Nov 11 - Alaska Journal of Commerce


Electric utilities have nearly $1 billion worth of new power plant projects planned for Southcentral Alaska.

Matanuska Electric Association is in the preliminary stages of talks with contractors or private developers on a new 180-megawatt gas-fired power plant that could be built on a 70-acre land tract in Eklutna, just north of Anchorage, said MEA officials.

Cost for the plant could be in the $400 million range, according to Joe Griffith, MEA's general manager. The Palmer-based utility purchased the land from Eklutna Inc. as a potential power plant site.

Griffith and other Southcentral Alaska electric utilities presented their latest plans at an Anchorage Chamber of Commerce luncheon Nov. 2.

MEA's new plant could either be built by a contractor and owned by the utility or built privately by an independent power producer that would sign a power-supply agreement with the utility, said Lorali Carter, MEA communications director.

The utility is looking at both options, she said.

MEA is asking for bids from contractors by Jan. 29, with the goal of awarding a contract to build the plant next May and for construction to begin April 2012.

"We are on a very aggressive schedule because of the end of our all-requirements contract with Chugach Electric," in December 2014, Carter said. MEA currently purchases the bulk of its power from Chugach Electric Corp.

Besides getting the power plant construction underway and the financing secured, the utility must also secure a supply of natural gas for the plant, Griffith said.

That is becoming more of a challenge because of the depletion of gas reserves in producing fields in the Southcentral region.

The utility has considered a range of renewable and alternative power generation strategies, but none of them can provide sufficient electricity by 2015, when MEA needs it, Griffith said. Of the renewable energy options, the Fire Island wind project being pursued by Cook Inlet Region Inc. is the most promising, he said.

Large hydro projects in the region, as well as geothermal projects, are also promising but more in the long term. For the time being, the utilities will have to stick with natural gas.

A second major power plant project in the planning stages is the Southcentral Power Project, a 180- to 270-megawatt gas-fired plant in south Anchorage that would be built by Chugach Electric and Municipal Light and Power, Anchorage's city-owned utility. Chugach would own 70 percent of the project.

The plant is estimated to cost between $350 million and $400 million, Chugach spokesman Phil Steyer said. It would be located near International Airport Road in south Anchorage near Chugach Electric's existing station there.

"We are currently in the design and permitting stages for the plant. We have a request for qualifications on the street now to develop a list of qualified contractors. A final request for proposals to build the plant would be coming within a few months, Steyer said.

Chugach and MEA would finance their respective portions of the project separately. The goal is to have the plant in operation by 2015, Steyer said.

Efficient combined-cycle power generation systems would be used in the new plant, which capture waste heat to generate more electricity, Steyer said.

These new technologies generate more power with less gas. Typically a modern combined-cycle plant can generate a kilowatt of power using 7,000 British thermal units, or Btus, of gas, compared to older turbines, which needed 10,000 Btus to generate a kilowatt of power.

Making electricity with new generation systems that use 30 percent less gas will result in less demand on remaining gas reserves in Southcentral Alaska gas fields, Steyer and Griffith said.

In addition to its $111 million participation in the Southcentral Power Project with Chugach, Municipal Light and Power has $137 million in upgrades of turbines planned at two of its plants in Anchorage, ML&P general manager Jim Posey said.

Equipment for the upgrades will likely be ordered next year. One of the new turbines is expected to be on line by 2013 and the other by 2014, Posey said. The expected savings in use of gas through using modern, more efficient turbines is 25 percent, he said.

Tim Bradner can be reached at tim.bradner@alaskajournal.com.

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