1. Renewable Distributed Generation and Public Water Supply Utilities CWWA/CTAWWA Fall Conference Paul R. Michaud, Esq. October 20, 2015

2. 2 Introduction Renewable Distributed Generation (DG) Current Policy Drivers Solar Electric Systems Solar + Battery Storage Power Purchase Agreement (PPA) Future Policy Drivers

3. 3 Renewable power generation at or near the point of consumption, rather than at a central plant where the power produced must be transported over transmission and distribution lines to the consumer. Hartford Landfill 1 MW Solar Array What is Renewable Distributed Generation (DG)? Generating power at or near the site of the consumer eliminates the cost, complexity, and inefficiencies of transmission and distribution Distributed generation shifts control to the consumer

4. 4 Public Act No. 11-80 ZREC & LREC Auction Program (Ends Next Year!) Net Metering Virtual Net Metering Municipal – Cap Reached! Agricultural – Cap Reached! State – Little to No Activity! “Current Policy Drivers” Renewable DG

5. 5 Megawatts 2012-2017 Years Total Renewable DG Capacity Contracted Success! 350 300 250 200 150 50 0 400 450 500 550 P.A. 11-80 513 67,716 Homes Fossil Fuel Power Plant

6. 6 Solar Electric Systems Solar Electric systems, also called Photovoltaic (PV) systems, convert sunlight directly into usable electricity using semiconductor technology. Sunlight strikes the PV cells and causes the electrons to flow, creating an electrical current. Solar Panels at North Sleeping Giant Water Treatment Facility

7. 7 Solar Electric Systems Benefits of Solar:  Can be located on rooftops, parking lots & adjacent land  Production levels are known and quantifiable  Systems are easy to maintain  Competitive electricity price  No air emissions

8. 8 Solar Electricity Disadvantages of Solar:  Intermittent production  Grid must be operating

9. 9 Solar + Battery Storage Problem: Solar produces intermittent power & can’t operate when the electric grid is down Solution: Solar + Battery Storage captures excess electrical energy during periods of low demand and stores it until needed.

10. 10 Solar + Battery Storage Benefits:  Load shifting – The battery can provide financial savings by charging during low rate periods when demand for electricity is lower and discharging during more expensive rate periods when electricity demand is higher  Increased self-consumption – The battery can store surplus solar energy not used at the time it is generated and use that energy later when the sun is not shining  Back-up power

11. 11 Solar + Battery Storage Disadvantages of Batteries:  High Cost (This is changing!)  New Technology  Limited to utility-scale applications (This is changing!)

12. 12 What is a Power Purchase Agreement? A long-term power contract between the Host and the Solar Company for the electricity generated by the solar energy system at a predetermined price. The solar company absorbs the costs of designing, constructing, operating, and maintaining the solar energy system. The solar company owns the solar energy system for the life of the PPA.

13. 13 PPA Model Benefits:  No capital commitment by the Host  Cost savings to Host – Avoided Utility Costs  No Ownership Risks for Host Equipment failure Damage Obsolescence

14. 14 PPA Model Disadvantages:  Cost savings based on future energy projections  Solar Company retains benefits of system even after it is paid off  Many PPA terms may be dictated by the Solar Company’s lender

15. 15 PPA Terms Things to look for in a PPA:  Escalation Rate  Performance Guarantee  Extended Warranty on solar panels and inverters  Interconnection costs included or is there an allowance  Facility outage

16. 16 “Future Policy Drivers” Renewable DG? Extend the ZREC/LREC Program Beyond 2016 Raise the Cap on the Virtual Net Metering Program and Extend Program to include Water Companies

17. 17 Mr. Michaud is the Chair of the firm’s Renewable Energy practice group. Mr. Michaud’s experience extends to all elements of renewable energy project development, operations, finance, permitting, and construction including drafting and negotiating complex power purchase agreements, real estate leases, renewable energy certificate agreements, equipment procurement agreements, and construction agreements. Mr. Michaud represents a diverse client-base, including local and national solar, fuel cell, wind, CHP, small hydro and energy efficient companies, as well as municipalities in renewable energy and microgrid RFP matters. Mr. Michaud also represents renewable energy off-takers, including municipalities, commercial and industrial companies, hospitals and other health care facilities. In addition, Mr. Michaud represents renewable energy clients on regulatory matters before state public utility commissions and siting councils. He is the Founder and Executive Director of the Renewable Energy and Efficiency Business Association, Inc. (REEBA) where he has extensive experience as a certified lobbyist on renewable energy policy matters. Thank You!