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Home My WebLink AboutSUS266Public Meetings on :l. ' PROPOSED SUSITNA HYDRO -To provide economic, fin r1 ncial and envi ronmental update of the project -To receive public comment FAIRBANKS April13 7 • 10 PM (Update & Public Comm ent) Captain Bartlett Hotel 14 1 • 7 PM (Public Commen t) ANCHORAGE April16 7 • 10 PM (Update & Public Commen1) Anchorage Westward 17 1 • 7 PM (Public Comment) Hilton PALMER Apri119 7 • 1 0 PM (Update & Public Comment) Borough Assemboy 20 1 • 7 PM (Pu'llic Comm ent) Chambers SOLDOTNA April 24 7 • 10 PM (Update & Public Comment) Kenai Peninsula 25 1 • 7 PM (Public Co mmen t) Borough Assembly Room Susitna Project Economic and Financial Update Draft Re port is available at local libraries an d utilities , and the Alaska Power Authority Office. Alaska Power Authority 276-0001 Larry Crawford Executive Director SUSITNA PROJECf HISIORV 1980 • Plan of study for feasibility approved • Battelle Pacific Northwest Laboratories begins separate alternatives analysis • Public participation program begins 1975 • Corps of Engineers completes project study and Draft Environmental Impact Stateme nt (EIS) on proposed federal Susitna Project 1982 • Feasibility study complete • Project judged feasible • Power Authority Board recommends submitting license application continuing design/ environmental work 1976 • Alaska Power Authority establi sh<>d to provide project finan c ing 1983 • Ucense application submitted to Federal Energy Regulatory Commission (FERC) • FERC formally accepts application • Environmental and engineering studies continue • In-state settlement process begun .... 1977 • Corps continues e ngineering and environmental studies • State financing of Corps' project considered 1984 • Finance plan submitted toFERC o FE~C Draft EIS • Need-for-Power Hearings 1979 • Corps studies alternatives, proposes study program • Federal funds unavailable; State assumes project • Power Authority selects Acres American Inc. to conduct feasibility study rather t han Corps Future • FERC Final EIS • Environmental and Dam Safety Hearings • Initial Power Sales Agreements • FERC Ucense approval • Begin design and construction ALASKA POWER AUTHORITY Susitna Hyd r oelect r ic Project Public ~eetings Agenda , April 13 -25 , 1984 WELCOME ••.....••..••.•..•...••.•......••.....•.... Power Authority PROJECT INFORMATION PRESENTATION •.•...... ~ ..••.•.• Power Authority '"' QUESTIONS AND ANSWERS •••.•..••.............•.•••.• Power Authority P~~IC TESTIMONY •.••..••.••.••...•. Until comme nts have been heard CLOSING ........................................... Powe r Authority 748/161 /01 SUSITNA HYDROELECTRIC PROJECT PUBLIC MEETINGS April 13 -25, 1984 Interested officials and members of the publi c are invited to express their comments and ask questions about the proposed Susitna Hydroelec- tric Project in this se ries of public meetings being held in Fa irbanks , Ancho rage, Palmer, and Soldotna. During these meetings the Alaska Power Authority will prov ide an econom- ic, financia 1 and en vi ronmenta 1 update on the Susitna Hydroelectric Project and receive public c0111nen ts on all aspects of the pro j ect, including the following report : Susitna Hydroelectric Project Economic and Financial Update Draft Report, Feb ru~ry 27 , 1984 Alaska Power Aut hority Copi es of thfs report are avaflab~e for review at the sign-in area; please return the reports to this area prior to leav ing. The report has bee n provided to loca l libra ries , utilities, Chambers of Co rrmerce, and Hayora 1 offices. During these meetings, persons may give their statements orally or in writ ing. Written c011111ents will be accepted at the meetings or can be mailed. A blue comnent fonn is availab le at the sign-in area. This form is ready for mailing or can be deposited in the box at the sign-in area. All mailed comments should be provided to the Power Authority prior to May 4, 1984 to insure their consideration for incl uding in the final Update report . If you are giving public testimony, please sign-up on the sheet provided. A box has been provided at the testimony area for those who have a typed/written copy of their testimony. A green form is available for those wh o would li ke to have a question answered during these meetings but do not wish to give public testimony. These meetings will be recorded and transcribed by a court reporter. All statements (o ral and written ) wil l become part of the public files associated with the Susitna Hydroelectric Project. 479/178/D3/F8 /2 0 1>'l oo o "l.. 0 0 () I ~ 1~ l., Aih-1(; I $.:../,-..._ \ 1 ;....._~ I ~ ¥ v --z"'-· " . SUSITNA HYDROELECTRIC PROJECT WRimN COIDT NAME : ADDRESS: OR6MIZATION AFFILIATION: C<II£NT : SUSITNA HYDROELECTRIC PROJECT April 13-25, 1984 Public Meetings If you would like to have a question answered during these ..etings, please cQ~Plete this fona. N-: Address : Organization Affiliation: MliTTEN QUESTIOI NAME: ADDRESS: OR6MI1ATION AffiLIATION: CCI lOT: SUSITNA HYDROELECTRIC PROJECT Please place in Written Ca..ent Box in Sign-In Area prior to leaving the -eet- ing, or fold, stlllp ar!d •11 by May 4, 1984. 