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HomeMy WebLinkAboutCooper Valley Intertie Feasibility Study Draft Volume 1 1994Feasibility Study SWE . Copper Valley Intertie MAR 67 1994 Alaska Industrial Development and Export Authority State of Alaska, Department of Community and Regional Affairs, Division of Energy DRAFT REPORT Volume 1 January 1994 RW, BECK AND ASSOCIATES, INC. Const tANS AIDEA 77 Section I EXECUTIVE SUMMARY A. INTRODUCTION In 1992, the Copper Valley Electric Association (CVEA), a rural electric cooperative that serves the Glennallen and Valdez areas, prepared a screening level cost estimate for a 138-kV transmission line between Sutton and Glennallen (the “Intertie”’). Following development of its cost estimate. CVEA prepared an economic analysis showing that the Intertie could provide economic benefits to the electric customers of CVEA. At that time CVEA requested that the Alaska Energy Authority (Authority) conduct a feasibility study of the Intertie that would conform with statutory requirements for proposed Authority projects. R. W. Beck and Associates was retained by the Authority in January 1993 to perform the feasibility study, the results of which are presented in this report. As a result of state legislation that took effect in August 1993, oversight responsibility for this study was transferred from the Authority to the Department of Community and Regional Affairs. Division of Energy (Division). CVEA presently sells electric power to approximately 2,943 member-customers in its service terntory which includes Valdez, Glennallen and other communities in the Copper River Valley area. CVEA maintains two offices and two power plants, one each in Valdez and Glennallen. The primary source of power supply for CVEA is hydroelectric generation from the 12-megawatt (MW) Solomon Gulch Hydroelectric Project (the "Solomon Gulch Project"), located near Valdez and owned by the State. The full generating capability of the Solomon Gulch Project is sold to CVEA pursuant to a long-term power sales agreement. Since the Solomon Gulch Project does not have the capability to provide all the power needs of CVEA's customers, power generated by diesel generators located in both Valdez and Glennallen is used to supplement the output of the Solomon Gulch Project. In calendar year 1992, CVEA sold 54,602 megawartt-hours (MWh) of electric energy to its customers. Of this amount 27%, 71%, and 2% was sold to CVEA's residential, commercial and public building customer classes, respectively. CVEA's peak demand in 1992 was 10.9 MW. CVEA's total energy requirements in 1992 were 62.481 MWh, of which 40.880 MWh was supplied by the Solomon Gulch Project and 21,601 MWh was supplied by diesel generators. Beginning in January 1993, CVEA began supplying power to the Petro Star refinery, a new industrial facility in Valdez that produces refined fuels from oil extracted from the Trans-Alaska pipeline. The Petro Star refinery is CVEA's largest customer. During August 1993, Petro Star purchased 1,165 MWh of electric energy from CVEA and had a peak demand of 1,790 kW. Total energy needs for Petro Star for calendar year 1993 are estimated to be 12,200 MWh. It is expected that Petro Star's power requirements will increase in the near future as the refinery continues to expand its operating levels. As its loads have continued to increase in recent years, CVEA has investigated altemative means of power supply. The significant increase in its power requirements caused by the addition of the Petro Star refinery load has prompted CVEA to accelerate its review of new power supply options including the possibility of constructing the Intertie to purchase power from utilities in the Anchorage area. The Intertie will connect the electric system of CVEA directly to the electric system of the Matanuska Electric Association (MEA) and indirectly, through MEA's transmission system, to the electric systems of Alaska's Railbelt utilities. It is expected that with the Intertie, CVEA will purchase power generated with gas-fired generating plants by either the Chugach Electric Association (CEA) or Anchorage Municipal Executive Summary 01/19/94 [-1 AIDEA 78 COPPER VALLEY [NTERTIE f IBILITY STUDY Light and Power, utilities located in the Anch rage area. Power purchased from the Anchorage area utili- ties would be used by CVEA to offset diesel generation in Glennallen and Valdez. CVEA is presently an isolated electric system with no interconnections to any other electric utilities. B. PURPOSE OF STUDY This feasibility study is intended to define the design and routing criteria and estimated costs related to development of the Intertie. to provide a feasibility level environmental analysis, and to assess the costs of the Intertie as compared to other resource alternatives. The feasibility study includes the following principal tasks: 1. Review the Intertie route options defined in previous studies and identify other possible routing altematives and define preferred alternatives. N Develop a feasibility level design of the Intertie. 3. Develop a construction cost estimate and construction schedule for the Intertie. 4. Develop an estimate of annual operations and maintenance costs for the Intertie. 5. Conduct a review of the environmental factors related to the Intertie. Meet with and solicit input from various govemmental and public agencies conceming environmental and other institutional constraints which may affect construction of the Intertie. 6. Conduct public meetings at Sutton, Glennallen and other affected communities to obtain comment concerning the Intertie from the general public. 7. Prepare an environmental report which can serve as the basis for a subsequent environ- mental assessment (EA). 