1. Assistant Secretary of the Army (Installations, Energy & Environment) S ECURING A RMY I NSTALLATIONS WITH E NERGY THAT IS C LEAN, R ELIABLE AND A FFORDABLE Presentation by LTC Kevin J. Lovell, PMP To Washington, DC SAME Post March 21, 2012

2. Assistant Secretary of the Army (Installations, Energy & Environment) Agenda 2 - Strategic Energy Situation - Army’s Energy Needs and Performance - Army’s Sustainable Focus on its Utility Needs - Energy Initiatives Task Force

3. Assistant Secretary of the Army (Installations, Energy & Environment) The Last 11 Years… 3

4. Assistant Secretary of the Army (Installations, Energy & Environment) 4 Army Energy Consumption Sources: Energy Information Agency, 2010 Monthly Energy Review; Agency Annual Energy Management Data Reports submitted to DOE's Federal Energy Management Program (Preliminary FY2010) Federal GovernmentUnited StatesU.S. Army Energy Initiatives Task ForceUNCLASSIFIED DoD 1%80%23% FY10 Highlights $2.5+B Operational Energy Costs $1.2 B Facility Energy Costs +64% fuel costs in Afghanistan - not counting cost to deliver and secure +$400 million increase in fuel costs expected in FY11 across DoD in Afghanistan  Facilities  Vehicles & Equipment (Tactical & Non-tactical) U.S. = 98,079 Trillion Btu Fed Gov = 1,096 Trillion Btu (FY09) DoD = 819 Trillion Btu U.S. Army = 189 Trillion Btu

5. Assistant Secretary of the Army (Installations, Energy & Environment) Energy Initiatives Task ForceUNCLASSIFIED 5 5 Path to 25% Renewable Energy by 2025 - Notional Traditional Energy Renewable Energy Energy Efficiency Renewable Energy NDAA 2010: 25% by 2025 NDAA 2010: 25% by 2025 EP Act 2005 7.5% by 2013 EP Act 2005 7.5% by 2013 % Renewable Energy of Total Energy Army Energy Outlook Major Issues for Army Large Scale Renewable Energy Projects Declining Budgets/Incentive Leverage Need for third party financing Specialized Expertise Requires financial, regulatory, environmental, and real estate expertise Enterprise Strategy To define the most efficient path to reach Army goals Major Issues for Army Large Scale Renewable Energy Projects Declining Budgets/Incentive Leverage Need for third party financing Specialized Expertise Requires financial, regulatory, environmental, and real estate expertise Enterprise Strategy To define the most efficient path to reach Army goals Reaching Army energy goals will require significant number of large scale renewable energy projects

6. Assistant Secretary of the Army (Installations, Energy & Environment) Army Energy Security Implementation Strategy (AESIS) Operational Energy - Initial Capabilities Document (ICD) 6 Strategic Overlook Key Strategic Documents CENTCOM Operational Energy Documents Tactical Fuel and Energy Implementation Plan Army Power and Energy White Paper 1 Apr 10 13 Jan09 29 Jul 11 OE Campaign Plan & Army Campaign Plan ACP 2012 (Draft) Campaign Objective 2.0 Provide Facilities, Programs & Services to Support the Army and Army Families 2-8 Institutionalize Contingency Basing Campaign Objective 8.0 Improve Energy Security and Sustainability Major Objective 8-2 Enhance Operational Energy Effectiveness & Operational Sustainability ACP 2012 (Draft) Campaign Objective 2.0 Provide Facilities, Programs & Services to Support the Army and Army Families 2-8 Institutionalize Contingency Basing Campaign Objective 8.0 Improve Energy Security and Sustainability Major Objective 8-2 Enhance Operational Energy Effectiveness & Operational Sustainability Draft 16 Aug 11 13 Oct 10 19 Aug 10 CB Campaign Plan TBP Dec 11 DICR’s and Joint ICD 24 Sep 10 22 Feb 11 19 Aug 10 13 Oct 10 Leader Development And Training Change Culture Draft v0.2, 30 Jul 11 Army Operational Energy Campaign Plan Operational Energy

