2 Friendly Energy Generated Through A Partnership between the Shakopee Mdewakanton Sioux Community and Rahr Malting Company

Koda is a partnership between the Shakopee Mdewakanton Sioux Community and Rahr Malting Company

Rahr Malting Company

Shakopee Mdewakanton Sioux Community (SMSC)• Direct descendants of the original inhabitants of the Lower Minnesota River.

• The SMSC is a federally recognized Indian Tribe.

• The SMSC provides nearly 4,650 local jobs and is the largest employer in Scott County

• The SMSC payroll to Scott County residents was $61.4 million.

• The SMSC annually pays $20 million in payroll taxes. Scotty County residents employed by the SMSC paid more than $5.8 million in Federal taxes; and state taxes were more than $2.4 million.

• The SMSC has a tribal utility

• The Rahr Family has made malt for 159 years.

• Operational in Shakopee since 1936

• The Shakopee plant currently employs over 100 highly skilled workers

• It is the largest malting facility in one location in the world

Koda Energy 3

• Koda will build, own and operate a biomass fueled CHP plant in Shakopee MN.• The fuel will be open and closed loop biomass• 170,000 tons/year required• 50,000 tons/year available from Rahr’s by-products

• The remaining fuels will be supplied through long-term contracts with suppliers within a 50 mile radius: – Local Agri-businesses – Wood waste producers (dried) – Dedicated energy crops

• Koda’s will produce two products: – 11.5 MW of base loadrenewable energy – 125 MM BTU’s/hr of thermal energy • Rahr will purchase all of the heat generated from this system to replace its natural gas use. –> more then 1.1 million mcfsof natural gas/year

• The electricity generated from this system will be purchased by: – The partners at avoided energy costs (Partners electrical requirements are greater than Koda’s output)

– Or to outside power purchasers in need of base load and/or biomass renewable energy “Green Power”

• Natural gas price and availability – Supply in North America limited – Easily available natural gas disappearing – Higher price to retrieve • Imports of LNG will increase • Higher cost to transport • Unload facilities not yet built • Competition for LNG is global – Use of natural gas increasing projected to significantly increase • New electric generation • Industrial use – Pricing variable and increasing, and tied to oil pricing

What is Koda Energy, LLC.?

What Will the Project Produce?

Why is the project being developed?• Regional need for base load power production

• Renewable energy goals for the state

• Koda location in a high demand area for electric use – No transmission constrictions anticipated

• Electric rates are rising with gas use

4 Friendly Energy Generated Through A Partnership between the Shakopee Mdewakanton Sioux Community and Rahr Malting Company

• The biomass fuels will be supplied by Rahr, local agri-businesses and farmers with in a 50 mile radius.• Fuel -170,000 tons/year biomass required – 50,000 tons/year available from Rahr’s by-products – Local Agri-business by-products – Dedicated energy crops – Wood

Similar Plant in Thailand(Burns Rice Hulls)

Fuel Storage

Fuel Preparation 200,000 pph

Steam Boiler With SOFA

SNCR & ESP

Turbine Generator Glycol Heat

Rejection

Koda Biomass Plant

Biomass Fuels (100% Agricultural Material)

Koda Energy, LLC Biomass Plant Site

Rahr Malting Company - Shakopee Plant

Koda Energy 5

• $40 million dollar construction project in Shakopee, MN.

– Estimated construction payroll of $16,000,000.

• Create new jobs at Koda facility; $750,000/year payroll.

• $6,000,000/year for biomass purchases in local area.

• Additional job growth in area to support project.

– Fuel program

– Infrastructure support

– Estimate $1.5 million/year

• Protect 100 jobs at existing malting facility.

How can the State help Koda Energy move forward?• Timely Regulatory Permit (by early summer)

– Federal biomass tax credits lost if not operational by 12/31/2007

• Property Tax exemption for bio-mass co-generation projects

• Koda Energy LLC sales tax exemption

• Eliminate the standby energy charge from Xcel

• Ability for Koda to sell the power to it’s members without added fees

• Exempt Koda biomass fuels from “waste combustor rules”

• Develop “green credits” trading program

W hat are the environmental benefits? • Renewable base load energy production. • CO2 emission reduction of 180,0000 tons/year. • SO2 emission reductions of 500 tons/year compared against fully controlled coal plant emissions. • No HG emissions. • Reduced CO2 emissions from reduced transportation distances of by-products. • Reduced soil erosion and carbon sequestration by dedicated energy crops.

W hat are the economic benefits?

6 Friendly Energy Generated Through A Partnership between the Shakopee Mdewakanton Sioux Community and Rahr Malting Company

• MPCA air permitting in process – EAW in May – Permit approval late summer 2006

• City of Shakopee building permit – Height & building materials – March 2006 application

• Electrical interconnect study in process• Complete final engineering work - April 2006• Secure biomass fuel contracts• Construction September 2006• Operational December 2007

roject ScheduleP

Koda Energy 7

Koda Fuel Costs are

Competitive

Shakopee Mdewakanton Sioux Community2330 Sioux Trail N.W.Prior Lake, MN 55372

Key Issues Addressed in this Pamphlet

• Why is the project being developed?• What are the environmental benefits?• What are the economic benefits?• What state support is required for this project to proceed?• What is “Koda Energy, LLC.”?