Judge OKs $175,000 co-op settlement

A bankruptcy judge has approved a $175,000 settlement between Naknek Electric Association and the Bristol Bay Borough.

The small Southwest Alaska electric cooperative is operating under Chapter 11 bankruptcy protection due to problems with a costly geothermal drilling program.

The co-op sued the borough, alleging the topdrive unit of its National 1320 drilling rig had been damaged during unloading at the borough port in 2009.

Naknek Electric said it incurred nearly $263,000 in repair costs for the topdrive, and that its total damages exceeded $1 million when counting “consequential damages” such as work delays.

Ultimately, however, the two sides agreed on $175,000 settlement, and U.S. Bankruptcy Judge Donald MacDonald of Anchorage approved the deal on Feb. 7.

The judge authorized Naknek Electric to use the money in part to pay expenses owed to oilfield services company Baker Hughes.

—Wesley Loy