7. Assistant Secretary of the Army (Installations, Energy & Environment) EITF serves as the central management office for partnering with Army installations to implement cost-effective, large-scale, renewable energy projects, leveraging private sector financing. Projects greater than 10MW Will coordinate with installations for 1-10MW opportunities Potential for projects that exceed Army requirements Solar, Wind, Biomass/WTE and Geothermal technologies Potential to support resource validation, environmental permitting, regulatory approval and other project requirements Will use DoD land-use and third-party financing authorities Potentially over 1 GW of projects to satisfy Army requirements. Army Energy Initiatives Task Force 7 Energy Initiatives Task Force (EITF) established by the Secretary of the Army on September 15, 2011. Energy Initiatives Task ForceUnclassified Secretary of the Army John M. McHugh

8. Assistant Secretary of the Army (Installations, Energy & Environment) EITF Organization Energy Initiatives Task ForceUnclassified 8 Jon Powers, Director John Lushetsky Kathleen Ahsing, Director Jeff Smith LTC Kevin Lovell Alan King, Director Douglas Waters Erich Kurre Heidi Hansen Office of General Counsel Executive Director Planning DivisionExecution DivisionOutreach Division Partnerships Defense Logistical CommandDepartment of Energy Department of Air ForceDepartment of Interior Department of Navy National Renewable Energy LabPacific Northwest National Lab U.S. Army Corp of Engineers Note: The EITF reports to the DASA IE&E (E&S), Mr. Richard Kidd, IV

9. Assistant Secretary of the Army (Installations, Energy & Environment) The EITF and the Army Campaign Plan Energy Initiatives Task ForceUnclassified 9 The EITF is leading efforts to deploy large scale renewable energy projects in fulfillment of ACP Objective 8-1 8-1 Adapt / Execute Installation Energy Security and Sustainability Strategies ACSIM Achieve Energy Security & Sustainability Objectives ASA (IE&E) Staff Coordination: ACSIM Core Enterprise: SICE

10. Assistant Secretary of the Army (Installations, Energy & Environment) The EITF will leverage existing Army authorities to meet sustainability and renewable energy goals: Utility Energy Services Contracts (10 USC 2913) Enhanced-use Leasing (10 USC 2667) Easement authority (40 USC 1314) Acquisition of Utility Services (FAR Part 41) Power Purchase Agreements (10 USC 2922a) Energy Savings Performance Contracts (42 USC 8287 ) Cooperative Agreements (31 USC 6305) Sale of electrical power from alternative energy and co-generation facilities (10 USC 2916) Environment, Energy and Water Efficiency, Renewable Energy Technologies, Occupational Safety, and Drug-Free Workplace (FAR Part 23) Energy Initiatives Task ForceUnclassified 10 EITF Enabling Authorities

