HomeMy WebLinkAboutRes 1998-01 AK Intertie Line Of CreditI ,.
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ALASKA INDUSTRIAL DEVELOPMENT
AND EXPORT AUTHORITY
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480 WEST TUDOR ANCHORAGE, ALASKA 99503 907 I 269-3000 FAX 907 I 269-3044
MEMORANDUM
TO:
FROM:
DATE: June 16, 1998
SUBJECT: AEA Lines of Credit
Resolutions 1998-01 and 1998-02 authorize the Executive Director to enter into new line of credit
agreements for the Alaska lntertie and Four Dam Pool projects.
AEA has had lines of credit in place for these projects since 1990. The $1 million line of credit for
the Alaska lntertie provides a source of credit to pay uninsured liability losses. The $10 million line
of credit provides a source of credit to pay a portion of losses and loss related expenses for the
Four Dam Pool. Under the Power Sales Agreement and Insurance Agreement for the Four Dam
Pool, the state is responsible for uninsured facility losses. The lines of credit are backed by the
moral obligation of the state. To date there have been no draws on either line of credit.
The current lines of credit for these projects expire June 30, 1998. The Authority issued a request
for proposals ("RFP") for new lines to local banks. The RFP also requested proposals for
management of the existing trust fund and capital reserve fund that secures the $10 million dollar
line.
The Authority received four proposals. As the lines have never been drawn upon, staff reviewed
the proposals favoring those with the lowest costs assuming no draws. Based upon this review,
staff has entered into negotiations with First National Bank of Anchorage. If negotiations with First
National Bank of Anchorage were to fail for some reason, staff intends to enter into discussions
with the next highest ranked bidder.
Resolution 1998-01 authorizes the Executive Director to enter into a line of credit and other
appropriate agreements for a $1 million dollar line of credit for the Alaska lntertie project, on terms
approved by the Executive Director.
Resolution 1998-02 authorizes the Executive Director to enter into a line of credit and other
appropriate agreements for a $10 million line of credit for the Four Dam Pool project, on terms
approved by the Executive Director. The resolution also authorizes the Executive Director to enter
into custodial, trust, or other agreements with respect to the funds securing the line.
Staff recommends approval of Resolution 1998-01 and 1998-02.
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h:all\keith\board\aea ijne of credit
ALASKA ENERGY AUTHORITY
RESOLUTION NO. 1998-01
A RESOLUTION OF THE ALASKA ENERGY AUTHORITY
AUTHORIZING THE EXECUTION OF A LINE OF CREDIT
AGREEMENT FOR THE ALASKA INTERTIE; AND
PROVIDING FOR RELATED MATTERS.
WHEREAS, the Alaska Energy Authority (the "Authority") has entered into
the Alaska lntertie Agreement (the "lntertie Agreement") with certain Utility Participants
defined therein for the purpose of establishing the Utility Participants' individual rights for
the transfer capability of the Alaska lntertie and a method for determining the costs of
those rights;
WHEREAS, the lntertie Agreement provides that intertie costs shall be
shared by Utility Participants in accordance with AS 44.83.398(f), and that such costs
include operation and maintenance costs, extraordinary maintenance and replacement
costs ana annual debt service cost;
WHEREAS, it is in the best interest of the Authority and the Utility
Participants to provide a source of credit to pay uninsured liability losses, which are a
part of extraordinary maintenance and replacement costs;
WHEREAS, the Authority entered into a line of credit agreement ·(the
"Prior Credit Agreement") for these purposes;
WHEREAS, the Prior Credit Agreement will expire June 30, 1998, and it is
in the best interest of the Authority to enter into another line of credit agreement for the
same purposes served by the Prior Credit Agreement;
WHEREAS, the Authority is authorized to issue obligations payable from
its income, receipts or other assets (AS 44.83.100(a)(3)), to carry out its corporate
purposes (AS 44.83.080(6)).
WHEREAS, the Authority has requested and received proposals for
another line of credit agreement;
WHEREAS, the Authority has determined that the establishment of a
capital reserve fund pursuant to AS 44.83.11 0( c) would enhance the marketability of the
obligations issued by the Authority with respect to the line of credit; and
WHEREAS, it is in the best interests of the Authority that the Executive
Director be authorized to enter into a new line of credit agreement and such other
agreements as may be necessary to establish a $1,000,000 line of credit to provide a
source of funds to pay uninsured liability losses and other appropriate amounts with
respect to the Alaska lntertie project.
NOW, THEREFORE, BE IT RESOLVED BY THE ALASKA ENERGY
AUTHORITY AS FOLLOWS:
Section 1. The Executive Director is hereby authorized to enter into a line
of credit agreement and other appropriate agreements to reflect a line of credit in favor
of the Authority in an aggregate principal amount not to exceed $1,000,000 upon terms
and conditions approved by the Executive Director. The line of credit may be utilized to
pay for extraordinary maintenance and replacement costs under the lntertie Agreement
and for other appropriate amounts with respect to the Alaska lntertie project.
Section 2. The form of the obligations and the provisions for signatures,
authentication and payment shall be as set forth in the agreements approved and
executed by the Executive Director.
Section 3. The Executive Director is authorized to execute and deliver for
and on behalf of the Authority any and all certificates, documents, opinions or other
papers, and perform all other acts as the Executive Director may deem necessary or
appropriate in order to implement and carry out the intent and purposes of this
Resolution.
Section 4. This Resolution shall become effective upon passage and
approval.
Alaska lntertie Line of Credit
Resolution #1998-01
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DATED at Anchorage, Alaska this 161h day of June, 1998.
(SEAL)
ATTEST
Secretary 1 ·
Alaska lntertle Line of Credit
Resolution #1998-01
Chairman
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