MEA OKs power plant contract

PALMER — Matanuska Electric Association is past the point of no return on building a power generation plant near Eklutna, and its board has agreed to the first significant financial outlay to put the wheels in motion.

The MEA Board of Directors voted unanimously last week to approve a limited notice to proceed authorizing contactor CH2M HILL to start its preliminary work, including securing an air quality permit. With a June 30 deadline fast approaching, securing a permit is paramount, MEA officials say.

That’s because as of July 1, it’s likely MEA would have to get an air quality permit that includes carbon dioxide as a major pollutant from the plant rather than a minor one, said MEA CEO Joe Griffith. As a minor pollutant, the permit would cost less than $100,000, while a major permit would cost about $500,000. It also would take longer to get.

“We’ll get it, it’s just a matter of going through all the hoops,” Griffith said. “We know what kind of equipment will be required on the machines (with a major permit) and we’re putting those on anyway.”

The contract approved by the board authorizes MEA to up to $565,000 for CH2M HILL to begin its design and application work, and another $250,00 for R.W. Beck, a consulting firm helping MEA manage the project.

Although details like where financing to build the power plant — an estimated $162 million to $228 million depending on size — and natural gas to fuel it will come from haven’t been worked out, the electricity cooperative is obligated to have the plant ready to provide power by Jan. 1, 2015, Griffith said. That’s when MEA’s agreement with Chugach Electric Association to provide all of MEA’s electricity runs out. Plans call for the plant to generate anywhere from 100 to 170 megawatts of electricity.

By approving the contract, MEA enters uncharted waters in pursuing means to generate its own power, said spokesperson Cheryll Heinze.

“The big deal now is if we don’t get (the minor air quality permit), we just stop and wait, because you can’t do anything without an air permit,” she said. “We’re confident, but the timing depends on the bureaucracy in Juneau and when they get it done. I’m pretty confident we’ll get it by July 1, but I am the eternal optimist.”

Griffith isn’t that optimistic.

“I’m very hopeful and not very confident we’re going to get it,” he said. “Eventually, we’ll get it, it’s just a matter of going through all the hoops.”

While there isn’t a supply of natural gas to fuel the plant secured, Heinze said there are many irons in the fire and many possibilities are being pursued.

“I don’t think we would move forward with just pie-in-the-sky gas,” she said. “We have a couple of things we feel pretty confident about in the works.”

The contract is the first major step in moving the proposal from concept to construction. If the state approves MEA’s application for a minor air quality permit, construction would need to begin right away, Griffith said.

Contact Greg Johnson at greg.johnson@frontiersman.com or 352-2269.