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1. Times New Roman il Blz u 2 Eis t 8 tE t by Oe Ar Fe oe A gt Searity AR BZ 00 File Edit View Insert Format Tools Data Scenario Master Window Help Electronic Data Book Adobe PDF Type a question for help fila gil xX ni a FSE SEEE orae Zl Bom e iO S 4 E 4 0 e Se 2QnRE Hog A26 M fe _ eet A Seen eee G Geer OE ESE Ss IMPORTANT PLEASE READ THE TERMS OF YOUR SOFTWARE LICENSE 2008 CEI Ins Titec The Econ rt Electronic Data Book Com Energy Insi Inc SOFTWARE LICENSE AGREEMENT 15 Indemnification Licensee shall indemnify defend and hold CEI harmless from any and all third party claims demands suits and actions alleging injury to persons damage to property or other loss or liability resulting from Licensee s use of the Model 16 Attorneys Fees The prevailing party in any dispute mediation arbitration or litigation concerning this Agreement shall be entitled to receive 25 from the other party its attorneys fees and costs incurred in connection therewith 17 Successors and Assigns Subject to the prohibition on Licenseey f assignment this Agreement and all of the provisions hereof shall be binding 26 jupon and inure to the benefit of the parties hereto and their Have Read and DECLINE the terms of the foregoing ACCEPT the terms of the foregoing EconExpert Software License Agreement EconExport Software License Agreement Click Here to
2. TABLE 4 April 23 2003 Example Frame F Combined Cycle Case OPERATING FACTORS AND EXPENSES A Vear of Operation 1 2 3 4 5 6 Year 2006 2007 2008 2009 2010 2011 Months of Operation During Year Total H 12 12 12 12 12 12 OPERATING EXPENSES 1000 Year Owner s Share Owner s Share 100 Year of Operation 41 2 3 4 5 6 Year 2006 2007 2008 2009 2010 2011 Corresponding Annual Hours of Full Load Operation Effective Annual Capacity Factor 0 0 0 0 0 0 0 0 00 0 0 Months of Operation Owner s Operating Expenses 1000 Current Period 1 AB Fuel Period 24B Fuel Fuel Transportation 1 Fuel Transportation 2 User Defined Variable O amp M1 Non Fuel Variable O amp M User Defined Variable O amp M2 User Defined Category 2 Sorbent for SO2 Removal Anhydrous Ammonia for NOx Control Disposal of Ash Purchased Power Purchased Steam Annual Emissions Allowances User Defined Fixed O amp M1 Plant Labor User Defined Fixed O amp M2 User Defined Category 2 ional Expenses 2 1000 yr ional Expenses 3 1000 yr nal Expenses 4 1000 yr Additional Expenses 5 1000 yr Expensed Major Maintenance Property Taxes Insurance Sub total Annual Deductible Operating Costs GABAOHAOAOHOHEOHOHES Major Maintenance amp Additions to Major Maint Reserves See Major Maint Sheet Total Annual Operating Expenses incl Deposits to MM Reserves Total Working Capital Balanc
3. Figure 5 The EconExpert WIND Command Menu F3 Microsoft Excel EconExpert WIND Proforma 7 7012 4 NOT OBFUSCAT 2 xis 1 _ 8 x File Edit View Insert Format Tools Data Window Help ENABLE WIND MODEL NAVIGATE PRINT SENSITIVITIES UTILITIES EconExpert HELP x DEHRA SAY B8 S o 4 er SWISS 12 B Zz U 50 EE Se AA l ar EG LO al Be Be B5 X fe After Tax IRR a EconEzpert WIND 7 7012 2 Load Copyright 2005 Competitive Energy Insight Inc All Rights Reserved Global Inputs Wizard TAF EconExpert WIND Financial Proforma V7 0 BEREE Before Tax Today is EconEzpert VIND Menu After Tax Your License Ex on 12 12 2005 8 31 2005 The six options provided on the EconExpert WIND Command Menu are listed below To select any of them click on the desired option or hold down the Alt key and select the underlined character ENABLE WIND MODEL NAVIGATE PRINT SENSITIVITIES UTILITIES EconExpert HELP CNN AN A A NAVIGATE As an alternative to selecting from the worksheet tabs located on the bottom of the Excel Screen the NAVIGATE Menu provides you with another means for locating and viewing the specific inputs and various tables and charts in the EconExpert WIND model Options provided on this menu include e Top Quick Analysis Sheet The Quick Analysis Sheet is an input sheet for simple deal screening and project economic analysis e Wind Global Inputs Table 1 To loc
4. Partner Returns Taxable Income Basis 0 eceesesseceseceseceseceeceeeeeeeeseesseeseaeeeaeeeaeeeaaeenaees 72 Figure 32 Table 1P Partner Returns Cash Distribution Options eeseescceseceseceeeceeeeeeeeeeeeeeneeeaeeeaeeeeeenaees 73 Figure 33 Table 1P Partner Returns Cash Distribution Basis cs eeessecsseceseceseceseceeeeeeeeeeeeeeneeeaeeeaeeeaaeenaees 75 Figure 34 Table 1 Wind Global Inputs Developer Fee eenseeseeseesesrissiserssrssissresrstesestessenrinsrsrresrestesteserressee 76 Figure 35 Table 1 Wind Global Inputs Loan Guarantee Fee cece essecssecseceeceseenseeeeeeeeeeseeeseaeeeaeeeaeesaaeenaees 77 Figure 36 Table 1 Wind Global Inputs Developer Royalty eee eesecssecsseceeceeceeceeeseeesseeseneseneeeseeeaeeeaaeenaees 77 Figure 37 Table 1P Partner Returns Guaranteed Return on Capital 0 0 ee cecescssecesecesecseeeeseeseneeeneeeaeeeaeeeaaeenaees 77 Figure 38 Table 1Q Quick Project Analysis eee ceeeesceeeeeeeeeeeeeeeaeeeaeesaeecaaecsaecaeceaeceaeceseeeeeeeeeeseeeseaeeeaeeeaeesaeesaaees 82 Figure 39 Table 1 Wind Global Inputs The IRR Sensitivity Term oo eee cesecesecseeceeeeeseeeeeeseneeeseeeaeeeaaeenaees 87 Figure 40 Graphs Produced from Sensitivity Analyses cecceeseeseescesscecsseceseceseceseceseceseeeseeeseeeeeeseaeecaeeeaeesaaeeaaees 88 Figure 41 Tornado Diagrams Data Input Sheet cee ee eeceeeneeeneeeaceeacecaaecaecsaeceaeesseceseeseeeeeeeeee
5. Placed in Service 1st Quarter Capture balance in last year of life if Project Life is Less then Depreciation Life 3 Year 5 Year 7 Year 10 Year 15 Year 20 Year 100 0 100 0 100 0 100 0 100 0 100 0 6 6 7 0 6 5 6 0 55 NOTE The calculated unleveraged IRR may change slightly usually by less than 0 1 as a function of changes in Project Equity This can occur when you select the Factor option for calculating property taxes or insurance costs which when carried through to the unleveraged analysis are tied to the cost basis which includes interest during construction and so has a dependency on the amount of debt assumed This effect is very minor and will not be observed if annual inputs or only a fixed 000 yr amount are entered for Property Taxes and Insurance costs p 59 EconExpert WIND Users Manual Copyright 2001 2008 Calculation of IRR and the IRR Guess Calculation of the project s Internal Rate of Return IRR is an important analysis feature in EconExpert WIND The IRR and Net Present Value NPV are summarized at the top of Table 1 where you can continuously view how they react to changes in Inputs to Table 1 Microsoft Excel uses an iterative technique for calculating IRR The guess is a number that you guess is close to the result you expect for the IRR Starting with guess the IRR calculation cycles until the result is accurate within 0 00001 percent If IRR can t find a result
6. applying escalation where appropriate If Annual Inputs are entered into any cell in Table 1C the respective Input Indicator will show the value en Column C along the left side of the respective inputs which will also be reformatted to If there are no entries in a row then a red 0 will appear A 0 advises you that NO Annual Inputs have been entered in that row A 9999999 indicates that an Annual Input has been entered in one or more years over the project life even if such entries do not appear on your current screen view In this case the corresponding input to Table 1 will also be reformatted to Bold Red and a red warning labeled Annual Inputs will also appear near to the input in Table 1 advising you that an Annual Input value has been entered and that the corresponding Global Input will be overridden The Status Sheet will also provide a notice that this has occurred A feature is provided on the EconExpert WIND UTILITIES Menu that allows you to clear and reset the Annual Input Table to all 0 s meaning that none of the inputs to Table 1 will be overridden To RESET the Annual Inputs Table from the UTILITIES menu select Save or Reset Inputs CLEAR Annual Inputs Note that if you do this the current Annual Inputs will be lost You will be provided with a warning If desired you can save the Annual Inputs before Resetting them This can be initiated from this same menu option PLEASE NOTE Cost entries are input to Table
7. for profit investor would target to achieve Navigation to the results in graphical format is described above e Sensitivity Tables The tables that are produced from the many sensitivity options Navigation to the results in graphical format is described above PRINT The PRINT Menu provides you with options for printing Tables and Graphs generated by the EconExpert WIND model Tables and graphs in the model can be generated in multiple formats with options to print tables selectively or in various levels of summary detail If desired you can also create your own custom reports using the Excel options File Page Setup or File Print Please note that the EconExpert WIND Software License Agreement requires that you include the copyright Notice on any printed reports that you create p 22 EconExpert WIND Users Manual Copyright 2001 2008 p 23 EconExpert WIND Users Manual Copyright 2001 2008 C Options on the PRINT menu include Compress Rows that Have No Data This features hides any rows that are blank eliminating rows are not relevant to your reports Tables LETTER 8 x 11 in Paper Select this option to print the first 24 months of the Construction Period results or the first 20 years of the Operating Period Results to letter sized paper Note that Excel must be pointed to a printer with letter paper in the selected paper tray Tables LEGAL Paper 8 2 x 14 in Select this o
8. values for cash distributions Suspended Losses This model assumes that taxable losses once assigned to a partner will always be assigned to that partner regardless of the value of his capital account If the amount of losses exceeds the partner s basis for that year a Suspended Loss account is created and that excess loss is carried forward until there is sufficient basis for the partner to utilize the loss Tax Credits Production Tax Credits PTCs do not directly affect partners capital accounts The user can set the allocation of PTCs on lines 113 115 on Table 1P Again while this model allows the user to allocate the PTCs in any proportion only your tax advisor can determine whether those allocations are allowable under US tax laws In this model the PTCs are figured into the tax calculations for each partner beginning in row 472 and ending in row 672 Distributions There are several options for cash distributions in this model and these options are explained in more detail below 5 Cash Distributions Options Once allocations of taxable income and loss are established it must be determined how each partner will extract cash from the partnership There are four options for determining the total amount of cash available for distribution The cash available is calculated on Table 11P on the Cash Flow Statement with the Distributions appearing on line 104 Figure 32 Table AP Se Returns Cash Distribution
9. All Figures in 000 ed Year Operational Months Economic Factors E Total GNP Escalation Rate Revenues and Expenses Wind Farm Performance Table 1C allows you to input annual values for Potential Gross Energy Production and Generation Losses In this section you can alter the amount of power generated and delivered Figure 24 Table 1C Annual Inputs Wind Farm Performance Subtotal Generation Losses Above Overrides Table 1 Subtotal Other Losses Entries are additive to Table 1 wind Global Inputs Energy Production After Generation Losses MAh 1 108 962 55 448 Net Energy Delivered MAh 1 065 047 53 252 Effective Annual Capacity Factor of Gross 32 4 Total Merchant and Contracted Energy Sales Mh 0 1 065 047 3 252 Difference Between Delivered and Contracted Amounts Tolerance r 0 0 e Potential Gross Energy Production This value matches the entries on Table 1 in the Wind Rating Profile section e Subtotal Generation Losses Above This value will replace the total generation losses specified on Table 1 e Subtotal Other Losses This value will add to the losses specified above or on Table 1 e Energy Production After Generation Losses This line calculates the generation from Table 1 or from the Potential Gross Energy Production if a value is entered for that year and deducts the generation losses for each year from the values entered on Generation Losses lines above or from
10. Copyright 2001 2008 1 Schedule and Production Project Schedule The first section at the top left of Table 1 is the Project Schedule where the user specifies the start of the project Financial Closing Date the duration of the installation Construction Term and the Project Life In addition in the section the user can segment the project life into multiple terms specifically for PPA or different revenue pricing Figure 11 Table 1 Wind Global Inputs Taxes and Investment Tax Credits If the Project Life is shorter than the debt p Schedule and Production term or an applicable depreciation life than Project Schedule the residual principal balance and 3 i 4 j T Financial Closing Date 04 01 06 MMDDIYY depreciation will be accelerated in the final Construction Term mos 0 48 8 Months L Commercial Operation Start Date 12 0106 year of operations Other items such as Project Life Years 32 Max 25 Years 3 Retirement Date 12 01 31 Land Value and Working Capital are also recovered at the end of the Project Life q Tables throughout the model will show PPA Schedule 3 5 A 120106 results over the resulting Project Lifeand columns after the end of the Project Life o Term Name Years From To will show 0 at the top of the column 3 Term1 20 412M 2008 11 30 2026 T 2 S d T 5 124 2026 11 30 2031 indicating that the project is inacti
11. The Increments are entered into a Data Input Sheet provided by EconExpert WIND when you select the respective Tornado Diagram Option from the Command Menu The term used for all of the Tornado Diagrams is entered at the top of Table 1 The Tornado Diagrams provide plots of leveraged and unleveraged IRR versus the variations in the selected parameter It is important to note that the Tornado Diagrams are not updated automatically Prior to printing the Tornado Diagrams they must be updated by running the corresponding Tornado Diagrams for the current case This can be accomplished by selecting the SENSITIVITIES Option on the EconExpert WIND Command Menu Each of the Tornado Diagrams must be individually generated p 46 EconExpert WIND Users Manual Copyright 2001 2008 VIII Inputs to the EconExpert WIND model There are five input sheets representing the various approaches that can be used to input data into the EconExpert WIND model e Table 1 Wind Global Inputs is the main input sheet for the model It allows you to enter values that typically apply and may escalate at a constant rate over the life of the project e Table 1C Annual Inputs allows the user to customize the behavior of inputs or to introduce new categories of inputs into the model The results calculated from these annual entries will either override or will be added to amounts calculated from Inputs to Table 1 Global Inputs e Table 1D Data Conversion Sheet provide
12. partnership to own a wind power project CEI provides additional calculations to aide the user in understanding the financial returns to each partner These calculations assume that all partners are general partners versus limited partners so that special allocations may be incorporated Table 1P offers inputs to allocate taxable income and losses tax credits and cash distributions to each partner Each partner s capital account and basis are tracked p 68 EconExpert WIND Users Manual Copyright 2001 2008 throughout the lifetime of the project as well as each partner s estimated tax liability cash flows and after tax returns Table 11P lays out the partnership financial statements and most importantly calculates cash availability for distribution While these spreadsheets are tools that allow you to model partnership financials and individual partner returns whatever special allocations or distributions are assumed you should always review those allocations and distributions with your tax advisor so that they meet US tax Code and are allowed in your partnership agreements There are two methods to extract cash out of the partnership to each partner First there are cash distributions which withdraw cash from a partner s capital account Second there are guaranteed payments to partners that do not decrease the partner s capital account but might be taxed differently depending on the partner s situation 2 Defini
13. share of income Each year these capital accounts will change depending on the language of the partnership agreement and how they will share in the profits and losses and receive distributions Capital Account Maintenance If partnerships make special allocations of income or distributions then each partner might have to take special care to keep a positive balance in their capital account A partnership does not have to maintain book capital accounts in this manner but might be required to by a creditor Moreover if special allocations are made there is a higher risk that upon audit these allocations will not be respected Account maintenance is another item that should be covered in a partnership agreement Inside Basis Adjusted Basis of Partner s Interest The initial basis of a partnership interest is the money the partner contributes plus the partner s distributive share of income and the partner s assumption of partnership liabilities minus any distributions and the partner s distributive share of losses For example if the partnership takes on non resource project debt the partner s assumption of that liability would the partner s share of the partnership capital A partner s distributive share of partnership loss is allowed only to the extent of the adjusted basis of the partner s partnership interest The adjusted basis is figured at the end of the partnership s tax year in which the loss occurred before taking the lo
14. Decline and Close Model Click Here to Accept and Enable the Model p 17 EconExpert WIND Users Manual Copyright 2001 2008 After selecting this button select OK on the next pop up and the model will again be saved to a new directory named C EconExpert Files Step 6 Next you will receive a message that the installation has been completed and if applicable you will be asked if you would like to view the EconExpert CP Tutorial Select YES if you would like to view the Tutorial which is highly recommended for new users and it will take about 15 20 minutes If you elect not to view the Tutorial at this time it can be accessed later from the EconExpert Help option on the Command Menu The EconExpert CP will also prompt you with a screen indicating which other workbooks the model is linked to as applicable If you are opening a fresh copy of the CP the model will indicate that it is not currently linked to any other workbooks Step 7 The model has been fully initialized and is ready for use All copies of EconExpert CP models that you save will be Fully Functional on Licensed Computers used by you or others during the applicable License Period for that user Note that copies of the spreadsheet will not work properly on computers that do not have licensed authorized installations If you forward copies of the model to others who do not have an active license or you try to use the model on another computer that copy of
15. Distribution Distribute Enough to Pay Taxes In rows 719 740 the model determines each partners tax liability and distributes just enough cash if available to meet that liability Maintain Cap Account and Basis In rows 757 826 the model attempts to adjust distributions to maintain positive values in each partner s Capital Account or Inside Basis In reality if the partnership s net income is negative over time the Capital Account might go negative even without any distributions In other words no matter what accounting strategy is taken the partners might show negative Capital Accounts On the rows following each partner s Capital Account there are a few rows of calculations that look at future reductions in Liabilities and Basis and compare them against future Net Income and other positive effects on the Capital Account Then in rows 757 829 the model will determine how much cash can be distributed factoring in the future outlook of the Capital Account and Inside Basis p 74 EconExpert WIND Users Manual Copyright 2001 2008 6 Cash Distribution Basis Once the distribution strategy is formulated keeping in mind any partnership obligations the allocation of cash distributions to each partner can be automatically set up as per a partnership agreement The four options as provided in this model are as follows Figure 33 Table 1P Partner Returns Cash Distribution Basis Table 1P Partner Returns ip
16. He or she is personally liable for it o The creditor knows that the liability was assumed by the partner or related person o The creditor can demand payment from the partner or related person o No other partner or person related to another partner will bear the economic risk of loss on that liability immediately after the assumption Guaranteed Payment e Guaranteed payments are those made by a partnership to a partner that is determined without regard to the partnership s income A partnership treats guaranteed payments for services or for the use of capital as if they were made to a person who is not a partner This treatment is for purposes of determining gross income and deductible business expenses only For other tax purposes guaranteed payments are treated as a partner s distributive share of ordinary income Guaranteed payments are not subject to income tax withholding e The partnership generally deducts guaranteed payments as a business expense e Guaranteed payments made to partners for organizing the partnership or syndicating interests in the partnership are capital expenses and are not deductible by the partnership However these payments must be included in the partners individual income tax returns e Guaranteed payments are included in income in the partner s tax year in which the partnership s tax year ends e If guaranteed payments to a partner result in a partnership loss in which the partner shares the partner must r
17. Options OnExpert WIND Wr 7013 4 Copyright 2005 CENE AMR Table 1P Partner Returns Description November 7 2005 Total Initial Investment Warning Negative Capital Account of Initial Partnership Warning Negative Inside Basis 1 Distribute All Cash Te Capital Accounts Minimum Amount Tanabl Losses C 2 Distribute Enough to Pay Taxes Pe ameta oou Profit Share Cap Account a Depreci amp ion 3 Maintain Cap Account pt atest o Capital Share Basis M 4 Maintain Basis All Figures in 000 Distribute All Cash With this selection the model will automatically distribute the amount of cash available for the calendar year Distribute Enough to Pay Taxes Once the project has a positive taxable income partners will have a tax liability Selecting this option distributes just enough cash to cover that tax liability Additional cash distribution can then be determined using the Custom Distributions on lines 161 163 on Table 1P p 73 EconExpert WIND Users Manual Copyright 2001 2008 Maintain Cap Account In some cases either driven by partnership agreements or creditors partners may have to keep a positive amount in their capital accounts Selecting this option will determine whether or not distributions will lead to a negative capital account based on the given allocations and suspend distributions until the time that the capital accounts will not go negative as a result of the distributions In
18. Table 1 is no values are entered e Net Energy Delivered The Net Energy Delivered also considers the Other Losses Energy Contracts or Merchant Sales For each of the PPA Pricing Periods determined on Table 1 the user can modify the annual production amount On Table there were options for up to 4 different pricing options for each PPA Period Those same options exist on Table 1C p 63 EconExpert WIND Users Manual Copyright 2001 2008 IMPORTANT NOTE If you have more than one PPA or pricing structure called Customer in the model for a given year if you enter one production value in this section you must provide all of the desired Periods for that year Otherwise the 4 Customer in each PPA term will be the default recipient of any excess production Energy Price During Each Period For each of the PPA Pricing Periods determined on Table 1 the user can modify the annual PPA price On Table there were options for up to 4 different pricing options for each PPA Period Those same options exist on Table 1C Other Revenues In addition to revenues realized from sales of Energy the user may specify other annual income sources in Table 1C which can include Renewable Energy Credits Other variable energy sales MWh Power sales based on capacity MW Additional Revenue Sources The user may input additional income sources into any of 4 User Defined Categories in any year of the project life Values are input in Curren
19. Table 5A located on the bottom section of Table 5 provides Annual Debt Service Expenses in 1000 Annual Debt Service Payments p 41 EconExpert WIND Users Manual Copyright 2001 2008 Interest Payments Principal Payments Cash Available to Cover Debt Debt Coverage Ratios 9 Table 6 Revenues Table 6 provides calculation of gross revenues associated with electric sales Table 6 is organized as follows The Top Section of Table 6 provides Revenue Factors and Escalation Rates including The Energy Sales Profile by Energy Pricing Period Sales of Other Commodities including steam and other byproducts Escalation Rates used for Revenues Escalated Prices for Energy and Commodities O O O O Table 6A located in the bottom section of Table 6 provides Escalated Annual Revenues in 1000 based on the Owner s Percentage Interest in the project Revenue streams are itemized in detail If less than 100 Ownership has been specified as an input the revenues shown here will be prorated based on the Owner s Share of the total project Itemized revenue categories provided in Table 6A include A breakdown of revenues from energy sales into the available four Energy Pricing Periods O O O O Period 1A Period 1B Period 2A Period 2B A breakdown of all taxable revenue sources including O 00000 0 Total Energy Sales Sum of 1A 1B 2A and 2B above Capacity Ancillary Services Payments Other A
20. a set amount If both entries are made they will be summed The resulting dividends are deducted from the net income after tax and will result in a reduction to the project s IRR and NPV after tax Corporate Earnings without Project and Shares of Company Stock Outstanding EconExpert WIND includes analysis of predicted impacts of Share Dilution and Net Income on the price of the Owner s stock These calculations are performed based on an assumed baseline stock price without the project the baseline projected corporate earnings profile and the baseline number of shares outstanding The resulting current price earnings ratio is applied to estimate future stock performance by calculating the resulting accretion dilution of shares and the impacts of net income from the project p 66 EconExpert WIND Users Manual Copyright 2001 2008 Using Table 1C the user may specify the annual effective Price Earnings Ratio of the stock reflective of changing anticipated market conditions forecasted annual Earnings Share expressed in Current and the annual number of Corporate Shares Outstanding Amounts entered here will override inputs to Table 1 If an annual profile for Corporate Shares Outstanding is entered it should be input for all succeeding years during the project life as the model will revert to Table 1 entries if a zero valued input is read in a year succeeding a change in the number of shares issued C Table 1D Data Conversion Sh
