HomeMy WebLinkAboutMakushin Geothermal Project resolution A94-10 1994MEMORANDUM
TO:File
FROM:Sharron Sigafoos
DATE:October 10,1994
SUBJECT:Alaska Industrial Development and Export Authority
Resolution No.A94-10
Copies of Resolution No A94-11,Participation in a Feasibility Analysis -Makushin
Geothermal Project,have been distributed to:
V.Walker
R.Miller
D.McCrohan
D.Beardsley
D.Eberle
J.Olson
K.Ohmer
File
ALASKA INDUSTRIAL DEVELOPMENT AND EXPORT AUTHORITY
RESOLUTION NO.A94-10
RESOLUTION OF THE ALASKA INDUSTRIAL DEVELOPMENT AND
EXPORT AUTHORITY AUTHORIZING THE AUTHORITY'S PARTICIPATION
IN A FEASIBILITY ANALYSIS WITH RESPECT TO THE
MAKUSHIN GEOTHERMAL PROJECT
WHEREAS,the Alaska Industrial Development and Export
Authority (the "Authority")has under consideration a preliminary
proposal for the financing and ownership of the Makushin
Geothermal Project (the "Project")pursuant to the provisions of
AS 44.88.172;and
WHEREAS,pursuant to AS 44.88.173,before approving a
project financed under AS 44.88.172,the Authority must prepare a
finance plan with respect to the project;and
WHEREAS,the development of a finance plan for the Project
requires further project feasibility study,evaluation and
analysis (the "Feasibility Analysis");and
WHEREAS,the estimated cost of the Feasibility Analysis is
$558,000;and
WHEREAS,the Project applicant,OESI Alaska,Inc,an Alaskan
corporation ("OESIAK"),has requested that the Authority
participate in the Feasibility Analysis and contribute up to
$140,000 of the cost of preparing the Feasibility Analysis;and
WHEREAS,OESIAK has agreed to enter into a reimbursement
agreement with the Authority under which OESIAK will agree to
reimburse the Authority for any costs contributed by the
Authority with respect to the Feasibility Analysis;and
WHEREAS,it is in the best interests of the Authority that
the Feasibility Analysis be completed;and
WHEREAS,the Authority is willing to participate in the
Feasibility Analysis and contribute up to $140,000 of Authority
funds for the cost of the Feasibility Analysis provided OESIAK
agrees to reimburse the Authority for those funds.
NOW THEREFORE,BE IT RESOLVED BY THE ALASKA INDUSTRIAL
DEVELOPMENT AND EXPORT AUTHORITY AS FOLLOWS:
Section 1.The Staff of the Authority is directed to
undertake the Feasibility Analysis in connection with the
proposed Project in such manner as in the judgement of the
Executive Director is appropriate.
Section 2.In order to accomplish the Feasibility Analysis,
"an expenditure of up to $140,000 of funds of the Authority is
Authorized,but only to the extent that OESIAK enters into an
AIDEA/Feasibility Study (Makushin Geothermal)
Resolution A94-10
Page 2
agreement with the Authority under which OESIAK agrees to
reimburse the Authority for such expenditure.Notwithstanding
any other provision of this Resolution,the Authority may expend
funds for the Feasibility Analysis only after execution of the
reimbursement agreement described in the preceding sentence.
Section 3.The Executive Director is authorized to employ
such consultants and other contractors as are needed to complete
the Feasibility Analysis in a timely manner.The Executive
Director may commit to reimburse OESIAK for the costs of the
Feasibility Analysis only to the extent such funds are recovered
by the Authority from a financing for the Project.
Dated at Anchorage,Alaska this 7th day of October,1994.
gfe?ae ALASKA INDUSTRIAL DEVELOPMENT
a AND EXPORT AUTHORITY
Secretary
AIDEA/Feasibility Study (Makushin Geothermal)
Resolution A94-10
Page 3
FEASIBILITY COST REIMBURSEMENT AGREEMENT
THIS FEASIBILITY COST REIMBURSEMENT AGREEMENT ("Reimbursement
Agreement")is made this day of ,1994,between
OESI Alaska,Inc.("OESIAK"),an Alaska Corporation,and the ALASKA
INDUSTRIAL DEVELOPMENT AND EXPORT AUTHORITY ("Authority").
RECITALS:
WHEREAS,the Authority has under consideration a
preliminary proposal for the financing and ownership of the
MAKUSHIN GEOTHERMAL PROJECT under the Authority's Development
Project statutory authority:
WHEREAS,the Authority must develop a Finance Plan before
approval of a Development Project;
WHEREAS,development of a Finance Plan for the Makushin
Geothermal Project requires further project feasibility study and
evaluation;
WHEREAS,the estimated cost of the project feasibility
analysis is $558,000;
FEASIBILITY COST REIMBURSEMENT AGREEMENT Page 1
WHEREAS,OESIAK requests that the Authority contribute
$140,000 of the cost of feasibility analysis;
WHEREAS,the Authority requires that OESIAK agrees to
reimburse the Authority for all direct costs incurred in support of
the feasibility studies;
NOW,THEREFORE,in consideration of the mutual covenants
and promises herein contained,the Authority and OESIAK agree as
follows:
1.Subject to the reimbursement requirements set out
herein,the Authority agrees to provide $140,000 in partial support
of the proposed feasibility analysis of the Makushin Geothermal
Project.The Authority will begin to provide this partial support
of the feasibility analysis upon receipt of written Notice to
Proceed from OESIAK.
