HomeMy WebLinkAbout200515-ELV_BusOpPlan-FINAL
CROOKED CREEK AND JI M’S LAKE
HYDROELECTRIC PROJEC T
BUSINESS AND OPERATI NG PLAN
MAY 2020
FINAL
Prepared for
ELFIN COVE UTILITY COMMISSION
PO BOX 2
ELFIN COVE, ALASKA 99825
Prepared by
POLARCONSULT ALASKA, INC.
1503 W. 33RD AVENUE, SUITE 310
ANCHORAGE, ALASKA, 99503
P.O. BOX 47020
PEDRO BAY , ALASKA 99647
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Elfin Cove Utility Commission
Crooked Creek and Jim’s Lake Hydroelectric Project
Business and Operating Plan Polarconsult Alaska, Inc.
May 2020 – Final Report i
EXECUTIVE SUMMARY
The Elfin Cove Utility Commission (ECUC) operates an islanded micro-grid to furnish electricity
to the community of Elfin Cove, Alaska. ECUC currently relies on a 347-kilowatt (kW) diesel
power plant to generate all of its electricity. ECUC plans to construct a hydroelectric project on
Crooked Creek and Jim’s Lake approximately one mile south of the community to provide
renewable electricity. In a typical year, the hydroelectric project will meet most of the
community’s electricity needs.
ECUC is considering two development options at Crooked Creek and Jim’s Lake: Full
Development, and Phased Development.
- Full development has an estimated capital cost of $7.7 million, an installed capacity of 140
kW and would generate sufficient hydropower to supply approximately 91% of existing
electrical load, reducing diesel fuel consumption by 25,800 gallons annually. This option
represents the maximum practical development of the site’s hydropower resource.
- Phased development has an estimated capital cost of $5.3 million, an installed capacity of
105 kW and would generate sufficient hydropower to supply approximately 85% of
existing electric load, reducing diesel fuel consumption by 23,300 gallons annually. The
phased development project could be upgraded in the future to the 140 kW capacity of
the full development option.
The estimated capital cost of the phased development option is approximately 70% the cost of
the full development option and it will provide 93% of the benefits. Accordingly, the phased
development option is more economic and will provide the community with superior value.
ECUC has not yet secured capital funding for the hydro project. At an assumed grant level of
$4.0 million, the phased development project is projected to reduce ECUC electric rates by six
percent in its first year of operation. Savings relative to projected rates with continued use of
diesel fuel are 5 to 15 percent over the first 30 years of operation, then increase to 20 to 30%
after the capital debt is retired.
At the same assumed grant funding level, the full development project is projected to have
significantly higher rates than with continued used of diesel fuel until the capital debt is retired.
Savings of 20 to 30% are projected beyond 30 years.
This Plan presents capital cost estimates, energy estimates, and pro forma financial projections
for both project development options. It also describes other pertinent aspects of ECUC’s
management structure and practices.
Elfin Cove Utility Commission
Crooked Creek and Jim’s Lake Hydroelectric Project
Business and Operating Plan Polarconsult Alaska, Inc.
May 2020 – Final Report ii
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Elfin Cove Utility Commission
Crooked Creek and Jim’s Lake Hydroelectric Project
Business and Operating Plan Polarconsult Alaska, Inc.
May 2020 – Final Report iii
TABLE OF CONTENTS
EXECUTIVE SUMMARY ............................................................................................................I
ACRONYMS AND TERMINOLOGY ..........................................................................................VI
1.0 PROJECT AND COMMUNITY OVERVIEW ......................................................................1
1.1 COMMUNITY DESCRIPTION .......................................................................................................1
1.2 PROJECT DESCRIPTION .............................................................................................................3
1.3 CURRENT UTILITY INFRASTRUCTURE............................................................................................4
2.0 MANAGEMENT STRUCTURE........................................................................................6
2.1 ORGANIZATIONAL CHART AND KEY PERSONNEL ............................................................................6
2.2 STAFFING AND TRAINING ..........................................................................................................6
3.0 FINANCIAL PROJECTIONS ............................................................................................7
3.1 CAPITAL FUNDING ...................................................................................................................7
3.2 REVENUE SOURCES ..................................................................................................................7
3.3 ESTIMATED ANNUAL EXPENSES ..................................................................................................8
3.4 NET REVENUE .........................................................................................................................9
3.5 PROJECTED ELECTRIC RATES .......................................................................................................9
4.0 HYDRO PROJECT MAJOR REPAIR & REPLACEMENT SCHEDULE ...................................12
4.1 FUNDING .............................................................................................................................12
4.2 ANTICIPATED EXPENSES AND FUND BALANCE..............................................................................12
5.0 LEGAL AUTHORITY....................................................................................................15
5.1 OWNERSHIP .........................................................................................................................15
5.2 ORDINANCES RELATED TO NEW PROJECT ..................................................................................15
5.3 SPECIAL PERMITS, LICENSES, AND REGULATIONS ........................................................................15
6.0 INTERAGENCY RELATIONSHIPS .................................................................................17
7.0 OPERATIONS ..........................................................................................................18
7.1 OVERVIEW ...........................................................................................................................18
7.2 NORMAL PERSONNEL REQUIREMENTS ......................................................................................19
7.3 REPORTING ..........................................................................................................................19
8.0 KEY ASSUMPTIONS ...................................................................................................20
8.1 FINANCIAL ASSUMPTIONS .......................................................................................................20
8.2 REGULATORY ASSUMPTIONS ...................................................................................................21
9.0 SUMMARY AND CONCLUSION ..................................................................................22
9.1 IMPACT ON COMMUNITY ........................................................................................................22
10.0 REFERENCES ..........................................................................................................23
A.1 UTILITY PERFORMANCE DATA .................................................................................A-2
A.2: PROJECT ENERGY ESTIMATE ....................................................................................A-4
Elfin Cove Utility Commission
Crooked Creek and Jim’s Lake Hydroelectric Project
Business and Operating Plan Polarconsult Alaska, Inc.
May 2020 – Final Report iv
APPENDICES
APPENDIX A – ENGINEER’S ENERGY ESTIMATE
APPENDIX B – ENGINEER’S COST ESTIMATE
LIST OF FIGURES
Figure 1-1: Aerial View of Elfin Cove ..............................................................................................1
Figure 2-1: Electric Utility Organizational Chart ............................................................................6
Figure 3-1: Projected Future ECUC Electric Rates with Hydro Phased Development
Option ...................................................................................................................11
Figure 3-2: Projected Future ECUC Electric Rates with Hydro Full Development Option ...........11
Figure 4-1: Pro Forma Sinking Fund Balance for Phased Development Option over 50-
Years ......................................................................................................................14
Figure A-1: Annual Energy Generation and Monthly Fuel Cost for ECUC ..................................A-2
Figure A-2: Performance Estimates Under Load Growth and Project Development
Scenarios ..............................................................................................................A-4
LIST OF TABLES
Table 1-1: Elfin Cove Population Data ...........................................................................................2
Table 1-2: Existing Utility Generation Equipment .........................................................................5
Table 3-1: Electric Utility Recent and Pro Forma Profit and Loss Summary ................................10
Table 4-1: Pro Forma Sinking Fund Balance Over Project Life.....................................................14
Table 5-3: Major Project Permits and Authorizations .................................................................15
Table A-1: Elfin Cove Utility Commission Past Electric Utility Operating Data ...........................A-3
Table A-2: Sensitivity Analysis Scenarios for Project Energy Estimate .......................................A-4
Table A-3: Engineer’s Energy Estimate for Crooked Creek and Jim’s Lake Hydroelectric
Project ..................................................................................................................A-5
Table B-1: Engineer’s Cost Estimate for Crooked Creek and Jim’s Lake Hydroelectric
Project ..................................................................................................................B-2
Elfin Cove Utility Commission
Crooked Creek and Jim’s Lake Hydroelectric Project
Business and Operating Plan Polarconsult Alaska, Inc.