21. analysis and risk analysis integrating one or more of the EconExpert models described above A schematic of the software suite is provided on page 93 p 92 EconExpert WIND Users Manual Copyright 2001 2008 The EconExpert Modeling Suite Renewables or Fossil Load Profile Vertical _ Database Interval Analysis Financial Models Electric Power E rt Biomass e Wind Solar CSP or PV Land Fill Gas e Coal IGCC Retail Behind the Meter e Digester Gas Solar PV Small Wind e Fuel Cells Commodity Products Ethanol e Biodiesel e Hydrogen Refining Electronic Data Book Portfolios and Scenarios p 93 EconExpert WIND Users Manual Copyright 2001 2008 EconExpert WIND Software License This is a legal agreement between you the Licensee either an individual or an entity as the original purchaser and CEI By pressing the ACCEPT button below you agree to be bound by the terms of this Agreement If you can not agree to the terms of this Agreement please press the DECLINE button below and destroy the software and all accompanying items including printed materials and packaging if applicable 1 Description of the Model The EconExpert WIND Financial Model EconExpert or the Model is a spreadsheet designed to assist users with the financial analysis of wind farm electric power generation projects The Model requires the installation and use of Microsoft E
22. any time that you would like to more precisely model a variable than can be accomplished using Table 1 Global Inputs Examples of how you can use Annual Inputs to Table 1C to perform custom calculations include e Varying generation or losses year over year e Forward electric price curves e Customized debt including o Floating Interest Rates on Debt o Accelerated or Deferred Principal Payments Sweeps tied to the Debt Coverage Ratio o Interest only payments o Lump sum principal repayments p 60 EconExpert WIND Users Manual Copyright 2001 2008 e Modeling of a specific contracts or agreements for o Power Purchase Agreements o O amp M services LTSA agreements e Modeling of specific gearbox failures e Use of the User Defined Fields that permit completely flexible customization of the model Any non zero entry is read as an Annual Input and included in the calculations in the model If the cell is blank or a value of zero 0 appears in the cell the corresponding Global Input will be used If it is desired to enter a 0 for Annual Input use a very small non zero entry such 0 0000001 and the value 0 will be used in the model overriding any entry from Global Inputs Note that only years with entries will override Global Inputs allowing the user to revert back to the escalating economic item if desired Table 1C is range protected allowing you to enter data ONLY into green shaded Input cells When a non zero entry app
23. different names Input Data will be transferred as VALUES so any formulas used for data input will be lost and must be manually re entered after the transfer The transfer may take a few minutes Do NOT attempt to interrupt the transfer once it has started Are the appropriate files opened and do you want to continue Enter Yes to Continue with Import No to Stop to first open Source Data File with macros DISABLED This is the complete set of instructions for data transfer Important points include e Open the Destination Model first The destination model is the new version of EconExpert WIND that you would like to import data to e Open the Source Model second This is the version of EconExpert WIND that contains the input data that you would like to transfer from 14 Extend My License This feature will require a conversation with CEI to obtain the codes to extend your license p 35 EconExpert WIND Users Manual Copyright 2001 2008 E HELP EconExpert WIND offers four On Line Help Features The EconExpert Help Menu Comments posted in individual cells throughout the model providing descriptions of the functions of individual inputs and overviews of tables provided in the model The EconExpert WIND Tutorial This User s Manual 1 The EconExpert Help Menu EconExpert WIND is equipped with a Customized Help Menu to assist you in using the model The menu provides other instructions and Helpful hints on using
24. extent any money included in the distribution exceeds the adjusted basis of the partner s interest in the partnership Any gain recognized is generally treated as capital gain from the sale of the partnership interest on the date of the distribution Partner s Income or Loss A partner s income or loss from a partnership is the partner s distributive share of partnership items for the partnership s tax year that ends with or within the partner s tax year Self Employment Income and Taxes A partner is not an employee of the partnership The partner s distributive share of ordinary income from a partnership is generally included in figuring net earnings from self employment However a limited partner generally does not include his or her distributive share of income or loss in computing net earnings from self employment This exclusion does not apply to Guaranteed Payments made to a limited partner for services actually rendered to or on behalf of a partnership engaged in a trade or business If an individual partner has net earnings from self employment of 400 or more for the year the partner is liable for self employment tax Distributive Share Generally the partnership agreement determines a partner s distributive share of any item or class of items of income gain loss deduction or credit However the allocations provided for in the partnership agreement or any modification will be disregarded if they do not have substantial ec
25. financial modeling and model customization services For information please contact us at the address shown on the cover page of this manual p 91 EconExpert WIND Users Manual Copyright 2001 2008 Appendices Overview of CEI s EconExpert Software Suite Competitive Energy Insight CED established in 1997 has developed a mature and highly advanced suite of software products for the analysis of project investments in renewable energy central power stations commodity liquid and gaseous products and combined heat and power We both license these models for your direct use and use them broadly in our project development consulting practice serving as a bench to support your in house team All of the EconExpert tools are Excel based making them completely customizable auditable and adding all of the features of Excel to EconExpert s powerful architecture Importantly they are far more than spreadsheets Behind each EconExpert model is powerful Visual Basic programming that provides highly advanced menu wizard driven functionality taking Excel and your analysis capability to a completely new level Standardized accurate and applicable from simple screening to bank quality analysis of virtually any project investment acquisition or divestiture EconExpert has been applied to literally billions of dollars of energy project investments including on site generation applications renewable energy projects and large multi hundred million dol
26. in the last year of operation if the project is retired before the end of the depreciation life Deferred taxes are calculated by the model based on the difference between book and cash taxes resulting from the differences between these two depreciation calculations In addition to the six standard 5 7 10 15 20 and 30 years MACRS depreciation Classes that are programmed in the model the user may select from two additional categories that can be defined by the user To use either or both of these categories first name the category in the unprotected cells titled User Defined in Table 11 and then specify the percentage of the tax basis to be depreciated in each of your user defined categories Next from the NAVIGATE menu select NAVIGATE Results Tables Table 13 Depreciation In the shaded cells specify the amount in decimal fraction 0 100 10 0 to be depreciated in each year such that the total sums to 1 000 100 0 Figure 21 User Defined Depreciation Schedules in Table 13 Depreciation 3 1 2 4 5 2009 2010 2011 2012 2013 10 12 12 12 12 5 Return to Depreciation Section of Table 1 Global Inputs um 5 Year SL 10 Year SL 15 Year SL 3Year 100 0 5 Year 100 0 32 0 19 2 11 5 20 Year SL 30 Year SL SL 7 Year 100 0 24 5 17 5 10 Year 100 0 15 Year 100 0 20 Year 100 0 30 Year SL 100 0 Cash Tax MACRS Mid Quarter Convention
27. including the Income Statement Cash Flow Statement and Balance Sheet based on the Owner s percentage interest in the project The predicted Owner s Stock Performance with and without the project is also estimated Table 11 is organized as follows e Table 11 Income Statement The Income Statement is used to calculate Net Income revenues minus expenses Depreciation and taxes for the project using GAAP Book Accounting Methods e Table 11A Cash Flow Statement The Cash Flow Statement identifies sources of project cash and amounts available for potential distribution to the Owner e Table 11B Balance Sheet The Balance Sheet identifies assets equity and liabilities attributed to the project where Total Annual Assets are in balance with Total Annual Equity and Liabilities in each year and over the project life e Table 11C Owner s Stock Performance Predictions of the impacts of the project on the Owner s stock price are provided based on the project s Net Income the dilution effects of the equity additions attributed to the project and the predicted performance of the Owner s stock without the project p 44 EconExpert WIND Users Manual Copyright 2001 2008 Results in Table 11 11A 11B and 11C are all expressed based on the Owner s percentage interest in the project EconExpert uses the Deferral Method of Generally Accepted Accounting Principles GAAP for all Book Analyses including the Income Statement Cas
28. license to the Model shall terminate At the end of the term of this license or upon its earlier termination unless this Agreement is extended by a written faxed or emailed notice provided by CEI Licensee shall destroy all electronic copies of the Model 4 License Fees and Term Fees for use of and the term of license of the Model are on a periodic subscription basis The fees payable under this Agreement have been set forth in a separate written faxed or emailed communication between CEI and Licensee usually by Invoice 5 Warranty CEI makes no warranties or representations with respect to the accuracy use or application of the Model nor any technical assistance provided by CEI to Licensee or Authorized Users except that CEI will make reasonable efforts to correct defects in the Model after they are identified and will promptly provide Licensee with updates containing such corrections as CEI deems appropriate when they are available These reasonable efforts to correct defects in the Model do not apply to Derivative Works developed by Users of the Model and CEI assumes no responsibility for or obligation relative to the performance of or defects in Microsoft Excel EXCEPT FOR THE WARRANTIES AND REPRESENTATIONS EXPRESSLY SET FORTH HEREIN COMPETITIVE ENERGY INSIGHT INC DISCLAIMS ANY AND ALL WARRANTIES AND REPRESENTATIONS EXPRESS OR IMPLIED WITH RESPECT TO THE MODEL AND ITS CONFORMITY TO ANY SPECIFICATIONS OR DESCRIPTION INCLUDING WITHOUT LIM
29. r Additional Expenses 2 0004 User Defined Labels Entries are additive to Tabligi Wind Global Inputs Entries are additive to Table 1 Wind Global Inputs Entries are additive to Table 1 wind Global Inputs In all cases note that the entries to Table 1C are in Current i e include escalation p 65 EconExpert WIND Users Manual Copyright 2001 2008 Major Maintenance Purchase of Spare Parts is one time occurrence but this section offers the user the opportunity to enter values in multiple years In this item the user would enter the years that the purchases would occur The Operations and Maintenance Reserve can be entered in current dollar versus month equivalent as is offered on Table 1 Debt Service The user can specify Annual debt terms for Primary and Subordinated Debt in Table 1C including Principal Repayment Schedule The user can input the annual percentage of the initial debt balance or the annual 1000 amount of principal to be repaid in any year during the life of the subject loan This section can be used to model accelerated or deferred principal repayments including sweeps and extension of principal repayments Amounts entered here will override the standard mortgage style principal repayment schedule calculated based on Table 1 Inputs Note that Principal Repayments specified in this section will take precedence over Interest Only Payments if such both options are selected in the
30. same year If payments are not entered in all years the selected mortgage type repayment schedule specified in Table 1 will be used in the remaining years until the entire principal balance is paid or until the end of the debt term Any residual principal will be repaid as a balloon payment in the last year of the debt term Interest Rates The user can input the Annual effective interest rate during any year in the life of the subject loan This section can be used to model variable rate loans or those linked to indices Amounts entered here will override the standard mortgage style fixed interest rates entered in Table 1 Interest Only Payments The user can specify Interest Only Payments in any year during the life of the loan by entering a 1 in the year that the Interest Only Payments would apply Note that Principal Repayments specified above will take precedence over Interest Only Payments if both options are selected in the same year Income Taxes Depreciation and Dividends The user can enter Annual Depreciation Rates Additional Deductions from State and Federal Taxes State and Federal Tax Rates Additional Tax Amounts and annual After Tax Dividends in any year that they might occur Note that Additional Deductions Additional Taxes and After Tax Dividends do not override amounts input to Table 1 Global Inputs The user can enter Dividend Amounts to be withdrawn from the project After Tax as a percentage of after tax net income or as
31. that will not require the installation or use of WinZip to decompress the files The model is not conventionally delivered this way as many network administrators will not allow exe files as attachments to emails It should be noted that while use of the EconExpert WIND software has been successfully demonstrated with the listed systems the configuration of individual systems or networks might be a factor in the successful installation of this software If problems arise please contact CEI 2 WinZip is a registered trademark of WinZip Computing Inc p 13 EconExpert WIND Users Manual Copyright 2001 2008 IV Getting Started Installing EconExpert WIND For licensed users of EconExpert a file will be provided to you by email or can be downloaded with approval codes from our website Note that the installation of the model MUST be initiated from your C drive and the installation file MUST NOT have the READ ONLY attribute selected The original file provided to you will be gt EconExpert WIND Installation File V xxx Your Name Your Company Zip Installation Copies should ONLY be provided by CEI Inc and under the terms of the License Agreement you are NOT permitted to provide your Installation Copy of the model to others You will only need to open this file one time as an installed copy of the model will be saved you re the directory C EconExpert Files which the model will automatically add to your C Drive gt EconExp
32. that works after 20 tries the NUM error value is returned In most cases you do not need to provide guess for the IRR calculation If the guess is omitted it is assumed to be 0 1 10 percent If the IRR result gives the NUM error value or if the result is not close to what you expected try again with a different value for guess The IRR Guess is entered in Column I just above Table 1 Figure 22 Table 1 Wind Global Inputs The IRR Guess 7 Eee eee Load EE First Guess for IRR Excel Calculations Berro tas EconEzpert VIND Menu After Tar 15 00 H of File C EconEzpert Files Wind Models EconEzpert WIND Proforma 7 7013 5 NO zis Table 1 Example data provided by CEI in the model is for i Ame CS Fae Wind Global Inputs Proforma Notes relative to the accuracy or fitness for purpose oft TERM USED FOR k After Tax HPY 28 SENSITIVITIES 000 HPY Summary I Years o Nh Leveraged 10 0 a o 3 92 7 65 Unleveraged 8 0 22 and Production Ey Project Revenue and Operating Expen Note that the IRR Summary Table at the top of the Global Input sheet allows the user to specify what IRR Terms should be studied The third input column of this table is especially important because it specifies the IRR Term that will be used in EconExpert WIND s Automated Sensitivity Analyses B Table 1C Annual Inputs Annual Inputs apply only to a given year in the life of the project You can use Annual Inputs
33. the Taxable Loss Carry Forward If their tax appetite is limited specify Yes for the Taxable Loss Carry Forward and then enter the federal or state tax appetite in rows 179 192 These entries are values that are outside of the modeled wind project If the partner s tax appetite is unlimited you can leave these entries blank and if no taxable loss carry forwards are assumed then all tax benefits will be assumed in the current year NPV and IRR Calculations At the top of Table 1P the after tax IRR and NPV for each defined partner is shown along with their initial capital contributions and Capital Share of the project The calculations for the NPV and IRR are t the bottom on Table 1P from lines 407 420 The cash flows for each partner are detailed on lines 263 406 p 70 EconExpert WIND Users Manual Copyright 2001 2008 3 Partnership Financial Statements On Table 11P Partnership Financial income statement balance sheet and cash flows are provided to match the partner allocation specifications on Table 1P Partner Returns The following statements compare the differences between Table 11 Financials the project and Table 11P Partnership Financial the partnership Income Statement First the partnership income statement lacks any tax expense Second depreciation for the partnership is based on Tax depreciation while Book depreciation is used to the project financials Cash Flow U
34. the model technical definitions and access to special features of the model Items on the EconExpert Help Menu include Tutorial Access to the EconExpert WIND On Line Tutorial The Tutorial will walk you through the model and all of its important features Input Tables Descriptions of the functions of Table 1 Global Inputs and Table 1C Annual Inputs Worksheet Tables Descriptions of the purpose and functions of each of the 26 Worksheets included in EconExpert WIND Command Menus Descriptions of the purpose and functions of each of the options provided on the EconExpert WIND Command Menu Customizing the Proforma Helpful suggestions on how you can customize EconExpert WIND to perform project specific analyses Partnership Definitions Helpful definitions for items on Table 1P Partner Returns Definitions and Explanations Helpful definitions for items throughout the model Populate Table 1C with links to Data Conversion Sheet As described in the Utilities section Comparing Runs and Identifying Quantifying Changes As described in the Utilities section Saving EconExpert WIND to Disk Discussion how to save and reuse Fully Functional and Values Only copies of EconExpert WIND Help Comments in Worksheet Cells A discussion of the Help Comments provided in worksheet cells and how to enable or disable the Cell Comments feature 2 Help Comments Individual input cells throughout the Econ
35. time that you open the model EconExpert CP will automatically check its setup to ensure that all of its internal settings are set correctly when you start work Finally another important message advising you that prior to using the model you must acknowledge that you accept the terms of the Software License Agreement This is required to enable EconExpert CP s calculations p 16 EconExpert WIND Users Manual Copyright 2001 2008 You will be required to acknowledge your Agreement with the Software License each time you install the model on an Authorized Computer and each time you renew your license to the model The EconExpert CP Software License is presented If desired you may print the license by clicking on either of the Print License buttons at the top of the Screen If you read the license on your monitor be sure to scroll down the screen and read ALL of the applicable license terms A copy of the EconExpert CP Software License is also included in the Appendix to this User s Manual Step 5 At the conclusion of the Software License you will be provided with the option to ACCEPT or DECLINE the EconExpert CP Software License Agreement READ THIS LICENSE CAREFULLY as by accepting it you will be legally bound to its conditions PLEASE NOTE THAT THE MODEL WILL NOT FUNCTION PROPERLY UNLESS YOU CHOOSE TO ACCEPT THE AGREEMENT 2 Microsoft Excel EconExpert Electronic Databook V9 44 NOods le xi
36. we are committed to both updating and improving the models to include additional functionality that is important and valuable to the energy industry Microsoft Excel is a registered trademark of the Microsoft Corporation p 9 EconExpert WIND Users Manual Copyright 2001 2008 Il How to Obtain or Extend a Subscription to EconExpert WIND To purchase EconExpert WIND or to extend your license please contact Competitive Energy Insight via email or phone Subscription rates are available upon request Subscribers will be provided with free software training and access to all updates issued during the term of their Software License All users of the EconExpert WIND model will be required to acknowledge their acceptance of the EconExpert WIND Software License Agreement in order to fully enable the model Please see Section IV Getting Started of this manual for additional information regarding the Software License A copy of the License is included on the License Sheet in the model and in the Appendix If you open EconExpert when your current license is within twenty one days of expiration the model will notify you that your license is about to expire The EconExpert Help Menu includes an automated feature that allows you to extend the period of a license by entering a License Extension Code which can be provided by CEI By contacting CEI and entering the necessary codes your license term can be extended at any time In the event that y
37. with the desired cases to be compared each respectively activated in one of the files PLEASE NOTE THAT THIS IS A MEMORY RAM INTENSIVE PROCEDURE IT IS RECOMMENDED THAT YOU CLOSE OTHER APPLICATIONS AND SPREADHSEETS BEFORE EXECUTING THE COMPARISON PROCEDURE The procedure will involve three spreadsheets e The TARGET EconExpert WIND model is the model that you want to identify the changes in The TARGET model MUST be opened FIRST e The REFERENCE EconExpert WIND model is the model that you want compare track changes against o The REFERENCE model MUST be opened SECOND o Record the filename of the REFERENCE model as you will need to enter this information e The COMPARISION file which you will name that highlights the fields that have been changed Also note that the TARGET and REFERENCE models must each be ENABLED A copy of each of the respective input sheets from the TARGET model will be created in the COMPARISON file with a name that you designate The COMPARISON FILE will contain copies of the respective Global Inputs Annual Inputs and Data Conversion Input Sheets with the changed input fields HIGHLIGHTED on a BRIGHT ORANGE Background Once initiated you will not be able to terminate this macro until it is completed You will be requested to provide two pieces of information e The Name of the REFERENCE EconExpert WIND Data File The REFERENCE file is the one that you want to compare the TARGET file agai
38. you to calculate the valuation of a project based on the target IRR or NPV that an investor would target to achieve The valuation of the project can be determined based on a target leveraged or unleveraged investment scenario EconExpert WIND will report the change in valuation from the base case and the net project valuation exclusive of the investor s development and soft costs e Project Valuation Sensitivities After identifying the project valuation you can perform automated sensitivities analysis to determine how changes in electricity prices would impact that valuation e Tornado Diagrams Tornado Diagrams illustrate how the NPV or IRR of the current case will be impacted by individually incrementing multiple inputs Each Tornado Diagrams is generated by varying the inputs over the life of the project based on inputs to either Table 1 or Table 1C e Individual Sensitivity Cases The remaining options allow you to selectively run individual Sensitivities listed in a subsequent chapter The individual Sensitivity Tables and Graphs can be viewed from the Navigate menu or printed from the PRINT Menu e Wind Rating Profiles This unique sensitivity is only valid if the user has entered multiple values in the Wind Rating Profile section on Table 1 This sensitivity will calculate the project returns based on each value entered in the Wind Rating Profile determining the economic impact of the various generations for each wind r
39. 1C in CURRENT This means that the cost and revenue entries to Table 1C will not be impacted by escalation rates entered elsewhere in the model and fixed values will not be impacted by partial year operation The values will be used by the model as entered Most of the inputs included in Table 1C are self explanatory and all are accompanied by Help Comments that describe the purpose and function of that input Several of the specific inputs to Table 1C provide unique functionality and are individually described below Economic Factors You can vary the annual GNP escalation rate by entering non zero values into this section In the example provided the GNP Escalation Rate of 2 5 entered in Table 1 will be overridden in years p 62 EconExpert WIND Users Manual Copyright 2001 2008 Wind Farm Performance Potential Gross Energy Production MWh 1 2 and 3 by the amounts 3 0 3 5 and 4 0 respectively In succeeding years inflation will default back to the Global Inputs rate of 2 5 if no entries are provided for those years Figure 23 Table 1C Annual Inputs GNP Escalation Rate TABLE 1C Annual Inputs cb Year Operation in Year 1 and Year 21 Example Data Holding Bin 2 is not labled November 1 2005 Show Comment For Instructions j Het Production 53 252 Wind Rating P90 Shaded Cells Indicate Inputs Description iExampl HA All Annual Inputs expressed at values are entered in Current Year j Year of Operation 1 2
40. 2001 2008 Project Finance Equity and Project Ownership Debt Equity Entry Debt 000 Equity 000 Total 000 Start of Construction 30 0 70 0 8 100 18 900 26 999 Start of Operations 50 0 50 0 13 500 13 500 26 999 Debt Coverage Ratios DSCR Include PTC in DSCR Calc S YES Actual Min Project Stage Developer Fees Equity Participant Construction Operations Recipient Taxinwvestor OOO oo ome oo T The specific debt parameters are handled in the sections below Financing Terms Construction Financing and Permanent Financing In this section of Table 1 the user can specify debt terms as follows e Construction Financing The user can specify the interest rate applied during the term of the construction loan Interest During Construction is calculated in Table 3 using either the Default or User Defined Drawdown and Debt Equity Schedules e Permanent Financing Senior Debt and Subordinated Debt The user can specify the mortgage type loan parameters including o The Term of the loan o The fixed interest rate o The number of years the Interest Only payments are made during the initial term of the loan o The annual Financing Fees The user may also enter Terms for Senior Debt and Subordinated Debt in the Annual Inputs Table where options are provided to override the e Annual interest rate e Interest only payments e Accelerated principal repa
41. 42 Example Tornado Diagram K 10 0 Annual Capacity Factor 30 9 Annual Average Capital Investment Excl Soft Costs amp IDC 26 542 Owner s Equity 50 0 10 0 of Investment Fixed O amp M 0 225 K 25 0 Insurance 0 270 K 25 0 Interest Rate on Senior Debt 7 0 1 0 Term of Senior Debt 12 yrs 1 Yr Property Taxes 0 120 K 25 0 Land Lease Expense 0 K 25 0 Other O amp M 0 025 K 25 0 Consolidated Tornado Diagram Sensitivity of Leveraged After Tax IRR Base Case 20 yr Leveraged IRR 11 3 5 yr avg 2005 Change in Leveraged IRR from Base Case 8 0 6 0 4 0 2 0 0 0 2 0 4 0 6 0 8 0 The horizontal bars illustrate how changes in the identified inputs would impact the project s IRR The results are sorted in order of significance giving the Tornado effect Note that the titles on the left axis identify the base case leveraged and unleveraged IRRs the Base Year value for the input and the Increment that was used p 90 EconExpert WIND Users Manual Copyright 2001 2008 XI Customizing EconExpert WIND One of the many advantages of EconExpert WIND is the flexibility it offers allowing you to accurately custom model virtually any power generation project While the core tables in the model are locked and cannot be modified by the user in the vast majority of cases custom analysis can be accomplished using a combin