2.OESIAK at any time may request in writing that the
Authority cease its work in support of the feasibility analysis of
the Project.Any additional funds or work committed by the
Authority toward the feasibility analysis after receipt of such a
written request from OESIAK shall not be reimbursable by OESIAK
under this Agreement.Work completed and funds committed before
receipt of such a notice shall be reimbursable by OESIAK under the
terms of this Agreement._
FEASIBILITY COST REIMBURSEMENT AGREEMENT Page 2
3.If the Project is approved and the Authority and
OESTAK enter into a final Financing and Development Agreement with
respect to the Project,OESIAK agrees that all costs incurred under
this Agreement will be included as a qualified cost for purpose of
determining any user fee,lease or other payment to be negotiated
between the parties.
4.OESIAK agrees to reimburse the Authority,subject to
sections 1 and 2 herein,up to $140,000 for all direct costs
incurred in support of the feasibility analysis if (1)OESIAK
withdraws or otherwise declines to proceed with an application for
financial assistance from the Authority,(2)the Authority,for
whatever reason,declines to approve the Project,or (3)the
Authority and OESIAK are unable to execute a final Financing and
Development Agreement with respect to the Project.Repayment is
due within ninety (90)days following the date which the Authority
notifies OESIAK in writing the amount of repayment which is due.
5.The obligation of the Authority pursuant to this
Agreement is strictly limited to participation in the feasibility
analysis of the Project.The Authority may impose further terms
and conditions with respect to the feasibility study,as the
Authority,in its sole and absolute discretion,determines to be
reasonable and prudent.The Authority's participation in the
feasibility analysis as provided in this Agreement shall in no way
bind or commit the Authority to in any way participate in any
FEASIBILITY COST REIMBURSEMENT AGREEMENT Page 3
financing with respect to the project and OESIAK specifically
acknowledges that the Authority has made no such commitment.
6.OESIAK shall defend,indemnify and hold harmless the
Authority from and against any and all suits,claims,actions,
losses,costs,penalties and damages (of whatever kind or nature,
including reasonable attorney's fees and litigation cost)arising
in favor of government agencies or third parties (including
employees of the parties)on account of any damages arising out of,
or in connection with this Agreement.
7.This Agreement shall be governed by and construed
under the laws of the State of Alaska.
8.Any action or judicial proceeding arising out of
this Agreement shall be filed and prosecuted in the Superior Court
for the State of Alaska,Third Judicial District at Anchorage.
9.This Agreement may not be modified or amended except
in writing signed by both parties.
10.The signatories to this Reimbursement Agreement
assert that they have the power and requisite authority to bind
each party to perform the obligations set out in this Agreement.
FEASIBILITY COST REIMBURSEMENT AGREEMENT Page 4
IN WITNESS WHEREOF,
Reimbursement Agreement this
FEASIBILITY COST REIMBURSEMENT AGREEMENT
the parties execute this
day of ,1994,
OESI ALASKA,INC.
By:
Joseph B.Fahrendorf
President
ALASKA INDUSTRIAL DEVELOPMENT
AND EXPORT AUTHORITY
By:
William R.Snell
Executive Director
Page 5
LETTEROFINTENT
This Letter of Intent is between the Alaska Industrial
Development and Export Authority (AIDEA),an Alaskan Public
Corporation,and GEOlectric Power Company (GEOlectric),a
Nevada Corporation.
WHEREAS,GEQOlectric has submitted a Joint Venture Proposal
(Attach hereto),for the development of the Unalaska
Geothermal Electrical Generation Project (Project)to AIDEA on
September 11,1992;
WHEREAS,AIDEA Resolution No.A92-11 authorized Staff to enter
into a non-binding Letter of Intent (Letter),relating to the
Authority's possible participation in the Project;
WHEREAS,AIDEA staff is engaged in a comprehensive review of
the Project in association with staff of the Alaska Energy
Authority (AEA);
WHEREAS,AIDEA staff believes that substantial progress has
been made in Project review,and that an economically viable
proposal for Project financing can be considered in a timely
fashion to maintain Project development schedule;
THEREFORE,the Parties to this Letter agree to use their good
faith efforts to complete the activities listed below:
1.AIDEA and GEOlectric will negotiate in good faith with
OESI Power Corporation (OESI)with the goal of entering
into a Letter of Intent with OESI to acquire all of
OESI's rights,titles and interests in the Project.The
goal is to accomplish this task is October 15,1992.
