### PNM SJGS BART Analysis - Cost Analysis (Draft)

Technology: SNCR/SCR Hybrid - SJGS Unit 1 Date:7/11/2007

Cost Item $ Remarks/Cost Basis

CAPITAL COST Direct Costs Purchased equipment costs Hybrid system scope: $15,753,000 B&V cost development from vendor quote Reagent delivery system Wall injectors and multiple nozzle lances Automatic injector and lance retract system Flue gas temperature, NOx monitors Reagent storage tank Single layer catalyst SCR system Ductwork modifications Electrical system upgrades $378,000 Actual price from similarly sized unit, escalated to 2007 dollars Instrumentation and control system $279,000 Actual price from similarly sized unit, escalated to 2007 dollars Subtotal capital cost (CC) $16,410,000 Gross Receipt Tax $1,015,000 (CC) X 6.2% Freight $821,000 (CC) X 5.0% Total purchased equipment cost (PEC) $18,246,000

Direct installation costs Foundation & supports $3,649,000 (PEC) X 20.0% Handling & erection $5,474,000 (PEC) X 30.0% Electrical $2,737,000 (PEC) X 15.0% Piping $456,000 (PEC) X 2.5% Insulation $1,825,000 (PEC) X 10.0% Painting $182,000 (PEC) X 1.0% Demolition $1,825,000 (PEC) X 10.0% Relocation $912,000 (PEC) X 5.0% Total direct installation costs (DIC) $17,060,000

Air preheater modifications $1,071,000 Scaled from a B&V project based unit size, using 0.7 scale factor Balanced draft conversion $13,366,000 Adjusted from a B&V balanced draft conversion project based on differences in scope Site preparation $1,000,000 Contingency for site unknowns, such as underground utilities Buildings $200,000 Contingency for general site building requirements Total direct costs (DC) = (PEC) + (DIC) $50,943,000

Indirect Costs Engineering $3,566,000 (DC) X 7.0% Owner's cost $2,547,000 (DC) X 5.0% Construction management $5,094,000 (DC) X 10.0% Construction indirect $11,222,000 B&V labor market review Start-up and spare parts $1,528,000 (DC) X 3.0% Performance test $509,000 (DC) X 1.0% Contingencies $10,189,000 (DC) X 20.0% Total indirect costs (IC) $34,655,000

Interest During Construction (IDC) $3,171,000 [(DC)+(IC)] X 7.41% 1 years (project time length X 1/2) Loss Generation during Outage (GEN) $15,667,000 5 weeks and 0.06095 $/kWh 12 weeks required for BDC, 7 weeks major outage available

Total Capital Investment (TCI) = (DC) + (IC) + (GEN) $104,436,000

ANNUAL COST Direct Annual Costs Fixed annual costs Operating labor $125,000 1 FTE and 124,862 $/year Estimated manpower level Maintenance labor & materials $1,528,000 (DC) X 3.0% Total fixed annual costs $1,653,000

Variable annual costs Urea $1,703,000 1,089 lb/hr and 420 $/ton Engineering estimate Water $1,762,000 252 gpm and 15.67 $/1,000 gal Engineering estimate Catalyst replacement $215,000 33 m3 and 6,500 $/m3 2 yr catalyst replacement rate Auxiliary power $32,000 70 kW and 0.06095 $/kWh Engineering estimate ID fan power $670,000 1,477 kW and 0.06095 $/kWh Engineering estimate Total variable annual costs $4,382,000

Total direct annual costs (DAC) $6,035,000

Indirect Annual Costs Cost for capital recovery $10,172,000 (TCI) X 9.74% CRF at 7.41% interest & 20 year life Total indirect annual costs (IDAC) $10,172,000

Total Annual Cost (TAC) = (DAC) + (IDAC) $16,207,000

### PNM SJGS BART Analysis - Cost Analysis (Draft)

Technology: SNCR/SCR Hybrid - SJGS Unit 2 Date:7/11/2007

Cost Item $ Remarks/Cost Basis

CAPITAL COST Direct Costs Purchased equipment costs Hybrid system scope: $15,753,000 B&V cost development from vendor quote Reagent delivery system Wall injectors and multiple nozzle lances Automatic injector and lance retract system Flue gas temperature, NOx monitors Reagent storage tank Single layer catalyst SCR system Ductwork modifications Electrical system upgrades $372,000 Actual price from similarly sized unit, escalated to 2007 dollars Instrumentation and control system $278,000 Actual price from similarly sized unit, escalated to 2007 dollars Subtotal capital cost (CC) $16,403,000 Gross Receipt Tax $1,015,000 (CC) X 6.2% Freight $820,000 (CC) X 5.0% Total purchased equipment cost (PEC) $18,238,000

Direct installation costs Foundation & supports $3,648,000 (PEC) X 20.0% Handling & erection $7,295,000 (PEC) X 40.0% Electrical $2,736,000 (PEC) X 15.0% Piping $456,000 (PEC) X 2.5% Insulation $1,824,000 (PEC) X 10.0% Painting $182,000 (PEC) X 1.0% Demolition $1,824,000 (PEC) X 10.0% Relocation $912,000 (PEC) X 5.0% Total direct installation costs (DIC) $18,877,000

