HomeMy WebLinkAboutRes 2012-06 Agreement AIDEA-AEA working capital loansMEMORANDUM
TO: Board of Directors
Alaska Energy Authority
FROM : Sara Fisher-Goad ~,.A"' \
Executive Director (fJJ ~
DATE : December 6, 2012
SUBJECT: Resolution No . 20 12-06
Agreement between AEA and AIDEA related to AEA project work ing capita l
loans and personnel services .
The attached Resolution No. 2012-06 (Resolution) accomplishes two primary goals . First, it
authorizes AEA to borrow up to $7.5 million from the Alaska Industrial Development and Export
Authority (AIDEA) for working capital needs arising from AEA projects . Many of AEA's project
expenditures are made on a reimbursement basis -amounts must be pa id in order to collect
funds from the f inal payment source (State, Federal or other). Amounts AEA borrows from
AIDEA must be repaid after AEA receives reimbursement funds , and within one year. Second ,
the Resolution authorizes AEA to obtain from AIDEA personnel services , overhead expenses ,
administrative support, and other related services AIDEA provides to AEA , and to enter
appropriate financial arrangements for AEA to reimburse AIDEA for those serv ices .
Resolution No . 2012-06 also repeals and will replace Resolut ion No. 2001-03 which authorizes
AIDEA to lend of up to $2 .5 million to AEA for expenses arising from AEA owned, operated and
maintained power projects , and from power project and bulk fuel fac ilities to wh ich AEA
participates in development or construction . Resolution No. 2001-03 also authorizes AIDEA to
provide administrat ive and overhead support and services to AEA and for AEA to reimburse
AIDEA for those services .
Adopting Resolution No . 2012-06 is appropriate and desirable because the number and size of
AEA's grant, energy development, and energy conservation programs , and AEA's other
statutory authorities and responsibilities have significantly expanded after Resolut ion 2001-03
was approved in 2001 . The e xpansion in AEA's program activity has increased AEA's working
capital needs for projects. The availab le borrowing amount of $2 .5 m illion from AIDEA is no
longer adequate for AEA to efficiently manage its programs . The expansion in AEA 's program
activity has also increased the types of projects for which AEA has working cap ital needs.
The Resolution increases the maximum aggregate amount AIDEA may lend to AEA to $7 .5
million. Staff anticipates that $5 million w ill generally be the maximum amount required , but
occas ionally one or m.ore large project bills must be paid which w ill increase the amount
borrowed over $5 million . Amounts borrowed from AIDEA are repa id regu larly by AEA , typ ically
within one month .
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813 West Northern Lig hts Bou levard Anchorage, Alaska 99503 T 907 .77 1.3 000 Toll Free (Alaska Only) 888 .300 .8534 F 907.771 .3044
The Resolution also expands the types of projects for which AIDEA may lend amounts to AEA.
The Resolution provides working capital for all AEA project needs, and is not limited to power
projects AEA owns, operates and maintains, or from power projects and bulk fuel facilities to
which AEA participates in development or construction. The additional types of projects may
include rural power system upgrades, alternative energy and efficiency, conservation,
transmission line extensions and interties, and other similar projects. Loans for the Susitna-
Watana Hydro Electric project are not expected to be obtained under the Resolution.
The Resolution also repeals Resolution No. 2001-03.
Staff recommends approval of Resolution No. 2012-06.
