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HomeMy WebLinkAboutSL&C18 SB 106Alaska State Legislature Official Business Speaker of the House of Representatives -j Slate Capital Juneau. Alaska ‘>9801-i 182 (907) 465-J720 MEMORANDUM TO: FROM: DATE: RE: M embers of the Alaska State Senate Representative Ram ona Barnes^ Speaker of the House February 15, 1993 History of the Railbelt Energy Fund A ttached are copies of two docum ents from my files which I would like to share w ith you. These two docum ents will provide you a history of the Railbelt Energy Fund. I hope this inform ation is helpful to you. If you would like additional inform ation, please give me a call and I will be happy to talk with you. SPEECH RURRL ALASKA POLDER ASSOCIATION OCTOBER 15, 1991 REP. RAMONA BARNES I •tM B B a a It is a pleasure to be inuited to speak to your organization. I know you'ue already been welcomed to finchorage, but I'd feel neglectful if I didn't add mg uoice to the chorus, and tell you I hope you'll enjoy being here and come back often. I want to congratulate the Rural Alaska Power Association on the two years of its euistence, and commend its efforts and the success with which they haue met. The role of your group is an especially important one, because a unified uoice is so uital to you. Clearly, your combined efforts can be more effectiue that all your separate striuings, and take it from one who knows, a Legislature can hear better when many uoices speak as one. I consider it an honor to be inuited to speak before you today, and I hope I may rightly fake it as ascknwledgement of the work I haue done in the legislature in recent years to support the interests of your association. I don't mean to suggest that I haue worked enclusiuely for the members of RRPR, but neither haue I worked only for Anchorage, or the Railbelt, or any other regional interest. For those of you who are not familiar with the creation of Power Cost Equalization and the Railbelt Energy Fund, I would like to prouide a little history. In 1981, Senate Bills 25 O' 26 created the energy plan for Alaska. This plan included the 4 Dam Pool, Power Cost Equalization and a clause that was known as the blackmail clause. This clause in essence said that the grjnts that were giuen to the 4 Dam Pool would be paid back to the state, plus interest, if by the year 1991 there was less than $1 billion to construct Susitna/UJatana Dam and an intertie system for the railbelt. In 1 984, the representatives of the 4 Dam Pool came back to Juneau seeking to haue the blackmail clause remoued from the statutes due to cost ouerruns that mould require additional funds. Their claim mas that unless the state gaue them another outlay of cash they mould not be abie to bond at a fauorable rate due to the enistence of the blackmail clause in statute. fit that time, Senator Frank Ferguson, in my opinion one of the best senators to euer serue in the Alaska Legislature, and I mere appointed by our respectiue bodies of the legislature to negotiate the remoual of the blackmail clause from the statutes and come up mith something more equitable for the railbelt. LDhat mas finally agreed on by the legislature and the administration, mas the remoual of the blackmail clause in enchange for $200 million per year to be appropriated in the same manner as the Senior Citizens Longeuity Bonus, as an enample. In addition to that appropriation, there mas to be $100 Million deposited into the Bradley Lake Dam account, fit that time, me also increased the per kilomatt amount to be subsidized by Pomer Cost Equalization. This then, became lam. Although this continuing appropriation mas no different from any other that is required annually, the enuironmental community took it to court and a ruling mas made that one legislature could not bind another, euen though it mas no different that numerous other annual appropriations. That first $200 Million plus the $1 00 Million for Bradley Lake Dam were the only funds euer deposited into the energy account. In 1990, a deal was cut to raid the fund and approHimately $ 123 million was spent on uarious capital projects, uery few of which had anything to do with energy. There is currently $100 million in an intertie reserue account, but there are some legislators working uery hard to spend this money on anything but interties. The southern intertie from Anchorage to the Kenai Peninsula needs uery badly to be inproued and upgraded for reliability, Euerytime there is an aualanche or an ice storm in Turnagain Arm, parts of this intertie are lost, resulting in a loss of power to many small communities between Anchorage and Soldotna. The completion of the Bradley Lake Hydroelectric project will alternate the power losses to Kenai and Homer to some eutent, but a reliable source of power between Anchorage and the Peninsula is uital. It is perceiued by many citizens of Alaska that members of the legislature from Anchorage, Fairbanks and most of Southeast Alaska only haue the interests of their areas in mind. It is supposed that the credo of urban legislators is "on my honor I will do my best, to take what I can and to heck with the rest". I suppose ouerthe years I'ue known a few members who thought that way, but I submit to you that they were not paying uery close attention. UJhat is in the interests of Tanana and Egegik and Nome is in the interests of Anchorage; and what benefits Gustauus and Fort Yukon and Barrow benefits Fairbanks; and Southeast Alaska's interests are no further spearated from rural Alaska than any others. Economic actiuity in any part of the state is to the aduantage of all parts of the state — in differing degrees, of course but we function essentially as a single economic entity. St is for that reason that I continue to support m ajor pow er projects in the state including generation facilities and interties. !t is for the uery sam e reason that I support the many interties which are on the shelues at the Power Authority. These projects are ready to go as soon as m oney can be m ade auailable. There are also a num ber of small hydro projects around the state — in rural Alaska — waiting to go. In addition, there are w aste heat recouery projects, coal generation sites and enperimental projects. Aural Alaska is not being ignored, as witness of course, the P.C.E. program, but do not forget the other efforts being m ade in your behalf to improue liuing conditions, business opportunities and health and safety. Many people suppose that the state had paid entirely for or is paying for pow er sources elsewhere in Alaska. Not True! The federal gouernment, of course, owns the Snettisham project