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HomeMy WebLinkAboutSEIRP review meeting Nov 2011Southeast Alas:: SEAPA Board Meeting November9,2011 Contractor:Black &Veatch,Kevin Harper, Project Manager AEA Project Manager:Jim Strandberg Public process coordinator:Robert Venables, «Southeast Conference/«-ALASKA Advisory Workgroup Chair:Rick Harris,@a ENERGY AUTHORITY Sealaska __..fntegrated Resource Pic... »The list -Which Hydro Electric PowerProjectsshouldbedevelopedforSoutheastAlaska,and when should theybedeveloped? -Regional Screening Process -Detailed Analysis at sub-region level »Action plan recommendations«Project capital appropriations *How should we consider »Demand Side Management/EnergyConservation °Fuel Conversions °Load growth othwen,RS dKP J 11/7/2011 capeneneenen srt enemySEIRPOutput--a focused integrated plan that defines DSM/EE,Fuel Conversion/hydro power additions to satisfy future energy needs at least cost to the Rate Payer. «Capital projects defined in SEIRP :Hydro power generation *Transmission lines _ °»DSM/EE capital needs °Fuel conversions LLIRP a) ApeOE GE RR A OES Mi Ptaha 'Task 1 -Screening for short list - approximately 24 hydro power projects for SE Alaska »Task 2 -Analyze and developa list of generic projects for use in economic models *Economic Model used:Strategist +Task 3 -Recommend capital projects and:action plan wi RP 11/7/2011 ENERGY DemandtAIBe Selection of the next increment of hydro power,with integrated . consideration of DSM/EE plus fuel conversions CPLANINintce Porizont>)fopecenTs ! Busine At i @ werenence case [EES a)@@QO+Dsm/ee +uer conversion Lo -/ )Hist Lomd romecsst prion @ TIME PR NEXT INCROMENT OF Relate ENERO W/REFERENCE CALE LOAN fot cast, W/INTEORATED bMERGY appmoach CNexT hyYDtO Ww TRP wail see um .wey,00 Sn reneeneemgemmmmnnmnetinyBeeeeenebeeen2SRApetanennaeaa Cd tal Esters iit PEVERrOPentST CTA Wwade ws Fon NEYT iekemdelTS.1|*COORC NATE W/Rengwaee ENCLST etany , i PROGLAMA *Diet FunlainGe "Terod@t EIse Matern AP PROM He ALL RINT PUNO DEVELOPMENT WRC,' i ColpoanTs STANQAEWS Ser RY sbte . .i{5*BGT COOKING PRoseeTS F6CEIVE Piinlie i 'i ' i } -ae bo|AEA funding concerns ||}.wo Feasecrs Titanate HASTY Toay'are driving this risk iNew |matrix consideration Milla dAA LEVEE.OF BE sninsaes }PeoéeyT Gata,wy AAD URANCES PR AIO FATAL."||eaws anwwLRP 11/7/2011 |[4E4 Hydropower Project Development Funding Appros:4|otal Peto Frecects Those KEADITOIUITY To |r|Vere MINUAUAA LeveL OF KEP enIMARLE i j .|PROEGT CATe,N/ARG URANCES OF IO FATA. developers,as well as other projects suggested by B &V, using all available information described in terms of cost,power output energy production Ww IRP :E criticat Analysis,done by sub-region,incorporating new generation and :5 {transmission infrastructure analysis (Strategist),with Energy 3:i Conservation,Demand Side Management,and possibie fuel conversions i.jbo define the best SE region energy future._a End game --a defined list of capital appropriations to develop energy infrastructure to supply regional energy needs,and an accompanying action plan. including developer data FLAWS j |; 1x7anweee a DEVEOMENT DERISION fo 'NOvT Itkemed<T gf Kyoeco taeweate Wwe LRP Generic projects to |List of available resources meet future demand,|identified by proposed 11/7/2011 nn marie gerne .pore tes a ee B&V Proposed Risk Evaluation Matrix -draft .BUSINESS AND.LICENSING/PROJECT LINEcometoTT'STRUCTURE HYDROLOGY FLEXIBILITY MAI!es cy ¢1-5)3)5)3,5) "a 3 '1 B j bese:a 3 $2 3 2 ee T 5 '4 8 ' RiP Gabel G $4 1 s +qeesq 5 z 1 1 1 b:Lees 3 '4 1 1 s oa pear Uren Ga ' ae 3 2 1 s 3 Pa2AASkagveeyFY25'5[Wotner Lene Oa s 5 a 5 3 E Z 5 '5 5 3 PG2itt.2.anne rn rrmnaemmaintiss aBITerwrangell4s§$s E7 5 $nd(a Freemal Petersburg 2 s 3 4 1 s s teitaKetchian:'1 a 5 1 s 1 ekARITA.a20l§wrangell 5 8 3 4 rf s s fosC1eamKecersian111'4 1 3 4 feLLLeesie2MayersChuck55851s1i Liane Petersburg 5 3 4 s 3 5 foe|Scenery Casi 4 $s s «s 5 5 4,4ETTccWrangell3325ry53fotALLEFidllWrangell43s5as3;0ROacealllMecialacia33s'4 s 3 t b5,i Wrangell 4 5 5 5 a 1 2 iLSrange433s1by13CSAWrancet«5 5 s 1 s s i Difficulties Related to Hydro Projecd Enformation | *Realistic commercial operation dates (CODs) *Capital costs *Storage capacity,if any,and monthly energy output i »Environmental,permitting and licensing issues *Business structure and agreements, including ownership structure,project development capabilities,power sale and interconnections agreements,and so forthL. 11/7/2011 11/7/2011 i SEAPA a "ee am | i |-_-ee |se |a oe aseseeeeee-!j ML rooceses seen ! ! __7 "| ae|=- __| 1o0,tm0 ¢-.Z 7 o00 ,hee,eo ¢6 6 6 4 FP FS anna cae So mr ney {oo { i wae = es rTadHeadset jo seep penn jinn wpe eentwmbo_ce ee ene 300,200 i 390,080,7 --arene :H ,?#6 F F -¢#4 wwLeeecanoeceeed11 :re ar ee a : nae WN RAENEe bda a Optimal Hydro/Transmission Case *Optimal DSM/Biomass/Other Alternatives Case +Expected results -PNWC and Capital Costs |«Link to Preferred Resource List/Appropriations Request :a eae7a8.ewe BET ok a Significant uncertainties exist:loads, resources,potential transmission additions,| and level of State financial assistance »Uncertainties lead to the need to: Develop multiple options -Move towards more balanced resource portfolio Maintain flexibility ¢Limitations due to quality and inclusiveness of project-specific information *This led to the need to base analysis on generic hydro projects -inability to make definitive selection 'LPNntetarya. 2 integrated cases: Optimal hydro/transmission case -Optimal DSM/EE,biomass,other renewables case : *Comparative results led to near-term } resource selection ¢Near-term resource portfolio and actions i »Committed Resources >DSM/EE ' °Biomass conversions : °Project feasibility studies to identify nextincrementofhydro(AEA developed process and °standards,link with REGF)iLL.J am 11/7/2011 PeaCoeraeece _--Long-term decisions based |on revisedIRP(3 years) «Transmission planning philosophy(public benefit) ¢Do not move forward with AK-BC Intertie unless conditions changes and detailed studies (e.g.,SEAPA system improvements)completed ¢Types of risks and uncertainties related to each technology ¢«Need for State financial assistance PereeeekenPieaeL ee fo .eeeekEAPeal, Resource additions by sub-region -Near-term-Committed Resources,DSM/EE,biomass conversions >Longer-term -TBD based on better information on potential hydro and other renewable projects,and experience with DSM/EE and biomass conversions ¢Other »Public outreach -SEIRP,DSM/EE,biomass conversions °Governor/Legislature make decisions regarding level of State financial assistance -_; JMe aecarener11/7/2011 . :Pel Vaalbeb laden 4) Appropriate money to start-up/expand regional DSM/EE and biomass program *Organizational costs *Vendor training -Detailed program design . -Monitoring and evaluation protocols i °Consider regional entity/public-private partnership for start-up and delivery of DSM/EE and biomass program °Further the development of tidal/wave power technology rym aye Bee em et ceeeerera2ea. -Track development of other technologies (e.g.,LNG) -Support efforts to streamline regulatory and permitting processes Regional economic potential studies for non- hydro renewable technologies »Develop standard power sale agreement AT»Consider transmission open access policy 11/7/2011 Southeast Alaska IRP Project Advisory Work Group Meeting Minutes November 8,2011 Juneau,Alaska Advisory Work Group Participants Barbara Stanley (online),Tim McLeod (online),Merrill Sanford (online),Robert Venables,Rick Harris;LarryDunham(online);Tom Crafford (online);Paul Bryant (online);Angel Drobnica (online);Chris Brewton (online),Dave Carlson; Other Participants Jim Strandberg;LarryEdwards (online);JohnSandor(online),Bob Loescher (online),Peter NaorozErne.og fonline);Ariellee Farker.shel.Wright,Clay Hammer;Bob Severson;Duff Mitchell;Kevin Harper;Ray"yet, 1.Call to Order and Introductions (Rick Harris,Chair) 2.AEA Project Manager Report (Jim Strandberg) a.Purpose of meeting is to provide a report on the status of the work being done by Black &Veatch. b.Discussed meeting on November 4",where Black &Veatch met with the interconnected utilities (SEAPA,AEL&P,and AP&T),AEA and SE Conference to discuss the status of work and technical details related to potential hydro projects. Duff Mitchell also attended. c.Completion of draft report has been delayed.The initial Preferred Resource List will be provided to AEA by November 15"and the full Draft Report should be delivered by the end of November.The Draft Report will be posted on the AEA List Server. d.Review of the objectives of the Southeast Alaska IRP: i.One objectiveis to identify the next increment of hydro project to be developed including timing.Black &Veatch has completed a regional screening of hydro projects,with the analysis done at the sub-region level. ii.There is a need for coordinated action to ensure the region's energy future. iii.Black &Veatch will also be identifying the role of DSM/EE,and fuel conversion (heating)under different load forecasts. iv.The objective is to develop a focused,integrated plan with coordinate action plans.The output of plan will include hydro power,transmission vi. vii. viii. xi. xii. lines,as well as capital appropriations for DSM/EE and fuel conversions (heating). With regard to hydro power,Black &Veatch has identified about 300 projects and has screened that list to 24 using a series of screening criteria. Due to limitations related to the quality and inclusiveness of information available on these projects,Black &Veatch analyzed and developeda list of generic hydro projects for purpose of economic modeling.The model being used is a nationally recognized IRP model,Strategist®. The High Case,Reference Case,and Low Case Load Forecasts can greatly affect the size and timing of the next increment of hydro.The Reference Case Load Forecast assumes that nothing is done and recent load trends continue.The High Case Load Forecast shows the potential impact of economic development and the Low Case Load Forecast will show the result if the region aggressively pursues DSM/EE and space heating conversions. A key take away from this project is the fact that the region can't build itself out of energy situation;other actions must be taken. This project is the first attempt to identify an array of projects that can be pursued and developed in an economic fashion to maximize the economic benefit to the region.It is apparent that hydro projects take a long time to requirements.However,many potentialyydro prejects are not well defined and,therefore,it is impossible to make a definitive selection between projects. The preliminary Strategist®model results indicate shows the timing for the next increment of hydro in each sub-region.The data and output is currently being reviewed by Black &Veatch.The end game is to define a list of capita!projects and related action plan. The State's Renewable Energy Grant Program is a sequential funding approach to the development of projects,including feasibility,design, permitting,and construction levels.This phased approach is built into the program.The review of the Round 5 applications will consider whether specific projects make sense in the context of the IRP.He noted that the development level is useful information,but reconnaissance level assessments do not guarantee that a project will be developed.There simply is not enough State financial assistance available to fund all projects in the region. Another important aspect is systems integration.Is the project going to be useful in a system?Often,one can find a project that does not meet the needs of local load centers. 