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HomeMy WebLinkAboutSE IRP Transmission Analysis 2012THE SEIRP TRANSMISSION SYSTEM ANALYSIS PROCESS 1.Initial Economic Screening (the "Economic Case”): we TRANSFER OVER 2011 TRANSMISSION INTERCONNECTIO!INTERCONNECTION: , INTERCONNECTION."3 SEI-1A Hawks Inlet -Hoonah 28.5 101.7 350,000 2,802 .2,891 SEI-4 Ketchikan -Prince of Wales 35.2 99.7 293,000 9,094 797 SEI-5S ,Kake -Sitka 55 199.1 432,000 31,521 495 SEI-6 Alternate Hoonah -Tenakee Springs -Angoon -Sitka 106 147.2 497,000 7,290 1,607 SEI-5 and SEI-6 North -South 137 310.2 789,000 93,180 262 SEI-7 Hoonah -Gustavus 29 116.5 350,000 0 - SEI-8 Juneau -Haines 85.3 243.8 319,000 4,844 3,902 SEI-9 Pelican -Hoonah 55 63.6 288,000 632 8,125 2011 Diesel Generation Cost 255 Note 1:The annual average transfer over the interconnection is determined by taking the sum of the annual flows for each segment of each interconnection as modeled in Strategist®for the 50-year planning period and dividing the sum by 50. Note 2:The annual transmission interconnection cost does not include any cost for the generating the electricity that would be transmitted over each transmission interconnection. Notes: 1.The 2011 Annual O&M and R&R costs and capital recovery costs are considered when computing the $/mwh interconnection cost.This cost does not include operations labor,nor does it include any cost of power that would be transmitted over the transmission line.See calculation below. 2.The cost of diesel generation is a "bus bar cost of power”,which includes fuel,capital recovery, and fixed and variable O&M.The value quoted is an average of 6 different sizes of power plants. The comparison of the diesel costs to transmission costs (without any associated power costs)is an appropriate screening-level comparison with respect to costs of two alternatives,1)remain with diesel generation and do not build new transmission lines,or 2)build new transmission tines to bring new cheaper hydro power into the sub region. if we take SEI-6,for example,a new transmission system interconnecting the sub regions is shown schematically below. Juneau Area ae 5.210 Mh D4 vA Admiratty Island 3678 Mth ---- Baranof Island I 1312Ktan I ew--Total Average Annual Flow 11,104 Myth Figure 12-17.SEI-6 Hawk's Inlet -Angoon -Sitka Average Annual Flow Calculation Line Capital Cost S$143,100,000 1 Capital Recovery Factor 0.0762 2 Annual Debt Service S 10,904,220 3=1*2 O&M/RE&R $471,000 4 Total Annual Cost S 11,375,220 5 =3+4inotel Power Flows over the transmission segments Juneau to Angoon MWH 904 6 Angoon to Juneau 5,210 7 Angoon to Baranof Island 1,312 8 Baranof Island to Angoon 3,678 9 Total Power Flow MWH 11,104 10=L6:L9 Calculated Transmission Cost -|S/MWH 1,024 11=5/10 Notes 1}Total annual maintenance and operations cost The line 11 transmission cost is then compared to the cost of diesel power,described above at $255/mwh as a screening criteria.Summarized,if the cost of transmission (without associated power costs)exceeds the cost of diesel power,then a power customer will not see a lower power rate. In the Black &Veatch screening methodology,if transmission costs came in less than the cost of diesel, the transmission lines would be subject to further scrutiny.None of the transmission lines met the screening criteria. Public Benefit Analysis (the "Public Benefit Case”): This portion of the analysis was to consider the transmission projects as public works projects,fully funded by the State of Alaska,with operations and maintenance costs