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Burro Creek Hydro Project Study Final Report - Nov 2011 - REF Grant 2195400
ȱ BURROȱCREEKȱHYDROELECTRICȱFEASIBILITYȱSTUDYȱ FINALȱREPORTȱ ȱ NOVEMBERȱ2011ȱ ȱ ȱ ȱ ȱ PREPAREDȱFOR:ȱ BURROȱCREEKȱHOLDINGS,ȱLLCȱ POȱBOXȱ271ȱ SKAGWAY,ȱAKȱ99840ȱ ȱ ȱ ȱ PREPAREDȱBY:ȱ polarconsult alaska, inc. 1503 West 33rd Avenue, Suite 310 Anchorage, AK 99503ȱ ȱ AND:ȱ ȱ ȱ ͻͲͲͳǡͳʹ ǡͻͻͺʹͶȱ ȱ ȱ ȱ ȱ ȱȱ BurroȱCreekȱHoldings,ȱLLCȱ BurroȱCreekȱHydroelectricȱStudyȱȱ ȱ PolarconsultȱAlaska,ȱInc.ȱ ȱ Novemberȱ2011ȱ–ȱFinalȱReportȱ ȱ iȱ EXECUTIVEȱSUMMARYȱ Burroȱ Creekȱ Holdings,ȱ LLCȱ (BCH)ȱ receivedȱ aȱ grantȱ fromȱ theȱ Alaskaȱ Energyȱ Authorityȱ inȱ 2009ȱ toȱ performȱ aȱ feasibilityȱ studyȱ ofȱ upgradingȱ theȱ existingȱ 15Ȭkilowattȱ (kW)ȱ runȬofȬriverȱ hydroelectricȱ systemȱ onȱ Burroȱ Creek.ȱȱInȱ 2010,ȱ BCHȱ contractedȱ Southeastȱ Strategiesȱ andȱ Polarconsultȱ Alaska,ȱ Inc.ȱ toȱ prepareȱ aȱ feasibilityȱ studyȱ toȱ evaluateȱ hydroelectricȱ upgradeȱ options,ȱ developȱ estimatedȱ upgradeȱ costs,ȱ andȱ evaluateȱ theȱ marketȱ forȱ theȱ project’sȱ energyȱ inȱ theȱUpperȱLynnȱCanalȱregion.ȱȱThisȱreportȱpresentsȱtheȱfindingsȱofȱtheȱfeasibilityȱstudy.ȱ HydropowerȱResourceȱ Becauseȱ Burroȱ Creekȱ isȱ acrossȱ Lynnȱ Canalȱ fromȱ Skagway,ȱ theȱ existingȱ projectȱ producesȱ insufficientȱ energyȱ toȱ justifyȱ anȱ interconnectionȱ withȱ Skagway.ȱȱInstead,ȱ aȱ rangeȱ ofȱ newȱ largerȱ runȬofȬriverȱ projectsȱ atȱ Burroȱ Creekȱ wereȱ investigatedȱ inȱ thisȱ study.ȱȱStorageȱ projectsȱ wereȱ alsoȱ considered,ȱ butȱ theȱ topographyȱ ofȱ theȱ Burroȱ Creekȱ valleyȱ isȱ notȱ suitableȱ forȱ costȬeffectiveȱ constructionȱ ofȱ reservoirsȱ ofȱ significantȱ capacityȱ forȱ theȱ projectsȱ considered.ȱȱTheȱ runȬofȬriverȱ configurationsȱ consideredȱ inȱ thisȱ studyȱ rangeȱ inȱ installedȱ capacityȱ fromȱ 430ȱ kilowattsȱ upȱ toȱ 7.3ȱ megawattsȱ (MW).ȱȱThisȱ rangeȱ isȱ developedȱ byȱ consideringȱ differentȱ designȱ flowsȱ andȱ differentȱ elevationsȱ forȱ diversionȱ sitesȱ onȱ Burroȱ Creek.ȱȱTheȱ figureȱ belowȱ showsȱ theȱ locationȱ ofȱ BCHȱ propertyȱrelativeȱtoȱSkagwayȱandȱtheȱdiversionȱsitesȱconsideredȱinȱthisȱstudy.ȱ Projectȱconfigurationsȱwithȱaȱcapacityȱofȱupȱtoȱ2.2ȱMWȱareȱlocatedȱwhollyȱonȱtheȱBCHȱproperty.ȱȱ Projectsȱ withȱ largerȱ capacitiesȱ areȱ partiallyȱ locatedȱ onȱ Federalȱ landȱ upstreamȱ ofȱ BCHȱ property.ȱȱ Allȱ projectȱ configurationsȱ requireȱ aȱ submarineȱ cableȱ fromȱ Burroȱ Creekȱ toȱ Skagwayȱ toȱ deliverȱ powerȱ toȱ potentialȱ markets.ȱȱTheȱ mostlyȱ fixedȱ costȱ ofȱ thisȱ submarineȱ cableȱ makesȱ theȱ smallerȱ projectȱ configurationsȱ lessȱ competitiveȱ thanȱ largerȱ configurationsȱ sinceȱ theȱ largerȱ projectsȱ canȱ spreadȱ thisȱ fixedȱ cableȱ costȱ overȱ increasedȱ energyȱ sales.ȱȱThisȱ enablesȱ theȱ largerȱ projectȱ configurationsȱ toȱ beȱ profitableȱ atȱ aȱ lowerȱ $/kWhȱsalesȱprice.ȱ MarketȱForȱEnergyȱ Theȱ marketȱ forȱ energyȱ fromȱ aȱ Burroȱ Creekȱ projectȱ isȱ notȱ wellȱ definedȱ atȱ thisȱ time.ȱȱTheȱ amountȱ andȱ seasonalȱ availabilityȱ ofȱ energyȱ fromȱ Burroȱ Creekȱ doesȱ notȱ meshȱ wellȱ withȱ theȱ needsȱ ofȱ BurroȱCreekȱHoldings,ȱLLCȱ BurroȱCreekȱHydroelectricȱStudyȱȱ ȱ PolarconsultȱAlaska,ȱInc.ȱ ȱ Novemberȱ2011ȱ–ȱFinalȱReportȱ ȱ iiȱ existingȱ marketsȱ inȱ theȱ Upperȱ Lynnȱ Canalȱ region.ȱȱExistingȱ marketsȱ includeȱ Hainesȱ andȱ Skagway,ȱ servedȱ byȱ Alaskaȱ Powerȱ Companyȱ (APC)ȱ (aȱ subsidiaryȱ ofȱ Alaskaȱ Powerȱ andȱ Telephone,ȱInc.ȱȱ(AP&T)),ȱandȱtheȱChilkatȱValleyȱcommunitiesȱservedȱbyȱInsideȱPassageȱElectricȱ Cooperative,ȱInc.ȱȱ(IPEC).ȱȱTheseȱareȱsummarizedȱbelow.ȱ ¾Possibleȱ salesȱ ofȱ upȱ toȱ 240,000ȱ kWhȱ annuallyȱ toȱ IPECȱ forȱ resaleȱ toȱ customersȱ inȱ Klukwanȱ andȱtheȱChilkatȱValleyȱnearȱHaines.ȱȱȱ ¾Possibleȱ salesȱ upȱ toȱ 500,000ȱ kWhȱ annuallyȱ toȱ APCȱ toȱ displaceȱ energyȱ APCȱ currentlyȱ generatesȱ withȱ dieselȱ fuel.ȱȱMostȱ ofȱ theseȱ salesȱ wouldȱ occurȱ inȱ lateȱ winter,ȱ whenȱ APC’sȱ hydroelectricȱfacilitiesȱareȱnotȱoperating,ȱorȱareȱoperatingȱatȱreducedȱcapacity.ȱȱȱ ¾ȱTheȱ Regulatoryȱ Commissionȱ ofȱ Alaskaȱ allowsȱ independentȱ powerȱ producersȱ suchȱ asȱ BCHȱ toȱsellȱpowerȱtoȱbusinessesȱheldȱinȱcommonȱwithoutȱtheȱpowerȱproducerȱhavingȱtoȱbecomeȱaȱ certifiedȱ utility.ȱȱBusinessesȱ heldȱ inȱ commonȱ currentlyȱ useȱ aboutȱ 110,000ȱ kWhȱ ofȱ powerȱ annually.ȱ Byȱ themselves,ȱ theseȱ existingȱ marketsȱ areȱ tooȱ smallȱ toȱ justifyȱ aȱ newȱ projectȱ atȱ Burroȱ Creek.ȱȱ Projectedȱ growthȱ trendsȱ inȱ theseȱ marketsȱ areȱ slightlyȱ negative,ȱ andȱ thusȱ notȱ favorableȱ forȱ developmentȱ ofȱ Burroȱ Creek.ȱȱHowever,ȱ theseȱ marketsȱ mayȱ proveȱ viableȱ inȱ combinationȱ withȱ theȱpotentialȱmarketȱopportunitiesȱdiscussedȱbelow,ȱandȱwarrantȱfutureȱconsideration.ȱ Threeȱ potentialȱ futureȱ marketȱ opportunitiesȱ wereȱ identifiedȱ thatȱ couldȱ beȱ viableȱ market(s)ȱ forȱ Burroȱ Creekȱ energy.ȱȱTheseȱ marketsȱ willȱ dependȱ onȱ futureȱ developmentsȱ andȱ warrantȱ continuedȱattention:ȱ ¾ȱ Salesȱ toȱ Yukonȱ Territory.ȱȱTheȱ Yukonȱ Territoryȱ isȱ experiencingȱ aȱ boomȱ inȱ miningȱ activity,ȱ andȱtheȱcrownȱutilityȱ (Yukonȱ Energy)ȱ isȱactivelyȱ seekingȱ additionalȱ capacityȱtoȱ meetȱ miningȱ demand.ȱȱYukonȱEnergyȱwouldȱconsiderȱextendingȱitsȱtransmissionȱlineȱtoȱtheȱU.S.ȱborderȱtoȱ connectȱ withȱ theȱ Upperȱ Lynnȱ Canalȱ gridȱ ifȱ Burroȱ Creekȱ orȱ otherȱ hydroelectricȱ projectsȱ offerȱ sufficientȱ energyȱ atȱ aȱ suitableȱ price.ȱȱAPC’sȱ existingȱ linesȱ endȱ approximatelyȱ 7ȱ milesȱ fromȱ theȱborder.ȱȱItȱappearsȱBurroȱCreekȱcanȱmeetȱYukonȱEnergy’sȱcriteriaȱforȱaȱlineȱextension.ȱȱȱȱ ¾Salesȱ toȱ APCȱ duringȱ theȱ summerȱ seasonȱ ifȱ APCȱ developsȱ infrastructureȱ toȱ provideȱ shoreȱ powerȱ toȱ cruiseȱ shipsȱ dockedȱ inȱ Skagway.ȱȱȱThisȱ opportunityȱ mayȱ beȱ dependantȱ onȱ theȱ developmentȱ ofȱ additionalȱ hydroelectricȱ powerȱ inȱ theȱ region,ȱ asȱ theȱ combinedȱ outputȱ ofȱ Burroȱ Creekȱ andȱ theȱ excessȱ powerȱ currentlyȱ availableȱ fromȱ APCȱ wouldȱ notȱ beȱ enoughȱ toȱ meetȱdemandȱfromȱtheȱcruiseȱships.ȱȱȱ ¾SalesȱtoȱAPCȱifȱtheȱPalmerȱminingȱprospectȱnorthȱofȱHainesȱisȱdeveloped.ȱ Servingȱoneȱofȱtheseȱthreeȱfutureȱmarketsȱisȱconsideredȱtheȱbestȱopportunityȱforȱaȱnewȱprojectȱatȱ Burroȱ Creek.ȱȱDevelopmentȱ ofȱ additionalȱ hydropowerȱ resourcesȱ inȱ theȱ regionȱ willȱ stronglyȱ influenceȱwhetherȱdemandȱforȱtheȱfullȬyearȱoutputȱofȱBurroȱCreekȱpowerȱwillȱmaterialize.ȱȱȱ ProjectȱFeasibilityȱ Thisȱ studyȱ identifiedȱ severalȱ projectȱ configurationsȱ thatȱ appearȱ toȱ beȱ compatibleȱ withȱ potentialȱ futureȱ marketsȱ inȱ theȱ Upperȱ Lynnȱ Canalȱ regionȱ withȱ regardȱ toȱ estimatedȱ energyȱ priceȱ andȱ BurroȱCreekȱHoldings,ȱLLCȱ BurroȱCreekȱHydroelectricȱStudyȱȱ ȱ PolarconsultȱAlaska,ȱInc.ȱ ȱ Novemberȱ2011ȱ–ȱFinalȱReportȱ ȱ iiiȱ energyȱ output.ȱȱAtȱ thisȱ time,ȱ theȱ preferredȱ projectȱ configurationȱ isȱ notȱ known,ȱ becauseȱ itȱ willȱ dependȱ onȱ theȱ needȱ forȱ powerȱ fromȱ theȱ marketȱ andȱ furtherȱ studyȱ toȱ betterȱ refineȱ developmentȱ costs.ȱȱTableȱ ESȬ1ȱ summarizesȱ theȱ projectȱ configurationsȱ thatȱ haveȱ promisingȱ estimatedȱ energyȱ pricesȱ andȱ mayȱ reasonablyȱ matchȱ futureȱ marketȱ demand.ȱȱDetailsȱ forȱ allȱ projectȱ configurations,ȱ funding,ȱandȱmarketȱscenariosȱareȱpresentedȱinȱAppendixȱHȱofȱthisȱreport.ȱȱȱ Twoȱ otherȱ majorȱ variablesȱ willȱ influenceȱ theȱ energyȱ salesȱ priceȱ fromȱ aȱ projectȱ atȱ Burroȱ Creek.ȱȱ Theseȱvariablesȱareȱ(1)ȱtheȱpotentialȱuseȱofȱgrantȱfundsȱandȱ(2)ȱhowȱmuchȱofȱtheȱproject’sȱoutputȱ willȱ beȱ sold.ȱȱThisȱ studyȱ consideredȱ twoȱ grantȱ fundingȱ scenariosȱ forȱ allȱ projectȱ configurations:ȱȱ noȱ grantȱ funding,ȱ andȱ 50%ȱ grantȱ fundingȱ upȱ toȱ aȱ capȱ ofȱ $8.5ȱ millionȱ inȱ grants.ȱȱThisȱ studyȱ consideredȱ twoȱ energyȱ salesȱ scenarios:ȱȱsaleȱ ofȱ aȱ project’sȱ fullȱ output,ȱ andȱ saleȱ ofȱ onlyȱ 80%ȱ ofȱ aȱ project’sȱpotentialȱoutput.ȱȱTheseȱscenariosȱareȱpresentedȱinȱTableȱESȬ1.ȱȱȱȱ Basedȱ onȱ currentlyȱ availableȱ information,ȱ aȱ connectionȱ toȱ theȱ Canadianȱ powerȱ grid,ȱ and/orȱ developmentȱ ofȱ theȱ mineȱ northȱ ofȱ Hainesȱ couldȱ provideȱ aȱ yearȬroundȱ marketȱ forȱ Burroȱ Creekȱ energy.ȱȱAȱ combinationȱ ofȱ existingȱ marketȱ opportunitiesȱ andȱ providingȱ shoreȱ powerȱ toȱ cruiseȱ shipsȱinȱSkagwayȱcouldȱresultȱinȱonlyȱpartialȬyearȱdemandȱforȱBurroȱCreekȱenergy.ȱȱȱ Inȱmarketȱsituationsȱwhereȱ powerȱisȱnotȱsoldȱdirectlyȱtoȱAPC,ȱBurroȱCreekȱwouldȱlikelyȱhaveȱtoȱ payȱ aȱ chargeȱ toȱ APCȱ (calledȱ aȱ “wheeling”ȱ charge)ȱ ofȱ aboutȱ $0.02ȱ perȱ kWhȱ forȱ useȱ ofȱ APC’sȱ electricȱlines.ȱȱThatȱwheelingȱchargeȱisȱfiguredȱintoȱtheȱpowerȱsalesȱratesȱinȱTableȱESȬ1.ȱ OtherȱProposedȱProjectȱinȱtheȱRegionȱ Severalȱ futureȱ hydroelectricȱ projectsȱ areȱ underȱ considerationȱ inȱ theȱ Haines/Skagwayȱ area.ȱȱ Connellyȱ Lakeȱ isȱ aȱ storageȱ facilityȱ nearȱ Hainesȱ withȱ aȱ 10ȱ toȱ 15ȱ MWȱ capacityȱ potential.ȱȱThatȱ projectȱ couldȱ beȱ completedȱ byȱ 2016.ȱȱSchubeeȱ Lakeȱ isȱ aȱ storageȱ facilityȱ acrossȱ Lynnȱ Canalȱ fromȱ Hainesȱ withȱ aȱ 3ȱ toȱ 5ȱ MWȱ potentialȱ capacity,ȱ whichȱ couldȱ beȱ completedȱbyȱ 2019.ȱȱItȱ isȱlikelyȱ thatȱ onlyȱ oneȱ ofȱ thoseȱ twoȱ facilitiesȱ willȱ beȱ built.ȱȱAȱ smallerȱ runȬofȬriverȱ systemȱ atȱWalkerȱ Lakeȱ nearȱ Hainesȱ hasȱ beenȱ considered,ȱ butȱ itsȱ 1ȱ MWȱ capacityȱ potentialȱ mayȱ notȱ warrantȱ development.ȱȱ AnyȱofȱtheseȱfacilitiesȱwillȱhelpȱcreateȱtheȱadditionalȱsystemȱcapacityȱneededȱforȱAPCȱtoȱdevelopȱ shoresideȱ electricalȱ connectionsȱ forȱ cruiseȱ shipsȱ inȱ Skagway,ȱ thusȱ creatingȱ aȱ marketȱ forȱ Burroȱ Creekȱpowerȱinȱtheȱsummerȱseason.ȱ Nearȱ Skagway,ȱ aȱ 25ȱ toȱ 50ȱ MWȱ potentialȱ capacityȱ storageȱ facilityȱ atȱ Westȱ Creekȱ isȱ beingȱ considered,ȱandȱcouldȱbeȱcompletedȱbyȱ2018.ȱȱPlansȱforȱthisȱfacilityȱincludeȱanȱintertieȱacrossȱtheȱ Canadianȱ borderȱ toȱ connectȱ toȱ theȱ Canadianȱ powerȱ grid.ȱȱOnceȱ anȱ intertieȱ isȱ developed,ȱ virtuallyȱ allȱ theȱ powerȱ producedȱ inȱ theȱ Haines/Skagwayȱ areaȱ couldȱ beȱ soldȱ toȱ theȱ Canadianȱ grid.ȱ BurroȱCreekȱHoldings,ȱLLCȱ BurroȱCreekȱHydroelectricȱStudyȱȱ ȱPolarconsultȱAlaska,ȱInc.ȱȱNovemberȱ2011ȱ–ȱFinalȱReportȱȱivȱTableȱESȬ1:ȱȱProjectȱConfigurations,ȱFundingȱScenarios,ȱandȱSalesȱScenariosȱwithȱLowestȱEstimatedȱPowerȱSalesȱRatesȱȱSource:ȱPolarconsultȱAlaska,ȱInc.,ȱOctoberȱ2011.ȱ*ȱȱTheȱestimatedȱsalesȱpriceȱforȱfullȱsalesȱscenariosȱincludesȱaȱ$0.02/kWhȱwheelingȱchargeȱforȱuseȱofȱAPCȱtransmissionȱandȱdistributionȱsystemȱtoȱdeliverȱBurroȱCreekȱenergyȱtoȱmarket.ȱȱ1:ȱȱTheȱconfigurationȱcodesȱsuchȱasȱ‘3DȬ70’ȱareȱdefinedȱas:ȱtheȱnumberȱ(1ȱ–ȱ5)ȱisȱtheȱdiversionȱlocation,ȱtheȱletterȱ(Aȱ–ȱD)ȱisȱtheȱpowerhouseȱsite,ȱandȱtheȱnumberȱafterȱtheȱhyphenȱisȱtheȱdesignȱflowȱinȱcubicȱfeetȱperȱsecond.ȱ2:ȱȱFullȱsalesȱassumesȱthatȱallȱofȱtheȱnetȱoutputȱofȱtheȱprojectȱisȱsold.ȱȱPartialȱsalesȱassumesȱthatȱallȱofȱtheȱnetȱoutputȱofȱtheȱprojectȱfromȱAprilȱ1stȱthroughȱSeptemberȱ30thȱ(orȱanȱequivalentȱamountȱofȱenergyȱdistributedȱthroughoutȱtheȱyear)ȱisȱsold.ȱ3:ȱȱUpȱtoȱaȱmaximumȱofȱ$8,500,000ȱinȱgrantȱfunding.ȱProjectȱConfigurationȱ1ȱ1DȬ70ȱ1DȬ70ȱ2DȬ70ȱ2DȬ70ȱ3DȬ70ȱ3DȬ70ȱ1DȬ110ȱ1DȬ110ȱ2DȬ110ȱ2DȬ110ȱ3DȬ110ȱ3DȬ110ȱAmountȱofȱProjectȱOutputȱSoldȱ2ȱFullȱSalesȱPartialȱSalesȱFullȱSalesȱPartialȱSalesȱFullȱSalesȱPartialȱSalesȱFullȱSalesȱPartialȱSalesȱFullȱSalesȱPartialȱSalesȱFullȱSalesȱPartialȱSalesȱProjectȱDesignȱFlowȱȱ(cubicȱfeetȱperȱsecond)ȱ70ȱ110ȱProjectȱHeadȱ(feet)ȱ1,130ȱgrossȱ1,030ȱnetȱ970ȱgrossȱ880ȱnetȱ770ȱgrossȱ710ȱnetȱ1,130ȱgrossȱ1,030ȱnetȱ970ȱgrossȱ880ȱnetȱ770ȱgrossȱ710ȱnetȱPenstockȱLengthȱandȱDiameterȱ12,600ȱfeetȱ36Ȭinchȱ10,300ȱfeetȱ36Ȭinchȱ7,600ȱfeetȱ36Ȭinchȱ12,600ȱfeetȱ42Ȭinchȱ10,300ȱfeetȱ42Ȭinchȱ7,600ȱfeetȱ42ȬinchȱInstalledȱHydroelectricȱCapacityȱ(kilowatts,ȱkW)ȱ4,400ȱ3,800ȱ3,400ȱ7,300ȱ6,500ȱ5,250ȱEstimatedȱTotalȱCapitalȱCostȱȱ(2011$,ȱmillions)ȱ$17.2ȱMȱ$13.9ȱMȱ$11.1ȱMȱ$21.1ȱMȱ$16.8ȱMȱ$13.8ȱMȱExpectedȱAnnualȱEnergyȱSalesȱ(megawattȬhours,ȱMWh)ȱ17,943ȱ13,981ȱ15,935ȱ12,340ȱ13,127ȱ10,074ȱ20,581ȱ16,672ȱ18,798ȱ15,172ȱ15,915ȱ12,747ȱEstimatedȱEnergyȱSalesȱPrice,ȱNoȱGrantsȱ($ȱperȱkWh)ȱ$0.151*ȱ$0.165ȱ$0.140*ȱ$0.152ȱ$0.138*ȱ$0.150ȱ$0.159*ȱ$0.169ȱ$0.143*ȱ$0.149ȱ$0.140*ȱ$0.146ȱEstimatedȱEnergyȱSalesȱPrice,ȱwithȱGrantsȱforȱ50%ȱofȱDevelopmentȱCostȱ3ȱȱ($ȱperȱkWh)ȱ$0.102*ȱ$0.102ȱ$0.095*ȱ$0.094ȱ$0.0938ȱ$0.093ȱ$0.113*ȱ$0.111ȱ$0.097*ȱ$0.092ȱ$0.095*ȱ$0.090ȱ BurroȱCreekȱHoldings,ȱLLCȱ BurroȱCreekȱHydroelectricȱStudyȱȱ ȱ PolarconsultȱAlaska,ȱInc.ȱ ȱ Novemberȱ2011ȱ–ȱFinalȱReportȱ ȱ vȱ Recommendationsȱ Aȱ projectȱatȱ BurroȱCreekȱisȱ estimatedȱ toȱtakeȱ fiveȱ yearsȱtoȱcompleteȱonceȱaȱ viableȱmarketȱ forȱ theȱ projectȱ isȱ secured.ȱȱTheȱ followingȱ actionsȱ areȱ recommendedȱ toȱ continueȱ advancingȱ aȱ hydroȱ projectȱatȱBurroȱCreek:ȱ ¾Contactȱ theȱ Regulatoryȱ Commissionȱ ofȱ Alaskaȱ (RCA)ȱ toȱ determineȱ howȱ bestȱ toȱ moveȱ forward.ȱȱTheȱ RCAȱ governsȱ salesȱ ofȱ powerȱ inȱ Alaska,ȱ andȱ itȱ isȱ importantȱ toȱ understandȱ theȱconditionsȱ underȱwhichȱaȱcompanyȱ canȱsellȱpowerȱ toȱ variousȱ customers.ȱȱInȱ general,ȱ anȱ independentȱ powerȱ producerȱ suchȱ asȱ Burroȱ Creekȱ cannotȱ sellȱ toȱ moreȱ thanȱ 10ȱ customersȱ orȱ overȱ $50,000ȱ worthȱ ofȱ powerȱ perȱ yearȱ withoutȱ becomingȱ aȱ certifiedȱ utility.ȱȱ Inȱ addition,ȱ RCAȱ generallyȱ willȱ notȱ allowȱ twoȱ certifiedȱ utilitiesȱ withinȱ oneȱ serviceȱ areaȱȱ However,ȱ theȱ RCAȱ Commissionersȱ haveȱ theȱ finalȱ sayȱ onȱ suchȱ projects,ȱ andȱ canȱ makeȱ exceptionsȱ toȱ theirȱ regulationsȱ asȱ theyȱ determineȱ isȱ inȱ theȱ publicȱ interest.ȱȱAppendixȱ Fȱ containsȱtheȱAlaskaȱStatuteȱlanguageȱthatȱmayȱbeȱpertinentȱtoȱthisȱproject.ȱȱȱ ¾ContinueȱstreamȱgaugingȱatȱBurroȱCreekȱtoȱcharacterizeȱtheȱresourceȱpotential.ȱ ¾Monitorȱ futureȱ landȱ managementȱ decisionsȱ forȱ theȱ BLMȱ landȱ westȱ ofȱ Burroȱ Creekȱ toȱ insureȱtheȱlandȱremainsȱopenȱtoȱhydropowerȱdevelopment.ȱȱȱ ¾Maintainȱ Burroȱ Creekȱ asȱ aȱ generationȱ resourceȱ inȱ regionalȱ energyȱ planningȱ documents,ȱ suchȱasȱtheȱSoutheastȱAlaskaȱIntegratedȱResourceȱPlan,ȱcurrentlyȱunderȱdevelopmentȱbyȱ theȱAlaskaȱEnergyȱAuthorityȱ(AEA).ȱ ¾Contactȱ Yukonȱ Energyȱ toȱ discussȱ theȱ possibleȱ extensionȱ ofȱ itsȱ powerȱ transmissionȱ lineȱ southȱtoȱtheȱUpperȱLynnȱCanalȱsystem,ȱandȱaȱpossibleȱpowerȱpurchaseȱagreement.ȱ ¾ContactȱtheȱdevelopersȱofȱtheȱPalmerȱMineȱtoȱmonitorȱtheȱprogressȱofȱthatȱproject,ȱandȱifȱ andȱwhenȱdevelopmentȱisȱassured,ȱtoȱdiscussȱpossibleȱpowerȱpurchaseȱagreements.ȱ ¾Contactȱ APCȱ toȱ discussȱ theȱ conditionsȱ underȱ whichȱ theyȱ mayȱ beȱ willingȱ toȱ purchaseȱ wholesaleȱpowerȱfromȱBCH.ȱ ¾Contactȱ IPECȱ toȱ discussȱ aȱ possibleȱ powerȱ purchaseȱ agreement,ȱ keepingȱ inȱ mindȱ thatȱ otherȱmarketȱopportunitiesȱmayȱneedȱtoȱexistȱinȱorderȱtoȱmakeȱthisȱmarketȱviable.ȱȱȱ ¾Contactȱ possibleȱ fundingȱ sourcesȱ toȱ identifyȱ grantsȱ andȱ loanȱ programsȱ thatȱ mayȱ reduceȱ theȱcostȱofȱenergyȱfromȱtheȱBurroȱCreekȱproject.ȱ ȱ ȱ ȱȱȱ !!"# $% &'(#(&'& ! &$()*&(! (++*&,$(#'- . ,)$(''&$)'/'(+'&(&(!0 ! - +$1'&,)(($&*&' ! " # "# # # 0 (*()$'(++')&( 0 $ ')' ')2" +)#3*$' ')2" (&(3$ ')2" ,)$((3,)& ')2)" $'(*$')&), ')2'" '/$(+'&()'$&( ')2#" '$+&&3#($+&( ')23" &' , ')2 " &(&'&+&')#'$( ')2" $(,+)&'$+((3, ')24" !56 $'($&(($3*$$($''1 ,)$(''&$$(4'& ')21" '$'/'7(++'&*& ($$'(')($$'()'' 7& ,*1(''$3, BurroȱCreekȱHoldings,ȱLLCȱ BurroȱCreekȱHydroelectricȱStudyȱȱ ȱ PolarconsultȱAlaska,ȱInc.ȱ ȱ Novemberȱ2011ȱ–ȱFinalȱReportȱ ȱ viiȱ LISTȱOFȱFIGURESȱ Figureȱ2Ȭ1:ȱȱHaines/SkagwayȱModerateȱElectricalȱDemandȱForecast,ȱ2012ȱtoȱ2062ȱ.......................ȱ14 Figureȱ3Ȭ1:ȱȱEstimatedȱAverageȱAnnualȱNetȱOutputȱofȱProjectȱ3DȬ70ȱ.............................................ȱ17 Figureȱ5Ȭ1:ȱȱProjectȱDevelopmentȱScheduleȱ..........................................................................................ȱ26 FigureȱAȬ1:ȱȱProjectȱOverviewȱandȱLocationȱMapȱ.............................................................................ȱAȬ1 FigureȱAȬ2:ȱȱPotentialȱDiversionȱSitesȱandȱDrainageȱBasinsȱ............................................................ȱAȬ2 FigureȱAȬ3:ȱȱMapȱofȱProjectȱConfigurationsȱonȱUSSȱ1560ȱ................................................................ȱAȬ3 FigureȱAȬ4:ȱMapȱofȱProjectȱConfigurationsȱUsingȱFederalȱLandsȱ...................................................ȱAȬ4 FigureȱAȬ5:ȱMapȱofȱTransmissionȱRoutesȱ...........................................................................................ȱAȬ5 PhotographȱBȬ1:ȱȱBurroȱCreekȱSiteȱfromȱLynnȱCanalȱ........................................................................ȱBȬ1 PhotographȱBȬ2:ȱȱBurroȱCreekȱWaterfall,ȱLookingȱUpstreamȱ..........................................................ȱBȬ1 PhotographȱBȬ3:ȱȱBurroȱCreekȱGaugingȱStation,ȱLookingȱDownstreamȱ........................................ȱBȬ1 PhotographȱBȬ4:ȱȱExistingȱBurroȱCreekȱIntake,ȱLookingȱUpstreamȱ................................................ȱBȬ2 PhotographȱBȬ5:ȱȱExistingȱBurroȱCreekȱIntakeȱScreeningȱBoxȱ.........................................................ȱBȬ2 PhotographȱBȬ6:ȱȱExistingȱBurroȱCreekȱIntakeȱ...................................................................................ȱBȬ2 PhotographȱBȬ7:ȱȱBurroȱCreekȱfromȱSkagwayȱ....................................................................................ȱBȬ3 PhotographȱBȬ8:ȱȱBurroȱCreekȱGaugingȱStationȱ.................................................................................ȱBȬ4 PhotographȱBȬ9:ȱȱTypicalȱTerrainȱandȱVegetationȱinȱProjectȱAreaȱ..................................................ȱBȬ5 PhotographȱBȬ10:ȱȱExistingȱPenstockȱ...................................................................................................ȱBȬ5 PhotographȱBȬ11:ȱȱExistingȱPenstockȱ...................................................................................................ȱBȬ6 PhotographȱBȬ12:ȱȱExistingȱPenstockȱ...................................................................................................ȱBȬ6 PhotographȱBȬ13:ȱȱExistingȱPowerhouseȱ.............................................................................................ȱBȬ6 PhotographȱBȬ14:ȱȱExistingȱTurbineȱandȱGeneratorȱ..........................................................................ȱBȬ7 PhotographȱBȬ15:ȱȱBurroȱCreekȱatȱUSSȱ1560ȱPropertyȱLineȱ.............................................................ȱBȬ7 FigureȱCȬ1:ȱȱBurroȱCreekȱStageȱDataȱ...................................................................................................ȱCȬ2 ȱFigureȱCȬ2:ȱȱModelȱUsedȱforȱCreekȱSectionȱatȱBurroȱCreekȱ............................................................ȱCȬ4 FigureȱCȬ3:ȱȱBurroȱCreekȱStreamȱGaugeȱRatingȱCurveȱ.....................................................................ȱCȬ4 FigureȱCȬ4:ȱȱBurroȱCreekȱHydrographȱ................................................................................................ȱCȬ5 FigureȱCȬ5:ȱȱBurroȱCreekȱandȱTaiyaȱRiverȱFlowȱDataȱandȱModelsȱ.................................................ȱCȬ8 FigureȱCȬ6:ȱȱExtendedȱBurroȱCreekȱRecordȱUsingȱTaiyaȱRiverȱFlowȱModelȱ.................................ȱCȬ9 FigureȱCȬ7:ȱȱDailyȱFlowȱStatisticsȱforȱExtendedȱBurroȱCreekȱFlowȱRecordȱ.................................ȱCȬ10 BurroȱCreekȱHoldings,ȱLLCȱ BurroȱCreekȱHydroelectricȱStudyȱȱ ȱ PolarconsultȱAlaska,ȱInc.ȱ ȱ Novemberȱ2011ȱ–ȱFinalȱReportȱ ȱ viiiȱ LISTȱOFȱTABLESȱ TableȱESȬ1:ȱȱProjectȱConfigurations,ȱFundingȱScenarios,ȱandȱSalesȱScenariosȱwithȱLowestȱ EstimatedȱPowerȱSalesȱRatesȱ..............................................................................................ȱiv Tableȱ2Ȭ1:ȱȱPopulationȱofȱHainesȱandȱSkagway,ȱ2000ȱtoȱ2010ȱ..............................................................ȱ4 Tableȱ2Ȭ2:ȱEmploymentȱinȱHainesȱandȱSkagway,ȱ2000ȱtoȱ2010ȱ...........................................................ȱ5 Tableȱ2Ȭ3:ȱȱSummerȱVisitorsȱatȱHainesȱandȱSkagway,ȱ2000ȱtoȱ2010ȱ....................................................ȱ6 Tableȱ2Ȭ4:ȱȱRecentȱElectricȱSystemȱStatisticsȱ.........................................................................................ȱ10 Tableȱ2Ȭ5:ȱȱChangesȱinȱPopulationȱandȱEnergyȱConsumptionȱinȱHainesȱandȱSkagway,ȱ 2004ȱtoȱ2010ȱ..........................................................................................................................ȱ11 Tableȱ2Ȭ6:ȱȱHaines/SkagwayȱElectricalȱDemandȱForecast,ȱ2012ȱtoȱ2062ȱ...........................................ȱ13 Tableȱ3Ȭ1:ȱȱProjectȱConfigurationsȱConsideredȱ....................................................................................ȱ16 Tableȱ4Ȭ1:ȱComparisonȱofȱPotentialȱProjectȱCostsȱandȱRequiredȱPowerȱPricesȱProjectsȱ Overȱ4ȱMWȱinȱCapacityȱ......................................................................................................ȱ24 TableȱCȬ1:ȱȱBurroȱCreekȱFlowȱMeasurementsȱ....................................................................................ȱCȬ2 TableȱCȬ2:ȱȱManningȱEquationȱParametersȱforȱGaugingȱStationȱ.....................................................ȱCȬ3 TableȱCȬ3:ȱȱCreekȱSectionsȱusedȱtoȱCalculateȱAȱandȱPȱatȱGaugingȱStationsȱ..................................ȱCȬ4 TableȱCȬ4:ȱȱSummaryȱofȱHydrologyȱDataȱforȱBurroȱCreekȱandȱNearbyȱResources......................ȱCȬ6 TableȱCȬ5:ȱȱBurroȱCreekȱFlowȱModelȱParametersȱ..............................................................................ȱCȬ7 TableȱDȬ1:ȱȱMaximumȱProbableȱFloodsȱatȱBurroȱCreekȱ....................................................................ȱDȬ1 TableȱGȬ1:ȱȱRangeȱofȱProjectȱOptionsȱConsideredȱ.............................................................................ȱGȬ1 TableȱGȬ2:ȱȱDiversionȱSiteȱConsiderationsȱ..........................................................................................ȱGȬ2 TableȱGȬ3:ȱȱPowerhouseȱSiteȱConsiderationsȱ.....................................................................................ȱGȬ6 TableȱGȬ4:ȱȱExpectedȱPlantȱCapacityȱFactorȱforȱDifferentȱProjectȱConfigurationsȱ........................ȱGȬ7 TableȱGȬ5:ȱȱAverageȱMonthlyȱandȱAnnualȱEnergyȱGenerationȱofȱProjectȱConfigurationsȱ..........ȱGȬ9 TableȱGȬ6:ȱȱEstimatedȱCostsȱforȱPowerȱLineȱ–ȱBurroȱCreekȱtoȱSkagwayȱ......................................ȱGȬ10 TableȱHȬ1:ȱȱCostȱEstimatesȱandȱFinancialȱAnalysisȱforȱSelectȱProjectȱConfigurationsȱ................ȱHȬ3 TableȱHȬ2:ȱȱEconomicȱCasesȱforȱSelectȱProjectȱConfigurationsȱ.......................................................ȱHȬ4 ȱ BurroȱCreekȱHoldings,ȱLLCȱ BurroȱCreekȱHydroelectricȱStudyȱȱ ȱ PolarconsultȱAlaska,ȱInc.ȱ ȱ Novemberȱ2011ȱ–ȱFinalȱReportȱ ȱ ixȱ BurroȱCreekȱHoldings,ȱLLCȱ BurroȱCreekȱHydroelectricȱStudyȱȱ ȱ PolarconsultȱAlaska,ȱInc.ȱ ȱ ȱ Novemberȱ2011ȱ–ȱFinalȱReportȱ ȱ 1ȱ 1.0 INTRODUCTIONȱ 1.1 PROJECTȱAUTHORIZATIONȱANDȱPURPOSEȱ Burroȱ Creekȱ Holdings,ȱ LLCȱ (BCH)ȱ receivedȱ aȱ grantȱ fromȱ theȱ Alaskaȱ Energyȱ Authorityȱ inȱ 2009ȱ toȱ performȱ aȱ feasibilityȱ studyȱ forȱ anȱ upgradeȱ ofȱ theȱ existingȱ runȬofȬriverȱ hydroelectricȱ system.ȱȱ Inȱ2010,ȱBCHȱ contractedȱSoutheastȱStrategiesȱ(SES)ȱandȱPolarconsultȱAlaska,ȱInc.ȱȱ(Polarconsult)ȱ toȱ prepareȱ aȱ feasibilityȱ studyȱ toȱ determineȱ costsȱ ofȱ theȱ developmentȱ andȱ increasedȱ operationsȱ costs,ȱandȱwhetherȱthereȱwasȱaȱmarketȱforȱthisȱpowerȱinȱtheȱSkagwayȱarea.ȱȱȱ Thisȱfeasibilityȱstudy:ȱ ¾QuantifiesȱtheȱhydropowerȱresourceȱatȱBurroȱCreek,ȱȱ ¾IdentifiesȱtheȱmostȱeconomicalȱhydropowerȱdevelopmentȱatȱBurroȱCreek,ȱȱ ¾ProvidesȱfeasibilityȬlevelȱcostȱestimatesȱforȱseveralȱhydroȱprojectȱconfigurations,ȱ ¾EvaluatesȱpossibleȱmarketsȱforȱpowerȱfromȱBurroȱCreek,ȱandȱ ¾Makesȱ recommendationsȱ forȱ futureȱ developmentȱ ofȱ Burroȱ Creek’sȱ hydropowerȱ potential.ȱ Thisȱreportȱpresentsȱtheȱfindingsȱofȱtheȱfeasibilityȱstudy.ȱȱȱȱȱ 1.2 PROJECTȱEVALUATIONȱPROCESSȱ Resourceȱ dataȱ forȱ Burroȱ Creekȱ wasȱ collectedȱ andȱ analyzedȱ toȱ identifyȱ severalȱ projectȱ configurationsȱ forȱ furtherȱ evaluation.ȱȱTheȱ resourceȱ dataȱ includedȱ streamȱ hydrology,ȱ siteȱ topography,ȱ landȱ ownershipȱ andȱ relatedȱ information.ȱȱEnvironmentalȱ andȱ regulatoryȱ factorsȱ wereȱ alsoȱ consideredȱ inȱ developingȱ theseȱ projectȱ configurations.ȱȱCostȱ estimatesȱ wereȱ developedȱ forȱ theseȱ projectȱ configurations,ȱ andȱ hypotheticalȱ financingȱ andȱ businessȱ modelsȱ wereȱappliedȱinȱorderȱtoȱestimateȱenergyȱsalesȱratesȱforȱeachȱconfiguration.ȱȱȱ Futureȱ marketsȱ forȱ powerȱ wereȱ evaluatedȱ toȱ determineȱ ifȱ thereȱ isȱ anȱ opportunityȱ forȱ Burroȱ Creekȱ toȱ supplyȱ futureȱ demandȱ inȱ theȱ region.ȱȱTheȱ threeȱ developingȱ marketsȱ describedȱ inȱ Sectionȱ 4.2ȱ wereȱ identified.ȱȱTheseȱ marketȱ scenariosȱ wereȱ thenȱ furtherȱ analyzedȱ toȱ identifyȱ theȱ amountȱofȱprojectȱoutputȱ thatȱ couldȱ beȱ sold,ȱ andȱ theȱseasonalȱtimingȱandȱ salesȱpriceȱthatȱ wouldȱ beȱ necessary.ȱȱTheseȱ potentialȱ developingȱ marketsȱ warrantȱ continuedȱ attention,ȱ asȱ closeȱ coordinationȱwillȱbeȱnecessaryȱinȱorderȱtoȱdovetailȱtheȱdevelopmentȱschedulesȱofȱtheseȱpotentialȱ buyersȱwithȱtheȱdevelopmentȱscheduleȱofȱBurroȱCreek.ȱȱȱ 1.3 EXISTINGȱHYDROELECTRICȱPROJECTȱANDȱCURRENTȱSTUDYȱ 1.3.1 ExistingȱHydroelectricȱProjectȱ Thereȱ isȱ anȱ existingȱ smallȱ runȬofȬriverȱ hydroelectricȱ projectȱ onȱ Burroȱ Creekȱ whichȱ wasȱ builtȱ inȱ 1982ȱ byȱ Captainȱ Geneȱ Richards,ȱ aȱ retiredȱ NOAAȱ captain.