Growing pains

Index

With demand increasing in the early 1950's, AEL&P faced the need for more generating capacity. However, the large mines that once could be counted on for additional supplies of electrical power had closed down. The A.J. Gold Mining Company now owned all of the hydroelectric facilities and was selling all their electrical output to AEL&P, but these facilities could no longer provide the power Juneau needed.

With this in mind, the company decided to purchase and install a new 1,200 KW Enterprise diesel generator at the Gold Creek fossil plant. This was done in 1952, and a second diesel generator was purchased and installed in 1954.

These installations marked a milestone in the company's history; they required the first outside borrowing in the company's history. For the 58 years prior, all capital expenditures had been paid for by AEL&P profits or from a cash reserve fund built up for that purpose. Unfortunately, however, in 1934 the Revenue Department forced AEL&P to dissolve the reserve fund, and it had been distributed as dividends to shareholders. With no reserve fund to draw upon, AEL&P was forced to negotiate the first loans in its history.

Another watershed event was the fight with A.J. Industries, the corporate successor to the A.J. Gold Mining Company, over the renewal of AEL&P's exclusive franchise to supply power to the city.

The City of Juneau had granted AEL&P an exclusive 50-year franchise to distribute electrical power to the city and residents of Juneau in 1908. When the franchise expired in 1958, the city did not immediately renew it. This set the stage for AEL&P's next big challenge: renewal of AEL&P's franchise.

In 1961 the management of AEL&P sought a new franchise from the city, but the company ran into stiff opposition from A.J. Industries.

A.J. Industries had evolved by this time into a California based conglomerate. Managing its aging Juneau hydroelectric facilities from a distance was becoming ever more burdensome, and it decided that the best course of action was for the City of Juneau to buy A.J.'s hydro facilities and form a municipal electric utility. Therefore, A.J. Industries saw the renewal of AEL&P's franchise as a fatal blow to these plans, and it vigorously opposed the renewal.

An angry and bitter exchange between the two companies filled the pages of the Alaskan Empire throughout the fall of 1961. Claims and counterclaims were flung into the fray by both sides. Each charged that the other was gouging the consumers of Juneau through excessively high rates.

The matter was finally settled when the question was put before the voters. The citizens of Juneau decided to side with their local utility, and granted the company the right to continue its franchise for an additional 20 years. The city also chose not to buy A.J. Industries' facilities.

A.J. Industries, it seemed, was no longer viewed by the townsfolk as a part of Juneau. Instead it was viewed as a California based conglomerate, an outsider, trying to destroy the utility that had grown with Juneau. And its hydro facilities, the tremendous engineering feats of the Treadwell Group, and Bart Thane and his Alaska Gastineau Mining Company, were no longer considered marvels, just aging electrical generating plants the city didn't want.

A few years later, in 1966, AEL&P found itself wrestling with a governmental body again, only this time it was the Federal Government instead of the city.

Juneau's Federal Building was new and the General Services Administration decided it needed a parking lot. The only land the GSA felt was suitable happened to be right across Gold Creek, the site of AEL&P's pole yard. AEL&P soon found itself in a legal battle it couldn't win.

Acting on its decision, the GSA contacted AEL&P and began to negotiate the purchase of the property. Unfortunately, the two parties were unable to agree on terms. Tiring of the prolonged negotiations, the Federal Government exercised its legal right to acquire property and the GSA filed condemnation proceedings in Federal Court, thus forcing AEL&P to sell it the property. As compensation, it gave AEL&P a monetary settlement as well as property in Lemon Creek at the intersection of Glacier Highway and Tonsgard Court.

The property at Lemon Creek was the perfect central location for the site of the Operational Facilities of AEL&P. From the very beginning, when this site was located, the wheels began to turn in the minds of the managers and owners to construct the warehouse, engineering and administration offices on the same site. But it wasn't until 1992 that the plan all came together. The conceptual design for the buildings was done by Black & Veatch Engineering Architects of Kansas City with Jensen Douglas Architects, Inc. of Juneau doing the final designs and completing the project.

Progress was right on schedule. June 9, 1992 saw the completion of Phase I, the prep site, with an employee picnic at the Lemon Creek site. The site sat idle through the winter and in the spring of 1993 it was once again humming with the noise of construction. Phase II started with the unheated warehousing area. Progress on this phase is on track under the watchful eye of Corry Hildenbrand, Project Manager.

Phase III will be next with the heated warehouse and office facilities. At this point, all AEL&P Operations & Engineering will be at one central location. The project will continue as the financing becomes available. The company projects that by the year 1999 all the offices and warehousing functions will be at Lemon Creek.

By the late 1960's, the Snettisham Hydroelectric Project was on it way to becoming a reality. A federal project, it promised abundant, reliable, inexpensive electrical power for all of Juneau for the next century. A.J. Industries realized it would soon be left with old, redundant hydroelectric plants that would no longer generate any substantial revenue. Snettisham's power would be cheaper than A.J.'s and AEL&P would immediately switch all of its power purchases over to Snettisham when the project came on-line.

This realization helped forge a second and more permanent link between AEL&P and the gold mining companies of Juneau's past. "For in 1972, as the Snettisham Hydroelectric Project was nearing completion, A.J. Industries sold its hydro facilities to AEL&P." It's mining claims were sold to AEL&P and the City and Borough of Juneau.

Four years later, in September of 1976, AEL&P sold its office building at Second and Franklin to Southeast Newspapers Corporation, owner of the Juneau Empire.

The sale of its office building brought to a close a difficult period of growth and adjustment for Alaska Light and Power, but it was now a much stronger company and ready for some major changes.