Confidential Client

ENTERPRISE CONSULTING ASSISTS CLIENT AND DETERMINES FEASIBILITY OF SELLING ENERGY IN THE CALIFORNIA WHOLESALE MARKET

Problem:
Determine financial feasibility of Client investing in a combined cycle generating resource with the purpose of selling energy in the California wholesale market.

Solution:
Black & Veatch performed an economic analysis of adding a combined cycle generating unit in California. The analysis included projecting the hourly market clearing price for wholesale energy in the California market and the resulting revenue available to the Client from the operation of a new combined cycle unit. The cost of operating the new unit was estimated based upon an economic dispatch of the new unit in the California market. The new combined cycle unit was evaluated by comparing its projected rate of return on investment to a hurdle rate established by the Client. As a result of this analysis, the Client has postponed any decision to pursue the development of a combined cycle resource.