HomeMy WebLinkAboutgary10001MEMORANDUM OF UNDERSTANDING
This Memorandum of Understanding (MOU) is executed this 25th day of 2011 between the City
of King Cove ("City') and Peter Pan Seafoods, Inc. ("PPSF") for the mutual purposes and
understandings set forth below.
WHEREAS, the City is finalizing a funding plan to construct the Waterfall Creek Hydroelectric
Project ("Project") in 2012/2013; and
WHEREAS, the Project is expected to annually produce about 1.4 megawatts (MW); and
WHEREAS, approximately 50% (.7 MW) of the renewable energy from the Project is expected
to be available for sale to PPSF on an annual basis; and
WHEREAS, the "King Cove Energy Projects - Concept Design Report" (October 5, 2005) prepared
by Alaska Energy and Engineering for the Alaska Energy Authority estimated a potential daily
PPSF demand of 200 to 250 kW for their "kitchen, laundry, store, Anchor Inn, dormitories and
housing, and other non -process loads;" and,
WHEREAS, this potential daily kW demand translates into an annual kWh demand of about
800,000 kWh.
NOW THEREFORE, the City and PPSF agree as follows:
1) PPSF supports the City's efforts to fund and construct the Project as soon as possible.
2) PPSF acknowledges a willingness to consider purchasing a minimum of 800,000
kWh/year.
3) Subject to any applicable statutory, regulatory or grant requirements for the project, the
City agrees to:
a) include a range of potential power sales from the Project to PPSF (including
amount and costs) as part of its AEA grant application and an updated city power
business plan;
b) draft a Power Purchase Agreement with a negotiated cost/kWh based on
current, expected kWhs available for sale from the Project; and
c) include an option for additional power sales (including amount and costs) from
the city's diesel generation system and existing Delta Creek Hydroelectric facility.
MOU City and PPSF, page 1 of 2
d) research, and if feasible, establish a process for capturing any carbon tax
credits, carbon trading revenue, and/or other derivative revenue.
4) If for any reason, the City is unable to proceed with the Project, this MOU will terminate
immediately without any further action required by the City of PPSF.
5) Nothing in this MOU shall bind the City or PPSF to the sale or purchase of power from
the Project.
6) This MOU constitutes the entirety of the understanding between the City and PPSF with
regard to the subject matter herein. Any amendment, modification or alteration of the
MOU shall be in writing and signed by both parties.
For City of King Cove: For Peter Pan Seafoods, Inc:
Henry Mack, Mayor
Date: 1'-25 — ( (
MOU City and PPSF, page 2 of 2
Dale Schwarzmiller, V.P., Alaska Production
Date: