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Home My WebLink AboutKake Petersberg Intertie Study Update 2010Kake -Petersburg Intertie Study Update FINAL DRAFT REPORT ) |7 "ens Le ae ee te gorge Ors re?: Prepared for The Southeast Conference Juneau,Alaska by DileielyabsKASSOCIATES,INC. Engineers and Consultants January 2010 Kake -Petersburg Intertie Study Update FINAL DRAFT REPORT January 22,2010 Prepared for The Southeast Conference Juneau,Alaska by DE Tell ynEsOxASSOCIATES,INC. Engineers and Consultants In association with: Commonwealth Associates,Inc. Tetra Tech EC,Inc. Kake -Petersburg Intertie Study Update i Draft Report Table of Contents Kake -Petersburg Intertie Study Update Table of Contents Table of Contents List of Tables List of Figures Section 1 -Introduction and Conclusions INtrOGUCHION ........cssscscssssssessssssssessscssseesesecceesseacsenesessseessseseuecseseacsensecsessosssesssssessssessesssessestessreeseneaes 1-1 Study APProach 0...esecessssssssssssecsssessssssssssesesssecssssessesssesssssseesseessserecassedcerssecseasenecaeeresenanenaeees 1-3 Status of Transmission Development in Southeast Alaska...sesssesssssssessssssesessssseeseersseeeeees 1-5 CONCIUSIONS ........cccssssssssesscsccsstsscsseceseseasensesessscsesessacseecseseaessscssscsesesacsessassesensasasacaeacesessesessacesesaueess 1-6 Section 2 -Transmission Line Routes and Technical Characteristics INtrODUCHION........ccsssssssssesessscsscscssesssessscssscsssesssesussssescseesanscessessessesesessssessesssasessssssesessssesserseseseesesseas 2-1 Alternative Route ASSESSMENL.........c.cessssesscecsccesssssecsssssssessssscsstesstecevesesarsessessssssessssserseseessesenterees 2-2 Northern Route Alignment ......cs sssssessesesstsesecseesecsssessssseseerssssesseetsersesenssecstsnsneeseesses 2-2 Evaluation of Alternative ROuteS 0...eesssssesssssssestsesesessessessssseseessesseesssessceserevsssesees 2-6 Transmission Line Design Concepts for the KPI ou...esesesessssesesesnssecssessessssenssecneerssenessnseesesees 2-7 Recommended System Voltage .....c.ccscssssssssssessssssessssssssssecsssssesscrsssssssssseseessnsseaseces 2-7 Overhead Transmission Line Design Concepts...........csccsssssessesscssssssssssssssssecseessesseees 2-8 Conceptual DeSIGN oe eeecsseseeesesssesetsteestenssessesscscssecssecaesensssasscssesseesenes 2-8 Physical LO@GIN.........cscsesecssessssseescsesesesesteressssstenssssesesseteneasstscsesssseeeess 2-8 Foundations and Structure Support...ecessscssssscsssesesessessssssseseessens 2-10 Electrical Clearances to Grade uo...eeccesesssesssssssssssessssssesesecssesesenenees 2-11 Conductor Selection oo...eesscsesscscsessessessessessssessessseserseeseseesteeseeeseaees 2-11 Right of Way Clearance...ccessesstsscecesreseetssesssasseeeseesssesessssesseesess 2-11 Access Road Construction Standards .........ccsssssssesssesecessesssessssseesevess 2-12 Raptor (Eagle)Protection ........ssessssssssscssesssscssssssesssessesessscesseesecssers 2-13 Substation and Switching Station Concepts ........ssccssestsesssessssesssssrsssssssseseessesessees 2-14 Submarine Cables ........cccsssssessscessersesssecssecssssssesestssceseneacessesacacsseseausecsesesessesesseassseeseeees 2-15 Buried Cable Underwater Crossing (Directional Bore)...........cssssssesssssseseseeseseasseesers 2-17 Duncan Canal Overhead Transmission CroSSing.........cssssssessssesssssssessseesesssssserssseenees 2-18 Fiber Optic Communication Cable...ssecssssssssessetsssessersscsetsasseeeassecssesssessersess 2-19 Power FIOW AnalySis ........sscsssssessssssessccsssssessessssstensesecssscscsssssrsassesesessessesseseeacasseesssacecans 2-20 Detailed Route Evaluation...ccsssssssssssescssesscsessecssssseasssassssssseessesssessscssseesssessescssasssesasenssasens 2-20 KPI Alternative Route De@SCTriptions...........sscsseseceseesssssssecsssesssssssscsssssessesesseeseseeseeaes 2-22 Northern Alternative.........ccccsssessscssssssssesscessscssssssscsssssssesesesssessssserssssesceesessees 2-22 Center-South Alternative ........secesssssessesssessessssssssesssesesessssssssssseseseserseseees 2-24 Section 3 -Permitting Requirements and Environmental Issues Overview IMtrOdUCtION -saessesssesccssesssesssssessssscccsesssenssssesesseevsvessessscsssesesssessseusseesacscssssesssasasesesaeesesesesaeeceses 3-4 POrmitting -sassesesssssessesesstesseseesessscseeussessensussessasssseasasasascarssaseessesscsneneaeasaassueseseaeessasassessaeeesees 3-1 Kake -Petersburg Intertie Study Update ii Draft Report Table of Contents Estimated Cost of Environmental Studies and Permitting.............cccccsssssscesssssessssscsssesssssessseaes 3-15 National Environmental Policy Act ProCess ......ccccecsssesssssessscsesssssesesssssteteertenesesseasenseenserens 3-17 Section 4 -Estimated Costs of Construction Introduction eseesessscsesscesesessesseseecsteneeetenseceetseesssesssesascassessesasseseeeeeseesseeseesenenseesieasasesensesteseess 4-4 Cost Differential of 138-kV Compared to 69-KV........cccesssesseesceststsssssssssstsesescsssescseecssesensessesees 4-4 Section 5 -Example Project Development Schedule INtrOGUCTION -aeessscsssesssscscseseseseecnseeseensecataseeesstencaesueseaeaneressetecacasdecueatseenensnsisaeseasasesseatasssseeseass 5-1 Permitting and Environmental Studies...ssessessesssseesesesessseseessseensteassesessssestensesessesseses 5-1 Engineering Related Activities 0.0...csssecssesessesnssssesssesssessssssssescsascassesssessssesaseateeseeneseaes 5-1 Selection Of Project TCM...ee sesesscseseseseetstssseseesesstersesestenseetseetetseseasssensesseseaees 5-1 Alignment Definition...cceeesesesessssessssasesssssesscasssessssssesscassesisasanseseessssensesenenseneee 5-2 Engineering Survey ........ccscccscsecscssesseceseseseasseecessacassecssssscecassecucensesesseusneseseasasseetssesessasaeess 5-2 Preliminary ENgine@ering .........ssccsssctesssesseessessesesecsseestsecssseseesessetsesesesecsssessseessesesseacarees 5-3 Geotechnical Investigations........ccccscssescssseecsesssssseseecesstsssessssessssssesssseseesesssseseseeesecs 5-4 Final DOSIQ(.....c.ssesecsssesesesesecsssestsessestesetsnteessansseesetssenseseesassessnensasasecanenssenseaesecasseasneresenss 5-4 Initiate Construction and Material Procurement Contracts....cccscseeseesssesssessseseeeees 5-4 Construction ACtiVI{CS oe eceeceseseesctsseetsseetsesseesscessesusassusssseeecseceesseasacsucsenesnssensaseusssesesseeseeees 5-5 Total Project Development Schedule...escessecestsesesesesecesseseseseseessecsteesesnesessneasseetseseeetseaeens 5-5 Section 6 -Power Supply Evaluation and Economic Analysis Power Supply Evaluation...ceesscesssssssscsesseeseesseesseecssscessecesssssosssessenessesscseessesssassenssesaeeeessess 6-1 OVEIVIOW .o.eeeeceseeeceseseetsessessecsueneseesesssessssessssessessesessensesssscsasesssssesssesecasasenenensnesensaseeseanes 6-1 Power REqQuireMent .......cccsscsssscsssssscscsssccsesessesessssscsessecsescsssssetseessessesssassseeseessessssereeees 6-2 Petersburg and Wrangell...cssscsesssesssssssssesssssesssacsesessasecssenetesecnssestensenes 6-3 K@tChikan.......ssessssseeseceessnsscesecessesessesensseacstecenececatacseeneasasasesseeenessatsaecenenesasesasass 6-5 KAKC u..csssscescsecscsesccsesssesrsesssesercecsuecuevevesecaseacaeauseaeseseseaneasscaeseusueseesscasasssanecerscasaes 6-6 Availability of Hydroelectric Energy oo...esssssesseesesssescesersnssssnssesserseereesecarsessssnesesseesees 6-9 Tyee Lake Project.......cscsesscesesssssecssseevessecsesssssessscessssnessesescsessesseesecenessvevassensaees 6-9 Potential New Hydroelectric Generation Facilities 0...eesessssssesstesesesssseteseessensseens 6-10 Use of Oil-Fired Generating Facilities 0.0...tee sesseseesecstestessetsessecseesseesensesseseeseeeess 6-11 Economic Analysis of Intertio........cc csessssescssssesessnsestsssssesessassceserscscsensenenessseaesssensseeseesseceasaeases 6-11 Introduction ANd ASSUMPTIONS 0...ee tesesestsssesessesesescsessessseseeeetetsnseeseeeneeeteteteeenesanenes 6-11 Projected Cost of Existing Diesel Generation 0...seeseeeseseetescneseseesseetetessatsnseetenees 6-12 KPI Annual Cost ........cecsssessssssssesscssseseessnensencacsnescnsecsuseescacansuessereseseseenessnesensssensseeseases 6-14 Operations and Maintenance Costs 00...eeeseeecsstesetsesetstetsessesseeseesens 6-15 Administrative Costs .........ccessssescsececsccesssscsesesesseessecssesssscsecsessseeseasasetsesesessens 6-18 Cost of Purchased POWE?........c.cescssssssestsessesssssessseeresssesseetseestenseassnessnecesenseetstansneeeseas 6-19 Estimated Savings with the KPI...escesesssessssesssssessesssesssteaseesessstsesssasseerseseeessees 6-19 Section 7 -Other Factors Integration with Southeast Alaska Intertie SySteM ot eeeseeeesssesestesestssersnsscseseetenessseesseensens 7-1 Kake -Petersburg Intertie Study Update iii Draft Report Table of Contents APPENDICES AppendixA --Power Flow Analysis AppendixB 'Plan Profile Sheets for KPI AppendixC Submarine Cable Costs and Specifications AppendixD -IPEC-Kake Service Area -Historical StatisticsAppendixE_Detailed Analytical Tables Appendix F Proposed Development Concept of Cascade Creek Project Kake -Petersburg Intertie Study Update iv Draft Report Table of Contents List of Tables Table 2-1 Table 3-1 Table 3-2 Table 3-3 Table 3-4 Table 3-5 Table 4-1 Table 4-2 Table 4-3 Table 4-4 Table 4-5 Table 4-6 Table 6-1 Table 6-2 Table 6-3 Table 6-4 Table 6-5 Table 6-6 Table 6-7 Table 6-8 Table 6-9 List of Figures Figure 2-1 Figure 2-2 Figure 2-3 Figure 2-4 Figure 2-5 Figure 2-6 Figure 3-1 Figure 3-2 Figure 3-3 Figure 3-4 Figure 3-5 Figure 6-1 Estimated Comparable Costs of Development for Each Route .......cccsseseseees 2-6 Tongass National Forest Land Use Designations Crossed by the KPI...............3-3 Summary of Agency Requirements and Associated Costs.........ccccscssssessscesesees 3-6 Example of EIS Schedule for the KPI...........ccscssssssscssssssesssessssessssssscessesssees 3-11 Estimated Acres of Disturbance to Vegetation Types and Streams ............3-12 Estimated Costs for the Preparation of an EIS and Permitting the KPI .............3-17 Estimated Right of Way Clearing and Road Construction Requirements............4-3 Estimated Comparable Costs of Development and Construction -69kV............4-4 Estimated Comparable Costs of Development and Construction -138kV..........4-5 Estimated Cost of Project Development and Construction -Center-South.........4-6 Estimated Cost of Project Development and Construction -North Sub.Cable...4-8EstimatedCostofProjectDevelopmentandConstruction-Northern w/Bore..4-10 2008 Energy LOadS 0...csesesectessecnessseceereneateeetstsneseacsesssessssassesssessessssvesessesecess 6-3 Petersburg and Wrangell -Projected Energy Requirements .........ccccssseesesens 6-5 Ketchikan Public Utilities -Projected Energy Requirements ............ccssssseeseees 6-6 IPEC Kake Service Area -Projected Energy Loads .........cccsessessssseseseseeseees 6-8 Estimated Hydroelectric Energy Generation from the Tyee Lake Project............6-9 Projected Variable Cost of Power Production with Diesel Gen.-Kake.............6-14 Kake -Petersburg Intertie,Estimated Annual O&M Costs...........cccssseeseersens 6-18 Estimated Annual KPI Administrative Costs .......cccsssssssssssssssscsesesseseensesssssees 6-18 Projected Cost of Power and Savings with the Intertie -Kake .........ccceesssees 6-20 KPI ROUtES .0....se eecstsesssssetesesesesessecsssesessescsusseseasaseessssesesssseeseseseeeseseeeessseranesess 2-12 Row Easement ISSue 01.000...cccssssssssssscssssssssesssssssessssesseesssssseessessessessssesessees 2-12 Row Easement ISsue 02.00...cesssssscsessescssesessessserssssessescssasesseessessessassessrecseesns 2-12 Tangent HP Wood Pole Designed at 138-KV..0....cc essssesesessesssssesssseseeserees 2-12 Typical Tangent Wood Pole Designed at 138-KV ........cs cceseseessssststssssessseseeees 2-12 Proposed Configuration of the Kake Substation and the TWP Int.Facility........2-15 Land Use Designations .........ce esssessesseesrssesssssesssssssessessssseesssssessesseessssereres 3-12 Inventoried Roadless Areas........cccscssesssesssssssssesssessssssssscsesessssssssesensssssereseeseses 3-12 Anadromous and Resident Streams...esssssssssssssssssssssssssseseessesesessesees 3-12 Vegetation Types...cceecessesssssssseeressssssssessseseesssssssscsssessscesssssessneaseseeseeees 3-12 NEPA Process OVErViGW......cccssssssessscsessesssssssessssestsaseesssseesesenessesssseensatnesees 3-18 Annual Energy Sales in Kake by Customer Class .......ccscsssssssesecsssssssssseessensers 6-7 Kake -Petersburg Intertie Study Update Vv Draft Report Section 1 Introduction and Conclusions Introduction In January2009,the Southeast Conference retained D.Hittle &Associates,Inc.(DHA)to conduct an update of the feasibility study of the proposed transmission line between Kake and Petersburg (the "Kake -Petersburg Intertie”or "KPI”).The previous study of the KPI was completed in July 2005 as a follow-on study to the Southeast Alaska Intertie Study prepared for the Southeast Conference in 2003 (the "2003 Intertie Study”).The 2003 Intertie Study provided an overview of a complete electrical transmission system in Southeast Alaska with emphasis on two initial transmission interconnection segments between:(1)Kake and Petersburg and,(2) Juneau,the Kennecott Mining Company -Greens Creek Mine (KMC-GC)on Admiralty Island and Hoonah.The transmission line between Juneau and KMC-GC was completed in 2006. The KPI will be used to transmit hydroelectric power to IPEC's electric system in Kake,thereby offsetting diesel generation in Kake.It is also possible that the line could be used at some point in the future to transmit electrical energy generated at locations north of Kake into the Southeast Alaska grid and potentially into the transmission system in northern British Columbia.As such, the KPI would be an integral part of the eventual Southeast Alaska transmission system. The 2005 KPI study evaluated several routes for the KPI and identified two primary route alternatives,a northern route generally located on the north end of Kupreanof Island (the "Northern”route)and a southern route that crosses the Wrangell Narrows near the Tonka log transfer facility and proceeds west across Duncan Canal (the "Center-South”route).Both routes were expected to follow existing logging roads for the majority of their lengths,however,the southern route was preferred because of a generally more protected location,a shorter length, less scenic visual impact and a lower estimated cost of construction.The northern route of the KPI was considered to be along a more likely route for a year round maintained road between Kake and Petersburg.Following completion of the 2005 KPI study,the Southeast Conference Intertie Steering Committee recommended the Center-South route as the preferred route. The primary purpose of this latest study of the KPI is to update cost estimates for the alternative routes particularly with regard to the renewed proposal on the part of the Alaska Department of Transportation and Public Facilities (DOTPF)to build a year round road between Kake and Petersburg.The road would follow essentially the route previously defined as the Northern route for the KPI.With both the KPI and the proposed road proposed to be located within the same corridor,the concept ofjointly permitting both projects has been suggested.Further,depending on the timing of road development,the road could provide access for construction and maintenance of the KPI. The emphasis of the study update has been on updating the cost estimates of the Northern route and the Center-South route.Among the alternatives considered in the 2005 KPI study was a route that could provide electric service to a proposed mining facility on Woewodski Island.The 2005 study concluded that a tap line off the Center-South route of the KPI would be the lowest Kake -Petersburg Intertie Study Update 1-1 Draft Report Introduction and Conclusions cost alternative to supply the Woewodski mine load if it were to be needed.Development of the mine has not proceeded as quickly as previously thought and electric service to the mine is not presently a priority.Nevertheless,the potential to serve new mining loads or other large power users in the vicinity of the KPI could be an important 'factor for economic development in Southeast Alaska at some point in the future. With regard to the KPI,a number of issues have been raised that will affect the potential routing and configuration of this line.Although most of these issues were known to some degree at the time of the 2005 KPI study,the potential impacts of recent developments have been more thoroughly assessed in this study in preparation of permitting and final design activities.Among these issues are: e Continued discussion and evaluation of a potential year-around road between Kake and Petersburg; e Proposals by various entities to develop new hydroelectric projects in the general vicinity of Petersburg;, e Recent experience of the Southeast Alaska Power Agency!(SEAPA)with regard to the recently completed Swan -Tyee transmission; e Studies and investigations of the possibility of constructing a transmission line from the Tyee Lake project to interconnect with the BC Hydro transmission system; e Increases in the power requirements of the SEAPA members that could affect the amount of power available for sale from SEAPA to the Inside Passage Electric Cooperative (IPEC),the electric utility that serves Kake; e Increases in the worldwide price of metals and the effect this may have on materials needed for new transmission lines; e Significant increases in oil prices that affect the cost of power production in Kake; e Reductions in power requirements in Kake due to the closure (potentially temporary)of a seafood processing facility. These issues have all been considered in the update of the KPI cost estimates and economic analysis.One of the primary purposes of the KPI study update is to provide the needed information for the Southeast Conference to identify the recommended route and configuration of the KPI.The economic analysis conducted as part of the study update estimated the benefits in reduced power production costs in Kake over a 20-year period if the KPI were constructed. 'Formerly the Four Dam Pool Power Agency. Kake -Petersburg Intertie Study Update 1-2 Draft Report Introduction and Conclusions To accomplish the objectives of the KPI study update,the primary tasks undertaken have been to: (1)provide an updated assessment of the three primary route alternatives previously identified for the KPI; (2)determine the potential benefits in jointly permitting the proposed road project and the KPI; (3)estimate the capital and operating costs associated with each route alternative; (4)evaluate and define power supply requirements and regional generation capability in the region; (5)outline permitting and environmental issues associated with development of the KPI; (6)evaluate load flows and electrical system configuration requirements to assure the reliable operation of the interconnected regional system; (7)estimate the costs of power in Kake with and without the inclusion of the KPI route overamulti-year forecast period. For the purpose of the economic analysis included in Item 7,it has been assumed that KPI construction costs will be funded with grants,pursuant to the plans of the Southeast Conference. Although the capital costs are expected to be mostly grant funded,the annual costs of operating and maintaining the KPI as well as funding a reserve for long-term renewals and replacements is to be borne by the users of the KPI. It should be noted that the economic analysis conducted as part of the KPI study update looked only at the cost of power production in Kake by the proposed transmission system.The cost of power production is typically the most significant component of an electric utility's revenue requirement;however,there are other costs that figure significantly into the basis for electric rates that are charged to retail customers.Although the cost of power production may be reduced through alternative means of power supply,other costs may continue to keep retail ratesatahighlevel.The State's Power Cost Equalization (PCE)'program also affects how much of the benefit of lower production costs ultimately reaches the electric consumer.Aside from the estimation of power production costs,the KPI study update has not attempted to evaluate retail electric rates in Kake or elsewhere in Southeast Alaska. Study Approach Primarily,the KPI study update evaluated the Northern route in more detail with regard to the proposed location of the Kake to Petersburg road.The transmission line is to be located for the most part within the 300 foot wide road corridor which,when combined with the more rugged terrain of the Northern route,requires that the line have more angles,turns and adjustments than a typical cross-country route would have.Current costs of transmission line material and construction labor have been used to develop revised cost estimates.A detailed evaluation of the ?The Power Cost Equalization (PCE)program subsidizes retail electric rates for residential customers and publicfacilitiesinqualifyingcommunities.The funding of the PCE program is granted by the State legislature on anannualbasisandnoguaranteescanbeprovidedwithregardtoitscontinuationinthefuture. Kake -Petersburg Intertie Study Update 1-3 Draft Report Introduction and Conclusions power flow requirements was conducted to determine the recommended voltage for the KPI.In addition,the economic analysis for the KPI was updated to determine the level of benefits that could be realized with the KPI.The two route alternatives that were evaluated as part of this study update are summarized as follows: e Northern Alternative -(56.6 miles total length,one marine crossing)Generally located at the north end of Kupreanof Island.For the most part,this route follows the most likely route of a permanent road between Kake and Petersburg as defined in the Southeast Alaska Transportation Plan (SATP)dated August 2004.There are two options related to this alternative,Option 1 involves a 3.1 mile submarine cable crossing just north of the mouth of Wrangell Narrows.Option 2 involves a proposed horizontal directional bore and installation of a pipe to house power cables under Wrangell Narrows near Petersburg. e Center-South Alternative -(46.6 miles total length,two marine crossings totaling 1.6 miles)Connects to the existing Tyee transmission line south of Petersburg,crosses Wrangell Narrows,proceeds west across the Lindenberg Peninsula,crosses Duncan Canal and continues northwest toward Kake. In conducting the KPI study update,the technical review included consideration of the line route, system configuration,design criteria,permitting requirements and cost.The estimation of cost factored in the experience of several specialists familiar with transmission line construction in Southeast Alaska.A detailed preliminary design of the KPI system was developed using specialized computer design software. In conducting the economic analysis for the KPI Study,terms and conditions of existing contracts and agreements have been acknowledged to assure that the analysis appropriately models the commercial environment in which the KPI will operate.The question then becomes,is the KPI economically justifiable from the perspective of IPEC and its ratepayers'.Many transmission and power supply studies in the past have looked at economic viability from aregionalorpossiblyevena"societal”basis.As previously indicated,it has been assumed'that the KPI will be grant funded and will have no capital recovery component associated with its future cost structure. This study has been prepared in association with two other firms.Commonwealth Associates, Inc.was responsible for the review of overhead transmission routes and cost estimates;and Tetra Tech EC reviewed the environmental documentation and permitting process and prepared an estimate of the cost and time to conduct the necessary environmental studies,complete the National Environmental Policy Act (NEPA)process,and obtain the necessary approvals and permits needed to construct the KPI.D.Hittle &Associates had primary responsibility for the power supply and economic analyses and for overall coordination of the study effort. 3 KWETICO,as the potential future owner/operator of the KPI will also need to determine economic justification,however,this justification will be based on the estimated impacts on IPEC's ratepayers,the ultimate end-users of the KPI. 'This assumption has been provided by the Southeast Conference. Kake -Petersburg Intertie Study Update 1-4 Draft Report Introduction and Conclusions It should also be understood that the KPI Study is a feasibility assessment.The technical information and cost estimates presented in this report are subject to change as more additional studies are conducted and more information is obtained.Actual design of the KPI,if pursued in the future,will provide much more detailed specification of the system components,routes and configuration and allow for greater precision on estimating costs.The actual cost of constructing the KPI,however,will be subject to a number of factors including market conditions at the time bids for material and construction services are requested. Status of Transmission Development in Southeast Alaska Since completion of the 2005 KPI study,the primary developments with regard to transmission system improvements in Southeast Alaska are the completion of the Juneau -Greens Creek transmission line and the resumed construction of the Swan -Tyee Intertie (STI).The STI, owned by the Southeast Alaska Power Agency,interconnects the Wrangell,Petersburg and Ketchikan electric systems and will allow for better utilization of the hydroelectric generating plants in the interconnected system.The STI was completed in late 2009.The STI is approximately 57 miles in length and consists entirely of overhead construction with no submarine crossings.It was constructed for 138-kV nominal voltage but will be operated initially at 69-kV.The total cost of the STI is estimated to be about $115 million. Alaska Electric Light &Power (AELP)completed construction of the 69-kV Juneau -Greens Creek transmission line in late 2005.This line is owned by KWETICO but it is operated by AELP as the agent for KWETICO.The Juneau -Greens Creek transmission line allows for the use of surplus hydroelectric energy,when available,to offset diesel generation at the Greens © Creek mine.Relatively recent studies have been conducted to determine the feasibility of extending the Juneau -Greens Creek transmission line to Hoonah. In 2007 a detailed feasibility study of a transmission interconnection between Southeast Alaska and British Columbia was conducted by Hatch Energy for the Alaska Energy Authority.The AK-BC transmission line is proposed for the Bradfield Canal area and would connect the Southeast Alaska system at the Tyee Lake hydroelectric project to the BC Hydro system at a location dependent on construction of a new transmission line in British Columbia.A transmission interconnection with BC Hydro could provide access to power markets outside Southeast Alaska for the output of regional hydroelectric generation. Several entities have proposed to construct new,relatively large,hydroelectric facilities in the Thomas Bay area near Petersburg.These proposed projects include the Cascade Creek project, the Ruth Lake project and the Scenery Lake project.In order for these projects to connect to load centers,interconnection with the SEAPA transmission system in the general vicinity will be needed.The sponsors of these projects have proposed to interconnect with the KPI at locations in the Petersburg area,or alternatively,construct their own transmission lines to connect to the SEAPA system. Kake -Petersburg Intertie Study Update 1-5 Draft Report Introduction and Conclusions Conclusions The following conclusions are offered with regard to the KPI study update.Although these conclusions are offered at this point in the report,it is important to understand the assumptions and other factors described in subsequent sections of this report that contribute to the conclusions. 1.The recommended voltage for the KPI is 69-kV.This voltage more than accommodates the Kake electrical requirement.This voltage would not necessarily accommodate the estimated power loadings if a transmission interconnection between Kake and Sitka is eventually developed or if the proposed new hydroelectric facilities in the Thomas Bay area are developed.Cost estimates have been developed for both 69-kV and 138-kV construction. The recommended overhead conductor for the KPI is 336 ACSR.Submarine cables should be 3-phase,copper conductor bundled cables.A 24 strand fiber optic communication line is recommended to be included for the length of the KPI and will be bundled in to the submarine cable. Forest Service roads exist along the majority of the length of most of the proposed routes. Construction of the KPI adjacent to these roads,to the extent possible,should provide for lower costs of construction and maintenance.Single wood pole structures are preferred for placement along roads. Overall,both the Northern and Center-South routes include similar environmental concerns which are recommended to be addressed through the NEPA process through an EIS.The estimated cost to conduct the NEPA process and permit the KPI is approximately $1 million,of which $120,000 is the estimated cost of applying for and obtaining the necessary permits.An EIS process could be conducted in slightly less than two years.If the Northern route is to be permitted jointly with the proposed Kake to Petersburg road project,the EIS period would potentially be longer because of the more complex environmental issues related to the road. The estimated cost of final design,geotechnical surveys,alignment surveys and structure staking for the KPI is estimated to be $1.6 million.This cost is not included in the estimated costs of construction that follow. The estimated costs of developing and constructing the KPI at 69-kV,including all direct and indirect costs,range between $33.0 million for the Northern Alternative with a directionally bored underwater crossing of Wrangell Narrows and $38.9 million for the | Northern Alternative with a submarine cable crossing.Both of these cost estimates assume that the DOT road is constructed in advance of transmission line construction.If the DOT road is not built,the estimated cost of the Northern Alternative would be approximately $6.1 million and $5.4 million higher for the submarine and directional bore options,respectively. Kake -Petersburg Intertie Study Update 1-6 Draft Report Introduction and Conclusions 7.The estimated cost of the Center-South route at 69-kV is $38.1 million which is about 25%higher than the estimated cost for the same route prepared in 2005.Transmission material and construction costs have increased significantly since 2005.The estimated costs of the submarine cables are noticeably higher than they were in 2005.Economic conditions nationally and globally could potentially have a significant effect on transmission construction labor and material costs when the KPI is actually constructed. 