Utilizing Performance Contracting to Meet the Presidents Climate Commitment

1. Utilizing Performance Contracting to Meet the Presidents Climate Commitment Second Nature TAC Energy Solutions July 8, 2008 We deliver enduring performance.

2. Today’s Agenda • Introduction to the Clinton Climate Initiative’s available resources • ACUPCC Process and Performance Contracting We deliver enduring performance.

3. Andrea Putman, Second NatureCo-Manager of the ACUPCC/CCI Partnership We deliver enduring performance.

4. We deliver enduring performance.

5. Goal • Exponentially increase the number of large scale energy saving retrofit projects and reduce greenhouse gas emissions on campuses with no net increase in annual capital or operating expenses. We deliver enduring performance.

6. Opportunity • Buildings account for ~40% of global GHG emissions, up to 70% in big cities and 90% for college campuses • Lifecycle Cost • 75% of costs of buildings occur after construction is complete • Efficiency Pays We deliver enduring performance.

7. CCI’s Energy Efficient Building Retrofit ProgramEnergy Services Companies (ESCOs) • Commitment • Enter new markets on favorable terms • Participate in EPC projects in partner cities • Deliver sustainable projects with maximum savingswith performance guarantees • Develop mutually acceptable Terms & Conditionsof Performance Contracts • Guaranteed Maximum Price; open-book pricing; annualas well as total project savings guarantees; gain sharing(or “cost reduction incentive”) • Work with CCI to reduce program costs We deliver enduring performance.

8. Global Financial Institutions • Commitment • Provide reasonable & efficient access to capital • Design financial solutions for EEBRP participants • Lend capital for retrofits based on savings guarantees • US $1 billion in capital each for the EE market We deliver enduring performance.

9. CCI Purchasing Assistance • 25 supplier agreements negotiated to date • Reductions range 25-70% for more “niche,” high efficiency We deliver enduring performance.

10. Task Force • APPA • Arizona State University • Catalyst Financial Group, Inc. • City Colleges of Chicago • Clinton Climate Initiative • Donahue Associates, Inc. • EcoAmerica • Energy Ventures International • Hannon and Armstrong • Holland & Knight • Los Angeles Community College District • National Association of College and University Business Officers • National Association of Educational Procurement • National Association of Energy Service Companies • Oberlin College • Rocky Mountain Institute • Second Nature • Syracuse University • Townsend Engineering • U.S. Environmental Protection Agency, Energy Star • U.S. Green Building Council We deliver enduring performance.

11. For Further Information • Jonathan Kevles, Clinton Climate Initiative • Building Retrofit Program team member • (857) 294-8163 • jkevles@clintonfoundation.org • Jonathan Magaziner, Clinton Climate Initiative • Building Retrofit Program team member • jmagaziner@clintonfoundation.org • Andrea Putman, Second Nature • Director of Sustainability Financing • (703) 528-8579 • aputman@secondnature.org • http://www.presidentsclimatecommitment.org/html/solutions_cci.htm We deliver enduring performance.

12. Today’s Agenda • Introduction to the Clinton Climate Initiative • ACUPCC Process and Performance Contracting We deliver enduring performance.

13. ACUPCC Process / Performance Contracting • Establish a baseline • Consider reduction strategies • Implement strategies • Measure results against baselines We deliver enduring performance.

14. Performance Contracting Helps Meet ACUPCC Requirements • Understanding baselines and their significancein ongoing measurement of progress • Understanding the interaction of potential mitigation strategies in order to determine their real impact • Providing ongoing reporting to meetestablished requirements • Providing a funding stream to implementmitigation strategies We deliver enduring performance.

15. Establishing Your Carbon Footprint (Baseline) • Guidelines from ACUPCC Implementation Guide • Encourages utilization of a standard protocol • Suggests use of “Campus Calculator” from Clean Air-Cool Planet • Ongoing reporting requirement to show progress We deliver enduring performance.

16. Use of Campus Calculator • Inputs • Utility data provides the majority of the CO2 output • Scope 1 emissions – central plant – domestic HW heating • Scope 2 emissions – off site generation – largely electricitybut purchased steam • Campus data regarding travel and fleet • Scope 1 and 3 emissions – transportation • This section is the most difficult to pin down We deliver enduring performance.

17. Sample Output from Campus Carbon Calculator We deliver enduring performance.

18. Impacts on the Baseline • Weather • Student Population • Campus Growth or Decline We deliver enduring performance.

19. Sample Output from Campus Carbon Calculator We deliver enduring performance.

20. Sample Output from Campus Carbon Calculator We deliver enduring performance.

21. Points to Consider when Establishing a Baseline • For scope 1 and 2 emissions, enter as much historical utility data as possible • Include information on campus dynamics in yourreporting process • Work toward benchmark data, eg. MMBtu/sq. ft., number CO2/student, or /square footage • Think trajectory, not snap shots in time • Always use actual data where it exists and makeeducated estimates where it does not We deliver enduring performance.

22. What’s Next • Once you know where you are, you will knowwhere you aren’t! • Clean Air-Cool Planet’s upcoming version(some “what if” tools) • Controlling your trajectory We deliver enduring performance.

23. Mitigation Option Evaluation • Potential to avoid or reduce CHG emissions • Flexibility as a step towards future emissions-reduction measures • Return on investment or financial impact • Potential to create positive and/or negative socialand environmental side-effects • Relationship to other potential measuresand opportunities for synergistic measures • Potential to be scaled upward if successful • Potential to involve students and faculty We deliver enduring performance.

