State, Homer Electric reach deal on Healy

Homer Electric Association said it has reached an agreement with the state to restart the Healy Clean Coal Project.

The utility announced Nov. 16 that it has signed a formal agreement with the Alaska Industrial Development and Export Authority to resurrect the 50-megawatt power plant.

The authority owns the plant, which was built at a cost of nearly $300 million with federal and state funds. The plant was completed in 1997, but it has not been used to produce electricity since it failed a required 90-day test period in 1999.

Homer Electric entered an agreement with AIDEA earlier this year that allowed the utility to conduct an engineering review and inspection of the plant. Homer Electric determined it could be operated at a competitive price using the plant’s “clean coal” technology.

AIDEA will continue to own plant

“The Project Development Agreement is a major accomplishment for both the state and Homer Electric,” said AIDEA’s executive director, Ron Miller.

The agreement comes despite Gov. Frank Murkowski’s June capital budget veto of an allocation designating $12.5 million to the authority to restart the plant.

Homer Electric spokesman Joe Gallagher said the utility plans to start buying power from HCCP in 2014, at the end of a long-term supply contract with another utility. He said he didn’t know when the plant would begin producing power. Homer Electric will not have access to the site until AIDEA resolves an ongoing dispute with Golden Valley Electric Association over the plant, Gallagher said.

Golden Valley owns the land at the site and another coal-fired plant next to the facility shares resources with it. Golden Valley offered to buy the plant from the state in 2004 and run it using conventional coal-burning technology. That offer was turned down.

“Golden Valley has always wanted the plant to run,” GVEA Vice President Tom Irwin said. The priority now, he said, is to ensure the plant runs safely, economically and reliably.

—The Associated Press