Table 1 - Privately-Owned Financial Analysis

Lake County Resources Biomass Power Plant

Parameter
Input Value

Comments

Summary of Results

General Plant Design Information

Net Present Value (NPV)

Biomass Plant Capacity (Lb/Hr, wet)

(Ton/Day, wet)
Biomass Ash Production (Lb/Hr)
(Ton/Day)

50,000
600
240
2.88

Design Criteria
Calculated
Design Criteria
Calculated

Gross Power Output (kW)

Gross Plant Heat Rate, HHV (Btu/kW-Hr)
Net Power Output(kW)
Net Plant Heat Rate, HHV (Btu/kW-Hr)

14,114
15,057
12,673
16,769

LK-3 Heat Balance

Calculated
LK-3 Heat Balance
Calculated

Process Steam Output (Lb/Hr)

24,000

Design Criteria

Biomass Fuel HHV (Btu/Lb, wet)

Biomass Moisture Content (wt.%)
Biomass Ash Content (wt.%, wet)

4,250.3
50%
0.48%

Design Criteria
Design Criteria
Calculated

Annual Plant Capacity Factor (%)

Annual Operating Hours

80%
7,008

Assumed
Calculated

15.0%
80.0%
6.0%
39.0%
34.0%
6.6%
10

Total Capital Cost Requirement ($)

Assumed
Assume 4:1 Debt/Equity Ratio
Assume Tax Exempt Financing
Taxable Income of $100k to $335k
Taxable Income of $335k to $10M
State of Oregon
Assumed

Economic Factors
Discount Rate (%)
Equity Financed (%)
Interest Rate on Debt (%)
Federal Income Tax Rate A (%)
Federal Income Tax Rate B (%)
State Excise Tax Rate (%)
Equity Amortization Period (Years)
State Renewable Energy Income Tax Credit
Eligible Project Costs ($)
State Income Tax Credit ($)

$10,000,000
3,500,000

($468,064)
Internal Rate of Return (IRR)
14.1%
Capital Cost ($2004)
Total EPC Contract ($)
($/kW)
($/Ton/Day)
Project Financing
Interest During Construction
Plant Licenses/Environmental Permits
Owner's Engineer Cost
WW Metering Installation
Electrical Interconnection Studies
69kV Transmission Line Interconnect
Land Acquisitions/Right-of-Ways
Additional Owner's Costs
Working Capital
Total Installed Cost ($)
Federal/State Capital Cost Support ($)

Input Value
$34,025,000
$2,411
$56,708
$680,500
$2,722,000
$680,500
$680,500
$50,000
$200,000
$900,000
$340,250
$1,701,250
$680,500
$41,980,000
$10,000,000

Comments
Cost Estimate
Calculated
Calculated
Allowance
Allowance
Allowance
Allowance
Allowance
Allowance
3 miles
Allowance
Allowance
Allowance
Calculated
Assumed

$31,980,000 Calculated

Business Energy Tax Credit (BETC)

Incremental cost of system beyond standard practice
35% of eligible project costs

Operating Costs
O&M Cost ($2004)
O&M Cost ($/kW-Hr)
Annual O&M Cost Escalation Rate (%)
Biomass Fuel Cost ($2004)
Dry Field Biomass Fuel Cost, delivered ($/Ton, dry)
Wet Field Biomass Fuel Cost, delivered ($/Ton, wet)
($/MMBtu, HHV)

$0.010
3.0%

Assumed
Assumed

$40.00
$20.00
$2.35

Design Criteria
Calculated
Calculated

24,150
$25.00
$12.50
$1.47

Assumed
Assumed
Calculated
Calculated

Annual Biomass Fuel Cost Escalation Rate (%)

3.0%

Assumed

Federal/State Forest Thinning Subsidy ($/Ton, wet)

$1.25

Assumed

U.S. Forest Service Lands - Thinning (Acres/Yr)

U.S. Forest Service Lands - Thinning ($/Acre)

4,000
$250

Assumed for forest thinning

Assumed

U.S. Bureau of Land Mgmt. - Thinning (Acres/Yr)

U.S. Bureau of Land Mgmt. - Thinning ($/Acre)
Ash Disposal Cost ($2004)
Ash Disposal Cost ($/Ton)
Annual Ash Disposal Cost Escalation Rate (%)
Wastewater (WW) Disposal Cost ($2004)
WW Disposal Cost ($/1000 Gallons)
WW Disposal Rate (Gpm)
Annual WW Disposal Cost Escalation Rate (%)

