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that the partners could still terminate participation under the
partners consent and agreement, the standstill agreement provided
that the partners could furnish notice of termination of
participation prior to noon on August 1, 1985, in which event
termination would be effective as of that date. A notice of
termination pursuant to this provision would relieve the partners
of the obligation to make further equity contributions to the
partnership.
Partnership and SFC Reach Price Support Agreement
On July 16, 1985, the partnership reached a final agreement
with SFC for a $720 million price guarantee.13 The agreement
required the DOE Secretary’s approval. It was not forthcoming.
DOE’s Rejection of Price Support Agreement
Notwithstanding DOE’s prior public support for the Great
Plains project and a price guarantee agreement, DOE rejected the
final agreement between SFC and the partnership in a 2-page
letter, dated July 30, 1985, and signed by DOE Secretary
13 Pursuant to this price guarantee assistance agreement, on
Aug. 1, 1985, the partnership would “default” on the payments due
FFB under the standstill agreement, and DOE would use an existing
$673 million reserve to “cure” that default on behalf of the
partnership; repayment of the remaining FFB indebtedness would be
rescheduled so that no significant burden for mandatory principal
payments would be incurred earlier than 1996; price guarantees
would be available. Under this agreement, 80 percent of the
cashflow would be used to repay the DOE-guaranteed debt, and
after that debt was repaid, SFC would be paid. Partners were to
make an additional equity investment of $190 million in the
project.
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