MEA breaks ground on Eklutna generation station
Matanuska Electric Association, Inc. broke ground at the site of its new natural gas power plant in Eklutna on Tuesday, June 26.
Construction of the 171-megawatt Eklutna Generation Station is scheduled to be completed in the fourth quarter of 2014, according to a press release. That year is when the utility’s contract with Chugach Electric Association to provide power expires.
The new facility will stand adjacent to the now defunct Eklutna Power Plant, which operated until the 1940s. It will be located on a 70-acre parcel of land — which MEA purchased from Eklutna, Inc., in 2009 — on the east side of the Glenn Highway between the railroad tracks and the base of Eklutna Mountain.
The power plant will take up 30 acres, with the remaining land serving as a buffer.
On June 11, MEA’s board of directors approved a $250 million interim loan agreement for the project. The National Cooperative Service Corporation, an affiliate of the National Rural Utilities Cooperative Finance Corporation, approved the loan in May after inspecting the utility’s creditworthiness.
At the current London Interbank Offered Rate (LIBOR), the loan has an interest rate of 2.49 percent, according to MEA. The utility said LIBOR is the average interest rate leading banks in London charge when lending to other banks and is the internationally recognized standard.
In March, MEA’s board approved a $100 million contract to Wartsila North America to supply the Eklutna plant with engineering, engine and generating equipment.
The 10, dual-fuel generating sets will operate on natural gas. But in case the gas supply is interrupted, the 18-cylinder units can switch to run on diesel, MEA said.
“In the event of a natural disaster, such as an earthquake, these engines can switch fuels without a hiccup,” MEA General Manger Joe Griffith said in a statement. “That was a huge factor in our decision to go with Wartsila.”
Eight of the 10 engines — which weight 355 tons each — have already been built and are ready to be shipped, MEA said. The remaining two will be constructed in Italy.
In 71 years, MEA has grown from 127 members to 57,000. The utility has 4,000 miles of power lines and supplies power from Eagle River to Talkeetna.