3,140
$100

Assumed for juniper removal

Assumed

$50.00
3.0%

Design Criteria
Assumed

$2.00
70
3.0%

Cost to discharge to a POTW

Design Criteria
Assumed

$4.50
3.0%

Assumed
Assumed

Dry Sawmill Hogfuel & Shavings (Tons/Yr)

Dry Sawmill Fuel Cost, delivered ($/Ton, dry)
Wet Sawmill Fuel Cost, delivered ($/Ton, wet)
($/MMBtu, HHV)

Revenue
Export Process Steam Revenue ($2004)
Process Steam Price ($/1000 Lb)
Annual Process Steam Price Escalation Rate (%)
Export Power Sales Revenue ($2004)
Electric Power Price ($/kW-Hr)
Annual Power Price Escalation Rate (%)
Renewable Energy Production Incentive ($2004)
Renewable Energy Production Incentive ($/kW-Hr)
Carbon Emission Reduction Credit ($2004)
Carbon Emission Reduction Credit ($)
Annual Carbon Credit Escalation Rate (%)
65555171.xls / GDB

Avoided Cost
3.0%

See PacifiCorp Avoided Cost Sheet

Assumed

$0.018

Assumed

$46,920

Assume 22 metric tons/acre at $4/ton = $1,032,000 annual credit w/$250,000 annual

cost for monitoring. 6% is calculated for biomass displacement and balance to landowner.
Assumed

3.0%

1 of 4

08/19/2011 02:19:31

Table 3 - PacifiCorp Avoided Costs

Below are the annual avoided cost prices for Oregon QFs for project less than 1 MW. These prices have been suspended and are not reflective of the prices
that PacifiCorp would offer in a Power Purchase Agreement for this project.

Year

Avoided Firm
Capacity
Costs
($/kW-yr)
(a)

Exhibit 1
On- & Off- Peak Energy Prices
Total
Capacity Cost
Avoided
Allocated to
Energy Cost
On-Peak Hours
($/MWH)
($/MWH)
(b)
(c)
(a) /(8.76 x
85% x 57%)

Avoided Resource
2003
$0.00
2004
$17.60
2005
$18.04
2006
$18.49
Combined Cycle
2007
$75.81
2008
$77.71
2009
$79.65
2010
$81.64
2011
$83.69
2012
$85.78
2013
$87.92
2014
$90.12
2015
$92.37
2016
$94.68
2017
$97.05
2018
$99.48
2019
$101.96
2020
$104.51
2021
$107.12
2022
$109.80
2023
$112.55
2024
$115.36
2025
$118.25
2026
$121.20
2027
$124.23

$23.40
$24.60
$28.74
$28.31

-1

$33.10
$33.79
$33.27
$31.05
$30.06
$31.00
$31.94
$29.01
$29.66
$31.53
$33.26
$34.17
$35.16
$36.21
$36.31
$37.29
$38.31
$39.37
$40.54
$41.71
$42.89

On-Peak
4,993
Hours

Off-Peak
3,767
Hours

($/MWH)
(d)

($/MWH)
(e)

(b) + (c)

Taxable income over

$
0
50,000
75,000
100,000
335,000
10,000,000
15,000,000
18,333,333

Not over
50,000
75,000
100,000
335,000
10,000,000
15,000,000
18,333,333
..........

(b)

$23.40
$28.74
$32.99
$32.67

$23.40
$24.60
$28.74
$28.31

$17.86
$18.31
$18.77
$19.24
$19.72
$20.21
$20.72
$21.23
$21.76
$22.31
$22.87
$23.44
$24.02
$24.62
$25.24
$25.87
$26.52
$27.18
$27.86
$28.56
$29.27

$50.96
$52.10
$52.04
$50.28
$49.78
$51.21
$52.66
$50.25
$51.43
$53.84
$56.12
$57.61
$59.19
$60.83
$61.55
$63.16
$64.83
$66.55
$68.40
$70.27
$72.16

$33.10
$33.79
$33.27
$31.05
$30.06
$31.00
$31.94
$29.01
$29.66
$31.53
$33.26
$34.17
$35.16
$36.21
$36.31
$37.29
$38.31
$39.37
$40.54
$41.71
$42.89

Tax rate
15%
25%
34%
39%
34%
35%
38%
35%

Avoided Firm
Capacity
Costs
($/kW-yr)
(a)

