HomeMy WebLinkAbout9A Skagway MOU West CreekAlaska Power & Telephone /Municipality of Skagway MOU: West Creek Hydropower Project
August 7, 2014
MEMORANDUM OF UNDERSTANDING
DEMONSTRATING A COMMITMENT BY THE MUNICIPALITY OF SKAGWAY AND
ALASKA POWER & TELEPHONE TO WORK COOPERATIVELY ON THE ALASKA/YUKON
ECONOMIC CORRIDORS PROJECT, AND THE PROPOSED WEST CREEK HYDROPOWER
PROJECT.
This Memorandum of Understanding is between the Municipality of Skagway ("Municipality") and
Alaska Power & Telephone ("AP&T"). Representatives of the Municipality and AP&T conducted
discussions in July and August of 2014, and agreed upon the following Memorandum of Understanding
to be presented to the Municipality of Skagway Borough Assembly and AP&T management approval.
Upon approval by both governing bodies, the Municipality and AP&T will work cooperatively on the
Alaska/Yukon "Economic Corridors" project, on FERC preliminary permit phase activities, and to
undertake development of the West Creek hydropower project providing the project is proven
technically, economically, financially, and environmentally feasible, and can be licensed successfully. The
Municipality and AP&T both understand that if either of the entities does not approve this
Memorandum of Understanding, there is no agreement as between the Municipality and AP&T.
RECITALS:
WHEREAS, The mission statement of the Municipality of Skagway includes a commitment to "facilitate
the growth of the local economy and protect and enhance the quality of life," and
WHEREAS, For decades, the potential West Creek hydropower project has been considered by the
Municipality of Skagway and its residents as one of the community's most significant opportunities to
provide affordable energy to residents, realize community clean energy goals, and create new jobs and
municipal revenue through sale of renewable energy to cruise ships, the Yukon Territory, SE Alaska and
other developing markets; and
WHEREAS, The Skagway region requires an additional supply of affordable, renewable energy to help
meet local demand for electricity, support continued community growth, and provide a surplus of
energy which can be used to attract new businesses and jobs to the region; and
WHEREAS, Development of the West Creek hydropower project would provide the additional energy
and capacity required to support electrification of Skagway's cruise ship berths, allowing porting vessels
to access clean, affordable energy, and supporting community air quality goals; and
WHEREAS, The West Creek hydropower project would provide energy which could be sold to Yukon
Energy Corporation, which has expressed interest in the project via the Alaska/Yukon "Economic
Corridors" project, and which has entered into a Memorandum of Agreement with the Municipality of
Skagway reflecting its strong desire to acquire energy from the West Creek project; and
1
Alaska Power & Telephone / Municipality of Skagway MOU: West Creek Hydropower Project
WHEREAS, The West Creek hydropower project would provide a clean source of energy which could
replace the use of fossil fuel generation within Skagway, further supporting the communities air quality
and GHG limitation goals.
