Plug & Play CHP? Is Your Pocket About to be Picked ?

1. Plug & Play CHP?Is Your PocketAbout to be Picked?

2. CHP Used to Only Be Available AsCustom Designed and Site Built Example: Gas CT to HRSG turbine to steam turbine centrifugal chiller • System Integration • Prime over • Heat recovery • Parallel switchgear • Thermal manifold • Steam generator • Chillers • Diverters • Cooling • Monitoring • On-site assembly • Commissioning and testing • Best suited for large industrial applications July 30, 2015

3. Why Should Utilities Care? • Customers Like It • Reduces energy costs • Improves reliability • Keeps running during blackouts, hurricanes • Price stability • Utility opportunities and problems • Low cost additional generation capacity • T&D congestion relief • EPA Clean Power Plant rule compliance • Better than PV in several ways… • Lost revenue potential July 30, 2015

4. A Very Simple CHP Example Exhaust – high temperature for steam Jacket – close to boiling (absorption chiller) Thermal manifold – blend to suit • Prime movers: • Reciprocating engines • Combustion turbines • Steam turbines • CHP Makes: • Electricity • Cold water • Absorption or turbine chillers • Steam • Hot water July 30, 2015

5. Competition from CHP Provider From: David V. Downes Sent: Friday, September 19, 2014 2:48 PMTo: Alexander M. GrierCc: Christopher S. SimmsSubject: CHP Lex Talk about Providential timing.  I got a call from CLIENT this afternoon to see if I could help them evaluate the impact to their system from loss of the hospital to a 1 MW cogen facility. I am getting information from CLIENT and will look at next week. How about that? Dave July 30, 2015

6. There’s A New Game in Town Mr. Hospital Administrator – You pay a lot of money for Energy Electric, Heat, and Air Conditioning On Site Combined Heat and Power (CHP) July 30, 2015

7. Here is what vendors can do! Packaged small foot printed pre-engineered CHP equipment Local operations and maintenance contracts with 24/7 monitoring Base load sized for thermal needs July 30, 2015

8. Consider the possibilities Cost of natural gas fuel low Easily transportable Connects to existing system Low capital cost for installed capacity We can put together a financing package to keep things simple July 30, 2015

9. CHP Planning and Operating Characteristics • Designed not to have net export energy or excess thermal output • Usually operates in parallel with grid • CHP prime mover has high capacity factor • Availability guarantee >90% not uncommon • Maintenance in low demand periods • Forced outages supported by your interconnection July 30, 2015

10. To Summarize: • 200 Bed Hospital pays $1.36 million in total annual electric cost to Utility-Revenue • Hospital pays for fuel and maintenance of boilers for heat • For tax exempt entity CHP Net Savings - $368,021/year IRR 17.6% on a $2.0 million investment • For taxable entity CHP Net Savings - $461,547/year IRR 23.88% on a $1.8 million investment July 30, 2015

11. What Does CHP Do to Utility Revenue and Capacity Requirements? • Lost revenue from: • Sales displaced by prime mover • Sales lost for cooling heating • Load factors could worsen • 95% CHP capacity factor guarantees available • CHP maintenance and forced outages still occur July 30, 2015

12. Here’s Why Energy Served By Solar 100% 40% 20% 60% 80% July 30, 2015

13. Standby Charges Will Not Cure Revenue Erosion But Participation Can! July 30, 2015

14. Hometown Electric Response? • Do nothing • Hope for the best • React if threat is real • Prepare and investigate to protect utility customers • Establish standby rates • Create new fixed cost allocation • Consider dual metering with time of use rates • Advise your power supplier of potential losses • Reach out to major customers – be ready to go • Check the pulse, temperature, and inclination of major customers • Determine a business plan to participate, perhaps own and operate the CHP facility • Negotiate with your power and fuel suppliers July 30, 2015