11. Assistant Secretary of the Army (Installations, Energy & Environment) Planning and Execution Process “Identify and Prioritize Opportunities” Target: 90 Days Conduct GIS Screening to ID installations w/ RE potential Analyze maturity of effort Assess top level economics Identify sites on installations w/ master plans Visit installation and confirm data on sites Assess Environmental and Operational Issues Conduct Go/No Go Assessment Prioritize sites in portfolio on Army RE goals Sign MOU with installations “Identify and Prioritize Opportunities” Target: 90 Days Conduct GIS Screening to ID installations w/ RE potential Analyze maturity of effort Assess top level economics Identify sites on installations w/ master plans Visit installation and confirm data on sites Assess Environmental and Operational Issues Conduct Go/No Go Assessment Prioritize sites in portfolio on Army RE goals Sign MOU with installations “Developing an Opportunity Into a Project” Target: 90-180 Days Conduct initial legal and regulatory review Initiate NEPA assessments Provide full Economic Case Analysis (ECA) Coordinate Off-Take and other Stakeholder Input Define Real Estate strategy Define System Integration approach Assess Mission Operation and Security Impacts Obtain Required Approvals and Clearances Define Acquisition Approach “Developing an Opportunity Into a Project” Target: 90-180 Days Conduct initial legal and regulatory review Initiate NEPA assessments Provide full Economic Case Analysis (ECA) Coordinate Off-Take and other Stakeholder Input Define Real Estate strategy Define System Integration approach Assess Mission Operation and Security Impacts Obtain Required Approvals and Clearances Define Acquisition Approach “Getting a Binding Agreement” Target:.5-1 Years Current: 1-3 Years Develop Acquisition Requirements and Evaluation Criteria Solicit Proposals from Industry Select “Highest Ranking Offeror” Obtain Required Approvals and Clearances Finalize Business Arrangements Award Contract or Execute Lease “Getting a Binding Agreement” Target:.5-1 Years Current: 1-3 Years Develop Acquisition Requirements and Evaluation Criteria Solicit Proposals from Industry Select “Highest Ranking Offeror” Obtain Required Approvals and Clearances Finalize Business Arrangements Award Contract or Execute Lease “Constructing Assets; Structuring Services” Target: 1-3 Years Monitor and Enforce performance, quality, schedule and warranty commitments Structure and Implement Support Service Agreements to Developer Structure and Account for Lease Payments or In-Kind Consideration Structure and Account for Power Purchase Payments Structure and Implement Service Agreements with Developer Structure REC transactions and accounting mechanisms “Constructing Assets; Structuring Services” Target: 1-3 Years Monitor and Enforce performance, quality, schedule and warranty commitments Structure and Implement Support Service Agreements to Developer Structure and Account for Lease Payments or In-Kind Consideration Structure and Account for Power Purchase Payments Structure and Implement Service Agreements with Developer Structure REC transactions and accounting mechanisms “Managing the Operation and Transition to Closure” Target: 10-30 years Track PPA Payments Track REC management Conduct enforcement of performance, quality, and warranty commitments with operator Conduct validation of O&M activities vs O&M plan/schedule (case by case) Manage Counterparty Risk (credit monitoring) Develop transition/maintenance/d e-commissioning plan Update installation energy plan “Managing the Operation and Transition to Closure” Target: 10-30 years Track PPA Payments Track REC management Conduct enforcement of performance, quality, and warranty commitments with operator Conduct validation of O&M activities vs O&M plan/schedule (case by case) Manage Counterparty Risk (credit monitoring) Develop transition/maintenance/d e-commissioning plan Update installation energy plan Current: 1-3 years The EITF is producing a process for developing large-scale renewable energy projects that is clear, consistent and transparent. This process will be described in a Renewable Energy Project Development Guide that will detail the five phases of project development. Energy Initiatives Task ForceUnclassified 11

12. Assistant Secretary of the Army (Installations, Energy & Environment) Prioritization & Slotting 600 Projects In tandem with the “enterprise view”, we are constantly responding to ideas coming from industry and installations Systematic Enterprise Approach Intake Process Phase 1 Opportunity Identification Screening and Prioritization based on Mission, Regulatory, Legal, and Economic Suitability Phase 1 Opportunity Identification Screening and Prioritization based on Mission, Regulatory, Legal, and Economic Suitability Previous Studies Our Evaluation Process Phase 1 Opportunity Identification Phase 2 Project Validation Phase 3 Acquisition Process Phase 4 Construction Phase 5 O&M and Closure Phase 2 Project Validation Phase 2 Project Validation MOU Signed Energy Initiatives Task ForceUnclassified 12

13. Assistant Secretary of the Army (Installations, Energy & Environment) A Balanced Approach EITF seeks to create a balanced pipeline of opportunities that will serve three driving principles Energy Initiatives Task ForceUnclassified 13 Energy Security Surety (access) Survivability (resilience) Supply (alternative sources) Sufficiency (adequacy for missions) Sustainability Energy Security Surety (access) Survivability (resilience) Supply (alternative sources) Sufficiency (adequacy for missions) Sustainability Economic Benefits In-kind revenue Reduced/stable energy bills Economic Benefits In-kind revenue Reduced/stable energy bills Mandates NDAA – 25% by 2025 EPAct – 7.5% renewable electricity consumption by 2013 EO 13514– 34% GHG reduction by 2020 Mandates NDAA – 25% by 2025 EPAct – 7.5% renewable electricity consumption by 2013 EO 13514– 34% GHG reduction by 2020 24x7 supply for critical assets Price Stability Life Cycle Cost Deployment Speed Capacity Factor Life Cycle Cost Deployment Speed Capacity Factor

