Matherly should rescind Wilken nomination for Fairbanks utility board
Fairbanks Mayor Jim Matherly should withdraw his nomination of former state Sen. Gary Wilken to serve on the board of the Interior Gas Utility as a replacement for engineer Frank Abegg, who has resigned.
The Interior Gas Utility needs to build confidence with the public and create a solid economic plan. It can't afford to have a conflict of interest or the appearance of a conflict of interest.
I respect Wilken, who has a long career in public service and business, but this is not the time for him to be on the IGU board.
I respect Abegg and take him seriously when he says he has "grave fears" that the local gas utility is "on a path to failure." The big reasons he cites are the high cost of the purchase of the gas company Pentex from the state and the uncertainty of future gas supplies and costs.
This is the wrong time for Abegg to leave the IGU board. He said he can't support the actions the utility has taken, but since the agency has rules saying the board must speak with one voice, he has left the volunteer position.
In his resignation letter, Abegg charged that the Alaska Industrial Development and Export Authority used its power to force the Fairbanks utility into a bad deal, creating a "very precarious financial situation."
Abegg has a head for numbers. If he is correct, the IGU is in serious trouble with a debt load it can't handle and AIDEA is the prime suspect. "They are not being held accountable for their ineffective, inefficient and heavy-handed actions," Abegg wrote.
Wilken, a member of the AIDEA board since 2010, has resigned from that state agency so that Matherly could appoint him to the IGU board to replace Abegg. Dana Pruhs, a brother of Fairbanks City Council member David Pruhs, is chairman of the AIDEA board.
Abegg charges that AIDEA has exacted terms that are a "violation of fiduciary duty to the Fairbanks community."
It is an obvious conflict of interest to have Wilken go from the seller to the purchaser at this time, if AIDEA and IGU are to make a convincing case that Abegg is wrong and that IGU is viable.
"The high cost of the Pentex purchase will likely delay gas distribution system expansion in the poor air quality areas along Badger Road for decades due to limited financial resources," Abegg wrote.
AIDEA must answer the questions raised by Abegg instead of pretending that all is well. The governor, state legislators and city and borough officials need to dig into this and find solutions.
The deal with AIDEA, which Abegg says will cost $62 million, closed June 13, with Abegg dissenting from the majority position of the IGU board.
Abegg says that AIDEA acted as both seller and banker and dealt unfairly with IGU. He contends that the purchase price of the utility was too high, the gas supply is not a sure thing and the gas is too costly.
On June 14, an AIDEA press release quoted Wilken as praising the completion of the IGU deal.
“We made it to the 1-yard line last year, and now we have finally brought it into the end zone," Wilken was quoted as saying. “I am profoundly honored to have been part of this years-long effort that is now poised to bring such tremendous benefit not only to this generation, but for generations to come."
Abegg, an engineer with decades of experience with local electric utilities, has brought forward serious matters about how this generation and those to follow will pay the bills and clean the air. Everyone in Fairbanks has an interest in getting this right.
Wilken's appointment to the IGU board at this time won't resolve these questions and it gives the appearance of a heavy-handed move to silence a critic.
If Matherly doesn't withdraw the nomination, it should be rejected by the Fairbanks City Council.