INVESTING FOR CLEAN ENERGY IN OREGON Renewable Energy Project Investments

Renewable Energy Project Investments Topics 1. Aequitas 2. Investor Benefits 3. Tax Credits / Benefits 4. Capital Structure 5. Investment Considerations 6. Investment Options

Aequitas Aequitas Capital Management: Who We Are Aequitas Capital Management, a diversified financial services firm, acquires and deploys capital in high potential and socially-responsible markets. Operating in Portland, Oregon, since 1993, Aequitas has structured and invested more than $1.5 billion in customized financial transactions. With broad capabilities and focused execution in such markets as energy, healthcare, manufacturing, distribution, not-for-profits, and professional services, Aequitas focuses much of their effort structuring and deploying capital for socially-responsible endeavors.

Renewable Energy Project Investments Investor Benefits Significant tax credits and benefits available - Federal production tax credits, monetized on an upfront basis, may approach up to 35% of the total capital cost of a project. (It may be difficult for individuals, S-Corps and closely-held corporations to effectively utilize.) - Oregon State Business Energy Tax credits equal to 35% of the project’s eligible capital costs over five (5) years if used by project investor or 25.5% in an upfront payment to the project owner if sold to a non-project party. Attractive risk-adjusted after-tax returns - may range from 10% to 15% after-tax IRR over 20 years on an un-levered basis. Socially-responsible investment opportunities

Energy Policy Act of 2005 Production Tax Credits Qualifying Facilities – wind farms, power plants fueled by biomass (new plants), geothermal energy, landfill gas or municipal solid waste, small turbines of less than 5MW in size that produce electricity in irrigation canals and new turbines installed at existing dams. Tax Credit Period – 10 years In-Service Date – by 12/31/07

Energy Policy Act of 2005 Production Tax Credits Tax Credit – wind and closed-loop biomass – currently 1.9 cents / kwh. All other projects - 0.9 cents / kwh. Adjusted annually for inflation. “Haircut” – production tax credits are subject to a “haircut” if the project benefited from government grants, tax-exempt financing, “subsidized energy financing” or other credits – e.g., Oregon Business Energy Tax Credit. Maximum “haircut” is 50%.

Energy Policy Act of 2005 Investment Tax Credits Solar - 30% Investment Tax Credit. Credit is for 30% of the cost of equipment used in a solar installation for equipment put into service in calendar years 2006 and 2007. Tax credit is claimed in the year that the project is put into service.

Other Tax Credits & Benefits Other Tax Credits and Benefits Oregon Business Energy Tax Credit (“BETC”) - 35% of eligible project capital costs - Can be monetized for approximately 25.5% of project capital costs (with federal income tax implications) Accelerated depreciation benefits on some types of renewable projects – e.g., wind powered and Biomass-fueled plants. Green tags – currently $1.00 to $3.00 megawatt hour in Oregon on a wholesale basis

Capital Structure Sources of Capital

$ $ $ $ $ Capital Structure Sponsor / Developer Equity Contribution Agreement Investor(s) Tax Investor(s) $ $ Partnership or LLC Lender $ Project

Investment Considerations Project Risks Technology – proven technology / equipment Completion – on time / on budget Revenue – sufficient to service debt / paid by a creditworthy offtaker ? Resource – sufficient / reliability of resource studies Operations – does the operator have sufficient competencies and incentives

Investment Considerations Project Risks Site – necessary long-term property rights acquired Scheduling of intermittent resources – imbalance penalties Interconnection / curtailment Environmental issues Management – sufficient skills / experience

Investment Options Investment Options Direct investment in partnership or LLC Through a targeted fund - Tax Credit / Tax Benefits Fund - Private Equity or Hedge Fund

Aequitas Contact Information Robert Jesenik – 503.419.3511 Tom Sidley – 503.419.3514 David Shutte – 503.419.3500 Charles Mautz – 503.419.3533