14. Assistant Secretary of the Army (Installations, Energy & Environment) Systematic Enterprise Approach Where is best potential for Large Scale RE? 96 Sites, 179 Opportunities (180 Sites Total) Where could RE be cheaper than grid power? 90 sites for wind 39 sites for solar 10 sites for biomass We have screened the entire Army enterprise to identify a strong bench of opportunities Security Tier Where is Energy Security critical? Where are other factors to consider? Additional off-take Existing utility relationships Access to transmission Well defined environmental issues Energy Initiatives Task ForceUnclassified 14

15. Assistant Secretary of the Army (Installations, Energy & Environment) PV Sites Estimated Grid Premium Pohakuloa Training Area $ (0.28) Pupukea Paalaa Uka Mil Road $ (0.28) Fort De Russy $ (0.11) Makua Mil Reserve $ (0.11) Schofield Bks Military Reservation $ (0.11) Gerstle River Arctic Test Site $ (0.11) Aliamanu Military Reservation $ (0.11) Waianae-Kai Military Reservation $ (0.10) Kahuku Training Area $ (0.10) Fort Shafter $ (0.10) Tripler AMC $ (0.10) Kipapa Ammo Storage Site $ (0.10) USA Field Station Kunia $ (0.10) Wheeler Army Airfield $ (0.10) Helemano Military Reservation $ (0.09) Fort Hamilton $ (0.07) Fort Hunter Liggett $ (0.06) MTC-H Camp Roberts $ (0.06) MTA Camp Edwards $ (0.06) NTC and Fort Irwin $ (0.06) ITC Camp San Luis Obisbo $ (0.06) Sierra Army Depot $ (0.05) Defense Distribution Region West Tracy $ (0.05) Defense Distribution Region West Sharpe Site $ (0.04) Riverbank AAP $ (0.04) Parks Reserve Forces Training Area $ (0.04) Fort Ord $ (0.04) Hawthorne Army Depot $ (0.03) White Sands Missile Range $ (0.03) Presidio Of Monterey $ (0.03) Stones Ranch Military Reservation $ (0.03) Pinon Canyon $ (0.03) Fort Bliss $ (0.02) Watervliet Arsenal $ (0.02) Fort Drum $ (0.01) NG Camp Fogarty TS $ (0.01) Fort Huachuca $ (0.00) Fort Myer $ (0.00) HQBN Henderson Hall Arlington $ (0.00) Biomass Sites Estimated Grid Premium Tripler AMC $ (0.08) USA Field Station Kunia $ (0.07) Fort Hamilton $ (0.05) Kipapa Ammo Storage Site $ (0.04) MTA Camp Edwards $ (0.03) Fort Drum $ (0.03) Defense Distribution Region West Sharpe Site $ (0.02) Watervliet Arsenal $ (0.01) Parks Reserve Forces Training Area $ (0.01) Defense Distribution Region West Tracy $ (0.00) Wind Sites 1 Estimated Grid Premium Pupukea Paalaa Uka Mil Road $ (0.43) Pohakuloa Training Area $ (0.40) Makua Mil Reserve $ (0.21) Tripler AMC $ (0.20) Fort De Russy $ (0.20) Kahuku Training Area $ (0.20) Fort Hamilton $ (0.20) Fort Shafter $ (0.20) Waianae-Kai Military Reservation $ (0.19) MTA Camp Edwards $ (0.18) Aliamanu Military Reservation $ (0.18) Gerstle River Arctic Test Site $ (0.17) Black Rapids Training Area $ (0.16) NTC and Fort Irwin $ (0.16) Helemano Military Reservation $ (0.14) ITC Camp San Luis Obisbo $ (0.13) Stones Ranch Military Reservation $ (0.12) USA Field Station Kunia $ (0.12) Pinon Canyon $ (0.12) NG Camp Fogarty TS $ (0.11) Fort Drum $ (0.11) Wheeler Army Airfield $ (0.11) Schofield Bks Military Reservation $ (0.11) NG TS Ethan Allen Range $ (0.10) Defense Distribution Region West Sharpe Site $ (0.10) Fort Monmouth Main Post $ (0.09) Camp Perry TS (CTC) $ (0.09) Presidio Of Monterey $ (0.09) Kipapa Ammo Storage Site $ (0.09) HQBN Henderson Hall Arlington $ (0.09) Fort Bliss $ (0.09) Fort Myer $ (0.09) Riverbank AAP $ (0.08) Picatinny Arsenal $ (0.08) Wind Sites 2 Estimated Grid Premium Fort George G Meade $ (0.06) Defense Distribution Region West Tracy $ (0.06) Fort Dix $ (0.06) Tobyhanna Army Depot $ (0.06) Fort Lesley J McNair $ (0.06) MTC-H Camp Grayling $ (0.06) Fort Huachuca $ (0.05) Camp Grafton $ (0.05) Fort Bliss AAA Ranges $ (0.05) White Sands Missile Range $ (0.05) Fort Buchanan $ (0.05) Camp Dodge Johnston TS $ (0.05) Yakima Training Center $ (0.05) Fort Riley $ (0.05) Fort Ord $ (0.04) Fort Indiantown Gap $ (0.04) Fort Detrick $ (0.04) Iowa AAP $ (0.04) Walter Reed AMC Main Post $ (0.04) Charles E Kelly Support Facility $ (0.04) Fort Richardson $ (0.04) Camp Rapid $ (0.04) Detroit Arsenal $ (0.04) Lake City AAP $ (0.04) USA Adelphi Laboratory Ctr $ (0.04) Yuma Proving Ground $ (0.04) Military Ocean Tml Sunny Point $ (0.04) Fort A P Hill $ (0.03) NG Mead TS/FMS 06/UTES 02 $ (0.03) MTA Fort Wm Henry Harrison $ (0.03) Hawthorne Army Depot $ (0.03) MTCH Camp Guernsey $ (0.03) Pueblo Chemical Depot $ (0.03) Carlisle Barracks $ (0.03) MTA Camp Rilea $ (0.03) Kansas AAP $ (0.03) Defense Distrib Depot Susq $ (0.03) Tooele Army Depot $ (0.03) Sierra Army Depot $ (0.02) Marseilles (MTA Training Area) $ (0.02) McAlester AAP $ (0.02) CTC Fort Custer Trng Center $ (0.02) US Army Joint Sys Mfg Ctr Lima $ (0.02) Umatilla Chem Depot $ (0.01) Blossom Point Research Facility $ (0.01) MTC-H Camp Roberts $ (0.01) Fort Pickett, ARNG MTC $ (0.01) Stewart Annex $ (0.01) Camp Ashland $ (0.01) Newport Chem Depot $ (0.01) MTA Camp Crowder Neosho $ (0.00) Ravenna Training and Log Site $ (0.00) RE sites potentially below grid-price

