2011 ADC WINTER FORUM | PAGE 2 Developing Renewable Energy Projects on DoD land Angela Maybrier, Booz Allen Hamilton Grand Hyatt/San Antonio TX Wednesday, February 16 th 2011

2011 ADC WINTER FORUM | PAGE 3 Agenda Overview EUL Program – Developer’s Perspective  Site Selection Challenges  Road Blocks to Success Energy EUL (E-EUL) Dynamics  Goals  Incentives  Procurement Options Key Drivers Recommendations and Take-Aways Questions & Answers

2011 ADC WINTER FORUM | PAGE 4 Overview  Developments on DoD land have both upsides and downsides vs. other land use tools  Every EUL competes with every other land and/or energy deal in its market  Developer and Land Owner have similar motivations  Gaining the most value from the land asset as quickly as possible  Development deal is not an emotion, it’s a number – does the project pencil?

2011 ADC WINTER FORUM | PAGE 5 Site Selection and Development Challenges  Incomplete NEPA and/or unrealistic timelines  Limiting development options  Size – parcels of land too small, non-contiguous or unusual perimeter  Location – interior of installation brings security, mission impact, or marketability into question  Proximity to necessary infrastructure for type of development  Lack of key stakeholder buy-in participation  Commercial viability

2011 ADC WINTER FORUM | PAGE 6 Roadblocks to Success  Multiple Stakeholder Interests  Potential opposing interests  Property Valuation  Land has no intrinsic value  Value = Land’s ability to generate cash flow  Cost should be discounted by how much investment needs to be made and the risk associated with the project  Time is Money – Certainty of Schedule  Upfront payment and delayed approval limits developers’ ability to obtain necessary ROI

2011 ADC WINTER FORUM | PAGE 7 Energy EUL (E-EUL) - Dynamics  Define Goals:  Revenue or Purchase of Power  Energy Independence  Executive Order Requirements  Incentives  Tax Credits  Tax-Exempt Bonds  Renewable Energy Credits  Community Involvement  Local University  Local Utility  Local Economic Development Corporation

2011 ADC WINTER FORUM | PAGE 8 Additional Procurement Options

2011 ADC WINTER FORUM | PAGE 9 Key Drivers – EUL and E-EUL  Clearly Identified Project Champion  Champion for both the real estate/lease component as well as potential PPA negotiations  No ambiguity about NEPA or other environmental and permitting transmission issues – bad news does not get better with time  Apparent unified support for project through the Chain of Command  Market compatibility/desirability of location

2011 ADC WINTER FORUM | PAGE 10 Recommendations  Complete Finding of Suitability to lease (FOSL), and supporting documents for necessary NEPA process early  Pre-educate Deal Team on deal challenges  Consistency in selection criteria  Make sure ALL stakeholders know what is proposed  Establish timelines based on key milestones  Development concepts synergistic to installation mission  Local Community Support  Quality not Quantity of projects  Energy-related projects  RFQ for Regional Developer Partner

2011 ADC WINTER FORUM | PAGE 11 Key Take-Aways  F lexibility – nothing else can make a deal work or fail faster  Deal Teams need to understand market fluctuations  Realize project marketability can change during Business and Lease Plan Process and/or Lease and Management Plan Process  Alignment of financial interests  Realistic financial expectations  Continuous dialog and trust  Timing and schedule  Quality of opportunity and development team

QUESTIONS + ANSWERS Contact: Angela G. Maybrier Booz Allen Hamilton Tel: Mobile: