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Upgrading the Grid


Keeping electricity flowing across Alaska

Alaska’s power grid is getting some needed upgrades and at least one new source of power in the near future—wind. While hydro power is still a twinkle in the governor’s eye, wind energy will soon begin to add its kilowatt hours to help keep the lights on in both rural and urban Alaska. In Southcentral, Cook Inlet Region Inc. is nearing the power-up date for its new wind farm on Fire Island.

Three miles west of Anchorage, Fire Island Wind LLC, a subsidiary of CIRI, has begun pre-construction of an 11-turbine wind field that is anticipated to supply about 51,000 megawatt hours of power to Chugach Electric Association every year.

“We’ve closed with our lender, done all the predevelopment and development activities—been approved by the Regulatory Commission of Alaska, by Chugach—we have all our significant permits,” said Ethan Schutt, senior vice president of Land and Energy Development for CIRI. “We have all our project contracts and have ordered the turbines.”

CIRI’s general contractor, Delaney Group, is the same company that built the Kodiak wind farm, according to Schutt, and Delaney will be doing the on-island work. Although a large, national firm, Delaney has a long list of local subcontractors. Other local contractors have already begun transmission-line construction and additional transmission-line work will occur over the winter when frozen ground helps protect some of the more sensitive land areas.

“The biggest push on construction should begin in April,” Schutt said. “The transmission line is well under way and the turbines will arrive by ship and be erected over the summer. We should have our first commercial power by late 2012.”

Chugach will be the sole purchaser of the wind-farm power, Schutt said, and the two have signed a 25-year, fixed-rate contract. The Fire Island project will supply about 4 percent of Chugach’s load, or enough electricity to power 6,000 Southcentral households.

“The cool thing,” added Jim Jager, CIRI’s director of Corporate Communications, “is that it doesn’t run out after 25 years.”

Jager said the cost of wind-generated power is free from fuel-price fluctuations from market conditions or supply disruptions, unlike power generated from natural gas.

The anticipated price tag for CIRI’s wind farm is about $65 million, with more than $18 million coming from American Recovery and Reinvestment Tax Act of 2009 tax credits and $25 million coming from a state appropriation for submarine and mainland transmission infrastructure.


CIRI also has its eye on a larger energy product, although it’s much further down the road. It’s an underground coal gasification project across Cook Inlet from Anchorage. Another subsidiary of CIRI, Stone Horn Ridge LLC, is working to develop the project as early as 2015, and geologic and hydrologic studies are under way.

“We’re finishing the first of the pre-development phases now,” Schutt said in late 2011. “Our next phase is to more closely refine the data. Sometime next year, we should start the potential project design and permitting.

“If and when it’s built,” Schutt added, “it will be one of the first underground coal-gasification projects in North America. When you’re the first of anything, everything takes longer, but we think our coal has world-class potential.”

Another wind farm project is moving forward southwest of Fairbanks at Eva Creek, near Healy. Golden Valley Electric Association anticipates it could be the largest wind project in Alaska as well as the first built by any Railbelt utility. As currently envisioned, Eva Creek will produce 24 MW of power from 12 turbines – meeting the utility’s goal of generating 20 percent of its peak load from renewable resources by 2014. It’s also forecast to save members money on their electricity bills. According to the utility, it could save $13.6 million over the next 20 years, assuming oil prices of $90 per barrel.

GVEA said the wind farm should displace 76,686 MW hours of oil energy annually and would be owned and operated by the utility itself. Capital costs for the wind farm are projected to be less than $90 million, and GVEA anticipated construction to begin in May and come online in the fall.

A second project under GVEA’s belt now is the restart of its Healy Clean Coal Plant, which could save the utility more than $2 million per month in fuel costs. When operational—GVEA officials said they hope that will happen in 2012—the plant could provide 50 MW of competitively priced power to the Railbelt.


While Chugach Electric is anticipating some additional electricity from the CIRI wind farm this fall, it isn’t counting on that alone to help its customers. The utility has teamed up with the Municipality of Anchorage’s Municipal Light & Power to build a new, more energy-efficient power plant.

“We began looking at configurations of power plants that might be beneficial back in 2004,” said Paul Risse, Chugach’s senior vice president for Power Supply. “We had the option of doing upgrades to existing units that were in the tens of millions of dollars or of building a new power plant. The economics won out, and we chose to build the new plant,” Risse said.

Chugach and ML&P jointly performed a siting study in 2007, initially looking at six potential sites. These were narrowed down to two—Chugach’s main headquarters or ML&P’s Plant 2. Chugach’s main headquarters plan won the call, and the project began moving forward.

“Once the site was chosen, Chugach also began participant negotiation,” Risse said. “We negotiated with ML&P, Matanuska Electric and Homer Electric associations, but MEA and Homer both decided to pursue other options.”

The two power plant owners contracted with SNC-Lavalin Constructors Inc., based in Bothel, Wash., to provide engineering, procurement and construction services for a 183-MW, natural gas-fired, combined-cycle thermal power plant. In late March 2011, Chugach and ML&P broke ground for the new Southcentral Power Project adjacent to Chugach’s main plant near International Airport Road and Minnesota Drive in Anchorage, and have dozens of local subcontractors working on the project. At the project’s peak, Chugach estimated that there would be about 250 construction jobs.