3.Black &Veatch Presentation (Kevin Harper) a.Discussed the challenges associated with picking specific projects due to limitations in the quality and inclusiveness of information available on individual project.Our intention at the beginning of the project was to develop a tiered selection of projects.During our analysis,it became clear that the overall quality and inclusiveness was not adequate to make a definitive selection.Hydro is very site- specific in terms of capital costs,output,and mechanical (water)usability.In the case of the hydro projects available in the Southeast region,there is a wide variation in the quality.In some cases,there was solid information.For the majority of other projects,there was very little information.There could be a range of capital costs of +/-50%;the same is true for potential output levels.Therefore,as an example, assume that the best estimate is $100,and output 100 units.This equates to $1 per unit of output.If you look at the case where you have highest capital and lowest output,the cost is $3 dollars per unit of output.The other end of the ranges equates to $0.33 per unit.A number of projects have a range this high based upon the quality of information available.Consequently,we cannot make a definitive selection of hydro projects at this time.Furthermore,a number of projects may not be permittable.Additionally,a number of projects do not any information on the proposed business structure (e.g.,owner,funding,spillage,etc.).Fundamentally, these are the reasons why discussions with AEA and other led to the decision to move to generic hydro projects for modeling purposes and focusing on the future hydro requirements of each sub-region based upon different load forecasts. Discussed two set of graphics (one for the Northern Region and the other for SEAPA).The top graph is based on the Reference Case Load Forecast.The bottom graph is based on High Case Load Forecast.Also presented in blue is the amount of hydro generated,and in orange the level of diesel generation.The graphs also show the addition of generic hydro projects,and the area of the curve above the dashed line represents spilled energy. We developed generic hydro projects (different sizes and operating specifications) to identify the characteristic of the types of hydro projects that would fit from a size perspective,but are not linked to specific projects.This answers the questions,with ideal hydro,at what point in time would a sub-region bring on-line a new hydro project if there is no DSM/EE or biomass conversion programs.This graph is, therefore,the optimal hydro solution. Additionally,we are looking at what happens if a sub-region implements aggressive DSM/EE and biomass conversion programs,which reduces the load curve.This gives one an idea of how far out hydro projects can be displaced.This is not the full picture,this is one step.The shortcoming of this approach is that the generic hydro projects are not linked to actual projects. To pull everything together,Black &Veatch will run two integrated cases.The first is the Optima!Hydro/Transmission Case,and the second is the optimal DSM/Biomass Case.Both cases will show total capital costs and cumulative net present value cost. 3 f. That will provide a picture as to which path is the best path forward.Based on preliminary results,the best solution will be a combination of DSM/EE,biomass,and future hydro in addition to the Committed Resources previously agreed to. Preview of recommendations -expected recommendations will include: i.Resource additions by sub-region 1.Near-term -Committed Resources,DSM/EE,biomass conversions 2.Longer-term -TBD based on better information on potential hydro and other renewable projects,and experience with DSM/EE and biomass conversions ) 1.Public outreach -SEIRP,DSM/EE,biomass conversions 2.Governor/Legislature make decisions regarding level of State financial assistance 3.Appropriate money to start-up/expand regional DSM/EE and biomass program,including organizational costs,vendor training, detailed program design,and monitoring and evaluation protocols 4.Consider regional entity/public-private partnership for start-up and delivery of DSM/EE and biomass program 5.Further the development of tidal/wave power technology 6.Support efforts to streamline regulatory and permitting processes 7.Regional economic potential studies for non-hydro renewable technologies 8.Develop standard power sale agreement 9.Consider transmission open access policy 4.General Discussion a.Rich Harris asked Jim Strandberg to clarify what the role of the AWG going forward. Jim stated that the plan is to get the draft report to the AWG for review from an advisor's standpoint.The draft report will be released to the general public in December for public comment.Jim will work with Rick Harris to get the next AWG meeting set up. Larry Edwards asked how long the public comment period will be.Jim Strandberg stated that the public comment period should be 30 days. Merrill Sanford stated that DSM/EE could end up being controversial.Some communities will go with it,and some won't.He also asked about the transmission analysis.Kevin Harper responded that Black &Veatch is evaluating two cases: Economic Case and Public Benefit Case.We looked at a total of nine segments based upon the SE Intertie Study by D.Hittle.We have updated the estimated capital costs and looked at the actual flow of power over those segments.In the Public Benefit Case we assumed that the State paid the capital costs,but the local utilities pay the O&M and R&R costs.In the Economic Case we assumed that there was not State financial assistance John Sandor asked Black &Veatch to review the Governor's letter regarding economic development.He didn't think that the projections in no way reflected the Governor's perspective with respect to load requirements.What has been displayed will assure those populations continue to decline.That was a main objective of bringing power from British Columbia over the AK-BC Intertie.He also mentioned the task force to develop timber.Finally,he stated that the Governor has a policy to encourage more affordable energy for all mining projects that can go forward to reverse the population decline. Bob Loescher stated that he didn't understand how the AEA can postulate policy assumption that the future will be based upon energy efficiency and that consumers will look at all sources available.A good part of the projects are private enterprise driven.Projects can be funded in part by investment market place by private capitalization.It doesn't appear that there is a role for private enterprise.He further stated that he did not understand this business of subregions.Kevin Harper responded that the purpose of the sub-regions is to allow us to look at potential transmission segments.From a modeling perspective,there must be power - in/power out.Sub-regions allow the modeling to be done on transmission segments.Some areas in the region have available power,others don't.The reality is,because of the size of the loads,the cost of transmission is very high.For each area of the region,we have developed three load forecasts.The Reference Case and High Case Load Forecasts do not include any DSM/EE or biomass.These load forecasts enable us to look at economics of enegy efficiency vs.other resources.The analysis is based on the total cumulative net present cost to the region over the 50- year period,thereby minimizing the total cost of power within the region.This is the primary function of the analysis.For financing,in our analysis,we assume that there is no State financing.Our focus is on the underlying economics of various projects. With regard to the comment about free enterprise/public developers,|would note that the last two recommendations are specifically focused to encourage the development of non-utility projects.We recommend the development of a standard power sales agreement and an open access transmission tariff. Rick Harris noted that the IRP project has already been delayed and that it is frustrating to hear how poor the data is on our site.We need to work with the Legislature etc.We've known there were energy problems for thirty years,and we should have spent time improving quality of data. . Rick Harris stated that electricity should not be used for heating.We should look at alternatives available. Duff Mitchell stated that the hydro project risk matrix covers a lot of areas.There needs to be some work on the subjective parts.The total will be summed and this -willbea prioritization.This model is devoid of $/Mwh cost information.There have been many studies done on each project.There is a baseline of how much hydrology 5 will be produced,and this can be divided into how much production.Load growth by sub-region makes sense.Wrangell,Ketchikan,Juneau are growing (cost differential between diesel and electricity is greatest).Lastly,the market approach is a good approach.We need to make electricity as low cost as possible.Include more cost/economic-based approach into matrix and report -as opposed to risk avoidance,etc. i.Thom Fisher suggested a rethinking of the policy of changing electric heat.Build hydro for importing energy.Difficulty with hydro,one can only sell what can be used.You must sell all of the hydro power somewhere.Price goes down consequently.The cheapest power could be connecting SE Alaska to grid. j.Rick Harris encouraged everyone to provide any additional comments to Black & Veatch in writing. 5.Meeting was adjourned. Southeast Alaska IRP Project Advisory Work Group Meeting Minutes October 4,2011 Juneau,Alaska Advisory Work Group Participants Dan Lesh,Barbara Stanley,Tim McLeod,Merrill Sanford,Robert Venables,Rick Harris}Larry Dunham,Tom Crafford,Dave Carlson,Tim McConnell,Russell Dick,Jeremy Maxtid(on-line),Bob Grimm,Paul Bryant,SteveHenson,Scott Newlun (on-line),Jodi Mitchell!Paul Southland Other Participants im Strandberg,Larry Edwards;John Sandor,Peter Naoroz,Duff Mitchell,Joe Merkin}Chris Spens,Angel Drobnica,Eric Wolfe,Jan Trigg,Bill Leighy,Shelly Wright,TomWaldo,Andy Donato,Jim Clark,Deyany PlentPlentovich,Kevin Harper,MyronRollins,Ai"AniMire,Robert Miller,Paul Berkshirg 1.Call to Order -Rick Harris 2.Approval of Agenda a.Motion to modify agenda to add Tom Waldo to discuss Roadless Rule. b.Paul Southland commented about Mr.Waldo being on the agenda.He asked that the State make a presentation as well.Rick Harris said they consider the request later. c.Modified agenda was approved 3.Public Comments a.John Sandor distributed memo about economic growth and a forest use map. b.Duff Mitchell discussed the issue of DSM/EE and noted that the low and medium fuel forecasts from DCRA have already been exceeded and should be re- examined.He said that the estimated capital cost for Sweetheart Lake is too high. He would like these numbers removed. c.Bill Leighy discussed draft initiative number 4 that Jim Strandberg passed out last week at the SE Conference.He requested that the group look at other forms of energy transmission such as ammonia fuel. d.Peter Naoroz stated that he is worried about the load forecast for Angoon,which shows four years of decline.New airport is coming online that will add new load. They have other projects other than Thayer Creek.Need new interties to connect mining loads on POW.They've had discussions with the USFS re:roads and l transmission lines.Jim Strandberg commented that he has met with IPEC (Jodi Mitchell),the Mayor of the City of Angoon,and Tim McLeod to discuss Thayer Creek.He said that AEA wants to help them get a solution for Angoon.Rick Harris commented that they want to take into account Native interests and the benefits that they can provide.Jim Strandberg stated that the AEA understands that Kootznoowoo has interests on POW. 4.Approval of Minutes from September 14"AWG Meeting a.Minutes approved without any objections or comments. 5.Opening Comments a.Jim Strandberg provided a recap of the least AWG meeting and stated that the summary of all AWG meeting and other information is posted on the AEA website.Mentioned upcoming Technical Conference in Juneau planned for November.Kevin Harper said the Draft Report is scheduled to be available onNovember2", b.Rick Harris said he received new information about the West Creek project and that was forwarded to Black &Veatch and AEA.He also commented that the Sealaska building was a biomass heated building and offered a tour during the break.Dave Carlson asked about savings.Rick Harris said break-even was $2.58/gal.,and total savings are considerable. c.Paul Southland asked for clarification that draft report will be posted on the website.Confirmed. 