Fairbanks utility needs credit for coal plant

FAIRBANKS - The Golden Valley Electric Association wants the freedom to borrow more money so it can fund a proposed wind farm and restart an inactive coal plant in Healy.

Members of the electric cooperative set a $460 million debt ceiling in the 1970s and it has been left unchanged for decades despite inflation. The board of directors has asked membership to give it the power to self-regulate borrowing. The request is on election ballots due by June 8.

Federal lenders calculate the cooperative's debt differently than Golden Valley's internal accountants, the utility said. The difference, when realized, left the Fairbanks utility scraping against its debt limit.

Bill Nordmark, Golden Valley's chairman, said directors would need a "different strategy" if members reject the change. Options would include a special election aimed at earning a higher credit limit for the project, he said.

"We're so hoping this bylaw (change) is going to pass that we haven't talked much about it," Nordmark said.

Golden Valley has pursued the proposed Healy restart for a year, despite objections from environmental groups. The experimental coal power unit has been in a decade-long hibernation following technical problems.

Utility president Brian Newton acknowledged Wednesday that upgrades to the combustion unit, built with federal and state subsidies and shuttered shortly after a 1999 test run, won't leave it burning at present-day emission standards for carbon. Aside from health implications, critics worry about the risk of higher operating costs if Congress approves major carbon legislation.