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ALASKA POWER AUTHORITY
SUSITNA HYDROELECTRIC PROJECT
SUBTASK 11.01 -Pk2JECT OVERY I E\t~
PROJECT ivlANUAL
FINAL DRAFT
Acres American Incorporated
Suite 329
The Clark Buiiding
Columbia Maryland 21044
Telephone (301) 992-5300
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OFFICE MEMORANDUM
TO:
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See Distribution Date: November 17, 1980
File: P5700.15.1101 .
r=ROM: C. Debelius cc:
flsuaJECT: Susitna Hydroelectric Project .
Project Manual, Subtask 11.01-
Final Draft I
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Project Overvi e\'1
By rrennrandum dated October 31, 1980, each individual on the distribution
1 is t received a copy of the First Draft of the Project Manua.l . A Fin a 1 Draft is attached for your usee
SoJTE changes have been made since the first draft, primarily in terms of
dividing the original Chapter 8 intb two chapters, renumbering of most chapters,
and changing some section headings. Any work you may have accomplished to
date sho u·t j not have been affected by these changes.
Your early and continuing attention to the .duties assigned by the attached
manual will be very much appreciated, for the completed Project Overview
will be an important factor in the Governor's decision process in March 1981.
As I stated in my first memorandum, please do advise me as soon as
if there is any problem in fulfilling the~ire~rents .
DISTRIBUTION:
ASSISTANT EDITOR:
W. Wells
CHAPTER COORDINATORS:
C. Debelius
P. Hoover
J. Landman
P. Tucker
J. G. Warnock
I. Hutchison
K. Young
N. Blunk (APA)
S. Dei ner
REVIEWERS:
J. D. Lawrence
J. W. Hayden
T. McGuire (APA)
Ro ~bhn. (APA)
~L . ' ,.e..'f.~:<_____
C\. A~ e 1 i us , '\> • E.
De~Project M~)ager
Phone: 301-992-; 00
.
INFORMATION:
FILE:
J. D. Gi 11
Buffalo
Columbia
possible
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ALASKA POWER AUTHORITY
SUSITNA HYDROELECTRIC PROJECT
SUBTASK lla 01 -PROJECT OVERVIE\1
PROJECT MANUAL
FINAL DRAFT
Acres American Incorporated
Suite 329
The Clark Building
Columbia, Maryland 21044
Telephone (301) 992-5300
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TABLE OF CONTENTS
Page
Section
1 Introduc~ion and PLrpose .................................. .
2 An Overview of The Project Overview .................... ~···
3 Procedures ............................................... ~ ..... .
4 Outline and File Index ......................•..............
5 Ch ap'4er Work Plans .............................•.......•...
6 Out i es of Key Personnel ..............•....... , ............ .
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7 Consolidated Budget and Schedule ........................... .
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1·-INTRODUCTION AND.PURPOSE
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1 -INTRODUCTION AND PURPOSE
1.1 -Introduction
This Project Manual has been prepared by Acres /l.rnerican Incorporated as the
basis for proceeding with Subtask 11.01, Project Overview, of Task 11, Marketing
and Financing, of the Susitna Hydroelectric Feasibility Study. The entire study
is being undertaken on bet.alf of the Alaska Powe·r Authority.
A majo~ decision point will be reached by the end of March 1981. At that time,
the Governor of Alaska will determine whether the Susitna Hydroelectric Project
Feasibility Study should be allowed to proceed.
Information avai 1 able to the State ~tJi 11 include not only that which has been
provided by the Susitna team, but also that which wi'll have been produced by the
concurrent ongoing efforts of others. When thehPlan of Study was prepared, it
was clear to us that an assemb1age ofldesign transmittals, prel-iminary reports,
subtask reports, and other data will exist in the Spring of 1981. While such
information is, of course, essential for project purposes, it does not satisfy
the need to present a clear, concise picture which ties together t~e myriad of
activities in which we are now engaged and whic~ clearly presents the issues.
Subtask 11.01, Project Overview Preparation and Update, provides the vehicle for
accomplishing this important purpose.
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1.2 .. Purpose
The purpose of this project manual is to provide the basis upon which
Sub task 11.01 can be successfully comp 1 eted. Work packages are described
herein) duty assignments are made, a schedule is provided, and necessary manhour
budgets are allocated.
1.3 -Approach
While virtually'every.member of the Susitna Project Team may have an opportu-nity
to contribute to the contents of the Project Overview, major responsibilities
fall upon the shoulde-rs of certain chapter coordinators who must oversee the
preparation of individual draft chapters. The general approach calls for
submission of draft chapters about mid-December, after which time the entir·e
report wi 11 be edited and rewritten as necessary to ensure consistency of style,
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balance in terms of content, and appropriateness of level of detail. A series
of reviews is ca 11 ed for because the importance of the document cannot be
understated. Indeed, many individuals in the Government of Alaska may form
their entire opinion of Acres and its a~ility to meet the needs of the State
based only on the Plan of Study itself and the series of Project Overviews
described in Subtask ll.Oi. The final products must necessarily be of the
highest possible quality.
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It is anticipated that most of the contents of the Project Overview will be
det""'ivative of other project documentation and analysis. Thus, the chapter
coordinator is generally expected to distill available data~ fill .in gaps which
may exist, and provide a concise, readable product.
Three editions of the Project Overyiew will be prepared during Phase I of the
total feasibility study. To the extent possible, each editi.on will contain the
same outline (chapter and paragraph headings). Because complete information in
all areas will not be available for the first edition~ some chapter subheading~
will not be addressed to any significant extent until the second or third
edition.
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2 -AN OVERVIEW OF THE PROJECT OVERVIEW
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. 2 -AN OVERVIEt~ OF THE PROJECT OVERVIEW
2.1 -Plan of Study Extracts
At the ·end of this section, a number of pages from the Revised POS (September
1980) have been reproduced. Whereas the POS itself describes the subtask
objectives and the overall approach, this project manual provides a detailed and
comprehensive work plan for ensuring subtask objectives are accomplished.
2.2 -The End Product '
When the Project Overview is distributed in mid-Marc'h, 1981, it should be a well
planned compilation of material which places all the technical, commercials
economic, financial, contractual, environmental and other aspects in proper
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perspective. Emphasis will be placed on readability, and the overview must
present the facts in such a way that a non-engineer can evaluate them readily.
While some technical informati.on will be offered, it is anticipated that readers
desiring deiailed data will be referred ~o the appropriate technical reports
otherwise produced for the project. The format should be attractive and some
color separation or half-tone shading may be employed to stimulate reader . ·
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interest.
1 i bera lly ..
Simple graphics, photographs, layouts, and maps will be used
2.3 -Accomplishing Desired Results
If the desired results are to be accomplished on schedule and v1ithin budget,_ it
wi 11 be imperative that each individual involved in the effort does his or her
job properly the first time atound. It is important, then, that all
contributors to the effort read this-manual with care and follow .its
instructions closely: Ample room exists for innovation and flexibility in terms
of report content and provisions have been made for soliciting ideas from the
Study Team, but items'such as format, schedule, and budgets must be regarded as
fixed. -i
A chapter coordinator has been assigned for each of ,the chapters discussed in
detail in the work plans in Section 5, Chapter ~.ark Plans. Duties of chapter
coordinators are provided in Section 6. Assignments are made as follows:
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CHAPTER COORDINATOR
1. Introduction C. Debelius {Editor)
2. Project Overview Summary . C. Debe 1 ius
3. Alaska Power Authority J. Landman (with APA input)
4. History of Susitna Hydro Project C. ·Debelius
5. Economic Scenarios. and Parameters S. Deiner
6. Market Area and Power/Energy Demanr. Forecasts S. Oetner
7. Susitna Basin Studies Ech9
8. Generation Expansion Plan P. Tucker
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9. Susitna Hydroelectric Development ~
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10. Environmental Consider·ations K. Young
11. Analysis of Economic lmpacts S. Diener
12. Analysis of Economic Feasibility and
Net Economic Benefits s. o'einer
13. Power and Energy Marketing J. G. Warnock
14. Public Opinion N. Blunk
15. Licensing and Permitting P. Hoover
16. Financial Feasibility Analysis J. G. Warnock
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17. Security of Project Capital Structure J. G. Warnock
18. Organization and Management C. Debelius
19. Implications of Prt;>ceeding C. Oebelius
2{}-.~' Appendices as Required C. 8ebelius
The general process by which the Overview will be compiled is illustrated
schemat ica ll y at Figure 2 .1.
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2.4 -Subsequent Editions
It is intended that two subsequent editions of the Overview will be produced in
Phase I. The 9riginal structure as described herein will be retained, but
individual chapters may expand or contract as new data is produced or as issues
are resolved.
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R.2.3 ~ TASK 11: MARKETING AND FINANCING -REVISIONS
(i} Introduction
( i i)
In respons.e to the May 1980 Tussing Report and other public comment
during the period April-June 1980, and also as a-result of
discussions with the Rower Authority concerning the proposed
marketing and financing studies, and finally the recent changes in
Alaska State Legislation, the scope and scheduling of the Task 11
activities originally proposed in the February 1980 POS have been modified.
Essentially, the major modifications include:
-Advancement of schedule and ~ncrease in level of effort for the
initial project overview and internal report documents
-Elimination of Alternative.Power Source Risk Analysis from the Acres POS
Advancement of schedule and increase in level of effort for the
Susitna Basin Plan Risk Analysis
-Delay of schedule and reduction in level of effort for identifica-tion of Parties in Interest
Indefinite delay of commencement of work in Resolution of the Tax.:.. Exempt Bon·d Issue
A~vancement of schedule and increases in level of effort for
Susitna Financing Risk Analysis
-Subtasks have been appropriately renumbered.
Revised Scope of~ork (Task 11)
At the request of the Alaska Power Authority, the scope of work for
Task 11 as proposed in th~~ Acres 1 Plan of Study dated February 1980
has been amended to exclude the Alternative Power Source Risk
Analysis (originally Subtask 11.03), and to defer until further
notice the Resolution of the Tax-Exempt Bond Issue (originally
Subtask 11.07). The originally proposed Subta~ks 11.10, Liaison with
APA Bond Underw.riting Managers and 11.11, Draft Documentation for
Bond Offering support have also been deferred. Subtask 11.12,
Preliminary Financial and Marketing Study, subsequently proposed as a
result of the Arlen Tussing Report, has also now been eliminated.
Subtask pumbering has been appropriately revised.
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TASK 11: MARKETING AND FINANCING
o(i) Task Objectives
To carry out a comprehensive economic evaluation of the Susitna
Hydroelectric Project and to perfonn those economic, financial and
marketing analyses of possible generation sequences capable of
meeting the needs of the Railbelt to allow Susitna to be presented in
proper perspectiveo
To establish the feasibility of fi.nancing the project and to develop
an approach which provides optimum financing cost to Alaska Power
Authority and the best overall benefit to the State of Alaska. An
essential element of this task2will be to build confidence in the
project if it is shown to be the most appropriate for future development.
(ii) Task Output
At the request of .the Alaska Power Authority, the scope of work for
Task 11 as proposed in the Acres • Plan of Study dated February 1980
has been amended to exclude the Alternative Po\·ler Source Risk
Analysis (originally Subtask 11.03), and to defer until further
notice the Resolution of the Tax-Exempt Bond Issue (originally
Subtask 11.07). The originally proposed Subtasks 11~10, Liaison with
APA Bond Underwriting ~1anagers and 1 L.11, Draft Documentation for
Bond Offering support have also been deferred. Suotask 11.12)
Preliminary Financial and Marketing Study, subsequently proposed as a
result of the Arlon Tussing Report, has also now been eliminated.
Subtas~ numbering has been appropriately revised.
The principal output of this task will be the Project Overview~ which
will incorporate comprehensive, but readily understood,documentation
of major issues affecting the financing of the Project. This
document will first be issued prior to the first decision poi~t on
whether or not Susitna studies should continue> currently scheduled
for March, 1981 o TvJO subsequent updates of the report wi 11 a1 so be p~epared through M~rch, 1982. A series of internal management
reports \'/ill also be prepared. Notable outputs unique to the
marketi.ng and financing issue include a series of risk analyses and
procedures for risk control and minimization, as well as a taxation
report addressing the impor-·tant question of eligibility for
tax-exempt bond issuance.
The main topics to be dealt with in the Project Overview and Internal
Reports w i 11 i n c 1 ud e : ·
(a) Project Overview: ~
-General Description of Susitna Hydro-
electric Project
-Review of Design and Construction
eoncepts and Methodology
-Review of Cost Estimates and Schedule
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(a) Project Overview
(Cont'd)
(b) Internal Reports
For Management/
Financial Consider-
ation (Provisional
listing}:
-Economic Evaluation of Project and Its
Limits
-Major Risks and Responses
-Overrun Possibilities:and the Security of
the Project Capital Structure
-Review of Environmental Constraints and
Mitigation Plans
-Development of the Organization for
Management and Operation of Project
-Preliminary Assessment of the Financial
Plan and Requirements for Bond Offering
Documentation
Economic Feasibility Study and Determina-
tion of Probable Economic limits for the
Project
-General Economic Review
-Review of Global Energy Economics
-Economic Impact on the State of Alaska
Assessment of Capita 1 Costs, Schedules
ard Program of Expenditures
-Assessment of Project Operating Costs,
and Maintenance/Replacement Expenditures
-Assessment of Critical Engineering Tasks
and Associated Risk Analyses
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-Project Contingencies, Risk Analysis 3 Policies and Planning for Mitigation of
1 Risks
-Escalation Assessment and Analysis of
Capital Cost Overrun Possibilities
-Security of Project Capital Structure
-Financing Requirements of all Parties and
for the ·camp let ion Gua.rantee
-Evaluation of Alternative Markets Avail-
able for Susitna Output
.
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(b) Internal Reports
for Management/
Fi~ancial Consider-
ation (Provisional
Listing) (Cont'd)
.