May 2020 – Final Report vi
ACRONYMS AND TERMINOLOGY
ADCCED Alaska Department of Commerce, Community, and Economic Development
ADFG Alaska Department of Fish and Game
ADNR Alaska Department of Natural Resources
AEA Alaska Energy Authority
cfs cubic feet per second
CPCN Certificate of Public Convenience and Necessity
DCRA Division of Community and Regional Affairs (organized under ADCCED).
discharge A synonym for stream flow. Flow and discharge are used interchangeably.
dispatchable power, energy, electricity
Electricity that is generated by the hydro in excess of system demand and
dispatched to special customer circuits when it is available. Availability of
dispatchable electricity varies without notice. Also called “interruptible energy”.
ECUC Elfin Cove Utility Commission
FERC Federal Energy Regulatory Commission
FY Fiscal year. Runs from July 1 of the preceding year to June 30 of the stated year.
kV kilovolt, or 1,000 volts
kW kilowatt, or 1,000 watts. One kW is the power consumed by ten 100-watt
incandescent light bulbs.
kWh kilowatt-hour. The quantity of energy equal to one kilowatt (kW) expended for
one hour.
kVA kilovolt-ampere
NPCEC Non-Profit Community of Elfin Cove
O&M operations and maintenance
OMR&R operating, maintenance, repair, and replacement
PCE Power Cost Equalization (program)
Polarconsult Polarconsult Alaska, Inc.
prime power, energy, electricity.
Electricity that is not interrupted except for utility outages. Compare with
dispatchable electricity which can be interrupted without notice.
USACE U.S. Army Corps of Engineers
USFS U.S. Forest Service
USGS U.S. Geological Survey
Elfin Cove Utility Commission
Crooked Creek and Jim’s Lake Hydroelectric Project
Business and Operating Plan Polarconsult Alaska, Inc.
May 2020 – Final Report vii
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Elfin Cove Utility Commission
Crooked Creek and Jim’s Lake Hydroelectric Project
Business and Operating Plan Polarconsult Alaska, Inc.
May 2020 – Final Report 1
1.0 PROJECT AND COMMUNITY OVERVIEW
1.1 COMMUNITY DESCRIPTION
1.1.1 Location
Elfin Cove is located in southeast Alaska, on the northwestern portion of Chichagof Island near
Cross Sound, Port Althorp, and South Inian Pass. It is located approximately 70 air-miles west of
Juneau and 90 miles north-northwest of Sitka. It lies at approximately 58.19° north latitude and
136.35° west longitude (Sections 25 and 36, Township 42 South, Range 55 East, Copper River
Meridian). Nearby communities are Pelican, approximately 16 air-miles to the south, and
Gustavus, approximately 27 air-miles to the east.
Elfin Cove has a maritime climate with cool summers and mild winters. Normal summer
temperatures are in the 50s to low 60s, and normal winter temperatures are in the 20s and 30s.
The highest recorded temperature is 85 degrees, and the lowest is minus 10 degrees. Total
precipitation averages 102 inches a year, with an average snowfall of 96 inches.
Elfin Cove is not an incorporated city or a federally recognized Native village. Public services
such as electricity and water are provided by the Non-Profit Community of Elfin Cove (NPCEC)
doing business as Elfin Cove Utility Commission (ECUC). The community is located in the Sitka
Recording District and the Chatham School District.1
Figure 1-1: Aerial View of Elfin Cove
1 The school in Elfin Cove is currently closed due to low enrollment. This community profile is compiled from
previous energy studies for Elfin Cove (Polarconsult 2011) and data on the Alaska Department of Community
and Economic Development (ADCCED) website (ADCCED 2019).
Oblique aerial view of Elfin Cove looking north. Small sandy beach is located in the bay at lower left.
Crooked Creek and Jim’s Lake (not visible) are both located in the foreground. (Polarconsult, July 2009).
Elfin Cove Utility Commission
Crooked Creek and Jim’s Lake Hydroelectric Project
Business and Operating Plan Polarconsult Alaska, Inc.
May 2020 – Final Report 2
1.1.2 Population
The current population of Elfin Cove is 44. Historic population is summarized in Table 1-1. The
long-term population trend appears stable within the historic range of about 20 to 60. Elfin
Cove sees a relatively large population increase during the summer months, generally from mid
May through mid September. This seasonal population includes guests and employees of sport
fishing lodges, commercial fishermen and support personnel, and other seasonal residents.
Table 1-1: Elfin Cove Population Data
Year Year-Round Population Estimated Summer Seasonal Population
1940 65
1958 48 –
1970 49 –
1979 29 60
1980 28 –
1990 57 –
1995 43 –
2000 32 –
2004 26 –
2009 25 –
2010 20 –
2019 44 –
Future Projection 20 to 60 100 to 200
(1) Population data from 1958 through 2010 reproduced from Feasibility Study (Polarconsult 2011). Other data
from ADCCED (ADCCED 2019).
1.1.3 Transportation
There are no existing or planned future roads connecting Elfin Cove with neighboring
communities. Elfin Cove is accessible only by seaplane, helicopter, or boat. Aviation
infrastructure includes a public floatplane dock. Marine infrastructure includes a small boat
harbor, transient boat dock, marine fuel sales dock, and other private docks. A commercial fish
tender is typically moored in Elfin Cove during the summer season.
The beaches along Elfin Cove’s waterfront are generally suitable for small cargo deliveries via
landing craft or small barge. Service is on an as-needed basis, with several trips annually.
Elfin Cove Utility Commission
Crooked Creek and Jim’s Lake Hydroelectric Project
Business and Operating Plan Polarconsult Alaska, Inc.
May 2020 – Final Report 3
1.2 PROJECT DESCRIPTION
1.2.1 Full Development Option
The full hydroelectric project is two hydroelectric systems in series with a combined installed
capacity of approximately 140 kilowatt (kW), located approximately one mile south of Elfin
Cove. The upper system is a 35 kW run-of-river project from Crooked Creek to Jim’s Lake. The
lower system is a 105 kW storage project from Jim’s Lake to tidewater at small sandy beach.
The project consists of the following major components:
- Approximately 3,800 feet of new access trails from tidewater up to Jim’s Lake and the
Crooked Creek diversion, and approximately 5,600 feet of new access trails from Elfin
Cove to the project site.
- Approximately 8,800 linear feet of primary electric distribution line (7.2/12.47 kV). This
will start at existing sectionalizing cabinet TB-10 on Lot 40A of the town site and follow
the access trails to the upper and lower powerhouses.
- Approximately 12,500 linear feet of communication cable. Communication cable will
start at the diesel powerhouse, run through Elfin Cove to the start of the power line
extension, and generally be co-located with power cables along the project trails.
- The upper hydro system, consisting of an intake structure at elevation +488 feet on
Crooked Creek that will direct up to five cubic feet per second (cfs) into a 14-inch
diameter 1,050 foot long penstock down to a powerhouse on the shore of Jim’s Lake.
The powerhouse will house a 35 kW turbine-generator and associated equipment.
- The lower hydro system, consisting of a dam at the outlet of Jim’s Lake that will regulate
the lake level between its natural level of 338 feet and 346 feet. The dam will include a
gravity intake to admit up to 6.5 cfs of water into an 18-inch diameter 2,550 foot long
penstock to a powerhouse at tidewater on little sandy beach. The powerhouse will
house a 105-kW turbine-generator and associated equipment.
In an average year, this project option will supply approximately 91% of the utility’s total
electric demand, reducing diesel fuel usage by approximately 25,800 gallons annually. The
balance of electric supply will come from the utility’s existing diesel power plant located within
the community.
1.2.2 Phased Development Option
ECUC is also considering phased project development as a more economic option. This option
would vary from the full development option as follows:
Elfin Cove Utility Commission
Crooked Creek and Jim’s Lake Hydroelectric Project
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May 2020 – Final Report 4
1. Transition development approach from an emphasis on heavy equipment to light
construction using manual labor, small equipment, and helicopters.
2. Eliminate upper powerhouse and power generation. The water diversion system would
remain in place. This would reduce the cost of the diversion structure, eliminate the need
for power and controls to the upper system entirely, and replace the powerhouse with an
energy dissipation structure (stilling basin). The penstock would remain similar.
