1. Phoenix Convention Center Phoenix, Arizona Implementing Renewables Through Your Utility Innovation Track 10 Partnering with Your Utility To Do Large-Scale Energy Projects Chandra Shah National Renewable Energy Laboratory August 12, 2015

2. Energy Exchange : Federal Sustainability for the Next Decade Federal Utility Partnership Working Group (FUPWG) - November 3 and 4 in Houston, TX UESC Workshop Nov. 5-6 after FUPWG (in Houston) 2 FUPWG and UESC Workshop

3. Energy Exchange : Federal Sustainability for the Next Decade Presentation Overview Executive Order 13693 renewable goal overviewOptions for implementing renewable projects through your utilityImportant project considerationsUtility coordination recommendations for all renewable projectsExample projectsResources

4. Energy Exchange : Federal Sustainability for the Next Decade RequirementElectric/ThermalDetails Renewable GoalElectric10% FY2016-17 15% FY2018-19 20% FY2020-21 25% FY2022-23 30% FY2025 and thereafter “Clean Energy” Goal (renewable & alternative energy) Electric & Thermal10% FY2016-17 13% FY2018-19 16% FY2020-21 20% FY2022-23 25% FY2025 and thereafter Definition of “New” for Renewable Energy Certificates (RECs)* REC definition states that “for the purposes of section 3(d)(iii) and (iv) of this order, were produced by sources of renewable energy placed into service within 10 years prior to the start of the fiscal year” Executive Order 13693 “Planning for Federal Sustainability in the Next Decade” (March 2015) *If project RECs are sold, replacement RECs must be purchased that meet the definition

5. Energy Exchange : Federal Sustainability for the Next Decade Revokes various EOs and Presidential Memos - including EO13423, EO13514 and December 5, 2013 Presidential Memo Federal Leadership on Energy Management Renewable Priorities (Section 3) (i) installing agency-funded renewable energy on site at Federal facilities and retaining corresponding RECs or obtaining equal value replacement RECs (ii) contracting for the purchase of energy that includes the installation of renewable energy on site at a Federal facility or off site from a Federal facility and the retention of corresponding RECs or obtaining equal value replacement RECs for the term of the contract (iii) purchasing electricity and corresponding RECs or obtaining equal value replacement RECs (iv) purchasing RECs Double Bonus Credit for renewable electric energy generated on Federal or Tribal land/facilities (per EO13693 Implementing Instructions, p. 26) Executive Order 13693 “Planning for Federal Sustainability in the Next Decade” (March 2015)

6. Energy Exchange : Federal Sustainability for the Next Decade Utility Partnership Options Government Ownership Utility Energy Service Contract (UESC) with renewable ECM, either stand-alone or bundled with other ECMs Project implemented using appropriations, in partnership with the utility Private Ownership Utility energy sales agreement Federal agency hosts renewable project for utility use UESC with private ownership of renewable ECM – Must meet OMB title retention requirement Notes Fair consideration must be given to each serving utility All renewable projects (regardless of implementation method) require close coordination with the utility

7. Energy Exchange : Federal Sustainability for the Next Decade Utility Energy Sales Agreement Contract with the serving utility – Utility (or renewable developer) constructs, owns, operates & maintains an on-site renewable project and federal agency purchases the electricity – Utilize FAR Part 41 Utility Service (rather than the UESC authority) GSA authority GSA areawide contract can be used – Department of Defense can use 10 USC 2922a long term authority Contract should specify REC ownership (utility may want RECs for renewable requirement compliance) – If utility keeps RECs, then agency must purchase replacement RECs for credit towards RE goal Renewable project owner can take advantage of available tax incentives

8. Energy Exchange : Federal Sustainability for the Next Decade Hosted Renewable Project for Utility Use Utility develops renewable project at federal site for utility use, usually for renewable portfolio standard (RPS) compliance – Utility owns, operates and maintains RE project – Real estate agreement – Utility provides payment or in-kind consideration for use of land – In-kind consideration options include energy, RECs, a smaller renewable project for agency use, electrical infrastructure, energy security benefits such as right of first refusal in case of grid outage

