Loading...
HomeMy WebLinkAboutNenana Coal-Fired Electrical Generating Plant Project Assessment, March 1987y Alaska Power Authorit LIBRARY COPY me — i ®} ERA ECTRICAL TING oFIR be OA i “i t AN’ ot NENANA HEAT AND POWER AUTHORITY COAL-FIRED ELECTRICAL GENERATING PLANT PROJECT ASSESSMENT AND PRELIMINARY ENGINEERING WORK PROGRAM PREPARED BY THE CITY OF NENANA ENGINEERING DEPARTMENT With Assistance from Holden Gerken & Associates Fryer Pressley Engineers Robertson Monagle and Estaugh Robinson and Associates John Nuveen & Company Lahmeyer International MARCH 1987 TABLE OF CONTENTS Section 5. 6. PROJECT OVERVIEW 1.1 The Project 1.2 Development/Review of the Present Document PROJECT FEASIBILITY 2.1 Introduction 2.2 Background and Setting for Development 2.3 Railbelt Electrical Energy Supply and Demand 2.4 Markets for Nenana Electrical Power 2.5 Feasibility Conclusions THERMAL PLANT PROCESSES 3.1 Introduction 3.2 Efficiencies in the Conversion of Chemical Energy to Electrical Energy 3.3 Combustion Technologies for Coal-Fired Plants 3.4 Fluidized Bed Boiler Types 3.5 Firing System Conclusions 3.6 Heat Cycle Conclusions PROJECT DESCRIPTION 4.1 Introduction 4.2 Project Facilities and Characteristics 4.3 Project Site 4.4 Project Impacts PROJECT COSTS AND FINANCING 5.1 Introduction 5.2 Fixed Costs 5.3 Non-Fuel Operating Costs 5.4 Fuel Costs 5.5 Cost Summary 5.6 Project Financing Approach Considerations PROJECT SCHEDULE , BUDGET AND ORGANIZATION 6.1 Project Schedule and Budget 6.2 Project Organization 7. PRELIMINARY ENGINEERING WORKPLAN 7.1 Project Management and Control 7.2 Legal/Financial Analysis 7.3 Permits, Impacts and Public Involvement 7.4 Engineering 01 01 02 04 04 07 10 11 12 12 16 19 20 20 ae 22 24 24 26 26 aT Fie) 29) 30 31 32 a2 34 36 40 Table of Contents Continued Appendices Appendix Description Appendix A... ..Inventory Materials Appendix B. "APA. Retirement Schedule BE Ui niiintiieriiiasdisipeesenncentenesinininionamnpiieimmiuaiiianatt Coal Information Appendix D..... Nenana Area Description FE icttarrecccneennineniitiitamengjitenmntanecsnesiiiiiillamninaniniien Project Components Pit TT Rises ..... Project Cost Model/Staffing Plan Appendix G................... iomiteneanccemenapemneenensigiiniblsiiiinscinniasinninnilajinteie Definitions Appendix H Project Review Materials List of Figures Figure/Description : Page System Capacity by Prime Mover Inventory of Railbelt Installed Capacity Mass and Energy Balance for a Coal-Fired Power Plant... ECC ACIGRCY SUTIN E Vcc. cdasecescs este te sesessecotnsonidecttd ss cisnssidasnst gece: Employment Impacts..... Fixed Cost Components Fixed Cost Impacts........ Non-Fuel Operating Costs... Summary of Generation Costs 10. Project Budget and Schedule 11. Project Organization enoe a BO 22 UPN A Re re “4 RVIE ve ih : ; 8 Bids nnn oe x fs CANADA NENANA ° 100 200 300 400 S00MmMi. STATUTE MILES NENANA COAL FIRED ELECTRICAL GENERATING FACILITY MAP 1: PROJECT LOCATION FRYER/PRESSLEY ENGINEERING INC. MARCH 1987 Page 1 1. PROJECT OVERVIEW 1.1 The Project The City of Nenana is constructing a coal-fired, electrical generating plant at the Nenana townsite. The plant will be owned and operated by the Nenana Heat and Power Authority, operating as an independent Agency of City government. Map | which precedes this Section, shows general location of Nenana in Interior Alaska. Map 2 which follows shows the specific location of the City in proximity to major rail, highway, river and utility corridors. The Nenana plant will employ a circulating atmospheric fluidized bed firing system to minimize environmental impacts during operations and to maximize electrical output for the fuel consumed. This plant will have a first phase capacity of approximately 105 megawatts. Power from the plant will contribute to the base load for the Alaska railbelt. The plant will also include the capacity to cogenerate waste heat for use in development of timber and agriculture industries in the area. This waste heat will be sold to the Nenana Port Authority for subsequent resale to timber and agricultural ventures doing business in the Nenana area. The estimated construction cost of the project will be between $160 million and $180 million, or between $1,600 and $1,800 per kilowatt hour. The project will require approximately four years to design and construct and will be in operation in 1991. Power produced at the plant will cost in the range of $.05-$.065 per kilowatt hour, with a likely cost of about $.06 per kilowatt hour at the bus bar (i.e. the point where the power enters the distribution grid). The plant facilities will occupy a total site of about fifty acres, divided between two twenty-five acre sites located on the east and west banks of the Nenana River. The main plant will be located on the west bank of the river, and transportation and coal handling facilities will be located on the east bank. Both parcels are within a mile of the City of Nenana. Facilities located on the overall site will include the following: the power plant building itself a warehouse an administrative building a shop and equipment storage building coal and ash handling conveyors and elevators coal processing facilities a coal storage yard air cooled condenser units a water treatment plant a bag house and stack a switch and transformer yard a bridge across the Nenana River required approach roads and parking areas. Page 2 The grounds surrounding the site will be landscaped to assure proper surface water runoff and for aesthetic purposes. This landscaping will require grading for drainage, planting of grass and other plant materials indigenous to interior Alaska. A railroad spur, rail car storage area, rail car shaker and coal handling facility and ash handling facility will be constructed on the east side of the Nenana River. Coal and ash will be transported between the rail yard and the plant by means of a conveyor system. The conveyor system will be supported across the Nenana River by the new vehicle bridge. Power plant construction and future industrial developments will be supported by a barge loading facility to be constructed on the south bank of the Tanana River. This improvement will require construction of a 400 foot dock, providing crushed a rocked surface for approximately three acres and construction of a road connecting the river front area to the site. A more detailed description of the project area, facilities, site and impacts is presented in Section 4 of this document below. 1.2 Development and Review of the Present Document The Nenana project is under development as a result of expressed interest by Railbelt utilities and officials from the City of Nenana. The project team employed to prepare the present document has included experts in the fields of engineering, impact assessment, program development, project management, finance, utility law, and power plant design and construction. The present document has also been discussed with and reviewed by national and international experts in coal-fired power plant design and construction, as well as experts in the field of power plant feasibility analysis and financing. In addition representatives of Fairbanks utilities have commented on the project. Letters of review and comment from these individuals and organizations are included in Appendix F. Yi VY GENERATION PRO LOCATED IN THIS ARE NENANA COAL FIRED ELECTRICAL GENERATING FACILITY MAP 2: PROJECT VICINITY FRYER/PRESSLEY ENGINEERING INC. MARCH 1987 (PAGE 3) 2 < = x< T-FEASIBILITY ue 3S “Ww ae Page 4 2. PROJECT FEASIBILITY 2.1 Introduction The purpose of this Section is to present analysis and conclusions relating to the feasibility of construction of a coal-fired electrical generating plant at Nenana. These analyses and conclusions are presented in subsections below, which include the background and setting for development of Alaska electrical generation facilities, Alaska railbelt electrical supply and demand, potential markets for electrical power produced at Nenana and a summary conclusion of the feasibility of the Nenana project. 2.2 Background and Setting for Development of Alaska Electrical Generation Facilities Natural Gas-Driven Electrical Production Technologies: Figure 1 below graphically portrays the substantial amount of the natural gas-driven electric power generating capacity in the Alaska railbelt. The trend toward the use of natural gas generating technologies dates to the early 1960’s, when Cook Inlet natural gas suppliers signed long term contracts with Chugach and other power producers, and the price of natural gas was low. In the past natural gas electrical production technologies have been attractive to the utilities because units have a low capital cost to install and because of the availability of long term contracts for low cost natural gas. These conditions have resulted in production of gas-driven electrical power at wholesale costs of three-to- four cents ($.03-.04) per kilowatt hour. Today however these long term contracts are expiring, and the price of the natural gas is increasing, as evidenced by recent rate hike requests to the Alaska Public Utilities Commission by the Chugach Electric Association. At present the outlook for long term, low priced natural gas contracts is at best unclear. Many analysts feel that the costs will increase more than 200% over their historic levels and that contracts will not be issued for periods greater than five years. In addition natural gas may provide more value to producers and the State as an export commodity than as a fuel for electrical generation. Alternative Electrical Production Technologies: Partly in recognition of the problems associated with natural gas-driven electrical production technologies, planning for Alaska railbelt electric power production since the mid-1970s has focused on large hydroelectric projects. Hydroelectric projects entail a high capital cost to install but produce electric power at a stable cost over long term. PAGE 6 ay ZNNISSSS BSNS ANS ON 2001 oy DSA NYY VINSNANQNN A eee SSS 1986 1985 SSS eRe BX WINANS UNWIN INWUINNSINSIASINISIASS DWN PANY INSANE AWN DSI dl ANE SSSA SS a 1992 1968 1966 RSQ «Hydro ZA Coal/Steam Figure 1 - System Capacity by Prime Mover . Page 6 In recent years the feasibility of large hydroelectric plants has been seriously challenged. These challenges to hydroelectric feasibility have resulted from concerns over the environment, concerns over long term demand and capital costs, and a drastic decline in oil prices. Owing to high capital cost, a high demand is required to assure the feasibility of projects such as the proposed Susitna hydroelectric. The recent collapse and subsequent volatility in world oil prices has resulted in a recession in Alaska, and the demand projections underscoring the feasibility of the Susitna project have been questioned. Volatile oil and natural gas prices have changed the economics of all energy projects. In the present economic environment, smaller scale projects with stable long term electric costs have become more attractive. This new economic reality is demonstrated in the Alaska Power Authority’s (APA) promotion of the ninety megawatt, Bradley Lake hydroelectric project on the Kenai Peninsula. As presently proposed the Bradley Lake facility will be employed to provide blocks of power to meet peak demand during the fall, winter and spring months. This use of Bradley lake will preclude the need to burn expensive natural gas otherwise required to meet peak demand. The proposed Nenana Coal-Fired Generating Plant also fits within this new category of potentially viable projects. The proposed Nenana coal-fired plant will have about the same capacity as the Bradley Lake Hydroelectric Project (ninety megawatts at Bradley Lake versus 105 megawatts at Nenana). The Nenana plant entails a higher capital cost than diesel or gas-fired plants, but the price of coal for the Nenana plant can be guaranteed over the long term, through execution of long term sales contracts. Consequently the Nenana Coal- Fired Electrical Generating Plant can provide a long term, fixed cost source of power to Alaska railbelt. Relationship Between Natural Gas-Driven Electrical Production and Alternative Production Technologies: From the above analysis we conclude natural gas-driven electrical production cannot be relied upon to provide a fixed cost source of power over the long term. This lack of power cost reliability is tied to the inability to execute long term, fixed price contracts for the purchase of natural gas. Therefore, over the long term, natural gas-driven production units should not be employed to provide for the base electrical demand for the Alaska railbelt. Rather these units should be employed to provide peak and reserve requirements and to provide for the overall reliability of the railbelt grid. Power produced from coal-fired and hydroelectric plants, on the other hand, may be employed over the long term to meet the base demand of the railbelt. These generating technologies allow for long term, fixed cost power sale agreements and can assure that the railbelt does not experience volatile power costs. Page 7 2.3 Existing Alaska Railbelt Electric Power Supply and Future Demand This subsection is presented to show existing Railbelt energy demand and installed capacity and to provide one scenario of future capacity and demand relationships. The findings and scenario presented here will not determine the feasibility of the Nenana project. Demand and Installed Capacity: Appendix A of this document contains several tables produced by the Alaska Power Authority (APA) relating to railbelt electric power supply and demand. These supply tables are reproduced from the eleventh edition of "Alaska Electric Power Statistics: 1960-1985," (APA, December 1986). The demand tables are reproduced from the "Preliminary Economic Assessment of Railbelt Transmission Alternatives," developed by railbelt utilities and published by the APA in January 1987. Tables in Appendix A show that the total railbelt system demand will increase from about 905 megawatts in 1987 to about 990 megawatts in 1992. Beyond 1992 the tables show a projected demand of about 1,105 megawatts by the year 2001. Additional tables in Appendix A present an inventory of railbelt hydroelectric, diesel, gas turbine and steam turbine installed generating capacities, also obtained from the December 1986 APA document. The final tables in Appendix A show a detailed inventory of Fairbanks area generating units, including coal-fired units, developed by Fryer Pressley Engineering. Figure 2 below provides a summary of this inventory by utility and by technology, obtained from figures provided by the APA, Fryer Pressely and verified through a poll of the independent utilities. Figure 2 Inventory of Railbelt Installed Generation Capacity AML&P Chugach Electric Mat-Su/Homer G&T APA (Federal) Seward FMUS GVEA Military UAF Total by Technology 1 Gas Turbine Gas/Steam Turbine Diesel Gas Turbine Gas/Steam Turbine Hydroelectric Gas Turbine Hydroelectric Diesel Gas Turbine Coal/Steam Turbine Diesel Coal/Steam Turbine Diesel Diesel Coal/Steam Turbine Coal/Steam Turbine 262.7 34.0 2.6 421.3 57.0 15.0 40.0 30.0 10.5 28.5 28.5 8.3 25.0 185.7 14.3 22.0 1,200.4 Page 8 Page 9 Ratio of Installed Capacity-to-Firm Power Requirements (System Reliability): Figure 2 shows a total installed railbelt generating capacity of about 1,200 megawatts. According