Loading...
HomeMy WebLinkAboutEnergy Projects 1984 Appendix G-2 AkiakBethel Area Power Plan Feasibility Assessment APPENDIX G -2 AKIAK COMMUNITY REPORT DRAFT Prepared for the Alaska Power Authority by . Harza Engineering Company and Darbyshire &Associates Draft April 1984 TABLE OF CONTENTS Introduction Background Population Housing Current Economic Activity Subsistence Cash Economy Future Economic Activity Current Energy Consumption Total Energy Electric Generation Future Energy Demand Formulation of the Supply Plans Economic Evaluation Base Case Supply Plan Optimized Base Case Supply Plan Thermal Supply Plans Hydropower Supply Plans Fuel Cell Supply Plans Sensitivity Analysis Regional Summary Environmental Evaluation Table No. II-10 LIST OF TABLES Title Akiak Household Size Akiak Employment and Income Akiak Projected Annual Earnings Akiak 1981 Fuel Prices and Consumption Existing Generating Facilities Akiak Energy Demand Forecast Most Likely Scenario,Present Worth and Benefit-Cost Ratio of the Supply Plans Most Likely Scenario,Sensitivity Analysis Using 0%Real Fuel Escalation Sensitivity Analysis,Present Worth of Supply Plans Ranking of Energy Supply Plans -ii- II-10 II-1l II-15 II-18 II-19 II-21 Exhibit No. 1 2 3 4 LIST OF EXHIBITS Community Location Map Akiak Population 1981 Economic and Energy Profile,Akiak Economic and Energy Projections,Akiak 1981 Primary Energy Consumption,Akiak 1981 Energy Balance,Akiak Electrical Distribution System -iii- AKIAK COMMUNITY REPORT Introduction The Bethel Area Power Plan Feasibility Assessment has been performed by Harza Engineering Company under contract to the Alaska Power Authority.The assessment was done to determine the best alternative(s)to meet the future electric generation and space heating needs of the Bethel region.The community of Akiak is within the study area,and is the subject of this Appendix.Detailed information on the overall regional assess- ment is contained in the Regional Report. The community report for Akiak is intended to be an infor- mational and working document for the residents of the commun- ity.Much data has been collected on the community's back- ground,population,housing,and its current economic and energy profiles.Existing electrical generation and transmission faci- lities,as well as residential and commercial space heating needs,are documented in this report.Projections of future energy needs,based on future population,housing,and economic conditions,have been made.These projections have been used to develop alternative plans for meeting the electrical energy and space-heating needs of the region through year 2002,and those of Akiak in particular.These alternative plans have been analyzed from both an economic and environmental standpoint. This community report for Akiak is submitted as a draft for review and comment by the residents.The Alaska Power Authority welcomes your comments and questions. Background Akiak is located in the Yukon-Kuskokwim Lowland on the left bank of the Kuskokwim River,35 miles upriver from Bethel (Exhi- bit 1).The village is located at the lower end of the bottom- land spruce-poplar forest belt that follows the course of the Kuskokwim River and its main tributaries.The remaining vegeta- tion is characterized as wet tundra.Standing water is present throughout the summer,which makes overland travel extremely difficult. Access to Akiak is principally by year-round charter air service and limited summer lighterage service from Bethel.There is no road system in the area.Overland movement is limited primarily to the winter season.The river is used as a roadway for taxis and truck freight during the winter season after the ice has thickened.Fuel oil and other freight items are trucked over this ice highway on an "as-necessary"basis to meet late- winter shortages.Snow machines provide the most competent mode of travel in winter. II-1 "Akiak,"an Eskimo word,translates into "crossing over"in English.The village was so named because "[t]he natives cross[{ed]over to the Yukon in winter from this village" (G.L.Harrington,USGS,1919).Owing to silting action of the Kuskokwim River at Akiak,the village losts its prominence as the terminus for ocean-going vessels on the Kuskokwim.Bethel superseded Akiak as the end of the transportation route.A sawmill and hospital which were in the community no longer exist.A post office was established in 1916,and in 1974 the village became incorporated. Beside the municipal government,Akiak's Native population is represented by an IRA Council which is recognized by the federal government as the offical