in southeast, and the consum ers are paying to retire the bonds which financed it. Presently the state is in the process of taking ouer Snettisham to guard against pow er cost increases in the future should the federal gouernm ent reuise its cost recouery policies. Consumers will continue to pay to retire the bonds which will finance that acquisition. The state will then own that uery ualuable asset. The request is presently under consideration by the congress, and action could com e m ost any time. Bradley Lake, near Homer, the m ost recent addition to the state's pow er pool, is a good enample of the sam e sort of situation. There were legislatiue grants for parts of that project, however, half of it w as financed by bond issues, which consumers, through local utilities, will pay to retire, iilhen the bonds are retired, the state will own the project. On the subject of Bradley Lake, I would like to entend my sincere congratulations to Charlie Bussell and his entire organization. R great deal of credit is due the agency for Bradley's successful completions substantially under budget, but euen more on the quality of the project. I w as at the project site for the groundbreaking cerem ony fine years ago, and again last month for the dedication. It's a picturebook project, in a spectacular setting which remains magnificent to see. The agency's and the contractor's meticulous attention to caring for the environment established records and actually enhanced the environment in certain cases. The overall project w as such a success that it won the Civil Engineering Achievement of the Vear award from the Northwest Section of the American Society of Civil Engineers. It has been nom inated by them for the sam e distinction nationally. Once again, Alaskans can be proud. I cannot speak for the Energy Authority as to what the future might hold. Although, one cannot fail to be impressed with the am ount of money, the share of effort and the num ber of undertakings dedicated to rural Alaska. At a glance it would almost seem an agency designed solely for rural Alaska. It is not, of course, but the villages are certainly very much a part of its mission and concern. There are very few people in Alaskan villages that have not m et one of A.E.A.'s circuit riders, or one of the technicians or engineers or em ergency response people representing the Energy Authority. For a relatively small agency, the A.E.A. reaches and affects more indiuidual Alaskans than almost any oth er— and its mission, without euception, is to improue their lot. The legislature has generally been uery supportiue of this uital agency. In my efforts on its behalf ouer the years I haue had a lot of com pany on both sides of the aisle. I see no reason to e«pec\ that to change; in fact I anticipate im prouem ent of that support, particularly after the neat election. Organizations such as yours, becom ing more acutely aware of the role they can play in gouernm ental policies and decisions, will work with local legislators and other indiuiduals of influence, with other associations hauing shared interests, and with businesses and industries hauing com m on goals. Together you will bring your influence to bear, and draw attention to the eueryday needs and uncom m on urgencies which can only be attended by your gouernment. I com m end your actiuity and urge your participation. Vou m ay be assured that my office doors are always open — both here and in Juneau — and I often don't know w hen a person com es through one of those doors w hether he liues in m y district of not. He is a constituent, in either case. He is a constituent of the Rlaskan Gouernment, and 1 am one of its seruants. I hope the rem ainder of your meeting is a success, and that you'll all enjoy your stay in Anchorage. OJfinClAU BUSINESS A lask a jSiaie ^ g isk r iu r Fc ^Hause af JlepreaeniathiES WCPWCSCNTATTVC R A M O N A L . B A R N E S DISTRICT 1 4 */iCHO*»ACK 2230 ruxoN A«CMO<»ACt Al^MKJk 9030-4. <9071 337-7737 <9071 301-2036 ■ox v JUNCAU. M JtfXA 9061 1 <907) 463-3*30 POSITION PAPER RAILBELT ENERGY APRIL 10, 1991 The fo llo w in g summary compares th e e x is tin g pow er demand f o r th e v a rio u s a re a s o f th e r a i lb e l t to th e e x is tin g g e n e ra tin g c a p a c ity and tr a n s fe r c a p a b ility . The e x is tin g in t e r t ie s between Anchorage and F a irb a n k s c o n s is t o f a 138KV lin e betw een A nchorage and W a s illa , a 345KV lin e between W a s illa and H e a ly , and a 138KV lin e betw een H e a ly and F a irb a n k s . I t is im p o rta n t to u n d e rsta n d th a t th e am ount o f e l e c t r i c i t y th a t is p u t in to th e lin e is n o t th e same am ount t h a t comes o u t on th e o th e r end. F a irb a n k s has been p u rc h a s in g a p p ro x im a te ly 70MW from Chugach E le c t r ic in Anchorage w h ich p ro v id e s them w ith a bo u t 62MW by th e tim e th e power g e ts to F a irb a n k s . T h e re fo re , a t peak tim e s F a irb a n k s m ust f i r e up i t s o i l g e n e ra tio n . The in c re a s e d c o s t to th e consum er in F a irb a n k s is a p p ro x im a te ly 1 c e n t p e r k ilo w a tt h o u r. Assum ing an average r e s id e n tia l consum er uses 100,000 k ilo w a tts p e r m onth, th is e q u a te s to a b o u t $ 1 0 .0 0 p e r m onth in c re a s e in c o s t fo r th e F a irb a n k s r e s id e n tia l consum er. The peak demand f o r th e F a irb a n ks a re a is 112 - 12 0 MW. F a irb a n ks has tw o u t i l i t y com panies - G olden V a lle y E le c t r ic and F a irb a n k s M u n ic ip a l U t i l i t y . G olden V a lle y E le c tr ic has a c o a l f ir e d g e n e ra tio n p la n t a t H ealy ca p a b le o f g e n e ra tin g 25MW o f pow er p lu s o i l f ir e d g e n e ra tio n o f a p p ro x im a te ly 150 MW. F a irb a n ks M u n ic ip a l U t i l i t y has a 20MW c o a l f ir e d p la n t in F a irb a n ks p lu s o i l f ir e d g e n e ra tio n . T h is is a t o t a l o f 45MW o f c o a l fir e d g e n e ra tio n a v a ila b le to 1 F a irb a n k s in a d d itio n to th e o i l f ir e d c a p a b ility . As o i l is m ore e xp e n sive th a n gas from Cook I n le t , F a irb a n k s buys as much pow er as i t can g e t o v e r th e i n t e r t i e and su pp le m e nts any a d d itio n a l re q u ire m e n ts w ith o i l f i r e d g e n e ra tio n . To sum m arize, F a irb a n k s can p ro du ce w ith c o a l f ir e d g e n e ra tio n a l l b u t 80MW o f th e F a irb a n k s needs d u rin g peak demand. The C ity o f F a irb a n k s has more th a n enough o i l and g e n e ra tin g c a p a c ity to m eet c u rre n t demand. The p ro