to railbelt utilities 905 megawatts of firm power are required in the railbelt today ("firm power" means the total peak demand, plus needed reserves). This existing firm power requirement equals about 75% of the present installed capacity. The APA report shows that in five years 990 megawatts of firm power, or about 82% of the present installed capacity will be required for railbelt demand. And by 2001 the APA report shows 91% of the present installed railbelt generating capacity will be required for firm power. The desired ratio of installed capacity-to-firm power requirement is contingent upon a number of factors, including the number, size and condition of active and surplus plants, configuration and characteristics of the transmission system, relationships between power producers and retail power distributors, climate, power uses and user preferences. The desired ratio of installed capacity-to-firm power requirements for the Alaska railbelt is therefore subject to interpretation and changing criteria. For the purposes of this discussion, we have assigned 70% as a desired ratio of firm power requirement-to-installed capacity. To obtain a firm power requirement-to-installed capacity ratio of 70% in Alaska’s railbelt, approximately ninety-five megawatts of new power is required today. If no units are retired, then to achieve this 70% ratio in 1992 will require the addition of approximately 215 megawatts of new power. By 2001 this 70% ratio will require about 380 megawatts of new power, again if no units are retired. Plant Retirement: In the future some additional generation will be needed to offset scheduled retirement of existing plants. APA analysis contained in Appendix A shows that, of the electric power generation plants that now serve the railbelt, about 110 megawatts of installed capacity will be retired by 1992 and a total of about 540 megawatts will be retired by 2001. Most of this retired generating capacity will be gas turbine units, which provides an opportunity for the Railbelt utilities to now diversify production technologies and promote a more stable cost base. In addition, because gas turbine units have a low capital cost and rapid installation time, new gas turbine units can be quite easily obtained to meet any unexpected future surges in demand. Summary of Demand: Future Railbelt energy demand will be contingent upon a number of factors, including plant retirement, desired ratios of firm power-to- system capacity, growth in base and peak demand and other factors. The scenario presented in this subsection shows one example of what could occur in the Railbelt and how demand for new production could increase over time. However, unlike Susitna or other large scale projects, the proposed Nenana project is not reliant upon increasing demand to be feasible. Rather the Nenana project is reliant upon specific markets for its feasibility, as described below. Page 10 2.4 Markets for Electrical Power from the Nenana Coal-Fired Plant The ultimate feasibility test for the Nenana project will be the willingness of purchasers to execute power sales agreements. The willingness of purchasers to execute power sales agreements will be contingent upon the configuration and characteristics of the Railbelt transmission grid, the relationships between purchasers and producers and the cost of Nenana power. Configuration and Characteristics of the Transmission Grid: An upgraded Kenai- Fairbanks intertie would allow power producers throughout the railbelt, including the Nenana Heat and Power Authority, to provide power to a grid. In its present condition the intertie is capable of handling power produced at Nenana for sale in the Fairbanks area market. The Fairbanks-Anchorage electrical intertie currently has three sections with differing capacities. The section from Anchorage to Willow has a capacity of about forty-eight megawatts (139 kv). The section from Willow to Healy has a capacity of about 298 megawatts (345 kv), and the section from Healy to Fairbanks has a capacity of about seventy megawatts (167 kv). The intertie runs through the Nenana area, just west of the proposed site for the Nenana coal-fired plant (see area map in Section | above). The intertie section from Healy to Fairbanks is in better repair than the southern section, owing to line maintenance conducted in association with generation of power at the Healy coal mines. Railbelt utilities have requested that the line be upgraded to a uniform capacity of about 298 megawatts between Anchorage and Fairbanks. The APA and the Alaska Systems Coordinating Council have executed an agreement to produce a feasibility study, economic analysis and preliminary design for the Anchorage-Fairbanks intertie upgrade by May 1, 1987. In addition the APA and several railbelt utilities are currently conducting a feasibility study, economic benefit analysis and preliminary design for an upgrade of the Kenai- Anchorage intertie. The Kenai-Anchorage Intertie report will also be available around May 1, 1987. Current preliminary cost estimates for the Kenai-Anchorage Intertie place the cost at approximately $100 million. Upgrade of the Anchorage-Fairbanks portion is currently estimated at about $75 million. Railbelt Generation and Transmission Authority: In addition creation of a railbelt generation and transmission authority would provide a single purchaser for Nenana power, for subsequent distribution along the grid. Page 11 The "Alaska Electrical Generation and Transmission Cooperative’ (AEG&TC) is being organized at present to serve the generation, transmission and distribution requirements of the railbelt. The AEG&TC could act as the wholesaler of power in the railbelt and could be the customer for power produced at Nenana. Failing an agreement with the AEG&TC, customers for power produced at Nenana would include those utilities choosing to execute power sales agreements. In this event the APA, as owner of the intertie, would act as the wholesale distributor of Nenana power. Nenana Power Costs: Section 5 of this document below contains an analysis of costs associated with the proposed Nenana plant. This analysis shows the findings and assumptions used to develop a preliminary projection of power costs for the proposed Nenana project in the range of about $.06 per kilowatt hour. 2.5 Feasibility Findings and Conclusions Findings: In general we find that the feasibility of the Nenana Coal-Fired Electrical Generating Plant will be directly linked to the Kenai-Fairbanks intertie, the creation of a Railbelt AEG&TC and to the cost of the power produced. Conclusions: As stated above the ultimate test of this project’s feasibility will be the ability to execute power sale agreements. A substantial portion of the work undertaken during the preliminary engineering phase of this project will involve day-to-day work with railbelt utilities to reach understandings in regard to power sales agreements. The above analysis shows that power from the Nenana plant can be offered as a long term, fixed cost alternative to gas-driven power generation, if the price for Nenana power is competitive. Although subject to refinement during the preliminary engineering phase of the project, these projections show the Nenana plant may be competitive in the present Alaska railbelt energy market. ‘ieee ras te Channel ~ ‘ARN SCLEAR MISSILE BARLY W. al = 430 Tekianika Page 12 3. THERMAL PLANT PROCESSES 3.1 Introduction The purpose of this Section is four fold. First the Section provides a discussion of efficiencies related to the conversion of chemical energy to electrical energy. Next the Section contains a description of different coal combustion technologies, including fluidized bed technologies. Next the Section provides conclusions on the appropriate firing system for Nenana. Finally the Section contains preliminary design conclusions for the Nenana plant. Figure 3 below shows a standard process for conversion of chemical energy to thermal energy in a power plant 3.2 Inherent Plant Efficiencies Related to the Conversion of Chemical Energy to Electrical Energy Combustion plant efficiencies are important to the cost of electricity produced through the thermal process. Items below describe these efficiencies in the context of the different stages required in the conversion process. Conversion of Chemical Energy to Thermal Energy: Steam powered plants consist of a number of steps that involve the transformation of energy from one state, or from one media, to another. When coal or other carbon based fuels are burned, the burning process releases the potential energy contained in the fuel, from chemical energy to thermal energy. Some carbons in the fuel combine with oxygen in the combustion air to form a variety of compounds, including carbon dioxide, water and a variety of nitrous oxides (commonly referred to as "NOX"). In practical application, while the potential energy of the fuel can be fully converted into thermal energy through combustion in the furnace, this energy can never be fully utilized, in that 100% of the energy is never transferred to water/steam process. Part of the energy always escapes from the combustion process in the form of so-called "boiler losses." The major element of boiler losses is is the loss of sensible heat in the exhaust gas. While the fuel and combustion air are introduced to the combustion process at ambient temperatures, their product flue gases leave the process at a much higher temperature, and the flue gases consequently carry away part of the energy released in the furnace during combustion. Owing to the need to reduce the incidence of sulfuric acid, escaping gases must be maintained at a temperature of 250-300 degrees (F). In addition to the heat lost through escaping flue gases, additional boiler losses are entailed by the following factors: *Unburned fuel in the ash *Sensible heat in the ash *Heat loss through radiation *Heat loss through combustible gases present in the flue gases PAGE 13 2.34 MMBTU 1.8 TON CO, B 0.5 TON H,0 @ | 1.3 TON AR © / 4.9 TONS NITROGEN & OTHER GASSES gorek | ELECTRICITY FUEL HIGH PRESSURE STEAM — 1 TON OF COAL BOILER STEAM TURBINE Low (15.6 MMBTU) (15.3 MMBTU) PRESSURE STEAM (8.1 MMBTU) fa PLANT = LOSSES (0.12 MMBTU) fa 0.1 TON ASH REJECTED e CONDENSOR |} HEAT 5 (7.8 MMBTU) ce wae 1.8 MMBTU) STEAM CONDENSATE BOILER MAKE-UP WATER (0.3 MMBTU) Figure 3- Mass & Energy Balance Page 14 Boiler Efficiency: Depending on the type and composition of the fuel and the respective type and design of the firing system, the "boiler losses" described above account for a total of between 8.5% and 15% of the total potential energy. Losses in the range of 8.5% are common to oil and gas-fired boilers, and losses in the range of 15% are common to coal-fired boilers. The greater inefficiencies in coal- fired boilers are attributable to their higher excess air requirements, to unburned particles in slag and ash and to the heat present in slag and ash. In summary the boiler efficiency in the proposed Nenana project can be anticipated in the range of 85%-87%. Moving the Thermal Energy from the Combustion Process to the Turbine: The energy from the combustion process is transferred to the turbine through generation of steam. To create steam water is fed into the boiler and heated by convection and radiation. The steam is then created through heating and evaporation of this water. The steam itself is then superheated prior to introduction to the turbine. For the discussion of the efficiency of this portion of the process see "Plant Heat Cycle" below. Conversion of Thermal Energy to Mechanical Energy: This conversion occurs in the turbine. Upon introduction to the turbine, the steam expands (i.e. its potential energy or "enthalpy" becomes kinetic energy), driving the turbine. For the discussion of the efficiency of this portion of the process see "Plant Heat Cycle" below. a Conversion of Mechanical Energy to Electric Energy: An electric generator is coupled to the end of the turbine wheel. As this generator rotates, it produces electricity. This portion of the process is efficient at a rate of 98% or more. Plant Heat Cycle: The plant’s heat cycle is composed of the water/steam portion of the boiler, the turbine, the condensor, condensate extraction pumps and various interconnecting pipes. Within this heat cycle the circulating medium passes alternately as water and steam. Energy is lost and plant efficiency reduced as this medium circulates through the heat cycle. Several measures can be employed to reduce the potential energy loss of the heat cycle. These measures are as follows: *Selection of high live steam temperature and pressure *Application of multi-stage, rengenerative feedwater heating, with turbine extraction *Regenerative combustion air heating with boiler exhaust gas *Improvements to the condensor vacuum *Application of steam reheating The extent to which these measures can be implemented to reduce heat cycle energy loss and improve plant efficiency is contingent upon economic factors such as fuel prices, plant utilization factors and capital costs. Therefore improvements to the heat cycle efficiency are determined as a part of the overall detailed design of the plant, at which time tradeoffs between capital costs, fuel costs and operating costs are calculated and adopted. Page 15 Auxiliary Power Consumption: The power plant is supported by a water treatment plant, lights and other energy consuming appliances. ll of these energy consuming elements add to further plant inefficiencies. Coal-fired power plants generally require power for auxiliary operations in the range of 7%-10% of gross generation. Summary of Power Plant Efficiency: Figure 4 below shows the anticipated efficiency for a coal-fired generating plant of the type proposed at Nenana. Figure 4 Proposed Nenana Coal-Fired Generating Plant Efficiency Summary Item Anticipated Efficiency Boiler 87% Heat Cycle/Internal Turbine 41% Mechanical Turbine 99% Electric Generator 99% Auxiliary Power 92% Overall Plant Efficiency 32% This efficiency can be further decreased if the plant does not operate at its maximum capacity. Because the Nenana plant is intended to help provide power for the base load requirements of the railbelt, the operating hours will be in the range of 97% of capacity, and the impact on overall plant efficiency will be minimal. We estimate that the overall plant efficiency will be in the range of 30%- 32%. Cogeneration Plant: One approach to maximizing plant efficiencies is to employ “cogeneration” technologies. Cogeneration is the term coined to describe a thermal plant process specifically designed to produce both electric energy and useful thermal energy ("waste heat"). An efficient electric power generation plant rejects heat at a relatively low temperature. The heat rejected is of relatively low quality, typically has little value and is normally wasted to the atmosphere. In the case of cogeneration, the plant is specifically designed to extract steam from the turbine while the steam still contains enough useful energy to perform other tasks, including provision of heat to residential, commercial, public and industrial users. Examples of Alaska cogeneration plants exist at the University of Alaska campus in Fairbanks, the City of Fairbanks, the U.S. Army base near Fairbanks and the cogeneration plants located at the U.S. Air Force Bases near Anchorage