Message-ID: <1525406.1075849735878.JavaMail.evans@thyme> Date: Wed, 20 Dec 2000 00:50:00 -0800 (PST) From: kevin.presto@enron.com To: john.lavorato@enron.com Subject: New Albany Booking Cc: rogers.herndon@enron.com, jenny.latham@enron.com, don.miller@enron.com Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit Bcc: rogers.herndon@enron.com, jenny.latham@enron.com, don.miller@enron.com X-From: Kevin M Presto X-To: John J Lavorato X-cc: Rogers Herndon, Jenny Latham, Don Miller X-bcc: X-Folder: \Kevin_Presto_Nov2001\Notes Folders\Discussion threads X-Origin: PRESTO-K X-FileName: kpresto.nsf Below are the assumptions agreed for booking the New Albany spread option: EPMI East Power Book pays New Albany a fixed demand charge for the next 5 years as follows: 2001 $4.72/k/mo 2002 $4.63/kw/mo 2003 $4.54/kw/mo 2004 $4.45/kw/mo 2005 $4.36/kw/mo As consideration for the demand charge, EPMI has the right to "toll" gas through the facility and receive power in return at a fixed heat rate conversion factor of 12.5 MMBtu/Mwh. In addition EPMI will pay New Albany $1000 per start (for maintenance reserve fund) and $1.00/Mwh for variable operating costs. The New Albany, LLC will receive an 8% return on capital. Book value will be depreciated from $409/kW basis on 1/1/2001 to $336/kW on 12/31/2005. The facility output assumption is 360 MW with a 95% availability in the summer and 75% availability in the winter. Jenny - Please revise the booking of New Albany in Rogers book effective tonight. ---------------------- Forwarded by Kevin M Presto/HOU/ECT on 12/20/2000 08:41 AM --------------------------- John J Lavorato@ENRON 12/11/2000 07:47 AM To: Kevin M Presto/HOU/ECT@ECT cc: Subject: The following points refer to the methodology that we are taking to rebook the New Albany Plant. Please send me a note immediately if you disagree. Assume that NewAlb is a non mark to market entity and Enron is the mark to market entity. However, it is fully owned and operated by us for now. * The power mark to market book will pay NewAlb a capacity payment of $4.87 for 5 years. We shaped this payment as follows: 2001 - $5.06 2002 - $4.96 2003 - $4.86 2004 - $4.75 2005 - $4.65 * This payments allows Enron to supply gas to NewAlb and receive power. * Enron will pay NewAlb $1000 per unit start. * Enron will also pay NewAlb $2.00/MW hour for varialbe o&m. * This will create an entity "NewAlb" that will return 9% assuming a book value of $336/kw on 12/31/2005 vs. 409 currently. * If NewAlb pays the 9% out that entity should be relatively flat each year for the next five.