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ML&P’s New Plant Under Construction

Efficient energy for Anchorage’s oldest neighborhoods

Artist rendering of Municipal Light & Power’s George M. Sullivan Plant expansion project in Anchorage.

Artist rendering of Municipal Light & Power’s George M. Sullivan Plant expansion project in Anchorage.

Image courtesy of ML&P

Five years ago, Municipal Light and Power (ML&P) began the process of considering, evaluating, and deciding whether or not they should build a new power plant.

About two years from now, on June 16, 2016 at exactly 12:01 a.m., ML&P General Manager Jim Trent says the utility will fire up the engines and commission the George M. Sullivan Plant 2A expansion project into service.

ML&P provides power to over thirty thousand people living in the Municipality of Anchorage, covering areas north of Tudor Road and west of Boniface Parkway. Operating revenue comes from 14 percent residential users and 61 percent commercial users, spanning businesses in the U-Med District, downtown Anchorage, and midtown.

 

Initial Concerns

“We considered the ramifications of how, when, and why—and the dollars—and decided that the best interest for our customers here in Anchorage was an additional power plant to provide continuous uninterrupted service to our customers, who really think that any time they turn on a switch, they should have power, and we adhere to that strategy,” Trent says.

Concerns for a steady natural gas supply of the partially owned Beluga gas field in Cook Inlet spurred the idea to build a new power plant, Trent says. Gas diminishing is no longer an issue after ample natural gas reserves were discovered in the area.

“The primary reason we decided to build the plant was to make sure that we had sufficient power for the growth of Anchorage and to prepare for any major outages that may occur, so we had redundancy and equipment,” Trent says. “We also have dual fuel power plants running. So if there’s a disruption in natural gas, we have diesel fuel tanks to support the continued power production. When everything goes to hell in a hand basket, we plan to be up and running.”

 

Centered on Efficiency

ML&P chose Quanta Services out of twelve companies to handle engineering, procurement, and construction for the project.

“Leveraging our local Alaskan expertise and resources will play a critical role in performing this project safely, on time, and on budget. We look forward to bringing jobs and economic benefits to the area and being part of the local community over the next several years as we build this project,” says Randall Wisenbaker, Quanta Services executive vice president of operations.

The new plant, next to the George M. Sullivan Plant 2 in east Anchorage, is a highly efficient, 120-megawatt thermal generation power plant. It is installed with two GE jet-engine combustion turbine generators and one steam unit.

ML&P estimates emissions at 97 percent less nitrogen oxides, 80 percent less carbon monoxide, and about 30 percent less carbon dioxide compared to its eight existing power turbines. Trent attributes the overall efficiency of plant design to the improvements of the newest GE turbines over the old generators, due to technological advances centered on the engine’s carburetor.

Fuel efficiency is estimated to average a 15 percent reduction in overall natural gas use, equal to more than $13 million annual savings at $5 per 1,000 cubic feet bulk rate. The new Plant 2A is measured to run 35 percent more efficient than ML&P’s current turbines in use.

 

Byproduct Benefits

Anchorage Water and Wastewater Utility, or AWWU, is less than a mile away. Its location will allow the plant to send steam to heat the city’s water supply. Supervisory Control and Data Acquisition, or the SCADA system, allows ML&P to digitally control the temperature of the water, along with the entire plant operation.

“The hot water to [AWWU] has to be at a specific temperature to avoid parasitic degradation. If we give them water that’s too hot, they have to add chlorine to the water to offset the parasites,” Trent says. “So the engineering is very strict in terms of the degree of hot water we can deliver. It has to be seventy-five degrees, no hotter and no cooler, which means the engineering efficiency is critical to the overall success of the plant.”

The average age of the gas turbines run by ML&P is thirty-four years old, with exclusion of the Southcentral Power Project which began commercial operations in January 2013. Even with the fifty-four megawatts from its share of the Southcentral Power Project, there is still a need to replace the equipment that exceeds its thirty-year design life, Trent says.

