Proposal to Rockbridge County:

Pursuing "Zero Waste", Energy Independence and Fiscal Responsibility

RECYCLING FOR ENERGY

A PROPOSAL FOR ROCKBRIDGE COUNTY

Pursuing "Zero Waste", Energy Independence and Fiscal Responsibility

EXECUTIVE SUMMARY

Rockbridge County (RC) has to close its landfill by the end of 2012 and is reviewing alternatives for waste disposal. Finding a practical, financially sound alternative is essential. to achieving "Zero Waste" (ZW). Community Energy Independence (CEI) offers a unique solution to the landfill closing that also supports future ZW programs.

CEI proposes a public-private partnership. CEI will design / build, finance and operate a facility at RC's landfill to convert municipal solid waste (MSW) into electricity and over time, fuel. The Cfil project will:

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Contribute to Zero Waste as the County also reduces it overall waste More than double Rockbridge County's recycling rate

Supply the County with electricity and, over time, fuel

Reduce the County's reliance on fossil fuels - avoiding 100,000 tons annually Eliminate burying polluting garbage

Use a proven thermo-chemical conversion process, not incineration Emit far less greenhouse gases than the EP A accepted in incinerators Ensure budget neutrality for RC

Create an estimated 100 construction jobs and 20 permanent "green jobs Protect RC from project risk: construction, technical, financial, operational Create a Rockbridge showcase for Virginia and national focus on pursuing zero waste, clean energy, sustainability and financial viability.

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The first phase of the facility is estimated to bring $35 to $50 million of investment to Rockbridge and at full scale the project may invest $200 million or more in the region. In exchange, and at budget neutrality, the County would supply its MSW, selected commercial debris (C&D) and wood wastes for at least 20 years, which supply should be shrinking on a per person basis as part of a ZW policy. With CEI rep1acing the landfill services, the tipping fee would shift to CEl except for Rockbridge retained activities. Land and the baler shed will be made available for the plant. Electricity produced will be sold under a long-term agreement with a utility such as BARC or Dominion. Loca1 power generation as proposed is recognized as "distributed

generation" more energy efficient and reliable.

The remainder of this proposal follows the County's format for unsolicited proposals for projects proposed pursuant to the Virginia Public-Private Education Facilities and Infrastructure Act of2002, as adopted by the County on May 24,2010.

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Proposal 10 Rockbridge County:

Pursuing "Zero Waste", Energy Independence and Fiscal Responsibility

1.

QUALIFICATIONS & EXPERIENCE

Community Energy Independence, LLC (CEI) is a development and management company focused exclusively on recycling-for-energy (RFE) projects for municipal and county governments in forward thinking, rural and semi-rural settings. CEI helps the communities become more environmentally sustainable, energy independent and fiscally stronger. CEl was founded by people who have started, owned and managed, in some cases for more than 40 years, businesses in environmental waste management, technology development and community I real estate development. CEl's founders have been recognized in Virginia, nationally and internationally for their environmental breakthroughs, community contributions, entrepreneurial success, financial acumen, integrity and long-standing public-pri vate relationships.

a. Structure

CEl is a Virginia Limited Liability Company. CEI, or an entity formed specifically for Rockbridge County, will own, control, manage and finance all aspects of the project, including technology vendors, professional service firms, engineers, construction, feedstock I energy contracts, ongoing operation and project management.

The structure and participants is shown below.

CEl's founders' approach is to lead a team of companies renowned in their respective fields. CEI will control all aspects of the project and be "at risk" overall. The companies contracted for the design, engineering, construction and management will provide warranties for their work and performance,

b. CEI Team Experience

eEl has, and will continue to develop strategic alliances and contractual arrangements with companies to ensure a successful project. CEI has already worked with several engineering, design and construction firms such as Black and Veatch for the design, engineering and construction of the CEI facility. All have expressed an interest in participating in this project.

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Proposal 10 Rockbridge County:

Pursuing "Zero Waste", Energy Independence and Fiscal Responsibility

CEI has engaged EnerSol to provide its proprietary technology, PEGS©, and experience for conversion of organic and municipal solid waste material into constituent elements of carbon, oxygen, hydrogen, etc. witholll incineration. EnerSol has more than 8 years experience in non-burning conversion of a variety of wastes.

