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Ponca City Cogeneration Plant Supplement

Bodily, Samuel E.

Case

Ponca City Cogeneration Plant Supplement

Bodily, Samuel E.

QA-0470 | Published September 15, 1994 | 2 pages Case

Collection: Darden School of Business

Product Details

An electric utility faces the hard choice between losing its third largest customer or building a cogeneration plant that is very risky to them and appears to take value away from the firm. Students first assess their strategic position and the magnitude of the risk, in the process improving the assumptions of the discounted cash flow spreadsheet model available to them. The task is then to be shrewd and creative in reducing and managing the risk of the project, which, after all, is manageable. This supplement provides information on the various factors that contribute to the risk of the project.

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