1. Money Talks: Financing Efficiency Improvements Panel Discussion Moderator: Curt Nichols, CEM Senior Manager of Strategic Initiatives

2. Today’s Agenda/Objectives Introduce Topic/Panelists Capital Access/Financing Background Conventional Financing Resources Newer Project Funding Options –Models for Project Financing –Commercial PACE Financing –Efficiency Service Agreements Audience Interaction (Q&A)

3. Panelist Introductions 1.Business Models for Project Finance John MacLean Energy Efficiency Finance Corp 2.Commercial PACE Financing Jane Elias Sonoma County Energy Program 3.Efficiency Service Agreements Frank Visciano Metrus Energy

4. Capital Access/Financing Many commercial projects ignore financing. However: Financing pays for itself through savings Interest rates are at an all-time low The cost of waiting can be high You preserve existing reserves Utilization of Capital is a Major Barrier to Project Completion

5. Without Necessary Capital Energy-saving projects are put on hold Get higher energy bills each month Maintenance costs can increase Building values can decline Unemployment can rise Financing options ARE available

6. Current Financing Resources Financing Options Widely Available Conventional Bank Line of Credit Utility Backed Financing Vendor Backed Financing Equipment Lease-Purchase Performance Contracting Mission-based Lenders

7. Currently Available Resources Site-Specific Financing Options Oregon –SELP loans (ODOE) www.oregon.gov/ENERGY/LOANS/Pages/selphm.aspx Washington –Energy Efficiency Loan Program (WSHFC) www.wshfc.org/energy/eelp.htmwww.wshfc.org/energy/eelp.htm (non-profits, multifamily)

8. Current Financing Resources Site-Specific Financing Options Idaho –Energy Loan Program (OER) www.energy.idaho.gov/financialassistance/energyloans.htm Montana –Alternative Energy Loan Program (DEQ) www.deq.mt.gov/energy/renewable/altenergyloan.mcpx

9. Current Financing Resources A Couple More Financing Options Federal Agencies (in the Pacific Northwest) –BPA Facilitated UESC Financing www.bpa.gov/energy/n/federal.cfm Qualified Energy Conservation Bonds –State, Local, or Tribal governments can use www1.eere.energy.gov/wip/solutioncenter/financialproducts/qecb.html

10. Other Financing Options Today’s Panelists (the REAL experts here) Additional Financing Resources John MacLean, Energy Efficiency Finance Corp Commercial PACE Financing Jane Elias, Sonoma County Energy Program Efficiency Service Agreements Frank Visciano, Metrus Energy So, lets hear from them

11. Business Models & Examples for Financing Commercial Sector Energy Efficiency Projects Efficiency Connections Northwest Conference Spokane, Washington October 18, 2012 Presented by: John MacLean Energy Efficiency Finance Corp. jmaclean@eefinance.net & phone = 360-339-3936

12. Case for Energy Efficiency Investment Save $ by lowering operating costs: energy, water, maintenance Improve facilities & comfort & productivity Meet energy system replacement/upgrade needs Improve building value Gain “green” branding in the marketplace; increase tenant appeal & occupancy Public goods: reduce GHG emissions, create jobs, macro recovery

13. Project Implementation: Suggested Decision Criteria for Facility Owners Coordinate facilities/engineering with finance and decision-making. Leadership is critical from the start. Main criterion: implement projects that pay for themselves from operating cost savings Additional criteria & considerations:  Assess & meet energy system replacement needs  Gain other EE investment benefits  Understand the costs of delay Manage project risks

14. Three EE Finance Mechanisms & Examples The following EE finance programs target commercial sector buildings and are now operational. They also have used ARRA funds to mobilize & leverage commercial finance. Non-profit sector (healthcare, education, Y’s, etc.) -- tax-exempt bond private placements  example: WA State Housing Finance Commission program Large Commercial Buildings-- Utility on-bill collections & financing  example: City of Seattle MacDonald-Miller program Large Commercial -- Property Assessed Clean Energy (PACE) financing  example: Los Angeles City/County Commercial PACE program

15. Uses of ARRA Funds for Risk Sharing Risk sharing & co-financing can be instrumental to support commercial financial institution EE/RE lending Goals: pioneer new finance products, broaden access to finance, extend tenors, lower rates & financing costs Credit enhancement structures using ARRA funds include:  Loan Loss Reserve Funds  Debt Service Reserve Funds  Subordinated Debt Structures  Interest Rate Buydowns Finance is necessary but not sufficient  must be combined with marketing & project delivery mechanism  grant funds can support project development through the full cycle

