The Matanuska Electric Association board of directors unanimously voted to begin the bidding process to design and construct a new natural gas fired power plant in Eklutna.

"This is an important milestone for MEA in our local generation planning," said Lois Lester, MEA board president. "I can tell you that it has taken a lot of diligent work over the past five years to get to this point."

The bid calls for the development of a 180-megawatt natural gas power plant, with one of two format options.

The first option is an Engineer, Procure, and Construct format. Under this option MEA would award a design and build contract to a developer and then take over the operation of the facility upon completion.

The second option is for an Independent Power Producer, meaning a bidder will develop, operate and maintain the power plant, and then sell the output to MEA on an exclusive basis.

Under the IPP option, the developer is responsible for the initial construction cost. MEA would repay the cost over time as it purchases electricity from the facility.

MEA began developing plans to stop purchasing wholesale electricity from Chugach Electric in 2006 and instead build its own power plant. The plan calls for the new facility to be operational by Jan. 1, 2015, the day after MEA's contract with Chugach expires.

In a June 2007 advisory vote, MEA members supported the proposal to build a power plant by a 5-to-1 margin.

MEA selected a site near Palmer to construct the power plant, but was forced to abandon it due to a strict permitting law passed by the Matanuska-Susitna Borough Assembly in July 2007.

The utility then looked for property within the Municipality of Anchorage, selecting a parcel in Eklutna. MEA signed a memorandum of understanding with Eklutna Inc., owner of the land, for the possible acquisition of nearly 70 acres of property in June 2008.

In February, MEA's board of directors approved the purchase of the property for approximately $2.7 million, pending a successful rezone.

The Anchorage Assembly voted May 12 to approve a zoning change for the parcel.

MEA proposes to use 32 acres for the power plant and the remainder will serve as a natural noise and visual buffer.

The bid offering is part of an aggressive timeline set forth by the utility for securing a source of power.

"We are working to secure a power supply after our contract with Chugach ends," MEA Interim General Manager Joe Griffith said. "At this time, MEA is keeping all power supply options on the table by considering power purchase agreements with other utilities, as well as moving forward with local generation plans. Our main concern remains which option, or combination of options, will be the lowest cost to our members."

Potential bidders are required to attend a mandatory pre-bid meeting at MEA in early November. Final proposals are due Jan. 29, 2010. MEA and its consultant will then begin reviewing the proposals and plans to award the bid at the end of May 2010.

MEA hopes to have the plant completed and at normal operational capacity by November 2014.

Reach the reporter at darrell.breese.@alaskastar.com.