Case Objective

This teaching case is about a successful medium$-$sized ski resort in the Berkshire Mountains of Western Massachusetts, Jiminy Peak Mountain Resort, and its deliberations about a wind turbine installation. This case allows students to explore the economic, environmental, social, and other factors associated with the decision to invest in green energy sources based on the real$-$world example. Focus is placed on identifying relevant cash flows and calculating long term economic viability, identifying pertinent non$-$financial factors, and bringing this information together to form an overall recommendation.

Introduction

Jiminy Peak operates in the Berkshire Mountains of western Massachusetts in $1948,$ running a four$-$season resort offering skiing, mountain biking, and other outdoor sporting activities. Good management has seen Jiminy Peak become a popular winter ski destination that covering $170$ acres, with $45$ ski and snowboard trails, three terrain parks, and nine lifts, including a high$-$speed six$-$person chairlift. Savvy marketing and attractive mountain facilities have enabled the resort to operate profitably, even in the summer. Fo summer sport enthusiasts, Jiminy Peak installed a mountain coaster, an alpine super slide, a giant swing scenic rides, a rock climbing wall, a "euro$-$bungy" trampoline, hiking, and, for children, rope adventures mini$-$golf, a rope spider web, and an inflatable "bouncy bounce" playground. Winter visitors number abol a $250,000$ annually, while summer visitors average about $100,000.$

Lately, Brian Fairbank, president and CEO of Jiminy Peak Mountain Resort, has been worried about energ costs. Jiminy Peak's business is very energy$-$intensive, mainly because most of the winter snow manufactured by machines that run on electricity. Strong conservation campaigns over the years ha reduced energy consumption by $25$ percent, but the resort still consumes about $7\mathrm{.}5$ million kilowatt hou $($kWh$)$ of electricity each year, with about $60$ percent used during the peak winter months.

Last year, electricity costs were about $$0\mathrm{.}11$ per kWh$,$ but this season, the cost rose to $$0\mathrm{.}16$ per kWhincrease of almost $50$ percent. Even before the electricity cost increase, Jiminy Peak had tried to opera as efficiently as possible to minimize its electricity consumption and have made a number of improveme to existing facilities $($e$.$g$.,$ changing to energy efficient lighting$\_$intraducing a gravity$-$fed snowmak