Southeast Alaska Integrated Resource Plan (SEIRP)

ril 2011

Kevin Harper ‐ Black & VeatchPaul Berkshire ‐ HDR Alaska, Inc.

21 Ap

Agenda

21 April 2011

Agenda

• Integrated Resource Planning

•Project Objectives and Scope

•Project Team Overview

•Project Approach and Schedulej pp

•Hydropower in SE Alaska

•Questions and Answersask

a IRP

Questions and Answers

uth

east

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IRP

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Integrated Resource Planning

21 April 2011

• Plan that economically schedules what, when, and where to build based on available energy supplies

Integrated Resource Planning

where to build, based on available energy supplies

• Long‐term time horizon

• Competes generation, transmission, fuel supply and p g , , pp yDSM/energy efficiency options

• Includes renewable energy projects (including Hydro)

i l b ild f i f f• Arrives at a plan to build future infrastructure for minimum long‐run cost to ratepayers

• Considers risksIRP

• Consideration of financing options

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Integrated Resource Planning

21 April 2011

Integrated Resource Planning

Objective Function:

2012 Cumulative Present Value Costs2012 Cumulative Present Value Costs

With consideration of:

IRP

With consideration of:

•Regional issues and differences

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•Energy security

•Risks

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•Risks

Integrated Resource Planning ‐ Limitations

21 April 2011

Integrated Resource Planning  Limitations

•Does not set State energy policy

•Directional

• Identified/generic/actual projects

•Agnostic to owner/developer of projectsAgnostic to owner/developer of projects

IRP

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Integrated Resource Planning – Example Results

21 April 2011

Results

Energy By Resource Type 7,000

5,000

6,000Ocean TidalWindM i i l S lid W

3,000

4,000

ERG

Y(G

Wh) Municipal Solid Waste

GeothermalHydroPurchase Power

IRP

1 000

2,000

3,000

EN Fuel OilNuclearCoalNatural Gas

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0

1,000

011

014

017

020

023

026

029

032

035

038

041

044

047

050

053

056

059

Natural Gas

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20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20

Integrated Resource Planning – Example Results

21 April 2011

ResultsEnergy Requirements (MWh)

Without DSM/EE

6,000,000

7,000,000

8,000,000

(MW

h)

With DSM/EE

3 000 000

4,000,000

5,000,000

equi

rem

ents

(

IRP 1,000,000

2,000,000

3,000,000

Ene

rgy

Re

theast Alaska  0

2011

2014

2017

2020

2023

2026

2029

2032

2035

2038

2041

2044

2047

2050

2053

2056

2059

Year

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Integrated Resource Planning – Example

21 April 2011

Integrated Resource Planning  Example Issues to be Addressed

•DSM/Energy Efficiency

• Potential resource ‐ need to gather gbaseline information 

• Funding alternatives – State, system Funding alternatives State, systembenefit charge, participants, etc.

• Delivery mechanisms – AHFC, AEA,IRP

Delivery mechanisms  AHFC, AEA, regional entity, individual utilities

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Integrated Resource Planning – Example Issues to be Addressed

21 April 2011

Comparison of Capital Rates for Base Case Scenario and Alternative* Scenario

IRP

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Integrated Resource Planning – Example

21 April 2011

Integrated Resource Planning  Example Issues to be Addressed

• Strategies to Lower Capital Cost of SEIRP to Ratepayers

• Ratepayer benefits charge

• State financial assistanceState financial assistance

•Repayment flexibility

C di / i k i i i

IRP

•Credit support/risk mitigation

•Potential interest cost benefit

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IRP

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Project Objectives and Scope

21 April 2011

Project Objectives and ScopeSEIRP Study

• Plan that economically schedules what when

CurrentSituation

Li it d

schedules what, when, and where to build, based on available energy supplies

• 50-year time horizon

• Competes generation, transmission, fuel supply

PotentialSEIRP

ResultsPotential

Future Situation• Limited

interconnections and redundancy

• Limited economies of scale

• Dependence on fossil fuels

, pp yand DSM/energy efficiency options

• Includes future CO2 costs

• Includes renewable energy projects (including Hydro)

• Increased DSM/energy efficiency

• Increased renewables(including

• More robust transmission

• Diversified supplies

• Spread risks

• State financial assistance

• Regional planning

IRP

fossil fuels

• Rapid electric heating conversions

• Aging infrastructure

• Difficult financing

• Arrives at a plan to build future infrastructure for minimum long-run cost to ratepayers

• Proposed AK-BC transmission line will be

( ghydro)

• Increased transmission

• AK-BC transmission line

g p g

• Wise resource use

• Respond to electric heating conversions

• New technologies

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• Considers risks

• Consideration of financing options

Prioritized List of Capital Projects

Energy challenges are significant; SEIRP will provide information required to make regional decisions. 

