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HomeMy WebLinkAboutFeasibility Study of Coal Fired Cogeneration, District Heating and Other Energy Alternatives for Kotzebue Findings and Recommendations 1981FEASIBILITY STUDY OF COAL-FIRED COGENERATION, DISTRICT HEATING AND OTHER ENERGY ALTERNATIVES FOR KOTZEBUE FINDINGS AND RECOMMENDATIONS This document summarizes the study project, and the consultants I approach and findings, and recommends the next appropriate step to provide the lowest possible cost of electricity for Kotzebue. BACKGROUND Kotzebue, an economic, administrative and cultural center for Northwest Alaska, has been almost totally dependent upon fuel oil for space heating and power generation. With an annual mean temperature of 20.7°F, electric and space heating costs are high for its 2,850 residents. Dependence upon fuel oil (delivered by barge and lightering vessels during the only three ice-free months of the year) requires the community to pay increasing prices for fuel oil and electricity. These costs have a significant impact upon the cost of 1 iving in Kotzebue and have lead to numerous studies to examine alternative power and heating supply options. One previous study assessed power generation alternatives with special attention to hydropower and coal resources; another inves- tigated geothermal district heating. The studies were informative but did not determine the best alternative to meet the electricity and space heati ng needs of Kotzebue. The Alaska Power Authority contracted with a joint venture of three firms (VECO, Stefano & Associates, and Arctic Slope Technical Services, Inc.) to assess coal, geothermal and other viable systems in detail and compare combinations of these alternatives with respect to costs, impacts, public reaction, and overall feasibility. In addition to present- ing the above findings, the final report produced by the consultant recommended what the consultant considered to be most viable alternatives and outlined subsequent work requirements. The Report addressed: * * * current and projected population, current and projected electric load and demand (for all end use sectors except industry whi ch had no immedi ate potential at the time of the study), community reactions and goals, 1072/194/0 2/Fl -1 - * community energy balance, * energy resources and appropriate conversion technologies. The consultant i dentifi ed appropri ate energy resources and gen- eration facilities from the above information and prepared alterna- tive supply plans. The plans were than taken through the following steps: * * * * technical, economic, social, cultural, and environmental analysis, final assessment, agency and public review, preparation of a final report which incorporated review comments and the consultant's responses to comments. Numerous energy resources were considered and compared to the base case (continuation of current diesel generation and fuel oil space heating systems). Options considered unrealistic (e.g. peat, active/passive solar, coal gasification, refuse, wood, etc.,) were eliminated from detailed consideration. Appropriate supply plans included: 1. Base Case --diesel electric generation with individual oil stoves and waste heat recovery for space heating. 2. Cogeneration --coal-fired steam electric generation with hot water district heating (Alternative A). 3. Coat or oil-fired district heating with electrical generation from other sources (Alternative B). 4. Hydroelectric generation with and without electric space heating (Alternative C). 5. Geothermal district heating with electrical power gen- eration from other sources (Alternative D). 6. Wind turbine electric generation to supplement diesel electric generation with fuel oil space heating (Alterna- tive E). FINDINGS Of the 18 alternatives considered, two alternatives to the Base Case emerge as the most advantageous to Kotzebue over the 1982-2002 planning period. Both alternatives were shown to have a cost/benefit ratio of 1.47 (the base case is 1.00). 1072/194/0 2/Fl - 2 - c: The two alternatives consist of the following components: 1. Cogeneration (Alternative A). The central plant would be coal-fired and use a waste heat recovery system for district heating. While the technology is well known, several potential problems are exist: * * * * If the coal from Northwest Alaska is to be used, the coa 1 mi ne woul d have to be developed. Coal from outside sources would have to be shipped ... Water requi red as a heat carri er in the di stri ct heating system is subject to freeze-up despite insulation measures. Air quality could degenerate; impacts could include genera 1 health and parti cul arly respi ratory prob- lems, "black snow", and acid water conditions. Acid rain is gaining a great deal of regional global attention because of the potential for negative impacts on ecosystems. Potential for acid rain varies depending upon the source of coal to be used. Necessary storage and handling methods could allow coal seepage into the surface water and aquifers. 