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Unalaska onsite report 8-15-90
Sp pte cd le ah Wolter J inekel Governor A Public Corporation Alaska Energy Authority i .April 1,1993 Ms.Nadine Epstein Rural Electrification Magazine 1800 Massachusetts Avenue NW Washington,DC 20036 Subject:Unalaska Geothermal Project Dear Ms.Epstein: As requested,enclosed is information about the Unalaska Geothermal Project. Development of the project is presently on hold,pending long-term power sales agreements. Although we are actively pursuing discussions with potential power purchases,the earliest we would anticipate any commitments would be this summer.Consequently,any construction work would be at least one to two years away. If you are contemplating visiting the project site,I would encourage you to do so during the summer season when the weather in the area is a bit more cooperative. If you have any questions regarding the project or require any additional information,please give me a call. Sincerely, Ab KLDavidR.Eberle Project Manager DRE:tlj Enclosure as stated. PO.Box 190869 704 East Tudor Road =Anchorage,Alaska 99519-0869 (907)561-7877 Fax:(907)561-8584 93QINTIJ4574(1)Pagc |of | -_iW, x State of AlasxaNWalterJHickel.Governcr Alaska Energy Authority A Public Corporation September 22,1992 Mr.Riley Snell Executive Director Alaska Industrial Development and Export Authority 480 West Tudor Road Anchorage,AK 99503-6690 Subject:Unalaska Geothermal Project Dear Mr.Snell: The Alaska Energy Authority is pleased to assist the Alaska Industrial Development and Export Authority (AIDEA)in reviewing the feasibility of a Geothermal Electrical Generation Project at Unalaska.We believe that this project offers considerable potential and under the proper financial arrangement could provide a viable,competitively,priced and clean alternative to the diesel generation currently being utilized. Based upon our previous involvement in this project we would recommend that AIDEA's feasibility assessment be pursued in the following sequence: I.Review previous construction cost estimates and develop a high/low project budget. Based upon the budget,develop a variety of financing scenarios to determine the cost of power and its sensitivity to interest rates,bond size and payback period. 2.Meet with the fish processors and the City of Unalaska to review the various financing and ownership alternatives for project development.Assuming a preferred plan is identified and the cost of power is acceptable,confirm the various parties interest by signing appropriate "letters of intent." 3.Undertake an independent review of the project design and prepare an independent cost estimate to confirm the project budget.Review construction schedules,permit requirements and other potential constraints affecting the budget or schedule. 4.Prepare a detailed project development plan and initiate negotiations of required power sales agreements,etc.to secure project financing. It is our understanding that your Board of Directors under Resolution No.A92-11 has authorized the expenditure of up to $100,000 for the feasibility review,contingent upon the execution of an agreement which would provide for AIDEA's eventual reimbursement.Although we understand [J PO,Box 110809 Juneau,Alaska 99811-0809 (907)465-3575TAPO.Box 190869 704 East Tudor Road Anchorage,Alaska 99519-0869 (907)561-7877 92Q3\NK3623(1)Page |of 2 Letter to Mr.Riley SnellSubject:Unalaska Geothermal Project September 22,1992 the desire for such an agreement,in the interest of time,we recommend that Task |be initiated immediately.The results of this preliminary financial assessment may provide the basis for the desired agreement. We currently have an active contract with R.W.Beck which can be used to pursue the development of the scenarios outlined in Task 1.The anticipated cost for the this task,including our in-house review of the construction costs,is less than $10,000.The work could be completed in approximately three weeks. Accordingly,we request AIDEA's approval to proceed with Task 1 at a cost not to exceed $10,000. Sincerely, Ronald A.Garzini Executive Director . DE:RAG:nk 92Q3\NK3623(2)Page 2 of 2 REPORT GENERATION INSTALLED AT PROCESSING FACILITIES IN UNALASKA DATE:8-15-90 BY:JERRY LARSON anONSITEINTERVIEWSANDINSPECTIONSWERECONDUCTED 6-7-90 AND 6-8-90.LOAD INFORMATION WAS OBTAINED FROM ALL BUT THREE PROCESSORS,OFFSHORE SYSTEM,INC,AND UNISEA/GREATLANDS,AND WESTWARD SEAFOODS.TO DATE THE DATA FORMS I LEFT TO BE FILLED OUT HAVE NOT BEEN RECEIVED. ALYESKA SEAFOODS,INC. MR STEVE TATE,CHIEF ENGINEER ANSWERED ALL QUESTIONS I HAD AND GUIDED US ON A TOUR OF THE GENERATION FACILITY.THE (4) OLDER CAT D398,600 KW GENERATORS WERE IN GOOD SHAPE AND ON LINE AT TIME OF VISIT.N.C.CAT MECHANICS WERE IN THE PROCESS OF INSTALLING A NEW D3600 2.6 MW GENERATOR TO OPERATE WITH THE 3 YEAR OLD D3600.FUEL CONSUMPTION RECORDS SHOW THE OLDER CAT UNITS GET 10 KWH/GAL.AND THE D3600 UNITS GET 15 KWH/GAL.THIS FIRM USES THE JACKET WATER AND STACK HEAT AS A PART OF THEIR PROCESSING.THERE IS NO INTEREST IN BUYING CITY POWER.THEY ARE INVESTING $15 MILLION IN PLANT UPGRADES,BOTH PROCESSING AND GENERATION, WITH A PROJECTED RETURN ON INVESTMENT IN 1 YEAR! ALASKA PRESIDENT LINES,INC. MR.MIKE REDMAN,OPERATIONS SUPERVISOR,ANSWERED ALL QUESTIONS ASKED AND SHOWED US THRU THEIR POWERHOUSE. THE PLANTS ARE 15 YEARS OLD,AND OLDER,AND HAVE NO SERVICE RECORDS.THEY WERE UNABLE TO DETERMINE HOW LONG AGO THE UNITS WERE OVERHAULED OR IF THEY EVER HAVE.THE PARENT COMPANY,EVIDENTLY,ROTATES THE PERSONNEL IN AND OUT OF DUTCH HARBOR ON A SEASONAL BASIS.THIS COMPANIES MAIN FUNCTION IS MOVING REFRIGERATED CONTAINER CARGO ON THEIR SHIPS,TO VARIOUS PORTS AROUND THE WORLD.THIS SHORE BASED OPERATION IS NOT VERY WELL RUN.THE OPERATIONS SUPERVISOR IS VERY INTERESTED IN BUYING POWER FROM THE CITY,BUT THE FINAL DECISION WILL HAVE TO COME FROM TOP MANAGEMENT.HE HAS BUDGETED $119,000 FOR O&M THIS YEAR,BUT STATED THOSE COSTS WILL BE EXCEEDED. EAST POINT SEAFOODS MR.LEWIS SEUTZ,SUPERVISOR,SHOWED US THRU THE POWER HOUSE AND FILLED IN ALL THE INFORMATION HE HAD RECORDS ON. THIS IS AN OLD FACILITY,THAT CONCENTRATES ON ONLY CRAB.ALL GENERATORS ARE OLD AS IS THE SWITCHGEAR.THE MANAGER HAS RECOMMENDED TO THE OWNER THAT THEY GO ON CITY POWER, BUT THE OWNER,AGE 83,LIVING IN SEATTLE,HAS NO INCLINATION TO CHANGE THE WAY HE DOES BUSINESS.THIS IS ASMALL LOAD BUT DOES REPRESENT A NEAR TERM POTENTIAL CUSTOMER. ICICLE SEAFOODS,INC. MR.TOM SANDEL,CHIEF ENGINEER,ARCTIC STAR,SHOWED ME THRU THE GENERATION ROOM.THE UNITS ARE OLDER,BUT VERY WELL MAINTAINED,CLEAN,AND NEAT.MR,SANDEL PROVIDED ME WITH A REPORT HE MADE FOR HIS MANAGER ON SELF GENERATED POWER VSUNALASKA CITY POWER.THE RESULTS SHOW IT IS , CHEAPER FOR THAT FIRM TO SELF GENERATE.A COPY OF THE R EPORT IS ATTACHED FOR REFERENCE.ICICLE IS CONSIDERING RELOCATING THEIR PROCESSING SHIP TO ST.PAUL,AS IT IS 2 DAYS CLOSER TO THE FISHING GROUNDS. UNISEA/GREATLANDS THE NEW CENTRAL GENERATION AND PROCESS HEAT FACILITY WAS UNDER CONSTRUCTION AT THE TIME OF INSPECTION.MR.TOM SPENCER,PLANT ENGINEER,SHOWED ME THE PLANS FOR THE ULTIMATE FINISHED FACILITY INCLUDING,(6)2.6 MW FAIRBANKS DIESELS.AS THERE IS ALSO CONSTRUCTION GOING ON TO EXPAND THE PROCESSING EQUIPMENT,A LOAD PROFILE IS NOT AVAILABLE. MR.SPENCER WAS GIVEN A DATA FORM TO FILL OUT WHEN HE HAS A BETTER IDEA WHAT THE REAL LOADS WILL BE.THIS FACILITY PROCESSES ALL PRODUCTS AND AS SUCH ONLY SHUTS DOWN FOR TWO 2 WEEK PERIODS DURING THE YEAR FOR MAINTAINANCE.THE EXPECTED LOAD IS IN THE 3 TO 5 MW RANGE.THERE ARE TWO LARGE BOILERS INSTALED IN THE UTILITY BUILDING AND BOTH WILL BE NEEDED DURING STARTUP.AFTER THE JACKET WATER AND STACK HEAT SYSTEM IS COMMISSIONED,ONLY A PARTIAL USE OF ONE BOILER WILL BE NEEDED.THIS AGAIN IS A TOTAL ENERGY POWER PLANT.THE PROJECTED PAYBACK FOR THE NEW CONSTRUCTION IS ESTIMATED AT 6 YEARS. WESTWARD SEAFOODS NO ONE WAS AVAILABLE,ON SHORT NOTICE,TO DISCUSS THE NEW LOADS EXPECTED FOR THEIR FACILITY.I LEFT MY CARD ANDA DATA FORM WITH THE SECRETARY,TOOK A FEW PHOTOS,AND LEFT. THE PLANT IS BARELY OUT OF THE GROUND AND THE NEW 2.6 MW WARTSILA DIESELS ARE STILL WRAPPED IN TARPS.RUMOR HAS IT THAT WESTWARD EXPECTS A LOAD OF AROUND 5 MW AND HAS NO INTENT TO TIE TO CITY POWER. CITY OF UNALASKA MR ROE STURGULESKI,DIRECTOR OF PUBLIC WORKS,AND IHAD A MEETING TO DISCUSS MY IMPRESSIONS OF THE PROCESSOR FIRMS. WE SHARE THE FEELING THAT FOR THE CITY TO ENGAGE INTO A 20 YEAR TAKE OR PAY CONTRACT WITH ORMAT GEOTHERMAL WOULD BE A VERY SPECULATIVE DECISION.ALTHOUGH I WAS NOT ABLE TO REVIEW THE ORMAT PROPOSAL,IT EVIDENTLY HAS PROPOSED ANNUAL SALES OF 87,000,000 KWH AT $.10 KWH DELIVERED TO A CITY BUS BAR ON AMAKNEK ISLAND.MOST OF THE LARGER PROCESSORS CAN COMPETE WITH THAT COST.IN FACT,ONE PROCESSOR STATED THEY WOULD SELL DIESEL GENERATED POWER FOR $.09 KWH.THE OTHER MAJOR CONSIDERATION IS THAT ORMAT WANTS A 20 YEAR SALES CONTRACT AND THERE ARE NO PROCESSORS WILLING TO SIGN A 1 YEAR CONTRACT,AND CERTAINLY NOT A 20 YEAR. AS MUCH OF THE ELECTRIC LOAD IS JUST BEING CONSTRUCTED,IT IS TOO EARLY TO ESTABLISH WHAT THE REAL LOAD PROFILE WILL LOOK LIKE.ALSO THERE IS MUCH UNCERTAINTY AMONG THE PROCESSORS AS TO THE EXTENT OF THE BOTTOM FISHERY,OR IF IT WILL BECOME REGULATED WITH TONNAGE RESTRICTIONS. POLITICALLY,IT MIGHT BE POSSIBLE TO GET MORE FACILITIES TO TIE TO THE CITY SYSTEM,HOWEVER,IF THE BOTTOM FISHERY DECLINES,THE PROCESSORS WILL CLOSE OR QUIT.EITHER WAY,THE CITY UTILITY WOULD BE IN A BAD CONTRACTUAL POSITION. "TO:Dave Denig-Chakroff,Project Manager AEA --FROM:Roe Sturgulewski,Public Works Director City of Unalaska'REF:Makushin Project (DATE:May 7,1990epinaattachedcopies of the three documents we discussed in our'telecon today.I hope they will be of benefit.I've added a few"clarifying comments. NETS REPORT -12/14/89 "The report was generated to determine the technical feasibility of interconnecting with processing plant generation equipment in an effort to increase demand capacity without major plant upgrades.Tom Neubauer placed somewhat more of an emphasis on "political"issues than was expected.It must be recognized that"his discussions were at the plant operator level. "CITY GENERATION INFORMATION -1/26/90 As an out-growth of the NETS Report,I prepared a summarization 'of electrical consumption.The data came mainly from the NETS Report and discussions that my employee's have had with various plant operators.The normal on line and peak usage data should expressly be verified as they were not based on concise data. The sheet reflects Unisea Seafoods going off the City bus and 'generating their own power.The Icicle and Margaret's Bay Plants -under the "maybe column"appear highly unlikely at this point. The City production after the Unisea switch appear overly conservative based on a more thorough review during FY 91 Budget. preparations. MY MEMO -4/16/90 This presents my review of the Ormat Proposal and issues that must be resolved prior to continuing negotiations. .pO,BCX 32584 -JUNEAU,ALASKA99803.TELEPHONE (907)769-2474 ¢FACSIMILELE (907)7805939 14 Dec 89 Department of Public Works City of Unalaska P.O.Box 89 Unalaska,AK 99685 Attn:Jim Taylor,Electric Department Superintendent "FOLLOWUP VIA USPS Re:INTERCONNECTION/COGENERATION PRELIMINARY STUDY Pursuant to our conversations,your direction and your work order,I traveled to Unalaska during the week of 16 Oct 89.During that trip I gathered field data and participated in conversations with several of the potential customers'site managers in order to determine present load data,their future plans involving electrical generation expansion and the corporate posture regarding potential interconnection with the City. You are undoubtedly better informed about some of the political and economic considerations which are inextricably involved in the processor's evaluation of the issues. It was apparent that the processors have significant advantages offered to them if they choose ownership of the generation equipment.The greatest advantage appears to be an offsetting reduction in their State taxes.This factor "skews"the evaluation toward processor ownership,particularly since few of the processors view operation or maintenance as asignificantfactor.The eight specific sites we visited and/or attempted to obtain relevant site-specific dataaboutwere: 1)Icicle Seafoods 2)East Point Processing Plant 3)A Potential Processor at Margaret Bay 4)Unisea/Greatlands 5)Alyeska Seafoods,Inc. 6)Westward Seafoods 7)Offshore System,Inc. 8)American President Lines A general statement should be related at this point...these customers,without exception,have a considerable uncertainty in their plans and projections.The followingis our finding,by site: .