EXHIBIT 99.2
ANNEX A
INDEPENDENT ENGINEER'S REPORT
MIRANT AMERICAS GENERATION, INC.
FACILITIES
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ANNEX A
INDEPENDENT ENGINEER'S REPORT
MIRANT AMERICAS GENERATION, INC. FACILITIES
TABLE OF CONTENTS
Page
INTRODUCTION.................................................................A-1
MIRANT MID-ATLANTIC FACILITIES...............................................A-4
Description of the Facilities..............................................A-4
Operation and Maintenance..................................................A-7
Operating History..........................................................A-8
Environmental Assessment...................................................A-9
MIRANT CALIFORNIA FACILITIES................................................A-11
Description of the Facilities.............................................A-11
Operation and Maintenance.................................................A-13
Operating History.........................................................A-14
Environmental Assessment..................................................A-15
MIRANT NEW YORK FACILITIES..................................................A-17
Description of the Facilities.............................................A-17
Operation and Maintenance.................................................A-20
Operating History.........................................................A-20
Environmental Assessment..................................................A-21
MIRANT NEW ENGLAND FACILITIES...............................................A-23
Description of the Facilities.............................................A-23
Operation and Maintenance.................................................A-25
Operating History.........................................................A-26
Environmental Assessment..................................................A-27
MIRANT TEXAS FACILITY.......................................................A-29
Description of the Bosque Facility........................................A-29
Operation and Maintenance.................................................A-30
Operating History.........................................................A-30
Construction Status of Bosque Unit 3......................................A-31
Environmental Assessment..................................................A-31
STATE LINE FACILITY.........................................................A-31
Description of the State Line Facility....................................A-31
Operation and Maintenance.................................................A-32
Operating History.........................................................A-33
Environmental Assessment..................................................A-33
MIRANT WISCONSIN FACILITY...................................................A-35
Description of the Neenah Facility........................................A-35
Operation and Maintenance.................................................A-35
Operating History.........................................................A-36
Environmental Assessment..................................................A-36
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ANNEX A
INDEPENDENT ENGINEER'S REPORT
MIRANT AMERICAS GENERATION, INC. FACILITIES
TABLE OF CONTENTS
(continued)
Page
PROJECTED OPERATING RESULTS.................................................A-37
Annual Operating Revenues.................................................A-38
Annual Operating Expenses.................................................A-40
Capital Expenditures......................................................A-41
Annual Interest...........................................................A-42
Interest Coverage.........................................................A-42
Sensitivity Analyses......................................................A-42
Summary Comparison of Projected Operating Results.........................A-43
PRINCIPAL CONSIDERATIONS AND ASSUMPTIONS
USED IN THE PROJECTION OF OPERATING RESULTS.................................A-44
CONCLUSIONS.................................................................A-45
EXHIBITS
EXHIBIT A-1 Base Case Projected Operating Results........................A-48
EXHIBIT A-2 Sensitivity A - Low Fuel Market Price Scenario...............A-60
EXHIBIT A-3 Sensitivity B - High Fuel Market Price Scenario..............A-63
EXHIBIT A-4 Sensitivity C - Capacity Overbuild Market Price Scenario.....A-66
EXHIBIT A-5 Sensitivity D - High Hydro Market Price Scenario.............A-69
EXHIBIT A-6 Sensitivity E - Breakeven Market Prices with Fuel
Correlation..................................A-72
EXHIBIT A-7 Sensitivity F - Reduced Availability.........................A-75
EXHIBIT A-8 Sensitivity G - Increased Heat Rate..........................A-78
EXHIBIT A-9 Sensitivity H - Increased Operating Expenses.................A-81
EXHIBIT A-10 Operating History............................................A-84
Copyright (C) 2001 R. W. Beck, Inc.
All Rights Reserved
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[LETTERHEAD OF R.W. BECK]
April 13, 2001
Mirant Americas Generation, Inc.
1155 Perimeter Center West
Atlanta, Georgia 30338
Subject: Independent Engineer's Report on the
Mirant Americas Generation, Inc. Facilities
INTRODUCTION
Presented herein is the report (the "Report") of our review and
analyses of 73 generating units owned by subsidiaries and affiliates of
Mirant Americas Generation, Inc. ("Mirant Generation") and located in the
states of Maryland, Virginia, California, New York, Massachusetts, Texas,
Indiana, and Wisconsin, as described in more detail herein (the "Mirant
Generation Facilities"). A map showing the locations of the Mirant Generation
Facilities is presented in Figure A-1. Neither our review, nor the
accompanying financial projections, has included the five units comprising
the Martha's Vineyard Facility nor Mirant Generation's 9 megawatt ("MW")
ownership interest in the Wyman Facility. The Report represents a summary of
our review and analyses. Additional detail regarding the Mirant Generation
Facilities is available in the Supplement to the Independent Engineer's
Report (the "Supplement"). The Supplement is publicly available on the
Securities and Exchange Commission's EDGAR system as an exhibit to a current
report on Form 8-K furnished by Mirant Corporation ("Mirant") pursuant to
Regulation FD. The EDGAR system may be accessed at www.sec.gov.
Mirant Generation is an indirect wholly-owned subsidiary of
Mirant, formerly known as Southern Energy, Inc. Mirant Generation is expected
to issue $600,000,000 of __% Senior Notes, Series A due 2006 (the "Series A
Notes") and $600,000,000 of __% Senior Notes, Series B due 2011 (the "Series
B Notes" and, together with the Series A Notes, the "Notes").
The Mirant Generation Facilities consist of steam-driven,
coal-fired, gas-fired and oil-fired electric generating units, as well as
hydroelectric facilities, diesels and combustion turbine ("CT") units fired by
either gas or oil. The Mirant Generation Facilities are presented in this report
according to geographic location. The Mirant Generation Facilities consist of
the following facilities: (1) the Mid-Atlantic generating facilities (the
"Mirant Mid-Atlantic Facilities"), which consist of the Chalk Point, Dickerson,
Morgantown and Potomac River generating facilities; (2) the Mirant California
generating facilities (the "Mirant California Facilities"), which consist of the
Contra Costa, Pittsburg and Potrero generating facilities; (3) the Mirant New
York generating facilities (the "Mirant New York Facilities"), which consist of
the Bowline and Lovett generating facilities as well as certain hydroelectric
facilities (the "Hydroelectric Facilities") and certain combustion turbines (the
"NY CTs"); (4) the Mirant New England generating facilities (the "Mirant New
England Facilities"), which consist of the Canal, Martha's Vineyard and Kendall
generating facilities and an ownership interest in the Wyman generating
facility; (5) the Mirant Texas generating facility (the "Mirant Texas
Facility"), which consists of the Bosque generating facility; (6) the State Line
Energy generating facility (the "State Line Facility"); and (7) the Mirant
Wisconsin generating facility (the "Mirant Wisconsin Facility"), which consists
of the Neenah generating facility.
Four of the Mirant Generation Facilities currently sell at least a
portion of their generation under various types of power purchase agreements.
Certain other power purchase agreements have been assigned to other
A-1
Mirant entities such that they do not impact the payment of interest on the
Notes. One business unit sells thermal energy under a steam sales agreement.
Fuel for the Mirant Generation Facilities is generally purchased under
short-term contract.
A summary of the Mirant Generation Facilities is presented in Table
1. As shown in Table 1, the Mirant Generation Facilities have a combined summer
generating capability of 12,480 MW, of which 46 percent is gas-fired, 30 percent
is coal-fired, 24 percent is oil-fired, and less than 1 percent is
hydroelectric. Eighty-two percent of the Mirant Generation Facilities' summer
generating capability is steam turbine technology, 2 percent is combined-cycle
technology, and 15 percent is CT technology, with the remaining 1 percent made
up of diesel and hydroelectric technology. With respect to dispatch type, 31
percent of the summer generating capability is projected to be dispatched to
serve base-load, 48 percent to serve intermediate load, and 21 percent to serve
peaking load requirements.
Table 1
Mirant Generation Facilities
Summer Generating Capability
(MW)
Base-Load Intermediate Peaking
Facility Fuel Type Technology Capacity Capacity Capacity Total Capacity
-------- --------- ---------- -------- -------- -------- --------------
Mirant Mid-Atlantic
Chalk Point(1)(2) Coal/Oil/Gas Steam/CT 683 1,224 516 2,423
Dickerson(3) Coal/Oil/Gas Steam/CT 546 -- 291 837
Morgantown(3) Coal/Oil Steam/CT 1,164 -- 248 1,412
Potomac River(1) Coal/Oil Steam 306 176 -- 482
----- ----- ----- -----
2,699 1,400 1,055 5,154
Mirant California
Contra Costa Gas Steam -- 680 -- 680
Pittsburg Gas Steam -- 1,332 600 1,932
Potrero Gas/Oil Steam/CT -- 206 144 350
----- ----- ----- -----
-- 2,218 744 2,962
Mirant New York
Bowline Gas/Oil Steam -- 1,212 -- 1,212
Lovett Oil/Coal Steam 365 -- 67 432
New York CTs Gas/Oil CT -- -- 76 76
Hydros N/A Hydro 17 -- 27 44
----- ----- ----- -----
382 1,212 170 1,764
Mirant New England
Canal Oil/Gas Steam -- 1,112 -- 1,112
Kendall Oil/Gas Steam/CT -- -- 97 97
Martha's Vineyard Oil Diesel -- -- 14 14
Wyman Oil Steam -- 9 -- 9
----- ----- ----- -----
-- 1,121 111 1,232
Mirant Texas
Bosque Gas CT/CC 236(4) -- 308 544(3)
State Line Coal Steam 515 -- -- 515
Mirant Wisconsin
Neenah Gas CT -- -- 309 309
----- ----- ----- -----
TOTAL CAPACITY 3,832 5,951 2,697 12,480
- --------------------
(1) Includes assets that are owned by Mirant that are subject to a capital
contribution agreement between Mirant and Mirant Generation.
(2) Includes an 84 MW turbine owned by third party as to which a subsidiary of
Mirant Mid-Atlantic has the operating rights and the right to the output.
(3) Includes assets that are leased by Mirant.
(4) Includes 236 MW Bosque Unit 3, which is under construction and expected to
begin commercial operation in June 2001.
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Figure A-1
Mirant Generation Facilities
Facility Locations
[MAP OMITTED]
A-3
During the course of our review, we visited and made general field
observations of the Mirant Generation Facilities and the sites of the Mirant
Generation Facilities. The general field observations were visual, above-ground
examinations of selected areas which we deemed adequate to comment on the
existing condition of the sites but which were not in the level of detail
necessary to reveal conditions with respect to geological or environmental
conditions, the internal physical condition of any equipment, or the conformance
with agreements, codes, permits, rules, or regulation of any party having
jurisdiction with respect to the sites. We did not visit the sites of the Bosque
or Neenah Facilities.
In addition, we have reviewed: (1) the status of permits and
approvals and compliance with those permits; (2) environmental assessment
reports; (3) the historic and projected levels of production of the Mirant
Generation Facilities; (4) the historic and projected operating and maintenance
expenses of the Mirant Generation Facilities; (5) the projected revenues of the
Mirant Generation Facilities; (6) historical operating records of the Mirant
Generation Facilities; and (7) operating programs and procedures. Based on our
review, we have prepared a projection of revenues and expenses of the Mirant
Generation Facilities and interest coverage ratios, which are attached as
Exhibits A-1 through A-9 to this Report (the "Projected Operating Results").
In developing the Projected Operating Results, we have relied upon a
report by PA Consulting Group ("PA Consulting") attached as Annex B to the
Offering Circular, of which this Report is a part, for projections of the Mirant
Generation Facilities' electricity sales, revenues, and fuel costs. We have not
reviewed PA Consulting's methodology and approach in its development of these
projections but instead have based our reliance upon their previous experience
in developing similar projections.
MIRANT MID-ATLANTIC FACILITIES
Description of the Facilities
The Mirant Mid-Atlantic Facilities consist of generating units
located at four separate facility sites in Maryland and Virginia, as well as
other ancillary facilities. The generating units consist of the Chalk Point
power plant located in Prince George's County, Maryland (the "Chalk Point
Facility"); the Dickerson power plant located in Montgomery County, Maryland
(the "Dickerson Facility"); the Morgantown power plant located in Charles
County, Maryland (the "Morgantown Facility"); and the Potomac River power plant
located in Alexandria, Virginia (the "Potomac River Facility"). Mirant
Mid-Atlantic, LLC, an indirect wholly-owned subsidiary of Mirant, and its
subsidiaries and affiliates (collectively, "Mirant Mid-Atlantic") own the Chalk
Point Facility (except for a CT owned by the Southern Maryland Electric
Cooperative ("SMECO") and the Potomac River Facility. Mirant Mid-Atlantic also
owns or leases the Dickerson Facility and the Morgantown Facility. In addition,
Mirant Mid-Atlantic owns the following assets and related facilities: (1) the
Production Service Center (the "PSC"), which is an engineering and maintenance
service facility; (2) a fuel oil delivery pipeline and associated pumping and
storage facilities for supplying fuel oil to the Chalk Point and Morgantown
Facilities (the "Piney Point Pipeline"); and (3) the Faulkner ash storage
facility ("Faulkner"), the Brandywine ash storage facility ("Brandywine"), and
the Westland ash storage facility ("Westland", and together with Faulkner and
Brandywine, the "Ash Storage Facilities"). The Mirant Mid-Atlantic Facilities,
the PSC, the Piney Point Pipeline, and the Ash Storage Facilities were purchased
from Potomac Electric Power Company ("Pepco") in December 2000.
The Chalk Point Facility
The Chalk Point Facility is located approximately 45 miles southeast
of Washington, DC on a 1,160-acre site at the confluence of the Patuxent River
and Swanson Creek in Prince George's County, Maryland.
The Chalk Point Facility is comprised of four conventional steam
turbine units and seven simple-cycle CTs, with a total net summer generating
capacity of 2,423 MW as listed in Table 2. Included in this amount is Mirant
Mid-Atlantic's entitlement to the output of one on-site 84 MW CT that is owned
by SMECO. The Chalk Point Facility is the largest of the Mirant Mid-Atlantic
Facilities and provides base-load, intermediate and peaking generation and is
capable of utilizing a variety of fuels.
A-4
Table 2
Unit Characteristics
Chalk Point Facility
Summer Full Load
In-Service Capacity Heat Rate Dispatch
Unit Fuel Date (MW) (Btu/kWh) Type
---- ---- ---- ---- --------- ----
Units 1 & 2 Coal/Gas 1964/1965 683 9,350 Base-load
Units 3 & 4 No. 6 Oil/Gas 1975/1981 1,224 10,140 Intermediate
CT 1 No. 2 Oil 1967 18 12,300 Peaking
CT 2 No. 2 Oil 1974 30 12,300 Peaking
CTs 3 & 4 Gas/No. 2 Oil 1991/1991 170 12,300 Peaking
CTs 5 & 6 Gas/No. 2 Oil 1991/1991 214 11,700 Peaking
SMECO CT Gas/No. 2 Oil 1990 84 12,500 Peaking
-----
Total 2,423
In addition, the Chalk Point Facility has certain common facilities
shared by all units such as river water pumping stations, fuels receiving,
storage and handling systems, water treatment systems, warehouses, maintenance
shops, a chemistry laboratory, administrative offices, groundwater monitoring
wells, and an electrical switchyard.
The design and construction of electric utility generating units
using pulverized coal, No. 6 residual oil, or natural gas to fire steam boilers
has been common for many years, as has the firing of natural gas or No. 2
distillate oil in CTs. The Chalk Point Facility was designed utilizing the
standard technologies available at the time it was built. Where it has proven
economically desirable, or where regulatory changes have required, new
technologies have been "backfit" into the Chalk Point Facility to improve
operations, environmental compliance, and efficiencies. Major examples of this
include the conversion of Chalk Point Units 1 and 2 to balanced draft operation
and installation of new, more efficient precipitators in the early 1980s,
provision of gas firing capability for Chalk Point Units 1 and 2 in the 1990s,
and replacement of the control systems of Chalk Point Units 1 and 2.
In general, Chalk Point Units 1 and 2 have been normally
base-loaded, which is common for large, coal-fired units which are generally
designed for this type of operation. The Chalk Point Units 3 and 4 have been
generally used in intermediate service. Many large steam units were originally
designed for base-load service and later converted to peaking service. Some of
these converted units experienced thermal cycling damage such as cracking of
major steam generator and turbine components, accelerated erosion of turbine
components, and operational difficulties with systems that were not designed to
be cycled on and off frequently. However, Chalk Point Units 3 and 4 were
intended for peaking service when originally proposed, and as such, the
equipment was designed to take frequent start/stop cycles into account. Having
had numerous opportunities to inspect the units during the 25- to 30-year period
they have been in operation, the operators have reported that the equipment has
performed well and does not exhibit to any great degree any of the problems
usually associated with the cycling of large steam units.
The Dickerson Facility
The Dickerson Facility is located approximately 31 miles northwest
of Washington, DC and 12 miles south of Frederick, Maryland on a 1,001-acre site
less than a mile downstream from the confluence of the Potomac River and
Monocacy River in northwestern Montgomery County, Maryland.
The Dickerson Facility is comprised of three conventional steam
turbine units and three simple-cycle CTs (CT D1, CT H1, and CT H2), with a total
net summer generating capacity of 837 MW as listed in Table 3. The Dickerson
Facility provides base-load and peaking generation and is capable of using both
coal and No. 2 oil for fuel in the steam units, No. 2 oil in Dickerson CT D1 and
both gas and No. 2 oil in Dickerson CTs H1 and H2.
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Table 3
Unit Characteristics
Dickerson Facility
Summer Full Load
In-Service Capacity Heat Rate Dispatch
Unit Fuel Date (MW) (Btu/kWh) Type
---- ---- ---- ---- --------- ----
Units 1-3 Coal/No. 2 Oil 1959/60/62 546 9,550 Base-load
CT D1 No. 2 Oil 1967 13 13,500 Peaking
CTs H1 & H2 Gas/No. 2 Oil 1992/1993 278 11,500 Peaking
---
Total 837
In addition, the Dickerson Facility has certain common facilities
shared by all units such as river water pumping stations, fuels receiving,
storage and handling systems, water treatment systems, warehouses, maintenance
shops, a chemistry laboratory, administrative offices, groundwater monitoring
wells, and an electrical switchyard.
The design and construction of electric utility generating units
using pulverized coal or No. 2 distillate oil to fire steam boilers has been
common for many years, as has the firing of natural gas or No. 2 distillate oil
in CTs. The Dickerson Facility was designed utilizing the standard technologies
available at the time it was built. Where it has proven economically desirable,
or where regulatory changes have required, new technologies have been "backfit"
into the Dickerson Facility to improve operations, environmental compliance, and
efficiencies. Major examples of this include the installation of wet particulate
scrubbers to Dickerson Unit 3 in 1972 and to Dickerson Units 1 and 2 in 1978,
and replacement of the pneumatic control systems of Dickerson Units 1, 2 and 3
in 1999.
In general, Dickerson Units 1, 2 and 3 have been normally
base-loaded, which is common for medium sized coal-fired units located close to
a metropolitan area.
The Morgantown Facility
The Morgantown Facility is located approximately 50 miles south of
Washington, DC on a 620-acre site adjacent to the Potomac River near Newburg in
Charles County, Maryland.
The Morgantown Facility is comprised of two conventional steam
turbine units and six simple-cycle CTs, with a total net summer generating
capacity of 1,412 MW as listed in Table 4. The Morgantown Facility provides
base-load and peaking generation and is capable of utilizing both coal and oil
for fuel.
Table 4
Unit Characteristics
Morgantown Facility
Summer Full Load
In-Service Capacity Heat Rate Dispatch
Unit Fuel Date (MW) (Btu/kWh) Type
---- ---- ---- ---- --------- ----
Units 1 & 2 Coal/No. 6 Oil 1970/1971 1,164 9,050 Base-load
CTs 1 & 2 No. 2 Oil 1970/1971 32 14,650 Peaking
CTs 3-6 No. 2 Oil 1973 216 12,600 Peaking
-----
Total 1,412
In addition, the Morgantown Facility has certain common facilities
shared by all units such as river water pumping stations, fuels receiving,
storage and handling systems, water treatment systems, warehouses, maintenance
shops, a chemistry laboratory, administrative offices, groundwater monitoring
wells, and an electrical switchyard.
The design and construction of electric utility generating units
using pulverized coal or No. 6 residual oil to fire steam boilers has been
common for many years, as has the firing of No. 2 distillate oil in CTs. The
A-6
Morgantown Facility, although designed and constructed a few years earlier than
the Chalk Point Facility, shares many of the same technologies with the Chalk
Point Facility.
In general, Morgantown Units 1 and 2 have been normally base-loaded,
which is common for large, coal-fired units which are generally designed for
this type of operation.
The Potomac River Facility
The Potomac River Facility is located on a 25-acre site along the
Potomac River in Alexandria, Virginia. The Potomac River Facility is comprised
of five conventional steam turbine units, with a total net summer generating
capacity of 482 MW as listed in Table 5. The Potomac River Facility provides
base-load and intermediate generation and is capable of utilizing both coal and
oil for fuel.
Table 5
Unit Characteristics
Potomac River Facility
Summer Full Load
In-Service Capacity Heat Rate Dispatch
Unit Fuel Date (MW) (Btu/kWh) Type
---- ---- ---- ---- --------- ----
Units 1 & 2 Coal/No. 2 Oil 1949/1950 176 12,150 Intermediate
Units 3-5 Coal/No. 2 Oil 1954/56/57 306 9,870 Base-load
---
Total 482
In addition, the Potomac River Facility has certain common
facilities shared by all units such as river water pumping stations, fuels
receiving, storage and handling systems, water treatment systems, warehouses,
maintenance shops, a chemistry laboratory, administrative offices, groundwater
monitoring wells, and an electrical switchyard.
The design and construction of electric utility generating units
using pulverized coal or No. 2 distillate oil to fire steam boilers has been
common for many years. The Potomac River Facility was designed utilizing the
standard technologies available at the time it was built. Where it has proven
economically desirable, or where regulatory changes have required, new
technologies have been "backfit" into the Potomac River Facility to improve
operations, environmental compliance, and efficiencies. Major examples of this
include the installation of new hot-side electrostatic precipitators ("ESPs") in
1979 and replacement of the control systems of Potomac River Units 1, 2, 3, 4
and 5.
In general, Potomac River Units 1 and 2 have normally operated to
serve intermediate load, which is common for smaller, coal-fired units of this
vintage. The Potomac River Units 3, 4 and 5 have been normally base-loaded.
Other Facilities
The PSC, which is a 145,000-square foot engineering and maintenance
facility serving the Mirant Mid-Atlantic Facilities; the Piney Point Pipeline,
which supplies No. 6 residual fuel oil to the Chalk Point and Morgantown
Facilities; and the Ash Storage Facilities, which receive and store the solid
waste materials such as sludges, bottom ash and fly ash produced from the
combustion of coal at the Mirant Mid-Atlantic Facilities, are described in more
detail in the Supplement.
Operation and Maintenance
Operation of the Mirant Mid-Atlantic Facilities
The Mirant Mid-Atlantic Facilities are operated with operations
personnel from Mirant Mid-Atlantic Services, LLC ("Mirant Mid-Atlantic
Services"), an indirect wholly-owned subsidiary of Mirant. The Mirant
Mid-Atlantic Facilities have no employees of their own. In conjunction with the
acquisition of the Mirant Mid-Atlantic
A-7
Facilities from Pepco, Mirant Mid-Atlantic Services hired numerous Pepco
personnel and currently provides all operations, maintenance and general
management personnel to the Mirant Mid-Atlantic Facilities. Mirant Services, LLC
("Mirant Services"), a direct wholly-owned subsidiary of Mirant, provides
executive personnel and administrative services to the Mirant Mid-Atlantic
Facilities. As part of the purchase of the Mirant Mid-Atlantic Facilities,
Mirant Mid-Atlantic Services was assigned the labor contracts for the non-exempt
personnel at the Mirant Mid-Atlantic Facilities. Mirant Mid-Atlantic Services
retained the services of most of the existing exempt personnel and completed the
remaining staffing requirements via internal and external resources.
Operating Programs and Procedures
Mirant Mid-Atlantic Services adopted Pepco's operating practices and
procedures, including its Generation Engineering and Maintenance Services
department, and is in the process of coordinating, combining and improving these
procedures to maximize the production capabilities of the Mirant Mid-Atlantic
Facilities while minimizing the facilities' operating and maintenance costs. We
have reviewed the general application of the various operating and maintenance
("O&M") programs and procedures within the Mirant Mid-Atlantic Facilities,
including: preventive, corrective and predictive maintenance plans; operating
procedures; and maintenance procedures originally put in place by Pepco. We did
not review all aspects of these plans and procedures, but verified that all of
the usual and necessary plans, procedures and documentation normally required to
operate a facility of this type were in place.
The PSC is the headquarters of the Mid-Atlantic Facilities and
houses the offices of the PSC staff, training areas and a machine shop. The PSC
staff provides numerous services to the Mid-Atlantic Facilities and has
developed programs and procedures that have been implemented at all of the
Mid-Atlantic Facilities. Additional discussion of the PSC is contained in the
Supplement.
Operating History
Operating data for the past several years of operation of the Mirant
Mid-Atlantic Facilities was provided by Mirant Mid-Atlantic. The historical
averages and corresponding future averages are summarized in Table 6. The
projected generation, average annual heat rate, capacity factor, and equivalent
availability factor have been estimated by PA Consulting. A more detailed
summary of the historical performance results is included in Exhibit A-10 and in
the Supplement.
A-8
Table 6
Operating History
Mirant Mid-Atlantic Facilities
Historical Projected
Average Average
(1996-2000) (2001-2020)
----------- -----------
Net Capability Rating (MW)(1)
Chalk Point 2,423 2,423
Dickerson 837 837
Morgantown 1,412 1,412
Potomac River 482 482
Net Generation (GWh)
Chalk Point 5,753.8 8,234.9
Dickerson 3,387.8 4,063.5
Morgantown 7,402.9 7,960.2
Potomac River 2,090.1 2,919.2
Annual Net Heat Rate (Btu/kWh)(2)(3)
Chalk Point 10,600 9,854
Dickerson 9,757 9,737
Morgantown 9,336 9,102
Potomac River 11,069 10,767
Net Capacity Factor (%)(3)
Chalk Point 48.2 57.9
Dickerson 66.4 72.9
Morgantown 72.0 76.8
Potomac River 54.1 69.6
Equivalent Availability Factor (%)(3)
Chalk Point 82.0 88.0
Dickerson 84.1 90.0
Morgantown 85.7 87.0
Potomac River 89.7 88.0
--------------------
(1) Summer rating.
(2) Annual average based on levels of full- and part-load
operation as projected by PA Consulting. Projected decreases
in annual average heat rates compared to historical heat rates
result for some units due to an increase in hours at more
efficient, full-load operation projected by PA Consulting.
(3) Represents weighted average by generation for annual net heat
rate, net capacity and equivalent availability factor.
Environmental Assessment
Environmental Site Assessment
We have reviewed Phase I environmental site assessments ("ESAs") for
each of the Mirant Mid-Atlantic Facilities, the Ash Storage Facilities, the PSC,
and the pumping station (the "Ryceville Pumping Station") and oil terminal (the
"Piney Point Oil Terminal") associated with the Piney Point Pipeline prepared by
Pepco's environmental consultant to determine the consistency of their
assessment with industry standards.
The Phase I ESA reports, dated between December 13 and 16, 1999
consisted of site reconnaissance, interviews, review of facility files, and
review of relevant government agency files, including files from the Maryland
Department of the Environment ("MDE") and the Virginia Department of
Environmental Quality ("VADEQ"). Additionally, we have reviewed comments from
Pepco's environmental consultant regarding their follow-up site visits conducted
between March 9 and 10, 2000 to the Mirant Mid-Atlantic Facilities, Ash Storage
Facilities, the PSC, and the Ryceville Pumping Station. Pepco's environmental
consultant stated that "no environmental conditions, other than those noted
during the initial site reconnaissance conducted in June 1999, were observed."
Additional discussion regarding the findings of Pepco's environmental consultant
is included in the Supplement. We have also reviewed an updated report dated
December 15, 2000 for the Mirant Mid-Atlantic Facilities prepared by Pepco's
environmental consultant. Based on our review, we are of the opinion that the
ESAs and updated report for the sites of the Mirant
A-9
Mid-Atlantic Facilities were conducted in a manner consistent with industry
standards, using comparable industry protocols for similar studies with which we
are familiar.
The total projected costs for environmental concerns relating to
potential site contamination issues are estimated by Mirant Mid-Atlantic to be
approximately $12,500,000, which includes a contingency for currently unknown
site contamination issues, if any, that may potentially develop in the future.
The estimated costs for potential environmental projects have been included as
capital expenditures and operation and maintenance expenses in the Projected
Operating Results presented later in this Report. Refer to the Supplement for
additional information on previously conducted ESAs.
Status of Permits and Approvals
We have reviewed the key permits and approvals for the Mirant
Mid-Atlantic Facilities. A listing of the key permits and approvals is shown in
the Supplement. The major permits and approvals required to operate the Mirant
Mid-Atlantic Facilities have been obtained and are currently valid or are in the
process of being renewed, and we are not aware of any technical circumstances
that would prevent the renewal of the major permits or approvals.
Regulatory Compliance
We have reviewed 1999 and 2000 excess air emissions reports, the
Wastewater Discharge Monitoring Reports for 2000 and discussed the compliance
status of the Mirant Mid-Atlantic Facilities with personnel working at the
Mirant Mid-Atlantic Facilities and those working for Mirant Generation. The
Mirant Mid-Atlantic Facilities appear to be in material compliance with the
various conditions set forth in the key permits and approvals and consent orders
as applicable.
We note the following circumstances relative to compliance with
permits and approvals that could have an impact on future operations. Additional
discussion of certain such circumstances is presented in the Supplement:
o The location of the Mirant Mid-Atlantic Facilities in designated
ozone non-attainment areas triggered the requirement of Reasonably
Available Control Technology ("RACT"). A consent agreement with VADEQ
dated July 10, 1998 instituted an emission-averaging plan for oxides of
nitrogen ("NO(X)"), where emissions can be over-controlled at certain
units to cover the other generating unit requirements.
o Title I of the Clean Air Act and subsequent regulations pursuant
to the Act, including the United States Environmental Protection Agency
("USEPA") NO(X) State Implementation Plan ("SIP") Call and the Section 126
petitions, established a market based program for NO(X) allowances where
units covered by the Act must possess NO(X) allowances to cover their
emissions. Maryland has adapted regulations allocating allowances to
individual units consistent with the Act beginning in 2000. The Virginia
units will be subject to allowance requirements beginning in 2003 because
Virginia did not sign the September 1994 Memorandum of Understanding
("MOU") among Eastern Regional Transport Commission states. The future
cost of NO(X) allowances will be market dependent and could be lower or
higher than the current values for such allowances. The exact number of
allowances to be required in the future will depend on the utilization of
the units in the future. The number of allowances allocated to the units
and future price assumptions are presented in the Supplement. The
allowance costs assumed in the Projected Operating Results are presented
later in this Report.
o The Mirant Mid-Atlantic Facilities are subject to Title IV of the
Clean Air Act (Acid Rain Provisions) whereby each unit must possess sulfur
dioxide ("SO(2)") allowances to cover its emissions beginning in 2000. The
future cost of SO(2) allowances will be market dependent and could be
lower or higher than the current values for such allowances. The exact
number of allowances to be required in the future will depend on the
utilization of the units. The number of allowances allocated to the units
and future price assumptions are presented in the Supplement. The
allowance costs assumed in the Projected Operating Results are presented
later in this Report.
o Title IV of the Clean Air Act also imposes specific NO(X) emission
limits that must be met (presumptive limits) by all coal units subject to
the Act. The Potomac units opted early election into the
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program thereby deferring lower emission limits until 2008. The remaining
units applied for Alternative Emission Limits ("AELs") to allow more
flexibility in operation at emission levels higher than the presumptive
limits. The AELs for Morgantown Units 1 and 2 have been approved. Should
the AELs for the remaining units not be approved, the retrofit schedule of
control equipment may need to be revised in order to comply with more
stringent limits than the applied for AELs.
o Certain capital expenditures along with associated O&M costs have
been identified by Mirant Mid-Atlantic to comply with future environmental
requirements; however, Mirant Mid-Atlantic regularly reevaluates
cost-effective alternatives to achieve compliance with future
environmental regulations. At this point in time, we believe it is
reasonable to assume such installations, costs and associated emission
rates in the Projected Operating Results with the actual decision to
install being made at a later date based on economic evaluations. For the
purposes of the Projected Operating Results, based on discussions with
Mirant Mid-Atlantic, we have assumed the installation of: (1) low-NO(X)
burners at Chalk Point Units 1 and 2 in 2002; (2) selective catalytic
reduction ("SCR") at Chalk Point Units 1 and 2 in 2006 and 2008,
respectively; (3) separated overfired air ("SOFA") systems at Dickerson
Units 1, 2, and 3 in 2002, 2003, and 2003, respectively; (4) SCR and
selective non-catalytic reduction ("SNCR") at Morgantown Units 1 and 2 in
2006 and 2008, respectively; and (5) low-NO(X) burners and SOFA systems at
Potomac River Units 3, 4, and 5 in 2007, 2007, and 2008, respectively.
Specific emission rate assumptions are presented in the Supplement.
o The Dickerson Facility is operating under a consent order for
opacity. Presently, the Dickerson Facility is undertaking a testing
program to verify the feasibility of converting the ESPs to wet ESPs. The
capital expenditure for conversion is included in the Projected Operating
Results. Should the testing prove to be unsuccessful, a more costly option
of adding baghouses is available.
o In November 1999, the USEPA issued Notices of Violations ("NOVs")
to owners and operators of 32 coal-fired electric generating plants,
charging that over many years these plants had been changed or modified in
ways that resulted in increased emission of pollutants and that the plants
did not obtain new source permits or prevention of significant
deterioration permits applicable to new or modified sources. None of the
assets included herein have been issued such NOVs. Mirant received a
request for information dated January 10, 2001 from the USEPA, pursuant to
its authority under the Clean Air Act, requiring Mirant to provide records
and information relevant to the operation and maintenance history of the
Potomac River, Chalk Point, Dickerson and Morgantown Facilities. Mirant
and Mirant Mid-Atlantic are in the process of responding to the request
for information. While we cannot predict future USEPA actions, should such
notices of violations be issued to any of the assets, the cost to comply
could be substantial.
o There are a number of potential future regulations that, if
promulgated, could increase capital expenditures and O&M costs at the
Mirant Mid-Atlantic Facilities. Such potential regulations include mercury
control, particulate matter of 2.5 microns or less ("PM(2.5)"), regional
haze, regional visibility, water intake structure regulations, potential
ratcheting of SO(2) allowances beyond 2009 and Subtitle D regulations
pertaining to the disposal of fuel combustion wastes such as ash. The
schedule and specific regulations to be promulgated are not presently
known; therefore, the impact of such potential regulations has not been
incorporated into the Projected Operating Results.
MIRANT CALIFORNIA FACILITIES
Description of the Facilities
The Mirant California Facilities are owned by Mirant California, LLC
("Mirant California") through its direct wholly-owned subsidiaries Mirant Delta,
LLC ("Mirant Delta") and Mirant Potrero, LLC ("Mirant Potrero"). Mirant
California, Mirant Delta and Mirant Potrero are all indirect wholly-owned
subsidiaries of Mirant Generation and are collectively referred to herein as
"Mirant California". The Mirant California Facilities consist of the following
three separate electric generating facilities: (1) the 680 MW (net) Contra Costa
power plant (the "Contra Costa Facility") located approximately 2.5 miles east
of Antioch, California; (2) the 1,932 MW (net) Pittsburg power plant (the
"Pittsburg Facility") located near Pittsburg, California; and (3) the 350 MW
(net) Potrero power plant (the "Potrero Facility") located in the southeast
portion of the City and County of San Francisco on the western shore of San
Francisco Bay. The Pittsburg and Contra Costa Facilities (the "Delta
Facilities") are owned by Mirant Delta. The
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Portrero Facility is owned by Mirant Portrero. The Delta Facilities and the
Potrero Facility are collectively referred to herein as the "Mirant California
Facilities". The Mirant California Facilities were acquired from PG&E in April
16, 1999. Mirant California also maintains an administrative and business
support office in Walnut Creek, California.
The Contra Costa Facility
The Contra Costa Facility consists of two operating units, Contra
Costa Units 6 and 7, with a combined capacity of 680 MW. Contra Costa Units 1, 2
and 3 were decommissioned in 1994, but could run, if required, with capital
expenditure and permit reinstatement. Contra Costa Units 4 and 5 are operated
solely as synchronous condensers and their capability is not included in the
stated capacity.
The Contra Costa Facility is located on a single 168-acre parcel in
the unincorporated area of Contra Costa County along the San Joaquin River
Delta. The site is approximately 2.5 miles east of Antioch and 10 miles upstream
from the Pittsburg Facility. PG&E retained approximately 20 acres of the parcel
containing the switchyard, transmission lines and other transmission related
equipment. PG&E also retained a portion of the gas pipeline and the necessary
easements to service the gas pipeline and transmission equipment.
Contra Costa Units 6 and 7 are each comprised of two steam turbine
generators with a combined net generating capacity of 680 MW. The Contra Costa
Units 6 and 7 were placed in service in 1964 as natural gas fired and oil fired
units, however are no longer capable of firing oil without substantial changes
to the boiler burners and permits.
Contra Costa Units 4 and 5, which no longer operate as generating
units, each operate as synchronous condensers. The units were originally
commissioned as generating units but were converted to synchronous condensers in
1993 and 1997, respectively. Contra Costa Unit 4 is rated at 148 MVAR (net)
while Contra Costa Unit 5 carries a rating of 104 MVAR (net).
Table 7
Unit Characteristics
Contra Costa Facility
Summer Full Load
In-Service Capacity Heat Rate Dispatch
Unit Fuel Date (MW) (Btu/kWh) Type
---- ---- ---- ---- --------- ----
Units 6 & 7 Gas 1964 680 10,100 Intermediate
The Pittsburg Facility
The Pittsburg Facility is located on approximately 1,086 acres of
land along the Suisun Bay in Pittsburg, California. The Suisun Bay is the source
of cooling water and the effluent cooling water is returned to the Suisun Bay.
PG&E retained approximately 33 acres of the total parcel where the PG&E-owned
switchyard exists.
The Pittsburg Facility consists of seven units with a total net
summer generating capacity of 1,932 MW as listed in Table 8. The Pittsburg
Facility boilers were originally designed to burn natural gas as a primary fuel
with fuel oil as back up fuel, but are no longer capable of firing oil without
changes to the boiler burners and permits.
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Table 8
Unit Characteristics
Pittsburg Facility
Summer Full Load
In-Service Capacity Heat Rate Dispatch
Unit Fuel Date (MW) (Btu/kWh) Type
---- ---- ---- ---- --------- ----
Units 1 - 4 Gas 1954 600 11,000 Peaking
Units 5 & 6 Gas 1960/1961 650 10,000 Intermediate
Unit 7 Gas 1972 682 9,800 Intermediate
-----
Total 1,932
The Potrero Facility
The Potrero Facility is located on the western shore of San
Francisco Bay in the southeast portion of the City and County of San Francisco,
California. The Potrero Facility is located on several parcels totaling
approximately 36 acres. PG&E has retained approximately nine acres of the total
parcel where the PG&E-owned switchyard exists.
The Potrero Facility is comprised of a steam boiler plant and three
CTs with a total net summer generating capacity of 350 MW as listed in Table 9.
Potrero Units 4, 5, and 6 were placed in service in 1976 using No. 2 distillate
fuel oil as a primary fuel.
Table 9
Unit Characteristics
Potrero Facility
Summer Full Load
In-Service Capacity Heat Rate Dispatch
Unit Fuel Date (MW) (Btu/kWh) Type
---- ---- ---- ---- --------- ----
Unit 3 Gas 1965 206 10,600 Intermediate
CTs 4-6 No. 2 Oil 1976 144 13,600 Peaking
---
Total 350
Operation and Maintenance
Operation of the Mirant California Facilities
We have visited the Mirant California Facilities. The operating and
maintenance programs, including: (1) operating procedures and programs; (2)
preventive, predictive and corrective maintenance programs and procedures; (3)
work management process; (4) work order and high energy piping inspection
procedures; (5) reporting and documentation requirements; and (6) plant
performance monitoring programs were previously reviewed at the Mirant
California Facilities. During the site visits, the material condition of the
plants was observed and discussions were held with plant operations and
maintenance management.
The operating programs at the Mirant California Facilities include
the management, engineering, maintenance, financial, administrative and support
groups necessary to operate and maintain the station in accordance with accepted
industry operating practices. During discussions at the plants, the plant
managers reported that there has been minimal personnel turnover in plant
operations and maintenance.
The plant managers at the Mirant California Facilities plan to
increase productivity and realize savings through a number of operational
changes, including broadening job definitions for operations and increased
participation in day-to-day decision making at all levels of the organization.
The Mirant California Facilities have instituted program initiatives
that, if successful, will improve station operating and maintenance practices
and performance. Included are performance management programs for
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station personnel; a maintenance planning process that will improve both
preventive and corrective maintenance performance; and a team-based concept that
will provide operating and maintenance personnel additional responsibility and
authority to operate and maintain the plants while maintaining the necessary
management guidance and oversight. These programs are geared to reducing
operating and maintenance costs and improving station performance indicators. In
addition, financial incentives are being provided, beginning in 2001, for
employee generated cost savings and other improvements in plant operation and
administrative processes.
Operating Programs and Procedures
PG&E is contracted under an operating and maintenance agreement to
operate the Mirant California Facilities for two years under the direction of
Mirant California management. At the end of the two-year period ending April 16,
2001, most PG&E employees are expected to be hired by Mirant California.
The Mirant California maintenance department utilizes Maximo, which
is the maintenance management system that has been selected by Mirant Generation
for use in all of its generating plants. Corrective and preventive maintenance
activities are documented and recorded using work orders. Maximo is used to
manage the maintenance activities. A predictive and preventive maintenance
program is employed at the plants.
Major maintenance is presently scheduled on a three-year cycle for
the boilers and a 6-year interval for the steam turbine-generators. The overhaul
duration is typically six to eight weeks, depending on the scope of the work to
be performed. Virtually all of the Mirant California Facilities' major
maintenance for the next few years will be performed during outages dictated by
the installation of SCR systems or low-NO(X) burners, both to reduce NO(X)
emissions.
Major outages are scheduled for Contra Costa Units 6 and 7 in
2000-2001 to install systems to reduce stack emissions. Low-NO(X) burners were
recently installed on Contra Costa Unit 6. Contra Costa Unit 7 is scheduled for
installation of a SCR system from March to June of 2001 with Contra Costa Unit 6
SCR installation scheduled for 2003.
Major outages are scheduled for Pittsburg Units 1 through 7 within
the next three years to install systems to reduce stack emissions or correct
equipment concerns that are affecting reliability. Pittsburg Units 1 through 4
will retube the condensers and perform boiler repair work in 2001. Pittsburg
Units 5 and 6 just completed installation of low-NO(X) burners and are scheduled
to install SCRs in 2001-2002. Pittsburg Unit 7 is scheduled to install an SCR in
2003. The SCR outages will be between 14 and 20 weeks long.
Potrero Unit 3 will have two major outages in the next four years,
2001 to retube the condenser and make boiler repairs as necessary and 2004 to
install an SCR. The scheduled duration of these outages is 10 and 20 weeks
respectively.
Operating History
Operating data for the past several years of operation of the Mirant
California Facilities was provided by Mirant California. The historical averages
and corresponding future averages are summarized in Table 10. The projected
generation, average annual heat rate, capacity factor, and equivalent
availability factor have been estimated by PA Consulting. A more detailed
summary of the historical performance results is included in Exhibit A-10 and in
the Supplement.
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Table 10
Operating History
Mirant California Facilities
Historical Projected
Average Average
(1996-2000) (2001-2020)
----------- -----------
Net Capability Rating (MW)(1)
Contra Costa 680 680
Pittsburg 1,932 1,932
Potrero 350 350
Net Generation (GWh)
Contra Costa 1,959.3 2,040.8
Pittsburg 4,323.2 4,741.7
Potrero 934.3 531.1
Annual Net Heat Rate (Btu/kWh)(2)(3)
Contra Costa 10,107 9,861
Pittsburg 10,769 10,056
Potrero 10,647 10,593
Net Capacity Factor (%)(3)
Contra Costa 33.4 34.3
Pittsburg 29.9 29.5
Potrero 47.2 25.3
Equivalent Availability Factor (%)(3)
Contra Costa 83.7 86.0
Pittsburg 78.4 81.0
Potrero 82.5 82.0
--------------------
(1) Summer rating.
(2) Annual average based on levels of full- and part-load
operation as projected by PA Consulting.
(3) Represents weighted average for annual net heat rate, net
capacity and equivalent availability factor.
Environmental Assessment
Environmental Site Assessment
In connection with the sale of the Mirant California Facilities,
PG&E agreed to undertake any remediation (including during decommissioning) that
relates to any pre-closing environmental condition or transmission environmental
condition required by any governmental authority with jurisdiction over the
Mirant California Facilities. If Mirant Delta or Mirant Potrero chooses to
develop a plant other than a fossil-fueled power plant or a substantially
similar industrial purpose, which development would make the costs of
environmental remediation materially higher, PG&E's costs of remediation will be
capped at the costs which would have been incurred if there had been no change
in use. Long-term remediation activities and future remediation of residual
contamination under structures on the plant sites are PG&E's responsibility.
PG&E is not, however, responsible for other remediation work unless changes in
environmental laws or in the environmental cleanup standards of a governmental
authority require additional remediation. Due to the environmental indemnity in
the Purchase and Sale Agreements which obligates PG&E to indemnify Mirant
Potrero and Mirant Delta for pre-existing environmental conditions at the sites
of the Mirant California Facilities, no funds for environmental remediation are
included in the Projected Operating Results.
In 1999, we reviewed Phase I and II ESA reports prepared in 1997 and
1998, respectively, for the Mirant California Facilities regarding
investigations of known or potential site contamination issues in connection
with the sites of the Mirant California Facilities. Because no updated ESAs of
previous or recent environmental investigations regarding the potential for site
contamination issues at the sites of the Mirant California Facilities have been
provided for our review, we can offer no opinion with respect to potential site
contamination issues at the sites of the Mirant California Facilities, if any,
or potential future remediation costs should contamination be found. While we
have not independently investigated site conditions, Mirant California reported
that, to its knowledge, the conditions at
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the sites of the Mirant California Facilities are materially similar to those
presented in the 1997 and 1998 ESAs. Refer to the Supplement for additional
information on previously conducted ESAs.
Status of Permits and Approvals
We have reviewed the key permits and approvals for the Mirant
California Facilities. A listing of the key permits and approvals is shown in
the Supplement. The major permits and approvals required to operate the Mirant
California Facilities have been obtained and are currently valid or are in the
process of being renewed, and we are not aware of any technical circumstances
that would prevent the renewal of the major permits or approvals.
Regulatory Compliance
We have reviewed 1999 and 2000 excess air emissions reports, the
Wastewater Discharge Monitoring Reports for 2000 and discussed the compliance
status of the Mirant California Facilities with Mirant California and Mirant
Generation personnel. The Mirant California Facilities appear to be in material
compliance with the various conditions set forth in the key permits and
approvals.
We note the following circumstances relative to compliance with
permits and approvals that could have an impact on future operations. Additional
discussion of certain such circumstances is presented in the Supplement:
o During 1995, the Bay Area Air Quality Management District
("BAAQMD") amended Rule 9-11, which regulates the control of NO(X) and CO
emissions from Utility Electric Power Generating Boilers. This Rule
establishes specific "system-wide" emission limitations to be achieved by
boilers greater than or equal to 250 MMBtu/hr. For purposes of this
Report, "system-wide" emission limitations refers to all power generation
owned and/or operated by Mirant California. This Rule will necessitate the
installation of specific control equipment on certain of the existing
units. Refer to the Supplement for additional information.
o Certain capital expenditures along with associated O&M expenses
have been identified by Mirant California to comply with future
environmental requirements of Rule 9-11. At this point in time, we believe
it is reasonable to assume such installations, costs and associated
emission rates in the Projected Operating Results. For the purposes of the
Projected Operating Results, based on discussions with Mirant California,
we have assumed the installation of: (1) low-NO(X) burners on Contra Costa
Unit 6 by February 2001 and a SCR System by May 2003; (2) SCR installation
on Contra Costa Unit 7 by June 2001; (3) SCR installation on Pittsburg
Unit 5 by July 2002; (4) SCR installation on Pittsburg Unit 6 by April
2002; (5) SCR installation on Pittsburg Unit 7 by May 2003; and (6) SCR
installation on Potrero Unit 3 by May 2004. Specific emission rate
assumptions used in the Projected Operating Results are given in the
Supplement.
o Pittsburg Units 1 through 4 will require SCR retrofits should they
be kept operating so that compliance with Rule 9-11 can be achieved in the
2002-2004 timeframe. Capital expenditures and associated operating and
maintenance expenses have been included in the Projected Operating
Results.
o The Mirant California Facilities are subject to Title IV of the
Clean Air Act (Acid Rain Provisions) whereby each unit must possess SO(2)
allowances to cover its emissions beginning in 2000. The future cost of
SO(2) allowances will be market dependent and could be lower or higher
than the current values for such allowances. The exact number of
allowances to be required in the future will depend on the utilization of
the units. Specific emission rate assumptions and the number of allowances
allocated to each facility are presented in the Supplement. The allowance
costs assumed in the Projected Operating Results are presented later in
this Report.
o There are a number of potential future regulations that, if
promulgated, could increase capital expenditures and O&M costs at the
Mirant California Facilities. Such potential regulations include mercury
control, PM(2.5), regional haze, regional visibility, water intake
structure regulations, potential ratcheting of SO(2) allowances beyond
2009 and Subtitle D regulations pertaining to the disposal of fuel
combustion wastes. The schedule and specific regulations to be promulgated
are not presently known; therefore, the impact of such potential
regulations has not been incorporated into the Projected Operating
Results. In addition, due to the
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fact that the Mirant California Facilities operate primarily on natural
gas, the impact of these potential regulations is not likely to be
significant.
o The cooling water intakes for the Pittsburg and Contra Costa
Facilities are located in a nursery area for striped bass, which is
considered a valued fishery resource. The Pittsburg and Contra Costa
Facilities are operating under a Resource Management Program required
under the National Pollutant Discharge Elimination System ("NPDES")
Permits that imposes certain restrictions on the thermal water outfall
during the spawning period, considered to be between May and July of each
year. The renewal of the NPDES Permit and the need to obtain a federal
Take Permit for impacting endangered species will likely require
additional capital expenditures and O&M expenses at the Mirant California
Facilities. For the purposes of the Projected Operating Results, based on
discussions with Mirant California, we have assumed the installation of
Gunderbooms at the Contra Costa and Pittsburg Facilities. Gunderbooms are
an aquatic filter barrier system that proposes to lessen the plant's
cooling water system impact on the fish species by excluding them from
entrainment and impingement as the full cooling water flow is drawn
through a fabric barrier at low velocity. The actual decision to install
the Gunderbooms will be made at a later date based on the outcome of the
agency negotiations regarding the federal Take Permit. Refer to the
Supplement for additional information.
MIRANT NEW YORK FACILITIES
Description of the Facilities
The Mirant New York Facilities consist of generating units located
at eight separate facility sites in New York. The thermal generating units
consist of the Bowline power plant (the "Bowline Facility") owned by Mirant
Bowline, LLC ("Mirant Bowline"); the Lovett power plant (the "Lovett Facility")
owned by Mirant Lovett, LLC ("Mirant Lovett"); and the Hillburn power plant (the
"Hillburn Facility"), all located in Rockland County, New York; and the
Shoemaker power plant (the "Shoemaker Facility") located in Orange County, New
York. The Hillburn and Shoemaker Facilities are referred to collectively as the
"NY CT Facilities". The hydroelectric generating units (collectively, the
"Hydroelectric Facilities") consist of the Mongaup power plant (the "Mongaup
Facility"); the Swinging Bridge power plant (the "Swinging Bridge Facility");
the Rio power plant (the "Rio Facility"); and an operational interest in the
Grahamsville power plant (the "Grahamsville Facility"). The NY CT Facilities and
the Hydroelectric Facilities are owned by Mirant NY-Gen, LLC ("Mirant NY-Gen").