3. Reduce the size of the dam at Jim’s Lake to be compatible with the limitations of light
equipment and manual labor. Likely reduce maximum lake level by approximately four feet.
4. Capacity and parameters of lower system unchanged except for storage capacity and
decreased gross head.
In an average year, this project option will supply approximately 82% of the utility’s total
electric demand, reducing diesel fuel usage by approximately 23,300 gallons annually.
1.3 CURRENT UTILITY INFRASTRUCTURE
ECUC currently has a single diesel power plant located in the central part of the community that
provides 100% of electricity to the community. The utility is an islanded micro grid completely
isolated from neighboring communities. The diesel plant has three generators controlled by
four sections of switchgear with a combined generating capacity of 347 kW. The switchgear is
fully automatic with paralleling capability, and uses a programmable logic controller to match
the generator(s) to system load. The plant generates at 480 volts three phase. The entire
diesel plant was installed new in 2007. Fuel is piped directly from the bulk fuel facility to the
diesel plant day tanks. ECUC’s current generation equipment is listed in Table 1-2.4
4 ECUC Power System Upgrade Record Drawings (AEE 2010).
Elfin Cove Utility Commission
Crooked Creek and Jim’s Lake Hydroelectric Project
Business and Operating Plan Polarconsult Alaska, Inc.
May 2020 – Final Report 5
Table 1-2: Existing Utility Generation Equipment
No. Equipment Prime Power
(kW)
Commissioned
Date Designated Use
1 John Deere 6061 179 kW 2007 summer peak
2 John Deere 4045 67 kW 2007 winter (base and peak)
3 John Deere 6068 101 kW 2007 Intermediate load conditions
The Elfin Cove distribution system was upgraded in 2010. The system is a grounded wye three-
phase system with four radial distribution legs and no loop feed. 480 V generated at the power
plant is stepped up to distribution voltage with a single 225 kVA pad-mount transformer
outside the diesel powerhouse.3 7.2/12.47 kV is distributed throughout most of the community
in a combination of rigid conduit installed under or adjacent to boardwalks or via buried
armored cable. Distribution on the west side of the community is overhead construction.
A bulk fuel facility is located approximately 300 feet north of the diesel power plant, and was
constructed in 2006.
Elfin Cove Utility Commission
Crooked Creek and Jim’s Lake Hydroelectric Project
Business and Operating Plan Polarconsult Alaska, Inc.
May 2020 – Final Report 6
Utility Manager
Mike Nelson
Elfin Cove Utility Commission
Non Profit Community of Elfin Cove
Plant Operator
Lineman
Meter Reader
Bookkeeper
2.0 MANAGEMENT STRUCTURE
The ECUC is a subsidiary of the NPCEC. ECUC holds Certificate of Public Convenience and
Necessity No. 701, issued in 2004, authorizing it to operate a public utility providing electrical
service in Elfin Cove.
The utility participates in the State of Alaska’s Power Cost Equalization (PCE) program, which
subsidizes electricity rates for residential and community facilities served by eligible utilities.
2.1 ORGANIZATIONAL CHART AND KEY PERSONNEL
The organizational chart and current personnel for the electric utility is shown in Figure 2-1.
Utility policy and top management decisions are developed by the utility manager and
submitted to the ECUC and/or NPCEC for final approval.
Figure 2-1: Electric Utility Organizational Chart
2.2 STAFFING AND TRAINING
Existing utility staff have generalized experience and qualifications for their respective routine
duties and responsibilities.
Elfin Cove Utility Commission
Crooked Creek and Jim’s Lake Hydroelectric Project
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May 2020 – Final Report 7
3.0 FINANCIAL PROJECTIONS
Recent and projected pro forma utility finances are summarized in Table 3-1. Table 3-1 includes
actual utility finances for fiscal years 2016 through 2018, and pro forma finances based on a full
year of operations solely on diesel and with the hydro plant (full and phased development
options). Assumptions used to develop the pro forma financials are explained in this Section.
3.1 CAPITAL FUNDING
The estimated capital cost of the full development project is $7.7 million, and the estimated
capital cost of the limited / phased development project is $5.3 million. (See Appendix B for
Final Engineer’s Cost Estimate).
No capital funding is currently in place for the project. Pro forma financials on Table 3-1
assume capital funding for the project comes from a combination of $4.0 million in government
grants and the balance from a loan.
3.2 REVENUE SOURCES
Utility operating revenues currently come from retail electricity sales to residential,
commercial, and institutional customers in Elfin Cove. A portion of revenues come from the
state’s PCE program, which subsidizes electric rates for eligible residential and community
customers. Recent and projected future revenues are summarized in Table 3-1.
3.2.1 Dispatched Energy Sales
Because the hydro project at times will have more generation capacity than is required to serve
utility load, the utility can install dispatchable space or water heating services to increase
energy sales and generate additional revenue. Dispatchable energy controls and a system to
keep the diesel powerhouse coolant loops and existing waste heat loop heated is included in
the project capital budget. Additional dispatched energy services are assumed to be
individually funded by ratepayers. The dispatched energy rate is set at 50% of the equivalent
avoided cost of heating oil for equivalent boiler system performance to provide an economic
incentive for this.
The pro formas assume that approximately 50% of the available excess hydro energy is sold
through a dispatchable energy tariff.
3.2.2 Total Utility Demand
Pro forma utility revenues are based on 350,000 kWh at generation with the utility’s existing
diesel-only operation. This corresponds to 293,500 kWh of prime energy sales. The balance is
station service (25,000 kWh) and system losses (31,500 kWh). For the same load profile, pro
forma total generation with the hydro is higher at 486,600 kWh. This is due to:
(1) additional station service load at the hydro powerhouse(s) and load governor operation,
(2) additional hydro energy generation and sale under a dispatchable tariff, and
(3) Higher system losses associated with additional energy throughput ((1) and (2) above).
Elfin Cove Utility Commission
Crooked Creek and Jim’s Lake Hydroelectric Project
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May 2020 – Final Report 8
3.3 ESTIMATED ANNUAL EXPENSES
Pro forma annual expenses are based on existing utility expenses, adjusted where appropriate
to reflect the impacts of the hydro project.
3.3.1 Fuel
Decreased operation of the diesel plant reduces fuel consumption. Fuel usage with the hydros
operational is calculated based on diesel kWh generated and an assumed fuel efficiency of 10.5
kWh per gallon. This is lower than the plant’s existing 12.0 kWh per gallon efficiency to reflect
the possibility that the diesel engines may operate at lower efficiency when paralleling with the
hydros. Assumed fuel cost for pro formas is $4.00 per gallon.
3.3.2 Salary and Wages
This item includes salary, wages, benefits, employee-related insurance premiums, travel, and
consultant / contractor labor. An annual budget of $33,000 is provided for diesels-only
operation. This is increased 15% for the hydro cases to reflect incremental labor requirements
associated with hydro operations and reporting.
3.3.3 Diesel and Hydro Routine Operations, Maintenance, Repairs and Replacement
Recent annual utility expenses for operations and maintenance (O&M) have been
approximately $16,000. A decrease in diesel-related expenses is expected with the hydro due
to decreased diesel engine consumables (filters, lube oil, etc) and increased interval between
engine overhauls. An additional budget is provided for weekly hydro inspections and routine
maintenance activities.
3.3.4 Administrative Expenses
Administrative expenses includes business insurance, fees, office equipment, supplies, rent, and
utilities, postage, and similar items. Recent annual administrative expenses of approximately
$12,000 are held constant for all pro forma cases.
3.3.5 Hydro Debt Service
The loan for the balance of hydro project capital cost is assumed to have a 30-year term at
2.25% interest. Potential lenders that may offer such terms include the U.S. Department of
Agriculture’s Rural Utility Service or the State of Alaska’s Power Project Fund or Municipal Bond
Bank. Actual interest rates, terms, and fees will vary per lender and prevailing market
conditions at the time a loan is secured.
3.3.6 Hydro Sinking Fund
Major hydro project repairs and replacement are covered by the hydro sinking fund line item.
The basis for this budget is presented in Section 4.
