources considered have potential for waste heat recovery including coal, combustion turbines, fuel cells, and internal combustion units. Recovery of the waste heat will improve the economics of these resources only if the capital costs of implementing heat recovery facilities and the associated operating costs are less than the operating and maintenance costs of the heating system being replaced. The costs and benefits of waste heat recovery have not been considered in this analysis due to lack of detailed data regarding heat loads and other factors. However, the inclusion of such benefits should not change the relative ranking of these resources as compared to each other since the benefits are common to all. However, it could improve their ranking as compared to other resources that do not have waste heat potential such as hydro, wind, and Makushin. The Makushin Project has potential for waste heat recovery; but due to the distance from potential heat loads, waste heat recovery is believed to be uneconomic. COSTS Based on the costs described herein and detailed in Appendix C, the life-cycle costs of generation have been estimated and are shown in Figure 13. The energy and melded (fixed and variable costs combined) costs are based on the present value of the fuel and operating costs incurred over the first 25 years of operations using a 6 percent discount rate. While this data does not reflect the different expected lives of the resources, it can be used to screen resources for specific uses. For example if a resource is expected to be used only for reserves with little run time, then a resource with low installed costs and high energy costs might be best suited. If, on the other hand, a resource is expected to run for a significant amount of time, then a resource with low energy or melded costs should be sought. It should be noted that the energy and melded costs in Figure 13 are based on all potential energy production from a particular resource being usable. To the extent that a resource cannot be fully utilized, then per unit costs would increase. Energy costs for fuel cells are not provided since reasonable estimates of propane costs could not be obtained. However, Figure 13 shows that fuel cells have a relatively high installed cost per kilowatt, and these costs do not include installation of a large propane storage system. Since fuel would be subject to inflationary effects, it is felt that this resource would not be economic when compared to other resources. Thus, it is not considered further in this analysis. Power Supply Study Potential Resources Page V- 10 Figure 12a Initial Year Coal Costs - 1998 Price Levels (Baseload Operations of Stated Resource Size) 0.250 creme — 0.200 = 0.150 j S 0.100 3 0.050 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000 Installed Capacity (kW) Figure 12b Initial Year Coal Costs - 1998 Price Levels (Based on Stated Resource Size and Customer Base) 0.250 0.200 mi ta —— City Only Z 0.150 ? —*— City/APL a 3 0.100 — - — :City/APL/SeaLand 3 he City/APL/SeaLand/ 0.050 Cold Storage —— All 0.000 T T 1 T T 1 T — 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000 Installed Capacity (kW) Power Supply Study Potential Resources Page V- 11 Figure 13 Cost of Generation (Potential Resources) Installed Costs ($/kilowatt) $8,000 $6,000 | $5,000 $4,000 $3,000 $2,000 + $1,000 | $- om = & & & & 2 2 & SS SC SF 4 |] eo? eee] ey || ey |e s of Energy Costs PV @6%) 0.08 + 0.07 0.06 0.05 4 0.04 0.03 0.02 o.o1 + @ 0.00 4 S/kilowatt-hour © £ & & © & » ” & 7 eS & & v , - mH | i ey | 2 | | s Melded Costs (Based on All Energy Usable) 0.10 0.09 0.08 4 aoe 0.06 + = 005 4 gow 0.03 + 0.02 + 001 + 0.00 & & & & © & ? Fr ea We Ly er Le We || ee wv & & £ # Power Supply Study Potential Resources Page V- 12 VI. ANALYSIS GENERAL The City can pursue any one of a number of different options regarding both customer base and resources. As previously described, customer base options include the following. e City by itself with no customer base expansion e City with APL e City with Sea-Land e Provisions made for the proposed cold storage facility e Inclusion of UniSea loads and resources into City operations Any one or combination of the options can be pursued by the City. However central to these is whether or not the UniSea system is combined into the City. While UniSea has expressed an interest to do so, a number of issues must be considered by both parties; and it is not certain that a merger will eventually be accomplished. Accordingly, the analysis has been separated into two categories: ¢ The City and UniSea act independently of one another as they presently do. ¢ UniSea loads and resources are combined into City operations. Each customer base option will provide a different set of demand and energy sales that the City’s costs can be allocated to. Therefore, it was necessary to estimate the total system costs for each customer base/resource option investigated. Costs included in the analysis are as follows: 1. Fuel, maintenance, and purchased power costs that are estimated in the dispatch model; Amortized debt payments for each of the new resources being considered; Additional operating costs, if any, of the new resource; Costs of implementing reserve units, if required; and Other costs of the Electric Utility. Other costs of the Electric Utility were estimated by eliminating fuel, purchased power, supplies, and general contractor expenses from the 1998 Operating Budget. The remaining amount of approximately $2.5 million was thought to be a reasonable proxy of those costs not included in the first four items of the above list. Power Supply Study Analysis Page VI-1 Expansion of the customer base will increase the total system costs due to increases in fuel usage, maintenance costs, other variable operating costs, and other cost components. However, these cost increases will be spread over increased sales, and the City’s existing customers could still benefit. Therefore, the analysis is performed on a cents/kilowatt-hour basis rather than a total dollars basis. RESERVES During the course of normal operations, resources will be taken off-line unexpectedly to perform unscheduled maintenance. The length of unit downtime will depend on the severity of the problem and could range from hours to weeks or even months. Since these unscheduled outages may occur during peak periods, a utility typically has enough installed capacity such that loads at any time during the year can still be met if the largest unit is out. Scheduled maintenance is then performed during the off-peak months when loads can still be met if another unit trips off line unexpectedly. If peak loads do not vary significantly throughout the year, reserve capacity might be increased so that load can still be met if two resources are unavailable. Several resources that are being investigated in this analysis have generating capabilities significantly greater than existing resources. While these large resources can provide benefits through economies of scale, they also have the disadvantage of increasing reserve requirements under certain circumstances. The City has a number of options that it can pursue in obtaining this reserve capacity, but the inclusion of any new thermal resource in the area will require DEC approval. The following options might be considered the most likely if additional reserve capacity is required. 1. Purchase of a new diesel-fueled resource that has equal or less emissions than an existing unit. The new resource is then used as primary generation, and the old unit is not retired but held for reserves. The old unit may have to be relocated to another area such as Unit 7 now is. However since it would not be used except during outages, DEC may be willing to allow it to remain at the powerhouse. 2. Obtaining new or used units and siting them at APL or Sea-Land if they are brought on as a customer. Presumably, their operating permits could be modified to allow the City resources to be sited at these locations since APL or Sea-Land operations would be eliminated. 3. Purchasing reserve capacity from UniSea. UniSea’s existing operating permit allows for a maximum of four units to be operated at any one time. Since they have six primary resources located at their powerhouse, part or all of one unit might be available for reserve purposes for the City. This would, however, require an amendment to their operating permit. 4. Maintaining reserve capacity less than the largest unit. If load patterns are such that high loads occur only during a short duration of time, then the City may feel the additional cost of maintaining the full reserve capacity is too great. However, such a policy would place the system at greater risk for outages during peak periods. Furthermore, the self generators have indicated that they value system reliability by installing large amounts of reserves on their own; and inadequate City reserves could jeopardize the possibility of bringing one or more of these potential customers into the system. Power Supply Study Analysis Page VI-2 For purposes of this analysis, reserve capacity is assumed to be provided for pursuant to the first of the options listed above. When reserve margins fall below the minimum requirement, a 1,000 kilowatt diesel internal combustion generator is assumed to be purchased by the City and replace an existing resource. The existing resource is not retired but held for standby purposes. ASSUMPTIONS Costs for each option have been estimated over the 22-year study period from January 1999 through December 2020. In doing so, a number of assumptions regarding future events have been made. These assumptions are listed in Table 20 at the end of this section. ANALYSIS CiTy/UNISEA OPERATIONS SEPARATE The inclusion of a resource will affect system costs in a variety of ways, and resources cannot be evaluated simply by comparing the incremental debt service, fuel, and operating costs of the new resource with the cost of the displaced energy. The incremental energy and associated variable costs may be difficult to estimate if the full capability of the resource cannot be used throughout the year. Furthermore, the dispatch order of the existing resources will change as will their respective generating efficiencies; and this, in turn, will make it difficult to estimate the cost of the displaced energy. Reserve requirements and their corresponding costs may also vary for each scenario. Therefore, the dispatch model was run for numerous resource/customer base options, and the resulting costs and reserve requirements are summarized in Table 18. Details of the dispatch and financial runs are provided in Appendixes D and E, respectively. The costs shown in the table represent the present value of the costs incurred over the study period divided by the total energy sales for the same period. A discount rate of 6 percent has been used to reflect the assumed cost of capital. Several observations can be made of the results summarized in Table 18. These include the following. 1. Costs can be lowered by expanding the customer base. However as customer base is expanded, additional reserve units are required in certain resource scenarios. i The addition of Sea-Land as a customer significantly increases the system’s capacity requirements and, therefore, reserve requirements. 