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Railbelt Utilities Commit $1 Billion

Four companies build four new electric plants

Southcentral Power Project steam turbine generator being set to foundation last October.

Southcentral Power Project steam turbine generator being set to foundation last October.

Photo courtesy of Chugach Electric Association

Four electric utilities serving a majority of Alaska’s population and most of the state’s commercial customers in a vast area stretching from Homer to Cantwell have committed more than $1 billion to new power plant construction and efficiency improvements. Some of the new generating capacity will come on line by the end of this year with other construction scheduled for completion two and three years out.

Chugach Electric Association, Homer Electric Association, Matanuska Electric Association and Municipal Light and Power collectively serve almost 200,000 metered locations throughout Southcentral Alaska all along the Railbelt. All four utilities are involved in various phases of capital improvements that will see four new plants and improved technology brought to bear on the region’s electricity demands.

Chugach and ML&P

The Southcentral Power Project, a 183 megawatt power plant in the finishing stages of construction, is a joint effort between Chugach and ML&P slated to begin commercial operations in December of this year. Years of planning beginning in 2004 went into the $369 million project, with Chugach financing 70 percent of the cost and the balance covered by ML&P. An additional $21.8 million for substation upgrades is also scheduled.

At the March 2011 groundbreaking for the project, remarks offered by Anchorage Mayor Dan Sullivan and former mayor and now U.S. Sen. Mark Begich struck a common theme. Sullivan noted that, “This new plant is a step in the right direction as we look to provide reliable service at a reasonable cost for Anchorage’s electrical consumers.”

Sen. Begich, whose remarks were presented by a staff member, noted that idea for the plant came about during his tenure as Anchorage mayor. “I am pleased to see this project moving forward as we plan for the energy needs of our communities for years to come,” Begich said.

The plant, located on Chugach’s headquarters property in Anchorage, features three natural gas fired turbine/generators and one steam turbine/generator. Operating the plant in a combined-cycle mode will result in efficiency and fuel savings by using the hot exhaust from the gas turbines to make steam to drive the steam turbine.

That will translate to a 25 percent reduction in the natural gas required to produce a kilowatt hour of electricity compared to the best units currently in use by Chugach. The reduced gas consumption rate will translate to more than $20 million savings for the two utilities for the plant’s first full year of operations. The new plant’s combined-cycle operation will also result in a significant reduction in nitrogen oxides and carbon monoxide emissions.

SNC Lavalin Constructors Inc., the large Montreal-based engineering and construction company, designed and is building the plant. The firm has designed and constructed more than 60,000 megawatts in thermal power projects worldwide. The project owners purchased combustion turbine and steam turbine generators for the project directly from General Electric, Mitsubishi Power Systems Americas and Innovative Steam Technologies.

Chugach is the largest electric utility in Alaska, providing power to more than 81,000 metered customers throughout the Railbelt. ML&P, owned by the Municipality of Anchorage, services almost 32,000 customers in a 20-square-mile area of Anchorage, including the military at Joint Base Elmendorf-Richardson.

A new steam turbine will generate power from the exhaust heat of the existing natural gas fired turbine at the Homer Electric Association Nikiski plant.

Photo courtesy of Homer Electric Association

Homer Electric Association

Two HEA power plant projects are under way on the Kenai Peninsula. Central to the approximately $150 million in expenditures is the Nikiski Combined Cycle Conversion Project, the cornerstone of what the 67-year-old electric cooperative is calling Independent Light. It is the plan so named as HEA prepares to produce its own electricity when the existing power supply contract with Chugach Electric expires at the end of 2013.

At the groundbreaking for the Nikiski project in April of 2011, HEA Board President Debbie Debnam emphasized the importance of the cooperative producing its own electricity. She noted that studies over several years provided several options, including the production of power locally. “We believe that the decisions made about power production should be made right here on the Kenai Peninsula,” Debnam said.

