Alaska Mechanical Builders in Palmer turns out another new modular power plant for a rural community

A $6 million new power plant for a western Alaska village in was assembled this year in Mat-Su at the Alaska Mechanical Builders, Inc. plant in Palmer. The plant, built in a module, will be barged to Nelson Lagoon and installed later this year.

Nelson Lagoon is a small Aleut village on the north coast of the Alaska Peninsula about 580 miles southwest of Anchorage and 30 miles from Port Moller, also on the Alaska Peninsula. The community is part of the Aleutians East Borough.

This is the fourth modular rural power plant built by Alaska Mechanical Builders and its sister company, Electric Power Constructors Inc. in Anchorage.

Nelson Lagoon’s new power plant is designed for a 20-year life and while still reliant on diesel for fuel the plant is designed to incorporate renewable power like wind and solar when that becomes available. The plant will generate 265 kilowatts with three generators.

The new plant, and earlier ones, were built and funded under the state’s Alaska Energy Authority and its Rural Power Systems Upgrade program, with support from the Denali Commission, a state-federal agency that coordinates federal funding for rural Alaska projects.

AEA’s rural power systems program upgrades and builds facilities in small, off-grid communities under 2,000 people. Powerhouse upgrades enhance reliability with modern, electronically controlled generators, the energy authority said.

High fuel costs are a serious problem in rural communities and improvements to diesel generation efficiency in power plants typically reduces fuel consumption by 10 percent to 20 percent, with corresponding reductions in costs.

This year AEA is budgeting $4 million in state funds for the program, with additional federal support though the Denali Commission. In 2024, AEA replaced the powerhouse in three other western Alaska villages including a new power house in Napaskiak and as well as overhauls of powerhouses in Manokotak and Tuluksak.

The agency is also designing a new powerhouse in Chalkyitsik, in northern Interior Alaska and is upgrading the Kwethluk powerhouse.

AEA also manages Alaska’s federal funding from the U.S. Environmental Protection Agency’s Diesel Emissions Reduction Act, or DERA. Under this program AEA identifies communities in need of new prime-power diesel engines based on current engine conditions and utilizes DERA funds to furnish and install new, efficient engines.

This year, engines upgrades were commissioned in Tenakee Springs, in Southeast Alaska, and Bettles, in Interior Alaska, with up to five more communities set to participate next year.

The agency also focuses on operations and maintenance improvements that improve the benefits of rural power systems. Currently, the agency is engaged in nine maintenance and improvement projects including switchgear replacements, heat recovery optimization, engine control upgrades, and diesel generation set replacements.

In 2024, work spanned engine replacements, power stabilization, powerhouse leveling, and switchgear upgrades.

Alaska Mechanical Builders and its sister company, Electric Power Constructors Inc.