over the project lifetime being recovered from rate payers.The optimum expansion software Strategist®was used for the process. The analysis considers two alternate approaches for power supply: 1.Continued operation without transmission lines 2.Operation with transmission lines in service In each case,Strategist®modeled the amounts of diesel and hydro generation employed,and considered all costs of operation,including O&M,R&R,but excluding any debt costs.When diesel is replaced,or when Strategist®selected a new hydro,capital costs were assessed as being paid by rate payers. Table 12-13 -Transmission Interconnection Public Benefit Screening Evaluation CUMULATIV o PRESENT |CUMULATIVE 0 UMULATIV ¥OST;|PRES 0 ESE oR Of 0 0 co T 00EDAONNECDERCO ONS BRE Si BR 0 D D i ON}ON}Y . | (E) SEI-1A Hawks Inlet -28.5 101.7 286.1 277.9 13.1 Hoonah SEI-4 Ketchikan -Princeof 35.2 99.7 307.6 282.5 25.1 114 13.7 0.14 Wales SEI-5 Kake -Sitka 55 199.1 386.1 341.6 445 15.8 29.0 0.15 i te a .a . .oan -”wes te 'SEI-6 Hawks Inlet -102 143.1 339.8 290.1 49.7 .16.5 33.2 0.23 |Angoon -Sitka . w a ....*nee rn ae :we re a SEI-6 Hoonah -Tenakee 106 147.2 182.8 128.2 54.6 17.6 37.0 0.25 Alternate Springs -Angoon- Sitka SEI-5 and North -South 137 310.2 654.0 522.9 131.1 32.0 99.1 0.32 SEI-6 SEI-7 Hoonah -Gustavus 29 116.5 115.1 110.5 4.6 13.1 8.5 SEI-8 Juneau -Haines 85.3 243.8 278.8 239.5 39.3 13.8 25.5 0.10 SEI-9 Pelican-Hoonah 5S 63.6 51.9 46.7 5.2 10.1 49 The calculation first compares the two alternatives,and arrived at a cost savings that would occur from increased hydro generation being available in areas now being served with diesel power.(Column D)This raw savings amount is reduced by the computed O&M/R&R costs,to arrive at a computed savings (benefit)expressed in column F. The benefit to cost ratio of 0.23 shows that for every dollar of capital the State expends on the transmission line,over a 50-year period the power customer will receive $0.23 of benefit. The traditional break even point in public financing of projects is a value greater than 1.0.Because capital is scarce,and options are available with considerably higher B/C ratios,the contractor recommends the projects not be pursued. Black &Veatch did not make a Strategist®run for the entire interconnected network,because none of the segments passed the initial screening. THE SEIRP TRANSMISSION SYSTEM ANALYSIS PROCESS 1.Initial Economic Screening (the "Economic Case”): SEI-1A Hawks Inlet -Hoonah SEI-4 Ketchikan -Prince of Wales SEI-5 Kake -Sitka [SeI-6 2 Hawksinlet-Angoon-Sitka 011 SEI-6 Alternate Hoonah -Tenakee Springs -Angoon -Sitka SEI-5 and SEI-6 North -South SEI-7 Hoonah -Gustavus SEI-8 Juneau -Haines SEI-9 Pelican -Hoonah 2011 Diesel Generation Cost 137 85.3 106 Po eats wl 350,000 293,000 9,094 432,000 31,521 "anon aos 497,000 7,290 789,000 93,180 350,000 0 319,000 4,844 288,000 632 2011 ANNUAL) ANNUAL AVERAGE nepunsernesipromerinel2011TRANSMISSION Note 1:The annual average transfer over the interconnection is determined by taking the sum of the annual flows for each segment of each interconnection as modeled in Strategist®for the 50-year planning period and dividing the sum by 50. Note 2:The annual transmission interconnection cost does not include any cost for the generating the electricity that would be transmitted over each transmission interconnection. Notes: 1.The 2011 Annual O&M and R&R costs and capital recovery costs are considered when computing the $/mwh interconnection cost.This cost does not include operations labor,nor does it include any cost of power that would be transmitted over the transmission line.See calculation below. 