2. Hydropower (Alternative C) The dam and powerhouse woul d be sited at Buckl and (the most feasible ~ite) with approximately 90 miles of transmission line to -Kotzebue. The preliminary analysis considered a geothermal heating district in combination with hydroelectric generation; this alternative provided a 1.10 cost/benefit ratio. Hydroelectric generation used for both power and electrical space heating showed a 1.47 cost/benefit ratio and thus became the alternative considered in more detail. An alternative transmission line plan (which saved 13 percent of the line cost) was considered in a preliminary study by Retherford & Associates but was not considered in this report. In this plan, single-phase, low frequency lines and generation equipment were assured instead of three-phase lines and equ i pment. Hydropower is extremely reliable, has two to three times the operational life of a fossil fuel plant, has few Operational/Maintenance (0/~1) costs, no fuel costs, and is a clean source of energy; however, several potential problems exist: 1072/194/0 2/F1 - 3 - ( I. \ .. <. I.: ..... . ~> * * * * * TECHNICAL A maximum site output of 30 MW; the output may have to be supplemented with electricity from another generation source during winter peak periods (late in the planning period after the demand increases). Environmental impacts are not well-defined without further study. Geotechnical conditions are unknown at this time. Further investigations are required to see if a dam can even be built. The impacts of a large shallow reservoir on overall system operations at this northern latitude are unknown. A single, long transmission line is not highly reliable. Both alternatives appear technically feasible. The coal-fired plant uses a well-known technology and, in many ways, is a well-suited to the Kotzebue situation. The plant would be local and easily accessible for any needed repair, and additional back-up system would not be necessary. The waste heat recovery system is beneficial but the dependence on the proposed water medium as a heat carrier could be a serious liability. Also, coal supply and delivery could be undependable if a coal source outside the region is used. Hydropower is known to be extremely reliable and uses a well-known technology. Arctic conditions pose additional complications, but northern applications have been tested and proven. The vast inundation arei may be unacceptable to residents of the region and the landowners. The 90 miles of overland transmission line is a potential weak link because of unknown wind and ice stresses, and the consul tant recommends keeping a 100 percent back-up diesel system. In addition, diesel generation is expected to be needed in later years to supplement winter peak loads. While these factors are potential liabilities, the reliability of the resource and the technology could offset negative consid- erations. More careful analysis of geotechnical conditions and stream flow are necessary before the feasibility of the hydroelec- tric alternative could be confirmed. ENVIRONMENTAL Both alternatives present numerous environmental concerns. The impacts of coal extraction from potential resource sites in the regi on (which requi res stri ppi ng of overburden, overburden stockpiling, degradation of water quality due to erosion, and 1072/194/0 2/Fl - 4 - revegetation) are concerns associated with any surface mlnlng operation. In addition, it would be necessary to transport the coal for storage at Kotzebue. Fugitive dust from coal handling and preparation for burning could have significant and, possibly uncontrollable, air quality impacts. Another concern is that of coal combustion emissions. Products of coal combustion are airborne sulfur, nitrogen oxides, carbon monoxide, particulates, radioactive trace minerals, and fluorides, all of which can cause health problems. Such health problems can be in the form of specific (e.g., lung dieases) or general health impacts (e.g., more colds, flu, etc.). The amount and type of coal bu rned and the effectiveness of emi ss i on control measures wou 1 d determine the p1ant l s effect on air quality. Contamination of drinki ng water sources (i. e., snow and surface runoff) is another possible environmental impact. Other concerns are disposal of ask (with extremely high mineral content) and hazardous wastes (PCBls, solvents, strong acids and bases), dis- posal of plant cooling water, and the aesthetic impacts of a large facility, tall stacks, and coal piles. Hydropower projects have a different set of environmental concerns. While construction may cause dust and surficial disruption, long-term air quality, water pollution and waste disposal impacts are negligible or non-existent. The reconunended diesel back-up and peak load generation facil ity would be used only on a sporadic basis and would cause much less impact than the current diesel generator plant. ~1ajor potential impacts are predictable and in most cases can be mitigated. Cha'nges in aquatic and terrestrial habitat are the most curcial. In the case of the proposed Buckland River project, the degree of damage to anadromous fish runs, grazing land for moose, caribou and reindeer, and to the Village of Buckland are likely to lead to unacceptable impacts. ECONOMIC For the Buckland Hydroelectric Project, detailed investigations concerning environmental impacts, geotechnical and arctic ice conditions would extend