VOLUME 2 | ISSUE 3 | SUMMER 2025
Healy 1 plant built in the 1960s is still per- forming despite its age, but there are oper- ational problems with the larger 50-mega- watt Healy 2 plant because when built in the 1980s it employed new, experimental technologies which have created operat- ing problems. Replacing these plants when they are retired will be expensive. GVEA also generates renewable power at wind turbines at Eva Creek, near Healy, and also purchases wind power from a pri- vate power producer near Delta, and gets a share of Bradley Lake’s low-cost power that is transmitted up the electric intertie from Southcentral Alaska. The co-op is also con- sidering diversifying its renewable energy portfolio from a planned private wind proj- ect at Shovel Creek near Fairbanks. GVEA had a sobering experience with new technologies in the Healy 2 plant, but the cooperative has still embraced innova- tion and new technologies. A large battery powered storage unit, for example, was in- stalled several years ago that gives the co- op the ability to a fast startup in supplying power in the event of a major outage, even in winter.
GVEA is now working with Westing- house on a possible long-duration power storage facility at its North Pole generation plant that would store heat in ceramic ma- terials. Heat converted to power would pro- vide backup energy for an extended period. Chugach Electric and Homer Electric As- sociation also are installing battery storage. While progress is being made on new generation and power storage, improve- ments are needed in long-distance electri- cal transmission systems, which also are aging. These are necessary to efficiently move power to where it is needed along the Southcentral-Interior “railbelt” transmis- sion system. The upgrades are important if power from new projects including Dixon Diver- sion at the Bradley Lake or new wind proj- ects in Southcentral and Interior Alaska are to be efficiently used. Some of the transmission upgrades are now underway, led by the state’s Alaska Energy Authority, or AEA, and the re- gional utilities. State and federal funds are being used although the utilities are also contributing.
Chugach Electric and the AEA are currently rebuilding parts of the Ho- mer-to-Anchorage transmission line on the Kenai Peninsula so it can handle the in- creased power output from Bradley Lake’s Dixon Diversion when completed in 2031. The AEA is separately working on a new submarine power cable across Cook Inlet that will connect existing transmission sys- tems on the Kenai Peninsula to Chugach Electric’s Beluga power station on Cook Inlet’s west side. This also will involve an upgrade to transmission lines north from the Beluga plant to the Matanuska-Susitna Borough and around Knik Arm of Cook Inlet to Anchorage. This new transmission loop will pro- vide more energy security because it will be an alternative way to get Bradley Lake hydro power to Anchorage and Mat-Su communities in the event of a failure in the Kenai Peninsula transmission system. Unexpected events do happen. A few years ago, forest fires on the Kenai Peninsula temporarily disrupted delivery of Bradley Lake power north to Anchorage and the Mat-Su regions.
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coPhillips LNG export plant at Nikiski to handle the liquefied gas. Enstar is separately working with Glenfarne, a New York-based energy company, on a plan for a new LNG import terminal to meet its needs, which are larger than the needs for Chugach Elec- tric. Enstar won’t need LNG until 2032, when its contract for Cook Inlet gas with Hilcorp expires. Chugach Electric’s Hilcorp supply contract ends in 2027, however, and it will need to import LNG sooner, and must have its plans in place in 2026. Enstar, the regional gas utility, is most affected by any shortfall because it is re- quired to supply natural gas to its custom- ers. The electric utilities have alternatives such as inexpensive power from the Brad- ley Lake hydroelectric project near Homer, which is to soon be expanded. Chugach also has access to power from the private Fire Island wind project. Solar power is supplied to Matanuska Electric
by a private power producer at a price that matches that of natural gas. Matanuska Electric has also equipped its Eklutna gas- fired power plant to switch to oil as a fuel, if needed. In addition, Chugach is considering a plan to purchase power from a proposed private wind project near Mount Susitna, west of Anchorage. If this moves ahead, Matanuska Electric also could buy power from this project. In Interior Alaska, Golden Valley Electric Association (GVEA), the Fair- banks-based cooperative serving the re- gion, has access to large coal resources at Usibelli Coal Mine near Healy, which al- lows it to generate power at stable, and af- fordable, prices. GVEA also has an oil-fired plant at North Pole that can be used when needed. The challenge for GVEA, however, is that its two lower-cost coal power plants at Healy are aging. The small 25-megawatt
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In 2029, the deficit will be 20 billion cu- bic feet and in 2030 it will be 28 billion cu- bic feet, according to the state’s estimates. If this is correct, there will be a supply deficit of over a third of the regional gas demand by 2030. Some new gas from Cook Inlet is be- coming available with added supply from new wells drilled by HEX, owner of the Kitchen Lights offshore fields as well as Hilcorp, which is drilling new gas wells on the Kenai Peninsula. These are unlikely to offset the deficits, however, so planning is underway now on LNG imports to fill the gaps. Cost estimates aren’t yet available, but they are generally thought to be half again or twice as much as the current cost of Cook Inlet gas. To do the imports, Chugach Electric is working with Harvest Alaska on a plan to convert the mothballed former Cono-
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ALASKA RESOURCE REVIEW SUMMER 2025
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