6.Black &Veatch Presentation and Discussion (Kevin Harper) a.Transmission Sub-region Map i.Stated that Hyder is not included in IRP. ii.Communities roll up into sub regions that roll up into regions.Merrill Sanford asked about Kennsington mine not being included but Greens Creek is.Myron Rollins clarified treatment of mine.loads.Merrill asked that this be clearly documented in write-up.Jim Strandberg asked Tim McLeod about future plans to serve Kennsington.Tim said that maybe in the future they will interconnect.Jim Strandberg asked about service territory.Tim said it is currently outside service territory.Merrill said that they need to be addressed in IRP.Tim agrees.Mine is in operation so it should be included.Myron said it will be addressed. iii.Paul Southland asked about Strategist runs.Myron said he needs more information to include in analysis.Clarified that analysis is on cost.Bob - Grimm wanted to make sure that both hydro projects be considered for mine loads.Bob Grimm wants it included in plan as well. iv.Kevin Harper reviewed maps.Jim Strandberg asked about the relationship to the original SE Intertie Plan and stated he wanted a review of the transmission line routes.Jim mentioned line from Angoon to Greens Creek.Myron Rollins said it was not justified.Bob Grimm asked 2 that information be solicited from mining companies so that transmission line planning can be completed.Rick Harris was concerned we were prejudging transmission lines.There could be circumstances 10-15 years from now that could make transmission lines feasible.Myron clarified that this is the transmission line screening evaluation.Jodi Mitchell commented that Tenakee Springs was not represented.She said they are very sensitive about any interconnection.Representative from SEACC said he would follow up with Tenakee Springs.Bob Grimm thought mines should be included in the high load case but not the base case.Bob Grimm wanted to show a connection between Skagway and the Yukon Territory to meet mine loads estimated at 1,500 GWh. b.Fuel Price Forecasts i.Kevin Harper passed out fuel price forecasts. c.Committed Resources i. ll. lil. Black &Veatch requested information on Committed Resources, including detailed project description,schedule,budget and status.The following committed to provide the requested information: Thayer Creek -Jodi Mitchell/Peter Naoroz Whitman Lake --Andy Donato Reynolds Creek -Bob Grimm Gartina Falls -Jodi Mitchell Blue Lake expansion -Chris Brewton Metlakatla intertie--Paul Bryant Kake/Petersburg intertie -Robert VenablesBobGrimmaskedwhowasgoingtodeterminehow much grant money to ask for.Jim Strandberg said format of IRP needs to bein support for capital appropriations and there is a need to have a unified list that is well thought out and organized.Black &Veatch will look at several financing scenarios. Tim McCloud asked about the sustainability of transmission lines in the future.Jim Strandberg said the SE Intertie Plan was the starting point.He referenced the work by Dave Carlson on transmission line planning.NAWWNd.Load Forecasts i. ii. Kevin Harper reviewed the load forecasts for all sub regions. Philosophy -Reference Case is projected loads if no changes are made to current trends.High Case and Low Case are compared to the Reference Case.Two elements of High Case Load Forecast -economic growth and electric vehicles.Low Case -function of aggressive DSM/EE,biomass conversions and rate structures to discourage energy consumption. Myron Rollins said Black &Veatch is assuming that current fuel prices are in a spike and that they will come back to ISER forecast.Duff 3 Mitchell said that is one assumption but that there are other scenarios. Myron said load forecast includes significant load conversions.Jim Strandberg said the AEA uses ISER as a partner for estimating fuel price forecasts.Rick Harris clarified that Black &Veatch has been instructed to use ISER forecasts.Barbara Stanley asked about how population forecasts are used in the analysis.Rick Harris said that the report needs to clearly present all the variables used,load,population,etc.Kevin Harper said data was on website.Eric Wolfe asked if there was a DSM/EE component.He also asked if the Low Case and High Case Load Forecasts were equally probable.Kevin Harper said it was an interesting question but probability is not being included.Tim McLeod stated that utilities investing in options such as biomass should be included in load forecasts. iii.Myron Rollins asked for input on conversions to space heating.Should it be limited to current oil consumers or loss of current users due to conversion to bio mass.Tim McLeod said Black &Veatch should look at future conversions and also current users might convert.Steve Henson stated that Wrangell's load has increased 45%due to conversions.Current electric rate is equivalent to $2.68,biomass is $2.58.Investment in boiler was about $5,000.He doubted existing users would convert. iv.Jim Strandberg asked if there was a capital amount for DSM.Kevin Harper confirmed that there would be.Myron Rollins said that the estimate was not complete.Larry Edwards asked for changes in load forecasts related to electric vehicles.He wanted to see heat pumps incorporated into report.Kevin Harper said there were limitations in modeling.IRP was a directional document not a specific detailed tool. Jim Strandberg said there was a requirement to review technologies (i.e.,heat pump vs.biomass).Myron said Black &Veatch was still reviewing it. v.Peter Naoroz stated that the driver in SE was fuel.He asked about sensitivity of fuel forecasts and whether that should be the focus.Kevin Harper commented that high fuel forecasts was probably not required because preliminary results already show that something should be done to avoid diesel.This was different than the Railbelt Regional IRP which had natural gas as the fuel source.Rick Harris stated that we already know the relative differences in the price of diesel.Duff Mitchell was concerned about the use of ISER numbers.Jim Strandberg suggested he put his concerns in writing. vi.Bob Grimm commented that different sub-regions have different concerns (e.g.,Skagway is concerned about cruise ships).Concerned that load forecasts do not include really large loads such as mine loads. 7.Presentation on Roadless Rule -Tom Waldo,Earth Justice a.Rick Harris introduced Tom Waldo (lawyer representing SEACC,Organized Village of Kake and other groups)and stated that IRP consultant needs to understand the various interpretations of the Roadless Rule (RR)and how that could affect proposed projects.Dan Lesh commented that their understanding of 4 the RR allowed for projects to be built.Jim Strandberg said that this discussion was narrow and limited to the SE Alaska IRP.He said this needs to be a straight presentation of the facts with no interpretations.Tom said he might include some interpretations but will try to be as objective as possible.Jim Clark (lawyer representing other parties)was also recognized. .Tom stated that two lawsuits are currently being considered.He has been with Earth Justice since 1989 and has long-term experience with the RR.The conservation groups he represents would like to see communities connected to clean hydropower.He stated that the RR is not an obstacle to development. .Inlate 1980's,the USFS had 400,000 miles of roads on lands.They couldn't afford to maintain them and tried to adopt policies to deal with issues.ESA also became an issue along with clean water.RR was adopted January 2001.Tom passed out copies of the RR.He stated that the RR applies only to undeveloped areas of the forest.Two prohibitions:cutting timber and building roads with a number of exceptions.Cutting timber,if incidental,is not a problem.Road building is the problem with the RR. .The Federal Power Act (FPA)contains language that prohibits the USFS from making blanket roadless conditioning in FERC licensing.The USFS has to consider the specific facts of a project including the benefits.If the applicant can demonstrate benefits and cost savings of a road then it could be allowed if environmental protection is ensured. .Dave Carlson asked about geothermal.Issues related to the building of transmission lines are not as clear.Tom stated that the RR does not prohibit transmission lines,but probably precludes roads to go with the transmission line. Three exceptions:1)project lines would be part of hydro project and acceptable, 2)if transmission lines are built with roads using Federal money,then transmission lines could be built along with it,and 3)the Kake Petersburg Intertie due to court order. Tom stated that transmission lines in SE Alaska were all built without roads due to economic reasons,so the RR shouldn't be a problem.According to information from the USFS ROD,the cost of building the STI was $8 million greater with a road and maintenance costs were also higher. .Jim Strandberg said one issue was the routing of transmission lines along existing USFS roads.He asked if that was okay.Tom stated that the RR would not affect it. .Duff Mitchell stated the State has recorded ROW's for transmission lines.He asked how the RR affects that and existing land use.Tom did not have a definitive answer but says lines prescribed by statute would be okay under the RR. Geothermal is like roads,no prohibition but could prohibit roads.Geothermal is an acceptable use. Dave Carlson expressed concerns that Whitman Lake required signature by the Secretary of Agriculture.This would hamper new development if all decisions had to be made by the Secretary of Agriculture.Tom stated that this does not need to be the case,but due to extensive litigation all decisions are currently going 9through the Secretary of Agriculture.This method is not intended to be the long- term solution. Rick Harris asked why specific projects are included in the decision.Tom didn't know why but probably not required.Judgment included them to provide reassurance to project sponsors. Bob Grimm asked about on-shore wind power that requires a road for installation. Tom commented that a road would a problem with the RR.Could be exemptions but as a general rule roads would be prohibited. .Jim Clark reviewed the FPA legislation.He thought legislation was too circular to ever reach a decision.Tom stated that he thought there would be a solution because the USFS had to consider all aspects of a specific project.Second question was about highway funds could be used.The Secretary of Agriculture has to consider public needs versus land reservation for roadless.Jim Clark said the Secretary would have to make a tricky determination due to conflicting language. Andy Donato said they were able to a special use permit for Whitman so it is possible. Dan Lesh says that SEACC wants to see projects that make sense happen. Rick Harris asked whether conservation groups could really help developers and commented that the RR is the rule and could have significant cost impacts on projects. Eric Wolfe asked if the rule addressed temporary access roads.Tom said they were prohibited. Peter Naoroz asked about the exemption regarding federal highway funds.He also stated that the State should start on formalizing existing ROWs.He asked about the Tongass exemption and its relationship to the RR.Tom stated that he has always supported the Tongass being included in the RR.Didn't know how the RR would affect native rights to access lands and communities.Peter Naoroz wanted to know if Earth Justice would support Kootznoowoo development.Tom said they would have to look at it on a case by case basis. Dave Carlson said he was concerned about the lack of clarity in the RR.He stated that there has to be some certainty in the development process. Rick Harris reiterated the need for clarity as it relates to financing and bonding. Tom stated that he sees no concerns for hydro projects. Jim Clark asked people to read the specific page of the RR as it relates to existing hydro projects. Paul Southland asked if the USFS was in agreement with Tom.Barbara Stanley commented that the USFS is not totally in agreement with either attorney's interpretations of the RR.Her advice to Black &Veatch was to continue to evaluate new projects in order to identify the next projects.Move forward in planning despite the RR.All projects that have been sent for Secretary approval have been approved. Jim Strandberg asked whether Black &Veatch should assume reasonable economic access to the projects.Barbara Stanley said that that is not a given. Dave Carlson said that all projects need to include RR as a risk of the project. y.Bob Grimm asked about the project list included in settlement.He asked whether conservation groups are in support these projects.Dan Lesh said he can assume that those projects are exempt from the RR.He wonders why problems should be added to renewable energy projects. z.Eric Wolfe commented that the RR should be included as part of the risk assessment for the projects. aa.Rick Harris said the issues associated with the interpretation of the RR should be included in IRP and ended discussion. 