IRC Sustainability Partners Customer Presentation 1/18

Sustainability as a Service®January

2018 Company Confidential, not to be reproduced or transmitted without prior express permission

Table of Contents

Company Confidential, not to be reproduced or transmitted without prior express permission2

The Problem 3-7

The SAAS® Solution 8-9

The SAAS® Service Model 10-12

The Next Steps 13-18

Appendices/Support Slides 19-28

Contact 29

Mark Goldstein, Business Partner

Sustainability Partners LLC

602.470.0389, [email protected]

http://www.sustainability.partners/

Problem & Goal


Old and decaying infrastructure is unreliable, inefficient and draining funds as a result of deferred maintenance costs.

Organizations have critical priorities they must accomplish to stay competitive which leaves insufficient funds to address costly buy needed infrastructure improvements.

Replace old equipment with new systems that will remain forever young.

Problem

Solution

Obstacle

Replacing Old with New

4

Heating Systems

Turbines, Motors/Compressors

Air Conditioning Systems


5

Water Pumps, Boilers

Roofing Sytems


6

Escalators, Elevators

Lighting & More

What’s in the Way?

The problem is not because of IRR, cost of money, payback or reliable innovation. Other priorities detour funds and

even if capital is available for infrastructure needs, the traditional process is both time consuming and costly.

Needs analysis RFI issued AuditApproval to issue RFP

Budget allocated

RFP issued/response

Vendor selectionContract awarded

Legal reviewPerformance guarantees

secured

Performance bond issued

Project plan for installation

Order materials Installation Commission

Performance verification

Pay vendorsObtain lien releases

Annual performance

audits

Ongoing maintenance


The SAAS Solution

Sustainability As A ServiceYour old becomes forever new!

SP is an “inside utility” delivering swift, safe and significant impact.

1

You don’t purchase any

product or installation

We pay for everything:

materials, installation,

maintenance & upgrades

You only pay a small

fee for usage

32


Our Solution - SAAS Service Model

Replace old with

new for zero CostChoose projects where

benefits are greatest:

lighting, HVAC, water,

motors and drives, building

envelope, etc.

Once replaced, SP keeps

these Items performing

reliably and efficiently

Infrastructure Upgrades

are paid through usage

fees or savings

SP pays to keep

new infrastructure

forever young

through maintenance,

upgrades and eventual

replacement

No required

guarantees, minimums

or multi-year contracts


SP - SAAS Service Model Process

Dramatically Collapse Project/Procurement Cycle Times

Our approach allows for aligned incentives to maximize savings, product reliability and overall satisfaction.


SP Approach

No taxpayer money or public assets are used.

Customer can purchase at SP’s cost at any time based on simple depreciated usage.

No debt or leverage is involved, so all products are free and clear.

If SP fails, customer may acquire all installed products at $1.00

In the 1st year, the customer has the right to return any product with no further obligation or termination fees.

Instead of using “lowest cost” products, we deliver products with highest performance, reliability, life cycle and lowest maintenance.

We replace old with new in months instead of years.

SP - SAAS Service Model Process

Potential

infrastructure

installation and

economics

identified

Utility agreement,

installation specific

addendum,

integrated time-line

Install cloud based

meters to validate

economics

Product,

installation

and service

provider

selection

Notice to

proceed,

SP issues

P.O.’s

Installation,

commissioning &

certificate of

acceptance

M&V of

efficiency &

performance

gains

Dramatically Collapse Project/Procurement Cycle Times

From 20 steps to 7!


Regain Your Mission Critical Focus


• Dedicate your financial capacities to critical priorities. Your core competencies are measured by serving your customers. Rarely do customers care about installing internal infrastructures for maintenance of energy and water - although essential to overall operations.

• Using limited capital and budget for items other than mission critical priorities just makes accomplishing those priorities more difficult and expensive. The allocation of capital outweighs the cost of capital and IRR discussions. Without customer satisfaction, the future is at risk.

