Resolution No. 5955
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RESOLUTION NO. 5955
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A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF VERNON APPROVING AND AUTHORIZING
THE EXECUTION OF A LETTER OF INTENT
REGARDING PURCHASE OF AN EARLY PRODUCTION
2 MEGAWATT CARBONATE FUEL CELL POWER PLANT
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WHEREAS, the city of Vernon joined the Fuel Cell
8 Commercialization Group (FCCG) on August 20, 1990 because of the
9 City's interest in purchasing an early production 2-megawatt
10 carbonate fuel cell power plant (EPU) when production begins;
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12 WHEREAS, the Fuel Cell Engineering Corporation (FCEC)
13 requires market commitments from members of the FCCG to obtain
14 funding from utility participants and third-party lenders for
15 prOduction of EPUs; and
16 WHEREAS, the Ci ty and FCEC still need to negotiate a
17 contract for purchase of an EPU, even after expression of a
18 market commitment for such a purchase by the City.
19 NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF
20 THE CITY OF VERNON AS FOLLOWS:
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SECTION 1: The City Council of the City of Vernon
22 hereby finds and determines that the recitals contained
23 hereinabove are true and correct.
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SECTION 2: The City Council of the City of Vernon
25 hereby approves execution of the Letter of Intent, a copy of
26 which has been presented to the City Council concurrently with
27 this resolution, and the City Council hereby orders said Letter
28 of Intent to be received and filed by the City Clerk.
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SECTION 3: The City Council of the City of Vernon
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hereby authorizes the Mayor to execute said Letter of Intent
for, and on behalf of, the city of Vernon.
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SECTION 4: The City Clerk of the City of Vernon shall
certify to the passage of this resolution and thereupon and
thereafter the same shall be in full force and effect.
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APPROVED AND ADOPTED this 16th day of July, 1991.
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BRUCE V. MALKENHORST, City Clerk
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STATE OF CALIFORNIA )
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COUNTY OF LOS ANGELES )
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I, BRUCE V. MALKENHORST, City Clerk of the City of
4 Vernon, do hereby certify that the foregoing Resolution, being
5 Resolution No. 5955, was duly adopted by the City Council of the
6 City of Vernon at a regular meeting of the City Council duly
7 held on Tuesday, July 16, 1991, and thereafter was duly signed
8 by the Mayor of the City of Vernon.
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CITY COUNCIL
LEONIS C. MALBURG, Mayor
THOMAS A. YBARRA, Mayor Pro-Tern
Wm. "BILL" DAVIS
H. "LARRY" GONZALES
W. MICHAEL McCORMICK
TELEPHONES
CITY CLERK................ 583-8811
POLICE DEPT. ..............587-5171
FIRE DEPT. . . . . . . . . . . . . . . . . .583-4821
BUILDING DEPT. ... . . . . . . . . .583-8811
PUBLIC WORKS DEPT. . . . . . . . 5~3-8811
HEALTH DEPT. .............583-8811
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OFFICERS
BRUCE V. MALKENHORST,
City Administrator/City Clerk
DAVID B. BREARLEY,
City Attorney
VICTOR H. V AITS,
Director of Community Services
KENNETH J. DEDARIO
Director of Ught & Power
LARRY SPADT,
Fire Chief
CITY HALL
LOUIS ROSENKRANTZ
Police Chief
In Reply Refer to:
4305 SANTA FE AVENUE, VERNON, CALIFORNIA 90058
LETTER OF INTENT
July 16, 1991
Mr. Robert F. Riordan, President
Fuel Cell Engineering corporation
3 Great Pasture Road
Danbury, Connecticut 06813
Re: 2 MW Early Production Unit Fuel Cell Power Plant
Dear Mr. Riordan:
The City of Vernon ("the City") has been a member in good
standing of the Fuel Cell Commercialization Group ("FCCG") since
August 20, 1990. The City joined the FCCG because of its
interest in securing one of the Fuel Cell Engineering
Corporation's ("FCEC") early production 2 MW carbonate fuel cell
power plants, according to the understandings contained in the
agreement entitled "Principles and Framework for commerciali~ing
Direct Fuel Cell Power Plants" dated January 11, 1990 ("January
1990 Agreement").
This letter indicates the City's intent to execute a formal
contract with FCEC for the purchase of a single 2 MW early
production unit fuel cell power plant ("EPU"), subject to
negotiation of a mutually satisfactory contract based on the
January 1990 Agreement and subject to terms consistent with the
City'S standard contractual requirements.
The city is indicating its good faith at this time to enter
into a contract with FCEC for an EPU for three reasons. First,
the City understands the need both for the utility participants
funding the first demonstration unit of FCEC's EPUs
("Demonstration Group") to have adequate assurances that
sufficient market commitments exist for successful commerciali-
zation of the technology and for sufficient letters of intent for
EPUs to be in place before demonstration unit manufacturing can
begin.
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Mr. Robert F. Riordan
July 8, 1991
Page 2
Second, it is the formal policy of the FCCG that members of
the FCCG shall formally sign a contract with the FCEC within a
reasonable period after the model contract is accepted by the
FCCG Board in order to maintain their order of royalty payment.
The City has been following the development of this model
contract, and it seems likely that the model contract will
provide a basis for the City's negotiating its own contract with
FCEC.
Third, the ci ty understands that letters of intent will be
useful in securing additional third-party funding to support
FCEC's investment in manufacturing facilities and other
commercialization requirements.
with this expression of its intent,. the city wishes to
encourage FCEC to develop the information "necessary for the
negotiation of a formal contract in a timely manner. The entire
fuel cell commercialization ini tiati ve depends on adherence by
all parties to stated schedules.
Very truly yours,
~niSC'. ~lb
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cc: Mr. Paul Eichenberger
Santa Clara Demonstration Group
Mr. Jeffrey Serfass
Fuel Cell Commercialization Group
MESSAGE
DATE July 25, 1991
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SU~ECT Letter of Intent - Fuel Cell Power Plant
Per your request for addresses of Paul Eichenberger and Jeffrey Serfass:
Mr. Jeffrey A. Serfass, Executive Director, Fuel Cell Commercialization
1101 Connecticut Avenue, N.W., Suite 910, Washington, D.C. 20036;
Mr. Paul Eichenberger, Chairman, Santa Clara Demonstration Group--ask
Ken DeDario because letter that he sent to us does not have.
***
Per Mr. DeDario, Eichenberger's address is: City of Santa Clara Electric
Department, 1500 Warburton Avenue, Santa Clara, CA 95050.
o PLEASE REPLY
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SUBJECT Letter of Intent - Fuel Cell Power Plant
DATE J u 1 Y 25, 19 91
MESSAGE
Per your request for addresses of Paul Eichenberger and Jeffrey Serfass:
Mr. Jeffrey A. Serfass, Executive Director, Fuel Cell Commercialization
1101 Connecticut Avenue, N.W., Suite 910, Washington, D.C. 20036;
Mr. Paul Eichenberger, Chairman, Santa Clara Demonstration Group--ask
Ken DeDario because letter that he sent to us does not have.
o PLEASE REPLY
o NO REPLY NECESSARY
SIGNEO
PLEAse INFORM US IMMEDIATELY IF YOU DO NOT RECEIVE FACSIMilE IN FULL
REPLY
DATE
FAX REPlY
NO. OF
PAGES
INCLUDING THIS
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.SIGNED