Interior Alaska Electric Cooperative Decides to Shut Down Ailing Coal Plant and Proceed with Construction of Large Wind Farm

An interior Alaska power cooperative plans to decommission one of its two coal-fired power plants and seek proposals to build a large-scale wind farm, while upgrading its battery storage system and entering into an agreement to purchase more natural gas from south-central Alaska.

On Monday, the board of directors of the Golden Valley Electric Association – the main inland electric cooperative that serves 100,000 residents in communities from Healy to Fairbanks and Delta Junction – voted to develop a plan to shut down one of its two coal-fired plants located in Healy by the end of 2024.

The board had to decide whether to close an old coal-fired plant, Healy Unit 1, or add about $26 million worth of pollution control equipment by the end of 2024, as stated in an executive order 2012 consent agreement with the US Environmental Protection Agency.

The council decided to add these pollution controls, but they also decided to close a separate coal-fired power station, the adjacent Healy 2 unit, after a consultant hired by the co-op said it would be an option economically feasible.

Ultimately, the board approved a plan to:

• Install pollution controls on the co-op’s older and smaller coal-fired plant, Healy Unit 1.

• Develop a plan for decommissioning the new and largest coal-fired plant, Healy Unit 2, by December 31, 2024.

• Solicit proposals for a contract to purchase a large-scale wind project within 60 to 90 days.

• Purchase and install a new 46 megawatt battery storage system.

• Obtain a purchase agreement with one or more utilities, gas producers or suppliers of Southcentral for 30 to 50 megawatts of energy.

“It’s really a vision for the future of Golden Valley,” said Tom DeLong, chairman of the board.

Monday’s decision was a big shift in direction for the co-op, he said. Although it may have seemed surprising to close the newer of the two coal plants, Healy’s Unit 2 was not functional, while DeLong described Unit 1 as the “little plant that could”.

“The Unit 2 Decision was unanimous and everyone knew we had to do it because the economy speaks for itself,” DeLong said.

Healy Unit 2, a $300 million experimental factory built by the Alaska Industrial Development and Export Authority in the 1990s with the U.S. Department of Energy, “was plagued with legal issues and operational issues,” DeLong said.

“Unit 2 was a tough factory to start with,” DeLong said. “It was a difficult birth and a difficult childhood and a shameful old age.”

At 62 megawatts, Healy Unit 2 is the state’s largest coal plant, but it’s not operating at that rate, Golden Valley Electric spokesman Meadow Bailey said. Last year the plant “produced on average much less than what it was built for,” she said.

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And while the co-op worked for years to increase its reliability, the Healy 2 unit had to be taken offline for repairs, requiring its power to be replaced with electricity from more expensive sources like oil, Bailey said.

Going forward, most of the electricity previously generated by the coal-fired plant will be replaced with electricity from natural gas produced in south-central Alaska, Bailey said. And with future wind and battery power sources, the co-op won’t have to rely on expensive diesel generation, Bailey said.

Prior to the Monday evening meeting, the co-op’s board, employees and consultants spent 18 months reviewing their sources of production.

In a presentation to the board, consultant Mike Hubbard of the Financial Engineering Company presented scenarios for removing one plant, both or neither, and what to replace them with. He said it was more economical to remove Healy Unit 2 with less risk than to remove both. And Hubbard said adding wind power is both environmentally and economically beneficial.

several people testified at the meeting, including representatives from two nearby gold mines who said their energy prices were high and they also supported reducing emissions. Some testified against the removal of a factory, including those who cited concern for the Healy community and employment there.

“Just keep in mind that not only will this affect the power station workers, but it will also likely affect the coal mine workers, because that’s an amount of coal they wouldn’t have to be. give us. It’s going to affect all contractors, it’s going to affect a little bit more than the town of Healy, and I just want you to consider that,” said Christi Killian, who identified herself as a qualified control room operator. to manage Healy units 1 and 2. .

Others also spoke about the importance of reducing carbon emissions and concerns about climate change. Several people stressed the importance of employment and training opportunities for people in Healy affected by the potential closure.

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“It’s a really tough decision to make,” said Bailey, of Golden Valley Electric. “We have employees and we have a community that operates around Healy Units 1 and 2. So whatever we do that affects those factories, we recognize that it also affects our employees there and that community.”

The board also asked Golden Valley Electric to focus on opportunities for employees, including jobs within the co-op, additional training, skills enhancement or other transition services, Bailey said.

Jessica Gerard, executive director of the Fairbanks Climate Action Coalition, called the decision a “very big win for us” because it was not just a step towards the closure of a coal plant, but also an investment in production. and renewable energy storage.

“The people who have made this possible, as far as RAC is concerned, (are) the Member Owners who have been engaged with GVEA for years, witnessing and encouraging their shift to renewables,” Gerard said.

It’s a big move for interior Alaska, said Philip Wight, an energy and environmental historian and assistant professor of history and arctic studies at the University of Alaska Fairbanks. He also works with the Alaska Public Interest Research Group, but said he has not done any paid formal advocacy on the Healy issue.

Wight said that often when renewables come online, people think they’ll end up paying more. But Monday’s decision was both a low-cost and low-carbon scenario, he said.

“There was no trade-off here between spending more money and saving carbon, it was a win-win for the economy and the environment,” Wight said.

And, he said, it wasn’t just a decision about a single power generation. Instead, the co-op unveiled several scenarios that would diversify power generation away from coal, including a large new battery and more wind power, as well as a goal to buy power from Southcentral, which is a step towards the integration of electricity along the Railbelt.

“This is arguably one of the most important decisions GVEA has ever made as an electric utility,” Wight said.