Entergy peaker in Entergy

Team,

I finally got a chance to talk to Entergy about their merchant peaker in
their own service territory. Specifics are as follows:

Configuration: 4 x GE 7EA's at 72 - 73 MW each because of elevation and
humidity levels.
Location: Vicksburg, MS sharing a site with the Baxter Wilson plant (1320 MW
coal/gas fired boiler)
HHV: 12,200 btu/kwh
Pipe: A new intra-state that will be shared with the Baxter Wilson plant.
Existing sources are Koch and Duke.
Start date: 7/01
Permits: PSD permit at 9 ppm. No run hour limitation.
Taxes: Fee in lieu of taxes at 1/3 cost for first ten years. Full property
taxes thereafter. Entergy claims this is the same deal Ben Jacoby got for
our peaker in MS.

First we need to model a pro-forma of plant operating costs using estimates
of FOM and VOM from internal sources.
Second, we need to calculate spread option valuations of the underlying plant
for 20-years using curve, vol and correlation assumptions acceptable to the
desk.
Thirdly and based on 20-year plant valuations, I need to create a debt
service schedule.
Finally, we have to price the put option premium and sensitivities using the
research/structuring model.

Any questions, please call me at 3-4750.

regards,

Don