8. Conduct an electric system analysis of the electric systems of CVEA and the Railbelt utili- ties to determine the effects on system stability and performance resulting from intercon- nected operation if the Intertie were constructed. 9. Prepare a forecast of CVEA's electric power requirements for the next twenty years. 10. Review and define the costs and operating characteristics of alternative power supply options, including conservation, that may be available to CVEA in the future. 11. Conduct an economic analysis comparing the life-cycle costs and benefits of the Intertie to those of alternative resource scenarios. 12. Prepare a draft report summarizing the findings of the feasibility study. 13. Conduct a final set of public meetings to present the findings of the feasibility study and solicit public comment. : AIDEA 79 1-2 01/19/94 Executive Summar. DRAFT REPORT 14. Prepare a final report following the receipt of comments on the draft report from the Division and others. C. STUDY METHODOLOGY The feasibility study was conducted as an independent study of the Intertie and its identified altematives and involved the efforts of several engineering, environmental, public policy and economic specialists. R. W. Beck and Associates developed the Intertie route alternatives. preliminary design. cost estimate and construction schedule. and also prepared the electric load forecast, the evaluation of altema- tive power supply options and the economic analysis. Dames & Moore, Inc. of Anchorage conducted the environmental analysis and prepared the environmental report which is included in a separately bound appendix to this report. Power Technologies, Inc. conducted the electric system analysis and provided a report which is also included in a separately bound appendix. Both the environmental review and the electric system analysis were used as input to the feasibility level design and cost estimate of the Intertie. In addition, comments received during the public meetings and written comments received from the general public during the course of the feasibility study were reviewed and considered in the development of the various route alternatives. Alternative design and routing criteria for the Intertie were gathered from previous studies and new investigations. These criteria were evaluated based on past experience with similar projects in Alaska and elsewhere. Discussions were held with utility and Authority engineers to solicit input with regard to the basic design and routing criteria. Both the environmental review and the electric system analysis relied upon the routing and design characteristics of the Intertie as part of the basis for their analysis. The electric load forecast that was prepared as part of the feasibility study used a model that was developed to relate energy usage in the CVEA service territory to projected future changes in population, employment. income and other factors. The review of power supply altermatives available to CVEA was conducted using, for the most part, information developed by others in previous studies. An independent review of a proposed coal-fired generating project was conducted as part of the feasibility study. The economic analysis that was conducted for the feasibility study projected the comparable costs of power supply for CVEA for the various resource alternatives over the expected lifetime of the Intertie and then accumulated the present value of these costs. This method of economic analysis has been employed by the Authority for many years in its evaluation of generation and transmission projects throughout the State and is a standard approach for electric utility least cost planning analyses. Specific descriptions of the methodology incorporated in the various components of the feasibility study are included throughout the sections of the report. Assumptions used throughout the study are also identified in the applicable sections of the report. Significant effort was extended to gather and incorporate input from local communities, utilities and State and Federal agencies that will be affected by the Intertie. Advertised public meetings were held in Sutton, Glennallen, Chickaloon, the Glacier View area, and Valdez to introduce the general characteristics of the Intertie and obtain comment. A meeting was held with various State and Federal agencies for additional comment and input. Discussions were held with staff members of CVEA and MEA and a design criteria review meeting was conducted with the Authority, CVEA and other local utility and engineering Executive Summary 01/19/94 1-3 AIDEA 80 COPPER V ALLEY INTERTIE F IBILITY STUDY representatives to obtain input. Historical operating and other technical data was received from CVEA and used in the development of the overall analysis. D. PROJECT DESCRIPTION 1. Route The Intertie would interconnect the Railbelt electric system at Sutton to the electric system of CVEA at Glennallen and would traverse a distance of approximately 135 miles. Initially, two route alternatives were considered. one relatively close to the Glenn Highway and one farther north. These two routes were both identified in previous studies with the northem route having been proposed by a citizen's group as an altemative to a proposed transmission line near the Glenn Highway. The two initial route alternatives evolved into four route alternatives after several new route segments were identified as part of this feasibility study. The four routes, identified in this study as Route Alternatives A, B, C and D, were compared and an “apparent preferred route” alternative was identified. The route identification and comparison process entailed review of previous studies for transmission lines in the same area, ground and aerial reconnaissance, review of public comment, and the compilation of information on property owner- ship, wildlife habitat, forest cover and other environmental characteristics affecting route alignments. The