3. The best three resource scenarios for each customer base option all have in common the addition of a combustion turbine (either a 4,269 kilowatt or 6,467 kilowatt). 4. Wind turbines, when combined with a combustion turbine, is the most economic alternative of those evaluated. Power Supply Study Analysis Page V1- 3 Since the hydroelectric project has significantly more energy available than the wind resource, varying rates of fuel escalation will have a greater impact on the economics of the hydroelectric resource than the wind resource. Table 17 provides an estimate of what the real rate of fuel escalation must be in order for the combustion turbine/hydro resource alternative to be the most economic. Since capital grants may be available for the hydro resource, the amount of grants required for it to be the most economic is also provided. Table 17 Hydroelectric Sensitivity Requirements for Hydro to be Most Economic Alternative Customer Required Required Base Fuel Escalation Grant City Only Infl + 4.0% $1.1 million City/APL Infl + 3.9% $1.1 million City/Cold Storage Infl + 3.6% $1.1 million City/APL/Cold Storage Infl + 5.0% $1.3 million City/APL/Cold Storage/Sea-Land Infl + 3.3% $1.0 million Table 17 shows that if fuel escalated at a real rate of 3 — 5% annually, the combustion turbine/hydro alternative option would be the most economic as compared to the other resource options considered. If fuel escalation remained at the general inflation rate (i.e., no real escalation), $1.0 — 1.3 million of grants would be required for the combustion turbine/hydro alternative to be the most economic. Several considerations should be kept in mind when reviewing the above data. First, the most economic alternative evaluated, the wind/combustion turbine resource combination, is based on very preliminary construction and operating cost estimates of wind turbines. This type of resource does not have a history of successful operations in Alaska, and availability factors and operating costs are not based on detailed analysis of other similar resources. Second, a specific site for the wind turbines has not been identified, and the wind data used may not be commensurate with the final site. Changes in wind direction will also affect generation, and this has not been accounted for. Another consideration is that the hydroelectric resource evaluated herein does not include any capacity benefits. Since the intake to the turbine would be located downstream of the City’s water reservoir, regulation may be possible to provide capacity benefits and offset reserve requirements. Finally, the analysis of the hydro resource does not incorporate any reductions in energy production due to increased domestic water use. The relationship between energy production and domestic water use was not available for this analysis. Ciry/UNISEA OPERATIONS MERGED Although UniSea has expressed a desire for the City to take over its power production operations, the resulting cost of power will be an important criteria in both Power Supply Study Analysis Page VI-4 parties” evaluation of the benefits of a merged system. The following steps were used in evaluating a merged City/UniSea system. I: UniSea’s cost of power under separate operations was first estimated. Their cost of power was assumed to include: e Fuel e Operators e Maintenance Costs Benefits from waste heat used to heat UniSea facilities were not accounted for due to insufficient data. Costs of the merged system were then estimated for various customer bases and new resources. Cost components are the same as those described on page VI-2 except labor. This component was instead increased by the amount estimated for UniSea’s operators in |. above. This may be somewhat high since the merger could lead to economies of scale with production personnel. The resulting costs of each case were then allocated to UniSea and the City. UniSea’s allocation was assumed to be equal to that estimated in 1. above, and the remaining amount was allocated to the other City customers. Based on the results of the analyses without UniSea, the number of resources investigated with UniSea could be limited and still provide sufficient information. The results in Table 19 show that benefits can be obtained by combining the two systems. Furthermore, the inclusion of a combustion turbine into the system would also provide economic benefits. One of the most significant improvements of the combined City/UniSea system is the lack of need for additional reserve units. None of the cases run required additional reserve units. Power Supply Study Analysis Page VI-5 Apnig 4jddng samog sisApouy 9 - 1A 230d Table 18 Present Value of System Costs 1999 - 2020 @ 6% Discount Rate (Without UniSea) Resource Addition City City/APL City/Cold Storage City/APL/Cold Storage Firm Reserve Reserve Reserve Capacity Units Cost Units Cost Units Cost Units Unit ‘d (cents/kWh) Req'd (cents/kWh) Req'd (cents/kWh) Req'd t None ' i F City/APL/SeaLand/ Cold Storage So [ofolololm|o|m aeoeeefenee (1) Not run. Considered uneconomic or has significant amounts of unserved energy without the use of reserve units. Bold Face denotes cases with slight amounts of unserved energy without the use of reserve units. Apnig (jddng 4amod sisdjoup L71A 280d Table 19 Present Value of System Costs 1999 - 2020 @ 6% Discount Rate (With UniSea) Results i y 5 City/APL/SeaLand/ City City/APL City/Cold Stora; City/APL/Cold Storage | wy | con | | cavarcatsseme | Cold Storage Reserve Units Cost Req'd (cents/kWh) Reserve Req'd co |}Sslojol/ololco\o Sc a (1) Not run. Considered uneconomic or has significant amounts of unserved energy without the use of reserve units. Bold Face denotes cases with slight amounts of unserved energy without the use of reserve units. GENERAL LOADS N 10. Table 20 Assumptions General inflation is assumed to average 2.5 percent per year. All costs are stated in 1998 dollars and are escalated at the assumed general inflation rate unless otherwise noted. Fuel is assumed to be $0.7843 per gallon. Purchased power from UniSea is assumed to be $0.1175/kilowatt-hour and escalated at one half of the general inflation rate. New resources are assumed to be debt financed with the cost of capital equal to 6.0 percent. Amortization periods are as follows. © Coal — 30 years e Hydro — 30 years e Wind-—15 years e Combustion Turbines — 20 years e Internal combustion units — 20 years e Geothermal — 30 years Non-production costs of the City are assumed to escalate at the rate of general inflation. UniSea production labor is assumed to be $700,000 per year. Annual sales and load growth are assumed to be as follows unless stated otherwise: Sales at 1997 Levels (MWh) City APL Sea-Land Cold Storage The loads of the proposed cold storage facility, when included in the analysis, are added to the system in 2000. APL and Sea-Land loads, when included in the analysis, are assumed to be added in the year that a new resource is added to the City system. Overall generating requirements of the City’s existing system in 1997, when accounting for street lights, station use, and losses, are assumed to be 30,167 megawatt-hours. Power Supply Study Analysis Page VI-8 RESOURCES GENERAL 125 13: 14. All dispatch analyses assume each resource will be available as required except for specific maintenance schedules described herein. Implicit in this assumption is that unscheduled outages will not occur when a particular resource is required. If such outages are limited to one resource only, then load can still be met with reserve capacity. The emission tax of $5.07 per ton is not estimated due to lack of data. Land acquisition costs are not specifically included in any resource cost estimates. HYDROELECTRIC 15. Capital and operating costs are as specified in Appendix C-1. 16. Hydroelectric resources included in the analysis are assumed to be constructed over a 18-month period with commercial operations commencing in January 2001. 17. Interest during construction is capitalized, and financing costs are assumed to be 2 percent of the total debt requirements. 18. Energy production from the proposed hydroelectric facility is based on the average daily production provided by DOE and spread evenly throughout the day. Potential decreases in production due to increased domestic water use have not been included in the analysis. 19. Maintenance of the proposed hydro facility is assumed to be accomplished at times when there is insufficient water for energy production. WIND 20. Capital and operating costs are as specified in Appendix C-2. 21. Five 66-kilowatt turbines are assumed to be constructed and operational by January 2001. 22. Interest during construction is not capitalized. 23. Energy production is estimated from hourly wind velocity recordings at a site in Pyramid Valley. 24. No additional costs have been included in the analysis for amounts that may be incurred for diesel units to follow load net of wind generation. GEOTHERMAL 25. Capital and operating costs are as specified in Appendix C-3. 26. The geothermal resource, when included in the analysis, is assumed to be constructed over a two-year period with commercial operations commencing in January 2002. 27. Interest during construction is capitalized, and financing costs are assumed to be 2 percent of the total debt requirements. 28. Maintenance of the proposed geothermal facility is assumed to be accomplished such that usable energy is not adversely affected. Power Supply Study Analysis Page VI-9 29. In lieu of following load with diesel-fired generation for those scenarios with the geothermal facility, the use of a load bank has been assumed. No additional costs have been included. 30. The cases with the geothermal project include the costs described earlier in this report as well as a credit of $700,000. This credit reflects the operating staff labor included in the geothermal operating costs which, in turn, would allow the existing City operating staff to be reduced. COAL 31. Capital and operating costs are as specified in Appendix C-4. 32. Coal-fired resources included in the analysis are assumed to be constructed over a two-year period with commercial operations commencing in January 2002. 33. Interest during construction is capitalized, and financing costs are assumed to be 2 percent of the total debt requirements. 34. Annual maintenance of the proposed coal facility is assumed to be accomplished over a one-month period beginning July 1. 35. The price of coal is assumed to escalate at 75 percent of general inflation. COMBUSTION TURBINES 36. Capital and operating costs are as specified in Appendix C-S. 37. Combustion turbine facilities, when included in the analysis, are assumed to be operational by January 2000. 38. No interest is capitalized for combustion turbine facilities. 39. Maintenance costs, including provisions for overhauls, are assumed to be 5 mills/kilowatt-hour. 40. Production from combustion turbines is limited to 95 percent of their continuous rating to account for miscellaneous outages. 41. Combustion turbines are assumed to be sited at the existing City powerhouse. 