tribal governing body of the village.The IRA Council form of government was established under the Indian Reorganization Act of 1934.It is eligible to participate in some state and federal programs,and has received benefits under the Indian Self Determination Act,the State and Local Fiscal Assistance Act,the Housing and Community Develop- ment Act,the Comprehensive Employment Training Act (CETA),and the Indian Child Welfare Act. Another local organization,the village corporation,al- though not a government entity,exercises a variety of functions generally exercised by governments.The local village corpora- tion,Kukarmuit Corporation,was created under the Alaska Native Claims Settlement Act to receive and manage lands conveyed to it under the act.It is entitled to receive title to the surface estate of 115,200 acres of land.To date,no lands have been transferred to the corporation by the Bureau of Land Manage- ment. In conjunction with this study,a public meeting was held in Akiak in April,1982.Village residents and officials were invited to attend. Population As shown on Exhibit 2,the population decreased from 228 in 1930 to 168 in 1950,and remained at about the same level until 1970.The 1980 Census determined that 198 people reside in Akiak,an increase of about 15 percent over the 1970 Census. The racial composition has changed slightly from about 99 percent Alaskan Native in 1970 to about 96 percent by 1980.The age characteristics of the population have also changed.In 1970,the number of young people was high,and the average age was about 17.Since then,a significant number of young people apparently left the region in order to find jobs or to pursue their education.In 1980,the average age was about 23. II-2 Three scenarios of population projections are also presented in Exhibit 2.These projections were developed in conjunction with the three scenarios of economic projections which are presented in the following pages.The projected annual growth rates are a combined product of historical trends, actual rate of natural increase,potential economic growth,and immigration or emigration.The projections also reflect a general decline of state population growth rates predicted by the U.S.Department of Commerce.In year 2002,the population is expected to be between 226 and 267 persons. Housing According to the 1980 Census,the village had 38 wood-frame homes which housed wood stoves for cooking and heating.Thirty- six were occupied.There were 5.5 persons per home.Since this census information was gathered,approximately four new homes have been added to the housing stock of the community.HUD plans to advertise for bids for the construction of 24 additional homes in the community to be built in 1982-83.There is no piped water system in this community;residents utilize individual wells and the river. The average floor space of the most recently built homes (HUD)are approximately 1200 square feet,while the older struc- tures contain roughly half of this floor area.Whereas the older homes are less well insulated,they are often better built and better sited away from wind exposure and snow drifting than the newer homes. The future housing stock will play an important role in determining future residential energy demands.The average number of persons per housing unit decreased from about 6.6 in 1970 to 5.5 in 1980,The improved household income and the supply of subsidized housing units were the major factors for this decline.These factors are expected to continue to reduce the average household size.However,because of the reductions in subsidized programs,the household size is expected to de- crease at a lower rate.As shown in Table II-l,the average household size is expected to vary between 4.0 and 4.5 by 2002, II-3 Table II-1 AKIAK HOUSEHOLD SIZE Energy Demand Projections Year Low Most-Likely High 1980 (U.S.Census)N/A 5.5 N/A 1987 5.2 5.1 5.0 1992 5.0 4.7 4.6 2002 4.5 4.0 3.5 Current Economic Activity This section describes the current village economy,both in its subsistence and cash forms.This assessment will serve as a basis for the economic projections. Subsistence Residents of Akiak depend on the environment in large part for subsistence.Subsistence can be defined as obtaining food, fiber,and shelter from the surrounding environment.Subsis- tence activities are pursued by a majority of the community's residents.A recent survey done in the Bethel region estimates that approximately one-third of the residents surveyed obtained one-half or more of their foodstuffs by engaging in such subsis-- tence activities as fishing,berrypicking,and