8.Black &Veatch Presentation and Discussion (continued) e.Transmission Screening i.AK-BC Intertie l.Kevin Harper stated that the results of Black &Veatch's economic screening of the AK-BC Intertie show that neither the export case nor the import case is viable under current market conditions. However,looking out 50 years,it is impossible to conclude that it will never be cost-effective.He also stated that the screening analysis did not include certain costs (e.g.,improvements to the SEAPA system)that would negatively impact the economics. Paul Southland thought that Black &Veatch should use the 2018 California Renewables Referent Price as opposed to the 2011 value.Kevin stated that the 2018 value,discounted to 2011 for the effect of inflation,would essentially be the same value. Paul Southland stated that the screening ranges should be narrowed and that all public comments should be appended to the Final Report.He also would like to see an assessment of required SEAPA system improvements,with and without the AK-BC Intertie. Jim Strandberg stated that the State has asked that SEAPA be part of future discussions regarding the AK-BC Intertie. Dave Carlson noted that SEAPA has not seen a business case from the AK-BC Intertie proponents. Eric Wolfe noted that the impact of FERC Order 888 needs to be understood. Peter Naoroz stated that the region needs to think big.He noted that Canada is a Kyoto protocol country and,as a result,there are carbon arbitrage opportunities. Jim Strandberg said that the AEA will continue to look at the Intertie and will commit to working with BC Hydro.He also encouraged the proponents to come forward with a business plan, including clear statement regarding who will take the risks of ownership and maintenance. Eric Wolfe noted that there is a need to evaluate the upside and downside risks. ii. 10.Rick Harris stated that the AK-BC Intertie is a strategic type of investment and there is a need to understand the drivers of the economics.According to the Black &Veatch analysis,this is not a viable project within the next several years.The Intertie should be reconsidered in several years if market conditions change. Regional Transmission Segments 1.Robert Miller,Black &Veatch,explained Black &Veatch's approach to the screening of regional transmission lines.Black & Veatch started with all communities that needed to be connected. We tried to identify loads and what would be the right sized line. 2.Dan Lesh asked if best case alternatives have been compared to everything else.Myron Rollins said that they have done the initial screening analysis considering energy flow and cost of the line.If the cost was drastically higher than diesel it was eliminated from further consideration.The economic model (Strategist)will look at remaining lines in conjunction with hydro projects.This second stage modeling has not been done. 3.Paul Southland asked about reliability and cost for maintenance of submarine lines.He commented that high amounts of submarine cable are hard to maintain based upon comments he has received from utility managers.Robert Miller commented that overhead lines have advantages but it is a balancing act. 4.Jim Strandberg asked how the D.Hittle study was used.Robert Miller said he included the results of previous work. 5.Jim asked that the transmission piece be better explained as the presentation was confusing.Barbara Stanley said that the USFS had a lot of questions about transmission line routings.Tim McLeod commented on the need for a line from Juneau to Berners Bay. f.Other Aspects of Black &Veatch's Evaluation 1. ii. ili. Vi. Kevin Harper provided an overview of the DSM/EE screening evaluation and the results. Myron Rollins discussed hydro projects.Started with close to 300, screened down to list of about 30 based upon development activity.Risk analysis includes licensing,development,economic benefit. Scott Newlun asked if a provision could be made in the plan to move projects up the list. Paul Southland asked for a chance to review the sorted list prior to publication.Jim Strandberg said it was his intention to have the list reviewed prior to publication. Bob Grimm asked for a written analysis of the projects. Paul Southland asked if the analysis could be split into near-term and long-term with more detail on the committed projects. 8 9.General Discussion a. b. c. d. Eric Wolfe asked what the next meeting will be.Rick Harris was unsure but thought maybe a sub-committee might be good. Paul Bryant asked for a technical session in order to be confident in the results. Tom Crafford said there was a need for more technical information. Bob Grimm mentioned the mining loads are huge impacts to the system.He also suggested Black &Veatch look at the Yukon IRP. Rick Harris stated that he was frustrated with the lack of results and was concerned that the IRP is behind schedule. Jodi Mitchell wanted to a chance to review at least a week in advance and wants to make sure correct data is included in the report before being published. Barbara Stanley also stated a desire to review the results prior to publication. Dave Carlson pointed out that planning processes are only a snapshot in time. Things change and the IRP needs to be periodically updated.Projects get built based upon the business plan and that's where we need to get to. Paul Southland wanted to correct the minutes of a previous meeting.He thinks we should look at load growth forecasts in British Columbia. Tim McConnell stated that he thought the AK-BC Intertie issue was distracting the main purpose of prioritizing the list of incremental hydro and transmission lines needed for southeast Alaska. Scott Newlun stated that he thought maybe a fuel price offset should be part of the plan.Wanted a provision to move projects up the list. Jan Trigg mentioned the benefits that mines bring to the community.Low cost power to electricity means mines can stay open longer which is good for the community. Peter Naoroz restated the need for the region to think bigger.He wanted to know under what conditions the AK-BC Intertie should be considered. 10.Meeting Adjourned -Rick Harris. SEAPA Board Meeting,Juneau Alaska, November 9,2011 Operations Report Background Information Analysis of Whitman Solar Lighting Project6Solet-LEDvs 6 HPS Parting Lot Lights 6 x 1,000 Watt High Pressure Sodium (HPS)lights Net energy used by new Solar-LED lights: 6 x 220 Watt Light Enutting Diode (LED)lights:4.0 wm 6 x 310 Watt-hour/day solar energy generators:(2)awe Net energy usage for Solar-Enhanced lights:8 awn Energy saved by new lights sincé Jun 13,2011: Growing energy savings in other forms: oe Doe Ce 1 -git (sakete]er coSEqualtoabout .oo s'peg fsreits Equal to about Equat to about Equaitoabout $245 5,338 271 401 m0 07 pec kWh &%of COZ emtied gatons of gas tanks of propane SOTERA Tra Nem nN mmr erQR 8 7 NRO Re pnMRR,REE TESS SME OF TEINS QO SAS ESTE TY 0 PETE SNOT AT MERTEN ETE AY SETS REE SIT IE BRR EET ET USERS RE MEET PENG I RO ENE FOSS TT 2011 Operations Plan -June Board Meeting Swan Lake Elevation weather. 1fl 2/1 3/1 Af1 5/1 6/1 7/1 8/1 9/1 10/1 11/1 12/1 340 {330 - 320 310 +:S CRD eee :_-ae!a 5 'l fi 1 '1 M 1 i '1 1 1 1 'u '1 !'!i i ''.i t 1 *'i a i tt''1 fa 1 i t 'ij t t .Li 7 1 4 1 Lj -$--A4f---4---------4 WF ---i,wn a re en penn nnn ee.srt ne qe nmr een J+7 -Ay nap nn he nn ne nn ee ee eee+511'Ly Ly i i 4 1 ''1 t 'i 1 i i t'1 .t 1 1 i 1 ''oy !1 !i i 'i f ''Lj 4 'i t t11''t 1 'i]11'''t LT 'i ?1 t 'i '1 1 ''I4'!t t 'i 1 i 1 re -{ane -see of o-ee 4 ee fe ----}wee we ---------41tt''t i 't 4 1i'8 i 't !!t 8 1t,J ''t i i t 'IrT1t't t i1tLf !!:SO much for weather !!!280 pmo oe aoPo fgrecasting 1 -ait V/lo2f1 3/1 4/1 S/l 6/1 7/1 8/1 9/1 10/1 11/1 12/1 STRETT Tr tgp ree nme ee ane me or SOD RE Ce RE TEE Le ee ee fe! 1» + 2. ee ee 4 rn Pr nn pe re nn ge een een ea eee een eee pen cen=ay eeeeee ee ae wpe eo ee ee nn nnn 4--- Min 1250 1390 |---- |1370 + ' ' 1 1 1 ' i 1 fl iga) a ay se dd Lo ivhixfoEB|' ' 'Boa & 1wy iw fea n>Sleebmns ©a a - 1a a.y> 1& 7x ! | 1&6 Con! «< 'oQ 'ex oS a Rocel Ned a ¢ ! nee mnneece 422 =o----4 NSE SEE >'|'¢ |%| -- -4--,PF¢.-.4 wannnnnnne = ikethe|' += ' ! *t 'eee %he www | r * te| H weeet ooo: pornseeneny" oy ' ' *G* Hi aWi¢ \ j an a 7!!t tt [ae)© So SoS tap| fun) oan|n Mm w va) ve) ren nN nN - ae] 4 et eq 12/2611/2610/279/278/287/296/295/304/303/313/11/3012/31 a ae a em pe ce ee i es en re ee er gee ca ny rer eee gE Ne SL nt ae cweeegee |_http://pajk.arh.noaa.gov/cliMap/akClimate.php SS” Ketchikan Airport OR Jan.Feb Mar Apr May Jun Jul Aug'Sept Oct Nov Dec _total .Hist Normal 11.94 11.33 11.15 9.85 8.7 6.95 6.43 914 12.18 20.29 15.73 13.7 137.4 2011 1489 125 1005 617 9.82 2.84 10.72 17.73 28.33 24.13 137.18 24.7%10.3%-9.9%-37.4%12.9%-59.1%66.7%94.0%132.6%18.9% Swan Lake weather station and river gage averages 165 in/yr _During wet weather in the August to November period, loads are naturally low and not appreciably affected by the temperature,but our municipal members generate to "all get-out”to avoid spill..........Net load to SEAPA decreases. SEAPA plants are dispatched last! A conservative 2011 number for Spilled Energy to date is 26,000 MWh BAe RUNY 8 RR a NNO RIMES8SA ANN RE UE LR Ee RRO ET TN RRO STI SCADA Integration-Control Engineers Type this address in your web browser to see actual real time generation and transmission values for the SEAPA system Set Automatic Refresh Interval 1 rainute poteToTPEPRES3 http://10.9.8.6/STICSView.aspx |Refresh Now | 115 KV SWAN-BAILEY LINE ry 115 KV SWAN-TYEE INTERTIE SF -f} L1 u '2 17.70 MY sT43.99 MVAR 414.38 KY 93.00 AMPS $1-526 $2-526 60.041 FREQ $1 $2 SWAN LAKE 9.91 mv |9.85SWANLAKESITEO17wyar(0.17 6.4 |TIDELEVEL 418 AMPS |_414 54.0 FLDV |49.0 339.0 FLDA |_385.0 sT414"7 ey o14 69 KV TYEE-WRANGELL LINE -o T10L2STi1 1.73 MV -1.77 -5.43 MVAR |1.40 115.14 KY 116.32 28.18 AMPS|11.23 60.023 FREQ!60.011 GT G6T2 T1-526 72-526 T1 T2 T10 11.07 NIV -1.79 MVAR 70.41 KV 91.78 AMPS 60.024 FREQ TYEE LAKE SWAN/TYEE CONTROL 480 MW |4.82 STC TOTALMW |29.38 0.02 MVAR |0.03 13.75 KV [13.75 Cuent Date/Time 202 AMPS |203 |11/8/2011 17:33:09 | 60.6 FLDV [61.6 Data Timestane (AKDT)223.9 FLDA (224.1 [11/8/2011 16:3199 pM ar mre roi se IY gen ne CE Fa a ma na me EMM OREO BS NS RMR ANN TR ne A RL IF NN RO ERENT PRN ee howe pee PIO Eo SEAPA Office (|)=WEB-App_Next Steps SQL Server database (relational)on _dual raid hard drives Data is pitched (one way)from either Tyee or Swan depending on which plant is - controlling the system Tyeeor Swan Powerplant |.STICS Dashboard Set Automanc Rewesn wntercal ut an [oe an stu a head Tw ee Public will have access to seusurere jee]Temmccenmey FTE SEAPA Server for water levels ast ESe os and generation year to date graphs v 1 second operational data to the municipalities. Achiles Oiversion SEAPA Board Meeting,Juneau Alaska, November 9,2011 Whitman Analysis Unit 1 -only operates between EL 379.8 -EL 370 o Horizontal Francis Turbine EL $250 .o Rated capacity -3,900 kw77Ao,o Rated head -345 feet ©”Me o Rated hydraulic capacity -150 cfs é E e Unit 2 -operates year-round to deliver flow to the hatchery -discharges Res 53 to Head Tank Pry c .o Horizontal or vertical Francis Turbine se é \,o Rated capacity -700 kw =Spillway Crest =Haichery and Incubation supplied ©Rated head -31 0 feet Whitman Lake 7 EI.379.8 $by either Deep or Variable Intake o Rated hydraulic capacity -32 cfs a \3 \iDeepintake---___'gsEl-285.0 \Saeed poEtsen|intake 4 \4,60,000 ene WhitmanGeneration(OutputindailykWh) t % Variable Intake 4%vy 4%,50,000 -(j "aii aeEL370.0 -360.0 %2 =ies im »et'+°,tes ,3 40,000 Av Mad :pivots <a i veos4%a Fs an |AsLegend%'a4 2 30,000 Ce ae peg Se ee 4 BWwhitman OutputU1 A Existing stream gage station %°,5 20,000 .J mwhitman outputu2 A Agency recommended contrat Ei 489 ° points for instream flows head:Pr R Van 2ihseinemegveinavanewenoy Vank Uae SS RASRESRASRDARARBSRARARAKRAR--aereee”gh FSSSFSFSFRFSSSRSSSSSESSHESSRSwes}FERC-Licensed Facilites oe ye oo gsegaiaagag Non-Project Facilities Tailrace EL 1.8 Unt No.1 Unit No.2 Fish 4 fish barrier 3,900 hw TO kW Hatchery +Fish Ladder 8 Hydro /Hatchery Coordniation Contract VY.Y SEAPA Board Meeting,Juneau Alaska, November 9,2011 Whitman Analysis What is meant by load? What is meant by generation? What does it mean when we say we have loaded a generator? What does "firm”energy mean? If a reservoir is rising does that mean it rained a lot,or does that mean fuel storage exceeds current fuel use? If you had to guess,using annual average rain fall at Swan Lake,how many times would that rain fill the reservoir,once?,twice?,3 or 4 times?,6 times?Another way,how many volumes of the Swan Reservoir does the annual precipitation represent? FS SRmI te ARN IE SARS WE ERAT RTARTA ERE IE TT CREARAAEMACR FER A RATNERASPTRRSI AEE NER I LAR A RR NEED IEETAT pe AE PAR PRR RE Te OR me Eg te 4 |SEAPA Board Meeting,Juneau Alaska November 9,2011Whitman Analysis , What does our total system daily load look like? Monday,December 20,2010 50 +--- 45 +Se an ate en Se a nile nn ne nai nena lhe ie Re Nat enenHeenaoe oe eee nny ee tenet me onanaemety ©eg tenetateen en meme enruanp 43 pos --wea rs wag -ns . 