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HomeMy WebLinkAbout5 Cosmos Hills Feasibility_9-22-13 Cosmos Hills Hydro Feasibility AEA Grant Agreement No. 2195413 Feasibility Study and Conceptual Design Report Prepared for: Alaska Village Electric Cooperative (AVEC) & NANA Regional Corporation September 23, 2013 Prepared by: WHPacific, Inc. 300 W. 31st. Avenue Anchorage, AK 99503 Cosmos Hills Hydro Feasibility AEA Grant Agreement No. 2195413 Feasibility Study and Conceptual Design Report September 23, 2013 Submitted to: Alaska Village Electric Cooperative Submitted by: 300 W. 31st Avenue, Anchorage, Alaska 99503 Phone 1-800-478-4153, Fax (907) 339-5328 Table of Contents Feasibility Study and Conceptual Design Report Page i Cosmos Hills Hydro Feasibility Executive Summary ............................................................................................................. vii Village Information ............................................................................................................ viii Project Information .............................................................................................................. ix Constructability ......................................................................................................................x Economic Analysis .................................................................................................................x Recommended Project ........................................................................................................ xiii 1. Introduction.......................................................................................................................1 1.1 Purpose of Report .........................................................................................................1 1.2 Need for Project ............................................................................................................1 2. Project Background ..........................................................................................................2 2.1 General ..........................................................................................................................2 2.2 AEA Renewable Energy Grant .....................................................................................2 2.3 Completed Reports / Studies ........................................................................................2 3. Cosmos Hills Area Background Information...............................................................13 3.1 Location and Access ...................................................................................................13 3.2 Population and Economy ............................................................................................14 3.3 Culture and History .....................................................................................................15 3.4 Local Governments .....................................................................................................15 3.5 Recreation and Subsistence ........................................................................................16 3.6 Infrastructure ...............................................................................................................17 3.7 Land Ownership and Right-of-Way ...........................................................................18 3.8 Topography and Soils .................................................................................................19 3.9 Gravel Sources ............................................................................................................19 3.10 Climate ........................................................................................................................20 3.11 Natural Hazards ..........................................................................................................20 4. Cosmos Hills Hydrology .................................................................................................21 4.1 Hydrology Overview ..................................................................................................21 4.2 USGS Stream Discharge Data ....................................................................................21 4.3 GWS Stream Discharge Data .....................................................................................23 4.4 Data Analysis ..............................................................................................................24 4.5 Recommended Stream Discharge Data for Developmental Analysis ........................25 5. Existing Diesel Generation and Transmission System ................................................28 5.1 Basic Configuration ....................................................................................................28 5.2 Existing Energy Generation ........................................................................................30 5.3 Existing Energy Market ..............................................................................................32 6. Alternative Project Descriptions ...................................................................................38 Table of Contents Feasibility Study and Conceptual Design Report Page ii Cosmos Hills Hydro Feasibility 6.1 Wesley Creek ..............................................................................................................38 6.2 Dahl Creek ..................................................................................................................45 6.3 Kogoluktuk River .......................................................................................................48 6.4 Hydroelectric Capacity Selection ...............................................................................54 7. Life-Cycle Cost Analysis ................................................................................................55 7.1 Displaced Diesel Electric Generation .........................................................................55 7.2 Project Development Costs.........................................................................................55 7.3 Lifecycle Evaluation ...................................................................................................59 7.4 Project Summary ........................................................................................................66 8. Project Development Issues ...........................................................................................75 8.1 Land Ownership ..........................................................................................................75 8.2 Permitting ...................................................................................................................75 8.3 Federal Energy Regulatory Commission (FERC) Requirements ...............................75 8.4 Environmental .............................................................................................................76 8.5 Constructability ...........................................................................................................77 8.6 Winter Operations .......................................................................................................77 9. Recommendations and Conclusions ..............................................................................79 9.1 Feasible Projects .........................................................................................................79 9.2 Recommended Project: Kogoluktuk River Hydroelectric Project ..............................80 9.3 Next Steps ...................................................................................................................82 10. References ........................................................................................................................85 Figure 1: Project Area Vicinity Map ..................................................................................... 13 Table 3-1: Location Data ....................................................................................................... 14 Table 3-2: U.S. Census Data and Growth Rates for Kobuk, Shungnak, and Ambler ........... 15 Table 3-3: Cosmos Hills Area Climate Data ......................................................................... 20 Table 4-1: Monthly Flows – Dahl Creek (USGS 15743850 DAHL C NR KOBUK AK, 11 sq mi Drainage Area *) .......................................................................................................... 21 Table 4-2: Monthly Flows – Kobuk River (USGS 15744500 KOBUK R NR KIANA AK, 9520 sq mi Drainage Area *) ................................................................................................. 22 Table 4-3: Monthly Flows – Wesley Intake Site, 5.2 sq mi Drainage Area (Based on scaling of USGS Dahl Creek Discharge Record) .............................................................................. 26 Table 4-4: Monthly Flows – Dahl Intake Site, 8.5 sq mi Drainage Area (Based on scaling of USGS Dahl Creek Discharge Record) ................................................................................... 27 Table 4-5: Kogoluktuk Intake Site, 424 sq mi Drainage Area (Based on scaling of USGS Kobuk River Discharge Record) ........................................................................................... 27 Table 5-1: Shungnak power generation units ........................................................................ 28 Table 5-2: Ambler Power Generation Units .......................................................................... 29 Table of Contents Feasibility Study and Conceptual Design Report Page iii Cosmos Hills Hydro Feasibility Table 5-3: Proposed Ambler Intertie ..................................................................................... 29 Table 5-4: PCE Electric Demand .......................................................................................... 30 Table 5-5: Projected Energy Demand .................................................................................... 31 Table 5-6: AVEC Diesel Fuel Deliveries to Ambler, 2004 to 2012 ...................................... 33 Table 5-7: AVEC Diesel Fuel Deliveries to Shungnak, 2004 to 2012 .................................. 33 Table 5-8: Fuel Price Projection Scenarios, Fuel Price in 2013 $/gal ................................... 36 Table 5-9: Nonfuel Costs from AVEC 2012 PCE Annual Report ........................................ 37 Table 6-1: Wesley Creek - Penstock Diameters and Hydraulic Capacity ............................. 40 Table 6-2: Dahl Creek - Penstock Diameters and Hydraulic Capacity ................................. 46 Table 6-3: Hydro Project Detailed Configuration ................................................................. 54 Table 7-1: Wesley Creek Project - Conceptual-Level Development Cost Estimate ............. 56 Table 7-2: Dahl Creek Project - Conceptual-Level Development Cost Estimate ................. 57 Table 7-3: Combined Wesley Creek / Dahl Creek Project - Conceptual-Level Development Cost Estimate ......................................................................................................................... 58 Table 7-4: Kogoluktuk River Project - Conceptual-Level Development Cost Estimate ....... 59 Table 7-5: Operations and Maintenance Costs ...................................................................... 59 Table 7-6: Net Present Value of Hydro Project Benefits, Millions of 2013 $....................... 62 Table 7-7: Net Present Value of Hydro Project Cost, Millions of 2013 $ ............................. 62 Table 7-8: Hydro Project Benefit to Cost Ratios ................................................................... 63 Table 7-9: Net Present Cost of Electric Generation, Millions of 2013 $ .............................. 63 Table 7-10: Net Present Value of Using “Excess” Electricity for Heat, Millions of 2013 $ 65 Table 7-11: Hydro Project Benefit to Cost Ratios, including the Heat Value of Electricity . 66 Exhibit 4-1: Daily Flow Chart for USGS 15743850 DAHL C NR KOBUK AK ................. 22 Exhibit 4-2: Daily Flow Chart for USGS 157444500 KOBUK R NR KIANA AK ............. 23 Exhibit 4-3: Chart Comparing the USGS and G-W Scientific (Lilly) Dahl Creek Discharge Data ........................................................................................................................................ 24 Exhibit 4-4: Chart of Cosmos Hills Region Unit Discharge Data, 2010 Water Year ........... 25 Exhibit 5-1: Projected Electric Generation for Ambler and Shungnak ................................. 31 Exhibit 5-2: Daily Power Demand ........................................................................................ 32 Exhibit 5-3: Ambler Fuel Pricing Projections ....................................................................... 36 Exhibit 6-1: Wesley Creek Hydro Energy Potential .............................................................. 44 Exhibit 6-2: Dahl Creek Hydro Energy Potential .................................................................. 48 Exhibit 6-3: Kogoluktuk River Hydro Energy Potential ....................................................... 53 Exhibit 7-1: Wesley Creek Hydroelectric Project Summary ................................................. 67 Exhibit 7-2: Dahl Creek Hydroelectric Project Summary ..................................................... 69 Exhibit 7-3: Wesley + Dahl Hydroelectric Project Summary ............................................... 71 Exhibit 7-4: Kogoluktuk River Hydroelectric Project Summary .......................................... 73 Appendices A Wesley Creek Conceptual Design B Dahl Creek Conceptual Design C Kogoluktuk River Conceptual Design D Conceptual-Level Construction Cost Estimates Summary of Abbreviations and Acronyms Feasibility Study and Conceptual Design Report Page iv Cosmos Hills Hydro Feasibility AASHTO American Association of State Highway and Transportation Officials ADF&G Alaska Department of Fish and Game ADNR Alaska Department of Natural Resources ADOT&PF Alaska Department of Transportation and Public Facilities ADT Average daily traffic AEA Alaska Energy Authority AHRS Alaska Heritage Resource Survey AK Alaska ANCSA Alaska Native Claims Settlement Act ANTHC Alaska Native Tribal Health Consortium ATV All-terrain vehicle AVEC Alaska Village Electric Cooperative BIA Bureau of Indian Affairs BLM Bureau of Land Management CFR Code of Federal Regulations cfs Cubic feet per second DCCED Department of Commerce, Community, and Economic Development DCRA Division of Community and Regional Affairs DEM Digital elevation model E East EA Environmental Assessment ESE East-southeast °F Degrees Fahrenheit FERC Federal Energy Regulatory Commission FHWA Federal Highway Administration FONSI Finding of No Significant Impact fps Feet per second FRP Fiberglass reinforced plastic ft Feet GDVLVLR AASHTO’s “Guidelines for Geometric Design of Very Low-Volume Local Roads” GWS Geo-Watersheds Scientific H Horizontal HDM ADOT&PF’s “Alaska Highway Drainage Manual” HDPE High-density polyethylene ISER University of Alaska Anchorage Institute of Social and Economic Research IRA Indian Reorganization Act K Kindergarten kW Kilowatt LIDAR Laser imaging detection and ranging mi. Mile MIRL Medium intensity runway lighting N North N/A Not Applicable NAB Northwest Arctic Borough NANA NANA Regional Corporation Summary of Abbreviations and Acronyms Feasibility Study and Conceptual Design Report Page v Cosmos Hills Hydro Feasibility NFS Non-frost susceptible NHS National Highway System NIHA Northwest Inupiat Housing Authority NWABSD Northwest Arctic Borough School District O&M Operation and maintenance PCE Alaska Energy Authority Power Cost Equalization Program PCM ADOT&PF’s “Alaska Preconstruction Manual” P.E. Professional Engineer PGDHS AASHTO’s “A Policy on Geometric Design of Highways and Street” PLSS Public Land Survey System P.O. Post Office R Range RCA Regulatory Commission of Alaska ROW Right-of-way S South SHPO State Historic Preservation Office sq. mi. Square mile T Township U.S. United States USACE United States Army Corp of Engineers USGS United States Geological Survey USS United States Survey V Vertical vpd Vehicles per day W West WNW West-northwest WRCC Western Regional Climate Center % Percent $ U.S. Dollars ° Degree ‘ Minute “ Second Summary of Abbreviations and Acronyms Feasibility Study and Conceptual Design Report Page vi Cosmos Hills Hydro Feasibility This page left intentionally blank Executive Summary Feasibility Study and Conceptual Design Report Page vii Cosmos Hills Hydro Feasibility EXECUTIVE SUMMARY This report provides economic and technical feasibility conclusions for hydro projects in the Upper Kobuk Valley that would serve the villages of Ambler, Shungnak, and Kobuk. The Alaska Village Electric Cooperative (AVEC) is the electric utility for Upper Kobuk Valley villages. The utility has been interested in assessing hydropower potential in the region for many years. In fact, a limited number of hydropower studies have been performed in the area since 1979. Ambler, Shungnak, and Kobuk are small villages located on the Kobuk River. These villages are accessible by river and air; no roads connect them. The villages are adjacent to the Cosmos Hills, where three potential hydroelectric projects are located: Wesley Creek, Dahl Creek, and Kogoluktuk River Hydroelectric Projects. Kobuk is the closest village to the project sites. Kobuk is approximately 7 miles east- northeast of Shungnak, 30 miles east-southeast of Ambler, 150 miles east of Kotzebue. The project is funded by a grant from the Alaska Energy Authority. This report is the culmination of a project begun in 2009 that includes nine previous reports. This report Project Area Vicinity Map Executive Summary Feasibility Study and Conceptual Design Report Page viii Cosmos Hills Hydro Feasibility provides a conceptual design for three potential hydropower projects. It provides economic and technical feasibility analysis and recommends a single project for further study. Village Information According to the 2010 census, the region has a population of 671, of which 151 live in Kobuk, 262 in Shungnak, and 258 in Ambler. At the time of the census, the population was between 85% and 95% Native. The median household incomes of Kobuk, Shungnak, and Ambler were reported to be $31,300, $47,700, and $57,600, respectively. Most residents supplement their income with subsistence activities. The villages all have federally recognized tribes governed by Tribal Councils. All three communities also have City governments. Kobuk, Shungnak, and Ambler were incorporated as second class cities within the Northwest Arctic Borough in 1973, 1967, and 1971. Native residents of the villages are also represented by their regional Native Corporation, NANA Regional Corporation (NANA). Electric service is provided by AVEC. Kobuk and Shungnak are connected by a 7-mile intertie run by the Kobuk Valley Electric Company. Electric energy for Kobuk is produced at the diesel generation plant in Shungnak and delivered through the existing Shungnak- Kobuk intertie, which was constructed about 30 years ago (AVEC Kobuk). Ambler has its own electric generation plant. Most homes in the villages are connected to the community’s electrical distribution system. Between 2008 and 2012, annual electric energy generated at the Shungnak plant, which also serves Kobuk, averaged 1,534,950 kWh/year. The same annual average for Ambler was 1,294,784 kWh/year. During that time, electric production has fluctuated somewhat, but on average it has increased by a region-wide average of 1.4%/year; 1.8%/year for Shungnak and 0.9% for Ambler. For many years, fuel has typically been delivered by barge to Ambler and Shungnak. Over the last decade, the Kobuk River has, with increasing frequency, been too low to accommodate barges, and fuel has been delivered by air at a significant additional cost. From 2004 to 2012, Ambler has been forced to rely on air delivery 24% of the time and Shungnak, located further upriver, has received 57% of its fuel deliveries by air. Locals are increasingly observing shallow, difficult river conditions at the villages. Air delivery of fuel is significantly more expensive than barge delivery. Fuel delivered by barge between 2004 and 2012, has averaged $3.59/gallon at Ambler and $3.13/gallon at Shungnak. (The reason barge-delivered fuel appears cheaper at Shungnak is that during the most expensive barge years, Shungnak received only air-delivered fuel.) Air-delivered fuel has averaged $5.60/gallon for Ambler and $5.79/gallon for Shungnak for that time period. Both villages are currently receiving 100% of their fuel by airplane at a cost of $7.75/gallon at Ambler and $7.00/gallon at Shungnak. Residents propose a variety of reasons for the increasing difficulty of getting barges to the communities, but they are clear that the problem Executive Summary Feasibility Study and Conceptual Design Report Page ix Cosmos Hills Hydro Feasibility is getting worse. In the future, AVEC does not expect to receive barges at Shungnak, and expects to require air delivery to Ambler approximately half the time. Fuel oil is the primary heat source for village residents and commercial facilities. It is selling for $7/gallon in Ambler and $10/gallon in Shungnak. Project Information The three hydroelectric projects being considered are all run-of-the river projects. Two of them, the Wesley Creek and Dahl Creek projects, are on relatively small creeks. During much of the year, the projects’ electric output would be almost completely used by the villages when they begin operation. The third project, Kogoluktuk River, is much larger, as it is on a much larger river. The project is large enough to generate electricity surplus to current village needs. The surplus electricity could be used for heat, to supply village growth, or for economic opportunities that develop in the region. The economic analysis in the report includes 12 different fuel, intertie, and environmental scenarios. A comparison of one representative scenario is listed below to help describe the projects and illustrate the differences between them. The scenario below assumes that an intertie is constructed between Ambler and Shungnak and so links the electric loads for all three villages. It also assumes an AVEC price forecast for fuel, and that agencies require some water to by-pass the intake to maintain fish habitat in the section of the river between the intake and tailrace. Table E-1: Project Information Wesley Creek Dahl Creek Kogoluktuk River Drainage Basin (sq. miles) 5.2 8.5 424 Median Monthly Streamflow (cfs) 9.0 14.6 574.6 Design Flow (cfs) 15 16 170 Static Head (feet) 292 257 64 Installed Hydro Capacity (kW) 260 230 690 Penstock Length (feet) 7,750 9,000 4,300 Hydro penetration in Year 0 1,000,000 1,210,000 4,940,000 Annual Energy Potential (kWh) 32% 39% 90% Development Cost (million $) $13,619,000 $15,247,000 $38,660,000 Annual O&M cost $68,100 $76,200 $193,300 In the table above, the measurement location for the drainage basin and median monthly streamflow is the hydro’s intake site. Hydro penetration means the proportion of the village’s annual electric needs that the hydro supplies when the project begins operation. The reason that the penetration is not 100% is that none of the projects supply all of the villages’ electric needs during the winter when streamflow is lowest and village electric demand is highest. Executive Summary Feasibility Study and Conceptual Design Report Page x Cosmos Hills Hydro Feasibility Constructability All of the projects appear technically feasible to construct. None appear to have unusual land, permitting, or construction issues. • Land Ownership Issues. There are no significant ownership or land use issues with the potential hydro projects. Each would be on land owned by NANA Regional Corporation. All of the access routes are on NANA-owned land. None affect any private parcels or mining claims, though the potential road to the Kogoluktuk would need to be routed to avoid the Dahl Creek runway and a Native Allotment. • Permitting/FERC/Environmental Issues. None of the projects appear to have serious permitting/FERC/environmental issues. Each of the projects is likely exempt from the FERC process, based on previous studies in the area. None of the projects has obvious permitting pitfalls, except that the extent of required environmental flows remains to be determined. These flows have a significant effect on the projects’ benefits. Determination of required environmental flows typically occurs during permitting and final design. • Constructability. None of the projects have unusual constructability issues. The Wesley and Dahl projects should have a straight forward construction process. Access to much of the Wesley project already exists. Primitive access exists to the Dahl site. The Kogoluktuk would be a little more difficult, because a six-mile access road will need to be constructed before the project can begin construction. In addition, the penstock route will require blasting in steep terrain. The increased cost for this construction is included in the Kugluktuk’s construction estimate. Otherwise, this project also does not present unusual constructability issues. • Sensitivity to Hydrologic Changes. The economic analysis and power generation estimates for the three projects are based on the median streamflow. Because Wesley and Dahl projects use most of the flow in the respective creeks, these two projects are more susceptible to hydrologic fluctuations. In dry years, they would produce less power. In wet years, possibly more. The Kogoluktuk project is much less sensitive to changes in hydrology. Because this project uses a small amount of a large flow, it is not very sensitive to dry years and has a hydraulic advantage in reducing the amount of debris and sediment diverted into the intake. The river would have to have extremely low flow before greatly affecting the Kogoluktuk output. In addition, wet years would have little effect on the electricity output. The Kogoluktuk’s power output and economic conclusions are therefore somewhat more reliable than the other two projects. Economic Analysis The report analyzes 12 economic scenarios for the three projects. It analyzes them with and without an intertie between Ambler and Shungnak (i.e., with a combined 3-village electric load, or supplying only the Shungnak/Kobuk load). While the economic analysis includes Executive Summary Feasibility Study and Conceptual Design Report Page xi Cosmos Hills Hydro Feasibility intertie and no-intertie scenarios, the intertie has significant positive benefits. In fact, the intertie is economically advantageous even if the hydro projects are not constructed. For that reason, the project team expects that the intertie will be constructed whether or not the hydro projects are built. 