UAF to press again for funding to replace aged power plant

Photo/Todd Paris/University of Alaska Fairbanks

There is something that keeps University of Alaska president Pat Gamble and UA Fairbanks Chancellor Brian Rogers awake on a winter night.

Say it’s a typical cold night in Fairbanks. Thirty, maybe fifty degrees, below zero. A pipe breaks in the university’s 50-year-old coal-fired plant. The university’s campus heat, which the plant provides, goes down.

Having to empty out the university’s buildings and find shelter for hundreds of students is bad enough, but a freeze-up could also put at risk hundreds of millions of dollars in university buildings and infrastructure. The existing plant heats about 3 million square feet of building space on campus including dormitories, classrooms, research facilities and other buildings.

New construction now underway on the campus will add about 270,000 square feet of space. 

The entire campus freezing up is a nightmare scenario, but it could happen.

In a pinch, Golden Valley Electric Association, the Interior electric co-op, could provide electricity to the campus, which it does now to meet winter peak demand, but having the lights on doesn’t help if the buildings go cold and pipes freeze. 

The fact is there’s no backstop for steam in the heating system. That has to come from the power plant’s coal-fired boilers. Those are half a century old, and the combustion technology in the old plant is more than a century old.

UAF needs a new power plant. The price tag for a new coal-fired plant, which is the only realistic option, is an estimated $245 million.

Where will the money come from? The university itself can cover about $45 million of the cost through borrowing with revenue bonds but the other $200 million has to come from somewhere, and the state Legislature is the only realistic option.

UAF has also looked at the possibility of a public-private partnership, which is being done for the first time on another campus building project, the Wood Center expansion. This involves a private company investing in, and owning, part or all of a project.

While this is a possibility, the investor would have to earn a profit and this could drive up the long-term costs of the project to levels that could be unaffordable. One factor is that a privately-owned power plant would have to pay local property taxes, which could be considerable.

So once again, the university’s Board of Regents will likely ask the Legislature later this year for funds to replace the aged power and steam heat plant.

Last year legislators said no. The year before they gave $3 million to allow preliminary engineering and permitting work, which are critical to the project.

The new plant would be more efficient because the technology to be employed — a circulating fluidized boiler — burns coal more completely and efficiently than in the current system, which essentially transports coal on a conveyor and lays it on a grate for burning.

Right now, what’s on the critical path is a federal air-quality permit for the project. The current plant has an air quality permit but the new plant should be able to qualify for a modification of the existing permit because the new plant would have lower emissions of pollutants using new coal-burning and emission-control technology.

Carbon dioxide emissions with the new plant will be about the same as the current facility, but other pollutants such as particulates — a major concern in Fairbanks — will be much lower.

There would be a 60 percent decrease in nitrogen oxide, a 42 percent decrease in carbon monoxide, and a 71 percent decrease in sulfur dioxide.

There will be a 69 percent decrease of total particulates, including, within this, a 75 percent decrease of coarse particulates and a 53 decrease of fine particulates, compared with the current plant emissions.

Particulates are a major concern in Fairbanks during winter cold weather because they concentrate at low levels due to temperature inversions.

Still, the idea of using coal again isn’t popular on the campus, and UAF Chancellor Rogers has had some difficult conversations with students and faculty explaining why coal is still best in an era of concern for climate change. However, when students realize the effect that a switch to a renewable fuel, say biomass, would have on tuition rates, they understand the dilemma the university is in.

There really aren’t any other fuel options other than coal. Although Fairbanks may soon get liquefied natural gas trucked from the North Slope, this would be much more expensive than coal, UAF spokeswoman Marmian Grimes said.

Biomass isn’t a practical option either at the scale of wood-cutting that would be needed, although both gas and wood biomass can supplement coal.

The university has looked closely at a variety of fuels including natural gas as a primary fuel for the new plant and has concluded that coal, burned in an efficient, modern plant, is the best financial option, she said.

However, Grimes said the new power plant design, with some tinkering, would allow the use of other fuels including biomass as a supplemental fuel.

Municipal waste could even be used, she said.

The university currently spends about $4.4 million yearly for about 71,000 tons of coal from Usibelli Mine Inc., owned of a coal mine at Healy, south of Fairbanks. More coal would be used in the new power plant, about 85,500 tons yearly at a projected cost of $5.3 million, because the new plant would generate enough new electricity to displace power now purchased from Golden Valley Electric to supplement the current plant.

UAF now purchases about 1 to 3 megawatts of power from GVEA at an annual cost of about $2 million. A backup arrangement with GVEA will be kept in place, and the university may opt to purchase wind power as a supplement to coal from the regional utility. GVEA generates renewable power at its Eva Creek wind project.

Meanwhile, Alaska Department of Environmental Conservation officials are expected to release a draft of the permit modification soon.

“We are expecting to release the draft UAF power plant permit to public notice the week of Sept. 9,” Alice Edwards, director of the Department of Environmental Conservation’s air quality division, wrote in an email.

While this is a federal permit required by the U.S. Clean Air Act, the state DEC administers the program in Alaska under guidelines set by the U.S. Environmental Protection Agency. EPA makes the final decisions, and whether the new plant will qualify for a modification of the current permit or a brand new permit will be required is up to the EPA.

Conservation groups like the Sierra Club will be weighing in with their opinions when DEC releases the draft permit and solicits comments. The Sierra Club has a national “no new coal” campaign, but whether it is willing to make an exception to the UAF plant isn’t known yet.

09/12/2013 - 11:04am