\UNAK\INTCNSDY."ADM 0924-902.--Page 31 of 8ayoe:. -yee F . :Pn SoAe er SE EE VRE CR Mote dea Bet ae Ys has th:ade Be pnts 'City"of.Unalaska,Electus Department INTERCONNECTION STUDY "os ICICLE SEAFOODS ---Although Icicle Seafoods is in the position to be the most cooperative and open with the City regarding joint facility planning and expansion,this processor is only in the preliminary planning and permit stages.There are few "concrete"plans but it appears that Icicle represents an extremely good prospect to utilize waste heat from a conveniently located power plant.The most likely electrical dernand is predicted at approximately 3-3.5 mW with a possible future demand in excess of 4.5 mW.The most likely predicted steam load is approximately 300-400 hp for use mainly in crab processing.An additional 100 hp steam may potentially be required for domestic uses. The present electrical system lends itself to an extension to the Icicle site at 34.5 kV or 12.47 kV.Icicle seems very agreeable to the possibility of sharing expenses associated with building a powerhouse adjacent to their plant in order to allow utilization of waste heat. There is the distinct possibility that sufficient "firm capacity"could be installed to allow sale of excess to the City."Firm capacity”is defined as the total installed capacity minus the capacity of the single largest unit."Excess firm capacity"is firm capacity minus the peak load. Although Icicle represents the greatest possibility for interconnection and cooperative generation,there is an amount'of general uncertainty associated with the ultimate construction of the plant.Cooperative generation is well within technical possibility,the costs are most likely controllable (interconnection could be designed into the plant)and there is certainly a receptive attitude from the processor. EAST POINT East Point supplies all of their electrical requirements from on-site generation.East Point's present "on shore"generation system consists of 5-60 kW and 1-100 kW Detroit Diesel,480 V gen sets.The plant has the capability of operating a "ship-board"250 kW,480 V Caterpillar set in parallel.During periods of processing activities,five of the small sets are usually paralleled and on line with the 250 kW set.Minimum loading is reported to require two of the 60 kW machines on line with a total of 50-60 A and the 250 kW machine on line: with 80 A load. The switchboard at East Pointis,to be generous,in need of upgrading.The operator hasoccasionalproblemswith''phantom tripping"and parts for repair are hard to obtain. _...,All heat from the present generation sets is rejected to the environment. "Connection to East Point would require exteasive modification of customer equipment and'the plant manager expressed little interest in City power.City 34.5 kVis presently availableintheareaandtheloadcouldalternativelybeservedthroughastepdownbankat12.47 kV. eae Cooperative generation seems to be essentially out of the question under present©awb"circumstances.There is essentially no firm excess capacity and it further seems unlikely - --faults, '\UNAK\INTCNSDY ss ADM 0924-902, MrJimTaylr 14 Dec 89 "that existing equipment could be modified to provide adequate protection for external.a Se TimTaylor.we :eCCity:of:Unalaska;Electric Department S INTERCONNECTION STUDY ARGARET BAY »:*¥ou had apparently been contacted approximately a year ago by Peratrovich,NottinghamandDrageEngineersregardingthepossibleavailabilityofapproximately3mWforanew processor.Upon checking with PN&D,we found that there is presently little interest in further development at that site. 14 Dee.89 \UNISEA/GREATLANDS The City presently serves Greatlands as an electric utility customer.Greatlands presently maintains two,480 V,800 kW D399 Caterpillar gen sets "on shore"and two,480 V,600 kW D398 Caterpillars and a 480 V,800 kW 1399 Caterpillar gen set on the barge "Unisea". Interconnection between the above systems is presently not possible,but is planned ultimately.Present distribution voltage is 12.47 kV and they have no plans to change. Present loads are as follows: Barge "Unisea"1100 kW peak and 500-800 kW normal. Greatlands 1500-2000 kW peak and 500-1000 kW normal. The processor has plans to expand their operations and has obtained six,2.6 mW Fairbanks units,which they plan to rate at 2.2 mW for their use,providing 11 mW of firm capacity. These machines generate at 4.16 kV and they will provide step up transformation to 12.47 kV.The expected operational date for this new generation system is mid-summer of 1990. Their present projections indicate a peak load of 8 mW and they plan on providing that service through the operation of a maximum of four of the six machines.Jacket water heat will be captured under the present plans. In the near term plan which Greatlands has developed,they will make provisions for a Citytie,the capacity of which will be limited by the tie feeder size.Local management stated that a corporate-level decision would be required for participation in a jointly constructed plant.They further stated that under no circumstances would they consider purchase of all electrical requirements from the City. Cooperative generation seems feasible at Greatlands.If all equipment is installed to allow a City tie at the powerhouse as it was described to me,the additional expenses associated with cogeneration protection and paralleling could cost as little as $30,000 to $50,000. Excess firm capacity appears to be between 800 kW and 3.0 mW,depending upon Greatland's operating constraints.The reference to Greatland's operating constraints is based on their desire to only operate four of the six machines at any time. *\UNAK\INTCNSDY "ADM 0924-902 De areasaemer wre a ar a =-_ce comet eRe page os tegw pom etLASSPREYWRREOEEDeTESTEeeNgORTRTTROPAEeRBTRTNeeooOFBTRTenaeLad Mrs<Jim:Taylor SO -14 Dee'89-City'of,'Unalaska,Electric Department ee - INTERCONNECTION STUDYALYESKASEAFQODS,INC."alyeska has by far the most sophisticated generation equipment of any processor on theislandandtheysupplyalloftheirownelectricalrequirements.The 3.9 mW of existing generation equipment (2.5 mW firm)at the Alyeska plant includes four,480 V,600 kW D398,Caterpillars and a 480 V,1500 kW 3606 Caterpillar.They are presently installing a 4.16 kV,2 mW,Caterpillar 3608 gen set and will replace switchgear and the alternator on the 3606 with a 4.16 kV equipment bringing installed capacity to 5.9 mW and their firra capacity to 3.9 kW.Alyeska's highest distribution voltage is 4.16 kV.As is the case withtheotherprocessors,Alyeska's peak occurs during the winter.Their present load averages around 1.8 mW with an approximate 2.5 mW peak and "on-line"lows of approximately 609 kW.Alyeska'plans to increase their present electrical load by approximately 2 mW by Jun 90.This would bring total near-term electrical load to approximately 4.5 mW. Waste heat from both the exhaust and jacket water is recovered.A steam boiler recovers approximately 90-100 hp from the 3606 exhaust.They plan to recover an additional 150hpofsteamfromthenew3608set.Approximately 600-700 hp of steam is added to their system by an oil-fired steam boiler. Alyeska's local management seemed less than enthusiastic about interconnection with theCity.They state that any outage,disturbance or delay is a major problem in their process. They enjoy being the master of their own destiny and state that the longest outage they have incurred was between 15 and 20 minutes and was caused by human error.Their process is reportedly affected by even the most minor disturbance and there could be approximately 300 employees affected by the outage. Considering the extensive investment which Alyeska has already made in medium-speed equipment,it seems unlikely that they would be in a position to purchase anything but"station service"from the City.The most likely scenario would be a tie with Alyeska whichwouldprovideofficeandstandbyserviceforperiodswhentheyarenotprocessing.Thetotalloadcouldbeanticipatedatlessthan1mW.The present City facilities in the area are 4.16 kV and seem to be close to capacity.Upgrade for the area is advised and service at 12.47 kV or 34.5 kV would be recommended.Beyond the costs associated with area facilities upgrade,the only additional investment for the City could be the cost of a transformer. Cooperative generation seems a slim possibility as Alyeska presently has a negative excessfirmcapacity.It is likely that the total cost of interconnection to Alyeska could approach$300,000.This amount includes modifications to Alyeska's switchgear,metering,protective relays,and the above-referenced City expenses. DON TINT ATAU TATA TOON aTNA &ARAL ADA Mr Jim Taylor="City of Unalaska,Electric Department INTERCONNECTION STUDY WESTWARD SEAFOQODS Westwardis presently upgrading their entire facility.All informationis therefore somewhat 'preliminary and basically incomplete.They have obtained three,4.16 kV,2.6 mW Wartsila :-”gen sets and will possibly add a fourth unit.The anticipated system peakis approximately 6 mW.With three units,firm capacity is only 5.2 mW. According to Dick Eacker of Coffman Engincers in Seattle,Westward has no plan,ability or desire to connect with the City utility. -Jt appears that Westward has effectively precluded interconnection with the City through their choices of equipment and the distribution voltage.Assuming cooperative efforts, interconnection could be made at the powerhouse,but the processor anticipates a negative excess firm capacity. :,OFFSHORE SYSTEM,INC. Offshore Systems,Inc.