705/188 FOLD ------------------------------------hst~fl~- W111 Not Deliver Ma11 W1thout Stulp Susi~n• Project Office Alaska Power Author1ty 334 West 5th Avenue, Second Floor Anchorage, Alaska 99501 FOLD -----------------------·------------------- 705/188 ./ ; i . THE SUSITNA PROJ ECT INTRODUCTION The Alaska Power Author i ty has filed for a Federal Energy Regu- latory Commission (FERC) license to construct and operate the Susitna hydroelectric pro j ect. The Susitna project would play a major role in meeting the future e l ectrical demand of the Alaskan Railbelt, where over 70 percent of the State's pQpulation currently resides. PREVIOUS STUDIES A U. S. Bureau of Reclamation reconnaissance study completed in 1948 first identified the hydroelectric potential of the Susitna River Basin. A project feasibility study was completed by the Bureau in 1g61. It recommended a five stage river development plan be authorized by the U.S. Congress. The U.S. Army Corps of Engi- neers completed a comprehensive feasibility study in 1975 and recommended a two dam development concept. This report was updated 1n 1979 with Devil Canyon and Watana being reaffirmed as the appropriate sites. The economic feas i ~ility was also reaffirmed . POWER AUTHORITY STUDIES Pursuant to a request from the 1g8o Legislature, a detailed study of the economic, engineering, environmental, and financial fea- sibility of the project was undertaken for the Power Authority by Acres American, Inc. To ensure an independent and objective evaluation of alternatives, the 1980 State Legislature had also requested that an independent consultant prepare a study of Railbelt electrical power alternatives. Accordingly, the Off i ce of the Governor contracted with Battelle Pacific Northwest Labora- tori es, Inc. (Battelle) to analyze and prepare a series of reports on alternative means of meeting anticipated Railbelt electri c power demand, including a forecast of electrical power demand in the Railbelt through the year 2010. The Power Authority's study was completed in April, 1982 and concluded •that there i s a high probability that development of the hydroelectric potential of the s~sitna Basin would provide signifi- cant cost advantages when compared to alternative means of me.eting projected Rail belt power demands ••• " On April 26, 1982 the Power AuthoritJ Board of Directors forwarded their recommendations to the Governor and the Legislature concern- ing the future development of the Su5~S tna project. The Board's recommendations were: 741/192/010/F2 - 1 - 1) The Pow~r Authority should continue pre-construction developmental efforts of the Susitna project; 2) The Legislature should authorize the Power Authority to submit a FERC license application; and 3) The Legislature should appropriate additional funds for the continuation and intensification of environmental studies, site exploration, and initiation of project des i gn. Based on the Board's recOII'IIlendation, the Legis 1 ature authori ~ed funds for the continuation of pre-construction activities on the Sus itna project. In its December 19B2 report, Battelle concluded that the Susitna project would provide the lowest cost of power over an extended time periOd and be the most resistant to inflation. An addendum to that report noted that there had been a decline in world oil prices dur i ng the period from January through March, 1982. Although these lower world oil prices would mak~ the Susitna project less attrac- tive economically, the addendum concluded that the Susitna pro j ect still was the best means of meeting the Railbelt's long-term power requirements. The Susitna hydroelectric project FERC license application was prepared based on data developed in the feasibility and project alternatives studies and, with Legislative authorization, was filed with the FERC on February 28, 1983. Noting the sensitivity of the project's economic feasibility to world oil prices, the FERC directed the Power Authority to refine the relevant studies in the application to reflect up-to-date projections of world oil prices and other sensitive data. In order to provide revised electrical demand forecasts, the Power Authority retained Battelle Northwest to review the conputer-based electrical demand forecastin9 effort. This effort was necessary to respond to FERC's specific request regarding forecasting me t hodolo- gy as well as to provide a means of periodically updating the project feasibility. On July 11, 1983, the oower Authority complied with the FERC directive and submitted supplemental data and an electric power demand forecast based on a "no supply disruption" oil price fore- cast developed by Sherman H. Clark Associates (S~CA), a firm specializing in oil price forecasting. The SHCA projection was adopted by the Power Authority Board of Directors after extensive review of several other world oil price forecasts and is almost identical to the State Department of Revenue Forecast (DOR) used in the December 1983 Department of Revenue. Petro 1 eum Revenue Fore- cast. The electrical demand forecast of a 2.8 percent increase per 741/192/010/F2 -2 - year incorporated the effects of world oil prices as forecast by SHCA and suppo r ted the economic feasibility of the project. The license application, as supplemented, was accepted by the FERC on July 2g, 1983. FERC is presently estimating that t he license could be issued in March 1g87. This schedule includes 20 mo nths for Need for Power and Environmental/Dam Safety Hearings. ECONOMIC AND FINANCIAL UPDATE ORAFT REPORT Concurrent