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Susitna-Watana Hydroelectric Project Document
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Title:
Susitna Hydroelectric Project, project evaluation interim memorandum :
final
SuWa 194
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Prepared by HDR Alaska, Inc., HDR/DTA, Northern Economics
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AEA-identified series, if specified:
Series (ARLIS-assigned report number):
Susitna-Watana Hydroelectric Project document number 194
Existing numbers on document:
Published by:
[Anchorage, Alaska : Alaska Energy Authority, 2009]
Date published:
March 16, 2009
Published for:
Prepared for Alaska Energy Authority
Date or date range of report:
Volume and/or Part numbers:
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Final
Document type:
Memorandum
Pagination:
ii, 34 p.
Related work(s):
Pages added/changed by ARLIS:
Notes:
Contains appendix title pages A-D without textual content.
From the Alaska Energy Authority's Susitna Reports webpage (September 23, 2013).
All reports in the Susitna-Watana Hydroelectric Project Document series include an ARLIS-
produced cover page and an ARLIS-assigned number for uniformity and citability. All reports
are posted online at http://www.arlis.org/resources/susitna-watana/
Susitna Hydroelectric Project
Project Evaluation
Interim Memorandum
FINAL
Prepared for:
Alaska Energy Authority
813 West Northern Lights Boulevard
Anchorage, Alaska 99503
Prepared by:
HDR Alaska, Inc.
2525 C Street, Suite 305
Anchorage, AK 99503
HDR | DTA
Formerly Devine Tarbell and Associates
5825 221st Place SE, Suite 202
Issaquah, WA 98027
Northern Economics
880 H Street, Suite 210
Anchorage, Alaska 99501
March 16, 2009
Alaska Energy Authority
Susitna Hydroelectric Project Evaluation
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Contents
Executive Summary....................................................................................................................................1
1 Background.........................................................................................................................................4
1.1 Project Scope.............................................................................................................................4
2 Preliminary Energy Estimate............................................................................................................6
2.1 Hydrologic Analysis..................................................................................................................6
2.2 Energy Model Analysis.............................................................................................................6
3 Preliminary Cost Estimate ..............................................................................................................11
3.1 Original Cost Estimate............................................................................................................11
3.2 Updated Cost Estimate............................................................................................................11
3.3 Operations and Maintenance Cost Estimate............................................................................12
4 Preliminary Project Schedule .........................................................................................................14
5 Economic Analysis............................................................................................................................16
5.1 Watana.....................................................................................................................................21
5.2 Low Watana ............................................................................................................................22
5.3 Watana/Devil Canyon.............................................................................................................23
5.4 Staged Watana/Devil Canyon .................................................................................................24
5.5 Devil Canyon...........................................................................................................................25
6 Regulatory and Environmental Issues ...........................................................................................26
6.1 Fisheries Impacts.....................................................................................................................26
6.2 Botanical Impacts....................................................................................................................27
6.3 Wildlife Impacts......................................................................................................................27
6.4 Cultural Resource Impacts ......................................................................................................28
6.5 Carbon Emissions....................................................................................................................28
7 Summary...........................................................................................................................................29
8 Recommendation..............................................................................................................................30
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Tables
Table 1 Summary........................................................................................................................... 3
Table 2.1 Preliminary Energy Estimate......................................................................................... 8
Table 3.1 Preliminary Cost Estimate........................................................................................... 12
Table 4.1 Power Generation Time Estimates .............................................................................. 15
Table 5.1 Average Cost of Electricity Per Kilowatt Hour........................................................... 19
Table 5.2 Average Cost of Electricity Per Kilowatt Hour at Varying Interest Rates.................. 19
Table 7.1 Summary...................................................................................................................... 29
Figures
On or following page
Figure 2.1 Energy Estimates for Susitna Project Alternatives........................................................7
Figure 2.2 Capacity for Susitna Project Alternatives......................................................................8
Figure 2.3 Seasonal Energy for Susitna Alternatives with Rule Curve to Maximize Winter
Generation......................................................................................................................9
Figure 2.4 Seasonal Capacities of Susitna Alternatives with Rule Curve to Maximize Winter
Generation....................................................................................................................10
Figure 5.1 Cost of Electricity per Kilowatt Hour for Susitna Hydroelectric Alternatives ...........18
Figure 5.2 Watana Cost of Electricity...........................................................................................21
Figure 5.3 Watana Annual Construction Expenditures and Total Debt .......................................21
Figure 5.4 Low Watana Cost of Electricity..................................................................................22
Figure 5.5 Low Watana Annual Construction Expenditures and Total Debt...............................22
Figure 5.6 Watana/Devil Canyon Cost of Electricity...................................................................23
Figure 5.7 Watana/Devil Canyon Annual Construction Expenditures and Total Debt................23
Figure 5.8 Staged Watana/Devil Canyon Cost of Electricity.......................................................24
Figure 5.9 Staged Watana/Devil Canyon Annual Construction Expenditures and Total Debt....24
Figure 5.10 Devil Canyon Cost of Electricity ..............................................................................25
Figure 5.11 Devil Canyon Annual Expenditures and Total Debt.................................................25
Appendices
Appendix A Energy Analysis Input and Results ......................................................................... 31
Appendix B Detailed Cost Estimates.......................................................................................... 32
Appendix C Detailed Schedules .................................................................................................. 33
Appendix D Economic Analysis Input and Results..................................................................... 34
Alaska Energy Authority
Susitna Hydroelectric Project Evaluation
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Executive Summary
A hydroelectric project on the Susitna River has been studied for more than 50 years and is again
being considered by the State of Alaska as a long term source of energy. In the 1980s, the project
was studied extensively and a license application was submitted to the Federal Energy
Regulatory Commission (FERC). The project was cancelled in 1986 due to a variety of reasons.
In 2008, the Alaska State Legislature authorized the Alaska Energy Authority (AEA) to perform
an update of the project. That authorization also included an Integrated Resource Plan (IRP) to
be performed by others to evaluate the ability of this project and other sources of energy to meet
the long term energy demand for the Railbelt region of Alaska. Hydroelectric power is of
particular interest to the IRP because it provides stable electricity rates due to renewable river
flow, rather than the fluctuating rates of fossil fuel-generated electricity.
HDR was contracted by AEA to update the 1980s cost estimate, energy estimate, and schedule
and to evaluate the economics of the project. This report summarizes the results of that study.
Based largely on the 1986 FERC license application, the following project development
alternatives have been reviewed and updated.