the project development schedule and are likely to pose new problems to be resolved. Considering these concerns, the present cost estimate may be low (one reviewing agency thought the cost estimate to be low). Unpredicted costs associated with the coal-fired plant could include unusual geotechnical foundations (on permafrost), coal and shipping cost variations, mine development costs, and increasingly stringent environmental impact mitigation measures. The unusual 1072/194/0 2/Fl - 5 - /' , \." geographic conditions in an area such as Kotzebue (e.g., permafrost and extreme cold), use of surface water as a drinking water source, and possible disadvantageous surface wind patterns could also make the facility more costly to build and operate than expected. RECOMMENDATIONS The major emphasis for the coal-fired plant option would be: 1. Review C.C. Hawley report to DGGS on Chicago Creek coal. 2. Determine cost to mine Chicago Creek coal and deliver to Kotzebue (by land, by sea, over ice). 3. Update feasibility net present value analysis using Chicago Creek coal. Incorporate any increased costs resul ting from the "doubl ing of all transportation and handling facilities" referred to in the consultant's Task 12 report. Re-evaluate transmission to Villages within the NANA region. 4. Evaluate mine mouth generation and transmission to Kotzebue and any other villages which could be included. 5. Present these fi nd i ngs to the res i dents of Kotzebue and the region, the legislators representing the region and to NANA. Obtain publ ic input to determine whether to continuing pursuing the coal-fired cogeneration alterna- tive, to pursue the Buckland River hydroelectric alterna- tive, or to do more detailed analysis of both alterna- tives. If coal plan is favored, do detailed feasibility study of that alternative and take to Board of Directors and dffice Management & Budget when completed. If hydroelectric alternative is the subject of further study, perform an interim analysis consisting of stream gaging and environmental analysis prior to committing to detailed feasibility study. 1072/194/0 2/Fl - 6 - (. -:'.'. " - [SI -/\1o,,1;.::: DI:PD r.l{U OU-71-7-S00 FINAL REPORT--KOTZEBUE PROJECT Sumoacy of Project Tasks and Findings PREPARED FOR THE STATE OF ALASKA DIVISION OF EUERGY AND PO\'lER DEVELOPHENT FEBRUARY 1981 ENERGY SYSTEMS, INC. BOX 6065 N~CHORAGE, ALASKA 99502 907-243-1942 ( CONTENTS Page SUfiUilary of 1"lork on Project Tasks •.•.•.•.•.•...•.•.••••••• 1 Findings and Reco@mendations .•.••••••.••••.•...•.........• 5 Appendices (Under Separate Cover) Appendix A: Geological Data, Kotzebue-Selawik Basin Appendix B: Kotzebue Geothermal Project--Analysis of Currently Available Information and Re- port of Advisory Group Meeting Appendix C: Geologic Analysis of Geothermal Energy at Kotzebue Appendix D: Proposal to Assess the Feasibility of District Heat at Kotzebue, submitted to US Department of Housing and Urban Development ( FIN/\L REPORT--KOTZEnUE PROJECf Introduction This report summarizes work done by Energy Systems Inc. on the Kotzebue GeotherQal Project for the State of Alaska Department of Commerce and EconoQic Development, Division of Energy and Power Development. The work reported covers the period July 1, 1980 to Feb 1, 1981. The work was done in fulfillment of two contracts, BRU Kotzebue GeotherQal, 08-71-7-500 and ATN 81-525, CC 08-1582. The first section of this report lists the tasks contracted for item by item and sumnarizes the work done. Reference is made to four items that were cOwpleted as part of the contract tasks: geological and geophysical data for the Kotzebue Selawik Basin, "Kotzebue Geothermal Project:Currently Available Information and Report of the Advisory Group Meeting-, "Geologic Analysis of Geothermal Energy at Kotzebue ft , and a proposal to the Department of Housing and Urban Development on behalf of the City of Kotzebue to study the district heat prospects at Kotzebue. These four items are bound separately and are referred to as appendices A,B,C and D respectively. Reference should be made to them for a more detailed description of the results of the tasks performed, and described below. The second section gives a summary of findings and recommendations. Summary Qf Work Qll Project Tasks Task 1 An energy needs analysis for the City of Kotzebue including electrical power and fuel demands to the year 2000. This task will take existing projections from a recent needs analysis by the Alaska Powe~ Authority and put it in a form for presenta- tion at the geothermal meeting in Task 3. Potential local use geothermal applications will be projected under the assumption that if the geothermal resources were developed geothermal energy availability would stimulate commercial development to some degree. Three independent estimates of energy use at Kotzebue were located, analyzed, and compared. No significant commercial uses of geotherQal energy were identified, either in the literature or in discussion. The most beneficial application was determined to be space heat. The possibility of space heat was further examined by conceptually designing a district heat system, with a geothermal heat source, and estimating the cost of heat obtained from it. The