Air preheater modifications $1,071,000 Scaled from a B&V project based unit size, using 0.7 scale factor Balanced draft conversion $13,366,000 Adjusted from a B&V balanced draft conversion project based on differences in scope Site preparation $1,000,000 Contingency for site unknowns, such as underground utilities Buildings $200,000 Contingency for general site building requirements Total direct costs (DC) = (PEC) + (DIC) $52,752,000

Indirect Costs Engineering $3,693,000 (DC) X 7.0% Owner's cost $2,638,000 (DC) X 5.0% Construction management $5,275,000 (DC) X 10.0% Construction indirect $13,041,000 B&V labor market review Start-up and spare parts $1,583,000 (DC) X 3.0% Performance test $528,000 (DC) X 1.0% Contingencies $10,550,000 (DC) X 20.0% Total indirect costs (IC) $37,308,000

Interest During Construction (IDC) $3,337,000 [(DC)+(IC)] X 7.41% 1 years (project time length X 1/2) Loss Generation during Outage (GEN) $15,231,000 5 weeks and 0.06095 $/kWh 12 weeks required for BDC, 7 weeks major outage available

Total Capital Investment (TCI) = (DC) + (IC) + (GEN) $108,628,000

ANNUAL COST Direct Annual Costs Fixed annual costs Operating labor $125,000 1 FTE and 124,862 $/year Estimated manpower level Maintenance labor & materials $1,583,000 (DC) X 3.0% Total fixed annual costs $1,708,000

Variable annual costs Urea $1,703,000 1,089 lb/hr and 420 $/ton Engineering estimate Water $1,762,000 252 gpm and 15.67 $/1,000 gal Engineering estimate Catalyst replacement $215,000 33 m3 and 6,500 $/m3 2 yr catalyst replacement rate Auxiliary power $32,000 70 kW and 0.06095 $/kWh Engineering estimate ID fan power $670,000 1,477 kW and 0.06095 $/kWh Engineering estimate Total variable annual costs $4,382,000

Total direct annual costs (DAC) $6,090,000

Indirect Annual Costs Cost for capital recovery $10,580,000 (TCI) X 9.74% CRF at 7.41% interest & 20 year life Total indirect annual costs (IDAC) $10,580,000

Total Annual Cost (TAC) = (DAC) + (IDAC) $16,670,000

### PNM SJGS BART Analysis - Cost Analysis (Draft)

Technology: SNCR/SCR Hybrid - SJGS Unit 3 Date:7/11/2007

Cost Item $ Remarks/Cost Basis

CAPITAL COST Direct Costs Purchased equipment costs Hybrid system scope: $23,680,000 B&V cost development from vendor quote Reagent delivery system Wall injectors and multiple nozzle lances Automatic injector and lance retract system Flue gas temperature, NOx monitors Reagent storage tank Single layer catalyst SCR system Ductwork modifications Electrical system upgrades $484,000 Actual price from similarly sized unit, escalated to 2007 dollars Instrumentation and control system $291,000 Actual price from similarly sized unit, escalated to 2007 dollars Subtotal capital cost (CC) $24,455,000 Gross Receipt Tax $1,513,000 (CC) X 6.2% Freight $1,223,000 (CC) X 5.0% Total purchased equipment cost (PEC) $27,191,000

Direct installation costs Foundation & supports $5,438,000 (PEC) X 20.0% Handling & erection $10,876,000 (PEC) X 40.0% Electrical $4,079,000 (PEC) X 15.0% Piping $680,000 (PEC) X 2.5% Insulation $2,719,000 (PEC) X 10.0% Painting $272,000 (PEC) X 1.0% Demolition $2,719,000 (PEC) X 10.0% Relocation $1,360,000 (PEC) X 5.0% Total direct installation costs (DIC) $28,143,000

Air preheater modifications $8,685,000 Based on a budgetary quote received for the project Balanced draft conversion $17,122,000 Adjusted from a B&V balanced draft conversion project based on differences in scope Site preparation $1,000,000 Contingency for site unknowns, such as underground utilities Buildings $200,000 Contingency for general site building requirements Total direct costs (DC) = (PEC) + (DIC) $82,341,000

Indirect Costs Engineering $5,764,000 (DC) X 7.0% Owner's cost $4,117,000 (DC) X 5.0% Construction management $8,234,000 (DC) X 10.0% Construction indirect $19,442,000 B&V labor market review Start-up and spare parts $2,470,000 (DC) X 3.0% Performance test $823,000 (DC) X 1.0% Contingencies $16,468,000 (DC) X 20.0% Total indirect costs (IC) $57,318,000

Interest During Construction (IDC) $5,174,000 [(DC)+(IC)] X 7.41% 1 years (project time length X 1/2) Loss Generation during Outage (GEN) $23,674,000 5 weeks and 0.06095 $/kWh 12 weeks required for BDC, 7 weeks major outage available

