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INDIAN RIVER
HYDROELECTRIC FEASIBILITY STUDY
FINAL REPORT
N OVEMBER 2009
Prepared For
CITY OF TENAKEE SPRINGS
P.O. BOX 52
TENAKEE SPRINGS , ALASKA 99841
THIS PROJECT WAS FINANCED BY THE DENALI
COMMISSION AND ITS PARTNERS, THE ALASKA ENERGY
AUTHORITY AND THE CITY OF TENAKEE SPRINGS.
Prepared by
POLARCONSULT ALASKA, INC.
1503 WEST 33RD AVENUE, SUITE 310
ANCHORAGE, ALASKA 99503
City of Tenakee Springs
Indian River Hydroelectric Project Feasibility Study Polarconsult Alaska, Inc.
NOVEMBER 2009 – FINAL REPORT I
EXECUTIVE SUMMARY
This study provides an analysis of the feasibility of constructing a hydroelectric project on
Indian River to provide electricity for Tenakee Springs, Alaska. Of the seven project
configurations analyzed, the recommended configuration is a 120-kW run-of-river hydroelectric
project installed between the top of barrier falls #4 and the bottom of barrier falls #2 on Indian
River. Technical and economic parameters for the recommended project are tabulated below:
The recommended project will meet 100 percent of the cityʹs existing electrical demand about 85
to 90 percent of the time in an average year. During periods of low water flow in the mid-
summer and winter, the diesels will sometimes need to operate to meet system load. The
project offers a significant amount of excess energy that can be used by the community.
The recommended project is located on State of Alaska lands, with a portion of the power line
located on city lands. FERC licensing is not required for the recommended project.
The recommended project can enhance the existing fish ladder at barrier falls #4 by increasing
flow into the fish ladder during periods of low flow in Indian River and by improving access
and bringing power and communications to the ladder to aid with fish monitoring activities.
The projectʹs schedule hinges on the time required to obtain permission to use state land that
the project will occupy. If this can be completed in a timely manner and construction funding
can be secured, other project permits can be obtained and design completed in time for
construction in 2011. Securing leases to state lands could delay construction to 2012 or 2013.
TECHNICAL PARAMETERS
Static Head 60 feet
Design Flow 41.0 cubic feet per second
Penstock 1,550ʹ of
30ʺ HDPE
Total Dynamic Head 50 feet
Turbine Type Ossberger Cross-flow
Installed Capacity 120 kW
Capacity Factor 87.1%
Estimated Annual Energy Generation 839,000 kWh
Existing Utility Energy Generation 433,000 kWh
Transmission 4,500 feet of
Three-phase 7.2kV buried cable
Estimated Direct Construction Cost $1,752,000
Estimated Installed Cost $2,590,000
Annual Displaced Diesel Fuel 44,400 gallons
Continuing Diesel Consumption for Electrical
Generation 4,400 gallons
Benefit – Cost Ratio 1.33
City of Tenakee Springs
Indian River Hydroelectric Project Feasibility Study Polarconsult Alaska, Inc.
NOVEMBER 2009 – FINAL REPORT II
TABLE OF CONTENTS
EXECUTIVE SUMMARY.........................................................................................................................................I
TABLE OF CONTENTS ..........................................................................................................................................II
ACRONYMS AND TERMINOLOGY..................................................................................................................V
1.0 INTRODUCTION.......................................................................................................................................1
1.1 PROJECT AUTHORIZATION AND PURPOSE ................................................................................................1
1.2 PROPOSED ENERGY RESOURCE..................................................................................................................1
1.3 COMMUNITY BACKGROUND .....................................................................................................................3
1.4 SUMMARY OF PREVIOUS STUDIES ..............................................................................................................4
1.4.1 1979 U.S. Army Corps of Engineers Study ..........................................................................................4
1.4.2 1984 U.S. Army Corps of Engineers Study ..........................................................................................4
1.4.3 1993 Polarconsult Feasibility Study......................................................................................................4
1.4.4 2004 Alaska Energy and Engineering, Inc. Project Review..................................................................4
2.0 EXISTING ENERGY SYSTEM .................................................................................................................6
2.1 COMMUNITY ENERGY PROFILE .................................................................................................................6
2.2 ELECTRIC UTILITY ORGANIZATION...........................................................................................................6
2.3 GENERATION SYSTEM ................................................................................................................................7
2.4 ELECTRICAL DISTRIBUTION SYSTEM..........................................................................................................7
2.5 EXISTING AND PROJECTED FUTURE LOAD PROFILE..................................................................................7
2.6 PLANNED UPGRADES.................................................................................................................................9
2.7 ENERGY MARKET .....................................................................................................................................10
3.0 PROPOSED ENERGY RESOURCES.....................................................................................................11
3.1 RESOURCE DESCRIPTION .........................................................................................................................11
3.2 HYDROLOGY ............................................................................................................................................11
3.2.1 Available Hydrology Data...................................................................................................................11
3.2.2 Analysis of Hydrology Data................................................................................................................12
3.2.3 In-Stream Flow Requirements.............................................................................................................16
3.2.4 Maximum Probable Flood....................................................................................................................17
3.2.5 Review of Climate Effects on Hydrology.............................................................................................17
3.3 GEOTECHNICAL .......................................................................................................................................19
3.4 PROJECT LANDS .......................................................................................................................................20
3.4.1 Site Control Requirements...................................................................................................................20
4.0 PROPOSED PROJECT DESIGN............................................................................................................22
4.1 ANALYSIS OF PROJECT ALTERNATIVES ...................................................................................................22
4.2 RECOMMENDED PROJECT ........................................................................................................................23
4.2.1 Recommended Resource Development.................................................................................................23
4.2.2 Recommended Capacity.......................................................................................................................23
4.3 ANNUAL ENERGY PRODUCTION .............................................................................................................26
4.4 CONCEPTUAL SYSTEM DESIGN ................................................................................................................29
4.4.1 Intake...................................................................................................................................................29
4.4.2 Penstock...............................................................................................................................................30
4.4.3 Powerhouse..........................................................................................................................................30
4.4.4 Power Line...........................................................................................................................................31
4.4.5 Site Access...........................................................................................................................................31
4.4.6 Construction Methods.........................................................................................................................31
4.5 CONCEPTUAL INTEGRATION DESIGN......................................................................................................32
City of Tenakee Springs
Indian River Hydroelectric Project Feasibility Study Polarconsult Alaska, Inc.
NOVEMBER 2009 – FINAL REPORT III
5.0 ECONOMIC ANALYSIS.........................................................................................................................33
5.1 ESTIMATED PROJECT INSTALLED COST ...................................................................................................33
5.2 ANNUAL PROJECT COSTS ........................................................................................................................33
5.2.1 Operation and Maintenance................................................................................................................34
5.2.2 Repair and Replacement......................................................................................................................34
5.2.3 Property...............................................................................................................................................35
5.2.4 Taxes....................................................................................................................................................35
5.2.5 Insurance.............................................................................................................................................35
5.2.6 Financing.............................................................................................................................................35
5.3 PROJECT REVENUES AND SAVINGS..........................................................................................................37
5.3.1 Fuel Displacement...............................................................................................................................37
5.3.2 Excess Energy......................................................................................................................................37
5.3.3 Environmental Attributes...................................................................................................................38
5.4 INDIRECT AND NON-MONETARY BENEFITS............................................................................................38
5.5 LIFE-CYCLE COST AND BENEFIT–COST RATIO .......................................................................................39
5.6 SENSITIVITY ANALYSIS.............................................................................................................................40
6.0 PERMITS ....................................................................................................................................................41
6.1 FEDERAL PERMITS ....................................................................................................................................41
6.1.1 FERC...................................................................................................................................................41
6.1.2 U.S. Forest Service ..............................................................................................................................42
6.1.3 U.S. Army Corps of Engineers Permits ..............................................................................................42
6.1.4 U.S. Environmental Protection Agency..............................................................................................43
6.1.5 Federal Aviation Administration ........................................................................................................43
6.2 STATE OF ALASKA PERMITS .....................................................................................................................43
6.2.1 Department of Natural Resources Permits..........................................................................................43
6.2.2 Department of Fish and Game Permits...............................................................................................44
6.2.3 Department of Transportation Permits...............................................................................................44
6.2.4 Department of Environmental Conservation Permits.........................................................................44
6.3 LOCAL PERMITS .......................................................................................................................................44
7.0 ENVIRONMENTAL CONSIDERATIONS..........................................................................................45
7.1 THREATENED AND ENDANGERED SPECIES .............................................................................................45
7.2 FISHERIES AND WILDLIFE ........................................................................................................................45
7.3 WATER AND AIR QUALITY ......................................................................................................................46
7.4 WETLAND AND PROTECTED AREAS ........................................................................................................46
7.5 ARCHAEOLOGICAL AND HISTORICAL RESOURCES .................................................................................46
7.6 TELECOMMUNICATIONS AND AVIATION ................................................................................................46
7.7 VISUAL AND AESTHETIC RESOURCES ......................................................................................................47
7.8 MITIGATION MEASURES ..........................................................................................................................47
8.0 CONCLUSIONS AND RECOMMENDATIONS ...............................................................................48
8.1 DEVELOPMENT PLAN & SCHEDULE ........................................................................................................48
APPENDIX A – COST ESTIMATES OF PROJECT ALTERNATIVES............................................................1
City of Tenakee Springs
Indian River Hydroelectric Project Feasibility Study Polarconsult Alaska, Inc.
NOVEMBER 2009 – FINAL REPORT IV
LIST OF FIGURES
Figure 1-1: Project Overview and Location Map..................................................................................2
Figure 1-2: Overview of Project Options ...............................................................................................5
Figure 1-2: Overview of Project Options ...............................................................................................5
Figure 2-1: Recent Electric System Demand..........................................................................................9
Figure 2-2: Past Fuel and Electricity Costs ..........................................................................................10
Figure 3-1: Location of Relevant Hydrology Basins near Indian River...........................................13
Figure 3-2: Actual and Model Daily Discharge for Indian River.....................................................15
Figure 3-3: Error Distribution for Indian River Discharge Model ...................................................16
Figure 3-4: Average Tonalite Creek Discharge During Negative and Positive Phase PDO.........18
Figure 4-1: Recommended Project Layout ..........................................................................................25
Figure 4-2: Annual Energy Demand, Diesel and Hydro Generation, and Hydro Surplus..........26
Figure 4-3: Daily System Demand and Generation by Source for 1982 (Low Water Year)..........28
Figure 4-4: Daily System Demand and Generation by Source for 1970 (Average Water
Year)......................................................................................................................................28
Figure 5-1: Electric Utility Rates for Different Project Grant Funding Levels................................36
Figure 8-1: Project Development Schedule..........................................................................................49
LIST OF TABLES
Table 2-1: Existing Utility Generation Equipment ...............................................................................7
Table 2-2: Tenakee Springs Population Data ........................................................................................8
Table 2-3: Comparative Median Household Incomes ..........................................................................8
Table 2-4: Past and Recent Electric System Statistics...........................................................................9
Table 3-1: Summary of Hydrology Basins...........................................................................................12
Table 3-2: Basin Hydrology Correlation Results ................................................................................12
Table 3-3: Fitted Equations for Indian River Discharge Model........................................................14
Table 4-1: Technical Summary of Project Alternatives......................................................................23
Table 4-2: TSEUD Actual and Modeled System Electrical Demand Statistics ...............................26
Table 4-3: Annual Energy Demand, Diesel and Hydro Generation, and Hydro Surplus............27
Table 5-1: Estimated Installed Cost for Indian River Hydroelectric Project...................................33
Table 5-2: Annual Project Costs for Indian River Hydroelectric Project.........................................33
Table 5-3: Estimated Annual Project Revenues and Savings............................................................37
Table 5-4: Life Cycle Costs and Benefit-Cost Ratio ............................................................................39
Table 5-5: Sensitivity Analysis of Key Project Economic Parameters..............................................40
Table 6-1: Major Permits Required for the Recommended Hydro Project.....................................41
Table A-1: Estimated Installed Cost of Project Alternatives...............................................................1
Table A-2: Annual Project Costs for Project Alternatives....................................................................2
Table A-3: Estimated Annual Revenues and Savings for Project Alternatives................................3
Table A-4: Life Cycle Costs and Benefit-Cost Ratios for Project Alternatives..................................4
City of Tenakee Springs
Indian River Hydroelectric Project Feasibility Study Polarconsult Alaska, Inc.
NOVEMBER 2009 – FINAL REPORT V
ACRONYMS AND TERMINOLOGY
ADCED Alaska Department of Community and Economic Development
ADEC Alaska Department of Environmental Conservation
ADFG Alaska Department of Fish and Game
ADNR Alaska Department of Natural Resources
AEA Alaska Energy Authority
AEA / REG Alaska Energy Authority Rural Energy Group
AEE Alaska Energy and Engineering, Inc.
