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GVEA going to EPA for Healy coal plant permits

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Posted: Thursday, May 24, 2012 11:54 pm

FAIRBANKS — Golden Valley Electric Association is doubling down on efforts to bring a long-dormant coal plant near Healy online, despite objections from environmental groups.

After GVEA turned down a proposal from the environmental groups, the co-op signaled this week it plans to go directly to the Environmental Protection Agency to obtain an air quality permit for the 50-megawatt unit dubbed the Healy Clean Coal Project and the currently operating Healy No. 1 near Denali National Park.

Earlier this year, the Alaska Department of Environmental Conservation issued an air permit for the plants. The EPA did not object, potentially clearing the way for work to begin on updating the plant.

In March, however, four environmental groups — the Northern Alaska Environmental Center, Sierra Club, National Parks Conservation Association and Denali Citizens Council — filed an objection with the EPA, asking for further scrutiny of the air permit.

That came after GVEA walked away from negotiations with the environmental groups, a route the EPA had suggested.

“They offered our members a terrible deal,” GVEA President Brian Newton said in a written statement. “We had to agree to shut down all our coal generation in less than 20 years, with no assurance that we had another power source lined up.”

Gene Therriault, GVEA’s vice president of resource management, said the co-op is pursuing a consent decree that requires installation of stricter air pollution regulation on the Healy Clean Coal Project than the environmental groups had sought. In return, the utility wouldn’t be required to shut down its coal plants at a certain date. The decree would help GVEA clear the EPA and would help protect against any legal challenge.

“It’s an unusual suggested solution,” Therriault said, but said that it offers long-term security. “We’re planning on having (liquid natural gas) and the Susitna dam project come online, but we can’t absolutely count on those things.”

Therriault said the new plant would expand GVEA’s energy portfolio and help drive down the cost of electricity, replacing the much more expensive diesel and oil generators. The Healy Clean Coal Project was mothballed in 1999, when it yielded less-than-ideal efficiency generation, but Therriault said the economics have changed.

“Now that the alternative fuel (oil) has quintupled, the Healy Clean Coal Project is far cheaper,” he said.

Northern Alaska Environmental Center Executive Director Karen Kelly said she was disappointed that the negotiations had fallen apart, but said she’s optimistic about the increased air pollution technology GVEA is considering installing. If the EPA signs off on the permit, she said, she’s in a wait-and-see mode.

“I want to see that process through,” she said. “We have coalition partners that are very excited about the prospects of improved air control — this is not magical, it just costs them $40 million to install it. It sounds like that they’re coming around to seeing the light on air pollution control.”

Therriault said GVEA will likely begin work on installing improved air pollution control devices on the Healy Clean Coal Project if the EPA delivers on the consent decree. The plant could be operating in about 12 to 18 months, he said.

Contact staff writer Matt Buxton 459-7544.

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