-Evaluation of Alternative Options for
Meeting Railbelt Pm·1er 'Needs (by others)
-Assessment of Socio-economic Aspects
-Review of Construction Contract Perfor-
mance History in Alasi<a Relating to Cost
and Schedule
The Interna1 Report£ and the Project Overview will form the basis for
any Bond Offering Memorandum (BOM) Support Documentation that may
ultimately be requiredo Preparation of BOM documentation would
normally begin after completion of the Susitna Feasibility Studies
and submisSion of an Application for Licensing to the FERC.
The subject matter of Internal Reports and the Project Overview will
also be such as to address the requirements of the BOM documentation,
which provisionally will inc~ude:
-Primary Vo 1 umes : ..
-Support Volumes:
-Power Contracts
~ Engineering Report
-Statutory Agreements" Legal Approvals and
Land Claims
-Summary of Corporate Oeicuments
-Technical Abstract and Engineer•s
Certificate
-Construction Cost Estimate SummarJ
Construction Schedule and Project
Expenditure Program
-Insurance
-Financing Summary
Overall Project Organization
-Engineering Reports (Construction}
--Access and Site Preservation
--Environmental Standards, Monitoring
and Control
Quality Assurance and Testing Programs
--Support Facilities and Logistics
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-Support Volumes:
(Cont'd)
-Engineering Reports (Operations)
--Operating and Replacement Expenditures
--Chargeable Corporate Expenditures
--Labor Agreements
-·Plan for Alaska Manpower and Procurement
Content
-Risk Management and Minimization
--Ri~k Analysis and Control
--Risk Minimization
-T~xation Report
-Legal Report
Review of Giant Projects
--Financing
-~ Construction and Engineering
-Alternative Energy Sources
(iii) List of Subtasks (revised)
Subtask 11.01 -Project Overview Preparation and Update
Subtask 11.02 ·-Internal Report Preparation
Subtask 11.03 -Susitna Base Plan Initial Ris-k Analysis
Subtask 11.04 -Susitna Base Plan Extension and Revision
Subtask 11.05 -Susitna Financing Risk Analysis
Subtask 11.06-Resolution of.Tax Exempt Bond Issue
Subtask 11.07 -Identify Parties in Interest
Subtask 11.08 -Revenue Assurance Procedures
Subtask 11.09 -Liaison with APA Bond Underwriting Managers
Subtask 11.10 -Draft Documentation for Bond Offering Support
Note that Subtasks 1L.03 through 11.10 are renumbered following
amendments to scope of work, and 11.06, 11.09 and 11.10 activities
are currently deferred.
(iv) Subtask Scope Statements
It is recognized that if the Susitna Project is selected as an
appropriate element in the growth of generating capacity in the
Railbelt Reg..ion~ it is most likely to proceed on the basis of a
project financing. Essential to this will be an accurate
determination of revenues and properly established energy sales
agreements. Furthermore, all project risks must be identified, their
potentia 1 impact assessed, :md appropriate contingency plans and
provisions made.
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In the approach recomnl'~nde.d, a c 1 ose working arrangement wi 11 be
established from the oufset of the study between technical~ economic
and financial advisory groups. The interaction between these
interests will be developed through a series of specific tasks '\vhich
provide the Authority with successively more comprehensive outlines
and definition of a financing plan •.
As the stucy proceeds, the specific requirements for supporting
material essential. for financing will be identified arid its prepara-
tion undertaken in close collaboration with the selected bond under-
writers. Work undertaken prior to license application will provide
the foundation upon which bond offering support documentation can
later be prepared. Ttie completeness and excellence of bond offering
support documentation is judged to be of crucial importance to a
successful project. The work involves numerous, complex and
interlinked tasks; and only ·comprehensive pre-planning can achieve
the desired result.
In order to present the project in proper perspective to the many
parties involved--federal, State and local agenciess regulatory
authorities, power purchasers, potential lenders, institutions~
political groups and public--a comprehensive overview will be
prepared. This will initially be in general terms, but wtll endeavor
to cover all the interrelated elements of the project. As work
proceeds, successive editions of the overview report become more
explicit and complete. In the event that a Susitna: development is
shown to be feasible and most appropriate for satisfactionof
electrical energy needs in the Railbelt, stupies and expla!'lations
which may seem unnecessary to the sponsoring group may well be needed
to convince third parties and engender their enthusiasm.
It is furthermore· vitally important to disperse the knovtl edge: among
those employed on the project that all potential probTems have been
thoroughly examined and solved. If, on the other hand, no Susitna
development is found to be warranted, careful and reasoned analysis
of the appropriate alternative will be necessary to ensure that the
State 1($ decision to proceed with some other project (or projects) is
based upon thorough studies which establish technical, economic and
financial feasibility as well as environmental acceptability.
The work of the interdisciplinary group incorporating technical:,
economic, financial, and other skills would, furthermore, demonstrate
clearly for management consideration the clear economic limits·to the
Susitna project or some other alternative (e.g.,its maximum
acceptable cost) and ·the time period in which its accomplishment must
be regarded as a certainty before other measures to meet Alaska•s
power needs would have to be adopted. While examination of the
negative limits of the project could be regarded as an expression of
pessimism or recognized to be even, in the ultimate, capable of
cancelling the project, we consider such analysts vital. It should
serve to establish the general robustness of the project and to
demonstrate beyond doubt to the various governments, investors)
1 enders, completion guarantors, concerned interests and others the
viability and acceptability of any recommended scheme for
development.
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The approach to be adopted would derive full benefit from previous
financing efforts for major capital projects requiring capita 1
funding of $1 billion or more. Experience has demonstrated the need
for close and effective interaction between the owner of such
projects and the various elements of his advisory team with the wide
range of interests involved.
(v) Risk Assessments
As the various elements of the project study reach the appropriate
level of~completion~ it is planned to apply a rigorous analysis of
risk and to recommend contingency provisions. The approaches to be·
used \'!ould involve modern techniques of analysis and probability
assessment and deal with cost, schedule, technical and other
controi 1 ing elements of the project.
Risks to be assessed include1those associated with the planning.
design and construction of the. project as 1t1ell as the financing of
it. There are a nymber of basic project financing risks which must
be addressed. The analysis, assessment, and, where appropriate,
quantification of these risks will be accomplished under Subtasks
11.03 through 11.05~ Financing risks include:
--Cost overruns prior to completion
--Late completion and non-completion
--Partial or total post-completion outages
--Cu~tomer failure to provide anticipated cash flows
--Regulatory risks, particularly insofar as·new regulations affect
the operation (and, therefore, of course, the profitability ~nd/or
consumer costs)
Technological risks, particularly insofar as the extent to \i'hich
new or relatively unproven technology may increase financing
d iff i c u 1 ti e s
(vi) Logic Diagram
A l_ogic diagram is shown in Plate T11.1 to illustrate the manner in
which various documents are prepared, interrelated, and assembled.
(vii) Investment Banker Inputs
In the February 1980 POS, it was proposed that Salomon Brothers, an
investment banking finn whose knowledge and experience of financing
large undertakings is unchallenged, would be retained as financial
advisors to Acres. Although the advice of Sa 1 oman Brothers and of .
the First South West Bank, financial advisors to the Power Authority
will be sought from time to time on financial matters, no formal
arrangement for participation of Salomon Brothers in the Susitna
studies is contemplated at this time.
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P.O.S.. RlVIEWED BY
. A P A. ANO FINANCIAL
ADVISORS
JAN 80
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t I TECHNICAL I I UARKE'TIHG I IHSI.JtANC( I . I LABOR 1 lttiAL I :
I INPUTS FROM STUDY I
TEAM AND OTHER ..------..
I AUTHORlTIES IENVIRO-..'M£HTALI IECONOiloliCI I FINANCIAL I ITRA~SPOFIT&TIO"fl TU: POL•TICALI t
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DECISIONS
REACHED ON
OVERVIEW CONTENT
PREPARE TOPICAL REPORTS
FOR MANAGEMENT I FINANCIAL CONSIDERATION
JUN'BO TO MAR 82 AND CONTINUING
--
r-------------, ...._,. ,._,.------
START ~E VltW AND DECIDE ..
INPUTS FROY t
TECHMCAL
ENVIRONMENTAL
ECONOMIC
MARKETING
FINANCIAl,
INSURANCE
TRANSPORTAT!OM
LASOA
~ - -PROJECT OVERVIEW
FIRST
PROJECT OVERVIEW
AV~ILABLE FOR
COMMENT
CONTENT BOND OFFERING}---~
DOCUMENTS
BONO UNOERWR11ERS, MAN:.~f:iER~
PREPARE FOR ISSUE
TAX
LEGAL
POLITICAL
JuN'eo FEB' 61 \
SUBSEQUENT
PROJECT OVEftVlEW
REPORTS ISSUED ·
AT APPROXIMATELY
SIX MONTH INTERVALS
L.... --------__ ....,..._._. __
------------..,..---------- ---
\~---S-E-CO_N_O ____ __
. PROJECT OVERVIEW
DRAFT SUPPORT OOCU~'NTATtON
FOR BONO OFFERING Sl!JPPORT L---.----------------- - ----MAR 8Z AND CONTIMJING tTENTATI\IE)
AVAILABLE fOR
COMMENT
AUG 81
THIRD
PROJECT OVEAVIEW
AVAILABLE FOR
COMMENT
FOURTH -,1
PROJECT OVtRVIEW.
AVAILABLE FO~ j
COMMEIH f
SEr'ez (TENTATIVE}
FINAL DOCUMENTAT.IQ~ f'OR I
LICENSt APPLICATIC~ l'$
ASSEMBLED AND AB·~. ~~." .. ttONI J IS FILED WITH FE.RC;
JUN '82
LOGIC 01AGRAM
PROJECT FINANCING
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Subtask lloOl -Project Overview Preparation and Update
(a) Objective
To provide a k~y project do6ument which reviews all major aspects of
the project and its objectives, determining in principle whether these
can be successfully met; provide through successive updating a
continuing reassessment of the project's overall yiability and
financibility as vafious milestones are reached; and allow
multidisciplinary inputs from many sources to be properly coordinated
into a cohesive and well-balanced definition of the project.
·(b) Approach
This Subtask will be performed by a small team who will receive inputs
from many multidisciplinary sectors involved in the study. The team
will be directed by experienced senior staff familiar \'lith the approach
essential to projects of such magnitude and the complex financing
arrangements that these involve.
Initially the Project Overview will concentrate on descriptive outlines
of the project objectives, the site for development and the project
facilities. Capital costs and schedules will be at the outset
preliminary only, but nonetheless cunsidered -3dequate to determine
initial overall viability. The Project Overview will identify the
sensitivity to various risks and outline methods of mitigating these
and possibly removin9 some from further consideration. The initial ·
Project Overview Report will be scheduled to be available for review by
all parties· concerned prior to the March 1981 decision point on \'lhether
or not to continue the Susitna Feasibi.lity Study •. It will also be
available for review prior to the public meeting scheduled in the
hspring of 1981, and it _will incorporate as comprehensive a review of
issues involved in judging Susitna as can be assembled at that time.
The Project Overview .and its subsequent revisions in updated fonn at
intervals throughout the study will be presented from the 11 owner 1 s
viewpoint .. and will consider all important aspects which affect the
viability, acceptance, financibility and the undertaking of
construction of the hydroelectric facilities. The first update will be
completed approximately nin~teen weeks after the Susitna Development
Report is prepared under Subtask 6.05.
In achieving its goal of preparation of a comprehensive, cle~rly
understandable, concise and accurate overview of the project, the
Project Overview Task Force will call on specific inputs from many
sources, including:
-Technical
-Environmental
-Econom·ic
-Marketing
-Financial
-Insurance
-Transportation
-Labor
-Tax
-Legal
-Political
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Typic a 1 e 1 ements of the Project· Overview are 1.1 sted in Subparagraph
(ii){a) of Task Output above.
The final issue of the Project Overview during the study phase will
provide a valuable summary document to bridge into subsequent licensing
and preliminary design phases of the work .. It will be available prior
to the March 1982 decision point On wheth~r or not to proceed with a
FERC license application for the Susitna Project. Eventually its
content will have signific~nt value for the Bond Offering Support
Document and a variety of other applications, including preparation of
project brochures as part of the public participation program.
(c) Discussion
The concept of the continuously updated "Project Overview" is of
relatively recent origin and has developed-from the special needs of
large complex projects.. It is necessary to address the complexity with
a well planned compilation of ~aterial which places all the technical,
cowmercial, economic~ financial, contractual~ environmental and other
as~ects in proper perspective and demonstrates that all vital problems
are being sensibly addressed. The overview is planned to provide a
consistent thread of documentation through the vtho 1 e study process and,
if construction should proceed, to provide a datum baseline for judging
actual performance of the many elements in relation to the plans.
,..
·As the documents will have to serve many varied and ~on-technical
interests, the language must be appropriately chosen ~nd carefully
edited for clarity and ease of understanding. Extensive use wi 11. be
made of graphics, drawings, maps and pictorial illustrations. Produc-
tion and binding will reflect the level of economy appropriate tQ draft
and eventually final documentation.
{d) Schedule
First Project Ov.erview ...................... Heeks 24 through 63
First Update ··················•·······••o•• Heeks 64 through 85
Second Update ................................ We,eks 86 through 117
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I 3 -PROCEDURES
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3 -PROCEDURES
3.1 -Format
The format for submission of draft chapters will be in accordance with Susitn~
Project Procedure 7.1. It is anticipated that the final Project Overview format
will be more closely akin to~that found in standard textbooks (i.e., only
c.hapters are numbered and sqbparagraph headings are centered, but not numbered).
Even so, retention of the standard numbering system up to final report
preparation will facilitate the review process and will also permit us to more •
easily access the appropriate portions of Lanier disks when corrections are
necessary.
