2. FIFTH ANNUAL FEDERAL ENERGY WORKSHOP & DEFENSE ENERGY PARTNERSHIP FORUM | PAGE 2 Peter Y. Flynn, September 16, 2014 Utilizing ESPC to Develop Renewable Energy Projects

3. FIFTH ANNUAL FEDERAL ENERGY WORKSHOP & DEFENSE ENERGY PARTNERSHIP FORUM | PAGE 3 About Bostonia – Founded in 1998, Bostonia Partners is a full-service investment bank with primary market focus in energy and real estate, and additional services in structured finance and advisory – Bostonia Global Securities, the broker/dealer affiliate, provides direct access to investors and daily participation in the capital markets – Bostonia ranked seventh among all banks for domestic private placements in 2009 – 2011 Domestic Private Placement Summary 2011 - 2013

4. FIFTH ANNUAL FEDERAL ENERGY WORKSHOP & DEFENSE ENERGY PARTNERSHIP FORUM | PAGE 4 Agenda Renewable Energy Contracting Options – focus on ESPC ESPC Financing Structures for Renewable Projects OMB Memoranda – Challenges Case Studies Conclusions

5. FIFTH ANNUAL FEDERAL ENERGY WORKSHOP & DEFENSE ENERGY PARTNERSHIP FORUM | PAGE 5 Financing and Contracting Options PPAESPCUESCENABLE Utilization: Power Purchase with secure fixed, long term pricing Achieve energy savings and ancillary benefits through installation of ECMs - may Include renewable energy Utilities provide energy improvement projects and demand reduction services Facilities under 200,000 Sqft Limited ECMs Term: 10 years (EAB Part 41), DOD up to 30 years (10 USC 2922a) Up to 25 Years 10 years for Army Up to 25 Years for Non-DOD Target 10 – 15 Years Key Considerations: PPA pricing may need to be higher than ‘brown’ power Taxable entity required to own the project in order to utilize tax incentives Easement, site license, lease or EUL ESCO provides savings and performance guarantees M&V is required Experience with ESA structure Allows for 3d party ownership Renewable energy component may be ‘subsidized ’ by energy efficiency UESC, utility may provide projects on a streamlined basis. Partner with local servicing utility or gas company Savings and performance guarantees not required Provides standardized and streamlined process for quick award Five standard ECMs Simplified M&V

6. FIFTH ANNUAL FEDERAL ENERGY WORKSHOP & DEFENSE ENERGY PARTNERSHIP FORUM | PAGE 6 ESPC Financing Structure FINANCIER

7. FIFTH ANNUAL FEDERAL ENERGY WORKSHOP & DEFENSE ENERGY PARTNERSHIP FORUM | PAGE 7 ESPC Renewable Energy Structure

8. FIFTH ANNUAL FEDERAL ENERGY WORKSHOP & DEFENSE ENERGY PARTNERSHIP FORUM | PAGE 8 CEQ/OMB Memorandum 8/16/11 ESPCs can incorporate purchase of on-site renewable energy – if lower energy consumption and costs to the Government Complexity of PPAs require special consideration and agencies must submit PPAs entered into under ESPC for OMB review

9. FIFTH ANNUAL FEDERAL ENERGY WORKSHOP & DEFENSE ENERGY PARTNERSHIP FORUM | PAGE 9 OMB Memorandum 10/3/12 For an “onsite energy source” to qualify as an ECM, the arrangement must: – be “applied to a Federal building”; – “improve energy efficiency”; – be “life cycle cost effective”; and – involve energy conservation, cogen, renewable energy sources, improvements in O&M efficiencies, or retrofit activities. Conditions for annual scoring – ESPCs including onsite energy generation – “the Federal government must retain title to the installed capital goods at the conclusion of the contract.” – ESPCs and UESCs may not be used for the purchase of “off-site new renewable generation or to build merchant scale power generating facilities on federal land.”

10. FIFTH ANNUAL FEDERAL ENERGY WORKSHOP & DEFENSE ENERGY PARTNERSHIP FORUM | PAGE 10 White Sand Missile Range, NM Project Overview – $18 million ESPC for US Army in White Sands, New Mexico – largest military installation in the US – ESPC includes 4.5 MW Solar PV array (ground mount and carport) and an Energy Management Control System – Solar array will produce 10.4 million kWh and contribute approximately 10% of total energy consumption at the installation – Project will create total cost savings of approximately $44 million over the 25-year contract term based on escalation of electricity rates – Siemens Government Technologies selected to construct and operate the system Financing Overview – Unlike a traditional ESPC, private ownership of the energy assets allowed the project to monetize federal tax credits – Long-term Energy Services Agreement (ESA) allows Government to acquire solar power without upfront capital or a buy down of project capital cost – Title to non-solar ECMs will vest with the Government at acceptance – Government will pay same utility rate it currently pays and will own the RECs

11. FIFTH ANNUAL FEDERAL ENERGY WORKSHOP & DEFENSE ENERGY PARTNERSHIP FORUM | PAGE 11 Hill Air Force Base, UT Project Overview – $5 million ESPC financing at Hill AFB - 1st DOE Biomass Super Project – Main parties include DOE, Ameresco, Bostonia, Hill Air Force base, Davis County Landfill, Utah Power utility – Large electrical demand and steam load at Hill AFB; large waste disposal in place and daily disposal rate at Davis County Landfill – Biomass and Alternative Methane Project included : 1.2 MW IC engines, 20 year contract, 2 mile pipeline, conventional ECM’s in other buildings – Reduction of 5,000 tons of greenhouse gases, 5.5 tons of Nitrogen Oxide, 4.8 tons of Carbon Monoxide, 19 tons of Sulfur Dioxide Financing Overview – Structured as securitization for ECMs, including biomass and alternative methane fuel energy savings project that generates electricity for the Government to sell to utility for credit – Total cost savings of $16+ million over the 20-year contract – Overall simple payback under 10 years – No Capital investment required by Hill AFB – Monthly credit received by Hill AFB for Green Power generation

12. FIFTH ANNUAL FEDERAL ENERGY WORKSHOP & DEFENSE ENERGY PARTNERSHIP FORUM | PAGE 12 Conclusions ESPC is an important tool for meeting Federal energy goals and achieving energy security – Long-term contracting authority up to 25 years – Established program with proven contracting partners – Traditional ECMs can subsidize renewable energy projects – Government or a private entity can own assets – ESCO operates and maintains the project RE projects are complex with steep learning curves – Important to assemble the team early – Projects need a “champion” at the installation – Work with a public/private mentality and remain adaptive and flexible Markets, incentives, and technologies drive projects – Important to understand federal and state incentives, standards, and energy prices in order to determine complete revenue picture – Important to determine what technologies are best suited to specific geographic conditions

13. FIFTH ANNUAL FEDERAL ENERGY WORKSHOP & DEFENSE ENERGY PARTNERSHIP FORUM | PAGE 13 Peter Y. Flynn Executive Vice President 617-226-8103 Direct 617-437-0150 Main pflynn@bostonia.com Contact Information