“biomass in our schools” epma presentation presented by: april 10, 2013

“Biomass in our Schools”

EPMA Presentation

Presented by:

April 10, 2013

For over 25 years, McCormick has provided various facilities related services to Maine public schools and other clients.

In recent years, our company has created a strong focus on alternative energy, energy savings, and in particular, biomass.

We have become a well-respected leader in the biomass industry, traveling overseas and across North America to learn biomass in action and educate others about biomass.

McCormick Facilities Management

EPMA Presentation4/10/2013

Our hard work and dedication to be a leader in the industry has lead to an exciting opportunity for our company and our customers.

McCormick Partnered with

Cate Street Capital



Who is Cate Street?

our future.

Their focus is on sustainable, environmentally friendly innovations that will provide financial returns to our customers and real change for our planet.

They invest time and resources into projects



They are a company devoted to breakthrough technologies for the protection of our planet and

and new technologies that are designed and proven to make a difference.

Cate Street’s IndustriesEPMA Presentation

4/10/2013


What does this mean to our customers?

More opportunities and better resources.

We’re expanding but this doesn’t affect our mission. McCormick will still be run by the same team it has been for years.

Our staff will have new opportunities to train and learn. This knowledge will be passed on to our customers.



2 Business Groups


Facilities Group:Facility Condition AssessmentsLong-term Master PlanningO & M reviewVFA Database MaintenanceDOE SFMS annual surveysConstruction ManagementSecurity Audits

Energy Group:Biomass project developmentBiomass consultingHeating Purchase AgreementsTurnkey projects- design/buildEnergy AuditsFuel supply• Wood chips • Torrefied wood pellets


What does the partnership mean?

• Cate Street is providing capital to McCormick so we can expand our business

• We will be adding personnel, services, and new product offerings• Mechanical engineer, PE, to design biomass• Project manager to oversee field projects• Sales and marketing to increase our presence

• Financing for biomass heating• Heating Purchase Agreements



Heating Purchase Agreement (HPA)

what is it?

A Heating Purchase Agreement is a long term contract in that we provide heat energy to the end user at a cost that is


guaranteed to be lower than current fuel sources and heating costs.



what do we do?

We are the turnkey project provider:◦Develop project with the customer◦Complete design w/ stamped drawings

◦Finance the project◦Install, operate, and maintain◦Handle permitting, insurance,

repairs, etc.◦Provide the fuel




what are the benefits?

No up-front capital cost to the customer◦Paid for from existing fuel budget

Initial 20% savings over #2 heating oilSavings increase each year of the termSavings are guaranteedWe operate the plant




what are the benefits?

Keep it fueledCapital renewal costs are in the HPA Customer gets to focus on other mattersDon’t have to wait for grants!



HEATING PURCHASE AGREEMENT (HPA)SAVINGS Calculator – 10 year

Spreadsheet

Customer Illustration Sample

10 year Biomass HPA Proprietary and ConfidentialApril 10, 2013

Year

Pricing at Oil less 20% fixed with 5% escalator 1 2 3 4 5 6 7 8 9 10

Calculations

Use in Fuel Oil per year (gal) 80,000 80,000 80,000 80,000 80,000 80,000 80,000 80,000 80,000 80,000

Cost per Gallon of Fuel $ 3.50 $ 3.85 $ 4.24 $ 4.66 $ 5.12 $ 5.64 $ 6.20 $ 6.82 $ 7.50 $ 8.25

Rate of Inflation in Oil Prices 10%

Cost per year of Fuel Oil $ 280,000 $ 308,000 $ 338,800 $ 372,680 $ 409,948 $ 450,943 $ 496,037 $ 545,641 $ 600,205 $ 660,225

Boiler efficiency 75%

BTU/gal 138,800

MMBTU/yr 8,328

Cost in MMBTU with Oil $33.62 $ 36.98 $ 40.68 $ 44.75 $ 49.23 $ 54.15 $ 59.56 $ 65.52 $ 72.07 $ 79.28

Minimum Escalator 5.0%

Cost in Biomass MMBTU $26.90 $ 28.25 $ 29.66 $ 31.14 $ 32.70 $ 34.33 $ 36.05 $ 37.85 $ 39.74 $ 41.73

Customer Cost of Biomass heat per year $ 224,023 $ 235,224 $ 246,986 $ 259,335 $ 272,302 $ 285,917 $ 300,213 $ 315,223 $ 330,984 $ 347,534

