1. 1 Digesters for Managing Animal Waste Workshop August 21, 2002 Bill Johnson, Alliant Energy

2. 2 Alliant Energy n n We serve approximately 53,000 ag customers in a four-state territory. n n Alliant Energy Resources, Inc., our non-utility business, has operations in Australia, Brazil, China, Mexico and New Zealand n n 6,000 employees in U.S. and internationally

3. 3 Generation diversity n n Coal n n Natural Gas n n Renewable energy sources n n Distributed resources == Reliability

4. 4 Why Alliant Energy ? n n 53,000 farm accounts, large rural utility n n Believe in removing economic barriers n n Rural economic development n n Believe in distributive generation n n Strong environmental ethic n n Tradition of working with the development of ag. energy technologies

5. 5 Food processing industry environmental challenge

6. 6 Seneca Bio-digester Montgomery, Minn.

7. 7 Alliant Energy’s - Wisconsin Biogas Project n n 10 MW generation n n Farm, food processor, landfill & sewage treatment sources n n 3-year project n n 5-year contracts n n 6 cent/kWh (customer owned)

8. 8 10 Megawatts ? n n 50,000 tons of coal each year n n 500 coal cars n n 5 unit trains n n Electricity for 11,000 homes

9. 9 Pilot Project Objectives n n Access digester technologies n n Access generation technologies n n Remove technology barriers n n Evaluate utility barriers n n Access market potential n n Increase demand for “green energy”

10. 10 Deere Ridge Farm, Anaerobic Digester, Amherst, Wis.

11. 11 Double S Dairy, Alto, WI n n Flush system n n Plug flow n n Hess gen-set n n Separated solids for bedding and sale

12. 12 Topdeck Holsteins Westgate, IA

13. 13 Microturbine

14. 14 Engine Monitoring and Switchgear

15. 15 Reciprocating Engine

16. 16 Heat Recovery System n n Utilize heat from exhaust of engine or microturbine n n Heat digester n n Heat buildings n n Heat hot water heater n n Heat anything else that needs hot water n n Refrigeration

17. 17 Biomass Lessons Challenges and Opportunities

18. 18 Lessons Learned n n Digester designs n n Corrosion n n Pre-heating costs n n Soft vs. hard top n n Local labor and skills n n Gen-set O&M costs n n Dewatering n n Customer expectations n n Bedding requirements n n Niche market opportunities n n BUYER BEWARE, DO YOUR HOMEWORK!

19. 19 Barriers to Development of Renewable Energy Technology n n Technology must be solution for the customer and add value to their business n n High-risk technologies for customer and utility investment n n Utilities have an obligation to energy cost and reliability n n Few dominant companies, largely a cottage industry, except for wind

20. 20 Economic Barriers n n Utilities must satisfy many stakeholders: customers, shareowners, regulators, interest groups n n Must weigh “price is everything” vs. “environment is everything,” must blend needs n n Marketplace drives price, there must be greater demand n n Risk management, need rewards for investment risks

21. 21 Social – Political Barriers n n NIMBY’ism n n “big is bad” attitudes n n Should societal benefits be paid for by society or by utility owners and their customers? n n Many political uncertainties…DOE, USDA, EPA, State/Local Regulations…

22. 22 Institutional Barriers n n Uniform interconnection standards across utility and state jurisdictions n n Net metering n n Insurance requirements n n Some utilities charge high access and/or interconnection fees n n Lack of renewable energy credits n n Difficulty with customer aggregation

23. 23 Market Barriers n n Dependency on local utility n n Access to transmission system can be expensive and complex n n Limited “green power” program participation n n Smaller generators have market disadvantages n n Risk, purchasing power from inexperienced energy provider

24. 24 Biomass Project Success Requires n n Favorable power purchase agreements n n Partnership development n n Predictable cash flow n n Market for secondary products n n Tradable “green qualities” n n Incentives de-coupled from cost of fossil fuels n n Access to financing

25. 25 Opportunities n n Utilities and customers partnering in addressing environmental and energy challenges n n Monies from commodity purchase stays in local communities n n May allow delaying or avoidance of utility infrastructure investment n n Convert environmental liability into economic assetsr

26. 26 Public Policy “… We have only scratched the surface of developing farm-based sources of renewable energy—ethanol, biodiesel, biomass, wind, methane, hydrogen. Agriculture is not just about food and fiber. Anything we can produce from a barrel of oil, we can also produce on our farms.” -- -- Sen. Tom Harkin, IA, Senate Agriculture Committee, June 28, 2001

27. 27 Philosophies “ “ Be a price maker not a price taker.” --Loren Kruse “Grow what you can sell, don’t sell what you can grow.” -- --Duane Acker

28. 28 William A. Johnson Manager, Agriculture Customer Services Alliant Energy 2777 Columbia Dr. Portage, WI 53901 (608) 742-0824 billjohnson@alliantenergy.com