b le m is th a t th e c a s t o f g e n e ra tin g e le c t r i c it y w ith o i l is s ig n if ic a n t ly more e xp e n sive th a n g e n e ra tin g e le c t r i c it y w ith gas o r c o a l. T h is th e n b rin g s us to th e H e a ly C oal p r o je c t. In 1989, th e L e g is la tu re se g re g a te d $30 m illio n w ith in th e R a ilb e lt E nergy Fund as a c o n tin g e n t a p p ro p ria tio n f o r th e c o n s tru c tio n o f a c o a l c o -g e n e ra tio n p la n t a t H e a ly . T h is a p p ro p ria tio n la p se d back in to th e R a ilb e lt E nergy Fund w ith o u t r e s t r ic t io n s on June 30, 1990. The L e g is la tu re a p p ro p ria te d $25 m illio n to th e A la ska In d u s tr ia l D evelopm ent and E x p o rt A u th o r ity to h e lp fu n d th e H e a ly C o -G e n e ra tio n p r o je c t in 1990. What does th e te rm c o -g e n e ra tio n mean? The F e d e ra l d e f in it io n o f c o -g e n e ra tio n is ''th e u t il iz a t i o n o f a t le a s t 5% o f g e n e ra te d e n e rg y o u tp u t f o r h e a t lo a d ra th e r th a n fo r e le c t r ic u t i l i t y use in th e e le c t r ic a l g r id o r a re a ” . U s ib e lli had p la n n e d and has re q u e s te d AIEDA, th e proposed p r o je c t ow ner, to in c lu d e p ro v is io n s in th e p r o je c t d e s ig n f o r u t i l i z i n g h e a t fro m th e new p la in t fo r c o a l p ro c e s s in g ( b e n e fic ia tio n ) . The a v a i la b il it y o f h e a t fro m th e p la n t w i l l depend upon th e tim in g o f th e c o a l b e n e fic ia tio n p la n t, demand fo r e le c t r i c it y , and th e econom ics o f h e a t s a le s to U s ib e lli. B e n e fic ia tio n is th e p ro ce ss o f t r e a tin g c o a l in c lu d in g c ru s h in g c o a l, tu r n in g c o a l in to liq u id , d ry in g o f c o a l, and o th e r te c h n iq u e s w h ich enhance th e energy v a lu e o f e x tra c te d c o a l. Coal d ry in g is one o f th e s im p le s t fo rm s o f b e n e fic ia tio n . U s ib e lli now e x p o rts c o a l to K orea . W ith c u rre n t p ro c e s s in g , a p p ro x im a te ly 1 /4 o f th e tonnage is w a te r. T h is le d to th e i n i t i a l id e a o f d e v e lo p in g a c o a l d ry in g f a c i l i t y . H ow ever, upon fu r th e r in v e s tig a tio n , i t became a p p a re n t th a t th e q u a n tity o f h e a t n e ce ssa ry to ru n such an o p e ra tio n in co m parison to th e m o ne ta ry b e n e fits to be g a in e d w o uld n o t be e c o n o m ic a lly fe a s ib le in to d a y 's m a rke t. A t p re s e n t, th e D epartm ent o f E ne rg y w i l l o n ly s u p p o rt th e e le c t r ic a l g e n e ra tio n p a r t o f th e H e a ly p r o je c t. DOE is lo o k in g f o r new co m b u stio n te c h n o lo g y and has awarded a g ra n t in th e am ount o f $93 m illio n d o lla r s f o r th e c o n s tru c tio n o f th e new c o a l f ir e d pow er g e n e ra tio n p la n t a t H e a ly . T h is new p la n t w i l l be ca p a b le o f u s in g "w aste c o a l" whereas th e e x is tin g p la n t a t H e a ly can use o n ly p u re c o a l. The s u rfa c e 2 of the coal seam must be continually scraped to remove the final amount of overburden (dirt) and expose a clean coal surface. The result of thi3 continual scraping is "waste coal" or coal that is mixed with dirt. In the past, Usibelli has had no market for this "waste coal" and it has been shoved aside and/or buried. The new plant will provide a means to utilize more of the coal resource and minimize loss. U s ib e lli is c o n tin u in g to lo o k a t new te c h n o lo g ie s w ith th e u ltim a te g o a l o f e x p o rtin g m ore c o a l and c o a l p ro d u c ts . One d is t in c t p o s s ib ilit y lie s in "c a rb o n m a rb le s " (o r p e lle ts ) w h ich can be used in p la c e o f coke fro m c o k in g c o a l f o r s te e l m aking. T h is is a s p e c ia liz e d p ro d u c t w h ich has h ig h p o te n tia l f o r m a rke t e x p a n s io n . The demand f o r c o k in g c o a l in th e P a c ific Pirn is s e v e ra l m illio n to n s p e r y e a r. I t is unknown a t t h is tim e how much o f th a t n a rk e t c o u ld be c a p tu re d by A la ska n c o a l p ro d u c ts . A t p re s e n t, th e P a c ific Rim n a tio n s a re im p o rtin g c o k in g c o a l fro m as f a r away as th e e a s te rn U .S . v ia th e Panama C a n a l. P a c ific Rim coke p ric e s a re re p o rte d in excess o f $100 p e r to n com pared to a p p ro x im a te ly $40 p e r to n f o r raw steam c o a l fro m A u s tr a lia , th e c h ie f c o m p e tito r in P a c ific Rim steam c o a l m a rk e ts . W ith A la s k a 's u n iq u e lo c a tio n , we s h o u ld to be a b le to ta p a s ig n if ic a n t p o r tio n o f th e m a rk e t. U s ib e lli a n tic ip a te s a d e te rm in a tio n o f th e p o te n tia l A la s k a m a rke t sh a re w ith in one y e a r and a n tic ip a - es com ing on lin e w ith a c o -b e n e fic ia tio n p r o je c t a t a b o u t th e same tim e th e new g e n e ra tio n p la n t comes on lin e . When c o n s id e rin g th e c o s t/b e n e fit o f th e new g e n e ra tio n p la n t, one m ust ta k e in to c o n s id e ra tio n s e v e ra l fa c to r s . A new p la n t w i l l enhance c o n s e rv a tio n o f th e c o a l re s o u rc e (th e new p la n t w i l l be a b le to b u m "w aste c o a l" ) . New jo b s w i l l be c re a te d . More p u re c o a l w i l l be u t il iz e d th u s p ro d u c in g more r o y a lty revenue f o r th e s ta te w h ich h e lp s d iv e r s if y o u r economy. And an econom ic s u p p ly o f pow er w i l l be a v a ila b le to th e re s id e n ts o f F a irb a n k s . T h is w ould a ls o enhance r e l i a b i l i t y o f th e e n tir e g r id system fro m F a irb a n k s to th e K e n a i P e n in s u la . I t is f e l t th a t th e re w i l l be an in c re a s e d need f o r base lo a d c a p a c ity in t h is a re a around th e tu r n o f th e c e n tu ry . W ith th e F e d e ra l g ra n t d o lla r s , t h is p la n t w i l l be p ro d u c in g th e lo w e s t c o s t pow er a v a ila b le around th e y e a r 2000. The c o s t o f e le c t r i c it y fro m th e new c o a l p la n t is e xp e cte d to be 4 .5 c e n ts p e r KW h o u r as com pared to a new d ie s e l p la n t a t 6 c e n ts p e r KW h o u r, o r a new gas f ir e d p la n t a t 4 c e n ts p e r KW h o u r. T here a re o th e r fa c to r s a ls o t h a t s h o u ld be c o n s id e re d when e v a lu a tin g t h is p r o je c t. We have f o r a lo n g tim e h e ld th e p o s itio n t h a t we m ust d iv e r s if y o u r economy and le s s e n o u r dependence on o