Each of Mirant Bowline, Mirant Lovett, and Mirant NY-Gen are indirect
wholly-owned subsidiaries of Mirant Generation and are collectively referred to
as "Mirant New York". All of these Facilities were acquired from Orange and
Rockland Utilities, Inc. ("ORU") on July 1, 1999. There is an administrative and
engineering office for the Mirant New York Facilities in Suffern, New York.
The Bowline Facility
The Bowline Facility is located approximately 35 miles north of New
York City on a site of approximately 160 acres adjacent to the Hudson River in
West Haverstraw, New York. In addition to the existing Bowline Facility
property, an additional 98 acres of adjacent property is owned by Mirant
Bowline, of which approximately 75 acres is in an upland area, and 23 acres are
underwater acres in the Hudson River.
The Bowline Facility is comprised of two conventional steam turbine
units with a total net summer generating capacity of 1,212 MW as listed in Table
11. The Bowline Facility is the largest of the Mirant New York Facilities. It
provides peaking and intermediate generation and is capable of utilizing both
No. 6 fuel oil and natural gas.
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Table 11
Unit Characteristics
Bowline Facility
Summer Full Load
In-Service Capacity Heat Rate Dispatch
Unit Fuel Date (MW) (Btu/kWh) Type
---- ---- ---- ---- --------- ----
Units 1 & 2 Gas/No. 6 Oil 1972/74 1,212 9,843 Intermediate
In addition, the Bowline Facility has certain common facilities
shared by both units such as river water pumping stations, fuels receiving,
storage and handling systems, water treatment systems, warehouses, maintenance
shops, a chemistry laboratory, administrative offices and an electrical
switchyard.
The design and construction of electric utility generating units
using natural gas or No. 6 fuel oil to fire steam boilers has been common for
many years. The Bowline Facility was designed utilizing the standard
technologies available at the time it was built. Where it has proven
economically desirable, or where regulatory changes have been required, new
technologies have been "backfit" into the Bowline Facility to improve
operations, environmental compliance, and efficiencies. Examples of this include
control system replacements, burner and combustion equipment upgrades, and the
replacement of turbine components with improved designs.
In general, Bowline Units 1 and 2 have been operated as intermediate
units, although in recent years, due to equipment conditions, Bowline Unit 2 has
been utilized more as a peaking unit.
Planning is currently in progress for a third unit at the Bowline
Facility. This unit would be a gas-fired combined cycle unit with a capacity of
approximately 750 MW and would utilize natural gas from a new pipeline that is
currently being developed. We have not included any of the costs or revenues
associated with this planned new unit in the Projected Operating Results.
The Lovett Facility
The Lovett Facility is located approximately 40 miles north of New
York City on a site of approximately 60 acres on the west bank of the Hudson
River in Tompkins Cove, New York.
The Lovett Facility is comprised of three conventional steam turbine
units with a total net summer generating capacity of 432 MW, as listed in Table
12. The Lovett Facility provides both peaking and base-load generation and is
capable of utilizing coal, No. 6 fuel oil and natural gas.
Table 12
Unit Characteristics
Lovett Facility
Summer Full Load
In-Service Capacity Heat Rate Dispatch
Unit Fuel Date (MW) (Btu/kWh) Type
---- ---- ---- ---- --------- ----
Unit 3 Gas/No. 6 Oil 1955 67 11,000 Peaking
Unit 4 Coal/Gas/No. 6 Oil 1966 172 10,774 Base-load
Unit 5 Coal/Gas/No. 6 Oil 1968 193 10,833 Base-load
---
Total 432
In addition, the Lovett Facility has certain common facilities
shared by the three units such as river water pumping stations, fuels receiving,
storage and handling systems, water treatment systems, warehouses, maintenance
shops, a chemistry laboratory, administrative offices and an electrical
switchyard. Lovett Units 1 and 2 were retired in 1995.
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The design and construction of electric utility generating units
using coal, natural gas or No. 6 fuel oil to fire steam boilers has been common
for many years. The Lovett Facility was designed utilizing the standard
technologies available at the time it was built. Where it has proven
economically desirable, or where regulatory changes were required, new
technologies have been "backfit" into the Lovett Facility to improve operations,
environmental compliance, and efficiencies. Examples of this include control
system replacements, burner and combustion equipment upgrades, installation of
new ESPs on Lovett Units 4 and 5, conversion of Lovett Unit 4 to balanced draft
operation and the replacement of turbine components with improved designs.
In general, Lovett Units 4 and 5 have normally been base-loaded,
which is common for medium sized coal-fired units which have generally been
designed for this type of operation. Lovett Unit 3, which is limited to firing
either No. 6 fuel oil or natural gas, is normally operated as a peaking unit.
The NY CT Facilities
The Hillburn Facility is located in the Village of Hillburn, Town of
Ramapo, New York, and the Shoemaker Facility is located in the Towns of
Wawayanda and Wallkill, City of Middletown, New York. Each of the NY CT
Facilities is comprised of a single simple cycle CT unit with a total net summer
generating capacity of 76 MW in the aggregate, as listed in Table 13. The NY CT
Facilities are generally operated in peaking service.
Table 13
Unit Characteristics
NY CT Facilities
Summer Full Load
In-Service Capacity Heat Rate Dispatch
Unit Fuel Date (MW) (Btu/kWh) Type
---- ---- ---- ---- --------- ----
Hillburn Gas/Kerosene 1971 36 15,000 Peaking
Shoemaker Gas/Kerosene 1971 40 15,000 Peaking
--
Total 76
The Hydroelectric Facilities
The Hydroelectric Facilities have a total net summer generating
capacity of 44 MW in the aggregate, as listed in Table 14. The Mongaup Facility,
Swinging Bridge Facility and Rio Facility are "Mongaup River Projects" under
federal law and are licensed by the Federal Energy Regulatory Commission
("FERC") as projects number 10481, 10482 and 9690, respectively. The licenses
are not due to expire until 2022.
The Grahamsville Facility was constructed and is operated pursuant
to an agreement with New York City which allows for the Grahamsville Facility to
be operated at the end of the East Delaware Tunnel for a period of 50 years.
Mirant NY-Gen is currently negotiating an extension of this agreement, which
expires in 2006. For the purpose of the Projected Operating Results, we have
assumed this agreement will be renewed at the same terms and conditions. With
the exception of the Grahamsville Facility that is base-loaded, the
Hydroelectric Facilities are generally operated in peaking service, depending on
water availability.
A-19
Table 14
Unit Characteristics
Hydroelectric Facilities
Summer Full Load
In-Service Capacity Heat Rate Dispatch
Unit Fuel Date (MW) (Btu/kWh) Type
---- ---- ---- ---- --------- ----
Mongaup 1-4 -- 1923-26 4 -- Peaking
Swinging Bridge 1-2 -- 1930-39 13 -- Peaking
Rio 1-2 -- 1927 10 -- Peaking
Grahamsville -- 1956 17 -- Base-load
--
Total 44
Operation and Maintenance
Operation of the Mirant New York Facilities
The Mirant New York Facilities are operated from an office in
Suffern, New York. While several management personnel, including the plant
managers, were brought in from affiliates of Mirant New York, the majority of
the operating staffs for the facilities were hired from ORU at the time the
facilities were purchased. The Suffern office provides administrative support to
the Facilities in the areas of accounting and payroll, human resources,
marketing, environmental management, management of the Hydroelectric and NY CT
Facilities, and engineering.
In June of 2000, a new collective bargaining agreement was entered
into with the International Brotherhood of Electrical Workers Union that
represents the hourly personnel at the Facilities. This agreement provides
Mirant New York with more flexibility in assigning work to different
classifications of workers, and provides that competency testing be utilized in
addition to seniority when employees are being considered for advancement.
Operating Programs and Procedures
The Maximo maintenance management system has been implemented at all
of the Mirant New York Facilities. All maintenance work including corrective,
preventive and predictive maintenance is scheduled and tracked utilizing this
system. Working with a consultant, Mirant New York intends to optimize the use
of the Maximo system over the next two years. This optimization may include the
combining of certain resources between the Bowline and Lovett facilities, and
will address both short-term and long-term maintenance needs. Currently, many of
the former owners' maintenance and operations practices are still in place, and
Mirant New York is continuing to work towards reducing the backlog of
maintenance work that existed when the facilities were purchased. Changes
implemented by Mirant New York to date include an increased emphasis on
inspections and more in depth root cause analysis to identify problems rather
than simply performing superficial repairs. In operations, increased emphasis
has been placed on environmental compliance, especially for opacity, and
additional environmental training has been scheduled for the operators.
Operating History
Operating data for the past several years of operation of the Mirant
New York Facilities was provided by Mirant New York. The historical averages and
corresponding future averages are summarized in Table 15. The projected
generation, average annual heat rate, capacity factor, and equivalent
availability factor have been estimated by PA Consulting. A more detailed
summary of the historical performance results is included in Exhibit A-10 and in
the Supplement.
A-20
Table 15
Operating History
Mirant New York Facilities
Historical Projected
Average Average
(1996-2000) (2001-2020)
----------- -----------
Net Capability Rating (MW)(1)
Bowline 1,205 1,212
Lovett 439 432
NY CTs (2) 76 76
Hydroelectric (2) 44 44
Net Generation (GWh)
Bowline 2,058 2,550.0
Lovett 2,078 1,752.4
NY CTs 17.4 8.1
Hydroelectric 141.8 161.0
Annual Net Heat Rate (Btu/kWh)(3)(4)
Bowline 10,632 10,065
Lovett 10,904 11,020
NY CTs (5) 21,838 15,552
Hydroelectric -- --
Net Capacity Factor (%)(4)
Bowline 23.0 24.0
Lovett 60.3 49.3
NY CTs (5) 1.7 1.2
Hydroelectric (5) 58.1 53.3
Equivalent Availability Factor (%)(4)
Bowline 85.6 79.0
Lovett 82.0 84.0
NY CTs (6) 89.7 95.2
Hydroelectric (7) 86.2 86.0
--------------------
(1) Summer rating.
(2) Represents 1998 only.
(3) Annual average based on levels of full- and part-load
operation as projected by PA Consulting. Projected decreases
in annual average heat rates compared to historical heat rates
result for some units due to an increase in hours at more
efficient, full-load operation projected by PA Consulting.
(4) Represents weighted average for annual net heat rate, net
capacity and equivalent availability factor.
(5) Represents 1996, 1997, and 2000 only.
(6) Represents 1996, 1997, July through December 1999, and 2000
only.
(7) Represents July through December 1999 and 2000 only.
Environmental Assessment
Environmental Site Assessment
Mirant New York has purchased liability insurance for potential
pre-existing, but unknown, environmental contamination at the Mirant New York
Facilities, with a 10-year term and $15 million in coverage for the Mirant New
York Facilities other than the Hydroelectric Facilities.
In 1999, we reviewed Phase I and II ESA reports prepared for the
Mirant New York Facilities regarding investigations of known or potential site
contamination issues and environmental liability issues for Bowline and Lovett
Facilities, the Hydroelectric Facilities and NY CT Facilities. These assessments
were prepared during August 1998, October 1998, and June 1999. Because no
updated ESAs of previous or recent environmental investigations regarding the
potential for site contamination issues at the sites of the Mirant New York
Facilities have been provided for our review, we can offer no opinion with
respect to potential site contamination issues at the sites of
A-21
the Mirant New York Facilities, if any, or potential future remediation costs
should contamination be found. While we have not independently investigated
site conditions, Mirant New York reported to us that, to its knowledge, the
conditions at the sites of the Mirant New York Facilities are materially
similar to those presented in the 1998 and 1999 ESAs. For the purposes of the
Projected Operating Results, Mirant New York has allocated $1,000,000 for the
contingency environmental response work at the Mirant New York Facilities.
Refer to the Supplement for additional information on previously conducted
site assessments.
Status of Permits and Approvals
We have reviewed the key permits and approvals for the Mirant New
York Facilities. A listing of the key permits and approvals is shown in the
Supplement. The major permits and approvals required to operate the Mirant New
York Facilities have been obtained and are currently valid or are in the process
of being renewed, and we are not aware of any technical circumstances that would
prevent the renewal of the major permits or approvals.
Regulatory Compliance
We have reviewed 1999 and 2000 excess air emissions reports, the
Wastewater Discharge Monitoring Reports for 2000 and discussed the compliance
status of the Mirant New York Facilities with Mirant New York and Mirant
Generation personnel. The Mirant New York Facilities appear to be in material
compliance with the various conditions set forth in the key permits and
approvals and consent orders as applicable.
We note the following circumstances relative to compliance with
permits and approvals that could have an impact on future operations. Additional
discussion of certain such circumstances is presented in the Supplement.
o The location of the Mirant New York Facilities in designated ozone
non-attainment areas triggered the requirement of RACT. The Mirant New
York Facilities use low-NO(X) burners and combustion modifications in
addition to a NO(X) averaging plan consistent with applicable regulations
to comply with RACT limits.
o Title I of the Clean Air Act and subsequent regulations pursuant
to the Act, including the USEPA NO(X) SIP Call and Section 126 Petitions,
established a market-based program for NO(X) allowances where units
covered by the Act must possess NO(X) allowances to cover their emissions.
New York promulgated regulations allocating allowances to the Mirant New
York Facilities. The future cost of NO(X) allowances will be market
dependent and could be lower or higher than the current values for such
allowances. The exact number of allowances to be required in the future
will depend on the utilization of the units in the future. Specific
emission rate assumptions and the number of allowances allocated to each
facility are presented in the Supplement. The allowance costs assumed in
the Projected Operating Results are presented later in this Report.
o The Mirant New York Facilities are subject to Title IV of the
Clean Air Act (Acid Rain Provisions) whereby each unit must possess SO(2)
allowances to cover its emissions beginning in 2000. The future cost of
SO(2) allowances will be market dependent and could be lower or higher
than the current values for such allowances. The exact number of
allowances to be required in the future will depend on the utilization of
the units. Specific emission rate assumptions and the number of allowances
allocated to each facility are presented in the Supplement. The allowance
costs assumed in the Projected Operating Results are presented later in
this Report.
o Title IV of the Clean Air Act also imposes specific NO(X) emission
limits that must be met (presumptive limits) by all coal units subject to
the Act. The existing New York NO(X) limits for the coal-fired Lovett
Units 4 and 5 are more stringent than the Title IV Acid Rain NO(X)
regulations.
o For the purposes of the Projected Operating Results, based on
discussions with Mirant New York, we have assumed that Mirant New York
would not implement any further retrofits of the Lovett and Bowline
Facilities with NO(X) and SO(2) reduction technologies. Mirant New York
plans to purchase SO(2) and NO(X) allowances from the open market should
the plants exceed their respective allowance allocations.
A-22
o The Bowline and Lovett Facilities are operating under a New York
State Department of Environmental Conservation Consent Order/Decree for
compliance with New York State's opacity standard. The consent order was
issued to ORU on July 28, 1998 and establishes a stipulated penalty
schedule for future non-compliance episodes. During the fourth quarter
1999 to the third quarter 2000 total compliance penalties assessed to the
Bowline and Lovett Facilities were $10,000 and $41,400, respectively. It
is expected that the consent order will be incorporated into the Title V
Permits once they are issued.
o The Bowline Facility is one of a number of plants operating with
once through cooling water to the Hudson River. Under the terms of the
Hudson River Settlement Agreement ("HRSA"), the plant has the potential to
be restricted in its operation during May 15 to July 31. In addition to
this requirement, a credit-banking system was established to allow units
to operate if credits are available. Mirant New York has reported that
sufficient credits have been available in the past to operate the Bowline
Facility at desired levels without curtailment. For additional description
of the HRSA, refer to the Supplement.
o In November 1999, the USEPA issued NOVs to owners and operators of
32 coal-fired electric generating plants, charging that over many years
these plants had been changed or modified in ways that resulted in
increased emission of pollutants and that the plants did not obtain new
source permits or prevention of significant deterioration permits
applicable to new or modified sources. None of the Mirant New York
Facilities have been issued such NOVs. In October 1999, Mirant's parent
corporation received an information request from the State of New York
concerning air quality control implications of various repairs and
maintenance at the Lovett Facility. While we cannot predict future USEPA
and State of New York actions, should such NOVs be issued to any of the
assets, the cost to comply could be substantial.
o The Lovett Facility received an NOV May 25, 2000 from the New York
Department of Environmental Conservation ("DEC") alleging violations of
the New Source Review rules in that over the years the plant has been
modified or changed in ways that resulted in increased emission of
pollutants without proper authorization under the New Source Review rules.
The NOV was issued to the previous owner, ORU. To date, Mirant New York
has not received an NOV. Should the NOV issued result in any required
plant modifications, the cost to comply could be substantial.
o There are a number of potential future regulations that, if
promulgated, could increase capital expenditures and O&M cost at the
Mirant New York Facilities. Such potential regulations include mercury
control, PM(2.5), regional haze, regional visibility, water intake
structure regulations, potential ratcheting of SO(2) allowances beyond
2009, potential ratcheting of SO(2) and NO(X) emissions by New York, and
Subtitle D regulations pertaining to the disposal of fuel combustion
wastes. The schedule and specific regulations to be promulgated are not
presently known; therefore, the impact of such potential regulations has
not been incorporated into the Projected Operating Results.
MIRANT NEW ENGLAND FACILITIES
Description of the Facilities
The Mirant New England Facilities consist of generating units
located at four separate facility sites in New England. The thermal generating
units consist of the Canal power plant (the "Canal Facility") located in
Sandwich, Massachusetts; the Kendall power plant (the "Kendall Facility")
located in Cambridge, Massachusetts; the power plant facilities located in two
locations on Martha's Vineyard (the "Martha's Vineyard Facility"); and an
ownership interest in the Wyman power plant located on Cousins Island in
Yarmouth, Maine (the "Wyman Facility"). The Martha's Vineyard and Wyman
Facilities have not been reviewed, nor have their revenues or expenses been
included in the Projected Operating Results. Mirant Generation estimates that
these units would have an immaterial impact on the overall revenue of the Mirant
Generation Facilities. The Kendall Facility is owned by Mirant Kendall, LLC
("Mirant Kendall"), which is an indirect wholly-owned subsidiary of Mirant
Generation. The Canal Facility is owned by Mirant Canal LLC ("Mirant Canal"),
which is also an indirect wholly-owned subsidiary of Mirant Generation. Mirant
Kendall and Mirant Canal are collectively referred to herein as "Mirant New
England". All of the Mirant New England Facilities were acquired from
subsidiaries of Commonwealth Energy System ("Commonwealth") and Eastern
Utilities Associates ("EUA") in December 1998. There is an administrative and
engineering office for the Mirant New England Facilities in Rockland,
Massachusetts. Revenues from the Canal Facility Unit 1 are derived from
A-23
Power Purchase Agreements with Cambridge Electric Light Company and Commonwealth
Electric Company (jointly), Boston Edison Company, Montaup Electric Company, and
an affiliate of Mirant Generation that expire on October 10, 2002.
The Canal Facility
The Canal Facility is located on the south side of Cape Cod Canal in
Sandwich, Massachusetts. The plant is approximately one mile from the east end
of the canal entrance to Cape Cod Bay. The Canal Facility is located on an
approximately 132-acre site.
The Canal Facility is comprised of two steam turbine generators with
a total net summer generating capacity of 1,112 MW as listed in Table 16. The
Canal Facility provides intermediate generation and is capable of utilizing No.
6 oil or natural gas.
Table 16
Unit Characteristics
Canal Facility
Summer Full Load
In-Service Capacity Heat Rate Dispatch
Unit Fuel Date (MW) (Btu/kWh) Type
---- ---- ---- ---- --------- ----
Unit 1 No. 6 Oil 1968 559 9,287 Intermediate
Unit 2 Gas/No. 6 Oil 1976 553 9,862 Intermediate
-----
Total 1,112
The Kendall Facility
The Kendall Facility is located on approximately six acres of land
along the Charles River in Cambridge, Massachusetts. The plant is located at the
junction of the Broad Canal and the Charles River. The Broad Canal is the source
of cooling water and the effluent cooling water is returned to the Charles
River.
The Kendall Facility consists of three condensing steam turbines and
two aeroderivative single-shaft gas turbines with a total net summer generating
capacity of 97 MW, as listed in Table 17. The Kendall Facility delivers steam to
a subsidiary of NSTAR for distribution to industrial users and a major health
care facility located on the Boston side of the Charles River. The Kendall
Facility also has two auxiliary boilers to supply supplemental heating steam for
off-site distribution during periods of high demand. These boilers are owned by
NSTAR and operated by Mirant Kendall.
The present configuration of the Kendall Facility has been developed
over the last 52 years. In 1949, the boilers for Kendall Units 1 and 2 and the
steam turbine for Kendall Unit 1 were installed. In 1951, the steam turbine for
Kendall Unit 2 was added, increasing the total output. In 1954, the boiler for
Kendall Unit 3 was added and Kendall Unit 3 was commissioned in 1958. CTs 1 and
2 were installed and commissioned in 1970 and 1972, respectively. To increase
reliability and support the increasing steam loads, two package boilers were
installed in the 1970-1971 time frame. Natural gas is delivered to the Kendall
Facility through an underground piping system.
In addition to providing electric energy and industrial steam to the
Cambridge and Boston distribution systems, the Kendall Facility supports the
Cambridge electrical distribution by providing voltage support when requested by
the New England Independent System Operator ("ISO-NE") during demand periods.
Mirant Kendall is installing a CT, heat recovery steam generator
cogeneration plant that will increase both the electric power and steam
generation capabilities of the Kendall Facility. The design of the cogeneration
plant has not been reviewed, nor has its potential benefit been considered in
the preparation of the Projected Operating Results.
The facilities also include three power boilers, a control room,
fuel oil storage tanks, and a fuel oil transfer house.
A-24
Table 17
Unit Characteristics
Kendall Facility
Summer Full Load
In-Service Capacity Heat Rate Dispatch
Unit Fuel Date (MW) (Btu/kWh) Type
---- ---- ---- ---- --------- ----
Unit 1 No. 6 Oil/Gas 1949 18 13,214 Peaking
Unit 2 No. 6 Oil/Gas 1951 19 13,214 Peaking
Unit 3 No. 6 Oil Gas 1958 26 13,214 Peaking
CT 1 Jet A Fuel 1970 17 14,614 Peaking
CT 2 Jet A Fuel 1972 17 14,614 Peaking
--
Total 97
The Martha's Vineyard and Wyman Facilities
Mirant Canal owns the Martha's Vineyard Facility. The Martha's
Vineyard Facility consists of five 2.75 MW internal combustion, diesel
generators located on the island of Martha's Vineyard. Two of the diesel
generators were installed at the Oak Bluffs plant in 1969 and a third was
installed in 1972. In 1975, the West Tisbury plant was placed in service with
two diesel generators.
Mirant Canal also owns an approximately 1.4 percent ownership
interest, or 8.8 MW, in Wyman Unit 4. Wyman Unit 4 is a 618 MW unit firing No. 6
oil located on Cousins Island in Yarmouth, Maine. Wyman Unit 4 was placed in
operation in 1978.
We have not reviewed the Martha's Vineyard or Wyman Facilities, nor
have we included any revenues or expenses from these facilities in the Projected
Operating Results.
Operation and Maintenance
Operation of the Mirant New England Facilities
We have visited both the Canal and Kendall Facilities. The operating
and maintenance programs, including operating procedures and programs;
preventive, predictive and corrective maintenance programs and procedures;
planning and scheduling requirements and procedures; and reporting and
documentation requirements were reviewed at both the Canal and Kendall
Facilities. During the site visits, the material condition of the plants was
observed, and discussions were held with plant operating and maintenance
management.
The operating programs at both the Canal and Kendall Facilities
include the management, engineering, maintenance, financial, administrative and
support groups necessary to operate and maintain the station in accordance with
accepted industry operating practices. During discussions at the plant, both the
Canal and Kendall Facility plant managers reported that there is minimal
personnel turnover in the plant operating and maintenance staff.
The plant managers at both the Canal and Kendall Facilities have
indicated that planned and proposed changes in the operating organization and
increased operator participation in the day-to-day decision making will reduce
operating costs in the near term while maintaining the quality of the
operations.
Both the Canal and Kendall Facilities have instituted program
initiatives that, if successful, will improve station O&M practices and
performance. Included are performance management programs for station personnel;
a maintenance planning process that will improve both preventive and corrective
maintenance performance; and a team-based concept that will provide operating
and maintenance personnel additional responsibility and authority to operate and
maintain the plants while maintaining the necessary management guidance and
oversight. These programs are geared to reducing operating and maintenance costs
and improving station performance indicators.
A-25
Operating Programs and Procedures
The Mirant New England maintenance departments utilize the Maximo
maintenance management system. The Canal Facility also utilizes a Plant
Information ("PI") System. The PI system will display and trend most of the
important power plant variable parameters. Canal Facility managers trend
parameters that are indicative of degraded equipment and systems. At the Kendall
Facility, Maximo is being used for inventory control. The Kendall Facility plant
managers reported that additional Maximo functions are being activated.
Major maintenance of the Canal Facility is presently scheduled on a
two-year cycle for the steam generators and a six-year cycle for the steam
turbines. Overhaul duration is typically six to eight weeks, depending on the
scope of the work to be performed. If there is no major overhaul scheduled, a
two- to six-week outage is performed on the steam generator and required
auxiliaries. A major turbine overhaul is scheduled for Canal Unit 1 in 2001 to
improve the turbine efficiency.
Major maintenance at the Kendall Facility is planned to assure that
the export steam supply is 100 percent reliable. The major equipment at the
Kendall Facility has demonstrated good reliability. Boilers are alkaline cleaned
on approximately a 10-year cycle. The Kendall Unit 3 boiler was cleaned in 1999.
The steam turbines have a major inspection/overhaul every 8 to 10 years. The
major overhaul for the Kendall Unit 2 turbine was delayed in 2000 and is
scheduled for the fall of 2001. During this overhaul, improvements in turbine
internals will improve overall efficiency. Overhaul schedules are dependent on
total hours of operation and the number of start cycles.
Operating History
Operating data for the past five years of operation of the Mirant
New England Facilities was provided by Mirant New England. The historical
averages and corresponding future averages are summarized in Table 18. The
projected generation, average annual heat rate, capacity factor, and equivalent
availability factor have been estimated by PA Consulting. A more detailed
summary of the historical performance results is included in Exhibit A-10 and in
the Supplement.
A-26
Table 18
Operating History
Mirant New England Facilities
Historical Projected
Average Average
(1996-2000) (2001-2020)
----------- -----------
Net Capability Rating (MW)(1)
Canal 1,112 1,112
Kendall 93 97
Net Generation (GWh)
Canal 4,787.6 2,667.5
Kendall 107.2 42.7
Annual Net Heat Rate (Btu/kWh)(2)(3)
Canal 9,884 9,580
Kendall 11,585 14,035
Net Capacity Factor (%)(3)
Canal 51.7 27.4
Kendall 37.6(4) 2.7
Equivalent Availability Factor (%)(3)
Canal 77.0 78.0
Kendall 95.2 83.0
--------------------
(1) Summer rating.
(2) Annual average based on levels of full- and part-load
operation as projected by PA Consulting. Projected decreases
in annual average heat rates compared to historical heat rates
result for some units due to an increase in hours at more
efficient, full-load operation projected by PA Consulting.
(3) Represents weighted average for annual net heat rate, net
capacity and equivalent availability factor.
(4) Does not include Kendall CTs, which have a capacity factor of
less than one percent.
Environmental Assessment
Environmental Site Assessments
Canal Electric Company and Cambridge Electric Light Company retained
responsibility for environmental response work under the Massachusetts
Contingency Plan for certain environmental conditions at the Canal and Kendall
Facilities, which have been identified in the relevant Asset Sale Agreements.
The environmental conditions at the Canal and Kendall Facilities that are being
addressed under the Massachusetts Contingency Plan are identified in the Canal
Electric Asset Sale Agreement and were reported in the Phase I and Phase II
environmental studies by an environmental consultant engaged by the Commonwealth
subsidiaries undertaken in connection with the divestiture process.
In connection with the sale of the Mirant New England Facilities,
Commonwealth and EUA have provided a $15 million pollution liability insurance
policy to Mirant Canal and Mirant Kendall which is intended to mitigate the risk
of any unknown contamination at the Canal Facility or the Kendall Facility that
could trigger a legal requirement to perform an environmental cleanup or could
give rise to third party claims within ten years after the closing.
In 1999, we reviewed the various Phase I and II ESA reports
regarding environmental investigations prepared for the Canal and Kendall
Facilities, as well as a risk characterization report for the Kendall Facility,
which was originally prepared in 1997 and updated in 1998 by a different
environmental consultant. The Phase I and II environmental consultant
encountered observable and historical evidence of potential site contamination
that resulted in the environmental consultant conducting subsurface
environmental investigations that consisted of soil and groundwater sampling
during various phases at the Canal and Kendall Facilities. The environmental
consultant conducting subsurface environmental investigations at the Canal and
Kendall Facilities found historical releases of oil and hazardous materials had
occurred at both facilities. Mirant Canal's potential future costs associated
with the
A-27
release at its facility are estimated to be less than $100,000 per year and have
been included in the Projected Operating Results. The releases at the Kendall
Facility are being remediated by Commonwealth. Because no updated ESAs of
previous or recent environmental investigations regarding the potential for site
contamination issues at the sites of the Mirant New England Facilities have been
provided for our review, we can offer no opinion with respect to potential site
contamination issues at the sites of the Mirant New England Facilities, if any,
or potential future remediation costs should contamination be found. While we
have not independently investigated site conditions, Mirant Canal and Mirant
Kendall reported that, to their knowledge, the conditions at the site of the
Mirant New England Facilities are materially similar to those presented in the
1997 and 1998 ESAs. Refer to the Supplement for additional information on
previously conducted ESAs.
Status of Permits and Approvals
We have reviewed the key permits and approvals for the Mirant New
England Facilities. A listing of the key permits and approvals is shown in the
Supplement. The major permits and approvals required to operate the Mirant New
England Facilities have been obtained and are currently valid or are in the
process of being renewed, and we are not aware of any technical circumstances
that would prevent the renewal of the major permits or approvals.
Regulatory Compliance
We have reviewed 1999 and 2000 excess air emissions reports, the
Wastewater Discharge Monitoring Reports for 2000 and discussed the compliance
status of the Mirant New England Facilities with Mirant New England and Mirant
Generation personnel. The New England Facilities appear to be in material
compliance with the various conditions set forth in the key permits and
approvals.
We note the following circumstances relative to compliance with
permits and approvals that could have an impact on future operations. Additional
discussion on certain of such circumstances is presented in the Supplement:
o The location of the Mirant New England Facilities in designated
ozone non-attainment areas triggered the requirement of RACT. The Mirant
New England Facilities are operating with emission levels consistent with
RACT regulations.
o Title I of the Clean Air Act and subsequent regulations pursuant
to the Act, including the USEPA NO(X) SIP Call, established a market based
program for NO(X) allowances where units covered by the Act must possess
NO(X) allowances to cover their emissions. Massachusetts has adapted
regulations allocating allowances to individual units consistent with the
Act beginning in 2000. The future cost of NO(X) allowances will be market
dependent and could be lower or higher than the current values for such
allowances. The exact number of allowances to be required in the future
will depend on the utilization of the units in the future. Specific
emission rate assumptions and the number of allowances allocated to each
facility are presented in the Supplement. The allowance costs assumed in
the Projected Operating Results are presented later in this Report.
o The Mirant New England Facilities are subject to Title IV of the
Clean Air Act (Acid Rain Provisions) whereby each unit must possess SO(2)
allowances to cover its emissions beginning in 2000. The future cost of
SO(2) allowances will be market dependent and could be lower or higher
than the current values for such allowances. The exact number of
allowances to be required in the future will depend on the utilization of
the units. Specific emission rate assumptions and the number of allowances
allocated to each facility are presented in the Supplement. The allowance
costs assumed in the Projected Operating Results are presented later in
this Report.
o Mirant New England has retrofitted Canal Unit 1 with an SCR to
reduce NO(X) emissions to levels that would generate NO(X) allowances to
allow it to comply with allowance requirements. Plans to retrofit Canal
Unit 2 with an SCR have been put on hold until the NO(X) market fully
develops in order for Mirant New England to assess the economic viability
of SCR installation on Canal Unit 2.
o The Kendall Facility must comply with the terms of an
Administrative Compliance Order for SO(2) emissions, which was issued by
the Massachusetts Department of Environmental Protection ("MADEP") on
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March 15, 1995. This order requires the Kendall Facility to limit SO(2)
emissions to a rate of 379.6 pounds per hour ("lb/hr") for any single
10-hour period commencing either at 6:00 a.m., 7:00 a.m., or 8:00 a.m. and
further limit SO(2) emission for the next 14 hours (i.e., the balance of a
24-hour day) to a rate of 225.4 lb/hr. These restrictions limit the
ability of the Kendall Facility to operate at full load. Historically, the
Kendall Facility was not required to operate at load factors that would
exceed the above limitations.
o In November 1999, the USEPA issued NOVs to owners and operators of
32 coal-fired electric generating plants, charging that over many years
these plants had been changed or modified in ways that resulted in
increased emission of pollutants and that the plants did not obtain new
source permits or prevention of significant deterioration permits
applicable to new or modified sources. Since the Mirant New England
Facilities are gas/oil-fueled facilities, they have not been issued such
notices of violation. While we cannot predict future USEPA actions, should
such notices of violations be issued to any of the assets, the cost to
comply could be substantial.
o There are a number of potential future regulations that, if
promulgated, could increase capital expenditures and O&M cost at the
Mirant New England Facilities. Such potential regulations include MADEP
regulations for emission standards for power plants and federal
regulations for mercury control, PM(2.5), regional haze, regional
visibility, water intake structure regulations, potential ratcheting of
SO(2) allowances beyond 2009 and Subtitle D regulations pertaining to the
disposal of fuel combustion wastes. The schedule and specific regulations
to be promulgated are not presently known; therefore, the impact of such
potential regulations has not been incorporated into the Projected
Operating Results.
MIRANT TEXAS FACILITY
Description of the Bosque Facility
The Mirant Texas Facility consists of the Bosque generating facility
(the "Bosque Facility"), which is owned by Mirant Texas, LP ("Mirant Texas"), an
indirect wholly-owned subsidiary of Mirant Generation and is located southwest
of Dallas in rural Bosque County, near Laguna Park, Texas, on an approximately
281-acre site. Mirant Texas maintains an administrative office at the Bosque
Facility. The Bosque Facility consists of two combustion-turbine generators
("Bosque Units 1 and 2") and a combined-cycle unit under construction ("Bosque
Unit 3") with a total net summer generating capacity of 544 MW, as listed in
Table 19. Bosque Units 1 and 2 provide peaking generation, while Bosque Unit 3
is expected to provide base-load generation. All units at the Bosque Facility
burn natural gas. For the purpose of the Projected Operating Results, we have
assumed that the Bosque Unit 3 will begin commercial operation on June 1, 2001.
Revenues from Bosque Units 1 and 2 will be derived from the Bosque
PPA with Mirant Americas Energy Marketing LP ("MAEM") expiring no earlier than
June 1, 2005. Revenues from Bosque Unit 3 will be derived from an additional
agreement with MAEM expiring December 31, 2003.
Table 19
Unit Characteristics
Bosque Facility
Summer Full Load
In-Service Capacity Heat Rate Dispatch
Unit Fuel Date (MW) (Btu/kWh) Type
---- ---- ---- ---- --------- ----
Units 1 & 2 Gas 2000 308 10,666 Peaking
Unit 3 Gas 2001 236 7,108 Base-load
---
Total 544
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Operation and Maintenance
Operation of the Bosque Facility
We have not visited the Bosque Facility. The operating and
maintenance programs, including operating procedures and programs; preventive,
predictive and corrective maintenance programs and procedures; planning and
scheduling requirements and procedures; and reporting and documentation
requirements have not been reviewed. The description contained herein has been
provided by Mirant Texas.
Operating Programs and Procedures
Mirant Texas and GE have signed a Long Term Parts and Long Term
Service Agreement which includes the Bosque Facility. GE will provide all of the
maintenance requirements, including labor and parts, for GE-manufactured
turbines at Bosque Units 1, 2 and 3, and will provide heat rate, output, and
availability guarantees. GE will also schedule and perform, partially through
the Long Term Parts and Long Term Service Agreement, the annual outage
maintenance required in accordance with the CT manufacturer's recommendations.
The Bosque Facility utilizes Speedtronic Mark V control systems to
operate and monitor the CTs. The systems will display and trend most of the
important power plant variable parameters. The Bosque Facility operations staff
monitors parameters that are indicative of degraded equipment and systems.
No major maintenance is presently scheduled for Bosque Units 1 and
2. Major and minor maintenance schedules are dependent on total hours of
operation and the number of start cycles.
Operating History
Operating data for the past six months of operation of the Bosque
Facility was provided by Mirant Texas. The historical averages and corresponding
future averages are summarized in Table 20. The generation, average annual heat
rate, capacity factor, and equivalent availability factor have been estimated by
PA Consulting. A more detailed summary of the historical performance results is
included in Exhibit A-10 and in the Supplement.
Table 20
Operating History
Bosque Facility
Historical Projected (1)
Average Average
(2000) (2001-2020)
------ -----------
Net Capability Rating (MW)(2) 308(3) 544
Net Generation (GWh) 473.1(4) 1,706.1
Annual Net Heat Rate (Btu/kWh) 11,531(5) 8,386
Net Capacity Factor (%) 34.8(5) 49.6
Equivalent Availability Factor (%) N/A 96.0
-------------
(1) Projected averages include the operation of Bosque Unit 3.
(2) Summer rating.
(3) Performance test result, June 2000.
(4) Six-month total from monthly reports.
(5) Six-month average from monthly reports.
Commercial operation of Bosque Units 1 and 2 began on May 31 and
June 1, 2000, respectively. Therefore, less than six months of operating history
is available for Bosque Units 1 and 2. Several minor outages and forced trips
have occurred on both units during the first five months of operation, however
no unusual or significant events have occurred.
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Construction Status of Bosque Unit 3
Bosque Unit 3 is currently under construction and is scheduled to
commence operation in June 2001. The remaining construction cost is estimated by
Mirant Texas to be approximately $47 million as of January 1, 2001. For the
purposes of the Projected Operating Results, we believe it is reasonable to
assume that Bosque Unit 3 will begin operation on June 1, 2001. We have included
the estimated remaining construction of Bosque Unit 3 under the capital
expenditures for the Bosque Facility.
Environmental Assessment
Environmental Site Assessments
In 1999, we reviewed the "Hazardous Materials Environmental
Assessment Summary Report" dated April 1999 and the Phase I ESA report dated
July 1999, prepared for the Bosque Facility by an environmental consultant. As a
result of its investigations, the environmental consultant determined that no
further investigations were warranted. A more detailed account of the site
assessment findings is presented in the Supplement. Because no updated ESAs of
previous or recent environmental investigations regarding the potential for site
contamination issues at the Bosque Facility site have been provided for our
review, we can offer no opinion with respect to potential site contamination
issues at the Bosque Facility site, if any, or potential future remediation
costs should contamination be found. While we have not independently
investigated site conditions, Mirant Texas reported that, to its knowledge, the
conditions at the Bosque Facility are materially similar to those presented in
the 1999 ESAs.
Status of Permits and Approvals
We have reviewed the key permits and approvals for the Bosque
Facility. A listing of the key permits and approvals is shown in the Supplement.
The major permits and approvals required to operate the Bosque Facility have
been obtained and are currently valid or are in the process of being renewed,
and we are not aware of any technical circumstances that would prevent the
renewal of the major permits or approvals.
Regulatory Compliance
We have reviewed the year 2000 Excess Emissions Reports and
wastewater disposal methods and discussed with Mirant Texas and Mirant
Generation personnel the Mirant Texas compliance status. The Bosque Facility
appears to be in material compliance with the various conditions set forth in
the key permits and approvals and consent orders as applicable.
We note the following circumstances relative to compliance with
permits and approvals that could have an impact on future operations:
o The Bosque Facility is subject to Title IV of the Clean Air Act
(Acid Rain Provisions) whereby each unit must possess SO(2) allowances to
cover its emissions beginning in 2000. However, since the Facility is
fueled by natural gas the requirement for SO(2) allowances is not
considered significant.
STATE LINE FACILITY
Description of the State Line Facility
The State Line Facility is owned by State Line Energy, LLC ("State
Line Energy"), an indirect wholly-owned subsidiary of Mirant Generation. During
December 1997, State Line Energy acquired the State Line Facility from
Commonwealth Edison Company ("ComEd"). Revenues from the State Line Facility are
derived from the State Line Power Purchase Agreement (the "State Line PPA") with
ComEd expiring December 30, 2012.
The State Line Facility is located in the City of Hammond, Lake
County, Indiana adjacent to Lake Michigan on an approximately 73-acre site. The
State Line Facility provides base-load generation, utilizing coal for fuel and
natural gas for start-up fuel and flame stabilization. Space is available on the
site property for expansion, and
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the State Line Facility is currently considering the construction of additional
units. We have not included any of the costs or revenues associated with these
potential new units in the Projected Operating Results.
The State Line Facility is comprised of two conventional steam
turbine units with a total summer generating capacity of 515 MW as listed in
Table 21. The State Line Facility provides base-load generation and utilizes
Powder River Basin ("PRB") coal for fuel.
Table 21
Unit Characteristics
State Line Facility
Summer Full Load
In-Service Capacity Heat Rate Dispatch
Unit Fuel Date (MW) (Btu/kWh) Type
---- ---- ---- ---- --------- ----
Unit 3 PRB-Coal 1955 197 9,933 Base-load
Unit 4 PRB-Coal 1962 318 9,985 Base-load
---
Total 515
In addition, the State Line Facility has certain common facilities
shared by all units such as lake water pumping stations, fuel receiving, storage
and handling systems, water treatment systems, warehouses, maintenance shops, a
chemistry laboratory, administrative offices, and an electrical switchyard.
Operation and Maintenance
Operation of the State Line Facility
The State Line Facility units range in age from 39 to 46 years.
These units have been maintained in conformance with generally accepted industry
practices. Components and systems have been replaced as necessary to maintain
plant reliability. The technology, design practices and environmental compliance
requirements under which these units were installed are significantly different
from those existing today. This has required and will continue to require
ongoing repair and maintenance of equipment to meet current performance
standards.
From 1995 to 1998, ComEd undertook certain maintenance activities at
the State Line Facility, which included maintenance associated with conveyor
belts replacements, coal handling equipment controls systems modifications, coal
handling equipment repairs, coal feeder replacement, and partial retubing of the
State Line Unit 3 surface condenser. State Line Energy completed the remaining
portions of the deferred maintenance in February 1999 primarily through a series
of subcontracts.
On February 16, 1998, State Line Unit 3 was taken off-line due to a
failure of the low-pressure ("LP") steam turbine. On July 28, 1998, during the
outage to repair this LP turbine, but while State Line Unit 4 was operating, the
State Line Facility suffered a fire. State Line Energy utilized the down time
resulting from the fire to replace the State Line Unit 4 boiler floor, install
the State Line Unit 3 baghouse and make improvements to the fuel conveying
system. State Line Energy also implemented revised cleanliness procedures and
made modifications to the conveying system to reduce coal dust generation. State
Line Unit 4 was brought back on line on January 31, 1999. State Line Unit 3 was
returned to service February 8, 1999.
Operating Programs and Procedures
State Line Energy utilizes a preventive and predictive maintenance
policy at the State Line Facility. Part of this policy is the incorporation of a
computerized maintenance management program. State Line Energy also employs a
program of cross-training between operations personnel. This program is designed
to merge the skills of boiler, turbine, and electrical operators. Vendor
training is also included as part of the program.
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Operating History
Operating data for the past five years of operation of the State
Line Facility was provided by State Line Energy. The historical averages and
corresponding future averages are summarized in Table 22. The projected
generation, average annual heat rate, capacity factor, and equivalent
availability factor have been estimated by PA Consulting. A more detailed
summary of the historical performance results is included in Exhibit A-10 and in
the Supplement.
Table 22
Operating History
State Line Facility
Historical Projected
Average Average
(1996-2000) (2001-2020)
----------- -----------
Net Capability Rating (MW)(1) 490/515(2) 515
Net Generation (GWh) 1,875.6 2,592.3
Annual Net Heat Rate (Btu/kWh)(3)(4) 10,243 10,122
Net Capacity Factor (%)(4) 48.6 57.5
Equivalent Availability Factor (%)(4) 62.8 80.0
--------------------
(1) Summer rating.
(2) Capacity was increased through refurbishment in 2000.
(3) Annual average based on levels of full- and part-load
operation as projected by PA Consulting. Projected decrease in
annual average heat rates compared to historical heat rate
results due to an increase in hours at more efficient,
full-load operation projected by PA Consulting.
(4) Represents weighted average for annual net heat rate, net
capacity and equivalent availability factor.
Environmental Assessment
Environmental Site Assessment
As part of the acquisition of the State Line Facility, ComEd agreed
to indemnify State Line Energy and its affiliates with respect to environmental
conditions attributable to the operation of the State Line Facility prior to or
on the acquisition date, including the generation, transportation, storage and
release of contaminants, discharges and emissions, and fines or penalties
related to violations or obligations imposed by environmental law. State Line
Energy agreed to indemnify ComEd and its affiliates from the same types of
environmental matters that might arise after the closing date. The environmental
indemnifications do not have a cap or time limitation.
In 1999, we reviewed Phase I and II ESAs prepared by environmental
consultants for the State Line Facility regarding environmental issues at the
State Line Facility. Because no updated ESAs of previous or recent environmental
investigations regarding the potential for site contamination issues at the
State Line Facility site have been provided for our review, we can offer no
opinion with respect to potential site contamination issues at the State Line
Facility site, if any, or potential future remediation costs should
contamination be found. While we have not independently investigated site
conditions, State Line Energy reported that, to its knowledge, the conditions at
the State Line Facility site are materially similar to those presented in the
1999 ESAs. Refer to the Supplement for additional information on previously
conducted ESAs.
Status of Permits and Approvals
We have reviewed the key permits and approvals for the State Line
Facility. A listing of the key permits and approvals is shown in the Supplement.
The major permits and approvals required to operate the State Line Facility have
been obtained and are currently valid or are in the process of being renewed,
and we are not aware of any technical circumstances that would prevent the
renewal of the major permits or approvals.
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Regulatory Compliance
We have reviewed 1999 and 2000 excess air emissions reports, the
Wastewater Discharge Monitoring Reports for 2000 and discussed with State Line
Energy and Mirant Generation personnel the State Line Facility compliance
status. The State Line Facility appears to be in material compliance with the
various conditions set forth in the key permits and approvals.
We note the following circumstances relative to compliance with
permits and approvals that could have an impact on future operations. Additional
discussion of certain such circumstances is presented in the Supplement.
o The State Line Facility is located in an ozone non-attainment
area; therefore, NO(X) RACT would generally apply. However, the Chicago
area has received a waiver to the RACT requirements from the USEPA. This
waiver was granted because it was demonstrated that NO(X) reductions in
the Chicago area do not necessarily reduce ozone. This waiver is
considered to be potentially contingent or temporary and subject to
subsequent modeling or monitoring data, which may show attainment benefits
from NO(X) reductions.
o Title I of the Clean Air Act and subsequent regulations pursuant
to the Act including the NO(X) SIP Call will result in the establishment
of a market based program for NO(X) allowances, where units covered by the
Act must possess NO(X) allowances to cover their emissions. The State of
Indiana is currently developing a Final NO(X) Rule, which will allocate
allowances to individual units consistent with the Act beginning in 2004.
The State Line PPA with ComEd allows State Line Energy to pass throught
the cost of NO(X) allowances for the term of the agreement. It will be
necessary for State Line Energy to purchase NO(X) allowances after the
expiration of the State Line PPA. The future cost of NO(X) allowances will
be market dependent and could be lower or higher than the current values
for such allowances. The exact number of allowances to be required in the
future will depend on the utilization of the units in the future. The
forecasted number of allowances to be allocated to the units and future
price assumptions are presented in the Supplement. The allowance costs
assumed in the Projected Operating Results are presented later in this
Report.
o The State Line Facility is subject to Title IV of the Clean Air
Act (Acid Rain Provisions) whereby each unit must possess SO(2) allowances
to cover its emissions beginning in 2000. The Asset Sale Agreement with
ComEd excluded SO(2) allowances attributable to the State Line Facility
from the transferred assets. As such, ComEd retained possession of these
allowances. However, the State Line PPA with ComEd stipulates that ComEd
is to provide the allowances necessary to cover the SO(2) emissions for
the term of the agreement. It will be necessary for State Line Energy to
purchase SO(2) allowances after the expiration of the State Line PPA. The
future cost of SO(2) allowances will be market dependent and could be
lower or higher than the current values for such allowances. The exact
number of allowances to be required in the future will depend on the
utilization of the units. Specific emission rate assumptions and the
number of allowances allocated to each facility are presented in the
Supplement. The allowance costs assumed in the Projected Operating Results
are presented later in this Report.
o Title IV of the Clean Air Act also imposes specific NO(X) emission
limits that must be met (presumptive limits) by all coal units subject to
the Act. The Phase II Acid Rain Permit also requires the State Line
Facility to comply with new NO(X) limitations starting in the year 2000 in
accordance with USEPA's acid rain regulations. Specific emission rates are
presented in the Supplement.
o At this point in time, State Line Energy is awaiting the outcome
of specific environmental rule making with respect to NO(X) reductions
before committing to a specific implementation plan. The decision to
implement specific emissions control technology versus purchase of
emission allowances is being evaluated based on economics. However, for
the purpose of the Projected Operating Results, based on discussions with
State Line Energy, we have assumed an installation of an SCR at State Line
Unit 4 in 2013. Specific emission rate assumptions used in the Projected
Operating Results are given in the Supplement.
o In November 1999, the USEPA issued NOVs to owners and operators of
32 coal-fired electric generating plants, charging that over many years
these plants had been changed or modified in ways that resulted in
increased emission of pollutants and that the plants did not obtain new
source permits or prevention of significant deterioration permits
applicable to new or modified sources. None of the assets
A-34
included herein have been issued such notices of violation. While we
cannot predict future USEPA actions, should such notices of violations be
issued to any of the assets, the cost to comply could be substantial.
o There are a number of potential future regulations that, if
promulgated, could increase capital expenditures and O&M cost at the State
Line Facility. Such potential regulations include mercury control,
PM(2.5), regional haze, regional visibility, water intake structure
regulations, potential ratcheting of SO2 allowances beyond 2009 and
Subtitle D regulations pertaining to the disposal of fuel combustion
wastes. The schedule and specific regulations to be promulgated are not
presently known; therefore, the impact of such potential regulations has
not been incorporated into the Projected Operating Results.
MIRANT WISCONSIN FACILITY
Description of the Neenah Facility
The Mirant Wisconsin Facility consists of the Neenah generating
facility (the "Neenah Facility"), which is owned by Mirant Neenah, LLC ("Mirant
Neenah"), an indirect wholly-owned subsidiary of Mirant Generation. The Neenah
Facility is newly constructed and began commercial operation during 2000. Mirant
Neenah maintains an administrative office at the plant. Revenues from the Neenah
Facility are derived from a Power Purchase Agreement with Wisconsin Electric
Power Company ("Wisconsin Electric") that expires July 1, 2008.
The Neenah Facility is located just east of the city of Neenah, in
semi-urban Winnebago County, Wisconsin, on an approximately 26-acre site. Mirant
Neenah has considered converting one or both generating units from simple cycle
to combined cycle operation. We have not included any of the costs or revenues
associated with this potential conversion in the Projected Operating Results.
The Neenah Facility is comprised of two simple-cycle combustion
turbine generators with a total summer generating capacity of 309 MW as listed
in Table 23. The Neenah Facility provides peaking generation and is capable of
utilizing both natural gas and No. 2 oil for fuel.
Table 23
Unit Characteristics
Neenah Facility
Summer Full Load
In-Service Capacity Heat Rate Dispatch
Unit Fuel Date (MW) (Btu/kWh) Type
---- ---- ---- ---- --------- ----
Unit 1 Gas/No. 2 Oil 2000 154.5 10,614 Peaking
Unit 2 Gas/No. 2 Oil 2000 154.5 10,614 Peaking
-----
Total 309.0
Operation and Maintenance
Operation of the Neenah Facility
We have not visited the Neenah Facility. The operations and
maintenance programs, including operating procedures and programs; preventive,
predictive and corrective maintenance programs and procedures; planning and
scheduling requirements and procedures; and reporting and documentation
requirements have not been reviewed. The description contained herein has been
provided by Mirant Wisconsin.