42. 5 Indemnification Licensee shall indemnify defend and hold CEI harmless from any and all third party claims demands suits and actions alleging injury to persons damage to property or other loss or liability resulting from Licensee s use of the Model 16 Attorneys Fees The prevailing party in any dispute mediation arbitration or litigation concerning this Agreement shall be entitled to receive from the other party its attorneys fees and costs incurred in connection therewith 17 Successors and Assigns Subject to the prohibition on Licensee s assignment this Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns p 96
43. 56 Figure 20 Table 1 Wind Global Inputs Equity and Project Ownership ceccesceseceseceeeceeeeeeeeeeeeeeaeeeaeeeeeeaaees 57 Figure 21 User Defined Depreciation Schedules in Table 13 Depreciation eeceeeeeeeeeeeeeeeeaeeeaeeeaeeenaees 59 Figure 22 Table 1 Wind Global Inputs The IRR Guess cece eseesseesecsseceseceseceseceseceseesseesseeseeeseneeeaeeeaeesaaeenaees 60 Figure 23 Table 1C Annual Inputs GNP Escalation Rate eeseesessseessecsseceseceseceseceseeeseeeeeeeeeeseaeeeaeeeaeesaaeenaees 63 Figure 24 Table 1C Annual Inputs Wind Farm Performance ccceecesssecsseceseceseceseeeseeeeeeeeeeeeeeeeaeeeaeeeaeesaaeeaaees 63 Figure 25 Table 1C Annual Inputs Other Revenue Sources 0 0 ee eeeeseeesecseceseceseceseceseeeseeseeeseeeseneeeaeeeaeesaaeenaees 64 Figure 26 Table 1C Annual Inputs Fixed and Variable O amp M Inputs ceeceseceeeceseceeeceeeeseeeeeeeeeaeesaeeeaeeeaaees 65 Fisure 27 Table UP Partner Returns seis oct saoicesessssets erneieren a nal viens oes Gade a aaenion mines 68 Figure 28 Table 1 Wind Global Inputs Defining Partners eee ceeeceseceeeeeseeeeeeseneeeaeeeseeeaeeesaecaaeceaeenaeenaeee 69 Figure 29 Table 1P Partner Returns Tax Rates ee ee eeceseseeeneeeeeeacecsaecaecsaeceaecsaeeeaeeseeeseeeseeeseaeeeaeeeaeeeaaesaaees 70 Figure 30 Comparison of Table 11 and Table 11 Poe eee eesecnsecesecsecesecesecsseeeseeseeeseaeeeaeesaaeeaaecsaeseaeesaaeenaees 71 Figure 31 Table 1P
44. 8 Investment Costs Next the Investment Costs offer entries in 000 for Project Development Wind Turbines Balance of Plant and Other Costs The sum of these entries is shown below the green cells Revenues and Expenses The top right section contains the inputs for revenues and costs As this sheet is for a quick analysis there is only one energy price that can be escalated separately from the expenses Note this escalation rate like most on Table 1 are additive to the GNP rate Next there is an entry for any Renewable Energy Credits RECs and also the duration in years for the RECs Below the RECs is a Check box to include Production Tax Credits PTC The PTC value is automatically defined per current legislation Each year CEI will update the current year value to be used as well as the escalation Next there are three options for operating expenses The first two options are expenses on a Per Turbine basis and the third option is an annual amount All three entries are user defined The last operating expense is the Land Lease which can be entered as a percent of Sales or a dollar per MWH Project Finance Keeping the financing options simple the entries are straight forward p 83 EconExpert WIND Users Manual Copyright 2001 2008 IX Saving EconExpert WIND Spreadsheets A Saving Fully Functional Copies of the Model During the term of your license you may save and reuse installed copies of fully functionin
45. Coke Wood or Oil Enter 2 for Gas Period 1AB 2AB Energy Prices Escalation SMAH 40 l 0 Energy Sales AH 0 0 0 00 a Less TransmissioniVheeling SAMAH 0 00 Economic Factors Net Energy Price to Customer SAMAH 44 00 Base Year Constant Dollar in Mid Year l 0 Escalati 0 0 0 0 28 00 oo az az a4 Period 1 2 Fuel Prices Period 1AB 33 id 45 GNP Escalation Rate for Revs amp Exps Gas FOB Supplier 0 S MMBtu 0 0 a Discount Rate for Unleveraged NPY Transportation 2 S MMBtu 0 0 ae Interest Rate Earned on Escrowed Funds Net Delivered Fuel Price 2 65 MMBtu 0 0 9 so Equity and Project Ownership Equity Debt Fuel Quality Selected Fuel GAS s1 During Construction 0 0 100 0 Higher Heating value of Fuel 0 BtuScr s2 During Operations 0 0 60 0 s3 Ash in the Fuel by Weight oox 0 00 Ib AshMM sa Owner s Interest in the Project 0 0 Sulfur in the Fuel by Weight 0 0 0 00 lb SO2MM sf a lt x se irnnmental Controls F i Astan gde s iA M Eco E vais amp Eynez Stxe1 w Bews2 g Micr Eau CERTO RS 2 15PM Eile Edit View Insert Format Tools Data Window Help Acrobat NAVIGATE PRINT SENSITIVITIES UTILITIES EconExpert HELP ENABLE MODEL 8 x T F C T 3 ra EconExpert LP V4 0 341 _ Copyright 2001 2002 2003 Competitive Energy Ingight Inc All Rights Reserved
46. EconExpert WIND Users Manual Copyright 2001 2008 EconExpe T w E A Universal Financial Proforma Ho claim ir made tothe oxclurive right to wre EconEspert and A Univerral Financial Proforma apart From the mark arrhoun User s Manual for EconExpert WIND Financial Proforma For the Economic Evaluation and Valuation of Wind Power Projects That Sell Energy to the Power Grid Prepared by Competitive Energy Insight Inc 12025 Blue Diamond Court San Diego CA 92131 Tel 858 566 0221 Fax 858 566 0287 Email info CEInsight com Website www CEInsight com 11 15 08 p 1 EconExpert WIND Users Manual Copyright 2001 2008 Page Intentionally Left Blank p 2 EconExpert WIND Users Manual Copyright 2001 2008 Important Notices to Users of EconExpert WIND Copyright Notice The EconExpert WIND Financial model and its accompanying documentation are protected by copyright law and international treaties The EconExpert WIND model documentation and reports generated by the model include prominently displayed Copyright Notices Unauthorized use modification reverse engineering reproduction or distribution of the EconExpert WIND model or any portion of it may result in severe civil and criminal penalties and will be prosecuted to the maximum extent possible under the law If you are a licensed user you are free to distribute printed reports and charts as well as to provide other
47. Energy Sales vVH 0 0 28 00 0 0 a Less Transmissionheeling SAMAH 0 0 0 0 az Economic Factors Net Energy Price to Customer SMH 44 00 0 0 28 00 0 0 4 Base Year Constant Dollar in Mid Year 2003 s 44 Period 1 2 Fuel Prices Period 1AB 33 as GNP Escalation Rate for Revs amp Exps 2 50 Gas FOB Supplier 2 65 SMMBtu 0 0 4 Discount Rate for Leveraged NPV to by EOY 2003 Transportation 1 SMMBtu 0 0 ar Discount Rate for Unleveraged NPV 10 00 Transportation 2 MMBtu 0 0 4 Interest Rate Earned on Escrowed Funds 1 75 Net Delivered Fuel Price 265 MMBtu Fullscreen x s so Equity and Project Ownership Equity Debt Fuel Quality Selected Fuel GAS Close Full Screen s During Construction 0 0 100 0 Higher Heating Value of Fuel 4 000 BtuwSCF sz During Operations 40 0 60 0 hw ss Ash in the Fuel by Weight 0 0 0 00 Ib AshMM sa Owner s Interest in the Project 100 0 Sulfur in the Fuel by Weight 0 0 0 00 Ib 502MM Ww g g s Fnuirnnmental Cantrals Astar ae c iA f EconEx 2 y xs 1 E y xls 2 txs 1 S txls 2 Comp CERFIO LE 1 56 PM j b Comparison Feature 2 You can compare ALL OF THE SHEETS quantifying the magnitude of changes between two cases This Macro works only with IDENTICAL VERSIONS of EconExpert WIND This procedure allows you to Compare and Quantify Differences between two different EconExpert WIND mode
48. Expert WIND model include Comments that provide information about the purpose and function of the respective input cell or results table Cell Comments can be turned ON or turned OFF from the EconExpert WIND UTILITIES Menu If the Cell Comments feature is turned ON a Red Triangle comment indicator will appear in the upper right corner of the affected cells in the model The corresponding Help Comment will appear as you move the cursor near to or over the Red Triangle p 36 EconExpert WIND Users Manual Copyright 2001 2008 VID Worksheet Tabs Tabs at the bottom of the spreadsheet identify the various worksheets and tables in the EconExpert WIND model Worksheets are organized into the following categories Administrative Summaries Inputs Reports Graphs VVVVV Administrative Sheets These sheets provide the user information about the model holding bins and other information that support the use of the model 1 2 3 License The License Sheet provides the Software License Agreement EconExpert WIND may only be used under the terms of the applicable License Agreement and the user must acknowledge their acceptance of those terms in order to enable the model The terms of the software license should be read carefully BEFORE using the model Prior to the first use of the model the user must accept the license agreement by clicking on the button labeled I Have Read and Accept to the Terms of the EconExpert WIND Lice
49. ITATION ANY IMPLIED WARRANTIES OF MERCHANTABILITY FITNESS FOR A PARTICULAR PURPOSE OR THAT THE MODEL OR THE RESULTS THEREFROM SHALL BE ERROR FREE CHECK YOUR WORK THE RESULTS GENERATED BY THIS MODEL ARE YOUR RESPONSIBILITY 6 Technical Assistance Licensee and its Authorized Users shall be entitled to 30 days of free technical assistance applied only to the installation and use of the Model which will be provided via phone or e mail during the first 30 days of an initial subscription period Technical assistance beyond this 30 day period or any on site technical assistance shall be provided at the discretion of CEI and may be billed to client at CEI s then current consulting rates for technical assistance 7 Installation of the Model The electronic software provided by CEI under this Agreement will be subject to a limited installation period after which the software provided may not install properly on the User s Computer s If appropriate CEI can provide replacement electronic copies of the software during the period of this Agreement with a new authorized period of installation p 94 EconExpert WIND Users Manual Copyright 2001 2008 8 Inputs Examples and Derivative Works The Model includes sections that have been designated as Unprotected where Authorized Users may input data or may perform custom analyses using the results generated within the Model both of which analyses and generated results are defined as and de
50. MATCH YOU WILL BE PROMPTED UP TO 3 TIMES FOR THE CORRECT CODE After the correct code is entered you will be asked to enter your User Name usually your First Name and Last Name The User Name that you enter must be at least 8 characters long The name you enter will appear on the Program Greeting each time you open EconExpert WIND After entering your name enter the name of your Company This Company Name will appear on all printed reports generated by the model Next you will then see the following greeting acknowledging successful extension of the license Figure 4 EconExpert WIND Greeting Screen EconE xpert LP Version 5 0 407 Copyright 2001 2002 2003 CEI Inc All Rights Reserved Welcome Steve Provol of Competitive Energy Insight Inc The current Date is 08 01 2003 Your License is valid until 07 23 2004 Remember to save your work periodicaly and to check your results carefully When you use this model you are bound by the terms of the Software License Agreement Copyright Notice EconExpert LP is protected by copyright law and international treaties Unauthorized use modification reverse engineering reproduction or distribution of EconExpert LP or any portion of it may result in severe civil and criminal penalties and will be prosecuted to the maximum extent possible under the law Select OK and EconExpert WIND will initialize and be ready for use Other previously saved copies of EconExpert WIND should perform normally
51. SAVE EXCHANGE OR RESTORE INPUTS 26 4 TABLE VIEWING AND FORMATTING 27 5 FORMULA AUDITING 28 6 RANGE PROTECTION FOR PROJECT SUMMARY AND GRAPHS SHEETS 29 7 HIDE COMMENTS IN CELLS 29 8 TEMPORARILY CHANGE COMPANY NAME ON REPORTS 29 9 CREATE VALUES ONLY COPY OF THE MODEL FOR SHARING WITH OTHERS 29 10 AUTOMATICALLY INSERT FORMULAS IN THE ANNUAL INPUTS SHEET REFERENCING TABLE 1D DATA CONVERSION SHEET 30 11 COMPARE ECONEXPERT WIND CASES OR FILES TO IDENTIFY CHANGES 30 12 RESERVED 35 13 IMPORT DATA 35 14 EXTEND MY LICENSE 35 E HELP 36 1 THE ECONEXPERT HELP MENU 36 2 HELP COMMENTS 36 VID WORKSHEET TABS 37 p 5 EconExpert WIND Users Manual Copyright 2001 2008 ADMINISTRATIVE SHEETS SUMMARY SHEETS INPUT SHEETS REPORT SHEETS GRAPHS SHEETS VII INPUTS TO THE ECONEXPERT WIND MODEL IX A B X A B C XD TABLE 1 WIND GLOBAL INPUTS SCHEDULE AND PRODUCTION PROJECT REVENUE AND OPERATING EXPENSES INVESTMENT COSTS PROJECT FINANCE TABLE 1C ANNUAL INPUTS TABLE 1D DATA CONVERSION SHEET TABLE 1P PARTNER RETURNS PARTNERSHIP OVERVIEW AND DISCLAIMER DEFINING PARTNERS PARTNERSHIP FINANCIAL STATEMENTS ALLOCATIONS CASH DISTRIBUTIONS OPTIONS CASH DISTRIBUTION BASIS GUARANTEED PAYMENTS GLOSSARY TABLE 1Q QUICK PROJECT ANALYSIS SAVING ECONEXPERT WIND SPREADSHEETS SAVING FULLY FUNCTIONAL COPIES OF THE MODEL CREATING A VALUES ONLY COPY OF THE ECONEXPERT WIND MODEL SENSITIVI
52. TY ANALYSES SETTING THE TERM SENSITIVITY INCREMENTS TORNADO DIAGRAMS CUSTOMIZING ECONEXPERT WIND APPENDICES 84 84 85 86 87 87 89 91 92 p 6 EconExpert WIND Users Manual Copyright 2001 2008 List of Figures Figure 1 How to Obtain an Authorized Subscription to EconExpert WIND e cc cesceeceeceseeeeeeeeeeeeneeeaeeeaeeeaeeenaees 11 Figure 2 License Authorization Screen Yes NO ccceecescsssseeeneeeneeeceececsaecsaecssecesecsaeceseeseeeeeeseeeseaeeeaeeeaeesaaeeaaees 11 Figure 3 Extension Code Screens ccsscvsescsceiececteesdcccsesas secueassdisvenasuseseyidis cvs idoseeevieacsuvvaneveuwvacie ies dubeleevsndediraanensbevestens 11 Figure 4 The EconExpert WIND Title Screen iii csicciciescssesstudegietalestyaetonecbetesoveveneadevustasondvanteieedelesneebsncederasnensstpaetens 19 Figure 5 The EconExpert WIND Command Menu 2 0 0 ceeceecseseeseeeseeesceccecaeceaeceaeenaeenseeeeeeeneseeeecaeesaeeeaeeeaaeeaaees 21 Figure 6 Example Display of Current Contents of Holding Bins o0 ee e eee cesceseceseceseceeeceeeeeseessneseneeeaeeeaeeeaaeenaees 26 Figure 7 Comparing Data Files Highlighting of Inputs that Changed in a TARGET File 000 eee eee eee ene eneees 32 Figure 8 Comparing Data Files Quantifying the Difference in Inputs and Results in a TARGET File versus a REFERENCE FILE oiteicccca cesta theta leiebdiedieten cadeiotacieisactbieed bisooveyladeduvliin els odanesbieb a i aa aiia 34 Fisur
53. Tutorial is broken down into the following sections Overview Command Menus Help Features Worksheet Tabs and Tables in the Model Customizing the Model Information on How to Extend Your License to Use the Model At the beginning of each section you will have the option to skip forward to a later section p 20 EconExpert WIND Users Manual Copyright 2001 2008 VI The EconExpert WIND Command Menu EconExpert WIND includes a Custom Command Menu that in Excel 2002 and alter appears on the Excel Menu Bar to the right of or below the Excel s menu Help Option In Excel 2007 the Custom Command Menu appears under the Add Ins option on the Excel 2007 ribbon The EconExpert WIND Command Menu provides you with control of the EconExpert WIND model s special functions and On Line Help Features The menu will be added to the Excel Menu bar each time that you open the EconExpert WIND model and will be deleted each time you close it If you become locked up in Windows when EconExpert WIND is opened it is possible that the menu will appear when you reopen Excel even if EconExpert is not opened To delete the extraneous menu simply reopen and then close the model If you are using Excel 2007 the EconExpert Menu will appear in the Add Ins Ribbon on the Vista Ribbon bar The Command Menu appears at the top of the EconExpert WIND screen as shown below The various options in the Command Menu are described following the Figure
54. UES from the source data file or can be linked using formulas e Aggregated results will be referenced by formulas in the Annual Inputs Sheet overwriting the current Annual Inputs and overriding Global Inputs in the years that non zero values are transferred e If block period data is utilized it is recommended that the user enter that data for the whole project life If the data is not available for the whole project life use formulas in the cells to project the data over the entire project life Otherwise where blank cells or zeros are transferred to the Annual Inputs Sheet the Global Inputs data will be applied 11 Compare EconExpert Wind Cases or Files to Identify Changes EconExpert offers two options for comparing different cases and quickly understanding the differences between those cases a Comparison Feature 1 You can compare the INPUT SHEETS of two different cases and identify which inputs have changed p 30 EconExpert WIND Users Manual Copyright 2001 2008 This procedure allows you to track input changes between two different EconExpert WIND models Input categories that have changed are compared and identified by highlighting on an ORANGE BACKGROUND A new worksheet is created with copies of all of the tables in the model with the changed items highlighted You can also Track input changes between an active input sheet and a holding bin in the same model by saving the current model as two different file names
55. Windows Explorer locate the directory where you saved the files and double click on them to initiate unzipping the files The Initial Installation File you receive from CEI will only enable the use of the model for a limited period usually 10 days If you have purchased an extended period license to use the EconExpert CP model CEI will provide you with the necessary authorization codes to fully enable your use of the model for the subscribed license period p 14 EconExpert WIND Users Manual Copyright 2001 2008 Step 2 Start Microsoft Excel and use the File Open command on the Excel Command Menu to select EconExpert CP Installation File V xxx xls from the directory where the Installation File has been added Excel 2002 2003 IMPORTANT NOTE EconExpert CP must be run with Macros Enabled Microsoft Excel Versions 2002 and later include a Security Setting that can prevent the user from opening spreadsheets that contain macros If this Security is set to HIGH then you will not be permitted to open EconExpert CP with Macros Enabled Prior to opening EconExpert CP you may want to check this setting on your version of Excel To do so select Tools Macro Security from the Excel Command Menu On the Security Level Tab the settings selection should be MEDIUM or LOW The MEDIUM Setting will continue to provide you with the warning message concerning spreadsheets that contain macros Also it is recommended that no other worksheets
56. XXXXXXXXXXXXXXXXXXXXX Notice This spreadsheet is protected by copyright law and international treaties Unauthorized use reproduction or distribution of this spreadsheet or any portion of it may result in severe civil and criminal penalties and will be prosecuted to the maximum extent possible under the law Provide the information on the screen to CEI We will use this information to provide you with the necessary License Extension Codes over the phone which are specific to your system Select OK and the following screen will appear Figure 2 License Authorization Screen Yes No Econ Expert LICENSE AUTHORIZATION Do you want to continue by entering the Authorized License Extension Code provided to you by CEI If you have contacted CEI to obtain the Extension Code select YES You will then be prompted by the following screen Figure 3 Extension Code Screen EconExpert WIND V7 7013 7 Copyright 2005 CEI Inc All x Enter Authorized Extension Code Provided by QEconExpert WIND V7 70 Three 5 Character Segments Separated by Spaces The Code is Case Sensitive and MUST match exactly YOOX HHHHH XXHHH EconExpert WIND Users Manual Copyright 2001 2008 Enter the 15 character code provided to you by CEI The License Extension Code is comprised of three sets of 5 Character Case Sensitive Segments each separated by a single space THE CODE IS CASE SENSITIVIVE AND MUST MATCH THE AUTHORIZED CODE EXACTLY IF IT DOES NOT
57. able where specific amounts can be entered in each year 3 Investment Costs Capital Investment Costs are entered only in Table 1 These are costs incurred during the project development engineering and construction phases of the project but prior to commercial operations of the facility Please note that these costs are not escalated by the model and are used as the exact amounts entered by the user For each line item the user can enter a per turbine cost and a total cost These two costs are additive and are summed in the adjacent column These costs are broken into two main categories Figure 18 Table 1 Wind Global Inputs Development Costs Phase 1 Development Costs These costs are typically incurred prior to Investment Costs of Turbines 15 financial closing and are treated by EconExpert _Past fissstnestnmen AT Set SP WIND as a lump sum expense in the first month Developer Fee OOOO O s Met Stations 35 35 2m of the construction phase A number of default ae a See 25 15 Insurance cost categories are provided as well as two optional User Defined Categories The user may also add contingency as a percentage of the P rrerrrernemcons i Development Costs and as a fixed amount in pte A 000 the two entries will be summed if both sustazosoe aa are entered You can specify up to 8 categories Pt oral Development Core of Tasesa Coniagenos of Phase 1 Developme
58. alysis In addition to processing the Global Annual and Data Conversion Sheets this menu also allows you to e CLEAR the Custom Construction Drawdown and Debt Equity Schedules Any inputs to a custom drawdown and debt equity schedules will be cleared and the default S Curve Drawdown that EconExpert WIND automatically calculates to match your construction period will be restored e Preloaded Input Cases This option resets the model the initial configuration with some preset values 4 Table Viewing and Formatting Selecting this option will allow you to change the format of the Tables in the model The options include e Freeze and Unfreeze Panes Freezing titles allows you to set the header rows and columns of all tables in the model so that the row and column titles will remain on the screen as you scroll down or across the individual tables You can also unfreeze the titles for all tables in the model e Because most of the worksheets in EconExpert WIND are protected you will not be able to change the cell formats from the Excel menu but this option has been added to the UTILITIES Menu allowing you to change the format of selected cells in the model You can selectively change the number format shading font color font type underline borders or column width of tables and cells in the model The following options allow you to change the cell formats p 27 EconExpert WIND Users Manual Copyright 2001 2008 Number For
59. an enter a sales tax figure as an amount and as a of Phase 2 Costs the two entries will be summed if both are entered p 56 EconExpert WIND Users Manual Copyright 2001 2008 The last section is the Soft Costs which can be estimated using a Factored amount and a 000 amount If both are entered they will be summed Factored amounts are calculated as follows Start up and Mobilization Costs As a percentage of the total Fixed O amp M Costs in Base Year Debt Reserves Based on the equivalent prorated number of months of debt payments using a mortgage type payment schedule Debt Reserves Based on the equivalent prorated number of months of debt payments using a mortgage type payment schedule Vendor Letter of Credit as a percent of total Wind Turbine costs which decreases as payments are made and tracked on Table 3 Construction Working Capital Based on Accounts Receivable and Accounts Payable Days specified in the two entry cells On Table 1C the user can simply specify a dollar amount instead of considering receivable and payable days Wind Farm Residual Value Following the Capital Investment Cost table the user is provided with the option to recover a residual value on the plant investment at the end of the Project Life The residual value can be specified both as an amount and as a percentage of the original plant basis If both inputs are used the result will be the sum of the two inputs In addition ass
60. at are not Licensed and Authorized by CEI The shared copies can be made to be Fully Functional on a new user s computer by obtaining the proper License Extension Codes from CEI which can be provided to new Authorized Licensees as described when the Model is opened on an unauthorized computer in the EconExpert HELP Menu and in the User s Manual 9 3 Sharing of Electronic Values Only Copies of the Model The Model includes preprogrammed algorithms accessible through the Model s Command Menu that will generate electronic copies of the Model which contain only the values generated by a specific case and contain no formulas capable of analyzing other cases with the Model Users may share with third parties such Values Only copies of the Model that have been generated using macros that are accessed by the Model s Command Menu All such electronic copies shall include the EconExpert Trademark and copyright notices as provided by CEI in the Model 9 4 Sharing of Printed Reports Generated by the Model The Model includes preprogrammed algorithms accessible through the Model s Command Menu that will generate printed copies of reports which contain only the values generated by a specific case and contain no formulas capable of analyzing other cases with the Model Users may share with third parties such printed Values Only copies of the Model that have been generated using macros that are accessed by the Model s Command Menu No other form of pri
61. ate specific input categories select from the sub menu a list of the Input Categories that are located on Table 1 Wind Global Inputs Inputs on this sheet typically apply over the life of the project or are entered as a single value and then escalated at a constant rate p 21 EconExpert WIND Users Manual Copyright 2001 2008 B e Annual Inputs Table 1C The Wind Annual Inputs Table is an optional table used to refine the setup that you have developed using Table 1 Wind Global Inputs To locate specific input categories select from the sub menu a list of Input Categories used in Table 1C Annual Inputs Annual Inputs are inputs that apply in a single year during the life of the project When entered non zero inputs or results generated using formulas in the Annual Inputs Table will override or will be added to results otherwise calculated using the corresponding Global Input e Partner Return Sheet Table 1P The Navigation sub menu options take you to the different inputs and calculations specifically for modeling partnership accounting and returns Note that in more recent versions of EconExpert WIND partnership analysis is performed in a separate module e Data Conversion Table 1D Select from a list of Input Categories used in the Data Conversion Sheet The Data Conversion Sheet allows you to enter forward pricing data in up to 24 block periods year and then to convert that data to an equivalent annual format for use
62. ating entered e Run All Sensitivity Cases You can run all of the programmed sensitivities in a single batch updating all of the corresponding graphs and printing them if desired This selection will take some time to execute if selected It is highly recommended that you run all of the Sensitivity Cases prior to creating a Values Only copy of the model to ensure that all of the Sensitivities are updated to match the current Values Only case For additional information on using EconExpert WIND s Automated Sensitivities and Tornado Diagrams see the Sensitivities section later in this manual D UTILITIES The UTILITIES Menu provides useful tools to manage the model Features on the UTILITIES Menu include 1 Show Pop Up Project Metrics These summaries are convenient pop up reports that show e Before Tax Returns e After Tax Returns p 25 EconExpert WIND Users Manual Copyright 2001 2008 2 3 Partner Returns Development Costs Installation Costs Revenues Operating Expenses Debt Service Project Cash Flow To close the summary simply click on the X box on the top right of the form Load Global Inputs Wizard The Global Inputs Wizard will walk you through each section of Table 1 Wind Global Inputs and allow you to directly jump to any section Each section has its own print area which is also access from the Wizard Save Exchange or Restore Inputs This feature allows you to store the
