Electrical Power for Valdez and the Copper River Basin-1981

TRANSMISSION INTERTIEDescription_:This alternative consists of a 136-mile transmission line extendingeast from Palmer to Glennallen. The single circuit, 138 kV line wouldallow power to be brought in from the Anchorage-Fairbanks area. To provefeasiDle, the power transmitted would have to De of a low enough cost tojustify the transmission line. This power would probably be produced bythe proposed Susitna project or possiDly from coal-fired generation. TheavailaDility of inexpensive Cook Inlet gas is fast coming to an end withincreasingly higher prices. This, coupled with recent Federal policychanges regarding the utilization of natural gas, eliminates it as aviaDle alternative.The Alaska Power Administration's Upper Susitna Power Market Analysisestimated the total transmission construction cost, including interestduring construction, for the Palmer- Glennallen intertie at $40,800,000as of OctoDer 1978. Assuming a 10 percent inflation rate of constructioncosts, the updated cost estimate for OctoDer 1980 is $44,880,000.Assuming the Power Admini- stration's figure for operation, maintenance,and replacement, and amortizing the cost over 100 years at 7-3/8 percent,yields the following results:AmortizationOM & RTotal Annual Cost$3,312,000144,000$3,456,000The Federal interest rate was applied to evaluate the intertie on acomparaDle basis with the other alternatives. Based on the transmissionof 50,000 MWH per year, and the 7-3/8 percent interest rate, the cost perkWh for transmission only would be 6.9¢/kWh. This, coupled with thecurrent cost of electricty in the Anchorage area, would Dring the totalcost to approximately 13¢/kWh.Impact Assessment:The long term environmental impacts associated with this alternativewould De primarily visual. Approximately 825 acres would have to becleared along the Glenn Highway for the transmission route. Short termimpacts associated with construction would include the prObabledisplacement of various species of wildlife in the area.Evaluation:For the Palmer-Glennallen intertie to be considered a viablealternative Dased on current price levels, two requirements must be met.One, the system must transmit enough energy to bring down thetransmission cost/kWh to a reasonaDle level, and two, a stable,reasonaDle cost source of energy must be made available to transmit.31