1. Energy Conservation Measures Group (ECM Solutions) Non Government Commercial/ Institutional Your Energy Consultants

2. THE TEAM COO, Founder: Robert Oakley Jr. CEO, Founder: Simmon Wilcox MD. Sheena Radi Bradley Henson Heidi Gurney Josh Colbert Mike Hagarty Musheer Robinson Eugene Ji Senior Inspector Business Development Executive Assistant Financial Advisor Technical Writer CM Advisor ESCO Consultant www.ecmsolutionsgroup.com

3. Program Focus Government buildings Housing Developments Universities Schools

4. A comprehensive inspection of your project, including energy efficiency improvements and services Referrals for qualified Energy Service Company (ESCO) Allow your energy savings to pay for the work ECM Performance contracts can be used to leverage more comprehensive modernization projects Grant research and submittal to save you time ECM will inform you of all resources available www.ecmsolutionsgroup.com What do you get by contracting ECM as your Consultant?

5. www.ecmsolutionsgroup.com Historical Performance of the ESCO Industry Institutional Projects

6. www.ecmsolutionsgroup.com Standard Services Offered by ECM Solutions ESCO  Grant application submittal  Project performance guarantees for the duration of the contract  Savings measurement and verification  Ongoing equipment maintenance services  Extensive resident training program services  Investment grade energy audit  Comprehensive project design & engineering  Sources of project financing  Equipment acquisition  Complete project installation and management

7. www.ecmsolutionsgroup.com Standard Services Offered by ECM ESCO (continued)  Rate negotiation  Commissioning of new equipment  Customer education on building load profile  Project monitoring  Extensive ongoing training for building operators and facility personnel  Access to available incentive programs

8. www.ecmsolutionsgroup.com Multifamily Market Opportunities Multifamily (5+ units): over 15 million households

9. www.ecmsolutionsgroup.com Many tens of thousands of households Very low and low income PHAs & Non-Profit housing entities generally have little or no credit history or financing expertise Owned and managed by either housing authorities or nonprofits “Family” and “elderly” occupancy Public Housing & Non-Profit Housing Entities HUD & the States regulate performance contracting and other energy incentives

10. HUD regulatory incentive in place since 1991 Many municipal housing authorities with $1 million utility bill or more PHAs & Not-for profits qualify for tax-exempt financing Average investment: $2,000-$4,000 per unit among experienced ESCOs RFP/RFQ procedures are in place Public & Not-for- Profit Housing Performance Contract Opportunities www.ecmsolutionsgroup.com

11. Energy Savings Potential for Not-for- Profits Annual potential: $ hundreds of millions of dollars Less than dozen Deep South PHAs have done EPC projects Actual savings: small percentage of potential

12. www.ecmsolutionsgroup.com Residential Market Characteristics that Matter Ownership/market segmentation (single, multi, public, private, etc.) Occupancy (family/elderly/ handicapped) Building construction, size, age, and condition Utility costs Metering configuration and applicable rate structures (master/individual/building- based) Climate, loads Presence of utility or HUD, housing agency subsidies Impacts of utility company deregulation

13. Water efficiency measures are key leveraging elements Sensitivity to tenant concerns, behavior Both Public housing & Not-for–profit success requires housing background; rules are complicated Must sell management, tenants, HUD or Not-for profit owner What is Different About Multi-family Performance Contracting? www.ecmsolutionsgroup.com

14. Why Use ECM for your ESCO needs?  Long-term partnerships  Reduced project risk  Utilities used to be the only game in town – now there’s the option of using G2’s ESCO as a Third Party managing the energy risk until a point of self-management (all technology costs retired)  Expertise: Survey, analysis, design, financing Project management, installation, O&M, M&V Energy procurement  Financing options in place  Minimal costs until energy savings accrue  Synergistic teamwork/total solutions

15. HUD allows retention of savings generated (up to 20 years) Improves energy efficiency and occupant comfort levels Minimizes technical and financial risks Advantages of ECM ESCO’s Performance Contracting www.ecmsolutionsgroup.com

16. Benefits of ESCO’s Performance Contracting Replace aging equipment with new equipment Improved facility energy efficiency and reduced energy costs Access to ECM’s 3rd party financing for needed capital energy improvements Reliable and persistent long-term energy saving project performance Enhanced local economies through the G2 ESCO’s use of local subcontractors Decreased equipment repairs and lower maintenance costs Optimized equipment performance through project commissioning Better overall management and control of facility

17. www.ecmsolutionsgroup.com Risk Reduction Benefits Contractually measurements savings reduces the risk of savings erosion over time Utility savings and performance monitoring reduces the risk of under-funding key maintenance requirements Integrated project analysis, design, and construction reduces the risk of lost savings opportunities and schedule delays Up-to-date training and knowledge for facility operating personnel reduces the risk of project non-performance Ability to select services and materials based upon quality and value, rather than on lowest first cost

