Electrical Power for Valdez and the Copper River Basin-1981

From the time of pO\'Ier-on-line, only the operation, maintenance, andreplacement costs are subject to inflation. With these representing onlya snall portion of the total, annual costs are relatively insensitive tothe effects of inflation.The costs per fi rm kWh for Al tern,',ti ve #1 and #2 are 10. 2ft and 10. octrespectively. Besides being more expensive, Alternative #1 could beexposed to possible seismic waves (Appendix G), and the environmentalimpact woul d be greater due to a reducti on in spawni ng area (tai 1 racedischarge being closer to tide-water). Therefore, Alternative #1 hasbeen eliminated from further evaluation.Alternate #2 was analyzed at 4, 6, 8, and 10 MW to determine theoptimum si ze power pl ant from an economic standpoi nt. Power benefi tswere based on the load forecast provi ded by the A1 aska PowerAdministration. Fuel cost escalation, as determined by the U.S.Depa rtment of Energy, for the 1980 Annual Report to Congress was alsoused. Below is a summary of the annual benefits (excluding employmentbenefits) and costs of the various units. (Benefits and costs are inthousands of dollars.)SUMr~ARYPlant Capacity Energy Total BIC NetSize Benefits Benefits Cost Ratio Benefits4 r,n~ $398.9 $4,262.2 $2,946.0 1. 58 $1,7156 HW $585.9 $4,772.6 $3,036.0 1.77 $2,3238 1,1104 $748.0 $4,882.9 $3,234.0 1. 74 $2,3971 0 r~w $897.9 $4,827.7 $3,456.0 1. 66 $2,270The above economic sUMmary indicates that the 8 r~w alternativemaximizes net I~ED benefits. By "including employment benefits of $182,000for the 8 r~\~ unit, the total benefits are $5,813,000 compared to thetotal costs of $3,234,000. This provides net NED benefits of $2,579,000and a benefit-cost ratio of 1.8 to 1.The benefits shown above have been computed under the assumption thatthe PRT would not be built. The results of the net benefit maximizationwould not change significantly if the PRT were assumed as part of thewithout project condition.Various benefit outcomes of different assumptions concerning the loadforecast, PRT, and fuel cost escalation are presented in the EconomicAnalysis of the selected plan (Appendix C). The method used in derivingNED employment benefits is also discussed in Appendix C.Impact Assessment:The major environmental effects of Alternative #2 are associated withchanges in water quality \'Ihich may impact the fishery resources inAllison Creek. The introduction of higher flows and warmer water duringthe wi nter months coul d cause rapi d egg i ncubati on and early emergence ofsalmon fry. The early emergence may cause the fry to enter Port Valdezat a time when food sources are scarce. Determination of the potential37