Watana. This alternative consists of the construction of a large storage reservoir on the
Susitna River at a site named Watana, with an 885-foot-high rock filled dam, and a
powerhouse containing 6 turbines with a total installed capacity of 1,200 megawatts
(MW).
Low Watana. This alternative consists of the Watana dam constructed to a lower height
of 700 feet, along with a powerhouse containing 4 turbines, with a total installed capacity
of 600 MW.
Watana/Devil Canyon. This alternative consists of the full-height Watana development,
plus a second reservoir located downstream at a site called Devil Canyon. This
downstream reservoir would re-regulate river flow and be impounded by a 646-foot-high
concrete dam. The Devil Canyon powerhouse would have an installed capacity of 680
MW. After the FERC license is issued, these 2 dams and powerhouses would be
constructed sequentially without delays. The combined Watana/Devil Canyon
developments would have an installed capacity of 1,880 MW.
Staged Watana/Devil Canyon (low height Watana, plus Devil Canyon, plus full-height
Watana). This alternative would ultimately result in the same configuration as the
previous alternative, but the Watana dam would be initially constructed to the lower
height and the Watana powerhouse would only have 4 out of the 6 lower-head turbine
generators installed. The Watana construction crew would demobilize and move
downstream to construct the Devil Canyon dam and powerhouse, then either demobilize
again, delay further construction, or return upstream to complete the Watana dam to its
full height and install the remaining 2 units. The staged capacity of Watana would
increase from 600 MW to 1,200 MW for a total project capacity of 1,880 MW.
Devil Canyon. This alternative consists of the Devil Canyon dam, without Watana dam,
with a Devil Canyon powerhouse containing 4 turbines, with a total installed capacity of
680 MW. Note that Devil Canyon was intended to be a regulating dam, paired with the
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Watana reservoir. Without the larger upstream Watana reservoir, the Devil Canyon
alternative would have minimal storage for providing power in winter.
Energy for each of the project alternatives was estimated. Susitna project hydrology, along with
reservoir, waterway, and turbine-generator performance data were developed. Model inputs
including daily flow for the period of record, reservoir capacity curves, spillway capacity, and
tailwater curves were updated, based largely on the 1980’s studies, license application, and
amendment.
Cost estimates for each alternative were updated. These updates were based on the original
1983 FERC application, including its preliminary design, quantities and associated cost estimate,
with several modifications from a 1986 license amendment. For the water-to-wire turbine-
generator equipment cost estimates, budget pricing was requested directly from manufacturers. A
contingency of 20 percent of direct construction costs was set, which is typical for preliminary
design. Project licensing, environmental studies, engineering design and construction
management, were estimated at 11 percent of direct construction costs. Cost estimates were
developed using conservative assumptions and further review of existing infrastructure and
industry practices may reduce costs.
The project schedule was updated to reflect changes in federal and state regulations, including
several significant environmental legislation acts and modifications to the FERC licensing
process. Based on the modern Integrated Licensing Process (ILP), obtaining the FERC license
for Susitna is expected to require an ambitious sustained effort, with issuance of the license
expected in approximately 8 years. The licensing process would involve extensive public
outreach, stakeholder involvement, and coordination of fishery, botanical, wildlife, cultural
resource, and other supporting studies. This approach would by necessity be much more
comprehensive than the license process in the 1980’s. To expedite the overall schedule to bring
the project on line, environmental field studies and engineering design would be developed in
parallel with the license application.
Preliminary economic analyses were also developed for each project alternative to determine the
average cost of electricity per kilowatt hour. These economic analyses were based on the updated
estimates of cost, energy, and schedule for each of the project alternatives, thereby identifying
the economically preferred alternative. For this preliminary analysis, the following major
assumptions were used to compare each alternative:
1. No inflation
2. 100 percent financing with no capital contribution by the State
3. Bond interest rate is 5 percent with a term of 50 years
4. All energy will be sold
5. Debt coverage ratio of 1.25
6. Ongoing O&M and capital expenditures costs and schedule as estimated in Section 3.3 of
this report.
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These assumptions provide the basis for a relative comparison between the alternatives.
The results of this study are summarized in Table 1. The Watana/Devil Canyon alternative is the
most cost effective per unit of energy. The Devil Canyon alternative does not provide a stable
winter energy supply although its cost per kWh is lower than the other alternatives.
Table 1 Summary
Cost per kWh ($)
Alternative
Ultimate
Capacity
(MW)
Construction
Cost
($billion)
Energy
(billion
kWh/yr)
Schedule
(years) First 50
Years
Second 50
Years
Watana 1,200 8.4 3.1 15 – 16 0.22 0.01
Low Watana 600 6.9 2.4 14 - 15 0.20 0.01
Watana/Devil
Canyon
1,880 11.7 7.2 15 - 20 0.14 0.01
Staged
Watana/Devil
Canyon
1,880 12.8 7.2 14 - 23 0.18 0.01
Devil Canyon 680 5.0 2.9 14-15 0.13 0.02
Hydroelectric power has many economic and environmental benefits including long-term rate
stabilization. Because the cost of the water to power a hydroelectric turbine is essentially free the
cost per kilowatt hour is related to the construction and maintenance costs of the dam and
powerhouse facilities. As we have seen recently, the price of fossil fuels can fluctuate
dramatically over time whereas the cost of hydroelectric power decreases once the initial
investment has been repaid and remains low and stable for the life of the project. Consequently
the economic risk associated with hydroelectric power is substantially lower than thermal power.
Additionally, the life cycle carbon dioxide production of hydroelectric facilities is orders of
magnitude less than thermal power plants.
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Susitna Hydroelectric Project Evaluation
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1 Background
The Susitna River has its headwaters in the mountains of the Alaska Range about 90 miles south
of Fairbanks. It flows generally southwards for 250 miles before discharging into Cook Inlet just
west of Anchorage. Contained entirely within the south central Railbelt region, the Susitna River
is situated between the two largest Alaska population centers of Anchorage and Fairbanks.
The Bureau of Reclamation first studied the Susitna River’s hydroelectric potential in the early
1950s, with a subsequent review by Corps of Engineers in the 1970s. In 1980, the Alaska Power
Authority (APA; now the Alaska Energy Authority) commissioned a comprehensive analysis to
determine whether hydroelectric development on the Susitna River was viable. Based on those
studies, the APA submitted a license application to the Federal Energy Regulatory
Commission (FERC) in 1983 for the Watana/Devil Canyon project on the Susitna River. The
license application was amended in 1985 for the construction of the Staged Watana/Devil
Canyon project at an estimated cost of $5.9 billion (1985 dollars).
