1. Lansing Board of Water & Light REO Town Headquarters & Cogeneration Plant REO Town Cogeneration: Concept to Commercial Operation

2. Agenda  BWL Background  REO Town Firsts  Steam Production Study & Recommendations  Selecting the Design, Build, Startup and Commission team  What we built  Starting Up & Commissioning your own Plant!?  Questions 2

3. BWL Background  The BWL is the largest municipal utility in Michigan and is owned by the citizens of Lansing.  Largest groundwater sourced drinking water system in Michigan (54,900 Customers)  Number of electric customers  82,823 Residential  12,708 Commercial  272 Industrial  Also serve the Lansing downtown district with steam heating and chilled water 3

4. BWL Background (cont’d)  Major steam customers in downtown Lansing include:  GM Grand River Assembly plant  State of Michigan buildings  Cooley Law School  Lansing Comm. College  Accident Fund National HQ  Peak seasonal load of 300,000 lbs/hr of steam  Over 12 miles of steam distribution piping 4

5. REO Town Firsts  First new utility power plant built in Michigan in 25 years  First power plant built by the BWL in 40 years  BWL’s first natural gas-fired electric generating plant  BWL’s first cogeneration plant  Among the cleanest and most efficient plants operating in Michigan and the US 5

6. Steam Production Study  2010 Steam Production Study identified the following:  Four stoker, coal fired boilers ranging in age from 43 to 55 years have exceeded their design life  $32 Million in capital expenditures to replace:  External skin on 3 of 4 boilers  Soot blowers  Economizer and superheater tubes  Upgrade boiler controls 6

7. Steam Production Study (cont’d)  $35-$107 Million in environmental upgrades to comply with forth coming regulations  No guarantee the environmental upgrades to the Moores Park boilers will meet pending EPA regulations, resulting in a loss of $67 - $139 million investment (boiler and emissions control upgrades)  Need for additional electric generating capacity by 2017 due to aging electric units 7

8. Steam Production Study Recommendations  Build a new CHP (Combined Heat & Power or Cogeneration) plant  Beneifts include:  Diversify fuel mix (mostly PRB coal)  Avoid burning 351,000 tons of coal a year  Reduce Mercury & SO2 emissions 99%  Improved efficiency  Lowers NOx emissions by 85% and CO2 by 50% 8

9. Steam Production Study Recommendations (cont’d)  Help exceed the EPA goal of reducing greenhouse gases by 17% by 2020  Major work on the Moores Park boilers could trigger New Source Review  Replace 100 MW of aging coal fired electric generation 9

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11. Selecting the Design, Build, Startup and Commission team  BWL Project Director and Project Manager  Hire an Owner’s Engineer  Architectural & Engineering firm to design the plant  Construction firm to build the plant. Also had the responsibility to hire a Startup and Commissioning Team  BWL Operations staff to participate in startup and early operation of the equipment 11

12. What we built  Plant specifications  (2) GE LM6000 PF/DLE units capable of 50 MW each  (2) Once Through Steam Generators (OTSG) 175 klbs/hr each  (1) Gas Fired Package Boiler 175 klbs/hr  (1) 14.4 MW topping Steam Turbine Generator  (2) 100% Reciprocating Gas Compressors  (3) 50% Boiler Feed and Condensate Pumps  (2) 100% Circulating Water Pumps  (2) 100% Aux Cooling Pumps  (2) 100% Plant Air Compressors  (3) 50% Reverse Osmosis Trains 12

16. 14.4 MW Steam Turbine (Elliott/Hyundai) 16

17. 175 klbs/hr package boiler (Victory Energy) 17

18. Boiler Feed Pumps (Goulds) & OTSG 2 (IST) 18

19. Condensate, Aux Cooling & Circulating Water Pumps 19

20. Reverse Osmosis Trains (US Water) 20

21. Duct Burners on OTSG 1 21

22. GE LM6000 PF/DLE Gas Turbine Package (Unit 1) 22

23. Mezzanine Level Deaerators and Cooling Tower Piping 23

24. Starting Up & Commissioning your own Plant!?  Construction firm lost Startup and Commissioning Manager 2.5 months before Commercial Operation date  Project team elected to have the Plant Engineer assume the role of Startup and Commissioning Manager  Due to project schedule challenges, BWL supplemented the startup and commissioning team with Operators, Instrument Controls Specialists, Controls Engineer, Project Engineer, Maintenance Supervisors, Plant Manager and a Trainer. 24

25. Starting Up & Commissioning your own Plant!? (cont’d)  Major equipment suppliers (ie. GE gas turbines, Boilers, Reverse Osmosis trains, etc.) commissioned their equipment with field technicians supported by the BWL team  We made it! $182 million plant built on time and on budget with a commercial operation date of July 1, 2013. 25

26. Thank you Questions? Rob Hodge Plant Manager rah1@lbwl.com1@lbwl.com 26