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Home My WebLink AboutSutton-Glennallan Commissioner Mike Irwin-General Correspondence 1996LAW OFFICES OF KEMPPEL, HUFFMAN AND GINDER {ae A PROFESSIONAL CORPORATION ROGER R. KEMPPEL . SUITE 200 RICHARD R. HUFFMAN PETER C. GINDER irs. 2025 DONALD C. ELLIS 1277-1604 ANDREW J. FIERRO ; i 4 1995 “* BOBBY DEAN SMITH Menta REBECCA C. PAULI i 276-2493 March 11, 1996 COMMISSIONER'S OFFICE COMMUNITY & REGIONAL AFFAIRS earl te: — M * Mike Irwin State of Alaska Department of Community and eet! Ay fb bod) Regional Affairs P.O. Box 112100 Juneau, Alaska 99811-2100 VIA FAX: (907) 465-2948 Re: Sutton-Glennallen Intertie Dear Commissioner Irwin: I am writing as attorney for Copper Valley Electric Association, Inc. (“CVEA”), with respect to your letter of February 9, 1996, requesting additional information concerning recommended preconditions | and 2 from the Interagency Report. It is CVEA’s understanding that this February 9, 1996, letter is not a final agency decision subject to appeal pursuant to the Administrative Procedures Act but is merely a request for additional information. It is further CVEA’s understanding that a “final decision” will be issued in the future. If CVEA is incorrect in this regard, please let me know as soon as possible. Sincerely yours, KEMPPEL, HUFFMAN AND GINDER, P.C. J tt moter by Dean Smith :nbp Ce: Clayton Hurless General Manager, CVEA fs\CVEA\Intertie\3-11-96\f aU LAW OFFICES OF KEMPPEL, HUFFMAN AND GINDER av A PROFESSIONAL CORPORATION ROGER R. KEMPPEL : : SUITE 200 RICHARD R. HUFFMAN PETER C. GINDER ie 2025 DONALD C. ELLIS 1277-1604 FAX Lf 276-2493 ANDREW J. FIERRO BOBBY DEAN SMITH REBECCA C. PAULI March 11, 1996 COMMISSIONER'S OFFICE COMMUNITY & REGIONAL AFFAIRS ce: rans Mike Irwin State of Alaska Department of Community and / Regional Affairs Gy P.O. Box 112100 Juneau, Alaska 99811-2100 VIA FAX: (907) 465-2948 Re: — Sutton-Glennallen Intertie Dear Commissioner Irwin: I am writing as attorney for Copper Valley Electric Association, Inc. (“CVEA”), with respect to your letter of February 9, 1996, requesting additional information concerning recommended preconditions | and 2 from the Interagency Report. It is CVEA’s understanding that this February 9, 1996, letter is not a final agency decision subject to appeal pursuant to the Administrative Procedures Act but is merely a request for additional information. It is further CVEA’s understanding that a “final decision” will be issued in the future. If CVEA is incorrect in this regard, please let me know as soon as possible. Sincerely yours, KEMPPEL, HUFFMAN AND GINDER, P.C. Jet Q Ua eee Bobby Dean Smith :inbp CG: Clayton Hurless General Manager, CVEA fs\CVEA\Intertie\3-11-96\F 3 907 269 4645 DORA/DIV OF ENERGT 08/15/96 13:51 P.002/004 MEMORANDUM STATE OF ALASKA Community and Regional Affairs TO: Mike [rwin DATE: August 1, 1996 Commissioner C THRU: Percy Frisby. ge Director FROM: Richard enh SUBJECT: HAARP Presentation Planner [TV Yesterday | attended a presentation in Gakona on HAARP (High Frequency Active Auroral Research Program) sponsored by Copper Valley Electric Association. CVEA belicves that the likelihood of completing the project is greater now than it was earlier, that the power requirements of the project ure significant, that part or all of these requirements could be served by the Sutton-Glennallen intertie, and that the intertie economics would be substantially improved as a result. The presentation was given by Dr. Robert Jacobsen of Advanced Power Technologies Inc., the firm that is developing the project on contract to the military. The goverament agency administering the funds is Phillips Laboratory located at Hanscom Air Force Base in Massachusetts. The Air Force seems to have the lead role although the Navy also appears to be involved. The basic facts of the project have not changed appreciably since the April 1994 intertie feasibility study was published although the prospects for full funding may have imptoved. Some of these facts are noted below along with brief