collecting game- birds along the sloughs and on the swampy tundra.It is also estimated that the remaining two-third collects about one-fourth of their needs. Residents rely on subsistence activities for a number of reasons:it is the traditional method of provision passed to the present generation by its forefathers;in time of high shipping and transportation costs,it offers savings over the purchase of costly foodstuffs;and it provides a fruitful form of recreation.Dog,king,and silver salmon,as well as ling cod,shellfish,whitefish,and blackfish,provide food for many residents of Akiak.Residents also hunt moose,bear,beaver, mink,rabbit,ptarmigan,duck,and geese. An estimate of the equivalent income obtained from subsis- tence activities can be derived by assigning that portion of the typical household budget that is replaced by these subsistence items.Using the figures developed for the Bethel region and assuming a typical household budget of about $10,000,the total cash value of these activities can be estimated at about $120,000 annually. II-4 Cash Economy Cash employment in Akiak exists in forms which are similar to other outlying village economies in Alaska.Typically most jobs exist with the city government,school,store,health clinic,and the post office.Occasionally a construction pro- ject,such as the upcomming housing project to build 30 new homes and the building of a school warehouse in summer 1982, will provide temporary jobs for village residents.The Public Health Service plans to dig wells and install septic tanks for the HUD houses with local help.Some residents relocate on a seasonal basis to Bristol Bay canneries and to Bethel for con- struction work. Exhibit 3 shows the 1981 economic and energy profile for Akiak.Exhibit 3 corresponds to the forecasting model output for Akiak as analyzed in this study.The forecasting model is described in Appendix A.In Exhibit 3,total annual income or earnings,in 1981 dollars,are first presented for each economic activity,followed by the corresponding number of average annual employment.The remaining columns present the end-use energy consumption for each activity.The column entitled "Electrici- ty"corresponds to the total electricity demand,which is the sum of last column "Light and Electric Appliances"consumption and the electricity consumption used in "Cooking,Space Heating, and Water Heating".For convenience,all consumption data are in Million Btu.The electric energy demand can be translated into kilowatt-hours by dividing the consumption in Btu by 3,413 (Btu per kilowatt-hour).The lower section of Exhibit 3 pre- sents the residential sector with population,average household size,total number of households,average energy consumption per household,and end-use demand.The last line summarizes the total demand from the commercial,government and residential sectors. Table II-2 below summarizes the 1981 average monthly em- ployment and annual income by sector that are typically found in a village the size of Akiak.It should be noted that the num- bers listed for each sector do not necessarily indicate full- time employment.More than one of these positions may be held by one person simultaneously or by the same person at different times of the year. II-5 Table II-2 AKIAK EMPLOYMENT AND INCOME Average Monthly Annual Economic Activity Employment Earnings (1981 $) Renewable Resource Harvesting 3 $40,000 Mining and Exploration 0 -0- Construction 18 218,000 Household Manufacturing 1 4,000 Transportation 1 9,000 Wholesale,Dist.0 4,000 Comm.and Utilities 2 29,000 Trade and Private Services 6 70,000 Finance and Real Estate 2 25,000 Non-Profit Organization 1 14,000 Local and Regional Government 26 430,000 State Agencies/Services 1 8,000 Federal Agencies/Services 2 30,000 Transfer Payments N/A 409,000 TOTAL $1,290,000 As shown in Table II-2,the primary sources of income to the village are local and regional government,transfer pay- ments,construction,trade and private services,and renewable resource harvesting.These and other income sources are described below. Local and Regional Government.The village school system provides the largest number of cash-earning positions to Akiak residents.Employment positions associated with the state-run Lower Kuskokwim School District are:principal teacher,certi- fied teachers,substitute teachers,bilingual teachers,instruc-- tional aides,clerk/typists,community educational coordinators, librarians,pre-school teachers,and athletic directors.Sup- port positions that exist in the school are cooks,cook's helper,school maintenance and school