Anchorage Daily News

On May 12, the Homer Electric Association board of directors sent a clear message to the Golden Valley Electric Association: Healy 2 is a bad deal and we don't want any part of it.

Citing the cost and risk to its member/ratepayers, the HEA board voted 8 to 1 to start the process of disengaging from the Healy 2 coal project.

We commend the board for:

• Refusing to spend $47.5 million of members' money on a failed, experimental facility.

• Recognizing the risk of significant added costs from having to comply with new mercury and CO2 emission control requirements.

• Realizing that over time, rising coal markets would increase the price we would pay for energy from the Healy 2 plant.

• Embracing natural gas and renewable energy as superior options for producing the safe, dependable, affordable baseload energy that HEA members need.

• Refusing to be manipulated into taking the risk and paying the costs for GVEA to acquire the Healy 2 plant at a bargain basement price.

GVEA and the Alaska Industrial Development & Export Authority have been in litigation over the plant since 1998. According to documents submitted to the court by GVEA, construction of the 50 megawatt plant was completed in 1997 using experimental technology intended to remove acid rain-causing pollutants. Controls for mercury or greenhouse gas emissions were not included.

In 1999, after a series of startup problems, the plant failed a 90-day test of its safety, reliability, and economic feasibility. According to GVEA, it has been shut down since January 2000, because safe, reliable, and economic operation was not possible with the experimental technology.

Seeing an opportunity to get the Healy 2 plant at a fraction of its original price, GVEA management swallowed concerns over 1999 operational problems and proposed a deal with HEA to cover much of the cost and assume most of the risk of a restart. Fortunately, the HEA board saw the light.

In a May 15 story by the Peninsula Clarion, HEA board vice president Tim Evans said, "It just didn't pencil out for me." Among other things, he expressed concern over GVEA asking HEA ratepayers to participate in the project, assume a large financial risk, and yet have no ownership in the plant.

HEA Members Forum overwhelmingly supports our board's responsible decision to reject this scheme. Renewable energy is the best way to ensure fixed-cost power over the long term. Getting involved with unproven coal technology would have been a step backward in HEA's efforts toward rate stabilization. As ratepayers, we applaud the HEA board's decision to protect our financial interests and opt out of a Healy 2 coal plant restart.

Mike O'Meara is a spokesman for the Homer Electric Association Members Forum.

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