(Anchorage) - The Alaska Industrial Development and Export Authority (AIDEA), Golden Valley Electric Association (GVEA) and Homer Electric Association, Inc. (HEA) have approved terms for the sale of Healy Clean Coal Project (HCCP) to GVEA (see January 9, 2009 HCCP Settlement Term Sheet which accompanies this Press Release). The action will result in agreements leading to the end of litigation and bring HCCP on-line for the maximum value and benefit to Railbelt electric consumers. 

Construction and testing of the experimental plant was completed in the 1990s with federal and state funding, including a grant from the U.S. Department of Energy. HCCP has not been in operation since 2000. 

Under the terms approved by AIDEA, GVEA and HEA, the Healy Clean Coal Project will be sold to GVEA for $50 million. AIDEA will finance the sale at five percent interest and provide GVEA a $45 million line of credit at six and one-half percent for HCCP restart costs, both amortized over 25 years. Additionally, this agreement provides that HEA will purchase from GVEA half of the plant's energy and capacity starting in 2014.  

"Years of conflict have been set aside, and recent good-faith negotiations have produced a positive result for all concerned parties," said AIDEA Board Chairman Pat Galvin.  

"During the negotiations, AIDEA maintained four objectives," Galvin stated. "First, place HCCP on-line for the benefit of Alaskans. Second, negotiate an agreement for the sale of HCCP. Third, the sale price must be fair and reasonable to AIDEA and should not impact AIDEA's bond rating, financial health, or ability to execute its mission. Finally, retain good business relations with all parties. This historic agreement fulfills these objectives and brings years of dispute to an end. It is a good day for Alaska."  

"Homer Electric Association is fully supportive of the settlement terms," said HEA Board President Debbie Debnam. "The Healy Clean Coal Project will provide HEA with needed diversification of our fuel sources, and has the potential to produce much-needed low cost power for the Railbelt region." 

A trial between AIDEA and GVEA to resolve current litigation is scheduled to begin on June 1. Under the terms of the Settlement Term Sheet, the parties will postpone certain pre-trial activities until February 15 as work continues on more details of the sales transaction. Reaching agreement on these further details will lead to the trial's postponement. The trial will be dismissed when the transaction is complete. 

"This is excellent news for Interior electric consumers," said GVEA Board Chairman Bill Nordmark. "The GVEA Board responded to members' requests to take ownership of this plant and strengthen the local economy by using local coal resources." 

"The settlement terms benefit all the parties involved with the Healy Clean Coal Project. The members of Homer Electric Association and Golden Valley Electric Association will have access to economical, reliable power, and AIDEA will begin to see a return on its investment in the Healy Clean Coal Project," concluded HEA Board President Debbie Debnam.