custodian. Positions with the village government take the following form:fee agents,bookkeepers,city administrators,city clerks,city maintenance,city custodian,city recreation director,village public safety officer,village patrolman,IRA Council administrator. II-6 Transfer Payments.Non-employment forms of cash flow exist as transfer payments.Transfer payments are made directly to a household in two forms - cash and/or goods.Cash payments are made through social security,general welfare (SSI,Old Age, Blind,AFCD,VA,food stamps,etc.),home mortgage subsidies, rental subsidies,and home energy and fuel purchase subsidies. A major subsidy is the state's Power Cost Assistance Program. Construction.Construction projects both in Akiak and throughout the region provide employment opportunities that typically represent the largest private cash-earning potential locally.The upcoming housing project and the building of a school warehouse in summer 1982 will provide temporary jobs for village residents. Trade and Private Services.Retail trade activities pro- vide full-time managerial,clerical,and stock room positions. A village corporation owned and operated store exists,together with other privately owned village stores.Private services are provided as well as small variety and novelty shops and small engine dealers and service. Renewable Resource Harvesting.Positions under this cate- gory include trapping,firewood gathering,fishing,and serving as guides in fishing,hunting,and excursion trips.The most cash-rewarding activity in this industry is commercial fishing. Other Sources.The remaining income sources listed in Table II-2 make up only a minor part of the total village in- come.Federal agency services,finance and real estate,and transportation services represent the largest income sources of this group. Future Economic Activity Future energy demand will depend upon the changes in the economy and the purchasing ability of the households.To reflect the potential changes over the next twenty years,three levels of expected change (most likely,low and high)were developed. The results of the economic projections for the years 1987, 1992,and 2002 are presented on Exhibit 4.Exhibit 4 is organized as described earlier for Exhibit 3.Table II-3 sum- marizes the expected range of future economic activity.Total annual earnings,in constant 1981 dollars,are shown for the three scenarios.The difference between the low and high pro- jections represents the degree of confidence in projecting the future economic course of Akiak. II-7 Table II-3 AKIAK PROJECTED ANNUAL EARNINGS (Constant 1981 Dollars) Projections Year Z Low Most-Likely High 1981 (Surveyed)N/A $1,290,000 N/A 1987 $1,121,000 1,192,000 $1,455,000 1992 1,176,000 1,347,000 1,677,000 2002 1,274,000 1,599,000 1,900,000 By the year 1992,under the "Most -Likely"set of circum- stances,the total village cash economy is expected to have completed its recovery from the 1980's slump.The remainder of the forecast to the year 2002 is characterized by a period of slow and continual expansion at a rate of about 2 percent, The "High"forecast assumptions differ from the "Most- Likely"primarily in the severity of the anticipated slump dur- ing the early 1980's.The effect of these less severe reduc- tions is measured in the forecast as a slowly expanding economy of about 2 percent annual growth rate. On the other side,the "Low"forecast assumptions represent a much more sudden and severe slump in the total income earnings potential of the village during the remainder of the 1980's. Recovery is expected from this "slump"period,caused by govern- mental cutbacks,due primarily to a shift in the regional economic base toward decentralization.Still,this recovery is assumed to be slower and to begin at a much lower point than the most-likely and high projections.By 1992,the total cash earn- ed in the economy is expected to be only 91 percent of the amount earned 10 years earlier.By the year 2002,the total cash earning potential of the village economy is expected to have recovered to the 1981 level. Current Energy Consumption An energy use inventory was conducted in order to gain an understanding of the total village energy consumption,and the relative importance of electricity.Exhibit 5 presents a detailed listing of energy consumption by end uses and by fuel type. II-8 Total Energy Space and water heating was the major energy end use with a total consumption of about 5,500 million Btu.A Btu (British Thermal Unit)is a measure of the amount of heat required to raise the temperature of one pound of water by one degree