This paper, which is the second of a series of papers, presents an approach for the generation of a novel heat exchange and power recovery network (HEPN) for use with any large-scale process. A three-stage decomposition framework is introduced to sequentially determine the minimum hot/cold/power utility requirement, the minimum number of heat exchanger matches, and the minimum annualized cost of heat exchange. A superset of heat engine operating conditions is used to derive the heat engine design alternatives that produce the maximum amount of electricity that can be generated when there is complete integration with the process streams. Given the minimum utility loads and the appropriate subnetworks for each process flowsheet, the minimum number of heat exchanger matches is found for each subnetwork. Weighted matches and vertical heat transfer are used to distinguish among the heat exchanger sets, to postulate the appropriate set of matches that will yield the lower minimum annualized cost. Finally, a minimum annualized cost model was presented, which uses Aspen Plus process information to estimate the cost functions for a heat exchanger match and the overall heat transfer coefficient. The proposed model is then used to analyze the seven simulated process flowsheets detailed in the first part of this series of papers [Ind. Eng. Chem. Res. 2010, DOI: 10.1016/ie100063y]. Detailed case studies are presented for the three hybrid process flowsheets to highlight the key differences in the HEPN for each process.