63. ation of EconExpert WIND s Global and Annual Inputs Sheets Tables 1 and 1C In addition to entering values into these cells formulas may also be entered These formulas can be tied to other cells in the model or to custom tables that you develop Useful approaches for customizing the model include Free Form Sections At the bottom of each sheet a blank unprotected area formatted as Yellow Cells is provided where you can develop your own custom calculations In these areas you can set up your own tables which can be linked to other tables and calculations in the model Figure 43 Example of Areas as the Bottom of Each Sheet for Custom Calculations You May Use the Outlined Section Below for Calculations and Customization You can select the format of cells in these tables using the UTILITIES Reformat Cells option on the EconExpert WIND Command Menu which allows you to select various number or percentage formats New Sheets You can also insert a new sheet into the model To do this right click on any of the Sheet Tabs and select Insert Worksheet from the Excel right click menu To take best advantage of customization link your custom formulas to Annual Inputs in Table 1C Utilize the User Defined Input Options for Revenues and Expenses In this way all of the functionality of the model will reflect your customization Note Be careful not to create Circular Calculations using these approaches CEI also provides
64. ations of revenues minus expenses Depreciation and taxes are provided to be used in the calculations of Net Present Value NPV and Internal Rate of Return IRR provided in Table 8A NOTE The calculated unleveraged IRR may change slightly usually by less than 0 1 as a function of changes in project equity This can occur when you select the Factor option for calculating property taxes or insurance costs which when carried through to the unleveraged analysis are tied to the cost basis which in turn has a small dependency on the amount of debt assumed This effect is very minor and will not be observed if either annual inputs or a fixed 1000 yr amount is entered for Property Taxes and Insurance costs Results in Table 7A are expressed based on the Owner s percentage interest in the project 12 Table 8 NPV amp IRR Leveraged Table 8 provides calculation of the Net Present Value NPV and Internal Rate of Return IRR on a Leveraged Basis using results from Table 7 The IRR represents the after tax return on the Owner s investment The NPV is calculated at the specified Discount Rate A negative NPV does not necessarily indicate that a project is losing money but rather that the IRR achieved by the project is less than the discount rate specified for the NPV calculation An NPV of 0 means that the IRR and Discount Rate are equal The Debt Service Coverage Ratios DSCR from the debt sheet is reported DSCR is a common metric used
65. ayment based on either the number of turbines or an annual payment Last there is a minimum payment than can be specified The minimum payment is calculated against the sum of the variable and fixed Land Lease Royalty payments Note for each of these items you must specify the starting and ending years and you also have the option of entering a specific Real Escalation for each item p 54 EconExpert WIND Users Manual Copyright 2001 2008 Figure 17 Table 1 Wind Global Inputs Lease Land Royalty Land Lease Rogalty Land Lease of Revenue Period One Land Lease of Revenue Period Two Land Lease of Revenue Period Three Fixed Annual Payments Minimum Annual Payments Applies to ALL Property Taxes and Insurance Property Taxes and Insurance can be individually input in Table 1 as amounts in 000 year and as a Factored amount if both entries are used they are summed as follows e The Factor for estimation of life of project yearly Property Taxes and Insurance is the percentage of current book Asset Basis As the asset is depreciated and the basis declines the annual Property Taxes and Insurance will correspondingly decline e Ifa 000 amount is entered for Property Taxes or Insurance the amount is used in each year of the project life and is escalated using the GNP deflator e The user may also enter annual property taxes and annual insurance costs in the Annual Inputs T
66. be opened when you are installing EconExpert CP If your security level setting is set to Medium as discussed above Microsoft Excel will now provide you with a warning which is similar to Figure 5 Microsoft Excel Enable Macros Screen Microsoft Excel 2 x C Econ Expert Financial Model 2 0 XLS contains macros Macros may contain viruses It is but safe to disable macros but if the macros are legitimate you migb actionality Disable Macros Enable Macros More Info Excel 2007 If you are using Excel 2007 in order to properly access EconExpert please do the following 1 Before opening EconExpert Open Excel and select the Office Button on the top left corner of your screen 2 From the Office Dialogue box select the button labeled Excel Options on the bottom right of the dialogue box On the General Tab click on the Checkbox labeled Show Developer Tab on the Ribbon Open EconExpertt When the model is opened select Options and Enable Content to allow EconExpert s macros to run ee ae p 15 EconExpert WIND Users Manual Copyright 2001 2008 Step 3 Step 4 Whenever you open EconExpert you MUST authorize macros to run If this option is not selected the model will not function The installation of EconExpert CP will proceed EconExpert CP will be saved to your C Drive in the folder C EconExpert Files Settings for use of the model will be initiated Next the following screen wil
67. by banks and financing institutions to measure project performance versus debt obligations DSCR s are provided on a both a before tax and an after tax basis Debt Coverage Ratio Before Tax is defined as the Earnings Before Interest Taxes and Depreciation EBITAD divided by the debt service payment and the fees on the Senior Debt The Coverage Ratio after tax on the Senior Debt is defined as the net cash flow after tax available to cover debt divided by the debt service payment and the fees on the Senior Debt Results in Table 8 are expressed based on the Owner s percentage interest in the project 13 Table 8A NPV amp IRR Unleveraged Table 8A provides calculation of the Net Present Value NPV and Internal Rate of Return IRR on an unleveraged basis using results from Table 7A The IRR represents the after tax return on the investment The NPV is calculated at the specified Discount Rate A negative NPV does not necessarily indicate that a project is losing money but rather that the IRR achieved by the project is less than the discount rate specified for the NPV calculation An NPV of 0 means that the IRR and Discount Rate are equal p 43 EconExpert WIND Users Manual Copyright 2001 2008 NOTE The calculated unleveraged IRR may change slightly usually by less than 0 1 as a function of changes in project equity This can occur when you select the Factor option for calculating Property Taxes or Insurance costs which when
68. carried through to the unleveraged analysis are tied to the cost basis which in turn has a small dependency on the amount of debt assumed This effect is very minor and will not be observed if either annual inputs or a fixed 1000 yr amount is entered for Property Taxes and Insurance costs Results in Table 8A are expressed based on the Owner s percentage interest in the project 14 Table 9 Sources and Uses Table 9 provides an analysis of the Sources of Funds and the Uses of Funds in 1000 during the construction period and during the operations phase of the project Sources and Uses of funds are balanced in each year A complementary Sources and Uses calculation during the operations phase is provided in Table 12 where results are expressed in MWH Results in Table 9 are expressed based on the Owner s percentage interest in the project 15 Table 10 Major Maintenance Table 10 provides calculations of Periodic Capitalized and Expensed Major Maintenance Costs The balance accumulated in the Major Maintenance Reserve account is also calculated Major Maintenance Reserves are applied to Periodic Major Maintenance Expenses in years when Major Outages have been scheduled Periodic and Capitalized Major Maintenance Costs are depreciated for Book and for Cash Purposes Expensed Major Maintenance Costs are treated in the same manner as are Fixed Operating Expenses 16 Table 11 Financials Table 11 provides the Project s Financial Statements
69. certain cases the accounts will be negative anyway because of the taxable losses In these cases there will not be any distributions until the accounts are positive Maintain Basis Similar to the above explanation for Capital Accounts in some cases partners must attempt to keep positive basis With this selection cash distributions will only occur up to the amount that will keep the basis positive and in the case that the basis is already negative no distributions will occur until the basis is again positive For both account maintenance options i e maintain capital account and maintain basis there is a Minimum Account Balance option whereby the user can set the minimum amount to exist in the capital account or inside basis in case such an amount is specific in a partnership agreement The calculations for these options are performed in two locations under each partner s capital accounts and at the bottom of the table in rows 718 831 The idea for all options is to maximize the cash distributed under the given constraints The following section describes the supporting calculations for each option Distribute All Cash With this option the model will look at current and future cash obligations and distribute only cash that will not be required to meet an obligation given future cash flows In rows 742 753 current and future cash sources and obligations are identified and compared with the result being a current Cash Available for
70. chases land the value can be entered here The next section Wind Turbine Costs offers five user defined rows in addition to the Wind Turbine Cost rows Note that there are two Wind Turbine Cost rows one for costs in dollars and one for Euros in the event that turbines being purchased are European and manufacture is pricing the turbines in Euros Simply click the check box as indicated in the figure below enter a conversion rate and the cost in Euros in the top row The user can then enter any additional wind turbine costs in dollar on the row below On Table 3 Construction the user can allocate those costs of the construction cycle and which costs will occur in which months Figure 19 Table 1 Wind Global Inputs Wind Turbine Costs Some Wind Turbine costs in Euros EUROMS Per Turbine wells le Mot Escalated Subtotal Wind Turbine Costs in Euros e sooli ee 6 400 Wind Turbine Costs in s seo dS 18 750 Subtotal All Wind Turbines Cost The next section in Phase 2 is the Balance of Plant expenditures All of the category titles can be modified in this section In the next section Other Costs there is only one category title that can be modified The other category is for the Project Valuation sensitivity explained in another section The user may also add contingency as a percentage of the other Phase 2 Costs and as a fixed amount in 000 the two entries will be summed if both are entered Likewise the user c
71. ct For more information about modeling partnership structures please see the section later in this manual Report Sheets Each of these sheets contains the calculations and outputs for the described areas 6 Table 3 Construction Table 3 provides calculations of monthly and cumulative monthly construction expenditures based on a standard S Curve Drawdown schedule and the Debt Equity ratios specified in Table 1 Interest during construction and soft costs Start up mobilization spares working capital debt reserve and up front loan fees etc are also allocated over the construction term As an alternative to the Default S Curve Capital Cost Drawdown Schedule generated by EconExpert WIND and to a constant Debt Equity schedule during the drawdown period you may input your own custom Capital Cost Drawdown and or Debt Equity Schedules by entering the percentage of Capital Costs that are expended monthly during the Construction Phase and the percentage of project costs covered by equity in each month It is important to note that non zero entries to this schedule will override the default values in the months that they are entered Since the resulting drawdown schedule must sum to 100 it is recommended that you provide the complete drawdown schedule if custom drawdown entries are made A warning will be issued if the resulting drawdown schedule does not sum to 100 Table 3 is organized as follows o Construction Drawdown and Financing Sched
72. d Lease Royalty Summary Tax Credits Property Tax and Depreciation Owner s Stock Insurance Income Taxes and Performance Investment Tax Credits Property Taxes and Insurance Please note that inputs to Table 1 are in BASE YEAR dollars This means that the cost and revenue entries to Table 1 will be escalated by the respective compounding of the GNP Deflator and the Real Escalation applied to each item even if the cost or revenue does not start until a later year in the project All results calculated using the Global Inputs Sheet will be prorated based on partial years of operation in the first and last years of the project life as appropriate A red asterisk identifies cells where a potential warning message is located Also note that when inputs are entered in Table 1C Annual Inputs that override a particular entry to Table 1 Wind Global Inputs the cell format in Table 1 will change to Bold Red and an Annual Input indicator will appear next to the respective input This feature is provided just to advise you that a particular input to Table 1 is being overridden somewhere else in the proforma The Appendix also provides examples on how to use the various Global Inputs A variety of cell Help Comments also appear with each input in Table 1 To view the comments first enable them from the EconExpert Help Menu and then place the cursor over the red triangle on the corner of the respective cell p 48 EconExpert WIND Users Manual
73. during the new license term p 12 EconExpert WIND Users Manual Copyright 2001 2008 III System Requirements EconExpert WIND is a Microsoft Excel spreadsheet that has been complemented with sophisticated Visual Basic macros to add flexibility and functionality While the spreadsheet will work effectively with a wide variety of computer hardware operating systems and versions of Microsoft Excel the following minimum system requirements are recommended Hardware e 512 MB or more of Random Access Memory RAM e To print very large multiple table reports from the model it is recommended that you have your system configured with at least 2MB of printer spooling memory This can be as network or computer RAM or as a memory module on the printer e A graphics capable display with setting of at least 800 x 600 Pixels and preferably 1024 x 768 Pixels e A graphics capable printer e Atleast 15MB of available storage on you C hard drive This memory is needed for the initial installation only After the installation is completed the model can be saved and operated on the installed PC from any local or network drive Software e Windows XP Windows Vista or later Operating Systems e Microsoft Excel 2002 2003 2007 Office Vista Office XP or later e Winzip or the equivalent for decompressing the original files Note that if requested the EconExpert WIND model and documentation can be provided as self extracting exe files
74. e 858 566 0221 Fax 858 566 0287 Email Info CEInsight com Website http www CEInsight com The EconExpert User s Manual can be downloaded for free from the Website 12 Jurisdiction This Agreement shall be governed by and interpreted in accordance with the laws of the State of California without reference to its rules on conflicts of laws The sole jurisdiction and venue for any litigation arising out of this Agreement shall be an appropriate federal or state court in California San Diego County 13 Entire Agreement This Agreement and any other addenda hereto that have been signed by CEI and Licensee contain the entire Agreement between the parties hereto with respect to the subject matter hereof and supersede any and all prior understandings correspondence and Agreements oral or written between the parties with respect thereto No change amendment or modification of this Agreement shall be valid or binding upon the parties unless such change amendment or modification shall be in writing and duly executed by both parties 14 Survival In the event of termination or expiration of this Agreement the obligations of Sections 3 Termination 5 Warranty 10 Limitation of Liability 11 Copyright Notice 12 Jurisdiction 15 Indemnification and 16 Attorneys Fees shall survive such termination or expiration p 95 EconExpert WIND Users Manual Copyright 2001 2008 1
75. e 9 Data Import ImStructtons xi ciscsaset casessanecedsvans casssaseetaasaagens Haast EEn aE ETEA EAE NEET EEES 35 Figure 10 Table 1 Wind Global Input Categories 0 0 ee eceeseeeneeecesceceecaeceaecnaeceaeceseeseeeeeeeseaeeeaeesaeeeaeeeaaesaaees 48 Figure 11 Table 1 Wind Global Inputs Taxes and Investment Tax Credits 00 0 0 eile ceecceeceeeeeeeeeeeeaeeeseeeaeeeaaees 49 Figure 12 Table 1 Wind Global Inputs Taxes and Investment Tax Credits 00 0 0 cei ceeceecceeeceeeeeeeeeeeeeeaeeeaeeeaeeeaaees 51 Figure 13 Table 1 Wind Global Inputs PPA Pricing Structure oe eee eeseeeseceseceseceseceeeeeeeesseeseneseneeeaeeeaeeenaeenaees 52 Figure 14 Table 1 Wind Global Inputs PPA Pricing Summaries cc ceceeseeseceseceseceseceseeeseeseneseneeeaeeeaeeeaaeenaees 52 Figure 15 Table 1 Wind Global Inputs Spare Parts Costs ecceseessesssecssecsseceseceseceseceseeeeeeseeeseeeseaeeeaeeeaeesaaeeaaees 54 Figure 16 Table 1 Wind Global Inputs Developer Royalty oo eee eeseessecsseceeceseceeceseeeeeeseeeseneseneeeaeeeaeeeaaeenaees 54 Figure 17 Table 1 Wind Global Inputs Lease Land Royalty eeceessecsseceseceseceeceseeeeeeseneseneseneseaeeeneesaaeenaees 55 Figure 18 Table 1 Wind Global Inputs Development Costs cee eeeessesssecsseceseceseceseeeseeneeeeeeeeeeeeeaeeeaeeeaeeeaaeeaaees 55 Figure 19 Table 1 Wind Global Inputs Wind Turbine Costs oo eeceessecsseceseceeceseceecseeesseeseneseneeeaeeeaeeeaaeeaaees
76. e Case Holding Bin 3 Forward Pricing Curves Alternate Case 1 Holding Bin 4 Forward Pricing Curves Alternate Case 2 Active Data Conversion Inputs Sheet Base Case Plant Dispatch Scenario Data Conversion Holding Bin Optimistic Plant Dispatch Scenario p 26 EconExpert WIND Users Manual Copyright 2001 2008 Clear all Holding Bins Select this to start a completely new case For each of the five input sheets you will have the following four options e SAVE acopy of the active Input Table to a Holding Bin When you SAVE the contents to the Holding Bin the current contents of the Holding Bin are overwritten e EXCHANGE a copy of the active Input Table with a copy saved in the Holding Bin This option allows you to flip the copies of input tables that have been previously saved with the active Input Sheet When you EXCHANGE the contents with a Holding Bin the current contents of the active Input Sheet are saved in the Holding Bin and the current contents of the Holding Bin are written to the active Input Sheet Neither is lost e RESTORE a copy of Input Table that had been previously saved to a Holding Bin This option allows you to recover the copy of input table that had been previously saved When you RESTORE the contents from a Holding Bin the current contents of the active Input Sheet are overwritten e CLEAR the Input sheet This option clears the Inputs Sheet of virtually all inputs allowing you to restart with a fresh an
77. e in Major Maintenance Reserve Account 143 You May Use the Outlined Section Below for ail i H H j Asen A eS B Beco zl Ty e2 Etas SEAE A FAS OOBR 217PM EconExpert WIND Users Manual Copyright 2001 2008 The ORANGE shaded cells indicate where input changes have occurred in the TARGET file relative to the REFERENCE file and identify the amount and direction of the change 12 Reserved 13 Import Data EconExpert WIND is equipped with a utility that allows you to transfer input data from one copy of the model to another This feature is most useful when you upgrade the model and need to easily transfer data to the new version without having to manually re enter the data It is also a convenient way in combination with the Holding Bins to consolidate models After selecting this option the following screen will appear Figure 9 Data Import Instructions EconExpert Importing Data from Another EconExpert Model 3 3 xj gt IMPORTANT FOR SUCCESSFUL DATA IMPORT PLEASE READ AND FOLLOW THESE INSTRUCTIONS Before transferring data you must open two copies of the EconExpert Model 1 The Destination EconExpert Model that you want to transfer data to This Destination model MUST be opened FIRST 2 The Source EconExpert Model that you want transfer data from This Source model MUST be opened SECOND and must have at least 2 available windows EconExpert Default The two files MUST have
78. ears on a shaded cell the format of that cell will change to indicating that data is present and used by the model Table 1C is organized into sections associated with each class of input categories and generally follows the organizational architecture of the Global Inputs sheet The columns to the right in Table 1C each represent a project year with Column F used for the first year of the project life You can locate a specific Input Category in Table 1C by either scrolling through the table or by using the NAVIGATE Feature on the Command Menu Table 1C is organized in the following sections Economic Factors The annual GNP deflator Wind Farm Performance Production losses and capacity factor Energy Contracts or Merchant Sales Period energy consumption Energy Price During Each Period Energy pricing by period Other Revenues RECs plus four user defined revenue fields Variable O amp M Variable Costs and purchased power Fixed O amp M Warranty and post warranty costs e Other O amp M and Spare Parts User defined inputs from Table 1 plus property tax and insurance Royalties and Land Lease Equivalents Lease payments to land owners or developers e User Defined Additional Annual Expenses 3 user defined expense fields e Major Maintenance Purchase of spare parts and O amp M reserves Working Capital Options for total working capital or Accounts Receivable and Payable Days Debt Service Custom inter
79. ed Variable O amp M Inputs to Table 1 Both categories offer entries in MWH The user can name these categories and the names will be carried into the various tables and charts throughout the model The calculated annual variable O amp M costs will be the sum of these two entries and will reflect the annual plant capacity factor Developer Royalty There are two options for the Developer Royalty which is a payment to the Developer after the project is operational based on the amount of power sold or revenue generated The user can enter a variable payment based on either a percent of sales or a MWH or a fixed payment based on an annual amount Note for each of these items you must specify the starting and ending years and you also have the option of entering a specific Real Escalation for each item Figure 16 Table 1 Wind Global Inputs Developer Royalty Developer Rogalty Developer Royalty of Sales Fixed Payment to Developer Sl i Total Developer Royalty I ss Land Lease Royalty There are three options for the Lease Land Royalty which is a payment to the land owner after the project is operational based on the amount of power sold or revenue generated First there are three time periods that can have different pricing terms based on either a percent of sales or a MWH The years for these three items can overlap but in most cases you will wants the years to be sequential Next there is a fixed annual p
80. eet The Data Conversion sheet provides additional flexibility to utilize energy pricing and performance in up to 24 Periods defined by the user To link this sheet with the rest of the model the user must select the option on the Utilities Menu to link the aggregated data in Data Conversion Sheet to the model by formula reference to the Annual Inputs Sheet In the Data Conversion Sheet there are annual entries for Hours in Each Period this is where you enter the Period Names Gross MWH Energy Production Curtailment Risk Reduction in Gross Production Energy Sales for each PPA Term Revenue per MWH for each PPA Term Plant Capacity and capacity factors mathematically averaged and referenced in Table 1C with formulas linked to the Data Conversion Sheet Input rows are unprotected and shaded in green Period 24 is calculated by difference to ensure that the total number of hours in a full calendar year is equal to 8760 note that leap years are neglected Please note the following points when you use this feature All data is entered in Current e Data can be copied and pasted from other sources The pasted data should be pasted as VALUES from the source data file or can be linked using formulas e Aggregated results will be referenced by formulas in the Annual Inputs Sheet overwriting the current Annual Inputs and overriding Global Inputs in the years that non zero values are transferred e If block period data is u
81. electric power production before the losses are reduced There are two user defined Variable O amp M Inputs to Table 1 which have corresponding Table 1C entries Both categories offer entries in MWH The user can name these categories in Table 1 and the names will be carried into the various tables and charts throughout the model The calculated annual variable O amp M costs will be the sum of these two entries and will reflect the annual plant capacity factor p 64 EconExpert WIND Users Manual Copyright 2001 2008 Fixed Operating Costs Fixed Operations and Maintenance O amp M costs are not dependent on annual net generation Fixed O amp M Inputs are defined in Table 1 and are structured to handle a Warranty Post Warranty and another period of costs The user can name these categories in Table 1 and the names will be carried into the various tables and charts throughout the model Other O amp M and Spare Parts Other O amp M offers four independent categories for fixed O amp M costs set up so that the user can name each category in Table 1 Also in this section the user can specify the annual Spare Parts Consumption rate The model is structured to have a one time Spare Parts Purchase which is only specified on Table 1 Lastly in this section the user can specify annual Property Tax and Insurance costs Royalties and Land Lease Payments The two entries for the lease payment will override any payments entered on Table1 includin
82. eport the full amount of the guaranteed payments as ordinary income The partner separately takes into account his or her distributive share of the partnership loss to the extent of the adjusted basis of the partner s partnership interest Cash Distribution e Partnership distributions include the following o A withdrawal by a partner in anticipation of the current year s earnings o A distribution of the current year s or prior years earnings not needed for working capital o A complete or partial liquidation of a partner s interest o A distribution to all partners in a complete liquidation of the partnership p 79 EconExpert WIND Users Manual Copyright 2001 2008 A partnership distribution is not taken into account in determining the partner s distributive share of partnership income or loss If the partner recognizes any gain or loss from the distribution it must be reported on his or her return for the tax year in which the distribution is received Money or property withdrawn by a partner in anticipation of the current year s earnings is treated as a distribution received on the last day of the partnership s tax year A partner s adjusted basis in his or her partnership interest is decreased but not below zero by the money distributed to the partner A partnership generally does not recognize any gain or loss because of distributions it makes to partners A partner generally recognizes gain on a partnership distribution only to the
