Electrical Power for Valdez and the Copper River Basin-1981

As can be seen from Figure A-l, Appendix A, the availability ofsecondary energy from Allison is very erratic, and secondary energy is asmall proportion of firm energy. Early in the project life, little ofthe All ison secondary energy would be usuable because loads would belm'/er and secondary energy \'Iould also be available from Solomon Gulch.Consequently, no secondary energy benefits are claimed before year 2000.After year 2000, however, it is estimated that an equivalent annualaverage of 65 percent of Allison secondary energy will be usable fordisplacing diesel generation, considering load growth and monthlydistr'ibution of loads, and the availability of energy from Solomon Gulch.tJED Employment Benefits:Project benefits for employment are claimed to show the impact ofproject construction on a local economy. A cornmunity is declaredeligible based on a condition of persistant and continuous unemployment,for which Valdez qualifies. Project labor requirements for skilled andullski 11 ed \'Iorkers can be partly filet by the unemployed workers of thearea. The amount earned by thi s group is amorti zed over the project 1 ifeand claimed as a project benefit, because there is no economic costentailed in the use of otherwise unemployment resources.Data from and evaluation of the Public Works Impact Program (PWIP)indicates that 30 percent of the wages paid to skilled labor and 45percent of wages paid to unskilled labor can be expected to flow topreviously unemployed or underemployed \'/orkers, based on records fromother large public works projects. These are broad, general averages.Labor market conditions in Alaska tend to be different from those in therest of tile country. There are adequate numbers of unemployed workers inthe affected eligible labor areas (3,500 unemployed out of a labor forceof 30,000 in the Valdez and Fairbanks area) to supply project needs.Rather large proportions of the project construction jobs can be expectedto be filled by immigrants, based on previous experience. Thepercentages from PWIP evaluations were consequently reduced by 36 and 75percent for skilled and unskilled labor, respectively, based on recentexperience with other multimillion dollar construction projects. Thisapproach provi des what may be a conservati ve estimate of ~JED employmentbenefits, but the magnitude of the benefits does not warrant thee~tensive labor market analysis which would be required to refine thesepercentages further.To estimate rJED employment benefits, it is also necessary to determinewhat proportion of construction costs would flow to skilled and unskilled\'Jorkers. Based on experience with other project, 42 percent ofconstruction costs can be expected to accrue as \'lages. Of these wagepayment, a 60/40 split beb/een skilled and unskilled workers isexpected. Computation of r~ED employment benefits is detailed below.Employment Benefits ComputationProject Construction Cost (less E&D S&A IDC) =Labor Costs (42%) =$29,407,000$12.351.000C-6