Enron is evaluating whether to build the Escondido Power Plant, a 500 MW
combined cycle natural gas plant in Douglas, Arizona, at a cost of $250
million. The plant would sell energy under a 20-year power purchase
agreement (PPA). Construction of the plant, expected to be completed in
18 months, would be financed with a loan from Credit Suisse First Boston
(CF First Boston). During construction, interest would be capitalized.
Upon completion of construction, the plant would be financed with 60%
debt and 40% equity. Enron and General Electric Capital (GE) would each
provide 50% of the equity. At the end of the 20-year period, the plant
would be sold at book value.