38 Sen aneeee _ 20 -KPU Load nah OM ah AeA dart aM Ls ty fen edn BRM cn then pa mth at15-pide BO MPNe uae hah te brooronet nial * .OOO tan ara,»13 'Preeti manatee a PTG+WRG Load eres LoadsandTransmissionLossesLoad(MW)Nvw0:001:002:003:004:005:006:007:008:009:0010:0011:0012:0013:0014:0015:0016:0017:0018:0019:0020:0021:0022:0023:0010 STR ee net ome eee November 9,2011Whitman Analysis © prCY . 'SEAPA Board Meeting,Juneau Alaska Net load to SEAPA shown here _Friday,November 04,2011 L1-KTN--T-10 (WRG+PTG}==6T¢ (MIA) peoy pure uonjesauay 11 FR re ee rem Lm an PRAT oO mRhe PAR RR ae OE TE ES Um SEN eR NM RA aE NENT FT RRM I NR AR RET SIRES BR UNREAR TE BR a ARIRR ERD RO CGR me Fee SPAT epee ggg cme ap :SEAPA Board Meeting,Juneau Alaska November 9,2011Whitman Analysis | Friday,November 04,2011 14 13 -coe ee ee a a ee ee ”+-wee ee wee wee:a ee a ee eee we :nee .ee ce 11 -- oO:SEAPAUnitGeneration(MW)oeNwm&wan l2woI1ii]ij +7 i t i t 1 f t t t f t {t +"|°o So io)So lo]°o fo]So oS Lo]©S oOo So fo)So fo)o ©oOo S ©Lo]©oS 1 +4 4 4 4 +4 4 "4 1 4 N N N nN --S$1 --S$2 Tl ----T2 Swan Lake in Fast Draft,Tyee Unit #2 off-line,Tyee Unit #1 in I-synchronous mode, Swan dominant generation and Voltage support,Tyee dominant frequency support 12 Lye TR RW eR Tan eer eS ET mR eae ET OE SEAPA Board Meeting,Juneau Alaska, November 9,2011 System Delivery Constraints Swan Tyee Control System (STCs)uses load tables that are set up weekly to meet load in a given way.Either Swan or Tyee can be set up as the dominant generation facility, and either Swan or Tyee can provide the majority of frequency control and/or voltage support.Inherent it the tables entries are allowances for load following margin,spin reserve,and top end generation limits to allow for voltage support (VAR production or consumption). Therefore constraining the model to use the load table constrains the evaluation to account for these system stability issues. This uses more water than not accounting for system stability issues and puts Whitman in a better light. pO Re eS REE Annea So te ea Whitman Analysis Swan in Droop Tyee in l-SOC STC load |SWLLead SWL 2nd T1 T2 4.2 .O O 2.1 2.1 10 0 O 5 5 14 O O 7 7 16 O O 8 8 18 O O 9 9 20 6 O 7 7 23 7 O 8 8 24 8 O 8 8 25 8 O 8.5 8.5 26 9 O 8.5 8.5 27 10 O 8.5 8.5 30 11 O 9.5 9.5 32 6 6 10 10 34 7 7 10 10 36 8 8 10 10 38 9 9 10 10 40 10 10 10 10 42 11 11 10 10 43 11.5 11.5 10 10 44 11.5 11.5 10.5 10.5 Slow Draft-Table 1 av B&V Load Fest abe Monthly Load Fcst/ |daysin Month Each Monthly average Interpolated between Mid month values WwOANAWH&whNNNDNBeewBeeeBeeeobWNOWOYAWH&WHPO24 Shape Factor Winter 0.8368 0.8172 0.8101 0.8042 0.8230 0.8795 0.9921 1.0747 1.0755 1.0782 1.0802 1.0712 1.0561 1.0427 1.0381 1.07397 1.1366 1.1468 1.1318 1.1083 1.0721 1.0122 0.9459 0.8872 Model total system loads 45.09 40.00 35.00 + 3900 25.00 - 20.00 15.00 10.00 5.00 - 0.00 8760 load values 14 ,SEAPA Board Meeting,Juneau Alaska _ Monday,December 20,2010 SO rn mn nt re ai a nerrte ne oe te ae a cae ne seat meena 7 November 9,2011Whitman Analysis : 48 .: S45 a oe cer ges - 28;oo Tr .+System Loads shown eet "at left,how SEAPA §3)|||,and the municipality225|:chee gn ru toad _utilities meet that Eis.pane mminntincnitnnepauneerrrneremmnent|Laad shown below213-ctectacnectt te gets Dane PTG+WRG Load " ©10 ge 73 3 . Monday,December 20,2010 ;a | 50 - ----- -a -----a a -- 43s ..43 -SEAPA provides =8:100%hourly Load 23} .&30.following 2 a Sothereisnoreason §2 tomodel municipal =?SEAPAHydro | ma”)i plants atthe hourly =*| . : 5 KPU+PMPL Hydro Genresolution.og :0 0:001:002:003:004:005:006:007:008:009:0010:0011:0012:0013:0014:0015:0016:0017:0018:0019:0020:0021:002299w23:00 SEAPA Board Meeting,Juneau Alaska, November 9,2011 Whitman Analysis ConstraintsInputs Outputs *Starting Reservoir level *Reservoir Storage Curves *Daily Reservoir eInflow-Daily Avg.by drainage levels *Spin Reserve eSystem Load-hourly Avg.*Diesel Gen-Peak *Load Following Margin (MW)by hour *Because KPU PMPL do not follow load,Municipal Hydro *Voltage support Criteria *Diesel Gen-lack of Entered as a daily average storage at SWL by *KPU Diesel if SWL <278 ft hour *KPU diesel if : System Load >40 MW *Hydroplant Generation by hour *End Reservoir levels 15 2010 2016 2016 2036 2036 Table 1 Base case Base Case Whitman Base case Whitman Total Load 254,452 314,568 314,568 350,399 350,399 SEAPA Comparison Generation (MWh)165,894 203,144 194,570 223,491 212,684 SEAPA Lost Generation (MWh)na na 6,274 na 7,348 Diesel Generation,D1+D2 (MWh)0 15,675 11,568 28,320 24,681 KPU Hydro (MWh)75,839 75,839 92,339 75,839 92,339 Blind Slough Generation (MWh)12,719 12,719 12,719 12,719 12,719 Swan Lake Generation (MWh)68,462 81,535 79,426 82,767 82,130 Swan Lake Diesel Adjustment (MWh)0 2,323 1,061 3,929 2,782 Swan Lake Adjusted Generation (MWh)68,462 79,212 78,365 78,838 79,348 Swan Lake Spill (dsf}17,671 0 3,549 0 0 Swan Lake Start Elevation (ft)315 315 315 315 315 Swan Lake End Elevation (ft}325.89 309.00 312.26 304.84 307.81 Tyee Generation (MWh)97,432 128,799 118,515 150,754 138,530 Tyee Lake Diesel Adjustment (MWh)0 4,867 2,311 6,101 5,194 Tyee Generation Less Diesel Adj (MWh)97,432 123,932 116,205 144,653 133,336 Tyee Spill (dsf)20,565 12,019 13,845 6,362 9,424 Tyee Lake Start Elevation (ft)1370 1370 1370 1370 1370 Tyee Lake End Elevation (ft)1,379.4 1,360.0 1,365.3 1,357.4 1,359.1 Total Diesel GenerationD1+D2+SWL Adj+Tye Adj 0 22,866 14,940 38,350 32,657 i7 SytnernaeNeae ETE SEE A RR RY LR TRY Re Tog Rp Soeee SMERE meRIOe T pest eter Swan Inflow-Derived from Rain Records and Calculated from Plant Data :2000 InflowstoTyeeLake,cfsza ce a "Bes =4 ate et800-Bieny 5 ele:"zt{eaal;600 .13 i oe ie:Bl } 3,500 2,500 $2,000 3 | =1500 ||\|1,000 i |i I i NiIWACAyLANES500Ni\Nh Wh \NN a4ASHhPAWfli vai HM WiaiRyutensilTWAwaiih1stafi5/1 6/1 W/1 8/1 10/1 14 Tyee Lake inflows ane . .:USGS Gage 15019990,1502010:1964to1981Data,non-coneurrent oo2400'. ,4 a Sead ge |te ee DeeedBOBEeaeFARSESESEiEsaecshSollpatil 7s EEtefsE%a : 2200 "Fee ESTERF mt 9 ays 80 73eSLH -seby'uliitWeana)ERS oon wee ee Often inflows are within +/- 5%of average annual volume,but the timing of the water significantly varies, 165 in/yr=308,000 ac-ft = 425 cfs flat =72,600 MW h which is slightly below our expected value of 75,000 MWh.308,000/84,000 = 3.67 reservoir volumes Tyee Gage data from IECO plant design work,gage data shown which includes low elevations areas.These areas subtracted out from the gage data,1980 year selected green trace.Note the lack of winter inflows. Tyee reservoir spills at Elevation 1390 feet. 18 Mn a Se ¢== (532) Moy yuejg pue moyuy > i) Seana oOo eG oc o ©} J SOoo0oeceooe8dcooeosd 6S e aDn OKE OH TM N AO 11n n LFif j - L£/2T m z/@t S R/T 2 g zT/TT = ' 87/0T 3 3 €T/OT g c 87/6 Y . 67/8 E tT/8 : og/z (sy2) Mojy juejg pue Moyuy >= St/t S - a S= 0€/9 A " = st/9 | a E p ae/et = Te/s | | r @T/eT ae) 9T/s 'th : L ¢2/TT = ts 3| + ¢t/tt wss ot/ : 3a Ve = | 8z/OT 8re 8 L €t/ot}| @g L Lt/e = 7 rats S r 82/6 | / et) | L €T/6 R : r 82/8 Te/T 32 t tT/8 O1/T = r o¢/Z T/T _ i) f-] Qo oe oeo o v +ST/L o toe) oS awdalSse c) b=" pwn) en SsS > a |etei= 6 a = L 0€/9 5 +ST/9 (jsws) ;aAB] AOAasay L te/s ” L 9T/s e +T/S 2 LOT/P ieeet no - Lots s& " J t LT/€ wpA)ig|Z2 Leve AS Iz| L st/z ||ae | TE/T |. Lacan deere L OT/T eae ere, Poe pr oath See eee vt ©CneonoeononononndANN ae OSAAWMONH AMA AAA AN NNN NNAw (1SW) }2A2a] slonasay ee|2036 Swan Lake,Whitman,Diesel Generation,daily values E==3 Diesel W/o Whitman E12 036 Diesel with Whitman --Whitman Generation dailytotals(MWh)WhitmanGenerationandDieselSupplement0 .fi 't q i T t T T q Y T T q oH wo NAN et Oo Ht oO OH Qa oor nN Mm -a om ]pe Sa i a|4 foal 4 nN AN etaNNLONOMSNLOTONINNNSSftaANvyTnnmwowownwhwwewoWH If Whitman is going to offset diesel generation,why does it operate when no diesel is burned?One answer would be that the generation from Whitman during the summer and fall would add additional storage fuel in Tyee and Swan,this fuel would be used later during high load periods.....What if the storage is full? ee mee er Te Ha 1 Whitman case in Tyee Spilling with 2036 -- No Spill at Swan a Lake i)Soeoi=)oSoOwyoO "on)NNoiwt 4 i 400 Whitman Generation- sma Diesel Generation --Res.Elev, 2036 Tyee Lake,Whitman,diesel generation,daily values memy T 1 |So i=) oSo o wo =) + "A bs lop) fan) fon) fap] : 4 4 a <4 | f (jsw) }aAB7 BoAasay 1300 (4HW) voneseuas jasaig pue uewyry1280© L£U/%Tw/z - LUfttet/TT87/0T€T/OT87/6£T/662/8tT/8oe/dST/do£/9ST/9TE/S9T/sUSoT/P-theLU/€z/€st/zTE/TOT/TT/T (YHW) uoneseuay jasaig pue uewyM oSoSQooOSoi] So to) nySoa)Qow fo] So ex "oO fae) ONNNts|eiWw Qo wiw26>>)| '6 a - L c :|2 le) c|; > = sj; 27/c 6 S/o] 2 - eS°o= \3 s| 2/8 5 ge] els : CA6 bo SO, ais Ni tT} 2/5eis ¥); 2; a|/ als 2036 Swan Lake,Whitman,diesel 330 320 - 1 0 9 8 270 260 [)sw) JaA87 sonsesay nararanrasLU/TT + e@r/tt + 82/0T€T/0T87/6 r €T/667/8 + $T/soc/Z t St/Z + 0€/9 + St/9Te/s9T/s|T/S9t/r-TfLT/€west/@Te/t9T/T-ft 21 Swan Spilling with Whitman Case Reservoirlevel(NSL)335 330 325 320 315 310 305 300 295 299 285 280 275 +} 270 - 2016 Swan Lake level,Diesel Generation with and without Whitman Ss whe wee j--Swan Level-No Whitman --Swan level-With Whitman =<Whitman gen 9/13-12/121,400 1,200 1,000 800 600 DieselGeneration(MiWh)22 Ferrer gies ree manne ape FT mr ©no ee ee ey me mene cage om neta ments see 7 .mp ee faeleet Seca ae a oan eeinaliaeamenmdin:| The effect of Whitman is defined as the difference in spill between the case with and the case without Whitman.This generation level should then be multiplied by S68.MWh. 2010 2016 2016 2036 2036 2036 2036 FDP-12.FDP-12 Base case BaseCase Whitman Basecase Whitman Base Case Whitman Total Load 254,452 314,568 314,568 350,399 350,399 350,399 350,399 SEAPA Comparison Generation (MWh).165,894 203,144 194,570 223,491 212,684 213,253 208,312 SEAPA Lost Generation (MWh)na na 6,274 na 7,348 0 Diesel Generation,D1+D2 (MWh)0 15,675 11,568 28,320 24,681 28,320 24,681 KPU Hydro (MWh)75,839 75,839 92,339 75,839 92,339 75,839 92,339 Blind Slough Generation (MWh)12,719 12,719 12,719 12,719 12,719 12,719 12,719 Swan Lake Generation (MWh)68,462 81,535 79,426 82,767 82,130 82,767 82,130 Swan Lake Diesel Adjustment (MWh)0 2,323 1,061 3,929 2,782 3,928 2,782 Swan Lake Adjusted Generation (MWh)68,462 79,212 78,365 78,838 79,348 78,839 79,348 Swan Lake Spill (dsf)17,671 0 3,549 0 0 0 0 Swan Lake Start Elevation (ft)315 315 315 315 315 315 315 Swan Lake End Elevation (ft)325.89 309.00 312.26 304.84 307.81 304.85 307.82 Tyee Generation (MWh)97,432 128,799 118,515 150,754 138,530 150,754 138,530 Tyee Lake Diesel Adjustment (MWh)0 4,867 2,311 6,101 5,194 16,339 9,565 Tyee Generation Less Diesel Adj (MWh)97,432 123,932 116,205 144,653 133,336 134,414 128,964 Tyee Spill (dsf)20,565 12,019 13,845 6,362 9,424 0 0 Tyee Lake Start Elevation (ft)1370 1370 1370 1370 1370 1370 1370 Tyee Lake End Elevation (ft)-1,379.4 1,360.0 1,365.3 1,357.4 1,359.1 1,336 1350.13 Total Diesel GenerationD1+D2+SWL Adj+Tye Adj 0 22,866 14,940 38,350 32,657 48,588 37,029 Tyee Inflow for first 2036 case 125,863 ac-ft or 63,455 dsf 23 Tyee inflow for 2036 FDP-12 case .103,579 ac-ft or 52,220 =dsf ee ee ote or es Summary: *We burned diesel this year because Swan Lake elevation dropped below 280 ft.(271.1 minimum). We've been spilling for 3 months at Tyee,for two months at Swan.If Whitman were on-line,there still would have been diesel generation at Bailey,just not as much,but we would spill more. *We used the B&V expected or reference case for loads,but we expect the IRP to promote Demand Side management programs that will dampen load growth in both electrical energy and capacity demands. ¢We have used inflows that total the annual average but have fluctuations that represent actual daily and monthly variation,this is a better storage analysis than using monthly average .Think about 2010,near average inflows,yet we spilled at Swan Lake. *We have used a very flat energy profile for Whitman,if we shape the generation more to match the KPU provided monthly generation values,Whitman will cause more spill than shown here because more generation occurs during the wet period,and less generation will occur in the winter. *We have used expected inflows for Swan and Tyee,but we have used "firm”generation (low case) for Whitman. .