Anchorage power needsML&P GM says generation capacity needs to be built, discusses plans ALAN BAILEY Petroleum News
Addressing a recent debate over the necessity or otherwise of the Southcentral electric utilities to build much new power generation capacity in recent years, Mark Johnston, general manager of Municipal Light & Power, told the Anchorage Chamber of Commerce on Aug. 1 that aging power plants tend to suffer from reliability issues and that 56 percent of his utility’s generation capacity was beyond its useful life.
“We’re building new generation because the stuff that we have is old,” Johnston said.
ML&P has worked with Chugach Electric Association to build the Southcentral Power Project, a modern, high-efficiency, gas-fired generation facility now in operation in south Anchorage. ML&P has also been building its own high-efficiency power plant, called Plant 2A, adjacent its existing power generation units in the north of Anchorage.
Johnston said that, although ML&P’s 20-square-mile service area is quite small, the utility serves many of the businesses that operate in Anchorage. And, while only about 20 percent of the utility’s customers are commercial organizations rather than residential, those commercial customers account for about 88 percent of the utility’s total load, he said. About 18 percent of the utility’s power comes from hydropower systems at Eklutna, north of Anchorage, and from Bradley Lake on the Kenai Peninsula. The remaining 82 percent of the power comes from various gas-fueled facilities.
Aging plants The utility still operates two plants, constructed between 1962 and 1984, with seven gas turbines and one steam turbine - the oldest plant is 54 years old, Johnston said. While, in general, a power plant has a life expectancy of about 35 years, the average age of ML&P’s plant, including the new facilities, is 38.4 years, he said. It is possible to overhaul aging generators at a cost of several million dollars, but that money ends up going into extending the life of a unit that is inefficient, burning more fuel than a modern facility. And the cost of fuel represents up to 50 percent of the cost of the electricity, he said.
By bringing modern units online and retiring or placing on standby the older systems, the utility can control its costs, using the most modern equipment as much as possible.
Johnston said that while the combined loads in 2015 for Southcentral utilities, ML&P, Chugach Electric and Matanuska Electric Association, amounted to about 519 megawatts, the combined capacity of the new plants that these utilities have been building, including MEA’s new facility at Eklutna and ML&P’s Plant 2A, adds up to 470 megawatts. And although it appears that a total capacity of 103 megawatts in available hydropower can more than cover the resulting shortfall of 49 megawatts in modern gas-fired generation, water levels in the various hydro facilities cannot sustain full power output for more than four to six months, he commented.
“There are those that will tell you that there is excess generation in the Railbelt. I don’t believe that to be the case,” Johnston said.
Moreover, in the interests of avoiding a single point of failure in the system, it makes more sense to build several power plants than to put all eggs in the basket of a single large plant, he commented. The use of a series of smaller generation units rather than a single large unit also allows flexibility in switching units in and out, depending on the load, to make best use of the more efficient units and to enable downtime for maintenance.
Plant 2A The location of ML&P’s new Plant 2A is particularly advantageous, with the plant sitting adjacent the water supply line to Anchorage from the Eklutna Lake, Johnston said. The relatively cold water from the glacier-fed lake can be used to help cool the turbines in the power plant, enabling the turbines to run with maximum efficiency and with reduced emissions. Then, the excess heat transferred from the power plant to the water elevates the temperature of the water, thus reducing the gas and electricity that Anchorage residents need to use for water heating. In addition, a snow melt system using heat from the plant will avoid the necessity to remove and store plowed snow during the winter.
Plant 2A should go on line in the fourth quarter of this year, Johnston said.
Beluga River gas Having in 1996 purchased a one-third share of the Beluga River gas field on the west side of Cook Inlet, ML&P has been able to furnish most of its own gas for power generation, an arrangement that has saved its ratepayers about $239 million over the past 20 years, Johnston said. Accumulated revenues from the sale of some of its Beluga gas have also enabled ML&P to pay cash, rather than seek financing, for the recent purchase of an additional 23 percent of the field from ConocoPhillips, with Chugach Electric also coming in with ML&P to buy a share of the field. The stable additional fuel supply from Beluga should save ML&P’s customers $108 million over the next 18 years, Johnston said.
A changing industry Johnston also reflected on changes that are starting to appear in the electricity business.
Distributed generation in which relatively small-scale electrical sources are placed close to where the power is needed are making inroads into the traditional arrangement of having a large central generating plant connected to load centers by a transmission network. Localized solar power, for example, can supply power direct to a building that solar equipment is attached to. Despite Alaska’s long, dark winters solar power can prove effective in the state - a downtown Anchorage building has a solar power system and there are a number of houses in the city that have solar cells, Johnston said.
Providence hospital and the Alaska Native Tribal Consortium are considering the use of combined heat and power technology, an arrangement whereby a small turbine system provides power on site for a facility while excess heat from the turbine helps heat the facility’s buildings, Johnston said.
Another innovation is the use of smart electric meters than can provide near continuous readings on electrical consumption, thus enabling possibilities for energy savings to be identified, predictive maintenance to be conducted and power outages to be more efficiently identified and dealt with. ML&P is about to conduct a pilot project for smart meter use, with results from the pilot anticipated by early next year, he said.
Asked about the possibility of using power from a wind farm that Cook Inlet Region Inc. has build on Fire Island, offshore Anchorage, Johnston said that ML&P had worked closely with CIRI and hoped to find a way of participating in the Fire Island project. But the utility had found that it could generate power more cheaply than can the wind farm, in addition to which there are issues relating to regulating the wind power supply, given the variability of the supply as the wind strength fluctuates, Johnston said.
Power pooling Another major issue facing ML&P in the future is the question of how best to pool power with the other Railbelt utilities and make best use of the cheapest power sources through what is referred to as economic dispatch. The Railbelt utilities have been engaged in discussions relating to the potential formation of a unified operator or a transmission company for the transmission grid.
Currently ML&P is working with Chugach Electric on a new power pooling arrangement, by combining the loads of the two utilities and then pooling the utilities’ generation capabilities, using the least-cost available generation to meet each additional kilowatt hour of load as the load increases. Preliminary calculations point to savings of millions of dollars per year in electrical costs for customers, Johnston said. The power pooling arrangements that the two utilities are establishing could potentially be expanded in the future to other utilities in the Railbelt, he said.
ML&P is also working with the Municipality of Anchorage to further an initiative by the mayor to replace sodium vapor street lights with LED lights, an arrangement that, while involving some initial expense, would in the longer term provide a large payback in terms of reduced maintenance costs, Johnston said.
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