Energy

Energy

IGU cuts out of Siemens deal
The Fairbanks-based Interior Gas Utility terminated negotiations with Siemens on a deal to build a small modular liquefied natural gas plant near Willow to supply LNG to the Fairbanks gas utility. Negotiations have been confidential and it is not known what caused the breakdown but IGU board members had been skeptical of Siemen’s claim that it could supply LNG to Fairbanks with a gas feedstock price of $5 per thousand cubic feet, or mcf. IGU now buys gas from Hilcorp Energy for its existing small LNG plant near Point Mackenzie for $7.72 per mcf, and since Hilcorp is the major gas supplier in the region there was no reason to believe it would lower its price to $5. There is potential for gas in northern parts of the Mat-Su Borough, but no discoveries have yet been made.
IGU will now proceed with plans to build a new, larger LNG plant at Point MacKenzie. The utility has approved funds for engineering for the facility, which is estimated at $50 million.

Petersburg hydro upgrade
Petersburg officials were told that $7.3 million for upgrades will be needed, over a period of years, to keep the Blind Slough Hydroelectric Project operational through to the end of its li- cense period in 2034. The plant was built in 1924, upgraded in 1955, and today supplies 25 percent of local power needs. The remaining power needed by Petersburg comes from the South East Alaska Power Agency, or SEAPA, which operates the larger Lake Tyee hydro project. Blind Slough provides power at 1.2 cents per kilowatt hour while SEAPA power is provided for 6.8 cents per kilowatt hour.
The biggest item in the Blind Slough project list is a powerhouse refurbishment estimated at $5.3 million. McMillan Jacobs Associates, a national engineering consulting firm, performed the condition assessment of the older hydro plant. The company was also involved in the expansion of Sitka’s Blue Lake hydro project.

UAF coal power plant
University of Alaska Fairbanks officials hope to have UAF’s new combined coal-fired power and steam plant operational by mid-May. The completion is six months late from the original goal of having the plant operating by last November. Some good news is that the plant is within its $284 mil- lion budget, UAF officials said. Testing procedures for equipment took longer than expected.

Chugach, ML&P deal proceeds
Chugach Electric Association is moving through the state regulatory procedures in its acquisition of Anchorage’s city-owned Municipal Light & Power utility, and expects to have approvals for the deal to close by February 2020. On April 1 Chugach filed an application with the Regulatory Commission of Alaska to expand its service territory to include areas now served by ML&P. The acquisition will cost Chugach about $1 billion but the deal will save Chugach customers about $200 million a year, mostly through efficiencies of merging the two utilities.
Seafood employers are recruiting for summer jobs in processing plants. About 4,000 full-time temporary workers are needed. Fourteen companies are working through the state Department of Labor.

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