9. Energy Exchange : Federal Sustainability for the Next Decade Partnering to Respond to Utility Renewable/REC RFP Utility issues renewable/REC RFP Site seeks industry partner to respond to RFP Industry partner responds to RFP (may be joint bid with federal site) Could be electricity contract and/or real estate agreement Utility will own the RECs (replacement REC purchase required for E.O. 13693 renewable goal) Examples: Brookhaven, Ft. Carson, NREL Cons – Tough to predict timing of utility requirements – Team must be ready to spring into action Utility RFP Federal Site hosts third party owned and operated RE resource Developer constructs RE resource on Federal land/building and sells RECs/renewable energy to utility RECs/renewable energy

10. Energy Exchange : Federal Sustainability for the Next Decade Utility Partnership Advantages/Challenges

11. Energy Exchange : Federal Sustainability for the Next Decade Project Considerations and Utility Coordination

12. Energy Exchange : Federal Sustainability for the Next Decade Project Considerations Site and agency approval requirements Real estate agreement options include easement, lease or license – Utilities generally prefer an easement – FAR Part 41.501c4 (52.241-5 Contractor’s Facilities), which provides for a license, may be used Compliance with National Environmental Policy Act (NEPA), National Historic Preservation Act (NHPA), etc. Electrical considerations Glint/glare if near an airport Others

13. Energy Exchange : Federal Sustainability for the Next Decade Utility Coordination (regardless of implementation option) Contact the utility early in the process and periodically throughout project development. Discussion topics include: – Interconnection process and requirements – application and study requirements, the time required for study completion, costs (application fee, study fees, possible equipment upgrade costs) and the current queue for interconnection study completion – Interconnection agreement – legal review template agreement early in process, contact FEMP for assistance – Renewable system tie-in options – Available incentives – Applicable policies such as net metering, feed-in tariff, virtual net metering/community renewables – Utility rate impacts – possible tariff change, standby charges, etc. – Demand charge impacts if project goes down Best to be very conservative with demand charge reduction estimates (10% recommended)

14. Energy Exchange : Federal Sustainability for the Next Decade Example Projects

15. Marine Corps Logistics Base Barstow Wind Project  1.5 MW wind turbine  $4.6 million cost financed by Southern California Edison  $6.1M total, minus $1.5M rebate  $515k annual savings  15 year term Example: UESC (gov’t ownership)

16. Energy Exchange : Federal Sustainability for the Next Decade Partnership with Tucson Electric Power (TEP), who will fund, own and operate the approximately 22 MW DC PV project – Subcontract with industry partner E.ON for the system’s design, engineering, procurement and construction management Utilizes existing GSA areawide contract TEP will provide electric service at Arizona Corporation Commission approved rates 30 year easement Fort Huachuca, Arizona

17. Energy Exchange : Federal Sustainability for the Next Decade NEPA completed March 2014 Interconnected with TEP-owned Fort Huachuca substation April 25, 2014 ground-breaking ceremony November 2014 operational http://www.armyeitf.com/downloads/fort_huachuca_fact sheet.pdf http://www.armyeitf.com/downloads/fort_huachuca_fact sheet.pdf Fort Huachuca, Arizona

18. Energy Exchange : Federal Sustainability for the Next Decade 50 MW biofuel-capable plant at Army Schofield Barracks in Hawaii Partnership with Hawaiian Electric Company (HECO) – Construction, ownership, operation and maintenance of plant and a 46 kV sub-transmission line to connect plant to HECO grid – 10.3 acre land lease – 2.5 acre interconnection easement on Schofield Barracks and adjacent Wheeler Army Airfield Schofield Generating Station Project

19. Energy Exchange : Federal Sustainability for the Next Decade Army benefits: – Help achieve Army goals of producing renewable energy on Army-owned real property – Enhance energy security for Schofield Barracks, and adjacent sites Wheeler Army Airfield and Field Station Kunia HECO benefits: – Quick-start facility – Help maintain grid stability – Contribute to grid reliability and continuity if: 1)Tsunami/other natural disaster, due to location away from the shoreline 2)Man-made threat, since located within a secured military installation – Progress towards Hawaii’s Renewable Portfolio Standard Schofield Generating Station Project

