m The case study is about the construction

and operation of a coal fired

cogeneration facility power plant.
m Coal will be used to produce electricity
and steam to be sold to two long term
contractual purchasers
m With an electric generating capacity
(net) of 330 megawatts and a steam
export capability of 175 000 pounds per
hour
m The cogeneration facility is a partnership
between Toyan enterprises( an indirectly
wholly owned subsidiary of PG&E
enterprises) and Palm power corporation
(an indirectly wholly owned subsidiary of
Bechtel enterprises, inc.) plus a limited
partner TIFD III-Y inc.(a subsidiary of
general electric capital corporation
 General
PG&E Bechtel
electric capital
enterprises enterprises, inc
corporation

PG&E Palm power

TIFD III-Y Inc.
enterprises corporation
m Project construction began in October
21, 1992 and finished December 13,
1996.
m Was financed through a first mortgage
bond worth $505 million + a 1994 tax ²
exempt bond + equity contributions by
the partners
r
 

   
1994 tax-exempt bonds $125 000 000
Equity contributions of partners $140 000 000
    
m visk sharing among partners
m From 2020 ² 2025 there is a decline in
profits due to a decline in the electricity
capacity payment (a huge contributor
to revenue)
m VTvENGTHV
a. By the financial projections the project ,
the proceeds from the $505million first
mortgage bond and the $125 0.1million
of the 1994 tax-exempt bonds will be
able to repay the debt in full, refund the
$113 million principal amount of the
1992 tax-exempt bonds in full and repay
the original equity loan in full.
m The contractual terms agreed upon
were of a degree that ensured the
smooth running of the facility, any
breach resulted in fines.
m The amount of debt financing indicated
that the project is very viabile.
m There are certain limitations to aquiring
additional debt
m vigid and lengthy contract period
doesn·t allow any change in sales
because of these, i.e.