8.The estimated cost of the Center-South route could potentially be about $1.8 million less if a directional bore crossing of Wrangell Narrows could be accomplished. 9.Constructing the line at 138-kV rather than 69-kV would increase the estimated cost of the Northern Alternative by $2.7 million and $3.7 million for the submarine cable and directional bore options,respectively.The estimated cost of the Center-South route would be $3.0 million higher with 138-kV construction. 10.The estimated cost of the directional bore alternative could be higher depending on soil conditions at the bore location.Investigational surveys will need to be conducted to ascertain the conditions and better determine the cost of the boring work. 11.Energy generation capability is projected to be available from the Southeast Alaska Power Agency's Tyee Lake hydroelectric project to sell to IPEC for use in Kake if the KPI is constructed.A power sales contract will need to be negotiated with the Southeast Alaska Power Agency if power is to be sold to IPEC. 12.Assuming that construction and development costs of the KPI is grant funded and that reasonable power supply contracts can be arranged,IPEC should be able to realize savings in its costs of power supply in Kake with the KPI when compared to continued diesel-fueled power generation. 13.The annual costs to operate,maintain and administer the KPI can be reasonably recovered through charges for transmission services or,bundled in with the delivered cost of power. 14.The estimated net present value in savings to IPEC over the 20 year period 2013-2032 with the KPI is $9.9 million.If the annual costs of operating and maintaining the KPI were paid by others,either by including the KPI as a resource in the existing regional electric system or by wheeling revenues from other users of the line,the net present value benefits to IPEC over the first 20 years with the KPI would increase to $15.0 million. SEAPA could potentially be an owner and operator of the KPI that could integrate the costs of the KPI with its existing transmission system. 15.With the KPI,IPEC may be able to offer economic incentive rates in Kake,with certain limitations,to encourage new commercial activity.The economic incentive rates could be tied to the cost of purchased power with a nominal margin. The route alternatives for the KPI are shown in Figure 2-1. Kake -Petersburg Intertie Study Update 1-7 Draft Report Section 2 Transmission Line Route Alternatives and Technical Characteristics Introduction The Petersburg -Kake transmission Intertie ("KPI”)will interconnect the community of Kake on Kupreanof Island to the interconnected electric systems of Petersburg,Wrangell and Ketchikan. Petersburg and Wrangell are currently interconnected to and purchase most of their respective power supplies from the Tyee Lake hydroelectric project owned by the Southeast Alaska PowerAgency'(SEAPA).The recently completed Swan-Tyee Intertie interconnects the electric systems of Petersburg,Wrangell and Ketchikan. The KPI will be used to transmit surplus hydroelectric power purchased from SEAPA to IPEC's electric system in Kake,thereby offsetting diesel generation in Kake.It is also possible that the line could be used at some point in the future to transmit electrical energy generated at locations north of Kake into the Southeast Alaska grid and potentially into the transmission system in northern British Columbia.As such,the KPI would be an integral part of the eventual Southeast Alaska transmission system. The most recent detailed study of the KPI was conducted in 2005 (the "2005 KPI Study”)by the D.Hittle &Associates team.Prior to the 2005 KPI Study,the KPI was studied as part of the 2003 Southeast Alaska Intertie Study prepared for the Southeast Conference by D.Hittle & Associates and in 1996 with a feasibility study prepared by R.W.Beck,Inc.for the State of Alaska,Department of Community Affairs,Division of Energy (the "1996 Feasibility Study”). The 1996 Feasibility Study was a follow-up to the 1987 Southeast Alaska Transmission Intertie Study prepared for the Alaska Power Authority by the Harza Engineering Company (the "1987 Intertie Study”). Following completion of the 2005 KPI Study,the Center-South route was selected as the preferred route by the Kake -Petersburg Intertie Steering Committee.Since the 2005 KPI Study,the Alaska Department of Transportation &Public Facilities ("SDOTPF”)has continued its consideration to build a road to connect Kake and Petersburg.The proposed route of this road is similar to the proposed Northern route for the KPI.The purpose of this current KPI study update,therefore,is to re-examine the construction and operating and maintenance costs for this Northern route and to update the cost estimate for the Center South route.A further element of this study update is to evaluate more closely the likely options for the location of the KPI in the immediate vicinity of Petersburg. This study relies heavily on the 2005 KPI Study in which each of the alternative routes was defined with regard to specific location,topography,availability of adjacent USFS roads, vegetation,marine crossings,and general construction requirements.As part of this current study,conversations were held with USFS staff in order to determine if any new forest service >Formerly the Four Dam Pool Power Agency. Kake -Petersburg Intertie Study Update 2-1 Draft Report Transmission Line Route Alternatives and Technical Characteristics roads have been constructed or retired since the 2005 study was completed.This information was factored into the revised cost estimates for the alternatives. SEAPA recently completed construction of a transmission line to interconnect Ketchikan's electric system with the Tyee-Wrangell-Petersburg (TWP)electric system.This new interconnection will provide Ketchikan with access to the surplus generation capability of the Tyee Lake hydroelectric project.Although Kake's power requirements from the Tyee Lake project are expected to be subordinate to the requirements of Petersburg,Wrangell and Ketchikan,current forecasts indicate that sufficient energy should be available to supply Kake's load for several years into the future.With completion of the transmission interconnection to Ketchikan,additional hydroelectric resources could be available to supply Kake's power requirements in the future from the Ketchikan area. Alternative Route Assessment Given the Alaska Department of Transportation &Public Facilities'(DOTPF)interest in building a road from Kake to Petersburg,the primary task of this study was to complete a detailed review of the 2005 study focusing on the Northern Route and to update the costs of other routes so a current comparison of the alternatives could be made.A secondary part of the study was to determine which voltage level best meets the system's needs for future consideration.This future consideration is to consider an interconnection of hydropower generation at Takatz Lake on Baranof Island,the Thomas Bay area and other locations. The scope of services included reviewing the 2005 study's assumptions as to the terrain, availability of existing roads along the potential KPI routes and the resulting costs and conclusions.Because the major focus of this study is on the Northern Route it does not include a review of the route associated with serving the potential mine on Woewodski Island. Northern Route Alignment On Figure 2-1,the routes being considered in this study are shown.In the 2005 study the Northern Route was estimated to be 66 miles long.With the route proposed for the road from Kake to Petersburg the length of the transmission line is now anticipated to be 56.6 miles.This includes a 3.1 mile segment from Petersburg to Kupreanof Island which would use a high voltage underwater marine cable. Once the Northern Route reaches point 82,until it reaches Kake there are no optional sub-routes for this alternative.However two alternatives were considered in routing the line from Petersburg Substation to point $2.While both alternatives are described below,the primary differences are how and where the line crosses the Wrangell Narrows and the location of the line relative to the Kupreanof community. Kake -Petersburg Intertie Study Update 2-2 Draft Report Transmission Line Route Alternatives and Technical Characteristics Petersburg Substation to Point S2: Option 1: This alternative is consistent with the option developed in the 2005 study.In this option the line would start at the Petersburg substation where the TWP transmission line terminates.Starting at the substation,a 3.5 mile long overhead section of line would follow an existing gravel road generally in an east-northeast direction to Frederick Sound.The line would be located behind Petersburg and somewhat south of the airport.At Node S1,a submarine cable termination facility would connect the overhead line to the 3.1 miles long submarine cable. Between Nodes S1 and S2 the submarine cable would be placed in a trench to a water depth of approximately 100 feet.At the shore ends the cable would be placed in split pipe or conduit for protection.The cable for this crossing would generally be placed in somewhat deeper water to avoid anchor areas,fishing grounds and the dredging channel.The Wrangell Narrows entrance is a very busy channel and it will be important to place the submarine cable in deeper water to avoid much of the marine traffic and activity.The submarine cable is proposed to come ashore near Node S2 on Kupreanof Island,near Prolewy Point.Potentially the termination point would need to be north of the mouth of Five Mile Creek due to less favorable shoreline conditions south of Five Mile Creek. Option 2: In this alternative the line proceeds from the SEAPA substation north along Mitkof Highway to near the narrowest point of the Wrangell Narrows.This section of the line would require reconstruction of the existing Petersburg distribution line to accommodate the transmission line and a section of the line would need to be placed underground near the boat storage facility.At the point of the underwater crossing,the line would turn west and,via a horizontal directional bore using standard underground cable,cross under the Narrows,a distance of approximately 1,400 feet.This approach would cross under the Wrangell Narrows below the expected dredge depth.From this point P1,on Figure 2-1 it would return to overhead construction,turn and go north approximately 1.7 miles to point P3.Here again it would cross under Petersburg Creek, via directional bore,for a distance of approximately 800 feet.At this point,node P4,it would go overhead to node S2,a distance of approximately 2.5 miles.It appears there are a number of property parcels with private ownership on both sides of the Wrangell Narrows and Petersburg Creek.This could be beneficial in negotiating for easements and placement of the cable termination structures. The advantages of this option are: e Significantly lower costs for the underground/underwater cable;both initially andif it were necessary to replace a section in the future.It is estimated the cost of this sub-route will be approximately 50%less than the cost of the submarine cable included in Option 1, above.This could amount to a savings of approximately $3 million to $4 million. e Splitting the underground/underwater section into two pieces reduces the cost of replacement if one section were to go bad. Kake -Petersburg Intertie Study Update 2-3 Draft Report Transmission Line Route Alternatives and Technical Characteristics e The route will result in the closer placement of the distribution substation to the potential ferry landing near Kupreanof for the road development which will reduce the cost to get electric service to the ferry terminal and other loads near Kupreanof. e The distribution substation should be able to be placed more in the center of the Kupreanof area load,resulting in better reliability and/or a lower investment cost to get the same level of system reliability. The disadvantages of this route are: e It goes near Kupreanof,which enjoys its pristine natural environment and has historically resisted the development of roads and reluctant to support the development of electrical distribution facilities in the area.However,the overhead line would most likely be located some distance from the community itself. e There would be four overhead to underground terminations for the transmission facilities instead of two on the route described in Alternative 1. e Part of the route,from node P1to node P3,would be outside of areas easily accessible, especially for unexpected maintenance. S2 to Kake In a meeting on January 13,2009,with staff from the Alaska DOTPF,the study team was told the State expects to receive a 300-foot wide reciprocal easement from the USFS for the road from S82 to Junction Seal Point (approximately three miles west of S5).The distance of the road is approximately 47 miles.CAI has reviewed the route between these two points and believes,in general,the transmission line and road can be constructed within this width.CAI is also confident the line and road can be designed and built within an easement with an average width of 300 feet between the two terminal points of the road project.Using an "average width” approach would allow the Alaska DOTPF to get easements wider than 300 feet in some areas, some of which are described below,in exchange for easements narrower than 300 feet in other areas.In this way the total easement width would average 300 feet across the total project length. There are three primary reasons the road and transmission line may not fit within 300 feet in any specific section.They are: e The road has a number of switch back type turns.The most efficient way to construct a transmission line is on a straight line.It is also difficult to turn a transmission line when the inside angle of the line is less than 60 degrees.The specific problems encountered are shown on Figure 2-2.In these situations it may be necessary to get easements beyond the 300 feet to facilitate the construction of the road and the transmission line. e It may also be necessary,at a limited number of locations,to have guying extend beyond the 300 foot width.The greatest risk of this is where there are steep side hills on the outside of a significant angle.This is shown in Figure 2-3. Kake -Petersburg Intertie Study Update 2-4 Draft Report Transmission Line Route Alternatives and Technical Characteristics e The third concern is associated with the steep side slope section of the Northern Route. From S82 to S2a,there will be a potential difficulty in placing the transmission line - structures and conductors -in locations where it would not be damaged if blasting is required to expand the road. The 2005 Study evaluated several other route options,however,for this study,the only other route option under consideration is: ¢Center-South Route -(46.8 miles total length,two marine crossings totaling 1.8 miles) Connects to the existing Tyee transmission line south of Petersburg,crosses Wrangell Narrows,proceeds west across the Lindenberg Peninsula,crosses Duncan Canal and continues northwest toward Kake.This route was defined in previous studies as the Southern Route and is also referred to as the Tonka-Duncan Canal route. A map of the routes prepared for the 2005 study separated each route into multiple segments noted by identifying nodes.These are shown on Figures 2-1,respectively.The lengths of each segment were then determined and used to establish a cost estimate for each route.These cost estimates were updated as part of this study. The updated cost estimates were made using cost data from previous studies,data from Southeast Alaska utilities,regional power agencies,and local contractors.In addition,CAI's general experience with 69-kV and 138-kV transmission line design and construction was also used in the estimates.The approach used was the same for all alternatives.This provides a consistent estimating approach applied to the different routes. The results of the cost estimate are shown in Table 2-1.Alternative cost estimates were made for both 69-kV and 138-kV construction as well as for the Northern Route with and without the DOT road assumed to be built in advance.Cost estimates are discussed in more detail in Section 4 of this report. Kake -Petersburg Intertie Study Update 2-5 Draft Report Transmission Line Route Alternatives and Technical Characteristics TABLE 2-1 Estimated Comparable Costs of Development and Construction 69-kV Option with DOT Road ($000) Northern Route With -With Center-South Submarine Directional Route Cable Bore Overhead Line $16,909 $19,791 $21,811 Clearing and Road Construction 3,765 1,120 1,552 Submarine Cables 8,138 8,850 - Directional Bore Crossings --1,710 Switchyards and Substations 1,868 1,521 1,521 Subtotal -Direct Costs S 30,679 $31,282 $26,594 Indirect Costs S 2,644 S$2,503 $2,128 Contingency (15%)4,970 5,068 4,308 Total Costs $38,294 $38,852 $33,030 The 2005 study estimated that the cost of the Center -South route was the lowest of the alternative routes.The Northern route with the directional bore across Wrangell Narrows is now estimated to be the lowest cost alternative.This route is significantly lower cost than the Northern route with the submarine cable,however,it may be that crossing Wrangell Narrows and constructing overhead lines near Petersburg Creek and the community of Kupreanof proves to be noticeably more difficult to gain necessary permits and approvals.When compared to the Center-South route,the Northern route with the submarine cable still remains the highest cost alternative due to the cost of the submarine crossing,the longer length of the route and the generally more rugged terrain it crosses. Evaluation of Alternative Routes The majority of the land involved along the potential routes is federal land administered by the USFS.Some State land would also be crossed for certain alternative routes.Near Kake,the routes cross private property and tribal lands owned by the Village of Kake.Marine crossings are across bodies of water governed by the State of Alaska.During this study CAI staff reviewed property ownership adjacent to Kake.As part of this effort it was determined the Sealaska Corporation owns a large section of the land the line would cross as it nears Kake. In this study,CAI staff reviewed the work completed as part of the July 2005 study.Where changes were noted,most specially for the Northern Route,the route information including cost was updated.For the 2005 study,two CAI engineers,knowledgeable in transmission design and construction practices of Southeast Alaska spent one week in the field to gain first-hand information with regard to the general project vicinity.This field evaluation involved aerial Kake -Petersburg Intertie Study Update 2-6 Draft Report Transmission Line Route Alternatives and Technical Characteristics reconnaissance of the area,driving USFS roads,meeting with local officials,and documenting various alternative routes.The process attempted to capture all reasonable routes that would be further studied and screened for viability.Also,as part of the 2005 study,several meetings were held in Kake and Petersburg to discuss the project and hear from the community leaders, merchants,and utility personnel. The 2005 study team reviewed the area from both the air and ground traveling by fixed wing aircraft,helicopter and standard wheeled vehicles.They reported the existing road system was in excellent condition and would provide a suitable corridor to facilitate construction and maintenance of a transmission line.Since the 2005 study the USFS has made some changes to its road system within the study area.It has closed some of the roads,removing bridges and allowing the vegetation to grow on the roads.To build the transmission lines in these sections it will be necessary to restore the bridges,at least for construction and to brush out the roadway. The road base should still be suitable for use during construction. During the work for the 2005 study,specific attention was given to the observation and study of proposed submarine cable locations.The initial study effort was to minimize the marine crossings and where required,to study the location and determine the use from a commercial fishing,sport fishing,types of commercial vessel traffic,tides,dredging activity,and depth of water. Transmission Line Design Concepts for the KPI Recommended System Voltage A load flow analysis was conducted as part of this study to evaluate the impact of alternative operating voltages on overall system performance.The results of this load flow study are provided in Appendix A.It is clear from the results of the load flow study that the Kake load alone,even with a reasonably high level of growth,can be reliably served by a system operatingat69-kV°.However,when considering that in the future an interconnection of up to 20 MW of generation at Takatz Lake may be made at the Kake end of the KPI,it becomes clear a 69-kV solution would be inadequate.If it is expected that the Takatz Lake project will be interconnected to the KPI within the first half or two-thirds of the line's life,it is recommended that the overhead sections of the line be constructed at 138-kV,at a minimum. Since it is not certain as to whether or not the Takatz Lake project or other potential regional hydroelectric projects would be interconnected to the KPI at this time,it is recommended the line be built and operated at 69-kV.However,since a higher voltage may be appropriate,cost estimates for the KPI at both 69-kV and 138-kV have been developed.The estimated costs of the KPI are provided in Section 4 of this report. *It is estimated that a 34.5-kV operating voltage for the KPI could adequately serve total loads in Kake up to about 2 MW.This would serve the existing load but would not provide for much commercial growth in the future. Kake -Petersburg Intertie Study Update 2-7 Draft Report Transmission Line Route Alternatives and Technical Characteristics Overhead Transmission Line Design Concepts Conceptual Design The conceptual design envisioned for the KPI would use single wood pole structures with horizontal post insulators with the center phase opposite.This design will be able to take advantage of existing roads for construction and maintenance and has been used successfully for other transmission applications elsewhere in Alaska.The estimated useful life of a transmission line of this type is 45 to 50 years,and potentially much longer.The average span length is estimated to be 350 to 400 feet.The only segments of the KPI which are considered a candidate for H-frame long span construction are where no roads presently exist.For 69-kV construction, the conductor considered is 336.4 kcmil 30/7 ACSR/AW "Oriole/AW”.For the Northern Route, the assumption is the vast majority of the line would be constructed as single pole,since the road would be built in tandem with the transmission line.See Appendix B for preliminary examples of typical line layout for the Northern Route and for the Center -South Route as defined in the 2005 study. For the Center-South route,the opportunity exists to follow logging roads for much of the length (the roadless section varies for the different alternatives but is estimated to be approximately 25%of the total line length).Following existing roads will provide access advantages during construction and will minimize the need for clearing.A short span road-side power line will also provide future maintenance advantages due to easy access and smaller structures.An example of the single wood pole design is shown in Figure 2-4. Physical Loading Typical physical loading criteria and associated overload capacity factors used for overhead transmission line designs in Southeast Alaska at lower elevations consist of combinations similar to the following criteria.The following load cases were used to develop the typical line segments for the preliminary layout of the Northern Route.Load Cases 1,2 and 3 are required by the National Electrical Safety Code (NESC)for design of overhead transmission lines.Load cases 4,5 and 6 are based on local utility experience.Although these load cases sound quite severe they do not appear to significantly change the design outcome and do not have a significant cost penalty.For structure strength,this study has considered load cases 4,5 and 6 in addition to the NESC required load cases for its feasibility assessment. There have been reports of high ice loading in some locations in the general vicinity of the KPI, particularly at the south end of Mitkof Island.During final design,a meteorological specialist may be consulted as to specific local ice conditions and whether or not certain sections of the line should be built to accommodate higher ice loadings.The length of any areas requiring higher strength construction than that contemplated for the majority of the KPI is not expected to be extensive. 1.NESC Heavy -Method A. NESC Heavy loading consists of a 4 pounds per square foot (PSF)wind (40 MPH) applied to the structure and supported facilities with the conductors and cables coated by Kake -Petersburg Intertie Study Update 2-8 Draft Report Transmission Line Route Alternatives and Technical Characteristics %inch radial ice which is assumed to weigh 57 pounds per cubic foot.For this case, conductor tensions are to be consistent with an ambient temperature of 0°Fahrenheit. Additionally,a constant of 0.3 pounds is to be added to the resultant of the wind and weight related loads (for the purpose of developing conductor design tensions only). Overload Factors which are applicable to the NESC Heavy Method A load case applied to wood structures are 2.5 for wind related loads,1.5 for weight related loads and 1.65 for wire tension related loads.When using these Overload Factors for wood,a strength reduction factor of 0.65 is to be used.Guys shall use a strength reduction factor of 0.9. The applicable Shape Factor is 1.0 for cylindrically shaped components,1.6 for components with flat sides. 2.NESC Extreme Wind For structures which exceed,or support facilities which exceed a height of 60 feet above ground or water level,an extreme wind condition is to be considered. NESC Extreme Wind loading for the Juneau/Hoonah region is generally considered to be 120 MPH nominal design 3-second gust (NESC Figure 250-2b).In accordance with the NESC,conductor tensions are to be consistent with an ambient temperature of 60°F.In Southeast Alaska the temperature criteria has typically been based on 40°F.Overload Factors that are applicable to the NESC Extreme Wind load case are 1.0 for wind,weight and tension related loads.For wood structures evaluated using these Overload Factors,a strength reduction factor of 0.75 is used.Guys are to utilize a strength reduction factor of 0.9.The applicable Shape Factor is 1.0 for cylindrically shaped components and 1.6 for components with flat sides. 3.NESC Extreme Ice with Concurrent Wind Loading For structures which exceed,or support facilities which exceed a height of 60 feet above ground or water level,an extreme wind condition is to be considered. NESC Extreme Ice with Concurrent Wind Loading consists of a 6.4 pound per square foot (PSF)wind (50 MPH)applied to the structure and supported facilities with the conductors and cables coated by '%inch radial ice (NESC Figure 250-3C). Overload Factors applicable to the NESC Extreme Ice with Concurrent Wind Loading case are 1.0 for wind,weight,and tension related loads.For wood structures evaluate using these Overload Factors,a strength reduction factor of 0.75 is used.Guys are utilized to a strength reduction factor of 0.9.The applicable Shape Factor for cylindrically shaped components is 1.0 and 1.6 for components with flat sides. 