BLM Bureau of Land Management
cfs cubic feet per second
coanda effect The tendency of a fluid jet to stay attached to a smoothly convex solid
obstruction. A common example is the way a stream of water, as from a faucet,
will wrap around a cylindrical object held under the faucet (such as the barrel of
a drinking glass).
COE U.S. Army Corps of Engineers
City City of Tenakee Springs
CPCN Certificate of Public Convenience and Necessity
Environmental
attributes
The term environmental attributes is used by the green power industry to
describe the desirable aspects of electricity that is generated by environmentally
benign and/or renewable sources. Environmental attributes are tracked,
marketed, bought and sold separately from the physical energy. Separating the
environmental attributes enables customers on a given utility system to elect to
buy sustainable or ‘green’ energy even if it is unavailable from their utility.
ft foot, feet
FY fiscal year
HDPE high-density polyethylene
City of Tenakee Springs
Indian River Hydroelectric Project Feasibility Study Polarconsult Alaska, Inc.
NOVEMBER 2009 – FINAL REPORT VI
HDR HDR, Inc.
in inch, inches
kV kilovolt, or 1,000 volts
kVA kilovolt-amp
kW kilowatt, or 1,000 watts. One kW is the power consumed by ten 100-watt
incandescent light bulbs.
kWh kilowatt-hour. The quantity of energy equal to one kilowatt (kW) expended for
one hour.
LIDAR Light Detection and Ranging
mi mile, miles
MW megawatt, or 1,000 kilowatts
NEC National Electric Code
NESC National Electric Safety Code
PCE Power Cost Equalization Program
PDO pacific decadal oscillation
Polarconsult Polarconsult Alaska, Inc.
RCA Regulatory Commission of Alaska
SDR strength-dimension ratio.
TSEUD Tenakee Springs Electric Utility Department
USFS U.S. Forest Service
USGS U.S. Geological Survey
V volt
City of Tenakee Springs
Indian River Hydroelectric Project Feasibility Study Polarconsult Alaska, Inc.
NOVEMBER 2009 – FINAL REPORT 1
1.0 INTRODUCTION
1.1 PROJECT AUTHORIZATION AND PURPOSE
In June 2008, the Denali Commission awarded the City of Tenakee Springs (City) funds for a
feasibility study and conceptual design of a run-of-river hydroelectric project on Indian River
The funds were awarded under the Commissionʹs alternative energy project solicitation dated
December 6, 2007. This award is managed by the Alaska Energy Authorityʹs Rural Energy
Group (AEA/REG).
In May 2009, the City of Tenakee Springs authorized Polarconsult Alaska, Inc. (Polarconsult) to
complete a feasibility study and conceptual design for the hydroelectric project. This report is
the Phase I deliverable (Feasibility Study) under this authorization, and presents a
recommended development alternative for the hydroelectric resource.
With the Cityʹs approval, Polarconsult will complete a conceptual design and initiate permit
processes for the preferred project alternative based upon the findings and recommendations
presented in this report.
As described in Section 1.4, hydroelectric development of Indian River has been extensively
studied in the past. In particular, a 1993 Polarconsult feasibility study identified the project as
economical. Work completed for AEA in 2004 included limited review of the 1993 feasibility
study, but an opinion on the project’s feasibility was not given. Because significant time has
passed since 1993, renewed evaluation of the feasibility of this project is appropriate.
This feasibility study focuses on changes that occurred over the past 16 years which justify a
different configuration than recommended in 1993. Project configuration, construction
methods, resource reservations and availability, and community load requirements are all
reviewed to arrive at a recommended project configuration and render an opinion on project
feasibility.
Polarconsult engineers Joel Groves, PE and Mike Dahl, PE traveled to Tenakee Springs June 1
through 3, 2009 to collect data about the existing utility system and review the proposed
hydroelectric site. All 5 barrier falls on Indian River were inspected, penstock routes and access
routes were reviewed, and overland power line routes between the potential powerhouse sites
and Tenakee Springs were walked.
1.2 PROPOSED ENERGY RESOURCE
The proposed energy resource is a run-of-river hydroelectric development on Indian River. The
proposed energy resource is shown in Figure 1-1.
City of Tenakee Springs
Indian River Hydroelectric Project Feasibility Study Polarconsult Alaska, Inc.
NOVEMBER 2009 – FINAL REPORT 2
Figure 1-1: Project Overview and Location Map
STATE INDEX MAP LOCATION MAP
E3
!.I lLES
FAIRBANKS
ANCHORAGE
SEE
LOCATION
MAP
JUNEAU
PROJECT VICINITY MAP
TONGASS NAT'L FOREST ~
N .A
---
INDIAN RIVER _
STUDY AREA /
(THIS PROEJCT) _ ~ 1
j()
I
2
City of Tenakee Springs
Indian River Hydroelectric Project Feasibility Study Polarconsult Alaska, Inc.
NOVEMBER 2009 – FINAL REPORT 3
Aerial view of Tenakee Springs, looking east-southeast. June 2009. Indian River is located less than a
mile beyond the harbor (at the far end of town in this view).
1.3 COMMUNITY BACKGROUND
Tenakee Springs is located on the east side of Chichagof Island, on the north shore of Tenakee
Inlet. It lies 45 miles southwest of Juneau and 50 miles northeast of Sitka. It lies at
approximately 57.78° north latitude and 135.22° west longitude (Section 21, Township 47 south,
Range 63 east, Copper River Meridian). The city encompasses 13.8 square miles of land and 5.3
square miles of marine waters. Tenakee Springs has a maritime climate with cool summers and
mild winters. Normal summer temperatures range from 45 to 65 degrees and normal winter
temperatures range from 25 to 40 degrees. The highest recorded temperature is 84 degrees, and
the lowest recorded temperature is 3 degrees. Total precipitation averages 69 inches a year,
with 62 inches of snow. Tenakee Springs is a second-class city and is not a federally recognized
Native village. Tenakee Springs is located in the Sitka Recording District and the Chatham
School District. 1
1 This community profile is compiled from background data in previous energy studies for Tenakee
Springs and community data on the Alaska Department of Community and Economic Development
(DCCED) website.
City of Tenakee Springs
Indian River Hydroelectric Project Feasibility Study Polarconsult Alaska, Inc.
NOVEMBER 2009 – FINAL REPORT 4
1.4 SUMMARY OF PREVIOUS STUDIES
Development of hydropower resources for Tenakee Springs has been under consideration for
over 30 years. Previous studies have identified Indian River as the best resource for the
community. These studies are briefly summarized below. Key features of Indian River and the
various project configurations are presented in Figure 1-2.
1.4.1 1979 U.S. Army Corps of Engineers Study
Hydropower resources for Tenakee Springs were investigated as part of a regional
reconnaissance study completed for the U.S. Army Corps of Engineers (COE) by CH2M Hill in
October 1979. The COE reconnaissance study identified the following potential projects:
1. A 700-kW run-of-river project at Indian River, about 1.1 miles east of Tenakee Springs.
2. A 325-kW run-of-river project at Harley Creek, about 4.5 miles east of Tenakee Springs
1.4.2 1984 U.S. Army Corps of Engineers Study
In 1984, the COE completed a more detailed feasibility study and environmental assessment of
Indian Riverʹs hydropower potential. The COE selected a 265-kW run-of-river project built on
the west side of Indian River between the head of barrier falls 5 and the toe of barrier falls 3 as
the most cost-effective project. The COE estimated an installed cost for the project of $3.259
million (1984 $), and a benefit-cost ratio of 0.71. Based on these estimates, the COE did not
recommend that the project be constructed.
1.4.3 1993 Polarconsult Feasibility Study
In 1992, the City of Tenakee Springs retained Polarconsult to review the Indian River resource
and determine if cost-effective development of the resource was feasible. Polarconsult devised
a 125-kW project built on the east side of Indian River between the head of barrier falls 4 and
the toe of barrier falls 2. This configuration reduced costs by avoiding the steeper cliffs along
the west side of the river and by avoiding the need to obtain a FERC license for the project.
Polarconsult estimated the direct construction cost of this project at $612,171 (1993 $).
1.4.4 2004 Alaska Energy and Engineering, Inc. Project Review
In 2004, Alaska Energy and Engineering, Inc. (AEE) retained HDR, Inc. (HDR) to conduct a
review of the proposed Indian River project as part of electrical system upgrades completed for
Tenakee Springs by the Alaska Energy Authorityʹs Rural Energy Group (AEA/REG). AEE/HDR
reviewed the 1993 Polarconsult project configuration, made a number of limited modifications
to the proposed design and development plan, and generated an updated estimated direct
construction cost of $1,400,000 and an estimated installed cost of $2,229,975 (2004 $). AEE/HDR
did not offer an updated opinion of the projectʹs feasibility.
City of Tenakee Springs
Indian River Hydroelectric Project Feasibility Study Polarconsult Alaska, Inc.
NOVEMBER 2009 – FINAL REPORT 5
Figure 1-2: Overview of Project Options
TO N GASS NAT IO NA L
FOREST BO U NDARY
STATe LAND
UPPER POWER
DIE SE L
POWER
P LAN T
EN D OF
3-PHASE
DIS TR IBUTION
TE:NAKE:E: INL.n
NO TES
o
E"3 E"3
S16 S15
S21 S22
1000
FE ET
EX ISTING
FOOT TRAI L
1 . PROPERTY LIN ES ARE IN TENDED FOR INFORMATIONAL AND PLAN NI NG P U RPOSES ONLY.
2 . CONTOUR DATA REPRODUCED FROM 1984 U .S. CORPS OF ENGINEERS STU DIES .
2000
City of Tenakee Springs
Indian River Hydroelectric Project Feasibility Study Polarconsult Alaska, Inc.
NOVEMBER 2009 – FINAL REPORT 6
2.0 EXISTING ENERGY SYSTEM
2.1 COMMUNITY ENERGY PROFILE
Like most remote Alaska communities,
Tenakee Springs has an isolated electrical
system that does not have any
transmission interconnections to other
communities. Tenakee Springs relies 100
percent on diesel generation for
electricity. Diesel fuel is imported via
barge several times annually. Other local
energy usage includes diesel and
gasoline fuels for transportation, wood
and fuel oil for space and water heating,
and some use of propane gas for cooking.
Tenakeeʹs energy infrastructure is
relatively new. A new bulk fuel facility and diesel power plant were constructed in 2006. The
cityʹs electrical distribution system was upgraded at the same time.
AEE completed a survey of the city’s total annual petroleum fuel consumption in 2004 for the
bulk fuel upgrade Concept Design Report. AEE reported a total annual fuel usage (for
electricity generation, transportation, marine sales, heating, etc.) of 141,800 gallons, and
estimated future total fuel usage at 144,000 gallons annually.2 Of this total, diesel fuel for power
generation is approximately 32,500 gallons annually.
2.2 ELECTRIC UTILITY ORGANIZATION
Electrical service in Tenakee Springs is provided by the Tenakee Springs Electric Utility
Department (TSEUD), which is owned and managed by the City of Tenakee Springs. The City
holds Certificate of Public Convenience and Necessity (CPCN) No. 363, issued in 1986,
authorizing it to operate a public utility providing electrical service in and around Tenakee
Springs. Because the TSEUD is owned and managed by a political subdivision of the state, the
Regulatory Commission of Alaska (RCA) has exempted the TSEUD from regulation as allowed
by AS 42.05.711(b).
TSEUD participates in the State of Alaska’s Power Cost Equalization (PCE) program, which
subsidizes electricity rates for residential and community facilities served by eligible Alaska
utilities.
2 Tenakee Springs Energy Infrastructure Upgrades Concept Design Report. AEE, Inc. August 2004.
Tenakeeʹs new diesel powerplant. June 2009.
City of Tenakee Springs
Indian River Hydroelectric Project Feasibility Study Polarconsult Alaska, Inc.
NOVEMBER 2009 – FINAL REPORT 7
2.3 GENERATION SYSTEM
Tenakeeʹs power plant is located on a hillside above the center of the community. The plant has
three generators controlled by four sections of switchgear. The switchgear is fully automatic
with paralleling capability, and uses a programmable logic controller to match the generator(s)
to system load. The plant generates at 480V three phase. The generation assets are generally in
good condition - all major assets were installed new in 2006. Installed utility generation
equipment in Tenakee Springs is listed in Table 2-1. 3
Table 2-1: Existing Utility Generation Equipment
No. Equipment Prime Power
(kW)
Commissioned
Date Designated Use
1 John Deere Engine / Marathon Generator 88 kW 2006 Normal peak
2 John Deere Engine / Marathon Generator 88 kW 2006 Normal peak
3 John Deere Engine / Marathon Generator 64 kW 2006 Nighttime load
2.4 ELECTRICAL DISTRIBUTION SYSTEM
The Tenakee Springs distribution system was upgraded in 2006. The system is a 7,200V
grounded wye three-phase system without loop feed. The 7,200V system is entirely overhead
on wooden poles. 480 V generated at the power plant is run down to the main street in above-
ground conduit and stepped up to distribution voltage with a single 112.5 kVA pad-mount
transformer. 3
2.5 EXISTING AND PROJECTED FUTURE LOAD PROFILE
Community electrical demand is a function of population, electricity cost, and available income.