For construction and related services, CEI would prefer to contract with qualified, local firms, We estimate that the construction phase will create about 100 jobs.

CEI's founders have more than 100 years of combined experience in developing, financing and managing projects in environmental services, infrastructure development and operation, technology deployment and community development. Examples include:

World Resources Company: A leading global recycler of industrial sludge operating in over 30 countries with several plants all of which are ISO 9001:2000 and IS014001 certified. Over 25 years experience as a highly specialized environmental risk management company that designs, implements and manages recycling activities and provides environmental services for non-ferrous metal industries worldwide.

GreenSea, LLC: A ten-year old ocean research company with patents to grow phytoplankton for fish production and sequestration of atmosphere C02.

West*Group: More than 50 years as a major developer in the Washington, D.C. region. Founded Tysons Corner as first mixed-use property: industrial, commercial, residential, retail,2,000,000m.s.f. Received many awards for environmental innovation and conservation. www.west-group.com

AFCO: A leading developer and operator of warehouses, parking and infrastructure at airports, "inside the fence." www.afcoinc.com

ABI, LLC: Developer of Branson Airport and all related infrastructure in Branson, Missouri. Largest private airport constructed in the U.S. www.FlyBranson.com

Water Disinfection: Patent developer! builder of water disinfection systems using highpower, pulsed, ultraviolet light.

Four Points, LLC: A six-year old company which develops real estate in urban, emerging markets of Was bing ton, D.C. region with $50 million in net assets. Arranged financing using local, state and federal support I grants for a marquis mixed-use project.

CEI's founders have raised more than $] billion from different sources of financing. CEl is capable of arranging the equity and debt financing for what is expected to be a $35 million to $50 million first-phase and $200 million project at full scale.

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Propo al to Rockbridge County:

Pursuing "Zero Waste", Energy Independence and Fiscal Responsibility

CEl's owners / key members involved in the Rockbridge effort includes:

Gerald T. Halpin. Among his many entrepreneurial efforts, Mr. Halpin has served as Chairman ofWest*Group for more than forty years, overseeing all aspects of the company. Mr. Halpin is a leader in Virginia, including conservation, community support and real estate development in orthem Virginia and the Washington region.

In 2002, Ernst & Young named Mr. Halpin the Washington region Entrepreneur of the Year. Mr. Halpin was a Founding Director of the Bell Atlantic Corporation (now Verizon) when it spun off from AT&T and served on the Board of Directors of Crestar Financial Corporation and Crestar Bank (now SunTrust Bank). Mr. Halpin is Founding Chairman of the Grand Teton National Park Foundation and is formerly a Director of the National Fish and Wildlife Foundation and the Virginia Biotechnology Research Park Authority of the Virginia Commonwealth University. Mr. Halpin was appointed a member of the Govemor's Advisory Committee on Industrial Development and served in that capacity under Virginia Governors Holton, Godwin and Dalton. He served as a member of Virginia Governor Robb's Task Force on Science and Technology. Also, he served for more than eight years as a founding member of the Fairfax County Economic Development Authority and its predecessors, Mr. Halpin has received tributes by members of both parties in the Congressional Record of both the US House of Representatives and the Senate,

John D.T. Gerber. Mr. Gerber is a founding Partner and Manager (President) of Four Points, LLC. He was most recently the Senior Vice President of WEST*GROUP overseeing all operations and has more than 20 years experience in engineering and infrastructure including corporate and project management, project and venture finance and marketing. He also led all master planning, zoning and entitlement, interacting frequently with top elected officials at Federal, Virginia and regional levels.

Mr. Gerber served as Senior Development Advisor on Silverstein Properties management team of the $7 billion, 10 million square foot World Trade Center redevelopment and the Freedom Tower project in New York, He served as President of the Pennsylvania Station Redevelopment Corporation, a public-private corporation in New York City that was responsible for the development and financing of the award winning $800 million expansion of Moynihan Station, the largest transportation facility in America.

He was an Associate Partner at Skidmore, Owings and Merrill LLP in ew York, responsible for strategic planning, design, engineering and project management of more than $15 billion 0 f infrastructure, commercial, mixed-use, transportation developments in Europe, the Middle East, Asia and the US.