Fahrenheit.Fuel oil and wood provided respectively about 65 and 35 percent of the total heating needs.Residential cooking consumed about 1,820 million Btu,most provided by wood (85 percent).Lights and electric appliances consumed an equivalent of 530 million Btu.One kilowatt-hour of electricity is equal to 3,413 Btu. Table II-4 summarizes the total consumption by fuel types. It also shows the average unit price of each fuel.The estimat- ed total cost to Akiak for their 1981 energy demand was about $185,000.Some 24 percent was spent on diesel fuel for generat-- ing electricity. Table II-4 AKTAK 1981 FUEL PRICES AND CONSUMPTION Unit Annual Price Consumption Fuel Oil $1.84/gal.55,000 gallons Diesel $1.84/gal.25,000 gallons Propane $108/100 1b bottle 10/100 1b bottles Blazo $3.40/gal.285 gallons Wood $150/cord 255 cords Because of the large quantities of fuel needed to meet year-round energy demands,the only economical supply method is by water barge.A regional lighterage service is operated out of Bethel which uses the vast network of rivers and sloughs to deliver the fuels during the relatively short ice-free period of late summer and fall.Consequently,the vast majority of the annual fuel supply of the village must be delivered and stored on site during this portion of the year.Bulk fuel storage facilities are therefore a critical component of the present village energy system.The village maintains bulk fuel storage facilities for the combined elementary and high school (50,000 gal.).The old BIA elementary school storage facilities (44,000 gal.),are now being used by the village. II-9 Exhibit 6 presents the energy balance for 1981.Due to conversion factors and electric distribution losses,the "useful"energy was about 4,300 million Btu or 42 percent of the total consumption. Electric Generation present Demand.In 1981,the total electric demand of the village was about 190 megawatt hours (MWh).The 1981 peak demand was 55 kW. Existing Facilities.The village of Akiak has more than enough generating capacity than is presently required.As shown in Table I-5,the village corporation owns two diesel generator sets with a combined capacity of 250 kW.In addition,the new and old LKSD schools have their own standby generating capability. The primary generator in Akiak appears to be more than several year old,and not well maintained.The distribution system (Exhibit 7)is in good condition,but will have to be expanded to accomodate planned new construction. Table II-5 EXISTING GENERATING FACILITIES Operating Owner/Operator Status Capacity (kW) Kukarmuit Corp.Primary 125 Kukarmuit Corp.Primary 125 LKSD Standby 125 LKSD Standby 125 Old School Standby 35 Total Capacity 535 kW Future Energy Demand Three projections of future energy demand (low,most-like- ly,high)were developed,based on current use,socio-economic projections,and assumptions regarding future end use demand. The most likely scenario is based on the most likely projections of economic activities,population,and household size described earlier.It also reflects a mid-range forecast of energy price trends.The low scenario reflects a more conservative growth II-10 derived from the low projections of economic activities,popula- tion,and household size,as well as a real energy annual growth rate of 2.5 percent.The high scenario assumes a continuation of the subsidized present situation,both at the energy and at the economic levels, The forecasts are based on estimated growth in each econo- mic activity described earlier,and in the residential sector. A detailed description of the assumptions is given in Appendix A.Pages 1 through 3 of Exhibit 4 present the end use projec-- tions for 1987,1992 and 2002 under the most likely scenario. Pages 4 through 6,and 7 through 9 present the projections for the low and high scenario,respectively.Table II-6 sumarizes the results.Space heating demand was increased by about 15 percent to reflect the average annual heating needs of the region,since 1981,the base year,was warmer than average.The total electric energy demand is expected to vary between 265 and 415 MWh in year 2002,with a most likely energy demand of 335 MWh.The most likely 2002 peak demand is 95 kW. Table II-6 AKIAK ENERGY DEMAND FORECAST Most Low Likely High Total Energy Demand (Btu x 106) 1981 Demand N/A 7,848 N/A 1987 Demand 9,570 10,060 10,962 1992 Demand 10,773 12,271 13,566 2002 Demand 12,747 16,359 20,858 Electric Energy Demand (MWh) 1981 Demand N/A 190 N/A 1987 Demand 205 210 230 1992 Demand 230 260 290 2002 Demand 265 335 415 Formulation of the Supply Plans To meet the projected