Lake County Oregon

Oregon’s most renewable energy county

Renewable Energy
Organization and Implementation Plan

Brian Hider, Lake County Development Corporation: Renewable Energy Coordinator

Table of Contents

Part 1 - Introduction
Pg 1 Pg 2 Pg 3

 Introduction  Northwest Renewable Energy  List of Major Projects

Landscape

Part 2 – Major Project Analysis
 Economic and Project Management Approach  Major Project Breakdowns Pgs 18-21  Financing
Pgs 5-6 Pgs 7-17

Part 3 – Conclusions
 Where Does Lake County Stand?  Final Results and Analysis Pgs 33-38  Contacts, Resources, and Appendix
Pgs 23-24 Pgs 25-32

Introduction
Abstract Lake County has long been involved in exploring it‟s renewable energy resources. These efforts have traditionally been independently driven and pursued by individual organizations and developers without much collaberation. Given the recent increase in funding available to project owners through the American Recovery and Reinvestment Act, it has become more important that communication between relevant parties be established in order that knowledge is shared and collective goals reached. Lake County Resource Initiative (LCRI) in conjunction with Lake County Development (LCD) have therefore decided to compile a report outlining the major projects currently being pursued within Lake County. The report addresses present options for financing these projects and compiles information which can be utilized to facilitate a more renewable Lake County. The end goal is to become a renewable energy exporter as a County by 2012. Given the current stimulus funding, LCRI and LCD believe that this is an attainable goal that will not only bring Lake County new jobs and economic activity, but attract government and industry attention for future programs.
Lake County Development, Lake County Resource Initiative

Lake County will predominantly use it‟s abundant geothermal resources to achieve it‟s end goal of energy independence. However, other sources of power such as solar and wind are also currently being explored and developed. Initial studies into wind opportunities shows that Lake County has marginal opportunity in this area. However, newer turbine technology and small scale wind can still be equitable. With this in mind, this report is also written with the intention of highlighting the possibilities of the aforementioned energy resources using the examples of projects in varying stages of development. The analysis section of this report consists of an overview layout in the form of a simple “score card” that will address only the most important aspects of each project so that a reader can get an understanding of the most essential elements of each project. Further detail can be obtained from the feasibility studies associated with each project. Tax, grant, and carbon offset incentives are discussed after the project reviews to provide the reader with an understanding of these sources of funding and their relation to the different projects. The conclusion section of the report addresses important quantitative figures such as job creation, carbon offset potential, and energy outlays.

Business Confidential

8/13/2010

Northwest Renewable Energy Landscape

Lake County

Northwest Renewable Energy Landscape The above graphic shows the overall view of the renewable energy projects for the entire Northwest. As can be shown from the map, many of these projects are located in the west and central parts of Oregon. These projects total about 2,766.7 MW. Or in other words, enough electricity to power approximately 2,127,692 homes if all the projects were operational. Lake County is in a prime area for wind and geothermal development and should become a part of the overall map above. As of April 2009, there is approximately 60 million dollars available to renewable energy development through USDA. The Business Energy Tax Credit program is currently undergoing review, but so far the program is still a solid source of funding for most projects. Lake County intends to harness these funds to begin developing our unique blend of renewable energy resources. The real benefit of renewable energy projects located in rural Oregon is that the land is fairly inexpensive, there are generally less zoning regulations to deal with, and plenty of space to utilize. These factors contribute to attractive investment opportunities.
Lake County Development, Lake County Resource Initiative

Establishing the Precedent Populating the above map with more projects in Lake County will serve several important functions. 1.Attract additional outside investment from firms confident in Lake County‟s support of such projects Companies are concerned about project risk, and are generally wary of investing in untested environments. Successful projects in Lake County will help alleviate initial investment concern. 1. Get more attention from the state to recognize Lake County as a source of successful implementations which can encourage funding support  The state also likes to have confidence that a County can handle energy projects before allocating funds. If Lake County establishes a track record of successful projects, it will be easier to attain funds in the future. 1.Create impetus for additional infrastructure  A current barrier for energy development is that the infrastructure for additional renewable energy projects electrical generation is not cost effective. With additional projects, Lake County has more leverage to pressure utilities into establishing more infrastructure to accommodate the added power loads.

Business Confidential

8/13/2010

Lake County List of “Major” Energy Projects
Project Name
Power Generation Project Small hydro Saw Mill Biomass Bio-algae project Geothermal Schools Hospital Obsidian Solar Development Westside Nursery Drews Valley Ranch Prison Geothermal Paisley geothermal energy Paisley heating district GreenWing solar project Nevada Geothermal Electrical Oregon Community Wind Horizon Wind LLC

Location
Lakeview Lakeview Lakeview Lakeview Lakeview Lakeview, Christmas Valley Lakeview Lakeview Lakeview Paisley Paisley Christmas Valley Plush area South Warner Mts Coyote Hills, Pueblo Mountains

Capacity Developer
200 kW 14.4 kW 23 MW TBD TBD Iberdrola Bioalgene 5,000,000 BTU TBD 4 MW 5 Tons 20 KW TBD

Partner
Darryl Anderson Darryl Anderson Jim Walls Stan Barnes Darryl Anderson

Status
Feasibility completed Feasibility completed Construction Concept Feasibility completed Construction Concept Concept

2 MW 50 Tons 20-50 MW 30MW 10-12MW Horizon Wind Horizon Wind GreenWing ORMAT ORMAT

Feasibility completed Proposed Proposed Feasibility Feasibility Feasibility

=6
Geothermal

=4
Solar Hydro

=1

=1
Algae

=1
Biomass

Solar PV, GSHP, and Solar Hot water under 2 KW on rotating basis

Wind

=2

Total Scheduled Power Output

31.454 MW
Total Potential Power Output

290.954 MW

*Other

projects may be in feasibility/concept stages with private landowners or too early in development to get a MW figure and are therefore not listed here

Project Overview The above graphic showcases the project list as of May 2009. Bolded projects represent the major power generators, while the other projects are those that are smaller in scale. Smaller scale projects are not addressed individually as they are collectively very similar. As a result, near the end of the overview, they are addressed as a whole. Specific Barriers to Large Projects Of the larger projects, all have had their feasibility studies completed. The main barriers preventing their respective implementations are: 1. Financing  Receiving grants for the above projects has been challenging. Key grants like the REAP are extremely competitive and require money up front 1. The National Environmental Policy Act (NEPA)  NEPA mandates an Environmental Assessment of how a project will disturb the environment. Conducting such a survey is expensive, tedious, and reduces the profitability of a project. It is also required for many grant applications. The need, and complexity depends on the project size and ownership. Details should be obtained from NEPA.
Lake County Development, Lake County Resource Initiative

General strengths and weaknesses of Lake County An advantage that rural Oregon enjoys over city environments is the value of property and attractive energy generation opportunities for businesses. This low market entry cost, combined with an attractive energy generation is something Lake County should emphasize and facilitate when dealing with outside corporate partnerships. The feedback we have received indicates the following problems and strengths afforded by Lake County: Strengths to development: 1) Reduced land values 2) High Energy generating potential 3) Additional incentives 4) Reduced cost of labor Barriers to development: 1) Complicated zoning– New regulations requested 2) Complicated land use restrictions 3) Segmented ownership of land 4) EPA assessments and grant financing issues The above concerns will be addressed in greater detail throughout the report.
Business Confidential 8/13/2010

Major Project Analysis

Part 1 - Introduction
Pg 1 Pg 2 Pg 3

 Introduction  Northwest Renewable Energy  List of Major Projects

Landscape

Part 2 – Major Project Analysis
 Economic and Project Management Approach  Major Project Breakdowns Pgs 18-21  Financing
Pgs 5-6 Pgs 7-17

Part 3 – Conclusions
 Where Does Lake County Stand?  Final Results and Analysis Pgs 33-38  Contacts, Resources, and Appendix
Pgs 23-24 Pgs 25-32

Major Project Overview
Approach The following pages will give a brief overview of the different major projects being pursued in Lake County. The goal is to provide: 1. A common understanding of the renewable energy initatives 2. An easy sense of the short and long term benefits each project will offer Lake County 3. An understanding of the different companies and individuals assigned to the projects Costs and Benefits Explained Each project overview contains a 3x3 table: The value of jobs Normal project How incentives gained over life of costs and reduce overall project and cost to benefits cost community1 Raw Normal Cost to Developer Present Value of Project Net financial benefit Incentive
Normal Cost to Developer Incentives

Holistic2
Normal Cost to community Incentives Present Value + job creation value

Present Value of Project Net Financial Benefit

Net Financial Benefit + job creation value 1Community defined as County, City, or Non-profit agency operating in Lake County 2Explained in following page Lake County Development, Lake County Resource Initiative Business Confidential 8/13/2010

Project Overviews Each section of the project will list:  The project developer  The overall objective of that project  The major important financial and technical specifications  Grant/Loan opportunities  Either actual or potential  Eligible costs – the entire project costs are not eligible for grant/loan money  Jobs  Jobs are classified in terms of :  Full Time Employees (FTE)  Part Time Employees (PTE)  Indirect (Jobs supported/retained as a result of the economic activity)  The US Census Bureau classifying Lake County‟s median income was used to determine wages  Carnegie Mellon‟s Economic Input Output tables were used to generate the indirect job figures. More on this is discussed in the Appendix.  The use of Carbon offsets as a financing mechanism will be addressed later in the report‟s conclusions.

