PACIFICWEST ENERGY SOLUTIONS, INC.

Energy Efficiency and Conservation Strategies

PATRICK A. WELLER, LEED APEXECUTIVE VICE PRESIDENT

The American Recovery and Reinvestment Act

AMERICAN RECOVERY AND REINVESTMENT ACT On February 17, 2009, President Obama signed into law the American Recovery

and Reinvestment Act (ARRA) of 2009, H.R. 1. The spending and tax-cut plan is intended to help stabilize state budgets and spur economic growth. The stimulus package commits a total of $787 billion nationwide. California share (AS OF JULY 16, 2009) for Energy and Climate Programs: $1,587,212,344 ($1.6B)

ENERGY PROGRAM APPROPRIATIONS (DIVISION A)

Efficiency & Conservation Block Grant Program, State Energy Program, Smart Grid, Energy Weatherization Assistance Program, Alternative Fueled Vehicles Program (Clean Cities), Energy Efficient Appliance Rebate Program & Energy Star® Recovery Funding…

TAX INCENTIVE PROVISIONS (DIVISION B)

Clean Renewable Energy Bonds, Long-term Extension and Modification of Renewable Energy Production Tax Credit, Tax Credits for Energy-Efficient Improvements to Existing Homes, Temporary Election to Claim the Investment Tax Credit in Lieu of the Production Tax Credit, Qualified Energy Conservation Bonds…

CALIFORNIA ENERGY AND CLIMATE RECOVERY PROGRAMS U.S. Dept. of Energy Office of Energy Efficiency and Renewable Energy

Energy Efficiency and Conservation Block Grant - $302M for LC&C Clean Cities Program

California Energy Commission Energy Efficiency and Conservation Block Grant - $29.8M for SC&C State Energy Program (SEP) – $226M State Energy Efficient Appliance Rebate Program (SEEARP) – $35.2M

California Department of Community Services and Development Weatherization Assistance Program – $185M

Bids directly through U.S. Dept. of Energy DOE Competitive Financing Program

ENERGY EFFICIENCY AND CONSERVATION STRATEGIESA. Technical Consulting Services

Strategic Planning Investment Grade Audit Reports EECBG Application Solar Photovoltaic Consulting AB 811 Program Development

B. Budget Reduction Programs Energy efficiency measures with short term paybacks Positive cash flow transactions Meets CEC cost-effective /GC 4217 requirements

C. Comprehensive EE/RE Programs Longer term paybacks Energy and operational savings Renewable and capital improvement measures Sustainable public building and community programs Alternative Project Funding Options

Comprehensive Energy and Environmental Programs for SC&C

AN EECBG CASE STUDY

ENERGY EFFICIENCY AND CONSERVATION BLOCK GRANT

Department of Energy, State and Local Grant Allocations (LC&C), CLOSE DATE: August 10, 2009 - $302M Attachment D: Energy Efficiency and Conservation Strategy

1. Goals and Objectives2. Implementation Plan3. Collaborations with adjacent units of governments4. Communications to state on the maximized use of funds5. Describe benefits beyond the EECBG funding period6. Describe auditing and monitoring for transparency and

accountability.

ENERGY EFFICIENCY AND CONSERVATION BLOCK GRANT Preliminary Guidelines for Small Cities and Counties, FORMULA-

BASED GRANTS - $29.8M (60% of $49.6M to SC&C) 265 small cities and 44 small counties eligible for this funding Energy Commission will issue a solicitation document Eligible applicants will apply to the Energy Commission A sample funding award agreement is developed by SC or C Governing Board Documentation Projects will be screened for completeness and then evaluated for

eligibility and technical accuracy only Funding Formula: Base Population Calculation with an Unemployment

Adder Project Funding: EECBG, ARRA SEP, Energy Efficiency Loan Program

Funding (3%), Incentives for Energy Efficiency and Renewables and Private Sector Funding (Tax-Exempt Municipal Lease) (4.5% ?!)

PERFORMANCE CONTRACTING SOLUTIONS A procurement methodology of financing a capital and

operational improvement project within the constraints of City existing budgets. Project finance for facility improvements is paid for by guaranteed savings.