42. Scenarios that include combustion turbines assume that at least one existing City resource is taken out of active service and placed into stand-by service. INTERNAL COMBUSTION - EXISTING 43. Existing City resources are assumed to be not retired at the end of 200,000 operating hours but rather overhauled at a cost of $200,000 per unit. 44. Provisions for miscellaneous maintenance, exclusive of overhauls, are assumed to total 1 mill/kilowatt-hour. INTERNAL COMBUSTION - NEW 45. Capital and operating costs are as specified in Appendix C-6. 46. A new internal combustion facility, when included in the analysis, is assumed to be operational by January 2000. 47. No interest is capitalized for internal combustion facilities. Power Supply Study Analysis Page VI- 10 48. Minor overhauls are assumed to be performed every 15,091 operating hours at a cost of $80,225. Major overhauls are assumed to be performed every 30,183 hours at a cost of $301,809. A second major overhaul is assumed to be accomplished at 60,366 operating hours at a cost of $435,336. All of these intervals and cost estimates were provided by the local Caterpillar representative. 49. Provisions for preventive maintenance, oil, and components are assumed to be 6.0 mills/kilowatt-hour. RESERVES 50. All resource/load scenarios must maintain a capacity reserve margin equal to or IP greater than the largest unit. When reserve margins are below this amount, a 1,000- kilowatt diesel internal combustion generator is assumed to be purchased and installed at a cost of $500,000. The new unit is assumed to replace an existing unit with the existing unit then used as a standby resource. Purchase of the 1,000-kilowatt generator is assumed to be cash financed with no debt amortization. Power Supply Study Analysis Page VI- 11 Based on VII. OBSERVATIONS AND CONCLUSIONS the analysis conducted and summarized herein, certain observations and conclusions can be made regarding the City’s present power supply and which resource/customer base options may provide economic benefits. These include the following. Ie 10. The City’s resource base is adequate to provide for existing loads only with no significant load growth. Without new resoruces and a | percent load growth, reserve capacity will be insufficient by the year 2006 if new resources are not added to the system. Furthermore, small amounts of unserved energy would occur by approximately 2010, even with the use of Unit 7 and purchases from UniSea. Any load growth on the system will increase the City’s dependency on Unit 7 production and purchases. In order to provide service to APL, Sea-Land, or the proposed cold storage facility, it will be necessary for the City to add to its resource base. In many of the cases evaluated, the incremental cost (in dollars/kilowatt-hour) of providing service to an expanded customer base is less than the average system cost. Therefore, existing customers could benefit if new, large customers are brought into the system and pay the regular tariffs. If provisions are not made to include the proposed cold storage facility in the system, that facility, if built, will have to rely on self generation. In that event, it will be more difficult to bring them into the City system at some future time. Expansion of the customer base may require additional units to be installed for reserve purposes so that load can still be met if the largest resource if off-line during peak periods. This is especially true with APL and Sea-Land due to their relatively high demands. The Sea-Land load is expected to have a relatively low load factor such that energy requirements are low with respect to demand. Therefore if Sea-Land is brought on as a customer, demand charges should be thoroughly reviewed to ensure that the rates will recover revenues commensurate with the incremental cost of providing service. Based on the assumptions described herein, benefits could be gained by combining the UniSea and City systems. In all the customer base scenarios evaluated, the most economic resource option included a 4,269-kilowatt combustion turbine. For the Without UniSea scenarios, the combustion turbine combined with a wind turbine was the most economic. Power Supply Study Observations and Conclusions Page VII-1 For the With UniSea scenario, the combustion turbine by itself was the most economic. 11. Refurbished combustion turbines are sometimes available that could increase the expected benefits. 12. The inclusion of wind turbines in the City’s resource mix carries an amount of risk since this type of resource does not have a long operational history in the area. Consequently, the level of uncertainty associated with both construction and operating costs is probably higher than other potential resources. 13. Construction grants may be available for several resources including coal, wind, and hydro; and these grants would improve the economics of each of these. Power Supply Study Observations and Conclusions Page VII - 2 Vill. ACTION PLAN The analysis summarized in the previous sections of this report has indicated that: Le New resources will be required to provide for the anticipated load growth of the City system. System costs (in dollars/kilowatt-hour) can be reduced by including APL and Sea-Land into the customer base. Acquisition of the UniSea system by the City can provide benefits to both parties under certain conditions. In all of the customer base scenarios, the most economic resource option evaluated includes a 4,269-kilowatt diesel-fueled turbine. Inclusion of large customers into the City system will create the need for additional reserve units under certain conditions. Inclusion of a wind turbine with the diesel turbine may provide additional benefits. However, the costs and estimated generation included in the analysis are somewhat speculative in nature. The inclusion of the Pyramid Creek Hydroelectric Project can also provide additional benefits when combined with the diesel turbine. However, these additional benefits are dependent on the availability of capital grants or fuel escalation greater than general inflation. Based on these and other observations and conclusions detailed in the previous section, an action plan can be developed that will allow the City to take advantage of certain strategies that can reduce cost increases while ensuring that future load growth can be accommodated. Many of the steps within this action plan are interdependent, and re-evaluations must be made as new data is developed and intermediate steps are accomplished. LOADS APL/SEA-LAND 1. Meet with representatives of APL and Sea-Land to: e review their interest in becoming City customers, e what their power requirements would be, and e if their existing generators can be used by the City for primary or reserve power. Power Supply Study Action Plan Page VIII - 1 UNISEA RESOURCES Review existing rate structures to ensure that the cost of providing power will be recovered through rates. Meet with DEC to discuss the options regarding the transfer of all or part of the permitted production of APL or Sea-Land to the City. Incorporate APL or Sea-Land as a City customer at the time new capacity is added to the City system. Meet with representatives of UniSea to determine the conditions which they would become a City customer. Compare those conditions to the assumptions used within the analysis to determine whether such an acquisition by the City would be advantageous. Meet with DEC to discuss transfer of air quality permit to the City and any modifications desired by the City. Continue with acquisition of UniSea operations if warranted. PYRAMID HYDROELECTRIC ie 2. WIND Perform preliminary design in support of licensing activities. If preliminary design does not result in large increases in the expected construction cost, continue with licensing activities. Continue to actively seek federal and state grants for construction costs. If sufficient grants can be obtained such that the net capital costs to the City is no greater than approximately $1.5 million, construct the project. Continue wind monitoring efforts at potential wind resource sites. If the Pyramid Hydroelectric Project is not constructed, then secure better construction and operating cost information regarding wind turbines. Re-evaluate the economics of the turbines, and if warranted, implement the resource. COMBUSTION TURBINE I. Meet with DEC to review the City’s options regarding permitting requirements for a combustion turbine and other thermal resources. Amend the City’s present operating permit to allow for the use of a combustion turbine or other thermal resources and to allow for energy production commensurate with the expected requirements. Power Supply Study Action Plan Page VIII - 2 3. Select sites for the combustion turbine or other resources and reserve units and determine if the costs are significantly higher than that assumed in the analysis. 4. Identify and select funding sources for the combustion turbine or other resources. 5. Implement the necessary steps to purchase, install, and operate a combustion turbine or other resources with an installed capacity of approximately 4,300 kilowatts. Although the combustion turbine was the most economic, a Request for Proposal does not necessarily have to be technology-specific. Instead, it can request costs for a stated amount of capacity and other pertinent specifications. Cost proposals can be for construction and installation only or also include all permitting costs, operating costs, and others. RESERVES OTHER Meet with DEC to explore options available for siting reserve units that would be used on an emergency-basis only. If APL or Sea-Land are to become a City customer, discuss ability to transfer their existing generating resources to the City. Procure the least-cost reserve units on an as-required basis commensurate with loads and resource mix. If a combustion turbine (or other fossil-fueled resources) cannot be sited at the power house or at UniSea while still retaining most of the existing resources, the City has several options. These include: Siting the resource elsewhere and recovering the additional costs through rates or other funding sources. Acquiring more expensive resources (i.e., fuel cells, geothermal, etc.). Not implementing the resource and restricting load growth on the system. Not implementing the resource and acquiring the UniSea operations. This option would allow some load growth on the system, but APL or Sea-Land could not be brought on as a City customer. Power Supply Study Action Plan Page VIII - 3 APPENDIX A Minimum/Maximum Hourly Loads Appendix A-1: City Appendix A-2: UniSea Appendix A-3: American President Lines kilowatts 6,000 5,000 4,000 3,000 2,000 1,000 Appendix A - 1 Daily Minimum/Maximum Loads (City Only) f ul UAV | iN ay rh = Mi VV\p UV nA a May Jun Jul Aug - Nov mM Vy yh AVA) lh . Wo iN Ml WA Jan 1 HA a | enh iW ee = WW) eb Mar Age = a 7 Appendix A - 3 Daily Minimum/Maximum Loads (APL) a Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov APPENDIX B Existing Resource Data Table B-1 Resource 1 2 3 4 3 6 7 8 9 Owner City City City City City City City City City Location Pwr House Pwr House Pwr House Pwr House Pwr House