i l . A la s k a has an a bu n da nt s u p p ly o f n a tu ra l re s o u rc e s , how ever m ost o f th o s e re s o u rc e s re m a in undeveloped o r n o t d e ve lo p e d to t h e ir maximum econom ic p o te n tia l. C oal is such a re s o u rc e . Enhanced p ro c e s s in g ( b e n e fic ia tio n ) w i l l a id in th e maximum developm ent o f t h is re s o u rc e w h ich in tu r n w i l l p ro d u ce in c re a s e d revenues to th e s ta te . When c o n s id e rin g th e p o te n tia l o f in c re a s e d r o y a ltie s to th e s ta te c o ffe r s , one m u st u n d e rs ta n d how r o y a ltie s a re c a lc u la te d . New le a se s and le a s e s w here r o y a lty a d ju s tm e n ts have ta k e n p la c e a re based upon a p e rc e n ta g e o f th e " a d ju s te d g ro s s v a lu e " (AGV) , w hich is e s s e n tia lly e q u iv a le n t to a "m ine m outh" v a lu e f o r c o a l. T h a t i s , b a s ic p ro d u c tio n c o s ts a re in c lu d e d b u t tr a n s p o rta tio n and p ro c e s s in g a re n o t. T h e re fo r a, th e r o y a lty b a s is o r AGV w ould in c re a s e o n ly i f a b e n e fic ia tio n p la n t c o u ld pay a h ig h e r p r ic e f o r raw c o a l fe e d to th e pla.r :. Some e x is tin g le a se s a re s t i l l based on a fix e d r o y a lty p e r to n . The p rim a ry in c re a s e in paym ents to s ta te c o ffe r s w ould come fro m th e in c re a s e d q u a n tity o f c o a l p ro d u ce d . B oth th e pow er p la n t and a b e n e fic ia tio n p la n t w o u ld r e s u lt in in c re a s e d paym ents to th e s ta te because o f in c re a s e d p ro d u c tio n . The n e x t p r o je c t th a t m ust be to u ch e d on is th e F u ll U pgrade o f th e Anchorage - F a irb a n k s I n t e r t ie . The e s tim a te d c o s t o f t h is p r o je c t is $118 m illio n d o lla r s . AEA has c o n c lu d e d th a t th e b e n e fit v a lu e o f a f u l l upgrade is n o t s u f f ic ie n t to j u s t i f y spending $118 m illio n d o lla r s . The f u l l u pgrade o f th e lin e w ould in c re a s e th e maximum pow er tr a n s fe r fro m th e e x is tin g 62MW o u tp u t to 225MW o u tp u t, s u b s ta n tia lly more th a n is a n tic ip a te d b e in g needed in th e fo re s e e a b le fu tu r e and w o u ld n o t be c o s t e ffe c tiv e . The $10 m illio n d o lla r p a r t ia l u pg ra de on th e n o rth e rn i n t e r ­ t i e in c lu d e s u p g ra d in g th e e n tir e lin e fro m A nchorage to F a irb a n k s . E quipm ent w o u ld be in s t a lle d on th e lin e th a t w o uld b rin g th e lin e up to w ith in a c c e p ta b le s ta n d a rd s o f s t a b i l i t y . S t a b ilit y , how ever, is n o t th e o n ly c o n s id e ra tio n . R e li a b i li t y o f th e lin e is e q u a lly im p o rta n t. I t is im p o rta n t to rem em ber th a t when you upgrade a lin e and in c re a s e th e tr a n s fe r le v e l you a ls o in c re a s e th e le v e l o f lo s s e s . T h is u pg ra de w i l l o n ly in c re a s e th e tr a n s fe r c a p a b ilit y fro m th e p re s e n t 62MW o u tp u t to 84MW o u tp u t. Eence, th e need to go beyond th e p a r t ia l upgrade fo r th e n o rth e rn p a r t o f th e g r id a re a . M ost o f th e pow er th a t is lo s t in tra n s m is s io n a lo n g th e Anchorage - F a irb a n k s ro u te is lo s t betw een H e a ly and F a irb a n k s . C o nse q ue ntly th e recom m endation o f a second 138KV lin e betw een H ealy and F a irb a n k s is w a rra n te d . The p ro p o s a l in c lu d e s s p lit t in g th e pow er a t H e a ly w ith 1 /2 th e pow er g o in g up th e e x is tin g lin e and th e o th e r 1 /2 g o in g up th e new l in e . T h is w i l l reduce pow er lo s s e s d u rin g tra n s m is s io n . There is a ls o an a ssu m p tio n among th e e le c t r ic a l e n g in e e rs th a t 4 by putting in the second line, the transfer capability of the entire circuit would be increased by an additional 20MW as well as reducing power transmission losses. The r a i l b e l t u t i l i t y com panies h ir e d A EA 's c o n s u lta n t to lo o k a t w h e th e r i t w o uld be w o rth sp e n d in g th e re q u ire d $ 5 8 .7 m illio n f o r th e p o te n tia l in c re a s e in b e n e fits th a t w o uld be d e riv e d . The o p in io n s e t f o r t h in 1990 b y th e c o n s u lta n t is th a t th e re w ould be a $60 m illio n d o lla r a d d itio n a l b e n e fit. T here a re perhaps some w eaknesses and s o ft p o in ts th a t c o u ld be p o in te d ov t in lo o k in g a t th e c o s t b e n e fit a n a ly s is b u t AEA has n o t ta*.en a p o s itio n on th e a n a ly s is a t t h is tim e . Chugach E le c t r ic is now s e llin g pow er to F a irb a n k s and th e p r o f it s g e n e ra te d fro m th e s e s a le s a re to th e d ir e c t b e n e fit o f th e A nchorage consum er. I f H e a ly comes on lin e , one m ig h t assume th a t th e re w ould be an in c re a s e in ra te s to th e A nchorage consum er. A c c o rd in g to Chugach E le c tr ic , any in c re a s e w o u ld be -M inim al and w o u ld o n ly o c c u r i f A nchorage w ere to rem ain s ta g n a n t w ith no g ro w th , an u n lik e ly s c e n a rio . The fo llo w in g num bers re p re s e n t th e peak demand needs and th e g e n e ra tin g c a p a c ity in th e r a i l b e l t a re a . LOCATION PEAK GENERATING LOCATION OF AND TYPE DEMAND CAPACITY OF GENERATION ********************************************************** F a irb a n k s 120 MW 25 MW C oal 20 MW C oal 45 MW C oal Anchorage 550 MW 360 MW Gas - 330 MW Gas - 30 MW Gas - 60 MW Gas - 780 MW K enai 80 MW 15 MW Hydro 40 MW Gas - 80 MW Gas - 135 MW + 100 MW Hydro 235 MW B eluga ML&P E k lu tn a In te r n a tio n a l H ydro - B ra d le y Lake TOTAL:750 MW o f Power needed in th e R a ilb e lt A rea TOTAL GAS/HYDRO GENERATION AVAILABLE - 1060 MW Upon f i r s t g la n c e , one m ig h t assume th a t we have a l l th e pow er we need. T h is s ix p ly is n o t th e case when yo u c o n s id e r r e l i a b i l i t y , tra n s m is s io n e ffic ie n c y , and b a la n c e o f th e c o s ts o f th e d if f e r e n t M ethods o f p ro d u c in g e le c t r i c it y . A d d it io n a lly , one m ust r e a liz e t h a t pow er g e n e ra tin g p la n ts c a n n o t o p e ra te c o n tin u a lly a t maximum c a p a c ity . Gas f ir e d p la n ts a re re q u ire d to keep a s u b s ta n tia l s p in n in g re s e rv e . B e sid e s m a lfu n c tio n s w hich r e q u ire g e n e ra to rs to be s h u t down, th e y a re a ls o s h u t down f o r r o u tin e m a in te n a n ce . T h is th e n re q u ire s a d d itio n a l backup to m eet