HomeMy WebLinkAboutAAGP PricingMay 17,2007
MR. JIM WALKER
MATANUSKA ELECfRIC ASSOCIA nON, INc.
P.O. Box 2929
Palmer, AK 99645-2929
Subject: Proposed Pricing Terms for Power Sales from Fishhook,Southfork and
Archangel Low Impact Run-oi-River Hydroelectric Projects
Dear Mr. Walker:
Polarconsult Alaska, Inc., acting on behalf of Fishhook Renewable Energy, LLC,
Southfork Hydro, LLC, and Archangel Green Power, LLC the developers of the
Fishhook, Southfork, and Archangel Hydroelectric Projects, respectively, is pleased to
offer proposed pricing terms for power sales from these three projects to Matanuska
Electric Association (MEA).
As we discussed at your offices on May 3rd
, construction of the Fishhook and Southfork
Projects is planned for 2008. Construction of the Archangel Project may occur in 2009.
Sale of power from each Project to MEA is proposed under the following pricing terms:
Period 1: Project Startup to December 31,2014
During Period 1, the purchase price for project power would be the avoided cost of
energy for Chugach Electric Association, Inc. (CEA), as filed quarterly with and
approved by the Regulatory Commission of Alaska (RCA). This value can be found on
sheet 97 ofCEA's tariff, and is $0.05361 per kWh for the second quarter 2007.
Period 2: January 1, 2015 to 20 years after Project Startup
During Period 2, the purchase price for project power would be fixed at $0.065 per kWh
with an O&M escalator of Y2 the consumer price index for Anchorage, as published by
the U.S. Department of Labor, Bureau of Labor Statistics.
Reopener Clause
During Period 1 or Period 2, if the RCA acknowledges and/or defines a capacity value for
run-of-river projects such as the Fishhook, Southfork, and Archangel Projects, the Project
owners shall have the option to renegotiate pricing terms to include capacity value.
Renewable Energy Credits (RECs)
All Projects meet the criteria for low-impact hydro as defined by Green-e, a leading
national organization that establishes standards and certifies renewable energy projects.
If RECs are established for the Fishhook, Southfork, and Archangel Projects, the project
owners will retain sole exclusive rights to the RECs.
I trust MEA will find these pricing terms acceptable, and this information will enable you
to approach CEA to revise your all-requirements contract and formally request a waiver
of the 5-year notification clause in that contract.
We look forward to negotiating a power sales agreement, and moving these projects
towards construction. If you require any additional information or clarification, please
give me a call at 258-2420 or e-mail atjoel@polarconsult.net.
Sincerely,
Joel Groves, P.E.
Fishhook Project Manager
cc:
Earle Ausman, Southfork Hydro, LLC
Jill Reese, Archangel Green Power, LLC
James Keen, Chief of Engineering, Regulatory Commission of Alaska