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4.0 Economic Factors
<br />Economic factors will be the overriding issue to determine the viability of the project. Development of
<br />hydropower is capital intensive to license, permit, and build the project. Once the project is completed
<br />and online, the ongoing operation and maintenance costs are minimal. Like wind power and landfill gas,
<br />the fuel is essentially free. However, the availability of the fuel to run the plant is generally outside of the
<br />Utilities' direct influence. The power plant would be run-of--river with a very narrow operating band on
<br />the headwater. Once the project is constructed and operational, power will be generated when water is
<br />available. Detailed costs for dam improvements and generating equipment have not been completed for
<br />this report. However, previous assessment of the equipment was completed by Elk River Municipal
<br />Utilities. Review of the costs indicates that they are on the low side. Based on our initial assessment of
<br />the project, we have developed a cost summary that is presented as Table 4-1 below. Values that were
<br />included in the ERMU cost estimate were based on the Engineering New Record (ENR) cost indices from
<br />2000 to present. The cost of the turbine generator, electric feeder, switchgear, and to modify the
<br />discharge and riprap were increased for the upper bound value based on a ratio of the highest generation
<br />capacity/lowest generation capacity. Engineering was assumed to be 8% of construction. A contingency
<br />of 25% was added to the estimated total cost of permitting and construction.
<br />Table 4-1
<br />Cost Summary
<br /> Estimated Cost
<br /> Item Description Lower Bound Upper Bound
<br />Permitting 1 Preliminary Filing to FERC $20,000 $50,000
<br /> 2 Engineering Through RFQ $150,000 $250,000
<br /> 3 Environmental Studies $500,000 `* $2,000,000
<br /> 4 Follow-up Studies $80,000 $150,000
<br /> Subtotal Permitting $750,000 $2,450,000
<br />Construction 5 Trash Racks " $25,000 $38,000
<br /> 6 Clear Draft Tube " $65,000 $100,000
<br /> 7 Modify Deck $30,000 $50,000
<br /> 8 Modify Discharge and Riprap $95,000 $210,000
<br /> 9 Turbine Generator $125,000 $280,000
<br /> 10 Electric Feeder $30,000 $70,000
<br /> 11 Switch Gear $30,000 $70,000
<br /> 12 Engineering & Inspection (8%) $32,000 $65,000
<br /> Subtotal Construction Cost $432,000 $883,000
<br />Subtotal $1,182,000 $3,333,000
<br />Contingency (25%) $295,000 $833,000
<br />Total $1,477,000 $4,166,000
<br />* Source of cost is ERMU Cost Estimate 1/18/00
<br />''* Estimated to be in the range of
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