Patrick W. Jeffries. For more than 30 years, Mr. Jeffries has been leading and investing in organizations in technology, health care, government services and infrastructure. He has served governments in finance, infrastructure, management and information technology with cities such as Denver, Phoenix, Scottsdale and Westminister for which

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Proposal to Rockbridge County:

Pursuing "Zero Waste", Energy Independence and Fiscal Responsibility

he developed capital budgets and rate structures for utilities; as well as the governments of the United Kingdom, Germany, Spain and Switzerland.

Other experiences include: Chairman of OpTx, a cancer treatment software company; WellPoint, a top US health care payer where Mr. Jeffries led its central operations of

2 000 people, an annual budget of $500 million and a $2 billion capital budget. As a Partner with McKinsey & Company, he led client teams pursuing major growth and leadership transitions, e.g., GM Hughes Electronics where he led the effort to commercialize more than $ I billion of proprietary technologies. He was also an instructor at the Harvard University Kennedy School of Government.

George B. Fitch. Mr. Fitch is a paid advisor I consultant to CEL He is a three term Mayor of Warrenton, Virginia. As mayor, he received national acclaim for both fiscal reform and conservation efforts. Dubbed the "Warrenton Miracle" he reduced taxes by over 75% without cutting a single service. He received the Preserve America Community Award from first Lady Laura Bush for his growth management initiatives that have protected the environment and character of Warrenton and Fauquier County. Recently he launched a Green Initiative to reduce the carbon footprint of his community by 10%. The centerpiece of his initiative is a model for an integrated bio-refinery to use a variety of residential, commercial and agricultural wastes to produce green energy. His model has been featured in media such as the Washington Post and the British Broadcast Corporation. He is a featured speaker at conferences on renewable energy and has testified before the US Senate Committee on Energy.

He is a former diplomat having served as commercial attache in Kingston, Jamaica and Paris as wel1 as Consul in Belize. He served on the President's Advisory Council on International Trade Policy and Negotiation where along with CEO's of multi-national corporations he reviewed and commented on bilateral and regional trade agreements before submittal by the President to the US Congress.

c. Project Contacts

Patrick Jeffries: pwj@pw;.net (650) 996-2446 1600 Anderson Rd, McLean, VA 22102

George Fitch: gfitchI@verizon.net (540) 347-5283 15 Main St, Ste 4, Warrenton, VA 20186

d. Financial statements

CEI, as a newly formed company, has not prepared audited financial statements.

e. Disqualification of persons

No persons or members of CEI will be disqualified by the Virginia State and Local Government Conflict of Interest Act.

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Proposal 10 Rockbridge County:

Pursuing "Zero Waste ", Energy Independence and Fiscal Responsibility

2.

PROJECT CHARACTERISTICS

a. Project Description

The project is to design, finance at CEI' 5 risk, build, operate and maintain a practical, efficient, environmentally approved waste to energy facility at the Rockbridge County landfill as part of a broader "Zero Waste" program.

The first phase is estimated currently to recycle most of the daily MSW delivered to the landfill from Lexington, Rockbridge County and Buena Vista and convert that material through a two-stage, low oxygen non-burning process into green. Subsequent phases could receive and process additional amounts ranging between 50 tons to100 tons per day. Rockbridge County may decide to increase revenue by using wastes from neighboring counties for Rockbridge's recycling for energy.

The project wil1 produce electricity initially, which would be exported to the grid.

The facility also could produce, over time, a liquid transportation fuel such as biodiesel.

If Rockbridge County and Virginia Department of Environmental Quality want to do so, there may be other debris - construction and demolition waste (C&D), hospital waste, fluorescent bulbs and HAZMA T waste - that may be processed at the facility. The project will take advantage of existing infrastructure at the landfillelectrical grid access, baler / sorting shed, and perhaps methane capture and rail access.

eEl's plant has six major steps:

1. MSW is received into the entry dock and sorted into inorganic or inert material and organic material. Inorganic material is moved and recycled into its various components.

2. Producer material is converted, without burning, into a "producer gas" of carbon, oxygen, and hydrogen. Organic material does not burn - unlike traditional mass bum or incinerator plants - because the process is high temperature and low oxygen.

3. Gas is reformed by a proprietary thermo-chemical process to produce a clean gas similar to natural gas using virtually all, organic material.

4. Inorganic materials that were not sorted out initially, such as metals, soil, glass and silica are liquefied at the high temperature to produce a glass of vitrified slag.

