HomeMy WebLinkAboutRes 2009-02 TDX North Slope Generating-Feb2009***~IDE~
~ ~Alaska Industrial Development K K and Export Authority
TO:
FROM:
DATE:
SUBJECT:
Borrower
Guarantors
EXHIBIT "A"
MEMORANDUM
Board of Directors
Alaska Energy Authority
Steve Haagenson
Executive Director
February 26, 2009
Power Project Fund Loan Summary
TDX North Slope Generating, Inc.
Resolution No. 2009-02
TDX North Slope Generating, Inc.
TDX Power, Inc.
Tanadgusix Corporation
I ~ ALASKA
: ENERGY AUTHORITY
Loan Request TDX North Slope Generating, Inc. requests a $2,500,000 20-year loan.
Use of Proceeds
Acquisition and installation of a new (additional) 5MW Solar Combustion Turbine installed in the
company's Dead horse north power plant, to include distribution cable.
Collateral and Value
This loan will be secured by a purchase money security interest in the 5MW Solar Combustion
Turbine being acquired with the loan proceeds.
Related Debt
TDX North Slope Generating, Inc. has three PPF loans outstanding that date back to April 2004.
Two of the loans were used to replace diesel engines with natural gas engines and one funded
the partial replacement of the distribution system at its Deadhorse facility. The combined
principal balances total $2,920,304; all loans pay as agreed.
TDX Sand Point Generating, Inc. has two PPF loans outstanding that originated in February
2002 and January 2005 respectively. The combined principal outstanding is $340,542; these
loans have paid as agreed.
Additionally, TDX Power guarantees a PPF loan for its subsidiary, Aleutian Wind Energy for the
construction of two wind-turbines in Sand Point. This loan, which originated in March 2007, has
an outstanding balance of $790,275 and has $200,363 yet to be disbursed. This loan is also
being paid as agreed.
813 West Northern lights Boulevard • Anchorage, Alaska 99503-2495
www.aidea.org • 907/771-3000 • FAX 907/771-3044 • Toll Free (Alaska Only) 888/300-8534 • www.akenergyauthority.org
Board of Directors
February 26, 2009
Page 2
Funding of this loan will increase total outstanding debt to the Authority owed by TDX (including
undisbursed related debt) from $4,251,484 to $6,751,484.
Background
TDX North Slope Generating, Inc. was formed in January 2002 and holds RCA certificate
number 227 as an Alaska electric utility. The company is the electric utility that serves
Deadhorse and Prudhoe Bay.
TDX North Slope Generating Inc. purchased Arctic Utilities, Inc. in 2002. As part of the
purchase, TDX North Slope Generating began a series of infrastructure upgrades (estimated at
$9 million over the years) to its generating equipment, its transmission and distribution lines,
and its power plant facilities, which included the construction of an additional powerhouse
located at the opposite (north end) of town. Proceeds of this loan will purchase and install a
second generator for this powerhouse.
TDX North Slope Generating is a wholly owned subsidiary of TDX Power, Inc. TDX Power is
comprised of four companies: TDX North Slope Generating, Inc., TDX Sand Point Generating,
Inc., TDX Sand Point Services, Inc., and TDX Aleutian Wind Energy, the latter being a producer
of wind-energy, which is under construction.
TDX Power, Inc. is a wholly owned subsidiary of Tanadgusix Corporation (TDX, Inc.) a village
corporation that was incorporated according to the Alaska Native Claims Settlement Act.
Please see company flow chart.
Management
Bruce Levy, President, is a 25 year energy industry veteran. A founder of TDX Power and a
well known industry executive, Bruce has implemented over 40 utility-scale fossil fueled, and
renewable energy projects worldwide in association with many of the industry's leading
companies and financial institutions. He provides the Company's strategic direction and
focuses primarily on new business development, acquisitions and acquisition finance. Mr. Levy
started his career at the O'Brien Machinery Company where he helped establish the firms'
reputation as an industry leader in power generation equipment configuration, sales and
service. Mr. Levy also helped found O'Brien Energy Services, the country's first established
developer of independent power plants. In 1991, Mr. Levy joined The New World Power
Corporation as the head of the village power division. Working in some of the most remote
locations on six continents, this group designed, constructed and operated critical, high-
reliability power plants utilizing both renewable and fossil fuel based technologies. In 1997, Mr.
Levy established BPG, Inc., a power generation development and consulting firm. In 1999, after
this company completed the design and installation of the unique hybrid power project for
Tanadgusix Corp on Saint Paul Island, TDX Power was formed through the acquisition of BPG
Inc.
Robert Guarini, PE, has over 30 years experience in the design, construction and operation of
utility scale power plants. Widely recognized as an industry leader in the design of electrical
systems and controls, Mr. Guarini oversees all equipment design and installation functions for
TDX Power.
