Struggling co-op seeks geothermal funds

Naknek Electric Association is continuing its hunt for funding to salvage its troubled geothermal drilling campaign.

Representatives of the small Southwest Alaska power cooperative, now operating under Chapter 11 bankruptcy protection from creditors, in late January asked state legislators for $3.2 million to sidetrack a clogged geothermal well.

Papers filed Feb. 27 in U.S. Bankruptcy Court in Anchorage indicate the co-op also is working with local village councils to request a “resource confirmation grant” from the Bristol Bay Economic Development Corp.

BBEDC is a Dillingham-based nonprofit that holds lucrative Bering Sea commercial fishing rights under a federal program designed to benefit Western Alaska villages.

Naknek Electric says it must finish the well, the only one it has drilled so far, to confirm the strength of its geothermal prospect near the village of King Salmon.

The co-op is exploring geothermal as a way to avoid burning expensive diesel to generate power.

Naknek Electric had faced a March 16 deadline to file a bankruptcy reorganization plan, putting pressure on the co-op to find a way to both satisfy creditors and keep the geothermal program alive. But on Feb. 29, U.S. Bankruptcy Judge Donald MacDonald entered an order extending the deadline indefinitely.

—Wesley Loy