Movement on Healy plant

Patricia Jones, Petroleum News Contributing Writer

Talks have resumed over the fate of the shuttered experimental coal-fired power plant built in the Interior Alaska community of Healy with nearly $300 million in state and federal funds.

Board members from Golden Valley Electric Association and the Alaska Industrial Development and Export Authority met May 29 at the Healy Clean Coal Project, the second gathering since early April of the two groups long at odds over the shuttered facility.

“It was very good for the AIDEA board to see reality … to talk to the plant operators,” said Kate Lamal, vice president of power sales at Golden Valley. “After the meeting last week, there will be some movement.”

The two boards agreed to set up a joint task force to come up with a plan for restarting the plant, which has sat idle since completion of a 90-day test period in December 1999.

“We’re working with them to see if there’s some way to get the plant operating,” said Steve Haageson, Golden Valley president. “I think we’ve started down that path.”

The U.S. Department of Energy provided the largest share of funds for the Healy project in a $117.3 million grant awarded in the early 1990s. State funds, including $85 million in AIDEA bonds, provided most of the remainder.

Shortly after construction was complete in November 1997, Golden Valley and AIDEA began debating the reliability and economics of the experimental plant. Golden Valley also contends that other issues that must be addressed are safety and long-term viability.

In past years, the two groups debated potential fixes for the plant, with Golden Valley insisting a full retrofit was necessary and AIDEA unwilling to take on more debt. Additional federal funds of up to $125 million for the project were authorized last year, with appropriation expected this budget cycle, Haageson said.

“It’s good to have that funding in place,” he said. “It’s probably the brightest star on the horizon.”

As owner of the facility, AIDEA has spent about $9 million a year on the Healy plant since construction was completed, according to a former project manager. That includes debt payments on the bonds and about $3 million a year to keep the plant in standby mode.