20. Energy Exchange : Federal Sustainability for the Next Decade Environmental Impact Statement (EIS) in progress – Will satisfy both federal National and Hawaii Environmental Policy Acts (NEPA and HEPA) – Will integrate National Historic Preservation Act Section 106 consultation and public participation requirements – January 17, 2014: Notice of Intent published in Federal Register – Jan. 17- March 2, 2014: Scoping period – April 24, 2014: Draft EIS issued – April 24- June 8, 2015: 45 day public comment period http://www.garrison.hawaii.army.mil/schofieldplant/ Schofield Generating Station Project

21. Energy Exchange : Federal Sustainability for the Next Decade BNL serves has PV array host BP is solar project developer 20-year contract between solar developer and utility for purchase of 100% of output and RECs 20-year easement between BNL and solar developer In-kind consideration - small PV project & research Peak capacity 32 MW AC, ground-mounted Annual Energy Output 44 million kWh 200 acres of land, ~160,000 panels Crystalline solar PV modules Energize date November 2011 DOE Brookhaven

22. Energy Exchange : Federal Sustainability for the Next Decade Partnership between NASA and Florida Power & Light MOU signed December 2007 EUL signed June 2008 10 MW FPL-owned PV project – Output feeds into FPL transmission system – Substation expansion required In-Kind Consideration - 990 kW NASA- owned PV – Based on appraised value – FPL construction – Output feeds into NASA-owned distribution system 130 mph wind standard NASA Kennedy Space Center and Florida Power & Light

23. 23 Project Summary Nellis AFB PV Array II Hybrid Power Purchase Agreement and Enhanced Use Lease Local utility company (NV Energy) will build, own, and operate solar PV array Anticipate 19 MW PV array on leased area of 122 acres Will purchase approx 55% of total production at existing tariff rate All power will flow through the Nellis AFB Power not used by Nellis AFB will go to the grid NV Energy will own/sell Renewable Energy Certificates (RECs) Contemplated lease (payment in kind) is secondary substation Will afford Nellis with much needed energy resiliency/mission assurance by providing redundant primary electric feed to base Will provide secondary output path to solar PV generating plant by two distribution feeders that will connect to existing substation Lease signed 1 Mar 15

24. 24 Project Summary Nellis AFB PV Array II Collaborative effort between Nellis AFB (99 ABW), Air Combat Command (ACC), Air Force Civil Engineer Center (AFCEC), and Air Force General Counsel (SAF/GCN) 99 ABW conducted National Environmental Policy Act process, gained acceptance from with other agencies, and coordinated with NV Energy ACC evaluated economic viability, mission impact/encroachment issues, and provided expertise for PPA AFCEC provided overall project oversight and served as liaison with senior AF leadership for execution and scheduling AFCEC and SAF/GCN led real estate actions and lease development

25. Energy Exchange : Federal Sustainability for the Next Decade FEMP Contacts and Resources

26. Energy Exchange : Federal Sustainability for the Next Decade David McAndrew: 202-586-7722, david.mcandrew@ee.doe.govdavid.mcandrew@ee.doe.gov Chandra Shah: 303-384-7557, Chandra.Shah@nrel.gov GSA Areawide Contract Information: http://www.gsa.gov/portal/content/184635http://www.gsa.gov/portal/content/184635 FEMP Trainings: http://apps1.eere.energy.gov/femp/training/http://apps1.eere.energy.gov/femp/training/ FEMP Project Funding Web Site: www1.eere.energy.gov/femp/financing/mechanisms.html www1.eere.energy.gov/femp/financing/mechanisms.html Renewable Project Financing Mechanisms: http://energy.gov/eere/femp/financing-mechanisms-federal-renewable-energy- projects UESC Resources (some information applicable to other utility partnerships): http://www1.eere.energy.gov/femp/financing/uescs_resources.html http://www1.eere.energy.gov/femp/financing/uescs_resources.html Resources

27. Energy Exchange : Federal Sustainability for the Next Decade Questions?