WASILLA -- Matanuska Electric Association's $324 million Eklutna power plant was supposed to start operating in January, but a recent utility filing reveals it is at least three months behind schedule and possibly more.
The new Eklutna Generation Station that's risen just off the Glenn Highway marks the Palmer-based cooperative's long-awaited push for independence from other Alaska energy providers. The cooperative started buying power from Chugach Electric Association in 1950.
MEA's latest power-sharing contract with Chugach expires Dec. 31. The next day, the 171-megawatt Eklutna plant was supposed to start cranking out electricity to MEA's 60,000 meters for customers from Eagle River to the Mt. McKinley Princess Wilderness Lodge and the South Denali Visitor Center along the Parks Highway.
Now energy independence will have to wait a few more months. A Chugach Electric filing last week with the Regulatory Commission of Alaska asks the commission that oversees utilities to approve a three-month "interim power-sharing agreement" so MEA can continue to buy power from Chugach for at least the first quarter of 2015. The filing includes an option to extend for another three months.
The commission is taking comments through Nov. 12.
There are conflicting explanations circulating for the delay. MEA blames a subcontractor, but the subcontractor says the issues stem from the overall plant design.
An MEA spokeswoman said the slowdown was due to the subcontractor responsible for electrical work at the plant. The buildings, engines and piping are substantially complete but electrical work in the plant is behind schedule, spokeswoman Julie Estey said.
Estey said the electrical subcontractor, Alcan Electrical & Engineering Inc., doesn't have enough employees on the Eklutna plant job to finish in time. She described the work as largely mundane duties like pulling wires or installing terminators on cables.
But Bruce Davis, Alcan's senior project manager, blamed constantly shifting design plans that have led to delays and numerous changes in the complex job. His crews can't get ahead of the plans.
"They're having issues getting their design done," Davis said. "I've not had any issues getting enough labor to do the work."
Instead, he said, nearly every drawing on the project has been revised three, four or as many as five or six times, to include about a third of the wiring plans. Another issue could be the sheer number of contracts involved in the job: Haskell Corp. out of Washington state is the main contractor but there are several more involved.
Contractors besides Haskell include Kansas City-based Burns & McDonnell, which did the preliminary design, and Iowa-based Stanley Consultants, which served as the owner's representative on the project, Estey said.
Asked about the subcontractor's comments, Estey said the issues raised by Davis are "the kinds of things" the co-op started sorting out with Haskell once it became clear the project was falling behind.
"The thing we can all agree on is the electrical work is delayed and those delays are causing this need" for interim power, she said.
MEA has contracted with Hilcorp to buy natural gas for the plant. If the RCA approves the interim agreement, Chugach will use the gas purchased under MEA's contract, Estey said. Some of the 10 gas-powered engines at the MEA facility will be ready to start operating in January, so Chugach will also buy whatever power the Eklutna plant produces.
According to the RCA filing, Chugach will pay MEA for power at a flat rate of $13.31 per kilowatt of capacity in each engine that's operating, plus 1.39 cents per kilowatt hour for energy produced.
Chugach will charge MEA $19.54 for demand plus 1.17 cents per kilowatt hour of energy, according to an email forwarded by spokesman Phil Steyer. That doesn't translate to $6 or so in "profit" for Chugach because the energy MEA is buying also includes electricity produced from other sources.
"We are going to charge MEA just like they were our customer still, and then in turn, we are going to pay them because we are using some of their new equipment," Chugach spokeswoman Sarah Wiggers said.
Estey credited Chugach for working in partnership with MEA.
"It's complex for both parties," she said. "We appreciate the working relationship with Chugach in this transition because they are bearing some of this fluctuation. We're happy that they're willing to do this."
MEA doesn't expect rates to rise because of the delayed plant start.
The co-op had already put members on notice about a rate increase coming in January.
Rates will rise 11 or 12 percent that month, Estey said.The spike reflects MEA's new gas contract with Hilcorp.
MEA earlier announced a total rate increase of 15 to 20 percent within 18 months to account for fuel and construction costs. The January increase is part of that; additional rate increases will go toward construction and other costs, she said.
Chugach has asked the RCA to make a decision before the existing power-sales agreement contact with MEA expires on Dec. 31.
Contact Zaz Hollander at zhollander@alaskadispatch.com.