Anchorage Daily News

PALMER -- Joe Griffith, interim manager for Matanuska Electric Association, says the utility may continue purchasing at least part of its power from Chugach Electric or Municipal Light & Power instead of building a power plant large enough to serve MEA's 53,000 customers.

At a Palmer Chamber of Commerce meeting last week, Griffith said the utility is almost ready to seek builders for a 180-megawatt power plant, to be built on land the utility plans to purchase from the Alaska Native corporation Eklutna Inc.

But if he can strike a deal with one or both of Anchorage's two power-generating utilities for low-cost power, Griffith said the power plant could be built much smaller.

"If we had a reasonable power supply contract with Chugach or ML&P, we would probably not build a 180-megawatt power plant at Eklutna. We would build a 50-megawatt plant to 'load follow,'" Griffith said.

A load-following power plant is designed to provide power during peak hours, and then shut down when energy demand is low. MEA spokeswoman Lorali Carter said in Alaska that means the plant would kick on frequently during evening hours and in the winter.

Griffith cited a few concerns with building a power plant now. Chief among them is the lack of a steady natural-gas supply. Cook Inlet natural gas wells are waning, he said, and Southcentral Alaska came "within minutes" of experiencing brownouts last year.

More important, without a guaranteed gas supply, MEA is having trouble finding investors to help finance the new power plant -- $300 million to $400 million for a 130-megawatt plant, MEA officials have said.

"We don't have the money lined up to do it. If we had a gas supply, we'd have no problem. But I don't," Griffith said.

The idea of continuing to purchase most of its power from Chugach or ML&P is a departure for the Valley utility, which polled its members in 2007 and 2008 over whether they prefer "local power" generated by MEA or "imported power" purchased from Chugach Electric.

Members voted both times in favor of building a local power plant.

MEA currently purchases its power from Chugach Electric Association under a long-term contract that will end Dec. 31, 2014. The two power companies frequently have sparred, however. As a wholesale customer, MEA wanted more say in how Chugach rates were set. Both utilities tried takeovers. None was successful.

MEA managers, in pitching a plan to build a plant, repeatedly cited the need for local power and said they feared if MEA continued to rely on Chugach, Valley members might have to pay higher electrical rates to help Chugach pay off construction debts that are coming due.

In February, former MEA general manager Wayne Carmony said the utility planned to build a 130-megawatt power plant at Eklutna and would seek 50 megawatts from other sources, ranging from renewable energy to purchased power.

But Carmony was fired in June. Two other longtime MEA executives, assistant general manager Tuckerman Babcock and information technology manager Bruce Scott, were fired in April.

Griffith, formerly the chief executive officer at Chugach Electric, was hired as interim manager in late June.

Find Daily News reporter Rindi White online at www.adn.com/contact/rwhite or call her at 352-6709.

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