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					Table 1 - Privately-Owned Financial Analysis
Lake County Resources Biomass Power Plant
            Parameter            Input Value                           Comments                    Summary of Results
General Plant Design Information                                                                    Net Present Value (NPV)
Biomass Plant Capacity (Lb/Hr, wet)                      50,000      Design Criteria                        ($468,064)
                     (Ton/Day, wet)                       600        Calculated                  Internal Rate of Return (IRR)
Biomass Ash Production (Lb/Hr)                            240        Design Criteria                          14.1%
                     (Ton/Day)                            2.88       Calculated                       Capital Cost ($2004)           Input Value      Comments
                                                                                           Total EPC Contract ($)                    $34,025,000   Cost Estimate
Gross Power Output (kW)                                  14,114      LK-3 Heat Balance                          ($/kW)                  $2,411     Calculated
Gross Plant Heat Rate, HHV (Btu/kW-Hr)                   15,057      Calculated                                 ($/Ton/Day)            $56,708     Calculated
Net Power Output(kW)                                     12,673      LK-3 Heat Balance     Project Financing                           $680,500    Allowance
Net Plant Heat Rate, HHV (Btu/kW-Hr)                     16,769      Calculated            Interest During Construction               $2,722,000   Allowance
                                                                                           Plant Licenses/Environmental Permits        $680,500    Allowance
Process Steam Output (Lb/Hr)                             24,000      Design Criteria       Owner's Engineer Cost                       $680,500    Allowance
                                                                                           WW Metering Installation                    $50,000     Allowance
Biomass Fuel HHV (Btu/Lb, wet)                          4,250.3      Design Criteria       Electrical Interconnection Studies          $200,000    Allowance
Biomass Moisture Content (wt.%)                          50%         Design Criteria       69kV Transmission Line Interconnect         $900,000    3 miles
Biomass Ash Content (wt.%, wet)                         0.48%        Calculated            Land Acquisitions/Right-of-Ways             $340,250    Allowance
                                                                                           Additional Owner's Costs                   $1,701,250   Allowance
Annual Plant Capacity Factor (%)                         80%         Assumed               Working Capital                             $680,500    Allowance
Annual Operating Hours                                   7,008       Calculated            Total Installed Cost ($)                  $41,980,000   Calculated
                                                                                           Federal/State Capital Cost Support ($)    $10,000,000   Assumed
Economic Factors                                                                           Total Capital Cost Requirement ($)        $31,980,000 Calculated
Discount Rate (%)                                        15.0%       Assumed
Equity Financed (%)                                      80.0%       Assume 4:1 Debt/Equity Ratio
Interest Rate on Debt (%)                                6.0%        Assume Tax Exempt Financing
Federal Income Tax Rate A (%)                            39.0%       Taxable Income of $100k to $335k
Federal Income Tax Rate B (%)                            34.0%       Taxable Income of $335k to $10M
State Excise Tax Rate (%)                                6.6%        State of Oregon
Equity Amortization Period (Years)                         10        Assumed

State Renewable Energy Income Tax Credit                             Business Energy Tax Credit (BETC)
Eligible Project Costs ($)                            $10,000,000    Incremental cost of system beyond standard practice
State Income Tax Credit ($)                            3,500,000     35% of eligible project costs

Operating Costs
O&M Cost ($2004)
O&M Cost ($/kW-Hr)                                       $0.010      Assumed
Annual O&M Cost Escalation Rate (%)                       3.0%       Assumed
Biomass Fuel Cost ($2004)
Dry Field Biomass Fuel Cost, delivered ($/Ton, dry)      $40.00      Design Criteria
Wet Field Biomass Fuel Cost, delivered ($/Ton, wet)      $20.00      Calculated
                              ($/MMBtu, HHV)              $2.35      Calculated

Dry Sawmill Hogfuel & Shavings (Tons/Yr)                 24,150      Assumed
Dry Sawmill Fuel Cost, delivered ($/Ton, dry)            $25.00      Assumed
Wet Sawmill Fuel Cost, delivered ($/Ton, wet)            $12.50      Calculated
                               ($/MMBtu, HHV)             $1.47      Calculated

Annual Biomass Fuel Cost Escalation Rate (%)             3.0%        Assumed

Federal/State Forest Thinning Subsidy ($/Ton, wet)       $1.25       Assumed

U.S. Forest Service Lands - Thinning (Acres/Yr)          4,000       Assumed for forest thinning
U.S. Forest Service Lands - Thinning ($/Acre)            $250        Assumed