1 The economic analysis uses three fuel price scenarios. Two of them are taken from an Institute from Economic Research report (ISER, 2012). ISER prepares fuel price projections for over 150 Alaska villages. The two fuel price scenarios used in the economic analysis are described as ISER Medium fuel case, and ISER High fuel case. Because these two fuel price scenarios are based on past practices, they under-predict future fuel prices due to the unfortunate but increasing frequency of air delivery. For that reason, the report also uses a fuel price projection that includes AVEC’s expectation of future air delivery: a forecast of 50% air delivery in Ambler and 100% air delivery in Shungnak. The final variable in the economic scenarios is environmental flows. Environmental flows are streamflow that the government agencies require to bypass the hydroelectric intake to maintain certain streamflow in the section of the river between the intake and tailrace. The greater the environmental flow, the less water available to produce electricity, especially during periods of low flow, as in winter. Unfortunately, the actual agency-required environmental flows will not be known until permitting is finished. Agencies could require a lower volume than the economic model assumes, or possibly a higher volume. It is even possible that if appropriate mitigation were found, no environmental flow would be required. The economic analysis used two environmental flow scenarios: with and without a required flow. Other economic assumptions include: • 2013 Dollars. All numbers are reported in 2013 dollars. • Discount Rate. A discount rate of 2.5% was selected to discount future benefits to 2013 dollars. The selection of the discount rate is based on the recently completed Southeast Integrated Resource Plan prepared by Black and Veatch for AEA. • Term of Analysis. The term of analysis is 50 years, consistent with other AEA hydro analyses. • Load Growth. The analysis assumes a 1% continuous load growth for the villages. This growth is less than the load growth that has occurred in the village in the last five years. A greater list of economic assumptions is given in the body of the report. Using these economic assumptions, Table E-2 shows the Benefit/Cost Ratios for six of the twelve economic scenarios analyzed in the report. For simplicity, this executive summary does not 1 The Ambler Intertie has a positive net present value (benefit/cost >1) whether or not the hydro projects are constructed. Including those benefits and costs would greatly increase benefit/cost ratios for each of the hydro projects; all project scenarios would look much better. However, doing so would also make it difficult to determine what portion of the positive benefits occurs because of the hydro projects, and what portion occurred because of the intertie. Therefore, the benefits and costs specific to that intertie are not included in the analysis. Executive Summary Feasibility Study and Conceptual Design Report Page xii Cosmos Hills Hydro Feasibility show the scenarios without the Ambler-Shungnak Intertie. All 12 scenarios are listed in the body of the report. Table E-2: Hydro Project Benefit to Cost Ratios Fuel Case Environmental Flow Intertie Wesley Dahl Kogoluktuk ISER Medium Fuel Case No Yes 0.92 0.98 1.04 ISER High Fuel Case No Yes 1.24 1.33 1.40 AVEC Fuel Case No Yes 1.27 1.36 1.43 ISER Medium Fuel Case Yes Yes 0.81 0.84 0.71 ISER High Fuel Case Yes Yes 1.09 1.13 0.96 AVEC Fuel Case Yes Yes 1.12 1.16 0.97 The table shows that a hydro project is the best alternative for 5 of the 6 scenarios shown. The only scenario where diesel remains the best alternative is for the ISER Medium fuel case with required environmental flows). 2 The table also shows the importance of environmental flows. The required environmental flows decrease Benefit/Cost ratios. This conclusion is true even for scenarios where the project remains economically viable with environmental flows. Unfortunately, the actual agency-required environmental flows will not be known until permitting is finished. Agencies could require a lower volume than the economic model assumes, or possibly a higher volume. It is even possible that if appropriate mitigation were found, no environmental flow would be required. Table E-2 shows Benefit/Cost Ratios without assigning any value for the heating potential of surplus electricity. During the flows of spring, summer, and fall, the Kogoluktuk project produces electricity that is surplus to the three-village electric demand. To a much lesser extent, the other projects do as well. The Benefit/Cost Ratios in Table E-2 assume that the surplus electricity has no value. Fortunately, the electricity not needed to supply the village electric demand has a value. It can be used to displace heating oil used to heat water for the village washeterias or for sewer/water projects. In addition it could provide for space-heat for community facilities or even residences. In each of these cases, using the surplus electricity for heat would displace fuel oil. 2 The results for the scenarios that are not shown - the scenarios without an intertie - are similar to the results in Table E-2 in that a hydro project is preferred in five of the six scenarios without an intertie (all except the ISER Medium Fuel case with environmental flow). However, with the small, non-intertied loads, the preferred projects are the Dahl project (3 scenarios) and Wesley Creek project (2 scenarios). Executive Summary Feasibility Study and Conceptual Design Report Page xiii Cosmos Hills Hydro Feasibility Table E-3 shows Benefit/Cost ratios including a value for this surplus electricity. It assumes a heating oil cost escalating at the rate of the respective fuel oil case.3 It also limits electricity as heat based on the demand created by average heating degree days in the villages. Table E-3: Hydro Project Benefit to Cost Ratios, including the Heat Value of Electricity Fuel Case Environmental Flow Intertie Wesley Dahl Kogoluktuk ISER Medium Fuel Case No Yes 0.92 0.98 1.24 ISER High Fuel Case No Yes 1.24 1.33 1.67 AVEC Fuel Case No Yes 1.28 1.37 1.65 ISER Medium Fuel Case Yes Yes 0.81 0.84 0.90 ISER High Fuel Case Yes Yes 1.10 1.14 1.21 AVEC Fuel Case Yes Yes 1.13 1.17 1.19 The table shows that the heat value of this otherwise excess electricity has significant economic value. Benefit/Cost Ratios, especially for the Kogoluktuk project, are much higher in Table E-3 than in E-2. The table shows that including the heat value of “surplus” electricity makes the Kogoluktuk project the preferred project for 5 of the 6 scenarios (diesel still remains the best alternative in the ISER Medium Fuel Case scenario). The Kogoluktuk River Project is preferred even with environmental flows. Finally, including the electric heat value shows some very high Benefit/Cost ratios – up to 1.67. Recommended Project The purpose of the conceptual design and feasibility study is to produce a conceptual design for the hydroelectric projects, and to recommend a single project to go forward to detailed design and permitting. Conceptual designs are provided in appendices to the full report. On the basis of the economic analysis including the value of “surplus” electricity used for heat, and for other policy reasons explained in the full report, this report recommends that the Kogoluktuk Project go forward to detailed design and permitting. 3 Currently (2013), fuel oil is selling for $10/gallon in Shungnak, and $7/gallon in Ambler. Executive Summary Feasibility Study and Conceptual Design Report Page xiv Cosmos Hills Hydro Feasibility This page left intentionally blank Section 1 Project Background Feasibility Study and Conceptual Design Report Page 1 Cosmos Hills Hydro Feasibility 1. INTRODUCTION 1.1 Purpose of Report This Feasibility Study and Conceptual Design Report is the culmination of the work performed under the Alaska Village Electric Cooperative’s (AVEC) Renewable Energy Grant from the Alaska Energy Authority (AEA). AVEC was awarded this grant to evaluate hydropower resources in the Cosmos Hills region. The grant project title is “Cosmos Hills Hydro Feasibility.” This report builds on previous tasks that were completed as part of the grant and evaluates the feasibility of potential hydroelectric projects in the Cosmos Hills area near Kobuk, Alaska. This report will be used as the basis for completing future grant applications to proceed towards the design and construction of a hydroelectric project. The grant states that “the final outcome from this grant will consist of a feasibility level report and a conceptual design report.” This report satisfies that requirement. 1.2 Need for Project The villages of Kobuk, Shungnak, and Ambler do not have access to the electrical grid, so all power must be produced locally. Diesel fuel is the primary source of heat and power generation for these communities. Because of the difficult logistics and the need for on-site fuel storage, fuel costs are extremely high. This region has some of the highest prices in the nation for electricity. Besides stabilizing energy costs, a hydro project would have a significant environmental benefit resulting from the reduced potential for spilled fuels during transport, storage, and use. Currently barges are having difficulty navigating the Kobuk River to get to these villages. Air transport is the only other alternative to deliver fuel to these villages. The chance of an incident during delivery is high and the consequences severe. NANA Regional Corporation (NANA) is very interested in exploring renewable energy resources in their region and has been a partner on a number of the individual studies utilized in this project. NANA will continue to be a partner and strong advocate for this project, as one of their long-term visions is to be 50% reliant on regionally available energy resources by the year 2050. Section 2 Project Background Feasibility Study and Conceptual Design Report Page 2 Cosmos Hills Hydro Feasibility 2. PROJECT BACKGROUND 2.1 General AVEC has been interested in assessing the hydropower potential in the Kobuk River Valley for a number of years. Since 1979, a limited number of hydropower studies have been performed in the area. This project was designed to determine if hydropower in the Kobuk River Valley, specifically in the Cosmos Hills, is a viable and feasible option for AVEC to pursue. NANA is also very interested in exploring renewable energy resources in their region and has been a partner on a number of the individual studies utilized in this project. 2.2 AEA Renewable Energy Grant On November 22, 2009, AVEC was awarded a Renewable Energy Grant from AEA to evaluate hydropower resources in the Cosmos Hills region. The grant project title is “Cosmos Hills Hydro Feasibility” and the grant agreement number is 2195413. The Scope of Work states that AVEC “will use these funds to prepare a feasibility study of the potential hydro resources to serve the villages of Ambler, Shungnak, Kobuk, and Kiana. The stated goal of the study is “to arrive at no more than a single site for each of the four villages for further study or for the interconnected market area.” The grant also states that “the final outcome from this grant will consist of a feasibility level report and a conceptual design report.” The various task items included in the grant agreement are: • Project Start-up and Existing Data Analysis • Community Outreach / Village Presentations • Hydrology Study / Stream Gauging • Surveying and Mapping • Geotechnical Review • Field Studies, Environmental Assessment and Permits • Engineering Design • Feasibility Study and Conceptual Design Report 2.3 Completed Reports / Studies The following reports and studies were conducted by WHPacific and/or our subconsultants as part of this project. A brief summary of each report is provided, below. All of these reports have been previously delivered to AVEC. Section 2 Project Background Feasibility Study and Conceptual Design Report Page 3 Cosmos Hills Hydro Feasibility 2.3.1 Cosmos Hills Hydroelectric Feasibility Study; FERC Requirements and Field Study Recommendations This report, prepared by Solstice Alaska Consulting, Inc. (Solstice) and dated March 30, 2010, summarizes the Federal Energy Regulatory Commission (FERC) licensing and exemption processes for the Cosmos Hills hydroelectric projects. In 2009, AVEC secured separate preliminary permits from the FERC for developing hydroelectric projects on the Shungnak and Kogoluktuk Rivers. Both of these projects were described in the permit as 200- to 250-foot high earth-filled gravity dams spanning the rivers and impounding large reservoirs. Power generated would be 4 to 5 megawatts each. The report states that smaller projects on these two rivers could be exempt from the FERC licensing process. Projects on Jade Creek (near Ambler), Cosmos Hills (near Shungnak), Dahl Creek (near Kobuk), and Canyon Creek (near Kiana) could also fall under a FERC exemption from licensing. Representatives from Solstice met with the FERC and recommended that the following environmental studies be performed at this phase of work: office-based wetlands delineation, fisheries and aquatic resources study, and office-based cultural resources study. The Solstice report also provided a detailed contact list of Federal, state, and local resource agencies and stakeholders. 2.3.2 Cosmos Hills Hydropower Study: Reconnaissance Report This report, prepared by WHPacific and dated September 22, 2010, is the first of a series of documents prepared under this grant. It reviews work completed by others in the past, updates cost estimates, and re-runs economic analyses. The report also describes each of the seven sites being investigated, describes potential projects, identifies project benefits and risks, describes the public outreach efforts undertaken, and provides recommendations on sites to be investigated further. The Dahl Creek, Wesley Creek, Cosmos Creek, and Kogoluktuk River run-of-river sites were recommended for further study. These projects have attractive projected energy outputs and relatively close proximity to electric load and existing infrastructure. The Kogoluktuk River site also has the potential to produce hydropower for more than half the year. The Shungnak River run-of-river, Jade Creek – East Fork, and Canyon Creek sites were not recommended for further study. These projects have limited accessibility and are relatively long distances from community electric loads. The Jade Creek – East Fork and Canyon Creek sites were also estimated to have small generation capacities. The report has six appendices. Appendix A includes the proposed summer 2010 work plans for the following tasks: • Hydro-Electric Hydrologic Network Project (by Geo-Watersheds Scientific) Section 2 Project Background Feasibility Study and Conceptual Design Report Page 4 Cosmos Hills Hydro Feasibility • Orthophoto and LIDAR Mapping (by AeroMetric) • Preliminary Geotechnical Review and Hazards Analysis (by Golder Associates) • Fish and Fish Habitat Survey (by WHPacific) • Wetlands Study (by WHPacific) • Cultural Resources Office Study (by WHPacific) Appendix B contains the Public Meeting minutes from meetings in Ambler, Shungnak, and Kobuk. Appendix C contains Solstice’s FERC report, described above. Appendix D contains Preliminary Project Cost Estimate data from NANA WorleyParsons. Appendix E contains the Preliminary Permits issued by FERC. Appendix F contains data and reports from the HOMER Computer Models for the Dahl Creek and Cosmos Creek sites. 2.3.3 Cosmos Hills Hydropower Study: Summer-Fall 2010 Report In July 2010, AVEC decided to proceed with further study on Cosmos Creek, Wesley Creek, Dahl Creek, and the Kogoluktuk River during the summer/fall 2010 fieldwork season. This report, prepared by WHPacific and dated November 18, 2010, provides a summary of the studies and work completed during summer/fall 2010. Appendices A through E contain the actual reports and work products. Hydrology: Climate/hydrological stations were installed at all four sites in August 2010. Four hilltop radio repeaters were also installed at that time. Since 1986, the U.S. Geological Survey (USGS) has operated a stream gauge on lower Dahl Creek, near the airstrip. Data and records from this existing station will be used along with data collected from the four new hydrologic stations for hydrological analysis of the potential hydropower sites. Water depth is being collected at each climate/hydrologic station and utilized with discharge measurements performed by team members to develop stage/discharge relationships. Additional data is being collected to evaluate climate and river conditions, including air temperature, summer precipitation, camera images, and water temperature. Geo-Watersheds Scientific, Brailey Hydrologic, and EEInternet are the project partners and have started the Cosmos Hills hydroelectric hydrologic network website: http://www.cosmoshydro.org. The website shares real-time data and webcam images from the stream gauges and mini weather stations. Aerial Photography and LIDAR Mapping: Section 2 Project Background Feasibility Study and Conceptual Design Report Page 5 Cosmos Hills Hydro Feasibility AeroMetric made two flights over the Cosmos Hills hydroelectric project study areas – one on August 24, 2010 for aerial photography, and another on September 14, 2010 for LIDAR mapping. The following was provided for each site: • Bare Earth Digital Elevation Model (DEM) data in ASCII format (from LIDAR) • One-foot contour interval topographic maps in AutoCAD format (from LIDAR) • 0.5-foot pixel resolution color digital orthophotos in .tiff format Appendix A contains figures showing this data. Wetlands Delineation: A field reconnaissance was conducted by WHPacific between July 26 and August 2, 2010 to determine wetland types. Field studies were conducted along Cosmos Creek, Dahl Creek, and Wesley Creek. Complete and detailed field delineation will not be conducted until a final project site is selected and the preliminary engineering is completed. This study, entitled Reconnaissance Report: Wetlands and Other Waters of the United States; Cosmos Hills, Kobuk River Valley, Alaska, provides data and mapping that identifies and locates stream channels and wetlands at reconnaissance-level accuracy and characterizes wetlands habitats that will be useful in the planning and selection process to determine a preferred project site. Ordinary High Water Line along the streams was also identified in several locations. Data was collected on adjacent riparian plant communities, channel and floodplain morphology, and topography. The wetland polygons were digitized and labeled according to the U.S. Fish and Wildlife Service’s Cowardin classification system and mapped on an aerial photograph base. Appendix B contains the full report, dated November 5, 2010, by WHPacific. Fisheries and Aquatic Resources Study: A reconnaissance-level fisheries survey was conducted by WHPacific between July 26 and August 2, 2010 to determine general fish abundances, habit characteristics, and water quality. The surveys were conducted on nine separate sample reaches within the Cosmos Creek, Dahl Creek, and Wesley Creek drainages. Dolly Varden were collected at all nine sample reaches and slimy sculpins were collected at four of the reaches. Fish abundance was found to be highest in Dahl Creek, followed by Wesley Creek, and then Cosmos Creek. Pools associated with high velocity cascades yielded the largest number of fish. These habitats were common in Wesley Creek and Dahl Creek. The dominant stream substrates in the lower reaches of Wesley and Cosmos Creeks were gravels and cobbles. The substrates in the lower reaches of Dahl Creek, the middle reaches of Wesley and Dahl Creeks, and the upper reaches of Wesley and Cosmos Creeks were cobbles and large boulders. Appendix C contains the full report, titled Reconnaissance Fisheries Report, dated November 17, 2010, by WHPacific. Section 2 Project Background Feasibility Study and Conceptual Design Report Page 6 Cosmos Hills Hydro Feasibility Office-Based Cultural Resources Study: An office study of the cultural and historical features within the Cosmos Creek, Wesley Creek, and Dahl Creek project areas was conducted by WHPacific in fall 2010. To date, there have been few professional archaeological surveys performed in the Cosmos Hills and there are few known cultural sites. Some of the transportation routes into the Cosmos Hills, as well as other historic sites, such as the mine at Bornite, will need to be evaluated for their historic context. Formal consultation with the Office of History and Archaeology is likely to mirror the Federal Section 106 process. Appendix D contains the full report, titled Cosmos Hills Cultural Resources Office Study, dated October 18, 2010, by WHPacific. Geotechnical: A reconnaissance-level geotechnical exploration was conducted by Golder Associates between July 26 and July 31, 2010 to observe the surficial geological and geotechnical conditions along Cosmos Creek, Dahl Creek, and Wesley Creek. The reconnaissance observations were used in conjunction with existing geological mapping and aerial photography to conduct a general geological and geotechnical assessment of the project areas for potential geohazards and general constructability issues. The general surficial soil conditions were alluvial outwash deposits within established creek channels. Outside of the defined creek channels, within the lower elevations of the drainages, the general soil conditions consisted of fine grained alluvial and aeolian deposits with both unfrozen and potentially frozen (permafrost) soils. At higher elevations along the creek channels, deposits consisted of fractured and weathered bedrock, potential glacial till, and colluvium. Adjacent creek channel slopes above the project areas, that were visible during the reconnaissance, generally did not show signs of recent slope instabilities. Based on this reconnaissance exploration and study, it was determined that conventional foundation systems could be considered for both the unfrozen ground areas and potential frozen ground (permafrost) areas of the project. The facilities should be sited to avoid permafrost areas where possible. Penstock alignment and drainage topography will pose foundation geometry and construction challenges at some alignment areas where the creek channels are well defined with adjacent steep slopes of colluvium and weathered and fractured rock deposits. A subsurface soil exploration should be conducted at specific facility locations during the design development to confirm the surficial observations obtained during the reconnaissance study. Appendix E contains the full report, titled Geotechnical Reconnaissance Report; Cosmos Hills Hydroelectric Feasibility Study, dated February 4, 2011, by Golder Associates. Section 2 Project Background Feasibility Study and Conceptual Design Report Page 7 Cosmos Hills Hydro Feasibility Recommendations in that report for 2011 work included: • Continue monitoring the stream flows from the Cosmos Hills hydrology network stations through the end of 2011. • Conduct the geotechnical, wetlands delineation, and fish habitat fieldwork at the Kogoluktuk River site in summer 2011. • Perform the office-based cultural resources study at the Kogoluktuk River site. • Delay further engineering design, cost estimates, and detailed feasibility analysis until fall 2011. This will allow a full year’s worth of hydrologic data to be collected. 