updates from the presentation: 1. The total project cost is estimated at about $90 million. The initiative for the project comes from Congress with Senator Stevens as the prime mover. A. Roughly three years ago, $22 million was in hand to build the demonstration prototype at Gakona, the site previously selected for the “backscatter radar” project until its Funding was cancelled. B. As of today, about $34 million bas been approved for HAARP and spent. The demonstration prototype has heen essentially completed. Cc. The contractor has been told to expect continuing infusions of $15 million per year in federal funds. The project would be complete in 2002 if that level of funding is in fact made available. 8/15/96 _1:56p ‘ B907 269 4645 Mike Irwin DORA/DIY OF ENERGS 08/15/06 13:51 August 1, 1996 Page 2 2. The annual power requirements are just a little higher than Dr. Jacobsen estimated in the attached letter dated November 1993. (As evidenced by the letterhead, the firm at that time was named ARCO Power Technologies, Inc. It has since been renamed and acquired by Raytheon.) A. The total appears to be about 9 million kWh per year, roughly half the annual kWh requirement that we estimated for the Petro Star refinery. The facility is projected to be operational for about 4 weeks per year although this is broken up into several sessions that would occur throughout the year. About half of HAARP’s annual kWh requirement occurs during the four total weeks that the project is operational. It turns out that the 4-week limit is dictated by the intent to use on-site diesel generators to power the facility, Air quality standards limit the time the diesels are allowed to run. If project power were generated somewhere else and delivered by wire, it is possible that the project would be in operation more often and that power requirements would increase accordingly. The Air Force owns 6 diesel generators that were acquired for the backscatter radar project and presently intends to use these generators to power the HAARP site. However, they still expect to spend $5 million to complete the diesel power plant. They wil] continue on this path unless assured that adequate power will be supplied to them another way (e.g. via the intertie). There are significant technical issues with regard to power supply that will cost money to resolve regardless of the power supply plan. The main issue is that the high energy “pulses” to be produced by the project will require that power be cycled on and off very mpidly. It is not clear at this point what additional expense would be involved to handle this if power were delivered over the intertie. It could be manageable but at this point the cost of doing so should be cousidered a significant unknown. Possibly only part of the demand (e.g. “house loads”) would be practical to serve from the utility grid. I would add the following other points to consider: L. We did not include the completed HAARP project in our load forecast three years ago because we considered future funding of the project to be highly speculative. This was based on two scts of contacts at the time: P.003/004 8/15/96 _1:56p 907 269 4645 DORA/DIV OF ENERGY 08/15/96 13:52 P.004/004 Mike Irwin August 1, 1996 Page 3 A. The Governor's Washington D.C. office. A staff member from the D.C. office looked into it and advised that, although Senator Stevens supported the project, the staff member did not believe it was sufficiently high on the priority list to feel confident about the future funding. At that time, the Democrats controlled Congress and Senator Stevens was in the minority. The political changes that have occurred since then in Congress could mean that the funding prospects for HAARP are much more favorable than before. B. Phillips Lab / U.S. Air Force. Discussion with Mr. John Heckscher, HAARP program manager (617-377-5121) and Mr. John Rasmussen, also from Phillips Lab (617-377-5090) indicated that future HAARP funding was considered a Congressional initiative by the military and that completion of the project, in