to Refinance Loan, Save Money
Four Dam Pool can pay back AIDEA loans, help keep electric rates low
May 01, 2004
Representative Bill Williams (R-Saxman), the sponsor of House Bill 495, said the legislation would help electric ratepayers in six Alaskan communities. "With passage of this bill, the Four Dam Pool utilities will be able to refinance with private lenders, reducing their interest rates and administrative costs. These are savings that can be passed on to consumers in Ketchikan, Petersburg, Wrangell, Kodiak, Valdez and Glenallen."
The Four Dam Pool is comprised of six electric utilities, which own four hydroelectric power plants in Southeast Alaska, Kodiak and Copper Valley. HB 495, which passed the House unanimously today, makes it clear that the FDPPA is a political subdivision of the state for the purposes of securities law. This is necessary if the Four Dam Pool agency is to avoid some expensive and damaging hurdles having to do with registration of securities under certain bond sale circumstances. The legislation also allows the agency to mortgage the four dam pool assets. Such a mortgage will probably be necessary for the agency to sell bonds to develop its facilities. The assets are presently mortgaged to AIDEA, just as they would be mortgaged to the new lenders.
The legislation re-states the important principal established by the legislature that the Four Dam Pool assets may not be sold to a party outside the FDPPA without legislative approval. However, it makes it clear that mortgaging the assets, or a foreclosure under the terms of that mortgage, does not constitute a sale under this restriction, providing that certain requirements are met.
Representative Williams said, "An additional benefit of HB 495 is that the Four Dam Pool will be able to return about $74 million to AIDEA, which will be available for other important economic development projects. This is a win-win-win situation. It's good for the utilities, good for AIDEA and good for ratepayers."
HB 495 now goes to the Senate, where Representative Williams says he is hopeful it will receive the same kind of support it got in the House.
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