demand. Now le t s exam ine a p o te n tia l outa g e s c e n a rio . Assume B eluga <360MW> goes down, A nchorage can draw 60 MW fro m F a irb a n k s o v e r th e e x is tin g lin e fro m th e n o rth , and 60 MW fro m K e n a i o v e r th e e x is tin g lin e fro m th e s o u th . T h is com bined w ith o th e r A nchorage g e n e ra tio n c o u ld p ro v id e 530 MW assum ing th a t a l l o th e r g e n e ra tio n is up and w o rk in g . Anchorage w o uld s t i l l be down 20MW i f t h is o c c u rre d d u rin g peak demand. T h is a n a ly s is is based on e x is tin g demand (tu rn e d down econom y). The s c e n a rio w i l l w orsen as A nchorage re b u ild s i t s economy. O ut o f M u n ic ip a l L ig h t & Pc • r 's 330 MW g e n e ra tin g c a p a c ity , 3 o ld tu rb in e s w h ich g e n e ra te 50 o f power a re due to be r e t ir e d som etim e w ith in th e n e a r fu tu r e . ML&P's re p o r t s ta te s th a t th e re m a in d e r o f t h e ir u n its a re newer and th e y d o n 't a n tic ip a te any m a jo r p ro blem s o r upg ra de s u n t i l th e y e a r 2015 . I t is n o t e c o n o m ic a lly fe a s ib le to d e sig n a system th a t w i l l a lw a ys m eet th e peak demand. r The n e x t q u e s tio n exam ined was th e need f o r th e new s o u th e rn i n t e r t i e . The e x is tin g lin e is p o o r f o r b u lk tra n s m is s io n . The lin e is sch e d u le d f o r r e b u ild in g and upgrade o v e r th e n e x t 10 - 15 y e a rs . T e c h n ic a l s tu d ie s say th a t w ith th e a d d itio n o f c e rta in e q u ip m e n t, th e e x is tin g K enai tra n s m is s io n lin e can d e liv e r 75 MW and s t i l l rem ain w ith in th e s t a b i l i t y lim it s . S t a b ilit y , how ever, is n o t th e o n ly c o n s id e ra tio n . A lth o u g h th e u p g ra d in g and r e b u ild in g o f th e lin e w i l l b r in g i t up to a h ig h e r c a p a c ity , i t w i l l n o t address th e r e l i a b i l i t y p ro b le m s . R e lia b ilit y is v e ry much a problem w ith th e e x is tin g i n t e r t i e between A nchorage and th e K enai P e n in s u la because i t is p r im a r ily above g ro u n d and is ro u te d a lo n g T u m a g a in Arm . R e lia b ilit y p ro b le m s in c lu d e th e l in e 's v u ln e r a b ilit y to a va la n ch e s, h ig h w in d s , heavy s n o w fa ll and o th e r n a tu r a l o c c u rre n c e s . The fo llo w in g ta b le shows outages th a t have o c c u rre d s in c e 1984. 3 o c c u rre n c e s 0 o c c u rre n c e s 1 o c c u rre n c e 2 o c c u rre n c e s 1988 1989 1990 1991 - - 8 o c c u rre n c e s - 4 o c c u rre n c e s - 4 o c c u rre n c e s 1 o c c u rre n c e YTD These o u ta g e s w ere a l l th e r e s u lt o f n a tu r a l o c c u rre n c e s . The new p ro p o se d i n t e r t i e w o u ld e lim in a te many o f th e p ro blem s e n c o u n te re d w ith th e e x is tin g lin e because o f b e tte r r o u tin g . The p ro p o se d new i n t e r t i e w i l l be o:! wood p o le c o n s tru c tio n and w i l l be b u i l t a lo n g one o f tw o ro u r.e s . The p re fe r re d ro u te is th ro u g h th e K e n a i N a tio n a l W ild lif e R efuge ( f a i r l y le v e l te r r a in ) to T u m a g a in Arm w here i t w o u ld go u n d e r T u m a g a in A c t in a su bm a rin e c ro s s in g re tu r n in g to th e s u rfa c e a p p ro x im a te ly 9 m ile s s o u th o f P o tte r M arsh. L im ite d segm ents betw een T u rn a g a in Arm and A nchorage w ould go u n d e rg ro u n d . The a lte r n a te ro u te is a lo n g th e c o a s t fro m K enai to N o rth K e n a i, th e n u n d e r T u rn a g a in Arm in a subm arine c ro s s in g a t P o in t P osse ssion r e tu r n in g to th e s u rfa c e n e a r P o in t W o ro n z o ff. The a lte r n a tiv e c o a s ta l ro u te w i l l be m ore e xp e n sive b u t may need to be u t iliz e d i f r ig h t- o f- w a y p ro b le m s ca n n o t be re s o lv e d w ith th e U .S . F is h and W ild lif e S e rv ic e . E ith e r ro u te w i l l p ro v id e a more c o n g e n ia l e n v iro n m e n t. P re s e n tly , m ost o f th e pow er on th e K e n a i P e n in s u la comes from B elu g a . When B rad?ey la k e H ydro comes on lin e , t h is s c e n a rio w i l l change. B ra d le y Lake is d e sig n e d to g e n e ra te 90 MW o f pow er, how ever when th e r e s e r v o ir is f u l l , g e n e ra tin g c a p a c ity in c re a s e s to a p p ro x im a te ly 119 MW. I f we w ere to tr a n s fe r t h is 119 MW o v e r th e e x is tin g lin e , we w o u ld have a p p ro x im a te ly 110 MW when th e pow er a r r iv e d in S o ld o tn a . I f th e r e s e r v o ir w ere lo w , we w o u ld have a p p ro x im a te ly 100 MW o f pow er a r r iv e in S o ld o tn a . U sin g th e a n tic ip a te d 100 MW o f pow er fro m B ra d le y Lake H ydro co u p le d w ith 15 MW o f h y d ro power a v a ila b le fro m Cooper Lake, K en a i w i l l have a t o t a l o f 125 MW o f h y d ro g e n e ra te d pow er a v a ila b le on th e K e n a i P e n in s u la . T h is is in a d d itio n to th e g e n e ra tin g c a p a c ity o f e x is tin g gas tu r b in e s . A t p re s e n t, K enai g e ts 60 MW fro m B e lu g a . Any power needed o v e r th e 60 MW fro m B eluga and th e 15 MW fro m Cooper Lake comes fro m gas g e n e ra te d pow er p la in ts a t B e rn ic e la k e o r S o ld o tn a . A fte r B ra d le y Lake comes on lin e , K e n a i w i l l have an excess o f 35 MW o f h y d ro pow er to d e liv e r n o rth i f i t is needed o r w anted. The e x is tin g lin e can d e liv e r t h is w ith no p ro b le m as f a r as c a p a c ity is co n c e rn e d . The p ro b le m a r is e s in th e s t a b i l i t y and r e l i a b i l i t y o f th e e x is tin g lin e . The a d d itio n o f a second 138 KV lin e w o u ld d e f in it e ly im prove r e l i a b i l i t y . The o th e r c o n s id e ra tio n in e v a lu a tin g th e n e c e s s ity o f t h is lin e is t h a t B ra d le y la k e cam not o p e ra te a t maiximum c a p a c ity f u l l tim e . I t cam o n ly o p e ra te a t maximum c a p a c ity when th e r e s e r v o ir is f u l l . Two lin e s ro u te d th ro u g h d if f e r e n t e n v iro n s w o u ld v i r t u a l l y e lim in a te tra n s m is s io n lin e pow er o u ta g es in s o u th c e n tra l A la s k a . One m ust a ls o c o n s id e r i f th e c a p a b ility o f s h ip p in g power n o rth is r e a lly n e ce ssa ry c o n s id e rin g t h a t A nchorage pow er s u p p lie rs axa re q u ire d to have s p in n in g re s e rv e s o f 45 MW. T h is means th a t A nchorage e le c t r ic so u rce s a re n o t g e n e ra tin g th e t o t