Operating Programs and Procedures
Plant staffing presently consists of two operations and maintenance
personnel, who report to the Facility Manager, Midwest CT Operations of Hammond,
Indiana. The two units at the Neenah Facility are operated utilizing two
operating shifts. Each shift consists of one operator each for two shifts during
peak periods. During the off-peak season, one operator will be at the plant
working one shift only unless the plant is dispatched. Plant supervision,
technical support, and back-up support will be available from the State Line
Facility.
A-35
Mirant Neenah and General Electric Corporation ("GE") have signed a
Long Term Parts and Long Term Service Agreement which includes the Neenah
Facility. GE provides all of the maintenance requirements, including labor and
parts, for Neenah Units 1 and 2, and provides heat rate, output, and
availability guarantees. GE also schedules and performs, partially through the
Long Term Parts and Long Term Service Agreement, the annual outage maintenance
required in accordance with the combustion turbine manufacturer's
recommendations.
The Neenah Facility utilizes a Speedtronic Mark V control system to
operate and monitor the combustion turbine generators. This system displays and
monitors most of the important power plant variable parameters. Neenah Facility
operations staff monitors parameters that are indicative of degraded equipment
and systems. The Maximo maintenance management system ("Maximo") is used as the
work order system, inventory management system and preventive maintenance system
and the database is currently under development. Maximo is a purchased system
and is used widely in the power industry.
As major maintenance is dictated by the hours of operation and the
Neenah Facility is a peaking plant, there is no major maintenance scheduled in
the near future for Neenah Units 1 and 2. Major and minor maintenance schedules
are dependent on total hours of operation and the number of start cycles.
Operating History
Initial commercial operation of the Neenah Facility began on May 8,
2000; therefore, less than seven months of operating history is available for
Neenah Units 1 and 2. Normal minor outages and start-up trips have occurred on
both units during the first six months of operation, however no unusual or
significant events have occurred.
Operating data for the past several months of operation of the
Neenah Facility was provided by Mirant Neenah. The historical averages and
corresponding future averages are summarized in Table 24. The projected
generation, average annual heat rate, capacity factor, and equivalent
availability factor have been estimated by PA Consulting. A more detailed
summary of the historical performance results is included in Exhibit A-10 and in
the Supplement.
Table 24
Operating History
Neenah Facility
Historical Projected
Average Average
(2000) (2001-2020)
------ -----------
Net Capability Rating (MW)(1) 309 309
Net Generation (GWh)(2) 159.2 74.3
Annual Net Heat Rate (Btu/kWh)(3) 11,539 11,396
Net Capacity Factor (%)(3) 9.1 2.8
Equivalent Availability Factor (%)(3) 97.8 96.0
--------------------
(1) Summer rating based on performance test results, August 2000.
(2) Represents six-month total from monthly reports.
(3) Six-month average from monthly reports.
Environmental Assessment
Environmental Site Assessment
In 1999, we reviewed the Phase I ESA dated April 1999, prepared by
an environmental consultant for the Neenah Facility site. The environmental
consultant's site visit identified no evidence of stained soils, hazardous
substance storage, or hazardous waste disposal at the property. A more detailed
account of the site assessment findings is presented in the Supplement. Because
no updated ESAs of previous or recent environmental investigations regarding the
potential for site contamination issues at the Neenah Facility site have been
provided for our review, we
A-36
can offer no opinion with respect to potential site contamination issues at the
Neenah Facility site, if any, or potential future remediation costs should
contamination be found. While we have not independently investigated site
conditions, Mirant Neenah reported that the conditions at the Neenah Facility
site are materially similar to those presented in the 1999 ESAs.
Status of Permits and Approvals
We have reviewed the key permits and approvals for the Neenah
Facility. A listing of the key permits and approvals is shown in the Supplement.
The major permits and approvals required to operate the Neenah Facility have
been obtained and are currently valid or are in the process of being renewed,
and we are not aware of any technical circumstances that would prevent the
renewal of the major permits or approvals.
Regulatory Compliance
We have reviewed the 2000 Environmental Emissions Compliance Test
for the Neenah Facility and the wastewater disposal methods and discussed with
Mirant Neenah and Mirant Generation personnel the Mirant Neenah compliance
status. The Neenah Facility appears to be in material compliance with the
various conditions set forth in the key permits and approvals.
We note the following circumstances relative to compliance with
permits and approvals that could have an impact on future operations. Additional
discussion of certain such circumstances is presented in the Supplement.
o USEPA named Wisconsin as one of the states subject to the
requirement under USEPA's SIP Call to establish a market based program for
NO(X) allowances where electric generating units must possess NO(X)
allowances to cover their emissions. Subsequently, a federal appeals court
ruled that USEPA should drop Wisconsin from the SIP Call. However,
Wisconsin must still comply with the National Ambient Air Quality
Standards for ozone and in September of 2000 the state Department of
Natural Resources ("DNR") recommended adopting a plan for eight counties
in southeast Wisconsin to reduce NO(X) emissions and bring the counties
into compliance with the 1-hour ozone standard by the year 2007. Winnebago
County, where the Neenah Facility is located, is not included in the
recommended plan.
o The Neenah Facility is subject to Title IV of the Clean Air Act
(Acid Rain Provisions) whereby each unit must possess SO(2) allowances to
cover its emissions beginning in 2000. However, since the Facility is
fueled by natural gas the requirement for SO(2) allowances is not
considered significant.
PROJECTED OPERATING RESULTS
We have reviewed the historical operating information, estimates
and projections of electrical generating capacity, fuel consumption, and
capital and operating costs of the Mirant Generation Facilities made
available to us by Mirant Generation. On the basis of such data, we have
prepared the Projected Operating Results. A portion of the generation from
the Mirant Generation Facilities is to be sold under contract, which we have
reviewed and projected; however, the majority has been assumed to be sold
directly to the market at market rates, which have been estimated by PA
Consulting. Expenses for the plants consist primarily of the costs of fuel,
including transportation, as estimated by PA Consulting, and operating and
maintenance expenses, as estimated by Mirant Generation. The interest
payments on the Notes, as well as other Mirant Generation debt, have been
estimated by Representative of the Initial Purchasers. The Series A Notes
have been assumed to mature on April 15, 2006 and the Series B Notes have
been assumed to mature on April 15, 2011. Mirant Generation has assumed that
the Notes will be refinanced upon maturity; therefore, the Projected
Operating Results are presented for each calendar year beginning January 1,
2001 through December 31, 2020, a period approximately ten years beyond the
term of the Notes. Projected revenues and expenses have been set forth in the
Projected Operating Results presented in Exhibit A-1. The Projected Operating
Results have been prepared using assumptions and considerations set forth in
this Report and the footnotes to Exhibit A-1.
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Annual Operating Revenues
Revenues from Contract Electricity Sales
The following is a brief description of the revenues derived by
Mirant Generation from contract electricity sales.
Mirant California
The Mirant California Facilities operate under Reliability Must Run
("RMR") contracts with the California Independent System Operator ("California
ISO"). Under these contracts, the Mirant California Facilities receive a
capacity payment ("RMR Payment"), which has been projected by PA Consulting. The
terms of the RMR Payments are currently in dispute. PA Consulting has assumed
that the Mirant California Facilities will receive a portion of the RMR Payments
through 2008. For additional discussion regarding the RMR Payments, please refer
to PA Consulting's report and the section of the Offering Circular entitled "Our
Business - Legal Proceedings".
Mirant New England
All capacity, energy and ancillary services from Canal Unit 1, is
made available and sold to four purchasers through October 10, 2002 under power
contracts between Mirant Canal and Cambridge Electric Light Company and
Commonwealth Electric Company (jointly), Boston Edison Company, Montaup Electric
Company and Mirant New England, LLC, an affiliate of Mirant Generation. Each of
the four power contracts calls for the sale of 25 percent of the capacity and
energy from Canal Unit 1. The demand charge under the power contracts is a fixed
schedule of charges. There is an additional schedule of fixed payments for the
installation and operation of a SCR for Canal Unit 1. Canal Unit 1 is dispatched
by ISO-New England. The energy charge is a pass-through of fuel costs for Canal
Unit 1, which is borne equally by the four power purchasers. For the purposes of
the Projected Operating Results, we have assumed capacity factors and fuel
prices as estimated by PA Consulting.
Mirant Kendall sells steam to a subsidiary of NSTAR pursuant to a
Steam Supply Agreement dated October 1, 2000 (the "Kendall Steam Agreement").
The Kendall Steam Agreement contains a demand charge, consumption charge, and
condensate return charge and expires after the term of the Projected Operating
Results; however, either party may terminate the agreement with 24 months' prior
notice. The consumption charge is indexed to a specified fuel price. For the
purposes of the Projected Operating Results, we have assumed a steam demand and
consumption consistent with historical usage as reported by Mirant Kendall. For
the purpose of projecting the consumption charge under the Kendall Steam
Agreement, we have assumed that the contract fuel index will increase according
to the fuel price projection for the Kendall Facility as projected by PA
Consulting.
Mirant Texas
Mirant Texas entered into two Tolling Agreements with MAEM dated
October 8, 1999 and June 27, 2000 (collectively, the "Bosque PPA") for the
purchase of the output of Bosque Units 1 and 2 and Bosque Unit 3, respectively.
The Bosque PPA terminates with respect to Bosque Units 1 and 2 on June 1, 2005
and with respect to Bosque Unit 3 on December 31, 2003. We have assumed that
MAEM will take all the power available from Bosque Units 1, 2 and 3 during the
respective terms of the Bosque PPA.
The Bosque PPA provides for a series of payments to be provided by
MAEM to Mirant Texas in exchange for a pre-determined amount of power (at a
selected heat rate) and the fuel necessary to provide that output. These
payments include a capacity payment, an O&M charge, and a run charge for Bosque
Units 1 and 2 and a capacity and O&M payment for Bosque Unit 3. The capacity
payments are adjusted to reflect the difference between actual performance and a
guaranteed capacity, a guaranteed heat rate, and a guaranteed annual average
equivalent availability. There are deadbands associated with the guaranteed
output and heat rate. The annual capacity charges received by Mirant Texas are
adjusted up or down for actual output and heat rate above the deadbands. The
guaranteed equivalent availability is adjusted depending on the hours of
operation in a year. The annual capacity charge received by Mirant Texas is
adjusted based upon the difference between the annual equivalent availability
and the guaranteed equivalent availability.
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MAEM will provide at no cost to the Mirant Texas all fuel required
by the facility, including all fuel required for normal startup and testing, and
will pay all associated transportation cost to the fuel delivery points. MAEM
will pay Mirant Texas an annual O&M charge for Bosque Units 1 and 2 based on a
predetermined schedule and the ratio of the cumulative hours of operation and
cumulative number of times each unit is started. The O&M charge for Bosque Unit
3 is fixed through December 31, 2003. For the purposes of the Projected
Operating Results, we have assumed that the number of starts will be as
estimated by PA Consulting.
MAEM will also pay Mirant Texas a run charge, which is based upon
the total number of hours that each unit has operated since commercial
operation, regardless if the unit was synchronized and producing electricity,
but excluding hours operated during optional capacity or heat rate tests.
For the Projected Operating Results, we have assumed that: (1) the
demonstrated capacity will be greater than the guaranteed capacity by
approximately 55 MW; (2) the projected annual average heat rates will be as
estimated by PA Consulting; (3) an equivalent availability of 98 percent during
June through September and 95 percent for the remainder of the year for Bosque
Units 1 and 2 and an equivalent availability of 97 percent during June through
September and 94 percent for the remainder of the year for Bosque Unit 3; and
(4) the hours for which the run charge is applicable will be equal to the
dispatched hours as projected by PA Consulting.
State Line Energy
The State Line PPA was entered into on April 17, 1996, and sets
forth the terms and conditions under which ComEd schedules the operation of and
purchases electricity from the State Line Facility for a term of 15 years ending
December 30, 2012. The State Line PPA allows ComEd the sole and exclusive right
to dispatch the delivery of electric energy from the State Line Facility at a
rate up to the State Line Facility's net dependable capacity of 515 MW. In the
event excess capacity would exist from time to time, ComEd has the first right
of refusal for the purchase of the energy generated from such excess capacity.
The State Line PPA was amended in February 2000 and again in September 2000, to
increase the State Line Facility's net dependable capacity available for
dispatch by ComEd from the original amount of not less than 490 MW to not less
than 515 MW through the term of the State Line PPA.
Under the State Line PPA, State Line Energy receives revenues from
the sale of capacity and energy to ComEd, consisting of a capacity charge, a
non-fuel energy charge and various miscellaneous charges. Components of the
capacity charge and energy charge are escalated annually by an O&M adjustment
factor. The capacity charge is further adjusted by a seasonal availability
adjustment factor intended to measure performance of the State Line Facility
relative to targeted equivalent availability factors. The specified equivalent
availability factor is set by the State Line PPA after the first two Contract
Years at 90 percent for summer months and 75 percent for non-summer months
through the term of the State Line PPA.
ComEd supplies all coal necessary for the operation of the State
Line Facility during the term of the State Line PPA. In addition, ComEd is
responsible for the transfer of sufficient SO(2) allowances from its system
necessary for the emission of SO(2) from the State Line Facility resulting from
the consumption of coal supplied by ComEd during the term of the State Line PPA.
ComEd is not obligated to provide SO(2) allowances to the State Line Facility
beyond the term of the State Line PPA. In the event additional NO(X) emissions
requirements are imposed on the State Line Facility, State Line Energy shall be
entitled to a monthly NO(X) compliance cost payment during the term of the State
Line PPA intended to reimburse State Line Energy for the capital and/or
incremental operational cost increases incurred by State Line Energy. If State
Line Energy is required to install capital equipment to comply with NO(X)
regulations, under the terms of the State Line PPA, ComEd will be required to
pay State Line Energy a monthly payment based on the amortization of the capital
costs. Such additional monthly payment would be payable during the term of the
State Line PPA, which expires on December 30, 2012, but the amortization of the
capital costs would be calculated from the in-service date of the capital
addition until December 30, 2022.
For the Projected Operating Results, we have assumed that: (1) the
net dependable capacity will be equal to 515 MW; and (2) equivalent availability
factors will be equal to the specified equivalent availability factors set forth
in the State Line PPA.
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Mirant Neenah
The Neenah Facility sells power to Wisconsin Electric under a Power
Purchase Agreement between Mirant Neenah and Wisconsin Electric dated August 28,
1998 (the "Neenah PPA"). The Neenah PPA provides for provisions of fuel and the
purchase of the output from the first and second units of the Neenah Facility.
The term of the Neenah PPA ends on July 1, 2008.
The Neenah PPA provides for a series of payments to be provided by
Wisconsin Electric to Mirant Neenah in exchange for a pre-determined amount of
power (at a selected heat rate) and the fuel necessary to provide that output.
These payments include a start charge and a running charge. The capacity payment
is adjusted to reflect the difference between actual performance and a
guaranteed capacity, a guaranteed heat rate, and a guaranteed annual average
equivalent availability. There are deadbands associated with the guaranteed
output and heat rate. The annual capacity charge received by Mirant Neenah is
adjusted up or down for actual output and heat rate above the deadbands. The
guaranteed equivalent availability is adjusted depending on the hours of
operation in a year. The annual capacity charge received by Mirant Neenah is
adjusted based upon the difference between the annual equivalent availability
and the guaranteed equivalent availability.
Wisconsin Electric provides the fuel required by the Neenah Facility
to meet the obligations of the Neenah PPA at no cost to Mirant Neenah, and will
pay all associated transportation costs to the Neenah Facility.
In addition to the capacity payment, Wisconsin Electric pays a
start-up charge and a running charge. The start-up charge is dependent upon the
cumulative number of successful normal start-ups and is limited to one
successful start during any dispatch period. The running charge is assessed on
each combustion turbine and is dependent on the fuel type utilized for each
hour. Both the start-up charge and running charge are adjusted annually for
inflation. For the purposes of the Projected Operating Results, we have assumed
that the number of starts will be as estimated by PA Consulting.
For the Projected Operating Results, we have assumed that: (1) the
demonstrated capacity will be equal to the guaranteed capacity; (2) the annual
average heat rates will be estimated by PA Consulting; (3) an equivalent
availability of 96.0 percent per year; and (4) the number of starts and hours
for which the running charge is applicable will be determined by PA Consulting.
Revenues from Market Electricity Sales
All non-contract energy generated by the Mirant Generation
Facilities has been assumed to be sold to the market at market electricity
rates. Market electricity rates were estimated by PA Consulting in 2000 dollars
for each of the Mirant Generation Facilities and have been adjusted for
inflation. For the purposes of the Projected Operating Results, the general
inflation rate has been assumed to be 2.6 percent per year based on a March 10,
2001 projection prepared by Blue Chip Economic Indicators.
Annual Operating Expenses
Fuel Costs
All of the Mirant Generation Facilities purchase fuel on a
short-term basis at rates which are at or near market rates. PA Consulting has
projected long-term fuel prices. For the purposes of the Projected Operating
Results, we have assumed fuel prices equal to the projections prepared by PA
Consulting in 2000 dollars and adjusted for inflation.
Operating and Maintenance Costs
For the purposes of developing the Projected Operating Results,
operating and maintenance expenses for the Mirant Generation Facilities have
been estimated by Mirant Generation. These estimates include annual costs for
payroll, materials and supplies, outside services, including contractors, and
variable operating and maintenance expenses. Mirant Generation's estimate of
operating and maintenance expenses for the coal plants include the costs of ash
disposal, net of ash sold. Mirant Generation has projected that the cost of
operating and maintaining the Lovett,
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Kendall, Canal and Potrero Facilities will decrease over the next few years as
efficiencies are implemented. All operation and maintenance expenses have been
provided in 2001 dollars and have been assumed to escalate at the general rate
of inflation.
Although we have not reviewed each individual expense constituting
Mirant Generation's estimate of operating and maintenance expenses and capital
expenditures and the methodology used to develop the estimates, we have reviewed
the combined projection of operating and maintenance expenses and capital
expenditures in comparison to the costs of similar plants with which we are
familiar. Based on our review, we are of the opinion that Mirant Generation's
estimates of the costs of operating and maintaining the Mirant Generation
Facilities, including provision for capital expenditures and major maintenance,
are within the range of the costs of similar plants with which we are familiar.
Emissions Allowances
Mirant Generation has acquired or has been allocated the SO(2) and
NO(X) allowances associated with the Mirant Generation Facilities. We have
included the cost of allowances as an additional operating expense for the
Mirant Generation Facilities. In the event that excess allowances are available
for sale, we have assumed that Mirant Generation would sell the allowances at
market prices. The deficit or excess of allowances has been estimated based on
the assumed emission rates as estimated by Mirant Generation, the capacity
factors projected by PA Consulting, and the allocated SO(2) and NO(X)
allowances. The market SO(2) allowance price has been assumed to be $150 per ton
in 2001 dollars and has been assumed to increase thereafter at the rate of
inflation. Market NO(X) allowance prices have been assumed to be $1,000 per ton
through 2002, $2,300 in 2003, $2,000 in 2004 and $1,700 in 2005 and assumed to
increase thereafter at the rate of inflation.
It should be noted that PA Consulting has assumed SO(2) and NO(X)
allowance prices that are significantly higher than those assumed in the
Projected Operating Results. In the event that the actual allowance prices are
as assumed by PA Consulting, the projected minimum and average interest coverage
ratios over the term of the Notes would decrease by approximately 0.07 and 0.05,
respectively.
General and Administrative and Other Expenses
Mirant Generation has estimated certain general and administrative
costs which have been included in the Projected Operating Results. These costs
include, among other things, support services such as power marketing, computer
systems and services, human resources, and accounting. These expenses have been
assumed to increase at the general rate of inflation.
In addition, Mirant Generation has estimated other expenses, which
have also been included in the Projected Operating Results. Property taxes have
been estimated by Mirant Generation for 2001 and have been assumed to escalate
at the rate of inflation, with the exception of the Mirant New York Facilities,
for which the property taxes have been assumed to remain flat based on Mirant
Generation's expectation of its current negotiations with the local authorities.
Mirant Generation's property tax estimates for the Chalk Point, Dickerson, and
Morgantown Facilities reflect exemptions beginning in 2001 for machinery used to
generate electricity.
Capital Expenditures
For the purposes of the Projected Operating Results, Mirant
Generation has estimated the costs of capital improvements to the Mirant
Generation Facilities. These capital expenditures include the cost of certain
environmental control equipment assumed by Mirant Generation to be added at
certain of the Mirant Generation Facilities; however, Mirant Generation and its
affiliates regularly reevaluates cost-effective alternatives to achieve
compliance with future environmental regulations. These improvements include the
installation of: (1) low-NO(X) burners at Chalk Point Units 1 and 2 in 2002; (2)
SCRs at Chalk Point Units 1 and 2 in 2006 and 2008, respectively; (3) SOFA
systems at Dickerson Units 1, 2 and 3 in 2002, 2003, and 2003, respectively; (4)
SCRs/SNCRs at Morgantown Units 1 and 2 in 2006 and 2008, respectively; (5)
low-NO(X) burners and SOFA systems at Potomac River Units 3, 4 and 5 in 2007,
2007, and 2008, respectively; (6) an SCR at State Line Unit 4 in 2013; (7)
Gunderbooms at the Lovett Facility in 2003; (8) Gunderbooms at the Contra Costa
and Pittsburg Facilities in 2003; (9) SCRs at
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Pittsburg Units 1, 2, 3 and 4 in 2003; (10) low-NO(X) burners and an SCR at
Pittsburg Unit 5 in 2001 and 2002, respectively; (11) SCRs at Pittsburg Unit 6
and 7 in 2002 and 2003, respectively; (12) an SCR at Potrero Unit 3 in 2004;
(13) low-NO(X) burners and an SCR at Contra Costa Unit 6 in 2001 and 2003,
respectively; and (14) an SCR at Contra Costa Unit 7 in 2001.
Annual Interest
We have included interest on all Mirant Generation debt. In
addition to the Notes, Mirant Generation has previously incurred additional
debt, a portion of which is assumed to be refinanced with additional debt by
the end of 2001 and a portion of which is assumed to be refinanced with
additional debt by the end of 2003. We have included interest payments on the
principal amount of the Notes and the other Mirant Generation debt at
interest rates estimated by Representative of the Initial Purchsers resulting
in a weighted average interest rate ranging over the term of the Notes from
approximately 7.1 to 8.2 percent per year. The scheduled amortization of the
Series A and Series B Notes is assumed to consist of single payments due on
April 15, 2006 and April 15, 2011, respectively. Mirant Generation has
assumed that the Notes will be refinanced upon maturity at the same principal
amount and interest rate. No additional costs of issuance have been included.
We have also included interest on a revolving credit facility to be used to
fund certain of the capital expenditures. Mirant Generation has identified
certain capital expenditures to be funded through the revolving credit
facility for the Base Case Projected Operating Results and the sensitivities.
Interest on the revolving credit facility has been estimated by
Representative of the Initial Purchsers. No principal amortization of any of
the Mirant Generation debt has been assumed.
Interest Coverage
Interest coverage has been calculated as the cash available for debt
service divided by interest on all Mirant Generation debt. On the basis of our
studies and analyses of the Mirant Generation Facilities and the assumptions set
forth in this Report, we are of the opinion that, for the Base Case Projected
Operating Results, the projected revenues from the sale of electricity are
adequate to pay annual operating and maintenance expenses (including capital
expenditures and major maintenance), fuel expense, and other operating expenses.
Such revenues provide an annual interest coverage on the Notes of at least 2.70
times the annual interest requirement in each year during the term of the Notes
and a weighted average coverage of 3.21 times the annual interest requirement
over the term of the Notes. There is insufficient cash available after the
payment of interest in 2006 and 2011 to repay the entire principal due on the
Notes. Mirant Generation has assumed that the Notes will be refinanced upon
maturity. The weighted average interest coverage has been calculated as the
total net operating revenues less capital expenditures over the term of the
Notes divided by the total interest payments over the term of the Notes. Annual
interest coverages through December 31, 2020 are presented in Exhibit A-1.
Sensitivity Analyses
Due to the uncertainties necessarily inherent in relying on
assumptions and projections, it should be anticipated that certain circumstances
and events may differ from those assumed and described herein and that such will
affect the results of our Base Case Projected Operating Results for the Mirant
Generation Facilities. In order to demonstrate the impact of certain
circumstances on the Base Case Projected Operating Results, certain sensitivity
analyses have been developed. It should be noted that other examples could have
been considered and those presented are not intended to reflect the full extent
of possible impacts on the Mirant Generation Facilities. The sensitivities are
not presented in any particular order with regard to the likelihood of any case
actually occurring. In addition, no assurance can be given that all relevant
sensitivities have been presented, that the level of each sensitivity is the
appropriate level for testing purposes, or that only one (rather than a
combination of more than one) of such variations or sensitivities could impact
the Mirant Generation Facilities in the future.
These sensitivity analyses present the Projected Operating Results
assuming, respectively, that: (a) the market electricity prices, energy sales,
and fuel prices are equal to the "Low Fuel Price" scenario prepared by PA
Consulting; (b) the market electricity prices, energy sales, and fuel prices are
equal to the "High Fuel Price" scenario prepared by PA Consulting; (c) the
market electricity prices, energy sales, and fuel prices are equal to the
"Capacity Overbuild" case prepared by PA Consulting; (d) the market electricity
prices, energy sales, and fuel prices are equal to the "High Hydro" case
prepared by PA Consulting; (e) the market electricity prices are reduced, with
A-42
corresponding decreases in fuel prices as projected by PA Consulting, such that
the interest coverage on Mirant Generation debt is equal to 1.00 in all years;
(f) the availability of the Mirant Generation Facilities is reduced by 5
percentage points; (g) the heat rates of the Mirant Generation Facilities are 5
percent higher than that assumed in the Base Case; and (h) the non-fuel related
operating expenses of the Mirant Generation Facilities are 10 percent higher
than that assumed in the Base Case. The sensitivity analyses are presented as
Exhibits A-2 through A-9 to this Report.
For the purposes of (a), (b), (c) and (d), PA Consulting has
prepared additional projections of dispatch and market electricity prices. The
assumptions used in the various market price scenarios are discussed in detail
in the PA Consulting report attached as Annex B to the Offering Circular. In
addition, for the purposes of (e), PA Consulting has estimated the reduction in
fuel prices for each unit based upon the reduction in the market electricity
price. Based on discussions with PA Consulting, market electricity prices,
energy sales, and fuel prices have been assumed to be the same as the Base Case
for the purposes of (f), (g), and (h).
It should be noted that case (e), the breakeven market price case,
has been prepared assuming corresponding decreases in fuel prices as projected
by PA Consulting. This case results in a weighted average decrease in market
electricity prices of approximately 26 percent to reduce interest coverage on
Mirant Generation debt of 1.00 in each year during the term of the Notes. We
have not included this fuel correlation in similar breakeven analyses in
previous reports. We have included this case at Mirant Generation's request and
have not determined whether the assumed level of correlation between the market
electricity prices and fuel costs is reasonable. We have performed an additional
breakeven analysis assuming no fuel correlation, which has resulted a weighted
average decrease in market electricity prices of approximately 20 percent to
reduce interest coverage on Mirant Generation debt of 1.00 in each year during
the term of the Notes.
Summary Comparison of Projected Operating Results
A summary of the interest coverages for the Base Case Projected
Operating Results and each sensitivity case is presented in Table 25.
Table 25
Projected Interest Coverage (1)
Base Sensitivity Cases
Case
A B C D E F G H
- - - - - - - -
Low Fuel High Fuel Capacity High Breakeven
Year Market Market Overbuild Hydro Market Prices Increased
Ending Price Price Market Price Market Price with Fuel Reduced Increased Operating
Dec 31, Scenario Scenario Scenario Scenario Correlation(2) Availability Heat Rate Expenses
------- -------- -------- -------- -------- -------------- ------------ --------- --------
2001 5.74 5.23 5.72 5.70 4.08 1.00 5.31 5.23 5.40
2002 3.73 3.52 3.98 3.70 2.76 1.00 3.43 3.37 3.46
2003 3.09 2.86 3.44 3.07 2.09 1.00 2.81 2.75 2.80
2004 2.71 2.53 3.00 2.23 2.37 1.00 2.47 2.44 2.50
2005 2.70 2.63 3.01 2.01 2.70 1.00 2.46 2.48 2.51
2010 3.35 2.96 4.59 2.67 3.35 1.00 3.05 3.11 3.10
Minimum(3) 2.70 2.53 3.00 2.01 2.09 1.00 2.46 2.44 2.47
Average(4) 3.21 2.97 3.78 2.74 2.86 1.00 2.93 2.93 2.96
- --------------------
(1) Interest coverages beyond 2005 assume the refinancing of the Notes at the
same interest rates, as estimated by Representative of the Initial
Purchasers.
(2) Represents coverage on the interest payments on the Notes assuming the
market electricity price is reduced, with corresponding decreases in fuel
prices as estimated by PA Consulting, such that the total operating
revenue results in an interest coverage of 1.00 in all years.
(3) Represents minimum interest coverage during any year over the term of the
Notes assuming no principal repayment.
(4) Represents the weighted average interest coverage over the term of the
Notes assuming no principal repayment.
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In addition to these sensitivity cases, Mirant Generation has
requested that we calculate the interest coverages removing any contribution
from: (1) Mirant Mid-Atlantic and (2) Mirant California. In the case where
Mirant Mid-Atlantic makes no contribution to Mirant Generation, the projected
minimum and average interest coverage ratios over the term of the Notes would
decrease to 1.02 and 1.50, respectively. In the case where Mirant California
makes no contribution to Mirant Generation, the projected minimum and average
interest coverage ratios over the term of the Notes would decrease to 2.08 and
2.43, respectively.
PRINCIPAL CONSIDERATIONS AND ASSUMPTIONS
USED IN THE PROJECTION OF OPERATING RESULTS
In the preparation of this Report and the opinions that follow, we
have made certain assumptions with respect to conditions which may exist or
events which may occur in the future. While we believe these assumptions to be
reasonable for the purpose of this Report, they are dependent upon future
events, and actual conditions may differ from those assumed. In addition, we
have used and relied upon certain information provided to us by sources which we
believe to be reliable. While we believe the use of such information and
assumptions to be reasonable for the purposes of our Report, we offer no other
assurances thereto and some assumptions may vary significantly due to
unanticipated events and circumstances. To the extent that actual future
conditions differ from those assumed herein or provided to us by others, the
actual results will vary from those projected herein. This Report summarizes our
work up to the date of the Report. Thus, changed conditions occurring or
becoming known after such date could affect the material presented to the extent
of such changes.
The principal considerations and assumptions made by us in
developing the Base Case Projected Operating Results and the principal
information provided to us by others include the following:
1. As Independent Engineer, we have made no determination as to the
validity and enforceability of any contract, agreement, rule, or
regulation applicable to the Mirant Generation Facilities and its
operations. However, for purposes of this Report, we have assumed that all
such contracts, agreements, rules, and regulations will be fully
enforceable in accordance with their terms and that all parties will
comply with the provisions of their respective agreements.
2. Our review of the design of the Mirant Generation Facilities was
based on information provided by Mirant Generation and its affiliates and
subsidiaries.
3. Mirant Generation and its affiliates and subsidiaries will
maintain the Mirant Generation Facilities in accordance with good
engineering practice, will perform all required major maintenance in a
timely manner, and will not operate the equipment to cause it to exceed
the equipment manufacturers' recommended maximum ratings.
4. Mirant Generation and its affiliates and subsidiaries will employ
or contract for qualified and competent operations, maintenance and
general management personnel and will provide such personnel to Mirant
Generation, which will generally operate the Mirant Generation Facilities
in a sound and businesslike manner.
5. Inspections, overhauls, repairs and modifications are planned for
and conducted in accordance with manufacturers' recommendations, and with
special regard for the need to monitor certain operating parameters to
identify early signs of potential problems.
6. All licenses, permits and approvals, and permit modifications
necessary to operate the Mirant Generation Facilities have been, or will
be, obtained on a timely basis and any changes in required licenses, or
permits and approvals will not require reduced operation of, or increased
costs to, the Mirant Generation Facilities.
7. The CPI-U, general inflation, and all related indices will
increase at a rate of 2.6 percent per year based on a March 10, 2001
projection prepared by Blue Chip Economic Indicators.
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8. Mirant Generation and its affiliates and subsidiaries will
operate the Mirant Generation Facilities at the load levels projected by
PA Consulting, resulting in the annual average heat rates assumed in the
Projected Operating Results. The quantities of market electricity sales,
number of starts, market prices of electricity, and the cost of fuel for
the Mirant Generation Facilities will be as projected by PA Consulting,
including the receipt of RMR Payments for the Mirant California Facilities
through 2008.
9. All revenue from the Mirant Generation Facilities beginning
January 1, 2001 will be available to pay interest on the Notes.
10. For the purposes of estimating operating expenses, the price of
SO(2) allowances will be $150 per ton in 2001 dollars and will increase
thereafter at the rate of inflation. The price of NO(X) emissions
allowances will be $1,000 per ton through 2002, $2,300 per ton in 2003,
$2,000 per ton in 2004, and $1,700 per ton in 2005 and will increase
thereafter at the rate of inflation.
11. The non-fuel operating and maintenance expenses, including the
cost of major maintenance, will be consistent with the projection provided
by Mirant Generation in 2000 dollars, and will increase at the assumed
change in the general inflation rate, except for property taxes, which
have been assumed to remain constant, and the lease payments for the
Mirant Mid-Atlantic Facilities.
12. The capital improvements to the Mirant Generation Facilities
assumed in the Projected Operating Results will be implemented at the
estimated costs and in the time frames proposed by Mirant Generation.
Certain of the capital expenditures, as identified by Mirant Generation,
will be funded through a revolving credit facility.
13. The interest rates on Mirant Generation debt, including the
Notes, will be as estimated by Representative of the Initial Purchasers,
resulting in a weighted average interest rate ranging over the term of
the Notes from approximately 7.1 to 8.2 percent per year.
14. The Series A and Series B Notes will be refinanced upon maturity
in 2006 and 2011, respectively, as assumed by Mirant Generation, at the
same interest rates as the Notes, as estimated by Representative of the
Initial Purchasers.
CONCLUSIONS
Set forth below are the principal opinions we have reached after our
review of the Mirant Generation Facilities. For a complete understanding of the
estimates, assumptions, and calculations upon which these opinions are based,
the Report and the Supplement should be read in their entirety. On the basis of
our review and analyses of the Mirant Generation Facilities and the assumptions
set forth in this Report, we are of the opinion that:
1. The sites for the Mirant Generation Facilities are suitable for
the Mirant Generation Facilities' continued operation.
2. The Mirant Generation Facilities have been operated and
maintained in accordance with generally accepted industry practices, and
the technologies in use at the Mirant Generation Facilities are sound,
proven conventional methods of electric generation. If operated and
maintained as proposed by Mirant Generation and the project companies, the
Mirant Generation Facilities should be capable of meeting the requirements
of the respective power purchase agreements and currently applicable
environmental permit requirements. Furthermore, all off-site requirements
of the Mirant Generation Facilities have been adequately provided for,
including fuel supply, water supply, ash and wastewater disposal, and
electrical interconnection.
3. The Mirant Generation Facilities should be capable of achieving
the projected annual average net capacities, annual equivalent
availability factors, net generation, and net heat rates assumed in the
Projected Operating Results.
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4. Provided that: (1) the units are operated and maintained by
Mirant Generation in accordance with the policies and procedures as
presented by Mirant Generation; (2) all required renewals and replacements
are made on a timely basis as the units age; and (3) fuels burned by the
units are within the expected ranges with respect to quantity and quality,
the Mirant Generation Facilities should have useful lives of at least 20
years.
5. Through either the experience of the existing personnel or other
Mirant operating subsidiaries, Mirant Generation has demonstrated the
capability to operate the Mirant Generation Facilities. With the exception
of the Neenah and Bosque Facilities, for which operating procedures have
not been reviewed, the operating programs and procedures which are
currently in place for the Mirant Generation Facilities are consistent
with generally accepted practices in the industry, and Mirant Generation
has incorporated organizational structures that are comparable to other
facilities using similar technologies.
6. The ESAs and updated report for the sites of the Mirant
Mid-Atlantic Facilities were conducted in a manner consistent with
industry standards, using comparable industry protocols for similar
studies with which we are familiar. With respect to the other Mirant
Generation Facilities, because no updated ESAs of previous or recent
environmental investigations regarding the potential for site
contamination issues at the other sites have been provided for our review,
we can offer no opinion with respect to potential site contamination
issues at the sites of the other Mirant Generation Facilities, if any, or
potential future remediation costs should contamination be found.
7. The major permits and approvals required to operate the Mirant
Generation Facilities have been obtained and are currently valid or are in
the process of being renewed, and we are not aware of any technical
circumstances that would prevent the renewal of the major permits or
approvals.
8. The Mirant Generation Facilities appear to be in material
compliance with the various conditions set forth in the key permits and
approvals and consent orders as applicable.
9. Mirant Generation's estimates of the costs of operating and
maintaining the Mirant Generation Facilities, including provision for
capital expenditures and major maintenance, are within the range of the
costs of similar plants with which we are familiar.
10. For the Base Case Projected Operating Results, the projected
revenues from the sale of electricity are adequate to pay annual operating
and maintenance expenses (including capital expenditures and major
maintenance), fuel expense, and other operating expenses. Such revenues
provide an annual interest coverage on the Notes of at least 2.70 times
the annual interest requirement in each year during the term of the Notes
and a weighted average coverage of 3.21 times the annual interest
requirement over the term of the Notes. There is insufficient cash
available after the payment of interest in 2006 and 2011 to repay the
entire principal due on the Notes. Mirant Generation has assumed that the
Notes will be refinanced upon maturity.