As with the Southcentral Power Project in Anchorage, a new steam turbine will generate power from the exhaust heat of the existing natural gas fired turbine at the Nikiski plant. Plant output will increase 45 percent with no additional natural gas consumption because of the utilization of the waste heat. When completed later this year by Anchorage-based contractor NORCON Inc. the project will approximately double the plant’s output from 40 megawatts to as much as 80 megawatts.

At HEA’s property in Soldotna, the utility is installing a combustion turbine as another element of its Independent Light program. HEA will use the 48 megawatt General Electric LM 600 turbine as a backup source of power. Project completion and plant operation will occur next spring.

HEA maintains more than 2,300 miles of power lines in a service area covering some 3,166 square miles. The utility traces its roots to 1945 when nine Homer residents began working with the Rural Electrification Administration to form what would become Alaska’s fifth rural electric cooperative.

Fans for the air cooled condenser at the Homer Electric Association Independent Light project.

Photo courtesy of Homer Electric Association

MEA

Farther north, Palmer based MEA has begun preliminary site work on a 170 megawatt generation station located in Eklutna that will have a total price tag of approximately $250 million. As with HEA, Matanuska Electric is making the move to produce more electricity on its own as power sharing contracts with Chugach end.

Twenty-two acres of the 70-acre site have been cleared for the new power plant, road upgrades are under way and there is the possibility a railroad spur line will be constructed to serve the delivery plant equipment and supplies. A railroad spur may be especially useful in delivering the components of the 10, 18 cyclinder Wartsila 50DF engine/generators at the heart of the MEA project. Each of the units weighs in at 355 tons.

The dual-fuel Wartsila engines operate primarily on natural gas, but in the event of an emergency or disruption in the gas supply, fuel can be switched to diesel. Two diesel storage tanks with a combined capacity of 800,000 gallons of fuel are included in the plans. It was a factor in choosing the Wartsila technology, according to MEA General Manager Joe Griffith.

Noting that the MEA member area was the fastest growing in the state, Griffith said, “We are confident that our choice of Wartsila engine/gen sets provides the most reliable and cost-efficient power available while meeting our projected load.”

Citing the engine’s capability to switch fuels seamlessly in the event of a natural disaster such as an earthquake, Griffith added, “That was a huge factor in our decision to go with Wartsila.”

Another factor in the decision was the unit’s fuel efficiency and low emission levels. The Wartsila generating sets meet Alaska’s air quality standards for permits specific to the Eklutna site. Eight of the engines were built in South Korea with the final two under construction in Trieste, Italy. Delivery to the Eklutna site is scheduled for fall 2013.

Power plant construction begins in spring 2013 with project completion scheduled by year-end 2014. MEA is the prime contractor with assistance from Stanley Consultants, a leader in the electricity consulting and engineering market. The Eklutna Generation Station will transform MEA from primarily a purchaser of electricity produced by others to a producer and distributor in its own right.

MEA was the first rural electric co-op established in the Alaska Territory in 1941. It currently serves almost 56,000 customers while maintaining more than 4,000 miles of transmission and distribution lines in its section of the Railbelt.

ML&P

In Anchorage, ML&P is clearing a site at its George M. Sullivan Plant No. 2 along the Glenn Highway in preparation for a $225 million replacement project projected for completion by the end of 2015. The new equipment will provide 120 megawatts of power with greater fuel efficiency while emitting considerable less pollution than the plant it will replace. An 11 percent savings in natural gas use with a reduction in nitrogen oxides of 97 percent and an 80 percent cut in carbon monoxide emissions will result. Additionally, more of the waste heat will be used in heating the municipal water supply that is located at the same site.

ML&P, which marks its 80th year of operation in 2012, serves more than 24,000 residential customers and upwards of 6,200 commercial customers.

Gene Storm, a writer living in Anchorage, has covered Alaska business 41 years.

This story originally appeared in the July 2012 print edition of Alaska Business Monthly magazine.

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