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Home My WebLink About8- Round V Discussion Future Power Needs TLHDTLHD 2011 Round V Kootznoowoo's discussion on future power needs from TLHD Angoon's annual electric diesel generation produces approximately 2,000,000 kWh (source CHP center, AEA grant documents filed by IPEC). There are other independent producers of diesel generated electricity and these figures are unknown at this time. No known renewable energy produces electricity in Angoon at this time. However, more disturbing, no use of electricity is used for space heating in Angoon due to the high cost of electricity. Therefore over 95% of the energy usage for space heating for homes and businesses is produced through diesel generated heat. Approximately 5% of the homes use firewood or are supplemented with firewood. The CBJ Greenhouse Gas Emission study released in March 2009 reveals that Juneau is 81 % dependent on diesel in its total non -transportation use of energy. Naturally, Angoon does not have hydropower so it is 100% diesel dependent. Converting the MMBTU requirements for Angoon using the CBJ 81 % figure, we find that Angoon would convert its diesel usage to electrical usage if the price of electricity provided the economic incentive to convert to lower cost electrical heat. Theoretically, (based on 2,000,000 kWh figure) the community of Angoon would need 10,500,000 kWh (2,000,000/19%) if it completely converted its home heating and diesel fuel usage to electrical generation from low cost methods. Theoretically, the community of Angoon currently needs the equivalent of 10,500 MWh for its current needs if their needs can be compared one to one with Juneau's. Because of the high cost of fuel in Angoon and current conservation efforts this estimate is very conservative but is a straightforward extrapolation. We know that the PCE supplement creates a significant barrier to realistically making this conversion. However a significant reduction in the price of electricity would allow for conversion to occur. In other words low cost power would drive conversion from diesel and other CO2 producing fuel sources in the community of Angoon much as has recently occurred in Juneau, Petersburg, Sitka and other communities. IPEC will be able to completely idle their diesel generation capacity to a stand by status and would be able to salvage unnecessary equipment further reducing cost of operating existing infrastructure. IPEC would however need to build and expand its distribution system in Angoon as demand will increase the number of homes, business and public buildings which are operated as the economy moves forward. In a community planning on building an airport in the next year or so and having commenced building a new ferry terminal and other necessary infrastructure, it is entirely reasonable to expect significant economic growth particularly compared to recent years of decline. There exists the potential for many new housing starts due to one of the highest level of vacant but "shovel ready" housing lots in the Community directly the result of Kootznoowoo shareholders receiving lands from Kootznoowoo. We expect Angoon to likely experience an unprecedented power demand in converting home heat fuel from diesel to relatively inexpensive hydroelectric power which, in turn would justify line upgrades and line expansion to new areas within the community. Currently, the community of Angoon has one of the highest unemployment rates at 87% (source TANF program, Central Council of Tlingit and Haida Indians of Alaska) and lowest per capita income in Southeast Alaska. The per capita income for Angoon was $11, 357. Nearly a third of families and Angoon's overall population are below the poverty line (source US Census Bureau Fact finder for Angoon, Alaska). Alaska ranks number one in energy use per capita. According to the Cold Climate Housing Research Center 2009 Alaska Housing Assessment, the average Sealaska household (of which Angoon belongs) consumes $6,072 of energy per year. Over half of the average household per capita income of Angoon residents is spent on energy. The impact of this project to bring low cost hydropower to the community of Angoon and energy customers is potentially profound. Energy customers are making decisions to either heat their homes or feed their household. TLHD is ready to finalize its design based on these facts and the enormous price increase in the cost of diesel since the HDR feasibility analysis. An updated design and procurement of necessary permits and funding is all that remains between continuing the decline associated with diesel generation and the growth anticipated with economical and non volatile hydroelectric power generation. The