Respectfully submitted,
R. W. BECK, INC.
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A-47
Exhibit A-1
Mirant Americas Generation, Inc. Facilities
Projected Operating Results
Base Case
Year Ending December 31, 2001(1) 2002 2003 2004 2005
- ------------------------ ------- ---- ---- ---- ----
CONSOLIDATED
PERFORMANCE
Annual Average Capacity (MW)(2) 12,587 12,587 12,587 12,587 12,587
Average Capacity Factor (%)(3) 49.4% 45.7% 43.6% 39.3% 37.8%
Contract Energy Sales (GWh)(4) 6,339 6,598 4,662 3,140 2,746
Market Energy Sales (GWh)(4) 48,143 43,741 43,397 40,161 38,891
---------- ---------- ---------- ---------- ----------
Total Energy Sales (GWh) 54,482 50,338 48,059 43,301 41,636
Total Steam Sales (MMBtu)(5) 962 962 962 962 962
Fuel Consumption (BBtu) 537,369 493,659 469,255 422,673 405,964
Average Net Heat Rate (Btu/kWh)(6) 9,863 9,807 9,764 9,761 9,750
SO(2) Allowances Purchased (Tons)(7) 71,055 61,286 53,549 31,946 31,076
NO(X) Allowances Purchased (Tons)(8) 6,167 (381) 5,119 3,657 2,952
COMMODITY PRICES
General Inflation (%)(9) 2.60 2.60 2.60 2.60 2.60
Contract Electricity Price ($/MWh)(10) $ 43.43 35.89 29.72 34.80 29.11
Market Electricity Price ($/MWh)(11) $ 69.21 60.44 57.22 53.05 51.18
Steam Price ($/MMBtu)(12) $ 12.98 12.09 12.09 10.71 9.57
Fuel Price ($/MMBtu)(13) $ 3.37 2.90 2.71 2.59 2.30
SO(2) Allowances ($/Ton)(14) $ 150 154 158 162 166
NO(X) Allowances ($/Ton)(15) $ 1,000 1,000 2,300 2,000 1,700
OPERATING REVENUES ($000)
Contract Electricity Revenues
Mirant California (16) $ 28,168 27,605 29,677 19,285 2,249
Mirant New England $ 149,243 101,246 0 0 0
Mirant Texas $ 33,704 42,494 42,818 23,011 9,576
State Line $ 49,830 50,958 51,452 52,126 52,661
Mirant Wisconsin $ 14,322 14,475 14,615 14,849 15,436
Market Electricity Revenues
Mirant Mid-Atlantic $1,452,190 1,276,686 1,131,958 1,055,042 1,027,571
Mirant California $1,262,390 825,938 823,245 574,597 474,707
Mirant New York $ 475,676 398,285 338,171 294,482 274,288
Mirant New England $ 141,770 142,545 189,584 143,484 141,404
Mirant Texas $ 0 0 0 62,760 72,150
State Line $ 0 0 0 0 0
Mirant Wisconsin $ 130 89 113 147 247
Steam Revenues $ 12,480 11,626 11,627 10,303 9,207
---------- ---------- ---------- ---------- ----------
Total Operating Revenues $3,619,903 2,891,947 2,633,260 2,250,086 2,079,496
OPERATING EXPENSES ($000)(17)
Fuel
Mirant Mid-Atlantic $ 535,696 485,365 429,800 426,205 403,409
Mirant California $ 779,179 532,135 518,688 368,601 247,277
Mirant New York $ 279,079 237,979 184,925 169,727 153,913
Mirant New England $ 218,336 178,169 138,270 87,957 80,750
Mirant Texas $ 0 0 0 43,077 47,515
State Line $ 0 0 0 0 0
Mirant Wisconsin $ 44 29 32 45 76
Emissions Allowances $ 16,815 9,046 20,204 12,451 10,126
Operations & Maintenance $ 225,882 218,377 216,877 215,287 219,748
Major Maintenance $ 17,120 17,923 17,554 15,920 16,057
Insurance $ 15,964 16,448 16,872 17,308 17,763
Property and Gross Receipts Taxes (18) $ 83,326 85,201 86,634 88,114 89,639
Facility Administration and General $ 6,075 6,298 6,457 6,622 6,795
Corporate Administration and General $ 45,274 46,455 47,661 48,897 50,173
Other (19) $ 227,567 201,578 182,657 153,630 149,068
---------- ---------- ---------- ---------- ----------
Total Operating Expenses $2,450,357 2,035,003 1,866,630 1,653,841 1,492,309
NET OPERATING REVENUES ($000) $1,169,546 856,945 766,630 596,245 587,187
CAPITAL EXPENDITURES (20) $ 163,865 111,679 149,305 85,426 85,583
FUNDS FROM CAP EX FACILITY (21) $ 0 0 0 58,131 85,578
CASH AVAILABLE FOR DEBT SERVICE $1,005,681 745,265 617,325 568,950 587,182
ANNUAL INTEREST ($000)(22) $ 175,350 200,010 200,010 209,767 217,142
ANNUAL INTEREST COVERAGE (23) 5.74 3.73 3.09 2.71 2.70
2001-10 AVG INTEREST COVERAGE (24) 3.21
EBITDA ADJUSTMENTS TO
NET OPERATING REVENUE:
Plus: Cash-to-Book Lease Adjustment $ 99,554 73,957 54,209 24,989 19,494
EBITDA (25) $1,269,100 930,902 820,839 621,234 606,681
INTEREST W/O CAP EX FACILITY (26) $ 175,350 200,010 200,010 204,758 204,758
EBITDA/INTEREST COVERAGE (27) 7.24 4.65 4.10 3.03 2.96
2001-10 AVG EBITDA/INT COVERAGE (28) 4.02
Year Ending December 31, 2006 2007 2008 2009 2010
- ------------------------ ---- ---- ---- ---- ----
CONSOLIDATED
PERFORMANCE
Annual Average Capacity (MW)(2) 12,587 12,587 12,587 12,587 12,587
Average Capacity Factor (%)(3) 37.9% 37.7% 36.8% 36.6% 36.7%
Contract Energy Sales (GWh)(4) 2,521 2,558 2,403 2,451 2,544
Market Energy Sales (GWh)(4) 39,252 38,995 38,162 37,956 37,958
---------- ---------- ---------- ---------- ----------
Total Energy Sales (GWh) 41,773 41,553 40,565 40,408 40,503
Total Steam Sales (MMBtu)(5) 962 962 962 962 962
Fuel Consumption (BBtu) 406,865 405,345 395,141 393,919 394,949
Average Net Heat Rate (Btu/kWh)(6) 9,740 9,755 9,741 9,749 9,751
SO(2) Allowances Purchased (Tons)(7) 37,679 36,766 37,363 39,341 50,048
NO(X) Allowances Purchased (Tons)(8) 907 292 (2,099) (1,971) (1,831)
COMMODITY PRICES
General Inflation (%)(9) 2.60 2.60 2.60 2.60 2.60
Contract Electricity Price ($/MWh)(10) 28.45 28.78 26.55 22.78 22.31
Market Electricity Price ($/MWh)(11) 53.57 56.39 58.03 60.99 63.52
Steam Price ($/MMBtu)(12) 9.86 10.07 10.36 10.60 10.86
Fuel Price ($/MMBtu)(13) 2.36 2.42 2.47 2.54 2.60
SO(2) Allowances ($/Ton)(14) 171 175 180 184 189
NO(X) Allowances ($/Ton)(15) 1,744 1,790 1,836 1,884 1,933
OPERATING REVENUES ($000)
Contract Electricity Revenues
Mirant California (16) 311 258 258 0 0
Mirant New England 0 0 0 0 0
Mirant Texas 0 0 0 0 0
State Line 53,434 54,211 54,963 55,845 56,763
Mirant Wisconsin 17,981 19,154 8,571 0 0
Market Electricity Revenues
Mirant Mid-Atlantic 1,127,472 1,158,541 1,157,979 1,191,457 1,241,658
Mirant California 475,614 533,345 522,118 511,096 534,746
Mirant New York 256,322 261,817 263,972 281,361 310,737
Mirant New England 147,205 147,526 154,829 201,869 196,963
Mirant Texas 95,796 97,225 98,503 98,351 98,979
State Line 0 0 0 0 0
Mirant Wisconsin 260 354 16,993 30,853 27,855
Steam Revenues 9,481 9,688 9,966 10,191 10,447
---------- ---------- ---------- ---------- ----------
Total Operating Revenues 2,183,876 2,282,119 2,288,152 2,381,023 2,478,148
OPERATING EXPENSES ($000)(17)
Fuel
Mirant Mid-Atlantic 425,724 430,784 434,640 448,976 465,888
Mirant California 252,216 281,587 269,674 259,391 274,080
Mirant New York 140,646 135,635 132,304 139,500 143,690
Mirant New England 83,499 74,233 78,417 90,175 83,461
Mirant Texas 56,772 56,651 56,642 55,205 54,844
State Line 0 0 0 0 0
Mirant Wisconsin 76 80 4,105 5,358 3,017
Emissions Allowances 7,957 6,902 2,807 3,488 5,889
Operations & Maintenance 226,344 233,120 238,545 244,393 250,529
Major Maintenance 18,011 19,024 16,798 16,973 17,072
Insurance 18,225 18,695 19,184 19,684 20,200
Property and Gross Receipts Taxes (18) 91,265 92,890 94,708 96,548 98,165
Facility Administration and General 6,973 7,154 7,338 7,535 7,733
Corporate Administration and General 51,479 52,817 54,187 55,595 57,040
Other (19) 139,529 147,220 156,469 178,971 177,823
---------- ---------- ---------- ---------- ----------
Total Operating Expenses 1,518,716 1,556,791 1,565,818 1,621,791 1,659,432
NET OPERATING REVENUES ($000) 665,160 725,328 722,333 759,232 818,717
CAPITAL EXPENDITURES (20) 112,142 111,975 110,382 71,681 68,343
FUNDS FROM CAP EX FACILITY (21) 80,916 0 0 0 0
CASH AVAILABLE FOR DEBT SERVICE 633,934 613,353 611,952 687,550 750,374
ANNUAL INTEREST ($000)(22) 224,115 224,115 224,115 224,115 224,115
ANNUAL INTEREST COVERAGE (23) 2.83 2.74 2.73 3.07 3.35
2001-10 AVG INTEREST COVERAGE (24)
EBITDA ADJUSTMENTS TO
NET OPERATING REVENUE:
Plus: Cash-to-Book Lease Adjustment 9,159 15,836 24,212 45,829 43,709
EBITDA (25) 674,319 741,164 746,545 805,061 862,426
INTEREST W/O CAP EX FACILITY (26) 204,758 204,758 204,758 204,758 204,758
EBITDA/INTEREST COVERAGE (27) 3.29 3.62 3.65 3.93 4.21
2001-10 AVG EBITDA/INT COVERAGE (28)
A-48
Exhibit A-1
Mirant Americas Generation, Inc. Facilities
Projected Operating Results
Base Case
Year Ending December 31, 2011 2012 2013 2014 2015
- ------------------------ ---- ---- ---- ---- ----
CONSOLIDATED
PERFORMANCE
Annual Average Capacity (MW)(2) 12,587 12,587 12,587 12,587 12,587
Average Capacity Factor (%)(3) 38.0% 37.0% 37.1% 36.9% 36.1%
Contract Energy Sales (GWh)(4) 2,627 2,671 0 0 0
Market Energy Sales (GWh)(4) 39,282 38,095 40,960 40,678 39,851
---------- ----------- ----------- ----------- -----------
Total Energy Sales (GWh) 41,909 40,765 40,960 40,678 39,851
Total Steam Sales (MMBtu)(5) 962 962 962 962 962
Fuel Consumption (BBtu) 409,440 398,117 400,072 397,032 388,712
Average Net Heat Rate (Btu/kWh)(6) 9,770 9,766 9,767 9,760 9,754
SO(2) Allowances Purchased (Tons)(7) 52,192 51,085 61,500 61,626 62,919
NO(X) Allowances Purchased (Tons)(8) (1,508) (1,607) (983) (835) (1,058)
COMMODITY PRICES
General Inflation (%)(9) 2.60 2.60 2.60 2.60 2.60
Contract Electricity Price ($/MWh)(10) $ 21.97 21.94 0.00 0.00 0.00
Market Electricity Price ($/MWh)(11) $ 65.08 67.24 68.23 69.69 71.48
Steam Price ($/MMBtu)(12) $ 11.11 11.39 11.66 11.96 12.26
Fuel Price ($/MMBtu)(13) $ 2.71 2.74 2.91 2.98 3.01
SO(2) Allowances ($/Ton)(14) $ 194 199 204 209 215
NO(X) Allowances ($/Ton)(15) $ 1,983 2,035 2,088 2,142 2,197
OPERATING REVENUES ($000)
Contract Electricity Revenues
Mirant California (16) $ 0 0 0 0 0
Mirant New England $ 0 0 0 0 0
Mirant Texas $ 0 0 0 0 0
State Line $ 57,697 58,605 0 0 0
Mirant Wisconsin $ 0 0 0 0 0
Market Electricity Revenues
Mirant Mid-Atlantic $1,305,417 1,317,938 1,369,384 1,384,193 1,415,649
Mirant California $ 589,255 569,840 593,542 580,857 576,997
Mirant New York $ 324,596 338,390 355,636 387,184 364,919
Mirant New England $ 210,470 209,382 218,983 221,121 227,584
Mirant Texas $ 99,559 99,461 98,997 98,965 95,008
State Line $ 0 0 132,163 135,268 140,891
Mirant Wisconsin $ 26,975 26,610 25,942 27,250 27,443
Steam Revenues $ 10,689 10,955 11,215 11,498 11,786
---------- ----------- ----------- ----------- -----------
Total Operating Revenues $2,624,658 2,631,181 2,805,862 2,846,336 2,860,277
OPERATING EXPENSES ($000)(17)
Fuel
Mirant Mid-Atlantic $ 489,363 492,348 506,796 514,197 527,222
Mirant California $ 317,178 305,308 320,604 312,486 297,283
Mirant New York $ 152,094 146,634 153,483 171,804 157,377
Mirant New England $ 93,844 93,141 98,559 99,050 106,503
Mirant Texas $ 54,013 52,405 48,988 47,521 43,727
State Line $ 0 0 34,460 34,572 36,108
Mirant Wisconsin $ 2,158 1,622 817 1,566 1,468
Emissions Allowances $ 7,108 6,873 10,487 11,096 11,180
Operations & Maintenance $ 258,216 266,017 273,066 279,740 286,384
Major Maintenance $ 22,469 23,170 22,666 20,541 20,643
Insurance $ 20,725 21,258 21,812 22,382 22,963
Property and Gross Receipts Taxes (18) $ 99,894 101,685 103,513 105,448 107,399
Facility Administration and General $ 7,928 8,136 8,347 8,561 8,787
Corporate Administration and General $ 58,526 60,049 61,608 63,208 64,853
Other (19) $ 172,607 171,017 178,563 172,542 152,651
---------- ----------- ----------- ----------- -----------
Total Operating Expenses $1,756,123 1,749,663 1,843,769 1,864,714 1,844,547
NET OPERATING REVENUES ($000) $ 868,535 881,518 962,093 981,622 1,015,729
CAPITAL EXPENDITURES (20) $ 117,126 118,159 95,645 86,072 115,004
FUNDS FROM CAP EX FACILITY (21) $ 0 0 0 0 0
CASH AVAILABLE FOR DEBT SERVICE $ 751,409 763,359 866,447 895,550 900,726
ANNUAL INTEREST ($000)(22) $ 224,115 224,115 224,115 224,115 224,115
ANNUAL INTEREST COVERAGE (23) 3.35 3.41 3.87 4.00 4.02
2001-10 AVG INTEREST COVERAGE (24) 3.21
EBITDA ADJUSTMENTS TO
NET OPERATING REVENUE:
Plus: Cash-to-Book Lease Adjustment $ 37,489 34,989 41,490 34,489 13,489
EBITDA (25) $ 906,024 916,507 1,003,583 1,016,111 1,029,218
INTEREST W/O CAP EX FACILITY (26) $ 204,758 204,758 204,758 204,758 204,758
EBITDA/INTEREST COVERAGE (27) 4.42 4.48 4.90 4.96 5.03
2001-10 AVG EBITDA/INT COVERAGE (28) 4.02
Year Ending December 31, 2016 2017 2018 2019 2020
- ------------------------ ---- ---- ---- ---- ----
CONSOLIDATED
PERFORMANCE
Annual Average Capacity (MW)(2) 12,587 12,587 12,587 12,587 12,587
Average Capacity Factor (%)(3) 35.5% 35.7% 35.3% 35.4% 34.2%
Contract Energy Sales (GWh)(4) 0 0 0 0 0
Market Energy Sales (GWh)(4) 39,139 39,337 38,889 39,018 37,758
----------- ----------- ----------- ----------- -----------
Total Energy Sales (GWh) 39,139 39,337 38,889 39,018 37,758
Total Steam Sales (MMBtu)(5) 962 962 962 962 962
Fuel Consumption (BBtu) 381,487 383,563 379,171 380,619 368,101
Average Net Heat Rate (Btu/kWh)(6) 9,747 9,751 9,750 9,755 9,749
SO(2) Allowances Purchased (Tons)(7) 61,709 61,626 62,221 61,520 62,102
NO(X) Allowances Purchased (Tons)(8) (1,207) (1,206) (1,115) (1,126) (1,479)
COMMODITY PRICES
General Inflation (%)(9) 2.60 2.60 2.60 2.60 2.60
Contract Electricity Price ($/MWh)(10) 0.00 0.00 0.00 0.00 0.00
Market Electricity Price ($/MWh)(11) 73.31 75.36 77.83 79.61 80.44
Steam Price ($/MMBtu)(12) 12.61 12.91 13.23 13.54 13.86
Fuel Price ($/MMBtu)(13) 3.07 3.17 3.23 3.33 3.33
SO(2) Allowances ($/Ton)(14) 220 226 232 238 244
NO(X) Allowances ($/Ton)(15) 2,255 2,313 2,373 2,435 2,498
OPERATING REVENUES ($000)
Contract Electricity Revenues
Mirant California (16) 0 0 0 0 0
Mirant New England 0 0 0 0 0
Mirant Texas 0 0 0 0 0
State Line 0 0 0 0 0
Mirant Wisconsin 0 0 0 0 0
Market Electricity Revenues
Mirant Mid-Atlantic 1,436,988 1,473,937 1,527,143 1,557,539 1,602,335
Mirant California 575,519 606,129 579,205 625,267 611,903
Mirant New York 367,130 374,693 405,448 396,099 281,384
Mirant New England 223,610 237,080 238,831 246,121 253,161
Mirant Texas 93,812 95,357 94,128 94,149 93,642
State Line 145,171 149,936 154,755 159,455 166,670
Mirant Wisconsin 27,236 27,352 27,174 27,554 28,009
Steam Revenues 12,131 12,417 12,728 13,023 13,332
----------- ----------- ----------- ----------- -----------
Total Operating Revenues 2,881,597 2,976,901 3,039,412 3,119,207 3,050,436
OPERATING EXPENSES ($000)(17)
Fuel
Mirant Mid-Atlantic 533,291 549,124 562,519 578,422 598,904
Mirant California 296,188 314,320 293,560 325,906 313,050
Mirant New York 158,692 161,026 176,140 169,417 117,858
Mirant New England 101,009 110,731 111,875 116,459 118,848
Mirant Texas 42,045 42,410 40,631 39,557 38,696
State Line 36,719 36,720 37,404 37,688 39,257
Mirant Wisconsin 1,523 807 891 953 715
Emissions Allowances 10,863 11,136 11,783 11,893 11,464
Operations & Maintenance 293,190 301,006 308,272 316,576 324,210
Major Maintenance 23,139 24,472 21,626 21,842 22,023
Insurance 23,554 24,167 24,800 25,444 26,103
Property and Gross Receipts Taxes (18) 109,397 111,444 113,541 115,711 117,934
Facility Administration and General 9,015 9,242 9,489 9,734 9,990
Corporate Administration and General 66,541 68,267 70,045 71,864 73,735
Other (19) 193,714 188,881 150,962 186,697 153,371
----------- ----------- ----------- ----------- -----------
Total Operating Expenses 1,898,880 1,953,753 1,933,538 2,028,163 1,966,158
NET OPERATING REVENUES ($000) 982,717 1,023,148 1,105,874 1,091,044 1,084,277
CAPITAL EXPENDITURES (20) 87,685 102,649 129,279 80,694 116,651
FUNDS FROM CAP EX FACILITY (21) 0 0 0 0 0
CASH AVAILABLE FOR DEBT SERVICE 895,031 920,499 976,595 1,010,350 967,626
ANNUAL INTEREST ($000)(22) 224,115 224,115 224,115 224,115 224,115
ANNUAL INTEREST COVERAGE (23) 3.99 4.11 4.36 4.51 4.32
2001-10 AVG INTEREST COVERAGE (24)
EBITDA ADJUSTMENTS TO
NET OPERATING REVENUE:
Plus: Cash-to-Book Lease Adjustment 53,489 47,489 8,489 42,988 8,489
EBITDA (25) 1,036,206 1,070,637 1,114,363 1,134,032 1,092,766
INTEREST W/O CAP EX FACILITY (26) 204,758 204,758 204,758 204,758 204,758
EBITDA/INTEREST COVERAGE (27) 5.06 5.23 5.44 5.54 5.34
2001-10 AVG EBITDA/INT COVERAGE (28)
A-49
Exhibit A-1
Mirant Americas Generation, Inc. Facilities
Projected Operating Results
Base Case
Year Ending December 31, 2001(1) 2002 2003 2004 2005
- ------------------------ ------- ---- ---- ---- ----
MIRANT MID-ATLANTIC
PERFORMANCE
Capacity (MW) 5,266 5,266 5,266 5,266 5,266
Availability (%) 88.0% 88.0% 88.0% 88.0% 88.0%
Capacity Factor (%)(3) 54.5% 52.1% 50.0% 48.1% 47.9%
Energy Generation (GWh) 25,125 24,039 23,068 22,205 22,116
Heat Rate (Btu/kWh)(6) 9,736 9,716 9,655 9,700 9,709
Fuel Consumption (BBtu) 244,605 233,562 222,736 215,397 214,721
SO(2) Allowances Purchased (Tons)(7) 84,301 77,030 75,310 61,075 60,220
NO(X) Allowances Purchased (Tons)(8) 7,669 1,879 5,843 3,999 3,264
COMMODITY PRICES
Market Electricity Price ($/MWh)(11) $ 57.80 53.11 49.07 47.51 46.46
Fuel Price ($/MMBtu)(13) $ 2.19 2.08 1.93 1.98 1.88
OPERATING REVENUES ($000)
Market Electricity Revenue $1,452,190 1,276,686 1,131,958 1,055,042 1,027,571
---------- ----------- ----------- ----------- -----------
Total Operating Revenues $1,452,190 1,276,686 1,131,958 1,055,042 1,027,571
OPERATING EXPENSES ($000)(17)
Fuel $ 535,696 485,365 429,800 426,205 403,409
Emissions Allowances $ 20,315 13,736 25,332 17,892 15,557
Operations & Maintenance $ 100,050 89,464 88,243 86,160 88,392
Major Maintenance $ 5,987 5,823 5,697 6,064 6,172
Insurance $ 4,702 4,824 4,949 5,078 5,211
Property Taxes (18) $ 34,980 35,890 36,823 37,780 38,762
Production Service Center $ 17,740 18,201 18,675 19,160 19,659
Corporate Administration & General $ 6,852 7,030 7,212 7,400 7,593
Other (19) $ 201,570 176,117 156,515 127,446 122,106
---------- ----------- ----------- ----------- -----------
Total Operating Expenses $ 927,892 836,450 773,245 733,185 706,861
NET OPERATING REVENUES ($000) $ 524,298 440,237 358,713 321,857 320,710
CAPITAL EXPENDITURES ($000)(20) $ 48,322 49,364 33,232 58,128 55,798
MIRANT CALIFORNIA FACILITIES
PERFORMANCE
Capacity (MW) 2,974 2,974 2,974 2,974 2,974
Availability (%) 83.0% 83.0% 83.0% 83.0% 83.0%
Capacity Factor (%)(3) 53.2% 40.8% 43.7% 33.2% 27.0%
Energy Generation (GWh) 13,848 10,633 11,395 8,657 7,044
Market Energy Sales (GWh) 13,848 10,633 11,395 8,657 7,044
Heat Rate (Btu/kWh)(6) 10,042 10,024 10,026 10,026 10,019
Fuel Consumption (BBtu) 139,054 106,584 114,245 86,794 70,576
SO(2) Allowances Purchased (Tons)(7) 70 54 57 43 36
COMMODITY PRICES
Market Electricity Price ($/MWh)(11) $ 91.16 77.68 72.25 66.38 67.39
Fuel Price ($/MMBtu)(13) $ 5.60 4.99 4.54 4.25 3.50
OPERATING REVENUES ($000)
Contract Electricity Revenue $ 28,168 27,605 29,677 19,285 2,249
Market Electricity Revenue $1,262,390 825,938 823,245 574,597 474,707
---------- ----------- ----------- ----------- -----------
Total Operating Revenues $1,290,558 853,543 852,922 593,882 476,956
OPERATING EXPENSES ($000)(17)
Fuel $ 779,179 532,135 518,688 368,601 247,277
Emissions Allowances $ 8 7 7 6 6
Operations & Maintenance $ 48,605 49,095 52,777 52,269 52,302
Major Maintenance $ 2,899 2,426 2,931 4,239 2,268
Insurance $ 4,905 5,033 5,161 5,295 5,431
Property Taxes (18) $ 8,357 8,576 8,797 9,029 9,263
Facility Administration and General $ 2,404 2,473 2,537 2,599 2,667
Corporate Administration & General $ 14,332 14,705 15,086 15,475 15,880
Other $ 8,257 7,260 7,467 7,024 7,303
---------- ----------- ----------- ----------- -----------
Total Operating Expenses $ 868,946 621,710 613,451 464,537 342,397
NET OPERATING REVENUES ($000) $ 421,612 231,833 239,471 129,345 134,559
CAPITAL EXPENDITURES ($000)(20) $ 46,048 37,578 89,968 14,212 4,452
Year Ending December 31, 2006 2007 2008 2009 2010
- ------------------------ ---- ---- ---- ---- ----
MIRANT MID-ATLANTIC
PERFORMANCE
Capacity (MW) 5,266 5,266 5,266 5,266 5,266
Availability (%) 88.0% 88.0% 88.0% 88.0% 88.0%
Capacity Factor (%)(3) 49.7% 49.5% 49.3% 49.5% 50.3%
Energy Generation (GWh) 22,912 22,834 22,720 22,847 23,190
Heat Rate (Btu/kWh)(6) 9,698 9,694 9,680 9,686 9,683
Fuel Consumption (BBtu) 222,190 221,360 219,944 221,296 224,549
SO(2) Allowances Purchased (Tons)(7) 67,094 67,468 68,003 68,562 79,741
NO(X) Allowances Purchased (Tons)(8) 1,528 1,218 (1,104) (1,227) (1,098)
COMMODITY PRICES
Market Electricity Price ($/MWh)(11) 49.21 50.74 50.97 52.15 53.54
Fuel Price ($/MMBtu)(13) 1.92 1.95 1.98 2.03 2.07
OPERATING REVENUES ($000)
Market Electricity Revenue 1,127,472 1,158,541 1,157,979 1,191,457 1,241,658
----------- ----------- ----------- ----------- -----------
Total Operating Revenues 1,127,472 1,158,541 1,157,979 1,191,457 1,241,658
OPERATING EXPENSES ($000)(17)
Fuel 425,724 430,784 434,640 448,976 465,888
Emissions Allowances 14,107 13,984 10,181 10,318 12,946
Operations & Maintenance 91,820 94,702 97,258 99,733 102,342
Major Maintenance 6,353 6,575 6,838 6,848 7,620
Insurance 5,346 5,485 5,627 5,775 5,924
Property Taxes (18) 39,770 40,804 41,865 42,954 44,071
Production Service Center 20,169 20,693 21,231 21,782 22,350
Corporate Administration & General 7,790 7,993 8,200 8,414 8,632
Other (19) 111,929 118,769 127,312 149,100 147,156
----------- ----------- ----------- ----------- -----------
Total Operating Expenses 723,008 739,788 753,152 793,899 816,930
NET OPERATING REVENUES ($000) 404,464 418,753 404,826 397,558 424,729
CAPITAL EXPENDITURES ($000)(20) 80,913 79,598 77,845 46,449 46,304
MIRANT CALIFORNIA FACILITIES
PERFORMANCE
Capacity (MW) 2,974 2,974 2,974 2,974 2,974
Availability (%) 83.0% 83.0% 83.0% 83.0% 83.0%
Capacity Factor (%)(3) 26.5% 28.5% 26.2% 24.0% 24.3%
Energy Generation (GWh) 6,907 7,429 6,828 6,252 6,343
Market Energy Sales (GWh) 6,907 7,429 6,828 6,252 6,343
Heat Rate (Btu/kWh)(6) 10,025 10,026 10,020 10,024 10,023
Fuel Consumption (BBtu) 69,243 74,477 68,421 62,667 63,570
SO(2) Allowances Purchased (Tons)(7) 35 37 34 31 32
COMMODITY PRICES
Market Electricity Price ($/MWh)(11) 68.86 71.80 76.46 81.75 84.31
Fuel Price ($/MMBtu)(13) 3.64 3.78 3.94 4.14 4.31
OPERATING REVENUES ($000)
Contract Electricity Revenue 311 258 258 0 0
Market Electricity Revenue 475,614 533,345 522,118 511,096 534,746
----------- ----------- ----------- ----------- -----------
Total Operating Revenues 475,925 533,603 522,376 511,096 534,746
OPERATING EXPENSES ($000)(17)
Fuel 252,216 281,587 269,674 259,391 274,080
Emissions Allowances 6 6 6 6 6
Operations & Maintenance 53,556 55,396 56,306 57,251 58,826
Major Maintenance 2,342 2,412 2,488 2,570 2,652
Insurance 5,576 5,719 5,866 6,023 6,180
Property Taxes (18) 9,502 9,749 10,000 10,264 10,529
Facility Administration and General 2,738 2,808 2,882 2,959 3,036
Corporate Administration & General 16,292 16,716 17,151 17,594 18,051
Other 7,431 7,758 7,926 8,089 8,317
----------- ----------- ----------- ----------- -----------
Total Operating Expenses 349,659 382,151 372,299 364,147 381,677
NET OPERATING REVENUES ($000) 126,266 151,452 150,077 146,949 153,069
CAPITAL EXPENDITURES ($000)(20) 5,694 4,310 6,440 7,827 6,387
A-50
Exhibit A-1
Mirant Americas Generation, Inc. Facilities
Projected Operating Results
Base Case
Year Ending December 31, 2011 2012 2013 2014 2015
- ------------------------ ---- ---- ---- ---- ----
MIRANT MID-ATLANTIC
PERFORMANCE
Capacity (MW) 5,266 5,266 5,266 5,266 5,266
Availability (%) 88.0% 88.0% 88.0% 88.0% 88.0%
Capacity Factor (%)(3) 51.0% 50.5% 50.5% 50.3% 50.5%
Energy Generation (GWh) 23,505 23,283 23,301 23,214 23,313
Heat Rate (Btu/kWh)(6) 9,697 9,689 9,690 9,688 9,683
Fuel Consumption (BBtu) 227,931 225,583 225,797 224,892 225,729
SO(2) Allowances Purchased (Tons)(7) 80,682 80,439 80,116 80,314 81,359
NO(X) Allowances Purchased (Tons)(8) (895) (886) (1,035) (1,043) (1,026)
COMMODITY PRICES
Market Electricity Price ($/MWh)(11) $ 55.54 56.61 58.77 59.63 60.72
Fuel Price ($/MMBtu)(13) $ 2.15 2.18 2.24 2.29 2.34
OPERATING REVENUES ($000)
Market Electricity Revenue $1,305,417 1,317,938 1,369,384 1,384,193 1,415,649
---------- ----------- ----------- ----------- -----------
Total Operating Revenues $1,305,417 1,317,938 1,369,384 1,384,193 1,415,649
OPERATING EXPENSES ($000)(17)
Fuel $ 489,363 492,348 506,796 514,197 527,222
Emissions Allowances $ 13,872 14,199 14,191 14,587 15,229
Operations & Maintenance $ 105,232 107,796 110,622 113,444 116,493
Major Maintenance $ 7,740 7,526 7,362 7,839 7,978
Insurance $ 6,078 6,237 6,398 6,565 6,736
Property Taxes (18) $ 45,216 46,392 47,599 48,835 50,105
Production Service Center $ 22,931 23,526 24,139 24,766 25,411
Corporate Administration & General $ 8,857 9,087 9,323 9,565 9,814
Other (19) $ 141,116 138,801 145,492 138,686 117,886
---------- ----------- ----------- ----------- -----------
Total Operating Expenses $ 840,405 845,912 871,922 878,484 876,873
NET OPERATING REVENUES ($000) $ 465,012 472,026 497,462 505,709 538,775
CAPITAL EXPENDITURES ($000)(20) $ 53,914 61,800 55,750 57,871 78,065
MIRANT CALIFORNIA FACILITIES
PERFORMANCE
Capacity (MW) 2,974 2,974 2,974 2,974 2,974
Availability (%) 83.0% 83.0% 83.0% 83.0% 83.0%
Capacity Factor (%)(3) 27.5% 25.7% 26.1% 24.7% 22.7%
Energy Generation (GWh) 7,154 6,688 6,810 6,426 5,905
Market Energy Sales (GWh) 7,154 6,688 6,810 6,426 5,905
Heat Rate (Btu/kWh)(6) 10,027 10,020 10,022 10,020 10,021
Fuel Consumption (BBtu) 71,736 67,014 68,248 64,387 59,175
SO(2) Allowances Purchased (Tons)(7) 36 34 34 32 29
COMMODITY PRICES
Market Electricity Price ($/MWh)(11) $ 82.36 85.21 87.16 90.39 97.72
Fuel Price ($/MMBtu)(13) $ 4.42 4.56 4.70 4.85 5.02
OPERATING REVENUES ($000)
Contract Electricity Revenue $ 0 0 0 0 0
Market Electricity Revenue $ 589,255 569,840 593,542 580,857 576,997
---------- ----------- ----------- ----------- -----------
Total Operating Revenues $ 589,255 569,840 593,542 580,857 576,997
OPERATING EXPENSES ($000)(17)
Fuel $ 317,178 305,308 320,604 312,486 297,283
Emissions Allowances $ 6 6 6 6 6
Operations & Maintenance $ 61,128 62,261 64,000 65,266 66,414
Major Maintenance $ 3,747 3,140 3,792 5,477 2,935
Insurance $ 6,340 6,503 6,672 6,847 7,023
Property Taxes (18) $ 10,805 11,086 11,372 11,667 11,969
Facility Administration and General $ 3,111 3,194 3,277 3,360 3,451
Corporate Administration & General $ 18,523 19,006 19,500 20,006 20,524
Other $ 8,560 8,690 8,932 9,090 9,354
---------- ----------- ----------- ----------- -----------
Total Operating Expenses $ 429,398 419,194 438,155 434,205 418,959
NET OPERATING REVENUES ($000) $ 159,857 150,646 155,387 146,652 158,038
CAPITAL EXPENDITURES ($000)(20) $ 11,215 9,969 9,870 8,156 9,383
Year Ending December 31, 2016 2017 2018 2019 2020
- ------------------------ ---- ---- ---- ---- ----
MIRANT MID-ATLANTIC
PERFORMANCE
Capacity (MW) 5,266 5,266 5,266 5,266 5,266
Availability (%) 88.0% 88.0% 88.0% 88.0% 88.0%
Capacity Factor (%)(3) 50.2% 50.1% 50.2% 50.2% 50.5%
Energy Generation (GWh) 23,144 23,125 23,162 23,140 23,314
Heat Rate (Btu/kWh)(6) 9,676 9,679 9,676 9,682 9,686
Fuel Consumption (BBtu) 223,934 223,822 224,123 224,046 225,824
SO(2) Allowances Purchased (Tons)(7) 81,163 80,632 81,155 80,764 81,901
NO(X) Allowances Purchased (Tons)(8) (1,173) (1,136) (1,127) (1,132) (1,030)
COMMODITY PRICES
Market Electricity Price ($/MWh)(11) 62.09 63.74 65.93 67.31 68.73
Fuel Price ($/MMBtu)(13) 2.38 2.45 2.51 2.58 2.65
OPERATING REVENUES ($000)
Market Electricity Revenue 1,436,988 1,473,937 1,527,143 1,557,539 1,602,335
----------- ----------- ----------- ----------- -----------
Total Operating Revenues 1,436,988 1,473,937 1,527,143 1,557,539 1,602,335
OPERATING EXPENSES ($000)(17)
Fuel 533,291 549,124 562,519 578,422 598,904
Emissions Allowances 15,247 15,609 16,158 16,471 17,429
Operations & Maintenance 119,387 122,486 125,734 128,966 132,496
Major Maintenance 8,211 8,499 8,840 8,852 9,850
Insurance 6,911 7,090 7,273 7,464 7,658
Property Taxes (18) 51,408 52,745 54,116 55,523 56,966
Production Service Center 26,071 26,750 27,444 28,159 28,890
Corporate Administration & General 10,070 10,331 10,600 10,875 11,158
Other (19) 158,091 152,301 113,517 148,238 113,966
----------- ----------- ----------- ----------- -----------
Total Operating Expenses 928,687 944,935 926,201 982,970 977,317
NET OPERATING REVENUES ($000) 508,301 529,002 600,942 574,569 625,017
CAPITAL EXPENDITURES ($000)(20) 52,378 55,481 92,588 56,235 84,968
MIRANT CALIFORNIA FACILITIES
PERFORMANCE
Capacity (MW) 2,974 2,974 2,974 2,974 2,974
Availability (%) 83.0% 83.0% 83.0% 83.0% 83.0%
Capacity Factor (%)(3) 21.8% 22.6% 20.4% 22.1% 20.4%
Energy Generation (GWh) 5,687 5,895 5,309 5,752 5,321
Market Energy Sales (GWh) 5,687 5,895 5,309 5,752 5,321
Heat Rate (Btu/kWh)(6) 10,025 10,023 10,021 10,021 10,025
Fuel Consumption (BBtu) 57,016 59,084 53,204 57,636 53,345
SO(2) Allowances Purchased (Tons)(7) 28 29 26 29 26
COMMODITY PRICES
Market Electricity Price ($/MWh)(11) 101.19 102.82 109.09 108.71 114.99
Fuel Price ($/MMBtu)(13) 5.19 5.32 5.52 5.65 5.87
OPERATING REVENUES ($000)
Contract Electricity Revenue 0 0 0 0 0
Market Electricity Revenue 575,519 606,129 579,205 625,267 611,903
----------- ----------- ----------- ----------- -----------
Total Operating Revenues 575,519 606,129 579,205 625,267 611,903
OPERATING EXPENSES ($000)(17)
Fuel 296,188 314,320 293,560 325,906 313,050
Emissions Allowances 6 6 6 6 6
Operations & Maintenance 67,916 69,914 71,062 73,423 74,829
Major Maintenance 3,025 3,121 3,216 3,314 3,424
Insurance 7,204 7,390 7,589 7,783 7,985
Property Taxes (18) 12,286 12,600 12,930 13,266 13,607
Facility Administration and General 3,539 3,629 3,725 3,820 3,924
Corporate Administration & General 21,060 21,605 22,168 22,743 23,336
Other 9,552 9,830 10,001 10,300 10,515
----------- ----------- ----------- ----------- -----------
Total Operating Expenses 420,776 442,415 424,257 460,561 450,676
NET OPERATING REVENUES ($000) 154,743 163,714 154,948 164,706 161,227
CAPITAL EXPENDITURES ($000)(20) 7,707 8,176 9,925 8,115 8,627
A-51
Exhibit A-1
Mirant Americas Generation, Inc. Facilities
Projected Operating Results
Base Case
Year Ending December 31, 2001(1) 2002 2003 2004 2005
- ------------------------ ------- ---- ---- ---- ----
MIRANT NEW YORK FACILITIES
PERFORMANCE
Capacity (MW) 1,764 1,764 1,764 1,764 1,764
Availability (%) 81.0% 81.0% 81.0% 81.0% 81.0%
Capacity Factor (%)(3) 44.8% 41.7% 33.8% 32.9% 32.7%
Energy Generation (GWh) 6,929 6,438 5,219 5,090 5,047
Market Energy Sales (GWh) 6,929 6,438 5,219 5,090 5,047
Heat Rate (Btu/kWh)(6) 10,246 10,222 10,160 10,039 10,033
Fuel Consumption (BBtu) 70,990 65,804 53,022 51,099 50,636
SO(2) Allowances Purchased (Tons)(7) (3,759) (4,936) (7,497) (9,365) (9,453)
NO(X) Allowances Purchased (Tons)(8) (50) (441) 591 838 742
COMMODITY PRICES
Market Electricity Price ($/MWh)(11) $ 68.65 61.87 64.80 57.85 54.35
Fuel Price ($/MMBtu)(13) $ 3.93 3.62 3.49 3.32 3.04
OPERATING REVENUES ($000)
Market Electricity Revenue $475,676 398,285 338,171 294,482 274,288
OPERATING EXPENSES ($000)(17)
Fuel $279,079 237,979 184,925 169,727 153,913
Emissions Allowances ($614) (1,201) 175 159 (309)
Operations & Maintenance $ 37,534 38,158 36,327 36,728 37,654
Major Maintenance $ 2,286 4,751 2,106 409 1,446
Insurance $ 2,608 2,675 2,746 2,816 2,891
Property Taxes (18) $ 29,715 29,715 29,715 29,715 29,715
Facility Administration and General $ 1,048 1,076 1,103 1,131 1,162
Corporate Administration & General $ 13,157 13,500 13,851 14,211 14,581
-------- --------- --------- --------- ---------
Total Operating Expenses $364,813 326,653 270,948 254,896 241,053
NET OPERATING REVENUES ($000) $110,863 71,632 67,223 39,586 33,235
CAPITAL EXPENDITURES ($000)(20) $ 6,138 12,737 8,314 2,338 9,364
MIRANT NEW ENGLAND FACILITIES
PERFORMANCE
Capacity (MW) 1,218 1,218 1,218 1,218 1,218
Contract Capacity (MW) 563 563 0 0 0
Availability (%) 79.0% 79.0% 79.0% 79.0% 79.0%
Capacity Factor (%)(3) 44.5% 41.8% 34.8% 24.2% 24.4%
Energy Generation (GWh) 4,745 4,464 3,715 2,585 2,603
Contract Energy Sales (GWh) 2,503 1,833 0 0 0
Market Energy Sales (GWh) 2,242 2,630 3,715 2,585 2,603
Steam Sales (BBtu) 962 962 962 962 962
Heat Rate (Btu/kWh)(6) 9,645 9,637 9,600 9,639 9,642
Fuel Consumption (BBtu) 45,766 43,015 35,663 24,919 25,100
SO(2) Allowances Purchased (Tons)(7) (9,561) (10,867) (14,326) (19,813) (19,734)
NO(X) Allowances Purchased (Tons)(8) (1,461) (1,825) (1,325) (1,198) (1,086)
COMMODITY PRICES
Contract Electricity Price ($/MWh) $ 59.62 55.23 0.00 0.00 0.00
Market Electricity Price ($/MWh)(11) $ 29.88 31.94 51.03 55.50 54.32
Fuel Price ($/MMBtu)(13) $ 4.77 4.14 3.88 3.53 3.22
Steam Price ($/MMBtu) $ 12.98 12.09 12.09 10.71 9.57
OPERATING REVENUES ($000)
Contract Electricity Revenue $149,243 101,246 0 0 0
Market Electricity Revenue $141,770 142,545 189,584 143,484 141,404
Steam Revenue $ 12,480 11,626 11,627 10,303 9,207
-------- --------- --------- --------- ---------
Total Operating Revenues $303,493 255,417 201,211 153,787 150,611
OPERATING EXPENSES ($000)(17)
Fuel $218,336 178,169 138,270 87,957 80,750
Emissions Allowances ($2,894) (3,496) (5,310) (5,606) (5,128)
Operations & Maintenance $ 22,486 22,874 20,321 20,307 20,859
Major Maintenance $ 2,167 108 2,254 63 733
Insurance $ 2,337 2,400 2,462 2,524 2,591
Property Taxes (18) $ 3,971 4,076 4,181 4,290 4,400
Facility Administration and General $ 1,958 2,009 2,060 2,114 2,168
Corporate Administration & General $ 4,668 4,791 4,916 5,044 5,176
-------- --------- --------- --------- ---------
Total Operating Expenses $253,029 210,931 169,154 116,693 111,549
NET OPERATING REVENUES ($000) $ 50,464 44,486 32,057 37,094 39,062
CAPITAL EXPENDITURES ($000)(20) $ 8,667 1,929 9,013 255 4,554
Year Ending December 31, 2006 2007 2008 2009 2010
- ------------------------ ---- ---- ---- ---- ----
MIRANT NEW YORK FACILITIES
PERFORMANCE
Capacity (MW) 1,764 1,764 1,764 1,764 1,764
Availability (%) 81.0% 81.0% 81.0% 81.0% 81.0%
Capacity Factor (%)(3) 29.3% 27.8% 26.5% 27.0% 27.0%
Energy Generation (GWh) 4,521 4,302 4,094 4,176 4,179
Market Energy Sales (GWh) 4,521 4,302 4,094 4,176 4,179
Heat Rate (Btu/kWh)(6) 10,028 10,071 10,061 10,066 10,060
Fuel Consumption (BBtu) 45,338 43,324 41,193 42,035 42,037
SO(2) Allowances Purchased (Tons)(7) (9,802) (9,270) (9,514) (9,384) (9,416)
NO(X) Allowances Purchased (Tons)(8) 466 285 199 333 417
COMMODITY PRICES
Market Electricity Price ($/MWh)(11) 56.70 60.86 64.47 67.38 74.37
Fuel Price ($/MMBtu)(13) 3.10 3.13 3.21 3.32 3.42
OPERATING REVENUES ($000)
Market Electricity Revenue 256,322 261,817 263,972 281,361 310,737
OPERATING EXPENSES ($000)(17)
Fuel 140,646 135,635 132,304 139,500 143,690
Emissions Allowances (858) (1,112) (1,342) (1,103) (973)
Operations & Maintenance 38,516 39,687 40,639 41,735 42,822
Major Maintenance 1,581 1,839 1,164 707 529
Insurance 2,965 3,040 3,123 3,201 3,288
Property Taxes (18) 29,715 29,715 29,715 29,715 29,715
Facility Administration and General 1,189 1,223 1,252 1,288 1,321
Corporate Administration & General 14,961 15,350 15,748 16,158 16,578
--------- --------- --------- --------- ---------
Total Operating Expenses 228,715 225,377 222,603 231,201 236,970
NET OPERATING REVENUES ($000) 27,607 36,440 41,369 50,160 73,767
CAPITAL EXPENDITURES ($000)(20) 5,285 6,464 10,124 1,153 1,874
MIRANT NEW ENGLAND FACILITIES
PERFORMANCE
Capacity (MW) 1,218 1,218 1,218 1,218 1,218
Contract Capacity (MW) 0 0 0 0 0
Availability (%) 79.0% 79.0% 79.0% 79.0% 79.0%
Capacity Factor (%)(3) 24.5% 21.0% 21.6% 24.2% 21.6%
Energy Generation (GWh) 2,616 2,244 2,305 2,578 2,307
Contract Energy Sales (GWh) 0 0 0 0 0
Market Energy Sales (GWh) 2,616 2,244 2,305 2,578 2,307
Steam Sales (BBtu) 962 962 962 962 962
Heat Rate (Btu/kWh)(6) 9,632 9,664 9,653 9,654 9,672
Fuel Consumption (BBtu) 25,203 21,682 22,250 24,888 22,311
SO(2) Allowances Purchased (Tons)(7) (19,655) (21,475) (21,166) (19,874) (20,314)
NO(X) Allowances Purchased (Tons)(8) (1,116) (1,240) (1,219) (1,101) (1,165)
COMMODITY PRICES
Contract Electricity Price ($/MWh) 0.00 0.00 0.00 0.00 0.00
Market Electricity Price ($/MWh)(11) 56.26 65.76 67.17 78.30 85.38
Fuel Price ($/MMBtu)(13) 3.31 3.42 3.52 3.62 3.74
Steam Price ($/MMBtu) 9.86 10.07 10.36 10.60 10.86
OPERATING REVENUES ($000)
Contract Electricity Revenue 0 0 0 0 0
Market Electricity Revenue 147,205 147,526 154,829 201,869 196,963
Steam Revenue 9,481 9,688 9,966 10,191 10,447
--------- --------- --------- --------- ---------
Total Operating Revenues 156,686 157,214 164,795 212,060 207,410
OPERATING EXPENSES ($000)(17)
Fuel 83,499 74,233 78,417 90,175 83,461
Emissions Allowances (5,298) (5,976) (6,038) (5,733) (6,090)
Operations & Maintenance 21,398 21,740 22,336 23,114 23,541
Major Maintenance 2,081 2,254 387 802 75
Insurance 2,659 2,728 2,800 2,871 2,946
Property Taxes (18) 4,516 4,633 4,755 4,877 5,004
Facility Administration and General 2,227 2,284 2,341 2,402 2,467
Corporate Administration & General 5,310 5,448 5,589 5,734 5,885
--------- --------- --------- --------- ---------
Total Operating Expenses 116,392 107,344 110,587 124,242 117,289
NET OPERATING REVENUES ($000) 40,294 49,870 54,208 87,818 90,121
CAPITAL EXPENDITURES ($000)(20) 8,322 9,015 3,300 3,206 302
A-52
Exhibit A-1
Mirant Americas Generation, Inc. Facilities
Projected Operating Results
Base Case
Year Ending December 31, 2011 2012 2013 2014 2015
- ------------------------ ---- ---- ---- ---- ----
MIRANT NEW YORK FACILITIES
PERFORMANCE
Capacity (MW) 1,764 1,764 1,764 1,764 1,764
Availability (%) 81.0% 81.0% 81.0% 81.0% 81.0%
Capacity Factor (%)(3) 27.8% 26.1% 26.6% 28.6% 25.8%
Energy Generation (GWh) 4,289 4,040 4,108 4,423 3,989
Market Energy Sales (GWh) 4,289 4,040 4,108 4,423 3,989
Heat Rate (Btu/kWh)(6) 10,071 10,062 10,065 10,073 10,053
Fuel Consumption (BBtu) 43,198 40,648 41,349 44,558 40,100
SO(2) Allowances Purchased (Tons)(7) (9,194) (9,539) (9,418) (9,084) (9,647)
NO(X) Allowances Purchased (Tons)(8) 472 371 412 596 337
COMMODITY PRICES
Market Electricity Price ($/MWh)(11) $ 75.68 83.77 86.57 87.53 91.48
Fuel Price ($/MMBtu)(13) $ 3.52 3.61 3.71 3.86 3.92
OPERATING REVENUES ($000)
Market Electricity Revenue $324,596 338,390 355,636 387,184 364,919
OPERATING EXPENSES ($000)(17)
Fuel $152,094 146,634 153,483 171,804 157,377
Emissions Allowances ($848) (1,143) (1,064) (628) (1,331)
Operations & Maintenance $ 44,016 45,032 46,247 47,579 48,589
Major Maintenance $ 2,955 6,141 2,723 529 1,868
Insurance $ 3,373 3,458 3,549 3,642 3,736
Property Taxes (18) $ 29,715 29,715 29,715 29,715 29,715
Facility Administration and General $ 1,355 1,390 1,427 1,463 1,500
Corporate Administration & General $ 17,010 17,452 17,905 18,370 18,850
-------- --------- --------- --------- ---------
Total Operating Expenses $249,670 248,679 253,985 272,474 260,304
NET OPERATING REVENUES ($000) $ 74,926 89,711 101,651 114,710 104,615
CAPITAL EXPENDITURES ($000)(20) $ 11,343 16,466 8,579 7,435 6,061
MIRANT NEW ENGLAND FACILITIES
PERFORMANCE
Capacity (MW) 1,218 1,218 1,218 1,218 1,218
Contract Capacity (MW) 0 0 0 0 0
Availability (%) 79.0% 79.0% 79.0% 79.0% 79.0%
Capacity Factor (%)(3) 23.5% 22.5% 23.1% 22.4% 23.3%
Energy Generation (GWh) 2,512 2,405 2,459 2,388 2,483
Contract Energy Sales (GWh) 0 0 0 0 0
Market Energy Sales (GWh) 2,512 2,405 2,459 2,388 2,483
Steam Sales (BBtu) 962 962 962 962 962
Heat Rate (Btu/kWh)(6) 9,665 9,670 9,670 9,665 9,662
Fuel Consumption (BBtu) 24,275 23,256 23,783 23,080 23,992
SO(2) Allowances Purchased (Tons)(7) (19,336) (19,853) (19,590) (19,922) (19,466)
NO(X) Allowances Purchased (Tons)(8) (1,096) (1,100) (1,121) (1,141) (1,177)
COMMODITY PRICES
Contract Electricity Price ($/MWh) $ 0.00 0.00 0.00 0.00 0.00
Market Electricity Price ($/MWh)(11) $ 83.80 87.06 89.04 92.60 91.65
Fuel Price ($/MMBtu)(13) $ 3.87 4.01 4.14 4.29 4.44
Steam Price ($/MMBtu) $ 11.11 11.39 11.66 11.96 12.26
OPERATING REVENUES ($000)
Contract Electricity Revenue $ 0 0 0 0 0
Market Electricity Revenue $210,470 209,382 218,983 221,121 227,584
Steam Revenue $ 10,689 10,955 11,215 11,498 11,786
-------- --------- --------- --------- ---------
Total Operating Revenues $221,159 220,337 230,198 232,619 239,370
OPERATING EXPENSES ($000)(17)
Fuel $ 93,844 93,141 98,559 99,050 106,503
Emissions Allowances ($5,922) (6,189) (6,339) (6,615) (6,769)
Operations & Maintenance $ 24,303 24,859 25,545 26,153 26,904
Major Maintenance $ 2,801 138 2,913 84 948
Insurance $ 3,023 3,102 3,182 3,266 3,350
Property Taxes (18) $ 5,134 5,268 5,404 5,545 5,690
Facility Administration and General $ 2,530 2,596 2,663 2,732 2,803
Corporate Administration & General $ 6,036 6,194 6,354 6,519 6,689
-------- --------- --------- --------- ---------
Total Operating Expenses $131,749 129,109 138,281 136,734 146,118
NET OPERATING REVENUES ($000) $ 89,410 91,228 91,917 95,885 93,252
CAPITAL EXPENDITURES ($000)(20) $ 13,094 555 11,650 2,371 3,792
Year Ending December 31, 2016 2017 2018 2019 2020
- ------------------------ ---- ---- ---- ---- ----
MIRANT NEW YORK FACILITIES
PERFORMANCE
Capacity (MW) 1,764 1,764 1,764 1,764 1,764
Availability (%) 81.0% 81.0% 81.0% 81.0% 81.0%
Capacity Factor (%)(3) 25.4% 25.1% 26.5% 24.9% 18.5%
Energy Generation (GWh) 3,920 3,873 4,090 3,850 2,852
Market Energy Sales (GWh) 3,920 3,873 4,090 3,850 2,852
Heat Rate (Btu/kWh)(6) 10,048 10,043 10,057 10,041 10,042
Fuel Consumption (BBtu) 39,384 38,899 41,137 38,661 28,639
SO(2) Allowances Purchased (Tons)(7) (9,756) (9,837) (9,536) (9,904) (10,612)
NO(X) Allowances Purchased (Tons)(8) 324 295 414 384 (103)
COMMODITY PRICES
Market Electricity Price ($/MWh)(11) 93.66 96.74 99.12 102.88 98.66
Fuel Price ($/MMBtu)(13) 4.03 4.14 4.28 4.38 4.12
OPERATING REVENUES ($000)
Market Electricity Revenue 367,130 374,693 405,448 396,099 281,384
OPERATING EXPENSES ($000)(17)
Fuel 158,692 161,026 176,140 169,417 117,858
Emissions Allowances (1,420) (1,543) (1,232) (1,422) (2,848)
Operations & Maintenance 49,810 51,068 52,529 53,729 54,854
Major Maintenance 2,044 2,378 1,504 914 683
Insurance 3,832 3,933 4,034 4,140 4,248
Property Taxes (18) 29,715 29,715 29,715 29,715 29,715
Facility Administration and General 1,540 1,577 1,620 1,663 1,707
Corporate Administration & General 19,339 19,841 20,357 20,887 21,430
--------- --------- --------- --------- ---------
Total Operating Expenses 263,552 267,995 284,667 279,043 227,647
NET OPERATING REVENUES ($000) 103,578 106,698 120,781 117,056 53,737
CAPITAL EXPENDITURES ($000)(20) 6,830 14,716 6,561 1,491 9,292
MIRANT NEW ENGLAND FACILITIES
PERFORMANCE
Capacity (MW) 1,218 1,218 1,218 1,218 1,218
Contract Capacity (MW) 0 0 0 0 0
Availability (%) 79.0% 79.0% 79.0% 79.0% 79.0%
Capacity Factor (%)(3) 21.3% 22.7% 22.2% 22.3% 22.0%
Energy Generation (GWh) 2,277 2,419 2,364 2,382 2,352
Contract Energy Sales (GWh) 0 0 0 0 0
Market Energy Sales (GWh) 2,277 2,419 2,364 2,382 2,352
Steam Sales (BBtu) 962 962 962 962 962
Heat Rate (Btu/kWh)(6) 9,656 9,654 9,654 9,652 9,653
Fuel Consumption (BBtu) 21,988 23,352 22,822 22,993 22,701
SO(2) Allowances Purchased (Tons)(7) (20,431) (19,757) (20,015) (19,927) (20,074)
NO(X) Allowances Purchased (Tons)(8) (1,171) (1,152) (1,197) (1,199) (1,194)
COMMODITY PRICES
Contract Electricity Price ($/MWh) 0.00 0.00 0.00 0.00 0.00
Market Electricity Price ($/MWh)(11) 98.20 98.01 101.02 103.32 107.65
Fuel Price ($/MMBtu)(13) 4.59 4.74 4.90 5.06 5.24
Steam Price ($/MMBtu) 12.61 12.91 13.23 13.54 13.86
OPERATING REVENUES ($000)
Contract Electricity Revenue 0 0 0 0 0
Market Electricity Revenue 223,610 237,080 238,831 246,121 253,161
Steam Revenue 12,131 12,417 12,728 13,023 13,332
--------- --------- --------- --------- ---------
Total Operating Revenues 235,741 249,497 251,559 259,144 266,493
OPERATING EXPENSES ($000)(17)
Fuel 101,009 110,731 111,875 116,459 118,848
Emissions Allowances (7,144) (7,134) (7,484) (7,668) (7,886)
Operations & Maintenance 27,410 28,239 28,920 29,697 30,446