• SP is committed to delivering utility type services inside your facilities through the creation of the first “cloud utility” and the SaaS™ model. We pay for the design, procurement, installation, metering, monitoring, maintenance, warranty and continual upgrade of equipment.

• Just like the traditional utilities, we bring our own capital and are financially self-sufficient. We provide what you need, when you need it, and where you need it. We then maintain it as long as you are a customer, creating a win-win for everyone.

How to Procure SAAS?

Our per meter billing will

be below your legislated

requirement to issue an

RFP.

• Issue an easily

authored, quickly

granted, service RFP

• Eliminate need for

product specifications,

performance bonds

etc.

We can provide copies

of RFPs that are in the

public domain.

• Use our fully-

competed cooperative

purchasing

agreement, available

to public entities in all

50 States through

PCA

• Use SP as you would

any other utility based

on monthly metered

usage bill under most

procurement or RFP

requirements

• In sole source

opportunities or where

competition is

impractical, NO RFP

is needed


How Do We Pay for It?

We have our own capital

(just like any other utility

company).

We meter all of the upgrades by

installing our own usage meters

on each major device.

We are repaid by invoicing

you directly from the new

product meters.

Cost/KwH KwH Usage Billing Total

Old Lighting $0.09 71,964 $6,476.76 $6,476.76

New Lighting Utility $0.09 30,000 $2,700.00 58% Energy Savings

SP SaaS $0.03 30,000 $900.00 $3,600.00

Total Savings $2,876.76 44% Utility Cost

You keep the benefits from reductions in utility bills, maintenance costs, disruption to

operations and improved systems!

Financially Self-Sufficient Monitor & Verify Our Upgrades Direct Meter Billing


View Your Benefits Monthly


1305 W Auto Dr

Tempe, AZ 85284

Invoice #

Invoice Date

Amount Due

Contract #

PO #

Invoice Period Start: 3/1/16

Invoice Period End: 3/31/16

"SaaS Payment Sharing "Savings Rate" "kWh Cost" for

Percentage" for Year 1 (A) (B) Year 1 (C)

Galveston County Jail 75% 1.062 $0.068 Terms

Galveston County Courthouse Interior 70% 0.927 $0.082

Galveston County Courthouse Parking Garage 65% 4.981 $0.068

Description Unit Usage (D) Baseline Usage Usage Savings (E) kWh Cost (C) Monthly SaaS

Payment (F)

Invoice Pd. Electricity Savings 69,208 kWh 142,707 kWh 73,499 kWh $0.068 $ 4,997.92 $ 3,748.44

Invoice Pd. Electricity Savings 18,368 kWh 35,395 kWh 17,027 kWh $0.082 $ 1,396.23 $ 977.36

Invoice Pd. Electricity Savings 2,873 kWh 17,186 kWh 14,312 kWh $0.068 $ 973.24 $ 632.61

$5358.41

5358.41

Sales Tax (0.00%): $0.00

$5358.41

$0.00

$5358.41

To pay online, go to https://app.bill.com/p/gsvsustainabilitypartners

"Location Name"

INVOICE

Bill To: 8003

County of Galveston - Accounts Payable 04/06/16

722 Moody Ave, 4th Floor $5358.41

Galveston, TX 77550 CM15154

[email protected] TBD

ThismonthGalvestonCounty'sutilitybillwasreducedby$7,367.39

Texas Prompt Payment

Act

Item Utility Bill

Reduction

SaaS Pmt Sharing

Percentage (A)

Galveston County Jail 75%

Galveston County Courthouse Interior 70%

Galveston County Courthouse Parking Garage 65%

Totals

Total:

Payments:

Amount Due

NOTES:

All terms in quotes are defined in Contract CM15154, Exhibit 1, SaaS Addendum 1, May 12, 2015.

(A) Percentage follows schedule as defined. Sharing percentage changes annually in February.