4.Extreme Ice The NESC Extreme Ice case is based on 1.5 inches radial ice (57 pounds per cubic foot) at 30°F with no wind.This load case would be applied with a 1.0 Overload Capacity Kake -Petersburg Intertie Study Update 2-9 Draft Report Transmission Line Route Alternatives and Technical Characteristics factor for wood structures for wind,weight and tension related loads while using a strength reduction factor of 0.75 for wood and 0.9 for guys. 5.Extreme Combination Ice and Wind This load case is based on 1 inch radial ice (57 pounds per cubic foot)at 0°F in combination with a 4 PSF (40 mph)wind.This load case would be applied with a 1.0 Overload Capacity factor for wood structures for wind,weight and tension related loads while using a strength reduction factor for wood of 0.9 and 1.0 for guys. 6.Combination Snow and Wind This load case assumes 2 inches radial snow (37 pounds per foot)at 30°F in combination with a 2.3 PSF (30 mph)wind.This load case would be applied with a 1.0 Overload Capacity factor for wood structures for wind,weight and tension related loads while using a strength reduction factor for wood of 0.75 and 0.9 for guys. Foundations and Structure Support The soils in Southeast Alaska vary from muskeg to rock and everything in between.Earlier field work has indicated that much of the Center -South route of the KPI is glacial till and colluvial, acceptable for standard direct embedment foundations.The 1987 Intertie Study was based on cross-country construction and the report estimated the mix of soils at 75/15/10 percent for normal,rock and muskeg soils,respectively.However,even in the areas considered normal the top 3 feet to 5 feet of material is organic and has essentially no lateral strength capability. The preliminary design for the KPI as defined in this study is based on standard embedment depths plus an additional 2 feet (10%of pole length +2 feet is normal +2 extra feet depth for a total of 10%of pole length +4 feet)for tangent structures in normal soils.Structures located in rock and guyed structures are assumed to be embedded at standard embedment depths (10%+2 feet).Pole structures located in muskeg can be stabilized using a wood raft at ground line with side guys or by construction of a foundation system using either driven H-piles or by using a culvert embedded at a depth required for lateral stability and the pole placed inside the culvert. It is anticipated short-span construction will generally work along the roads the line will follow; the mix of soils will be about the same as suggested in the 1987 Intertie Study report,75/15/10 percent for normal,rock and muskeg soils. Most sites will require imported granular backfill hauled to the site.Poles located off the road by more than 20 feet will require an access work pad created by extending the road fill to the site. Where the distance from the road makes this impractical,temporary matting would be used to gain access to the site during construction.Ifthe distance is extreme,helicopter access would be considered.In the road-less sections near Duncan Canal,it is assumed a staging area would be constructed and access to structure sites would be by helicopter. A diagram of the typical pole embedment is shown in Figure 2-4. Kake -Petersburg Intertie Study Update 2-10 Draft Report Transmission Line Route Alternatives and Technical Characteristics Electrical Clearances to Grade Minimum clearances above grade for conductors are required by the NESC based on line voltage and land use under the line.The NESC required clearance must be maintained under either of two conditions:1)the conductor sagging at its maximum operating temperature (220°F minimum),and 2)under the NESC Heavy loading district requirement of %inch radial ice at 30° F (without the 4 psf wind).The vertical clearance for 69 kV and 138 kV lines above roads and lands that can be traversed by trucks is 20.7 feet and 22.2 feet,respectively,and the vertical clearance for communication conductors (ADSS)above roads and streets is 16 feet,per NESC rules 232B1,232C1la and 232D4.The vertical clearance for 69 kV lines is 20.2 feet. Engineering judgment should be used to determine if clearances in addition to the minimum required by NESC should be applied.This should be considered in specific areas with access to unusually large vehicles or special conditions such as extreme snow depths.In addition to the basic clearance requirement,it is generally prudent to add a plotting margin (2 to 4 feet)to compensate for irregular terrain not identified in the survey,side hills,plotting errors, construction variables and other contingencies.For the purpose of the preliminary layout,the basic ground clearance for the transmission line has been assumed to be 25 feet minimum with the conductor temperature at 220°F final sag and 20 feet minimum with conductor at 30°F final sag and %inch radial ice for the communication conductors. Conductor Selection For this study 336.4 kcmil Aluminum Cable Steel Reinforced (ACSR)conductor was used in the overhead line sections.This is consistent with the findings of the 2005 study.In the 2005 study three conductor sizes were considered:336,266,and 4/0.All three conductor sizes are adequate to meet the expected maximum electrical load at Kake. The existing TWP transmission line uses 336.4 ACSR conductor and,therefore,the two systems can share a common stock of spare conductor if 336.4 ACSR conductor is used for the KPI. Further,the terrain traversed by the KPI is rough and much of it will be difficult to reach for timely maintenance.The additional mechanical strength of the 336 ACSR conductor could be helpful in reducing the amount of maintenance required over the life of the KPI.A third point is that if the full plan for the Southeast Alaska transmission system is completed,the Sitka -Kake - Petersburg transmission interconnection may require the additional capacity of the 336 ACSR conductor. Right-of-Way Clearance Right-of-way width is often established based on conductor blowout.However,essentially the entire line length of the KPI is undeveloped and therefore blowout of the conductor is not a consideration.Clearing and maintaining of the right-of-way will be a major cost item during initial construction and for future maintenance.This issue requires a compromise between the initial cost of removing danger trees and the amount of maintenance that will be required on an annual basis and following extreme weather conditions. Kake -Petersburg Intertie Study Update 2-11 Draft Report Transmission Line Route Alternatives and Technical Characteristics Reliability of the line will be of major concern to IPEC,KWETICO and the SEAPA.The line will be designed to withstand anticipated extreme weather conditions;however,it will not be designed to withstand the impact of falling trees.In the areas where tall trees exist,reliability of the line is directly related to the extent of clearing.From strictly a reliability standpoint any tree that could potentially strike the line when falling should be removed.Based on the fact that some line sections will be located in areas where there are 100'to 150'tall trees,the width of clearing would calculate to be upwards of 300 feet depending on the selected route.A narrower right-of-way requirement will be acceptable in other areas. Where the line is placed near roads the road itself will provide approximately 50'of cleared width on the roadside.Also,much of the area along the route of the KPI has been clear-cut in the recent past.Areas that have been clear-cut,even as long as 35 years ago,have much shorter trees,often less than 40 feet in height.Fast growing scrub trees such as alder may require clearing within the right-of-way along existing roads.Typical pole placement and clearing requirements along existing logging roads are shown in Figure 2-5. Based on an objective of minimizing future maintenance costs suggested clearing criteria for the KPI would be to: e Cut all trees within 50'from centerline.Low growing brush would not be cut. e Cut all brush in the immediate vicinity of structures. e Remove all trees that could strike the line if they fall. Access Road Construction Standards USFS logging roads are built to different standards than Alaska DOTPF arterials and collector roads.In areas of muskeg,the logging roads are typically built on top of the significant layer of organic material.In this manner,the road "floats”on the muskeg underlayment and continues to settle over time.The DOTPF removes the muskeg underlayment before building its roads.In areas of Southeast Alaska where the DOTPF is building new collector roads and arterials on existing log haul roads,such as on Prince of Wales Island,the cost of the road construction is indicated by DOTPF to be nearly as high as new construction because of the need to remove the organic underlayment along so much of the route. It is proposed that where existing logging roads do not exist,an access road of some type would be constructed alongside the KPI route.Three types of access roads have been considered: DOTPF Pioneer road,modified logging road and access trail. DOTPF Pioneer Road The Northern route alternative assumes that the DOTPF would build a pioneer road prior to the transmission line being constructed on any given section of the project. The typical DOTPF standard for an island collector road is a 22 foot-wide,paved road surface with a 2 foot wide shoulder.An island arterial road is a 22 foot-wide paved road surface with a 7 Kake -Petersburg Intertie Study Update 2-12 Draft Report D i :' 3?ue or 4 i NORTH MAINLAND maryheye!.ner fe”st fine *9 "se{*PREDERI CE so setae °%o rN taThemeBewun*i" f «bY AGASSIZcyaPEMNSULAo +"yf D*ree Vos,,5 q 4 Paring Bas 'i,Ap '<NBpon\ HAMILTON \ qSABeano-: .'SUKOI\(LANDS tendnae ; \4¢ {1 nhe"a'nf wo > if Ot ok KUPREANOF 4#e'p>td "a a m5 p2|7 PETERSBURG.:51 .*-+,te 8 V < e NORTH MAINLAND -at Pao t*;'qo . oe ° ] + ° GH LAND *' . 1 "N.;q KUPREANOF ISLANDPr|o * Pa i ron ' aos . KUIU ISLAND i Ny ; .' *| ! °oefKUIUISLANDat : .\}MITKOF ISLA °sp em2:i =f roafew.SAND@:is ix:"WOEWOLSKI }a!ratmats ISLAND BuniKUPREANOFISLAND. x teen a *SLAND e :reete Palamy iOS Py a id :¥ we :.*",i :[ee een rer aarl tom ”':SUMNER STRAIT '$ ve we a Sy ----aw =ater.mnProposedRowseAternatives(Nase:Node Link Segmental Seen Map Ground Fenturee Fomary Features a----Nonhern(8,81,§2,$3,$4,85,K)---Sveem Hoon Fre yum and N .0000 wom some soo soon _.KAKE TO PETERSBURG TRANSMISSION INTERTIEwomensWest-Morten (8,P,P,P2.P9.PO,PS,PG,7,82)--Srorsine Maneged:.ow Potential issii i----Corder=Bout (F,41,12,78,14,06,17,70,711,98.49 --host emmmmemies Procuctive Forwet '",=,a ws J P 69 kV Ti Line Route Altematives were Eccaling Trangmiasion Ling Low Ste Forest -_..x .Oni sth,t Oo fe Tt ideraihcasloryNode CS Bek Water Non-Forest Consition Ww E ae 7 . 5RmFrothWoterecoranneCearaSyaten(CCS)Alea St Pe,i a O Hittle &Associates,inc.EEGIEIE,-ZeealacoasedereinfomationProcessingStandard(F#°S)Zora:01 x =wee e Project Ares January 10,2009sSphevadGeodetcRetornosSyaee1500(GAS 1980)ALASKA ww - ROADCENTERLINEINSIDE XMSN LINE ANGLE LESS THAN 60°-,--Lu = a ce Lidte Zz Ld O a < 's) ce INSIDE XMSN LINE ANGLE LESS THAN 60°CORRECTED BY INCREASING ROW WIDTH SOUTHEAST CONFERENCE ROW EASMENTCANTKAKE,AK TO PETERSBURG,AK ISSUE 01 ACL $B 02/09CommonwealthAssociates,Inc.rpm RE NONE:Jackson,Michigan /Mount Vernon,Washington JPW REV.0 FIGU RE 2-2 SH. LOGGINGROAD_)ROWROW300" GUY WITHIN 300'ROW WIDTH ON LEVEL GROUND (an) < © aa O = O &! © | CH == O O a aa 300° GUY EXTENDS BEYOND 300'ROW WIDTH ON SLOPE SOUTHEAST CONFERENCE ROW EASMENTCayKAKE,AK TO PETERSBURG,AK WYEASME C ith Associates,Inc ach $B 02/09icn/t on,atin |Ey REV.0 Figure 2-3 |SH.1 | FIBER 65°POLE SHOWN Hl SOUTHEAST CONFERENCE TAN HP WOOD POLECATKAKE,AK TO PETERSBURG,AK DESIGNED AT 138 kV |ram a re OPERATED AT 69 kV Commonwealth Associates,Inc.[isp ai NONEJackson,Michigan /Mount Vernon,Washington CLS REV.0 FIGURE 2-4 SH. CONDUCTOR 336 KCM ACSR COMMUNICATION 24 STRAND ADSS HORIZONTIAL SPAN:350'40'-0TYPICALJ |aa 50'-0” thee am Qfe< FIBER ©faaro)Vy= Oo 8 Y),\4 ee LN ee a 30'-0” 60'-0” TYPICAL CLEARING LIMITS FOR USFS LOG ROAD 6 ACRES/MILE ADDITIONAL CLEARING ON EXISTING LOG ROAD SOUTHEAST CONFERENCE Ko.Cay KAKE,AK TO PETERSBURG,AK SB 102/09 TYP.TANGENT WOOD POLE DESIGNED AT 138 kV OPERATED AT 69 kVOWN, C Ith Associates,|=Dommonweassociates,inc.Jackson,Michigan /Mount Vernon,Washington CLS REV.NO./DATE: REV.0 FIGURE 2-5 =|SH.4 Transmission Line Route Alternatives and Technical Characteristics foot-wide shoulder.The posted speed on the collector road is 30 mph while it is 35 mph on thearterial'. The DOTPF indicated it is unlikely that a road of this type would be constructed in time to be used for constructing the transmission line.However the first step in development of a DOTPF road would be to construct a pioneer road for general access.The Pioneer road would be similar to a typical USFS logging road.For the alternative with the DOTPF road,the cost estimate included in this report anticipates the pioneer road is built by DOTPF prior to the construction of the line.It is possible,even potentially preferred,that the construction of the transmission line would follow nearly immediately after completion of the road segments.This would provide the opportunity for the transmission line to be completed no later than one construction season after the road is finished. Modified Logging Road (Included as part of the transmission line development) The Center -South route has roadless sections.In these areas it is proposed that a road would be constructed as part of the transmission line construction project.This road would be used for future maintenance. The typical access road would be built with a 60 foot-wide right-of-way,a total 14 foot-wide road with a 10-12 foot-wide gravel covered surface and road bedding made with typar or filter fabric.The road would be similar to typical USFS logging roads but would probably be constructed to a lesser standard.The USFS typically uses a 60 foot wide right of way for its standard log haul road but prepares a slightly larger road surface than is expected for the construction of the transmission line. Access trail (Included as part of the transmission line development) Potentially in some areas,access may be controlled to a greater extent requiring a narrower,less intrusive access trail be constructed.It is proposed that where existing logging roads do not exist,an access road be constructed alongside the entire KPI route.Access trails are not expected to be needed for either of the proposed KPI routes. Raptor (Eagle)Protection Southeast Alaska is home to many eagles and therefore the line design must consider raptor (eagle)protection.The electrical industry standard for raptor protection is currently based on "Suggested Practices for Raptor Protection on Power Lines:The State of the Art in 1996”.This publication suggests that 60 inches between conductor phases as well as 60 inches to all grounded parts will provide a safe design for large raptors such as eagles.The conductor phase spacing of most 69-kV lines exceeds this recommended dimension.However the length of the insulator should also be considered since the base of the insulator is a different potential than the conductor.The typical 69-kV insulator,36 inches to 42 inches in length,does not meet the 60 inch minimum distance,so it might be necessary to use longer 138-kV insulators to meet the raptor guideline. 7 Source:Southeast Alaska Transportation Plan dated September 2004,Figure A-1. Kake -Petersburg Intertie Study Update 2-13 Draft Report Transmission Line Route Alternatives and Technical Characteristics It should be noted,69-kV insulators have been used without problems related to raptor fatalities. Historical performance is considered to have similar significance,in this case,as the published guidelines.In Alaska a shield wire is seldom used and the base is not typically grounded so the 69-kV insulators are thought to meet the spirit of the raptor protection., Substation and Switching Station Concepts For the Center --South route a new switching station is proposed to be constructed at node T that will tap into the existing TWP 138-kV/69-kV transmission line.For this report,the substation is designated as substation Sub-T,the location of which is shown in Enlargement A of Figure 2-1.Near Kake,a substation facility to connect to IPEC's existing 12.47-kV distribution system will need to be constructed.It is recommend that these new facilities be configured as shown in Figure 2-6. To ensure continued system reliability for the existing Petersburg electrical system,a breaker for the Kake exit at Sub-T is recommended.Circuit problems on the new KPI will then only affect the Kake load.Similarly,a second breaker is proposed for the Petersburg exit at Sub-T such that circuit problems north towards Petersburg will be isolated from affecting the Kake load.For initial Sub-T exit to Wrangell a motor-operated disconnect switch is recommended. Initially,the unplanned loss of the interconnection to Wrangell will cause an outage for both Petersburg and Kake with or without a third breaker at Sub-T.Therefore,it is not prudent to add the expense of a third breaker at this time.However,if the Sitka -Kake Intertie is built at a later date,Sub-T should be expanded into a three-breaker ring bus.With two independent sources of supply one will suffice if the other is lost so the added reliability of a full ring bus at Sub-T becomes prudent.Designing the new Sub-T for future expansion into a three breaker ring bus is a nearly zero cost plan to minimize the future costs for when,or if the Sitka -Kake Intertie or another similar development is built. The Kake substation is expected to be constructed at a suitable site near Kake,potentially up to five miles outside the town.It is proposed to be configured as: A single 69-kV/12.47-kV power transformer, Protected by a high-side fused disconnect, A distribution class plus or minus 10 percent voltage regulator, Two (2)12.47-kV feeders IPEC's generating units will be interconnected with the TWP system but will not generally be used at the same time that poweris being delivered from Tyee Lake Submarine cable termination yards will be needed on both ends of each cable crossing.The submarine cable termination yards are expected to require relatively small areas that will serve as the interface between overhead sections of the line and submarine cables.They will generally be located near the shoreline but behind the existing tree lines to limit visibility from the water. Kake -Petersburg Intertie Study Update 2-14 Draft Report Transmission Line Route Alternatives and Technical Characteristics The termination yards will contain lightning arrestors and risers that connect the overhead system to the submarine cable.Disconnect switches would also be installed to allow for the electrical isolation of the cable for maintenance and testing.A typical termination station is shown below in Figure 2-6. FIGURE 2-6 Proposed Configuration of the Kake Substation and the TWP Interconnection Facility 6oKY PETERSBURG |SUBSTATION i rr mene |A 5000 KVA |aa a | <S 69-12.47KV (FUTURE)lRINGBUS--]| j |4 | |O |@)|| 1 || to |IT |KAKE |LJ "|"et or |1247KV LoL i CC||® WRANGELL Submarine Cables Both of the route alternatives will require either submarine cables or buried underwater crossings of marine waterways.Cables to be used for the KPI submarine crossings would be similar to the crossing between Douglas Island and Young Bay installed during the summer of 2005.The cable would be a single-armored,69-kV,3-phase,500 kcmil copper conductor,dielectric submarine cable with bundled fiber optic communication lines.The bundled cable will be about 6.5 inches in diameter (7.9 inches for 138-kV cable),however,the exact cable specification will not be known until final design is complete.A diagram of the submarine cable as currently proposed is included in Appendix C. An important factor in specifying the submarine cable will be the determination of potential extensions of the KPI to Sitka or other load centers beyond Kake.For the Center-South Route,it is expected that both the Wrangell Narrows and the Duncan Canal crossings would be placed at essentially the same time with the same cable laying equipment.This should reduce the mobilization costs which are quite significant. Kake -Petersburg Intertie Study Update 2-15 Draft Report Transmission Line Route Alternatives and Technical Characteristics Two separate submarine cable crossings will be needed for the Center-South Route.The first crosses Wrangell Narrows about eight miles south of downtown Petersburg and is about 0.6 miles in length.Tide movements are indicated to be very limited at this location and the waters are generally calm.The second crossing is about 1.2 miles in length and crosses Duncan Canal between points about 1.75 miles south of the mouth of Mitchell Slough on the east and about 2.5 miles south of Indian Point on the west side of Duncan Canal. From NOAA charts the water depth at the Wrangell Narrows crossing appears to increase uniformly from 0 feet at the shoreline to 110 feet near the center of Wrangell Narrows.The nautical charts show a bottom that consists of mud and rocks.No evidence of steep terrain or large rocks,that might cause suspensions in the submarine cables,has been detected.However, a thorough submarine topographical survey and subsurface profile needs to be accomplished to determine the best route for the submarine cable.This will identify areas to be avoided such as shipwrecks,large rocks,rock outcroppings,etc.,that could cause suspensions and damage to the cable.This survey may be conducted utilizing a multi-beam sonar system such as the Reson Seabat 8101.If deleterious conditions are suspected,additional information should be obtained with a side-scan sonar system. Based on the information presently available,no obvious problems are anticipated with the cable installation at Wrangell Narrows.The cable should be buried approximately 1 meter in depth at both shores,out to a depth of 10 feet below Mean Lower Low Water (MLLW).Either direct burial or placement in a duct with a thermal backfill may be utilized.Due to the large amount of boat traffic through Wrangell Narrows,burial for the entire length is recommended. The water depth at the location of the Duncan Canal crossing is approximately 100 feet at maximum.No particular problems are anticipated with this crossing except that the timing of placing the cable should be coordinated so as not to interfere with the crabbing season in the Canal. Both of these submarine crossings were surveyed as part of the 1987 Intertie Study®.Findings related to these surveys are: "The crossing on Plate 5 [Wrangell Narrows]is a bowl-shaped depression as deep as 110 feet.Most of the alignment is soft bottomed except the eastern approach to Mitkof Island.Slopes on the east approach vary between 10:1 (6°)and 2:1 (27°)whereas those in the west approaching the Lindenberg Peninsula of Kupreanof Island are more gentle, varying between 14:1 (4°)and 3:1 (18°).There do not appear to be any obstacles to construction at this crossing.Wrangell Narrows is a busy thoroughfare for ship traffic, both commercial and recreational.Tanner crab fishing occurs from mid-January to mid- February and salmon trolling lasts from May through the first week in June.” ®Crossings 6.1 and 6.5,Appendix A,Transmission Line Submarine Crossings -Oceanography/Meteorology, Alaska Power Authority,Southeast Alaska Transmission Intertie Study,Harza Engineering Company,October 1987.Note that the eastern landing of the Wrangell Narrows crossing as surveyed for the 1987 study appears to be slightly north of the presently defined location. Kake -Petersburg Intertie Study Update 2-16 Draft Report Transmission Line Route Alternatives and Technical Characteristics "Crossing 6.5 [Duncan Canal],Plate 6,is bowl-shaped in cross section with a fairly gentle west approach to Kupreanof Island,11:1 (5°),and a steeper approach to the Lindenberg Peninsula,6:1 (9°).Echograms indicate the crossing is probably floored by soft sediments and its deepest point is approximately 100 feet.The very near shore parts of the approach sounded with lead line may be hard bottom.There are no submarine cables in Duncan Canal.Construction in Duncan Canal may be delayed if emplacement is planned during the commercial crab fishing season.Dungeness crab fishing season is split with a summer season from May through September,and a winter season from October through January.” For the Northern route,it is proposed that the submarine cable be terminated to the southeast of Sandy Beach Park in Petersburg on city-owned land.The cable would be extended from the beach to a depth of approximately 180 feet and turn northwest towards Kupreanof Island. Generally,the depth of placement would be in the range of 150 to 200 feet.The cable would need to be placed sufficiently north of the entrance to Wrangell Narrows to avoid the dredging area but to the south of an underwater disposal area north of Petersburg. A relatively new fiber-optic communication submarine cable reaches shore in north Petersburg at a location near Outlook Park.If the KPI submarine cable were to be placed in the location as indicated in the previous paragraph,the KPI cable would need to be laid over the communication cable some distance offshore.This may not be acceptable to the communication cable owner, and as such,it may be necessary to consider an alternative termination point for the KPI submarine cable near Outlook Park,to the west of the communication cable.This would require an additional section of overhead line in Petersburg to the north of the airport.It is not expected that this additional line would add significantly to the estimated cost of the KPI. The cable would terminate on Kupreanof Island in the general vicinity of Prolewy Point but due to beach conditions in this area,the termination location may need to be moved north to the area of Five Mile Creek.An underwater survey will be needed to determine the best location for the submarine cables. Buried Cable Underwater Crossing (Directional Bore) Another option that could potentially be used for the crossing of Wrangell Narrows for the Northern route alternative is underground cable installed in a pipe to be placed by means of a horizontal directional bore beneath the sea bottom.It is expected that the length of the crossing would be about 1,400 feet in length.A second,shorter crossing of about 800 feet in length beneath Petersburg Creek could also be needed to minimize the impact of the transmission line near the mouth of Petersburg Creek.Directional bores are commonly used in the utility industry for placing pipes and conduits beneath rivers and other bodies of water. The buried cable option would require that a 10 inch diameter bore be made below the channel and an HDPE pipe be installed in the boring.Power cables and fiber optic cables would be pulled into the pipe.The cost of the directional bore is highly dependent on the quality of soils in which the bore is made.If there is a heavy consistency of cobbles and boulders or large alluvium over 4 inches in diameter without much sediment to provide cohesion and this Kake -Petersburg Intertie Study Update 2-17 Draft Report Transmission Line Route Alternatives and Technical Characteristics consistency can't be avoided at any depth,the directional bore option may not be possible.Rock itself will not necessarily prevent the boring from being accomplished but could increase the cost.It will be necessary to conduct soil evaluations early in the process if this alternative is considered viable. It is also potentially possible to use the horizontal directional bore concept for the crossing of Wrangell Narrows for the Center-South route.This crossing location is about 0.6 miles in length which should be technically feasible,subject to soil conditions at the site.If viable,the directional bore would be lower cost than the submarine cable and would provide greater protection of the power conductors from marine traffic and environmental factors. Duncan Canal Overhead Transmission Crossing The Center -South route is proposed to have two submarine cable crossings,0.6 miles in length at Wrangell Narrows and 1.2 miles at Duncan Canal.Air traffic in the Petersburg area would make an overhead crossing of Duncan Canal inappropriate;however,an overhead crossing of Duncan Canal may be acceptable. The recently completed Swan -Tyee Intertie has several long single span crossings,one which is over 1.25 miles in length.These crossings were feasible due to the steep terrain and the ability to position support structures at relatively high elevations near the water's edge.These crossings also use aluminum clad steel conductor (37#0 Alumoweld)which can be installed with less sag than the standard conductor due to its high strength to weight ratio. Duncan Canal at the proposed crossing location does not have terrain with sufficient elevation to allow crossing the water in a single span;however,a three span crossing appears to be feasible. A three span crossing would require two structures located in the water approximately 25%of the crossing distance from the shoreline.A preliminary review of marine charts shows the crossing distance at the edge of the water to be approximately one mile with a maximum depth of approximately 85 feet near the center of the canal.Assuming the depth of water increases uniformly from zero at the shore to a maximum depth of 85 feet near the center,the water depth at the support structure locations would be approximately 40-50 feet.It is feasible to construct foundations in water of this depth;however,construction approach and cost would be influenced by the type of soils encountered. By placing two support towers in the canal and locating dead-end structures on the bluffs on each side of the canal,an overhead line consisting of three spans could be used to cross Duncan Canal.A conceptual cost estimate for a crossing as described is estimated to be $2 -$3 million. Foundations represent approximately 50%of the total cost and are the largest unknowns related to acrossing.The actual cost could vary significantly depending on the type of soils found at the site.Determination of soils will require subsurface investigations. Kake -Petersburg Intertie Study Update 2-18 Draft Report Transmission Line Route Alternatives and Technical Characteristics It is reasonable to expect that an overhead crossing at Duncan Canal could potentially reduce the cost of the Center -South route by approximately $1 million.Other considerations with regard to an overhead crossing include: o Air traffic and safety concerns o Bird strike concerns o General aesthetics Fiber Optic Communication Cable It is expected that a 24 strand fiber optic communication cable will be included in the KPI design.Initially,the fiber optic system will be used for control of the KPI system.For the overhead portions of the line,the fiber strands will be bundled within an aerial cable.For the submarine crossings,the fiber-strands will be an integral part of the bundled cable design.The terminations of the fiber optic cable will need to be connected to local communication systems at a later date.The termination and interconnection facilities have not been included in the preliminary design included in this study. The engineering consideration for the transmission design of the overhead fiber optic cable was divided into three principal categories,system planning,electrical design of system components, and the mechanical design of the line.For the purposes of the KPI preliminary design,ALCOA "ADSS”24 strand aerial cable has been selected.A 24 strand fiber cable is more than sufficient to meet the communication needs of control and data collection of the system operation.In addition extra fiber would be available for commercial and system voice communication.There is a very slight difference between 12 and 24 strand fiber.We recommend at the time of construction the volume of traffic and system needs be re-evaluated.The transmission structures are sized to support the 24 strand ADSS. Space has been allocated in the preliminary design of the KPI structures to install fiber optic ADSS cable.Sag and tension is to be obtained from cable manufactures in the form of computer hardware and software programs.The cable manufacturers will usually prepare such data and provide consultation concerning the design data parameters for the project.It is our recommendation that the fiber optic cable installation meet Heavy Loading and Grade B construction. ADSS cables tend to vibrate more than other cables of comparable size,due to their lighter weight.Also the "soft”nature of their jackets and internal construction requires special consideration.A special damper,called the Dielectric Damper,has been developed specifically for application on ADSS cables which should be considered for