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

Technology: Selective Catalytic Reduction - SJGS Unit 1 Date: 7/11/2007

Cost Item $ Remarks/Cost Basis

CAPITAL COST
Direct Costs Purchased equipment costs Anhydrous Ammonia Injection System $437,000 Scaled from B&V database based on ammonia flow, using 0.6 scale factor Anhydrous Ammonia Vaporization System $436,000 Scaled from B&V database based on ammonia flow, using 0.6 scale factor Reactor Box, Breeching and Ductwork $4,451,000 Scaled from B&V database based on flue gas flow, using 0.6 scale factor Ductwork Expansion Joints $294,000 Scaled from B&V database based on flue gas flow, using 0.6 scale factor Catalyst $2,557,000 Catalyst volume determined based on unit size & Nox removal, $6500/m3 of catalyst Sonic Horns $188,000 Actual price from similarly sized unit, escalated to 2007 dollars Elevator $1,236,000 Actual price from similarly sized unit, escalated to 2007 dollars Structural Steel $4,881,000 Scaled from B&V database based on flue gas flow, using 0.6 scale factor SCR Bypass $10,000,000 Taken from another B&V project of similar size NOx Monitoring System $440,000 Actual price from similarly sized unit, escalated to 2007 dollars Electrical System Upgrade $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) $25,577,000 Gross Receipt Tax $1,583,000 (CC) X 6.2% Freight $1,279,000 (CC) X 5.0% Total purchased equipment cost (PEC) $28,439,000

Direct installation costs Foundation & supports $8,532,000 (PEC) X 30.0% Handling & erection $8,532,000 (PEC) X 30.0% Electrical $4,266,000 (PEC) X 15.0% Piping $711,000 (PEC) X 2.5% Insulation $2,844,000 (PEC) X 10.0% Painting $284,000 (PEC) X 1.0% Demolition $2,844,000 (PEC) X 10.0% Relocation $1,422,000 (PEC) X 5.0% Total direct installation costs (DIC) $29,435,000

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 $2,000,000 Contingency for site unknowns, such as underground utilities Buildings & enclosures $500,000 Contingency for general site building requirements Total direct costs (DC) = (PEC) + (DIC) $74,811,000

Indirect Costs Engineering $5,237,000 (DC) X 7.0% Owner's cost $3,741,000 (DC) X 5.0% Construction management $7,481,000 (DC) X 10.0% Construction indirect $18,344,000 B&V labor market review Start-up and spare parts $2,244,000 (DC) X 3.0% Performance test $200,000 Based on other projects with similar emissions testing scope Contingencies $14,962,000 (DC) X 20.0% Total indirect costs (IC) $52,209,000

Interest During Construction (IDC) $14,118,000 [(DC)+(IC)] X 7.41% 3 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) + (IDC) + (GEN) $156,805,000

ANNUAL COST
Direct Annual Costs
Fixed annual costs Operating labor $125,000 1 FTE and 124,862 $/year Estimated manpower level Maintenance labor & materials $2,244,000 (DC) X 3.0% Yearly emissions testing $25,000 Based on similar other projects with similar emissions testing scope Catalyst activity testing $5,000 Engineering estimate Fly ash sampling and analysis $20,000 Engineering estimate Total fixed annual costs $2,419,000

Variable annual costs Reagent $911,000 350 lb/hr and 700 $/ton B&V Calculated Auxiliary and ID fan power $1,496,000 3,296 kW and 0.06095 $/kWh B&V Calculated Catalyst replacement $426,000 66 m 3and 6,500 $/m 3 2 yr catalyst replacement rate Total variable annual costs $2,833,000

Total direct annual costs (DAC) $5,252,000

Indirect Annual Costs Cost for capital recovery $15,273,000 (TCI) X 9.74% CRF at 7.41% interest & 20 year life Total indirect annual costs (IDAC) $15,273,000

