HomeMy WebLinkAboutAPA Unalaska Project Land and Royalty Agreements 1986 1Alaska Power Authority Board of Directors
Unalaska Geothermal Project
Land and Royalty Agreements
June 16,1986
.
This folder contains summaries and agreements negotiated with
Qunlashka Corporation (the village corporation of Unalaska/Dutch
Harbor)and the Aleut Corporation (the Regional Native Corporation)
which own certain surface lands and geothermal resources necessary
for the Unalaska geothermal project.
The agreements have been reviewed and approved by the staff,
attorneys,of both corporations;the staff,attorney and city
council of Unalaska;the Power Authority staff;and the Alaska
Department of Law.The boards of both corporations have authorized
their corporate officers to execute the negotiated agreements.
These agreements are referenced in the Board Action Item relating
to ratification of agreements for the Unalaska geothermal project
and are scheduled to be discussed by the Planning Committee of the
Board prior to the meeting.
4707/403 -l1-
SUMMARY OF AGREEMENT WITH THE OUNALASHKA CORPORATION
Rights Granted
There are two general categories of rights granted to the PowerAuthorityunderthisagreement(Article A,page 1):
1.The Power Authority is granted the right of access to the land
for the purpose of conducting the feasibility study.
2..Upon completion of the feasibility study,should the Power
Authority obtain financing for the project,it is granted
rights-of-way and easements necessary for the project.
Consideration
Upon completion of the feasibility study,designation by the Power
Authority of the location of necessary rights-of-way and easements,
_and approval by the Corporation of those designations,the Power
Authority and the Corporation agree to negotiate consideration to
be paid or exchanged for the property rights conveyed (Article B,Sec.2,page 2.).However,if agreement is not reached within
60 days,the Power Authority agrees to pay and the Corporation
agrees to accept the fair market value for the property rights as
determined by registered appraisers and based on the value of the
portion of the property to be conveyed as a part of the whole
property value.The Power Authority and the Corporation may each
have the property appraised.If the appraised values are within
plus or minus twenty percent,both parties will accept the value
midway between the two appraised values.If the appraised values
exceed plus or minus twenty percent and the parties still cannot
agree on a fair price,they will mutually select and split the cost
of a third appraiser whose determination of the fair market value
shall be binding on both parties.
Other Provisions
As part of the feasibility study,the Power Authority agrees to
analyze the potential for hydrothermal development and use of
geothermal fluids from the project for direct heating of future
agriculture and aquaculture facilities in nearby Makushin Valley(Section 3,page 3).
The Power Authority shall indemnify,save harmless and defend the
Corporation against claims arising out of Power Authorityactivitiesonitslands(Section 5(c),page 4).
4631/387 |-5-
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The Corporation shall be responsible only.for taxes assessed
against its interest in lands within Power Authority rights-of-way
and easements and against any improvements it places on those lands(Section 6,page 4).
The Power Authority may assign its interest in the agreement only
to another state agency,unless prior written consent is obtained
by the Corporation,and any successor-in-interest shall be bound bytheagreement(Sections 7 and 8,page 4).
4631/387 -6-
Page 1 of 4
Conditional Right-of-Way Easement Agreement
for the Unalaska Geothermal Project
THIS AGREEMENT is made and entered into as of the day of»1986,by and between THE OUNALASHKA CORPORATION,an
Alaskan Corporation,hereinafter referred to as the "Corporation,"and
the ALASKA POWER AUTHORITY,a public corporation of the State of Alaska,
hereinafter referred to as the "Power Authority."
WHEREAS,the purpose of the Power Authority is to promote,develop,
and advance the general prosperity and economic welfare of the people of
Alaska by providing a means of constructing,financing,and operating
power projects;and
WHEREAS,the Alaska Legislature finds that the establishment of
said power projects is necessary to supply power at the lowest reason-
able cost to the state's electric utilities,and thereby to the con-
sumers of the state;and
WHEREAS,the Power Authority has completed a four-year geothermal
exploration and drilling program near Mount Makushin on Unalaska Island,
which resulted in the discovery of a commercially productive geothermal
reservoir;and
WHEREAS,the Power Authority has also completed a reconnaissance
study of energy requirements and alternatives indicating that a geother-
mal power system is likely to be the most economic source of electric
power for the community of Unalaska/Dutch Harbor;and
WHEREAS,the Power Authority Board of Directors has allocated funds
to conduct a feasibility study for developing a geothermal power system
on Unalaska Island;and
WHEREAS,the Corporation has selected or received interim convey-
ance,under the Alaska Native Claims Settlement Act,to lands needed for
transmission line and road corridors to develop such a system;
NOW,THEREFORE,witnesseth that:
Article A.GRANT OF ACCESS RIGHTS AND RIGHTS-OF-WAY
1.Access to Lands to Conduct Feasibility Study.The Corpo-
ration,in consideration of the covenants and conditions provided in
this Agreement,grants rights of access to the Power Authority,its
employees,agents,representatives,and contractors to land the
Corporation owns on Unalaska Island sufficient to conduct and complete a
detailed feasibility analysis,hereinafter referred to as the "Feasibil-
ity Study,"for a geothermal power project,hereinafter referred to as
the "Project."Said access rights shall be for the sole purpose of
conducting the Feasibility Study.
