Anchorage Daily News

The city-owned utility that supplies power to Adak is not fit to provide electricity and will lose its certification, the Regulatory Commission of Alaska said Tuesday.

The commission will put the revocation on hold until a new company can be found to run the electric company, according to Grace Salazar, commission spokeswoman.

An RCA investigation found that Adak Electric Utility was plagued with safety violations, lax billing practices and poor debt management. There were rusted meters and dangerous, poorly maintained transformers. Power outages in Adak had become common, and, the RCA report said, there was "evidence of financial mismanagement."

"Adak Electric is not fit, willing, and able, managerially, technically, or financially, to provide electric utility service," the report said.

The company's difficulties were "brought on by a completely avoidable combination of extremely poor cash management practices, a lack of competent management oversight, and negligent planning," the commission found.

The announcement was the latest chapter in a protracted utility drama in Adak, a community of fewer than 300 people in the Aleutian Islands. Earlier this month the residents were hit with periodic blackouts after the city ran low on fuel to power generators and couldn't buy more.

Adak owes money to Aleut Corp., which owns the supply company for the city's fuel. Adak Fisheries, a local fish processor, owes a substantial sum of money to the city for electric bills, which is one reason the city can't afford fuel. Aleut and Adak entered into an agreement last week for the corporation to supply fuel for 10 days while the city looks for money to pay for it, said Stephen Howell, a corporation spokesman.

One contingency of the agreement was that city officials had to agree not to publicly disparage the corporation that was supplying the fuel, Howell said. Protesting the agreement, City Manager Steve Hines resigned, along with the city clerk and one City Council member. Hines could not be reached for comment.

The city's mayor, Rod Whitehead, was commercial fishing and could not be reached. The vice mayor, Chuck Mohn, said he was fairly certain the city would come up with a solution to continue providing electricity.

"I am still trying to get all up to speed because the city manager was handling it," he said.

Find Julia O'Malley online at adn.com/contact/jomalley or call 257-4591.

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