5, Clean, natural gas feeds an engine or turbine to produce electricity at the highest yield and efficiency of comparable approaches.

6. Electricity is transferred to the electricity grid for distributed generation, which is more reliable and efficient because it is not carried over long transmission lines.

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Proposal to Rockbridge County:

Pursuing "Zero Waste", Energy Independence and Fiscal Responsibility

Comparison to Incineration

As described with the six steps above, this plant and conversion process is far different from incinerator or mass burn plants .. The old plants use simple, traditional technology - a larger version of the 55 gallon drum in your grandfather's backyard where he threw everything he didn't want and struck a match when the barrel was full. In addition to old technology, one will see refrigerators being thrown into the furnace. Why? Because operators are paid by the weight of what goes in whether it is organic or inorganic. EPA regrets approving this conversion technology back in the 1980's and there have been no new mass bum incineration plants approved since.

Electrical efficiency from the Clil plant may exceed 40%, i.e., 40% of the waste calorific potential is converted into electrical energy. This compares to incinerators which yield about 17% caloric potential.

As important, the emission levels from EnerSol technology will be much lower than an incinerator and well below the maximum levels required by EPA and the Virginia Department of Environmental Quality. EnerSol uses a closed loop system that controls the limited oxygen and temperatures so that the base gas elements do not form toxic compounds such as furans, dioxins, and nitrous oxide or sulfur oxide. The few, limited emissions are treated by common fume management methods.

With the CEI plant, there will be no remaining hazardous or noxious by-products, ashes or reactive residues. Remaining inorganic material may be converted into a slag in a glass matrix material. This glass matrix material may be used for road construction. This compares well against a typical mass-bum plant with more than 30% residues that contain pollutants, often buried in landfill.

EnerSol's process is efficient, robust and relies on proven technologies.

Separating the melting and gasification functions ensures low risk operations and limited process tuning.

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Heat Raw Purified I

syngas syngas I

_..--_---'L...- __ ......

Auto-thermal Gasification

Syngas Plasma Refining

Biomass, waste (MSW, RDF ... )

Low temperature syngas

Inert Leftover Material Melting

Inert molten slag

Pollutants-free syngas

Heat Recovery

Heat

Gas Scrubbing

Proposal to Rockbridge County:

Pursuing "Zero Waste P, Energy Independence and Fiscal Responsibility

The plant will have a positive energy balance, estimated to achieve a positive energy balance of 4: 1. For every 1 MW of energy used internally, it will transfer 4 MW to tbe grid. Otber bio-energy plants have lower yield. For example, com-to-ethanol plants have a negative energy balance of 1: 1.25. And, the CEl plant will not be part of the food versus fuel debate.

This approach also may be a first in U.S, local government energy use and conservation and will further ensure RC's goal of zero waste as well as greater energy independence and environmental leadership. The project may attract national and international leaders who want to observe first hand how communities can become more energy independent by simply using the trash they generate. The Administration, U.S. Congress and international development agencies such as the World Bank are actively seeking new and innovative approaches to energy independence and combating global warming. Other sources of renewable power such as wind, hydro and solar are problematic in Virginia, but not biomass energy conversion,

The CEI plant will be developed, operated and maintained in a budget and risk neutral manner for Rockbridge County. The fiscal safety of the County is ensured because CEl will finance all the development, construction, operation and maintenance of the plant and with its partners provide guarantees and warranties for safe and secure financial protections for Rockbridge. In the event that bond financing is the best approach, using County bond capacity CEI will provide the needed guarantees and sinking funds to avoid any long-term financial risk to the County.

b. Tasks to be performed by Rockbridge County

Feedstock Contract: Preliminary discussions suggest the amount ofMSW provided initially will be roughly150 tons per day. County staff will help select materials for recycling via the plant. The project's success depends on a steady, consistent stream of feedstock with high calorific value to yield the highest amount of electricity.

Staff support: The County's contribution will include staff time - evaluation, oversight and other assistance. The County will be asked to work with CEI in. pursuing CREBS, VRAs and other financing to make the project viable. CEl will pay external counsel, underwriting costs, etc., and take the risk on issuance of such debt.