Major Maintenance 2,690 2,913 502 1,036 99
Insurance 3,437 3,526 3,618 3,711 3,808
Property Taxes (18) 5,838 5,988 6,145 6,304 6,468
Facility Administration and General 2,876 2,950 3,028 3,107 3,186
Corporate Administration & General 6,863 7,041 7,225 7,412 7,605
--------- --------- --------- --------- ---------
Total Operating Expenses 142,979 154,254 153,829 160,058 162,574
NET OPERATING REVENUES ($000) 92,762 95,243 97,730 99,086 103,919
CAPITAL EXPENDITURES ($000)(20) 10,759 13,856 2,003 4,142 2,771
A-53
Exhibit A-1
Mirant Americas Generation, Inc. Facilities
Projected Operating Results
Base Case
Year Ending December 31, 2001(1) 2002 2003 2004 2005
- ------------------------ ------- ---- ---- ---- ----
MIRANT TEXAS FACILITY
PERFORMANCE
Capacity (MW) 544 544 544 544 544
Contract Capacity (MW) 544 544 544 544 544
Availability (%) 95.0% 95.0% 95.0% 95.0% 95.0%
Capacity Factor (%)(3) 34.0% 43.9% 45.1% 46.8% 49.1%
Energy Generation (GWh) 1,618 2,092 2,151 2,228 2,339
Contract Energy Sales (GWh) 1,618 2,092 2,151 605 261
Market Energy Sales (GWh) 0 0 0 1,623 2,078
Heat Rate (Btu/kWh)(6) 8,727 8,383 8,374 8,327 8,281
Fuel Consumption (BBtu) 14,119 17,535 18,015 18,552 19,372
COMMODITY PRICES
Contract Electricity Price ($/MWh) $ 20.83 20.31 19.90 38.03 36.68
Market Electricity Price ($/MWh)(11) $ 0.00 0.00 0.00 38.67 34.72
Fuel Price ($/MMBtu)(13) $ 0.00 0.00 0.00 2.32 2.45
OPERATING REVENUES ($000)
Contract Electricity Revenue $33,704 42,494 42,818 23,011 9,576
Market Electricity Revenue $ 0 0 0 62,760 72,150
------- --------- --------- --------- ---------
Total Operating Revenues $33,704 42,494 42,818 85,771 81,726
OPERATING EXPENSES ($000)(17)
Fuel $ 0 0 0 43,077 47,515
Operations & Maintenance $ 2,611 3,532 3,654 3,776 3,922
Major Maintenance $ 3,350 4,182 4,320 4,573 4,630
Insurance $ 173 245 251 257 266
Property Taxes (18) $ 1,239 1,756 1,803 1,850 1,898
Facility Administration and General $ 150 212 216 222 227
Corporate Administration & General $ 4 6 6 6 6
------- --------- --------- --------- ---------
Total Operating Expenses $ 7,527 9,933 10,250 53,761 58,464
NET OPERATING REVENUES ($000) $26,177 32,561 32,568 32,010 23,262
CAPITAL EXPENDITURES ($000)(20) $53,222 7,767 8,023 8,494 8,599
STATE LINE FACILITY
PERFORMANCE
Capacity (MW) 515 515 515 515 515
Contract Capacity (MW) 515 515 515 515 515
Availability (%) 80.0% 80.0% 80.0% 80.0% 80.0%
Capacity Factor (%)(3) 47.8% 58.3% 54.5% 54.2% 50.8%
Energy Generation (GWh) 2,157 2,628 2,456 2,444 2,292
Contract Energy Sales (GWh) 2,157 2,628 2,456 2,444 2,292
Market Energy Sales (GWh) 0 0 0 0 0
Heat Rate (Btu/kWh)(6) 10,263 10,137 10,157 10,170 10,183
Fuel Consumption (BBtu) 22,133 26,640 24,950 24,859 23,342
SO(2) Allowances Purchased (Tons)(7) 0 0 0 0 0
NO(X) Allowances Purchased (Tons)(8) 0 0 0 0 0
COMMODITY PRICES
Contract Electricity Price ($/MWh) $ 23.11 19.39 20.95 21.33 22.97
Market Electricity Price ($/MWh)(11) $ 0.00 0.00 0.00 0.00 0.00
Fuel Price ($/MMBtu)(13) $ 0.00 0.00 0.00 0.00 0.00
OPERATING REVENUES ($000)
Contract Electricity Revenue $49,830 50,958 51,452 52,126 52,661
Market Electricity Revenue $ 0 0 0 0 0
------- --------- --------- --------- ---------
Total Operating Revenues $49,830 50,958 51,452 52,126 52,661
OPERATING EXPENSES ($000)(17)
Fuel $ 0 0 0 0 0
Emissions Allowances $ 0 0 0 0 0
Operations & Maintenance $13,770 14,445 14,702 15,076 15,356
Major Maintenance $ 313 526 138 438 614
Insurance $ 980 1,005 1,031 1,058 1,086
Property Taxes (18) $ 4,603 4,723 4,845 4,972 5,101
Facility Administration and General $ 275 282 289 297 305
Corporate Administration & General $ 6,145 6,304 6,468 6,636 6,809
------- --------- --------- --------- ---------
Total Operating Expenses $26,086 27,285 27,473 28,477 29,271
NET OPERATING REVENUES ($000) $23,744 23,673 23,979 23,649 23,390
CAPITAL EXPENDITURES ($000)(20) $ 1,250 2,105 554 1,750 2,456
Year Ending December 31, 2006 2007 2008 2009 2010
- ------------------------ ---- ---- ---- ---- ----
MIRANT TEXAS FACILITY
PERFORMANCE
Capacity (MW) 544 544 544 544 544
Contract Capacity (MW) 0 0 0 0 0
Availability (%) 95.0% 95.0% 95.0% 95.0% 95.0%
Capacity Factor (%)(3) 48.1% 45.9% 44.1% 41.1% 39.0%
Energy Generation (GWh) 2,293 2,185 2,100 1,960 1,860
Contract Energy Sales (GWh) 0 0 0 0 0
Market Energy Sales (GWh) 2,293 2,185 2,100 1,960 1,860
Heat Rate (Btu/kWh)(6) 8,269 8,337 8,372 8,421 8,507
Fuel Consumption (BBtu) 18,962 18,220 17,581 16,508 15,824
COMMODITY PRICES
Contract Electricity Price ($/MWh) 0.00 0.00 0.00 0.00 0.00
Market Electricity Price ($/MWh)(11) 41.78 44.49 46.91 50.17 53.21
Fuel Price ($/MMBtu)(13) 2.99 3.11 3.22 3.34 3.47
OPERATING REVENUES ($000)
Contract Electricity Revenue 0 0 0 0 0
Market Electricity Revenue 95,796 97,225 98,503 98,351 98,979
--------- --------- --------- --------- ---------
Total Operating Revenues 95,796 97,225 98,503 98,351 98,979
OPERATING EXPENSES ($000)(17)
Fuel 56,772 56,651 56,642 55,205 54,844
Operations & Maintenance 3,993 4,055 4,123 4,163 4,234
Major Maintenance 4,774 5,026 4,960 5,022 5,140
Insurance 272 279 286 293 302
Property Taxes (18) 1,946 1,998 2,050 2,102 2,158
Facility Administration and General 233 239 246 254 260
Corporate Administration & General 7 7 7 7 7
--------- --------- --------- --------- ---------
Total Operating Expenses 67,997 68,255 68,314 67,046 66,945
NET OPERATING REVENUES ($000) 27,799 28,970 30,189 31,305 32,034
CAPITAL EXPENDITURES ($000)(20) 8,866 9,335 9,212 9,325 9,543
STATE LINE FACILITY
PERFORMANCE
Capacity (MW) 515 515 515 515 515
Contract Capacity (MW) 515 515 515 515 515
Availability (%) 80.0% 80.0% 80.0% 80.0% 80.0%
Capacity Factor (%)(3) 51.9% 52.6% 52.4% 54.3% 56.4%
Energy Generation (GWh) 2,339 2,371 2,366 2,451 2,544
Contract Energy Sales (GWh) 2,339 2,371 2,366 2,451 2,544
Market Energy Sales (GWh) 0 0 0 0 0
Heat Rate (Btu/kWh)(6) 10,185 10,179 10,160 10,155 10,123
Fuel Consumption (BBtu) 23,826 24,137 24,036 24,894 25,755
SO(2) Allowances Purchased (Tons)(7) 0 0 0 0 0
NO(X) Allowances Purchased (Tons)(8) 0 0 0 0 0
COMMODITY PRICES
Contract Electricity Price ($/MWh) 22.84 22.86 23.23 22.78 22.31
Market Electricity Price ($/MWh)(11) 0.00 0.00 0.00 0.00 0.00
Fuel Price ($/MMBtu)(13) 0.00 0.00 0.00 0.00 0.00
OPERATING REVENUES ($000)
Contract Electricity Revenue 53,434 54,211 54,963 55,845 56,763
Market Electricity Revenue 0 0 0 0 0
--------- --------- --------- --------- ---------
Total Operating Revenues 53,434 54,211 54,963 55,845 56,763
OPERATING EXPENSES ($000)(17)
Fuel 0 0 0 0 0
Emissions Allowances 0 0 0 0 0
Operations & Maintenance 15,792 16,226 16,642 17,144 17,668
Major Maintenance 665 721 783 848 920
Insurance 1,113 1,142 1,172 1,203 1,234
Property Taxes (18) 5,234 5,369 5,508 5,652 5,799
Facility Administration and General 313 320 330 338 347
Corporate Administration & General 6,987 7,168 7,354 7,546 7,741
--------- --------- --------- --------- ---------
Total Operating Expenses 30,104 30,946 31,789 32,731 33,709
NET OPERATING REVENUES ($000) 23,330 23,265 23,174 23,114 23,054
CAPITAL EXPENDITURES ($000)(20) 2,663 2,888 3,130 3,394 3,680
A-54
Exhibit A-1
Mirant Americas Generation, Inc. Facilities
Projected Operating Results
Base Case
Year Ending December 31, 2011 2012 2013 2014 2015
- ------------------------ ---- ---- ---- ---- ----
MIRANT TEXAS FACILITY
PERFORMANCE
Capacity (MW) 544 544 544 544 544
Contract Capacity (MW) 0 0 0 0 0
Availability (%) 95.0% 95.0% 95.0% 95.0% 95.0%
Capacity Factor (%)(3) 37.1% 34.4% 31.6% 30.5% 27.4%
Energy Generation (GWh) 1,767 1,639 1,508 1,456 1,304
Contract Energy Sales (GWh) 0 0 0 0 0
Market Energy Sales (GWh) 1,767 1,639 1,508 1,456 1,304
Heat Rate (Btu/kWh)(6) 8,540 8,667 8,557 8,334 8,317
Fuel Consumption (BBtu) 15,087 14,208 12,906 12,133 10,849
COMMODITY PRICES
Contract Electricity Price ($/MWh) $ 0.00 0.00 0.00 0.00 0.00
Market Electricity Price ($/MWh)(11) $ 56.36 60.67 65.64 67.98 72.83
Fuel Price ($/MMBtu)(13) $ 3.58 3.69 3.80 3.92 4.03
OPERATING REVENUES ($000)
Contract Electricity Revenue $ 0 0 0 0 0
Market Electricity Revenue $99,559 99,461 98,997 98,965 95,008
------- --------- --------- --------- ---------
Total Operating Revenues $99,559 99,461 98,997 98,965 95,008
OPERATING EXPENSES ($000)(17)
Fuel $54,013 52,405 48,988 47,521 43,727
Operations & Maintenance $ 4,289 4,341 4,348 4,375 4,395
Major Maintenance $ 4,698 5,405 5,583 5,912 5,985
Insurance $ 309 316 326 334 343
Property Taxes (18) $ 2,213 2,271 2,331 2,391 2,452
Facility Administration and General $ 267 273 280 287 296
Corporate Administration & General $ 7 7 7 8 8
------- --------- --------- --------- ---------
Total Operating Expenses $65,796 65,018 61,863 60,828 57,206
NET OPERATING REVENUES ($000) $33,763 34,443 37,134 38,137 37,802
CAPITAL EXPENDITURES ($000)(20) $ 9,557 9,809 8,869 7,726 7,116
STATE LINE FACILITY
PERFORMANCE
Capacity (MW) 515 515 515 515 515
Contract Capacity (MW) 515 515 0 0 0
Availability (%) 80.0% 80.0% 80.0% 80.0% 80.0%
Capacity Factor (%)(3) 58.2% 59.2% 61.0% 60.6% 62.6%
Energy Generation (GWh) 2,627 2,671 2,753 2,734 2,823
Contract Energy Sales (GWh) 2,627 2,671 0 0 0
Market Energy Sales (GWh) 0 0 2,753 2,734 2,823
Heat Rate (Btu/kWh)(6) 10,121 10,089 10,082 10,078 10,087
Fuel Consumption (BBtu) 26,584 26,944 27,759 27,554 28,480
SO(2) Allowances Purchased (Tons)(7) 0 0 10,354 10,282 10,641
NO(X) Allowances Purchased (Tons)(8) 0 0 756 744 800
COMMODITY PRICES
Contract Electricity Price ($/MWh) $ 21.97 21.94 0.00 0.00 0.00
Market Electricity Price ($/MWh)(11) $ 0.00 0.00 48.00 49.48 49.90
Fuel Price ($/MMBtu)(13) $ 0.00 0.00 1.24 1.25 1.27
OPERATING REVENUES ($000)
Contract Electricity Revenue $57,697 58,605 0 0 0
Market Electricity Revenue $ 0 0 132,163 135,268 140,891
------- --------- --------- --------- ---------
Total Operating Revenues $57,697 58,605 132,163 135,268 140,891
OPERATING EXPENSES ($000)(17)
Fuel $ 0 0 34,460 34,572 36,108
Emissions Allowances $ 0 0 3,693 3,746 4,045
Operations & Maintenance $18,198 20,699 21,312 21,848 22,500
Major Maintenance $ 404 680 179 565 794
Insurance $ 1,267 1,299 1,333 1,367 1,404
Property Taxes (18) $ 5,950 6,104 6,264 6,426 6,593
Facility Administration and General $ 355 365 374 384 394
Corporate Administration & General $ 7,943 8,150 8,362 8,578 8,802
------- --------- --------- --------- ---------
Total Operating Expenses $34,117 37,297 75,977 77,486 80,640
NET OPERATING REVENUES ($000) $23,580 21,308 56,186 57,782 60,251
CAPITAL EXPENDITURES ($000)(20) $17,774 19,300 716 2,262 10,337
Year Ending December 31, 2016 2017 2018 2019 2020
- ------------------------ ---- ---- ---- ---- ----
MIRANT TEXAS FACILITY
PERFORMANCE
Capacity (MW) 544 544 544 544 544
Contract Capacity (MW) 0 0 0 0 0
Availability (%) 95.0% 95.0% 95.0% 95.0% 95.0%
Capacity Factor (%)(3) 25.9% 25.2% 23.5% 22.2% 21.1%
Energy Generation (GWh) 1,235 1,201 1,120 1,057 1,008
Contract Energy Sales (GWh) 0 0 0 0 0
Market Energy Sales (GWh) 1,235 1,201 1,120 1,057 1,008
Heat Rate (Btu/kWh)(6) 8,205 8,252 8,230 8,251 8,219
Fuel Consumption (BBtu) 10,133 9,914 9,215 8,717 8,282
COMMODITY PRICES
Contract Electricity Price ($/MWh) 0.00 0.00 0.00 0.00 0.00
Market Electricity Price ($/MWh)(11) 75.96 79.37 84.06 89.11 92.93
Fuel Price ($/MMBtu)(13) 4.15 4.28 4.41 4.54 4.67
OPERATING REVENUES ($000)
Contract Electricity Revenue 0 0 0 0 0
Market Electricity Revenue 93,812 95,357 94,128 94,149 93,642
--------- --------- --------- --------- ---------
Total Operating Revenues 93,812 95,357 94,128 94,149 93,642
OPERATING EXPENSES ($000)(17)
Fuel 42,045 42,410 40,631 39,557 38,696
Operations & Maintenance 4,444 4,540 4,601 4,679 4,759
Major Maintenance 6,170 6,497 6,412 6,491 6,643
Insurance 351 361 370 380 388
Property Taxes (18) 2,516 2,582 2,648 2,718 2,789
Facility Administration and General 303 310 319 327 335
Corporate Administration & General 8 10 10 10 11
--------- --------- --------- --------- ---------
Total Operating Expenses 55,837 56,710 54,991 54,162 53,621
NET OPERATING REVENUES ($000) 37,975 38,647 39,137 39,987 40,021
CAPITAL EXPENDITURES ($000)(20) 6,312 6,445 6,161 6,067 5,985
STATE LINE FACILITY
PERFORMANCE
Capacity (MW) 515 515 515 515 515
Contract Capacity (MW) 0 0 0 0 0
Availability (%) 80.0% 80.0% 80.0% 80.0% 80.0%
Capacity Factor (%)(3) 63.0% 62.2% 62.6% 62.5% 64.2%
Energy Generation (GWh) 2,842 2,806 2,825 2,818 2,897
Contract Energy Sales (GWh) 0 0 0 0 0
Market Energy Sales (GWh) 2,842 2,806 2,825 2,818 2,897
Heat Rate (Btu/kWh)(6) 10,077 10,081 10,072 10,060 10,061
Fuel Consumption (BBtu) 28,641 28,291 28,455 28,351 29,147
SO(2) Allowances Purchased (Tons)(7) 10,702 10,556 10,588 10,555 10,859
NO(X) Allowances Purchased (Tons)(8) 805 783 791 818 845
COMMODITY PRICES
Contract Electricity Price ($/MWh) 0.00 0.00 0.00 0.00 0.00
Market Electricity Price ($/MWh)(11) 51.08 53.43 54.78 56.58 57.53
Fuel Price ($/MMBtu)(13) 1.28 1.30 1.31 1.33 1.35
OPERATING REVENUES ($000)
Contract Electricity Revenue 0 0 0 0 0
Market Electricity Revenue 145,171 149,936 154,755 159,455 166,670
--------- --------- --------- --------- ---------
Total Operating Revenues 145,171 149,936 154,755 159,455 166,670
OPERATING EXPENSES ($000)(17)
Fuel 36,719 36,720 37,404 37,688 39,257
Emissions Allowances 4,174 4,198 4,335 4,506 4,763
Operations & Maintenance 23,104 23,670 24,303 24,930 25,661
Major Maintenance 861 933 1,012 1,097 1,189
Insurance 1,439 1,477 1,516 1,555 1,595
Property Taxes (18) 6,765 6,941 7,120 7,306 7,496
Facility Administration and General 405 415 426 436 448
Corporate Administration & General 9,031 9,265 9,506 9,753 10,007
--------- --------- --------- --------- ---------
Total Operating Expenses 82,498 83,619 85,622 87,271 90,416
NET OPERATING REVENUES ($000) 62,673 66,317 69,133 72,184 76,254
CAPITAL EXPENDITURES ($000)(20) 3,442 3,732 11,782 4,388 4,757
A-55
Exhibit A-1
Mirant Americas Generation, Inc. Facilities
Projected Operating Results
Base Case
Year Ending December 31, 2001(1) 2002 2003 2004 2005
- ------------------------ ------- ---- ---- ---- ----
MIRANT WISCONSIN FACILITY
PERFORMANCE
Capacity (MW) 306 306 306 306 306
Contract Capacity (MW) 302 302 302 302 302
Availability (%) 96.0% 96.0% 96.0% 96.0% 96.0%
Capacity Factor (%)(3) 2.3% 1.7% 2.1% 3.4% 7.3%
Energy Generation (GWh) 61 45 55 92 195
Contract Energy Sales (GWh) 61 45 54 91 192
Market Energy Sales (GWh) 1 1 1 1 2
Heat Rate (Btu/kWh)(6) 11,438 11,431 11,353 11,441 11,393
Fuel Consumption (BBtu) 702 519 624 1,053 2,217
COMMODITY PRICES
Contract Capacity Price ($/kW-yr) $ 46.98 46.98 46.98 46.98 46.98
Market Capacity Price ($/kW-yr)(11) $ 19.94 14.01 19.40 23.71 37.19
Market Energy Price ($/MWh)(11) $ 75.24 67.20 61.51 52.86 46.19
Fuel Price ($/MMBtu)(13) $ 5.12 4.65 4.21 3.52 2.84
OPERATING REVENUES ($000)
Contract Electricity Revenue $14,322 14,475 14,615 14,849 15,436
Market Electricity Revenue $ 130 89 113 147 247
------- --------- --------- --------- ---------
Total Operating Revenues $14,452 14,564 14,728 14,996 15,683
OPERATING EXPENSES ($000)(17)
Fuel $ 44 29 32 45 76
Operations & Maintenance $ 826 809 853 971 1,263
Major Maintenance $ 118 107 108 134 194
Insurance $ 259 266 272 280 287
Gross Receipts Tax (18) $ 461 465 470 478 500
Facility Administration and General $ 240 246 252 259 266
Corporate Administration & General $ 116 119 122 125 128
------- --------- --------- --------- ---------
Total Operating Expenses $ 2,064 2,041 2,109 2,292 2,714
NET OPERATING REVENUES ($000) $12,388 12,523 12,619 12,704 12,969
CAPITAL EXPENDITURES ($000)(20) $ 218 199 201 249 360
Year Ending December 31, 2006 2007 2008 2009 2010
- ------------------------ ---- ---- ---- ---- ----
MIRANT WISCONSIN FACILITY
PERFORMANCE
Capacity (MW) 306 306 306 306 306
Contract Capacity (MW) 302 302 151 0 0
Availability (%) 96.0% 96.0% 96.0% 96.0% 96.0%
Capacity Factor (%)(3) 6.9% 7.0% 5.6% 5.4% 3.0%
Energy Generation (GWh) 184 189 151 144 80
Contract Energy Sales (GWh) 182 187 37 0 0
Market Energy Sales (GWh) 2 2 114 144 80
Heat Rate (Btu/kWh)(6) 11,434 11,351 11,376 11,362 11,284
Fuel Consumption (BBtu) 2,103 2,145 1,716 1,631 903
COMMODITY PRICES
Contract Capacity Price ($/kW-yr) 46.98 46.98 46.98 0.00 0.00
Market Capacity Price ($/kW-yr)(11) 40.42 63.86 71.19 75.62 76.95
Market Energy Price ($/MWh)(11) 49.31 51.05 52.55 53.74 53.83
Fuel Price ($/MMBtu)(13) 2.96 3.08 3.18 3.29 3.34
OPERATING REVENUES ($000)
Contract Electricity Revenue 17,981 19,154 8,571 0 0
Market Electricity Revenue 260 354 16,993 30,853 27,855
--------- --------- --------- --------- ---------
Total Operating Revenues 18,241 19,508 25,564 30,853 27,855
OPERATING EXPENSES ($000)(17)
Fuel 76 80 4,105 5,358 3,017
Operations & Maintenance 1,269 1,314 1,241 1,253 1,096
Major Maintenance 215 197 178 176 136
Insurance 294 302 310 318 326
Gross Receipts Tax (18) 582 622 815 984 889
Facility Administration and General 273 280 287 294 302
Corporate Administration & General 132 135 138 142 146
--------- --------- --------- --------- ---------
Total Operating Expenses 2,841 2,930 7,074 8,525 5,912
NET OPERATING REVENUES ($000) 15,400 16,578 18,490 22,328 21,943
CAPITAL EXPENDITURES ($000)(20) 399 365 331 327 253
A-56
Exhibit A-1
Mirant Americas Generation, Inc. Facilities
Projected Operating Results
Base Case
Year Ending December 31, 2011 2012 2013 2014 2015
- ------------------------ ---- ---- ---- ---- ----
MIRANT WISCONSIN FACILITY
PERFORMANCE
Capacity (MW) 306 306 306 306 306
Contract Capacity (MW) 0 0 0 0 0
Availability (%) 96.0% 96.0% 96.0% 96.0% 96.0%
Capacity Factor (%)(3) 2.1% 1.5% 0.8% 1.4% 1.3%
Energy Generation (GWh) 56 40 20 37 34
Contract Energy Sales (GWh) 0 0 0 0 0
Market Energy Sales (GWh) 56 40 20 37 34
Heat Rate (Btu/kWh)(6) 11,298 11,571 11,304 11,506 11,462
Fuel Consumption (BBtu) 629 464 230 428 387
COMMODITY PRICES
Contract Capacity Price ($/kW-yr) $ 0.00 0.00 0.00 0.00 0.00
Market Capacity Price ($/kW-yr)(11) $ 78.31 79.70 81.11 81.83 83.08
Market Energy Price ($/MWh)(11) $ 54.10 55.44 55.19 59.38 59.89
Fuel Price ($/MMBtu)(13) $ 3.43 3.50 3.55 3.66 3.79
OPERATING REVENUES ($000)
Contract Electricity Revenue $ 0 0 0 0 0
Market Electricity Revenue $26,975 26,610 25,942 27,250 27,443
------- --------- --------- --------- ---------
Total Operating Revenues $26,975 26,610 25,942 27,250 27,443
OPERATING EXPENSES ($000)(17)
Fuel $ 2,158 1,622 817 1,566 1,468
Operations & Maintenance $ 1,050 1,029 992 1,075 1,089
Major Maintenance $ 124 140 114 135 135
Insurance $ 335 343 352 361 371
Gross Receipts Tax (18) $ 861 849 828 869 875
Facility Administration and General $ 310 318 326 335 343
Corporate Administration & General $ 150 153 157 162 166
------- --------- --------- --------- ---------
Total Operating Expenses $ 4,988 4,454 3,586 4,503 4,447
NET OPERATING REVENUES ($000) $21,987 22,156 22,356 22,747 22,996
CAPITAL EXPENDITURES ($000)(20) $ 229 260 211 251 250
Year Ending December 31, 2016 2017 2018 2019 2020
- ------------------------ ---- ---- ---- ---- ----
MIRANT WISCONSIN FACILITY
PERFORMANCE
Capacity (MW) 306 306 306 306 306
Contract Capacity (MW) 0 0 0 0 0
Availability (%) 96.0% 96.0% 96.0% 96.0% 96.0%
Capacity Factor (%)(3) 1.3% 0.7% 0.7% 0.7% 0.5%
Energy Generation (GWh) 34 18 19 19 14
Contract Energy Sales (GWh) 0 0 0 0 0
Market Energy Sales (GWh) 34 18 19 19 14
Heat Rate (Btu/kWh)(6) 11,478 11,454 11,551 11,402 11,377
Fuel Consumption (BBtu) 391 201 215 215 163
COMMODITY PRICES
Contract Capacity Price ($/kW-yr) 0.00 0.00 0.00 0.00 0.00
Market Capacity Price ($/kW-yr)(11) 82.68 85.88 84.98 85.79 88.35
Market Energy Price ($/MWh)(11) 56.86 61.09 62.86 68.99 68.05
Fuel Price ($/MMBtu)(13) 3.90 4.01 4.14 4.43 4.38
OPERATING REVENUES ($000)
Contract Electricity Revenue 0 0 0 0 0
Market Electricity Revenue 27,236 27,352 27,174 27,554 28,009
--------- --------- --------- --------- ---------
Total Operating Revenues 27,236 27,352 27,174 27,554 28,009
OPERATING EXPENSES ($000)(17)
Fuel 1,523 807 891 953 715
Operations & Maintenance 1,119 1,089 1,123 1,152 1,165
Major Maintenance 138 131 140 138 135
Insurance 380 390 400 411 421
Gross Receipts Tax (18) 869 873 867 879 893
Facility Administration and General 352 361 371 381 390
Corporate Administration & General 170 174 179 184 188
--------- --------- --------- --------- ---------
Total Operating Expenses 4,551 3,825 3,971 4,098 3,907
NET OPERATING REVENUES ($000) 22,685 23,527 23,203 23,456 24,102
CAPITAL EXPENDITURES ($000)(20) 257 243 259 256 251
A-57
Footnotes to Exhibit A-1
1. Assumes all 2001 net operating revenues from the Mirant Generation
Facilities will be available to pay interest on the Notes.
2. Represents average annual capacity based on historical data provided by
Mirant Generation, with the exception of the additional capacity of Bosque
Unit 3 assumed to begin commercial operation on June 1, 2001.
3. Capacity factors represent weighted average capacity factors as projected
by PA Consulting.
4. Includes contract sales from the State Line, Neenah, Canal, and Bosque
Facilities.
5. Includes steam sales from the Kendall Facility.
6. Weighted average heat rate calculated as the sum of total fuel consumed
divided by the energy generated.
7. SO(2) allowances that Mirant Generation is projected to purchase or sell
based on assumed emission rates as estimated by Mirant Generation and
capacity factors as projected by PA Consulting.
8. NO(X) allowances that Mirant Generation is projected to purchase or sell
based on assumed emission rates as estimated by Mirant Generation and
ozone season generation as projected by PA Consulting. Assumes additional
environmental capital expenditures that will reduce NO(X) emissions as
projected by Mirant Generation.
9. Rate of change in general inflation assumed to be 2.6 percent per year,
based on a March 10, 2001 projection prepared by Blue Chip Economic
Indicators.
10. Weighted average contract electricity price calculated as the sum of the
contract capacity and energy revenues of the State Line, Neenah, Canal,
and Bosque Facilities divided by the total contract energy sales.
11. As projected by PA Consulting. Weighted average market electricity price
calculated as the sum of the market capacity and energy revenues divided
by the total market energy sales as projected by PA Consulting.
12. Steam price pursuant to the Kendall Steam Agreement.
13. As projected by PA Consulting. Weighted average fuel price calculated as
sum of the fuel expenses divided by the total fuel consumed.
14. Assumed to be $150 per ton in 2001 dollars and to escalate thereafter at
the rate of inflation.
15. Assumed to be $1,000 per ton through 2002, $2,300 per ton in 2003, $2,000
per ton in 2004, and $1,700 per ton in 2005. Assumed to escalate
thereafter at the rate of inflation.
16. Represents RMR payments as estimated by PA Consulting. The terms of the
RMR Payments are currently in dispute. PA Consulting has assumed that the
Mirant California Facilities will receive a portion of the potential RMR
Payments through 2008. For additional discussion regarding the RMR
Payments, please refer to the PA Consulting report and the section of the
Offering Circular entitled "Our Business - Legal Proceedings".
17. Non-fuel operating expenses as estimated by Mirant Generation. Assumed to
increase at the rate of inflation except for property taxes, which have
been assumed to remain constant.
18. Includes property taxes and insurance estimated by Mirant Generation
through 2001 and assumed to escalate at the rate of inflation thereafter.
Property tax estimate for Chalk Point, Dickerson, and Morgantown
Facilities reflects legislation providing exemptions for machinery used to
generate electricity.
19. Represents cash lease payments related to the Mid-Atlantic Facilities,
lease payments on the SMECO CT, and other expenses at the Mirant
California Facilities.
20. Includes capital expenditures and portion of major maintenance assumed by
Mirant Generation to be capitalized. The 2001 estimate for Mirant Texas
also includes the estimated remaining construction cost of Bosque Unit 3.
21. Certain of the capital expenditures identified by Mirant Generation have
been assumed to be funded through the use of a revolving credit facility.
22. Interest payments represent interest on all Mirant Generation debt,
including previously incurred debt that is assumed to be refinanced by the
end of 2001 and 2003. Interest payments on the principal amount of the
Notes and the other Mirant Generation debt has been assumed at interest
rates as estimated by Representative of the Initial Purchasers, resulting
in a weighted average interest rate ranging over the term of the Notes
from approximately 7.1 to 8.2 percent per year. The scheduled amortization
of the Series A and Series B Notes is assumed to consist of single
payments due on April 15, 2006 and April 15, 2011, respectively. Mirant
Generation has assumed that the Notes will be refinanced upon maturity at
the same principal amounts and interest rates. No additional costs of
issuance have been included. We have also included interest on the
revolving credit facility assumed to be used to fund certain of the
capital expenditures. Interest has been included at the same rate as the
Series B Notes, as estimated by Representative of the Initial Purchasers.
No principal amortization of the Mirant Generation debt has been assumed.
23. Interest coverage is equal to the cash available for debt service divided
by annual interest on all Mirant Generation debt, including the interest
on the Notes and the revolving credit facility assumed to be used to fund
certain of the capital expenditures, assuming no principal amortization.
24. Average interest coverage is equal to the total cash available for debt
service over the term of the Notes divided by the total interest payments
over the term of the Notes, including the interest on the Notes and the
revolving credit facility assumed to be used to fund certain of the
capital expenditures, assuming no principal amortization.
A-58
Footnotes to Exhibit A-1
(continued)
25. Assumed to be the equivalent of Earnings Before Interest Taxes,
Depreciation and Amortization ("EBITDA"), although it does not necessarily
conform to Generally Accepted Accounting Principles and may not reflect
any adjustments that could result therefrom. Excludes capital expenditures
and is adjusted to reflect book lease expense as reported by Mirant
Generation.
26. Excludes interest on the revolving credit facility assumed to be used to
fund certain of the capital expenditures.
27. EBITDA to interest coverage ratio is equal to EBITDA divided by the annual
interest on all Mirant Generation debt except the interest on the
revolving credit facility assumed to be used to fund certain capital
expenditures.
28. Average EBITDA to interest coverage ratio is equal to the total EBITDA
over the term of the Notes divided by the total interest payments over the
term of the Notes, excluding the interest on the revolving credit facility
assumed to be used to fund certain of the capital expenditures.
A-59
Exhibit A-2
Mirant Americas Generation, Inc. Facilities
Projected Operating Results
Sensitivity A - Low Fuel Market Price Scenario
Year Ending December 31, 2001(1) 2002 2003 2004 2005
- ------------------------ ------- ---- ---- ---- ----
CONSOLIDATED
PERFORMANCE
Annual Average Capacity (MW)(2) 12,587 12,587 12,587 12,587 12,587
Average Capacity Factor (%)(3) 49.8% 46.3% 43.8% 39.1% 37.6%
Contract Energy Sales (GWh)(4) 6,477 6,748 4,644 3,003 2,633
Market Energy Sales (GWh)(4) 48,383 44,287 43,647 40,080 38,866
---------- ----------- ----------- ----------- -----------
Total Energy Sales (GWh) 54,859 51,035 48,291 43,082 41,499
Total Steam Sales (MMBtu)(5) 962 962 962 962 962
Fuel Consumption (BBtu) 541,076 500,539 471,486 420,491 404,368
Average Net Heat Rate (Btu/kWh)(6) 9,863 9,808 9,763 9,760 9,744
SO(2) Allowances Purchased (Tons)(7) 72,400 63,110 52,692 28,182 28,662
NO(X) Allowances Purchased (Tons)(8) 6,243 (306) 4,984 3,442 2,850
COMMODITY PRICES
General Inflation (%)(9) 2.60 2.60 2.60 2.60 2.60
Contract Electricity Price ($/MWh)(10) $ 41.27 34.54 29.75 36.19 30.92
Market Electricity Price ($/MWh)(11) $ 64.74 57.24 54.23 49.31 49.44
Steam Price ($/MMBtu)(12) $ 12.23 11.42 11.43 9.02 9.12
Fuel Price ($/MMBtu)(13) $ 3.13 2.72 2.55 2.33 2.18
SO(2) Allowances ($/Ton)(14) $ 150 154 158 162 166
NO(X) Allowances ($/Ton)(15) $ 1,000 1,000 2,300 2,000 1,700
OPERATING REVENUES ($000)
Contract Electricity Revenues
Mirant California (16) $ 26,057 25,085 29,123 18,830 2,249
Mirant New England $ 143,375 100,152 0 0 0
Mirant Texas $ 33,723 42,465 42,961 22,979 9,547
State Line $ 49,836 50,951 51,422 51,955 52,495
Mirant Wisconsin $ 14,323 14,471 14,625 14,891 17,098
Market Electricity Revenues
Mirant Mid-Atlantic $1,393,800 1,250,486 1,094,851 989,593 1,010,872
Mirant California $1,165,222 768,594 771,061 545,603 451,073
Mirant New York $ 437,213 374,489 315,447 251,721 250,031
Mirant New England $ 135,780 141,291 185,287 131,189 142,727
Mirant Texas $ 0 0 0 57,925 66,756
State Line $ 0 0 0 0 0
Mirant Wisconsin $ 156 105 115 180 286
Steam Revenues $ 11,761 10,986 10,992 8,679 8,775
---------- ----------- ----------- ----------- -----------
Total Operating Revenues $3,411,246 2,779,075 2,515,884 2,093,545 2,011,909
OPERATING EXPENSES ($000)(17)
Fuel
Mirant Mid-Atlantic $ 516,741 473,082 416,913 382,006 386,807
Mirant California $ 702,543 481,804 470,613 334,518 225,194
Mirant New York $ 261,702 229,129 176,829 143,207 143,039
Mirant New England $ 210,076 177,763 136,234 79,567 83,813
Mirant Texas $ 0 0 0 39,146 43,017
State Line $ 0 0 0 0 0
Mirant Wisconsin $ 39 28 33 47 83
Emissions Allowances $ 17,091 9,397 19,752 11,405 9,540
Operations & Maintenance $ 226,043 218,621 216,821 214,996 219,440
Major Maintenance $ 17,119 17,908 17,615 15,929 16,085
Insurance $ 15,964 16,448 16,872 17,308 17,763
Property and Gross Receipts Taxes (18) $ 83,327 85,201 86,634 88,117 89,694
Facility Administration and General $ 6,075 6,298 6,457 6,622 6,795
Corporate Administration and General $ 45,274 46,455 47,661 48,897 50,173
Other (19) $ 227,443 201,538 182,632 153,659 149,057
---------- ----------- ----------- ----------- -----------
Total Operating Expenses $2,329,437 1,963,672 1,795,066 1,535,424 1,440,500
NET OPERATING REVENUES ($000) $1,081,810 815,403 720,818 558,121 571,409
CAPITAL EXPENDITURES (20) $ 163,864 111,649 149,419 85,442 85,635
FUNDS FROM CAP EX FACILITY (21) $ 0 0 0 58,131 85,630
CASH AVAILABLE FOR DEBT SERVICE $ 917,945 703,754 571,399 530,810 571,404
ANNUAL INTEREST ($000)(22) $ 175,350 200,010 200,010 209,767 217,147
ANNUAL INTEREST COVERAGE (23) 5.23 3.52 2.86 2.53 2.63
2001-10 AVG INTEREST COVERAGE (24) 2.97
EBITDA ADJUSTMENTS TO
NET OPERATING REVENUE:
Plus: Cash-to-Book Lease Adjustment $ 99,554 73,957 54,209 24,989 19,494
EBITDA (25) $1,181,364 889,360 775,027 583,110 590,903
INTEREST W/O CAP EX FACILITY (26) $ 175,350 200,010 200,010 204,758 204,758
EBITDA/INTEREST COVERAGE (27) 6.74 4.45 3.87 2.85 2.89
2001-10 AVG EBITDA/INT COVERAGE (28) 3.76
Year Ending December 31, 2006 2007 2008 2009 2010
- ------------------------ ---- ---- ---- ---- ----
CONSOLIDATED
PERFORMANCE
Annual Average Capacity (MW)(2) 12,587 12,587 12,587 12,587 12,587
Average Capacity Factor (%)(3) 37.7% 37.3% 36.4% 36.1% 36.1%
Contract Energy Sales (GWh)(4) 2,516 2,511 2,328 2,347 2,398
Market Energy Sales (GWh)(4) 39,031 38,620 37,821 37,434 37,354
----------- ----------- ----------- ----------- -----------
Total Energy Sales (GWh) 41,547 41,131 40,149 39,781 39,752
Total Steam Sales (MMBtu)(5) 962 962 962 962 962
Fuel Consumption (BBtu) 404,510 401,054 390,838 387,563 387,395
Average Net Heat Rate (Btu/kWh)(6) 9,736 9,751 9,735 9,742 9,745
SO(2) Allowances Purchased (Tons)(7) 34,414 32,460 33,345 34,104 44,439
NO(X) Allowances Purchased (Tons)(8) 786 139 (2,212) (2,171) (2,052)
COMMODITY PRICES
General Inflation (%)(9) 2.60 2.60 2.60 2.60 2.60
Contract Electricity Price ($/MWh)(10) 28.71 29.59 29.15 23.74 23.59
Market Electricity Price ($/MWh)(11) 51.30 54.09 55.67 58.27 60.29
Steam Price ($/MMBtu)(12) 9.39 9.59 9.86 10.08 10.33
Fuel Price ($/MMBtu)(13) 2.23 2.29 2.34 2.41 2.47
SO(2) Allowances ($/Ton)(14) 171 175 180 184 189
NO(X) Allowances ($/Ton)(15) 1,744 1,790 1,836 1,884 1,933
OPERATING REVENUES ($000)
Contract Electricity Revenues
Mirant California (16) 311 258 258 0 0
Mirant New England 0 0 0 0 0
Mirant Texas 0 0 0 0 0
State Line 53,376 54,105 54,864 55,717 56,579
Mirant Wisconsin 18,536 19,934 12,743 0 0
Market Electricity Revenues
Mirant Mid-Atlantic 1,083,049 1,111,416 1,111,917 1,127,862 1,166,846
Mirant California 451,345 506,391 495,543 484,699 499,109
Mirant New York 230,700 236,122 235,776 247,443 273,933
Mirant New England 145,599 141,648 150,662 195,499 189,594
Mirant Texas 91,419 92,895 94,380 94,247 94,748
State Line 0 0 0 0 0
Mirant Wisconsin 292 364 17,157 31,588 27,997
Steam Revenues 9,031 9,226 9,486 9,697 9,936
----------- ----------- ----------- ----------- -----------
Total Operating Revenues 2,083,658 2,172,359 2,182,786 2,246,752 2,318,742
OPERATING EXPENSES ($000)(17)
Fuel
Mirant Mid-Atlantic 408,002 412,141 416,174 427,053 442,703
Mirant California 229,547 256,726 245,779 237,171 249,629
Mirant New York 128,600 124,467 119,752 124,071 128,288
Mirant New England 84,535 72,871 77,831 89,418 82,100
Mirant Texas 51,178 51,194 51,393 50,005 49,629
State Line 0 0 0 0 0
Mirant Wisconsin 84 88 4,444 5,577 3,454
Emissions Allowances 7,174 5,866 1,869 2,137 4,393
Operations & Maintenance 226,003 232,609 238,059 243,779 249,753
Major Maintenance 18,079 19,096 16,900 16,989 17,066
Insurance 18,225 18,695 19,184 19,684 20,200
Property and Gross Receipts Taxes (18) 91,284 92,916 94,847 96,572 98,169
Facility Administration and General 6,973 7,154 7,338 7,535 7,733
Corporate Administration and General 51,479 52,817 54,187 55,595 57,040
Other (19) 139,517 147,208 156,452 178,942 177,756
----------- ----------- ----------- ----------- -----------
Total Operating Expenses 1,460,679 1,493,848 1,504,209 1,554,528 1,587,913
NET OPERATING REVENUES ($000) 622,979 678,511 678,576 692,224 730,829
CAPITAL EXPENDITURES (20) 112,269 112,107 110,571 71,711 68,335
FUNDS FROM CAP EX FACILITY (21) 80,916 0 0 0 0
CASH AVAILABLE FOR DEBT SERVICE 591,626 566,404 568,006 620,513 662,494
ANNUAL INTEREST ($000)(22) 224,119 224,119 224,119 224,119 224,119
ANNUAL INTEREST COVERAGE (23) 2.64 2.53 2.53 2.77 2.96
2001-10 AVG INTEREST COVERAGE (24)
EBITDA ADJUSTMENTS TO
NET OPERATING REVENUE:
Plus: Cash-to-Book Lease Adjustment 9,159 15,836 24,212 45,829 43,709
EBITDA (25) 632,138 694,347 702,788 738,053 774,538
INTEREST W/O CAP EX FACILITY (26) 204,758 204,758 204,758 204,758 204,758
EBITDA/INTEREST COVERAGE (27) 3.09 3.39 3.43 3.60 3.78
2001-10 AVG EBITDA/INT COVERAGE (28)
A-60
Exhibit A-2
Mirant Americas Generation, Inc. Facilities
Projected Operating Results
Sensitivity A - Low Fuel Market Price Scenario
Year Ending December 31, 2011 2012 2013 2014 2015
- ------------------------ ---- ---- ---- ---- ----
CONSOLIDATED
PERFORMANCE
Annual Average Capacity (MW)(2) 12,587 12,587 12,587 12,587 12,587
Average Capacity Factor (%)(3) 37.3% 36.3% 36.4% 36.1% 35.5%
Contract Energy Sales (GWh)(4) 2,444 2,478 0 0 0
Market Energy Sales (GWh)(4) 38,649 37,553 40,164 39,819 39,093
---------- ----------- ----------- ----------- -----------
Total Energy Sales (GWh) 41,092 40,031 40,164 39,819 39,093
Total Steam Sales (MMBtu)(5) 962 962 962 962 962
Fuel Consumption (BBtu) 401,272 390,780 392,147 388,529 381,176
Average Net Heat Rate (Btu/kWh)(6) 9,765 9,762 9,764 9,757 9,751
SO(2) Allowances Purchased (Tons)(7) 46,148 45,259 54,707 54,481 56,108
NO(X) Allowances Purchased (Tons)(8) (1,755) (1,812) (1,265) (1,130) (1,335)
COMMODITY PRICES
General Inflation (%)(9) 2.60 2.60 2.60 2.60 2.60
Contract Electricity Price ($/MWh)(10) $ 23.51 23.54 0.00 0.00 0.00
Market Electricity Price ($/MWh)(11) $ 61.85 64.40 65.28 66.52 68.17
Steam Price ($/MMBtu)(12) $ 10.57 10.83 11.08 11.36 11.64
Fuel Price ($/MMBtu)(13) $ 2.57 2.61 2.77 2.83 2.87
SO(2) Allowances ($/Ton)(14) $ 194 199 204 209 215
NO(X) Allowances ($/Ton)(15) $ 1,983 2,035 2,088 2,142 2,197
OPERATING REVENUES ($000)
Contract Electricity Revenues
Mirant California (16) $ 0 0 0 0 0
Mirant New England $ 0 0 0 0 0
Mirant Texas $ 0 0 0 0 0
State Line $ 57,459 58,349 0 0 0
Mirant Wisconsin $ 0 0 0 0 0
Market Electricity Revenues
Mirant Mid-Atlantic $1,225,798 1,247,393 1,290,694 1,300,167 1,329,237
Mirant California $ 549,685 539,119 559,154 547,599 542,606
Mirant New York $ 287,515 302,690 315,369 341,128 323,372
Mirant New England $ 205,610 206,540 214,388 213,369 221,720
Mirant Texas $ 95,276 95,404 93,768 93,990 90,387
State Line $ 0 0 122,587 125,699 130,246
Mirant Wisconsin $ 26,367 27,113 26,109 26,916 27,372
Steam Revenues $ 10,163 10,413 10,656 10,921 11,190
---------- ----------- ----------- ----------- -----------
Total Operating Revenues $2,457,873 2,487,021 2,632,725 2,659,789 2,676,130
OPERATING EXPENSES ($000)(17)
Fuel
Mirant Mid-Atlantic $ 463,072 467,358 480,238 486,059 498,929
Mirant California $ 289,514 277,514 291,408 284,042 270,236
Mirant New York $ 136,187 132,676 137,673 153,883 141,927
Mirant New England $ 93,654 94,597 98,894 97,007 106,415
Mirant Texas $ 48,762 47,359 43,852 42,726 39,328
State Line $ 0 0 32,622 33,528 34,859
Mirant Wisconsin $ 1,970 1,955 933 1,626 1,638
Emissions Allowances $ 5,443 5,290 8,512 8,967 9,101
Operations & Maintenance $ 257,390 265,245 272,277 278,894 285,583
Major Maintenance $ 22,486 23,160 22,746 20,547 20,640
Insurance $ 20,725 21,258 21,812 22,382 22,963
Property and Gross Receipts Taxes (18) $ 99,874 101,701 103,518 105,438 107,397
Facility Administration and General $ 7,928 8,136 8,347 8,561 8,787
Corporate Administration and General $ 58,526 60,049 61,608 63,208 64,853
Other (19) $ 172,535 171,003 178,530 172,510 152,607
---------- ----------- ----------- ----------- -----------
Total Operating Expenses $1,678,066 1,677,301 1,762,970 1,779,378 1,765,263
NET OPERATING REVENUES ($000) $ 779,807 809,721 869,755 880,410 910,867
CAPITAL EXPENDITURES (20) $ 117,231 118,184 95,557 86,106 114,988
FUNDS FROM CAP EX FACILITY (21) $ 0 0 0 0 0
CASH AVAILABLE FOR DEBT SERVICE $ 662,576 691,537 774,198 794,304 795,880
ANNUAL INTEREST ($000)(22) $ 224,119 224,119 224,119 224,119 224,119
ANNUAL INTEREST COVERAGE (23) 2.96 3.09 3.45 3.54 3.55
2001-10 AVG INTEREST COVERAGE (24) 2.97
EBITDA ADJUSTMENTS TO
NET OPERATING REVENUE:
Plus: Cash-to-Book Lease Adjustment $ 37,489 34,989 41,490 34,489 13,489
EBITDA (25) $ 817,296 844,710 911,245 914,899 924,356
INTEREST W/O CAP EX FACILITY (26) $ 204,758 204,758 204,758 204,758 204,758
EBITDA/INTEREST COVERAGE (27) 3.99 4.13 4.45 4.47 4.51
2001-10 AVG EBITDA/INT COVERAGE (28) 3.76
Year Ending December 31, 2016 2017 2018 2019 2020
- ------------------------ ---- ---- ---- ---- ----
CONSOLIDATED
PERFORMANCE
Annual Average Capacity (MW)(2) 12,587 12,587 12,587 12,587 12,587
Average Capacity Factor (%)(3) 34.8% 35.0% 34.5% 34.8% 34.6%
Contract Energy Sales (GWh)(4) 0 0 0 0 0
Market Energy Sales (GWh)(4) 38,366 38,551 38,092 38,353 38,120
----------- ----------- ----------- ----------- -----------
Total Energy Sales (GWh) 38,366 38,551 38,092 38,353 38,120
Total Steam Sales (MMBtu)(5) 962 962 962 962 962
Fuel Consumption (BBtu) 373,829 375,672 371,270 374,042 371,779
Average Net Heat Rate (Btu/kWh)(6) 9,744 9,745 9,747 9,753 9,753
SO(2) Allowances Purchased (Tons)(7) 55,091 55,147 55,534 55,746 57,071
NO(X) Allowances Purchased (Tons)(8) (1,486) (1,470) (1,400) (1,360) (1,237)
COMMODITY PRICES
General Inflation (%)(9) 2.60 2.60 2.60 2.60 2.60
Contract Electricity Price ($/MWh)(10) 0.00 0.00 0.00 0.00 0.00
Market Electricity Price ($/MWh)(11) 70.04 71.93 74.26 75.77 77.49
Steam Price ($/MMBtu)(12) 11.97 12.25 12.55 12.84 13.14
Fuel Price ($/MMBtu)(13) 2.92 3.02 3.07 3.17 3.23
SO(2) Allowances ($/Ton)(14) 220 226 232 238 244
NO(X) Allowances ($/Ton)(15) 2,255 2,313 2,373 2,435 2,498
OPERATING REVENUES ($000)
Contract Electricity Revenues
Mirant California (16) 0 0 0 0 0
Mirant New England 0 0 0 0 0
Mirant Texas 0 0 0 0 0
State Line 0 0 0 0 0
Mirant Wisconsin 0 0 0 0 0
Market Electricity Revenues
Mirant Mid-Atlantic 1,350,995 1,384,368 1,428,914 1,461,013 1,500,932
Mirant California 542,414 571,139 548,138 586,146 576,935
Mirant New York 325,237 333,980 360,532 354,764 359,925
Mirant New England 216,829 227,204 229,734 239,042 243,189
Mirant Texas 89,258 90,659 89,863 89,627 89,572
State Line 135,480 138,531 144,378 147,592 155,266
Mirant Wisconsin 26,816 27,182 27,271 27,638 28,060
Steam Revenues 11,512 11,780 12,071 12,347 12,636
----------- ----------- ----------- ----------- -----------
Total Operating Revenues 2,698,541 2,784,843 2,840,901 2,918,169 2,966,515
OPERATING EXPENSES ($000)(17)
Fuel
Mirant Mid-Atlantic 505,162 519,806 532,219 549,644 568,336
Mirant California 268,396 284,824 265,909 295,629 283,709
Mirant New York 143,138 145,784 159,380 154,446 160,739
Mirant New England 100,119 108,366 109,492 114,500 116,044
Mirant Texas 37,671 37,913 36,575 35,392 34,866
State Line 35,842 35,315 36,290 36,219 38,159
Mirant Wisconsin 1,487 832 1,234 1,136 743
Emissions Allowances 8,779 9,062 9,551 9,947 10,840
Operations & Maintenance 292,340 300,111 307,402 315,792 323,643
Major Maintenance 23,222 24,533 21,729 21,849 21,993
Insurance 23,554 24,167 24,800 25,444 26,103
Property and Gross Receipts Taxes (18) 109,383 111,438 113,544 115,714 117,936
Facility Administration and General 9,015 9,242 9,489 9,734 9,990
Corporate Administration and General 66,541 68,267 70,045 71,864 73,735
Other (19) 193,682 188,848 150,942 186,642 153,340
----------- ----------- ----------- ----------- -----------
Total Operating Expenses 1,818,331 1,868,508 1,848,601 1,943,953 1,940,176
NET OPERATING REVENUES ($000) 880,211 916,335 992,300 974,216 1,026,339
CAPITAL EXPENDITURES (20) 87,761 102,583 129,276 80,675 116,717
FUNDS FROM CAP EX FACILITY (21) 0 0 0 0 0
CASH AVAILABLE FOR DEBT SERVICE 792,449 813,752 863,024 893,542 909,622
ANNUAL INTEREST ($000)(22) 224,119 224,119 224,119 224,119 224,119
ANNUAL INTEREST COVERAGE (23) 3.54 3.63 3.85 3.99 4.06
2001-10 AVG INTEREST COVERAGE (24)
EBITDA ADJUSTMENTS TO
NET OPERATING REVENUE:
Plus: Cash-to-Book Lease Adjustment 53,489 47,489 8,489 42,988 8,489
EBITDA (25) 933,700 963,824 1,000,789 1,017,204 1,034,828
INTEREST W/O CAP EX FACILITY (26) 204,758 204,758 204,758 204,758 204,758
EBITDA/INTEREST COVERAGE (27) 4.56 4.71 4.89 4.97 5.05
2001-10 AVG EBITDA/INT COVERAGE (28)
A-61
Footnotes to Exhibit A-2
The footnotes to Exhibit A-2 are the same as the footnotes for
Exhibit A-1, except:
3. Capacity factor as estimated by PA Consulting under its "Low Fuel Price"
scenario.
11. As estimated by PA Consulting in its "Low Fuel Price" scenario. Weighted
average market electricity price calculated as the sum of the electricity
revenues divided by the electricity generation, as estimated by PA
Consulting.
13. As estimated by PA Consulting in its "Low Fuel Price" scenario. Weighted
average fuel price calculated as sum of the fuel expenses divided by the
total fuel consumed.