24. How Can You Know You Will Get What You Expect? • Premise – if you reduce energy consumption you reduce CO2 emissions • Is there a way to guarantee energy reduction? • Why is it important to be assured that a mitigationstrategy will work? We deliver enduring performance.

25. How Can You Know You Will Get What You Expect? Faulty Assumptions We deliver enduring performance.

26. How Can You Know You Will Get What You Expect? Faulty Assumptions We deliver enduring performance.

27. How Can You Know You Will Get What You Expect? 225% Overstated Faulty Assumptions We deliver enduring performance.

28. Sample Output from Campus Carbon Calculator We deliver enduring performance.

29. Baselines and Climate Action Plans • Use real data where possible • Use the baseline as a guide to attacking the largesources of CO2 emissions • Beware of CO2 reduction based upon assumptions • Real CO2 emissions come only from real energy savings We deliver enduring performance.

30. Meeting Program Deadline Requirements • Reporting Frequency • Within 2 months of signature • Create “institutional structures” to guide developmentand implementation of Climate Action Plan (CAP) • Broad based among campus community • High level participants empowered to enact plans • Identify 2 tangible actions • Must be implemented before end of year 2 • Within 1 year of signature • Report results of GHG emissions inventories • Must identify calculator used and source of emissions coefficients We deliver enduring performance.

31. Meeting Program Deadline Requirements • Reporting Frequency • Within 2 years of signature • Implemented at least 2 tangible actions • Updated GHG emissions inventory • Submit CAP • Includes target date for achieving climate neutrality • Includes interim milestones prior to target date We deliver enduring performance.

32. Meeting Program Deadline Requirements • Elements of Climate Action Plan (CAP) • Details of institution plans to achieve climate neutrality • Plans to make climate neutrality and sustainability partof curriculum and to share knowledge within community • Mechanisms for tracking progress on goals and actions • Recommendation to incorporate CAP into comprehensive sustainability plan We deliver enduring performance.

33. Meeting Program Deadline Requirements • Format of CAP • Introduction • Background information • Campus Emissions • Include visual representations of emissions trajectory • Mitigation Strategies • Description of action plan to mitigate each emission source • Outreach efforts • Includes educational, research, and community • Financing • Tracking Progress We deliver enduring performance.

34. Meeting Program Deadline Requirements • Reporting Frequency • Within 3 years of signature • Progress in implementing CAP • Updated GHG emissions inventory • Within 4 years of signature • Updated GHG emissions inventory • Encouraged to submit narrative progress report of CAP annuallybut requirement is every other year We deliver enduring performance.

35. Developing Meaningful Reports We deliver enduring performance.

36. Developing Meaningful Reports • Customize to meet your unique environment • You know what is important to your campus and community • Centralized reporting system to track • Actions taken • Outreach efforts • Evaluation of cost and benefits • Quantitative tracking • Prove results • GHG, energy efficiency, sustainability • Identify ROI for each action item • Visibly show campus, community, and potential donors We deliver enduring performance.

37. Evaluating Funding Options • Funding Options available include: • Cash on Hand • Capital Campaign • Financing • Energy Performance Contract • Combination of Options Above We deliver enduring performance.

38. Evaluating Funding Options • Considerations • What is the financial impact of your investment? • ROI? • Establish/Retain campus identity? • Public Relations/Press? • % of goal achieved towards carbon neutrality? • Reduction in deferred maintenance? • Combination of above We deliver enduring performance.

39. Evaluating Funding Options • Benefits of Performance Contracting • Keep more of your available cash • Partial funding stream with guarantee of performance • Whole building approach, not piecemeal • Audit deliverables can be helpful in a capital campaign • Achieve larger % of GHG emissions reduction and getto ultimate objective more quickly • Reduction in deferred maintenance • Gain much needed improvements in infrastructure • Partnership approach • Collaboration with entire campus community • Students/staff can work with audit team to develop appropriate solutions for your campus We deliver enduring performance.

40. Electrical Distribution Products Industrial Automation Critical Power & Cooling Services Electrical Distribution Products Company Overview Est. 1836 $25.1B Revenue - 2007 Offices in 102 countries Building Automation$2B Sales - 2007 PARTNERS300 partner offices throughout the US ENERGY SOLUTIONS350+ projects nationwide Offices in 25 states SYSTEMS INTEGRATION17 branch offices focus on building automat. & security STRATEGIC ACCOUNTSTelecom, Data Centers, Retail, Federal Video Security Systems and Support Equipment We deliver enduring performance.

41. TAC Energy Solutions • TAC – Higher Education Solutions • We have been working with higher education for 15 years. • We help campuses move forward in a sustainable, environmentally friendly, and energy efficient manner. • We are using Clean Air Cool Planet’s Campus Calculator as part of our Audit process. • Results to date: • $47,000,000 in guaranteed utility savings • 6,000,000 tons of CO2 removed • Equivalent of 64,000 cars off the road for a year or 88,000 acres of trees planted We deliver enduring performance.

42. Questions/Comments? We deliver enduring performance.

43. Contacts • TAC Energy Solutions • Mike Mumper – NE/Midwest • 717-232-8182 x233 mike.mumper@tac.com • Barry Wilhelm – Mid Atlantic/South • 804-330-5660 x110 barry.wilhelm@tac.com • Jared McCurley – West of Mississippi • 312-286-4662 jared.mccurley@tac.com • www.tac.com/am/cci We deliver enduring performance.