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Home My WebLink AboutCooper Valley Inter Office Memorandum & Correspondence 1996DRAFT DVM.AIDEA.CVEA1 April 26, 1996 TO: Riley FROM: Dennis SUBJECT: Petro Star Proposal Valdez Generation There were three concepts discussed in our meeting with Petro Star. Each has different implications for the proposed Sutton Glenallen Intertie and for the Copper Valley(CVEA) rate payers. The basic proposal of Petro Star is to install 2 MW of diesel generators with sufficient back up generators using Petro Star product as fuel. The generated energy would be used only for Petro Star. With back up generation Petro Star could isolate from the CVEA system. The project is proposed to be in service by August 1996. Permit activities have commenced. Petro Star stated that an order, with a 30 day cancellation window, had been placed for the diesels. The project would be located on Petro Star property and owned by Petro Star or an Independent Power Producer selling power to Petro Star. The implications are: 1. Petro Star quotes a O&M cost reduction of as much as $600,000 per year. 2. The project may cause a small increase of 1 cent per kwh or less for CVEA rate payers since CVEA fixed costs would necessarily be spread over a smaller rate base. 3. As shown in the Intertie Reports prepared by AIDEA for DCRA, the Intertie benefit cost ratio would drop substantially below 1.0 if Petro Star proceeds with this project. The Intertie would appear not feasible. The second proposal being considered by Petro Star is to install a gas turbine at the Petro Star site. It would produce 5 MW with 2 MW used for self generation and the 3 MW balance sold as energy to CVEA or Alyeska. The implications are: 1. If CVEA participated in the project, some of CVEA’s diesel generation in Valdez could be placed on standby or retired. 2. Petro Star would have to make some plant modifications to produce the gas turbine fuel. 3. Since the surplus power may be sold to CVEA only during the 8 months when Solomon Gulch is not providing power to CVEA, the rate can be no greater than the CVEA avoided cost. The current avoided cost rate is about 6.5 cents per kwh. This could diminish project economics for Petro Star considerably depending upon the initial cost of the gas turbine and its O&M costs. Alternatively the surplus power could be sold to Alyeska if Alyeska were willing and the cost economic. 4. If the surplus power is sold at avoided cost, the impact on the CVEA rate payer would be similar to the base case above. If the surplus power could be sold below avoided cost, the CVEA rate payer cost would be mitigated or could be reduced. The third proposal which is conceptual only is a much larger plant at Valdez providing energy to be sold to Valdez, Glenallen, Alyeska, and into the Railbelt over the Intertie. Considerations are: 1. A market would certainly exist in Valdez and Glenallen. Excess could be sold to Alyeska if Alyeska were a willing buyer and the cost was competitive. Adequate standby could be included to allow retirement of all CVEA diesels there by reducing CVEA fixed costs. 2. To sell power to the Railbelt the Intertie would have to be built. If power were sold from Valdez to the Railbelt in excess of what is required at Glenallen, the Intertie between Valdez and Glenallen may also have to be improved. 3. Wholesale power costs on the Railbelt are currently about 4 cents per KWH for firm power and about 2.0 cents per KWH for energy. It is extremely doubtful that any plant in Valdez and the necessary Intertie could be built at a cost which would provide wholesale rates any time in the near term which are competitive with the Railbelt power sources. An added complication of this option is that the Intertie Feasibility Resource and Rate Payer analysis performed for DCRA would have to be redone to include the new power plant. The analysis would require a much larger scope since retirements and load growth in the Railbelt would have to be considered in detail. 4. If low rate were achievable from the new project, CVEA rate payers would benefit from significantly lower rates. Please let me know if any additional information is needed. February 6, 1996 Subject: | Sutton-Glennallen Intertie Dear As you know, the Inter-Agency Working Group presented a December 1995 Report, which included recommendations for the establishment of prerequisite conditions to any final determination of Project feasibility. Prior to making that decision, | am requesting that you submit definitive and binding agreements which, subject to Project approval, implement recommended preconditions 1 and 2 from the Inter-Agency Report. Recommendation 1 requires an agreement, supported by acceptable guarantees or credit enhancements, which assures the economic benefits of the revenues anticipated from Petro Star's power purchases. | request that you work with AIDEA to determine whether any proposed form of guarantee or credit enhancements reasonably achieves the state’s objectives, which include minimizing rate impact. Recommendation 2 requires a joint participation agreement between CEA and CVEA. | believe this joint participation agreement should be between CVEA and CEA or a substantially similar utility. The Agreement should be in a binding form approved by each Board, subject only to APUC approval. Following our many discussions of the Project and of the Working-Group recommendation, | am hopeful that your submittal of definitive and binding agreements which implement Recommendations 1 and 2 can be accomplished within 30 to 45 days. We appreciate your patience and cooperation as the state has worked toward its analysis of whether the Sutton-Glennallen Intertie Project is feasible, and if so, how to proceed in a prudent and considered fashion. Please call if you have any questions. Sincerely, Mike Irwin Commissioner hall\rsimmons\sut-glen.doc SIAR IRIN A a ALASKA INDUSTRIAL DEVELOPMENT AND EXPORT AUTHORITY {= ALASKA @@E_ _=ENERGY AUTHORITY 480 WEST TUDOR ANCHORAGE, ALASKA 99503 907 / 269-3000 FAX 907 / 269-3044 MEMORANDUM TO} Tommy G. Heinrich Project Manager II ; Va wh FROM: Dennis V. McCrohan, PS ye Deputy Director - Energy DATE: February 27, 1996 SUBJECT: Sutton Glennallen Intertie Attached is a February 15, 1996, letter from CH2M Hill requesting an additional $20,000 in budget for completion of the services related to the analyses and Technical Memos prepared to answer the Sutton Glenallen Intertie December 1995 public meeting questions. While CH2M Hill did exceed their budget, the services were necessary and have fully answered in detail all major questions. We believed that a complete and thorough analyses was necessary since litigation is a potential. Please prepare the necessary change documents. | believe it will require a Change Order to the agreement and a new NTP. The CH2M Hill request is for a $20,000 increase. Please make the change for $30,000 which will allow some contingency if questions arise from these Technical Memos or some services are required to review or answer questions regarding DCRA’s response to CVEA. Please let me know if | can be of help. Thanks. Attachment CC; William R. Snell, Executive Director ra “zy Engineers Ered Planners ce Economists ME scicrisi coe El) 098 February 15, 1996 cep 20® We i evelor™ u ari Mr. Dennis McCrohan ka \ dus Author’ Deputy Director-Energy a and Export Alaska Industrial Development and Export Authority 480 West Tudor Anchorage, Alaska 99501 Dear Dennis: As we discussed during our development technical memoranda relating to supplemental issues surrounding the Copper Valley Intertie, our level of effort needed to complete these memoranda increased above the associated budget. At your request, I am sending this letter to review the extra work and associated costs and to request an increase in the budget. Work conducted beyond that identified in my January 9, 1996 letter to you included the following: e Three extra risk analysis workshops. In our January 9 letter, we were planning to assess risk associated with the projects during our day-long workshop regarding cost estimates. It turned out that it was necessary to spend the entire workshop discussing cost estimates in terms of methodologies employed and consistency among the estimates and methods, particularly with reference to contingencies. As you know, it was necessary to conduct individual workshops for each of the three least cost alternatives, the Intertie, the All Diesel alternative, and the Silver Lake Option C (Whitewater) alternative. The number of people of the risk needed for the workshops ranged up to five. The Silver Lake Option C required a hydropower engineer, a geotechnical engineer, a hydrogeologist, a fisheries biologist, and a risk analyst/ facilitator. e A fourth technical memorandum. This was prepared to answer the question of capacity on the Intertie, need for SVC, and direction of power flow. ¢ More extensive narrative for the technical memoranda. Our original proposal assumed that a short narrative would be prepared for the cost estimate memorandum. As you know an extensive memorandum was ultimately necessary to document the depth of analysis required for the cost estimate reviews and the risk analysis. The original proposal was for $35,000. Including $10,000 in subcontracting costs from R. W. Beck and HDR, the cost to prepare the four technical memorada was about $55,000. We are therefore requesting an increase in fee of $20,000. Goa) Seattle Office 777 108th Avenue NE, Bellevue, WA 98004-5118 206 453-5000 VAAt/p P.O. Box 91500, Bellevue, WA 98009-2050 Fax No. 206 462-5957 Mr. Dennis McCrohan Page 2 February 16, 1996 We appreciate the opportunity to provide the State of Alaska with the further technical analysis contained in the memoranda. Please do not hesitate to call me if you have any questions or or would like to discuss our request in any way. Sincerely, Cc HILL an_ David A. Gray 12PM #844 «~P.@2 1 19595) 987 561 8998 OCT 12, TO FROM: CH2M HILL-SEA Source Comparison of Average Electric Rates in South Central Alaska (1993) Cordova Electric Copper Valley Electric Kodiak Electric Seward Electric Matanuska Electric Homer Electric Chugach Electric Anchorage ML&P 0 § 10 15 Cents per kWh ate of Alaska, Division of Energy, Alaska Power Statistics, 1960-1993 20 25 SUTTON-GLENNALLEN INTERTIE WORKING GROUP REPORT This report comprises a recommendation on how to proceed on the proposed Sutton- Glennallen intertie project. It is subject to a final decision, as provided for in state law, by state Community and Regional Affairs Commissioner Mike Irwin. The Alaska Legislature in 1993 appropriated $35 million for a zero interest 50-year loan to help construct the intertie, which then-Governor Walter Hickel signed into law. The measure containing the appropriation also included a requirement for a project feasibility study and plan of finance satisfactory to the commissioner of the state Department of Community and Regional Affairs (DCRA). In July 1994, Governor Hickel’s DCRA commissioner found the studies satisfactory and approved the loan. The 1993 Legislature’s action was clear that the DCRA’s commissioner, whose department includes the Division of Energy, is responsible for deciding the feasibility of this project. The Legislature said: "The appropriation made (for the intertie) is contingent upon the completion of a feasibility study and finance plan satisfactory to the Department of Community and Regional Affairs as set out in former AS 44.83.181." Shortly after taking office, because of changing economic conditions and other factors, Governor Tony Knowles asked this working group to review certain issues related to the financial feasibility of the intertie. The group is comprised of representatives from the Departments of Natural Resources, Transportation and Public Facilities, Community and Regional Affairs and the Alaska Industrial Development & Export Authority (AIDEA). The review was limited to the economic feasibility of the project; other factors such as environmental and scenic issues, were not part of the study. The review was completed by the consulting firm CH2M Hill, under contract by AIDEA. The following represent the Inter-Agency Working Group’s recommendations. The representative from the DCRA, Commissioner Mike Irwin, abstained from taking part in these recommendations. He felt it was important to be a part of the update process, but since he has the final decision making authority in this matter, he is withholding his decision until additional input can be derived from the public. Having considered the CH2M Hill study and related information and subject to the preconditions set forth below, the Working Group is of the opinion that the Intertie and the All Diesel alternatives meet minimum requirements for economic feasibility under 1993 SLA, CH. 19 Sec. 4. From a resource cost standpoint, the benefit-cost ratio is strongly dependent upon load growth. The All-Diesel alternative is more favorable under the medium low growth factor and the Intertie is more favorable under the medium high load growth. However, from the ratepayer standpoint, the Intertie provides lower cost of energy assuming Copper Valley Electric Association (CVEA) reaches an agreement with a Railbelt energy supplier to participate in the construction of the Intertie. Therefore, subject to the following preconditions for feasibility, the Working Group recommends that the loan for the construction of the Intertie be made under the following terms and conditions, which ensure the benefits of the Intertie to both the ratepayers and the State. Preconditions for Feasibility and Conditions for Approval of Loan ik Petro Star and CVEA/CEA Agreement A precondition for feasibility of the Intertie is that an agreement must be executed by CVEA, Chugach Electric Association (CEA) and Petro Star, guaranteeing that Petro Star remains a purchaser of energy for an adequate period of time to assure minimal rate impact to CVEA and CEA ratepayers should Petro Star cease to purchase energy. In order to assure the long term revenues which are necessary for the Intertie feasibility, it is proposed that a credit enhancement be provided for Petro Star's payment obligations. Alternatively, an agreement with a replacement or new energy purchaser of equivalent load would suffice to assure the feasibility of the Intertie. Therefore, the working group recommends that either a credit enhancement or the equivalent or greater energy purchase to replace Petro Star should be required. CEA/CVEA Agreement Since June 1995, CEA and CVEA have been considering joint participation in the Intertie. The General Managers have tentatively agreed on the principle economic terms of joint participation. The details would be defined in a Power Sales Agreement which would