An 8% discount rate may be applicable when dealing with steady predictable annuity income from a Government authority, but have you seen the volatilty in Strike's own projection of the Reserve Capacity Price: up 72% one year and down 27% the next. IMHO, with that kind of price volatility a 10% discount rate would be a minimum.
And again IMHO, any financial model that is presented on a pre-tax basis is not showing the true position because discounted cashflows have to reflect the reality that companies pay tax.
So, my back of the envelope numbers using after-tax cashflows and a 10% discount rate give an NPV of about $100M, which is a long way short of the $250M that Strike said.
Cheers ft
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