16. Financing for EE projects in the 501c3 and multi-family housing sectors, eligible for tax-exempt bond financing In partnership with a local ESCO that will offers turnkey project development & implementation $1 million State SEP grant used as debt service reserve fund & subordinated loan co-finance Can finance up to $10 million in projects; bonds are privately placed; bond proceeds are lent directly to eligible borrowers Marketing by ESCO, bank partner & WSHFC WA State Housing Finance Commission Energy Efficiency Project Financing for Non-Profits Tax-exempt Bond Private Placement Program

17. WSHFC EE Finance Program Diagram USDOE WA Dept of Commerce ARRA SEP funds WSHFC: SEF MMFS End-Users/ Borrowers: 501c3’s; Multi-family housing Bond Purchaser EECE Grant Agreement Marketing; project development; Turnkey EE projects & services Program Agreement Financing Agreements ( deal-by-deal) Program Agreement DSRF Notes: 1. EECE Grant Agreement & Program Agreements executed at Program start. 2. Financing agreements done case-by-case. Stream-lined documentation to be developed with bond counsel 3. DSRF can be deposited with Bond Purchaser. 4. Contractor is MacDonald- Miller Facilities Solutions, Inc.

18. Seattle Commercial Buildings Energy Efficiency Project Development & Finance Program EE investments for commercial buildings in downtown Seattle MacDonald-Miller Facilities Solutions, Inc. provides turnkey development, implementation, services & savings guarantees Customer signs Energy Services Agreement to make payments based on savings Customer payments collected on SSC steam bill; similar program with Seattle City Light under consideration Projects financed by new finance company, MECS ARRA funds used for subordinated debt financing, debt service reserve & carbon reduction incentives Scalable & replicable program model Mission-related investment by Seattle Foundation in initial projects Seattle 2030 District has been formed and is promoting EE investment as a civic project in Seattle;

19. EE FINANCE PROGRAM CASH FLOW EXAMPLE

20. …….. Customers MECS, new finance co. MacDonald- Miller Turnkey project & services & equity Energy Services Agreement (ESA) for turnkey EE project development, implementation, services & financing Long-term steam supply; green energy Seattle Steam Steam & ESA payments EE project payments; Escrow services agreement Seattle Foundation City of Seattle Investment Incentive funding & Investment Fund Seattle Commercial Buildings Energy Efficiency Project Development & Finance Program Dept of Commerce Sub- loan Seattle City Light elec. savings incentives Lock box acct

21. Property Assessed Clean Energy “Commercial PACE” Assessment Contract btw County & Property Owner PACE assessment collected with property tax; obligations runs with the real estate County sells a bond to Investor on private placement basis; County passes through assessment payments to Investor Lienholder consents required Bond proceeds finance EE & resource efficiency improvements Building Owner negotiates directly with Contractor & Investor Funding available for up to 100% of project Lower rates & longer terms, allows deeper projects to be funded Share costs and savings with current tenants & future owners Debt service reserves enhance credit structure Can consider Commercial PACE legislation in WA State

22. Building Owner Lender LACBPPLA County 4. CDD/LA approves application and forwards to County EE Retrofit Contractor PACE Investor 1. Owner engages Contractor 2. Contractor conducts audit and develops scope of work 3. Owner submits Program Reservation package 5. Owner uses notification of eligibility to negotiate project-specific financing terms with PACE Investors 8. County remits coupon payments to the PACE investor 7. Owner remits assessment payments to County 6. County structures bond according to owner- negotiated terms, Investor purchases the bond through “private placement” Los Angeles Commercial PACE: How it Works

23. Thank You! John MacLean President Energy Efficiency Finance Corp. Olympia, WA jmaclean@eefinance.net Phone: 1.360.339.3936

24. Sonoma County’s Commercial PACE Story October 18, 2012 24

25. 10/18/12 JE 25 Sonoma County Energy Independence Program SCEIP opened March 2009 County-wide, comprehensive program Billed once a year as an assessment on your property taxes Wide range of both residential and commercial improvements eligible (> 90), energy efficiency, water conservation and renewable generation measures 57 Commercial participants, representing many different business types, funded between $9,000 and $2.3 Million Reduce and Produce

26. 26 57 Commercial Projects Funded by SCEIP $10.7 Million, 94 Improvements Impact Jobs: 160 (ARRA), 23.5 Local Construction, 20 Lenders Solar PV: 2.1 MW, 44 systems, 1,297 tons eCO2 annual reduction 10/5/12 SKB