and Fairbanks. Page 16 3.3 Combustion Technologies for Coal Fired Plants Any of several types of boilers can be used to convert coal to thermal energy. Boiler selection is contingent upon fuel type, fuel quality, plant load characteristics and environmental factors. Basic types of boilers are described below. Spreader Stoker Boilers: This type of boiler features a travelling grate which forms the bottom of the furnace. Depending on the boiler size, the travelling grate consists of one or more parallel sections with individual drives. Moving on the travelling grate, coal fed to the boiler is passed through various zones of combustion, including drying and heating, coking, burning and cooling. The relatively low travelling speed of the stoker constitutes long reaction times for the fuel and combustion air and therefore provides good conditions for combustion. In addition these long reaction times to some extent mitigate otherwise harmful environmental impacts, by allowing for sulfur retention in the slag through introduction of limestone and by reducing thermal NOX-formation. In addition this process allows adjustments to be made to rates of travelling speed, air distribution to individual grate zones and the air distribution between the undergrate and overfire. These adjustments in turn allow the use of a variety of coal types in spreader stoker boilers. Spreader stoker boilers do not require fine coal sizing and do not therefore require _ coal crushing or milling. Rather coal can be introduced to the firing system as it is received from the mine screening station. This technology is suitable for boilers up to a capacity of approximately 180 megawatts. However, while this technology is proven and simple, the emissions resulting from the spreader stoker combustion process do not generally conform to present environmental standards. This firing system is not recommended for the Nenana project. Pulverized Coal Dust Boilers: This type of boiler burns finely ground coal dust in a state of suspension. The boiler type is characterized by very high combustion temperatures and a high release of heat in reference to furnace volume and furnace cross section. The coal is ground by coal mills which are a part of the firing equipment. Combustion air is used to blow the pulverized coal dust into the furnace. The boiler type may be designed for wet or dry slag tapping. In the case of dry slag, less than 20% of the slag is tapped from the furnace hopper, and the remaining slag is carried in the flue gases for ultimate separation in a bag house or electrical precipitator. _ Page 17 Pulverized coal dust boilers are designed for short reaction times between fuel and combustion air achieved through high combustion temperatures. Owing to these short reaction times, these boilers are not capable of retaining satisfactory amounts of sulfur dioxides in the slag and ash or of reducing NOX formation in the furnace. Consequently, to meet current emissions standards, this boiler type requires installation of separate flue gas scrubber stations for sulfur dioxide and NOX separation. Pulverized coal dust boilers are commonly employed to meet high output requirements, in the range of 300 megawatts or more. Lower capacities are feasible but are not economical. This firing system is therefore not recommended for the Nenana project. Coal Gasification-Combined Cycle: This process requires conversion of coal to a carbon-rich gas and then combustion of that gas in a turbine. To obtain the gas coal is first ground to a slurry and pumped into a high temperature reactor, where a large percentage of carbon is driven off as a "coal gas.” This gas is cleaned in a second process and routed to a gas turbine where it is burned in an air stream. Upon combustion the expanded gases exert pressure on the turbine blades, creating mechanical energy which is subsequently translated to electrical energy. The hot gases leaving the turbine are passed through a heat exchanger and used to create steam. The steam is then used to drive a steam turbine, which itself translates to electrical energy. This system has an advantage to traditional coal-fired plants in that the plant efficiencies are somewhat higher, owing to the double use of combustion products for electrical generation, and the system is capable of using high sulfur coal. On the other hand the technology employed in these plants is highly sophisticated and quite new. This technology may present difficulties during adaptation to remote or cold regions. A prototype, 117 megawatt coal gasification-combined cycle plant is now operating in California. This plant is in the third year of a five year commercial demonstration. This facility warrants further examination. Fluidized Bed Boilers and Their Benefits: Fluidized bed combustion technology has evolved over the past decade. This technology combines the long reaction time characteristic of the spreader stoker boiler and the suspended fuel characteristic of the pulverized coal dust boiler. This long reaction time for the suspended fuel allows thorough combustion of coarse coal particles at low temperatures and also allows the introduction of limestone to the combustion process. The benefits of this technology are numerous and substantial. These benefits are listed below. Page 18 *Little requirement to pulverize coal The fluidized bed system may be fired with larger fuel particles than are used in the pulverized coal firing system. These larger fuel particles are suspended in a vertical moving air stream. *Ability to burn a broad quality of coal/other fuel *Little slagging or fouling tendency Lower grades of fuel may be burned effectively in this type of furnace. Today fluidized bed plants are used to incinerate trash, sewage, wood chips and sawmill slash, lignite and sub-bituminous coal. *Low atmospheric emission of sulfur dioxide *Little origin of NOX The capability to burn larger particles allows introduction of limestone with the coal as a method of reducing sulfur dioxide emission. When coal is burned in the presence of lime, the sulfur and lime react together to produce gypsum, and the sulfur passes from the process as a constituent of the ash. Sulfur dioxide is the material that, when released into the atmosphere, combines with water to form sulfuric acid, a constituent of “acid rain", and the fluidized bed technology thus Mitigates this problem. Fluidized bed reactors are capable of efficient combustion at lower temperatures than are characteristic of most other firing systems. The cooler combustion process effectively reduces the production of NOX emissions from the process. These characteristics of the fluidized bed reactor reduce the requirement to scrub flue gases before expelling them out the stack; thus reducing the cost of the power plant. *Reasonable investment and operating costs *Dependable technology, with a high availability Section 5 shows the construction cost per kilowatt hour for the proposed Nenana plant will be in the range of $1,600-$1,800, with anticipated cost of $1,750. This price is competitive with and in some respects advantageous to alternative generating technologies (see also Section 2 above). This technology is dependable and available in today’s market, as further described in subsection 3.4 below. Page 19 3.4 Fluidized Bed Boiler Types Fluidized bed technology on the scale of the Nenana Project has been evolving over the past decade, and various kinds of fluidized bed boilers now exist. These boiler types are described below. Stationary Atmospheric: The furnace for this boiler type operates at atmospheric pressure, and the combustion air velocity is adjusted to keep the fuel in suspension. The combustion air is introduced to the furnace from the bottom, by means of nozzles. The bed materials consist mainly of ash, with a small incidence of coal. The recirculation of the separated bed material to the furnace provides for highly efficient combustion. The fly ash escaping via the cyclone separators from the combustion process is eventually retained in the bag house. The heat exchange surface is composed of bundles of tubes partly submerged in the bed material. This particular technology was the first step in the evolution of fluidized bed firing systems. The technology is suitable for low firing capacities but has become increasingly superseded by the circulating fluidized bed technology. This technology is therefore not recommended for the Nenana project. Circulating Atmospheric: This technology also maintains the ash and coal in a state of suspension and gets its name from the fact that a portion of the materials and gases leaving the reaction are recaptured and recycled through the reactor. This recirculation of combustible materials increases the fuel efficiency of the process and more completely reacts the sulfur with the limestone to further reduce sulfur dioxide emissions. The circulation of combustibles is caused by "cyclone separators" located at the top of the reactor, which remove the bed materials from the stream of flue gases. These separated bed materials are then fed back down to the reactor and subjected to additional combustion. Prior to arriving at the bag house, the flue gases leaving the cyclone separators stream across tube bundles and transfer heat to the economiser, evaporator, superheater and combustion air heater. Combustion air is admitted to the reactor in two stages. Approximately 60% of the air is introduced at the bottom of the furnace, and the remaining 40% is admitted at a higher level on the furnace walls. This multi-stage introduction of combustion air creates extended coal combustion areas within the reactor, while allowing for low furnace temperatures. A number of different circulating atmospheric fluidized bed technologies exist, differing primarily in the flue gas temperature leaving the reactor and the amount of circulating bed materials. However all circulating atmospheric technologies are based on the same fundamental principals described above. Page 20 The circulation of hard combustion substances in this technology combines long reaction times with reasonable high heat release rates, when expressed as a function of furnace dimensions. These characteristics result in the suitability of this technology for larger unit sizes. The largest circulating atmospheric fluidized bed unit constructed to date has a firing capacity of 226 megawatts. Larger units are under development at present, in response to orders from utilities. This technology holds great promise for Nenana. Pressurized: This technology is characterized by the fact that the furnace is completely housed in a pressurized containment. The technology may be adapted to either a stationary combustion process, under investigation at present, or a circulating combustion process, which may be developed soon. The pressurized fluidized bed combustors conceptualized to date apply the stationary technology. The high pressure combustion process (140 psi) provides for small specific dimensions and thus lower capital costs. The high pressure combustion process also provides for an efficient reaction of combustible materials with air and absorbents. Thus the environmental aspects of this technology are quite promising. In the pressurized process, the escaping flue gases must be led by means of a gas turbine, this requires the problematic separation of dust from the hot gases under pressure. Another hurdle in this process is the introduction of coal, at atmospheric pressure, against the pressurized furnace. As stated above this technology is still under development and is not yet proven. Current estimates show that circulating atmospheric plants can provide for demand in the range of up to 150-200 megawatts, and pressurized units will provide for demand of up to 300 megawatts. In the future this technology may provide promising results in applications such as the Nenana project. 3.5 Firing System Conclusions This analysis suggests that, because of emissions requirements established by the Federal government under the National Environmental Protection Act (NEPA), the nature of the available coal (see Appendix C), the size of the unit anticipated by this study and the nature of the load to be served, a circulating atmospheric fluidized bed combustion process is most appropriate for the proposed Nenana project. The specific fluidized bed firing system to be employed in the Nenana project will be selected following a detailed analysis of the characteristics of available fuels, as well as an analysis of the environmental and economic conditions of the project area. The power plant described herein would be capable of producing about 750 million kilowatt hours of electricity and nearly 3 trillion BTU of usable thermal energy per year. The energy contained within the stream of useful thermal energy available from the proposed project is the energy equivalent of 20 million gallons of fuel oil per year. These detailed plant characteristics are more fully provided in the cost model assumptions provided in Appendix F. Page 21 3.6 Heat Cycle Conclusions Ease of plant operations and maintenance are primary objectives for the plant design. Therefore the configuration of the plant heat cycle and main design considerations should be selected so as to provide reasonable thermal efficiency without requiring sophisticated technical plant features. Obtaining these design objectives will require identifying and making tradeoffs between thermal efficiency (fuel and construction costs) and plant simplicity (operating and maintenance costs), in order to arrive at the balance appropriate to the Nenana setting. Some preliminary design conclusions are expressed below. Boiler: A natural circulation (drum type) boiler is recommended, and it is further recommended to refrain from use of a reheater or use of austenitic steel. This design would allow for steam characteristics of 1600 psi and 980 degrees (F). A six-stage regenerative heater is also recommended, with one stage designed as a deaerator (i.e. devise which removes air from the steam, causing condensation). Condensor: An air-cooled condensor is recommended, as the average ambient air temperature at Nenana will not result in a substantially less dependable vacuum in the air-cooled condensor, as compared to a water-cooled condensor. In addition use of an air-cooled condensor has definite environmental advantages. For example use of an air-cooled condensor will preclude problems with ice fog, which are associated with introduction of warm water into contact with the atmosphere during periods of low temperatures. Use of an air-cooled condensor will also preclude any water pollution problems associated with a water-cooled condensor. Turbine: A condensing-type turbine is recommended, with one controlled steam extraction for co-generation purpose and six non-controlled steam extractions for regenerative feedwater heating. A compound turbine governing system is recommended, such that, within predetermined limits, the outputs of the electrical system and heating system are controlled independently of one another, in compliance with their respective demands. Feed Water Supply: Approximately 2% of the live steam flow will be lost in the heat cycle. Make-up water for this loss should be provided by a chemical demineralizing plant, operating on the ion-exchange principal. Equipment: To assure availability for plant operations, boiler fans, feedwater pumps, condensate pumps and other auxiliary equipment should be provided redundantly. A flue gas scrubber station is not recommended, since the circulating atmospheric fluidized bed technology will capture sulfur in the ash and will produce almost no thermal NOX. iss =) cy, + eH aonb GE se ia | Mp geek C hte Page 22 4. PROJECT DESCRIPTION 4.1 Introduction Sections 1 and 3 of this document provide a general description of the project and design considerations. In this Section we present descriptions of the proposed project facilities and characteristics, project site and project impacts. Each of these items is presented in a subsection below. In addition Appendix D provides a general description of the Nenana area, including location, history, climate, population and economy. The project site development plans are shown on Map 3, which follows below. In addition Appendix E contains a detailed description of the project components. These plans require improvements to approximately fifty acres of land. Twenty- five acres on the east bank of the Nenana River will be developed and connected to a twenty-five acre development on the west bank by construction of a two lane road and bridge. 