ENLIGHTENED GENERATION

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1 ENLIGHTENED GENERATION

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3 It s personal

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8 -38 Direct Employees >100 jobs Created indirectly >100 Local Suppliers >$14M spent in local economy annually >210k MW s of Renewable power generated annually >200k Bone Dry Ton of Biomass burned annually >15k acres treated annually for Biomass removal In 2015, our Capacity Factor to Budget was 100.3%

9 Impact of Biomass power vs others on local economy

10 Impact of Biomass power vs others on local economy Forest Health Restoration Controlled burning savings >$1M annually to USFS Fighting Catastrophic Wildfire cost of >$150M between Rodeo/Chedeski, Wallow, and San Juan fires

11 Impact of Biomass power vs others on local economy Forest Health Restoration Controlled burning savings >$1M annually to USFS Fighting Catastrophic Wildfire cost of >$150M between Rodeo/Chedeski, Wallow, and San Juan fires Watershed Impact Augmentation of current watershed by 20% Reservoir Protection >$62M spent by Denver Water on erosion control, dredging, and treatment in protection of reservoirs, like CC Cragin, from 150k acres fire)

12 Impact of Biomass power vs others on local economy Forest Health Restoration Controlled burning savings >$1M annually to USFS Fighting Catastrophic Wildfire cost of >$150M between Rodeo/Chedeski, Wallow, and San Juan fires Watershed Impact Augmentation of current watershed by 20% Reservoir Protection >$62M spent by Denver Water on erosion control, dredging, and treatment in protection of reservoirs, like CC Cragin, from 150k acres fire) Local ranchers received >$2M of grassland restoration at no cost in 2014

13 Impact of Biomass power vs others on local economy Forest Health Restoration Controlled burning savings >$1M annually to USFS Fighting Catastrophic Wildfire cost of >$150M between Rodeo/Chedeski, Wallow, and San Juan fires Watershed Impact Augmentation of current watershed by 20% Reservoir Protection >$62M spent by Denver Water on erosion control, dredging, and treatment in protection of reservoirs, like CC Cragin, from 150k acres fire) Local ranchers received >$2M of grassland restoration at no cost in 2014 Baseload vs Intermittent

14 Impact of Biomass power vs others on local economy Forest Health Restoration Controlled burning savings >$1M annually to USFS Fighting Catastrophic Wildfire cost of >$150M between Rodeo/Chedeski, Wallow, and San Juan fires Watershed Impact Augmentation of current watershed by 20% Reservoir Protection >$62M spent by Denver Water on erosion control, dredging, and treatment in protection of reservoirs, like CC Cragin, from 150k acres fire) Local ranchers received >$2M of grassland restoration at no cost in 2014 Baseload vs Intermittent Local Power Production

15 Impact of Biomass power vs others on local economy Forest Health Restoration Controlled burning savings >$1M annually to USFS Fighting Catastrophic Wildfire cost of >$150M between Rodeo/Chedeski, Wallow, and San Juan fires Watershed Impact Augmentation of current watershed by 20% Reservoir Protection >$62M spent by Denver Water on erosion control, dredging, and treatment in protection of reservoirs, like CC Cragin, from 150k acres fire) Local ranchers received >$2M of grassland restoration at no cost in 2014 Baseload vs Intermittent Local Power Production Emissions Benefit

16 We have learned many lessons from the school of hard knocks :

17 We have learned many lessons from the school of hard knocks : * Equipment layout and budget shortcuts created increased capital investment to make the plant effective.

18 We have learned many lessons from the school of hard knocks : * Equipment layout and budget shortcuts created increased capital investment to make the plant effective. * Original build was taken back by the bank in the financial collapse of 2008.

19 We have learned many lessons from the school of hard knocks : * Equipment layout and budget shortcuts created increased capital investment to make the plant effective. * Original build was taken back by the bank in the financial collapse of * Dealing with baghouses on a biomass plant is expensive and problematic.

20 We have learned many lessons from the school of hard knocks : * Equipment layout and budget shortcuts created increased capital investment to make the plant effective. * Original build was taken back by the bank in the financial collapse of * Dealing with baghouses on a biomass plant is expensive and problematic. * The Paper Mill that was conjoined to the facility went into bankruptcy in 2012.

21 We have learned many lessons from the school of hard knocks : * Equipment layout and budget shortcuts created increased capital investment to make the plant effective. * Original build was taken back by the bank in the financial collapse of * Dealing with baghouses on a biomass plant is expensive and problematic. * The Paper Mill that was conjoined to the facility went into bankruptcy in * Fuel costs without an abundant wood based economy causes high cost for fuel.

22 We have learned many lessons from the school of hard knocks : * Equipment layout and budget shortcuts created increased capital investment to make the plant effective. * Original build was taken back by the bank in the financial collapse of * Dealing with baghouses on a biomass plant is expensive and problematic. * The Paper Mill that was conjoined to the facility went into bankruptcy in * Fuel costs without an abundant wood based economy causes high cost for fuel. * Depending on the National Forest to supply consistent fuel has forced us to adapt our fuel sourcing strategy.

23 We have learned many lessons from the school of hard knocks : * Equipment layout and budget shortcuts created increased capital investment to make the plant effective. * Original build was taken back by the bank in the financial collapse of * Dealing with baghouses on a biomass plant is expensive and problematic. * The Paper Mill that was conjoined to the facility went into bankruptcy in * Fuel costs without an abundant wood based economy causes high cost for fuel. * Depending on the National Forest to supply consistent fuel has forced us to adapt our fuel sourcing strategy. * Assuring a consistent emissions profile with seasonality in fuel supply.

24 We have learned many lessons from the school of hard knocks : * Equipment layout and budget shortcuts created increased capital investment to make the plant effective. * Original build was taken back by the bank in the financial collapse of * Dealing with baghouses on a biomass plant is expensive and problematic. * The Paper Mill that was conjoined to the facility went into bankruptcy in * Fuel costs without an abundant wood based economy causes high cost for fuel. * Depending on the National Forest to supply consistent fuel has forced us to adapt our fuel sourcing strategy. * Assuring a consistent emissions profile with seasonality in fuel supply. * Measuring inventories and consumption rates on a continuous feed facility.

25 The Four Forest Restoration Initiative (4FRI) is The largest restoration project in the American West. It includes four of our National Forests in Arizona. The goal is to plan and implement restoration across 2.4 million acres of Ponderosa Pine Forest. The problem we have a Biomass Bottleneck!

26 Arizona must mitigate its woody biomass in order to return the National Forests to a healthy vegetative state. How can this be done?

27 Arizona must mitigate its woody biomass in order to return the National Forests to a healthy vegetative state. How can this be done? Additional PPA s * Local Utilities * WAPA * California

28 Arizona must mitigate its woody biomass in order to return the National Forests to a healthy vegetative state. How can this be done? Additional PPA s * Local Utilities * WAPA * California Subsidy * USFS Biomass Mitigation * USDA BCAP * Forest to Faucet or Forest to Outlet Surcharge * State/County level

29 Arizona must mitigate its woody biomass in order to return the National Forests to a healthy vegetative state. How can this be done? Additional PPA s * Local Utilities * WAPA * California Subsidy * USFS Biomass Mitigation * USDA BCAP * Forest to Faucet or Forest to Outlet Surcharge * State/County level Supply Chain Solutions * Densification * ADOT weight limit increases * Use of rail * Industry synergies

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