---Given all the above,it is more likely Whitman impacts have been underestimated than over-estimated. The effect of Whitman is defined as the difference in spill between the case with and the case without Whitman.This generation level should then be multiplied by $68.MWh. Whitman generation was used as a fairly flat value,if we use the values from KPU, then spill willincrease.: Firm energy is often used in SE AK as a low value corresponding to a less than average inflow,Somewhere around 15%to 25%less than average or expected.IECo stated a "firm”value for Tyee of 130,000 MWh san nenel co :-. sans oe garmee --Fons -_>et NaC ee re sites sme 2036 Swan Lake,Whitman,Diesel Generation,daily values E23 Diesel W/o Whitman Een'2036 Diesel with Whitman --Whitman Generation dailytotals(MWh)WhitmanGenerationandDieselSupplement0 +f i i i t T T T T T T T T T T oH wo +SN Nw ot oOo ot oOo He WH Oo o Tr nm mM4™m 4 ee Se Oo a a 4 my +NN «fa0i?ne 8 a aCea|mM =f Wwmwow Nw eM Oo wo MH If Whitman is going to offset diesel generation,why does it operate when no diesel is burned?One answer would be that the generation from Whitman during the summer and fall would add additional storage fuel in Tyee and Swan,this fuel would be used later during high load periods.....What if the storage is full? 20 TRS TAT UR HT Se BOTT EB TEER ET OYARTURgerne Tyee Spilling with af of Ut/2T ATT 400 odN & c fob) oO n = © VY v md Cc © = = ®© Aw &pe o= =al >g (YH) Yoljessuag jasaig pue uew yyy So=]SooSi=)So [=]2wyoewyouy°o Lm] s+fan] lan) "NN eiLa)wyo nh do, Vy.zzad (4H) uonesauay jasaig pue uewzYyA, GMa ROR renee ope OE eeget ee2gsgetetreTPoeEraeheed 2036 Tyee Lake,Whitman,diesel generation,daily values 1400 oc oclUClUlUCODOUCOS™MCSSwyS&SYHOoWFO&SFaoGA NN Aet HO Le/@1@T/ztLeft + er/tt + 8z/oT Swan Reservoir Lvl. ome Whitman Generation mE Diesel Generation \ -Res.Elev. ét/€zest/Z@TE/t - O/T.t/t LU/Tt L @U/Tt } L $z/0T + €T/0T | - | 8@/6 3: L €T/6 o | 62/8 |& t pi/e Ng: L O€/Z s t ST/L i L 0€/9 PN | ST/9 | TE/s | 9T/s-T/S+OT/P;ct/tif + €T/0T + 87/6 | €T/6 + 67/8 t ¥T/8 | Og/e b ST/ZL0€/9 in - St/9 ee NX i 1e/s Serene - 9T/S+T/S ° /)t OT/P , 2036 Swan Lake,Whitman,diesel een@ation,daily values Te t :oQai)SooOoO Lon) AaaoOaoe r=) fap) NN LT/€ om(ae) ap) fap) Nn N ue (js) [2097 soAsesSe - grt [SUA] JPA87 I y - Te/T - 9T/Ta.T/T [=] Qo o OoSo f-) eo OobONi] oe wo wm fag] oO fag) N = ei wt bn] ei wa (stu) JA] NOAIaSAY 'on eine ieee ee A letter from the Alaska Energy Authority to the People of Southeast Alaska JSS draft -12/14/11 AEA's Southeast Integrated Resource Plan in now in draft form for consideration by Southeast Alaskans. This document was funded by the Alaska Legislature,and is the result of extensive public process over the last year.This is a "call to action”and provides,for your review,an integrated set of actions that can be taken by you,to assure your future of secure and affordable energy for power and heating.We request your considered review of the document. There have been expectations Jast year as we began work on the SEIRP,that this could be merely a list of hydro power projects and transmission lines that would be funded by the Alaska Legislature so that all Southeast Alaskans would have low cost hydro power energy.We have found it to be more complex thgf just a list of projects. People have repeatedly stated to us that SE Alaska must have secure and inexpensive power supplies so that the commercial and private sectors can re-emerge as a force for regional growth.This plan responds to these needs,and addresses all parts of the "energy food chain”,from the sources of renewable energy to the actions that consumers will take as they consume energy in life processes. Indeed,we have found that energy economics of southeast Alaska are unique,and an "energy solution set”must involve both the supply and deliver of bulk energy (generation and transmission,or "G&T”),as well as end use considerations,and selection of fuel supplies.To that end,we have crafted this plan to include capital requirements for investments both in the supply and delivery part of the energy food chain,as well as investments you should make in the "built environment”,i.e.,in electric distribution systems,building thermal envelopes (Improving building insulation and vapor barriers),and consideration of alternate fuels from diesel fuel,to name a few. We want to be clear that this is not an "economic development,or (re)development plan”for SE Alaska. Rather it is a necessary foundation element that must be in place for the region to take its economic future in its hands.We see this plan being useful when individual economic development projects are pursued,such as mines,fish processing plants,and other energy consuming projects.The plan is based on sound energy load forecasts that have been vetted with utilities but do not include energy supplies for speculative projects.There are a number of energy intensive development projects,notably a number of mine projects which are still in formation.We have struck a balance between known future energy requirements,and consideration of the still forming economic development projects. We have also made specific recommendations on the need for coordinated action that must be taken by local governments,electric utilities,and SE Alaskans like you.Given the dynamics of and uncertainties . of land access for hydro and other renewable energy projects,that exist within the federally owned Tongass Forest,combined with the current population declines that are projected,this plan shows all parts of the SE Alaska economy should join in the "solution set”expressed in this plan.Clearly,a functional and effective public/private partnership needs to evolve as a part of this solution set. A word about the plan itself.The document is large,and like so many government efforts,contains a lot of information that can be hard to digest.We have worked hard to present detailed conclusions and recommendations in Section **of the plan,and to provide a complete executive summary,that is still a bit long for my taste.We hope this letter,and organizational "key plans”in the Executive Summary and the Section 2 Introduction will make it easy to navigate in the plan. We wish to take a moment to express some of the key findings of the SEIRP,which should help in getting your arms around the plan.These findings are the essence of the SEIRP and its action plan.We recommend the next stop if you want to get into the meat of plan,would be to review the Executive Summary of the plan,and if you wish to drill deeper,the detailed conclusions and recommendation in Section ***.After that,a read of Section will give you an idea of how the body of the plan is organized. It is proper to thank our primary planning contractor Black and Veatch,and their hydro support consultant HDR for the hard work they have invested in this Black and Veatch work product. Key findings Shortage of Hydro resources -Southeast Alaska has significant hydro power resources,and many parts of the region enjoy the affordable and plentiful electricity from specific hydro power projects that have been developed over the last century.Other sub-regions do not have this economic benefit,and are forced to walk down the path of diese!fuel dependency.This has created a gap or chasm between communities,where stable and "well to do”communities with a "horn of plenty”exist near struggling communities,with empty small boat harbors and breathtakingly high electricity rates,and a notable absence of private sector economic activity are the norm. External energy drivers have deeply penetrated the Southeast Alaska Economy -Diesel fuel has evolved as the heating fuel and non-hydro power generation fuel of choice over the last 5 decades.It was always perceived as being a stable priced fuel,which was easy to transport and use.The recent un- precedented increase in diesel prices has made the search for alternative fuels for heating,and development of economic renewable energy sources a key part of energy planning for Southeast Alaska. These considerations are the foundation for this regional integrated resource plan. The Energy Solution set for Southeast Alaska -In short,Southeast Alaska will not be able to merely build more hydro power projects to chart its future.It must embrace a coordinated action plan that includes energy conservation and demand side management,which are actions consumers and businesses must take,and development of hydro power projects in areas that now suffer extremely high and economically stifling utility rates.The solution set must involve electricity supply,heating energy supply,and considerations of electric vehicles for transportation. Energy solutions for economically distressed communities -Individual solutions for rural sub-regions of Southeast are a must.Angoon and Kake lack affordable hydro based power and are in economic death spirals,while Petersburg,Ketchikan and Juneau are well equipped with previously developed hydro power projects that have been financed by the federal and state governments,and see stable economic futures.Unique solutions for rural communities are identified that give the suffering communities a fighting chance to survive and flourish. The Southeast Alaska Intertie Concept -The vision of interconnecting all of the Southeast Communities into a backbone transmission system has been on the lips of many Southeast Alaskans for several decades.This initiative is in direct response to the reality of SE Alaska that hydro resources are beyond the economic reach of a number of the Southeast communities.While the intent of this initiative has been to provide affordable hydropower based energy to all communities,we find that implementation of the backbone is not economic,and other energy solutions are recommended for specific communities.Two selected transmission line projects that have been a part of the initiative (Kake to Petersburg Intertie and the Metlakatla Intertie)are recommended.The remainder of the connections will include long submarine cables,very high construction costs,and expected power flows that cannot support long run maintenance and operations costs.In short,even if the projects are fully funded by the state of Alaska,expected maintenance and operations costs will exceed significantly the benefits of regional interconnection. The Role of Technology Innovation -Our recommendations offer a multi-faceted energy future,but it is clear that this IRP cannot yield equality in cost of and availability of energy throughout the region.In particular,remote communities are facing a future of continuing higher rates for energy.Expected electrical rates in Kake,Angoon and Ketchikan will remain distinctly different,and this will likely be one key player in the economic future of the communities.For sure,Kake and Angoon,and the utilities that serve them do not have the advantages of Ketchikan utilities of size,and paid for energy infrastructure that is owned by Southeast Alaska Power Agency that has been significantly subsidized by past state funded energy projects.Possible future solutions to this equality issue may reside in focused technology advances in small scale power supply.To these end governmental organizations such as the AEA Emerging Energy Technology Fund,and the Alaska Center for Energy can play an important role in seeking lower cost energy conversions. The Need for Joint Action -Southeast Alaska must mobilize itself to meet its future.While there are significant hydro resources available,converting water energy to electricity and delivering to residents is complex and costly.Also,the relationship of the cost of diesel fuel to the stable price of hydro based electricity has created a unique situation where,for hydro rich sub-regions,it is economically advantageous for people individually to switch from heating with diesel fuel to resistance electric heating.While this may seem a reasonable economic action for a resident to take to lower overall utility costs,it is and has been shown to be detrimental at a community and utility wide level.There is clear evidence that wide spread conversions of energy supply for heating has eaten into reserve hydro power capacity and energy supplies,such that nearly all of the hydro