a l power th e y a re c a p a b le o f g e n e ra tin g and c o u ld in c re a s e th a t g e n e ra tio n by th e " f l i c k o f a s w itc h " , so to sp ea k. However, re m a in in g s p in n in g re s e rv e s a v a ila b le in A nchorage a re n o t s u f f ic ie n t to make up th e d e f i c i t in a v a ila b le pow er were A nchorage to lo o s e B u lu g a . The n e x t to p ic d is c u s s e d was th e a lte r n a te A nchorage - F a irb a n k s ro u te th ro u g h P alm er - G le n n a lle n - D e lta to c o n n e c t w ith G olden V a ila y 's lin e to F a irb a n k s w h ich w o u ld th e n p ro v id e a t i e - i n w ith th e V a ld e z lin e to th e Solom an G ulch h y d ro p la n t. The c o s t o f th is ro u te w o uld be somewhere in th e n e ig h b o rh o o d $200 m illio n d o lla r s . T here has been soue c o n ce rn th a t Solom on G ulch is s p illin g w a te r (e q u a tin g to a p p ro x im a te ly 12 m illio n KW h o u rs d u rin g th e summer m o n th s.) Solomon G ulch o p e ra te s a t le s s th a n c a p a c ity d u rin g th e w in te r m onths because o f th e lo w w a te r le v e l in th e r e s e v o ir. I t is th e o p in io n o f th e AEA, how ever, t h a t th e b e n e fits to be d e riv e d fro m in s t a lla t io n o f t h is lin e w o uld n o t be w o rth th e c o s t. One m ust a ls o c o n s id e r th a t th e lin e s betw een A nchorage and P alm er a re n o t t h a t good. T here a re lin e s a lo n g tw o ro u te s . One lin e goes a lo n g th e w e st s id e o f K n ik Arm fro m B elug a to W a s illa to P alm er - 1 3 8 line. The o th e r lin e gees fro m A nchorage to E k lu tn a to P alm er - 115 KV lin e . The n o rth e a s t i n t e r t i e ro u te w ould n o t p ro v id e A nchorage w ith a f u l l 2nd ro u te . I t w ould p ro v id e no more f o r A nchorage th a n th e lim ite d upgrade proposed and w ould c o s t s ig n if ic a n t ly m ore. A n o th e r c o n s id e ra tio n w o uld be to c o n s tru c t an i n t e r t i e from G le n n a lle n to D e lta . T h is w o u ld p ro v id e th e m is s in g l in k fro m Solomon G ulch to th e G olden V a lle y E le c t r ic system a t D e lta ru n n in g n o rth to F a irb a n k s . D u rin g th e summer m onths, Copper V a lle y E le c t r ic w o u ld be a b le to s u p p ly a d d itio n a l p o w e r"to F a irb a n k s d u rin g th e summer m onths s h o u ld i t be needed and w o uld be a b le to p u rch a se pow er fro m G olden V a lle y E le c t r ic o r Chugach E le c tr ic d u rin g w in te r m o nth s. T h is w ould add to th e t o t a l e le c t r ic a l g r id system f o r s o u th c e n tra l A la s k a . The c u rre n t c o s t o f c o n s tru c tio n o f t h is lin e is e s tim a te d a t $ 9 2 .5 m illio n . AEA has n o t is s u e d 3m o p in io n o i th e econom ic f e a s i b i l i t y o f t h is a b b re v ia te d p r o je c t. The q u e s tio n a ro s e as to w h e th e r we c o u ld s e ll pow er t o th e F e d e ra l g overnm ent f o r th e Back S c a tte r R adar S ite . Because o f th e c r i t i c a l n a tu re o f th e ra d a r s it e , r e l i a b i l i t y and s t a b i l i t y a re v e ry im p o rta n t. AEA has been a d v is e d th a t th e re is no p o s s ib ilit y o f s e llin g pow er to th e F e d e ra l G overnm ent f o r t h is p r o je c t. O ver o n e -h a lf o f A la s k a 's t o t a l p o p u la tio n liv e s a lo n g th e r a i l b e l t a re a o f th e s ta te . I t i s im p o rta n t t h a t th e re be r e lia b le so u rc e s o f pow er a v a ila b le to t h is p o p u la tio n . M ost th e s ta te 's b u s in e s s e s a re a ls o lo c a te d in t h is a re a . I f th e r e vrere to be a m a jo r d e v a s ta tio n o f pow er so u rc e s in th e r a i l b e l t a re a to d a y , th e m a in stre a m o f A la s k a 's c it iz e n r y w o u ld be a ffe c te d . The m a jo r ity o f A la s k a 's b u s in e s s e s w o u ld be a ffe c te d . I f we a re to have s t a b i l i t y in o u r econom y, we m ust e n su re t h a t th e re is s t a b i l i t y _and r e l i a b i l i t y in o u r pow er s u p p lie s . B u sin e sse s ca n n o t o p e r a te 'in th e d a rk o r in th e c o ld . A d d itio n a lly , i f we in te n d to expand o u r econom ic b ase , we m ust be a b le to p ro v id e pow er to d e v e lo p in g b u s in e s s e s . I t is o n ly re a so n a b le to b e lie v e t h a t new b u s in e s s e s w i l l m ost l i k e l y be c o n s id e re d in a re as o f p o p u la tio n d e n s ity . I f one w ere to a sk th e q u e s tio n a b o u t w here th e re is p o p u la tio n d e n s ity , th e answ er w ould m ost a s s u re d ly be a lo n g th e r a i l b e l t . A n o th e r p r o je c t th a t is b a d ly needed is th e Seward I n t e r t ie . The e x is tin g lin e to Seward has been down many tim e s o v e r th e p a s t few y e a rs . T h is lin e , l ik e th e e x is tin g s o u th e rn i n t e r t i e is e x tre m e ly v u ln e ra b le to a v a la n c h e s . When t h is lin e was b u i l t , i t was ro u te d a lo n g th e roadw ay because o f a c c e s s ib ilit y w ith th e equipm ent th a t was a v a ila b le a t th e tim e . The new Seward in t e r t ie w i l l be ro u te d o v e r more d e s ira b le t e r r a in in a re a s o f s u b s ta n tia lly le s s v u ln e r a b ilit y . There a re many e ne rg y p r o je c ts in th e s ta te w h ich can be j u s t i f ie d . A la s k a spends m illio n s o f d o lla r s a n n u a lly on v a rio u s p ro je c ts .- K now ing t h is , i t is h a rd to fa th o m th a t many o f o u r re s id e n ts do n o t have th e b e n e fit o f e l e c t r i c i t y o th e r th a n th ro u g h home g e n e ra te d p ow e r. I t is a ls o h a rd to fa th o m t h a t th e m ost h ig h ly p o p u la te d re g io n s o f th e s ta te a re v u ln e ra b le to com plete pow er o u ta g es w ith o u t th e p o te n tia l o f b r in g in g pow er in fro m an a lte r n a tiv e so u rc e in s u f f ic ie n t q u a n tity to m eet a t le a s t minimum demand. T h is p o te n tia l p ro b le m can be s o lv e d by c o n s tru c tio n o f th e new in t e r t ie s . The b e n e fits to be d e riv e d fro m th e c o n s tr u c tio n o f th e n o rth e rn a id s o u th e rn in t e r t ie s and th e new c o a l f i r e d g e n e ra tin g p la n t a t H ealy in c lu d e th e fo llo w in g : 1 . R e li a b i li t y - I n t e r t ie s a f f e c t system r e l i a b i l i t y w h ich can be m easured b y th e num ber, d u r a tio n , and m a g n itu d e o f cu sto m e r o u ta g e s . 