apparent preferred route and the other alternative route segments are shown in Figure III-1 and are identified by route segment. All route alternatives were, to the extent possible, sited to minimize visual impact and to avoid private and, to a lesser extent, native-owned lands. The transmission line was also routed at least 600 feet from known occupied structures in response to public concems over magnetic fields. At 600 feet from the transmission line, the magnetic field from the line under maximum electrical loading is less than 0.1 milligauss. well below typical ambient field levels within housing units. A set of evaluation criteria was established and applied with a route evaluation matrix procedure to determine the relative advantages and disadvantages of each route. The evaluation process that was conducted was limited and was not intended to take the place of a formal assessment of the various route options that will be prepared further into the development process. Our limited evaluation procedure con- sidered four categories: environmental, land use, construction and technical issues, and estimated cost. Specific objective criteria in each category were developed and measured. Examples of the criteria are the number of anadromous streams crossed by the transmission line, the distance traversed in wetlands and the unit cost per mile. An apparent preferred route, Route Altemative D, was identified. This route alternative is shown in bold on the base maps at the end of Section III of this report. It proceeds from Sutton to Simpson Cabin on Boulder Creek, then along the southerm flank of Anthracite Ridge to a point west of the Victory Road area. Route Altemative D would pass north of Strelshla Mountain and continue up Hicks Creek, Alfred Creek and Crooked Creek before tuming east into the Copper River Basin. The route continues in a general easterly direction from Crooked Creek remaining from two to six miles north of the Glenn Highway until it tums south and crosses the highway approximately five miles west of Glennallen. The apparent preferred route alternative would not be visible to travelers along the Glenn Highway except possibly for a short distance where the transmission line crosses Granite Creek, near Streshla [4 01/19/94 Executive Summary AIDEA 81 DRAFT REPORT Mountain and where the transmission line crosses the Glenn Highway approximately five mules west of Glennallen. Brief glimpses of the Intertie may be possible from the Glenn Highway between Chickaloon and Victory Road depending on the perspective of the viewer. The apparent preferred route altemauve avoids to a significant extent the Matanuska Valley Moose Range (MVMR), privately-owned land. native lands and unpatented mining claims. The apparent preferred route alternative is only marginally longer than the shortest route alternative and not significantly different in cost. 2. Design and Estimated Cost The Intertie is presently configured as a 138-kilovolt (kV) single circuit transmission line onginating at a new substation to be located approximately 0.7 mile west of Sutton and terminating at the Pump Station No. 11 Substation in Glennallen. Improvements and additions will be needed at the Pump Station No. 11 Substation to accommodate the Intertie. No consideration was given in the preliminary design of the Intertie included in this study for future use of the Intertie as a link in a second transmission intercon- nection between Anchorage and Fairbanks. To upgrade the Intertie for this purpose could only be accomplished at considerable expense. Seven types of transmission tangent structures (the structures that support the transmission line along straight runs) were investigated for the Intertie. These included self-supporting single steel and wood poles, self-supporting steel and wood H-frame structures, both braced and unbraced, and the guyed steel X-frame structure commonly used in Alaska. Detailed engineering computations were performed for three conductor options and four loading zones which differentiate primarily between the ice and wind conditions which will affect the Intertie along its route. The higher the number of the loading zone. the more signifi- cant the ice and wind loading conditions and, consequently, the stronger the structures must be. Based on evaluation of the seven structure types which we reviewed, self-supporting steel H-frames were selected as the lowest cost structure for the Intertie. These structures would be made of self-weathering steel which will appear a dull, reddish-brown in color, similar in appearance to wood H-frame structures. Structure heights will be approximately 60-85 ft above ground and structures will be approximately 1,100 ft apart. The right-of-way for the Intertie will be typically 100-125 ft wide with a cleared swath of 50-75 ft immediately below the transmission line with the width of the clearcut depending on adjacent forest cover height. A primitive trail would be grubbed along the right-of-way where terrain permits for moving equipment. Although existing access to the right-of-way is limited to seven known locations, a more detailed plan for right-of-way access will be prepared during the right-of-way acquisition phase of Interte development. Construction methods ware expected to employ a combination of helicopters and ground equipment. A detailed cost estimating model was prepared to estimate the cost of construction and matenals for the different Intertie route alternatives and design altematives. Costs for the substation addiuons and improvements, right-of-way acquisition and clearing, engineering and construction management. permit- ting, and owner's costs were developed separately. The estimated costs as developed with the cost estimation model for the direct construction cost of the Intertie on a cost per mile basis are shown in Table