Memorandum To: Brian Fairbank, CEO of Jimmy Peak Mountain Resort From: John Marshall, Project Leads of Sustainable Energy Developments Date: November 21, 2013 Subject: GE Wind Turbine Financial Feasibility The financial feasibility of purchasing the GE Wind Turbine is sensitive to whether or not Jimmy Peak receives the grants and tax credits that are expected. Another factor that is important to the sensitivity of the projects financial feasibility is the expected.
The expectations of these important factors determine the financial favorability of the GE Wind Turbine project. If we assume that the MTC grants will be made available and the tax credits can be taken, the projects financial outcome is favorable. Assuming that the electricity costs will be above $0. 11 per kWh the financial outcome can be expected to produce a positive net present value. This scenario seems to be the most likely as SED does not foresee any reason why the grants and tax credits would not be available to Jimmy Peak.
If we assume that the MTC grants and tax redits will not be available for the GE Wind Turbine project, the financial outcome appears to be unfavorable. The grants and tax credits help make the project favorable as the grants greatly reduce Jimmy Peaks investment in the project, while the tax credits provide an annual direct benefit to the amount owed for taxes. It is our recommendation that Jimmy Peak Mountain Resort should pursue the GE Wind Turbine project based on the assumption that the grants and tax credits will be made available.
We feel that it is safe to assume that energy costs will continue to increase. Our analysis supports the purchases of the GE Wind Turbine based on current and increasing energy costs. While it is our recommendation to move forward with this project, we are also providing excel worksheet that Jimmy Peak can use to compare scenarios. This worksheet is set up so that Jimmy Peak can enter its own assumptions and based on energy expectations. Please contact us with any further questions or concerns. Sincerely, John Marshall