Savings for Customer $55,977 $ 72,776 $ 91,814 $ 113,345 $ 137,646 $ 165,026 $ 195,825 $ 230,418 $ 269,221 $ 312,692

Percentage Savings 20% 24% 27% 30% 34% 37% 39% 42% 45% 47%

Total projected oil costs next 10 years $ 4,462,479

Total projected cost of biomass fuel $ 2,817,740

Total 10 savings $ 1,644,739

Out of pocket cost to Customer $0



SAVINGS Calculator – 15 year

Spreadsheet

Customer Illustraion Sample

15 year Biomass HPA Proprietary and Confidential Proprietary and Confidential

April 10, 2013

Year

Pricing at Oil less 20% fixed with 5% escalator 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

Calculations

Use in Fuel Oil per year (gal) 80,000 80,000 80,000 80,000 80,000 80,000 80,000 80,000 80,000 80,000 80,000 80,000 80,000 80,000 80,000

Cost per Gallon of Fuel $ 3.50 $ 3.85 $ 4.24 $ 4.66 $ 5.12 $ 5.64 $ 6.20 $ 6.82 $ 7.50 $ 8.25 $ 9.08 $ 9.99 $ 10.98 $ 12.08 $ 13.29

Rate of Inflation in Oil Prices 10%

Cost per year of Fuel Oil $ 280,000 $ 308,000 $ 338,800 $ 372,680 $ 409,948 $ 450,943 $ 496,037 $ 545,641 $ 600,205 $ 660,225 $ 726,248 $ 798,873 $ 878,760 $ 966,636 $ 1,063,300

Boiler efficiency 75%

BTU/gal 138,800

MMBTU/yr 8,328

Cost in MMBTU with Oil $33.62 $ 36.98 $ 40.68 $ 44.75 $ 49.23 $ 54.15 $ 59.56 $ 65.52 $ 72.07 $ 79.28 $ 87.21 $ 95.93 $ 105.52 $ 116.07 $ 127.68

Minimum Escalator 5.0%

Cost in Biomass MMBTU $25.20 $ 26.46 $ 27.78 $ 29.17 $ 30.63 $ 32.16 $ 33.77 $ 35.46 $ 37.23 $ 39.09 $ 41.05 $ 43.10 $ 45.26 $ 47.52 $ 49.89

Customer Cost of Biomass heat per year $ 209,866 $ 220,359 $ 231,377 $ 242,946 $ 255,093 $ 267,848 $ 281,240 $ 295,302 $ 310,067 $ 325,570 $ 341,849 $ 358,941 $ 376,888 $ 395,733 $ 415,520

Savings for Customer $70,134 $ 87,641 $ 107,423 $ 129,734 $ 154,855 $ 183,095 $ 214,797 $ 250,339 $ 290,138 $ 334,655 $ 384,399 $ 439,931 $ 501,871 $ 570,903 $ 647,780

Percentage Savings 25% 28% 32% 35% 38% 41% 43% 46% 48% 51% 53% 55% 57% 59% 61%

Total projected oil costs next 15 years $ 8,896,295

Total proected cost of biomass fuel $ 4,528,598

Total 15 year savings $ 4,367,697

Out of pocket cost to Customer $0

HEATING PURCHASE AGREEMENT (HPA)



Containerized BoilersA containerized boiler is a complete boiler house within a shipping container incorporating boilers, pumps, pipe work, fuel stores and electrical connections.

This solution offers many benefits:• ease of installation – 'plug in and go'• effective supplementary or back up heating system which can

be switched on or off easily• a portable solution - only a concrete slab is required and the container is easily removable• shorter lead times for planning• lower costs of planning • a low cost alternative to expensive permanent building costs



What are Torrefied Pellets?Unlike commonly recognized “white” pellets, torrefied pellets are black.

Through a process called torrefacation, the properties of the wood are changed using microwave technology.

This process produces a product that burns cleaner and has the same BTU output as coal or 25% more than white pellets.

The pellets are also compatible with existing equipment.(switch to Thermogen power point)

www.thermogenind.com



Thank you!

4/10/2013McCormick Facilities Management

Questions?

We are very excited about the opportunities this new relationship is presenting not only for McCormick, but

also you, our customers.



“biomass in our schools” epma presentation presented by: april 10, 2013

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