Colossal Mistake

1
Colossal MistakeLong-term Price Projections
/mmBtu
15
12
Natural Gas Oil Coal
65/bbl
9
40/bbl
6
3
2.31
EIA AEO1996
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2
GasificationDomestic Supply Option
3
EPACT2005 Summary of Gasification Incentives
4
Loan Guarantees Access to Capital Lower Cost
Energy Costs
Gas Costs
12
14
/MMBtu
Cent/KWh
12
10
8.5
10
8
Capital

OM
8
5.8
6
Capital
4.6
6
4.4

OM
3.9
4
Fuel
4
Capital
Capital
Capital


Fuel

OM
OM
Fuel
OM
2
2
Conversion
Fuel
Fuel
Fuel
-
IGCC
SCPC
NGCC
NGCC
IGCC with Loan Guarantee
Syngas with Loan Guarantee
Natural Gas Price
(6 gas)
(10 gas)
5
No Appropriations needed under 3Party Covenant
Provides
Receives
-- 80 loan guarantee -- Lower cost of capital
-- Low risk scoring
Federal Government
-- Lower electricity/gas rates -- Jobs and
development
State PUC
-- Assured revenue stream
-- Full Cost Recovery
-- 20 equity -- EPC warranties
Owner