HEA to restart Healy coal plant

Posted: Friday, November 17, 2006

Homer Electric Association and Alaska Industrial Development and Export Authority have signed a project development agreement that will lead to the restart of the AIDEA-owned Healy Clean Coal Plant.

The coal plant is a 50-megawatt coal-fired power plant located in Healy near the Usibelli coal mine. Prior to signing the agreement, HEA conducted a thorough engineering review and physical inspection of plant. The results of the inspection were favorable and indicated the plant, operated as a clean coal facility, can produce reliable, competitively priced power for the Railbelt area between Fairbanks and Homer.

Under the terms of the agreement, HEA will assume responsibility for managing the work required to restart the plant. The cost incurred in getting the plant ready for a restart will be covered by AIDEA.

Following completion of the restart work, HEA will operate and maintain the plant. HEA intends to purchase power from the plant beginning in 2014 when HEA’s existing power supply contract with Chugach Electric expires.

The agreement is the culmination of several months of discussions between HEA and AIDEA. HEA General Manager Brad Janorschke said the coal plant provides HEA an alternative source of power that will help lessen the impact of escalating natural gas prices.

According to Janorschke, approximately 9 percent of the natural gas being used for power generation in the Railbelt could be displaced by operating the Healy plant.

“Homer Electric members are well aware of the impact natural gas prices have had on electric rates. By diversifying our power supply options we can stabilize our rates and continue to provide our members with reliable, affordable power,” Janorschke said.

AIDEA Executive Director Ron Miller said his agency is ready to begin the process of restarting the Healy Clean Coal Plant.

“The project development agreement is a major accomplishment for both the state and Homer Electric. The studies conducted by HEA confirm AIDEA’s often-stated belief that HCCP is a viable, safe power plant that can provide coal-fired energy to the Railbelt at a competitive price. The restart of HCCP will also benefit the Healy economy with new jobs at the plant and a new market for Usibelli coal,” Miller said.

“We look forward to continuing our work with Homer Electric.”

The coal plant is the result of a nationwide competition sponsored by the U.S. Department of Energy to test innovative coal-burning technology. The technology involves a combustion system that burns coal in stages to minimize the formation of nitrogen and sulfur oxides and reduce air pollution. From a field of 48 applicants, Alaska was selected to receive one of 13 grants.

Construction began in 1995 and was completed in 1997 at a cost of approximately $297 million.

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