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HomeMy WebLinkAboutRes1988-134 . . . sponsored by: Rovle CITY OF SEWARD, ALASKA RESOLUTION NO. 88-134 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA, AUTHORIZING THE CITY MANAGER TO SIGN A LETTER AGREEMENT TO RESOLVE CERTAIN CONTRACTUAL ISSUES PURSUANT TO REA'S APPROVAL OF THE BRADLEY LAKE HYDROELECTRIC PROJECT POWER SALES AGREEMENT AND SERVICES AGREEMENT. WHEREAS, the city of Seward is a party to the Bradley Lake Hydroelectric project Power Sales Agreement and to the Bradley Lake Hydroelectric services Agreement (the Agreements); and WHEREAS, such Agreements require the approval of the Rural Electrification Administration (REA) and REA has requested that the parties enter into an agreement to satisfy certain concerns prior to their approval of the Agreements; and WHEREAS, the parties to the Agreements have prepared a Letter Agreement which has been reviewed by REA and has been found to meet its concerns; and WHEREAS, the Alaska Power Authority has signed the Letter Agreement and forwarded it for execution by the parties to the Agreements; and WHEREAS, the city Manager has reviewed and proposes to sign the Letter Agreement. NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA, that: Section 1. The City Manager is authorized to execute on behalf of the city of Seward the Letter Agreement dated November 7, 1988, from the Alaska Power Authority concerning the interpretation of the Agreements and approving certain assignments with respect to REA and other secured lenders. Section 2. This resolution shall take effect immediately upon its adoption. PASSED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA, this 12 day of Decemher , 1988. 1 . . . CITY OF SEWARD, ALASKA RESOLUTION NO. 88-134 THE CITY OF SEWARD, ALASKA ~ . t!:. ~ ~ I -i.t!k HARRY . GIESELER, MAYOR AYES: NOES: ABSENT: ABSTAIN: GIESELER, DUNHAM, HILTON, MEEHAN, NOLL, O'BRIEN, SIMUTIS NONE NONE NONE ATTEST: (City Seal) APPROVED AS TO FORM: PERKINS COIE, Attorneys for the City of Seward, Alaska 7-,,-,( IZI~ Fred B. Arvidson city Attorney 2 . ~ Alaska Power Authority State of Alaska Steve Cowper, Governor November 7, 1988 Mr. Kent Wick, General Manager Alaska Electric Generation and Transmission Cooperative, Inc. c/o Homer Electric Association, Inc. 3977 Lake Street, P.O. Box 429 Homer, Alaska 99603 Mr. David Highers, General Manager Chugach Electric Association, Inc. P.O. Box 196300 Anchorage, Alaska 99519-6300 . Mr. Michael P. Kelly, General Manager Golden Valley Electric Association, Inc. P.O. Box 1249 . Fairbanks, Alaska 99707 Mr. Kent Wick, General Manager Homer Electric Association, Inc. 3977 Lake Street Homer, Alaska 99603 Mr. James F. Palin, General Manager Matanuska Electric Association, Inc. 163 E. Industrial Way, P.O. Box 2929 Palmer, Alaska 99645 Mr. Thomas Stahr, General Manager Anchorage Municipal light and Power 1200 East First Avenue Anchorage, Alaska 99501-1685 . Mr. Paul Diener, Utility Manager Ci ty of Seward P.O. Box 167 Seward, Alaska 99664 Subject: Bradley Lake Hydroelectric Project Bradley Lake Participants: The Rural Electrification Administration (REA) in its various correspondence to Chugach Electric Association, Inc. (CEA), Golden ~ Po. Box AM Juneau. Alaska 99811 (907) 465.3575 :g Po. Box 190869 701 EastTudor Road Anchorage. Alaska 99519.0869 (907)561-7877 4090/0036(4) November 7, 1988 Page 2 Valley Electric Association, Inc. (GVEA) and Alaska Electric Generation & Transmission Cooperative, Inc. (AEG&T) (the REA partv or parties) has requested that the participants to the "Bradley . Lake Hydroelectric Project Agreement for the Sale and Purchase of Electric Power" and "Bradley Lake Hydroelectric Project Agreement for the Wheeling of Electric Power and for Related Services" (the Agreements) agree to some specific clarifications to meet REA concerns regarding the Agreements. Each of the parties to the Agreements agrees that thp following language correctly expresses and interprets the terms and conditions of the Agreements: 1. REA Ap~roval. The Agreements and any amendments thereto are subject to the approval of the Administrator of REA, as long as such approval is required in the terms of any REA party's mortgaqe agreement with REA. 2. Payment Priority. (a) The provisions of Section IO(d) of the Bradley Lake Power Sales Agreement are not intended to provide any payment priority with respect to any existing contracts of the Parties or the proposed AEG&T/CEA/MEA tripartite Power Sales Agreement. (b) Section IO(d) shall also not apply to any amendment to such contracts or tripartite agreement if such amendment does not substantially increase the obligations of the REA party to such contracts or agreement. Each of the parties further agrees that (i) the provi- sions