You have just been hired by KM Energy as a financial analyst right out of college. KM Energy is an IPP based in the Northeast U.S. Over the last twenty years, your company has become a major producer of electricity in the Northeast and Mid-Atlantic markets and currently operates a fleet of almost 12,000 MW of generation. KM Energy prefers to focus on natural gas fueled power plants because of the relatively low technology risk and the easier permitting process. As a new member of their Development Group, you have been assigned to review the options for a new generation station project to serve the New York City market. There are several locations under consideration and different plant configurations that are feasible for each site. You will need to construct a detailed financial model for each of the site and plant configuration combinations that are being considered. Your group will be assigned a specific set of plant configuratio ns and locations.
Your financial model needs to:
1. Properly calculate the expected MWh output of each option giving consideration to overall plant configuration, turbine efficiency and expected degradation, and forced outage rates;
2. Provide a proforma Income Statement and simple Cash Flow analysis for a 20-year period plus construction years. Consideration should be given to all expected revenues and expenses for each project, as well as any upfront capital costs, depreciation schedules, or taxes assoc iated with each.