16. Assistant Secretary of the Army (Installations, Energy & Environment) 16 Project Risk Assessment Template Project Risk Factors are reviewed on a weekly basis to identify roadblocks and key issues for successful project development Energy Initiatives Task ForceUnclassified Project Risk Assessment How does project enhance energy security on Installation? What are the possible impacts to Installation operations? Mission/ Security What is the estimate of the baseline capital cost? Have all other development costs been included? What is the value of any REC’s? Is resource validation required? What is the status? What is existing utility rate and alternative tariffs? Does Economic Case Analysis (ECA) show cost savings for Army considering current and project utility rates? Economics What is the approach and what authority is being used? What are issues to obtaining required BLM agreement? Real Estate What are the regulatory limits for interconnection, net-metering? What is the status of getting required PUC approvals? Regulatory (Legal) How much does installation use now and is this sufficient to consume all electricity? If power is to be sold off the installation, have off-takers been identified? What is the status of state RPS to drive demand? Off-Take What are the technical issues to connect to grid (e.g., substation, line capacity, etc.)? What is the status of required interconnect or flow studies? Integration (Technical) What are the major NEPA issues? Who will implement NEPA and what is the timeline? NEPA What is acquisition strategy and timeline to implement? What performance risks are there with the developer or other partners? Acquisition

