Energy Services: Funding Site Improvements Through Energy Conservation Initiatives September 2007

Summary Introduction Trends and Challenges Performance-based Energy Services Implementation Process Financial Considerations Summary 28-Nov-18

Ainsworth – Corporate Overview Profile: 65 years in business Wholly owned subsidiary of OMERS Annual sales of $100M Staff of over 700 people Offices in 5 major centres across Canada Offerings: Energy Services Design Build and Project Management Mechanical and Electrical Contracting Mechanical and Electrical Maintenance Building Automation Drives and Motors IT outsourcing and help desk service Dispatch Centre and Service Portal So, just to give you a brief overview of Ainsworth: Read ‘Our profile’ and ‘Our offerings’ As you can see we offer a comprehensive list of services for institutional, commercial and industrial buildings. In particular, today’s presentation will be on the energy conservation services we can provide to municipalities. 28-Nov-18

Trends and Challenges Financial Issues: Infrastructure Issues: Escalating energy costs and volatility Rising operating costs Budget pressures Conflicting priorities for available capital No extra capital for ‘special’ projects (such as energy conservation) Aging asset base Increased deferred maintenance concerns Reactive versus proactive maintenance Reduced levels for investment in new infrastructure Financial issues, infrastructure issues and environmental stewardship goals must all be addressed within the existing tax base. We recognize there are a number of challenges currently facing municipalities. They can be broken down into 2 areas: financial issues and infrastructure issues. In terms of financial issues, energy costs are escalating and volatility in prices is becoming the norm rather than the exception, municipal operating costs are on the rise, you are facing increased budget pressures and as a result, there are conflicting priorities for the available capital that exists. However, infrastructure issues also must be taken into consideration including an aging asset base, increased concerns about deferred maintenance, challenges dealing with reactive maintenance (waiting until something actually breaks down) versus proactive maintenance (retrofitting and upgrading equipment to ward off any breakdowns) and of course, reduced levels of investment for new infrastructure. Ultimately, you must address both these issues plus your environmental stewardship goals – all within your existing tax base. Can this be done? Yes. And we show you how on the next slide. 28-Nov-18

Energy Services: Performance-based Solutions A comprehensive “self-funded” program in which new equipment and technology is installed to modernize and improve buildings and facilities – and is paid for by the guaranteed energy and operational savings. Ainsworth provides third-party financing to fund the capital cost of the project so there is no impact to capital or operating budgets. 2005 2007 2009 2011 2013 2015 After Retrofit Before Program – Escalating Energy Costs Savings Pay for Site Enhancements Program Period It IS possible to effectively address your financial and infrastructure issues and environmental stewardship goals by using a performance-based approach to energy services. Read definition In other words, the measures you install to conserve energy and make your facility more efficient will generate both operational and energy savings each year – and these savings are guaranteed by Ainsworth. There is an initial up front cost for the new equipment (such as boilers, chillers and lighting etc)...but these measures generate significant savings over a period of time that will ultimately pay for the project - thereby enabling you to recoup your initial investment. After the generated energy savings have paid for the project, any additional savings would be kept by the municipality to invest as they see fit. The graph on this page illustrates how performance-based energy services work – reference graph 28-Nov-18

Benefits to Performance-based Solutions Fix Existing Problems: Unplanned repairs Building damage Life safety concerns Address environmental stewardship goals (3 R’s) Make Capital Improvements: Capital cost avoidance Equipment upgrades Deferred maintenance Enhance facility conditions There are a number of short and long-term benefits when it comes to choosing a performance based approach to energy services. Some of these include: Existing problems such as: (read slide) and Capital Improvements such as: (read slide) Read next line and explain: When we say ‘assume financial risk’ we mean that Ainsworth guarantees that you will generate energy and operational savings – and these savings will pay for the new measures/equipment that have been implemented in your facility. If the savings we guarantee you are not realized, we will write you a cheque for whatever the difference is. These GUARANTEED savings will enable you to improve the efficiency of your building, enhance productivity and manage asset renewal. Ainsworth assumes the financial risk and GUARANTEES all of the savings, allowing the project to proceed outside of the existing budgeting process. 28-Nov-18