Economic Tables and “Holistic” value
Economic Input Output Tables

Invented by Wassily Leontief of Harvard University Data obtained from U.S. Department of Commerce Nobel Prize 1973 Continues to be used for macro economic planning Can be used to estimate indirect job retention

 

The Value of a dollar
  

Executive Director TDC and BALLE Distinguished economist and author $1 generates $6 in actualized economic activity within a rural community (Salary) * .1(utilization) * 6(activity) *(time)

Economic Input Output Tables EIO tables receive a certain monetary value of economic activity in dollars and compute the corresponding economic activity generated across industry sectors. As an example, 1 million dollars of economic activity in the American auto industry requires $0.528 million in auto manufacturing costs and $0.060 million in auto repair. These tables can also be used to estimate job retention as a function of economic activity. In this report, the amount of actual investment that was not subsidized by the government was used to estimate job retention rates for each project and is included in the following project overviews. Schuman’s assessment of the dollar One of Dr. Shuman‟s main emphases is on the value creation of 1 dollar in a local community. Essentially, his research has proven that 1 dollar in a rural economy actually generates up to 6 dollars in activity for that local economy. This adds emphasis to job creating activities in Lakeview. In the following project overviews, the median income for Lake County was multiplied by the amount of jobs generated by that project. Every dollar generated by a job is obviously not spent in the local economy.
Lake County Development, Lake County Resource Initiative

Therefore the total combined salaries generated by each project were multiplied by .1 to represent 10% of those salaries being spent in the community. The remainder was then multiplied by „6‟ to represent Shuman‟s effect and then multiplied again by the projects expected useful life to get a raw estimate of the total holistic value the project provides Lake County. Incentivized and Holistic Benefit explained The incentivized cost of a project is the estimated reduction in the projects raw cost as a result of the grants and incentives theoretically available to that project. The Holistic Value of a project is designed to reflect the direct costs to community entities (not private or outside developers) such as the County itself, City‟s within the County, and/or non-profits operating within the County. Additionally, using Michael Schuman‟s 6 dollar multiplier effect and the median income of a Lake County resident from the U.S. Census Bureau, an estimate of the total value of the jobs created by a particular project can be calculated. The direct present value of a project is added to the job creation value to receive the gross holistic value. This gross is then subtracted from the direct costs to a community entity (if they exist) thereby achieving the net holistic value for a project. The intention is to get a better understanding of the real value a particular project provides to Lake County.
Business Confidential 8/13/2010

Project Management and Approach
The Project Life Cycle Steps 1. Project Initiation – Most important process What roles are people going to play? Project lead(s), Contractor(s), Engineer(s), Environmental lead(s) Who is going to fund and develop the project? Private, public funds, combination (incentives) What are the needs of our community and how does this project address these needs for the greatest benefit? 2. Project Planning Feasibility studies, Environmental assessments, Engineering design documents, permitting, applications for grant funding (continuous), financing 3. Project Execution Procurement of materials, construction, monitoring of construction, continued communication and monitoring 4. Project Closure Site cleanup, finalizing contracts, final reports so that others can replicate project

1

The Project Management Institute is a world leader in Project Management guidance. The Project Management Body of Knowledge (PMBOK) is an excellent guide of best practices in this area. The author recommends this book to renewable energy 1Source: http://www.panthera-consulting.com/images/project-lifecycle-complete.jpg project leads.

The Lakeview project process
The above diagram illustrates the process that Lake County tries to emulate when addressing a Renewable Energy project. Fortunately, Lake County has much of the expertise for renewable energy projects already within the County. Darryl Anderson has over 26 years of experience as an engineer with his business, Anderson Engineering and Surveying (AES)in Lakeview, and has conducted numerous feasibility studies for some of the major Geothermal energy projects in Lakeview. Jim Walls (Executive Director LCRI) has been acting as the Renewable Energy liaison for many of the projects occurring within Lakeview for the past several years. Jim brings decades of environmental stewardship experience to Lake County and continues to serve as an intermediary contact on behalf of Lakeview for the Biomass project. Bob Rogers is another key member of the Lakeview Project Process. Bob provides assistance to local businesses, ranches and homeowners to install renewable energy.

number one reason of project failure and cost overruns is a poor project initiation phase. If roles are not clearly defined, the project objective is ambiguous, communication procedures between team members not considered, and financial viability not addressed realistically. This can lead to serious complications later in the project life cycle.

Project Planning
The next most important phase is the planning phase. In this phase, the project needs to address the local “land-use” policies and zoning associated with the plot they intend to develop. Additionally, project owners need to identify who will officially “own” the project (city, county, private, etc.). Feasibility studies conducted by a certified project engineer should be done on larger projects to ensure a safe investment. On large projects, NEPA and/or Forest Service may require an environmental assessment addressing the impact to native ecology. These studies can often take months or years to complete.

Project Execution and Closure
Once Project Initiation and Planning are done properly, project execution and closure become streamlined. Execution consists of procuring the contractors, actual construction, and monitoring. It is important to monitor project progress continuously to avoid cost overruns and unforeseen risk. In the closure phase, all the documentation for the project is filed so that the project can be replicated and lessons are learned from mistakes.

Project Initiation
The Project initiation phase is arguably the most important phase of the project process. This is when the scope of the project, type of project, objective of the project, and project roles are defined. Furthermore, a preliminary financial feasibility should be established to address whether the project is profitable given available and predicted financing. The Project Management Institute indicates that the

Lake County Development, Lake County Resource Initiative

Business Confidential

8/13/2010

Carbon Emission Analysis - Factors
Electricity Breakdown
5.2% Hydro 18.9% Purchase .8% Wind

210.41 2932

lbs of carbon dioxide in 1 million BTU KW/h in 1 million BTU/h

Biomass operates only in this sphere

75.1% Thermal/ Coal

210.4 .72
1 KW
Pacific Power

293
lbs CO2 per KW/h and 1 million BTU

94% Coal
Pacific Power

.68
lbs CO2 per KW/h Biomass not an emitter

Calculating Real Emission Rate • The real emission rate above is based on the Pacific Power‟s 94% coal KW composition • Generating 1 million BTU/h of heat results in 293 KW/h of equivalent electricity, and therefore 210.4 lbs of equivalent CO2 emissions • Fuel Oil rate would be .598 lbs CO2 per KWh or 1 million BTUs
2Source:

Calculating Biomass Rate • “CO2 from this source [biomass] is generally not counted as greenhouse gas emissions because it is considered part of the short-term CO2 cycle of the biosphere.” (EPA) • Dependent on proper forest management

• Pacific Power does use a mix of renewable energy sources, so you cannot consider a full KW • The above 18.9% is considered “coal” because Pacific Power could not answer where they receive this power from, but it is likely 95% or more of this power is from a coal source • Pacific Power was used as a model for the other utilities used in Lake County
1Source:

http://www.eia.doe.gov/cneaf/coal/quarterly/co2_article/co2.html

http://www.treepower.org/biomass/quickfacts.html

The Carbon Cycle
Carbon dioxide is a naturally occurring gas within a healthy ecosystem. CO2 is needed for plant respiration. Over time, some of this CO2 is sequestered, or stored, in matter deep within the earth or in large bodies of ice such as the polar ice caps. However, such sequestration and fluctuations in the amount of given CO2 within the global ecosystem generally occur slowly over long periods of time. This gives terrestrial life a chance to adapt to these changes. Some would argue that excavating sequestered carbon in coal and petroleum stored deep in the earth, and then burning it in large quantities can cause a massive influx of carbon into the normal carbon cycle in a relatively short time span. It is this dramatic influx that is changing the climate at a rate faster than species can naturally adapt, and therefore causing a systemic risk to the planet.

Meaning that the trees which grow and die already release a certain contribution of greenhouse gases that the Biomass plant does not disrupt., i.e. the Biomass plant is not releasing carbon that would otherwise already be released from decaying trees and natural processes. This makes the Biomass plant a very attractive power source. Not only is it classified as clean energy by the Environmental Protection Agency (EPA), but it can utilize the abundant forest resources surrounding Lake County to deliver considerable power (13-18 MW).

Baseline Fuel Source for Offset Calculation
There are different types of coal that burn with different levels of oxygen present in their chemistry. The higher the oxygen content of the coal, the more emissions it will release per KWh. The coal used for Lakeview‟s power generation is Subbituminous coal with a rating of approximately 210 lbs of CO2 per 1 million BTUs. Most coal generates 205-227 lbs of CO2 per million BTUs. When estimating carbon offsets, it is important to note that the offsets are to be measured from the source of power that would otherwise have been used. In other words, what source of power would be used in lieu of the power being generated by the project. For instance, instead of coal, the Lakeview Schools project offsets were calculated using natural gas as the baseline source (155 lbs CO2/1 million BTU).

Note on Biomass
There is currently much debate regarding the overall contribution of Biomass to carbon emissions. Many interest groups claim that Biomass is not a sustainable solution, in that forests which otherwise would have been left “untouched” by human interference, are now harvested to be used in the Biomass process. Accepting this perspective, a majority of the carbon equivalent emissions released by a Biomass plant are already in the carbon cycle.

Lake County Development, Lake County Resource Initiative

Business Confidential

8/13/2010

Completed Project – Warner Creek Geothermal System
Cost Savings  $1.24M includes costs for design, construction, and future repair & maintenance  $19,000/month by using geothermal heating vs. propane This equates to a total savings of $228,000/year  Project completed 2005; 4 year pay back Specifications Facility Future Plans and Indirect Benefits  Geothermal facility operating at only 50% full capacity o The success of this project has led to the development of the Lakeview Power Generation project  Injection water can be used for additional heating and/or agricultural business uses  Geothermal facility insulates correctional facility from future costs o Secures 104 jobs in Lake County for at least 30-50 years Lakeview

• 150GPM of 198°F • 5M - 6M Btu/hr • 208°F extracted at 600ft, 110°F injected at 450ft

• 104 employees • Constructed 2002 • 400 inmates • 117,000 sq. ft.

Geothermal Resource and the facility Warner Creek correctional facility is the result of Doug Young‟s, New Prison Construction Administrator for the Department of Corrections, visionary work. Though a Geothermal system would add 1.2 million dollars to the Prison‟s cost, Mr. Young pushed for both to be constructed at the same time because he recognized that the Geothermal resource was abundant in this area and that it could drastically offset the cost to run the facility. In October of 2002 an exploratory well was put near the town of Lakeview which confirmed that there was enough of a resource to warrant construction. Initial calculations of simple payback were around 7-9 years for the system. Given the expected guaranteed life of the system (26 years), this payback was determined to be acceptable. Actual payback on the system was 4 years and was just realized in 2009. Specifications The system itself is comprised of two titanium plated and one stainless steel heat exchanger, with treated water pumped throughout the facility. Given the quality components and treated water, modest upkeep and maintenance to the facility could likely make it last at least 50 years. Total costs for the facility were $1.2 million dollars including a $200,000 maintenance fund over the life of the system.
Lake County Development, Lake County Resource Initiative

Approximately 50% of the capacity of the system is currently being utilized. This portion of the system can deliver enough hot water to keep up with 400 inmate‟s showering, laundry needs, kitchen demands for hot water and also heat 117,000 square foot facility to comfortable levels when the outside temperature is below zero. The average Warner Creek Correction Facility (WCCF) cost per square foot is 2.7-cents per month/sq ft. So, the equivalent cost for a 2000 square foot home would be $54 per month for all heating and hot water for a family of 6. This is considerably lower than propane especially given the rising costs of oil. Benefits The Geothermal system benefits to the WCCF are both immediate and long term regarding savings to the state and to the community of Lake County. The correctional facility provides crucial jobs to Lake County that have been made more secure by a prison that is operating well under normal operating expenses; making it less likely for closure. Additionally, future projects and business opportunities have been generated for Lake County at a time when economic activity is facing a downward trend. The Geothermal facility is a great example of the kinds of benefits Lake County is seeking with it‟s other projects.
Business Confidential 8/13/2010

Geothermal Schools and Hospital Project
Darryl Anderson – darryla@andersonengineering.com – 541-947-4407

Objective

Raw 2,500,000 2,400,000 100,000

Incentive 2,150,000 2,400,000 250,000

Holistic 2,150,000
3,686,644

Specifications

To provide 5 million BTUs/h ground water heating to Lake Health District and Lake County School District #7