Pwr House Portable Pwr House Pwr House Make/Model Cat D353E Cat D353E Cat D398 Cat 3512 Cat 3512 Cat 3516 Cat 3512 Cat 3516 Cat 3512B Type Ic Ic Ic Ic Ic Ic Ic Ic Ic RPM 1,200 1,200 1,200 1,200 1,200 1,800 1,800 1,200 1,800 Capacity (kW): Continuous 250 250 500 675 500 1,200 800 1,180 1,230 Prime 300 300 600 830 620 1,420 1,000 1,130 Emergency 330 330 660 900 650 1,600 1,250 1,200 1,300 Fuel Data: Type No. 2 No. 2 No. 2 No. 2 No. 2 No. 2 No. 2 No. 2 No. 2 Maintenance: Minor Overhauls: Hours 10,000 10,000 10,000 10,000 10,000 7,500 10,000 7,500 Cost $12,000 $12,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 In-Frame Inspections: Hours 20,000 20,000 20,000 20,000 20,000 15,000 20,000 15,000 Cost $15,000 $15,000 $35,000 $35,000 $35,000 $35,000 $35,000 $35,000 Major Overhauls: Hours 40,000 40,000 40,000 40,000 40,000 30,000 40,000 30,000 Cost $17,000 $17,000 $42,000 $42,000 $42,000 $42,000 $42,000 $42,000 Table B-2 30.00 25.00 20.00 15.00 10.00 5.00 Cat DISSE Cat 3512-830kW 0 200 400 = 600, 8001000 Units 1,2 Unit 3 Unit 4 ‘Cat 3512-620 kW Cat 3516-1420 kW Cat 3512-1000 kW 120.00, p-———------ 80.00, 100.00 } 80.00 _- 60.00 40.00 40.00 20.00 irae ° 500 1000 1500 0 200 400 600 800 1000 1200 Unit 5 Unit 6 Unit 7 Cat 3516-1130 kW Cat 35128 100.00 0 200 400 600 800 1000 1200 Unit 8 Jan-97 Feb-97 Mar-97 May-97 Jun-97 Jul-97 Aug-97 Sep-97 Oct-97 Nov-97 Dec-97 Total Jan-97 Feb-97 Mar-97 Apr-97 May-97 Jun-97 Jul-97 Sep-97 Oct-97 Nov-97 Dec-97 Total Jan-97 Feb-97 Apr-97 May-97 Jun-97 Jul-97 Aug-97 Sep-97 Oct-97 Nov-97 Dec-97 Total Table B-3 UniSea Unit Generation CAWh) . City Gen 1 Gen 2 Gen3 Gen 4 Gen 5 Gen 6 Subtotal __ Feeder Net Cat 1 Cat 2 Total 1,094 210 = 478 32 618 2,431 19 2,412 - - 2,412 962 421 899 787 2 391 3,482 63 3,419 - - 3,419 214 743 142 870 5 314 2,288 1 2,287 230 143 2,660 1,013 47 873 517 - 15 2,465 : 2,465 188 47 2,700 353 355 553 a1 81 27 1,670 - 1,670 224 173 2,067 - 456 44 299 329 220 1,348 - 1,348 196 311 1,855 7 846 - 46 558 19 1,476 64 1,412 178 262 1,852 - 324 - : 1,102 - 1,426 nt 1,415 225 205 1,845 442 592 594 439 683 603 3,353 18 3,335 203 193 3,731 654 553 609 205 $32 217 2,770 4 2,766 165 107 3,038 - 108 1,133 7 86 80 1,414 5 1,409 316 13 1,838 - : 262 : 1,166 42 1,470 82 1,388 275 129 1,792 4,739 4,655 5,109 3,739 4,596 2,756 25,593 267 25,326 2,200 1,683 29,209 Fuel Usage (Gallons) Gent Gen2 Gen3 Gen 4 Gen 5 Gen6 Total 66,319 16,087 23 33,930 3,025 42,304 161,687 12,214 31,584 68,137 $5,574 1,439 26,351 195,299 13,461 55,651 10,851 61,251 520 20,694 162,428 63,898 3,681 67,693 36,534 12 649 172,467 22,650 26,579 43,411 6,344 6,045 16,322 121,351 291 27,387 3,139 21,519 25,293 15,036 92,635 320 62,399 - 3,085 42,261 1,284 109,349 - 24,554 151 29° (84,044 96 108,874 25,986 44,061. «46,883 31,241 52,716 40,899 241,786 31,971 39,620 44,480 «14,844 = 40,007 «15,163 186,085 485 7,137 87,521 178 6,506 5,496 107,323 160 = __17,838 152 __ 86,028 2,993 _ 107,171 237,755 338,710 390,127 264,681 347,896 187,287 1,766,455 Geni Gen 2 Gen 3 Gen 4 Gen 5 Gen6 Total 16.5 13.1 - 14.1 10.4 146 15.0 BS 13.3 13.2 14.2 15.3 148 178 15.9 13.4 13.1 14.2 9.6 15.2 14.1 15.9 128 12.9 14.2 - Ba 143 15.6 13.4 12.7 143 13.4 14.5 13.8 - 16.7 14.0 13.9 13.0 14.6 146 21.9 13.6 - 149 13.2 148 13.5 : 13.2 - - 13.1 : 13.1 17.0 13.4 12.7 14.1 13.0 14.7 13.9 20.5 14.0 13.7 13.8 13.3 143 149 : 15.1 12.9 39.3 13.2 14.6 13.2 : - 14.7 : 13.6 14.0 13.7 19.9 13.7 13.1 141 13.2 14.7 14.5 APPENDIX C-1 Pyramid Hydroelectric Project HYDRO 600 kilowatt - Energy Only ‘Construction Costs $ 2,177,800 Interconnect Costs s 250,000 Assumptions; Hydro Beg Funds Capitalized Interest Avail Nominal Interest Earnings 404,633 | $ 2,744,000 | $ 414,749 $ 29,116 404,633 2,358,366 414,749 23,245 404,633 1,882,863 425,118 18,222 404,633 1,475,966 425,118 12,086 404,633 978,934 425,118 6,923 404,633 560,739 425,118 645 $ 2,427,800 $2,529,970 252,000 | $ 90,236 Construction Costs $ 2,529,970 Interest During Construction 161,764 Financing Costs 56,000 Rounding 52,266 Total Debt Issue $ 2,800,000 Annual Debt Service $ 203,417 Capacity and Energy Costs in 1998 $ Annual Energy 2,570 MWH Installed Capacity Cost 4,333.46 /kW (no firm capacity) Energy Costs - /kWh Melded 0.0239 /kWh O&M (Non Labor) 48,000 /year Capital Replacements 9,000 /year End Funds $2,358,366 1,882,863 1,475,966 978,934 560,739 52,266 7/20/98 wn COeNawnes =s 13 14 15 16 17 18 wVYwWNNNNNN —-SoVSO PAN AUNS Apr 9,696 12,936 12,921 13,918 10,193 10,799 13,563 12,627 9,620 8,791 10,383 10,596 Daily Energy (kWh) May 6,253 8,904 9,612 10,183 9,425 9,486 11,449 13,694 14,186 12,860 12,830 12,858 12,854 12,861 12,841 12,878 12,866 12,854 12,850 12,840 12,825 12,832 12,828 156,400 100,079 168,571 157,442 273,069 Jun 12,833 12,829 12,946 12,927 12,840 13,045 12,853 12,914 12,899 12,872 12,884 12,872 12,893 12,898 12,888 12,834 12,819 12,843 12,819 12,793 12,813 12,787 12,796 12,780 12,799 12,763 12,774 12,763 12,761 12,765 385,302 Jul 12,803 12,805 12,863 12,884 12,889 12,858 12,851 12,856 12,829 12,823 12,824 13,545 14,452 14,312 13,635 12,824 12,832 13,736 12,876 14,023 13,604 14,264 13,827 12,981 13,349 13,086 12,563 14,323 8,262 12,102 13,632 405,513 Aug Sep 12,895 14,120 13,230 6,074 9,532 12,863 12,849 12,925 12,903 8,341 12,090 9,718 7,962 145,502 13,004 54,856 Oct 12,963 10,158 6,803 8,452 10,581 9,941 10,372 13,195 13,905 11,280 8,881 9,388 7,729 6,532 6,787 5,904 6,124 7,572 6,811 14,258 11,046 7,405 6,547 10,721 13,922 12,845 13,873 10,136 274,131 Nov 13,296 12,563 10,369 9,320 7,904 6,623 9,601 7,691 12,933 12,975 12,516 12,840 14,084 14,162 14,102 14,279 14,029 13,259 13,507 14,413 12,849 11,492 9,447 9,589 11,817 12,995 9,766 12,984 13,777 13,884 359,066 Annual 94,936 85,203 83,574 75,552 76,858 83,733 88,244 95,377 90,307 92,870 92,712 80,630 70,673 57,390 83,199 93,785 77,250 73,482 65,222 67,317 86,091 84,951 98,326 83,056 91,787 83,853 96,392 99,891 78,027 89,056 50,289 2,570,033 APPENDIX C-2 Wind Project WIND 5 @ 66 kilowatt - Energy Only Assumptions; Wind Installed Capacity (kW) 330 Turbine $ 330,000 Misc 100,000 Other : Total 430,000 Annual Debt Service 37,489 Capacity and Energy Costs in 1998 $ Annual Energy 500 MWH Installed Capacity Cost $ 1,303.03 /kW (no firm capacity) Energy Costs $ - /kWh Melded $ 0.0915 /kWh O&M (Non Labor) $ 25 /kW 7/20/98 ‘Aepo} SOUIGIN} PUIM SMOJJOWO} Hulonpold NI ‘SWALSAS GNIM NZIHO JILNVILY Atlantic Orient Wind Systems, Inc. Statement of Purpose During a world conference, The United Nations defined sustainable development as “development that meets the needs of the present without compromising the ability of future generations to meet their own needs.” Oe oem nem nmol) maoea mes ieee ROM HU AMT ce ueLer Um cso a slid rice ce eame mie ene Cu aS In recognition of our customers needs and the * earths environment, Atlantic Orient Wind Systems, Inc. is committing its talent and energy to producing state-of- the-art wind turbine generators. Our turbines are reli- Be Mel) Mantmoi etme mayeonucuel batch Baceten PRODUCTS FOR TOMORROW Atlantic Orient Corporation is currently working on other advanced turbine programs, with development horizons in the mid ‘90s. These include a low cost / high reliability 12 kW generator as well as a 350 kW utility turbine. The goal for the 350 kW turbine is to produce wind generated electricity at a cost of $.03-.04 / kWh in a relatively low average wind regime. These products will compete effectively on the world wide electrical generation market Other work includes the design of a variable speed / direct drive generator with our European and University partners. The results of this program will find applications in our future turbines. We are also design- ing a tilt-up tower for use in remote or isolated regions where erection cranes are unavailable. We continue to refine our wind / diesel and village electrification expertise. All of our turbine designs and related components are continuously analyzed for potential design improvements affecting turbine reliability and cost. Atlantic Orient Corporation Atlantic Orient Canada Farrell Farm Rd., Rt. SN One Moore Road Post Office Box 1 Dartmouth, Nova Scotia Norwich, VT 05055 USA B3B t ENGINEERING EXCELLENCE Since 1986 the Atlantic Orient Corporation (parent company to Atlantic Orient Wind Systems, Inc.) has designed and built state-of-the-art wind turbine generators. The concept for the AOC 15/50 was developed after exhaustive studies relating to maintenance and downtime. These factors were critically ana- lyzed and design innovation for the AOC 15/50 were ranked according to their contribution to improved availability and overall reduction in cost of energy. The ultimate goal of this design effort was to incorporate past experience and advanced technology to achieve simplicity in a machine offering durability, reliability, and low maintenance throughout its expected operating life. Our engineering team is composed of individuals with diverse talents yet one goal: to design the highest value wind turbine generator. Our engineering capabilities are widely recog- Prasat sy Mil ae y f/f | / y // a ATLANTIC ORIENT WIND SYSTEMS, INC nized and respected in the wind energy industry. We utilized many design codes, peer reviews, international standards, com- ponent qualification testing, and field testing in our design process. AOC has extensive utility systems experience and can efficiently integrate wind energy into your system. Features for Arctic Environments Include: Turbine metallurgy selected for arctic conditions Pitch adjustments for higher air density Modified tower to accommodate icing loads Optional gearbox and/or contro! system heaters. Tip Brake Design The pneumatically damped tip brak« fail-safe by design and are used in tandem wi dynamic brake to assure smooth and rapid shu under normal and abnormal wind conditions. 