(OSI)presently supplies all of their own electrical requirements through their on-site generation.At the time we were attempting to obtain information regarding this potential customer we talked to Ron Kruse at the site and determined that they were not only potentially willing to connect to the City,but that they were at a point of desiring to connect as they were increasing load and were unable to meet the anticipated load with existing generation.Existing generation consists of two,480 V,150 kW D3306 Caterpillar sets and a 480 V,250 kW DMT280 Cummins set.The present arrangement precludes paralleling and the local generation output is therefore limited to 250 kW.An additional 240 V,approximately 100 kW D3304 Caterpillar is installed at the fuel facility. Present load ranges from approximately 150 kW to a peak of approximately 220 kW.The facility is adding two 75 hp compressors and an office with an estimated load of approximately 75 kW.The estimated peak load will be approximately 500-550 kW including fuel facility load. Connection to this load appears to be reasonably straightforward for the City.An existing 12.47 kV feeder is in the area.At the time of my trip you were investigating equipmen'< availability for extension of your facilities and connection to their load. Cooperative generation seems of little value due to the present lack of customer'sgenerationcapacityandthelimitedgenerationcapacitywhichcouldreasonablybeexpected to be installed at the site. *'NUNAK\INTCNSDY ADM 0924-902 Mr.JimTaylor...ce on a Z ee :"14 Dec 89CityofUnalaska;Electri epartment ms *<-:INTERCONNECTION STUDY -AMERICAN PRESIDENTS LINE os 'American Presidents Line (APL)presently supplies all of their own electrical requirements"through on-site generation.They have recently been very receptive to the possibility of interconnection with the City.The present APL system has three generation sets,which -include a 240 V,200 kW (prime rating)D3406 Caterpillar,a 240 V,520 kW (standbyrating)D3412 Caterpillar and a 240 V,675 kW (standby rating)D398 Caterpillar.The _equipment is capable of parallel operation.There is no attempt to scavenge heat from the generation equipment.As is the case with most of the major potential customers in Unalaska,the operations and loads are subject to extreme seasonal variations.Minimum _load includes office and light shop operations and is estimated at approximately 100 kW. Peak powerhouse load presently occurs with approximately 100 vans and is estimated atapproximately725kW.APL additionally maintains several van-mounted generation sets which are capable of powering additional groups of vans. .Existing service equipment consists of a 240Y/139 V switchboard with a main bus section rated at S000 A and two distribution sections of 2500 A each.Generation switchgear consists of three sections,one per machine.Additional equipment in the powerhouse includes a stepup transformer for the crane heat and a stepdown transformer for local 208Y/120 V load. APL's distribution is essentially all at 240Y/139 V.Several major distribution feeders (consisting of 600 V rated conductor)originate at the powerhouse and terminate at 1200 A,NEMA 3R (raintight)switchboards throughout the yard.125 A breakers protect groupsoffour,30 A,3-f receptacles provided for individual vans.This system certainly seems tobeoperable,but voltage drop and "line losses"are not insignificant at this low voltage. The "ultimate"peak system configuration as described by Fred Dirkes consists of 174 vans (at approximately 7 kVA coincident load per van),house load of approximately 170 kVA,and 45 kW of static crane heat load.This represents approximately 1433 kVA.If theexistingservicevoltageof240Y/139 .V is maintained,the service would requireapproximately3461A/@ at full load.The nearest "standard"size equipment would be4000A.If the same load were served at 480Y/277 V,the service requirement would be approximately 1724 A/@.This would require 2000 A service equipment and since the ampere rating of the 480Y/277 V service would exceed 1000 A/@,the National Electrical Code (NEC 230-95)would require ground fault circuit protection on the main. \UNAK\INTCNSDY >"ADM 0924.902 we Page6 of 8° 2 Mr-Jim Taylor -. .14 Dec gg fT EEE *.City of,Unalaska,Electri' spartment*INTERCONNECTION STUDY City electrical facilities in the area are presently at 34.5 kV.With such a significant load,this would be an appropriate voltage to bring on to customer property.Numerouspossibilitiesexistforthepotentialserviceconfiguration.I will present some for yourconsideration: +A "double-ended"480Y/277 V service fed from two 750 kVA transformers.Keepexistinggenerationanddistributionsysteminitsentiretyasstandby.Install new 480 V switchgear incorporating feeder protection sized for the load.Install new 480 V distribution feeders,manual transfer switches and transformers (either 300 kVAor500kVA,480:240Y/139)at each yard switchboard site.Metering for the service would take place at the new switchboard and all low voltage distribution within the facility would be owned by APL.In the event of unavailability of City power,APL could start required generation and carry some load by operation of the newly installed manual transfer switches.Advantages include the reliability of redundant distribution systems and service transformers and the operational flexibility associated with the multiple feeds to the yard panelboards.Disadvantages include the high anticipated costs associated with the new main switchboard,the installation ofmultiplemanualtransferswitchesandthenew480Vfeeders. Investigate the feasibility of rerating the existing main switchboard and the generation switchgear for 480Y/277 V service.Serve the existing main switchboard from and meter the service at a new 1500 kVA,34.5kV-GrdY:480Y/277 V transformer.Install a manual interlock,such as a "Kirk Key"system,between the 480 V main disconnect and the local generation equipment.Re-energize existing feeders to the yard switchboards at 480 V and install transformers at the switchboards as described in the above paragraph.In the event of unavailability of City power,local generation could be utilized to energize the distribution bus and feeders.APL could manually limit load to an amount the generation equipment could operate.Advantages include the low initial first cost and the fact that APL still maintains standby capabilities.Disadvantages include the uncertainty associated with the potential rerating of the existing equipment. Install 34.5 kV transformers at each of the yard switchboards and at the powerhouse. Install meters,service disconnects and manual transfer switches at each of the yard switchboards and at the powerhouse.Advantages include the relatively low initial cost for the low voltage equipment and the fact that each location could be considered a service location and may possibly be exempt from NEC 230-95. Disadvantages include the large number of medium-voltage transformers required for the installation and the possible effects of multiple services from the standpoint of billing. Same as above but utilizing 12.47 kV transformers on APL property.Advantages are the same as above.Disadvantages are the same as above but also include the additional cost of the stepdown transformer. "..\UNAK\INTCNSDY ADM 0924-902 Page Tf8 Mr::Jim:Taylor '-BeCity'of Unalaska,Electr Yepartment:NTERCONNECTION STUDY"Tn summary,it is my opinion that thereis little possibility of parallel operationwith any ofthesemajorcustomers.The greatest possibility for cooperative equipment planning existswithIcicleSeafoods.This cooperative venture seems to be in the form of joint.participation in a new plant at the site of Icicle's processing plant.The other potential customers which may significantly interface with the City are OSI and APL.These customers may desire to become full time customers.In my opinion,rates will be criticalaswellascityparticipationinconversionexpenses.I have no idea of the impact of the City's tariff and regulations on these potential extensions. Cooperative generation at existing sites on your system seems to be limited to the two. Jargest processors;Greatlands and Alyeska.As noted above the connection to Greatlands would be technically possible and relatively inexpensive.The excess firm capacity available is approximately 800 kW.Cooperative generation with Alyeska is somewhat of a potentially losing proposition as they will not have sufficient firm capacity for themselves. It is my sincere opinion that the technical problems associated with cooperative generation seem "dwarfed"by political and operational concerns.Several of the customers seemed firmly committed to self generation and the maintenance of separated systems. I sincerely appreciate the opportunity to again work with you and the staff.If there are anyquestionsorcomments,please don't hesitate to call. Sincerely, .Neubauer Engineering &Technical Services Some Helle -_Thomas E.Neubauer,P.E. Electrical Engineer/Principal \UNAK\INTCNSDY (ADM 0924-902 Page8 of 8.= +SEAT ENING SE SS Sy TY NORMAL _<°"WEAT!RECOVERY |” 'PEAK ;ON LINE (hp)USAGE (MW)av av low'exist plan maybe exist under maybe exist under , ;const const ALYESKA .-3.9 2.0 -2.5 1.6 -1.6 7.6 700(oil)150 = reir are 100UNI/53LS 9.6 -1.1 6.9 -6 2:2 .6 -Y - -M/BAY >-4 --3.5 -----? W.S.Fe OS 7.2 2.6 -.6.1.8 -2.5 6 -Yous ICICLE 1.2 -3.8 .9 -3.6 .3,=---500 E/POINT 65 --.5 --12).10 -oe OsI 65 --.22 £33 -15 .10 7 =ae APL 1.400 =-73 54 -23 1000 =-= CITY 6.1 -=4.5 (2.2)-2.4 (1.2).t.4o --_ DW/EICK wl --09 =-aloo ---= $/SO5CI .2 --18 --loo ---- T77o "Teves 04 10.72 13.17 8.9 8.75 TZ 3S: NOT -VALUES REFLECT UNISEA GOING OFF CITY POWER ONTO OWN GENERATORS. Pe CRT en RialadalTERY areaeeTREES YePOMERAT:"OA ARETE 'Plant capacity in all cases,two(2)8R32 Wartsila gensets rated /@ 2,81@kw each.Total plant capacity 5,620 kW.Power house is/set up for #6 fuel in the first three cases and #2 fuel in the last three. #6 Fuel,Power House Turn-key estimated Cost $65 mien _ ne oo Cost of Annual Power Profit @ puntCents/kWh 15 cents/kWh TOT pif Feenecost 10 Year Financing 7.89 $400,655 ne reer costTr7.5 Year Financing 8.42 $361,101 of Add!pear 5 Year Financing 9.75 $294,337 #2 Fuel,Power House Turn-key estimated Cost\$3.8 millio a Cost of Annual Power Profit @ Cents/kWh 15 cents/kWh 10 Year Financing 10.890 $243,516 7.5 Year Financing 11.42 -$208,619 5 Year Financing 12.70 $144,565 - Be KE @ Bo cents /gellou wb vel @ uo CONTS |gator' i*Fishermen!+Teena,10 mee Seat,Wshigion 981 19”-Tel.(206)281-7388 --.Fax (206)284-1710 Ase 2 t eiata.reatle balk acl Uwaser ti . -Samece 12.7000 $18,998 3800200 0.74% Electrical Power Requirements AverageaAnnual a kWh\'prioe 1for electricity 12.7000 cents/kWh 20,114,840 iwnmente |:.° : ..15.00 centa/kWh 1,576,800 . $15.00 cents/kWh 87,602 "0 oo.-15.0@ cents/kWh -175,200 . :15.00 cents/kWh 35,040 , 5 cents/kWhistrial, "°toe seo teens te ere ee Fish/Meal Plant 12.7000 cents/kWh 12,240,000 Crab Plant 12.7000 cents/kWh 1,533,000 ""="Barge/Cold Storage " 12.700@cents/kWh”©=876,000 .Extra cents/kwh hunitys -. 'City Services 15.00 cents/kWh 876,000 -Residential 15.00 cents/kWh 2,190,000 co aewae wm Extvann.0.con eee.eee CONtS/KWhH 'a cc Butye .cents/kWh percials -. ww le +om ome core 15.00 cents/kWh.....175,200 .15.00 cents/kWh 158,000 15.08 cents/kWh 200,000 eee .eee oeoe-Conts/kWhe -l=oo ne 7 2Units Boe .___8R32_WARTSILA |."2,810kW Continuous Ys .72@ RPMageSystemOutputwoe0,2475 kW age Unit Hours/yr 4,820 Hours/yrvatorEfficiency.«...95.60% se Generator Fuel Efficiency -...7,945 BtuskW LHV (net elect) ,of Fuel Used oth Ba Diesel Cost @ Site ;4 $@8@ S/gallon . of Fuel eee o -o°¢130,000 Btu/gallon Bfificlency Contingency 4.00 ,Ol Cost @ Site .0@ S/gallon @.570@Gallons/hr --OflConsumption.2°” .3.58%of Total Generated 3.00%of 'Total Generated ASS OMPTIONS 2,296 2,314 Vos URon}WAT YoU Bx]on. PARAS HTIC MAY 60 mry NOT Ke SIDE :,32752.4458 \ -Coys...a}oo, Lowen pepewhiv/, OF Tne TRAV Bammer n Prepared by Kord Christianson':Month 9 .° Day 1 tYear89s|Time yo Total System Annual Output 21,681,000 kWh/yr P.H.Auxillary System Losses 758,835 kWh/yr Transmission/System Loeses>©-°°-! 