1443, Carlson Creek Hydroelectric Project



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1443, Carlson Creek Hydroelectric Project




1.1Proposer


Alaska Power Company (a subsidiary of Alaska Power & Telephone Company)

1.2Benefit cost ratio: applicant and AEA (and alternative if applicable)


Applicant: 2.32

AEA: 1.02


1.3Project Description


300 kW Carlson Creek Hydroelectric project combines run of river hydro in Carlson Creek (utilized during summer months when the creek is flowing) and hydro that relies on drawing water from Carlson Lake (utilized during cold months). The project has the capacity to generate 1,200 MWh per year, 450,000 kWh more than current electric energy demand in Slana and Chistochina (combined 2008 population estimated at 207) but Alaska Power & Telephone has plans to extend their transmission lines from Slana to Mentasta Lake (2008 est. pop. 112), a community with electric load of 350,000 kWh per year that could be met by the project. The project would replace 100% of diesel generated electricity for Slana and Chistochina.

1.4Contribution to lowering the cost of energy


Some savings will be enjoyed by State through reduced PCE and to commercial and local businesses. The applicant estimates savings at around 0.068 cents/kWh (more than $51,000 across 750MWh) but notes that savings are reliant on grant funds to offset cost of development. Costs might also be impacted by future lease agreements with Ahtna Corp and the private land owner on whose land access is needed for the project.

1.5Assumptions modified


For AEA Analysis

  • Operations and maintenance costs for renewable project is set to standard $0.02 per kWh

    • Applicant O&M: renewable – 0.067/kWh

  • Operations and maintenance cost for existing generation system is set to standard $0.02 per kWh\

    • Applicant O&M: diesel generation – 0.097/kWh

  • Standard 3 percent discount rate was used to calculate present value(s)

    • Applicant discount rate: 0

  • Standard 13 kWh/gallon used in AEA analysis

    • Applicant reports 12.7 kWh/gallon

1.6Concerns


No concerns about the project itself.

The b/c ratio should be watched closely as it is low and project parameters may change with completion of the assessment and design phases of the project.

Land lease with Ahtna and private property owner not yet in place and could erode benefits to consumers or to state through reduced PCE.

1.7Potential enhancements


None.

1.8Long-term sustainability


No reason project should not be sustainable.

1.9Potential public benefits (new round 3)


A new road to the diversion area is a part of the project but it is not clear if the new road provides access or any public benefit.

Future benefit to Mentasta Lake residents with construction of tie-in to Slana electric distribution system.





443 Slana Chistochina Hydro -- December 27, 2009


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