Presentation on the Massachusetts net metering framework and opportunities for private renewable energy developers and public entities to work together to leverage the benefits of that framework to support the development of new renewable energy generation.

1. Net Metering and Opportunities for Public-Private Projects Jonathan Klavens Klavens Law Group, P.C. February 7, 2011 Klavens Law Group, p.c.© 2011 Klavens Law Group, P.C.

2. Klavens Law Group, P.C. Small law firm focused on clean energy ventures and projects Help companies, investors, public entities and nonprofits Provide start-up, outside general counsel, transactional, project development and regulatory services Bring the interdisciplinary approach this field needs by drawing on experience in corporate, energy, land use, environmental, municipal and nonprofit law Klavens Law Group, p.c.© 2011 Klavens Law Group, P.C.

3. Net Metering: Basic Concepts Class I/II/III net metering facilities Net metering credit Host customer Virtual net metering Utility right to pay cash to Class III host customer Klavens Law Group, p.c.© 2011 Klavens Law Group, P.C.

4. Net Metering: Advanced Concepts Compatible with private third party ownership structures If taxable entity owner, compatible with federal tax incentives (esp. ITC/cash grant and depreciation) If better off-take arrangement comes along, can opt out of net metering Klavens Law Group, p.c.© 2011 Klavens Law Group, P.C.

5. Net Metering: Key Drawbacks 3% system cap on net metering facility capacity No certainty and inadequate transparency (may change) May need to sell credits you can’t use Net metering credit value can fluctuate with rates and rate classification Regulatory risk Utility interpretations DPU implementation of 2010 amendments Special issues for host customers on competitive supply Klavens Law Group, p.c.© 2011 Klavens Law Group, P.C.

6. Public Nexus: Special Benefits Klavens Law Group, p.c.© 2011 Klavens Law Group, P.C.

7. Structure: Offsite Third Party PPA Lender Equity Investors Sponsor REC buyer RECs $ $ % cash, ITC, dep. loan $ % cash Wind Project, LLC Town power & property tax $ power payments utility customer of record cash in lieu of net metering credits owner 100% output lease rights $ net excess power 3 2.0 MW wind turbines Utility Private landowner Klavens Law Group, p.c.© 2011 Klavens Law Group, P.C.

8. Additional Structures Off-site third party net metering credit purchase agreement (NMCPA) On-site third party PPA, behind other public entity load On-site third party PPA, stand-alone meter On-site third party NMCPA Klavens Law Group, p.c.© 2011 Klavens Law Group, P.C.

9. Resources Massachusetts DG and Interconnection website MA DPU net metering FAQs MassCEC Interconnection Guide for Distributed Generation Chapter 359 of Acts of 2010 Klavens Law Group, p.c.© 2011 Klavens Law Group, P.C.

10. Contact Jonathan Klavens Klavens Law Group, P.C. 420 Boylston Street, 5th Floor Boston, MA 02116 (617) 266-2879 jklavens@klavenslawgroup.com http://www.klavenslawgroup.com Klavens Law Group, p.c.© 2011 Klavens Law Group, P.C.

11. Disclaimer This document, which may be considered advertising under the ethical rules of certain jurisdictions, is provided with the understanding that it does not constitute the rendering of legal advice or other professional advice by Klavens Law Group, P.C. or its attorneys. Please seek the services of a competent professional if you need legal or other professional assistance. Klavens Law Group, p.c.© 2011 Klavens Law Group, P.C.