U.S. Bureau of Land Mgmt. - Thinning (Acres/Yr)          3,140       Assumed for juniper removal
U.S. Bureau of Land Mgmt. - Thinning ($/Acre)            $100        Assumed
Ash Disposal Cost ($2004)
Ash Disposal Cost ($/Ton)                                $50.00      Design Criteria
Annual Ash Disposal Cost Escalation Rate (%)              3.0%       Assumed
Wastewater (WW) Disposal Cost ($2004)
WW Disposal Cost ($/1000 Gallons)                        $2.00       Cost to discharge to a POTW
WW Disposal Rate (Gpm)                                    70         Design Criteria
Annual WW Disposal Cost Escalation Rate (%)              3.0%        Assumed

Revenue
Export Process Steam Revenue ($2004)
Process Steam Price ($/1000 Lb)                          $4.50       Assumed
Annual Process Steam Price Escalation Rate (%)           3.0%        Assumed
Export Power Sales Revenue ($2004)
Electric Power Price ($/kW-Hr)                        Avoided Cost   See PacifiCorp Avoided Cost Sheet
Annual Power Price Escalation Rate (%)                    3.0%       Assumed
Renewable Energy Production Incentive ($2004)
Renewable Energy Production Incentive ($/kW-Hr)          $0.018      Assumed
Carbon Emission Reduction Credit ($2004)
Carbon Emission Reduction Credit ($)                      $46,920    Assume 22 metric tons/acre at $4/ton = $1,032,000 annual credit w/$250,000 annual
                                                                      cost for monitoring. 6% is calculated for biomass displacement and balance to landowner.
Annual Carbon Credit Escalation Rate (%)                 3.0%        Assumed


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Table 3 - PacifiCorp Avoided Costs
Below are the annual avoided cost prices for Oregon QFs for project less than 1 MW. These prices have been suspended and are not reflective of the prices
that PacifiCorp would offer in a Power Purchase Agreement for this project.
                                         Exhibit 1                                                                                    Exhibit 2
                              On- & Off- Peak Energy Prices                                                                     Total Avoided Cost

            Avoided Firm            Total              Capacity Cost     On-Peak       Off-Peak                 Avoided Firm       Total                    Total Avoided Costs
Year        Capacity               Avoided             Allocated to      4,993         3,767          Year      Capacity          Avoided                At Stated Capacity Factor
            Costs                Energy Cost           On-Peak Hours                                            Costs           Energy Cost              75%         85%       80%
               ($/kW-yr)          ($/MWH)              ($/MWH)           ($/MWH)       ($/MWH)                     ($/kW-yr)     ($/MWH)              ($/MWH) ($/MWH) ($/MWH)
            (a)                      (b)               (c)               (d)           (e)                      (a)                 (b)              (c)         (d)       (e)

