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Healy coal plant restart deal draws no comments, no opposition

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Posted: Thursday, November 15, 2012 2:19 pm | Updated: 2:02 pm, Wed Jan 16, 2013.

The proposed settlement of the Healy coal plant legal case drew no comments or objections during a 30-day comment period, so the U.S. Justice Department asked Wednesday that a federal court sign off on the deal.

Court approval would be the final step before the Golden Valley Electric Association can begin the work necessary to restart the 50-megawatt coal plant.

That won't happen overnight, however, as the plant needs some new equipment and renovations that are expected to take from 18 to 24 months. More than $300 million of federal and state money went into the plant, but disagreements about the cost of power from the plant led to its shutdown in 2000 after a short period.

The sharp rise in oil prices over the last seven years changed the dynamics of energy in Interior Alaska so much that restarting the coal plant began to seem like a good idea. But there have been many objections and roadblocks that have delayed efforts to fire up the plant. Negotiations on the restart began three years ago.

The final court deal takes the form of a "consent decree" with the federal government. GVEA and the Alaska Industrial Development and Export Authority negotiated the consent decree with the Environmental Protection Agency.

The key question was the air permit for the plant, as that was the final document needed to proceed with the restart.

"Golden Valley chose to pursue the consent decree option with the EPA, otherwise, there was no defined end to the air permitting process. The consent decree avoids what the co-op believes would have been lengthy and costly litigation," GVEA said when the decree was announced in October.

The Justice Department said the decree "is fair, reasonable, adequate and in the public interest."

It requires GVEA to install emission controls on the coal plant that are expected to cost $40 million and to place additional nitrous oxide controls on the older Healy plant at a cost of about $5 million.

GVEA also agreed to pay $250,000 to support a woodstove changeout efforts in Fairbanks and in the Denali Borough and pay a $115,000 fine to the EPA.



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