estimated cost of the geothermal heat was too high, but the district heat portion of the system looked moderately promising. A summary of this work can be found on pp. 34 to 42 of Appendix B. 1 ( Task 2 Research currently available geological and geophysical information for the Kotzebue-Selawik Basin. This infor- mation shall be put in a form for oral, visual and written presentations on the geological possibility of developing geothermal resources. Hr. Arlen Ehrn, consulting geologist, was hired to carry out this task. The raw infor@ation is included in Appendix A, and a summary of it with some analysis is given on pp. 24-28 of Appendix B. A bibiliography is on pp. 45-46 of Appendix B. A more detailed, and up-to-date, analysis of this data is given in Appendix C. Appendix A was supplied to the Department of COQIDerce and Economic Development, Division of Energy and Power Develop@ent, in only one copy because of its volu@inous nature. Task 3 Organize and host an interdisciplinary meeting of geothermal experts to develop a work plan for the development of the Kotzebue project and the expenditure of the State appropriation. This meeting will be held at or around the Geothermal Resource Council Annual Heeting in mid-September 1980 unless otherwise agreed upon. A list of geothermal experts and people involved in the Kotzebue geothermal project was compiled by Energy Systems Inc. with the help of the Division of Energy and Power Development. The people contacted included representatives of the City of Kotzebue, the NANA Corporation, the University of Alaska Geophysical Institute, the State Division of Geological and Geophysical Surveys, the Alaska State Legislature, the Alaska Power Authority, Universities with relevant geothermal programs, National Laboratories with Geothermal Programs, and the US Geological Survey. These people were contacted by phone and it was determined that a meeting on September 12, 1980, immediately following the meeting of the Geothermal Res,ources Council would be feasible. In many cases people on the list could not attend, and it was necessary to find alternates. In the end a suitable advisory group was assembled, with Dr. William Ogle of Energy Systems Inc. as chairman. It also proved advantageous to hold a preliminary meeting in Anchorage to allow more local experts to attend. Arrangements were made for the meeting in Salt Lake City. Information that had been uncovered in Tasks 1 and 2 and at the meeting in Anchorage was mailed to the advisory group for their review prior to the meeting. It was also organized into viewgraphs suitable for presentation to the group. The members of the advisory group generously donated their time at no cost to the State of Alaska. Their advice and aid was quite helpful. The final composition of the advisory group is on p.lO of Appendix B. Notes of this f.1eeting are on pp.11-33 of Appendix B. The basic conclusion from the f.1eeting was that the geothermal prospects did not look as promising as first thought, but also that the possiblility of direct use or use through heat pumps could not be ruled out. The district heat portion of the project looked moderately promising. Specific recommendations were to get additional (proprietary) geological data from NNJA and Chevron, and to apply to 2 ( the Depurtment of Housing und Urban Development for funds to look at district heat in grcater dctail. Task 4 A written final report detailing the task findings, the preliminary ideas broached at the meeting in Task 3 and possible cost and impacts of the different elements of the work plan will be required. The state geothermal development plan Kotzebue section is the preliminary plan to be critiqued at this meeting. Appendix B is the ~lritten report. Pages 4-8 summarize the ideas presented at the Qeeting. Page 9 gives some conclusions and recomQendations for future work. On pp. 28 and 29 is a critique, by Hr. John Reeder, of the Kotzebue section of the State's geothermal impleillentation plan. Pages 11-44 contain a lot of information relevant to developing a plan for further geothermal work at Kotzebue, including drilling costs and estimates of the cost of a district heat system. After the advisory group meeting, and acting on conclusions and recommendations coming from that meeting, the Division of Energy and Power Development extended its contract with Energy Systems Inc. to perform tasks 5 to 10, outlined below. Task 5 Request from Northwest Alaska Native Association information pertinent to determining depths at Kotzebue equivalent to depths observed in the Nimiuk Point and Cape Espenberg wells, and to the salinity, specific gravity, and dissolved solids in the water from these wells. Arlen Ehm wrote a letter to the NANA corporation requesting the required inforIilation and detailing the need for that information. NAl'IA forwarded the request to the Chevron Resources Company, which generously allowed Hr. Ehm to view the requested material in San Francisco. The fornation water cheIilistry information is shown in Fig.l7 of Appendix C and the equivalent depths to basement at Kotzebue is Fig.19 of Appendix C. This infornation is crucial to determining the feasibility of geothermal energy at Kotzebue. Task 6 