Homer Electric Association is proposing to pump up their natural gas fired power production on the Kenai Peninsula, though a spokesperson for the company says it likely won't result in a lowering of rates.
The move is an effort to produce power independently from the Anchorage-based wholesale power provider, Chugach Electric Association.
HEA currently buys nearly all of its power under an existing contract with Chugach, set to expire at the end of 2013.
The plan to add a steam turbine to capture the runoff byproduct from the gas-fired generation plant in Nikiski was announced this week.
The company, which is referring to the project as "Independent Light," is also proposing to place a gas-fired turbine in an already constructed facility in Soldotna.
Joe Gallagher, a spokesperson for HEA, said the Nikiski project would take priority.
Gallagher said the company is unwilling to release cost estimates for either project at this time.
HEA has said the plant could require 20 full time employees as well as create temporary construction jobs.
Currently, HEA owns and operates the Nikiski plant, located next to the vacant Agrium facility, generating 40 megawatts of power through its agreement with CEA.
Agrium, a fertilizer producer that closed its doors in 2008, formerly used the runoff steam from the electricity generation for its operations.
Gallagher said that steam now goes into the atmosphere, though if captured with a steam turbine, could boost power output by 18 megawatts without increasing the plant's demand for fuel.
He said that with a boost of gas input, the plant could pump up to a total output of 77 megawatts.
According to Gallagher, HEA's power needs typically hover around 65 megawatts and peak around 90 megawatts when winter cold snaps set in.
Gallagher said the main impetus for the project was the looming expiration of their contact with Chugach, and that the HEA Board of Directors had been considering a number of options over the past five years.
"After weighing the pros and cons, it seemed the best way to move was Independent Light, or possibly to participate in a large Anchorage project," he said.
Gallagher was referring to Chugach's plan to construct a 183-megawatt, gas-fired power plant.
A company official from Chugach declined to comment on how the HEA move might impact their plans.
Gallagher said the drawback for HEA in buying all its power from Chugach was it had no say in how power is produced.
"We're no different than a person that lives in Anchorage, and yet we're a huge buyer of power," Gallagher said. "Our ability to have some influence on decisions is pretty minor at best."
He said however that he still expects HEA to work with other utilities such as Chugach to purchase needed or backup power.
Gallagher also said he doesn't expect their project to impede on a movement to create a joint utility entity consisting of the six Railbelt power companies.
Jim Strandberg, a program manager for the Alaska Energy Authority, said Homer's move wouldn't derail the effort.
"It doesn't throw a wrench in the plan," Strandberg said. "These are conditions that all utilities face and they have to do these things to support their rate payers."
Strandberg did confirm however, that the projects were not a part of the recently released Regional Integrated Resource Plan, a utility development roadmap of sorts produced by a consulting firm contracted by AEA.
While the plan is not binding, it was intended to layout the optimum set of power projects needed to meet future generation needs.
Dante Petri can be reached at email@example.com.
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