Opinion ID: 2585635
Heading Depth: 4
Heading Rank: 2

Heading: Methodology of Klawock's expert witness, Uhlenkott

Text: The superior court's original remand order required the commission to determine how the loss of Klawock would affect THREA. The parties called various experts on this question. The commission relied on one of Klawock's experts in particular, Loren Uhlenkott, to support its conclusion that the federal purpose of the Rural Electrification Act would not be frustrated if THREA lost the Klawock service area and to support its original conclusion that the public interest would not be served by allowing THREA to continue providing electrical service in Klawock. The superior court upheld the commission's reliance on Uhlenkott. THREA contests this ruling on appeal. THREA claims that in predicting that THREA would be able to survive financially without Klawock in its service area, Uhlenkott relied on an analytical model that was so flawed as to render his expert opinions fundamentally unreliable. Uhlenkott compared THREA's actual situation, with Klawock included in its service area, to a hypothetical situation adjusted to project THREA's operations without Klawock. In building this analytical model, Uhlenkott adjusted many variables relating to THREA's rate base, most importantly the desired rate of return. THREA attacks this approach because it changed several variables at once. But according to Uhlenkott, he designed his hypothetical model to account for real world adjustments THREA would be capable of making to cope with the loss of its profitable Klawock service area. In contrast, THREA's expert, Eicher, assumed that if THREA lost Klawock, it would make no changes to adapt to offset the loss or ameliorate its financial situation  that it would simply continue to operate just as it had with Klawock. THREA's challenge to the reliability of Uhlenkott's model posits the validity of Eicher's approach. But it could just as easily be argued that the flawed approach is Eicher's. In reality, though, neither approach seems so inherently flawed as to be fundamentally unreliable. Both experts presented substantial, albeit opposing, evidence concerning THREA's financial ability to weather the loss of Klawock. The commission had the task of determining the strengths of their competing views and assessing their relative credibility. The commission's ultimate decision to favor Uhlenkott's testimony over Eicher's was not clearly erroneous.