1,586,644

183/130 235/1355 30 years

Heat F Depth ft Useful life

Concept

Feasibility
TBD

Implementation
12 months
Lakeview

Closing
TBD

Other Benefits Jobs 2 FTE - 74,258 dollar1 39.82 Indirect retained Indirect  Air quality preserved  Encourage investment from outside

Financing Options Public Government 2,002,000 Eligible Cap.  BETC – 350,000  REAP Loan Variable  ITC – 200,200  REAP GR – 500,000

Going forward Secure funding – private, Lakeview, separate district Secure contractors Environmental studies need to be concluded by July

1Source:

US Census Bureau 2007

2Source:

Carnegie Mellon EIO-LCA tables

*Theoretical

Project Feasable As per the Anderson engineering‟s feasibility study conducted in August of 2007, this project is deemed feasable to the town of Lakeview. The main points of feasibility are the fact that this project will directly contribute to the town‟s energy cost saving measures when gas prices return to above $3.13 dollars per gallon. Additionally, the project will provide necessary infrastructure for future use of the geothermal heating should other areas of the town become interested in implementing Geothermal heat. Some of the immediate advantages include:  Possible stimulus dollars available  Local engineering Status The project is currently seeking the remaining funds to proceed into construction. Darryl Anderson‟s feasibility study will be used as a basis for a call of proposals to solicit project developers and begin breaking ground on the construction of the project. Construction should take approximately 12 months and barring any unforseen problems is scheduled to be completed by the Fall of next year (2010). Approximately 2,100,000 dollars need to be accounted for in order to push the project into construction. This money can come from grants, private capital, or town funds.
Lake County Development, Lake County Resource Initiative

Risks The main risks of the project that are outlined in Anderson engineering‟s feasibility study Include: BETC costs The Business Energy Tax Credit (BETC) program provided by the state of Oregon is at risk of being cut. The feasibility study for this project factored this BETC credit into the financial viablity of the project. If this program is cut, a major source of revenue will be removed for the project. EPA Assessment study Because the Geothermal schools project breaks and disturbs the ground, an environmental audit will have to be conducted in accordance with EPA regulations. The project is currently undergoing environmental studies that should be concluded at the end of July with a finished report by September.

Business Confidential

8/13/2010

Lakeview Small Hydro Project
Darryl Anderson – darrylanderson@andersonengineering.com – 530-555-7689

Objective

Raw 57,000 92,602 35,602

Incentive 40,550 92,602 52,052

Holistic 40,550
203,986

Specifications

To provide the town of Lakeview with a 14.4 kW hydro electric generator

163,436

1-2 k ft. 123844 20

Height

kWh Useful life

Concept

Feasibility
TBD

Implementation
4 months

Closing
TBD

Benefits

Financing Options

Jobs Public Government 1 PTE - $18,5641 Small Hydro Indirect Retention 47,000 Eligible Cap. 2 .734 (1) BETC – 16,450  Enough to power Town REAP L – 23,500* Hall or 7,431 in  Voter approved bonds revenue  Low interest Loans  Cheap and easy to implement Going forward Secure grant funding Agree on alternative implementations Select Contractor and begin construction

1Source:

US Census Bureau 2007

2Source:

Carnegie Mellon EIO-LCA tables

*Theoretical

Project Feasible
As per the Anderson engineering feasibility study conducted in 2006, this project is deemed feasable to the town of Lakeview. The project is especially attractive considering it‟s relativly easy implementation (4 months), low capital investment ($57,000), and expected life (15 years). Additionally, much of the infrastructure for the project is already in place and the water rights are controlled by the Town of Lakeview. In short the benfits include: Limited environmental and public impact Inexpensive and quick project Infrastructure intact Water rights controlled by town

Risks There are several risks to the project which are addressed by Darryl Anderson‟s feasibility study. Small project with tight margin Water use conflict between town and facility Water use conflict and contingency plan The small hydro facility should not inhibit the town‟s water supply, but contingency plans should be addressed if the water flow is slowed or halted so that if this problem occurs there is guidance on how to proceed. Small Project with tight margins Despite the minimal financial investment needed for this project($57,000), there is a narrow margin for the project before it becomes a liability ($97,000 npv). If there are problems in construction or delays, the town may realize a negative return on investment. Varied flow rates Darryl Anderson‟s report listed a wide range of expected water flow for the facility (100-800). The flow of this facility should ideally remain constant in order for the electricty to be utilized by the town or sold to a utility at a more constant rate.
Business Confidential 8/13/2010

Specifications
The small hyrdo project will utilize the water located to the east of the town in the Warner Mountains. This hydro power plant will generate electricty at 1,000 and 2,000 feet respectivly. The project is expected to generate around $47,000 annually for the town in electricty sales, or enough electricty to power 10 homes.

Status
The project is currently seeking the remaining funds to begin contruction. Darryl Anderson has mentioned that should the project be funded, his firm can provide oversight.

Lake County Development, Lake County Resource Initiative

Paisley Geothermal Project
Dan Hand – danielhand@comcast.net, Sustainable Engineering: Developer Objective
Raw 9,500,000 3,436,078 61819* Incentive 4,655,000 3,436,078 1,109,977* Holistic 4,655,000
4,271,476

Specifications

To provide the City of Paisley with a 2 MW Geothermal electrical system

1,945,375

239 700 1200

Heat F Depth ft GPM

Concept

Feasibility
TBD

Implementation
12 months

Closing
TBD

Benefits Jobs 2 FTE - 74,258 dollar1 1 PTE - 18,564 dollar1 172 Indirect Jobs2 Indirect  $50,000 Annual return after one year  Room for Expansion

Financing Options Private Business BETC – 4,750,000 PTC – 2.1 c/kWh ITC – 95,000

Going forward Find investors to fulfill LLC function Develop strict guidelines on the interrelation of the various LLCs Address BETC financing and look for alternatives
1Source:

US Census Bureau 2007

2Source:

Carnegie Mellon EIO-LCA tables

*Theoretical

Project Feasible The feasibility study for the Paisley project was conducted by Dan Hand of Sustainable Engineering. Dan has concluded that the project is feasible and will provide both investors and the town of Paisley a mutally beneficial Geothermal project. Ideal return on investment for small scale interests ($50-$55 thousand) Room for expansion Experienced Geothermal development company driving project Specifications Surprise Valley Electric will be building the Geothermal facility in several stages. The first stage will drill the main well and the injection well for approximately $1,400,000. The second part of implementation will see the Geothermal facility powering at least 3 MW and eventually scaling up to 10 MW. The water is extremely warm (239 degrees F) and fast flowing even for Lake County (1200 GPM). Future projects could even see expansions of the well for more power.

Status The project is currently seeking funds to begin drilling the main and injection wells. Funds have been secured for the construction of the project, but since the intiial drilling of the well is risk intensive, it has been difficult to secure private investment for this acitivty. Risk: BETC dependency As with most of the renewable energy projects in Lake County, the Paisley Geothermal is very dependent on BETC financing for a reasonable payback. Alternative financing must be secured, especially considering that the dividens to the individual LLCs rely on the BETC financing for the first 5 years of income returns.

Lake County Development, Lake County Resource Initiative

Business Confidential

8/13/2010

Lakeview Power Generation Project
Darryl Anderson – darrylanderson@andersonengineering.com Objective
Raw 901,000 508,643 392,357 Incentive 620,650 508,643 112,007 Holistic 620,650 731,411 110,761 Specifications

To Provide the town of Lakeview with 200 kW of electricity from the North Geo. well

206 1200 300

Heat F Depth ft GPM

Concept

Feasibility
TBD

Implementation
10 months

Closing
~Mar 11

Economic Benefits Jobs 1 PTE 18,564 dollar1 11.2 Indirect retained2 Indirect  Prove technology  City owned  Expansion options

Financial Options Public Government Geothermal Power BETC – 280,350 REAP Loan – 400,500

 Other funding options are not available unless the project passes to a tax entity Going forward

900,000 in funding still needed Permitting still needs to be addressed Contingency cash reserves should be included Environmental Impact Analysis needs to be conducted
1Source:

US Census Bureau 2007

2Source:

Carnegie Mellon EIO-LCA tables

*Theoretical

Project Feasibility The feasibility for this project was conducted by Darryl Anderson in February of 2008. His conclusions were that the project is feasible utilizing Lakeview‟s Northern Production well and will provide the town of Lakeview with several benefits. Benefits include a positive revenue stream from the sale of electricty at .055-.069 cents/KWh and several short term construction jobs with at least 1 part time employee needed for maintenance jobs. Additionally, the injection well water is perfectly suited for other business development. Test wells have been drilled Infrastructure in place Can use Biomass plant water to help cool boilers Backup water can be supplied by Greenhouse well Specifications The project is expected to generate around 200kW of electricty for the town of Lakeview. Or approximiately enough eletricty to power 154 homes. The well being used by the project is at around 770 ft. and will generate approximately 2-4 million BTUs of 206 degree Fahrenheit water. The project should take about 12 months to complete, barring unforseen delays or complications.

Status The project is currently lacking $900,000 in funds. Addtionally, no contracter to develop the Geothermal energy source has been selected as of August 3rd 2009. The project is expected in the original timeline to break ground at the begenning of March, but this deadline could not be met because of funding considerations. Additionally, environmental and electrical (with pacific power) need to be cleared. Currently Pacific Power is asking $15,000 for an interconnection study. Alternative Option Darryl Anderson has also provided a seperate ”Well Water Cooled” option that is significantly cheaper than the ”Open Cooling Tower” option highlighted above. However, the cheaper option will also reduce the net present value of the project by reducing it‟s electrical generating capacity. Currently, the Open Cooling Tower is considered the preferred option for the town‟s interests.

Lake County Development, Lake County Resource Initiative

Business Confidential

8/13/2010

Lakeview Biomass Project
Iberdrola Renewables Objective
Raw
90,000,000 IP IP

Incentive
77,000,000 50,000,000 IP

Holistic3 0 (Private) 17,821,620 17,821,620

Specifications

To provide a 23 MW biomass plant utilizing waste from local sawmill

23 MW Wood 30 years

Size Type Useful Life

Concept

Feasibility

Implementation
TBD 18 months

Closing
TBD

Project feasible Jobs (340 indirect)1 15 FTE $556,9352  Working in Plant 50-75 PTE $928,2002  Collecting fuel stuffs Indirect
 Large business precedent  Retention of Mill  Increased forest health

Financial Options Public Business BETC – 13 million ITC – .8-1 million*
 The above loans can be pursued by Iberdrola for financing – just estimates

Going forward Insure that construction continues as scheduled Address what should be done with power Establish contacts with alternative developers should Marubeni fall through
1Source:

Carnegie Mellon EIO-LCA

2Source:

US Census Bureau 2007

*Theoretical

3This

is the actual benefit to the county

Project Feasibility The Biomass project is feasible and is currently poised to transition into the construction phase. Several major benefits will result from it‟s construction including approximately 15 new jobs, and 50-75 part time jobs collecting wood from nearby forest. Additionally, the Biomass facility is expected to provide the local saw mill with badly needed supplemental revenues. The additional power is expected to be sold back to a utility for added profits, but could be used to help power some of Lakeview as well. Utilizes saw mill Job creation can greatly add to economic vitality Massive power generation Added visibility of Lakeview in renewable energy Specifications The facility will be several acres in size and is expected to generate 13 MW of renewable energy power for the town. Marubeni Sustainable Energy, INC. is the current developer and the life of the biomass plant is expected to be about 20-30 years. The project will cost approximiately 40 million dollars in total but this can be reduced through numerous incentives outlined above. Construction should take 18 months when started.

