Homer Electric Association is looking at the Healy Clean Coal Plant, located near Healy, as a future source of power generation for its members.
Homer Electric entered into a letter of agreement with the Alaska Industrial Development and Export Authority to evaluate the shut down coal plant to start generating power again, according to a Homer Electric press release.
The authority, a public corporation of the state of Alaska, owns the plant.
The point of the study is to determine what it takes to restart the plant, how much it will cost and a timeline for restarting it, said Homer Electric Spokesman Joe Gallagher.
The cooperative will do a four-month engineering review and physical inspection to determine the condition of the plant, the press release said.
"Its an important step for Homer Electric in preparing for future generation needs," Gallagher said.
Ron Miller, executive director for the authority, said restarting the plant will involve the studies, some modifications and upgrades and will cost about $20 million. This will be paid for by the authority, he said.
Gallagher added that work done by Homer Electric will be reimbursed.
Electric utilities need a source of power to generate electricity.
Right now, about 90 percent of Homer Electric's power generation comes from natural gas, Gallagher said. He added that the rest comes from hydroelectric power.
"There's a sense that (Homer Electric) would like to have a diversified source of power," he said.
By having a diverse source of power, it would make electric prices less susceptible to fluctuations in natural gas prices, he said.
Miller gave another reason restarting the plant is important in the press release.
"With questions about natural gas supplies in Southcentral Alaska and an abundance of coal adjacent to (the plant), we look forward to working with HEA to bring coal-fired energy to the Railbelt," he said.
The Healy Clean Coal Plant was built between 1995 and 1997 at a cost of $297 million, paid for with federal and state money.
During a test period that lasted almost two years, the plant generated about 419,000 megawatt hours of electricity for Golden Valley Electric Association, the Fairbanks electric utility.
A dispute between Golden Valley and the authority followed over the economics of the plant. It has been idle since.
Gallagher said if the study shows it is economical to operate the plant, then Homer Electric would begin negotiations to assume responsibility for operating and maintaining the facility.
Because it is connected to the power grid the power would be available to any of the Railbelt utilities if it restarts, he said.
Miller said Homer Electric and the authority had a mutual interest: get the plant running. He said he is confident this is possible.
Golden Valley Electric Association is happy to share information with Homer Electric as they evaluate the plant, said GVEA Spokeswoman Corinne Bradish.
She said GVEA has had four goals for the plant: it needs to be safe, reliable, have long term viability and be economical.
Past reports have shown that the plant does not meet these goals for GVEA, she said.
Homer Electric needs to come to their own conclusions, she said.
"We're happy to work with them.
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