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The Usibelli Coal Mine may have found a new - and large - customer for its coal in the Matanuska Electric Association. The electric company does not plan to renew its contract to purchase power from Chugach Electric Association and is discussing a potential new coal-fired power plant.
PHOTO Courtesy of Usibelli Coal Mine
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WASILLA - Matanuska Electric Association has begun talks with Usibelli Coal Mine about building a new power plant in the Matanuska-Susitna Borough within the next 10 years.
Matanuska Electric now buys power from Chugach Electric Association, but claims it pays too much and does not plan to renew its contract when it expires in 2014.
Usibelli, the family-run mining company in Healy, wants a long-term customer along the Railbelt to buy coal. The company earlier proposed a $420 million, 200-megawatt coal-fired plant near its Healy mine.
A coal plant in the Mat-Su Borough likely would be built on a similar scale, said Steve Denton, Usibelli's vice president of business development.
Denton said many questions remain about where a plant would be built, who would own it and how much it would cost.
"There's a lot of ground to cover before we get to the concrete and rebar stage," Denton said.
Matanuska Electric spokesman Mike Pauley said if a plant is built, it could be ready as early as January 2015. The utility might build it and own it, or the project could be a joint effort between the utility and coal company, he said.
The project would mean a shift from reliance on natural gas to coal in providing power to Matanuska Electric customers. Coal could come from Healy or Usibelli's Wishbone Hill Mine near Sutton, which supplied coal to Anchorage plants until the mid-1960s, Denton said.
The discussion of a new plant has begun even as an 8-year-old plant remains idle in Healy. That facility, the $300 million Healy Clean Coal Project, was an attempt at a cleaner, high-tech method of burning coal. The project was mothballed in 1999.
Even if it were up and running, the Healy Clean Coal Project could only generate 50 megawatts, less than half of Matanuska Electric's peak load last year, and would not solve all the Railbelt's power needs, Denton said.
Usibelli more recently proposed a coal plant, called the Emma Creek project, that the company wanted Railbelt utilities to build in a location about eight miles northeast of its Healy mine. No one has stepped up to build it, and Usibelli sees a Mat-Su coal plant as an alternative.
"If MEA builds a plant in the Matanuska Valley, it's a wonderful substitute for the Emma Creek project. That was our goal, to see the Railbelt utilities get some coal in the mix, and where was not that important," Denton said.
He estimates that 5 percent to 7 percent of the Railbelt's power comes from coal. A Mat-Su coal plant could generate about 20 percent of the Railbelt's power needs, he said.
