More numbers on the Value of Point Lepreau

My previous post on the value of Pt. Lepreau contained data taken from Hydro Quebec Strategic Plan. Keir seems to be saying that Pt. Lepreau is not worth $10 Billion Dollars.

Maybe not, but it is worth something to HQ.

Lets assume the refurbishment stays on budget. Actually I guess it doesn't matter how much the refurb costs. HQ is only paying $1.4 billion.

The projected run time is 28 years. $1.4 billion dollars amortized over 28 years at an interest rate of 6% is an annual payment of $104,000,000 dollars.

Working backwards from the HQ information presented for Lepreau's sister station Gentilly 2, the capacity factor seems to work out to about 86%.

A 635 MW net output multiplied by 365 days per years x 24 hours per day x an 86% capacity factor is 4,810,000 MW hours per year. This compares with the historical number printed in the NB Power annual reports.

4,810,000 MW hours per years multiplied by the rate that HQ will receive ($73.50 MW hr)
gives an annual revenue of $ 353,600,000 dollars.

Multipled by 28 years give a value of $9,902,000,000 dollars. (that's 9.9 billion) Similair number to what HQ presents in their strategic report for Gentilly 2. All in current dollars.

Nuclear fuel costs seem to be less than $20 milion per year. see page 28 . http://www.nbpower.com/html/en/about/publications/annual/Annual_Report07-08-.pdf

Total cost of Lepreau decommisioning and used fuel liabilites is shown as $1.5 billion dollars. page 52 of same document. Assuming I'm reading it correctly.

Lets say property taxes are $1.1 per hundred like your house??, valued on the $1.4 billion purchase price. This is $15.4 million per year.

Operation and maintainence expenses. Thought I seen this somewhere at about 66 million per years, but location eludes me now. Lets use the 800 employess getting paid on average about $80 K per years. That is $64,000,000 in salaries. Lets add half that again for other regulatory stuff, toilet paper, pens, nuclear reactors parts, etc. So lets make O&M a $100 million per year.

So on a yearly basis, we have $353 million revenue - $104 interest charges - $100 million O&M - $20 million fuel - $54 million per year put away for decommisioning and waste fuel storage costs - $16 property taxes.

Total yearly profit projected at $59 million. Total over 28 years is $1.65 billion.

Does the risk of Lepreau not running, or of having technical issues after it is running (HQ risk), versus the risk of the station never completing the refurbishment (NB Gov risk) equal 1.65 billion dollars? Maybe if anyone thought selling was a good idea, maybe the purchase price should have been the refurbishment cost. Then the risk would truly be taken off of NB Power and New Brunswickers.

As a side note, based on the above analysis, the breakeven point for Pt. Lepreau to generate electricity if the refurbishment cost is $1.4 Billion, is 6.1 cents per kw hour. Lower than NB Power's current industrial rate, and therefore seemingly profitable.

Of course, I'm not an economist, or own a large corporation, I'm just doing my own due diligence.
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