4.2 Project Facilities and Characteristics East Bank Development: About twenty-five acres will be dedicated to a rail yard, coal train storage and coal and ash handling facilities. These facilities will be located on the east bank of the Nenana River, about one-half mile to the south of the Tanana River. Road and Bridge: A two-lane, paved drive will connect the Parks Highway with the development area. This drive will skirt the rail yard, and a new bridge will be constructed across the Nenana River to the site of the new generating plant, located on a twenty-five acre parcel on the west bank of the Nenana River. This bridge will also support a coal and ash conveyor system, which will be supported by the bridge. West Bank Development: The generating plant site on the west bank of the Nenana River will include the boiler plant, turbine house, bag house, stack, coal storage, oil storage, water and waste water treatment and buildings for administration, warehousing and shops. Other Improvements: Other improvements will include a four acre transformer and switch yard and nine acres of roadway, parking and landscaping. Depending upon dredging requirements and an economic analysis, a 400 foot dock and access road may be constructed along the Tanana River, north of the west bank development. This dock and access road will support the plant and new development in a designated industrial area just north of the generating plant site. RAIL YARD LZ INDUSTRIAL PARK RESERVE [ STORAGE YARD : COAL/ASH HANDLING SYSTEM COAL STORAGE PILE COAL HANDLING & PROCESSING ADMINISTRATION WAREHOUSE WATER TREATMENT(ONLY) | VEHICLE SHOP 3 OIL STORAGE '§ BAG HOUSE & STACK : © ; PLANT. BUILDING i SWITCHING YARD NENANA COAL FIRED ELECTRICAL GENERATING FACILITY MAP 3: SITE DEVELOPMENT CONCEPT FRYER/PRESSLEY ENGINEERING INC. MARCH 1987 “ (PAGE 23) Page 24 4.3 Project Site The fifty acres in this site and the designated industrial park area are currently owned by either the State of Alaska (Alaska Railroad Corporation) or private individuals. No zoning or other land use restrictions exist on the site in relation to construction of the plant. Flood Hazard: The City of Nenana was inundated by a 100 year flood in 1967, and the proposed project site remained above the maximum flood stage, which occurred at elevation 358. A hydrological site analysis is required to assure that construction or other events occurring during the intervening years will not adversely effect future development. The hydrological analysis is also required to assure that ancillary development, such as the bridge, switchyards, support buildings, coal storage and handling facilities and electric transmission structures, are located away from flood hazards. Applications for permits to construct the facility will require that flood hazards be addressed in detail. Soils: The soils underlying the areas to be developed are thought to be well drained granular soils. Perched water tables have been reported in the area, and permafrost probably exists at some locations. These conditions will not effect the economics of site development but do set the requirement for a detailed geotechnical investigation. This geotechnical investigation will be conducted in two phases. The first phase will occur in support of site planning. The second phase will occur in support of detailed design. 4.4 Project Impacts Related Industrial Development: The co-generation design of the plant will promote development of timber and agriculture in Nenana and throughout the Tanana and Yukon basins. Plywood, particle board, dimensioned lumber and other forest product industries are natural candidates as user industries. Aquaculture and agricultural enterprise are also suited to benefit from power plant operations. Industrial parksites and agricultural areas for these industries in the Nenana area will be developed and operated by the Nenana Port Authority, which will be responsible for purchase and resale of waste heat. Employment Impacts: The new plant and related industrial and commercial development will have a significant impact on long term employment in the Nenana area and throughout the region. Figure 5 below shows preliminary estimates of these employment impacts. Page 25 Figure 5 Employment Impacts of the Nenana Coal-Fired, Electric Power Facility Employment Sector New Fulltime Jobs 1. Plant Operations 75 2. Nenana Commercial/Retail 35 3. Transportation 15 4. Agriculture 50-200 5. Timber/Wood Products 100-250 6. Other (Government, Schools, etc.) 15-25 Totals 165-600 In addition to these fulltime, long term: jobs, construction of the plant, related facilities and appurtenances will create approximately 2,000 work years in the Alaska construction industry. Environmental Impacts: All water and air emissions and impacts will be maintained in strict compliance with Federal and State standards. Selection of the fluidized bed firing technology and use of air cooled condensers and/or waste heat sales will assure minimal environmental impacts from the plant. Air quality will not be jeopardized by plant operations, as the fuel burned will be low sulfur. The plant and firing system design assures that all, or virtually all, visual and physical impacts from emissions are eliminated in the firing process. Use of air-cooled condensers will eliminate the need for disposal of heated water into the river system. No cooling ponds or direct dumping will be required or employed, as heated water will be recycled back into the plant. All environmental impacts, mitigating measures and implementing actions must be defined and agreed upon at the local, State and Federal level prior to construction of the plant. Socio-Economic Impacts: Construction and operation of the plant and related facilities will have a substantial impact on the social and economic conditions in Nenana and the surrounding area. Over the long term the population of the community may at least double. Additional schools and other government services will be required, and a new zoning ordinance will be required. Numerous transportation, housing, recreation, cultural, public safety and other programs will require consideration and action to manage growth. During construction careful attention will be required to assure Maintenance of public safety and transportation facilities for residents and visitors. Each requirement in the socio-economic impacts program must be defined, and mitigating actions and their costs shown, prior to construction of the plant. | & | | L ANCING Fl ee a s ee Page 26 5. COSTS AND FINANCING 5.1 Introduction The electric power industry typically identifies costs according to three basic categories: 1) fixed costs; 2) non-fuel operating costs, and 3) fuel costs. In this report we have grouped all debt service costs under “fixed costs." We have grouped all labor, materials, ash disposal, limestone, fuel oil and materials costs under "non- fuel operating costs," and we have provided the cost of coal under "fuel costs." These costs are expressed in terms of their projected annual costs and in terms of mils per kilowatt hour (mils/kwh). Development of a Cost Model: In order to develop the cost assumptions shown in this Section, we have constructed a cost model, which is included in Appendix F. This cost model provides assumption on plant efficiencies, turbine heat rate, combustion efficiency, fuel quality, plant production rate, capital costs, debt service interest, and other factors important to the cost of electric production. While precise cost figures and a detailed financing plan cannot be obtained without conducting the preliminary engineering phase of the project, we have never-the-less provided initial cost assumptions in this document to show the likely cost range of power to be generated at this new facility. This cost range forecast is provided in subsections below and summarized in subsection 5.5, along with the mid-case or "likely" power cost. The cost model in Appendix F also provides cost data in the mid-case or "likely" cost range. Finally subsection 5.6 below presents an outline of the approach to be taken to obtain financing for the project. 5.2 Fixed Costs The line item elements contained within the general category of "fixed costs" are shown in Figure 6, along with their likely costs. These are the items which will most likely be bonded for. Figure 6 Fixed Cost Components for the Nenana Facility Item Cost (Millions) Construction Financing Costs $ 33.30 Plant and Other Facility 181.20 Major Maintenance Reserve 18.10 Insurance/Operating Reserve 8.00 Bond Sale Costs 2.40 Total Debt $243.00 Page 27 For the purpose of this report, we have assumed a 35 year maturity and three alternative interest rates of 8.0%, 8.75% and 9.5%, with 8.75% being the most likely case. Figure7 below shows the annual gross cost and impacts on power costs of these three interest rates. Figure 7 Fixed Costs Impacts on the Nenana Facility Interest Rate Annual Cost Average Cost ($Millions) (Mils/kwh) 8.0% $20.85 27.75 8.75% $22.45 29.87 9.5% $24.09 32.06 5.3 Non-Fuel Operating Costs The line item elements contained within the general category of non-fuel operating costs are listed below. Following that listing each line item is described in a narrative. -Administrative payroll, overhead and contracts -Production payroll and overhead -Ash disposal, limestone and fuel oil -All parts and materials Administrative Payroll, Overhead and Contract Services: Appendix F contains a plant staffing and operating plan. This staffing and operating plan shows the assumptions made in presenting labor and other operating costs. The most likely case shows these costs to be approximately $1.49 million annually, with an impact of about 1.98 mils/kwh on the cost of electricity. The low range for these costs will be about $1.19 million annually, at a cost of about 1.54 mils/kwh. The high range for these costs will be about $1.64 million annually and about 2.12 mils/kwh. Production Labor (Operating) Payroll and Overhead: The assumptions made in presenting these costs are also shown in Appendix F. The likely annual cost for production labor payroll and overhead will be about $4.97 million, with an electrical cost impact of about 6.62 mils/kwh. The low range for these costs will be about $3.98 million annually and about 5.14 mils/kwh. The high range for these costs will be about $5.47 million annually, with a power cost of 7.07 mils/kwh. Page 28 Ash Disposal: We assume that the ash generated by the plant will be disposed of at the mine. Each ton of coal will produce 200 pounds of ash and we estimate the ash disposal at a most likely cost of $7.00 per ton, with a low cost of $6.00 per ton and a high cost of $8.00 per tone. Under the most likely cost range ash disposal will cost about $.355 million annually and about 0.47 mils/kwh. At the low cost range ash disposal will cost about $.304 million annually and about 0.40 mils/kwh. The high range for ash disposal costs will be about $.406 million annually and about 0.54 mils/kwh. Limestone: It is assumed that the plant will use about one part limestone for five parts coal, or about 39,300 tons of limestone annually. We also assume that limestone can be profitably mined at about $15 per ton, with a low range of $12 per ton and a high range of $18 per ton. At the anticipated rate of $15 per ton, limestone will cost about $0.59 million annually, or about 0.79 mils/kwh. At the low cost rate limestone will cost about $0.47 million annually and about 0.63 mils/kwh. At the high cost range, limestone will cost about $0.71 million annually and about 0.94 mils/kwh. Fuel Oil: It is assumed the facility will consume 250,000 gallons of fuel oil per year. The anticipated cost of fuel is $.85 per gallon, with a low of $.70 per gallon and a high of $1.00 per gallon. At the anticipated rate the annual cost of fuel is about $.212 million. The unit cost of fuel oil is 0.28 mils/kwh. At the low rate fuel will cost about $.18 million annually and about .23 mils/kwh. At the high rate fuel will cost about $.25 million annually and about .33 mils/kwh. All Parts and Materials: Cost for small tools, expendables, materials and chemicals required for operations are estimated to total $.5 million annually, with a low of $.4 million and a high of $.6 million.. This anticipated range will entail a cost of about .67 mils/kwh. The low cost will equal .52 mils/kwh, and the high cost will equal .78 mils/kwh. Page 29 Summary of Non-Fuel Operating Costs: Figure 8 below shows the summary of costs for non-fuel operations under the low, anticipated and high cost scenarios, expressed in mils/kwh. Figure 8 Non-Fuel Operating Costs for the Nenana Facility (Figures Rounded Slightly) Item Low Cost Anticipated High Cost Admin 1.54 1.98 2.12 Production 5.14 6.62 7.07 Ash Handling 0.40 0.47 0.54 Limestone 0.63 0.79 0.94 Fuel 0.23 0.28 0.33 Materials Q.52 0.67 0.78 Totals 8.46 -10.81 11.78 5.4 Fuel Costs As stated above, the cost of coal is the only component of fuel costs, and the anticipated cost of coal is $30 per ton. The coal will yield between 7,500 and 8,000 BTU per pound. The overall heat rate of the plant is assumed to be 10,500 BTU per Kilowatt hour. Based on coal consumption of 491,500 tons per year and an estimated cost of $30 per ton, the annual coal cost will be approximately $14.75 million. Coal will cost about 19.63 mils per kilowatt hour. At a low cost of $24 per ton the annual coal cost will be about $11.8 million and about 15.70 mils/kwh. At a high cost of $36 per ton the annual coal cost will be about $17.69 million and about 23.54 mils/kwh. 5.5 Summary of Costs Figure 9 below shows the summary of costs under the low, anticipated and high ranges by each of the major groups of cost factors described above. Figure 9 Summary of Generation Costs for the Nenana Facility Item Low Cost Anticipated High Cost Finance 26.08 29.87 30.13 Operations 08.46 10.81 11.78 Fuel 15.70 19.63 23.54 Totals 50.24 60.31 65.45 Page 30 5.6 Project Financial Planning and Financing Approach Considerations This subsection provides the order and type of considerations which will be investigated and defined to obtain financing for this project. The