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Enron Mail |
Thomas,
Here is a quick update for Calpine project. 1. Ben and I had a meeting with Scott this morning. Basic idea is to have 3 and 5 year tolling agreement with Calpine and sell to the market after the expiration of the agreement. 2. Ben prepared a preliminary model. Scott's target unlevered equity IRR is 8.5% ~ 9%. Key value driver will be a capacity payment ($/kw/month) for 3 or 5 years, which we will charge to Calpine. As soon as we get VOM from EE&CC, we will ask Structuring group to get the capacity payment for 3 and 5 years. 3. Things to be done - 3 and 5 year capacity payment to get 8.5% ~ 9% IRR of unlevered equity - 20 year power curve (capacity and energy) for Eastern PJM. We got gas curve. - VOM I think this idea could be good if Calpine is willing to pay more than what we see for next 3 or 5 year Eastern PJM pool price, and/or we can leverage up more by taking advantage of 3 or 5 year tolling agreement. This is just my thought. Please correct me, if I am wrong. I will continue to work on the model with Ben and I will talk to Scott to find out more. Thank you. Jinsung Myung
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