Developing Renewable Energy Projects on DoD land

2. Developing Renewable Energy Projects on DoD land Angela Maybrier, Booz Allen Hamilton Grand Hyatt/San Antonio TX Wednesday, February 16th 2011

3. Agenda Overview EUL Program – Developer’s Perspective • Site Selection Challenges • Road Blocks to Success Energy EUL (E-EUL) Dynamics • Goals • Incentives • Procurement Options Key Drivers Recommendations and Take-Aways Questions & Answers

4. Overview • Developments on DoD land have both upsides and downsides vs. other land use tools • Every EUL competes with every other land and/or energy deal in its market • Developer and Land Owner have similar motivations • Gaining the most value from the land asset as quickly as possible • Development deal is not an emotion, it’s a number – does the project pencil?

5. Site Selection and Development Challenges • Incomplete NEPA and/or unrealistic timelines • Limiting development options • Size – parcels of land too small, non-contiguous or unusual perimeter • Location – interior of installation brings security, mission impact, or marketability into question • Proximity to necessary infrastructure for type of development • Lack of key stakeholder buy-in participation • Commercial viability

6. Roadblocks to Success • Multiple Stakeholder Interests • Potential opposing interests • Property Valuation • Land has no intrinsic value • Value = Land’s ability to generate cash flow • Cost should be discounted by how much investment needs to be made and the risk associated with the project • Time is Money – Certainty of Schedule • Upfront payment and delayed approval limits developers’ ability to obtain necessary ROI

7. Energy EUL (E-EUL) - Dynamics • Define Goals: • Revenue or Purchase of Power • Energy Independence • Executive Order Requirements • Incentives • Tax Credits • Tax-Exempt Bonds • Renewable Energy Credits • Community Involvement • Local University • Local Utility • Local Economic Development Corporation

8. Additional Procurement Options

9. Key Drivers – EUL and E-EUL • Clearly Identified Project Champion • Champion for both the real estate/lease component as well as potential PPA negotiations • No ambiguity about NEPA or other environmental and permitting transmission issues – bad news does not get better with time • Apparent unified support for project through the Chain of Command • Market compatibility/desirability of location

10. Recommendations • Complete Finding of Suitability to lease (FOSL), and supporting documents for necessary NEPA process early • Pre-educate Deal Team on deal challenges • Consistency in selection criteria • Make sure ALL stakeholders know what is proposed • Establish timelines based on key milestones • Development concepts synergistic to installation mission • Local Community Support • Quality not Quantity of projects • Energy-related projects • RFQ for Regional Developer Partner

11. Key Take-Aways • Flexibility – nothing else can make a deal work or fail faster • Deal Teams need to understand market fluctuations • Realize project marketability can change during Business and Lease Plan Process and/or Lease and Management Plan Process • Alignment of financial interests • Realistic financial expectations • Continuous dialog and trust • Timing and schedule • Quality of opportunity and development team

12. QUESTIONS + ANSWERS Contact: Angela G. Maybrier Booz Allen Hamilton Tel: 210-932-5604 Mobile: 210-334-1741 Email: Maybrier_Angela@bah.com