For the Overview, all drawings, maps, photographs, etc., will be referred to as
Figures. Both Figures and Tables will be numbered consecutively within a
chapter (e.g., Figure 7.1, Figure 7.2, Table 7.1 will be the first figures and
table in Chapter 7).
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3.2 -Existing Drawings
Certain drawings or maps which have been produced for other purposes (design
transmittals, subtask reports~ etc.) may be appropriate for inclusion in the
Project Overview. When the chapter. coordinator believes an existing drawing
should be used, he will furnish a copy of the drawing with the submission of h·is
draft chapter. The copy should contain a notation as to the location of the
original drawing. If changes are reco11111~nded to better serve the Project
Overview purposes, such change-s will be marked in red on the copy furnished~ but
the original \vill not be c.hanged until a final decision .is made as to which
plates should appear in the reporto
3.3 -Photographs
Good photographs are particularly useful in carrying a message and they also
tend to stimulate interest in the report.
to provide photographs whenever possible.
Chapter coordinators should attempt
If a photograph or a slide is
provided, a caption should be attached to it. The caption should·explain what
the picture is iht~nded to demonstrate and should identify individuals shown by
name. Pictures illustrating activities. are particularly useful (e.g., an
internal review meeting in progress; an animal being tagged; a drilling
oper.at ion; a weather station being checked; seismology equipment being
serviced).
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In every case that a photograph is provided, the task coordinator should review
it carefully and critically to ensure it represents the best interests of Acres
and APA .(e.g., no~safety violations, no environmental desecration, etc.) ..
In the event that the Chapter Coordinator determines that a picture would be
particularly useful, but is unable to locate one, he should include a
recommendation with his draft chapter. The recorrmendation should describe the
picture he would like to use. If possible and appropriate, we will attempt to
have a few high qua 1 ity photographs taken.
3.4 -New Graphics and Drawin~s
·.
Chapter Coordinators may determine that a new i] 1 ustrat ion or drawing should be
. pren~rPd for the Overview. In each such case, only a decent sketch of the
proposed graphics will be provided with the draft chapter. Final graphics or
drawings wi 11 ·only be produced when the decision has been made as to whether
they should be included in the Overview. For graphics in particular, we will
attempt to use the same illustrator throughout in Ot"der to enhance consistency
in appearance.
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3.5 -Submitting Text
All draft chapter text will be submitted in doub 1 e space draft form. A copy of
the Lanier disk will also be furnished to the Editor if the draft chapter has
been typed on a Lanier.
3.6 -Reviewer Comments
Reviewers are encouraged to make comm.ents and recommend changes. Notes may be
\
made directly on the draft or additional sheets may be provided. Under no
circumstances, however, will the revi"ewer physically cut up and rearrange the
typed version (when this happens the word processing operator is unable to
perform her function efficien~ly). If paragraphs should be moved around, notes
should be placed on the draft .explaining what is to be moved and where.
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3.7 -Chanqinq Chapter Content
Chapter Coordinators may find that certain portions of the work plan are
inadequate to convey the message which they believe is required. Subparagraphs
may be added whenever the Chapter Coordinator deems it appropriate, but no
subparagraphs shown in the work plan may be deleted. Hhen new subparagraphs are
added, they will be put in the appropriate place and given an alphabetic
subnumber so that the integrity of the designated subparagraph structure can be
maintained.
(For example, a new subparagraph is deemed appropriate to be
placed between designated subparagraphs 6 .1. 6 and 6 .1. 7. The added
subparagraph will be designated 6.1.6.A. A second added subparagraph \\*OUld
be 6.1.6.8, etc.)
Tne purpose of ~his approach is to ensure that other Chapter Coordinators \\no
may wish to refer to information contained elsewhere will always be able to cite
the proper location.
3.8 -Citinq Sources
Most of the material in the Overview will actually be a distillation of
materials otherwis~ produced for the Project. It is particularly important at
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the initial draft stage that sources of information are properly referenced --
both to facilitate verification of contents and to provide the basis ·upon which
readers may be led to detailed reports \'lhich support the concise information in
the Overview.
Footnoteswi11 b1~ numbered conse~utively, beginning with 1/ for each chapter ..
3.9 -Direct Quotations and Use of Major Portions of Existing Reports
~
In some cases, \'-/hole _paragraphs or pages may be lifted from oth~r reports \~ich
have previously been prepared. It is not necessary to retype such material at .
the draft chapter stage, but xeroxed pages will be supplied and a note will be
appended citing the original source document.
3.10 -Bibliography
A bibliography will be supplied with each chapter and all applicable references
will be listed, whether footnoted in the text or not.
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4 -:
4 -OUTLINE AND FILE INUEX
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4 -OUTLINE AND FILE INDEX
An outline of the Project Overview is provided on SLICCeeding pages, togethe-r
with a file index number for each chapter. Draft chapters are parts of a major
report within Task 11. The Project Overview itself is assigned file number
5700.15.1101. ~ Individual chapters will carry subnumbers corresponding to
I chapter numbers. (Thus, Chapter 3 has the file number 5700.15.1101.03).
If •
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1.
2.
3.
INTRODUCTION
OUTLINE OF PROJECT
OVERVIEW
1.1 Outline of Purpose of Project Overview
P5700.15.1101
File Number
P5700.15.110l.,Ol
1.2 Initial Emphasis -Decision Whether or Not to' Proceed with ·study
1.3 Evolutionary Process for Subsequent Issues of the Project Overview
1.4 Outline of Form and Content
PROJECT OVERVIEW SUMMARY P5700.15.ll0l.02
ALASKA POWER AUTHORITY P5700.15.1101.03
3.1 Outline of Legislation Creatinq the Authority ..
3.2 O~ganization
3.3 Existing and Planned Activities
'" 3.4 Procedures Adopted for the Study of the Potential of Hydroelectric
Power Resources of the Susitna River
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4.
5.
3.5 Alaska State Legislative Act 11 Relating to Power Projects of Alaska
Power Authority and the Susitna River Hydroelectric Project 11
HISTORY OF SUSITNA PROJECT
The Study Area
Early·Studies of Hydroelectric Potential
4.,1
4.2
4.3
4.4
4.5
4.6
4.7
4.8
U.S.S.R. -Department of the Interior, Studies
U.S. Army Corps of Engineers Studies
I
Kaiser Proposal for Development
Interests of Alaska Power Authority
Selection of Consulting Engineers
Plan of Study 1980 -1982
ECONOMIC SCENARIOS AND PARAMETERS IN ALASKA
5.1 Introduction
5.2 The need for Internal Consistency
5.3 Global Energy Economics
5.4 U. S. Energy Supply and Demand
5.5 U .. S. Energy Price Forecasts
5.6 Alaskan Prospects for Economic Growth
5.6.1 ISER Assumptions
5.~.2 Demographics
5o6.3
5.6.4
5.6.5
5.6.6
Government Revenues and Expenditures
Industrial Output
Employment
General Price Inflation
.
P5700.15.1101.04
P5700.15.1101.05
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5. 7 Forecasts of Energy Prices in Alaska
5.7.1 Forecasts of Market Prices
5. 7. 2 Concepts and Deve 1 opment of Energy Shadow Prices
5.8 Non-Energy Costs Forecasts
5.8.1 Labor Productivity and Wage Rates
5.8.2 Equipment €ost Escalation
5.8.3 Materials Cost Escalation '
5.8.4 Other Non-Energy Cost Escalation
5. 9 Interest and Discount Rates
5.9.1 Forecasting Market Rates of Interest
5.9.2 Defining a Social Discount Rate
6. MARKET AREA AND POWER/ENERGY DEMAND FORECAST P5700.15.1101.06
6.1 Market Area
6.2 Utility Structure and Present and Planned Generatin~ Capacity
6.2.1 Alaska Power Administration
6.2.2 Anchorage Municipal Light and Power
6.2.7 Others
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7.
6.3 Electricity Demand Profile
6.4 Past Forecasts of Power and Energy Demand
6.5 ISER Energy Forecasts
6.5.1 Methodology
6.5.2 Base Case Results
6.5.3 Range of Forecasts
6.6 Load Forecast, 1980-2000
6.6.1 Methodology
6.6.2 Base Case Results
6.6.3 Range of Focecasts
6.7 Potential for Load t~anagement and Energy Conservation
6.7.1 Technological Developments
6.7.2 Economics of Energy Conservation and Substitution ,
6.7.3 Impact on Load Forecasts
SUSITNA BASIN STUDIES
7.1 Introduction
7.2 Technica,l Data
7.2.1 Hydrology
7.2.2 Site Exploration and Geology
7.2.3 Siesmic Considerations
7.3 Selection of Dam Sites and Design of Structures
P5700.15.1101 .. 07
7.4 River Management Studies .and Optimization of Ultimate Capacity
7.5 Tunnel Alternative to Devil Canyon Dam
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PROJECT OVERVIEW
8. GENERATION EXPANSION PLAN P5700.15.1101.08
8.1 Introduction
~
8.2 Options Available to Meet Capacity Requirements
8.2.1 Coal-Fired Steam Powered Generation
8o2.2 Gas Turbine Power Generation
8.2.3 Combined Cycle Generation
8.2.4 Diesel Power Generation
8.2.5 Impact of the Fuel Use Act
8.2.6 Review of Other Potential System Components_; Municipal Solid
Waste, Wood-Fired, Peat-Fired, Biomass Fueled Power
Generation, Cogeneration, Methanol Fuels
8.2.7 Decentralized Power Generation Facilities Including Review of
Wind Energy Potential and Other Renewable Sources
8.2.8 Hydroelectric Alternati.ves to ~usitna Po\'/er Development
8.3 Environmental Analysis ~nd Assessment of System Components
8.4 Distribution of Load and Generating Capacities
8.5 Generation Planning Without Load ~1anagement and Conservation,
1980-2000
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8.6 Generation Planning With Load Management and Conservation, 1980-2000
8.7 Generation Plans With and Without Susitna
8.8 Preferred Generation Plan
9. SUSITNA HYDROELECTRIC DEVELOPMENT
9.1 Introduction
9.2 The Selected Development
9.2.1 Dam Selection (and Tunnel, if appropriate)
~};.2.2 Spillways ..
9.2,3 Power Generation Facilities and E~uipment
9.2.4 Access Roads and Cofferdams
9.2.5. Construction Scheduies
9.2.6 Contract Packages and Contracting Policies
·9. 2. 7 Cost Estimate
9.2.8 Program of Expenditures
P5700.15.1101.09
9.2.9 Analysis of Risks and Assessment of Project Contingencies
9~3 Review of Transmission Development Plan
9.3.1 Ttansmission System Planning for the Railbelt
9.3.2
9.3.3
9.3.4
9.3.5
Susitna Hydroelectric Project Transmission Facilities
Cost Estimate
Program of Expenditure
Analysis of Risks and Assessment of Project Contingencies
9.4 Logistics, Transportation and Construction Facility Requirements
9.5 Operating Costs and Replacement Expenditure
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10. ENVIRONMENTAL CONSIDERATIONS
10.1 Environment~ 1 Impact on Recommended
10.1.1 Fisheries
10.1.2 Wildlife
:.:.
10.1.3 Vegetation
10.1.4 Recreation
10.1.5 Archaeo 1 ogica 1 Issues
10 .1. 6 Other Impacts
1Q.2 Lands Affected by Power Generation
Impacts on Native People
11. ANALYSIS OF SOCIOECONOMIC IMPACTS
11.1 Introduction
11.2 State-Wide Impacts
11.3 Regional Impacts
11.4 Local Impacts
Development
and Transmission
12. ANALYSIS OF ECONOMIC FEASIBILITY AND NET ECONOMIC
BENEFITS
P5700.15.1101.10
Facilities and
P5700.15.1101.11
P5700.15.ll01.12
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12.1 Introduction
12.2. Evaluation Methodology
12.3 Base Case Analysis
12.3.1 Direct Costs and Benefits
12.3.2 Indirect Costs and Benefits
12.4 Risk Analysis
12.5 Conclusions
13. POWER AND ENERGY ~lARKETING OPTION
13.1 Introduction
13.2 Supply Contract Arrangements
13.3 Cost of Service
14. PUBLIC OPINION AND PERCEPTION OF PROJECT
'
14.1. Public ParticipatiDn Program
14.2 Public Concerns
P5700.15.1101.13
P5700.15.1101.14
14.3 Public Awareness of Implications of Various Means of Meeting
Power/Energy Demand
15. LICENSING AND PERMITTING PROCEDURES
15.1 Introduction
15.2 Federal Energy Regulatory Commission
15.3 Federal Requirements (Excluding FERC)
15.4 State and Local Requirements
P5700.14.1101.15
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PROJECT OVERVIEW
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15.4.1 The Alaska Public Utilities Commission
15.4.2 State Environmental Agencies
15.443 Local Requirements
15.5 Minimization of Regulatory Conflicts
16. FINANCIAL FEASIBILITY ANALYSIS
16.1 Introduction
16.2 Alternative Financing Strategies
16.3 Basic Structure of Fin~ncial Feasibility Analysis
16.4 Special Features of Financial Analysis
16.4.1 Choice of Calculation Method
16.4.2 Quarterly and Annual Calculation
'
P5700.14.1101.16
16.4.3 Taxation Consideration (Including Tax Exr::mpt Bond Issue)
16.4.4 Escalation Inflation Treatment
16.4.5 Revenue and Operating Profit
16.4.6 Financial Statements
16.4.7 Discounted Cash Flow Returns
16.4.8 Special Cash Flow Computation
16.4.9 Net' Present Value Calculation
16.5 Sensitivity Analysis and Financial Risk
16.6 Conclusions
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17. SECURITY OF PROJECT CAPITAL STRUCTURE
17.1 Introduction
17.2 Over a 11 Risk Ana 1 ys is anJ Cant i ngency Planning
17.3 Completion Guarantee
17.4 Revenue Assurance Requirements
?5700.15.1101.17
17.5 Form of Power Contract and Interrelationships With Financing Plans
17.6 Role of the State· of Alaska 'in the Susitna Hydroelectric Power
Development
18. ORGANIZATION AND MANAGEMENT P5700.15.110l.l8
18.1 Role of Alaska Power Authority in Development of Susitna
Hydroelectric Power Project
18.2 Project Management
18.3 Management of Engineering and Construction
18.4 Policies and Procedures: Management Information Systems
18.5 External Boards of Review
18.6 Quality Assurance
18.7 Public Participation and Information Program
18.8 Labor Relations
18.9 Security
18.10 Organization for Operating Phase
19. IMPLICATIONS OF.PROCEEDING WITH STUDY DF SUSITNA
HYDROELECTRIC POWER DEVELOPMENT
20. APPENDICES AS REQUIRED
P5700.15.1101.19
P5700.15.1101.20
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5 -CHAPTER ~IORK PLANS
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5 -CHAPTER WORK PLANS
Work p 1 an s for each chapter are provided in this section. Chapter Coordinators
must as a matter of course be thoroughly familiar with the plans for content of
assigned chapters. Beyond that, however, this work plan affords an opportunity
to make reference to other portions of the report, thereby eliminating
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redundancy which would exist if each chapter had to stand alone.