2 . Economy E nergy T ra n s fe rs - S a vin g s a re r e a liz e d when lo w e r c o s t e n e rg y i s b ro u g h t in fro m o th e r a re a s to d is p la c e h ig h e r c o s t e n e rg y g e n e ra te d l o c a lly . 3 . T ra n s m is s io n E ffic ie n c y - T ra n s m is s io n lo s s e s a re red uce d th u s p ro v id in g a c o s t s a v in g s . 9 4. State Revenue — State revenues will increase as new interties will lead to the use of sore coal and. gas, even with Bradley coating- on line. Gas and coal will displace oil fired generation. 5. Capacity Sharing - Interties allow separate areas to share capacity thus deferring increasing plant capacities in each geographic location. 6. Operating Reserve Sharing - Interties allow separate areas to share operating reserves and therefore reduce operating costs. The benefits that reduce to dollars and cents present the following picture: P ro je c t C o st B e n e fit R a tio Healy-Fairbanks 138KV Intertie 1.64 Kenai-Anchorage 138KV Intertie 4.4 Anchorage-Fairbanks Limited Upgrade 4.45 L a s t b u t c e r t a in ly n o t le a s t is th e r e a liz a tio n th a t i f th e s e in t e r t ie s a re fu n d e d t h is y e a r, we a re lo o k in g a t a minimum o f f iv e y e a rs to c o m p le tio n . I t is im p e ra tiv e th a t we lo o k a t lo n g range p la n n in g and n o t j u s t a t th e p re s e n t. A la s k a 's economy has been in a s lo w down mode f o r th e la s t few y e a rs , b u t t h is w i l l n o t la s t fo r e v e r . The p io n e e rin g s p i r i t th a t b u i l t A la ska liv e s on and A la s k a w i l l p ro s p e r in th e fu tu r e b u t we m ust be w ise w ith o u r re s o u rc e s , be th e y money, m in e ra ls , f is h , o r tim b e r and we m ust p la n f o r th e fu tu r e . We th e members o f th e L e g is la tu re a re th e s te w a rd s o f o u r s ta te . L e t us use th a t s te w a rd s h ip to keep A la ska as th e G re a t Land. SENATE COMMITTEE REPORT FIRST COMMITTEE OF REFEFtnAL FURTHER: FINANCEDATE: 2/10/93 Date of 5-Dav Notice: / n f* > DATE TURNED (in accordance with Uniforrn R u Iq/23) INTO OFFICE: — L&C Committee considered SB 106 "An Act authorizing power transmission interties between Anchorage and the Kenai Peninsula, between Healy and Fairbanks, and between the Swan Lake and Tyee Lake hydroelectric projects, and approving the design and construction costs of the interties; and providing for an effective date." and recommends: , , [ 1 same title[ ] replace with __________C S _________________________(______) j j new title [ j technical [ ] attaches amendment(s) title change v (HB only) [ ] adopts _____________________________Letter of Intent ( ] further referral to the _____________________________ [ ] do pass [ ] do not pass L [ ] no recommendation [ ] individual recommendations FISCAL NOTE INFORMATION Department Dam Zero Fiscal Dspaifment Fiscal ppropriation No Fiscal Note [ J Governor'o Bill with Previous Fiscal Note* (enter information above) OTHER RECOMMENDATIONS Chair: Signature^and Recommendation Alaska S?tate fficgislatitrc FAIRBANKS DENALI BANK BUILDING 119 N. CUSHMAN, SUITE 201 FAIRBANKS, ALASKA 99 All (907) <15?-7RB5/ 788G SENATOR BER T SH AR P DISTRICT P CHAIRMAN TRANSPORTATION COMMITTEE SESSION ADDRESS STATE CAPITOL, ROOM51*1 JUNEAU, ALASKA 99301 1102 (00/) 46^-3004/4021 MEMBER FINANCE COMMITTEE LEGISLATIVE BUDGET fi AUDIT COMMITTEE HEALTH & SOCIAL SERVICES dcnntc Senator Tim Kelly, Chairman Senate Labor & Commerce Committee Senator Bert Sharp /5 & A ± Request for Hearing - SB-106 February 12, 1993 I am requesting Senate Bill 106; "An Act authorizing power transmission interties L tween Anchorage and the Kenai Penisula, between Healy and Fairbanks, and between the Swan Lake and Tyee Lake hydroelectric projects, and approving the design and construction costs of the interties; and providing for an effective date," be heard before the Senate Labor and Commerce Committee. Thank you for your consideration. DATE: FROM: REPRESENTING GOLDEN HEART OF ALASKA SECTION ANALYSIS SB - 106 SECTION 1. AS 44.83.185(c) contingent upon sec.4 of this Act, authorizes the Alaska Energy Authority to design and construct a 138 kilovolt power transmission intertie with the capability of being upgraded to 230 kilovolts, between Anchorage and the Kenai Peninsula at a cost of $84,100,000. SECTION 2. AS 44.83.185(c) contingent upon sec. 4 of this Act, authorizes the Alaska Energy Authority to design and construct a 138 kilovolt power transmission intertie with the capability of being upgraded to 230 kilovolts, between Healy and Fairbanks, at a cost of $77,600.00. SECTION 3. (a) AS 44.83.185.(c), authorizes the Alaska Energy Authority to design and construct a 138 kilovolt power transmission intertie between Swan Lake and Tyee Lake hydroelectric projects, at a cost of $55,600,000. SECTION 3. (b) The Alaska Energy Authoriy shall finance the design and construction of the intertie authorized in (a) of this section through the sale of revenues bonds which are to be repaid from revenue from the sale of power from the hydroelectric projects included in the Four Dam Pool. SECTION 4. The authorizations made by secs. 1 and 2 of the Act are contingent upon written agreement between the Alaska Energy Authority and the participating electric utilities, providing the participating utilities agree to pay 50 percent of the design and construction costs; and the total operation and maintenance costs of the power tranmission interites authorized by this Act. SECTION 5. Under AS 01.10.070(c), this Act takes effect immediately. ■mb —— — — — —i■■ SPONSOR STATEMENT SB - 106 Senator Bert Sharo In the early 1980's, the State committed major sums of general funds to construct four hydro electric projects, two in southeastern Alaska, one in Kodiak, and one in Valdez. The legislature set aside 200 million plus dollars in a special railbelt energy fund to utilize on energy projects that would provide similiar long term benefits to southcentral and interior Alaska. This legislation would carry out this original legislative intent by constructing a power grid connecting the major population centers of Alaska with an electric intetie system. This inter connected system would present long term benefits to over 70 percent of Alaskans. The major benefits offered by such an intertie system are: (a) Reliability of service. (b) Economy of size. (c) A mix of generating sources including hydro-electric, natural gas, coal and petroleum fueled generating costs. (e) Unified load dispatching. Specifically Section 1. Authorizes the construction of a 138 kilovolt power transmission line between Soldotna and Anchorage. This line increases the capability to deliver major blocks of energy from the Bradley Lake Hydro Project into the greater Anchorage area. Section 2. Authorizes the construction of a 138 kilovolt line from Healy to Fairbanks. This line will allow the maximum utilization of the transmission capacity of the Alaska Energy Authority line coming up out of Anchorage to Healy. This new line would provide the system to economically deliver Golden Valley Electric Association's share of Bradley Lake power into the interior as well I as allowing GVEA to purchaase seasonally surpluses of energy from Anchorage based utilities. Section 3. Authorizes an intertie between Swan Lake and Tyee Lake hydro sites. The economics and benefits offered by this facility can be better presented by Senator Robin Taylor. I thank you for the opportunity to present this legislation to this com m ittie. RE: SB -106, authorizes interties between: Anchorage - Kenai Peninsula, Healy - Fairbanks, and Swan Lake and Tyee Lake hydroelectric projects. C ost p rojection s; $217. 