(b)+
(b)+
(b)+
((a)/8.76 x ((a)/8.76 x ((a)/8.76 x
0.75)
0.85)
0.95)

$0.00
$4.15
$4.25
$4.36

Federal Corporate Income Tax Rates--2004

Year

Exhibit 2
Total Avoided Cost
Total
Total Avoided Costs
Avoided
At Stated Capacity Factor
Energy Cost
75%
85%
80%
($/MWH)
($/MWH) ($/MWH) ($/MWH)
(b)
(c)
(d)
(e)

Avoided Resource
2003
$0.00
2004
$17.60
2005
$18.04
2006
$18.49
Combined Cycle
2007
$75.81
2008
$77.71
2009
$79.65
2010
$81.64
2011
$83.69
2012
$85.78
2013
$87.92
2014
$90.12
2015
$92.37
2016
$94.68
2017
$97.05
2018
$99.48
2019
$101.96
2020
$104.51
2021
$107.12
2022
$109.80
2023
$112.55
2024
$115.36
2025
$118.25
2026
$121.20
2027
$124.23

$23.40
$24.60
$28.74
$28.31
$33.10
$33.79
$33.27
$31.05
$30.06
$31.00
$31.94
$29.01
$29.66
$31.53
$33.26
$34.17
$35.16
$36.21
$36.31
$37.29
$38.31
$39.37
$40.54
$41.71
$42.89

-1

$23.40
$27.28
$31.49
$31.12

$23.40
$26.96
$31.16
$30.79

$23.40
$27.11
$31.31
$30.95

$44.64
$45.62
$45.39
$43.48
$42.80
$44.06
$45.32
$42.73
$43.72
$45.94
$48.03
$49.31
$50.68
$52.12
$52.61
$54.00
$55.44
$56.93
$58.54
$60.16
$61.80

$43.28
$44.23
$43.97
$42.01
$41.30
$42.52
$43.75
$41.11
$42.07
$44.25
$46.29
$47.53
$48.85
$50.25
$50.70
$52.04
$53.43
$54.86
$56.42
$57.99
$59.57

$43.92
$44.88
$44.64
$42.70
$42.00
$43.24
$44.49
$41.87
$42.84
$45.04
$47.11
$48.37
$49.71
$51.12
$51.60
$52.96
$54.37
$55.83
$57.41
$59.00
$60.62

CAPITAL COST AMORTIZATION SCHEDULE

Equity Financed =
Interest Rate =

$25,584,000
6.0%
Debt

Year
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20

2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026

Beginning Amount

Payment

Interest

$25,584,000
$23,642,994
$21,585,528
$19,404,614
$17,092,845
$14,642,370
$12,044,866
$9,291,512
$6,372,957
$3,279,289

$3,476,046
$3,476,046
$3,476,046
$3,476,046
$3,476,046
$3,476,046
$3,476,046
$3,476,046
$3,476,046
$3,476,046

$1,535,040
$1,418,580
$1,295,132
$1,164,277
$1,025,571
$878,542
$722,692
$557,491
$382,377
$196,757

Principle
Repayment
$1,941,006
$2,057,466
$2,180,914
$2,311,769
$2,450,475
$2,597,504
$2,753,354
$2,918,555
$3,093,668
$3,279,289

Additional Debt
Payment

Remaining
Balance
$23,642,994
$21,585,528
$19,404,614
$17,092,845
$14,642,370
$12,044,866
$9,291,512
$6,372,957
$3,279,289
$0

Table 1 - Privately-Owned Financial Analysis

Year -->
From Plant Startup
From Present
PLANT OPERATION
Annual Wet Field Biomass Fuel Quantity (Tons)
Annual Wet Sawmill Fuel Quantity (Tons)
Annual Ash Quantity (Tons)
Annual Process Steam Quantity (1000 Lb)
Annual Net Power Generation (kW/Hr)
Annual PacifiCorp Avoided Cost ($/kW-Hr)
REVENUE
Federal/State Forest Thinning Subsidy ($)
USFS Land Thinning Revenue ($)
USBLM Land Thinning Revenue ($)
Carbon Emission Reduction Credit ($)
Export Process Steam Sales ($)
Renewable Energy Production Incentive ($)
Export Power Sales ($)
Total Revenue
OPERATING EXPENSES
Field Biomass Fuel Cost ($)
Sawmill Biomass Fuel Cost ($)
Ash Disposal Cost ($)
WW Disposal Cost ($)
Operating & Maintenance Labor Cost ($)
Interest on Debt ($)
Total Operating Expenses
EQUITY INVESTMENT
Straight-Line Depreciation ($)
Operating Income ($)
State Excise Taxes ($)
State Renewable Energy Income Tax Credit ($)
Subtotal ($)
Federal Income Taxes ($)
Net Income ($)
Repayment of Debt Principal ($)
Depreciation ($)
Net Cash Flow ($)
Cumulative Cash Flow ($)
Debt Service Cover Ratio (DSCR)