7 brake plates are latched electromagneticall require a 12 volt power supply. The tip brakes c centrifugally when the magnets are de-ener and retract and latch automatically. The challenge our engineers facec providing a 12 volt power supply to the rotor tips rings are a proven method for transmitting ; across rotating parts, but require regular m nance. To avoid this, we designed a split-core transformer which effectively transmits elec across an air gap between the stationary and ro sides of the transtormer. This innovation elim _ Mechanical contacts and the need for replace worn parts * Lighter oil Single Piece Cast Hub Gearbox Split-Core Rotary Transtormer \ es Single Piece yes Tower Top —— — Optional Oil Filtration System The gearbox operates ina bath of lifetime synthetic oil. To extend the gearbox life, the oil is circulated through an easily replaced canister filter. TARGET MARKETS The AOC 15/50 design was predicated upon the assumption that regular maintenance or supervision is not practical in all locations. Thus, robust simplicity and fail safe reliability were built in. We expect that the performance delivered by this machine will make it an attractive investment for farmers, municipal facilities, and retail power displacement for commercial and industrial concerns. Utility companies will also find use for the AOC 15/50 to handle local load growth, voltage and VAR support, local grid support through distributed generation and avoided T & D costs, as well as gaining credit for environ- mental impact reductions. The AOC 15/50 has been engineered for use by utilities and IPP's in high penetration wind-diesel hybrid systems. Target markets exist as isolated grids in remote or roadless regions. Examples include arctic villages and islands desiring to offset high fuel rates, and remote locations in developing countries with no electrical infrastructure. In addition, countries with “dirty” generating capacity desiring a zero emission electric power source will be interested in this wind turbine | a neaeeeeaigan inmate ese we cart apart ian nein rhs ferumenA tn THE:AOC 15/50 WIND TURBINE GENERATOR ~~ = oa ne in et es a ee Lanter Iraid ome wr am = meee ee The AOC 15/50 wind turbine consists of a 15 meter rotor which produces 50 kW at an 11 m/s wind speed. It was developed in conjunction with the Department of Energy anc the National Renewable Energy Laboratory under their Advanced Wind Turbine (AWT, Program. The goal of this cost shared program was to produce wind generated electricity for around $.055 / kWh in a moderate average wind resource. Simplicity was the design driver for this machine with high availability and fail safe reliability the intended result. The philosophy of Atlantic Orient Corporation is reflected in every stage of machine development. We have taken along term view of our market and product development. Each componentof the machine was designed and tested to ensure that actual performance meets or exceeds design specifications. We have successfully designed a state-of-the-art wind turbine generator and have well founded confidence that it will perform to our expectations Features of the AOC 15/50: ¢ Absolute Simplicity and Minimal Maintenance Requirements * Designed for 30 Year Life in Extreme Environmental Conditions * Downwind Passive Yaw Configuration * Integrated Drive Train Provides Efficient Load Path (eros * Single Piece Castings for Hub, Gearbox Housing & Tower Top % mae * Redundant Braking: Tip Brakes & Dynamic Brake Joo ¢ Engineered for Use in High Penetration Wind / Diesel Hybrid Systems \20 ) ¢ NREL Thick Airfoil: | Well Proven Wood / Epoxy Blades Improved Bug & Dirt Tolerance Efficient Over a Wide Spectrum of Wind Speeds The AOC 15/50 Performance Characteristics = | aa] 4A The AOC 15/50 Wind Turbine Drive Train Assembly ~ Power Quins (om) ] T | Totally Enclosed Air Over Generator ia | / Integr ° =i — \ 2 3 . Porking Broke | ona ee aaa \ © Wind Senet \ The AOC 15/50 Calculated Power Curve ¥ nergy production is depen- } 1} 4 a ant upon actual wind re- toch} | es and site conditions Yaw Bearing ey will vary with altitude, te ee ee ee ee imperature, topography 230 : Pa eed 1d the proximity of other aoe | ESSER WES names, tures. (trousends) 8 hantic Orient Corporation is onstantly working to im- Single Piece Casting of Major Components Aneuat Energy Output (awh) 7 —T Jule pees eles py ee (I ee Ee The tower top, rotor hub and gearbox housing are single piece ‘ Be ccs mney ee ee castings. These three components eliminate hundreds of = 6788 one tse se aot parts and weldments, providing efficient load paths and ice reducing material fatigue. Average Wind Speed Calculated Annual Energy Produc- tion for the AOC 15/50 Turbine SYSTEM Type Configuration Rotor diameter Centerline hub height DESIGN SPECIFICATIONS FOR THE ATLANTIC ORIENT 15/50 (60 HZ & 50 HZ) 50 kW WIND TURBINE Utility interface Horizontal axis 15 m (49.2 f) 25 m (82 f) PERFORMANCE PARAMETERS 60 HZ Rated electrical power Windspeed cut-in shut-down (high wind) peak (survival) Annual output 100% avail. (Hub height wind speed) 50 kW at 11.0 m/s (24.5 mph) @ hub height 25 m (82 ft) 3.7 ms (8.2 mph) 25.0 mis (55 mph) 59.5 mis (133 mph) §.4 m/s (12 mph) 98,700 KWh 6.7 m/s (15 mph) 165,000 kWh 8.0 m/s (18 mph) 228,800 kWh PERFORMANCE PARAM! 50 HZ Rated electrical power Windspeed cut-in shut-down (high wind) peak (survival) Calculated Annual! Output 100% avail. (Hub height wind speed) TOR Type of hub Rotor diameter Swept area Number of blades Rotor solidity Rotor speed at rated power Location relative to tower Cone angle Tilt angle Rotor tip speed Design tip speed ratio BLADE Length Material Airfoil (type) Twist Root chord Max chord Tip chord Chord taper ratio Overspeed device Hub attachment Blade weight TRANSMISSION Type Housing Ratio (rotor speed to generator speed) Rating, output hp. Lubrication Filtration Heater (option) GENERATOR Type Frequency (Hz) Voltage (V) kW at rated windspeed kW at peak continuous Speed rpm (nominal) Winding configuration Insulation Enclosure Frame size Mounting Options 50 KW at 12.0 mis (26.8 mph) @ hub height 25 m (82 ft) 3.8 ms (8.6 mph) 25.0 mis (55 mph) §9.5 mis (133 mph) 5.4 ms (12 mph) 92,000 kWh 6.7 m/s (15 mph) 152,300 kWh 8.0 ms (18 mph) 207,000 kWh Fixed pitch 15m (49.22) 477 m? (1902 f) 3 0.077 65 rpm at 60 HZ, 62 mpm at SO HZ Downwind 6 degrees Odegrees 50.7 m/s (113 mph) at 60 HZ; 48.6 m/s (109 mph) at SO HZ 6.1 72m (23.7) au Wood/epoxy laminate ¢**'"* NREL, Thick Senes - modified T° outer blade 457mm (18in) @ 4% 279 mm (11 in) 749 mm (29.5 in) @ 39% 2925 mm (115 in) 406 mm (16 in) @ 100% 7500 mm (295 in) 22:1 Electro-magnetic Tip Brake Embedded female bolt receptors 143 kg (315 Ibs) Planetary Ductile iron - integrated casting 1 to 28.25 (60 Hz); 1 to 24.57 (50 Hz) 88 Synthetic Gear Oil Positive, pump with filler cartridge Cold weather version, electric 3-phase induction 60 & 50 HZ 480, 3-phase at 60 HZ 380, 3-phase at 50 HZ SO kW 66 kW at 60 HZ; 55 kW at SO HZ 1800 at 60 HZ; 1500 at SO HZ wye Class F (class H option) Totally Enclosed Air Over (TEAO) 365 TC Direct mount to transmission Arctic and Tropical Versions Jeo $4o7ert- YAW SYSTEM Normal Free, rotates 360 degrees Option Yaw damping - required when conditions exceed 50 degrees yaw rate per second DRIVE TRAIN TOWER INTERFACE Structural Yaw bearing mounted on tower top casting Electrical Twist Cable TOWER Type Galvanized 3-legged, bolted lattice, self supporting Tower height 24.4 m (80 fi) Option 30m (100), 37m (120 f) FOUNDATION Type Concrete or special Anchor bolts Certified ASTM A-193 G.87 CONTROL SYSTEM Type PLC based Control inputs Wind Speed, Generator shaft speed, Generator temperature Control outputs Line interconnection, brake deployment, winding heaters Communications (option) Serial link to Central Computer for Energy Monitor and Maintenance Dispatch ROTOR SPEED CONTROL Production Blade stall increases with increased wind velocity Aerodynamic. Electrical boost if necessary Control system simultaneously applies dynamic brake and deploys tip brakes. Parking brake brings rotor to a standstill Centrifugally activated tip brakes deploy Normal start-up Shut-down Back-up overspeed RAKE SYSTEM CONTRO! Fail-safe brakes automatically deploy when grid failure occurs. SYSTEM DESIGN WEIGHTS kg(Ibs) Tower 3,007 kg (6,630 Ibs) Rotor & Drive Train 2,404 kg (5,300 Ibs) Weight on foundation 5,411 kg (11,930 Ibs) DESIGN LIFE 30 Years HEDULED MAINTENANCE Semi-annual, or after severe events UMENTATION Installation, Operation Service & Maintenance manual. DESIGN STANDARDS Applicable Standards AWEA, EIA, IEC, and CEC NOTE 1: Atlantic Orient Corporation and its affiliates are constantly working to improve its products, therefore, specifications are subject to change without notice. NOTE 2: Energy production is dependent upon actual wind resources and site conditions, and will vary with wind turbine maintenance, altitude. temperature, topography and the proximity to other structures. NOTE 3: For design options to accomodate severe climates or unusual circumstances, please contact the corporate office in Norwich, Vermont. Performance Characteristics of the AOC 15/50 Wind Turbine Calculated Power Curves Calculated Annual Energy Output 70 350 p———__| 60 Hz 60 = 300 Ul : z 60 Hz = 7 ——__| + 50 bz = a el = ——— 3 —. = 50 3 250 Li 3 as Za \ 3 40 © F200 50 th a 3 a. 5 5’ 3 3 30 & 2150 4 - é = : i 2 20 — 100 S 3 |; 3 50 — 0 —+—— ~ ° — 1 0 5 10 15 20 25 4 5 6 7 8 9 10 " Wind Speed (m/s) Averoge Wind Speed (m/s) ke at} She The AOC 15/50 Drivetrain assembly Research and Development The AOC 15/50 wind turbine was developed with a series of R & D cost-shared contracts administered by the National Renewable Energy Laboratory to comply with International Electro-Technical Commission standards. The Dutch Laboratory ECN has conducted a Failure Modes Effects Analysis (FMEA) on the 15/50 wind turbine. Field Testing continues in several locations in the United States and Canada, as well as component qualification testing in our Norwich, Vermont test facility. One of the most important safety criteria in the design of the AOC 15/50 is the ability to safely control the wind turbine in normal and extreme conditions. This has lead to the development of redundant failsafe control mechanisms. The ultimate goal above and beyond low cost and high reliability is the protection and safe operation of the wind turbine in all specified conditions. (For information requests) — 4 Atlantic Orient Canada Incororporated Tel.: (902)468-1621 Ly 4 Moore Road, Dartmouth, Fax.:(902)468-2424 my me Nova Scotia, B3B 1/1. CANADA E-mail: seaforth@fox.nstn.ca APPENDIX C-3 Makushin Geothermal Project Assumptions; Geothermal GEOTHERMAL 13,400 kilowatt - delivered Beg Funds 19968 Avail Nominal Capitalized Interest Interest Earnings End Funds Avail $ 7.960.600 | $ 95,354,000 | $ 8.787.013 10.348.780 87,649,074 11,423,117 11,940,900 74,223,295 13,180,519 11,144,840 61,805,810 12,301,818 8.756,660 47,167,304 9,665,714 11,144,840 37,970,360 12.301.818 9,552,720 23,033,911 10,544,415 8,756,660 12,645,614 9,665,714 2.919.000 2.919.000 2.919.000 2,919,000 $ 1,082,087 | $ 87,649,074 916.337 763,035 582.312 468.770 284.369 156,119 761 $ 79,606,000 $ 87,870,129 Construction Costs Interest During Construction Financing Costs Rounding Total Debt Issue Annual Debt Service 11,676,000 87,870,129 7,422,209 1,946,000 61,662 97,300,000 7,068,739 Capacity and Energy Costs in 1998 $ Installed Capacity Cost $ 6,578.28 /KW Energy Costs $ 0.0336 /kWh* Melded 0.0969 /kWh* Labor 967,720 Wellficld Maintenance 1,998,300 Admin 142,000 Insurance 190,000 Wellfield Drilling 180,000 Royalty Year 1 i 21 * Based on all energy usable at 95% availability factor $ 4,253,791 74,223,295 61,805,810 47,167,304 37,970,360 23.033.911 12,645,614 61,662 7/20/98 APPENDIX C-4 Coal Project COAL 3,500 kilowatt 5,000 kilowatt Beg Funds Capitalized Interest End Funds Beg Funds Capitalized Interest End Funds Avail Nominal Interest Earnings Avail 19983 Avail Nominal Interest Earnings Avail 1,285,989 | $ 11,956,000 | $ 1,351,092 $ 132,561 | $10,737,469 $ 1,650,702 | #########| $ 1,734,209 $ 169,422 | $13,723,153 1,285,989 10,737,469 1,351,092 366,000 112,755 9,133,132 1,650,702 | 13,723,153 1,734,269 468,000 144,011 11,664.896 1,285,989 91335132 1,351,092 97.275 7,879,315 1,650,702 | 11,664,896 1,734,269 124,133 | 10,054,760 1,285,989 7,879,315 1,351,092 366,000 77,028 6,239,251 1,650,702 | 10,054,760 1,734,269 468.000 98,156 7,950,648 1,285,989 6,239,251 1.384.869 60,680 4,915,061 1,650.702 | 7,950,648 1,777,625 77,163 6,250,185 1,285,989 4.915.061 1,384,869 366,000 39,552 3,203,744 