Capital Budget Facility Infrastructure Upgrade Technology Infrastructure Upgrade

Operational Budget Utility Maintenance Technology Communications

POSITIVE CASH FLOW TRANSACTIONS

EECBG PROGRAM DEVELOPMENTPHASE 1 – STRATEGIC PLANNING (2 - 3 Weeks)PHASE 2 – PROJECT DEVELOPMENT (3 - 6 Weeks)PHASE 3 – PROJECT FINANCE (2 Weeks)PHASE 4 – PROJECT DELIVERY (4 - 8 Weeks)

BASIC PROJECT INFORMATION Customer Authorization and Release Forms One year of utility bills or online password Utility Representatives (Electricity, Water, Heating Fuel, Waste) Site Maps of All Facilities Square Footage of All Facilities Facilities Access w/Key Contacts Previous Energy Audits Number of Occupants & Operating Schedules

BENCHMARKING

Courtesy NREL

COMPREHENSIVE ENERGY AND ENVIRONMENTAL PROGRAMS

Courtesy NREL

PACIFICWEST ENERGY AND ENVIRONMENTAL PROGRAMA. Technical Consulting Services

Investment Grade Audit Report Solar Photovoltaic Consulting AB 811 Program Development EECBG Application

B. Budget Reduction Program Computer and Vending Controls Lighting retrofits and controls. Street lighting and traffic signal retrofits. Heating, ventilation and air conditioning (HVAC) modifications and controls. Automated energy management systems, motors, variable speed drives and pumps.

C. Comprehensive EE/RE Programs Budget Reduction Program Heating, ventilation and air conditioning (HVAC) replacements Weatherization (Window Replacements) Solar Photovoltaic System (50 kW)

FINANCIAL OPTIONS AND ANALYSIS (POP: 20,000, UA RATE 11.5%)Budget Reduction Comprehensive

Total Project Cost $ 202,752 $ 899,003

EECBG Grant $ 111,500 $ 111,500

Utility Rebate/Incentive $ 13,755 $ 90,378

Total Loan/Lease Amount $ 91,252 $ 787,503

Program Term (Yrs) 10 20

Simple Payback 7 16

Annual Lease Payment $ (10,697) $ (60,540)

Total Program Savings $ 780,538 $ 1,464,283

Interest Rate 3.0% 4.5%

Internal Rate of Return 16.7% 5.0%

Net Present Value $ 288,126 $ 43,443

kWh Savings (Equiv) 230,000 315,000

Jobs Created 2 10

COST OF DELAY

Traditional and Alternative Project Funding

TRADITIONAL PROJECT FUNDING SOURCES

TRADITIONAL TRANSACTION PARTICIPANTS

NEW SOURCES OF PROJECT FINANCE/TAX MONETIZATION INTERNAL FINANCING

General Funds Revolving Funds

UTILITY RESOURCES Incentives for Renewables and Efficiency

PUBLIC RESOURCES Municipal Bond

CREBs CEC Low Interest Loan

PRIVATE RESOURCES Performance Contracting Tax-Exempt Municipal Lease Solar Power Purchase Agreement

NON PROFIT GRANT PROGRAMS ENERGY PROGRAM APPROPRIATIONS (DIVISION A)

Weatherization Assistance Program State Energy Program Energy Efficiency and Conservation Block Grant

Program

TAX INCENTIVE PROVISIONS (DIVISION B)

Renewable Energy Electricity Production Tax Credit (PTC)

Investment Tax Credit (ITC) in Place of the PTC Grants in Place of Tax Credits Business ITC, Repeal of Limit with Subsidized

Financing Business ITC, Repeal of Credit Caps Clean Renewable Energy Bonds (CREBs) Energy Conservation Bonds (ECBs) Labor Standards for Energy Bonds Energy Efficiency Tax Credits Efficiency Improvements to Existing Homes Efficiency and Renewables Equipment, Credit

Limit Advanced Energy Manufacturing Facility Parity for Transportation Fringe Benefits Alternative Fuels & Vehicles Tax Credits Alternative Fuel Refueling Infrastructure Tax

Credit

SOLAR POWER PURCHASE AGREEMENTS

Courtesy : The Rahus Institute

STRATEGIC PLANNING INFORMATION

Ask about PACIFICWEST’s DOE ESCO Services

Technical Consulting Services• Engineering• Construction Management• Program Administration

Community and Behavioral Modification Programs• AB811 Programs• School District Programs

Contact:Patrick A. Weller, LEED APDirect : (714) 310-9509Email: pweller@pacwestes.com