Developing a workable financing plan proved difficult for a project of this scale. When this
existing difficulty was combined with the relatively low cost of gas-fired electricity in the
Railbelt, the declining price of oil throughout the 1980s, and its resulting impacts upon the State
budget, the Power Authority’s Board of Directors terminated the project in March 1986.
At that point, the State of Alaska had appropriated approximately $227 million to the project
from FY79-FY86, of which the project had expended $145 million to fund extensive field work,
biological studies, and activities to support the FERC license application. Though the Power
Authority concluded that project impacts were manageable, the license application was
withdrawn and the project data and reports were archived to be available for reconsideration
sometime in the future.
In 2008, the Alaska State Legislature, in the FY 2009 capital budget, authorized the AEA to
reevaluate the Susitna Hydro Project. The authorization also included a Railbelt Integrated
Resource Plan (IRP), which will evaluate various sources of electrical power to satisfy the long
term energy needs for the Railbelt-portion of Alaska. To date the IRP has not yet been
completed.
The Susitna and other hydroelectric projects are of particular interest to the AEA and the State
because hydroelectric power, unlike gas-fired electricity, is not tied to the fluctuating price of
fuel, and can provide long-term rate stability, which in turn allows for long-term growth
planning.
1.1 Project Scope
The scope of this new study was to collect and review pertinent information from the original
studies and license application from the 1980’s. Using this past work as a basis, this reevaluation
estimated project energy and projects costs; developed a project schedule; and, using this
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information, evaluated in 2008 dollars the economics for the development alternatives generally
described in the 1983 FERC license application.
Both the initial FERC license application and this reevaluation analyzed several project
alternatives:
Watana. This alternative consists of the construction of a large storage reservoir on the
Susitna River at a site named Watana, with a new rock filled dam 885-foot-high, with a
powerhouse containing 6 turbines, with a total installed capacity of 1,200 megawatts
(MW).
Low Watana. This alternative consists of the Watana dam constructed to a lower height
of 700 feet, along with a powerhouse containing 4 turbines, with a total installed capacity
of 600 MW.
Watana/Devil Canyon. This alternative consists of the full-height Watana development,
plus a second reservoir located downstream to re-regulate river flow, impounded by a
new 646-foot-high concrete dam, at a site named Devil Canyon. The Devil Canyon
powerhouse would have an installed capacity of 680 MW. After the FERC license is
issued, these 2 dams and powerhouses would be constructed sequentially without delays.
The combined Watana/Devil Canyon developments would have an installed capacity of
1,880 MW.
Staged Watana/Devil Canyon (low height Watana, plus Devil Canyon, plus full-height
Watana). This alternative would be the same as the previous alternative, but the Watana
dam would be initially constructed to the lower height and the Watana powerhouse would
only have 4 out of the 6 lower-head turbine generators installed. The Watana construction
crew would demobilize and move downstream to construct the Devil Canyon dam and
powerhouse, then either demobilize again, delay further construction, or return upstream
to complete the Watana dam to its full height and install the remaining 2 units. The
staged capacity of Watana would increase from 600 MW to 1,200 MW for a total project
capacity of 1,880 MW.
Devil Canyon. This alternative consists of the Devil Canyon dam, without Watana dam,
with a Devil Canyon powerhouse containing 4 turbines, with a total installed capacity of
680 MW. Note that Devil Canyon was intended to be a regulating dam, paired with the
Watana reservoir. Without the larger upstream Watana reservoir, the Devil Canyon
alternative would have minimal storage for providing power in winter.
A total of 7 alternatives were evaluated. Only the 5 alternatives listed above are presented in this
report. A Watana alternative with 6 turbines and a Devil Canyon alternative with 6 turbines were
evaluated and found to have higher construction and capital costs with only a minimal increase
in energy thus resulting in higher energy costs when compared to the same alternatives with 4
turbines. Thus the 6 turbine options for these alternatives were eliminated from further
consideration.
Preliminary energy, cost, and schedule estimates for the 5 analyzed alternatives are described in
Sections 2 through Section 4, economic evaluation in Section 5, and regulatory and
environmental issues in Section 6.
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2 Preliminary Energy Estimate
2.1 Hydrologic Analysis
To develop an updated energy estimate for the Susitna hydroelectric project the existing
hydrologic record was updated. At the time the original study was issued in 1983 the hydrologic
record contained data from 1950 to 1981. The project team recreated that record from
synthesized gage record hydrology for the Watana/Devil Canyon dam sites, transposed from raw
daily flow data from United States Geological Survey (USGS) gauge 1529000 at Gold Creek
using a straight drainage area proration, and found correlation between the new record and the
annual average flow from the original study. Based on this hydrology, a full record was
developed for the period from 1950 to 2007. The hydrology of the upper Susitna Basin is
dominated by melt water from snow and glaciers in the spring and summer, and substantial
freezing during the winter months. As a result, a majority of the flow occurs between mid-April
and mid-October.
A review of current literature indicates a lack of consensus on the manner in which precipitation
and runoff might be affected by the impacts of either natural variability and/or potential man-
made global climate changes. For this report we assume that future hydrologic conditions will be
similar to those of our recent past experience.
2.2 Energy Model Analysis
Energy for each of the project alternatives was estimated using Computer Hydro-Electric
Operations and Planning Software (CHEOPS), a proprietary energy modeling software.
Hydrology was updated in conjunction with project civil, mechanical, and electrical performance
data. In addition to daily flow, model inputs included: reservoir capacity and area curves, based
on the 1985 FERC amendment; tailwater curves; spillway capacity, with minimum and
maximum operation; and evaporation coefficients, all based on the 1985 FERC amendment.
Total reservoir evaporation was estimated between 1 and 3 inches per month in summer, with
negligible evaporation during the winter when frozen.
Equipment performance was based on manufacturer data obtained in 2008 specifically for this
project. Average generic turbine performance curves were then developed for the model, peaking
at 95 percent range of efficiency and 92 percent at full gate. Generator performance curves were
also developed, peaking at 98 percent. The six 200-MW Watana turbines were rated at a design
head of 680 feet and a minimum operating head of 545 feet. The four 170-MW Devil Canyon
turbines were rated at 600 feet and a minimum operating head of 450 feet.
