US Biodiesel Facility Planned

Southern States Power Co. Inc., a provider of alternative fuels and a member of the National Biodiesel Board, has entered into a memorandum of understanding with Lurgi, PSI Inc. outlining the companies’ intention to develop a state-of-the-art 30 million gallon per year biodiesel facility in Riverside, California.

ONTARIO, California 2002-03-18 [] The facility will be designed to produce fuel that meets the highest standards in the biodiesel industry and would be the largest biodiesel facility in the United States. Southern States Power Co. also announced that it has entered into an agreement with Imperial Western Products for the restructuring of the companies’ joint venture regarding the Coachella Valley Production Facility. Under the terms of the agreement, the parties will share an equal distribution of the revenues from fuel produced at the Coachella plant, which will remain unchanged for a minimum of 12 months, with the possibility of an extension with the approval by both parties. Southern States Power Co. will retain a 50 percent profit split in addition to a US$0.10 per gallon royalty for all fuel produced and sold under the United States Department of Agriculture subsidy program that has been assigned to the facility. The agreement further provides that Southern States Power Co. will be reimbursed for all costs related to the construction of the Coachella facility in consideration of the transfer of all Southern States Power Co.’s ownership in the facility and equipment. The U.S.D.A. subsidy previously granted to Southern States Power Co. for production of biodiesel at the Coachella facility is now being assigned to Imperial Western Products, allowing Southern States Power Co. to fulfill its US$7.5 million subsidy through the Riverside facility, as well as other planned facilities in California, Arizona and Nevada.
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