1. CLEAN RENEWABLE ENERGY BONDS (CREBs) James F. Duffy, Esquire Nixon Peabody LLP 100 Summer Street Boston, MA 02110-2131 Tel.: (617) 345-1129 Fax: (866) 947-1697 jduffy@nixonpeabody.com FINANCING WIND POWER: THE FUTURE OF ENERGY Debt Panel The Institute for Professional and Executive Development, Inc. July 25-27, 2007 Santa Fe, New Mexico

2. 2 CREBs Clean Renewable Energy Bonds (CREBs) Under Section 54 of the Internal Revenue Code, which was added in 2005 Designed to provide an incentive for governmental bodies (including Indian tribes) and cooperative electric companies to produce renewable energy

3. 3 CREBs CREBs are tax credit bonds The borrower gets a 0% loan, as the Federal Government pays interest on the bonds in the form of a tax credit to the bond holder

4. 4 CREBs A total of $1.2 billion of CREBs has been authorized, to be allocated in 2 rounds The first round allocations have occurred, and second round applications were due July 13, 2007 (See IRS Notice 2007-26) All CREBs must be issued by December 31, 2008

5. 5 CREBs CREBs are allocated to applicants beginning with the project with the smallest dollar amount of volume cap requested and then the next-smallest dollar volume cap, until the total volume cap is exhausted At most $750 million of the $1.2 billion in CREBs can be allocated to governmental bodies

6. 6 CREBs There are bills in Congress to extend the CREB program beyond the initial two rounds – H.R. 1821 is championed by public power – H.R. 1965 is championed by co-ops – H.R. 2776 would allocate $2,000,000,000 of New Clean Renewable Energy Bonds 60% to public power providers and 40% to cooperative electric companies 10655533.2