2.3.4 Cosmos Hills Technical Review and Assessment of Alternatives This technical memorandum, prepared by WHPacific and dated October 2011, presents the results of a review and assessment of the work done to date, including hydrology, hydroelectric modeling, geotechnical, environmental, conceptual engineering, and site prioritization. Work was performed between July and September 2011 and involved representatives from AVEC, NANA Regional Corporation, WHPacific, NANA Worley Parsons, GW Scientific, Golder Associates, and DOWL HKM. The technical memorandum includes discussions on the following: • Hydrology and hydroelectric assessment o Based on the preliminary stage-discharge relationships developed for each site and elevation data, the four sites were reassessed for the potential power availability. • Site prioritization o Based on the hydrology and hydroelectric reassessments, the sites were prioritized based on their economic attractiveness. o The Dahl Creek project was not recommended for further consideration by AVEC because the lower-than-expected elevation difference between the intake and powerhouse locations reduces the potential power generation. o The Cosmos Creek project was not recommended for further consideration by AVEC because of lower-than-expected flows which reduce the potential power generation. o The Wesley Creek and Kogoluktuk River projects were recommended for further consideration by AVEC. • Design considerations o Because not much was known regarding the Kogoluktuk River site, design considerations were focused primarily on the Wesley Creek project. o The Wesley Creek intake site is heavily vegetated and has large rock outcroppings. The geotechnical aspects of the site are the largest risk factors. o The Wesley Creek penstock alignment will follow the access routes as much as possible. Section 2 Project Background Feasibility Study and Conceptual Design Report Page 8 Cosmos Hills Hydro Feasibility o The Wesley Creek powerhouse will be located within the creek channel flood plain where unfrozen sand and gravel deposits are likely. If granular material is present, then a shallow-depth reinforced concrete foundation system can be used. If fine-grained material deposits are present, then deeper excavation or a pile foundation option will need to be considered. o The Wesley Creek tailrace will need to be designed to minimize impacts to fish habitat. o The Wesley Creek site could tie into the existing Shungnak-Kobuk intertie via an approximately 2-mile transmission line. A small substation would be required at the tie-in location. o The Kogoluktuk River site would require a much longer transmission line and would tie in directly at Kobuk. o A detailed review and assessment of the required access roads was not done at this time. • Preliminary geotechnical investigations • Wetlands and fisheries summaries • Sub-regional energy delivery overview • Discussion and recommendations 2.3.5 Cosmos Hills Hydroelectric Feasibility Study; Geotechnical Investigation Kogoluktuk River Hydropower Site This December 14, 2011 report, prepared by WHPacific, contains the geotechnical assessment of the Kogoluktuk River project site. The reconnaissance-level geotechnical exploration was conducted by WHPacific between August 30 and September 1, 2011 to observe the surficial geological and geotechnical conditions along two reaches of the Kogoluktuk River. The reconnaissance observations included bedrock geologic mapping and structural mapping, along with shallow soil probing and a review of stream and slope stability. The geotechnical investigation showed a variet y of landforms associated with two main bedrock controlled cascade reaches. The bedrock consists of very competent granitic gneiss with a shallow north dip in both reaches. This bedrock controls upstream and downstream knickpoints in the river and most of the stream reach is underlain by exposed bedrock. The most important structural fabric in the bedrock is a shallow north-dipping foliation (20-30 degrees). Shallow soils are developed both directly on the bedrock and on thin deposits of glacial outwash and ice-marginal deposits adjacent to the river. The deposits range from well-sorted cobble and gravel alluvium, to fine-grained sandy outwash, to silty wind-blown loess. Organic-rich soils are developed directly on bedrock in some shallow wetlands. Five main types of surficial deposits are found within the project area. Section 2 Project Background Feasibility Study and Conceptual Design Report Page 9 Cosmos Hills Hydro Feasibility • The most extensive type consists of thin alluvial deposits developed on bedrock ridges. These are well-drained soils in moderately sorted fluvial gravels. They are typically found on high spots, forming a thin cover over bedrock ridges. • A large part of the project area is covered by fine-grained, sandy, wind-blown loess. These soils range from fine sand to silt and are the result of wind-blown deposition related to ice-marginal glacial sediment. • Sandy loam soil is developed on fine-grained alluvial deposits adjacent to the river. • Wetland soils are developed in shallow depressions, typically on bedrock. These depressions, in many cases, lack internal drainage, and remain saturated throughout the year. • Large bedrock slabs form colluvial deposits in some areas of the project area. They typically occur near bedrock outcrops, but contain large voids and are covered by moss and spruce trees. There are some shallow scarps developed along the immediate cutbanks of the river, especially on outside bends in alluvial reaches. Otherwise, slopes appear stable and there is no evidence of any recent seismic activity such as fault scarps, slumps, or landslides. The bedrock at both the proposed intake and powerhouse locations is moderately foliated granite gneiss that is highly competent. 2.3.6 Cosmos Hills Hydroelectric Pre-Construction Program; Reconnaissance Report: Fisheries and Water Quality Resources (Aquatic Resources): Kogoluktuk River Study Area This April 25, 2012 report, prepared by WHPacific, contains the results of the fisheries reconnaissance of the Kogoluktuk River project area. The reconnaissance-level fisheries survey was conducted by WHPacific between August 30 and September 1, 2011 to determine general fish populations, habit conditions, and water quality parameters. The surveys were conducted on three sample reaches within the Kogoluktuk River study area. The study area was centered on the two series of falls and rapids, referred to as the “upper cataract” and “lower cataract.” The three sample reaches were located downstream of the “lower cataract,” immediately downstream of the “upper cataract,” and immediately upstream of the “upper cataract.” A total of six species of fish were collected in the study area, but only two species were collected in the middle and upper reaches. Chum salmon, round whitefish, Arctic grayling, slimy sculpin, northern pike, and Dolly Varden were collected in the lower reach. Only slimy sculpin and Arctic grayling were collected above the “lower cataract” in the middle and upper reaches. It appears that the “lower cataract” prevents upstream passage of fish to the upper river reaches. Section 2 Project Background Feasibility Study and Conceptual Design Report Page 10 Cosmos Hills Hydro Feasibility 2.3.7 Cosmos Hills Hydroelectric Pre-Construction Program; Reconnaissance Report: Wetlands and Other Waters of the United States: Kogoluktuk River Study Area This April 5, 2012 report, prepared by WHPacific, contains the results of the wetlands assessment of the Kogoluktuk River project area. The reconnaissance-level wetlands investigation was conducted by WHPacific between August 30 and September 1, 2011 to determine wetland types. The study provides data and mapping that identify and locate stream channels and wetlands at reconnaissance-level accuracy and characterize wetlands habitats that will be useful in the planning and selection process of determining a preferred project site. Ordinary high water line along the streams was also identified in several locations. Data was collected on adjacent riparian plant communities, channel and floodplain morphology, and topography. The wetland polygons were digitized and labeled according to the U.S. Fish and Wildlife Service’s Cowardin classification system and mapped on an aerial photograph base. 2.3.8 Cosmos Hills Hydrologic Network Installation and Operation, August 2010 – December 2011 This May 2012 report, prepared by Geo-Watersheds Scientific, describes the hydrologic monitoring network that was installed to record weather and stream flow data on Cosmos Creek, Dahl Creek, Wesley Creek, and the Kogoluktuk River. This hydrologic monitoring network was partially funded by NANA Development Corporation. The hydrologic monitoring network includes the following: • Four gauging stations located at the potential intake structures • A fifth gauging station located at the Upper Kogoluktuk River Falls to gather winter flow measurements • Air temperature, relative humidity, and summer precipitation sensors at the four stream gauging stations • Time-lapse digital camera at the four gauging stations and the Upper Kogoluktuk River Falls station • Four water temperature monitoring stations located at potential tailraces • Four ridge-top repeaters transmitting data and camera images to an Internet base station at the Kobuk School • Air temperature sensors at the four ridge-top repeater sites The Alaska Department of Natural Resources (ADNR), Alaska Department of Fish and Game (ADF&G) and multiple Federal regulatory agencies reviewed the project work plan before field work began and indicated that the approach would meet their criteria for hydropower-related water-resource investigations. The installation objectives were to set up the data collection stations, perform stream surveys, collect discharge measurements and water chemistry data, and observe the general Section 2 Project Background Feasibility Study and Conceptual Design Report Page 11 Cosmos Hills Hydro Feasibility hydrologic conditions at the sites. The primary purpose of the network and resulting field data collection efforts was to develop stage-discharge rating curves for each of the primary gauging stations. Secondary objectives included gathering basic water quality characteristics, such as water temperature and conductivity. Summer precipitation, spring snowpack measurements, air temperature, and relative humidity data were also collected. It was determined that Wesley Creek and the Kogoluktuk River hydrology data collection efforts would continue. The other stations were discontinued in September 2011. 2.3.9 Cosmos Hills Hydroelectric Project; Field Reconnaissance Report This December 4, 2012 report, prepared by WHPacific, summarized the field reconnaissance activities that took place between September 26 and September 29, 2012 at the Wesley Creek and Kogoluktuk River sites. Representatives from WHPacific and Hatch visited the sites to look specifically at constructability issues and potential locations and/or routes for access roads, intakes, penstocks, and powerhouses. Office activities included mapping potential intake, powerhouse, penstock, and access road locations for each site and updating the energy and benefit analyses. This field reconnaissance trip and report determined the following: • The Wesley Creek site would be the easiest and least expensive to construct. It would have an estimated power output capacity of approximately 350 kW. This site should continue to be evaluated. • The Dahl Creek site should be reconsidered as a possible addition to a Wesley Creek project. Dahl Creek would be a similar project as Wesley Creek and is close to existing infrastructure. If constructed together as one project, the two projects may be economical. • The Lower Kogoluktuk River site was found to be superior to the Upper Kogoluktuk site. It would have an estimated power output capacity of approximately 890 kW. While this project is constructible, it is further away from existing infrastructure and would require a considerably longer access road. The penstock route, between the intake and powerhouse, will also be difficult to construct and more expensive than the Wesley Creek site. However, the Lower Kogoluktuk River site will provide considerably higher power output capacity and will produce power for a longer part of the year than the Wesley Creek site. • The Upper Kogoluktuk River site, which consisted of two different development systems, should be removed from further consideration. The run of river system was deemed not feasible due to low available head, high construction costs, and poor geology. The system involving a large dam, with a preliminary capacity of 10 MW, is too costly for present power needs. The Cosmos Hills Hydroelectric Project; Field Reconnaissance Report recommended that the Wesley Creek, Dahl Creek, and Kogoluktuk River sites be investigated further. Additional LIDAR data should be processed to include the Lower Kogoluktuk River site. Conceptual-level project designs should be developed, including access road, penstock, and transmission line routes, and intake and powerhouse structures. Based on the conceptual Section 2 Project Background Feasibility Study and Conceptual Design Report Page 12 Cosmos Hills Hydro Feasibility designs and construction cost estimates, an updated feasibility analysis should be performed, and a report prepared that recommends a project, if it is found that a feasible project exists. Section 3 Cosmos Hills Area Background Information Feasibility Study and Conceptual Design Report Page 13 Cosmos Hills Hydro Feasibility 3. COSMOS HILLS AREA BACKGROUND INFORMATION 3.1 Location and Access The project areas are located in the Cosmos Hills, near the villages of Kobuk, Shungnak, and Ambler in the Upper Kobuk River Valley. The Cosmos Hills are an isolated highland at the southern edge of the Brooks Range and are bounded on the south by the Kobuk River, on the west by the Shungnak River, on the north by the Ambler Lowlands, and on the east by the Kogoluktuk River. Kobuk is the closest village to the project sites. Kobuk is approximately 7 miles east- northeast of Shungnak, 30 miles east-southeast of Ambler, 150 miles east of Kotzebue, 300 miles west-northwest of Fairbanks, and 460 miles north-northwest of Anchorage. The Cosmos Hills, as well as the three villages, are located within the Northwest Arctic Borough and are in the Kotzebue Recording District. The Public Land Survey System (PLSS) designations and geographical coordinates for the three communities and the project sites are presented in Table 3-1. Figure 1: Project Area Vicinity Map Section 3 Cosmos Hills Area Background Information Feasibility Study and Conceptual Design Report Page 14 Cosmos Hills Hydro Feasibility Table 3-1: Location Data Public Land Survey System (PLSS) Info Geographical Coordinates Location Section Township Range Meridian Latitude Longitude Kobuk 3 17N 9E Kateel River 66°55’ N 156°53’ W Shungnak 9 17N 8E Kateel River 66°53’ N 157°08’ W Ambler 31 20N 5E Kateel River 67°05’ N 157°51’ W Wesley Creek (at Intake) 6 18N 9E Kateel River 66°59’07” N 156°58’43” W Wesley Creek (at Powerhouse) 18 18N 9E Kateel River 66°57’55” N 156°59’15” W Dahl Creek (at Intake) 10 18N 9E Kateel River 66°58’20” N 156°52’00” W Dahl Creek (at Powerhouse) 21 18N 9E Kateel River 66°57’06” N 156°54’02” W Kogoluktuk River (at Intake) 8 18N 10E Kateel River 66°58’20” N 156°43’19” W Kogoluktuk River (at Powerhouse) 17 18N 10E Kateel River 66°57’52” N 156°43’48” W Residents in the area use various modes of transportation, depending on the season. Air transport is the primary means of travel in and out of the area, as well as for shipment of supplies. Barge services deliver goods to Ambler, but service to Shungnak and Kobuk is sporadic due to the shallow areas near these villages. Trails and the Kobuk River connect the villages of Kobuk, Shungnak, and Ambler; there are no roads between these villages. Depending on the season, snowmachines, all-terrain vehicles (ATVs), or skiffs are the primary forms of personal transportation within and around the villages, including into the Cosmos Hills. There are also a limited number of full-size private vehicles. Portions of the project areas are accessible by dirt roads from Kobuk. The upper portion of Wesley Creek is accessible by a road that accesses Bornite Mine. The lower portion of Dahl Creek is accessible by the road to Dahl Creek Airport. The lower portion of Wesley Creek, the upper portion of Dahl Creek, and the Kogoluktuk River are not accessible by road. The Kogoluktuk River is navigable by boat up to the lower falls. 3.2 Population and Economy The population of the area resides primarily in the three villages of Kobuk, Shungnak, and Ambler. There are seasonal workers in the area associated with the mining industry. At the time of the 2010 U.S. Census the population of Kobuk, Shungnak, and Ambler was between 85% and 95% Alaska Native. The U.S. Census data and the corresponding rates of growth or decline are shown in Table 3-2. Section 3 Cosmos Hills Area Background Information Feasibility Study and Conceptual Design Report Page 15 Cosmos Hills Hydro Feasibility Table 3-2: U.S. Census Data and Growth Rates for Kobuk, Shungnak, and Ambler Community Census Year Population 10-Year Rate of Increase or Decrease 20-Year Rate of Increase or Decrease Kobuk 2010 151 + 3.3% + 4.0% 2000 109 + 4.7% 1990 69 Shungnak 2010 262 + 0.2% + 0.8% 2000 256 + 1.4% 1990 223 Ambler 2010 258 - 1.8% - 0.9% 2000 309 - 0.06% 1990 311 Area -Wide 2010 671 - 0.04% + 0.5% 2000 674 + 1.1% 1990 603 At the time of the 2010 Census, the median household incomes of Kobuk, Shungnak, and Ambler were reported to be $31,300, $47,700, and $57,600, respectively. Most of the residents in all three communities supplement their income with subsistence activities. 3.3 Culture and History The existing community of Kobuk was founded in 1899 as a supply point for mining activities in the Cosmos Hills to the north. A trading post, school, and Friends mission drew area residents to the settlement. Because of river erosion and flooding, the village was relocated in the 1920s to a new site 10 miles downstream, at the present site of Shungnak. A few people remained in Kobuk. Ambler was permanently settled in 1958 when people from Shungnak and Kobuk moved downstream because of the variety of fish, wild game, and spruce trees in the area. All three villages are Iñupiat Eskimo communities that rely heavily on subsistence hunting, fishing, and gathering. Residents hunt caribou, moose, black and grizzly bear, Dall sheep, geese, ducks, ptarmigan, and small game. Furbearers taken include wolf, fox, lynx, and beaver. Fishing yields salmon, sheefish, graying, whitefish, pike, and trout. Berries are harvested in the fall. Birch bark is gathered for making baskets. 3.4 Local Governments The Native Villages of Kobuk, Shungnak, and Ambler are all federally recognized tribes, governed by Tribal Councils. The Tribal Councils are both traditional councils and federally recognized governments by virtue of their Indian Reorganization Act (IRA) Constitutions. Section 3 Cosmos Hills Area Background Information Feasibility Study and Conceptual Design Report Page 16 Cosmos Hills Hydro Feasibility Native residents are also represented by their regional corporation, NANA Regional Corporation (NANA). All three communities also have City governments. Kobuk, Shungnak, and Ambler were incorporated as second class cities within the Northwest Arctic Borough in 1973, 1967, and 1971, respectively. Contact information for the local governments is listed below. Native Village of Kobuk P.O. Box 51039 Kobuk, AK 99751 Phone: (907) 948-2203 e-mail: tribeadmin@laugvik.org President: Rosa Horner Native Village of Shungnak P.O. Box 64 Shungnak, AK 99773 Phone: (907) 437-2163 e-mail: roy_sun1@hotmail.com President: Glenn Douglas Native Village of Ambler P.O. Box 47 Ambler, AK 99786 Phone: (907) 445-2238 e-mail: First Chief: NANA Regional Corporation P.O. Box 49 Kotzebue, AK 99752 Phone: (907) 442-3301 President/CEO: Marie Greene City of Kobuk P.O. Box 51020 Kobuk, AK 99751 Phone: (907) 948-2217 e-mail: kobukcity@yahoo.com Mayor: Alex Sheldon City of Shungnak P.O. Box 59 Shungnak, AK 99773 Phone: (907) 437-2161 e-mail: Beverelygriest25@hotmail.com Mayor: Melvin Lee City of Ambler P.O. Box 9 Ambler, AK 99786 Phone: (907) 445-2122 e-mail: cityofambler@yahoo.com Mayor: Wilbur Esenituk Northwest Arctic Borough P.O. Box 1110 Kotzebue, AK 99752 Phone: (907) 442-2500 Mayor: Reggie Joule 3.5 Recreation and Subsistence Recreation and subsistence both involve travel in the region. The bulk of activity is subsistence and sport hunting and fishing. Travel is primarily by boat during the summer and by snow machine in the winter along waterways. Locals in Kobuk reported that the Kogoluktuk River is impassable year round by either snow machine or boat at the lower falls location. There are a very small number of recreational whitewater rafters that go through the Upper Kogoluktuk Falls down to the Kobuk River. Section 3 Cosmos Hills Area Background Information Feasibility Study and Conceptual Design Report Page 17 Cosmos Hills Hydro Feasibility 3.6 Infrastructure 3.6.1 Housing The 2010 U.S. Census reported 51 houses in Kobuk (15 of which were vacant), 73 houses in Shungnak (11 of which were vacant), and 99 houses in Ambler (24 of which were vacant). The Northwest Inupiat Housing Authority (NIHA) is the native housing authority. 3.6.2 Utilities Electric service is provided by AVEC. Kobuk and Shungnak are connected with an intertie run by the Kobuk Valley Electric Company. Most homes are connected to the community’s electrical distribution system. Fuel oil is the primary heat source. The City governments own and operate the water treatment and distribution facilities. Kobuk and Ambler obtain their water from community wells; Shungnak obtains water from a surface water source. Distribution piping varies between villages. Some residents haul their water from a central watering point. The City governments also own and operate the piped sewage collection and treatment facilities. However, many residents have on-site septic systems or use a “honey bucket” haul system. 3.6.3 Other Services Each village has its own school, which include grades K through 12. All are administered by the Northwest Arctic Borough School District (NWABSD). In fall 2012, the schools in Kobuk, Shungnak, and Ambler had 45, 83, and 69 students, respectively. Local health care is provided at clinics located in each village. The clinics are operated by Maniilaq Association out of Kotzebue. Auxiliary health care is obtained in Kotzebue, Fairbanks, or Anchorage. Other structures in the communities include various government, commercial, and public facilities. 3.6.4 Roads There are no roads connecting the villages of Kobuk, Shungnak, and Ambler. Each village has a local road network within the village that extends to the airports and landfills. Kobuk is connected to a small road network that was constructed by the mining industry to access the Cosmos Hills. An approximately 13-mile dirt/gravel road connects Kobuk with the Bornite Mine. Dahl Creek Airport is accessed from the Mine Road. A two-mile road branches off the Mine Road, approximately one mile west of the Dahl Creek Airport, and connects with the Kobuk River. The local roads and trails in the area are generally narrow and unsurfaced. Only a few of the local roads have been designed to standards and have been surfaced with gravel. There are Section 3 Cosmos Hills Area Background Information Feasibility Study and Conceptual Design Report Page 18 Cosmos Hills Hydro Feasibility many trails throughout the communities and surrounding areas that are simple earth trails without any type of surfacing material. Most of these roads and trails do not have dedicated rights-of-way. Only minimal maintenance occurs on the existing roads and trails. 3.6.5 Airports The State of Alaska owns and maintains the airports in Kobuk, Shungnak, and Ambler. There is also an airport located at Dahl Creek. The Kobuk Airport runway is 4,020 feet long and 75 feet wide, oriented in an east-west direction, and surfaced with gravel. The runway is lit with medium intensity runway lights (MIRL) and can accommodate DC-6 aircraft. The airport is unattended and fuel is not available. The Shungnak Airport runway is 4,000 feet long and 60 feet wide, oriented in an east-west direction, and surfaced with gravel. The runway is lit with MIRL and can accommodate DC- 6 aircraft. The airport is unattended and fuel is not available. The Ambler Airport has two runways. The primary runway is 3,000 feet long and 60 feet wide, oriented in a north-south direction, and surfaced with gravel. The cross-wind runway is 2,400 feet long and 60 feet wide, oriented in an east-west direction, and surfaced with gravel. The runways are lit with MIRL. The airport is unattended and fuel is not available. The Dahl Creek Airport runway is 4,780 feet long and 75 feet wide, oriented in an ESE- WNW direction, and surfaced with gravel. The runway is marked, but not lit, and can accommodate Hercules C-130 cargo planes. The airport is unattended and fuel is not available. 3.6.6 Barge Landings / Boat Landings / Ramps / Docks Regular barge services are only available as far upriver as Ambler. Shungnak and Kobuk delivery is hindered by the shallow depth of the Kobuk River at these village sites. These conditions appear to be worsening, with reliable barge service to Ambler becoming questionable. Each village has small boat landings located along the river. There are no docks, so boats are stored directly on the beach. 3.7 Land Ownership and Right-of-Way Under Section 12(a) of the Alaska Native Claims Settlement Act (ANCSA), the local village corporations were each allowed to select the surface rights to land from the federal government. The regional corporation, NANA, owns and controls the surface and subsurface rights to these lands. Certain lands were conveyed to the Cities through ANCSA 14(c)(3) actions. Plats 92-6 (Kobuk), 94-5 (Shungnak), recorded in the Kotzebue Recording District, show these lands. ANCSA 14(c)(3) land transfers have not occurred in Ambler. Section 3 Cosmos Hills Area Background Information Feasibility Study and Conceptual Design Report Page 19 Cosmos Hills Hydro Feasibility NANA owns much of the land surrounding the villages. Native allotments are also located throughout the area. The State of Alaska owns the Dahl Creek Airport. Various plats and surveys provide for some rights-of-way (ROW) in the area; however, most of the existing roads and trails in the Cosmos Hills area do not have ROW. 3.8 Topography and Soils The topography of the Cosmos Hills is moderately rugged and mature, with approximately 3,000 feet of relief. The southern drainages of the Cosmos Hills, including Cosmos Creek, Wesley Creek, and Dahl Creek, typically flow to the southwest, away from the range. The upper portion of the Cosmos Hills contains rock from a schist belt, but also dolostone, metalimestone, and marble. The lower hills on the south side of the Cosmos Hills are characterized by a sedimentary series of conglomerate, sandstone, and shale. Glacial deposits are present between elevation 400 and 800 feet along portions of the southern flanks of the Cosmos Hills. The glacial drift has been mapped in areas between the flood plains of the Cosmos, Wesley, and Dahl Creeks. Erratic boulders are present up to elevation 2,200 feet. Subdued moraine deposits are found in the Shungnak and Kogoluktuk River valleys. Surficial geologic mapping of the Cosmos Hills shows bedrock covered with shallow surficial deposit characteristics along most of the highland above about 600 to 800 feet elevation. Aeolian and alluvial deposits, primarily sand are located between the floodplains of Cosmos, Wesley, and Dahl Creeks between elevations of about 400 and 600 feet. Glacial drift deposits exist between elevations of about 200 and 400 feet. Alluvial floodplain deposits of the Kobuk River lie to the south of the Cosmos Hills, along with terrace and fan deposits abutting the higher drift deposits. The Kobuk River region, in the vicinity of the Cosmos Hills, is mapped as having discontinuous permafrost. Discontinuous permafrost is identified as 50 to 90 percent potential coverage, so it can be expected that some permafrost will be present within the project areas. 