A-62
Exhibit A-3
Mirant Americas Generation, Inc. Facilities
Projected Operating Results
Sensitivity B - High Fuel Market Price Scenario
Year Ending December 31, 2001(1) 2002 2003 2004 2005
- ------------------------ ------- ---- ---- ---- ----
CONSOLIDATED
PERFORMANCE
Annual Average Capacity (MW)(2) 12,587 12,587 12,587 12,587 12,587
Average Capacity Factor (%)(3) 49.4% 44.8% 43.2% 39.4% 40.5%
Contract Energy Sales (GWh)(4) 6,348 6,414 4,725 3,237 3,082
Market Energy Sales (GWh)(4) 48,150 42,965 42,907 40,237 41,593
---------- ----------- ----------- ----------- -----------
Total Energy Sales (GWh) 54,498 49,379 47,631 43,473 44,675
Total Steam Sales (MMBtu)(5) 962 962 962 962 962
Fuel Consumption (BBtu) 537,581 484,222 465,371 424,438 436,098
Average Net Heat Rate (Btu/kWh)(6) 9,864 9,806 9,770 9,763 9,762
SO(2) Allowances Purchased (Tons)(7) 71,100 59,449 53,553 40,365 54,537
NO(X) Allowances Purchased (Tons)(8) 6,184 (494) 5,203 4,009 4,008
COMMODITY PRICES
General Inflation (%)(9) 2.60 2.60 2.60 2.60 2.60
Contract Electricity Price ($/MWh)(10) $ 43.75 37.99 30.21 36.28 27.22
Market Electricity Price ($/MWh)(11) $ 69.21 65.10 63.88 60.82 62.79
Steam Price ($/MMBtu)(12) $ 12.98 13.27 14.06 12.05 13.75
Fuel Price ($/MMBtu)(13) $ 3.38 3.19 3.15 3.20 3.41
SO(2) Allowances ($/Ton)(14) $ 150 154 158 162 166
NO(X) Allowances ($/Ton)(15) $ 1,000 1,000 2,300 2,000 1,700
OPERATING REVENUES ($000)
Contract Electricity Revenues
Mirant California (16) $ 28,255 29,545 33,791 27,551 6,410
Mirant New England $ 151,641 106,353 0 0 0
Mirant Texas $ 33,662 42,431 42,865 22,923 9,426
State Line $ 49,836 50,948 51,530 52,264 53,126
Mirant Wisconsin $ 14,317 14,422 14,533 14,672 14,937
Market Electricity Revenues
Mirant Mid-Atlantic $1,450,891 1,335,681 1,214,738 1,193,175 1,271,906
Mirant California $1,262,390 897,453 968,192 676,844 581,742
Mirant New York $ 475,380 412,281 358,276 320,130 398,944
Mirant New England $ 143,710 151,430 199,717 165,404 230,415
Mirant Texas $ 0 0 0 91,405 128,354
State Line $ 0 0 0 0 0
Mirant Wisconsin $ 130 78 99 125 178
Steam Revenues $ 12,480 12,762 13,526 11,591 13,221
---------- ----------- ----------- ----------- -----------
Total Operating Revenues $3,622,692 3,053,384 2,897,267 2,576,084 2,708,659
OPERATING EXPENSES ($000)(17)
Fuel
Mirant Mid-Atlantic $ 534,928 513,062 466,233 475,269 544,960
Mirant California $ 779,179 594,703 640,980 524,351 439,430
Mirant New York $ 278,931 243,696 201,402 177,514 225,947
Mirant New England $ 224,400 194,312 155,220 115,080 183,096
Mirant Texas $ 0 0 0 66,278 93,878
State Line $ 0 0 0 0 0
Mirant Wisconsin $ 43 26 37 44 89
Emissions Allowances $ 16,835 8,651 20,398 14,530 15,846
Operations & Maintenance $ 225,899 218,023 217,023 215,877 222,443
Major Maintenance $ 17,098 17,888 17,589 15,861 15,873
Insurance $ 15,964 16,448 16,872 17,308 17,763
Property and Gross Receipts Taxes (18) $ 83,326 85,199 86,631 88,108 89,621
Facility Administration and General $ 6,075 6,298 6,457 6,622 6,795
Corporate Administration and General $ 45,274 46,455 47,661 48,897 50,173
Other (19) $ 227,567 201,633 182,792 153,309 148,556
---------- ----------- ----------- ----------- -----------
Total Operating Expenses $2,455,519 2,146,394 2,059,295 1,919,048 2,054,470
NET OPERATING REVENUES ($000) $1,167,172 906,990 837,972 657,036 654,189
CAPITAL EXPENDITURES (20) $ 163,824 111,612 149,367 85,315 85,242
FUNDS FROM CAP EX FACILITY (21) $ 0 0 0 58,131 85,237
CASH AVAILABLE FOR DEBT SERVICE $1,003,348 795,378 688,605 629,852 654,184
ANNUAL INTEREST ($000)(22) $ 175,350 200,010 200,010 209,767 217,113
ANNUAL INTEREST COVERAGE (23) 5.72 3.98 3.44 3.00 3.01
2001-10 AVG INTEREST COVERAGE (24) 3.78
EBITDA ADJUSTMENTS TO
NET OPERATING REVENUE:
Plus: Cash-to-Book Lease Adjustment $ 99,554 73,957 54,209 24,989 19,494
EBITDA (25) $1,266,726 980,947 892,181 682,025 673,683
INTEREST W/O CAP EX FACILITY (26) $ 175,350 200,010 200,010 204,758 204,758
EBITDA/INTEREST COVERAGE (27) 7.22 4.90 4.46 3.33 3.29
2001-10 AVG EBITDA/INT COVERAGE (28) 4.62
Year Ending December 31, 2006 2007 2008 2009 2010
- ------------------------ ---- ---- ---- ---- ----
CONSOLIDATED
PERFORMANCE
Annual Average Capacity (MW)(2) 12,587 12,587 12,587 12,587 12,587
Average Capacity Factor (%)(3) 40.7% 40.8% 39.8% 39.4% 39.2%
Contract Energy Sales (GWh)(4) 2,865 2,960 2,870 2,918 2,994
Market Energy Sales (GWh)(4) 42,058 42,045 41,009 40,478 40,178
----------- ----------- ----------- ----------- -----------
Total Energy Sales (GWh) 44,923 45,004 43,880 43,397 43,172
Total Steam Sales (MMBtu)(5) 962 962 962 962 962
Fuel Consumption (BBtu) 438,177 439,751 428,416 423,869 421,785
Average Net Heat Rate (Btu/kWh)(6) 9,754 9,771 9,763 9,767 9,770
SO(2) Allowances Purchased (Tons)(7) 60,851 59,935 57,884 58,774 67,727
NO(X) Allowances Purchased (Tons)(8) 1,877 1,314 (1,298) (1,091) (998)
COMMODITY PRICES
General Inflation (%)(9) 2.60 2.60 2.60 2.60 2.60
Contract Electricity Price ($/MWh)(10) 24.95 24.40 22.21 19.33 19.15
Market Electricity Price ($/MWh)(11) 67.04 69.96 71.99 75.57 80.19
Steam Price ($/MMBtu)(12) 14.13 14.40 14.78 15.07 15.40
Fuel Price ($/MMBtu)(13) 3.47 3.53 3.58 3.64 3.69
SO(2) Allowances ($/Ton)(14) 171 175 180 184 189
NO(X) Allowances ($/Ton)(15) 1,744 1,790 1,836 1,884 1,933
OPERATING REVENUES ($000)
Contract Electricity Revenues
Mirant California (16) 2,280 258 258 0 0
Mirant New England 0 0 0 0 0
Mirant Texas 0 0 0 0 0
State Line 53,917 54,761 55,542 56,419 57,331
Mirant Wisconsin 15,274 17,216 7,967 0 0
Market Electricity Revenues
Mirant Mid-Atlantic 1,455,740 1,511,175 1,521,889 1,596,171 1,699,449
Mirant California 595,732 672,465 657,321 626,168 658,321
Mirant New York 364,812 371,009 371,098 391,256 400,528
Mirant New England 250,525 237,950 237,426 271,995 300,193
Mirant Texas 152,451 148,600 148,800 143,000 138,211
State Line 0 0 0 0 0
Mirant Wisconsin 210 344 15,793 30,310 25,020
Steam Revenues 13,593 13,847 14,216 14,490 14,813
----------- ----------- ----------- ----------- -----------
Total Operating Revenues 2,904,534 3,027,625 3,030,310 3,129,809 3,293,866
OPERATING EXPENSES ($000)(17)
Fuel
Mirant Mid-Atlantic 573,094 577,310 575,504 598,473 623,941
Mirant California 448,376 498,727 472,823 426,911 442,229
Mirant New York 202,516 203,735 198,403 211,616 209,425
Mirant New England 185,505 164,386 173,854 193,938 176,638
Mirant Texas 111,684 109,091 109,165 104,698 101,586
State Line 0 0 0 0 0
Mirant Wisconsin 82 97 4,331 6,784 2,758
Emissions Allowances 13,618 12,805 7,981 8,737 10,856
Operations & Maintenance 229,180 236,227 241,705 247,166 253,142
Major Maintenance 17,914 18,852 16,660 16,796 16,892
Insurance 18,225 18,695 19,184 19,684 20,200
Property and Gross Receipts Taxes (18) 91,177 92,828 94,651 96,531 98,074
Facility Administration and General 6,973 7,154 7,338 7,535 7,733
Corporate Administration and General 51,479 52,817 54,187 55,595 57,040
Other (19) 139,071 146,750 156,062 178,656 177,554
----------- ----------- ----------- ----------- -----------
Total Operating Expenses 2,088,894 2,139,473 2,131,847 2,173,120 2,198,069
NET OPERATING REVENUES ($000) 815,640 888,152 898,463 956,688 1,095,797
CAPITAL EXPENDITURES (20) 111,964 111,655 110,125 71,354 68,012
FUNDS FROM CAP EX FACILITY (21) 80,916 0 0 0 0
CASH AVAILABLE FOR DEBT SERVICE 784,592 776,497 788,338 885,334 1,027,785
ANNUAL INTEREST ($000)(22) 224,086 224,086 224,086 224,086 224,086
ANNUAL INTEREST COVERAGE (23) 3.50 3.47 3.52 3.95 4.59
2001-10 AVG INTEREST COVERAGE (24)
EBITDA ADJUSTMENTS TO
NET OPERATING REVENUE:
Plus: Cash-to-Book Lease Adjustment 9,159 15,836 24,212 45,829 43,709
EBITDA (25) 824,799 903,988 922,675 1,002,517 1,139,506
INTEREST W/O CAP EX FACILITY (26) 204,758 204,758 204,758 204,758 204,758
EBITDA/INTEREST COVERAGE (27) 4.03 4.41 4.51 4.90 5.57
2001-10 AVG EBITDA/INT COVERAGE (28)
A-63
Exhibit A-3
Mirant Americas Generation, Inc. Facilities
Projected Operating Results
Sensitivity B - High Fuel Market Price Scenario
Year Ending December 31, 2011 2012 2013 2014 2015
- ------------------------ ---- ---- ---- ---- ----
CONSOLIDATED
PERFORMANCE
Annual Average Capacity (MW)(2) 12,587 12,587 12,587 12,587 12,587
Average Capacity Factor (%)(3) 40.9% 40.2% 40.2% 39.9% 39.5%
Contract Energy Sales (GWh)(4) 3,095 3,223 0 0 0
Market Energy Sales (GWh)(4) 42,032 41,067 44,350 44,011 43,603
---------- ----------- ----------- ----------- -----------
Total Energy Sales (GWh) 45,127 44,290 44,350 44,011 43,603
Total Steam Sales (MMBtu)(5) 962 962 962 962 962
Fuel Consumption (BBtu) 441,727 433,404 434,001 430,339 426,103
Average Net Heat Rate (Btu/kWh)(6) 9,788 9,786 9,786 9,778 9,772
SO(2) Allowances Purchased (Tons)(7) 72,404 71,555 83,489 84,518 87,346
NO(X) Allowances Purchased (Tons)(8) (421) (508) 168 421 258
COMMODITY PRICES
General Inflation (%)(9) 2.60 2.60 2.60 2.60 2.60
Contract Electricity Price ($/MWh)(10) $ 18.84 18.41 0.00 0.00 0.00
Market Electricity Price ($/MWh)(11) $ 83.37 87.32 89.54 91.82 93.96
Steam Price ($/MMBtu)(12) $ 15.71 16.06 16.39 16.75 17.12
Fuel Price ($/MMBtu)(13) $ 3.88 3.90 4.09 4.14 4.18
SO(2) Allowances ($/Ton)(14) $ 194 199 204 209 215
NO(X) Allowances ($/Ton)(15) $ 1,983 2,035 2,088 2,142 2,197
OPERATING REVENUES ($000)
Contract Electricity Revenues
Mirant California (16) $ 0 0 0 0 0
Mirant New England $ 0 0 0 0 0
Mirant Texas $ 0 0 0 0 0
State Line $ 58,302 59,337 0 0 0
Mirant Wisconsin $ 0 0 0 0 0
Market Electricity Revenues
Mirant Mid-Atlantic $1,836,386 1,879,833 1,952,392 2,018,238 2,097,437
Mirant California $ 716,985 726,096 767,705 716,235 706,512
Mirant New York $ 448,638 486,659 523,643 565,490 529,495
Mirant New England $ 340,831 332,863 353,289 359,571 382,070
Mirant Texas $ 137,208 135,425 140,705 140,763 132,597
State Line $ 0 0 207,279 214,642 222,158
Mirant Wisconsin $ 24,291 25,032 25,989 26,256 26,627
Steam Revenues $ 15,109 15,442 15,758 16,109 16,461
---------- ----------- ----------- ----------- -----------
Total Operating Revenues $3,577,750 3,660,687 3,986,760 4,057,304 4,113,357
OPERATING EXPENSES ($000)(17)
Fuel
Mirant Mid-Atlantic $ 663,766 667,200 686,479 698,288 716,794
Mirant California $ 498,504 487,985 513,153 467,074 440,423
Mirant New York $ 234,137 221,933 223,550 257,437 238,662
Mirant New England $ 215,325 216,106 220,872 227,127 259,049
Mirant Texas $ 100,471 96,360 89,627 87,490 79,840
State Line $ 0 0 41,434 42,485 43,365
Mirant Wisconsin $ 1,730 1,975 919 1,757 2,240
Emissions Allowances $ 13,195 13,191 17,386 18,587 19,319
Operations & Maintenance $ 261,184 269,352 276,415 283,014 290,081
Major Maintenance $ 22,441 23,128 22,706 20,483 20,454
Insurance $ 20,725 21,258 21,812 22,382 22,963
Property and Gross Receipts Taxes (18) $ 99,808 101,635 103,514 105,417 107,373
Facility Administration and General $ 7,928 8,136 8,347 8,561 8,787
Corporate Administration and General $ 58,526 60,049 61,608 63,208 64,853
Other (19) $ 172,283 170,860 178,452 172,427 152,568
---------- ----------- ----------- ----------- -----------
Total Operating Expenses $2,370,023 2,359,168 2,466,274 2,475,737 2,466,770
NET OPERATING REVENUES ($000) $1,207,727 1,301,519 1,520,487 1,581,567 1,646,587
CAPITAL EXPENDITURES (20) $ 116,868 117,877 95,498 86,062 114,901
FUNDS FROM CAP EX FACILITY (21) $ 0 0 0 0 0
CASH AVAILABLE FOR DEBT SERVICE $1,090,859 1,183,642 1,424,988 1,495,505 1,531,686
ANNUAL INTEREST ($000)(22) $ 224,086 224,086 224,086 224,086 224,086
ANNUAL INTEREST COVERAGE (23) 4.87 5.28 6.36 6.67 6.84
2001-10 AVG INTEREST COVERAGE (24) 3.78
EBITDA ADJUSTMENTS TO
NET OPERATING REVENUE:
Plus: Cash-to-Book Lease Adjustment $ 37,489 34,989 41,490 34,489 13,489
EBITDA (25) $1,245,216 1,336,508 1,561,977 1,616,056 1,660,076
INTEREST W/O CAP EX FACILITY (26) $ 204,758 204,758 204,758 204,758 204,758
EBITDA/INTEREST COVERAGE (27) 6.08 6.53 7.63 7.89 8.11
2001-10 AVG EBITDA/INT COVERAGE (28) 4.62
Year Ending December 31, 2016 2017 2018 2019 2020
- ------------------------ ---- ---- ---- ---- ----
CONSOLIDATED
PERFORMANCE
Annual Average Capacity (MW)(2) 12,587 12,587 12,587 12,587 12,587
Average Capacity Factor (%)(3) 38.8% 39.1% 38.8% 39.1% 38.9%
Contract Energy Sales (GWh)(4) 0 0 0 0 0
Market Energy Sales (GWh)(4) 42,776 43,093 42,821 43,100 42,881
----------- ----------- ----------- ----------- -----------
Total Energy Sales (GWh) 42,776 43,093 42,821 43,100 42,881
Total Steam Sales (MMBtu)(5) 962 962 962 962 962
Fuel Consumption (BBtu) 417,789 420,979 418,340 421,271 419,207
Average Net Heat Rate (Btu/kWh)(6) 9,767 9,769 9,770 9,774 9,776
SO(2) Allowances Purchased (Tons)(7) 85,083 86,134 86,901 86,407 86,635
NO(X) Allowances Purchased (Tons)(8) 138 166 233 313 372
COMMODITY PRICES
General Inflation (%)(9) 2.60 2.60 2.60 2.60 2.60
Contract Electricity Price ($/MWh)(10) 0.00 0.00 0.00 0.00 0.00
Market Electricity Price ($/MWh)(11) 96.78 99.48 102.78 104.80 107.07
Steam Price ($/MMBtu)(12) 17.59 17.96 18.37 18.75 19.15
Fuel Price ($/MMBtu)(13) 4.23 4.37 4.43 4.59 4.67
SO(2) Allowances ($/Ton)(14) 220 226 232 238 244
NO(X) Allowances ($/Ton)(15) 2,255 2,313 2,373 2,435 2,498
OPERATING REVENUES ($000)
Contract Electricity Revenues
Mirant California (16) 0 0 0 0 0
Mirant New England 0 0 0 0 0
Mirant Texas 0 0 0 0 0
State Line 0 0 0 0 0
Mirant Wisconsin 0 0 0 0 0
Market Electricity Revenues
Mirant Mid-Atlantic 2,130,441 2,202,311 2,282,323 2,321,756 2,407,325
Mirant California 705,919 732,846 708,895 762,828 739,663
Mirant New York 542,375 545,324 585,884 581,319 579,600
Mirant New England 374,019 408,979 415,926 433,954 441,424
Mirant Texas 130,305 131,106 128,049 127,508 125,675
State Line 231,056 240,144 253,273 261,914 270,476
Mirant Wisconsin 25,677 26,284 26,653 27,708 26,976
Steam Revenues 16,918 17,275 17,669 18,032 18,413
----------- ----------- ----------- ----------- -----------
Total Operating Revenues 4,156,710 4,304,269 4,418,672 4,535,019 4,609,552
OPERATING EXPENSES ($000)(17)
Fuel
Mirant Mid-Atlantic 717,589 742,130 758,009 781,763 808,206
Mirant California 437,209 453,237 430,783 478,346 470,447
Mirant New York 248,426 247,635 267,667 264,950 273,179
Mirant New England 243,131 272,971 276,427 289,271 289,855
Mirant Texas 76,899 76,445 72,735 70,865 68,864
State Line 43,986 44,732 45,743 46,484 47,399
Mirant Wisconsin 927 700 645 1,256 0
Emissions Allowances 19,060 19,864 20,714 21,330 22,093
Operations & Maintenance 296,737 304,766 312,321 320,660 328,819
Major Maintenance 23,082 24,295 21,483 21,640 21,803
Insurance 23,554 24,167 24,800 25,444 26,103
Property and Gross Receipts Taxes (18) 109,347 111,409 113,524 115,716 117,902
Facility Administration and General 9,015 9,242 9,489 9,734 9,990
Corporate Administration and General 66,541 68,267 70,045 71,864 73,735
Other (19) 193,651 188,808 150,915 186,607 153,195
----------- ----------- ----------- ----------- -----------
Total Operating Expenses 2,509,154 2,588,668 2,575,300 2,705,931 2,711,590
NET OPERATING REVENUES ($000) 1,647,557 1,715,601 1,843,372 1,829,088 1,897,962
CAPITAL EXPENDITURES (20) 87,688 102,661 129,331 80,738 116,678
FUNDS FROM CAP EX FACILITY (21) 0 0 0 0 0
CASH AVAILABLE FOR DEBT SERVICE 1,559,868 1,612,940 1,714,041 1,748,351 1,781,284
ANNUAL INTEREST ($000)(22) 224,086 224,086 224,086 224,086 224,086
ANNUAL INTEREST COVERAGE (23) 6.96 7.20 7.65 7.80 7.95
2001-10 AVG INTEREST COVERAGE (24)
EBITDA ADJUSTMENTS TO
NET OPERATING REVENUE:
Plus: Cash-to-Book Lease Adjustment 53,489 47,489 8,489 42,988 8,489
EBITDA (25) 1,701,046 1,763,090 1,851,861 1,872,076 1,906,451
INTEREST W/O CAP EX FACILITY (26) 204,758 204,758 204,758 204,758 204,758
EBITDA/INTEREST COVERAGE (27) 8.31 8.61 9.04 9.14 9.31
2001-10 AVG EBITDA/INT COVERAGE (28)
A-64
Footnotes to Exhibit A-3
The footnotes to Exhibit A-3 are the same as the footnotes for
Exhibit A-1, except:
3. Capacity factor as estimated by PA Consulting under its "High Fuel Price"
scenario.
11. As estimated by PA Consulting in its "High Fuel Price" scenario. Weighted
average market electricity price calculated as the sum of the electricity
revenues divided by the electricity generation, as estimated by PA
Consulting.
13. As estimated by PA Consulting in its "High Fuel Price" scenario. Weighted
average fuel price calculated as sum of the fuel expenses divided by the
total fuel consumed.
A-65
Exhibit A-4
Mirant Americas Generation, Inc. Facilities
Projected Operating Results
Sensitivity C - Capacity Overbuild Market Price Scenario
Year Ending December 31, 2001(1) 2002 2003 2004 2005
- ------------------------ ------- ---- ---- ---- ----
CONSOLIDATED
PERFORMANCE
Annual Average Capacity (MW)(2) 12,587 12,587 12,587 12,587 12,587
Average Capacity Factor (%)(3) 49.2% 45.7% 43.6% 36.8% 34.6%
Contract Energy Sales (GWh)(4) 6,301 6,676 4,662 3,140 2,746
Market Energy Sales (GWh)(4) 47,951 43,692 43,428 37,418 35,364
---------- ----------- ----------- ----------- -----------
Total Energy Sales (GWh) 54,252 50,368 48,090 40,558 38,109
Total Steam Sales (MMBtu)(5) 962 962 962 962 962
Fuel Consumption (BBtu) 535,120 493,928 469,513 395,247 371,043
Average Net Heat Rate (Btu/kWh)(6) 9,864 9,806 9,763 9,745 9,736
SO(2) Allowances Purchased (Tons)(7) 71,039 62,128 53,788 24,936 18,152
NO(X) Allowances Purchased (Tons)(8) 6,115 (352) 5,125 2,632 1,603
COMMODITY PRICES
General Inflation (%)(9) 2.60 2.60 2.60 2.60 2.60
Contract Electricity Price ($/MWh)(10) $ 43.80 36.20 29.72 34.80 29.11
Market Electricity Price ($/MWh)(11) $ 69.18 60.37 57.21 50.48 48.97
Steam Price ($/MMBtu)(12) $ 12.98 12.09 12.09 9.47 9.57
Fuel Price ($/MMBtu)(13) $ 3.37 2.91 2.72 2.42 2.24
SO(2) Allowances ($/Ton)(14) $ 150 154 158 162 166
NO(X) Allowances ($/Ton)(15) $ 1,000 1,000 2,300 2,000 1,700
OPERATING REVENUES ($000)
Contract Electricity Revenues
Mirant California (16) $ 28,168 27,605 29,677 19,285 2,249
Mirant New England $ 149,956 106,144 0 0 0
Mirant Texas $ 33,704 42,494 42,818 23,011 9,576
State Line $ 49,830 50,958 51,452 52,126 52,661
Mirant Wisconsin $ 14,322 14,475 14,615 14,849 15,436
Market Electricity Revenues
Mirant Mid-Atlantic $1,449,682 1,274,918 1,133,418 932,121 871,619
Mirant California $1,262,390 825,938 823,245 574,597 474,707
Mirant New York $ 457,531 392,090 336,102 209,368 207,882
Mirant New England $ 147,503 144,781 191,550 109,948 105,156
Mirant Texas $ 0 0 0 62,760 72,150
State Line $ 0 0 0 0 0
Mirant Wisconsin $ 130 89 113 147 247
Steam Revenues $ 12,480 11,626 11,627 9,109 9,207
---------- ----------- ----------- ----------- -----------
Total Operating Revenues $3,605,696 2,891,118 2,634,617 2,007,321 1,820,890
OPERATING EXPENSES ($000)(17)
Fuel
Mirant Mid-Atlantic $ 534,357 483,946 430,465 386,349 388,932
Mirant California $ 779,179 532,135 518,688 368,601 247,277
Mirant New York $ 265,471 233,399 183,691 97,561 99,825
Mirant New England $ 225,654 187,379 143,472 62,039 48,148
Mirant Texas $ 0 0 0 43,077 47,515
State Line $ 0 0 0 0 0
Mirant Wisconsin $ 44 29 32 45 76
Emissions Allowances $ 16,758 9,200 20,260 9,265 5,683
Operations & Maintenance $ 225,861 218,483 216,920 214,189 218,063
Major Maintenance $ 17,120 17,923 17,554 15,920 16,057
Insurance $ 15,964 16,448 16,872 17,308 17,763
Property and Gross Receipts Taxes (18) $ 83,326 85,201 86,634 88,114 89,639
Facility Administration and General $ 6,075 6,298 6,457 6,622 6,795
Corporate Administration and General $ 45,274 46,455 47,661 48,897 50,173
Other (19) $ 227,567 201,578 182,657 153,630 149,068
---------- ----------- ----------- ----------- -----------
Total Operating Expenses $2,442,650 2,038,474 1,871,362 1,511,617 1,385,014
NET OPERATING REVENUES ($000) $1,163,046 852,644 763,254 495,704 435,875
CAPITAL EXPENDITURES (20) $ 163,865 111,679 149,305 85,426 85,583
FUNDS FROM CAP EX FACILITY (21) $ 0 0 0 58,131 85,578
CASH AVAILABLE FOR DEBT SERVICE $ 999,181 740,965 613,949 468,409 435,870
ANNUAL INTEREST ($000)(22) $ 175,350 200,010 200,010 209,767 217,142
ANNUAL INTEREST COVERAGE (23) 5.70 3.70 3.07 2.23 2.01
2001-10 AVG INTEREST COVERAGE (24) 2.74
EBITDA ADJUSTMENTS TO
NET OPERATING REVENUE:
Plus: Cash-to-Book Lease Adjustment $ 99,554 73,957 54,209 24,989 19,494
EBITDA (25) $1,262,600 926,601 817,463 520,693 455,369
INTEREST W/O CAP EX FACILITY (26) $ 175,350 200,010 200,010 204,758 204,758
EBITDA/INTEREST COVERAGE (27) 7.20 4.63 4.09 2.54 2.22
2001-10 AVG EBITDA/INT COVERAGE (28) 3.52
Year Ending December 31, 2006 2007 2008 2009 2010
- ------------------------ ---- ---- ---- ---- ----
CONSOLIDATED
PERFORMANCE
Annual Average Capacity (MW)(2) 12,587 12,587 12,587 12,587 12,587
Average Capacity Factor (%)(3) 35.0% 35.4% 34.8% 34.9% 35.3%
Contract Energy Sales (GWh)(4) 2,521 2,558 2,403 2,451 2,544
Market Energy Sales (GWh)(4) 36,063 36,435 35,966 36,061 36,428
----------- ----------- ----------- ----------- -----------
Total Energy Sales (GWh) 38,584 38,993 38,369 38,512 38,972
Total Steam Sales (MMBtu)(5) 962 962 962 962 962
Fuel Consumption (BBtu) 375,341 379,833 373,263 374,997 379,635
Average Net Heat Rate (Btu/kWh)(6) 9,728 9,741 9,728 9,737 9,741
SO(2) Allowances Purchased (Tons)(7) 26,052 27,459 30,382 33,431 45,530
NO(X) Allowances Purchased (Tons)(8) (213) (557) (2,817) (2,607) (2,339)
COMMODITY PRICES
General Inflation (%)(9) 2.60 2.60 2.60 2.60 2.60
Contract Electricity Price ($/MWh)(10) 28.45 28.78 26.55 22.78 22.31
Market Electricity Price ($/MWh)(11) 50.56 53.74 56.36 58.54 60.49
Steam Price ($/MMBtu)(12) 9.86 10.07 10.36 10.60 10.86
Fuel Price ($/MMBtu)(13) 2.30 2.37 2.42 2.50 2.56
SO(2) Allowances ($/Ton)(14) 171 175 180 184 189
NO(X) Allowances ($/Ton)(15) 1,744 1,790 1,836 1,884 1,933
OPERATING REVENUES ($000)
Contract Electricity Revenues
Mirant California (16) 311 258 258 0 0
Mirant New England 0 0 0 0 0
Mirant Texas 0 0 0 0 0
State Line 53,434 54,211 54,963 55,845 56,763
Mirant Wisconsin 17,981 19,154 8,571 0 0
Market Electricity Revenues
Mirant Mid-Atlantic 948,493 1,027,163 1,087,718 1,139,540 1,188,412
Mirant California 475,614 533,345 522,118 511,096 534,746
Mirant New York 191,769 191,806 191,138 209,368 226,044
Mirant New England 111,366 108,327 110,440 121,609 127,318
Mirant Texas 95,796 97,225 98,503 98,351 98,979
State Line 0 0 0 0 0
Mirant Wisconsin 260 354 16,993 30,853 27,855
Steam Revenues 9,481 9,688 9,966 10,191 10,447
----------- ----------- ----------- ----------- -----------
Total Operating Revenues 1,904,505 2,041,531 2,100,668 2,176,853 2,270,564
OPERATING EXPENSES ($000)(17)
Fuel
Mirant Mid-Atlantic 409,112 419,102 425,023 439,552 456,966
Mirant California 252,216 281,587 269,674 259,391 274,080
Mirant New York 93,830 93,077 91,765 102,168 111,590
Mirant New England 52,292 51,012 57,134 74,080 71,935
Mirant Texas 56,772 56,651 56,642 55,205 54,844
State Line 0 0 0 0 0
Mirant Wisconsin 76 80 4,105 5,358 3,017
Emissions Allowances 4,018 3,757 234 1,200 4,055
Operations & Maintenance 224,777 231,662 237,354 243,344 249,638
Major Maintenance 18,011 19,024 16,798 16,973 17,072
Insurance 18,225 18,695 19,184 19,684 20,200
Property and Gross Receipts Taxes (18) 91,265 92,890 94,708 96,548 98,165
Facility Administration and General 6,973 7,154 7,338 7,535 7,733
Corporate Administration and General 51,479 52,817 54,187 55,595 57,040
Other (19) 139,529 147,220 156,469 178,971 177,823
----------- ----------- ----------- ----------- -----------
Total Operating Expenses 1,418,574 1,474,728 1,490,615 1,555,604 1,604,158
NET OPERATING REVENUES ($000) 485,931 566,803 610,053 621,249 666,405
CAPITAL EXPENDITURES (20) 112,142 111,975 110,382 71,681 68,343
FUNDS FROM CAP EX FACILITY (21) 80,916 0 0 0 0
CASH AVAILABLE FOR DEBT SERVICE 454,705 454,828 499,671 549,568 598,062
ANNUAL INTEREST ($000)(22) 224,115 224,115 224,115 224,115 224,115
ANNUAL INTEREST COVERAGE (23) 2.03 2.03 2.23 2.45 2.67
2001-10 AVG INTEREST COVERAGE (24)
EBITDA ADJUSTMENTS TO
NET OPERATING REVENUE:
Plus: Cash-to-Book Lease Adjustment 9,159 15,836 24,212 45,829 43,709
EBITDA (25) 495,090 582,639 634,265 667,078 710,114
INTEREST W/O CAP EX FACILITY (26) 204,758 204,758 204,758 204,758 204,758
EBITDA/INTEREST COVERAGE (27) 2.42 2.85 3.10 3.26 3.47
2001-10 AVG EBITDA/INT COVERAGE (28)
A-66
Exhibit A-4
Mirant Americas Generation, Inc. Facilities
Projected Operating Results
Sensitivity C - Capacity Overbuild Market Price Scenario
Year Ending December 31, 2011 2012 2013 2014 2015
- ------------------------ ---- ---- ---- ---- ----
CONSOLIDATED
PERFORMANCE
Annual Average Capacity (MW)(2) 12,587 12,587 12,587 12,587 12,587
Average Capacity Factor (%)(3) 37.2% 36.5% 36.5% 36.6% 36.2%
Contract Energy Sales (GWh)(4) 2,627 2,671 0 0 0
Market Energy Sales (GWh)(4) 38,350 37,607 40,253 40,374 39,870
---------- ----------- ----------- ----------- -----------
Total Energy Sales (GWh) 40,977 40,277 40,253 40,374 39,870
Total Steam Sales (MMBtu)(5) 962 962 962 962 962
Fuel Consumption (BBtu) 400,112 393,053 392,931 393,999 388,846
Average Net Heat Rate (Btu/kWh)(6) 9,764 9,759 9,761 9,759 9,753
SO(2) Allowances Purchased (Tons)(7) 49,441 50,146 59,670 60,421 63,530
NO(X) Allowances Purchased (Tons)(8) (1,825) (1,829) (1,253) (934) (1,070)
COMMODITY PRICES
General Inflation (%)(9) 2.60 2.60 2.60 2.60 2.60
Contract Electricity Price ($/MWh)(10) $ 21.97 21.94 0.00 0.00 0.00
Market Electricity Price ($/MWh)(11) $ 63.82 65.34 66.26 67.38 70.00
Steam Price ($/MMBtu)(12) $ 11.11 11.39 11.66 11.96 12.26
Fuel Price ($/MMBtu)(13) $ 2.69 2.74 2.90 2.98 3.02
SO(2) Allowances ($/Ton)(14) $ 194 199 204 209 215
NO(X) Allowances ($/Ton)(15) $ 1,983 2,035 2,088 2,142 2,197
OPERATING REVENUES ($000)
Contract Electricity Revenues
Mirant California (16) $ 0 0 0 0 0
Mirant New England $ 0 0 0 0 0
Mirant Texas $ 0 0 0 0 0
State Line $ 57,697 58,605 0 0 0
Mirant Wisconsin $ 0 0 0 0 0
Market Electricity Revenues
Mirant Mid-Atlantic $1,279,620 1,288,256 1,337,063 1,351,633 1,385,788
Mirant California $ 589,255 569,840 593,542 580,857 576,997
Mirant New York $ 250,383 256,894 267,195 308,616 330,896
Mirant New England $ 201,866 216,204 212,448 217,755 233,874
Mirant Texas $ 99,559 99,461 98,997 98,965 95,008
State Line $ 0 0 132,163 135,268 140,891
Mirant Wisconsin $ 26,975 26,610 25,942 27,250 27,443
Steam Revenues $ 10,689 10,955 11,215 11,498 11,786
---------- ----------- ----------- ----------- -----------
Total Operating Revenues $2,516,044 2,526,825 2,678,565 2,731,842 2,802,683
OPERATING EXPENSES ($000)(17)
Fuel
Mirant Mid-Atlantic $ 483,667 487,975 503,321 510,123 524,595
Mirant California $ 317,178 305,308 320,604 312,486 297,283
Mirant New York $ 131,475 127,842 132,202 166,051 151,406
Mirant New England $ 88,758 101,439 98,647 101,390 119,731
Mirant Texas $ 54,013 52,405 48,988 47,521 43,727
State Line $ 0 0 34,460 34,572 36,108
Mirant Wisconsin $ 2,158 1,622 817 1,566 1,468
Emissions Allowances $ 5,943 6,234 9,556 10,631 11,280
Operations & Maintenance $ 257,648 265,743 272,650 279,513 286,437
Major Maintenance $ 22,469 23,170 22,666 20,541 20,643
Insurance $ 20,725 21,258 21,812 22,382 22,963
Property and Gross Receipts Taxes (18) $ 99,894 101,685 103,513 105,448 107,399
Facility Administration and General $ 7,928 8,136 8,347 8,561 8,787
Corporate Administration and General $ 58,526 60,049 61,608 63,208 64,853
Other (19) $ 172,607 171,017 178,563 172,542 152,651
---------- ----------- ----------- ----------- -----------
Total Operating Expenses $1,722,989 1,733,883 1,817,754 1,856,535 1,849,331
NET OPERATING REVENUES ($000) $ 793,055 792,942 860,811 875,307 953,352
CAPITAL EXPENDITURES (20) $ 117,126 118,159 95,645 86,072 115,004
FUNDS FROM CAP EX FACILITY (21) $ 0 0 0 0 0
CASH AVAILABLE FOR DEBT SERVICE $ 675,929 674,783 765,166 789,236 838,349
ANNUAL INTEREST ($000)(22) $ 224,115 224,115 224,115 224,115 224,115
ANNUAL INTEREST COVERAGE (23) 3.02 3.01 3.41 3.52 3.74
2001-10 AVG INTEREST COVERAGE (24) 2.74
EBITDA ADJUSTMENTS TO
NET OPERATING REVENUE:
Plus: Cash-to-Book Lease Adjustment $ 37,489 34,989 41,490 34,489 13,489
EBITDA (25) $ 830,544 827,931 902,301 909,796 966,841
INTEREST W/O CAP EX FACILITY (26) $ 204,758 204,758 204,758 204,758 204,758
EBITDA/INTEREST COVERAGE (27) 4.06 4.04 4.41 4.44 4.72
2001-10 AVG EBITDA/INT COVERAGE (28) 3.52
Year Ending December 31, 2016 2017 2018 2019 2020
- ------------------------ ---- ---- ---- ---- ----
CONSOLIDATED
PERFORMANCE
Annual Average Capacity (MW)(2) 12,587 12,587 12,587 12,587 12,587
Average Capacity Factor (%)(3) 35.5% 36.0% 35.2% 35.6% 35.0%
Contract Energy Sales (GWh)(4) 0 0 0 0 0
Market Energy Sales (GWh)(4) 39,174 39,658 38,790 39,253 38,559
----------- ----------- ----------- ----------- -----------
Total Energy Sales (GWh) 39,174 39,658 38,790 39,253 38,559
Total Steam Sales (MMBtu)(5) 962 962 962 962 962
Fuel Consumption (BBtu) 381,808 386,655 378,130 382,892 376,178
Average Net Heat Rate (Btu/kWh)(6) 9,746 9,750 9,748 9,754 9,756
SO(2) Allowances Purchased (Tons)(7) 62,233 62,827 62,673 62,616 62,438
NO(X) Allowances Purchased (Tons)(8) (1,210) (1,125) (1,183) (1,069) (1,048)
COMMODITY PRICES
General Inflation (%)(9) 2.60 2.60 2.60 2.60 2.60
Contract Electricity Price ($/MWh)(10) 0.00 0.00 0.00 0.00 0.00
Market Electricity Price ($/MWh)(11) 72.52 74.33 76.86 78.61 80.53
Steam Price ($/MMBtu)(12) 12.61 12.91 13.23 13.54 13.86
Fuel Price ($/MMBtu)(13) 3.08 3.20 3.23 3.36 3.39
SO(2) Allowances ($/Ton)(14) 220 226 232 238 244
NO(X) Allowances ($/Ton)(15) 2,255 2,313 2,373 2,435 2,498
OPERATING REVENUES ($000)
Contract Electricity Revenues
Mirant California (16) 0 0 0 0 0
Mirant New England 0 0 0 0 0
Mirant Texas 0 0 0 0 0
State Line 0 0 0 0 0
Mirant Wisconsin 0 0 0 0 0
Market Electricity Revenues
Mirant Mid-Atlantic 1,413,931 1,449,828 1,502,507 1,531,789 1,566,972
Mirant California 575,519 606,129 579,205 625,267 611,903
Mirant New York 354,597 369,114 380,070 386,331 384,348
Mirant New England 230,528 250,069 243,439 261,085 253,692
Mirant Texas 93,812 95,357 94,128 94,149 93,642
State Line 145,171 149,936 154,755 159,455 166,670
Mirant Wisconsin 27,236 27,352 27,174 27,554 28,009
Steam Revenues 12,131 12,417 12,728 13,023 13,332
----------- ----------- ----------- ----------- -----------
Total Operating Revenues 2,852,925 2,960,202 2,994,006 3,098,653 3,118,568
OPERATING EXPENSES ($000)(17)
Fuel
Mirant Mid-Atlantic 532,255 547,391 559,873 577,522 594,841
Mirant California 296,188 314,320 293,560 325,906 313,050
Mirant New York 153,555 162,982 164,275 168,513 169,392
Mirant New England 112,511 130,850 125,188 135,104 120,703
Mirant Texas 42,045 42,410 40,631 39,557 38,696
State Line 36,719 36,720 37,404 37,688 39,257
Mirant Wisconsin 1,523 807 891 953 715
Emissions Allowances 10,971 11,593 11,727 12,300 12,624
Operations & Maintenance 293,238 301,210 308,321 316,709 324,379
Major Maintenance 23,139 24,472 21,626 21,842 22,023
Insurance 23,554 24,167 24,800 25,444 26,103
Property and Gross Receipts Taxes (18) 109,397 111,444 113,541 115,711 117,934
Facility Administration and General 9,015 9,242 9,489 9,734 9,990
Corporate Administration and General 66,541 68,267 70,045 71,864 73,735
Other (19) 193,714 188,881 150,962 186,697 153,371
----------- ----------- ----------- ----------- -----------
Total Operating Expenses 1,904,365 1,974,756 1,932,333 2,045,544 2,016,813
NET OPERATING REVENUES ($000) 948,559 985,445 1,061,673 1,053,110 1,101,755
CAPITAL EXPENDITURES (20) 87,685 102,649 129,279 80,694 116,651
FUNDS FROM CAP EX FACILITY (21) 0 0 0 0 0
CASH AVAILABLE FOR DEBT SERVICE 860,874 882,796 932,394 972,416 985,103
ANNUAL INTEREST ($000)(22) 224,115 224,115 224,115 224,115 224,115
ANNUAL INTEREST COVERAGE (23) 3.84 3.94 4.16 4.34 4.40
2001-10 AVG INTEREST COVERAGE (24)
EBITDA ADJUSTMENTS TO
NET OPERATING REVENUE:
Plus: Cash-to-Book Lease Adjustment 53,489 47,489 8,489 42,988 8,489
EBITDA (25) 1,002,048 1,032,934 1,070,162 1,096,098 1,110,244
INTEREST W/O CAP EX FACILITY (26) 204,758 204,758 204,758 204,758 204,758
EBITDA/INTEREST COVERAGE (27) 4.89 5.04 5.23 5.35 5.42
2001-10 AVG EBITDA/INT COVERAGE (28)
A-67
Footnotes to Exhibit A-4
The footnotes to Exhibit A-4 are the same as the footnotes for
Exhibit A-1, except:
3. Capacity factor as estimated by PA Consulting under its "Capacity
Overbuild" scenario.
11. As estimated by PA Consulting in its "Capacity Overbuild" scenario.
Weighted average market electricity price calculated as the sum of the
electricity revenues divided by the electricity generation, as estimated
by PA Consulting.
13. As estimated by PA Consulting in its "Capacity Overbuild" scenario.
Weighted average fuel price calculated as sum of the fuel expenses divided
by the total fuel consumed.
A-68
Exhibit A-5
Mirant Americas Generation, Inc. Facilities
Projected Operating Results
Sensitivity D - High Hydro Market Price Scenario
Year Ending December 31, 2001(1) 2002 2003 2004 2005
- ------------------------ ------- ---- ---- ---- ----
CONSOLIDATED
PERFORMANCE
Annual Average Capacity (MW)(2) 12,587 12,587 12,587 12,587 12,587
Average Capacity Factor (%)(3) 47.4% 44.1% 42.3% 38.8% 37.8%
Contract Energy Sales (GWh)(4) 6,339 6,598 4,662 3,140 2,746
Market Energy Sales (GWh)(4) 45,888 42,015 41,979 39,628 38,891
---------- ----------- ----------- ----------- -----------
Total Energy Sales (GWh) 52,227 48,613 46,641 42,769 41,636
Total Steam Sales (MMBtu)(5) 962 962 962 962 962
Fuel Consumption (BBtu) 514,820 476,555 455,186 417,427 405,964
Average Net Heat Rate (Btu/kWh)(6) 9,857 9,803 9,759 9,760 9,750
SO(2) Allowances Purchased (Tons)(7) 71,043 61,277 53,542 31,943 31,076
NO(X) Allowances Purchased (Tons)(8) 6,167 (381) 5,119 3,657 2,952
COMMODITY PRICES
General Inflation (%)(9) 2.60 2.60 2.60 2.60 2.60
Contract Electricity Price ($/MWh)(10) $ 42.59 38.05 31.96 40.05 29.11
Market Electricity Price ($/MWh)(11) $ 63.66 55.96 52.63 50.95 51.18
Steam Price ($/MMBtu)(12) $ 12.98 12.09 12.09 10.71 9.57
Fuel Price ($/MMBtu)(13) $ 3.28 2.83 2.66 2.57 2.30
SO(2) Allowances ($/Ton)(14) $ 150 154 158 162 166
NO(X) Allowances ($/Ton)(15) $ 1,000 1,000 2,300 2,000 1,700
OPERATING REVENUES ($000)
Contract Electricity Revenues
Mirant California (16) $ 22,870 41,866 40,116 35,765 2,249
Mirant New England $ 149,243 101,246 0 0 0
Mirant Texas $ 33,704 42,494 42,818 23,011 9,576
State Line $ 49,830 50,958 51,452 52,126 52,661
Mirant Wisconsin $ 14,322 14,475 14,615 14,849 15,436
Market Electricity Revenues
Mirant Mid-Atlantic $1,452,190 1,276,686 1,131,958 1,055,042 1,027,571
Mirant California $ 851,575 533,761 549,486 463,294 474,707
Mirant New York $ 475,676 398,285 338,171 294,482 274,288
Mirant New England $ 141,770 142,545 189,584 143,484 141,404
Mirant Texas $ 0 0 0 62,760 72,150
State Line $ 0 0 0 0 0
Mirant Wisconsin $ 130 89 113 147 247
Steam Revenues $ 12,480 11,626 11,627 10,303 9,207
---------- ----------- ----------- ----------- -----------
Total Operating Revenues $3,203,790 2,614,031 2,369,940 2,155,263 2,079,496
OPERATING EXPENSES ($000)(17)
Fuel
Mirant Mid-Atlantic $ 535,696 485,365 429,800 426,205 403,409
Mirant California $ 655,682 448,886 456,250 346,957 247,277
Mirant New York $ 279,079 237,979 184,925 169,727 153,913
Mirant New England $ 218,336 178,169 138,270 87,957 80,750
Mirant Texas $ 0 0 0 43,077 47,515
State Line $ 0 0 0 0 0
Mirant Wisconsin $ 44 29 32 45 76
Emissions Allowances $ 16,814 9,045 20,204 12,451 10,126
Operations & Maintenance $ 224,824 217,388 215,809 214,860 219,748
Major Maintenance $ 17,120 17,923 17,554 15,920 16,057
Insurance $ 15,964 16,448 16,872 17,308 17,763
Property and Gross Receipts Taxes (18) $ 83,326 85,201 86,634 88,114 89,639
Facility Administration and General $ 6,075 6,298 6,457 6,622 6,795
Corporate Administration and General $ 45,274 46,455 47,661 48,897 50,173
Other (19) $ 225,842 200,324 181,390 153,092 149,068
---------- ----------- ----------- ----------- -----------
Total Operating Expenses $2,324,076 1,949,510 1,801,857 1,631,232 1,492,309
NET OPERATING REVENUES ($000) $ 879,714 664,522 568,083 524,031 587,187
CAPITAL EXPENDITURES (20) $ 163,865 111,679 149,305 85,426 85,583
FUNDS FROM CAP EX FACILITY (21) $ 0 0 0 58,131 85,578
CASH AVAILABLE FOR DEBT SERVICE $ 715,849 552,842 418,778 496,736 587,182
ANNUAL INTEREST ($000)(22) $ 175,350 200,010 200,010 209,767 217,142
ANNUAL INTEREST COVERAGE (23) 4.08 2.76 2.09 2.37 2.70
2001-10 AVG INTEREST COVERAGE (24) 2.86
EBITDA ADJUSTMENTS TO
NET OPERATING REVENUE:
Plus: Cash-to-Book Lease Adjustment $ 99,554 73,957 54,209 24,989 19,494
EBITDA (25) $ 979,268 738,479 622,292 549,020 606,681
INTEREST W/O CAP EX FACILITY (26) $ 175,350 200,010 200,010 204,758 204,758
EBITDA/INTEREST COVERAGE (27) 5.58 3.69 3.11 2.68 2.96
2001-10 AVG EBITDA/INT COVERAGE (28) 3.65
Year Ending December 31, 2006 2007 2008 2009 2010
- ------------------------ ---- ---- ---- ---- ----
CONSOLIDATED
PERFORMANCE
Annual Average Capacity (MW)(2) 12,587 12,587 12,587 12,587 12,587
Average Capacity Factor (%)(3) 37.9% 37.7% 36.8% 36.6% 36.7%
Contract Energy Sales (GWh)(4) 2,521 2,558 2,403 2,451 2,544
Market Energy Sales (GWh)(4) 39,252 38,995 38,162 37,956 37,958
----------- ----------- ----------- ----------- -----------
Total Energy Sales (GWh) 41,773 41,553 40,565 40,408 40,503
Total Steam Sales (MMBtu)(5) 962 962 962 962 962
Fuel Consumption (BBtu) 406,865 405,345 395,141 393,919 394,949
Average Net Heat Rate (Btu/kWh)(6) 9,740 9,755 9,741 9,749 9,751
SO(2) Allowances Purchased (Tons)(7) 37,679 36,766 37,363 39,341 50,048
NO(X) Allowances Purchased (Tons)(8) 907 292 (2,099) (1,971) (1,831)
COMMODITY PRICES
General Inflation (%)(9) 2.60 2.60 2.60 2.60 2.60
Contract Electricity Price ($/MWh)(10) 28.45 28.78 26.55 22.78 22.31
Market Electricity Price ($/MWh)(11) 53.57 56.39 58.03 60.99 63.52
Steam Price ($/MMBtu)(12) 9.86 10.07 10.36 10.60 10.86
Fuel Price ($/MMBtu)(13) 2.36 2.42 2.47 2.54 2.60
SO(2) Allowances ($/Ton)(14) 171 175 180 184 189
NO(X) Allowances ($/Ton)(15) 1,744 1,790 1,836 1,884 1,933
OPERATING REVENUES ($000)
Contract Electricity Revenues
Mirant California (16) 311 258 258 0 0
Mirant New England 0 0 0 0 0
Mirant Texas 0 0 0 0 0
State Line 53,434 54,211 54,963 55,845 56,763
Mirant Wisconsin 17,981 19,154 8,571 0 0
Market Electricity Revenues
Mirant Mid-Atlantic 1,127,472 1,158,541 1,157,979 1,191,457 1,241,658
Mirant California 475,614 533,345 522,118 511,096 534,746
Mirant New York 256,322 261,817 263,972 281,361 310,737
Mirant New England 147,205 147,526 154,829 201,869 196,963
Mirant Texas 95,796 97,225 98,503 98,351 98,979
State Line 0 0 0 0 0
Mirant Wisconsin 260 354 16,993 30,853 27,855
Steam Revenues 9,481 9,688 9,966 10,191 10,447
----------- ----------- ----------- ----------- -----------
Total Operating Revenues 2,183,876 2,282,119 2,288,152 2,381,023 2,478,148
OPERATING EXPENSES ($000)(17)
Fuel
Mirant Mid-Atlantic 425,724 430,784 434,640 448,976 465,888
Mirant California 252,216 281,587 269,674 259,391 274,080
Mirant New York 140,646 135,635 132,304 139,500 143,690
Mirant New England 83,499 74,233 78,417 90,175 83,461
Mirant Texas 56,772 56,651 56,642 55,205 54,844
State Line 0 0 0 0 0
Mirant Wisconsin 76 80 4,105 5,358 3,017
Emissions Allowances 7,957 6,902 2,807 3,488 5,889
Operations & Maintenance 226,344 233,120 238,545 244,393 250,529
Major Maintenance 18,011 19,024 16,798 16,973 17,072
Insurance 18,225 18,695 19,184 19,684 20,200
Property and Gross Receipts Taxes (18) 91,265 92,890 94,708 96,548 98,165
Facility Administration and General 6,973 7,154 7,338 7,535 7,733
Corporate Administration and General 51,479 52,817 54,187 55,595 57,040
Other (19) 139,529 147,220 156,469 178,971 177,823
----------- ----------- ----------- ----------- -----------
Total Operating Expenses 1,518,716 1,556,791 1,565,818 1,621,791 1,659,432
NET OPERATING REVENUES ($000) 665,160 725,328 722,333 759,232 818,717
CAPITAL EXPENDITURES (20) 112,142 111,975 110,382 71,681 68,343
FUNDS FROM CAP EX FACILITY (21) 80,916 0 0 0 0
CASH AVAILABLE FOR DEBT SERVICE 633,934 613,353 611,952 687,550 750,374
ANNUAL INTEREST ($000)(22) 224,115 224,115 224,115 224,115 224,115
ANNUAL INTEREST COVERAGE (23) 2.83 2.74 2.73 3.07 3.35
2001-10 AVG INTEREST COVERAGE (24)
EBITDA ADJUSTMENTS TO
NET OPERATING REVENUE:
Plus: Cash-to-Book Lease Adjustment 9,159 15,836 24,212 45,829 43,709
EBITDA (25) 674,319 741,164 746,545 805,061 862,426
INTEREST W/O CAP EX FACILITY (26) 204,758 204,758 204,758 204,758 204,758
EBITDA/INTEREST COVERAGE (27) 3.29 3.62 3.65 3.93 4.21
2001-10 AVG EBITDA/INT COVERAGE (28)
A-69
Exhibit A-5
Mirant Americas Generation, Inc. Facilities
Projected Operating Results
Sensitivity D - High Hydro Market Price Scenario
Year Ending December 31, 2011 2012 2013 2014 2015
- ------------------------ ---- ---- ---- ---- ----
CONSOLIDATED
PERFORMANCE
Annual Average Capacity (MW)(2) 12,587 12,587 12,587 12,587 12,587
Average Capacity Factor (%)(3) 38.0% 37.0% 37.1% 36.9% 36.1%
Contract Energy Sales (GWh)(4) 2,627 2,671 0 0 0
Market Energy Sales (GWh)(4) 39,282 38,095 40,960 40,678 39,851
---------- ----------- ----------- ----------- -----------
Total Energy Sales (GWh) 41,909 40,765 40,960 40,678 39,851
Total Steam Sales (MMBtu)(5) 962 962 962 962 962
Fuel Consumption (BBtu) 409,440 398,117 400,072 397,032 388,712
Average Net Heat Rate (Btu/kWh)(6) 9,770 9,766 9,767 9,760 9,754
SO(2) Allowances Purchased (Tons)(7) 52,192 51,085 61,500 61,626 62,919
NO(X) Allowances Purchased (Tons)(8) (1,508) (1,607) (983) (835) (1,058)
COMMODITY PRICES
General Inflation (%)(9) 2.60 2.60 2.60 2.60 2.60
Contract Electricity Price ($/MWh)(10) $ 21.97 21.94 0.00 0.00 0.00
Market Electricity Price ($/MWh)(11) $ 65.08 67.24 68.23 69.69 71.48
Steam Price ($/MMBtu)(12) $ 11.11 11.39 11.66 11.96 12.26
Fuel Price ($/MMBtu)(13) $ 2.71 2.74 2.91 2.98 3.01
SO(2) Allowances ($/Ton)(14) $ 194 199 204 209 215
NO(X) Allowances ($/Ton)(15) $ 1,983 2,035 2,088 2,142 2,197
OPERATING REVENUES ($000)
Contract Electricity Revenues
Mirant California (16) $ 0 0 0 0 0
Mirant New England $ 0 0 0 0 0
Mirant Texas $ 0 0 0 0 0
State Line $ 57,697 58,605 0 0 0
Mirant Wisconsin $ 0 0 0 0 0
Market Electricity Revenues
Mirant Mid-Atlantic $1,305,417 1,317,938 1,369,384 1,384,193 1,415,649
Mirant California $ 589,255 569,840 593,542 580,857 576,997
Mirant New York $ 324,596 338,390 355,636 387,184 364,919
Mirant New England $ 210,470 209,382 218,983 221,121 227,584
Mirant Texas $ 99,559 99,461 98,997 98,965 95,008
State Line $ 0 0 132,163 135,268 140,891
Mirant Wisconsin $ 26,975 26,610 25,942 27,250 27,443
Steam Revenues $ 10,689 10,955 11,215 11,498 11,786
---------- ----------- ----------- ----------- -----------
Total Operating Revenues $2,624,658 2,631,181 2,805,862 2,846,336 2,860,277
OPERATING EXPENSES ($000)(17)
Fuel
Mirant Mid-Atlantic $ 489,363 492,348 506,796 514,197 527,222
Mirant California $ 317,178 305,308 320,604 312,486 297,283
Mirant New York $ 152,094 146,634 153,483 171,804 157,377
Mirant New England $ 93,844 93,141 98,559 99,050 106,503
Mirant Texas $ 54,013 52,405 48,988 47,521 43,727
State Line $ 0 0 34,460 34,572 36,108
Mirant Wisconsin $ 2,158 1,622 817 1,566 1,468
Emissions Allowances $ 7,108 6,873 10,487 11,096 11,180
Operations & Maintenance $ 258,216 266,017 273,066 279,740 286,384
Major Maintenance $ 22,469 23,170 22,666 20,541 20,643
Insurance $ 20,725 21,258 21,812 22,382 22,963
Property and Gross Receipts Taxes (18) $ 99,894 101,685 103,513 105,448 107,399
Facility Administration and General $ 7,928 8,136 8,347 8,561 8,787
Corporate Administration and General $ 58,526 60,049 61,608 63,208 64,853
Other (19) $ 172,607 171,017 178,563 172,542 152,651
---------- ----------- ----------- ----------- -----------
Total Operating Expenses $1,756,123 1,749,663 1,843,769 1,864,714 1,844,547
NET OPERATING REVENUES ($000) $ 868,535 881,518 962,093 981,622 1,015,729
CAPITAL EXPENDITURES (20) $ 117,126 118,159 95,645 86,072 115,004
FUNDS FROM CAP EX FACILITY (21) $ 0 0 0 0 0
CASH AVAILABLE FOR DEBT SERVICE $ 751,409 763,359 866,447 895,550 900,726
ANNUAL INTEREST ($000)(22) $ 224,115 224,115 224,115 224,115 224,115
ANNUAL INTEREST COVERAGE (23) 3.35 3.41 3.87 4.00 4.02
2001-10 AVG INTEREST COVERAGE (24) 2.86
EBITDA ADJUSTMENTS TO
NET OPERATING REVENUE:
Plus: Cash-to-Book Lease Adjustment $ 37,489 34,989 41,490 34,489 13,489
EBITDA (25) $ 906,024 916,507 1,003,583 1,016,111 1,029,218
INTEREST W/O CAP EX FACILITY (26) $ 204,758 204,758 204,758 204,758 204,758
EBITDA/INTEREST COVERAGE (27) 4.42 4.48 4.90 4.96 5.03
2001-10 AVG EBITDA/INT COVERAGE (28) 3.65
Year Ending December 31, 2016 2017 2018 2019 2020
- ------------------------ ---- ---- ---- ---- ----
CONSOLIDATED
PERFORMANCE
Annual Average Capacity (MW)(2) 12,587 12,587 12,587 12,587 12,587
Average Capacity Factor (%)(3) 35.5% 35.7% 35.3% 35.4% 34.2%
Contract Energy Sales (GWh)(4) 0 0 0 0 0
Market Energy Sales (GWh)(4) 39,139 39,337 38,889 39,018 37,758
----------- ----------- ----------- ----------- -----------
Total Energy Sales (GWh) 39,139 39,337 38,889 39,018 37,758
Total Steam Sales (MMBtu)(5) 962 962 962 962 962
Fuel Consumption (BBtu) 381,487 383,563 379,171 380,619 368,101
Average Net Heat Rate (Btu/kWh)(6) 9,747 9,751 9,750 9,755 9,749
SO(2) Allowances Purchased (Tons)(7) 61,709 61,626 62,221 61,520 62,102
NO(X) Allowances Purchased (Tons)(8) (1,207) (1,206) (1,115) (1,126) (1,479)
COMMODITY PRICES
General Inflation (%)(9) 2.60 2.60 2.60 2.60 2.60
Contract Electricity Price ($/MWh)(10) 0.00 0.00 0.00 0.00 0.00
Market Electricity Price ($/MWh)(11) 73.31 75.36 77.83 79.61 80.44
Steam Price ($/MMBtu)(12) 12.61 12.91 13.23 13.54 13.86
Fuel Price ($/MMBtu)(13) 3.07 3.17 3.23 3.33 3.33
SO(2) Allowances ($/Ton)(14) 220 226 232 238 244
NO(X) Allowances ($/Ton)(15) 2,255 2,313 2,373 2,435 2,498
OPERATING REVENUES ($000)
Contract Electricity Revenues
Mirant California (16) 0 0 0 0 0
Mirant New England 0 0 0 0 0
Mirant Texas 0 0 0 0 0
State Line 0 0 0 0 0
Mirant Wisconsin 0 0 0 0 0
Market Electricity Revenues
Mirant Mid-Atlantic 1,436,988 1,473,937 1,527,143 1,557,539 1,602,335
Mirant California 575,519 606,129 579,205 625,267 611,903
Mirant New York 367,130 374,693 405,448 396,099 281,384
Mirant New England 223,610 237,080 238,831 246,121 253,161
Mirant Texas 93,812 95,357 94,128 94,149 93,642
State Line 145,171 149,936 154,755 159,455 166,670
Mirant Wisconsin 27,236 27,352 27,174 27,554 28,009
Steam Revenues 12,131 12,417 12,728 13,023 13,332
----------- ----------- ----------- ----------- -----------
Total Operating Revenues 2,881,597 2,976,901 3,039,412 3,119,207 3,050,436
OPERATING EXPENSES ($000)(17)
Fuel
Mirant Mid-Atlantic 533,291 549,124 562,519 578,422 598,904
Mirant California 296,188 314,320 293,560 325,906 313,050
Mirant New York 158,692 161,026 176,140 169,417 117,858
Mirant New England 101,009 110,731 111,875 116,459 118,848
Mirant Texas 42,045 42,410 40,631 39,557 38,696
State Line 36,719 36,720 37,404 37,688 39,257
Mirant Wisconsin 1,523 807 891 953 715
Emissions Allowances 10,863 11,136 11,783 11,893 11,464
Operations & Maintenance 293,190 301,006 308,272 316,576 324,210
Major Maintenance 23,139 24,472 21,626 21,842 22,023
Insurance 23,554 24,167 24,800 25,444 26,103
Property and Gross Receipts Taxes (18) 109,397 111,444 113,541 115,711 117,934
Facility Administration and General 9,015 9,242 9,489 9,734 9,990
Corporate Administration and General 66,541 68,267 70,045 71,864 73,735
Other (19) 193,714 188,881 150,962 186,697 153,371
----------- ----------- ----------- ----------- -----------
Total Operating Expenses 1,898,880 1,953,753 1,933,538 2,028,163 1,966,158
NET OPERATING REVENUES ($000) 982,717 1,023,148 1,105,874 1,091,044 1,084,277
CAPITAL EXPENDITURES (20) 87,685 102,649 129,279 80,694 116,651
FUNDS FROM CAP EX FACILITY (21) 0 0 0 0 0
CASH AVAILABLE FOR DEBT SERVICE 895,031 920,499 976,595 1,010,350 967,626
ANNUAL INTEREST ($000)(22) 224,115 224,115 224,115 224,115 224,115
ANNUAL INTEREST COVERAGE (23) 3.99 4.11 4.36 4.51 4.32
2001-10 AVG INTEREST COVERAGE (24)
EBITDA ADJUSTMENTS TO
NET OPERATING REVENUE:
Plus: Cash-to-Book Lease Adjustment 53,489 47,489 8,489 42,988 8,489
EBITDA (25) 1,036,206 1,070,637 1,114,363 1,134,032 1,092,766
INTEREST W/O CAP EX FACILITY (26) 204,758 204,758 204,758 204,758 204,758
EBITDA/INTEREST COVERAGE (27) 5.06 5.23 5.44 5.54 5.34
2001-10 AVG EBITDA/INT COVERAGE (28)
A-70
Footnotes to Exhibit A-5
The footnotes to Exhibit A-5 are the same as the footnotes for
Exhibit A-1, except:
3. Capacity factor as estimated by PA Consulting under its "High Hydro"
scenario.