address funding, the energy delivery point, cost of operation and maintenance of the Intertie, and proportional sharing of the risk. The agreement would be intended to assure that CVEA and CEA ratepayers have equitable minimal risk. The APUC will determine in their review and approval process the ultimate acceptability of this risk. As a condition to the approval of the State loan, the working group recommends that an acceptable agreement should first be executed by the Boards of CEA and CVEA. Plan of Finance A financing plan was submitted with the 1994 feasibility study. As a condition for approval of the State loan, the working group recommends that the Plan of Finance should be revised as necessary incorporating the changes noted in the current study as well as any preconditions and conditions contained in these findings. The Department of Community and Regional Affairs will review and approve the revised Plan of Finance. Repayment Obligations The Intertie has significant legal, environmental, land, routing, community, and engineering issues which have not been resolved. These issues may be difficult to resolve within the economic constraints imposed by the precondition agreements between CVEA and Petro Star, and by the Plan of Finance. As a condition for the State loan, the working group recommends that all costs of the Intertie, excluding legal costs which are not eligible State loan costs, should be repaid under agreed loan terms. This Sutton-Glennallen Intertie Page 2 Working Group Report condition should apply even if the Intertie is not completed, unless the State were to revoke or substantially modify the terms of the authorizing State loan legislation. Terms and Conditions for Use of Phase | State Loan Funds The working group recommends that the State loan funds be released in phases as expenditures are incurred. Initial State loan funds should be limited to the specific Phase 1 uses as described below. No costs should be reimbursed from State loan funds for detail engineering, long lead capital equipment, construction, land acquisition, or other major items until specific milestones are achieved and subsequent approval is provided. Legal costs for current or future litigation should not be an acceptable use of the State loan funds. | n Fun iE Preliminary Engineering Preliminary design should be authorized only to the extent necessary to support environmental permit studies and applications, cost and schedule development, final route selection, and property definition. Geotechnical studies should be authorized only to the extent necessary for route selection. 2. Route Selection and Land Acquisition The necessary studies should be undertaken to make the final route selection and to define the required rights of way. Land or right of way acquisition should not proceed without subsequent approval. 3. Environmental Studies Engineering and environmental studies should be undertaken as necessary to complete the environmental assessment or impact study and all other major permits. 4. Public Involvement and Project Mitigation CVEA and CEA shall, to the extent practical, use their best efforts to obtain broad public input and consensus regarding acceptable mitigation actions necessary to reduce impacts associated with development activities. 5: Capital Cost Budget and Schedule Capital costs budgets and schedules should be developed. They should be sufficiently detailed to completely define all costs and the timing of all development activities. Phase | Milestones At RUS and APUC Approval The applications and support documentation should be prepared to obtain RUS and APUC approval. The approval to provide financing for CVEA should be obtained from Sutton-Glennallen Intertie Page 3 Working Group Report the RUS or an acceptable alternative. The approval of the power sales agreements between CVEA and Petro Star and between CVEA and CEA should be obtained from the APUC. These approvals should be obtained prior to proceeding beyond the Phase | uses designated above. 2. Environmental and Other Major Permit Approvals The applications and support documentation should be prepared to satisfy the environmental process and other major permits. These permits should be obtained prior to proceeding beyond the Phase | uses designated above. The review by the Working Group recognizes the relatively narrow scope of review by CH2M Hill. We therefore recommend that Alaskans living in the areas to be affected by the intertie project have another opportunity to study the new report and voice their views on the project before a final decision is reached by the DCRA commissioner. MUG William R. Snell, Executive Director Alaska Industrial Development and Export Authority John T. Shively, Commissioner Department of Natural Resources Kurt Parkan, Deputy Commissioner Department of Transportation and Public Facilities Sutton-Glennallen Intertie Page 4 Working Group Report NUV- Y-YO INU Bids VUIPE UUFII bd LUNEK FAX NU. YU/ob68s09 P. Ud , NOV-09-96 THU 07:04 AIDEF FAX NO, 907561°°73 P, 05/05 ef et the RUS or an acceptable altemative. The approval of the power sales agreements between CVEA and Petro Star and between CVEA and CEA should be obtained from the APUC. These approvals should be obtained prior lo proceeding beyond the Phase J uses designated above, 2; Environmental and Other Major Permit Approvals The applications and support documentation should be prepared [o satisfy the environmental process and other major permits. These permits should be obtained prior to proceeding beyond the Phase | uses designated above. The review by the Working Group recognizes the relatively narrow scope of review by CH2M Hill. We therefore recommend that Alaskans living In the areas to be affected by the intertie project have another opportunity to study the new report and voice their views on the project before a final decision is reached by the DORA commissloner, William R. Snell, Executive Director Alaska Industrial Development and Export Authority John T, Shively, Commissioner Department of Natural Resources Kurt Parkan, Deputy Commissio Department of Transportation and Public Facllities Sutton-Glennallen Intartia Page 4 Working Group Report Teleconference Log July 3, 1996 Project: Sutton-Glennallen Intertie | spoke with Steve Lewis, Chairman of the Management Committee Petro Star Valdez Refinery (“PSVR’) in regard to status of self-generated power for its own operations. Mr. Lewis advised me of the following: 1. The project is proceeding as originally discussed. Alaska Power Systems, Inc., is involved and supplying the system. Third party engineers are also involved. CH2M HILL has been engaged to perform permitting and air quality modeling services. Steve was uncertain as to the exact status of the permitting effort, but said he would have Jim Bolts give me a call. He was of the opinion that progress was good and the project should come on line during September 1996. 2. We briefly discussed PSVR’s long term interest in the intertie and/or an inter- connection agreement with Alyeska. Mr. Lewis repeatedly stated that whatever PSVR did in the future would be tied to ensure that the economic and energy interest of the City of Valdez were taken care of as well. 3. PSVR is interested in obtaining a copy of CVEA’s request for proposals for sale or merge of the utility. WZ R. Snell Executive Director h:all\bjfwrs\ October 23, 1995 Preconditions for Finding of Feasibility and Conditions for Approval of Loan 1. Petro Star and CVEA/CEA Agreement A precondition for a finding of feasibility of the Intertie is that an agreement must be executed by the three parties guaranteeing that Petro Star remains a purchaser of energy for an adequate period of time to assure no negative rate impact to CVEA and CEA ratepayers. In order to assure the long term revenues which are necessary for the Intertie feasibility, it is proposed that a credit enhancement be provided for Petro Star's payment obligations. Alternatively, an agreement with a replacement or new energy purchaser of equivalent load would suffice to assure the feasibility of the Intertie. Therefore, either a credit enhancement or the equivalent or greater energy purchase to replace Petro Star will be required. 2. CEA/CVEA Agreement Since June 1995, CEA and CVEA have been considering joint participation in the Intertie. The General Managers have agreed on the principle economic terms of joint participation. The details would be defined in a Power Sales Agreement which would address funding for the supplementary cost, the energy delivery point, cost of operation and maintenance of the Intertie, and proportional sharing of the risk. The agreement would be intended to assure that CVEA and CEA ratepayers have equitable minimal risk. The APUC will determine in their review and approval process the ultimate acceptability of this risk. As a condition to the approval of the State loan, an acceptable agreement must first be executed by the Boards of CEA and CVEA. 3. Plan of Finance A financing plan was submitted with the 1994 feasibility study. As a condition for approval of the State loan, the Plan of Finance must be revised and approved incorporating the changes noted in the current study as well as any preconditions and conditions contained in these findings. 4. Repayment Obligations The Intertie has significant legal, environmental, land, routing, community, and engineering issues which have not been resolved. These issues may be difficult to resolve within the economic constraints imposed by the precondition agreements between CVEA and Petro Star, and by the Plan of Finance. As a condition for the State loan, all costs of the Intertie, excluding legal costs which are not eligible State loan costs, must be repaid under agreed loan terms. This condition applies even if the Intertie is not completed, unless the State were to revoke or substantially modify the terms of the authorizing State loan legislation. Terms and Conditions for Use of Phase | State Loan Funds The State loan funds will be released as expenditures are incurred. They will be limited to the Phase 1 uses as described below. No costs will be reimbursed from State loan funds for detail engineering, long lead capital equipment, construction, land acquisition, or other major items until specific milestones are achieved and subsequent approval is provided. Legal costs for current or future litigation are not an acceptable use of the State loan funds. Phase | Uses of State Loan Fun 1. Preliminary Engineering Preliminary design will be authorized only to the extent necessary to support environmental permit studies and applications, cost and schedule development, final route selection, and property definition. Geotechnical studies will be authorized only to the extent necessary for route selection. Route Selection and Land Acquisition The necessary studies will be undertaken to make the final route selection and to define the required rights of way. Land or right of way acquisition will not proceed without subsequent approval. Environmental Studies Engineering and environmental studies will be undertaken as necessary to complete the environmental assessment or impact study and all other major permits. Public Involvement and Project Mitigation CVEA and CEA shall, to the extent practical, use their best efforts to obtain broad public input and consensus regarding acceptable mitigation actions necessary to reduce impacts associated with development activities. Detail Capital Cost and Schedule Detailed capital costs and schedules will be developed. They must be sufficiently detailed to completely define all costs and the timing of all development activities. Phase | Milestones ik RUS and APUC Approval The applications and support documentation will be prepared to obtain RUS and APUC approval. The approval to provide financing for CVEA must be obtained from the RUS or an acceptable alternative. The approval of the power sales agreements between CVEA and Petro Star and between CVEA and CEA must be obtained from the APUC. These approvals must be obtained prior to proceeding beyond the uses designated above. 2: Environmental and Other Major Permit Approvals The applications and support documentation will be prepared to satisfy the environmental process and other major permits. h:all\bjflaea\sutginO1.doc B/oa/a5 Sorta leanna on Pod Sess ton Mec. Yow ——+ ferro Star Ghat Bo\4 io ar Pocchese | epACaie ot —— fag - stare Pa mom— Rat i ea Rech ee ke Jon ——*_ off For2woc 90d Lee eb OPP], ok 6M Potro Genecabon ——> 2.0 mio 4 Alyce ke Gareretan —t 25MLO Sutton-Glennallen Intertie Policy Issues relating to “Yes” decision: Pro’s -Promotes economic development -Saves jobs/creates new jobs -Fuel diversification for Copper Valley -$35 million is not grant but a loan -Favorable environmental externalities -Study confirms existing DCRA finding -Expands Railbelt grid system Con’s -$25 million in lost opportunity -$35 million not available for other uses -Must reverse existing finding of feasibility -Quantitative cost benefits are small -Negative environmental impacts from new development Summary of Economic Analysis Cumul _ e Present Value of Comparable Systen _ sts ($000) Load F Fuel Price S io (1) Resource Scenario Medium- Medium- High High(2) Low(2) Low All Diesel Case 121,562 84,771 67,853 39,565 Intertie Case 91,227 72,604 63,415 50,042 Intertie Case(3) 74,975 . 