MEA coal plan bites the dust

By Greg Johnson

Frontiersman

MAT-SU — Matanuska Electric Association management is recommending the cooperative delay plans to build a controversial 100-megawatt coal-fired power generation plant by a least five years.

In a memorandum sent to MEA Board President Lee Jordan and the co-op’s board of directors dated Friday, MEA General Manager Wayne Carmony says the recommendation is spurred by new Mat-Su Borough’s power plant permit requirements and a worldwide increase in the cost of building a coal-burning plant.

“Until problems with the Borough’s ordinance can be addressed and recent spikes in world coal plant prices stabilize, it is imprudent to proceed with construction of the coal portion of MEA’s [power generation plan],” Carmony says in the memo.

Mat-Su Borough Assembly passed an ordinance Aug. 28 that requires anyone wanting to build a facility that generates 50 megawatts or more of power to meet Borough standards. MEA has proposed 200 megawatts of generation from a 100-megawatt gas-fired power plant and a 100-megawatt coal-fired plant.

Plans for the gas-fired generation are still moving forward, said Lorali Carter, MEA manager of government and corporate communications. That MEA is pushing back plans to build a coal-fired plant is not a response to protests about environmental concerns from residents opposed to the plan, Carter said.

“As soon as the Borough passed its ordinance we recognized it would be impossible to get a coal plant up and running by Jan. 1, 2014,” she said. “It is very clear the majority of the Borough, including the administration, does not want a coal plant. It would be imprudent for us to more forward with the coal plant right now given the climate in the Borough and the global market.”

Globally, a U.S. Department of Energy study shows proposed coal generation worldwide is progressing slowly, Carter said. At the same time, the cost of building a coal plant has increased.

“We have been keeping an eye on that for months,” she said. “Prices are spiking and, along with the Borough’s ordinance, … we feel like it is time to shelve that part of our generation plan.”

Carmony and Carter both said MEA is still pursuing generating its own power and that the board will be presented with alternatives to the coal plant.

“Obviously, that power has to be replaced,” Carmony says in his memo. He adds that at its December meeting, the MEA board will be presented with alternatives for the coal portion the company’s power generation plan.

“We recognize that things change,” Carter said. “What we hope our membership and the Borough will recognize is we’re not living in a vacuum. We are very thoughtfully proceeding with our power supply plans.”

For Jim Sykes, a Palmer-area resident and member of Utility Watch, a group critical of MEA and its coal plant plan, the electric cooperative’s decision comes “better late than never.”

“It was just a question of time when someone at MEA would wake up over there,” he said. “The evidence has pointed to the fact that MEA made faulty assumptions for some time. … They should have come to this conclusion six months ago.”

Sykes is doubtful now that coal generation will ever be part of MEA.

“My prediction is if they delay it five years they’re never going to build it,” he said. “I think it will never be built, and that’s great for ratepayers, because [coal] would have cost them dearly.”

MEA may have to revisit its agreement with Chugach Electric Association, Carter said. MEA buys its electricity from Chugach and has notified Chugach it would not be extending its agreement past the term of the current contract, which sets in 2014. Also, MEA will continue to lobby the state about creating a regional power cooperative that serves much of the Railbelt.

“We are still looking forward to local generation,” she said. “This is just further evidence of why the timing right now is so important. … On any given day you may have a new set of circumstances in front of you.”

Contact Greg Johnson at greg.johnson@frontiersman.com or 352-2268.