(GP/GT) for Additional Water Supply in the Lower Rio Grande

III-39
Exhibit DID-I
Calculation of the Projected Order-of-Magnitude Unit Cost of Electrical Power
Produced From the E(G) Component of a GP/GT Well Drilled Into
the East Sand or the Bond Sand Cost Expressed in $IKWHR
A. Projected Annual Costs
1. Determination of Projected Capital Cost (I)
Item
a. Drill and complete GP/GT well to depth of 10,000 ft +/-
b. Separator and other surface equipment
c. Brine disposal well (3000 feet deep)
d. Gas gathering line (10,000 ft)
e. 3 MW Gas Generator and Interconnection C2l
f. Generator Synchronizing Switchgear (2)
Subtotal
+ allowance for engineering & contingencies (10%)
Total Projected Capital costs
2. Annualization of Projected Capital Costs - Assuming 15 year loan at 8% interest, Annual Debt
$114,672/MM x 4.483 MM =
3. Annual Maintenance and Operation Cost (1)
a. GP/GT Well and appurtenances $175,000
b. Gas turbine Generator (1 % of capital cost) 20,000
4. Annual GP/GT Lease Payments (400 acres x $125/acre)
Total Projected Annual Cost=
Projected Cost
$1,350,000*
350,000
300,000
25,000
1,900,000
150000
$4,075,000
408000
$4,483,000
Service =
$514,075
195,000
50,000
$ 759,075
B. Projected Annual Production of Electrical Power =
0.9 x 3000 KW x 365 days x 24 hours/day = 23,652,000 lew hr.
C. Projected Unit Cost of Electrical Power Production = $759 075/year + 23,652,000 kwlhr/yr = $0.03209/kw hr
Round to $0.032IKWHr.
Notes: (1) Projected costs based on detailed estimates prepared for USDOE Grant
(2) Based on budgeting data provided by Stewart & Stevensen and Siemens Energy & Automation:
* If an existing GP/GT well, capped off, may be re-entered, the cost thereof would be $350,000, reducing total
capital costs to $3,383,000, annual debt service to $387,935 and hence, total cost of electrical power from
$0.032IKWHr to $0.0267IKWHr. Evidently, re-entry is critical to the lowest possible eleetricity cost.