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May 2020 – Final Report 9
3.4 NET REVENUE
The electric utility does not operate as a for-profit business. The utility is managed to produce
sufficient margin to cover unexpected operating and repair expenses. Net revenues in recent
years have ranged from approximately – $26,000 to +$23,000 (See Table 3-1). The utility’s pro
forma financials provide net annual revenue of $20,000.
3.5 PROJECTED ELECTRIC RATES
Figures 3-1 and 3-2 present projected future electric rates with the phased and full
development hydro project options, respectively. Both figures present projected future rates
without the hydro and continued reliance on diesel fuel. Discussion of assumptions follows.
Inflation. Annual inflation is assumed at 2% over the project life. Note that Figures 3-1 and
3-2 present future costs in nominal future values and are not inflation-adjusted.
Load Growth. Load growth is assumed flat at 248,000 kWh of prime energy sales over the
50-year project life.
Utility Non-Fuel Costs. All non-fuel costs for all scenarios are as-presented in Table 3-1.
Future Diesel Fuel Cost. Future diesel fuel cost are the projections included with AEA’s FY 2017
Renewable Energy program evaluation model, published in July 2015. Fuel cost in this model
increases from $3.63 per gallon in 2016 to $6.33 in 2014, and is constant thereafter.
Elfin Cove Utility Commission
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May 2020 – Final Report 10
Table 3-1: Electric Utility Recent and Pro Forma Profit and Loss Summary
Pro Forma 1 FY 2016
(Actual)
FY 2017
(Actual)
FY 2018
(Actual) Diesel Phased
Hydro
Full
Hydro
ELECTRIC GENERATION
Diesel Plant Generation (kWh) 2 316,607 350,218 325,389 350,000 61,800 35,900
Hydro Plant Generation (kWh) 1 - - - - 460,500 584,800
TOTAL ELECTRIC GENERATION (kWh) 316,607 350,218 325,389 350,000 522,300 620,700
ELECTRIC DEMAND
Diesel Station Service (kWh) 2 24,327 18,490 23,395 25,000 25,000 25,000
Hydro Station Service (kWh) - - - - 37,800 52,300
PCE Eligible Residential (Res.) Sales (kWh) 2 56,382 54,338 54,301 55,000 55,000 55,000
PCE Elig. Community (Comm.) Sales (kWh) 2 10,315 9,626 8,834 10,000 10,000 10,000
All Other Sales (kWh) 2 194,575 202,809 226,353 228,500 228,500 228,500
Total Prime Energy Sales (kWh) 261,272 266,773 289,488 293,500 293,500 293,500
Dispatchable Energy Sales (kWh) 3 - - - - 119,000 194,000
TOTAL ELECTRIC SALES (kWh) 261,272 266,773 289,488 293,500 412,500 487,500
TOTAL METERED ELECTRIC DEMAND (kWh) 285,599 285,263 312,725 318,500 475,300 564,800
Line Losses / Unmetered / Other (kWh) 2 31,008 64,955 12,664 31,500 47,000 55,900
ELECTRIC RATES
Base Rate, All Classes ($/kWh) 2 0.68 0.59 0.63 0.67 0.63 0.99
PCE Res./Comm. Subsidy ($/kWh) 2, 4 0.43 0.38 0.39 0.44 0.40 0.74
Subsidized Res./Comm. Rate ($/kWh) 2 0.25 0.21 0.25 0.23 0.23 0.25
Dispatchable Energy Rate ($/kWh) 3 - - - - 0.07 0.07
UTILITY REVENUES
PCE Reimbursements from State 2, 4 28,561 24,591 21,553 28,600 26,000 47,900
Revenues, All Non-PCE Sales 2 154,782 138,657 118,922 168,200 159,900 241,600
Revenue, Dispatched Energy Sales - - - - 8,300 13,600
Other Revenues 2 828 1,632 4,289 1,000 1,000 1,000
TOTAL UTILITY REVENUES 184,132 164,880 144,764 197,800 195,200 304,100
UTILITY EXPENSES
Fuel (gallons) 2 25,913 26,960 28,312 29,200 5,900 3,400
Fuel Expense 107,042 90,706 95,143 116,800 23,600 13,600
Salaries & Wages 2 31,669 39,359 33,386 33,000 38,000 38,000
Diesel / Other O&M 2 11,677 8,375 27,626 16,000 12,900 9,900
Hydro O&M 2 - - - - 15,000 19,000
Administrative Expenses 2 10,554 9,803 14,634 12,000 12,000 12,000
Hydro Debt Service - - - - 58,700 168,600
Hydro Sinking Fund - - - - 15,000 23,000
Non-Fuel Expenses 2 53,900 57,537 75,645 61,000 151,600 270,500
TOTAL UTILITY EXPENSES 160,941 148,243 170,789 177,800 175,200 284,100
NET UTILITY REVENUE (% OF GROSS) 23,191 16,637 (26,025) 20,000 20,000 20,000
1. Pro formas based on annual prime electricity sales of 293,500 kWh, which corresponds to 350,000 kWh at
generation under existing conditions. Total pro forma generation with hydro is higher due to hydro station
service, frequency control load bank, dispatched energy sales and associated system losses.
2. Values are taken or calculated from FY 16 to FY 18 annual PCE reports or utility financial reports.
3. See Section 3.2 for assumptions on dispatchable energy sales volume and rates.
4. Assumes full debt servicing cost is eligible for PCE reimbursement. See PCE program rules for limitations.
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May 2020 – Final Report 11
0.00
0.25
0.50
0.75
1.00
1.25
1.50
2000 2010 2020 2030 2040 2050 2060 2070 2080Base Rate ($ per kWh)(Nominal dollars for indicated year)Historical Utility Rates
Projected Rates on Diesel (AEA 2015 Model)
Projected Rates with Hydro
* Projected utility rates on diesel (heavy red line) are based on Elfin Cove fuel cost model developed for AEA Renewable Energy Grant
Program by ISER in 2015 and ECUC utility operating and financial data.
0.00
0.25
0.50
0.75
1.00
1.25
1.50
2000 2010 2020 2030 2040 2050 2060 2070 2080Base Rate ($ per kWh)(Nominal dollars for indicated year)Historical Utility Rates
Projected Rates on Diesel (AEA 2015 Model)
Projected Rates with Hydro
* Projected utility rates on diesel (heavy red line) are based on Elfin Cove fuel cost model developed for AEA Renewable Energy Grant
Program by ISER in 2015 and ECUC utility operating and financial data.
Figure 3-1: Projected Future ECUC Electric Rates with Hydro Phased Development Option
Figure 3-2: Projected Future ECUC Electric Rates with Hydro Full Development Option
Elfin Cove Utility Commission
Crooked Creek and Jim’s Lake Hydroelectric Project
Business and Operating Plan Polarconsult Alaska, Inc.
May 2020 – Final Report 12
4.0 HYDRO PROJECT MAJOR REPAIR & REPLACEMENT SCHEDULE
Because the major repair and replacement schedule depends on manufacturer-specific
equipment life, actual operating performance, and related factors, the schedule is a dynamic
document that will be periodically revised by the utility over time to reflect actual project and
component performance.
An initial schedule and budget for both project options is listed in Table 4-1. This should be
revised at the following project milestones:
- Once the project is constructed and the final O&M Manual is available, the schedule
should be updated to reflect actual equipment details and expected useful life.
- Every five years after project commissioning, the schedule should be again updated to
reflect actual operating experience.
4.1 FUNDING
The utility has a dedicated fund for major repair and replacement of its physical plant, following
a deposit schedule established in a prior business plan. Repair and replacement costs are paid
from available utility revenues or other ECUC or NPCEC funds. In the past, major capital
replacement / upgrade projects have also been funded in part through state and/or federal
grants.
Because the hydro plant is a significant capital asset with significant long-term repair and
replacement expenses, the utility’s pro forma financials include a dedicated sinking fund for
long-term repair and replacement expenses. A portion of utility rates would be placed in the
fund on a regular basis so that ECUC will be able to pay for future repair and replacement
needs. The pro forma annual payment into this fund is $15,000, and after five years, the
projected minimum fund balance always remains above $50,000. ECUC should monitor the
fund balance and hydro capital requirements and adjust annual payments as needed.