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Project Objectives and Scope

21 April 2011

Project Objectives and Scope

• 50‐year horizon

• Assessment of regional loads

• Projections of fuel and electricity generation costs• Projections of fuel and electricity generation costs

• Analysis of potential generation resources

• Diversify energy suppliesy gy pp

• Comprehensive list of current and future generation, transmission and electric power infrastructure projects

• Long term plan for capital project additions with emphasis onIRP

• Long‐term plan for capital project additions with emphasis on first three years

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IRP

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Project Team Overview

21 April 2011

Project Team Overview

• Alaska Energy Authority – Sponsoring Agency

• Black & Veatch – Primary Contractor

• HDR, Inc. – Subcontractor 

• Southeast Conference

• Advisory Working Group

• Regional UtilitiesIRP

• Regional Communities

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Extensive public participation is key element of project.

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IRP

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Project Approach

21 April 2011

• Task 1 – Understand the SE Energy Model: Past, 

Project Approach

Present and Future

• Task 2 – Assess Existing and Future Energy TechnologiesTechnologies

• Task 3 – Develop Energy Conservation Program

T k 4 Fi i th SE E F t• Task 4 – Financing the SE Energy Future

• Task 5 – Technical Conference and Preliminary Action PlanIR

P

Plan

• Task 6 – Develop Region‐wide Transmission Plan

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Project Approach (continued)

21 April 2011

• Task 7 – Develop Preferred Resource Lists for Existing I t t d El t i l G id E l di SEAPA

Project Approach (continued)

Interconnected Electrical Grids Excluding SEAPA

• Task 8 – Develop IRP for SEAPA

• Task 9 Planning for Insular Communities• Task 9 – Planning for Insular Communities

• Task 10 – Provide Preliminary Capital Budgets for Region‐wide IRPg

• Task 11 – Assemble Task Groups 1, 2, and 3 Components Into a Regional Plan

IRP

• Task 12 – Present the Plan

• Task 13 – Complete the Plan

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IRP

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Hydropower in SE Alaska

21 April 2011

•Existing Projects

Hydropower in SE Alaska

• 26 projects

• 13 run‐of‐river <= 5 MW•13 run of river,  <= 5 MW

•13 storage, 1‐80 MW

211 MW i t ll d it• 211 MW installed capacity

• 950,000 MWh average annual generation

IRP

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Hydropower in SE Alaska

21 April 2011

•Proposed Projects

Hydropower in SE Alaska

p j

• 20 projects

5 f i 1 MW•5 run‐of‐river, <= 1 MW

•15 storage, 5‐80 MW

• 318 MW installed capacity

• 1,200,000 MWh average annual generationIRP 1,200,000 MWh average annual generation

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Hydropower in SE Alaska

21 April 2011

•Proposed Projects – General Characteristics

Hydropower in SE Alaska

• Most..

• in early stages of development

i i ifi i i li

Notable Exceptions:Blue Lake ExpansionLake WhitmanReynolds Creek• require significant transmission lines

• proposed as IPPs

• lack established market for energy

Reynolds CreekMahoney Lake

N t bl  E ti• lack established market for energy

(existing diesel generation, export)

IRP

Notable Exceptions:Small run‐of‐river projects in Angoon, Hoonah, Tenakee Springs

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For more information:

Jim Strandberg, Alaska Energy Authority  (907) 771‐3069  JStrandberg@aidea.org

Kevin Harper, Black & Veatch  (425) 427‐1652  HarperKM@bv.com

Myron Rollins, Black & Veatch  (913) 458‐7432  RollinsMR@bv.com  

Paul Berkshire, HDR Alaska, Inc.  (907) 360‐1015  paul.berkshire@hdrinc.com