energy demand,a base case and four alternative supply plans were formulated to examine the relative energy costs and environmental and socioeconomic impacts.With- in each alternative,subplans are also formulated to meet the combinations of electrical and total energy demand.The plans II-1l are representative of mixes of supply modes for meeting end-use demands. The four alternatives to the base case include coal direct combustion for meeting all the heating demand.A general description of each supply plan is given in the following para- graphs. I.Base Case.The base case plan represents a continu- ation of the present practices of diesel generation for electricity.The base case plan also assumes the continued use of fuel oil for residential and non-residential heating needs.No new transmission interties are included in the Base Case. II.Base Case Alternatives.The base case alternatives will utilize the diesel units as described in the base case,with inclusion of wind electric generation,waste heat recovery,and coal direct combustion for heating de- mand.A regional and sub-regional transmission interties were also evaluated.The optimization of the base case alternatives is given in the next section. For consistency between all alternative supply plans,it was assumed that the conversion to coal direct combustion would be in 1988,the same year as the coal fired plant would be in operation.All existing residential and non- residential systems would be converted to burn coal for heating. III.Thermal Alternatives.Five sub-plans were formu- lated,including a 4-MW or a 10-MW coal-fired plant, located in Bethel.Transmission interties to the outlying villages were also considered for each of the five plans. The results of the economic feasibility to intertie Akiak is presented in the following section. Supply Plan IIIA would consist of a 4-MW base load plant supplemented by diesel generators to meet the peak demand. The heating demand in Bethel and the villages would be met by fuel oil until 1988 then coal direct combustion as de- scribed in the Base Case Alternatives. Supply Plan IIIB would consist of the same 4-MW base load plant with waste heat recovery that would supply about 25 percent of the heating demand in Bethel.The remaining heating demand would be met as in Plan IIIA. II-12 Supply Plan IIIC would consist of a l1O-MW cycling plant that would generate the electric energy demand.The heat- ing demand would be met as in Plan IIIA. Supply Plan IIID would consist of the same 10-MW plant with waste heat recovery that would supply 62 percent of the heating demand in Bethel.The remaining heating demand would be met as in Plan IIIA. Supply Plan IIIE would also consist of a 10-MW plant with a supplemental boiler to supply about 80 percent of the total heating demand of Bethel.The remaining heating demand would be met as in Plan IIIA. IV.Hydroelectric Alternatives.Two sub-plans were formu- lated from the Chikuminuk Lake development,as described in Chapter IV.The 9.5-MW project (Plan IVA)was sized to meet the monthly electric energy requirements of the Bethel region through year 2002.The average annual energy pro- duction would be 60 GWh,or about 21 GWh more than the projected electric energy demand in 2002,under the most likely projections.That average surplus of energy would meet about 7%of the total heating requirements of Bethel, in year 2002.The second plan (Plan IVB)consists of a development that approaches the topographic limits of the site.The 24-MW project would produce an average annual energy of 120 GWh.This development would meet the proj- ected electric energy demand and about 27%of the heating requirements of Bethel,in year 2002.In both plans,the remaining heating demand would be met by coal direct com- bustion,as in Plan IIIA. Both supply plans include a high voltage transmission line from Chikuminuk Lake to Bethel via Kwethluk and Akiachak. Additional transmission interties to the other village were also considered.The economic feasibility of interconnect- ing Akiak is presented in the following section. Vv.Fuel Cell Alternatives.Two fuel cell alternative plans were formulated.Both plans include a centralized 9-MW fuel cell electric generation plant,located in Be- thel.The difference between the alternatives is that one plant (Plan VB)is designed for waste heat recovery,which could provide an estimated 12%of the heating demand in Bethel.The remaining heating demand would be met by coal direct combustion.As with the other plans,transmission interties to Akiak were considered. The basic assumptions and cost estimates