# Presentation: 594990

## Coordinated Resource Offering Protocol Workshop 

- Coordinated Resource Offering Protocol Workshop

- July 17 – July 19, 2007, Salt Lake City,  Red Lion Hotel Downtown

**Presented by:   Peter Luchetti, Senior Partner**
**	****	**** ****Table Rock Capital, LLC**

## Contact Information

- 1 Front St., 11th Floor
- San Francisco, CA 94111
- Phone: 	415-710-0906
- Fax: 	415-274-0803
- Peter Luchetti, Senior Partner 	pluchetti@t-rockcap.com

## Investment Approach

**Public Private Partnership Structure**

- 15, 20, 25, 30, 35 Year Concession contracts governed by USFS, BLM and DOI with assets returned to government at the end of the concession period

**CROP**
**Resource**
**Supply**

**Green**
**Power –Bio Fuels**

**Concession Agreement Key Features**

- USFS, BLM, DOI grant concessions for 15 to 35 years
- Qualified private parties act as concessionaires
- Design, Build, Finance, Operate (“DBFO”)
- Green Energy (Power, Bio Fuels)
- Competitive tendering for long term concessions
- Exclusive service areas ensure economic viability
- Government option to retain assets at maturity
- Stewardship requirements clearly written into contracts
- Penalties for non performance (including termination)

## Project Financing and Biomass Power Plant Considerations

## Main Considerations

**Fuel Supply**
- What are the sources of fuel (i.e. industrial timber), ?
- How long can the fuel sources be supplied?
- CROP , stewardship standards?
**Land**
- Is there availability of land near fuel supply for a power plant?
- Are local residents supportive of Restoration Act? Of plant?
- Environmental considerations?
**Transportation**
- How will fuel supply be delivered to the plant?
- Will this require new roads? Easements?
**Purchase Power Agreement**
- Is there a local power company willing to participate?
- How much power is needed?
- What is the life of the agreement?
**Interconnect**
- How easily can the plant access the power grid?
- Can easements be obtained?
- Where is the nearest substation?

## Investment Approach

**Public Private Partnership Structure**

- 15, 20, 25, 30, 35 Year Concession contracts governed by USFS, BLM and DOI with assets returned to government at the end of the concession period

**CROP**
**Resource**
**Supply**

**Green**
**Power -Bio Fuels**

## Biomass Power Modeling

**Pro Forma 25 MW Plant**

## Biomass Power Sensitivity Analysis

**Change Pricing, Cogen, Fuel Cost**

- Business Plan – Program Dependent on 15 to 30 year Concession Contracts

## Western Forest Potential Fuel Supply

**CROP Resource Identification**

## Land Survey- Fuel Supply

- Total forest capacity (300-450 K acres per plant) should be under contract within 35-mile radius (≈2.5 MM acres) to facilitate a 25 MW Biomass** **power generation facility
- 100% Public Land USFS, BLM, DOI, {[Private Tracts?]
- 75/25 mix private/public
- 	12 – 24 sites with sufficient capacity.** **

- Source: The Campbell Group Portland Oregon

**CROP**
**Resource**
**Supply**

## Renewable Portfolio Standard Translate to PPA’s

- The likelihood of securing PPA’s is very favorable given existing and proposed Renewable Portfolio Standards in the western U.S.

**Green**
**Power -Bio Fuels**

## Relative Value 

- Bureau of Land Management
- Bureau of Indian Affairs
- Fish and Wildlife Service
- National Park Service
- USDA Forest Service

**	**Together, Federal Agencies spend roughly **$1 Billion each year** in suppression costs.

- Relative Value* *

## Relative Value 

- = **USFS, BLM, DOI**
**	****Commercial Value**

- Environmental Value, Commercial Value, Life & Property Safety

**CROP**
**Resource**
**Supply**

## Merging Current and Prospective Future Strategies Power Generation  ► Bio Refinery

## Next Steps

- USFS, BLM, DOI Concept Paper
- Program Design
- Approval Process
- Concession Development Process
-  Pilot Project 3-6 Concessions
- RFQ Phase
- Short Listing of Bidders
- RFP Phase
- Winning Bidders
- Contract Negotiation
- Design Build Phase
- Operate & Maintain Phase
- Assets Revert to Government End of Concession
- Subsequent Phases including liquids strategies