In every case that a numb~r of pages is estimated, it is assumed that one Hpage 11
consists of one 8 1/2 11 x 11" sheet with standard margins, typed in double space
draft on the Lanier word processor. Figures and Tables are not included in the
page number estimate. The page estimates are to be considered as a guide only;
there is no restriction on increases or decreases as long as the work plan·
content is substantially satisfied. Remember, though, that it will be easier to
delete portions that are too detailed than to add to incomplete information ..
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5.1 -Chapter 1 -Introduction
(i) Objective
To introduce the reader to the Project Overv ie\·J, exp 1ain the purpose of
the document, and initiate the concept of a continuing series of which
this edition is the first.
( i i) Approach
Four sections will be prepared as follows:
(a) 1.1 Outline of Purpose of Project Overview (1-2 pages)
This portion begins with a statement that the document has been
prepared by Acres. for APA in accordan-ce with the POS. The Proj~ct
itself. is introduced and the contents of Subtask 11.01 as contained
in the Revised POS are su~m~a.rized. Basically, this first part of
the report has to say WHY it has been prepared~ The fact that this
. .
is a distillation of detailed technical data is introduced here and
the preliminary nature of results to date is emphasized.
(b) 1.2 Initial Emphasis -Decision Whether or Not to Proceed with
Study (1-2 pages)
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Having said WHY in 1.1 above, we must now introduce the concept of a
decision point and the factors which must be taken into account. A
stylized graphic showing various inputs (e.g., Project Overview,
Development Selection Report, ISER Forecast, Public Comment, Agency
&econmendations, etc.) to a decision point with alternative outputs
for proceeding and terminating may be used to illustrate the point.
Mention is made here of the fact that implications of proceeding and
important issues are discus~ed in Chapter 19.
(c) 1.3 · Evolutionary Process for Sutisequent Issues of the Project
Overview (3 pages)
Introduces the idea that the Overview .will be published on a regular
'
basis if the project proceeds. The general form and structure \'il 11
remain constant, but the emphasis on any given chapter and the
results reported can ~e expected to evolve as the study continues.
The second decision point in April.,1982, is introduced ·here and •
note is made of new inputs which must be considered, including the
Railbelt Alternatives Study,· Intertie Study, and Tidal Power Study.
1.4 Outline of Form and Content (2-4 pages)
Discusses the complexity of the decision making process. Observes
that a variety of diverse disciplines have been brought to bear and
that this report attempts to tie them together in a meaningful way
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(iii )
for decision makers. Notes that the report is sunmari zed in
Chapter 2 and that the organization of the text is designed to
establish the basis upon which the study is being done (Chapters 3,
4), ~onsider the needs for energy in the Railbelt {Chapter 5 and 6)
examine how Susitna might contribute to satisfaction of those needs
(Chapters 7 and 8), and then discus~-from a preliminary standpoint
the technical, socio-economic and· environmental information obtained
to date (Chapters 9 through 11), etc. A flow diagram containing a
series of questions and parenthetical reference to chapters may be
employed •
Schedule and Budget
(a) Prepare draft
(b) Edit/rewrite
(c) Review Chapter draft
Manhours
40
None
8
Completion Date
Dec. 31
None
Jan. 23
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5.2 -Chapter 2 -Project Overview Summary
( i) Objective
To provide an executive sunmary of the most important information in the
Overview.
( i i) Approach
Subparagraphs wi 11 be prep.ared --one for each chapter. Each chapter
will be summarized as succinctly as possible (1-3 pages ;per} and a few
... '
graphics, tables, etc .. may be simplified or sumnarized as illustrations.
This Chapter will not be prepared until completion of chapter revie~~ for
all other chapters.
(iii) Schedule and Budget
(a} Prep-are draft
(b) Edit/rewrite
{c) Review Chapter draft
*Included in dr·aft report review.
Man hours Completion Oate
40 Feb. 6
None None
* Feb. 13
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5.3 -Chapter 3 -Alaska Power Authority
( i) Objective
To document the authority under which the APA operates.
( i i) Approach
Five sections will.be provided as follows:
(a) 3.1 Outline of Legislation Creating the Authority;(l pa-ge)
A concise statement of the legal basis upon which APA is founded.
This statement may cite specific statutes, but i.t will avoid legal
phraseotogy and simply make it clear that APA has the authority to
perforu its g-ener·al functions. If a copy of the appropriate la\\1 is
considered necessary, it should probably appear as an Appendix
(See 5.20).
(b) 3.2 Organi'zation (3-4 pages)
This section provides a brief description of the duties of various
.APA staff members in much the same way as we normally describe
duties of various project team members in our proposals. Names of
incumbents will not be used with position descriptions. As a
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minimum, description will be provided for Chairman of the _Board,
Member of the Board, Executive Director, Director of Finance,
Director of Engineering, Public Participation Officer, Native
Inspector and Project Engineer. An organization chart should be
sketched and provided with the preliminary chapter draft submission.
The final paragraph in this section may list incumbents. (This
approach will facilitate later update versions since only incumbents
may need to be changed --unless, of course, APA reorganizes).
: (c) 3.3 Existing and Planned Activities (1-2 pages)
Provide a general review of the types of projects for which APA has
responsibility. It is not necessary to cite every project and, in
fact, it .js preferable to write in terms of categories (e.g.,
re~onnai5sance stud.ies, feasibility studies, licensing,
construction, financing, etc.). It would be appropriate to note
that as of December 31, 1980, five reconnaissance studies were in
progress, two feasibility studies, etc. (Numbers are for
··~
illustration only. Facts must be obtained). If APA has plans for
change~ either in breadth'or depth of scope in the future, such
plans should be cited.
,-.
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(d) 3.4 Procedures Adopted for the Study of the Potential of .
Hydroelectric Power Resources of the Susitna River (2-3 pages)
Note that the process by which a consultant was selected is covered
in paragraph 4.7. Section 3.4 should discuss such matters as the
form of contract used~ the conduct of Public Participation by APA
itself, the relationship with ADF&G and other state agencies, APA's
role in the intertie study, relationship with the Office of.the
Gover'nor on the Railbelt Alternatives Study, .the manner in which
eontrol by APA is~exercised (including external review, offering
major decision points to the Governor, incorporating public
concerns, etc.).
(e) 3~5 Alaska State Legislative Act "Relating to Power Projects of
Alaska Power Authority and the Susitna River Hydroelectric
Project" (2 pages)
Just as in Section 3-1, this should be ~ brief review of the
legislation in layman's words. An appendix may be used to actually
publish the Act if desired.
(iii) Illustrative Materials
Consideration should be given to providing photographs of an APA Board
Meeting in progress or of an External Review Board Meeting. The
organi~ation chart sketch noted at (ii){b) above is a requirement.
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( iv)
(v)
Getting the Information
Portions of this chapter will probably.have to be based on materials
obtained directly from APA. The Chapter Coordinator should seek help
.
from the Susitna Project Office in Anchorage in collecting information.
It is appropriate to seek an .early review by APA of the chapter when it
is in presentable form but correspondence transmitting this material
I
should be prepared for the signature of the Editor (Deputy Project
·Manager).
Schedule and Budget
(a) Prepare draft
(b) Edit/rewrite
{c) Review Chapter d~aft
u
Man hours
40
15
8
Completion Date
Dec. 3
Jan. 2
Jan. 9
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5.4 -Chapter 4 -History of Susitna Project
( i) Objective
To provide a brief historical review of events leading to the selection
of Acres and to introduce the reader to the Plan of Study.
( i i) Approach
Much of the subject matter for this chapter is already covered 1n Subtask
6.01 closeout report~ Materials provided should be consistent with that
,; .
report as well as with the Development Selection Report~
Eight sect 1ons wi 11 be provided as fo 11 O\'ls:
(a) 4.1 The Study Ar~a (4-pages)
Begin with a statement of Acres' concept of the preferred Susitna
development as presented in more detail later in the report.
This section is a brief introduction which loc~tes the project area
and offers a broad overview of the setting. Much useful material is
available from the 1975 Interim. Feasibility Report prepared by the
Corps of Engineers (pp. -7-27). · As a minimum, paragraphs are
required to define the Susitna basin, discuss climate, topography,
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hydrology, fisheries,. birds, mammals., and vegetation. This is by
no means a detailed envit"on.roental description. Bear in mind that
environmental considerations will be discussed in rrore detail in
Chapter 10 ..
A stmple map should be provided, but detail should be minimized.
i 11 ustrat ion simi 1 ar to the one shown at Figure 4.1 may be usefu 1.
In
· TANA
········ RIVER
BASIN
riGtlr!t:' Lf. I. ;?o..5.s .·/;Je hrrn...;t r ~r
h~S/¥t. /cc.Jh'?:.,., ''~/·
addition, one or more photographs showing the rugged
should be supplied.
4.2 Early Studies of Hydroelectric Potential (1 page)
terrain
An
Cite all Susitna studies leading up to the USBR reports of the aarly
sixties. Briefly mention results. Also note other major projects
such as Rampart.
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(c)
(d)
(e)
.
4.3· USBR, Department of the Interior~ Studi~s (2~3 pages)
Discuss the princtpal findings of the USSR report, particularly that
which was produced in 1974.
proposed by USBR and others.
Provide a map locating dam sites
Refer to a Table \>Jh i ch should be
prepared li.sting possible developments, by whom proposed~ dam
heights, installed capacities, date of study.
t
4.4 UoS.·Army Corps of Engineers Studies (4-5 pages)
....
Once again, describe the principal findings of the Corps.studies. '
Discuss items in particular which may now have changed (for example,
load forecasts). This section must be succinct, bu,t it also must
set the stage for latet"' more detailed descriptions of technical and
environmental studies \>Jhich have been oriented tm~Jard the Watana and
Devil Canvon dams as the more probably viable sites. Refer to the
map and table introduced at (c) above ..
4.5 Kaiser Proposal for Development (1 page)
Briefly describe this study. Make a point of the fact that it
considered industrial development as an adjunct to hydro
development. Point out that no field data exists for the Kaiser
sites.
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(f) 4.6 Interests of Alaska Power Authority {2 pages)
Describe how after formation of APA (refer to Chapter 3), this
Susitna Project fell within its bgiliwick. Discass the procedures
which Alaska used to detPrmine whether the State should fund Federal
activities or employ a private consultant. Tell how statements of
qualifications were seught and three consulting firms were funded
$40K to prepare detailed pl~ns of study~ Describe the presentations
and testimony in ~eptember 1979 and selection of Acres as one option
with Corps of Engineers as the other. The APA report on public
meetings should be considered a primary reference for information 1n
this paragraph as well as in paragraph 4.7 below .
' (g) 4.7 Selection of Consulting Engineers (1 page)
Discuss the November 1979 APA meeting, the Corps presentation, and
the recomnendat io.n by the APA board that Acres be selected. Note
Governor • s acceptance and signing of contract in late December
1979.
(h) 4.8 Plan of Study 1980-1982 (5 pages)
Emphasize that the document is dynamic and hr..s evolved since it was
submitted in September 1979 .
Discuss contents briefly ~--only down to Task level. Explain ho\tJ it
was reviewed and how the reader can. refer to the POS itself if more
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detail is needed. Brin9 out the fact that· alternatives are no\'1
being studied in detail by others. Note scheduled decision points.
Q
(iii) Schedule and Budget
(a} Draft chapter
(b) Edit/rewr.ite
(c) Review
'"
Man hours
60
None
8
Completion Oate
Dec. 8
None
., Dec. 19
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5.5 -Chapter 5 -Economic Scenarios, and Parameters 1n Alaska
(i) Objective
To provide a unified discussion of economic scenarios and parameters t~at
influence various aspects of the study, including energy demand and load
j
forecasts, generation planning, cost estimating, socioeconomic impact,
and economic and financial feasibility. To ensure that sets of
assumptions are internally consistent both within and across these
tasks.
{ii) Approach
The first five sections (10 pages) will concern preliminary and -'I-
conceptual issues,~global energy economics, U. S. energy supply and
demand and U. S. energy price forecasts. The remaining four _sections
(10 pages) will concern Alaska-and project-specific issues: Alaskan
prospects for economic growth (including ISER assumptions); projections
of Alaskan energy prices, both market and opportunity (shadow) values;
forecasts of non-energy costs, and the establishment of market costs of
capital and real discount rates applicable to current dollar cost of .
power analysis and real dollar economic evaluations, respectively. The
parameter values provided in the first Project Overview win be based on
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(iii)
work up to November 30 1980. Additional values and revisions to this
information will be incorporated regularly and systematically into the
on-go1ng production of internal management reports and subsequent
editions of the Project Overview R-eports. It is expected that l·ater
editions of the Project Overview Report will maintain the format of the
currently proposed documentation.
