Green Energy Programs and Financing Techniques

1. Green Energy Programs and Financing Techniques MAY 2, 2013 Ladies First The Mid-Atlantic Women’s Public Finance Forum

2. Energy Panel Members Moderator: Amanda Del Bene, Senior Vice President - Raymond James & Associates, Inc. Amanda Del Bene is a Sr. Vice President specializing in the needs of Investment Banking clients in the Northeast. Ms. Del Bene has ten years of industry experience and has been a part of the Raymond James Public Finance Department since 2005. Ms. Del Bene has extensive expertise in a broad range of taxable and tax-exempt financing techniques, having provided investment banking and quantitative services on hundreds of senior managed financings for a variety of issuers throughout the Northeast. Ms. Del Bene has particular expertise in structuring and executing pooled financings for a range of issuers and obligors throughout the region. Ms. Del Bene is involved in many areas of Raymond James’ business efforts, from coordinating financings and re-financings to originating financial solutions especially tailored for her clients. She is experienced in financial modeling utilizing such tools as DBC Finance, Munex, Access Databases and Excel models. Ms. Del Bene received a Bachelor of the Arts degree in Economics, with honors, from Rutgers University and is a member of the National Economics Honor Society. She currently holds Series 7, 53 and 63 securities licenses. Panel: Liza L. Wolf, Chief Legal Officer and EVP - Blue Sky Power As Blue Sky Power’s Chief Legal Officer and EVP, Liza applies her substantial experience in energy and project finance fields, as well as over 20 years’ experience in large national and international law firms. Blue Sky Power develops, finances, designs, operates and manages clean energy capital projects for military, governmental, institutional, commercial and industrial facilities. On-site clean power generation, microgrids and cogeneration are the future of American Energy. Hospitals, universities, governments and other institutions spend significant resources on energy, usually one of the top costs in any operating or capital budget. Blue Sky Power finances, owns and operates institutional energy infrastructure to free up capital and other resources so an institution can concentrate on its core mission, such as protecting our citizens, healing the sick, educating students, producing clean water or advancing economic growth. Prior to joining Blue Sky Power, Wolf was a Member of the Business Law Group at Cozen O’Connor, with a focus in public and project finance, specializing in energy transactions. For the development of clean energy facilities, Wolf has represented various companies in structuring and overseeing on- and off-balance sheet financings, including securing taxable and tax-exempt debt and structuring, drafting and negotiating energy sales/services agreements, power purchase agreements and engineering, procurement and construction contracts.

3. Energy Panel Members Panel Continued: Jennifer G. Edwards, Managing Director - Acacia Financial Group, Inc. Jennifer G. Edwards, a Managing Director and Shareholder of Acacia has fourteen years experience providing financial advisory services to numerous school districts, municipalities, counties and authorities. Ms. Edwards has extensive experience structuring and managing general obligation bond, revenue bond, pooled bond, renewable energy transactions, energy efficiency programs and financings and solid waste projects. Ms. Edwards earned a Bachelor’s Degree in Mathematics from the Richard Stockton College of New Jersey. With regard to renewable energy financings, Ms. Edwards was an essential part of the team that organized and structured the first solar energy pooled power purchase agreement guaranteed by a county government. This structure was utilized around the state as a model for other county government solar financings. In addition, Ms. Edwards has worked with several entities in connection with financing energy savings improvement programs incorporating energy savings into cash flow models, with and without the utilization of an energy services company. Dacia A. Haddad, Partner - Blank Rome, LLP Dacia A. Haddad, a partner with Blank Rome LLP, focuses her practice on public and project finance. She represents issuers, investment banks, underlying borrowers and interest rate swap providers in all aspects of public/project finance transactions. Ms. Haddad provides advice with respect to structuring, re-structuring, offering, selling or placing, and issuing tax-exempt and taxable bonds, derivatives and post-issuance compliance. Ms. Haddad has worked on many different types of public finance transactions including general obligation and revenue bond financings and re-financings, in the areas of healthcare (including hospitals and continuing care providers), energy and utilities, education, higher education, infrastructure and housing, among others.

4. Types of Energy Projects • Renewables - Derived from natural sources that are constantly and sustainably replenished -Wind - Geothermal - Solar - Biogas - Hydropower - Offshore (wind, wave & tidal) • Combined Heat & Power (aka Cogeneration) - -Simultaneous production of heat and electricity from a single fuel source - Efficiency is gained through the recovery of thermal energy • Energy Efficiency – Basic concept is using less energy to provide the same service. Examples include replacing or improving: - Windows/doors - Lighting - Roofs - Furnace - Insulation - Water Heaters - Appliances - HVAC

5. Funding • Bonds –- General Obligation Bonds - Pooled General Obligation Bonds - Private Activity Bonds - Guaranteed Bond with Pooled Power Purchase Agreement - Qualified Energy Conservation Bonds - Clean Renewable Energy Bonds • Lease Financing -- Certificates of Participation - Direct Purchase Lease - Lease Revenue Bond (local unit guaranty) - Bond Bank Programs • 3rd Party –- Power Purchase Agreements - Private Lease Financings - Energy Service Agreements • Equity–- Cash Equity - Tax Equity