considerations are divided into five principal categories as follows: 1) financial policy; 2) security issues; 3) tax status; 4) capital requirements; 5) financing structure. Each of these items is presented below. Financial Policy: Concurrent with the early phases of preliminary design, the financial policy guidelines for the project will be established. These policy considerations include items such as the fixed costs versus operating costs, relationship with the State of Alaska and the Federal government, participation of the private sector, ownership and operation of the plant and other items fundamental to the short and long term project financing terms, conditions and viability. Security Issues: This investigation will require analysis of the number and individual financial strength of potential buyers of electricity, as well as development of contract terms for power sales agreements. The investigation and development of power sales agreements will include payment and price provisions, contract period of performance, rights and covenants, events of default and service and management conditions. Tax Status: Investigation of tax issues will include both tax exempt and non-tax exempt bonding. The tax exempt investigation will include examination of potential municipal purchasers only and examination of the potential for obtaining a special exemption, in order to allow purchase by non-municipal utilities, while still retaining tax exempt status. The taxable bond investigation will include investigation of cooperatives and other ultimate users. Capital Requirements: This investigation will be closely tied to the engineering work and will result in detailed estimates of plant and coal facilities, transmission facilities and other facilities. Next a schedule of cash flow requirements will be developed. Other elements in the capital requirements to be investigated will include reserve requirements, capitalized interest and financing expenses. Financing Structure: Following completion of the work described above, the project financing structure will be defined in terms of construction financing and long term financing. The construction financing will be defined in terms of long-term or short-term notes, single or multiple issues and the distribution of risk between the City of Nenana, power purchasers and external interests. The long term financing will be defined with regard to the term of the bonds, call features, credit enhancement and issue structure. Definition of the financing structure will be completed upon sale of long term financing bonds. { ie ie | BUDGET EDUL E ORGANIZATION é t 1. | | H Cost Ee ccccceccsccece FY 1988 ---------- cee e nee D Krcccccccececce Soils Investigation 200.0 Mapping 125.0 Permitting/Public Involvement 375.0 Permit Preparation Permit Review & Approval Public Involvement Project Management 425.0 Impact Assessments Transportation 190.0 Environmental 350.0 Socio/Economic 320.0 Plant Process Analysis 150.0 Preliminary Engineering 800.0 Engineering Documents Site Civil 350.0 Construction Cost Estimating 200.0 Vendor Agreements 55.0 Power Sales Agreements 175.0 Utility Discussions Contract Negotiations Legal review 325.0 Owner Administration 275.0 Bond Package/Sale Begin Construction (Site/Civil) 4,315.0 Contingency 432.0 4,747.0 Figure 10 — Project Budget & Schedule PAGE 31 Task Leader Legal/Financial PAGE 32 Project Owner City of Nenana Heat & Power Authority Task Leader Project Control, Management Financial Analysis & Implementation Task Leader Permits, Impacts & Public Involvement Task Leader Engineering Environmental Permitting Socio-Economic Analysis Preliminary Site/Soils Design & Mapping Transportation Analysis Figure 11 - Project Organization t I | 1 4 ERING NE ENG -> RY - | | (NG STATION, aS ae Page 33 7. PRELIMINARY ENGINEERING WORK PROGRAM The preliminary engineering phase of the Nenana Coal-Fired Generating Plant development project will be composed of four tasks as follows: 1) Project Management and Implementation Plan; 2) Legal/Financial Analysis; 3) Technical Analysis; 4) Engineering Support. The work to be accomplished in each of these tasks is described in subsections below. 7.1 Project Management and Control This task will entail completion of two subtasks as follows: 1) Project Management; 2) Development of a Long Range Implementation Plan. Each of these subtasks is described below. Project Management: This project will be performed by the City of Nenana and the City‘s project team. The result of this task will be delivery of project products on time, within budget and consistent with the standards required by grant agreements between granting Agencies and the City of Nenana. Activities accomplished under this task will include the following: * Finalize and activate project agreement/scope * Establish detailed project schedule * Establish detailed project budget * Coordinate input of specialized consultant services * Coordinate implementation of regulatory, legal and policy requirements into the design concept * Support coordination and conduct of public involvement * Provide written status reports for circulation to the City of Nenana, the State of Alaska, the United States government, other government bodies and organizations, the general public and the project team * Assure that all review comments from the public, interest groups and organizations, the City of Nenana, the State of Alaska, the United States government, railbelt utilities, local governments and the project team are incorporated into the project deliverables or that appropriate response is provided * Prepare and present interim and final project reports Project Implementation Plan: The implementation plan will consist of the action plans from other tasks below, as well as a descriptions of management actions and items required to design and construct the facility. The description of management actions and items will include the following: * Implementation actions with personnel, budgets, key dates and phases for all aspects of the project * Heavy engineering contract support, including contract documents and specifications * Other appropriate management items * Action plans from tasks 7.2-7.4 below Page 34 7.2 Legal/Financial Analysis Legal/Financial Analysis will be composed of four subtasks, including: 1) Conduct of Task Support and Development of Implementation Actions; 2) Legal Analysis; 3) Financial Analysis, and 4) Development of Vendor/Buyer Agreements. Each of these subtasks is described below. Task Support and Implementation Actions: This subtask will result in control and oversight of work conducted on the subtasks below, as well as production of a statement of legal/financial actions required as a part of the overall Project Implementation Plan. Each of these elements is described in more detail below. 1. Task Support: Work conducted under this element will include development, implementation, monitoring and control of budgets, schedules and work assignments for the Legal/Financial task. In addition this element will provide resources for quality control and coordination of the Legal/Financial task with other tasks in the project 2. Implementation Actions: Work completed under this element will include development of a description of Legal/Financial-related actions required over the long term, through construction of the Nenana Coal-Fired Generating Plant. These descriptions will be obtained as a result of work completed throughout all subtasks, including the present subtask. The activity descriptions will include the following items: * A detailed description of key activities, including personnel, budgets, dates and phases * Analysis of land use, environmental, energy and other regulatory requirements and methods for eliminating impediments posed by these requirements * Analysis of commercial, tax and bonding requirements * Analysis of utility law problems and opportunities associated with plant operations * Development of detailed cash flow, cost and revenue projections * Development and implementation of a project financing plan * Evaluation of long range energy demand projections and relating those projections to plant design and vendor/buyer agreements * Development and execution of vendor/buyer agreements Legal Analysis: Work in this subtask will be delineated in the implementation plan. This work will include an examination of the legal, environmental and regulatory requirements for construction of the facility, an examination of the legal and regulatory framework within which the City of Nenana, as the plant’s operator, will have to function and an examination of the legal requirements for financing the plant, including tax exempt bonds or other means. Financial Analysis: Work in this subtask will be defined in detail by the implementation plan and will coincide with the approach assumptions delineated in subsection 5.6 of this document above. Page 35 Development of Vendor/Buyer Agreement Requirements: This subtask include development and execution of agreements between the City of Nenana and vendors/buyers, including power sales agreements. This work will include identification of potential vendors/buyers, definition of agreement terms, coordination with other project team members and preparation of agreements for execution. Potential vendors and buyers and their requirements will be identified and defined for power sales and transmission, coal purchase, coal shipment, waste ash shipment and sale/disposal, land purchase/lease and other appropriate areas. Potential vendors and buyers will be involved in specific design and scheduling decisions made by management, and modifications will be made to draft agreements as required. Final agreements will be drawn up for execution prior to bond sales. Page 36 7.3 Permits, Impacts and Public Involvement This task will be composed of five subtasks as follows: 1) Task Support and Implementation Actions 2) Socio-Economic Analysis; 3) Environmental Analysis; 4) Transportation Analysis, and 5) Public Involvement. Each of these subtasks is described in detail below. Task Support and Implementation Actions: This subtask will result in control and oversight of work conducted on the various other subtasks, as well as production of a statement of technical research and development actions required as a part of the overall Project Implementation Plan. Each of these elements is described in more detail below. 1. Task Support and Oversight: Work conducted under this element will include development, implementation, monitoring and control of budgets, schedules and work assignments for the Technical Analysis task. In addition this element will provide resources for quality control and coordination of the Technical Analysis task with other tasks in the project 2. Implementation Actions: Work completed under this element will include development of a description of technical research and development-related actions required over the long term, through construction of the Nenana Coal-Fired Generating Plant. These descriptions will be obtained as a result of work completed throughout all subtasks, including the present subtask. The activity descriptions will include the following items: * A description of key activities, personnel, budgets, dates and phases for technical research and analysis and other development-related work to be undertaken during preconstruction * Preparation of a socio-economic impact statement for the project * Preparation of an environmental impact statement for the project * Identification of principal transportation issues and opportunities relating to the plant, including recommendations for action * Conduct of the project public involvement program * Preparation of support plans, programs and recommendations in the areas of land use, public safety, health and welfare, education, cultural resources and employment Socio-Economic Analysis: Work in this subtask will result in development of a socio-economic impact analysis of the project, including specific measures the community should take to mitigate impacts and/or enhance development opportunities. This work will include inventory and acquisition of an socio-economic data base, examination of the socio-economic regulatory framework, an audit of proposed project implementation tasks and measures, vis-a-vis their relation to the regulatory framework, development of an economic model for Nenana, a statement of the principal socio-economic implications of proposed development alternatives and scenarios and development of detailed plans and programs required as a result of the project. Page 37 The data base and regulatory framework examination will include, but will not be limited to, examination of land use, demographic characteristics and projections, economic conditions and forecasts, development of new industrial bases, programmed capital improvements and governmental structures. The audit of project tasks will yield a new range of economic assumptions and projections for the community. The data base, regulatory examination and project task audit will then be used to develop an economic model for the community. This model will show anticipated ranges of growth, development and change under the range of assumptions and guidelines acquired in the data base, regulatory examination and project task audit. These assumptions, guidelines and model outputs will then be used to produce detailed plans and programs of actions the City should take to mitigate impacts and enhance opportunities. These plans and programs will include the following: * a comprehensive land use plan * development of specific methods for attracting and keeping timber and agricultural industry in the Nenana area * development of specific actions required to mitigate development impacts in the areas of public safety, education, health and welfare, cultural resources and employment * completion of appropriate economic development grant documents Environmental Analysis: Work in this subtask will result in the development of a Project Environmental Impact Statement (EIS), acceptable to State and Federal regulatory Agencies, local government, interest groups and the general public. Work on the EIS will include inventory and acquisition of an environmental data base, examination of the environmental regulatory framework, an audit of proposed project implementation tasks and measures, vis-a-vis their relation to the regulatory framework, a statement of the principal environmental implications of proposed development alternatives and operating scenarios and _ detailed environmental analysis of the project and mitigation of environmental impacts. The environmental data base will include information on plants, wildlife, air quality, water quality, noise, soils, aesthetics and other matters. The examination of the regulatory framework will be closely coordinated with legal analysis. This examination will include regulations and policies at the Federal, State and local level, regarding air, water and solid waste pollution and management requirements. The examination will also include appropriate elements from the Resource Recovery and Conservation Act and the Superfund/Toxic Waste Act. Any probable changes to the regulatory framework will be noted. A regulatory "check list" will be developed from this review. Page 38 Next the individual development alternatives and operating scenarios under consideration