650,430 kWh/yr'”were pane @ cane oncee emmeeoeNetAnnualElectricalSystemOutput20,271,735 kWh/yrCalculatedFuelEificlency8,263 BtuskW LHV (netelect)Fuel Usage es anne 1,378,244 Gallons/yr a Oil Usage 6885 Gallons/yr . Down Time/year @ Hours/yr owAverageParasiticLossess=2 : Power House 87 kw _ton/Sy (Tx former 74 kw.a"wee"Total Parasitic Load 161 kW Average Parasitic Losses %7% System Elficlency (after losses) _!Generator Output Terminals 15.73 kWh/gallon -Power House Loss-.comme fo mere 15.18 kWh/gallon °C wertransmission,Transformer 'Loss.14.71 kWh/gallon 'Outside Service Labor Requirements: | "'*mee wemeemews oe O* Projected Requirement Time 42 hours/yr Time with Contingency 8Shours/yr ae lm Maintenance Requirements per Engine| _Preventive Maintenance 121 hr/yr Component Repairs 13 he/yr 'Top End Inspection iJ hr/yr Major Overhaul °26 br/yr Parts Costs per Engine Preventive Maintenance 4,675 $/yr Component Repairs 4,298 S/yr ome - Top End Inspection 2,699 $/yEr Major Overhaul 11,086 $/yr Power House Base Expenses Fuel 1,102,435 $/yr ou "ot »24,361 S/yr ooInsurance7102,980 $/yr Power House Wages 196,560 $/yrc Outside Service Labor 13,573 S$/yr SeeiBeeAAkeet "Power House Manpower'PK Burdened Labor Rate Outside Service Labor Rate Outside Service Labor Contingency. _Living Accomodations Costs @ Site Crew Changes Per Year Air Travel-Transportation Costs/Trip.........- Teams On Rotation Man Hours Worked per Years'Engine '(per unit)Base Expenses per Year Preventive Parts =-"*Component Parts 'Minor Overhaul' -Major Overhaul 'Engine (per unit)Base Labor Hours per Year -eo ,:SS meres Preventive Labor uo,COMmponent Labor 3Men Financial 30.08 S/hr 88.00 $/hr Item Total 100.0%. Price @$/Man Day A Diesel Equipment ;$1,800,000 @Trips/yr B Generator Equipment a -©$/Man Round Trip --...C Switchgear...,31TeamsDGensetControls,Alarms.&Safety sysem :2184 hours/yr E Transformers -Battery System tet aee -:-F Distribution -Motor Control Require ents - .G Foundation -Grounding Requirement:- 0.97000 S/hr +H0.89000 $/hr a Cer bow 0.56000 $/hr J Air Intake System Requirements2.300200 S/he K Fuel System RequirementsLLubeOilSystemRequirements "|"- M Starting System Requirements |N Jacket Water Cooling System Require ents 0.02500 labor hr/unit hr 0.00270 labor hr/unit hr -Minor Overhaul @.0035@ labor hr/unit hr O Oll/After Cooler System Requirements 'Major Overhaul @.0053@ labor hr/unit hr P External Cooling Water (sea water)R quirementsPowerHouseBaseExpenses...-.__..-._....etek oe ene we ononcoe.Q Exhaust System Requirements_iTravel"20,000 S/yr R Exhaust Heat Recovery System RequienentsAuxillaryMechanicalSystemRepai20,000 $/yr 8 Oil Fired Boilers Adninistrative Overhead =tocewcammeos +3Q,RO8 S/YB-n --eee --ces os.)BP Txansportation 02 2.we ee,meOther..20,000 S/yr .uU 2020200 :rooG .V EngineeringFinancial"*wr os ecm core orem emcnreesagan «20 -Westing tr rr me ee I Life of Analysis..5 Years XGeneral -Miscellaneous*-®&of Project Financed 100.00%¥Documentation : Interest Rate 10.50%Z Adders Change Orders |a Term of Loan 5 Years i 4 om Total ,83,820,000 Tem ReeNeenaeeCeeAlosleeeanee:IeeeinCosy OF Power IS” Ven Se SITE."EO . , Team of beac 3.03 cenns kw! 4,33 cons |k wen 3.G2cev/twhh oeeee+:Bf nm remem re eee fee .oe t 2.24 ceaT her.95 ye 1 ot Amount Total yearly ”4Financed|Payments._: $1,800,000 $464,268 a vie momen Q arms wceeoo sepies4980.j22LT wa5a Bf URIS DOT ERT ET ey Ee BEFORE TAXES CASH FLOW 1 _vem eweeee owe A ee LL.'4 we See.Bl ee 8 Electricity Generated (kWh/yr)»21,681,000 21,681,002 21,681,000 21,681,000 21,681,008 21,681,008 21,681,000 681,008 21,681,200 Parasitic Losses (kWh/yr)._.......----1,409,265 ....1,409,265 ..1,409,265...1,409,265 1,409,p65_- 4,409,265 1,409,265 _/1,409,265._1,429,265) Net Electricity Sold (kWh/yr)20,271,735 20,271,735 20,271,735 28,271,735 22,271,735 20,271,735 20,271,735 271,738 20,271,735 Electric Rate (cents/kWh)12.7000 12.7000 12.7000 12.7000 7.8651 7.8651 12.7000 12,7000 12.7200 6 REVENUES: "Energy Sales”cee).-29574,5107 2,574,510 "2,574,518 2,574,510 1,594,1,594,388 2,574,514 /2,574,517""2,574,510 |” i Total Revenue $2,574,510 $2,574,510 $2,574,510 $2,574,510 $1,594,$1,594,388 $2,574,51 $2,574,510 $2,574,510 EXPENSES _._...-eee eee woene .-cee ee eee be ')Fuel 1,102,435 1,102,435 1,102,435 1,102,435:1,102,43'102,435 1,102,1,102,435 1,102,638 ou ..wee eee >24,341-.----246,341 ----.24,341...24,341.-.-24,34 24,341 -....24,=ve 24,341 WW 24341 Preventive Repairs (parts)9,351 9,351 9,351 9,351 9,351 9,51)9,351 9,351 Component Repairs (parts)8,58 8,580 8,58 8,588 8,583 8,580 8,58 8,583 |)-Minor Overhaul Repairs (parts)----_-5,398-------5,398 - ---5,398--- -5,398 _-----5,398 -4----5,398 =-§,398| -----5,398-------§,398- Major Overhaul Repairs (parts)22,172 22,172 22,172 22,172 22,172 22,172 22,172 22,172 22,172 | Other Mechanical System Repairs 20,000 28,000 28,000 28,000 28,200 20,0208 22,020 228,208 20 203 Labor (power house)oe 196,560 "196,560"196,560 196,563 196,560 "196,568 196,560|""" "196,560 196,560 Crew Living Accomodations @ @ @ e @ 2 @ @ Crew Transport to/from Site _,e . @ @ @ t)@ @ @ Insurance 102,980 102,980 102,988 102,980 102,983 122,982 02,983 102,98 102,98 Travel/miso 28,000 220,200 20,0200 20,000 20,208 28,000 20,000 20,000 Outside Mechanical/Service Labor .. _13,573 13,573 13,573 13,573 13,573 13,573 13,573 13,573 Administrative Overhead 38,008 OOO 38,002 38,0020 32,0020 38,000 32,200 32,008 Other 28,022 "|av 20,000 22,000 20,000 22,008 28,008 28,008 22,203 Total Operation,Repair &Maintenance 1,575,391 $1,575,391 $1,573,391 $1,575,391 $1,575,39 575,391 $1,575,391 $21,575,391 $1,575,391ExpenseséGrossProfitBeforeDebtwreteeee999,12¢i)999,120 999,120 999,120 18,998 999,120 -999,120 999,120 Debt Service 989,122 988,122 980,122 982,88,122 $80,122 980,122 983,122 Net Profit (Loss),Before Taxes $18,998 $18,998 $18,998 $18,998 ($961,($961,124)$18,998 $18,998 $18,998 Revenue/month 214,543 214,543 214,543 214,543 137,866 132,86:214,543 214,543 214,543 Operating Expenses/month L cmence.,231,283 ,131,283 131,283 _131,283 131,283 13,2 131,283 131,283 131,283 Net Profit as a %of Revenue 0.74%0.74%8.74%8.74%-69.28% 64.26%@.74%@.74%0.74% Breakeven (kWh/yr)20,122,147 20,122,147 28,122,147 20,122,147 32,491,878 32,491,878 20,122,147 20,122,147 20,122,147Energyrate(cents/kWh)were eo oemoo 12.7000....12.7000..12.7008 ......12.7000 S1 12.7000 .12.7000 .12.7000 Breakeven as %of Net kWh's Sold 99.26%99.26%99.26%99.26%160.28%168.28%99.26%99.26%99.26% a o -Are "THese -ExeeolSES ReAgoiary ine Lie IPH WHAT foo -tleery =HAS MIy SbET CosTS ALE ° -vat i a vet RATE CALAULATION a Year i 2 3 4 5 6 7 8 9)10 AM A Electricity Generated (kWh/yr)21,681,000 21,681,000 21,681,000 21,681,000 21,681,000 21,681,000 21,681,002 21,681,000 21,681,000 *21,681,208 21,681,000 21,681,000 21,681,000ParasiticLosses(kWh/yr)vevomee -1,409,265 |1,409,265 1,409,265 1,409,265..1,409,265.1,409,265..1,409,265 _.1,409,265...1,409,265 -.1,409,265 -....1,409,265 --.-1,409,265 -.-.1,409,265NetElectricitySold(aWhsye),20,271,735 20,271,735 20,271,735 22,271,735 20,271,735 20,271,735 20(271,735 20,271,735 20,271,738 20,271,735 20,271,735 20,271,735 20,271,738PuelUsage1,378,046 1,378,044 1,378,044 1,378,044 1,378/044 1,378,044 1,378,006 1,378,044 1,378,04 1,378,044 1,378,044 1,378,044 1,378,044OllUsage6,085 *6,085 6,085 6,085 6]285 6,085 6,085 6,085 6,08 6,085 6,085 *6,885 _6885 Price of Fuel @ Site ($/gallon)0.80 0.80 0.8 0.80 82)0.80 0.82 0.80 0.80 0.80 0.80 0.80 @.20 Price of Oll @ Site (S/gallon)_4.08 _4.00 4.00 4.00 x.)4.08 4.00 4.00 4.02 4.02 400°=4.0@ 4.08 EXPENSES/RATE $S$.;bee ..Buel |Uindex)1,102,435 1,102,435 =1,102,435 1,102,435 1,102,835 1,102,435 +=--1,102,435 =1,102,435 «1,102,435!1,102,435 =,102,435._..1,102,435.soa 138 oil (index)24,341 24,341 24,341 24,341 24,341 24,341 24,341 24,341 24,341 »24,341 24,341 24,341 OR &M Expenses (index)448,614 448,614 448,614 448,614 448,448,614 448,614 448,614 448,614 448,614 448,614 448,614 448,614.Debt.Service ..(fixed)bas were 980,122....980,122 980,122 980,122. 980,1 980,122 _@ .@ viOf @ Qo wove Orme =.a Total ;$2,555,513 $2,555,513 $2,555,513 $2,555,513 $2,555,513 513 $1,575,391 $1,575,391 $1,575,391|$1,575,391 $1,575,391 $1,575,391 $1,575,391 Profit $18,998,$18,998 $18,998 $18,998 $18,998 98 $999,120 $999,120 $999,120 $999,120 $999,120 $999,120 $999,120 _RXPENSES/BATE __cente/kWh .oe odRuel'.(index)5.4383 5.4383 5.4383 5.4383 5.4383 §.4383°°°"$4383."5.4383 5.4383 ©." 5.4383 $4383 "OM (index)0.1201 @.1201 0.1201 @.1201 @.1201 0.1201 @.1201 0.1201 @.1201 @.1201 @.1201 OR &M Expenses (index)2.2130 2.2130 2.2138 2.2130 2.2138 2.2138 2.2130 2.2130 2.2132 |2.2138 2.213 Debt Service (fixed)4.8349 4.8349 "EPH J 0.0000 2.0000 0.0000 0.0000 0.0000 2.0000 0.0000 @.0004 Total Cost of Energy 12.6063 12.6063 Bs,7.7714 7.7714 7.7714 7.7714 7.7714 7.7714 7.7114 7,77 ; coe 2.b0 _e "yg i.Pros 0.0937 0.0937 .0937 0.0937 4.9286 4.9286 4.9286)4.9286 4.9286 4.9286 4.9296 ,Blectric Rate (cents/kWh)12.7000 12.7000 7.8651 7.8651 12.7020 12.7000 12.7000 12.7220 12.7000 12.7220 12.7004 :foe 7 .4 Pr qTeen,of=bean cece nse |_Cee fe coon - 7le A Ay FAC poet CesT ANID "Tye "oF .rors 1S./ey.wenn G Fee IS The oMméa Ate,FACTO?4BeemoCosTprec,2 Hl on +oO,:yo we ROOEA 4reanEne:ae ae ecwmmmes |saware --wo .scot omean +comme "wad ;noe _ canes od .4 aieMraheer.ful ane:Dg CRE 8 ROSETTES ORET TRS PP CYT PERE DOE RYT EE TT ee TS ER SO TaSTTNTPROTRLNTTAONIHS:7 SS TET aera ak ORR mS a .eee rn weoe.ance ie ee i ee . :;Ry.re ence :'.Lele t .so RBe Ba :: .LS Bo,: ENERGY STUDY PREPARED FOR tiSe2 | BY JsS .&.BRONSON P.E,PS. NAVAL ARCHITECTS,MARINE ENGINEERS 2208 NW,Market St 'Seattle Wa.98107 UNISEA,INC.AND GREATLAND FACILITY ENERGY STUDY EXECUTIVE SUMMARY The fundamental ecenomic fact identified by this study is that the waste heat energy being gererated by the public utility at Dutcn Harbor is being ourchased by Unisea,Inric. arnaq ocumped to the sea.The distance between the public utility power plant and the Unisea facility makes heat recovery rot economically feasible;even were Unisea gagispesed to purchase this waste heat as an addition to tneir current purchase of electrical power. Thas fact is of significance vecause the Unisea/Greatland Facility predominantly demands energy in the form af neat. The facility therefore must purchase the fuel and maintain the equipment to generate this heat,in addition to having oaid for it already in their power bill ta the public utility. The dollar value of the differerce between the current eneroy casts of the facility and the energy costs under the recammended self-sufficiency is $1,808,675 each year when the income Trom selling electric power ta the punlic utility is included.The dollar value of this difference is less tnan $268,304 each year wher self-sufficiency alone is acnieved.(Because U.S.Teqeral law requires the public utility buy electric power Trom cogereration plants : at tne punlic utility's cast,the option of beceming self-sufficient while allowing the public utility's plart . to ceomtinue to generate electricity is a financial aosurdity.) The study snows tnat Unisea's present expenditure level for energy will purcnase a new power plant within four toa 'sever years.The management decisicn required is opasically as to the ownership of the power plant at tne end «ef this pericd.If it is the public utility,Unisea's Future energy costs are likely to be quite high,into oersetuity.Further,tne Flexibility to expand production will oe irnnibitea,if not prenibited by the constraints of erieray cost and availability. This study has cther ramifications ard recammendations Gy conjunctive to providing future Tlexibility while increasing profitabdility.The primary recommendation oeing that the diesel engines selected be medium speed erigines capable of burning heavy cil and cod oil blends. <' PORES Bas hc SUN VS ma weet ere SOR EG RETSTALEOMTORT RE OETR Oe acta Be acta is Sie Sat isd SE EEE EEE het :Pn ae :arn The light,high speed engines are low in capital cast odut ( "hien in maintenance and fuel consumption and carmot be .