UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) June 1, 1997
RIDGEWOOD ELECTRIC POWER TRUST I
(Exact name of Registrant as Specified in Charter)
Delaware 0-24240 22-3105824
(State or other (Commission (IRS Employer
jurisdiction file number) Identification Number)
of incorporation)
947 Linwood Avenue, Ridgewood, New Jersey 07450-2939
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (201) 447-9000
<PAGE>
Item 2. Acquisition or Disposition of Assets.
The Registrant, Ridgewood Electric Power Trust I(the "Trust"), previously
owned a limited partnership interest in Brea Power Partners, L.P., a
Delaware limited partnership (the "Partnership") that owns a 5.7 megawatt
capacity electric generating station fueled by landfill gas (the
"Facility") located at the Olinda landfill at Brea, California. The
Trust's original limited partnership interest essentially was designed to
allow it to recover its initial investment of $3.1 million and to provide
an internal rate of return of approximately 15% per year, and to yield a
small residual amount thereafter. The limited partnership interest was
entitled to 98% of all profits and losses of the Partnership and of all
distributions of cash flow up to a scheduled amount per year ($726,000 for
1997); thereafter, it was entitled to 25% of any excess cash available for
distribution in that year. When cumulative distributions to the Trust in
respect of the limited partnership interest, discounted to present value at
1.17% per month, reached $3.1 million (which was expected to occur no later
than 2004), the Trust's annual interest in profits and losses would be
reduced to 5%.
The owner of the remaining limited partnership interest in the Partnership
was GSF Energy, LLC, an indirect subsidiary of DQE Corporation. DQE is a
holding company for Duquesne Light Company of Pittsburgh, Pennsylvania.
GSF Energy, LLC also owned the general partner of the Partnership, which
had a 1% interest in the Partnership's profits and losses.
On June 1, 1997, the Trust through subsidiaries acquired the general
partnership interest and the limited partnership interest owned by GSF
Energy, LLC for the base price of $3,000,000, and thus acquired the entire
beneficial interest in the Partnership. The parties agreed that the base
price was to be adjusted for operating cash flow generated and cash
distributions made by the Partnership from the effective date of January 1,
1997 through May 31, 1997 and for the Partnership's current assets at the
closing date. The purchase price as so adjusted was $2,797,000, inclusive
of a cash payment of $2,257,000 to the seller, assumed liabilities of
$441,000 and acquisition costs of approximately $100,000. The total cost
to the Trust of the entire equity interest in the Facility is therefore
$5,900,000.
Neither GSF Energy, LLC nor DQE Corporation is affiliated with or has any
material relationship with the Trust, its Managing Shareholder or their
affiliates, directors, officers or associates of their directors and
officers, other than their prior relationships with the Partnership. The
sales price and the terms of the acquisition were determined in arm's
length negotiations between the Managing Shareholder of the Trust and
representatives of DQE Corporation. The source of the Trust's funds was
cash reserves derived from the previously reported settlement of litigation
with Virginia Electric Power Company relating to the Trust's South Boston,
Virginia electric power plant.
All electricity generated by the Facility over and above its own
requirements is sold to Southern California Edison Company under a long-
term power purchase contract expiring in 2004 at the greater of 5.8 cents
per kilowatt-hour or 85% of the utility's avoided cost, plus capacity and
peak capacity payments. The Facility is liable to Southern California
Edison Company for liquidated damages of up to $3.8 million if it does not
meet defined performance and availability standards. Under current
conditions, the Trust does not believe that there will be any material
liability for failure to meet these requirements.
The Trust's purchase includes only the electric power generating station
located at the landfill. GSF Energy, LLC has retained ownership of the
landfill gas collection system and the processing units located outside the
Facility building and will continue to supply the Facility with landfill
gas fuel under an amended gas purchase and supply agreement. Under that
agreement, GSF Energy, LLC will sell gas to the Facility at a price of
approximately $.70 per million British Thermal Units of heat equivalent
(escalating at 3.7% per year) plus an additional fixed payment, effective
as of January 1, 1997, of $12,500 annually (escalated at 3.7% per year).
If the gas supplied is insufficient to operate the generators at assumed
levels, the Partnership may take action to remedy the deficiency. Further,
in that instance GSF Energy, LLC would be liable to the Partnership for
damages of up to $3.1 million on a cumulative basis. The gas supply
agreement expires on the later of December 31, 2004 or the stated term of
the power contract.
An affiliate of DQE operated the Facility under an operations and
maintenance agreement. For 1996, the base fees paid were $906,000 and
incentive payments totalled an additional $339,000. The operations and
maintenance agreement has been terminated and Ridgewood Power Management
Corporation, an affiliate of the Trust's Managing Shareholder, will operate
the Facility. It will be reimbursed by the Partnership for its actual
costs incurred and allocable overhead expenses but will not otherwise be
compensated.
Item 7. Financial Statements, Pro Forma Financial Information
and Exhibits.