4.2 ANTICIPATED EXPENSES AND FUND BALANCE
Table 4-1 lists expected expense items and their estimated cost over the life of the project.
Figure 4-1 shows the fund balance over the project’s 50-year life based on the annual payments
and withdrawals described in this Section. The fund balance in Figure 4-1 assumes the fund is
managed to yield an annual return of 5% net of management expenses and inflation.
Under this fund structure, the hydro project would reach the end of its design life with an
estimated $450,000 sinking fund balance and significant accumulated maintenance items such
as the second round of 25-year maintenance items in Table 4-1, penstock valve replacement,
rehabilitation of the intake structures and powerhouse buildings, and FERC relicensing. These
Elfin Cove Utility Commission
Crooked Creek and Jim’s Lake Hydroelectric Project
Business and Operating Plan Polarconsult Alaska, Inc.
May 2020 – Final Report 13
liabilities will likely exceed the sinking fund balance, and any deficit is assumed to be funded
from project revenues beyond year 50.
Elfin Cove Utility Commission
Crooked Creek and Jim’s Lake Hydroelectric Project
Business and Operating Plan Polarconsult Alaska, Inc.
May 2020 – Final Report 14
$0
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
$350,000
$400,000
$450,000
$500,000
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49
YearFund Balance, Deposits, Withdrawals (2019 $)Deposits
Withdrawals
Fund Balance
Table 4-1: Pro Forma Sinking Fund Balance Over Project Life
Phased
Development
Full
Development Maintenance Item
Estimated
Recurrence
Interval Estimated Cost (2020$)
Maintain diversion gates / controls 10 years $50,000 $75,000
Replace turbine / generator bearings 10 years $35,000 $60,000
Major road/trail maintenance 25 years $150,000 $250,000
Replace hydro transformer 25 years $20,000 $35,000
Upgrade plant switchgear / controls 25 years $100,000 $175,000
Overhaul hydro turbine / generator 25 years $100,000 $150,000
Figure 4-1: Pro Forma Sinking Fund Balance for Phased Development Option over 50-Years
Elfin Cove Utility Commission
Crooked Creek and Jim’s Lake Hydroelectric Project
Business and Operating Plan Polarconsult Alaska, Inc.
May 2020 – Final Report 15
5.0 LEGAL AUTHORITY
5.1 OWNERSHIP
The hydroelectric project and associated improvements (power line extension, access corridor
improvements, etc.) will be entirely owned by ECUC. If project construction is funded through
grants, the granting entity may retain some ownership interest in the project. Specific terms
would be set forth in the grant agreement between the granting entity and ECUC.
Tax treatment of grant income to the utility is not addressed by this document, but may be a
significant matter for the utility to address in the event grant funds are used.
The hydroelectric project and associated improvements are located in the Tongass National
Forest, which is federal land managed by the U.S. Forest Service (USFS). Allowed activities on
federal land will be authorized under a license issued by the Federal Energy Regulatory
Commission (FERC) and USFS Special Use Permit.
5.2 ORDINANCES RELATED TO NEW PROJECT
No local ordinances are required for the construction or operation of the hydroelectric project.
5.3 SPECIAL PERMITS, LICENSES, AND REGULATIONS
The hydroelectric project is authorized by the permits and agency authorizations listed in Table
5-3. Table 5-3 also lists post-construction reporting, monitoring, or other activities required by
these permits. ECUC’s obligations under these permits are summarized in this section.
Permit and license requirements may vary depending on final terms and conditions.
Table 5-3: Major Project Permits and Authorizations
Agency Permit / Authorization Date Applied Date Issued Post-Construction Action Items
FERC Original License Jan. 2020 Pending To be determined.
USFS Special Use Permit Jan. 2020 Pending To be determined.
USACE Wetlands Permit Jan. 2020 Pending Return Post-Construction Closure Form.
ADNR Land Easement Jan. 2020 Pending To be determined.
ADNR Water Use Permit 7/23/2014 Pending Annual water usage reports for 5 years.
ADNR Dam Safety NA – None. Not under program jurisdiction.
ADFG Fish Habitat Permit NA – None required.
ADFG: Alaska Department of Fish and Game FERC: Federal Energy Regulatory Commission
ADNR: Alaska Department of Natural Resources NA: Not applicable
USCOE: U.S. Army Corps of Engineers USFS: U.S. Forest Service
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May 2020 – Final Report 16
5.3.1 Federal Energy Regulatory Commission
The Federal Energy Regulatory Commission (FERC) will issue an original license for construction
and operation of the project. Original licenses are typically issued for a period of 30 to 50 years.
The FERC license will include terms and conditions that specify on-going reporting
requirements. ECUC will need to comply with reporting requirements to maintain the license
in good standing.
Before the original license expires, ECUC will need to apply for a new license. The re-licensing
process is similar to the process followed to obtain the original license. The specific process will
depend on FERC regulations in effect at the time the re-licensing process begins.
5.3.2 U.S. Forest Service
The U.S. Forest Service (USFS) will issue ECUC a Special Use Permit for development and
operation of the project on USFS land.
5.3.3 U.S. Army Corps of Engineers
The U.S. Army Corps of Engineers (USACE) will issue ECUC a permit authorizing work in
wetlands and waters of the U.S. consistent with the project description in the FERC license
application and issued license.
Under the expected terms of the permit, ECUC will need to complete and return a project
completion certification form to the USACE once construction is complete. No subsequent
actions are normally required under the standard terms of this permit.
5.3.4 Alaska Department of Natural Resources
ADNR will issue ECUC a water use permit under LAS 29817 (Jim’s Lake) and LAS 29818 (Crooked
Creek) for the water that will be used by the hydro project. Under typical permit terms, ECUC
must report actual water usage to ADNR on an annual basis. After five years, ADNR will issue
the ECUC water rights based on usage and annual reports are no longer required.
5.3.5 Alaska Department of Fish and Game
The Alaska Department of Fish and Game (ADFG) issued a letter in May 2014 stating that no fish
habitat permit is required for this project. No further action from ADFG is expected, although
ADFG may provide recommendations on FERC license terms and conditions for the project.
5.3.6 Future Major Repair or Replacement Activities
Certain major repair or replacement activities occurring below the ordinary high water mark of
Crooked Creek, Jim’s Lake, Jim’s Creek or other waters may require specific permits from ADFG,
USACE, USFS, or other agencies. Agencies should be consulted before commencing major
Elfin Cove Utility Commission
Crooked Creek and Jim’s Lake Hydroelectric Project
Business and Operating Plan Polarconsult Alaska, Inc.
May 2020 – Final Report 17
repair or replacement activities to determine specific permit requirements, if any, as
requirements are likely to change over the life of the project.
6.0 INTERAGENCY RELATIONSHIPS
ECUC will be responsible for routine operations of the hydro project. ECUC may consult with
the AEA or others for technical assistance on an as-needed basis.
The FERC license will require periodic reporting to FERC. Specific reporting requirements will be
set forth in the license.
The USFS Special Use Permit may require periodic reporting to the USFS. Specific reporting
requirements will be set forth in the permit.
Elfin Cove Utility Commission
Crooked Creek and Jim’s Lake Hydroelectric Project
Business and Operating Plan Polarconsult Alaska, Inc.
May 2020 – Final Report 18
7.0 OPERATIONS
This Section provides a general overview of the operations plan for the utility once the new
hydroelectric project is operational. Specific operational requirements of the hydroelectric
project will be set forth in an Operations and Maintenance (O&M) Manual that will be issued
once the project is completed. The O&M manual will include specific vendor, manufacturer,
and project as-built information that is not yet available.
7.1 OVERVIEW
The utility will operate its hydroelectric and diesel power plants on an economic dispatch basis.