Obtain further information on Hhat data and information could be obtained by electrical geophysical Iilethods at Kotzebue. Design same and cost out. The results of Task 5 were such that Task 6 was no longer relevant. The seismic depth to basement obtained in Task 6 is far more reliable than what could be obtained by any electrical method, and the 2000 ft. depth to basement obviates the need for the informa-tion on salinity. Thus it was decided to determine the cost of drilling a 2000 ft. well at Kotzebue. Battelle Pacific Northwest Laboratories was drilling similar wells at Bethel. tle asked their contractor and Battelle theIilselves to 3 \.: csti~~te the cost of a 2000 ft well at Kotzebue. noth estim~t~d that the cost would be about $350,000, including mobilization and . dCr.lObil iZi.ltion. Jlov/ever, the contractor cont~cted would only do the job on a tiQe and materials basis, and he has never drilled that deep with the rig he anticipated using on the job. He did not think the anticipated depth \-Iould be a problem, hov/ever, as long as a slim-hole is used. Task 7 Integrate information obtained in tasks 5 and 6 with previously obtained gravity surveys, well logs, surface geology maps, and other pertinent information to formulate the best estimate presently obtainable of subsurface temperature, permeability, pressure, and porosity at Kotzebue. The information requested in the above task is given in the report that is Task 8. The geological information gives a fairly complete picture of the subsurface geology at Kotzebue relevant to determining the feasiblity of using geothermal energy there. Of course, no amount of inforQation could ever be sufficient for answering every conceivable question. The depth to impermeable basement at Kotzebue is about 2000 ft. The probability of finding sufficiently permeable rocks below 2000 ft. is very low. The temperature at 2000 ft. depth is predicted to be low (105F to 135F). Above the basement, the rocks would have permeable zones that would produce adequate volumes of water. Of course, this water \-Iould be at a temperature below 135F. The do\omhole pressures would not be sufficient to bring the water to the surface. In general, the only feasible way to determine pumping requirements is to drill a well and test it. The water would have a lot of dissolved solids. Drilling costs would be low in comparison to the costs usually quoted for petroleum wells in the area because there is little point in drilling below 2000 ft, and the formations are easy to drill, both because of the sedimentary rocks and because no extraordinary downhole pressures are ant~cipated. A truck mounted rig could be used. Task 8 Write a report on the geology of the Kotzebue Selawik basin as it applies to the utilization of geothermal energy, including figures that summarize the surface geology (rocks and faults), regional geology, temperature profiles from the Cape Espenberg and Nimiuk Point wells, lithologic sections, electric logs, etc. Hr. Arlen Ehm compiled the requested information in the report. titled "Geologic Analysis of Geothermal Energy at Kotzebue", which is Appendix C to this document. Task 9 Answer H.V.D. solicitation for district heating for the village of Kotzebue. The work plan for this solicitation will be an economic scoping study considering wind, coal, 'vIood, geotherQal, and waste heat separately and in conjuction with each other for the Qost 4 economical district heating system for the village. ~n outline of the proposal was constructed by Energy Systelns Inc. John Beebee of Energy Systems and Don Markle of the Division of Energy and Power Development traveled to Kotzebue and discussed the draft of the proposal with as many people who would partici-pate in it as possible. In particular, Gene Hoore, the City Manager of Kotzebue, was most helpful in setting up the District Heat Working Group, suggesting changes in the management plan of the proposal, and getting background information and letters of support. The proposal was sent to HUD on January 16, 1981. Appendix D is a partial copy of the proposal. Conplete copies were sent to HUD, the City Manager of Kotzebue, and the Division of Energy and Power Development. Hissing from the copy given in Appendix D is "Appendix B" of the proposal, which is essentially the sane as Appendix B attached to this report. Also not included is "Appendix D" of the proposal, which is a copy of "llorthwest Alaska Co~unity Profiles--Kotzebue" by the University of Alaska, Arctic Environmental Information and Data Center for the Alaska Department of Co~unity and Regional Affairs, Dec, 1976. Task 10 \'lork in conjunction with the City of Kotzebue and the Hauneluk Hative Association to form a District Heating System Association for Kotzebue. After some discussion, it was decided that the City Manager's suggestion of using the City Council as the core of the District Heat Horking Group called for in the HUD proposal was most satisfactory. The composition and duties of this group can be found in Appendix D of this report, p.3. Since the Department of Commerce and Economic Development contemplated participating financially in the project, representa-tives of the Alaska Power Authority and the Division of