Homer utility eyes Healy coal plant

A Homer electric cooperative is eyeing the closed Healy Clean Coal Plant as a future source of power.

The $300 million state-owned plant, located 78 miles southwest of Fairbanks, was built in the mid 1990s to tap the Usibelli Coal Mine and demonstrate environmentally conscious coal-burning technology.

The state shut down the plant after the Golden Valley Electric Association, which tested the facility, refused to operate or buy it, saying the plant was "fatally flawed."

Now Homer Electric Association Inc. is hoping the Fairbanks-based electric cooperative's conclusions are wrong.

The Homer utility, a 20,000-member cooperative that powers the western Kenai Peninsula, agreed to manage the power plant if it passes an engineering review and facility inspection.

The utility already manages a state-owned hydroelectric station at Bradley Lake near Homer.

Four-month analysis of plant

The analysis of the idle Healy plant will be conducted over the next four months at the state's expense, said Joe Gallagher, spokesman for the Homer cooperative, which announced its plans Oct. 7.

"It's a first step," Gallagher told the Fairbanks Daily News-Miner. "There's a long way to go. Everyone is excited about getting started with this review."

The Homer utility signed an agreement with the Alaska Industrial Development and Export Authority after negotiations started in the spring, Gallagher said. The authority is the economic development arm of state government and the agency responsible for the Healy plant.

"(Homer Electric) has been through the plant," said Ron Miller, executive director of AIDEA. "The conclusion is the plant should be up and running.

Restarting the plant would involve the studies, some modifications and upgrades and would cost about $20 million. This would be paid for by the authority, Miller told the Peninsula Clarion in Kenai.

90% of Homer Electric's power from gas

Electric utilities need a source of power to generate electricity. Currently, about 90 percent of Homer Electric's power generation comes from natural gas, Gallagher said. The rest comes from hydroelectric power.

The Homer utility is interested in selling the power to other utilities, but would use the power for its own members if needed, Gallagher said.

A spokesman for the Usibelli Coal Mine said the Homer utility's interest in the power plant is good news.

"We are ready to start delivering coal tomorrow," Steve Denton said.

The Fairbanks utility will assist Homer Electric in its investigation, said spokeswoman Corinne Bradish.

The utility backed out of negotiations with the state to buy the plant last year after its offer of $70 million was turned down. The Fairbanks utility contends the power plant's design is faulty and its experimental technology unproven.

If the state had accepted its offer, the utility planned to retrofit the plant with traditional burners using about $60 million in hoped-for federal funds.

"We're going to open our books and let (Homer Electric) look at everything," Bradish said. "We've always wanted nothing more than to see this plant up and running."