Schedule and Budget
(a) Draft Chapter
(b) Edit/rewrite
(c) Review
Man hours _, __ _
60
30
8
Completion Date
December 19
December 31
January 12
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5~6 -Chapter 6 -Market Area and Power/Enerqy De.mand Forecast
~~~------~--------------~-~·~------------
(i) Objective
To provide an overview of the Railbelt market area, ·the existing supplies
and suppliers of electric power, and existing and forecast demand for
electric energy and power.
( i i) Approach
The chapter wi 11 be organized into seven sect ions as fallows:
5.1 -Market Area: (2 pages)
6.2 -Util_ity Structure and Present Generating Capacity (3 page~)
6.3 -Electricity Demand Profiles (3 pages)
6.4 -Past Forecasts of Power and Energy Demand (3 pages)
6.5 -ISER Energy Forecasts (5 pages)
' 6.6 -Load Forecasts (5 pages)
6 .. 7 -Potential for Load ~1anagement and Energy Conservation (4 pages)
Particular emphasis will be placed on appropriate lower and upper bounds
for incremental power and energy demand and the assumptions underlying
ISER*s energy demand forecasts. Section 6.7 will address load management
and conservation only in a manner consistent with Subtask 6.35 ..
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.(iii) Schedule and Budget
(a) Draft Chapter
(b) Edit/rewrite
(c) Review
,,
Man hours Completion Date -
60 December 19
30 December 31
8 January 12
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5~7 -Chapter 7 -Susitna Basin Studies
{ i) Objective
To review technical data collection activities and the process by which
various potential Susitna Basin developments were evaluated.
(ii) Approach
This chapter will pecessarily deal with a substantial amount of highly .
technical data. It is important to keep in mind that we are presenting
this information so that it can be readily understood an.d absorbed by
decision makers whose education and experience are not necessarily
technically oriented. Five sections are required as follows:
(a) 7.1 Introductio·n (2-4 pages)
A'~ _/; ... •
r/Y'
<p'
Review the massive efforts undertaken in tn,e~~" past year to gather and
Jf ¥;..,.·
.-"P'
evaluate impottant data. Describe how,;a' camp ·was assembled, the ,/
major transportation support re~Ve'ments, and the number of people
involved in the collection ot!"~chnical data. Place some emphasis
,Ji~;;:r
on the fact that Alaskan nvolvement has been extensive. Discuss
the fact that field · vestigations are by no means complete and that
an even 1arger da a collection effort will come in the next year if
the State dec) es to proceed with the Project. Refer to Chapter 9
where the .,8'~ected developme~t plan appears in more detail.
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7.2 Technical Data
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,.,.'5~,;->
r)i'(f
"". ,y;· (1) 7.2.1 Hydrology (3~o5 page~; ·P,:~l'
/~
#" /
Provide a basin descr~pt¥ and streamflow data. An annual
hydrograph showing me~ low, and ~igh flows of at record
Watana or Devil C ~ would be a useful illustration. Briefly
ure, precipitation, ice, wind-driven waves,
sedimentat· n. Particularly emphasize constraints which hydro~al··studies may place on basin developm~t.
/ . -~
(2) /.2.2 Site Exploration and Geology (3-5 ~.
/
Begin with a geological overview ~""e Basin. Describe what
investigations were conducted fring the first year of the
study and what from them. State what
uncertainties remain what steps will be taken to resolve
work done on stability. Note that adits may be required
to determine more confidence the ability to construct
certain that they will not be constructed unless
other alyses demonstrate that such types would be favored,
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(c)
(d)
(3) 7.2.3 Seismic Considerations {3-6 pages)
Discuss the WCC program as accomplished to date and the plans
;
for next season. Provide a simplified preliminary map with
. major faults shown thereon. Review work done on Reservoir
Induced Seismicity. Briefly discuss how results of seismic
studies affect dam designs.
7.3 Selection of Dam Sites' and Design of Structures (8-10 pages)
Refer to the .map mentioned 1n Section 4.3 of ,ehapter 4: Briefly
summarize (perhaps in tabular form) known characteristi~s of
alternative dam sites. Describe the procedure use~ to select
particular ones for more detailed consic;ieration. Several examples .
of preliminary site layou.:ts (if available) should be furnished ..
State which dam types appear to be favored at Watana and Devil
Canyon
p~:f
7.4 13-;(v~r Management Studies and Opt imi zat ion ·of Ultimate Capacity
< '.
ll-2 pages)
·~ .. ~"'""'> --
Describe the manner in which we are looking at staged development .._,
and how various concepts contribute to or constrain full basin
development. Provide .9rtY initial information which may have been
obtained regarding .flow regulations which may apply for mitigation
and other purp9)s·es.
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(f) 7. 5 Tunnel A 1ternat ive to Devi 1 Canyon Dam (p-:-B;pages) .,.,
,.~-«"'
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Describe the process we are using to consider this alternative.
Several layo.ut sketches would be valuable, particularly one for the I /.
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alternative we most favor at this time. State advantages and
disadvantages of using a tunnel. It may be appropriate to ~rovide a
table laying out various tunnel options, possible relative costs,
capacities of the project, miles of river preserved, etc. A basin
plan and elevation with tunnel alternatives marked thereon would be
useful. Provide an initial assessment of how the tunnel alternative
compares with other developments.
(iii) Schedule and Budget
(a) Draft chapter
(b) Edit/rewrite
(c) Review
Man hours
90
30
12
Completion Date
January 2
J
January 16
January 23
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5.8 -Chapter 8 -Possible Generation Expansion Plan
(i) Objective
To review viable candidates for inclusion in a future generation system
for the Railbelt; to develop apparent optimum generation systems under
varying assumptions; to provide a preliminary assessment of system
environmental impacts._
( i i) Approach
Six sections and eight subsections will be provided as follows:
(a) 8.1 Introdu~tion (1-3 pages)
(b) 8.2 Options Avai.lable to Meet Capacity Requirements (8-12 pages)
To the extent possible, the use of the term "alternatives" will be
avoided. Note that the actual alternatives study is being done by
others. Explain that any hydroelectric development on the Susitna .
River would necessarily be a part of a generation system.
Recognizing that a variety of developments is possible and that
staged development may well be a reasonable way to avoid having too
much excess capacity at any given time, note that it has been
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necessary to examine likely ways in \'lhich. the current system will
grow to meet various demand scenarios. The economic viability of
various development schemes in the Susitna Basin must be tested
against generation expansion sequences which do not include a
Susitna develo-pment. Each possible type of generation should then
be discussed in turn, and, where fuels are required, it is
appropriate to address availability and costs in the future. Two or
three paragraphs should be provided for each of the following
topics:
8.2.1
8.2.2
8.2.3
8.2.4
8.2.5
8.2~6·
Coal-Fired Steam Powered Generation
Gas Turbine Power Generation
Combined Cycle Generation
Diesel Power Generation
Impact of the Fuel Use Act
Revie\'1 of Other Potential System Components; Municipal
Solid Waste, Wood-Fired, Peat-Fired, Biomass Fueled Po\-Jer
Generatiop, Cogeneration, Methanol Fuels
8.2.7 Decentralized Power Generation Facilities Including Review
of Wind Energy Potential and Other Renewable Sources
8.2.8 Hydroelectric Alternatives to Susitna Po\<ter Development
It must be noted that sections 8.2.6·and 8.2.7 l'ti11 not be addressed
in the March 1981 Project Overview. For these two sections it will
be sufficient to use a sentence to the effect that this work is now
being accomplished by others and it will be reported on when results
become available (probably the final edition of the Project
Overview).
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One or two summary tables listing the possible system components,
capacities considered, capital costs ($/kW), operating costs, etc.
should be provided. These· could very well be along the lines bf
tables used by P. Tucker· in the October 15 briefing for R. Mohn.
This section will. be largely derived from information developed for
Subtasks 6.32, Thermal Generating Resources, and 6.33," Hydroelectric
Generating Sources~ Photos of plant types, a few layouts (if they
are prepared) and similar illustrations would be us~ful.
.
(c) 8.3 Environmental Analysis ang Assessment of System Components
(3-5 pag~s)
This section should report the results of Subtask q.34,
•
Environmental Analysis. Recognizing that the draft chapter is due
before the completion of Subtasks 6.32, 6.33, and 6.34, we should
report our results as 11 preliminary11 or 11 tentative11 and candidly
state that work is continuing in these areas. If evaluation
matrices are developed for Subtask 6.34, an abbreviated example
shou 1 d be inc 1 ud2d with submission of the text. When importa_nt
analytical work has not yet been completed, it is appropriate to
provide a few paragraphs describing what will be accomplished in the
near future. The screening criteria should be stated.
(d) 8.4 Distribution of Load and Generating Capacities {2-3 pages)
A map containing graphic symbols for locating each of the potential
system components in the Railbelt should be provided. It may be
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appropriate to also use this map as a reference in discussions for
paragraph 7.2.7 (Decentralized). Discussions should be provided
relating known load centers and relative sizes to potential
generating source locations. To· the extent that imba 1 ances exist,
address the impli~ations. ~o the extent that peaks are not
coincident from one load center to another, it will be useful to
demonstrate how capacity factor might improve with an interconnected
system.
(e) 8.5 Generation Planning Without Load Management and Conservation,
.,
1980-2010 (4-5 pages)
Briefly describe the Generation· Planning Model and how it is being
... -
used. (Note that the actual preliminary results will be discussed
in Section .8.7)
(f) 8.6 Generation Planuing With Load Management and Conservation~
1980-2010 (2-3 pages)
Summarize the work accomplished in Subtask 6~35, load Management and
Conservation. Provide sketches showing t~e impact on future demand
and on load duration curves under various assumed measures$ A
sunmary table may also be useful. It would list possible measures
and the expected impact they might have on demand and load shape as
well as the degree of difficulty in implementing them.
(g) 8.7 Generation Plans With and Without Susitna (5-8 pages)
Base this section on work done ·in Subtask 6.36, Generation Planning.
. Explain what preliminary runs show. If insufficient information is
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(iii)
available on actual runs when this section is prepared, provide a
description of what \'te intend to do and how we expect to use the
results. If it can reasonably be expected that useful information
will have been developed by February 16 (when the final draft is
. prepared), provide a paranthetical summary of what you intend to
supply at that time. We may make changes to the initial version,
but the submission prepared to meet schedules noted in (iii) below
should be complete and accurate as of the time of submission.
(h) 8.8 Preferred Geperation Plan (2-4 pages)
If we have arrived at a preferred generation plan as of the time
that this chapter is prepared, briefly describe it. If no
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conclusion-has yet been reached, describe how we plan to arrive at a
preferred plan.
Schedule and Budget
(a) Draft chapter
(b) Edit/rewrite
(c) Review
Nan hours
100
30
12
Completion Date
January 2
January 16
January 23
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5.9 -Chapter 9 -Susitna Hydroelectric Development
( i) Objective
To provide a description of the selected Susitna Basin development plan.
(ii) Apprpach
.·
This chapter will be widely read because it will present the concept . '
which is most likely to be analyzed in detail after the Governo~·s
decision point and because it will reflect our current thinking on what
project may ultimately be constructed. r~uch of the material contained in
'-
the Development Selection Report can be condensed and used in this
chapter. Section descriptions are as follows:
(a) 9.1 Introduction
Note that Chapter 7 reviewed a range of alternatives and the process
by which they were analyzed. Chapter 8 looked at how possible
developments might best meet the needs of the Railbelt for
electrical power and energy in the future. This Chapter describes
the development initially selected for more detailed analysis.. Note
that the selection is_:'preliminary and that various project features
may be expected to ;evolve over succeeding months as parallel
studies, particu}arly environmental and continuing technical field
investigations,~-lead to changes which may better satisfy mitigation ,.
requirement~_... and physical conditions.
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9.2 The Selected Development
(1) 9.2.1 Dam Selection (and tunnel, if appropriate) (8-10 pagest
/
Provide layouts for the selected pevelopment. Describe staging
and the order in which various stages would be developed.
,_ .. Y--'~
{ Describe d~, h_:_i~~!},· and briefly explain why t~ey were
.~ C. chosen.
. ..
{2) 9.2.2 Spillways (2-3 pages)
. '
( 3)
Describe purpose of spillways. Brierly describe the sp·i,.lway
selected for each stage of development and th~ rgason it is
preferred.
9.2.3 .Power Generation Facilities and Equipment (3~~r'Pages)
Discuss location and type of powerhouse selected for each
stage. Oe~~r~.~~·-·tyf>,e of l:Jnits to be used and capacity,.
intakes, gates, etc. Note location of transformer gallery and ,___ ___________ _
switchyard. Provide elevations of selected powerhouses if they
have been prepared by the time the chapter is due for
completion. (If certain drawings are under preparation but are
not yet ready, provide the editor with a brief note as to what
m.aY be ava~lable by late February). -
...
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(4) 9.2.4 Access Roads and Cofferdams (2-3 pages)
( S)
( 6)
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t'<-... ~
'<;_,,
Discuss the fact that these would be some of>·"lhe earlies::.
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project features if a decision is fin.afly made to construct.
Discuss _which access road route J:ras been selected (if selection
has been made). If we are §1111 unde.cided as to V1e preferred
access road, provide a mip showing routes now being considered
and state that the .. ~:H1a 1 se 1 ect ion will take place .
.,..._-ff.
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Briefly introduce purpose cofferdams serve. Discussion should\} :,
q¥~ 0
take into account project implications for cofferdam selection
(e.g. length of diversion tunnel, ability to incorporate
cofferdam into dam structure).
9.2.~ Construction Schedules (1-3 pages)
Discuss approximate times when each -~tage~f the development is
expected to .be completed. Note that later editions of the
overview wi 1l provide more/detai 1 on schedules after the
development concept i~_/more fully analyzed .
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9.2.6 Contract Package and Contracting Policies,(2-4 pages)
."