ȱȱTheȱ projectȱ wasȱ constructedȱ inȱ partȱ withȱ fundsȱ fromȱ anȱ Alaskaȱ Energyȱ Authorityȱ Grant,ȱ andȱ wasȱ usedȱ toȱ supportȱ theȱ Richardsȇȱ homesteadȱ andȱ fishȱ hatcheryȱ forȱ nearlyȱ 20ȱ years.ȱȱGeneȱ Richardsȇȱ reportȱ entitledȱȈAppropriateȱ TechnologyȱReport:ȱHydroelectricȱSystemȱatȱBurroȱCreekȈȱisȱattachedȱasȱAppendixȱJ.ȱ BurroȱCreekȱHoldings,ȱLLCȱ BurroȱCreekȱHydroelectricȱStudyȱȱ ȱ PolarconsultȱAlaska,ȱInc.ȱ ȱ ȱ Novemberȱ2011ȱ–ȱFinalȱReportȱ ȱ 2ȱ Thisȱ existingȱ hydroȱ projectȱ isȱ suitableȱ forȱ meetingȱ onȬsiteȱ demandȱ atȱ Burroȱ Creek.ȱȱTheȱ existingȱ projectȱincludesȱtheȱfollowing:ȱ ¾Aȱ diversionȱ structureȱ atȱ 235’ȱ elevationȱ consistingȱ ofȱ aȱ naturalȱ rockȱ sillȱ inȱ Burroȱ Creek,ȱ aȱ blastedȱnotchȱinȱthisȱsillȱ fittedȱwithȱaȱ10ȬinchȱdiameterȱPVCȱintakeȱpipe,ȱandȱaȱmilledȱlogȱ pinnedȱ intoȱ theȱ apexȱ ofȱ theȱ rockȱ sillȱ withȱ 1Ȭinchȱ ironȱ barsȱ toȱ createȱ aȱ deeperȱ impoundment.ȱȱȱȱȱȱ ¾Anȱ approximatelyȱ 3Ȭfootȱ byȱ 4Ȭfootȱ byȱ 8Ȭfootȱ timberȱ filterȱ boxȱ locatedȱ approximatelyȱ 30ȱ feetȱ downstreamȱ fromȱ theȱ diversion.ȱȱRawȱ waterȱ fromȱ theȱ diversionȱ dischargesȱ intoȱ theȱ box,ȱ passesȱ throughȱ aȱ coarseȱ fiberglassȱ screen,ȱ andȱ entersȱ theȱ penstock.ȱȱThisȱ boxȱ preventsȱ excessiveȱ rocks,ȱ sticks,ȱ orȱ gravelȱ fromȱ enteringȱ theȱ penstock,ȱ andȱ stabilizesȱ waterȱflowȱintoȱtheȱproject.ȱ ¾Aȱ 1,400Ȭfootȱ longȱ 10Ȭinchȱ diameterȱ PVCȱ penstockȱ thatȱ conveysȱ waterȱ fromȱ theȱ intakeȱ downȱtoȱtheȱpowerhouse.ȱ ¾Anȱ approximatelyȱ 12Ȭfootȱ byȱ 12Ȭfootȱ milledȬlogȱ powerhouseȱ withȱ aȱ finishedȱ floorȱ elevationȱofȱ32.5ȱfeetȱthatȱcontainsȱtheȱturbineȱandȱgenerationȱequipment.ȱȱȱ ¾Theȱ originalȱ turbineȱ equipment,ȱ whichȱ includesȱ twoȱ 2Ȭjetȱ Peltonȱ wheelsȱ onȱ aȱ commonȱ shaftȱ thatȱ driveȱ aȱ 25ȱ kilowattȱ (kW)ȱ alternatorȱ viaȱ pulleysȱ andȱ beltȱ drive.ȱȱTheȱ secondȱ jetȱ onȱ eachȱ wheelȱ wasȱ blankedȱ offȱ insideȱ theȱ turbineȱ housingȱ duringȱ originalȱ manufactureȱ ofȱtheȱturbineȱequipment.ȱȱThisȱturbineȱ setȱhasȱtheȱ potentialȱtoȱgenerateȱ 50ȱkW,ȱalthoughȱ theȱ secondȱ jetsȱ wouldȱ needȱ toȱ beȱ installedȱ andȱ theȱ beltȱ driveȱ andȱ alternatorȱ wouldȱ needȱ toȱ beȱ upgraded.ȱȱThisȱ equipmentȱ isȱ notȱ currentlyȱ functional.ȱȱItȱ isȱ notȱ knownȱ whenȱ thisȱ equipmentȱ wasȱ lastȱ operational,ȱ orȱ whatȱ measuresȱ areȱ neededȱ toȱ placeȱ itȱ backȱ intoȱ service.ȱ ¾NewerȱturbineȬgeneratorȱequipment,ȱconsistingȱofȱoneȱsingleȬjetȱhomeȬmadeȱPeltonȬtypeȱ wheelȱ drivingȱ aȱ 15ȱ kWȱ alternatorȱ viaȱ aȱ beltȱ drive.ȱȱTheȱ turbineȱ isȱ governedȱ byȱ aȱ Woodardȱ UGȬ8ȱ mechanicalȱ governor,ȱ whichȱ actuatesȱ theȱ jetȱ deflectorȱ toȱ regulateȱ frequencyȱ andȱ voltage.ȱȱThisȱ turbineȬgeneratorȱ installationȱ currentlyȱ providesȱ Burroȱ Creekȱwithȱelectricity.ȱȱȱȱȱȱ ¾Aȱ shallowȬburialȱ tailraceȱ pipeȱ thatȱ dischargesȱ waterȱ intoȱ Burroȱ Creekȱ justȱ aboveȱ tidewater.ȱ Theȱ existingȱ 15ȬkWȱ hydroȱ projectȱ isȱ functional,ȱ butȱ hasȱ significantȱ deferredȱ maintenance.ȱȱTheȱ diversionȱ pipeȱ andȱ headȱ boxȱ isȱ pastȱ itsȱ usefulȱ lifeȱ andȱ inȱ needȱ ofȱ replacement;ȱ thrustȱ restraintsȱ alongȱ theȱ entireȱ penstockȱ areȱ inȱ needȱ ofȱ reȬtensioning,ȱ adjustment,ȱ orȱ replacement;ȱ andȱ someȱ ofȱ theȱ thrustȱ restraintsȱ inȱ theȱ powerhouseȱ areȱ inȱ marginalȱ condition.ȱȱTheȱ electricalȱ panelȱ inȱ theȱ powerhouseȱalsoȱappearsȱtoȱbeȱsubstandardȱandȱmayȱwarrantȱupgrade.ȱȱȱ Theȱ existingȱ hydroȱ projectȱ isȱ anȱ goodȱ exampleȱ ofȱ aȱ smallȱ (15ȱ toȱ 50ȱ kW)ȱ ruralȱ Alaskanȱ hydroelectricȱ project.ȱȱTheȱ sitingȱ andȱ constructionȱ methodsȱ usedȱ forȱ thisȱ projectȱ areȱ excellentȱ exampleȱ ofȱ simple,ȱ economical,ȱ andȱ appropriateȱ microȱ hydroȱ developmentȱ atȱ aȱ remoteȱ site.ȱȱ BurroȱCreekȱHoldings,ȱLLCȱ BurroȱCreekȱHydroelectricȱStudyȱȱ ȱ PolarconsultȱAlaska,ȱInc.ȱ ȱ ȱ Novemberȱ2011ȱ–ȱFinalȱReportȱ ȱ 3ȱ However,ȱ theȱ existingȱ projectȱ isȱ tooȱ smallȱ toȱ justifyȱ exportȱ ofȱ powerȱ fromȱ Burroȱ Creek,ȱ andȱ isȱ notȱconsideredȱfurtherȱinȱthisȱstudy.ȱ 1.3.2 CurrentȱStudyȱ Thisȱfeasibilityȱstudyȱincludedȱtheȱfollowingȱactivities:ȱ ¾R&MȱEngineers,ȱInc.ȱȱperformedȱanȱasȬbuiltȱsurveyȱofȱtheȱexistingȱmicroȱhydroȱprojectȱatȱ Burroȱ Creekȱ inȱ theȱ fallȱ ofȱ 2009ȱ toȱ identifyȱ theȱ headȱ andȱ locationȱ ofȱ theȱ projectȱ onȱ USSȱ 1560.ȱȱȱ ¾Polarconsultȱ visitedȱ Burroȱ Creekȱ onȱ Decemberȱ 17ȱ toȱ 18,ȱ 2009ȱ toȱ installȱ aȱ streamȱ gaugeȱ andȱ measureȱ flowȱ inȱ Burroȱ Creekȱ toȱ collectȱ siteȬspecificȱ hydrologyȱ dataȱ forȱ thisȱ study.ȱȱ Polarconsultȱ alsoȱ conductedȱ anȱ initialȱ reconnaissanceȱ ofȱ theȱ lowerȱ reachesȱ ofȱ Burroȱ CreekȱonȱUSSȱ1560.ȱ ¾Polarconsultȱ conductedȱ additionalȱ siteȱ investigationsȱ atȱ Burroȱ Creekȱ inȱ Mayȱ 2010ȱ andȱ Septemberȱ 2011.ȱȱActivitiesȱ duringȱ theseȱ visitsȱ includedȱ limitedȱ topographicȱ surveysȱ toȱ determineȱ theȱ availableȱ headȱ andȱ locationȱ ofȱ variousȱ intakeȱ sites,ȱ assessmentȱ ofȱ terrainȱ andȱ identificationȱ ofȱ penstockȱ routesȱ andȱ constructionȱ requirements,ȱ initialȱ assessmentȱ ofȱ basicȱ environmentalȱ conditionsȱ inȱ theȱ projectȱ areaȱ (e.g.,ȱ presenceȱ orȱ absenceȱ ofȱ wetlands),ȱandȱadditionalȱflowȱmeasurements.ȱ ¾SoutheastȱStrategiesȱvisitedȱ Burroȱ CreekȱinȱAugustȱ2011ȱtoȱreviewȱtheȱprojectȱsiteȱandȱbeȱ familiarizedȱwithȱtheȱprojectȱsettingȱandȱterrain.ȱ ¾BCHȱ personnelȱ haveȱ periodicallyȱ downloadedȱ andȱ maintainedȱ theȱ streamȱ gaugeȱ throughoutȱtheȱfeasibilityȱstudy.ȱ ¾Severalȱ potentialȱ hydroȱ projectȱ configurationsȱ onȱ Burroȱ Creekȱ wereȱ developed,ȱ includingȱcostȱestimatesȱandȱfinancialȱanalysisȱofȱeachȱconfiguration.ȱ ¾ExistingȱandȱfutureȱpotentialȱmarketsȱforȱtheȱenergyȱfromȱBurroȱCreekȱwereȱanalyzed.ȱ ¾RecommendationsȱforȱfutureȱeffortsȱatȱBurroȱCreekȱwereȱdeveloped.ȱȱȱ ȱ ȱȱ BurroȱCreekȱHoldings,ȱLLCȱ BurroȱCreekȱHydroelectricȱStudyȱȱ ȱ PolarconsultȱAlaska,ȱInc.ȱ ȱ ȱ Novemberȱ2011ȱ–ȱFinalȱReportȱ ȱ 4ȱ 2.0 COMMUNITYȱPROFILEȱ 2.1 COMMUNITYȱOVERVIEWȱ BurroȱCreekȱisȱlocatedȱalongȱtheȱshoresȱofȱTaiyaȱInletȱinȱLynnȱCanal,ȱaboutȱtwoȱmilesȱsouthwestȱ ofȱ Skagway,ȱ inȱ Southeastȱ Alaska.ȱȱSkagwayȱ isȱ locatedȱ aboutȱ 90ȱ milesȱ northeastȱ ofȱ Juneauȱ inȱ Upperȱ Lynnȱ Canal,ȱ andȱ Burroȱ Creekȱ isȱ accessedȱ byȱ boatȱ orȱ helicopterȱ fromȱ Skagway.ȱȱTheȱ Upperȱ Lynnȱ Canalȱ communitiesȱ onȱ theȱ electricȱ gridȱ thatȱ willȱ beȱ servedȱ byȱ theȱ Burroȱ Creekȱ hydroelectricȱprojectȱincludeȱHaines,ȱKlukwan,ȱandȱSkagway,ȱasȱwellȱasȱsomeȱoutlyingȱareas.ȱ Theȱ Upperȱ Lynnȱ Canalȱ areaȱ hasȱ aȱ maritimeȱ climateȱ withȱ coolȱ summersȱ andȱ mildȱ winters.ȱȱ Becauseȱ itȱ isȱ inȱ theȱ rainȱ shadowȱ ofȱ nearbyȱ mountains,ȱ Skagwayȱ receivesȱ lessȱ precipitationȱ thanȱ Hainesȱ andȱ manyȱ communitiesȱ inȱ theȱ Southeastȱ Alaskaȱ region,ȱ averagingȱ 26ȱ inchesȱ ofȱ precipitationȱ perȱ year,ȱ whichȱ includesȱ 39ȱ inchesȱ ofȱ snow.ȱȱȱBothȱ Hainesȱ andȱ Skagwayȱ haveȱ commercialȱ airports,ȱ andȱ areȱ portsȱ ofȱ callȱ forȱ theȱ Stateȱ ferryȱ system.ȱȱInȱ addition,ȱ Skagwayȱ isȱ connectedȱ byȱ theȱ Klondikeȱ Highwayȱ toȱ theȱ Alaskaȱ Highway,ȱ andȱ theȱ Northȱ Americanȱ roadȱ system.ȱȱHainesȱisȱalsoȱconnectedȱtoȱtheȱAlaskaȱHighwayȱviaȱtheȱHainesȱHighway.ȱ Skagwayȱ isȱ oneȱ ofȱ theȱ oldestȱ communitiesȱ inȱ Alaska,ȱ beginningȱ asȱ anȱ accessȱ toȱ theȱ Klondikeȱ goldȱ regionȱ inȱ theȱ lateȱ 1880s.ȱȱItȱ wasȱ incorporatedȱ asȱ Alaska’sȱ firstȱ cityȱ inȱ 1900,ȱ andȱ becameȱ aȱ fullyȱconsolidatedȱ boroughȱ inȱ 2004.ȱȱHainesȱ housedȱtheȱfirstȱpermanentȱ militaryȱpostȱinȱ Alaska,ȱ Fortȱ Williamȱ H.ȱ Seward,ȱ builtȱ inȱ 1904.ȱȱItȱ wasȱ incorporatedȱ asȱ aȱ cityȱ inȱ 1910,ȱ andȱ formedȱ aȱ boroughȱinȱ2007.ȱ Tableȱ 2Ȭ1ȱ presentsȱ populationȱ inȱ bothȱ Hainesȱ andȱ Skagwayȱ betweenȱ 2000ȱ andȱ 2010.ȱȱTheȱ estimatedȱsummerȱpopulationȱreflectsȱtheȱinfluxȱofȱsummerȱworkersȱforȱtheȱtourismȱseason.ȱȱȱ Tableȱ2Ȭ1:ȱȱPopulationȱofȱHainesȱandȱSkagway,ȱ2000ȱtoȱ2010ȱ Yearȱ Skagwayȱ Hainesȱ Bothȱ Summerȱ Estimate*ȱ Annualȱ Averageȱ PercentȱChangeȱ 2000ȱ 862ȱ 2,392ȱ 3,254ȱ 4,978ȱ 3,829ȱȱ 2001ȱ 838ȱ 2,383ȱ 3,221ȱ 4,897ȱ 3,780ȱȬ1.3%ȱ 2002ȱ 844ȱ 2,373ȱ 3,217ȱ 4,905ȱ 3,780ȱ 0.0%ȱ 2003ȱ 843ȱ 2,335ȱ 3,178ȱ 4,864ȱ 3,740ȱȬ1.0%ȱ 2004ȱ 873ȱ 2,271ȱ 3,144ȱ 4,890ȱ 3,726ȱȬ0.4%ȱ 2005ȱ 834ȱ 2,225ȱ 3,059ȱ 4,727ȱ 3,615ȱȬ3.0%ȱ 2006ȱ 855ȱ 2,252ȱ 3,107ȱ 4,817ȱ 3,677ȱ 1.7%ȱ 2007ȱ 843ȱ 2,264ȱ 3,107ȱ 4,793ȱ 3,669ȱȬ0.2%ȱ 2008ȱ 846ȱ 2,322ȱ 3,168ȱ 4,860ȱ 3,732ȱ 1.7%ȱ 2009ȱ 865ȱ 2,286ȱ 3,151ȱ 4,881ȱ 3,728ȱȬ0.1%ȱ 2010ȱ 968ȱ 2,508ȱ 3,476ȱ 5,412ȱ 4,121ȱ 10.6%ȱ AverageȱAnnualȱChangeȱ +0.8%ȱ Sources:ȱAlaskaȱDepartmentȱofȱLaborȱandȱWorkforceȱDevelopmentȱandȱSoutheastȱStrategies,ȱ2011.ȱ *Summerȱ populationȱ estimatesȱ byȱ Southeastȱ Strategiesȱ assumeȱ thatȱ theȱ populationȱ inȱ Skagwayȱ aboutȱ triplesȱ inȱ theȱ summerȱseason.ȱ BurroȱCreekȱHoldings,ȱLLCȱ BurroȱCreekȱHydroelectricȱStudyȱȱ ȱ PolarconsultȱAlaska,ȱInc.ȱ ȱ ȱ Novemberȱ2011ȱ–ȱFinalȱReportȱ ȱ 5ȱ Bothȱ communitiesȱ haveȱ strongȱ tourismȱ sectors.ȱȱInȱ addition,ȱ Hainesȱ hostsȱ aȱ commercialȱ fishingȱ fleetȱ ofȱ aroundȱ 100ȱ residents.ȱȱManyȱ ofȱ theȱ jobsȱ inȱ theseȱ communitiesȱ areȱ seasonal.ȱȱTheȱ followingȱ tableȱ showsȱ employmentȱ inȱ Hainesȱ andȱ Skagway.ȱȱSkagwayȱ appearsȱ toȱ haveȱ aȱ moreȱ stableȱ employmentȱ baseȱ thanȱ Haines.ȱȱBothȱ communitiesȱ haveȱ lostȱ employmentȱ betweenȱ 2009ȱ andȱ2010.ȱ Tableȱ2Ȭ2:ȱEmploymentȱinȱHainesȱandȱSkagway,ȱ2000ȱtoȱ2010ȱ Yearȱ Hainesȱ Percentȱ Changeȱ Skagwayȱ Percentȱ Changeȱ Bothȱ Communitiesȱ Percentȱ Changeȱ 2000ȱ 805ȱȱ 656ȱȱ 1,461ȱȱ 2001ȱ 683ȱȬ15.2%ȱ 684ȱ 4.3%ȱ 1,367ȱȬ6.4%ȱ 2002ȱ 893ȱ 30.7%ȱ 745ȱ 8.9%ȱ 1,638ȱ 19.8%ȱ 2003ȱ 947ȱ 6.0%ȱ 749ȱ 0.5%ȱ 1,696ȱ 3.5%ȱ 2004ȱ 1,002ȱ 5.8%ȱ 780ȱ 4.1%ȱ 1,782ȱ 5.1%ȱ 2005ȱ 1,050ȱ 4.8%ȱ 836ȱ 7.2%ȱ 1,886ȱ 5.8%ȱ 2006ȱ 730ȱȬ30.5%ȱ 848ȱ 1.4%ȱ 1,578ȱȬ16.3%ȱ 2007ȱ 763ȱ 4.5%ȱ 877ȱ 3.4%ȱ 1,640ȱ 3.9%ȱ 2008ȱ 981ȱ 28.6%ȱ 886ȱ 1.0%ȱ 1,867ȱ 13.8%ȱ 2009ȱ 1,017ȱ 3.7%ȱ 826ȱȬ6.8%ȱ 1,843ȱȬ1.3%ȱ 2010ȱ 995ȱȬ2.2%ȱ 812ȱȬ1.7%ȱ 1,807ȱȬ2.0%ȱ Averageȱ AnnualȱChangeȱ ȱ 3.6%ȱȱ2.2%ȱȱ2.6%ȱ Source:ȱȱAlaskaȱDepartmentȱofȱLaborȱandȱWorkforceȱDevelopment.ȱ BothȱHainesȱandȱ Skagwayȱ areȱ connectedȱtoȱ theȱcontinentalȱ roadȱsystem,ȱandȱ theyȱ receiveȱ manyȱ visitorsȱ inȱ theȱ summerȱ seasonȱ (seeȱ Tableȱ 2Ȭ3).ȱȱInȱ addition,ȱ theyȱ bothȱ receiveȱ scheduledȱ andȱ charteredȱ airȱ traffic,ȱ whichȱ increasesȱ greatlyȱ inȱ summer.ȱȱStateȱ ferryȱ serviceȱ isȱ alsoȱ availableȱ dailyȱ inȱ theȱ summerȱ andȱ severalȱ timesȱ weeklyȱ duringȱ theȱ restȱ ofȱ theȱ year.ȱȱBothȱ communitiesȱ receiveȱvisitsȱ byȱcruiseȱ shipsȱ inȱ summer.ȱȱHainesȱgetsȱ aboutȱoneȱ largeȱcruiseȱshipȱperȱweek,ȱandȱ Skagwayȱ canȱ receiveȱ asȱ manyȱ asȱ 20ȱ perȱ week.ȱȱTheȱ followingȱ tableȱ presentsȱ visitationȱ byȱ modeȱ atȱHainesȱandȱSkagway.ȱ BurroȱCreekȱHoldings,ȱLLCȱ BurroȱCreekȱHydroelectricȱStudyȱȱ ȱ PolarconsultȱAlaska,ȱInc.ȱ ȱ ȱ Novemberȱ2011ȱ–ȱFinalȱReportȱ ȱ 6ȱ Tableȱ2Ȭ3:ȱȱSummerȱVisitorsȱatȱHainesȱandȱSkagway,ȱ2000ȱtoȱ2010ȱ Yearȱ CruiseȱShipȱ Highwayȱ StateȱFerryȱ Trainȱ Totalȱ Percentȱ Changeȱ 2000ȱȬȱTotalȱ 753,036ȱ 139,305ȱ 56,892ȱ 19,231ȱ 968,464ȱȱ ȱȱHainesȱ 187,397ȱ 44,380ȱ 27,494ȱȱ259,271ȱȱ ȱȱSkagwayȱ 565,639ȱ 94,925ȱ 29,398ȱ 19,231ȱ 709,193ȱȱ 2001ȱȬȱTotalȱ 639,670ȱ 128,923ȱ 46,287ȱ 20,674ȱ 835,554ȱȬ13.7%ȱ ȱȱHainesȱ 40,150ȱ 46,294ȱ 22,575ȱȱ109,019ȱȬ58.0%ȱ ȱȱSkagwayȱ 599,520ȱ 82,629ȱ 23,712ȱ 20,674ȱ 726,535ȱ 2.4%ȱ 2002ȱȬȱTotalȱ 698,112ȱ 128,538ȱ 52,122ȱ 14,361ȱ 893,133ȱ 6.9%ȱ ȱȱHainesȱ 86,474ȱ 48,117ȱ 25,309ȱȱ159,900ȱ 46.7%ȱ ȱȱSkagwayȱ 611,638ȱ 80,421ȱ 26,813ȱ 14,361ȱ 733,233ȱ 0.9%ȱ 2003ȱȬȱTotalȱ 654,483ȱ 118,756ȱ 49,413ȱ 13,065ȱ 835,717ȱȬ6.4%ȱ ȱȱHainesȱ 14,741ȱ 44,006ȱ 24,383ȱȱ83,130ȱȬ48.0%ȱ ȱȱSkagwayȱ 639,742ȱ 74,750ȱ 25,030ȱ 13,065ȱ 752,587ȱ 2.6%ȱ 2004ȱȬȱTotalȱ 744,560ȱ 121,393ȱ 46,901ȱ 13,187ȱ 926,041ȱ 10.8%ȱ ȱȱHainesȱ 22,465ȱ 43,556ȱ 23,227ȱȱ89,248ȱ 7.4%ȱ ȱȱSkagwayȱ 722,095ȱ 77,837ȱ 23,674ȱ 13,187ȱ 836,793ȱ 11.2%ȱ 2005ȱȬȱTotalȱ 804,300ȱ 112,280ȱ 43,464ȱ 17,071ȱ 977,115ȱ 5.5%ȱ ȱȱHainesȱ 31,968ȱ 40,893ȱ 22,200ȱȱ95,061ȱ 6.5%ȱ ȱȱSkagwayȱ 772,332ȱ 71,387ȱ 21,264ȱ 17,071ȱ 882,054ȱ 5.4%ȱ 2006ȱȬȱTotalȱ 786,592ȱ 101,010ȱ 44,060ȱ 17,826ȱ 949,488ȱȬ2.8%ȱ ȱȱHainesȱ 31,278ȱ 39,140ȱ 23,899ȱȱ94,317ȱȬ0.8%ȱ ȱȱSkagwayȱ 755,314ȱ 61,870ȱ 20,161ȱ 17,826ȱ 855,171ȱȬ3.0%ȱ 2007ȱȬȱTotalȱ 843,922ȱ 108,193ȱ 38,780ȱ 16,514ȱ 1,007,409ȱ 6.1%ȱ ȱȱHainesȱ 23,178ȱ 39,338ȱ 20,531ȱȱ83,047ȱȬ11.9%ȱ ȱȱSkagwayȱ 820,744ȱ 68,855ȱ 18,249ȱ 16,514ȱ 924,362ȱ 8.1%ȱ 2008ȱȬȱTotalȱ 807,262ȱ 100,260ȱ 40,399ȱ 18,326ȱ 966,247ȱȬ4.1%ȱ ȱȱHainesȱ 41,770ȱ 34,434ȱ 22,404ȱȱ98,608ȱ 18.7%ȱ ȱȱSkagwayȱ 765,492ȱ 65,826ȱ 17,995ȱ 18,326ȱ 867,639ȱȬ6.1%ȱ 2009ȱȬȱTotalȱ 798,644ȱ 173,781ȱ 79,666ȱ 16,159ȱ 1,068,250ȱ 10.6%ȱ ȱȱHainesȱ 41,304ȱ 33,931ȱ 19,812ȱȱ95,047ȱȬ3.6%ȱ ȱȱSkagwayȱ 757,340ȱ 139,850ȱ 59,854ȱ 16,159ȱ 973,203ȱ 12.2%ȱ 2010ȱȬȱTotalȱ 726,490ȱ 103,044ȱ 38,524ȱ 16,822ȱ 884,880ȱȬ17.2%ȱ ȱȱHainesȱ 30,850ȱ 36,806ȱ 21,330ȱȱ88,986ȱȬ6.4%ȱ ȱȱSkagwayȱ 695,640ȱ 66,238ȱ 17,194ȱ 16,822ȱ 795,894ȱȬ18.2%ȱ Sources:ȱȱHainesȱandȱSkagwayȱVisitorsȱBureaus,ȱAlaskaȱMarineȱHighwaysȱTrafficȱVolumeȱReports.