2.The cost of diesel generation is a "bus bar cost of power”,which includes fuel,capital recovery, and fixed and variable O&M.The value quoted is an average of 6 different sizes of power plants. The comparison of the diesel costs to transmission costs (without any associated power costs)is an appropriate screening-level comparison with respect to costs of two alternatives,1)remain with diesel generation and do not build new transmission lines,or 2)build new transmission lines to bring new cheaper hydro power into the sub region. If we take SEI-6,for example,a new transmission system interconnecting the sub regions is shown schematically below. Sa, siomn |[ ' SEL6 i90-4 Mh + Admiralty Island 3678 Mh Baranof Island | 1312Mn-st rw =--Total Average Annual Flow 11,104 MY Figure 12-17 -SEI-6 Hawk's Inlet -Angoon -Sitka Average Annual Flow Calculation Line Capital Cost S 143,100,000 1 Capital Recovery Factor 0.0762 2 Annual Debt Service S 10,904,220 3=1*2 O&M/R&R S 471,000 4 Total Annual Cost $11,375,220 5=3+4 note 1 Power Flows over the transmission segments Juneau to Angoon MWH 904 6 Angoon to Juneau 5,210 7 Angoon to Baranof Island 1,312 8 Baranof Island to Angoon 3,678 9 Total Power Flow MWH 11,104 10 =L6:L9 Calculated Transmission Cost |S/MWH 1,024 11=5/10 Notes 1|Total annual maintenance and operations cost The line 11 transmission cost is then compared to the cost of diesel power,described above at $255/mwh as a screening criteria.Summarized,if the cost of transmission (without associated power costs)exceeds the cost of diesel power,then a power customer will not see a lower power rate. In the Black &Veatch screening methodology,if transmission costs came in less than the cost of diesel, the transmission lines would be subject to further scrutiny.None of the transmission lines met the screening criteria. Public Benefit Analysis (the "Public Benefit Case”): This portion of the analysis was to consider the transmission projects as public works projects,fully funded by the State of Alaska,with operations and maintenance costs over the project lifetime being recovered from rate payers.The optimum expansion software Strategist®was used for the process. The analysis considers two alternate approaches for power supply: 1.Continued operation without transmission lines 2.Operation with transmission lines in service In each case,Strategist®modeled the amounts of diesel and hydro generation employed,and considered all costs of operation,including O&M,R&R,but excluding any debt costs.When diesel is replaced,or when Strategist®selected a new hydro,capital costs were assessed as being paid by rate payers. Table 12-13 INTERCONNECTION) SEI-1A Hawks Inlet -28.5 101.7 Hoonah SEI-4 Ketchikan -Princeof 35.2 99.7 Wales SEI-S Kake -Sitka 55 199.1 r wee Le vet : ;SEI-6 Hawks Inlet -102 143.1 Mees et neuer Angoon -Sitka _Oe ee i Serer re SEI-6 Hoonah -Tenakee 106 147.2 Alternate Springs -Angoon- Sitka SEI-Sand -_-North -South 137 310.2 SEI-6 SEI-7 Hoonah -Gustavus 29 116.5 SEI-8 Juneau -Haines 85.3 243.8 SEI-9 Pelican -Hoonah 55 63.6 Transmission Interconnection Public Benefit Screening Evaluation 0.32 0.10 The calculation first compares the two alternatives,and arrived at a cost savings that would occur from increased hydro generation being available in areas now being served with diesel power.