This means that the most economic available generator(s) will be used to meet system demand
within the technical operating limits of the individual generators and the overall system. For
this system, the hydroelectric generators are the most economic generator under all
conditions, and will be operated whenever sufficient water is available. The utility controls will
be programmed to operate the hydro and diesel plants as follows:
1. When there is sufficient flow in Crooked Creek to operate the upper system turbine
(approximately one cfs), it will be operated at its maximum load. At times of light load,
this turbine may be sufficient to meet all utility demand. When there is insufficient flow
to operate the turbine, the upper system will still divert available flow to Jim’s Lake.5
2. When utility demand exceeds the available output of the upper system, the lower
system will be activated to try and meet utility demand. Unless the reservoir is empty,
the lower system can be operated up to its rated output of 105 kW.
3. If utility demand exceeds the available output of both upper and lower hydro systems, a
diesel generator will be operated in parallel with the hydro system(s). The diesel
generator will be operated at a minimum load (approximately 40%) to avoid wet-
stacking and maintain reasonable fuel efficiency. The upper hydro system will be
operated at maximum output per available water flow, and the lower hydro system will
be throttled to conserve water.
4. When in hydro-only generating mode, system frequency will be managed by an
electronic load governor. Load banks will be located in one or both hydro powerhouses
to provide frequency regulation. Blocks of excess hydro energy will be dispatched on a
priority basis to other heating loads. The diesel powerhouse coolant loop will be the
highest priority heating load to keep the diesel generators warm and maintain waste
heat supply to the community building and shop. Other heating loads will receive
excess hydro energy on an as-available / as-needed basis.
Water availability is monitored by the control system in real time by monitoring the head level
in the intakes, and operating status is revised continuously by the control system based on
changing water availability.
5 For the phased development option, the upper system is only a water diversion with no power generation
available, so this step does not apply. Other steps remain unchanged, with upper system output unavailable.
Elfin Cove Utility Commission
Crooked Creek and Jim’s Lake Hydroelectric Project
Business and Operating Plan Polarconsult Alaska, Inc.
May 2020 – Final Report 19
7.2 NORMAL PERSONNEL REQUIREMENTS
Normal operation of the hydroelectric plant and diesel plant is automated and does not require
continuous operator supervision. The control system is capable of detecting a variety of alarm
conditions and contacting the operator for intervention when necessary. Routine maintenance
and inspections are necessary to maintain both plants in good working order. Periodic
maintenance actions are necessary as well.
7.2.1 Control System Alarm Events
Specific alarm events will be specified in the system controls O&M manual. Operator
notification protocols are set by the operator. Several notification methods are available, and
configuration instructions will be in the system controls O&M manual.
7.2.2 Routine Inspections
The hydroelectric plant should be inspected in person on a weekly to monthly basis to detect
any items that may require attention. This routine inspection can be completed by traveling
along/visiting the project features and observing any unusual conditions. The frequency of
inspections will vary with seasons and the weather, and should be adjusted as the operator
gains experience with the project.
Inspection points will be specified in the project operations and maintenance manual. A list of
representative inspection items follows.
Routine inspections should check for tree falls, erosion, blocked drainages, vandalism,
abandoned property, damaged project structures, or obvious damage that needs to be
corrected. At the diversion structure, check for and remove any debris blocking the intake
screens that may be impeding the flow of water. Check controls for alarm conditions. Along
the penstock, check for water seeps that may indicate leaks. At the powerhouse, check
controls for alarm conditions. Check oil levels in sight glasses on turbine / generator bearings.
Check that the water level in the draft tube is within the designated range. Check building
temperature and sound levels for normal conditions. Check building air filters to see if they
need to be cleaned. Inspections should be logged to keep a record of project conditions.
7.2.3 Routine Maintenance
Specific routine maintenance activities and intervals will be set forth in the project O&M
manual. Routine maintenance activities will generally include items such as replacing air filters,
greasing bearing zerks, cleaning the floors, etc.
7.3 REPORTING
In addition to current utility reporting requirements, some project permits will have additional
reporting requirement to government agencies. These reports are summarized in Table 5-3 and
discussed in Section 5.3.
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May 2020 – Final Report 20
8.0 KEY ASSUMPTIONS
Key assumptions made to complete this business plan are discussed in this section.
8.1 FINANCIAL ASSUMPTIONS
Many of the data used to complete the financial analysis for this project presented in Sections 3
and 4 are assumptions. These are discussed in this Section.
8.1.1 Construction Cost Estimate
The Engineer’s Cost Estimate in Appendix B is an estimate of the construction cost based on
project scope, project designs, expected permit conditions, and other project-specific factors. It
is developed using recent construction costs for projects that are similar in scope, location,
complexity, to this project. The actual construction cost will vary from this estimate.
8.1.2 Project Financing
ECUC does not currently have financing in place for this project. The terms of loans and/or
grants for the project’s capital cost will significantly affect project economics.
8.1.3 Operating Cost
Operating costs for the project are based on estimates of labor hours, labor rates, and material
costs to operate the project. Pro forma utility rates in this report will need to be adjusted over
time to match actual operating costs as they vary from these estimates. Final utility rates will
be set by ECUC after plant completion.
8.1.4 Fuel Cost
Most of the financial benefit of this project is realized through decreased fuel usage at the
diesel power plant and decreased utility expense for purchasing fuel. These project benefits
will vary with the cost of fuel, which will fluctuate significantly over the project life.
8.1.5 Water Resource Availability
Water availability is based on eight years of hydrology data collected at Crooked Creek and
Jim’s Lake for this project. Comparison against the 40+ years of precipitation data in Elfin Cove
indicate the eight years of data are representative of that longer-term climate record.
Correlations to other hydrologic records in southeast Alaska are poor. If water availability over
the project life is different from that indicated by the available hydrology record, that could
have a significant impact on project performance.
8.1.6 Intangible Benefits
Intangible project benefits include items such as decreased sound and exhaust emissions from
the diesel power plant, decreased community carbon emissions, stabilized electric rates that
Elfin Cove Utility Commission
Crooked Creek and Jim’s Lake Hydroelectric Project
Business and Operating Plan Polarconsult Alaska, Inc.
May 2020 – Final Report 21
are less influenced by the volatile price of diesel fuel, incrementally lower risk of fuel spills in
and around Elfin Cove, and a sustainable, renewable energy supply for the community. None of
these benefits have been assigned an economic value for this analysis.
8.1.7 Sinking Fund
The Hydro Sinking Fund described in Section 4 is designed to provide funds for major repair and
replacement needs of the project. The timing and amount of these future costs are assumed
and ECUC will need to adapt fund management to meet expected needs over time. The net
return on the fund and periodic contribution levels are also assumed. All of these assumptions
should be reevaluated over time and, as appropriate, annual deposits into the fund should be
adjusted so the fund balance is sufficient to pay expected future capital replacement costs.
8.2 REGULATORY ASSUMPTIONS
Permits and agency authorizations for the project are based on the current governmental
statutory and regulatory framework at the time this plan was prepared, consisting of federal
and state statutes, regulations, and policies. Future changes to this framework may result in
material change to the project’s permits and authorizations. Such changes could affect the
project’s regulatory or economic viability. Specific examples include, but are not limited to:
1. Change in FERC statutes, regulations, or policies which result in changes to the project
license or requirements to maintain license compliance.
2. Change in USFS management policies. The project is entirely located on USFS land.
Changes in USFS management policies could have a material affect on project operation
or future renewal of project authorizations.
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Crooked Creek and Jim’s Lake Hydroelectric Project
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May 2020 – Final Report 22
9.0 SUMMARY AND CONCLUSION
Analysis indicates the full development option is not economic unless substantially funded by
grants. The phased development option is projected to provide an immediate reduction in
electric rates at a grant funding level of $4 million.
ECUC has not yet secured capital funding for the hydro project. At an assumed grant level of
$4.0 million, the phased development project is projected to reduce ECUC electric rates by six
percent in its first year of operation. Savings relative to projected rates with continued use of
diesel fuel are 5 to 15 percent over the first 30 years of operation, then increase to 20 to 30
percent after the capital debt is retired.
Initial electric rates would be similar to existing rates (~0.63 per kWh), and the community and
ratepayers would realize substantial savings over the project life compared to continued
reliance on diesel fuel for power generation. Life time savings are projected at $1.3 million.