-operated on the heavier oils.The large,low speed"engines are capital intensive and are not maintainable witn existing tools and equipment available on the island. .-Tnere is also a significant problem in transport and handling of the large,low speed diesel engines. Tne aovantages of using heavier oil is that cod oil can be burned and that light diesel oils become bath disoroperticnately expensive and unavailable in times of "pwising fuel costs.Because delivery quantities control the economics of the use of heavy cils,this study shows the need for tank storage that can be heated in the Future.Tne project cost therefore includes an estimated cost of such storage. The resuit of tnis study is the following recommendation: The financial interest of Unisea would be best served by Building a Dower plant "centered”in the facility. This ocwer pliant shauld have the capacity to guarantee electric pawer to the Unisea/Greatiandg facility ana ta all the current clientele of the public utility. The ouilding snould have the physical room for expansion to increase the power productican to serve future island needs,as well as future Unisea rneeas. i,OB NEE ER TS Re OEE me oa °Ot aye Index .a a| Tatroluction .+oe ee ew we we we lw hw 6hTR KE Page 1 Existing Energy Demand .........Text Page 4 Production Considerations ........Text Page 3 Power Plant Building .........Text Page 13 Ceneral Construction Procedure ....Text Paye 17 .Fngineering ..2...6.ee ee eh hehe)CUT UX Page 19 FIGURES AND CHARTS: Energy block diagram Enecgy demand data sheet Comparison of energy costs Capital cost summary and Annuity calculation Proposal drawings a +.:an .'"7 a tot +lathes aah ti es LR leis 9 a ae ate Na He OM FRET.ROT,STE EE LO ETE YE SR Te TE aa Aeckiee <”*te eee ts »aA :apnea UNISEA,INC.AND GREATLAND FACILITY ENERGY STUDY INTRODUCTION Thic study was undertaken as a result of Unisea management observing the need for improving the efficiency of energy use in the production activities at Dutch Harbor.The inilial examination was going to be limited to an evaluation of the power generation and use of waste heat from the diesel engines. The "on site"data gathering process caused the study to imciude analysis of the Dutch Harbor area's use of electric power and oil fixed heat,at least so far as the electric load on "the City's"generators is concerned. This seport is organized to present the existing configuration in terms of average energy costs and their alluwcation.Because no financial data concerning either present cor proposed production is available to this analysis,the information about energy uses and potential savings can be displayed best by comparing a new Unisea owned power plant,energy recovery equipment and heat istribution piping to the present mix of energy sources. "Ohny additionof production capacity should be expected to - TEXT PAGE 1 SPOTTny,0 rs oh OTR ORI RRR TTT ORE ORR TTR ST ARRIDE DTI ARR ESOP be self supporting.However,the savings in expenditures --.|( relative to present energy expenditures are so si jnificunt,these savings alone can be capitalized over Se eal years to pay for a significantly expanded facility. (a:tiough that eventuallity isn't treuted here).The te :haique is to calculate the difference in energy cco..3unmption between the proposed configuration and the Present one;to convert that to dollars at prevailing mactersial rates;and to assume these differences are cuwulative at an annual interest rate of 8%.This is then Gi:aunuity.The pay back is the same as though the mo..tily differences were invested as they became av..iJable,at this annual rate of return,and the number of years Jetermined in which pay-back will have been ccoupieted.The assumption here is thut funds made av .iitable to management can be assigned correctly so that pr fits ¢«¢sflect at least an 8%growth in equity, co.pounded monthly. Fe iecul ceyulutions require public utilities to buy power when that power is available at the utilities'present cu.t.The cost of wages,oil consume:,fire protection, bu.lding maintenance,etc.,incurred by the City are not avV.ilabl:.However,Information about the average and per.k electrical production,as well as the proportions "pe wided to Greatland,Unisea,various other commercial "eh ecprises,the airport,Unalaska,etc.was provided,as. TEXT PAGE 2 OU Sa TS 2iitRe eete a ON " SDT Laete es aS bo dS tains acta St if3beataecateoaetaaantedeioS PTR RRR IETS Me TEE TF Wee oy npr oo PURSE TAINO 2 omer nosaae)te : :o a :.aan vw .8 :ee eo tt an rn-t well as thelr charge-out rate.Reasonable costs would be = 90%°of the charge rate but to assure a conservative approsch,74.77%of the charge rate was used ($.08/kwh)in.. this study. Similarly,the efficiency of the (SW 280)diesel engine exhaust stack heat exchangers at full engine power is actually 25%greater than was used here.However,since much of the engine operation is at power levels less than full power,the more conservative value was used.This approach was used throughout the analysis so that the savings culculated may be viewed as minimums,not as targets or goals.In this same conservative approach,the enginy efficiency assumed for the existing engines (on boacd the barge)is the same as for the SW 2380 diesels. Actual efficiencies differ as much as 24%. conversely,estimated capital costs were assessed on the "high side"so far as was possible.Really accurate Capital costs can be assessed only after completion of a more extensive design of the selected new configuration.° This would have to include value given for retention and re-use of existing equipment (or its sale).Very little of this could be considered here and capital costs estimated appear to be on the "high side",as intended. Finelly,the $.15/gallon "tax"on all.fuel burned 'in. TEXT PAGE.3-_ aeeeae .cea ee cenated aa haeURLOeoarOe. : - Toes Jiesel-engines is included throughout the report.The -avings:would be significantly enhanced if fuel could be burned in the diesels at the same base cost as fuel burned lm boilers. CKISTING ENERGY DEMAND AND FACILITY CONFIGURATION: he "fLacsility”includes several apartment houses, luplexe:,production buildings,hotel,Mall,dock and Sarge.The only cogeneration employed currently is the .2¢Of the Unisea barge diesel generator jacket water heat °9 heat potable water and process spaces and the use of -xbhaust gases to preheat boiler combustion air. "Sccatland has two,600 Kw diesel generutors but chooses to .urchaze electrical power from the city.One of the tiesels has a stack connection to a "boiler"but it is not .5cd an.l is not believed usable. tuildinys are connected to the city's power supply and rust ars individually (or collectively in small groups) Seated with central oil fired furnaces.Some electric owered heaters ate employed.very few bulldings are zaparat:ly metered for electric power consumption.The-alatenince:stake;Mes gers JerryDowney and:Pete 'MaloneyGreatland,and Messers,AL.Spencer and Paco 'Abello of. "EXT PACE 4 | ee a ee Sadeatae CI a bac ie ke et Mindy et re Lip erage ETATpew nes epRe SURE CR MOTT OTL)AMRAAREERGt ream eit ire -_ \ Unieea,Inc.have Inaintained excellent,detailed records ..08 pewer and oil consumption.These are complete within the limitations of the metering available.these records make it possible to identify demand for each building in ters.of "required electric power"(for lights,motors and cooning)and separately,"required heat energy"(for hot potulle water and for space heating). Because each building was constructed without adherence to an "snergy plan",the installed capacity total is considerably larger than would be the case for a single, cential heating system.The spread sheet showing energy demand has separated the actual electric loads and heat loads and doesn't quite reflect the measured Kw nor the mcasuced oll consumption.This was done to permit compiarison to proposed configurations.The reader must also cemember that the 2000000 BTU average heat load for Unisea production is currently being provided by jacket water waste heat,and doesn't cost extra oil. Several specific design problems exist in the present configuration that result in "wasted"energy.These include a non-insulated hot water tank in the Amaknak apartment building,the lack of individual heat controls 'in the 3 plex (requiring the use of an "open window" apecvach to room heat:regulation),and the lack of"envelopeAasinlation.on (the:Uniséa.barge.'Crab cooker "<EXT PAGE'S water ls dumped "hot"with no equipment avallable to reclaim the energy from the water.(The real estate . constraints aboard the barge make a holding tank impractical.) There is a design problem aboard the barge that probably results in excessive maintenance costs of the diesel generator engines.The three engines mix their cooling water systems in a common circuit.This was probably, originally,installed with AMOT valves on each engine to control engine temperature.On a common circuit,these valves would have "hunted",however,making control impossible.They are not now present in the system. Control of the engine cooling system is labor (and skill) intensive.In the place of AMOT valves,manually operated butterfly valves are set for each electric load. During the examination,the outflow temperature of the engines was 170 degrees and the return,105 degrees.This corresponds to a water flow of only 67 gpm.The problem inherent with this design is that each engine is running with a large temperature gradient from one end to the other,inducing wear and friction losses not intended by thelr designers and the low water flow produces laminar heat transfer in the heat exchangers and in the engine "block.This allows buildup of deposits in the cooling. aa system that encourages corrosion and further.reduces heat._ AE a es ee ae TEXT PAGE 6 > gE NSS SRT Th MOET TRIE OM STEge CNT RECREATE Be ETD Te Sa RET TENT ARATE 97a RIS SN TENSAR TR TTPO LET TT RET,TE transfer.The immediate negative result from running a "cold"engine,of course,is excessive fuel consumption. A cocrect design would have a separate,small heat exchanger on each independent engine circuit,with an engli.ce protecting AMOT valve related to each exchanger.A Separate small exchanger with sea water in each circuit would "waste"any heat not required by the ship.Such an installation would maintain engine block temperatures of 160-180 degrees,keep fuel consumption at efficient levels and cefend against excessive engine wear.The higher £low associated with the smaller temperature range would keep the passages cleaner and keep the physical size of the heat exchangers modest.Conversely,the amount of water required from the hot potable water system would be less because of the higher temperature,and the effect of the heated aix would be significantly more "pleasing". The total city load average is 2200 Kw,peaking at 3300Kw. On the spread sheet showing the existing energy demand the part of the city load already accounted for in the Unisea facility was subtracted from the city's total and the remainder listed under "other city load". The total present Unisea/Greatland average loads are 1724.56Kw and 9157016 BTU/Hz .Of this.heat.energy.being :used,only 3957016 BTU are "low grade.