3.9 Gravel Sources There are no commercial gravel pits in the area. However, two previously developed material sites exist near the Dahl Creek airport. The material sites are located within alluvial fans of the Cosmos Hills, downstream of the Dahl Creek site. The existing cut slopes at the material sites show alluvial deposits of sand and gravel with cobbles and random boulders. Maintenance pits along the Bornite Mine Road reveal material that varies in quality, ranging from dune sand to sandy gravel to bedrock. It is likely that additional material sites can be located within the project area, if the existing pits do not contain enough material for a proposed project. Section 3 Cosmos Hills Area Background Information Feasibility Study and Conceptual Design Report Page 20 Cosmos Hills Hydro Feasibility 3.10 Climate The Cosmos Hills lie within Alaska’s Continental Climatic Zone. The Continental Climatic Zone is characterized by having long, cold winters and warm summers. Generally, the Continental Climatic Zone has great temperature variations, low cloudiness, low precipitation, and low humidity. The climatic data summarized in the table below was obtained from the Environmental Atlas of Alaska and from the Western Regional Climate Center (WRCC). Table 3-3: Cosmos Hills Area Climate Data Mean Annual Temperature ............................................................................ 22.5 °F January Mean Temperature ............................................................................. -10 °F July Mean Temperature .................................................................................... 60 °F Extreme Low Temperature .............................................................................. -74 °F Extreme High Temperature .............................................................................. 93 °F Mean Annual Precipitation ..................................................................... 17.5 inches Mean Annual Snowfall ...............................................................................65 inches Thawing Index .................................................................................. 2,000 °F – days Design Thawing Index ...................................................................... 2,600 °F – days Freezing Index .................................................................................. 6,200 °F – days Design Freezing Index ...................................................................... 7,400 °F – days Heating Degree Days (65 °F base) ................................................. 15,178 °F – days Prevailing Winds ............................................................................... East-Southeast 3.11 Natural Hazards According to the U.S. Army Corps of Engineers’ (USACE) Flood Plain Management Services, flooding occurs in Kobuk most years. The floods are usually caused by ice jams on the Kobuk River. The project areas are well above the normal flood levels of the Kobuk River, but local flooding within the creeks and rivers within the project area can be expected. The Kobuk Fault System zone extends along the southern border of the Brooks Range for approximately 300 miles, and is approximately 20 miles wide. In general, the fault system has been relatively inactive in the recent historical period. A rare series of shallow earthquakes was recorded about 40 miles to the east in October 1980, with magnitudes ranging between 4.0 and 5.0. A magnitude 7.3 earthquake was recorded in 1958, with an epicenter near Huslia, approximately 85 miles to the south. Section 4 Cosmos Hills Hydrology Feasibility Study and Conceptual Design Report Page 21 Cosmos Hills Hydro Feasibility 4. COSMOS HILLS HYDROLOGY 4.1 Hydrology Overview The USGS has maintained two stream discharge stations in proximity to the project area. One is located on Dahl Creek and the other on the Kobuk River. Additional stream discharge measurements and data collection have also been done on Cosmos Creek, Wesley Creek, Dahl Creek, and the Kogoluktuk River by Geo-Watersheds Scientific (GWS) as part of this project. The stream hydrology in the Cosmos Hills region is strongly related to the temperature regime in the winter. During the summer, the stream hydrology is mostly related to the snow accumulation during the previous winter and precipitation. 4.2 USGS Stream Discharge Data The USGS has maintained and collected stream flow data on Dahl Creek from 1986 to the present day and on the Kobuk River from 1976 to the present day. An investigation of the flow measurements and the derivation and application of rating curves by the USGS was not performed as part of this project. The tables and charts below summarize the data from these two stations. Table 4-1: Monthly Flows – Dahl Creek (USGS 15743850 DAHL C NR KOBUK AK, 11 sq mi Drainage Area *) Month Average Monthly Flow (cfs) Median Monthly Flow (cfs) 5% Recurrence Minimum Daily Flow (cfs) Daily Maximum Flow (cfs) 1 4.3 4.4 2.0 7.6 2 3.7 3.5 1.7 6.4 3 3.4 3.0 1.4 5.8 4 5.3 3.4 1.5 400.0 5 58.9 39.5 3.4 678.0 6 55.4 45.0 12.0 250.0 7 33.5 29.0 8.8 140.0 8 60.1 40.0 12.0 1,400.0 9 46.1 35.0 13.0 318.0 10 27.3 23.0 9.0 103.0 11 10.3 9.2 4.0 28.0 12 6.2 5.7 3.0 14.0 Average 26.2 20.1 * Dahl Creek monthly flows from 7,495 daily records, 7/17/1986 to 7/24/2013 (9,869 days) cfs = cubic feet per second Section 4 Cosmos Hills Hydrology Feasibility Study and Conceptual Design Report Page 22 Cosmos Hills Hydro Feasibility Exhibit 4-1: Daily Flow Chart for USGS 15743850 DAHL C NR KOBUK AK Table 4-2: Monthly Flows – Kobuk River (USGS 15744500 KOBUK R NR KIANA AK, 9520 sq mi Drainage Area *) Month Average Monthly Flow (cfs) Median Monthly Flow (cfs) 5% Recurrence Minimum Daily Flow (cfs) Daily Maximum Flow (cfs) 1 2,507 2,500 1,500 4,900 2 2,047 1,900 1,200 3,200 3 1,806 1,800 1,100 2,700 4 1,766 1,700 1,000 7,300 5 27,765 7,000 1,300 160,000 6 44,715 37,950 14,195 155,000 7 20,800 17,200 9,092 71,900 8 29,780 23,600 7,896 129,000 9 27,585 20,900 8,629 138,000 10 13,145 11,000 4,400 48,700 11 5,391 5,000 2,700 16,000 12 3,404 3,400 2,100 7,600 Average 15,059 11,163 * Kobuk River monthly flows from 11,718 daily records, 9/1/1976 to 9/30/2012 (13,178 days) 0 10 20 30 40 50 60 70 80 90 100 1/1 1/31 3/2 4/1 5/1 5/31 6/30 7/30 8/29 9/28 10/28 11/27 12/27Discharge, cfsDay of Year Daily Flow, cfs Average Daily Flow, cfs Median Daily Flow, cfs 5% Recurrence Minimum Daily Flow, cfs Section 4 Cosmos Hills Hydrology Feasibility Study and Conceptual Design Report Page 23 Cosmos Hills Hydro Feasibility Exhibit 4-2: Daily Flow Chart for USGS 157444500 KOBUK R NR KIANA AK 4.3 GWS Stream Discharge Data Data collected by GWS (shown as LILLY in exhibits) covers a short period of time from 2010 to 2011. Their report was issued in May 2012 and includes elevation surveys, flow measurements, rating curve development, and links to raw and processed data. The effort by GWS did not include an opportunity to gather significant numbers of low flow measurements for rating curve development. Rating curves were extrapolated using elevation surveys, stream character and qualitative judgment, and best fit extrapolation of higher flow measurements. The resulting data from the GWS hydrologic investigation is approximately a complete year of daily average discharge data, based on hourly intervals, for Cosmos Creek, Wesley Creek, Dahl Creek, and the Kogoluktuk River. The measurements were taken at locations very near the intake sites for the proposed hydro projects without correcting for the minor differences in drainage area due to the slightly different locations. Other than the charts shown, the data from the report is not reproduced here. The following data files, obtained from the GWS investigation, were used for this analysis. • Upper_Wesley_Creek_Corrected_Stage_Mean_Daily_Flow.xlsx • Upper_Cosmos_Creek_Corrected_Stage_Mean_Daily_Flow.xlsx • Upper_Kogoluktuk_River_Corrected_Stage_Mean_Daily_Flow.xlsx • Upper_Dahl_Creek_Corrected_Stage_Mean_Daily_Flow.xlsx 0 10000 20000 30000 40000 50000 60000 1/1 1/31 3/2 4/1 5/1 5/31 6/30 7/30 8/29 9/28 10/28 11/27 12/27Discharge, cfsDay of Year Daily Flow, cfs Average Daily Flow, cfs Median Daily Flow, cfs 5% Recurrence Minimum Daily Flow, cfs Section 4 Cosmos Hills Hydrology Feasibility Study and Conceptual Design Report Page 24 Cosmos Hills Hydro Feasibility 4.4 Data Analysis Review of the hydrology data and comparison of the two sources indicates the following: • The 2010 water year was generally low. The USGS data shows that the 2010 water year was the 3rd lowest for Dahl Creek (out of the 16 years with 365 days of record), while the Kobuk River ranked 11th out of 32 years. The annual average flow in Dahl Creek in 2010 was 18.8 cfs versus the average for the sixteen years of 24.5 cfs. The Kobuk River 2010 average annual flow was 12,900 cfs versus 15,100 cfs for the 32- year average. • Low flow data at the USGS Dahl Creek site shows a quicker drop in early winter than the GWS data. • Direct comparison of the USGS and GWS data on Dahl Creek, after scaling for relative basin areas, shows the USGS data is consistently lower (see chart below). • The GWS Cosmos Creek data closely matches the USGS Dahl Creek data through most of the year. • The GWS Kogoluktuk River data closely matches the USGS Kobuk River data from June through September. • The Kogoluktuk River and Kobuk River exhibit less total annual discharge than the small, mountainous basins. This is probably due to the smaller basins being entirely mountainous with more annual precipitation. Exhibit 4-3: Chart Comparing the USGS and G-W Scientific (Lilly) Dahl Creek Discharge Data 0 5 10 15 20 25 30 35 40 45 50 Oct-10Oct-10Nov-10Dec-10Jan-11Feb-11Mar-11Apr-11May-11Jun-11Jul-11Aug-11Sep-11Dahl Creek Discharge at Proposed Hydro Intake, cfsDay of Year LILLY Dahl USGS Dahl scaled to LILLY Dahl Section 4 Cosmos Hills Hydrology Feasibility Study and Conceptual Design Report Page 25 Cosmos Hills Hydro Feasibility The comparisons made with all the data sets from USGS and GWS in 2010 were done using discharge measurements scaled down to a unit value. Each discharge record is divided by the drainage area to produce flows in units of cfs per square mile. The resulting comparison is shown in the chart below. Exhibit 4-4: Chart of Cosmos Hills Region Unit Discharge Data, 2010 Water Year 4.5 Recommended Stream Discharge Data for Developmental Analysis Given the impracticality of investing many years of effort into flow measurements and rating curve development for small, remote projects, it is standard practice in Alaska to apply discharge data from a USGS station with a long history to the basin proposed for hydro electric development. This is required so that long-term trends can be identified and an unusual water year is not relied upon for the long-term economic evaluation. This approach requires some verification that there exists a quantifiable correlation between the basin of interest and the basin with a long discharge history. Such a correlation becomes particularly important when evaluating projects with marginal economics due to water availability or projects with potential fishery impacts. The concentrated effort conducted by GWS covering all the basins of interest for hydroelectric development was performed and subsequently established the necessary correlations and verifications to apply the long term USGS data for analysis. It is noted that GWS states the USGS estimates winter flows and that the winter measurements on the Kogoluktuk are more accurate. 0 1 10 Oct-10Nov-10Dec-10Jan-11Feb-11Mar-11Apr-11May-11Jun-11Jul-11Aug-11Sep-11Unit Discharge, log scale, cfs per sq miDay of Year USGS Dahl USGS Kobuk LILLY Cosmos LILLY Wesley LILLY Dahl LILLY Kogoluktuk Section 4 Cosmos Hills Hydrology Feasibility Study and Conceptual Design Report Page 26 Cosmos Hills Hydro Feasibility The modeling for this study will rely on USGS Dahl Creek data for the hydro sites at Wesley Creek and Dahl Creek and USGS Kobuk River data for the hydro site at the Kogoluktuk River. Application will be based on scaling of basin areas. In comparing the winter flows on the Kogoluktuk by GWS with those of the USGS on the Kobuk the differences appear minor with the adoption of the USGS Kobuk regime being more conservative. Adjustment of the scaled USGS Kobuk River winter data does not appear warranted at this time. Table 4-3, Table 4-4, and Table 4-5 show the resulting monthly discharge data for the modeling of flows at the project intake sites. Table 4-3: Monthly Flows – Wesley Intake Site, 5.2 sq mi Drainage Area (Based on scaling of USGS Dahl Creek Discharge Record) Month Average Monthly Flow (cfs) Median Monthly Flow (cfs) 5% Recurrence Minimum Daily Flow (cfs) Daily Maximum Flow (cfs) 1 2.1 2.1 0.9 3.6 2 1.7 1.7 0.8 3.0 3 1.6 1.4 0.7 2.7 4 2.5 1.6 0.7 189.1 5 27.9 18.7 1.6 320.5 6 26.2 21.3 5.7 118.2 7 15.8 13.7 4.1 66.2 8 28.4 18.9 5.7 661.8 9 21.8 16.5 6.1 150.3 10 12.9 10.9 4.3 48.7 11 4.9 4.3 1.9 13.2 12 2.9 2.7 1.4 6.6 Average 12.4 9.5 Section 4 Cosmos Hills Hydrology Feasibility Study and Conceptual Design Report Page 27 Cosmos Hills Hydro Feasibility Table 4-4: Monthly Flows – Dahl Intake Site, 8.5 sq mi Drainage Area (Based on scaling of USGS Dahl Creek Discharge Record) Month Average Monthly Flow (cfs) Median Monthly Flow (cfs) 5% Recurrence Minimum Daily Flow (cfs) Daily Maximum Flow (cfs) 1 3.4 3.4 1.5 5.9 2 2.9 2.7 1.3 4.9 3 2.6 2.3 1.1 4.5 4 4.1 2.6 1.2 309.1 5 45.5 30.5 2.6 523.9 6 42.8 34.8 9.3 193.2 7 25.9 22.4 6.8 108.2 8 46.5 30.9 9.3 1,081.8 9 35.7 27.0 10.0 245.7 10 21.1 17.8 7.0 79.6 11 8.0 7.1 3.1 21.6 12 4.8 4.4 2.3 10.8 Average 20.3 15.5 Table 4-5: Kogoluktuk Intake Site, 424 sq mi Drainage Area (Based on scaling of USGS Kobuk River Discharge Record) Month Average Monthly Flow (cfs) Median Monthly Flow (cfs) 5% Recurrence Minimum Daily Flow (cfs) Daily Maximum Flow (cfs) 1 112 111 67 218 2 91 85 53 143 3 80 80 49 120 4 79 76 45 325 5 1,237 312 58 7,126 6 1,992 1,690 632 6,903 7 926 766 405 3,202 8 1,326 1,051 352 5,745 9 1,229 931 384 6,146 10 585 490 196 2,169 11 240 223 120 713 12 152 151 94 338 Average 671 497 Section 6 Alternative Project Descriptions Feasibility Study and Conceptual Design Report Page 28 Cosmos Hills Hydro Feasibility 5. EXISTING DIESEL GENERATION AND TRANSMISSION SYSTEM 5.1 Basic Configuration 5.1.1 Kobuk The electric energy in Kobuk is produced at the diesel generation plant in Shungnak and delivered through the existing Shungnak-Kobuk intertie. The intertie is approximately 7 miles in length and has been in existence for about 30 years (AVEC Kobuk). It is assumed for this study that this existing intertie has the capacity to supply the entire electric energy needs of Shungnak and Ambler when supplied by any of the hydro projects located near Kobuk. Occasionally, the intertie experiences outages. In 2010 data provided by AVEC, an outage that occurred from 5:30 pm on December 19, 2010 until 7:45 pm on December 25, 2010 was evident by an average reduction in Shungnak generation of 72.5 kW, based on the projected load had the outage not occurred. The economic modeling in this study, which uses this 2010 data as a basis, utilized the projected load so that the impact of the outage did not have an annually recurring impact. The economic model used does not include intertie outages. During an outage, Kobuk must self-generate electricity with their existing diesel plant. This plant is reported to have a capacity of 75 kW (NWAB Kobuk Comp Plan). AEA’s Power Cost Equalization Program (PCE) report for FY 2012 indicates that Kobuk purchased 529 MWh of energy and sold 504 MWh of energy. This data indicates that the average demand in Kobuk is 57.5 kW and that the intertie has an average line loss of 4.6%. 5.1.2 Shungnak Based on review of filings with the Regulatory Commission of Alaska (RCA), the diesel electric generation plant in Shungnak, that also provides power to Kobuk, consists of the following units: Table 5-1: Shungnak power generation units Engine Size (kW) John Deere 6619 202 CAT 3406 297 Detroit Diesel S60 314 Cummins KTA1150 397 The diesel generation efficiency for Shungnak in 2012 was 13.63 kWh/gal. For modeling, a fixed efficiency is used for all loads, along with a minimum loading of 40.4 kW. Additionally, a diesel is expected to run if the peak demand is within 15 kW of the hydro output. Section 6 Alternative Project Descriptions Feasibility Study and Conceptual Design Report Page 29 Cosmos Hills Hydro Feasibility 5.1.3 Ambler Based on review of filings with the RCA, the diesel electric generation plant in Ambler consists of the following units: Table 5-2: Ambler Power Generation Units Engine Size (kW) Cummins KTA1150 271 Detroit Diesel S60 314 Cummins KTA1150 397 The diesel generation efficiency for Ambler in 2012 was 13.99 kWh/gal. For modeling, a fixed efficiency is used for all loads, along with a minimum loading of 40.4 kW. Additionally, a diesel is expected to run if the peak demand is within 15 kW of the hydro output. 5.1.4 Proposed Ambler Intertie A proposed intertie connecting Shungnak-Kobuk with Ambler is included in the modeling of the future electric system. The following table summarizes the intertie parameters. Table 5-3: Proposed Ambler Intertie Length 25.3 miles Unit Cost $450,000 per mile Construction Cost $11,385,000 O&M Cost $22,770 per year Design/Permitting Funding Start 7/1/2015 Online Date 7/1/2018 The intertie is expected to be constructed in the near future for several reasons: • AVEC estimates the non-fuel production related savings from an intertie (taking a diesel power plant offline) is $167,000 per year. Non-fuel production related savings include the costs of oil, overhauls, and similar maintenance incurred when the plant is operational. • The intertie saves approximately $18 million by avoiding the capital expense of construction of an additional diesel power plant and fuel storage facility in Shungnak (AVEC Project Manager communication). Both the Ambler and Shungnak power plants and associated fuel storage facilities are at the end of their useful life and require replacement. The existing facilities in Shungnak would serve for the purpose of emergency backup in the event the intertie goes down (similar to the Kobuk power plant). • Fuel delivery by barge to Ambler is more reliable than Shungnak. An intertie would lower the cost of fuel for Shungnak-Kobuk generated power and improve energy security for Shungnak-Kobuk. Section 6 Alternative Project Descriptions Feasibility Study and Conceptual Design Report Page 30 Cosmos Hills Hydro Feasibility • Finally, the projects are sized assuming the load of the three villages combined. The savings of the proposed intertie exceeds the total cost of construction and maintenance. The intertie has a positive net present value (benefit/cost >1) even if the hydro projects are not constructed. The intertie should be constructed whether or not the hydro projects are built. The economic analysis presented later in this report assumes that the intertie is constructed. The intertie construction cost is a necessary part of the hydro projects. However, the economic analysis does not include the costs and benefits of the intertie. Including the intertie’s benefit and cost would significantly increase the benefit/cost ratio for all of the hydro projects. However, to keep the decision for the hydro projects separate from that for the intertie, the intertie benefits/costs are not included in the economic analysis. Specifically, capital costs for intertie construction and avoided power plant benefits are not included in the economic analysis for the hydro projects, (presented in Section 7.3.2). This allows reviewers to evaluate the individual benefits and costs of the hydro projects. 5.2 Existing Energy Generation The combined annual generation for Shungnak-Kobuk and Ambler for the past five years is shown in Table 5-4 (AIDEA PCE). Table 5-4: PCE Electric Demand Shungnak PCE Ambler PCE Combined PCE FY Year Energy Generated, kWh Avg Power, kW Energy Generated, kWh Avg Power, kW Energy Generated, kWh Avg. Power, kW 2008 1,483,862 169 1,321,573 151 2,805,435 320 2009 1,477,747 169 1,245,599 142 2,723,346 311 2010 1,578,459 180 1,249,161 143 2,827,620 323 2011 1,546,541 177 1,314,441 150 2,860,982 327 2012 1,588,139 181 1,343,144 153 2,931,283 335 Escalation Rate 1.8% 0.9% 1.4% The electrical demand in both communities has risen over the past several years. The economic modeling assumes this trend will continue at a slightly conservative rate of 1% for both communities. The projected generation for the next 50 years is shown in Table 5-5 and Exhibit 5-1. Section 6 Alternative Project Descriptions Feasibility Study and Conceptual Design Report Page 31 Cosmos Hills Hydro Feasibility Table 5-5: Projected Energy Demand Shungnak-Kobuk, kWh Ambler, kWh Combined, kWh FY 2013 (year 0) 1,606,819 1,329,832 2,936,651 FY 2038 (year 25) 2,060,636 1,705,419 3,766,056 FY 2063 (year 50) 2,642,626 2,187,084 4,829,710 Exhibit 5-1: Projected Electric Generation for Ambler and Shungnak AVEC collects 15-minute interval energy demand (kWh) data from their power plants. This data was reduced to a daily average power demand with a peak for each day for modeling purposes. From this daily data a contiguous year, beginning on September 1, 2010, was selected for subsequent modeling. The selected date range coincides with the water year data collected by GWS. The selected daily data for economic modeling is shown in Exhibit 5-2. 1,000,000 1,100,000 1,200,000 1,300,000 1,400,000 1,500,000 1,600,000 1,700,000 1,800,000 1,900,000 2,000,000 2008 2013 2018 2023 2028 2033Annual PCE Reported Diesel Electric Generation (kWh)Fiscal Year Shungnak PCE Generated Energy Ambler PCE Generated Energy Shungnak Projected Load Ambler Projected Load Section 6 Alternative Project Descriptions Feasibility Study and Conceptual Design Report Page 32 Cosmos Hills Hydro Feasibility Exhibit 5-2: Daily Power Demand 5.3 Existing Energy Market 5.3.1 Fuel Costs AVEC provided fuel purchase data for both Ambler and Shungnak-Kobuk. This data includes the delivered location, delivery type, date, quantity (gal), and unit cost ($/gal) of diesel fuel for electric generation from 2004 through 2012 and is summarized in the following tables. 100 150 200 250 300 350 400 450 500 550 600 9/1 10/1 11/1 12/1 1/1 1/31 3/3 4/2 5/3 6/2 7/3 8/2Power Demand (kW)Day of Year Shungnak Average Ambler Average Combined Average Combined Peak Section 6 Alternative Project Descriptions Feasibility Study and Conceptual Design Report Page 33 Cosmos Hills Hydro Feasibility Table 5-6: AVEC Diesel Fuel Deliveries to Ambler, 2004 to 2012 Delivered Volume Unit Rate Year Air (gal) Barge (gal) % by Air Air ($/gal) Barge ($/gal) Differential ($/gal) 2004 0 13,000 0% 2.43 2005 0 86,234 0% 2.57 2006 11,880 45,000 21% 4.62 2.50 2.13 2007 112,180 0 100% 5.67 2008 33,886 38,750 47% 6.74 5.12 1.62 2009 36,001 74,000 33% 5.08 3.16 1.92 2010 16,501 84,540 16% 5.88 3.77 2.11 2011 0 98,714 0% 5.04 2012 0 108,264 0% 4.16 Summary 210,448 548,502 24% 5.60 3.59 1.94 Table 5-7: AVEC Diesel Fuel Deliveries to Shungnak, 2004 to 2012 Delivered Volume Unit Rate Year Air (gal) Barge (gal) % by Air Air ($/gal) Barge ($/gal) Differential ($/gal) 2004 0 110,510 0% 2.43 2005 0 48,550 0% 2.57 2006 96,980 69,779 58% 4.39 2.50 1.89 2007 57,983 0 100% 5.39 2008 86,076 0 100% 5.73 2009 72,000 50,628 59% 5.19 3.16 2.03 2010 74,900 50,422 60% 5.72 3.79 1.94 2011 105,469 0 100% 6.53 2012 58,196 90,968 39% 7.56 4.35 3.22 Summary 61,289 46,762 57% 5.79 3.13 2.27 Analysis of the 2004 to 2012 Ambler barged fuel price indicates that the fuel cost growth rate is the same as the Los Angeles Ultra-Low Sulfur #2 Diesel which was 8.4% without adjusting for inflation. The growth rate for the average of spot prices for Brent and West Texas crude, the current benchmark for ISER fuel price projections, was 10.3% over the same period without adjusting for inflation. This is well above the inflation for all items (US West and Anchorage), which has been about 2.5%, resulting in a growth rate relative to inflation of about 6%. This high rate of growth is not expected to continue. Air vs. barge delivery and Fuel Price Projections. The economic analysis in this study uses the data above and values from the University of Alaska, Institute of Social and Economic Research (ISER) fuel price projection for 2013 (ISER 2013). Unfortunately, that report has Section 6 Alternative Project Descriptions Feasibility Study and Conceptual Design Report Page 34 Cosmos Hills Hydro Feasibility some problems as applied to Ambler and Shungnak. ISER’s fuel price projections use statistical regression techniques on data from 1986 to 2012. ISER completed individual regressions for over 150 rural communities. The result is a simple projection of past trends into the future for each village without taking into account local knowledge or changes in the fuel transportation circumstances. From ISER’s report: The projection of fuel prices “provides an estimate of future values based on a statistical assessment of past relationships under specific assumptions, but they are not a prediction that the specific assumptions will happen.” (ISER 2013, p.3). Therefore, ISER’s statistical project implicitly assumes the historical proportion of barge/air deliveries will remain true into the future.4 AVEC, NANA, recent history, and local contacts indicate that this implicit assumption is untrue at present and unlikely to be true for the future. For most of the historic period on which ISER’s statistical project is based, barge delivery has been the dominant method of fuel delivery. Over the last decade or so, AVEC has experienced fluctuating but increasing instances when the river has been too low to receive barges, and fuel has been delivered by air at a significant additional cost. Recent history is displayed in Table 5-6. In 2011, the river was low enough that the barge was only able to get in using a side-channel and then was hauled side-ways to the unloading location at Ambler. The landing was unpleasant, touch-and-go, and somewhat dangerous. The barge company is unlikely to attempt the trip in similar circumstances again. Shungnak, further upriver, received all of its fuel through air delivery that year. This year (2013) is not yet complete, but locals have told us that the river is low enough for villagers to walk across – an unusual situation. All fuel delivery this year has been by