underlying each supply plan are given in the Regional Report. II-13 Economic Evaluation The economic parameters and assumptions used in the evalua- tion are based on the Power Authority guidelines (Economic Para- meters for the 1983 Fiscal Year).The economic anaysis is done for the period starting in 1982 and ending in 2039,the last year of the 50-year economic life of the hydro project which would come on line in 1990.All costs are in terms of 1982 dollars.Petroleum fuels and coal are escalated at a real rate of 2.5 and 2.0 percent respectively,over the next twenty years. After year 2002,real escalation rates and load growths are assumed to be zero.A discount rate of 3.5 percent is used to calculate the present worth of costs occurring in different years on an equivalent basis. The present worth calculations were done according to the Power Authority evaluation procedure.The costs are busbar costs and do not include cost allowances for distribution,ad- ministration,taxes,etc.The present worth of consumer costs would be signficantly higher than the present worth of busbar costs developed in this evaluation.However,since these addi- tional costs are the same for all alternatives,the relative ranking of the alternatives would not be affected. Using the timing of capacity additions and costs presented in the Regional Report,the present worth of costs for each supply plan was computed.Table II-7 summarizes the present worth of each supply plan for Akiak.The present worth compu- tation was done separately for the heating demand and electric demand.Electric demand includes the costs associated with generation facilities and transmission interties. II-14 Table II-7 MOST LIKELY SCENARIO PRESENT WORTH AND BENEFIT-COST RATIO OF THE SUPPLY PLANS Total Demand Benefit-Cost Ratio Present Worth (1982 $x103)With With Heating Electric Total Base Optimized Supply Plan Demand Demand Demand Case Base Case Base Case Plan I 4,508 3,183 7,691 1.00 - Optimized Base Case Plan II 3,468 3,025 6,493 1.18 1.00 Thermal Plans Plan IIIA 3,468 3,105 6,573 1.17 0.99 Plan IIIB 3,468 3,105 6,573 1.17 0.99 Plan IIIC 3,468 3,239 6,707 1.15 0.97 Plan IIID 3,468 3,239 6,707 1.15 0.97 Plan IIIE 3,468 3,239 6,707 1.15 0.97 Hydroelectric Plans Plan IVA 3,468 2,113 5,581 1.38 1.16 Plan IVB 3,468 2,113 5,581 1.38 1.16 Fuel Cell Plans Plan VA 3,468 2,821 6,289 1,22 1,03 Plan VB 3,468 2,821 6,289 1.22 1.03 The following paragraphs describe the results for Akiak under each supply plan.A regional summary is presented at the end of this section. Base Case Supply Plan The present worth of the Base Case using diesel plants for electric generation and fuel oil for heating was first computed to serve as a reference. II-15 As shown on Table II-7,the total present worth of the Base Case is $7,691,000,of which $3,183,000 is for electric energy demand. Optimized Base Case Supply Plan The Base Case Alternatives were optimized based on an eval- uation of coal direct combustion,wind generation,waste heat recovery,and transmission intertie.As described in the Re- gional Report,the analysis shows that conversion to coal direct combustion for heating would provide significant economic bene- fit.Under the Mostly Likely Scenario,assuming a complete conversion to coal direct combustion by 1988,the present worth of the heating costs would be reduced by about 30%or $1,040,000 (in 1982 dollars)over the period 1988-2039.Wind generation was only found to be economically feasible in the villages of Eek and Tuntutuliak.Diesel waste heat recovery was not found to be economically attractive in Akiak when it is compared to coal heating.Transmission intertie to Bethel was found to be marginally attractive.A sub-regional transmission intertie between Akiachak,Akiak,Kwethluk,and Tuluksak was not found to be economically feasible. As shown on Table II-7,the total present worth of the Optimized Base Case is $6,493,000.The benefit-cost ratio is 1.18 when compared to the Base Case.The present worth of the electric energy demand was only reduced by $158,000 when com- pared to the Base Case.The present worth of the heating demand was reduced from $4,508,000 to $3,468,000. Thermal Supply Plans As for the Optimized Base Case,an economic evaluation was performed to decide whether or not Akiak should be intertied to Bethel,site of the coal-fired plant.To reflect the share of construction cost for the central coal-fired plant in the pre- sent worth computation of each village,an incremental unit cost of $1,500 per kilowatt was used.This unit incremental cost was multiplied by the projected village peak