NiSource Energy Technologies, Inc.

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1 NiSource Energy Technologies, Inc. Microturbine-Based Combined Heat & Power Systems for the Powder Coating Industry CHP Project Profiles Manchester Tank Vestil Manufacturing Corporation United States Department of Energy Combined Heat and Power Webcast March 7, 2006

2 NiSource Energy Technologies, Inc. A NiSource Company NiSource Energy Technologies (NET) markets and sells distributed power generation systems to commercial and small industrial customers. NiSource core operating companies are primarily engaged in the transmission, storage, and distribution of natural gas, delivering energy to 3.7 million customers located within the high-demand energy corridor that runs from the Gulf Coast, through the Midwest, and up to New England.

3 NET Industrial Project Portfolio Stripco Vestil Manufacturing Utilimaster Manchester Tank

4 NET Commercial Project Portfolio Walgreens Hilton Garden Inn Breeden YMCA

5 About Powder Coating! Advanced method of applying protective finish to a wide range of industrial materials & products.! A fast growing technology, this method accounts for >10% of all industrial finishing applications.! Basic electrical and thermal load characteristics of the powder coating process make it a good fit for Combined Heat and Power in many instances.

6 Case Study #1 Elkhart, IN Leading manufacturer of low-pressure vessels for propane, air, refrigerant, and industrial applications.

7 Tank Production & Finishing Plant

8 Plant Thermal Load Presence Convection Cure Oven Radiant Tube Dryoff Oven

9 Plant Electrical Demand Typical Production Day 0:00 0:50 1:40 2:30 3:20 4:10 5:00 5:50 6:40 7:30 8:20 9:10 10:00 10:50 11:40 12:30 13:20 14:10 15:00 15:50 16:40 17:30 18:20 19:10 20:00 20:50 21:40 22:30 23: KW PEAK EARLY SHIFT LATE SHIFT

10 CHP System Components

11 Instrumentation and Controls! Data Collection Microturbine electric production Microturbine fuel consumption Bake Oven fuel consumption Temperatures measured at various points! System Controls Microturbine Start and Stop Microturbine exhaust Bake Oven bypass valve

12 Environmental Impact NO X Emissions Comparison NOx Rate (lbm /M W h) Conventional CHP

13 Results of CHP Integration! 112,945 kwh generated during first 10 months of operation, spanning April 05 - February 06.! Powder coat bake oven has seen 30 percent reduction in fuel consumption rate.! Recognition by the EPA and IN Governor Mitch Daniels for implementing clean and efficient power generation.! Project serves as impetus for customer to explore other waste energy reduction options.

14 Project Challenges! Interconnection and parallel operation of the microturbine with local utility grid.! Transparent integration of CHP system within existing powder coating processes.! Integration of system in such a way that client is able to maintain their high level of process and product quality.! Optimize integrated system to achieve maximum energy savings.

15 Case Study #2 Angola, IN Industry leader in the manufacturing and distribution of materials handling equipment.

16 T&S Equipment Plant

17 Powder Coating System Overview

18 Plant Electrical Demand Typical Production Day 430 KW PEAK 100% UTILITY POWER END SHIFT START SHIFT 0:00 23:00 1:00 2:00 3:00 4:00 5:00 6:00 7:00 8:00 9:00 10:00 11:00 12:00 13:00 14:00 15:00 16:00 17:00 18:00 19:00 20:00 21:00 22:00

19 Ingersoll Rand Energy Systems MT-70! 70 kw Gross ISO! 92 kw Gross 0 F! 3φ, Y-, 480 VAC, 60 Hz! 450 F Exhaust Temperature! Available Heat: 540,000 btu/hr

20 Plant Electrical Demand Post-CHP Electric Power Strategy 0:00 1:00 2:00 3:00 4:00 5:00 6:00 7:00 8:00 9:00 10:00 11:00 12:00 13:00 14:00 15:00 16:00 17:00 18:00 19:00 20:00 21:00 22:00 23:00 2/3 OF ON-PEAK & ALL OFF-PEAK POWER SUPPLIED BY UTILITY CUSTOMER NOW GENERATES 1/3 OF ON-PEAK POWER OFF-PEAK OFF-PEAK

21 Plant Thermal Load Presence 350 F Cure Oven 225 F Drying Oven

22 Plant Thermal Load Presence 140 F Wash Line Plant Space Heating

23 CHP System Integration Standard Operating Mode, Powder Coat Finishing Process TO ATM TO ATM 350 F CURE OVEN 225 F PARTS DRYING

24 CHP System Integration Primary Heat Recovery System TO ATM 450 F EXHAUST 450 F TO ATM MT 70 MT 70 EXHAUST 350 F CURE OVEN 225 F PARTS DRYING

25 CHP System Integration Primary and Secondary Heat Recovery Systems CURE MT F EXHAUST MT F EXHAUST 350 F CURE OVEN EXHAUST TO DRYOFF 225 F PARTS DRYING TO ATM

26 CHP System Integration Primary, Secondary, and Tertiary Heat Recovery Systems 130 F WASH TANK MT F EXHAUST MT F EXHAUST 350 F CURE OVEN CURE EXHAUST HEATED FLUID TO DRYOFF TO ATM HEAT EX. 225 F PARTS DRYING

27 CHP System Integration Full CHP - All Heat Recovery Systems and Space Heating 130 F WASH TANK SPACE HEAT MT F EXHAUST MT F EXHAUST 350 F CURE OVEN CURE EXHAUST HEATED FLUID TO DRYOFF TO ATM HEAT EX. 225 F PARTS DRYING

28 Instrumentation and Controls CHP and Powder Coat Process Temperatures 130 F WASH TANK T SPACE HEAT MT F EXHAUST T MT F EXHAUST T TO ATM T 350 F CURE OVEN CURE EXHAUST T HEATED T FLUID T TO DRYOFF TO ATM HEAT EX. T T TO ATM 225 F PARTS DRYING T

29 Instrumentation and Controls Fluid Flows and Electric Production 130 F WASH TANK SPACE HEAT MT F EXHAUST MT F EXHAUST E TO ATM 350 F CURE OVEN CURE EXHAUST HEATED F FLUID TO DRYOFF TO ATM HEAT EX. TO ATM 225 F PARTS DRYING F F F

30 Instrumentation and Controls Points of Control Integrated CHP System 130 F WASH TANK SPACE HEAT MT F EXHAUST MT F EXHAUST C C TO ATM 350 F CURE OVEN C CURE EXHAUST HEATED C FLUID TO DRYOFF TO ATM HEAT EX. C C TO ATM 225 F PARTS DRYING C

31 Projected Results of CHP Integration Post-CHP Thermal Demand Characteristics! 350 F Convection Cure Oven Reduce Fuel Consumption by 350,000 btu/hr! 225 F Convection Drying Oven Reduce Fuel Consumption by 550,000 btu/hr! 140 F Wash Solution Holding Tanks Reduce Fuel Consumption by 250,000 btu/hr! Plant Space Heating Future Application Reduce Fuel Consumption by 250,000 btu/hr

32 Summary of Customer Benefits! Efficient use of input energy! Reduced electric utility purchases! Enhanced recycling of waste energy! Environmental emissions reduction

33 NiSource Energy Technologies, Inc. To arrange tour of an existing CHP system or for further information, please contact us! (219)

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