installation on this project. Kake -Petersburg Intertie Study Update 2-19 Draft Report Transmission Line Route Alternatives and Technical Characteristics Power Flow Analysis As part of the KPI Study,a power flow analysis was conducted to evaluate several factors with regard to the operation of the KPI.The power flow analysis developed computer models of the interconnected electric systems to identify the desired system configuration,recommended system enhancements,and identify special provisions that might be needed for reliable and economic system operation.A system modeling database was obtained that includes available generation resources,existing transmission facilities,and each proposed alternative transmission route's electrical characteristics.In addition to the loads on the system,the modeling included potential generation at Takatz Lake and Thomas Bay.Qualitative consideration was also given to the possibility of interconnecting this line further north in Southeast Alaska. An important element of the power flow analysis was the determination of the recommended KPI voltage and the recommended conductor size.The analysis also defined the substation improvements needed in Kake and the switchyard facility that will be needed at the interconnection of the KPI with the existing TWP transmission line near Petersburg. The following planning criteria were used in the analysis: e Under normal system conditions,voltages at load serving facilities should range from a maximum of 105 percent of nominal system voltage to a minimum of 95 percent. e Maximum voltages for the KPI transmission buses should not exceed 110 percent of nominal system voltage during energizing procedures when no load is being served. e Minimum voltages may sag to as little as 85 percent of nominal as long as there is no danger of voltage collapse for the non-load serving intertie transmission buses under heavy system load conditions. e Facility loading should not exceed 100 percent of normal system seasonal ratings as specified by the manufacturers of the submarine cables,or for overhead transmission system,as determined based on standard conductor loadability. After reviewing the existing and forecast loads,generation possibilities and associated expected costs it is recommended the line be built for 69-kV.If the Takatz Lake project or other generation is installed that exceeds 10 MW of power deliveries over the KPI,a higher voltage should be considered.Designing and building the line for higher voltage provides for substantially increased flexibility for future system needs at a marginal price premium. Detailed Route Evaluation The routes being evaluated for the KPI follow USFS roads to the extent feasible.These roads will facilitate construction and maintenance of the line by providing ground access to the area. In remote regions,construction crews and materials are usually transported by helicopter which contributes to higher overall construction costs.An alternate approach for constructing the KPI in areas where roads do not presently exist is to construct an access road along the transmission line.This is the approach considered for the Northern route if the DOTPF does not construct a road in advance of the transmission line construction.It is also the approach taken for the Center -South route. Kake -Petersburg Intertie Study Update 2-20 Draft Report Transmission Line Route Alternatives and Technical Characteristics As previously indicated,a number of previous studies have been conducted to evaluate potential route alternatives for the KPI.The 2005 and 2003 studies relied extensively upon the results of previous studies,incorporating newer information and updating previous cost estimates primarily using various cost escalation factors.The 1996 Feasibility Study was intended to define the design and routing criteria,estimate costs,provide a brief environmental review and assess the economic and financial feasibility of an intertie between Petersburg and Kake.It was based ona 3-phase AC overhead system with submarine crossings of major water bodies.The 1996 Feasibility Study included a review and summary of the earlier reports and included consideration of the Kake Coastal Management Program,Public Hearing Draft dated April 1984. The 1996 Feasibility Study did not include any field work or visits to the project area and relied solely on work from previous studies tempered with consultation and input from local utility,and various state,federal and local governmental agency personnel.Earlier reports which includedsitereviewswerethe1984Ebasco”and 1987 Intertie Study reports.The 1984 Ebasco study included fairly extensive field work and analysis of construction conditions for a Petersburg to Kake Intertie and included a number of drawings highlighting features along suggested routes. The 1984 Ebasco report provides a reasonable description of the terrain and soils along the preferred Southern route. Changes have occurred since the 1984 Ebasco report relative to the number of logging roads and the amount of logging and clearing that would be required along the route.The 1984 Ebasco report suggested a floating camp in the Duncan Canal area with material hauling using helicopters in the roadless section of the route,a distance at the time of approximately 20.5 miles.The roadless section of the route identified in the 1984 Ebasco report,which is essentially the same as the current Center -South Route,has now been reduced to approximately 13 miles. The 1987 Intertie Study report included bathymetric surveys of the proposed submarine cable crossings and included a compilation of public and agency comments received at the time of the 1987 Intertie Study. All of the earlier studies concluded that the southern (now the Center South)route was preferred,absent detailed environmental analysis.The 1996 Feasibility Study,which considered two routes along the currently defined routes of the Northern Route and the Center-South Route, concluded:"...the southern route is preferred based on public comment,agency comment, previous study findings,and engineering and environmental judgment.”All of the earlier reports emphasized the need to conduct environmental studies prior to selection of a specific route. °Tyee-Kake Intertie Project,Detailed Feasibility Analysis,Volumes I and II,prepared for the Alaska Power Authority by Ebasco,Inc.,1984. Kake -Petersburg Intertie Study Update 2-21 Draft Report Transmission Line Route Alternatives and Technical Characteristics KPI Alternative Route Descriptions As indicated previously in this report,two primary routes are included in this study's effort.This is down from the ten route alternatives when the 2005 study started its effort.The two remaining routes are: 1.Northern Route (within the DOTPF road corridor) 2.Center -South Route A map showing these route alternatives is provided as Figure 2-1.Reference to this map and the Node points (e.g.T,T1,S3,K)shown on it should be made to better understand the route descriptions which follow. Northern Route The Northern Route is about 56.6 miles long (assuming that the line terminates about 5 miles outside of Kake)and generally traverses the north side of Kupreanof Island along the proposed route of the Kake -Petersburg road as proposed in the Southeast Alaska Transportation Plan. The Northern Route originates at the Petersburg substation where the TWP transmission line terminates.A 3.5 mile long overhead section of line would exit the substation and follow an existing gravel road generally in an east northeast direction to Frederick Sound.This line would be located behind Petersburg and somewhat near the airport.At Node S1 on Frederick Sound,a submarine cable termination facility would connect the overhead line to a 3.1 mile long submarine cable to be located northeast of the entrance to Wrangell Narrows. Between Nodes S1 and S2 the submarine cable would be placed in a trench to a water ;depth of approximately 100 feet.At the shore ends the cable would be placed in split pipe or conduit for protection.The cable for this crossing would generally be placed in(somewhat deeper water to avoid anchor areas, fishing grounds and the dredging channel. The Wrangell Narrows entrance is a very busy channel and it will be important to place the submarine cable in deeper water to avoid much of the marine traffic and activity.The submarine cable is proposed to come ashore at Node S2 on Kupreanof Island,at a point near Prolewy Point,but potentially north of Five Mile Creek. From Node S82,the route follows north along the Frederick Sound shoreline on the east side of Kupreanof Island and then cuts west to Photo 1 Typical submarine cable termination facility.Node S3 located near the south end of Portage Kake -Petersburg Intertie Study Update 2-22 Draft Report Transmission Line Route Alternatives and Technical Characteristics Bay.About half of the total 24.2 mile length of this segment is in an area where there is no logging road.It is assumed,however,that DOTPF would construct a pioneer road in this area prior to the start of the transmission line.Along Frederick Sound the route is situated on a fairly steep slope in a heavily forested area with numerous small streams and wash areas coming down off the hillside. Maintaining the transmission line and future DOTPF road within a limited width ROW will be a challenge.It is anticipated that sections of this segment will require a wider width ROW than the 300 foot width discussed.However,as described above it is believed the overall ROW width can average 300 feet. Between Nodes S3 and S4,approximately 3.4 miles of the total segment length of 8.2 miles will be along existing USFS roads.It is assumed that the DOTPF will build a pioneer road prior to the start of transmission line construction along the remaining 5.7 miles of the route where currently there is no road.This is largely a muskeg area and during the field reconnaissance in 2005 the depth of the muskeg was measured at between four and six feet at a point approximately three miles east of Node S4. Between Nodes S4 and S5,the entire segment length of 12.2 miles will be alongside existing USFS roads.Clearing requirements along this segment will be limited to only 2.0 miles through forested areas.Access to this segment of the route will be good from Kake. The 10.4 miles long segment between Nodes S5 and K (Node K is the termination of the route at the substation near Kake)will be entirely along existing USFS roads. Some clearing will be needed along 7.2 miles of the segment length although much of this area has been previously logged and only scrub trees exist.Several locations would be suitable to place a new substation near Kake although enough level ground is not readily available at the site of the existing power plant.It is potentially expected that the substation could be built about five miles outside of Kake and that lower voltage lines would then be used to deliver power from the substation to the community.This concept would lower the cost of the KPI by eliminating five miles of higher voltage transmission lines.The substation could alternatively,be located just north and west of the airport runway.Access to IPEC's distribution circuits would be relatively straightforward from this location. Photo 2 Typical logging road and terrain on Kupreanof Island. Kake -Petersburg Intertie Study Update 2-23 Draft Report Transmission Line Route Alternatives and Technical Characteristics Center -South Route The Center-South Route is 46.8 miles long and will require two marine crossings:a 0.6 mile long crossing of Wrangell Narrows and a 1.2 mile long crossing of Duncan Canal.The proposed route of the Center-South Route begins at a tap of the 69-kV TWP transmission system at a point approximately eight miles south of Petersburg.The route crosses Wrangell Narrows, traverses west,crosses Duncan Canal and then proceeds west and north to Kake. Pay iraAaefeetaSafcaneery The route starts at Node T, which is located about Photo 3 Looking west across Wrangell narrows towards the log transfer facility. 4,800 feet from the water atthispoint.An overhead line will be constructed from Node T that crosses the highway and then parallels the highway to a point near the former Alaska Experimental Fur Farm.The line would then proceed west from the highway to a point near the water where the overhead line would connect to the submarine cable that crosses Wrangell Narrows.A relatively narrow,60 foot right-of-way could work in this area although a 100 foot right-of-way would be desired.Land ownership at this location is either State of Alaska or USFS. At this point,Node T1,a submarine cable termination structure would be constructed where the bundled,3-phase submarine cable and fiber optic cable is connected to the overhead line.The submarine cable will leave the structure through an 8 inch diameter schedule 80 PVC duct that will be placed in a trench that reaches the mean low water (MLW)line.From there,the cable would be placedin a split duct casing and buriedin a trench to a point where the water depthisabout100feet.'°The location of the cable across Wrangell Narrowsis out of the commercialshellfishingareaandtheareanormallydredged.A warning sign onshore on both ends of the cable will alert marine traffic to a buried power cable.Wrangell Narrows is a very active marine environment where pleasure and commercial vessels travel year around.It is also a fly path for both commercial and pleasure aircraft. Due to the high level of marine traffic in Wrangell Narrows and the relatively shallow crossing depth,it may be preferable to bury the submarine cable along its entire length.This would greatly reduce the potential damage to the cable from ship anchors and other hazards. Kake -Petersburg Intertie Study Update 2-24 Draft Report Transmission Line Route Alternatives and Technical Characteristics The submarine cable will exit the west side of Wrangell Narrows in a similar fashion and connect to an overhead lineiSteeaey- ©:4 at Node T2.This will be at a wee TE me eer teed point near the existing Tonka'wor ce peter aero a5 a ag log handling facility.AecgWED,oo 3 jet p +51 submarine cable terminationpietediechatssstate:structure,comprised ofKayee,eae fk lightning arresters and a steel- pole riser for the overhead-to- underground transition,will be constructed near the shoreline i aly Oe sa_tans vfesota:*5 Lu ;but sufficiently inland to limitPhoto4LookingnorthupDuncanCanaltowardtheWildernessArea. Existing logging road is in the foreground.Location of Node T10 is in its visibility from the water andcenterofpicture.to stay above the tidal zone. Between Nodes T2 and T3,a distance of about 1.5 miles,the line will be located just off the existing logging roads in a heavily forested area.Right-of-way clearing will be needed in this area.Between Nodes T3 and T4, approximately 6.2 miles of the route is in a forested area requiring right-of-way clearing and 1.8 miles is in a muskeg area needing only minimal brush clearing. Between Nodes T4 and T6,a 1.2 mile long segment is in a roadless area.An access road would be built in this area adjacent to the line where half the length is in forested terrain and half is in muskeg.A submarine cable termination yard will be constructed at Node T6 where the 1.2 mile long submarine cable across Duncan Canal will connect to the overhead line.It is proposed that the bundled,3-phase submarine cable have a similar approach to the water as was described previously for the , Wrangell Narrows crossing.From field reconnaissance,the proposed location of the submarine cable across Duncan Canal appears very good although tidal currents and fishing vessel traffic may potentially be an issue that might require trenching of the cable along the entire crossing. The submarine cable would be connected to the Photo 5 Probing the depth of muskeg between Nodes T7 and T8. overhead line at Node T7 7,eiaeesSale4tneKake -Petersburg Intertie Study Update 2-25 Draft Report Transmission Line Route Alternatives and Technical Characteristics at a similar cable termination facility as placed at Node T6. The segment of the line route between Nodes T7 and T8 is 10.3 miles long,entirely in an area where there is no existing logging road.About 6.7 miles of the line is in an area of muskeg requiring very little clearing.An access road is proposed to be built adjacent to the line along the entire length of this segment.During the 2005 field reconnaissance the muskeg depth was measured and found to be approximately six feet deep.Although an attempt has been made to try and locate the line in higher ground in this area,it will still be a relatively difficult area to build the access road due to the extensive muskeg. Between Nodes T8 and T11,the route follows the existing logging road for 3.4 miles and will be placed in a generally forested area without a road for 1.3 miles.The access from Kake will be good along this section of the route making road construction relatively straightforward.The route segment between Nodes T11 and S5 is 13.0 miles long and is adjacent to an existing logging road along the entire length.This segment is in a well logged over area and will require only minimal clearing of brush and small trees.Access from Kake is very good along this section of the route. Kake -Petersburg Intertie Study Update 2-26 Draft Report Section 3 Permitting Requirements and Environmental Process Overview Introduction A comprehensive feasibility study of the Kake -Petersburg Intertie (KPI)transmission line was completed by D.Hittle &Associates in July 2005 which summarized the work conducted from the early 1980s to 2005.Ten route options were initially considered which were later reduced to four primary options.Of the four route alternatives considered within the 2005 feasibility study,two were carried forward for detailed environmental and permitting review and analysis:1)the Center-South Route (which was the Southeast Conference Steering Committee's preferred route alternative),and 2)the Northern Route, (which follows the alignment of a road proposed for construction by the Alaska Department of Transportation and Public Facilities (DOTPF)(Figure 2-1).The Steering Committee is now considering permitting the Northern Route in conjunction with the development of the road proposed by DOTPF. The 2005 study included an assessment of the permitting and regulatory process needed to carry the KPI to completion.The primary emphasis of this section of the report is to review the permitting and environmental process to determine what permitting activities would be expected for the KPI transmission line.This review and determination includes: e review of the overall strategy of the permitting and regulatory process of this project through completion of the selected route, e determine whether substantial changes have been made since 2005 in regards to permits or environmental concerns,and e determine if there are any substantive differences between the two main route alternatives in regards to permitting and potential environmental concerns. Also discussed are considerations that may arise as a result of building the transmission line on the Northern Route in conjunction with the development of a permanent road proposed by the Alaska DOTPF. Permitting Changes to the Permit Requirements and Regulations Since 2005 Few changes have been made to the permitting requirements since the comprehensive feasibility study was conducted in 2005.The permits discussed within the 2005 feasibility study are still valid for the KPI;however,some additional permits and plans have been included which will be required regardless of the selected route.Some changes to the cost of permitting and regulations have occurred.An updated cost estimate is presented in Section 4 -Cost Estimates. Kake -Petersburg Intertie Study Update 3-1 Draft Report Permitting Requirements and Environmental Process Overview Land Use Designations (LUDs)within the Tongass National Forest have changed since 2005 due to the new Land and Resource Management Plan adopted by the USFS on January 2008 (USFS 2008).The majority of the KPI would pass through lands designated as Timber Production and Modified Landscape.Additional LUDs to be crossed include Old-Growth Habitat,Scenic Viewshed,and Semi-Remote Recreation.The LUDs crossed by each of the two route alternatives are listed in Table 3-1 and are shown in Figure 3-1. The USFS has identified a Transportation and Utility System (TUS)LUD on Kupreanof Island.This LUD is overlaid on top of preexisting LUDs.During the period prior to construction,the management prescriptions of the initial underlying LUD would remain applicable.However,upon initiation of project construction and operation,the management prescription of the TUS LUD would apply.This means that the TUS LUD represents a "window”through the underlying LUD in which road and/or utilities can be built,regardless of whether the prescription of the underlying LUDs do not permit transportation or utility projects (USFS 2008).The Northern Route and the Center -South Route generally follow the TUS LUD (Figure 3-1).Therefore,initial review of the project would need to consider each alternative's conformance to the underlying LUD prescriptions,but if either the Northern or Center South Routes are chosen for construction,then the prescriptions of the TUS LUD would apply upon construction of the KPI. Much of Kupreanof Island and the southern portion of Mitkof Island include inventoried roadless areas (Figure 3-2).The Northern Route crosses three inventoried roadless areas: North Kupreanof (211),a small portion of Missionary (212),and along the western edge of Five Mile (213).The Center-South route crosses the South Kupreanof (214)roadless area west of Duncan Canal.All of these inventoried roadless areas offer relatively unmodified habitat important to fish and wildlife resources,are important to local subsistence,and provide recreational opportunities. As stated above,the Northern Route and the Center-South Route fall within a TUS LUD which would allow for the construction of the KPI through these roadless areas.However, the impact that the KPI would have on these roadless areas would still need to be assessed because the prescriptions of the TUS LUD would remain secondary until project construction has been initiated. Kake-Petersburg Intertie Study Update 3-2 Draft Report Permitting Requirements and Environmental Process Overview Table 3-1 Tongass National Forest and Other Land Use Designations Crossed by the Kake -Petersburg Intertie LUD |Description Crossed by Route Alternative Tongass Land Use Designations Northern Route Center-South Route i |i ile allowing forModifiedLandscapeProvidefornaturalappearinglandscapeswhileallowing x xtimberharvest. .Maintain old-growth forests in a natural or near naturalOld-Growth Habitat condition for wildlife and fish habitat.x x To provide for and/or facilitate the development of existing .a:and future major public Transportation and Utility Systems,Transportation and Utility System including those identified by the State of Alaska and the x x Alaska Energy Authority. Manage the area for industrial wood production.Promote Timber Production conditions favorable for the timber resource and for x x maximum long-term timber production. Maintain scenic quality in areas viewed from popular land and Scenic Viewshed marine travel routes and recreation areas,while permitting x x timber harvest. Provide for recreation and tourism in natural-appearing Semi-Remote Recreation settings where opportunities for solitude and self-reliance are x x moderate to high. .Preserve essentially unmodified areas to provideWildernesswee.er .opportunities for solitude and primitive recreation. DNR Land Use Designations .Area managed to preserve its viewshed and habitat values toUnitP-02 ...Xwaterfowl,marine mammals,and fish species. State Lands State of Alaska Lands owned by the State of Alaska |xX 4 Private Lands of Local Jurisdictions Kake Within the jurisdiction of Kake xX xX Petersburg Within the jurisdiction of Petersburg x xX Tribal Lands Alaska Native Tribes and Corporations (Organized Village of Kake and Petersburg Indian Association)|X X Kake-Petersburg Intertie Study Update 3-3 Draft Report Permitting Requirements and Environmental Process Overview Environmental and Permitting Issues Common to all Alternatives The analysis of permits and regulation requirements discussed in the 2005 comprehensive feasibility study remain valid for the KPI because few changes have been made to the process since 2005.Permits and regulations which would be applicable to the KPI are described below.Additional permits and plans which will likely be required are listed in Table 3-2. Each alternative considered for the KPI would require a submarine cable crossing of the Wrangell Narrows.The Northern Route would cross the Wrangell Narrows at its mouth,while the Center -South route would cross near the old experimental fur farm south of Petersburg. Because of the potential disturbances in this major shipping channel,these submarine crossings would require coordination with the Alaska Marine Highways,cruise ship companies,freight haulers,and other entities.In addition,a Section 10 and Section 404 permit would be required from the U.S.Army Corp of Engineers (USACE),due to Project-related work within navigable waters and wetlands.Also,the National Oceanic and Atmospheric Administration (NOAA)would need to be notified of the position of the underwater cables. Each of the alternatives would cross anadromous and resident fish-bearing streams (see Figure 3-3).Although transmission line structures would be designed and positioned in order to avoid stream impacts,the access roads would cross a number of streams.These crossings would be required to follow standard road building Best Management Practices (BMPs)and be engineered in such a way as to reduce potential impacts to aquatic resources.Any activity which crosses a waterbody designated as important for the spawning,rearing,or migration of anadromous fish would require a Fish Habitat (Title 16)Permit from the Alaska Department of Fish and Game (ADF&G)as well as a permit from the Department of Natural Resources (DNR)under the Fishway Act and Anadromous Fish Act.If dredging is required within a waterbody designated as important for the spawning,rearing,or migration of anadromous fish in order to bury the underwater cables,then a Recreational Suction Dredge Permit from the ADF&G would be required. The Tongass Forest-wide Standards and Guidelines provide protection to various species and their habitat.For example,specific guidelines apply to the protection of bald eagles.The Bald Eagle Protection Act provides for special management for the bald eagle.Management of bald eagle habitat is in accordance with the Interagency Agreement established with the U.S.Fish &Wildlife Service (USFWS)to maintain habitat to support the long-term nesting, perching,and winter roosting habitat capability for bald eagles.The USFS coordinates with USFWS for bald eagle habitat management.These standards and guidelines are provided in the Tongass Land Management Plan (TLMP).Threatened and Endangered,Forest Service sensitive listed,and species of concern include wolves,Sitka black-tailed deer,moose,black bears,river otters,American marten,red squirrel,fishers,wolverine,northern flying squirrel, Kake-Petersburg Intertie Study Update 3-4 Draft Report Permitting Requirements and Environmental Process Overview northern goshawks,spruce grouse and ptarmigan,numerous species of ducks and geese, trumpeter swans,marbled murrelets,and great blue herons,all of which are known to be present on both Kupreanof and Mitkof islands. Kake-Petersburg Intertie Study Update 3-5 Draft Report Permitting Requirements and Environmental Process Overview Table 3-2 Summary of Agency Requirements and Associated Costs Agency/Requirement |Description il Associated Cost Items Federal Agencies U.S.Army Corp of Engineers:Section 10 Permit Section 404 Permit Other Authority to regulate work in waters of the U.S. Permit and condition work in navigable waters. Permit and condition work in wetlands.Notify NOAA and National Ocean Service (NOS)of underwater cables. Permitting costs only,no NEPA process required. Costs will be associated with meetings with USACE staff,preparation and finalization of permit drawings, and mitigation measures required by NMFS and/or USFWS.Consider having ACOE as a cooperating agency due to the level of wetland dredging and filling needed for all routes. U.S.Forest Service Lead NEPA Agency Special Use Authorization or other. U.S.Forest Service Timber Settlement Agreement Permission to work in the Tongass National Forest and responsible for compliance with the National Environmental Policy Act (NEPA).Through the NEPA process,USFS will evaluate purpose and need of project,evaluate potential impacts,select the alternative,and condition the project. The USFS will use compliance with the Tongass National Forest Land &Resource Management Plan Forest Plan (2008)to base their determination of impacts of a 5-year permit to construct.Bonding required.Long-term lease (50+years).Purchase of timber that would be cut and removed (if required) by project (e.g.,right-of-way [ROW]clearing,danger trees). The major costs would be preparation of needed NEPA documents and funding for USFS administration of those processes.The proponent would typically hire a consultant to conduct the appropriate NEPA process.A land use fee in the $20-$30/acre/year range is likely,and a yearly plan is typically required. Once the final route is selected,the amount of timber to be removed will be appraised prior to harvest. Bonding amount equivalent to cost to restore forest. Five percent of fair market value.USFS would appraise land value.USFS or third party would appraise and harvest. U.S.Fish and Wildlife Service Authority to uphold Endangered Species Act;requires Biological Assessment (BA). ABA would need to be completed in conjunction with the NEPA analysis.No major issues identified at this time that could not be mitigated with timing and BMPs (e.g.,submarine crossings,stream crossings). Costs included in overall NEPA cost estimates. NOAA/National Marine Fisheries Service Authority to uphold Endangered Species Act and Magnuson-Stevens Act;listed salmon and EFH will be covered in BA. An Essential Fish Habitat Analysis would be required. If the potential for impact was found,mitigation measures including redesign and/or monitoring would be required and conditions incorporated into the appropriate permit. U.S.Environmental Protection Agency Clean Water Act-Storm Water Quality Construction Storm Water Pollution Prevention Plan. Kake-Petersburg Intertie Study Update 3-6 Draft Report Permitting Requirements and Environmental Process Overview Agency/Requirement Description Associated Cost Items U.S.Coast Guard Update Navigation Charts.The underwater cable locations would be provided to the USCG for incorporation into navigational charts. No additional costs.Transmittals of as-built drawings to the USCG are required at completion... State of Alaska Agencies Department of Natural Resources-Office of Project Management and Permitting Coastal Zone Management Plan consistency.Costs associated with permit application,pre- submittal meeting,and potential subsequent conditions and mitigation. Department of Natural Resources-Division of Lands Land Use Permit for Early Entry for Public Easement. Easements across state lands including shorelines and subtidal areas.Early entry permit (valid for 1 year prior to construction)ROW Permit;Tidelands Permit. Costs:$100 filing fee for each easement plus annual ROW lease based on location.Requires a $10,000 performance bond and a yearly operational plan for each area of state lands.Transmittal of as-built survey,once completed,will need to be forwarded to ADNR. Department of Natural Resources-Office of Habitat Management and Permitting Title 41 Fishway Act and Anadromous Fish Act.There are multiple anadromous fish streams crossed by all routes under consideration.While the KPI is proposed as an above-ground system,the construction of the associated maintenance roads in current roadless areas may require permits to work in anadromous fish streams.Use of existing roads will lessen the number of permits.Also,upgrading culverts and road crossings across fish streams may be offered as mitigation potential impacts.This would be determined during route selection,design,the NEPA process,and permitting. Department of Fish and Game Department of Fish and Game Title 16 Refuges and Critical Species Habitat Permits. Recreational Suction Dredge Permit. Special area permit is needed to work within State of Alaska Refuges,Critical Habitat Areas,and Sanctuaries.The project area is not currently within any of these areas;however,meeting costs should be included to address potential impacts to important waterfowl areas. Required to permit for dredging activities within waterbodies designated as important for the spawning,rearing,or migration of anadromous fish. There is no fee for this permit. Department of Transportation &Public Facilities Utility Permit application for lines within a DOT ROW.