83. ert WIND Users Manual V xxx PDF This is the User s Manual that can be downloaded from the CEI website www CElInsight com as an Acrobat PDF file which can be viewed and printed using Adobe Acrobat It is possible that you received a previously installed copy of EconExpert WIND from another user and that you would like to enable that copy of the model using License Codes provided by CEI If this is the case please refer to Section 2 on Page 10 of the User s Manual for instructions on how to enable a previously installed model on a new user s computer Installation files are compressed using WinZip a utility that compresses files for more efficient saving and transport via email To view the User s Manual or to install EconExpert WIND you must first decompress the files If you already own WinZip to unzip EconExpert please following these steps Step 1 Copy the original Zip or Exe files to any location and folder on your C drive Installation of the model MUST be initiated from your C drive o If you have received Zip files from CEI and have previously installed WinZip using My Computer or Windows Explorer locate the directory where you copied the files and right click on the Zip files To expand the files select the WinZip option Extract to Here Or extract the model to an alternate folder of your preference o If you have received an exe auto extracting file from CEI or the CEI Website using My Computer or
84. es menu and select Set up Model in Quick Project Analysis Format Once you select this option Table 1Q is linked into the rest of the model You can run sensitivities and also modify the other inputs sheets to enhance your analysis Table 1 Wind Global Inputs Table 1 is where Global Inputs are entered Global Inputs are premises that typically apply over the life of the project or input values that are escalated at a constant rate over the life of the project Inputs to Table 1 are organized into categories of inputs that can be located using the NAVIGATE Menu by scrolling through the Table or by using the Global Inputs Wizard Table 1 is Range Protected allowing you to enter data ONLY into specified green shaded input cells The individual Global Inputs are discussed in more detail later in this manual The Appendix also provides examples on how to use the various Global Inputs A variety of Cell Help Comments also appear with each input in Table 1 Table 1C Annual Inputs Annual Inputs apply only to a given year in the life of the project but there are entries for every year of the project Use Annual Inputs in the case where the economic item is going to vary year to year and not in a fixed manner like a straight escalation The individual Annual Inputs are discussed in more detail later in this manual Examples provided in the Appendix also give examples on how to use the various Global Inputs A variety of Cell Help Comme
85. eseaeecaeeeaeesaaeeaaees 89 Figure 42 Example Tornado Diagram ic iivc ssicesscciesstsecidetabaceessensagestd laswivebeesbevebenaccevleenusnvsunesieebacaeeseosncesttbsntusstbeonens 90 Figure 43 Example of Areas as the Bottom of Each Sheet for Custom Calculations ee eeceeeeeeeeeeeeereeeneeeneees 91 EconExpert WIND Users Manual Copyright 2001 2008 Page Intentionally Left Blank p 8 EconExpert WIND Users Manual Copyright 2001 2008 D Introduction to EconExpert WIND and CEI Thank you for choosing EconExpert WIND of the family of EconExpert financial analysis tools EconExpert WIND is the first truly universal financial proforma for the wind power industry designed to allow simplified or sophisticated analysis of any wind power project that sells energy to the grid from the perspective of any stakeholder in the project or transaction EconExpert WIND is a sophisticated and highly flexible spreadsheet developed in Microsoft Excel and can be effectively utilized to evaluate new project development acquisitions or divestitures from small wind farms to utility scale power projects The model developed by Competitive Energy Insight Inc CED a California Corporation with offices in San Diego has evolved since 1997 as a tool first used extensively in CEI s private consulting practice in support of Fortune 500 clients to evaluate opportunities for development or acquisition of thermal power generation projects Now Eco
86. est rate and debt payment schedules e Income Taxes Depreciation and Dividends Annual depreciation incomes taxes tax credits and dividends e Corporate Stock Performance Note that you can also enter formulas into annual input cells These formulas can be linked to other parts of EconExpert WIND to sheets that you insert into the model and to sections at the bottom of each table that are available for you to perform your own calculations p 61 EconExpert WIND Users Manual Copyright 2001 2008 Results generated using Annual Inputs entries to Table 1C will either override results produced from a corresponding entry to Table 1 or will be added to those results Examples of specific inputs where results are added rather than overriding Global Inputs include User Defined Revenue Sources four categories that you can define User Defined Expenses three categories that you can define Additional Tax Deductions Adjustments to State and Federal Depreciation Schedules Additional State Taxes Additional Federal Taxes After tax Dividends All of the other inputs will override Table 1 Inputs in AND ONLY IN the years that non zero values appear in Table 1C If Annual Inputs are entered in every year of the project life the corresponding Global Inputs entered in Table 1 will be totally overridden and will not be used in the analysis If Annual Inputs are only entered in some years then the Global Inputs will be used in all other years
87. etting that can prevent the user from opening spreadsheets that contain macros If this Security Setting is set to HIGH then you will not be permitted to open EconExpert WIND or any other spreadsheet with the Macros functioning Prior to opening EconExpert WIND you may want to check this setting on your version of Excel To do so select Tools Macro Security from the Excel Command Menu On the Security Level Tab the setting selection should be MEDIUM or LOW Note also that installation of the model or extension of your license must be initiated from an xls version of the model saved on you C drive Product Warranty and Warranty Limitations Users of EconExpert WIND hereby indemnify Competitive Energy Insight Inc against any and all problems damages liabilities or claims or other violation that might arise in association with any use of the EconExpert WIND model by the Licensee Competitive Energy Insight Inc makes no warranties or representations with respect to the accuracy or fitness for purpose with respect to the use or application of the model except that Competitive Energy Insight will make reasonable efforts to correct defects in the model after they are identified and will promptly provide paid Licensees with updates containing such corrections when they are available These reasonable efforts to correct defects in the model do not apply to Derivative Works developed by Users of the model CEI assumes no responsibility for or
88. g Start Settings Control Panel Display Settings Zoom settings of 75 and 100 are also provided in the event that you would prefer to see a larger print format This might be desirable if you are displaying results using a digital projector To change the Zoom Setting from EconExpert WIND select UTILITIES Table Viewing and Format Set Table Zoom 5 Formula Auditing Because the sheets in EconExpert WIND are protected you will not be able to use the Audit feature on the Excel Tools menu By double clicking on any cell in the model you can bring up the formula auditor This option is also added to the EconExpert WIND UTILITIES Menu and on the Right Click feature in the spreadsheets allowing you to use the Excel Trace Functions to determine which cells in the model provide source data for any cell of interest and which cells in the model depend on that cell p 28 EconExpert WIND Users Manual Copyright 2001 2008 6 7 8 9 Range Protection for Project Summary and Graphs Sheets This option allows you to turn ON or OFF the Range Protection for the Project Summary and the eight Graph Sheets This feature can be used to customize or enhance the model s preprogrammed graphs or to add new graphs to the model Unfortunately as various cases are run in any Excel model the formatting of graphs can change in ways that may not be desirable This is an acknowledged bug in Microsoft Excel If the formatting of the graph is disrup
89. g EconExpert WIND models as you would save any other Excel Spreadsheet To do so simply use the Excel Save or Save As selections on the Excel Command Menu The Spreadsheets you save will only work on computers that have authorized installations of EconExpert WIND Ifa saved copy of EconExpert WIND is provided to other parties who do not have a valid license they will be prompted to contact CEI to obtain License Codes to enable the model By entering these codes the models you send them can be fully enabled and users who receive and license EconExpert WIND from files shared by others will experience the same full functionality of the model as you will Without the appropriate codes transferred copies of the model will not function properly unless they are converted to a Values Only using the EconExpert WIND Command Menu Values Only copies will function on any computer but are limited to providing the results for the individual case studied when the model was converted Please note that the copyright provisions of your license expressly prohibit you from providing your original Installation Copy of EconExpert WIND to others Your name and license number are stamped on the model It is also important to note that when you perform a Save EconExpert WIND will be temporarily disabled showing Div 0 results throughout the various tables The Input Sheet Titles will also disappear This is normal behavior that is caused by a Security Featu
90. g the variable costs or minimum payments User Defined Additional Expenses The user may input Additional Annual Operating Expenses in any of three User Defined Categories Values are input in Current dollars and are not escalated These amounts are added to other expenses calculated from Table 1 Inputs and from the items listed above These costs can be fixed or variable depending how the user defines them The titles entered will appear in the various reports throughout the model The labels input by the user will appear in the corresponding tables and reports throughout the model Note that the user may also define the titles for these User Defined Categories These titles will be accessible for Sensitivities and will be updated when on the EconExpert WIND Menu is refreshed Figure 26 Table 1C Annual Inputs Fixed and Variable O amp M Inputs CUUNCAPUIL YVIND Vf fU 10 4 GLUPYIIQI LUUD UCL TIL All TUYIS MESEIVEU TABLE 1C Annual Inputs cae gga adie Year Operation in Year 1 and Year 21 Example Data Holding Bin 2 is not labled i November 1 2005 Show Comment For Instructions Shaded Cells Indicate Inputs Het Production 53 252 Wind Rating P90 No Anuai Description Example Data Inputs Used Year of Operation 1 2 Year 2006 2007 Operational Months 1 12 All Annual Inputs expressed at values are entered in Current Year i in 000 User Defined Additional Annual Expenses 000 Additional Expenses 1 000
91. h Flow Statement and Balance Sheet in Table 11 17 Table 12 Dollars per MWH Table 12 provides costs and revenues calculated in MWH during the operations phase These calculations are performed by dividing the annual revenues and expenses by the net annual power generation Table 12 includes the following expressed in Escalated Current MWH Revenues by category including energy sales capacity sales and other revenues sources e Operating Costs by category including individual contributions to fixed and variable operating costs Debt Service Expenses including a breakdown of Primary and Subordinated Debt payments e Sources of Funds including revenues from energy sales capacity sales and other income sources Uses of Funds including identification of net income after tax e A Summary Breakdown of Revenues Expenses Debt Service Income Taxes and Net Income 18 Table 13 Depreciation Table 13 provides calculations of Depreciation for Cash and for Book Purposes Depreciation is used to recover investment costs for items that have multi year lives including the initial Capital Investment and Major Maintenance Expenses that occur during the life of the project Table 13 includes the following e Depreciation for Tax Initial Capital Investment IRS Modified Accelerated Cost Recovery MACRS Schedules and State and Federal Bonus Depreciation e Depreciation for Tax Major Maintenance o Periodic Major Maintenance Expenses using the Ma
92. has obtained the appropriate License Codes from CEI Later in this manual there is an additional discussion on saving Fully Functional and Values Only copies of EconExpert WIND and to review the Software License Agreement included in the Appendix 10 Automatically Insert Formulas in the Annual Inputs Sheet Referencing Table 1D Data Conversion Sheet The Data Conversion sheet provides additional flexibility to utilize energy pricing and performance in up to 24 Periods defined by the user Select this option to link the aggregated data in Data Conversion Sheet to the model by formula reference to the Annual Inputs Sheet In the Data Conversion Sheet there are annual entries for Hours in Each Period this is where you enter the Period Names Gross MWH Energy Production Curtailment Risk Reduction in Gross Production Energy Sales for each PPA Term Revenue per MWH for each PPA Term Plant Capacity and capacity factors mathematically averaged and referenced in Table 1C with formulas linked to the Data Conversion Sheet Input rows are unprotected and shaded in green Period 24 is calculated by difference to ensure that the total number of hours in a full calendar year is equal to 8760 note that leap years are neglected Please note the following points when you use this feature e All data is entered in Current e Data can be copied and pasted from other sources The pasted data should be pasted as VAL
93. heets follows and the Example Cases in the Appendix also provide examples of using the inputs sheets A Table 1 Wind Global Inputs Table 1 Wind Global Inputs are premises that typically apply over the life of the project or input values that are escalated at a constant rate over the life of the project Global Inputs include a complete check list of the typical factors modeled in a power project Inputs to Table 1 are organized into categories of inputs that can be located using the NAVIGATE Menu or by scrolling through the Table Table 1 is Range Protected allowing you to enter data ONLY into specified shaded green input cells Table 1 is organized into sections associated with the various classes of inputs p 47 EconExpert WIND Users Manual Copyright 2001 2008 Figure 10 Table 1 Wind Global Input Categories Column 1 Column 2 Column 3 Column 4 Schedule and Production Revenues and Operating Project Financing Expense Project Schedule PPA Pricing Phase 1 Project Construction Turbine and Wind Farm l Summaries Development Financing Gross Capacity Other Revenues Phase 2 Engineering Permanent Financing Wind Rating Profile Production Tax Construction and Senior Debt Structure Compounded Efficiency Credits Start up Subordinated Debt Losses and Net Capacity Operating Expenses Soft Costs Structure Economic Factors Developer Royalty Plant Residual Value Sources of Capital Taxes and Investment Lan
94. ime EconExpert WIND Users Manual Copyright 2001 2008 Additional Annual Contributions Once the partners are defined with their initial contributions additional annual contributions can be inserted in Table 1P Partner Returns on lines 46 48 The total amount contributed by each partner is summarized directly below on lines 57 60 Tax Rates Partner specific federal income federal self employment and state income tax rates can be specified in the table located in cells K18 M20 Note that self employment taxes apply to guaranteed payments and will be calculated on ordinary income for general partners that are individuals partnerships or LLCs Corporations do not pay a self employment tax Figure 29 Table 1P Partner Returns Tax Rates Table 1P Partner Returns November 2 2005 Warning Negative Capital Account Warning Negative Inside Basis Developer Tax Investor All Figures in 000 Table 1P Partner Returns Year of Operation In the Figure above please note that the Pane is frozen which is why the Tax section appears next to the Warnings The tax rates are applied on lines 263 406 in the cash flow calculations for each partner Taxable Loss Appetite Additionally partners have their own tax appetite which is called the External Partner Taxable Income in Table 1P If a partner has any ability to utilize taxable losses at the federal or state level simply specify No for
95. in EconExpert WIND e Summaries There are two summary tables a comparison sheet and the status sheet that can access via this Navigate menu option e Current Case Graphs Select to view and edit the various graphs generated by EconExpert WIND for the current case that you have set up in the model e Project Valuation Graphs The graphs associated with the valuation of a project or asset based on the target Internal Rate of Return IRR that a for profit investor would target to achieve Navigation to the results in tabular format is described below e Sensitivity Graphs The graphs that are produced from the many sensitivity options Navigation to the results in tabular format is described below e Tornado Diagrams Select to view the tables and graphs produced by EconExpert WIND that are used to generate the Tornado Diagrams Navigation to the results in tabular format is described below e Results Tables Select from a list of various Results Tables produced by the model The Results Tables are also identified by the Worksheet Tabs shown at the bottom of the Excel screen e Tornado Tables Select to view the tables and graphs produced by EconExpert WIND that are used to generate the Tornado Diagrams Navigation to the results in graphical format is described above e Project Valuation Tables The tables associated with the valuation of a project or asset based on the target Internal Rate of Return IRR that a
96. included in a separate module Four worksheets in EconExpert WIND provide plots showing results of Sensitivity Analyses to study how the IRR of a project will be impacted by incrementing individual inputs to the model The corresponding Sensitivity Cases must be executed from the EconExpert WIND Command Menu in order to reflect results consistent with the current case The Sensitivity Increment for each case is entered in the respective tables that appear for each variable in the Sensitivity Sheet The term used for all of the Sensitivity Analyses is entered at the top of Table 1 The Sensitivity Graphs provide plots of Leveraged and unleveraged IRR versus the variations in the selected parameter It is important to note that the Sensitivity Graphs are not updated automatically Prior to printing the Sensitivity Graphs they must be updated by running the corresponding Sensitivity Analysis for the current case This can be accomplished by selecting the SENSITIVITIES Option on the EconExpert WIND Command Menu All of the Sensitivities can be run as a batch from the EconExpert WIND SENSITIVITIES Menu Graphs Tornado 5 One worksheet in EconExpert WIND provides plots showing all of the respective Tornado Diagrams used to study how the IRR of a project will be impacted by incrementing multiple project inputs The corresponding Tornado Diagrams must be executed from the EconExpert WIND Command Menu in order to reflect results consistent with the current case
97. input sheets to Holding Bins and then to later recall those input sheets Using this feature you can run multiple scenarios in the same spreadsheet The menu also allows you to load the default cases that are documented in the Appendix to this User s Manual You can also reset clear any Inputs Sheet and the Custom Construction Drawdown Schedule Options under Save or Reset Inputs include Display Contents of Active Inputs and Holding Bins This option allows you to view the contents of the various Holding Bins described below Note that the contents of the Global and Annual Input Sheet Holding Bins are also displayed at the top of Table 1 Global Inputs The Holding Bins are used to store copies of the input sheets Whenever you file a copy of an Input Sheet to a Holding Bin you will be prompted to name the sheet you are saving That name will appear in the description cell located at the top of each sheet and will appear in the window that is generated when you select this option An example of the window that EconExpert WIND creates to inform you about the current contents of the Holding Bins is provided below Figure 6 Example Display of Current Contents of Holding Bins EconExpertContents of Active Sheets and Holding Bins xj Active GLOBAL Inputs Sheet Proxy Natural Gas Fired Combined Cycle Holding Bin 1 Coal Fired Boiler Case 1 Holding Bin 2 Coal Fired Boiler Case 2 Active ANNUAL Inputs Sheet Forward Pricing Curves Bas
98. ion wheeling Charges Net Electric Sales Price 2 The user can also assign names to each of the terms in the Project Schedule and can name each customer in this section The user may specify the percentage of yearly production that will be assigned to each price customer or the user can set a generation limit up to that amount The logic is from left to right meaning that the customer in the far left column will be served first and the customer in the far right last If the values entered in the first three columns do not equal 100 or is less than the total MWh generated then the last customer receives whatever generation remains Also the percentage method of assigning generation takes precedence over the MWh method meaning that if a value is entered in the percentage line it will override any entries in the MWh line p 52 EconExpert WIND Users Manual Copyright 2001 2008 EconExpert WIND will calculate a composite yearly energy price for use in the proforma and will calculate yearly net revenues from energy sales during each of the specified periods If desired the user may alternatively provide an annual forward energy prices in Table 1C Other Revenues In addition to revenues from Energy Sales the user may specify other sources of revenues in Table 1 that include e Renewable Energy Credits e Other variable energy sales MWh e Power sales based on capacity MW For each of these payments the use
99. ions of all operating expenses and related escalation factors Escalated annual fixed and variable operating expenses are computed in 1 000 yr based on inputs to Tables 1 and 1C Table 4 is organized as follows The top Section o Partial year adjustments o Escalation rates o Calculations for operating expense items The bottom Section o Accounts Payables and Receivables o Operating Costs o Balance Sheet items including Working Capital contributions Spare Parts Purchases and O amp M Reserve contributions o Working Capital and O amp M Reserve Account balances Itemized operating cost categories provided in Table 4A include Variable Cost O amp M 1 2 Fixed O amp M Cost 1 3 Other O amp M Cost 1 4 Consumption of Spare Parts Land Lease and Developer Lease Payments User Defined Variable O amp M 1 3 Property Taxes and Insurance Table 5 Debt Service Table 5 provides detailed calculations of principal and interest payments on primary and subordinated debt Debt Terms entered in Tables 1 and 1C are reported and resulting annual debt service requirements are calculated and displayed Debt Coverage Ratios are also reported Table 5 is organized as follows o The top section of Table 5 provides the factors used for the Debt Service calculations Custom Debt Treatment Accelerated Principal Payments Interest Only Payments Schedules Breakdown of Interest Rates Interest Payments Principal Repayments Etc o
100. jor Maintenance Frequency defined in Table 1 o Other Capital Improvements Four schedules are provided in Table 1C that allow the user to input additional Capitalized Major Maintenance Expenses using Depreciation lives of 5 10 15 or 20 years e Depreciation for Book Initial Investment and Major Maintenance o The Initial Capital Investment Periodic Major Maintenance Expenses and Other Capital Improvements are depreciated using the Straight Line methods specified in Tables 1 and 1C 19 Sensitivities The Sensitivities Sheet is where Sensitivity Analyses and Tornado Diagrams are generated to study the impacts of variations of key project parameters on the calculated IRR and NPV The Sensitivities Sheet contains a series of tables each of which are used for a respective Sensitivity Analysis or Tornado Diagram The user may specify individual increment amounts to be applied to each of the respective sensitivities The IRR Term used for the Sensitivity Studies is entered in the IRR Summary Section at the top of Table 1 Additional discussion of how to use EconExpert WIND s automated Sensitivity Features is provided later in this manual p 45 EconExpert WIND Users Manual Copyright 2001 2008 Graphs Sheets Each of these sheets contains graphs for either base case results or sensitivities to the inputs 1 2 Graphs Sensitivity 1 4 Note In more recent versions of EconExpert WIND the Sensitivity Graphs Sheets 1 4 are
101. l Project 100 Share 8 020 8 020 As Spent Amount Financed Interest Rate and Amount 8 00 212 212 Loan Commitment Fee 1 00 28 28 One Year Interest Rate Swap Premium Total 8 259 2 8 259 2 Construction Equity Bridge Debt 100 Share As Spent Amount Financed Interest Rate and Amount Deductible Guaranteed Payments The model provides for two types of deductible guaranteed payments Developer Royalty and Guaranteed Return on Capital These payments can occur in multiple years of the project and are hence ongoing and deductible from the partnership taxable income in the year that the payments occur Developer Royalty The Developer Royalty payment is found in the Project Revenue and Operating Expenses section on Table 1 Wind Global Inputs If the user elects to have the Developer Fee assigned to one or more of the partners this assignment occurs in cells AA68 AA70 in the Project Finance section on Table 1 Wind Global Inputs Figure 36 Table 1 Wind Global Inputs Developer Royalty Developer Royalty Developer Royalty of Sales Fixed Payment to Developer Total Developer Royalty 7 2 ry Starting Year I Ending Year Percent of Sales Above Sales 000 Total 000 Base Yr Real Escalation z Annual 000 ry Land Lease Royalty Starting Year Ending Year Percent of Sales BMV Total 000 Ba
102. l appear Figure 6 EconExpert CP Copyright Notice Screen EconExpert Copyright Notice Welcome Your User Name of Your Company Name The current Date Time is 11 2 01 9 21 19 AM Your License is valid until 12 2 01 Copyright Notice EconExpert is protected by copyright law and international treaties Unauthorized use modification reverse engineering reproduction or distribution of EconE xpert or any portion of it may result in severe civil and criminal penalties and will be prosecuted to the maximum extent possible under the law Please read this Copyright Notice carefully Note that this screen will also advise you of the current date and on what date your license to use the software will expire Select OK again and you will see a notice about providing copies of EconExpert CP to others Also note that the Recalculation Feature on Excel will be set to Automatic This is the recommended setting for EconExpert CP though if you prefer you can later reset the recalculation setting to Manual using the Tools Options Recalculation option on the Excel Command Menu If you set recalculation to Manual it will be necessary for you to press F9 Calculate to re enable EconExpert CP following saving the model as discussed below Select OK and EconExpert CP will be initialized In the upper left hand corner of the spreadsheet the message will appear EconExpert CP is Initializing Please Wait The Initialization Procedure will occur every