Note differences between fast tr~_ack and de 1 i·berate approaches.
-. .... . . . ·;;. ~·-' .
~--~ J\>'1\"~ ,. ·--
Briefly discuss considerat·i,ons applicable to alternative
packages and policies. ·Note that this topic will be expanded
in the final Phase I Overview.
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(7} 9.2.7 Cost Estimate (2-5 pages)
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Emphasize the very prelimina-ry nature of estimates now being
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used in the evaluation ~v6cess. State that a detailed estimate
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wi 11 be made after th¢ development plan is selected.
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(8) 9.2 .. 8 Program of Expenditures (2-4 pages)
Review study· costs to date, amounts budgeted to complete, and
Phase II costs (as described in the POS). State any
assumptions we are using to determine annual expenditnres
during the construction period. Note that these assumptions
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{} ~ i -~~~~ be derived after we determine cost estimates and schedules for \
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the selected plan.
'(9) 9.2.9 Analysis of Risks and Assessment of~Project
Contingencies (2-3 pages)
· Review what we plan to do in this area. Observe that this work
is proceeding, but that detailed risk analysis for the selected 1
plan must necessarily follo~ from the plan itself. To the
extent that risk types can be determined, it is appropriate to
list major ones we are considering (risks of over or under-
building, seismic, etc.) .
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{c) 9.3 Review of Transmission Development Plan {Title only -no text)
(1) 9.3.1 Transmission System Planning for the Railbelt
(1-2 pages)
P rov ide a map of current t ran smi ss ion system, i ntert i e route,
Susftna route{s). {This map can then be referred to in para.
9.3.2 as well.) Briefly discuss current transmission system
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and possible future expansions, including the 1ntertie. Note
-when route selection will be made.
{2) 9.3.2 Susitna ~roelectric Project Transmission Facilities
(2-3 pages)
Discuss the status of transmission studies as accomplished to
date. State in particular what measures will be taken to
improve transmission system reliability.
(3) 9.3.3 Cost Estimate (1 page)
Note that this estimate has not yet been completed. However,
-;.. for planning purposes, we use the Corps Estimate, which, in
1980 dollars, is -----
(4) 9.3.4-Program of Expenditures (1 page)
Briefly discuss how this will be derived in future studies.
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(iii)
(d)
: (5) 9.3.5 Analysis of Risks and Assessment of Projecf
.Contingencies·(l page) See (6) 8.2.6 above.
9.4 Logistics, Transportation and Construction Facility
Requirements (2-4 pages)
Provide a brief description of logistics support for the study
itself (the camp, helicopter use~ etc.). Include a photograph ..
of camp facilities. State that more details as to construction
camp size and location will follow after plan selection.
(e) 9.5 Operating Costs and Replacement Expenditures (1 page)
~ Note parameters used in the screening process for these costs.
Observe that more precise determinations will follow after plan
selection.
Schedule and Budget
(a) Draft chapter
Edit/rewrite
Review
Man hours
90
30
12
Completion Date
January 2
January 16
January 23
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5.10 -Chapter 10 -Environmental Considerations
(i) Objective
To review the status of environmental studies, describe impacts as they
ar~ currently known; to revi~w land status and impacts on Native people
and organizations.
( i i) Approach ·
This chapter will contain two sections, and a number of.subsections.
Good photographs of animals, vegetation, environmental data collection, . .
etc. are encouraged.
(a) 10.1 Environmental Impact on Recommended Development (Title only)
To facilitate our presentation, a number of m_ajor categories have
been selected fof discussion. In each category, the minimum
required material should include a review of the entire Phase I
program (based on the POS), a summary of the findings to date, an
initial assessment of environmental impacts, a discussion of any
mitigation measures we have begun to consider, and a brief overview
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of the Phase II work which must follow license application. If
any major problems which had not been expected are now known, these
should be reported as well. Categories and page estimates are as
follows:
10.1.1 Fisheries (6-10 pages)
10.1.2 Wildlife (6-lO·pages)
10.1.3 Vegetation (S-8 pages)
10.1.4 Recreation (4-6 pages)
10.1.5 Archeoloiical Issues (5-8 pages)
·10.1.6 ·other Impacts
A number of questions were provided to APA by the Governor's Office.
To the extent it is possible to answer these questions in our first
Project Overview, responses (even very preliminary ones) should be
provided:
Environmental Quality
(1) To what extent will the project affect the environmental health
and/ or safety of the populace? vJhat is the extent of both
short-term and long-term consequences of the project?
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(2) What is the extent of irretrievable resource loss or
irreversible environmental consequences?
(3) ~~hat are the provisions for environmental roonitoring?
Surveillance? Quality control?
( 4) Wi 11 the project affect subsistence resources? (Change in
migration patterns? Loss of species? Dislocation?
Availability?)
( 5) \~i 11 the project affect designated or specifically defined
wilderness, historic, watershed, recreational or scenic areas?
( 6) Will the project affect fish and wildlife populations or their
'
habitat? How? Short-term vs. long-tenn effects?
{b) 10.2 Lands Affected by Po.wer Generation and Transmission Facilities
and Impacts·on Native People (4-8 pages)
This is an initial review of the land status. Consider
including a map showing the-extent of lands set aside as a
power reservoir, lands owned by Native Corporations, BLM land,
State land, par"k. land, etc. This section may be fairly short
in the first Project Overview and may be expanded in later
editions.
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(iii) Schedule and Budget
(a) Draft chapter
(b) Edit/rewrite
(c) Review
Nan hours
80
20
8
Completion Oate
January 2
January 16
January 23
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5.11 -Chapter 11 -Analysis of Socioecuncmic Impacts
(i) Objective
To provide preliminary information on socioeconomic impacts of the
Susitna Project.
( i i) Approach
Four sections will be provided.
This chapter should review the Phase I POS program for socioeconomics and
should provide a status report on information assembled to date. To the
extent that it 1s possible to address the following questions (furnished
by·the Governor's Office to APA), they should be answered. Even
·preliminary or tentative responses are important:
Socioeconomic
(1) What changes would be generated in real per capit~. personal income
for current resident Alaskans over the 1 ife of the project
· (construction and operation a 1 phases?)
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(2) What is the employment impact of the project?
(a) What proportion of jobs are expected to be occupied by current
Alaskans?
(b) What are the-characteristics of these jobs (seasonality, skill
I • level, occupational category, short-term, long-term?)
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fommunity Well-Being
(1) What changes, if any, can be expected in the quality and/or
' availability of governmental goods, services and/or facilities? . . .
What state and locally-financed services would be required?
(Education? Health services? Transportation?. Social services?
Utilities? Police protection?)
(2) Is a change in housing conditions expected? (Availability? Price?
Quality?)
(3) \~hat local population changes can be expected? (Amount and rate of
change? Characteristics of expected in-migrants?} Are population
changes expected to cause significant value or 11festyl7 conflicts?
Displacement from traditional occupations?
(4) Do local growth management capabilities (land use plans, ordinances,
revenue-generating mechanisms) exist?
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This chapter should be organized so that impacts are viewed first from
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the macro scale and then at successively lower levels. Sections
include:
(a) 11.1 Introduction (1-3 pages)
(b) 11.2 State-Wide Impacts (3-5 pages)
(c) 11.3 Regional Impacts (5-8 pages)
(d) 11.4 Local Impacts
(iii) Schedule and Budget
(a) Draft Chapter
(b) Edit/~ewrite
(c) Review
( 6-10 pages)
Mahours
40
15
8
Completion Oate
December 19
December 31
January 9
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5.12 -Chapter 12 -Analysis of Economic Feasibility and Net Economic Benefits
(i) Objective
To determine the net economic benefits of proposed Susitna hydro power
developments to the State of Alaska and to analyze the key determinants
of net benefits, including energy cost escalation, discount rates,
project economic life and capital costs.
( i i ) Approach
.
Two evaluation methodologies will be described: one based on generation
expansion planning models and the other based on project-specific .
comparisions of life-cycle costs associated with providing a given
quantity of power and energy. Both approaches use economic parameters
including shadow {opportunity) values of energy where appropriate, and
exclude intra-state transfer payments {taxes and subsidies). As the
system-wide economic evaluations must follow the cost of power analyses,
these.results may not be available until after the first Project
Overview. The nature of indirect costs and benefits will be identified,
and the direction and possibly, the approximate magnitude of effects
indicated. Detailed analysis of such secondary project costs and
benefit~ will be in-process work at the time the first Project Overview
is in preparation and hence, full results will be provided in subsequent
Overview reports. As these evaluation tasks and results depend on the
selected set of economic parameters, it is anticipated that the anulyses
will be rerun as revised values of input parameters emerge.
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(iii) Schedule and Budge~
(a) Draft Chapter
(b) Edit/rewrite
(c) Review
Manhours
60
15
8
Completion Date
January 6
J.anuar y 18
January 24
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5.13 -Chapter 13 -Power and Energy Marketing
(i) Objective
To provide an overview of alternative arrangements under which Susitna
output can be sold to consumers in the Railbelt Region; to develop a
basis for market·ing power and energy which provides the necessary degree
of revenue assurance; to recorrmend in outline possible forms of power
contract.
{ i i) Approach
Three sections will be provided as follows:
(a) Introduction (3 page·s)
This wi 11 review the past arrangements adopted for marketing
electrical power supplies in the Railbelt Reoion, explaining the
relationship between the various supply entities and both wholesale
and retail consumers. The re 1 at ion ship between power and energy
sales revenue and financing of past development \'lill be reviewed.
The Susitna Hydroelectric Project requires special consideration of
supply contracts in relation to long-t~rm debt financing. The
implications of such requirement will be examined. Any major
differences applying to alternative means of supplying Railbe1t
power and energy needs will be examined.
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(b) Supply Contract Arrangements (5 pages)
Various modes of electrical power and energy sale appropriate to the
Susitna Project will be examined. Consideration will be given to
the 1 ikely economic trends through the 1 ife of the project, and
implications of general inflation and esca1ati.on in operating costs
will be examined.
Current legislation and rules require certain tests be met if tax
exempt bond fjnancing is to be allowed. Among these is an all
important test regarding sales of project output to non-tax exempt
purchasers. The prospects for such arrangement wilJ be reviewed but .
it is acknowledged that the broader issue of tax exempt financing
will be addressed elsewhere.
(c) Cost of Service (3. pa9~s)
This section \'lill examine· the cost of service implications for the
Railbelt area under the various modes of marketing output which
might apply. In this regard the potentially higher cost of ser·vice
with the capital intensive hydroelectric .alternative will be
recognized and ways and means examined of mitigating the effect of
this on consumers. The revie~tl should lead to the identificati.on of
options which would provide an acceptable basis for marketing the
output· of the Susitna Project.
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(iii) Schedule and Budget
(a) Prepare draft
J
(b) Edit/rewrite
(c) Review Chapter
Man hours Completion Date
40 December 13
15 December 23
draft 8 January 4
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5.14 -Chapter 14 -Public Opinion and Perception of Project
(i) Objective
To review the Public Participation Program; to summarize public sentiment
toward the proposed project; and to report the general level of p~blic
awareness of the implications of~various means of meeting future
electrical demands. . ...
( i i) Approach
This chapter includes a minimum of three sections. Photographs are
encouraged, particularly when they demonstrate public interest (views at
·public meetings, public participation staff at work, etc.). Specific .
requirements include:·
(a) 14.1 Public Participation Program (6-8 Pages)
Discuss the nature and objectives of the program itself. Review
public participation events which have occurred to date (what
meetings have been held, attendance, how much correspondence, what
questionnaires were distributed, what literature was produced,
etc.). Discuss plans for continuation of the program throughout the
remainder of Phases I and II --and beyond if pl~ns have been
formulated.
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(b) 14.2 Public Concerns (6-10 pages)
Categorize and su'mmari ze the general nature of pub 1 ic con.:erns
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expressed to date. Tabular information will be helpful here. State
what specific changes have occurred, since the study began, to
account for key concerns (e.g., commissioning a separate Alternative
Study, revisions based on Tussing Report, introduction of a second
decision point~ etc.). Sho~ how the next public meeting series will
be oriented toward addressing principal concerns.
(c) 14.3 Public Awareness of Implications of Various Means of Meeting
Power/Energy Demand (5-8 pages).
.o
Assess the extent to which the public 1s aware of the major
implications of a Susitna development and of meeting forecasted
demands in other ways. Provide details as to how this awareness
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will be improved ~s concurrent efforts by Acres and Batelle
proceed.
(iii) Discussion
The descriptions offered above represent the minimum necessary
information to provide a comprehensive, but concise, Project Overview.
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If, in the view of APA, this section should be expanded, this chapter can
be lengthened without impacting other chapters in the document.
(iv) Schedule and Budget
Mahours Completion Date
(a) Draft Chapter * December 12
(b) Edit Rewrite 40 January 2
(c) Chapter Review * january 10
*To be pr6vided by APA staff.
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5.15 -Chapter 15 -Licensing and Permitting Procedures
(i) Objective
To review license .and permitting and to address steps taken to minimize
regulatory conflicts.
( i i) Approach
This chapter will be divided into five sections. Most of it should be
derivative of the design transmittal earlier prepared for Subtask 10~02.
(a) 15.1 Introduction (2-4 pages)
Provide a brief introduction to let the reader Rnow what this
chapter is about a1·1d to describe the laby·rinth;an course which must
be followed if all requirements for 1 icens ing and permitting are to
be met.
(b) 15.2 Requirements Summaries
A number of questions were furnished to APA by the Office of the
Governor. Specific answers (even very preliminary ones) should
appe·ar in the text of this chapter for these questions.
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Permits and Licenses
(1) What permits, licenses and/or governmental (state, local and/or
federal) approvals are necessary?
(2) What mitigation measures or conditions and stipulations can be
identified to minimize the conflicts or problems identified
above?
(3) What interest and/or-r·esponsibi 1 ity does local government have
in this project?
