As one who has followed the sad saga of the experimental coal fired power plant project in Healy, Alaska since 1990, some of the editorials advocating for continued investment in it have been missing some critical points.

Usibelli Coal and GVEA championed a $105 million federal grant to build the plant, though neither incurred much risk. Usibelli wanted to market unsalable quality coal to the plant and GVEA wanted a free functional power plant. Their combined efforts got the State of Alaska to take ownership through the Alaska Industrial Development and Export Authority (AIDEA), with an added $25 million direct Legislative appropriation in 1990. The federal Clean Coal Technology program, initially set up to find ways to reduce acid rain from coal plants, ended up providing $105 million to find out if the two technologies tested worked. They got what they needed, leaving AIDEA with cost overruns and legal bills that now exceed about $200 million more for a total of over $350 million.

AIDEA wants to off‐load the plant to GVEA for $50 million as is. GVEA is in a bind as they allowed the plant not only to be constructed on GVEA property, but to be attached to GVEA’s existing 25 mw Healy plant, through which both plants share infrastructure. GVEA and AIDEA, after nearly a decade of suing each other, have signed a purchase agreement which is very hard for GVEA to back out of, barring 3rd party litigation or failing to get their air quality permit approved.

GVEA estimates $45 million to modify the experimental plant to be acceptable for GVEA to own and operate, for a total of $95 million debt for GVEA. One current milestone is receiving an air quality permit from the State of Alaska with concurrence from the E.P.A. , responsible for reviewing such permits. This plant was constructed next to Denali National Park and the original permit was issued in 1994 with added requirements to not impact the airshed of one of Alaska’s and the country’s natural treasures.

While new elements in permitting power plants are not yet regulated (mercury, CO2), newer technology is now available than from 18 years ago when the air quality permits were last issued. This best available current technology would add $20‐$40 million more to the $45 million retrofit price tag, for a total to GVEA members of $125‐$145 million. I don’t see where this increased cost is built into GVEA’s touted savings of 10% on fuel cost (5% of rate‐payers bills).

I recently reminded the GVEA board recently that members just removed a restriction on outstanding debt no more than $450 million ($350 million was outstanding debt) with public promises from the board that they would be cautious in not over‐borrowing. However, in the past few months, GVEA has announced borrowing for $93 million for Eva Creek Wind Project, over $100 million for trucking natural gas to the North Pole generator, and now over $100 million for buying and retrofitting the experimental coal plant in Healy. These loans mean that in less than a year, GVEA will have doubled the debt to the cooperative. Debt service, interest, and depreciation are the major components of rate‐payers’ utility charge. The board will be incurring 20 years of debt for a promise of short term savings, which are likely to be overshadowed by other economic means of cost reduction, such as natural gas, hydro, conservation.

Some argue that coal as a fuel source makes sense because it is cheap. The only reason it is cheap is because the full external cost to the environment is not included. The EPA was already instructed by the Supreme Court to start regulating CO2. Some Congressmen says that’s Congress’ job, but they oppose doing so. Mercury and coal ash are likely to be factors in the near future. There is a reason that the Rural Utility Service doesn’t loan on coal plants any more. GVEA’s purchase of this plant is a 20 year commitment. It is estimated to take 18 months to get on line, within months of when trucked natural gas is scheduled to begin.

Complicated history, but figure this plant, if restarted, will likely have sucked down nearly half a BILLION dollars if allowed to proceed. I understand rate‐payers want relief from high energy prices, but I believe that re‐starting the experimental coal fired power plant in Healy won’t save us in the long term and will remain the boondoggle that everyone agrees it has become.


I’ve often noted the oxymoronic expression “Clean Coal”. It’s why I refer to the DOE/State of Alaska funded “experimental coal fired power plant in Healy” instead of the “clean coal technology” power plant. It may just be less dirty than its neighbor plant. By the time GVEA gets done with the rehab though, I’m not sure if it will still be true.

A commercial now airing on some cable channels also takes on this topic, by the Coen Brothers.

Dave Lacey portraitPhoto courtesy Doug Yates I don’t usually get personal in this forum, but wanted to announce the passing of a Fairbanks icon Dave Lacey, who died of cancer Feb. 24, 2009 a day shy of his 64th birthday.

Dave has been in Fairbanks for a really long time, a gentle soul with a great conscience, considered himself a non-reformed hippie, was a great story-teller, has been involved in a number of community based efforts, hosted the Oldies Show, a radio show on KUAC as Dr. Dave.

I might have first met him at the Koponen sauna in the early days, but he wandering in and out of my life in various areas and times. I worked with him when I was at Tanana Chiefs Conference and he was working for one of the village corporations. Of late, he had been working hard to establish a community based food co-op against insurmountable odds.

With a strong voice to the end, he did his last radio show on KUAC just last Saturday.

Rep. David Guttenberg asks Dave’s friends and associates to send him stories and anecdotes of Dave’s life. He’ll draw on these to create a legislative honorarium. Please share this request with others whose lives were touched by Dave. Share your remembrance of Dave’s work, play and/or spiritual connection by sending it to:

Here is a video of snippets from his last show Sat. Feb. 21, 2009.

I got a chuckle out of the recent report on the Alfalfa Club dinner. It wasn’t as fun reading about one of our regressive Alaska legislators..

That is all.

Rep. Les Gara sent a press release along with his requested report investigating the high price of gas, compared to the price of crude oil. Not surprisingly, it shows that refineries are recovering roughly twice what they were as recent as July 2008 and as they had historically. When the Flint Hills North Pole refinery owners say they aren’t investing in keeping up the refinery and wanting to sell it to the State of Alaska, caveat emptor. What I hear from employees even before the excessive profit taking is that they weren’t losing money, just not making as much as they would like.
Here’s the legislative report for your prurient curiosity.

Interesting that Alaska gasoline, with no state gas tax, is higher than Hawaii gas, when we extract and refine our gasoline in state and Hawaii imports everything many thousands of ocean miles. Something is in imbalance up here and odd that folks aren’t in an uprising, considering how volatile Alaskans can be.

Style in public and style in private are sometimes very different in politics and others in public life. The tapes of Richard Nixon showed him to be a foul mouth bigoted bitter person.

However, style in public management blends the private and public view. A number of articles that have re-surfaced on Sarah Palin’s management style offer a focused perspective on her tough stands on war with Russia, comparing herself to a pitbull with lipstick. This
New York Times article lays out an historical perspective of how Palin’s tough management style isn’t all that private. “Tough” appears to be a mild word to describe it. Kind of seems like Dick Cheney vindictiveness and cronyism without his global mission. Different people, same story. I hope there is enough time in the campaign for Americans to learn more about what is being offered. Late entry of a relative unknown candidate into a high profile political campaign has a large element of risk that is not always discovered until too late. Alaska has some experience with this when Hickel and Coghill replaced the AIP candidates after the primary was over and won. They only served a single term after Alaskans found out eventually what they were all about. Characters from the Wizard of Oz came to the fore during the Hickel/Coghill recall petition drive. Guess who was who.

Someone knows how to get the blogosphere attention without even trying – Anne Kilkenny

I found the above and some other links at:

One of the retrospective views I’ve heard, through the New Republic, is that McCain’s campaign is the most sarcastic in many years. Palin seemed to add onto this quite heavily in her nomination speech.

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