(B) "Savings Rate" = abs(kWh1-kWh2)/kWh2, as defined in Contract CM15154, with baseline values agreed upon on 04/ 06/2016.

(C) "kWh cost" as defined in Contract CM15154, and assessed annually from utility bills. This will be re-assessed each year from average of 12 months utility bills on the 15th of December--or as soon as complete set

of utility bills are made available. Initial year defined from "Current kWh Cost". Customer may request this rate be updated in the event of a material change in their blended rate.

(D) "Unit Usage" is metered kWh usage, logged in realtime from lighting circuits and visible to the Customer through Aquicore.com

(E) "Usage Savings" = "Unit Usage" x "Savings Rate".

(F) "Monthly Saas Payment" = "Usage Savings" x "kWh Cost" x "SaaS Payment Sharing Percentage"


Top Ten List of Benefits for You


1. 100% of the project as well as maintenance and warranties paid by SP

2. No CAPEX or OPEX

3. No risk customer-friendly service agreement which is cancelable at anytime.

Customer buy out option upon 30-day notice

4. Off-balance sheet transaction; no effect on debt capacity, bond ratings

5. Unique, innovative and tailored to your project and financial needs

NOT a loan, lease, financing, bond, ESCO, nor ordinary sharing-agreement, or financial statements

6. Your infrastructure stays Forever Young.

SP upgrades equipment at no cost when new technology increases efficiency

7. Service agreement approach simplifies procurement

Cooperative purchasing agreement option avoids costly and time-consuming RFP process

8. Benefits include reducing carbon footprint and increasing environmental stewardship.

9. Avoids costs as a result of SP customized installation and stewardship of infrastructure systems

10. As a result of SP investment and maintenance of your infrastructure, there will be reduced energy-

related operating expenses. Furthermore, an updated clean and efficient look enhances overall value

of facilities while enabling you to refocus capital on allocating funds to critical needs and innovation.

Types of Projects We Can Handle

Boilers, chillers and refrigeration

HVAC retrofits; building envelope

energy efficiency

Waste systems

High-efficiency motors/starters

Smart motor controls (VFD)

Refueling stations (CNG/LPG)LED lighting

Smart/precision irrigation systems

Building envelope upgrades

Smart plumbing controls; Low flow

water-efficiency solutions


How Can We Move Forward?

Meet with our team

With all details defined,

execute notice to proceed

Installation,

commissioning

and ongoing

maintenance by

SP

Sit back and let us do

the work

Enjoy the

benefits!

Show us an important problem

you need solved

Define integrated time-

line & execute

agreements

Install sub-meters and

establish baseline usage

Why implement only some of your infrastructure projects, when together, we can implement them ALL!


Appendices/Support Slides


SP Value 20

Additional SAAS Benefits 21

Program Comparisons 22

SAAS Service Agreements 23

Monitoring & Verification Sample 24

Project Profiles 25-27

ESCO vs. SAAS Cost Comparison 28

SP Provides Extraordinary Value

▪ We DO NOT put any mark-up on the products, installation costs, maintenance or cost of capital.

➢ We only purchase highest reliability and performance materials, not lowest cost.

➢ We are agnostic to vendor, installer, maintainer or source of capital.

➢ Due to our lean procurement process, the vendor life-cycle cost to us is far less than you would pay.

➢ Installers deal directly with us and not a general contractor. Maintenance providers deal directly with you even though we pay.

▪ We receive no incentives or fees for the signing or completion of a customer project.

▪ Unlike ESCOs that are fully paid upon installation completion and add on 30-40% margin on top of the product, installation, engineering, etc., our payment is only 5.75% of your monthly usage charges.

▪ What this means is that no matter the device, the location, or the application, it is always priced the same. Your project could be $100K or $100M - pricing is the same.

▪ This gives you, the guardian of stakeholders

or taxpayers needs, complete confidence and

peace of mind with the utility agreement you

sign.

