Doyle Financial changes since Fall 99

Ronnie, this sounds like good news.

I think the project team managed the #1 turbine problem heroically.

Talk to you soon.

Regards
Delainey
---------------------- Forwarded by David W Delainey/HOU/ECT on 07/07/2000
06:19 PM ---------------------------

From: Clay Spears 07/07/2000 09:35 AM

To: rlee@waltonemc.com, rdelong@waltonemc.com
cc: Mike J Miller/HOU/ECT@ECT, David W Delainey/HOU/ECT@ECT, Janet R
Dietrich/HOU/ECT@ECT
Subject: Doyle Financial changes since Fall 99

Ronnie and Russell,

Attached find a revised financial model for the Doyle project. The model
contains the changes that have occurred since this model was last updated in
the Fall of 1999. While the model is lengthy, I will summarize the major
differences in the project.

1). Capital Cost Increases:

The project capital cost has increased from the original plan. The increases
are dur to the following changes from our initial budget:

a) Planned purchase of the neighbor's house $ 140,000
b) Added cost of the sewer line $ 59,000
c) Output bonus on the PDA for max 5 MW $1,725,000
d) IDC increase from increase in interest rates $ 574,000
Total $2,498,000

2). Total Output change from 342 MW to 351.6 MW. This assumes that unit 1
will test at 62.2 MW. (the same as units 2 & 3)

3). Project Net Value Increases due to Output Increase:

Impact of the added plant output is very positive. It increases cashflow and
debt service coverage. The net increase to Walton is an additional
$2,568,000 in value. Walton's NPV increased from $5,281,000 to $7,849,000.
This NPV includes Walton's project returns, the cost of interest on equity,
the cost and recovery of LTCTs, and the asset management fee.

If you have any question, please call.

Clay