I-1. The total estimated development cost of the Intertie is shown by major classificauon in Table I-2. Generally, the lowest unit cost option for each loading zone was applied to the different lengths in each zone to compare the four route alternatives and the costs for the route altematives vaned between $45,931,000 and $47,949,000. The total estimated cost for the apparent preferred route altemative is $45,931,000 in 1993 dollars as shown in detail in Table I-2. Executive Summary 01/19/94 15 AIDEA 82 COPPER VALLEY [NTERTIE F —...BILITY STUDY Table I-1 Unit Cost Estimate Comparison Transmission Line Construction Only (Thousands of 1993 Dollars per Mile)(1)(2)(3) LOADING ZONE 3 LOADING ZONE 4 — [LOADING ZONE I LOADING ZONE2 _ | Dove Teal T2Linnet| Dove Teal T2Linnet | Dove Teal T2Linnet| Teal 37#9AW Conductor Options Single Steel Pole Single Wood Pole Guyed Steel X-Frame es Steel Unbraced H-Frame Steel Braced H-Frame Wood Unbraced H-Frame Wood Braced H-Frame (1) Includes mobilization/demobilization @ 5%, material contingency @ 10%, installation contingency @ 20%. (2) Does not include nght-of-way clearing costs. (3) Unit costs based on Route Alternative D. *Shaded areas were not estimated. 3. Schedule A preliminary schedule for total project implementation was prepared as part of the feasibility study. This schedule anticipates that an environmental assessment would be undertaken beginning in September 1994. The schedule further expects completion of the Intertie in late 1998 with environmental work. permitting, and right-of-way acquisition occurring through spring 1996; engineering from 1995 to 1996; and construction including right-of-way clearing, from mid-1996 to fall 1998. AIDEA 83 1-6 01/19/94 Executive Summary DRAFT REPORT Table [-2 Intertie Cost Estimate Summary Apparent Preferred Route Alternative D (1993 Dollars) A Transmission Line Construction cost/male Al Structures $7,717,699 $57,599 A2 Foundanons $7,598,190 $56,707 A3 Guys and Anchors $1.226.521 $9,154 As Famng $2,642,195 $19.719 AS Conductor $6.503,487 8.537 AS Right-of-Way Cleamng $2,792,960 $20,845 Al Mobilization $1,284,405 $9,586 A8 Contingencies on Transmassion Construction 347.472 $32,446 Subtotal Transmssion Line Construction $34112,928 Labor 1357869 hours Total Per Mile Cost $254,593 B Substations Bi New Sutton Substation $1,824.16 B2 Purp Station No. 11 Sub $1,793,903 c Engineering Services cl Surveying 10000 per mie $1,339,900 c2 Geotechnical Invesngation $700,000 a Meteorologxcai Study $35,000 c4 Transmssion Line $912,500 CES} Substation $350,500 D. Environmental Services, Right-of-Way Acquisition and Permitting D.l Cukural Resource Survey $125,000 D2 Raptor Survey $10,000 D3 Environmental Assessment $100,000 D4 Visual Modeling Study $40,000 DS Permas D5a ADNRJASDOT-PF “ $20,000 DS.b ADF&G $10,000 DSc BLM $5,000 DS.d Mat-Su Conditonal Use Peas $10,000 DS Comps Section 404 Penmn/A DEC $20,000 Ds Right-of-Way Acqusition miles acres cost/ac Déa Private Lands 0.0 0 1000 $0 D6b Native Lands 16.3 6 1000 $246,000 Dé.c State Lands 98.0 14677 0 so D6d Federal Lands 83 125 0 0 Db State7MH Lands 121 182 O 0 D6L Mat-Su Borough 10 1S 0 su) Dog Natve-Selected lands 3.0 45 0 % D6bh Mining Cams 125 na 1000 $125,000 SUBTOTAL >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> (Cs17280.038 ] E Construction Management 5% $2,089,002 F Owner Costs 3% (Applied to tems A-E) G Contingency on Non-Construction Costs 10% (tems C.D.E, and F) H. Total Project Development Cost Estimate AIDEA 84 Executive Summary 01/19/94 [7 COPPER VALLEY INTERTIE SIBILITY STUDY 4. Impacts on Railbelt and CVEA Electric Systems Electnic system studies were performed by Power Technologies, Inc. to determine the impacts on Operation of the potentially interconnected electric systems of the Railbelt utilities and CVEA. These studies included steady state load flow modeling, switching studies, and transient stability analysis with a maximum electrical load of 10 MW over the Intertie. Supplemental computations were performed to iden- tify the maximum reliable power transfer limit over the Intertie. The system studies determined that the Intertie is conditionally feasible from the standpoint of its impacts on the Railbelt and CVEA electric systems. A 10 megavolt-ampere reactive (MVAR) unswitched shunt reactor was indicated as necessary for line energization and control of voltage under light load condi- uons and has been included in the Intertie cost estimate. The supplemental computations showed that power transfers above about 15 MW over the Intertie would exceed transfer limits under single contingency Outage conditions on the Railbelt electric system. At this transfer level and above, an outage of certain components in the Railbelt system would cause unacceptable voltage reductions for CVEA and MEA. If only the CVEA system load grows, the Intertie system intact transfer limit is 27 MW, limited by low voltage conditions on the southem CVEA system that would exist above that transfer amount. If MEA and CVEA loads grow at the same rate, the Intertie system intact transfer limit is 23.7 MW, limited by low voltage conditions on the MEA system. Under single contingency outage conditions on the Railbelt system, the transfer limit drops to 13.7 MW or 14.9 MW depending on the specific outage condition, limited by low voltage or thermal constraints on the MEA system. These limits assume that shunt reactors are disconnected, allowing full reactive voltage support for the MEA system from the Intertie line capacitance. With the reactors connected the transfer limit would be lower. Assuming that no improvements are made to the existing Railbelt transmission system. transmission of power at the identified 23.7 MW steady state transfer limit would risk voltage collapse in the Railbelt if one of the primary single contingency outage events were to occur on the Railbelt system. The studies indicated that a static VAR compensator (SVC) system would be necessary to dampen possible severe voltage fluctuations due to minor load changes on the CVEA system and to allow reliable transfers of power above the single contingency limit of approximately 15 MW. The estimated cost of the Intertie includes the cost of a shunt reactor but does not include the costs of a SVC system because of uncertainty as to when an SVC system would be needed. 