Clean Air Act regulations could render Healy plant obsolete

Federal efforts to reduce greenhouse gas emissions could hit particularly hard in Fairbanks according to Alaska Department of Environmental Conservation Commissioner Larry Hartig.

Golden Valley Electric Association’s Healy 1 coal-fired plant could be regulated off the Railbelt power grid if the Environmental Protection Agency implements its proposed Clean Air Act carbon standards.

As is often the case, federal regulations designed to fit a Lower 48 model do not translate well to Alaska, Hartig said.

The EPA first unveiled its proposed Clean Air Act Section 111 guidelines for limiting carbon emissions in June. The proposal sets a national goal for reducing carbon emissions from power plants by 30 percent of 2005 levels by 2030 as part of President Obama’s larger Climate Action Plan released in 2013.

An extended public comment period on the pending regulations ended Dec. 1.

It doesn’t fit Alaska because the state’s carbon emissions come from different sources than the Lower 48, where 32 percent of carbon greenhouse gas emissions were a direct result of power generation in 2012, according to the EPA. In Alaska, about 6 percent of greenhouse gases come from electrical generation. The difference is due to an overall denser population and more coal burning Outside, Hartig said.

About half of Alaska’s emissions are from North Slope processing plants that burn natural gas and those are already efficient, he said.

“It’s not a statement about the environmental performance of the oil and gas industry in Alaska by any means; it’s just that you have world-class facilities in a state that has relatively low population so it’s going to kind of dwarf everything else,” Hartig said.

The Healy coal plant comes into play because it is one of the five plants in the state that fit the proposed regulation — at least 25-megawatt capacity, fossil-fuel burning plant that sells more than one-third of its power to a grid. The others are fairly efficient and generally newer Southcentral natural gas-fired plants.

Another “major stumbling block for Alaska,” Hartig said, is the fact that the state has six small Railbelt utilities and piecemeal ownership of its antiquated transmission grid. That limits the ability to sell cheaper, cleaner Southcentral power to Fairbanks, he said.

State studies have put about a $900 million price tag on needed upgrades to Railbelt transmission lines, which choke to just a single line in some places.

Additionally, the coal-fired power from Healy is some of the cheapest Golden Valley has and the plant is not ready for retirement, according to Hartig. It still carries debt.

In the event that a new plant would have to be built, he said, “You’re paying for the new plant; you’re paying for the old plant; you’re paying for transmission and if you’re in Fairbanks you already have some of the highest costs in the country for power.”

The president’s plan calls for final regulations to be issued no later than June 1, 2015, and for states to submit how they plan to hit the goal by the end of June 2016.

If the regulations are implemented as currently proposed by the EPA, it would force a transformed relationship between the utilities and the Regulatory Commission of Alaska to come up with a suitable plan, Hartig said.

“What the state’s doing is we’re working collaboratively with the Alaska Power Association; we’re working with utilities, the Regulatory Commission, The Alaska Energy Authority, the (Attorney General’s) office to carefully review this rather complex proposed rule and the impact it could have on Alaska,” Hartig said.

If the State of Alaska is to reach its goal of 50 percent of Railbelt electricity being produced from renewable sources by 2025, which would almost certainly require construction of the $5.2 billion Susitna-Watana dam, Hartig said more focus would have to be put on power generation projects.

Rural renewable projects often sponsored by the Alaska Energy Authority’s Renewable Energy Fund would not lower emissions based on the Section 111 proposal because they are not tied into a grid.

While the state has put resources towards energy efficiency in urban areas much of it has been for heating efficiency, such as the Alaska Housing Finance Corp. energy rebate and loan programs.

“We may think we’re doing all these great things, but they don’t impact greenhouse gas emissions as they’re being regulated under this proposal,” Hartig said.

Elwood Brehmer can be reached at [email protected].

11/18/2016 - 10:38am