ȱ Note:ȱSomeȱvisitorsȱarrivingȱbyȱStateȱferryȱandȱhighwayȱmayȱbeȱlocalȱresidents.ȱȱInȱaddition,ȱsomeȱvisitorsȱarriveȱbyȱ air,ȱpassengerȬonlyȱferries,ȱandȱprivateȱboat.ȱ BurroȱCreekȱHoldings,ȱLLCȱ BurroȱCreekȱHydroelectricȱStudyȱȱ ȱ PolarconsultȱAlaska,ȱInc.ȱ ȱ ȱ Novemberȱ2011ȱ–ȱFinalȱReportȱ ȱ 7ȱ Visitsȱ toȱ Hainesȱ andȱ Skagwayȱ haveȱ generallyȱ grownȱ betweenȱ 2000ȱ andȱ 2010.ȱȱHowever,ȱ cruiseȱ passengerȱ visitsȱ droppedȱ slightlyȱ betweenȱ 2007ȱ andȱ 2010,ȱ andȱ appearȱ toȱ haveȱ droppedȱ slightlyȱ againȱ inȱ 2011.ȱȱAccordingȱ toȱ theȱ Cruiseȱ Lineȱ Agenciesȱ ofȱ Alaska,ȱ inȱ 2012,ȱ cruiseȱ shipȱ stopsȱ atȱ Hainesȱ willȱremainȱtheȱ sameȱatȱ 23.ȱȱCruiseȱshipȱportsȱofȱcallȱatȱSkagwayȱinȱ2012ȱwillȱincreaseȱbyȱ 8,ȱ toȱ 352ȱ stops.ȱȱAssumingȱ aȱ similarȱ loadȱ factorȱ ofȱ passengersȱ perȱ shipȱ asȱ recentȱ years,ȱ thisȱ increaseȱshouldȱbringȱmoreȱpassengersȱtoȱSkagwayȱinȱsummerȱofȱ2012.ȱȱȱ Manyȱ ofȱ theȱ cruiseȱ shipsȱ visitingȱ theseȱ communitiesȱ houseȱ 2,000ȱ orȱ moreȱ passengers,ȱ andȱ 1,000ȱ orȱ moreȱ crew.ȱȱAsȱ aȱ resultȱ ofȱ theseȱ visitations,ȱ itȱ isȱ notȱ unusualȱ forȱ Skagwayȱ toȱ haveȱ anȱ additionalȱ 10,000ȱ peopleȱ inȱ theȱ townȱ onȱ anyȱ givenȱ summerȱ day.ȱȱSkagway’sȱ statusȱ asȱ theȱ gatewayȱ toȱ theȱ Klondike,ȱ andȱ itsȱ Yukonȱ Goldȱ Rushȱ historicalȱ flavorȱ isȱ aȱ strongȱ tourismȱ draw,ȱ andȱ virtuallyȱ everyȱ cruiseȱ shipȱ transitingȱ Alaska’sȱ Insideȱ Passageȱ visitsȱ theȱ community.ȱȱCruiseȱ shipȱ callsȱ inȱ Hainesȱ areȱ farȱ fewer,ȱ averagingȱ oneȱ largeȱ cruiseȱ shipȱ visitȱ perȱ week.ȱȱHainesȱ alsoȱ lacksȱtheȱtrainȱtrafficȱthatȱSkagwayȱhas.ȱȱȱȱȱ Potentialȱ futureȱ industrialȱ developmentȱ inȱ theȱ Upperȱ Lynnȱ Canalȱ includesȱ theȱ Palmerȱ miningȱ projectȱ nearȱ Haines.ȱȱThisȱ isȱaȱmidȬstageȱprospectȱcontainingȱ highȱgradeȱ copper,ȱ zinc,ȱ gold,ȱ andȱ silver.ȱȱTheȱprojectȱisȱstillȱinȱtheȱexplorationȱphaseȱtoȱbetterȱdefineȱtheȱexistingȱinferredȱresource.ȱȱ Theȱ Palmerȱ projectȱ couldȱ potentiallyȱ requireȱ largeȱ amountsȱ ofȱ electricȱ powerȱ toȱ developȱ andȱ operate.ȱȱȱ BurroȱCreekȱHoldings,ȱLLCȱ BurroȱCreekȱHydroelectricȱStudyȱȱ ȱ PolarconsultȱAlaska,ȱInc.ȱ ȱ ȱ Novemberȱ2011ȱ–ȱFinalȱReportȱ ȱ 8ȱ 2.2 EXISTINGȱENERGYȱSYSTEMȱ AlaskaȱPowerȱCompanyȱ(APC)ȱisȱtheȱcertificatedȱelectricȱutilityȱinȱtheȱSkagwayȱarea.ȱȱTheȱutilityȱ isȱ alsoȱ connectedȱ toȱ theȱ Hainesȱ areaȱ byȱ underseaȱ cable.ȱȱInsideȱ Passageȱ Electricȱ Cooperativeȱ (IPEC)ȱ providesȱ retailȱ electricȱ powerȱ toȱ Klukwanȱ andȱ theȱ Chilkatȱ Valleyȱ nearȱ Haines,ȱ someȱ ofȱ whichȱ isȱ purchasedȱ wholesaleȱ fromȱ APC.ȱȱInȱ thisȱ report,ȱ theȱ Municipalityȱ ofȱ Skagwayȱ andȱ theȱ Hainesȱ Boroughȱ (theȱ areaȱ isȱ alsoȱ referredȱ toȱ asȱ Upperȱ Lynnȱ Canal)ȱ areȱ takenȱ togetherȱ asȱ theȱ projectȱareaȱintoȱwhichȱtheȱBurroȱCreekȱupgradeȱintegrates.ȱȱȱ 2.2.1 ElectricȱUtilityȱOrganizationȱ Electricalȱ serviceȱ inȱ Upperȱ Lynnȱ Canalȱ isȱ providedȱ byȱ APC,ȱ aȱ subsidiaryȱ ofȱ Alaskaȱ Powerȱ andȱ Telephoneȱ(AP&T).ȱȱTheȱutilityȱholdsȱCertificateȱofȱPublicȱNeedȱandȱNecessityȱNo.ȱȱ2.ȱȱItȱisȱaȱforȬ profitȱ utility,ȱ andȱ operatesȱ underȱ statutoryȱ authorityȱ ASȱ 42.05.990(5)(A).ȱȱTheȱ APCȱ isȱ theȱ entityȱ thatȱ operatesȱ theȱ powerȱ distributionȱ systemȱ servingȱ Upperȱ Lynnȱ Canal.ȱȱTheȱ generationȱ plantsȱ areȱ ownedȱ byȱ eitherȱ AP&Tȱ orȱ APC.ȱȱTheȱ APCȱ participatesȱ inȱ theȱ Stateȱ ofȱ Alaska’sȱ Powerȱ Costȱ Equalizationȱ (PCE)ȱ program,ȱ whichȱ subsidizesȱ electricityȱ ratesȱ forȱ residencesȱ andȱ communityȱ facilitiesȱservedȱbyȱeligibleȱAlaskaȱutilities.ȱ 2.2.2 ElectricalȱGenerationȱSystemȱ Theȱ AP&Tȱ currentlyȱ operatesȱ fourȱ hydroelectricȱ generationȱ facilitiesȱ andȱ twoȱ dieselȱ plantsȱ inȱ Upperȱ Lynnȱ Canal.ȱȱHistorically,ȱ oneȱ dieselȱ generationȱ plantȱ operatedȱ inȱ Skagwayȱ andȱ oneȱ inȱ Haines.ȱȱAȱ fourȬgeneratorȱ dieselȱ plantȱ atȱ Hainesȱ hasȱ theȱ capacityȱ toȱ generateȱ aboutȱ 6.4ȱ megawattsȱ(MW)ȱofȱpower,ȱandȱaȱfourȬgeneratorȱdieselȱplantȱatȱDeweyȱLakesȱnearȱSkagwayȱhasȱ aȱ generatingȱ capacityȱ ofȱ aboutȱ 3.4ȱ MW.ȱȱDieselȱ generationȱ isȱ usedȱ mainlyȱ forȱ backupȱ powerȱ whenȱtheȱhydroelectricȱsystemsȱareȱnotȱoperating.ȱ Theȱ 900ȱ kWȱ Deweyȱ Lakesȱ hydroelectricȱ runȬofȬriverȱ projectȱ hasȱ operatedȱ nearȱ Skagwayȱ sinceȱ 1909.ȱȱInȱ 1997,ȱ theȱ Goatȱ Lakeȱ hydroelectricȱ projectȱ beganȱ operations.ȱȱThisȱ 4.0ȱ MWȱ facilityȱ isȱ locatedȱsevenȱmilesȱnorthȱofȱSkagway,ȱandȱconsistsȱofȱaȱ204Ȭacreȱ glacierȱfedȱlakeȱthatȱhasȱwinterȱ storageȱ enoughȱ toȱprovideȱhydroelectricȱ powerȱ nearlyȱ yearȱaround.ȱȱTheȱ facilityȱ wasȱ connectedȱ toȱtheȱHainesȱpowerȱgridȱbyȱaȱ15Ȭmileȱunderseaȱcableȱinȱ1998.ȱȱInȱ2009,ȱtheȱKasidayaȱCreekȱrunȬ ofȬriverȱ hydroelectricȱ projectȱ nearȱ Skagwayȱ beganȱ operating.ȱȱThatȱ facilityȱ hasȱ aȱ generationȱ capacityȱofȱ 3.0ȱMW,ȱandȱisȱnotȱoperationalȱduringȱsomeȱwinterȱmonths.ȱȱȱTheȱLutakȱHydroȱ runȬ ofȬriverȱsystemȱnearȱHainesȱhasȱanȱinstalledȱcapacityȱofȱ250ȱkW.ȱ Inȱ additionȱ toȱ theseȱ AP&Tȱ facilities,ȱ theȱ privatelyȱ ownedȱ 10ȬMileȱ Creekȱ runȬofȬriverȱ hydroelectricȱ facilityȱ northȱ ofȱ Hainesȱ hasȱ aȱ capacityȱ toȱ generateȱ 600ȱ kW.ȱȱCurrentlyȱ thatȱ facilityȱ sellsȱ itsȱ powerȱ toȱ IPECȱ forȱ useȱ inȱ Klukwanȱ andȱ theȱ Chilkatȱ Valley.ȱȱIPECȱ isȱ inȱ theȱ processȱ ofȱ acquiringȱtheȱ10ȬMileȱCreekȱfacility.ȱ Theȱ installedȱ capacityȱ ofȱ theseȱ powerȱ plantsȱ totalsȱ overȱ 8.3ȱ MWȱ ofȱ hydroelectricȱ power,ȱ andȱ approximatelyȱ 9.8ȱ MWȱ ofȱ dieselȬgeneratedȱ power.ȱȱTheȱ existingȱ hydroelectricȱ facilitiesȱ canȱ produceȱ enoughȱ powerȱ toȱ meetȱ communityȱ demandȱ exceptȱ inȱ lateȱ winterȱ whenȱ Goatȱ Lakeȱ hasȱ drainedȱ down,ȱ andȱ theȱ Kasidayaȱ projectȱ isȱ offȬlineȱ dueȱ toȱ lowȱ flowsȱ andȱ freezingȱ conditions.ȱȱ BurroȱCreekȱHoldings,ȱLLCȱ BurroȱCreekȱHydroelectricȱStudyȱȱ ȱ PolarconsultȱAlaska,ȱInc.ȱ ȱ ȱ Novemberȱ2011ȱ–ȱFinalȱReportȱ ȱ 9ȱ APCȱreliesȱonȱitsȱ dieselȱ plantsȱ toȱ supplementȱ theȱ hydroȱprojectsȱ duringȱ theseȱ periodsȱandȱ otherȱ timesȱwhenȱtheȱhydroelectricȱprojectsȱareȱoffȬlineȱforȱmaintenanceȱorȱrepair.ȱȱȱ 2.2.3 ElectricalȱDistributionȱSystemȱȱ TheȱAPCȱisȱtheȱcertificatedȱelectricȱutilityȱinȱtheȱSkagwayȱarea.ȱȱItȱisȱalsoȱconnectedȱtoȱtheȱHainesȱ areaȱ byȱ aȱ 15Ȭmileȱ underseaȱ cable.ȱȱTheȱ IPECȱ providesȱ retailȱ electricȱ powerȱ toȱ Klukwanȱ andȱ theȱ Chilkatȱ Valleyȱ nearȱ Haines.ȱȱInȱ addition,ȱ theȱ followingȱ transmissionȱ linesȱ haveȱ beenȱ builtȱ inȱ UpperȱLynnȱCanalȱsinceȱ2005:ȱ ¾ȱ IntertieȱtoȱDyeaȱValleyȱ–ȱ2005;ȱ ¾ȱ 5ȱmileȱtoȱ10ȱmileȱHainesȱHighwayȱintertieȱ–ȱ2007;ȱ ¾ȱ IntertieȱfromȱIPECȱsystemȱtoȱtheȱCanadianȱBorderȱ–ȱ2007;ȱ ¾ȱ IntertieȱtoȱLutakȱCommunityȱnearȱHainesȱ–ȱ2007;ȱȱ ¾ȱ PowerȱlineȱtoȱtheȱCanadianȱborderȱstationȱfromȱSkagway;ȱandȱ ¾ȱ PowerȱlineȱfromȱWhitehorse,ȱYTȱtoȱCarcross,ȱYT.ȱ 2.2.4 FutureȱProjectsȱ Sinceȱ theȱ underseaȱ cableȱ inȱ Taiyaȱ Inletȱ providesȱ mostȱ ofȱ theȱ renewableȱ powerȱ toȱ Haines,ȱ thatȱ communityȱ wouldȱ relyȱ mainlyȱ onȱ dieselȱ generationȱ shouldȱ thatȱ cableȱ beȱ incapacitated.ȱȱTheȱ AP&Tȱ isȱ lookingȱ forȱ hydroelectricȱ potentialȱ inȱ theȱ Hainesȱ areaȱ toȱ reduceȱ thatȱ dependenceȱ onȱ dieselȱgeneration.ȱȱConnellyȱ Lakeȱ(onȱ theȱHainesȱ sideȱ ofȱ LynnȱCanal)ȱ andȱSchubeeȱ Lakeȱ (onȱ theȱ Skagwayȱsideȱofȱ LynnȱCanal)ȱareȱ bothȱbeingȱinvestigatedȱforȱpotentialȱhydroelectricȱgeneration.ȱȱ BothȱLakeȱprojectsȱareȱinȱtheȱprocessȱofȱreceivingȱpreliminaryȱFERCȱpermits.ȱȱConnellyȱLakeȱhasȱ theȱ capacityȱ toȱ produceȱ 10ȱ toȱ 15ȱ MW,ȱ andȱ Schubeeȱ Lakeȱ hasȱ aȱ 3ȱ toȱ 5ȱ MWȱ capacity.ȱȱTheȱ Connellyȱ Lakeȱ facilityȱ couldȱ beȱ operationalȱ byȱ 2015ȱ orȱ 2016.ȱȱSchubeeȱ Lakeȱ wouldȱ likelyȱ notȱ beȱ operationalȱuntilȱ2018ȱorȱ2019.ȱ TheȱMunicipalityȱofȱSkagwayȱisȱinvestigatingȱtheȱdevelopmentȱofȱaȱhydroelectricȱdamȱprojectȱatȱ Westȱ Creek.ȱȱThatȱ facilityȱ hasȱ theȱ capacityȱtoȱ produceȱ25ȱ toȱ 50ȱMWȱ ofȱ powerȱinȱ theȱ future.ȱȱTheȱ intentȱofȱthisȱprojectȱisȱtoȱcompleteȱtransmissionȱlinesȱtoȱconnectȱitȱtoȱtheȱCanadianȱelectricȱgrid,ȱ andȱsellȱpowerȱtoȱCanada.ȱȱNoȱFERCȱpermitsȱhaveȱbeenȱappliedȱforȱasȱyet,ȱandȱitȱisȱunlikelyȱthisȱ facilityȱwouldȱbeȱoperationalȱbeforeȱ2017ȱorȱ2018.ȱȱȱ Onȱ theȱ Canadianȱ sideȱ ofȱ theȱ border,ȱ Yukonȱ Energy,ȱ theȱ electricȱ utilityȱ servingȱ theȱ Yukonȱ Territoryȱ(YT),ȱ isȱdevelopingȱtwoȱsmallȱprojectsȱnearȱTutshiȱLakeȱ southȱofȱCarcross,ȱYT.ȱȱOneȱofȱ thoseȱ projectsȱ wouldȱ beȱ aȱ pumpedȱ storageȱ project.ȱȱTheȱ currentȱ transmissionȱ lineȱ fromȱ Whitehorse,ȱ YTȱ toȱ Carcross,ȱ YTȱ endsȱ aboutȱ 47ȱ milesȱ fromȱ theȱ Alaskaȱ border.ȱȱAPC’sȱ existingȱ 34.5ȱ kVȱ distributionȱ linesȱ extendȱ toȱ withinȱ approximatelyȱ 7ȱ milesȱ ofȱ theȱ Alaskaȱ border.ȱȱThisȱ projectȱ wouldȱ extendȱ theȱlineȱaboutȱ10ȱtoȱ15ȱ milesȱ closerȱtoȱtheȱ Alaskaȱborder,ȱreducingȱtheȱ gapȱ betweenȱtheȱtwoȱsystems.ȱȱYukonȱEnergyȱhasȱinterestȱinȱconnectingȱtoȱtheȱSkagwayȱelectricȱgridȱ inȱorderȱtoȱpurchaseȱpowerȱforȱtheȱincreasingȱminingȱactivityȱinȱtheȱYukonȱregion.1ȱ ȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱ 1ȱȱ Personalȱ conversationȱ withȱ Hectorȱ Campbell,ȱ Directorȱ ofȱ Resourceȱ Planningȱ &ȱ Regulatoryȱ Affairs,ȱYukonȱEnergy,ȱWhitehorse,ȱYT,ȱCanada,ȱOctoberȱ2011. BurroȱCreekȱHoldings,ȱLLCȱ BurroȱCreekȱHydroelectricȱStudyȱȱ ȱ PolarconsultȱAlaska,ȱInc.ȱ ȱ ȱ Novemberȱ2011ȱ–ȱFinalȱReportȱ ȱ 10ȱ 2.2.5 ExistingȱElectricȱLoadȱProfileȱ Tableȱ2Ȭ4ȱpresentsȱpowerȱgenerationȱandȱusageȱinȱHainesȱandȱSkagwayȱfromȱ2004ȱthroughȱ2010.ȱȱ Whileȱ thereȱ isȱ moreȱ demandȱ forȱ powerȱ inȱ theȱ summerȱ becauseȱ ofȱ theȱ increasedȱ populationȱ andȱ visitation,ȱ thereȱ isȱ ampleȱ existingȱ hydroelectricȱ generationȱ duringȱ theȱ summerȱ season.ȱȱDuringȱ theȱ winter,ȱ asȱ Goatȱ Lakeȱ drainsȱ down,ȱ andȱ Kasidayaȱ Creekȱ isȱ offȬline,ȱ supplementalȱ energyȱ isȱ generatedȱwithȱdieselȱgenerators.ȱȱȱ Tableȱ2Ȭ4:ȱȱRecentȱElectricȱSystemȱStatisticsȱ ȱ Parameterȱ 2004ȱ 2005ȱ 2006ȱ 2007ȱ 2008ȱ 2009ȱ 2010ȱ kWhȱGeneratedȱ 23,907,062ȱ 23,931,656ȱ NAȱ 28,020,445ȱ 31,738,747ȱ 28,309,127ȱ 28,251,646ȱ kWhȱGeneratedȱwithȱ Dieselȱ 761,200ȱ 189,680ȱ 219,160ȱ 1,296,970ȱ 3,073,780ȱ 1,236,110ȱ 238,820ȱ (Dieselȱasȱ%ȱofȱtotalȱ generation)ȱ 3.2%ȱ 0.8%ȱ NAȱ 4.6%ȱ 9.7%ȱ 4.4%ȱ 0.8%ȱ kWhȱSoldȱ 21,825,252ȱ 22,297,987ȱ NAȱ 24,172,427ȱ 25,210,170ȱ 25,063,025ȱ 24,286,111ȱ SystemȱLossesȱȱ (Generatedȱbutȱnotȱsold)ȱ 8.71%ȱ 6.83%ȱ NAȱ 13.73%ȱ 20.57%ȱ 11.47%ȱ 14.04%ȱ FuelȱPriceȱȱ (annualȱaverage)ȱ $1.14ȱ $1.61ȱ $2.01ȱ $2.57ȱ $2.84ȱ $2.17ȱ $2.68ȱ FuelȱUsedȱ(gallons)ȱ 60,312ȱ 19,081ȱ 20,375ȱ 90,969ȱ 210,423ȱ 86,836ȱ 18,236ȱ TotalȱFuelȱExpenseȱ 68,805ȱ 30,699ȱ 40,915ȱ 234,061ȱ 596,603ȱ 188,049ȱ $48,876ȱ TotalȱNonȬFuelȱExpenseȱ 995,989ȱ 1,276,902ȱ 1,007,552ȱ 846,263ȱ 968,983ȱ 1,207,594ȱ $3,060,050ȱ TotalȱUtilityȱExpenseȱ $1,064,794ȱ $1,307,601ȱ $1,048,467ȱ $1,080,324ȱ $1,565,586ȱ $1,395,643ȱ $3,108,926ȱ PowerȱCostȱperȱkWhȱsoldȱ $0.02ȱ $0.03ȱ NAȱ $0.02ȱ $0.03ȱ $0.03ȱ $0.06ȱ DieselȱGenerationȱ Efficiencyȱȱ(kWh/gal)ȱ 12.6ȱ 9.9ȱ 10.8ȱ 14.3ȱ 14.6ȱ 14.2ȱ 13.1ȱ Allȱ dataȱ isȱ compiledȱ fromȱ monthlyȱ Powerȱ Costȱ Equalizationȱ programȱ recordsȱ providedȱ byȱ AEA.ȱȱDataȱ isȱ inȱ stateȱ fiscalȱyearsȱ(Julyȱ1stȱthroughȱJuneȱ30th).ȱ kWh:ȱkilowattȬhoursȱ gal:ȱgallonsȱ ȱ Theȱ dataȱ aboveȱ showsȱ thatȱ moreȱ powerȱ isȱ consistentlyȱ generatedȱ byȱ APCȱ thanȱ isȱ consumedȱ inȱ theȱHainesȱandȱSkagwayȱmarkets.ȱȱThisȱisȱdueȱinȱpartȱtoȱinherentȱdistributionȱsystemȱlossesȱthatȱ areȱtypicalȱofȱanyȱutilityȱsystem.ȱȱȱȱ ȱ ȱ ȱ ȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱ ȱ BurroȱCreekȱHoldings,ȱLLCȱ BurroȱCreekȱHydroelectricȱStudyȱȱ ȱ PolarconsultȱAlaska,ȱInc.ȱ ȱ ȱ Novemberȱ2011ȱ–ȱFinalȱReportȱ ȱ 11ȱ 2.2.6 ProjectedȱFutureȱElectricȱLoadȱProfileȱ Tableȱ 2Ȭ5ȱ presentsȱ averageȱ populationȱ inȱ theȱ projectȱ areaȱ andȱ kilowattȬhoursȱ (kWh)ȱ soldȱ betweenȱ 2004ȱ andȱ 2010.ȱȱAnȱ intertieȱ toȱ theȱ Chilkatȱ Valleyȱ wasȱ completedȱ inȱ 2007,ȱ whichȱ wouldȱ haveȱ causedȱ anȱ increaseȱ inȱ powerȱ usageȱ inȱ thatȱ yearȱ thatȱ wouldȱ haveȱ flattenedȱ outȱ inȱ subsequentȱ years.ȱȱEvenȱ withȱ aȱ growthȱ ofȱ populationȱ ofȱ overȱ 10%ȱ betweenȱ 2009ȱ andȱ 2010,ȱ energyȱusageȱdroppedȱbyȱaboutȱ3%ȱinȱthatȱyear.