5. Environmental Review An environmental review of the Intertie was conducted as part of the feasibility study. Appendix K contains the full "Copper Valley Intertie Project Environmental Analysis" report prepared by Dames & Moore. This report presents available environmental information and issues of public concem expressed for the two primary proposed route alternatives - a southem route and a northem route. The northem route is generally located farther away from the Glenn Highway than the southern route. Two sets of five public meetings were held in the development of the draft feasibility study and a meeting with State and federal agencies was held to identify issues to be considered during the feasibility study. Public and agency comments were taken into consideration, where practical, during the route selection process. The findings of the environmental review are summarized in the following paragraphs. AIDEA 85 1-8 01/19/94 Executive Summary DRAFT REPORT All route alternatives for the Intertie generally parallel the Glenn Highway at some distance and pass through the Matanuska River Valley, tributary river valleys, and the Copper River Basin. The Interte corridor can be divided into two nearly equal but distinct sections. east and west of Eureka. West of Eureka in the Matanuska River Valley, Intertie route altematives would encounter or be near comparatively dense forests, extensive trail systems with known historical importance, and higher concentrations of population and variable land ownership. East of Eureka, extensive wetlands and stunted forests of black spruce will be crossed and land is held principally by state and Native interests. The environmental impacts associated with the two route alternatives are similar. The most signifi- cant impacts are likely to be visual impacts and potential impacts on recreation in the immediate area near the Intertie. i.e., backpackers, rafters, skiers and snowmobilers using trails in the back country. The southem route (Route Altemative B) affords visibility from the Glenn Highway more often than does the northem route alternative (Route Alternative A). The northem alternative may reduce the visual and recreation impacts to some degree by decreasing the number of people impacted (fewer people use the back county trails than the Glenn Highway). Major wildlife within the Intertie corridor include moose. caribou. Dall sheep, black bear, brown bear. trumpeter swans, various waterfowl species. and anadromous fish species. The Intertie route alternatives are all constrained by topography and practical routing considerations to pass through or near wildlife habitat along the corridor. Impacts to wetlands and other wildlife habitats for either alternative are expected to be minimal. Care taken during construction and operation to use Best Management Practices and minimize clearing of natural vegetation will reduce the likelihood of significant permanent impacts to these habitats. Project impacts to wildlife will be minimized by employing protective measures such as uming construction activities specifically to avoid disruption to nesting swans, or other species during sensitive time periods. Limiting the number of new access roads to be constructed will minimize increased pressure on wildlife. Potential effects on the community can be difficult to measure. Public meetings and wntten public comment revealed significant concems regarding effects on quality of life and tourism, and health risks associated with electric and magnetic fields (EMFs) if the Intertie is constructed. Quality of life issues are based on subjective criteria and are hard to quantify. Visual impacts which may negatively affect recrea- tional experiences in the vicinity of the Intertie, may not necessarily reduce the number of tourists who come to the area for the scenic views. Research on the relationship of EMFs to any specific disease has not been conclusive. However, as a precautionary measure, the route alignments were established well away from known occupied structures. E. LOAD FORECAST A twenty-year forecast of CVEA's power requirements was included as part of the feasibility analysis to assess the future need for electric power in CVEA's Valdez and Copper River service areas. The forecasting effort included the development of econometric models to relate electricity requirements to population, employment, income and other factors. The power requirements of CVEA's fifteen largest commercial customers were forecasted separately based on historical trends in power usage and expected economic trends as well as anticipated changes in power requirements provided by the individual custom- Executive Summary 01/19/94 1-9 AIDEA 86 COPPER VALLEY LNTERTIE F BILITY STUDY ers. Previous studies of the area's economy were reviewed and interviews with area planners. business managers and civic leaders were conducted. The economy of the Valdez and Copper River Valley areas is predominantly influenced by the petroleum industry. seafood processing, tourism and state and federal spending. Estimated population in Valdez has increased from 3.079 in 1980 to an estimated 4,326 in 1992. a 2.9% average annual rate of growth. Population in the Copper River Valley has increased from 2.721 to an esumated 2.832 over the same period. a 0.3% average annual rate of growth. CVEA's largest commercial customers include the