$400 per permit plus $0.25/lineal foot to a maximum of $2,500. Kake-Petersburg Intertie Study Update 3-7 Draft Report Permitting Requirements and Environmental Process Overview Agency/Requirement Description Associated Cost Items State Historic Preservation Officer Section 106 of the National Historic Preservation Act.Costs of an analysis of the presence or potential presence of cultural or historic sites including a records search and field investigation.Generally covered under NEPA using Section 106 guidelines. Oversight during construction may be required if high potential is found. Department of Environmental Conservation Temporary Water Use Authorization Permits (TWUP); Clean Water Act;Clean Air Act. Short term variance from Water Quality Standards for runoff and/or work in waters of the state.General permit for remote worker camps,if used,where water will be needed from streams for drinking or during construction.Review of potential for hazardous waste sites along routes.Determination of compliance with National Ambient Air Quality Standards (NAAQS)for particulate generation and emissions from construction equipment and vehicles. Approval of the specific plans developed under Federal Storm Water General Permit. Local Governments Petersburg Planning and zoning Review-primarily done under None coastal zone management program. Kake Planning and zoning Review-primarily done under None coastal zone management program. Kupreanof If alignments are within the Kupreanof city limits,None there would be a planning and zoning review. Government to Government Relations Organized Village of Kake Consult on issues that could affect the tribe including their traditional way of life,properties with traditional religious and cultural significance (per Section 106 of the National Historic Preservation Act),and subsistence. The tribe may request funds to cover their costs to analyze the presence or potential presence of cultural or historic sites.This may be in addition to an independent analysis for the SHPO. Petersburg Indian Association Consult on issues that could affect the tribe including their traditional way of life,properties with traditional religious and cultural significance (per Section 106 of the Natl.Historic Preservation Act), and subsistence. The tribe may request funds to cover their costs to analyze the presence or potential presence of cultural or historic sites.This may be in addition to an independent analysis for the SHPO. Kake-Petersburg Intertie Study Update 3-8 Draft Report Permitting Requirements and Environmental Process Overview Agency/Requirement |Description |Associated Cost Items Other Plans/Permits Required Plans support requirements under the various |Most of these would be the responsibility of the Costs would be the responsibility of Contractor and permits prior to construction Contractor and include solid waste disposal permits,|completed prior to construction. fuel containment,fire plan,spill prevention control and countermeasures plan,facility response plan. Kake-Petersburg Intertie Study Update 3-9 Draft Report Permitting Requirements and Environmental Issues Overview Typically,Right-of-Way (ROW)and Conditional Use Permits need to be filed with any federal or state agencies whose lands are crossed by projects of this nature.However,the road along the Northern Route would not require these special use permits as long as the route remains within -the general corridor agreed upon within the Memorandum of Understanding between the Forest Service,DNR,and DOTPF (Forest Service Agreement No.O6MU-ITIOOIOO-151;State of Alaska Agreement No.ADL 107516).The transmission line would likely enter into a similar Memorandum of Understanding with the USFS and DNR,which would act as a ROW or Conditional Use Permit.If this is not the case,then a ROW Special Use Permit would be issued by the Forest Service. Planning and zoning reviews by local governments would be conducted,which could result in the need for some developmental permits required by Kake,Petersburg,or Kupreanof authorities.Additional requirements would include a review and analysis of the presence or potential presence of cultural sites under Section 106 of the National Historic Preservation Act. A timber settlement agreement with the USFS for sale of harvested timber would also be required. Since a portion of the KPI,regardless of the alternative considered,would pass through federal lands under the jurisdiction of the USFS (Tongass National Forest),the KPI would need to undergo the NEPA process,regardless of the route chosen.Even with the inclusion of an identified Transmission Utility System designation,it is unlikely that the KPI could proceed by conducting an Environmental Assessment because each of the alternatives has the potential to cause significant adverse impacts to various resources. It is assumed that additional analysis would be required for the construction of the proposed permanent road under the Northern Route which would include crossing scenic viewshed adjacent to Fredrick Sound as well as inventoried roadless areas.Therefore,it is recommended that an Environmental Impact Statement (EIS)be prepared for the KPI.The steps necessary to meet NEPA procedural requirements are presented in Table 3-3 as a series of tasks.It is estimated that the EIS process could be completed within 18 to 20 months and would require some field work for specific resources.Estimated costs for conducting an EIS are presented in Table 3-4. In conjunction with the NEPA process,the USFWS and the National Marine Fisheries Service would require the completion of a Biological Assessment (BA)to address species listed under the Endangered Species Act.In addition,USFS sensitive listed species are those wildlife,fish, and plant species identified by a Regional Forester for which population viability is a concern as evidenced by a significant current or predicted downward trend in population numbers,density, or habitat capability that would reduce a species'existing distribution (FSM 2670.5).As part of the NEPA process,USFS activities will be reviewed (i.e.,Biological Evaluation [BE])to determine the potential effect on sensitive species and determine how impacts to these species will be minimized or avoided (FSM 2670.32).The BA and BE are often combined into one document. Kake -Petersburg Intertie Study Update 3-10 Draft Report Permitting Requirements and Environmental Issues Overview Table 3-3 Example of an EIS Schedule for the KPI Transmission Line Project Task Task Name Week 1 Prework Meeting/Field Orientation Detailed Review of Existing Data 1 Prework Meeting/Field Orientation 3 GIS Data Received from Forest Service,ADNR,ADFG 4 Meeting with various agencies as appropriate 5 2 Public Scoping Prepare Scoping Notice/Notice of Intent 6 Forest Service Approval 10 Mail Scoping Document and Publish Notices 11 Public Scoping Period 13 Public Meetings (assume Petersburg,Kake,Juneau)14 Prepare Scoping Report 17 3 Field Work and Special Studies Field Preparation/Logistics 20 Fish/Watershed/Stream Characterization 22 Geology/Soils 22 Heritage Resource and Sacred Sites Inventory 22 Scenery/Visuals 22 Sensitive Plant Field Surveys 22 Subsistence 22 Transportation and Utilities 22 Wetlands Inventory Surveys 22 Wildlife/Habitat Field Surveys 22 Complete Final Field Reports 27 4 EIS Chapters 1 and 2 Prepare Chapters 1 and 2 23 Review Due (Forest Service and cooperating agencies)26 5 Preliminary Draft EIS Prepare Affected Environment Sections 23 Prepare Environmental Consequences Sections 28 Submit PDEIS 32 Review of PDEIS Due (Forest Service and cooperating agencies}34 6 Draft EIS Revise PDEIS (Incorporate agency comments)48 Review of DEIS Due (Forest Service and cooperating agencies)53 Respond to Forest Service and cooperating agencies Comments SS Assemble Camera-Ready DEIS 57 7 Biological Assessment/Evaluation 48 8 Response to Public Comments Public Comment Period 61 Public Meetings (Kake,Petersburg)65 Draft Responses to Public Comment 69 Review of Responses Due (Forest Service and cooperating agencies)72 Final Response to Comments 74 9 Preliminary Final EIS Revise DEIS 76 Review of PFEIS Due (Forest Service and cooperating agencies)81 10 Final EIS Kake -Petersburg Intertie Study Update 3-11 Draft Report Permitting Requirements and Environmental Issues Overview Revise PFEIS 83 Review of FEIS Due (Forest Service and cooperating agencies)86 Assemble Camera-Ready FEIS 88 11 Administrative (Project)Record Preparation and issuance of Record of Decision 90 Environmental and Permitting Issues Unique to Each Alternative Table 3-4 lists the estimated impacts to select environmental resources related to each of the route alternatives,while Figures 3-3 and 3-4 displays this information graphically.During the NEPA process,the route alternatives would be modified in order to reduce environmental impacts to the greatest extent practical;therefore,these numbers are only displayed for general comparative purposes and do not represent a final impact analysis. Table 3-4 Estimated Acres of Disturbance to Vegetation Types and Number of Fish Bearing Streams Crossed by Route Category Resource Route Alternative Northern Center-South Productive Forest Land Productive Old Growth 344 380 (acres)Young Growth 250 431 Unproductive Forest Land Forested Muskeg 304 142 (acres)Other Unproductive Forests 350 128 Non-Forest (acres)Non-Forest 147 119 Total Impact to Vegetation 1,395 1,239 Number of Fish Bearing Class |Anadromous 32 35 Stream Crossings*Class Il Resident 22 13 Total Fish Bearing Stream Crossings 54 48 *Based on TNF stream layer which likely overestimates the number of fish bearing streams;would need to be compared to ADF&G anadromous stream catalog and field verification. Note:Estimates were based on an assumption that the cleared ROW would be 200 feet wide;however,the ROW would likely be greater or less than 200 feet in some areas depending on topography and vegetation cover. Northern Route Permitting the Proposed Road and Transmission Line Intertie Jointly The Northern Route would,for the most part,follow the alignment of a road proposed for construction by the Alaska DOTPF.The Steering Committee is considering assessing the road and transmission line under one NEPA analysis.Typically,multiple actions assessed under one NEPA analysis are connected actions.Under section 1508.25[a][1]of NEPA,actions are considered connected if they 1)automatically trigger other actions that may require the preparation of an EIS,2)cannot or will not proceed unless other actions are taken either before Kake -Petersburg Intertie Study Update 3-12 Draft Report R:\projects_2009\Kake-Petersburg_intertielmaps\LUDs.mxd27January2010choo _S"se Ot on wk Mite 0 125 25 5 Miles c==--=Northern Alternative case Center South Alternative Cc}Wildemess and Wilderness National Monument;WW 7._aa Non-Wilderness National Monument Semi-Remote Recreation t 3 Remote Recreation -000%Existing Power Transmission Corridor |on |LUD Il i."7 Municipal Watershed ooo Potential Power Transmission Corridor Old Growth Habitat |ane |Special Interest Area KAKE TO PETERSBURG TRANSMISSION INTERTIE Scenic Viewshed [=]Modified Landscape CI Timber Production Non-Federal Land EJ wil,scenic or Recreational River|me |Research Natural Area Land Use Designations Figure 3-1 (LUD) Te TETRA TECH EC.INC H -mxd27January2010RAprojects_2009\Kake-P:Cam Northern Alternative Camm Center South Alternative CJ Inventoried Roadless Area KAKE TO PETERSBURG TRANSMISSION INTERTIE Figure 3-2 w rE inventoried Roadless Areas si 0 1.25 25 5 Tt TETRA TECH &C.INC Miles z x ra ©.-srSs S ih."Y An,st hall i % Cum Northern Alternative \ Anadromous Stream Resident Stream R:\projects_2009\Kake-Petersburg_intertie\maps\streams.mxd6February2009Gm Center South Alternative Figure 3-3"D:Anadromous &Resident Streamsa 0 125 25 Tt TETRA TECH EC,INC Miles x.|r _ PiethoneAoraK,|mS-8"yAo] "QaoeaeyoFAEemosaea<Bamme Northern Alternative R:\pmjects_2009\Kake-Petersburg_intedie\maps\veg.mxd6February2009[7 Medium and Low Volume Productive Old Growth (SDSH,S4N,SD4H)7 7” "MEE Center South Altemative |ome |High Volume Productive Old Growth (SD5N,SD5S) Bead High Volume Productive Old Growth (SD67) EE Natural Young Growth (S1,$2,$3) |Young Growth from Past Harvest (HS1,HS2,HS3) KAKE TO PETERSBURG TRANSMISSION INTERTIE N Ss 0 125 25 Miles Se Figure 3-4 Vegetation Types Te TETRA FECH ED RT amSR rome P .-ihe Permitting Requirements and Environmental Issues Overview them or simultaneously,and 3)are interdependent parts of a larger action and are thus dependent on that action for their justification.As these two actions would not necessarily be considered connected actions,the Purpose and Need Statement of the EIS would need to clearly justify the rationale for analysis of these two actions on a simultaneous basis. There would be multiple advantages and disadvantages to analyze these two actions simultaneously under NEPA.A joint NEPA analysis would result in a more transparent disclosure of impacts,reduce the costs of NEPA by conducting a single analysis,and aid the two projects in minimizing impacts by overlapping both their ROW and possibly the timing of construction.The disadvantages would include the difficulty in timing the two actions simultaneously,the risk of connecting these two actions in case one does not go through to final construction or is not approved,and the increased area of impact caused by a road compared to a transmission line alone. Route Comparison Each route alternative proposes some level of road building-either permanent road or an access road.The Northern Route includes approximately 20.1 miles of new road construction (14.4 miles between segment node S2 and S3,and approximately 5.7 miles between segment node S3 and S4)with the remainder of the ROW following existing roads.The Center-South route would require approximately 10.3 miles of new road construction between segment nodes T7 and T8. Each alternative would pass through a Scenic Viewshed LUD;however,the Northern Route would pass through 7 miles near the Frederick Sound compared to the 2 miles crossed by the Center-South Route near the Wrangell Narrows.The route through the Scenic Viewshed would generally fall within an area designated as a TUS LUD.Therefore,as stated above,upon construction of the KPI,this Scenic Viewshed LUD would transfer over to a TUS LUD, resulting in a land management prescription applicable to the construction and operation of a transmission line.Although the land management prescriptions would transfer over to a TUS LUD upon construction,initial analysis would still need to evaluate the project's impact on the Scenic Viewshed,as well as develop mitigation measures to minimize the impact on this viewshed (particularly to marine traffic within Fredrick Sound). The use of the Northern Route for an overhead utility corridor could increase the potential impacts on avian resources.There are a relatively high number of eagle nests along the shoreline adjacent to Fredrick Sound.The overhead utility poles and line could result in a long-term adverse affect on avian species,due primarily to the increased potential for collisions and to a lesser extent electrocution;therefore this route alternative may require additional mitigation measures to reduce the possibility of these adverse affects. Construction of a road or transmission line along the Northern Route could be complicated due to the Alaska Department of Natural Resources (DNR)designated Unit P-02,located along the coastal plain and foothills north of Prolewy Point.This DNR Unit is being managed to protect scenic views and protect habitat values,as well as being selected under NFCG 298 for the purpose of Community Expansion for the incorporated city of Kupreanof.According to DNR's Area Management Plan,this area is subjected to heavy weather which would limit water access Kake -Petersburg Intertie Study Update 3-13 Draft Report Permitting Requirements and Environmental Issues Overview to vessels and complicate construction activities and project design.The area is heavily used by marine life including marine mammals and waterfowl,and dense kelp beds are found along part of the shoreline which provide protected fish habitat.The high usage by wildlife species in this area could result in the necessity for additional mitigation measure aimed at preventing adverse environmental impacts. The Northern Route would include one approximately 3.1-mile submarine cable crossing between segment nodes S1 and S2,whereas the Center-South route includes two submarine crossings totaling 1.8 miles (0.6 mile at Wrangell Narrows and 1.2 miles at Duncan Canal). Each of the submarine crossings would require additional information in order to verify the exact route locations for burial.With the use of bathymetric surveys to identify potential obstructions, the submarine crossings can be finalized.The timing of construction of these cable crossings would likely need to be done during the March/April period to avoid potential impacts to crab fisheries.It may also include a marine mammal monitoring plan during this phase of the project. Unlike the other route alternatives,the Northern Route would pass through the city limits of Petersburg which could result in additional local permitting requirements and/or potential public scoping/concerns not present in other alternatives. For the purpose of assessing the possibility for a shorter submarine cable crossing,a modification to the Northern Route (West-North)has been proposed which would reduce the length of the submarine crossing of Wrangell Narrows by crossing at a constriction in the Narrows just west of Petersburg with a horizontal directional bore under Wrangell Narrows. This modified route would then follow along the Kupreanof Island shoreline,crossing Petersburg Creek near its mouth and then rejoin the original route of the Northern Route at node $2.The issues related to this modification would include the crossing at the mouth of Petersburg Creek (which could impact sensitive aquatic resources),passing the line through the jurisdictional limits of Kupreanof and passing the line through the state-owned lands along the shoreline north of Petersburg. The West-North directional bore alternative is proposed to cross beneath Petersburg Creek. Petersburg Creek offers good sport fishing for king,Coho,and sockeye during much of the year, and has relatively high recreational use.This route would cross or directionally drill under Coho Creek and Petersburg Creek,both anadromous streams and both subject to potential impacts to water quality and hydrology during construction. Although we believe it would be possible to construct this portion of the route and there would be cost savings between the current Northern Route and this modification due to a shorter submarine crossing,there would be increased review and coordination needed from state and federal agencies to fully assess potential impacts to the fishery in this area which may impact the construction schedule considerably.There are other issues associated with this route in that the community of Kupreanof has expressed that they do not want a road through the community,as well as crossing a Alaska DNR-owned parcel just north of Prolewy Point which is managed for scenic views,marine mammals,and waterfowl.It is noted,however,that the Kupreanof community has indicated support for the KPI in general and may not be opposed to the line if it were located a reasonable distance from the shoreline as it passes near Kupreanof.Although Kake -Petersburg Intertie Study Update 3-14 Draft Report Permitting Requirements and Environmental Issues Overview there may be significant cost savings associated with this route,its permitting could be more difficult than the other Northern Route alternative. Center-South Route Route Comparison In addition to the submarine crossing of the Wrangell Narrows,the Center-South Route would require a 1.2-mile submarine crossing of the Duncan Canal between nodes T6 and T7. According to DNR's Resource Management Plan for this region,there are important starry flounder nurseries and fishing grounds as well as shrimp trawl fishing areas within the vicinity of this cable crossing.Fishermen who rely on the Dungeness crab fishery also indicate that the Duncan Canal is a very important crab nursery and rearing habitat.The DNR may require the cable to be buried along its entire length in order to protect the habitat,fishing grounds,and integrity of the cable itself.Dredging and burying of the cable could result in additional short- term impacts to aquatic resources,and permits could be required to allow for the dredging activities. An important waterfowl flyway,the Duncan Canal Salt Chuck Waterfowl Habitat,is located due west of the Duncan Canal crossing.A utility corridor within or near this flyway could have an adverse effect on the safety of the waterfowl using this flyway.The potential for service interruptions would also be greater if the power lines are within the flight path of these birds. ADF&G staff recommended that the alignment be moved south,closer to the bluffs of the nearby plateau,so that the poles would be below the primary flyway height.A potential realignment of the line in this area should be reviewed during final alignment design with members of ADF&G and DNR Office of Habitat and Permitting staff to ensure avoidance and minimization of waterfowl conflicts. As stated above,the Center-South Route would pass through 2 miles of a Scenic Viewshed LUD near the Wrangell Narrows crossing;however,this route would generally fall within an area designated as a TUS LUD.Initial analysis of the Project would need to take into account the impact that the line would have on this Scenic Viewshed even though the prescriptions of the LUD would convert over to the TUS once construction was initiated. Estimated Cost of Environmental Studies and Permitting Cost estimates to permit the Northern Route and Center-South Route have been updated from the 2005 study.These estimates assume that an EIS will be prepared that focuses on these two routes but with the understanding that other routes previously proposed will be assessed during the NEPA process;therefore,the estimated costs provided in Table 3-4 are for conducting an EIS that would analyze a range of alternatives,including the two discussed in detail here.It also takes into account that the proposed road would be analyzed jointly with the Northern Route of the KPI,as well as other yet to be defined alternatives that could be proposed under scoping. Kake -Petersburg Intertie Study Update 3-15 Draft Report Permitting Requirements and Environmenta!Issues Overview Table 3-2 outlined some general costs associated with filing fees,bonding,annual fees,meeting costs,etc.for obtaining the various permits that would be required for the KPI project;however, a more detailed cost estimate would need to be developed once a preferred route is selected and approved.Based on past experience with permitting of the Swan -Tyee Intertie,which is similar in length and has required the same type of general permitting needs,the costs of applying for and obtaining the various permits would likely range between $90,000-$120,000,but does not include the costs of preparing any of the engineering drawings that would be required for some of the permits. Overall,both the Northern and Center-South routes include similar resource concerns which are recommended to be addressed through the NEPA process through an EIS.Differences between the two primary route corridors stem from the shorter overall ROW length (51.7 miles),fewer miles of proposed road building (10.3 miles),and a shorter length of submarine crossings (1.8 miles)of the proposed Center-South route. Kake -Petersburg Intertie Study Update 3-16 Draft Report Permitting Requirements and Environmental Issues Overview Table 3-5 Estimated Costs for the Preparation of an Environmental Impact Statement and Costs Associated with Permitting the KPI Transmission Line Project EIS Estimated Task Task Name Costs by Task 1 Project Initiation/Work Plan/Prework Meeting/Field Orientation/NOI $32,000 2 Scoping and Public Involvement $36,000 3 Field Work and Special Studies (Roll-up Total)$402,000 Field Preparation/Logistics 40,000 Fish/Watershed/Stream Characterization 65,000 Geology/Soils 25,000 Heritage Resource and Sacred Sites Inventory 50,000 Scenery/Visuals 15,000 Sensitive Plant Field Surveys 25,000 Subsistence 22,000 Transportation and Utilities 9,000 Wetlands Inventory Surveys 55,000 Wildlife/Habitat Field Surveys 28,000 Complete Final Field Reports 68,000 4 EIS Chapters 1 and 2 $35,000 5 Preliminary Draft EIS $180,000 6 Draft EIS $52,000 7 Biological Assessment/Evaluation $10,000 3 Public Meetings and Response to Public Comments $42,000 9 Preliminary Final EIS $66,000 10 |Final EIS $42,000 11 Administrative Record (Record of Decision)$15,000 Estimated Costs for Conducting EIS $912,000 Estimated Permitting Cost Associated with Selected Route $120,000 Estimated Environmental and Permitting for KPI Project $1,032,000 National Environmental Policy Act Process Figure 3-5 diagrams the National Environmental Policy Act (NEPA)process as implemented by the U.S.Department of Agriculture/U.S.Forest Service (Forest Service Handbook,1909.15, page 13 of 15;Approved:June 29,2004). Kake -Petersburg Intertie Study Update 3-17 Draft Report Permitting Requirements and Environmental!Issues Overview FIGURE 3-5 NEPA Process Overview Proposed Action ELS Required My Fitina Caegory (Chapter 20); for Exclusion Notice of Intent Dos Not Fit US DA or Forest Fits USDAor Fores ServicendServiceCategoryorThereAreCategoryandTlereAreNho Extraordinary Gr amstaces Extr ard mry Circumsance .