Eglin Air Force Base & Gulf Power An Energy Partnership August 23, 2012

Who is Southern Company? More than 42,000 megawatts of generating capacity More than 27,000 miles of transmission lines 4.4 million customers in the Southeast Approximately 26,000 employees Invested approximately $4.6 billion in environmental controls since 1990

Who is Gulf Power? A Subsidiary of Southern Company Southern Power

Gulf Power Company 1,463 employees 427,663 customers 5 power plant sites with 16 units - 2 sites are jointly owned - 2,644 MW capacity 161 substations/1,600 miles of transmission lines 7,636 miles of distribution lines (1,748 underground)

Eglin Air Force Base & Gulf Power Energy Yesterday, Today and Tomorrow August 23, 2012

Eglin Air Force Base & Gulf Power Since 1953… GSA Areawide Public Utility Contract August 25, 2006 9 points of delivery to Eglin AFB Average delivered price $.085/kWh Electric distribution services Exhibit A Energy management services Exhibit C

Eglin AFB Owned Distribution and Substation Projects 2005-2006 ValP sub $1,979,000 Rebuild 25 kV side 2006-2007 ACC sub $ 980,000 Rebuild entire sub 2007 West Gate sub $2,535,000 Rebuild 25 kV low side 2008-2009 North Gate sub $2,145,000 Rebuilt sub 2009 7th Special Forces Feeder $1,500,000 4.5 mile 12.47 kV distribution feeder

Duke Field Substation New delivery point to Eglin AFB Gulf Power owned 25 MVA substation Sufficient projected revenues from 7th Special Forces Complex…no CIAC Target in service date of January 1, 2010 Option now to also serve Duke Field

Eglin Metering Gulf Power annual Metering Service Agreement for over 10 years Installed Hunt Turtle System Installed metering at Climatic Lab with billing software…maintaining. Currently installing Sensus AMI metering system

Utility Energy Services Contracts Energy Master Plan for Eglin AFB May 2002 Master Contract for Energy Services August 2003 Stayed on course… Gulf Power Energy Services Chevron Energy Solutions selected as ESCO partner in April 2005 Completed ECM Phase 1 in December 2006 Completed ECM Phase 2 in July 2009

Eglin AFB UESC ECM Phase 1 Results ECM 1 $6.8 M Annual Energy Savings over $800,000/yr Chiller replacements in Bldg 14 Piping, DDC controls and motor replacements in Bldg 42 Lighting T-5’s hangars, T-8’s buildings

Eglin AFB UESC ECM Phase 2 Results ECM 2 $ 6.5M Annual Energy Savings over $500,000/yr Chiller replacements in Bldg 380 New pumps, valves, and DDC controls Lighting T-5’s hangars, T-8’s buildings

Eglin AFB – VBT Project Value Based Transaction – $790K Controls Retro-Commissioning and Chiller replacement. Funded by funding arrangement/contract between Gulf Power, Mid Bay Bridge Authority (MBBA) and Eglin AFB. Gulf Power implemented; MBBA funded; Eglin AFB benefitted.

Partnering for the Future GPES transmission and distribution projects AMI Metering Training to Eglin CE personnel Green buildings and LEEDS Solar Thermal Water Heating workshop Geothermal - Consultant’s special session Energy Awareness Month Renewable Energy Technologies

Partnering for the Future Gulf Power Energy Services UESC projects Largest UESC contractor in US Over $55M in UESC with military in NW FL Eglin ECM Phase 1 & 2 30% reduction to your energy baseline established in 2003 Eglin ECM activities Energy conservation Renewables & geothermal More diverse than ECM 1 & 2

Eglin AFB UESC ECM Phase 3 Energy goals today Air Force UESC Guidelines UESC Opportunities – Current & Future Next Steps

Energy Goals…then... 2002 Federal Energy Conservation Goals Executive Order 13123 35% reduction in BTU/sq ft by 2010 Legislation on tap to potentially increase to 45% reduction by 2020

Energy Goals…now New Energy Policy Act (EPACT 2005) New Energy Reduction Goal – reduce 3% annually by 2015 Goal assessed on energy per square foot versus new 2003 baseline New Renewable Energy Goal (purchased and self-generated as percent of electric consumed) 3% in 2007-2009 5% in 2010-2012 7.5% in 2013 Federal Facility Metering Federal facilities need to be metered by October 1, 2012

UESC Air Force Guidelines Projects which “Demonstrate an Economic Return on Investment” (10 USC 2911 and 2913) Limit the term of the agreement to life expectancy of equipment Appropriated funds may be used for UESC projects; 10 USC 2913 gives option to finance, not a requirement All third party financed projects must be approved by the AF Civil Engineer (AF/A7C) Approval Process – Installation, MAJCOM Energy Office, HQ AFCESA, AF/A7C (Headquarters Air Force)

Where are we now? Work between Gulf Power and Eglin AFB – In Progress Starting Expecting Anticipating

GSA Exhibit C – In Progress Phase 1 DDC Backbone Implementation – ~$6.7M base-wide DDC backbone system. ECIP funded (Exhibit C (not “UESC”)). Brings Metering, DDC monitoring, Building System Controls, etc. into a common, user-friendly “Dashboard”.

GSA Exhibit C – In Progress Lighting Upgrade Project Implementation – $150,000 (including $15K DSM Incentive) 20+ Buildings NRG funded (Exhibit C (not “UESC”)). Proposal based on audit of facilities for Eglin’s approval/award. Awarded in June. (90% Complete)

GSA Exhibit C – Starting Phase 2 DDC Backbone Project – ~$4.5M (estimated construction amount). FY12 NRG funded. Approved Feasibility Study and Implementation Proposal Phase ($225K). T.O. recently awarded. Construction phase is dependent on availability / approval of FY13 NRG funds (or 3rd Party financing if required).

GSA Exhibit A – Expecting Annual Eglin Metering Services Agreement. Past value has been $100K. Current discussions on adding services to FY13 SOW. Funded – annual Sensus AMI system maintenance, plus fiber optic network and communication equipment maintenance, replacements and upgrades for new Phase 1 DDC Backbone project being installed.

GSA Exhibit C – Anticipating FY12, GSA Exh. C Project – #1 End Of Year potential – additional funds (up to $500K) for added scope to existing Phase 1 DDC Backbone Implementation (Contract Modification). FY12, GSA Exh. C Project – #2 End Of Year potential – additional funds (up to $500K) for EMS Expansion (New Task Order).

Questions / Discussion Andrew J. Saleh, PE CEM Gulf Power Energy Services ajsaleh@southernco.com 850-444-6504 or 850-336-1041