Passaic County Renewable Energy Initiative October 13 2011

Passaic County Renewable Energy Initiative October 13, 2011

Passaic County Renewable Energy Initiative Project Team PASSAIC COUNTY IMPROVEMENT AUTHORITY: Nicole Fox: 973 -881 -4550 Nicole. F@passaiccountynj. org COUNSEL: De. Cotiis, Fitz. Patrick, & Cole, LLP Ryan J. Scerbo: 201 -907 -5264 rscerbo@decotiislaw. com Kevin Conti: 201 -907 -5202 kconti@decotiislaw. com Jeremy Ostow 201 -347 -2138 jostow@decotiislaw. com ENERGY CONSULTANT: Birdsall Services Group, Inc. & Gabel Associates, Inc. Daniel Swayze 908 -497 -8900 dswayze@birdsall. com Andy Albee: 908 -497 -8900 aalbee@birdsall. com Joseph Santaiti: 732 -296 -0770 joseph. santaiti@gabelassociates. com FINANCIAL ADVISOR NW FINANCIAL Dan Mariniello 201 -656 -0115 dmariniello@nwfinancial. com Heather Litzebauer 201 -656 -0115 hlitzebauer@nwfinancial. com

Passaic County Renewable Energy Program Table of Contents • Welcome and Introduction • PCIA Tranche 1 Pool • Technical Specifications – Special Conditions • Project/Authority Financing Documents • Proposal Options • County Security (Authority Financing only) • Required Bid Forms • Evaluation Criteria • RFP/Program Schedule • Questions and Answers 3

NO TAX ADVICE OFFERED Potential and actual Respondents are advised that neither the County of Passaic, the PCIA, nor any of their respective attorneys, advisors or consultants are rendering any advice or opinion in connection with any federal and/or state tax matters implicated in this RFP. By submitting a proposal, Respondents expressly agree, acknowledge and understand that Respondents, including the Successful Respondent, should consult with, and rely upon, their own tax advisors in connection with such tax matters. 4

PCIA Round 1 Pool • Total System Size: 3. 23 MW – – Roof: 0. 92 MW Parking canopy: 2. 21 MW Ground mount: 0. 10 16 Sites Total 5

Technical Specifications 1. Preliminary System Size: Approx. 3. 23 MW 1. Combination, Roof, Carport and Ground 2. Technical Specifications and solar overlays to be used as guide only. 3. Respondents required to evaluate and inspect the site including review of existing building drawings (when available) and shading analyses 4. PV System output calculations must be included for independent analysis by Evaluation Team 1. Both projected and guaranteed outputs 5. Prevailing Wage Labor Rates apply 6. Construction Plan and Schedules 6

Special Site Conditions 1. All Schools – All PV canopy systems at schools, including PCCC, must be installed during summer months. The Successful Respondent will be required to coordinate construction start dates with each local unit. All exterior site work and exterior electrical work that may adversely impact use of the parking lots must be completed by August 31, 2012. 2. Passaic County Community College – Public Safety Academy – The Successful Respondent shall be responsible for the cost of re-grading the site. The canopy system shown on the conceptual site plan (See Appendix B-1) along the eastern edge of the lot shall be included in Respondents’ proposals at the Respondents’ option – it is not mandatory. The canopy system must not extend beyond the southern edge of the system as currently shown on the conceptual site plan. 3. Passaic County Sheriff’s Department: – County will conduct roof replacements during the Winter of 2011. 4. Passaic County Police Academy: – County will conduct roof replacements during the Winter of 2011.

Special Site Conditions 5. Woodland Park Borough – Municipal Building 5. Borough has concerns regarding underlayment of the existing roof. The Successful Respondent must review onsite conditions and perform its own due diligence to determine whether the roof is suitable for its proposed solar installation. 6. Ringwood Borough – Park and Ride Commuter Lot – The parking canopy PV system at the Ringwood Park and Ride Commuter Lot shall tie-into the electrical system at the adjacent Ringwood Library. 7. Passaic County Technical Institute – North Parking Lot – Off-peak electric consumption exceeds on-peak electric consumption at the Athletic Center. The North Parking canopy system should be sized to displace only annual on-peak usage of 468, 320 k. Wh so as to protect PCTI from potential losses at the end of a year due to accrued production. Respondents are free to interconnect the remaining capacity in any of the other facilities.