Cost / benefit comparison: The County and CEI will calculate costs associated with its landfill practice, the alternative of a transfer station and the alternative of hauling trash to the Cumberland or Augusta landfill. These costs would be used to determine the true avoidance cost. The goal of the project is to make it budget neutral to the County. This approach to an "open book" of the comparative costs will help the community decide among alternatives - with the pressing reality of a mandated landfill closure.

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Proposal to Rockbridge County:

Pursuing "Zero Waste", Energy Independence and Fiscal Responsibility

c. Permits Required for the Project

CEl understands and has already begun conversations to confirm compliance with county, state and federal regulations that may apply to the project. Overall, we are finding strong project attention and support at all levels.

County

We will determine together if the project conforms to County zoning ordinances or requires a special use permit (SUP).

Federal Statutes

The construction, operation, and effects of operations of electric generation and refmery facilities are governed by the National Environmental Policy Act, Solid Waste Disposal Act, Clean Air Act and Federal Water Pollution Control Act. The provisions of most of those statutes are environmental and public hea1th matters under the aegis of the u.S. Environmental Protection Agency. Certain provisions related to energy development and electric transmission fall under the purview of the Federal Energy Regulatory Commission (FERC) and the US Department of Energy. The small size of the project may limit FERC's role. FERC may be interested because the project represents a model for other localities to adopt for distributed power generation, a security priority of the new Administration. The purchaser of the electricity, i.e. BARC or Dominion Virginia Power will often address topics raised by FERC and the Virginia State Corporation Commission (SCC) in its role of regulating connection to the interstate grid and oversight of electric power generation and rates. With regard to the US Department of Energy, it may assist us because the project promotes renewable energy and energy efficiency.

Commonwealth of Virginia

Similarly, Virginia has enacted an Energy Policy that supports development of renewable energy and promotes the generation of electricity through technologies that do not contribute to greenhouse gases and global warming. The Constitution of Virginia vests in the SCC the duty of regulating the rates, charges and services of electric companies and their facilities. The Division of Energy Regulation implements these SCC duties as well as issuing certificates of convenience and necessity requisite for construction and operation of certain facilities by electric suppliers. The SCC bas set requirements for entities to construct and operate electric generating facilities.

It is the position of the Commission's Office of General Counsel and Division of Energy Regulation that the project's developer, owner or operator should file a petition with the Commission pursuant to the provisions of Code Section 56-5800 to secure a

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Proposal to Rockbridge County:

Pursuing "Zero Waste", Energy Independence and Fiscal Responsibility

construction permit for the facility. The Commission will not regulate rates from the facility but must permit its construction under the criteria set forth in that provision.

The pertinent air quality, emissions, waste, water and pollution control permitting and enforcement programs are delegated to the Commonwealth by the US Environmental Protection Agency under provisions of the National Enviromnental Policy Act. Offices of the Virginia Department of Environmental Quality (DEQ) administer programs.

The Waste Management Board of the DEQ is responsible for regulating and enforcing the management of waste. The least preferred method is land filling. The Board will look favorably on a proposal with an alternative to land filling, incineration and greater resource recovery; according to Richard Doucette, Waste Program Manager, Northern Virginia Regional Office of DEQ. Waste management permits may be granted pursuant to an expedited process called the "Permit-by-Rule".

The Air Pollution Control Board of the DEQ regulates the control and abatement of air pollution. The federal Clean Air Act requires Virginia (and other states) to deal with air quality issues including health-based standards for six "criteria pollutants" - carbon monoxide, lead, nitrogen oxides, ozone particulates and sulfur oxides as well as certain hazardous pollutants not within the air quality standards criteria. Additionally, there are regulations for airborne odors. Virginia's Air Emissions Program differs from federal and other state programs in that Virginia may issue a permit, which allows simultaneous construction and operation of the type of facility CEI is proposing; according to Terry Darton, Environmental Engineer, Northern Regional Office of DEQ.

The Virginia Air Operating Permit system is a new, streamlined system, which seeks to place air-permitting requirements for a facility into one single permit. Permit types are categorized by the potential of a facility to emit the "criteria pollutants". eEl has shared with DEQ the amounts of regulated pollutants emitted by the EnerSol process. These amounts are well below the maximums allowed by the DEQ. With some pollutants, e.g., dioxins, they are a hundred times less than with incinerator plants. DEQ has previously granted an air permit to EnerSol for its pilot plant in Springfield. Terry Darton and his colleague, Dean Gossett have offered assistance to permit and streamline the process. Donna Perla, senior advisor in the Office of Research and Development, US Enviromnental Protection Agency, has offered to assist in implementing smaller-scale recycling for energy conversion via gasification to replace landfil1s.

