Comparison of Eight Railbelt Energy Projects
from Legislative Research Report 91.025, Pages 3 and 12
November 30, 1990

From Page 3: "The four projects found economically inefficient in the Alaska Power Authority study were the following: Healy Clean Coal project, neew intertie between Anchorage and Kenai, full upgrade of the existing Anchorage-Fairbanks intertie, and the Northeast intertie."

Table 5
Expected costs and benefits for Railbelt Intertie Reconnaissance Study Projects
(in millions of 1987 dollars)

  Estimated Expected Costs ($) Estimated Expected Benefits ($) Estimated Net Benefits ($) Benefit to Cost Ratio Source of Benefits and Costs Probability that Net Benefits are Positive
Projects that are economically efficient
Limited upgrade of Anchorage-Fairbanks Intertie
10
40
30
4.0
3, 5
1.00
Gas Pipeline Between Cook Inlet and Fairbanks
284
527
243
1.86
2, 3, 4, 5
1.00
Top three end-use conservation programs
16
28
12
1.75
3, 4, 5
1.00
Top eight end-use conservation programs
44
61
17
1.39
3, 4, 5
1.00
Projects that are economically inefficient
Northeast Intertie
188
159
-29
0.85
2, 3, 5
0.08
Full upgrade of Anchorage-Fairbanks Intertie
134
96
-38
0.72
2, 3, 4, 5
0.00
50-MW coal-fired power plant
177
108
-69
0.61
3, 4, 5
0.00
New Kenai-Anchorage intertie
103
49
-54
0.48
1, 2, 3, 4, 5, 6
0.00

Notes:

1) All values are in 1987 million dollars (present value for 1994 through 2028 discounted at 4.5 percent per year).
2) Estimated Net Benefits = Estimated Expected Benefits - Estimated Expected Costs
3) Benefit to Cost ratio is a number, rather than a dollar figure, and are always greater than zero.
4) Economically efficient projects are those that lead to a net increase in the value of goods and services produced within the economy. Economically efficient projects have net benefits (benefits - costs) that are positive and venifit-cost ratios that are greater than one. The term "economically efficient" and "financially feasible" are not the same thing and one does not always imply the other.

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