27. 10/18/12 JE 27 Who is Eligible? Improvements permanently affixed to the property Within geographical boundaries of the county Applicants are legal owner(s) of property Request less than 10% value of the property Commercial: 1. Lender Acknowledgement Of 57 properties, 19 had no mortgages Lender ack. received from 23 unique lenders 2. Utility Company Energy Evaluation 3. Organizational Documents

28. 10/18/12JE 28 ‘Underwriting’ No credit check required, No income qualifications Does not count against debt/income ratio No risk pricing; everyone pays the same fixed 7% simple interest rate, Interest may be tax-deductable Less than 100% lien to value ratio No bankruptcy or involuntary liens on the property Current on ALL liens against the property Current on ALL property taxes

29. 10/18/12 JE 29 Long Term Sustainable Financing Warehouse Twice a Year Property Tax Payments County Treasury Pool $45M SCWA $15M Sonoma County Financing Authority SCEIP Property Owner $ Bonds Debt Services $ $ $ Investors and Open Market Financing

30. 30 Building a Flourishing Program: Things to Consider Community Goals, Political Will and Market for PACE Identify Partners: public, private, education and non-profits Work with Stakeholders: Mortgage Lenders, Contractors, Local Utilities Strategic and Business planning Program Funding: start-up, operating, project Administrators, Staffing, Steering Committee, Legal Team, Financing Team Program Delivery: a Storefront and/or Web Site Staff & Workforce Tools and Training Marketing, Education & Outreach 10/18/12 JE

31. 31 Challenges / Opportunities Getting the message out Return on investment stories More robust energy evaluation tools for commercial properties Acceptance by banks and lenders Interest rate competition Long term financing options

32. 10/18/12 JE 32 PACE Replication Manual Available on SCEIP website: www.sonomacountyenergy.org (Resources for Local Governments) PACE How-To Manual based on SCEIP and other CA programs Document Library Resources Lessons Learned

33. Sonoma County, CA WRCOG, CA Los Angeles, CA California PACE-Regional San Francisco, CA Palm Desert, CA Placer County, CA Sacramento, CA

34. 10/18/12 JE 34 Thank you Sonoma County Energy Independence Program 404 Aviation Boulevard, Suite 200 Santa Rosa, California 95403 (707) 565-6470 SCEIP@sonoma-county.org jane.elias@sonoma-county.org www.sonomacountyenergy.org

35. www.MetrusEnergy.com Expand Energy Efficiency Project Opportunities

36. www.MetrusEnergy.com36 Introduction to Metrus Energy THE COMPANY: Headquartered in San Francisco, Metrus Energy is a developer, owner and financer of energy efficiency retrofit projects and a pioneer in private sector energy efficiency finance THE MARKET: Steep upfront costs remain a primary barrier to capturing the > $250 billion investment market for private sector energy efficiency projects OUR SOLUTION: Metrus offers a broad range of efficiency financing products (ESAs, PACE, leases, etc.), eliminating all upfront costs and turning energy efficiency into a resource for customers ACCOLADES: Metrus was selected to the President and U.S. DOE’s Better Buildings Challenge as a Financial Ally, and has committed to finance $75 million efficiency retrofit projects under this program Intro to MetrusEE Finance LandscapeESA MechanicsCase StudyQuestions / Appendix

37. www.MetrusEnergy.com37 The Metrus Mission SAVED IS EARNED Metrus is committed to enabling a paradigm shift to unlock energy efficiency as a resource. Intro to MetrusEE Finance LandscapeESA MechanicsCase StudyQuestions / Appendix

38. www.MetrusEnergy.com38 Navigating the EE Finance Landscape Owner-occupied or leased facilities No requirement for IG credit quality Works for both multi-measure and single-measure EE projects Projects > $500,000 in size with simple paybacks < 8 years Primary focus on private sector commercial, industrial and institutional customers Owner-occupied facilities preferred, with ability to work with long term leases Customers with solid (IG) credit quality or ability to secure a parent company guarantee Project size > $1 million with simple payback < 7 years Assessed property value (rather than credit) is key consideration Works well with multi-tenant commercial real estate properties Facility must be located in geographies with PACE-enabling legislation and active programs Projects > $1 million with simple payback < 15 years Public or private sector customers Preference for customers with multiple facilities PACELease ESA Focus on integrated, multi- measure EE projects Work well with non- owner occupied facilities with multiple tenants Customer facilities can be located anywhere in the US and Canada Intro to MetrusEE Finance LandscapeESA MechanicsCase StudyQuestions / Appendix