The Water Control Permit for the project should be covered under the existing permit for the landfill. During initial contacts with DEQ waste program officials, the Northern Regional waste program manger, Richard Doucette stated that he had discussed the project concept with the person responsible for water permits and that they both concurred such a facility is unlikely to adversely impact the water resources of the Commonwealth. Further, they believed that such a project will be more enviromnentally beneficial because of its potential to reduce the runoff contamination by nitrogen and other pollutants currently generated by the land filling of wastes.

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Proposal to Rockbridge County:

Pursuing "Zero Waste", Energy independence and Fiscal Responsibility

d. Possible Adverse Effects of the Project

CEI believes there are no adverse effects. At the outset, there may be a few people who recall the problems with old-fashioned incinerators, e.g., polluting, billows of black smoke and strong odors. There also may be groups that would prefer to wait for an as yet unknown "perfect path" to "Zero Waste", such as maximizing all other forms of recycling before considering a plant that recycles for energy .. CEI will coordinate with the County several convenient, open meetings, media access, a web site and other outreach to describe the type of plant and technology as well as the benefits that will accrue to make Rockbridge a greener community. In this way, CEI wil1 support Rockbridge's own approach to community involvement and decision-making.

e. Positive Effects of the Project

The positive effects ofa CEl recycling plant for energy conversion include:

1. Solving the landfill closure problem.

2. Accelerating progress toward Zero Waste.

3. Reducing the carbon footprint of Rockbridge County by 5% through the elimination of greenhouse gas emissions at the landfill.

4. Displacing at least 100,000 tons of fossil fuels initially per year, achieved by producing electricity from renewable sources.

5. Producing electricity for distributed generation, which is safer, more efficient and more reliable than generation/transmission over long lines subject to disruption.

6. increasing the recycling rate of Rockbridge County from its current level of under 40% to over 90% when all the MSW is recycled into renewable energy.

7. Producing clean, green electricity to serve about 15% of RC citizens and businesses.

8. Creating about 100 construction jobs and upwards of 20 permanent green collar jobs.

9. Investing at least $35 million initially and perhaps $200 million overai1 in the County with annual operating expenditures of approximately $3 million.

10. Providing a Rockbridge showcase for Virginia and the United States that other communities can adopt to become more sustainable and energy independent.

11. Producing, at a later stage, a biofuel that could be used for Rockbridge County government vehicles, school buses, and law enforcement vehicles.

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Proposal (0 Rockbridge County:

Pursuing "Zero Waste '', Energy Independence and Fiscal Responsibility

f. Proposed Schedule of Work

If the County moves quickly with the unsolicited proposal process and approves the project, we expect to have the facility operational by third quarter 2012. Feasibility and initial design will be completed by year-end or early Q 1, 2011. The proposed schedule of work once the County approves the project:

Q12010

• Secure permits

• Establish supply agreements and fee structure

• Secure Power Purchase Agreement (PPA) with utility

Q22011

• Secure equity and debt financing

• Prepare construction drawings

• Sign construction contracts

• Start site development work Q3 2011 - Q3 2012

• Construction, with targeted completion .in mid 2012.

• Plant tuning and operational readiness concluded by third quarter, 2012

g. Risk and Liability

CEI will assume the risks and liabilities of the project through the contracts with Rockbridge, vendors and other project participants.

h. Assumptions of Ownership

As noted earlier, CEl is proposing that CEI will build, finance, own and operate the facility. The exact legal structure of the public private partnership with RC will be determined in part to ensure budget neutrality, proper tax treatment and no risk to RC.

i. Phased Openings of the Project

The initial phase of the project will be completed prior to the mandated closure of the landfill in 2012. Capacity will be designed to accept the current capacity of acceptable recycling material. Additional phases for growth will be based on RC's progress with other Zero Waste efforts and RC's interest in the financial/job benefits of accepting feedstock from neighboring areas. The plant can be scaled up in modules of 50 tons/pd. For example, several neighboring areas have their un-recycled waste collected at transfer stations and hauled 100 miles to a landfill. RC may want to offer a financially competitive alternative to its neighbors and further strengthen the region's economy and move the region toward ZW.

