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HEA moving ahead with system upgrades Kenai Peninsula utility in process of building new natural gas generation facilities as part of its independent light program Alan Bailey Petroleum News
Connected to the rest of the Alaska Railbelt electrical grid by a single intertie and with its power supply contract with Chugach Electric Association due to terminate at the end of 2013, Homer Electric Association, or HEA, the main power utility on the Kenai Peninsula, has been moving ahead with its so-called “independent light” program for future power supplies.
New generation The independent light program, decided on by the HEA board in 2008, consists essentially of building and obtaining new power generation capacity on the peninsula to enable the utility to meet its own power generation needs. However, HEA will also purchase power from other Railbelt utilities when that makes economic sense, Brad Janorschke, HEA general manager, told the Regulatory Commission of Alaska on April 11 during an update to the commission on the current status of the utility.
“It’s certainly different than treating ourselves as an island like Kodiak,” Janorschke said.
Currently the utility obtains most of its power from Chugach Electric, while also obtaining about 39 megawatts from its own gas-fired power station at Nikiski on the west coast of the peninsula. The Bradley Lake hydroelectric facility in the southern Kenai Peninsula also provides about 14 megawatts for the peninsula, according to the HEA website. HEA’s total annual demand is 84 megawatts, with a total system generation requirement of about 110 megawatts, the website says.
Of three short-listed options for HEA power supplies after the termination of the utility’s Chugach Electric contract, the independent light program offered the lowest cost to HEA’s ratepayers, Janorschke told the commission. The other options on the shortlist consisted of HEA participating in the new gas-fired power station that Chugach Electric and Municipal Light & Power are building in South Anchorage; and the continuation of the power supply contract with Chugach Electric, he said.
Main components The two main components of the independent light plan consist of a major upgrade to HEA’s Nikiski plant and the installation of gas-fired power generation in Soldotna, to the east of the city of Kenai.
HEA has also purchased the 69.9-megawatt Bernice Lake gas-fired power station near Nikiski from Chugach Electric, with that deal completing in late 2011.
In April 2011 HEA broke ground for a new power house at its Nikiski power station, to add a new high-efficiency, combined cycle, gas-fired, steam turbine generator to that facility.
“It will go from a 40-megawatt facility to a 58-megawatt facility with no more additional fuel,” Janorschke said. The use of additional fuel would enable the plant to produce about 78 megawatts of power, he said.
The new turbine at Soldotna will have a 49-megawatt capacity, according to the HEA website.
The upgraded Nikiski plant should go on line late this year or early in 2013, with the Soldotna unit going on line in the summer of 2013, Janorschke said.
And the utility has built a new dispatch center at Nikiski to manage its power generation systems.
“We’ve got a lot of new investment in generation and we want to make sure it gets operated and maintained properly,” Janorschke said.
Nikiski plant The high-efficiency power plant in Nikiski will meet HEA’s base load needs, while the Soldotna plant, located at the hub of the Kenai Peninsula grid and at the connection point with the transmission intertie to Anchorage, will meet peak power needs and also provide what are referred to as “spinning reserves,” the extra power capacity that utilities keep in their back pockets to cover any potential supply shortfalls.
However, since the upgraded Nikiski power station will operate at maximum efficiency at 58 megawatts, upping the power output there or starting up relatively inefficient plants at Soldotna or Bernice Lake would increase the cost of the power. So if, say, HEA needed an extra two or three megawatts to cover a small spike in demand, the utility would first try to obtain cheaper power from active power units operated by other Railbelt utilities rather than starting up some of HEA’s own systems to cover the load, Janorschke explained.
Contracted gas Janorschke said that HEA has contracted with Hilcorp Alaska to meet all of the utility’s natural gas needs from Jan. 1, 2014, to March 31, 2016, after the termination of the Chugach Electric power supply contract, with an option to extend the Hilcorp contract up to a further two years. Beyond that HEA faces the same gas supply uncertainties as other Southcentral utilities.
“In the long term we are going to be continuing to work with the other utilities and other entities to try to find out where we are going to get long-term gas for Alaska,” Janorschke said.
Small gas producers in the Cook Inlet basin have been unwilling to commit to providing the bulk of HEA’s gas supplies because, having very few wells, these producers do not wish to risk becoming a utility’s sole-source provider, Janorschke said.
“They said go find a base load supply of gas from a large producer and then come back and talk to us about smaller increments. So that’s what we’ve done,” he said.
Hydropower Looking out into the future, HEA has been working with other Railbelt utilities and with the Alaska Energy Authority on proposed new hydropower systems at Watana on the Susitna River and at Battle Creek. HEA has also proposed building its own small five-megawatt hydroelectric facility at Grant Lake, near Moose Pass on the Kenai Peninsula. The Grant Lake proposal has met with opposition from people concerned about potential environmental impacts — HEA has been addressing the concerns and is continuing with a study for the project, Janorschke said.
HEA has also signed an agreement with Ocean Renewable Power Co. for the development of a pilot tidal current generation system in Cook Inlet at East Foreland near Nikiski. And HEA’s net metering system — the arrangement whereby the utility’s members can connect their own small-scale renewable energy generators to the grid — has taken off, with 52 members now interconnected with HEA’s system, Janorschke said.
Transmission upgrades In parallel with its independent light power generation program HEA is upgrading the sparse and aging power transmission infrastructure on the Kenai Peninsula. The transmission line upgrades are being funded through a state grant.
Particularly critical are the transmission circuits between Soldotna, Nikiski and Kenai where, because of capacity constraints, there is in effect a single transmission line connecting the critical power generation system at Nikiski to the rest of the power grid. An upgrade of the line that carries power between Nikiski and Soldotna from 69 kilovolts to 115 kilovolts will rectify that particular problem — work on that upgrade will probably start next winter, Janorschke said.
HEA is also upgrading some electricity substations on the peninsula.
The best option for further improvements to the stability of the power supplies on the Kenai Peninsula would be the installation of a second transmission intertie between Anchorage and the peninsula, Janorschke said. That “would do wonders for everybody and I think is where we have to go eventually,” he said.
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