56,353 47,164 33,788 Allison Lake Case 108,298 71,989 60,596 44,808 Silver Lake A Case 108,376 74,929 70,508 63,462 Silver Lake B Case 108,600 76,720 74,233 67,992 Coal Facility Case 98,898 76,567 77,062 61,432 Conservation Case 120,690 84,098 67,777 39,775 (1) The high and medium-high load forecast scenarios are combined with the high fuel price scenario and the low and medium-low load forecast scenarios are combined with the low fuel price scenario in the economic analysis. (2) The medium-high and medium-low cases vary only in the estimated energy requirements of the Petro Star refinery beginning in 2018 and in the fuel price scenario assumed. (3) This intertie case considers the benefit of the zero-interest loan. A factor which is commonly used to quickly evaluate the relative costs of various resource alternatives is the benefit/cost ratio. This index divides the cumulative present value of the benefits of an alternative by the cumulative present value of the costs of the alternative. In the case of evaluating the various resource alternatives included in this study, the All Diesel case represents the benefits of an option and the specific option represents the costs. The All Diesel case is to be offset by the implementation of the resource option, therefore it represents the benefits. A benefit/cost ratio greater than 1.0 indicates that the benefits of the option exceed the costs. The following table shows the benefit cost ratios for the various resource options for each of the load forecast scenarios. Comparison of Benefits and Costs Benefit/Cost Ratios(1) Load F uel Price S io) Resource Scenario i High Medium- Medium- Low High(3) Low(3) All Diesel Case 1.00 1.00 1.00 1.00 Intertie Case 1.33 1.17 1.07 0.79 ~—>- Intertie Case(4) 1.62 1.49 1.43 1,17 Allison Lake Case 1.12 1.18 1.12 0.88 Silver Lake A Case 1.12 1.13 0.96 0.62 Silver Lake B Case 1.12 1.10 0.91 0.58 Coal Facility Case 1.23 1.11 0.88 0.64 Conservation Case 1.01 1.01 1.00 0.99 (1) Benefit/cost ratios are calculated as the cumulative present value of the diesel alternative divided by the cumulative present value of the respective resource alternative. Benefit/cost ratios are calculated independently for each load forecast scenario. (2) The high and medium-high load forecast scenarios are combined with the high fuel price scenario and the low and medium-low load forecast scenarios are combined with the low fuel price scenario. (3) The medium-high and medium-low cases vary only in the estimated energy requirements of the Petro Star refinery beginning in 2018 and in the fuel price scenario assumed. (4) This intertie case considers the benefit of the zero-interest loan. Ao dew bu CEA 1a/ea/ae January 22, 1996 TO: Randy and Riley ) FROM: Dennis SUBJECT: Sutton Glenallen Intertie Drafts Attached is draft for your review of Tech Memo No. 1 which will be the qualitative environmental analysis. The remaining draft memos which will be for the isks and the $35M to Applied to Each Alternative should be done late tomorrow. Sorry for the delay. TECHNICAL MEMORANDUM CHMHILL Review of Environmental Impacts, Copper Valley Intertie and Alternatives PREPARED FOR: Dennis McCrohan/ AIDEA PREPARED BY: Dave Gray DATE: January 22, 1996 Summary This discussion reviews the comparative environmental impactsiof the proposed transniis- sion intertie between Sutton and Glennaiien and a number of potential alternatives. Five project alternatives and a no action alternative are included, The project alternatives ace: * Intertie New Diesel (upgraded diesel units in Glennallen and Valdez) Hydroelectric generation at Silver Lake with supplemental diesel generation Hydroelectric generation at Allison Lake with supplemental diesel generation Coal-fired generation at Valdez Each alternative is discussed in terms of its relative impacts ona number of elements offthe environment, as defined by the National Environmental Policy Act (NEPA). Elements cov- ered in this discussion include visual quality, economics, protected habitats and species, water quality, air quality, cultural resources, and social/recreational impacts. Table 1 pro- vides a summary of potential impacts by alternative and element. The information compiled here is drawn from three main sources: Volume 2 of the April 1994 Copper Valley Intertie Feasibility Study, the 1992 Allison Lake Reconnaissance Study, and public comment in response to the 1995 update to the Copper Valley Intertie Feasibility Study, The first two sources are the only documents that have focused Zz specifically on the impacts of the intertie and alternatives. Where existing documents provided little or no information on specific categories of impact (for example, economic and cultural resource issues), professional judgment and public comment on the project were used in determining potential impacts and issues of concern. Both of the studies done to date were based on conceptual project designs and limited, if any, study-area reconnaissance. The preliminary nature of the information available makes it impossible to identify environmental “fatal flaws” at this time, However, a number of potentially significant impacts can be identified that could substantially affect the feasibility of each of the alternatives as they are further developed. One likely outcome of any of the alternatives is litigation over environmental and/or social impacts. While public comment from the Matanuska Valley indicates that the visual impacts of the intertie would be a primary target for such litigation, others are likely to challenge a decision not to build the intertie, Although not in itself a fatal flaw, litigation 1002C112.00C 1 117526.C0.10 2B'd 28rH Wdd£:9 GE6T ‘ec NUL 8668 T9S 246 201 Y3S-TNIH WZHD:WOsS JHN 22, 1YY6 bear RUM? CHEM HILL-SER ue Yd" Sol BIN RUM: CH2M HILL-SEA tu: 987 S61 B9yE JAN 22, 1996 IU? yu? S61 ByYY Wore te lo dob Taouc 1 ‘ tives, Comparative Impacts of Sutton-Glenallen Intertie and Attemal Resourceissuo No Action raat oa asi a ani Be sl — Allison Lake Valdez Coal Significant impact on Matanuska ‘otential for minor cle ws resulling from 7 x Visual Quality No knpect Valloy por 1994 foasibility study; D \_ feservolr creation and construction Cron in views £08 mene fps Piegbagala m eneraeey fe © Pottlons of intortie would bo visible of ganorating facilities; no known | 8h ae von Gulch; no plume; potential for significant im- \O trom Lake Loulso Road, tralt eys- aonakive viewer groups in site known eenative dower groups \0) pacts ol mine se in Matenuoke tems, and recreation areas And vicinity ‘allected Valley, Including effects of coal stor- could affect sensitive viewer groups age and’ truck, rail, and barge it potential posith 1 z ft a ' Potential for negative impacts on ‘otential posilive and negative ef- See New Diesel alternative o oerpap i end leaep eayh tourist-orionted businesses in Mata- fects on CVEA sorvice area eco- See Now Diesel aternative 5 poadase dy ieanely reich aes ska Valley due to visual quality nomic development relative to i r cost and supply Iesues changes intortio . Bons come Hicaxie bos: long-form) negative effects on tourlsnv recrea- \ tlon In immediate mine aroa Potential for impacts on moose, —_Little impact > Lore onal or wit, eng ou {o Stver Lake, with potential Simpacts of mining on nearby habitat stod Spocies No impact A caribou, Dall sheep, trumpeter swen, productive goat and bear habilal, {impacts on bear, gost, woll, have not beon studied, but could be bald oaglos, and salmonid species during filling of reservoir; potential oyvating, and other species; pro- significant : rosulting {rom intortio's proximity to Impacie on plok and chum salmon in 00444 minimum instream o important habitat areas and from in- Duck River from changes In stream viremonts may be Insufficient to creased hunting access flow bore pink as, chum ealmon populations; effects of Alison Lake water turbidity on hatchery produc- 5, tion are @ potential concem Erosion/souimontation during Intertie 1994 study rated water quality im- —_ Effects of streamflow changos on 7 vrocnouany No impact 2D construction and as long-term pacts of diesel genoration as existing water quality have not boon ie Ration fay Ga wr None 5 eres of OLal Geneipaah na reoomion impact of access roads could affect medium analyzod, bul could be significant; | i Impacts of mining operation havo not noarby stroams; 1994 study rated tects of potential submarine cable been studied, but could be signiti- wator quality impacts of natural gas construction should also be oxplored cant goneration in CEA or MLP service area as low, . 5 ” 1 diese! with 2natucal gas generation would tosult Impacts of diesel generation rated -“ Supplemental diesel generation 6 Similar to Silver Lake, that Dratsred-ted technology would re- Air Quality Selarmsbegt ie fe bot rersoly af!" 80me emission of pollutants, pri- high in 1994 study, with potentially would have similar emission typos to o.oo) supplomunston ond resulting saan a taloor S01 anid HHO. omniaalnns Werye Geasal ea ‘marily NO.; however, pollutant significant emissions of sulfur ox- those described for Now Diosel al- ‘emissions would be somewhat than traditional coal plants; however, emissions from diesel generation in ides, NOs, and COs; control technol. ternative, but overall reduced rell- hey Impacts rated high in 1994 study due CVEA sorvice area would bo signill- ogy could result in lowar emissions —_&NC® On diesel could result In net to lack of spocitic plant information cantly reduced than No Action allernativo emission reductions for service area and potential for emissions plume to atteot Class | alrsheds 7 Significant potential for archaeologi- \ Potential impact limited to area of Cpotentia for inundation of cultural Costar 0 Silver Lake, though im- Campnct limited for generating facility, Culiural Resources No impact cal sites and disruption of resource- _generaling facilities tesource sites; record search and/or based Native activities; 1994 study eurvey are not known to have oc. aciasnel be lass beneuse ne and i pee the prenoecd care” identilied recorded sites, but consul- curred; current Native fishing and Ing area . resource activities, if any, have not tation with Native corporations on. been ducumented current activitios would be required fo assess full extent of potential Impacts 27 SEN1002C124 DOS Vve2n5, j ere “ARNON NCA seen as Sess 2? 38 ReVieW OF ENVIRONMENTAL IMPACTS, COPPER VALLEY INTERTIE AND ALTERNATIVES could cause sufficient delay to render a project effectively infeasible. Other areas with the potential to cause project delay or require substantial mitigation include: ¢ FERC licensing requirements related to instream flow for the two hydroelectric alternatives « Identificatior. of endangered species and their habitats in the intertie or hydroelectric project areas ¢ Identification of significant cultural resources ai or near any of the proposed sites ¢ Federal requirements for air pollution control technology under the Prevention of Sig- nificant Deterioration (PSD) program, which would likely apply to the Valdez coal alternative ard possibly to the new diesel generation alternative During public comment on the intertie project, a number of commenters expressed concern about the potential effects of electromagnetic fields ‘“EMF) on public health in communities near the transmission line. As described in the 1994 Feasibility Study, current research has not shown a caus il relationship between EMF and «ny specific disease, and EMF levels outside the projert’s right-of-way are expected to he minimal. However, to address public concerns, route a'ignments were cited at least 600 feet from all occupied structures when- ever possible. eltshould be noted that the majority of the available environmental data has been developed for the intertie project, and thus the impacts of that project can be discussed in greater detail (© thansthe impacts of the alternativés. However, each of the alternatives also has the poten- tial for significant adverse impacts on the natural and built environments. If power generation alternatives are investigated further as a result of the state feasibility determination, it should be done on the basis of consistent levels of data for each snare per) studied to allow for an objective comparison of the options. Ultimately, the preferred and secondary alternatives will be analyzed in detail during the NEPA process. ‘The analysis would include all the elements of the environment discussed here, and potentially others identified during the EIS scoping process. Visual Quality No Action Alternative This alternative would entail the continued use of the existing CVEA diesel generation fa- cilities in the Glennallen and Valdez areas. No visual quality impacts are associated with this alternative. Intertie The Copper Valley Intertie Feasibility Study provided a preliminary assessment of the vis- ual impacts of alternative intertie routes through the Matanuska Valley. ‘The overall poten- tial for visual impacts was determined to be high. Few residences would be aff siting was generally designed to minimize visibility from the Glenn Highway. However, recreational users of areas through which the line was routed would be affected by the presence of structural elements in a largely undisturbed landscape. Transmission line- 1002€112,00¢C 3 pO'd 2@8bH WdBE:9 Y66T ‘eZ NUL 8668 TSS 2486 :0L bSS-TIIH WZHD:WOsS REVIEW OF ENVIRONMENTAL IMPACTS, COPPER VALLEY INTERTIE AND ALTERNATIVES. structures and access roads in any of the largely barren drainages in the Talkeetna Mountains would cause high visual contrasts and would be difficult to screen because of the lack of forest cover! Specific areas of likely impact would include Lake Louise Road, which serves as the sole access to the Lake Louise recreation area, and portlons of the Chickaloon-Knik-Nelchina Trail system, Potential adverse impacts on private property could occur along the Glenn Highway fzom Cascade Creek to Hicks Creek. The ® northernmost of the two alignments studied would have fewer visual impacts overall than» the southern, but still would be visible from some locations on the Glenn Highway and toy backcountry users in a number of areas! As described in later sections of this document, a primary concern of area residents is the effect of changes in visual quality on the local economy, which is largely based on tourism- related services that depend on the scenic quality of the environment. The 1994 study recommended a more definitive visual impact analysis that included field verification of sight distances from the Glenn Highway, recreation areas, and lodges. Mitigation for visual impacts would be based on the findings of such an analysis and would likely include changes in the alignment to provide screening from areas of sensitive viewer concentration, as well as potential changes in materials, colors, and structural configuration of the line itself, New Diesel This alternative would involve the retrofit of existing diesel facilities and/or the construc- tion of new facilities to replace aging equipment in both Glennallen and Valdez. Because transmission of power would take place through CVEA's existing intertie between the two cities, visual quality impacts would be localized to the immediate vicinity of the generating plants. To the extent that upgrades were accomplished by retrofitting of existing facilities, impacts would be minimal. New facilities would pose the potential for impacts, although such impacts would presumably be mitigated by siting the facilities in a location removed from sensitive viewer groups. There is also the potential for diesel emissions to cause a visible “ice fog” in the plant vicinity under certain atmospheric conditions (e.g., winter air inversions) in which dispersion of emissions is limited. Silver Lake This alternative would involve the construction of a dam and hydroelectric generating fa- cilities at Silver Lake, located approximately 15 miles southwest of Valdez. The lake is rela- tively remote and currently is accessible only by air or water. Construction of the dam would raise the level of the lake by up to 125 feet, and the powerhouse and other generat- ing facilities would alter the undeveloped