Usibelli says it plans to build new power plant

Posted: Wednesday, May 14, 2003

ANCHORAGE (AP) Usibelli Coal Mine Inc. has announced a proposal for a $421 million, 200-megawatt power plant at its mine near Healy, about 80 miles south of Fairbanks.

It would be a major energy project designed to supply low-cost electricity to Alaska's railbelt,'' energy grid, a Usibelli official said.

Managers of electric utilities greeted the proposal with some caution, however. Steve Haagenson, President and CEO of Golden Valley Electric Association, in Fairbanks, said he met with Usibelli in April and reviewed the proposal. He said the plan has merits, but he has some reservations.

Steve Denton, vice president of business development for Usibelli, told members of the Resource Development Council May 1 the company is working on a plan to build its proposed Emma Creek Energy Project on a 44.4-acre site northeast of Healy, at a cost of $421 million. The project would use coal mined from leased state land, and the centerpiece will be a new 200-megawatt power plant to feed the existing intertie power transmission system.

Denton said contracts with the main electric utilities serving the Railbelt will have be negotiated, but he said he has received a positive reception so far in meetings with utility managers.

The message they gave me was that the timing for floating something like this is real good,'' Denton said. They are all in the mode of thinking about the future, as to what they're going to do for the long haul.''

As envisioned, the power plant would produce 1.6 million megawatt hours of energy annually, sending it down a three-mile, 230 kilovolt transmission line to connect with the nearby Northern Intertie system, operated by Golden Valley.

The UCM project is a long way from generating power, however. The concept summary, prepared by Harris Group Inc. and Steigers Corp., estimates it will take seven and a half years to get the project in operation. Nearly half of that time, 38 months, will be consumed by permitting.

Eric Yould, Executive Director of the Alaska Rural Electric Cooperative Association, said the proposal is intriguing but it demands much more investigation.

We would certainly encourage that sort of development,'' Yould said. But the ultimate question is can it be permitted and, more importantly, is it economically feasible? In other words, is it less expensive than the other alternatives that we would have in the Railbelt?''

Environmental concerns would also have to be addressed.

It's something we'll definitely keep an eye on,'' said Bob Randall, a spokesperson for Trustees for Alaska, an environmental oversight group. We've been interested in making sure that the class-one airshed in Denali National Park isn't compromised.''

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