6. Grants and IncentivesNew Jersey Large Scale (Over 1 MW) NJCEP Grants Awarded under a tiered incentive structure based on the system size and amount of electricity that the project generates Maximum award of $3 million per project. Total state and/or federal funding cannot exceed 50% of the total project cost CHP Projects - Greater than 1 -3 MW - $0.55/watt Greater than 3 MW - $0.35/watt Fuel Cell Projects – Greater than 1 MW with waste heat utilization - $2.00/watt Greater than 1 MW without waste heat utilization - $1.50/watt Program runs through June 30, 2013 http://www.njcleanenergy.com/commercial-industrial/programs/combined-heat-power/combined-heat-power-and-fuel-cells-large-scale-pr NJ CHP/FUEL CELL GRANT SOLICITATIONS Small Scale (Under 1 MW) NJCEP Incentive ($/Watt) ($1 Million cap) Range of Incentives depending on size, whether CHP or Fuel Cell & whether powered by renewable source. (Range: $0.50 to $3/watt) NJCEP Pay for Performance Bonus (up to additional $250,000) Limited application Utility Match may be available http://www.njcleanenergy.com/commercial-industrial/programs/combined-heat-power/combined-heat-power-and-fuel-cells-1-mw

7. Grants and IncentivesNew Jersey Solar P.L.2012, CHAPTER 24, approved July 23, 2012 • Increase RPS: (Renewable Portfolio Standard) Increase the amount of SRECs that need to be purchased in the short term to absorb the oversupply and maintain a higher build rate • Decrease the SACP: (Solar Alternative Compliance Payment) Lower the fine level from $600+ to $339 and lower to protect ratepayers • Limit solar farm development • Incentivize solar development on landfills, brownfields and large net metered projects. • Aggregated net metering for electricity consumption by certain governmental bodies and school districts http://www.njleg.state.nj.us/2012/Bills/AL12/24_.PDF • Energy Efficiency • NJ Smart Buildings Program • Equipment Incentives • Enhanced incentives available in buildings impacted by Hurricane Sandy. Eligible projects receive an additional 50% http://www.njcleanenergy.com/commercial-industrial/programs/nj-smartstart-buildings/nj-smartstart-buildings • Pay for Performance Program • Program partners provide technical services under direct contract • Measures must reduce existing energy consumption building by 15% or more http://www.njcleanenergy.com/commercial-industrial/programs/pay-performance • Energy Savings Improvement Program • Government agencies can make energy related improvements and pay for the costs using energy savings • ESIP Bonds are refunding bonds • Shared Services Structure permitted http://www.njcleanenergy.com/ESIP

8. Grants and IncentivesDelaware and Pennsylvania Delaware S. B. 124 in July of 2011 (Renewable Portfolio Standard Act) • Allows energy output from a Qualified Fuel Cell Provider Project in fulfilling a portion of the requirements under the RPS Act. Fuel cell projects can fulfill no more than 30% of the SREC requirements at a ratio of 6 MWh of RECs per 1MWh of SRECs. • No current State financial incentives in place that apply to CHP. • Utilities might have some rebates and incentivesfor CHP. http://legis.delaware.gov/LIS/LIS146.NSF/vwlegislation/B8AEC0E2053460A4852578AF00590FA3 • Pennsylvania Alternative Energy Portfolio Standard • Requires all electric distribution companies and retail electric generation suppliers to ensure that 18% of their electricity is derived from alternative energy resources by 2020. • CHP must comprise 10% of the total electricity supply by 2020. No current Commonwealth financial incentives in place that apply to CHP.. Utilities might have some rebates and incentives. For example, PGW has a variety of incentives. https://www.pgworks.com/index.aspx?nid=334

9. Grants and IncentivesDelaware • Energy Efficiency Energy Efficiency Investment Fund (EEIF) • Audit: Reimbursement of 50% of the cost of an energy assessment, up to a maximum of $10,000. • Energy Efficiency Projects Solicitation • Applications will be awarded on a quarterly basis until funding is exhausted. Remaining due dates: May 15, 2013; August 15, 2013. • Grant Application – Not to exceed 30 percent of the total project cost; Maximum grant award is $500,000. • Loan Application – Low interest loans may be available for the remaining project cost, with the maximum loan amount expected to be $1.5 million http://www.dnrec.delaware.gov/energy/information/otherinfo/Pages/EnergyEfficiencyInvestmentFund.aspx Solar Renewable Portfolio Standard (RPS) • RPS was expanded to 25% renewables and 3.5% photovoltaics by 2026 by S.S. 1 for S.B. 119 enacted in July 2010. • The PV target began at 0.011% for the June 2008 - May 2009 compliance year (CY 2009) and accelerates slowly over time towards an ultimate target of 3.5% for compliance year 2025-2026. Delaware Program for the Procurement of Solar Renewable Energy Credits • Program successfully piloted in 2012; 2013 program just closed. • The purpose of the program is to provide long-term SREC contracts for solar projects that are eligible to meet Delaware’s Renewable Portfolio Standard’s solar-carve out through annual solicitations. Utility Rebate Programs may be available http://www.dsireusa.org/incentives/index.cfm?re=0&ee=0&spv=0&st=0&srp=1&state=DE

10. Grants and IncentivesPennsylvania • Energy Efficiency Pennsylvania's Act 129 • Sets ambitious savings goals for the state's large electric utilities. • Utilities in Pennsylvania are the administrators of the energy conservation programs http://www1.eere.energy.gov/femp/financing/ eippa.html Solar Pennsylvania's Alternative Energy Portfolio Standard (AEPS) • Requires each retail electric distribution company (EDC) and electric generation supplier (EGS) to supply 8% of its electricity using solar and other renewables by 2020. • Compliance is based on alternative energy credits (AECs). Solar Energy Program (SEP) • Provides financial assistance in the forms of grants and loan funds to promote the use of alternative solar energy • Administered jointly by the Department of Community and Economic Development (DCED) and the Department of Environmental Protection (DEP) under the direction of the Commonwealth Financing Authority (CFA) • CFA is temporarily not accepting applications as the guidelines are currently being updated and modified.