3 m illion (S-106 authorizes AEA to design and construct. Also authorizes AEA to enter into agreements with participating electric utilities for them to pay 50% of D&C costs and O & M costs once the lines are up. Tim e lin e: Permitting process 1993/4-1996 Construction: 1996-1998 P a s s a g e o f th e in tertie le g is la tio n w ill a llo w u s to m o v e e x c e s s e n e r g y from o n e a r e a o f A la s k a to o th e r a r e a s th a t n e e d it. In th e e v e n t o f a p o w e r o u tr a g e , th e in te r tie s w ill e n a b le q u ick m o v e m e n t o f p o w e r from o n e a r e a to a n o th e r a s a n e m e r g e n c y b a c k u p - r e sto r in g p o w e r q u ic k ly ra th er th a n w a itin g h o u r s or d a y s , a s w e 'v e e x p e r ie n c e d , a s r e c e n tly a s la s t y e a r a n d in D e c e m b e r ,1 9 8 9 . T h e s e in te r tie p r o je c ts w ill h e lp s u p p ly p o w e r to th e p o p u la tio n c e n t e r s . T h ey'll p r o v id e e m e r g e n c y b a c k u p p o w e r in o u ta g e s . T h e y w ill h e lp s u s ta in e c o n o m ic g r o w th m a k in g p o w e r a v a ila b le for n e w h o u s in g a n d b u s in e s s d e v e lo p m e n t a n d th e y w ill p u t A la s k a n s to w o rk . A c c o r d in g to th e m o s t r e c e n t e s t im a t e s b y th e A la s k a E n e r g y A u th ority, th e A n c h o r a g e to K e n a i in tertie w ill p r o b a b ly p u t a t le a s t 1 5 0 A la s k a n s to w o rk , w h ile th e H e a ly to F a ir b a n k s p r o je c t w ill n e e d 4 0 0 w o r k e r s. T h e in te r tie s m a k e g o o d e c o n o m ic s e n s e for A la sk a . SENT BY:PETERSBURQ PWP & LIGHT: 2-16-93 12:15PM CITY OF PETERSBURG P.O. Box 320 t Petersburg, Alaska 00833 « Phons (B07) 772.-4203 Municipal power and Light Dept. FACSIMILE TRANSMISSION 907-772-9287 Phone(Fax) PETERSBURG MUNICIPAL PQWE&AJ.1GHT ______ P.O. Box 32© Petersburg, Alaska 99333 Message co n sists o f pages, in c lu d in g th is coyer sheet < SENT BY:PETERSBURQ PWR & LIGHT; 2-16-93 12:16PM :9077729287-^ aro|ect Managemen t CommitteeSummary Project K\VH Purchas J8 Year KWH Rate Total -1992 Contract 226,907,000 0.040 $9,Q7B,280EXCS886,316,188 0.030 189,546 $9,265,826 1991 Contract 219,067,000 0.040 $8,762,680Excess | 22,238,626 0.030 667,159 $8,429,639 1990 Contract 212,993,000 0.040 $8,519,720Excess24,902,4.6 0.030 747,072 $9,266,792 1989 Contract 206,041,000 0.035 $7,211,435Excess26,248,361 0.025 656,209 $7,867,644 1988 Contract 199,181,000 0.032 $6,373,792Excess 17,367,941 0.022 332,095 $6,755,887 II u C7i0] O0> P R O JE C T M A N A G EM EN T C O M M IT T E E - FO U R DAM P O O L R EN EW A L AN D R E P LA C E M E N T FU N D P R O JE C T TO DATE STATEM EN T O F O PER A TIO N S AN D C H A N G E S IN FU N D BA LA N C E 1986 1987 1988 R E V E N U E AN D T R A N S FER S Interest incom e Settlem ent from Alaska Energy Authority Transfers from Initial Project Revenue Fun d 6,261 333,333 43,601 500,000 92,097 500.000 TO TAL R E V E N U E S A N D T R A S F E R S 339.594 543,601 592.097 Ea.'D (0a>iIDtHIN EXPEN D IT U R ES Solom on G ulch Swan Lake Terror Lake Lake Tyee Trust service fees TO TAL EXPEN D IT U R ES E X C E S S O F R EV E N U E AN D T R A N S FE R S O V ER EXPEN D ITU R ES FU N D B A LA N C E BEGINNING FUN D B A L A N C E ENDING 5.275 5.275 1989 1990 162,093 196,245 200,869 1991 662,093 696,245 700,869 9.117 9.117 97,126 6,569 8,358 112,053 194,743 97,005 6,755 0 298,583 339.594 543,601 586,822 652,976 584,192 402,286 0 339,594 883,195 1,470,017 2,122,993 2,707,185 339.594 883,195 1,470,017 2,122,993 2,707,185 3,109,471 246,154 3,000,000 500,000 3,746,154 1992 119,680 161,975 424,197 10,905 716,957 3,029,197 3,109,471 6,138,668 _i oc3CL (D gHHICL >CQ Vjfl ' ■IllPj'IIIlllllll ^ 1 '■— III ' 1 S^S^Sj^SSsjC LStSSJ^^- : PROJECT MANAGEMENT COMMITTEE - FOUR DAM POOLCWH PURCHASED AND DEBT SERVICE PAYMENTS TO ALASKA ENERGY AUTHORITY 1966 1986 1987 1987 1988 1968UTIUTYKWHDEBT SERVICE KWH DEBT SERVICE KWH DEBT SERVICE COPPER VALLEY ELECTRIC 21,594,057 544,714 40,584,034 1,101,027 38,582,126 1,203,674 3ETCHBCAN PUBUC UTILITY 34,107,0)0 860,355 44,360,000 1,203,458 41,493,400 1,294,506 CODIAK ELECTRIC ASSOC.54,739,800 1,380,822 91,909,793 2,493,346 102,671,415 3,203,261 TIT OF WRANGELL 9,852,000 240L518 17,457,COO 473,658 18,341.000 572,151 TTY OF PETERSBURG 10,083,120 254,330 15,380,466 417,324 15,461,000 482,295 'OTALS 130,375,977 3,288,739 209,691,293 5,668^813 216^648^41 6,755,867 SENT 3Y: PETERSBURG PUR & LIGHT: 2-16-93 1 2 :17PM ; 9077729287-* 4 F E B — 1& — S3TUE11S52 P 1969 1999 1990 1990KWH DEBT SERVICE KWH DEBT SERVICE 36,686,771 1,242,563 39,388,355 1.534,199 50,419,590 1,707,686 48,369.074 1,884,003 107.567,000 3.643,360 111,528^87 4,344,750 19.594.000 663,639 19,311,000 752,174 18.022.000 61Q,396 19,298.000 751,667 232289,361 7,867,644 237,895.416 9,266.793 1S91 1991KWH DEBT SERVICE 39,147,589 1,531,107 69,290,320 2,709,924 91,391,717 3,574,261 20.585.000 805,166 20.091.000 817,134 1992 1992KWH DEBT SERVICE 40,159,659 1.596,115 57,122,420 2,267,008 99,364,109 3,948,177 17.425.000 692,918 19.154.000 761,608 241,305,626 9,437,592 233^25,188 9,265,805 HuffmonSubstation Link 6 A L A S K A PO W ER AUTH O RITY North S tu d y A re a H ealy S u b a re a & Roads ________ Existing TransmissionLines Railroad © Setlo In Mllta 7tiin»CA(,i • : Fairbanks^/AIABanmS ‘Ja5L'llf«£ See Inset Fairbanks Inset OATA SOURCES USGS 1:63.000 Tooogfaohic Maos Utilities LEGENDMajor Highways & Roads intertie EnstarGasline Existing Transmission Lines Railroad FAIRBANKS SCALE IN MILE3NORTH 'CANTWEI A L A S K A PO W ER AU TH O RITY North Study Area Fairbanks Subarea ctr.r ron o 'X talkeetna