Sporadic power problems at the University of Alaska Fairbanks this winter highlight the urgent need for a new power plant, UA President Pat Gamble told legislators Tuesday.
"We had what I would call a major failure already this winter, where we had to evacuate buildings," he told the Senate Finance Committee. An expansion joint in an underground utility tunnel overheated in late January, leading to a loss of steam heat on a part of the campus with temperatures near minus 40. "In the process of looking at that, we found these two cracks in the boilers," he said.
Metal cracks can be repaired, but not indefinitely, he said. "This is exactly the reason why we need to get this plant replaced," he said.
The timeline on replacing the UAF power plant was thrown into question recently because the project price climbed about $50 million over the original $245 million budget approved last spring. He said the engineering work had not reached an advanced stage when the Legislature signed off on a financing package in 2014.
But Gamble did not preface that comment with a request for a bigger appropriation. "We made the decision that we could not come back here and ask for more money," he said. Instead, the university is reconfiguring the project to make it work.
The challenge is to lower the construction cost on the proposed coal-fired power plant and still provide a secure source of heat and light for 3.1 million square feet of space on the Fairbanks campus. The campus buildings are heated with steam generated by the existing power plant, which is more than 50 years old.
"What we've done is put the brakes on the project and go back and do the value engineering to see if we can get that estimate back down again -- what have we missed and what can we do to get that cost back down," he said. The plan had been to get the plant online in 2018, but a new schedule has not been announced.
"If there's going to be a delay in terms of bringing the power plant online then we need to assess the recent efforts to try to bring gas to Fairbanks and see if there's a crossover point here," Gamble said. A gas plant would be cheaper, but the cost of gas would be higher than coal over the life of the plant.
About $160 million of the $245 million is to come in the form of borrowed funds that have to be repaid.
While Gamble provided a review of the power plant to the committee, he was there to talk about the proposed UA projects in the capital budget.
The proposed capital budget, which is less than 10 percent of what it was last year, contains $16 million for the university. The proposed capital budget from Gov. Bill Walker was about $158 million for all state agencies.
The $16 million for UA would be split between deferred maintenance and an $8 million allocation to continue work on the unfinished UAF engineering building.
The Legislature has approved all the money needed for the UAA engineering building, but the UAF structure is about $31 million short.
Gamble said that the $8 million would allow the contractor to keep going until next January. That would allow two classrooms and a lab to open, about 20 to 25 percent of the building.
"The concept for completing the building right now is really up in the air," he said. "We don't really know what's going to be available this year."
He said the downside to not finishing the building is that starting and stopping construction will add to the cost. He said that could happen three times over the next several years. That is a "terrible way to do business, but, I mean, we're kind of stuck where we are."
The operating costs of the building will be about $1 million a year, funds that have yet to be identified.