air at a cost of $7.55/gallon for Ambler and $7.00/gallon for Shungnak. There are various explanations given for the barge failures. We have heard that the river is sedimenting up near the villages, that the high flows are decreasing, and that ice is staying longer in Kotzebue Sound so that barges miss the higher flows in the river. None of these explanations have been independently verified; all or none may be true. However, AVEC and local groups are quite definite that the incidence of air delivery of fuel has increased and is likely to remain high in the future. Therefore, the ISER fuel project underestimates the true fuel price at the villages. Fuel Price Scenarios. Despite the fact that ISER projections likely underestimate true fuel prices for the projects, this analysis uses ISER’s projections as a basis for the economic analysis. Because funding for the next phase of this project is expected to come from the Renewable Energy Fund and is part of a larger pool of projects competing for the same funding, it is appropriate to adopt the ISER projection so that equal comparisons can be made. However, the analysis makes two changes. First, the analysis omits the lowest of ISER’s fuel price scenarios, and only uses Medium and High. ISER’s “Low” projection greatly underestimates likely prices at these villages. (It may work for the other 150 villages in the projection). The Low projection for Ambler assumes a price of $5.34 for 2013 (more than $2 less than actual prices), and then goes down 4 The conclusion concerning the future price project and this implicit assumption was confirmed in personal and e-mail conversations with Ms. Fay, Ms. Meléndez, and Mr. Pathan, three of the ISER report’s four authors. Section 6 Alternative Project Descriptions Feasibility Study and Conceptual Design Report Page 35 Cosmos Hills Hydro Feasibility to below $5/gallon but never comes back to that price. The projection ends in 2035 at a price of $4.34/gallon (real prices, without inflation). This projection is so far below AVEC’s experience and expectations for fuel delivery that using this price forecast would produce unsupportable conclusions. Given recent experience and the likelihood of at least periodic if not permanent air delivery, it is not credible that fuel prices will average between $4.18 and $4.34/gallon (the ISER Low projection) for most of the project’s life. The problem of underestimating prices due, in part, to increased air delivery, also plagues the medium and high price scenarios, though not to the same extent. Therefore, these two ISER scenarios  the Medium and High forecast  are used for economic modeling. The ISER projected inflation-adjusted growth rate for Ambler is 1.5% for the Medium projection and 1.7% for the High projection. The second change is it that the analysis includes a third price projection. The near term fuel costs provided by ISER do not reflect current prices. They are far below what the utility is experiencing. AVEC projects a third price fuel scenario based on a price of barge delivered fuel of $5.50 per gallon. This third price scenario, termed AVEC 2013, also assumes some air delivery. Specifically, it assumes that air deliveries are $2 more than barge prices. It assumes that 50% of the fuel needs in Ambler are met by air deliveries and that 100% of the fuel needs in Shungnak are met by air deliveries. The AVEC 2013 fuel price for Ambler in FY 2013 is $5.50/gallon + $1.00/gallon air surcharge = $6.50/gallon (still over $1 less than the actual price). By similar logic it assumes a Shungnak fuel price of $7.50 per gallon. ($5.50 + $2.00 = $7.50/gallon, which is the actual 2013 price being paid by AVEC). The AVEC 2013 scenario uses a rate of growth equal to the ISER High projection. (The economic conclusions would not be greatly different with the ISER Medium rate of growth was used). Exhibit 5-3 compares historic and projected fuel prices. Table 5-8 shows the projections for Ambler and Shungnak in 2013, 2038, and 2063. Section 6 Alternative Project Descriptions Feasibility Study and Conceptual Design Report Page 36 Cosmos Hills Hydro Feasibility Exhibit 5-3: Ambler Fuel Pricing Projections Table 5-8: Fuel Price Projection Scenarios, Fuel Price in 2013 $/gal FY 2013 (year 0) FY 2038 (year 25) FY 2063 (year 50) Ambler Shungnak Ambler Shungnak Ambler Shungnak ISER Medium 5.34 6.21 7.10 8.60 10.48 13.39 ISER High 5.34 6.21 9.60 12.01 14.64 19.08 AVEC 2013 6.50 7.50 9.88 11.40 15.02 17.34 5.3.2 Nonfuel Costs Nonfuel expenditures, such as lube oil, engine overhauls, parts replacement, etc., are categorized as production related. These are costs that are directly related to the number of hours the diesel engine operates. Nonproduction costs, such as administration, buildings, and transmission are relatively fixed, regardless of diesel engine run time or energy generated. The nonfuel costs that can be avoided when a hydro or intertie completely avoids running a diesel plant (diesels off) are the production related nonfuel costs. AVEC reports that the nonfuel costs avoided when a diesel plant is idled are $167,000 per year. This figure is confirmed based on the following review using the most recent PCE annual report filed by AVEC with the RCA as shown in Table 5-9. 1 2 3 4 5 6 7 8 9 10 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038Price per gallon (2013 US $)Year Fuel Pricing, Inflation Adjusted (US West Coast CPI, all items), 2013 $ Ambler Barge Delivered Fuel Price Average of Brent and WTI Oil Prices per gal Los Angeles Ultra-Low Sulfur #2 Diesel Price ISER 2013 Ambler Medium Fuel Projection ISER 2013 Ambler High Fuel Projection AVEC 2013 Ambler Fuel Projection Section 6 Alternative Project Descriptions Feasibility Study and Conceptual Design Report Page 37 Cosmos Hills Hydro Feasibility Table 5-9: Nonfuel Costs from AVEC 2012 PCE Annual Report Account Description 2012 Cost 547.1 Fuel Inventorying $34,872 547.2 Fuel Purchasing $32,169 547.3 Fuel Pipeline & Header $25,138 547.5 Fuel Spill Cleanup & Remediation $175,411 548 Power Generation Expenses $27,170 548.1 Generation Exp- Lube Oil $236,337 549 Misc. Generation Expenses $657,463 553 Maintenance of Gen & Electric Equip $611,581 553.2 Technical InHouse Service - Generation $7,706 553.3 Generation Plant - Scheduled Maintenance $1,412,904 553.5 Generation Plant Overhauls $538,866 553.9 Power Plant Operator Daily CK $1,761,495 553.999 O/H For Power Production $1,883,237 554 Maintenance Other Power Production $545,057 AVEC 2012 Total Production related nonfuel costs $7,949,406 AVEC 2012 Energy Generated, kWh 78,802,401 Production related nonfuel avoided rate, $/kWh' $0.101 AVEC 2012 PCE reported number of power plants 48 Production related nonfuel cost avoided when diesels are off Cost avoided per plant per year $165,613 Costs avoided per plant run hour $18.91 Economic modeling uses AVEC's nonfuel production related savings from an intertie (taking a diesel power plant offline) of $167,000 per year which equates to approximately $19 per plant run hour. Production related nonfuel costs are assumed to change at 50% of the rate of fuel change. Section 6 Alternative Project Descriptions Feasibility Study and Conceptual Design Report Page 38 Cosmos Hills Hydro Feasibility 6. ALTERNATIVE PROJECT DESCRIPTIONS 6.1 Wesley Creek 6.1.1 Characteristics of Wesley Creek The Wesley Creek project would be a run-of-river project with a small diversion dam and intake, a long buried penstock pipeline, a small Pelton turbine and powerhouse, and a tailrace back to the creek. The project would also include an access road, a transformer, and a high-voltage transmission line. At this location, the upstream basin catchment area is approximately 5.2 square miles. It is noted that it would be feasible to divert two additional drainage basins from the northern watershed boundary into the Wesley Creek basin adding 1.9 and 1.2 square miles, respectively. The conceptual design plans for the Wesley Creek Hydro Project are included in Appendix A. The general arrangement of the project features is described below. 6.1.2 Intake The intake location, at an elevation of approximately 660 feet, is situated just downstream from a small tributary entering Wesley Creek and approximately 1,200 feet upstream of the Upper Wesley Creek Bridge. At this location, the stream begins a descent from the relatively wide, flat valley interspersed with wetlands, into the narrower and steeper valley that gradually flattens as it empties onto the Kobuk River valley. The intake site is littered with boulders and cobbles and is confined by the Bornite Road to the west and mountainous topography to the east. The stream channel can be expected to meander between these two boundaries. Currently, it flows down the middle of the valley, has banks that are approximately two to three feet high and 35 feet across, and has a gradient of approximately five percent. Removal of debris such as vegetation, sand, and gravel will be required at the intake to reduce wear and clogging of the turbine. The layout of the intake will facilitate this removal along with a debris boom and the hydraulics of the intake (i.e. maintaining velocity past the screens so that a small percentage of the total flow is taken). The intake system should also take into account clogging potential due to frazil ice. This can be done with non-metallic materials or other means of dislodging frazil ice from the intake screens. It may also make sense to remove the screens entirely when the frazil ice is likely to form in the early winter, and possibly in the spring, when there is no ice and snow cover to reduce the heat loss from the flowing water. Additional considerations include the significant buildup of ice cover over the winter and potential glaciation events. It is recommended that a pool be established with a minimum water depth of seven feet to accommodate ice build-up so that flow can be maintained into the intake during the winter. Winter ice depth investigations should be done to confirm the proposed intake concept. The intake structure at Wesley Creek would consist of a 7-foot-high concrete diversion wall angled to direct the flow of water past the structure. The intent is to increase the velocity Section 6 Alternative Project Descriptions Feasibility Study and Conceptual Design Report Page 39 Cosmos Hills Hydro Feasibility while also deepening the pool of water to enhance the quality of water being diverted. The intake will consist of a concrete box structure with flat plate fine screens situated parallel to the water flow. The screens will be located a minimum of 1 foot above the stream bed. The intake capacity would be 16 cfs and water would be diverted at all times. To maintain flow through the intake structure, the hydroelectric plant would bypass water during low flow periods, even though there will be no power output when flows drop below the minimum required for the turbines to operate (approximately 1 to 2 cfs). Any prescribed environmental flows would effectively eliminate the potential for winter power production. At flows higher than 16 cfs, the intake would be completely submersed. The intake structure would have approximately one foot of freeboard above the screens during the average summer flows. With the presence of indigenous fishes in the lower reaches of Wesley Creek, fish passage and habitat considerations will be a concern. The specific mitigation required, if any, is unknown at this time. The low-height intake structure and diversion dam can easily accommodate a fish ladder with design velocities between 4 fps and 12 fps, depending on the flow in the river. Adjustments during design would be made to ensure that fish passage can be made by the adults of each species. Maintaining habitat is addressed in the Project Development section. Additional design considerations that must be addressed during the next phase of design include a hydraulic model of the stream flows and a sediment transport study. An existing conditions hydraulic model will be based on the current topography of the stream bed to further define the flow patterns in Wesley Creek. A proposed conditions model will then be modeled to predict the impacts on the stream and to verify that the velocities at the screen and through the fish ladder meet the design criteria. Data from the sediment transport study will be utilized to design the scour protection and control for the intake structure and diversion dam. A cutoff wall driven to the bedrock and connected to the diversion dam is anticipated with bank protection along both sides of Wesley Creek. Seepage control measures will be considered if deemed necessary to prevent erosion around the structure. 6.1.3 Penstock The penstock for the Wesley Creek powerhouse will follow the Bornite Road alignment for approximately two-thirds of the way to the powerhouse. From the intake, it will be routed along the east side of the road down to the bridge, cross the creek suspended from the bridge, continue approximately 3,300 feet along the east side of the road, cross the road at a low point in the road, and then continue downhill to the powerhouse cutting diagonally across the contours. Section 6 Alternative Project Descriptions Feasibility Study and Conceptual Design Report Page 40 Cosmos Hills Hydro Feasibility Photo 6-1 Wesley Creek Road and Gaging Station at Bridge The conceptual design for the penstock pipeline is a 24-inch diameter bare high-density polyethylene (HDPE) pipe buried in an insulated trench. At the bridge and road crossings, the pipe will be insulated and jacketed arctic pipe. The overall length of the penstock will be approximately 7,750 linear feet. HDPE was selected over other pipe materials for several reasons. HDPE has the capability to adequately handle the almost 300 feet of static head, performs well in cold climates, can tolerate a less than perfect bedding, and the fusible connections will minimize leaks at joints. The pipeline size selected for various hydraulic capacities is shown in the Table 6-1, with selection based on limiting head loss to 15% of the static head. Table 6-1: Wesley Creek - Penstock Diameters and Hydraulic Capacity Pipe Diameter (inch) Max. Flow (cfs) 18 8 20 9 22 11 24 15 26 19 28 23 30 28 Section 6 Alternative Project Descriptions Feasibility Study and Conceptual Design Report Page 41 Cosmos Hills Hydro Feasibility 6.1.4 Powerhouse The gradual run out of Wesley Creek from the Cosmos Hills onto the Kobuk River valley complicates the identification of a powerhouse site. The decline in the rate of elevation drop requires balancing the cost of additional energy output throughout the year with the cost of extra pipeline and access road. The powerhouse site selection is further complicated when coupled with the Dahl Creek project. A combined project allows for the opportunity to undersize the pipeline slightly, which sacrifices summer peak output, but improves project economics. The recommended elevation of approximately 370 feet for the powerhouse is based on the energy and economic modeling, topography, and distance from the existing road. In th e vicinity of the powerhouse location, Wesley Creek is currently well confined by the ridge feature several hundred feet high on the west side of the valley which the creek abuts. There is a low, confining ridge east of the creek that varies from about 1,500 to 2,000 feet away from the west ridge. It appears that the creek is likely to meander within this valley in the lower reaches below the proposed powerhouse site. The powerhouse concept includes a heated and insulated structure situated well above surrounding grade. The building footprint and size of the foundation for the conceptual design were driven by the needs of the general arrangement of generation equipment and the necessary foundation. Structural design parameters for wind, seismic factors, and snow are moderate, so typical arctic building construction is recommended. The proposed powerhouse concept utilizes a prefabricated utility building with insulated wall panel insulation for a complete thermal break. Prefabrication will reduce construction time in the remote region, as well as provide pre-fitment and complete outfitting of accessory equipment. The turbine and generator would be installed as a combined unit before building placement. For maintenance, individual components would be removed through double man-doors. 6.1.5 Tailrace Proper design of the tail race is required to ensure that water exiting the turbine returns to the creek unimpeded. Tail water should return to Wesley Creek by emerging in flowing water, at a depth below the winter ice cover. Submerging the tail race outlet in the creek could create problems with clogging due to sedimentation. The conceptual design for the tail race is to utilize a 36-inch diameter bare HDPE pipe buried in an insulated trench. The overall length of the tailrace will be approximately 720 linear feet. The pipe should be sized so that it flows approximately half full at the inlet. The extra capacity is required to allow for entrained air in the water to flow back to the turbine. The tailrace pipe should be laid at a fairly steep grade to provide a high water velocity at the discharge point. The high velocity will scour the creek, creating a pool and preventing sedimentation clogging. The pool will also serve to promote ice cover and prevent clogging during the winter. Section 6 Alternative Project Descriptions Feasibility Study and Conceptual Design Report Page 42 Cosmos Hills Hydro Feasibility 6.1.6 Foundations The intake facility will be located in an area with potentially alluvial and/or colluvium deposits, which likely will include boulders. The conceptual design utilizes a shallow depth reinforced concrete foundation for the intake structures. The concrete foundation should be constructed on compacted structural fill material. The presence of boulders and large diameter colluvium deposits may require a deeper excavation to remove the large diameter material. The powerhouse will be located within the creek channel floodplain, so it is likely that the building site can be located in an area with unfrozen sands and gravels. Therefore, the conceptual design utilizes a shallow depth reinforced concrete foundation for the building. The concrete foundation should be constructed on compacted structural fill material. If fine- grained soils are encountered, they should be removed prior to placement of the structural fill. Because the powerhouse is within the floodplain, the building should be placed on a gravel fill embankment constructed to an elevation of approximately 380 feet. All shallow depth reinforced concrete foundations should incorporate perimeter rigid board insulation to limit the depth of seasonal frost penetration. Before actual design of the foundations, site specific geotechnical explorations will be required to confirm these conceptual design assumptions. 6.1.7 Hydroelectric System An impulse (Pelton) turbine directly connected to a synchronous generator will be utilized at Wesley Creek. The switchgear and controls, to be supplied with the turbine, will include a load governor sized for the peak output and control capabilities for operation in parallel with the diesel generators or as a standalone system. A head level sensor at the intake will serve as the primary input for controlling the water flow through the turbine to maintain a minimum water level at the intake that is just below the spillway height. A Pelton turbine was selected for optimal operation based on the head, as they are most efficient under high heads. Pelton turbines consist of an impulse wheel or runner which is usually a solid disk, or hub, upon which are mounted buckets that are designed to split the jet and cause it to turn through nearly 170 degrees while sliding over the inner surface as the bucket travels away from the nozzle. The reaction due to the change of direction delivers power to the wheel. Section 6 Alternative Project Descriptions Feasibility Study and Conceptual Design Report Page 43 Cosmos Hills Hydro Feasibility Photo 6-2: A Small Single Jet Pelton Turbine The expected configuration is a 600 rpm dual nozzle Pelton turbine with a 1,200 rpm synchronous generator. Additional equipment required as part of the water-to-wire package includes: gear drive, hydraulic power unit, drive couplings, switchgear and control panels, inlet valve, dismantling joint, and structural steel equipment mounting frames. 6.1.8 Energy Estimate / Capacity Energy modeling for the hydroelectric projects takes into account the efficiency of the turbine and generator, the minimum operating flow, pipeline frictional losses, and water temperature. Sizing of the turbine and generator was modeled to determine the most economical capacity for development. The potential annual energy output for Wesley Creek as a function of the hydraulic capacity of the feed penstock and the generating system is shown in Exhibit 6-1. For these projections, an environmental flow rate of 1.1 cfs has been assumed. This volume is 12% of the average annual flow. Exhibit 6-1 shows that the power output from the power plant could range from 600,000 kWh per year at 8 cfs capacity to one million kWh per year at around 23 cfs capacity. At the design capacity of 15 cfs, the predicted annual power generation is approximately 880,000 kWh. Section 6 Alternative Project Descriptions Feasibility Study and Conceptual Design Report Page 44 Cosmos Hills Hydro Feasibility Exhibit 6-1: Wesley Creek Hydro Energy Potential 6.1.9 Transmission / Distribution Lines Power will be transmitted to AVEC’s existing Shungnak – Kobuk intertie, located approximately two miles south of the proposed Wesley Creek powerhouse location. The transmission line would be strung on wooden poles traversing the distance overland in a straight line. Tying into the existing system will require a small substation. The design of the electrical transmission line and substation is outside of this project’s scope of work. However, conceptual cost estimates have been included in this analysis. 6.1.10 Access Roads A majority of the project area can be accessed from the existing Bornite Road. A 100-foot- long, access road will be required from the existing road to the intake facility. Approximately 4,000 feet south of the Upper Wesley Creek Bridge, the penstock alignment continues straight while the road begins a large curve. At this point a new approximately 2,500-foot-long access road will be constructed from the Bornite Road to the powerhouse. The access road and penstock pipeline will follow the same alignment. Both access roads will be constructed with a surface width of 12 feet. This will provide one- way traffic during construction and maintenance operations. Pullouts will be spaced periodically to allow opposing traffic to pass. Typical embankment construction will consist of one to two feet of compacted gravel over a geotextile separation fabric. Culverts will be placed where needed. 0 200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000 8 13 18 23 28Annual Energy Output, kWhHydraulic Capacity (cfs) Wesley Creek Hydro Potential Energy Output (no Environmental Flow) Energy Output (with Environmental Flow) Section 6 Alternative Project Descriptions Feasibility Study and Conceptual Design Report Page 45 Cosmos Hills Hydro Feasibility 6.2 Dahl Creek 6.2.1 Characteristics of Dahl Creek The Dahl Creek project would be a run-of-river project, similar to the Wesley Creek project. At this location, the upstream basin catchment area is approximately 8.5 square miles. The project would include a small diversion dam and intake, a long buried penstock pipeline, a small Turgo turbine and powerhouse, and a tailrace back to the creek. The project would also include an access road, a transformer, and a high-voltage transmission line. The conceptual design plans for the Dahl Creek Hydro Project are included in Appendix B. The general arrangement of the project features is described below. 6.2.2 Intake The intake location, at an elevation of approximately 525 feet, is situated just downstream from a pond and a small tributary entering Dahl Creek from the east. The intake at Dahl Creek will be similar in design as the one at Wesley Creek, but slightly larger. The diversion wall will be approximately the same height, but the intake box structure will be slightly longer to account for a higher capacity at 16 cfs. A fish ladder may be needed on this stream, also. Hydraulic analysis and sediment loading should be completed for this stream during the design phase. 6.2.3 Penstock The penstock for the Dahl Creek powerhouse will follow Dahl Creek all the way to the powerhouse. Two creek crossings will be required because of the narrow valley and the meanders of the creek. The conceptual design for the penstock pipeline is a 24-inch diameter bare HDPE pipe buried in an insulated trench. At the creek crossings, the pipe will be insulated and jacketed arctic pipe. The overall length of the penstock will be approximately 9,000 linear feet. HDPE was selected over other pipe materials for the same reasons as stated for the Wesley Creek project. The pipeline size selected for various hydraulic capacities as is shown in the following table with selection based on limiting head loss to 20% of the static head. Section 6 Alternative Project Descriptions Feasibility Study and Conceptual Design Report Page 46 Cosmos Hills Hydro Feasibility Table 6-2: Dahl Creek - Penstock Diameters and Hydraulic Capacity Pipe Diameter (inch) Max. Flow (cfs) 18 8 20 9 22 12.5 24 16 26 20 28 24 30 30 6.2.4 Powerhouse The powerhouse will be located on the west side of Dahl Creek, approximately 1,800 feet north of the road connecting Bornite Road with the Dahl Creek Airport. The recommended elevation of the powerhouse is approximately 290 feet. The building structure would be identical to the previously described Wesley Creek powerhouse. 