(4) Are there external constraints (e.g., national or
international) which figure prominently in the success or
failure of the project? (Pat~tially ans\-'!ered here and part in
other chapters. For example, impact of fuel use act appears in
Chapter 7).
To ensure that each question is addressed, this chapter will r~view
the requirements by governmental category in Sections 15.2 through
15.4. Steps taken qr planned to satisfy all of the identified
requirements will be addressed in Section 15.5 (see paragraph
5.15(ii)(c) below).
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The requirements review stmuld be as concise and readable as
possible. Detailed procedural matters should not be described.
Rather, we should think in terms of letting the decision maker know
that a very complex process is involved and numerous agencies have a
piece of the actfon, but that the situation is v1ell in hand.
A simplified flow chart would be helpful here and could provide an
exce 11 ent overview of the process for the reader. The task of
simplifying requires some. innovation! The text may then refer to
various blocks on the flow diagram as the reader is walked through
the process .. We should prepare the dia.gram in such a way that the.
FERC process is the primary stream and other Federal, State, and
Local requir~ments are possibly parallel streams w~th inputs to or
.outputs from the FERC stream.
Licensing and Permitting Requirements will be summarized by
governmental category in the following sections:
15.2 Federal Energy Regulatory Commission (4-5 pages)
15.3 Federal Requirements (Excluding FERC) 3-6 pages)
15.4 State and Local Requirements
15.4.1 The Alaska Public Utilities Corrmission (1-2 pages)
15.4.2 State Environmental Aqencies (3-5 pages)
15.4.3 Local Requirements (1-2 pag~s)
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( ; i i )
(c) 15.5 Minimization of Regulatory Conflicts
Describe steps taken or planned to minimize problems. Discuss our
o~going coordination activities \'lith FERC, F~JS, ADF&G, etc.
Describe the State's Master Permit Application and how it applies
here. Briefly review certain points made in the POS (e.g., being
prepared to work under new FERC regulations if received) and changes
we have made to ensure we satisfy requirements (e.g., changing the
recreation plannipg to ensure completion in Phase I).
Schedule and Budget
(a) Draft Chapter
{b) Edit/Rewrite
(c) Review
Man hours
60
20
8
Completion Date
December 12
January 2
January 16
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5.16 -Chapter 16 -Financial Feasibility Analysis
( . ) \ 1 Objective
To provide a preliminary assessment of the feasibility of financing~
under the auspices of the Alaska Power Authority, of the Susitna
Hydroelectric Project.
(ii) Approach
This chapter will contain six sections with subsections as required
(estimated at nine) to set out the services of the financial analysis
procedure. This chapter will require close coordinatio~ with APA's
finance advisors (and possibly bond counsel). It may not be possible., by
Spring 1980, to be too specific regarding actual numerical analysis and
the treatment will concentrate on a presentation of methodology and
format of financial statements that ultimately will be used in the
analysis.
(a) !6.2· Alternative Financing Strateg·ies
It is anticipated that there may have to be some constraint applied
in outlining all alternative strategies for debate as it wi11 be in
the interest of APA to examine initially tl-tose which are more
favorable to the Authority of the State. Introductions of
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strategies ·which are less favorable would follow only if
circumstances so demand. In the process of preparing this section~
careful consideration would be given ·;n conjunction with APA and
their financial advisors, to the ranking of preferred approaches and
to their relative "worth" and significance.
(b) 16.3 Basic Structure of Financial Feasibiljty Analysis ?·-------=--=----=---
' The approach which is to be adopted for this analysis will be set
out in some detail and the same structure defined in terms of a
logic diagram. The output of the analysis will be period by period
pro forma financial statement together with back-up details such as
tax calculations and DCF returns on total project tnvestment. At
the stage of project development reached in ,Spring 1980 analysis
will be on the basis of full debt financing. A series of
significant indicators will be devleoped such as average unit costs, . .
financial rates and total debt service payments. The output will be
arranged is such a manner to present a reliable basis for ranking of
financing alternatives.
(c) 16.4 Special Features of Financial Analysis
( 1) 16.4.1 Choice of Calculation Method
At this time particular attention is being applied to the use·
of financial planning model "FEZIBL 11 which is a program
evolved from that used orig.inally in the late 1960's for the
Churchill Falls Power Project. This program has, since then,
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been developed through several other varied applications to
resource development app1ication to provide a ready tool for
complex evaluations requiring a wide variation of report
outputs.
(2) 16.4.2 Quarterly and Annual Calculation
The model offers the convenience of a switch from one interval
to another in the course of the "run." Thus initial years can
. be reported·quarterly and long-term results on an annual
basis .. At the level of project description 1n Spring 1981~ it
is likely that annual period reporting only will apply.
(3) 16.4.3 Taxation Considerations
It is recognized that taxation implications have a significant
bearing on the viability of a hydroelectric power project such
as Susitna.· Analysis of this aspect will have to proceed in
close conjunction with review by financial advisors or bond
counsel. It is anticipated that issues will not have been
resolved by Spring 1980, and comment and comparative effects
of taxation variabl~s will be presented only in general terms.
The objective will be to present clearly the case for tax
exempt bond financing .
, (4) 16.4.4. Escalation/Inflation Treatment
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(d)
A close conformity is vital between escalation/inflation
treatment in economic and financial feasibility analysis.
This. will receive special consideration in the current study
of a project which it now appears will have to be viewed 1n
the context of a continuing high inflation economy.
16.4.6
16 .4. 7 .,
16.4.8
16.4.9
Sections 16.4.6 through 16.4.9 will all receive balanced
treatment as elements of the financial feasibility. analysis.
Each section will include appropriate brief text dealing with
the approach to be used for the format of present at ion and
will present the latest and/or most significant printouts
produced by the time of the interim overview report (and the
subsequent updates).
16.5 -Sensitivity Analysis
As indicated in the POS, various leve 1 s of risk ana 1 ys is will be
carried out o'n Susitna including (under 11.05) a Summary Risk
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Analysis o An initial effort will have bEen undertaken by Spring
1980, to assess risks applying to various possible generation
scenarios including Susitna.
In addition, the financial feasibility analysis will be subjected to
sensitivity tests on all significant parameters and inputs.
Contingency planning and policy options will be suggested in a
provisional, preliminary form in Spring 1980.
(e) 16.6 Conclusions
It will be appreciated that conclusions reached in Spring 1981 will
be preliminary but the intent \vill be to present these interim views
in a manner wt1ich can have a meaningful contribution to the decision
process on whether or not to continue with study of the Susitna
Project.
(iii) Schedule and Budget
(a) Prepare draft
(b) Edit/rewrite
{c) Review Chapter draft
Man hours
60
20
8
Complet'ion Date
December 19
January 6
January 18
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5.17 -Chapter 17 -Security of Project Capital Structure
(i) Objective
To present an over a 11 assessment of the expost.!res 1 ike 1 y to be
experienced by the Susitna Hydroelectric Project, affecting 1n particular
the capital structure under which the project would be financed. The
presentation is to address all the various contingency allowances, plans
~
and pol icy options wh1ch could serve to mitigate risks in the undertaking
and financing of the project.
( i i ) Approach
This chapter is planned to draw together the various assessments of risk
and exposures and demonstrate that by adopt ion of proper measures,
including contingency provision, completion guarantees, revenue assurance
procedures, form of power contract and other contractual protection, the
_Susitna Hydroelectric Project might be undertaken as a prudent venture
for Alaska Power Authority.
It is planned to have five sections within this chapter involving fifteen
pages of text.
(a) 17.1 Overall Risk Analysis and Contingency Provision
This section will draw on other chapters to sunmarize the findings
of the various risk analysis and feasibility analysis studies and to
make an assessment of the order of magnitude qf prudent
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contingencies in respect of capital cost) schedule, operating costs,
va.riances in predicated escalation trends and other elements that
have to be covered by adequate financing.
The overview wi 11 address various ways and means that rni gh_t be
employed to minimize overall risk and provide security of project
capital structure.
(b) 17.2 Completion Guarantee
The basis of financing of the Project will determine whether or not
a specific completion guarantee will be required. It is unlikely
therefore that, by Spring 1980, the precise requirements will be
clear. However, a discussion will be provided on alternative
methods of dealing with this issue and on the significance to the
Project.
(c) 17.3 Revenue Assurance Requirements
It is recognized that the main source of assurance in regard to
revenue wi 11 come from the basic contract under which power and
energy output from Susitna are sold. These sections of the chapter
will deal with the relevant provisions of the power contract, the
prospect for take -or pay (or take and Pay} obligations; minimum
pa_tment obligation, guarantees and other sources of payment.
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5.18 -Chapter 18 -Organization and Management
(i) Objective
To review the organization and management structure for the Feasibility
Study and to surnnarize organizational aspects which would apply if the
project went to construction.
( i i) ~proach
This chapter contains 10 sections. In this first edition of the Project . .
Overview, discussions are primarily centered on the Study Organization.
•
The final version in Phase I may place more emphasis on changes which
would apply in succeeding phases.
(a) 18.1 Role of Alaska Power Authority in Development of Susitna
Hydroelectric Power Project (1-2 pages)
Keep in mind that Chapter 3 discussed APA in some detail. This
section should simply establish APA as the agency to whom we report.
It should also discuss how other State Agencies fit into the
.
org.anizational structure. A simplified 11 \'liring diagram" should be
prepared so that this and subsequent sections can make referenee to
it. Mention should be made of ways in which APA exercise<:; its .
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management role (e.g., attendance at various meetings, review of
monthly reports, use of project engineer, day to day coordination in
Alaska through the Project Office).
(b) 18.2 Project Management (3-5 pages)
Refer to the organization chart. Discuss in particular the roles of
various project team membe.rs down to Task ·level, the management of
subcontractors, the project~ review panel, the internal review board,
0
and the working group.
· (c) 18.3 Management of Engineering and Construction (1 page)
State that if the project eventually goes to construction, it will
go through a number of phases. In each such phase, the organi~ation
" may be expected to change to accormmdate management needs at the
time. Note that future editions of the Project Overview would
describe this evolution as it takes place.
(d) 18.4 Policies and Procedures: Management Information Systems
Discuss the fact that Procedures Manuals have been prepared and that
certain major sections are contained therein. Note that subs in
turn have prepared similar manuals as appropriate. Briefly review
various project reports (monthly progress, cost control system,
invoices, design transmittals, subtask completion reports, POS
revisions, etc.).
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(e) 18.5 External Boards of Review (1-2 pages)
Discuss the purpose and current composition. Point out that the
.first meeting has been held and prov.ide tentative schedule for
others. Note the existence of two boards--an Acres external board
and an APA externa-l. ·board.
(f) 18.6 Quality Assurance (1-2 pages)
Briefly review quality assurance procedures as they are applied to
the proJect .. Give particular attention to how matters are handled·
for various subcontractors.
(g) 18.7 Public Participation and Info~mation Program (1-2 pages)
Refer to Chapter 13 for "'full details on the program itself. Use
this section to describe briefly how the study team interfaces with
the public participation program. Note our involvement in public
meetings, workshops, and action list program.
(h) 18.8 Labor Relations (1-2 pages)
Discuss in particular the Native Agreement and the ro 1 e of the
Native Coordinator in APA. Note emphasis on Alaskan involvement.
Point out that if the project actually goes to construction, this
subject area becomes extremely important and the project staff must
include capability in labor relations.
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(iii)
(i) .18.9 Security (1-2 pages)
Discuss the inventory system and procedures for accounting for APA
property. Note that insofar as project information is concerned,
all materials, files, etc. are available for A~A inspection an-d,
aside ftom certain information which is proprietary to the various
firms working on the project, all findings are made available for
public review. Point out special procedures· for security instituted
at the camp (firearms control, fire protec~ion). Observe that if
construction .occurs, detailed security and safety plans must be
prepared and implemented.
(j) 18.10 Organization for Operating Phase (1 page}
Point out that no plans have yet been made for organization fQr
project operation. Even so, such plans should be drawn up initially
in the detailed engineering phase to ensure that facilities and
operating system components, controls and interfaces are compatible
with planned organizational concepts.
Schedule and Budget
(a) Draft Chapter
(b) Edit/Rewrite
(c) Review
Man hours
40
8
Completion Date
January 2
January 16
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5.19 -Chapter 19 -Implications of Proceeding with Study of Susitna
Hydroelectric ?ower Development
(i) Objective
To set forth all of the maJor issues (or gaps) which have been identified
to date; to address the advantages and disadvantages associated with a
·" decision ·to proceed with the study.
(ii) Approach (15-20 pages) •"
This chapter has purposely not been divided into.sections, for much of
its content will evolve as other chapters are prepared. Even so, it is
anticipated that some attention will be given to dis,:::ssion of the
various "gaps 11 and "bridges" developed during the July 14, 1980, meeting
with Dr. Nerrett, Economics Consulta.nt (copy of minutes is included as
TAB 5 .19-1).
For each issue (or 11 gapn) identified in this chapter, a response \'li11 be
prepared to indicate how it is being resolved or what must be
accomplished to ensure resolution. Internal reports prepared as inputs
to Subtask 11.02 may be used to support these discussions and certain
selected internal reports may appear in the Appendices to the Project
Overview (see paragraph 5.20). To the extent that preliminary
conclusions can be drav;;, regarding any of the_issues, they will be
expressed in this chapter.
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Insofar as implication of proceeding are concerned, it must be stressed
that no decision to construct a project can or should be made until much
later, and certainly not until after the feasibility study is completed.
Thus~ the implications of proceeding with the study must deal with such
matters as the 11 Savings" associated with terminating the work, the loss
of the investment to date if the study stops, the opportunity to acquire
useful data which will be of value to the State regardless of whether the
project is ever built: the lead time saved by getting a license even
without a constructioi decision, the importance of keeping options open,
etc.