ȱȱȱȱ ȱ Tableȱ2Ȭ5:ȱȱChangesȱinȱPopulationȱandȱEnergyȱConsumptionȱinȱHainesȱandȱSkagway,ȱ2004ȱtoȱ2010ȱ ȱ ȱ Yearȱ AnnualȱAverageȱ Populationȱ Percentȱ Changeȱ kWhȱSoldȱ Percentȱ Changeȱ kWhȱSoldȱ perȱResidentȱ Percentȱ Changeȱ 2004ȱ 3,726ȱȬ0.4%ȱ 21,825,252ȱȱ 5,858ȱȱ 2005ȱ 3,615ȱȬ3.0%ȱ 22,297,987ȱ 2.2%ȱ 6,168ȱ 5.3%ȱ 2006ȱ 3,677ȱ 1.7%ȱ 23,168,671ȱ 3.9%ȱ 6,301ȱ 2.2%ȱ 2007ȱ 3,669ȱȬ0.2%ȱ 24,172,427ȱ 4.3%ȱ 6,588ȱ 4.6%ȱ 2008ȱ 3,732ȱ 1.7%ȱ 25,210,170ȱ 4.3%ȱ 6,755ȱ 2.5%ȱ 2009ȱ 3,728ȱȬ0.1%ȱ 25,063,025ȱȬ0.6%ȱ 6,724ȱȬ0.5%ȱ 2010ȱ 4,121ȱ 10.6%ȱ 24,286,111ȱȬ3.1%ȱ 5,893ȱȬ12.4%ȱ Sources:ȱȱȱ Alaskaȱ Departmentȱ ofȱ Laborȱ andȱ Workforceȱ Development,ȱ andȱ Alaskaȱ Energyȱ Authorityȱ Powerȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱ CostȱEqualizationȱProgramȱreports.ȱȱȱ kWh:ȱȱ kilowattȬhourȱ Note:ȱȱ Anȱ intertieȱ toȱ theȱ Chilkatȱ Valleyȱ wasȱ completedȱ inȱ 2007.ȱȱThisȱ connectionȱ wouldȱ haveȱ causedȱ anȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱ increaseȱinȱpowerȱusageȱthatȱwouldȱhaveȱflattenedȱoutȱinȱsubsequentȱyears.ȱ Accordingȱ toȱ theȱ populationȱ projectionsȱ producedȱ byȱ theȱ Alaskaȱ Stateȱ demographer’sȱ office,ȱ populationȱ isȱ expectedȱ toȱ declineȱ byȱ anȱ averageȱ annualȱ rateȱ ofȱ 1.8%ȱ inȱ theȱ Hainesȱ Boroughȱ betweenȱ 2009ȱ andȱ 2034.ȱȱPopulationȱ projectionsȱ wereȱ notȱ developedȱ forȱ theȱ Municipalityȱ ofȱ Skagwayȱ alone,ȱ andȱ theȱ communitiesȱ combinedȱ withȱ Skagwayȱ inȱ theȱ projectionsȱ thatȱ wereȱ developedȱ areȱ soȱ economicallyȱ andȱ demographicallyȱ differentȱ fromȱ Skagway,ȱ thatȱ thisȱ dataȱ isȱ notȱusefulȱforȱanȱanalysisȱofȱfutureȱpopulationȱchangesȱinȱthatȱcommunity.ȱȱHowever,ȱitȱisȱlikelyȱ thatȱ Skagway’sȱ futureȱ populationȱ willȱ notȱ declineȱ asȱ rapidlyȱ asȱ isȱ projectedȱ forȱ theȱ Hainesȱ population.ȱ Cruiseȱshipȱtrafficȱhadȱbeenȱonȱaȱslightȱdecline,ȱbutȱisȱexpectedȱtoȱbeginȱincreasingȱagainȱinȱ2012.ȱȱ However,ȱSkagwayȱhasȱaȱsmallȱportȱarea,ȱandȱisȱnearlyȱatȱcapacityȱforȱtheȱnumberȱofȱshipsȱitȱcanȱ hostȱeachȱday.ȱȱThereȱisȱroomȱforȱgrowthȱinȱcruiseȱshipȱtrafficȱatȱHaines,ȱhowever.ȱȱȱ Increasedȱ energyȱ efficiencyȱ andȱ conservationȱ putsȱ downwardȱ pressureȱ onȱ growthȱ ofȱ energyȱ demand.ȱȱAsȱ aȱ resultȱ ofȱ theȱ slowingȱ populationȱ growth,ȱ slowingȱ perȱ capitaȱ energyȱ consumption,ȱ andȱ possibleȱ slowȱ growthȱ inȱ visitorsȱ toȱ theȱ area,ȱ growthȱ inȱ energyȱ demandȱ isȱ expectedȱtoȱdeclineȱslightly.ȱȱȱ BurroȱCreekȱHoldings,ȱLLCȱ BurroȱCreekȱHydroelectricȱStudyȱȱ ȱ PolarconsultȱAlaska,ȱInc.ȱ ȱ ȱ Novemberȱ2011ȱ–ȱFinalȱReportȱ ȱ 12ȱ Threeȱ potentialȱ futureȱ occurrencesȱ inȱ theȱ projectȱ areaȱ couldȱ putȱ additionalȱ loadsȱ onȱ energyȱ demand.ȱȱTwoȱ ofȱ thoseȱ occurrencesȱ areȱ somewhatȱ linkedȱ toȱ developmentȱ ofȱ additionalȱ alternativeȱenergyȱresources,ȱandȱoneȱmayȱbeȱinfluencedȱbyȱadditionȱofȱthoseȱresources.ȱȱȱȱ ¾ȱ Yukonȱ Energyȱ isȱ facingȱ growingȱ powerȱ demandȱ fromȱ miningȱ projectsȱ inȱ theȱ Yukonȱ Territory.ȱȱTheȱ companyȱ isȱ developingȱ twoȱ smallȱ projectsȱ nearȱ Tutshiȱ Lakeȱ southȱ ofȱ Carcross,ȱYT,ȱoneȱofȱwhichȱ isȱaȱpumpedȱstorageȱproject.ȱȱThatȱdevelopmentȱwouldȱbringȱ powerȱlinesȱcapableȱofȱtransmittingȱ5ȱtoȱ10ȱMWȱofȱpowerȱtoȱwithinȱaboutȱ35ȱmilesȱofȱtheȱ Alaskaȱ border,ȱ whichȱ isȱ nearȱ theȱ existingȱ limitȱ ofȱ APC’sȱ Skagwayȱ distributionȱ system.ȱȱ BurroȱCreekȱpowerȱwouldȱworkȱwellȱwithȱtheȱplannedȱpumpedȱstorageȱprojectȱatȱTutshiȱ Lake,ȱ andȱ Yukonȱ Energyȱ hasȱ expressedȱ interestȱ inȱ continuingȱ itsȱ transmissionȱ linesȱ toȱ theȱ Alaska/Canadaȱ borderȱ toȱ connectȱ withȱ theȱ Skagwayȱ gridȱ inȱ orderȱ toȱ purchaseȱ allȱ ofȱ theȱpowerȱ producedȱbyȱBurroȱ Creekȱ (atȱ$0.10ȱtoȱ$0.15ȱperȱ kWh)ȱ2.ȱȱIfȱ theȱ Municipalityȱofȱ Skagway’sȱ Westȱ Creekȱ orȱ otherȱ hydroelectricȱ powerȱ developmentsȱ occur,ȱ thisȱ transmissionȱconnectionȱcouldȱbeȱimprovedȱtoȱcarryȱmoreȱenergyȱintoȱCanada.ȱȱȱ ¾ȱ Withȱ developmentȱ ofȱ theȱ Connellyȱ and/orȱ Schubeeȱ Lakeȱ hydroelectricȱ facilitiesȱ (operationsȱ beginningȱ asȱ earlyȱ asȱ 2016),ȱ APCȱ wouldȱ likelyȱ developȱ shoreȱ powerȱ hookupsȱforȱ cruiseȱshipsȱ atȱSkagway.ȱȱUnderȱthisȱscenario,ȱitȱisȱpossibleȱthatȱAPCȱwouldȱ purchaseȱ allȱ ofȱ Burroȱ Creek’sȱ powerȱ duringȱ theȱ cruiseȱ shipȱ seasonȱ (aboutȱ 20ȱ weeksȱ beginningȱ inȱ midȬMay,ȱ andȱ endingȱ inȱ midȱ toȱ lateȬSeptember).ȱȱThisȱ wouldȱ beȱ aȱ substantialȱportionȱofȱ Burroȱ Creek’sȱ annualȱoutputȱ(8,410,000ȱ kWh,ȱorȱ58%ȱofȱ theȱannualȱ outputȱfromȱaȱ3.4ȱMWȱproject,ȱconfigurationȱ3DȬ70).ȱȱȱ ¾ȱ Withȱ developmentȱ ofȱ theȱ Palmerȱ mineȱ projectȱ northȱ ofȱ Haines,ȱ demandȱ forȱ powerȱ willȱ increaseȱ significantly,ȱ andȱ APCȱ wouldȱ likelyȱ purchaseȱ allȱ theȱ powerȱ thatȱ Burroȱ Creekȱ couldȱ produceȱ yearȱ around.ȱȱIfȱ theȱ resultsȱ ofȱ ongoingȱ mineralȱ explorationȱ areȱ favorable,ȱ mineȱ constructionȱ couldȱ beginȱ inȱ 2020,ȱ withȱ theȱ mineȱ becomingȱ operationalȱ inȱ 2022.ȱȱȱȱ Powerȱdemandȱ duringȱ constructionȱisȱassumedȱtoȱbeȱaboutȱ2ȱMW,ȱ increasingȱtoȱaboutȱ4ȱ MWȱ whenȱ operationsȱ begin.ȱȱDevelopmentȱ ofȱ thisȱ mineȱ isȱ dependentȱ uponȱ mineralȱ pricesȱandȱotherȱvariables.ȱȱȱ Aȱ forecastȱ ofȱ futureȱ electricȱ demandȱ inȱ theȱ Hainesȱ andȱ Skagwayȱ areaȱ isȱ basedȱ onȱ existingȱ andȱ expectedȱ futureȱ trendsȱ inȱ populationȱ andȱ energyȱ consumptionȱ growth,ȱ andȱ considersȱ potentialȱ futureȱdevelopmentȱthatȱwillȱimpactȱenergyȱdemand.ȱȱTableȱ2Ȭ6ȱandȱFigureȱ2Ȭ1ȱpresentȱaȱ50Ȭyearȱ forecastȱ ofȱ energyȱ demandȱ growthȱ inȱ theȱ Haines/Skagwayȱ areasȱ underȱ severalȱ scenarios.ȱȱTheȱ loadȱ growthȱ associatedȱ withȱ aȱ connectionȱ toȱ theȱ Yukonȱ Electricȱ gridȱ isȱ notȱ quantifiedȱ inȱ thisȱ study,ȱ asȱ theȱ Yukonȱ Energyȱ gridȱ isȱ substantiallyȱ largerȱ thanȱ theȱ Upperȱ Lynnȱ Canalȱ grid,ȱ andȱ aȱ connectionȱ toȱ theȱ Yukonȱ Energyȱ gridȱ isȱ assumedȱ toȱ provideȱ aȱ marketȱ forȱ theȱ entireȱ outputȱ ofȱ aȱ BurroȱCreekȱproject.ȱ ȱ ȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱ 2ȱȱ Personalȱ conversationȱ withȱ Hectorȱ Campbell,ȱ Directorȱ ofȱ Resourceȱ Planningȱ &ȱ Regulatoryȱ Affairs,ȱYukonȱEnergy,ȱWhitehorse,ȱYT,ȱCanada,ȱOctoberȱ2011. ȱ BurroȱCreekȱHoldings,ȱLLCȱ BurroȱCreekȱHydroelectricȱStudyȱȱ ȱ PolarconsultȱAlaska,ȱInc.ȱ ȱ ȱ Novemberȱ2011ȱ–ȱFinalȱReportȱ ȱ 13ȱ Tableȱ2Ȭ6:ȱȱHaines/SkagwayȱElectricalȱDemandȱForecast,ȱ2012ȱtoȱ2062ȱ ȱ NormalȱLoadȱScenarioȱ ȱȱȱ Yearȱ lowȱ Moderateȱ highȱ Moderateȱwithȱ CruiseȱShipsȱ Moderateȱ withȱMineȱ Moderateȱ withȱBothȱ 2012ȱ 24,286ȱ 24,286ȱ 24,286ȱ 24,286ȱ 24,286ȱ 24,286ȱ 2017ȱ 23,096ȱ 23,685ȱ 24,899ȱ 69,045ȱ 23,685ȱ 69,045ȱ 2022ȱ 21,964ȱ 23,099ȱ 25,528ȱ 68,459ȱ 58,139ȱ 103,499ȱ 2027ȱ 20,887ȱ 22,527ȱ 26,173ȱ 67,887ȱ 57,567ȱ 102,927ȱ 2032ȱ 19,864ȱ 21,969ȱ 26,833ȱ 67,329ȱ 57,009ȱ 102,369ȱ 2037ȱ 18,890ȱ 21,426ȱ 27,511ȱ 66,786ȱ 56,466ȱ 101,826ȱ 2042ȱ 17,964ȱ 20,895ȱ 28,206ȱ 66,255ȱ 55,935ȱ 101,295ȱ 2047ȱ 17,084ȱ 20,378ȱ 28,918ȱ 65,738ȱ 55,418ȱ 100,778ȱ 2052ȱ 16,247ȱ 19,874ȱ 29,648ȱ 65,234ȱ 54,914ȱ 100,274ȱ 2057ȱ 15,450ȱ 19,382ȱ 30,397ȱ 64,742ȱ 54,422ȱ 99,782ȱ 2062ȱ 14,693ȱ 18,902ȱ 31,164ȱ 64,262ȱ 53,942ȱ 99,302ȱ Source:ȱȱSoutheastȱStrategies,ȱOctoberȱ2011.ȱȱAllȱunitsȱareȱannualȱmegawattȬhours.ȱ Tableȱ2Ȭ6ȱandȱFigureȱ2Ȭ1ȱincorporateȱtheȱfollowingȱassumptions:ȱ Ɣȱ Underȱ theȱ Normalȱ Loadȱ Scenario,ȱ theȱ lowȱ growthȱ forecastȱ assumesȱ aȱ dropȱ inȱ energyȱ demandȱ ofȱ 1%ȱ perȱ yearȱ dueȱ toȱ forecastedȱ decliningȱ population,ȱ andȱ increasedȱ energyȱ efficiencyȱfromȱimprovedȱtechnology.ȱȱȱ Ɣȱ Underȱ theȱ Normalȱ Loadȱ Scenario,ȱ theȱ moderateȱ growthȱ forecastȱ assumesȱ aȱ dropȱ inȱ energyȱ demandȱ ofȱ 0.5%ȱ perȱ yearȱ dueȱ mainlyȱ toȱ increasedȱ energyȱ efficiencyȱ fromȱ improvedȱtechnology,ȱandȱassumesȱonlyȱaȱslightȱdropȱinȱpopulation.ȱȱȱ Ɣȱ Underȱ theȱ Normalȱ Loadȱ Scenario,ȱ theȱ highȱ growthȱ forecastȱ assumesȱ anȱ increaseȱ inȱ energyȱdemandȱofȱ0.5%ȱperȱyearȱdueȱmainlyȱaȱslightȱincreaseȱinȱpopulationȱandȱbusinessȱ activityȱinȱtheȱarea.ȱȱȱ Ɣȱ Theȱ Moderateȱ Growthȱ Forecastȱ withȱ Cruiseȱ Shipsȱ scenarioȱ assumesȱ theȱ moderateȱ growthȱ forecastȱ forȱ theȱ normalȱ energyȱ load,ȱ withȱ theȱ developmentȱ ofȱ shoreȱ powerȱ hookȱ upsȱ forȱ cruiseȱ shipsȱinȱ Skagwayȱbeginningȱ inȱ2017.ȱȱThisȱscenarioȱ assumesȱanȱ averageȱofȱ 3ȱ shipsȱ perȱ dayȱ tyingȱ intoȱ shoreȱ powerȱ forȱ 12ȱ hoursȱ perȱ day,ȱ forȱ 140ȱ days.ȱȱThisȱ forecastȱ assumesȱ eachȱ shipȱ requiresȱ anȱ averageȱ ofȱ 9ȱ MWȱ ofȱ power,ȱ andȱ theȱ totalȱ additionalȱ powerȱdemandȱperȱseasonȱwouldȱequalȱ45,360ȱMWh.ȱȱȱ Ɣȱ Theȱ Moderateȱ Growthȱ Forecastȱ withȱ Mineȱ scenarioȱ assumesȱ thatȱ theȱ Palmerȱ mineȱ northȱ ofȱHainesȱwillȱbeȱdeveloped,ȱandȱconnectȱtoȱtheȱpowerȱgridȱatȱHaines.ȱȱItȱisȱassumedȱthatȱ constructionȱ ofȱ theȱ mineȱ beginsȱ inȱ 2020,ȱ andȱ continuesȱ forȱ twoȱ years.ȱȱMineȱ operationsȱ wouldȱ beginȱ inȱ 2022,ȱ andȱ continueȱ atȱ aȱ steadyȱ paceȱ throughȱ atȱ leastȱ theȱ endȱ ofȱ theȱ forecastȱ period.ȱȱThatȱ loadȱ wasȱ addedȱ toȱ theȱ moderateȱ growthȱ forecastȱ forȱ theȱ normalȱ BurroȱCreekȱHoldings,ȱLLCȱ BurroȱCreekȱHydroelectricȱStudyȱȱ ȱ PolarconsultȱAlaska,ȱInc.ȱ ȱ ȱ Novemberȱ2011ȱ–ȱFinalȱReportȱ ȱ 14ȱ energyȱ loadȱ forȱ thisȱ scenario.ȱȱMineȱ operationsȱ areȱ assumedȱ toȱ requireȱ anȱ averageȱ ofȱ 4ȱ MWȱ yearȱ aroundȱ (theȱ Kensingtonȱ Mineȱ northȱ ofȱ Juneauȱ currentlyȱ usesȱ 6ȱ toȱ 7ȱ MWȱ yearȱ around),ȱwithȱhalfȱthatȱloadȱusedȱduringȱtheȱconstructionȱphaseȱ(2020ȱandȱ2021).ȱȱȱ ȱ Figureȱ2Ȭ1:ȱȱHaines/SkagwayȱModerateȱElectricalȱDemandȱForecast,ȱ2012ȱtoȱ2062ȱ ȱ ȱ Source:ȱSoutheastȱStrategies,ȱ2011.ȱ MWh:ȱȱmegawattȬhours.ȱ BurroȱCreekȱHoldings,ȱLLCȱ BurroȱCreekȱHydroelectricȱStudyȱȱ ȱ PolarconsultȱAlaska,ȱInc.ȱ ȱ ȱ Novemberȱ2011ȱ–ȱFinalȱReportȱ ȱ 15ȱ 3.0 HYDROELECTRICȱDEVELOPMENTȱOPTIONSȱȱ 3.1 RESOURCEȱDESCRIPTIONȱ Burroȱ Creekȱ isȱ locatedȱ approximatelyȱ twoȱ milesȱ southwestȱ ofȱ Skagway,ȱ Alaskaȱ (Figureȱ AȬ1).ȱȱ Theȱ Burroȱ Creekȱ basinȱ isȱ inȱ aȱ transitionalȱ areaȱ betweenȱ theȱ moderateȱ maritimeȱ climateȱ ofȱ southeastȱ Alaskaȱandȱtheȱmoreȱ extremeȱcontinentalȱ climateȱofȱ theȱ Yukon.ȱȱAnnualȱ precipitationȱ inȱ theȱ Burroȱ Creekȱ basinȱ isȱ estimatedȱ atȱ 80ȱ inches,ȱ basedȱ onȱ measuredȱ Burroȱ Creekȱ flowsȱ andȱ largeȬscaleȱ isohyetalȱ mapsȱ ofȱ Alaska.ȱȱTotalȱ annualȱ precipitationȱ inȱ Skagwayȱ isȱ 26ȱ inches.ȱȱTheȱ differenceȱbetweenȱmeasuredȱprecipitationȱinȱSkagwayȱandȱestimatedȱprecipitationȱinȱtheȱBurroȱ Creekȱ basinȱ isȱ attributedȱ toȱ orographicȱ effectsȱ thatȱ resultȱ inȱ microȬclimateȱ variationsȱ (rainȱ shadows,ȱetc.)ȱinȱtheȱarea’sȱmountainousȱterrainȱ3.ȱȱȱ Burroȱ Creekȱ drainsȱ anȱ eastȬfacingȱ basinȱ runningȱ onȱ aȱ southeastȱ –ȱ northwestȱ axisȱ thatȱ isȱ 2ȱ toȱ 3ȱ milesȱ wideȱ andȱ 5.5ȱ milesȱ long,ȱ totalingȱ approximatelyȱ 12ȱ squareȱ milesȱ inȱ area.ȱȱTheȱ basinȱ extendsȱ fromȱ tidewaterȱ onȱ Lynnȱ Canalȱ upȱ toȱ aȱ seriesȱ ofȱ 4,500ȱ toȱ 5,500ȱ footȱ peaksȱ toȱ theȱ northȱ andȱ4,000ȱtoȱ 4,500ȱ footȱpeaksȱtoȱtheȱ south.ȱȱProminentȱpeaksȱincludeȱFaceȱ Mountainȱ (4,830ȱ feet),ȱ Parsonsȱ Peakȱ (5,600ȱ feet+),ȱ andȱ Mountȱ Hardingȱ (5,321ȱ feet).ȱȱSeveralȱ otherȱ peaksȱ 4,000ȱ toȱ 5,500ȱ feetȱ inȱ elevationȱ surroundȱ theȱ basin.ȱȱTheȱ basinȱ hasȱ littleȱ toȱ noȱ glaciation,ȱ andȱ isȱ forestedȱ toȱ anȱ elevationȱofȱapproximatelyȱ3,000ȱfeet.ȱȱTheȱbasinȱisȱborderedȱbyȱWestȱCreek,ȱaȱtributaryȱofȱTaiyaȱ River,ȱ toȱ theȱ north,ȱ andȱ byȱ Ferebeeȱ Riverȱ toȱ theȱ westȱ andȱ south.ȱȱMinorȱ drainagesȱ dischargingȱ directlyȱ toȱ Lynnȱ Canalȱ areȱ locatedȱ northeastȱ andȱ southeastȱ ofȱ theȱ Burroȱ Creekȱ basin.ȱȱTheȱ basinȱ isȱ mountainous,ȱ withȱ littleȱ evidenceȱ ofȱ extensiveȱ alluvialȱ orȱ fluvialȱ depositsȱ exceptȱ alongȱ theȱ valleyȱbottomȱwhereȱBurroȱCreekȱflows.ȱȱBedrockȱisȱvisibleȱatȱtheȱsurfaceȱinȱmanyȱareas.ȱȱȱ Theȱ lowerȱ approximatelyȱ 3,550ȱ feetȱ (0.67ȱ miles)ȱ ofȱ Burroȱ Creekȱ isȱ locatedȱ onȱ USSȱ 1560,ȱ aȱ 121Ȭ acreȱ propertyȱ ownedȱ byȱ Burroȱ Creekȱ Holdings,ȱ LLC.ȱȱTheȱ upperȱ reachȱ ofȱ Burroȱ Creekȱ toȱ itsȱ headwatersȱisȱlocatedȱonȱFederalȱlandȱmanagedȱbyȱtheȱBureauȱofȱLandȱManagementȱ(BLM).ȱȱȱ Fromȱ tidewaterȱ upȱ toȱ mileȱ 0.13,ȱ Burroȱ Creekȱ runsȱ atȱ aȱ gradientȱ ofȱ approximatelyȱ 7%ȱ overȱ aȱ combinationȱ ofȱ exposedȱ bedrock,ȱ cobbles,ȱ andȱ boulders.ȱȱThereȱ isȱ anȱ approximatelyȱ 15Ȭfootȱ waterfallȱ atȱ mileȱ 0.13ȱ (Photographȱ BȬ2).ȱȱFromȱ mileȱ 0.13ȱ toȱ 0.42,ȱ theȱ creekȱ gradientȱ isȱ approximatelyȱ 12%.ȱȱAtȱ mileȱ 0.42,ȱ thereȱ isȱ aȱ diversionȱ structureȱ forȱ theȱ existingȱ smallȱ hydroȱ plantȱ atȱ anȱ elevationȱ ofȱ 235ȱ feetȱ atȱ theȱ headȱ ofȱ aȱ seriesȱ ofȱ rockȱ sillsȱ thatȱ Burroȱ Creekȱ cascadesȱ downȱ(PhotographȱBȬ6).ȱȱBetweenȱ thisȱ diversionȱ structureȱ andȱ theȱwesterlyȱpropertyȱline,ȱ Burroȱ Creekȱ runsȱ atȱ approximatelyȱ 8%,ȱ risingȱ toȱ anȱ elevationȱ ofȱ 340ȱ feetȱ atȱ theȱ westerlyȱ USSȱ 1560ȱ propertyȱ line.ȱȱTheȱ creekȱ cascadesȱ overȱ largeȱ bouldersȱ andȱ cobblesȱ throughoutȱ thisȱ reachȱ (PhotographȱBȬ15).