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Pelican seeking to take over electric utility from Kake Tribal

Posted: August 23, 2011 - 9:48pm

The city of Pelican is trying to throw off the yoke of its electric utility provider, the long-troubled Kake Tribal Corp.

After years of being served by Kake Tribal, the city of Pelican is trying to get the Regulatory Commission of Alaska to revoke Kake Tribal’s “Certificate of Public Convenience and Necessity,” the state authority for Kake Tribal’s electric monopoly in the area.

The city said Kake Tribal is “neither fit or able” to provide service, and thus does not meet the commission’s requirements for holding a certificate.

Pelican wants to hold the certificate.

Kake Tribal Corp. President Vicki Wolfe did not return repeated phone calls over several days.

RCA spokeswoman Ann Wilde said a successful challenge to a certificate was “fairly rare.”

Transfers aren’t unusual, she said, but are typically a business transaction between two companies.

A recent challenge to the utility on Adak began as a contest to a certificate, but eventually an agreement was reached among all parties.

Pelican provided a long list of grievances against Kake Tribal’s management of the utility, including the accusation that it has “willfully violated the orders of the commission.”

Further, Pelican said Kake Tribal is not financially sound itself, and has intermingled Pelican utility receipts with its corporate finances, making it difficult to determine the actual state of the Pelican utilities.

Kake Tribal emerged from bankruptcy in 2004, and now appears to be in poor financial condition again, Pelican said in its filings with the RCA. Kake Tribal has not yet responded to the decertification request other than to ask for an extension of time to respond.

Kake Tribal purchased the Pelican Seafoods plant, and its associated utility, in 1996. It had difficulty operating the fish plant successfully, and in 2008 sold it to Ed Bahrt & Associates.

Bahrt, too, failed to make a go of it, and after a lengthy foreclosure process Kake Tribal wound up owning the plant again.

Pelican claimed in RCA filings that some of the financial difficulties stem from unpaid Pelican Seafoods electric bills.

State Department of Environmental Conservation officials warned against cutting off power to the plant, which risked a potentially dangerous uncontrolled release of ammonia.

Kake Tribal may have been considered a responsible party in that event, state officials warned.

Those actions, in which Kake Tribal acted to protect its own business interests, and not those of Pelican Utility District customers show that Kake Tribal is not able to operate the utility, Pelican said.

Further, the financial records that Pelican has been able to obtain from Kake show that it is operating the utility at a deficit, and has no business plan for improving its finances.

Wilde said it would be unusual for a certificate to be revoked, especially if there is no other utility available.

“The commission would be reluctant to take a certificate away from a functioning utility if there wasn’t another utility to provide the service,” she said.

Pelican Mayor Clint Bean said the city would seek to have the utility’s certificate transferred to Pelican.

• Contact reporter Pat Forgey at 523-2250 or at patrick.forgey@juneauempire.com.

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