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State's boondoggle coal plant moves closer to opening doors

  • Author: Alex DeMarban
  • Updated: September 27, 2016
  • Published October 6, 2012

The long dormant Healy Clean Coal Plant, a $300 million state-owned fiasco that shut its doors soon after they were opened, may get a second lease on life, thanks to a commitment by the Golden Valley Electric Association (GVEA) to spend tens of millions of dollars to reduce pollution at the plant if it fires up again.

Utility officials believe that bringing the plant back to life will reduce oil-dependent energy costs in the Interior, according to the Fairbanks Daily News-Miner.

In a deal stuck with the Environmental Protection Agency and the state, the utility has agreed to pay the state $50 million for the 50-megawatt plant and plunk down more than $40 million on pollution-reduction measures. The utility must also take other steps, including speeding up installation of a $5 million pollution-control system at another coal plant the utility operates, according to the paper.

The deal brings Golden Valley closer to completing an air quality permit that has stymied efforts to reopen the plant's doors.

The state-owned power plant operated sporadically in the late 1990s, using an experimental process to burn low-grade coal. Safety and reliability issues forced the state to mothball the plant in 2000. Alaska Dispatch has dubbed the facility, which costs the state $2 million a year just to keep idle, one of Alaska's top boondoggles.

Pollution-reduction measures won't be the only costs under the deal. The utility plans to spend $20 million to fix safety and reliability issues, according to the News-Miner article.

Despite the expenses, utility officials expect to save money because generating power from oil is so costly. They hope to see those savings within 24 months.

"GVEA Interim President Cory Borgeson said it's hard to say how much the plant could cut local utility bills, since electric rates are now affected by fluctuating oil prices. But he said significant savings are expected," the News-Miner notes.

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