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HomeMy WebLinkAboutPlanergy Waterloo LLC-6/27/2011Mayor BUCK CLARK COUNCIL MEMBERS DAVID JONES Ward 1 CAROLYN COLE Ward 2 HAROLD GETTY Ward 3 QUENTIN M. HART Ward 4 RON WELPER Ward S BOB GREENWOOD At -Large STEVE SCHMITT At -Large RECEIVED JUN 1 r 201, ee CITY OF WATERLOO. IOWA, June 2, 2011 Mr. John Sprangers Planergy Capital- -"/y� iSzOi 680 Commerce Dr., Suite 270 Woodbury, MN 55125 Re: City of Waterloo - Planergy Dear Mr. Sprangers: iUV 2011 This letter confirms terms negotiated by Planergy and the City with respect to the handling of account arrearages, temporary reduction in pricing, and related matters. During the limited period that the terms of this letter agreement are in effect, the terms stated in this letter will prevail over any contradictory terms in the. Gas Rights Purchase and Operation Agreement between the parties, dated as of May 1, 2006 (referred to as the Contract). Subject to the foregoing, the parties have worked out the following terms: 1. Price reduction., Commencing with the next invoice to be issued, the price of gas will be reduced from $1.00 per net mmbtu of methane to $0.50 net mmbtu of methane. For clarity, the first invoice to be issued with this modified pricing will be the invoice for January 2011 usage. Invoices covering uses for January, February, and March 2011 will be paid at the rate of no less than $1,000.00 per month until all sums due under these invoices have been paid in full. Invoices issued for usage in April 2011 and later months will be paid within 30 days of billing, or such invoices will incur a late charge of .75 % per month until the invoice has been paid in full. 2. Amounts in Arrears. Planergy is in arrears on invoices for 2010 usage totaling $49,176.75. Planergy also owes the City past -due annual fees totaling $8,000.00 and a payment of $24,225.72 pertaining to an underage in 2008 as compared to Northern DMARC pricing. The parties agree that the City is not waiving its claim for these amounts, and we agree to address repayment on terms to be negotiated when the parties later discuss an amendment to the Contract. CITY WEBSITE: wwvv.cityofivaterlooiowa.com WE'RE WORKING FOR YOUI An Equal Oppordmky/AffrmativeAction Employer Mr. John Spranger RE: City of Waterloo — Planergy • June 2, 2011 Page 2 of 3 3. Contract Renegotiation. The parties acknowledge that the volume of gas produced at the anaerobic lagoon has been below expectations and that the City is attempting alternative methods to raise the volume of gas production. At such time that gas volumes from the lagoon are at least 22,500 mmbtu for two consecutive months, the parties will renegotiate the gas price terms under the Contract and execute a suitable amendment to the Contract. These negotiations will occur promptly, and be pursued in good faith and with diligence, after the volume threshold stated above has been met. As stated in the Contract, the City makes no promises or guarantees as to the quality or quantity of gas that may be produced. 4. Financial Information. During the effective period for the terms of this letter agreement, Planergy will provide its updated income statements and balance sheets within 30 days following each June 30 and December 31. 5.. Confidentiality. Planergy has advised the City that financial and other information that Planergy provides must be maintained as confidential under applicable regulations and agreements that Planergy has with third parties. Planergy has indicated that it would not provide this information to the City unless it is held in confidence and not be made available for public examination or disclosure. Therefore, the City agrees to hold this information as confidential. If you concur with the above terms, please have this letter agreement executed in duplicate by a duly authorized representative of Planergy. On the City's side, this letter agreement must be approved by the City Council before it can be signed by the Mayor and made binding upon the City. We will attempt to secure this approval at the earliest possible date following Planergy's approval. The parties agree that counterpart signatures to this letter are acceptable, that copies will be treated as originals, and that all of such signatures taken together will constitute one and the same document. Thank you for your cooperation in addressing the issues between us. Very truly yours, Smith uperintendent, Waste Management Services John Sprangers Re: City of Waterloo - Planergy June 2, 2011 Page 3 of 3 By their signatures below, the undersigned represent that they have been duly authorized to execute this letter agreement and that the foregoing terms are binding. Planergy Waterloo, LLC copy: Mayor Clark Michelle Weidner Chris Wendland City of W;� erloo, Iowa Ernest G. Clark, Mayor Attest:— Suzy ttest: Suzy Schars, City Clerk