ȱȱUpstreamȱfromȱtheȱpropertyȱline,ȱBurroȱCreekȱrunsȱatȱapproximatelyȱ10%ȱtoȱ mileȱ1.00ȱ(elevationȱ500ȱfeet),ȱthenȱatȱ5ȱtoȱ8%ȱtoȱmileȱ2.58ȱ(elevationȱ1,160ȱfeet).ȱȱMajorȱtributariesȱ flowȱ intoȱ Burroȱ Creekȱ betweenȱ mileȱ 2.58ȱ andȱ 2.74.ȱȱAboveȱ these,ȱ Burroȱ Creekȱ continuesȱ forȱ approximatelyȱ sixȱ moreȱ milesȱ toȱ itsȱ alpineȱ headwaters.ȱȱTheȱ reachȱ fromȱ mileȱ 2.58ȱ downȱ toȱ tidewater,ȱorȱaȱsubsetȱthereof,ȱisȱofȱinterestȱforȱhydropowerȱdevelopment.ȱ ȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱ 3ȱPrecipitationȱdataȱandȱsourcesȱareȱdiscussedȱinȱSectionȱC.1ȱofȱAppendixȱC.ȱ BurroȱCreekȱHoldings,ȱLLCȱ BurroȱCreekȱHydroelectricȱStudyȱȱ ȱ PolarconsultȱAlaska,ȱInc.ȱ ȱ ȱ Novemberȱ2011ȱ–ȱFinalȱReportȱ ȱ 16ȱ 3.2 OVERVIEWȱOFȱPROJECTȱCONFIGURATIONSȱCONSIDEREDȱ Theȱ Burroȱ Creekȱ basinȱ lacksȱ anyȱ notableȱ damȱ sitesȱ suitableȱ forȱ significantȱ storageȱ reservoirs.ȱȱ Whileȱ damsȱ mayȱ beȱ technicallyȱ feasibleȱ atȱ Burroȱ Creek,ȱ theȱ costȱ ofȱ aȱ damȱ isȱ expectedȱ toȱ beȱ outȱ ofȱproportionȱtoȱtheȱvalueȱofȱtheȱresultingȱstorageȱandȱhydropowerȱregulationȱforȱaȱprojectȱlargeȱ enoughȱ toȱ exportȱ powerȱ toȱ theȱ Upperȱ Lynnȱ Canalȱ market.ȱȱAccordingly,ȱ thisȱ studyȱ onlyȱ considersȱrunȬofȬriverȱhydropowerȱoptionsȱatȱBurroȱCreek.ȱȱȱ Severalȱ potentialȱ diversionȱ sites,ȱ powerhouseȱ sites,ȱ andȱ designȱ flowsȱ wereȱ evaluatedȱ forȱ Burroȱ Creek.ȱȱTheseȱ areȱ summarizedȱ inȱ Tableȱ 3Ȭ1ȱ andȱ discussedȱ inȱ Appendixȱ G.ȱȱTheȱ fiveȱ differentȱ diversionȱ locations,ȱ numberedȱ 1ȱ throughȱ 5,ȱ areȱ shownȱ onȱ FiguresȱȱAȬ2,ȱ AȬ3,ȱ andȱ AȬ4ȱ inȱ Appendixȱ A.ȱȱTheȱ fourȱ differentȱ powerhouseȱ locations,ȱ numberedȱ Aȱ throughȱ D,ȱ areȱ shownȱ inȱ FigureȱAȬ3.ȱȱȱ Tableȱ3Ȭ1:ȱȱProjectȱConfigurationsȱConsideredȱ Parameterȱ ValuesȱConsideredȱ DiversionȱLocationȱ 1.ȱȱ1,160ȱfootȱelevationȱȱ 2.ȱȱ1,000ȱfootȱelevationȱȱ 3.ȱȱ800ȱfootȱelevationȱ 4.ȱȱPropertyȱLineȱ(340ȱfootȱelevation)ȱ 5.ȱȱExistingȱDiversionȱ(235ȱfootȱelevation)ȱ PowerhouseȱLocationȱ A.ȱȱExistingȱPowerhouseȱ(33ȱfootȱelevation)ȱ B.ȱȱBelowȱFallsȱ(50ȱfootȱelevation)ȱ C.ȱȱAboveȱFallsȱ(80ȱfootȱelevation)ȱ D.ȱȱNorthȱofȱDockȱ(50ȱfootȱelevation)ȱ DesignȱFlowȱ 50ȱcfsȱ(30Ȭinchȱpenstock)ȱ 70ȱcfsȱ(36Ȭinchȱpenstock)ȱ 110ȱcfsȱ(42Ȭinchȱpenstock)ȱ CONFIGURATIONȱ CODESȱANDȱ NOMENCLATUREȱ Forȱbrevity,ȱprojectȱconfigurationsȱinȱthisȱreportȱareȱreferencedȱinȱ shorthand.ȱȱConfigurationȱ‘3DȬ70’ȱreferencesȱaȱprojectȱwithȱaȱdiversionȱatȱ siteȱ‘3’,ȱaȱpowerhouseȱatȱsiteȱ‘D’,ȱandȱaȱdesignȱflowȱofȱ70ȱcfs.ȱ Source:ȱPolarconsultȱAlaska,ȱInc.,ȱ2011.ȱ 3.3 RECOMMENDEDȱPROJECTȱCONFIGURATIONSȱȱ Combinationsȱ ofȱ theȱ projectȱ parametersȱ listedȱ inȱ Tableȱ 3Ȭ1ȱ wereȱ analyzedȱ forȱ estimatedȱ cost,ȱ estimatedȱ energyȱ generation,ȱ andȱ environmentalȱ issues.ȱȱToȱ aȱ significantȱ degree,ȱ theȱ mostȱ favorableȱ projectȱ configurationȱ atȱ Burroȱ Creekȱ willȱ dependȱ onȱ theȱ needsȱ ofȱ theȱ marketȱ thatȱ theȱ projectȱisȱbuiltȱtoȱserve.ȱȱThisȱsectionȱpresentsȱprojectȱconfigurationȱ‘3D’ȱwithȱaȱdesignȱflowȱofȱ70ȱ cfsȱ (referredȱ toȱ asȱ configurationȱ ‘3DȬ70’),ȱ whichȱ hasȱ theȱ lowestȱ estimatedȱ salesȱ priceȱ ofȱ power,ȱ assumingȱ allȱ projectȱ outputȱ isȱ soldȱ andȱ noȱ grantsȱ areȱ usedȱ forȱ theȱ project’sȱ developmentȱ costs.ȱȱ Severalȱ otherȱ projectȱ configurationsȱ haveȱ similarȱ estimatedȱ salesȱ pricesȱ asȱ configurationȱ 3DȬ70,ȱ andȱ areȱ alsoȱ technicallyȱ similarȱ toȱ 3DȬ70.ȱȱOtherȱ projectȱ configurationsȱ areȱ discussedȱ inȱ Appendixȱ G,ȱ andȱ estimatedȱ costsȱ andȱ energyȱ salesȱ pricesȱ forȱ otherȱ projectȱ configurationsȱ areȱ presentedȱ inȱ Appendixȱ H.ȱȱTableȱ HȬ2ȱ providesȱ estimatedȱ energyȱ salesȱ pricesȱ forȱ aȱ selectionȱ ofȱ projectȱconfigurations,ȱfinancingȱscenarios,ȱandȱmarketȱscenarios.ȱ BurroȱCreekȱHoldings,ȱLLCȱ BurroȱCreekȱHydroelectricȱStudyȱȱ ȱ PolarconsultȱAlaska,ȱInc.ȱ ȱ ȱ Novemberȱ2011ȱ–ȱFinalȱReportȱ ȱ 17ȱ Projectȱ configurationȱ 3DȬ70ȱ hasȱ anȱ intakeȱ atȱ 800ȱ feetȱ elevationȱ (siteȱ 3)ȱ andȱ aȱ designȱ flowȱ ofȱ 70ȱ cubicȱ feetȱ perȱ secondȱ (cfs).ȱȱTheȱ estimatedȱ salesȱ priceȱ forȱ energyȱ generatedȱ byȱ thisȱ projectȱ configuration,ȱ assumingȱ theȱ fullȱ outputȱ isȱ sold,ȱ isȱ approximatelyȱ 12ȱ centsȱ perȱ kWh,ȱ usingȱ theȱ financialȱassumptionsȱdescribedȱinȱAppendixȱH.ȱȱȱ Atȱ thisȱ levelȱ ofȱ analysis,ȱ theȱ costȱ ofȱ powerȱ forȱ thisȱ projectȱ configurationȱ isȱ essentiallyȱ theȱ sameȱ forȱ theȱ fourȱ powerhouseȱ sitesȱ consideredȱ inȱ thisȱ study.ȱȱTheȱ differencesȱ inȱ penstockȱ lengthȱ andȱ totalȱ projectȱ headȱ betweenȱ theȱ variousȱ powerhouseȱ sitesȱ amountsȱ toȱ lessȱ thanȱ 5%ȱ variationȱ inȱ theȱestimatedȱsalesȱprice,ȱwhichȱisȱwithinȱtheȱmarginȱofȱerrorȱofȱthisȱstudy.ȱȱȱ Becauseȱ theȱ marketȱ forȱ powerȱ fromȱ thisȱ projectȱ isȱ notȱ wellȱ definedȱ atȱ thisȱ time,ȱ thereȱ isȱ latitudeȱ toȱ tailorȱ theȱ projectȱ toȱ theȱ needsȱ ofȱ theȱ customer.ȱȱTheȱ fullȱ rangeȱ ofȱ projectȱ configurationsȱ outlinedȱ inȱ Tableȱ 3Ȭ1ȱ haveȱ installedȱcapacitiesȱrangingȱfromȱ430ȱkWȱ upȱ toȱ 7.3ȱ MW,ȱandȱ averageȱ netȱ annualȱ energyȱ outputȱ fromȱ 2,041,000ȱ kWhȱ toȱ 20,581,000ȱ kWh.ȱȱThisȱ detailedȱ informationȱ inȱ providedȱinȱTableȱHȬ2ȱofȱAppendixȱH.ȱ 3.4 ESTIMATEDȱENERGYȱGENERATIONȱ Theȱ installedȱ capacityȱ ofȱ configurationȱ 3DȬ70ȱ isȱ 3.4ȱ MW,ȱ andȱ theȱ estimatedȱ annualȱ netȱ energyȱ generationȱ forȱ theȱ recommendedȱprojectȱ isȱ 13,127,000ȱkWh,ȱ forȱaȱ capacityȱfactorȱ ofȱ44%.ȱȱFigureȱ 3Ȭ1ȱ presentsȱ theȱ estimatedȱ seasonalȱ distributionȱ ofȱ thisȱ energyȱ output.ȱȱSeasonalȱ energyȱ outputȱ forȱotherȱprojectȱconfigurationsȱisȱpresentedȱinȱTableȱHȬ2ȱofȱAppendixȱH.ȱ Figureȱ3Ȭ1:ȱȱEstimatedȱAverageȱAnnualȱNetȱOutputȱofȱProjectȱ3DȬ70ȱȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ Source:ȱPolarconsultȱAlaska,ȱInc.,ȱ2011.ȱ 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov DecEstimatedAverageDailyProjectNetPowerOutput(kW)0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 EstimatedAverageDailyNetEnergyGeneration(kWh)EstimatedAverageDailyNet PowerOutput(kW) EstimatedAverageDailyNet EnergyGeneration(kWh) BurroȱCreekȱHoldings,ȱLLCȱ BurroȱCreekȱHydroelectricȱStudyȱȱ ȱ PolarconsultȱAlaska,ȱInc.ȱ ȱ ȱ Novemberȱ2011ȱ–ȱFinalȱReportȱ ȱ 18ȱ 3.5 DESCRIPTIONȱOFȱPROJECTȱFEATURESȱ Keyȱfeaturesȱofȱprojectȱ3DȬ70ȱareȱdescribedȱinȱtheȱfollowingȱsections.ȱ 3.5.1 TransmissionȱLineȱ Aȱ transmissionȱ lineȱ isȱ requiredȱ toȱ getȱ theȱ outputȱ ofȱ theȱ Burroȱ Creekȱ projectȱ toȱ marketsȱ inȱ Skagwayȱ orȱ beyond.ȱȱFourȱ potentialȱ transmissionȱ lineȱ configurationsȱ wereȱ evaluatedȱ forȱ thisȱ study,ȱ andȱ areȱ describedȱ inȱ Appendixȱ G,ȱ sectionȱ G.3.ȱȱTheȱ mostȱeconomicalȱ transmissionȱ lineȱ isȱ aȱsubmarineȱcableȱroutedȱfromȱBurroȱCreekȱtoȱSkagway.ȱȱAllȱprojectȱconfigurationsȱdiscussedȱinȱ thisȱ studyȱ includeȱ theȱ costȱ ofȱ aȱ transmissionȱ lineȱ toȱ Skagway,ȱ butȱ doȱ notȱ includeȱ otherȱ transmissionȱlineȱupgradesȱorȱextensionsȱ(e.g.,ȱfromȱtheȱAPCȱsystemȱnorthȱtoȱCarcross).ȱ Theȱ submarineȱ cableȱ routeȱ fromȱ Burroȱ Creekȱ toȱ Skagwayȱ isȱ shownȱ onȱ Figureȱ AȬ5ȱ inȱ Appendixȱ A.ȱȱTheȱ routeȱ isȱ approximatelyȱ 2.2ȱ milesȱ long,ȱ andȱ hasȱ aȱ maximumȱ depthȱ ofȱ approximatelyȱ 600ȱ feet.ȱȱTheȱ submarineȱ cableȱ installationȱ wouldȱ consistȱ ofȱ fourȱ individualȱ cables,ȱ threeȱ cablesȱ forȱ theȱ powerȱ intertieȱ andȱ aȱ fourthȱ cableȱ asȱ aȱ spareȱ inȱ theȱ eventȱ oneȱ ofȱ theȱ threeȱ inȬserviceȱ cablesȱ fails.ȱȱThisȱ approachȱ isȱ preferredȱ overȱ aȱ singleȱ bundledȱ cable,ȱ asȱ theȱ cablesȱ canȱ beȱ individuallyȱ laidȱ byȱ smallerȱ vesselsȱ availableȱ onȱ theȱ westȱ coastȱ ofȱ Northȱ America.ȱȱAȱ bundledȱ cableȱ wouldȱ likelyȱ requireȱ mobilizationȱ ofȱ aȱ moreȱ specializedȱ cableȱ layingȱ shipȱ fromȱ Asiaȱ orȱ Europe,ȱ whichȱ isȱ expectedȱ toȱ beȱ prohibitivelyȱ expensiveȱ forȱ thisȱ project.ȱȱAlso,ȱ inȱ theȱ eventȱ ofȱ aȱ cableȱ failure,ȱ aȱ singleȱ failedȱ cableȱ willȱ beȱ easierȱ toȱ liftȱ offȱ theȱ bottomȱ ofȱ Lynnȱ Canalȱ forȱ repairȱ thanȱ aȱ bundledȱ cable.ȱ Theȱcablesȱwouldȱbeȱaȱjacketedȱfullȱconcentricȱneutralȱpowerȱcableȱwithȱ1/0ȱconductorȱinsulatedȱ forȱ25ȱkVȱACȱservice.ȱȱTheȱintertieȱwouldȱoperateȱatȱaȱvoltageȱofȱ24.9ȱkV.ȱȱCableȱarmorȱwouldȱbeȱ requiredȱ atȱ theȱ shoreȱ endsȱ toȱ protectȱ fromȱ abrasionȱ dueȱ toȱ waveȱ action.ȱȱMoreȱ studyȱ wouldȱ beȱ necessaryȱ toȱ determineȱ ifȱ cableȱ armorȱ isȱ necessaryȱ alongȱ theȱ entireȱ cableȱ route.ȱȱCurrents,ȱ bottomȱ conditions,ȱ commercialȱ fishingȱ activity,ȱ andȱ marineȱ practicesȱ (anchoring)ȱ wouldȱ allȱ beȱ determinantsȱ inȱ whetherȱ armorȱ isȱ neededȱ forȱ theȱ submarineȱ cables.ȱȱTheȱ feasibilityȱ costȱ estimatesȱassumeȱarmorȱisȱprovidedȱonlyȱforȱtheȱ800ȱfeetȱofȱcableȱnearestȱtoȱshoreȱatȱeachȱend.ȱȱȱ 3.5.2 ControlsȱandȱSystemȱIntegrationȱ Becauseȱ Burroȱ Creekȱ isȱ onlyȱ approximatelyȱ 2ȱ milesȱ lineȬofȬsightȱ fromȱ Skagway,ȱ aȱ dedicatedȱ secureȱ radioȱ communicationsȱ linkȱ isȱ suitableȱ forȱ communicationsȱ betweenȱ theȱ Burroȱ Creekȱ projectȱ andȱ theȱ APCȱ system.ȱȱAsȱ wouldȱ beȱ definedȱ inȱ theȱ powerȱ salesȱ agreementȱ betweenȱ BCHȱ andȱ APC,ȱ APCȱ wouldȱ haveȱ theȱ abilityȱ toȱ controlȱ projectȱ outputȱ asȱ partȱ ofȱ overallȱ managementȱ andȱoperationȱofȱgenerationȱassetsȱservingȱtheȱUpperȱLynnȱCanalȱgrid.ȱȱȱ Burroȱ Creekȱ operationsȱ wouldȱ beȱ controlledȱ byȱ anȱ onȬsiteȱ controlȱ systemȱ thatȱ wouldȱ monitorȱ flowȱ inȱ Burroȱ Creekȱ andȱ regulateȱ powerȱ generationȱ accordingly.ȱȱControlȱ andȱ powerȱ circuitsȱ wouldȱ beȱ runȱ alongȱ theȱ penstockȱ routeȱ fromȱ theȱ powerȱ houseȱ upȱ toȱ theȱ diversion/intakeȱ siteȱ toȱ monitorȱconditionsȱatȱtheȱintakeȱandȱactuateȱgatesȱandȱrelatedȱequipmentȱtoȱmaintainȱtheȱintakeȱ systemȱinȱanȱoperationalȱcondition.ȱȱȱ Theȱ hydroȱ turbineȱ wouldȱ beȱ regulatedȱ byȱ spearȱ valves,ȱ unlikeȱ theȱ existingȱ Burroȱ Creekȱ projectȱ whichȱ isȱ regulatedȱ byȱ deflectorȱ control.ȱȱSpearȱ valveȱ regulationȱ wouldȱ enableȱ theȱ largerȱ projectȱ BurroȱCreekȱHoldings,ȱLLCȱ BurroȱCreekȱHydroelectricȱStudyȱȱ ȱ PolarconsultȱAlaska,ȱInc.ȱ ȱ ȱ Novemberȱ2011ȱ–ȱFinalȱReportȱ ȱ 19ȱ toȱoperateȱatȱ lowȱflows.ȱȱThisȱisȱnotȱ anȱ issueȱforȱtheȱexistingȱproject,ȱwhichȱhasȱ adequateȱflowȱ toȱ useȱdeflectorȱcontrolȱforȱfrequencyȱregulation.ȱ 3.5.3 AccessȱandȱStagingȱ Allȱ constructionȱ equipment,ȱ material,ȱ supplies,ȱ andȱ personnelȱ wouldȱ arriveȱ atȱ Burroȱ Creekȱ byȱ barge.ȱȱTheȱexistingȱ landingȱ areaȱ isȱ adequateȱforȱlandingȱ constructionȱ materialsȱ andȱ equipment.ȱȱ Existingȱ clearedȱ areasȱ atȱ Burroȱ Creekȱ areȱ likelyȱ adequateȱ forȱ projectȱ staging.ȱȱIfȱ not,ȱ stagingȱ couldȱ alsoȱ occurȱ inȱ Skagway,ȱ orȱ additionalȱ stagingȱ areasȱ couldȱ beȱ clearedȱ toȱ theȱ northȱ ofȱ theȱ existingȱ dock.ȱȱThereȱ isȱ adequateȱ spaceȱ inȱ thisȱ areaȱ toȱ maintainȱ aȱ vegetatedȱ bufferȱ alongȱ theȱ shoreȱtoȱscreenȱstagingȱactivitiesȱfromȱviewȱalongȱLynnȱCanal.ȱȱȱ Existingȱ trailsȱ onȱ USSȱ 1560ȱ extendȱ upȱ towardsȱ theȱ existingȱ intakeȱ atȱ elevationȱ 235ȱ feet.ȱȱTheseȱ trailsȱ wouldȱ beȱ improvedȱ toȱ provideȱ forȱ equipmentȱ accessȱ forȱ constructionȱ ofȱ thisȱ project.ȱȱ Terrainȱ aboveȱ theȱ existingȱ intakeȱ isȱ favorableȱ forȱ constructionȱ ofȱ trailsȱ upȱ toȱ theȱ westerlyȱ propertyȱ lineȱ ofȱ USSȱ 1560.ȱȱAboveȱ theȱ propertyȱ line,ȱ theȱ terrainȱ becomesȱ steep,ȱ andȱ significantȱ trailȬbuildingȱ workȱ willȱ beȱ necessaryȱ toȱ sideȬhillȱ aȱ benchȱ upȱ toȱ theȱ intakeȱ site.ȱȱSideȱ slopesȱ areȱ consistentlyȱ 50ȱ toȱ 100%ȱ forȱ approximatelyȱ 3,500ȱ feetȱ ofȱ theȱ penstockȱ /ȱ accessȱ routeȱ throughȱ thisȱ area.ȱȱDueȱtoȱtheȱprevalenceȱofȱshallowȱbedrockȱinȱthisȱarea,ȱsignificantȱblastingȱwillȱbeȱrequiredȱ toȱ establishȱ anȱ accessȱ trailȱ andȱ penstockȱ bench.ȱȱBecauseȱ ofȱ theȱ locationȱ upȱ inȱ Burroȱ Creekȱ valley,ȱ thisȱ accessȱ routeȱ andȱ penstockȱ benchȱ willȱ notȱ beȱ visibleȱ fromȱ Skagwayȱ butȱ willȱ beȱ partiallyȱvisibleȱtoȱshipȱtrafficȱonȱLynnȱCanal.ȱȱItȱwillȱbeȱvisibleȱfromȱtheȱair.ȱȱȱȱ 3.5.4 ConstructionȱScheduleȱ Constructionȱisȱscheduledȱ toȱoccurȱ overȱtwoȱ seasons.ȱȱTheȱfirstȱconstructionȱseasonȱwouldȱfocusȱ onȱ buildingȱ theȱ accessȱ trailȱ upȱ toȱ theȱ intake,ȱ buildingȱ theȱ powerhouseȱ andȱ tailrace,ȱ andȱ installingȱtheȱpenstock.ȱȱȱ Theȱ secondȱ constructionȱ seasonȱ wouldȱ startȱ withȱ constructionȱ ofȱ theȱ inȬstreamȱ diversionȱ structureȱ inȱ March.ȱȱThisȱ wouldȱ coincideȱ withȱ aȱ periodȱ ofȱ reliableȱ lowȱ flowȱ inȱ Burroȱ Creek,ȱ simplifyingȱ theȱ inȬstreamȱ constructionȱ workȱ forȱ theȱ diversionȱ structure.ȱȱDuringȱ theȱ summer,ȱ theȱ penstockȱ wouldȱ beȱ installed,ȱ theȱ submarineȱ cableȱ wouldȱ beȱ laid,ȱ andȱ theȱ turbine/generatorȱ equipmentȱwouldȱbeȱinstalledȱinȱtheȱpowerhouse.