Status The town of Lakeview is currently awaiting construction by Marubeni Sustainable Energy. Construction was originally scheduled to begin sometime in March 2009, but the economic crisis contributed to Marubeni seeking an additional ”main investor” . This in turn has caused a delay in construction. Should Marubeni decide not to go through with the project, other investors will be solicited. Discussions are already taking place to seek out optional developers. Construction should finish by September or October of 2010 if the project can be initiatied in the summer of 2009. Considerable Economic Benefit One of the main attractions of this project is that it is being privately financed by outside investors. This is both good and bad in a sense that the town of Lakeview won‟t own the facility and the power it generates, but it will receive the indirect benefits of the jobs it creates, the expected income taxes deriving from these jobs, and the economic activity caused by the jobs, without having to incur the liability associated with construction. The financial cost to the town is therefore labeled as “0” above since none of the town‟s money is being used for the project.

Lake County Development, Lake County Resource Initiative

Business Confidential

8/13/2010

Algae Project – On hold
Objective
Raw 2,000,000 Unknown 2,000,000 Incentive 1,300,000 Unknown 1,300,000 Holistic 0(Private) 55,692 55,692 Specifications

To test the feasibility of algae methane production within Lake County

30,000 1,000 100

Size (gal) Algae (gal) Fuel (gal)

Concept

Feasibility
TBD

Implementation
12 months

Closing
TBD

Design phase Jobs 1 PTE - $18,564 Indirect  Limited local investment  Potentially very lucrative development down the road

Financial Options Private Business Financing options are very limited  Emerging technology  ODOE states nonexperimental funds  Not included in ODOE “energy” profile

Site to be selected

Going forward Establish direction Bioalgene wants to go with project Research suitable site for algae methane production Project is probably not going to go through due to environmental, financial, technological concerns
1Source:

Carnegie Mellon EIO-LCA

2Source:

US Census Bureau 2007

*Theoretical

3This

is the actual benefit to the county

Project Feasibility
The Bioalgene project has not been tested for feasibility and is currently not being considered for development. However, algae based fuel sources are expected to become viable in the next 10 years so this project will be included in this report for informational purposes. At the time of cancellation, Bioalgene was still in the process of discovering a suitable site with which to test their emerging techonology and develop an understanding of how viable their product is in Lake County for mass production. The major benefit to Lake County for using this resource is that it can synergize with Geothermal energy projects. The warm injection water from Geothermal wells provides ideal growing conditions for the algae methane system being proposed by bioalgene.

opportunity is to use the CO2 from the Biomass or sawmill to fuel algae growth. As of the writing of this report, the project is on indefinite hold.

Risk: Foreign ecology
A major risk with using the algae in Lake County is that the potential effects of bacteria in the environment. The bacteria could negativly affect the local ecosystems and cause severe damage. If this were to occur, the costs (in both financial and ecological terms) could be extremely steep. Additionally, it is unkown how regulations (fish and wildlife) will affect the widespread use of the product. However, the base bacteria to be used by Bioalgene are native to the area and in a controlled environment, this risk could be mititgated.

Specifications
The ideal test pond would be approximately 30,000 gallons in size with 1,000 gallons of algae and 100 gallons of fuel to be used as a starter. The appropriate pond will also require a consistent temperature of around 70 degrees with adequate access to sunlight. The pond can use any source of biofuel, but the idea is to source this fuel from wood based products. The amount of methane generated from this size of this pond is intellectual property of Bioalgene.

Risk: Emerging technology
The bioalgene process is an emerging techonology and it is unclear how it will react to the Lake County environment. As a result, any investment by Lake County into the project is at an inherently high risk. Furtheremore, investment into future projects may be limited due to investors wary of risk into this new technology. Limited grants and funds are available as well given the technologies experimental nature.

Status
Bioalgene is looking for development all over the northwest and pacific northwest. They wanted to run a pilot in Lake County to test the viability of their product. A promising
Lake County Development, Lake County Resource Initiative Business Confidential 8/13/2010

Obsidian Finance LLC, Solar Development
Objective
Raw 50,000,000 IP IP Incentive IP IP IP Holistic 0 1,336,644 1,336,644 Specifications

To initially develop a 2 MW solar park in Christmas Valley and 2 MW near Lakeview

26 Acres Solar PV 20 years

Total Size Type Useful life

Concept

Feasibility
TBD

Implementation
4 months
Lakeview

Closing
TBD
Christmas Valley

Benefits

Financial Options

Jobs Private Business 2 FTEs – $74,2582 REAP Grant 2 PTEs – $37,1292 REAP Loan 87.2 Indirect retained BETC Indirect Funding Status  Project can attract BETC is being changed future development REAP has been applied  Expansion Feasible for  Set precedence Going forward

Establishing interconnection rates with local utilities Securing BETC and ITC tax incentives Settling on final size, locations selected Scaling project up to 8 MW potential
1Source:

US Census Bureau 2007

2Source:

Carnegie Mellon EIO-LCA

*Theoretical

3This

is the actual benefit to the county

Project Feasibility The Obsidian Solar Development project is the result of the collaberation between Obsidian and Lake County to implement utility scale solar. Initial dialogue was started in January of 2009, with the investors seeing potential in Lake County‟s open available land, and the lucractive incentives offered by the state for rural development. Given Lakeview‟s sunshine potential, available land, and the potential solar exposure available, two 2-10 MW facilities are currently being pursued. Two Locations and Cost structure The Obsidian Solar Development project is split between two different locations as both were analyzed to be ideal conditions for development. The main site is located in Christmas Valley and could potentially be expanded to an 8 MW project. The second is located near Lakeview by the local municipal airport. The ideal budget for both projects combined is 50 million dollars. More funds would have to be secured for additional MW. Status As of July 2009, 2 MW of solar capacity are scheduled for construction near the town of Lakeview and another 2 MW will be implemented near Christmas Valley.
Lake County Development, Lake County Resource Initiative

Depending on additional funding and success of the first phase of implementation, another 6 MW of capacity could be implemented in Christmas Valley or Lakeview respectivly. Current remaining issues are formalzing land use permits, securing materials and contractors for construction, and securing interconnection pricing rates from local utilities. Obsidian is proceeding on schedule and should begin construction in the summer of 2009. Issues with Large Scale Solar Development There are several barriers currently in place preventing large scale solar development in Lake County. The following feedback was obtained from the Portland developer: 1. Lack of updated zoning  Currently, Lake County uses a zoning method which does not allow a zone to be considered fallow and barren land. All zones in Lake County are considered to have some use, and this introduces obstacles for widespread development which require the developer to adhere to regulations they otherwise would not have to deal with. 2. Lake County classifies solar panels as mirrors  As a result, no solar panels can be built or constructed near the conveniantly located airport location. This forces solar developers to seek land farther away from interconnection facilities and maintenance; therefore increasing risk and cost.
Business Confidential 8/13/2010

GreenWing Solar Development
Objective
Raw
120,000,000

Incentive IP IP IP

Holistic 0
$189,018+* $1,336,644

Specifications
~70 Acres+

To develop a 20-50 mw solar park near Christmas Valley

Total Size Type Useful life

IP IP

Solar PV 20 years

Concept

Feasibility
TBD

Implementation
6 months
Christmas Valley

Closing
TBD

Benefits Direct
Tax benefits approximately $189,018 to general fund after 3 years of exemption

Financial Options Private Business BETC Funding Status BETC is being changed Funding mostly from GreenWing and subsidiaries

Indirect
 Industrial scale solar attention  Transmission line expansions

Going forward

Establishing interconnection rates with local utilities Securing BETC and ITC tax incentives Getting support of local government
1Source:

US Census Bureau 2007

2Source:

Carnegie Mellon EIO-LCA

*Direct tax benefit, not estimated economic activity

Project Feasibility The GreenWing project is feasible given that the BETC tax credit remains a part of Oregon‟s energy stimulus plan. Given the current state of the BETC tax credit being uncertain, Greenwing is waiting for a confirmation on the state of the BETC before deciding to commit to the project. Benefits of Project to Lake County The benefits of this project to Lake County‟s tax base are significant. Based on research conducted by South Central Oregon Economic Development District (SCOEDD the Greenwing energy project is expected to generate around $189,018 annually after a 3 year tax abatement period

Current Barriers and Limitations Like Obsidian Finance‟s project, the GreenWing solar project will need to navigate a potential hostile minority of residents in the North Lake area. Additionally, current transmission lines cannot handle the 20-30 MW of additional power that GreenWing plans to build. This will need to be addressed if GreenWing plans to move forward with construction.

and an assessment from the Oregon Department of Revenue. The reason the Department of Revenue must assess the solar project is that solar depreciates at an accelerated rate and the value of the existing equipment needs to be re-assessed after a 3 year tax abatement. Over the course of the remaining 17-30 additional years, the solar project will continue to depreciate, but revenues will still be at significant levels to help support essential services.

Nevada Geothermal Electrical
Objective
Raw
~140,000,000

Incentive IP IP IP

Holistic 0
9,356,508 9,356,508

Specifications

To develop a 35 mw geothermal power plant near Plush Oregon

172-302
2000 Testing

Heat F Depth ft GPM

IP IP

Concept

Feasibility
TBD

Implementation
16+ months
Blue Mountain Example

Closing
TBD
Adel, Oregon

Benefits Direct
~10-14 FTE $~519,8061  Working in Plant Additional tax revenues to be determined given department of revenue evaluation

Financial Options Private Business BETC DOE funded Funding Status
Funds for this project were financed by DOE in addition to potential Enterprise Development Zone and BETC credits (depending on status)

Indirect
 Additional transmission capacity into California

Going forward
Complete well testing and assess temperature, depth, and overall cost of project Arrange purchase power agreement with California utility Complete environmental assessments and interconnection assessment
1Source:

US Census Bureau 2007

2Source:

Carnegie Mellon EIO-LCA

*Direct tax benefit, not estimated economic activity

Project Feasibility Nevada Geothermal is still in the early testing phases of this project to determine feasability. Initial tests look promising and the company will continue monitoring results. Results of testing to date •Hot springs up to 78ºC (172ºF). •Two shallow wells up to 120ºC (248ºF). •Geothermometry indicates parent source up to 150ºC (302ºF). The initial results of the testing indicate a high geothermal resource which can support the amount of power that Nevada Geothermal is looking to develop. Further testing to be done •Gas piston source shallow seismic reflection survey. •ATV towed ground magnetic survey (USGS). •Precision gravity survey (USGS). •Integration with existing datasets. •Interpretation / Modeling –Targeting TG holes.