by the engineering and transportation members of the study team will be reviewed. These tasks and measures will be applied to the checklist, and a statement of potential or probable environmental concerns will be issued for each alternative or scenario, including an assessment of the relative importance of the concern and the probable, required mitigation measured. This interactive process will have the affect of inputting environmental concerns to the design process, thus providing early opportunity to modify designs or amend cost estimates in the preliminary stages of the project. The EIS will show the principal areas of environmental concern in the plant design, how those concerns were modified or will be mitigated during development. The EIS will also show actions needed to investigate and monitor environmental concerns through the construction and operation phase, including key actions and dates, personnel required and a budget for these personnel. Transportation Analysis: Work in this subtask will include examination of the means of shipping coal to the plant, transportation of plant waste and by-products, localized transportation of labor force and goods, during and after construction, and transportation of plant construction materials and plant equipment. Following acquisition of a data base on existing conditions, transportation subtask personnel will review alternatives and findings in the areas of socio-economic impacts, environment and engineering in order to assess likely transportation impacts of the new plant on the transportation infrastructure. The assessment of likely impacts will take into account programmed capital improvements, potential capital improvement needs, railroad and highway operating characteristics, capital and operating cost ranges and transportation policy. Following this assessment a report will be issued showing key transportation issues stemming from design and operating alternatives under consideration. These transportation issues will include the following: Page 39 * coal volumes by origin and destination * probable best means of moving the coal, by mode, in relation to costs, impacts and the policy setting * capacity of the existing transportation system * ranges of capital improvements required * likely Alaska Railroad Corporation operating scenarios relating to coal shipment * cost estimates per ton-mile for coal transportation * types, methods and impacts of moving plant construction materials and equipment, to the extent they are relevant to design decisions * impacts of employee travel, transportation of waste and by-products and other plant-related demands on State and local streets and highways * financial impact of the plant on the Alaska Railroad Corporation, particularly in regard to the Corporation’s objective of becoming self- sustaining * streets and roads plan for Nenana * community transportation plan * economic analysis of the proposed new dock facility on the Tanana River (see Section 4 above) Public Involvement and Permitting: Public Involvement will consist of meetings with interest groups, utilities, government Agencies, private organizations and the general public, as well as production and dissemination of reports, findings and recommendations. Meetings with interest groups, utilities, government Agencies and private organizations will be continuous throughout the project. These meetings will be conducted in order to provide accurate and timely project status reports to affected and interested parties, as well as to obtain information regarding concerns and suggestions. Public hearings will be scheduled as required, to provide reports on major project accomplishments and findings and to obtain information regarding concerns, opinions and suggestions. Meetings will also be held with railbelt media personnel to further distribute project-related information. Finally published materials will be provided to groups, Agencies and individuals expressing a desire for such materials. The results of the public involvement program will become a part of the project record. Permit applications will be developed as a result of information received from the engineering, environmental, socio-economic and transportation products. These applications will be discussed during public meetings, submitted and modified as required for final approval. Page 40 7.4 Engineering This task is composed of a number of inter-related subtasks described below. Task Support and Action Plan: This subtask will include support for engineering efforts and development of an action plan for engineering aspects of the project, through the construction phase. Each of these work elements are described below. 1. Task Support: Work schedules, coordination, quality control, budget control and report preparation will be accomplished in this work element. These functions will be continuously updated throughout the Project. 2. Action Plan: This work element will culminate in production of an action plan for engineering aspects of the project, including a description of actions required, personnel, budgets and schedules through the construction phase of the facility. Soils Investigation and Geotechnical Analysis: This subtask will include examination of the area, preliminary soils investigation and production of findings and final soils investigation and production of findings and recommendations. Examination of the area will include a geotechnical analysis of existing aerial photographs. Following this examination a drilling program will be conducted to confirm the siting of various project components. This program will be provided to engineering team members responsible for plant, support facility and site design. Following a review of the preliminary soils investigation by these team members, a detailed soils investigation will be undertaken. This investigation will include new aerial photography as required, additional drilling and production of final findings and recommendations to be used in the detailed site analysis below. Flood Hazard Analysis: A flood hazard analysis for the proposed site will be prepared. The "design flood" will be defined for use in the Legal Analysis, Socio- Economic Analysis, Environmental Analysis and related engineering work. A report on flood hazard considerations and definitive recommendations will be generated from this work. Site Analysis: This subtask will include evaluation of the proposed site in terms of hydrology, geology, permafrost and other soil conditions, based soil samples, new data collection, review of existing documentation and completion and review of aerial surveys. In conjunction with the flood hazard analysis, this work will be used to determine the optimum foundation arrangement, site design and soil conditions. The results of this review will be presented in a general report on the site to be used in conjunction with site civil design, process and plant selection and schematic design (see below). Page 41 Mapping and Surveying: The results of this subtask will be presented on a site map of the scale 1:200, containing two foot contours and indicating the proposed location of the preferred area of site development. Site Civil Design: This work will include design of the access road, to the project site, the bridge over the Nenana River, a rail spur into the site, landscaping, fencing and other improvements. Process Selection and Plant Size: This subtask will result in the preliminary engineering for technical features of the plant, the total capacity of electrical power generation, the recommended number of generating units and the sizes of individual generating units. This work will be accomplished in several consecutive steps, through evaluation of data and information developed in other tasks, as well as close coordination with the requirements identified as a result of Technical and Legal/Financial analysis conducted in tasks 7.2 and 7.3. In particular this work will include the following items: * assessment of electrical power requirements, transmission line characteristics, load flows in the system, load variations on typical winter and summer days * comparison of the proposed generation plant with other existing generation facilities and projected future power requirements * evaluation of fuel properties and characteristics * environmental issues and proposed solutions relative to such things as sulphur dioxide, NOX, ice fog, dust emissions, ash disposal, etc. * selection of the most suitable type of firing system * selection of other technical features and identification of the main parameters covering the primary subjects of regulations, economy, infrastructure, mode of control and protection, ease of operation and maintenance, etc. * detailed calculation of fuel consumption, limestone consumption and ash production * preparation of a draft report and drawings describing the selection of process and plant size * coordination of the draft report recommendations with the opportunities and constraining requirements developed within other tasks * preparation of a final report on the process selected and the proposed plant size and will include, in conjunction with the "Process Support Facilities" subtask below, bid descriptions for all long lead time project elements, including boilers, turbines, pumps, condensers and bag house Preliminary Design: All elements of the project will be carried through a schematic design of a level appropriate to accurate construction cost estimating. One line diagrams will be produced of all processes; building foot-prints will be developed, written descriptions of each project element will be produced in support of cost estimating, and performance criteria for all major elements of the project will be developed. The following project elements will be included. Page 42 * coal storage and handling facilities * steam generating plant, including flue gas precipitator * ash handling plant * turbine generation plant including condenser * circulating water system * feedwater system * make-up water treatment * instrumentation and control * electrical equipment (switchgear, transformers, bus bars, distribution, electrical protection, cabling, etc.) * auxiliary equipment (cranes, hoists, workshop, laboratory) * site support systems The determination of plant personnel requirements and preparation of an operational staff list, subdivided into management, administrative, technical and non-technical personnel per shift, will be performed. The configuration of the components, as determined in this task (¢.g., tower-type boiler or two-pass boiler, steel or reinforced concrete structure) will be incorporated with the site analysis. A model of the site development will also be produced. Support of Bid Document Preparation: Technical and performance specifications will be developed for all major "long lead time" equipment items. This work will be performed in support of subtask 7.1 above. Cost Estimating: Within this subtask power station installation cost and cash flow analysis will be performed. These projected costs will be based on the selected process, the required process support facilities and the schedule for implementation. Power generation costs will be calculated, based on estimated investment cost and calculated fuel consumption. Operation costs will be based on generation cost, manpower requirements and estimated maintenance requirements. Unusual aspects relative to the region, such as permafrost, average income of local manpower, local cost of living, etc., will be included in the estimates, and these estimates will be broken down into funds reasonably expected to remain in Alaska and money which might be distributed outside of the State. In addition the project construction schedule will be prepared. S TERIAL! TON RAILPELT DESY REQUIPENENTS 17198798807) ssa aML TRE OH HOOVEE MNICIPA LIBMT RD POR Ch ee ee cc A | OUG:D4 ELECTRIC ASSOCIATION (RETAIL 933.7 976.9 978.2 FOB} 1,000.1 F940 1,018.7 1,008.3 1,086.6 78.3 1,007. 1,020.4 105.3 1,048.7 1,008.8 1,001.2 YOR ELECTRIC ASSOCIATION Wh) SP D308 DD DD ODD ADD? PAIRLSKA ELECTRIC ASSOCIATION Vet 08.20 OO ESD OD 0S SL SIO ST CITY OF sewad M900 a Ck] OS 2.2 S/STEA LOSSES 155.) 08022 BSA US STS tt TOIA, (CEA) 1909.2 2000.5 -2007,22006,7 01. LALA LD HOST. YI 8 FEL 2e0$ MUNICIPAL UTILITY SYSTDX : 1.2 TYG HUES TORN OS ALS. 2S BELION VELLEY ELECTRIC ASSOCIATION SUS SMO AND $52.2 SIS S97 SDI VOTER BLECTRIC RGSOCIATION 12.0 473.0 (3.0 30.0 ALS ASLO 50 510.0 490.040.0060. 80S.0 510.0 OUGOH ELECTRIC ASK 3.7 97D NTS DDD att WAT BIB BI SO ooo ALUSA ELECTRIC ASN LTDTALD 478.5 473.2 O40 . OLS 479.2 4e4,0 437.0 496.1 573.6 524.6 37.4 32.8 MO Was 43.7 my CUGOH DECTRIC ASH O81 O32 00 Oks eR SS SHO FEST (BRADLEY La) 00 600i LTS SOO OS OOS CIV OF StwRD MPM SSS SP 101m 3,550.0 3,652.3 3,062.0 3,720.2 3,701.8 3851.6 3,910 1,005.4 A051 A02S 4078 4138S 41980 4708 477.0 847.2 = CRPECITY REQUIREMENTS PER NrAD HOORSE MUNICIPAL LIB NO POER OO 1667 161882 HSH 088A MBS te OR OUSAO1 ELECTRIC ASSOCIATION 19,3 198.4 19701978198) HRSB 1980 0 OMS AWTS ASG 202 ted” 20h FRIRBYES PNICIPAL UTILITY SYSTER MS 0 SE MAS EO.TEW VRLLEY ELECTRIC ASSOCIATION B58 923 OE 1070 108,88. ntee HOPER ELECTRIC RESOCIATION 1.00 «60S BLO $5.0 «1.0900 00S PATALSKA ELECTRIC ASSOCIATION 90.3 «0 SUSE Sid 9S LS 1058 LTS OOS RD HOH? SEvEAD 10.0100 1.0 1S ARPANSA SOEs TODA SYSTEN PEEK WUT 670.3 BB HEB IH 2H SHOALS SKA 8897.7 PESER.E PEQIIREFERTS BLOCKAGE AAEM 133.7 138.0 1 nr Cc TC TRIRE'S AEA 60.9 40.8 60.9 60.9 40.9 EOP HO LOLS SSD AEMAS PERKINSULA wo (38.0 S10 S10 5050 SO SHO SHS SHO 82S TOT RESENE REQUIREPENT 2326 7.e 237.0 2st 249,8 Pi 351.0 T.0 2b.) M2 232.6 74.3 58.2 73.7 28.9 20.) GIR SYSTEM CAPECITY REQUIREMENT 3 107.218. 