Total Annual Cost (TAC) = (DAC) + (IDAC) $20,525,000

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

Technology: Selective Catalytic Reduction - SJGS Unit 2 Date: 7/11/2007

Cost Item $ Remarks/Cost Basis

CAPITAL COST
Direct Costs Purchased equipment costs Anhydrous Ammonia Injection System $429,000 Scaled from B&V database based on ammonia flow, using 0.6 scale factor Anhydrous Ammonia Vaporization System $429,000 Scaled from B&V database based on ammonia flow, using 0.6 scale factor Reactor Box, Breeching and Ductwork $4,444,000 Scaled from B&V database based on flue gas flow, using 0.6 scale factor Ductwork Expansion Joints $294,000 Scaled from B&V database based on flue gas flow, using 0.6 scale factor Catalyst $2,553,000 Catalyst volume determined based on unit size & Nox removal, $6500/m3 of catalyst Sonic Horns $188,000 Actual price from similarly sized unit, escalated to 2007 dollars Elevator $1,236,000 Actual price from similarly sized unit, escalated to 2007 dollars Structural Steel $5,998,000 Scaled from B&V database based on flue gas flow, using 0.6 scale factor SCR Bypass $10,000,000 Taken from another B&V project of similar size NOx Monitoring System $440,000 Actual price from similarly sized unit, escalated to 2007 dollars Electrical System Upgrade $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) $26,661,000 Gross Receipt Tax $1,650,000 (CC) X 6.2% Freight $1,333,000 (CC) X 5.0% Total purchased equipment cost (PEC) $29,644,000

Direct installation costs Foundation & supports $8,893,000 (PEC) X 30.0% Handling & erection $11,858,000 (PEC) X 40.0% Electrical $4,447,000 (PEC) X 15.0% Piping $741,000 (PEC) X 2.5% Insulation $2,964,000 (PEC) X 10.0% Painting $296,000 (PEC) X 1.0% Demolition $2,964,000 (PEC) X 10.0% Relocation $1,482,000 (PEC) X 5.0% Total direct installation costs (DIC) $33,645,000

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 $2,000,000 Contingency for site unknowns, such as underground utilities Buildings & enclosures $500,000 Contingency for general site building requirements Total direct costs (DC) = (PEC) + (DIC) $80,226,000

Indirect Costs Engineering $5,616,000 (DC) X 7.0% Owner's cost $4,011,000 (DC) X 5.0% Construction management $8,023,000 (DC) X 10.0% Construction indirect $22,085,000 B&V labor market review Start-up and spare parts $2,407,000 (DC) X 3.0% Performance test $200,000 Based on other projects with similar emissions testing scope Contingencies $16,045,000 (DC) X 20.0% Total indirect costs (IC) $58,387,000

Interest During Construction (IDC) $15,407,000 [(DC)+(IC)] X 7.41% 3 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) + (IDC) + (GEN) $169,251,000

ANNUAL COST
Direct Annual Costs
Fixed annual costs Operating labor $125,000 1 FTE and 124,862 $/year Estimated manpower level Maintenance labor & materials $2,407,000 (DC) X 3.0% Yearly emissions testing $25,000 Based on other projects with similar emissions testing scope Catalyst activity testing $5,000 Engineering estimate Fly ash sampling and analysis $20,000 Engineering estimate Total fixed annual costs $2,582,000

Variable annual costs Reagent $906,000 348 lb/hr and 700 $/ton B&V Calculated Auxiliary and ID fan power $1,492,000 3,287 kW and 0.06095 $/kWh B&V Calculated Catalyst replacement $426,000 65 m 3and 6,500 $/m 3 2 yr catalyst replacement rate Total variable annual costs $2,824,000

Total direct annual costs (DAC) $5,406,000

Indirect Annual Costs Cost for capital recovery $16,485,000 (TCI) X 9.74% CRF at 7.41% interest & 20 year life Total indirect annual costs (IDAC) $16,485,000

