Plumas Rural Services
MBA Consulting Center Project /
Megan Godfrey (team lead), Prerna Arora, Matthew Barnes, Monica Knight
Plumas Rural Services is a community-focused, nonprofit organization. PRS provides services focused on improving quality of life to the residents of Plumas County, Calif., including health care, dependency and abuse counseling, public transportation and education. In one form or another, PRS provides services to every resident in Plumas County, and is one of the 10 largest employers in the county.
PRS intends to purchase a 25MWh biomass power plant in Loyalton, Calif., from Sierra Pacific Industries. They asked the MBA Consulting Center team to provide a business plan for this purchase so they can apply for grants to cover the purchase price, and to finance the balance. PRS specifically needed the business plan to educate others about nonprofit organizations.
The consultant team created a 25-page, socially responsible business plan that detailed the client’s business and intentions, a thorough analysis of the market and industry, in-depth discussion of this plant’s competitive advantages in the region and industry, and two financial pro-formas evaluating the plant’s profitability and price sensitivity, assuming two different purchase prices.
Conclusions and Recommendations
The team concluded that the biomass power plant would be a viable operation that would provide PRS with an income beyond their needs, and advised PRS to move forward with the purchase. They further recommended that PRS form an advisory board to provide oversight for the power plant, and provided recommendations for members. They advised PRS to investigate a number of grant opportunities and network opportunities, negotiate a lower purchase price based on recent sales of other biomass plants, and a few financing options.