rich sub-regions are needing to supplant hydro power production with diesel fired generation. The evolving situation with access to resources within the Tongass Forest also has cast a pallor on development of new hydro and transmission resources.It appears to be increasing difficult to develop new hydro power projects. With the growth of electric loads from resistance heating,it is increasingly apparent that hydro rich sub- regions will see,during extended cold spells,extended very high power consumption.This leads to a "jumpy”demand profile,where hydro energy is consumed at a high rate in winter months,when available water storage is not being recharged.Thus the region must look to more storage and more capacity,both of which are difficult to find and expensive to build.In a word,it is neither economic,nor practical for SE Alaska to "build its way into the future”with new hydro power projects. This plan suggests that a combined action of energy conservation,use of available advanced technologies to control demand for electricity (commonly called "demand side management”)and control of resistance heating conversions by use of an alternative energy source is the "least cost least risk future”for southeast Alaska.Given SE Alaska's availability of wood resources ("biomass”is anow a widely used term)and a mature technology for manufacture wood pellets that could mimic the ubiquitous availability and ease of use of diesel fuel,conversion from diesel fuel to alternative fuels can be economic and can greatly reduce future energy supply risk. Why is this important to SE Alaska residents?In short,this approach yields the most energy security and expectation of affordable energy costs for residents which is a fundamental goal of this integrated resource plan. While it is clearly recognized that different energy situations exist throughout SE Alaska sub-regions, there are key findings which apply to all: 1.The high cost of diesel is detrimental to all sub-regions of SE Alaska. 2.Conversion from diesel to alternative fuels such as biomass pellets can be economic throughout the region. In all sub-regions,energy futures must be embraced by residents,businesses,local government and energy utilities.But also,and we emphasize this,communities with bountiful hydro power must be willing to consider better linking of energy systems,and collaboration on considering what is the most effective regional business structures to allow all residents of SE Alaska to have reasonable access to affordable,secure energy supplies. We sincerely appreciate your input over the last year,and look forward to your straight,unvarnished comments on this plan.We pledge to consider all comments,and to incorporate your thoughts in the final product. A letter from the Alaska Energy Authority to the People of Southeast Alaska JSS draft -12/14/11 AEA's Southeast Integrated Resource Plan in now in draft form for consideration by Southeast Alaskans. This document was funded by the Alaska Legislature,and is the result of extensive public process over the last year.This is a "call to action”and provides,for your review,an integrated set of actions that can be taken by you,to assure your future of secure and affordable energy for power and heating.We request your considered review of the document. There have been expectations last year as we began work on the SEIRP,that this could be merely a list of hydro power projects and transmission lines that would be funded by the Alaska Legislature so that all Southeast Alaskans would have low cost hydro power energy.We have found it to be more complex that just a list of projects. People have repeatedly stated to us that SE Alaska must have secure and inexpensive power supplies so that the commercial and private sectors can re-emerge as a force for regional growth.This plan responds to these needs,and addresses all parts of the "energy food chain”,from the sources of renewable energy to the actions that consumers will take as they consume energy in life processes. Indeed,we have found that energy economics of southeast Alaska are unique,and an "energy solution set”must involve both the supply and deliver of bulk energy (generation and transmission,or "G&T”),as well as end use considerations,and selection of fuel supplies.To that end,we have crafted this plan to include capital requirements for investments both in the supply and delivery part of the energy food chain,as well as investments you should make in the "built environment”,i.e.,in electric distribution systems,building thermal envelopes (Improving building insulation and vapor barriers),and consideration of alternate fuels from diesel fuel,to name a few. We want to be clear that this is not an "economic development,or (re)development plan”for SE Alaska. Rather it is a necessary foundation element that must be in place for the region to take its economic future in its hands.We see this plan being useful when individual economic development projects are pursued,such as mines,fish processing plants,and other energy consuming projects.The plan is based on sound energy load forecasts that have been vetted with utilities but do not include energy supplies for speculative projects.There are a number of energy intensive development projects,notably a number of mine projects which are still in formation.We have struck a balance between known future energy requirements,and consideration of the still forming economic development projects. We have also made specific recommendations on the need for coordinated action that must be taken by local governments,electric utilities,and SE Alaskans like you.Given the dynamics of and uncertainties of land access for hydro and other renewable energy projects,that exist within the federally owned Tongass Forest,combined with the current population declines that are projected,this plan shows all parts of the SE Alaska economy should join in the "solution set”expressed in this plan.Clearly,a functional and effective public/private partnership needs to evolve as a part of this solution set. A word about the plan itself.The document is large,and like so many government efforts,contains a lot of information that can be hard to digest.We have worked hard to present detailed conclusions and recommendations in Section **of the plan,and to provide a complete executive summary,that is still a bit long for my taste.We hope this letter,and organizational "key plans”in the Executive Summary and the Section 2 Introduction will make it easy to navigate in the plan. We wish to take a moment to express some of the key findings of the SEIRP,which should help in getting your arms around the plan.These findings are the essence of the SEIRP and its action plan.We recommend the next stop if you want to get into the meat of plan,would be to review the Executive Summary of the plan,and if you wish to drill deeper,the detailed conclusions and recommendation in Section ***.After that,a read of Section will give you an idea of how the body of the plan is organized. It is proper to thank our primary planning contractor Black and Veatch,and their hydro support consultant HDR for the hard work they have invested in this Black and Veatch work product. Key findings Shortage of Hydro resources -Southeast Alaska has significant hydro power resources,and many parts of the region enjoy the affordable and plentiful electricity from specific hydro power projects that have been developed over the last century.Other sub-regions do not have this economic benefit,and are forced to walk down the path of diesel fuel dependency.This has created a gap or chasm between communities,where stable and "well to do”communities with a "horn of plenty”exist near struggling communities,with empty small boat harbors and breathtakingly high electricity rates,and a notable absence of private sector economic activity are the norm. External energy drivers have deeply penetrated the Southeast Alaska Economy -Diesel fuel has evolved as the heating fuel and non-hydro power generation fuel of choice over the last 5 decades.It was always perceived as being a stable priced fuel,which was easy to transport and use.The recent un- precedented increase in diesel prices has made the search for alternative fuels for heating,and development of economic renewable energy sources a key part of energy planning for Southeast Alaska. These considerations are the foundation for this regional integrated resource plan. The Energy Solution set for Southeast Alaska -In short,Southeast Alaska will not be able to merely build more hydro power projects to chart its future.It must embrace a coordinated action plan that includes energy conservation and demand side management,which are actions consumers and businesses must take,and development of hydro power projects in areas that now suffer extremely high and economically stifling utility rates.The solution set must involve electricity supply,heating energy supply,and considerations of electric vehicles for transportation. Energy solutions for economically distressed communities -Individual solutions for rural sub-regions of Southeast are a must.Angoon and Kake lack affordable hydro based power and are in economic death spirals,while Petersburg,Ketchikan and Juneau are well equipped with previously developed hydro power projects that have been financed by the federal and state governments,and see stable economic futures.Unique solutions for rural communities are identified that give the suffering communities a fighting chance to survive and flourish. The Southeast Alaska Intertie Concept -The vision of interconnecting all of the Southeast Communities into a backbone transmission system has been on the lips of many Southeast Alaskans for several decades.This initiative is in direct response to the reality of SE Alaska that hydro resources are beyond the economic reach of a number of the Southeast communities.While the intent of this initiative has been to provide affordable hydropower based energy to all communities,we find that implementation of the backbone is not economic,and other energy solutions are recommended for specific communities.Two selected transmission line projects that have been a part of the initiative (Kake to Petersburg Intertie and the Metlakatla Intertie)are recommended.The remainder of the connections will include long submarine cables,very high construction costs,and expected power flows that cannot support long run maintenance and operations costs.In short,even if the projects are fully funded by the state of Alaska,expected maintenance and operations costs will exceed significantly the benefits of regional interconnection. The Role of Technology Innovation -Our recommendations offer a multi-faceted energy future,but it is clear that this RP cannot yield equality in cost of and availability of energy throughout the region.In particular,remote communities are facing a future of continuing higher rates for energy.Expected electrical rates in Kake,Angoon and Ketchikan will remain distinctly different,and this will likely be one key player in the economic future of the communities.For sure,Kake and Angoon,and the utilities that serve them do not have the advantages of Ketchikan utilities of size,and paid for energy infrastructure that is owned by Southeast Alaska Power Agency that has been significantly subsidized by past state funded energy projects.Possible future solutions to this equality issue may reside in focused technology advances in small scale power supply.To these end governmental organizations such as the AEA Emerging Energy Technology Fund,and the Alaska Center for Energy can play an important role in seeking lower cost energy conversions. The Need for Joint Action -Southeast Alaska must mobilize itself to meet its future.While there are significant hydro resources available,converting water energy to electricity and delivering to residents is complex and costly.Also,the relationship of the cost of diesel fuel to the stable price of hydro based electricity has created a unique situation where,for hydro rich sub-regions,it is economically advantageous for people individually to switch from heating with diesel fuel to resistance electric heating.While this may seem a reasonable economic action for a resident to take to lower overall utility costs,it is and has been shown to be detrimental at a community and utility wide level.There is clear evidence that wide spread conversions of energy supply for heating has eaten into reserve hydro power