Total Annual Cost (TAC) = (DAC) + (IDAC) $21,891,000

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

Technology: Selective Catalytic Reduction - SJGS Unit 3 Date: 7/11/2007

Cost Item $ Remarks/Cost Basis

CAPITAL COST
Direct Costs Purchased equipment costs Anhydrous Ammonia Injection System $559,000 Scaled from B&V database based on ammonia flow, using 0.6 scale factor Anhydrous Ammonia Vaporization System $559,000 Scaled from B&V database based on ammonia flow, using 0.6 scale factor Reactor Box, Breeching and Ductwork $5,613,000 Scaled from B&V database based on flue gas flow, using 0.6 scale factor Ductwork Expansion Joints $371,000 Scaled from B&V database based on flue gas flow, using 0.6 scale factor Catalyst $3,225,000 Catalyst volume determined based on unit size & Nox removal, $6500/m3 of catalyst Sonic Horns $188,000 Actual price from similarly sized unit, escalated to 2007 dollars Elevator $1,236,000 Actual price from similarly sized unit, escalated to 2007 dollars SCR Bypass $10,000,000 Scaled from B&V database based on flue gas flow, using 0.6 scale factor Structural Steel $7,816,000 Taken from another B&V project of similar size NOx Monitoring System $440,000 Actual price from similarly sized unit, escalated to 2007 dollars Electrical System Upgrade $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) $30,782,000 Gross Receipt Tax $1,905,000 (CC) X 6.2% Freight $1,539,000 (CC) X 5.0% Total purchased equipment cost (PEC) $34,226,000

Direct installation costs Foundation & supports $10,268,000 (PEC) X 30.0% Handling & erection $13,690,000 (PEC) X 40.0% Electrical $5,134,000 (PEC) X 15.0% Piping $856,000 (PEC) X 2.5% Insulation $3,423,000 (PEC) X 10.0% Painting $342,000 (PEC) X 1.0% Demolition $3,423,000 (PEC) X 10.0% Relocation $1,711,000 (PEC) X 5.0% Total direct installation costs (DIC) $38,847,000

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 $2,000,000 Contingency for site unknowns, such as underground utilities Buildings & enclosures $500,000 Contingency for general site building requirements Total direct costs (DC) = (PEC) + (DIC) $101,380,000

Indirect Costs Engineering $7,097,000 (DC) X 7.0% Owner's cost $5,069,000 (DC) X 5.0% Construction management $10,138,000 (DC) X 10.0% Construction indirect $25,498,000 B&V labor market review Start-up and spare parts $3,041,000 (DC) X 3.0% Performance test $200,000 Based on other projects with similar emissions testing scope Contingencies $20,276,000 (DC) X 20.0% Total indirect costs (IC) $71,319,000

Interest During Construction (IDC) $19,195,000 [(DC)+(IC)] X 7.41% 3 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) + (IDC) + (GEN) $215,568,000

ANNUAL COST
Direct Annual Costs
Fixed annual costs Operating labor $125,000 1 FTE and 124,862 $/year Estimated manpower level Maintenance labor & materials $3,041,000 (DC) X 3.0% Yearly emissions testing $25,000 Based on other projects with similar emissions testing scope Catalyst activity testing $5,000 Engineering estimate Fly ash sampling and analysis $20,000 Engineering estimate Total fixed annual costs $3,216,000

Variable annual costs Reagent $1,415,000 543 lb/hr and 700 $/ton B&V Calculated Auxiliary and ID fan power $2,194,000 4,835 kW and 0.06095 $/kWh B&V Calculated Catalyst replacement $538,000 83 m 3and 6,500 $/m 3 2 yr catalyst replacement rate Total variable annual costs $4,147,000

Total direct annual costs (DAC) $7,363,000

Indirect Annual Costs Cost for capital recovery $20,996,000 (TCI) X 9.74% CRF at 7.41% interest & 20 year life Total indirect annual costs (IDAC) $20,996,000