## Appendix

## Term Sheet Elements

**Summary of Terms and Conditions**
**$37.5 MM**
**25 MW**
**BioMass USA Limited**

## Term Sheet Elements

## Term Sheet Elements

## Term Sheet Elements

## Term Sheet Elements

## Term Sheet Elements

## Term Sheet Elements

## Healthy Forests Initiative

- Reduce the risks of damage to Federal lands from catastrophic wildfires;
- Authorize grant programs to improve the commercial value of forest biomass for electric energy, and other commercial purposes;
- Enhance efforts to protect watersheds;
- Promote systematic information gathering on the impact of insect infestations on forest health;
- Improve capacity to detect early insect and disease infestations; and
- Protect, restore, and enhance degraded forest ecosystems to promote recovery of threatened and endangered species as well as improve biological diversity and enhance carbon sequestration

- Purpose of Healthy Forest Restoration Act of 2003

## CROP Scope- Objectives

**National Scale 5 Year Outlook**

- The CROP projects incorporate proposed 5-year removal data from 36 national forests, 105 ranger districts, 41 BLM districts, and multiple natural resource agencies located in 15 states across the US.  CROP is intended to:

**Coordinate and levelize sustainable removals of biomass** between public agencies in each CROP landscape
- Facilitate the use of **long-term multi-agency stewardship contracts**;
**Heighten environmental and public trust** in coordinated, sustainable biomass removal;
**Increase the ‘surety’** of annual biomass removal contracts from public agencies; and
**Invite investment back to our nation’s forest landscapes** based on **sustainable removals of woody biomass.**

## Investment Opportunity

**A “Perfect Storm” in U.S. F.S, DOI, BLM CROP Potential**

**8,934,964 gT of biomass** (<7” dbh ) – *enough annual biomass volume to construct over 10 new 15 Mw power plants requiring 160,000 gT of biomass/yr.*
**2233.9 mmbf of small logs** (+7”-12” dbh) – *enough annual volume to support 17 new dedicated small log processing mills requiring 25 mmbf of wood supply per year.*
**2221 mmbf of large logs** (>12”) – *enough annual volume to support 7 new large log processing mills requiring 60 mmbf of wood supply per year.*
- Were solid wood manufacturing facilities to be constructed to handle the resource removal within the CROP landscapes, over **3,000 direct fulltime, family-wage jobs would be created.  **This figure** does not **include the jobs that would be created for processing the biomass volume to be removed within the CROP landscapes over the next five years,

## Relative Value 

## Natural Gas vs. Biomass Power

**CROP is Win/Win**

- CROP strategies addresses wild fire, long term resource management, environmental and rural economic (job creation) agendas.

## Project Financing and Biomass Power Plant Considerations

## Shasta Wheelabrator 2 X 18 MW Built in 1989

- Location: Anderson, CA
- Fuel: mill waste/forest residues at 50% moisture
- Fuel Source: Shasta-Trinity and Lassen National Forests and private lands in surrounding area
- Plant design: three wood-burning units with utility-type high pressure boilers
- Burn Rate: 100 tons/hour
- Fuel handling and transportation: two truck scales, three platform truck dumpers, one hydraulic log loader, one 52-inch V drum and one 72-inch drum chipper and infeed/offloader conveyors

## Could Bioethanol Replace 30% of transportation fuels

- One of the goals of this initiative is to accelerate research and make "cellulosic ethanol" cost-competitive by 2012, offering the potential to displace up to 30 percent of our nation's current fuel use by 2030.
- One guarantee, for $10 million, was combined with a Business and Industry guarantee to help fund construction of a 20-megawatt (MW) biomass electrical generating plant in Arizona.
- That plant will use wildfire-damaged timber along with waste from a nearby paper mill as a fuel sources.