capacity and energy supplies,such that nearly all of the hydro rich sub-regions are needing to supplant hydro power production with diesel fired generation. The evolving situation with access to resources within the Tongass Forest also has cast a pallor on development of new hydro and transmission resources.It appears to be increasing difficult to develop new hydro power projects. With the growth of electric loads from resistance heating,it is increasingly apparent that hydro rich sub- regions will see,during extended cold spells,extended very high power consumption.This leads to a "lumpy”demand profile,where hydro energy is consumed at a high rate in winter months,when available water storage is not being recharged.Thus the region must look to more storage and more capacity,both of which are difficult to find and expensive to build.In a word,it is neither economic,nor practical for SE Alaska to "build its way into the future”with new hydro power projects. This plan suggests that a combined action of energy conservation,use of available advanced technologies to control demand for electricity (commonly called "demand side management”)and control of resistance heating conversions by use of an alternative energy source is the "least cost least risk future”for southeast Alaska.Given SE Alaska's availability of wood resources ("biomass”is anowa widely used term)and a mature technology for manufacture wood pellets that could mimic the ubiquitous availability and ease of use of diesel fuel,conversion from diesel fuel to alternative fuels can be economic and can greatly reduce future energy supply risk. Why is this important to SE Alaska residents?In short,this approach yields the most energy security and expectation of affordable energy costs for residents which is a fundamental goal of this integrated resource plan. While it is clearly recognized that different energy situations exist throughout SE Alaska sub-regions, there are key findings which apply to all: 1.The high cost of diesel is detrimental to all sub-regions of SE Alaska. 2.Conversion from diesel to alternative fuels such as biomass pellets can be economic throughout the region. In all sub-regions,energy futures must be embraced by residents,businesses,local government and energy utilities.But also,and we emphasize this,communities with bountiful hydro power must be willing to consider better linking of energy systems,and collaboration on considering what is the most effective regional business structures to allow all residents of SE Alaska to have reasonable access to affordable,secure energy supplies. We sincerely appreciate your input over the last year,and look forward to your straight,unvarnished comments on this plan.We pledge to consider all comments,and to incorporate your thoughts in the final product. Review Comments -Jim Strandberg Item 1 -General Report Review Comments: While we have continuing discussions of what is in the executive summary and what is in the body of the report,|see the following construct Right from the beginning,and in the section 2 introduction sections of the study,you need to explain there has been significant analysis and planning work accomplished on specific power generation and transmission initiatives and this study will build on that previous work.In particular,there is a need to address the long standing Southeast Intertie Plan that has envisioned tying all of the communities of SE together in a single grid. You have some decent language in Section 12 -Transmission,so the Section 2 language should express the planning concept at a high level,discuss how the analyses of power generation alternatives,energy technologies,financing alternatives,and so on are developed and linked together in a comprehensive regional integrated resource plan. In many ways,this section should be where someone can go to understand the structure of the plan, where the content of specific sections are explained.As we have discussed earlier,the document must be reader friendly,and you need to extend a hand in text to help people get where they need to go in the document. Some Language in Section 2 that starts the conversation with the reader could begin as: "Our goal has been to develop a detailed,cohesive and detailed plan that will be of use for all people of Southeast Alaska.This plan is the results of our effort.It is a large and complex document,which likely will be used in different ways by different people.There are specific sections that develop different aspects of energy planning that are building blocks for the cohesive plan.Here is a description of the different sections of our plan Item 2 -Section 2 -Project Approach This section is a skeleton at best,and needs to be filled out. Item 3 -Comments on Section 1.1 Key findings Historical Crossroad (see written comment) Shortage of Hydro resources -Southeast Alaska has significant hydro power resources,and many parts of the region enjoy the affordable and plentiful electricity from specific hydro power projects that have been developed over the last century.Other sub-regions do not have this economic benefit,and are forced to walk down the path of diesel fuel dependency.This has created a gap or chasm between communities,where stable and "well to do”communities with a "horn of plenty”exist near struggling communities,with empty small boat harbors and breathtakingly high electricity rates,and a notable absence of private sector economic activity are the norm. External energy drivers have deeply penetrated the Southeast Alaska Economy -Diesel fuel has evolved as the heating fuel and non-hydro power generation fuel of choice over the last 5 decades.It was always perceived as being a stable priced fuel,which was easy to transport and use.The recent un- precedented increase in diesel prices has made the search for alternative fuels for heating,and development of economic renewable energy sources a key part of energy planning for Southeast Alaska. These considerations are the foundation for this regional integrated resource plan. The Energy Solution set for Southeast Alaska -In short,Southeast Alaska will not be able to merely build more hydro power projects to chart its future.It must embrace a coordinated action plan that includes energy conservation and demand side management,which are actions consumers and businesses must take,and development of hydro power projects in areas that now suffer extremely high and economically stifling utility rates.The solution set must involve electricity supply,heating energy supply,and considerations of electric vehicles for transportation. Energy solutions for economically distressed communities -Individual solutions for rural sub-regions of Southeast are a must.Angoon and Kake lack affordable hydro based power and are in economic death spirals,while Petersburg,Ketchikan and Juneau are well equipped with previously developed hydro power projects that have been financed by the federal and state governments,and see stable economic futures.Unique solutions for rural communities are identified that give the suffering communities a fighting chance to survive and flourish. The Southeast Alaska Intertie Concept -The vision of interconnecting all of the Southeast Communities into a backbone transmission system has been on the lips of many Southeast Alaskans for several decades.This initiative is in direct response to the reality of SE Alaska that hydro resources are beyond the economic reach of a number of the Southeast communities.While the intent of this initiative has been to provide affordable hydropower based energy to all communities,we find that implementation of the backbone is not economic,and other energy solutions are recommended for specific communities.Two selected transmission line projects that have been a part of the initiative (Kake to Petersburg Intertie and the Metlakatla Intertie)are recommended.The remainder of the connections will include long submarine cables,very high construction costs,and expected power flows that cannot support long run maintenance and operations costs.In short,even if the projects are fully funded by the state of Alaska,expected maintenance and operations costs will exceed significantly the benefits of regional interconnection. The Role of Technology Innovation -Our recommendations offer a multi-faceted energy future,but it is clear that this IRP cannot yield equality in cost of and availability of energy throughout the region.In particular,remote communities are facing a future of continuing higher rates for energy.Expected electrical rates in Kake,Angoon and Ketchikan will remain distinctly different,and this will likely be one key player in the economic future of the communities.For sure,Kake and Angoon,and the utilities that serve them do not have the advantages of Ketchikan utilities of size,and paid for energy infrastructure that is owned by Southeast Alaska Power Agency that has been significantly subsidized by past state funded energy projects.Possible future solutions to this equality issue may reside in focused technology advances in small scale power supply.To these end governmental organizations such as the AEA Emerging Energy Technology Fund,and the Alaska Center for Energy can play an important role in seeking lower cost energy conversions. The Need for Joint Action -Southeast Alaska must mobilize itself to meet its future.While there are significant hydro resources available,converting water energy to electricity and delivering to residents is complex and costly.Also,the relationship of the cost of diesel fuel to the stable price of hydro based electricity has created a unique situation where,for hydro rich sub-regions,it is economically advantageous for people individually to switch from heating with diesel fuel to resistance electric heating.While this may seem a reasonable economic action for a resident to take to lower overall utility costs,it is and has been shown to be detrimental at a community and utility wide level.There is clear evidence that wide spread conversions of energy supply for heating has eaten into reserve hydro power capacity and energy supplies,such that nearly all of the hydro rich sub-regions are needing to supplant hydro power production with diesel fired generation. The evolving situation with access to resources within the Tongass Forest also has cast a pallor on development of new hydro and transmission resources.It appears to be increasing difficult to develop new hydro power projects. With the growth of electric loads from resistance heating,it is increasingly apparent that hydro rich sub- regions will see,during extended cold spells,extended very high power consumption.This leads to a "lumpy”demand profile,where hydro energy is consumed at a high rate in winter months,when available water storage is not being recharged.Thus the region must look to more storage and more capacity,both of which are difficult to find and expensive to build.In a word,it is neither economic,nor practical for SE Alaska to "build its way into the future”with new hydro power projects. This plan suggests that a combined action of energy conservation,use of available advanced technologies to control demand for electricity (commonly called "demand side management”)and control of resistance heating conversions by use of an alternative energy source is the "least cost least risk future”for southeast Alaska.Given SE Alaska's availability of wood resources ("biomass”is anowa widely used term)and a mature technology for manufacture wood pellets that could mimic the ubiquitous availability and ease of use of diesel fuel,conversion from diesel fuel to alternative fuels can be economic and can greatly reduce future energy supply risk. Why is this important to SE Alaska residents?In short,this approach yields the most energy security and expectation of affordable energy costs for residents which is a fundamental goal of this integrated resource plan. While it is clearly recognized that different energy situations exist throughout SE Alaska sub-regions, there are key findings which apply to all: 1.The high cost of diesel is detrimental to all sub-regions of SE Alaska. 2.Conversion from diesel to alternative fuels such as biomass pellets can be economic throughout the region. 3.Inall sub-regions,energy futures must be embraced jointly by local governments,utilities,and residents alike,to alter traditional ways energy is used,and to make new and different investments in community and regional energy systems.