Total Annual Cost (TAC) = (DAC) + (IDAC) $28,359,000

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

Technology: Selective Catalytic Reduction - SJGS Unit 4 Date: 7/11/2007

Cost Item $ Remarks/Cost Basis

CAPITAL COST
Direct Costs Purchased equipment costs Anhydrous Ammonia Injection System $559,000 Scaled from B&V database based on ammonia flow, using 0.6 scale factor Anhydrous Ammonia Vaporization System $559,000 Scaled from B&V database based on ammonia flow, using 0.6 scale factor Reactor Box, Breeching and Ductwork $5,648,000 Scaled from B&V database based on flue gas flow, using 0.6 scale factor Ductwork Expansion Joints $373,000 Scaled from B&V database based on flue gas flow, using 0.6 scale factor Catalyst $3,245,000 Catalyst volume determined based on unit size & Nox removal, $6500/m3 of catalyst Sonic Horns $188,000 Actual price from similarly sized unit, escalated to 2007 dollars Elevator $1,236,000 Actual price from similarly sized unit, escalated to 2007 dollars Structural Steel $6,252,000 Scaled from B&V database based on flue gas flow, using 0.6 scale factor SCR Bypass $10,000,000 Taken from another B&V project of similar size NOx Monitoring System $440,000 Actual price from similarly sized unit, escalated to 2007 dollars Electrical System Upgrade $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) $29,275,000 Gross Receipt Tax $1,811,000 (CC) X 6.2% Freight $1,464,000 (CC) X 5.0% Total purchased equipment cost (PEC) $32,550,000

Direct installation costs Foundation & supports $9,765,000 (PEC) X 30.0% Handling & erection $9,765,000 (PEC) X 30.0% Electrical $4,883,000 (PEC) X 15.0% Piping $814,000 (PEC) X 2.5% Insulation $3,255,000 (PEC) X 10.0% Painting $326,000 (PEC) X 1.0% Demolition $3,255,000 (PEC) X 10.0% Relocation $1,628,000 (PEC) X 5.0% Total direct installation costs (DIC) $33,691,000

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 $2,000,000 Contingency for site unknowns, such as underground utilities Buildings & enclosures $500,000 Contingency for general site building requirements Total direct costs (DC) = (PEC) + (DIC) $94,548,000

Indirect Costs Engineering $6,618,000 (DC) X 7.0% Owner's cost $4,727,000 (DC) X 5.0% Construction management $9,455,000 (DC) X 10.0% Construction indirect $20,996,000 B&V labor market review Start-up and spare parts $2,836,000 (DC) X 3.0% Performance test $200,000 Based on other projects with similar emissions testing scope Contingencies $18,910,000 (DC) X 20.0% Total indirect costs (IC) $63,742,000

Interest During Construction (IDC) $17,594,000 [(DC)+(IC)] X 7.41% 3 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) + (IDC) + (GEN) $199,558,000

ANNUAL COST
Direct Annual Costs
Fixed annual costs Operating labor $125,000 1 FTE and 124,862 $/year Estimated manpower level Maintenance labor & materials $2,836,000 (DC) X 3.0% Yearly emissions testing $25,000 Based on other projects with similar emissions testing scope Catalyst activity testing $5,000 Engineering estimate Fly ash sampling and analysis $20,000 Engineering estimate Total fixed annual costs $3,011,000

Variable annual costs Reagent $1,388,000 533 lb/hr and 700 $/ton B&V Calculated Auxiliary and ID fan power $2,215,000 4,881 kW and 0.06095 $/kWh B&V Calculated Catalyst replacement $541,000 83 m 3and 6,500 $/m 3 2 yr catalyst replacement rate Total variable annual costs $4,144,000

Total direct annual costs (DAC) $7,155,000

Indirect Annual Costs Cost for capital recovery $19,437,000 (TCI) X 9.74% CRF at 7.41% interest & 20 year life Total indirect annual costs (IDAC) $19,437,000

Total Annual Cost (TAC) = (DAC) + (IDAC) $26,592,000