For the Watana/Devil Canyon alternative, the target elevations from the 1985 FERC amendment
were used to simulate reservoir operation. In that paired configuration, the Devil Canyon power
plant provides the base load while the Watana plant is used for peaking power. Alternative
scenarios were also run for the Low Watana and Watana operating without Devil Canyon. In
these cases, the target elevations for the Watana reservoir were designated to maximize for
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winter generation. For the Low Watana alternative, four turbine generators would be installed;
each rated at about 150 MW. Other key assumptions for the model included:
Environmental flow constraints from 1985 as a baseline, despite the fact that new
environmental regulations may change requirements on minimum flow and ramping rates
Energy demand will be sufficient to consume all the energy produced by the project
A forced outage factor of 1.5 percent for both Devil Canyon and Watana
Transformer losses of 2 percent of the total generation
Sedimentation should not have a significant impact on reservoir operation, though 1985
studies indicated 12 percent of the dead storage in the Watana Reservoir will be lost due
to sedimentation after 100 years of operation, and no sedimentation rates have been
included in the present model
Firm energy is based on the low water year of the 57-year hydrologic record
The resulting preliminary energy estimates are presented in Figure 2.1 and Figure 2.2 and
summarized in Table 2.1. Detailed input and results of these energy analyses are provided in
Appendix A.
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
0 5 10 15 20 25 30 35 40 45 50IAverage Annual Energy Production (GWhrs)Project Year
Watana and Devil Canyon
Staged Watana and Devil Canyon
Watana
Low Watana
Devil Canyon
Licence Issued Re-licencingLicense Issued Re-licensing
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
0 5 10 15 20 25 30 35 40 45 50IAverage Annual Energy Production (GWhrs)Project Year
Watana and Devil Canyon
Staged Watana and Devil Canyon
Watana
Low Watana
Devil Canyon
Licence Issued Re-licencingLicense Issued Re-licensing
Figure 2.1 Energy Estimates for Susitna Project Alternatives
Alaska Energy Authority
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0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
0 5 10 15 20 25 30 35 40 45 50Installed Generating Capacity (MW)Project Year
Watana and Devil Canyon
Staged Watana and Devil Canyon
Watana
Low Watana
Devil Canyon
Licence Issued Re-licencingLicense Issued Re-licensing
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
0 5 10 15 20 25 30 35 40 45 50Installed Generating Capacity (MW)Project Year
Watana and Devil Canyon
Staged Watana and Devil Canyon
Watana
Low Watana
Devil Canyon
Licence Issued Re-licencingLicense Issued Re-licensing
Figure 2.2 Capacity for Susitna Project Alternatives
Table 2.1 Preliminary Energy Estimate
Alternative Estimated Average Annual Energy
(Billion kWh/year)
Estimated Firm Energy* (Billion
kWh/year)
Watana 3.2 1.8
Low Watana 2.6 1.4
Watana/Devil Canyon 7.2 4.1
Staged Watana/Devil Canyon 7.2 4.1
Devil Canyon 2.9 2.3
*Firm energy is based on the low water year of the 57-year hydrologic record
The energy production for the project alternatives will be influenced by seasonal flow variations.
The Susitna development was originally designed as a cascade system to store energy for use
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during the winter. The Watana reservoir provides storage capacity and peaking power with the
Devil Canyon powerhouse providing base load power. This allows for water to be stored in the
Watana reservoir during the spring and summer floods and run through the Devil Canyon
powerhouse during the winter months. As can be seen in Figure 2.3 and Figure 2.4, the Devil
Canyon reservoir alone does not provide enough storage capacity to allow for substantial energy
to be generated during the winter months.
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
900,000
1,000,000
Average Monthly Energy (MWhrs)Watana and Devil Canyon
Watana
Low Watana
Devil Canyon
2007 Railbelt Electric Usage
*Railbelt electricity usage obtained from the U.S. Department of Energy
Figure 2.3 Seasonal Energy for Susitna Alternatives with Rule Curve to Maximize Winter Generation
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0
200
400
600
800
1000
1200
Average Monthly Power (MW)Watana and Devil Canyon
Watana
Low Watana
Devil Canyon
Typical Average Monthly Railbelt Demand
*Railbelt electricity demand obtained from the U.S. Department of Energy, 2007
Figure 2.4 Seasonal Capacities of Susitna Alternatives with Rule Curve to Maximize Winter Generation
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3 Preliminary Cost Estimate
3.1 Original Cost Estimate
To develop an updated cost estimate for the Susitna hydroelectric project as conceptualized in
the 1980s, project documents from that era, including project descriptions, drawings, and cost
estimates were researched. A detailed cost estimate, prepared in the original feasibility study in
1982, was located. The estimate for the Watana/Devil Canyon alternative totaled $5.0 billion (in
1982 dollars). Also located was a 1986 study estimate for the staged Watana/Devil Canyon
alternative at $5.5 billion (1986 dollars). These 2 original estimates were compared and found to
be very similar, except for the intervening escalation and a few line-item differences; for
example, an environmental mitigation line item was included in the 1986 cost estimate as part of
licensing, but this item was not listed the 1982 estimate. Other changes from 1982 to 1986
included an increase in contingency from 17.5 percent to 20 percent and an increase in
engineering from 12.5 percent to 15 percent.
3.2 Updated Cost Estimate
2008 cost estimates for each alternative were created based on quantities from the original
1982 estimate with a few modifications from the 1986 estimate. U.S. Cost, a company
specializing in cost estimates for large projects, developed the unit prices for 2008. Cost
estimates were developed using conservative assumptions; further review of existing
infrastructure and industry practices may reduce costs.
For the water-to-wire turbine-generator equipment estimates, budget pricing was requested
directly from manufacturers. The water-to-wire equipment includes: turbines, generators, turbine
shutoff valves, and other miscellaneous mechanical/electrical equipment, and installation. A data
sheet of head, flow, and power ratings was prepared for the 10 potential turbine-generators at
Watana and Devils Canyon. The invitation was sent to Alstom, VA-Tech, Voith Siemens, and
Toshiba; and pricing, performance, delivery, dimensions, and weights were requested. Of these,
3 budgetary offers were received, evaluated, and incorporated into the 2008 estimate.
Transformer prices were also quoted from ABB.
A contingency of 20 percent of direct construction costs was used, which is typical for
preliminary design. Use of this contingency was judged acceptable due to the advanced stage of
the engineering studies performed in the 1980s. Project licensing, environmental studies,
engineering design, and construction management were estimated at 11 percent of direct
construction costs including contingency. A figure of 12 percent is typical, though due to
economy of scale, the percentage has been adjusted slightly, pending more detailed design and
service estimates in the future.