Once the testing has been done, Nevada Geothermal will drill 8 shallow thermal gradient holes approximately 300 feet depth. This work was scheduled to start in May 2010 and current status us unknown. After completion of shallow drill holes, NGP will target and drill 2 intermediate-depth slim-holes ~2000 feet in depth. Start date for this work is Summer/Fall 2010. After test wells are drilled, flow and injection testing must be done which will: •Measure flow differential •Measure distribution of natural electrical potential across a network of 200 electrodes surrounding the wells. This data will be integrated with the previous tests and a better picture on what the Crump Geyser is capable of will be known. At this point, NGP will need to coordinate with the Department of Energy in order to arrange for financing, drill 3 production test wells, and develop final plans for the construction of the power plant facility.

Oregon Community Wind
Objective
Raw
19,000,0001

Incentive IP IP IP

Holistic 0
TBD TBD

Specifications
6-8 Turbines

To develop a 10-12 mw Wind Array in the South Warner Mountain area

Total Size Type Useful life

IP IP

Wind 20 years

Concept

Feasibility
TBD

Implementation
3 months

Closing
TBD
Adel, Oregon

Benefits Direct
 Temporary construction jobs  Tax returns after 3 year abatement period

Financial Options Private Business BETC (under 10MW)
4,750,000 – equals to about 25% of total construction costs or 50% of eligible costs Wind Tower Approximate Size

Indirect
 First wind project in Lake County  Military training route granted; helps future projects

Production Tax Credit $.018/kWh – depends on actual power generation

Going forward

Test South Warner Mountains for feasibility Determine Production Tax Credit totals Determine Sage Grouse environmental impact
1Given

similar construction projects in NW; actual figure may vary

Project Feasibility Oregon Community Wind is still in the concept and testing phases of this project. OCW is proposing to develop a small 10 to 12 megawatt facility on land managed by the BLM‟s Lakeview District in the South Warner Mountains. This facility would be constructed outside of sage-grouse lek areas and tie into the existing power line running between Lakeview and Adel. The project area lies within a low-level military training route. In 2009, the Department of Defense granted a waiver that allows the project to proceed in accordance with specific mitigation measures. The Lakeview resource Area is processing Oregon Community Wind‟s testing right of way (ROW). Getting the most value out of the BETC The new BETC regulations regarding wind projects specify that if the project is greater than 10 MW, the project may only get 5% of elligible costs covered by the state. This will probably encourage OCW to target a 9-9.5 MW project in order to receive the full 50% of elligible project costs for the project.

Current Status of Project The project is currently still in the testing phase and needs to gather wind loads in order to determine the resource located near Adel. After a wind anemometer reading, Oregon Community Wind will be able to proceed with an official feasibility study that will outline the next steps for the project and determine how to mitigate environmental (including sage grouse). Oregon Community Wind was recently awarded $40,000 by Community Renewable Energy Feasibility Fund

(CREFF) in order to help facilitate their feasibility study. Indirect Benefits of Oregon Community Wind An indirect benefit Oregon Community Wind brings to Lake County is the relatively low potential for environmental impact of their project. OCW will not be building more than 10 towers in order to generate the energy they need. Not only will this provide a great case study for sage grouse habitat issues, but it will allow Lake County officials better understand the communities tolerance for future renewable energy development in the area without committing to a major project.

Horizon Wind LLC project
Objective
Raw
200,000,000

Incentive IP IP IP

Holistic TBD
TBD TBD TBD

Specifications Total Size Type Useful life

To test for enough wind capacity to install 100-250 MW of wind renewable power in Lake County

IP IP

Wind 30 years

Concept

Feasibility
TBD

Implementation
6 months

Closing
TBD

Benefits Direct
 Large tax revenues expected after 3 year abatement period  Temporary construction will be significant for number of towers planned

Financial Options Private Business BETC (under 10MW)
10,000,000 – equals to about 5% of total construction costs

Indirect
 Large scale industrial wind attention

Production Tax Credit $.018/kWh – depends on actual power generation

Project largely contingent on sage grouse impact

Coyote Hills

Going forward
Confirm impact on sage grouse habitat Confirm wind capacity Work with utilities to create new transmission lines Agree on power contract for estimated wind power
1Source:

Pueblo Mountain

US Census Bureau 2007

2Source:

Carnegie Mellon EIO-LCA

*Direct tax benefit, not estimated economic activity

Project Feasibility The Horizon Wind Projects are in very early stages. Horizon Wind is still in the process of taking anemometer readings in order to understand the resource in the sites they have selected. Current Status of Projects Pueblo Mountain is currently under application for a potential 80 turbine wind farm and Horizon Wind LLC is currently testing 17,982 acres. The Burns BLM district is currently working on Memorandum of Understandings (MOU) for the NEPA process and Horizon Wind LLC will be working on an MOU with the Oregon Dept. of Energy‟s Energy Facility Siting Council (EFSC) to coordinate State and Federal agency roles. An EIS is expected to be completed for the project. • Horizon would like to develop 150-250 MW of wind power at this site • Sage Grouse concerns are a major hinderance to this project

Horizon Wind currently has a three year Right of Way (ROW) for wind testing on 22,000 acres near Coyote Hills. The Lakeview Resource Area is currently processing a new ROW for configuration. • If this project looks feasible for wind development, Horizon Wind would like to develop 100-150 MW of wind power in this area • Both Coyote Hills and Pueblo Mountain would not be considered for construction until 2014 at the earliest Cost Estimates For Project The overall cost for wind power in the Oregon region is around 2-3 million dollars per MW. Depending on the resource available to Horizon Wind, this could potentially be an enormous tax revenue source for Lake County. Barriers to Project Currently, the biggest concern for Horizon Wind is the presence of sage grouse leks. It is unkown what impact large scale wind would have on sage grouse habitat, but this unknown is troubling to Horizon Wind and is a concern going forward. Until more information on this potential environmental risk is known, doubts about the projects feasability will continue.

Small Solar Installation
Financing Small Business REAP Grant – 25% REAP Loan – 75%/50% BETC – 50%  REAP claims under $50,000 “sweet spot”  Money awarded after project completion  $20,000 (REAP G) and below is used in State Controlled funds Home RETC – 30%  REAP not available unless rancher  RETC awarded after project completion  Home application is tied in with annual tax filings

Overview  .09 ¢/kWh is Pacific Power‟s rate  730 hours in a month  1.3 kW average Lakeview home usage $6,162 materials  Conservative value for solar panels is 10 Watts/sq. ft  That‟s 12% efficiency  For every KW of electricity, 100 sq ft. of panels ~$8,000 with labor

Lakeview and home/small business projects
As of April 2009, there are approximately 8 homeowners and businesses seriously pursuing solar photovoltaic projects in Lake County. Rather than addressing these projects invidually, they are addressed generally here.

Assessing Costs
In Lakeview, the average house consumes electricity at the rate of 1.3 KWh. Since there are about 730 hours in each month and the average price of a kW-hour (KWh) of electricity is about $.09, an average monthly electric bill should be around $85 for 730 KWh of electricity. Obviously, this can vary considerably if non standard items like a hot-tub or other electrical appliances running continuously. A conservative value to use for a solar panel‟s generating capacity is 10 watts/sq. ft. This represents a 12% panel conversion efficiency. That means that for every kW generated, 100 sq. ft. of solar panels are required. If the sun would shine 24 hours a day, you could put up 100 sq. ft. of panels and there would be enough to power an average home. Also note that there will be an increased cost for systems that are off-grid as opposed to on-grid. Off-grid systems will have to purchase batteries to store excess electricity whereas on-grid systems just feed excess back into the grid and generally receive some kind of credit from the utility. Use the facts stated here to get a general understanding of the costs associated with your system. For more information I recommend solar4power.com.

Before installation
There are several important factors home owners in Lake County need to consider when installing solar panels. 1. Tax credits and grants are generally allocated after installation of your project. This means they will have to afford the up front costs of the project, which can be prohibitive to some home owners. 2. Home owners should ensure that solar contractors are certified by the Energy Trust or some other agency in order to recieve professional and warranted service. Solar panel prices are currently in a state of high flux. Meaning that the economic crisis, overabundance in supply, yet expected high future demand, and volatile price of substitues (oil), will likely make pricing for solar panels vary considerably over the next few years. Currently, there is a surplus of solar PV panels and some distributors are often offering discounted prices. Note that Solar hot water projects will likley cost 30% less than Solar PV projects due to the increased effeciency of the panels.

Lake County Development, Lake County Resource Initiative

Business Confidential

8/13/2010

Home Ground Source Heat Pumps (GSHP)
Financing The Residential Energy Tax Credit (RETC) offered through the Oregon Department of Energy (ODOE) · 30% of project costs are eligible for credit · Must be a closed loop system · 3.3 COP performance rating (contact installer) · 3.5 COP performance rating for Direct Exchange Key Points • Can be implemented anywhere in United States (does not need a Geothermal source) • Lasts 25-50 years • Easy to Install • Can heat and cool • 3 major types of system design (right) Open Loop System • Can be used if a local well water system is nearby • Uses well water as the circulating fluid • Discharges well water back into ground • Must meet water discharge regulations Closed Loop Pond System • Very cost effective, but requires a pond • Excellent conductivity • Coils must be at least 8 feet under the surface to prevent freezing • Water source must be checked for minimum depth, quality, size Closed Loop Horizontal System • • • • • Most common system Most cost effective 4-6 feet deep trenches One pipe at 4 feet, another at 6 Looping pipes allows more pipe in same area

The Appeal of Ground Source Heat Pumps
GSHP systems are very attractive to home owners in Lake County. Many homes currently use heating oil to keep their houses warm. Many homes in Lake County have already implemented their own GSHP systems and at least 3 have been installed this year alone. There are several suppliers and contractors in Lake County listed in the appendix of this report which facilitate GSHP procurement and installation. In the coming years, GSHP business is expected to grow.

Typical Costs of a System

Likely System Tons BTU per Hour Less than < 3 Tons 40,000 40,000 < 4 Tons 49,999 50,000 < 5 Tons 64,999 65,000 and < 6 Tons
Pump $6,633

Electricity Pump Savings Cost

Tax Credit

The Flexibility of Heat Pumps
One of the great things about a GSHP system is that it relies on the natural heat exchange of the ground. Therefore they can be installed virtually anywhere. However, they perform best in ground systems with higher moisture contents as this helps retain heat during cold times, and disipate heat during hot times. Heat Pumps can be used to heat or cool a house, but be cautioned that if dual functionality is sought, the price of the pump will rise do to additional equipment requirements.

1,000 kWh $6,465 $600 1,165 kWh $6,633 $700 1,335 kWh $6,885 $800

Returns
Most GSHP systems replacing conventional fuel oil systems will pay themselves back in 1.5-2 years after they are installed. This of course depends on the monthly heating bill of a residence. Furthermore, once a system is in place, the owner is insulated from future escalating fuel oil prices.