                                                        (a) /(8.76 x                                                                                  (b)+((a)/8. (b)+((a)/8. (b)+((a)/8.
                                                       85% x 57%)        (b) + (c)     (b)                                                           76 x 0.75) 76 x 0.85) 76 x 0.95)
Avoided Resource                                                                                      Avoided Resource
     2003         $0.00         $23.40            -1             $0.00        $23.40         $23.40        2003         $0.00   $23.40          -1       $23.40      $23.40      $23.40
     2004        $17.60         $24.60                           $4.15        $28.74         $24.60        2004        $17.60   $24.60                   $27.28      $26.96      $27.11
     2005        $18.04         $28.74                           $4.25        $32.99         $28.74        2005        $18.04   $28.74                   $31.49      $31.16      $31.31
     2006        $18.49         $28.31                           $4.36        $32.67         $28.31        2006        $18.49   $28.31                   $31.12      $30.79      $30.95
Combined Cycle                                                                                        Combined Cycle
     2007        $75.81         $33.10                          $17.86        $50.96         $33.10        2007        $75.81   $33.10                   $44.64      $43.28      $43.92
     2008        $77.71         $33.79                          $18.31        $52.10         $33.79        2008        $77.71   $33.79                   $45.62      $44.23      $44.88
     2009        $79.65         $33.27                          $18.77        $52.04         $33.27        2009        $79.65   $33.27                   $45.39      $43.97      $44.64
     2010        $81.64         $31.05                          $19.24        $50.28         $31.05        2010        $81.64   $31.05                   $43.48      $42.01      $42.70
     2011        $83.69         $30.06                          $19.72        $49.78         $30.06        2011        $83.69   $30.06                   $42.80      $41.30      $42.00
     2012        $85.78         $31.00                          $20.21        $51.21         $31.00        2012        $85.78   $31.00                   $44.06      $42.52      $43.24
     2013        $87.92         $31.94                          $20.72        $52.66         $31.94        2013        $87.92   $31.94                   $45.32      $43.75      $44.49
     2014        $90.12         $29.01                          $21.23        $50.25         $29.01        2014        $90.12   $29.01                   $42.73      $41.11      $41.87
     2015        $92.37         $29.66                          $21.76        $51.43         $29.66        2015        $92.37   $29.66                   $43.72      $42.07      $42.84
     2016        $94.68         $31.53                          $22.31        $53.84         $31.53        2016        $94.68   $31.53                   $45.94      $44.25      $45.04
     2017        $97.05         $33.26                          $22.87        $56.12         $33.26        2017        $97.05   $33.26                   $48.03      $46.29      $47.11
     2018        $99.48         $34.17                          $23.44        $57.61         $34.17        2018        $99.48   $34.17                   $49.31      $47.53      $48.37
     2019      $101.96          $35.16                          $24.02        $59.19         $35.16        2019       $101.96   $35.16                   $50.68      $48.85      $49.71
     2020      $104.51          $36.21                          $24.62        $60.83         $36.21        2020       $104.51   $36.21                   $52.12      $50.25      $51.12
     2021      $107.12          $36.31                          $25.24        $61.55         $36.31        2021       $107.12   $36.31                   $52.61      $50.70      $51.60
     2022      $109.80          $37.29                          $25.87        $63.16         $37.29        2022       $109.80   $37.29                   $54.00      $52.04      $52.96
     2023      $112.55          $38.31                          $26.52        $64.83         $38.31        2023       $112.55   $38.31                   $55.44      $53.43      $54.37
     2024      $115.36          $39.37                          $27.18        $66.55         $39.37        2024       $115.36   $39.37                   $56.93      $54.86      $55.83
     2025      $118.25          $40.54                          $27.86        $68.40         $40.54        2025       $118.25   $40.54                   $58.54      $56.42      $57.41
     2026      $121.20          $41.71                          $28.56        $70.27         $41.71        2026       $121.20   $41.71                   $60.16      $57.99      $59.00
     2027      $124.23          $42.89                          $29.27        $72.16         $42.89        2027       $124.23   $42.89                   $61.80      $59.57      $60.62