39. www.MetrusEnergy.com39 CORPORATE FINANCEPROJECT FINANCE Self-Funding Pay for it yourself out of capital budget Take out a direct-recourse corporate loan to fund project On-balance sheet Tends to lead to shorter, shallower projects with 1-3 year paybacks and limited impact Increasingly Customer-FriendlyIncreasingly Lender-Friendly Services Agreement 100% financing via equity + non-recourse project debt Cash flow positive Pay only for performance Works well for solid credits Off-balance sheet Tends to lead to longer, deeper projects with 5-10 year paybacks and significant impact Leases Up to 100% financing Capital or Operating Fixed interest and principal Secured by project equipment FASB accounting changes in the works Works better for big ticket physical equipment, tough for integrated retrofits Commercial PACE Up to 100% financing Obligation is secured by priority lien on real property, repaid via special property tax assessment Various models, depending on jurisdiction and program Perfect for multi-tenant commercial real estate Long (15-20 year) terms $ Support  Utility Incentives, On-Bill Finance Non-$ Support  On-Bill Repayment, Technical Assistance, Credit Enhancement Performance Support  ESCO Performance Guarantees, Insurance Products Navigating the EE Finance Landscape Intro to MetrusEE Finance LandscapeESA MechanicsCase StudyQuestions / Appendix

40. www.MetrusEnergy.com40 The Road to Energy Efficiency Savings Metrus removes complexity by providing: Financial, accounting and legal consultation and flexible sales and marketing support Selection and structuring of financing terms and conditions Intro to MetrusEE Finance LandscapeESA MechanicsCase StudyQuestions / Appendix

41. www.MetrusEnergy.com41 Metrus’ Efficiency Services Agreement Metrus’ ESA structure turns efficiency into a resource by removing all first-cost barriers and charging only for realized energy savings Efficiency Services Agreement Metrus covers 100% of project costs. Customer repayment based on avoided energy use and reduced operating expense. Project Installation ESCO/Contractor designs and installs the EE project and provides long-term maintenance. Efficiency Services Performance Contract (ESPC) Agreement ESCO/Contractor and Metrus enter into a turnkey project installation and maintenance contract, backed by a performance guarantee. Broad Public Relations Platform As part of the DOE & White House Better Buildings Challenge, customers will enjoy a prominent PR platform to advertise projects. Customer ESCO/Contractor Intro to MetrusEE Finance LandscapeESA MechanicsCase StudyQuestions / Appendix

42. www.MetrusEnergy.com42 Typical ESA Project Profile & Scope Savings created by:  Year 1 Service Charge is < Avoided Utility Cost  Fixed Annual Escalation is < Expected Utility Rate Increase Service Charge = (Physical Units of Savings) * (Service Rate, $/unit) + Non-Energy Savings * After-Project breakdown assumes Customer FMV buyout of equipment Intro to MetrusEE Finance LandscapeESA MechanicsCase StudyQuestions / Appendix

43. www.MetrusEnergy.com43 Typical ESA Project Profile & Scope Building automation & controls Lighting retrofits & controls Compressed air (leak detection & repair) Utility tariff rate optimization Heating, ventilation, & air conditioning (HVAC) Chiller replacement & system improvements Boiler replacement & system improvements Pumps, fans, motors, drives Clients are typically private sector commercial, industrial, healthcare and higher education with possibility to work with public customers as well Multiple energy efficiency measures are blended into single project scope of work Total project size is typically $1-10 million Facility ownership structure and customer credit dictate financing structure Average simple payback on a project is usually between 3 and 8 years Project term is typically 5 to 12 years Typical Project ScopeTypical Project Profile Intro to MetrusEE Finance LandscapeESA MechanicsCase StudyQuestions / Appendix

44. www.MetrusEnergy.com44 Deliver Enhanced Value to Customers Key Benefits to the “C-Suite”Key Benefits to Facilities Managers  No Upfront or Ongoing Costs: Reduce and redirect utility spending to pay for capital upgrades Save CapEx dollars to invest in core business  Bottom Line Benefits: New equipment results in higher productivity and reliability Immediately positive cash flow through lower operating expenses  Energy Efficiency as a Service: Pay only for what you save, with no fixed interest and principal obligation Off-balance sheet structure preserves debt capacity  Get What You Want & What You Need: Sustainability + Reliability Replace aging mechanical equipment Invest in new technology to improve reliability and performance  Avoid the “Simple Payback Trap”: Skip the capital budgeting process Make longer payback projects feasible  Deploy a Scalable Solution: Add new technologies and facilities over time as needed Add partners who are on your team and constantly on the look out for ways to improve operations and save you money Intro to MetrusEE Finance LandscapeESA MechanicsCase StudyQuestions / Appendix