103. lar central power station investments including highly functional tax benefit monetization analysis For more information on CEI and a list of many of our software and services clients please visit hitp www CEInsight com CEI s financial analysis suite includes the following Click on links in blue to link to Flash Demos your browser must already be opened 1 EconExpert EP for wholesale Electric Power including solar thermal biofuel landfill gas fossil and thermal based electric power projects 2 EconExpert WIND for wind farm projects that sell wholesale energy 3 EconExpert PV for wholesale large solar Photovoltaic projects 4 EconExpert DG for Distributed Generation combined heat and power tariff analysis and energy savings applications that are behind the meter 5 EconExpert CP for Commodity Products including ethanol biodiesel synthetic natural gas refining and coal gasification liquefaction applications etc 6 EconExpert IAT the Interval Analysis Tools for WIND PV and CHP perform time of production analysis of energy sales as a function of interval energy prices demand load profiles hourly ambient weather conditions and facility operating characteristics 7 EconExpert Electronic Databook for integrated analysis of multiple scenarios or applying multiple EconExpert models With this tool users can easily perform tasks like portfolio analysis comparisons of complex and distinct scenarios contracting
104. le that is not automatically distributed If the partnership agreement contains language about preferred returns then the user can put in formulas in these rows to reflect the preferred returns 7 Guaranteed Payments The language in the partnership agreement governs the flow of income and expense items through the partners capital accounts as well as items such as guaranteed payments that are not capital account items Guaranteed payments can either be a capitalized item or deductible for the partnership depending on the nature of the payment but are always a taxable event to the receiving partner p 75 EconExpert WIND Users Manual Copyright 2001 2008 Capitalized Guaranteed Payments The model provides for two types of capitalized guaranteed payments a Developer Fee and a Loan Guarantee Fee both of which are found on Table 1 Wind Global Inputs and both of which can be assigned to a partner or to an external party In addition both of these payments are one time capitalizable fees that represent a full payment to the partner is the first year of the project but are expensed over time to the partnership as defined in the tax depreciation schedules on Table 1 Wind Global Inputs Developer Fee The Developer Fee is part of the Project Development costs located in the Investment Costs section of Table 1 Wind Global Inputs If the user elects to have the Developer Fee assigned to one or more of the partners this assignment occur
105. led in the analysis Production Tax Credits are handled in one of the following sections Owner s Stock Performance Calculations EconExpert WIND includes analysis of predicted impacts of net income from the project on the price of the Owner s stock These calculations are performed based on an assumed Table 1 Inputs of baseline without the project stock price baseline projected corporate earnings profile and baseline number of shares outstanding If the checkbox for Issue Shares for Project Equity is selected and you have entered projections for the pricing and number of shares of Owner s Stock that are outstanding the model will issue additional shares to cover the Owner s Equity in the project The resulting current price earnings ratio is applied to estimate future stock performance based on accretion dilution of shares associated with new project equity and the resulting net income additions from the project to the Owner s account See the section above for information on how to issue shares in place of project equity If desired the user may alternatively provide an annual baseline data on the Owner s Stock in Table 1C 2 Project Revenue and Operating Expenses PPA Pricing Terms 1 3 The EconExpert WIND model is set up to handle 3 different time periods terms within the specific project life and then up to 4 different pricing structures within each of those terms In other words the user can specify four different custome
106. ls You can also Compare and Quantify Differences between an active input sheet and a holding bin in the same model by saving the current model as two different file names with the desired cases to be compared each respectively activated in one of the files A new worksheet is created with copies of all of the tables in the model Every cell in the model inputs or p 32 EconExpert WIND Users Manual Copyright 2001 2008 calculations that has changed is identified by highlighting with an ORANGE BACKGROUND and the amount of the difference between the two cases either positive or negative is quantified PLEASE NOTE THAT THIS IS A MEMORY RAM INTENSIVE PROCEDURE IT IS RECOMMENDED THAT YOU CLOSE OTHER APPLICATIONS AND SPREADSHEETS BEFORE IT IS INITIATED The procedure will involve four spreadsheets e The TARGET EconExpert WIND is the model that you want to identify the changes in The TARGET model MUST be opened FIRST e The REFERENCE EconExpert WIND model is the model that you want compare changes against o The REFERENCE model MUST be opened SECOND o Record the filename of the REFERENCE model as you will need to enter this information e The COMPARISION file which you will name will highlight the fields that have been changed e A Temporary File that EconExpert will create and then delete Note that the TARGET and REFERENCE models MUST each have at least TWO available windows AND the TARGET and REFERENCE m
107. mand Menu will have limited functionality the NAVIGATE PRINT and HELP options will be Fully Functional No special license codes will be required to open and view the Values Only version from any PC that has Microsoft Excel Versions 2002 or later Because the Sensitivity Cases and Tornado diagrams included in a Values Only copy of the model will only be accurate if they are updated to the current case you will be offered the option to run all of the model s Sensitivity Cases prior to converting the model to Values Only This may take several minutes to execute depending on the speed of your processor The Tornado Diagrams must be individually generated If you elect not to update the Sensitivities the Sensitivity Tables Tornado Tables Sensitivity Graphs and Tornado Graphs can be deleted from the Values Only Prior to executing a Values Only conversion you will be prompted with a number of Warnings advising you to save the original spreadsheet before making the conversion and to save the Values Only file to a new filename to avoid overwriting the Fully Functional model Note that saved Fully Functional electronic copies of EconExpert WIND that are not converted to Values Only can be shared with others however those Fully Functional Electronic copies p 29 EconExpert WIND Users Manual Copyright 2001 2008 will not be enabled on an unlicensed computer unless the user
108. mat Underline Bold and Italics Font Color Borders Change Column Width OoO000 0 Shading You can toggle the format of Inputs Cells in Tables 1 and 1C between Shaded and Bold Italics The default status of unprotected Input Cells in Tables 1 and 1C is Shaded allowing you to easily differentiate between protected formula cells and unprotected input cells in the model Since shaded entries may be difficult to read if they are copied or faxed you can use this option to select the preferred format Restore Original Formats to Input Tables No matter what changes you make to the Input Tables you can always select this option to restore the model to its initial formats Zoom Settings EconExpert WIND is equipped with a Command Menu module that allows you to optimize the appearance of the model on your computer monitor based on the Windows Display Settings that you have selected and the type of monitor that you have The basic Zoom formats in EconExpert WIND are 40 50 75 or 100 though when selecting each of these settings some worksheets may be formatted to a slightly different Zoom Setting for optimal appearance Note that for the recommended Windows Display setting of 1024 x 767 Pixels 50 is the recommended Zoom format EconExpert WIND If you have a lower resolution monitor and use a setting of 800 x 600 Pixels the recommended Zoom Setting in EconExpert WIND is 40 You can check your Windows Display Settings in Windows by selectin
109. nExpert WIND has been transformed into a tool that can be used efficiently and effectively by project developers utilities equipment suppliers consultants banks and others in the industry to evaluate study make informed decisions on structure contracts and track the economics of wind power generation investments The key to EconExpert WIND and its sister models is the architecture which allows you to study any project through the models input sheets specifying the conditions of ownership procurement construction financing operation and electricity sales taxes and deal structure for virtually any project and then to quickly study how the economic viability of that project might be impacted by changes in market conditions Built in menus wizards automated functions sensitivities tornado diagrams graphics and on line help features will further assist you in evaluating opportunities and producing reports that clearly and accurately support the conclusions you reach This User s Manual has been developed to assist you in getting started using EconExpert WIND and to provide supporting documentation in the event that questions might arise as you use it The User s Manual is complemented by On Line Help and an On Line Tutorial that can be accessed directly from the EconExpert WIND model s Command menu Competitive Energy Insight would greatly appreciate your feCPack and comments on EconExpert WIND and our other software products and
110. nder Cash from Operations the differing depreciation schedules appear again The Cash from Investing line items are identical on both financials unlike Cash from Financing which has several varying items The partnership financials list the contributions and distributions while the project financials only list the changes in equity contributions Balance Sheet There are several differences in the project and partnership balance sheets On the partnership balance sheet under Assets the cash amount will vary because cash is being pulled out of the partnership and distributed to the partners Next the Property Plant amp Equipment will differ because of the different depreciation amounts Under Liabilities Deferred Taxes appear on the project financials but are not relevant to partnership financials Instead of Equity on the project financials there are Partners Capital Accounts on the partnership financials Likewise the balances contributions and distributions to and from the capital accounts are detailed on the partnership financials where the retained earnings exist on the project financials Figure 30 Comparison of Table 11 and Table 11P Financial Statement Table 11 Project Table 11P Partnership Variation Financials Financials Income Statement usually straight line usually MACRS Income Taxes Tax Credits Used to calculate Net Not shown or used to Tax Deductions Capital Gain Income calculate Net Income Taxe
111. ng Partners Initial Capital Contribution Up to three partners can be defined on Table 1 Wind Global Inputs with their initial capital contributions also defined as a percentage of the total equity investment Figure 28 Table 1 Wind Global Inputs Defining Partners Project Finance Equity and Project Ownership Debt Equity Entry Debt 000 Equity 000 Total 000 Start of Construction 30 0 70 0 8100 18 900 Start of Operations 50 0 50 0 13 500 13 500 Debt Coverage Ratios DSCR Include PTC in DSCR Calc Actual Min Project Stane Developer Fees Equity Participant Dperations Recipient Developer 100 0 Tax Investor For the purposes of a partnership the percentage specified for Operations is the initial percentage invested in the partnership If a partner is given interest in the partnership but does not contribute any capital enter the partner name in the space available but leave the initial contribution blank or enter zero The next version of the model will allow for investors to bring property to the partnership as is done in many circumstances Property contributions are not enabled in this version as the US tax Codes is written differently for partners who contribute property instead of cash For simplicity sake we focused only on cash contributions to the partnership and assume that each partner enters the partnership at the same t
112. nnual Revenue from Table 1C Annual Inputs Steam Sales Other By Product Sales Other Energy Sales Interest Income from Maintenance and Debt Reserves Other sources of revenue associated with liquidation of reserves and disposition of the land and asset at the end of the debt term or the end of the project life 10 Table 7 Cash Flow Leveraged Table 7 provides calculations of the net cash flow before tax income taxes and net cash flow after tax Results provided in this table are calculated on a Leveraged basis i e including construction phase and operating phase debt The resulting Cash Flow is reported during the construction phase and through the operating phase Calculations of revenues minus expenses Depreciation and taxes are provided to be used in the calculations of Net Present Value NPV and Internal Rate of Return IRR provided in Table 8 p 42 EconExpert WIND Users Manual Copyright 2001 2008 Results in Table 7 are expressed based on the Owner s percentage interest in the project 11 Table 7A Cash Flow Unleveraged Table 7A provides calculations of the net cash flow before tax income taxes and net cash flow after tax Results provided in this table are calculated on an unleveraged basis i e Assuming the project is executed with 100 equity and with no debt during either the construction or operations phases The resulting cash flow is reported during the construction phase and through the operating phase Calcul
113. nse located at the end of the License Agreement Title The Title Sheet includes the EconExpert WIND and CEI Logos and notification of the product copyright Contact information for CEI is also provided The Macro Button on the top of this sheet will take the user to the Global Inputs sheet Status The Status Sheet provides Alerts and Warnings to the User that are relevant to the current configuration of the model Warnings include detection of potentially conflicting inputs e g a specified loan term that is longer than the project life special circumstances and notification that Annual Inputs to Table 1C will produce results that will override or will be added to results otherwise generated from corresponding inputs to Table 1 It is highly recommended that the user check this sheet prior to reporting final results to Help insure that the current case has been modeled correctly p 37 EconExpert WIND Users Manual Copyright 2001 2008 Summary Sheets These sheets provide a couple different summary views of the project 4 5 Project Summary This sheet provides a 1 page summary of key project parameters The figure below provides a screen shot of the Project Summary Sheet IRR Summary NPV Summary Project Operating Parameters Project Schedule Investment Costs Energy Pricing Sources and Uses of Operating Funds in MWH The user is free to modify and customize this summary and it can be extracted to any other a
114. nst e The Name of the new COMPARISON file you want to create that will highlight the changes between the cases This COMPARISON file will be saved in the same directory as the TARGET file that you are identifying changes in Other important requirements for running this macro include e The name you entered for the REFERENCE Data file must be precisely correct e BOTH the TARGET AND REFERENCE models must be ENABLED e There must NOT be a file with the same name as the COMPARISON file that is currently opened p 31 EconExpert WIND Users Manual Copyright 2001 2008 e Both the TARGET AND REFERENCE files have at least two available windows If they do not to add a window from the Excel Command Menu select Window New Window from the Excel menu to add a window to the file where it is required The Figure on the next page illustrates how changes in the Global Inputs Sheet are highlighted The Current Target case is illustrated in a new worksheet with each of the input cells that have changed highlighted in ORANGE The ORANGE shaded cells indicate where input changes have occurred in the TARGET file relative to the REFERENCE file Figure 7 Comparing Data Files Highlighting of Inputs that Changed in a TARGET File H File Edit View Insert Format Tools Data Window Help Acrobat NAVIGATE PRINT SENSITIVITIES UTILITIES EconExpert HELP ENABLE MODEL 8 xX E G D F G H 1 Ja Click Here to REFRESH Guesses Used for IRR Iteration Ec
115. nt Costs wlololelololelelela 605 37 0 of above 1 5 0 t Costs with Contingency EJ 635 38 8 1000 612 e e eje 1 635 p 55 EconExpert WIND Users Manual Copyright 2001 2008 One category title the Developer Fee cannot be modified This is because this specific item feeds into the partnership calculations and is set up so that the user can allocate this payment to one of the partners This allocation is handled on Table 1 under the Project Finance section and the result appears on Table 1P The user may also add contingency as a percentage of the Phase 1 costs and as a fixed amount in 000 the two entries will be summed if both are entered Likewise the user can enter a sales tax figure as an amount and as a of Phase 1 Costs the two entries will be summed if both are entered Phase 2 Engineering Construction and Start up Costs These are costs that occur after financial closing including interest during construction which is calculated using the Construction Phase Drawdown Schedule in Table 3 Land and Soft Costs e g Start up Mobilization Spares Working Capital Up Front Financing Fees Debt Reserves and Interest During Construction which are concentrated at the start or end of the construction phase are also entered here The first section under Phase 2 is the Land costs Most wind farms projects lease the land but in the case that a project pur
116. nted copies may be shared with third parties who do not have a current and valid license to the Model All such printed copies shall include the EconExpert trademark and copyright notices as provided by CEI in the Model and on all reports generated using the Model 10 Limitation of Liability In no event shall Competitive Energy Insight Inc its owners employees affiliates representatives or assigns be liable for indirect incidental consequential special or punitive damages or for loss of profits or sales in connection with the use of the Model In addition CEI s total aggregate liability to Licensee under this Agreement shall not exceed the amount of the current annual subscription fee for one user that was most recently paid by Licensee This limitation of liability shall apply to all claims made by Licensee or its affiliates without regard to which other provisions of this Agreement have been breached or have proved to be ineffective 11 Copyright Notice The Model and accompanying documentation are protected by copyright law and international treaties The Model and accompanying documentation include copyright notices prominently displayed in the Model on reports generated and produced by the Model and in the User s Manual Use of the Model outside of the License term is expressly prohibited For information regarding the Model please contact Competitive Energy Insight Inc 12025 Blue Diamond Court San Diego CA 92131 Telephon
117. nts also appear with each input in Table 1 PLEASE NOTE Cost entries are inputs to Table 1C in CURRENT and represent the actual amount spent in a given year This means that the cost and revenue entries to Table 1C will not be impacted by escalation rates entered elsewhere in the model and fixed values will not be impacted by partial year operation The values will be used by the model as entered Table 1D Data Conversion The Data Conversion Sheet allows the user automatically to convert forward energy data provided in a format that is different from EconExpert WIND to the format of four Energy and two Fuel Pricing periods used in the EconExpert WIND model The current version of the model is equipped with the capability to automatically reference aggregated forward data entered into 1 24 block periods year to the Annual Inputs sheet p 39 EconExpert WIND Users Manual Copyright 2001 2008 5 Table 1P Partner Returns Note that in more recent versions of EconExpert WIND partnership analysis is performed in a separate module Table 1P Partner Returns is architected to model various schemes that might be written into a partnership agreement allowing up to three equity partners with individual tax rates capital accounts distributive shares and distributions Table 1P is linked with Table 11P which details the partnership financial statements and calculates the cash available for distribution in every year of the proje
118. nu Project Life 20 Years Year of Analgsis 20 Tax Ra November 2 2005 Total Initial Investment Warning Negative Capital Account of Initial Partnership A 0 0 Develop Warning Negative Inside Basis Post Tax NPV 10 0 Tax Inve Post Tax IRR 0 A A 3 Other Guaran amp 1 Distribute All Cash amp Taxable Losses C 2 Distribute Enough to Pay Taxes a E Profit Share Cap Account cq Depreciation Q 3 Maintain Cap Account 3 Capital Share Basis All Figures in 000 Q 4 Maintain Basis Gs None Table 1P Partner Returns Year of Operation 1 2 3 4 5 6 Year 2005 2006 2007 2008 2009 2010 201 Contributions to Equity Additional Equity Contributions Developer Tax Investor Other Total Equity Contributions 000s Developer 4 050 4 050 4 050 4 050 4 050 4 050 Tax Investor 6 750 6 750 6 750 6 750 6 750 6 750 Other 2 700 2 700 2 700 2 700 2 700 2 700 Sum of Partners Equity Contributions 13 500 13 500 13 500 13 500 1350 13 500 1 Partnership Overview and Disclaimer Partnerships are pass through entities and therefore all items of partnership income expense and depreciation are reflected on each partner or investor s separate capital account This is in contrast to the tax treatment of a regular corporation where all items of income expense and tax liability remain at the corporate level Because of the complexities that arise when multiple parties form a partnership or limited liability
119. nu at the top of the screen you are now ready to model your wind project To begin select the Click Here button use the Navigate menu item or page through the tabs at the bottom of the spreadsheet Note that after saving the model the Div 0 notation will appear throughout the model To enable EconExpert WIND select ENABLE MODEL Enable EconExpert WIND See IX for more information Congratulations You are now ready to use EconExpert WIND Final note If the Display Setting in Windows is set to other than the recommended setting of 1024 x 768 pixels a notice will appear during the installation giving you the option to reset the display settings in Windows or to modify the Zoom settings in EconExpert WIND from the default The Zoom setting can also be automatically reset by selecting UTILITIES Table Viewing Format Set Table Zoom Setting on the EconExpert WIND Command Menu p 19 EconExpert WIND Users Manual Copyright 2001 2008 V The EconExpert WIND On Line Tutorial EconExpert WIND includes an On Line Tutorial that will guide you through the important features of the model After accepting the terms of the EconExpert WIND License Agreement you will be asked if you would like to view the Tutorial The Tutorial may also be viewed at any time by selecting the Tutorial Option from the EconExpert Help Menu It is highly recommended that new users review the tutorial and the examples in the Appendix to this User s Manual The
120. o rt LP Menu Select Checkbox to Use XIRR 4 XIRR Requires lysis ToolPak Before Tax 5 00 Ey IRR Selected After Tax 5 00 3 z4 Table 4 Section 1A GLOBAL INPUTS Gio ing Bin 1 is Not Labled 2s Shaded Areas Indicate Inputs Name of File ATTE 1 Global Inputs Global Inputs Holding Mg 2 is Not Labled z Description _ Example Frame F Combined Cycle Case Active Annual Inputs She is _ Not Labeled NPV TER IRR TERM FOR SENSITIVITY STYPIES SENSIT Ho Annual Inputs Used End of Year AND TORNADO DIAGRAM HPY t by EOY 2003 1000 STUL AHD TOI cu DIAGR A HPY and IRR Summary Years 10 15 20 Di B 10 15 20 Ey everaged 7 40 30 18 88 12 00 15 992 18 973 30 leveraged 451 51 11 85 10 00 77 549 9 953 z Profofna NOTES I This Workbook sl which inputs changedin Example Frare F Combined Cycle Case J comparedto Example Frame 3 Combined Cycle Ce Changes Highlighted on an Orange Ba ound ba 33 ig 34 E 35 Plant Capacity Heat Rate amp Fuel Wi Energy and Fuel Pricing Profiles eriod 1A Period 1B 3 Rated Net Plant Capacity MVV id Period 14 Period 1B 27 Net Heat Rate Electricity Oni 7 Btufkwh HHV Basis of Annual MWH Produced a 11 0 R 3s g Real a Re 3 Fuel Selection Enter 1 for Coal Coke Wood or Oil Enter 2 for Gas Period 1AB 2AB Energy Prices SMAH Escalation SAH Escalati 40 GAS
121. obligation relative to the performance of or defects in Microsoft Excel EXCEPT FOR THE WARRANTIES AND REPRESENTATIONS EXPRESSLY SET FORTH HEREIN COMPETITIVE ENERGY INSIGHT INC DISCLAIMS ANY AND ALL WARRANTIES AND REPRESENTATIONS EXPRESS OR IMPLIED WITH RESPECT TO THE MODEL AND ITS CONFORMITY TO ANY SPECIFICATIONS OR DESCRIPTION INCLUDING WITHOUT LIMITATION ANY IMPLIED WARRANTIES OF MERCHANTABILITY FITNESS FOR A PARTICULAR PURPOSE OR THAT THE MODEL OR THE RESULTS THEREFROM SHALL BE ERROR FREE Removal of the EconExpert WIND Menu Under rare circumstances the EconExpert WIND Command Menu may not be fully removed when the model is closed If this occurs reopen the model without any other spreadsheets opened Then close EconExpert WIND and any extraneous menus will be deleted If you are using Excel 2007 the EconExpert Menu will appear in the Add Ins Ribbon on the Vista Ribbon bar p 4 EconExpert WIND Users Manual Copyright 2001 2008 Table of Contents IMPORTANT NOTICES TO USERS OF ECONEXPERT WIND 3 LIST OF FIGURES 7 D INTRODUCTION TO ECONEXPERT WIND AND CEI 9 I HOW TO OBTAIN OR EXTEND A SUBSCRIPTION TO ECONEXPERT WIND 10 TD SYSTEM REQUIREMENTS 13 IV GETTING STARTED INSTALLING ECONEXPERT WIND 14 V THE ECONEXPERT WIND ON LINE TUTORIAL 20 VI THE ECONEXPERT WIND COMMAND MENU 21 A NAVIGATE 21 B PRINT 22 C SENSITIVITIES 24 D UTILITIES 25 1 SHOW POP UP PROJECT METRICS 25 2 LOAD GLOBAL INPUTS WIZARD 26 3
122. odel showing upside and downside variations relative to the current case If Inputs to Table 1 or Table 1C are changed the current sensitivity cases may need to be updated to reflect the new case e The formatting of Charts or Graphs in Excel may require adjustments as the values that are charted are changed You may also want to customize a Chart To modify or customize a Chart created by EconExpert WIND first Disable Range Protection using the UTILITIES Menu Then click on the appropriate Chart to view edit the Excel Chart Options After finishing it is recommended that you re enable the Range Protection For Help on formatting Excel Charts use Microsoft Excel Help and search for CHARTS p 88 EconExpert WIND Users Manual Copyright 2001 2008 C Tornado Diagrams The SENSITIVITIES Menu also provides you with options to generate Tornado Diagrams While the individual Sensitivities on this menu allow you to selectively study effects of changes individual inputs Tornado Diagrams illustrate how the NPV or IRR of the current case will be impacted by individually incrementing multiple inputs Each of the respective Tornado Diagrams is generated by varying the inputs for the life of the project based on inputs to either Table 1 or Table 1C The Sensitivity Sheet is used to generate the tables used for the Tornado Diagrams The Increments used for the Tornado Diagrams are entered in the Data Input Sheet that is opened when you select