“Out of all eight of the other plants, some of them will be retired when [the new Plant 2A] comes online, which adds to our overall efficiency,” Trent says. “This plant on its own merits will be the single most efficient [thermal generation] plant in North America.”

 

ML&P ground breaking on April 23. From Left to Right: Jim Trent, ML&P General Manager; George Vakalis, Municipal Manager; Judith Brady, ML&P Commission Chair; Anchorage Mayor Dan Sullivan; Lieutenant Governor Mead Treadwell; Randall Wisenbaker, Quanta Services Executive VP of Operations; and Dick Traini, Anchorage Assembly Vice Chair.  

© Russ Slaten

 

Groundbreaking

To kick-off the construction phase, ML&P, city, and state officials, along with project engineers and others involved, came together to break ground on the George M. Sullivan Plant 2A expansion project on April 23. More than three hundred people are involved in the project, with peak construction expected to employ two hundred workers.

Anchorage Mayor Dan Sullivan spoke of the importance of the new ML&P power plant for Southcentral Alaska.

“This will be integral to the power system in the railbelt from Homer to Fairbanks, the expansion of the plant built back in 1975. [The legacy plant] served our community well over the years, and it’ll continue to play a critical role as a backup plant for many years to come,” Sullivan says. “We know that [the new plant expansion] will play a vital part in Anchorage being a well-maintained and financially sound city. A key component to that is having a reliable power and certainly power that uses less gas than the plant we had before.”

ML&P Commission Chair Judy Brady looked back over the last five years, mentioning the creation of an energy transition team appointed by Mayor Sullivan. The energy team addressed the need to incentivize new gas production, the need to invest in modern power generation, encourage conservation, and in the short term, plan for emergency energy outages, which was realized with the development of the new plant and more natural gas production in the Cook Inlet.

“In five years that all happened. The mayor’s office sat down with legislators, assembly members, with other utilities, with other communities, and with the governor’s office. It was an amazing coming together, and one of the most amazing things I think I’ve ever seen in a five year period,” Brady says.

Lieutenant Governor Mead Treadwell spoke of various projects around Alaska, but gave a special thanks to the parties involved in ML&P’s expansion project.

“We are doing a lot in the state in terms of geothermal, hydro, wind diesel, and kite power,” Treadwell says.“There’s a lot of exciting things going on in power generation, and I tell people from around the country, ‘If you want your project to have efficiency and to have conservation improved, come to Alaska.’ We are really honored to see this project move forward.”

 

ML&P contractors working on the base of the new George M. Sullivan Plant 2A. Inset: Photo Inspection team looking over approved drawings for George M. Sullivan Plant 2A.

© Russ Slaten

From Left to Right: Floyd Lindbloom of Agate Construction, Inc.; Phil Calhoun, MOA Inspector; Robert Wilson, Special Inspector from DOWL HKM; and Tom Gibbs of Roger Hickel Construction, Inc.

© Russ Slaten

 

Internal Investment

Trent says ML&P was not looking for partners in funding the project, and the $295 million in capital costs comes from ML&P’s internal reserves, setting aside the appropriate amount of dollars to stay on budget.

“[ML&P] will begin thinking about that number and how to impact our rate payers as minimally as possible to make sure they are not harmed unnecessarily, but we do expect to recover our costs through the rate base,” Trent says.

Due to Regulatory Commission of Alaska regulations, ML&P cannot propose a rate increase until the plant is operational in 2016. ML&P will begin considering how to approach the Regulatory Commission of Alaska in 2015 on how to recover their investment over a certain period of time.

As construction continues on the promising new plant, and the details on its operation and use are settled, Trent looks forward to the startup.

“It’s an amazing sight to take something from nothing, bear ground, build a project, and then finally go in and literally turn a key,” Trent says. “I’ve built forty-six power plants across the Lower 48, and the thrill is always the same with the forty-sixth power plant as it was with the first.”

Russ Slaten is the Associate Editor for Alaska Business Monthly.

This first appeared in the August 2014 print edition of Alaska Business Monthly magazine.

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