Federal Corporate Income Tax Rates--2004

          Taxable income over                  Not over            Tax rate
             $          0                 $       50,000              15%
                   50,000                         75,000              25%
                   75,000                        100,000              34%
                  100,000                        335,000              39%
                  335,000                     10,000,000              34%
               10,000,000                     15,000,000              35%
               15,000,000                     18,333,333              38%
               18,333,333                     ..........              35%
Table 1 - Privately-Owned Financial Analysis
                  Year -->                          2005       2006         2007          2008          2009         2010           2011          2012          2013          2014          2015          2016          2017         2018         2019         2020         2021         2022         2023         2024         2025         2026
                             From Plant Startup      -1          0           1              2             3            4              5             6             7             8             9            10            11           12           13           14           15           16           17           18           19           20
                                 From Present        2           3           4              5             6            7              8             9            10            11            12            13            14           15           16           17           18           19           20           21           22           23
PLANT OPERATION
Annual Wet Field Biomass Fuel Quantity (Tons)                                126,900       126,900       126,900       126,900       126,900       126,900       126,900       126,900       126,900       126,900       126,900      126,900      126,900      126,900      126,900      126,900      126,900      126,900      126,900      126,900
Annual Wet Sawmill Fuel Quantity (Tons)                                       48,300        48,300        48,300        48,300        48,300        48,300        48,300        48,300        48,300        48,300        48,300       48,300       48,300       48,300       48,300       48,300       48,300       48,300       48,300       48,300
Annual Ash Quantity (Tons)                                                       841           841           841           841           841           841           841           841           841           841           841          841          841          841          841          841          841          841          841          841
Annual Process Steam Quantity (1000 Lb)                                      168,192       168,192       168,192       168,192       168,192       168,192       168,192       168,192       168,192       168,192       168,192      168,192      168,192      168,192      168,192      168,192      168,192      168,192      168,192      168,192
Annual Net Power Generation (kW/Hr)                                       88,812,384    88,812,384    88,812,384    88,812,384    88,812,384    88,812,384    88,812,384    88,812,384    88,812,384    88,812,384    88,812,384   88,812,384   88,812,384   88,812,384   88,812,384   88,812,384   88,812,384   88,812,384   88,812,384   88,812,384
Annual PacifiCorp Avoided Cost ($/kW-Hr)                                      0.0439        0.0449        0.0446        0.0427        0.0420        0.0432        0.0445        0.0419        0.0428        0.0450        0.0471       0.0484       0.0497       0.0511       0.0516       0.0530       0.0544       0.0558       0.0574       0.0590
REVENUE
Federal/State Forest Thinning Subsidy ($)                                    173,334       178,534       183,890       189,407       195,089       200,941       206,970       213,179       219,574       226,161       232,946      239,935      247,133      254,547      262,183      270,048      278,150      286,494      295,089      303,942
USFS Land Thinning Revenue ($)                                             1,092,727     1,125,509     1,159,274     1,194,052     1,229,874     1,266,770     1,304,773     1,343,916     1,384,234     1,425,761     1,468,534    1,512,590    1,557,967    1,604,706    1,652,848    1,702,433    1,753,506    1,806,111    1,860,295    1,916,103
USBLM Land Thinning Revenue ($)                                              343,116       353,410       364,012       374,932       386,180       397,766       409,699       421,990       434,649       447,689       461,120      474,953      489,202      503,878      518,994      534,564      550,601      567,119      584,132      601,656
Carbon Emission Reduction Credit ($)                                          51,271        52,809        54,393        56,025        57,706        59,437        61,220        63,057        64,948        66,897        68,904       70,971       73,100       75,293       77,552       79,878       82,275       84,743       87,285       89,904
Export Process Steam Sales ($)                                               827,046       851,857       877,413       903,735       930,847       958,773       987,536     1,017,162     1,047,677     1,079,107     1,111,480    1,144,825    1,179,169    1,214,545    1,250,981    1,288,510    1,327,166    1,366,981    1,407,990    1,450,230
Renewable Energy Production Incentive ($)                                  1,598,623     1,598,623     1,598,623     1,598,623     1,598,623     1,598,623     1,598,623     1,598,623     1,598,623     1,598,623           -            -            -            -            -            -            -            -            -            -
Export Power Sales ($)                                  -          -       4,262,105     4,486,041     4,595,586     4,528,143     4,587,803     4,864,744     5,154,999     4,997,404     5,266,706     5,703,235     6,144,073    6,497,222    6,878,087    7,285,932    7,573,859    8,007,069    8,467,240    8,955,604    9,485,710   10,041,018
                                 Total Revenue                             8,348,222     8,646,782     8,833,190     8,844,917     8,986,122     9,347,054     9,723,820     9,655,330    10,016,411    10,547,473     9,487,056    9,940,495   10,424,658   10,938,900   11,336,417   11,882,503   12,458,937   13,067,052   13,720,501   14,402,853
OPERATING EXPENSES
Field Biomass Fuel Cost ($)                             -          -       2,773,341     2,856,541     2,942,238     3,030,505     3,121,420     3,215,062     3,311,514     3,410,860     3,513,186     3,618,581     3,727,139    3,838,953    3,954,121    4,072,745    4,194,927    4,320,775    4,450,398    4,583,910    4,721,428    4,863,070
Sawmill Biomass Fuel Cost ($)                           -          -         659,734       679,526       699,912       720,909       742,536       764,812       787,757       811,390       835,731       860,803       886,627      913,226      940,623      968,842      997,907    1,027,844    1,058,679    1,090,440    1,123,153    1,156,847
Ash Disposal Cost ($)                                   -          -          45,947        47,325        48,745        50,208        51,714        53,265        54,863        56,509        58,204        59,950        61,749       63,601       65,509       67,475       69,499       71,584       73,731       75,943       78,222       80,568
WW Disposal Cost ($)                                    -          -          64,326        66,256        68,243        70,291        72,399        74,571        76,808        79,113        81,486        83,931        86,448       89,042       91,713       94,465       97,299      100,217      103,224      106,321      109,510      112,796
Operating & Maintenance Labor Cost ($)                  -          -         970,477       999,591     1,029,579     1,060,466     1,092,280     1,125,049     1,158,800     1,193,564     1,229,371     1,266,252     1,304,240    1,343,367    1,383,668    1,425,178    1,467,933    1,511,971    1,557,331    1,604,050    1,652,172    1,701,737
Interest on Debt ($)                                    -          -      $1,535,040     1,418,580     1,295,132     1,164,277     1,025,571      $878,542       722,692       557,491       382,377       196,757             0            0            0            0            0            0            0            0            0            0
                      Total Operating Expenses                             6,048,865     6,067,819     6,083,848     6,096,655     6,105,920     6,111,302     6,112,435     6,108,926     6,100,356     6,086,275     6,066,203    6,248,189    6,435,635    6,628,704    6,827,565    7,032,392    7,243,364    7,460,664    7,684,484    7,915,019
EQUITY INVESTMENT                                           (6,396,000)
Straight-Line Depreciation ($)                                             3,198,000     3,198,000     3,198,000     3,198,000     3,198,000     3,198,000     3,198,000     3,198,000     3,198,000     3,198,000             0            0            0            0            0            0            0            0            0            0