▪ Have we proved that we can permanently solve your problem?


Additional SAAS Benefits

21

1. Costs to maintain decades old

equipment far exceeds that of brand

new equipment

2. SP pays for it all

3. Eliminate management time cost to

arbitrate amongst CAPEX and OPEX

priorities

4. Reduce cost of damage due to old

equipment affecting other

infrastructure

5. People taking pride in their facility

6. Staff feels that management cares

7. Improved safety for personnel and

reduced environmental footprint

Program Comparisons

This is NOT a loan, lease, financing agreement, bond, ESCO, installment purchase, rental, or ordinary sharing-

agreement; we pay 100% of materials, installation, maintenance and upgrades. You are protected from

economic risk and lower your infrastructure costs at the same time.

A lot of companies offer to help you implement energy savings solutions,

but how many also offer to pay for them?


SAAS™ Service Agreements -

Two Inter-related Documents

Utility Agreement Terms & Conditions5 pages long, no obligation, contracts month-to-

month, defines relationship of what you want for

your customized needs

Utility Agreement AddendumProject specific, defines potential

savings and benefits sharing schedule


Monitoring & Verification -Sample Project: Selman Elementary School

Peak due to

weekend

installation

Post-

installation

usage

Pre-installation

baseline usage

66%

Reduction

in kW use


Customer Profile - Galveston County, TX

LED Retrofit


Project FactsLED lighting retrofit of nearly 7,000 lights

Scope of work involved replacing T8 fluorescent

tubes/ballasts with clear lens LED tubes

w/external drivers; replacement of CFLs with LED

“corn cobs”

Project involved full lighting retrofit of three

facilities including county courthouse, justice

center and parking garage

Existing fixture were retained to speed installation

and minimize tenant disruption

Project expected completion: October 2015

SP SaaS BenefitsStreamlined process for energy upgrade projects;

reduced project cycle time by up to 18 months

Reduced energy costs without impact on County

operating budgets

SaaS Service Agreement structure enabled use of

PCA Interlocal contract

Improves County’s environmental footprint by

consuming less energy and saving natural

resources

Eliminate maintenance & repair costs

College Prospective Profile -Point Loma Nazarene University (San Diego, CA)

The Customer

• Private Christian liberal arts university, est. 1902

• FTE ~2,700 Students

• Top 20 ranking among western regional colleges

About The Opportunity

• Project champions included Pres., VP Finance &

AVP Ops

• Identified need for campus energy efficiency

projects

• University had just finished $25M capital

campaign for new 32Ksf science building so little

new spending

• Sustainability angle was important driver for

PLNU

Project Scope• Phase I SOW involves 2,700+ fixtures, over 6,500

lamps across 6 structures (library, commons, gym,

parking, etc.)

• Phase II LED retrofit of Mission Valley campus

(~1,000 fixtures) and remainder of main

campus(~3,000 fixtures)

• Smart irrigation for PLNU sports fields (~$50K)

• Aging HVAC infrastructure has room for

incremental modifications


College Prospective Profile -Maricopa Community College District (AZ)

Prospective Customer• One of the largest Community College Districts in US

• 10 Campuses plus 2 Skills Centers

• Serves 265,000 students annually

About The Opportunity• Project champion: Associate Vice Chancellor for

Capital Planning

• Budget challenges; District defunded by $60M since

2009

• Aging infrastructure…half of all campuses

established in 1960’s

• Strategically address/prioritize colleges where needs

are greatest

Potential Project Scopes• Phoenix Community College - Proposed LED retrofit

of exterior bldg., parking facility, walkway lighting

• Mesa Community College - Level I audit in process of

46 structures for proposed LED lighting, smart

irrigation

• Glendale Community College (North campus) -

Proposed parking facility lighting retrofit to improve

safety and reduce energy OpEx


ESCO vs. SAAS Cost Comparison


Contact

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Environment

IRC Sustainability Partners Customer Presentation 1/18