Electrical Power for Valdez and the Copper River Basin-1981

Er.Jployment Benefits Computation (cont)SkilledLabor Cost (60%)Unemployed (.30x.36) $7,411,000800,000Unsld 11 edLabor Cost (40%) $4,940,000Unemployed (.45'x. 75) 1,667,000Total Payment to Under or Unemployed 784,000 + 1,679,000Annual Benefit 2,538,000 x .0738Fuel Cost Escalation:$2,467,000182,000Olle of the most practical features of a hydroel ectric pl ant is itscontribution to fossil fuel conservation. The real price of petroleumhas increased dramatically in recent years and will continue this trendto the forseeable future. Real increases in diesel fuel costs createcorresponding real increases in the value of diesel generation displacedby the hydro p1 ant.For purposes of this report, diesel fuel price forecasts developed bythe U.S. Department of Energy have been used. Real diesel fuel priceescalation rates for Region 10 (Alaska) are estimated as follows: from1980-84, 3.1% from 1985-1990, 2.2% and 4% for the next 20 years. Thevalues for energy received from the Federal Energy Regulation Corronission(FERC) have been adjusted to the power-on-line date (1990) to establish astarting value. Energy values are then escalated by 4 percent for thenext 20 years and held constant for the remaining project life. Thevalues are applied to each future year and are discounted to 1990 at thecurrent project interest rate and expressed as an average annual benefitvalue. The tables showing power benefits at the end of this appendixgive the details of yearly fuel price escalation for each conditionconsidered in the report.ECO~OMICANALYSIS OF THE SELECTED PLANThe selected plan has net benefits of $1,751,000 annually when thepressure reducing turbine is treated as part of the without projectconditi on. Project economics are summari zed below.Sensitivity Tests:Average Annual Benefits ($1,000)Average Annual Costs ($1,000)Net Annual Benefits ($1,000)Benefit-Cost Ratio4,9853,2341 , 7511. 54Several tests of economic justification wey'e made for the selected plan todemonstrate the effect of departures from the assumptions that underlie theanalysis. Each of the tests was conducted under the criteria outlined earlierin this section, but with the specific changes noted below.C-7