Energy and Power Development were added. This should be a useful advisory group in beneficially expending the remainder of the geothermal projec~ appropriation. £iDdings and RecoIilr.lendations The general conclusion of the geothermal advisory group meeting was that geothermal energy was not likely to be an economical source of heat for Kotzebue, but that district heat might be feasible. The specific recommendations were that further data be sought from Chevron and NNJA and that HUD should be approached for funds for a more detailed study of district heat. The Division of Energy and Power Development followed these reco@ffiendations. The geological information obtained from Chevron clearly reinfor~ed the conclusion that geothermal energy would not be feasible at Kotzebue. The conclusion is based on several interrelated facts that are described in greater detail in Appendix C. (1) The depth to impermeable basement at Kotzebue is only about 2000 ft. (2) The temperature at 2000 ft. will be too low (10SF-13SF) for direct use. (3) The forIJation pressures are too low to push the water to the surface (4) pumping will be required to get adequate volumes of water to the surface, and this pumping will be 5 ( \c .. expensive. (5) The water is so saline that it Dust be passed through a beat exchanger and reinjected. (6) Higher telt1perature water cannot be economically produced from the IJimiuk point well and transported to Kotzebue, both because of the pumping cost and because of the pipeline cost. (7) Because of the high cost of diesel generated electricity at Kotzebue heat pumps would not be Lldvantageous, either if used individually or in a central installation. (8) The hot dry rock technique of energy extraction would require drilling wells that WOuld be too expensive to deliver energy at a cost competitive with the anticipLlted cost of oil. Of course, the geological parameters are predictions, based on dLlta and assumptions that are explained in detail in Appendix C. The best method for verifying these predictions of tenperature, permeability, porosity, and formation pressure is to drill a well at Kotzebue, and test it. Such a well, to a depth of 2000 ft, would probably not cost less thLln $350,000. The $350,000 cost is based on using a rig that has not drilled to 2000 ft, must drill a 4 in. or less diameter hole, and it assumes that there are no hole problems. To be certain of getting the results desired, it would be necessary to anticipate expenses that would be much greater than $350,000. Other than verifying the geological predictions, such a hole could be used to locate aquifers suitable for thermal energy storage, to gather subsurface water quality data, and would be of interest simply as a source of subsurface information at Kotzebue. The reco~endation that district heat be examined more closely is based on a feasiblity study done in preparation for the advisory group meeting. This study, which used general costs for components of district heat systems and experience by the Public Health Service in constructing the present water and sewer system, predicted that the cost of delivering 1.16 X 10 Btu per year was $1.1 million per year, or $9.48 per million Btu. (This cost includes an allowance for retrofitting house heating systems, but does not include the cost of heating the water.) This estimate was based on using low temperature geo-thermal water, which resulted in mains that were larger than necessary for higher temperature water. Also, due to the danger of subsidence around the geothermal wells it was necessary to transport the water from o~er a mile out of town, which added considerably to the cost. The present cost of fuel for oil heat is about $14.80 per million Btu. Since Kotzebue presents some rather difficult engineering problems for a district heat system, both in soil conditions and the need for extreme system reliability, it is felt that pursuing the district heat option will require a detailed feasibility study, as outlined in the proposal, Appendix D. The total cost of this study was estimated to be $185,500, of which the City of Kotzebue would provide $10,500, the State of Alaska \vould provide $120,000, and HUD would supply $55,000. The cost of the contract for a detailed study of the district heat system is $135,000. The remaining costs ~lere for administration and to fulfill HUD goals. In fulfilling this contract, Energy Systems Inc and the Division of Energy and Power Development had considerable contact with the City of Kotzebue. In particular, the City Council agreed to serve as an advisory group on the proposed district heat study. This group could be asked to help direct how the remaining funds in the Kotzebue geothermal appropriation should be spent. Further study of the district heat option, as outlined in Appendix 6 . ( D, IJP. 1-18, would be a useful application for the funds. The proposed district heat study, and the geothermal study . reported in Appendices Band C, could be considered parts of an integrated space heat study for Kotzebue. Other possible sources of heat that might be examined as part of such an integrated study are the direct use of coal in home furnaces and distributing low Btu gas from coal to the city • 7