character of the landscape. However, the lack of significant human use of the area would minimize the project's visual effects on sensitive viewer groups. Visual impacts of new or upgraded diesel facilities to supplement and back up Silver Lake generation would be as described above for the new diesel alternative. Allison Lake The Allison Lake project would involve the generation of hydroelectric energy at Allison Lake, located west of the Solomon Gulch reservoir, and diversion of water through a pipe- line or tunnel to provide additional firm generating capacity at Solomon Gulch. The project area is owned by the State of Alaska and managed by the Alaska Department of Natural 1002€112.00C 4 SO'd 2BbH Wd6E:9 SEET ‘22 Not g66s 19S 2486 :0L ¥SS-TIH W2ZHD :WOsS FEYENY OF ENVIRONK ENTAL IMPACTS, COPPER VALLEY INTERTIE AND ALTERNATIVES Resour -es. Drawdown of Allison Lake by up to 109 feet and the deposition of tailings from the tunnel could cause impacts on the visual quality of the natural landscape; however, both the lake and the Solomon G.ilch Reservoir can only be viewed by air, and these effects would not be visible to the general public, Mitigation, if necessary, could be accomplished through the revegetation of affec:ed areas. Visual impacts of new or upgraded diesel facili- ties to supplement and back up Allisori Lake generation would be as described above for the New Diesel alternative. Valdez Coal This alternative would use fluidized-bed combusticn technology to generate 22 MW of power in Valdez. In addition to elsctrical generation, steam from the plant would be used for heating of public facilities. Because the plant weuld presumably be sited in an industrial area, effects on sensitive viewer groups were assur. ed to be low in the 1994 study. How- ever, the potential exists for an emissions plume fre m the facility, containing sulfur oxides, nitrogen oxides, and particulates (see Air Quality below), that could affect scenic vistas in nearby viewsheds, Additional inforniation would need to be obtained on the proposed site, process, and area meteorology to determine the true extent of the potential impact. The other potentially significant visual quality impact associated with this alternative is the project proponent’s proposal for development of a mine site in the Matanuska Valley to supply the required coal, ‘The level of impact would depend on the surrounding land uses; the proximity and accessibility of the mine site to sensitive viewer groups; the type of min- ing operation proposed (i.e., surface versus subsurface); and the areal extent of ground dis- turbance, processing operations, and the like. Because of the scenic qualities of the valley and the importance of these qualities to users of the area, the potential for visual impacts is high and is directly correlated to the intensity of the proposed mining activities, Impacts could also occur as a result of coal storage and transportation by truck, rail, and barge. The route currently envisioned is truck transport to Palmer with transfer to rail car between Palmer and Whittier, then via barge to Valdez. Economics No Action Alternative Public comment from the CVEA service area and discussion in the Feasibility Study and Feasibility Study Update indicate that the cost and reliability of electrical energy are impor- tant factors in the economic viability of communities served by CVEA@ the utility is cur- rently isolated from the regional grid, and must provide redundant generation capabilities in Glennallen and Valdez because of the potential for transmission failures between the two load centers. This self-sufficiency increases the cost of power to customers as well as the lo- cal and regional impacts of generation. Although the area is poised for economic develop- ment, power cost and reliability issues may tend to discourage such development, as indicated in public comments included in Volume 3 c‘ the 1994 Feasibility Study and made by representatives of affected recreational businesses during public meetings in December 1995. CVEA and local business groups believe that future growth in the area would be hin- dered if sole reliance on local generation resources were to continue, and that the availabil- 1002€112.D0C 6 90'd 28rH Wd@r:9 S6GT ‘22 NUL Ges8 T9S 486 :0L YSS-THIH WZHO :WOus REVIEW OF ENVIRONMENTAL IMPACTS, COPPER VALLEY INTERTIE AND ALTERNATIVES. ity of cost-effective Railbelt power provided by the intertie would facilitate beneficial economic development, Reseed cee ree been, No studies have been done to quantify the potential effects of alternative generation and ey transmission scenarios on the economy of the CVEA service area, Such studies would re- quire examination of existing development plans and proposals for the area, an overall as- sessment of economic development potential, and an analysis of the sensitivity of potential development to power cost and reliability issues. The potential adverse effects of the intez- tie on the economy of Matanuska Valley communities, as discussed below, would also ne=d to be considered in the analysis. Intertie The intertie could have both positive arid negative effects, Construction of the intertie, as discussed in Volume 2 of the 1994 Feasibility Study, could result in significant local em- ployment opportunities for Matanuska Valley Resicients and increased revenue for are service businesses (¢.g., restaurants and lodging). Tese effects would be limited in duration to the construction period. Long-term positive economic effects on the CVEA service area would also be realize-! through the ava‘lability of plentiful, reli cost power from the regional grid. As discussed under the No Action Alternative, the existing. lack of such a supply places limitations on the area’s economic development; with the intertie, business expansion and other development would become more attractive, resulting in the potential for incressed employment opportunities and tax revenues. As noted above, negative long-term economic impacts of the intertie would likely be related in large part to the project's effects on the visual quality of lands used by tourists and ree- reationalists. Public comment on the Feasibility Study and the update indicated that busi- nesses such as guide services and lodges, which form an important part of the economy of Sutton, Chickaloon, and Glacier View, would experience negative impacts because the area's desirability as a tourist destination would decrease. Respondents believed that the visual appearance of the line and its intrusion as a manufactured structure in the natural landscape would detract from the "wilderness experience" sought by backpackers, hunters, and other recreationalists, who consequently would be more likely to seek this experience in an undisturbed area. As with the No Action alternative, no work has been done to quantify the actual likelihood and extent of economic impacts resulting from the presence of the intertie in the Matanuska Valley. This work would need to identify specific businesses and business types likely to be affected because of their nature or location, and would assess relative levels of impact on the basis of recreationalist surveys conducted in relation to similar projects. Depending on the level and quality of data available, the assessment could results in quantitative estimates of potential income and tax losses in the affected communities. New Diesel By providing increased power generation capacity to meet projected needs, the New Diesel alternative would help to support planned economic development in the CVEA service area. However, the full cost of these facilities would be borne by CVEA ratepayers. This could result in power costs high enough to limit the area's overall economic development potential, This issue would need to be explored for ay alternatives that involved continued 1002€112.00¢ 8 28'd @8PH Wd@P:9 EET ‘22 NUL 8668 T9S 286 :0L BAS-TIIH WHO :WOY8S REVIEW OF ENVIRONMENTAL IMPACTS, COPPER VALLEY INTEATIE ANO ALTERNATIVES reliance: on local generating resources without connection to the regional grid. Negative economic effects, if any, would likely bg less than with the No Action Alternative. As with the intertie, construction of new facilities would result in potentially significant temporary opportunities for area workers and over the long term would result in lower operating costs than with no action, Silver Lake Economic effects of generation at Silver Lake would be similar to those described for the New Diesel alternative. Allison Lake Economic effects of generation at Allison Lake would be similar to those described for the New Diesel alternative. Valdez Coal Economic effects of coal-fired generation at Valdez would be similar to those described for the New Diesel alternative. In addition, mining operations near Sutton could provide em- ployment opportunities for area residents, although they might also result in negative ef- fects on nearby businesses oriented toward tourism or recreation. Protected Species and Habitats No Action Alternative No protected species or habitats would be directly affected by the No Action Alternative. Intertie The Matanuska Valley contains significant populations of moose, caribou, Dall sheep, trumpeter swan, and black and brown bear. Bald eagles may also use the area. The align- ment also crosses or passes upstream of 14 anadromous fish streams and traverses 65 miles of wetlands listed in the National \Vetlands Inventory. As discussed in the 1994 Feasibility Study, the intertie would pass through significant habitat of most of the species noted, Po- tential impacts would include removal of mineral licks used by Dall sheep and crossings of moose rutting and calving areas and trumpeter swan nesting areas, Trumpeter swans, in particular, are sensitive to the presence of powerlines and tend to collide with them, result- ing in injury or death. Although the intertie would not physically impede wildlife move- ment, avoidance of the disturbed area could result in changes to existing migration patterns, particularly since a 12-foot-wide wildlife movement corridor parallels much of the proposed alignment. Species sensitive to the presence of humans or manmade structures could tend to change their customary ranges or travel patterns to avoid the intertie area. Increased access to previously undeveloped areas could increase hunting of the existing populations of moose, the Nelchina caritou herd, dall sheep, and brown bears, The inten- sity of any increased hunting would depend on the snecific locations of proposed access roads with respect to these animals’ habitat areas, A¢ ditionalaccess:could enable hunters’ 1002C112,00C t 8B'd ZErH WdTh:9 S66ET ‘22 NUL g668 T9S 286 2:01 WAS-TNIH WZHD :WOYS AEVIEY OF ENVIRONMENTAL IMPACTS, COPPER VALLEY INTERTIE AND ALTERNATIVES from the Anchorage metropolitan area to compete with local residents who use the area for subsistence hunting. Although none of the 14 anadror:ous streams that the intertie would cross or pass upstream of supports large populations of anadromous fish, the 1994 Feasibility Study suggests that even slight effects cn water quality would be detrimental. Such effects could result from erosion into streams cluring the intertie's construction or from erosion of soil from access road during project operations. Mitigation measures for fish and wildlife impacts would include both those required by agencies with jurisdiction (for exmple, federal bald eagle protection requirements and trumpeter swan protection measires specified in the Copper River Basin Area Plan) and those that could cost-effectively | 2 implemented to reduce impacts of concern to valley residents, such as increased pressures on species important to subsistence hunters. Mitiga- tion would need to be based on tl:e relative significance of expected impacts, as determined by calculations of habitat loss and through coordination with resource agencies and other concerned parties (such as hunting guides and subsistence hunters). New Diesel It is assumed that new diesel generation facilities would be sited in an area characterized by industrial development. No impacts on protected species or habitat are anticipated. Silver Lake According to the Allison Lake Reconnaissance Study, Silver Lake and the surrounding area support a sizable goat population and are among the most popular goat hunting areas in Prince William Sound, Black bear habitat in the region is also rated good to excellent, with bear feeding on the salmon that spawn in the area. Deer are few in the area, and waterfowl use is not extensive. The Duck River (Silver Lake’s outlet stream) and the surrounding la- goon area are reported to be one of the mast productive regions in Prince William Sound for pink salmon. Pink salmon escapement has been estimated to average around 51,000 per year. Chum salmon and Dolly Varden are also abundant in the area. Salmon spawning beds have been identified in the Duck River, The Lagoon, Reverse Creek, and a number of other small tributaries in the area. There would be a loss of habitat associated the Silver Lake project due to the raising of the lake elevation by 100 feet, increasing the surface area by about 600 acres. Effects on wildlife habitat have not been studied; what is known is that access and exposure to the region, and therefore potential pressure on animal populations, will be increased with any development in the area, Development of a hydroelectric project at Silver Lake will raise the issue of minimum in- stream flow requirements on the Duck River, which could have an effect on salmon pro- duction in the region. Two potential locations on the river have been identified for the powerhouse, one at elevation 35 and one at elevation 65, The higher elevation site is located above what is reported to be an impassable fish barrier. The lower elevation site is down- stream of the barrier location; however, the project proponent believes that most salmonid spawning in the area takes place not in the Duck River but in Bennett Creek, which flows into the river downstream of the lower powerhouse site. Information is not available to 1002C112.00C 8 68'd 2OrH Wder:9 SE6T ‘22 NUL e668 T9S 2486 :0L ¥SS-TIIH WZHD:WOuS REVIEW OF ENVIRONMENTAL IMPACTS, COPPER VALLEY INTEATIE AND ALTERNATIVES confirm this contention, Further study and coordination with resource agencies would be required to determine the likely effects of either powerhouse location on salmonid habitat in the river system, At certain times, water would be drawn from deep within the reservoir. This water would tend to be colder and would have a lower dissolved oxygen content than the corresponding surface water. How this would affect the fisheries is unknown; however, regulatory safe- guards and design detail modifications