Commercial, industrial, and transient loads such as the harbor can also be major factors in total
system demand.
Tenakeeʹs population, listed in Table 2-2, has fluctuated over the past century between 86 and
210. In recent decades, the population has varied between 90 and 120. The long-term
population trend appears stable.
3 Tenakee Springs Power System Upgrade Record Drawings Sheet E-2, AEE, Inc., 2007.
City of Tenakee Springs
Indian River Hydroelectric Project Feasibility Study Polarconsult Alaska, Inc.
NOVEMBER 2009 – FINAL REPORT 8
Table 2-2: Tenakee Springs Population Data
Year Population
1909 126
1920 174
1929 210
1939 188
1950 140
1960 109
1970 86
1980 138
1990 94
1992 123
2000 104
2004 105
2008 99
Future 90 - 120
Median household income in Tenakee Springs over the past several years is presented in Table
2-3. Household income in Tenakee Springs has been increasing relative to state and national
income over the past several years. As is typical in remote Alaskan communities, median
household income does not reflect the fact that many residents supplement their incomes by
subsistence-type activities such as gathering food and resources from the local environment.
Table 2-3: Comparative Median Household Incomes
Population 1990 2000 2006-07
Tenakee Springs Median Household Income as
percentage of Alaska Median Household Income 44% 64% 72%
Tenakee Springs $18,125 $33,125 $43,636
Alaska $41,193 $51,571 $60,506
United States $30,056 $41,994 $49,901
Data compiled from Alaska Department of Labor and U.S. Census Bureau. Values not adjusted for inflation.
Total system electrical demand over the past several years is presented in Figure 2-1 and Table
2-4. System demand has increased 20 to 30 percent since the 1993 feasibility study and in recent
years has been in the range of 400,000 to 450,000 kWh generated annually. Total generation has
been declining very slightly since FY 2003, which can be attributed to a combination of new,
more efficient generation equipment, distribution system upgrades in 2006, and consumer
conservation measures due to cost increases since 2002. If electricity is available at a stable price
from a hydro plant, it is probable that system demand will increase back to 2003 – 2005 levels.
City of Tenakee Springs
Indian River Hydroelectric Project Feasibility Study Polarconsult Alaska, Inc.
NOVEMBER 2009 – FINAL REPORT 9
(records
unavailable)
150,000
200,000
250,000
300,000
350,000
400,000
450,000
500,000
1984 1988 1992 1996 2000 2004 2008 2012Annual Energy Demand (kWh)Total kWh Generated
Total kWh Sold
Figure 2-1: Recent Electric System Demand
Note: Data is for PCE program fiscal years (July 1 through June 30).
Table 2-4: Past and Recent Electric System Statistics
FY 84 FY 92 FY 02 FY 03 FY 04 FY 05 FY 06 FY 07 FY 08 FY 09
KWh
generated 182,703 344,956 436,660 456,500 444,960 439,360 432,480 431,740 387,311 430,200
KWh sold 165,024 311,094 382,049 407,537 394,727 380,375 377,449 365,767 325,532 364,831
Fuel Price $1.25 $1.18 $1.41 $1.54 $1.71 $2.73 $2.06 $3.30 $3.60 $4.30
Fuel Used 27,728 31,042 35,510 36,280 36,239 35,192 34,894 33,125 30,542 32,587
Total Fuel
Cost $34,750 $36,625 $50,152 $55,815 $61,920 $96,129 $122,283 $109,150 $110,045 $140,854
Total Non-
Fuel Cost $14,654 $57,547 $41,977 $51,553 $56,936 $47,778 $48,983 $62,312 $46,456 $64,300
Total
Power
Production
Cost
$49,704 $93,830 $92,129 $107,368 $118,856 $143,907 $171,266 $171,462 $156,501 $205,154
Power Cost
per kWh $0.299 $0.303 $0.241 $0.263 $0.301 $0.378 $0.454 $0.469 $0.481 $0.562
System
Losses 10.8% 9.8% 12.5% 10.7% 11.3% 13.4% 12.7% 15.3% 16.0% 15.2%
Efficiency
(kWh/gal) 6.6 11.1 12.3 12.6 12.3 12.5 12.4 13.0 12.7 13.2
FY 1984 and 1992 data is from the 1993 Polarconsult study. FY 2002 – 2009 data is from PCE annual reports and
program database, with supplemental information for FY 2006 from TSEUD.
2.6 PLANNED UPGRADES
The bulk fuel, electrical generation, and distribution systems have all been recently upgraded.
No additional upgrades are planned.
City of Tenakee Springs
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NOVEMBER 2009 – FINAL REPORT 10
0
10
20
30
40
50
60
70
2002 2003 2004 2005 2006 2007 2008 2009Electricity Cost (cents/kWh)0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
Fuel Cost ($/gallon)Effective Residential Rate w/ PCE Subsidy (cents/kWh)
Full Residential Rate (cents/kWh)
Fuel Cost ($/gal)
2.7 ENERGY MARKET
Energy from a local hydroelectric project would be fed into the TSEUD system to offset the need
for diesel power generation. Also, the hydroelectric project would often generate energy in
excess of electrical demand, which would be available to offset other energy consumption such
as space heating or water heating. Supplying discretionary commercial/industrial loads, such
as an ice plant to support local commercial fisheries, is also possible.
The cost of electricity for residential and community accounts is reduced by the Power Cost
Equalization program. Subject to authorized annual state funding, this program partially
subsidizes residential energy usage up to 500 kWh monthly. Households pay the full rate for
consumption above 500 kWh monthly. Fuel costs have increased 317% from 2002 to 2009, and
unsubsidized residential energy rates have increased 200%. PCE-subsidized residential energy
rates have increased 169% from 2002 to 2009. Past electricity costs in Tenakee Springs are
presented in Figure 2-2.
The primary direct economic values of the hydro project are (1) reduced expenditures on diesel
fuel and (2) additional affordable energy available for the community. These amounts can be
estimated for a given hydroelectric project and used to determine the value of the hydro.
Analysis of these values is presented in Section 5.0.
Figure 2-2: Past Fuel and Electricity Costs
Note: Data is for PCE program fiscal years (July 1 through June 30).
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3.0 PROPOSED ENERGY RESOURCES
3.1 RESOURCE DESCRIPTION
Indian River is located approximately one mile east of Tenakee Springs. Indian River has a
series of 5 barrier falls occurring between river miles 0.6 and 1.3 above tidewater. The gross
head over these five barriers is 100 feet. The mean annual flow in Indian River through these
barriers is about 137 cfs. Extreme minimum flows of down to 8 cfs can occur during late
summer dry spells (July – August) and the winter months (December – February).
Below barrier 5, Indian River is incised into a canyon about 50 to 100 feet deep. The canyon
walls are generally steeper along the west bank (the Tenakee Springs side), and less steep along
the east bank, although rock outcroppings are common along both banks through this canyon.
Recommended development of Indian River’s hydropower potential is with a run-of-river
hydroelectric project built along the east side of the river from the top of barrier 4 to the bottom
of barrier 2.
3.2 HYDROLOGY
3.2.1 Available Hydrology Data
Discharge on the Indian River was measured by the USGS (gauges #15107910 and #15107920)
from 10/1/1975 through 9/30/1982, providing seven years of discharge data. While the seven
years of discharge data for Indian River is useful to project performance of a hydroelectric
project on Indian River, the confidence of these projections can be increased by expanding this
dataset.
Synthesizing discharge data for Indian River beyond the seven years of actual data is best
achieved by correlating Indian River discharge to that of other basins with longer periods of
record. Synthetic data can also be generated using precipitation data. However, correlating
discharge from comparable basins typically yields superior results if suitable data exists – as it
does for Indian River.
The USGS has recorded discharge at numerous streams in the vicinity of Indian River.
Polarconsult reviewed USGS gauge data for streams along the northern panhandle for potential
correlation candidates in order to extend the period of record for Indian River. Gauges at
Kadashan River, Pavlof River, and Tonalite Creek met these criteria. Kadashan River and
Tonalite Creek are located directly across Tenakee Inlet from the Indian River basin. The Pavlof
River basin is located directly east of and adjacent to the Indian River basin. USGS data and
characteristics of these basins are summarized in Table 3-1. The basins are shown in Figure 3-1.
City of Tenakee Springs
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NOVEMBER 2009 – FINAL REPORT 12
Table 3-1: Summary of Hydrology Basins
Location
USGS
Gauge
ID
Basin
Size
(sq
mi)
Site
Elevation
(ft)
Site
Latitude
(DMS)
Site
Longitude
(DMS)
Record
Begin
Date
Record
End
Date
Daily Records
Indian River (falls
5 intake site) - 20.7 140 5747ʹ18ʺ 13511ʹ33ʺ - - -
Indian River (falls
4 intake site) - 22.1 110 5747ʹ12ʺ 13511ʹ38ʺ - - -
Indian River at
falls 15107910 3.02 490 5751ʹ58ʺ 13519ʹ31ʺ 7/18/79 9/30/81 806
Indian River 15107920 12.9 330 5749ʹ50ʺ 13516ʹ00ʺ 10/1/75 9/30/82 2,556
Kadashan River 15107000 37.7 3 5741ʹ43ʺ 13512ʹ59ʺ 9/1/64 9/30/79 5,507
Tonalite Creek 15106980 14.5 50 5740ʹ42ʺ 13513ʹ17ʺ 6/1/68 9/30/88 7,426
Pavlof River 15108000 24.3 20 5750ʹ30ʺ 13502ʹ09ʺ 6/1/57 9/30/81 8,888
Green’s Creek 15101500 22.8 50 5805ʹ18ʺ 13444ʹ49ʺ 10/1/78 9/30/92 5,114
Green’s Creek 15101490 8.62 - 5805ʹ00ʺ 13437ʹ54ʺ 8/18/89 9/30/08 6,894
3.2.2 Analysis of Hydrology Data
A correlation analysis was performed on the daily discharge records between Indian River at
gauge #15107920 and the three nearby basins (Kadashan River, Tonalite Creek, and Pavlof
River) for their common periods of record. All three basins produced good correlation
coefficients, which are summarized in Table 3-2. Correlation coefficients were also calculated
for the two Indian River data sets and for Green’s Creek, located about 30 miles northeast of
Indian River.
Table 3-2: Basin Hydrology Correlation Results
Correlation Basin
(Correlation with
Indian River)
USGS
Gauge ID
Correlation
Coefficient
Begin of
Record
Overlap
End of
Record
Overlap
Count of
Correlated
Records
Indian River at falls 15107910 0.946 7/18/79 9/30/81 805
Kadashan River 15107000 0.834 10/1/75 9/30/79 1,460
Tonalite Creek 15106980 0.846 10/1/75 9/30/82 2,556
Pavlof River 15108000 0.851 10/1/75 9/30/81 2,191
Green’s Creek 15101500 0.785 10/1/78 9/30/82 1,460
Green’s Creek 1 15101490 0.731 8/18/89 9/30/92 1,139
Note 1: Correlation results are between Green’s Creek gauges #15101500 and #15101490.
City of Tenakee Springs
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Figure 3-1: Location of Relevant Hydrology Basins near Indian River
LEGEND
~DRAINAGE
~ CREEK/
o
F3
6
= 6 MIL ES
BAS IN
12
GREEN'S CREEK
USGS #15101500 -""'=,~
22.8 SQ. MILES
PAVLOF RIVER
USGS #15108000
'-'>J!'j!I/~~Ul-,.;.24.3 SQ. MILES ~,~-,,","--¥ffi
J
City of Tenakee Springs
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The correlation coefficient for the two gauges on the Indian River is very high at 0.946 -
perfectly correlated basins would have a coefficient of 1.00. For comparison, the two gauges on
Green’s Creek are also both located in the same drainage, but have a correlation coefficient of
only 0.731.
With these correlation results, the seven years of data for Indian River (October 1975 to
September 1982) can be extended back to June 1957 via the Pavlof River dataset and forward to
September 1988 via the Tonalite Creek dataset for a synthetic record spanning 31 years.
Second-order polynomial functions were used to separately fit each of the three nearby basin
datasets to the Indian River dataset for the common periods of record. These functions were
fitted to provide greatest accuracy in the 0 to 50 cfs range (on Indian River), and reasonable
accuracy at higher flows. These fitted equations were then used to generate synthetic Indian
River flows from recorded flows in the nearby basins. This approach provides a model with
greater accuracy at lower flows, which provides more accurate modeling of energy generation
and the impacts of in-stream flow reservations. The resulting synthetic flows were scaled by
basin area from the Indian River gauge to the various hydro project intake sites. The fitted
equations for the hydrology model are presented in Table 3-3.