9.1 IMPACT ON COMMUNITY
The phased development hydro option will provide approximately 82 percent of the annual
electricity consumed in Elfin Cove, reducing diesel fuel usage by approximately 23,300 gallons
annually. By reducing annual expenditures on diesel fuel, the price of which varies significantly
and unpredictably, this project will help stabilize utility rates, allowing local businesses and
residents to improve their budgeting and planning efforts.
By reducing the amount of fuel barged to Elfin Cove, this project will incrementally decrease the
risk of fuel spills in the vicinity of Elfin Cove, improving the sustainability of the local
environment and of the resources extracted there from.
By significantly reducing operation of the diesel powerhouse in Elfin Cove, this project will
improve local air quality by significantly reducing powerhouse exhaust emissions. This project
will also reduce noise emanating from the diesel powerhouse.
Addition of dispatched electric heat circuits to community buildings using excess generation will
further reduce community fuel consumption and costs.
Construction of project access trails will improve access to land south of the community for
recreation, subsistence, and other activities.
Additional electrical generating units on the ECUC grid provide increased reliability to the
community electrical system.
Elfin Cove Utility Commission
Crooked Creek and Jim’s Lake Hydroelectric Project
Business and Operating Plan Polarconsult Alaska, Inc.
May 2020 – Final Report 23
10.0 REFERENCES
ADCCED 2018. Alaska Department of Commerce, Community, and Economic
Development website, accessed June 2018.
https://www.commerce.alaska.gov/dcra/DCRAExternal/community/
AEE 2008. Elfin Cove Power System Upgrade. Record Drawings. Alaska Energy and
Engineering, Inc. (AEE) September 5, 2008.
AEE 2010. Elfin Cove Distribution System Upgrades. Record Drawings. Alaska Energy
and Engineering, Inc. May 19, 2010.
NREL 2004. The Alaska Village Electric Load Calculator. NREL/TP-500-36824, NREL,
Golden, Colorado, September 2004.
Polarconsult 2011. Crooked Creek and Jim’s Lake Hydroelectric Feasibility Study Final Report.
Polarconsult Alaska, Inc. June 2011.
Polarconsult 2017. Crooked Creek and Jim’s Lake Final Hydrology Report. Polarconsult
Alaska, Inc. October 2017.
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Elfin Cove Utility Commission
Crooked Creek and Jim’s Lake Hydroelectric Project
Business and Operating Plan Polarconsult Alaska, Inc.
May 2020 – Final Report
APPENDIX A – ENGINEER’S ENERGY ESTIMATE
Elfin Cove Utility Commission
Crooked Creek and Jim’s Lake Hydroelectric Project
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May 2020 – Final Report A-1
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Crooked Creek and Jim’s Lake Hydroelectric Project
Business and Operating Plan Polarconsult Alaska, Inc.
May 2020 – Final Report A-2
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
200320042005200620072008200920102011201220132014201520162017201820192020Annual kWh Generated$0.00
$1.00
$2.00
$3.00
$4.00
$5.00
$6.00
$7.00
$8.00
$9.00
Fuel Price ($ per gallon)Unsubsidized Electric Rate ($ per kWh)kWh Generated
Fuel Price
Unsubsidized Electricity
Cost ($ per kWh)
Note: 2007 is missing three months of generation data.
A.1 UTILITY PERFORMANCE DATA
This section summarizes past utility performance to provide context for the hydro project
energy estimate. Table A-1 summarizes the utility’s energy and financial performance for fiscal
years 2003 through 2019. Data highlights over the past 16 years include:
- Total annual energy generation varied from 277,000 to 409,000 kWh with an average of
328,000 kWh. Generation in fiscal year 2019 of 325,389 kWh was about average. Annual
energy generation is presented in Figure A-1.
- In years with complete data, system electrical losses have varied from 7 to 11 percent with
an average of 9 percent.
- Diesel power plant efficiency has varied from 11.1 to 12.6 kWh generated per gallon. The
average is 12.0 kWh per gallon.
- Fuel price has varied from $1.92 to 5.69 per gallon. The average has been $3.83 per gallon.
Monthly fuel price is presented in Figure A-1.
- Utility load trends evident on Figure A-1 are attributed to (1) economic effects of the post-
2008 recession on the Elfin Cove economy and (2) ratepayer conservation efforts related to
the high cost of electricity.
Figure A-1: Annual Energy Generation and Monthly Fuel Cost for ECUC
Elfin Cove Utility Commission
Crooked Creek and Jim’s Lake Hydroelectric Project
Business and Operating Plan Polarconsult Alaska, Inc.
May 2020 – Final Report A-3
Table A-1: Elfin Cove Utility Commission Past Electric Utility Operating Data
Fiscal
Year 2 kWh Gen. kWh Sold
Station
Service
kWh
Total
Metered
kWh
System
Losses
(as % of
Gen.)
Fuel
Used
(gal.)
Fuel
Efficiency
(kWh gen.
per gal.)
Fuel
Price
($/ gal.)
Fuel
Expense
Non-Fuel
Expense
Total Power
Production
Expense
Total
Expenses
per kWh
Sold
Utility
Rate
($/kWh)
2004 409,133 356,628 22,802 379,430 7% 33,712 12.1 $1.92 $64,562 $60,690 $125,252 $0.35 $0.25
2005 347,540 297,104 27,177 324,281 7% 31,063 11.2 $2.50 $77,584 $41,787 $119,370 $0.40 $0.42
2006 344,389 300,907 25,031 3 325,938 5% 3 31,126 11.1 $3.35 $104,281 $48,538 $152,818 $0.51 $0.51
2007 240,550 3 292,987 16,886 3 309,873 -29% 3 33,602 7.2 3 $3.65 $122,565 $39,213 $161,778 $0.55 $0.43
2008 359,834 323,798 0 3 323,798 10% 3 29,464 12.2 $3.94 $115,977 $32,691 $148,668 $0.46 $0.56
2009 349,697 306,468 12,412 3 318,880 9% 3 28,576 12.2 $5.69 $162,706 $36,826 $199,532 $0.65 $0.52
2010 334,905 277,713 29,025 306,738 8% 26,561 12.6 $3.92 $103,995 $35,401 3 $139,396 3 $0.50 3 $0.52
2011 309,063 247,189 20,292 3 267,481 13% 3 25,533 12.1 $4.23 $107,883 $28,438 $136,322 $0.55 $0.69
2012 297,146 241,983 0 3 241,983 19% 3 24,837 12.0 $4.96 $123,108 $0 3 $123,108 3 $0.51 3 $0.80
2013 290,910 236,980 0 3 236,980 19% 3 24,119 12.1 $5.11 $123,147 $0 3 $123,147 3 $0.52 3 $0.80
2014 277,540 227,786 0 3 227,786 18% 3 22,926 12.1 $2.43 $55,705 3 $0 3 $55,705 3 $0.24 3 $0.78
2015 290,550 241,106 25,443 266,549 8% 24,417 11.9 $4.68 $114,232 $41,155 $155,387 $0.64 $0.76
2016 317,816 261,272 24,327 285,599 10% 25,913 12.3 $3.88 $100,541 $37,359 $137,899 $0.53 $0.68
2017 316,607 266,773 18,490 285,263 10% 26,960 11.7 $3.39 $91,331 $56,481 $147,811 $0.55 $0.59
2018 350,218 291,555 23,395 314,950 10% 28,312 12.4 $3.38 $95,653 $64,930 $160,583 $0.55 $0.63
2019 325,389 256,907 31,143 288,050 11% 27,025 12.0 $4.21 $113,658 $73,889 $187,546 $0.73 $0.68
Acronyms, abbreviations, and notes.
1. Data is derived from Elfin Cove Utility Commission’s monthly reports filed for the Power Cost Equalization program.
2. The fiscal year runs from July 1 of the preceding year to June 30 of the stated year.
3. Statistic is calculated from incomplete monthly data and may not be accurate.
gal. Gallons
gen generated
kWh kilowatt-hours
Elfin Cove Utility Commission
Crooked Creek and Jim’s Lake Hydroelectric Project
Business and Operating Plan Polarconsult Alaska, Inc.
