1 / 6

Project Tex-Mex Chips & Salsa Board Presentation 3/12/01

Project Tex-Mex Chips & Salsa Board Presentation 3/12/01. RESOLUTION. Approval to execute a 15 year PSA with a Mexican industrial company for 112 MW of the available 300 MW capacity. (Project Chips)

moke
Download Presentation

Project Tex-Mex Chips & Salsa Board Presentation 3/12/01

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Project Tex-MexChips & SalsaBoard Presentation3/12/01

  2. RESOLUTION • Approval to execute a 15 year PSA with a Mexican industrial company for 112 MW of the available 300 MW capacity. (Project Chips) • Approval to spend $76 million to build a 300 MW transmission line between the Texas and Mexico power grids. (Project Salsa) The Executive Committee of the Board of Enron delegates authority to Mark Frevert to enter into the above transaction post satisfaction of the conditions precedent in the PSA (including interconnect agreements with the Mexican Government).

  3. THE OPPORTUNITY (Project Chips) MEXICO MARKET • Mexico is very short power. (Mexico's energy ministry believes it must increase supply by 33% by 2007). • Portions of Mexico’s industrial load is growing at 8% per year. MEXICAN POWER PURCHASE AGREEMENTS • EA Mexico has negotiated a power sale agreement (“PSA”) with a Mexican industrial company; creating an initial short power position of 112MW as of mid-2002 providing for: • 7 X 24 firm baseload power for 15 years. • 100% guaranteed availability/year to customer (EA has the option to call back up to 5% of annual MWh). • In exchange for receiving more reliable power, DeAcero will pay EA: • $7.00/kW-month escalating capacity payment (demand charge) - - average $10.12 over 15 years. • Energy at a price based on an 8750 Btu/KWh heat rate and a gas index price (Tetco S. Tx.). • Anchor tenant pays approximately 84% of the capital costs of the HVDC Tie (Project Salsa).

  4. THE ASSET (Project Salsa) HIGH VOLTAGE DIRECT CURRENT TIE (“HVDC TIE”) • A HVDC Tie would give EA the ability to import/export up to 300MW of power (supply the PSA) without adversely affecting either the ERCOT or CFE transmission grids. • In order to construct the HVDC Tie and reserve 100% of the transmission across it without triggering PUHCA jurisdiction, EA has entered into agreements with the Brownsville Public Utility Board providing for: • EA financing and construction of asset; • BPUB ownership of asset in exchange for long term transmission agreement with EA across HVDC Tie. HVDC Tie EPC Contract $49.5 MM Substation Substation AC in Phase with ERCOT AC in Phase with CFE Mexico U.S. DC DC Additional transmission line construction, financing costs, and IDCs ~ $26.5MM

  5. ECONOMICS

  6. TRANSACTION SUMMARY • Additional Costs: • External Financing Origination and Legal Fees: ~$2.6MM • Interest During Construction: ~$7MM

More Related