FINANCIAL SUMMARY:

65555171.xls / GDB

2005
-1
2

2006
0
3

2007
1
4

2008
2
5

2009
3
6

2010
4
7

2011
5
8

2012
6
9

2013
7
10

2014
8
11

2015
9
12

2016
10
13

2017
11
14

2018
12
15

2019
13
16

2020
14
17

2021
15
18

2022
16
19

2023
17
20

2024
18
21

2025
19
22

2026
20
23

126,900
48,300
841
168,192
88,812,384
0.0439

126,900
48,300
841
168,192
88,812,384
0.0449

126,900
48,300
841
168,192
88,812,384
0.0446

126,900
48,300
841
168,192
88,812,384
0.0427

126,900
48,300
841
168,192
88,812,384
0.0420

126,900
48,300
841
168,192
88,812,384
0.0432

126,900
48,300
841
168,192
88,812,384
0.0445

126,900
48,300
841
168,192
88,812,384
0.0419

126,900
48,300
841
168,192
88,812,384
0.0428

126,900
48,300
841
168,192
88,812,384
0.0450

126,900
48,300
841
168,192
88,812,384
0.0471

126,900
48,300
841
168,192
88,812,384
0.0484

126,900
48,300
841
168,192
88,812,384
0.0497

126,900
48,300
841
168,192
88,812,384
0.0511

126,900
48,300
841
168,192
88,812,384
0.0516

126,900
48,300
841
168,192
88,812,384
0.0530

126,900
48,300
841
168,192
88,812,384
0.0544

126,900
48,300
841
168,192
88,812,384
0.0558

126,900
48,300
841
168,192
88,812,384
0.0574

126,900
48,300
841
168,192
88,812,384
0.0590

173,334
1,092,727
343,116
51,271
827,046
1,598,623
4,262,105
8,348,222

178,534
1,125,509
353,410
52,809
851,857
1,598,623
4,486,041
8,646,782

183,890
1,159,274
364,012
54,393
877,413
1,598,623
4,595,586
8,833,190

189,407
1,194,052
374,932
56,025
903,735
1,598,623
4,528,143
8,844,917

195,089
1,229,874
386,180
57,706
930,847
1,598,623
4,587,803
8,986,122

200,941
1,266,770
397,766
59,437
958,773
1,598,623
4,864,744
9,347,054

206,970
1,304,773
409,699
61,220
987,536
1,598,623
5,154,999
9,723,820

213,179
1,343,916
421,990
63,057
1,017,162
1,598,623
4,997,404
9,655,330

219,574
1,384,234
434,649
64,948
1,047,677
1,598,623
5,266,706
10,016,411

226,161
1,425,761
447,689
66,897
1,079,107
1,598,623
5,703,235
10,547,473

232,946
1,468,534
461,120
68,904
1,111,480
6,144,073
9,487,056

239,935
1,512,590
474,953
70,971
1,144,825
6,497,222
9,940,495

247,133
1,557,967
489,202
73,100
1,179,169
6,878,087
10,424,658

254,547
1,604,706
503,878
75,293
1,214,545
7,285,932
10,938,900

262,183
1,652,848
518,994
77,552
1,250,981
7,573,859
11,336,417

270,048
1,702,433
534,564
79,878
1,288,510
8,007,069
11,882,503

278,150
1,753,506
550,601
82,275
1,327,166
8,467,240
12,458,937

286,494
1,806,111
567,119
84,743
1,366,981
8,955,604
13,067,052

295,089
1,860,295
584,132
87,285
1,407,990
9,485,710
13,720,501

303,942
1,916,103
601,656
89,904
1,450,230
10,041,018
14,402,853

2,773,341
659,734
45,947
64,326
970,477
$1,535,040
6,048,865

2,856,541
679,526
47,325
66,256
999,591
1,418,580
6,067,819

2,942,238
699,912
48,745
68,243
1,029,579
1,295,132
6,083,848

3,030,505
720,909
50,208
70,291
1,060,466
1,164,277
6,096,655

3,121,420
742,536