PROPOSAL OPTIONS • Option 1 – Company Financing. Successful Respondent must finance, design, permit, acquire, construct, install, operate and maintain the net metered photovoltaic installations (Project) at the local units identified in the RFP. Respondents must propose on Option 1. • Option 2 – Partial Authority Financing Structure. The PCIA provides construction and permanent financing for up to 70% of the costs of the Project through issuance of Bonds. Successful Respondent must fund at least 30% of the cost of the Project. Successful Respondent must design, permit, acquire, construct, install, operate and maintain the Project. Respondents must calculate County Security Amount using Appendix D-9, Base County Security Table/Worksheet. Respondents may propose on Option 2. • Option 3 – Authority Financing Structure. Identical to Option 2, except that the PCIA provides construction and permanent financing for 100% of the costs of the Project through issuance of Bonds. Respondents may propose on Option 3. Respondents who propose on Option 3 must also propose on Option 2. 9

PROPOSAL OPTIONS (cont’d) • 1603 Grant Inclusion – Proposals are valid for 60 days from the date of receipt of the proposals. Respondents must submit PPA pricing based upon two different potential award dates. – Anticipated Award – December 6, 2011 – 60 days from receipt of Proposals – January 9, 2012 10

Option 1 – Company Financing PCIA Competitive Contracting RFP Site License & Power Purchase Agreement Solar Company Solar Energy Potential Benefits to Solar Company Local Unit Net Metered PV Arrays (Carport Canopy, Ground-mounted and Rooftop) Accelerated Depreciation Reduced Energy Costs SRECs - Revenues Federal Tax Credits PPA Revenue Benefits to Taxpayers 11

Options 2 & 3 - Partial Authority/Authority Financing Structures (70/30% and 100%) Guarantee Bonds Security Package (eg. cash, parent company guarantee, L/C) Passaic County PCIA Debt Service less SRECS $ less PPA $ = Unsecured debt (aka: County Security Amount) Solar Energy Bond Financing Potential Benefits to Solar Company Power Purchase Local Unit Net Metered PV Arrays (Carport Canopy, Ground-mounted, and Rooftop) Accelerated Depreciation Reduced Energy Costs SRECs - Revenues Federal Tax Credits PPA Revenue Benefits to Taxpayers 12

Partial Authority/Authority Financing Structures (70/30% and 100%) County Security Amount (CSA) • In the event Company defaults under Lease, CSA is intended to provide a source of payment for the present value of the excess of the total debt service on the Bonds over the amount available from PPA payments from the local units and SRECs to cover such debt service on Bonds • Respondents must propose a Base CSA using Base County Security Amount Worksheet/Table, and may propose an Enhanced County Security Amount • Respondents may propose an alternative to the CSA. An alternative may include an accelerated principal payment schedule or other arrangement that would eliminate the need for the CSA • CSA is not applicable for Company Financed Option 1. Project Development Costs associated with Option 1 are lower because debt issuance costs and certain administrative fees associated with bonding are not incurred 13

Partial Authority/Authority Financing Structures (70/30% and 100%) County Security Amount (CSA) Cont. Instructions for CSA Calculation 1) At RFP Appendix D-9, “Base County Security Table/Worksheet, ” Respondents should input numbers in the yellow cells ONLY located in the "Assumptions" tab to adjust the County Security Amount (CSA) 2) Respondents should NOT adjust any other tabs or cells that are NOT highlighted in yellow. 3) SRECs included in the assumptions tab are maximum SRECs values. Respondents may only adjust these numbers downward. 14

Partial Authority/Authority Financing Structures (70/30% and 100%) County Security Amount (CSA) Cont. Instructions for CSA Calculation 4) For Partial Authority Financing (70/30%), with the current conservative assumptions, the CSA amount in the first year is $3, 703, 150. 06. This value will change based on changes made to the assumptions highlighted in yellow. 5) For Authority Financing (100%), with the current conservative assumptions, the CSA amount in the first year is equal to $8, 250, 722. 54. This value will change based on changes made to the assumptions highlighted in yellow. 15

Partial Authority/Authority Financing Structures (70/30% and 100%) County Security Amount (CSA) Cont. Instructions for CSA Calculation Currently, the assumptions include a cost of capital of 5. 25%. This composite rate (based on the annual rates of interest in the RFP) should be used to calculate the PPA Rate. As per the RFP, Respondent must propose an adjustment factor applicable for each ten basis point change in yield (up or down). An addendum to the RFP may be issued, closer to the Proposal Due Date, updating the rate, but the actual rate will not be determined until the Bonds are sold. Respondents should NOT adjust any other tabs or cells that are NOT highlighted in yellow. 16

Partial Authority/Authority Financing Structures (70/30% and 100%) County Security Amount (CSA) Cont. Types of CSA • • Cash Letter of Credit (investment grade) Parent Guaranty (investment grade) Any other form acceptable to County (in County’s sole discretion) Posting of CSA • • At PCIA bond closing, when all Project Documents and Authority Financing Documents are executed Later, only if acceptable to County (e. g. pledging of 1603 grant where cash not realized until end of construction and the Successful Respondent provides another form of CSA meeting the requirements of the RFP for the period beginning on the date of issuance of the Bonds) 17

