PALMER — Matanuska Electric Association says it is simply covering its legal bases, not trying to be provocative, by filing papers seeking a referendum to overturn the Mat-Su Borough Assembly’s ordinance regulating the construction of power generation plants.

“Our preference is to work with the Borough,” said Lorali Carter, the cooperative’s manager of government and corporate communications. Carter said MEA would rather work cooperatively to find a way to build power generation plants without costly delays the utility’s consultants say the ordinance would create. The Borough’s top manager, two assembly members and MEA management held talks in November about working together on an ordinance to facilitate faster construction of MEA’s proposed natural gas-fired power plant.

The Borough adopted guidelines in August for future power generation construction of 50 megawatts or greater. At the time, MEA was proposing to construct 200 megawatts of electric generation from a 100-megawatt gas-fired plant and a 100-megawatt coal-fired plant. MEA General Manager Wayne Carmony has since recommended the coal plant be postponed for at least five years. Borough Manager John Duffy has said the ordinance governing power generation was mainly aimed at concerns Borough Assembly members had with MEA’s proposed coal-fired plant. He also said he’d be willing to work with the utility on crafting a separate regulation to cover the proposed natural gas-fired plant, which has raised little public opposition.

Carter said MEA had 90 days to file a referendum asking voters to repeal the ordinance and the utility did so to cover its legal bases, not to incite the already-tense relationship it has with the Borough.

“Please believe us when we say this is only because we were running out of time,” Carter said, adding MEA did not take the action with any fanfare. “In the interest of us being able to keep all of our options open we had to file the referendum.”

Meetings with Deputy Mayor Lynne Woods, Assemblyman Pete Houston and MEA managers, and with Duffy and MEA produced positive results, Carter said. “They seemed open to future discussions.”

Woods was out of town and Houston could not be reached for comment.

Carter said both sides seem willing to work together “instead of fighting it out in the newspapers.”

MEA commissioned a 31-page report from Anchorage-based Shaw Environmental & Infrastructure Inc. to estimate the cost and scheduling impacts the Borough’s ordinance would have on the cooperative’s power generation plans. The report’s findings are summarized in a short announcement on MEA’s Web site headlined “Cost of Borough’s new permit: up to $12 million.”

In the report itself, which is also available at www.mea-.coop, the costs to MEA of complying with the Borough’s new regulations could be between $7.3 million $10.5 million and add anywhere from 2.5 to 4.5 years to its construction timetable. Those numbers include both a coal and gas plant, and MEA has since backed off its immediate plans for a coal plant. The $12 million on MEA’s Web site is Shaw’s “worst-case” scenario and estimates for interest over a 30-year life cycle for a coal plant and 20-year life cycle for a gas plant. For a gas-fired plant only, Shaw estimates permit application and other fixed costs ranging from $4 million to $5.5 million.

Relations between MEA and the Borough have been more than a little rocky, culminating in August when the Borough Assembly passed its ordinance regulating power plants. At that time MEA officials proclaimed the assembly had killed MEA’s chances of building power plants.

Now both sides are more receptive to working out a deal.

“The Borough is willing to negotiate and talk with MEA [officials] and ask for their input on a ordinance on a natural gas-fired plant,” Borough spokeswoman Patty Sullivan said. The Borough estimates it would cost as much as $5 million for MEA to obtain a power plant permit, but maintains that’s the cost of taking on a project like a power plant.

“The Borough’s role is to make sure our quality of life is protected,” Sullivan said. “It does cost money to study these things.”

Sullivan compared MEA’s situation to the $10 million over time the Borough will have to pay to study the impacts of a new rail spur to Port MacKenzie, but said study of such a huge project is necessary. Power plants sometimes cause negative impacts that must be studied, planned for and mitigated, she said.

Another reason the Borough should look at the plant is the structure of the state regulatory agency, which has no mandate to study things like cost-effectiveness, Sullivan said. Unlike other states, Alaska’s regulatory board “doesn’t determine whether the power plant is effective until it’s built.”

The Borough clerk has two weeks from filing to determine whether the referendum meets guidelines set by the Borough and the state for a qualified referendum. MEA filed its petition Nov. 26.

Contact John R. Moses at john.moses@frontiersman.com or call 352-2270.