92HA Wit 3.4 3.6 992.2 1,004.3 ht WS.8 9,008.7 1,022.8 1,068.6 1,086 FIT Alaska Power Auth¢ January 1987 Note: This forecast is being used for: Preliminary Economic Assessment. of Railbelt Transmission Alternatives A-1 al Location Alakanuk Anvik Bettles Chevak Circle Emmonak Fairbanks Area Fairbanks Area Ft. Yukon Calena Crayling Holy Cross Hooper Bay Hughes Huslia Kaltag Kotlik Lake Minchumina Manley Hot Springs Marshall Minto Mt. Village Northway Nulato Pilot Station Rampart St. Mary's Pitkas Point Andreafski Scammon Bay Shageluk Tanana Tok TOTAL Symbol AVEC AVEC BL&P AVEC cE AVEC FMU GVEA Gzuc M&D AVEC AVEC AVEC HuP$L AVEC AVEC KC $s MUC AVEC AVEC AVEC NP&L AVEC AVEC wIc AVEC AVEC AVEC AVEC AVEC TPC AP&T E VBVAHAAAQAAWPAANQBDENOAWVDBIEANIANMBVOENONADWDABNAGNEANIB!AIA’DVAN ALASKA REGULATED & UNREGULATED UTILITIES Yukon Region-1985 UTILITY Hydro iocooooooocoocooooooooooocooooooooeococoeoeso Oo (Page 1 of 2) INSTALLED Diesel Ic NAMEPLATE Gas Turbine eooooooooooooooooocooocooooeoeso Steam Turbine 0 ° o 0 0 0 500 000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 CAPACITY (Kw ALASKA POWER AUTHORITY 12/86 i t { ' zt Location Symbol Anchorage AML&P Anchorage CEA Anchor age-Palmer MEA Anchor age-Palmer APA-E Chi stochina cTP Cordova CEC Clennallen CVEA Homer-Kenai Penin, HEA Kodiak & Pt. Lions KdEA Terror Lake (KdEA) APATL Larsen Bay LBES Old Harbor AVEC Paxson Lodge PLI Seldovia HEA Seward SES Valdez CVEA Solomon Gulch (CVEA) APASG TOTAL T *Terror Lake peak is included in KdEA's peak. o = HOBaADCSEBTUNOAOATAA HST ) ALASKA RECULATED & UNREGULATED UTILITIES Southcentral Region-1985 (Page 1 of 2) UTILITY INSTALLED Diesel Ic NAMEPLATE Cas Turbine CAPACITY (KW Turbine ALASKA POWER AUTHORITY 12/86 Operator UAF Healy Coal GVEA FMUS Military APPENDIX A Existing Electric Power Generation Capacity on the Railbelt Fuel Coal Diesel Coal Diesel Diesel Diesel Diesel Diesel Diesel Diesel Diesel Coal Coal Coal Diesel Coal Diesel Diesel Diesel Diesel Oil Oil Oil Oil Coal Coal Capacity(mw) LS 275 25.0 2.75 64.7 64.7 18.4 17.4 2.8 2.8 21.0 5.0 2.0 1.5 1S 20.5 23.1 2.75 245 2:75 25 6.25 3.0 ZS 20.0 2.0 Pos $e PCB arr Soak ‘ @ a. + ENDIX B DULE eee RSS i. — “APP NENT SCHE RAILBELT EXISTING EQUIPMENT RETIREMENT SCHEDULE AMLP CEA HEA SES PMS GVEA TOTAL RAILBELT Annual Cumulative Capaci Unit Capaci Unit Capaci' Unit Capacity Unit Capacity Unit Capacity Unit Capacity Capacity Year Retired _Nanol/ Seticed” ions ae Retired Name -—§« Retired — Name Retired Name Retired Retired Year 7 || oer io 4 Ul TH (Hay CH Hay (Hy 1985 6.1 GHENT & 6.1 6.1 1985 1986 6.1 1986 1987 6.1 1987 1988 8.9 BERNCT #1 8.9 15.0 1988 1989 15.0 1989 1990 32.4 AMLPCT #162 0.3 SELDIC #1 3.0 SESIC #162 3.7 50.7 1990 1991 19.9 AMLPCT #3 5.7 DSLIC #1,2,63 25.6 76.3 1991 1992 33.8 AMLPCT #% 84 FMSIC #1,2,63 42.2 118.5 1992 1993 118.5 1993 1994 32.2 BELCT #182 0.6 SELDIC #2 32.8 151.3 1994 1995 2.5 SESIC #3 2.5 153.8 1995 1996 58.5 BELCT &, 3.8 UAFIC #768 62.3 216.1 1996 INICT #1 2,63 1997 18.4 BERNCT #2 2.6 HEALIC #2 21.0 237.1 1997 1998 237.1 1998 1999 156.8 AMOC #56876 116.8 BELCT #365 273.6 510.7 1999 2000 0.6 SELDIC #3 8.6 CHENST #1,2,63 5.2 DSLIC #586 44 525.1 2000 2001 18.0 Z2NCT #1 18.0 343.1 2001 2002 43.0 HEALST #1 43.0 586.1 2002 ZENCT #2 2003 586.1 2003 2004 54.4 BERNCT #354 Ho 0.5 2004 2005 20.0 CHENST #5 20.0 660.5 2005 2006 26.1 . CHENCT #6 @.9 NOPOT #1 87.0 747.5 2006 2007 201.2 BELOC #68678 @.9 NOPOCT #2 262.1 1009.6 2007 2008 1009.6 2008 2009 87.0 AMLPCT #8 87.0 1096.6 2009 2010 1096.6 2010 2011 1096.6 2011 2012 0.6 SELDIC &% 0.6 1097.2 2012 Total 323.9 490.4 2.1 5.5 9.2 200.1 1097.2 Not Retired: Eklutna 30.0 Cooper 17.4 Total Online: 1144.6 / Key to plant types: OC: Gas-fired combined cycle CT: Cambustion turbine H: roelectric IC: Oil-fired internal combustion (diesel) ST: Coal-fired steam turbine 401271 EXHIBIT 12 851107 MATION “3 =2. or INF AL | ' JSIBELLI COAL MINE, INC MARKETING 2173 University Avenue So. December 16, 1986 TO: Mr. Steve Bainbridge Suite 101 Fairbanks, Alaska 99709 (907) 479-2630 FAX 479-2793 The proximate and ultimate analyses of standard specification coal from Usibelli Coal Mine are as follows: Parameter Average Assay Heat Value (BTU/1b) © 7820 Moisture Content . 26.15% Ash 8.66% Volatile Matter 35.42% Fixed Carbon 29.78% Sulfur Content 0.18% As received * As received As received ak *Range 7600-8300 BIU/1lb. In first three months of 1986 heat value has averaged in excess of 8000 BIU/lb. **Rarely exceeds this value. In addition the ash-fusion temperature of Usibelli coal falls within the following range: IDT (oxidizing) 2100 - 2350 Degrees Fahrenheit (Average: 2150 Degrees Fahreneheit). incerely, John Sims VICE-PRESIDENT MARKETING Comparison of Healy Coal to Some U.S. Coals Coals are typically described as belonging to four general classes: Anthracite, Bituminous, Subbituminous and Lignite. This classification scheme generally cor- responds to the heating values of each class. Anthracite coals have the highest heating value at around 12,500 BTU per pound, while the lignite is the lowest quality having a heat value of about 7,000 BTU per pound. The following table compares the laboratory analysis of two coals mined in the contiguous States with Healy Coal. Subbituminous C Lignite Healy Wyoming( 1) North Dakota(1) Alaska(2) Heat Value(BTU/Lb) 8,560 7,000 7,820 Moisture Content (4%) 25.1 36.8 26.2 Ash (4%) 6.8 ' 5.9 8.7 Volatile Matter (%) 30.4 27.8 35.4 Fixed Carbon (4%) 37.7 29.5 29.8 Sulfur Content (4%) 0.3 0.9 0.18 Notes: (1) From Standard Handbook for Mechanical Engineers (2) Healy coal is classified as a "low sulfur" subbituminous coal. Some coal contain as much as 4% sulfur, 26 times the amount contained in Healy coal. Being classified as subbituminous, Healy coal has a relatively low heating value as can be seen by the table above. C-2 COMPARISON TVA NSP (WESTERN KENTUCKY) = (MONTANA) Carbon, % 53.8 49.7 Hydrogen, % 3.7 3.2 Oxygen, & $.3 10.7 Nitrogen, % 1.1 7 Sulfur, & 4.4 9 Moisture, % 12.8 23.9 Ash, & 19.2 - 10.8 HHV, KJ/Kg 23,957 19,770 (Btu/Lb.) (10,300) (8,500) TABLE 3 UTILITY-SCALE AFBC UNITS Size utility Ime )) City of Duisberg 96 Wisconsin Electric Power Co. 120 Texas-New Mexico Power 156 Montana-Dakota Power — 70 Note: TABLE 2 OF BASE FUEL ANALYSES FOR AFBC DEMONSTRATIONS c-3 COLORADO-UTE (COLORADO) 55.17 3.63 7.51 98 ota 5.86 26.08 22,545 (9,693) No. of Units ~ > >» "AFBC" means atmospheric fluidized bed. The source for this data is the Electric Power Research Institute (EPRI) in Palo Alto, California. gees ate 1 a or ae SRIPTION APPENDIX D DESCRIPTION OF THE NENANA AREA Community Location, History and Population: The Nenana townsite is located in Interior Alaska, at the confluence of the Nenana and Tanana Rivers, approximately fifty miles southwest of Fairbanks, Alaska. Originally an Athapascan fishing site and village, the modern Nenana community was established about the turn of this century as the site for the Saint Marks Indian Mission. In 1908 the community was the scene of a gold rush, and a Post Office was established at Nenana in that year. In 1918 the community became the northern headquarters for construction of the Alaska Railroad, which was completed in 1925. Today the City of Nenana population is about 550 persons, of whom approximately 40% are Athapascan or other Alaska Native and 60% are white. Approximately 1,000 persons reside in the area within and immediately surrounding the City limits. Climate and Geography: Nenana’s climate is influenced by the the Alaska Range to the south, which controls local weather patterns. In general the climate is typical of Interior Alaska. Winters are cold and clear, with temperatures ranging to below 50 degrees (minus 46 degrees C). Summer temperatures range to the upper 70 degree range (middle 20s C). Mean annual precipitation is 11.4 inches (29 centimeters). Winter sunlight is four hours or less, and summer sunlight is twenty hours or more. Nenana is at 350 feet elevation and is located about 800 river miles from the Bering Sea, by way of the Tanana and Yukon Rivers. The river gradient at Nenana is about one foot per mile. Industry and Employment: Nenana is a transportation center for the Tanana and Yukon River valleys, owing to a number of factors including the following: * Nenana’s location downstream from Fairbanks on the Tanana River, a tributary of the Yukon River. * The lack of obstructions to heavy marine traffic between Nenana and the mouth of the Yukon River. * The Nenana port can accommodate barges with drafts of fifteen-twenty feet, for transshipment of goods to communities located along the Tanana and Yukon Rivers. * The Alaska Railroad serves Nenana. * Nenana is located along the Parks Highway, a portion of the United States Interstate and Defense Highway System. * Nenana is located along the Fairbanks-Anchorage electrical intertie. * The City owns and operates a 1,000 acre airport, with a 5,000 foot paved, lighted runway and a 4,000 foot float plane basin; the airport runway can be expanded to 6,000 feet D-1 The City of Nenana is in the process of developing the economic base in the community to exploit Nenana’s role as a transshipment center. The City recently created the "Nenana Port Authority" to own and operate the 238 acre, Nenana port and related facilities and to promote economic development in the area. The Nenana Port Authority recently expanded the Nenana sheet pile, bulkhead facility through construction of an additional 1,500 feet of dock and a new 10,000 square foot warehouse. The City has also created the "Nenana Heat and Power Authority,” responsible for generation and sale of electrical power and related activities. Mining has an economic impact on Nenana, owing to the proximity of coal mines at Healy, fifty miles to the south, and gold mines in the immediate Nenana area. Nenana helps support a substantial national defense-related industry, sponsored by construction of a major radar site at the community of Clear, twenty miles to the south of Nenana, along the Alaska Railroad. In addition to local commerce, the major occupations in the Nenana area are highway construction and maintenance, gold and coal mining, defense industry construction, education and public administration. Several feasibility studies and other preliminary work conducted in recent years have shown that a timber industry can be supported in the Tanana River valley, if a reliable source of power and waste heat is made available to the industry. In addition a reliable source of waste heat may make development of a year round agricultural industry feasible in the Nenana area. During the design phases of the present project, the City will examine the costs and benefits of beneficiation at the Nenana generating plant ("beneficiation" is the process whereby waste heat from the generating facility is used to dry coal for use as a fuel at the plant or for sale elsewhere). D-2 t is { | ee tL co P MPONENT Project Components and Foot Prints A - Plant and Accessories Page 1 of 4 Plant Building Size Reactor House 22,500 sq.ft. Turbine House 22,500 sq.ft. Central Control Room 2,000 sq.ft. offices - Production Superintendant 200 sq.ft. - Shift Superintendant 120 sq. ft. - Plant Engineer 120 sq.ft. - Conferance 320 sq.ft. - Clerical, Records & Files 500 sq.ft. - Library/Plan Room 500 sq.ft. Shops - Welding 800 sq.ft. - Plumbing 800 sq.ft. - Machine 800 sq.ft. - Electrical 800 sq.ft. - Insturments/Electronic 800 sq.ft. Plant Vehicle Garage 600 sq.ft. Plant Stores 5,000 sq.ft. Toilet/Shower Rooms 400 sq.ft. Locker Rooms 600 sq.ft. Laundry 300 sq.ft. Employee Lunch Room 400 sq.ft. Laboratories - Fuels 350 sq.ft. - Water 200 sq.ft. Allowances - tools, equipment and furnishings - circulation space 9,092 sq.ft. Plant Totals 69,702 sq.ft. Baghouse and Stack (foot print) 30,000 sq.ft Water amd Air Cooled Condensors 18,000 sq.ft. (foot print) Switch/Transformer Yard 160,000 sq.ft. (foot print) E-1 Project Components and Foot Prints SSS SSsSeSseeeeSes=sSssses=esssqsSss=E=EESSS=EESES SSE SSS SS =SSSS=== B - Support Buildings Page 2 of 4 a == SS SSS E555 5555S S>S>>>=— Administration Building Size Reception/Security 400 sq.ft. Offices - General Manager 400 sq.ft. - Comptroller 160 sq.ft. - Administrative Manager 160 sq.ft. - Outside Plant Superintendant 160 sq.ft. - Chief Electrical Engineer 160 sq.ft. - Chief Mechanical Engineer 160 sq.ft. - Engineering/Drafting 320 sq.ft. - Accounts Payable/Payroll 400 sq.ft. - Clerical 320 sq.ft. Office Storage 160 sq.ft. Conferance Room 250 sq.ft. Board Room 2,000 sq.ft. Records Storage 400 sq.ft. Allowances - tools, equipment and furnishings - circulation space @ 20.0% 1,090 sq.ft. Warehouse Warehouse office 200 sq.ft. Chemical Storage 15,000 sq.ft. Plant Supplies 10,000 sq.ft. Shops Supplies 10,000 sq.ft. 35,200 sq.ft. Vehicle Shops & Warm Storage Vehicle Shops 1,440 sq.ft. Warm Storage 2,880 4,320 sq.ft. Project Components and Foot Prints c - Civil Improvments . Page 3 of 4 sizes Rail Spur & Car Storage Track 12,000 L.ft. Fuel Oil Storage Tank (500,000 gallons) 1,800 sq.ft. Paved Areas Spaces Rail Side parking (heated) 3 1,050 sq.ft. Rail Side parking (wo/heat) 12 4,200 sq.ft. Plant Parking (heated) 30 10,500 sq.ft. Plant Parking (w/o heat) 20 7,000 sq.ft. Admin. Parking (heated) 14 4,900 sq.ft. Admin. Parking (w/o heat) 10 3,500 aq.ft. River Dock Marshalling Area 60,000 sq.ft. Site Drainage and Out-Side Storage 20,000 sq.ft. Sub-Total of Paved Areas 111,150 sq.ft. Coal Yard 100,000 sq.ft. Water Intake Structure and Pipeline 800 L.ft. Water Discharge Structure and Pipeline 800 L.ft. Dock Structure 400 L.ft. Access and Circulation Roads 8,500 L.ft. Nenana River Bridge — 440 L.ft. Graded Landscaping and Planting Areas Plant Building 22,000 sq.ft. Warehouse 15,000 sq.ft. Administration 8,000 sq.ft. Treatment Plants 10,000 sq.ft. Baghouse & Stack 10,000 sq.ft. Condensors 10,000 sq.ft. Roads 340,000 sq.ft. Parking 25,000 sq.ft. Sub-Total of Lanscaped Areas 440,000 sq.ft. Graded and Drained Gravels Surfaces Rail Yard 25.00 acres Switch Yard 4.00 acres Site Fencing 8,000 L.ft. Project Components and Foot Prints D - Other Support Facilities page 4 of 4 ===> == SS SSS SSS SSS 5555555555555 SSS > >=>=> Ash Handling (foot print) - plant side 1,500 sq.ft. Ash Handling (foot print) - rail side 1,500 sq.ft. Water Treatment Plant (foot print) 10,000 sq.ft. Waste Water Treatment Plant (foot print) 10,000 sq.ft. Car Shaker & Coal Thaw Shead (foot print) 6,000 sq.ft. Coal Handling - plant side (foot print) 3,000 sq.ft. Coal Handling - rail side (foot print) 3,000 sq.ft. Coal Conveyor (100 ton/hour) 1,600 L.ft. Ash Conveyor (10 ton/hour) 1,600 L.ft. Security House 500 sq.ft = COST OF POWER $/cWH Effects of Coal & Capital Costs (other costa constant) 0.076 el ee ee nile. ee el a ee = 0.070 —— a a 0.068 ee El <a ee | die a ee ee dint we ae aan |} ee i a ce ee 0.056 ee en ainda Ke dL 0.052 [St | __—_ wae be et ee ce Gg 0 ee a pd aed ne ae 7 - 30 36 40 COST OF COAL $/TON COsT OF ELECTRICITY Annual Summary of Costs Amount $/kwh % Cost of Coal 14,750,000 0.01963 32.55% Cost of Capital 22,450,000 0.02987 49.53% Cost of Operating 8,120,000 0.01081 17.92% Cost of Electricity 45,320,000 0.06031 100.00% Value of Waste Heat 0 0 Net Cost of Electricity 45,320,000 0.06031 Annual Operating Costs Annual Unit Amount $/kwh Costs - Production labor 4,973,000 0.00662 see attached list - Administrative costs 1,490,000 0.00198 see attached list - Materials costs 500,000 0.00067 see attached list - Ash disposal 355,000 0.00047 7.00 $ per ton - Limestone 590,000 0.00079 15.00 $ per ton - Fuel oil 212,500 0.00028 0.85 $/gal Total Annual Cost 8,120,500 0.01081 COosTS & VALUES - capital investment 243,000,000 - cost of money 8.75% - life of bonds 35 years - price of fuel $30.00 per ton - waste heat sold 5 % of capacity - annual production (E) 751 million KWH - annual production (T) 0.17 trillion BTU - annual coal consumption 491,518 tons - value of waste heat $0.75 per million BTU - ash for disposal 50,725 tons - limestone used 39,321 tons annually - fuel oil consumed 250,000 gals annually PLANT & PROCESS ASSUMPTIONS Assumed Plant Size: 105 MW (E) - overall plant efficency 32.6% - plant heat rate 10,465 BTU per KW - turbine heat rate 9,000 BTU per KW - boiler efficiency 86 % - heat content of coal 8,000 BTU per pound - heat recovery efficiency 70 % - turbine efficiency 80 % - annual production hours 8,322 - in-service rate 95 % of the time - average production rate 86 % MAXIMUM HOURLY OPERATIONAL CHARACTERISTICS Thermal Input 1,099 million BTU (chemical) 69 Tons of coal per hour Thermal Production 945 million BTU (boiler output) Electric Production 105 megawatts (at buss bar) Thermal Energy for Sale 410 million BTU (maximum production) Summary Estimated Capital Costs Cost Element Plant & Accessories 275,000 sq.ft. 6.35 Other Buildings 80,000 sq.ft. 1.85 Civil Improvements 45.00 Construction Contingency @ 15.0% 53.20 Engineering Survey and Geotechnical Analysis Pre-construction 4.00% Construction Administration 2.25% Project Administration Legal & Financial Project Management 1.75% Administrative Contingency 12.0% of non-construction costs Total