of Section I7(c) of the Bradley Lake Power Sales Agreement shall not apply to any mortgage of a REA party's electric utility system or any assets of that system given to secure loans made or guaranteed by REA or another lender for approved REA purposes and (ii) assignments under Section Ia(b)(I) of the Bradley Lake Power Sales Agreement and Section I2(b) of the Transmission Services Agreement will be permitted in accordance with the followinq provisions: (a) Assi~nments to REA. A party may assign the Agree- ment(s), together wlth all of its rights and obligations there- under, (i) to or in trust for REA for the purpose of securing obligations for borrowed money, or (ii) pursuant to the exercise by REA of any of the rights, powers or privileges provided for by the mortgages or other security instruments of such party for borrowed money; provided that if REA exercises any of the rights, powers or privileges of said mortgages or other security instruments of such party with respect to the Agreement(s), then and only then shall REA assume the obligations to be performed under the Agreement(s) by such party, as provided for in the Agreement(s); provided, further, that in the event REA exercises any of its rights, powers or privileges under said mortgages or other security agreements of 4090/0036(5) . . . November 7, 1988 Page 3 such party with respect to the Aqreement(s), REA may thereafter assign the Agreement(s), together with all the rights and obliga- tions thereunder. to any entity authorized and able to perform the obligations and duties of such party under the Agreement(s). which entity shall assume all the rights and obligations of such party under the Agreement(s). and such assignment and assumption shall release REA from any further liability, obligations or duties under the Agreement(s) and provided, further that no such assignment shall in any way relieve such party of any obligations hereunder. (b) Assignments to Secured Lenders Other Than REA. A party may assign the Agreement(s), together with all of its rights and obligations thereunder, (i) to or in trust for any secured lenders of such party, for the purpose of securing obligations for borrowed money, or (ii) pursuant to the exercise by any such secured lender of any of the rights, powers or privileges provided for by the mortgages or other security instruments of such party for borrowed money; provided, that no such assignment shall in any way relieve such party of any obligations hereunder. No such secured lender shall, as a result of such assignment or the sub- sequent exercise of its rights with respect to the Agreement(s) under any mortgage, deed of trust or other security instrument, be construed to have assumed, or otherwise to have become personally liable for, the assignor's obligations hereunder, but such secured lender's ability to exercise the rights of its assignor hereunder shall be subject to performance of the assignor's corresponding obligations under the Agreement(s). In the event any such secured lender exercises any of its rights, powers or privileges with respect to the Agreement(s) under said mortgages or other security agreements, such secured lender may thereafter assign the Agree- ment(s), together with all the rights and obligations thereunder, to any entity authorized and able to perform the obligations under the Agreement(s), which entity shall succeed to all the rights and assume all the obligations of the borrower-assignor under the Agreement(s). (c) Notice of Secured Lenders' Exercise of Rights. Prior to the exercise by any. secured lender of any rights or remedies under any mortgages or security agreements with respect to the Agreement(s), such secured lender shall give the parties hereto reasonable notice that it intends to exercise such rights or remedies. (d) Adverse Effect on Tax Exem~t Status. No assignment under subsections (a) and (b) above will be permitted if such assignment would adversely affect the tax exemption of interest on any bonds outstanding under the Bond Resolution that were original- ly issued on a tax exempt basis. If this letter agreement is satisfactory, please sign and return one copy to me at the Alaska Power Authority (APA). This Agreement November 7, 1988 Page 4 will be executed as and in force when Participant. separate counterparts and will be fully executed the APA has received a singed copy froM each Sincerely, Robert E. LeResche Executive Director REL : it Accepted: Alaska Electric Generation & Transmission Cooperative, Inc. Chugach Electric Association, Inc. Golden Valley Electric Assocation, Inc. Homer Electric Association, Inc. Matanuska Electric Associaiton, Inc. The Municipality of Anchorage d/b/a Municipal Light and Power Th. c~rd ~~w.rd E1..,ri. Sy".m Max Royle, City Manager