Homer Electric sets deal on Healy coal plant

Posted: Sunday, November 19, 2006

FAIRBANKS - Homer Electric Association said it has reached an agreement with the state to restart the Healy Clean Coal Project.

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The utility announced Thursday that it has signed a formal agreement with the Alaska Industrial Development and Export Authority to resurrect the 50-megawatt power plant.

The authority owns the plant, which was built at a cost of nearly $300 million with federal and state funds. The plant was completed in 1997, but it has not been used to produce electricity since it failed a required 90-day test period in 1999.

Homer Electric entered an agreement with AIDEA earlier this year that allowed the utility to conduct an engineering review and inspection of the plant. Homer Electric determined it could be operated at a competitive price using the plant's "clean coal" technology.

Under the terms of the agreement, the utility will manage the work needed to restart the plant. AIDEA will continue to own the plant and it will pay for the work.

The agreement comes despite Gov. Frank Murkowski's June capital budget veto of an allocation designating $12.5 million to the authority to restart the plant.

Homer Electric spokesman Joe Gallagher said the utility plans to start buying power from HCCP in 2014, at the end of a long-term supply contract with another utility. He said he didn't know when the plant would begin producing power.

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