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2011 ADC WINTER FORUM | PAGE 2 Developing Renewable Energy Projects on DoD land Angela Maybrier, Booz Allen Hamilton Grand Hyatt/San Antonio TX Wednesday, February 16 th 2011
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2011 ADC WINTER FORUM | PAGE 3 Agenda Overview EUL Program – Developer’s Perspective Site Selection Challenges Road Blocks to Success Energy EUL (E-EUL) Dynamics Goals Incentives Procurement Options Key Drivers Recommendations and Take-Aways Questions & Answers
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2011 ADC WINTER FORUM | PAGE 4 Overview Developments on DoD land have both upsides and downsides vs. other land use tools Every EUL competes with every other land and/or energy deal in its market Developer and Land Owner have similar motivations Gaining the most value from the land asset as quickly as possible Development deal is not an emotion, it’s a number – does the project pencil?
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2011 ADC WINTER FORUM | PAGE 5 Site Selection and Development Challenges Incomplete NEPA and/or unrealistic timelines Limiting development options Size – parcels of land too small, non-contiguous or unusual perimeter Location – interior of installation brings security, mission impact, or marketability into question Proximity to necessary infrastructure for type of development Lack of key stakeholder buy-in participation Commercial viability
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2011 ADC WINTER FORUM | PAGE 6 Roadblocks to Success Multiple Stakeholder Interests Potential opposing interests Property Valuation Land has no intrinsic value Value = Land’s ability to generate cash flow Cost should be discounted by how much investment needs to be made and the risk associated with the project Time is Money – Certainty of Schedule Upfront payment and delayed approval limits developers’ ability to obtain necessary ROI
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2011 ADC WINTER FORUM | PAGE 7 Energy EUL (E-EUL) - Dynamics Define Goals: Revenue or Purchase of Power Energy Independence Executive Order Requirements Incentives Tax Credits Tax-Exempt Bonds Renewable Energy Credits Community Involvement Local University Local Utility Local Economic Development Corporation
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2011 ADC WINTER FORUM | PAGE 8 Additional Procurement Options
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2011 ADC WINTER FORUM | PAGE 9 Key Drivers – EUL and E-EUL Clearly Identified Project Champion Champion for both the real estate/lease component as well as potential PPA negotiations No ambiguity about NEPA or other environmental and permitting transmission issues – bad news does not get better with time Apparent unified support for project through the Chain of Command Market compatibility/desirability of location
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2011 ADC WINTER FORUM | PAGE 10 Recommendations Complete Finding of Suitability to lease (FOSL), and supporting documents for necessary NEPA process early Pre-educate Deal Team on deal challenges Consistency in selection criteria Make sure ALL stakeholders know what is proposed Establish timelines based on key milestones Development concepts synergistic to installation mission Local Community Support Quality not Quantity of projects Energy-related projects RFQ for Regional Developer Partner
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2011 ADC WINTER FORUM | PAGE 11 Key Take-Aways F lexibility – nothing else can make a deal work or fail faster Deal Teams need to understand market fluctuations Realize project marketability can change during Business and Lease Plan Process and/or Lease and Management Plan Process Alignment of financial interests Realistic financial expectations Continuous dialog and trust Timing and schedule Quality of opportunity and development team
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QUESTIONS + ANSWERS Contact: Angela G. Maybrier Booz Allen Hamilton Tel: 210-932-5604 Mobile: 210-334-1741 Email: Maybrier_Angela@bah.com
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