Because the data sets for the three nearby basins have overlapping periods of record, there are
times when synthesized discharge data from multiple basins are available. Different
approaches for selecting between these models were evaluated, and averaging all of the model
outputs was found to best predict actual discharge in Indian River. The resulting model was
compared with the seven years of actual discharge data with Indian River, and had a correlation
coefficient of 0.865.
Table 3-3: Fitted Equations for Indian River Discharge Model
USGS Gauge Dataset Fitted 2nd –Order Polynomial Equation
Pavlof River QI = -.000075 QP2 + 0.44 QP + 0.31
Tonalite Creek QI = -.00040 QT2 + 1.00 QT – 5.00
Kadashan River QI = -.00005 QK2 + 0.24 QK + 40.0
QI = Modeled flow in Indian River (at USGS gauge #15107920).
QK = Recorded flow in Kadashan River by USGS.
QT = Recorded flow in Tonalite Creek by USGS.
QP = Recorded flow in Pavlof River by USGS.
The resulting daily discharge model data is compared with measured daily flows in Figure 3-2.
City of Tenakee Springs Indian River Hydroelectric Project Feasibility Study Polarconsult Alaska, Inc.
NOVEMBER 2009 – FINAL REPORT 15
Figure 3-2: Actual and Model Daily Discharge for Indian River
"'" ~ ..... ... ~ ~ ..... <II ~ 00 ~ -5 <Il ..... 0 ~ > ..... ~ a ..... ." c:: .... 1,000 900 800 700 600 500 400 300 200 100 \1 o Jun-75 [ [ -Synthesized Indian River Daily Discharge -Measured Indian River Daily Discharge III I 1 "'llj I ~ ll""I~~ l~iI \A I Jun-76 Jun-77 Jun-78 I I ~ \j Vd ~ ~ Jun-79 Date U I~ Jun-80 l »1 ~ I ~ \... Iun-81 Jun-82 •
City of Tenakee Springs
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NOVEMBER 2009 – FINAL REPORT 16
0%
5%
10%
15%
20%
25%
30%
35%
-200 -150 -100 -50 0 50 100 150 200
Model Error in cfsPercentage of all RecordsModel Error for Daily Flows Under 50 cfs
Model Error for All Daily Flows
To evaluate the accuracy of the synthetic discharge data, the error between the synthetic daily
discharge and actual daily discharge for the Indian River was reviewed for the October 1975
through September 1982 period, and is plotted on Figure 3-3. Observations from Figure 3-3:
¾ At flows less than 50 cfs, the model was accurate to within +/-10 cfs 75% of the time.
¾ At flows less than 50 cfs, the model is about equally likely to over or under estimate
discharge, so over long periods of time, model errors will tend to time-shift hydro (or
diesel) energy production rather than over- or under-forecast energy production.
¾ The model has larger errors over the entire range of discharge. Because the
recommended project flow combined with fish ladder flows totals only 51 cfs, the
accuracy of the model at higher flows is relatively unimportant for economic analysis
purposes.
Thus, the accuracy of the hydrology model is considered adequate for economic modeling of
the hydroelectric project.
Figure 3-3: Error Distribution for Indian River Discharge Model
3.2.3 In-Stream Flow Requirements
All of the considered project configurations would have the potential to dewater the USFS fish
ladder at barrier 4. Excessive dewatering of the fish ladder would impair its functionality,
which is not desired. To maintain functionality of the fish ladder, minimum flows need to be
maintained in Indian River at the top of the ladder during fish migration seasons.
City of Tenakee Springs
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USFS personnel measured flows at the top of the ladder in August 2004 to determine the
minimum flow requirement for the ladder. They visited at a period of low flow – measured
flow above the ladder was 9.0 cfs, which has a greater than 98% exceedance level for the Indian
River in August. Based on their field measurements, a minimum flow requirement for the
ladder of 10 cfs was determined. 4
Review of photographs in the 2004 USFS trip report indicates that at 9 cfs, a significant amount
of water was not entering the ladder and still flowing down the natural falls. This suggests that
the fish ladder needs less than 10 cfs to function, but it takes 10 cfs of flow in Indian River to
deliver sufficient water to the fish ladder inlet with the existing inlet configuration. If the hydro
intake improves existing inlet conditions to preferentially direct low flows to the fish ladder, it
may be possible to both improve low-flow fish passage and reduce the in-stream flow
reservation. This would benefit both fish passage and hydropower generation potential. This
possibility warrants investigation in the permitting and design phase of the project.
As part of HDRʹs 2004 review of the project, Ken Coffin with USFS was contacted regarding fish
requirements on Indian River. Based on this conversation, the critical season for fish migration
via the fish ladder is late August through early December. 5
3.2.4 Maximum Probable Flood
The 1984 COE study of Indian River included analysis of the maximum probable flood for
Indian River. This analysis is considered adequate for feasibility assessment purposes. The
maximum probable flood, with a 100-year expected recurrence interval, is 5,670 cfs.
3.2.5 Review of Climate Effects on Hydrology
Long term climate trends can affect the amount of discharge in Indian River and therefore the
amount of energy that a hydro project can generate. Two climate fluctuation phenomena are of
interest for this project:
1. The Pacific Decadal Oscillation (PDO). 6 The PDO has been demonstrated to measurably
affect the energy generation potential of Alaska run-of-river hydropower resources. 7
2. Global warming climate change.
4 USFS Trip Report, Martin Becker and Dan Kelliher, USFS Sitka Supervisorʹs Office, August 24, 2004.
5 HDR Final Project Memo on Indian River Hydroelectric Project, August 4, 2004.
6 The PDO is a climate fluctuation phenomenon similar to the ʹEl Nino / La Ninaʹ oscillations in the
tropical and southern parts of the Pacific Ocean. The PDO and its effects on Alaska’s climate are
discussed at http://jisao.washington.edu/pdo/.
7 Polarconsult has evaluated other Alaska hydropower resources for PDO effects. Annual average
energy generation for run-of-river resources in southcentral Alaska has been found to vary by about
5% due to the PDO. Other long-term climate trends have not been evident in Polarconsult’s analyses.
City of Tenakee Springs
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3.2.5.1 Analysis of Effects from PDO
The synthesized 31-year discharge record for Indian River is derived from different basin
discharge data collected over different time intervals. Because of this, caution must be used in
interpreting perceived long-term climate effects from this dataset. Detected artifacts can be
attributed to either climate trends or underlying basin-discharge differences.
Analysis of energy generation calculated using the synthetic Indian River discharge dataset
reveals that annual energy generation is about 5.5% higher on average during the positive-
phase PDO than it is during the negative-phase PDO. This 5.5% fluctuation is not a large
enough effect to significant impact the feasibility of the hydro project.
The 20-year Tonalite Creek hydrology dataset spans the 1976-77 PDO shift, and is therefore the
best single discharge record to evaluate PDO effects on basin discharges near Tenakee Springs.
Review of this dataset shows that winter discharge is significantly higher during the positive-
phase PDO, suggesting that the 5.5% annual energy variation observed from analysis of the
synthetic Indian River hydrology may be due to the PDO.
Figure 3-4: Average Tonalite Creek Discharge During Negative and Positive Phase PDO
0
50
100
150
200
250
300
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Month15-day Moving Average of Average Daily Discharge in Tonalite Creek(cfs)Average daily discharge for 1968-1976 (Negative Phase PDO)
Average daily discharge for 1977-1988 (Positive Phase PDO)
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3.2.5.2 Analysis of Affects from Global Warming
Analysis of energy generation calculated using the synthetic Indian River discharge dataset
reveals a very slight increase in annual energy generation over the 31-year period. The effect, if
real and not an artifact of the synthesized data, is equal to about a 0.07% annual increase which
is insignificant in terms of project feasibility.
3.3 GEOTECHNICAL
The project area is recently glaciated, and is characterized by thin organic soils over a mantle of
inorganic granular glacial deposits
of varying depths. Bedrock is
exposed in many areas, and is
likely shallow over much of the
project area.
Exposed bedrock is evident at the
potential intake sites at barriers 4
and 5. Occasional bedrock
outcrops are visible along the
penstock route along the east bank
of the river. According to USFS
data, these rock outcrops are kennel
creek limestones of Devonian and
Silurian age. 8
Depressions or level areas in the
terrain, in particular along the
power line routes, are generally unforested wetlands with a significant layer of organic soil.
Other level areas, such as on the east side of Indian River between the logging road and canyon
rim, are mature old-growth conifer forest with a relatively dry and open understory.
Exposed bedrock at the recommended intake site at barrier 4 will facilitate construction of an
intake structure. The powerhouse site, located at the toe of the canyon sideslopes, may be
complicated by the presence of unconsolidated deposits. Bedrock should be shallow at these
areas and finding a good powerhouse site founded on rock is likely.
The canyon walls on the west side of Indian River are very steep and in some areas consist of
unvegetated active slide zones. Routing a penstock on this side of the canyon would require
major civil works that would be prohibitively expensive to both construct and maintain.
8 Figure 1-2 and accompanying text, Indian River Watershed Analysis, Sitka Ranger District, USFS, 1996.
View of rock outcrop looking downstream from proposed
intake location at Falls 4.
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The canyon walls on the east side of Indian River are less steep and are generally vegetated.
Construction of a penstock down this side is feasible, although this penstock corridor still
presents the most significant geotechnical challenges for the project. Some blasting of rock
outcrops will likely be necessary. In other areas, construction must either consist of a relatively
high impact bench, which has the potential to destabilize the side slopes, or a more minimalist
structure, such as a timber structure supporting a penstock, which can be keyed into bedrock
and keep most of the vegetation in the canyon intact. Careful design and construction of the
penstock will be necessary to control costs and prevent undesirable mass wasting or soil slides.
3.4 PROJECT LANDS
Land ownership in the project vicinity is indicated on Figure 1-2. With the exception of a city-
owned campground site near the mouth of Indian River, the lower reach of Indian River from
its mouth to the Tongass National Forest boundary is located on state land. The USFS holds a
lease for the fish ladder at barrier 4. There is also a public-access easement from the logging
road to the fish ladder site (ADL 106204). The Tongass National Forest boundary runs east-
west between barrier 4 and barrier 5. Land north of this line are part of the Tongass National
Forest.
For the recommended project, with an intake above barrier 4 and powerhouse below barrier 2,
the project works and access routes will be located on state land. Projects with an intake at
barrier 5 would be located partially on federal (U.S. Forest Service) land.
Power line routes from the hydro powerhouse to Tenakee Springs would cross state land near
Indian River and near Tenakee Springs. In between, they would be located on city land. There
are existing city land or platted streets that provide access for the power line to connect from the
uplands behind town to the existing distribution system.
3.4.1 Site Control Requirements
Any hydroelectric project will require clear title to the land it occupies. This includes the land
associated with the intake/diversion structure footprint, penstock alignment, powerhouse and
tailrace footprint, transmission line alignment, and access trails or roads. Title to this land can
take a variety of forms. Some typical methods are listed below:
¾ Land transfer or purchase. The City approached USFS in 2002 regarding a potential
land swap for a hydro project utilizing barrier 5, and USFS was not interested. The land
along Indian River downstream of the current Tongass boundary was included in the
State’s conveyance to the City. However, the State retained title to this land for a variety
of purposes as set forth in the 1981 settlement agreement between the City and the State.
This settlement agreement anticipated a future hydroelectric project along Indian River,
and indicated that the State’s normal right-of-way procedures be used to secure title to
City of Tenakee Springs
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land necessary for the project. The City could approach the State regarding a land swap
for the project, or work with ADNR’s procedures to lease the project lands. 9
¾ Easements. Property rights for the projectʹs linear features, such as access routes, power
lines, and penstocks, can be secured by easements. For this project, access routes could
occupy public-access easements (as already exist to the fish ladder at barrier 4), and the
power line and penstock could occupy utility easements.
¾ Leases. If land purchase or transfer is not possible for the powerhouse and intake sites,
these can be leased on a long term basis from the State of Alaska. ADNR has a non-
competitive charitable-use lease process that TSEUD would likely use. 9 ADNR land
leases have a maximum term of 55 years. Based on similar recent leases ADNR has
completed, a lease term of 30 to 50 years is expected for this project.
9 ADNRʹs land disposal (lease or sale) processes for public and charitable uses are described in AS
38.05.810.
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4.0 PROPOSED PROJECT DESIGN
4.1 ANALYSIS OF PROJECT ALTERNATIVES
Five general project configurations along Indian River were considered:
¾ Top of barrier 4 to bottom of barrier 2
¾ Top of barrier 4 to bottom of barrier 1
¾ Top of barrier 5 to bottom of barrier 3
¾ Top of barrier 5 to bottom of barrier 2
¾ Top of barrier 5 to bottom of barrier 1
Projects with an intake at barrier 5 would be located partially on USFS land, and would
therefore require either a FERC license or a FERC license exemption. Projects with a
powerhouse located below barrier 2 would dewater higher-grade habitat located between
barrier 2 and barrier 1, and could therefore be subject to higher in-stream flow reservations.