ȱȱȱ Constructionȱ wouldȱ beȱ completedȱ andȱ theȱ projectȱ commissionedȱ inȱ theȱ fallȱ ofȱ theȱ secondȱ constructionȱyear.ȱȱȱ 3.5.5 Intakeȱ Whileȱ thereȱ areȱ numerousȱ exposedȱ bedrockȱ sillsȱ onȱ theȱ lowerȱ reachesȱ ofȱ Burroȱ Creekȱ betweenȱ tidewaterȱ andȱ theȱ existingȱ intakeȱ atȱmileȱ 0.42,ȱ thereȱdoesȱ notȱ appearȱ toȱbeȱ anyȱexposedȱ bedrockȱ inȱ Burroȱ Creekȱ aboveȱ theȱ vicinityȱ ofȱ theȱ existingȱ intake.ȱȱThisȱ conclusionȱ isȱ basedȱ onȱ fieldȱ investigationsȱ upȱ toȱ theȱ 700ȱ footȱ elevationȱ andȱ reviewȱ ofȱ aerialȱ imageryȱ upȱ toȱ theȱ 1,160ȱ footȱ elevation.ȱȱThroughoutȱ theȱ reachȱ fromȱ mileȱ 0.42ȱ upȱ toȱ mileȱ 2.58ȱ (whichȱ includesȱ conceptualȱ intakeȱ sitesȱ 1,ȱ 2,ȱ 3,ȱ andȱ 4),ȱ Burroȱ Creekȱ cascadesȱ overȱ cobblesȱ andȱ bouldersȱ atȱ gradientsȱ ofȱ 5ȱ toȱ 10%.ȱȱNoȱ notableȱ featuresȱ wereȱ identifiedȱ inȱ thisȱ reachȱ thatȱ presentȱ especiallyȱ favorableȱ intakeȱ BurroȱCreekȱHoldings,ȱLLCȱ BurroȱCreekȱHydroelectricȱStudyȱȱ ȱ PolarconsultȱAlaska,ȱInc.ȱ ȱ ȱ Novemberȱ2011ȱ–ȱFinalȱReportȱ ȱ 20ȱ sites.ȱȱHowever,ȱ thereȱ areȱ threeȱ apparentȱ avalancheȱ hazardȱ areasȱ inȱ thisȱ reachȱ whereȱ projectȱ intakesȱ shouldȱ notȱ beȱ built.ȱȱTheseȱ areȱ approximatelyȱ locatedȱ fromȱ mileȱ 1.23ȱ toȱ 1.36,ȱ fromȱ mileȱ 2.06ȱ toȱ mileȱ 2.12,ȱ andȱ fromȱ mileȱ 2.18ȱ toȱ mileȱ 2.41ȱ alongȱ Burroȱ Creek.ȱȱAllȱ ofȱ theseȱ avalancheȱ chutesȱextendȱdownȱfromȱtheȱsouthȱsideȱofȱBurroȱCreek,ȱwhereasȱtheȱpenstockȱwouldȱbeȱlocatedȱ onȱtheȱnorthȱsideȱofȱBurroȱCreek.ȱȱȱȱȱ Theȱconceptualȱ diversionȱ andȱintakeȱ structureȱ designȱ forȱaȱprojectȱ withȱ anȱ intakeȱatȱsitesȱ1,ȱ 2,ȱ3,ȱ orȱ4ȱ(orȱinȱbetweenȱtheseȱlocations)ȱcallsȱforȱaȱreinforcedȱconcreteȱwallȱfoundedȱonȱalluviumȱandȱ buttressedȱ withȱ localȱ fill.ȱȱIfȱ geotechnicalȱ investigationsȱ identifyȱ shallowȱ bedrockȱ atȱ theȱ intakeȱ site,ȱ thatȱ wouldȱ beȱ advantageousȱ forȱ foundationȱ designȱ andȱ alsoȱ sealingȱ offȱ subsurfaceȱ flow.ȱȱ Theȱ intakeȱ wouldȱ incorporateȱ ObermeyerȬtypeȱ gatesȱ toȱ passȱ debrisȱandȱ floodȱ flows,ȱandȱ wouldȱ featureȱ aȱ protectedȱ forebayȱ toȱ divertȱ projectȱ flowsȱ fromȱ theȱ mainȱ channelȱ ofȱ theȱ creekȱ toȱ aȱ coandaȬtypeȱinclinedȱscreenȱintakeȱstructureȱtoȱscreenȱwaterȱandȱadmitȱitȱtoȱtheȱpenstock.ȱȱȱȱ 3.5.6 Penstockȱ Theȱ penstockȱ forȱ configurationȱ 3DȬ70ȱ wouldȱ beȱ anȱ approximatelyȱ 7,600ȱ footȱ long,ȱ 36Ȭinchȱ diameterȱ pipeline.ȱȱTheȱ firstȱ approximatelyȱ 5,000ȱ feetȱ ofȱ pipeȱ wouldȱ beȱ relativelyȱ lowȱ pressureȱ (underȱ 100ȱ psiȱ staticȱ pressure),ȱ andȱ canȱ beȱ constructedȱ ofȱ HDPEȱ orȱ PVCȱ pipe.ȱȱTheȱ lastȱ approximatelyȱ 2,600ȱ feetȱ ofȱ pipeȱ wouldȱ beȱ higherȱ pressureȱ (100ȱ toȱ 330ȱ psiȱ staticȱ pressure),ȱ andȱ wouldȱbeȱconstructedȱofȱsteelȱpipe.ȱȱȱ Theȱ pipeȱ canȱ beȱ installedȱ aboveȱ groundȱ orȱ buried.ȱȱThisȱ willȱ dependȱ onȱ theȱ geotechnicalȱ conditionsȱ alongȱ theȱ penstockȱ /ȱ accessȱ route,ȱ andȱ theȱ finalȱ designȱ andȱ configurationȱ ofȱ theȱ intakeȱ bench.ȱȱAȱ buriedȱ pipelineȱ wouldȱ beȱ moreȱ protectedȱ fromȱ coldȱ weatherȱ andȱ potentialȱ damageȱ fromȱ treeȱ falls.ȱȱAboveȱ groundȱ pipesȱ ofȱ thisȱ diameterȱ haveȱ littleȱ riskȱ ofȱ freezingȱ inȱ southeastȱ Alaskaȱ providedȱ theȱ waterȱ isȱ keptȱ movingȱ throughȱ theȱ pipe.ȱȱIfȱ theȱ projectȱ isȱ offȱ lineȱ inȱ theȱ winterȱ months,ȱ theȱ penstockȱ shouldȱ beȱ drainedȱ orȱ allowedȱ toȱ keepȱ flowingȱ throughȱ aȱ bypassȱvalveȱatȱtheȱpowerhouse.ȱȱȱ Penstocksȱ forȱ otherȱ projectȱ configurationsȱ wouldȱ beȱ similarȱ asȱ thatȱ forȱ configurationȱ 3DȬ70ȱ asȱ describedȱ above.ȱȱTheȱ diameter,ȱ length,ȱ andȱ transitionȱ pointsȱ betweenȱ materialsȱ andȱ pipeȱ wallsȱ wouldȱvaryȱasȱdictatedȱbyȱtheȱtechnicalȱdetailsȱofȱtheȱparticularȱconfiguration.ȱ 3.5.7 PowerhouseȱandȱTailraceȱ Theȱ powerhouseȱ wouldȱ beȱ anȱ approximatelyȱ 36Ȭfootȱ byȱ 36Ȭfootȱ buildingȱ housingȱ theȱ turbine,ȱ generator,ȱ switchgear,ȱ andȱ controlsȱ forȱ theȱ project.ȱȱTheȱ powerhouseȱ isȱ assumedȱ toȱ beȱ sitedȱ atȱ theȱlocationȱofȱtheȱ existingȱprojectȱpowerhouse,ȱbutȱ canȱbeȱmovedȱtoȱanyȱ ofȱ theȱotherȱthreeȱ sitesȱ listedȱinȱTableȱ3Ȭ1ȱwithȱaȱveryȱmodestȱimpactȱonȱprojectȱperformanceȱorȱeconomics.ȱȱȱ Theȱturbineȱ wouldȱ beȱaȱtwoȬjetȱPeltonȱturbineȱfittedȱ withȱ spearȱ valvesȱ forȱ powerȱ andȱfrequencyȱ regulation.ȱȱTheȱPeltonȱwheelȱwouldȱbeȱapproximatelyȱ30ȱinchesȱinȱdiameterȱandȱwouldȱdriveȱaȱ 720ȱrpmȱsynchronousȱgenerator.ȱȱȱȱȱ Theȱtailraceȱwouldȱbeȱanȱopenȱditchȱarmoredȱwithȱlocalȱcobblesȱandȱbouldersȱreturningȱwaterȱtoȱ BurroȱCreekȱjustȱaboveȱtidewater.ȱȱȱ BurroȱCreekȱHoldings,ȱLLCȱ BurroȱCreekȱHydroelectricȱStudyȱȱ ȱ PolarconsultȱAlaska,ȱInc.ȱ ȱ ȱ Novemberȱ2011ȱ–ȱFinalȱReportȱ ȱ 21ȱ 4.0 MARKETȱANALYSISȱANDȱOPPORTUNITIESȱ 4.1 MARKETȱFORȱPOWERȱ Currently,ȱ APCȱ hasȱ slightȱ excessȱ hydroelectricȱ capacityȱ inȱ summer,ȱ andȱ notȱ quiteȱ enoughȱ hydroelectricȱcapacityȱinȱwinterȱforȱtheȱcommunitiesȱtheyȱserve.ȱȱInȱrecentȱyears,ȱpowerȱdemandȱ onȱtheȱAPCȱsystemȱhasȱdeclinedȱslightly,ȱlikelyȱdueȱtoȱaȱslightȱdeclineȱinȱvisitorsȱtoȱtheȱareaȱandȱ anȱ increaseȱ inȱ energyȱ efficiency.ȱȱWhileȱ thereȱ areȱ aȱ numberȱ ofȱ existingȱ opportunitiesȱ forȱ saleȱ ofȱ Burroȱ Creekȱ power,ȱ theseȱ existingȱ opportunitiesȱ doȱ notȱ amountȱ toȱ aȱ marketȱ forȱ theȱ fullȱ outputȱ ofȱaȱprojectȱatȱBurroȱCreek.ȱȱȱTheseȱexistingȱopportunitiesȱareȱdiscussedȱinȱSectionȱ4.1.1.ȱ Thereȱ areȱ severalȱ emergingȱ developmentsȱ withinȱ theȱ Upperȱ Lynnȱ Canalȱ regionȱ thatȱ couldȱ buyȱ theȱ fullȱ outputȱ ofȱ aȱ Burroȱ Creekȱ project.ȱȱTheseȱ emergingȱ opportunitiesȱ includeȱ cruiseȱ linesȱ wantingȱtoȱuseȱshoreȱpowerȱwhileȱinȱportȱatȱSkagway,ȱtheȱPalmerȱProjectȱminingȱprospectȱnorthȱ ofȱ Haines,ȱ andȱ theȱ Canadianȱ powerȱ gridȱ ifȱ anȱ intertieȱ isȱ built.ȱȱTheseȱ opportunitiesȱ haveȱ developmentȱ schedulesȱ thatȱ areȱ similarȱ toȱ theȱ scheduleȱ forȱ Burroȱ Creek,ȱ andȱ areȱ discussedȱ inȱ Sectionȱ4.1.2.ȱȱȱȱ Sectionȱ 2.2.6ȱ presentsȱ longȬtermȱ energyȱ forecastsȱ underȱ aȱ varietyȱ ofȱ growthȱ andȱ largeȱ projectȱ scenarios.ȱȱȱTheȱ loadȱ growthȱ associatedȱ withȱ aȱ connectionȱ toȱ theȱ Yukonȱ Electricȱ gridȱ isȱ notȱ quantifiedȱ inȱ thisȱ study,ȱ asȱ theȱ Yukonȱ Energyȱ gridȱ isȱ substantiallyȱ largerȱ thanȱ theȱ Upperȱ Lynnȱ Canalȱ grid,ȱ andȱ aȱ connectionȱ toȱ theȱ Yukonȱ Energyȱ gridȱ isȱ assumedȱ toȱ provideȱ aȱ marketȱ forȱ theȱ entireȱoutputȱofȱaȱBurroȱCreekȱproject.ȱ 4.1.1 ExistingȱMarketȱOpportunitiesȱ Withoutȱ futureȱ developmentȱ ofȱ newȱ marketsȱ forȱ powerȱ inȱ Upperȱ Lynnȱ Canalȱ (discussedȱ inȱ Sectionȱ 4.1.2),ȱ itȱ wouldȱ beȱ possibleȱ forȱ Burroȱ Creekȱ toȱ sellȱ powerȱ inȱ aȱ fewȱ instances.ȱȱAtȱ thisȱ time,ȱ theseȱ opportunitiesȱ areȱ aȱ viableȱ marketȱ forȱ onlyȱ aȱ portionȱ ofȱ theȱ outputȱ ofȱ Burroȱ Creek.ȱȱ Theseȱopportunitiesȱare:ȱ ¾ȱ Theȱ APCȱ generatesȱ anȱ averageȱ ofȱ 900,000ȱ kWhȱ ofȱ electricityȱ byȱ burningȱ dieselȱ fuelȱ eachȱ year.ȱȱThisȱmostlyȱoccursȱinȱlateȱwinter,ȱwhenȱtheirȱhydroelectricȱfacilitiesȱareȱshutȱdownȱ forȱ maintenanceȱ andȱ repairs.ȱȱTheȱ APCȱ mayȱ purchaseȱ Burroȱ Creekȱ powerȱ duringȱ thoseȱ times,ȱespeciallyȱ inȱ lateȱ winter,ȱwhenȱ Goatȱ Lakeȱ hasȱ drainedȱ down,ȱ andȱKasidayaȱ Creekȱ isȱ stillȱ frozenȱ toȱ avoidȱ dieselȱ generation.ȱȱLateȱ winterȱ powerȱ purchaseȱ couldȱ amountȱ toȱ upȱ toȱ 20ȱ daysȱ perȱ year.ȱȱȱUnfortunately,ȱ thisȱ isȱ theȱ timeȱ ofȱ yearȱ thatȱ Burroȱ Creekȱ hasȱ aȱ lowȱ flow,ȱ soȱ doesȱ notȱ produceȱ aȱ lotȱ ofȱ power.ȱȱRepresentativesȱ ofȱ APCȱ estimatedȱ theirȱ avoidedȱ costȱ ofȱ dieselȱ generationȱ inȱ theȱ HainesȬSkagwayȱ areaȱ atȱ aboutȱ $0.28ȱ perȱ kWh.ȱȱ Thatȱrateȱwillȱvaryȱwithȱchangesȱinȱtheȱpriceȱofȱdieselȱfuel.ȱ ¾ȱ Theȱ IPECȱ mayȱ purchaseȱ Burroȱ Creekȱ powerȱ ifȱ theȱ costȱ isȱ lessȱ thanȱ theȱ APCȱ powerȱ itȱ currentlyȱ purchasesȱ (aboutȱ 241,000ȱ kWhȱ perȱ yearȱ atȱ aboutȱ 12.35ȱ centsȱ perȱ kWh).ȱȱ However,ȱ IPECȱ continuesȱ toȱ acquireȱ andȱ developȱ itsȱ ownȱ sourcesȱ ofȱ power,ȱ soȱ mayȱ notȱ needȱBurroȱCreekȱpowerȱinȱtheȱlongȱterm.ȱȱAPCȱwouldȱchargeȱBCHȱaȱfeeȱtoȱmoveȱenergyȱ acrossȱ APC’sȱ distributionȱ systemȱ (calledȱ ‘wheeling’).ȱȱThisȱ feeȱ isȱ estimatedȱ atȱ twoȱ centsȱ perȱkWh.ȱ !!"# $% ! "# $ % & '! ( '!)*( '! '! + ( '!)* '!)* ,- . '!)* / 0 * 1 - 2 3 3 & 4 '! & 5 '!)* . '! 6 7 % & 8 % 9 !" &! #'(%% 7 3 , - : " 3 : * * 3 * - :* 3 * ; < 5& . '!( 45; = 7 3 * - : " . . ,- / % % ; 05< 7 ( > 7 - / & ?0 '! 7 , '! ( / & 5 ! @ 8 ! )8 ' : " :* A & 7 ' .2 BurroȱCreekȱHoldings,ȱLLCȱ BurroȱCreekȱHydroelectricȱStudyȱȱ ȱ PolarconsultȱAlaska,ȱInc.ȱ ȱ ȱ Novemberȱ2011ȱ–ȱFinalȱReportȱ ȱ 23ȱ beginningȱ inȱ midȬMay,ȱ andȱ endingȱ inȱ midȱ toȱ lateȬSeptember).ȱȱThisȱ wouldȱ beȱ betweenȱ 71ȱandȱ81%ȱofȱBurroȱCreek’sȱannualȱoutput,ȱdependingȱonȱtheȱprojectȱconfiguration.ȱȱȱȱ ¾ȱ Withȱ developmentȱ ofȱ theȱ Palmerȱ mineȱ projectȱ northȱ ofȱ Haines,ȱ demandȱ forȱ powerȱ willȱ increaseȱ significantly,ȱ andȱ APCȱ wouldȱ likelyȱ purchaseȱ allȱ theȱ powerȱ thatȱ Burroȱ Creekȱ couldȱ produceȱ yearȱ around.ȱȱIfȱ theȱ resultsȱ ofȱ ongoingȱ mineralȱ explorationȱ areȱ favorable,ȱ mineȱ constructionȱ couldȱ beginȱ inȱ 2020,ȱ withȱ theȱ mineȱ becomingȱ operationalȱ inȱ 2022.ȱȱȱȱ Powerȱdemandȱ duringȱ constructionȱisȱassumedȱtoȱbeȱaboutȱ2ȱMW,ȱ increasingȱtoȱaboutȱ4ȱ MWȱ whenȱ operationsȱ begin.ȱȱDevelopmentȱ ofȱ thisȱ mineȱ isȱ dependentȱ uponȱ mineralȱ pricesȱandȱotherȱvariables.ȱȱȱ 4.2 PROJECTȱCOSTȱESTIMATESȱ Appendixȱ Hȱ presentsȱ estimatedȱ capitalȱ costsȱ forȱ 15ȱ differentȱ projectȱ configurationsȱ atȱ Burroȱ Creek.ȱȱTheȱ 15ȱ configurationsȱ includeȱ threeȱ differentȱ designȱ flowsȱ (50ȱ cfs,ȱ 70ȱ cfs,ȱ andȱ 110ȱ cfs)ȱ atȱ fiveȱ differentȱ diversionȱ elevations.ȱȱTheȱ capitalȱ costȱ estimatesȱ forȱ theseȱ projectȱ configurationsȱ rangeȱ fromȱ $4,342,000ȱ toȱ $21,069,000,ȱ andȱ inȱ allȱ casesȱ includeȱ aȱ transmissionȱ lineȱ toȱ Skagway.ȱȱ Appendixȱ Hȱ alsoȱ providesȱ estimatedȱ annualizedȱ costsȱ forȱ theseȱ projectȱ configurations,ȱ includingȱ debtȱ service,ȱ maintenance,ȱ operations,ȱ andȱ periodicȱ replacementȱ andȱ refurbishmentȱ rangingȱbetweenȱ$437,000ȱandȱ$4,082,000.ȱȱȱ 4.3 POTENTIALȱBURROȱCREEKȱBUSINESSȱOPPORTUNITIESȱ Appendixȱ Hȱ developsȱ costȱ estimatesȱ forȱ variousȱ projectȱ configurations,ȱ asȱ wellȱ asȱ estimatedȱ powerȱoutput,ȱ financingȱscenarios,ȱandȱestimatedȱ salesȱpricesȱ(centsȱ perȱkWh)ȱrequiredȱforȱeachȱ configuration.ȱȱForȱeachȱprojectȱconfiguration,ȱscenariosȱwereȱdevelopedȱforȱpartialȱpowerȱsales,ȱ andȱsalesȱofȱtheȱfullȱoutputȱofȱeachȱproject.ȱȱȱ Projectsȱ producingȱ aȱ baseȱ powerȱ costȱ ofȱ aboutȱ $0.10ȱ perȱ kWhȱ andȱ lowerȱ wouldȱ allowȱ Burroȱ Creekȱ powerȱ toȱ beȱ competitiveȱ inȱ currentȱ marketsȱ suchȱ asȱ wholesaleȱ toȱ IPEC,ȱ andȱ salesȱ toȱ businessȱ heldȱ inȱ common.ȱȱForȱ bothȱ ofȱ thoseȱ powerȱ markets,ȱ aȱ $0.02ȱ perȱ kWhȱ wheelingȱ chargeȱ forȱ useȱ ofȱ APCȱ transmissionȱ linesȱ wouldȱ beȱ addedȱ toȱ theȱ baseȱ charge,ȱ bringingȱ theȱ highestȱ feasibleȱ powerȱ costsȱ toȱ aboutȱ $0.12ȱ perȱ kWhȱ toȱ theȱ consumer.ȱȱIfȱ aȱ wholesaleȱ purchaseȱ agreementȱ withȱ APCȱ couldȱ beȱ developed,ȱ aȱ wheelingȱ chargeȱ wouldȱ beȱ unnecessary,ȱ andȱ projectsȱ withȱ slightlyȱ higherȱ kWhȱ costsȱ wouldȱ beȱ feasible.ȱȱHowever,ȱ asȱ APCȱ hasȱ beenȱ hesitantȱ toȱ stateȱ conditionsȱ andȱ costsȱ atȱ whichȱ theyȱ wouldȱ beȱ willingȱ toȱ purchaseȱ powerȱ fromȱ Burroȱ Creek,ȱ itȱ isȱ difficultȱ toȱ determineȱ whichȱ projectȱ configurationsȱ wouldȱ beȱ feasibleȱ ifȱ suchȱ anȱ agreementȱcouldȱbeȱreached.ȱȱȱ Becauseȱ itȱ isȱ unlikelyȱ thatȱ Yukonȱ Energyȱ wouldȱ considerȱ buildingȱ aȱ transmissionȱ lineȱ connectingȱitsȱgridȱtoȱtheȱUpperȱLynnȱCanalȱsystemȱwithoutȱaȱpromiseȱofȱsalesȱofȱatȱleastȱ4ȱMWȱ inȱ capacity,ȱ theȱ proposedȱ projectsȱ wereȱ narrowedȱ toȱ onlyȱ thoseȱ withȱ anȱ installedȱ capacityȱ ofȱ overȱ4ȱMW.ȱȱHowever,ȱsmallerȱprojectsȱmayȱalsoȱbeȱfeasibleȱifȱaȱconnectionȱtoȱtheȱCanadianȱgridȱ isȱ notȱ developed,ȱ asȱ longȱ asȱ thoseȱ projectȱ costsȱ remainedȱ belowȱ $0.10ȱ perȱ kWh,ȱ orȱ aȱ wholesaleȱ powerȱ purchaseȱ agreementȱ withȱ APCȱ couldȱ beȱ reached.ȱȱNoneȱ ofȱ theȱ projectsȱ analyzedȱ inȱ Appendixȱ Hȱ wouldȱ haveȱ costsȱ atȱ orȱ belowȱ $0.10ȱ perȱ kWhȱ unlessȱ someȱ grantȱ fundingȱ forȱ thoseȱ projectsȱcanȱbeȱobtained.ȱ BurroȱCreekȱHoldings,ȱLLCȱ BurroȱCreekȱHydroelectricȱStudyȱȱ ȱ PolarconsultȱAlaska,ȱInc.ȱ ȱ ȱ Novemberȱ2011ȱ–ȱFinalȱReportȱ ȱ 24ȱ Tableȱ 4.1ȱshowsȱthat,ȱprovidedȱgrantȱfundingȱcanȱbeȱfoundȱforȱtheseȱfourȱprojectsȱwithȱinstalledȱ capacitiesȱ ofȱ overȱ 4ȱ MW,ȱ theyȱ wouldȱ produceȱ powerȱ forȱ aȱ lowȱ enoughȱ costȱ toȱ beȱ attractiveȱ toȱ Yukonȱ Energy.ȱȱRepresentativesȱ ofȱ Yukonȱ Energyȱ statedȱ thatȱ theyȱ wouldȱ purchaseȱ powerȱ forȱ betweenȱ$0.10ȱperȱkWhȱandȱ$0.15ȱperȱkWh.