18. www.ecmsolutionsgroup.com Savings Erosion Over Time is Typical of Conventional Energy Projects

19. www.ecmsolutionsgroup.com Stable Savings Guaranteed Over Time is ECM ESCO’s Value Proposition

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21. Comparison of Cumulative Long-Term Energy Savings Achieved Over Ten Years Through ESCO’s PC

22. www.ecmsolutionsgroup.com Conventional Bid and ESCO Negotiated Procurement  All funds needed for a comprehensive energy project are readily available  Lower staff cost and quicker completion of a comprehensive project  One contract with single point accountability for project performance  Long-term energy savings are guaranteed by the G2 ESCO  May take several years to secure sufficient funds to implement comprehensive energy projects  High staff costs due to a piecemeal approach to bidding and managing each separate project  Multiple contracts with multiple vendors can result in conflicting project requirements  Energy savings are not guaranteed ConventionalECM Performance Contracts

23. www.ecmsolutionsgroup.com Conventional Bid and ESCO Negotiated Procurement (continued)  G2 Performance contracts would typically contain explicit comfort and operating standards  G2’s Comprehensive project implementation methodology maximizes savings design opportunities  G2 Energy projects are funded with utility bill savings  G2’s ESCO compensation is tied to providing energy savings over the term of the contract  Guarantees of comfort and operating standards are not usually offered by equipment vendors  Incremental project implementation misses savings design opportunities  Energy projects must compete for limited budget resources with other improvement projects  No direct incentive for building staff to reduce energy costs ConventionalECM Performance Contracts

24. www.ecmsolutionsgroup.com Conventional Bid and ESCO Negotiated Procurement (continued)  G2’s ESCO provides ongoing technical expertise to insure project performance  Utility bill savings finance operations and maintenance are provided by the G2 ESCO to maintain project performance  Limited staff or lack of expertise may put project performance at risk  Operations and maintenance budgets are usually under-funded, resulting in wasted energy ConventionalECM Performance Contracts

25. Cash Flows from Conservation Projects Using Standard PFS Funding

26. www.ecmsolutionsgroup.com Implementing Regulations: Revised March 29,2001 – Federal Register Savings must be monitored and must be documented by the PHA If a PHA takes specific actions to reduce the utility rates it pays, the PHA may share in the savings on a 50/50 matching basis Incentive 1 - Sharing of Energy Rate Reductions 990.110(c)(1)(i) 50% of the decrease may be kept by the PHA (no time limitation); 50% must be returned as part of each PHA’s post-year utility settlement These actions must be specific to the PHA and must represent greater action than general participation in a rate-setting proceeding

27. www.ecmsolutionsgroup.com Implementing Regulations:Revised as a result of Rulemaking on March 29, 2001 – Federal Register (continued) Incentive 2 – Non-HUD Financing of Energy Conservation Measures Payments Dependent on Energy Consumption Savings Realized 990.110(c)(2)(ii) If a PHA undertakes energy conservation measures with non-HUD financing, which are approved by HUD, the PHA may retain up to 100% of the savings from the decreased energy consumption, once payment to the energy conservation contractor or ESCO is completed and the terms of that financing agreement are satisfied

28. www.ecmsolutionsgroup.com Implementing Regulations: Revised March 29,2001 – Federal Register (continued) PHA is responsible for debt amortization if the projected savings do not materialize A contract is agreed to between the PHA and the ESCO that the energy or water efficiency improvements will perform as projected and the monetary savings will accrue (thus, “energy performance contracting”) The 3-year rolling base of utility consumption is frozen at the level existing prior to installation of the energy conservation measures ESCOs must provide sufficient guarantees of savings such that a shortfall in the savings will not cause the PHA to default on the debt if the projected savings are not realized.

29. www.ecmsolutionsgroup.com HUD will freeze the three- year rolling base at the current consumption level The Frozen Base Incentive As consumption goes down, the authority keeps 100% of the cost difference

30. Cash Flows from Conservation Projects Using the Frozen Base Incentive

31. www.ecmsolutionsgroup.com Implementing Regulations: Revised as a result of Rulemaking on March 29, 2001 – Federal Register (continued) Debt Payment Not Directly Dependent on Energy Savings 990.110(e) Where the contract does not allow the PHA’s payment to be dependent on the cost savings it realizes, then the PHA is eligible for an additional operating subsidy each year of the contract to amortize the cost of the energy efficiency measures, subject to a maximum annual limit equal to the annual debt service for that year

32. Cash Flows from Conservation Projects Using Add-On Subsidy Incentive