Total Capital Investment (TCI) = (DC) + (IC) + (GEN) $168,507,000

ANNUAL COST Direct Annual Costs Fixed annual costs Operating labor $125,000 1 FTE and 124,862 $/year Estimated manpower level Maintenance labor & materials $2,470,000 (DC) X 3.0% Total fixed annual costs $2,595,000

Variable annual costs Urea $2,641,000 1,689 lb/hr and 420 $/ton Engineering estimate Water $2,658,000 380 gpm and 15.67 $/1,000 gal Engineering estimate Catalyst replacement $270,000 42 m3 and 6,500 $/m3 2 yr catalyst replacement rate Auxiliary power $32,000 70 kW and 0.06095 $/kWh Engineering estimate ID fan power $997,000 2,197 kW and 0.06095 $/kWh Engineering estimate Total variable annual costs $6,598,000

Total direct annual costs (DAC) $9,193,000

Indirect Annual Costs Cost for capital recovery $16,413,000 (TCI) X 9.74% CRF at 7.41% interest & 20 year life Total indirect annual costs (IDAC) $16,413,000

Total Annual Cost (TAC) = (DAC) + (IDAC) $25,606,000

### PNM SJGS BART Analysis - Cost Analysis (Draft)

Technology: SNCR/SCR Hybrid - SJGS Unit 4 Date:7/11/2007

Cost Item $ Remarks/Cost Basis

CAPITAL COST Direct Costs Purchased equipment costs Hybrid system scope: $23,680,000 B&V cost development from vendor quote Reagent delivery system Wall injectors and multiple nozzle lances Automatic injector and lance retract system Flue gas temperature, NOx monitors Reagent storage tank Single layer catalyst SCR system Ductwork modifications Electrical system upgrades $484,000 Similar scope to SCR modifications Instrumentation and control system $291,000 Similar scope to SCR modifications Subtotal capital cost (CC) $24,455,000 Gross Receipt Tax $1,513,000 (CC) X 6.2% Freight $1,223,000 (CC) X 5.0% Total purchased equipment cost (PEC) $27,191,000

Direct installation costs Foundation & supports $5,438,000 (PEC) X 20.0% Handling & erection $8,157,000 (PEC) X 30.0% Electrical $4,079,000 (PEC) X 15.0% Piping $680,000 (PEC) X 2.5% Insulation $2,719,000 (PEC) X 10.0% Painting $272,000 (PEC) X 1.0% Demolition $2,719,000 (PEC) X 10.0% Relocation $1,360,000 (PEC) X 5.0% Total direct installation costs (DIC) $25,424,000

Air preheater modifications $8,685,000 Based on a budgetary quote received for the project Balanced draft conversion $17,122,000 Adjusted from a B&V balanced draft conversion project based on differences in scope Site preparation $1,000,000 Contingency for site unknowns, such as underground utilities Buildings $200,000 Contingency for general site building requirements Total direct costs (DC) = (PEC) + (DIC) $79,622,000

Indirect Costs Engineering $5,574,000 (DC) X 7.0% Owner's cost $3,981,000 (DC) X 5.0% Construction management $7,962,000 (DC) X 10.0% Construction indirect $16,723,000 B&V labor market review Start-up and spare parts $2,389,000 (DC) X 3.0% Performance test $796,000 (DC) X 1.0% Contingencies $15,924,000 (DC) X 20.0% Total indirect costs (IC) $53,349,000

Interest During Construction (IDC) $4,927,000 [(DC)+(IC)] X 7.41% 1 years (project time length X 1/2) Loss Generation during Outage (GEN) $23,674,000 5 weeks and 0.06095 $/kWh 12 weeks required for BDC, 7 weeks major outage available

Total Capital Investment (TCI) = (DC) + (IC) + (GEN) $161,572,000

ANNUAL COST Direct Annual Costs Fixed annual costs Operating labor $125,000 1 FTE and 124,862 $/year Estimated manpower level Maintenance labor & materials $2,389,000 (DC) X 3.0% Total fixed annual costs $2,514,000

Variable annual costs Urea $2,641,000 1,689 lb/hr and 420 $/ton Engineering estimate Water $2,658,000 380 gpm and 15.67 $/1,000 gal Engineering estimate Catalyst replacement $270,000 42 m3 and 6,500 $/m3 2 yr catalyst replacement rate Auxiliary power $32,000 70 kW and 0.06095 $/kWh Engineering estimate ID fan power $997,000 2,197 kW and 0.06095 $/kWh Engineering estimate Total variable annual costs $6,598,000

Total direct annual costs (DAC) $9,112,000

Indirect Annual Costs Cost for capital recovery $15,737,000 (TCI) X 9.74% CRF at 7.41% interest & 20 year life Total indirect annual costs (IDAC) $15,737,000

Total Annual Cost (TAC) = (DAC) + (IDAC) $24,849,000