ȱ Tableȱ4Ȭ1:ȱComparisonȱofȱPotentialȱProjectȱCostsȱandȱRequiredȱPowerȱPricesȱProjectsȱOverȱ4ȱ MWȱinȱCapacityȱ ȱ ProjectȱConfigurationsȱ ȱ 1DȬ70ȱ 1DȬ110ȱ 2DȬ110ȱ 3DȬ110ȱ InstalledȱCapacityȱ(kW)ȱ 4,400ȱ 7,300ȱ 6,500ȱ 5,250ȱ Avg.ȱAnn.ȱNetȱEnergyȱOutputȱ(MWh)ȱ 17,943ȱ 20,581ȱ 18,798ȱ 15,915ȱ EstimatedȱCapitalȱCostsȱ $17,229,000ȱ $21,069,000ȱ $16,750,000ȱ $13,765,000ȱ EstimatedȱRequiredȱPowerȱSalesȱRateȱwithȱ50%ȱGrantȱFundingȱ*ȱ($/kWh)ȱ ȱȱȱȱȱ50%ȱGrantȱ–ȱFullȱYearȱSales**ȱ $0.102ȱ $0.113ȱ $0.097ȱ $0.095ȱ Source:ȱPolarconsultȱAlaska,ȱInc.,ȱOctoberȱ2011.ȱ *ȱȱ Grantȱfundingȱisȱcappedȱatȱ$8,500,000.ȱ **ȱȱ Theȱ estimatedȱ powerȱ salesȱ rateȱ includesȱ aȱ $0.02ȱ perȱ kWhȱ wheelingȱ chargeȱ forȱ useȱ ofȱ APCȱ transmissionȱlines.ȱ 4.4 OTHERȱINTANGIBLEȱPROJECTȱBENEFITSȱ Inȱ additionȱ toȱ theȱ obviousȱ monetaryȱ benefitsȱ toȱ theȱ powerȱ producer,ȱ theȱ Burroȱ Creekȱ hydroelectricȱprojectȱprovidesȱbenefitsȱtoȱtheȱpublic,ȱincluding:ȱ ¾Thisȱcompletedȱfacilityȱwillȱprovideȱaȱreliableȱadditionalȱsourceȱofȱrenewableȱenergyȱthatȱ canȱ beȱ usedȱ toȱ replaceȱ dieselȱ generationȱ whenȱ otherȱ hydroelectricȱ facilitiesȱ onȱ theȱ gridȱ areȱnotȱoperable.ȱȱȱ ¾Theȱ completedȱ facilityȱ couldȱ replaceȱ cruiseȱ shipȱ generatorȱ powerȱ withȱ shoreȱ power,ȱ reducingȱairȱemissionsȱinȱtheȱSkagwayȱareaȱinȱtheȱsummerȱseason.ȱ ¾Theȱ completedȱ facilityȱ willȱ increaseȱ theȱ reliabilityȱ ofȱ powerȱ generationȱ inȱ theȱ Upperȱ LynnȱCanalȱregion.ȱȱȱ ¾Constructionȱ ofȱ thisȱ projectȱ willȱ provideȱshortȱ termȱ jobsȱ inȱ theȱ areaȱ duringȱ construction,ȱ andȱ aȱ varietyȱ ofȱ employmentȱ opportunitiesȱ overȱ theȱ longȱ termȱ forȱ management,ȱ maintenance,ȱoperations,ȱandȱrepairs.ȱ ¾Economicȱ multipliersȱ inȱ theȱ localȱ economyȱ dueȱ toȱ theȱ factȱ thatȱ moreȱ energyȱ willȱ beȱ generatedȱfromȱlocalȱresourcesȱandȱlocalȱlaborȱvs.ȱimportedȱdieselȱorȱbunkerȱfuels.ȱȱȱ ¾SecondaryȱbenefitsȱfromȱhavingȱmoreȱstablyȬpricedȱhydropowerȱonȱtheȱlocalȱutilityȱgrid.ȱȱȱ ¾Reducedȱ volumeȱ ofȱ hydrocarbonȱ fuelsȱ beingȱ bargedȱ throughȱ theȱ watersȱ ofȱ Southeast,ȱ reducingȱtheȱprobabilityȱofȱfuelȱspills.ȱȱȱ ThisȱprojectȱfitsȱwellȱwithinȱtheȱcriteriaȱforȱbeneficialȱprojectsȱasȱevaluatedȱbyȱtheȱAlaskaȱEnergyȱ Authority.ȱ BurroȱCreekȱHoldings,ȱLLCȱ BurroȱCreekȱHydroelectricȱStudyȱȱ ȱ PolarconsultȱAlaska,ȱInc.ȱ ȱ ȱ Novemberȱ2011ȱ–ȱFinalȱReportȱ ȱ 25ȱ 5.0 CONCLUSIONSȱANDȱRECOMMENDATIONSȱ Thereȱ isȱ aȱ viableȱ runȬofȬriverȱ hydroelectricȱ resourceȱ atȱ Burroȱ Creek.ȱȱAȱ rangeȱ ofȱ projectȱ configurationsȱ allȱ usingȱ Federalȱ landȱ aboveȱ BCHȱ propertyȱ appearȱ toȱ beȱ viableȱ providedȱ aȱ marketȱdevelopsȱ forȱ theȱpowerȱ theyȱwouldȱproduce.ȱȱTheseȱprojectsȱhaveȱcapacitiesȱofȱ3.4ȱtoȱ7.3ȱ MWȱ andȱ annualȱ generationȱ potentialȱ ofȱ 13,127ȱ toȱ 20,581ȱ MWh.ȱȱTheȱ specificȱ projectȱ configurationȱ thatȱ warrantsȱ developmentȱ willȱ dependȱ onȱ theȱ needsȱ ofȱ theȱ marketȱ itȱ wouldȱ serve.ȱȱCapitalȱ costȱ estimatesȱ andȱ someȱ financialȱ scenariosȱ forȱ selectȱ projectȱ configurationsȱ areȱ presentedȱinȱAppendixȱH.ȱȱȱȱȱ Ifȱ theȱ entireȱ outputȱ ofȱ theȱ mostȱ economicalȱ projectȱ configurationȱ (Configurationȱ 3DȬ70)ȱ canȱ beȱ sold,ȱ theȱ salesȱ priceȱ isȱ estimatedȱ atȱ 12ȱ centsȱ perȱ kWh,ȱ assumingȱ aȱ debtȬfinancedȱ project.ȱȱ Differentȱbusinessȱmodelsȱorȱequityȱstructuresȱwouldȱresultȱinȱhigherȱorȱlowerȱenergyȱpricing.ȱȱȱ Atȱ thisȱ time,ȱ thereȱ isȱ notȱ aȱ marketȱ forȱ theȱ fullȱ outputȱ ofȱ aȱ projectȱ atȱ Burroȱ Creekȱ ofȱ thisȱ size.ȱȱ Smallerȱ projectsȱ downȱ toȱ theȱ existingȱ 15ȱ kWȱ projectȱ areȱ alsoȱ technicallyȱ viable,ȱ howeverȱ theyȱ wouldȱrequireȱ higherȱperȱkWhȱsalesȱ pricesȱtoȱbeȱeconomicallyȱviableȱforȱsaleȱtoȱtheȱUpperȱLynnȱ Canalȱ market.ȱȱThereȱ areȱ aȱ numberȱ ofȱ emergingȱ marketȱ opportunitiesȱ inȱ theȱ Upperȱ Lynnȱ Canalȱ regionȱ thatȱ mayȱ presentȱ aȱ marketȱ forȱ theȱ fullȱ outputȱ ofȱ Burroȱ Creek,ȱ andȱ thatȱ haveȱ similarȱ developmentȱschedulesȱasȱaȱBurroȱCreekȱproject.ȱȱȱ Becauseȱ theȱ marketȱ forȱ theȱ outputȱ ofȱ thisȱ projectȱ isȱ stillȱ developing,ȱ thereȱ isȱ someȱ latitudeȱ toȱ tailorȱ theȱ installedȱ capacityȱ ofȱ theȱ projectȱ toȱ marketȱ demand.ȱȱThisȱ canȱ beȱ accomplishedȱ byȱ adjustingȱ theȱ diversionȱ locationȱ and/orȱ theȱ designȱ flow,ȱ asȱ neitherȱ parameterȱ isȱ stronglyȱ constrainedȱbyȱtheȱcharacteristicsȱofȱtheȱresourceȱatȱBurroȱCreek.ȱ 5.1 ȱDEVELOPMENTȱPLANȱ&ȱSCHEDULEȱ Theȱ estimatedȱ developmentȱ scheduleȱ forȱ aȱ Burroȱ Creekȱ projectȱ isȱ summarizedȱ inȱ theȱ followingȱ figure.ȱȱFigureȱ 5Ȭ1ȱ assumesȱ thatȱ aȱ marketȱ forȱ theȱ powerȱ isȱ securedȱ inȱ theȱ firstȱ halfȱ ofȱ 2012ȱ toȱ aȱ degreeȱ thatȱ justifiesȱ expenditureȱ ofȱ preȬdevelopmentȱ costs.ȱȱBasedȱ onȱ assessmentȱ ofȱ theȱ currentȱ market,ȱ thisȱ isȱ anȱ ambitiousȱ goalȱ thatȱ dependsȱ onȱ theȱ outcomeȱ ofȱ futureȱ discussionsȱ betweenȱ BCHȱ andȱ potentialȱ customersȱ asȱ discussedȱ inȱ Sectionȱ 4.ȱȱȱIfȱ securingȱ aȱ buyerȱ forȱ theȱ projectȱ outputȱ isȱ delayed,ȱ theȱ remainderȱ ofȱ theȱ developmentȱ scheduleȱ willȱ beȱ extendedȱ forwardȱ inȱ time.ȱȱȱ Basedȱ onȱavailableȱdata,ȱtheȱ projectȱcanȱ beȱ operationalȱinȱ asȱ littleȱasȱ5ȱ yearsȱafterȱaȱ buyerȱ forȱ theȱ projectȱ outputȱ isȱ securedȱ andȱaȱ‘go’ȱ decisionȱ isȱmadeȱ forȱtheȱ project.ȱȱThisȱ isȱ basedȱonȱ eitherȱ useȱ ofȱ theȱ FERCȱ Integratedȱ Licensingȱ Processȱ orȱ obtainingȱ aȱ FERCȱ exemptionȱ fromȱ licensing,ȱ andȱ aȱ twoȬyearȱ constructionȱ schedule.ȱȱComplicationsȱ inȱ theȱ permitting,ȱ financing,ȱ orȱ constructionȱ phasesȱofȱprojectȱdevelopmentȱcouldȱresultȱinȱdelaysȱinȱthisȱprojectȱdevelopmentȱschedule.ȱȱȱ ȱ BurroȱCreekȱHoldings,ȱLLCȱ BurroȱCreekȱHydroelectricȱStudyȱȱ ȱ PolarconsultȱAlaska,ȱInc.ȱ ȱ ȱ Novemberȱ2011ȱ–ȱFinalȱReportȱ ȱ 26ȱ 2009 2010 2011 2012 2013 2014 2015 2016 ACTIVITY 12341234123412341234123412341234 FeasibilityȱStudy BusinessȱPlan ConceptualȱDesign Permitting ResourceȱStudies FERCȱExemption ProjectȱDesign ConstructionȱPlan FinancingȱPlan Construction ProjectȱCommissioning ConstructionȱPhaseȱCloseȬout Figureȱ5Ȭ1:ȱȱProjectȱDevelopmentȱScheduleȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ 5.2 RECOMMENDATIONSȱFORȱIMPLEMENTATIONȱ Theȱ followingȱ actionsȱ areȱ recommendedȱ toȱ continueȱ advancingȱ Burroȱ Creek,ȱ andȱ toȱ positionȱ BurroȱCreekȱforȱdevelopmentȱasȱtheseȱemergingȱmarketsȱmature:ȱ ¾Contactȱ theȱ Regulatoryȱ Commissionȱ ofȱ Alaskaȱ (RCA)ȱ toȱ determineȱ howȱ bestȱ toȱ moveȱ forward.ȱȱTheȱ RCAȱ governsȱ salesȱ ofȱ powerȱ inȱ Alaska,ȱ andȱ itȱ isȱ importantȱ toȱ understandȱ theȱconditionsȱ underȱwhichȱaȱcompanyȱ canȱ sellȱpowerȱ toȱ variousȱ customers.ȱȱInȱ general,ȱ anȱ independentȱ powerȱ producerȱ suchȱ asȱ Burroȱ Creekȱ cannotȱ sellȱ toȱ moreȱ thanȱ 10ȱ customersȱ orȱ overȱ $50,000ȱ worthȱ ofȱ powerȱ perȱ yearȱ withoutȱ becomingȱ aȱ certifiedȱ utility.ȱȱ Inȱ addition,ȱ RCAȱ generallyȱ willȱ notȱ allowȱ twoȱ certifiedȱ utilitiesȱ withinȱ oneȱ serviceȱ areaȱȱ However,ȱ theȱ RCAȱ Commissionersȱ haveȱ theȱ finalȱ sayȱ onȱ suchȱ projects,ȱ andȱ canȱ makeȱ exceptionsȱ toȱ theirȱ regulationsȱ asȱ theyȱ determineȱ isȱ inȱ theȱ publicȱ interest.ȱȱAppendixȱ Fȱ containsȱtheȱAlaskaȱStatuteȱlanguageȱthatȱisȱpertinentȱtoȱthisȱproject.ȱȱȱ ¾ContinueȱstreamȱgaugingȱatȱBurroȱCreekȱtoȱcharacterizeȱtheȱresourceȱpotential.ȱ ¾Monitorȱ futureȱ landȱ useȱ planningȱ andȱ managementȱ decisionsȱ forȱ theȱ BLMȱ landȱ westȱ ofȱ Burroȱ Creekȱ toȱ insureȱ futureȱ managementȱ decisionsȱ doȱ notȱ precludeȱ developmentȱ ofȱ aȱ hydroȱprojectȱinȱthisȱarea.ȱ ¾Maintainȱ Burroȱ Creekȱ asȱ aȱ generationȱ resourceȱ inȱ regionalȱ energyȱ planningȱ documents,ȱ suchȱasȱtheȱSoutheastȱAlaskaȱIntegratedȱResourceȱPlan,ȱcurrentlyȱunderȱdevelopmentȱbyȱ theȱAEA.ȱ ¾Contactȱ Yukonȱ Energyȱ toȱ discussȱ theȱ possibilityȱ ofȱ thatȱ companyȱ extendingȱ itsȱ powerȱ transmissionȱlineȱsouthȱtoȱtheȱUpperȱLynnȱCanalȱsystem,ȱandȱaȱpossibleȱpowerȱpurchaseȱ agreement.ȱ ¾ContactȱtheȱdevelopersȱofȱtheȱPalmerȱMineȱtoȱmonitorȱtheȱprogressȱofȱthatȱproject,ȱandȱifȱ andȱwhenȱdevelopmentȱisȱassured,ȱȱtoȱdiscussȱpossibleȱpowerȱpurchaseȱagreements.ȱ BurroȱCreekȱHoldings,ȱLLCȱ BurroȱCreekȱHydroelectricȱStudyȱȱ ȱ PolarconsultȱAlaska,ȱInc.ȱ ȱ ȱ Novemberȱ2011ȱ–ȱFinalȱReportȱ ȱ 27ȱ ¾Contactȱ APCȱ toȱ discussȱ theȱ conditionsȱ underȱ whichȱ theyȱ mayȱ beȱ willingȱ toȱ purchaseȱ wholesaleȱpowerȱfromȱBCH.ȱ ¾Contactȱ IPECȱ toȱ discussȱ aȱ possibleȱ powerȱ purchaseȱ agreement,ȱ keepingȱ inȱ mindȱ thatȱ otherȱmarketȱopportunitiesȱmayȱneedȱtoȱexistȱinȱorderȱtoȱmakeȱthisȱmarketȱviable.ȱȱȱ ¾Contactȱ possibleȱ fundingȱ sourcesȱ toȱ identifyȱ grantsȱ andȱ loanȱ programsȱ thatȱ mayȱ reduceȱ theȱcostȱofȱenergyȱfromȱtheȱBurroȱCreekȱproject.ȱȱȱ BurroȱCreekȱHoldings,ȱLLCȱ BurroȱCreekȱHydroelectricȱStudyȱȱ ȱ PolarconsultȱAlaska,ȱInc.ȱ ȱ ȱ Novemberȱ2011ȱ–ȱFinalȱReportȱ ȱ 28ȱ BurroȱCreekȱHoldings,ȱLLCȱ BurroȱCreekȱHydroelectricȱStudyȱȱ ȱ PolarconsultȱAlaska,ȱInc.ȱ ȱ ȱ Novemberȱ2011ȱ–ȱFinalȱReportȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ APPENDIXȱAȱ–ȱMAPSȱANDȱFIGURESȱ ȱ BurroȱCreekȱHoldings,ȱLLCȱ BurroȱCreekȱHydroelectricȱStudyȱȱ ȱ PolarconsultȱAlaska,ȱInc.ȱ ȱ ȱ Novemberȱ2011ȱ–ȱFinalȱReportȱ ȱ ȱ BurroȱCreekȱHoldings,ȱLLCȱ BurroȱCreekȱHydroelectricȱStudyȱȱ ȱ PolarconsultȱAlaska,ȱInc.ȱ ȱ ȱ Novemberȱ2011ȱ–ȱFinalȱReportȱ ȱ AȬ1ȱ FigureȱAȬ1:ȱȱProjectȱOverviewȱandȱLocationȱMapȱȱ ȱ ȱ BurroȱCreekȱHoldings,ȱLLCȱ BurroȱCreekȱHydroelectricȱStudyȱȱ ȱ PolarconsultȱAlaska,ȱInc.ȱ ȱ ȱ Novemberȱ2011ȱ–ȱFinalȱReportȱ ȱ AȬ2ȱ FigureȱAȬ2:ȱȱPotentialȱDiversionȱSitesȱandȱDrainageȱBasinsȱ ȱ ȱ ȱ ȱ ȱ BurroȱCreekȱHoldings,ȱLLCȱ BurroȱCreekȱHydroelectricȱStudyȱȱ ȱ PolarconsultȱAlaska,ȱInc.ȱ ȱ ȱ Novemberȱ2011ȱ–ȱFinalȱReportȱ ȱ AȬ3ȱ FigureȱAȬ3:ȱȱMapȱofȱProjectȱConfigurationsȱonȱUSSȱ1560ȱ ȱ ȱ ȱ ȱ BurroȱCreekȱHoldings,ȱLLCȱ BurroȱCreekȱHydroelectricȱStudyȱȱ ȱ PolarconsultȱAlaska,ȱInc.ȱ ȱ ȱ Novemberȱ2011ȱ–ȱFinalȱReportȱ ȱ AȬ4ȱ FigureȱAȬ4:ȱMapȱofȱProjectȱConfigurationsȱUsingȱFederalȱLandsȱ ȱ ȱ ȱ ȱ (SectionLine) PENSTOCKROUTES USS1560 BurroȱCreekȱHoldings,ȱLLCȱ BurroȱCreekȱHydroelectricȱStudyȱȱ ȱ PolarconsultȱAlaska,ȱInc.ȱ ȱ ȱ Novemberȱ2011ȱ–ȱFinalȱReportȱ ȱ AȬ5ȱ FigureȱAȬ5:ȱMapȱofȱTransmissionȱRoutesȱ ȱ ȱ ȱ ȱ BurroȱCreekȱHoldings,ȱLLCȱ BurroȱCreekȱHydroelectricȱStudyȱȱ ȱ PolarconsultȱAlaska,ȱInc.ȱ ȱ ȱ Novemberȱ2011ȱ–ȱFinalȱReportȱ ȱȱ BurroȱCreekȱHoldings,ȱLLCȱ BurroȱCreekȱHydroelectricȱStudyȱȱ ȱ PolarconsultȱAlaska,ȱInc.ȱ ȱ ȱ Novemberȱ2011ȱ–ȱFinalȱReportȱ ȱȱ ȱ ȱ ȱ ȱ ȱ ȱ APPENDIXȱBȱ–ȱPHOTOGRAPHSȱ BurroȱCreekȱHoldings,ȱLLCȱ BurroȱCreekȱHydroelectricȱStudyȱȱ ȱ PolarconsultȱAlaska,ȱInc.ȱ ȱ ȱ Novemberȱ2011ȱ–ȱFinalȱReportȱ ȱȱ BurroȱCreekȱHoldings,ȱLLCȱ BurroȱCreekȱHydroelectricȱStudyȱȱ ȱ PolarconsultȱAlaska,ȱInc.ȱ ȱ ȱ Novemberȱ2011ȱ–ȱFinalȱReportȱ ȱ BȬ1ȱ PhotographȱBȬ1:ȱȱBurroȱCreekȱ SiteȱfromȱLynnȱCanalȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ PhotographȱBȬ2:ȱȱBurroȱCreekȱ Waterfall,ȱLookingȱUpstreamȱ ȱ ȱȱ ȱ ȱ ȱ ȱ ȱȱ ȱ ȱ ȱ PhotographȱBȬ3:ȱȱBurroȱCreekȱ GaugingȱStation,ȱLookingȱ Downstreamȱ ViewȱofȱUSSȱ1560ȱlookingȱnorthwestȱ fromȱLynnȱCanal.ȱȱTheȱmainȱcabinȱandȱ outbuildingsȱareȱvisibleȱnearȱtidewater.ȱ ȱ ȱ Theȱstillingȱtubeȱthatȱhousesȱtheȱpressureȱ transducerȱisȱvisibleȱinȱthisȱview.ȱȱAȱ flexibleȱmetalȱconduitȱhousingȱtheȱpowerȱ cable/ȱventȱtubeȱextendsȱupȱfromȱtheȱ stillingȱtubeȱtowardsȱtheȱlogȱcribȱwhereȱ theȱdataȱloggerȱisȱmounted.ȱȱTheȱconduitȱ isȱanchoredȱtoȱbedrock.ȱȱBurroȱCreekȱisȱ flowingȱatȱ70ȱcfsȱinȱthisȱphoto.ȱ ȱ Mayȱ10,ȱ2010.ȱȱPolarconsult.ȱ Thisȱwaterfallȱisȱlocatedȱatȱmileȱ0.15ȱofȱ BurroȱCreek.ȱȱBurroȱCreekȱisȱflowingȱatȱ 70ȱcfs.ȱ Mayȱ11,ȱ2010.ȱȱPolarconsult.ȱ BurroȱCreekȱHoldings,ȱLLCȱ BurroȱCreekȱHydroelectricȱStudyȱȱ ȱ PolarconsultȱAlaska,ȱInc.ȱ ȱ ȱ Novemberȱ2011ȱ–ȱFinalȱReportȱ ȱ BȬ2ȱ PhotographȱBȬ4:ȱȱExistingȱBurroȱ CreekȱIntake,ȱLookingȱUpstreamȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ PhotographȱBȬ5:ȱȱExistingȱBurroȱ CreekȱIntakeȱScreeningȱBoxȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ PhotographȱBȬ6:ȱȱExistingȱBurroȱ CreekȱIntakeȱ ȱ Viewȱofȱexistingȱscreeningȱboxȱlookingȱ upstream.ȱȱȱ ȱ Decemberȱ16,ȱ2009.ȱȱPolarconsult.ȱ ViewȱatȱtheȱexistingȱhydroȱintakeȱonȱBurroȱ Creekȱatȱtheȱ235Ȭfootȱelevation.ȱȱTheȱ diversionȱstructureȱisȱaȱlogȱpinnedȱintoȱ bedrockȱatȱtheȱheadȱofȱaȱseriesȱofȱrockȱchutesȱ andȱcascades.ȱȱTheȱexistingȱdiversionȱandȱ intakeȱisȱpastȱitsȱserviceableȱlifeȱandȱrequiresȱ repairȱorȱreplacement.ȱ BurroȱCreekȱisȱflowingȱatȱ11ȱcfs.ȱ Decemberȱ16,ȱ2009.ȱȱPolarconsult.ȱ Viewȱofȱexistingȱdiversionȱstructureȱ duringȱsummer.ȱȱBurroȱCreekȱisȱflowingȱ atȱ70ȱcfs.ȱ ȱ Mayȱ10,ȱ2010.ȱȱPolarconsult.ȱ