Beech Ridge Wind Farm Update

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• Beech Ridge Wind Farm Update

West Virginia Wind Working Group September 18,
2007
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Invenergy Wind - Corporate Overview

• Developer, owner and operator of large-scale wind
  power generation projects in North America and
  Europe.
• One of the top 5 wind energy developers in
  North America based on projects over built the
  last two years.

• More than 1.5 billion in wind energy projects
  (over 1,000 MW) in operation and late stage
  construction.
• Secured 1,300 MW of wind turbines from GE for
  2007 2008 build program in the U.S.

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Beech Ridge Wind Farm

• Northwestern Greenbrier County
• Proposed 186 MW facility
• 124 GE 1.5 turbines (77 meter rotors)
• Key landowner MeadWestvaco
• Target Schedule
• PSC Siting Certificate August 2006
• Start Construction April 2007
• Start Operations December 2007
• Expected Output 570,000,000 kwh/yr
• Economic Impacts
• 300,000,000 investment
• 200 construction jobs
• 15-20 permanent jobs

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Beech Ridge Opposition

• Anti-Wind
• MCRE
• CRW
• Tourism
• The Greenbrier Sporting Club
• Greenbrier Co. CVB
• Elected Officials
• US Rep. Mollohan
• WV Senator Guills
• WV Delegate Canterbury
• WV Delegate Campbell
• Lewisburg Mayor Manchester
• Numerous Local Citizen Organizations
• Greenbrier River Watershed Association
• Williamsburg VFW
• Williamsburg Ruritan etc

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Beech Ridge Supporters

• Labor (ACT)
• Industry
• WV MFA
• WV Forestry Association
• Environmentalists
• Sierra Club
• Coal River Mountain Watch
• Local Government
• Rainelle, Rupert, Quinwood, Richwood
• Greenbrier Co. Commissioners
• Grassroots
• 700 letters of support

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January 2007 PSC Order

• Key Finding Granted Certificate for all 124
  turbines
• 18 Pre-Construction Conditions, including
• Compliance with USFWS, DNR, SHPO
• Decommissioning
• Minimum property tax guaranty
• Compliance hearing and affirmative PSC
  confirmation
• 11 Post-Construction Conditions, including
• 3 years of bird and bat studies
• Technical Advisory Committee
• Mortality Monitoring
• Adaptive Management Testing
• Minimal lighting
• No aerial herbicide spraying

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WV PSC Permitting Timeline

• 2005
• November Submitted Application
• 2006
• April Public Hearings (Fairlea)
• May Evidentiary Hearings
• August PSC Order
• 2007
• January Final PSC Order (Reconsideration
  Denied)
• February Supreme Court Appeal
• April Supreme Court Agrees to Hear Appeals
• Summer Supreme Court Briefs
• Fall Supreme Court Hearing
• Winter Supreme Court Decision

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WV Supreme Court Appeal

• Appelees
• Alicia and Jeffrey Eisenbeiss
• Mountain Communities for Responsible Energy
• Appelants
• Public Service Commisssion of West Virginia
• Beech Ridge Energy LLC
• WV State Building and Construction Trades
  Council, AFL-CIO
• Amicus Curiae
• MeadWestvaco Corporation
• Tom Vance
• Appalachian Power Company
• Utility, Telecommunications, and Energy Coalition
  of West Virginia
• West Virginia Oil and Gas Association
• West Virginia American Water Company

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Potential Appeal Outcomes

• Application Dismissed
• Beech Ridge reapplies
• Order Remanded to PSC
• New PSC Order
• Eligible for reconsideration and appeal
• Order Upheld
• Pre-Construction Compliance
• Eligible for reconsideration and appeal

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• S.B. 441 Implications for Wind Energy

West Virginia Wind Working Group September 18,
2007
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Senate Bill 441 Background

• May 2001 Legislation
• BO Taxes
• Set capacity factor for wind at 5
• Property Taxes
• In West Virginia, pollution control equipment is
  taxed at salvage value 5 of appraised value.
• Classified wind turbines and towers as pollution
  control equipment.
• Resulted in most of a wind project being valued
  at salvage value
• 2006 Sessions
• Governors Tax Modernization Project

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Business Occupation Taxes

• Applies to Industries Regulated by PSC
• Based on nameplate capacity
• Base rate of 22.78 per kilowatt
• Note 20.70 rate for coal plants using
  desulfurization technology
• Adjusted by legislated capacity factor
• Fuel Old CF New CF
• Coal 40 40
• Wind 5 12
• Peaker 5 5

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Governors Original BO Tax Proposal

• Raise BO Taxable Capacity Factor for wind (and
  only wind) to 20
• Four times the effective BO tax burden
• 170,000 in additional taxes per 100 MW
• Would have resulted in wind paying
• 50 more per MWh produced than coal-fired
  electricity and
• 300 more per MWh than gas-peaker fired
  electricity.

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BO Taxes under Senate Bill 441
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BO Taxes under Senate Bill 441
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Property Tax (Old System)

• Pollution Control /Salvage Value
• (as of Capital Cost)
• Coal 33
• Wind 85
• Appraised Value (as of Capital Cost)
• Coal 69
• Wind 19
• Assessed Value (60 of Appraised Value)
• Coal 41
• Wind 12
• Property Tax Burden (per MWh generated)
• Coal 1.96
• Wind 1.65

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Governors Property Tax Proposal

• Eliminate classification of wind turbines as
  pollution control equipment
• Raises property tax burden to more than five
  times then current payments
• Increases annual property tax burden
  approximately 2,000,000 per 100 MW (20-year
  average)
• Results in wind paying
• 50 more than coal per dollar of capital cost
• 400 of what coal pays per MWh produced

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Govs Proposal Would Have Made WV Uncompetitive
with Neighboring States
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Property Taxes Under S.B. 441

• Capped percentage of wind facility assigned
  salvage value at 79
• Impact varies depending on percent of facility
  costs originally eligible for salvage valuation
• Should result in wind paying more property taxes
  per MWh than coal

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Property Taxes Under S.B. 441
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Property Taxes Under S.B. 441