Chilkat Valley News - Serving Haines and Klukwan, Alaska since 1966


Power issues hurdle for pellet plant plan


Power supply issues have sent plans for a Chilkoot Indian Association-owned wood pellet production plant back to the drawing board.

A feasibility study commissioned by the CIA and conducted by Pellergy LLC and the Vermont Wood Pellet Company found year-round use of the pellet mill would stress Alaska Power & Telephone’s power supply capabilities.

“We had everything planned out, but then that sort of threw a wrench into it, because you can’t be profitable if you’re only allowed to run a company eight months out of the year. You need a full 12 months to clear your profit,” said tribal administrator Dave Berry.

The small-scale wood pellet facility envisioned in the feasibility study would require 300 to 800 kilowatts of power during operation. Such a demand would push AP&T past its hydropower limits in winter months, said AP&T power manager Danny Gonce.

AP&T provides electricity derived from two different kinds of hydropower: lake-fed and stream-fed. The stream-fed power is inoperative in winter months when rivers freeze over, meaning the company is dependent on power produced by Goat Lake, which maxes out at 4,000 kilowatts. When AP&T reaches its limit, it uses diesel generators to continue supplying power.

Putting excessive strain on AP&T’s system could adversely affect the company’s other customers, Berry and Gonce said.

“We don’t want to run our facility to the point that it causes AP&T to kick on their diesel generators, because potentially that can cause the price of electricity for you and I to go up,” Berry said.

Berry said CIA is looking into alternative sources of energy for the project, but he wouldn’t discuss those at this time. He said a decision regarding an alternative power source would probably be made within the year.

Gonce said he has heard talk of co-generation as an alternative to hooking up to AP&T’s power grid. That would involve burning some of the imported wood and converting it – via steam or some other method – into electricity, Gonce said.

Given an adequate power supply, an economically viable small-scale wood pellet operation could exist in Haines, feasibility study author Andrew Boutin concluded.

Boutin recommended construction of a 1.5-ton-per-hour pellet mill operation initially supplied by beetle-killed white spruce in the Yukon.

Boutin also recommended CIA invest in marketing, sales, and distribution agreements in Juneau because of the potential for immediate sales to the Sealaska Corporation.

Berry hopes to sell the wood pellets to other Southeast communities, Whitehorse, Y.T. and interior Alaska, as pellets currently are shipped up from Tacoma, Wash.

CIA currently heats two apartment buildings in Chilkoot Estates with pellets and also will burn them in a new community service center on Third Avenue.

A wood pellet boiler recently was installed at Haines Senior Center as a pilot project by the Haines Borough.

The CIA would build the pellet plant at 1 Mile Haines Highway for $1 to $4 million.