(Column D)This raw savings amount is reduced by the computed O&M/R&R costs,to arrive at a computed savings (benefit)expressed in column F. The benefit to cost ratio of 0.23 shows that for every dollar of capital the State expends on the transmission line,over a 50-year period the power customer will receive $0.23 of benefit. The traditional break even point in public financing of projects is a value greater than 1.0.Because capital is scarce,and options are available with considerably higher B/C ratios,the contractor recommends the projects not be pursued. Black &Veatch did not make a Strategist®run for the entire interconnected network,because none of the segments passed the initia!screening. H:\WetReports\Project Management\PJBdgtApprovalForm-TEMPLATE-JET-REV121211.xlsx 402021 |||||||| Bee Mets "s ENTER PROJECT TITLE::oeerecn tes:nee Project Code:0000 ||Date:-1/1/01..6/30/12 a he Revised jam.Total Trans.Fund No.Contract Award Code Description Budget ©Realign 'Change "Budget (Act+tEnctComm)Remaining Future Grant Expense/Advances ||l 20010 Advances 0.00 0.00 0.00 0.00 70005 Future Grant Budget 0.00 0.00 0,00 0.00 0.00;0.00{ 6.00{0.00 0.00 0.00 Project ||| 71001 Non Grant 0.00 0.00 0.00 0.00 73150 AEA STAFF 0.00 0.00 0,00 0,00 72005 TRAVEL 0.00 0.00 0,00 0,00 73120 DESIGN ENGINEERS 0.00 0.00 0.00 0.00 73005 OTHER CONTRACTUAL 0.00 0.00 0.00 0.00 74005 MATERIALS 0.00 0.00 0,00 0,00 75000 EQUIPMENT 0.00 0.00 0.00 0.00 0.00 |0.00 |0.00 |0.00 0.00 0.00 Subrecipient Grant ||| 77005 Subrec Grant Budget 0.00 0.00 0.00 0.00 77310 PASS THROUGH GRANT 0.00 0.00 0.00 9.00 77510 CM LABOR 0,00 0.00 0.00 0.00 77515 FA LABOR 0.00 0.00 0.00 0.00 77530-INS WORKER COMP/GEN LIABILITY INS 0.00 0.00 0.00 0.00 77520 TRAVEL 0.00 0.00 0.00 0.00 77825 PJ SITE FOOD &LODGE 0.00 0.00 0.00 0.00 77530-Other CONTRACTUAL 0.00 0.00 0,00 0.00 77840 FREIGHT 0.00 0.00 0.00 0.00 77550 MATERIALS 0.00 0,00 0.00 9.00 77560 EQUIPMENT 0.00 0.00 0.00 0.00 77570 LAND 0.00 0,00 0.00 0.00 778390 DAMAGE CLAIMS 0.00 0.00 0.00 0,00 77900 COMMUNITY CONTRIBUTIONS 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0,00 0,00 0.00 Contract Revised Total Trans Fund Code |Award Code AR Code AR TITLE Budget |Realign |Change |Budget |(Act+Enc+Com)Remaining Project Management 0,00 0.00 0.00 | 0,00 0.00 0.00 |I 0.00 0.00 0.00 0.00 0.00 0.00 Subrecipient Grant 0.00 0,00 9.00 0,00 0.00 0,00 | Total AEA Project 0.00 0.00 0.00 0.00 0.00 0.00 Community Contribution 0.00 0.00 0.00 0.00 0.00 0.00 Total Ars 0.00 0.C0 0.00 0.00 0.00 0.00 Chk 1 0.00 0.00 0.00 0.00 Chki 9.00 0.00 0.00 0.00 0,00 0.00 Project Budget Approvals [Signature Dote Amy Adler Finance Review: Project Manager: Program Manager: Deputy Director: Sara Fisher-Goad AEA oe Dire 1 spine PLEASE RETURN TO JENNIFERBRIDE IN ACCOUNTING AFTER SIGNED AND.DATED BY EVERYBODY,THANKS.0. J | 4117/2012 James Strandberg From:Sara Fisher-Goad Sent:.Thursday,March 15,2012 7:14 PM To:James Strandberg Subject:FW:SEIRP comments by Congressman Don Young at SE Conference Could you please provide me the detail on how the B/Cs were established for the interties?variables and assumptions.I know this went through their model,but we need to see the inputs. Sara From:Bell,Susan K (CED)[susan.bell@alaska.gov] Sent:Wednesday,March 14,2012 4:15 PM To:Curtis Thayer;Sara Fisher-Goad Subject:FW:SEIRP comments by Congressman Don Young at SE Conference |forwarded Dru's email below to Mike,Randy and Dianne in the Gov office.Likely to be a headline story as well as more calls and emails. From:Fenster,Dru J (CED) Sent:Wednesday,March 14,2012 4:01 PM To:Thayer,Curtis W (CED);Bell,Susan K (CED) Cc:Koeneman,Crystal A (CED) Subject:SEIRP Ripped by