Technical aspects of these four configurations are summarized in Table 4-1.
View of barrier 5 looking upstream (left)
View of barrier 4 and USFS fish ladder looking upstream (right)
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Table 4-1: Technical Summary of Project Alternatives
Parameter Barrier 4 to 2 Barrier 4 to 1 Barrier 5 to 3 Barrier 5 to 2 Barrier 5 to 1
Gross Head (ft) 60 80 65 90 110
Design Flow (cfs) 41.0 31.0 38.0 27.0 20.5
Penstock 1,550ʹ of
30ʺ HDPE
2,500ʹ of
28ʺ HDPE
2,750’ of
32ʺ HDPE
3,350ʹ of
28ʺ HDPE
4,400ʹ of
28ʺ HDPE
Net Head (ft) 50 66 53 75 98
Turbine Type Ossberger
Cross-flow
Ossberger
Cross-flow
Ossberger
Cross-flow
Ossberger
Cross-flow
Ossberger
Cross-flow
Capacity (kW) 120 120 120 120 120
Capacity Factor (%) 1 87.1% 90.3% 86.9% 90.1% 91.1%
FERC Licensing or
Exemption Required No No Yes Yes Yes
Higher In-Stream
Flow requirement No Possible 2 No No Possible 2
1. Capacity factor is the amount of energy the project is expected to produce divided by the theoretical energy that
could be produced if adequate water was available year-round. Calculations are based on the average model
water year for Indian River with a 10 cfs year-round in-stream flow reservation for fish passage.
2. Maintaining fish habitat between barrier 2 and barrier 1 may require more than the 10 cfs minimum in-stream
flows necessary for other project configurations.
4.2 RECOMMENDED PROJECT
4.2.1 Recommended Resource Development
Of the five resource configurations considered, the barrier 4 to barrier 2 project is
recommended. All five projects have substantially similar energy generation potential,
especially when measured against TSEUD’s existing electrical demand. Most of the difference
in generation potential is in how much excess energy the projects would produce. All five
project configurations offer more total energy than TSEUD’s total current annual generation.
Since the energy potential is about the same, the recommended project was selected based
largely on cost. The three projects with an intake at barrier 5 would require a FERC license
exemption, increasing pre-construction costs. The other projects each have significantly longer
penstocks, which would increase construction costs relative to the recommended option.
4.2.2 Recommended Capacity
The best sized project to build at Indian River depends on the project cost and ability of the
community to use the energy. For the relatively small projects considered at Indian River, cost
does not vary much with installed capacity – the costs are similar if 60, 120 or 180 kW is
installed. This is due to many of the project features being largely independent of capacity,
such as:
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¾ Access corridors
¾ Power and communications lines
¾ Permitting and design
¾ Intake structure
¾ Controls
Other cost items do vary with the size of the project, but they do not change dollar for dollar.
For example, if the capacity is halved from 120 kW to 60 kW, the turbine cost does not drop in
half, nor can the power house be half the size. Such cost items include:
¾ Penstock
¾ Turbine / generator / switchgear
¾ Powerhouse
Construction of 60 kW and 180 kW projects at the recommended site were considered. The 60
kW option would only achieve a 10 to 20 percent installed cost savings relative to the
recommended 120 kW project. This project would be unable to supply enough power to meet
TSEUD’s existing peaks, so diesels would have to run significantly more often, reducing the
fuel savings. Also, this project would generate comparatively little excess energy for Tenakee –
about 72,000 kWh annually, compared with 447,000 kWh of excess energy from the
recommended 120 kW project.
A 180 kW project is estimated to be only 10 to 20 percent more costly than the recommended
120 kW project. Since crossflow turbines require at least 25 percent of their design flow to
operate, this project actually meets slightly less of TSEUD’s existing energy demand because the
larger turbine is shut down more often during low flow periods. Thus, the value of the 180 kW
project lies in the excess energy it offers to the community. If the community is unable to use all
of this energy, the additional cost of the 180 kW project is not justified. If the utilization rate of
excess energy drops from 90 percent for a 120 kW project to 80 percent for a 180 kW project, the
larger project has a lower benefit – cost ratio (see section 5). Because it may be difficult for
Tenakee Springs to absorb all of the energy from a 180 kW project, the 120 kW project is
recommended.
The project layout is shown in Figure 4-1.
City of Tenakee Springs
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NOVEMBER 2009 – FINAL REPORT 25
Figure 4-1: Recommended Project Layout
SECT ION 15
SEC TION 22
UPPER P.-E j ROUIT 5, 0 f.)~
"3 "i'1? "J~~
~(:~
to ...............
to~
to ~ LOWER POWER LIN E
ROUTE 4.400 FT.
__ '200 ~
500
FEET
240Q' ACCESS TRAIL
TO PO ERHOUSE
1000
City of Tenakee Springs
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NOVEMBER 2009 – FINAL REPORT 26
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
900,000
1,000,000
195819601962196419661968197019721974197619781980198219841986YearAnnual Energy Demand and Supply (kWh per year)Energy Supplied by Hydro
Excess Energy available from Hydro
Energy Supplied by Diesels
Current Utility Demand
4.3 ANNUAL ENERGY PRODUCTION
An analysis of the recommended project was performed using the 31 years of synthetic
discharge data, a continuous year-round 10 cfs bypass for fish passage, and an hourly load
model for TSEUD. The load model was developed from TSEUD’s monthly peak demand data,
monthly energy usage data, and annual energy usage data. Hourly demand was synthesized
using a program developed by the National Renewable Energy Laboratory (NREL) based upon
data for Alaska villages. 10 Load model and actual TSEUD system statistics are compared in
Table 4-2. Simulated annual energy production is summarized in Figure 4-2 and Table 4-3.
Table 4-2: TSEUD Actual and Modeled System Electrical Demand Statistics
Parameter Actual TSEUD Data Load Model
Peak Load (kW) 120 1 120
Average Monthly Load (kW) 50 50
Total Annual Energy Demand (kWh) 440,000 438,500
TSEUD data is complied from utility records and PCE reports from 2002 – 2009.
Note 1: several peaks in the 120 – 180 kW range occurred in 2006. These are inconsistent with the record from 2002 –
2009, and are attributed to the system upgrades that occurred that year.
Figure 4-2: Annual Energy Demand, Diesel and Hydro Generation, and Hydro Surplus
10 The Alaska Village Electric Load Calculator, NREL/TP-500-36824, NREL, Golden Colorado, Sept. 2004.
City of Tenakee Springs
Indian River Hydroelectric Project Feasibility Study Polarconsult Alaska, Inc.
NOVEMBER 2009 – FINAL REPORT 27
Table 4-3: Annual Energy Demand, Diesel and Hydro Generation, and Hydro Surplus
Annual Energy Minimum Hydro
Years (’66, ’69, ‘82) Average Maximum Hydro
Years (’60, ‘81, ’84)
System Demand (kWh) - 438,800 -
Demand Met by Hydro (kWh)
(percent of demand by hydro)
323,700
74%
392,100
89%
438,800
100%
Demand Met by Diesels (kWh)
(percent of demand by diesels)
115,100
26%
46,700
11%
0
0%
Excess Hydro Energy Available (kWh)
(excess hydro as percent of total demand)
347,200
79%
472,000
108%
545,000
124%
On average, diesel generation would still be necessary to supply about 11% of TSEUDʹs annual
energy demand. Diesel generation would typically be necessary in the late summer (July and
August) and late winter / early spring (January to March) when flows are lowest. Figures 4-3
and 4-4 show daily demand and generation for 1982, a low water year, and 1970, an average
water year.
City of Tenakee Springs
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NOVEMBER 2009 – FINAL REPORT 28
Figure 4-3: Daily System Demand and Generation by Source for 1982 (Low Water Year)
Figure 4-4: Daily System Demand and Generation by Source for 1970 (Average Water Year)
0
500
1,000
1,500
2,000
2,500
3,000
3,500
Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov
1982Daily Energy Demand and Supply (kWh/day)Excess Energy available from Hydro
Energy Supplied by Diesel
Energy Supplied by Hydro
Total System Demand
Energy Supplied by Hydro
Excess Energy
available from
Hydro
Energy Supplied
by Diesels
Current Utility Demand
0
500
1,000
1,500
2,000
2,500
3,000
3,500
Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov
1970Daily Energy Demand and Supply (kWh/day)Excess Energy available from Hydro
Energy Supplied by Diesel
Energy Supplied by Hydro
Total System Demand
Energy Supplied by Hydro
Excess Energy
available from
Hydro
Energy Supplied
by Diesels
Current Utility Demand
City of Tenakee Springs
Indian River Hydroelectric Project Feasibility Study Polarconsult Alaska, Inc.
NOVEMBER 2009 – FINAL REPORT 29
4.4 CONCEPTUAL SYSTEM DESIGN
4.4.1 Intake
The intake would be
located at the top of
barrier 4, adjacent to the
existing head wall for
the fish ladder. The
intake structure would
consist of a concrete or
grouted steel frame set
perpendicular to the
flow of the water at the
head of the falls. This
frame would measure
approximately 30 feet
long by 3 feet wide, and
it would be designed so
the top dropped at
about a 45-degree angle
in the direction of flow.
A series of metal screens
would be set into the top of this frame. These screens would use the coanda effect to pull water
from Indian River as it passed over the frame and screens.
The slot opening in the screens would be approximately 0.05 to 0.10 inch. This slot size would
reject fish and most debris in the water. The frame would include gates to allow the area
beneath the screens to be flushed out when necessary. These gates could be automated or
manual. The orientation of the screens downstream and below the frame would help to protect
them from damage from water-borne debris. The frame would be designed so the screens
could be readily removed and replaced in manageable sections.
The hydro intake structure could include a number of features to aid in maintenance of both the
intake and the adjacent fish ladder:
¾ Posts or piers to allow placement of a removable gangway to access the fish ladder.
¾ Sill height set to direct low flows into the fish ladder. Possibly slots to allow for
installation of stop logs to direct low flows.
¾ Power and low bandwidth communications to aid in monitoring performance of the fish
ladder.
Recommended intake location at the top of barrier 4, looking downstream.
The headwall of the existing USFS fish ladder is visible at the far right.
City of Tenakee Springs
Indian River Hydroelectric Project Feasibility Study Polarconsult Alaska, Inc.
NOVEMBER 2009 – FINAL REPORT 30
4.4.2 Penstock
The penstock would be a 30-inch pipe surface mounted along the east bank of Indian River.
Where possible, a narrow bench would be dug into the hillside and the penstock secured to on-
grade timbers. In steeper or unstable areas, timber supports would be installed at 10- to 15-foot
intervals and secured to bedrock via rock bolts. The penstock would be able to self-span across
such supports. If longer spans are necessary, a timber frame and intermediate cradles would be
used to support the penstock. The penstock design would need to accommodate thermal
expansion of the pipe. Power and communications cables from the powerhouse to the intake
would be installed adjacent to the penstock in conduit. Variations of this design approach, such
as complete use of benching or timber supports, are possible.
Some blasting would likely be necessary immediately below the intake site to form a bench for
the penstock. Additional blasting may be necessary in other areas along the route.
The penstock would likely be constructed of steel or high-density polyethylene (HDPE) pipe.
Benefits of using steel would include the ability of the pipe to self support for much longer
spans, and easier repair of the penstock in the event of major damage (such as a direct hit from a
tree fall). Downsides of steel relative to HDPE include greater likelihood of damage from tree
falls, increased construction difficultly, and decreased useful life. The material selection for the
penstock will be determined in the design phase.
4.4.3 Powerhouse
The powerhouse would be approximately 24 feet by 20 feet, and would house the turbine,
generator, controls, and switchgear. A 150-kVA transformer would be located adjacent to the
powerhouse. The powerhouse foundation would be concrete or steel.
The turbine would be an Ossberger crossflow turbine. These turbines have fairly flat efficiency
curves down to about 50% of their design flow. As available flow decreases from 50% to 25%,
turbine efficiency decreases about 10%. Below approximately 25% of the design flow, these
turbines cannot function. The turbine would be equipped with a draft tube to increase output.
The draft tube is fitted below the turbine, and uses the head between the turbine and the tail
water surface to pull a slight suction on the turbine, increasing its power generation.
The turbine would be coupled to a generator via a belt-drive speed increaser. These are
preferred over gear boxes because they have similar power transfer efficiency, good life on the
belts, and are much simpler to maintain and replace.
The generator would be a three-phase synchronous generator with a speed of 1200 or 1800 rpm.
Estimated full-flow water-to-wire efficiency at the generator leads would be about 70%.
City of Tenakee Springs
Indian River Hydroelectric Project Feasibility Study Polarconsult Alaska, Inc.
