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5 Year Wrap Contract with PPA Option 24 Year PPA with Wrap Contract <br />1. 100°,6 gas based pricing if PPA option not selecled 1. 70% coal & 30% gas based wholesale pricing <br />2. Takes advantage of financial crisis/recession 8 resulting 2. Takes advantage of recent gas price decline for 30 % of <br />decline in gas prices load for 5 years while maintaining stable coal prices for 70% <br />of electric needs for additional 19 years <br />3. Keeps commodity (energy price) below 8¢ for 5 years 3. Keeps commodity (energy price) near 8¢ for 5 years and <br />likely maintains discount to market rate for decades <br />4. Reflects competitive market pricing <br />5. Pricing for energy needs in 2014 and beyond is uncertain <br />and subject to natural gas supply 8 demand, global <br />economics and weather - high volatility <br />6. While pricing is favorable to Cities, the contract will not be <br />noticed by the market or policy makers <br />4. Reflects pricing and reliability superior to what is generally <br />found in the competitive retail market <br />5. Stable, predictable pricing for 2014 and beyond - 55% <br />less volatile than complete reliance on pricing based on <br />natural gas <br />6. The fixed price, long-term nature of the contrad could <br />have a major influence on the market and policy makers and <br />hopefully offer hope to residentiai customers trapped with <br />reliance on short-term, highly votatile prices <br />Yraridireg S(ahilrry in F.irc•rxs Gnsts In Tvsas Crdes <br />1. Diversity of fuel source <br />2. Reduces volatility associated with natural gas <br />3. Increased budget stability <br />4. Projected long term ($1 billion) savings <br />5. Market innovation <br />*Based on 2009 indicative prices <br />Slahility in Enrr,u Costs ta Trxa~ C7lre+ <br />- (W0171i <br />7 <br />