51,714
72,399
1,092,280
1,025,571
6,105,920

3,215,062
764,812
53,265
74,571
1,125,049
$878,542
6,111,302

3,311,514
787,757
54,863
76,808
1,158,800
722,692
6,112,435

3,410,860
811,390
56,509
79,113
1,193,564
557,491
6,108,926

3,513,186
835,731
58,204
81,486
1,229,371
382,377
6,100,356

3,618,581
860,803
59,950
83,931
1,266,252
196,757
6,086,275

3,727,139
886,627
61,749
86,448
1,304,240
0
6,066,203

3,838,953
913,226
63,601
89,042
1,343,367
0
6,248,189

3,954,121
940,623
65,509
91,713
1,383,668
0
6,435,635

4,072,745
968,842
67,475
94,465
1,425,178
0
6,628,704

4,194,927
997,907
69,499
97,299
1,467,933
0
6,827,565

4,320,775
1,027,844
71,584
100,217
1,511,971
0
7,032,392

4,450,398
1,058,679
73,731
103,224
1,557,331
0
7,243,364

4,583,910
1,090,440
75,943
106,321
1,604,050
0
7,460,664

4,721,428
1,123,153
78,222
109,510
1,652,172
0
7,684,484

4,863,070
1,156,847
80,568
112,796
1,701,737
0
7,915,019

3,198,000

3,198,000

3,198,000

3,198,000

3,198,000

3,198,000

3,198,000

3,198,000

3,198,000

3,198,000

(898,643)
0
0
(898,643)

(619,037)
0
0
(619,037)

(448,658)
0
0
(448,658)

(449,738)
0
0
(449,738)

(317,798)
0
0
(317,798)

37,752
2,492
0
35,260

413,385
27,283
0
386,101

348,405
22,995
0
325,410

718,056
47,392
0
670,664

1,263,198
83,371
0
1,179,827

3,420,853
225,776
225,776
3,420,853

3,692,306
243,692
243,692
3,692,306

3,989,024
263,276
263,276
3,989,024

4,310,196
284,473
284,473
4,310,196

4,508,852
297,584
297,584
4,508,852

4,850,111
320,107
320,107
4,850,111

5,215,573
344,228
344,228
5,215,573

5,606,387
370,022
370,022
5,606,387

6,036,016
398,377
0
5,637,639

6,487,834
428,197
0
6,059,637

0
(898,643)
$1,941,006
3,198,000
(6,396,000)
358,351
(6,396,000) (6,037,649)
1.10

0
(619,037)
$2,057,466
3,198,000
521,497
(5,516,152)
1.15

0
(448,658)
$2,180,914
3,198,000
568,428
(4,947,724)
1.16

0
(449,738)
$2,311,769
3,198,000
436,493
(4,511,231)
1.13

0
(317,798)
$2,450,475
3,198,000
429,726
(4,081,504)
1.12

13,751
21,509
$2,597,504
3,198,000
622,005
(3,459,500)
1.18

150,580
235,522
$2,753,354
3,198,000
680,168
(2,779,332)
1.20

126,910
198,500
$2,918,555
3,198,000
477,945
(2,301,387)
1.14

261,559
409,105
$3,093,668
3,198,000
513,437
(1,787,950)
1.15

460,132
719,694
$3,279,289
3,198,000
638,406
(1,149,544)
1.18

1,334,133
2,086,720
0
0
2,086,720
937,176

1,439,999
2,252,307
0
0
2,252,307
3,189,483

1,555,719
2,433,304
0
0
2,433,304
5,622,787

1,680,976
2,629,220
0
0
2,629,220
8,252,007

1,758,452
2,750,399
0
0
2,750,399
11,002,406

1,891,543
2,958,568
0
0
2,958,568
13,960,974

2,034,074
3,181,500
0
0
3,181,500
17,142,474

2,186,491
3,419,896
0
0
3,419,896
20,562,370

2,198,679
3,438,960
0
0
3,438,960
24,001,330

2,363,259
3,696,379
0
0
3,696,379
27,697,709

(6,396,000)

Net Present Value (NPV) =

Internal Rate of Return (IRR) =

($468,064)
14.1%

4 of 4

08/19/2011 02:19:32