Operating Income ($)                                                        (898,643)     (619,037)     (448,658)     (449,738)     (317,798)       37,752      413,385       348,405       718,056      1,263,198     3,420,853    3,692,306    3,989,024    4,310,196    4,508,852    4,850,111    5,215,573    5,606,387    6,036,016    6,487,834
State Excise Taxes ($)                                                             0             0             0             0             0         2,492       27,283        22,995        47,392         83,371       225,776      243,692      263,276      284,473      297,584      320,107      344,228      370,022      398,377      428,197
State Renewable Energy Income Tax Credit ($)                                       0             0             0             0             0             0            0             0             0              0       225,776      243,692      263,276      284,473      297,584      320,107      344,228      370,022            0            0
Subtotal ($)                                                                (898,643)     (619,037)     (448,658)     (449,738)     (317,798)       35,260      386,101       325,410       670,664      1,179,827     3,420,853    3,692,306    3,989,024    4,310,196    4,508,852    4,850,111    5,215,573    5,606,387    5,637,639    6,059,637

Federal Income Taxes ($)                                                         0               0             0             0             0        13,751       150,580       126,910       261,559       460,132     1,334,133    1,439,999    1,555,719    1,680,976    1,758,452    1,891,543    2,034,074    2,186,491    2,198,679    2,363,259
Net Income ($)                                                            (898,643)       (619,037)     (448,658)     (449,738)     (317,798)       21,509       235,522       198,500       409,105       719,694     2,086,720    2,252,307    2,433,304    2,629,220    2,750,399    2,958,568    3,181,500    3,419,896    3,438,960    3,696,379
Repayment of Debt Principal ($)                                         $1,941,006      $2,057,466    $2,180,914    $2,311,769    $2,450,475    $2,597,504    $2,753,354    $2,918,555    $3,093,668    $3,279,289             0            0            0            0            0            0            0            0            0            0
Depreciation ($)                                                         3,198,000       3,198,000     3,198,000     3,198,000     3,198,000     3,198,000     3,198,000     3,198,000     3,198,000     3,198,000             0            0            0            0            0            0            0            0            0            0
Net Cash Flow ($)                                           (6,396,000)    358,351         521,497       568,428       436,493       429,726       622,005       680,168       477,945       513,437       638,406     2,086,720    2,252,307    2,433,304    2,629,220    2,750,399    2,958,568    3,181,500    3,419,896    3,438,960    3,696,379
Cumulative Cash Flow ($)                                    (6,396,000) (6,037,649)     (5,516,152)   (4,947,724)   (4,511,231)   (4,081,504)   (3,459,500)   (2,779,332)   (2,301,387)   (1,787,950)   (1,149,544)      937,176    3,189,483    5,622,787    8,252,007   11,002,406   13,960,974   17,142,474   20,562,370   24,001,330   27,697,709
Debt Service Cover Ratio (DSCR)                                               1.10            1.15          1.16          1.13          1.12          1.18          1.20          1.14          1.15          1.18
FINANCIAL SUMMARY:                                Net Present Value (NPV) =                                         ($468,064)
                                                  Internal Rate of Return (IRR) =                                       14.1%




      32d3ad87-1ae2-47dc-9af5-541b224da8e2.xls / GDB                                                                                                                          3 of 3                                                                                                                                                8/22/2011 6:18 PM

				
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