NOVEMBER 2009 – FINAL REPORT 31
4.4.4 Power Line
The power line connecting the powerhouse to the TSEUD distribution system will be a three-
phase 7.2 kV line. It will be overhead leaving the power house to cross Indian River. On the
other side of the river, the power line will be installed in conduit and buried to protect it from
falling trees and limbs.
An overhead line, either on
poles or on tree cable, was
considered. While a buried
power line will have a higher
initial cost, the buried line
will be more reliable, because
it will be less prone to
damage from falling trees or
limbs in ice and wind storms.
The cost of outages and line
maintenance over the life of
the project is about the same
as the additional cost of the
buried line. The buried line is
also used because it is
expected to have greater
reliability and superior
aesthetics.
4.4.5 Site Access
Access trails for small vehicles will be built from the logging road to the powerhouse and intake
sites and, where possible, along the penstock route. In the design phase, the need for these
access trails will be scrutinized to determine if less-costly construction is possible with
decreased use of trails and increased use of other methods such as helicopters.
4.4.6 Construction Methods
The use of force account labor methods is assumed to maintain better control over labor
productivity and cost.
Labor housing is assumed to be provided by a temporary camp along the logging road.
Housing in Tenakee may be logistically simpler and/or less costly.
All construction materials would be offloaded from barges at the log dump site. Materials
would be staged at the construction sites either by land vehicles or by helicopter. Some items,
View looking southeast of forested terrain typical of the proposed power
line routes between hydro powerhouse and Tenakee Springs. Tenakee
Springs is located to the right of this view.
City of Tenakee Springs
Indian River Hydroelectric Project Feasibility Study Polarconsult Alaska, Inc.
NOVEMBER 2009 – FINAL REPORT 32
such as the powerhouse structure, could possibly be prefabricated and delivered to the site by
helicopter.
Penstock pipe would be shipped in 40-foot segments. If HDPE pipe is used, a fusion machine
would need to be rented and shipped to the site to fuse the pipe into three approximately 500-
foot long segments. These segments would then be carefully dragged and/or winched into their
final locations in the canyon. Each segment would weigh about 20,000 pounds. Properly
protected, this can be dragged by a D-4 or similar small tractor.
4.5 CONCEPTUAL INTEGRATION DESIGN
The hydroelectric generator will be a 480-volt synchronous machine and transformer connected
to the TSEUD 7.2 kV distribution system via a dedicated power line. A manual disconnect and
fuse will be located in town at the point of interconnection. A separate dedicated controls wire
will be installed between the hydro powerhouse and the diesel powerhouse to coordinate
operations between the various generator sets.
Because this is a high-penetration renewable energy resource, the town’s diesels can be turned
off for a significant amount of the time. This will help to extend the life of the diesel engines,
reduce usage of consumables, and conserve fuel. The hydro project switchgear will be
integrated with the diesel plant switchgear to optimize and automate operations. When the
hydro project’s energy output is close to or less than the system’s load, the switchgear will start
diesel genset(s) as necessary to parallel with or replace the hydro depending on water
availability and system load.
City of Tenakee Springs
Indian River Hydroelectric Project Feasibility Study Polarconsult Alaska, Inc.
NOVEMBER 2009 – FINAL REPORT 33
5.0 ECONOMIC ANALYSIS
5.1 ESTIMATED PROJECT INSTALLED COST
The estimated installed cost for the recommended Indian River hydro project is $2,590,000. This
is presented in Table 5-1. A more detailed estimate is presented in Appendix B.
Table 5-1: Estimated Installed Cost for Indian River Hydroelectric Project
Item Estimate
Pre-Construction Activities $208,000
Construction (labor, equipment, materials)
Power Line $342,000
Powerhouse / Generation Equipment $396,000
Project Access $145,000
Penstock Sitework / Access $431,000
Penstock Construction $106,000
Intake Structure $52,000
Construction Equipment $142,000
Shipping $137,000
Direct Construction Cost $1,752,000
Project Administration / Management $102,000
Construction Engineering / Inspections / Commissioning $102,000
Contingency (20%) $350,000
Financing (3%) $75,000
Installed Cost $2,590,000
5.2 ANNUAL PROJECT COSTS
Annual project costs are summarized in Table 5-2 and discussed in the following sections.
Table 5-2: Annual Project Costs for Indian River Hydroelectric Project
Cost Item Annualized Cost
Hydroelectric Project
Hydro Operations & Maintenance $15,200
Diesel Operations and Maintenance -$7,700
Hydro Repair & Replacement $10,800
State Lease Royalties $3,900
Annual Project Operations Costs $22,200
Debt Service (for 100% financed project) $132,200
Total Annual Project Costs $154,400
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NOVEMBER 2009 – FINAL REPORT 34
5.2.1 Operation and Maintenance
Total non-fuel O&M costs for TSEUD have averaged about $51,000 annually over the past
several years.11 This annual expense includes activities such as meter reading, customer service,
managing customer accounts, etc. These costs will not change if the means of energy generation
changes from diesel to hydroelectric or a combination of both.
This annual expense also includes the costs of lube oils, filters, and other consumables for the
diesel generators, maintenance labor, and similar costs that are directly tied to the running time
or energy generation of the diesel power plant. Some of these costs will be avoided with a
hydroelectric project.
Because the diesels would be run less often and would be run at a lighter loading with the
hydroelectric project in service, they would use fewer consumables and would require less-
frequent overhauls. These are assumed to be worth 15 percent of total annual non-fuel
expenses, or $8,000 annually.
The hydroelectric project will have operation and maintenance costs. Based on experience with
similar projects, annual O&M costs are estimated to be $15,000 annually. This includes
additional labor costs for monitoring and maintaining the hydro as well as direct expenses for
parts and consumables.
5.2.2 Repair and Replacement
Low frequency natural events such as wind storms and floods may periodically damage
portions of the hydroelectric project. Damage might occur to the intake (flood debris damaging
the screens), power line (tree roots ripping up conduit), penstock (flood induced erosion, falling
trees and limbs), and powerhouse (wind storms or falling trees and limbs). The estimated
annual cost to repair such damage is listed in Table 5-2.
Most of the hydroelectric project systems and components have a very long useful life. The
intake, penstock, powerhouse, switchgear, turbine/generator, and power line all have useful
lives of at least 30 years. Some portions of the project will require periodic repair or
replacement. Portions of the penstock trail that are constructed with timbers may start to
require replacement at 15 years. Similarly, the intake screens are assumed to have a 15-year
useful life. Some minor electric components, such as the hydraulic pumps, control sensors, and
similar devices, are assumed to have a useful life of five years.
11 See Table 2-4.
City of Tenakee Springs
Indian River Hydroelectric Project Feasibility Study Polarconsult Alaska, Inc.
NOVEMBER 2009 – FINAL REPORT 35
5.2.3 Property
The recommended hydroelectric project is located on state land. On recent renewable energy
leases, the Alaska Department of Natural Resources (ADNR) has required annual lease
payments of either $1,000 per acre or 2.5% of gross revenue to the leaseholder. These lease fees
have been levied against publicly owned utilities such as Kodiak Electric Association, Inc.
(organized as a rural electric cooperative) so it is probable that they would be levied against
TSEUD. 12
Because of the modest size of a lease for the powerhouse and intake sites (about an acre
combined), it is assumed that ADNR would levy the 2.5% gross revenue royalty against the
TSEUD. This is consistent with ADNRʹs management directive to encourage development of
state lands for maximum benefit of the stateʹs citizens. This royalty payment is estimated to be
approximately $4,000 per year.
5.2.4 Taxes
Because TSEUD is a department of a local government, it will not need to pay any taxes.
5.2.5 Insurance
It is assumed that the City of Tenakeeʹs and TSEUDʹs existing insurance coverages would cover
the hydroelectric project. No annual cost is allocated for insurance.
5.2.6 Financing
The costs of financing will depend on the type of financing used for the project. Financing
options vary from government grants or loans to commercial financing options such as
bonding.
Commercial finance for the project is assumed to consist of a 30-year bond at a nominal interest
rate of 6%. Adjusted for inflation (assumed at 3% average over 30 years), this is a real interest
rate of approximately 3%. In addition, the cost of preparing and issuing the bond adds about
3% to the cost of the project (for items such as loan guarantee fees, origination fees, etc). This
cost is included in considering the cost of financing options for the project. With these
assumptions, the annual costs of debt servicing for a fully-bonded project is $132,140.
There are costs associated with government grants, but they are generally modest and vary with
the specific type of grant and granting agency used.
12 See ADNRʹs preliminary decision for the lease of state land to Kodiak Electric Association, Inc. for the
Pillar Mountain Wind Farm, ADL 229859, issued February 2009.
City of Tenakee Springs
Indian River Hydroelectric Project Feasibility Study Polarconsult Alaska, Inc.
NOVEMBER 2009 – FINAL REPORT 36
$0.00
$0.05
$0.10
$0.15
$0.20
$0.25
$0.30
$0.35
$0.40
$0.45
$0.50
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Percent of Capital Cost Provided by GrantsUtility Rate ($ per kWh)Utility Rate Requirement with Hydro Project
at Various Grant Funding Levels
Existing Utility Rate Requirement
(2004 - 2008 average)
Figure 5-1 presents the utility rates ($/kWh) needed to finance the project at various grant levels.
Lowest rates occur with 100 percent government grants (electric rates need only cover annual
operating costs), and highest rates occur with 100 percent commercial financing (electric rates
need to cover annual operating costs and debt service). Figure 5-1 reflects the full utility costs,
and has not been adjusted for PCE subsidies.
Figure 5-1: Electric Utility Rates for Different Project Grant Funding Levels
City of Tenakee Springs
Indian River Hydroelectric Project Feasibility Study Polarconsult Alaska, Inc.
NOVEMBER 2009 – FINAL REPORT 37
5.3 PROJECT REVENUES AND SAVINGS
Table 5-3 presents annual project revenues and savings achieved with the recommended hydro
project. These items are discussed in the following sections.
Table 5-3: Estimated Annual Project Revenues and Savings
Revenue Item Estimated Annual Value
Displaced Power Plant Fuel Costs
Diesel kWh Displaced by Hydro Project 392,200 kWh
Amount of Fuel Displaced by Hydro Project 31,400 gallons
Fuel Costs Displaced by Hydro Project (at $3.50 per gallon) $109,800
Fuel Displaced by Excess Energy
Gross Excess Energy Available from Hydro Project 446,800 kWh
Net Excess Hydro Energy Dispatched and Metered 1 347,000 kWh
Amount of Fuel Displaced by Excess Hydro Energy 2 13,000 gallons
Fuel Costs Displaced by Excess Hydro Energy (at $3.50 per gallon) $45,600
Revenue from Sale of Environmental Attributes on Voluntary Market
Annual kWh of energy from project 839,000 kWh
Percentage of available environmental attributes sold 100%
Sales Price for environmental attributes $0.01 per kWh
Revenue from Sale of Environmental Attributes on Voluntary Market $8,400
TOTAL ANNUAL REVENUES AND SAVINGS $163,800
Note 1: Assumes 90% utilization of excess energy, and 13.6% losses over TSEUD system.
Note 2: Assumes excess energy displaces oil used by space and water heating systems with an
average efficiency of 65%.
5.3.1 Fuel Displacement
Based on modeling results, the recommended hydro project will displace an average of 392,125
kWh annually that are currently generated with diesel fuel. Using TSEUD’s existing generation
efficiency of 12.5 kWh/gallon, this equals 31,370 gallons of displaced diesel annually. At a price
of $3.50 per gallon, this represents a direct annual savings of $109,800 to TSEUD.
5.3.2 Excess Energy
In addition to the diesel electric generation that the hydro displaces, it also generates an annual
average of 447,000 kWh of excess energy that is available for the community to use. For
economic analysis purposes, 10% of this gross excess energy is assumed to be consumed by the
hydro load governor system, and 90% is assumed to be made available to discretionary system
loads such as space heating and water heating uses. Of this 90%, 13.6% is assumed to be
consumed by losses on TSEUD’s distribution system. The balance (77.8% of gross excess energy
generation) is metered to TSEUD’s accounts. All of this excess energy is assumed to completely
displace heating fuel being consumed in boilers, furnaces, and hot water makers with an
City of Tenakee Springs
Indian River Hydroelectric Project Feasibility Study Polarconsult Alaska, Inc.
NOVEMBER 2009 – FINAL REPORT 38
average efficiency of 65%. With these assumptions, this excess energy displaces an average of
13,035 gallons of heating fuel annually. At $3.50 per gallon, this is worth $45,623 annually.
5.3.3 Environmental Attributes
As a small, low-impact, run-of-river hydroelectric project, this hydro project would have the
ability to market its environmental attributes nation-wide. The market for environmental
attributes is still developing, and as a result is subject to considerable uncertainty. There is
federal and state legislation pending that could influence this market, transforming it from the
existing patchwork of state compliance markets and national and regional voluntary markets
into a more uniform and regulated national market. A reasonable range for the value of the
environmental attributes from this project is $0.005 to 0.020 per kWh on the voluntary market,
equal to $4,200 to $16,800 annually.
