www.timmons.com

Commonwealth Wind?Not Common Yet!

Virginia Onshore Wind…..Changing DirectionDon Giecek

October 16, 2013

U.S. Wind Power Snapshot

1. Wind provided 43% US capacity additions in 2012

2. Iowa 25%, South Dakota 24%, Kansas 20%

3. Long term PPA’s signed in 2011/2012 averaged $0.04 per kWh

4. MAKE Consulting predicting 85% decrease in US capacity additions for 2013

2www.timmons.com

Wind Power In Virginia 2007-2013

1. 2007 reregulation initiated RPS Goal

2. PJM queue reached approximately 900MW in 2010

3. PJM queue now @ 258MW (4 projects)

4. Projects have been withdrawn from the queue in Accomack, Northampton, Botetourt, Roanoke, Wise

5. DEQ’s PBR creates predictable permitting

6. RPS GOAL is not an economic driver, counts pre-existing facilities, stimulates no VA jobs

7. Why don’t local ordinances require 2X setbacks from telephone poles?

3www.timmons.com

CHANGING DIRECTION

You don’t need a weatherman to know which way the wind blows

Distributed (Community Scale) Wind Market- U.S.

1. Behind the meter OR grid connected

2. Direct reduction of utility bills OR hedge against volatile fossil fuel costs

3. Water supply, water treatment, military sites, telecommunication facilities, remote homes

4. Cumulative distributed capacity 812MW

5. 2012 new capacity 138MW

5www.timmons.com

Envisioning a Community Scale Market in Virginia

1. Wastewater treatment, schools, military, manufacturing

2. Large loads behind the meter, reducing demand charges

3. EPA Green Power Top 50

4. Willing to pay premium for green attributes

5. Whole Foods, Wal-Mart, Unilever, Apple, Lockheed Martin

6. Renewable Generation Pilot participants (existing program illustrates demand)

6www.timmons.com

Existing VA Policies Affecting Community Wind

5 MW and below PBR fast track permitting

DEQ Clean Water Revolving Loan Fund (VRA)

DMME Revolving Loan Fund (VRA)

Agricultural Net Metering (capped at 500kw)

7www.timmons.com

Foundation Windpower/Anheuser BuschCase Study

1. 1.5MW GE turbine behind the meter CA installation

2. 6 mps wind, 25% capacity factor

3. Assumption- @ $70mwh= $4,564,000 revenue over 20 year period (not counting REC’s)

4. Anheuser Busch planning second turbine installation

8www.timmons.com

3 Steps to Jumpstart VA Distributed Wind Market

1. Raise PPA pilot project ceiling to 5MW

• Installed costs + maintenance do not achieve desired rate of return with VA wind resource and 1MW project ceiling

• Current limitation does not represent consistent public policy and acts as a barrier to development

2. State facilities to evaluate distributed opportunities (all renewables)

• By legislation or executive order

3. Iowa Transferrable Tax Credit (NOT a grant)

• 1.5 cents per kWh, no cost to utilities

• Applied towards state personal or business income tax, financial institutions tax