Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Dan Eggers – Credit Suisse.
Daniel Eggers – Credit Suisse
Kirk, maybe just a little clarification for all of us could be useful. If we were to go to the slide 41 and we look at, just to make sure we understand the definitions, the contract price versus the estimated market value, what is the breakdown in those numbers? Is that going to be energy plus ancillaries pre-capacity or it looks like that's a pre-capacity revenue number? Is that fair?
Kirk Oliver
No, that's loaded up with everything in it that's in the contract. So that's got capacity, shaping, ancillaries, basis, everything is in there. Basically, the estimated market value is basically what the replacement value for the contract would be on September 30th.
Daniel Eggers – Credit Suisse
And then the percentage utilization or how are you guys allocating out the dollar per megawatt hour of value capacity revenues? Are you just taking the targeted 34 terawatt hours of output in 11 and dividing it in the capacity revenue and putting that number into the price per megawatt hour?
Kirk Oliver
What we tried to do, Dan, was to make it simpler. When we provide service through a contract, a full requirements contract, we have to provide the capacity so we charge for the capacity, but then we get paid by PJM for capacity.
So what we've done is we've broken the capacity out in a separate driver, which is shown – we show that on the bottom of slide 41 what the capacity is doing. And then in the contracts basically we're getting paid by our customer for the capacity but we're paying PJM for the capacity, so the capacity eventually washes through but it's showing here in the pricing.
Daniel Eggers – Credit Suisse
The basis you guys show at $8 in 2010, are we more effective to look at AD Hub versus PJM West as a more representative hub for your generation, and how does your generational price from that zone for your plant's dispatch?
Paul Evanson
We've talked in the past so much, Dan, about the PJM Western Hub really because it's just a much deeper, much more liquid trading hub, and of course it's next to where our load is and very close to the AP zone load.
But as you know, there's meaningful transmission constraints and congestions at times between our plants and the hub, so those basis differentials can grow and widen depending on a lot of things. So whereas, the AD Hub, the AEP-Dayton Hub has much less constraints between our plant and that hub, electrically, there's just not a lot of constraints, but, the problem is it's not really a robust trading hub.
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