with FERC's directive to address the 1g93 reduction in world oil prices, the P<*er Authority Board of Directors instructed the Power Authority sta~f to prepare a complete "update" report on the economic and finauc1a1 feasibility of the project . The report was to u!'e the most current data on the key economic variables affecting the project's feasibility, including world oil prices and the pricing and availability of alternative fuels. CONCLUSIONS OF UPDATE DRAFT REPORT The Draft Susftna Economic and Financial Update Report was present- ed to the Power Authority Board of Directors on Marth g, 1984. The Draft Update report concludes: 0 0 0 0 Assuming the SHCA forecasted world oil pr ices, the Susitna project is economically more attractive than non-Susitna alternative plans. The construction of the Susitna project would result in a cost savings of $1.06 billion (in 1983 dollars) over the non-Su.sitna alterna- tives during the first 50 years of operation. The construction cost estimates in 1983 dollars for th-e Watana and Devil Canyon phases as submitted to the F~RC are $3 .8 and $1 .6 billion, respectively. System design refinements could result in a reduction of the Watana phase costs of approximately S300 million. The electric energy demand forecast for the Ra i lbelt fs sufficient to absorb the entire output of the Watana phase of the project i n 1996. Based on either of two recomnended financing options, about $2 billion (1g83 dollars) in State equity and rate 5tabflfzation fund contributions will be required for the total project. These contributions are necessary to ensure that the initial cost of energy from Susitna will be marketable. If REA or tax exempt financing cannot be made available, the State's equity contribution may have to be increased. 741/lg2/D10/F2 -3 - 0 SUft4ARY Major changes in economics and i n load projections could change the anticipated cost savings of the Susftna project . Lower wor 1 d oil prices, 1 ower energy demand, higher construction costs or higher interest rates could reduce project feasibility. Conversely, higher world oil prices, higher energy demand, lower Susitna construction costs, or lower i nterest rates would increase the Susitna project's feasibility. The results of both the Sus f tna feasibility study and the update of that study indicate that the Railbelt electrical energy generating capacity will have to be increased to meet projected demand. The limited supply of natural gas fn Cook Inlet and the projected high cost of natural gas from the North Slope are expected to require the Railbelt electrical utilities to look to other energy sources for electrical generation. The most likely options for electrical power generation for t~e Railbelt appear to be either the Susitna hydroelectric project or a fossil fuel-based alternative. This fossil fuel-based alternative would rely primarily on coal-fired generat i on after the year 2000. The Power Authority has conducted extensive engineering, environ- tnental, economic, and financial feasibility studies of both the Susitna project and non-Susitna alternatives. The conclusion of these studies and of the Draft Update fs that the Susitna project is economically feasible and can provide long-tenn benefits over the non-Susitna alternatives. In order to compare the Sus1tn11 and non-Susftna a1 1:ernatives, the long-tenn costs and benefits o ;: the projects ~rust be carefully considered. Hydroelectric pro j ects differ considerably from thermal projects such as gas and coal-fired generation. A hydro- electric project is characterized by high front-end con struction costs, low operating costs, and a useful life of 50 years or more, whfle thermal plants generally have lower front end costs, high operating costs, and a life of 25 to 30 years. The cost of power from a hydroelectri c project is relatively insensitive to inflation once construction is complete, while the cost of power from a thermal plant i ncreases as the fuel cost inflates . Over a period of time, the annual operating costs of a thermal plant may more than offset the high early capital costs of a hydroelectric facility . A graphic example of these cost differen- tials is as follows : 741/192/Dl0/F2 - 4 - / r:r:: ..... :a ~ .... 0 ..... o;, 0 u THERMAL Tl!1E (years) A hydroelectric project is usually developed for maxirtum uti - lization of the facility over the life of the project and may have some exc~ss capacity in the early years of operation, while thermal plants can be added in small inc rements that more closely ~tch the growth in power requirements. The Railbelt is reachin~ a criticill period in which increilsed elec trical generation capacity will be required. Electrical demand in the Railbelt is predicted to increase, and several utilities have publically discusserl problems associated with providing adequate generation to mi'!Pt those p :·ojected nE>eds. The decision ~o~"ether to inves t State funds in the developmrnt of the Sus itna hydroelectric project or to rely upon non -Su sitna alternat ivE'S is one that ~fill bE' madP by the people of the State th r ough tneir elected representatives. PURPOSE OF MEETING The purpose of tonight's rr.ee ting is to brief the public on the current status of the Susitna project, including the ft ndinqs of the Draft Updat(l report, and to take public conment. 741/192/D IO /F2 - 5 -