Construction Budget Other Capital Costs Major Maintenance Reserve Interim Financing Interest Insurance & Operating Reserve Financing Fees Total Estimated Capital Cost acres acres acres acres Estimated Costs 115,000,000 15,000,000 12,000,000 21,300,000 163,300,000 1,500,000 6,500,000 3,700,000 11,700,000 1,200,000 3,100,000 4,300,000 1,900,000 181,200,000 18,100,000 33,300,000 8,000,000 2,400,000 61,800,000 243,000,000 ANALYSIS OF LABOR COSTS - Operating Positions & Wages Direct Number Wages of Positions Plant ~crerteen o—<-syere Shift Superintendents 245,000 4.6 Shift Firemen 226,000 4.6 Apprentice Fireman 42,500 1.0 Plant Engineer 48,000 1.0 Electrical Forman 55,000 1.0 Shift Electricians 226,000 4.6 Machanical Forman 55,000 1.0 Shift Mechanics 226,000 4.6 Instrument Forman 54,000 1.0 Control Mechanics 226,000 4.6 Inside Laborers 85,000 2.0 Custodian : 30,000 2.0 Sub-Total of Direct Plant Wages 1,518,500 32162 Outside Plant Outside Plant Superintendant 55,000 1.0 Outside Formen 232,000 4.6 Yard Men 210,000 4.6 Yard Men 210,000 4.6 Safty & Security 49,000 1.0 Mechanic Forman 55,000 22.0 Equipment Mechanic 49,000 1.0 Warehouse Forman 49,000 1.0 Warehouse Man 45,000 2.0 Equipment Operators 210,000 4.6 Conveyor Operators 210,000 4.6 Treatment Plant Operators 210,000 4.6 Coal Plant Operators 210,000 4.6 Labor Formen 210,000 4.6 Outside Labor 42,500 i.6 Sub-Total of Direct Outside Plant Wages 2,046,500 43.9 Total Operating Wages & Positions 3,565,000 74.9 Indirect Operating Wage @ 35.00% 1,248,000 Total Operating Labor Cost 4,813,000 Contract Engineering 20,000 Contract Maintenance 40,000 Expendables & Small Tools 100,000 Total M&O Budget 4,973,000 F=5 ANALYSIS OF LABOR COSTS - Administrative Positions & Wages SSSSSSSSsseseesesSseseessesSSssS= Ses EESSEEEE SEBS SSSSSSSSS=ES== Direct Number Wages of Positions Administrative Payroll —«—-_-_ nnn nnnna---- General Manager 68,000 1 Production Superintendent 75,000 1 Comptroller 58,000 1 Electrical Engineer 52,500 a Mechanical Engineer 52,500 1 Administrative Manager 48,000 a Engineering Technician 34,500 1 Accounts Payable Clerk 34,500 1 Payroll Clerk 34,500 2 Secretary 32,000 Z Receptionist 28,500 x Custodian 30,000 - Total of Direct Administrative Wages 548,000 12.0 Other Administrative Costs Indirect Admin' Wage @ 35.0% 192,000 Administrative Supplies and Expense 50,000 Lights, Heat and Maintenance 500,000 Security Contract 200,000 Total Annual Administrative Costs 1,490,000 FINITIONS oe ww Gh Definitions of Some Technical Terms The state of the technical American language today is confusing to the tech- nologist, not to mention the layman. Every other technical society on earth has, today, adopted the metric system to aid in communication of technical and commer- cial thought, except for the United States of America. Thus, the following table of definitions is offered in an attempt to provide some explanation of technical terms used in the text of this report. Prefixes: Prefixes used in the expression of electrical units are taken from the metric expressions of electrical units and are defined in multiples of one thousand (1,000). Giga- One billion Gigawatts: A billion Watts. 1,000,000,000 Watts. A million Kilowatts. 1,000,000 Kilowatts. (see watts listed under Power) Gigawatt-hours: A billion Watt-hours. 1,000,000,000 Watt-hours. A million Kilowatt-hours). 1,000,000 Kilowatt-hours). (see watt-hours listed under Energy) Kilo- One thousand Kilovolts: A thousand Volts. 1,000 Volts. (see watts listed under Electric Units) Kilowatts: A thousand Watts. 1,000 Watts. (see watts listed under Power) Kilowatt-hours: A thousand Watt-hours. 1,000 Watt-hours. (see watt-hours listed under Energy) Mega- One million Megavolts: A million Volts. 1,000,000 Volts. A thousand Kilovolts. 1,000 Kilovolts. (see watts listed under Electric Units) G-1 Megawatts: A million Watts. 1,000,000 Watts. A thousand Kilowatts. 1,000 Kilowatts. (see watts listed under Power) Megawatt-hours: A million Watt-hours. 1,000,000 Watt-hours. A thousand Kilowatt-hours). 1,000 Kilowatt-hours). (see watt-hours listed under Energy) Energy: "Energy" and "Work" mean the same thing to the engineer. The exertion of "power" over a period of time. The units of work are: British Thermal Units (BTU) In this paper, thermal energy, or heat is expressed in British Thermal Units. For example, an average home in the Nenana area will require about 200 million British Thermal Units of thermal energy to keep it warm over the period of an average year. That thermal energy is contained in about 1,450 gallons of fuel oil. Similarly, one pound of Healy coal contains about 7,750 British Thermal Units of potential thermal energy. Watt-hours The electrical counterpart of the BTU is the “watt-hour". A 100 watt light bulb, burning for one hour will expend 100 watt-hours of energy. One watt-hour = 3.412 BTU Power: Power is the term that is typically used to express the instantaneous ex- penditure of work. For example the 100 "horsepower" engine has a capability of producing 100 horsepower at any moment. This term is con- trasted with that same engine performing over a period of time, expending horsepower-hours of energy. BTU per hour The instantaneous capacity to produce heat. For example, an average home in the City of Nenana will be heated by a furnace or boiler capable of producing about 150,000 BTU per hour. Seemlier, the same home could be heated with a 45 Kilowatt electric heater. G-2 Watt The watt is the metric counterpart of the BTU per hour. This unit is typically used to indicate the capacity of an electrical appliance to consume or produce electrical power. An electric power plant is typically described by the fuel it consumes, the process it uses to con- vert the fuel to electric energy and its maximum capability to generate power. For example, a coal fired, 100 Megawatt, steam power plant. Such a plant is capable of producing a million watts of electric power at any time. Electrical Units: Amps Amps (or ampere) is the unit of measure that depicts the flow of electrons through an electri- cal circuit. A typical coffee pot requires about two amps of electrical current at ordinary house hold voltage. Volts Volts is the term used to express electrical potential. Even though electricity is not flowing between the power source and the appliance, the voltage can be measured. In household applica- tion, the “electrical potential" (volts) is typi- cally designed to be either 120 or 240 volts. When electric energy is transmitted over long dis- tances, higher voltages are required. Electrical transmission lines are typically rated at "Kilovolt" (1,000s of volt) capacity. Volt—Amps Volt-amps is a term depicting the product of volt- age multiplied by amperage. In the most non- complex electrical system this unit is equivalent to one watt. In complex systems, however, this relationship is not true and, thus, must be expressed as a volt-amp, rather than a watt. The volt-amp is used to distinguish the size of such electrical constructions as electrical trans- formers and transmission lines. We then see the expression Kilovolt-amp (1,000ys of volt-amps) used to express the capacity of electrical trans- mission lines. Definitions of other terms appearing in this report: Ash Ash is the inorganic constituent of the coal that will remain in solid form after the coal is burned. G-3 Combined Cycle Fixed Carbon Heat Value Moisture Content NOX Sensible Heat Sulfur Volatile Matter The term combined cycle is used to describe heat machines that are characterized by the combining of two or more thermal machines in their design. For example, a gas turbine combined machine with a steam turbine system is termed a "combined cycle" machine. Fixed carbon is the term used to approximately describe the portion of the carbon contained in a coal sample that resides as a solid material after volatile matters have been removed during certain coal testing processes. The heat value of the coal is the potential the coal, when burned, has to create thermal energy. The term is expressed in BTU per pound (see Energy above). Coal is a “water loving" material. Unprocessed, coal will accumulate water from its surroundings, even from moisture contained in the air. Generally the lower the quality of the coal, the greater affinity the substance has for water. Thus, of the weight of subbituminous coals, such as those found at Healy, as much as 25% (measured by weight) may be water held within the structure of the coal. Oxides of Nitrogen: Nitric oxide, Nitrogen dioxide, Nitrous acid, Nitrogen trioxide, Dinitrogen pentoxide, Ammonium nitrate. When a substance is heated and its temperature changes, the product of the specific heat of the substance and the change in its temperature is called the "sensible heat". When heat is added to a stream of gases, and the gases are heated, the sensible heat is the heat required to change the temperature of the gases. All coals contain some amount of sulfur. The sul- fur content is the measure of sulfur contained in a coal sample. This parameter consists generally of the gases (except water) that are driven from a coal sample during certain tests. These gases include carbon monoxide, hydrogen and methane among others. G-4 {ALS APPENDIX H: AATER ete x - % Fairbanks Municipal Utilities System March 20, 1987 Mayor Joe B. Cooper City of Nenana P.O. Box 70 Nenana, Alaska 99760 Dear Mayor Cooper: I appreciated our opportunity to discuss the proposed Nenana coal-fired electric generating plant. FMUS is supportive of your goals and sincerely appreciates the opportunity for our staff to be involved in reviewing the various preliminary reports and engineering studies. We wish you luck in identifying funding sources for the proposed preliminary engineering work program, and if we can assist you in that process please so advise. Very truly yours, a Vi Gillespie Deputy City Manager- Utilities VMG: pah 645 Fifth Avenue * P.O. Box 221 « Fairbanks, Alaska 99707 * 907-456-1000 bY GOLDEN VALLEY ELECTRIC ASSOCIATION INC. Box 1249, Fairbanks, Alaska 99707-1249, Phone 907-452-1151 March 19, 1987 Mayor Joe B. Cooper City of Nenana P.O. Box 70 Nenana, Alaska 99760 Dear Mayor Cooper: This letter will advise you that Golden Valley Electric Association (GVEA) continues to monitor with interest the City of Nenana's continued examination of the proposed Nenana Coal-Fired Electrical Generating Plant. One of our major objectives is to secure a long term, low cost, stable energy supply for our members. Your developing proposal presents yet another option for consideration. We appreciate your update yesterday and understand you are seeking funding for a preliminary engineering work program. We have shared with you information concerning our current and projected loads and generating capacity as well as some future options for GVEA adding generating capacity when required. We will be pleased to furnish additional information you may require to proceed with your studies. As we further discussed, GVEA will assist when requested by you in the review of the results of the preliminary engineering work as appropriate. We will also, when requested, comment as appropriate to the City of Nenana during conduct and analysis of the pre- liminary engineering work. Thanks for keeping us informed. If you have any further questions, please contact me. eee iy 4, TL LLM Michael P. Kelly General Manager ee: Board of Directors, GVEA John Huber, Mgr Engr Sves, GVEA Bob Hansen, Mgr Admin Sves, GVEA A.W. Baker, Mgr Production, GVEA = John Nuveen & Co, ineorperated 210 Main Sweet, Suite G01 NUVEEN Investment Bankers Juneau. Maska dosed Nth ll (iil ee March 12, 1987 The Honorable Joe B. Cooper Mayor, City of Nenana P.O. Box 00070 Nenana, AK 99760 Dear Mayor Cooper: We have received the City of Nenana Coal Generation Project Report and believe that it provides a basis for further study and analysis. The Nenana Coal Project may be a feasible addition to the railbelt energy resource base if the substantial effort proposed by Ohe City in its proposal is carried out. Should the technical and financial feasibility be developed during the proposed analysis and firm power sales contract with creditworthy utilities be enterd into, long term financing could be expected to be available under normal bond market conditions. Yours truly, Sterl Gal er Vice President ce: Lloyd ual Telephone S07.556.1636 BOT INE ATOS, 3 Zi LAHMEYER Lahmeyer international GmbH, P.0.8. 710651, D-6000 Frankfurt (Main) 71 INTER NATI O NAL City of Nenana CONSULTING ENGINEERS ; 5: INGENIEURS CONSEILS Attn. Mr. Steven Bainbridge NGENEROS GOMETORES City Engineer P.O. Box 000/0 Laeefeaiieemetional Geist Nenana, Alaska 99760 Domi ceric tise 71 United States of America ® (069) 6677-0 ‘% linectra frankfurtmain Telex 413478 lid Fax (069) 6677 -571,-572,-940 Your reference Your letter In your reply please quote Please contact Dial directly Date Votre référence Votre lettre Priére d’indiquer dans v/réponse Contactez s.v.p. Appel direct Date Su referencia Su carta Mencionese en la respuesta Dirigirse a Uamada directa Fecha 6677- RTS/HG/LC/1523 Grab 393 12/03/1987 (27627) Re.: Nenana Coal-Fired Power Station Project Dear Sirs, This letter is to confirm that our company as a partner of Fryer/Pressley Engineering Inc., Anchorage, has actively par- ticipated in the studies on the above mentioned project and in the preparation of the relevant report. The services we contributed comprise the following: s We determined the proposed type of firing system and thermal plant process on basis of the prevailing data and conditions as well as on basis of our experience in the design, construction and operation of coal-fired power Stations. Subsequently we prepared Section 3 (Thermal Plant Process) of the report with the assistance of our Alaskan Partner FPE. * The below mentioned Sections have been reviewed by us and include our respective comments. - Section 2 (Project Feasibility) - Section 4( Project Description) - Section 5 (Project Costs and Financing) - Section 7 (Preliminary Engineering Work Plan). Having rendered these services and having scrutinized the whole report, we commit ourselvess to its contents and support its findings and conclusions. For the benefit of reviewers of the report to whom we may have not been known so far, the following information on our company is attached hereto: * An outline of the company profile of LAHMEYER INTERNATIONAL GMBH = Some general brochures about LAHMEYER INTERNATIONAL GMBH H-4 @ LAHMEYER -2- INTERNATIONAL * Some lists of projects performed by LAHMEYER INTERNATIONAL GMBH = A summary of coal-fired power plant projects handled by LAHMEYER INTERNATIONAL GMBH It may be noticed that beyond the projects mentioned on the latter documentation, our relevant expertise is also consti- tuted by the fact that Lahmeyer engineers have participated in the planning and implementation of coal-fired plant projects during former employments with manufacturers and utilizers. In conclusion of this letter we would like to express our strong interest and willingness to extend our involvement in the Nenana Projet in partnership witn FPE over the engineering, implementation and operation phases. We assure you of a per- formance of our services to your full satisfaction. Yours sincerely, LAHMEYER INTERNATIONAL GMBH dw (Dr. —\|\ (Grab) : (Managing Director) (Department Head, Operation Services) Encls.: as mentioned above