1. The New Energy Bill: Tax Deductions for Energy Efficient Construction and Renovation December 7, 2005 Audio Seminar

2. Featuring David Goldstein Energy Program Director Natural Resources Defense Council Joseph Mikrut Partner Capitol Tax Partners, LLC Kyle Pitsor Vice President, Government Relations National Electrical Manufacturers Association

3. What is the Deduction? Tax Incentives for 50% Savings Compared to ASHRAE 90.1-2001 Baseline. 50% is ambitious but achievable: NRDC has achieved this goal and saved money in 6 out of 6 of our building renovations.

4. Availability of the Deduction Incentive of a $1.80 per Square Foot Deduction Makes This Incentive Available to REITs. Incentives are Available to All Applicants starting January 1, 2006 through 2007. There is No Limit for the Amount of Money Available for This Incentive. Extenders may increase eligibility through 2010.

5. Applicability Commercial Buildings Includes Public Buildings Such as Schools as Well as Rental Housing. Rental housing must be within the scope of ASHRAE 90.1 Must be four stories or higher

6. Availability of the Deduction One-Third of the Incentive is Available Separately for Each of the Main Building Systems: Envelope--$0.60 HVAC--$0.60 Lighting--$0.60 Interim Targets for Lighting Make These Available Almost Immediately.

7. How Do You Qualify?: Technologies I Compliance is similar to energy codes such as the IECC or ASHRAE 90.1. Technologies that are credited include: More efficient cooling and water heating equipment Better controls than required by code Reductions in losses from ducts and fans Better insulation and windows Reducing or eliminating simultaneous heating and cooling More efficient luminaires, ballasts, and lamps, and selection of more efficient light sources

8. How do you Qualify?: Technologies II Flexibility for Credit Energy Savings from a Wide Variety of Technologies and Designs: Daylighting Commissioning CHP Renewables Semi-Conditioned Spaces Low-Pressure Duct Systems

9. How Do You Qualify?: Procedures How Do You Qualify?/Who Benefits? Follow processes and procedures that are familiar. Third party inspectors are like California T24 consultants: a system that works. Calculations are simple and standardized. Tax deduction goes to the company that owns the construction – could be tenant for some systems.

10. Why the Deduction is Valuable How Do You Qualify?/Who Benefits? (cont.) Efficient buildings typically pay back in 4 years or less – good economics even without incentive – but the presence of incentive makes it easier to procure efficient equipment and design services. Low operating costs and a better building should allow tenants to pay higher net rents.

11. How the Deduction Benefits BOMA Members I It provides extra financial assistance in meeting energy savings goals It focuses vendors on the highest levels of efficiency Getting owners, managers, and operators to agree that energy is important enough to provide budget for efficiency

12. How the Deduction Benefits BOMA Members II Overcomes current barriers to energy efficiency: Lack of information or experience about why high- performance buildings are better for the occupant, as well as saving money BOMA is working to address this problem through the BOMA Energy Efficiency Program (BEEP). BEEP is an operational excellence program designed to educate CRE owners and managers about the financial and environmental benefits of improving energy efficiency. www.boma.org/aboutboma/beep

13. How the Deduction Benefits BOMA Members III Overcomes current barriers to energy efficiency: Lack of professional expertise or equipment to meet ambitious goals. BOMAs Office Building Show will include a Green Pavilion that will feature energy efficient products, services, and professional experts. The conference will also include a Green track for education, featuring courses that focus on best practices for energy efficiency, sustainability, and environmental stewardship.

14. Transforming Markets Because of these barriers, fewer buildings are as energy efficient as they should be The lack of demand for efficiency is reflected in the lack of markets for improvements

15. Transforming Markets II Incentives create expectations up and down the supply chain that high levels of efficiency will be sold; therefore More designers will be competing for how they can achieve advanced goals, and More efficient equipment will be available and prices will be more competitive

16. Market Barriers: NRDCs Experience I We had to select architects and engineers who specialized in innovative energy efficiency solutions Even then, we had to constantly advise them about design choices and review their decisions While we could install most of what we wanted, some products were so hard to find that additional savings were forgone

17. Market Barriers: NRDCs Experience II These problems became less significant over time as markets adjusted to providing higher efficiency This adjustment was most pronounced in places like California where utilities were already promoting energy efficiency

18. Question and Answer Session Follow instructions to ask questions of David, Joe and Kyle

19. Guidance on Meeting Advanced Energy Targets New Buildings Institute (NBI) provides valuable resource material: Advanced Buildings Suite: Benchmark Benefits Guide Reference Guide Advanced Lighting Guidelines These documents describe processes for designing with energy efficiency as well as architectural and engineering choices All documents are available for purchase at www.newbuildings.org. www.newbuildings.org

20. US EPA ENERGY STAR ® ENERGY STAR offers guidelines for energy management and improving energy efficiency Includes online national energy performance rating system to benchmark energy performance Provides no-cost training programs geared toward commercial real estate professions Also includes an online directory of product and service providers

21. US EPAs Energy Star Program Collaborating with BOMA to develop Energy Efficiency Program An Energy Star Showcase will be featured alongside the Green Pavilion at BOMAs Office Building Show

22. Enhancing Cost Effectiveness Architectural team and engineering team can work together in the earliest designing stages to identify integrated efficiency strategies that save construction costs. With integrated design, 50% savings can be achieved without any increase in first cost The design itself is more expensive, and the building envelope may cost more, but the HVAC system can be smaller and often simpler, reducing costs even more.

23. Working Together Consortium for Energy Efficiency (www.cee1.org) is working with private sector companies and trade associations to provide information on how to comply.www.cee1.org

24. CBTD Coalition Focus NEMA & the Natural Resources Defense Council successfully advocated and shepherded the provision through the legislative process Implementation requires us to promptly get the regulatory rules right and to vigorously promote the provision NEMA has brought together a broad stakeholder coalition representing building owners, designers, manufacturers, distributors, installation contractors, efficiency advocates, and government to work together to ensure success

25. Progress to Date Coalition meetings held on 10/13 & 11/1/05 with organizations; another scheduled for 1/5/06 Press participation in 11/1 meeting 40 organizations represented Website devoted to the CBTD to be launched 12/15; www.efficientbuildings.org Communications plan developed to serve as CBTD clearinghouse Met with DOE on software and personnel certification, recommendations to DOE 11/18 NEMA has prepared a tri-fold pocket guide to the deduction, which is on the NEMA website, www.nema.org

26. Final Question and Answer Session Follow instructions to ask questions of David, Joe and Kyle

27. Contact information: David B. Goldstein, Ph.D. Natural Resources Defense Council (415) 875-6177 dgoldstein@nrdc.org Joseph Mikrut Capitol Tax Partners (202) 289-8700 mikrut@capitoltax.com Kyle Pitsor National Electrical Manufacturers Association (703) 841-3274 kyl_pitsor@nema.org* *This is not a typo

28. MARK YOUR CALENDARS! Want more information on this topic? Plan to attend BOMA Internationals North American Commercial Real Estate Congress and The Office Building Show where well have updates and additional education on the Energy Bill! When: June 24-27 Where: Dallas, TX For more information visit: www.bomaconvention.org or call www.bomaconvention.org 202-326-6341.