6.2.5 Tailrace The design details of the tailrace would be nearly identical to the Wesley Creek project. The length of the 36-inch diameter HDPE pipe would be approximately 100 linear feet. 6.2.6 Foundations The design details of the intake and powerhouse facilities would be nearly identical to the Wesley Creek project. Because the powerhouse will be within the floodplain of Dahl Creek, the building should be placed on a gravel fill embankment constructed to an elevation of approximately 290 feet. 6.2.7 Hydroelectric System The design details of the hydroelectric system would be nearly identical to the Wesley Creek project except that the turbine would likely be a Turgo unit due to the lower head. Turgo turbines are an impulse wheel turbine, similar to the Peltons. However, rather than directing the water jet directly at a bucket and splitting the flow, in a Turgo turbine, the jet of water enters the Turgo impulse runner at one side and discharges at the oppose side, falling into the tailrace by gravity. The Turgo runner is typically small and yields a higher specific speed for an impulse turbine. For the Dahl Creek site a single dual nozzle Turgo turbine would be used at 720 rpm. A 1,200 rpm synchronous generator would be used requiring a gear drive, hydraulic power unit, drive couplings, switchgear and control panels, inlet valve, dismantling joint, and structural steel equipment mounting frames. If desired, a direct drive option could be included at an additional cost. Section 6 Alternative Project Descriptions Feasibility Study and Conceptual Design Report Page 47 Cosmos Hills Hydro Feasibility Photo 6-3: A Small Turgo Runner, Deflector Plate, and Nozzle 6.2.8 Energy Estimate / Capacity Similar to the Wesley Creek project, energy modeling for the hydroelectric projects takes into account the efficiency of the turbine and generator, the minimum operating flow, pipeline frictional losses, and water temperature. Sizing of the turbine and generator was modeled to determine the most economical capacity for development. The potential annual energy output for Dahl Creek as a function of the hydraulic capacity of the feed penstock and the generating system is shown in Exhibit 6-2. For these projections, an environmental flow rate of 1.7 cfs has been assumed. This volume is 12% of the average annual flow. Exhibit 6-2 shows that the power output from the power plant would be approximately 1,030,000 kWh per year at 16 cfs capacity. Section 6 Alternative Project Descriptions Feasibility Study and Conceptual Design Report Page 48 Cosmos Hills Hydro Feasibility Exhibit 6-2: Dahl Creek Hydro Energy Potential 6.2.9 Transmission / Distribution Lines Power will be transmitted to AVEC’s existing Shungnak – Kobuk intertie, located approximately 1.5 miles south of the Dahl Creek powerhouse location. The transmission line would be strung on wooden poles. Tying into the existing system will require a small substation. The design of the electrical transmission line and substation is outside of this project’s scope of work. However, conceptual cost estimates have been included in this analysis. 6.2.10 Access Roads The access road to the powerhouse will follow an old dirt road/trail alignment that starts on the access road to the Dahl Creek Airport. The length will be approximately 4,140 feet and the surface width will be 12 feet. This will provide one-way traffic during construction and maintenance operations. Pullouts will be spaced periodically to allow opposing traffic to pass. Typical embankment construction will consist of one to two feet of compacted gravel over a geotextile separation fabric. Culverts will be placed where needed. Access to the intake facility will be on the buried penstock alignment. The trench will be backfilled with gravel material that will be suitable for all-terrain vehicle traffic. 6.3 Kogoluktuk River 6.3.1 Characteristics of the Kogoluktuk River The Kogoluktuk River project would be a run-of-river project with a small diversion dam and intake, a long above-ground penstock pipeline, a small Kaplan turbine and powerhouse, and a tailrace back to the river. The project would also include an access road, a transformer, and a high-voltage transmission line. 0 200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000 1,600,000 1,800,000 8 13 18 23 28Annual Energy Output, kWhHydraulic Capacity (cfs) Dahl Creek Hydro Potential Energy Output (no Environmental Flow) Energy Output (with Environmental Flow) Section 6 Alternative Project Descriptions Feasibility Study and Conceptual Design Report Page 49 Cosmos Hills Hydro Feasibility At this location, the upstream basin catchment area is approximately 424 square miles. The conceptual design plans for the Kogoluktuk River Hydro Project are included in Appendix C. The general arrangement of the project features is described below. 6.3.2 Intake The intake structure at the Kogoluktuk River would consist of 10-foot-high concrete diversion walls and intake screens. The intake screens will be installed in a concrete box structure that directs the flow to the penstock. Two types of intake screens will be utilized: flat plate fine screens and Coanda screens. The flat plate fine screens will be situated parallel to the water flow to allow for self-cleaning. The Coanda screens will be installed perpendicular to the water flow in the portion of the intake structure located at the end of the diversion wall. The intake portion of the diversion wall is four feet shorter than the portion of the wall spanning the river and will act as a broad-crested weir. The screens will be located a minimum of two feet above the stream bed to minimize the sediment entering the intake structure. The total intake capacity will be 170 cfs with the flat plate screens sized for 50 cfs and the Coanda screens for 120 cfs. Water will be continuously diverted for hydro operation and to maintain fluid conditions in the intake, penstock, and tailrace at all times. The hydroelectric plant is expected to generate power year-round, although any prescribed environmental flows can significantly impact winter operation, possibly to the point of curtailing it completely. At flows higher than 170 cfs, both sets of intake screens would be completely submersed. During the average summer flows, the intake structure would have approximately five feet of freeboard above the screens. A more detailed hydraulics analysis may show that constricting the river at the intake location with the deeper pool and higher velocities could provide the needed flow year around. This technique is often used with intake designs in colder regions. The additional height for the diversion wall takes into account an ice cap that will form during the winter months. During design, the thickness of the ice cap should be verified to reduce the height of the diversion wall as much as possible. Removal of debris will be considered at this structure with similar technologies; debris boom, higher velocities, and diversion of a small percentage of the flows in the river. With the presence of indigenous fishes in the Kogoluktuk River, fish passage may be required. Flows in the Kogoluktuk River vary from a low flow of 50 cfs to a high flow of 10,500 cfs. The velocities in the fish ladder will be between 4 fps and 12 fps depending on the flow in the river. Adjustments during design can be made to ensure that fish passage can be made by a majority of the adults for each species found in the river system. Section 6 Alternative Project Descriptions Feasibility Study and Conceptual Design Report Page 50 Cosmos Hills Hydro Feasibility Photo 6-4: Kogoluktuk Intake Site with Obstructing Cliff Downstream 6.3.3 Penstock The penstock for the Kogoluktuk River powerhouse will follow the Kogoluktuk River, on a pipe bench cut and/or blasted out of the steep river banks. Pipe burial will not be possible along most of the alignment. The pipe bench will also serve as the construction road and access road to the intake, so will be approximately 30 feet wide. The conceptual design for the penstock pipeline is a 72-inch diameter insulated and jacketed pipe secured to the pipe bench and/or the rock walls. The overall length of the penstock will be approximately 4,300 linear feet. Materials being considered are HDPE, steel, and fiberglass reinforced plastic (FRP). All materials have the capability to adequately handle the static head. A concern with the HDPE pipe is the ability to cost effectively fuse the joints on site. A concern with FRP is the brittle nature of this material at subzero temperatures. Section 6 Alternative Project Descriptions Feasibility Study and Conceptual Design Report Page 51 Cosmos Hills Hydro Feasibility Photo 6-5: Oblique Aerial of Kogoluktuk Penstock Route 6.3.4 Powerhouse The powerhouse for the Kogoluktuk River project is not much larger than the Wesley Creek structure, but will require a larger foundation, two floor levels, a crane, and a taller building. A pre-engineered metal building is suggested with an outer layer of insulated wall panels providing a thermal break. Equipment would be installed through a roll up garage door that would also have hinged insulated wall panels covering the opening. 6.3.5 Tailrace The tailrace for the Kogoluktuk would be a below grade concrete encased draft tube transitioning to a concrete box structure that will channel water into dual 6-foot diameter culverts discharging back to the river. A layer of insulation is included over the water conveyance. 6.3.6 Foundations The concrete foundation is expected to be placed directly on excavated bedrock and will require anchors and a drainage system to reduce potential flotation forces. Before actual design of the foundations, site specific geotechnical explorations will be required to confirm these conceptual design assumptions. 6.3.7 Hydroelectric System A Kaplan turbine was selected, as they perform well under conditions with low head and high flow. The Kaplan turbine is a propeller type water turbine which has fixed or adjustable Section 6 Alternative Project Descriptions Feasibility Study and Conceptual Design Report Page 52 Cosmos Hills Hydro Feasibility blades. The ability to alter the inclination of the blades allows the turbine to adjust to suit the load variations. This provides high efficiencies under considerable variation of load. A set of wicket gates or vanes controls the flow of water through the unit. A load governor will be required to limit rapid fluctuations in water flow that could cause adverse pressure changes in the penstock. Photo 6-6: Large Kaplan Runner with Adjustable Stainless Steel Blades For the Kogoluktuk River project a Kaplan turbine at 600 - 720 rpm would be used. Water- to-wire equipment would include a synchronous generator, switchgear and control panels, hydraulic power unit, turbine inlet valve, dismantling joint and associated turbine piping. 6.3.8 Energy Estimate / Capacity The Kaplan turbine has a slightly improved efficiency over the Pelton and Turgo units. The energy output also incorporates a higher minimum operation flow. For these projections, an environmental flow rate of 46.0 cfs has been assumed. This volume is 8% of the average annual flow. Head loss through the large diameter pipeline is generally minimal, except at the higher flows which reduce energy output as shown in Exhibit 6-3. The power output from the power plant would be approximately 3,800,000 kWh per year at 170 cfs capacity. Section 6 Alternative Project Descriptions Feasibility Study and Conceptual Design Report Page 53 Cosmos Hills Hydro Feasibility Exhibit 6-3: Kogoluktuk River Hydro Energy Potential 6.3.9 Transmission / Distribution Lines Power will be transmitted to AVEC’s existing Shungnak – Kobuk intertie at Kobuk, located approximately six miles southwest of the proposed Kogoluktuk River powerhouse location. The transmission line would be strung on wooden poles, following the access road for approximately half way and directly overland the remaining distance. The design of the electrical transmission line and substation is outside of this project’s scope of work. However, conceptual cost estimates have been included in this analysis. 6.3.10 Access Roads The access road to the powerhouse will begin at the existing road to the Dahl Creek Airport. The road would parallel the existing runway, on the north side of the airport property, through Sections 21 and 22. It would then roughly follow the 300-foot elevation contour through Section 23, avoiding a Native Allotment. Once past the Native Allotment, the road would drop down to the 250-foot elevation contour through Section 25 and into Section 19. The road would then cross a ridge in Section 18, traversing up it to approximately elevation 460 feet. Past the ridge, the road would descend down into the Glacier Creek valley to an elevation of approximately 240 feet. It would then continue to the powerhouse at the northern edge of Section 17. Access to the intake facility will be along the penstock alignment bench, adjacent to the Kogoluktuk River. The length of the access road will be approximately 32,000 feet (6 miles). The surface width will be 12 feet. This will provide one-way traffic during construction and maintenance operations. Pullouts will be spaced periodically to allow opposing traffic to pass. Typical embankment construction will consist of one to two feet of compacted gravel over a geotextile separation fabric. Culverts will be placed where needed. 0 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 7,000,000 8,000,000 80 130 180 230 280Annual Energy Output, kWhHydraulic Capacity (cfs) Kogoluktuk River Hydro Potential Energy Output (no Environmental Flow) Energy Output (with Environmental Flow) Section 6 Alternative Project Descriptions Feasibility Study and Conceptual Design Report Page 54 Cosmos Hills Hydro Feasibility 6.4 Hydroelectric Capacity Selection The economic modeling developed for this study utilizes hydro capacity, power demand, load growth, and turbine operation cutoff flows to determine the amount of diesel electric generation displaced. Capacity selection requires an analysis of the power demand and the water resources available (Wesley Creek, Dahl Creek, and Kogoluktuk River; with and without environmental flows; seasonal flows, available head, penstock diameters). Power demand and load growth requires an analysis of the load combination scenarios (with and without an Ambler intertie, growth rates). The capacity also affects the turbine cutoff flow; as capacity increases, the cutoff flow increases, while the displaced diesel generation decreases due to a shorter hydropower generation season. These parameters are inter-related and require an iterative approach to the analysis. The following project configurations and energy potential (without potential environmental flows) are recommended based on analysis: Table 6-3: Hydro Project Detailed Configuration Parameter Wesley Dahl Kogoluktuk Hydrology Basin Area (sq mi) 5.2 8.5 424 Avg. Annual Flow (cfs) 9.0 14.6 574.6 Minimum Flow (cfs) 1.2 1.9 66.7 Environmental Flow 1.1 1.7 46.0 Configuration Design Flow (cfs) 15 16 170 Min Operation Flow 1.5 1.6 25.5 Intake Elevation (ft) 667 537 235 Tailwater/Powerhouse Elevation (ft) 375 280 171 Static Head (ft) 292 257 64 Penstock OD (in) 24 24 72 Penstock Length (ft) 7,750 9,000 4,300 Velocity (fps) 5.7 5.1 6.0 Friction Loss (ft) 35 39 5.8 Friction Loss % 12% 15% 9% Generator Efficiency 94% 94% 94% Transmission Efficiency 95% 95% 95% Peak Turbine Efficiency 89% 89% 92% Net Efficiency (including transmission) 79% 79% 82% Output Capacity (kW) 260 235 690 Annual Energy (kWh) 1,000,000 1,210,000 4,940,000 Annual Energy w/ Environmental Flows (kWh) 880,000 1,030,000 3,800,000 Section 7 Life-Cycle Cost Analysis Feasibility Study and Conceptual Design Report Page 55 Cosmos Hills Hydro Feasibility 7. LIFE-CYCLE COST ANALYSIS 7.1 Displaced Diesel Electric Generation Displaced diesel generation is determined as follows: • Water availability for power is determined from the median daily hydrology less in- stream environmental flows, if any. If the available water is less than the minimum flow required by the turbine, then no power is produced by the hydro. • Hydropower potential output is calculated using the dynamic head and turbine efficiency for the given flow and the fixed efficiencies for the generator and transmission. • The required diesel fuel for diesel electric generation is calculated for each day based on the average energy need for each day and a diesel generation efficiency based on the average from the FY 2012 PCE report. • Hydro output is compared with energy needs, as follows, to determine the required diesel generation, the hydro penetration into demand, and the available hydro energy for heat. o If the daily 15 minute peak demand plus a 15 kW buffer exceeds the hydro output, then a diesel is required to run at the minimum diesel loading (40.4 kW) for 12 hours. o If the daily average demand exceeds the hydro output, then a diesel is required to provide the greater of at least 24 hours of energy at the minimum loading or the remainder of energy needs after subtracting the hydro output. o The hydropower for displacement of diesel energy is calculated after subtracting the required diesel energy. o Any remaining hydro energy is considered available for heating up to the maximum amount of heating energy needed for the day. • All the outputs for each day of the year are summed to provide an expected average annual performance scenario for economic analysis. The displaced diesel generation for each of the three individual hydroelectric projects, without potential environmental flows, is shown in the operational charts in the Project Summary section 7.4 below. 7.2 Project Development Costs Because barges will likely not be available to reach Kobuk, all materials, construction equipment, and supplies for the hydro project construction are assumed to require air delivery. A summary of the development costs are shown in the following sections. 7.2.1 Wesley Creek The total cost to design and construct the Wesley Creek hydro project is estimated to be $13.6M, as shown below. This estimate is based on the conceptual-level design plans included in Appendix A. A detailed breakdown of the construction cost is included in Appendix D. Section 7 Life-Cycle Cost Analysis Feasibility Study and Conceptual Design Report Page 56 Cosmos Hills Hydro Feasibility Table 7-1: Wesley Creek Project - Conceptual-Level Development Cost Estimate Item Description Cost Mobilization $1,900,000 Diversion and Intake Structures $1,230,000 Penstock $2,299,000 Tailrace $331,000 Power House and Hydroelectric System $1,575,000 Access Road $330,000 Electrical Transmission $926,000 Miscellaneous Items $225,000 Construction Subtotal $8,816,000 Bonding and Insurance $441,000 Construction Engineering and Administration $926,000 25% Contingency $2,546,000 Total Construction Project Cost $12,728,000 Preconstruction Costs (Survey, Geotechnical, Environmental, Design, Permitting $891,000 Total Development Costs $13,619,000 7.2.2 Dahl Creek The total cost to design and construct the Dahl Creek hydro project is estimated to be $15.2M, as shown below. This estimate is based on the conceptual-level design plans included in Appendix B. A detailed breakdown of the construction cost is included in Appendix D. Section 7 Life-Cycle Cost Analysis Feasibility Study and Conceptual Design Report Page 57 Cosmos Hills Hydro Feasibility Table 7-2: Dahl Creek Project - Conceptual-Level Development Cost Estimate Item Description Cost Mobilization $1,960,000 Diversion and Intake Structures $1,480,000 Penstock $2,658,000 Tailrace $44,000 Power House and Hydroelectric System $1,675,000 Access Road $902,000 Electrical Transmission $926,000 Miscellaneous Items $225,000 Construction Subtotal $9,870,000 Bonding and Insurance $493,000 Construction Engineering and Administration $1,036,000 25% Contingency $2,850,000 Total Construction Project Cost $14,249,000 Preconstruction Costs (Survey, Geotechnical, Environmental, Design, Permitting $998,000 Total Development Costs $15,247,000 7.2.3 Combined Wesley Creek and Dahl Creek The total cost to design and construct the combined Wesley Creek and Dahl Creek hydro project is estimated to be $26.0M, as shown below. This estimate is based on the conceptual-level design plans included in Appendices A and B. A detailed breakdown of the construction cost is included in Appendix D. Section 7 Life-Cycle Cost Analysis Feasibility Study and Conceptual Design Report Page 58 Cosmos Hills Hydro Feasibility Table 7-3: Combined Wesley Creek / Dahl Creek Project - Conceptual-Level Development Cost Estimate Item Description Cost Mobilization $2,685,000 Diversion and Intake Structures $2,710,000 Penstock $4,957,000 Tailrace $376,000 Power House and Hydroelectric System $3,250,000 Access Road $1,231,000 Electrical Transmission $1,852,000 Miscellaneous Items $425,000 Construction Subtotal $17,486,000 Bonding and Insurance $874,000 Construction Engineering and Administration $1,102,000 25% Contingency $4,865,000 Total Construction Project Cost $24,327,000 Preconstruction Costs (Survey, Geotechnical, Environmental, Design, Permitting $1,703,000 Total Development Costs $26,030,000 7.2.4 Kogoluktuk River The total cost to design and construct the Kogoluktuk River hydro project is estimated to be $38.7M, as shown below. This estimate is based on the conceptual-level design plans included in Appendix C. A detailed breakdown of the construction cost is included in Appendix D. Section 7 Life-Cycle Cost Analysis Feasibility Study and Conceptual Design Report Page 59 Cosmos Hills Hydro Feasibility Table 7-4: Kogoluktuk River Project - Conceptual-Level Development Cost Estimate Item Description Cost Mobilization $2,340,000 Diversion and Intake Structures $3,200,000 Penstock $9,860,000 Tailrace $140,000 Power House and Hydroelectric System $3,300,000 Access Road $4,038,000 Electrical Transmission $2,974,000 Miscellaneous Items $275,000 Construction Subtotal $26,127,000 Bonding and Insurance $1,306,000 Construction Engineering and Administration $1,097,000 25% Contingency $7,133,000 Total Construction Project Cost $35,663,000 Preconstruction Costs (Survey, Geotechnical, Environmental, Design, Permitting $2,997,000 Total Development Costs $38,660,000 7.2.5 Operation and Maintenance (O&M) Costs Operation and Maintenance (O&M) costs for the hydro projects are estimated on an annualized basis at the rate of 0.5% of the total project cost. The breakdown by project is shown below. Table 7-5: Operations and Maintenance Costs Project Annual Cost Wesley Creek $68,100 Dahl Creek $76,200 Combined Wesley Creek and Dahl Creek $130,100 Kogoluktuk River $193,300 7.3 Lifecycle Evaluation 7.3.1 Economic Analysis The results of the operational model were used to compare the proposed alternative electric generation scenarios and determine which development scenarios were beneficial. The following summarizes the general assumptions and basic modeling methods that were used to determine the net project benefits and costs. Section 7 Life-Cycle Cost Analysis Feasibility Study and Conceptual Design Report Page 60 Cosmos Hills Hydro Feasibility Economic Assumptions • 2013 Dollars. All numbers are reported in 2013 dollars. • Discount Rate. A discount rate of 2.5% was selected to discount future benefits to 2013 dollars. The selection of the discount rate is based on the recently completed Southeast Integrated Resource Plan prepared by Black and Veatch for AEA. • Term of Analysis. The term of analysis is 50 years, consistent with other AEA hydro analyses. • Ambler Intertie Benefits Excluded. The Ambler Intertie has a positive net present value (benefit/cost >1) whether or not the hydro projects are constructed. Including those benefits and costs would greatly increase benefit/cost ratios for each of the hydro projects; all project scenarios would look much better. However, doing so would also make it difficult to determine what portion of the positive benefits occurs because of the hydro projects, and what portion occurred because of the intertie. Therefore, the benefits and costs specific to that intertie are not included in the analysis. Specifically, capital costs for intertie construction, intertie operation and maintenance costs, and avoided power plant benefits are not included in the economic analysis explained below. • Environmental Flows. Permitting agencies may require a minimum flow be released over a project’s diversion dam to maintain water levels in the stream between the intake and tailrace. The flows could be required to support fish in that area or for other environmental purposes. These flows would decrease the water available to the hydro projects. Until detailed permitting and design is completed, the required environmental flow for each project, if any, is unknown. Yet the flows have a significant effect on project economics. They decrease the water available for the project, decrease the electricity output, and decrease project benefits. For this analysis, the economic benefits are modeled in two ways: first, assuming no required environmental flow; and second, assuming environmental flows as described in section 6. While the analysis presents results using two scenarios  with and without environmental flows  the actual required number could be between those two, or perhaps more than what was modeled. If appropriate mitigation were found, perhaps no environmental flows would be required. Load Assumptions • Conservative load growth assumed. The analysis assumes a 1% continuous load growth. This is a conservative assumption for a number of reasons. For the last five years, electric load has grown faster than this report projects. It has grown at 1.4% (see Table 5-4). Also, the hydro projects would decrease electricity costs. The analysis does not assume that the decreased cost causes additional demand. Finally, these villages are relatively poor. While most households have water and sewer, a few still haul water or use a “honey bucket” (See Section 3.5). Electricity use in these villages is low by typical American standards. A 1% electric growth rate means that in 50 years, village use will still be below typical 2013 American use, even for rural communities. This low load growth is consistent with the villages remaining Section 7 Life-Cycle Cost Analysis Feasibility Study and Conceptual Design Report Page 61 Cosmos Hills Hydro Feasibility relatively poor with few services for 50 years. It is difficult to believe that the villages will remain in place essentially unchanged for 50 years. Despite these issues, the analysis uses a conservative 1% growth rate to ensure that it does not over predict benefits. A higher growth rate would increase the benefits of the projects. • Existing and Likely Mineral Exploration Load Excluded. NANA