Pro Formas for On Site Power Generation

[joan271273]

Can someone assist me with some guidance on Pro Forma calculations. I am to evaluate the &quot;economics&quot; of a Natural Gas electric power plant ( <10MW ). This is what I think I need to do:

a) Calculate my overall investment for ths plant ( Design,Procurement and Construction costs ).I CAN GET THESE COSTS.

b) Electrical Power and Gas rates by the Utility. Including future rate changes.I CAN GET THESE COSTS.

c) Associated costs for maintenance and operation. UNKNOWN VALUE TO ME.

d) Depreciation Costs. UNKNOWN TO ME.

Can someone help me with this type of calculations, is there standard spreadsheet for this type of calc. Any help is appreciated.

 

[steve58]

joan271273:

The spreadsheet that is used quite a bit is Excel but this does not tell you how to develop a proforma. The initial model is generally developed by your financial folks to ensure it captures all of the necessary costs/impacts.

It really depends on what the proforma is intended to support. If it is for an investment decision, then you should get some help to build a detailed income statement/balance sheet model over the investment life to evaluate the true corporate impacts. These impacts are going to be dependent on your company's focus. Some companies may find the dilution on earnings in the early years to be the most important thing. Others will be focused on cash flow or IRR, etc. However, if the proforma is only a &quot;back of the envelope&quot;, then you can make it less detailed and probably make enough assumptions to do a reasonable first cut.

You should also consider development costs (regulatory, permitting, land purchases, legal, g&a, financing, etc.) as part of the investment costs.

Also, don't forget things like taxes (sales/use taxes, property taxes, income taxes) and debt service.

 

[joan271273]

Right now the whloe Pro Forma deal is up to me, I have to get it into ceratin shape before the &quot;financial folks&quot; look at it and tweak it. My original posting had the data I do not know how to get and would like some help. When I mentioned the Excel Spredsheet , I was just looking for a sample ( no need to invent the wheel , if someone is willing to share ).

Thanks for your response

 

[peterb]

joan -
Some typical O&M costs in cents/kWh(order of magnitude estimate quality) -

Steam turbines - 0.10-0.25
Gas turbines - 0.25 - 0.60
Gas recip engines-
Low speed (120-900 RPM, >10 MW) - 0.70-1.00
Medium speed (900-1200 RPM, 1-10 MW) - 1.00-1.20
High speed (1200-1800 RPM, <1 MW) - 1.20-1.50

These figures are from a 1996 cogeneration seminar and should give you some idea of the range involved.

 

[BJC]

Depreciation is not a cost pe say. It doesn't generate money but does offset earnings so it looks like a cost. Check with a your bean counters.
MAke as much of the project as you can temporary or portable. If you put the thing on wheels and use portable buildings you can use a more accelerated depreciation schedule. It can decrease the payback period significantly.

 

[jbartos]

Suggestion: Visit

http://www.apctt.org/database/to5001.html

http://www.genergypower.com/

for more info
Also, try literature, e.g.
Introduction to Depreciation of Public Utility Plant and Plant of Other Industries
by Depreciation Accounting Committe