Innovative Structuring to Lower the Cost of Power for the United States Coast Guard in Puerto Rico

The Situation: The United States Coast Guard Sector San Juan (”USCG”) is responsible for all Coast Guard missions in the Eastern Caribbean area, and operates multiple housing, operations and other facilities in Puerto Rico.

The Problem: USCG has a large electricity requirement for their facilities supplied by Puerto Rico Electric Power Authority, primarily a light fuel oil burning utility. The high and rising cost of LFO has lead to the USCG paying a high cost for electricity.

The Solution: USCG selected Schneider Electric Buildings Americas, Inc. (“Schneider”) to install 3 MW of solar PV on over 200 buildings at three sites as well as replacing 600,000 SF of roofing with cool roofs to provide electricity savings and support for the PV systems. Hannon Armstrong was selected to be the owner of the PV system and sell the associated power to USCG due its innovative Renewable Energy Services Agreement under a traditional ESPC. This structure was the first-of–its-kind andallows the USCG to receive the maximum benefits from federal tax credits andother local incentives.

The Benefit: By early 2012, USCG will be supplied with over 4,000,000 kWhs annually of solar energy, generated and consumed on-site.

Large Scale Securitization Financing for Energy Assets Benefiting the U.S. Government

The Situation: US Government is the largest single consumer of energy in the world with very old building stock.

The Problem: Federal appropriations for building upgrades never reach a priority, and thus the US Government loses billions of dollars annually.

The Solution: In concert with several Fortune 100 US Government contractors, Hannon Armstrong created the Hannon Armstrong Multi-Asset Investment Trust (“Hannie Mae”).

The Benefit: Hannie Mae has funded over $2.5 billion of capital upgrades of US Government property and has been a significant contributor to the US Government’s carbon reduction goals.

Biomass Gasification for Oak Ridge National Laboratory

The Situation: Oak Ridge National Laboratory is one of the premiere research labs in the world, exploring some of science’s most complex questions, including how to advance the US energy infrastructure.

The Problem: With a WWII vintage power system and funding constraints, ORNL was not leading by example in the area of technology development and commercialization, despite abundant renewable resources in the area.

The Solution: Through an Energy Savings Performance Contract (“ESPC”), Hannon Armstrong provided the required $100 million to allow Johnson Controls to install a state-of-the-art biomass gasification project, along with other energy upgrades.

The Benefit: ORNL has reduced its carbon footprint dramatically by replacing substantial fossil fuel use with local biomass, all while reducing costs.

Fiber Optic System for NASA / NOAA and USAF in the Arctic Circle

The Situation: Critical environmental data is only available 24 hours a dayfrom an observatory in Norway, in the Arctic Circle.

The Problem: NASA / NOAA and the U.S. Air Force needed a fiber optic line to ensure fast and reliable transmission of the data, but had no funding.

The Solution: Hannon Armstrong provided the $40 million required to build the fiber optic system, taking payment out of avoided satellite transmission fees.

The Benefit: The U.S. Government will save over $140 million in communications cost over the life of the system.

Fiber Optic System for US Army Kwajalein Atoll (USAKA)

The Situation: U.S. Army Kwajalein Atoll (“USAKA”) is home to the Reagan Ballistic Missile Defense Test Site (“RTS”) which plays a critical role in the research, development, test and evaluation of the United States’ missile defense and space programs.

The Problem: USAKA communications are satellite-based, which is costly and allows limited bandwidth. As a result, SMDC has to maintain a number of expensive DoD contractors at USAKA that could otherwise perform their functions remotely from SMDC’s Huntsville headquarters.

The Solution: Hannon Armstrong owns and financed the $63 million 2,900 km fiber optic system, connecting to Guam, for further connection to Huntsville.

The Benefit: USAKA will be able to significantly lower costs in the Pacific by moving skilled jobs back to the US and accelerate information flows through the secure fiber optic system.

Commercial Scale Biomass Cogeneration for DOE’s Savannah River Site

The Situation: The U.S. Department of Energy’s Savannah River Site is a former nuclear weapons manufacturing facility with ongoing nuclear cleanup operations requiring the use of high pressure steam for vitrification.

The Problem: With a 1950s era coal-fired steam plant and funding constraints, SRS was not leading by example in the area of clean technology development and commercialization, despite more energy efficient technology and abundant renewable resources in the area.

The Solution: Through an Energy Savings Performance Contract (“ESPC”), Hannon Armstrong provided $125 million to enable its client to install a biomass cogeneration facility capable of producing 240,000 pph of steam and 20 MWs of electricity, along with other energy upgrades.

The Benefit: SRS has reduced its greenhouse gas emissions by 100,000 tons per year by replacing substantial fossil fuel use with local biomass, all while reducing ongoing operating costs.

Solar and Cogeneration at the Marine Corps Air Ground Combat Center in 29 Palms, CA.

The Situation: 29 Palms Marine Corps Base is the home of the USMC Air Ground Combat Center, the primary desert training base for the U.S.

The Problem: In order to save on energy costs the base needed a $50 million cogeneration plant. But there was no budget, despite the fact that the base would spend multiples of that amount in higher energy bills without an investment.

The Solution: Through an Energy Savings Performance Contract (“ESPC”), Hannon Armstrong provided the required $50 million.

The Benefit: The base was not only able to reap the benefits of the needed investment but also only has to pay if it receives savings on its energy bill through the terms of the ESPC.

Utility Scale Geothermal Power Plant in Salton Sea Area

The Situation: EnergySource LLC had a 30-year PPA with a utility off-taker for a utility-scale geothermal power plant, but lacked the capital required for construction.

The Problem: The Project Finance market had not seen a triple-flash geothermal transaction in 20 years and to make matters worse, there was no EPC wrap on the project.

The Solution: Hannon Armstrong advised EnergySource how to create a synthetic EPC structure and reacquainted the lenders on the merits of base-load geothermal power plants. As a result, Hannon Armstrong successfully arranged approximately $400 million in construction loans and project equity for the company.

The Benefit: EnergySource was able to begin construction of its geothermal power plant, bringing hundreds of jobs to Imperial County, CA, and was able to finance the development of its project portfolio.