The unit prices in this report are typical for large projects in the United States. Variations in cost
will likely be covered within the 20 percent contingency used in this estimate. The 2 largest line
item construction costs are the gravel fill for the Watana dam and the concrete for the Devil
Canyon. If the unit prices for these items were undervalued by as much as 25 percent each, the
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effect on the total construction costs would only be 2 percent. The approach used for this report
was to apply the unit prices consistently to the various alternatives. This approach allows a
common platform from which to establish priority among the alternatives. Although future
refinement of the estimated unit costs may affect the final economics of the project it should not
affect the ranking of the alternatives amongst themselves.
The resulting preliminary construction cost estimate is shown in Table 3.1. Detailed construction
cost estimates are provided in Appendix B.
In addition to construction costs, the project will incur other costs such as financing costs and
interest before construction is complete. These costs are assumed to be rolled into the long term
bonds that will be issued for each alternative. The sum of construction costs and financing costs,
plus other related costs that are included in the debt service, are the capital costs of the project.
The capital costs shown in Table 3.1 reflect the total debt that would be issued for each
alternative.
Table 3.1 Preliminary Cost Estimate
Alternative Estimated Construction Cost
(billions)
Estimated Capital Cost
(billions)
Watana $8.4 $10.5
Low Watana $6.9 $8.3
Watana/Devil Canyon $11.7 $14.5
Staged Watana/Devil Canyon $12.8 $15.9
Devil Canyon $5.0 $6.0
3.3 Operations and Maintenance Cost Estimate
The economic analysis for this project will require estimates of operations and maintenance costs
(O&M) and capital expenditures. The annual costs for these items are based on the following
assumptions:
Annual operation and maintenance for the power facilities is estimated at $10 million per
year for each of the alternatives. This annual cost is based on other hydroelectric projects
of comparable size and location. For the roads and other infrastructure, it is assumed that
once the construction is completed, a portion of the maintenance would be subsidized by
the project, equating to approximately $5 million per year and is the same for each of the
alternatives.
Capital expenditures will occur on the following schedule:
Alaska Energy Authority
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• Every 20 years, the turbine runners will require replacement due to cavitation.
The replacement cost is estimated at approximately $5 million per turbine.
• Every 20 years, the governors will require upgrades. The replacement cost is
estimated at approximately $0.5 million per turbine.
• Every 40 years, the generator rotor and stator will require rewinding. This work
is estimated at approximately $10 million per turbine.
• Every 40 years, the transformers will require rehabilitation. This work is
estimated at approximately $0.4 million per transformer. Watana has 9
transformers and Devil Canyon has 12, plus one spare transformer for each dam.
• Every 50 years, the spillways will require structural repairs. A total of $12.5
million is assumed for each dam or $25 for the two-dam alternatives.
• Every 50 years, the transmission lines will require rehabilitation. A total of $10
million is assumed for each project alternative.
• Every 50 years, the dam structures will require rehabilitation. A total of $25
million is assumed for each dam, or $50 million for two dams.
• The project FERC license will expire after 50 years from issuance. Five years
before this expiration, a relicensing effort will begin, and both environmental and
regulatory work will be required. A total of $100 million is assumed spread
evenly over this 5 year period.
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4 Preliminary Project Schedule
An updated schedule was developed for each of the project alternatives. These schedules extend
from approval, through licensing, design, construction, and commissioning. The primary purpose
of this schedule is to provide a timeline for estimated cost cash flow and estimated energy
revenue to determine economic feasibility. This schedule assumes that:
Construction times are estimated based on 1982 FERC license application.
The licensing process from start to FERC order is estimated at 7 to 10 or more years. We
have set a reasonable target of 8 years for the proposed project analysis, provided that the
effort is begun immediately, ambitiously, fully funded, and conducted in parallel with
environmental studies, engineering, and with active public outreach and cooperation by
stakeholders.
The FERC License Application will be based on the 1986 application, updated to reflect
more than 20 years of regulatory changes and modern engineering and construction
methods.
Any environmental studies will be based on 1980 and 1986 studies, updated to reflect
present site conditions, public interests, wildlife, and recreational needs.
Construction will begin immediately upon issuance of the license.
Roads and staging will be state permitted outside the FERC project and will begin several
years before FERC license, including pioneer and permanent roads, airports, bridges,
construction camps, staging areas, and towns. Building roads in this way is the quickest
way to meet the projected timeline although there is some uncertainty whether permits
could be obtained to construct these facilities before the project license is issued.
Construction of diversion dams and tunnels will begin on issuance of the license, with
upstream and downstream coffer dams and tunnels to divert the Susitna River during
construction of main dams at Watana/Devil Canyon.
Spillway construction will follow diversion dam and tunnel construction, and will include
site preparation, approach channels, control structures, gates, stoplogs, chute, and
flip buckets for main and emergency spillways.
The full-height dam construction at Watana will require an 885-foot-high rock-fill dam
following site preparation, grouting, and installation of a pressure relief system.
The main dam construction at Devil Canyon will include a thin-arch concrete dam,
preceded by site preparation, foundations, abutments, and thrust blocks. Rock-fill saddle
dam construction will follow grouting and pressure relief system.
The powerhouse and transmission will include power intake, tunnels/penstock, surge
chamber, tailrace, powerhouse, turbine/generators, mechanical/electrical systems,
switchyard, control buildings, and transmission lines.
Reservoir filling will be based on the latest hydrologic data for inflow and turbine data
for outflow.
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Devil Canyon construction will commence immediately upon completion of Watana for
the Watana/Devil Canyon alternatives.
The resulting estimate of generation of first power and full power is shown in Table 4.1. Detailed
schedules for all of the alternatives are provided in Appendix C.
Table 4.1 Power Generation Time Estimates
Alternative Generation of first power
(years)*
Generation of full power
(years)*
Watana 15 16
Low Watana 14 15
Watana/Devil Canyon 15 20
Staged Watana/Devil
Canyon 14 23
Devil Canyon 14 15
*From start of licensing
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5 Economic Analysis
An economic analysis was developed for each of the project alternatives. This analysis used the
energy, cost, and schedule information prepared in previous tasks to determine the cost of
electricity per kilowatt hour (kWh) for each of the project alternatives, thereby identifying the
economically preferred alternative.