(Chapte 30)(Chapter 30)S wping || ScopingandEnvironmentalEnvironmentalAnalyssAnalysis/\ Draft EIS Significant Effects Ned forEIS MayOccw Unce tan ' Caegorically FinalE IS |Excluded Env ronmantal As ses snent (Chapter 40)Reord of Decision (Chapter 20);vFindirgofNoSignifiantDeismMeno Impad &Decision Notice If Required --_="Img anenta ion an | Monitoring | Kake -Petersburg Intertie Study Update 3-18 Draft Report Permitting Requirements and Environmental Issues Overview Under NEPA,if a project is not allowable under a categorical exclusion and there is uncertainty regarding the potential impacts,the project proponent can conduct an Environmental Assessment (EA).In some cases,if a corridor is a designated utility corridor,an EA could be considered adequate to verify that a proposed transmission line project is compatible with that designation. However,under the current NEPA implementation protocols of the U.S.Forest Service,the EA and Environmental Impact Statement (EIS)processes are becoming more similar and thethresholdforwhatcouldbesignificantisdropping'!.The U.S.Forest Service recommends that a proponent expect their project be analyzed under the EIS process,thus removing the uncertainty of the overall process. '!Personal communication D.Rogers,U.S.Forest Service with J.Gendron,CH2M Hill;July 20,2005. Kake -Petersburg Intertie Study Update 3-19 Draft Report Section 4 Estimated Costs of Construction Introduction Costs to develop and construct the KPI have been estimated for the Northern and Center -South alternatives.The cost estimates are based on an estimate of the required material quantities asdeterminedfromapreliminarydesign'of the selected overhead sections of the line,planned underwater crossing configurations,and substation and switchyard requirements.Labor costs have been estimated based on recent experience on similar projects as well as discussions with individuals familiar with transmission line construction in Southeast Alaska.The estimated unit costs of materials are based on quotes from vendors and recent experience with similar construction projects. The estimated costs of the KPI alternatives as provided in this section of the report include all estimated costs of engineering and design,permitting,materials,equipment and construction. Primary components of each line (e.g.overhead lines,submarine cables)are identified separately in the cost estimate.Since the design of the KPI is still preliminary,a contingency factor of 15% has been applied to all costs.As design proceeds and more precision can be used in estimating the costs,the contingency included in the total cost estimate can possibly be lowered.In any major project of this type,however,the actual cost of construction can vary significantly from the engineer's estimate due to market conditions for the materials and services needed at the time of procurement.As an example,metal prices were approaching historic all time highs in 2008; with the current economic slowdown the prices have fallen some.Currently there is a high degree of uncertainty associated with cost estimates.With the economic stimulus package recently passed by the United States Congress,prices for transmission materials and labor could actually increase due to an increase in spending on transmission infrastructure nationally.. Alternatively,if the stimulus package is unsuccessful in meeting its intended purpose prices for labor and material could potentially fall significantly. The cost estimates included in this report are based on the routing and technical information described in Section 2.Primary characteristics of the line are either 69-kV or 138-kV,single- pole construction alongside existing roads.A 24 strand fiber-optic communication line is included along the entire length of all alternatives.Submarine crossings are to be made with single 3-core,69-kV,500 kcmil copper dielectric cables with a single layer outer shield and steelarmor'?.The 24 strand fiber-optic communication line is to be bundled into the cable.It is expected that KWETICO,the potential owner of the transmission lines,will contract for all services of permitting,design,construction and construction management.The estimated costs of these services are included in the total cost estimate.Details of the submarine cable estimate and specifications of the cable are shown in Appendix C. 2 A preliminary design of the overhead portion of the Center -South Route and selected overhead portions of the Northern Route was prepared using PLS-CADD design software.The PLS-CADD software is an interactive tool that assists the engineer selected the needed structures.From this preliminary design the required material quantities have been derived.The PLS-CADD graphical layout drawings for the Center-South Route and the selected sections of the Northern Route are provided in Appendix C. 3 The cost differential for 138-kV,750 kcmil conductor size cable has also been estimated. Kake -Petersburg Intertie Study Update 4-1 Draft Report Estimated Costs of Construction In addition to the estimated direct costs of construction,indirect cost items have also been estimated.Included among the indirect costs are the estimated costs of permitting,engineering, surveys,structure staking,owner's administration,construction management and contingencies. For the purpose of this estimate,the owner's administration cost is assumed to be 4%of the total direct costs and the construction management cost is assumed to be 4%of the total direct cost. The estimated cost of permitting is based on the costs shown in Section 3 of this report.The assumed contingency amount of 15%has been applied to all direct and indirect costs.The estimated cost of the submarine cables has been provided by a supplier of submarine cable installation services.The total cost of the submarine cable as estimated by the supplier is estimated to include an embedded contingency amount.Additional contingencies are not included in the cost estimate prepared as part of this report. The cost estimate for each route alternative includes the estimated cost of constructing an access road along the transmission line route in areas where logging roads do not exist.Clearing of trees and brush will be needed along the right of way for each route;however,in areas where the line will be built along existing roads,the clearing requirement will be greatly reduced.The estimated net cost of clearing is $10,000 per acre,assuming the sale of merchantable timber.For the Northern Route where the amount of merchantable timber is estimated to be greater,the netcostofclearingisestimatedtobe$8,000 per acre”. The estimated cost of access road construction is $200,000 per mile in forested areas and $230,000 per mile in muskeg areas.This cost includes clearing of a 60 foot-wide right-of-way,a total 14 foot-wide road with a 10 to 12 foot-wide gravel covered surface and road bedding made with typar or filter fabric.Access in the Wilderness Area is proposed to be provided via access trail.The cost of the trail is estimated to be 75%of the access road or $150,000 for forested section and $172,500 for the muskeg sections,both on a per mile basis. For the purpose of comparison,three alternative cost estimates have been developed for each of the Northern Route options.The alternatives are as follows: Base Alternative -Assumes a pioneer road will be built by DOTPF in advance of the transmission line. Alternative A -Assumes a pioneer/construction road is built in the current roadless area, but as part of the KPI project rather than by DOTPF,i.e.the cost of building the road is included in the cost of the KPI. Alternative B -Assumes that clearing and line construction in the area where there is no road is completed by helicopter. Cost estimates have also been prepared for both 69-kV and 138-kV construction.The total area to be cleared and the length of road and trail construction for each route alternative are shown in the following table.Note that for the option with the directional bore,no road would be 4 Specific estimates for the value of merchantable timber are very preliminary at this point.The value of timber to be removed from the right of way is subject to market conditions at the time of removal.Depending on the market conditions,it may be more cost effective to leave timber along the side of the right of way rather than remove it. Kake -Petersburg Intertie Study Update 4-2 Draft Report Estimated Costs of Construction constructed in the area near Kupreanof as part of the transmission line project.Clearing and construction of the line in this area would be completed with helicopters. TABLE 4-1 Estimated Right-of-Way Clearing and Road Construction Requirements Route Alternative Center -Northern Northern South Sub.Cable Dir.Bore Overhead Line Length (miles)45.0 53.5 56.0 Area to be Cleared (acres)90 -- With DOT Road -140 158 Without DOT Road -236 267 Access Road Construction (miles)13.2 -- With DOT Road --- -17.0 17.0WithoutDOTRoad The estimated total construction costs for each alternative are summarized in the following table Preconstruction costs related to permitting,environmental studies and final design are not included in the costs shown in Table 4-2. Draft ReportKake-Petersburg Intertie Study Update Estimated Costs of Construction TABLE 4-2 Estimated Comparable Costs of Construction for Each Route 69-kV Option ($000) 69-kV Route Alternatives Northern Route -Submarine Cable Northern Route -Directional Bore With DOT Without Helicopter With DOT Without Helicopter Center - Center -Road DOT Road Construction Road DOT Road Construction South South (Opt.1)(Opt.1A)(Opt.18)(Opt.2)(Opt.2A)(Opt.2B)w/Bore Overhead Line $16,909 $19,791 $19,791 $26,081 $21,811 $22,514 $28,804 $16,909 Clearing and Road Construction 3,765 1,120 5,465 3,776 1,552 5,791 6,408 3,765 Submarine Cables 8,138 8,850 8,850 8,850 ---4,069 Directional Bore Crossings -:--1,710 1,710 1,710 2,601 Switchyards and Substations 1,868 1,521 1,521 1,521 1,521 1,521 1,521 1,868 Subtotal -Direct Costs $30,679 $31,282 $35,627 $40,228 $26,594 $31,537 $38,443 $29,212 Indirect Costs $2,454 $2,503 $2,850 $3,218 $2,128 $2,523 $3,075 $2,337 Contingency (15%)4,970 5,068 5,772 6,517 4,308 5,109 6,228 4,732 Total Costs $38,104 $38,852 $44,249 $49,963 $33,030 $39,169 $47,747 $36,281 As shown in Table 4-2,the lowest cost alternative is the Northern Route with the directional bore assuming that the DOT road is constructed in advance of transmission line construction.If the DOT road is not constructed,the lowest cost alternative is the Center -South route.The alternatives with helicopter construction are the highest cost options.The estimated cost of the Center-South Route shown in Table 4-2 is slightly lower than the cost of the Northern route with the submarine cable.The estimated cost of the Center-South route shown in Table 4-2 is somewhat higher than shown in the 2005 study'®.Reasons for the higher estimated cost in this current study are much higher submarine cable material,installation and freight costs,higher labor costs overall and higher material costs for other components in the KPI system. It should also be noted that if a crossing of Wrangell Narrows by means ofa directional bore could be accomplished,it is estimated that the cost of the Center-South route could be approximately $1.8 million less than the cost if a submarine cable were used at this location. Detailed cost estimates for the route alternatives are shown in Tables 4-4,4-5,4-6 and 4-7. Cost Differential of 138-kV Compared to 69-kV Costs shown in Table 4-2 have been developed for a single wood pole 69-kV transmission line. If a decision is made to increase the voltage level to 138-kV it is estimated that on average the pole length would increase by approximately 7 feet and in some cases the pole class would be 15 The Center-South Route in this study is the same as defined in the 2005 Study.The estimated cost of the Center- South Route alternative in the 2005 Study was $30,217,000. Kake -Petersburg Intertie Study Update 4-4 Draft Report Estimated Costs of Construction one class larger.The conductor and guying would essentially remain unchanged.Insulators for a 69-kV line would normally be shorter and cost less,however the raptor protection guidelines recommend no less than 60 inches of insulator length so it may be that the same insulators would be used for either 69-kV or 138-kV.Labor for constructing the line,road building,clearing,etc. is assumed to be 5%higher for 138-kV construction.. The cost difference associated with the substation related portion of the project will be from the need to provide higher insulation and the purchase of equipment such as power circuit breakers and transformers rated for 138-kV vs.69-kV.The cost increase of the material and equipment is estimated to be approximately 40%.However,the labor cost is estimated to remain the same.. The estimated cost differential for 69-kV submarine cables compared to 138-kV is about 13%for the Northern Route and 8.5%for the Center-South Route.The cable manufacturer recommends that for 138-kV submarine cables the conductor size be increased to 750 kcmil compared to 500 kcmil for 69-kV cables.In total,if the submarine cables were sized at 138-kV,the estimated cost of the Northern Alternative would be $1,100,000 higher than shown in Table 4-2.The cost of the Center-South route would be $625,000 higher if 138-kV submarine cables were used instead of 69-kV. Table 4-3 shows the estimated cost of the KPI alternatives for the 138-kV option. TABLE 4-3 Estimated Comparable Costs of Construction for Each Route 138-kV Option ($000) 138-kV Route Alternatives Northern Route -Submarine Cable Northern Route -Directional Bore With DOT Without Helicopter With DOT Without Helicopter Center -Road DOT Road Construction Road DOT Road _Construction South (Opt.1)(Opt.1A)(Opt.1B)(Opt.2)(Opt.2A)(Opt.2B) Overhead Line $18,096 $21,209 $21,209 $27,499 $23,325 $24,028 $29,338 Clearing and Road Construction .3,765 1,120 5,465 3,776 1,552 5,791 6,408 Submarine Cables 8,763 9,950 9,950 9,950 --- Directional Bore Crossings ----1,943 1,943 1,943 Switchyards and Substations 2,430 1,974 1,974 1,974 1,974 1,974 1,974 Subtotal -Direct Costs $33,054 $34,253 $38,598 S$43,199 S$28,794 $33,736 $39,663 Indirect Costs S$2,644 §2,740 $3,088 $3,456 S 2,304 $2,699 $3,173 Contingency (15%)5,355 5,549 6,253 6,998 4,665 5,465 6,425 Total Costs $41,053 $42,542 $47,939 $53,653 S$35,762 $41,900 §$49,261 The cost of 138-kV construction is estimated to be approximately $2.95 million,or 7.7%,more than 69-kV construction for the Center -South route.For the Northern route with the submarine cable but without the DOT road,the estimated cost of 138-kV construction is $3.7 million,or 8.3%,more than for 69-kV construction., Kake -Petersburg Intertie Study Update 4-5 Draft Report Estimated Costs of Construction TABLE 4-4 (Page 1 of 2) Estimated Cost of Project Construction Kake -Petersburg Intertie Center-South Alternative 69-kV 2009 Estimated Cost Overhead Line Material and Freight Poles $s 1,217,000 Conductor 1,095,750 Insulators 625,000 Guys and Hardware 451,000 Fiber Optic Cable (ADSS 24 Strand)405,000 Subtotal -Materials S 3,793,750 Labor S 8,465,000 Incidental and Other Direct Costs Camp Cost/Food /Lodging S 1,354,000 Rockdrills and Blasting Materials 339,000 Equipment and Tools 677,000 Fuel and Maintenance 677,000 Barge and Landing Craft 181,000 Air Transportation 113,000 Helicopter Use 451,000 Mobilization and Demobilization 677,000 Bond and Insurance 181,000 Subtotal -Incidental and Other Direct Costs S 4,650,000 Subtotal -Overhead Line $16,908,750 Clearing and Road Construction Clearing with Timber Credit S 900,000 Road Construction -Forested Areas 1,140,000 Road Construction -Muskeg Areas 1,725,000 Subtotal $3,765,000 Submarine Cable -Wrangell Narrows T1-T2 Cable -3-500 kcmil copper bundled,69-kV,24 fiber strands $1,218,800 Installation 2,125,000 Marine Survey 75,000 Shipping 350,000 Termination Facilities 300,000 Subtotal S 4,068,800 Submarine Cable -Duncan Canal T6-T7 Cable -3-500 kcmil copper bundled,69-kV,24 fiber strands $1,218,800 Installation 2,125,000 Marine Survey 75,000 Shipping 350,000 Termination Facilities 300,000 Subtotal S 4,068,800 Kake -Petersburg Intertie Study Update 44 Draft Report Estimated Costs of Construction TABLE 4-4 (Page 2 of 2) Estimated Cost of Project Construction Kake -Petersburg Intertie Center-South Alternative 69-kV Petersburg Tap Switchyard Civil Site Prep &Foundations S 158,000 Ground Grid and Fencing 68,000 Bus Works 45,000 Control Cable and Conduit 41,000 SCADA and Control Interface 43,000 Sectionalizing Switch (2)(5)112,000 Breaker &CT (1)(2)198,000 Relaying,PT 36,000 Revenue Metering 47,000 Station Service and battery 77,000 Installation Labor 180,000 Shunt Reactor and Disc SW Subtotal Kake Substation Civil Site Prep &Foundations Ground Grid and Fencing Bus Works Control Cable and Conduit SCADA and Control Interface Fuses/Switches Transformer -69/12.5-kV,2.5 MVA,Relaying,LA,etc. Voltage Regulators/Bypass Switches Recloser/Disconnect Switch Relaying PT Installation Labor Station Service and Battery Subtotal Total Direct Costs indirect Costs Construction Management (4%of Direct Costs) Owners Administration (4%of Direct Costs) Subtotal -Indirect Costs Contingency -15% Total Project Cost $1,005,000 $136,000 45,000 34,000 33,000 40,000 40,000 272,000 34,000 34,000 36,000 91,000 68,000 S 863,000 $30,679,350 1,227,200 1,227,200 $2,454,400 4,970,000 $38,103,750 Kake -Petersburg !Intertie Study Update 4-7 Draft Report Estimated Costs of Construction TABLE 4-5 (Page 1 of 2)Estimated Cost of Project Construction Kake -Petersburg intertie Northern Alternative at 69-kV with DOT Road (Submarine Cable Option) 2009 Estimated Cost Overhead Line Material and Freight Poles S 1,518,908 Conductor 1,302,725 Insulators 787,126 Guys and Hardware 515,527 Fiber Optic Cable (ADSS 24 Strand)481,500 Subtotal -Materials $4,605,786 Labor S 10,607,800 Incidental and Other Direct Costs Camp Cost/Food /Lodging S 1,413,000 Rockdrills and Blasting Materials 312,000 Equipment and Tools 703,000 Fuel and Maintenance 703,000 Barge and Landing Craft 178,000 Air Transportation 89,000 Helicopter Use 486,000 Mobilization and Demobilization 533,000 Bond and Insurance 160,000 Subtotal -incidental and Other Direct Costs S 4,577,000 Subtotal -Overhead Line S$19,790,586 Clearing and Road Construction Clearing with Timber Credit $1,120,000 Road Construction -Forested Areas - Road Construction -Muskeg Areas - Subtotal $1,120,000 Submarine Cable -Wrangell Narrows S1-S2 Cable -3-500 kcmil copper bundled,69-kvV,24 fiber strands S 3,750,000 Installation 4,000,000 Marine Survey 100,000 Shipping 700,000 Termination Facilities 300,000 Subtotal $8,850,000 Kake -Petersburg Intertie Study Update 4-8 Draft Report Estimated Costs of Construction TABLE 4-5 (Page 2 of 2) Estimated Cost of Project Construction Kake -Petersburg Intertie Northern Alternative at 69-kV with DOT Road (Submarine Cable Option) Petersburg Tap Switchyard Civil Site Prep &Foundations 72,000 Ground Grid and Fencing 36,000 Bus Works 33,000 Control Cable and Conduit 22,000 SCADA and Control Interface 18,000 Sectionalizing Switch (2)77,000 Disconnect Switches 36,000 Breaker &CT 99,000 Relaying,PT 38,000 Revenue Metering 47,000 Installation Labor 90,000 Station Service and Battery 90,000 Shunt Reactor and Disc SW - Subtotal 658,000 Kake Substation Civil Site Prep &Foundations 136,000 Ground Grid and Fencing 45,000 Bus Works 34,000 Control Cable and Conduit 33,000 SCADA and Control Interface 40,000 Fuses/Switches 40,000 Transformer -69/12.5-kV,2.5 MVA,Relaying,LA,etc.272,000 Voltage Regulators/Bypass Switches 34,000 Recloser/Disconnect Switch 34,000 Relaying PT 36,000 Installation Labor 91,000 Station Service and Battery 68,000 Subtotal 863,000 Total Direct Costs 31,281,586 Indirect Costs Construction Management (4%of Direct Costs)1,251,300 Owners Administration (4%of Direct Costs)1,251,300 Subtotal -Indirect Costs 2,502,600 Contingency -15%5,068,000 Total Project Cost 38,852,186 Kake -Petersburg Intertie Study Update 4-9 Draft Report Estimated Costs of Construction TABLE 4-6 (Page 1 of 2) Estimated Cost of Project Construction Kake -Petersburg Intertie Northern Alternative at 69-kV with DOT Road (Directional Bore Option) 2009 Estimated Cost Overhead Line Material and Freight Poles $1,589,885 Conductor 1,363,600 Insulators 823,908 Guys and Hardware 539,617 Fiber Optic Cable (ADSS 24 Strand);$04,000 Subtotal -Materials S 4,821,010 Labor $11,103,448 Helicopter Labor S 450,000 Incidental and Other Direct Costs Camp Cost/Food /Lodging S$1,413,000 Rockdrills and Blasting Materials 312,000 Equipment and Tools 703,000 Fuel and Maintenance 763,000 Barge and Landing Craft 178,000 Air Transportation 89,000 Helicopter Use 1,086,000 Mobilization and Demobilization 533,000 Bond and Insurance 160,000 Subtotal -Incidental and Other Direct Costs $5,237,000 Subtotal -Overhead Line $21,611,458 Clearing and Road Construction Clearing with Timber Credit $1,264,000 Helicopter Clearing S 288,000 Road Construction -Forested Areas - Road Construction -Muskeg Areas - Subtotal $1,552,000 Underground Line Section in Petersburg S 200,000 Underwater Crossings -Wrangell Narrows,Petersburg Creek Conductors -6,600 ft.,69-kV,500 kcmil $140,000 Installation Mobilization 315,000 Directional Bore and HDPE Conduit Installation 840,000 Cable Pulling 75,000 Conduit -2,200 ft.,10"SDR-11 HDPE Pipe,Misc.Materials 90,000 Shipping 50,000 Termination Facilities 200,000 Subtotal $1,710,000 Kake -Petersburg Intertie Study Update 4-10 Draft Report Estimated Costs of Construction TABLE 4-6 (Page 2 of 2) Estimated Cost of Project Construction Kake -Petersburg Intertie Northern Alternative at 69-kV with DOT Road (Directional Bore Option) Petersburg Tap Switchyard Civil Site Prep &Foundations $72,000 Ground Grid and Fencing 36,000 Bus Works 33,000 Control Cable and Conduit 22,000 SCADA and Control Interface 18,000 Sectionalizing Switch (2)77,000 Disconnect Switches 36,000 Breaker &CT 99,000 Relaying,PT 38,000 Revenue Metering 47,000 Installation Labor 90,000 Station Service and Battery 90,000 Shunt Reactor and Disc SW - Subtotal S 658,000 Kake Substation Civil Site Prep &Foundations S 136,000 Ground Grid and Fencing 45,000 Bus Works 34,000 Control Cable and Conduit 33,000 SCADA and Control Interface 40,000 Fuses/Switches 40,000 Transformer -69/12.5-kV,2.5 MVA,Relaying,LA,etc.272,000 Voltage Regulators/Bypass Switches 34,000 Recloser/Disconnect Switch 34,000 Relaying PT 36,000 Installation Labor 91,000 Station Service and Battery 68,000 Subtotal S 863,000 Total Direct Costs S 26,594,458 Indirect Costs Construction Management (4%of Direct Costs)1,063,800 Owners Administration (4%of Direct Costs)1,063,800 Subtotal -Indirect Costs $2,127,600 Contingency -15%4,308,000 Total Project Cost $33,030,058 Kake -Petersburg Intertie Study Update 4-11 Draft Report Section 5 Example Project Development Schedule Introduction The KPI construction cost estimates provided in Section 4 include the estimated costs of several activities prior to actual construction.Included among these activities are preliminary design, geotechnical surveys,permitting and environmental studies,and final design.The actual time required to perform these activities and when they would be performed will depend on a number of factors.An example development schedule has been prepared to indicate what activities would be performed and what the activity duration would be for development of the KPI. An integral part of the development of any project requiring a significant degree of grant funding is the pursuit and approval of funding sources.The time required for this effort cannot be reliably predicted.In addition,there will be a number of permits and approvals needed to construct the Interties as indicated in Section 3 of this report.The time required to obtain the necessary permits is often influenced by the degree of public support or opposition to the projects.Further,various commercial arrangements will be needed to allow for the effective utilization of the KPI.Such arrangements would include power sales agreements and contracts. Permitting and Environmental Studies The preparation of certain information needed in the permitting process,such as route diagrams and technical descriptions,will necessitate that certain engineering work be accomplished fairly early in the process.The expected duration of permitting activities for the KPI is approximately two years.In order to expedite the development process,it would be recommended that preliminary engineering and route alignment activities be conducted concurrently with early permitting work and environmental studies. Engineering Related Activities The project development approach outlined below is based upon construction being undertaken by a contractor(s)using plans and technical specifications prepared by an engineering firm experienced with overhead transmission line design.Major equipment and materials would be obtained by KWETICO with installation performed by a construction contractor.An engineering firm,working as the Owner's Project Engineer would manage and oversee specialty engineering services.Various activities related to the engineering function of project development are described in the following paragraphs. Selection of Project Team Typically owners select a Project Manager (with appropriate experience)and contract with specialty firms to provide the required services.Engineering and related specialty areas include: e Project Management Kake -Petersburg Intertie Study Update 5-1 Draft Report Example Project Development Schedule e Preliminary and Final Engineering e Engineering survey e Geotechnical Investigations e Easements,Land Rights,property survey e Logging and Clearing Specialist e Construction Specialist The engineering team would be charged with developing and implementing a detailed work plan, schedule and budget to accomplish the Project on schedule and within budget. Alignment Definition One of the first tasks required to move the Project forward will be to refine the conceptual design and the selected route.Construction,operation and maintenance issues will be discussed in detail with the owner and the owner's operating personnel to identify project requirements. During this phase a transmission line design engineer and other specialists would initiate a detailed review of the route identifying any routing concerns or route improvements.This work will require coordination with the environmental and permitting specialist knowledgeable with the area.Incorporating input from the various specialists,a specific alignment will be selected. Selection of the specific alignment will consider: e Specific site locations of Tap,Substation,Submarine Crossings e Alignment of logging road e Potential alignment of DOTPF road to Kake e Location of clear-cuts,size of trees e Geotechnical investigation of route and substation sites e Terrain elevation differences e Environmental or cultural avoidance areas e Location of eagle trees e Location of good soils for structure stability e Visual Concerns e Land ownership Engineering Survey An engineering survey will be obtained once a specific alignment is identified in the field and tied down with specific coordinates.The engineering survey will locate physical features in plan and determine elevations along the alignment within the defined corridor.Plan/profile drawings will be developed from the field survey. There are several types of surveying methods which could be utilized on a project such as the Interties.One which may prove economical while also providing great flexibility in allowing Kake -Petersburg Intertie Study Update §-2 Draft Report Example Project Development Schedule adjustments during preliminary design without requiring follow-up visits for additional surveys is LIDAR (Light Detection and Ranging). LIDAR,in summary,uses a laser and receivers mounted generally on a helicopter to scan an area from low altitude and collect survey data.The helicopter has airborne global positioning system (GPS)capability and also ties into ground stations established at about every 25 mile radius.The laser sends out several thousand pulses per second and the returns are collected by the receivers mounted on outriggers. The data is collected as a series of X,Y,Z points tied to a reference grid such as State Plain Coordinates.The huge amount of data collected in the field is filtered and reduced into separate files such as ground,existing structures,existing wires and vegetation.These files can then be imported into design programs such as PLS-Cad.In PLS-Cad,the designer can create a surface wire-frame model from which profiles can be cut once the alignment is established.Because of the very dense coverage,(points are separated by a couple of feet within a 200'to 1,000'wide corridor)the surface model will result in very precise profiles.Refinements may be made to enhance the alignment following a review of the plan/profile drawings. A similar effort will be necessary for the substation sites where new or revised stations will be necessary.This will most likely be accomplished with standard ground based surveying methods.This will provide the engineers with data necessary to begin cut and fill calculations and to proceed with plot plans and complete foundation designs. Preliminary Engineering Depending on the selected route,much of the preliminary engineering work needed for the KPI has been accomplished.The objective of the preliminary design task is to finalize design criteria and to complete sufficient design calculations to determine the general layout and sizing of major facility components.Preliminary engineering will proceed simultaneously with the alignment definition phase.The preliminary design phase will include additional system studies and discussions with the owner's operating personnel to refine and determine: e System protection plan e One-line drawings of system e Equipment and conductor sizes e Voltage drop and power flow e Appropriate insulation e Need for reactors e Preliminary station layouts Preliminary engineering will also determine all of the detail design parameters and will result in issuance of a Basis of Design documenting design requirements for the line and substations.The line related Basis of Design would include matters such as: e Codes and Standards Kake -Petersburg Intertie Study Update 5-3 Draft Report Example Project Development Schedule e Clearance requirements (horizontal and vertical) e Conductor tension limits e Sag/tension data e Physical loading requirements e Overload capacity factors e Grounding requirements e Clearing requirements e Right-of-way constraints e Framing requirements e Guy and anchor requirements A similar Basis of Design would be developed for the station related work. Geotechnical Investigations Subsurface soils investigations will be required at the major equipment locations (substation, termination locations and tap points).Experienced geotechnical personnel will review the entire route and observe road cuts and perform excavation of test pits along the route.Using the data collected tempered with experience,a subsurface profile will be developed identifying the subsurface profile and key avoidance areas. Final Design Final design will involve the completion and documentation of design calculations,special analysis,development of construction drawings,development of construction and material specifications,and development of final material lists.During final design,specific pole locations,framing,pole size,guy leads and anchor types will be determined for each structure along the alignment.Locations will be staked and field reviewed.For the substation equipment and where needed for line structures the foundations,grounding,and fencing will be sized and designed as appropriate. Initiate Construction and Material Procurement Contracts This function would involve the preparation of bid documents and specifications for vendors and suppliers to base bids for materials and construction services.Much of the material needed for the overhead portions of the Intertie can be obtained relatively quickly.The submarine cables would require a longer lead time and in particular,delivery of the cables and arranging for installation could require more than a year.Flexibility in the schedule with regard to the cable procurement could significantly affect the delivered and installed cost of the cable. In general,it is expected that the procurement of materials and construction services would be conducted through the solicitation of bids and award of contracts to vendors and contractors early in the year in which construction is expected to commence.The first year of construction Kake -Petersburg Intertie Study Update 5-4 Draft Report Example Project Development Schedule activity is not expected to require significant material deliveries so a full year of lead time on material manufacturing and delivery would be allowed for in the schedule. Construction Activities A two-year or three-year construction duration is expected for the