- 24 -
Herrington. Acknowledging that this action was not the fault of
the project sponsors or SFC, this letter stated summarily that
the package “would not be in the best interests of the Nation as
a whole” and that DOE would not support the agreement “as
currently constituted”.
Partners Terminate Participation in the Project
On August 1, 1985, the partners learned of DOE’s rejection
of the financial assistance arrangement. The partners were
surprised and disappointed; they felt that DOE had doublecrossed
them by leading them on in negotiations before summarily
rejecting the agreement on the very day that the project was
declared in-service. The partners immediately exercised their
contractual rights under the partners consent and agreement to
decline to make further capital contributions to the partnership
that otherwise would have been required under the standstill
agreement and the loan guarantee agreement. The written notices
to terminate participation, dated August 1, 1985, were based on
the determination of the partnership’s management committee that,
after Secretary Herrington’s action, there was no longer
reasonable assurance that the project would generate sufficient
cash to permit the partnership to make timely principal and
interest payments on its outstanding debt and to make
distributions over a 10-year period following the in-service date
that were at least equal to the contributed equity. As
Page: Previous 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 NextLast modified: May 25, 2011