2.The Parties will work with the AEA to _support'the
Governor's office sponsorship of a meeting of all the
LETTER OF INTENT
Page Two
Project participants,including the Unalaska fish
processor companies and the representatives of the City
of Unalaska,to reach a consensus that the necessary
level of power purchase commitment exists to move forward
with the Project.This meeting will be scheduled for the
week of October 19,1992,or at such time as_the
necessary financial information is available to AEA,
AIDEA and GEOlectric as to the proposed cost of
electrical energy to the Unalaska users.
The Parties shall complete the review of the project as
expeditiously as practicable.Once completed,the
Parties will use their good faith efforts to negotiate
and enter into the following agreements:
a.The Joint Venture Agreement between AIDEA-and
GEOlectric.
b.The Purchase Agreement between the AIDEA/GEOlectric
Joint Venture and OESI.
c.The development agreement,fuel (fluid fee)sales
agreement,or other capital recovery agreements
between the AIDEA/GEOlectric-Joint Venture and AEA.
The Parties will then also use their good faith efforts
to move forward with engineering,planning,permitting
and financing activities so as to target the closing of
the financing and construction of the Project in the
shortest possible time frame consistent with a target of
having the Project substantially complete by June 30,
1995.
The parties recognize that AIDEA financial participation
requires,aS a prerequisite,formal Board approval of the
LETTER OF INTENT
Page Three
Project under AS 44.88.172 44.88.173.This Letter of
Intent is not intended to limit or otherwise affect the
absolute discretion of the AIDEA Board of Directors in
its consideration of the Project.Further,the Parties
recognize that approval of the AEA Board of Directors
will be necessary,and this Letter of Intent is subject
to any statutory requirements affecting the AEA Board,
and its discretion regarding the Project.
Agreed and Accepted by the Parties this day of October,
1992.
For GEOlectric For AIDEA
By:U0 p By:
Its:KGorx .OSNT Its:
10/05/92
DOCBIF 163
MEMORANDUM State of Alaska
To.FILE pate:July 20,1992
FILE NO
TELEPHONE NO:
FROM:Sharron Sigafoos suBJECT:Geothermal Resources Development
Project
RE:AIDEA Resolution A92-11,Geothermal Resources Development Project
(Approved 7/17/92)Unalaska,Alaska
A copy of A92-11 was faxed to:Mr.Jack Wood,GEOlectric Power Company
("GEOI Power")at John B.Olson's request on July 20,1992
Mr.Jack Wood phone #(916)269-0828
fax #(916)268-2396
07-001 (Rew &/7e81
ALASKA INDUSTRIAL DEVELOPMENT AND EXPORT AUTHORITY
RESOLUTION NO.A92-11
A RESOLUTION OF THE ALASKA INDUSTRIAL
DEVELOPMENT AND EXPORT AUTHORITY RELATING
TO THE GEOTHERMAL RESOURCES DEVELOPMENT
PROJECT
WHEREAS,the Alaska Industrial Development and Export
Authority ("Authority")is committed to the consideration.of
qualified Development Projects which promote economic growth and
aGevelopment;
WHEREAS,GEOlectric Power Company ("GEOI Power")has
under consideration a proposal to purchase the development rights
to the geothermal resources at Unalaska,Alaska,and to develop
such resources in conjuncture with the City of Unalaska and the
Alaska Energy Authority (the "Project);
WHEREAS,the Alaska Energy Authority and other parties
have undertaken a detailed evaluation of the feasibility of the
Project;
WHEREAS,all or part of the Project may constitute a
Development Project within the intent and meaning of A.S.44.88.172
and 44.88.900;
WHEREAS,GEOI Power has requested that the Authority
consider participation in the financing of the Project;
WHEREAS,GEOI Power has submitted a proposed Letter of
Intent for consideration by the Authority,which Letter is intended
to further illustrate the Authority's desire to participate in the
Project;
NOW,THEREFORE,BE IT RESOLVED BY THE ALASKA INDUSTRIAL
DEVELOPMENT AND EXPORT AUTHORITY,as follows:
1.Staff is directed to undertake a review of the
feasibility of the Project;
2.Staff is further authorized to execute a non-binding
Letter of Intent,in a form acceptable to Staff,relating to the
Authority's possible participation in the Project;
3.Upon execution of an Agreement which provides for
the reimburSement of all costs incurred by the Authority in the
event the Project is approved,Staff is authorized to expend up to
$100,000 in assets of the Economic Development Account to implement
peragree hy.1*of this Resolution.ees Hepa--DATED at Anchorage,Alaska,this 17th day of July ,
ee eenee-ee aChairman|
Whescot
PAGE 2RESOLUTIONNO.A92-11
GEOlectric Power Company
e ALASKA INDUSTRIAL DEVELOPMENTAb'AND EXPORT AUTHORITY
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