For this preliminary analysis, the following major assumptions were used to compare each
alternative:
7. No inflation
8. 100 percent financing with no capital contribution by the State
9. Bond interest rate is 5 percent with a term of 50 years
10. All energy will be sold
11. Debt coverage ratio of 1.25
12. Ongoing O&M and capital expenditures costs and schedule as estimated in Section 3.3 of
this report.
These assumptions provide the basis for a relative comparison between the alternatives. AEA
proposed the first 4 assumptions and the fifth assumption regarding debt coverage ratio is the
same ratio as used in the 1980s studies. These assumptions will be modified as the study
progresses so that the Susitna alternatives will be evaluated on the same basis as other power
generation alternatives in the IRP.
The financial markets are currently under a great deal of stress and it is unlikely that bonds could
be sold today under the assumptions noted above. However, it is anticipated that the bond market
will be functioning normally at the time when substantial capital inputs are required for
construction. Future analyses should consider potential financing mechanisms, such as those
related to carbon markets or offset investments under a cap-and-trade program as proposed by
the Obama-Biden Administration.
The assumption of no capital contribution by the State requires that construction financing or
bridge loans are available until construction is complete and power generation begins. The bridge
loan is assumed to roll over each year and convert into long-term debt at the beginning of the
first full year of operation. The interest rate on the bridge loan is assumed to be 5 percent
annually. Debt payments are assumed to start in the first full year of operation.
It is unlikely that the AEA-proposed 100 percent financing with no capital contribution by the
State or another party could be achieved. The licensing and construction period for a major
hydroelectric facility is very long and even if construction financing were available for these
activities the lenders would in all likelihood require at least interest payments until electric
generation started. Since the project would not have an income stream until generation starts, the
State or another entity would be liable for the interest payments. An assumption of no capital
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contributions or grants by the State of Alaska or the federal government results in a high cost of
energy for a Susitna hydroelectric project. Grants from these entities could substantially reduce
the cost of energy during the period when debt is being repaid.
A debt coverage ratio (DCR) of 1.25 requires that the net operating income be 1.25 times greater
than the annual debt payments. A 1.25 ratio was used in the 1985 Susitna report and it is
assumed that this ratio could be negotiated with the bond underwriters in the future. The surplus
revenues generated by this DCR are placed in a reserve fund and the fund increases each year
with accrued interest and an annual contribution from the DCR until such time as the reserve
fund in year X plus the net income in year X+1 are large enough to pay off all the remaining
debt. Thus the reserve fund decreases the length of time when debt payments are required.
As noted in Section 3.3 of this report, capital expenditures will be required during the life of the
project following completion of construction activity for such activities as replacing turbine
runners, rewinding generators, FERC relicensing, etc. These costs are assumed to be paid from a
reserve fund that accrues modest amounts of surplus cash sufficient to cover the ongoing capital
expenditures through the first 100 years of the project. The spreadsheet model seeks the
minimum cost of energy that is sufficient to meet these capital expenditures and operations and
maintenance costs. It is anticipated that through proper design and operations of the project there
will be minimal loss of energy, if any, while these repair and replacement activities are ongoing.
The analysis assumes no change in annual power generation for plant maintenance or repair and
replacement.
Figure 5.1 shows the cost of electricity for each of the project alternatives from year 1 through
year 100. The Watana-only alternatives average about $0.24 per kWh of electricity for the bond
payment time interval, falling to about $0.01 per kWh after debt service is eliminated. The Low
Watana alternative debt service is paid off sooner than the Watana alternative so the average cost
of electricity for the first 50 years is lower for the Low Watana alternative.
The Watana/Devil Canyon alternative or the Staged Watana/Devil Canyon alternative result in
higher costs for electricity than the other alternatives in the first few years of generation since
much larger capital costs are incurred and there is limited power generation in the first few years
compared to the capital expenditures. The DCR magnifies this peak electricity cost since net
operating revenues must be 1.25 times the annual debt service and these alternatives are slowly
increasing their generating capacity. A similar cost increase was identified in the 1980s studies.
When full generating capacity is achieved for the Watana/Devil Canyon alternative or the Staged
Watana/Devil Canyon alternative, the cost of electricity is substantially lower than for the
Watana-only alternatives at about $0.15 to $0.16 per kWh (Figure 5.1). However, for the Staged
Watana/Devil Canyon alternative, the substantially-higher cost of energy during the first years of
generation results in the average cost per kWh during the first 50 years being about $0.18 per
kWh (Table 5.1). The Watana/Devil Canyon alternative has an average cost of electricity of
about $0.14 per kWh for the first 50 years. Energy costs drop to slightly more than $0.01 per
kWh for both of the multiple dam alternatives after the bonds are paid off.
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The Devil Canyon alternative has a cost of power that is slightly lower ($0.13 per kWh) than the
Watana/Devil Canyon alternative during the first 50 years and slightly higher cost of power after
the debt is paid. As noted earlier in this report the Devil Canyon alternative has limited winter
generation capacity, although the cost of energy is lower than the other alternatives.
0.00
0.05
0.10
0.15
0.20
0.25
0.30
0.35
0.40
1 6 11 16 21 26 31 36 41 46 51 56 61 66 100Cost per kWh (2008 $)Year
Low Watana Watana Watana and Devil Canyon Staged Watana and Devil Canyon Devil Canyon
Design/
Construction
Generation
starts
Debt repayment starts with generating
capacity growing
Full generating
capacity achieved
Debt paid off
Figure 5.1 Cost of Electricity per Kilowatt Hour for Susitna Hydroelectric Alternatives
Based on the average cost of electricity during the first 50 years of the project and the second 50
years (Table 5.1), the Watana/Devil Canyon alternative or the Devil Canyon alternative would be
preferred over the other alternatives, with the Watana/Devil Canyon alternative having slightly
lower costs after the debt service period. If winter electricity is an objective of this project then
the Watana/Devil Canyon alternative is preferable to the other alternatives. The average cost of
electricity during the first 50 years is calculated as the average cost, starting with the first year of
generation, and continuing through year 50. The average includes some years when the cost of
electricity is very low following payment of the debt.
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Table 5.1 Average Cost of Electricity Per Kilowatt Hour
Cost Per Kilowatt Hour (2008 dollars)
Alternative
First 50 Years Second 50 Years
Watana $0.22 $0.01
Low Watana $0.20 $0.01
Watana/Devil Canyon $0.14 $0.01
Staged Watana/Devil Canyon $0.18 $0.01
Devil Canyon $0.13 $0.02
A sensitivity analysis was performed to estimate the effect of varying interest rates on the cost of
power. Table 5.2 shows the average cost per kWh during the first 50 years for each alternative. A
reduction in the interest rate from 5 percent to 3.5 percent results in a decrease of 3 cents to 5
cents per kWh depending on the alterative. However, an increase in the interest rate to 6.5 results
in increases of six to nine cents per kWh.
Table 5.2 Average Cost of Electricity Per Kilowatt Hour at Varying Interest Rates
Alternative Cost Per Kilowatt Hour, First 50 Years (2008 dollars)
3.5% 5% 6.5%
Watana $0.17 $0.22 $0.31
Low Watana $0.15 $0.20 $0.28
Watana/Devil Canyon $0.11 $0.14 $0.20
Staged Watana/Devil Canyon $0.14 $0.18 $0.25
Devil Canyon $0.10 $0.13 $0.18
Figure 5.2 through Figure 5.11 provide additional detail on each of the 5 alternatives that were
evaluated. There are 2 graphs presented for each alternative. The first graph displays the cost per
kilowatt hour for the first 100 years of the project and the second graph displays the construction
cost expenditures in each year and the total cost of debt in any year. The vertical scales are the
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same across all 5 alternatives (i.e., $0 to $0.40 per kWh for cost of electricity and $0 to
$16 billion for construction expenditures and total debt) so that the relative difference between
alternatives is more apparent.
The Devil Canyon alternative has the lowest total debt structure of the 5 alternatives, followed by
the Low Watana alternative and then the Watana alternative. The Watana/Devil Canyon
alternative has a lower total debt structure than the Staged Watana/Devil Canyon alternative
because the construction period is shorter and the total capital costs are lower.
Table outputs for the models and a discussion of the model parameters are provided in Appendix
D.
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5.1 Watana
0.00
0.05
0.10
0.15
0.20
0.25
0.30
0.35
0.40
1 6 11 16 21 26 31 36 41 46 51 56 61 66 100Cost per Kilowatt Hour (2008 $)Year
Design/
Construction
Generation
starts
Debt repayment starts
Debt paid off
Figure 5.2 Watana Cost of Electricity
-
2
4
6
8
10
12
14
16
1 6 11 16 21 26 31 36 41 46 51 56 61 66 100Billons of 2008 $Year
Construction Expenditures Total Debt
Debt paid off
Figure 5.3 Watana Annual Construction Expenditures and Total Debt
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5.2 Low Watana
0.00
0.05
0.10
0.15
0.20
0.25
0.30
0.35
0.40
1 6 11 16 21 26 31 36 41 46 51 56 61 66 100Cost per Kilowatt Hour (2008 $)Year
Debt repayment starts
Design/
Construction
Generation
starts
Debt paid off
Figure 5.4 Low Watana Cost of Electricity
-
2
4
6
8
10
12
14
16
1 6 11 16 21 26 31 36 41 46 51 56 61 66 100Billions of 2008 $Year
Construction Expenditures Total Debt
Debt paid off
Figure 5.5 Low Watana Annual Construction Expenditures and Total Debt
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5.3 Watana/Devil Canyon
0.00
0.05
0.10
0.15
0.20
0.25
0.30
0.35
0.40
1 6 11 16 21 26 31 36 41 46 51 56 61 66 100Cost per Kilowatt Hour (2008 $)Year
Design/
Construction
Generation
starts
Debt repayment
starts
Debt paid off
Additional generation comes on line
Figure 5.6 Watana/Devil Canyon Cost of Electricity
-
2
4
6
8
10
12
14
16
1 6 11 16 21 26 31 36 41 46 51 56 61 66 100Billions of 2008 $Year
Construction Expenditures Total Debt
Debt paid off
Figure 5.7 Watana/Devil Canyon Annual Construction Expenditures and Total Debt
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5.4 Staged Watana/Devil Canyon
0.00
0.05
0.10
0.15
0.20
0.25
0.30
0.35
0.40
1 6 11 16 21 26 31 36 41 46 51 56 61 66 100Cost per Kilowatt Hour (2008 $)Year
Design/
Construction
Generation
starts
Debt
repayment
starts
Debt paid off
Additional generation comes on line
Figure 5.8 Staged Watana/Devil Canyon Cost of Electricity
-
2
4
6
8
10
12
14
16
18
1 6 11 16 21 26 31 36 41 46 51 56 61 66 100Billiions of 2008 $Year
Construction Expenditures Total Debt
Debt paid off
Figure 5.9 Staged Watana/Devil Canyon Annual Construction Expenditures and Total Debt
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5.5 Devil Canyon
0.00
0.05
0.10
0.15
0.20
0.25
0.30
0.35
0.40
1 6 11 16 21 26 31 36 41 46 51 56 61 66 100Cost per Kilowatt Hour (2008 $)Year
Debt repayment starts
Design/
Construction
Generation
starts
Debt paid off
Figure 5.10 Devil Canyon Cost of Electricity
-
2
4
6
8
10
12
14
16
1 6 11 16 21 26 31 36 41 46 51 56 61 66 100Billions of 2008 $Year
Construction Expenditures Total Debt
Debt paid off
Figure 5.11 Devil Canyon Annual Expenditures and Total Debt
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6 Regulatory and Environmental Issues
After the Susitna project was discontinued in 1986 a database of 3,573 documents was created.
In September 2008, the 87 most-relevant documents were scanned into HDR’s files, of which 18
were summarized. A synthesis of the 7 most-pertinent documents was completed. Because not
all of the documents were summarized, some relevant information has likely been overlooked;
however, most information was included in the synthesis.
These documents contain information on potential impacts of the proposed project and
mitigation proposals for those impacts. Specifically, the documents deal with fisheries resources,
botanical resources, wildlife resources, and cultural resources in the potential project area. The
documents divide the Susitna River Basin into 4 geographic regions:
Impoundment zones
Middle Susitna River
Lower Susitna River
Access roads and transmission lines
The potential impacts and mitigation options are discussed for each category in each geographic
region as much as possible. It is important to note that not all categories will be impacted in all
geographic regions. Mitigation for the proposed impacts is divided into the following categories:
avoidance, minimization, rectification, reduction, and compensation. Avoidance is always the
preferred mitigation, though it is not usually feasible. Compensation is the only mitigation option
for many of the impacts.