(iii) Schedule and Budgets
Man hours Completion Date
(a) Initial issues discussion 60 November 21
and feedback to appropriate
coordinators of other chapters
(b) Draft Chapter 40 January 23
(c) Review * *
*To be accomplished as part of the draft report review (after individual
chapters have been prepared, edited, and r.eviewed).
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TAB 5.19-1
' .
MINUTES OF TASK 11
MEETING} JULY 14) 1980
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SUSITNA HYDROELECTRIC PROJECT
Minutes of Task 11 Meetihg
July 14, 1980
1. Attendance. A meeting was conducted in the Columbia, MD, office of Acres
American Incorporated on July 14, 1980. Attendees included:
Professor Tony Merrett~ Economics Consultcmt
Or. Chris Chapman, Risk Analyst, AIMS
J. G. Warnock
J. D. Lawrence
C • A • De be 1 i us
A. Vircol
S. Omkar
P. H. Tucker (Part-time)
2. Purpose. The purpose of the meeting was to formulate an overall approach to
the conduct of financing and marketing studies (Task 11). In particular,
the focus was upon the project overview (Subtask lf.Ol) and a proposed set
of internal reports (Subtask lt.02) \~hich together s.hould provide the Alaska·
Power Authority (APA) with the necessary information. to present a reasoned
and coherent case on the Susitna Project as various decision points are
faced. If the Susitna Project is ever constructed it must be seen to be
11 robust" and the financial community as well as State and Feqeral decision
makers must see that the case for it is based on sound facts;
3. Giant Project Strategy. Professor Merrett drew a pardllel with the long
studied tunnel project which would connect England with mainland Europe.
Some lessons learned may prove useful in the study of the Susitna Project:
a. Early efforts should be applied to identification and analysis of
potential gaps which must be bridged if the project is to succeed. The
views of opponents and proponents alike must be considered and early
preparation is necessary to ensure that later challenges can be
adequately addressed when and i'f they occur ..
b. An overall strategy should be formulated now to minimize any future
surprises. Even if our studies lead to a later conclusion that
construction of the project is in the best interests of the State of
Alaska, it will still be necessary to demonstrate convincingly that the
conclusion is valid.
c. There is reason to believe the proposed project is in the national
interest. It follows that the federal government may be a source of
potential support.
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Minutes of Task 11 Meeting., July 14~ 1980 -2
d. One particularly difficult problem is that the project is likely to be
heavily loaded at the front end. Government support (State and Federal)
may be important.in resolving this issue.
e. We should recognize realistically that our task is to prepate an
"advocate's brief" based on the objective view that our case is right.
Some discussion ensured regarding the fact that' Acres has intended from the
start to be totally objective. It is inappropriate for us to be advocates
unless we are ourselves convinced that the project should be built. Now
that the study of alternatives has been removed from the Acres work~
however, it appears our mission has changed to that of identifying the most
viable Susitna Basin development which would meet future generation needs in
the Railbelt., Recomilendations as to whether a Susitna project should be
built in lieu of some othe~ alternatives will now be made by others.
4. Gaps. Or. Chapman observed that it is important to understand all of the
potential reasons for which the project might not be constructed, as \vell as
to address each such reason in a project overview report. His thoughts
paralleled those of Professor Merrett's regarding gaps. The following list
of gaps was compiled 'and discussed (economic issues underlined}:
1. Capital Costs
2. Low Cost Fuels
3. High Front End Loading
4. Need for Project
5. Vulnerability
6. Environmental Hazards
7. Native Land Ownership
8. Political Decisions -Alaska Undisturbed
9. Safety
10 . Re 1 i ab i 1 it y
11. Federal constraints
12. Tax exempt bond issue
13. "Bigness" of Project (Socioeconomic issues)
14. Fixation of Alaska Political Decision
5. Bridges. The group discussed some of the ways in which potential gaps may
be spanned. Professor Merrett asserted that if the case for Susitna is
found to be clear and overwhelmingly sound, the project will be in the best
interests of the State and Federal Governments. At that point, a position
of advocacy would be synonomous with patriotism. Identified bridges
include:
1 Federal fue1 constraints
• National oii ·dependence
• Resource conservation
• National ·emergency
• Quality of H. E. Oev. site
• Environmental credits
• Power portability {hydrogen)
• Basic need for utter reliability of supply
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Minutes of Task 11 Meeting, July 14, 1980 --3
6. Observations. A number of random observations were made by various group
members:
a. Professor Merrett suggested that we use a computer program to find those
parameters which might lead to minimization of the front end loading
problem.
b. The Fuel Use Act of 19.78 and the way in which it is implemented in
Alaska is an important consideration. J. D. Lawrence has requested an
analysis in this area. (The memorandum has been prepared in draft form
by P. Mo Hoover, Coordinator for Task 10.}
c. J. G. Warnock stated that one of the proposed internal reports in
Subtask 11.02 will address front end loading~ He also suggested that we
must take the \-Jorld energy situation into account as well as that for
the Nation and the State. The total demand for Alaskan resources must . I
be considered and the overall future economic climate must be carefully
evaluated.
7. Procedure. Professor Merrett addressed some procedures \'lhich might be
considered:
a. We should define the "optimal commercia.l project". Such a project might
have long term commercial viability and yield a 30% rate of return.
Though it might be found, it would probably be politically vulnerable
and might not provide bridges for all the identified gaps.
i b. Assuming that an "optimal commercial project" exists, we should attempt
to find the 11 maximally viable project". This latter would be one which
clearly could survive on all issues, has a reasonable rate of return
(possibly 15% or so), may be appt"'Opriate to a low demand scenario, and
is not politically vulnerable.
c. If a 11 maximally viable project" exists, we could move up from it step by
step as more facts become avai 1 able to bridge gaps.
d. The "maximally viable project" might be found through trial and error on
an appropriate computer program which takes into account cash flow,
rates of return, etc. A program previously written by Alan Sykes and
Pratt Keeping is available in Toronto and should be checked out.
J. G. Warnock wi 11 secure a copy of the program manual. Once \'le are
able~ to satisfy the basic economic issues, we should then check the
remaining gaps.
e. Criteria for the maxima 11 y vi·ab l e project estab 1 i shes its economic
"robustness 11
• Such criteria might include:
{1) Satisfaction of bond holders
(2) Acceptable economic return {>12%)
{3) Ability to finance {and cope with front end load)
(4} No major economic problems (e.g~, failing to need consumer demands
and acceptab1e to utilities.
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Minutes of Task 11 Heeti ng, July 14, 1980 · -4
8. Front End Load ReJ:....:rt. J. G~ Warnock led a discussion of the contents of
.the internal report (Subtask 11.02) which might be prepared. Contents would
have to cover such items as:
• Capita 1 Costs
• Schedules
• Cash flows
• Escalation trends
t Differential fuel escalation
• Demand projections
• Susitna capacity
• Alternative energy cost and availability
• Risk asessments
• Sensitivity analysis
• Cost of Money
• Operation and Maintenance Costs
• State incentives (describe'ways. in which State could mitigate
the front end load problem)
• Long term benefits \'Jhich the State might enjoy
I .g. Adjournment. The meeting adjourned at 3:30 p.m.
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Distribution:
1 each participant
Project fi 1 es
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5.20 -Chapter 20 -Appendices as Required
(i) Objective
To provide a vehicle for more comprehensive coverage of particular
subject areas.
( i i) Approach
It is anticipated that appendices to the Project Overview will be
gathered and bound as a second limited distribution volume.
Examples of candidates for this volume include internal reports prepared
under Subtask 11.02, laws establishing APA, executive summaries of
certain technical reports, etc. Chapter coordinators will be expected to
nominate materials for inclusion as appendices.
(iii) Schedule
To be established as chapters are completed.
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I·· 6 -DUTIES OF KEY PERSONNEL
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6-OUTIES·OF KEY PERSONNEL -
6.1 -Chapter Coordinator
The chapter coordinator will be expected to accomplish the following:
(a) . Review this manual within three days of receipt, paying particular
attention to the content of-chapters assigned to him.
(b) Make recommendations to the Editor (C •. Debelius) as soon as possible if it
.
appears that the chapter content should be changed. (This effort is
particularly important s~nce each chapter coordinatot should have an
opportunity to rnfer to other chapters as appropriate. We should publish
addenda to this manual (if required) as early as·possible so that we
minimize abortive efforts).
(c) Determine what assistance is required and from whom in order to put
together the draft chapter on schedule and with~n assigned manhour
budgets.
{d) Break down assigned chapter budget as necessary and provide designated
assistants with sufficient manhours to complete their portions of the
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chapter. Give each such assistant a sche~uled date when his material
must be returned to you so that you can meet your schedule for submission
of the completed draft chapt~r. (Note that manhour budgets do not include
secretarial time. All secret~1·ial effort is charged to a sub-number in
Task 00).
(e) Give early consideration to appropriate illustrations--particularly
photographs--so that such material can be assembled and submitted with the
draft chapter.
(f) Prepare and submit-assigned draft chapter in accordance with the general
procedures in Section 3 of this manual and consistent with assigned chapter
content as described in Section 5.
·.
'
(g) Review the edited or rewritten version of your draft chapter in accordance
with the assigned schedule to ensure that the contents correctly reflect
study findings as they are then known. (Note that subsequent reviews by
the Technical Study Director and the Project Manager are also scheduled.
Thus, it is important that you accomplish your own review as quickly as
possible to ensure that the entire Project Overview is completed and
_published prior to ~he Gover~or's decision point).
(h) Provide a memo to the Editor if at any t. ime subsequent to subm_itt ing your
draft chapter there has been any change in your subject_area of sufficient
importance to warrant a change in"the text to appear in the final"version
of the Overview.
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6.2 -Reviewers
.
Reviewers will recommend any changes which in their opinion are necessary to
ensure our product is factual, concise, and that it reports results in an
unbiased fashion. Remember that the Project Overview must present the APA case
to the Governor. The quality of Acres performance must be evident in the
professional ism of our approach, but we must not "beat our .own drum ...
....
6.3 -Editor
The Editor will coordinate the preparation of the entire project. He will be
responsible to the Project Manager for the timeliness and quality of the work.
To the extent that it is necessary to ensure uniformity of style and comparable
depth of coverage in various 'areas, he will rewrite initial draft materials as ·
necessary.
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6.4 -APA Staff
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Assistance is sought from the APA staff in a number of areas:
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(a} Preparation of the draft chapter on Public Involvement (Chapter 14).
I (b) I Providing information as requested by the Chapter 3 Coordinator to support
accurate descriptions of•the Authority.
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~· (c) Reviews of sensitive material from time to time, and particularly revi:ew in
a timely fashion of the proposed final draft.
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7 -CONSOLIDATED BUDGET AND SCHEDUlE
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7 -CONSO~IDATED BUDGET AND SCHEDULE
A draft schedule is provided at Figure 7 .1. It is important to note that we are
faced with an absolute deadline of March, 1981, to get the completed report to
the printers. Failure to meet this date can have disastrous consequences since
one of our key objectives is to provide comprehensive information to the Office
of the Governor before the end-March decis~on point. Thus, preceding individual
chapter deadlines cannot ea~ily·be slipped.
A tentative manhour budget and page estimate summary is presented in Table 7 .1 ..
Keep in mind that budgeted manhours do not generally provide for 9riginal
research. To the extent that such research is required, it should be
\ .
accomplished as a part of other subtasks.. The Project Ovev-view should draw upon
work already completed or in progress and upon plans already made.
It should be noted that our current expectation is that the number of pages
(exclusive of figures and tables) is expected to decrease as the Project
Overview evolves. Even so, neither the total chapter page estimates in Table
7.1 ncir the individual section page esti~ates contained in Section 5 of this
.
manual are fixed. If the complete message can be conveyed with fewer pages,
chapter coordinators are encouraged to do so. If more are required, use them.
Once the individual chapters are· assembled in the first draft report, an effort
\..,ill be made to balance the level of detail from chapter to chapter.
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TABLE 7.1
PROJECT OVERVIEW PAGE ESTIMATES AND MANHOUR SUMMARY
PREPARATION
OF DRAFT
ITEM CHAPTERS
1. Introduction 40
2. Sumnary 40
3. APA 40
4. Susitna Project 60
5. Econ. Parameters 60
6. Forecasts 60
7. Basin Studies (-.~~9J
8. Expansion Plan 100
9. Susitna qevelopment cJD .
10. Env i ronmenta 1 80
11. Socioeconomic 40
12. Econ. Feasibility 40
13. Marketing 40
1~. Public Opinion
15. License/Permits 60
16. Financial Feasibility 60
17. Security Capital . 40
18, Organ. & Manage 40
19. Implications 100
20. Appendices ---
Subtotals 1,080
First Draft Report
Final Draft Report
Final Report
TOTAL· 1,080
INCLUDES:
. Hours Subtask 11.01 Budget ( 800)
Hours ?5700.00 Budget (280)
EDITING,
REWRITE
15
30
30
30
30
30
20
15
15
15
15
20
20
15
300
100
80
60
540
. {280)
(260)
REVIEW
B
8
8
8
8
12
12.
12
8
a·
8
8
·a
8
8
.8
140
24
12
8
184
(144)
( 50}
PAGE
ESTIMATES
5
15
10
20
25
15
30
22
. 36
40
10
15
12
20.
16
12
10
10
15
322
300
275
250
_ .........
-- ---1----' .
SCHEDULE SHEET (DRAFT) -FIGURE 7.1
CHA~GE NO P5700.11.01001
CLIENT ALASKA POWER AUTHORITY
PRO~ECT,~~~~~~~~~~~~---------------------
p
NOVEf.BER
DESCRIPTION
1 7 13 19 25
---
LEGEND
Reviewed
Issues sent out
Pri.nted
JANUARY
18
----' -
SHEET....!._OF __!__
PREPARED ev_C:.;.A~D _____ OA~ .. :November 11. 1980
PRO~ECTAPPROVAL------~-----------------
FEBRUA~Y
5 11
MARCH
23 1 7 13 19 25 31