11. As estimated by PA Consulting in its "High Hydro" scenario. Weighted
average market electricity price calculated as the sum of the electricity
revenues divided by the electricity generation, as estimated by PA
Consulting.
13. As estimated by PA Consulting in its "High Hydro" scenario. Weighted
average fuel price calculated as sum of the fuel expenses divided by the
total fuel consumed.
A-71
Exhibit A-6
Mirant Americas Generation, Inc. Facilities
Projected Operating Results
Sensitivity E - Breakeven Market Prices with Fuel Correlation
Year Ending December 31, 2001(1) 2002 2003 2004 2005
- ------------------------ ------- ---- ---- ---- ----
CONSOLIDATED
PERFORMANCE
Annual Average Capacity (MW)(2) 12,587 12,587 12,587 12,587 12,587
Average Capacity Factor (%)(3) 49.4% 45.7% 43.6% 39.3% 37.8%
Contract Energy Sales (GWh)(4) 6,339 6,598 4,662 3,140 2,746
Market Energy Sales (GWh)(4) 48,143 43,741 43,397 40,161 38,891
---------- ----------- ----------- ----------- -----------
Total Energy Sales (GWh) 54,482 50,338 48,059 43,301 41,636
Total Steam Sales (MMBtu)(5) 962 962 962 962 962
Fuel Consumption (BBtu) 537,369 493,659 469,255 422,673 405,964
Average Net Heat Rate (Btu/kWh)(6) 9,863 9,807 9,764 9,761 9,750
SO(2) Allowances Purchased (Tons)(7) 71,055 61,286 53,549 31,946 31,076
NO(X) Allowances Purchased (Tons)(8) 6,167 (381) 5,119 3,657 2,952
COMMODITY PRICES
General Inflation (%)(9) 2.60 2.60 2.60 2.60 2.60
Contract Electricity Price ($/MWh)(10) $ 42.22 35.33 29.72 37.23 30.08
Market Electricity Price ($/MWh)(11) $ 45.18 43.52 44.15 40.83 38.97
Steam Price ($/MMBtu)(12) $ 12.23 11.56 11.67 10.37 9.29
Fuel Price ($/MMBtu)(13) $ 2.75 2.50 2.39 2.30 2.05
SO(2) Allowances ($/Ton)(14) $ 150 154 158 162 166
NO(X) Allowances ($/Ton)(15) $ 1,000 1,000 2,300 2,000 1,700
OPERATING REVENUES ($000)
Contract Electricity Revenues
Mirant California (16) $ 28,168 27,605 29,677 26,910 4,914
Mirant New England $ 141,591 97,562 0 0 0
Mirant Texas $ 33,704 42,500 42,821 23,012 9,576
State Line $ 49,830 50,958 51,452 52,126 52,661
Mirant Wisconsin $ 14,332 14,480 14,617 14,854 15,442
Market Electricity Revenues
Mirant Mid-Atlantic $ 944,212 916,536 871,438 811,505 781,689
Mirant California $ 820,803 592,946 633,776 441,961 361,120
Mirant New York $ 317,958 291,886 264,530 226,506 208,655
Mirant New England $ 92,179 102,333 145,953 110,365 107,568
Mirant Texas $ 0 0 0 49,135 56,202
State Line $ 0 0 0 0 0
Mirant Wisconsin $ 110 79 104 134 221
Steam Revenues $ 11,757 11,114 11,221 9,974 8,932
---------- ----------- ----------- ----------- -----------
Total Operating Revenues $2,454,644 2,147,999 2,065,589 1,766,482 1,606,980
OPERATING EXPENSES ($000)(17)
Fuel
Mirant Mid-Atlantic $ 478,744 443,029 397,713 395,495 372,725
Mirant California $ 546,359 405,107 418,603 298,616 199,420
Mirant New York $ 257,155 223,416 176,013 161,603 146,610
Mirant New England $ 196,362 164,039 129,531 82,591 75,777
Mirant Texas $ 0 0 0 33,223 36,261
State Line $ 0 0 0 0 0
Mirant Wisconsin $ 40 27 30 43 73
Emissions Allowances $ 16,815 9,046 20,204 12,451 10,126
Operations & Maintenance $ 225,882 218,377 216,877 215,287 219,748
Major Maintenance $ 17,120 17,923 17,554 15,920 16,057
Insurance $ 15,964 16,448 16,872 17,308 17,763
Property and Gross Receipts Taxes (18) $ 83,326 85,200 86,634 88,114 89,639
Facility Administration and General $ 6,075 6,298 6,457 6,622 6,795
Corporate Administration and General $ 45,274 46,455 47,661 48,897 50,173
Other (19) $ 226,314 200,946 182,123 153,254 148,671
---------- ----------- ----------- ----------- -----------
Total Operating Expenses $2,115,430 1,836,311 1,716,271 1,529,424 1,389,838
NET OPERATING REVENUES ($000) $ 339,214 311,688 349,317 237,058 217,142
CAPITAL EXPENDITURES (20) $ 163,865 111,679 149,305 85,426 85,583
FUNDS FROM CAP EX FACILITY (21) $ 0 0 0 58,131 85,578
CASH AVAILABLE FOR DEBT SERVICE $ 175,349 200,008 200,012 209,763 217,137
ANNUAL INTEREST ($000)(22) $ 175,350 200,010 200,010 209,767 217,142
ANNUAL INTEREST COVERAGE (23) 1.00 1.00 1.00 1.00 1.00
2001-10 AVG INTEREST COVERAGE (24) 1.00
EBITDA ADJUSTMENTS TO
NET OPERATING REVENUE:
Plus: Cash-to-Book Lease Adjustment $ 99,554 73,957 54,209 24,989 19,494
EBITDA (25) $ 438,768 385,645 403,526 262,047 236,636
INTEREST W/O CAP EX FACILITY (26) $ 175,350 200,010 200,010 204,758 204,758
EBITDA/INTEREST COVERAGE (27) 2.50 1.93 2.02 1.28 1.16
2001-10 AVG EBITDA/INT COVERAGE (28) 1.68
Year Ending December 31, 2006 2007 2008 2009 2010
- ------------------------ ---- ---- ---- ---- ----
CONSOLIDATED
PERFORMANCE
Annual Average Capacity (MW)(2) 12,587 12,587 12,587 12,587 12,587
Average Capacity Factor (%)(3) 37.9% 37.7% 36.8% 36.6% 36.7%
Contract Energy Sales (GWh)(4) 2,521 2,558 2,403 2,451 2,544
Market Energy Sales (GWh)(4) 39,252 38,995 38,162 37,956 37,958
----------- ----------- ----------- ----------- -----------
Total Energy Sales (GWh) 41,773 41,553 40,565 40,408 40,503
Total Steam Sales (MMBtu)(5) 962 962 962 962 962
Fuel Consumption (BBtu) 406,865 405,345 395,141 393,919 394,949
Average Net Heat Rate (Btu/kWh)(6) 9,740 9,755 9,741 9,749 9,751
SO(2) Allowances Purchased (Tons)(7) 37,679 36,766 37,363 39,341 50,048
NO(X) Allowances Purchased (Tons)(8) 907 292 (2,099) (1,971) (1,831)
COMMODITY PRICES
General Inflation (%)(9) 2.60 2.60 2.60 2.60 2.60
Contract Electricity Price ($/MWh)(10) 30.18 29.19 27.18 22.78 22.31
Market Electricity Price ($/MWh)(11) 40.20 43.72 45.20 45.85 45.81
Steam Price ($/MMBtu)(12) 9.55 9.80 10.09 10.28 10.51
Fuel Price ($/MMBtu)(13) 2.09 2.16 2.22 2.25 2.23
SO(2) Allowances ($/Ton)(14) 171 175 180 184 189
NO(X) Allowances ($/Ton)(15) 1,744 1,790 1,836 1,884 1,933
OPERATING REVENUES ($000)
Contract Electricity Revenues
Mirant California (16) 4,657 1,303 1,788 0 0
Mirant New England 0 0 0 0 0
Mirant Texas 0 0 0 0 0
State Line 53,434 54,211 54,963 55,845 56,763
Mirant Wisconsin 17,988 19,158 8,572 0 0
Market Electricity Revenues
Mirant Mid-Atlantic 843,793 896,085 898,416 889,851 888,766
Mirant California 355,944 412,521 405,086 381,717 382,766
Mirant New York 191,829 202,506 204,804 210,136 222,425
Mirant New England 110,166 114,105 120,124 150,768 140,985
Mirant Texas 75,853 79,432 80,944 78,995 77,482
State Line 0 0 0 0 0
Mirant Wisconsin 232 327 15,655 28,900 26,631
Steam Revenues 9,187 9,423 9,701 9,891 10,109
----------- ----------- ----------- ----------- -----------
Total Operating Revenues 1,663,083 1,789,071 1,800,053 1,806,103 1,805,927
OPERATING EXPENSES ($000)(17)
Fuel
Mirant Mid-Atlantic 391,901 400,032 403,981 413,703 422,554
Mirant California 201,507 230,997 222,145 208,390 203,170
Mirant New York 134,015 130,363 127,472 133,968 133,566
Mirant New England 78,237 70,144 74,267 84,924 78,149
Mirant Texas 42,645 43,972 44,111 41,426 39,490
State Line 0 0 0 0 0
Mirant Wisconsin 73 78 4,006 5,242 2,617
Emissions Allowances 7,957 6,902 2,807 3,488 5,889
Operations & Maintenance 226,344 233,120 238,545 244,393 250,529
Major Maintenance 18,011 19,024 16,798 16,973 17,072
Insurance 18,225 18,695 19,184 19,684 20,200
Property and Gross Receipts Taxes (18) 91,264 92,890 94,666 96,486 98,126
Facility Administration and General 6,973 7,154 7,338 7,535 7,733
Corporate Administration and General 51,479 52,817 54,187 55,595 57,040
Other (19) 139,114 146,797 156,052 178,500 177,334
----------- ----------- ----------- ----------- -----------
Total Operating Expenses 1,407,745 1,452,984 1,465,559 1,510,306 1,513,470
NET OPERATING REVENUES ($000) 255,339 336,087 334,494 295,796 292,457
CAPITAL EXPENDITURES (20) 112,142 111,975 110,382 71,681 68,343
FUNDS FROM CAP EX FACILITY (21) 80,916 0 0 0 0
CASH AVAILABLE FOR DEBT SERVICE 224,113 224,112 224,112 224,115 224,114
ANNUAL INTEREST ($000)(22) 224,115 224,115 224,115 224,115 224,115
ANNUAL INTEREST COVERAGE (23) 1.00 1.00 1.00 1.00 1.00
2001-10 AVG INTEREST COVERAGE (24)
EBITDA ADJUSTMENTS TO
NET OPERATING REVENUE:
Plus: Cash-to-Book Lease Adjustment 9,159 15,836 24,212 45,829 43,709
EBITDA (25) 264,498 351,923 358,706 341,625 336,166
INTEREST W/O CAP EX FACILITY (26) 204,758 204,758 204,758 204,758 204,758
EBITDA/INTEREST COVERAGE (27) 1.29 1.72 1.75 1.67 1.64
2001-10 AVG EBITDA/INT COVERAGE (28)
A-72
Exhibit A-6
Mirant Americas Generation, Inc. Facilities
Projected Operating Results
Sensitivity E - Breakeven Market Prices with Fuel Correlation
Year Ending December 31, 2011 2012 2013 2014 2015
- ------------------------ ---- ---- ---- ---- ----
CONSOLIDATED
PERFORMANCE
Annual Average Capacity (MW)(2) 12,587 12,587 12,587 12,587 12,587
Average Capacity Factor (%)(3) 38.0% 37.0% 37.1% 36.9% 36.1%
Contract Energy Sales (GWh)(4) 2,627 2,671 0 0 0
Market Energy Sales (GWh)(4) 39,282 38,095 40,960 40,678 39,851
---------- ----------- ----------- ----------- -----------
Total Energy Sales (GWh) 41,909 40,765 40,960 40,678 39,851
Total Steam Sales (MMBtu)(5) 962 962 962 962 962
Fuel Consumption (BBtu) 409,440 398,117 400,072 397,032 388,712
Average Net Heat Rate (Btu/kWh)(6) 9,770 9,766 9,767 9,760 9,754
SO(2) Allowances Purchased (Tons)(7) 52,192 51,085 61,500 61,626 62,919
NO(X) Allowances Purchased (Tons)(8) (1,508) (1,607) (983) (835) (1,058)
COMMODITY PRICES
General Inflation (%)(9) 2.60 2.60 2.60 2.60 2.60
Contract Electricity Price ($/MWh)(10) $ 21.97 21.94 0.00 0.00 0.00
Market Electricity Price ($/MWh)(11) $ 47.79 49.16 48.31 48.84 50.23
Steam Price ($/MMBtu)(12) $ 10.77 11.04 11.26 11.54 11.83
Fuel Price ($/MMBtu)(13) $ 2.34 2.37 2.48 2.53 2.57
SO(2) Allowances ($/Ton)(14) $ 194 199 204 209 215
NO(X) Allowances ($/Ton)(15) $ 1,983 2,035 2,088 2,142 2,197
OPERATING REVENUES ($000)
Contract Electricity Revenues
Mirant California (16) $ 0 0 0 0 0
Mirant New England $ 0 0 0 0 0
Mirant Texas $ 0 0 0 0 0
State Line $ 57,697 58,605 0 0 0
Mirant Wisconsin $ 0 0 0 0 0
Market Electricity Revenues
Mirant Mid-Atlantic $ 951,918 956,120 955,071 954,680 978,937
Mirant California $ 429,691 413,399 413,963 400,614 399,004
Mirant New York $ 236,698 245,491 248,037 267,043 252,346
Mirant New England $ 153,476 151,900 152,729 152,508 157,377
Mirant Texas $ 79,413 79,706 78,717 79,002 76,732
State Line $ 0 0 104,814 106,372 110,626
Mirant Wisconsin $ 26,160 26,000 25,602 26,565 26,819
Steam Revenues $ 10,359 10,613 10,830 11,094 11,374
---------- ----------- ----------- ----------- -----------
Total Operating Revenues $1,945,412 1,941,834 1,989,763 1,997,878 2,013,215
OPERATING EXPENSES ($000)(17)
Fuel
Mirant Mid-Atlantic $ 446,841 449,452 459,006 464,970 477,714
Mirant California $ 238,771 228,552 231,703 223,388 213,111
Mirant New York $ 142,044 136,918 142,422 159,371 146,112
Mirant New England $ 88,094 87,342 91,708 91,942 98,859
Mirant Texas $ 39,588 38,196 34,331 32,919 30,354
State Line $ 0 0 30,645 30,859 32,472
Mirant Wisconsin $ 1,872 1,394 685 1,295 1,205
Emissions Allowances $ 7,108 6,873 10,487 11,096 11,180
Operations & Maintenance $ 258,216 266,017 273,066 279,740 286,384
Major Maintenance $ 22,469 23,170 22,666 20,541 20,643
Insurance $ 20,725 21,258 21,812 22,382 22,963
Property and Gross Receipts Taxes (18) $ 99,868 101,665 103,502 105,426 107,380
Facility Administration and General $ 7,928 8,136 8,347 8,561 8,787
Corporate Administration and General $ 58,526 60,049 61,608 63,208 64,853
Other (19) $ 172,121 170,540 178,017 171,996 152,085
---------- ----------- ----------- ----------- -----------
Total Operating Expenses $1,604,171 1,599,562 1,670,005 1,687,694 1,674,101
NET OPERATING REVENUES ($000) $ 341,241 342,272 319,758 310,185 339,114
CAPITAL EXPENDITURES (20) $ 117,126 118,159 95,645 86,072 115,004
FUNDS FROM CAP EX FACILITY (21) $ 0 0 0 0 0
CASH AVAILABLE FOR DEBT SERVICE $ 224,115 224,113 224,112 224,113 224,110
ANNUAL INTEREST ($000)(22) $ 224,115 224,115 224,115 224,115 224,115
ANNUAL INTEREST COVERAGE (23) 1.00 1.00 1.00 1.00 1.00
2001-10 AVG INTEREST COVERAGE (24) 1.00
EBITDA ADJUSTMENTS TO
NET OPERATING REVENUE:
Plus: Cash-to-Book Lease Adjustment $ 37,489 34,989 41,490 34,489 13,489
EBITDA (25) $ 378,730 377,261 361,248 344,674 352,603
INTEREST W/O CAP EX FACILITY (26) $ 204,758 204,758 204,758 204,758 204,758
EBITDA/INTEREST COVERAGE (27) 1.85 1.84 1.76 1.68 1.72
2001-10 AVG EBITDA/INT COVERAGE (28) 1.68
Year Ending December 31, 2016 2017 2018 2019 2020
- ------------------------ ---- ---- ---- ---- ----
CONSOLIDATED
PERFORMANCE
Annual Average Capacity (MW)(2) 12,587 12,587 12,587 12,587 12,587
Average Capacity Factor (%)(3) 35.5% 35.7% 35.3% 35.4% 34.2%
Contract Energy Sales (GWh)(4) 0 0 0 0 0
Market Energy Sales (GWh)(4) 39,139 39,337 38,889 39,018 37,758
----------- ----------- ----------- ----------- -----------
Total Energy Sales (GWh) 39,139 39,337 38,889 39,018 37,758
Total Steam Sales (MMBtu)(5) 962 962 962 962 962
Fuel Consumption (BBtu) 381,487 383,563 379,171 380,619 368,101
Average Net Heat Rate (Btu/kWh)(6) 9,747 9,751 9,750 9,755 9,749
SO(2) Allowances Purchased (Tons)(7) 61,709 61,626 62,221 61,520 62,102
NO(X) Allowances Purchased (Tons)(8) (1,207) (1,206) (1,115) (1,126) (1,479)
COMMODITY PRICES
General Inflation (%)(9) 2.60 2.60 2.60 2.60 2.60
Contract Electricity Price ($/MWh)(10) 0.00 0.00 0.00 0.00 0.00
Market Electricity Price ($/MWh)(11) 51.95 53.28 53.98 54.60 56.05
Steam Price ($/MMBtu)(12) 12.18 12.47 12.76 13.05 13.37
Fuel Price ($/MMBtu)(13) 2.63 2.72 2.76 2.84 2.85
SO(2) Allowances ($/Ton)(14) 220 226 232 238 244
NO(X) Allowances ($/Ton)(15) 2,255 2,313 2,373 2,435 2,498
OPERATING REVENUES ($000)
Contract Electricity Revenues
Mirant California (16) 0 0 0 0 0
Mirant New England 0 0 0 0 0
Mirant Texas 0 0 0 0 0
State Line 0 0 0 0 0
Mirant Wisconsin 0 0 0 0 0
Market Electricity Revenues
Mirant Mid-Atlantic 1,002,361 1,025,474 1,041,605 1,050,055 1,097,542
Mirant California 401,452 421,707 395,053 421,540 419,131
Mirant New York 256,088 260,688 276,540 267,042 192,738
Mirant New England 155,978 164,947 162,898 165,929 173,405
Mirant Texas 76,799 78,111 76,822 76,836 77,466
State Line 114,140 117,773 119,467 121,898 128,496
Mirant Wisconsin 26,650 27,026 26,802 27,130 27,702
Steam Revenues 11,715 11,990 12,272 12,546 12,861
----------- ----------- ----------- ----------- -----------
Total Operating Revenues 2,045,183 2,107,716 2,111,459 2,142,976 2,129,341
OPERATING EXPENSES ($000)(17)
Fuel
Mirant Mid-Atlantic 484,889 500,038 510,630 524,336 545,469
Mirant California 214,112 226,385 207,644 227,917 222,225
Mirant New York 147,699 149,954 163,740 157,328 109,317
Mirant New England 93,860 102,803 103,431 107,377 109,832
Mirant Texas 29,420 29,582 27,772 26,710 26,529
State Line 33,311 33,513 34,225 34,646 36,438
Mirant Wisconsin 1,245 653 707 744 558
Emissions Allowances 10,863 11,136 11,783 11,893 11,464
Operations & Maintenance 293,190 301,006 308,272 316,576 324,210
Major Maintenance 23,139 24,472 21,626 21,842 22,023
Insurance 23,554 24,167 24,800 25,444 26,103
Property and Gross Receipts Taxes (18) 109,378 111,433 113,529 115,697 117,925
Facility Administration and General 9,015 9,242 9,489 9,734 9,990
Corporate Administration and General 66,541 68,267 70,045 71,864 73,735
Other (19) 193,165 188,304 150,375 186,062 152,761
----------- ----------- ----------- ----------- -----------
Total Operating Expenses 1,733,381 1,780,955 1,758,068 1,838,170 1,788,579
NET OPERATING REVENUES ($000) 311,802 326,761 353,391 304,806 340,762
CAPITAL EXPENDITURES (20) 87,685 102,649 129,279 80,694 116,651
FUNDS FROM CAP EX FACILITY (21) 0 0 0 0 0
CASH AVAILABLE FOR DEBT SERVICE 224,116 224,112 224,112 224,112 224,111
ANNUAL INTEREST ($000)(22) 224,115 224,115 224,115 224,115 224,115
ANNUAL INTEREST COVERAGE (23) 1.00 1.00 1.00 1.00 1.00
2001-10 AVG INTEREST COVERAGE (24)
EBITDA ADJUSTMENTS TO
NET OPERATING REVENUE:
Plus: Cash-to-Book Lease Adjustment 53,489 47,489 8,489 42,988 8,489
EBITDA (25) 365,291 374,250 361,880 347,794 349,251
INTEREST W/O CAP EX FACILITY (26) 204,758 204,758 204,758 204,758 204,758
EBITDA/INTEREST COVERAGE (27) 1.78 1.83 1.77 1.70 1.71
2001-10 AVG EBITDA/INT COVERAGE (28)
A-73
Footnotes to Exhibit A-6
The footnotes to Exhibit A-6 are the same as the footnotes for
Exhibit A-1, except:
11. Market electricity prices are set such that the total operating revenue
results in an interest coverage of 1.00 in all years.
13. Fuel prices have been reduced for each unit based upon the reduction in
market electricity prices, as estimated by PA Consulting.
A-74
Exhibit A-7
Mirant Americas Generation, Inc. Facilities
Projected Operating Results
Sensitivity F - Reduced Availability
Year Ending December 31, 2001(1) 2002 2003 2004 2005
- ------------------------ ------- ---- ---- ---- ----
CONSOLIDATED
PERFORMANCE
Annual Average Capacity (MW)(2) 12,587 12,587 12,587 12,587 12,587
Average Capacity Factor (%)(3) 46.9% 43.4% 41.4% 37.3% 35.9%
Contract Energy Sales (GWh)(4) 6,022 6,268 4,429 2,983 2,608
Market Energy Sales (GWh)(4) 45,736 41,554 41,227 38,153 36,946
---------- ----------- ----------- ----------- -----------
Total Energy Sales (GWh) 51,758 47,821 45,656 41,136 39,554
Total Steam Sales (MMBtu)(5) 962 962 962 962 962
Fuel Consumption (BBtu) 510,500 468,968 445,793 401,537 385,667
Average Net Heat Rate (Btu/kWh)(6) 9,863 9,807 9,764 9,761 9,750
SO(2) Allowances Purchased (Tons)(7) 59,810 50,528 43,181 22,658 21,830
NO(X) Allowances Purchased (Tons)(8) 4,843 (1,369) 4,334 2,943 2,271
COMMODITY PRICES
General Inflation (%)(9) 2.60 2.60 2.60 2.60 2.60
Contract Electricity Price ($/MWh)(10) $ 44.18 36.60 30.42 35.36 29.15
Market Electricity Price ($/MWh)(11) $ 69.37 60.58 57.32 53.05 51.19
Steam Price ($/MMBtu)(12) $ 12.98 12.09 12.09 10.71 9.57
Fuel Price ($/MMBtu)(13) $ 3.37 2.91 2.71 2.59 2.30
SO(2) Allowances ($/Ton)(14) $ 150 154 158 162 166
NO(X) Allowances ($/Ton)(15) $ 1,000 1,000 2,300 2,000 1,700
OPERATING REVENUES ($000)
Contract Electricity Revenues
Mirant California (16) $ 28,168 27,605 29,677 19,285 2,249
Mirant New England $ 143,684 97,713 0 0 0
Mirant Texas $ 33,885 42,566 42,923 23,185 9,677
State Line $ 46,742 47,806 48,268 48,901 49,402
Mirant Wisconsin $ 13,585 13,736 13,875 14,112 14,695
Market Electricity Revenues
Mirant Mid-Atlantic $1,385,291 1,217,542 1,078,568 1,002,290 976,192
Mirant California $1,199,270 784,640 782,085 545,866 450,978
Mirant New York $ 453,129 379,427 322,173 279,758 260,573
Mirant New England $ 134,681 135,419 180,107 136,310 134,334
Mirant Texas $ 0 0 0 59,808 68,818
State Line $ 0 0 0 0 0
Mirant Wisconsin $ 127 87 111 144 241
Steam Revenues $ 12,480 11,626 11,627 10,303 9,207
---------- ----------- ----------- ----------- -----------
Total Operating Revenues $3,451,042 2,758,167 2,509,414 2,139,962 1,976,366
OPERATING EXPENSES ($000)(17)
Fuel
Mirant Mid-Atlantic $ 508,916 461,084 408,315 404,894 383,221
Mirant California $ 740,999 506,204 493,371 350,736 235,446
Mirant New York $ 265,123 226,063 175,682 161,232 146,219
Mirant New England $ 207,421 169,257 131,358 83,563 76,711
Mirant Texas $ 0 0 0 40,923 45,142
State Line $ 0 0 0 0 0
Mirant Wisconsin $ 41 28 30 43 72
Emissions Allowances $ 13,806 6,401 16,757 9,523 7,436
Operations & Maintenance $ 224,375 216,920 215,371 213,917 218,411
Major Maintenance $ 17,207 17,948 17,590 15,952 16,114
Insurance $ 15,964 16,448 16,872 17,308 17,763
Property and Gross Receipts Taxes (18) $ 83,302 85,177 86,610 88,091 89,615
Facility Administration and General $ 6,075 6,298 6,457 6,622 6,795
Corporate Administration and General $ 45,274 46,455 47,661 48,897 50,173
Other (19) $ 227,416 201,487 182,562 153,565 148,994
---------- ----------- ----------- ----------- -----------
Total Operating Expenses $2,355,919 1,959,770 1,798,636 1,595,266 1,442,112
NET OPERATING REVENUES ($000) $1,095,122 798,397 710,778 544,697 534,254
CAPITAL EXPENDITURES (20) $ 164,029 111,724 149,372 85,484 85,689
FUNDS FROM CAP EX FACILITY (21) $ 0 0 0 58,131 85,684
CASH AVAILABLE FOR DEBT SERVICE $ 931,093 686,673 561,406 517,343 534,249
ANNUAL INTEREST ($000)(22) $ 175,350 200,010 200,010 209,767 217,151
ANNUAL INTEREST COVERAGE (23) 5.31 3.43 2.81 2.47 2.46
2001-10 AVG INTEREST COVERAGE (24) 2.93
EBITDA ADJUSTMENTS TO
NET OPERATING REVENUE:
Plus: Cash-to-Book Lease Adjustment $ 99,554 73,957 54,209 24,989 19,494
EBITDA (25) $1,194,676 872,354 764,987 569,686 553,748
INTEREST W/O CAP EX FACILITY (26) $ 175,350 200,010 200,010 204,758 204,758
EBITDA/INTEREST COVERAGE (27) 6.81 4.36 3.82 2.78 2.70
2001-10 AVG EBITDA/INT COVERAGE (28) 3.72
Year Ending December 31, 2006 2007 2008 2009 2010
- ------------------------ ---- ---- ---- ---- ----
CONSOLIDATED
PERFORMANCE
Annual Average Capacity (MW)(2) 12,587 12,587 12,587 12,587 12,587
Average Capacity Factor (%)(3) 36.0% 35.8% 35.0% 34.8% 34.9%
Contract Energy Sales (GWh)(4) 2,395 2,430 2,283 2,329 2,417
Market Energy Sales (GWh)(4) 37,289 37,046 36,254 36,059 36,061
----------- ----------- ----------- ----------- -----------
Total Energy Sales (GWh) 39,684 39,476 38,536 38,388 38,478
Total Steam Sales (MMBtu)(5) 962 962 962 962 962
Fuel Consumption (BBtu) 386,517 385,077 375,382 374,221 375,199
Average Net Heat Rate (Btu/kWh)(6) 9,740 9,755 9,741 9,749 9,751
SO(2) Allowances Purchased (Tons)(7) 28,101 27,240 27,805 29,684 40,314
NO(X) Allowances Purchased (Tons)(8) 331 (254) (2,523) (2,403) (2,270)
COMMODITY PRICES
General Inflation (%)(9) 2.60 2.60 2.60 2.60 2.60
Contract Electricity Price ($/MWh)(10) 28.26 28.61 26.29 22.50 22.03
Market Electricity Price ($/MWh)(11) 53.59 56.41 58.07 61.05 63.58
Steam Price ($/MMBtu)(12) 9.86 10.07 10.36 10.60 10.86
Fuel Price ($/MMBtu)(13) 2.36 2.42 2.47 2.54 2.60
SO(2) Allowances ($/Ton)(14) 171 175 180 184 189
NO(X) Allowances ($/Ton)(15) 1,744 1,790 1,836 1,884 1,933
OPERATING REVENUES ($000)
Contract Electricity Revenues
Mirant California (16) 311 258 258 0 0
Mirant New England 0 0 0 0 0
Mirant Texas 0 0 0 0 0
State Line 50,127 50,856 51,563 52,393 53,257
Mirant Wisconsin 17,242 18,412 8,201 0 0
Market Electricity Revenues
Mirant Mid-Atlantic 1,071,098 1,100,614 1,100,080 1,131,884 1,179,576
Mirant California 451,835 506,677 496,016 485,542 508,011
Mirant New York 243,507 248,728 250,774 267,290 295,201
Mirant New England 139,845 140,151 147,087 191,776 187,116
Mirant Texas 91,832 93,298 94,587 94,528 95,197
State Line 0 0 0 0 0
Mirant Wisconsin 255 348 16,694 30,467 27,639
Steam Revenues 9,481 9,688 9,966 10,191 10,447
----------- ----------- ----------- ----------- -----------
Total Operating Revenues 2,075,533 2,169,030 2,175,226 2,264,071 2,356,444
OPERATING EXPENSES ($000)(17)
Fuel
Mirant Mid-Atlantic 404,432 409,238 412,903 426,544 442,603
Mirant California 240,125 268,037 256,745 246,988 260,955
Mirant New York 133,616 128,856 125,690 132,520 136,506
Mirant New England 79,323 70,522 74,494 85,660 79,285
Mirant Texas 53,930 53,818 53,807 52,446 52,102
State Line 0 0 0 0 0
Mirant Wisconsin 72 76 3,899 5,089 2,867
Emissions Allowances 5,318 4,260 314 897 3,200
Operations & Maintenance 224,957 231,676 237,097 242,919 249,007
Major Maintenance 18,049 19,034 16,816 16,970 17,070
Insurance 18,225 18,695 19,184 19,684 20,200
Property and Gross Receipts Taxes (18) 91,241 92,866 94,687 96,536 98,158
Facility Administration and General 6,973 7,154 7,338 7,535 7,733
Corporate Administration and General 51,479 52,817 54,187 55,595 57,040
Other (19) 139,458 147,141 156,392 178,893 177,740
----------- ----------- ----------- ----------- -----------
Total Operating Expenses 1,467,197 1,504,190 1,513,553 1,568,276 1,604,466
NET OPERATING REVENUES ($000) 608,336 664,841 661,673 695,795 751,977
CAPITAL EXPENDITURES (20) 112,213 111,994 110,414 71,677 68,342
FUNDS FROM CAP EX FACILITY (21) 80,916 0 0 0 0
CASH AVAILABLE FOR DEBT SERVICE 577,039 552,846 551,259 624,118 683,635
ANNUAL INTEREST ($000)(22) 224,124 224,124 224,124 224,124 224,124
ANNUAL INTEREST COVERAGE (23) 2.57 2.47 2.46 2.78 3.05
2001-10 AVG INTEREST COVERAGE (24)
EBITDA ADJUSTMENTS TO
NET OPERATING REVENUE:
Plus: Cash-to-Book Lease Adjustment 9,159 15,836 24,212 45,829 43,709
EBITDA (25) 617,495 680,677 685,885 741,624 795,686
INTEREST W/O CAP EX FACILITY (26) 204,758 204,758 204,758 204,758 204,758
EBITDA/INTEREST COVERAGE (27) 3.02 3.32 3.35 3.62 3.89
2001-10 AVG EBITDA/INT COVERAGE (28)
A-75
Exhibit A-7
Mirant Americas Generation, Inc. Facilities
Projected Operating Results
Sensitivity F - Reduced Availability
Year Ending December 31, 2011 2012 2013 2014 2015
- ------------------------ ---- ---- ---- ---- ----
CONSOLIDATED
PERFORMANCE
Annual Average Capacity (MW)(2) 12,587 12,587 12,587 12,587 12,587
Average Capacity Factor (%)(3) 36.1% 35.1% 35.3% 35.0% 34.3%
Contract Energy Sales (GWh)(4) 2,495 2,537 0 0 0
Market Energy Sales (GWh)(4) 37,318 36,190 38,912 38,644 37,859
---------- ----------- ----------- ----------- -----------
Total Energy Sales (GWh) 39,813 38,727 38,912 38,644 37,859
Total Steam Sales (MMBtu)(5) 962 962 962 962 962
Fuel Consumption (BBtu) 388,968 378,214 380,070 377,175 369,274
Average Net Heat Rate (Btu/kWh)(6) 9,770 9,766 9,767 9,760 9,754
SO(2) Allowances Purchased (Tons)(7) 42,353 41,302 51,196 51,310 52,546
NO(X) Allowances Purchased (Tons)(8) (1,962) (2,056) (1,464) (1,324) (1,535)
COMMODITY PRICES
General Inflation (%)(9) 2.60 2.60 2.60 2.60 2.60
Contract Electricity Price ($/MWh)(10) $ 21.69 21.67 0.00 0.00 0.00
Market Electricity Price ($/MWh)(11) $ 65.14 67.32 68.35 69.82 71.62
Steam Price ($/MMBtu)(12) $ 11.11 11.39 11.66 11.96 12.26
Fuel Price ($/MMBtu)(13) $ 2.71 2.74 2.91 2.98 3.01
SO(2) Allowances ($/Ton)(14) $ 194 199 204 209 215
NO(X) Allowances ($/Ton)(15) $ 1,983 2,035 2,088 2,142 2,197
OPERATING REVENUES ($000)
Contract Electricity Revenues
Mirant California (16) $ 0 0 0 0 0
Mirant New England $ 0 0 0 0 0
Mirant Texas $ 0 0 0 0 0
State Line $ 54,133 54,986 0 0 0
Mirant Wisconsin $ 0 0 0 0 0
Market Electricity Revenues
Mirant Mid-Atlantic $1,240,146 1,252,041 1,300,914 1,314,983 1,344,866
Mirant California $ 559,791 541,345 563,860 551,815 548,150
Mirant New York $ 308,367 321,471 337,854 367,825 346,672
Mirant New England $ 199,944 198,914 208,033 210,065 216,205
Mirant Texas $ 95,840 95,863 95,646 95,748 92,046
State Line $ 0 0 127,644 130,612 135,985
Mirant Wisconsin $ 26,825 26,499 25,886 27,140 27,342
Steam Revenues $ 10,689 10,955 11,215 11,498 11,786
---------- ----------- ----------- ----------- -----------
Total Operating Revenues $2,495,735 2,502,074 2,671,052 2,709,686 2,723,052
OPERATING EXPENSES ($000)(17)
Fuel
Mirant Mid-Atlantic $ 464,896 467,745 481,466 488,466 500,860
Mirant California $ 301,933 290,670 305,232 297,545 283,106
Mirant New York $ 144,498 139,301 145,816 163,209 149,504
Mirant New England $ 89,157 88,488 93,631 94,098 101,175
Mirant Texas $ 51,313 49,786 46,532 45,143 41,542
State Line $ 0 0 32,738 32,845 34,302
Mirant Wisconsin $ 2,048 1,542 775 1,489 1,396
Emissions Allowances $ 4,297 4,013 7,381 7,889 7,898
Operations & Maintenance $ 256,600 264,400 271,404 278,056 284,685
Major Maintenance $ 22,565 23,202 22,715 20,579 20,714
Insurance $ 20,725 21,258 21,812 22,382 22,963
Property and Gross Receipts Taxes (18) $ 99,889 101,681 103,511 105,445 107,396
Facility Administration and General $ 7,928 8,136 8,347 8,561 8,787
Corporate Administration and General $ 58,526 60,049 61,608 63,208 64,853
Other (19) $ 172,519 170,935 178,478 172,457 152,559
---------- ----------- ----------- ----------- -----------
Total Operating Expenses $1,696,894 1,691,206 1,781,446 1,801,372 1,781,739
NET OPERATING REVENUES ($000) $ 798,841 810,868 889,606 908,314 941,313
CAPITAL EXPENDITURES (20) $ 117,099 118,150 95,631 86,021 114,960
FUNDS FROM CAP EX FACILITY (21) $ 0 0 0 0 0
CASH AVAILABLE FOR DEBT SERVICE $ 681,742 692,718 793,975 822,293 826,353
ANNUAL INTEREST ($000)(22) $ 224,124 224,124 224,124 224,124 224,124
ANNUAL INTEREST COVERAGE (23) 3.04 3.09 3.54 3.67 3.69
2001-10 AVG INTEREST COVERAGE (24) 2.93
EBITDA ADJUSTMENTS TO
NET OPERATING REVENUE:
Plus: Cash-to-Book Lease Adjustment $ 37,489 34,989 41,490 34,489 13,489
EBITDA (25) $ 836,330 845,857 931,096 942,803 954,802
INTEREST W/O CAP EX FACILITY (26) $ 204,758 204,758 204,758 204,758 204,758
EBITDA/INTEREST COVERAGE (27) 4.08 4.13 4.55 4.60 4.66
2001-10 AVG EBITDA/INT COVERAGE (28) 3.72
Year Ending December 31, 2016 2017 2018 2019 2020
- ------------------------ ---- ---- ---- ---- ----
CONSOLIDATED
PERFORMANCE
Annual Average Capacity (MW)(2) 12,587 12,587 12,587 12,587 12,587
Average Capacity Factor (%)(3) 33.7% 33.9% 33.5% 33.6% 32.5%
Contract Energy Sales (GWh)(4) 0 0 0 0 0
Market Energy Sales (GWh)(4) 37,182 37,370 36,944 37,067 35,870
----------- ----------- ----------- ----------- -----------
Total Energy Sales (GWh) 37,182 37,370 36,944 37,067 35,870
Total Steam Sales (MMBtu)(5) 962 962 962 962 962
Fuel Consumption (BBtu) 362,414 364,386 360,221 361,591 349,688
Average Net Heat Rate (Btu/kWh)(6) 9,747 9,751 9,750 9,755 9,749
SO(2) Allowances Purchased (Tons)(7) 51,393 51,315 51,882 51,218 51,765
NO(X) Allowances Purchased (Tons)(8) (1,678) (1,678) (1,588) (1,601) (1,937)
COMMODITY PRICES
General Inflation (%)(9) 2.60 2.60 2.60 2.60 2.60
Contract Electricity Price ($/MWh)(10) 0.00 0.00 0.00 0.00 0.00
Market Electricity Price ($/MWh)(11) 73.46 75.51 77.98 79.76 80.60
Steam Price ($/MMBtu)(12) 12.61 12.91 13.23 13.54 13.86
Fuel Price ($/MMBtu)(13) 3.07 3.17 3.23 3.33 3.34
SO(2) Allowances ($/Ton)(14) 220 226 232 238 244
NO(X) Allowances ($/Ton)(15) 2,255 2,313 2,373 2,435 2,498
OPERATING REVENUES ($000)
Contract Electricity Revenues
Mirant California (16) 0 0 0 0 0
Mirant New England 0 0 0 0 0
Mirant Texas 0 0 0 0 0
State Line 0 0 0 0 0
Mirant Wisconsin 0 0 0 0 0
Market Electricity Revenues
Mirant Mid-Atlantic 1,365,138 1,400,240 1,450,786 1,479,662 1,522,218
Mirant California 546,744 575,823 550,241 594,005 581,310
Mirant New York 348,772 355,960 385,176 376,294 267,313
Mirant New England 212,428 225,225 226,890 233,815 240,501
Mirant Texas 91,000 92,523 91,407 91,492 91,075
State Line 140,041 144,650 149,206 153,691 160,611
Mirant Wisconsin 27,139 27,298 27,116 27,489 27,961
Steam Revenues 12,131 12,417 12,728 13,023 13,332
----------- ----------- ----------- ----------- -----------
Total Operating Revenues 2,743,393 2,834,136 2,893,550 2,969,471 2,904,321
OPERATING EXPENSES ($000)(17)
Fuel
Mirant Mid-Atlantic 506,635 521,676 534,391 549,486 568,927
Mirant California 282,095 299,359 279,686 310,421 298,221
Mirant New York 150,758 152,981 167,339 160,949 111,972
Mirant New England 95,955 105,182 106,289 110,646 112,901
Mirant Texas 39,944 40,288 38,597 37,579 36,761
State Line 34,883 34,885 35,534 35,804 37,295
Mirant Wisconsin 1,445 767 849 904 679
Emissions Allowances 7,530 7,714 8,254 8,284 7,795
Operations & Maintenance 291,484 299,242 306,498 314,737 322,353
Major Maintenance 23,186 24,489 21,651 21,841 22,020
Insurance 23,554 24,167 24,800 25,444 26,103
Property and Gross Receipts Taxes (18) 109,394 111,442 113,539 115,709 117,933
Facility Administration and General 9,015 9,242 9,489 9,734 9,990
Corporate Administration and General 66,541 68,267 70,045 71,864 73,735
Other (19) 193,626 188,789 150,871 186,600 153,279
----------- ----------- ----------- ----------- -----------
Total Operating Expenses 1,836,046 1,888,491 1,867,833 1,960,002 1,899,964
NET OPERATING REVENUES ($000) 907,348 945,645 1,025,717 1,009,469 1,004,357
CAPITAL EXPENDITURES (20) 87,647 102,602 129,220 80,659 116,674
FUNDS FROM CAP EX FACILITY (21) 0 0 0 0 0
CASH AVAILABLE FOR DEBT SERVICE 819,701 843,043 896,497 928,811 887,683
ANNUAL INTEREST ($000)(22) 224,124 224,124 224,124 224,124 224,124
ANNUAL INTEREST COVERAGE (23) 3.66 3.76 4.00 4.14 3.96
2001-10 AVG INTEREST COVERAGE (24)
EBITDA ADJUSTMENTS TO
NET OPERATING REVENUE:
Plus: Cash-to-Book Lease Adjustment 53,489 47,489 8,489 42,988 8,489
EBITDA (25) 960,837 993,134 1,034,206 1,052,457 1,012,846
INTEREST W/O CAP EX FACILITY (26) 204,758 204,758 204,758 204,758 204,758
EBITDA/INTEREST COVERAGE (27) 4.69 4.85 5.05 5.14 4.95
2001-10 AVG EBITDA/INT COVERAGE (28)
A-76
Footnotes to Exhibit A-7
The footnotes to Exhibit A-7 are the same as the footnotes for
Exhibit A-1, except:
3. Availability of the Mirant Generation Facilities is assumed to be 5
percentage points less than that assumed in the Base Case based on a 5
percentage point increase in the forced outage rate for each facility.
Capacity factor is assumed to decrease such that annual generation for
each facility is reduced by 5 percent from that assumed in the Base Case.
