The decision puts the future of the $300 million plant in limbo again after being in "warm storage" for the past nine years. The facility was built in 1997 to demonstrate advanced coal-burning and emissions-control technology. The U.S. Department of Energy funded half of the cost of the plant.

Debham said the utility had been interested in the 50-megawatt Healy Clean Coal Plant project as an effort to help diversify HEA's fuel portfolio. The long-term plan is now to go with some natural gas-fired generation and integrate renewable energy sources, such as small-scale hydro and wind projects, she said.

Homer Electric is in the permitting process in the Cooper Landing/Moose Pass area, and hopes to have 9 megawatts of wind energy coming on line by the end of 2010. The utility may participate in Fire Island wind turbine energy project near Anchorage, she said.

HEA also is talking with a firm interested studying tidal energy in the Homer area, she said.

Much of the discussion at the May 12 Homer Electric board meeting that preceded the vote took place in executive session. Board members came away with a motion, which passed 8-1, to "transition away from the Healy Clean Coal Project."

Homer Electric is now reassessing its rights and responsibilities under the various agreements regarding the Healy project, the utility said in a statement. The motion passed by the board also called for cancellation of a planned power supply study to determine what power supply options, including the Healy project, would be the most beneficial for Homer Electric.

According to Joe Gallagher, another spokesperson for HEA, the board was concerned with the likelihood of prolonged litigation delaying the restart of the Healy plant.

"There were concerns about environmental objections to the plan that could lead to prolonged litigation," he said.

Another factor that may have played into the decision was that at their annual meeting May 7, members of the Homer utility voted in three new members to the nine-member board of directors. Two incumbents were defeated and a third incumbent chose not to seek re-election.

At present, roughly 93 percent of Homer Electric's power comes from Chugach Electric's natural gas fired facilities, and the other 7 percent from Homer Electric's share of the $328 million state Bradley Lake hydroelectric project.

Homer Electric's contract with Chugach Electric ends in December 2013, "so between now and then Homer Electric is looking at different options," Gallagher said.

Terms agreed to back in January called for the Healy Clean Coal Project to be sold to Golden Valley Electric Association for $50 million, with the Alaska Industrial Development and Export Authority financing the sale at 5 percent interest, and providing GVEA with a $45 million line of credit at 6.5 percent interest for restart costs, said AIDEA spokesperson Karsten Rodvik.

One of the key elements of the agreement was that Homer Electric would purchase from GVEA half of the plant's energy and capacity starting in 2014, Rodvik said.

"Our goal remains the same: to bring the Healy Clean Coal Project on line for the benefit of Railbelt electric consumers," he said.

Homer Electric's decision "was unfortunate because a great deal of hard work went into the agreement," he said.

Golden Valley Electric Association officials were not immediately available for comment.

The Healy plant was mothballed December 1999, when a 10-day test period was completed on the experimental power project. New clean-coal burning technologies installed in the plant showed good performance during an extended test period done for the U.S. Department of Energy, which contributed funds toward the clean coal systems, but Golden Valley and AIDEA disagreed on results of a 90-day commercial operating test which resulted in problems, GVEA said.

During that period Homer Electric formed an agreement with AIDEA to take over operation of the plant and purchase power. The extended period of litigation and negotiations between AIDEA and GVEA spanned nine years, until the agreement was reached last January between Golden Valley, AIDEA and HEA.