ALASKA ENERGY AUTHORITY
RESOLUTION NO. 2012-06
RESOLUTION OF THE ALASKA ENERGY AUTHORITY
AUTHORIZING BORROWING FROM THE ALASKA
INDUSTRIAL DEVELOPMENT AND EXPORT AUTHORITY
RELATED TO WORKING CAPITAL FOR PROJECTS,
AUTHORIZING AGREEMENTS RELATED TO PERSONNEL
SERVICES, , REPEALING RESOLUTION NO. 2001-03, AND
PROVIDING FOR RELATED MATTERS
WHEREAS, Resolution No. 2001-03 authorizes the Alaska Energy Authority (“AEA”) to
borrow amounts from, and arrange for repayment to, the Alaska Industrial Development and
Export Authority (“AIDEA”) related to working capital for power projects owned, operated, or
maintained by AEA or for power projects or bulk fuel facilities to which AEA participates in
development or construction, subject to certain restrictions, including that the unpaid balance of
loans at any time may not exceed, in the aggregate, $2,500,000;
WHEREAS, Resolution No. 2001-03 also authorizes AEA to enter into appropriate
financial arrangements with AIDEA for the payment for personnel services, overhead expenses,
administrative support, and other related services AIDEA provides to AEA, and provides for
related matters;
WHEREAS, the number and size of AEA’s energy development, conservation and grant
programs, and AEA’s statutory authorities and responsibilities have expanded since adoption of
Resolution No. 2001-03, including AEA programs regarding rural power systems, bulk fuel
facilities, waste heat, energy grants, energy development, energy conservation, energy
efficiency, and energy audits;
WHEREAS, the expansion of AEA programs, statutory authorities and responsibilities
has increased the scope of the types of projects and the amounts for which AEA has working
capital needs;
WHEREAS, AIDEA has the authority to make loans, and AEA has the authority to
accept loans, to finance AEA’s working capital needs related to projects;
WHEREAS, AEA continues to need, and AIDEA continues to provide to AEA, personnel
services, overhead, administrative support, and other related services, which require the
continuation of appropriate financial arrangements between AEA and AIDEA; and
WHEREAS, it is appropriate and necessary or desirable to repeal and replace
Resolution No. 2001-03 with this Resolution No. 2012-06 to increase the maximum aggregate
Resolution No. 2012-06 Page 2
loan amount available from AIDEA to AEA related to working capital needs for projects, and to
continue to authorize agreements to establish appropriate financial arrangements between AEA
and AIDEA related to personnel services, overhead, administrative support, and other related
services.
NOW, THEREFORE, BE IT RESOLVED BY THE ALASKA ENERGY AUTHORITY AS
FOLLOWS:
Section 1. The Executive Director of AEA and any Deputy Director of AEA
designated by the Executive Director are authorized to enter into commitments, agreements,
and financial arrangements on behalf of AEA to obtain and provide for the repayment of loans
made by AIDEA to AEA for the purpose of paying working capital or other expenses of AEA
relating to projects, subject to limitations established in Section 3 of this Resolution.
Section 2. The Executive Director of AEA and any Deputy Director of AEA
designated by the Executive Director are authorized to enter into appropriate financial
arrangements on behalf of AEA to reimburse AIDEA for personnel services, overhead
expenses, administrative support, and other related services AIDEA provides to AEA.
Section 3. The unpaid balance of loans described in Section 1 of this Resolution
shall not at any time exceed, in the aggregate, $7,500,000. A loan described in Section 1 of this
Resolution shall not bear interest. AEA shall identify for each loan described in Section 1 of this
Resolution, any designated sources of repayment of the loan from amounts to be received by
AEA from the State of Alaska or from other sources that, in the opinion of the Executive Director
or designated Deputy Director, will provide adequate assurance of repayment of the loan. Each
loan described in Section 1 of this Resolution shall mature and be payable in full no later than
the earlier to occur of (a) twelve months after the date of disbursement of the amount loaned, or
(b) as soon as practicable after sufficient amounts from the identified sources of repayment
described in the preceding sentence are available to repay the loan.
Section 4. All loans, commitments, agreements, and financial arrangements
between AIDEA and AEA that comply with the terms of this Resolution are hereby ratified,
affirmed, and approved, including all outstanding loans, commitments, agreements, and
financial arrangements between AIDEA and AEA made under Resolution No. 2001-03.
Section 5. Resolution No. 2001-03 is repealed effective when this Resolution No.
2012-06 becomes effective.
Dated at Anchorage, Alaska this 61h day of December, 2012 .
' '·
Secretary 1
Resolution No . 2012-06 Page3