Required Bid Forms • • • • Form E-1: PPA Price Quotation Sheet(s) Form E-2: Respondent Information / Cover Letter Form E-3: Consent of Surety Form E-4: Form of Construction Performance Bond Form E-5*: Agreement for Proposal Security in Lieu of Proposal Bond Form E-6*: Proposal Bond Form E-7: Ownership Disclosure Statement Form E-8: Non-Collusion Affidavit Form E-9: Consent to Investigation Form E-10: Statement of Respondent’s Qualifications Form E-11: Acknowledgement of Receipt of Addenda (if any) Form E-12: Letter of Assent to Project Labor Agreement Form E-13: Aff. Action Compliance Notice/EEO Mandatory Language Form E-14: Proposal Checklist *Submit either Form E-5 or Form E-6 18

Option 1 – Company Financing PPA Price Quotation Sheet 1. 2. 3. 4. 5. 6. 7. 8. Total Project Cost Renewable Energy Project Costs PPA Price – Based upon award dates PPA Post Proposal Price Adjustments Increase/Decrease in Project Development Costs Escalation Factor Sharing of SRECs Electricity Production/Guarantee Non-Material Changes to Documents Innovative Benefits – these will be scored End of Term Fair Market Value Purchase Option 19

Options 2 & 3 – Partial Authority/ Authority Financing Structures (70/30% and 100%) PPA Price Quotations 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. Total Project Costs Renewable Energy Project Costs PPA Price – Based upon award dates PPA Post Proposal Price Adjustments Increase/Decrease in Project Development Costs Change in Interest on Bonds Escalation Factor SRECs Sharing Base County Security Amount Enhanced County Security Amount Alternative to CSA Electricity Production/Guarantee Non-Material Changes to Documents Innovative Benefits – these will be scored End of Term Fair Market Value Purchase Option Accelerated Amortization Schedules 20

Evaluation Criteria Phase 1: RFP Proposal Checklist Items PPA Price Quotation Sheets (E-1 a-c) Respondent Information/Cover Letter (E-2) Consent of Surety (E-3) Form of Construction Performance Bond (E-4) Proposal Security Agreement (E-5) or Proposal Bond (E-6) Ownership Disclosure Statement (E-7) Non-Collusion Affidavit (E-8) Consent to Investigation (E-9) Statement of Respondent’s Qualifications (E-10) Acknowledgement of Receipt of Addenda (E-11) Letter of Assent to PLA (E-12) Aff. Action Compliance/Mandatory EEO Language (E-13) Proposal Checklist (E-14) 21

Evaluation Criteria (cont’d) Phase 1: Other Submission Requirements Public Works Certificate Notice of Classification Total Amount of Uncompleted Contracts Form DPMC 701 Business Registration Certificate Evidence of County Security (Partial Authority/Authority Financing Options 2 and 3 only) 22

Evaluation Criteria (cont’d) Phase II: Proposal Evaluation (Only Proposals that comply with Phase 1 will proceed to Phase II) 1. Financial Benefits a. – – – NPV PPA Price SRECs Sharing Other Relevant Information proposed on E-1 2. Technical Design/Approach a. b. c. d. Output Guarantee (k. Wh) Design Strategy Project Team Approach O&M Plan 23

Evaluation Criteria (cont’d) Phase II: Proposal Evaluation (cont’d) 3. Proposer Experience a. b. c. d. Project Management Contractor Experience Project Experience New Jersey Experience 4. Financial Strength a. Financial Capability/Strength of Provider b. Financial Risk to County 24

Evaluation Criteria (cont’d) Phase III: Oral Interview Evaluation (All qualified Respondents will be Interviewed) 1. Oral Interview Evaluation a. Presentation b. Explanation Key Factors c. Understanding Financial Factors/SREC Market 25

RFP Procurement Schedule 2011 • October 3: RFP Issued • October 13: Pre-Proposal Meeting • October 13, 14 & 17: Site Tours • October 21: Written Questions from Respondents Due • November 10: Proposals Due from Respondents 26

RFP/Program Schedule 2011 • November 18: Authority reserved date for interviews with all qualified Respondents • Week of December 1: Authority discusses Evaluation Report with County and local units • November 29: County Meeting to adopt County Guaranty Ordinance, if applicable (Option 2 or 3 award only) • December 6: Authority Special Meeting to award to Successful Respondent • January 2012: (Option 2 or 3 award only) Sale and issuance of Bonds 27

RFP/Program Schedule 2013 • January: Project Construction Completed 28

Questions and Answers Thank you for attending today’s Passaic County Renewable Energy Program Pre-Proposal Meeting! 29