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In June 1985, THP commenced reconstruction of the
hydroelectric facility. Over the next 2-1/2 years, THP made
substantial alterations to the properties acquired from AWP.
During that period, THP assumed various construction risks,
including labor strikes, unforeseen delays and costs, and
physical damage. Personnel employed by THP managed the
completion of construction. THP paid a total of $48.2 million to
acquire the stock in AWP and to complete the reconstruction of
the hydroelectric facility. The hydroelectric facility was
synchronized with CMP, and THP began furnishing electric power to
CMP on October 31, 1987.
UtilCo Acquisition and Lease
Purchase of Undivided Interest
On December 17, 1987, UtilCo purchased the undivided
interest from THP for $32,250,000. UtilCo immediately leased the
undivided interest back to THP for a 15-year term pursuant to
Project Lease Agreement No. 2, dated December 1, 1987 (the
project lease). Under the terms of the project lease, THP has,
at the end of that 15-year term, the option of either extending
the lease term or repurchasing the undivided interest. UtilCo
effected its purchase and lease of the undivided interest through
the Meridian Trust Co., which, pursuant to a trust agreement,
purchased the undivided interest on behalf of UtilCo.
(Hereafter, we shall disregard Meridian’s role and consider
UtilCo as owning directly the undivided interest.)
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Last modified: May 25, 2011