2.Right-of-Way Easement Rights.Should the Power Authority
obtain financing for the Project on or before July 1,1988,the Corp-
oration,in consideration of the covenants and conditions contained in
this Agreement,hereby grants to the Power Authority rights-of-way and
easements for a road,transmission line,dock,and associated Project
facilities on Corporation land as described in Section 4 of Article B of
this Agreement.Easements shall be 100 feet in width during con-
struction,reduced to 40 feet in width upon completion of construction,
except at transmission line angle points,terminals,and other Project
facilities where a wider easement is necessary.No as-built easement
shall exceed 100 feet in width without prior written consent of the
Corporation.All easements are granted with the rights,privileges,andauthoritiesto:(a)construct,reconstruct,maintain,repair,operate,
improve,and update upon or under lands within said easements an
electric transmission line,road,dock,and associated facilities
including but not limited to poles,towers,conductor,guys,anchors,
RARA tem te
Page 2 of 4
bridges,abutments,culverts,supporting apparatus,and such other
improvements the Power Authority determines necessary;(b)provideingressandegresstolandswithinsaideasements;(c)cut,trim,
remove,and control the growth of vegetation on or adjoining landswithinsaideasementwhichthePowerAuthoritydeterminesinterfere
with,threaten,or endanger the operation and maintenance of theProject;(d)clear and keep lands within said easements free from
fences,buildings,pavements,or other structures which the Power
Authority determines interfere with,threaten,or endanger the operation
and maintenance of said line or system or may increase the safety riskstotheCorporationoritsproperty;and (e)license,permit or otherwise
agree to the joint use or occupancy of said line or system by any other
person,firm,or corporation for telephone,electrification,utility,or
transportation purposes.
Article B.TERMS AND CONDITIONS
1.Term.This Agreement is effective on »1986.
Unless terminated under any other provision hereof,the access rights
granted under Section 1 of Article A of this Agreement shall remain in
effect until the Power Authority has completed the Feasibility Study or
until July 1,1988,whichever comes first.Should the Power Authority
obtain financing for the Project on or before July 1,1988,the
right-of-way easement rights described in Section 2 of Article A of this
Agreement shall take effect upon receipt of financing and remain in
effect in perpetuity.
2.Consideration.Upon completion of the Feasibility Study and
designation of the location of rights-of-way and easements as provided
in Section 4 of Article B of this Agreement,the Power Authority and the
Corporation shall negotiate the consideration to be paid or exchanged
for the property rights on said lands granted in Section 2 of Article A
of this Agreement.However,if the Power Authority and the Corporation
do not reach agreement on consideration within 60 days after completion
of the Feasibility Study,the Power Authority shall pay the Corporation
the fair market value of the property rights to be conveyed.The fair
market value shall be determined in the following manner:
(a)The Power Authority shall have the land and property rights
appraised by an appraiser who is a resident of the State of Alaska andwhocarriesaMemberAppraisalInstitute(MAI)or Senior Real PropertyAppraiser(SRPA)designation.The Power Authority and the Corporation
shall negotiate the fair market value of the property rights to be
conveyed based on the results of said appraisal.
(b)If agreement on the fair market value is not reached within 30daysaftercompletionoftheappraisaldescribedin(a)of this section,
the Corporation shall,at its expense,have an independent appraisal
conducted by an appraiser who is a resident of the State of Alaska and
who carries an MAI or SRPA designation.
(i)If the difference between the appraised market values deter-mined in accordance with (a)and (b)of this section is 20 percent or
less of the larger value,then the fair market value shall be the value
which is midway between the two appraised values.
(ii)If the difference between the appraised market values de-termined in accordance with (a)and (b)of this section is greater than
20 percent,then the Power Authority and the Corporation shall negotiate
the fair market value of the property rights to be conveyed based on the
results of the two appraisals.
(c)If agreement on the fair market value is not reached within 30
days after completion of the appaisal described in (b)of this section,
the Power Authority and the Corporation shal]mutually select a third
independent appraiser who is a resident of Alaska and carries an MAI or
SRPA designation.If the parties are unable to agree otherwise,the
third appraiser shall be chosen by alternately striking names off a list
of 10 such appraisers,made up of 5 names submitted by each party,in
which case the Corporation shall strike the first name.The cost ofsaidappraisershallbesharedequallybythePowerAuthorityandthe
200%/EnII4
Page 3 of 4
Corporation,and the fair market value as determined by said appraisershallbebindinguponbothparties.
(d)All appraisals conducted under this section shall be based on
the fair market value of the portion of the property to be conveyed as a
part of the whole property value,whether or not damages or benefits are
created as a result of the Project.The Corporation shall be entitled
to any Severance damages,valued separately,but any special benefit
resulting from the Project shall be offset against the amount of sever-
ance damages only,not against the portion conveyed.The fair market
value of property rights to be conveyed hereunder,therefore,shall be
the value of the part taken as a part of the whole property,plus
severance damages that are not offset by special benefits resulting from
the Project.