6.1 Fisheries Impacts
The fisheries resources have the potential to be impacted the most due to the project. In the
impoundment zones, 82 miles of riverine habitat will be transformed into reservoir habitat. The
potential exists for the displacement of approximately 20,000 Arctic grayling larger than 8 inches
in length from the creation of the reservoirs.
Most of the potential impacts will occur in the middle Susitna River. There will be impacts due
to changes in water quality, thermal activity, the water’s suspended sediment load, reservoir
draw-down fluctuations, impoundment zone inundation, flow regime, and fish habitat. These
impacts will result in both positive and negative effects on fish populations. For example, the
increase in winter water temperatures will lead to the creation of more overwintering habitat and
thus greater fish survival; however, the cooler spring water temperatures will slow fish growth.
Mitigation for these impacts is proposed by compensation through land acquisition, habitat
modification, and reservoir stocking.
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6.2 Botanical Impacts
The project area contains 295 vascular plant species, 11 lichen genera, and 7 moss taxa. Low
Watana inundation will permanently remove 16,000 acres of vegetation. Devil Canyon
inundation will permanently remove 6,000 acres of vegetation. Watana inundation will
permanently remove an additional 16,000 acres of vegetation. There will be a total of 38,000
acres of vegetation permanently removed. Most of the vegetation inundated will be spruce forest.
An additional 836 acres of vegetation will be permanently removed due to access road
construction. The transmission corridor will comprise a total of 11,000 acres. Of that area, only a
negligible fraction of vegetation will be totally removed due to intermittent placement of control
stations, relay buildings, and towers.
There will be limited botanical impacts downstream from the reservoirs. These involve changes
to the vegetation due to a more stable environment. Due to flow regulation there will no longer
be major flooding events, which destroy the riparian vegetation; instead; rather, there will be
succession of the riparian vegetation and colonization of new floodplains. The increase in winter
water temperatures will decrease the amount of ice scouring that occurs, which will result in
effects similar to those caused by the decrease in flooding.
Botanical resource mitigation will consist largely of compensation for permanently removed
vegetation.
6.3 Wildlife Impacts
Within the Susitna River Basin there are 135 bird species, 16 small-mammal species, and
18 large-mammal and furbearing species. There will be 5 classes of potential impacts to
terrestrial vertebrates:
• Permanent habitat loss, including flooding of habitat and covering with gravel pads or
roads
• Temporary habitat loss and habitat alteration resulting from reclaimed and revegetated
areas such as borrow pits, temporary right of ways, transmission corridors, and from
alteration of climate and hydrology
• Barriers, impediments, and hazards to movement
• Disturbances associated with project construction and operation
• Consequences of increased human access not directly related to project activities
Mitigation for the proposed impacts involve mostly compensation since there will be permanent
habitat loss for most species.
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6.4 Cultural Resource Impacts
Within the proposed project area, 297 historic and prehistoric archaeological sites were located.
An additional 22 sites were already on file. Sites located within 500 feet of the reservoir’s
maximum extent may be indirectly impacted due to slumping from shoreline erosion. Indirect
impacts may also result from vandalism due to increase in access to the sites. The project has the
potential to impact 140 sites. None of these sites will occur in the proposed road corridor or
transmission lines. The majority of these sites are relatively small prehistoric sites.
Mitigation for the lost cultural resources will mostly occur through data recovery. Preservation
would also be used for some sites. Options to consider include construction of protective barriers
to minimize erosion, controlled burial, or fencing of the site to restrict access.
Currently, there are a variety of federal, state, and local land use plans that encompass the
Susitna Basin.
6.5 Carbon Emissions
According to the United Nations working group on carbon emissions from freshwater reservoirs
the worst case carbon emissions from a reservoir in a boreal climate is 6.71 grams per square
meter per year. For the Watana/Devil Canyon alternative this equates to 465,000 metric tons of
carbon per year or 0.065 metric tons per MWhr. The US Department of Energy reports the
average carbon emissions due to electric generation for the State of Alaska to be 0.6262 metric
tons per MWhr. Operation of the Susitna project has the potential to eliminate up to 4 million
metric tons of carbon production per year.
1 United Nations Educational, Scientific and Cultural Organization. Scoping Paper: Assessment of the GHG Status
of Freshwater Reservoirs. April 2008
2 http://www.eia.doe.gov/cneaf/electricity/st_profiles/alaska.html
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7 Summary
Table 7.1 provides an estimate of capacity, construction cost, energy, schedule, and cost per kWh
for each of the alternatives. Environmental and regulatory issues are substantial and will require
comprehensive investigation, though no fatal flaws are apparent based on this initial review. All
of these estimates are preliminary, pending more detailed engineering, environmental, and
regulatory studies.
Table 7.1 Summary
Cost per kWh ($)
Alternative
Ultimate
Capacity
(MW)
Construction
Cost
($billion)
Energy
(billion
kWh/yr)
Schedule
(years) First 50
Years
Second 50
Years
Watana 1,200 8.4 3.1 15 – 16 0.22 0.01
Low Watana 600 6.9 2.4 14 - 15 0.20 0.01
Watana/Devil
Canyon
1,880 11.7 7.2 15 - 20 0.14 0.01
Staged
Watana/Devil
Canyon
1,880 12.8 7.2 14 - 23 0.18 0.01
Devil Canyon 680 5.0 2.9 14-15 0.13 0.02
Hydroelectric power has many economic and environmental benefits including long-term rate
stabilization. Because the cost of the water to power a hydroelectric turbine is essentially free the
cost per kilowatt hour is related to the construction and maintenance costs of the dam and
powerhouse facilities. As we have seen recently, the price of fossil fuels can fluctuate
dramatically over time whereas the cost of hydroelectric power decreases once the initial
investment has been repaid and remains low and stable for the life of the project. Consequently
the economic risk associated with hydroelectric power is substantially lower than thermal power.
Additionally, the life cycle carbon dioxide production of hydroelectric facilities is orders of
magnitude less than thermal power plants.
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8 Recommendation
The Watana/Devil Canyon alternative is the most cost effective per unit of energy. The Devil
Canyon alternative does not provide a stable winter energy supply although its cost per kWh is
lower than the other alternatives.
A primary assumption of this report is that all power from these alternatives can be used at the
time it is produced. Determination of the need for this power will be dependent upon further
studies in conjunction with the Railbelt IRP.
31
Appendix A
Energy Analysis
Input and Results
32
Appendix B
Detailed
Cost Estimates
33
Appendix C
Detailed Schedules
34
Appendix D
Economic Analysis
Input and Results