123. odels MUST have different names AND BOTH MUST BE ENABLED A copy of each of the respective Input and Results Sheets from the TARGET model will be created in the COMPARISON file with a name that you designate All changes will be quantified and HIGHLIGHTED on a BRIGHT ORANGE Background Once initiated you will not be able to terminate this macro until it is completed You will be asked for two items when this procedure is initiated e The Name of the REFERENCE EconExpert WIND Data File The REFERENCE file is the one that you want to compare the TARGET file against e The Name of the new COMPARISON file you want to create that will quantify and highlight the DIFFERENCES between the cases This COMPARISON file will be saved in the same directory as the TARGET File that you are identifying changes in Other important requirements for running this macro include e The name you entered for the REFERENCE Data file must be precisely correct e BOTH the TARGET AND REFERENCE models must be ENABLED e There must NOT be a file with the same name as the COMPARISON file that is currently opened e Both the TARGET AND REFERENCE files have at least two available windows If they do not to add a window from the Excel Command Menu select Window New Window from the Excel menu to add a window to the file where it is required p 33 EconExpert WIND Users Manual Copyright 2001 2008 The Figure on the next page illustrates how change
124. om interest outside this wind power project which would allow the partner to utilize any taxable loss or tax credit in the year in which it is earned p 81 EconExpert WIND Users Manual Copyright 2001 2008 E Table 1Q Quick Project Analysis This table is used to quickly analyze a wind power project by only focusing on set of economic inputs to model a project Simply entering values on this table is insufficient to perform a quick analysis The user must go to the Utilities menu and select Set up Model in Quick Project Analysis Format Once you select this option Table 1Q is linked into the rest of the model You can run sensitivities and also modify the other inputs sheets to enhance your analysis Figure 38 Table 1Q Quick Project Analysis Quick Project Analysis Set up model in Project Description Wanse2Ub 00 uick Analysis Format ind Model Simple Inputs Leveraged Results for 20 Year Project Project Finance 000 November 1 2005 NPY IRR Equity 0 DIV 0 Pre Tax 10 651 0 Debt 0 DIV 0 All Figures in 000 Post Tax 585 113 Project Schedule Revenues and Expenses SAMA Financial Closing Date 02 0106 Net Energy Price 36 30 a __ s Construction Term mos 0 48 8 Real Escalation Rate O5 Addie to GNP rate Commercial Operation Start Date 10 01 06 Project Life Years 32 Max 20 ih Duration Retirement Date 10 01 26 Renewable Energy Credits 1 30 40 Gross Wind Farm Capacit
125. on escrowed funds including Debt Reserves and O amp M Reserves If desired the user may alternatively provide an annual schedule of GNP Escalation Rates in Table 1C p 50 EconExpert WIND Users Manual Copyright 2001 2008 Figure 12 Table 1 Wind Global Inputs Taxes and Investment Tax Credits Taxes and Investment Tax Credits a Tax redits This section includes income tax and investment tax credits ne ae E ee State Inv Tax Credit 1 This section has an input for State ene ai Investment Tax Credits ITC as there is not a federal Investment Tax Credit at this time fepe T Retes ae for wind power To enter an ITC first enter ste 8 84 the Credit Rate as a percent then enter the G percent of capital costs that are applicable to f7 xbie Loss Carver i C the ITC Lastly the ITC might reduce the Jste notseLecteD federal PTC value Click the box in under Reduce PTC To give the PTC a haircut Income Tax rates for Federal and State and entered in the next entry cells below Last indicate if you want to have Carry Forward Tax Losses If this checkbox is selected tax loss write offs will be carried forward and applied during future years when positive pre tax earnings occur If not selected tax losses will be credited in the year that they occur resulting in a tax credit that would be applied to other sources of income not mode
126. only your tax advisor can determine whether those allocations are allowable under US tax laws At the top of Table 1P in cells C13 C14 you can elect to set the sheet in one of two modes e Taxable Losses This mode allows the user to allocate Taxable Income and Taxable Losses separately with depreciation included in the Taxable Losses Allocation e Depreciation This mode allows the user to allocate Taxable Income Losses separately from Depreciation Taxable Income Basis Figure 31 Table 1P Partner Returns T33 Dy Us Table 1P Partner Returns Description REFRESH Menu Project Life 20 Year of Analysis Other 2 700 20 0 1 10 0 November 7 2005 Total Initial Investment 6750 of Initial Partnership 50 0 Post Tax NPY 10 0 3 Post TaJ BE 10 0 Warning Negative Capital Account Warning Negative Inside Basis amp 1 Capital Accounts 2 Profit Share 3 Capital Share Cap Account Basis All Figures in 000 Whichever mode is selected the custom allocations for each year of the project are set in rows 94 106 At the beginning of each row the percent of initial capital contributed p 72 EconExpert WIND Users Manual Copyright 2001 2008 is shown as a baseline If no numbers are entered in these rows the default values are these percentages The Taxable Income or Taxable Income Loss values entered in lines 96 98 are also used as the Profit Share
127. onomic effect If the partnership agreement does not provide for an allocation or an allocation does not have substantial economic effect the partner s distributive share of the partnership items is generally determined by the partner s interest in the partnership Substantial Economic Effect An allocation has substantial economic effect if both of the following tests are met e There is a reasonable possibility that the allocation will substantially affect the dollar amount of the partners shares of partnership income or loss independently of tax consequences e The partner to whom the allocation is made actually receives the economic benefit or bears the economic burden corresponding to that allocation p 80 EconExpert WIND Users Manual Copyright 2001 2008 Partner s Interest in Partnership e Ifa partner s distributive share of a partnership item cannot be determined under the partnership agreement it is determined by his or her interest in the partnership The partner s interest is determined by taking into account all the following items e The partners relative contributions to the partnership e The interests of all partners in economic profits and losses if different from interests in taxable income or loss and in cash flow and other nonliquidating distributions e The rights of the partners to distributions of capital upon liquidation External Partner Taxable Income CEI Definition e The partner s taxable income base fr
128. ore recent versions of EconExpert WIND single case sensitivity graphs are included in a separate add in module EconExpert WIND is equipped with the capability to run automated sensitivity analyses on a variety of important project parameters Parameters for which Sensitivity Analyses can be performed include o Capital Investment O Electric Energy Sales 8760 Hour Average includes all periods listed below PPA 1 PPA 2 PPA 3 Financing Equity Percentage During Operations Interest Rate During Construction Interest Rate on Senior Debt Interest Rate on Subordinated Debt Term of Senior Debt Term of Subordinated Debt Fixed O amp M Expenses All Fixed O amp M Costs including those listed below User Defined Category 1 User Defined Category 2 Additional Fixed O amp M Wind Farm Operations and Operating Cost Sensitivities Wind Rating Profile Energy Production and Wind Farm Capacity Factor Fixed Operations and Maintenance Expenses Land Lease and Developer Royalty Payments User Defined Additional Annual Expenses in Table 1C Variable Operations and Maintenance Expenses Production Tax Credits Annual Amount of Federal PTCs Escalation Rate of Federal PTCs Revenue Green Tags Renewable Energy Credits Additional Annual Revenues in Table 1 and Table 1C p 86 EconExpert WIND Users Manual Copyright 2001 2008 The SENSITIVITIES Menu provides you with the ability to run these sensitivity cases either individ
129. our installation of EconExpert WIND experiences problems this feature may also be used to revalidate a current license If you forward copies of EconExpert WIND to others who do not have an active license CEI can temporarily enable the model as Fully Functional using these License Codes If others attempt to open a model you have sent them and they are not authorized they will be advised how to contact CEI to obtain the needed codes Without these codes unauthorized copies of the model will not function properly Once the authorized codes are entered even if the model was provided to a potential user by someone other than CEI all copies of EconExpert WIND will function on the authorized computer during the authorized license period From the EconExpert WIND Command Menu licensed users can also create a Values Only copy of the model that can be shared with others and viewed on any PC including those that are not licensed to use the Fully Functional model In a Values Only version of the model much of the Command Menu s functionality will be preserved allowing others to easily view and print reports and charts for the specific case study that has be saved A Values Only copy will not allow users to change inputs or to evaluate any new cases If you purchase a subscription to the EconExpert WIND model any copies of the model that you save as Recoverable Values Only versions can be restored to fully functional ve
130. pplication including another Excel Workbook or MS Word To unprotect and modify the Summary sheet select UTILITIES Range Protection of Graphs and Project Summary Sheets You may then modify the sheet change entries add or delete rows etc tying formulas in the table to other cells throughout the model As long as you do not make changes outside of the boxed section of the sheet the resulting summary that you create can be reported using the PRINT option on the Command Menu Table 2 Summary Table 2 provides consolidated summaries of the results generated in Tables 3 11 Table 2 is organized as follows o Top Section Basic Summary Unleveraged and Leveraged Annual NPVs and IRRs Return on Equity Debt Coverage Ratios o Bottom Section Expanded Summary Construction Expenditures Revenues Expenses Debt Service Taxes Leveraged Cash Flow Operating Cash Flow Breakdown Unleveraged Cash Flow p 38 EconExpert WIND Users Manual Copyright 2001 2008 Input Sheets These five 5 sheets contain all the possible inputs for this model A more detailed description of the inputting process is discusses later in this manual 1 2 3 4 Table 1Q Quick Project Analysis This table is used to quickly analyze a wind power project by only focusing on set of economic inputs to model a project Simply entering values on this table is insufficient to perform a quick analysis The user must go to the Utiliti
131. ption to print the first 36 months of the Construction Period results or the first 30 years of the Operating Period results to legal sized paper Note that Excel must be pointed to a printer with legal paper in the selected paper tray Tables Tabloid Paper 11 x 17 in Select this option to print the first 36 months of the Construction Period results or the first 30 years of the Operating Period results to 11 x 17 in paper This is the largest format printout Note that Excel must be pointed to a printer with tabloid paper in the selected paper tray Tables A4 Paper Select this option to print the first 24 months of the Construction Period results or the first 20 years of the Operating Period results to European Style A4 Paper Current Case Graphs Select this button to print the various graphs provided under the Worksheet Tabs Graphs 4 5 and 6 These graphs show results for the current case Results will be printed to Letter Sized paper Project Valuation Graphs Print the selected graphs that are included on the Sensitivities Sheet Sensitivity Graphs Print the selected graphs that are included on the Sensitivities Sheet Note that all graphs can be printed by unprotecting the graphs sheet selecting the graph and selecting the print icon on the Excel menu bar Tornado Tables Print the Tables that are generated each time you create a Tornado Diagram from the SENSITIVITIES Menu Tornado Diagrams Print the Char
132. r specifies the starting and ending years the base year rate and Real Escalation for each payment Production Tax Credits Entries for the Federal Production Tax Credits PTC are set to follow the language set in the energy legislation The user enters the 2008 PTC value set at the beginning of 2008 the escalation rate and then the duration of the credit Note that the escalation rate is not the real escalation but the estimated nominal escalation ignorant of the GDP deflator This entry logic is unique to the model Fixed and Other O amp M Costs Fixed Operations and Maintenance O amp M costs are not dependent on annual net generation Fixed O amp M Inputs to Table 1 can be entered in either of two sections Fixed O amp M and Other O amp M Fixed O amp M is structured to handle a Warranty Post Warranty and another period of costs The user can name these categories and the names will be carried into the various tables and charts throughout the model Each category has a starting and ending year and in most cases the starting year for the second and third categories should follow the ending years for the previous categories Other O amp M offers four independent categories for fixed O amp M costs set up so that the user can name each category The annual fixed O amp M values can be entered in 1000 year Annual for a full calendar year of operations or on a per turbine basis The two entries are additive meaning if you enter val
133. re in EconExpert WIND that is intended to prevent use of the model by unauthorized persons During your license period if you always select the Enable Macros option when you open EconExpert WIND you will always be able to clear this Div 0 result by selecting ENABLE MODEL from the EconExpert WIND Command Menu If Macros are NOT enabled you will not be able to remove the Div 0 result After saving the model to eliminate the Div 0s and re enable the model select ENABLE MODEL Enable Filename from the Command Menu If multiple copies of EconExpert WIND are opened the menu will apply to the most recent version for which it was refreshed If you have multiple instances of the model opened the menu can be synchronized with the active version by selecting the Refresh Menu button that appears at the top of each sheet p 84 EconExpert WIND Users Manual Copyright 2001 2008 B Creating a Values Only Copy of the EconExpert WIND model From the UTILITIES MENU or EconExpert Help Menu you can create a Values Only copy of the current EconExpert WIND model to archive or for sharing with others who may not be licensed to use EconExpert WIND The Values Only copy that this module creates will work on any computer but will have limited functionality No special license codes will be required to view the Values Only copy on any PC but the Values Only model will not be capable of performing any new calculations Since
134. rs in each pricing term In the simplest case the user can have one price for all power for the entire life of the project In the most complicated case the user can set up to 12 different prices over the life of the project divided into 3 terms The picture below attempts to visually explain this concept p 51 EconExpert WIND Users Manual Copyright 2001 2008 Figure 13 Table 1 Wind Global Inputs PPA Pricing Structure The number and length of the terms are specified in the Project Schedule section of Table 1 Ifa term is selected the fonts will be normal If a term is not selected the fonts will be gray and hard to read For example in the diagram below only two terms were indicated in the Project Schedule section so the third term is grayed out Figure 14 Table 1 Wind Global Inputs PPA Pricing Summaries Project Revenue and Operating Expenses PPA Pricing Summary Contract Term 124142006 to 1143012026 I Customer 1 Customer 2 Customer 3 Customer 4 Assigned Name xof Annual Mwh Produced OR up to MWh Sold in Period Energy Prices Energy Sales Less Transmission wheeling Charges Net Electric Sales Price 1 PPA Pricing Summary Second Term 124142026 to 1143072031 B Customer 5 Customer 7 Assigned Name of Annual Mwh Produced OR up to Mh Soldin Period Energy Prices Energy Sales Ce C smo e000 e000 sooo smo O Less Transmiss
135. rsions of the model once a license is renewed and since a Values Only copy can be opened without a license models can be permanently archived and reopened in this manner The Initial Installation File you receive from CEI will only enable the use of the model for a limited period usually 10 days If you have purchased an extended period license to use the EconExpert WIND model contact CEI after performing your initial installation CEI will provide you with the necessary License Extension Codes to fully enable your use of the model for the subscribed license period To access the License Enable License Extension feature first contact CEI by telephone and then from the UTILTIES menu select Extend my License Enable or Extend my EconExpert WIND License Next the following screen will appear p 10 EconExpert WIND Users Manual Copyright 2001 2008 Figure 1 How to Obtain an Authorized Subscription to EconExpert WIND STOP HERE EconExpert WIND Copyright 2005 Extend Your License x STOP HERE A current license to EconExpert WIND can be obtained by entering codes provided to you on the phone by CEI Inc If your installation has become corrupted you may also repair it using this option To authorize a license please provide the ing information to CEI XXXXXXXXXXXXXXXXXXXXX Original Licensed User Steve Provol Current Expiration Date 01 06 2006 Computer Clock Setting 11 09 2005 7 30 AM Your Access Code 13657
136. s Cash From Operations Net Income reflects taxes Net Income does not reflect and Book Depreciation taxes and reflects Tax show Deferred Taxes and Depreciation there are no typically uses straight line deferred taxes and typically depreciation uses MACRS depreciation p 71 EconExpert WIND Users Manual Copyright 2001 2008 Cash from Investing Identical to Table 11P Identical to Table 11 Cash from Financing Shows total Equity in the project Shows Contributions and Distributions from Table 1P Balance Sheet Assets Cash stays in the project and Book Depreciation is Cash is pulled out of the partnership as defined on used for PP amp E Table 1P and Tax Depreciation is used for PP amp E Includes Deferred Taxes Does not include Deferred Taxes Tracks the sum of the Partners Capital Accounts as well as Contributions and Distributions from Table 1P Equity Capital Accounts Tracks total Equity in project and treats Net Income as Retained Earning 4 Allocations There are many different ways partnership agreements can structure allocations of taxable income and loss This model certainly does not handle all possible variations but can handle many different types Taxable Income Loss and Depreciation The allocations available in Table 1P follow the typical allocations allowable under US partnership tax laws While this model allows the user to allocate the economic items in any proportion
137. s in cells AA68 AA70 in the Project Finance section on Table 1 Wind Global Inputs Figure 34 Table 1 Wind Global Inputs Developer Fee Investment Costs of Turbines 15 Phase 1 Project Development all figures are in 000 Per Turbine Other Total Project Developer Fee y 500 500 30 6 Licensing Permitting 45 Legal 25 Subtotal Project Development Costs Amount 000 of Proj Dev Contingency Amount of above 7 0 30 Sub Total Development Costs with Contingency 635 Amount 000 of Proj Dev Sales Tax of above 1 000 1 000 Sub Total Development Costs w Taxes amp Contingency 1 635 Loan Guarantee Fee The Loan Guarantee Fee is part of the Construction Financing costs located in the Project Finance section of Table 1 Wind Global Inputs If the user elects to have the Loan Guarantee Fee assigned to one of the partners this assignment occurs in cells W109 Z109 in the same section Simply click the radio button next to the partner who is guaranteeing the loan and is taking a fee for that service p 76 EconExpert WIND Users Manual Copyright 2001 2008 Figure 35 Table 1 Wind Global Inputs Loan Guarantee Fee Construction Financing 8 months all figures are in 000 For Senior Debt For Bridge Debt Percent of Borrowed Funds 100 0 0 0 Construction Senior Debt Developer Tax Investor Rate or Factor Tota
138. s in the Global Inputs Sheet are highlighted The Current Target case is illustrated in a new worksheet with each of the input cells that have changed highlighted in ORANGE Figure 8 Comparing Data Files Quantifying the Difference in Inputs and Results in a TARGET File versus a REFERENCE FILE File Edit View Insert Format Tools Data Window Help Acrobat NAVIGATE PRINT SENSITIVITIES UTILITIES EconExpert HELP ENABLE MODEL 8 Xx Mi EE ee ee a ee Select Checkbox to Use XIRR XIRR Requires Analysis ToolPak TC IRR Selected Table 1 Section 14 GLOBAL INPUTS Global Inputs Holding Bin 1 is Not Labled FACENCEI ProformatCEl Commerigfr Shaded Areas Indicate Inputs Name of File Deita Changes in Inputs and Res Fj p Global Inputs Holding Bin 2 is Not Labled N Active Annual Inputs Sheet is Not Labeled ft AE N TE y E i SENSIT Ho Annual Inputs Used of HD TORNADO DIAGRAI HPY to by EOY 2003 1000 STUL HPV and IRR Summary gt H C Tne cases Example Frame F Combined z Ki F eswre Highlighted on an Orange Background 3 34 os Plant Capacity Heat Rate amp Fuel Type Energy and Fuel Pricing Profiles Period 1A Period 1B 3 Rated Net Plant Capacity MW 0 i Period 1A Period 1B 37 _Net Heat Rate Electricity Onl Btutkwh HHY g of Annual MVVH Produced 3 0 0 0 n af z Real g Re 39 Fuel Selection Enter 1_for Coal
139. s inputs that can be divided into up to twenty four periods of your own design in this sheet The resulting calculations can then be automatically referenced by formulas in the Annual Inputs Sheet producing a proforma that fully evaluates multi period inputs This sheet is not active unless you direct the model to use it by referencing this sheet using the Populate option on the UTILITIES menu e Table 1P Partner Returns is architected to model various schemes that might be written into a partnership agreement allowing up to three equity partners with individual tax rates capital accounts distributive shares and distributions Table 1P takes the results from the other tables and then adds on various inputs that allow customization at the partner level Note that in more recent versions of EconExpert WIND partnership analysis is performed in a separate module e Table 1Q Quick Project Analysis can be used to quickly analyze a wind power project by only focusing on set of economic inputs to model a project Simply entering values on this table is insufficient to perform a quick analysis The user must go to the Utilities menu and select A wide range of project specific conditions can be easily and accurately modeled using this powerful combination of inputs sheets Descriptions and functions of the individual inputs are provided in Help Comments included with each input cell Additional discussion of the individual inputs s
140. s with electronic copies of EconExpert WIND if such reports or electronic copies are generated by the EconExpert WIND model s Command Menu and contain the Copyright Notices included with the EconExpert WIND model You may also provide saved electronic copies of the EconExpert WIND model to others but such copies will not function properly on unlicensed computers unless the Authorized License Codes are provided by Competitive Energy Insight Inc Changing of Your Computer s Clock If you make changes to the setting of the clock on your computer particularly if you set the clock backwards after you have installed EconExpert WIND or forwards beyond the end of your authorized license period an error will be produced when the EconExpert WIND model is opened While Excel can be closed and reopened normally EconExpert WIND will not function properly if it is reopened after such invalid clock settings have been made If you encounter a problem related to the setting of your computer clock as it relates to EconExpert WIND please contact CEI to discuss measures to repair your valid installation of the model p 3 EconExpert WIND Users Manual Copyright 2001 2008 Use of EconExpert WIND with Macros Enabled In order to properly install and use EconExpert WIND the Macros Enabled option for Microsoft Excel MUST be selected The model will not function properly without Macros Enabled Microsoft Excel Versions 2002 and later include a Security S
141. scribed in this Agreement as Derivative Works Users may only make changes to the Model in such designated Unprotected areas or by inserting worksheets in the model and such changes are only for the use of Licensees and Authorized Users of the Model CEI provides no warranties relative to such Derivative Works of the Model or relative to Licensee s or Authorized Users application of such Derivative Works Inputs examples and descriptions provided by CEI in the Model are provided for example purposes only and CEI makes no representations or warranties with respect to the accuracy of such inputs examples or descriptions 9 Sharing of Electronic Copies of the Model and Printed Materials Generated by the Model Electronic copies of the Model and printed materials generated by the Model may be generated and shared with third parties ONLY as specified below All Electronic Copies of the Model and Printed Materials must include the original Copyright notices provided by CEI 9 1 Saving of Electronic Copies of the Model Users may make save and reuse electronic copies of the Model as required for use on the Authorized Computers or as otherwise designated in writing by CEI 9 2 Sharing of fully functional Electronic Copies of the Model Users may share electronic copies of the Model with others including third parities who have a current and valid License with CEI for the Model but such Electronic Copies will not work properly on computers th
142. se Yr Real Escalation Land Lease of Revenue Period One 1 20 3 0 7 2 0 Land Lease of Revenue Period Two 20 25 0 0 2 0 Land Lease of Revenue Period Three T JFixed Annual Payments minimum Annual Payments Applies to ALL Per Turbine 000 yr plus Annual 000 Guaranteed Return on Capital Near the top of Table 1P there is a table to provide any partner a Guaranteed Return on Capital In this table the user can specify the percent of initial capital invested that will be returned to the partner each year for the years specified The guaranteed return on capital differs from a preferred return in that the guaranteed return on capital does not affect the partner s capital account The payment is taxable to the partner receiving the Guaranteed Return and may be taxable as self employment income depending on the partner s situation Figure 37 Table 1P Partner Returns Guaranteed Return on Capital p 77 EconExpert WIND Users Manual Copyright 2001 2008 Table 1P Partner Returns November 7 2005 Warning Negative Capital Account Warning Negative Inside Basis All Figures in 000 8 Glossary Most definitions from IRS Publication 541 except where noted Capital Account A capital account represents the equity that a partner has in the partnership The Capital Account tracks the partner s contributions distributions and the distributive
143. ss into account Any loss that is more than the partner s adjusted basis is not deductible for that year However any loss not allowed for this reason will be allowed as a deduction up to the partner s basis at the end of any succeeding year in which the partner increases his or her basis to more than zero EconExpert WIND Users Manual Copyright 2001 2008 Partnership Liabilities e A partner s basis in a partnership interest includes the partner s share of a partnership liability only if and to the extent that the liability o Creates or increases the partnership s basis in any of its assets The term assets includes capitalized items allocable to future periods such as organization expenses o Gives rise to a current deduction to the partnership o Is anondeductible non capital expense of the partnership e Ifa partner s share of partnership liabilities increases or a partner s individual liabilities increase because he or she assumes partnership liabilities this increase is treated as a contribution of money by the partner to the partnership e Ifa partner s share of partnership liabilities decreases or a partner s individual liabilities decrease because the partnership assumes his or her individual liabilities this decrease is treated as a distribution of money to the partner by the partnership e Assumption of liability A partner or related person is considered to assume a partnership liability only to the extent that o