1,650,702 | 6,250,185 1,777,625 468.000 50,057 4.054.617 3.203.744 1,384,869 22,736 1,841,610 1,650,702 | 4,054,617 1,777,625 28,462 2,305,454 1,841,610 1,384,869 366,000 1,134 91,875 1,650,702 | 2.305.454 1,777,625 468,000 748 60,577 $ 10,287,912 $10,943,847 | $ _ 1,464,000 543,722 $ 13,205,614 $ 14,047,575 1,872,000 | $ 692,152 Construction Costs $ 10,943,847 Construction Costs $ 14,047,575 Interest During Construction 920,278 Interest During Construction 1,179,848 Financing Costs 244,000 Financing Costs 312,000 Rounding 91,875 Rounding 60,577 Total Debt Issue $ 12,200,000 Total Debt Issue $ 15,600,000 Annual Debt Service $ 886,317 Annual Debt Service $ — 1,133,323 Capacity and Energy Costs in 1998 $ Capacity and Energy Costs in 1998 $ Installed Capacity Cost $ 3,157.89 AW Installed Capacity Cost $ 2,826.57 ‘AW Energy Costs $ 0.1091 /Wh Energy Costs $ 0.1072 /kWh Melded $ 0.1407 /kWh Melded $ 0.1354 /KWh Fuel 60.17 Aon 7,800 BTU/b Fuel 60.17 /ton 7,800 BTU/b 19.015 BTU/kWh (net) 18,570 BTU/KWh (net) Limestone 10% coal costs Limestone 10% coal costs Ash 10% coal weight Ash 10% coal weight Removal 20.00 Aon Removal 20.00 /ton Incremental Ops Incremental Ops Parts/Supplies 583,334 /yr Parts/Supplies 833,334 /yr Utilities 145,833 /yr Utilities 208,333 /yr Coal 34,198 tons/yr Coal 47,711 tons/yr Ash 3,420 tons/yr Ash 4,771 tons/yr Fuel $ 0.073. /AWh Fuel $ 0.072 /kWh Ash $ 0.002 /AWh Ash $ 0.002 /kWh Limestone $ 0.007 /kWh Limestone $ 0.007 /kWh Assumptions; Coal 7/20/98 APPENDIX C-5 Combustion Turbines Solar Saturn 20 (1,204 kilowatt) 550,000 4,585 195,000 Purchase Price BTUWh mills‘kWh Full-load Fuel Consumption 13,898 Variable Operating Cost (w/ Maint) s Installed Costs. $ Annual Debt Service $ 749.585 65,352 Capacity and Energy Costs in 1998 $ Installed Capacity Cost. $622.58 /KW Energy Costs s 0.0831 /kWh Melded s 0.0893 /Wh Assumptions, Turbines ‘Solar Centaur 40 (3,636 kilowatt) Purchase Price Shipping 5 Engineering/Installation s Full-load Fuel Consumption Variable Operating Cost (w/ Maint) Installed Costs $ 2211449 Annual Debt Service $ 192,804 Capacity and Energy Costs in 1998 $ Installed Capacity Cost. $ Fnergy Costs s Melded s 608.21 KW 0.0745 /kWh 0.0805 kWh $ 1,650,000 61,449 500,000 12,357 s BTUKWh mills/kWh ION TURBINES SolarMercury $0 (4,269 kilowatt) Purchase Price $ 1,600,000 Shipping S$ 65,745 Engineering/Installation $ S00,000 BIU/kWh mills/kWh Full-load Fuel Consumption Variable Operating Cost (w’ Maint) Installed Costs $ 2,165,745 Annual Debt Service $ 188,820 Capacity and Energy Costs in 1998 $ Installed Capacity Cost. = $ $07.32 kW Energy Costs $ 00531 kWh Melded s 0.0581 ‘kWh Rolls Royce/Allison 6,467 kilowatt Purchase Price $3,200,000 Shipping $s 80,000 Enginecring/Installation $ $00,000 Full-load Fuel Consumption 8.11 BTUWh Variable Operating Cost (w/ Maint) 5. mills‘kWh Installed Costs $3,780,000 Annual Debt Service $ 329,558 Capacity and Energy Costs in 1998 $ 584.51 kW 00534 /kWh 00592 /kWh Installed Capacity Cost $ Energy Costs $ Melded s 7/20/98 U.S. a TURBINE FAX MESSAGE To From Michael D. Hubbard David N. DeYoung eNO e (907) 344-1843 (510) 676-0993 a ga Financial Engineering Company U.S. Turbine Corp, Concord, California Big aetna Ua car aiggisa January 19, 1998 Contact David @ (510) 676-0173 =r OTF? CITY OF UNALASKA C. Brown - USTC Message: Mike: Attached please find the City of Unalaska data sheets completed as requested. Best Regards, Daud 2. Dlfoung Number of Pages Including This Page 10 U.S. Turbine Comp., 7685 South Stats Route 48, Maineville, Ohio 45039 (313) 683-6100 Fax: (313) 683-6675 Tid SNIGSNL SN Wd2T:€@ 86. 6T NOL @1-12-1988 @1:27Pm FROM U.S.T.c. CONCORB. O4 City of Unalaska Data Request Page | of 2 Data to Remain Confidential? YeC3 No @ Contact Information: Contact Name: Dayid N, DeYoung Phone: Voice (510) 676<0173 Fax Gio) 676-0983 e-mail ae an General Equipment Information: Make: Ral levReyee / Al Ison Model: —SO01eKHS Rated Output at 40 degrees F: Continuous _ 6467 kW Standby 6850, kW Voltage 4769... volts Installed Cost Information: bis] USTe ABH ENU B.S. Prime Mover/Generator Purchase Price $3, 200,000,00_ Power Island Cost Per The Fop _$60, add. 00 App If not FOB Unalaska, please provide approximate shipping weight end dimensions: Operating Characteristics: Fuel Type: No.2 Oil Fuel Use: NoLosd 18.03 1H Gat GTC eivle one) Incremental Load 8612 = BTU//KWHR famire\ As an alternative. please provide fuel use ‘loading curves. SEE ATTACHED UNIT PERFORMANCE 100% TO 50% LOAD, Attached Bill of Material, tnstallation Extra. 2'd SNIGYNL SN WdET:€B 86. 6T NOL @1-12-1998 91:28PM FROM U.S.T.C. CONCORD, CA bis) USTG APR ENE = -F.B4 City of Unalasks Data Request Page 2 of 2 Emissions Data: Stack tests may be required for all new resources placed into servicc. Therefore. please provide the manufacturer guarantees in pounds por hour for the following: NOx 9,80 co 7.07 Particulates 2,28 Maintenance Data: Minor Overhauls: Hours 16,000 __ Cos $80,000 _ Downtime _16 HRS General Description of Activities: CHANGE COMBUSTION LINERS AND PARTIAL SET OF STAGE ONE VANES, Major Overhauls: Hours = _30,000__ Cot $250,000 Downtime 16 ARS (PLUS 8 HRS FOR REPLACEMENT OF EXCHANGE TURBINE) General Description of Activities: CHANGE COMBUSTION LINERS, FIRST STAGE BLADES AND Odin Matatensuoe: MANES: SECOND STAGE BLADES AND VANES AS NEEDED. Cost $.005 __ cents’‘kWh tNCLUDES MINOR AND MAJOR OVERHAULS. In addition to the actual run time, does the actual start-up of a unit add what should be considered an additional amount of run time to a unit? If so, how many hours? 0 Other: Expected Life of Unit _175,200__ hours (20 YRS) Other relevant information: Please fax response to: Mike Hubbard the Financial Engineeriag Company (907) 344-1843 Ed BNIGYNL SN WHET:S0 86, ST eT 84 BILL OF MATERIAL MODEL UST6600 GENERATOR SET Gas Turbine Generator System Each set ships as a complete unit, less off-skid-mounted equipment, roof-mounted equipment, control panel, batteries, charger and the HRSG, which ship loose. Each unit will contain the items shown below, except where per-project quantities are stated. Rotating Equipment ¢ Gas Turbine + Generator * Speed Reducing Gearbox ¢ Coupling Baseplate & Enclosure ¢ Enclosure ¢ Baseplate ¢ Maintenance Crane ¢ Paint System MRO pid Allison Mode! 501-KHS5, single shaft gas turbine with high speed output shaft. 4,160 Volt, 60 Hz, 3 phase, 6 wire generator with Class F insulation, Class “B” total temperature, brushless exciter, permanent magnet alternator and space heater. Speed reducing gearbox with lube pump and starter drive input. Dry-flex type, low speed coupling, with shear section assembly and guard. Weathertight acoustic enclosure, bolted post and beam framework, designed for a weighted average noise level of 85 dBA three feet from the enclosure in a free field, 4.5 to 5 feet above grade. Fabricated structural steel with machined mounting pads for major rotating equipment. Turbine maintenance crane suitable for engine or module removal from the unit enclosure. Paint system in accordance with UST Specification No. 95797. SNIGYNL SN WdET:E@ 86. 6T Nol Combustion Air Intake * Inlet Fitter «Inlet Plenum Self-cleaning, pulse type combustion air inlet filter unit, shipped separately for mounting on the genset roof or building structure as applicable. Silencer and last- chance screen shipped loose for mounting onto genset roof, Differential pressure gauge and switches are in genset enclosure. Carbon steel gas turbine combustion air inlet plenum, with inspection window. Turbine Fuel & Injection Systems ¢ Liquid Fuel System + Power Augmentation Injection Piping Common Lube Oil System ¢ Main Lube Oi! Pump Prelube Ojl Pump Lube Oil Cooler Lube Oil Reservoir Duplex Oil Filters Starting System * Starting System S‘d Liquid fuel system including distribution piping, fuel contro! valve, shutoff valves, duplex liquid fuel filter, instrumentation and controls for operation on No. 2 diesel fuel. Headers, expansion joints and connections between the gas turbine combustor casing and the injection steam connection on the genset skid. 100% Capacity shaft driven pump. AC motor-driven pump. 100% capacity air-to-oil heat exchanger, supplied loose for remote mounting. Carbon steel reservoir with immersion heater, temperature controls, level gauge, level switch and tank vent with a coalescer element. 100% capacity with transfer valve, cartridge-type filters, differential pressure indication and alarm. Electric/hydraulic start system with hydraulic pump, AC motor, starter and overrunning clutch. SNIGSNL SN WdhT:€B 86. 6T NYC TIG Fire Protection * Extinguishant System ¢ Gas Detection © UN. Exhaust System : Diffuser ¢ Expansion Joint Electrical Systems ¢ Control System * HRSG Control * Battery Charger & Batteries * A.C. Power System * Protective Devices ¢ Neutral Grounding S'd CO, system for the gas turbine generator enclosure with detectors, discharge nozzles, offskid gas storage bottles, fire shutter louvers on all intake and discharge openings, waming beacon, waming placards and control panel-located disable keyswitch. Gas detection system, including panel-mounted monitor and gas sensors in turbine compartment. Two (2) U.V. detectors, mounted in turbine/generator enclosure. Stainless steel turbine exhaust diffuser. Turbine exhaust expansion joint for attachment to the waste heat recovery system's inlet transition. Turbine generator contro! system including NEMA 1 control panel, shipped loose for installation in purchaser's control room, complete with programmable logic controller, operator interface unit, vibration monitor, temperature monitor, governor, instrumentation and automatic voltage regulator. NEMA 1 contro! panel, including a PLC and OIU, for drum pressure control, feedwater contro!, sequencing and safety systems. 24 VDC lead acid 100 AMP-Hr recombination batteries, battery rack and charger for control power. Skid fighting system, including four (4) A.C. lights and two (2) single phase A.C. plug-in receptacles. 5 KV class surge capacitors and lightning arrestors mounted in the generator high voltage box. High resistance neutral grounding resistor and transformer mounted in the generator neutral box. SNIGSNL SN WdPT:€@ 86. 6T NUL * Junction Boxes Other Systems » Water Wash System ¢ Ventilation System ¢ Instrument Air System Waste Heat Recovery System * Heat Recovery Steam Steam Generator (HRSG) ¢ Duct Bumer « Duct Burner Controls « Augmenting Air Blower * Scanner Cooling Air Blower ¢ inlet Transition « Watertube Boiler * Steam Drums . 2‘d Generator neutral box with current transformers and neutral ground connection, generator high voltage box with power cable connections. Compressor crank soak and on-line wash systems, with one mobile mixing cart per project. Two-stage cooling air inlet fitters, with fans and discharge hoods. These items ship loose, for mounting by others on the building roof or enclosure roof, as applicable. Instrument air piping and distribution tubing system for louvers, fuel valves and seals. Single pressure, natural circulation, water-tube, waste heat recovery boiler with economizer, containing the items shown below: Duct burner firing duct, internally insulated and lined, with gas-fueled duct burner. Instrumentation, valves and controls for fuel gas supply. Duct bumer augmenting air blower with automatic damper rated 7000 CFM, 12" SP, 20 hp motor. Duct bumer scanner air blower rated at 160 SCFM max. 75" max. pressure. Insulated transition to the HRSG. Two pass, two drum natural circulation unit, arranged for horizontal flow at the inlet and vertical gas flow at the exit. A 60" |.D. steam drum and a 30" I.D. lower drum (mud drum), each with 12" x 16" elliptical manways in each end. BNIGYNL SN Wd22:€8 86. 