demand in year 2002 to estimate the construction cost associated with that village.As shown on Table II-7 the present worth of the electric demand which includes the intertie is very similar to the present worth of the Base Case.As a result,Akiak could be intertied to Bethel. However,as shown on Table II -7,all thermal plans have a benefit-cost ratio lower than one when compared to the Optimized Base Case.In all thermal supply plans,the present worth of the electric demand,alone,is greater than the present worth of the Optimized Base Case electric demand.The benefit-cost ratio II-16 is 0.99 for Plans IIIA and IIIB,and 0.97 for Plans IIIC,IL1ID, and IITIE. Hydropower Supply Plans An economic evaluation of the intertie to Akiak was done, using an incremental hydroelectric construction cost of $3,000 per kilowatt.As shown on Table II-7,the present worth of the electric demand which includes the intertie is lower than the present worth of the Base Case.The hydropower supply plans have the lowest present worth of all supply plans.Both plans have a benefit-cost ratio of 1.16 when compared to the Optimized Base Case. Fuel Cell Supply Plans An incremental construction cost of $1,000 per kilowatt was used for the economic evaluation of village interties.As shown on Table II-7,the present worth of the electric demand which includes the intertie is lower than the present worth of the Base Case.The fuel cell alternatives have an overall benefit- cost ratio of 1.03 when compared to the Optimized Base Case, Sensitivity Analysis The timing and rate of conversion from fuel oil to coal or electric heat to meet the heating demand would directly affect the value of all supply plans,except the Base Case.For the purpose of the economic analysis,we assumed a 100 percent con- version in 1988 to coal direct combustion for space heating. But,actually,the conversion would be more progressive.As a result,the present worth of all alternative supply plans to the Base Case would increase,thereby reducing the difference with the Base Case. A sensitivity analysis was first performed to analyze the impacts of fuel escalation rates.The same supply plans were reevaluated using 0%real fuel escalation for fuel oil and coal. The results are summarized in Table II-8. II-17 Table II-8 MOST LIKELY SCENARIO SENSITIVITY ANALYSIS USING 0%REAL FUEL ESCALATION Total Demand Benefit-Cost RatioPresentWorth(1982 $x103)With With Heating Electric Total Base Optimized Supply Plan Demand Demand Demand Case Base Case Base Case Plan I 3,094 2,475 5,569 1.00 NA Optimized Base Case Plan II 2,739 2,596 5,335 1.04 1.00 Thermal Plans Plan IIIA 2,739 2,755 5,494 1.01 0.97 Plan IIIB 2,739 2,755 5,494 1.01 0.97 Plan ILIC 2,739 2,858 5,597 0.99 0.95 Plan IIID 2,739 2,858 5,597 0.99 0.95 Plan IIIE 2,739 2,858 5,597 0.99 0.95 Hydroelectric Plans Plan IVA 2,739 2,026 4,765 1.17 1.12 Plan IVB 2,739 2,026 4,765 1.17 1.12 Fuel Cell Plans Plan VA 2,739 2,508 5,247 1.06 1.02 Plan VB 2,739 2,508 5,247 1.06 1.02 Table II-8 shows that the hydroelectric and fuel cell plans still have a benefit-cost ratio greater than the Optimized Base Case,if there is no real escalation in fuel cost. Another sensitivity analysis was performed to analyze the impacts of the low and high projections of energy demand.Simi- lar supply plans using a 4-MW and 10-MW coal-fired plant,a 9-MW hydroelectric plant,and a 9-MW fuel cell plant were analyzed. The analysis was done using a 2.5%real escalation for fuel oil, and 2.0%for coal until year 2002.The results are presented in Table II-9. II-18 6T-IITable II-9 SENSITIVITY ANALYSIS PRESENT WORTH OF SUPPLY PLANS (1982 Sx103) Low Scenario Most Likely Scenario High Scenario Heating Electric Total Heating Electric Total Heating Electric Total Supply Plan Demand Demand Demand Demand Demand Demand Demand Demand Demand Base Case Plan I 3,720 2,704 6,424 4,508 3,183 7,691 5,414 3,782 9,196 Optimized Base Case Plan II 2,986 2,770 5,756 3,468 3,025 6,493 4,028 3,335 7,363 Thermal Plans Plan IIIA 2,986 2,822 5,808 3,468 3,105 6,573 4,028 3,505 7,533 Plan IIIB 2,986 2,822 5,808 3,468 3,105 6,573 4,028 3,505 7,533 Plan IIIc 2,986 2,932 5,918 3,468 3,239 6,707 4,028 3,667 7,695 Plan IIID 2,986 2,932 5,918 3,468 3,239 6,707 4,028 3,667 7,695 Plan IIIE 2,986 2,932 5,918 3,468 3,239 6,707 4,028 3,667 7,695 Hydroelectric Plans Plan IVA 2,986 2,011 4,997 3,468 2,113 5,581 4,028 2,267 6,295 Plan IVB 2,986 2,011 4,997 3,468 2,113 5,981 4,028 2,267 6,295 Fuel Cell Plans Plan VA 2,986 2,584 5,570 3,468 2,821 6,289 4,028 3,120 7,148 Plan VB 2,986 2,584 5,570 3,468 2,821 6,289 4,028 3,120 7,148