Healy plant won't mean higher rates
GVEA must buy for Fort Knox mine

Fairbanks Daily News Miner
By Kate Ripley
Thursday 12/10/92

A high-tech coal burning plant in Healy will not cause higher power rates for South-central residents, thanks to the Fort Knox gold mine, Golden Valley Electric Association officials say.

Mike Kelly, GVEA general manager, said the gold mine's electrical requirement of 35 megawatts combined with projected growth in Fairbanks means Golden Valley will continue purchasing as much, if not more, power from Anchorage-based Chugach.

Chugach officials earlier feared the Healy project would mean Golden Valley would no longer buy Chugach's surplus power. If that were the case, Chugach would lose a major customer and likely have to increase rates to recoup its costs.

All that has changed with the Fort Knox mine, Kelly told U. S. Department of Energy officials during a public hearing on the Healy project Wednesday night.

"They (Chugach) will see no loss of business from Golden Valley," Kelly said. "This, naturally, is good news for them."

Construction on the Fort Knox mine could begin this spring, and be in full operation by 1995 if mine operators decide to proceed and all state and federal permits are granted.

At least 100 people attended the Department of Energy hearing in the Joy Elementary gymnasium. The meeting began at 7 p.m., after a workshop and a question and answer session, only 10 people had testified, including nine supporters and one opponent of the project.

The new Healy plant would produce 53 megawatts of power using two new technologies for burning coal cleanly. The Fort Knox mine alone will eat up more than 70 percent of the plant's output. Increased power demands in Fairbanks will consume the rest, Kelly said.

The state-run Alaska Industrial Development and Export Authority would build and operate the clean-coal plant next to GVEA's 25-megawatt coal-fired plant at Healy, 100 miles southwest of Fairbanks. Usibelli Coal Mine would sell coal to the new plant.

State utility regulators in September approved the clean-coal plant's sale of electricity to GVEA. Environment groups have argued the electricity is not needed and could harm air quality in Denali National Park.

"Coal burning is a fundamental threat to the planet," said Dave Lacey. "This project is pork barrel."

The plant would release 512,000 tons of carbon dioxide into the air each year, according to the Energy Department's draft environmental impact statement.

Carbon dioxide is not an air pollutant but contributes to global warming.