would help serve to offset or mitigate these con- cems. Two options are under study to deliver electricity from Silver Lake to Valdez: a 22-mile overhead transmission line, or a 2.2-mile transmussion line connecting to an 18-mile subma- rine cable beneath Prince William Sound. The 22-mile overhead route would have similar potential effects to the intertie in terms of wildlife and habitat, although over a shorter cor- ridor. The submarine cable could result in temporary water quality impacts during con- struction that would have the potential to affect marine life. No cietailed study has been done on the potential impacts of these transmission facilities. Allisen Lake Wildlife species in the Allison Lake area include brown bear, black bear, mountain goat, wolf, wolverine, marten, porcupine, and snowshoe hare. Wildlife surveys conducted by ADFG in 1978 for the Solomon Gulch Hydroelectric Project FIIS indicated that the Solomon Creek drainage provides relatively good habitat for black bear and that the coastal area is prime habitat. The Allison Creek drainage habitat is similar to that of the Solomon drainage and likely supports similar wildlife; according to the 1981 COE Feasibility Report, the most commonly observed mammal near the proposed Allison Creek site is black bear. The closest known bald eagle nests to the site are located near Lowe River, approximately 3 miles from the project area, According to the USFWS, there are no other known endan- gered or threatened species of flora and fauna in the study area, According to the Alaska Department of Fish and Game (ADFG), much intertidal spawning by pink and chum salmon takes place in the sand, gravel, and/or silt fans present at the mouths of many area streams, including Solomon Creek and Allison Creek, Some dis- agreement exists on exactly where spawning occurs; discussions with ADFG for the Allison Lake Reconnaissance Study indicated that spawning may occur as far as 1 mile up Allison Creek, while other sources suggest that spawning occurs 1.5 miles below the outlet of Alli- son Lake, In addition, the 1981 COE Feasibility Report states that spawning occurs only 1/4 mile from the mouth of Allison Creek. As noted above for Silver Lake, reduced flows in Allison Creek during periods of water di- version could affect spawning areas and overall fish populations in the creek. Comments from resource agencies on the Allison Lake Reconnaissance Study indicated concern that minimum instream flow requirements used to estimate generating capacity were not suffi- cient to ensure the viability of fisheries resources. Concern has also been expressed by the Solomon Gulch Hatchery, downstream of the reservoir, that introduction of Allison Lake waters could result in unacceptably high turbidity or the introduction of disease-carrying organisms, However, available data do not support this concern, according to the 1994 Feasibility Study. 1002€112,00C 9 Qt'd 28rt Wder:9 9EGET ‘22 NUL g668 TSS 206 :0L YSS-TNIH WZHD :WOaS Review OF ENVIRONMENTAL IMPACTS, COPPER VALLEY INTERTIE AND ALTERNATIVES Valdez Coal Because the coal generation facility in Valdez is expected to be located in an industrial area, it would not be likely to affect animals or their habitat, However, the proposed mine near Sutton would have the potential to result in adverse effects on these resources. As dis- cussed above under Visual Quality, the ¢xtent of such effects would depend upon the size and location of the mine, the mining methods employed, and other factors. Insufficient in- formation is available to determine the ievel of impact at this time. Water Quality No Action No impacts on water quality would occur as a result of the No Action alternative. Intertie The intertie project would involve electzical generation using natural gas to meet CVEA demand. Natural gas generation would occur within the service area of the Chugach Elec- tric Association (CEA) or Matanuska Light and Power (MLP). The'1994 Feasibility Study evaluated the relative water quality impacts of natural gas and coal generation facilities, over their respective life cycles, calculating these impacts on a basis of quantity per average megawatt per year. The evaluation was based primarily on generic information available‘on the types of generation facilities being evaluated. Natural gas generation assumed for the intertie was concluded, on the basis of thus information, to have a low level of environ- mental effects. Water consumption per average megawatt per year was estimated at 8.4 acre-feet, thermal discharge at 28,800 MMBtu, and total suspended solids at 1,14 tons, Other categories of discharges evaluated were not consistent betwcen the two alternatives and do not lend themselves to a comparative analysis. Water quality effects of the intertie itself would be related to the potential for erosion of soil and other materials into nearby surface waters during project construction and operation. As discussed above under Protected Species and Habitats, even small effects on water quality could affect salmonid species in project-area streams. An estimate of the total acre- age disturbed during construction and the length, location, and composition of access roads would be required to assess the relative significance of potential impacts. Best management practices for erosion control, such as silt fences, temporary sedimentation basins, and timely revegetation of disturbed areas, could be used to minimize the effects of construction on streams. New Diesel The discussion of water quality impacts for diesel generation in the 1994 Feasibility Study did not include quantitative estimates of life-cycle effects. Potential impacts cited included adverse effects of cooling water discharges on biochemical oxygen demand, chemical oxy- gen demand, total suspended and dissolved solids, ammonia, and thermal discharges, which could affect fisheries resources in receiving waters. The overall water quality effects of diesel generation were estimated to be of a medium level. 1002C112.00¢ 10 TT'd @8rt WdePh:9 GE6T ‘22 NUL g66s8 T9¢ 486 :0L BAS-TIIH W2HO :bOuS REVIEW OF ENVIRONMENTAL IMPACTS, COPPER VALLEY INTEATIE AND ALTERNATIVES Silver Lake Water quality impacts on Silver Lake were not specifically discussed in the Allison Lake Re- connaissance Study, Likely sources of potential impact would include erosion and sedimentation during construction and the effects of reduced stream flow on Duck River, particularly the potential for increased summer temperatures and resulting reductions in dissolved oxygen concentrations. Allison Lake Potential water quality impacts of the Allison Lake project would include those described above for Silver Lake. In addition, the effects of mixing Allison Lake and Solomon Gulch Reservoir waters were discussed in the 1994 Feasibility Study. Information collected by the U.S. Army Corps of Engineers in 1979 indicated that Allison Lake water met all state and federal surface water quality standards for physical, chemical, and biological parameters. As noted above, representatives of the Solomon Gulch Hatchery have expressed concen about the potential for disease-causing organisms or unacceptable turbidity in Allison Lake water; however, according to the Feasibility Study, such effects are not anticipated. The impacts of supplemental diesel generation would be as discussed above for the New Diesel alternative, but would occur on 4 smaller scale because the amount of diesel genera- tion required would be less. Valdez Coal Life-cycle water quality effects of coal generation were rated as “medium” in the 1994 Feasibility Study on the basis of generic information for coal-fired facilities. Water con- sumption per average megawatt per year was estimated at 17.4 acre-feet, thermal discharge at 44,200 MMBtu, and total suspended solids at 0.063 ton. Other discharges into receiving waters would include relatively minor amounts of oil and grease, chloride, iron, and cop- per. Air Quality No Action Assuming that current levels of power production were maintained at the existing diesel facilities, air quality would remain similar to existing conditions, It should be noted, how- ever, that the existing facilities likely have higher levels of emissions per kilowatt hour than facilities using newer combustion technology and pollutant controls. Intertie The 1994 Feasibility Study assessed the air quality impacts of the proposed natural gas gen- eration facility in the CEA or MLP service areas as low, based on the clean-burning quality of natural gas combustion turbines. The primary air quality concern would be NOx emis- sions, which tend to be a problem because of high combustion temperatures. NOx emis- sions are typically controlled through the injection of water or steam into the CT combustor, which can reduce emissions by up to 80 percent, ‘The appropriate control technology to safeguard environmental quality is determined during permitting, which 1002C112.00C 1 2T'd ZBPH WdbP:9 SE6T ‘22 NUL 9668 T9S 406 :0L ¥SS-TIIH WZHO:WOus Re Vievy OF ENVIRONMENTAL IMPACTS, COPPER VALLEY INTERTIE AND ALTERNATIVES would be administered by the Alaska Department of Environmental Quality (ADEC). Table 2 shows the Feasibility Study estimates of fuel-cycle air pollutant emissions, based on a GE Frame 7 combined-cycle unit. TABLE 2 Air Quality Impacts of Natural Gas Generation Generation Gas Extraction Transportation (Ib/kWh and Pollutant ({tons/MWiyear) (tons/MW/year) tons/MW/year) Sulfur Oxides 94.600 0.0004 0.0000089 2.80 Oxides of Nitrogen §.630 0.266 0.0011 0.04 Particulates 0.126 0.000064 2.33 Carban Dioxide 0.00032 4,174.00 Volatile Organic Com- 0,00011 pounds ET'd ZBrPH WdeP:9 GEGT ‘22 NUL Source; Copper Valley Intertle Feasibility Study, April 1994, In addition to its relatively low impact on air quality in the area where the natural gas tur- bine is sited, the intertie project would improve air quality in the CVEA service area through reductions in diesel generation and the consequent emissions. These reductions have not been quantified in existing studies of the project. New Diesel Air quality impacts of new diesel facilities in the Copper Valley service area were rated high in the 1994 Feasibility Study, based on similar analyses of alternative sources of generation. Diesel generation would resuit in potentially significant emissions of sulfur oxides, oxides of nitrogen, and carbon dioxide. Mitigation of NOx would be accomplished in the same manner as for natural gas generation; sulfur oxides would be controlled through the use of scrubbers, The level of control required would depend upon estimated emissions levels; any federally designated “criteria pollutant” emission of over 250 tons per year could be subject to the Prevention of Significant Deterioration permitting process, administered by ADEC, which specifies stricter controls to limit emissions. Table 3 shows the Feasibility Study estimates of pollutant emissions during generation in pounds per kilowatt-hour for two models of diesel engines, Emissions associated with resource extraction and transportation are assumed to be the same as for natural gas generation. 1002C112,.00¢ a2) e668 T9¢ 486 :0L ¥3S-TNIH WZHD :WOYs é fev OF ENVIRONMENTAL IMPACTS, COPPER VALLEY INTEATIE ANO ALTERNATIVES TABLE 3 Air Quality Impacts of Diesel Generation Pollutant be R-46 (ib/KWH) CAT 3608 (Ib/kWh) Oxides of Nitragen 0.3800 0.0220 Carbon Monoxide 0.00510 0.0049 Particulates 0.00015 0.0019 Volatile Organic Compounds 0.00098 0.0025 Sulfur Oxides 0.00460 0.0046 Source: Copper Valey Inter e Feasibility Study, April 1994. Silver Lake Air quality impacts associated with the Silver Lake project would be limited to those related to supplemental diesel generation. Suck impacts would be similar to those described above for the New Diesel alternative, but would be proportionately less because of the lower gen- eration requirements, In addition, by reducing the overall need for diesel generation in the CVEA service area, the project would result in reduced emissions from the existing facili- ties, The net effect of the project on diesel emissions in the service area has not been calcu- lated as part of the studies done to date. Allison Lake Impacts for the Allison Lake project would be similar to those for Silver Lake. Because Alli- son Lake’s total hydroelectric generating capacity is lower, however, diesel use and the re- sulting air quality impacts would be higher than for Silver Lake. Valdez Coal As described in the Feasibility Study, the fluidized-bed combustion technology proposed for the Valdez coal project would result in substantially lower NOx and SOx emissions than for conventional coal-fired facilities. However, because no information specific to the pro- posed facility was available, it could not be confirmed that the plant’s emissions plume would not cause adverse effects on nearby Class | airsheds, ‘his uncertainty resulted in the assignment of a high impact rating to the coal facility. Table 4 shows the estimated air emissions per average megawatt per year, based on generic information on the atmospheric fluidized-bed combustion process. 