Title
Possible Approval of the Termination and Settlement Agreement and Release of Claims between the Incorporated County of Los Alamos, New Mexico, and Uniper Global Commodities North America LLC
Recommended Action
I move that Council approve the Termination and Settlement Agreement and Release of Claims between the Incorporated County of Los Alamos, New Mexico, and Uniper Global Commodities North America LLC.
Utilities Manager's Recommendation
The County Manager recommends that Council approve the motion as presented.
Board, Commission or Committee Recommendation
The Board of Public Utilities approved this Agreement and Release at their March 6, 2024 Work Session and recommends that Council approve the motion as presented.
Body
On February 4, 2020, the Incorporated County of Los Alamos (LAC) and Uniper Global Commodities North America LLC (UGCNA) entered into a 15 MegaWatt (MW), 15-year, Power and Renewable Energy Credit Sales Agreement, AGR20-926, amended on February 2, 2021 by AGR20-926-A1.
On January 12, 2022, LAC and UGCNA entered into a separate 25 MW, 33-month, Power and Renewable Energy Credit Sales Agreement, Agreement No. AGR22-928.
Due to circumstances outside of UGCNA control (See Attachment B press release.), LAC and UGCNA have mutually agreed to termination of these aforementioned agreements, under the terms set forth in the Termination and Settlement Agreement and Release of Claims between the Incorporated County of Los Alamos, New Mexico, and Uniper Global Commodities North America LLC.
Under the Termination and Settlement Agreement and Release of Claims, LAC and UGCNA have agreed to the following:
1. As consideration for the termination of the PPA Agreement, UGCNA shall pay LAC an amount equal to FIFTY-EIGHT MILLION DOLLARS AND ZERO CENTS ($58,000,000.00).
2. To settle any existing and all potential obligations, liabilities, claims and disputes and differences between them by executing and performing the Termination and Settlement Agreement and Release of Claims.
3. Recognize that by the execution and performance of the Termination and Settlement Agreement and Release of Claims, both parties are relinquishing all their respective legal rights with respect to any claims arising under or associated in any way with the Power and Renewable Energy Credit Sales Agreements and amendment.
4. The effective date is April 1, 2024 for the Termination and Settlement Agreement and Release of Claims between LAC and UGCNA.
5. The termination of the agreements and release of waiver of claims by the parties will become effective only when LAC has received the full amount of the termination payment from UGCNA.
Alternatives
If this action is rejected, then DPU will need to accept or mitigate the resulting risk impacts including unplanned termination of the agreements.
Fiscal and Staff Impact/Planned Item
$58 million payment to LAC. Staff impact limited to normal work functions and scheduled hours.
Attachments
A - Uniper Termination Settlement and Release Agreement
B - 2022 EU Commission Uniper Stabilization Package Press Release
C - AGR20-926 - Uniper Power Sales Agreement - SIGNED
D - AGR20-926-A1 - Uniper Power Sales Agreement - SIGNED
E - AGR22-928 - Uniper 25 MW 33-month PPA CC approved 1-4-22