their judgment at that time, would be considered very speculative. Maybe that has changed now with the shift in political balance — I don’t know. sd Although the HAARP load might he added, it appears that the Petro Star refinery intends to discontinue purchasing power from the utility later this year. An article on this from yesterday's Valdez Star is attached. This would subtract considerably more from the utility load than HAARP would add. | have no idea what offer would be sufficiently attractive to the refinery to coax it back, or whether such an offer could be made if the intertie were built. Our April 1994 feasibility study not only projected that Petro Star would continue purchasing utility power, it also projected that refinery throughput and associated. electrical demand would grow by a substantial amount. Although] don’t have any numbers and haven't tried to obtain them, I was advised yesterday by Dennis McGrohan of AEA that, to his knowledge, the Petro Star operation has not grown since the publication of our 1994 feasibility report. Attachments oe Mary Gilson 8/15/96 1 :56p SrEvi bi: *.onU e-ad-gU sib OAM +) UUY. ULE ILL JUiNCAL? DU/ DOL BYWG,F H/ YO we eu aes mate PHONE: (90?) 465-4700 DEPARTMENT OF COMMUNITY AND ccimmions aeimnsa REGIONAL AFFAIRS O00 W. <THAVENUE, QUITE 220, OFFICE OF THE COMMISSIONER a eee Plese dis cuss v2 Ov February 9, 1996 C O PY oes | #/Sna\\ Mr. Clayton Hurless Copper Valley Electric Association P.O. Box 45 Glennallen, Alaska 99586 STATE OF ALASKA /azz=7- Subject: Sutton-Glennallen Intertie Dear Mr. Hurlass: As you know the Intar-Agency Working Group presented a December 1895 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 recommenced pre-conditions 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 agreament should be between CVEA and CEA or a substantially similar utlity. 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, fam hopeful that your submittal of definitive and binding agreements which implement Recommendations 1 and 2 can be accomplished within 30 fo 45 days. We appreciate your patience and cocperation as the State has worked foward its analysis of whether the Sutton-Glennallen Intertie Project is feasible, and if so, 20d BYB2SSPLOB “ON xv nwaine F191 e2enT aa ne BY om 2-44-00 s4i-00AM » UYV. UEP ILO-JdUNDAL™ yu/ dbl OUUS+F J/ J SENI Ol: Mr. Clayton Murless Subject: Sutton-Glennatien Intertie February 9, 1996 Page 2 how to proceed in a prudent and considered fashion. Please calt if you have any questions, Sincerely, Mike Irwin Commissioner Attachment as stated cc: Mr. Riley Snell, Alaska Industrial Development & Export Authority 0 ‘d Bb6299bL06 ‘ON Xb NwANAr eon C7°Nt ADM ne. bt AT "e .0nU Me wur YUL OUWONF <f STATE OF ALASKA / azz PHONE: (99?) 465-9700 dis coss DEPARTMENT OF COMMUNITY AND FAR!” (07 4052088 REGIONAL AFFAIRS 9 Sewcnain a BUTE 0 OFFIGE OF THE COMMISSIONER ie fanaa 2 ov™ 5 Please February 9, 1996 ~ oes / ¥/Sne\\ (b> ALi S/% 4 Mr. Clayton Hurless Copper Valley Electric Association P.O. Box 46 Glennallen, Alaska 99586 Subject: Sutton-Glennallen Intertie Dear Mr. Hurlass: As you know the Intar-Agency Working Group presented a December 1895 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 recommenced pre-conditions 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, | belleve this joint participation agresament should be between CVEA and CEA or a substantially similar utlity. The Agreernent should be in a binding form approved by each Board, subject anly to APUC approval. Fallowing 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 fo 44 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, 20d ByEZSGPLOB ‘ON ¥¥d nusaine e207 ePeNY AM Ae HT An we ee wee wus, VuuevrT we YY Mr. Clayton Hurless Subject: Sutton-Glennatien tntertie February 9, 1996 Page 2 how to proceed in a prudent and considered fashion. Please calf if you have any questions, Sincerely, Mike Irwin Commissioner Attachment as stated ce: Mr. Riley Snell, Alaska Industrial Development & Export Authority €0‘d Bh6e99L06 “ON Xby NwaNNr eson C7'Nt ATM op bT At