(under |140.degrees). TEXT:PAGE 7 RT SEM 'a The waste heat avallable on average from a diesel engine vroducing this Kw is 6133412 BTU.O£this waste heat energy,only 941000 BTU is available as high temperature heul,i.u.,over 300 degrees.The significance of this distinction is that certain heating requirements are for high tetperature heat.These include the cooking of meal and crab at 210 degrees and the drying of meal at 300 degrees.Hot potable water,space heating,and crab cooking water preheat (to 140 degrees)can all use ceclaimed heat from the jacket water. The conclusion,then is that all potable water and space heating in the combined facility can be provided by waste heat if the electric power consumed is being produced by diesel generators located inside the facility.Only a sinall part of the energy required for crab cooking and none f£or meal cooking and drying can be provided by the diesel engines supplying this same electric power load. PRODUCTION CONSIDERATIONS: The "boiler"demand for cooking crab occurs primarily during the 80 minute refill of the cooker.There are two avenues to reducing this high demand.one {1s to use some waste heat from the:Jacket water to heat incoming £111 £ 4 ' water=from 38,degrees to 140 degrees.The other is to TEXT PAGE 8 Haeoa. construct an Insulated tank to hold the incoming £111 water while outgoing cooking water is circulated through it in a serpentine coil (primarily located in the upper third of the holding tank).This would retrieve about 3/4 of the heat energy before dumping the water.While building a tank for this purpose is capital intensive, there is no "less costly way"to obtain 6,000,000 BTU every day for production!The basic analysis assumes no such tank..is available,however,since there is no practical place on the barge to install such a tank. The large quantity of high temperature energy requized by the meal cooking and drying process can not be efficiently produced by waste heat boilers because there isn't the electrical demand on the island that will justify the number and size of the diesels required.However,the crab cooking process requires only a "trim"amount of high temperature energy for cooking.This can be efficiently provided by employing an electrically fired hot water heater and exhaust stack hot water heaters in the diesel generator engine stacks.The increased electric load raises the amount of stack energy and jacket water heat energy available for cooking,as well as converting some electric power into heat.This is a more efficient use of the cil for two reasons. a)The diesel engines can be'selectedto;burn heavy |TEXT PAGE'9 Saw te ede AB ea tee el vil or blended fuel,including cod o11 and PS 300 oil;a thus increasing the fuel options in the future. b)<A pressurized water system can be employed that will not evaporate the water,allowing the heating to be simply controlled without traps,condensers,feedwater reservoirs,etc.Such a system can be easily maintained and run essentially in an automatic mode.The cost of maintenance of this system can be even further reduced by using "Dow Therm"or Monsanto's "Therminol 44"as heat transport fluids instead of pressurized water.These fluids have been developed for the purpose of heat transport,and permit the operation of heat exchange up to S00 degrees without pressurization.The pipe sizes and Duinp sizes shown on the diagrams are based on the use of Therminol 44 and are consequently larger than would be the case for water.Their cost and power requirement, however,is comparable or less.Food and drug administration requirements may involve double heat exchanger walls or a tertiary pressure system at the cooker,but this study hasn't the time frame that will allow identification of any and all FDA requirements on this pelnt.If gome such scheme proves practical,future weal cooking and drying configurations should consider amploying thexrminol in place of steam because of simpler controls and less maintenance.St a TEXT PAGE 10. "| nt aie Sele Ke Cea ER at aahaieart rl Eta 8y AN.Ap Om EE TY TQ NeEY oo rors "The "eagines are sized to keep RPM relatively "medium", (née over 900),and to provide for usual power productionwith"cunning"reserve and one extra engine to permit scheduled down time.The engines used in the study are 6 cylinder SW 280 bore.These have the capacity to burn PS300 as well as cod oll efficiently,and will run at partial loads without excessive sooting problems in the heat exchangers.Their ancillary components are engine driven so that the expected output is real,i.e.,no reduction in output is required for cooling water pumps, fuel pumps,etc. PS 300 and cod oil are available in quantities that vary in price and quantity.They can be used to Eurther enhance the comparative cost savings.The miniimum quantity of PS 300 deliverable by Texaco to Dutch harbor is 30,000 bbl.This is 1,260,000 gallons and is an eight month supply,requiring two storage tanks (insulated)60' Giameter,by 30'high.They can be heated with the same therminol loop providing heat to the crab cooker.The eight hour interval required for cooking the crab each day will cob the fuel heating system,but its heat capacity will be large enough that the transient will not be noticed. 'Similarly,the non-production.time where the heat wouldotherwisebe.dumped.to 'the sea,'now.becomes:"productive" at je a ate et TO UR Rw TEE TOS2BTPERSMOMeeEAteTeLtthESEAae ."Laurer a Pee time in that the heat can be used to heat fuel,making it Of less power draining to the pump motor. '>PQWER PLANT BUILDING: 'The sugyested housing for the power plant is a reinforced conerete structure with roof design and wall design for selsmic zune 4 loads and an "importance factor"of 1.5. This interpretation of the Uniform Bullding Code is based upon the supposition that this power plant would be the primary power plant for the island. Blyo,the least maintenance will be encountered LE the engine lube oll sumps are large and separate from the engine.The design is envisioned to incorporate seismic chocks (similar to collision chocks on a vessel),and vibzation isolation of the engine/generator frame base. Reinforced concrete walls are suggested for fire zone safety and for noise suppression.Tf the Fire Marshall requires area reduction for fire zone control,the space suggested can be subdivided without excessive extra cost. Only the engines,generators and stack heat exchangers are shown on the drawings.Lube oil tank,fuel oil day tank, puriflezs,piping,etc.,will all be required but their design wasn't part of this study. 'Phese cost estimates are based upon the timely o PEXT PAGE 12 | wines gp.4 +Les one Riek wen the ie ReDecetata?i ee ee -oe ne ARR Re le ae awa tert ea SMe (4 organization of the construction.For instance,thegeneratorsetsshouldbedeliveredandsetinplace after the footings and slab (with integral sump tanks,dirty oil tank,etc.) are.in place but prior to wall construction. This should include the stack heat exchangers,the lube Oil and fuel oil purifier,the switch boards,and large motor controllers.Hot water and therminol piping can be fabricated,insulated and buried simultaneously with building construction and isn't.additive to the schedule. A couplete inventory of materials and components must be staged and shipped with a simple,but competent receipt inspection preceding shipping,and preceding installation. Frequently,the assumption is made that an item correctly ordexed is also correctly delivered and functional,when the enly evidence is the arrival of a crated object, showing correct bills of lading.This is so often not true.that a time dependent cost analysis should not be basec on it,unless rigcrous receipt inspection is employed.The estimate includes labor for inventory control and receipt inspection in the belief that failure to exercise this construction management technique will result in the lack of critical components or material,and consequent costly delay in the construction. TEXT:PAGE 13. SEE ETL RE TT a TSE LT ETE ome nce ie RT a ae Ron heey ate a A ai Ok ae Ra Rk Nl iad a oe iain a cai Ae ee ee RO!aeeetteeOELeSyshommeeeaeoeraCreBaa i' ENGINEERING:| The cost of engineering has not been included in the capitalization of the options,following usual loan portfolio practices.While the actual engineering costs may vary over a wide range,because much design can and would be accomplished by administrative and management personnel within Unisea,Inc.and Greatland Services.The engineering,scheduling and purchasing support,receipt inspection support,etc.,if provided totally by L.E. Bronson,will approximate a cost of $220,000.The part of this cost representing actual design costs is about $183000.Both figures include direct expenses,travel and per diem. ra AIORE PORES APEONTO NS 8 BC IR _EFF=.737ENGEFF=.4276 LBS/KW7.62 LBS/GAL=.0561 GAL/KW18,365 BTU/LB=139,942.7 BTU/GAL 325 KW--1562 KW->HOTEL &RESID'L LOAD wees HEAT TRANSPORT pee 2,000,000 -3,425,00 BTU/HR |=>UNISEA CRAB CKG LD 600 KW -1200 KW THIS PEAK HEAT LOAD EXISTS FOR ONLY 80 MIN./24 HRS pa 2,000,000 -8,424,200 BTU/HR << | GLS MEAL PLANT|gg KW -1000 KW GENERATOR'S INSTALLED 2800 KW AVG-4680 KW PK aleSe-=<g-JACKET WTR HTR'S SEA WATER 3,000 GPM SEA WATER471GPM <a45.5 HRS/DAY:2800 KW +3741629.6 BTU/HR=2434.7+518 GAL1.33HRS/DAY 3780 KW +8600000.0 BTU/HR =282.0+81.7 GAL.7AT HRS/DAY 2920 KW +7722000.0 BTU/HR =1174.5+494.5 GAL DAILY FUEL=3891.2 GALLONS MONTHLY FUEL=116736 GALLONS. 6,000,102-12,973,407 BTU/HR3891.2 GAL/DAY=116736 GAL/M STACK 5,741,629.6 -8,600,000 BTU/HR <i 6SW280 |ban ELECTRIC 5860 KW]@ 720 RPM4EACH BOILER 120 KW--780 KW OIL FIRED BOILER 1094.27 GAL/DAY32,828.1 GAL/M WTR HTR'S 1,585,352 BTU/HR--2,261,818 BTU/HR -ELECTRIC POWER were magyoPt PleatedStirrSee TT)SE aR OOO REESEREE-TORTIE FS OIROREpT RIE CA) sPaa *5 eo UNISEA,INC.AND GREATLAND FACILITY ENERGY DEMAND: The quantities are not all "measured"in that some facilities are heatedelectrically,as are some hot water tanks.These have been separatedandequivalentoillisted;with the electric load reduced accordingly. FACILITY SQ.FT.Kw(AVE.)Kw PEAK SQ.FT.BTU BTU GAL/MNTH (FLOOR)(LIGHTS)(LIGHTS)(ENVL'PE)(AVE/HR)(MAX/HR)(OIL) VITA HS 1 2655 1.16 16 7070 10522 18413.5 75.2 VITA HS 2 2200 1 14 5808 8644 15127 61.8 VITA DX 1 1914 1 14 5348 18467 32317.25 264 VITA DX 2 1914 1 14 5348 18467 32317.25 264 OLD BK HS 4000 1 14 12828 62397 109194.7 446 BEQ 3024 1.3 18 8700 13000 22750 186 TRL HS 1 500 L 16 1960 9793 17137.75 70 TRLR HS 2 500 1 16 1960 9933 17382.75 71 TRLR HS 3 500 1 16 1960 9933 17382.75 71 TRLR HS 4 500 1 16 1960 9933 17382.75 71 TRLR HS 5 500 1 16 1960 9933 17382.75 71 MTR SHOP ----2 28 60000 60000 105000 428.9 NEW BK HS 5000 1.2 28 15000 89671 156924.2 640.9 "APT 720 1 14 2766 16535 28936.25 118.2 UNIS.INN 41000 76.2 280 53682 339687 594452.2 2428 _MALD.