Energy Conservation Measures Group (ECM Solutions)

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

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 Technical Writer CM Advisor ESCO Consultant ESCO Consultant www.ecmsolutionsgroup.com

3. Government buildings Housing Developments ProgramFocus Schools Universities www.ecmsolutionsgroup.com

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

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

6. Standard Services Offered by ECM Solutions ESCO • Investment grade energy audit • Comprehensive project design & engineering • Sources of project financing • Equipment acquisition • Complete project installation and management • 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 www.ecmsolutionsgroup.com

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

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

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

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

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

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

14. Why Use ECM for your ESCO needs? • 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 • 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) www.ecmsolutionsgroup.com

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

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

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

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

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

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

22. Conventional Bid and ESCO Negotiated Procurement Conventional ECM Performance Contracts • 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 • 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 www.ecmsolutionsgroup.com

23. Conventional Bid and ESCO Negotiated Procurement (continued) Conventional ECM Performance Contracts • 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 • 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 www.ecmsolutionsgroup.com

24. Conventional Bid and ESCO Negotiated Procurement (continued) Conventional ECM Performance Contracts • Limited staff or lack of expertise may put project performance at risk • Operations and maintenance budgets are usually under-funded, resulting in wasted energy • 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 www.ecmsolutionsgroup.com

25. Cash Flows from Conservation Projects Using Standard PFS Funding

26. Implementing Regulations: Revised March 29,2001 – Federal Register Incentive 1 - Sharing of Energy Rate Reductions 990.110(c)(1)(i) 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 • Savings must be monitored and must be documented by the PHA • 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 www.ecmsolutionsgroup.com

27. 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 www.ecmsolutionsgroup.com

28. Implementing Regulations: Revised March 29,2001 – Federal Register (continued) 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”) PHA is responsible for debt amortization if the projected savings do not materialize 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. • The 3-year rolling base of utility consumption is frozen at the level existing prior to installation of the energy conservation measures www.ecmsolutionsgroup.com

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

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

31. Implementing Regulations: Revised as a result of Rulemaking on March 29, 2001 – Federal Register (continued) 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 • Debt Payment Not Directly Dependent on Energy Savings 990.110(e) www.ecmsolutionsgroup.com

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