By New Year's day next year, Homer Electric will be supplying all its own energy with new technology that partners with one of the world's oldest energy sources, steam.
Since waste heat is being used to produce steam, the Nikiski HEA plant will see an increase from its original output of 40 megawatts to 60 megawatts without using any additional natural gas. Natural gas will be used to bring the plant up to its full 80 megawatt capacity when operated above 60.
HEA gave public tours last week of the facility that drew in more than 100 HEA members of the cooperative. The event helps the public envision what's next since the utility ends its agreement with Chugach Electric on Dec. 31. After nearly 50 years of buying nearly 90 percent of its power from CEA, the smaller utility is going it alone with a combination of new and old technology.
The Nikiski Combined Cycle Conversion project is part of a package of generations under Independent Light, which costs $180 million for all the projects.
During the tour, Engineer Bob Day explained how the technology HEA uses will capture exhaust heat from its gas-powered generation turbine. Then it will convert that to steam and then to electricity for the bulk of the power used on the Kenai Peninsula.
HEA is currently constructing two power plants on the Kenai Peninsula, one in Nikiski and one in Soldotna. It is also overhauling the Bernice Lake Power Plant recently purchased from Chugach Electric.
The Nikiski Combined Cycle Conversion Project is the cornerstone of HEA's plan for producing its own power when the existing power supply contract with Chugach Electric expires at the end of 2013, spokesman Joe Gallagher explained.
The primary component of the Nikiski Combined Cycle Conversion Project is a steam turbine. The new turbine will be powered by steam produced from exhaust heat coming off the existing natural gas turbine. Upon completion of the project, the capacity of the existing Nikiski Generation Plant will nearly double, from 40 megawatts to as much as 80 megawatts.
The total amount of usage by the 30,000 meters throughout HEA's service areas are 65 megawatts that can go up to 85 in the winter time, Gallagher said.
Construction crews have been on site at the HEA property in Nikiski, adjacent to the former Agrium Plant, since April 2011. As of May 2013, work is finishing up inside the new building where the steam turbine and generator will be housed.
A second part of the generation plan is the installation of a combustion turbine at HEA's property on the Sterling Highway in Soldotna. The 48-megawatt LM 6000 turbine will be used as a backup source of power for HEA. Construction at the site is underway and the Soldotna Combustion Turbine Project is expected to be on line this summer.
The third component is the Bernice Lake Power Plant. Homer Electric purchased this plant from Chugach Electric in 2011. The addition of the Bernice Lake Power Plant to HEA's generation portfolio eliminated the need for a second turbine at Soldotna and will save Homer Electric members more than $15 million.
"HEA will augment some of its peaking and load following requirements with inexpensive energy from Bradley Lake where we receive 12 percent, (11 megawatts) of the renewable power produced at the state-owned hydroelectric facility located at the head of Kachemak Bay," Gallagher said.
On the renewable energy front, Homer Electric, through its subsidiary Kenai Hydro LLC, continues to study the feasibility of a five megawatt Grant Lake hydroelectric project near Moose Pass on the Kenai Peninsula. The Grant Lake project is still in the study phase, with a series of field studies set to be carried out in 2013. But that has proven controversial to area residents who have attended numerous public meetings.
HEA has signed a contract with McMillen LLC to conduct the Natural Resources Study Plan in 2013. The field work will incorporate the relevant comments received during the Federal Energy Regulatory Commission's scoping process and will augment and supplement the field studies performed in 2009 and 2010. McMillen began the field work earlier this spring.
Upon successful completion of the field work in 2013, Homer Electric will continue through the Federal Energy Regulatory Commission licensing process with a goal of submitting a Final License Application in January of 2015, Gallagher said.
Renewables are also part of the future energy snapshot. HEA is working with Ocean Renewable Power Company on a pilot project to develop a tidal power project in Cook Inlet, near the East Foreland area. The initial plan is to install four 150-kilowatt devices into Cook Inlet. If the initial phase is successful, the project would be expanded to a five megawatt system. The project timeline is dependent on obtaining grant funds for the demonstration project.
HEA Board Member Jim Levine said it's an exciting time for HEA.
"It's great. We're providing for our own power now instead of buying it from somebody else. It adds jobs to the peninsula and that's good," Levine said.
Michael O'Meara, the spokesman for the Homer Electric Membership, said he has nothing but praise for the concept of co-generation – using the steam to lower the amount of natural gas. But he warns it won't lower electric rates.
"It won't lower anyone's electric bills. It's unlikely anything that anyone does can do that. In order to generate power, we committed the next 20-30 years to using primarily natural gas. As long as you have to buy fuel, it's going to be tied to the market and a long range curve for all fossil fuels is to increase in expense," O'Meara said.
But it could help stabilize rates because the steam turbine can generate up to 40 percent of the electricity, O'Meara said. "Then we don't have to buy as much fuel."
All of these projects, under the umbrella of Independent Light, took an initial investment of loans.
"We haven't started paying back the costs through rates, because that can't be done until the system comes on line," O'Meara said. In 2014, people can expect to see some rather significant costs in their HEA bills as they recover the costs from the loans, though O'Meara said he's sure the costs will be phased in and gradual. Gallagher agreed.
In the big picture, consumers need to be realistic -- they will never see low utility rates in the future. But they can make homes more energy efficient and reduce costs that way.
"The solution is to use the energy you have as efficiently as possible. You will save money. So that's the place to start," he added.
Naomi Klouda is a reporter at the Homer Tribune. Used with permission.