Congressman Don Young at SE Conference Hi all: Our lunchtime speaker today was Congressman Don Young,whose first comment upon taking the stage this afternoon was,"Who is the man who wrote the SE IRP?”And that he should be drawn and quartered (or something similar)to huge cheers from the conference-goers.He stated his full support for building SE Hydro projects and a "grid”intertie in Southeast Alaska -again to huge cheers. Dru J.Fenster Communications Coordinator State of Alaska Department of Commerce,Community &Economic Development (907)465-2500 Juneau (907)465-2523 Direct Line www.commerce.alaska.gov Alaska Energy Authority |SOUTHEAST ALASKA INTEGRATED RESOURCE PLAN -Watitat Aiea Detain .Yakutat .oe #,n', nN » iN s XN ' N\ Falls Creek Salmon CreekwsAukeBayAnnexCreekGustavus Elfin Cove Juneau ° Hoonah si55k iniet Snettisham Greens Crack Gartina Falls Pelican Pelican Tenakee Springs e Thayer CreekFangoon Fish Valve Unit Sitka /.Warm Springs Green Lake Kake Blue Lake Expansion Blue Lake Patersburg * Blind Slough Wrangell .re | Tyee Lake Whale Pass ° Coffman Cove Hyder be e Naukati Bay Thorne Bay Klawock Kasaan Sitvis a aver Fails Ketchikan Lake Hitman Lake Ketchikan Reynolds Creek Hydaburg Metlakatia oy Chester Lake Purple Lake 0 10 20 30 Co Miles Agta Source'Ging Maoe Aiarka OMR Enerey Velority ESR)Disclamer:Rote:chown ave for divstrstwe purnoser omy 3nd are not necessarily reflective of actual routine Transmission Lines ro Project Cities,Substations e ss soy or Load Centers +ee .taal :Existing @ Existing Existing &Committed Transmission &Hydro Projects c ited ec itted .Interconnection Points 'ommitte ommitte .FB,BLACK &VEATCH-,Building a world of difference: Alusaa Ovary Ww fasting and Committediad |CHorageet pétade dct. Figure 12-1 Existing and Committed Resources BLACK &VEATCH |Transmission Interconnection Alternatives 12-7 Alaska Energy Authority |SOUTHEAST ALASKA INTEGRATED RESOURCE PLAN Proposed Hydroelectric and Transmission BLACK &VEATCH |Transmission Interconnection Alternatives 12-8 »Yakutat :Goat LakWestCounty'om *Connelly Laka Lakes.Skagway wey Lake:Kukwane Kasidaye Creek ,ti Walker lake 19 Wille Schubee Lake Haines Falls Creek .Salmon Creek p Gustavus Auke Bay Annex Creek ' %eElfinCove %*s, Jim's Lake ommgyyt ier Snettisham Gartina Falls qWaterSupply&. 5 Sweetheart LakeCreek'Ne Game Creek s ,8TenakeeSpringsH indian River 1 ,%Thayer Creek*.eea a e yj iFisValveUnitt Takatr Lake Indian River Sitka a Senags Scenery CreagSheldonfacksan%Cascade CreekGreenLak@ypenwonRuth Blue Lake Expansion Pulp Mill Feed Sue Lake & Petersburg * Blind Slough Wrangell! « irzi Sunrise Lake Virginia Lake Thoms Lake Anita Kunk Lake 'yee Lake Tyee Lake Cam Whale Pass ® Coffman Cove Lake Shelokum Hyder' Naukati Bay Orchard Lateharie Soule 6KlawockLakeMahoneyLake Grace Diversion Cannell Lake Renan, aver FalisKetchiianLakhitmanLake Reynolds Creek Hydabuydaburg Chester Lake N rangle Lake (7)16 20 40a Miles Fists yom eet!fey Maa tert fh Peep euy fel ity Cb Dis:leernwee Rswies sawn ane fr biseaiioe matiiws sty at ane ail eeehy cellecthe a!actual aeling om Proposed Route Submarine Cable Hydro Projects Transmission Lines Southeast Alas ka Integrated Resou rce Plan ammen Alternate Route wemat Proposed @ =Existing ome Existing Cities,Substations «#8 **Propased-Alt =@ =Committed 9 <==Committed Proposed Transmission &Hydro ProjectseorLoadCentersewoensExisting@Proposed »Interconnection Points BLACK &VEATCH ,Bullding a wortd of differencoy 4\acka Overview Prapaced (otterent Functianmad [&paimaraa y doeercuid Figure 12-2