Tenakee Springs has the potential to market its picturesque Alaska setting and the fisheries
enhancements on Indian River to command a premium for it environmental attributes. For the
economic analysis, they are valued at $0.010 per kWh, which equates to $8,400 of revenue
annually.
5.4 INDIRECT AND NON-MONETARY BENEFITS
The recommended hydroelectric project offers significant indirect and non-monetary benefits in
addition to direct economic benefits. These other benefits include:
¾ Reduced air pollution (NOx, SOx, particulates, and hydrocarbons) due to decreased
operation of the diesel power plant.
¾ Reduced noise when the diesel plant is turned off. Because the diesel power plant is
somewhat removed from the rest of the community, this is a minor benefit.
¾ Reduced risk of oil spills due to decreased throughput and handling of fuel.
¾ More stable energy prices. With the hydro, TSEUD’s electricity rates will be largely
insulated from increasingly volatile world oil prices.
¾ Secondary benefits arising from the availability of plentiful hydropower with a stable
price. This will increase the affordability of living and doing business in Tenakee
Springs, and will increase the long-term viability of the community. Secondary benefits
could include an increase in the population of school-age children, ensuring that school
enrollment exceeds district and state thresholds for state funding year-to-year.
¾ Economic multipliers due to the fact that a greater percentage of the utilityʹs revenues
will be retained in the local community for labor instead of paying external entities such
as fuel suppliers.
¾ Local training and experience with small hydroelectric projects. To the extent that locals
choose to be involved in construction, maintenance, and operation of the hydro, they
City of Tenakee Springs
Indian River Hydroelectric Project Feasibility Study Polarconsult Alaska, Inc.
NOVEMBER 2009 – FINAL REPORT 39
will learn a unique set of skills. These skills will become increasingly useful as Alaska in
general and southeast in particular continues to develop local hydropower resources.
5.5 LIFE-CYCLE COST AND BENEFIT–COST RATIO
Table 5-4 presents life cycle costs and benefit to cost ratio for the recommended project.
Table 5-4: Life Cycle Costs and Benefit-Cost Ratio
Item Estimate
PROJECT COSTS
Installed Cost of Project $2,590,000
Annual Operations Costs (50 years) $22,200
Debt Servicing (100% financed project, 30 years) $132,200
Project salvage value at year 50 $0
Total Annual Costs $154,400
PRESENT WORTH OF PROJECT COSTS $3,161,000
PROJECT REVENUES / SAVINGS
Avoided Utility Fuel Costs (50 years) $109,800
Avoided Fuel Costs from Use of Excess Energy (50 years) $45,600
Revenue from Environmental Attributes (50 years) $8,400
Total Annual Savings / Revenues $163,800
PRESENT WORTH OF PROJECT REVENUES / SAVINGS $4,215,000
BENEFIT TO COST RATIO 1.33
Notes:
A real discount rate of 3% is used for time value of money for all calculations.
City of Tenakee Springs
Indian River Hydroelectric Project Feasibility Study Polarconsult Alaska, Inc.
NOVEMBER 2009 – FINAL REPORT 40
5.6 SENSITIVITY ANALYSIS
Inputs to the economic analysis were varied to evaluate the effect they have on the projectʹs
economic feasibility. Inputs evaluated are summarized in Table 5-5. Results are discussed in
the following sections.
Table 5-5: Sensitivity Analysis of Key Project Economic Parameters
Parameter Base Value Range Considered
Range of
Resulting
Benefit-Cost
Ratio
Value for
Benefit-Cost
Ratio of 1.00
Capital Cost $2,590,000 +/- 25% 1.11 to 1.68
$3,650,000
(41% over cost
estimate)
Annual Operations Costs $22,200/yr +/- 50% 1.22 to 1.47
$63,000/yr
(284% over
cost estimate)
Real Financing Rate 1 3% 0 to 7% 0.90 to 1.86 6%
Cost of Avoided Fuel $3.50 per
gallon $1.50 to $5.50 0.62 to 2.02 $2.55/gal
Percent Utilization of
Excess Energy 90% 0% to 100% 0.97 to 1.37 6%
Environmental Attributes
Sales Price $0.01 per kWh $0.00 to $0.03 1.27 to 1.47 N/A
Note 1: The real financing rate is the nominal rate less the rate of inflation. So if the project is financed at
6%, and inflation over the life of the bonds averages 3%, then the real interest rate on the debt is
3%.
The project is most sensitive to two parameters:
¾ Avoided cost of fuel.
¾ Financing cost.
The project is sensitive to the price of fuel used for diesel generation and space heating. Under
the 100 percent debt-financed base scenario for the project, the benefit-cost ratio is 1.00 at a fuel
price in Tenakee Springs of $2.55 per gallon. TSEUD paid less than this price as recently as
2004.
While the long-term fuel cost is considered unlikely to be below $2.55 per gallon delivered in
Tenakee Springs, temporary decreases below this price are possible.
A 100 percent debt-financed project is not viable if real interest rates for project financing are
greater than 6 percent. Using a long-term inflation forecast of 3 percent, this equates to a 9
percent nominal interest rate. Government loan programs such as the State of Alaskaʹs Power
Project Fund offer rates well under 9 percent. Government grants would also help to lower this
threshold for the city.
City of Tenakee Springs
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NOVEMBER 2009 – FINAL REPORT 41
6.0 PERMITS
Permits required for the recommended project are summarized in Table 6-1. Permit
requirements and agency involvement are discussed in greater detail in the following sections.
Table 6-1: Major Permits Required for the Recommended Hydro Project
Agency / Entity Permit / Finding / Action Comments
Federal Energy
Regulatory
Commission
Finding of Non-Jurisdiction -
U.S. Army Corps of
Engineers
Wetlands Permit,
NWP 17 -
U.S. EPA Stormwater Pollution
Prevention Plan -
ADNR Coastal Zone
Program
Coastal Management
Consistency Review Starts after COE process
ADNR Property
Rights
Transfer / Lease / Easement
Authorizations -
ADNR Water Rights Water Use Permit /
Water Rights
Requires ‘possessory interest’ in property
before issuance.
ADFG Fish Habitat Permit Starts after Coastal Review
6.1 FEDERAL PERMITS
6.1.1 FERC
A hydropower development generally falls under the jurisdiction of the Federal Energy
Regulatory Commission (FERC) if it meets one of three criteria:
¾ Occupies in whole or part federal lands.
¾ Is located on navigable waters.
¾ Is connected to an interstate electrical grid.
If a project is under FERC jurisdiction, it must obtain a FERC license or exemption from FERC
licensing. Normally, all of the state and federal permits required for a FERC hydroelectric
project are obtained through the formal FERC licensing process. This process typically takes
three or more years to complete, and requires extensive consultations with resource agencies,
site investigations, and analysis.
The recommended project would not occupy federal lands or connect to an interstate power
grid. Indian River is not believed to meet navigability criteria, therefore this project is non-
jurisdictional.
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FERC jurisdiction is determined by filing a declaration of intention with FERC. If FERC concurs
that the project is non-jurisdictional and this finding is not contested, then FERC licensing is not
required for this project.
6.1.1.1 FERC Licensing
If FERC determines that the Indian River is navigable, then the City must proceed with the
FERC process to develop this project. In this event, it is recommended that the City pursue an
exemption from FERC licensing.
6.1.1.2 Exemptions from FERC Licensing
FERC regulations provide for eligible projects under 5 MW in capacity to be exempted from the
licensing process. The 5 MW exemption allows a project that utilizes a ʹnatural water featureʹ to
go through an abbreviated process that results in a permanent exemption from FERC licensing.
To use this exemption process:
¾ The project must utilize a ʹnatural water featureʹ.
¾ The project must own all lands and facilities other than federal lands.
6.1.2 U.S. Forest Service
No USFS permits are required for the proposed project. However, the USFS has substantial
investments in fish-passage structures on Indian River. Project design should be coordinated
with the USFS to insure that the functionality and integrity of these structures is preserved or
enhanced.
The USFS holds a lease with the state of Alaska for their fish ladder constructed at barrier 4 in
1998. The intake for the recommended project would be located adjacent to and possibly
integrated with the top of this fish ladder structure. Accordingly, the intake structure for the
hydro project will probably lie within the USFS’ fish ladder lease site. 13
6.1.3 U.S. Army Corps of Engineers Permits
The project intake and tailrace will be located within wetlands, therefore a wetlands permit
from the COE will be required. Other project features such as the power line may also be
located partially in wetlands. The project is likely eligible for a Nationwide Permit #17 for small
hydroelectric development.
13 ADNR was contacted to obtain an as-built of the fish ladder lease. They do not have as as-built in
their records. (September 15, 2009).
City of Tenakee Springs
Indian River Hydroelectric Project Feasibility Study Polarconsult Alaska, Inc.
NOVEMBER 2009 – FINAL REPORT 43
6.1.4 U.S. Environmental Protection Agency
A stormwater pollution prevention plan (SWPPP) will be required for project construction.
6.1.5 Federal Aviation Administration
The project is not located within five miles of any airport. The project will not have any features
likely to present a hazard to aviation. No FAA approvals are necessary.
6.2 STATE OF ALASKA PERMITS
6.2.1 Department of Natural Resources Permits
6.2.1.1 Coastal Zone Consistency Review
The recommended project is located within the State’s Coastal Zone. Coastal zone consistency
review will be required. This process is initiated by completing a coastal project questionnaire
and submitting it to ADNR’s Division of Coastal and Ocean Management (DCOM).
6.2.1.2 Land Authorizations
The project would occupy state land. Land easements or leases, or land purchase / transfer, will
be necessary to construct the project.
6.2.1.3 Tidelands Permits
Not applicable.
6.2.1.4 Material Sale Agreement
An existing quarry is located on state land about one mile down the logging road from the
intake / powerhouse access points. ADNR Mineral Order (MO) 1045 closed lands within
sections 15, 21, 22, and 23 to mining in 2006. MO 1045 included this quarry. It is unknown if
the state would reopen this quarry for material for the project. Alternate material sources could
be beach run or imported aggregates. Beach run aggregates would need to be washed before
used for concrete work to flush out chlorides. Local material sources would require a material
sale agreement from ADNR.
6.2.1.5 Water Use Permit / Water Rights
The project would need to obtain water rights from the ADNR.
City of Tenakee Springs
Indian River Hydroelectric Project Feasibility Study Polarconsult Alaska, Inc.
NOVEMBER 2009 – FINAL REPORT 44
6.2.2 Department of Fish and Game Permits
6.2.2.1 Fish Habitat Permit
The project would need to obtain a fish habitat permit from the ADFG.
6.2.3 Department of Transportation Permits
Not applicable.
6.2.4 Department of Environmental Conservation Permits
6.2.4.1 DEC Wastewater or Potable Water Permits
Not applicable.
6.2.4.2 Solid Waste Disposal Permit
It may be desirable to dispose of bulky inert construction wastes from the project in an on-site
monofill. This would require an ADEC monofill permit and approval of the land owner,
ADNR.
6.2.4.3 Air Quality Permit& Bulk Fuel Permit
Not applicable.
6.3 LOCAL PERMITS
The project is not located within the limits of a borough. The project is located with the city
limits of Tenakee Springs. No local permits or approvals are required.
City of Tenakee Springs
Indian River Hydroelectric Project Feasibility Study Polarconsult Alaska, Inc.
NOVEMBER 2009 – FINAL REPORT 45
7.0 ENVIRONMENTAL CONSIDERATIONS
7.1 THREATENED AND ENDANGERED SPECIES
The project is not located within any designated critical habitat areas for threatened or
endangered species.
7.2 FISHERIES AND WILDLIFE
Development of a hydroelectric project
at Indian River is not likely to have any
significant impact on wildlife in the
area.
Development of a hydroelectric project
at Indian River has the potential to
affect fish habitat and fish passage on
Indian River. The reach of Indian
River that would be dewatered by the
project is not good fish habitat. It is,
however, an important fish passage to
good habitat areas upstream. The
USFS has built a substantial fish ladder
at barrier 4 and step pools at barrier 5
to make it easier for salmon to reach
these upstream spawning and rearing areas.
USFS has determined that minimum flows necessary for the fish ladder at barrier 4 is 10 cfs. 14
The project would therefore need to maintain minimum flows at this ladder during critical fish
migration periods.
The project has the opportunity to improve function and monitoring capabilities at the fish
ladder. These opportunities include:
¾ Proper design of the intake structure can increase flow into the fish ladder at extreme
low flows, improving fish passage around barrier 4.
¾ The intake structure can incorporate a creek crossing, improving access to the fish ladder
for maintenance and monitoring.
14 If the hydro project intake is properly designed, a lesser minimum flow for the fish ladder may be
possible. See discussion of this issue at Section 3.2.3).
View of the top of the existing USFS fish ladder at barrier 4.