KPI.A three-year project is shown below.It is possible it could be compressed into two years,but the decision should be delayed until the final route is known and the design complete or at least significantly underway. The major activities to be undertaken in each year are as follows: Year 1 e Construct needed access roads and trails e Where existing roads exist and would allow the following,complete: o Alignment clearing o Construction of work pads,as required o Construction of other key components,as appropriate Year 2 e Pole setting or line construction e Where new roads were built in year 1 o Alignment clearing o Construction of work pads,as required o Construction of other key components,as appropriate Year 3 e Completion of overhead line construction e Installation of submarine cables e Substation and switchyard construction Total Project Development Schedule Assuming that funding were available,or at least reasonably assured,and arrangements needed to proceed with the KPI were approved,it is estimated that a three to four year development and construction schedule could be accomplished for the KPI. Kake -Petersburg Intertie Study Update 5-5 Draft Report Section 6 Power Supply Evaluation and Economic Analysis Power Supply Evaluation Overview Hydroelectric generating facilities and diesel generators provide nearly all of the electric powergenerationinSoutheastAlaska'®,Elsewhere in Alaska,natural gas and coal are used to provide a significant portion of the electrical power supply;however,these fuels are not commercially available in Southeast Alaska.The state and federal governments,as well as certain communities and utilities have developed the existing hydroelectric generating plants in Southeast Alaska. Hydroelectric facilities require specific site conditions and generally have high initial development costs.The effective costs of hydroelectric development can be made even higher by the need to construct projects larger than the present electric loads require.This can create a surplus energy generation capability from hydroelectric plants,sometimes for a significant length of time. The availability of diesel fuel,the ease of installing diesel generators in a wide range of capacities and relatively low initial costs have made diesel engine generators the generator of choice in most remote locations including Southeast Alaska.The operating and maintenance (O&M)expenses associated with diesel generators,however,often make them more costly than hydroelectric generation plants in the long run.Potential interruptions in fuel delivery,the susceptibility of fuel prices to wide variation,noise and air pollution issues are other negative aspects of diesel generation.Where available,hydroelectric generation is preferred to diesel generation. The primary purpose of the KPI will be to transmit power generated at the Southeast Alaska Power Agency's (SEAPA)Tyee Lake hydroelectric project to Kake where diesel generation is the only source of power supply.At the present time,significant additional hydroelectric energy capability,estimated to be in the range of 50,000 MWh annually,is available at the Tyee Lake project.Another significant benefit of the KPI would be that new hydroelectric projects could potentially be developed in the interconnected area.With the KPI and the Swan-Tyee Intertie,a much larger regional power supply system would exist that would allow for better utilization of existing generating resources as well as encourage development of the most cost effective new hydroelectric facilities available in the region. The electric power requirements of all the interconnected load centers involved with the KPI are important to the evaluation of the KPI feasibility.Projections of power requirements have been compiled for Kake,Petersburg,Wrangell,and Ketchikan,all of which currently rely upon the ©In the past,pulp mills in Ketchikan and Sitka used production waste materials as a boiler fuel to drive steam turbines. Kake -Petersburg Intertie Study Update 6-1 Draft Report Power Supply Evaluation and Economic Analysis output of the Tyee Lake project or will be connected to Tyee Lake through the construction of new transmission facilities.In the past two years,the high price of fuel oil has encouraged residential,commercial and government facilities in Petersburg,Wrangell and Ketchikan to covert to electric space heating systems.This has resulted in higher electric loads in these communities,a trend which is expected to continue in the near future. The KPI will be used to transmit hydroelectric energy that is either surplus to the needs of the interconnected SEAPA members (Petersburg,Wrangell and Ketchikan)or from interconnectedhydroelectricplantstobebuiltinthefuture''.Consequently,it is important to evaluate the availability of the surplus generation and identify potential new hydroelectric resources that can be developed to economically provide additional energy to the interconnected systems,as needed,in the future.Although transmission lines are generally very reliable,power deliveries over the KPI to Kake will need to be considered interruptible due to potential outages of the line. As such,local generation sufficient to supply loads if the transmission lines are down due to unplanned outages or maintenance will continue to be needed in Kake. It is also important to note the commercial and contractual arrangements that are in place that could potentially limit the availability of power resources for sale to other utility systems.For example,the Tyee Lake project is owned and operated by the SEAPA and its output is sold to Petersburg and Wrangell pursuant to the SEAPA Power Sales Agreement.Petersburg,Wrangell and eventually Ketchikan when it is interconnected,will always have first priority to the output of the Tyee Lake Project pursuant to the Power Sales Agreement. Power Requirements Electric power requirements have been projected for KPI interconnected utilities for a ten-year projection period.For Kake,the power requirement projections are based on assumed growth rates applied to recently experienced loads and acknowledge potential increases in commercial loads if power rates are lower.Power requirements for Ketchikan,Petersburg and Wrangell have been compiled from previously prepared SEAPA planning studies.The existing loads of the utilities are shown in Table 6-1. 17 Other existing municipally-owned hydroelectric facilities used to supply power to Petersburg and Ketchikan are fully utilized to serve loads in those communities Kake -Petersburg Intertie Study Update 6-2 Draft Report Power Supply Evaluation and Economic Analysis TABLE 6-1 2008 Energy Loads (MWh)' Energy Sales (MWh) Energy Reqs.3 Peak Firm Non-Firm 7 Total (MWh)(kW) Petersburg 41,752 -41,752 47,768 9,020 Wrangell 23,160 2,598 25,758 28,192 4,100 Ketchikan 154,803 -154,803 164,805 29,000 IPEC -Kake 1,753 543 2,296 2,608 485 1 Data shown for Ketchikan is for 2007. 2 Non-firm,or interruptible energy sales can be curtailed under certain circumstances.Sales shown are to the Silver Bay sawmill in Wrangell and to Kake Seafood's in Kake. 3 Energy requirements are the summation of total generation and total power purchases. The basis for and assumptions used in preparing the projected power requirements for each of the load centers are described in the following paragraphs. Petersburg and Wrangell Petersburg and Wrangell are both municipally owned electric utilities interconnected with each other by the Tyee Lake transmission line. Petersburg Municipal Power &Light Petersburg Municipal Power &Light (PMPL)provides electric service to the residents and businesses of Petersburg and the surrounding area.In its fiscal year 2008,PMPL sold 41,752 MWh of electric energy to its 1,374 residential,393 harbor,302 small commercial,and 33 large commercial electric customers.Energy sales to a large seafood processing facility in Petersburg represented approximately 14 percent of PMPL's total energy sales in 2008.Total revenues from sales of electricity in 2008 were $4,787,753 representing average unit revenues of 11.5 cents per kWh.The total system peak demand was 9.0 MW and total energy requirements were 47,768 MWh in 2008. PMPL owns and operates the 2.0 MW Blind Slough hydroelectric project with an average annual energy generation capability of approximately 11,500 MWh.PMPL fully utilizes the output of its own hydroelectric facility each year and purchases power from Tyee Lake to supply its remaining power supply requirement.PMPL has 6.6 MW of reliable diesel generationcapacity'®,Diesel generation is the most costly of PMPL's power supply resources and is typically only needed when the Tyee Lake project is unavailable due to maintenance or repair activities. 18 Although PMPL has 10.1 MWof installed capacity at its diesel powerplant,3.5 MW of this capacity is in poor condition and unreliable. Kake -Petersburg Intertie Study Update 6-3 ;Draft Report Power Supply Evaluation and Economic Analysis Total PMPL energy requirements in the past few years have increased moderately,with an average increase of 4.8%per year between 2004 and 2008.In the near future,total energy requirements are forecasted to increase slightly at an average annual growth rate of 3.5 percent for the medium growth rate scenario.Contributing to near term load growth is a significant conversion to electric space heat by residential and commercial electric consumers in Petersburg. Wrangell Municipal Light &Power Wrangell Municipal Light &Power (WMLP)provides electric service to the residents and businesses of Wrangell and the surrounding area.In its fiscal year 2008,WMLP sold 23,160 MWh of electric energy to its 1,059 residential,496 small commercial,eight large commercial, one industrial and one municipal electric customers.An additional 2,655 MWh of interruptible energy was sold to the Silver Bay sawmill in 2008.Total energy sales to the sawmill represented approximately 10.3 percent of WMLP's total energy sales in 2008.The combined energy requirements of two seafood processors represented another 5.7 percent of WMLP's total energy sales in 2008. _Total revenues from sales of electricity in 2008 were $2,504,891,excluding revenues from interruptible sales,representing average unit revenue of 10.8 cents per kWh.Energy sold by WMLP to the sawmill is purchased from SEAPA at a reduced,interruptible rate.The total system peak demand was 4.1 MW and total energy requirements were 28,114 MWh in 2008. WMLP owns and operates 8.4 MW of diesel generation capacity.Typically,WMLP supplies its entire power supply requirement from the Tyee Lake project although some diesel generation is used when the Tyee Lake project is unavailable due to maintenance or repair activities.WMLP and PMPL purchase power from Tyee Lake through the SEAPA. Total WMLP energy requirements in the past few years have remained relatively steady although a fairly significant increase in retail energy sales occurred in 2008,primarily as a result of conversions to electric space heat by residential and commercial customers.In the near future, total energy requirements,net of interruptible energy sales,are forecasted to increase slightly in 2009 and each year thereafter as conversions to electric space heat continue to be realized in the community.The Silver Bay sawmill closed its operation in 2008 and was sold to a new owner which has indicated it intends to reopen the mill after modifications to the facility are made.No interruptible power sales to the sawmill are included in the forecast of WMLP energy sales for fiscal year 2009 but energy sales are assumed to resume in 2010 and continue thereafter. Forecasted Power Requirements Electric loads in Petersburg and Wrangell have been projected recently with regard to studies conducted in conjunction with a SEAPA bond issue.Loads in Petersburg are assumed to increase at average annual rates of 0.5%,0.0%and 2.0%for medium,low and high forecast scenarios,respectively.Loads in Wrangell are assumed to increase at average annual rates of 0.5%,0.0%and 1.0%for medium,low and high forecast scenarios,respectively.In the medium and low load growth scenarios no energy sales are assumed to be made to the sawmill in Wrangell.For the high growth scenario,it is assumed that energy sales to the sawmill will be 5,000 MWh per year. Kake -Petersburg Intertie Study Update 6-4 . Draft Report Power Supply Evaluation and Economic Analysis Forecasted loads for Wrangell and Petersburg are summarized in the following table. TABLE 6-2 Petersburg and Wrangell Projected Energy Requirements Medium Growth Scenario 2010 2011 2012 2013 2014 Energy Requirements (MWh) Petersburg *51,100 52,400 53,700 54,500 54,380 Wrangell”29,220 29,490 29,760 30,030 30,180 Total 80,320 81,890 83,460 84,530 84,560 3Less:Petersburg Hydro (11,500)(11,500)(11,500)(11,500)(11,500) Less:Minimal Diesel *(1,300)(1,300)(1,300)(1,300)(1,300) Net Requirement on Tyee 5 67,520 69,090 70,660 71,730 71,760 *Assumes average growth in energy requirements ranging from 3.75%in 2009 to 1.0%in 2014 and each year thereafter. 2 Assumes average growth in energy requirements ranging from 5.0%in 2009 to 0.5%in 2014 and each year thereafter.Assumes 2,500 MWh energy sales to sawmill in each year. 3 Estimated average annual generation from PMP&L's Blind Slough hydroelectric project. "Estimated diesel generation needed for backup and maintenance purposes. 5 Projected net energy requirement of PMP&L and WML&P on the Tyee Lake hydroelectric project. Ketchikan Ketchikan Public Utilities (KPU),a municipally owned electric utility,is the second largest electric utility system in Southeast Alaska.KPU obtains the majority of its power supply from KPU-owned hydroelectric projects and the Swan Lake project,a SEAPA project.In most years, KPU's electric loads exceed the available hydroelectric generation capability and diesel generators must be used to supply the net power requirement.The SEAPA is presently constructing the Swan-Tyee Intertie to gain access to the surplus generation capability of theTyeeLakeproject'®.The electric requirements of KPU will affect the net generation available to Kake from the Tyee Lake project. KPU provides electric and telephone service to the residents and businesses of Ketchikan and the surrounding Ketchikan Gateway Borough and provides water service within the city limits.In 2007,KPU sold 154,803 MWh of electric energy to its 5,677 residential,1,091 commercial,14 industrial and 523 other electric customers.Of the total energy sales in 2007,approximately 40 percent,44 percent and 13 percent were to residential,commercial and industrial customers, respectively.Total revenues from sales of electricity in 2007 were $14,795,312 representing average unit revenues of 9.6 cents per kWh.The total system peak demand was 29 MW and total energy requirements were 164,805 MWh in 2007. KPU owns and operates 11.7 MW of hydroelectric generating capacity at three separate facilities located relatively close to Ketchikan and 23.0 MW of diesel generation capacity located in its 19 Construction of the Swan -Tyee Intertie is expected to be completed in late 2009. Kake -Petersburg Intertie Study Update 6-5 Draft Report Power Supply Evaluation and Economic Analysis Bailey Powerplant.The average annual energy generation capability of the KPU-owned hydroelectric facilities is approximately 74,000 MWh.In general,KPU fully utilizes the output of its own hydroelectric facilities each year and purchases power from Swan Lake to supply its remaining power supply requirement.Diesel generation,which is the most costly of KPU's power supply resources,is used as needed to supplement the output of the KPU hydroelectric facilities and Swan Lake. With completion of the Swan -Tyee Intertie,KPU will purchase power from the Tyee Lake 'project to supplant nearly all of its expected diesel generation in the near to mid future.Electric loads are assumed to increase at average annual rates of between 2.5%per year in 2009 and 1.0%in 2014 and thereafter.KPU's forecasted electric requirements are summarized in the following table. TABLE 6-3 Ketchikan Public Utilities Projected Energy Requirements -Medium Growth Scenario 2010 2011 2012 2013 2014 Energy Requirements (MWh)1 173,100 175,700 178,300 181,000 181,770 2Less:KPU Hydro (74,000)(74,000)(74,000)(74,000)(74,000) Less:Swan Lake *(75,800)(75,800)(75,800)(75,800)-_(75,800) Net Requirement '23,300 25,900 28,500 31,200 31,970 *Assumes average growth in energy requirements ranging from 2.5%in 2009 to 1.0%in 2014 and each year thereafter. ?Estimated annual energy generation from KPU-owned hydroelectric projects assuming average precipitation levels. 3 Estimated annual generation from the Swan Lake hydroelectric project assuming average precipitation levels. 4 Projected net energy requirement to be provided from diesel generation,new hydro project generation or the Tyee Lake hydroelectric project. Kake Electric service is provided to the residents and businesses of Kake by IPEC.In 2008,there were 246 residential customers,65 commercial customers and 10 public facility customers in Kake.Average monthly energy consumption of about 366 kWh per residential customer in 2008 is significantly lower than that experienced in larger cities in Southeast Alaska.In Ketchikan, Petersburg and Wrangell,average monthly energy consumption is approximately 1,000 kWh,920 kWh and 725 kWh,respectively*®.The low residential energy consumption in Kake is areflectionofthehighretailcostofpower,which averaged 60.3 cents per kWh”'to residential 2°Based on 2007 sales data for residential customers. 2!The effective rate to residential customers was lowered by the State's Power Cost Equalization (PCE)program to approximately 22 cents per kWh in 2007 for the first 500 kWh purchased each month.Although the PCE program provides a significant subsidization of residential power costs,it also provides an incentive to limit power consumption to 500 kWh per month or less.It should also be noted that the funding of the PCE program is granted Kake -Petersburg Intertie Study Update 646 Draft Report Power Supply Evaluation and Economic Analysis customers in 2008.Commercial rates are also in this range and undoubtedly function to significantly limit electrical consumption by commercial customers. The number of electric customers in Kake has dropped about 12.0%since 2000,although total customers served has remained relatively constant between 2005 and 2008.Total annual energy sales remained relatively constant between 2000 and 2003 mostly due to interruptible sales, however,energy sales to residential and commercial customers have declined steadily through 2008.In 2004,the closure of Kake Seafoods,a seafood processing facility,contributed to an overall 32%drop in energy sales in Kake in 2004.Kake Seafoods restarted operations briefly in 2006 but is presently not in operation.In total,the interruptible energy sales rate in Kake was about 40 cents per kWh in 2008.While in operation,Kake Seafoods had purchaseda significant amount of interruptible energy from IPEC.Annual energy sales by customer class for the period 2000 through 2008 are shown in Figure 6-1. FIGURE 6-1 Annual Energy Sales in Kake by Customer Class (kWh) 4,500,000 4,000,000 [a3,500,000 -\_.3,000,000 + 3 22 2,500,000 ti) Pa)p £J§2,000,000 3 3 < iJ<4,500,000 4 meena 1,000,000 4 500,000 + 2000 2001 2002 2003 2004 2005 2006 2007 2008 |@Residential OCommercial Public Facilities ™Interruptible | For the purpose of this analysis assuming the KPI is built,the number of residential customers served in Kake is assumed to increase 3%per year beginning in 2011.This is a higher rate of by the State legislature on an annual basis and no guarantees can be provided with regard to its continuation in the future. Kake -Petersburg Intertie Study Update 6-7 Draft Report Power Supply Evaluation and Economic Analysis growth than would be expected without the KPI,reflecting increased economic activity in the community with lower power costs.Commercial and public facility customers served in Kake have been assumed to increase at an average annual rate of 1%per year.Energy use per account is assumed to increase approximately 1.0%per year for residential customers;however,higher rates of increase in energy consumption would be expected for commercial customers with lower electricity rates.In general,it is assumed that commercial energy consumption in Kake would increase to levels experienced in the early 2000's after the KPI becomes operational.Without the KPI,there has been little indicated that would cause a significant increase in electric energy requirements. If the KPI and other factors”contribute to the lowering of IPEC's retail rates,electric consumption could increase even further.There may also be opportunities to sell additional energy to customers that may be using their own generators at the present time,however,the amount of energy that this would represent is not known. With the KPI,IPEC may be able to offer an economic incentive power sales rate to new commercial/industrial customers that might encourage economic development in the Kake area and increase energy sales.The economic incentive rate would be tied to the incremental cost of purchased power over the KPI and could be significantly lower than IPEC's current interruptible rate.The impact of an economic incentive rate on Kake energy sales cannot be predicted and consequently,is not reflected in the analysis at the present time. The projected power requirements for Kake are summarized in the following table. TABLE 6-4 IPEC Kake Service Area Projected Energy Loads and Capacity Requirements with the KPI Historical Projected 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Energy Sales (MWh) Residential 1,150 1,111 1,080 1,099 1,119 1,167 1,215 1,264 1,314 1,365 Commercial 550 534 $25 534 $43 553 562 606 654 705 Interruptible 1 1,152 431 $43 549 $54 560 565 $71 S77 1,153 Public Facilities 125 147 148 142 145 148 151 155 158 161 Other :::::-::-: Total Sales 2,976 2,224 2,296 2,324 2,362 2,427 2,493 2,595 2,702 3,384 Increase %7 29.9% -25.3%3.2%1.2%1.6%2.8%2.7%4.1%4.1%25.3% Station Service/Own Use 88 83 81 34 34 35 36 37 39 49 Street Lights 79 79 79 79 79 79 79 79 79 79 Losses 212 177 152 160 162 167 171 178 185 231 Total Generation (MWh)3,355 2,563 2,608 2,597 2,637 2,708 2,779 2,889 3,005 3,743 Loss %of Gen.*6.3%6.9%5.8%6.2%6.2%6.2%6.2%6.2%6.2%6.2% Peak Demand (kW)920 496 485 593 602 618 634 660 686 855 Loadfactor *41.6%59.0%61.4%50.0%50.0%50.0%50.0%50.0%50.0%50.0% 22 IPEC has indicated that it could potentially restructure rates to be community rather than total utility based.This would potentially allow for lower rates in Kake relative to IPEC rates if the KPI were constructed. Kake -Petersburg Intertie Study Update 6-8 Draft Report Power Supply Evaluation and Economic Analysis *Assumes interruptible sales will remain relatively constant in the near future but will increase to 2006 levels in 2015. *Increase in total sales over previous year. >Distribution losses and energy unaccounted for.Projected losses based on recent experience. *Ratio of average demand to peak demand on an annual basis.Projected loadfactor based on recent experience. Availability of Hydroelectric Generation Based on the foregoing projections of power requirements and the generating capabilities of the existing hydroelectric facilities,the net hydroelectric generation available for sale to Kake can be estimated.It is important to note that hydroelectric generation capability is shown as an annual average.Actual generation can vary significantly from year to year based on local precipitation and other factors. Tyee Lake Project The generating capability of the 22-MW Tyee Lake project is presently committed to Petersburg and Wrangell.The Swan-Tyee transmission Intertie,currently under construction,will provide Ketchikan with access to generation from the Tyee Lake project that is surplus to the needs of Petersburg and Wrangell.Generally,it has been estimated that under average water conditions, the annual energy generation capability of the project is about 128,000 MWh. Hydroelectric generation is highly variable from year to year depending on local precipitation and other environmental conditions.As previously indicated,the average annual estimated energy generation capability of the Tyee Lake project is 128,000 MWh.Under dry,low waterconditions”,the energy generation is estimated to be 112,700 MWh whereas it could be as high as 154,800 MWh. The following table summarizes the energy generation available from the Tyee Lake project assuming average annual energy generation of 128,000 MWh from the project. TABLE 6-5 Estimated Hydroelectric Energy Generation Available From the Tyee Lake Project -Medium Growth,Average Water (MWh) 2010 2011 2012 2013 2014 2019 Lake Tyee Generation *128,000 128,000 128,000 128,000 128,000 128,000 Energy Requirements Petersburg/Wrangell 67,520 69,090 70,660 71,730 71,760 75,220 Ketchikan 23,300 25,900 28,500 31,200 31,970 41,240 Net Energy Available *37,180 33,010 28,840 25,070 24,270 11,540 ?Assumed generation for purpose of this analysis.Actual generation will vary from year to year. 2 Based on medium growth scenario,see Tables 6-4 and 6-5.Assumes completion of Swan-Tyee Intertie in 2009. 3 Alternative energy generation estimates are typically derived using the lowest and highest measured streamflow data of record at the project location. Kake -Petersburg Intertie Study Update 6-9 Draft Report Power Supply Evaluation and Economic Analysis 3 Estimated annual generation from the Tyee Lake project available to Kake. As shown in the previous table,the net energy generation available from the Tyee Lake project in 2013 is 25,070 MWh assuming average water conditions and medium load growth in Petersburg,Wrangell and Ketchikan.This is more than enough energy to meet the projected energy requirement of 2,889 MWh in Kake in the same year.By 2019,available energy from Tyee Lake is estimated to drop to 11,540 MWh and,as loads continue to increase in Petersburg, Wrangell and Ketchikan,the available energy from Tyee Lake will continue to decline.Further, in dryer than average conditions,the available energy from Tyee Lake will be less than shown in Table 6-5,potentially by as much as 16,000 MWh in any particular year.If energy generation is not available from Tyee Lake,IPEC will need to use its diesel generators in Kake to supply the necessary power requirement or purchase power from other utilities.As loads continue to grow in the interconnected region,however,new hydroelectric or other generation facilities would need to be constructed.The cost of power from these new facilities will potentially be higher than the cost of power from the Tyee Lake project. It is also important to note that the estimated surplus energy capability of the Tyee Lake project is sufficient to supply the loads of potential mining loads in the area for a few years. Potential New Hydroelectric Generation Facilities A number of new hydroelectric projects have been studied that could serve the Petersburg, Wrangell,Ketchikan,and Kake areas.Costs of these projects,as well as other factors including location,generating capacity,interconnected loads and the availability of better alternatives have precluded development of these projects.The development of a transmission interconnection system could make development of some of these projects economically and technically feasible at some later date.Hydroelectric projects that have been identified,the community they are closest to,and their estimated capacity and annual energy generation,include the following: e Tyee Lake Third Turbine”*-Petersburg/Wrangell;11.5 MW,6,000 MWh annually e Cascade Creek Project”-Petersburg;70 MW;200,000 estimated MWh annually e Ruth Lake -Petersburg;20 MW,70,700 MWh annually e Scenery Lake -Petersburg;30 MW,128,700 MWh annually e Sunrise Lake -Wrangell;4 MW;12,200 MWh annually e Anita -Kunk Lake -Wrangell;8 MW,28,200 MWh annually e Virginia Lake -Wrangell;12 MW,42,700 MWh annually e Thoms Lake -Wrangell;7.3 MW,25,600 MWh annually e Whitman Lake -Ketchikan;4.6 MW,19,600 MWh annually e Connell Lake -Ketchikan;1.9 MW,11,640 MWh 24 A third turbine at the Tyee Lake project would not provide much additional annual energy generation.Rather, this turbine would allow for greater operational flexibility and greater capacity output at certain times.25 The Cascade Creek project,as proposed by Cascade Creek LLC,is one component of the larger Thomas Bay hydroelectric project identified by Hosey &Associates in a study for the City of Petersburg dated December 1985. The Cascade Creek project is the Swan Lake portion of the overall Thomas Bay potential development. Kake -Petersburg Intertie Study Update 6-10 Draft Report Power Supply Evaluation and Economic Analysis e Lake Grace”®-Ketchikan;diversion to Swan Lake project,72,200 MWh annually e Mahoney Lake -Ketchikan;9.6 MW,45,600 MWh annually e Triangle Lake”'-Metlakatla;3.9 MW,16,900 MWh annually Of the projects indicated in the preceding list,several are farther along in the development process than others.The City of Ketchikan is presently working to license the Whitman Lake project so that it can be designed and constructed.In the past five years,the Cape Fox Corporation has undertaken licensing and design activities with regard to the Mahoney Lake but has been unable to secure necessary power sales agreements to support further development of the project at the present time.Cascade Creek LLC is pursuing development of the 70-MW Cascade Creek project and has indicated an interest in marketing the power output of the project to Canadian interests.This would require development of significant new transmission lines interconnecting the TWP system to BC Hydro.The City of Petersburg,the City of Wrangell and Angoon have filed preliminary permit applications for the Ruth Lake project. Use of Oil-Fired Generating Facilities Although it has been indicated that only hydroelectric generation would be transmitted over the KPI,power generated at diesel power plants in Petersburg or Wrangell could be transmitted just as well.The use of diesel generators from outside Kake,however,would need to acknowledge the additional cost associated with transmission losses as well as the cost differential between surplus hydroelectric power and diesel generation.In some cases,it could be less costly to purchase out-of-area diesel generation than run local generators.This will need to be factored in to the contracts for power supply services. Economic Analysis of intertie Introduction and Assumptions An economic analysis has been conducted to determine if the benefits to be realized with the KPI are greater than the costs of operating the KPI and purchasing power from hydroelectric resources.Benefits will be achieved through the offset of diesel generation costs at Kake.Costs related to the KPI are direct costs of operations and maintenance (O&M),certain incremental administrative and general (A&G)costs of KWETICO,renewals and replacements (R&R)and the costs of purchasing power from SEAPA to serve Kake loads. In preparing this analysis,several assumptions have been made.The most significant of these assumptions are: 2°The Lake Grace project is located within the Misty Fjords National Monument and would require an act of Congress if a hydroelectric project were to be developed. 