Petro Star refinery in Valdez. the Alyeska Pipeline Service Company and three seafood processors located in Valdez. The Petro Star refinery began commercial operation at the beginning of 1993 and has recently indicated that it expects to expand its operation and power requirements significantly over the next ten years. CVEA does not sell power to the Alyeska terminal facility in Valdez but does sell power to several remote valve and control locations along the trans-Alaska pipeline and to the pipeline’s Pump Station No. 12. Three alternative growth scenarios and four load forecast scenarios were defined and altemative assumptions were made for each scenario. The State has projected decreasing flows of oil in the pipeline and as the flow decreases over time the likelihood of continued operation of the pipeline becomes more uncertain. Because of the significant role that the petroleum industry plays in the Valdez economy, the alternative growth scenarios defined for the CVEA load forecast reflect, among other things, altemative operation scenarios for the trans-Alaska pipeline. The medium growth scenario assumes that the pipeline will continue to operate throughout the study period although at a declining rate consistent with the State's current projection of North Slope oil production. For the low growth case, it is assumed that the pipeline shuts down at the end of the forecast period. 2013. The high growth scenario assumes that the pipeline continues to operate at present levels through the forecast period. It is also assumed for the high growth case that a gas pipeline with a terminal facility in Valdez is constructed beginning in 2005 with operation beginning in 2009. Each of the growth scenarios has different assumptions regarding population and employment growth. Independent population projections were not developed as part of this study; consequently, population projections developed recently by the State and others were reviewed and adjusted as considered appropn- ate. Average annual population growth over the forecast period. 1993 through 2013, for Valdez is assumed to be 2.53%, 1.47% and -0.96% for the high, medium and low growth scenarios, respectively. Average annual population growth over the forecast period for the Copper River area is assumed to be 1.20%, 0.90% and 0.54% for the high, medium and low growth scenarios, respectively. By mid-1993, the average electric load of the Petro Star refinery was approximately 1.6 MW. As production levels increase, Petro Star estimates that its electric load will increase by 40% to approximately 2.4 MW by the end of 1994 and could increase to 5.5 MW within ten years. Much of the increase is predicated on the assumption of continued expansion of the production capability of the refinery due to assumed favorable market conditions in the future. An independent projection of the future operations of Petro Star was not included as part of this study; however, to accommodate alternative future conditions, two alternative load forecast scenarios were developed that vary only in the projected power requirements of Petro Star. The medium-low forecast includes medium population and economic growth and assumes that Petro Star loads will increase to 3.9 MW by 1997 and remain constant thereafter. For the medium- high forecast, Petro Star loads are projected to increase steadily over the next ten years to 5.5 MW in 2004. AIDEA 87 1-10 01/19/94 Executive Summary DRAFT REPORT Table I-3 and Figure I-1 show the historical and projected total energy requirements for CVEA for the four alternative load forecast scenarios. Table I-3 also shows the compounded annual growth rates for selected time periods. The significant growth between 1992 and 1997 in all cases is attributed primarily to Petro Star. Figure I-2 shows the historical and projected energy sales by customer class for the medium- high and medium-low load growth scenarios. As can be seen in Figure I-2, energy sales to the Petro Star refinery are projected to be a significant portion of CVEA's total energy sales in the future. In 1994, it is expected that energy sales to Petro Star will represent 20% of CVEA's total energy sales in that year. By 2000, energy sales to Petro Star are projected to be approximately 32,100 MWh for the medium-high scenario and 23,650 MWh for the medium-low scenario, representing 34% and 28% for the two cases, respectively, of CVEA's forecasted total energy sales in that year. Table I-3 Historical and Projected CVEA Energy Requirements (MWh) Fiscal Medium-High Medium-Low Year High Case Case (1) Case(1) Low Case 1980 43,982 43,982 43,982 43,982 1985 50,500 50,500 50,500 50.500 1992 59,227 59,227 59,227 59,227 1997 92,608 87,836 87,836 77,861 2002 116,348 106,605 92,245 76,657 2013 143,344 119,271 99,156 48,644 Compounded Annual Growth Rates: 1980-1992 2.5% 2.5% 2.5% 2.5% 1988-1992 4.7% 4.7% 4.7% 4.7% 1992-1997 9.4% 8.2% 8.2% 5.6% 1997-2002 4.7% 4.0% 1.0% -0.3% 2002-2013 1.9% 1.0% 0.7% 4.5% 1992-2013 4.3% 3.4% 2.5% -0.9% (1) The medium-high and medium-low case scenarios vary only in the assumed level of power sales to the Petro Star refinery. AIDEA 88 Executive Summary 01/19/94 1-1] COPPER VALLEY INTERTIE FEASIBILITY STUDY (Millions) Annual kWh 207 sane ae nnnn san nnneneneessecnewns nn neeseceses ene ane ne nae eae eos en en nn nnn nner ene ennene seeen sncmenenscececsnsosossnsssssesens es: QS TTT 1980 1984 1988 1992 1996 2000 2004 2008 2012 —— MediumHigh Case -~-~- MediumLow Case -—-- High Case —— Low Case Figure I-1: Historical and Projected Energy Requirements Annual kWh (Millions) 1980 1984 1988 1992 1996 2000 2004 2008 2012 HE Residential (©) Commercial (w/o PS) Public SQ Petrostar Med Low [Q PetroStar Med High Figure I-2: Historical and Projected Energy Sales by Customer Class - Medium Load Growth Scenario 1-12 01/19/94 Executive Summary AIDEA 89 . DRAFT