The new power plant will be built at a cost of $369 million, which will be shared between the two owners—70 percent by Chugach and 30 percent by ML&P.

“The SPP will have three gas turbines and one steam turbine,” Risse said. The steam turbine can utilize the hot exhaust from one, two or all three of the gas turbines—thus recycling waste heat produced by the gas turbines and putting the energy back into the grid.

When operational, the SPP will use only about three-fourths of the natural gas needed to make a kilowatt hour of energy compared to the best units on the Chugach system today, said Phil Steyer, director of Government Relations & Corporate Communications for Chugach.

Risse also pointed out that the new plant will reduce emissions—the production of both nitrogen oxides and carbon dioxide will be substantially less from the combined-cycle plant than they are from current generation.

Anticipated completion date for the SPP is Dec. 1 of this year, when the plant will be handed over to its two owners and placed into service.
“It will reduce the generation of power from Beluga,” said Risse. “We’re not getting rid of the generating units we already have, but we will use the more energy-efficient units first. Then, as we need more power, we’ll go to the less-efficient units. They will simply run less.”

In terms of electric bills, customers see two primary kilowatt-hour components, Steyer added. “We charge customers for the fuel to make power in one portion of the bill and the other portion covers everything else. The ‘everything else’ part of the bill will go up because that’s the portion that pays for the cost of the new plant, but the portion for fuel will go down. We’re hopeful that these two things will largely offset each other but we really won’t know until later in 2012. In part,” he said, “it will depend on the price of gas when the new power plant comes online. Based on gas prices today, we would expect to save about $27 million in its first full year of operation from avoided fuel costs.”

Risse also added that Chugach and ML&P have sized and designed flexibility into the new power plant to more readily accommodate additional hydro or other types of generation in the future.


Homer Electric Association provided an update on its Independent Light Project and reported that the Nikiski site is being readied for turbine and generator installation. The utility’s Independent Light power generation plan is in full swing with progress being made on several fronts.
The focus right now is on the Nikiski Combined Cycle Conversion (NCCC) Project. The key component of the project is the addition of a steam turbine and generator at the current HEA generation plant, adjacent to the inactive Agrium facility in Nikiski. The addition of the steam turbine and generator will nearly double the current output of the plant, providing Homer Electric with 80 megawatts of power.

Currently, NORCON crews and subcontractors are on site constructing both the air cooled condenser and the building for the steam turbine and generator. The steam turbine and generator were delivered to the site in November 2011.

Power Constructors Inc. completed work on the plant’s new substation components and it will undergo final commissioning later in 2012 when the steam turbine is ready to start up. The NCCC Project is scheduled to be completed in the fall of 2012.


After an electrical utility produces the power, it has to move through transmission lines to arrive at homes and businesses across the state. Gabriel Marian, president of City Electric, said his company has worked to upgrade transmission lines at a variety of sites in Alaska. Currently, City Electric is working for MEA on the Teeland-Reddington transmission line and has a subcontract to bury the overhead transmission lines as a part of the West Dowling Road, Phase II project. City Electric is an Anchorage-based company with offices in Fairbanks and Snohomish, Wash. The company provides electrical construction; outside plant telephone and installation services; fiber optic systems installation, splicing and testing; outside plant power systems for distribution and transmission, both overhead and underground; and directional drilling.

Two City Electric department managers, Marvin Pickens and Sean Wilson, talked about the two projects.

“MEA is upgrading from 34.5 kV to 115 kV lines,” Pickens, City Electric’s lineman department manager said, “and that’s partially driven by the new prison. We finished that job in November.

“It was interesting because we had to keep the 34.5 kV lines energized from the Point McKenzie Road south because there’s only one feed into the homes in that area,” he added. “So we got the new poles in, pulled the new 115 kV wire and energized the new line. When the Reddington Substation is complete in the early spring, we’ll go back to finish the job. We’ll swap the remaining 34.5 kV lines onto the 115 kV lines.”

Pickett also said City Electric recently completed a job in Juneau, putting seven breakaways into the lines from the Snettisham Hydroelectric Project to help avoid damage from avalanches.

Another job the company is currently working is one for the new Southcentral Power Project at Chugach Electric. “It’s a little piece of the joint power house for Chugach and ML&P. The transmission will come from the new switch yard at Chugach. We’re putting in transmission poles and building a short double circuit out to pick up the ML&P line,” Pickett said.
On the Dowling Road job, Pickens said the company began in January moving overhead lines to under ground and out of the way of the new road projects.

Wilson, City Electric’s inside wireman department manager, said his current jobs include all the electrical work on the high tower lighting, parking-lot lighting, electrical and communications underground work with ductbanks and manholes under a subcontract to G2 Construction for the Joint Base Elmendorf-Richardson rail yard.

“We anticipate this job to finish by the end of August,” he said. “We’ve installed the high tower foundations and will go into a winter shutdown until spring. It will be completed next summer.


This article first appeared in the February 2012 print edition of Alaska Business Monthly magazine.
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