1002C112.00¢ 13 PT'd 28pt WdSP:9 SEET ‘22 NUL 8668 TSC 286 :OL BSBS-—TIIH W2ZHD :-0aS Re vievy OF ENVIRONMENTAL IMPACTS, COPPER VALLEY INTERTIE AND ALTERNATIVES TABLE 4 Air Quality Impacts of Coal Generation Pollutant Mining and Processing Transportation Generation (MYyilysacy (MWlyear) (MWlyear) SOz (tons) § 009 0.14 4.8 NOx (tons) 0.140 0.128 15.3 Particulates (tons) 0.007 4.08 1.6 COz2 (tons) 9,313.0 CO (tons) 0.928 0.189 1.54 Fugitive Dust (tons) 0.20 12.0 Heavy Metals (Ib) 2.8 Radium 226 (curies) 0.000004 Methane (tons) 7.01 Source: Copper Valley Intertie Feasibility Study. April 1994, Cultural Resources No Action No impacts on cultural resources would result from the No Action alternative, Intertie Although the Matanuska Valley Moose Range (MVMR) had not been completely surveyed for cultural resources as of the publication of the 1994 Feasibility Study, the Alaska Heritage Resources Survey had.recorded eleven cultural resources within the MVMR at that time,’ including Native grave sites, bridges, arid mines. Numerous abandoned mines are present in the MVMR, including the National Register of Historic Places-eligible Eska Mine. The MVMR Management Plan lists the Chickaloon River Trail, the Chickaloon-Knik-Nelchina Trail, the Boulder Creek Trail, and the Old 98 Trail as trails with historical value. Areas with a high potential for cultural value are present along the southern portion of the Kings River, the Chickaloon River and Boulder Creek. As of 1993, the Matanuska-Susitna Bor- ough had a federal preservation grant to identify and evaluate historic sites on portions of the Chickaloon-Knik-Nelchina Trail. Several Native village corporations own land or have selected land within the project area under the Alaska Native Claims Settlement Act of 1971. The proposed routes pass through lands owned by the Cook Inlet Regional incorporated (CIRI), the Chickaloon Moose Creek’ Native Association (CMCNA), the Tazlina Village Corporation and the Ahtna Regionaly Corporation. At one of the public meetings held in 1993, representatives of the Chickaloon Village Traditional Council stated that their lands were not accurately depicted on a project 1002€112.00C 14 : — HD : WOaS ST'd @8rt WdSh:9 9EET ‘ce NUL gces T9S 286 :0L ¥SS-TIIH We FeYeW OF ENVIRONMENTAL IMPACTS, COPPER VALLEY INTERTIE AND ALTERNATIVES Jand-status map. As of 1993, few if any consultations with tribal stakeholders had been conducted. As noted above, lands in the Matanuska Valley are reported to be in current use for subsistence hunting; presumably some portion of this hunting is done by Native resi- dents, Because of the need for federal permits and land crossing approvals, the project would re- quire compliance with Section 106 of the Historic Preservation Act and related statutes. Dames & Moore, in consultation with «ne State Office of History and Archaeology at a March 1993 agency meeting, determined that the potential transmission line routes hac not been surveyed and that an archaeological survey would need to be done if the project were to proceed to completion. An ethnographic survey may also be required if Native proper- ties are affected. New Diesel The potential for impacts on culturai resources under this alternative would be limited to the discovery of a previously unidentified historic or prehistoric site during construction of diesel generation facilities. Since facilities are assumed to be sited in developed industrial areas, this potential is not considered significant. Silver Lake The potential exists for cultural resource sites to be inundated during filling of the Silver Lake reservoir or disturbed by construction of generating facilities. Available informaticn does not indicate whether records searches or surveys for cultural resources have been completed for the Silver Lake site. It is likely that both would be required for compliance with Section 106 as a prerequisite to obtaining federal licenses for the project. In addition, Native corporations would need to be contacted to discuss the potential for resources and any traditional uses of the area. Allison Lake As with Silver Lake, it is not known whether cultural resource records searches or surveys have been done in conjunction with project proposals. Because the lake would be drawn down rather that dammed, no sites would be inundated; construction of generating facili- ties and/or excavation of the tunnel to Solomon Gulch could encounter previously undis- covered resources. Section 106 compliance would minimize the potential for adverse impacts. Valdez Coal Impacts for the coal-fired generating facility would be similar to those of diesel generation and are expected to be minimal. The mining operation could affect cultural resources and/or current cultural activities of Native people, depending upon its location and extent, Further information would be needed on the proposed mine to determine the actual poten- tial for impacts. $EA/1002C112.D0C 1002C112.00C 18 — :bi0as QTd 28h Wd9P:9 YE6T ‘22 NUL e668 T9S 206 :0L yaS-TNIH W2HD 6 ALASKA INDUSTRIAL DEVELOPMENT AND EXPORT AUTHORITY = ALASKA @E_ ENERGY AUTHORITY 480 WEST TUDOR ANCHORAGE, ALASKA 99503 907 / 561-8050 FAX 907 /561-8998 MEMORANDUM TO: Riley TZ, Bak D FROM: ie ee DATE: August 31, 1995 SUBJECT: | Comments on CEA/CVEA Proposed Agreement The Agreement simply states some general terms for a Power Sales Agreement between CVEA and CEA. It also defines similar terms which both CEA and CVEA agree for a Power Sales Agreement between CVEA and Petro. Star. It provides several critical agreements as follows: vie the 80/20 sharing of supplemental costs between CEA and CVEA. Viel a deferral payment scheme to Petro Star which provides incentive for Petro Star to remain on the system during the interim until Danii is complete. ells integrates CVEA, excluding Solomon Gulch, into the Railbelt rate structure and allows for a future option to include Solomon Gulch. Specific comments are provided below. The items numbered refer to notes on the attachment. Contract Proposal 1. Rates. This clause allows CVEA to participate in the overall Railbelt rate structure, excluding Solomon Gulch, which is covered by the Four Dam Pool structure. It gives CVEA standing in the Railbelt. 2. Net Requirements. This clause sets out the CEA obligation to provide energy to the CVEA, excluding what energy is provided by Solomon Gulch. 3. All Requirements(Option). This option appears to allow Solomon Gulch to be included in the overall Railbelt rate structure at the option of CVEA. This would be beneficial if energy were to be flowing to the Railbelt from Solomon Gulch. 4. Wheeling. I do not understand this clause which states CVEA will provide power to CEA. I would anticipate that CEA would provide energy to CVEA at Glennallen. If this is the intent, it appears that wheeling losses are to CEA’s account which makes sense, particularly if CEA is to Operate and Maintain the line. 5. Point _of Delivery. Delivery at Glennallen makes most sense if CEA is the O&M contractor for the line. Is this their intent? Letter of Understanding |. Page 2. Paragraph 3. The letter names 8 cents per KWH as the trigger point. 2. Page 3. Paragraph 3. The letter provides for Petro Star to sell power which is certain to be uneconomic at the avoided cost levels if the Intertie is built. 3. Page 3. Paragraph. 4. This paragraph memorializes that Petro Star will receive the benefits of the Railbelt rates if the Intertie is built. 4. Page 3. Paragraph 5. This is the “bone to Petro Star”. It says that a deferral payment will be agreed, presumably based on Petro Star cogeneration plant costs, which will be provided to Petro Star during the interim between January 1, 1998 and when the Intertie is complete. Petro Star will want an earlier date since their generation could be on line by the end of 1996. Second, Petro Star may not agree to the basis for calculation of the deferral payment. h:\all\dennis\aidea\cvea 1 CHUGACH ELECTRIC ASSOCIATION, INC. ASSOCIATION, INC. EUGENE N. BJORNSTAD, P.E. General Manager August 30, 1995 Mr. Dennis McCrohan AIDEA 480 West Tudor Anchorage, Alaska 99503 Dear Mr. McCrohan: Chugach and Copper Valley Electric Association (CVEA), have been discussing and negotiating a possible powers sales agreement. Critical to this power sales agreement is the proposed Sutton to Glennallen Intertie. It is our understanding that a report will be completed in the very near future and transmitted to the committee composed of officials from Department of Community and Regional Affairs (DCRA), Department of Natural Resources (DNR) and Alaska Industrial Development and Export Authority (AIDEA). The report will contain a recommendation and new review of the feasibility of the intertie. Chugach and CVEA have also been discussing the future power supply options for Petro Star’s refinery in Valdez. We believe there can be significant progress in the discussions between our utilities and Petro Star, which will strengthen the rationale and need for the intertie. To demonstrate the seriousness of our respective utilities’ interest in entering into a contractual agreement, the outline of principles of a contract and a memorandum of understanding between Chugach and CVEA regarding service to Petro Star and the utilities, are attached for your review and consideration. It is our intent to incorporate more details into a draft agreement which would be submitted to our respective Boards of Directors for approval and then to the Alaska Public Utilities Commission. We respectfully urge consideration of the progress we have made and recommend that the report being finalized support the intertie connection between the consumers of Copper Valley Electric Association and the Anchorage utility grid. Sincerely, re Mlb tt Kip Hoh — Eugene N. Bjornstai Clayton Hurless General Manager General Manager Chugach Electric Association, Inc. Copper Valley Electric Association, Inc. 5601 Minnesota Drive ¢ P.O. Box 196300 * Anchorage, Alaska 99519-6300 Phone 907-563-7494 « FAX 907-562-0027 CONTRACT PROPOSAL between CHUGACH ELECTRIC ASSOCIATION, INC. and the COPPER VALLEY ELECTRIC ASSOCIATION, INC. Parties: Copper Valley Electric Association, Inc. and Chugach Electric Association, Inc. Recitals: © History and Contract Form. @ Intertie Agreements. Agreement: e Sale and Purchase of Electric Power. e@ System Sale (non-designated sources). @ Net Requirements (net of Solomon Gulch, not demand limited). e Net Billing of up to 80% of costs of Sutton-Glennallen Intertie. Term: @ Twenty years, effective upon completion of Sutton-Glennallen Intertie. Rates: @ CVEA subject to demand and energy allocation of costs determined on a “pooled” G&T resource basis. Wholesale power rates as authorized by APUC or successor. POWER SUPPLY PROVISIONS Net Requirements: @ Chugach supplies requirements of CVEA service area (at Glennallen terminus of Sutton-Glennalien line) net of Solomon Gulch generation up to capacity of transmission system east from Sutton. (All Requirements Option): @ CVEA has the option to transition to all requirements and pool Solomon Guich with all other Chugach G&T resources after the average costs of Chugach resources is within a negotiated range of the cost of Solomon Gulch power. CVEA Generation: e CVEA provides power to Chugach, under terms of cooperative agreement exhibit, for emergencies, maintenance or other requirements, from generating resources of CVEA at costs to be determined and delineated by schedule provided to dispatch center. Non-Exclusivity: e CVEA may schedule Solomon Gulch as necessary to meet CVEA loads. All Solomon Gulch output is anticipated to go to CVEA. @ CVEA may generate from own resources during transmission line outages, or if Chugach generation otherwise unavailable. Resale: @ CVEA shall use Chugach-supplied power to serve retail load as ultimate consumers and end-users, and may not resell capacity or energy to others. RATEMAKING PROVISIONS G&T Cost Basis: @ Rates to be based on cost of all G&T resources available to deliver capacity and energy from Chugach G&T system. Up to 80% of the costs of the Sutton-Glennallen Intertie will be pooled and considered a part of the Chugach G&T system. Revenue requirement as determined by APUC or other regulatory authority. Cost of Service: e@ Capacity and Energy rates as determined by traditional or non-traditional methods, including fixed/variable, embedded or marginal cost, subject to approval of APUC or other regulatory authority as may exist. Allocated Demand: e An allocated demand shall be used in the cost of service to determine CVEA's share of capacity costs and will equal to the greater of 1) CVEA's non-coincident peak demand reduced by 70% of the then-current capacity of Solomon Gulch or 2) CVEA's coincident peak demand placed on the Chugach system. Fuel, Purchase Surcharges:e Applies per regulatory actions. Wheeling: © CVEA provides power to Chugach at Glennallen (e.g. net of losses). For Chugach resources or generation provided by third party to CVEA for the Chugach system (e.g., cogenerated power sokd to Chugach or sold to CVEA for assignment to Chugach) requiring wheeling services for ultimate disposition, wheeling terms, conditions and rates to be based on principles, practices and agreements as approved by APUC or other regulatory authority, if any. Capital Credits: @ CVEA eligible for capital credits resulting from purchases on patronage and cost-of-service basis, on an equal basis with other wholesale customers. Regulation: @ By the APUC or other regulatory authority, if any. In the absence of regulatory authority, per the negotiated contract provisions subject to dispute resolution by binding arbitration. BILLING AND PAYMENT Monthly Bills: @ Rendered on or before 10th of month for preceding month usage; delay acceptable when notice given. Payment: e@ Payment by no later than 25th of the month the bill was rendered, unless delayed, but no later than 15 days following receipt of bill. Late payments subject to interest charges. Billing Disputes: @ Disputed amounts paid, with notice of dispute. Dispute resolution to be specified. POWER PLANNING Joint Planning: @ Annually, CVEA and Chugach shall meet to discuss power supply issues, contract modifications, operation and maintenance issues, and other issues at request of either party. Agree to exchange information on matters of power sale and purchase agreement at ail times. Points of Delivery: © Delivery at Glennallen e Add or remove delivery points upon mutual agreement of parties. PROVISIONS RELATING TO ELECTRICAL SERVICE Continuity: @ Chugach agrees to make capacity and energy continuously available, subject to Uncontrollable Forces, in the amount required at all current or future delivery points net of generation from Solomon Gulch. Restoration of Service: @ Chugach agrees to restore service with reasonable best efforts, and provide notice of determination of continuing problems and estimated time to repair. Third Parties: e@ Standard "no third-party beneficiary” clause. Facilities and Equipment: e Both parties agree to maintain facilities in accordance with Prudent Utility Practices to prevent or minimize failures and provide for prompt repair and return to service. Load Characteristics: @ Standard utility and interconnected system terms, including power quality, phase balance limitations, power factor correction, load shedding relay equipment and participation in interconnected system loadshedding schedules. Metering: © Each party responsible for tests, calibration, restoration of commercial accuracy of metering equipment necessary to meet the contract terms. Normal accuracy 1%, adjustments to billing amounts for errors determined in metering since prior test. Legal Matters: (to be delineated) Good Faith Performance Force Majeure (Uncontrollable Forces) Responsibilities of Parties - Emergency and Otherwise Indemnification Arbitration and Legal Proceedings Insurance Provisions Approval Requirements Non-severability Successors and Assigns Assignments to Secured Lenders Rights of Access and Removal Notifications Access to Records and Information Mutual Covenants and Warranties Other Legal Provisions, as required Exhibits: 1) Definitions 2) Points of Delivery 3) Incorporation of Solomon Gulch and transition to All Requirements (CVEA option after certain trigger) 4) Cooperative Agreement - Power Resources 5) Coordination of Operations 7) Opinions of Counsel LETTER OF UNDERSTANDING August 30, 1995 PURPOSE This Letter of Understanding (LOU) is to memorialize the understanding between Chugach Electric Association, Inc. (Chugach) and Copper Valley Electric Association, Inc. (CVEA) relative to the purchase by Petro Star and the sale by CVEA of the electric power requirement of Petro Star’s Valdez oil refinery. PARTIES PETRO STAR Petro Star owns and operates a 30,000 barrel per day oil refinery located on Dayville Road near Valdez, Alaska. Petro Star is owned by Arctic Slope Regional Corporation and Harbor Enterprises, a.k.a. Petro Marine Services. CVEA CVEA is a member-owned electric cooperative that provides central station electric service to the Valdez and Copper Basin areas of the state of Alaska. CVEA is the power supplier for all of Petro Star’s requirements in accordance with a five-year power sales agreement executed May 2, 1992. The effective date of the five year term began on January 1, 1993, and will expire December 31, 1997. CHUGACH Chugach is a member-owned electric cooperative headquartered in Anchorage, Alaska. Chugach is Alaska’s largest Generation, Transmission (G&T), and Distribution utility. Chugach is the prospective future power supplier to CVEA subsequent to the construction of the proposed Sutton to Glennallen 138 kv Transmission Line (SGL) which will interconnect CVEA’s isolated system to the integrated Railbelt G&T system. HISTORICAL SUMMARY CVEA is proposing to construct a 138 kv transmission line from Sutton to Glennallen to provide for its supplementary power requirement to the Solomon Gulch Hydroelectric project. The Alaska Legislature, 1993, authorized and appropriated, subject to an independent feasibility study to be conducted by the State’s Energy Authority, $35 million from the Railbelt energy reserve fund to be used as a 50 year, zero interest loan to CVEA as partial funding for the project. Letter of Understanding August 30, 1995 Page 2 The Legislature also authorized the Alaska Industrial Development and Export Authority (AIDEA) to issue up to $25 million of bonds to provide for the balance of the funding. The Department of Community and Regional Affairs’ (DCRA) Division of Energy (DOE), successor to the Alaska Energy Authority, completed the feasibility study in April of 1994. In July 1994 the Commissioner of DCRA found the project could be financed and was economically feasible. Petro Star and CVEA entered into a power sales/purchase agreement on May 2, 1992, that provides Petro Star will purchase all of its electric power requirements from CVEA for a period of five years. The five-year period would begin on the date of full-time refinery operation. To date, Petro Star’s monthly peak demand has varied from 1600 kw to 1920 kw. Petro Star is currently planning an expansion to approximately 50,000 barrels per day. The schedule for the expansion is uncertain at this time. Subsequent to the expansion Petro Star’s peak demand is expected to be at least 2500 kw. In November of 1994 Petro Star notified CVEA that is was considering the installation of one and possibly two 3.9 mw combustion turbines to generate its own power and wanted to discuss the possibility of selling the excess to CVEA to displace its existing diesel generation. By utilizing the exhaust gas in the crude heater, Petro Star believes it could substantially reduce the Refinery’s cost of power. Petro Star has essentially completed the necessary engineering studies for the project but has delayed the final decision, pending further internal review and the results of discussions between Petro Star and CVEA relative to an effort to identify a method to reduce Petro Star’s rates in the interim period until the transmission line is completed. If a method can be identified and implemented to lower Petro Star’s rate to approximately 8 cents kwh, it would displace Petro Star’s need to install the turbine or turbines. In May of 1995 Governor Tony Knowles appointed an Interagency Review Panel (IRP) to review the SGL feasibility study. The panel is chaired by and consists of the Commissioner of DCRA, the Executive Director of AIDEA, and the Commissioner of the Department of Natural Resources (DNR). The IRP retained CH2M Hill to perform the review to assist in making their determination whether or not the project is still feasible. The review process is in the final stage of completion. There has been considerable discussion between the parties relative to the significance of Petro Star’s final decision and whether or not their load would remain on CVEA’s system. Since late 1993 Chugach and CVEA have had ongoing discussions of a participatory agreement embodied in a power sales/purchase agreement that would involve Chugach in the ownership and operation of the SGL. Such an agreement would include Chugach delivering power to CVEA’s Pump Station 11 substation at or near the same price for capacity and energy that Chugach charges its other wholesale customers. Those discussions have resulted in the July 1995 decisions of both the Chugach and CVEA Boards of Directors to pass strong companion resolutions authorizing their management staffs to enter into substantive negotiations. Chugach Letter of Understanding August 30, 1995 Page 3 and CVEA are currently negotiating the terms and conditions of a contemplated power sales/purchase agreement that would initially provide for all of CVEA’s power requirements supplemental to the production capability of the State-owned Solomon Gulch Hydroelectric project. Chugach has recently proposed an outline to establish basic principles and provisions of a contractual agreement under which 80% of the net cost to the utility of owning and operating the SGL would be included in Chugach’s overall G&T system costs. Chugach’s other wholesale customers would have the choice of opting in or opting out of their share of the benefits and burdens of the CVEA sale. CVEA would be responsible for the 20% balance of the costs. Preliminary calculations indicate such an arrangement could deliver benefits to both CVEA and Chugach over a period of years. Petro Star’s final decision could impact this conceptual arrangement. UNDERSTANDING CVEA and Petro Star currently have a contract under which CVEA is obligated to sell and Petro Star is obligated to buy, power to meet Petro Star’s electric power load requirements. That contract expires in 1997. Petro Star is investigating whether to install its own generation equipment to meet its load requirements, and potentially to produce excess power for sale to others, after that date. Under proposals that CVEA and Chugach have recently made to Petro Star, however, if the SGL is built it might be less expensive for Petro Star to purchase from CVEA electric power generated by Chugach and transmitted to Petro star’s facilities over the SGL and CVEA’s system. Alternatively, if Petro Star ultimately decided to install its own generation, construction of the SGL could still potentially benefit Petro Star by allowing Petro Star to have access to the entire Railbelt energy market for purposes of selling any excess power. Because construction of the SGL may produce these potential power purchase and power sales benefits, Petro Star may conclude that, so long as construction of the SGL remains viable, Petro Star should defer making any irrevocable commitment to install its own generation. In return for assurance that Petro Star would defer such a commitment, Chugach and CVEA have stated their willingness to make rates for power delivered to Petro Star over the SGL, in accordance with the alternatives that Chugach and CVEA have presented to Petro Star (or other mutually acceptable alternatives that reduce Petro Star’s power costs). CVEA and Chugach have also agreed that if the SGL is under construction but not completed by January 1, 1998, and if Petro Star has not committed itself to install its own generation by that time, then, in return for Petro Star’s continuing to await completion of the SGL rather than installing its own generation, the two utilities and Petro Star will negotiate in good faith in an effort to agree upon reasonable “co-generation deferral” payments by one or both of the utilities to Petro Star to help cover any net excess of Petro Star’s power costs over the co-generation Letter of Understanding August 30, 1995 Page 4 alternative during the period between January 1, 1998, and the date of completion of the SGL. COST ACCOUNTING To ensure a fair and equitable comparison of costs to effect the project’s generation termination when power is available from CVEA via the intertie that is competitive with the project’s cost, it would be imperative that the accounting methods used by Petro Star for the calculation of the cost of generation for the cogeneration project be compatible with standard utility accounting procedures in order to assure that such an equitable comparison can be achieved, the parties will agree, prior to the construction of the Petro Star cogeneration project, to the accounting method or system to be applied. AGREEMENT It is agreed by the parties that by signing this letter, there is an agreement that an understanding is established as set out in the preceding paragraphs. If CVEA decides not to construct the SGL, Petro Star would be notified at the earliest practical date and would be released from the provisions of the agreement. COPPER VALLEY ELECTRIC ASSOCIATION, INC. CHUGACH ELECTRIC ASSOCIATION, INC. A) 11/08/95 5:07 PM Copper Valley Intertie Briefing I Introduction A. 1993 Legislation. 1) $35 million 50 year zero interest loan for construction of intertie. 2) purpose to hold down energy costs and expand Railbelt. 3) contingent on completion of feasibility study and plan of finance satisfactory to DCRA. B. 1994 Copper Valley intertie feasibility study and plan of finance. 1) 1994 Beck Feasibility Study found intertie feasible. 2) DCRA held 15 public meetings throughout affected area. 3) Gov. Hickel’s commissioner of DCRA loan jn July,1995,) Il. Changed Conditions A. Changed conditions leading Governor to appoint working group. 1) Long-term future of trans-Alaska pipeline. 2) Power demand and cogeneration options for Petro Star. 3) Future options for the trans-Alaska Gas System. 4) Cogeneration and possible power purchase by Alyeska Marine Terminal. 5) Oil price changes (added by the committee). 6) Power sales from Railbelt utilities (added by the committee). B. Members 1) Riley Snell--AIDEA 2) John Shively--DNR 3)Mike Irwin--DCRA 4) Kurt Parkan--DOT&PF C. Scope 1) update economic feasibility; do not consider other factors such as --environment. --scenic issues. 2) determine if intertie still feasible under changed conditions. 3) forward findings and make recommendations to DCRA. D. AIDEA contracted with CH2M Hill for update.. Il. CH2M Hill Analysis A. Power Supply Options. 1) 1994 Intertie Study e all diesel ¢ — intertie e = Allison Lake ¢ Solomon Gulch e Silver Lake e Valdez Coal ( * conservation ‘ otonly. bin faclou 2) Additional options * Q Vou ¢ Petro Star cogeneration e Alyeska cogeneration ¢ CVEA modified diesel configuration 3) Assumptions e RW Beck 1994 study -fuel -forecast models--throw out high and low 4) Process e Data used from 1994 study updated for documented changes. ¢ Meetings or discussions with all interested industrial parties. e Analysis -Resource cost standpoint. -Ratepayer cost standpoint. B. Findings Resource Cost IV. 1) The Intertie and All Diesel alternatives are both viable from a resource cost standpoint assuming medium-low to medium-high load growth and system designs specified in the 1994 Intertie Study. 2) The economics of the Intertie are dependent upon continued load growth. 3) The benefit-cost ratio for the Intertie would be about the same as that for a modified version of the All Diesel alternative defined in CVEA’s 1995 Power Supply Study. 4) The economics of Alyeska or Petro Star generating power for sale to CVEA diminish substantially once the Intertie is constructed. 5) Since completion of the 1994 Intertie Study, the forecast for the Trans-Alaska Gas System (TAGS) that affects the outlook for CVEA loads is unchanged. 6) Silver Lake and Valdez Coal alternatives are more costly than the All Diesel and Intertie alternatives under all scenarios tested. 7) The discount rate used in the analysis has a significant impact on these findings. Ratepayer 1) Primarily because of the $35 million loan for the Intertie, CVEA’s cost of power would be lowest with the Intertie alternative assuming load growth, system designs, and ownership arrangements outlined in the 1994 Intertie Study. 2) CVEA cost of power with the Intertie increases if CVEA loads decrease and decreases if CVEA loads increase. 3) CVEA cost of power with the Intertie is also the lowest when the Modified 1995 All Diesel alternative is included in the comparison. 4) If CEA and CVEA reach a power sales agreement whereby costs of the Intertie are shared between CEA and CVEA, CVEA is assured of lower rates than with the All Diesel alternative regardless of its configuration. 5) Ifthe Intertie is built, the risk of a CVEA rate increase resulting from the loss of Petro Star as a customer of CVEA is significantly reduced assuming the 80/20 Integrated Intertie alternative. 6) Even assuming the $35 million loan could be reauthorized to be made available for construction of the Allison Lake Project, the cost of power associated with this alternative is significantly higher than that for the Intertie. Working Group Recommendations A. DCRA Commissioner abstained. B. Recommendation--Having considered the CH2M hill study and related information and subject to the pre-conditions set out below, the Working Group is of the opinion that the Intertie and All Diesel alternatives meet minimum requirements for economic feasibility under the 1993 statute. Recommend making loan under certain terms and conditions. C. Pre-conditions and Conditions. 1) Petro Star and CVEA/CEA Agreement (only pre-condition). e tentative agreement reached to keep Petro Star on system. ¢ credit enhancements. 2) CEA/CVEA Agreement. ¢ tentative agreement reached between utility managers for 80/20 sharing of costs. 3) Plan of Finance. ¢ approval by DCRA. 4) Repayment obligations. ¢ must pay back even if intertie is not built. D. Terms and Conditions for use of Phase I Loan Funds. 1) Preliminary Engineering. 2) Route Selection and Land Acquisition. 3) Environmental Studies. 4) Public Involvement and Project Mitigation. 5) Capital Cost Budget and Schedule. 6) Cannot use loan funds for litigation. E. Phase I Milestones. 1) RUS and APUC Approval. ¢ power sales agreement between CEA, CVEA and Petro Star. ¢ power sales and participation agreement between CEA and CVEA. e loan by RUS. 2) Environmental and Other Major Permit Approvals. V. Next Steps A. DCRA Meetings by first week in December. 