A-77
Exhibit A-8
Mirant Americas Generation, Inc. Facilities
Projected Operating Results
Sensitivity G - Increased Heat Rate
Year Ending December 31, 2001(1) 2002 2003 2004 2005
- ------------------------ ------- ---- ---- ---- ----
CONSOLIDATED
PERFORMANCE
Annual Average Capacity (MW)(2) 12,587 12,587 12,587 12,587 12,587
Average Capacity Factor (%)(3) 49.4% 45.7% 43.6% 39.3% 37.8%
Contract Energy Sales (GWh)(4) 6,339 6,598 4,662 3,140 2,746
Market Energy Sales (GWh)(4) 48,143 43,741 43,397 40,161 38,891
---------- ----------- ----------- ----------- -----------
Total Energy Sales (GWh) 54,482 50,338 48,059 43,301 41,636
Total Steam Sales (MMBtu)(5) 962 962 962 962 962
Fuel Consumption (BBtu) 564,242 518,341 492,719 443,802 426,264
Average Net Heat Rate (Btu/kWh)(6) 10,356 10,297 10,252 10,249 10,238
SO(2) Allowances Purchased (Tons)(7) 82,299 72,042 63,920 41,234 40,321
NO(X) Allowances Purchased (Tons)(8) 7,494 609 5,906 4,370 3,630
COMMODITY PRICES
General Inflation (%)(9) 2.60 2.60 2.60 2.60 2.60
Contract Electricity Price ($/MWh)(10) $ 44.04 36.20 29.41 34.53 28.96
Market Electricity Price ($/MWh)(11) $ 69.21 60.44 57.22 53.05 51.18
Steam Price ($/MMBtu)(12) $ 12.98 12.09 12.09 10.71 9.57
Fuel Price ($/MMBtu)(13) $ 3.37 2.90 2.71 2.59 2.30
SO(2) Allowances ($/Ton)(14) $ 150 154 158 162 166
NO(X) Allowances ($/Ton)(15) $ 1,000 1,000 2,300 2,000 1,700
OPERATING REVENUES ($000)
Contract Electricity Revenues
Mirant California (16) $ 28,168 27,605 29,677 19,663 2,249
Mirant New England $ 154,804 104,778 0 0 0
Mirant Texas $ 32,008 41,002 41,390 21,795 9,176
State Line $ 49,830 50,958 51,452 52,126 52,661
Mirant Wisconsin $ 14,322 14,475 14,615 14,849 15,436
Market Electricity Revenues
Mirant Mid-Atlantic $1,452,190 1,276,686 1,131,958 1,055,042 1,027,571
Mirant California $1,262,390 825,938 823,245 574,597 474,707
Mirant New York $ 475,676 398,285 338,171 294,482 274,288
Mirant New England $ 141,770 142,545 189,584 143,484 141,404
Mirant Texas $ 0 0 0 62,760 72,150
State Line $ 0 0 0 0 0
Mirant Wisconsin $ 130 89 113 147 247
Steam Revenues $ 12,480 11,626 11,627 10,303 9,207
---------- ----------- ----------- ----------- -----------
Total Operating Revenues $3,623,768 2,893,987 2,631,832 2,249,248 2,079,096
OPERATING EXPENSES ($000)(17)
Fuel
Mirant Mid-Atlantic $ 562,516 509,607 451,298 447,513 423,577
Mirant California $ 817,347 558,085 543,984 386,432 259,136
Mirant New York $ 293,028 249,862 194,168 178,209 161,614
Mirant New England $ 229,262 187,081 145,188 92,357 84,784
Mirant Texas $ 0 0 0 45,231 49,893
State Line $ 0 0 0 0 0
Mirant Wisconsin $ 46 31 33 47 80
Emissions Allowances $ 19,826 11,688 23,653 15,383 12,814
Operations & Maintenance $ 225,882 218,377 216,877 215,287 219,748
Major Maintenance $ 17,120 17,923 17,554 15,920 16,057
Insurance $ 15,964 16,448 16,872 17,308 17,763
Property and Gross Receipts Taxes (18) $ 83,326 85,201 86,634 88,114 89,639
Facility Administration and General $ 6,075 6,298 6,457 6,622 6,795
Corporate Administration and General $ 45,274 46,455 47,661 48,897 50,173
Other (19) $ 227,336 201,425 182,505 153,521 148,994
---------- ----------- ----------- ----------- -----------
Total Operating Expenses $2,543,003 2,108,481 1,932,884 1,710,841 1,541,067
NET OPERATING REVENUES ($000) $1,080,766 785,506 698,948 538,407 538,029
CAPITAL EXPENDITURES (20) $ 163,865 111,679 149,305 85,426 85,583
FUNDS FROM CAP EX FACILITY (21) $ 0 0 0 58,131 85,578
CASH AVAILABLE FOR DEBT SERVICE $ 916,901 673,827 549,643 511,112 538,024
ANNUAL INTEREST ($000)(22) $ 175,350 200,010 200,010 209,767 217,142
ANNUAL INTEREST COVERAGE (23) 5.23 3.37 2.75 2.44 2.48
2001-10 AVG INTEREST COVERAGE (24) 2.93
EBITDA ADJUSTMENTS TO
NET OPERATING REVENUE:
Plus: Cash-to-Book Lease Adjustment $ 99,554 73,957 54,209 24,989 19,494
EBITDA (25) $1,180,320 859,463 753,157 563,396 557,523
INTEREST W/O CAP EX FACILITY (26) $ 175,350 200,010 200,010 204,758 204,758
EBITDA/INTEREST COVERAGE (27) 6.73 4.30 3.77 2.75 2.72
2001-10 AVG EBITDA/INT COVERAGE (28) 3.73
Year Ending December 31, 2006 2007 2008 2009 2010
- ------------------------ ---- ---- ---- ---- ----
CONSOLIDATED
PERFORMANCE
Annual Average Capacity (MW)(2) 12,587 12,587 12,587 12,587 12,587
Average Capacity Factor (%)(3) 37.9% 37.7% 36.8% 36.6% 36.7%
Contract Energy Sales (GWh)(4) 2,521 2,558 2,403 2,451 2,544
Market Energy Sales (GWh)(4) 39,252 38,995 38,162 37,956 37,958
----------- ----------- ----------- ----------- -----------
Total Energy Sales (GWh) 41,773 41,553 40,565 40,408 40,503
Total Steam Sales (MMBtu)(5) 962 962 962 962 962
Fuel Consumption (BBtu) 427,201 425,613 414,889 413,618 414,690
Average Net Heat Rate (Btu/kWh)(6) 10,227 10,243 10,228 10,236 10,239
SO(2) Allowances Purchased (Tons)(7) 47,253 46,298 46,921 49,004 59,780
NO(X) Allowances Purchased (Tons)(8) 1,483 839 (1,672) (1,538) (1,391)
COMMODITY PRICES
General Inflation (%)(9) 2.60 2.60 2.60 2.60 2.60
Contract Electricity Price ($/MWh)(10) 28.45 28.78 26.55 22.78 22.31
Market Electricity Price ($/MWh)(11) 53.57 56.39 58.03 60.99 63.52
Steam Price ($/MMBtu)(12) 9.86 10.07 10.36 10.60 10.86
Fuel Price ($/MMBtu)(13) 2.36 2.41 2.47 2.53 2.59
SO(2) Allowances ($/Ton)(14) 171 175 180 184 189
NO(X) Allowances ($/Ton)(15) 1,744 1,790 1,836 1,884 1,933
OPERATING REVENUES ($000)
Contract Electricity Revenues
Mirant California (16) 311 258 258 0 0
Mirant New England 0 0 0 0 0
Mirant Texas 0 0 0 0 0
State Line 53,434 54,211 54,963 55,845 56,763
Mirant Wisconsin 17,981 19,154 8,571 0 0
Market Electricity Revenues
Mirant Mid-Atlantic 1,127,472 1,158,541 1,157,979 1,191,457 1,241,658
Mirant California 475,614 533,345 522,118 511,096 534,746
Mirant New York 256,322 261,817 263,972 281,361 310,737
Mirant New England 147,205 147,526 154,829 201,869 196,963
Mirant Texas 95,796 97,225 98,503 98,351 98,979
State Line 0 0 0 0 0
Mirant Wisconsin 260 354 16,993 30,853 27,855
Steam Revenues 9,481 9,688 9,966 10,191 10,447
----------- ----------- ----------- ----------- -----------
Total Operating Revenues 2,183,876 2,282,119 2,288,152 2,381,023 2,478,148
OPERATING EXPENSES ($000)(17)
Fuel
Mirant Mid-Atlantic 446,997 452,319 456,356 471,450 489,173
Mirant California 264,288 295,124 282,591 271,780 287,156
Mirant New York 147,674 142,415 138,914 146,465 150,870
Mirant New England 87,671 77,945 82,340 94,679 87,633
Mirant Texas 59,607 59,484 59,472 57,967 57,585
State Line 0 0 0 0 0
Mirant Wisconsin 79 84 4,311 5,624 3,167
Emissions Allowances 10,590 9,544 5,306 6,081 8,576
Operations & Maintenance 226,344 233,120 238,545 244,393 250,529
Major Maintenance 18,011 19,024 16,798 16,973 17,072
Insurance 18,225 18,695 19,184 19,684 20,200
Property and Gross Receipts Taxes (18) 91,265 92,890 94,708 96,548 98,165
Facility Administration and General 6,973 7,154 7,338 7,535 7,733
Corporate Administration and General 51,479 52,817 54,187 55,595 57,040
Other (19) 139,454 147,139 156,392 178,895 177,745
----------- ----------- ----------- ----------- -----------
Total Operating Expenses 1,568,656 1,607,753 1,616,442 1,673,669 1,712,645
NET OPERATING REVENUES ($000) 615,219 674,366 671,710 707,354 765,504
CAPITAL EXPENDITURES (20) 112,142 111,975 110,382 71,681 68,343
FUNDS FROM CAP EX FACILITY (21) 80,916 0 0 0 0
CASH AVAILABLE FOR DEBT SERVICE 583,993 562,391 561,328 635,673 697,161
ANNUAL INTEREST ($000)(22) 224,115 224,115 224,115 224,115 224,115
ANNUAL INTEREST COVERAGE (23) 2.61 2.51 2.50 2.84 3.11
2001-10 AVG INTEREST COVERAGE (24)
EBITDA ADJUSTMENTS TO
NET OPERATING REVENUE:
Plus: Cash-to-Book Lease Adjustment 9,159 15,836 24,212 45,829 43,709
EBITDA (25) 624,378 690,202 695,922 753,183 809,213
INTEREST W/O CAP EX FACILITY (26) 204,758 204,758 204,758 204,758 204,758
EBITDA/INTEREST COVERAGE (27) 3.05 3.37 3.40 3.68 3.95
2001-10 AVG EBITDA/INT COVERAGE (28)
A-78
Exhibit A-8
Mirant Americas Generation, Inc. Facilities
Projected Operating Results
Sensitivity G - Increased Heat Rate
Year Ending December 31, 2011 2012 2013 2014 2015
- ------------------------ ---- ---- ---- ---- ----
CONSOLIDATED
PERFORMANCE
Annual Average Capacity (MW)(2) 12,587 12,587 12,587 12,587 12,587
Average Capacity Factor (%)(3) 38.0% 37.0% 37.1% 36.9% 36.1%
Contract Energy Sales (GWh)(4) 2,627 2,671 0 0 0
Market Energy Sales (GWh)(4) 39,282 38,095 40,960 40,678 39,851
---------- ----------- ----------- ----------- -----------
Total Energy Sales (GWh) 41,909 40,765 40,960 40,678 39,851
Total Steam Sales (MMBtu)(5) 962 962 962 962 962
Fuel Consumption (BBtu) 429,906 418,023 420,076 416,878 408,150
Average Net Heat Rate (Btu/kWh)(6) 10,258 10,254 10,256 10,248 10,242
SO(2) Allowances Purchased (Tons)(7) 62,031 60,871 71,807 71,935 73,297
NO(X) Allowances Purchased (Tons)(8) (1,052) (1,155) (500) (346) (579)
COMMODITY PRICES
General Inflation (%)(9) 2.60 2.60 2.60 2.60 2.60
Contract Electricity Price ($/MWh)(10) $ 21.97 21.94 0.00 0.00 0.00
Market Electricity Price ($/MWh)(11) $ 65.08 67.24 68.23 69.69 71.48
Steam Price ($/MMBtu)(12) $ 11.11 11.39 11.66 11.96 12.26
Fuel Price ($/MMBtu)(13) $ 2.71 2.74 2.91 2.97 3.01
SO(2) Allowances ($/Ton)(14) $ 194 199 204 209 215
NO(X) Allowances ($/Ton)(15) $ 1,983 2,035 2,088 2,142 2,197
OPERATING REVENUES ($000)
Contract Electricity Revenues
Mirant California (16) $ 0 0 0 0 0
Mirant New England $ 0 0 0 0 0
Mirant Texas $ 0 0 0 0 0
State Line $ 57,697 58,605 0 0 0
Mirant Wisconsin $ 0 0 0 0 0
Market Electricity Revenues
Mirant Mid-Atlantic $1,305,417 1,317,938 1,369,384 1,384,193 1,415,649
Mirant California $ 589,255 569,840 593,542 580,857 576,997
Mirant New York $ 324,596 338,390 355,636 387,184 364,919
Mirant New England $ 210,470 209,382 218,983 221,121 227,584
Mirant Texas $ 99,559 99,461 98,997 98,965 95,008
State Line $ 0 0 132,163 135,268 140,891
Mirant Wisconsin $ 26,975 26,610 25,942 27,250 27,443
Steam Revenues $ 10,689 10,955 11,215 11,498 11,786
---------- ----------- ----------- ----------- -----------
Total Operating Revenues $2,624,658 2,631,181 2,805,862 2,846,336 2,860,277
OPERATING EXPENSES ($000)(17)
Fuel
Mirant Mid-Atlantic $ 513,822 516,960 532,144 539,885 553,594
Mirant California $ 332,409 319,938 335,962 327,445 311,435
Mirant New York $ 159,699 153,965 161,159 180,388 165,257
Mirant New England $ 98,539 97,799 103,490 103,998 111,829
Mirant Texas $ 56,712 55,025 51,435 49,898 45,912
State Line $ 0 0 36,184 36,301 37,913
Mirant Wisconsin $ 2,264 1,702 856 1,643 1,544
Emissions Allowances $ 9,919 9,739 13,594 14,302 14,456
Operations & Maintenance $ 258,216 266,017 273,066 279,740 286,384
Major Maintenance $ 22,469 23,170 22,666 20,541 20,643
Insurance $ 20,725 21,258 21,812 22,382 22,963
Property and Gross Receipts Taxes (18) $ 99,894 101,685 103,513 105,448 107,399
Facility Administration and General $ 7,928 8,136 8,347 8,561 8,787
Corporate Administration and General $ 58,526 60,049 61,608 63,208 64,853
Other (19) $ 172,515 170,930 178,470 172,452 152,564
---------- ----------- ----------- ----------- -----------
Total Operating Expenses $1,813,637 1,806,373 1,904,306 1,926,192 1,905,533
NET OPERATING REVENUES ($000) $ 811,021 824,808 901,556 920,144 954,744
CAPITAL EXPENDITURES (20) $ 117,126 118,159 95,645 86,072 115,004
FUNDS FROM CAP EX FACILITY (21) $ 0 0 0 0 0
CASH AVAILABLE FOR DEBT SERVICE $ 693,895 706,649 805,911 834,072 839,741
ANNUAL INTEREST ($000)(22) $ 224,115 224,115 224,115 224,115 224,115
ANNUAL INTEREST COVERAGE (23) 3.10 3.15 3.60 3.72 3.75
2001-10 AVG INTEREST COVERAGE (24) 2.93
EBITDA ADJUSTMENTS TO
NET OPERATING REVENUE:
Plus: Cash-to-Book Lease Adjustment $ 37,489 34,989 41,490 34,489 13,489
EBITDA (25) $ 848,510 859,797 943,046 954,633 968,233
INTEREST W/O CAP EX FACILITY (26) $ 204,758 204,758 204,758 204,758 204,758
EBITDA/INTEREST COVERAGE (27) 4.14 4.20 4.61 4.66 4.73
2001-10 AVG EBITDA/INT COVERAGE (28) 3.73
Year Ending December 31, 2016 2017 2018 2019 2020
- ------------------------ ---- ---- ---- ---- ----
CONSOLIDATED
PERFORMANCE
Annual Average Capacity (MW)(2) 12,587 12,587 12,587 12,587 12,587
Average Capacity Factor (%)(3) 35.5% 35.7% 35.3% 35.4% 34.2%
Contract Energy Sales (GWh)(4) 0 0 0 0 0
Market Energy Sales (GWh)(4) 39,139 39,337 38,889 39,018 37,758
----------- ----------- ----------- ----------- -----------
Total Energy Sales (GWh) 39,139 39,337 38,889 39,018 37,758
Total Steam Sales (MMBtu)(5) 962 962 962 962 962
Fuel Consumption (BBtu) 400,568 402,739 398,137 399,656 386,499
Average Net Heat Rate (Btu/kWh)(6) 10,234 10,238 10,238 10,243 10,236
SO(2) Allowances Purchased (Tons)(7) 72,024 71,935 72,565 71,826 72,435
NO(X) Allowances Purchased (Tons)(8) (738) (736) (639) (653) (1,024)
COMMODITY PRICES
General Inflation (%)(9) 2.60 2.60 2.60 2.60 2.60
Contract Electricity Price ($/MWh)(10) 0.00 0.00 0.00 0.00 0.00
Market Electricity Price ($/MWh)(11) 73.31 75.36 77.83 79.61 80.44
Steam Price ($/MMBtu)(12) 12.61 12.91 13.23 13.54 13.86
Fuel Price ($/MMBtu)(13) 3.06 3.17 3.22 3.33 3.33
SO(2) Allowances ($/Ton)(14) 220 226 232 238 244
NO(X) Allowances ($/Ton)(15) 2,255 2,313 2,373 2,435 2,498
OPERATING REVENUES ($000)
Contract Electricity Revenues
Mirant California (16) 0 0 0 0 0
Mirant New England 0 0 0 0 0
Mirant Texas 0 0 0 0 0
State Line 0 0 0 0 0
Mirant Wisconsin 0 0 0 0 0
Market Electricity Revenues
Mirant Mid-Atlantic 1,436,988 1,473,937 1,527,143 1,557,539 1,602,335
Mirant California 575,519 606,129 579,205 625,267 611,903
Mirant New York 367,130 374,693 405,448 396,099 281,384
Mirant New England 223,610 237,080 238,831 246,121 253,161
Mirant Texas 93,812 95,357 94,128 94,149 93,642
State Line 145,171 149,936 154,755 159,455 166,670
Mirant Wisconsin 27,236 27,352 27,174 27,554 28,009
Steam Revenues 12,131 12,417 12,728 13,023 13,332
----------- ----------- ----------- ----------- -----------
Total Operating Revenues 2,881,597 2,976,901 3,039,412 3,119,207 3,050,436
OPERATING EXPENSES ($000)(17)
Fuel
Mirant Mid-Atlantic 559,953 576,583 590,647 607,357 628,815
Mirant California 310,301 329,279 307,492 341,422 327,884
Mirant New York 166,627 169,092 184,959 177,896 123,747
Mirant New England 106,063 116,264 117,467 122,285 124,785
Mirant Texas 44,144 44,523 42,663 41,534 40,630
State Line 38,556 38,556 39,274 39,573 41,219
Mirant Wisconsin 1,597 847 936 997 750
Emissions Allowances 14,198 14,554 15,311 15,506 15,128
Operations & Maintenance 293,190 301,006 308,272 316,576 324,210
Major Maintenance 23,139 24,472 21,626 21,842 22,023
Insurance 23,554 24,167 24,800 25,444 26,103
Property and Gross Receipts Taxes (18) 109,397 111,444 113,541 115,711 117,934
Facility Administration and General 9,015 9,242 9,489 9,734 9,990
Corporate Administration and General 66,541 68,267 70,045 71,864 73,735
Other (19) 193,630 188,791 150,880 186,601 153,283
----------- ----------- ----------- ----------- -----------
Total Operating Expenses 1,959,905 2,017,088 1,997,402 2,094,342 2,030,235
NET OPERATING REVENUES ($000) 921,691 959,813 1,042,010 1,024,865 1,020,200
CAPITAL EXPENDITURES (20) 87,685 102,649 129,279 80,694 116,651
FUNDS FROM CAP EX FACILITY (21) 0 0 0 0 0
CASH AVAILABLE FOR DEBT SERVICE 834,006 857,164 912,731 944,171 903,549
ANNUAL INTEREST ($000)(22) 224,115 224,115 224,115 224,115 224,115
ANNUAL INTEREST COVERAGE (23) 3.72 3.82 4.07 4.21 4.03
2001-10 AVG INTEREST COVERAGE (24)
EBITDA ADJUSTMENTS TO
NET OPERATING REVENUE:
Plus: Cash-to-Book Lease Adjustment 53,489 47,489 8,489 42,988 8,489
EBITDA (25) 975,180 1,007,302 1,050,499 1,067,853 1,028,689
INTEREST W/O CAP EX FACILITY (26) 204,758 204,758 204,758 204,758 204,758
EBITDA/INTEREST COVERAGE (27) 4.76 4.92 5.13 5.22 5.02
2001-10 AVG EBITDA/INT COVERAGE (28)
A-79
Footnotes to Exhibit A-8
The footnotes to Exhibit A-8 are the same as the footnotes for
Exhibit A-1, except:
6. Heat rate for each of the Mirant Generation Facilities is assumed to be 5
percent higher than that assumed in the Base Case.
A-80
Exhibit A-9
Mirant Americas Generation, Inc. Facilities
Projected Operating Results
Sensitivity H - Increased Operating Expenses
Year Ending December 31, 2001(1) 2002 2003 2004 2005
- ------------------------ ------- ---- ---- ---- ----
CONSOLIDATED
PERFORMANCE
Annual Average Capacity (MW)(2) 12,587 12,587 12,587 12,587 12,587
Average Capacity Factor (%)(3) 49.4% 45.7% 43.6% 39.3% 37.8%
Contract Energy Sales (GWh)(4) 6,339 6,598 4,662 3,140 2,746
Market Energy Sales (GWh)(4) 48,143 43,741 43,397 40,161 38,891
---------- ----------- ----------- ----------- -----------
Total Energy Sales (GWh) 54,482 50,338 48,059 43,301 41,636
Total Steam Sales (MMBtu)(5) 962 962 962 962 962
Fuel Consumption (BBtu) 537,369 493,659 469,255 422,673 405,964
Average Net Heat Rate (Btu/kWh)(6) 9,863 9,807 9,764 9,761 9,750
SO(2) Allowances Purchased (Tons)(7) 71,055 61,286 53,549 31,946 31,076
NO(X) Allowances Purchased (Tons)(8) 6,167 (381) 5,119 3,657 2,952
COMMODITY PRICES
General Inflation (%)(9) 2.60 2.60 2.60 2.60 2.60
Contract Electricity Price ($/MWh)(10) $ 43.43 35.89 29.72 34.99 29.11
Market Electricity Price ($/MWh)(11) $ 69.21 60.44 57.22 53.05 51.18
Steam Price ($/MMBtu)(12) $ 12.98 12.09 12.09 10.71 9.57
Fuel Price ($/MMBtu)(13) $ 3.37 2.90 2.71 2.59 2.30
SO(2) Allowances ($/Ton)(14) $ 150 154 158 162 166
NO(X) Allowances ($/Ton)(15) $ 1,000 1,000 2,300 2,000 1,700
OPERATING REVENUES ($000)
Contract Electricity Revenues
Mirant California (16) $ 28,168 27,605 29,677 19,894 2,249
Mirant New England $ 149,243 101,246 0 0 0
Mirant Texas $ 33,704 42,494 42,818 23,011 9,576
State Line $ 49,830 50,958 51,452 52,126 52,661
Mirant Wisconsin $ 14,322 14,475 14,615 14,849 15,436
Market Electricity Revenues
Mirant Mid-Atlantic $1,452,190 1,276,686 1,131,958 1,055,042 1,027,571
Mirant California $1,262,390 825,938 823,245 574,597 474,707
Mirant New York $ 475,676 398,285 338,171 294,482 274,288
Mirant New England $ 141,770 142,545 189,584 143,484 141,404
Mirant Texas $ 0 0 0 62,760 72,150
State Line $ 0 0 0 0 0
Mirant Wisconsin $ 130 89 113 147 247
Steam Revenues $ 12,480 11,626 11,627 10,303 9,207
---------- ----------- ----------- ----------- -----------
Total Operating Revenues $3,619,903 2,891,947 2,633,260 2,250,695 2,079,496
OPERATING EXPENSES ($000)(17)
Fuel
Mirant Mid-Atlantic $ 535,696 485,365 429,800 426,205 403,409
Mirant California $ 779,179 532,135 518,688 368,601 247,277
Mirant New York $ 279,079 237,979 184,925 169,727 153,913
Mirant New England $ 218,336 178,169 138,270 87,957 80,750
Mirant Texas $ 0 0 0 43,077 47,515
State Line $ 0 0 0 0 0
Mirant Wisconsin $ 44 29 32 45 76
Emissions Allowances $ 16,815 9,046 20,204 12,451 10,126
Operations & Maintenance $ 248,469 240,219 238,557 236,808 241,723
Major Maintenance $ 18,828 19,714 19,309 17,515 17,664
Insurance $ 17,562 18,093 18,564 19,041 19,538
Property and Gross Receipts Taxes (18) $ 91,658 93,712 95,297 96,919 98,598
Facility Administration and General $ 6,684 6,924 7,102 7,283 7,473
Corporate Administration and General $ 49,803 51,100 52,431 53,792 55,187
Other (19) $ 230,428 204,507 185,669 156,720 152,237
---------- ----------- ----------- ----------- -----------
Total Operating Expenses $2,492,581 2,076,992 1,908,848 1,696,141 1,535,486
NET OPERATING REVENUES ($000) $1,127,322 814,955 724,412 554,555 544,010
CAPITAL EXPENDITURES (20) $ 180,252 122,852 164,229 93,973 94,140
FUNDS FROM CAP EX FACILITY (21) $ 0 0 0 63,944 94,137
CASH AVAILABLE FOR DEBT SERVICE $ 947,070 692,103 560,183 524,526 544,007
ANNUAL INTEREST ($000)(22) $ 175,350 200,010 200,010 209,767 217,142
ANNUAL INTEREST COVERAGE (23) 5.40 3.46 2.80 2.50 2.51
2001-10 AVG INTEREST COVERAGE (24) 2.96
EBITDA ADJUSTMENTS TO
NET OPERATING REVENUE:
Plus: Cash-to-Book Lease Adjustment $ 99,554 73,957 54,209 24,989 19,494
EBITDA (25) $1,226,876 888,912 778,621 579,544 563,504
INTEREST W/O CAP EX FACILITY (26) $ 175,350 200,010 200,010 204,758 204,758
EBITDA/INTEREST COVERAGE (27) 7.00 4.44 3.89 2.83 2.75
2001-10 AVG EBITDA/INT COVERAGE (28) 3.80
Year Ending December 31, 2006 2007 2008 2009 2010
- ------------------------ ---- ---- ---- ---- ----
CONSOLIDATED
PERFORMANCE
Annual Average Capacity (MW)(2) 12,587 12,587 12,587 12,587 12,587
Average Capacity Factor (%)(3) 37.9% 37.7% 36.8% 36.6% 36.7%
Contract Energy Sales (GWh)(4) 2,521 2,558 2,403 2,451 2,544
Market Energy Sales (GWh)(4) 39,252 38,995 38,162 37,956 37,958
----------- ----------- ----------- ----------- -----------
Total Energy Sales (GWh) 41,773 41,553 40,565 40,408 40,503
Total Steam Sales (MMBtu)(5) 962 962 962 962 962
Fuel Consumption (BBtu) 406,865 405,345 395,141 393,919 394,949
Average Net Heat Rate (Btu/kWh)(6) 9,740 9,755 9,741 9,749 9,751
SO(2) Allowances Purchased (Tons)(7) 37,679 36,766 37,363 39,341 50,048
NO(X) Allowances Purchased (Tons)(8) 907 292 (2,099) (1,971) (1,831)
COMMODITY PRICES
General Inflation (%)(9) 2.60 2.60 2.60 2.60 2.60
Contract Electricity Price ($/MWh)(10) 28.45 28.78 26.55 22.78 22.31
Market Electricity Price ($/MWh)(11) 53.57 56.39 58.03 60.99 63.52
Steam Price ($/MMBtu)(12) 9.86 10.07 10.36 10.60 10.86
Fuel Price ($/MMBtu)(13) 2.36 2.42 2.47 2.54 2.60
SO(2) Allowances ($/Ton)(14) 171 175 180 184 189
NO(X) Allowances ($/Ton)(15) 1,744 1,790 1,836 1,884 1,933
OPERATING REVENUES ($000)
Contract Electricity Revenues
Mirant California (16) 311 258 258 0 0
Mirant New England 0 0 0 0 0
Mirant Texas 0 0 0 0 0
State Line 53,434 54,211 54,963 55,845 56,763
Mirant Wisconsin 17,981 19,154 8,571 0 0
Market Electricity Revenues
Mirant Mid-Atlantic 1,127,472 1,158,541 1,157,979 1,191,457 1,241,658
Mirant California 475,614 533,345 522,118 511,096 534,746
Mirant New York 256,322 261,817 263,972 281,361 310,737
Mirant New England 147,205 147,526 154,829 201,869 196,963
Mirant Texas 95,796 97,225 98,503 98,351 98,979
State Line 0 0 0 0 0
Mirant Wisconsin 260 354 16,993 30,853 27,855
Steam Revenues 9,481 9,688 9,966 10,191 10,447
----------- ----------- ----------- ----------- -----------
Total Operating Revenues 2,183,876 2,282,119 2,288,152 2,381,023 2,478,148
OPERATING EXPENSES ($000)(17)
Fuel
Mirant Mid-Atlantic 425,724 430,784 434,640 448,976 465,888
Mirant California 252,216 281,587 269,674 259,391 274,080
Mirant New York 140,646 135,635 132,304 139,500 143,690
Mirant New England 83,499 74,233 78,417 90,175 83,461
Mirant Texas 56,772 56,651 56,642 55,205 54,844
State Line 0 0 0 0 0
Mirant Wisconsin 76 80 4,105 5,358 3,017
Emissions Allowances 7,957 6,902 2,807 3,488 5,889
Operations & Maintenance 248,976 256,435 262,394 268,837 275,587
Major Maintenance 19,810 20,929 18,479 18,665 18,780
Insurance 20,047 20,567 21,107 21,652 22,215
Property and Gross Receipts Taxes (18) 100,389 102,175 104,175 106,200 107,980
Facility Administration and General 7,669 7,872 8,073 8,284 8,498
Corporate Administration and General 56,625 58,094 59,608 61,154 62,745
Other (19) 142,781 150,558 159,892 182,488 181,424
----------- ----------- ----------- ----------- -----------
Total Operating Expenses 1,563,188 1,602,502 1,612,317 1,669,373 1,708,098
NET OPERATING REVENUES ($000) 620,688 679,617 675,834 711,650 770,051
CAPITAL EXPENDITURES (20) 123,352 123,177 121,422 78,853 75,179
FUNDS FROM CAP EX FACILITY (21) 89,003 0 0 0 0
CASH AVAILABLE FOR DEBT SERVICE 586,340 556,440 554,412 632,797 694,872
ANNUAL INTEREST ($000)(22) 224,115 224,115 224,115 224,115 224,115
ANNUAL INTEREST COVERAGE (23) 2.62 2.48 2.47 2.82 3.10
2001-10 AVG INTEREST COVERAGE (24)
EBITDA ADJUSTMENTS TO
NET OPERATING REVENUE:
Plus: Cash-to-Book Lease Adjustment 9,159 15,836 24,212 45,829 43,709
EBITDA (25) 629,847 695,453 700,046 757,479 813,760
INTEREST W/O CAP EX FACILITY (26) 204,758 204,758 204,758 204,758 204,758
EBITDA/INTEREST COVERAGE (27) 3.08 3.40 3.42 3.70 3.97
2001-10 AVG EBITDA/INT COVERAGE (28)
A-81
Exhibit A-9
Mirant Americas Generation, Inc. Facilities
Projected Operating Results
Sensitivity H - Increased Operating Expenses
Year Ending December 31, 2011 2012 2013 2014 2015
- ------------------------ ---- ---- ---- ---- ----
CONSOLIDATED
PERFORMANCE
Annual Average Capacity (MW)(2) 12,587 12,587 12,587 12,587 12,587
Average Capacity Factor (%)(3) 38.0% 37.0% 37.1% 36.9% 36.1%
Contract Energy Sales (GWh)(4) 2,627 2,671 0 0 0
Market Energy Sales (GWh)(4) 39,282 38,095 40,960 40,678 39,851
---------- ----------- ----------- ----------- -----------
Total Energy Sales (GWh) 41,909 40,765 40,960 40,678 39,851
Total Steam Sales (MMBtu)(5) 962 962 962 962 962
Fuel Consumption (BBtu) 409,440 398,117 400,072 397,032 388,712
Average Net Heat Rate (Btu/kWh)(6) 9,770 9,766 9,767 9,760 9,754
SO(2) Allowances Purchased (Tons)(7) 52,192 51,085 61,500 61,626 62,919
NO(X) Allowances Purchased (Tons)(8) (1,508) (1,607) (983) (835) (1,058)
COMMODITY PRICES
General Inflation (%)(9) 2.60 2.60 2.60 2.60 2.60
Contract Electricity Price ($/MWh)(10) $ 21.97 21.94 0.00 0.00 0.00
Market Electricity Price ($/MWh)(11) $ 65.08 67.24 68.23 69.69 71.48
Steam Price ($/MMBtu)(12) $ 11.11 11.39 11.66 11.96 12.26
Fuel Price ($/MMBtu)(13) $ 2.71 2.74 2.91 2.98 3.01
SO(2) Allowances ($/Ton)(14) $ 194 199 204 209 215
NO(X) Allowances ($/Ton)(15) $ 1,983 2,035 2,088 2,142 2,197
OPERATING REVENUES ($000)
Contract Electricity Revenues
Mirant California (16) $ 0 0 0 0 0
Mirant New England $ 0 0 0 0 0
Mirant Texas $ 0 0 0 0 0
State Line $ 57,697 58,605 0 0 0
Mirant Wisconsin $ 0 0 0 0 0
Market Electricity Revenues
Mirant Mid-Atlantic $1,305,417 1,317,938 1,369,384 1,384,193 1,415,649
Mirant California $ 589,255 569,840 593,542 580,857 576,997
Mirant New York $ 324,596 338,390 355,636 387,184 364,919
Mirant New England $ 210,470 209,382 218,983 221,121 227,584
Mirant Texas $ 99,559 99,461 98,997 98,965 95,008
State Line $ 0 0 132,163 135,268 140,891
Mirant Wisconsin $ 26,975 26,610 25,942 27,250 27,443
Steam Revenues $ 10,689 10,955 11,215 11,498 11,786
---------- ----------- ----------- ----------- -----------
Total Operating Revenues $2,624,658 2,631,181 2,805,862 2,846,336 2,860,277
OPERATING EXPENSES ($000)(17)
Fuel
Mirant Mid-Atlantic $ 489,363 492,348 506,796 514,197 527,222
Mirant California $ 317,178 305,308 320,604 312,486 297,283
Mirant New York $ 152,094 146,634 153,483 171,804 157,377
Mirant New England $ 93,844 93,141 98,559 99,050 106,503
Mirant Texas $ 54,013 52,405 48,988 47,521 43,727
State Line $ 0 0 34,460 34,572 36,108
Mirant Wisconsin $ 2,158 1,622 817 1,566 1,468
Emissions Allowances $ 7,108 6,873 10,487 11,096 11,180
Operations & Maintenance $ 284,026 292,615 300,369 307,714 315,034
Major Maintenance $ 24,717 25,489 24,927 22,592 22,707
Insurance $ 22,791 23,388 23,995 24,619 25,256
Property and Gross Receipts Taxes (18) $ 109,876 111,849 113,858 115,991 118,144
Facility Administration and General $ 8,722 8,946 9,179 9,418 9,665
Corporate Administration and General $ 64,378 66,053 67,776 69,532 71,338
Other (19) $ 176,303 174,811 182,449 176,537 156,741
---------- ----------- ----------- ----------- -----------
Total Operating Expenses $1,806,571 1,801,482 1,896,747 1,918,695 1,899,753
NET OPERATING REVENUES ($000) $ 818,087 829,699 909,115 927,641 960,524
CAPITAL EXPENDITURES (20) $ 128,840 129,977 105,207 94,683 126,507
FUNDS FROM CAP EX FACILITY (21) $ 0 0 0 0 0
CASH AVAILABLE FOR DEBT SERVICE $ 689,247 699,722 803,907 832,958 834,017
ANNUAL INTEREST ($000)(22) $ 224,115 224,115 224,115 224,115 224,115
ANNUAL INTEREST COVERAGE (23) 3.08 3.12 3.59 3.72 3.72
2001-10 AVG INTEREST COVERAGE (24) 2.96
EBITDA ADJUSTMENTS TO
NET OPERATING REVENUE:
Plus: Cash-to-Book Lease Adjustment $ 37,489 34,989 41,490 34,489 13,489
EBITDA (25) $ 855,576 864,688 950,605 962,130 974,013
INTEREST W/O CAP EX FACILITY (26) $ 204,758 204,758 204,758 204,758 204,758
EBITDA/INTEREST COVERAGE (27) 4.18 4.22 4.64 4.70 4.76
2001-10 AVG EBITDA/INT COVERAGE (28) 3.80
Year Ending December 31, 2016 2017 2018 2019 2020
- ------------------------ ---- ---- ---- ---- ----
CONSOLIDATED
PERFORMANCE
Annual Average Capacity (MW)(2) 12,587 12,587 12,587 12,587 12,587
Average Capacity Factor (%)(3) 35.5% 35.7% 35.3% 35.4% 34.2%
Contract Energy Sales (GWh)(4) 0 0 0 0 0
Market Energy Sales (GWh)(4) 39,139 39,337 38,889 39,018 37,758
----------- ----------- ----------- ----------- -----------
Total Energy Sales (GWh) 39,139 39,337 38,889 39,018 37,758
Total Steam Sales (MMBtu)(5) 962 962 962 962 962
Fuel Consumption (BBtu) 381,487 383,563 379,171 380,619 368,101
Average Net Heat Rate (Btu/kWh)(6) 9,747 9,751 9,750 9,755 9,749
SO(2) Allowances Purchased (Tons)(7) 61,709 61,626 62,221 61,520 62,102
NO(X) Allowances Purchased (Tons)(8) (1,207) (1,206) (1,115) (1,126) (1,479)
COMMODITY PRICES
General Inflation (%)(9) 2.60 2.60 2.60 2.60 2.60
Contract Electricity Price ($/MWh)(10) 0.00 0.00 0.00 0.00 0.00
Market Electricity Price ($/MWh)(11) 73.31 75.36 77.83 79.61 80.44
Steam Price ($/MMBtu)(12) 12.61 12.91 13.23 13.54 13.86
Fuel Price ($/MMBtu)(13) 3.07 3.17 3.23 3.33 3.33
SO(2) Allowances ($/Ton)(14) 220 226 232 238 244
NO(X) Allowances ($/Ton)(15) 2,255 2,313 2,373 2,435 2,498
OPERATING REVENUES ($000)
Contract Electricity Revenues
Mirant California (16) 0 0 0 0 0
Mirant New England 0 0 0 0 0
Mirant Texas 0 0 0 0 0
State Line 0 0 0 0 0
Mirant Wisconsin 0 0 0 0 0
Market Electricity Revenues
Mirant Mid-Atlantic 1,436,988 1,473,937 1,527,143 1,557,539 1,602,335
Mirant California 575,519 606,129 579,205 625,267 611,903
Mirant New York 367,130 374,693 405,448 396,099 281,384
Mirant New England 223,610 237,080 238,831 246,121 253,161
Mirant Texas 93,812 95,357 94,128 94,149 93,642
State Line 145,171 149,936 154,755 159,455 166,670
Mirant Wisconsin 27,236 27,352 27,174 27,554 28,009
Steam Revenues 12,131 12,417 12,728 13,023 13,332
----------- ----------- ----------- ----------- -----------
Total Operating Revenues 2,881,597 2,976,901 3,039,412 3,119,207 3,050,436
OPERATING EXPENSES ($000)(17)
Fuel
Mirant Mid-Atlantic 533,291 549,124 562,519 578,422 598,904
Mirant California 296,188 314,320 293,560 325,906 313,050
Mirant New York 158,692 161,026 176,140 169,417 117,858
Mirant New England 101,009 110,731 111,875 116,459 118,848
Mirant Texas 42,045 42,410 40,631 39,557 38,696
State Line 36,719 36,720 37,404 37,688 39,257
Mirant Wisconsin 1,523 807 891 953 715
Emissions Allowances 10,863 11,136 11,783 11,893 11,464
Operations & Maintenance 322,503 331,105 339,101 348,231 356,629
Major Maintenance 25,452 26,917 23,786 24,034 24,223
Insurance 25,911 26,584 27,277 27,988 28,714
Property and Gross Receipts Taxes (18) 120,327 122,587 124,897 127,280 129,732
Facility Administration and General 9,916 10,174 10,437 10,709 10,984
Corporate Administration and General 73,198 75,102 77,050 79,051 81,108
Other (19) 197,915 193,192 155,388 191,239 158,033
----------- ----------- ----------- ----------- -----------
Total Operating Expenses 1,955,552 2,011,935 1,992,738 2,088,828 2,028,215
NET OPERATING REVENUES ($000) 926,045 964,966 1,046,673 1,030,380 1,022,220
CAPITAL EXPENDITURES (20) 96,451 112,921 142,208 88,761 128,311
FUNDS FROM CAP EX FACILITY (21) 0 0 0 0 0
CASH AVAILABLE FOR DEBT SERVICE 829,594 852,045 904,466 941,619 893,909
ANNUAL INTEREST ($000)(22) 224,115 224,115 224,115 224,115 224,115
ANNUAL INTEREST COVERAGE (23) 3.70 3.80 4.04 4.20 3.99
2001-10 AVG INTEREST COVERAGE (24)
EBITDA ADJUSTMENTS TO
NET OPERATING REVENUE:
Plus: Cash-to-Book Lease Adjustment 53,489 47,489 8,489 42,988 8,489
EBITDA (25) 979,534 1,012,455 1,055,162 1,073,368 1,030,709
INTEREST W/O CAP EX FACILITY (26) 204,758 204,758 204,758 204,758 204,758
EBITDA/INTEREST COVERAGE (27) 4.78 4.94 5.15 5.24 5.03
2001-10 AVG EBITDA/INT COVERAGE (28)
A-82
Footnotes to Exhibit A-9
The footnotes to Exhibit A-9 are the same as the footnotes for
Exhibit A-1, except:
17. Assumed to be 10 percent higher than that assumed in the Base Case.
18. Assumed to be 10 percent higher than that assumed in the Base Case.
20. Assumed to be 10 percent higher than that assumed in the Base Case.
A-83
Exhibit A-10
Operating History
Mirant Generation Facilities
(Historical/Projected)(1)
Equivalent
Net Capability Annual Average Capacity Availability
Rating Generation Heat Rate Factor Factor
(MW)(2) (GWh) (Btu/kWh)(3) (%) (%)
--------------- ------------------ ----------------- -------------- ---------------
(Hist) (Proj) (Hist) (Proj) (Hist) (Proj) (Hist) (Proj) (Hist) (Proj)
Mirant Mid-Atlantic
Chalk Point Unit 1 341 341 1,954.8 2,429.3 9,686 9,349 65.4 81.3 81.9 88.0
Chalk Point Unit 2 342 342 1,871.6 2,429.3 9,722 9,349 62.4 81.1 76.3 86.0
Chalk Point Unit 3 612 612 906.5 1,428.9 12,305 10,206 16.9 26.7 87.2 90.0
Chalk Point Unit 4 612 612 734.8 1,428.9 12,629 10,206 13.7 26.7 85.5 88.0
Chalk Point CT 1 18 18 1.4 5.9 13,152 12,834 0.9 3.7 79.1 88.0
Chalk Point CT 2 30 30 1.4 9.3 22,082 13,864 0.5 3.2 78.8 88.0
Chalk Point CT 3 85 85 46.4 85.7 13,926 13,329 4.9 10.4 91.8 93.0
Chalk Point CT 4 85 85 47.5 85.7 13,729 13,329 5.0 10.4 92.5 90.0
Chalk Point CT 5 107 107 76.4 125.5 12,678 12,060 6.5 12.4 93.7 87.0
Chalk Point CT 6 107 107 73.6 125.5 12,463 12,060 6.2 12.4 90.2 87.0
SMECO CT 84 84 39.3 80.9 13,894 12,900 5.1 10.3 85.8 92.0
Dickerson Unit 1 182 182 1,072.0 1,246.3 9,754 9,550 67.2 78.2 82.8 90.0
Dickerson Unit 2 182 182 1,110.0 1,246.3 9,652 9,550 69.5 78.2 86.1 90.0
Dickerson Unit 3 182 182 1,086.3 1,246.3 9,522 9,550 68.1 78.2 83.1 90.0
Dickerson CT D1 13 13 0.7 3.1 17,686 14,032 0.7 2.7 81.3 90.0
Dickerson CT H1 139 139 45.9 160.8 12,681 11,867 3.6 11.8 55.5 90.0
Dickerson CT H2 139 139 72.8 160.8 13,058 11,867 5.6 11.8 83.6 90.0
Morgantown Unit 1 582 582 3,692.8 3,947.7 9,339 9,067 72.3 77.4 85.9 87.0
Morgantown Unit 2 582 582 3,659.2 3,947.7 9,209 9,067 71.7 77.4 84.5 87.0
Morgantown CTs 1-2 32 32 3.5 6.6 19,474 15,257 1.2 2.0 94.3 91.0
Morgantown CTs 3-6 216 216 47.4 58.2 17,401 13,212 2.3 2.7 85.6 89.0
Potomac River Unit 1 88 88 225.4 476.0 13,762 12,375 29.1 61.7 88.2 91.0
Potomac River Unit 2 88 88 255.0 476.0 13,138 12,375 33.1 61.7 87.7 90.0
Potomac River Unit 3 102 102 532.2 655.7 10,425 9,988 59.5 73.4 89.0 90.0
Potomac River Unit 4 102 102 550.3 655.7 10,285 9,988 61.6 73.4 90.0 89.0
Potomac River Unit 5 102 102 527.7 655.7 10,441 9,988 59.0 73.4 88.3 90.0
Mirant California
Contra Costa Unit 6 340 340 952.8 1,020.4 10,098 9,861 32.0 34.3 79.4 86.0
Contra Costa Unit 7 340 340 1,006.5 1,020.4 10,122 9,861 33.9 34.3 86.0 86.0
Pittsburg Unit 1 150 150 178.3 245.6 12,511 10,800 12.8 18.7 80.9 78.0
Pittsburg Unit 2 150 150 190.4 245.6 12,620 10,800 13.8 18.7 68.0 78.0
Pittsburg Unit 3 150 150 115.1 245.6 12,737 10,800 8.3 18.7 54.1 78.0
Pittsburg Unit 4 150 150 124.6 245.6 12,581 10,800 9.0 18.7 65.5 78.0
Pittsburg Unit 5 325 325 776.1 878.4 10,709 9,940 27.3 30.9 72.2 83.0
Pittsburg Unit 6 325 325 860.5 861.1 10,541 10,200 30.3 30.2 81.1 83.0
Pittsburg Unit 7 682 682 2,078.2 2,019.6 10,408 9,682 34.2 33.8 79.4 83.0
Potrero Unit 3 206 206 873.3 490.7 10,456 10,300 50.1 27.2 81.6 82.0
Potrero Unit 4 48 48 18.9 13.7 13,461 14,018 4.8 3.0 89.6 95.0
Potrero Unit 5 48 48 20.7 13.7 13,463 14,018 5.0 3.0 94.3 95.0
Potrero Unit 6 48 48 21.5 13.7 13,185 14,018 5.1 3.0 92.9 95.0
A-84
Exhibit A-10
Operating History
Mirant Generation Facilities
(Historical/Projected)(1)
Equivalent
Net Capability Annual Average Capacity Availability
Rating Generation Heat Rate Factor Factor
(MW)(2) (GWh) (Btu/kWh)(3) (%) (%)
--------------- ------------------ ----------------- -------------- ---------------
(Hist) (Proj) (Hist) (Proj) (Hist) (Proj) (Hist) (Proj) (Hist) (Proj)
Mirant New York
Bowline Unit 1 604 607 1,408.6 1,308.6 10,544 10,063 26.4 24.6 81.9 79.2
Bowline Unit 2 601 605 649.0 1,241.3 10,866 10,067 12.5 23.4 91.1 79.2
Lovett Unit 3 69 67 67.9 110.0 12,064 11,118 11.6 18.7 97.5 84.0
Lovett Unit 4 175 172 987.1 787.0 10,777 10,982 63.7 52.2 80.6 84.0
Lovett Unit 5 195 193 1,022.8 855.3 10,948 11,042 59.3 50.6 81.4 84.0
Hillburn 36(4) 36 10.2 3.9 21,020(5) 15,546 3.9(5) 1.2 82.9(6) 95.2
Shoemaker 40(4) 40 7.2 4.2 20,991(5) 15,558 0.5(5) 1.2 95.0(6) 95.2
Mongaup 1-4 4(4) 4 10.0 13.7 -- -- 30.0(5) 39.1 97.0(8) N/A
Swinging Bridge 1 5(4) 5 8.5 10.7(7) -- -- 24.9(5) 24.4(7) 94.0(8) N/A
Swinging Bridge 2 8(4) 8 4.0 5.0(7) -- -- 9.8(5) 7.1(7) 93.5(8) N/A
Rio 1 & 2 10(4) 10 26.1 32.1 -- -- 34.2(5) 36.6 99.0(8) N/A
Grahamsville 17(4) 17 93.2 99.5 -- -- 69.4(5) 66.8 82.5(8) N/A
Mirant New England
Canal Unit 1 559 559 2,791.3 1,451.5 9,451 9,334 58.4 29.5 76.8 79.0
Canal Unit 2 553 553 1,996.3 1,216.0 10,551 9,872 40.9 24.9 74.1 79.0
Kendall Unit 1 17 18 13.1(9) 2.9(7) 11,515(10) 13,215 8.6 1.8(7) 88.2 88.0
Kendall Unit 2 20 19 84.6(9) 18.5(7) 11,515(10) 13,215 45.9 11.1(7) 96.4 88.0
Kendall Unit 3 26 26 6.1(9) 1.4(7) 11,515(10) 13,215 2.8 0.6(7) 91.7 88.0
Kendall CT 1 15 17 2.4(9) 10.0 13,937(11) 14,973 0.9(9) 6.7 97.8(9) 96.0
Kendall CT 2 15 17 1.0(9) 10.0 13,937(11) 14,973 0.8(9) 6.7 99.1(9) 96.0
Mirant Texas
Bosque Unit 1 (12) 154 154 236.6(13) 228.7 11,531(13) 11,264 34.8(13) 17.0 N/A 95.2
Bosque Unit 2 (12) 154 154 236.6(13) 212.0 11,531(13) 11,284 34.8(13) 15.7 N/A 95.2
Bosque Unit 3 N/A 236 N/A 1,265.4 N/A 7,380 N/A 61.2 N/A 93.0
State Line Energy
State Line Unit 3 189 197 752.4 1,007.2 10,576 10,090 50.2 58.4 73.3 80.0
State Line Unit 4 306 318 1,123.2 1,585.1 10,078 10,142 45.5 56.9 60.0 80.0
Mirant Wisconsin
Neenah Unit 1-2 (14) 309 309 159.2 74.3 11,539 11,396 9.1 2.8 97.8 96.0
- --------------------
(1) Historical values represent five-year averages except where noted.
Projected values represent 20-year averages. Projected generation, heat
rate, and capacity factor have been projected by PA Consulting.
(2) Summer ratings.
(3) Annual average; based on load levels projected by PA Consulting. Variances
in projected annual average heat rates from historical heat rates for some
units are due to increase in hours of operation at more efficient,
full-load levels projected by PA Consulting.
(4) Represents 1998 only.
(5) Represents 1996, 1997, and 2000 only.
(6) Represents 1996, 1997, July through December 1999, and 2000 only.
(7) Breakdown by unit estimated based on historical generation.
(8) Represents July through December 1999 and 2000 only.
(9) Represents 1999 and 2000 only.
(10) Represents average for Kendall Units 1, 2 and 3.
(11) Represents average for Kendall CTs 1 and 2.
(12) Represents July through December 2000 only.
(13) Represents average for Bosque Units 1 and 2.
(14) Represents May through December 2000 only.
A-85
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A-86