27 A relatively short overhead and submarine transmission system would be needed to interconnect the electric systems of Ketchikan and Metlakatla Power &Light. Kake -Petersburg Intertie Study Update 6-11 Draft Report Power Supply Evaluation and Economic Analysis e Capital costs of the KPI are to be grant funded meaning that there will be no capital recovery component associated with the KPI. e Base year (2009)delivered fuel prices are $3.25 per gallon in Kake decreasing by 10%in2010andincreasingby3%per year thereafter®.Since fuel prices are highly variable and subject to radical changes,the impacts of alternative fuel price assumptions have been considered in a sensitivity analysis. e O&M and A&G costs will escalate at the assumed annual inflation rate of 2.5%per year. e Existing generation capacity will be maintained for emergency backup in Kake. Resulting net O&M costs will be significantly lower than if the generating units were operated to supply full load. e KWETICO,the assumed owner of the KPI will contract with others to provide maintenance on the KPI systems.Administrative costs associated with ownership and operation of the KPI will be minimal. e Areserve fund will be established to collect monies for major maintenance and repairs in the future.The reserve fund will also serve as a self-insurance fund since transmission lines are generally not insurable. e The cost of purchased power from SEAPA will be inclusive of all transmission and delivery charges to the point of delivery,expected to be at the new switchyard interconnection point near Petersburg. e Energy losses over the KPI will be 2%of the transmitted power to Kake,based on engineering estimates. The economic analysis estimates the power production costs for Kake that will be offset if the KPI is constructed.These "benefits”are then compared to the costs of power purchases and KPI operation to determine if the benefits of the KPI exceed the costs.To be economically feasible, it would generally be necessary to show that the KPI will need provide positive benefits on its own,i.e.the costs of the KPI will be borne entirely by the users of the line and not melded in with other transmission lines.To protect the interests of electric consumers,the total costs incurred by IPEC must be lower with the KPI than without to show economic justification for the KPI. It should be noted that costs of operation that are the same with or without the KPI are not included in the analysis.Examples of these costs are capital recovery on existing generation plant and fixed O&M charges. Projected Cost of Existing Diesel Generation IPEC owns and operates diesel generators in Kake to supply the full power supply requirement of the local community.Total installed generation capacity is 2,585 kW in Kake supplied with 28 IPEC's actual cost of generation fuel for its Kake operation averaged approximately $3.79 per gallon in 2008 and $2.61 per gallon in 2009.The price of fuel purchased in December 2008 was $3.28 per gallon while it was $3.05 per gallon in November 2009,having risen somewhat from lower prices earlier in 2009. Kake -Petersburg Intertie Study Update 6-12 Draft Report Power Supply Evaluation and Economic Analysis three generating units.The primary cost in operating the diesel generators is the cost of fuel, which represented well over half the total power production costs in IPEC's system over the past three years. Without the need to operate their diesel generators except in emergency situations,IPEC should be able to reduce the O&M costs associated with the diesel generating units.The need for maintenance activities,lubricants and other consumables will be substantially reduced and maintenance and operating personnel can be assigned to other activities.Based on a review ofIPEC's production costs,it is estimated that the variable O&M cost”?is about 3.0 cents per kWh. In addition to the offset of fuel and O&M costs,IPEC will benefit from the extension in operating life of its existing generators in Kake if the KPI is constructed.Without the KPI, continued regular operation of the existing generators would require their eventual replacement or major overhaul.For the purpose of this analysis,it has been assumed that without the KPI, IPEC will install a 1,000-kW replacement generator in 2015 and another 1,000-kW replacement generator in 2020 at a present day cost of $400,000 per unit.With the KPI,the cost of these new generators would be avoided. The cost of generation fuel is a critical factor in the cost of power production for IPEC.Fuel prices in Kake in December 2008 were reported at $3.28 per gallon,somewhat lower than the average fuel price of $3.79 per gallon incurred in 2008.Fuel prices dropped in early 2009 and averaged $2.61 per gallon during 2009.The price of fuel purchased in November 2009 was $3.05,showing an increase from prices earlier in the year.Fuel prices are highly variable and it is not known if they will remain at current levels in the future.Consequently,for the purpose of this analysis,the price of diesel fuel has been assumed to be approximately $2.95 per gallon in Kake in 2010,and increased by 3.0%per year thereafter.This long-term increase assumption allows for the increase in fuel prices at a rate of 0.5%per year over the assumed rate of general inflation of 2.5%per year. The following tables show the projected variable cost of power production over the next ten years at Kake,based on continued use of oil-fired generation.It is important to note that the variable cost of production is not the full cost of power production,but rather is the cost that could be directly avoided if the KPI were constructed. ?°Power production costs are often characterized as variable,those costs that are directly associated with each unit of operation,and fixed,costs that are not avoidable.The costs of operations personnel are considered fixed for IPEC's Kake service area. Kake -Petersburg Intertie Study Update 6-13 Draft Report Power Supply Evaluation and Economic Analysis TABLE 6-6 Projected Variable Cost of Power Production with Diesel Generation IPEC -Kake Service Area 2009 2010 2011 2012 2013 2014 2015 Energy Requirements (MWh)*2,597 2,637 2,708 2,779 2,889 3,005 3,743 Fuel Price ($/gallon);$325 $293 $3.01 $3.10 $320 $3.29 $3.39 Power Production Cost ($000) Fuel Cost *$616 $563 $596 $629 §$674 §$722 $926 Variable O&M 4 78 81 85 90 96 102 130 Subtotal $694 $644 §681 §$719 §$770 $824 $1,056 Replacement Cost 5 :::--:35 Total Production Cost $694 $644 S$681 $719 «$770 $824 $1,091 (¢/kWh)26.7 24.4 25.1 25.9 26.7 27.4 29.1 *See Table 6-4. 2 assumes decrease in fuel prices of 10%in 2010 and annual increases of 3%thereafter. 3 Based on average fuel usage of 13.7 kWh per gallon. "Estimated variable O&M cost of 3.0 cents per kWh based on IPEC identified production cost items of miscellaneous power generation expenses,generator overhaul and maintenance expenses,maintenance supervision and maintenance salaries and miscellaneous.Does not include generation salaries and costs associated with maintenance of structures.Assumed to increase annually at the assumed rate of general inflation. 5 A 1,000 kW diesel generator is assumed to be added as a replacement unit in Kake in 2015. KPI Annual Costs A number of regular maintenance activities will be needed to inspect the KPI condition and make necessary repairs.Generally,these activities will be relatively minor,particularly in the early years of KPI operation.Structures,guys,insulators,conductors and submarine cable terminations will need to be inspected visually and a program to regularly clear trees and brush from the right of way will need to be established.It is expected that KWETICO,as owner of the KPI,will contract out the regular inspection and maintenance activities to local utilities or other providers of this kind of service. The final design of the KPI is expected to include relatively short "ruling spans”which should reduce maintenance costs and the likelihood of damage due to various environmental factors. Further,a significant portion of the KPI is expected to be located adjacent to USFS roads which will make access much easier and keep maintenance costs lower than would be experienced if the KPI were located in remote locations.Much of the route of the KPI will include a full service access road to provide regular access for maintenance. All of the planned,regular maintenance activities for the KPI will be scheduled during the summer months when access to the line is not restricted by weather conditions.Periodically, access to the KPI will be needed in the winter to make repairs to the line necessitated by damage caused by falling trees or other factors.If the KPI were located adjacent to roads maintained all year,winter time access will be relatively straightforward.Indications from local residents would indicate,however,that snow cover in the general vicinity of the proposed KPI routes will Kake -Petersburg Intertie Study Update 6-14 Draft Report Power Supply Evaluation and Economic Analysis not generally be a significant deterrent to winter access,even on the KPI access road which probably not be plowed in the winter.Consequently,the annual cost of maintenance for the KPI is not expected to be noticeably different for the KPI located adjacent to year around maintained roads or along the planned maintenance road. Depending on the availability of maintenance equipment in Kake,it may be necessary to purchase certain maintenance vehicles and equipment for workers to use when maintenance is needed.Included in this equipment inventory would be two all-terrain vehicles,two trailers,two flatbed trucks,and two maintenance buildings.The estimated cost of this equipment is $975,000 and one set would be stationed on the Lindenberg Peninsula while the other is stationed in Kake. Arrangements with IPEC may make it possible for KWETICO to rent necessary equipment from IPEC as available. Operations and Maintenance Costs Following is a proposed operation and maintenance (O&M)program for the KPI.The cost estimates assumes a standalone O&M contract for the KPI.The costs assume that the O&M contract will be multi-year contracts (2 -3 years minimum)and intermittent line outages will be made available in the spring or summer to coincide with inspection periods.The primary O&M activities are: Visual (on ground)Inspections Helicopter Inspections Thermographic Survey Climbing Inspections Right-Of-Way Maintenance Repair of defects,if noted during any of the above inspections,is not included in the routine yearly maintenance program but would be corrected based on either cost-plus or a negotiated price with the contractor.A contingency is included to cover these costs.Typical defects include:damaged insulators,loose hardware,bent or pulled anchor rods,erosion,damaged conductors,etc. Access to the Northern Route is proposed to be available by the construction of a pioneer road or alternatively the permanent road proposed by DOTPF.The Center-South route will also have access roads;however a short section (3.5 miles)is isolated by water and will require boat or helicopter for access.It may be advantageous to keep a 4-wheel drive vehicle in this section;it could hold minor repair material and provide transportation for workers.Major repairs would still require barges to transport materials and heavy duty line construction equipment. Annual Inspection and Maintenance Program Visual (on ground)Inspection The predominate activity in the O&M program is the regular visual inspection of the line.The visual inspections would be completed by journey line workers and would include minor Kake -Petersburg Intertie Study Update 6-15 Draft Report Power Supply Evaluation and Economic Analysis maintenance tasks accessible from the ground,such as tightening loose guys.Binoculars will be used to inspect the poles,insulators,and appurtenances not accessible from the ground. The proposed O&M program is based on providing a visual (on ground)inspection of 150 structure sites each year.The 150 sites would be selected to generally include each structure type on the line.The 150-site rotation combined with the proposed climbing inspection (of 25 sites each year)would result in all structure types undergoing a detailed inspection (climbing or visual)every 6 years. Climbing Inspections Included in the O&M program would be a climbing inspection of 25 structures each year.The sites would be selected to generally include a structure from each structure type on the line.The site rotation would result in all structure types undergoing a climbing inspection every year and all structures on the line being climbed once every 40 years.Climbing inspections will be undertaken while the line is de-energized. Climbing inspections will include a thorough visual inspection of the structure and all appurtenances.The climbing inspection team will also be required to perform routine maintenance.The inspection will require observing and recording the condition of the structure including:guys,anchors,poles,insulators,insulator hardware,conductor attachment hardware and dampers.The observations will include checking the condition of all bolts,nuts and cotter keys. The inspection program will need to carefully select the structures to be climbed based on the previous year's findings. Helicopter and Thermographic Survey A helicopter review of the right-of-way and the line should be completed occasionally since certain items will be easier to spot from the air than ground.The survey should be completed by an experienced line-worker and should include a review of the conductor,insulators,structures, structure sites,and right-of-way conditions.A thermographic inspection could be completed with the helicopter inspection. After the line is energized and placed under load,a thermographic survey of the line and all connections on the line should be performed.A thermographic survey uses the infrared light spectrum (heat),to create photographs or digital records.This tool identifies loose hardware, damaged wire,loose jumpers,etc.which tend to heat above adjacent system ambient temperatures.This survey can easily be preformed from a helicopter.The helicopter and thermographic survey is proposed to be preformed every five years. Right-Of-Way Maintenance Second growth vegetation grows rapidly in Southeast Alaska.Alders,prevalent in the area,have been known to grow five feet or more per year.Right-of-way maintenance will be minimal the Kake -Petersburg Intertie Study Update 6-16 Draft Report -_- Power Supply Evaluation and Economic Analysis first five to ten years,primarily dealing with tree falls and erosion control.By year five,routine right-of-way maintenance will be needed annually. Spare Materials Most materials used on the KPI will be long-delivery items.It has been assumed,as part of the construction contract,sufficient spare materials for routine maintenance and one or two small non-routine failures will be purchased and stockpiled.These materials will include spare wood poles (appropriate sizes),conductor,hardware,insulators,compression dead-end,guy wire,guy materials,dampers,armor rods,anchor rods and other minor materials.Periodically the spare materials will be replenished. Renewal and Replacement Due to Non-Routine Failures In addition to routine maintenance,certain non-routine failures can occur periodically.Based on the experience of other transmission lines in the area,these failures could include landslides, avalanches,and tree strikes.The costs of repairing damages caused by these events can vary greatly depending on a number of factors. Landslides and avalanches occur frequently in Southeast Alaska.Support structures (pole line) are not designed to withstand forces caused by these events.The routing of the KPI provides the primary avoidance mechanism for landslides and avalanche.Where the KPI is routed on steep slopes,the probability of a tree strike is also increased.Trees that fall may roll downhill and hit poles or guy wires and would likely do severe damage.Mid-span conductor hits would do less damage.A catastrophic failure should be expected every three to five years. The estimated costs of maintaining the KPI are expected to increase somewhat over time as clearing requirements increase and the system gets older.The estimated costs of O&M for the KPI are provided in Table 6-7.Basic assumptions used in the development of the O&M estimate include the following: e The existing Forest Service roads will be maintained by the USFS.For the Northern route alternative,DOTPF will maintain the year round road between Kake and Petersburg. e The values represented for "Tree Trimming”are the costs to remove and manage the danger trees that are expected to be an issue in the early years.In the later years management of growth in the vicinity of the KPI will be the focus. e IPEC has standby generation in Kake which should be maintained to support scheduled and unscheduled circuit outages.The standby generation will also minimize the need for costly outage restoration in bad weather or emergency response and increase reliability. e The road network will permit access to most of the structures year around. e The proposed design of the KPI has focused on minimizing O&M costs by providing maintenance personnel the use of a road network that will allow access to the KPI.The KPI has been located adjacent or close to the road network to facilitate ease of construction and access for O&M. Kake -Petersburg Intertie Study Update 6-17 Draft Report Power Supply Evaluation and Economic Analysis TABLE 6-7 Kake -Petersburg Intertie Estimated Annual O&M Costs Years 1-5 Years 6-10 Years 11-15 Years 16-20 Maintenance of Equipment $30,000 $35,000 §$45,000 §$60,000 Tree Trimming 55,000 60,000 70,000 80,000 Overhead Line Inspections 20,000 25,000 30,000 35,000 Regular Repairs/Replacements 25,000 35,000 45,000 45,000 Submarine Terminal Inspections 10,000 10,000 10,000 10,000 Switchyard Maintenance 10,000 10,000 10,000 10,000 Miscellaneous 20,000 20,000 20,000 20,000 Total $170,000 $195,000 $230,000 $260,000 Unit Cost (¢/kWh)*43 49 5.8 6.5 *Unit cost of O&M assuming energy sales of 4,000 MWh to Kake. .Administrative Costs KWETICO,the presumed owner of the KPI will incur certain expenses related to policy oversight,accounting,general administration and management.These costs would be expected to be paid by all users of the transmission systems.The following table provides the estimated administrative costs for the KPI based on the current budget for KWETICO associated with the Juneau-Greens Creek transmission line. TABLE 6-8 Estimated Annual KPI Administrative Costs ' Annual USFS Road Easement Fee Submarine Cable Easement Fee Directors and Officers Liability Insurance 7 General Liability Insurance 2 Accounting and Audit Expenses ? Legal Fees 2 Miscellaneous Contingencies Total Unit Cost (¢/kWh)? 'Based on KWETICO currently projected costs. $ 10,000 10,000 10,000 4,500 5,000 5,000 5,000 10,000 59,500 1.49 ?Assumes cost sharing with Juneau-Greens Creek transmission line. 3 Unit cost assuming 4,000 MWh sales to Kake. Kake -Petersburg Intertie Study Update 6-18 Draft Report Power Supply Evaluation and Economic Analysis O&M and administrative costs are expected to be recovered through charges to IPEC and to other users of the KPI that are directly proportional to the power transmitted.The charges could be included as part of the wholesale cost of power.In addition to O&M and administrative costs, a charge related to the accrual of reserve funds to pay for major repairs to the KPI should be included in the costs charged to IPEC.These costs are not expected to be significant in the early years of KPI operation and are in lieu of a depreciation charge.The reserve fund charge is also a means for "self-insuring”the KPI since transmission lines are generally not insurable. As a basis for the amount of this repair and replacement (R&R)reserve that should be established,the estimated cost of a major repair or replacement of a significant system component can be used.It can also be reasonably assumed that with a new system,the timing of such a major repair or replacement would be several years in the future.For the KPI,a reserve requirement of $1.0 million has been estimated based on the cost of a major submarine cable repair.Annual deposits of $54,000 for the KPI would be needed to build up the reserve fund balance to these amounts within 15 years with accrued interest at 3%per year.If the horizontal directional bore option can be employed,the amount needed for the R&R reserve fund could be less. Cost of Purchased Power With the KPI,power is expected to be purchased from the Southeast Alaska Power Agency (SEAPA)by IPEC for use in Kake.At the present time,the SEAPA firm power sales rate to its members is 6.8 cents per kWh.This rate could decrease somewhat in the future but is expected to remain relatively constant for the next few years.Discussions with SEAPA management indicate that power could possibly be sold to IPEC at a rate that is comparable to the existing firm power sales rate.A major consideration,however,are the tax implications to the SEAPA if power is sold to entities that are not municipally-owned utilities.If sales of power to IPEC were to negatively affect the interest rate benefits presently realized by the SEAPA,the power sales rate to IPEC would potentially need to be higher than the current firm power sales rate. There is some possibility that IPEC could purchase power at an interruptible power sales ratebecauseofthepossibilityofinterruptioninavailability*°,SEAPA has sold power to certain customers on an interruptible basis in the past at lower rates than the firm power sales rate.For purposes of this study,it has been assumed that power can be purchased from the SEAPA by IPEC at 6.8 cents per kWh through the projection period.This cost would include deliverychargestoPetersburg'! >°As indicated previously and shown in Table 3-8,it is expected that the full power requirement of Kake can regularly be supplied from the Tyee Lake project for several years to come,but cannot be fully guaranteed.3!Energy losses from Tyee Lake to the KPI tap point near Petersburg are also expected to be effectively included in the power sales rate.Since the metering point for power sales to Kake is to be at the tap point,energy losses between the tap point and Kake will need to be included as a cost to IPEC. Kake -Petersburg Intertie Study Update 6-19 Draft Report Power Supply Evaluation and Economic Analysis Estimated Savings with the KPI Based on the foregoing,the cost of power to IPEC with the KPI has been projected.This cost includes the cost of purchased power and the costs of KPI O&M and administration.The costs with the KPI have then been compared to the costs without the KPI to determine the net savings to IPEC associated with the KPI.The cost of power with the KPI and the estimated savings in Kake are shown on an annual basis in the following tables assuming that the KPI is constructed and begins operation in 2013. TABLE 6-9 Projected Cost of Power and Savings with the KPI IPEC -Kake Service Area 2013 2014 2015 2016 2017 2018 Energy Requirements (MWh)1 2,889 3,005 3,743 3,864 3,992 4,097 Energy Purchased (MWh)2,947 3,065 3,818 3,942 4,072 4,179 Purchased Power Price (¢/kWh)®6.8 6.8 6.8 6.8 6.8 6.8 Annual Costs with KPI ($000) Purchased Power *$196 $204 $255 $263 $271 $279 KPI Operation &Maintenance 5 153 157 161 165 169 278 KPI Admin &General ®66 67 69 71 72 74 KPI Renewals &Repalcements '54 54 54 54 54 54 Total Annual Costs with KPI $469 $482 $539 $553 $566 $685 Unit Cost (¢/kWh)8 16.2 16.0 14.4 14.3 14.2 16.7 Savings with KPI ($000)9 S 301 $342 $552 $605 $663 $612 Savings (¢/kWh)*°10.4 11.4 14.7 15.7 16.6 14.9 NPV Savings (2013-2032)($000)$9,927 Discount Rate 4.0% *See Table 6-4. 2 Includes estimated transmission losses of 2%between Petersburg and Kake. ?Estimated price of power purchased from the Southeast Alaska Power Agency. :Estimated cost of power purchased from the Southeast Alaska Power Agency.KPI O&M cost as shown in Table 6-7 fully allocated to IPEC.Assumes O&M costs increase annually at the assumed rate of general inflation. KP!A&G cost as shown in Table 6-8 fully allocated to IPEC.Assumes A&G costs increase annually at the assumed rate of general inflation. Annual deposit to KP!R&R fund to establish a $1.0 million balance in 15 years with accrued interest at an assumed 3%interest rate.Cost is fully allocated to IPEC. 8 Total Annual Costs divided by Total!Energy Requirement. ®Total Production Cost for the diesel generation case (see Table 6-6)less Total Annual Costs with KPI. 1°Savings with KPI divided by Total Energy Requirements. Kake -Petersburg Intertie Study Update 6-20 Draft Report Power Supply Evaluation and Economic Analysis As shown in Table 6-9,the estimated savings to IPEC in 2013,the first year assumed for KPI operation is $301,000.Table 6-9 also shows that the average charge for electric service in Kakecouldpotentiallybereducedby10.4 cents per kWh with the KPI*?.Annual savings with the KPI are expected to increase each year primarily due to assumed increases in the cost of diesel fuel that the KPI will offset.In 2022,the projected savings are 19.4 cents per kWh.Over the first twenty years of KPI operation,2013-2032,the net present value of savings to IPEC with the KPIis$9,927,000,assuming a 4%discount rate*?. If other utilities or power producers such as Cascade Creek LLC,were to use the KPI,the cost to IPEC could be reduced significantly.If costs are allocated proportionate to total kWh transmitted over the KPI and the Cascade Creek project were transmitting its full output over the KPI,Cascade Creek would be obligated to pay the vast majority of the annual operating costs for the KPI.Additionally,if the KPI were to be owned and operated by SEAPA,the operating costs of the KPI could potentially be bundled into SEAPA's operating costs.If all the costs of operating and maintaining the KPI were paid by others,the estimated net present value savings to IPEC with the KPI over the first 20 years of KPI operation would be $15,045,000.This level of benefits is 52%greater than the base case. A significant benefit to IPEC with the KPI will be the ability to establish economic incentive rates for new large commercial/industrial electric consumers.As long as regular retail energy sales remain relatively stable in Kake,the fixed costs of IPEC's distribution system and the KPI will be recovered through normal rates.Consequently,an economic incentive rate based on the incremental cost of purchased power (6.8 cents per kWh in the above table)plus a nominalmargincouldbeestablished*™*.This rate would need to be negotiated on a case by case basis and should have a time limit to it (e.g.5-10 years),but could be used to attract new commercial activity to the Kake area. Economic incentive rates have been used in recent years by Sitka and other utilities.Sitka has surplus hydroelectric generation capability and has recently implemented an interruptible energy sales rate to commercial customers to encourage greater electricity sales.The interruptible energy sales rate is less than the normal commercial energy rate. The savings estimated for IPEC's Kake service areas could,but would not necessarily be transferred directly through to a reduction in rates for electric service in Kake.IPEC presentlychargesthesameratesforallofitsserviceareas*”based on the combined costs of the entire system.The estimation of IPEC's power rates is beyond the scope of this study.The State's Power Cost Equalization program would also affect how much of the Intertie provided savings 32 Due to the effects of the State Power Cost Equalization program,any savings in IPEC's cost of power due to the KPI would not necessarily show up in reductions in the effective charges for residential electric service.Rather,the amount of subsidy from PCE provided to IPEC would be reduced and commercial rates could be lowered. 33 The discount rate for IPEC is based on IPEC's assumed interest earnings rate.The net present value savings is calculated to 2010. 4 The Southeast Alaska Power Agency would also need to be involved in any discussions of additional energy purchases for economic incentive purposes if a special interruptible energy purchase rate were to be pursued.35 IPEC has indicated that it may need to establish rates in each service area based on the cost of service in the respective areas,at the request of the Alaska Energy Authority. Kake -Petersburg Intertie Study Update 6-21 Draft Report Power Supply Evaluation and Economic Analysis would be realized by residential consumers in Kake**.The PCE program is funded each year by the State legislature and its funding magnitude as well as its continuation is uncertain. 3°Essentially,the PCE program provides a subsidy to residential electric consumers.The amount of the subsidy is based on the local cost of power production.According to the program formula,if the cost of power production decreases,as it does when fuel prices drop,the magnitude of the subsidy would also decrease.The amount of the subsidy is also a function of the legislatively approved contribution to the program each year. Kake -Petersburg Intertie Study Update 6-22 Draft Report Section 7 Other Factors Integration With Southeast Alaska Intertie System The KPI is an important part of the previously defined Southeast Alaska Intertie System. Initially,the KPI will serve as a component of the southern Southeast Alaska Intertie System that will interconnect the communities of Ketchikan,Petersburg,Wrangell,Kake and Metlakatla. The KPI will offer the potential of providing transmission service to mining loads on Woewodski Island.Eventually,the KPI will serve as a vital link in the transmission interconnection to Sitka and eventually to Juneau.The connection to Sitka could offer additional hydroelectric resources to the southern Southeast Alaska communities. Kake -Petersburg Intertie Study Update 7-1 Draft Report