This Day In History: Nov. 10 1998 – “Board funds coal plant”

Board funds coal plant 
Nov. 10 1998 / Vol. 18 No. 9
David Costello / Sun Star

University of Alaska Board of Regents vetoed funding for a $47.6 million experimental power plant last week and then reversed their decision in an emergency meeting one day later.

Regents initially vetoed a $12.53 million bond sale on Wednesday after raising concerns that the Clean Coal Demonstration Project is too risky for the University of Alaska Fairbanks. The vote threatened completion of the partially finished plant and contradicted a BOR vote one year earlier supporting the project.

“I don’t know of any other projects that are being subsidized to that extent,” said student regent Annette Nelson-Wright, who voted against the sale. “No one could tell me why that project was so special.”

Proponents of the CCDP hope the new plant will generate electricity, cash and research for the Fairbanks campus by converting Alaska’s sub-bituminous coal into a clean-burning liquid fuel.

While scientists have concocted batches of the fuel in the past using little more than water, heat and pressure, the experiment contains risks. No one in Alaska has ever continuously processed coal water for use in an electric power plant.

“That’s the risk,” said CCDP Project Manager Mike Rukhaus, about the 4-ton-per-hour liquid coal appetite of the plant’s new tractor-trailer-sized generator. “But if it’s a success UAF is really on the map of coal energy research.”

Regents discussed selling the technology to foreign countries. As a replacement for some grades of diesel fuel, the cleaner burning coal could reduce waste emissions in older power plants.

In addition to the generator, UAF will also receive a boiler and two buildings under a partnership among UAF, Usibelli Coal, the Department of Energy and a variety of contractors and investors.

The DOE is matching every dollar spent on the project, and with grants and donations from other partners, UAF will only pay $14.4 million of the $47.6 million project.

“It’s a win-win situation,” said Rukhaus. “With $10 million in funding we end up with a $20 million facility. If nothing else, we have a power generator facility that we need anyway.”

If the coal fuel can’t be manufactured, plant operators can still use diesel in the 18 cylinder generator to supplement UAF’s rising energy needs, said Rukhaus.

After Wednesday’s vote, UA President Mark Hamilton and leaders of the CCDP told regents in a letter that cutting short the project could cost UAF $11 million in broken contracts, unusable equipment, and a cancellation of a 30-month donation of Usibelli coal.

Contractors have already built a concrete platform for the generator and air tunnels to heat the new buildings. “I can identify with your concerns. Good God, that’s a lot of money,” saud Hamilton, responding to questions by regent Sharon Gagnon. “Quite frankly there was no way out of this without disgracing the university–that weighs a lot.”

Regents reconvened for an emergency session on Thursday afternoon. Before approving the CCDP bond sale, Nelson-Wright asked whether the cost increases could threaten UAF’s budget.

According to UAF project coordinator Greg Krier, the project will require an additional $5 million for cost increases and unplanned expenses.

However, other partners will repay a portion of the money. The CCDP is scheduled to begin operation in late 1999.

“It’s a very complicated issue with big numbers. Trying to do it on audio conference was not a good choice,” said Vice President of UA public relation Wendy Redman. “In retrospect we said we’ll never do it again on an issue this complicated.”

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