1,500 kWh $7,826 $900 over Typical Home breakdown
Piping ~$4,000 Tax Credit $700 Net Cost $9,733

Most systems will require about $4,000-5,000 in piping and coolant as noted in the above breakdown
Lake County Development, Lake County Resource Initiative Business Confidential 8/13/2010

OIT Collaboration project
OIT Basic Information  Oregon Institute of Technology out of Klamath Falls Oregon  Only completely geothermal heated campus in US  First campus to introduce a BS in “Renewable Energy” Partnership Projects in Klamath synergize with Lake County • Projects at OIT give lessons learned to Lake County • Engineers and experience at OIT transfer to Lake County projects • Future green jobs in Lake County can be supplied by OIT graduates

Tom Chester, Director of the Oregon Renewable Energy Center is OIT‟s main contact between Lake County and OIT OIT‟s Federal Stimulus Proposal Oregon Solar Thermal Collector Test Center (OSTCTC) The second U.S. testing and certification facility for solar thermal collectors. Tests and rates the energy efficiency of solar thermal panels for industrial manufacturers of such products on a fee basis. Sets the standards for market reliability of such collectors. Oregon Geothermal Technology Accelerator (OGTA) furnishes both a central GSHP installation certification center to train contractors and installers and a mobile training center to teach GSHP technology and tools in rural communities throughout Oregon. Renewable Energy Systems Laboratory (RESL) assists students from mechanical, electrical, and civil engineering programs and from physics, chemistry, and electro-chemistry develop practical projects in renewable energy.

Project

Total Costs
$625,000

The Oregon Solar Thermal Collector Test (OSTCTC) The Oregon Geothermal Technology Accelerator (OGTA) The OIT Renewable Energy Systems Laboratory (RESL) Total Funds Requested

$972,380

$350,000 $1,947,380

Partnership OIT and Lake County have shared a very productive partnership. Over the last several years, Director Tom Chester of OIT‟s Renewable Energy Center has been a member of the Lake County Renewable Energy Working Group. This group oversees the projects in Lake County and his continued guidance and leadership has provided crucial guidance on many of the initiatives being pursued by Lake County. Additionally, Lake County has enjoyed the experience and expertise provided by OIT‟s distinguished professors. In the coming years, Lake County and OIT would like to continue this partnership as we benefit from the knowledge share and investment into OIT projects directly and indirectly. Project Value Overview OSTCTC The OSTCTC facility will be responsible for conducting a series of durability and performance tests as specified by the International Organization for Standardization (ISO 9806, “Test Methods for Solar Collectors”). No testing site exists west of the Mississippi. A local test facility at OIT would encourage new business ventures into solar thermal collector production, reduce testing costs for equipment innovators, and stimulate interest in applied research into new solar applications such as hybrid geothermal heat pump systems.
Lake County Development, Lake County Resource Initiative

OGTA Besides the straightforward issues in home installation, however, hover the many unanswered questions with GHPs that need research attention. OGTA proposes to establish a ground source heat pump research and test facility along with its GHP training center to examine just such issues. The end result will be to provide research that will lower the cost of installing ground source heat pumps commercially and residentially within and outside Oregon. This information would be especially critical to Lake County for training new workers, and reducing costs for local home owners interested in building new ground source heat pumps on their property RESL The project revamps an already existent Renewable Energy Lab into a state of the art lab with equipment to advance study in four different renewable energy fields. The labs will produce jobs in construction, plumbing and electrical contracting. The lab development will enhance faculty opportunities for theoretical and applied research and train student interns in equipment management and use. Ultimately, RESL builds Oregon‟s highly skilled workforce by sending experienced engineering students into the industrial workforce.

Business Confidential

8/13/2010

Financing Renewable Energy Projects
Carbon Offsets Renewable Energy Credits

60,000 MT CO2 90,000 MT CO2 Green Power No Longer “Green”

Overview • A company will either want to buy carbon offsets because they want to (voluntary) or because they must comply with a law • The offset theoretically neutralizes a contribution of CO2 that otherwise would have gone into the atmosphere • Must generate ~10,000 MT of CO2 to sell offsets in profitable amounts

Pricing  Full Pricing Index – Essentially, the pricing varies from about .5¢/kWh to 2.1 ¢/kWh  Still require external certification from third party  The stronger the certification, the more valuable the credits  Only large scale projects can realistically use this method

Financing environment
Lake County‟s projects are unique in a sense that they are generally operating at a return on investment (under 5%) and below a few million dollars in total costs. While a 5% return wouldn‟t be a problem if the projects were large, their size makes it difficult for a company to spend time and energy to invest in such projects. This is why Lake County relies so heavily on grants and federal support to finance a majority of their projects. The following pages will summarize many of the tax and grant incentives available to projects in Lake County. Carbon offset and Renewable Energy Credit financing options will also be addressed here.

Financing: Carbon Offsets
A potentially attractive investment at first glance may be the carbon offsets generated from a particular project. Essentially, a carbon offset represents a guarantee that 1 MT of CO2 equivalent gas is being prevented from entering the atmosphere. Basically, a company that produces CO2 will purchase a ”certificate” from another entity that negates the carbon they produce. The certificate represents the CO2 production which would have otherwise occured. An offset can take many different forms, but for our purposes, these offsets would represent the CO2 being saved by a renewable energy project for an entity that would otherwise have to rely on coal or natural gas for power or heating.

The problem with Carbon offsets is that it is an emerging field and the prices are highly volatile. For instance, the CCX last year was selling credits for around 6 dollars per MT of CO2, now the same credits are selling for 1.3 dollars. Therefore the amount of funds that can be secured from this method are highly variable. Additionally, in order for carbon offsets to be profitable, you have to be offsetting around 10,000 MTs of CO2. Even though you can theoretically sell carbon credits on ebay, “high-quality” credits need to be verified by a third party. Third parties charge consulting fees, and variable fees per credit verified. Then if you don‟t sell the credits yourself, you have to sell your credits to a broker so they can sell the credits for you. All of this hand exchanging takes it‟s toll on the net revenue realized from offset sales. With this in mind, the largest project (3 million dollars) currently under control of Lake County only has an estimated yearly offset potential of 800 MT. This highlights the fact that offsets are not a viable choice for small scale projects. A more detailed white paper on this subject was recently released by LCD in February „09.

Financing: Renewable Energy Credits
Renewable energy credits run into the same problems as offsets. Consulting fees and additional project oversight from a third party reduce the amount of value. However, RECs are generally less tedious and more accessible to smaller scale projects. A full list of retailers and prices can be found here.

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Production Tax Credit (PTC)
More Information: PTC Form

Renewable Energy Tax Credit (ITC)
More Information: Direct Grant (not available 04.29.09) IRS (ITC available on tax forms)

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Federal Residential Energy Tax Credit
More Information: IRS Form

REAP Grant and Loan (USDA)
More Information: USDA

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8/13/2010

Business Energy Tax Credit (BETC)
More Information: ODOE Brochure

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8/13/2010

Conclusions

Part 1 - Introduction
Pg 1 Pg 2 Pg 3

 Introduction  Northwest Renewable Energy  List of Major Projects

Landscape

Part 2 – Major Project Analysis
 Economic and Project Management Approach  Major Project Breakdowns Pgs 18-21  Financing
Pgs 5-6 Pgs 7-17

Part 3 – Conclusions
 Where Does Lake County Stand?  Final Results and Analysis Pgs 33-38  Contacts, Resources, and Appendix
Pgs 23-24 Pgs 25-32

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Lake County Project Landscape
Where does it all fit in?
*Figures based on Pacific Power Jan 2009

The Goal
GreenWing Obsidian

Potential 226,468,000 kWhs
Excludes GreenWing, Crump, and wind projects

Need 48,767,713 kWhs*

3,999 houses1

2,386
P

29,097,216 kWhs

Legend

Paisley Geothermal

SVEC
Horizon Wind Coyote Hills

1,613

19,670,497 kWhs

Prison
Obsidian

Power Generation

P P

Small Hydro

Horizon Wind Crump Geyser Oregon Community Wind

Algae Hydro Biomass Wind
12000

Biomass

P

Mid State

12.194 mWhs / house a year 1.39 kWh

US Federal Census

Geothermal Schools and Hospital

The Goal Lake County's combined total projects offers a potential power generation of 31.454 MWs of electricity. This is the instantaneous capacity available to Lake County. Meaning, the amount of electricity that the County could produce in 1 hour should all the planned projects be operational and in optimal conditions. Electricity Explained Using KW as an example, KW is the total capacity of an object or the instantaneous maximum amount of electricity it could generate. KWh is the “miles traveled” or the actual amount of electricity produced in a given time frame. How this applies to Lake County With this in mind, if all the projects operated in Lake County were implemented this would result in:
(31.454 MW of available )* 300 (days) *24 (hours)= 226,468 potential MWhs or 226,468,000 KWhs

What this means to the overall goal of Lake County Lake County currently possesses the theoretical possibility of being labeled a renewable energy exporter with the single addition of the Biomass facility alone. Other major projects will only add to Lake County‟s overall mission of achieving renewable status. The electricity saved from the other projects may also come into play if the County seeks to achieve “off-grid” recognition. Even though the Biomass facility will offset all the electrical usage of Lake County, the actual electrical usage using conventional power will remain. Status of Solar Sites The two potential utility scale solar sites being explored within Lake County are the Backscatter solar site and the Obsidian Solar Development sites. The backscatter site is currently considered to be out of reach for Lake County for at least a few years as of August 3rd 2009. Although an ideal location given it‟s proximity to existing infrastructure (transistors) and land development, there are federal legal issues with the military that are critical barriers to implementation. The “solar development” site is covered later.
Business Confidential 8/13/2010

Lake County Development, Lake County Resource Initiative

Active Preliminary Major Project Durations
Key Points Paisley Geothermal Power Generation
Geothermal Schools Hospital P Construct C

Planning

Construct

Close

 August 1st is the cutoff for Biomass facility  Minor projects not accounted for

P

Construct

Close

Construct

Close

Small Hydro Biomass Solar Development

Cut Off Date August 1st 2010
Construct Close

P

Construct

C

2012 Timeline

MA Y J U A S O N D J F MA MJ U A S O N D J F MA Y J U A S O N D

2010

2011

2012

The Goal Continued Despite Lake County‟s ability to achieve it‟s goal, there are certain deadlines that must be met if this goal is to be realized. The above graphic illustrates that the most important project taking the longest to construct, the Biomass facility, must start no later than August 1st 2010 if it is to be operational by the end of 2012. Project phases explained Each project is segmented into three specific phases: 1. Planning The project contractors are hired and work begins 2. Construction The planning phase is where the project legality is discussed, designs made, feasibility analyzed, and permits issued 3. Closing Facility is brought online, contract closure takes place, hiring of facilities services finalized.