144. t 1 All Other O amp M Costs 25 Energy Prices All PPAs 8760 hrs 10 Years yr of Costs 1000 Ya of Annual Average MWH Interest Rate on Developers Royalties Production Tax Credits Subordinated Debt MB 25 c00s 10 Term of Subordinated Debt Years 1 yr Land Lease 25 Escalation Rate of 0 3 of Costs 1000 Production Tax Credits o yr e Property Taxes 25 Green Tags Renewable Energy 20 of Costs 1000 Credits MWH n i 7 77 p Variable Oper ating Costs cena ES 25 Additional Revenues 1 0004r 0 Additional Expenses 1 000Ar 0 Additional Revenues 2 000yr 0 Global Inputs Variable O amp M User 25 ae Additional Expenses 2 000Ar 0 Additional Revenues 3 000 r 0 Global Inputs Variable O amp M User 25 tie Pdditional Expenses 3 000AT 0 be Additional Revenues 4 000 yr 0 Copyright 2005 CEI ne AI Rights Reserved Click to Create Click to Create P IRR Tornado Diagram NP Tornado Diagram Print Form Cancel The white boxes in this sheet are the locations where you tell EconExpert WIND over what range Increment that you would like the model to vary each of the specified inputs Once you have established the Increments select either the IRR or NPV buttons to generate the selected Tornado Diagram After selecting this button the following diagram will be generated p 89 EconExpert WIND Users Manual Copyright 2001 2008 Figure
145. t dollars and are not escalated by the model These amounts will be added to other revenue sources calculated from Table 1 Inputs The labels are user defined and will appear in the corresponding tables and reports throughout the model These titles will be accessible for Sensitivities and will be updated on the EconExpert WIND menu when the menu is refreshed Figure 25 Table 1C Annual Inputs Other Revenue Sources CUUNCAPUIU VWINY Vi UIA VUURPYL CUUS UCI IL AN YIO MEDC VEU TABLE 1C Annual Inputs cick See aoe Year Operation in Year 1 and Year 21 Example Data Holding Bin 2 is not labled November 1 2005 Show Comment For Instructions Het Production 53 252 Wind Rating P90 All Annual Inputs expressed at values are entered in Current Year Inputs Used Year of Operation 4 2 All Figures in 000 Year 2006 2007 Operational Months 1 12 Other Revenues Renewable Energy Credits Avvvn lobal npu Inputs GtherREvenues User Defined Sfbal Inputs Other Revenues User Defined 2 vV Additional Revenues 2 000yr Entries are additive to Table 1 wind Global Inputs Additional Revenues 3 000Ar Entries are additive to Table 1 Wind Global Inputs Entries are additive to Table 1 wind Global Inputs Additional Revenues 4 0004 Entries are additive to Table 1 wind Global Inputs User Defined Labels Variable Operating Costs Variable Operations and Maintenance O amp M costs are dependent on gross annual
146. ted it can be easily corrected by first turning OFF the range protection and then simply clicking on the graph to make the desired changes After completing the corrections it is recommended that you turn the protection back ON For Help on formatting graphs in Excel see the Excel Help Menu and perform a search for Charts Please note that when a graph is selected the EconExpert WIND Command Menu will disappear The Menu will reappear when the selected graph is closed The graph can be closed by clicking on any cell in the model Hide Comments in Cells You can turn on or off the Help comments that are provided throughout the model The Help comments are described in more detail in the next section Temporarily Change Company Name on Reports You can temporarily change the name of the company that will appear in the reports that are generated from the EconExpert WIND menu When you reinitialize the model the name will be reset to the default value that the model is registered to Create Values Only Copy of the Model for Sharing with Others From the UTILITIES MENU or from the EconExpert Help Menu you can create a Values Only copy of the current EconExpert WIND case This Values Only copy of EconExpert WIND can be shared with others who may not be licensed to use EconExpert WIND It will not be possible to run new cases using the Values Only copy and once saved and reopened the EconExpert WIND Com
147. ter the respective Increment to be used If you run all of the Sensitivities as a batch you will be advised of the current values and asked if you want to use them or change them manually in the Sensitivity Sheet So for example when performing a Sensitivity Analysis on the Capital Investment Cost of the project the user might specify a Sensitivity Increment of 5 Econ Expert will then iterate the model using values of 85 90 95 100 105 110 and 115 of the Capital Cost used for the current case and will then report in tabular and graphic format how the project s IRR will vary as a function of the resulting changes in the Total Investment Cost including Development Costs Capital Costs Soft Costs and Interest During Construction The Sensitivity Increment can also be specified in a cell in the Capital Cost Sensitivity Table After executing a Sensitivity Analysis the user will be taken to the resulting graph that illustrates how the project IRR is impacted by changes in the selected variable A sample of that graph is shown on the next page p 87 EconExpert WIND Users Manual Copyright 2001 2008 Figure 40 Graphs Produced from Sensitivity Analyses NPV After Tax 20 Years at 10 0 Discount Rate Leveraged NPV After Tax 20 Years at 8 0 Discount Rate Unleveraged Important Notes regarding Sensitivities e Sensitivity analyses are performed for a specific case in the m
148. the respective Tornado Diagram from the SENSITIVITIES Menu An example of the Data Input Sheet that will be opened is provided below Figure 41 Tornado Diagrams Data Input Sheet xl Tornado Diagrams help you to identify which economic parameters nputs if they were to change would have most consequential impacts on the analysis They illustrate how the IRR NPV or Payback of the Project will be impacted by changes in order or significance This provides valuable insight into which parameters might warrant further investigation to determine how changes would impact the economic case you have set up Please note that due to the nature of timing and discount rate effects on the IRR and NPY calculations the ordering of consequential impact of the parameters on the respective IRR and NPY Tornado Diagrams may be different for the same base case Enter 0 for the Variation to omit a variable p r Capital Investment Capacity Factor Equity and Financin ate Revenues a and Fixed Operating Costs Change in Owner s Equity 10 Capital Investment 10 Energy Prices PPA 4 10 of Total Investment 1000 of Initial Investment First Term MWH Interest Rate on 1 Capacity Factor 5 Energy Prices PPA 2 10 Construction Financing of Annual MWH Second Term MWH Interest Rate on All Fixed O amp M Costs Energy Prices PPA 3 Senior Primary Debt 1 of Costs 1000 25 Third Term MWH 10 Term of Senior Primary Deb
149. the Sensitivity Cases included with a Values Only Copy cannot be updated after the model is converted you will be offered the option to run all of the Sensitivity Cases and Tornado Diagrams prior to the conversion If you decline this option the Tables on the Sensitivity Sheet Tornado Diagrams and Sensitivity Graphs will be deleted to ensure that the Values Only copy does not contain Sensitivity Cases that are inconsistent with the case provided Depending on the speed of your computer running all of the Sensitivity Cases as a batch should take between 1 and 3 minutes Prior to executing a Values Only conversion you will be prompted with a number of Warnings advising you to save the results before making the conversion and to save the Values Only file to a new name These Warnings are to ensure that you don t accidentally overwrite your original copy of the Fully Functioning model If desired you can archive a Values Only copy of the model that can be restored by a licensed user to a full working version of the model To restore a full working version from a Recoverable Values Only copy use the Import option on the UTILITIES MENU Please be aware that under the terms of the Software License Agreement all printed reports and copies of EconExpert WIND must contain the original copyright notices p 85 EconExpert WIND Users Manual Copyright 2001 2008 X Sensitivity Analyses Note In m
150. the model can be enabled by obtaining the appropriate License Authorization Codes from CEI Once entered the codes will fully enable the use of EconExpert CP on that computer for the subject license period You will now be transferred to the EconExpert CP Title Screen p 18 EconExpert WIND Users Manual Copyright 2001 2008 Figure 4 The EconExpert WIND Title Screen EQ Microsoft Excel EconExpert WIND Proforma 7 7012 4 NOT OBFUSCATED xIs 1 fie Edit View Insert Format Tools Data Window Help ENABLE WIND MODEL NAVIGATE PRINT SENSITIVITIES UTILITIES EconExpert HELP 8 xX OSH ERE S6RY BB Slo m o l a la B SWISS z1 Blz u 2 s BEE S O A GREE 4 O al Eae Click Here to Start at Input Sheet Table 1 Global Inputs Click Here A Universal Financial Proforma to REFRESH EconExpert WIND Men This software is for the use by licensed users only This spreadsheet and its associated visual basic macros are protected by copyright law and international treaties Unauthorized reproduction reverse engineering modification or distribution of this program or ang portion of it may result in severe civil and criminal penalties and will be prosecuted to the mazimum extent possible under the law 1 Page Project Summary Table 19 Quick Project Analysis Table 1 Wind Global Inputs Draw gt Ts AutoShapes Soa DOB 428 B o Z A SZ EOQ Step 8 With the EconExpert WIND Command Me
151. ti REFRESH Menu Project Life Year of Analysis November 7 2005 Total Initial Investment Warning Negative Capital Account of Initial Partnership Warning Negative Inside Basis Post Tax NPY 10 0 a e x a Certs Aocomss __ R Taxable Losses 2 Distribute Enoudh to Pay Taxes y Depreciation Q 3 Maintain Cap AcAgunt 3 Capital Share All Figures in 000 Ps Maintain Basis N snore Ne Capital Accounts Capital Account values for each partner change yearly as allocations are made to reflect taxable income loss allocations and or cash distributions In reality capital account values can change with more frequency e g quarterly or monthly but in this model all capital account changes are assumed to occur annually By selecting this option the end of year cash distributions will be paid to each partner proportionally according to their end of year Capital Account values Profit Share Another option is to base the cash distributions on the designated profit sharing which is defined in the Allocations section under Taxable Income Loss and Depreciation Capital Share The third option is to set cash distributions to the amount of capital invested None The last option is to only use custom distributions which are done in lines 161 163 on Table 1P Custom distributions can also be used if any of the Cash Distributions options except for Maximum Cash are selected because there will be cash availab
152. tilized it is recommended that the user enter that data for the whole project life If the data is not available for the whole project life use formulas in the cells to project the data over the entire project life Otherwise where blank cells or zeros are transferred to the Annual Inputs Sheet the Global Inputs data will be applied p 67 EconExpert WIND Users Manual Copyright 2001 2008 D Table 1P Partner Returns Note that in more recent versions of EconExpert WIND partnership analysis is performed in a separate Partnerships Module This module includes all of the features of the previous version and many new capabilities A separate User s Manual is provided for the EconExpert Partnerships Module In earlier versions of EconExpert WIND Table 1P Partner Returns and Table 11P Partnership Financials are architected to model various schemes that might be written into a partnership agreement This module in the model is designed to be able to model most partnership arrangements but still provide some automated calculations to support those arrangements Also proper capital account tracking and individual tax treatments are used Lastly please refer to the Glossary at the end of this section for any terms that are unfamiliar to you Figure 27 Table 1P Partner Returns lEconExpert WIND V7 7013 4 Copyright 2005 CEI Inc All Rights Reserved Table 4P Partner Returns Description REFRESH Me
153. tor calculated after those losses are accounted for Economic Factors This section captures the escalation rates and discount factors that determines the base rates throughout the model Inputs here include e Base Year The time frame from which all escalation calculations will be performed Operating Cost and Revenue inputs to Table are expressed in Base Year and will be escalated to the current year by compounding the Real Escalation Rate assigned to that component with the GNP Escalation Rate described below e GNP Escalation Rate The life of project rate of general inflation Each cost or revenue input in Table 1 also includes a Real escalation entry which when added to the GNP Escalation Rate provides the effective rate of escalation for that input If the rate of escalation for an input is equal to the GNP Escalation Rate that input s Real Escalation Rate would be 0 0 If an input escalates at a rate higher than inflation its Real Escalation Rate would be greater than 0 0 and similarly it would be negative if the input escalates at a rate lower than the general inflation rate e Discount Rates Used for NPV Calculations on a leveraged and an unleveraged basis These are the rates used in Tables 8A and 8B for calculating the Net Present Value of the project discounted to the year of financial closing They are normally the cost of capital for the corporation e Interest Rate Earned on Escrowed Funds This is the rate earned
154. try cells could use some defining and these definitions continue in the next section p 49 EconExpert WIND Users Manual Copyright 2001 2008 e Annual Gross Energy Production the generation inputted above before any losses from the section below are subtracted e Energy Production After Array Losses the generation minus the losses specified in cell D123 Windpark Efficiency Loss e Energy Production After ALL Loses the generation minus all losses that total to cell D 142 which includes the Array loss and all losses above line 142 e Net Energy Produced the generation after All Losses and adjustments for the Curtailment Risk and Availability Factor Compounded Efficiency Losses and Net Capacity The inputs for this section are used to degrade the generation amount specified in the above section Each line item has a definition in the Help Comments for that cell Below the inputs the Capacity and Capacity Factors are shown for each of the different levels specified above Gross Capacity Capacity after Array Losses and Capacity After All Losses and Risks The Plant Capacity Factor is the percentage of potential annual generation that is produced over the year So a capacity factor of 80 means that the net annual MWH sold from the facility is 80 of the plant s generating capacity times 8760 hours year As the Curtailment Risk and Availability Factor do not really reduced Capacity there is not a capacity fac
155. ts that are generated each time you create a Tornado Diagram from the SENSITIVITIES Menu Project Valuation Tables Print the selected tables that are included on the Sensitivities Sheet Sensitivity Tables Print the selected tables that are included on the Sensitivities Sheet SENSITIVITIES In the most recent versions of EconExpert Wind the sensitivity charts are included in a separate file The SENSITIVITIES Menu provides you with options to perform special calculations including the calculation of the annual Project Rate Base and the Project Valuation and to study how the Project Valuation Net Present Value or Internal Rate of Return of the current case will be impacted by incrementing key inputs to the model The Sensitivities are performed by varying the identified inputs over the life of the project Because graphs take up a lot of memory in Excel there is only an IRR or NPV version of each graph in the model To change the project return metric for a chart 1 Choose Tools Protection Unprotect Sheet from the Command Menu 2 Right Click on the chart 3 Select Source Data p 24 EconExpert WIND Users Manual Copyright 2001 2008 4 Trace the data back to the Sensitivities tab 5 Re link the graph to the data that you want to see e g from NPV to IRR 6 Change the chart titles Options on the SENSITIVITY menu include e Project Valuation Calculations EconExpert WIND includes an automated feature that allows
156. ually or as a group and to report how the project s Internal Rate of Return IRR will be impacted by variations in these parameters You can specify the term in years of the IRR Analysis that is used in the Sensitivities by entering the desired number of years in the third column of the IRR Summary Table at the top of Table 1 The location of the entry is identified by the red bold faced title TERM USED FOR SENSITIVITY A Setting the Term B You can specify the term in years of the IRR and NPV Analyses that are used in the Sensitivities by entering the desired number of years in the third column of the NPV and IRR Summary Tables at the top of Table 1 The location of the entry is identified by the red bold faced title IRR TERM FOR SENSITIVITY STUDIES as shown in Figure 19 below Figure 39 Table 1 Wind Global Inputs The IRR Sensitivity Term After Tax IRR TERM USED FOR End of Year SENSITIVITIES Years 6 410 20 Leveraged 6 18 12 59 15 94 Unleveraged 1 82 9 94 12 83 Sensitivity Increments Sensitivity Analyses in EconExpert WIND are executed by incrementing the selected variable over a range of values that can be defined by the user The Sensitivity Increment is used to define the range by iterating the model over 7 intervals from the base case value minus three times the Increment to the base case value plus three times the Increment When you run a Sensitivity Analysis you will be prompted to en
157. ues in both cells the values will be combined for a total Costs are also expressed in Base Year and a Real Escalation factor is provided Note that real escalation will be added to the GNP Escalator to arrive at the actual escalation for that component Spare Parts The model is structured to have a one time Spare Parts Purchase which places an amount of spare parts in inventory Next there is also a Spare Parts Consumption rate which specifies the amount of spare parts consumed each year If there are values for both entries the user can also indicate the amount of spare parts from inventory that are consumed each year The amount is entered as a percentage as shown in the following diagram p 53 EconExpert WIND Users Manual Copyright 2001 2008 Figure 15 Table 1 Wind Global Inputs Spare Parts Costs Purchase of Spare Parts Inventory Consumption of Spare Parts 6 I O amp M Reserve The Operations and Maintenance O amp M reserve is the amount that a lender or third party might require of the operator In this section the user defines the value by the equivalent of the number of months of operating expenses and starting and ending years If the user would prefer to simply enter a value for each year they can use Table 1C Variable O amp M Variable Operations and Maintenance O amp M costs are dependent on gross annual electric power production before the losses are reduced There are two user defin
158. ule o Monthly Construction Cost Schedule o Cumulative Monthly Construction Cost Schedule The total monthly drawdown during the construction phase is computed as follows Land and Development Costs which may actually occur prior to closing are scheduled as a one time expense lumped in the first month of the construction phase Capital Costs and Loan Commitment Fees are expended according to the Drawdown Schedule Start up Mobilization and Spares costs are spread evenly overly the last six months of the Construction Schedule If the Schedule is shorter than six months they are divided evenly over the period Working Capital is accumulated over the last three months of the Construction Schedule If the Schedule is shorter than three months they are divided evenly over the period Debt Reserves are deposited in the last month of the schedule p 40 EconExpert WIND Users Manual Copyright 2001 2008 Interest During Construction is calculated and added to other construction term costs based on the percent of construction costs that are debt financed using the Construction Term Debt parameters and the resulting monthly expenditures described above Loan Commitment Fees are based on the monthly undrawn balance Vendor Letter of Credit Admin Fee is based on the schedule on Table 3 below the Monthly Schedule and above the Cumulative Construction Schedule 7 Table 4 Operating Costs 8 Table 4 provides calculat
159. uming an as 4 Project Finance After the project parameters are set it is time to decide how the project will be financed The top section of the Project Finance column is the major finance inputs Debt Equity during Construction This is the percentage of the costs realized during the construction phase that are funded with Owner s Equity If set to 0 debt will be used to finance 100 of the construction period costs Costs during the construction phase are calculated based on the Drawdown Schedule with Interest During Construction calculated based on the resulting debt The Interest Rate on Construction Term Debt is discussed on page 56 Debt Equity during Operations The is the percentage of the Total Investment Cost including Soft Costs and Interest During Construction that is funded with Equity when the Permanent Debt is initiated The remaining amount will be allocated to Primary and Subordinated Debt The terms specified for Primary and Subordinated Debt are discussed on page 56 Number of Equity Participants and share of equity If the equity participants are forming a partnership the partnership issues are handing on Table 1P Lastly if there is a partnership and one of the equity participants is the Developer then the Developer Fees should be allocated to that Equity Participant in this section Figure 20 Table 1 Wind Global Inputs Equity and Project Ownership p 57 EconExpert WIND Users Manual Copyright
160. ve during ns Trea A that period H Total Potential Term of PPA 25 If the Start of Operations results in part year operations in the first year costs in the first and last year of the project life will be prorated based on the percent of the year that the plant is in service Turbine and Wind Farm Capacity The next section down is where the user enters the number of turbines and the rated capacity for each turbine The model can accept up to two turbine models Wind Rating Profile Annual Energy Production The model offers up to six 6 entries for gross energy production This model starts with electric generation and assumes that the wind farm modeling has been done already or that the user has already estimated generation amounts The section accepts entries for six 6 defined Wind Rating levels P50 P60 P75 P90 P95 and P99 The user can enter generation values in MWh in one or any of the associated entry cells If the user only has one generation amount that they want to model they can enter that amount in any of the green cell and simply select the radio button next to the green entry cell This section is structured to allow the user to quickly run scenario analyzes for various wind profiles by simply clicking on the radio buttons and monitoring the impacts on project returns In addition there is a special Sensitivity graph just for comparing project economics based on the wind profile inputs A couple of the lines below the en
161. xcel for which Licensee must possess a valid license Licensee and Licensee s authorized users of the Model must use software and hardware that satisfy the minimum requirements specified in the Model s User s Manual 2 License Rights This Agreement provides Licensee and its Authorized Users with a limited nonexclusive nontransferable license right to install and to use the Model on specific desktop and laptop computers Authorized Computers The number of specific Authorized Computers must be authorized in writing fax or email by CEI usually by invoice and associated receipt of payment from Licensee Neither Licensee nor its Authorized Users may sublicense assign or transfer the license granted hereunder to any third party and any attempt at any such sublicense assignment or transfer is void Licensee and its Authorized Users may not copy distribute modify reverse engineer or create Derivative Works as hereinafter defined except as expressly authorized by this Agreement and the Model Authorized Users are authorized to use the Model only on the computers specified in writing fax or email by CEI and the list of such computers shall only be modified with documented approval by CEI which may be by written agreement fax or email 3 Termination In the event of a breach of this Agreement by Licensee CEI may terminate this Agreement Upon termination or expiration of the term of this Agreement Licensee s and Authorized Users
162. y and Generation Federal PTC Rate C YES State Income Tax Rate 8 84 A wo i Turbine Rating 1 650 KA Expense Name Amount b aT an of Turbines 50 O amp M Expense 1 Turbine Fixed 10 0 000 Per Turbine Gross Wind Farm Capacity 82 500 KN O amp M Expense 2 Turbine Other 5 0 000 Per Turbine O amp M Expense 3 000 Other 100 1000 Total Project Land Lease 9 of Sales Net Energy Delivered 320 879 MVvniyr v Net Vind Farm Capacity Delivered 44 4 Capacity Factor Investment Costs Project Finance Amount 000 Project Development 3 185 Percent Debt Wind Turbines 83 750 Interest Rate on Debt Balance of Plant 12 350 Term of Debt years Other Costs 1 000 Discount Rate for NPV Total Investment 100 285 GNP Escalation Rate Project Schedule The first section at the top left of Table 1 is the Project Schedule where the user specifies the start of the project Financial Closing Date the duration of the installation Construction Term and the Project Life In addition in the section the user can segment the project life into multiple terms specifically for PPA or different revenue pricing Gross Wind Farm Capacity and Generation The next section offers entries for the rating of the Wind turbines to be installed the number of turbines and the Net Wind Farm Capacity The Net Energy Delivered is calculated and shown below the entries p 82 EconExpert WIND Users Manual Copyright 2001 200
163. yment schedules as a percentage of the initial debt balance or in 000 year For the purposes of calculating debt coverage ratios the coverage ratio for Senior Debt is calculated assuming funds available to cover debt including all expenses and Subordinated Debt Costs Sources of Capital A summary of sources of capital for the project is provided in this section The figure below shows these amounts Sources are shown for the total project and for the each investor s percent interest in the project p 58 EconExpert WIND Users Manual Copyright 2001 2008 Year Months Applicable During Year Schedules for Capital Investment Costs BOOK Depreciation Schedules Straight Line Depreciation EconExpert uses the Deferral Method of Generally Accepted Accounting Principles GAAP for all Book Analyses including the Income Statement Cash Flow Statement and Balance Sheet in Table 11 Depreciation is calculated using the cost basis of the plant Capital Investment minus working capital debt reserves and land In this section of Table 1 the user specifies the percentage of the original plant Cost Basis that is depreciated for Cash Tax and for Book Tax purposes Depreciation for cash taxes is calculated using IRS Modified Accelerated Cost Recovery MACRS depreciation schedules Book depreciation uses Straight Line Methods Both methods prorate depreciation for partial operations in the first year and accelerate capture of depreciation

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