(e)The date of evaluation for purposes of this Agreement and all
appraisals conducted hereunder shall be the date of the first appraisal
conducted.
3.Feasibility Study.The Power Authority shall conduct a
Feasibility Study consisting of a technical and economic analysis of theProject.Among other specific items,the Feasibility Study shall (a)
analyze potential road and transmission routes reasonably necessary fortheProject,(b)analyze the potential for utilizing geothermal fluids
from the Project for direct heating of agriculture and/or aquacultureprojectsinMakushinValley,and (c)conduct a preliminary assessment
of hydrothermal resources in Makushin Valley.|
4.Designation of Easements and Rights-of-Way.Upon completion
of the Feasibility Study,the Power Authority shall designate lands and
property rights reasonably necessary for the Project.All easements and
rights-of-way granted hereunder shall be located on lands owned by the
Corporation within the area described as follows:Township 72 South,
Range 117 West,Sections 31,32,33,and 34;Township 72 South,Range
118 West,Sections 20,21,22,23,24,25,26,27,28,29,32,33,34,
35,and 36;Township 72 South,Range 119 West,Sections 2,3,4,9,10,
11,14,15,16,22,23,and 24;Township 73 South,Range 118 West,
Sections 3,4,5,6,7,8,and 9;Seward Meridian.The precise location
of right-of-way easements within this area shall be subject to approval
by the Corporation to the maximum extent consistent with its own
concerns.The Corporation shall exercise its approval rights so as best
to facilitate the purpose for which the rights-of-way are to be estab-
lished,in accordance with determinations set forth in the Feasibility
Study.An as-built survey shall be conducted to establish,by legal
description,the exact location of the right-of-way easements and access
roads,and the costs of such survey shall be borne by the Power
Authority.The as-built survey shall be completed within 12 months
after completion of construction.
5.Operations.(a)The Power Authority shall comply with alllawsandregulationsoftheStateofAlaskaandoftheUnitedStates
applicable to its operations on Corporation lands and shall obtain all
required permits,consents,or licenses.The Corporation makes no
representations or warranties as to the requirements of any permission,
consent,or license nor as to the availability of such.
(b)All of the Tabor to be performed,activities to be conducted,
and materials to be furnished in the operations of the Power Authority
hereunder shall be at the Power Authority's sole cost and expense,and
the Corporation shall not be chargeable with or liable for any part
thereof.
(c)The Power Authority,its agents,representatives,and con-
tractors shall indemnify,save harmless,and defend the Corporation,its
officers,and agents from and against any and all liens,claims,
damages,losses,liabilities,judgments,or suits of any nature
whatsoever which may arise out of the Power Authority's activities oroperationsonCorporationlandsotherthanthosearisinginwholeorin
part from the Corporation's act or failure to act.
AQAW/EAI/2
Page 4 of 4
(d)The Power Authority shall use due diligence in attempting to
maintain the rights-of-way granted herein as private easements,and
agrees to take all steps reasonably calculated to ensure that access in
and to said lands will be restricted to the agents,officers,and
assigns of the Power Authority,and further to take those steps rea-
sonably practicable to obviate the creation of a public easement,or
otherwise confer any right upon the general public to access all or any
portion of said rights-of-way.
(e)It is understood by both parties hereto that the failure of
the Power Authority,its successors,or assigns to exercise any right
herein granted shall not be construed as a waiver or abandonment of the
right.
6.Taxes.(a)The Power Authority shall bear sole responsibilityforanytaxesTeviedandassessedagainstthePowerAuthority's interest
in the rights-of-way and easements granted under this Agreement or
structures,improvements,or personal property placed upon the
rights-of-way and easements by the Power Authority or for establishing
that the Power Authority's interest is exempt from taxation.
(b)The Corporation shall bear sole responsibility for any taxes
levied and assessed against the lands within said rights-of-way and
easements as if such lands were unimproved and shall pay any taxes
levied and assessed against any structures and improvements placed by
the Corporation on the lands within said rights-of-way and easements.
7.Assignment.The Power Authority shall have the right,uponwrittennoticetotheCorporation,to assign all or any part of its
rights or interest in and to this Agreement to another state agency.Any
other assignment,sale,or conveyance by the Power Authority of the
rights conferred hereunder shall take place only upon the prior written
consent of the Corporation.
8.Binding Effect.This Agreement and all of the terms,cove-
nants,and conditions hereof shall extend to and be binding upon the
respective heirs,executors,administrators,grantees,successors,and
assigns of the parties hereto.
9.Severability.If any part,portion or provision of this
Agreement shall be found or declared null,void,or unenforceable for
any reason whatsoever by any court of competent jurisdiction or by a
governmental agency having authority thereover,then only such part,
portion,or provision shall be affected thereby and the remainder of
this instrument shall continue in full force and effect.
IN WITNESS WHEREOF,the parties hereto have executed this instru-
ment as of the date hereinabove first written.
THE OUNALASHKA CORPORATION THE ALASKA POWER AUTHORITY
BY BY