New Anchorage power plant improves efficiency and reliability while increasing rates

Plant Superintendent Nat Lewis shows off one of Plant 2A’s new turbines. (Photo by Henry Leasia/ Alaska Public Media)

Last year, Municipal Light & Power completed a $300 million overhaul of their power plant in East Anchorage. The expansion aims to increase efficiency, reliability and environmental quality by replacing old technology.

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During a recent media tour of the new facility, Plant 2A Superintendent Nat Lewis showed off the new Siemens SST-400 turbine. It runs on steam generated from the excess heat of the plant’s gas turbines.

“It can make about 29 megawatts of power, max output,” Lewis said. “And it’s a really highly modern and efficient unit.”

ML&P estimates that the efficiency improvements will reduce fuel costs by more than $8 million annually. General Manager Mark Johnston said that they are still figuring out just how efficient the plant could be.

“We have technology here that allows us to kind of push the limits of what the equipment is actually able to produce,” Johnston said. “And in the last few months that’s what we’ve been doing is figuring out how we can run it better.”

Johnston added that the decision to update the plant was not just to improve efficiency, but long-term reliability as well.

“At some point we knew that if we continue to utilize that technology, customers might flip the switch on and the lights wouldn’t go on in their house because we wouldn’t be able to provide the electricity,” Johnston said.

But the improvements come at a cost for ML&P’s customers.

In December of 2016, the company filed a case with the Regulatory Commission of Alaska to increase their rates to offset the cost of the new plant. The RCA approved an interim rate increase that will raise the average customer’s monthly bill by 19 percent.

“We recognize that it is an increase, and a significant one, and it can be a hardship to some of the customers,” Johnston said. “But we believe that the investment was necessary in order to ensure power into the future.”

ML&P wants to gradually increase rates over time to lessen the shock to consumers, but the RCA will make the final decision about rates in November.

Johnston said that over time customers will spend less money on power than they would have if ML&P had tried to continue using equipment past its designed life span. But for the most part ML&P was concerned with creating a more reliable power plant.