1. Green-e Marketplace presents REI’s Kevin Hagen How Green Power Delivers Profit and Value

2. Certify organization’s use of renewable energy and verify associated claims 52 organizations participate nationwide: Intel, PepsiCo, Aveda, SC Johnson, Santa Cruz Organics, Neenah Paper Renewable energy purchased or generated by participants: 114,000 MWh in 2006 2.8 million MWh at the end of 2008 Over 70 unique products display the Green-e logo - 70+ more slated for 2009 Green-e logo use, renewable/climate policy updates, market research, promotional services Why are companies interested in this certification program? Logo is recognizable Consumers, employees, and stakeholders interested in renewable energy 3 rd party certification adds credibility

3. Green Power Delivers Value @ REI Kevin Hagen - Director, Corporate Social Responsibility With thanks to Allison Grappone, MBA in Sustainable Business

4. Consumer co-op founded in 1938 3.7 million active members $1.4B annual sales - 2008 105 Stores in 27 States + REI.com We inspire, educate and outfit for a lifetime of outdoor adventure and stewardship.

5. Sustainability (where mission meets metrics) In 2005, REI’s sustainability efforts moved From random acts of kindness To a frameworks-based strategic focus We look for ways to solve environmental challenges while we make our business stronger Example: Carbon footprint and annual accounting Electricity 22.9% in 2007

6. REI Offset Strategy REI offsets our largest GHG impact, our travel business, with a four year commitment to purchasing over 240,000 RECs from Bonneville Environmental Foundation Climate Neutral Travel

7. Climate Change and Energy Aspiration: to be a climate-neutral company by 2020 2008 electricity usage: 60,600 MWh Developed a three part Energy Strategy

8. Energy Strategy Increase energy efficiency Objective: zero kWh growth Purchase Green Power 20% of total use Financial hedge products On-Site Generation BIPV tested at new locations 11 store PV retrofit program in ‘08

9. Load Growth +22% square feet +9% electricity usage

10. The Next Generation of REI Stores Round Rock, TX store is modeled at 49% below ASHRAE 2004

11. Committed to 100% Qualified Renewable Energy Since 2006 over 25,000 MWh of Green Power deals Over 10,000 MWh/year Converting 6 more stores to Green power in 2009: 2,500 MWh/yr

12. Green Power “Pitch” Utility C&I Customer Base Charge Electrons

13. Green Power “Pitch” Utility C&I Customer Base Charge Electrons Green Price CO2 Benefits “Green” Benefits

14. Green Power Value Proposition Utility C&I Customer Electrons Base Charge

15. Green Power Value Proposition Utility C&I Customer Electrons CO2 Benefits “Green” Benefits Stable Pricing Avoided Fuel volatility Base Charge

16. Green Power Value Proposition Utility C&I Customer Electrons CO2 Benefits “Green” Benefits Stable Pricing Avoided Fuel volatility Premium Pricing

17. Business Value of Green Energy Products RECs or Floating Green power premium Meet CO2, Green goals

18. Business Value of Green Energy Products RECs or Floating Green power premium Full Value Green Product Meet CO2, Green goals Financial hedge benefits Less value Greatest value

19. Business Value of Green Energy Products RECs or Floating Green power premium Capped Premium Tariff with Surcharge Avoidance Full Value Green Product Meet CO2, Green goals Partnership with utility Avoid fossil fuel volatility Financial hedge benefits Less value Greatest value

20. Business Value of Green Energy Products RECs or Floating Green power premium Capped Premium Tariff with Surcharge Avoidance Full Value Green Product Meet CO2, Green goals Partnership with utility Avoid fossil fuel volatility Financial hedge benefits $ 37,531 + 6% $ (116,598) (12.0%) $ (28,402) (12.4%) Net Cost/Benefit Returns $ 665,809$ 852,404$ 200,876 “Brown Power” Pricing $ 628,278$ 969,002 $ 229,279 Actual Spend

21. REI Green Power Requirements 1.Quality Independently verified source and chain of custody Green-e certified 2.Financial value Hedge value Fixed prices Avoided fuel cost adjustments Tariff escalation tied to renewable cost 3.Premium – based on Net Present Value calculation

22. Conclusions 1.Green Power products can (and do) deliver financial benefits as well as “soft benefits” 2.Few suppliers have crafted Green Power products with a complete value proposition 3.Any utility can offer differentiated power products IOU’s, Municipals, co-ops and 3 rd Party providers No deregulation required (but it helps) 4.We need to ask utilities for better products Deliver bottom line results Increase the market for renewable generation

23. www. REI.com/ stewardship REI reports publically on our progress

24. Questions? Kevin Hagen Director, Corporate Social Responsibility REI stewardship@rei.com www.rei.com/stewardship Orrin Cook Senior Analyst Green-e Marketplace Center for Resource Solutions orrin@resource-solutions.org www.green-e.org/marketplace