17. Assistant Secretary of the Army (Installations, Energy & Environment)  Plans, integrates, awards, and administers contracts throughout the ARFORGEN Cycle supporting the Army Commands (ACOMs), Direct Reporting Units (DRUs), USARNORTH and other organizations MICC Sample of Key Renewable Energy Stakeholders, Their Relevance & Impact Energy Initiatives Task ForceUNCLASSIFIED 17 Renewable Energy Project  DASA (E&S): To determine Army Facilities energy policy  DASA (I&H): Chairs Real Estate Business Clearance Process and provides policy, programming and oversight for the full lifecycle of real estate programs and actions DASA (E&S) & (I&H)  Through Chief Appraiser, establishes appraisal standards, ensures certification of DA appraisers, and reviews or delegates review of contractor or staff prepared appraisal of real property  Contracts for Environmental Baseline Surveys  Oversees Report of Availability  Administers lease compliance, in-kind considerations, and REC/Utility bill management USACE  Formulate submit and defend the Army’s budget to the American people; provide timely, accurate and reliable information to enable leaders and managers to incorporate cost considerations into their decision making ASA (FM&C)  Provides environmental expertise to leaders, commands, Soldiers, and communities  Contracts for and oversees environmental analyses AEC  Determines project compatibility with mission requirements Army G-3/5/7  ACSIM: Review Reports of Availability for consistency with DA requirements for those outgrants on Army-controlled military real property requiring approval by higher authority. Approves distribution of funds from EUL  IMCOM: Coordinates and processes EUL Actions. Ensures EULs are recorded and documented in the RPI. Recommends distribution of funds from EUL ACSIM / IMCOM  Provide our Soldiers a decisive advantage in any mission by developing, acquiring, fielding, and sustaining the world's best equipment and services and leveraging technologies and capabilities to meet current and future Army needs ASA (ALT)  Leader in DoD’s efforts to supply the military services with alternative fuel and renewable energy solutions DLA

18. Assistant Secretary of the Army (Installations, Energy & Environment) Rapid Improvement Event Accomplishments Validated the current state process –Including documented DLA and USACE acquisition timelines for ESPC, UESC, and PPA awards Answered outstanding issues (use of commander’s site license, RGB purview, OMB scoring, DoD Siting Clearing House, Phase 1 data sources Created dialogue amongst different stakeholders and socialized the need to centralize processes within the EITF to generate 1 project per quarter

19. Assistant Secretary of the Army (Installations, Energy & Environment) Rapid Improvement Event Next Steps Distribute Executive Summary and After Action Report of Session Recommendations Adjust process maps to reflect recommendations Incorporate recommendations into draft of Project Development Guide Distribute draft of Project Development Guide to participants for review and comment

20. Assistant Secretary of the Army (Installations, Energy & Environment) Qualification based on demonstrated experience to develop and finance RE projects 3-5 Companies per Technology Initial 3 year contract with 1 year options On-Ramp and Off-Ramp Provisions Target release of 3Q12 The EITF will develop a multi- pronged acquisition strategy that can provide required flexibility beyond the Task Force term. We expect to utilize multiple contracting offices, potentially including the Army Corp of Engineers and Defense Logistics Agency, as well as DOE contracting authorities (WPA, BPA, TVA). The EITF anticipates leveraging a Multi-Award Task Award Contract (MATOC) for PPA’s being developer through USACE- Huntsville. –Draft RFP was issued for comment on February 24, 2012 EITF Acquisition Approach Energy Initiatives Task ForceUnclassified 20 Solar, Wind, BioMass, Geothermal Companies Qualified Developers Qualification/ Downselect RE Project Opportunities Project Specific Task PPA Order RE Project PPA RE Project PPA EITF Due Diligence SBA and Unrestricted based on Project Size $5B total ceiling for 30 years’ payments Qualified Projects Qualified Projects Multi-Award Task Order Contract (MATOC)

21. Assistant Secretary of the Army (Installations, Energy & Environment) If you have questions or want to do business with the Army’s Energy Initiative Task Force, please register at WWW.USARMYEITF.COM Or contact: LTC Kevin J. Lovell, PMP Kevin.J.Lovell4.mil@mail.mil (O):571-256-0509 Questions? Energy Initiatives Task ForceUnclassified 21

22. Assistant Secretary of the Army (Installations, Energy & Environment) AMERICA’S ARMY: THE STRENGTH OF THE NATION ARMY STRONG 22 Energy Initiatives Task ForceUNCLASSIFIED