1. An Overview of the Development of a Renewable Energy Project And the 5 Major Milestones to Achieve Financing By Robert Hunter Director of Operations, Green Coast Energy Phone: 386-747-3741 rhunter@greencoastenergy.org

2. Milestone 1: The Concept What technology, what fuel type? –Biomass, wind, solar, waste heat, etc What State/County/City? –Choice of state will be contingent upon state renewable policies & permitting requirements The Business Model/Pro Formas –How much will it cost? Is it cost-feasible?

3. Milestone 2: The Location Local support Zoning--generally Heavy Industrial Rail and/or highway access Size Interconnection with local utility Permitting--DEP, EPA, FERC, etc

4. Milestone 3: The Purchased Power Agreement Primary source of revenues, most important part of a successful project -And the part that the PSC has the most ability to make a difference Term Capacity payments Energy payments Fixed energy payments -Mitigates fuel price volatility to customers -Makes financing more feasible due to less uncertainty in revenue PSC Approval

5. Milestone 4: The Fuel Supply Heat rate of fuel type, in BTU's per ton Tons required per day to operate plant Tipping fees from fuel suppliers Cost of fuel preparation (cleaning, etc) Note: This primarily describes an example biomass/waste-to- energy project. A solar or wind project would not face these same issues; either the resource is or is not there, and no contracts must be signed to utilize the sun or wind.

6. Milestone 5: The EPC Contract Sign turnkey agreement with engineering firm that specializes in EPC Or, a very experienced Developer's Engineer could purchase all the equipment from different manufacturers (a boiler from Vendor A, a turbine from Vendor B, etc) Total cost to install per KW Construction time frame

7. The 5 Steps are Completed: Now What? To obtain financing, the renewable project must demonstrate –Enough revenues to meet a debt coverage ratio –An Internal Rate of Return that is satisfactory to equity investors Debt vs Equity: The Financing Mix –High level of competition for equity funding from other states…required rate of return often 12%- 30%, higher when more projects competing

8. What Can the Public Do to Help Bring Renewables to Florida? Understand the full costs of NOT having renewable energy (pollution, dependency, upward-trend price volatility) Understand the value that renewable energy brings in future price stability and environmental conservation Keep these in mind if the price/kwh of renewables is initially higher than fossil fuels

9. Gas Prices Illustrated

10. What Can the PSC Do to Help Bring Renewables to Florida? The PSC has great influence over the most key part of the renewable project: the Power Purchase Agreement. Staff and Commission has been working diligently for some time, and has recently adopted a rule that makes great progress. Now, it is up to the PSC to enforce this rule and require Standard Offer Contracts to fairly compensate renewable providers. –Contracts must provide enough revenues to cover expenses, and offer sufficient return to equity investors.

11. The Bottom Line If the PSC requires and approves Standard Offer Contracts from the IOUs as previously mentioned, then renewable energy will blossom and thrive in Florida. This will encourage financiers to bring their investment money to FL, and provide environmentally-friendly, price-stable electricity to the customers. Florida becomes a national LEADER in renewable energy, and a paradigm for other states.