Homer Electric Association has been preparing to sever a decades-old agreement with Chugach Electric Association at the end of 2013 that will place it in direct control of area power generation needs.
It will work this year to prepare and install additional infrastructure to ready for the switch. The project will cost about $180 million and be completed by late spring.
Those pieces of infrastructure include the new Nikiski Combined Cycle Conversion project and the Soldotna Combustion Turbine Plant.
HEA will also rely on the Bernice Lake power plant purchased from Chugach Electric in 2011 and its 11 megawatt share of power produced at the state-owned Bradley Lake hydroelectric facility.
The Nikiski Combined Cycle plant — a turbine powered by steam produced from exhaust heat generated by an existing gas turbine — will be the primary source of HEA’s power starting in 2014.
The Nikiski facility will be able to produce up to 18 more megawatts of power without any additional natural gas once completed.
The Soldotna combustion project — a 48-megawatt LM 6000 turbine — will serve in a back-up capacity along with the Bernice Lake plant.
The switch will create about 20 new positions to run the Soldotna and Nikiski projects and Bernice Lake. The ultimate cost to consumers will be a wash next to continuing a contract with Chugach Electric.
The utility will also be in complete control of how it meets consumer needs, giving managers added flexibility, spokesman Joe Gallagher said.
Independent Light will also help the utility’s progress on adding renewable energy sources to its portfolio, which already includes hydroelectric power at Grant Lake and tidal energy from Cook Inlet.
“HEA will be in charge of our power production options and will be able to do what is best for the co-op members on the Peninsula rather than considering what is best for Anchorage,” Gallagher wrote in an email.
— Staff report