Alaska Journal of Commerce
A deal to restart the Healy Clean
Coal Plant requires Golden Valley to invest $40 million in additional
emissions controls and another approximately $5 million in emissions
improvements at an adjacent, smaller and older 25 megawatt coal plant.
Golden Valley Electric Association of Fairbanks and the Alaska
Industrial Development and Export Authority, Alaska’s state development
corporation, have worked out a consent decree with federal attorneys
that could allow for a restart of a mothballed 50-megawatt
new-technology coal power plant at Healy in Interior Alaska.
The plant has been idle for almost 12 years, although critical operating systems have been maintained.
The agreement is highly unusual because the Healy Clean Coal Project,
or HCCP, is not operating and no violation of the Clean Air Act has
occurred, sources familiar with the deal said.
However, the federal Clean Air Act does allow the government to file
for an injunction to block a violation that is pending. In this case the
U.S. Justice Department filed for an injunction in federal court to
block the restart of the Healy plant but filed the Consent Decree at the
The deal requires Golden Valley to invest $40 million in additional
emissions controls in the HCCP and another approximately $5 million in
emissions improvements at an adjacent, smaller and older 25 megawatt
Golden Valley and the state authority, or AIDEA, made the deal with the
U.S. Department of Justice and the Environmental Protection Agency
after extended negotiations with environmental groups to forestall
Golden Valley spokeswoman Corinne Bradish said the consent decree will
be published in the Federal Register soon and will be subject to a
30-day public review period before going to a U.S. District Court for
approval. If the court approves, a decision that could come by the end
of the year, Golden Valley hopes to have the plant operating in 18 to 24
months, Bradish said.
Having access to inexpensive coal-fired power is important to the
Interior Alaska utility because most of its power is now generated with
costly fuel oil. Coal is much less expensive than oil, and power can be
generated with coal for 5 to 6 cents per kilowatt hour compared to a
range of 20 to 50 cents per kilowatt hour in the utility’s oil-fueled
plants depending on which unit is operating, said Kate Lamal, a
consultant to Golden Valley.
The $305 million plant was built by AIDEA in 1996 and 1997 and was to
be operated by Golden Valley, which was also to purchase power from the
plant. The U.S. Department of Energy contributed $120 million to the
project costs to demonstrate new coal combustion and emissions control
technologies, with AIDEA and the State of Alaska funding the remainder
The facility operated for one year under a contract with DOE to test
the technologies with different types of coal but was shut down after
operating problems, unrelated to the new environmental systems,
developed during a 90-day commercial operations test.
A decade of litigation followed between Golden Valley, the plant
operator and regional electric utility, and AIDEA, which owned the plant
and had built it.
In settling the dispute AIDEA agreed to sell the plant to Golden
Valley, but when the State of Alaska issued a renewed air quality permit
for an operating plant, environmental groups objected, arguing Golden
Valley should initiate a more complex type of air permit as if the plant
were new construction.
EPA agreed but urged the utilities to negotiate with the environmental coalition led by the Sierra Club.
Extended negotiations spanning two years included a proposal for the
added environmental controls, which Golden Valley has agreed to as part
of the Consent Decree, but also that the utility agree to phase out its
coal plants in 20 years. Golden Valley balked at this, and the
The utility then proposed the Consent Decree to EPA as a way of
forestalling a lawsuit from the environmental groups, and EPA agreed to
Cory Borgeson, Golden Valley’s acting president, said, “We chose to
pursue the Consent Decree option with EPA because, otherwise, there was
no defined end to the air permitting process,” with almost certain
appeals of the Clean Air Act’s Prevention of Significant Deterioration
“Very important, the Consent Decree avoids what we believe would have been lengthy and costly litigation,” Borgeson said.
Environmental groups had targeted the plant restart as part of a
national effort to force the closure of coal-operating electric power
In addition to new combustion and emissions systems in the original
plant design, aimed at reducing sulfur dioxide (SO2) and nitrous oxide
(NOX), Golden Valley agreed to install a Selective Catalytic Reduction,
or SCR, system in the plant’s exhaust system to further reduce SOX and
NOX, Lamal said.
The utility will spend an additional $5 million at a smaller, older 25
MW coal plant, Healy 1, that is adjacent to the 50 MW HCCP. Another
$250,000 will be contributed to a wood stove change-out program operated
by local municipalities, and that would reduce particulates from wood
smoke, a major contributor to human health problems that occur locally
during certain winter air conditions.
“A couple of things need to happen before we have the keys to the
plant. One is the judge’s final approval following the 30-day public
review. Second is the approval of the Regulatory Commission of Alaska,”
Lamal said EPA made significant concessions in recognition of special conditions.
One is that Golden Valley will be allowed to restart the plant and operate it for 18 months without the SCR being installed.
“This will allow us to get the plant operating in a stable condition,”
Lamal said. Secondly, plant shutdowns for the modifications will be done
during the summer, a period of low power demand in Alaska.