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5.1.4 Pricing Summary

Ancillary service values and in-plant parasitic losses are quite small and were ignored for this study.
Results were combined to provide comprehensive approach to developing indicative forward market
values for each node. Factors included were that:
" Capacity factors were used to develop total energy production for each season (both on peak/off
peak),
" Total wind plant energy production was multiplied by applicable seasonal on/off peak curve to
produce revenue from seasonal energy production for each set of turbines comprising a 100 MW
plant,
" All on/off peak values per seasons were summed to produce a total annual revenue stream for
forecasted energy production at each location,
"  Capacity revenues were then added to the total annual revenue stream for energy production
producing total anticipated revenue for each location, taking into account the effects of on/off
peak, seasonal and wind patterns to produce an indicatively expected market value of electricity
at each location.
These annual energy production estimates and prices were then input to the energy project finance models
that are discussed in Sections 6 and Section 7 of this report. In the economic analysis of projects, many
factors are included in determining project economic viability. However the pricing differentials between
different injection points are very important.
Due to the value difference alone it appears that the Delmarva coastal sites and offshore would have a
price advantage over Fentress. However Delmarva transmission line capacity will quickly become a
limiting factor, although moving power in a westward direction is helpful in reducing congestion.
The price differential is even more dramatic when comparing coastal to ridgeline sites. There is a $22.13
per MWh difference between DPL and Cloverdale nodes during the summer on-peak periods, as shown in
Table 5-1 (as $11.74 - 10.39). It is important to keep in mind there are other factors to consider in
evaluating project economic barriers as will be discussed in Section 6 and Section 7 of this report.
Barrier - Transmission line capacity is not a barrier for initial projects, but can become a barrier as
wind market penetration increases, leading to higher costs.
Mitigation Options - The approach used in Europe and in some states in the U.S. is to clearly
commit to build the line to the projects with costs being shared by the grid system.

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Mid-Atlantic Wind - Overcoming the Challenges