boost to the economy with the construction should be the catalyst for this growth as families begin to return to Angoon once the see progress on the horizon. An investment by the State of Alaska alongside the current award by the U.S. DOE in this project is needed now in order to save this community. IPEC currently sells electricity in a non -subsidized rate at over $0.52 per kWh (nearly $0.60 for 2011). TLHD would dramatically reduce and stabilize the electrical rate, would provide for a meaningful alternative to heating fuels such as diesel, propane and wood, and would allow the City of Angoon to prosper. It will result in direct out of pocket annual savings to Angoon ratepayers of over $300,000 annually for electricity alone and increase disposable income by nearly $600 from this alone. As can be seen from the attached chart conversion to electric heat is entirely likely to occur and the update to the existing feasibility will recalculate loads based on rational economic behavior which can be shown graphically by the following chart. New homes will also likely be constructed with electric heating as part of design. It is expected that this conversion will be directly related to the price of electricity which in turn is based on future demand predictions. Kootznoowoo would prefer to overestimate demand estimates and encourages AEA to do the same for the factors mentioned above and because of the pattern shown by other communities of converting from diesel to electric once lower cost power has become available. Figure 3.2-1 Electricity Price Threshold for Conversion Electricity Price Threshold for Conversion (Qe. of 60% oa h- ,0 Effi—r aW w Price of st00 P'r us gat, etecl6c4 p� must be lens th SOADN Wh for —stoo) 0.25 _ ----------------------------------------------------------------------- ---------------------------------------------------------------0ilileating- -------------------------- -------------------------------------EfficieRoy- --------------------------------- ---------------------- -------------------------- --------------------------- - - - ------ - ---- L- 3 - - - - - - - - - - - - - - - - - - - - - - - - - -------------------- - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - --------------------------------- ---- 0.15 ------------ - - - - -- ---------------- ---------------------- $ ------ ----- ------- -- - ----- ----- -- — ---------- ------- ------gpq,- a 0.10 -------- -- ----- --- ------ -- ----------- ------ --- ------ ---- -- ---- ----- ---------- -- -- - -- ----- ----- ----- ------------------ -------------------- ---- ---- --- ------------------------------ --------------- --- --- --- ------------------------------------ r----------- --- -- - ------------------------------------------ 0.05 ------- -- -- - ---- - ------------------------------- 0.00 -------------------------- ------------- ------------------------------ 1.00 1.20 1.40 1.60 1.8D 2.00 2.20 2.40 2.60 2.80 3.00 3.20 3.40 3.60 3.80 4.00 4.20 4.40 4.60 4.80 5.00 Oil Price ($lus0a0 Figure 3-2-1 AK -BC Interfie Feasibility Study SE Alaska 2007 According the AK BC Intertie Feasibility Study SE Alaska report 2007, electricity Price threshold conversion for SE Alaska was determined and shown graphically in the chart above. Many factors contribute to this, availability of funds to convert, incentives, price of electricity and diesel. Angoon pays approximately $5.00 a gallon for home heating fuel so one element leading to conversion is in place. A targeted low price of hydroelectric would place another critical element into place to support he conversion rate calculated. In other words it would be rational to make the switch if incentives and capital was available. One such factor that can assure the switch is the extremely high capital cost associated with diesel furnaces and the high cost of O&M. A $500 annual maintenance cost will almost assure the switch if funds are available to purchase and install new equipment. This conversion will occur much more quickly if government sponsored measures continue into the future and as diesel price climb. The following conversion has some significant ramification to the energy supply, demand and economic analysis that follows assuming a 50% conversion which is arguably reasonable under a peak oil scenario and completion of TLHD. Assumptions Community's Annual Electric Load Community's Total Energy is 86 % Diesel (non Transportation) Total Equivalent Energy Conversion rate -- btu/kWh 3412.14 Total Equivalent Energy Heat Component of Energy 50% of Households Convert Heat to electricity Energy Converted Conversion for Diesel #1 at 134,000 (btu/gal) Diesel Displaced annual 1,665,526 kWh 11,900,000 kWh 40,593 MMbtu 34,910 MMbtu 17,455 MMbtu 130,266 gallons