6T Nor Economizer Economizer Exit Transition Exhaust Stack Feedwater Controls Feedwater Pumps Continuous Blowdown Intermittent Blowdown Drum Condensate Pumps Process Steam Controls Injection Steam Controls Injection Steam Piping Miscellaneous Valves & Piping Steam Separator 8'd Carbon steel, gas-tight casing with 2" x SA-178 type material tubing. The outlet flange channel incorporates five (5) 3" NPT connections on the front face for emissions monitoring. Carbon steel transition from economizer outlet to the exhaust stack. 5' O.D. self-supported carbon steel stack, terminating 30 feet above grade. Three element feedwater control instrumentation and control valve assembly with block, bypass and drain valves. 100% capacity centrifugal pumps rated 140 gpm. 24 inch diameter 3'-0" seam/seam, carbon steel Drum vessel, designed for 50 psig @ 450 Deg. F with conductivity element and controls. 24" diameter, 6'0' seam-to-seam, carbon steel vessel. 100% Capacity centrifugal pumps rated 120 GPM. Main process steam pressure control valve, with block and drain valves. Injection steam flow control valve and staged injection steam vaive, with block and drain valves. Piping, strainers (2) and staged injection steam valve between the superheater outlet and the genset skid injection steam inlet (requires 1 or 2 field welds by others). Safety vaives, control valves, economizer inlet check valve. Vertical extemal steam moisture separator, rated for 20,000 Ib/hr of 205 psig/sat steam, 0.1 ppm TDS inlet and 0.02 ppm TDS outlet. Design pressure is 265 psig at 550°F. SNIGdNL SN Wd22:€G 86. 6T NUL * Feedwater Heat Exchanger ¢ Deaerator ¢ Boiler Chemical Injection Miscellaneous « Contract Documentation * Testing « Shipment Terms Carbon steel shell and tube exchanger. Designed for 70,000 Ib/hr flow both sides. Duty 5,950,000 BTU/HR. Tray-type deaerator 1200 gallons capacity, sized for 70,000 ib/nr, 5 psig op., 50 psig design pressure, 10 min. storage. Injection pumps, and motors, three (3) 50 gal. 304 S.S. chemical injection tanks. Three (3) sets of Operation and Maintenance manuals per project, installation drawings, parts lists, kit lists, customer drawings and specifications. Customer-witnessed, full-firing-temperature factory testing of the complete package, less the inlet air filter, HRSG and injection steam system. Ex-works Maineville, Ohio, U.S.A. SNIsnl SN WdB2:€B 86. 6T NOL Page: 1 ***** TBM PC 501-KH5 ESTIMATED DATA GENERATED ON 1/19/1998 ***** GEN EFF FUELFLOW EXH FLOW LB/HR LB/SEC POWER H20 RATIO 1419.8 42.939 34.964 LB/SEC Qt'd 18400.0 18400.0 18400.0 18400.0 18400.0 18400.0 3027.242 41.56 2770.488 41.10 2550.638 40.63 2333 .647 40.10 2115.102 39.56 1900.195 39.03 KW @TERM PART LD KW ‘ 6468.7 100.0 5820.7 100.0 §172.2 100.0 4527.4 100.0 3880.5 100.0 3234.5 100.0 SHP LB/LB 9172.3 0.00 8253.5 0.00 7333.8 0.00 6419.6 0.00 5502.3 0.00 4586.4 0.00 SNIGsNL SN Wd82:€@ 86. 6T Nor MAR @8 '98 16:52 FR SOLAR TURBINES, INC. 713 895 4278 TO 919073441843--37 P.@1/84 Solar Turbines incorporated 13108 Northwest Freewsy Suite 400 Houston, TX 77040 (713) 888-2334 Fax: (713) 895-4270 Date: Sunday, March 08, 1998 To: Financial Engineering Company Michael D. Hubbard Phone: 907-522-3351 Fax: 907-344-1843 From: Solar Turbines Incorporated Hiram O. Marin, Jr. Phone: 713-895-4213 Fax: 713-895-4270 Pages: 5 Subject: | HO7-824/ Dutch Harbor - Mercury 50 Data Dear Mike: Please refer to the following performance data on the Mercury 50 gas turbine based on liquid fuel #2 Diesel. In addition, I am supplying a three page budget proposal for your reference. I trust this meets with your expectations. Very truly yours, Hrm J Map Hiram O. Marin, Jr. Sales Engineer MAR @8 °98 16:53 FR SOLAR TURBINES, INC. 713 895 4278 TO 919073441843--37 P.d2/04 MERCURY 50 GENERATOR SET EQUIPMENT DESCRIPTION: - Rating Options Continuous: Intended for operation more than 5000 hours pe year at or near full load rating. Typical applications include cogeneration/CHP and base load. Intermediate: Intended for operation between 2000 and 5000 hours per year at varying load factors with the majority of operation at full load rating. Typical applications include utility grid support, remote site prime power, and load management. Peaking: Intended for operation less than 500 hours per year. Typical applications include peak shaving and standby power. - Natural Gas or Distillate Fuel - SoLoNOx, Dry Low NOx Combustion System - 4160 volt, 60 Hz, Open Drip Proof Generator Class F Insulation, Class F Temperature Rise - NFPA 37, Non-hazardous, Electrical Classification - Direct Drive AC Start System - Lube Oil System: Tank, Filter, Lube Oil Cooler, Main Lube Oil Pump, Pre/Post Lube Pump (with AC/DC inverter for back-up power), Vent Separator - Vibration and Temperature Monitoring System - On-skid, PLC based Control System with 24 VDC Battery Supply - Generator Control and Monitoring - Turbine Compressor Cleaning: On line and On-Crank cleaning, Water Wash Cart - Acoustic Enclosure: . Ventilation Silencers and Fans, CO, Fire System, Lights, Gas Monitoring and High Temperature Alarm - Complete Documentation: ; Drawings, Operation and Maintenance Manuals, Test Reports - Inlet System: ilter and Silencer, mounted on top of package enclosure - Exhaust System: Recuperator outlet pipe with rain protection MAR @8 '98 16:53 FR SOLAR TURBINES, INC. 713 895 4278 TO 9190873441843—37 P.@3/04 - Factory Test - Shipping Preparation MAR @8 °98 16:53 FR SOLAR TURBINES, INC. 713 895 4278 TO 919073441843—37 P.24/24 COMMERCIAL TERMS Price: US$ 1,600,000 Ex-works San Diego, Ca, USA 60 days validity Excludes all taxes and duties Dual Fuel +90,000 13,800 volt Generator +36,900 Payment Schedule: Performance: Delivery: Terms: Warranty: 10% upon receipt of order 10% interface drawings 30% commencement of package assembly 50% readiness to ship Expected performance at ISO conditions: Output Power, kWe Heat Rate, Btu/kWe-hr tnermediate Rating | 4600 | 8295 8 Months after Receipt of Purchase Order and Financial Commitment. Solar Standard Terms and Conditions (form 3047B) apply. 12 months after start-up , 18 months from the date of shipment (whichever occurs first), provided equipment is installed and operated in accordance with Solar guidelines. Installation, start-up and commissioning spares and labor, spare parts, switchgear, motor control center, fuel handling/storage equipment, training, operation and maintenance are not included. These services and/or equipment can be quoted separately as needed to meet your Tequirements. 40k TOTAL PAGE.@4 *« MAR @8 '98 16:54 FR SOLAR TURBINES, INC. 713 895 4278 TO 9190873441843—37 P.@1/21 The Financial Engineering Company Dutch Harbor Project - Solar Mercury 50 Performance Data Datum Conditions: Sea Level, Continuous Duty Rating, 3 inches W.C. inlet and 2 inches W.C. exhaust losses, 60% Relative Humidity, Full & Part Load @ 40F, and #2 Diesel Fuel Ambient Temperatures of 80,60,40,20, and 0°F Mercury 50 Estimates for Dutch Harbor Continuous Du Full Power with 3 and 2 inches of water inlet and exhaust loss, using liquid fuel Generator] Heat Rate Power |(BTU/Kw-Hr) Exhaust Flow (W8, (T8 deg F)| Thousands | 80 | 3738 | 8896 | 678 | 128.20 | | 60 4015 | b7i2 | 659 | 133.56 | | 640 | 138.09 _| | 620 | 142.75 | | 600] 147.98 | Continuous Duty Part Load with 3 and 2 inches of water inlet and Percent |Generator| Heat Rate | Exhaust | Exhaust Load Power |(BTU/Kw-Hr)| Temp | Flow (W8, (T8 deg F)| Thousands Lbs/Hr) [700 | 4268 | 862 | 640 | 138.09 | [—80_| 3642] _e474__| 622 | 128.41 _| 80 | 345_| e518 | 608 | 116.22 | (KWe) 40k TOTAL PAGE.@1 ** Data from Solar Computer Analysis of Unit Specs Assumptions: 40 degree inlet temperature Sea level 3 inches water inlet, 2 inches water exhaust 0% water content in fuel Centaur 40 3,636 kW Continuous Heat content of fuel 139,500 BTU/gal Loading kW MMBTU/tr BTUAWh Gal/Hr Incr from 0 No Load = 1% 36 13.54 372,387 97.06 60% 2,182 30.95 14,187 221.86 0.101698 70% 2,545 34.25 13,457 245.52 0.096464 80% 2,909 37.67 12.950 270.04 0.092834 90% 3,272 41.27 12,612 295.84 0.090405 100% 3,636 44.93 12,357 322.08 0.088581 Saturn 20 1,204 kW Continuous Heat content of fuel 139,500 BTU/gal Loading kW MMBTU/hr BTUAWh Gal/Hr Incr from 0 No Load - 1% 12 5.39 447,674 38.64 10% 120 6.34 52,658 45.45 0.377475 50% 602 10.64 17,674 76.27 0.126698 60% 722 11.78 16,307 84.44 0.116894 70% 843 12.95 15,365 92.83 0.110147 80% 963 14.17 14,711 101.58 0.105458 90% 1,084 15.44 14,249 110.68 0.102142 100% 1,204 16.73 13,895 119.93 0.099608 APPENDIX C-6 Internal Combustion INTERNAL COMBUSTION Caterpillar 3612 (3,300 kilowatt) Purchase Price $ 1,587,000 Shipping $ - Engineering/Installation $ - Full-load Fuel Consumption BTU/kWh Variable Operating Cost (w/o Overhauls) mills/k Wh Overhaul Costs /hour Installed Costs $ 1,587,000 Annual Debt Service $ 138,362 Capacity and Energy Costs in 1998 $ Installed Capacity Cost $ 480.91 /KW Energy Costs $ 0.0619 /kWh Melded $ 0.0667 /kWh Assumptions; Int Combustion 7/20/98 ” 04/03/98 11:29 FAX 907 581 2187 UNALASKA DPW/DPU Re we NeW e eee R ERR. ReweR ee eWRE EER 88. Wek teerereNERe. wtewneereneennee... nee: owerewween._- ereeenees -seewen. wweewwnne. 