The Power of Water

January 2010

Locations with

Hydroelectric

Potential

KEY FACTORS

• Elevation Drop

• Amount of Flow

• kWh Pricing

• Cost of Project

• Other Benefits

• Potential Partners

• Funding Sources

• Interconnection

Existing

Hydroelectric

Facility

The Power of WaterJanuary 2010

How much power can be generated?

h * Q * 85% / 11.8 = kilowatts capacity

kilowatts * Days of Operation * 24 = kwh

How much money can be generated?

Kwh * $.06 = $ per year generated

How much financing can that fund?

$ per year generated – annual costs = payment capacity

6% financing over 20 years

How much to build the facility?

Pipe costs, building, turbine-generator-switch

How close to utility for interconnection?

Do you know what FERC means?

Do you know anyone at your state PUC?

What is the zoning of your potential site?

Does this thing generate positive cashflow?

The Power of WaterJanuary 2010

Putting the Financial Pieces Together At 10,000’

Tax Credits – State and Federal

Business Energy Tax Credit – ODOE

Calculate 30% of 85% of your project cost

Production Tax Credits with Private Partners

Funding Opportunities

Energy Trust of Oregon – Utility Incentives

Renewable Energy Loan Programs

Clean Renewable Energy Bonds (CREBs)

Other grant sources for renewables?

Rural development

Regional Infrastructure funds

The Power of WaterJanuary 2010

Where’s the Sugar?

Any water conservation?

Conserved water for instream or additional lands to irrigate

Any O&M costs eliminated?

Any cost savings to someone else?

Pressurized water to patrons that reduces pumping

No need for bridges on new road being planned

Any benefits to someone else?

Piped waterway now creates opportunity for trails

Easement reduction provides more developable land

The Power of WaterJanuary 2010

Identify Other Benefits

• 2.5 Miles – Main Irrigation Canal

• 9’ Steel Pipe

• 20 cfs Conserved Water Savings

• 3.3 MW Generating Capacity

• 5 MW built capacity

• $24 MM Project Costs

• Multiple Benefits & Beneficiaries,

& Funding Sources

• Capability to pipe upstream 4

miles and add 4 MW of power

• Each mile of additional pipe

generates 10 cfs for instream

JUNIPER RIDGE HYDRO

The Power of Water

January 2010

The Power of Water

January 2010

JUNIPER RIDGE HYDRO

Total Project Costs - $24MM

Pipe, excavation, fill, clearing, landscaping

Mobilization, insurance, bonds

Inlet structure, trash rack, energy dissipation system

Turbine, generator, switch gear & installation

The building, landscaping, lighting

Grid interconnection

Development costs – legal, permits, licensing, design

Debt service and major mechanical reserves

Financing costs, construction period insurance

Environmental Impact mitigation

Add 10-15% contingency

Regulatory surprises – other factors out of your control

JUNIPER RIDGE HYDRO

The Power of Water

January 2010

Total Financing - $24MM

BETC $ 4,365,000

ETO $ 1,000,000

OWEB, BOR, CWSRF $ 6,250,000

COID Cash Equity $ 2,289,000*

Total $13,904,000

Remainder $10,096,000

Whose your daddy? – ODOE $10,946,000

Small Energy Loan Program (SELP)

18 Year long-term loan

5-9% Rate of Return to COID

The Power of Water

January 2010

ALTERNATIVE STRUCTURES

Private Party Financing

It’s all about financial rate of return

Rate of return expectations higher than for municipal entity

Income taxes & property taxes

Incentives available to private party – PTCs and depreciation

Contract and performance driven

Ownership Structure

Private ownership for range of 10-15 years

Ownership “flips” to Municipal Entity

Municipal entity usually operates and maintains

Oregon Public Sector Statutes

Limitations apply and Project Agreement structure important

The Power of Water

January 2010

FRUITS FROM THE EFFORT

Siphon Power Plant

Fully owned by COID

On line producing revenue since 1989

Funded through ODOE SELP

Debt obligation paid off in 2014

Total revenue to date $39MM

Average revenue per year $2MM

Average “surplus” to COID per year $400K

Offsets assessment increases to patrons

Funds irrigation infrastructure capital projects

After debt paid off – annual surplus to be $1.5MM+

JUNIPER RIDGE PROJECT

JUNIPER RIDGE PROJECT

JUNIPER RIDGE PROJECT

TIME FRAME:

October 6, 2009 Construction Begins

April 1, 2010 Piping Complete

September 6, 2010 Hydroelectric Complete & Online

MANUFACTURERS:

James Leffel & Company, Ohio

NW Pipe Company, Oregon

Ideal Electric Company, Ohio

JOBS:

115 Jobs Created or Sustained

TOTAL PROJECT COST:

$24,000,000

WATER:

19.6 CFS of Water Permanently into The Deschutes River

Improved Water Quality (river temperature decreases)

POWER:

13 Million KWH of Green Power Produced Per Year

Which annually displaces 4,550 tons of carbon dioxide produced by

Coal Plants and 2,600 tons of carbon dioxide produced by Natural Gas

1,300 Homes will receive electricity from this project

STATE OF OREGON

Department of Energy

Department of Environmental Quality

Oregon Watershed Enhancement Board

DESCHUTES RIVER CONSERVANCY

U.S. BUREAU OF RECLAMATION

ENERGY TRUST OF OREGON

CITY OF BEND

PELTON FUND

Portland General Electric/

Confederated Tribes of Warm Springs