Length of Phases Some of the projects have varying lengths for their phases. This is simply because different projects currently have feasibility studies and other permitting work already established. In these cases, the phases were shortened or lengthened accordingly. For instance, the Biomass facility already has all of it‟s feasibility, legal, and permitting studies completed so it doesn‟t have a planning phase. Conversely, the Paisley geothermal and Lakeview electric projects have fairly high planning phases because of Environmental permitting which still needs to take place. It is also important to consider that this is only a working understanding of the phases associated with each project. Unforeseen problems and delays in construction can result in longer than anticipated project durations.

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Final Results – Electricity
Scheduled Electricity
Biomass Solar Development Small Hydro Lakeview Power Gen Paisley Geothermal Small Solar Schools Hosp. 23,000 KW 4,000 KW 14.4 KW 200 KW 2000 KW 50 KW 1464 KW

Paisley Small Solar 0% Geothermal 6% Lakeview Power Gen 1% Small Hydro 0%

Schools Hospital 5%

Solar Development 13%

Biomass 75%

Potential Energy

OCW 10% Biomass 24%

Biomass Obsidian Paisley Geo Schools Hospital Greenwing Crump Geyser Horizon Wind OCW

23,000 4,000 2,000 1,464 20,000 35,000 250,000 9,500

Crump Geyser 37%

Obsidian 4% Paisley Geo 2% Greenwing 21% Schools Hospital 2%  Horizon Wind not factored in this comparison as the project is in extremely early testing phases  Lakeview Small Hydro, Lakeview Power Generation, and Combined Lakeview small solar projects not factored as they are too insignificant in this comparison

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Jobs
500 450 400 350 300 250 200 150 100 50 0
Jobs Gain Biomass Solar Development Small Hydro Lakeview Power Gen Paisley Geothermal Schools Hosp. Crump Geyser 52.5 3 0.5 0.5 3 2 18 Retained Jobs 454 87.2 3 11.2 33.5 39.8 N/A

 The Biomass plant also has the additional benefit of saving 80 jobs directly at the plant

Jobs Gain Retained Jobs
Jobs Gain Total 79.5 Retained jobs Total1 628.7

“Jobs Gain Total” represents both part time (counted as .5) and full time (counted as 1) jobs generated from the projects. “Retained Jobs Total” estimates the total number of jobs, inside or outside Lake County, that will be retained from the economic activity of the projects.

Unable to estimate retained jobs for Crump Geyser
1Jobs

retained value not counted as these jobs are too distributed outside of Lake County

Job Economic Benefit
20000000 18000000 16000000 14000000 12000000 10000000 8000000 6000000 4000000 2000000 0
Biomass Solar Development Small Hydro Lakeview Power Gen Paisley Geothermal Schools Hosp. Crump Geyser GreenWing Energy Job Benefit 17,821,620 1,336,644 203,98 731,411 4,271,476 3,686,644 9,356,508 1,336,644

Job Benefit
*Wind projects not included as they will not include FTE or PTE and tax benefits unclear

Total Jobs raw economic benefit to Lake County $38,540,947

Schuman‟s Formula

(Total Salaries) * .1(utilization) * 6(activity) *(Project Duration)
Business Confidential

The above figure represents the estimated economic value the renewable energy projects will bring to Lake County in salaries alone using Michael Schuman‟s theory. This does not consider the project costs associated with bringing these jobs, just the raw benefit over the course of the projects lifetime. 8/13/2010

Lake County Development, Lake County Resource Initiative

Final Results – Financial
20,000,000 18,000,000 16,000,000 14,000,000 12,000,000 10,000,000 8,000,000 6,000,000 4,000,000 2,000,000 0 -2,000,000
Incentive Cost Biomass Solar Development Small Hydro Lakeview Power Gen Paisley Geothermal Schools Hosp. Benefit Holistic Benefit 0 0 17,821,620 0 0 0 40,550 92,602 203,986 620,650 508,643 731,411 1,826,101 3,436,078 4,271,476 2,150,000 2,400,000 3,686,644

• Crump, GreenWing benefits explained under “Job Economic Benefits” • Wind projects not included as they tax and employment benefits are still unknown

Color Coding of the Columns The above graph illustrates the comparative value breakdown of the different projects. The three columns represent a composite of the total value provided by a given project. Red represents the “incentive cost” of a project. Or in other words, the project cost when all plausible incentives are taken into consideration. For instance, the REAP grant, BETC tax credits, etc. The Light Gray shows the direct Present Value in terms of savings the project generates over it‟s lifetime. Therefore the difference between the Red and the Light Gray would represent the Net Present Value. Black represents the holistic value to the community including wages and their economic multiplier. The difference between the Black and Red values would therefore represent the Net Holistic Value.

Financial Results Explained Certain projects will be developed with private funds. Since the main point of this report is to address the value of the project to the Lake County community, costs incurred by third party developers are not considered. For instance, the Biomass project does not contain a Red column illustrating the cost to Lake County. This is because it is being developed by Marubeni Sustainable Energy; a private entity. Additionally, The Biomass project does not contain a direct benefit to the Lake County community in terms of Present Value. Therefore there is no Light Gray column for the Biomass facility in the above graph. This is because revenues received directly from the Biomass plant itself will be retained by the private entity and not received by the Lake County community directly. However, all projects contain a Black column, since there is some value each project will provide to the Lake County Community in terms of the wages it generates.

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Carbon Totals
Yearly figures*
250,000

Yearly Carbon Offset Totals*
Biomass Solar Development Small Hydro Lakeview Power Gen Paisley Geothermal Schools Hosp. GreenWing Crump Geyser Horizon Wind OCW 12,730 MT CO2e 2,448 MT CO2e 14.10048 MT CO2e 195.84 MT CO2e 1958.4 MT CO2e 800 MT CO2e 19,584 MT CO2e 34,272 MT CO2e 195840 MT CO2e 9302.4 MT CO2e

200,000

150,000

100,000

50,000

0

Biomass

Solar Development

Small Hydro

Lakeview Power Gen

Paisley Geothermal

Schools Hosp.

GreenWing Crump Geyser Horizon Wind

OCW

*Schools Hospital project is based on natural gas alternative

Carbon Totals
Lifetime
7,000,000

Lifetime Carbon Offset Totals1
Biomass Solar Development Small Hydro Lakeview Power Gen Paisley Geothermal Schools Hosp. GreenWing Crump Geyser Horizon Wind OCW 675,648 MT CO2e 73,440 MT CO2e 423.0144 MT CO2e 5,875.2 MT CO2e 58,752 MT CO2e 24,000 MT CO2e 587,520 MT CO2e 1,028,160 MT CO2e 5,875,200 MT CO2e 279,072 MT CO2e

6,000,000

5,000,000

4,000,000

3,000,000

2,000,000

1,000,000

0

Biomass

Solar Development

Small Hydro Lakeview Power Gen

Paisley Geothermal

Schools Hosp.

GreenWing

Crump Geyser

Horizon Wind

OCW

1Assuming 30 years Lake County Development, Lake County Resource Initiative

2Using

natural gas as baseline instead of coal Business Confidential

8/13/2010

Ideal financing requirements
Funding secured and funding needed
100,000,000
90,000,000 80,000,000

70,000,000
60,000,000

• Crump, GreenWing, and Wind projects not included as final cost figures still unknown

50,000,000
40,000,000

30,000,000
20,000,000 10,000,000

0
Biomass Obsidian Finance Group Small Hydro Lakeview Power Gen Paisley Geothermal Schools Hosp.

*

Obsidian Solar Development not included

Ideal financing requirements
Biomass Project Money The Biomass project will be receiving a large chunk of its financing ($20 million) from the Business Energy Tax Credit (BETC). The remainder of it‟s funding is going to be pulled from corporate financing. However, $5 million is being pursued to help secure matching funds by making the Return on Investment stronger. Small Hydro Depending on who develops the Lakeview small hydroelectric power plant, this plant could benefit from the BETC tax credit. A critical $28,500 dollars would then secure the remaining financing and construction of the plant. The reason this financing is important is that the plant itself is too small of a project for most investors to be spend time with, but just financially large enough for the town of Lakeview to invest in. Lakeview Power Generation The Lakeview Power Generation project needs at least $450,500 of critical financing in order to become an attractive investment. The Power generation project will provide essential power to the town of Lake of Lakeview and potentially be able to work synergistically with the Lakeview Biomass project and nearby correctional facility. This project is another example of a project that is too small and where the focus of the project makes it an unattractive investment for outside corporate development, but where the project can still provide a critical power need for the residents of Lakeview. Paisley Geothermal Project The Paisley Geothermal project is an excellent candidate for matching financing. The project itself is expected to generate 3.5 MW of power initially, with the opportunity to scale this up to as much as 10 MW. The current hurdle for this $9.5 million project is getting the $1.5 million of additional financing to begin development on the main and injection wells. If this money can be secured, a highly visible project can provide a critical resource for the City of Paisley. Schools Hospital Project The Schools Hospital Project is another project that has relatively minimal interest for a corporate entity, but high value to the residents of Lakeview. If at least $1.2 million can be secured for the financing of the project, then it can be pushed into construction and major cost savings can be secured for the local hospital and schools which will insulate them against rising oil prices. Furthermore, this project will provide the foundation for future expansions within the town of Lakeview.

100%

Project
Biomass

Cost

Funded

Needed

$90,000,000 $35,000,000 $55,000,000 $57,000 $20,000 $28,500

$23,229,000 Needed Total

90%

80%

70%

Small Hydro Obsidian Finance Group Lakeview Power Gen

60%

$50,000,000 $35,000,000 $15,000,000 $901,000 $200,000 $450,500 $125,470,00 0 Funded Total

50%

40%

30%

20%

Paisley Geothermal

$9,500,000 $8,000,000 $1,500,000

• Crump, GreenWing, and Wind projects not included as final cost figures still unknown

10%

0%
Total B

Schools Hosp.
*

$2,500,000

$1,250,000 $1,250,000
Business Confidential 8/13/2010

Obsidian Solar Development not included Lake County Development, Lake County Resource Initiative

Financing for the Projects Despite the immense renewable resources in Lake County, the area has traditionally found difficulty finding outside investment that is willing to provide the necessary capital to get the projects into construction. This is usually because the projects themselves are designed to be the most beneficial for the citizens of the County and do not necessarily appeal to corporate investment priorities; although sometimes , like with the case of the Biomass project, the two interests intersect. Another issue with funding, is that the Lake County government does not have the expendable income to invest in such projects, nor the required capital to keep them maintained. Consequentially, many good projects have not been pushed to construction because the necessary capital investment to get the projects initiated has not materialized. The graph on the previous page illustrates the basic amounts each project needs in order to go to construction. The Small Hydro project does not register in comparison to the other projects. It‟s capital investment is small compared to the other funds involved.

