AIDEA is now forced to sue the utility in order to prevail in its legal rights as the owner, because GVEA has blocked our efforts to restart the state-owned clean coal plant. HCCP sits on GVEA land, but GVEA will give us a lease for the site only if we agree not to operate or if we allow them control of plant development and operation.
For some two and a half years, AIDEA’s board and management have tried working with GVEA’s board and management to get HCCP operational and producing power for the Railbelt. GVEA has shown a lack of good faith in their dealings with us, breaching our settlement agreement.
AIDEA did not instigate the Healy Clean Coal Project. GVEA, on the other hand, was an early and ardent advocate of the project. But AIDEA owns the plant, so we have a responsibility to Railbelt power consumers who will directly benefit.
AIDEA has authority to sell wholesale power from HCCP, but it must be price-competitive. In 1999, when the plant was last operated, it delivered electricity at a cost slightly higher than alternatives. Today, HCCP may deliver electricity at less than one-half the cost of alternatives like GVEA’s new North Pole plant.
The Railbelt faces escalating costs and dwindling supplies of natural gas and must diversify sources of fuel for power. Recent studies show Southcentral Alaska may face shortages of natural gas by 2009, with gas prices expected to rise approximately 20 percent this winter. If HCCP was in operation today, it would displace about 9 percent of the natural gas being used for power generation in the Railbelt.
No one knows the price of oil or natural gas in the future, but the gap is projected to widen in favor of this clean coal plant. Utilizing HCCP could lower the costs of electricity to Railbelt consumers today and far into the future. Alaska has 50 percent of the nation’s coal reserves, but only one coal mine in operation at Healy, and limited coal-fired power generation in the Railbelt.
HCCP represents nearly $300 million of state and federal investment in a facility that many experts have said is capable of safely, reliably, efficiently and cleanly generating 50 megawatts of electricity. While GVEA has been busy stalling the restart of the clean coal plant, others have expressed interest in putting it into operation. This October, AIDEA executed a letter of agreement with Homer Electric Association to take initial steps necessary for plant operation.
GVEA claims the plant suffers from faulty design, but they were part of the plant’s design team. If the plant is so faulty, why has GVEA spent hundreds of thousands of their members’ money on consultants and out-of-state lawyers trying to get control of the plant?
AIDEA is not requiring any utility to make any investment in HCCP. If we are not requiring someone else to risk investment, or to buy electricity at a higher price than the alternatives, why is GVEA opposing our restart of our own plant?
GVEA needs to get out of the way and let AIDEA restart this power plant. It is owned by the people of Alaska and it will generate competitively priced electricity for the Railbelt, provide a new market for Alaska coal and create local jobs in Healy.
AIDEA welcomes a full understanding of HCCP and support from Railbelt consumers in its effort to restart this vital plant. Background on HCCP and the complaint can be found at www.aidea.org.
Anchorage businessman Mike Barry is chairman of AIDEA’s board of directors.
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