and NovaCopper, Inc. are exploring for minerals in the region of the potential hydro projects. Both companies have indicated that if hydro projects are constructed and the villages have excess hydro capacity, the exploration operation would make use of the electricity. Thus, mineral exploration has potential to add significant electric load. While the existing mineral exploration could end at any time, the region has been explored off and on for many decades. There is no reason to believe that even if this exploration operation ends, that periodic mineral exploration will suddenly stop. Given NANA’s aggressive marketing of its property and the historic interest in the area, it is likely that this mineral district – like others across the state – will see continued, if perhaps periodic, mineral exploration during the 50-year time horizon of the economic analysis. If so, the exploration is likely to add significantly to the projected loads. Including potential estimates of these loads would increase the benefits of the hydro projects, especially for the Kogoluktuk Project. However, the timing and amount of the electric needs over the 50-year horizon is unknown. Therefore, potential mineral exploration load increases are excluded from the analysis. Given the likelihood of at least periodic mineral exploration over the 50-year horizon, the loads used in this analysis likely under predict the true electric load, at least during some years. • Speculative Mineral Development and Road-induced Load Growth Excluded. It is possible that an actual mine may be developed in the region. In addition, Alaska’s roads-to-resources program is planning for a road in the region. Both would increase electric loads in the region. However, both developments are speculative at this point. For that reason, electric demand that would be created by mining development or from a regional road is excluded from the analysis. Fuel Price Assumptions • The analysis uses fuel prices from ISER Medium and High Case. As explained in Section 5.3.1, the ISER projections likely under predict fuel prices because they are based on a historic ratio of barge/air fuel delivery. Unfortunately, that ratio has changed and fuel prices will therefore be significantly higher. The AVEC 2013 case is intended to rectify this issue. Electricity for Heat • From mid-May through December, the Kogoluktuk Project can generate much more electricity than the communities can use. At the same time, facilities  such as the water/sewer system and the washeteria  and homes burn fuel oil for heat. The excess electric generating capacity can be used as an interruptible power source for electric heat. The effect of electric heat is discussed separately in the analysis that follows. Section 7 Life-Cycle Cost Analysis Feasibility Study and Conceptual Design Report Page 62 Cosmos Hills Hydro Feasibility For each hydro project, the economic analysis analyzes 12 scenarios: three alternative fuel cases, two environmental flows (with and without required by-pass flows), and two intertie connections (with and without the Ambler Intertie). These scenarios were analyzed using the daily operational model to determine the annual savings provided by the development over the analysis term. Two tables below show the information needed to construct the benefit/cost ratio. Table 7-6 shows the Net Present Value of the hydro projects’ savings, excluding heating value, for each scenario. Table 7-7 shows the Net Present Cost of each project. Table 7-6: Net Present Value of Hydro Project Benefits, Millions of 2013 $ Fuel Case Environmental Flow Intertie Wesley Dahl Wesley plus Dahl Kogoluktuk ISER Medium Fuel Case No No 12.5 15.0 19.2 32.4 ISER High Fuel Case No No 17.3 20.7 26.4 44.6 AVEC Fuel Case No No 16.3 19.6 24.8 41.9 ISER Medium Fuel Case Yes No 10.9 12.4 15.6 20.6 ISER High Fuel Case Yes No 15.1 17.2 21.4 28.4 AVEC Fuel Case Yes No 14.3 16.2 20.1 26.7 ISER Medium Fuel Case No Yes 12.5 15.0 21.9 39.2 ISER High Fuel Case No Yes 16.9 20.3 29.4 52.7 AVEC Fuel Case No Yes 17.4 20.8 30.0 53.9 ISER Medium Fuel Case Yes Yes 11.0 12.8 18.6 26.9 ISER High Fuel Case Yes Yes 14.9 17.3 25.0 36.1 AVEC Fuel Case Yes Yes 15.3 17.8 25.5 36.8 Table 7-7: Net Present Value of Hydro Project Cost, Millions of 2013 $ Fuel Case Environmental Flow Intertie Wesley Dahl Wesley plus Dahl Kogoluktuk ISER Medium Fuel Case No No 13.7 15.3 26.1 37.8 ISER High Fuel Case No No 13.7 15.3 26.1 37.8 AVEC Fuel Case No No 13.7 15.3 26.1 37.8 ISER Medium Fuel Case Yes No 13.7 15.3 26.1 37.8 ISER High Fuel Case Yes No 13.7 15.3 26.1 37.8 AVEC Fuel Case Yes No 13.7 15.3 26.1 37.8 ISER Medium Fuel Case No Yes 13.7 15.3 26.1 37.8 ISER High Fuel Case No Yes 13.7 15.3 26.1 37.8 AVEC Fuel Case No Yes 13.7 15.3 26.1 37.8 ISER Medium Fuel Case Yes Yes 13.7 15.3 26.1 37.8 ISER High Fuel Case Yes Yes 13.7 15.3 26.1 37.8 AVEC Fuel Case Yes Yes 13.7 15.3 26.1 37.8 Section 7 Life-Cycle Cost Analysis Feasibility Study and Conceptual Design Report Page 63 Cosmos Hills Hydro Feasibility 7.3.2. Project Comparison The tables below show the economic conclusions for the 12 project scenarios. Conclusions are shown in two ways: benefit/cost ratio and net present cost of power. The two methods present two different viewpoints on project benefits. Benefit/Cost Ratio presents the results from the viewpoint of an investor. Are the benefits greater than the cost (i.e., B/C >1)? If so, which project returns the best multiple for each dollar invested? The Net Present Cost of Power is different. The Net Present Cost of Power presents the results from the viewpoint of a consumer. Which of the projects (including diesel – the no hydro alternative) provides the lowest cost of power? Table 7-8: Hydro Project Benefit to Cost Ratios Fuel Case Environmental Flow Intertie Wesley Dahl Wesley plus Dahl Kogoluktuk ISER Medium Fuel Case No No 0.92 0.98 0.73 0.86 ISER High Fuel Case No No 1.27 1.36 1.01 1.18 AVEC Fuel Case No No 1.20 1.28 0.95 1.11 ISER Medium Fuel Case Yes No 0.80 0.81 0.60 0.55 ISER High Fuel Case Yes No 1.11 1.12 0.82 0.75 AVEC Fuel Case Yes No 1.04 1.06 0.77 0.71 ISER Medium Fuel Case No Yes 0.92 0.98 0.84 1.04 ISER High Fuel Case No Yes 1.24 1.33 1.13 1.40 AVEC Fuel Case No Yes 1.27 1.36 1.15 1.43 ISER Medium Fuel Case Yes Yes 0.81 0.84 0.71 0.71 ISER High Fuel Case Yes Yes 1.09 1.13 0.96 0.96 AVEC Fuel Case Yes Yes 1.12 1.16 0.98 0.97 Table 7-9: Net Present Cost of Electric Generation, Millions of 2013 $ Fuel Case Environ. Flow Intertie NPC Diesel Wesley Dahl Wesley plus Dahl Kogoluktuk ISER Medium Fuel Case No No 83.2 84.3 83.5 90.2 88.6 ISER High Fuel Case No No 105.8 102.1 100.3 105.5 98.9 AVEC Fuel Case No No 103.9 101.2 99.6 105.1 99.7 ISER Medium Fuel Case Yes No 83.2 86.0 86.1 93.7 100.4 ISER High Fuel Case Yes No 105.8 104.3 103.9 110.5 115.1 AVEC Fuel Case Yes No 103.9 103.3 103.0 109.8 114.9 ISER Medium Fuel Case No Yes 73.1 74.3 73.4 77.3 71.7 ISER High Fuel Case No Yes 91.5 88.2 86.5 88.1 76.5 AVEC Fuel Case No Yes 93.5 89.7 87.9 89.5 77.3 ISER Medium Fuel Case Yes Yes 73.1 75.8 75.6 80.6 84.0 ISER High Fuel Case Yes Yes 91.5 90.2 89.4 92.5 93.1 AVEC Fuel Case Yes Yes 93.5 91.8 91.0 94.0 94.4 Section 7 Life-Cycle Cost Analysis Feasibility Study and Conceptual Design Report Page 64 Cosmos Hills Hydro Feasibility The two tables show that a hydro project is the best alternative for 9 of the 12 scenarios. The only three scenarios where diesel remains the best alternative is for the ISER Medium fuel case with required environmental flows, both with and without an intertie. Also, the combination project that includes both Wesley and Dahl Creeks is never the best alternative. The tables also show the importance of environmental flows. The required environmental flows increase the Net Cost of Power and decrease Benefit/Cost ratios. This conclusion is true even for scenarios where the project remains economically viable with environmental flows. Unfortunately, the actual agency-required environmental flows will not be known until permitting is finished. Agencies could require a lower volume than the economic model assumes, or possible a higher volume. It is even possible that if appropriate mitigation were found, no environmental flow would be required. Table 7-8, Benefit/Cost Ratios, shows that if the Ambler Intertie is not constructed the Dahl project has the highest Benefit/Cost ratio. The Kogoluktuk has a lower benefit/cost ratio than the other two projects if the intertie is not constructed and environmental flows are required. That is not a surprising conclusion. The Kogoluktuk is a larger project and is best with a larger load: i.e., the Ambler Intertie. Table 7-9 describes the Net Present Cost of Power. The table compares the projects from a consumer point of view – which one has the lowest cost of power. That is why this table includes the cost of power for continued diesel generation. From this viewpoint, the Dahl Creek project produces the lowest power cost in 5 of the 12 scenarios. The Kogoluktuk River project produces the lowest power cost in 4 of the scenarios. Diesel would be the least expensive in 3 of the scenarios. Finally, the two tables model conservative economic assumptions. They assume a 1% load growth even though the most recent five years for the three villages show a growth rate that is 40% higher (1.4%). The load growth is conservative in that it excludes the potential for mineral exploration, even though periodic mineral exploration has occurred in the area for the last few decades and is expected at least periodically in the future, even if the current exploration ceases. In addition, the tables model conservative economic assumptions in that they exclude the value of using hydro for heat. All three hydro projects have some periods of the year when they can produce electricity in excess of electric demand. That excess electricity has significant value in the form of the avoided cost of heating oil used. Table 7-10 describes the effect of including the heat value of “excess” electricity. The tables assume a price of $7/gallon price for heating fuel, escalating at the same rate as the fuel oil case. (The price in Ambler is currently $7/gallon; in Shungnak, $10/gallon). They assume a conversion efficiency of fuel oil stoves at 80%. Given these parameters, the value of avoided space heat is $0.22/kWh, when it can be used. The analysis limits the community demand for electric heat based on heating-degree days. During some months, the Kogoluktuk project can produce more than the heating-degree day demand would warrant. In this case, some electricity is treated as truly excess (zero value). Also, given electric load growth in the Section 7 Life-Cycle Cost Analysis Feasibility Study and Conceptual Design Report Page 65 Cosmos Hills Hydro Feasibility communities, the amount of electricity that can be used for heat decreases throughout the project life. Table 7-10 shows the net present value of using electricity as heat. Table 7-10: Net Present Value of Using “Excess” Electricity for Heat, Millions of 2013 $ Fuel Case Environmental Flow Intertie Wesley Dahl Wesley plus Dahl Kogoluktuk ISER Medium Fuel Case No No 1.5 1.8 4.2 10.3 ISER High Fuel Case No No 2.1 2.4 5.6 13.9 AVEC Fuel Case No No 1.7 2.1 4.7 11.8 ISER Medium Fuel Case Yes No 1.4 1.7 4.0 7.7 ISER High Fuel Case Yes No 1.8 2.3 5.4 10.3 AVEC Fuel Case Yes No 1.5 2.0 4.5 8.7 ISER Medium Fuel Case No Yes 0.0 0.1 3.6 8.4 ISER High Fuel Case No Yes 0.1 0.1 4.9 11.4 AVEC Fuel Case No Yes 0.1 0.1 4.1 9.6 ISER Medium Fuel Case Yes Yes 0.0 0.0 3.4 7.9 ISER High Fuel Case Yes Yes 0.1 0.1 4.5 10.7 AVEC Fuel Case Yes Yes 0.1 0.1 3.8 9.0 The table shows that the heat value of this otherwise excess electricity has significant economic value. Interruptible electric heat can be used by community facilities such as the water/sewer system and the washeteria. If there is enough available, it could be used as interruptible space heat for facilities and residences. Not surprisingly, the Kogoluktuk can produce much greater heating value than the other two projects. The table also shows that if, as expected, the Ambler Intertie is constructed, the electric load uses essentially all the electricity from the two smaller projects. The Kogoluktuk project is much larger. It produces a lot of electricity that is excess to the communities’ consumption, even with the Ambler Intertie. Table 7-11 shows the effect of heat value on the Benefit/Cost ratios. Section 7 Life-Cycle Cost Analysis Feasibility Study and Conceptual Design Report Page 66 Cosmos Hills Hydro Feasibility Table 7-11: Hydro Project Benefit to Cost Ratios, including the Heat Value of Electricity Fuel Case Environmental Flow Intertie Wesley Dahl Wesley plus Dahl Kogoluktuk ISER Medium Fuel Case No No 1.13 1.18 0.97 1.23 ISER High Fuel Case No No 1.56 1.63 1.33 1.68 AVEC Fuel Case No No 1.45 1.52 1.23 1.54 ISER Medium Fuel Case Yes No 0.99 0.99 0.81 0.81 ISER High Fuel Case Yes No 1.36 1.37 1.11 1.11 AVEC Fuel Case Yes No 1.27 1.27 1.03 1.02 ISER Medium Fuel Case No Yes 1.01 1.06 1.06 1.37 ISER High Fuel Case No Yes 1.37 1.43 1.43 1.84 AVEC Fuel Case No Yes 1.40 1.47 1.42 1.83 ISER Medium Fuel Case Yes Yes 0.89 0.90 0.92 1.00 ISER High Fuel Case Yes Yes 1.20 1.22 1.23 1.34 AVEC Fuel Case Yes Yes 1.24 1.25 1.22 1.32 The table shows that if the Ambler Intertie is constructed, as expected, the Kogoluktuk project is always the preferred project (although in the ISER Medium Fuel Case scenario, the ratio is only 1.00). The Kogoluktuk River Project is preferred even with environmental flows. Finally, including heat as a benefit shows some high Benefit/Cost ratios – up to 1.84! 7.4 Project Summary Summary Life Cycle project sheets detailing the cost and benefits and FY 2013 daily operational of each project, without potential environmental flows, are shown below. Section 7 Life-Cycle Cost Analysis Feasibility Study and Conceptual Design Report Page 67 Cosmos Hills Hydro Feasibility Exhibit 7-1: Wesley Creek Hydroelectric Project Summary Ambler-Shungnak Intertie Constructed, No Environmental Flows, AVEC 2013 Fuel Case Development Scheme Design Flow 15 cfs Static Head 292 ft Installed hydro capacity 260 kW Annual Energy Potential 1,000,000 kWh Design/Permitting Start 7/1/2014 Project Online Date 7/1/2018 Total Installed Cost $13,619,000 Annual O&M Cost $68,100 Net Present Cost (NPC 2013) $13.7M 50 yr term, 2.5% discount rate Resultant Cost Savings FY 2013 (year 0) FY 2038 (year 25) FY 2063 (year 50) Energy Demand, kWh 2,936,651 3,766,056 4,829,710 Displaced Diesel Energy, kWh 950,288 1,001,689 1,002,466 Hydro Penetration 32% 27% 21% Displaced Diesel Fuel, gal 69,720 75,491 76,645 Displaced Fuel Value (2013 $) $491,780 $402,388 $335,023 Displaced Nonfuel Value (2013 $) $4,560 $0 $0 Heating Potential, kWh 52,178 777 0 Net Present Value (NPV 2013) $17.4M 50 yr term, 2.5% discount rate Benefit to Cost Ratio 1.27 0 200 400 600 800 1000 1200 1400 1600 1800 2000 9/1 10/1 11/1 12/1 1/1 2/1 3/1 4/1 5/1 6/1 7/1 8/1Power (kW)Day of Year Operational Chart, FY 2013 Diesel for Heat Diesel for Electricity Hydropower for Heat, kW Hydropower for Electricity Hydropower Output Avg Electrical Demand Heat + Electrical Demand Section 7 Life-Cycle Cost Analysis Feasibility Study and Conceptual Design Report Page 68 Cosmos Hills Hydro Feasibility Ambler-Shungnak Intertie Constructed, Environmental Flows Required, AVEC Fuel Case Development Scheme Design Flow 15 cfs Static Head 292 ft Installed hydro capacity 260 kW Annual Energy Potential 880,000 kWh Design/Permitting Start 7/1/2014 Project Online Date 7/1/2018 Total Installed Cost $13,619,000 Annual O&M Cost $68,100 Net Present Cost (NPC 2013) $13.7M 50 yr term, 2.5% discount rate Resultant Cost Savings FY 2013 (year 0) FY 2038 (year 25) FY 2063 (year 50) Energy Demand, kWh 2,936,651 3,766,056 4,829,710 Displaced Diesel Energy, kWh 828,655 875,431 876,117 Hydro Penetration 28% 23% 18% Displaced Diesel Fuel, gal 60,796 66,466 67,614 Displaced Fuel Value (2013 $) $428,834 $354,283 $295,546 Displaced Nonfuel Value (2013 $) $4,332 $0 $0 Heating Potential, kWh 47,461 686 0 Net Present Value (NPV 2013) $15.3M 50 yr term, 2.5% discount rate Benefit to Cost Ratio 1.12 0 200 400 600 800 1000 1200 1400 1600 1800 2000 9/1 10/1 11/1 12/1 1/1 2/1 3/1 4/1 5/1 6/1 7/1 8/1Power (kW)Day of Year Operational Chart, FY 2013 Diesel for Heat Diesel for Electricity Hydropower for Heat, kW Hydropower for Electricity Hydropower Output Avg Electrical Demand Heat + Electrical Demand Section 7 Life-Cycle Cost Analysis Feasibility Study and Conceptual Design Report Page 69 Cosmos Hills Hydro Feasibility Exhibit 7-2: Dahl Creek Hydroelectric Project Summary Ambler-Shungnak Intertie Constructed, No Environmental Flows, AVEC 2013 Fuel Case Development Scheme Design Flow 16 cfs Static Head 257 ft Installed hydro capacity 230 kW Annual Energy Potential 1,210,000 kWh Design/Permitting Start 7/1/2014 Project Online Date 7/1/2018 Total Installed Cost $15,247,000 Annual O&M Cost $76,200 Net Present Cost (NPC 2013) $15.3M 50 yr term, 2.5% discount rate Resultant Cost Savings FY 2013 (year 0) FY 2038 (year 25) FY 2063 (year 50) Energy Demand, kWh 2,936,651 3,766,056 4,829,710 Displaced Diesel Energy, kWh 1,136,595 1,211,730 1,212,274 Hydro Penetration 39% 32% 25% Displaced Diesel Fuel, gal 83,389 90,504 91,642 Displaced Fuel Value (2013 $) $588,195 $482,416 $400,576 Displaced Nonfuel Value (2013 $) $8,664 $0 $0 Heating Potential, kWh 75,679 544 0 Net Present Value (NPV 2013) $20.8M 50 yr term, 2.5% discount rate Benefit to Cost Ratio 1.36 0 200 400 600 800 1000 1200 1400 1600 1800 2000 9/1 10/1 11/1 12/1 1/1 2/1 3/1 4/1 5/1 6/1 7/1 8/1Power (kW)Day of Year Operational Chart, FY 2013 Diesel for Heat Diesel for Electricity Hydropower for Heat, kW Hydropower for Electricity Hydropower Output Avg Electrical Demand Heat + Electrical Demand Section 7 Life-Cycle Cost Analysis Feasibility Study and Conceptual Design Report Page 70 Cosmos Hills Hydro Feasibility Ambler-Shungnak Intertie Constructed, Environmental Flows Required, AVEC Fuel Case Development Scheme Design Flow 16 cfs Static Head 257 ft Installed hydro capacity 230 kW Annual Energy Potential 1,030,000 kWh Design/Permitting Start 7/1/2014 Project Online Date 7/1/2018 Total Installed Cost $15,247,000 Annual O&M Cost $76,200 Net Present Cost (NPC 2013) $15.3M 50 yr term, 2.5% discount rate Resultant Cost Savings FY 2013 (year 0) FY 2038 (year 25) FY 2063 (year 50) Energy Demand, kWh 2,936,651 3,766,056 4,829,710 Displaced Diesel Energy, kWh 964,862 1,025,266 1,025,609 Hydro Penetration 33% 27% 21% Displaced Diesel Fuel, gal 70,790 77,176 78,299 Displaced Fuel Value (2013 $) $499,322 $411,371 $342,254 Displaced Nonfuel Value (2013 $) $5,700 $0 $0 Heating Potential, kWh 60,746 343 0 Net Present Value (NPV 2013) $17.8M 50 yr term, 2.5% discount rate Benefit to Cost Ratio 1.16 0 200 400 600 800 1000 1200 1400 1600 1800 2000 9/1 10/1 11/1 12/1 1/1 2/1 3/1 4/1 5/1 6/1 7/1 8/1Power (kW)Day of Year Operational Chart, FY 2013 Diesel for Heat Diesel for Electricity Hydropower for Heat, kW Hydropower for Electricity Hydropower Output Avg Electrical Demand Heat + Electrical Demand Section 7 Life-Cycle Cost Analysis Feasibility Study and Conceptual Design Report Page 71 Cosmos Hills Hydro Feasibility Exhibit 7-3: Wesley + Dahl Hydroelectric Project Summary Ambler-Shungnak Intertie Constructed, No Environmental Flows, AVEC 2013 Fuel Case Development Scheme Design Flow #N/A cfs Static Head #N/A ft Installed hydro capacity 490 kW Annual Energy Potential 2,210,000 kWh Design/Permitting Start 7/1/2014 Project Online Date 7/1/2018 Total Installed Cost $26,030,000 Annual O&M Cost $130,100 Net Present Cost (NPC 2013) $26.1M 50 yr term, 2.5% discount rate Resultant Cost Savings FY 2013 (year 0) FY 2038 (year 25) FY 2063 (year 50) Energy Demand, kWh 2,936,651 3,766,056 4,829,710 Displaced Diesel Energy, kWh 1,455,025 1,651,554 1,899,913 Hydro Penetration 50% 44% 39% Displaced Diesel Fuel, gal 106,752 121,943 140,794 Displaced Fuel Value (2013 $) $752,985 $649,992 $615,425 Displaced Nonfuel Value (2013 $) $70,452 $36,179 $21,933 Heating Potential, kWh 669,039 536,504 310,202 Net Present Value (NPV 2013) $30.0M 50 yr term, 2.5% discount rate Benefit to Cost Ratio 1.15 0 200 400 600 800 1000 1200 1400 1600 1800 2000 9/1 10/1 11/1 12/1 1/1 2/1 3/1 4/1 5/1 6/1 7/1 8/1Power (kW)Day of Year Operational Chart, FY 2013 Diesel for Heat Diesel for Electricity Hydropower for Heat, kW Hydropower for Electricity Hydropower Output Avg Electrical Demand Heat + Electrical Demand Section 7 Life-Cycle Cost Analysis Feasibility Study and Conceptual Design Report Page 72 Cosmos Hills Hydro Feasibility Ambler-Shungnak Intertie Constructed, Environmental Flows Required, AVEC Fuel Case Development Scheme Design Flow #N/A cfs Static Head #N/A ft Installed hydro capacity 490 kW Annual Energy Potential 1,900,000 kWh Design/Permitting Start 7/1/2014 Project Online Date 7/1/2018 Total Installed Cost $26,030,000 Annual O&M Cost $130,100 Net Present Cost (NPC 2013) $26.1M 50 yr term, 2.5% discount rate Resultant Cost Savings FY 2013 (year 0) FY 2038 (year 25) FY 2063 (year 50) Energy Demand, kWh 2,936,651 3,766,056 4,829,710 Displaced Diesel Energy, kWh 1,202,651 1,383,460 1,633,271 Hydro Penetration 41% 37% 34% Displaced Diesel Fuel, gal 88,236 102,780 121,735 Displaced Fuel Value (2013 $) $622,379 $547,846 $532,115 Displaced Nonfuel Value (2013 $) $67,488 $33,316 $19,014 Heating Potential, kWh 636,514 501,240 266,730 Net Present Value (NPV 2013) $25.5M 50 yr term, 2.5% discount rate Benefit to Cost Ratio 0.98 0 200 400 600 800 1000 1200 1400 1600 1800 2000 9/1 10/1 11/1 12/1 1/1 2/1 3/1 4/1 5/1 6/1 7/1 8/1Power (kW)Day of Year Operational Chart, FY 2013 Diesel for Heat Diesel for Electricity Hydropower for Heat, kW Hydropower for Electricity Hydropower Output Avg Electrical Demand Heat + Electrical Demand Section 7 Life-Cycle Cost Analysis Feasibility Study and Conceptual Design Report Page 73 Cosmos Hills Hydro Feasibility Exhibit 7-4: Kogoluktuk River Hydroelectric Project Summary Ambler-Shungnak Intertie Constructed, No Environmental Flows, AVEC 2013 Fuel Case Development Scheme Design Flow 170 cfs Static Head 64 ft Installed hydro capacity 690 kW Annual Energy Potential 4,940,000 kWh Design/Permitting Start 7/1/2014 Project Online Date 7/1/2019 Total Installed Cost $38,660,000 Annual O&M Cost $193,300 Net Present Cost (NPC 2013) $37.8M 50 yr term, 2.5% discount rate Resultant Cost Savings FY 2013 (year 0) FY 2038 (year 25) FY 2063 (year 50) Energy Demand, kWh 2,936,651 3,766,056 4,829,710 Displaced Diesel Energy, kWh 2,631,909 3,102,617 3,546,205 Hydro Penetration 90% 82% 73% Displaced Diesel Fuel, gal 193,097 225,664 258,471 Displaced Fuel Value (2013 $) $1,362,030 $1,202,859 $1,129,800 Displaced Nonfuel Value (2013 $) $100,092 $62,436 $72,347 Heating Potential, kWh 1,523,714 1,245,315 1,013,422 Net Present Value (NPV 2013) $53.9M 50 yr term, 2.5% discount rate Benefit to Cost Ratio 1.43 0 200 400 600 800 1000 1200 1400 1600 1800 2000 9/1 10/1 11/1 12/1 1/1 2/1 3/1 4/1 5/1 6/1 7/1 8/1Power (kW)Day of Year Operational Chart, FY 2013 Diesel for Heat Diesel for Electricity Hydropower for Heat, kW Hydropower for Electricity Hydropower Output Avg Electrical Demand Heat + Electrical Demand Section 7 Life-Cycle Cost Analysis Feasibility Study and Conceptual Design Report Page 74 Cosmos Hills Hydro Feasibility Ambler-Shungnak Intertie Constructed, Environmental Flows Required, AVEC Fuel Case Development Scheme Design Flow 170 cfs Static Head 64 ft Installed hydro capacity 690 kW Annual Energy Potential 3,800,000 kWh Design/Permitting Start 7/1/2014 Project Online Date 7/1/2019 Total Installed Cost $38,660,000 Annual O&M Cost $193,300 Net Present Cost (NPC 2013) $37.8M 50 yr term, 2.5% discount rate Resultant Cost Savings FY 2013 (year 0) FY 2038 (year 25) FY 2063 (year 50) Energy Demand, kWh 2,936,651 3,766,056 4,829,710 Displaced Diesel Energy, kWh 1,669,835 2,042,405 2,473,613 Hydro Penetration 57% 54% 51% Displaced Diesel Fuel, gal 122,512 149,881 181,802 Displaced Fuel Value (2013 $) $864,150 $798,910 $794,675 Displaced Nonfuel Value (2013 $) $89,376 $58,826 $69,700 Heating Potential, kWh 1,353,280 1,173,019 953,506 Net Present Value (NPV 2013) $36.8M 50 yr term, 2.5% discount rate Benefit to Cost Ratio 0.97 0 200 400 600 800 1000 1200 1400 1600 1800 2000 9/1 10/1 11/1 12/1 1/1 2/1 3/1 4/1 5/1 6/1 7/1 8/1Power (kW)Day of Year Operational Chart, FY 2013 Diesel for Heat Diesel for Electricity Hydropower for Heat, kW Hydropower for Electricity Hydropower Output Avg Electrical Demand Heat + Electrical Demand Section 8 Project Development Issues Feasibility Study and Conceptual Design Report Page 75 Cosmos Hills Hydro Feasibility 8. PROJECT DEVELOPMENT ISSUES 8.1 Land Ownership 8.1.1 Wesley Creek The Wesley Creek project would be completely within NANA-owned lands. No Native Allotments, private parcels, or active mining claims were identified that would need to be impacted. The road to Bornite crosses through the project, but the ROW is controlled by NANA. 8.1.2 Dahl Creek The Dahl Creek project would be completely within NANA-owned lands. No Native Allotments, private parcels, or active mining claims were identified that would need to be impacted. 8.1.3 Kogoluktuk River The Kogoluktuk River project would be designed to stay completely within NANA-owned lands. The access road to the project would need to be routed to avoid crossing the State- owned Dahl Creek runway and a Native Allotment located to the east of the runway. No private parcels or active mining claims were identified that would need to be impacted 8.2 Permitting Permitting requirements were not determined as part of this study. 8.3 Federal Energy Regulatory Commission (FERC) Requirements 8.3.1 Wesley Creek The report prepared by Solstice Alaska Consulting Inc. titled, “FERC Requirements and Field Study Recommendations,” and dated March 30, 2010 stated that a number of the Cosmos Hills Hydroelectric projects could fall under a FERC exemption from licensing. While not specifically listed in the report, the Wesley Creek project is very similar in type and size to the others listed. The Wesley Creek project would likely be exempt from FERC licensing. 