1) Anchorage 2) Sutton 3) Glennallen 4) Valdez B. Final decision by DCRA Commissioner by mid-December. December 6, 1995 TO Riley ard Randy FROM: Dennis McCrohan SUBJECT: Sutton Public Meetings Sutton Glenallen Intertie The meeting was attended by about 100 people. It appeared that about half who spoke were the same people who spoke in Anchorage. The comment was strongly against the Intertie. 1. There was substantial criticism that the meeting was not a hearing. 2. There were many questions regarding the process. Mike said he would review sending back to the legislature, review quantification of environmental Intertie risks, review capital costs, do a social economic evaluation, and consider delaying his decision. 3. Many people raised the issue that Sutton residents pay taxes and Glenallen does not. 4. A speaker stated that she offered to provide methodology for quantifying evaluation of visual impacts. We reviewed the documents she had and they were guidelines to do a qualitative rating only. 5. There were many criticisms of a special deal for Petro Star. Also criticisms that the Administration should force Alyeska to cogenerate. 6. The Intertie opponents indicated their satisfaction with the meeting they had with the Governor and Mike today and now felt confident the Governor would do the right thing, 7. Several people stated that they would support a compromise solution for Glenallen as long as it was not the Intertie. Others said rates were Glenallen’s problem alone and were neutral as long as Sutton did not have to pay. 8. There were numerous comments about the IBEW undue influence. Also that the IBEW never hired in state workers. Riley Snell eS oe From: Dennis McCrohan To: Randy Simmons; Riley Snell Subject: Sutton Glenallen Date: Thursday, December 07, 1995 9:07AM Paul Fuchs called to discuss the Intertie. He said Yukon Pacific supports the Intertie. First it enhances the local infrastructure to support construction of the gas line and second in the long term it provides an outlet market if generation were considered as part of the pipline development. Generation from the pipline byproducts greatly enhances the pipline feasibility. | described that the Fesibility Update only qualitatively addressed the gas line since the initial operation date was so far in the future. | recommended he discuss this with Mike Irwin and Riley. | briefly described the problems about the loan being specific to the Intertie. He said a similiar problem existed back in the early 1980's with the Cook Inlet development and that legislation was modified with environmental considerations which allowed an evaluation of environmental alternatves to proceed in the conceptual decision phase without presupposing the results of a full EIS which was reuired subsequently. He thought this might be a model if changes were being considered. Page 1 ‘ ALASKA INDUSTRIAL DEVELOPMENT =~ AND EXPORT AUTHORITY = ALASKA @@ ENERGY AUTHORITY 480 WEST TUDOR ANCHORAGE, ALASKA 99503 907 / 561-8050 FAX 907 /561-8998 MEMORANDUM CHAM Hien TO: Tommy G. Heinrich Project Manager II Ce: WA os FROM: Dennis V. mccronS OW ty Stialy Deputy Director - Energy DATE: January 2, 1996 SUBJECT: —Sutton-Glennallen Intertie Feasibility Update CH2M Hill Agreement No. 95-010, NTP4 Attached is CH2M Hill’s invoice for November 1995 services. Payment is recommended. Bases upon discussions with DCRA, we have asked CH2M Hill for a proposal for additional services under this agreement for analysis requested by DCRA as a result of the public hearings. | will provide a copy of their proposal when it is received. Please let me know if any additional information is needed. Attachment ve: Ghee KX ° ME engineers ce 9? 1005 gitle Office jcc oe DEC 26 1995 777 108th Avenue NE, Bellevue, WA 98004-5118 CHMHILL Breeton | P.O. Box 91500, Bellevue, WA 98009-2050 MEM scienisis_ Alaska Industrial Developmems.sooo and Export AuthorityAX 206 462-5957 Alaska Industrial Development and Date: December 18, 1995 Export Authority Project No.: 117526.CO 480 West Tudor Road Client Ref. No.: 44639 3014265 Contract No. MM98616PSC Anchorage, Alaska 99503-6690 Invoice No: INVOICE For professional services from November 12 through November 24, 1995, in connection with the Copper Valley Intertie Feasability Study. Professional Services: EC 07 D A Gray 22.0 hrs @ $127.79 $2,811.38 AG 59 J M Szwed 0.5 hrs @ $40.22 $20.11 $2,831.49 Expenses: Communication Charges $41.80 Computers $219.23 Miscellaneous $103.01 Outside Services-Other $312.66 Photocopying $193.00 Postage & Freight $35.50 Reprographics $36.80 Subcontract Service-Other $856.96 $1,798.96 TOTAL AMOUNT DUE THIS INVOICE. .........0 ccc eee eeeee $4,630.45 ipa Ponce —_ K117626.XB8E AND PAYABLE ON RECEIPT OF INVOICE. FINANCE CHARGES WILL BE ASSESSED AT 1% PERCENT PER MONTH (OR MAXIMUM PERMISSIBLE UNDER STATE LAW) ON ALL ACCOUNTS OVERDUE UNLESS STATED OTHERWISE IN OUR CONTRACT. CH2M HILL IS INCORPORATED. STATE OF ALASKA - ALAS? JUSTRIAL DEVELOPMENT AND EXPORT AUTHO NOTICE TO PROCEED AND INVOICE SUMMARY NTP NO: Four(4) AGREEMENT NO: 95-010 PROJECT NO: N/A PROJECT TITLE: Professional Architectural and Multi-Discplined Engineering Services CONTRACTOR: CH2M Hill INSTRUCTIONS AND PAYMENTS EXPLANATION ON REVERSE TICE TO P: (NT IN ACCORDANCE WITH OUR AGREEMENT FOR THE ABOVE PROJECT, PRCVIDE THE FOLLOWING SERVICES (OR SERVICES AS OESCAIBED CN THE FOLLOWING REFERENCED ATTACHMENT):Contractor to provide additional professional services to complete the evaluation process and update of the Copper Vailey Intertie Feasibility study for the Authority, as outlined in Ch2M Hill's letter of November 22, 1995 and Mr. Oennis V. McCrahan’s memorandum dated November 27, 1995. COMPENSATION FOR THE ABOVE SERVICES, 8Y THE METHOD(S) OF PAYMENT SPECIFIED IN CUR AGRE=MENT SHALL NOT EXCE=D: $27,000 ; WHICH INCREASES THE TOTAL AUTHORIZED AMCUNT TO:$107,451.34 ISSUING OFFICER (PROJECT MANAGER) ee MANAGER) rn ( ¥ \\-26-49 prhlgs _ SIGNATURE y, OATE SIGNAT DATE NAME: Tommy G. Heinrich PE. PHONE:(907) 61-8050 NAMEY Fioyd J. Oamron, P.E. © PHONE:(S07) 278-255 ACORESS: 480 West Tudor Road ADORESS: 301 W. Nerhem Lights Bivd. Anchorage, Alaska 99503-6690 Anchorage , Alaska 99503-2562 Ec Aen INVOICE SUMMARY FOR AGREEMENT SEQUENTIAL INVOICE NUMBER FOR THE AGREEMENT: CCNTRACTCR'S INVOICE NUMBER: METH FSAYMENT AUTHORIZED AMOUNT PREVIOUS INVOICES THIS INVOICE TOTALSTODAT= BALANCE FIXED PRICES) $27,000 s UT18,.02 g 4 p30.45 s i 408.475 1S, 59155 UNIT PRICE(S) ‘$ s ls s s nN PERSCNNEL RATES = $ s s $ s DIRECT NCN-SALARY $ s s s $ cosTs NEGOTIATED MARKUP $ s $ s s COST PLUS FIXED FEE $ ' s $ $ s (SALARY) (s (Ss )(s dCs A CSrnae ) (NON-SALARY) (S$ (Ss (s Hons )(s ) (INDIRECT) (s «Ss r(s (Ss (Ss ) (FES) mS (Ss (Ss )(s ds ) TOTALS $27,000 s s =i$ s PAYMENT APPROVED (AUTHORIZED OFFICER) SIGNATURE NAME-William R. Snell PAYMENT RECOMMENDED (PROJECT MANAGER) INFORMATION SIGNATURE REM f2{96 DATE NAME: Tommy G. Heinrich ~ PHONE:(907) 561-8050 NTP/INVOICE AIDEA/AEA PAGE 1 OF 2 JULY 1994 Expense Backup Report TASK NUMBER: C0.2Z TYPE DESCRIPTION: COMMUNICATION CHARGES EXP DATE EMPLOYEE NO FULL NAME 11/17/95 760 GRAY. DAVID A. 11/24/95 760 GRAY. DAVID A. TYPE DESCRIPTION: COMPUTERS EXP DATE EMPLOYEE NO FULL NAME 11/17/95 90040 OSSE, LISA. 9/3/95 4255 PETERSON, CHARLA L. 9/3/95 90694 HAGEN, VICTORIA. 9/22/95 11379 MOORE, JULIANNE N. 9/22/95, 90040 OSSE, LISA. 11/3/95 4057 STEWART. LADONNA C. 11/3/95 5276 MORRIS, MARY . 11/3/95 11379 MOORE, JULIANNE N. 11/3/95 90153 MCKIEMAN, BART . 11/10/95 11379 MOORE, JULIANNE N. 11/10/95 10798 BIGELOW, PATSY Q. 11/10/95 4057 STEWART, LADONNA C. 11/10/95 90153 MCKIEMAN, BART. 9/3/95 42558 PE ON, CHARLA L. 9/3/95 90694 HAGEN, VICTORIA. 9/3/95 4057 STEWART, LADONNA C. TYPE DESCRIPTION: MISCELLANEOUS EXPDATE = EMPLOYEE NO FULL NAME 11/18/95 TYPE DESCRIPTION: OUTSIDE SERVICES-OTHER EXPDATE = EMPLOYEE NO FULL NAME 11/22/95 TYPE DESCRIPTION: PHOTOCOPYING EXP DATE EMPLOYEE NO FULL NAME 11/8/95 90040 LISA. 11/6/95 90040 LISA Standard Invoice-Non Labor Detail Date: 12/13/95 Project Number: 117526 Invoice Number: QUANTITY BILL RATE BILLAMT 10 19 $19.00 12 19 $22.80 Type Subtotal: $41.80 QUANTITY BILL RATE BILLAMT 9.99 8.5 $84.92 2.21 8.5 $18.79 2.43 8.5 $20.66 1.02 8.5 $8.67 19.09 8.5 $162.27 0.65 8.5 $5.53 1.07 8.5 $9.10 1.09 8.5 $9.27 1.65 8.5 $14.03 0.75 8.5 $6.38 0.16 8.5 $1.36 2.55 8.5 $21.68 6.73 8.5 $57.21 2.21 2.8 $6.19 2.43 2.8 $6.80 2 2.8 $5.60 __ Type Subtotal: $438:46 219.83 QUANTITY BILL RATE BILLAMT $103.01 Type Subtotal: $103.01 QUANTITY BILL RATE BILLAMT $303.55 Type Subtotal: $303.55 QUANTITY BILL RATE BILLAMT 1300 0.05 $65.00 2560 0.05 $128.00 Type Subtotal: $193.00 Expense Backup Report POSTAGE & FREIGHT TYPE DESCRIPTION: EXP DATE EMPLOYEE NO FULL NAME 11/8/95 760 GRAY, DAVID A. TYPE DESCRIPTION: REPROGRAPHICS FULL NAME EXP DATE EMPLOYEE NO 11/6/95 90040 11/7/95 90040 11/8/95 90040 TYPE DESCRIPTION: SUBCONTRACT SERVICE-OTHER EXP DATE EMPLOYEE NO FULL NAME 11/18/95 QUANTITY 35.5 QUANTITY 1 0.5 0.8 QUANTITY Date: 12/13/95 Project Number: 117526 Invoice Number: BILL RATE BILLAMT 1 $35.50 Type Subtotal: $35.50 BILL RATE BILLAMT 16 $16.00 16 $8.00 16 $12.80 Type Subtotal: $36.80 BILL RATE BILLAMT $832.00 Type Subtotal: $832.00 $1,984.12 Task Non-Labor total: Standard Invoice-Non Labor Detail Project Non-Labor total: $1,98417— 17S CH2M HILL CH2M HILL - ACCRUAL Project Organization: Project Member: Project Number: Project Name: Customer Name: Billing Contact: Billing Address: Agreement Number: T="9)ice Comment: dice Number: Bill Through Date: Invoice Amount: Employee/ Line Vendor Project Organization: Project Member: Project Number: Project Name: Customer Name: Billing Contact: Billing Address: Anreement Number: dice Comment : anvoice Number: Bill Through Date: Invoice Amount: Employee/ Line Vendor 2 GRAY, DAVID GRAY, DAVID Invoice Line Details NPE10 ENV GRAY, DAVID A. 117526 037420.CO-COPPER VALLEY INTERT ALASKA IND. DEV. & EXPORT Accounts Payable, 6060 S. Willow Drive Greenwood Village, CO US 801115142 037420 14 24-NOV-95 4,630.45 Number Organization Job/Resource Org-Name NPE10 ENV GRAY, DAVID A. 117526 037420.CO-COPPER VALLEY INTERT ALASKA IND. DEV. & EXPORT Accounts Payable, 6060 S. Willow Drive Greenwood Village, CO US 801115142 037420 14 24-NOV-95 4,630.45 Number Organization Job/Resource Org-Name 00760 NPE10 ENV 00760 NPE1O ENV 03.PDC 03.PDC Invoice Review Role Type: Description: Customer Number: | Billing Contribution: Work Site Address: Payment Terms Invoice Status: Credit Of: Invoice Date: AR Invoice Number: Role Type: Description: Customer Number: | Billing Contribution: Work Site Address: Payment Terms Invoice Status: Credit Of: Invoice Date: AR Invoice Number: Type LABOR CO .22 LABOR CO.2Z Task Number Item Date Task Number Item Date Quantity Unit 12-12-1995 09245: Report Date: of 6 Page: 2 PROJECT MANAGER COPPER VALLEY INTERTIE F 044639 100% 6060 S. Willow Drive Greenwood Village, CO US 801115142 DUE ON RECEIPT Approved Bill Rate Bill Amount Quantity Unit PROJECT MANAGER COPPER VALLEY INTERTIE F 044639 100% 6060 S. Willow Drive Greenwood Village, CO US 801115142 DUE ON RECEIPT Approved Bill Rate Bill Amount 17-NOV-95 24-NOV-95 TOT L? 127.079) 1,277.90 1,533.48 2,811.38 10 Hours ‘12 Hours CH2M HILL CH2M HILL - ACCRUAL Invoice Review Report Date: 12-12-1995 09:45 Page: 3 of 6 Project Organization: NPE10 ENV Project Member: GRAY, DAVID A. Role Type: PROJECT MANAGER Project Number: 117526 Description: COPPER VALLEY INTERTIE F Project Name: 037420.CO-COPPER VALLEY INTERT Customer Name: ALASKA IND. DEV. & EXPORT Customer Number: 044639 Billing Contact: Accounts payables Billing Contribution: 100% ; Billing Address: 6060 S. Willow Drive Work Site Address: 6060 S. Willow Drive Greenwood Village, CO US 801115142 Greenwood Village, CO US 801115142 Agreement Number: 037420 Payment Terms DUE ON RECEIPT »ice Comment : Invoice Status: Approved _, Jice Number: 14 Credit Of: Bill Through Date: 24-NOV-95 Invoice Date: Invoice Amount: 4,630.45 AR Invoice Number: ... Employee/ . . Bill | Line Vendor Number Organization Job/Resource Org-Name Type Task Number Item Date Quantity Unit Rate Bill Amount 3 SZWED, JULIE 10056 NPA10 ADMINI 19.PDC LABOR CO.2Z 24-NOV-95 -5 Hours 40.22 20.11 URINAL vvavyv INV OICE Co. Nanie.__C-7 2-77 “ Date: 20% 2 Pm TE no Client; F221 7 EAi7 sto7 aw PO. #226. Mo ZF CoO > S| Address: A XS Shipped Via: 10900 ve ‘aoe 100 - : \ eecion-tocenn | Phoned ~ None Accounting (206) 646-9183 ¢ FAX 646-9591 Black & White BColor Oversize Typesetting Other a 4o 2 Cte A pear 29 Se heer = Zo 4 Celer ng ° 2 4.40 ovr Sil shee : EF é Poy i i 77-26 2 i 00 SENTTO CVA ae Shrink wrap Cutting Lominating —_______| ... FOR Been Drilling Staple Folding ae Cover Comb/Wire-O/Tape Padding Other Collation {On Account J Originals Returned Subtotal | 75.20 Cash Originals on File | -,-~ coe, a 1x | 7.2¢ Net 10th Prox Customer Signature ~ Date Total rn 3sCl D Invoice Date: 11/5/95 wi ON DO NOT PLACE ame: isa Allen Osse 12415 68th Avenue N.E. ON HOLD Kirkland, Washington 98034 (206) 820-7182 This is an invoice for editing and writing services provided to CH2M HILL by Lisa Allen Osse for the period from 10/23/95 through 11/4/95. Contract No. TP-95-0225* Total Amount Due? $2,565.00 LABOR hy Project No. Title of Project Hours Compensation @ $30/Hour 117445.A1 ESC Brochure 32 960.00 113857.30.ZZ Monographs 27.5 825.00 106968.A0.4A Bothell SWDM 15 450.00 117526.C0.ZZ AIDEA 10 300.00 Total Labor 84.5 $2,535.00 SENTTO CVva PARKING NOV 1 3 1995 Project No. FOR PAYMENT — Cost 117445.A1 APPROVED FOR PAYMENT: 11.36 113857.30.ZZ 3 BIE Sa nnn tt 9.76 wows gt eee 520.CU.. ihe a _ [O° co) pate LU BIPS __ rec $30.00 } ;o fe eZ =O VAS * Please mail check to this address. * Final payment due within 30 days of receipt of invoice. Total Parking Expenses grooks &- Associates November 1, 1995 #062 Mr. David A. Gray Director, Energy Economics CHOM HILL DO NOT PLACE P.O. Box 91500 Bellevue, Washington 98009 ON hi CLD Dear Dave: Subject: Invoice for Services AIDEA Project Project No. 117526.CO The following invoice for services is submitted pursuant to our subconsultant agreement, dated April 1994. This invoice covers the period from October 1 through October 31, 1995. The work performed during this period consists of preparation of graphs for CH2M HILL’s report to AIDEA, review of input assumptions for the latest power cost model runs, confirmation of zero imputed interest in the economic model runs, and calculation of levelized costs for all power cost model runs. Billing Summary: 11 hours at $75/hour: $ 825.00 Direct expenses at cost (parking) 00 TOTAL COST 832.00 Please let me know if you have any questions. Thank you. imeerely, = ws ROVED FOR PAYMENT: \ x ° Bob Brooks IS THIS VENDOR A SUBCONTRACTOR YES __3 een De: nt Ad A,2odare NGVL SHS SMa Brooks S- Associates: 17104 Military Road South SeaTac, Washington 98188 Phone/Fax: (206) 246-3151