Rural Utilities Service issues final EIS on Healy coal unit restart

The U.S. Rural Utilities Service (RUS) said in a notice to be published in the June 10 Federal Register that it has issued a Supplemental Final Environmental Impact Statement (SFEIS) for the restart of the Healy power plant’s Unit #2 in Healy, Alaska.

The (SFEIS) supplements a Final Environmental Impact Statement (FEIS) completed by the U.S. Department of Energy (DOE) in 1993 as part of DOE’s partial funding of construction of Unit #2 to demonstrate then-new emissions control technologies.

In 1997, Healy Unit #2 was constructed as a major modification to the existing Healy Power Plant’s Unit #1, using funding from DOE and the Alaska Industrial Development and Export Authority (AIDEA). Healy Unit #1 is a 25-MW coal-fired boiler that has been owned and operated by the Golden Valley Electric Association (GVEA) since 1967. Healy Unit #2 is a 50-MW coal-fired steam generator owned by AIDEA, which underwent test operation for two years as part of DOE’s project. Unit #2 has been in warm layup since late 1999.

The SFEIS updates information in DOE’s FEIS and considers impacts of restarting Unit #2 for commercial operation. The SFEIS is available for a 30-day public review and comment period. Subsequent to the comment period, RUS may issue a record of decision (ROD).

The RUS is considering a proposal from Golden Valley for administrative actions and financing that would facilitate the restart and commercial operation of Healy Unit #2. Bringing Unit #2 into commercial production would help meet GVEA’s need to implement a lower cost option to augment its power capacity in its service territory by diversifying its fuel mix to reduce its reliance on oil-fired generation.

If restarted, Unit #2 would be fueled with a blend of run-of-mine coal and waste coal supplied by Usibelli Coal Mine Inc. (UCM) from the Poker Flats mine located about four miles north of the Healy plant. Notable is that Usibelli has for years been Alaska’s only active coal producer.

AIDEA wishes to sell Unit #2 to GVEA. As part of the restart of Unit #2, GVEA proposes to install additional emission controls to both Unit #1 and Unit #2 and to operate Unit #2 for the remainder of the plant’s operational life. GVEA plans to request administrative and financial assistance from RUS to facilitate its purchase of Unit #2 and improvements to the Healy plant, which include the installation of the additional emission control equipment.

Gas is limited in supply, oil is expensive, so Golden Valley wants more coal 

GVEA’s summer load is typically around 140 MW and its winter load in a very northern state is around 200 MW. Natural gas from Anchorage is typically more available in summer when the Anchorage heating demand is down. Natural gas-generated electricity from Anchorage is generally cheaper than GVEA’s oil-fired generation and therefore is dispatched first, when available. With the current and foreseeable future oil prices, coal is cheaper than oil, and therefore coal would be dispatched before oil-fired generation, the SFEIS noted.

At present there is no firm natural-gas-fired generation available to GVEA and its service territory. The majority of GVEA’s 296 MW of capacity is oil-fired generation. GVEA also has a firm power purchase agreement for approximately 25 MW of energy from the Aurora Coal Plant in Fairbanks.

The Alaska Intertie allows GVEA access to 20 MW of its hydropower from Bradley Lake, located on the Kenai Peninsula, and allows for the exchange of energy between Fairbanks and the Anchorage area. GVEA has non-firm power purchase agreements with Anchorage utilities for natural-gas-fired energy from the Cook Inlet. However, natural gas supplies in the Cook Inlet area are scarce and therefore intermittent for generating electricity for GVEA. They are also not readily available during the winter when GVEA’s demand is at its highest. This is because natural gas is used in the Anchorage area not only for electricity but for domestic heating.

Although there have been proposals to bring natural gas to the interior of Alaska from the North Slope since the 1960s, none of the proposals has yet been implemented. GVEA and others have proposed trucking the North Slope gas 500 miles, as liquefied natural gas, to the Fairbanks area, but these projects would require the development of processing as well as storage facilities and all applicable permits.

Another proposed source of bringing natural gas to interior Alaska is the Alaska Stand Alone Pipeline (ASAP). The Alaska Gasline Development Corp., authorized by the state legislature, has set a target date of 2020 to have ASAP implemented. GVEA’s North Pole Expansion Plant in North Pole, Alaska, is currently the only generation unit in its service territory permitted for using natural gas.

At the present time, there is no firm natural gas power capacity in interior Alaska. Until additional gas is either found in Cook Inlet, or another source of natural gas is found to supply the Anchorage area, there is no realistic expectation that natural gas can be a reliable source of power generation to GVEA’s service territory, the SFEIS said. Therefore, oil and coal remain the only viable fuel sources for firm generation.

Golden Valley had to settle air matter to get Unit #2 cleared for restart

In February 2012, the state of Alaska renewed the Title V Air Quality Control (AQC) Operating Permit for Unit #2. In the summer of 2012, the U.S. government entered into negotiations with GVEA and AIDEA regarding their future work plans and intent to operate Unit #2. These negotiations resulted in the United States, on behalf of the U.S. Environmental Protection Agency, filing a civil complaint for injunctive relief concurrently with a consent decree (CD) in the U.S. District Court for the District of Alaska.

The CD recognizes that GVEA and AIDEA intend to reactivate and/or restart Unit #2 and that, as alleged in the complaint accompanying the CD, the United States believes that GVEA’s and AIDEA’s proposal for Unit #2 would result in the operation of a new source or, in the alternative, a major modification of an existing source without obtaining the necessary permits under the Clean Air Act (CAA) and without the installation and operation of the state-of-the-art controls necessary under the CAA to reduce air pollutants, particularly NOx emissions from Unit #2.

While not admitting liability but in resolution of any alleged compliance issue, GVEA and AIDEA agreed to comply with specified pollution control requirements and emissions limits for both Unit #1 and Unit #2 at the Healy plant.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.