Utility gets more time on bankruptcy plan

A small Southwest Alaska electric cooperative has been given more time to file an amended bankruptcy reorganization plan.

In a March 28 hearing in Anchorage, U.S. Bankruptcy Judge Donald MacDonald “reluctantly” granted Naknek Electric Association’s motion to be given until June 29 to file the plan.

The co-op in September 2010 filed for Chapter 11 protection from creditors due to complications with a geothermal drilling program.

Naknek Electric, which serves King Salmon and other villages in the Bristol Bay area, embarked on an exploratory geothermal campaign in an effort to find an alternative to burning expensive diesel to generate power.

The co-op said that by the time it filed for bankruptcy, it had incurred about $40 million of debt that was “in one way or another associated with the geothermal project.”

In its initial reorganization plan, filed in September 2011, the co-op proposed possibly selling its drilling rig and discontinuing the geothermal program.

But co-op representatives have continued searching for financing to keep the program alive. In late January, they asked a state legislative committee for $3.2 million to complete the one troublesome geothermal well drilled so far.

—Wesley Loy