8.3.2 Dahl Creek The Solstice report specifically listed the Dahl Creek project as one that could fall under a FERC exemption from licensing. The Dahl Creek project would likely be exempt from FERC licensing. Section 8 Project Development Issues Feasibility Study and Conceptual Design Report Page 76 Cosmos Hills Hydro Feasibility 8.3.3 Kogoluktuk River In 2009, AVEC secured a Preliminary Permit from the FERC for developing hydroelectric projects on the Kogoluktuk and Shungnak Rivers. Those projects were both large dam projects, and if developed as originally proposed, would fall under FERC’s licensing process. However, Solstice’s report stated that smaller projects on these rivers could be exempt. The current Kogoluktuk River project is much more similar to the ones listed than to the original project. A recent review of the FERC requirements and further research of the Kogoluktuk River revealed that the Kogoluktuk River, near the powerhouse, was determined to be a Navigable Water by the Bureau of Land Management (BLM). Just upstream of the powerhouse, the river has been determined to be non-navigable. Although some recreational use by whitewater rafters is reported, it is noted that flows during the summer are well above the hydraulic capacity of the proposed project which allows for continued utilization as a whitewater rafting reach. Signage upstream of the diversion dam could warn potential users of the hazard. Because a small piece of the project is located on navigable waters of the United States, it could be required to follow the FERC’s licensing process. However, because the project would have such a minimal impact to the Kogoluktuk River, it is likely that it would be exempt. 8.4 Environmental 8.4.1 Wesley Creek The fisheries study found Dolly Varden and slimy sculpin in Wesley Creek. The resident fish population in the bypassed reach of the creek will likely result in the establishment of minimum flows for environmental preservation. Rather than having an environmental reservation established or determined at this point, the economic modeling performed included scenarios with and without a presumed flow reservation equal to 12 percent of the average annual stream flow. 8.4.2 Dahl Creek The fisheries study found Dolly Varden in Dahl Creek. The resident fish population in the bypassed reach of the creek will likely result in the establishment of minimum flows for environmental preservation. Rather than having an environmental reservation established or determined at this point, the economic modeling performed included scenarios with and without a presumed flow reservation equal to 12 percent of the average annual stream flow. 8.4.3 Kogoluktuk River The fisheries study found numerous resident fish species in the Kogoluktuk River, including Dolly Varden, slimy sculpin, arctic grayling, northern pike, and round whitefish. The section of Kogoluktuk River just above the powerhouse site is thought to be a velocity barrier for anadromous fish, as chum salmon were found below the powerhouse site but not above. The Section 8 Project Development Issues Feasibility Study and Conceptual Design Report Page 77 Cosmos Hills Hydro Feasibility resident fish population in the bypassed reach of the river will likely result in the establishment of minimum flows for environmental preservation. Rather than having an environmental reservation established or determined at this point, the economic modeling performed included scenarios with and without a presumed flow reservation equal to 8 percent of the average annual stream flow. 8.5 Constructability 8.5.1 Wesley Creek The Wesley Creek project will be a fairly straight-forward construction project. Access to much of the project site already exists. A considerable portion is along the existing Bornite Mine Road. Only a short access road will need to be constructed to the powerhouse site. Difficulties may be encountered during excavations, particularly in the upper reaches of the project. Large boulders are present on the surface near the intake and down to the bridge crossing Bornite Mine Road. Trenching and structure excavations may be slowed by these boulders. 8.5.2 Dahl Creek The Dahl Creek project will also be a fairly straight-forward construction project, but may be a bit more difficult than the Wesley Creek project. Primitive access to much of the project site already exists. Old mining trails follow the creek to the intake location. Difficulties will be constructing the trench and access road through some of the narrow steep valley sections. The penstock also will cross the creek in at least two locations and will require trenching across the creek. 8.5.3 Kogoluktuk River The Kogoluktuk River project will be the most difficult of the three projects. No access to the project area currently exists. A six-mile access road will need to be constructed before any of the other portions of the project can begin. The penstock alignment will follow the river along very steep terrain. An approximately 30- foot wide bench will need to be blasted out of the side of the rock slopes to install the penstock on. This bench will also be used to access the intake location. Once the bench is constructed, the penstock construction will be straight forward. Intake construction will also be more difficult than the other two locations, as the water flow is significantly greater at the Kogoluktuk River and cannot be easily redirected. 8.6 Winter Operations All of the projects are generally expected to be able to operate down to the minimum hydraulic capacity of the turbines during the winter months, so long as water can flow through the intake and out the tailrace. The shoulder seasons of winter will typically be the Section 8 Project Development Issues Feasibility Study and Conceptual Design Report Page 78 Cosmos Hills Hydro Feasibility most difficult in terms of winter operations. In early winter icing in river presents problems and in the spring broken and moving ice can dam up flows. Occasional outages can be expected in the early winter from icing, or aufeis, related events that can prevent water from entering the intake. These events, while minimized, could still occur, precipitated by the onset of cold temperatures. They are likely at their worst when the accumulated heating degree days are unusually high before the formation of an insulating cover of ice and snow over the stream. Aufeis, or icing, forms when water in streams falls below freezing and ice crystals begin to form within the flowing water. The ice crystals adhere to the stream bottom and continue to grow into large masses that obstruct flow. Rivers and streams in this situation are essentially freezing from the “bottom-up.” Within localized areas, flooding from aufeis can extend well beyond the 100-year flood extent. Tailrace discharge potentially can be disrupted by aufeis events as well. The investigation by GWS included remote camera installations that monitored ice buildup during the winter. GWS notes that the station at Wesley Creek and the Kogoluktuk River showed open water leads through most of the winter. Stream reaches that exhibit greater ground water inflow will likely have fewer problems with aufeis. In areas where water is being lost to groundwater flow, aufeis and glacial events can be expected to be worse. In order to improve successful winter operations, it is important to identify locations where open leads are present representing good groundwater inflow support (both Wesley and the Kogoluktuk intakes are located near likely high groundwater inflow locations), promote early ice cover formation for insulation (accomplished by having slack pools of water such as created by the diversion structures), and maintaining flowing conditions in confined channels. These considerations should be evaluated for both the intake and tailrace locations. Section 9 Recommendations and Conclusions Feasibility Study and Conceptual Design Report Page 79 Cosmos Hills Hydro Feasibility 9. RECOMMENDATIONS AND CONCLUSIONS 9.1 Feasible Projects The results of this feasibility study indicate that any of the individual development schemes can offer potential for savings given the right circumstances. 9.1.1 Land Ownership Issues There are no significant ownership or land use issues with the potential hydro projects. Each would be on land owned by NANA Regional Corporation. All of the access routes are on NANA-owned land. None affect any private parcels or mining claims, though the potential road to the Kogoluktuk would need to be routed to avoid the Dahl Creek runway and a Native Allotment. 9.1.2 Permitting/FERC/Environmental Issues None of the projects appear to have serious permitting/FERC/environmental issues. All projects would be obviously or likely exempt from the FERC process. None of the projects have obvious permitting pitfalls, except that the extent of required environmental flows needs to be determined. These flows have a significant effect on the projects’ benefits. Determination of required environmental flows typically occurs during permitting and final design. 9.1.3 Constructability None of the projects have unusual constructability issues. The Wesley and Dahl projects should have a straightforward construction process. Access to much of the Wesley project already exists. Primitive access exists to the Dahl site. The Kogoluktuk would be a little more difficult, because a six-mile access road will need to be constructed before the project can begin construction. In addition, the penstock route will require blasting in steep terrain. The increased cost for this construction is included in the Kugluktuk’s construction estimate. Otherwise, this project also does not present unusual constructability issues. 9.1.4 Sensitivity to Hydrologic Changes The economic analysis and power generation estimates for the three projects are based on the median streamflow. Because the Wesley and Dahl projects use most of the flow in the respective creeks, these two projects are more susceptible to hydrologic fluctuations. In dry years, they would produce less power. In some wet years, possibly more. The Kogoluktuk project is much less sensitive to changes in hydrology. Because this project uses a small amount of a large flow, it is not very sensitive to dry years and has a hydraulic advantage in reducing the amount of debris and sediment diverted into the intake. The river would have to have extremely low flow before it greatly affected the Kogoluktuk output. In addition, wet years would have little effect on the electricity output. The Kogoluktuk’s power output and economic conclusions are therefore somewhat more reliable than the other two projects. Section 9 Recommendations and Conclusions Feasibility Study and Conceptual Design Report Page 80 Cosmos Hills Hydro Feasibility 9.1.5 Economic Feasibility  Excluding Electric Heat As explained in Section 7.3.2, the economic analysis completed for this project uses conservative economic assumptions: it uses conservative load growth, excludes likely mineral exploration loads, and uses two ISER fuel price scenarios which underestimate air deliveries and therefore underestimate likely fuel prices. With these assumptions and electric heat excluded, a hydro project is the best alternative for 9 of the 12 scenarios. If the Ambler Intertie is not constructed, the Dahl project has the highest Benefit/Cost ratio (except for the ISER Medium fuel cases). However, the Kogoluktuk has the lowest cost of power for one of the non-intertie scenarios. If, as expected, the Ambler Intertie is constructed, the Kogoluktuk River project has the lowest Net Cost of Power in three of the six scenarios, with Dahl Creek being better in two scenarios (and the ISER Medium fuel case producing one diesel-best result). 9.1.6 Economic Feasibility  Including Electric Heat Including the value of electric heat from electricity that is surplus to the villages’ electric demand changes the economic conclusions. If the value of electric heat is included, the Kogoluktuk River is the preferred project for all scenarios involving the Ambler Intertie (though the Medium ISER Fuel case has a Benefit/Cost ratio of 1.00). It is the preferred project for three scenarios without the intertie. 9.2 Recommended Project: Kogoluktuk River Hydroelectric Project The smaller projects, Wesley Creek, Dahl Creek, and the combination of those two projects, present a different situation than the Kogoluktuk River Project. For much of the year, the villages will use essentially all of the smaller projects’ output on the day they open. These projects decrease the average cost of electricity, but do nothing for the marginal electricity cost. Significant village growth would still require new diesel-generated electricity. Because PCE payments would decrease with the lower average cost, the project’s benefit would be absorbed by lower PCE payments and result in little benefit to many individual residential consumers. Those residents who use more than 500 kWh/month, the school district, and the very few commercial facilities would all benefit. The Dahl and Wesley Creek projects would likely stabilize electricity cost – the price would not go up with oil price increases, but much of the benefit is absorbed by the state in lower PCE payments. If the smaller projects are built, many residential consumers would be in a very similar situation to their current condition with respect to the effective residential electricity price (after PCE), and the village would not have the ability to attract new businesses with low energy prices. The Kogoluktuk River Hydro Project presents a different situation. It is economically viable using the same assumptions as the smaller projects: i.e., it is not a “build-it-and-they-will- come” project. But the project transforms economic opportunity for the villages. First, the ability to use surplus electricity for heat provides the villages and possibly even residential consumers with significant and direct benefits. Assuming use of surplus electricity for heat, it is the preferred project in all scenarios that include the Ambler Intertie. Second, the project Section 9 Recommendations and Conclusions Feasibility Study and Conceptual Design Report Page 81 Cosmos Hills Hydro Feasibility has excess electric capacity. This means that the marginal cost of electricity is low. It allows the villages to use the potential for low electric prices for commercial and industrial purposes. The other projects do not provide the same opportunity. There are other reasons that the Kogoluktuk River Project is preferred. These include information that is not captured in the economic analysis. The paragraphs below summarize reasons to prefer the Kogoluktuk project over its alternatives. • Direct Benefit to Villages and Residents through Electric Heat. A decrease in electricity rate is accompanied by a decrease in PCE payments. As a result, many residents do not see significantly lower utility bills from projects that focus solely on electricity. The Kogoluktuk project has the ability to generate significant direct and immediate benefits to the villages and residents from using surplus electricity for heat. • Support by Villages and Regional Groups. NANA and AVEC have indicated that they support going forward with the Kogoluktuk project over the other alternatives. NovaCopper, Inc. is expected to concur. In addition, because of the direct benefits to villages, the Kogoluktuk project is expected to get more support from village residents than the alternative projects. This support has a number of benefits. First, the project team expects that this project will be funded by direct legislative appropriation. They expect it to be part of Alaska’s capital budget because it appears to be too large to be funded from the Renewable Energy Fund. Gathering village and regional groups’ support is important for a project’s consideration by the legislature. Second, support by these groups has some role in stabilizing or lower project costs. NANA and NovaCopper, Inc. have provided in-kind support to preliminary investigation of the projects. The potential for in-kind support helps the project with costs and schedule. The potential for support increases if the groups favor the project being built. This potential support is important but is not captured by the economic analysis. • Economic Opportunity for the Villages. Because the Kogoluktuk project can produce electricity beyond the villages’ present electric needs, it provides opportunity for the future. No one knows whether these villages can develop an economic base for themselves. However, the Kogoluktuk project gives them that opportunity, and the other projects do not. This opportunity is important for the villages and is not captured by the economic analysis. • Improves the Potential for Mineral Development. This point is related to the previous point. Mineral development has the potential to provide a missing economic base to the region. Because the Kogoluktuk project, but not the alternative projects, has excess electric generation, it could lower the exploration costs in the region. This has potential to benefit the region in employment and expedited exploration. Section 9 Recommendations and Conclusions Feasibility Study and Conceptual Design Report Page 82 Cosmos Hills Hydro Feasibility • Project is Improved with Less Conservative Load Assumptions. The economic analysis used 1% load growth. Elsewhere, this report explains why that growth projection is conservative. If actual loads grow at a faster rate than forecast, the economic returns (i.e., the Benefit/Cost Ratio) increase more for the Kogoluktuk project than for the alternatives. • Less Sensitivity to Hydrologic Changes. As explained earlier in this section, the electric output of the Kogoluktuk project is much less sensitive to dry years than are the other projects. The Kugluktuk’s power output and economic conclusions are therefore more reliable than the other projects. The benefits of the Kogoluktuk remain stable in dry years when the alternative projects’ benefits are smaller. • Kogoluktuk Project is Expandable. The Kogoluktuk River has much greater flow than Dahl or Wesley Creeks. The Kogoluktuk Project uses only a portion of the flow. In the event that a road comes to the region, a mine is developed, or another large economic opportunity occurs, it may be possible to construct a dam on the river and generate significantly more power. Any expanded project would be an entirely new project, but the Kogoluktuk project would make such an expansion easier. Of course, economic development that would allow such an expansion is entirely speculative and is appropriately excluded from the economic analysis of this report. But it is important, nonetheless. The primary downside to the Kogoluktuk Project is that it has larger construction cost than the Wesley, Dahl, or the combined Wesley + Dahl projects. However, the Net Present Cost of Power analysis shows that the Kogoluktuk provides the greatest benefit for more scenarios than other projects (See Table 7-7). The Benefit Cost Ratios (Table 7-8) show that it is a favored project for three of the six scenarios involving the Ambler Intertie. (Dahl is favored in two and continued diesel generation in one.) And when electric heat is included in the analysis, the Kogoluktuk Project is preferred in most scenarios overall, and in all scenarios that assume the Ambler Intertie. Therefore, the project is economically preferable without including speculative demands. 9.3 Next Steps The next steps for this project are to advance the concept design to the 65% complete stage and complete the environmental requirements. To get there as quickly as possible, the following schedule and bulleted list of action items are identified. FALL 2013: • Look for additional funding to allow work to continue uninterrupted while waiting for AEA grant funding. This will include: • Prepare a plan of work to be completed, and identify those tasks that would best be accomplished prior to receiving AEA grants funds in July 2014. • Meet with potential partners, such as NANA, Northwest Arctic Borough (NAB), Tribal governments, etc., and elicit their support, participation, and funding. Section 9 Recommendations and Conclusions Feasibility Study and Conceptual Design Report Page 83 Cosmos Hills Hydro Feasibility • If funding is secured, perform the following tasks, in the order of priority listed below: • Relocate and/or maintain the Lower Kogoluktuk River discharge station. Locate the webcam to focus on the intake location. • Obtain Lidar data for the area between the existing roads and transmission lines and the lower extents of the existing Kogoluktuk River data. This would be best accomplished in the fall, when foliage and leaf cover is at a minimum. WINTER 2013/2014: • Discuss fish habitat issues with the Alaska Department of Fish and Game (ADF&G) to ascertain their concerns, especially environmental flow requirements. • Prepare a plan and schedule to meet ADF&G’s requirements. • Schedule any field studies to occur during summer 2014. • Monitor the AEA grant selection process. • In Jan 2014, we should have a good idea if this project will be funded. If it is likely, then plan and schedule all summer 2014 field work to be performed. SPRING 2014: • Meet with the agencies to identify any environmental and/or permitting requirements. • Schedule all anticipated field studies and surveys that will be needed for the detailed design. These will include: • Fish habitat study to satisfy ADF&G’s concerns. • Geotechnical investigations at the intake location, along the penstock alignment, and at the powerhouse location. These will be critical in finalizing the concept designs. The geotechnical investigation will also include the road and power transmission alignments and potential material sources. • Detailed river survey at the intake and tailrace locations. This will include the topographic features of the river bed below the water surface and the terrain in the immediate area of the structures. This information is needed to perform the detailed hydraulic analyses at the intake and tailrace. • Sediment transport investigation. This information is needed to analyze the erosion and scour potentials, and the anticipated seepage at the diversion and intake structure. It will then be used to design the appropriate control measures. • If the Lidar data was not collected in fall 2013, then schedule this to occur as soon as possible after the snow melts. SUMMER 2014: • Receive AEA grant funding in July 2014. • Meet with the local communities to update them on the status of the project and to gather their input. • Meet with land owners regarding easement and property acquisitions. Section 9 Recommendations and Conclusions Feasibility Study and Conceptual Design Report Page 84 Cosmos Hills Hydro Feasibility • Prepare and submit a jurisdictional determination application with the Federal Energy Regulatory Commission (FERC) to determine if the project can be exempted from the FERC licensing process. • File for water rights with the Alaska Department of Natural Resources (ADNR). • Perform the field studies and surveys identified above. FALL 2014 – WINTER 2014/2015: • Perform the hydraulic analyses, using the information obtained in the field studies and surveys. • Prepare 35% complete design drawings. This work will consist of: • Detailed hydraulic design of the diversion and intake structures, including erosion and scour protection, seepage control, “self-cleaning” features, icing avoidance measures, etc. • Intake and diversion site plan and concrete details. • Penstock alignment analysis to minimize rock excavation and construction costs, resulting in detailed plan and profile drawings. • Penstock pipeline details, including support, anchoring, pipe size and material, joints, valves, insulation, etc. • Powerhouse site plan, foundation design, building and equipment layout, and details. • Detailed hydraulic design of the tailrace, including erosion and scour protection, icing avoidance measures, etc. • Tailrace site plan and details. • Access road alignment plan and profile drawings, typical sections, culvert details, etc. • Power transmission design, including alignment, pole details, etc. • Once the locations and alignments of the various components are determined, meet with land owners to continue the acquisition process. SPRING 2015: • After the 35% design is complete, meet with the local communities to update them on the status of the project and to gather their input. • Complete any remaining field studies and surveys identified above. SUMMER 2015: • Receive and incorporate review comments and complete the design to the 65% level, including plans, specifications, and construction cost estimate. FALL 2015: • Apply for the identified permits. • Meet with the local communities to update them on the status of the project and to gather their input. Section 10 References Feasibility Study and Conceptual Design Report Page 85 Cosmos Hills Hydro Feasibility 10. REFERENCES AVEC Kobuk, Alaska Village Electric Cooperative CEO Message AK-105, "Kobuk Joins the AVEC Family,” July 2012. NWAB Kobuk Comp Plan, Northwest Arctic Borough, http://www.nwabor.org/forms/Kobuk%20Comp%20Plan.pdf. US Department of Commerce, NOAA, NCDC, Bettles Airport, AK US Monthly Normals. AEA PCE, Alaska Energy Authority, Power Cost Equalization program, http://www.akenergyauthority.org/programspce.html. MOA, Municipality of Anchorage, http://www.muni.org/Departments/works/project_management/Pages/FloodHazard.aspx, July 2013. G-W Scientific; Michael R. Lilly, David Brailey, Kristie Hilton, Ron Paetzold, and Austin McHugh; Cosmos Hills Hydrologic Network Installation and Operation, August 2010- December 2011; May, 2012. AVEC 2012 PCE Annual Report, Regulatory Commission of Alaska, http://rca.alaska.gov/RCAWeb/ViewFile.aspx?id=9BD1B3E1-F759-4DCD-A76A- 512DA43F81F0. ISER Fuel Price Projections, Alaska Fuel Price Projections 2013-2035, report http://www.iser.uaa.alaska.edu/Publications/2013_06- Fuel_price_projection_2013final_06302013.pdf and spreadsheet http://www.iser.uaa.alaska.edu/Publications/2013_06-Fuel_price_projection_2013- 2035_Final_06302013.xlsx Hatch 2012, Hatch, Daniel Hertrich, Cosmos Hills Hydroelectric Project Reconnaissance Trip Report, 12/3/2012. Appendices Appendices Appendices Appendix A Wesley Creek Conceptual Deign Appendices Appendix B Dahl Creek Conceptual Deign Appendices Appendix C Kogoluktuk River Conceptual Deign Appendices Appendix D Conceptual-Level Construction Cost Estimates