CCM ENERGY SOLAR PV

1. CCM ENERGY SOLAR PV CAWPCA November 1, 2012 900 Chapel Street New Haven, CT 06510 203-498-3000 amerola@ccm-ct.org

2. PRESENTER: Andy Merola, CCM AGENDA: • Connecticut's ZREC Program • Economic Drivers of Solar Projects • Savings • CCM Energy & Competitive Procurement • CCM Energy Results • Preparing Now for the Next ZREC Auction • Summary • Q&A

3. What is Solar PV? • Converting sunlight into electricity via a photovoltaic cell • A solid-state device composed of thin layers of semiconductor materials that produce an electric current when exposed to light • Single cells are grouped to form a module • Modules are grouped into an array • Photovoltaic cells produce direct current (DC) electricity (batteries) • An inverter changes the current from DC to AC

4. Connecticut ZREC Program • As of 10/1/07: net metering for "Class I" renewable-energy resources (includes solar PV with a capacity ≤ 2 megawatts) • “Excess electricity” during any month is “banked”, i.e., carried over to the next month as a per kWh credit • Customers receive full retail value of electricity generated on site • For any “excess electricity” remaining in the “bank” at end of annualized period, utility pays its avoided-cost rate — much lower than retail value • As a result, sizing your solar PV project appropriately is critical (and is one of the services provided by CCM Energy) • 2011 - CT legislature decides to subsidize solar development • Requires electric utilities to enter into long-term contracts to purchase Renewable Energy Credits from these projects

5. Connecticut ZREC Program • April 4, 2012: PURA approves utility plan for purchase of Zero and Low Emission Renewable Energy Credits (ZRECs and LRECs) • $1.02 billion in ZRECs and LRECs • CL&P and UI enter into $8 million of annual 15-year contracts every year for six years ($720 million ZREC contracts over next six years) • Larger ZREC contracts awarded in annual utility auction • Small ZREC contracts awarded at tariff rate in annual application process • First solicitation for large and medium ZRECs held in June: 296 applications for the ZRECs; selection of 76 winners representing 24.92 mW of renewable generation

6. Economic Drivers • Solar PV projects require two separate and distinct procurements: • PPA between the solar development company and the community (the contract that CCM Energy competitively procures) • Contract for sale of the ZRECS (the contract between the solar development company and the utility) • Proceeds from the sale of ZRECs are the economic driver behind solar PV projects, providing the lion’s share of the annual revenue • As a result, success of these solar PV projects depends upon the ability to sell the ZRECS to the utility

7. Savings • “Behind the meter” projects (the solar array produces power that reduces the amount of electricity delivered to the meter) • Savings on the supply (generation) and transmission and distribution (charged per kWh) of power • Three or four solar projects might collectively yield 500 kW of solar capacity with the potential to generate somewhere between $11,000 per year and $35,000 per year in savings • CCM Energy’s four projects in East Hartford awarded in the first round with a combined capacity of 591 kW are expected to generate $53,000 in first-year savings • PPAs run for the lifetime of the solar equipment (typically 20 years) and could yield between $220,000 and $700,000 in total savings • Savings are impacted by project size, rate class, bid price, and other variables

8. CCM Energy’s Competitive Procurement • Twenty-year commitment requires expert advice to negotiate reasonable terms • CCM Energy services include: • Screen potential sites • Develop the procurement documents • Qualify bidders • Organize site visits • Evaluate bids • Negotiate power purchase agreements • Recommend the winning bidder and contract • Monitor the project from contract execution through the start of construction (from start to finish this may be a 12 month effort)

9. CCM Energy’s Results • Our process designed to maximize success in subsequent ZREC Auctions • Our Phase 1 program (this past spring) achieved the following results: • Competitive Process: 30 solar development companies replied, eventually leading to six finalists and three selected firms. • Favorable Terms and Conditions: We negotiated terms that allowed the buyer to substitute alternate sites for the arrays and or suspend service during the term to accommodate renovations and reconstruction activities. • Competitive Prices: We procured a price that is below current utility prices and fixed and flat for 20 years. • Compatible with utility ZREC process: Only 28% of the solar projects that submitted bids into the June 12 CL&P ZREC auction received ZREC awards. 75% of the CCM solar projects received ZREC awards. Based on the lessons learned we expect to improve on that hit ratio in upcoming procurements.

10. Preparing for Next ZREC Auction • Identify rooftops that meet the following specifications: • Installed or replaced since 2002 • With at least 10 years of roof warranty remaining • On a building that consumes 200,000 kWh or more per year • With a available roof area of at least 15,000 square feet • Or identify acreage for a ground mounted array: • With available un-shaded space of 15,000 square feet or more • Adjacent to building that consumes 200,000 kWh or more per year • Wastewater plants could be ideal sites for solar arrays • Send us the address and we will review initial suitability with you • If it makes sense to proceed: • Sign a Participation Agreement • Complete a more detailed survey questionnaire • Note: Re Smaller projects

11. CCM Energy Solar Procurement Schedule: Fall 2012

12. Summary • Why CCM Energy? • Large group of program participants ensures continuing interest among multiple solar developers • Multi-supplier/competitively bid pricing yields lower per kWh cost • Multi-supplier/competitively negotiated power purchase agreements yields beneficial PPA terms and conditions • Expert, reliable advice and assistance throughout the process including negotiating with your current supplier if required by your current supply agreement (already allowed by most CCM procured contracts) • Savings and reduced risk for participants • No capital investment by the community

13. Thank you for listening.I would be pleased to answer any additional questions.