WHEREAS, The project features associated with the potential West Creek hydropower project would be
located on land which is owned by and located within the boundaries of the Municipality of Skagway;
and
WHEREAS, The concept of development of the West Creek hydropower project is substantially
consistent with community development goals outlined in Skagway's 2020 Comprehensive Plan,
including: 5.1; 5.2; 5.3; 5.5; 5.6,• 5.7;10.25; 10.26;and 10.27; and
WHEREAS, A list of compelling community social, environment, and economic benefits associated with
the proposed West Creek hydropower project has been identified by AP&T and presented to the
Municipality in a summary report titled: Triple Bottom Line' Socioeconomic Benefits of the West Creek
Hydropower Project; and
WHEREAS, AP&T is Skagway's incumbent local utility, with a presence in and ongoing financial
commitment to the community which dates back to the company's founding in Skagway in 1957; and
WHEREAS, AP&T has significant hydropower development experience, having developed and
constructed hydropower projects at Black Bear Lake, Goat Lake, South Fork, and Kasidaya Creek, having
brought hydropower projects including Mahoney lake and Reynolds Creek to advanced stages of
development readiness, and having been actively engaged in development of new projects at locations
including Soule River, Sweetheart Lake, Thayer Lake, Yerrick Creek, and elsewhere; and
WHEREAS, AP&T has a proven ability to identify, develop, construct, finance, and operate hydropower
projects in Alaska's challenging conditions; and
WHEREAS, AP&T has filed for the Preliminary Permit for the West Creek hydropower project, with the
expressed intent of developing a partnership with the Municipality of Skagway to study the project and
potentially develop it in a manner which seeks to maximize net positive benefits for the community; and
NOW, THEREFORE BE IT RESOLVED by the Borough Assembly of the Municipality of Skagway and the
AP&TBoard of Directors as follows:
Section 1. The Municipality of Skagway and AP&T are committed to work cooperatively:
■ On the Alaska/Yukon "Economic Corridors' project;
■ On FERC preliminary permit phase activities; and
■ To undertake development of the West Creek hydropower project, providing the project is
proven technically, economically, financially; and environmentally feasible, and can be licensed
2
Alaska Power & Telephone /Municipality of Skagway MOU: West Creek Hydropower Project
successfully, and has demonstrated public support of the citizens of Skagway and Dyea by
popular vote.
Section 2. The Municipality of Skagway will serve in a lead role, as determined by the Municipality in its
sole discretion, with support from AP&T, to communicate a common message as the Alaska/Yukon
Economic Corridors Study and other subsequent programming is undertaken, and the proposed West
Creek hydropower project advances towards development. By this agreement, the Municipality is not
committing any funding to engage in actions in a lead role. This agreement does not give AP&T any right
or power to direct the Municipality to undertake or engage in any actions.
Section 3. After adoption of this MOU and within 90 days of notice from the Municipality, AP&T will
take all necessary steps to effectuate the Municipality obtaining primacy of the FERC application as the
designated Permittee, allowing the Municipality the lead role, with partnership involvement and
support provided by AP&T in order to improve and optimize the project's permitting, finance and
governance prospects. The lead role referenced in this MOU does not obligate the Municipality to
commit funding to this project, or if funding is committed, to maintain funding of the project, and that
any and all funding by the Municipality may be terminated or withdrawn at any time in the sole
discretion of the Municipality. The transfer of the FERC application to the Municipality does not obligate
the Municipality to complete any FERC process. To the extent the transfer of the FERC application to the
Municipality creates any timelines for compliance or continuation of the FERC process, whether to
comply with the timelines or complete the process shall be in the sole discretion of the Municipality.
This Memorandum of Understanding is not legally binding in anyway. Neither the Municipality nor
AP&T shall bring any legal or equitable action of any kind or any nature for any alleged breach of this
Memorandum of Understanding or any alleged breach of the implied covenant of good faith and fair
dealing or any other action of any kind or any nature related to or arising out of this Memorandum of
Understanding. The Municipality and AP&T specifically agree that this Memorandum of Understanding
is not a contract and that it does not create any legal rights of any kind or any nature on behalf of the
Municipality or AP&T. The Municipality has consulted with the Borough Attorney during the preparation
of this Memorandum of Understanding. AP&T participated in the preparation of this Memorandum of
Understanding, and AP&T had the opportunity to consult with counsel of its choice. AP&T agrees it is
not relying upon any representations or advice of the Borough Attorney or any other representative of
the Municipality, but rather is entering into this Memorandum of Understanding in the exercise of the
independent judgment of its representatives.
Schaefer, Borough Mayor
ATTEST: E
of Skagway,
3
Alaska Power & Telephone/Municipality of Skagway MOU: West Creek Hydropower Project
AUTHORIZED thiss-lay a' 014by Alaska Power & Telephone
Robert S. Grimm, President & CEO
4