The Alaska Industrial Development Export Authority, Golden Valley Electric Association and Homer Electric Association approved terms for a three-way deal for the sale of the power plant. The announcement was made during a press conference in Anchorage on Wednesday.

Under the terms, GVEA will purchase the plant for $50 million. AIDEA will finance the sale at a 5 percent interest rate, amortized over 25 years, and provide GVEA with an additional $45 million line of credit at 6 1/2 percent to cover restart costs, also amortized over 25 years.

HEA agreed to purchase half of the energy produced by the plant starting in 2014. HEA is not investing any money up front.

During negotiations, AIDEA had four objectives, said Pat Galvin, AIDEA board chairman. The first was to get the Healy plant on line; second, to negotiate the sale agreement; third, to keep the sale price reasonable to AIDEA; fourth, to retain a good business relationship with all involved parties.

"This historic agreement fulfills these objectives and brings years of dispute to an end," Galvin said.

AIDEA and GVEA have been locked in a legal battle for nearly a decade and the plant has not been in operation since 2000. The 50-megawatt plant, which was originally constructed for GVEA, was completed in 1997 at an approximate cost of $297 million.

A trial to resolve the current litigation between AIDEA and GVEA is set for June 1. The trial will be dismissed when the transaction is complete, which Galvin estimated could take six to eight months.

"We're highly reliant on oil, this will help relieve that," said GVEA Board Chairman Bill Nordmark. "Coal is very stable," he said. "When and if (the price of oil) does rise, we can fall back on coal."

HEA spokesman Joe Gallagher said no estimate has been made on the potential savings there could be for HEA members, but the main reason behind HEA's involvement in the deal was to find other sources of energy.

"The resulting agreement will be a win-win-win for all parties," Galvin said.

Several HEA members disagree.

Many attended HEA's board meeting Tuesday to voice their opinion against the coal-fired plant and the lack of transparency from the board.

"The co-op needs to become more open," said Mike O'Meara of Homer, spokesman for the HEA Members Forum, a group developed around moving HEA toward a renewable energy base.

"Clearly this plant has been a disaster in terms of engineering right from the start," O'Meara said. "It's been a black hole for money."

O'Meara testified to spending more than $20 a day on electricity for two buildings during the recent cold snap. He said HEA's high rates are "really hurting people."

Despite members' plea for more openness, the HEA board held an executive session Tuesday to discuss the Healy power plant. HEA Board President Debbie Debnam said legal documents and other items were being discussed, which could not be talked about in an open session.

She said being part of the Healy plant deal is one way to add to the diversification of fuel and lessen HEA's reliance on natural gas.

"It's a bonus for all HEA members," she said.

In O'Meara's opinion, "Coal is a dead end."

Mike Nesper is a reporter for the Peninsula Clarion.