12.07.2015 Views

Electrical Power for Valdez and the Copper River Basin-1981

Electrical Power for Valdez and the Copper River Basin-1981

Electrical Power for Valdez and the Copper River Basin-1981

SHOW MORE
SHOW LESS
  • No tags were found...

Create successful ePaper yourself

Turn your PDF publications into a flip-book with our unique Google optimized e-Paper software.

Fuel Cost Escalation:For <strong>the</strong> base case, <strong>the</strong> assumptions concerning fuel costs have beenoutlined. Should <strong>the</strong> prOV1Slons <strong>for</strong> fuel cost escalation prove too modest,<strong>the</strong> proposed project would yield greater benefits that anticipated.Conversely, if fuel costs do not increase in real terms, <strong>the</strong> projectedbenefits of Allison are reduced. This sensitivity test examines <strong>the</strong> effectsof reduced fuel cost escalation <strong>and</strong> no fuel cost escalation. Assuming thatCVEAls current diesel costs remain unchanged throughout <strong>the</strong> project life <strong>the</strong>resulting costs <strong>and</strong> benefits are as follows:Average Annual Cost ($1,000)Average Annual Benefits ($1,000)Net Annual Benefits ($1,000)Benefit-Cost Ratio3,2342,812-422.87In <strong>the</strong> absence of fuel cost escalation project benefits are substantiallyreduced with a BC rati 0 fall i ng belo\,1 uni ty. When fuel costs are escalateduntil <strong>the</strong> pO''Ier-on-line date <strong>and</strong> held level <strong>the</strong>reafter, <strong>the</strong> feasibility of <strong>the</strong>project improves as shown bel 0\'1:Average Annual Costs (1,000)Average Annual Benefits ($1,000)Net Annual Benefits ($1,000)Benefit-Cost Ratio3,3583,2341241. 04Without Pressure Reducing Turbine:Although <strong>the</strong> selected plan anticipates <strong>the</strong> presence of <strong>the</strong> PRT, this is notnecessarily a <strong>for</strong>egone conclusion. Fur<strong>the</strong>rmore, <strong>the</strong> projected output of <strong>the</strong>PRT has recently been subject to downward adjustments as a result of moremodest expectati ons concerni ng <strong>the</strong> rate of oil flow. Thi s uncertai nty coupledwith <strong>the</strong> unusual nature <strong>and</strong> per<strong>for</strong>mance of <strong>the</strong> PRT makes its possible absencean appropriate subject <strong>for</strong> a test of sensitivity. The impact on powerbenefits of this possibility is shown in <strong>the</strong> summary which follO\~s:Average Annual Benefits ($1,000)Average Annual Costs ($1,000)~et Annual Benefts ($1,000)Benefit-Cost Ratio5,8133,2342,5791.80The preceeding table shows a significant increase in project benefits. Theeffect of <strong>the</strong> without PRT condition, combined with varing fuel cost escalationrates, is summarized in <strong>the</strong> matrix table of end of this text.Low-load Growth Assumption:The economic analysis has been based 011 <strong>the</strong> Alaska <strong>Power</strong> Administrationlsrevised load growth projection. Based on present knowledge, this isconsidered <strong>the</strong> most reasonable estimate of future conditions. An economicdownturn <strong>and</strong> lower growth in power dem<strong>and</strong> are \'tithin <strong>the</strong> realm of possibility<strong>and</strong> woul d affect pm'ler benefits of <strong>the</strong> proj ect. Lesser dem<strong>and</strong> coul d mean adelayed power-an-line date, or a longer period of underutilization. With <strong>the</strong>10\ler load growth a ssumpti on proposed by Re<strong>the</strong>r<strong>for</strong>d <strong>and</strong> Associ ates pri or toALPETCO, an additional 2 years would be required be<strong>for</strong>e <strong>the</strong> projectls firmC-8

Hooray! Your file is uploaded and ready to be published.

Saved successfully!

Ooh no, something went wrong!