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MEA moves forward on Eklutna power plant Southcentral Alaska utility wants its own generation capacity that can adapt to an uncertain outlook for fuel supplies in the region Alan Bailey Petroleum News
Having issued a limited notice to proceed on March 15, the Matanuska Electric Association is moving forward with plans to build a new power plant at Eklutna, next to the Glenn Highway, north of Anchorage, MEA General Manager Joe Griffith told the Regulatory Commission of Alaska during a public meeting on April 13.
The plant would use reciprocating engines rather than turbines to turn its generators, Griffith said. This type of engine is more appropriate to handle MEA’s power load than turbines — the engines can be throttled and have relatively low noise levels, he said. And, although natural gas is the anticipated primary fuel for the new plant, the reciprocating engines could use alternative fuels such as diesel fuel or propane, thus giving the plant some fuel flexibility when facing potential gas supply shortfalls from the Cook Inlet gas fields.
$250 million With 10 generator units, MEA estimates that the new power plant will cost about $250 million, although there is a more scaled down option with six units that would likely cost about $30 million less, Griffith said. A transmission line from the plant would cost an additional $15 million, he said.
For 30 years or so MEA has been buying most of its power from Anchorage-based Chugach Electric Association, with the remainder of MEA’s supply coming from hydroelectric power. But with the power purchase agreement with CEA coming to an end on Dec. 31 2014, MEA needs to find a new way of doing business and sees the availability of its own power generation facilities as one key to meeting the utility’s objectives of providing affordable power from sustainable sources, Griffith said.
MEA also supports the initiative to build a hydroelectric power station at Watana on the Susitna River, and has been considering the future purchase of geothermal and wind power, Griffith said. However, without its own generation capacity, capable of counterbalancing fluctuations in wind power output, MEA has not been in a position to negotiate the purchase of power from a planned wind farm on Fire Island, near Anchorage, he said.
Gas supply contracts Griffith said that he has been discussing potential gas supply contracts for the Eklutna new plant with several independent Cook Inlet gas producers but has yet to land a long-term contract. And, although there have been some encouraging signs of new exploration activity in the Cook Inlet basin, Cook Inlet needs a larger gas market, especially given the recent closure of the LNG plant on the Kenai Peninsula, he said.
All of the Southcentral gas and power utilities, including MEA, are working on an option to import LNG to bolster local gas supplies, Griffith said. And MEA, through the Natural Gas Supply Co., participated in the open seasons for the two proposed gas lines from the North Slope, to enable the future purchase of North Slope gas if a gas line is built, he said.
Meantime the road has been upgraded and land cleared at the Eklutna power station site — the site is close to a gas line, water and the road system, Griffith said. MEA is currently monitoring air quality, as a prelude to seeking an air emissions permit. The utility is negotiating a development schedule with its contractor. Financing of the project appears feasible, and MEA anticipates making a go/no-go decision for construction about a year from now.
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