----61.6 210 ----226505 396383.7 1619 AMAKNAK 23 16200 Tel 99.4 22394 141723 248015.2 1013 GOLD APTS 8200 3.6 49.7 11112 82404 144207 589 GR'N WRHS 5650 2.5 35 14360 90880 159040 650 HILL HS 1 2400 1 14 7180 10686 18700.5 210 HILL HS 2 2400 1 14 7180 10686 18700.5 210 HILL HS 3 2400 1 14 7180-10686 .18700.5 210 UNI DPX 2800 1.2 16 8252 12281 21491.75 247 GLS REC'N 5400 2.5 35°9480 60000 105000 429 GLS BK HS 7800 1.7 24 13240 64400 112700 566 GLS 4 PLX 3250 1.5 21 6310 37860 66255 270 GLS DOCK ----116 161 --- GLS OFF'C ntedaten 1 5 ----99000 173250 7038 MEAL PLT ----4 8 ----9570 16747.5 68 8 PLEX 8680 3.8 53 14086 84500 147875 604 COD WRHS -c--4 8 ---- HNGR 18 w---4 8 ates 10920 19110 78 UNI .OFF'C 1000 0.5 4.5 3120 18000 31500 129 UNI.BARGE ----5 70 ----300000 525000 2150 NC MCHN'Y 9.7 193 TOTAL DEMAND:324.56 1562.6 1957016 3424778 15017 PRODUCTION ENERGY REQUIRED_AT PRESENT: GLS 7800 1000 |5200000 8600000 37168 UNISEA |600 1200 2000000 12373300 $21443 1724.56 3762.6 9157015 24398078 73628 OTHER CITY LOAD 1075 {2175 / TOTAL UNISEA,GLS 2799.56.5937.6 o 9157016 24398078 -13628(AND "CITY") CAPITAL COST SUMMARY A.NEW POWER PLANT:BUILDING:480000 NEW GEN SETS (4,SW 280 BORE):2212000 (900 RPM)POWER PLANT PIPING &INSTL'N:(.97200 aodPOWERPLANTPUMPS&HT EXCH'RS:1225000 qae asPOWERPLANTELECTRICAL&SWITCH '450000 ,saeGEAR:Ser i Parag3464200pheaeadt B.NEW FUEL TANK STORAGE:848370.HEATING CIRCUIT,Gs HEAVY OIL:78000 excluded here C.ABS PIPE TO EXISTING BUILDINGS:26,7000 ; D.NEW ELECTRIC HEATER:33000 E.HEATING PIPE (HIGH PRESSURE OR ''HERMINOL 44)TO NEW PROC.BLDG:101900 TOTAL PROJECT COST IS:4713570. VALUES ARE ESTIMATED F.O.B.DUTCH HARBOR.ACTUAL COSTS WILL BE LESS, DEPENDING UPON AVAILABILITY OF LESS COSTLY TRANSPORTATION FROM SEATTLE AND THE AVAILABILITY OF LOCAL LABOR.ACTUAL COSTS WILL BE FURTHER REDUCED BY DESIGN REFINEMENT AND MATERIAL PROCUREMENT AND INVENTORY MANAGEMENT. THE ANNUITY CALCULATION FOR THE ENERGY SAVINGS (IF CASH INVESTMENT)IS: "N"=AMOUNT OF THE ANNUITY AFTER "n"MONTHS IF THE MONTHLY SAVINGS, "PD"IS INVESTED AT "r"INTEREST. N =(BP *((lt#r)%n)-1)/r P =$83389.59 x 0.0067 per mont. 48.0936 months=)"wouN =$4713574. I.e.,ENERGY SAVINGS INVESTED AT 8%/ANNUM WILL RECOVER CAPITAL COST IN FOUR YEARS,IF SUFFICIENT CAPACITY IS INSTALLED TO PROVIDE ALL OF THE ELECTRICAL ENERGY CURRENTLY SUPPLIED BY THE "CITY GENERATORS". IF THE ENTIRE CAPITAL COST IS BORROWED AND REPAID FROM ENERGY COST SAVINGS,AT 11%PER ANNUM INTEREST,THE PAYMENT SCHEDULE SHOWS THE TIME: REQUIRED TO CLEAR THE LOAN IS EIGHTY-ONE MONTHS.Poort ays cee gags Tie CANTER TI a +oe aes ..Rg eeEYTROTgEOETRANFeIEPromgeFETT:.3 rs .' -<°COMPARISON.OF ENERGY COSTSOF THE PRESENT INSTALLATION AND THE PROPOSED_INSTALLATION AND MODIFICATIONS: "<1.PRESENT ENERGY CosT: ..ELECTRICITY PURCHASED IS:832258 KWH @ 0.107 $/KWH $89051.60 ELECTRICITY GENERATED [S:382829 KWH @ 0.047 $/KWH $17992.96 OIL BURNED FOR HEAT IS:51580 GAL @ 0.68 $/GAL $35074.4 'ELECTRICITY SOLD IS:O KWH @ 0.08 $/KWH $0 TOTAL AVERAGE PRESENT ENERGY COST ($/MONTH)IS:142118.9 ..PROPOSED ENERGY COST:THIS IS SELF-SUFFICIENCY AT CURRENT RATES OF_PRODUCTION ABOARD THE BARGE.THE INSTALLATION INCLUDES A NEW POWER PLANT,A NEW HEAT RECOVERY SYSTEM AND THE NECESSARY BUILDING AND SYST2£M CHANGES,WITH NEW HEAT TRANSPORT PIPE. ESTIMATED ENERGY COST: ELECTRICITY PURCHASED IS:0 KWH @ 0.107 $/KWH $0 ELECTRICITY GENERATED IS:2092049.KWH 4@ 0.04.7 $/KWH $98326.32 OIL BURNED FOR HEAT IS:.32828 GAL 4@ 0.68 $/GAL $22323.04 ELECTRICITY SOLD IS:- 774000 KWH @ 0.08 $/KWH $-61920 TOTAL AVERAGE ESTIMATED ENERGY COST ($/MONTH)IS:$8729.36 SAVINGS IN ENERGY COSTS PER MONTH ARE: $83389.60 PER MONTH;OR $1000675.PER YEAR THE ABOVE ASSUMES AN "AVERAGE"HOURLY POWER GENERATION OF 2905.62KW THIS IS 325KW HOTEL AND RESID'L,800KW GLS,1075KW TO THE CITY AND 705.72KW UNISEA BARGE AND NEW POWER PLANT. THE ESTIMATE IS CONSERVATIVE IN THAT THE VALUE FOR KW PER GAL OF OIL ASSUMED FOR THE EXISTING ENGINES IS THE SAME AS FOR THE NEW.THE FACT IS THAT THE EXISTING ENGINES ARE LESS EFFICIENT BY A SIGNIFICANT AMOUNT. rs 4 .SO RERERICE 2 Ca Bote 8 Ba oka ec dantea ee ta na ate Ps WERV HENSLEY,CITY MANAGER KSROESTURGULEWSKI,PUBLIC WORKS DIRECTOR ORMAT GEOTHERMAL PROPOSAL APRIL 16,1990 _This presents my review of the Ormat Geothermal Proposal.The _xeview is for your use in negotiations and action,rather than a critique of the project.Makushin appears to have a good deal of."statewide support,and it certainly is an exciting project.From.our discussion today,it appears some elements are in a.state of ,Flux 'and may have already been discussed and resolved.|tr;feel the following items need to be reviewed in greater"detail. Annual KWH Sales -The proposal is based on a demand level of 10 MW,which would require minimum sales of 87,000,000 KWH per year.' A study must be done to verify this amount of sales can be accomplished at a rate of 10 megawatts.My best guess,after.discussions with members of the Electric Utility,is that only,about 50,000,000 KWH were generated by all sources within the ":.City in 1989.Upon activation of processing at Westward SeafoodsandtheUniseaExpansion,a significant increase in KWHshould::occur.My feeling however,is that even when these two.projects”are on line,a baseload of 10 MW would be difficult to maintain: A detailed study of exsisting consumption,including peaks.and.-.|_lows,.as well as future consumption arising from Westward:and."Unisea,is required." City's Infrastructure Responsibilities -By the terms of.theinfrastructuresectionoftheproposal,the design,construction ;and maintenance of the access road,dock and transmission lines:would become the responsibility of the City.My understanding,{|was that although the City would finance portions of the work,Ormat would deliver power to a City bus bar on Amaknek Island.: Conversations today,confirmed however,the City will provide:"funding for the T-line only,and Ormat will provide power to:"the, "The ormat proposal does not define the configuration of 'thereductionandinjectionwells,nor their location.which could;2}:Umarkedly..affect the cost of infrastructure development.:This,,is.”tofs-léss-concern,if the access road is not a City responsibility”: oss coe yaar eg, eneBeseeel: For your information -Power's estimated detailedancluding*21.costs markup and contingency,as follows:°0300 wih -$4,814,540.00 /-3,618,930.00 meConstructi"Markup x 1.14 1.19 i Contingency 1.15 $13,157,000.00 teige ce a .rar .:It should be noted Mob,Demob,and Mancamp expenses are outside: the total.oO "Removal of the road and dock from the City's responsibilities is wise,.as the environmental risk raised in the Dames and Moore-Study is shifted to Ormat.Given the Corps local and national view,on wetlands,obtaining their approval could provecumbersome. Powers estimated costs for the T -Line at $5,504,000.00 (not including Mob Demob or Mancamp).With these costs,the estimate likely goes to somewhere above 6 million.It should be noted, that the earlier Dames and Moore Study,had direct cost estimates .for the T -Line,that.were 2 million greater than the Powers Study.(Marked up 3.2 million more.)Clarification of scope ; valong-with a closer look at costs to be borne by the City or."State'is required.' 'yf Project Cost -Initial conversations with Ormat,revealed,the _construction cost for the entire project (including a 25% contingency)was 50 million.The proposal,presented costs of $52,400,000.00;not including the road,T -Line,or dock. Power's total Project Costs in 1987 dollars for a 7.7 MW netprojectwas35.5 million.Because of discrepancies,reviewoftheprojectestimate,in greater detail,would be appropriate.Ormats'O +M cost should also be reviewed,as the presented«3.costs are substantially in excess of those presented by Powers'or Dames and Moore.aa Rates -Based on annual sales of 87 MWH,the bus bar costs are |. about three cents above our marginal cost of production.What -must be understood,is the effect of sales of less than 87/MW..:For example,if the demand charges were spread over 43.8 MW,ourdemandcostswoulddoublefrom4.9 to 9.8 cents and because,the way the sales agreement is drafted regarding energy use,total:costs would rise to about 21 cents a KWH.It is interesting ¥to»note',*Ormat modified rN ib a AES vas Vt af ”te '.og :oHAPSEaTOtcVtaSeSEEerTT appendix A by hand (exhibit A),changing capacity charges)"2,000,000 to 4,270,000 and reducing energy charges from.,8*to-5.5°cents a KWH.Increased demand risk is placed on the City,.by”-raising the capacity charge,'and.we should negotiate increased'energy charges without minimums in lieu of demand.It is ©interesting to note,that using reasonable interest rates,the demand charge would more than likely amortize Powers estimated project costs.It must be noted,Ormat is utilizing a very.|.|° To aggressive IRR of 22.15%and has developed dept coverages 0f-up :to 1.9 times.. Although not discussed in the proposal,costs beyond the bus bar:will decrease because fixed and semivariable costs will be spread |over a larger pie.Depending on a number of variables,.these.ae'costs could decrease 1 to 2 cents per KWH.a oe "Purchase Agreement -This agreement needs to be scrutinized,in- 'depth.For example,during a system outage on our side of the bus bar or any period where the base load drops below the 1 a YAS.average,the City must pay for 10 MW of power use,or not.Coupled with a guarantees them revenue on.'87,600,000 KWH per year.rh doubt we could sell it all and would"have:.to;absorb costs or pass them on to non contract consumers.|'This''agreement should be reviewed in depth by an independent'...- expert.oy To summarize -I feel this is a very exciting project,but,feel Ormats.proposal,raised a number of points that must be reviewedand:clarified prior to the City making a major financial.'commitment. lee 7 oye t oteWiedSheDenesdae Sat tal mS Nate Pa food INFORMATION SURVEY Voeska see aUNALASKASELF-GENERATORS Chief Engineer GENERATOR INFORMATION Type of equipment All Cat.4)D398,D3600,D3600 20 yrs 3yrs new Age Efficiency rating older,10 KWH/GAL.15 KWH/GAL.new Type of fuel used #2 diesel ENERGY INFORMATION Annual KWH use 42,000 KWH/DAY to 60,000KWH/DAY Peak load 5.9 MW in 3 Weeks When does the peak eccur 10 months of year.peak load varies with season Please peavide téad 4Pr despre dave PES Sted Paehii 47 OKWPresentlyinvesting$15 Million in upgrades,need saditional $5 Million to do it right,will pay out in 1 year!!!COST INFORMATION Annual cost of fuel $1,185,300 now or $1,738,000 future Average cost per gallon $.68 plus .11¢with tax,$.79 total Number of gallons used now 1.5 Million,soon 2.2 Million Gal. Annual O&M costs $150,000 Depreciation Need to Call Seattle Average cost of power _$.05/KWH +investment @ $.04 or $.09 per KWH INFORMATIO?.CURVEY "Alaska President LineUNALASKASELF-GENERATORS PAC lify GENERATOR WerRLARY on ¢a er K 20°°Cat.3412/500 KwTypeofBE34987$38 RW oBOSKaPLG BGCSEtBar.equipmen Age 15 years plus.all have been o.h.no records. Efficiency rating less than 10 KWH/Gal. Type of fuel used #2 summer,#1 winter ENERGY INFORMATION Annual KWH use Calculated at 3,400,000 KWH/YR. Peak load 530KW plant,520KW,crane (operates in parallel) operates 7-12 hrs per day.also 2,300 KW DG at peak When does t¢8é-.pg@aksible 1650KW max. occur depends on prossesors schedule Please provide a load profile/curve for your facility. COST INFORMATION Annual cost of fuel no records!5-29-90 thru 6-7-90(9 days) shows 4000 GAL.est.$323,000 per year. Average cost per gallon_$-.95 GAL. Number of gallons used @ 4000/week,est.340,000 year Annual O&M costs Budget $119,000 per year,will exceed! Depreciation old gear est.out of depretion. Average cost of powerOwner est.%.13KWH+ fac uly East Pointsri managerINFORMATIOL._URVEYUNALASKASELF-GENERATORS GENERATOR INFORMATION Type ofequipment $8 @°324 GMC...+S 89 KW.,1 @ 100 KW Age__est,20 years old.(owner is 83 and has no idea to change Efficiency rating very poor,less than 10 KWH/gal. Type of fuel used #2 diesel ENERGY INFORMATION Annual KWH use Owner est.2,320,000,AEA est.1,176,000 @ 7KWH/gal. Peak load Owner est.325 KW,AEA est.134.25 KW 80 KW @ ¢0%3 of year-350,48 KWHWhendoesthepeakJ4n--June 200 KW @ 40%of year-876,100 KWH occur Boat-125KW constant-1,095,000 KWH Please provide a load profile/curve for your facility. 