45. www.MetrusEnergy.com45 Customer Case Study: Merrimack, NHGreenlawn, NYNashua, NHNH Headquarters Facility  467,000 ft 2 mixed-use office, manufacturing, environmental testing  492,000 ft 2 mixed-use office, manufacturing, environmental testing  686,000 ft 2 mixed-use office, manufacturing, environmental testing  509,000 ft 2 mixed-use office, manufacturing, environmental testing Project Scope  Lighting Retrofits  Building Automation  Air Compressor Replacement  Transformer Replacement  Demand Control Ventilation  Operational Best Practices  Lighting Retrofits  Building Automation  Boiler & Chiller Replacement  Demand Control Ventilation  Variable Frequency Drives for AHU & Water Pumps  Lighting Retrofits  Boiler Plant Improvements  VAV & Control Upgrades  Energy Policy  Building Envelope  Lighting Retrofits  Boiler Replacements  Variable Frequency Drives & Motors  Energy Policy  Building Envelope Project Cost  ~ $1.0 million  ~ $2.2 million  ~ $2.3 million  ~ $2.2 million Annual Savings  > $200,000 in Utility Savings  > 1.1 million kWh of Electricity  > 31,000 therms of Natural Gas  Various Non-Energy Operational Savings  ~ 400 tons of CO 2  Total Annual Savings > $300,000  > 300,000 kWh of Electricity  > 125,000 therms of Natural Gas  Various Non-Energy Operational Savings  ~ 800 tons of CO 2  Total Expected Annual Savings > $310,000  > 700,000 kWh of Electricity  > 125,000 gals Fuel Oil  Various Non-Energy Operational Savings  ~ 950 tons of CO 2  Total Expected Annual Savings > $310,000  > 875,000 kWh of Electricity  > 135,000 gals Fuel Oil  Various Non-Energy Operational Savings  ~ 1,150 tons of CO 2 Term  Simple Payback: > 5 years  ESA Term: 10 Years  Simple Payback: > 7 years  ESA Term: 11 Years  Simple Payback: >6 years  ESA Term: 10 Years  Simple Payback: >6 years  ESA Term: 10 Years Ongoing Services Provided  Metrus covers over $60,000 in annual project O&M and M&V services  Metrus covers over $35,000 in annual project O&M and M&V services  Metrus covers over $37,000 in annual project O&M and M&V services  Metrus covers over $50,000 in annual project O&M and M&V services Metrus Energy has developed and ESA-financed approximately $8 million in energy efficiency improvements for global aerospace and defense contractor BAE Systems as a part of ongoing multi-facility energy efficiency initiative. Intro to MetrusEE Finance LandscapeESA MechanicsCase StudyQuestions / Appendix

46. www.MetrusEnergy.com46 Questions? Metrus Energy Frank Visciano Director of Business Development frank.visciano@metrusenergy.com 415.284.5000 Intro to MetrusEE Finance LandscapeESA MechanicsCase StudyQuestions / Appendix

47. www.MetrusEnergy.com47 Appendix: Frequently Asked Questions At what point in the process does Metrus enter the conversation? – Metrus supports the sales cycle at any point during the development process (prior to preliminary audit or post detailed audit). Engaging Metrus early as a development resource (accounting, financial, legal) can accelerate the closing process. Under an ESA, who holds title to all project assets? – Metrus holds title to all project assets financed under an ESA, and is responsible for ensuring project performance via maintenance. Customers bear no performance or technology risk, paying only for realized savings, and have periodic termination and FMV buyout options over the term of the contract. For accounting purposes, is the ESA considered an “off-balance sheet” transaction? – The ESA is designed to be treated as a “services agreement” rather than a “lease” and Metrus customers have treated it as such. However, each customer is responsible for making its own accounting determination. What happens if actual savings fall above or below expectations? – Customers pay only for realized savings. If actual savings > guarantee, Metrus and the customer “share” those additional savings (i.e., the customer pays Metrus the pre-agreed upon $/kWh price for the additional units saved. If actual savings < guarantee, the customer pays Metrus only for actual savings and Metrus, and Trane pays Metrus for shortfall. What happens if a customer makes operational changes that impact the baseline? – The ESA is structured to cover technical, but not operational or behavioral risks associated with a project. Operating hours are typically a stipulated component of IPMVP calculated savings. For example, if a customer reduced the number of shifts in a facility from 3 to 2, realized savings and ESA payments) would be calculated based on 3 shifts. Alternatively, the customer would have the option of early termination/buyout. What happens if the customer sells the facility during the ESA term? – The customer may elect to (1) terminate the ESA prior to end of term subject to breakage costs, (2) purchase the covered equipment at FMV, or transfer the ESA to the new building owner subject to Metrus credit approval. Intro to MetrusEE Finance LandscapeESA MechanicsCase StudyQuestions / Appendix