May 2020 – Final Report A-4
75%
77%
79%
81%
83%
85%
87%
89%
91%
93%
95%
275,000 300,000 325,000 350,000 375,000 400,000 425,000
Annual Utility Load at Generation (kWh)Percentage of Utility Load Met by HydroFULL DEVELOPMENT
PHASED DEVELOPMENT
A.2: PROJECT ENERGY ESTIMATE
The engineer’s energy estimate for the hydro project is presented in Table A-3. A limited
sensitivity analysis was performed to evaluate annual load variations and project development
scenarios. These scenarios are described in Table A-2. Figure A-2 presents estimated utility
demand met by the hydro systems under load and project development scenarios.
Table A-2: Sensitivity Analysis Scenarios for Project Energy Estimate
Parameter – 50k Load Growth Base Case Load +50k Load Growth
Annual Prime Energy
Sales (kWh) 248,000 293,500 339,000
Annual Load at
Generation (kWh)1 300,000 350,000 400,000
Project Development
Phased Development
1. No power recovery on upper
system
2. Full 105 kW lower system, but
with smaller dam.
Full 140 kW development
1. For diesel-only operation, value with hydro project is higher. See narrative at Section 3.2.2.
Figure A-2: Performance Estimates Under Load Growth and Project Development Scenarios
Elfin Cove Utility Commission
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May 2020 – Final Report A-5
Table A-3: Engineer’s Energy Estimate for Crooked Creek and Jim’s Lake Hydroelectric Project
Phased Development
Scenario Full Development Scenario
Utility Supply and Demand
Low Base High Low Base High
Total Annual Prime Energy Sales (kWh) 248,000 293,500 339,000 248,000 293,500 339,000
Total Annual Utility Load at Generation (kWh)1 300,000 350,000 400,000 300,000 350,000 400,000
Total Annual Generation (kWh)2 486,600 522,300 561,600 587,100 620,700 653,400
Utility Load Supplied by Diesel (kWh)
(percentage of equivalent load for current system)
42,500
(14.2%)
61,800
(17.7%)
85,600
(21.4%)
23,600
(7.9%)
35,900
(10.3%)
50,300
(12.6%)
Utility Load Supplied by Hydro (kWh)
(percentage of equivalent load for current system)
444,100
(85.8%)
460,500
(82.3%)
476,000
(78.6%)
563,500
(92.1%)
584,800
(89.7%)
603,100
(87.4%)
Hydro Plant Installed Capacity 105 kW
140 kW
Total Annual Hydro Generation (kWh) 593,900 594,800 594,900 785,800 788,300 786,700
Hydro Output used to Supply Utility Load (kWh)
(percent of available hydro generation)
257,500
(43%)
288,200
(49%)
314,400
(53%)
276,400
(35%)
314,100
(40%)
349,700
(45%)
Hydro Output used for Load Governor / Frequency
Regulation in Diesels-Off Operation
36,800
(6%)
37,800
(6%)
40,100
(7%)
51,300
(7%)
52,300
(6%)
54,600
(6%)
Gross Hydro Output Available for Load Growth
or Dispatchable Loads
299,600
(51%)
268,700
(45%)
240,400
(40%)
458,100
(58%)
421,900
(54%)
382,400
(49%)
kW: kilowatt
kWh: kilowatt-hour
1. Total annual utility load for existing system on 100% diesel generation. Provided for reference.
2. Total annual generation includes hydro generation for dispatched energy sales totaling approximately 50% of available excess hydro energy.
Elfin Cove Utility Commission
Crooked Creek and Jim’s Lake Hydroelectric Project
Business and Operating Plan Polarconsult Alaska, Inc.
May 2020 – Final Report A-6
The engineer’s energy estimate for the hydro project and utility is based on the following:
1. Daily utility demand, developed using the village load model and recent utility load data.6
2. Crooked Creek and Jim’s Lake hydrology, based on eight years of hydrology data for both
resources (2008 to 2016).7
3. Technical parameters for the hydro and existing diesel generation systems, and the dispatch
model described in the following narrative.
Daily hydro generation was calculated by first determining the amount of power that could be
generated from the quantity of water flowing in Crooked Creek and stored in the Jim’s Lake
reservoir. This value was then compared against the utility’s daily average and peak demand,
and hydro and/or diesel generator dispatch is based on the following three conditions:
a. If there was sufficient hydro capacity available to meet peak utility demand, the diesel plant
would not be run that day and the hydro turbines operated to meet all utility demand.
b. If there was sufficient hydro capacity available to meet average but not peak demand, then
diesels would be assumed to be operated for three hours to meet peak demand.
c. If there was insufficient hydro capacity available to meet average utility demand, then
diesels would be assumed to be operated for twelve hours to meet demand during the day.
These dispatch criteria also considered the following constraints on system operation:
- When operated, diesel gensets were base loaded to at least 40% of nameplate capacity to
maintain reasonable operating efficiency and avoid wet-stacking.
- When the utility operates in diesels-off configuration, a load bank was included in utility
demand to provide frequency regulation.
- The output of the lower system was curtailed to match water inflow when the reservoir was
empty, and increased to full capacity when the reservoir was full. At intermediate reservoir
levels, output was held to meet demand so excess inflow would be stored to meet future
demand.
This analysis was performed on a daily basis through the eight years of hydrology record and
annualized to produce the energy estimates presented in this section.
6 Village load model developed by the National Renewable Energy Laboratory (NREL 2004). Utility load data
based on historic load data in Table A-1. See the feasibility study final report for details. (Polarconsult 2009).
7 See the project hydrology report (Polarconsult 2018). Comparison of the hydrology record against the 42-year
precipitation record at Elfin Cove indicates the hydrology record is representative of long-term conditions.
Elfin Cove Utility Commission
Crooked Creek and Jim’s Lake Hydroelectric Project
Business and Operating Plan Polarconsult Alaska, Inc.
May 2020 – Final Report A-7
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Elfin Cove Utility Commission
Crooked Creek and Jim’s Lake Hydroelectric Project
Business and Operating Plan Polarconsult Alaska, Inc.
May 2020 – Final Report
APPENDIX B – ENGINEER’S COST ESTIMATE
Elfin Cove Utility Commission
Crooked Creek and Jim’s Lake Hydroelectric Project
Business and Operating Plan Polarconsult Alaska, Inc.
May 2020 – Final Report B-1
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Elfin Cove Utility Commission
Crooked Creek and Jim’s Lake Hydroelectric Project
Business and Operating Plan Polarconsult Alaska, Inc.
May 2020 – Final Report B-2
Table B-1: Engineer’s Cost Estimate for Crooked Creek and Jim’s Lake Hydroelectric Project
Engineer’s Cost Estimate
Budget Item Phased Development
(Phase 1) Full Development
Construction
Mobilization / demobilization $450,000 $900,000
Access Trails / Civil Site Work $1,500,000 $2,100,000
Primary Power line $450,000 $450,000
Communications $140,000 $190,000
Secondary Power / Communications $30,000 $60,000
Upper System Intake Structure $40,000 $50,000
Upper System Penstock $100,000 $100,000
Upper System Powerhouse Building $5,000 $80,000
Upper System Turbine / Generator $0 $170,000
Upper System Switchgear / Controls $0 $45,000
Lower System Dam $110,000 $240,000
Lower System Intake Structure $24,000 $50,000
Lower System Penstock $225,000 $225,000
Lower System Powerhouse Building $100,000 $100,000
Lower System Turbine / Generator $230,000 $230,000
Lower System Switchgear / Controls $45,000 $45,000
Utility Master Controller / Dispatched Energy $125,000 $125,000
Subtotal, Direct Construction Cost $3,570,000 $5,160,000
Construction Contingency (~18%) $650,000 $950,000
Contractor Profit (15%) $630,000 $920,000
Construction Administration / Management (5%) $210,000 $310,000
Construction Engineering / Inspection (5%) $210,000 $310,000
PROJECT TOTAL INSTALLED COST $5,270,000 $7,650,000
Elfin Cove Utility Commission
Crooked Creek and Jim’s Lake Hydroelectric Project
Business and Operating Plan Polarconsult Alaska, Inc.
May 2020 – Final Report B-3
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