Presentation Outline 1.  BGC Environmental Overview 2.  Environmental Markets Overview 3.  WECC / Western Markets

Western Markets Overview Renewable Energy Markets Association September 2013, Austin TX

Supria Ranade BGC Environmental Brokerage Services, L.P

sranade@bgcpartners.com (646) 346 6899

199 Water Street, 19th Fl New York, NY 10038

BGC Environmental Services LP (New York NY) Brokerage and Advisory Platform encompassing all environmental commodities which fall under state and regional, compliance and voluntary mandates •  Compliance RECs (Renewable Energy Credits) •  Voluntary Green-ETM Certified RECs •  Green Power Contracts •  Carbon (compliance & voluntary, US & International) •  Regional Cap & Trade Programs (i.e. RECLAIM & HGB) •  EPA NOx & SO2 markets (CSAPR & CAIR) •  US ERC Markets •  Mobile Source Markets (EPAct, MSERCs, Rule 2202 & ZEVs/PZEVs) •  US Water Markets

•  WECC •  PJM

BGC Financial LP (Houston, TX) Power brokerage trade execution for a wide selection of energy and energy-related markets, including electricity and natural gas.

I. BGC Overview  

–  Mid-Atlantic (PJM) –  New England (NEPOOL) –  Texas (ERCOT) –  Midwest (MISO) –  West Coast (WECC)

–  Northeast States – Regional GHG Initiatives –  California (AB32) –  Los Angeles Basin Cap and Trade –  Houston- Galveston Area NOx –  Emission Reduction Credits (ERCs)

–  BGC Green-eTM Renewable Energy Basket –  Voluntary Carbon Credits

Air Pollution/ Cap and Trade Markets

II. BGC Environmental Markets Overview  Renewable Energy Markets

Corporate Social Responsibility

REC Markets have largely developed from:

1) State-wide targets/mandates 2) State and federal incentives 3) Competitive electricity markets

General differences between the East and West mandates:

Non compliance penalties REC Trading through tracking systems Distributed resources carve-out in RPS

Power delivery: Separate in-state requirements Contracts: Utility Standardization RECs: Bundled with power Price Discovery: Utility procurement events Solar: Grant financing

Power delivery: RTO requirement Contracts: Not standard RECs: Unbundled from power Price Discovery: Market & utility procurement Solar: SREC financing

Tracking Progress of the Western Renewable Portfolio Standards Recent Sept. 16 ACORE Report hails the Western US as a ‘leader’ in renewable development: •  ~31% of WECC Energy generation from renewables (compared to 12% nationally) •  9/13 states have RPS •  Majority states have net metering rules and interconnection standards for encouraging

development of solar and other DG resources •  WECC states have pioneered innovative renewable energy projects, like ocean thermal

energy conversion (OTEC) and wave energy experiments (HI, OR), an enhanced geothermal (NV) , an algae fuel production facility (NM), and microgrid projects in several states

•  BLM plans to hold the first competitive auction for public lands in two Solar Energy Zones (SEZ) in CO

•  DOI has worked with states to expedite the approval of certain renewable energy projects located on federal lands, particularly abundant in the west, and has established “renewable energy zones” to encourage utility-scale development in a number of western states.

•  Ex. 100MW Quartzite Solar (AZ) and 500MW Mohave Wind (AZ) •  Landmark SB123 directs NV Energy to eliminate 800 megawatts of coal-fired power

generation from its portfolio, and mandates 350 megawatts of renewable energy development

Select State Snapshots California •  RPS has 3 tier structure, requires 33% by 2020 •  Original CA RPS established in 2002; has taken years to finalize •  RPS market is rapidly maturing (overall utility bid prices down 30% from 2009) •  Due to project risk associated with large-scale resources, utilities have recently developed •  broader distributed gen procurement strategies (solar PV, storage) •  GIDAP approval by FERC in July 2012 may facilitate large-scale project development •  Recently signed AB 2196 amended requirements for in-state delivered pipeline quality biogas •  Rooftop solar boosted recently by AB327 (extension of net-metering, 33% as a floor RPS) Oregon and Washington •  OR ranks in top 5 wind states in the US •  OR RPS 25% by 2025 •  Recent OR proposals to modify RPS by removing restrictions on hydropower (2925) •  Washington RPS 15% by 2020; power must be delivered on a real-time basis to state •  Recent WA SB 2275 adopted to increase biomass eligibility New Mexico, Colorado and Nevada •  Aggressive utility solar expansion (50 MW Macho Springs recently approved by PUC) •  NM’s RPS applies to IOU’s (20% by 2020, with a lesser requirement for co-ops) •  CO RPS is 30% by 2020 (lesser for electric co-ops) •  NV – 25% by 2025 •  Unbundled RECs allowed in CO and NV (PECs)

Supria Ranade BGC Environmental Brokerage Services, L.P

sranade@bgcpartners.com (646) 346 6899

199 Water Street, 19th Fl New York, NY 10038