On March 3rd, the beleaguered Healy “Clean Coal” Plant caught on fire due to a buildup of coal dust igniting in the plant’s coal feeder system. The coal industry refers to these fires as “puffs.” It’s a clever way to downplay what actually happened. The fire, and resulting shutdown of the facility, is eerily reminiscent of how it all began . . . and then ended.
This story includes enough drama to win an Oscar.
The saga of bringing this dirty coal-fired power plant—which sits just miles from the border of Denali National Park—to life stretches back twenty-five years. In 1989, Healy was selected by the U.S. Department of Energy’s Clean Coal Technology Program as a demonstration project to use experimental technology to burn waste coal to create electricity. The facility, with a $270 million price tag, was referred to as the Healy Clean Coal Plant (HCCP). The experimental technology focused on building plants that could remove greater amounts of sulfur dioxide (S02) and nitrogen oxides (NOx), which contribute to acid rain and smog.
The players in this drama include the Golden Valley Electric Authority (GVEA), the operator of the plant; Alaska Industrial Development and Export Authority (AIDEA), the owner of the plant and a quasi-governmental agency that helped finance construction along with the Department of Energy (DOE); and Usibelli Coal Mine, who provides the coal for the plant.
The hope of having this plant showcase its ability to burn coal with low SO2 and NOx emissions were quickly dashed, however. The plant never made it out of the testing phase.
GVEA’s sanitized and heavily abbreviated history of the plant on its website notes, “Healy Unit 2 began burning coal in 1998 and generated power intermittently through 1999 in its testing phase. When the plant failed a 90-day commercial operation test, it was placed in warm lay-up status in early 2000.” GVEA was much more frank about the facility in an account that is no longer posted on its website, stating that “[d]uring the engineers’ testing of the technology, and as each major system was verified and brought on, it became clear to GVEA that HCCP had no chance of actual commercial operation using the experimental technology ….”
In fact, GVEA requested that AIDEA declare the technology not commercially feasible.
There was a laundry list of things that went wrong during the 90-day test period, but most relevant given the recent news are the explosions that took place during testing. On September 6, 1999, on the 20th day of the 90-day test when the plant was being shut down, there was a large explosion originating from the coal pulverizer. The explosion was caused by faulty equipment and extended operation at low load. There were fires throughout the coal silo and feeder system from the explosion.
A second explosion occurred a month later. In the lead up to this explosion, coal being fed from the coal silo to the coal feeders plugged in the downspouts. Maintenance workers used sledge hammers throughout the night in an effort to keep the coal flowing. In spite of these efforts, a duct explosion occurred. This was attributed to the elevated temperatures of the air exiting the pulverizer and reduction in air flow through the pulverizer and exhaust fan. These two factors resulted in coal dust being trapped in the duct at explosive temperatures.
An engineering assessment prepared for GVEA concluded:
“certain systems and equipment failed to meet an acceptable level of reliability. The coal feed system has both reliability and safety concerns. The pulverizer explosion is an obvious example that additional instrumentation and/or controls work needs to be done to assure that a similar incident does not happen again. The reliability and safety of the existing pulverizer exhauster fans and the variable coal splitter is unsatisfactory. The 90-Day Test proved that these components will require frequent repair to stop pulverized coal leakage and are not capable of sustained operation in their current state.”
After the failed 90-day test in 1999, GVEA declined to operate the plant or purchase it from AIDEA. The plant was mothballed and GVEA and AIDEA spent years in litigation, disputing transfer of the plant.
Almost ten years later, in June 2008, AIDEA’s startup engineers estimated it would take 19 months to start up the plant at a cost of $62 million, or about a quarter of the original cost of the plant. GVEA agreed to purchase and take over ownership of the shuttered plant in January 2009. The deal between AIDEA and GVEA included a purchase price of $50 million, financed over 30 years at about 5%. The $50 million sales price was $20 million less than the $70 million GVEA had offered to buy the plant for back in 2004. GVEA also would get a loan from AIDEA for $45 million, financed over 25 years at an interest rate of about 6.25%. The loan would allow GVEA to “to fix known deficiencies” and get the facility up and running.
GVEA’s proposal to re-start the plant raised major red-flags for conservation organizations and the EPA. Trustees for Alaska and the Sierra Club Environmental Law Program researched the details regarding the re-start to determine whether the proposed start-up complied with EPA’s rules. It didn’t. The rules don’t allow re-starts of plants that have been mothballed.
This plant was permitted in the mid-1990s. Emission controls of coal plants have made significant strides since that time. Trustees and our clients wanted the plant to comply with the Clean Air Act and EPA’s rules and implement currently available emissions control technology. This would require more expensive pollution controls that GVEA refused to adopt. The dispute over the start-up led to years of legal wrangling. Ultimately, GVEA settled with the EPA and installed best emissions control technologies to remove pollutants like SO2, NOx, and particulates.
After resolving the start-up issues and agreeing to install best control technologies, GVEA moved forward with construction. After investing $190 million in construction to bring the plant back online, GVEA is right back where it was in 1999.
Fires and explosions are not routine. Back in 1999, the fires/explosions started at the coal feeder zones. Last week, the fire started at, you guessed it, the coal feed system. GVEA’s own spokesperson, Corinne Bradish, acknowledged in a Fairbanks News-Miner story that this wasn’t the first time this has happened. However, her quote makes light of the major deficiencies and setbacks with the plant back in 1999. Bradish stated, “There were some problems when AIDEA owned it and was one of the reasons we didn’t want to take the plant back in ’99.” Indeed, those “problems” and “puffs” led GVEA to declare the plant commercially and technologically infeasible to operate back in 1999.
While GVEA may have been blinded by the sweetheart deal AIDEA gave them to take over ownership, GVEA’s decision to move forward with a plant that has known problems has left ratepayers in the lurch. GVEA has spent hundreds of millions to bring this Plant online. And now, it once again sits idle, as GVEA evaluates how to keep the Plant from burning down, or “puffing” once again.