Homer Alaska - Business

Story last updated at 10:08 PM on Wednesday, May 4, 2011

HEA breaks ground: Nikiski facility will create more electricity with gas



Morris News Service - Alaska

Homer Electric Association broke ground on its Independent Light project April 28 under sunny skies.

"It's a fortunate start to our Nikiski combined generation project," said HEA spokesman Joe Gallagher, who delivered opening remarks for the brief ceremony at the Nikiski generation facility.

John Mahoney from NORCON Inc., the lead construction company on the project, HEA Board President Debbie Debnam and HEA General Manager Brad Janorschke shoveled the first scoops of dirt using golden shovels. Borough Mayor Dave Carey, Soldotna Mayor Peter Micciche and Kenai Mayor Pat Porter took on the second round of digging before a crowd of more than 40 onlookers.

When the project is done in a year and a half, the Nikiski generation facility will produce about 45 percent more electricity with the same amount of natural gas. That will be accomplished by capturing waste heat.

The new steam turbine will take that heat and turn it into electricity.

"If you drive by, especially on cold days in the winter, you can see the heat waves going out of here," explained HEA's Norm Moore on a brief tour of the facility.

The completion is timed to help meet energy needs on the Kenai Peninsula after the utility's contract to buy power from Chugach Electric Association runs out at the end of 2013.

The current combustion turbine can produce about 40 megawatts.

The new turbine will produce about 17 or 18 megawatts of extra electricity using the same amount of fuel, and up to about double that amount if more fuel is used.

In total, the generation plant could produce 77 megawatts at full force.

Before officially breaking ground, Debnam said the day was a milestone in HEA history.

The utility started buying power from Chugach in the 1960s, when it determined that it couldn't produce as much power from diesel as the Peninsula needed. Now nearly 40 years later, the association is returning to generation, with natural gas as the power source.

Debnam said the board opted to create its own power after a study that presented 64 different options, including investing in the Healy Clean Coal project or continuing to buy from other producers. Number crunching showed that investing in a plant on the Peninsula wasn't more expensive than investing and purchasing power from the Anchorage area.

"We believe the jobs created during the construction of the power plant should be Kenai Peninsula jobs," Debnam said. "We believe the jobs created when the plant comes on line should be Kenai Peninsula jobs. And we believe that the decisions made about power production should be made right here on the Kenai Peninsula."

Molly Dischner can be reached at molly.dischner@peninsulaclarion.com.

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