North of 60 Mining News - The mining newspaper for Alaska and Canada's North

Alaska's Usibelli Coal Mine began talks in January with Matanuska Electric Association about the possible construction of a coal-fired power plant. Usibelli is looking for a customer in the Railbelt and MEA serves nearly 50,000 people in the Matanuska and Susitna valleys north of Anchorage. The Mat-Su location would be an alternative to Usibelli's proposed 200 megawatt Emma Creek project, a power plant close to the mine at Healy.

"If our talks are successful, we could have a plant in service as early as January 2015," MEA spokesman Michael Pauley said in a release Feb. 2. "MEA serves the fastest-growing area of Alaska. This is the only area of the Railbelt without sufficient local generation to serve its own load. For both economic and reliability reasons, it is time we make provisions for our own needs. ... Fuel diversity is a key element motivating these discussions. The specter of dwindling natural gas supplies and increasing prices for gas are real motivations. Given Alaska's vast coal reserves, with coal there would be no doubt about a reliable supply and more stable price."

"This is a step forward," Usibelli's vice president for business development, Steve Denton, told Mining News. "The new power plant is pretty high on our agenda, as happens any time a utility is interested in actually building a power plant. We'll just keep talking towards scoping out the project; the discussions are in a very early stage."

MEA currently buys power from Chugach Electric Association, but does not plan to renew its contract when it expires in 2014. Coal constitutes 91 percent of Alaska's energy resources, with 171 billion tons identified in the state.