REPORT F. ECONOMIC ANALYSIS The economic analysis determines the cumulative present value of the costs associated with the various power supply scenarios that have been developed as part of the feasibility study over the expected economic life of the Intertie. Although real escalation in oil prices over time are included. costs included in the analysis have no inflation applied in the future. The cumulative present value is calculated using an inflation free discount rate of 5% as presently defined by the Authority. Each power supply scenario defined in the study provides similar levels of electric capacity and identical levels of energy to CVEA over the analysis period; however, the costs for this power supply will vary for each case. The analysis period is the economic lifetime of the Intertie, an assumed 50-year period beginning in 1998, the expected initial year of operation of the Intertie. Costs included in the analysis are capital, and operation and maintenance costs of new generation and transmission additions, including the Intertie, and operation, maintenance and fuel costs of new and existing diesel generators. Excluded trom the analysis are certain fixed operating and capital costs related to CVEA's existing generation plant and the cost of power purchased by CVEA from the Solomon Gulch Project. These excluded costs do not affect the outcome of the economic analysis because they will be incurred no matter what case is being evaluated. The economic analysis begins with the definition of the alternative power supply scenarios. Each of the power supply scenarios takes into account the projected energy and capacity needs of CVEA over the analysis period and each scenario provides for necessary backup generation. It is assumed that CVEA will continue to maintain adequate generation capacity in both Glennallen and Valdez to supply local power requirements in the event that either the existing Glennallen to Valdez transmission line or the Interue are forced out of service. The economic analysis provides a means for determining the least cost long-term resource altemative. Three of the power supply scenarios specify that a new relatively large single generating plant is to be constructed in or near the CVEA service territory. The All Diesel scenario assumes that diesel generators will be installed by CVEA on an as needed basis and that existing diesel generators will be replaced rather than overhauled more than one more time during the study period. An evaluation of several energy conser- vation measures that could be implemented by CVEA to reduce the power needs of its customers was con- ducted as part of the analysis. For all cases, new diesel generators are specified to be added if installed resources are insufficient to meet CVEA's power requirements. A detailed evaluation of the need for and timing of new diesel generators was conducted for each of the power supply and load forecast scenarios. The power supply scenarios included in the analysis are described briefly in Table I-4. AIDEA 90 Executive Summary 01/19/94 1-13 COPPER VALLEY [NTERTIE FE-wisILITY STUDY Table I-4 Description of Power Supply Scenarios Scenario Description All Diesel Case 2.200 kW diesel generators are added at times as needed in both Glennallen and Valdez. Interte Case The Intertie is constructed and begins operation in 1998. CVEA purchases power from Anchorage area utilities at "economy energy” rates. Allison Lake Case The 3.145 kW Allison Lake hydroelectric project (tunnel alternative) is constructed near Valdez and begins operation in 2000. Silver Lake Case The 15,000 kW Silver Lake hydroelectric project is constructed 15 miles southwest of Valdez and begins operation in 2001. Glennallen Coal Case An 11,000-kW coal fired generation and district heating facility is constructed in Glennallen and begins operation in 1998 Conservation Case Applicable conservation measures are undertaken by CVEA beginning in 1994 to reduce power requirements. To the extent the measures are expected to be insufficient to supply all requirements, diesel generators are added. For each power supply scenario, the power supply cost is estimated in each year of the 50-year analysis period, and then discounted to 1993. The sum of these discounted annual costs provides the cumulative present value for each scenario, a value that is suitable for comparing the long-term costs of the alternatives. The economic analysis has been performed for alternative fuel cost and load growth assumptions to determine the effect of changing these assumptions on the results of the analysis. An additional sensitivity test has been conducted for an assumed lower level of energy potential from the Solomon Gulch Project. Table I-5 provides a comparison of the cumulative present value for the various cases and assump- tions. As can be seen in this table, the lowest cost alternative for both the high load growth and the medium-high load growth scenarios is the Intertie Case. For the medium-low load growth scenario, the Allison Lake Case becomes the lowest cost alternative although the Intertie Case is relatively close. For the low load growth scenario, the All Diesel Case becomes the lowest cost alternative followed next by Allison Lake and then by the Intertie. The alternative fuel cost assumptions do not significantly change the relative ranking of the power supply scenarios. Note in Table I-5 that not all possible scenarios for the economic analysis have been developed. Rather, certain cases have been run to show the relative impact on the analysis results caused by the alteration of certain variables. AIDEA 91 I-14 01/19/94 Executive Summary DRAFT REPORT Table I-5 Summary of Economic Analysis Results Cumulative Present Value of Comparable System Costs ($000) Load Forecast and Fuel Power Supply Scenario Price Escalation Scenario All Diesei_ _Intertie_ _Allison Lake Silver Lake A. Coal Facility Conservation Medium-High Load Growth (1) Medium Fuel Price Escalation(2) $96,616 $79,076 $87,059 $88,450 101,361 95,847 Low Fuel Price Escalation(3).. 