Board of Directors
February 26, 2009
Page 3
Fred Mayer, Operations Manager, has over 30 years experience in the power generation
industry. Mr. Mayer spent the first half of his professional career at Coopers and Lybrand,
where he earned the title of Managing Partner in the Philadelphia Office. Mr. Mayer then joined
The O'Brien Energy Company where he provided operational oversight for the company's rental
fleet which was the largest of its type in the world. Mr. Mayer also has experience with power
project development in both renewable and fossil fueled arenas and has been in charge of TDX
North Slope Generating's Operations for the past two years.
Paul Wiltse, Chief Financial Officer, is a seasoned veteran of the government contracting arena
and the associated financial components. Prior to joining TDX, Paul spent many years with
Lockheed Martin and L-3 Communications, overseeing financial management and acquisitions.
Paul is the chief architect of TDX Corp.'s shared services model and is responsible for all
accounting and financial functions for the company.
Financial Information
Confidential financial information is provided under separate cover.
Portfolio Diversification
Approval of this credit will increase TDX (companies) liability to AEA from 15.51% to 25.21% of
AEA's total PPF loan portfolio (outstanding plus unfunded commitments) and from 10.63% to
17.28% of AEA's total PPF (total fund dollars).
Loan Covenants
None
Recommendation
Staff recommends approval of this loan subject to:
i. Borrower shall pay no management fees, cash, dividends or profits, or make
distribution of assets to TDX Power, Inc., or Tanadugusix Corporation, unless
EBITDA (earnings before interest, taxes, depreciation, and amortization) services
annualized debt (principal plus interest, and including lease obligations), at a
minimum of 1.10:1 Debt Service Coverage at fiscal year end.
Tanadgusix Corporation
TDX Power, Inc.
TDX North Slope
Generating, Inc.
TDX Sand Point
Generating, Inc.
TDX Sand Point
Services, Inc.
TDX Aleutian Wind
Energy, LLC
Pribilof Bering Seafoods, Ltd.
Bering Sea Eccotech, Inc.
International Inn, Inc.
Pribilof Development, LLC
Cape Flattery, LLC
TDX Net, LLC
RES Environmental
Alaska-Seattle Hotel Investment, Inc.
Alaska-Portland Hotel Investment, Inc
ALASKA ENERGY AUTHORITY
RESOLUTION NO. 2009-02
A RESOLUTION OF THE ALASKA ENERGY AUTHORITY
REGARDING A LOAN BY THE AUTHORITY TO TDX
NORTH SLOPE GENERATING, INC. FOR THE
ACQUISITION OF A SOLAR COMBUSTION TURBINE IN
DEADHORSE, ALASKA.
WHEREAS, TDX North Slope Generating , Inc. has applied to the Alaska Energy
Authority (the "Authority") for a loan in the amount of $2,500,000 with a term of 20 years under
the Authority's power project fund program (AS 42.45.01 0) at the interest rate established under
AS 42.45.01 O(f)(2)(A) (the "Loan");
WHEREAS, the nature, purpose and terms of the Loan are described in the
memorandum from Authority staff attached as Exhibit "A" hereto (the "Memorandum");
WHEREAS, staff of the Authority has recommended that the Authority make the
Loan, subject to certain conditions, as described in the Memorandum;
WHEREAS, the Loan is consistent with all requirements in AS 42.45.010 and the
applicable regulations of the Authority related to such loans (3 AAC 106.100 -.140);
WHEREAS, 3 AAC 106.11 O(d) requires that a loan from the power project fund
be approved by the Authority's board if the subject loan will exceed $2,000,000; and
WHEREAS, it is in the best interest of the Authority that the Authority make the
Loan, subject to conditions recommended by staff as described in the Memorandum.
NOW, THEREFORE, BE IT RESOLVED BY THE ALASKA INDUSTRIAL
DEVELOPMENT AND EXPORT AUTHORITY AS FOLLOWS:
Section 1. The Authority finds the standards in 3 AAC 106.110 for the Authority's
Loan to TDX North Slope Generating Inc. as described in the Memorandum are met.
Section 2. The Authority's Loan to TDX North Slope Generating Inc. as
described in the Memorandum is approved, subject to the conditions recommended by staff as
set forth in the Memorandum.
Section 3. The Executive Director of the Authority and the Deputy Director-Credit
of the Authority are authorized to take such actions as may be necessary or convenient to
consummate the Loan including, without limitation, issuing a commitment with respect to the
Loan. The Executive Director is authorized to approve non-material changes in the terms and
conditions of the Loan as the Executive Director, in his discretion, determines appropriate.
(5 E A L)
ATTEST
Secretary
DATED at Anchorage, Alaska on this 26th day of February, 2009.
AEA Resolution No. 2009-02 Page 2 of 2