Will idle Healy, Alaska power plant operate again?

For almost 14 years, a small power plant near Healy, Alaska, has been among the cleanest coal-fired power facilities in the world. Since 1999, its smokestack hasn’t emitted a single atom of pollution. But you won’t hear its environmental record shouted from the rooftops. That’s because the Healy Clean Coal Project (HCCP) power plant hasn’t been fired up this century.

It began as an experiment. It has remained an 11-story-tall reminder of its own multimillion-dollar failure. Soon, though, the idle power plant in Healy may again rumble to life, and do what it was built for — provide affordable power for 50,000 Interior households.

Its once-experimental combustion chambers are eerily silent, awaiting replacement and a planned restart of the entire plant. Since its completion in 1997, the 50 megawatt HCCP project has been a $350 million boondoggle for both the state and an Interior utility that have haggled over its details — a back-and-forth disagreement that could be, finally, coming to an end.

After reaching an agreement with the EPA earlier this year, requiring emissions upgrades to the now outdated power plant, the state is set to sell HCCP to Golden Valley Electric Association — the biggest supplier of power to residents and businesses of the state’s second largest city, Fairbanks, and its surrounding areas.

“I believe, now is finally the time when we will see this plant brought up to full operation,” said Bob Poe, former director of the Alaska Industrial Energy Authority (AIDEA), the state agency that helped finance the building of the plant with money from the Department of Energy.

But when it comes to the idle Healy plant, deals have been hard to finalize.

Experimental technology, real-world problems

Golden Valley was there when the plant was first built with money secured by the late Alaska U.S. Sen. Ted Stevens, from a $1.8 billion federal initiative aimed at reducing the acid rain which plagued parts of the Lower 48. Golden Valley paid $9 million of the plant’s initial $270 million price tag, and was supposed to rent it from AIDEA after an initial testing period.

The tests were designed to determine how efficiently the plant burned waste coal from nearby Usibelli Coal Mine — the largest coal producer in Alaska. Its experimental combustion chambers were created to burn the waste coal — a mixture of coal and rock usually scrapped away and buried. They were also specifically made to burn the type of coal found at the Usibelli mine, in Healy. The coal there is wet, about 28 percent water. For every four railcars of the coal headed south along the Alaska Railroad, on its way to be used in power plants in Asia, one is full of water. By contrast, coal found in other parts of Alaska has a water content between 12 percent and 16 percent.

“There were problems with the testing. For one thing, the plant could not get coal from Usibelli that was dirty enough — that had enough rock in it to prove the technology,” said Poe, who said rock was eventually ground up and added to the mix.

“For the entire testing period, the plant had an operational history of 90 percent, which was pretty good.”

Golden Valley disputed the results of the testing and the efficiency of the plant, and it was closed in late 1999.

The price of oil back then was low. A barrel of crude cost just $17 in January of that year, making diesel generators much more appealing than coal. At the time, Golden Valley said if it had to buy and operate the plant, it would cost its ratepayers more money.

Ever since, the state and the electric utility have been at odds over what to do with the power plant.

Once cutting-edge, now butter-dull

When it was built in the late 1990s, the Healy project had cutting-edge emissions controls — designed to capture as much carbon, and acid-rain creating compounds as possible. But as it sat idle, and its fate played out in the halls of the Alaska Legislature, offices of several state agencies, and boardrooms of electric utilities throughout the state, the technology employed in the plant became obsolete. More recently-built coal-fired power plants are even cleaner, and are far more efficient. For the same $350 million used to build, retrofit and keep up the plant in Healy, another, much bigger plant was built near Tampa, Florida, and provides more than five times as much power.

The deal to restart the plant in Healy includes a promise by Golden Valley and the state to spend $40 million more to retrofit it with newer emissions control technology, including the latest Selective Catalytic Reduction systems — designed to further reduce the plant’s emissions of Sulfuric oxide and Nitric oxide, which contribute to acid rain. Another $10 million will be spent on Golden Valley Electric’s other Healy plant, which is connected to the idle HCCP.

An idea whose time has come?

The current agreement between AIDEA and GVEA is currently being reviewed by the Regulatory Commission of Alaska. Golden Valley said it expects to take possession of the Healy plant later this summer, and have it running within 18 to 24 months.

Prior concerns that operating the plant wouldn’t work out economically have been washed away lately by oil prices that consistently hover above $100 per barrel.

GVEA said it costs between 20 and 50 cents per kilowatt hour to generate electricity from oil and diesel fuel — depending on the types and age of the plant that is running. By contrast, coal prices now put power generation at about 5 to 6 cents per kilowatt hour. Cheap, and plentiful across much of the rest of the U.S. and in parts of Alaska, natural gas is unavailable to the utility. Currently, what little gas is available in the Interior — not nearly enough to fuel even one power plant — is trucked down from Prudhoe Bay, 500 miles to the north.

Deal nears, one potential hang-up

“We have always said that we were interested in HCCP, if it saved our ratepayers money, and that now, seems to be the case,” said Cassandra Cerny, GVEA spokesperson.

Golden Valley said the Healy plant would be used to offset electricity purchases it sometimes makes from Anchorage-based utility Chugach Electric Association.

One potential sticking point for the deal to sell the Healy Clean Coal Plant to Golden Valley may be new, stricter emissions standards set forth by President Obama on June 25. But those new rules have yet to be figured out by the EPA.

“We will proceed with the agreement that is already in place,” said Marianne Holsman, spokesperson for the agency’s Seattle office.

Even with a stamp of approval from the feds, environmental groups, like the Sierra Club, and local watchdogs like the Denali Citizens Council have tried to stop the project before. If they do so again, it wouldn’t be the first time the fate of the project plays out, not along a lonely stretch of the Parks Highway in the Interior, but in a courtroom, instead.

Contact Sean Doogan at sean(at)alaskadispatch.com