The audited historical and unaudited pro forma financial
statements required by Regulation S-K are being converted into electronic
format and cannot be furnished at this time. They will be provided by
amendment to this Current Report no later than August 14, 1997.
(c) Exhibits.
Exhibit No. Item
2.A Acquisition Agreement, by and between GSF Energy, L.L.C. and
Olinda, L.L.C., dated as of May 31, 1997. To be filed by amendment.
2.B Letter, dated as of May 31, 1997, supplementing Acquisition
Agreement.
10.I Amendment to Transaction Documents, dated as of May 31, 1997,
by and among GSF Energy, L.L.C., Brea Power Partners, L.P. and Ridgewood
Electric Power Trust I. To be filed by amendment.
10.J Parallel Generation Agreement, by and between Southern
California Edison Company and GSF Energy, Inc. (Brea Power Partners, L.P.,
assignee), as amended. To be filed by amendment.
10.K Partial Assignment and Assumption Agreement, dated as of
Nevember 29, 1994, by and between GSF Energy, Inc. and Brea Power Partners,
L.P. To be filed by amendment.
10.L Amended and Restated Gas Lease Agreement, dated as of December
14, 1993, by and between the County of Orange, California and GSF Energy,
Inc., as modified. To be filed by amendment.
10.M Gas Sale and Purchase Agreement, dated November 29, 1994 by and
between GSF Energy, Inc. and Brea Power Partners, L.P. To be filed by
amendment.
10.N Support Agreement, dated as of November 29, 1994, by and among
Brea Power Partners, L.P., the Trust and GSF Energy, Inc. To be filed by
amendment.
Exhibits and schedules to these exhibits are omitted, and lists of the
omitted documents are found in their tables of contents. The Registrant
agrees to furnish supplementally a copy of any omitted exhibit or schedule
to these exhibits to the Commission upon request.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned hereunto duly authorized.
RIDGEWOOD ELECTRIC POWER TRUST I
By: /s/ Martin V. Quinn
Martin V. Quinn, Senior Vice
President and Chief Financial
Officer
May 31, 1997
GSF Energy, L.L.C.
3321 Bee Caves Road
Suite 300
Austin, Texas 38746
Dear Sirs:
Reference is made to the Acquisition Agreement dated as of May
31, 1997 between GSF Energy, L.L.C., as Seller, and Olinda, L.L.C., as
Buyer (the "Acquisition Agreement"). Capitalized terms used herein shall
have the same meanings as set forth in the Acquisition Agreement.
Under the Acquisition Agreement and related documents (a) Buyer
is to pay to Seller the sum of $3,000,000 as the Aggregate Purchase Price
for the LP Interest in the Partnership and for the stock of Brea, (b)
Seller is to receive the Excluded Assets and assume the Retained
Liabilities, and (c) Seller is to pay to Buyer the aggregate amount of
$372,397 with respect to the agreed results of operations of the
Partnership from and after January 1, 1997.
In order to facilitate the closing of the Acquisition Agreement,
Buyer and Seller have agreed to handle the transfer of funds as follows:
(a) Buyer will make a net transfer of immediately available funds of
$2,256,497.12, receipt of which is acknowledged, calculated as follows:
$3,000,000.00 Purchase Price
(372,397.00) Agreed Results of Operations
(441,121.27) Estimated Accounts Payables
70,015.39 Estimated Cash in Bank Account
$2,256,497.12 Total
(b) Buyer will apply the $441,121.27 retained by it, as well as the
May 31, 1997 cash balance in the Partnership bank account, to the
satisfaction of the Accounts Payable portion of the Retained Liabilities.
(c) To the extent that the Buyer receives any amount with respect to
the Excluded Asset (estimated at $404,795.64 on the attached Balance
Sheet), then Buyer will promptly pay over such amount to Seller.
(d) Within 60 days after the Closing, Seller will provide the "Final
Settlement Statement" referred to in Section 4 of the Assignment and
Assumption Agreement, and the parties will resolve any dispute as
contemplated by the Assignment and Assumption Agreement.
The foregoing sets forth the parties agreement as to the transfer
of funds at the Closing and is not intended as an amendment or modification
of the Acquisition Agreement and the related agreements.
In addition to the foregoing, Buyer and Seller confirm their
mutual understanding that each party shall furnish to the other, without
additional cost or expense, such electricity, air supply and other support
activities and services as shall be necessary to continue the operations of
the Facility and the gas collection system in accordance with past
practices, including, without limitation, mutual rights of access and other
cooperative efforts necessary to permit the Buyer to monitor, maintain or
replace equipment necessary for the operation of the Facility and to permit
the Seller to monitor, maintain or replace equipment necessary for the
operation of the gas collection system.
If the foregoing accurately sets forth our agreement and mutual
understanding, please sign in the space indicated below.
Sincerely yours,
Olinda, L.L.C.
By: /s/ Mary Louise Olin
Mary Louise Olin
Vice President
Accepted and Agreed:
GSF Energy, L.L.C.
By: Ecogas Corporation, Manager
By:
Jerrel D. Branson
President