40%of the year all gen-sets are full out COST INFORMATION Annual cost of fuel $142,800 Average cost per gallon $-85 Gal. Number of gallons useq 14,000 Gal.?month or 168,000/year Annual O&M costs "Ot known,eng'r.not on duty Depreciation old equipment assume out of depreciation Average cost of power *-12 KWH plus o&m. Pac NY seicicteINFORMATIOL.CURVEY UNALASKA SELF-GENERATORS fov-oo GENERATOR INFORMATION Type of equipment2 ea D399/850 KW cat's ,1 ea 3406/250 KW Cat. Age 4). ive yraiv Efficiency rating 10 kwh/gal.max. Type of fuel used #2 diesel ENERGY INFORMATION Annual KWH use Peak load a al 1ftVVUNv When does the peak occur z L Ee}Hotel 350-4 ,' Please provide a load profile/curve for your facility. COST INFORMATION Annual cost of fuel $259,232.82 Average cost per gallon $ 77-pexr-gallon Number of gallons used 2336 666 ga] Annual O&M costs eSt-1/2 md for generation,+$7840.75 oilFiltersSSlo5sUIGaveGS3-d Mas WEEKOY Le ma/month Depreciation not known assume den Out due to age Average cost of power $-115 kw/hr May 2,1990 , - To:Rob Rodgers From:Tom Sandel RE:Barge power VS.Unalaska City Power. Based on electrical load and fuel consumption curves for our engines. Usage for Dutch Harbor (not including Bristol Bay)were as follows for 1989. 7 soo -A/6A 75 days at 800 kw/avg.=120,600 gal.fuel 75%AF o ITH Hey76daysat625kw/avg.=.101,414 gal.fuel 76X2¢x62 (hat 30 days at 475 kw/avg.=...30,384 gal.fuel 4 goxaqXF75 4 4,26i114daysat350kw/avg.=84,268 gal.fuel pig X2AXBSP Ly ae295days336,666 gal.fuel Using 336,666 gal.fuel at $.77/gal.-costs $259,232.82.Lube oil usage for theabovetimeperiodscosts1985gal.at $3.98 gal.=$7,840.75.- Filter costs for the above time periods was approx.$1850.00.Costing a total of $9690.75. Fuel cost...$259,232.82 ,:Oil and filter cost$9,690.75 +34 mov /wKk IRD fra, Total $268,923.57 Power cost using Unalaska City Power. 75 days at 800 kw/avg. 76 days at 625 kw/avg. 30 days at 475 kw/avg.342,000 kw/hrs. 114 days at 350 kw/avg.957,600 kw/hrs. 295 days 3,879,600 kw/hrs. 1,440,000 kw/hrs.gee ag VE? 1,140,000 kw/hrs. 3,879,600 kw/hrs.at foots kw/hr.=$446,154.00 installation cost to get on city power $19,500.00.Total costs $465,654.00. Unalaska City Power total costs =$465,654.00 Barge power total 'cost $268,925.57 (fuel,oil,filters) Difference =$196,728.43 Add two 399 Inframes at $50,000 - a piece.=$100,000.00 Difference $96,728.43 ad es Paes.eT: es SORE EEN To PODERDRIUSBete A gecetanttsMERTENS A I feel that it is not cost effective to buy power from the city to power the Arctic Star.The inframe cost above would be added in over three years. I have added inframe cost in over one year to dramatically show the difference between in house cost VS.City Power.It may still be viable to have the capability to use City Power here for the future warehouse and also for hotel power in down months,such as September and October. NOTE:Unalaska should have proposal ready by Friday 5/4/90.Se Call me if any questions. Regards, Tom Sandel cc:Don G. Tom S. Mark D. Mike C. Jay H. Hyer 30" Ce ceeew)8?NORMAL 2 ",HEAT RECOVERY ..CAPACITY (MW):-*USAGE (MW).. .i av.1,ave....low a exist plan maybe"exist under maybe>exist under maybe *exist under Soeconstooconstconst ALYE SKA 3.9 2.00 -2.5 1.6 -.1.6.3.7 +..6 0 700(0i1)150 - __a oe 100 ; UNI/SLS 3.6 9.6 -1.1 6.9 -46 .°2:2 46 -Y we M/BAY -.-4 --3.5 --or ee a oo 2 W.S.?e -7.2 2.6 -6 1.8 -2.5--.6 =_y - ICICLE 1.2 -3.8 .9 -3.6 .3.----500 E/POLNT 65 =-25 --«2>.10 -foe Osi 65 =-£22 £33 -15 9410.0 =fee APL 1.4 --73 54 -35 1000 =-OS CITY 6.1 -=4.5 (2.2)-2.4 (1.2).t.4o |=-ss DW/L2CK -1 --.09 =-lose -a -+: $/SOSCI 2 --18 -.1 =---- |7.8 "18.8 10.4 10.72 13.17 8.9 5.75 4.2 3.5: NOT!-VALUES REFLECT UNISEA GOING OFF CITY POWER ONTO OWN GENERATORS. a UV m1 phoabinr__ MEMORANDUM State of Alaska TO:Bob LeResche DATE:May 9,1990 Executive Director ?FILE NO: THRU:Brent Petrie fy PHONE NO: Director of Agency Operations SUBJECT:Status of Unalaska Geothermal David Denig-Chakroff Review Director of Rural Programs Rowe Sturgulewski,Director of Public Works at Unalaska returned my call to Herv Hensley regarding the Unalaska (Mt.Makushin) Geothermal project.I asked him what type of assistance they were looking for that would help them analyze the proposal being presented by Ormat,Inc. According to Rowe,the Ormat proposal would require the City to purchase a continuous 10 MW from the geothermal project.He feels this may be more than the present demand and would like a review of the existing power consumption on a seasonal basis, including peak,average,and low usage figures,as well as future projections. Rowe thinks there is 40 to 50 MW installed capacity among the processors on the island,and there are two major plants coming on line this year that would add significantly to the power usage.The base load of the city alone is 2.2 to 2.8 MW.He is not sure,however,how the variations and fluctuations in the processing load would affect the economics of the geothermal project or the processors'willingness to commit to purchase of geothermal power. The City feels that the processors are not considering their full cost of power production when considering whether or not to buy power from the City.The City sells power at an industrial rateofabout11¢/kwh.I pointed out that when we spoke with processors during our analysis three years ago,we found that they did not have good records of their power plant production and costs.I also pointed out that some of the processors were utilizing waste heat from their generators,and the value of the lost waste heat would have to be taken into consideration if a processor were to purchase power from the City. Subsequent to the load forecast/power market analysis R.W.Beck completed in January 1987,the City has had an analysis conducted by Tom Newbauer and has conducted an analysis of it own.Rowe will send me copies of each of these analyses.He was veryinterestedinhavingmeapproachR.W.Beck to see if it could update the 1987 report and in having us send Jerry Larson out to talk to the processors to get a feel for the their true cost of power production and determine what the processors should be willing to pay for geothermal power.Rowe would also like our assistance in reviewing project cost estimates provided by Ormat. I called John Heberling of R.W.Beck and discussed the City's needs.We determined that basically an update of the 1987 report is needed,with less emphasis on the load forecast and more emphasis on the current demand and marketability of geothermal power based on the Ormat proposal.Heberling will prepare a proposal for a work order under our existing term contract with Beck and forward the proposal for review in the next few days. Rauits hurYoo%Mero Steve Cowper,Governor NN Alaska Power Authority State of AlaskaMay22,1987 Mr.Agafon Krukoff,President The Aleut Corporation One Aleut Plaza,Suite 300 4000 Old Seward Hwy Anchorage,AK 99503DearMr.rote As you know the contractors for the Unalaska Geothermal Feasibility Study have not been providing acceptable draft material within the deadlines set for the project.We regret that the project has been delayed,but feel it is in the best interest of the State,the Corporation,and the community to insist that the contractors submit a final report of sufficient quality that an informed decision can be made with respect to the future of the project.In the past month,we have made considerable progress with the contractors toward this end.We would like to thank The Aleut Corporation for its cooperation in our efforts to finalize the feasibility report. Enclosed is an amendment to our agreement of July 17,1986,extending the date for acceptance of a final feasibility report and committing to a course of action with respect to the project.I have been assured by the contractors that an acceptable report will be finalized before July 1,1987.We can then complete a plan of finance and commit to a course of action by September 1, 1987.If it is determined that the project will move forward,we feel that the other deadlines in the June 17,1986,agreement can be met.If you concur with this amendment,please sign and return one original to the Power Authori- ty. Thank you again for your cooperation. Si ely, Robert E.LeResche Executive Director Enclosure as stated DDC:REL:it cc:Carl Cardinalli,The Aleut Corporation Brent Petrie,Alaska Power Authority onald L.Shira,Alaska Power Authority Dave Denig-Chakroff,Alaska Power Authority 9166/709(1) PO.Box AM Juneau,Alaska 99811 (907)465-3575 'PO.Box 190869 704 £EastTudorRoad Anchorage,Alaska 99519-0869 =(907)561-7877 AMENDMENT TO CONDITIONAL LAND AND RESOURCE AGREEMENT FOR THE UNALASKA GEOTHERMAL PROJECT THIS AGREEMENT is made and entered into as of the day of ,1987,by and between THE ALEUT CORPORA- TION and the ALASKA POWER AUTHORITY and amends the Agreement made and entered into as of the 17th day of June,1986,by and between the parties hereto. NOW THEREFORE,witnesseth that: The parties hereto agree to amend the Agreement of June 17,1986 by replacing page 12 of the Agreement with the page attached hereto and made a part hereof by reference.This amendment modifies Exhibit B of the June 17,1986 Agreement by replacing the date of March 1,1987 with the date of July 1,1987,and by replacing the date of June 1,1987, with the date of September 1,1987.This amendment supersedes all pre- vious amendments. It is understood and agreed by the parties hereto that this change will affect only the deadlines for completing and accepting the final Tech- nical and Economic Feasibility Analyses and for completing the Plan of Finance and committing to a course of action and will have no effect on the other deadline dates contained in Exhibit B. IN WITNESS WHEREOF,the parties hereto have executed this instru- ment as of the date hereinabove first written. The Aleut Corporation By THIS IS TO CERTIFY that on this day of 1987,before me,the undersigned,a Notary Public in and for the State of Alaska,duly commissioned and sworn as such,personally appeared »Known to be the of the Aleut Corporation. IN WITNESS THEREOF,I have hereunto set my hand and official seal the day and year above written. Notary Public in and for Alaska My Commission Expires: T ower Authority B 4 ac (.any Executive Died” " THIS IS TO CERTIFY that on this ole day ofMan1987,before me,the undersigned,a Notary Public in and for the State of Alaska,wk commissioned and sworn as such,personally appeared »known to be theCacti,of the Alaska Power Authority. IN WITNESS THEREOF,I have hereunto set my hand and official seal the day and year above written. Notary Ablic tn and for AlaskaMyCommissionExpires:3fo/4 I 7854/0012 Land and Resource Agreement <a'Page 12: 1594/572(12) EXHIBIT A FEASIBILITY PROGRAM SCOPE OF WORK PHASE (1) (2) (3) (4) (5) ON_OR BEFORE July 1,1987 TECHNICAL AND ECONOMIC FEASIBILITY ANALYSES. PLAN OF FINANCE, ACQUISITION OF POWER SALES AGREEMENTS,. FINANCIAL FEASIBILITY ANALYSIS, ACQUISITION OF FINANCING FOR THE PROJECT. EXHIBIT B DEADLINES FOR FEASIBILITY PROGRAM AND DEVELOPMENT OF PROJECT Complete Technical and Economic Feasibility Analyses,accept final report. September 1,1987 Complete Plan of Finance,Commit to course of January 1,1988 August 1,1988 August 1,1991 \ action for proceeding with the Project or ter- minating this Agreement. Acquire power sales agreements,complete financial feasibility analysis. Complete project design,commence construction phase. Complete construction,commence operation.