Our Approach We take a holistic approach to your buildings to assure optimum energy usage 1. Optimize savings by taking an integrated view of all building systems Important to understand the interaction of various systems “Cherry-picking” measures will sub-optimize savings 2. Occupant comfort is paramount Measure should not reduce occupant comfort Existing system deficiencies can be corrected When we look at the energy- using systems in your facility, we take what is called a holistic approach. We examine how various energy systems interacts with one another as part of an integrated whole – while at the same time maintaining occupant comfort. For example, we are not going to take a look at your heating and air conditioning systems and suggest that in the winter you turn down the thermostat and in the summer turn up the air conditioner in order to reduce energy consumption…while that may save you some money, it certainly won’t improve staff efficiency – people will be pretty unhappy in fact. So we look at things that can be improved or upgraded such as installing energy efficient lights, high efficiency boilers, etc. Our approach: (read slide) 3. Optimize capital assets Consideration for current equipment life expectancies Savings of individual measures needs to include life cycle analysis (net present value approach) 28-Nov-18

Energy Conservation Measures Our program will target energy conservation measures for all energy dependant systems within your municipality. Facilities: City Hall Public Works Garages Administration Police stations Community centres Arenas Libraries Fire stations Street/traffic lighting Sewage systems Conservation measures: Lighting Heating, ventilation and air conditioning systems Building automation Central plants (chillers & boilers) Building Envelope Insulation Water conservation Process systems Co-generation Our energy services program targets the following energy dependent systems within a building or facility. Some examples include: (read slide) 28-Nov-18

Selecting the Right Partner Select partner Energy Audit: Customer provides utility bills & site visits conducted No Cost Finalize Contract & Apply for Grants Finalize scope and payback criteria Preliminary proposal w/ savings and payback criteria Implement Energy Conservation Project Sign Letter of Intent (LOI) Prepare Feasibility Study Does Proposal make economic sense? Cost of feasibility study rolled into project Monitor & verify savings (on an annual basis) Did we meet payback criteria? NO Annual process for life of guarantee NO This is an overview of how the entire process works. If you are wondering whether your building is energy efficient or an energy hog, we offer municipalities a NO-COST energy audit. This involves us taking a look at 12 months worth of your energy bills and conducting site interviews with maintenance personnel. We then generate a 10-20 page preliminary proposal outlining how much you currently spend on energy, what type/age of equipment you have, our proposed improvements/upgrades and how much in energy and operating costs you will save if you implement our proposed measures – including the payback criteria. (I have included a sample proposal to give you an idea of the document you receive from us at no cost) If the proposal makes economic sense to you then you can choose to move forward with the process. The proposal we provide to you can be used to sell the process internally. If it does not make economic sense to you, you can choose to say no thanks – not interested. If that is the case, we part ways at this point and there is no obligation for you to go forward with anything and there is absolutely no cost to you. (Explain rest of steps using the step 1-5 backup slides) YES Did we meet savings? YES yes No further action, No cost Customer proceeds w/ project YES Customer retains any excess savings no No further action, Do not pay for feasibility study Customer pays for cost of feasibility study Ainsworth pays the difference NO 28-Nov-18

Ainsworth - your ‘Single Source’ Partner Implementation Ainsworth - your ‘Single Source’ Partner Methodology Open Book Project Accounting Includes copies of invoices and labour reports Design Build Process Complete turn - key solution Engineering and drawings Energy audits and feasibility studies Our Capabilities Staff of over 15 engineers and project managers Multiple trades people on staff (400 GTA & 700 nationally) On going monitoring and verification of savings 28-Nov-18

Financial Considerations Contract Defines responsibilities of both parties Establishes baseline performance requirements and a measurement and verification plan Annual savings reconciliation process Designed to guarantee “self-funding” mechanism through entire program period Program Financing Arrange most suitable approach- internal vs. external options (i.e. reserve capital vs. financing). Strategize various cash-flow models. Consider existing operating and capital budgets Consider the impact of available grants and utility rebates If you choose to move forward with an energy conservation program, this slide outlines some of the financial considerations that we work closely with you on including contract and program financing. In terms of the contact: (read slide) Program Financing: (read slide) Municipalities are consistently facing budget pressures and may not have the reserve capital necessary for the initial investment that would be required for such a program. If this is the case, we work with you to design a suitable approach to financing – can be done through an operating agreement over a period of years if necessary. We will also identify which government and retailer grants you are eligible for and work with you to apply for them. The energy project savings are guaranteed….this means that if your facility does not generate the savings we’ve projected then we write you a cheque for the difference = this means there is no risk to you or the municipality that the project will not perform the way we’ve told you it will. Whatever financing option you choose, the performance of the energy project is GUARANTEED by Ainsworth. 28-Nov-18

Summary Performance-based Energy Services: a fiscally responsible solution for your municipality Reduces energy consumption and costs Leveraging energy savings funds required infrastructure Provides opportunity to address deferred maintenance Will improve reliability and comfort Effectively addresses environmental stewardship Pro-active conservation of non-renewable resources Outcomes are guaranteed Performance risk assumed by the ESCO 28-Nov-18