Power Purchase Agreement
The Ounalashka Corporation and Chena Power signed a 30-year power purchase agreement, (PPA), with the City of Unalaska on August 31, 2020 for a 30MW of geothermal produced electrical energy.
The agreement satisfies a key step enabling the Makushin Geothermal Project to proceed to financing and continue to a scheduled commercial operation date in the final quarter of 2023. The capacity of the facility will accommodate all of Unalaska’s current and known potential customer base. The benefits of geothermal offer greatly reduced greenhouse gas emissions, provide the region and its customers energy security, as well as accelerate the diversity of its economic base.
The project will be financed by a combination of debt and equity. Options currently being explored, and combinations thereof, are:
OCCP self funding
Sell up to 30% equity in the LLC
65% debt financing
Financing via energy related bonds
Monetization of available investment tax credits
OCCP has complied its due diligence studies, pro-forma analysis, class 3 level estimate and will arrive at the right combination of investment/banking partners in the short term. Several funding options are being pursued concurrently.
OCCP expects to invest over $75M in cash and value to the project, prior to achieving full project sanctioning by May 2022.
There are many nuances to the requirements and by far, the outline below is not comprehensive, but in nutshell;
Federal: The leased land has all been conveyed to Aleut Corporation and OC, i.e. the lands are private (and now entirely in OC’s control). The only major federal agencies that will be involved will be the USACOE, (Nationwide linear permitting, and dredge and fill of waters and coastal alterations). A NPDES will not be necessary because of the reinjection of fluids. Because of the expected low impact of this project, it’s unlikely a EIS will not be required.
State: The Alaska Department of Fish and Game (ADF&G) will have active permitting interest. Road and pipeline development will affect streams with fish resources, so permits will be needed for bridges, culverts, buried pipes and cable stream crossing, etc. The Alaska Oil And Gas Conservation Commission and Alaska Department of Environmental Conservation (ADEC) may be involved with permitting reinjection of geothermal fluids through its wastewater discharge permit program. ADEC will also be involved with air quality permitting.
In June 2021, the permitting for the subsea cable portion of the project will begin.
After a detailed project description is developed, assuming an EIS is not required, we expect permitting process to be completed in 8 - 12 months.