81,539 70,616 77,801 82,545 99,243 - High Fuel Price Escalation (4) 0.0... 104,599 83,543 91,954 91,554 102,470 - Medium-Low Load Growth(5) Medium Fuel Price Escalation .............00. 75,584 67,440 66,194 70,055 84,176 75,006 High Load Growth(6) Medium Fuel Price Escalation ................ 125,711 94,660 114,700 116,763 129,399 - Low Load Growth(7) Medium Fuel Price Escalation................. 37,566 47,785 41,394 60,619 59,783 : Medium-High Load Growth(!) Medium Fuel Price Escalation, Low Solomon Gulch Project Energy(8)....... 106,007 83,755 94,606 95,996 108,167 : (a) (2) (3) (4) (5) (6) (8) Assumes medium population growth in CVEA’s service terntory and full expansion of the Petro Star refinery with increases in Petro Star power requirements over the next ten years to 5.5 MW as projected by Petro Star. Based on assumed fuel price escalation as provided by the Authority. For the medium escalation scenano, real fuel prices are assumed to increase at 1.73% per year. Based on assumed fuel price escalation as provided by the Authority. For the low escalation scenario, real fuel pnces are assumed to increase at 0.03% per year. Based on assumed fuel price escalation as provided by the Authority. For the high escalation scenano, real fuel prices are assumed to increase at 2.45% per year. Assumes that the power requirements of the Petro Star refinery expand to 3.0 MW by 1997 and do not increase thereafter. Assumes high population growth in the CVEA service territory, increasing power requirements of the Petro Star refinery to 5.5 MW over the next ten years but held constant thereafter and construction and initial operation of a trans-Alaska gas pipeline beginning in 2005 and 2009, fespectively. Assumes low population growth in the CVEA service ternitory, expansion of Petro Star refinery power requirements to 2.4 MW by 1995 and closure of the Trans-Alaska oil pipeline in 2013. Assumes medium population growth in the CVEA service territory, expansion of the Petro Star refinery load to 5.5 MW over the next ten years, medium fuel price escalation and a lower annual energy generation capability for the Solomon Gulch Project. AIDEA 92 Executive Summary 01/19/94 1-15 NEW. -SUBSTATI 30 vadiv Choum ates i I poet inat et cn O- 8 ROUTE ALTERNATIVE 0 ALTERNATIVE ROUTE SEQMENTS ROUTE MODIFICATIONS POSSIBLE eusTHG SUBSTATION PROPOSED MEW SUBSTATION SEGMENT SEmORATION S12 Le GETWEEN POSITS 1 AmB 2 Seas: (11.36) 7 et, t s — ) ng . ee gr { oe ¢. poste (5.69) —_ a ee oe am : * Delt be zs Take t ALASKA ENERGY AUTHORITY COPPER VALLEY INTERTIE FEAS@AITY STUDY STUDY ROUTE ALTERMATIVES MAP-1 OF T1 MAPS CECEMBER 1903 RW BECK AND ASSOCIATES £6 2 | ef - Be i zesty ay | Gab asl ' #3 e 78 SEAL 22 gf o<3 a yet z (oe 2 ° addy ze i z ff ot ian — — — — ROUTE moorcATOons possmuE G PROPOSED MEW SUBSTATION siz Le GETWEEN POSITS 1 AND 2 coe MLEAGE BETWEEN PORTS LEGEND ——————— ROUTE ALTERNATIVE © ee eee — ALTERNATIVE ROUTE SEGMENTS yn > Ye L 4-5-7542 - ee hee SEGMENT 6 TO 8 iM LOADING ZONE 3 © +> SEGMENT 5A TO SC a IN LOADING ZONE 4 As) S$ 5A-5C (4.30) ALASKA ENERGY AUTHORITY COPPER VALLEY INTERTIE FEASBILITY STUDY STUDY ROUTE ALTERNATIVES ——— MAP-3 OF 11 MAPS SCALE 862,200 DECEMBER 1993 R.WBECK ‘AND ASSOCIATES: vadiv o NOTE: pe nt gts Se UNLESS OTHERWISE NOTEO +ALL Cree OO ey SEGMENTS THIS MAP IN LOADING ee 5) ah ZONE 3 ia cr Nw "i : 2 ea S$ 7-7A i (9.22) SEGMENT 7 TO 7A ® LOADING ZONE 4 1 bon T \ \ | LEGEND ROUTE ALTERRATWE © ee mmm — ALTERNATE ROwTe rue BRA ENERGY A — — — — ROUTE mooHICATONs possmiE COPPER VALLEY INTERTIE S quests vam Grae aoe FEASIBILITY STUDY SEQMENT DESIONATION 81.2. 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BETWEEN PORTS 1 AND 2 f ff e ‘ UNLE driBaanse NOTED ALL | SEGMENT: THIS’ MAP IN LOADS "ZONE 2) | ALASKA ENERGY AUTHORITY COPPER VALLEY INTERTIC FEASIBILITY STUDY STUDY ROUTE ALTERNATIVES ae MAP-8 OF 11 MAPS SCALE: £63,200 DECEMBER 1993 MLEAGE BETWEEN POMTS oor RW BECK ‘AND ASSOCLATES NOTE: } Ue UNLESS, OTHERWISE NOTED ALL \) MENTS THIS MAP IN LOADING INE 2 iT - we Ss ye a vadiv || . uw ALASKA ENERGY AUTHORITY COPPER VALLEY INTERTIE FEAS@AITY STUDY STUDY ROUTE ALTERNATIVES MAP-9 OF 11 MAPS DECEMBER 1993 RW BECK AND ASSOCIATES: _Cutton MAP LOL ‘, \) UNLESS OTHERWISE NOTED ALL * _) SEGMENTS ZONE 2 4 (6.44) 1 ~1 ! ! 4 es C eee a t 1 1 4 1 u ~ 'e' errs BN 19.0 THIS MAP 'IN LOADING } \ LEGEND ROUTE ALTERNATIVE D ALTERNATIVE ROUTE SEGMENTS ROUTE MODIFICATIONS POSSIBLE ERSTING SUBSTATION (PROPOSED MEW SUBSTATION vadiv SEGMENT DESIGNATION 81.2, te GETWEEN POSTS 1 AND 2 MRLEAGE BETWEEN POMTS i. —_—_— SCALE: £02,200 ZOL ALASKA ENERGY AUTHORITY COPPER VALLEY INTERTIE FEAS@AITY STUDY STUDY ROUTE ALTERMATIVES MAP-10 OF 11 MAPS DECEMBER 1009 RW BECK AND ASSOCLATES ie (Ce el UNLESS OTHERW! oe THIS MAP. IN LOAI vadiv €0L L Garton war SE NOTED win 2 LEGEND ROUTE ALTERNATIVE D aia aii eerste rcoems COPPER VALLEY INTERTIE (SRS FEAS@BAITY STUDY SEGMENT DEMONATION 81.2, STUDY ROUTE ew Ra; RENEE CONTE sae a hes ALTERNATIVES eee —S> MAP-11 OF 11 MAPS DECEMBER 1093 RW BECK 21-P1LH WALTER J. HICKEL, GOVERNOR U 0 P.O. BOX 112100 JUNEAU, ALASKA 99811-2100 PHONE: (907) 465-4700 FAX: (907) 465-2948 DEPARTMENT OF COMMUNITY AND REGIONAL AFFAIRS A RGA cobain PHONE: (907) 269-4500 OFFICE OF THE COMMISSIONER FAX: (907) 269-4520 March 4, 1994 Ms. Eva Carpenter Alaska Energy Authority 480 West Tudor Road Anchorage, AK 99503 Dear Ms. Carpenter: Enclosed is a oe of the Executive Summary of the draft feasibility study on the proposed Sutton-Glennallen intertie. I would be pleased to discuss any aspect of the study with AEA staff or management. Singerely, , MNO, Richard Emerman Senior Economist Enclosure AIDEA 104