City of Tenakee Springs
Indian River Hydroelectric Project Feasibility Study Polarconsult Alaska, Inc.
NOVEMBER 2009 – FINAL REPORT 46
¾ The project will include communications to the intake site for head level control.
Communications bandwidth can be provided at modest additional cost for real-time
monitoring of data such as flow or fish counts at the fish ladder.
¾ If the project extends power to the intake site, it can be made available for improved fish
monitoring at the fish ladder.
7.3 WATER AND AIR QUALITY
By reducing the amount of diesel fuel burned in Tenakee Springs for electricity generation, this
project will tend to improve air quality by reducing local NOX, SOX, hydrocarbon, and
particulate emissions. If excess energy available from the project is dispatched to space or water
heating purposes, additional combustion of heating fuel and/or wood is possible, further
reducing local airborne emissions.
The project is a run-of-river project and does not store or detain water. As a result, the project
does not significantly change the physical or chemical properties of the water.
7.4 WETLAND AND PROTECTED AREAS
The project intake and tailrace structures will be located in wetlands (Indian River). In addition,
the penstock, project access trails, and power line to Tenakee Springs may cross wetlands and
involve some fill of wetlands.
These impacts are expected to be minimal and should not significantly affect the natural
environment.
7.5 ARCHAEOLOGICAL AND HISTORICAL RESOURCES
COE archeologists spent three man-days investigating the project area in the early 1980s
investigating the presence of archeological and historical resources. No new significant
resources were identified. 15 Two known cemeteries in the general vicinity of the project were
identified and determined to not be impacted by the project.
7.6 TELECOMMUNICATIONS AND AVIATION
None.
15 Appendix B – Tenakee Springs Cultural Resources Report. Small Hydropower and Related Purposes
Letter Report, COE, 1984.
City of Tenakee Springs
Indian River Hydroelectric Project Feasibility Study Polarconsult Alaska, Inc.
NOVEMBER 2009 – FINAL REPORT 47
7.7 VISUAL AND AESTHETIC RESOURCES
Due to the heavy old-growth forest cover in the project vicinity, the project would not be
prominently visible from any vantage point on land, at sea, or from the air. The project would
be visible principally on the ground standing on or near the project works. The construction
materials and methods proposed are considered to be consistent with and aesthetically
complementary to the natural setting of the project.
7.8 MITIGATION MEASURES
No mitigation measures are necessary or recommended.
City of Tenakee Springs
Indian River Hydroelectric Project Feasibility Study Polarconsult Alaska, Inc.
NOVEMBER 2009 – FINAL REPORT 48
8.0 CONCLUSIONS AND RECOMMENDATIONS
Based upon the analyses presented in this report, a hydroelectric project between the top of
barrier 4 and the bottom of barrier 2 is technically and economically feasible at Indian River.
The recommended hydro project is economically superior to continued diesel generation under
all likely scenarios.
The project has a benefit-cost ratio of 1.33 under the base economic assumptions. Benefit-cost is
most sensitive to fuel costs (BCR of 1.00 at $2.55/gallon) and project financing interest rates
(BCR of 1.00 at real 6%, nominal 9%). Government grants or low-interest loans can help to
reduce the communityʹs exposure to these factors and move forward with the project.
8.1 DEVELOPMENT PLAN & SCHEDULE
The next major steps to advance a hydro project on Indian River are:
1. Prepare and submit permit applications for the project.
2. Complete designs for the project.
3. Obtain all permits required for the project.
4. Secure construction funding.
5. Construction.
The longest potential lead times are securing the leases on state land. Depending on their
backlog and staffing levels, it takes ADNR up to three years to process a lease application. It is
recommended that the preparation and submittal of lease applications occur as soon as possible
to start this process. With the exception of the ADNR lease, it is expected that all permits for the
project could be issued in time for construction in 2011. The ADNR land lease could delay
project construction to 2012 or possibly 2013.
City of Tenakee Springs
Indian River Hydroelectric Project Feasibility Study Polarconsult Alaska, Inc.
NOVEMBER 2009 – FINAL REPORT 49
Figure 8-1: Project Development Schedule
2009 2010 2011 2012
ACTIVITY Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Feasibility Study
Prepare and File Permit Applications
FERC DOI
COE Wetlands Permit
ADNR Coastal Zone Consistency Review
ADNR Property Rights
ADNR Water Rights
ADFG Fish Habitat Permit
Process / Recieve Permit Authorizations
FERC DOI
COE Wetlands Permit
ADNR Coastal Zone Consistency Review
ADNR Property Rights (secure EEA)
ADNR Water Rights
ADFG Fish Habitat Permit
Project Design
Conceptual Design
100% Design
Construction Plan
Arrange Financing
Construction
Post Construction Activities
As-Built Survey
Finalize Lease Documents
APPENDIX A – COST ESTIMATES OF ALTERNATIVES
City of Tenakee Springs
Indian River Hydroelectric Project Feasibility Study Polarconsult Alaska, Inc.
NOVEMBER 2009 – FINAL REPORT A-1
APPENDIX A – COST ESTIMATES OF PROJECT ALTERNATIVES
Cost estimates were developed for the recommended project and alternative project
configurations. Tables A-1 through A-4 present economic data for all of the project
configurations considered in this study.
Table A-1: Estimated Installed Cost of Project Alternatives
Item 4 to 2
180 kW
4 to 2
120 kW
4 to 2
60 kW
4 to 1
120 kW
5 to 3
120 kW
5 to 2
120 kW
5 to 1
120 kW
Pre-Construction
Activities $208,000 $208,000 $198,000 $223,000 $268,000 $276,000 $288,000
Construction
Power Line $350,000 $342,000 $339,000 $461,000 $342,000 $342,000 $378,000
Powerhouse $576,000 $396,000 $259,000 $416,000 $416,000 $384,000 $394,000
Project Access $145,000 $145,000 $145,000 $145,000 $84,000 $128,000 $128,000
Penstock Sitework $485,000 $431,000 $419,000 $785,000 $721,000 $866,000 $675,000
Penstock Construction $138,000 $106,000 $94,000 $183,000 $161,000 $171,000 $211,000
Intake Structure $73,000 $52,000 $38,000 $72,000 $53,000 $50,000 $48,000
Construction
Equipment $144,000 $142,000 $83,000 $122,000 $89,000 $89,000 $105,000
Shipping $171,000 $137,000 $111,000 $180,000 $197,000 $214,000 $257,000
Direct Construction
Cost $2,082,000 $1,752,000 $1,490,000 $2,364,000 $2,062,000 $2,243,000 $2,195,000
Project Administration $115,000 $102,000 $93,000 $142,000 $134,000 $146,000 $136,000
Construction
Engineering $115,000 $102,000 $93,000 $142,000 $134,000 $146,000 $136,000
Contingency (20%) $416,000 $350,000 $298,000 $473,000 $412,000 $449,000 $439,000
Financing (3%) $88,000 $75,000 $65,000 $100,000 $90,000 $98,000 $96,000
Installed Cost $2,936,000 $2,590,000 $2,171,000 $3,344,000 $3,010,000 $3,260,000 $3,194,000
City of Tenakee Springs
Indian River Hydroelectric Project Feasibility Study Polarconsult Alaska, Inc.
NOVEMBER 2009 – FINAL REPORT A-2
Table A-2: Annual Project Costs for Project Alternatives
Cost Item 4 to 2
180 kW
4 to 2
120 kW
4 to 2
60 kW
4 to 1
120 kW
5 to 3
120 kW
5 to 2
120 kW
5 to 1
120 kW
Hydro Operations &
Maintenance $15,200 $15,200 $12,700 $17,000 $16,700 $18,100 $20,000
Diesel Operations and
Maintenance -$7,400 -$7,700 -$7,800 -$7,900 -$7,700 -$7,900 -$8,000
Hydro Repair &
Replacement $11,000 $10,800 $10,600 $12,800 $12,500 $14,100 $16,300
State Lease Royalties $4,300 $3,900 $3,000 $4,000 $3,900 $4,100 $4,200
Annual Project
Operations Costs $23,000 $22,200 $18,000 $26,000 $26,000 $28,000 $33,000
Debt Service (for 100%
financed project) $149,800 $132,100 $110,800 $170,600 $153,600 $166,300 $162,900
Total Annual Project
Costs $172,800 $154,400 $128,800 $196,600 $179,600 $194,300 $195,900
City of Tenakee Springs
Indian River Hydroelectric Project Feasibility Study Polarconsult Alaska, Inc.
NOVEMBER 2009 – FINAL REPORT A-3
Table A-3: Estimated Annual Revenues and Savings for Project Alternatives
Revenue Item 4 to 2
180 kW
4 to 2
120 kW
4 to 2
60 kW
4 to 1
120 kW
5 to 3
120 kW
5 to 2
120 kW
5 to 1
120 kW
SAVINGS FROM DISPLACED POWER PLANT FUEL
Diesel kWh Displaced by
Hydro Project (kWh) 378,000 392,200 399,000 403,000 395,000 407,000 412,000
Amount of Fuel Displaced by
Hydro Project (gallons) 30,000 31,400 32,000 32,000 32,000 33,000 33,000
Fuel Costs Displaced by Hydro
Project (at $3.50 per gallon) $106,000 $109,800 $112,000 $113,000 $111,000 $114,000 $115,000
SAVINGS FROM FUEL DISPLACED BY EXCESS HYDRO ENERGY
Gross Excess Energy Available
from Hydro Project (kWh) 791,000 446,800 72,000 482,000 454,000 494,000 512,000
Net Excess Hydro Energy
Dispatched and Metered 1 (kWh) 478,000 3 347,000 56,000 375,000 353,000 384,000 398,000
Amount of Fuel Displaced by
Excess Hydro Energy 2 (gal.) 17,900 13,000 2,000 14,000 13,000 14,000 15,000
Fuel Costs Displaced by Excess
Hydro Energy (at $3.50 per
gallon)
$63,000 $45,600 $7,000 $49,000 $46,000 $50,000 $52,000
REVENUE FROM SALE OF ENVIRONMENTAL ATTRIBUTES
Annual kWh of energy from
project 1,169,000 839,000 471,000 885,000 848,000 900,000 924,000
Revenue from Sale of
Environmental Attributes on
Voluntary Market
$11,700 $8,400 $4,700 $8,900 $8,500 $9,000 $9,200
TOTAL ANNUAL REVENUES
AND SAVINGS $180,700 $163,800 $124,000 $171,000 $165,000 $173,000 $177,000
Note 1: Assumes 90% utilization of excess energy, and 13.6% losses over TSEUD system.
Note 2: Assumes excess energy displaces oil used by space/water heating systems with an average efficiency of 65%.
Note 3: Assumes Tenakee Springs can only absorb 70% of excess energy from larger project vs. 90% for others.
City of Tenakee Springs
Indian River Hydroelectric Project Feasibility Study Polarconsult Alaska, Inc.
NOVEMBER 2009 – FINAL REPORT A-4
Table A-4: Life Cycle Costs and Benefit-Cost Ratios for Project Alternatives
Item 4 to 2
180 kW
4 to 2
120 kW
4 to 2
60 kW
4 to 1
120 kW
5 to 3
120 kW
5 to 2
120 kW
5 to 1
120 kW
PROJECT COSTS
Installed Cost of Project $2,936,000 $2,590,000 $2,171,000 $3,344,000 $3,010,000 $3,260,000 $3,194,000
Annual Operations Costs
(50 years) $23,000 $22,200 $18,000 $26,000 $26,000 $28,000 $33,000
Debt Servicing (100%
financed project, 30 years) $149,800 $132,100 $110,800 $170,600 $153,600 $166,300 $162,900
Project salvage value at
Year 50 $0 $0 $0 $0 $0 $0 $0
Total Annual Costs $172,800 $154,300 $128,800 $196,600 $179,600 $194,300 $195,900
PRESENT WORTH OF
PROJECT COSTS $3,527,000 $3,161,000 $2,646,000 $4,013,000 $3,666,000 $3,989,000 $4,031,000
PROJECT REVENUES / SAVINGS
Avoided Utility Fuel Costs
(50 years) $106,000 $109,800 $112,000 $113,000 $111,000 $114,000 $115,000
Avoided Fuel Costs from
Use of Excess Energy
(50 years)
$62,800 $45,600 $7,000 $49,000 $46,000 $50,000 $52,000
Revenue from
Environmental Attributes
(50 years)
$11,700 $8,400 $4,700 $8,900 $8,500 $9,000 $9,200
Total Annual Savings /
Revenues $180,400 $163,800 $124,000 $171,000 $165,000 $173,000 $177,000
PRESENT WORTH OF
PROJECT REVENUES /
SAVINGS
$4,642,000 $4,215,000 $3,184,000 $4,395,000 $4,254,000 $4,459,000 $4,552,000
BENEFIT TO COST
RATIO 1.32 1.33 1.20 1.10 1.16 1.12 1.13
Notes:
A real discount rate of 3% is used for the time value of money for all calculations.