Summary Nearly $40 million dollars of investment can be utilized in Lake County if $8.23 million dollars can be leveraged to push the projects past capital investment barriers. This is an almost 5 to 1 matching situation that should be taken advantage of. The projects which Lake County has been developing the last several years are shovel ready and will bring needed jobs to the area, renewable sources of energy to Oregon, reduce carbon emissions, and help establish a precedent for future expansion of the projects in Lake County. These factors are tenets of the Governor‟s mission in Oregon and are all major reasons why the remaining funds need to be acquired.

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Conclusions
Lake County is in a good position to become the first Renewable Energy County (net exporter ) in the United States. However, projects like the Biomass plant, and the large scale solar development project are critical pieces to achieving this end goal. Smaller projects, although beneficial to the community, are generally too cost prohibitive to the individual owners and too small from an electrical standpoint to accomplish the renewable energy exporting landmark. Lake County must begin to target larger scale “utility sized” projects if it is to meet it‟s 2012 deadline. To this end, Lake County should consider: 1. Revising it‟s zoning codes From corporate feedback, this is a tremendous problem as every zone in Lake County is deemed to have some perceived value based on how it‟s coded even if the actual value of the land is negligible. This legal „additional use‟, causes legislative overhead that is preventative from a development standpoint. 2. Purchasing/reclaiming land for renewable energy use A current problem to development is the contractual negotiation process between developers and land owners in Lake County. Even though there is a lot of perceived space in Lake County, this land in actuality is highly segmented with many different property owners. Finding a large plot of land (50-100 acres), without having to deal with multiple property owners demanding different prices, different contracts, or even finding who owns the land at all is a process that prohibits development. If this process could be regulated or streamlined by the county, it would greatly encourage outside development. 3. Addressing Initial Capital Investment Most Lake County small businesses and residents cannot afford the $6,000-$15,000 minimum investment to begin installing solar or ground source heat pumps on their property. The only way to circumvent this cost prohibition is through grants and tax incentives available through the federal government. With this in mind, it might be beneficial to establish some kind of fund to subsidize professional grant writers when the annual grant cycle approaches. Or establish some kind of community fund designed to provide low interest loans for these projects. If the above problems are addressed, Lake County should see considerable interest from outside investors, and internally as more people can overcome the initial costs of implementing their own renewable energy systems.

Economic Benefits Lake County has long been in economic trouble. The community has traditionally relied on the nearby saw mill for employment and economic vitality. However, the plant was abruptly downsized in the early 90‟s when new timber regulations were levied. Ever since this occurred, the community has had a difficult time recovering and has lost considerable economic vitality. The renewable energy projects proposed in this report would help stimulate Lake County‟s economy in the short and long term. In the short term (1-3 years), new construction jobs would help bolster the community and provide badly needed jobs immediately to help alleviate the economic strain most families are currently experiencing. These construction jobs would not only benefit construction workers, but also the local businesses which rely on their continued business to survive in these especially difficult times. Another immediate benefit realized from the renewable energy projects would be the widespread reduction in heating costs for Lake County residents. A major expense for most businesses in Lake County is heating oil, particularly during winter months. When a majority of heating infrastructure for Lake County was designed, oil was an extremely cheap resource.

Unfortunately, in today‟s market, oil prices are becoming increasingly prohibitive as a cost effective heating source. If no action is taken, the price of heating oil will eventually be a main contributor to widespread business closure in Lake County when coupled with the reduced economic activity of the past several years. In the long term (5+ years), the projects proposed by Lake County will bring continued expansion and investment from outside developers which is expected to create even more economic benefits to the area in the form of more jobs. Additionally, new and existing businesses will find it easier to maintain operations with lower heating costs and a greater market for their goods and services. It is absolutely critical to the rural community of Lake County that the projects addressed in this report receive funding. Not only will it contribute to the commitment of Oregon towards delivering green jobs, but it will be delivering those jobs to a community which desperately needs them. Despite the immediate necessity, Lake County is optimistic that it‟s considerable renewable energy resources will provide the avenue for economic change that is so critically needed. Projects like the Biomass plant and the geothermal integration are preparing Lake County to become the first renewable energy county in the United States.
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Lake County Renewable Energy Contacts
For more information and future opportunities

Brian Hider
Brian Hider graduated from California State University Chico in December of 2007 with a degree in Business Management Information Systems and a minor in Managing for Sustainability. He is a founding member and subsequent president of the Net Impact undergraduate chapter at Chico State. Net Impact is a national society which focuses on developing best practices for sustainable businesses and preparing students for careers in sustainability. Upon graduating from Chico State, Brian was hired by SAP Labs in December 2007 to conduct a carbon footprint analysis of Lundberg Family Farms which was successfully finalized March 27th 2008. In this capacity, Brian became familiarized with carbon emission assessment methodologies and procedures and is the main lead behind calculating these benefits for Lake County. Currently, Brian is working as the Renewable Energy Coordinator for Lake County Development Corporation where he helps support the many projects being pursued.

Robert Rogers
Bob Rogers has an M.S., 1972, Mechanical Engineering, Stanford University, California. Bob is co-founder of the Oregon Renewable Energy Center at Oregon Institute of Technology where he has been Project Engineer since 2002. Bob is a registered Engineer in Oregon for 1) Mechanical, 2) Control Systems, 3) Environmental, and 4) Manufacturing Energy Plans Examiner, California Building Officials. Bob is an Energy Auditor, California Energy Commission, Building Operator Certification Trainer, a Honeywell DDC Controls Trainer and has an International Ground Source Heat Pump Installation Certification. In 2004 Bob was named one of 50 Great Oregon Leaders by Oregon Business Magazine.

Contact:
Lake County Development Corporation bhider123@gmail.com +1 530 828 4114

Contact:
LCRI robert.rogers@oit.edu +1 541 944 2826

Jim Walls
Jim Walls is the Executive Director for the LAKE COUNTY RESOURCES INITIATIVE (LCRI), a nonprofit working on natural resource projects. Prior to coming to LCRI, Jim worked for Natural Resource Conservation Service retiring after 33 years. Jim‟s main efforts today with LCRI involves biomass development, carbon credits systems for forestry, third party monitoring on the Fremont National Forest and collaborative forest management. In addition to biomass Jim is working on geothermal, hydro, solar and wind energy projects in Lake County with the goal of making Lake County Oregon‟s Most Renewable Energy County. Jim served 5 years as an advisor at the University of Washington initiating several forest carbon research projects. Jim serves on the Governor‟s Renewable Energy Workgroup helping develop policy and legislation for renewable energy in Oregon. Jim is also President of Lake County Chamber of Commerce and President of Lakeview Rotary.

Betty Riley
Betty Riley, Executive Director of SOUTH CENTRAL OREGON ECONOMIC DEVELOPEMNT DISTRICT (SCOEDD) has over eighteen years experience managing the preparation and implementation of planning and development programs and projects, including developing partnerships with multiple agencies and organizations to deliver economic development, community development and business development services. Her experience has included working with local jurisdictions and economic development organizations to develop sound goals, policies, strategies and implementation techniques for economic development; administering federal, state, and foundation grants and local contracts with average annual operating budgets of approximately $750,000; assisting local jurisdictions in applications for funding for economic development programs having accessed more than $26 million in federal/state/Foundation funding.

Contact:
LCRI jwalls@gooselake.com +1 541 947 5461
Lake County Development, Lake County Resource Initiative

Contact:
SCOEDD betty@scoedd.org +1 541 274 0098
Business Confidential 8/13/2010

Appendix: Lake County Acting Plan
Task I. Contract for a Energy Director I. Develop strategy for implementation of each of the renewables being considered in . I. Assist with the implementation of the Lakeview Plant, Lakeview Geothermal Energy Production, Lakeview Geothermal Heating District, Colahan/Surprise Valley Geothermal Energy Project, Christmas Valley Solar and Nevada Geothermal Power Plant. I. Energy Educational efforts a. Hold public meetings on technical assistance available to private landowners. b. Up-date webpage for renewables c. Develop fact sheet for renewable energy incentives for private landowners and developers d. Develop renewable energy demonstration at the Lake County Fair Grounds Timeline January 2009 June 2009 June 2009December 2012 Outcomes Technical Assistance Planned strategy Net producer of renewable energy

August 2009

Demonstration site and public awareness of renewable energy

I.

Establish a revolving loan program for renewable energy to serve home and ranch owners and remove other barriers to renewable energy development. a. Contract with South Central Oregon Economic Development District to operate the loan program. b. Assist local communities, landowners and developers with state and federal applications. c. Certify a contractor, energy auditor and engineer for ground heat pumps, solar and wind energy installation. Annual evaluation of work plan and budget

August 2009-July 2011

8 homes, 4 ranches, 4 business incorporate renewables into their homes and operations. Sustainable loan fund for renewables into the future.

I.

December 2009 – July 2011 Dec.

I.

Work with the Climate Trust, Carbon Solutions Northwest and 3Degrees on carbon credits for each of the renewable energy projects developed Prepare final report and post to website

I.

May 2012-July 2012
Business Confidential

Knowledge on what does and does not work Demonstrated impact of carbon credits on renewable energy performance Information to share with other communities
8/13/2010

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Appendix: List of suppliers, contractors, professionals
Name
Darryl Anderson

Credentials/Expertise
Professional Engineer Ground Source Heat Pump Designer Geothermal Systems Small Hydro-electric Ground Source Heat Pump Supplies Solar Supplies Certified Ground Source Heat Pump Installer Certified Ground Source Heat Pump Installer Certified Energy Trust Solar PV design and installation Professional Engineer Solar PV Solar Thermal GSHP Design and install Certified Energy Auditor

Location
Lakeview

Company/Org.
Anderson Engineering

Contact
darryl@andersonengineering.com 541.947.4407

Dane Strausz Gary McCleese Ken VanHoosen

Lakeview

Pro Build McCleese & Sons Lakeview Plumbing Start Electric

541.947.4071

Lakeview Lakeview

541.947.2801

541.947.4796

Sam Start

Lakeview

start@gooselake.com 541.947.2396

Robert Rogers

Lakeview

Lake County Resource Initiative

robert.rogers@oit.edu 541.944.2826

Derek McKeon

Lakeview

Independent Contractor

northwestws@yahoo.com

Appendix: Geothermal Resource Potential

Lake County Development, Lake County Resource Initiative

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8/13/2010

Appendix: Solar Resource Potential

Lake County Development, Lake County Resource Initiative

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8/13/2010

Appendix: Wind Resource Potential

Lake County Development, Lake County Resource Initiative

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Source Resources
 http://www.eiolca.net/
   EIO-LCA: Sector #230240: Water, sewer, and pipeline construction US 2000 Census (population) US 2007 Census (Income)

         

http://www.nrel.gov/ http://science.howstuffworks.com/solar-cell5.htm http://small-mart.org/ http://www.census.gov/ http://www.energy.gov/ http://geoheat.oit.edu/ http://www.solar4power.com/ http://www.oregon.gov/ENERGY/ http://www.green-e.org/ http://www.rurdev.usda.gov/or/9006re.htm

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