GEl will add conversion of organic material to bio-fuel, e.g., biodiesel or ethanol, as quickly as needed and feasible. This plant could be built with another candidate CEl partner, Terrabon, to produce fuel via anaerobic digestion of high moisture waste.

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Proposal to Rockbridge County:

Pursuing "Zero Waste", Energy Independence and Fiscal Responsibility

j. Architectural, building and engineering standards

CEl win comply with existing applicable standards of the County.

k. Contingencies

The project is contingent on the following:

1. Permits from DEQ and other agencies

2. Contracts for feedstock and electricity sales

3. Viable fmancing and fees, e.g., CREBs VRAs

4. Continuing regulatory support for such facilities / financing

3.

PROJECT FINANCING

(See separate confidential attachment)

4.

PROJECT BENEFIT AND COMPATIBILITY

The project is compatible with the County's Zero Waste policy and will help achieve this goal. Several governmental agencies and communities support this approach:

Leading environmental states, such as California define conversion of un-recycled waste to energy to be recycling and diversion, not disposal.

Communities such as Albuquerque view conversion to energy as waste minimization that counts towards zero waste.

Massachusetts does not allow incineration but allows gasification.

The EPA has stated that gasification is an environmentally preferable method. Congress has said the organic waste stream from trash qualifies as a feedstock for the production of renewable energy.

1. Environmental Leadership. The project should enhance the County's efforts to achieve Zero Waste. It will reduce the County's greenhouse gases. As Rockbridge County officials are aware, the general public by and large wants to protect the enviromnent and be more energy efficient. This project meets their desire.

2. Leadership in Energy Independence. The project will help the County become a national leader in innovative approaches to energy independence and sustainability. There should be tremendous public support as benefits are known and understood.

3. Government Support. The project is supported by the DOE through an $827,000 Virginia grant to CEl for the project. The DOE and US Department of Agriculture funded the feasibility study and the US Environmental Protection Agency provided technical assistance. Several members of Congress have said the project will help

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Proposal to Rockbridge County:

Pursuing "Zero Waste ", Energy Independence and Fiscal Responsibility

decentralize energy production and thereby provide greater energy security for the country, Additional funding also may be available,

4. Business Growth .. County officials should also find that local businesses would support a project that will distinguish their community and attract other businesses in the rapidly growing field of renewable energy.

5, Community ParticipatlonfCommunication, As noted earlier, there may be views that the County is considering an incinerator project, or a plasma gasification technology that has not worked in other settings. CEI win work with County and other jurisdictions to conduct informal meetings for the public and business community.

6. Fit with Comprehensive Plan. The project is consistent with, and advances the goals of, the Comprehensive Plan to make Rockbridge County more sustainable and environmentally conscious. Consistent with the Plan, the project will demonstrate the conservation of natural resources and the utilization of renewable resources.

7. Assist with Certain Businesses. CEI will make every effort to qualify and use businesses that are, e.g .. , minority-owned, women-owned, veteran-owned and small.

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3..
4 ..
S.
6..
7,
8,
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2,
3,
4 ..
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7. Many social, economic and environmental benefits to the County would include:

Solving the landfill problem in a financially sound manner, to achieve Zw Reducing Rockbridge County's carbon footprint by at least 5%.

Reducing fossil fuels use by at least 100,000 tons

Improving the recycling rate from less than 40% to over 90% Reducing greenhouse gas emissions by 50,000 tons or more.

Making green electricity and over time, green fuel available to County residents, government vehicles, school buses and public safety vehicles ..

Remaining budget neutral without any financial risk.

Providing a sense of community pride to County citizens,

Providing a showcase to demonstrate energy independence for communities.

SCHEDULE

During the next several weeks during the County review process, CEI wilt:

Refine analysis of incoming feedstock to the landfill.

Enter into discussions with BARe and Virginia Dominion Power Continue discussions with DEQ to permit the project

Confirm financial structure and sources of debt and equity financing Complete near-term vendor/partner agreements

Continue design/engineering for permitting, financing.

Assist Rockbridge County with community outreach if needed.

* * *

CEl looks forward to advancing this project for the County's benefits.

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