22-8. weeeeen. .wweneneee treeeerene. .eereeeeee Engine Investment Analysis Project UNALASKA POWER HOUSE Preparcd By GARY HIRSCHBERG Oe 06/01/96 The information contained in this EIA analysis is Caterpillar's best estimate of the "Life Cycle Costs" under opt imum operating conditions. These costs should be revicwed/adjusted for the specific operating conditions when considering “"Guerontecd Maintenance Costs" Qoo2 04/03/98 11:29 FAX 907 581 2187 UNALASKA DPW/DPL @oo3 Project UNALASKA POWER HOUSE 980003 Prepared For CITY OF UNALASKA by GARY HIRSCHBERG 03/26/98 04/03/98 11:30 FAX 907 581 2187 UNALASKA DPW/DPL CITY OF UNALASKA ANALYSIS INPUT DATA Date - 03/12/98 Customer Name - CITY OF UNALASKA Mogel/Application - 3612p ELECTRIC POWER GENERATION Rated Kw - 3300 Average KW Needed - 3080 93% Load Selling Price - $1587000.00 Inflation Rate - 0.00% Down Payment - $158700.00 Loan Interest Rate - 0.00% Months Payment Due - 120 Taxes - $0.00 Insurance (Yearly) - $0.00 Number of Years Study - 10 Hours Of Operation Per Year - 6000 Number Of Units - 1 Fuel To Be Used - NO. 2 DIESEL Fuel Cost/US Gal - $0.60000 Oil To Be Used - SAE 40 Oil Costyus Gal - $4.90 Fuel Consumption at Average Load - 6SFC - 0.326 LB/BHPH 201.30 US Gal/Hr Oil Consumption at Average Load - BSOC - 0.001 LB/BHPH 0.46 US Gal/Hr Oil Change Interval - 1000 Hours Sump Size - 387.01 US Gal Overnaui Interval(s) - Overhaul 1 (Top End) 15092 Hours Overhaul 2 (Major) 30183 Hours Overhaul 3 60366 Hours Overhaul 4 Hours 3612-3300 KW 3 @oo4 04/03/98 11:30 FAX 907 581 2187 CITY OF UNALASKA 3612P Hours Of Operation Per Year Number Of Engines FUEL OIL CHANGE MAKE UP OIL TOTAL COST TOTAL W/YRLY INFLATION OF FUEL OIL CHANGE MAKE UP OIL TOTAL COST TOTAL W/YRLY INFLATION OF 0.0% 0.0% $724684 $11378 $13583 $749645 $749645 UNALASKA DPW/DPU CITY OF UNALASKA FUEL & OIL COST BY YEAR YEAR $724684 $11378 $13583 $749645 $749645 YEAR i 3724684 $11378 $13583 3612-3300 KW YEAR $7246684 $11378 $13583 $7469645 37496465 YEAR $724684 $11378 $13583 $724684 $11378 $13583 $749645 $769645 YEAR $724684 $11378 $13583 $769645 $749645 YEAR 10 $7246684 Moos TOTAL $7246840 $113780 $135830 $7496450 $7496450 04/03/98 11:30 FAX 907 581 2187 CITY OF UNALASKA 36127 PRICES AS OF 06/01/96 Interv **** Preventive Maintenance **** PM LEVEL 1 50 PM LEVEL 2 250 PM LEVEL 4 1000 PM LEVEL 5 2000 PM LEVEL 6 8000 wenneeexee Components **tttteres Nozzles,Unit Inj,Spark Plugs 8000 Cylinder Heads(s) 8000 Turbocharger(s) 8000 Water Pump 8000 Aux. Water Pump 8000 Governor and/or Magneto 8000 Oil Cooler 8000 Aftercooler 20000 Rad., Heat Exch., Exp. Tank 8000 Shutof fs 2000 Electronic Engine Controt 2000 Gages/Sensors 2000 eeeweeneee Overnauls **teerrenee Overhaul 1 (Top End) 15091 Overhaul 2 (Major) 30183 Overhaul 3 60366 Parts $9.56 $74.64 $1153.18 $1153.18 $4223.30 $2570.49 $7789.73 $5784.63 $1208.90 $0.00 $2563.45 $295.29 $1955.15 $434.68 $142.70 $28.41 $206.83 $58948.95 $259772.26 $393130.21 UNALASKA DPW/DPU CITY OF UNALASKA MAINTENANCE COST SUMMARY dirs SER ww @ornuw SRE WN WUHOARHOOaNA ONONO04NNDOD 198.1 391.0 392.7 Rate $99.00 $99.00 $106.43 $105.12 $106.83 $99.00 $106.37 $106.22 $99.00 $99.00 $99.00 $99.00 $99.00 $99.00 $99.00 $99.00 $99.00 $107.40 $107.51 $107.47 3612-3300 kW 5 @oos ROUND TRIP DISTANCE (MILES)...... COST PER MILE.... ROUND TRIP TRAVEL TIME (HRS).. SERVICE LABOR RATE OVERTIME LABOR RATE.... MAXIMUM SERVICE HOURS PER DAY.... STRAIGHT TIME HOURS...... OVERTIME HOURS..... Total $336.26 $460.94 $3537.18 $4727.18 $9116.30 $3025.89 $14916.73 $8843.83 $2268.20 $49.50 $2751.55 $701.19 $2549.15 $800.98 $528.80 $295.71 $592.93 $80224.85 +e oe ee eee eee eee $301809.26 + $435335.51 owe eon eee Total Including Travel $336.26 $440.96 $3537.18 $4727.18 $9116.30 $3025.89 $14916.73 $8843.83 $2268.20 $49.50 $2751.55 $701.19 $2549.15 $800.98 $528.80 $295.71 $592.93 $80224.85 $301809.26 $635335.51 # Trips Required 1 1 1 2 2 Ne I ey ee 7 17 04/03/98 11:31 FAX 907 581 2187 CITY OF UNALASKA 3612P Hours Of Operation Per Year Number Of Engines Interv “*"* Preventive Maintenance **** PM LEVEL 1 50 PM LEVEL 2 250 PM LEVEL & 1000 PM LEVEL 5 2000 PM LEVEL 6 8000 xeweeeee=® Components **t*tteres Nozzles,Unit Inj,Spark Plugs 8000 Cylinder Heads(s) 8000 Turbocharger(s) 8000 Water Pump 8000 Aux. Water Pump 8000 Governor and/or Magneto 8000 Of Cooler 8000 Aftercooler 20000 Rad., Heat Exch., Exp. Tank 8000 Shutoffs 2000 Electronic Engine Control 2000 Gages/Sensors 2000 aeweeaeee® Overhauls ***eeteweee Overhaul 1 (Top End) 15091 Iverhaul 2 (Major) 30183 Overheul 3 60366 ‘SUMMARY Preventive Maintenance Components Overhauls TOTAL COST TOTAL W/YRLY INFLATION OF 0.0% UNALASKA DPW/DPU CITY OF UNALASKA MAINTENANCE COST BY YEAR 6000 YEAR $32280 $7936 $10611 $14181 $0 sssseeess $1586 $887 $1778 YEAR $32280 $7936 $10611 $9454 $9116 $3025 314916 $8843 $2268 349 $2751 $701 $0 $800 $1586 $887 $1778 $107001 $107001 3612-3300 Kw 6 Yearly Average Cost............. oses Yearly Average Cost With Inflation.. Yearly Average Hourty Cost. @oo7 Yearly Average Cost With Inflation... Esses $ses $153625 $153625 YEAR 4 $32280 $7936 $10611 $9454 $9116 $3025 $14916 $8843 $2268 $49 $2751 $701 $2549 $800 $1586 $887 $1778 $109550 $109550 YEAR 5 $32280 $7936 $10611 $14181 $ Ssesesssss $1057 $591 $1185 $131825 .00 $131825..00 $21.97 $21.97 04/03/98 11:31 FAX 907 581 2187 CITY OF UNALASKA 3612P Hours Of Operation Per Year Number Of Engines Interv **** Preventive Maintenance **** PM LEVEL 1 50 PM LEVEL 2 250 PM LEVEL 4 1000 PM LEVEL 5 2000 PM LEVEL 6 8000 weeeeeeeWe Components ***tteeees Nozzles,Unit Inj,Spark Plugs 8000 Cylinder Heaas(s) 8000 Turbocharger(s) 8000 Water Pump 8000 Aux. Water Pump 8000 Governor and/or Magneto 8000 Oil Cooler 8000 Aftercooler 20000 Rad., Heat Exch., Exp. Tank 8000 Shutoffs 2000 Electronic Engine Control 2000 Gages/Sensors 2000 eeeeewnees Overhouls *****eeewew Overhaul 1 (Top End) 15091 Overhaul 2 (Major) 30183 Overhaul 3 60366 SUMMARY Preventive Maintenance Components Overhauls TOTAL COST TOTAL W/YRLY INFLATION OF 0.0% 6000 YEAR $32280 $7936 $10611 $9454 $9116 $0 $49 $0 so $1586 $887 $1778 $69397 $4300 $301809 $375506 $375506 UNALASKA DPW/DPU CITY OF UNALASKA YEAR $32280 $7936 $10611 $9454 $9116 $3025 $16916 $8843 $2268 349 $2751 $701 30 $800 $1586 3887 $1778 $69397 $37604 $0 $107001 $107001 3612-3300 KW ti MAINTENANCE COST BY YEAR Moos Vearly Average COBTécccccccssvecsccs $131825.00 Yearly Average Cost With Inflation.. $131825.00 rly Average Hourly Cost... . $21.97 Yearly Average Cost With Inflation... $21.97 YEAR YEAR YEAR TOTAL 8 9 10 $32280 $32280 $32280 $322800 $7936 $7936 $7936 $79360 $10611 $10611 $10611 $106110 $9454 $14181 $9454 $108721 $9116 $0 $9116 $63812 so so $3025 $12100 so so $14916 359664 so $0 $8843 $35372 so so $2268 $9072 349 30 $49 $343 $0 $0 $2751 $11004 so $0 $701 $2804 so so so $2549 so so $800 $3200 $1586 $1586 $1057 $14802 $591 $887 $591 $7686 $1778 $1778 $1185 $16594 $80224 so $0 $160448 so so so $301809 so $0 so $0 $69397 369397 $4004 $36186 $80224 30 $153625 $105583 $1318250 $153625 $105583 $1318250 04/03/98 11:32 FAX 907 581 2187 CITY OF UNALASKA 3612P Hours Of Operation Per Year Number Of Engines Interv ewes Preventive Maintenance **** PM LEVEL 1 so PM LEVEL 2 250 PM LEVEL 6 1000 vm LEVEL > 2000 PM LEVEL 6 6000 teaneneee® Components *eetteeres Nozzles,Unit Inj, Spark Plugs 6000 Cylinder Heads(s) 8000 Turbocharger(s) 8000 Water Pump 8000 Aux. Water Pump 8000 Governor and/or Magneto 8000 Oil Cooler 6000 Aftercooler 20000 Red., Heat Exch., Exp. Tank 8000 Shutoffs 2000 Electronic Engine Control 2000 Gages/Sensors 2000 seaeweeres Overnauls **ttteewees Overhaul 1 (Top End) 15091 Overhaul 2 (Major) 30183 Overhaul 3 60366 SUMMARY Preventive Meintenance Components Overhaul s TOTAL LABOR HOURS ENGINE AVAILABILITY 6000 4“ oRits a 7-@sreoeofnpe9eoSa NeNODDOCCCOODO a UNALASKA DPW/DPU CITY OF UNALASKA TOTAL LABOR HOURS YEAR 316.8 66.6 67.2 68.0 45.8 my S>@>owon-o NSONNO- OU 1 3612-3300 KW YEAR 316.8 66.6 67.2 68.0 45.8 =wsaoo00coecooDo NRENoOSOSOuNOOOS Number of Serviceman per Job Yearly Average Labor Hours Total Labor Revenue Total Revenuc with Inflation YEAR YEAR 4 5 316.8 316.8 66.6 66.6 67.2 67.2 68.0 102.0 45.8 0.0 4.6 0.0 67.0 0.0 28.8 0.0 10.7 0.0 0.5 0.0 1.9 0.0 4.1 0.0 6.0 0.0 3.7 0.0 11.7 7.8 8.1 5.6 11.7 7.8 0.0 0.0 0.0 0.0 0.0 0.0 364.4 552.6 158.8 21.0 0.0 0.0 723.2 573.6 95.9% 96.7% @ooe 2 718 $7352284.50 $732284.50 04/03/98 11:32 FAX 907 581 2187 UNALASKA DPW/DPU @o1o CITY OF UNALASKA TOTAL LABOR HOURS CITY OF UNALASKA Number of Serviceman per Job 2 3612P Yearly Average Labor Hours 718 Hours Of Operation Per Year 6000 Total Labor Revenuc $732284.50 Number Of Engines 1 Total Revenue with Inflation $732284.50 YEAR YEAR YEAR YEAR YEAR TOTAL Interv 6 ic 8 9 10 **** Preventive Maintenance **** PM LEVEL 1 50 316.8 316.8 316.8 316.8 316.8 3168.0 PM LEVEL 2 250 66.6 66.6 66.6 66.6 66.6 666.0 PM LEVEL 4 1000 67.2 67.2 67.2 67.2 67.2 72.0 PM LEVEL S 2000 68.0 68.0 68.0 102.0 68.0 782.0 PM LEVEL 6 8000 45.6 45.8 45.8 0.0 45.8 320.6 wewewennee Components "**eeeeree Wozzles,Unit Inj,Spark Plugs 8000 0.0 6.6 0.0 0.0 4.6 18.4 Cylinder Heads(s) 8000 0.0 67.0 0.0 0.0 67.0 268.0 Turbocharger(s) 8000 0.0 28.8 0.0 0.0 26.8 115.2 Water Pump 8000 0.0 10.7 0.0 0.0 10.7 42.8 Aux. Water Pump 8000 0.5 0.5 0.5 0.0 0.5 3.5 Governor and/or Magneto 8000 0.0 1.9 0.0 0.0 1.9 7.6 Oil Cooter 8000 0.0 4.1 0.0 0.0 4.1 16.4 Aftercooler 20000 0.0 0.0 0.0 0.0 0.0 6.0 Red., Heat Exch., Exp. Tank 8000 0.0 3.7 0.0 0.0 3.7 14.8 Shutof¢s 2000 11.7 11.7 1157. V7 7.8 109.2 Electronic Engine Control 2000 8.1 8.1 5.4 8.1 5.6 70.2 Gages/Sensors 2000 11.7 11.7 REL 11.7 7.8 109.2 wweeseeens overhauls *Teetewwens Overhau: 1 (Top End) 15091 0.0 0.0 198.1 0.0 0.0 396.2 Overhaul 2 (Major) 30183 391.0 0.0 0.0 0.0 0.0 391.0 Overhaul 5 60366 0.0 0.0 0.0 0.0 0.0 0.0 SUMMARY Preventive Maintenance 5646.6 364.4 564.4 552.6 564.4 5608.6 Components 32.0 152.8 29.3 31.5 142.3 781.3 Overhauls 391.0 0.0 198.1 0.0 0.0 787.2 TOTAL LABOR HOURS 987.4 717.2 791.8 584.1 ENGINE AVAILABILITY 94.4% 95.9% 95.5% 96.7% 96.0% 95.9% 3612-3300 Kw 9 04/03/98 11:32 FAX 907 581 2187 UNALASKA DPW/DPU CITY OF UNALASKA NUMBER OF PH'S, COMPONENTS, AND OVERHAULS REQUIRED BY YEAR. CITY OF UNALASKA 3612P Hours Of Operation Per Yeer 6000 Number Of Engines 1 YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR Interv 1 2 3 4 5 6 7 & wae" Preventive Maintenance °*** PM LEVEL 1 50 96 % 9% 9 % 96 % % PM LEVEL 2 250 18 18 18 18 18 18 18 18 PM LEVEL 4 1000 3 3 3 5 3 3 3 3 PM LEVEL 5 2000 «3 2 2 2 3 2 2 2 PM LEVEL 6 6000 0 1 1 1 oO 1 1 1 feewseetes Components **eeernnee Nozzles,Unit Inj,Spark Plugs sooo 0 1 0 1 0 o 1 0 Cylinder Heads(s) e000 0 1 0 1 oO 0 1 Q Turbochsrger(s) so00 «(0 1 oO 1 Q o 1 0 Water Pump 8000 «(0 1 0 1 0 0 1 oO Aux, Water Pump a000 «(0 1 1 1 0 1 7 1 Governor and/or Magneto 6000 0 1 Qo 1 ° ° 1 0 Oil Cooler g000 0 1 0 1 0 o 1 QO Aftercooler 20000 0 0 0 1 Qo 0 0 0 Rad., Heat Exch., Exp. Tank go00 (0 1 0 1 0 0 1 0 Shutoffs 2000 3 3 3 3 2 3 3 3 Electronic Engine Control 2000 3 3 2 3 2 3 a 2 Gages/Sensors 2000 3 3 3 3 2 3 3 3 wewweener® Overhauls *8ereereees Overhaul 1 (Top End) 15091 0 0 1 0 ° 0 0 1 Overhaul 2 (Major) 301835 0 0 0 0 1 0 Q Overhaul 3 60346 «0 o 0 0 0 0 QO 0 3612-3300 Kw 10 YEAR 9 ouwad WUWWOACKGC OOOO oo YEAR 10 NNN O22 o5 244 eoo @o11 TOTAL 180 30 23 BRBno never nee —-N 04/03/98 11:33 FAX 907 581 2187 UNALASKA DPW/DPU @o12 CITY OF UNALASKA FINANCIAL SUMMARY Cost Cost/Hour Cost/KWH Selling Price - $1587000.00 $26.45 $0.0086 Interest - $0.00 $0.00 $0.0000 Taxes - $0.00 $0.00 $0.0000 Insurance - $0.00 $0.00 $0.0000 Fuel - $7246844.53 $120.78 $0.0392 Oit - $249616.52 $4.16 30.0014 Preventive Maintenance $680833.53 $11.35 $0.0037 Components $175225 .98 $2.92 $0.0009 Overhauls $462258.95 $7.70 $0.0025 TOTAL COST - $10601777.51 $173.36 30.0563 TOTAL WITH INFLATION - $10601777.51 $173.36 $0.0563 MAINTENANCE COST ONLY Preventive Maintenance $680833.53 $11.35 $0.0037 Components $175225 .98 $2.92 $0.0009 Overhauls $462258.95 $7.70 $0.0025 TOTAL MAINTENANCE COST - $1318318.46 $21.97 $0.0071 TOTAL WITH INFLATION - $1318318.466 $21.97 $0.0071 COST BY YEAR . 1 2 3 4 5 6 7 8 9 10 Cost/hour 162.93 142.78 150.55 143.20 136.25 187.53 142.78 150.55 136.68 142.54 Inflated 162.93 162.78 150.55 143.20 136.25 187.53 142.78 180.55 136.48 142.54 1 2 3 4 5 6 7 8 9 10 Cost/KWH 0.05 0.05 0.05 0.05 0.04 0.06 0.05 0.05 0.04 0.05 Inflated 0.05 0.05 0.05 0.05 0.06 0.06 0.05 0.05 0.04 0.05 3612-3300 Kw 1 04/03/98 11:33 FAX 907 581 2187 UNALASKA DPW/DPU @oi3 EIA Financial Total Cost = Pee07 7? Oo oil ¢2.4%)> Ea Maintenance (12.7%) & other (0.0%>5 [5 Selling Price (15.3%) E=a Fuel ¢€69.7%> EIA Financial Summary PM, Overhaul, & Component Costs PM (51.6%) Overhaul ¢€35.1%3) Component ¢€13.3%3 APPENDIX D Dispatch Analysis (Under Separate Cover) APPENDIX E Financial Analysis (Under Separate Cover)