48. www.MetrusEnergy.com48 Appendix: Retrofit Development Process Preliminary Energy Assessment Financing Structure Evaluation Investment Grade Energy Audit Project-Level Contracts Final Project Scope Project Construction Identification of New Efficiency Measures Project Operations Contractor Selection Metrus selects contractor in consultation w/ customer Customer Approval SIGN PROJECT AGREEMENT ENGAGE METRUS SIGN ESA CONTRACT FUND PROJECT END OF TERM Metrus recommends financial structure Metrus financial review Metrus supports customer’s finance, legal and facility review Metrus pays for 100% of project costs using its own equity and partner debt Metrus prepares key project-level contracts Metrus and contractor recommend final project scope to customer Contractor technical review Metrus financial review Contractor technical review Contractor installs project equipment Metrus pays contractor New upgrades are identified and added periodically Metrus pays for ongoing maintenance services Contractor measures energy savings and Metrus bills the customer only for realized and verified savings Customer purchases efficiency equipment at fair market value, or extends the contract w/ Metrus Ongoing Savings Identification of critical customer objectives and facility needs Intro to MetrusEE Finance LandscapeESA MechanicsCase StudyQuestions / Appendix

49. www.MetrusEnergy.com49 Appendix: Market Solutions Financing MethodDescriptionProsCons Self-Funding  Upfront and ongoing costs of EE upgrades paid for via corporate debt and/or internal cash flow  Standard capital budgeting process  Captures full value of future energy savings  Potentially well-established and quick decision process  Requires substantial capital outlay and multiparty internal buy in  Subject to internal hurdle rates and payback requirements  Take on additional debt On-Bill Financing (OBF) & On-Bill Repayment (OBR)  Utility (OBF) or other third party (OBR) incurs upfront costs and is repaid via a charge on customers’ utility bills  Flexibility to be structured as either a loan (stays with customer) or tariff (stays with meter)  Enhanced security  Potentially lower LT financing rates  Administrative barriers to supporting on- bill format mean most programs are early stage  OBF is typically limited in terms of amount financed, and often does not cover long term or deep retrofits Commercial PACE  Local governments or private financial institutions finance the upfront costs of improvements, and property owners repay the costs as a line item on property tax bill  Incents deeper projects and savings with longer paybacks, with financing terms up to 20 years  Leverages municipal involvement to tap into private capital  Newly developing financing market  Political, legal and administrative costs  Davis-Bacon compliance requirements  Mortgage holder approval required Traditional Leases  Banks/leasing companies pay for the upfront costs of installation and own project assets, while the customer makes interest and principal payments  Simple, fast and relatively well- known to customers  Well-established capital sources  Lease accounting standards will change in the next 1 to 2 years, and thereafter both operating and capital leases will be on- balance sheet financings Efficiency Services Agreement (ESA)  Metrus provides 100% of upfront project cost with payments based on realized savings on per-unit-saved (e.g., kWh) basis  Off-balance sheet financing  Avoids limiting capital budgeting process  Incents deeper projects with longer paybacks  Immediate operational savings  Focus on underserved private sector C&I customers  Requires multi-party project coordination and negotiation  Best for single-tenant, owner-occupied facilities with strong customer credit Intro to MetrusEE Finance LandscapeESA MechanicsCase StudyQuestions / Appendix

50. QUESTIONS? Now let’s hear from you…

51. Thanks to our Panelists  John MacLean Energy Efficiency Finance Corp  Jane Elias Sonoma County Energy Program  Frank Visciano Metrus Energy

52. THANK YOU! Feel free to follow-up anytime: Curt Nichols New Buildings Institute (360) 567-0950 x104 curt@newbuildings.org