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4. us solar subscription proposalf{ p k I PROPRIETARY AND CONFIDENTIAL U'OLAR BEYOND THE ROOFTOP S U N S C R I P T 1 O N S M P R O P O S A L: CITY OF SCANDIA SCANDIA June 29. 2017 Page 12 COVER LETTER June 29, 2017 Neil Soltis, City Administrator City of Scandia 14727 209th Street Scandia, Mn 55073 Dear Neil, Thank you for the opportunity to present this offsite solar and SunscriptionSm introduction to you and your team. We at United States Solar Corporation ("US Solar") are thrilled to help the City of Scandia lock in the significant, long-term savings opportunity currently available under Minnesota's community solar program. US Solar is a turnkey solar developer and owner/operator. We coordinate all project details — development, permits, finance, construction, management, insurance, maintenance, and monitoring. The enclosed proposal includes details about our company, our strategic alliance partners, and our Sunscription proposal. The US Solar team provides an unparalleled combination of broad experience and strong local roots. Our team has a proven track record of building and financing distributed solar projects. US Solar's principals have developed and financed commercial solar projects and residential solar programs with a notional value of over $1 billion. We ensure that each one of our solar projects is built to the highest capital markets standards in order to maximize the savings available to our subscribers. Please contact us with any questions, comments, or points of clarification. We look forward to working with you. Sincerely, Reed Richerson - COO United States Solar Corporation 100 N 6th St , Suite 218C Minneapolis, MN 55403 W: (612) 260-2230 C: (916) 704.2720 E: reed.richerson@us-solar.com This letter is intended solely as a basis for providing indicative pricing and terms and for engaging in further discussion It does not evidence any agreement to make an investment or any other binding commitment on the part of US Solar or any other party. Such investment or other binding commitment will arise only upon the execution of definitive, binding agreements. Any subscriber transaction would be contingent on prior credit review. US Solar requests that the recipient keep the terms of this letter confidential U!5/OLAR Page 13 SUNSCRIPTIONsm Sunscriptionsm [suhn-skrip-shuhn] noun 1. a contract with US Solar designed to provide you with significant, long term savings 2. an opportunity to enjoy solar benefits without the planning and logistical hassles of an onsite solar project 3. a way to exercise your new right to choose an alternative energy partner The Solar'Rewards Community program recently launched in Minnesota is the first scalable community solar program in the US and has immediately established the country's smartest solar regime. Schools, towns, businesses, and nonprofits throughout the Xcel service territory have embraced the opportunity to fix costs for the long term by "subscribing" to a solar garden and benefitting from cost efficiencies of scale, while also avoiding the siting, construction, and maintenance complexities of an onsite system. US Solar's ability to connect subscribers with solar projects located offsite allows us to develop projects of the ideal scale at ideal sites, where we can optimize the orientation, spacing, and tilt of our solar modules to deliver the most solar energy at the lowest cost. Now, US Solar is offering the City of Scandia the opportunity to lock in savings for years to come with a Sunscription Agreement. HOW COMMUNITY SOLAR AND A SUNSCRIPTION WORK • US Solar builds a local Solar Garden at an ideal offsite location. • The Solar Garden produces energy that is delivered to Xcel. • Xcel continues to deliver Subscriber all electricity required onsite. • Xcel credits Subscriber's bill for value of Solar Garden energy. Subscriber Subscriber subscribes to Solar,," Garden r US Solar delivers the solar energy to Xcel Xcel delivers energy and credits Subscriber bill Xcel U�'LAR Page 14 HOW DO YOU SAVE MONEY:,, We estimate the City of Scandia would gain a net value of $136,944 for no upfront cost. By contracting for a Sunscription with US Solar, you can expect to save money over time as the Bill Credit rate that Xcel pays you increases higher and higher above your Sunscription rate with US Solar. The tables below show the expected savings the City of Scandia will achieve based on a Sunscription sized to 127,771 kWh, assuming 75,888 kWh are allocated to General Service rate class meters and 127,771 kWh are allocated to Small General Service rate class meters. The expected savings also assumes the relevant Applicable Retail Rate ("ARR", described below) increases at 2.5% per year. With your Sunscription in place, Xcel will continue to deliver you all of your grid electricity, with no interruption of service. For an example of how a Bill Credit will appear on your utility bill, please see Appendix A. Our subscribers receive Bill Credits that are valued using two components: the ARR, equal to the average revenue per kWh that Xcel received in the prior year, plus a financial premium representing the value of the solar renewable energy certificates ("RECs"), which are sold to Xcel. For a community solar project of over 250 kW (like most US Solar Gardens under development), the REC enhancement is fixed at $0.02/kWh. As shown in the table below, a subscriber to a typical US Solar Solar Garden will receive the "Enhanced Bill Credit" rate $0.1199/kWh for General Service meters and $0.1444/kWh for Small General Service meters. Selling the RECs to Xcel increases the value of Bill Credits you will receive from Xcel. Your Sunscription with US Solar supports the development of nearby Solar Gardens, and secures your right to receive payments from Xcel for supporting local renewable energy. You can expect a Sunscription to save you money simply because the Bill Credit rate you receive from Xcel is expected to be higher than your Sunscription rate. For an overview of pricing and Sunscription product types, see Our Proposal to the City of Scandia below. U5/ Page 15 SOLAR'REWAROS COMMUNITY PROGRAM Section No. 8 Z' Raised Sheet No 64 AVARABRrtY Available to arty Residential, Commerctal, and Industrial datomerwho elects to offset electric charges through a subscription in a company -approved community solar garden. RATE The Bill Credit Rate below applicablelo the subscriber is dependent on the customer class underwhichthesubscriher receives service end the Bill Credit Type selected by the garden operator in the tariffed Standard Contractfor Solar'Rewards Community Customer Class Bill Credit Type _ SM -Credit Rate per or Energy Delivered to Company Residential Service Standard SO 12 Enh4nzetl - role, Gardans r ZSG K -V (ACI " 145S6 Enhanced lar Gardens s 260 KW iACi S016596 SMall General Semen Standart SO, 1222 heneed- Saler ardens s 2 50 RW FAC I SG 14 22 nhanc So ror Gordens4 260 K-V(AL7 General Service nn ar anted— _ tar ardens> Wl tt 1 so i 1140 anted —. fat 'waens t 260 KW t.AL.i SD Q740 Page 16 OUR PROPOSAL FOR CITY OF SCANDIA At US Solar, we strive to offer subscribers not just savings, but also flexibility. While the great majority of our subscribers find our Flat Rate Sunscription to offer the best value, we are happy to work with you in customizing a product that works best for you. FEET. E 301E OF PIKE© ILI SUN:SCRIPTIONsm RATE Flat Rate Sunscriptior • The rate you pay US Solar is flat, with absolutely no escalator. • The rate is set at about today's Bill Credit Rate. The rate stays flat and the Bill Credit Rate is expected to increase. • We are offering the City of Scandia a Sunscription Rate of $0.1199 per kWh for General Service Rate Class Meters and $0.1444 per kWh for Small General Service Rate Class Meters. Fixed Rate Sunscription • Expect about 15% year one savings, depending on rate class and usage. • Over time, the rate steps up with a modest escalator that is fixed on day one • This structure is used by the majority of solar projects in the US today. • We can offer City of Scandia Fixed Rate Pricing upon request. With either structure: • You reduce the impact of future utility rate spike surprises. • The more utility rates increase, the more you save. • You lock in a large portion of your operating costs for 25 years. U,4y,`V AP Page 17 INSIGHT INTO YOUR OFFSITE SOLAR GARDEN Offsite solar solutions save you the logistical issues of planning, constructing and maintaining a solar project on your property. However, we can provide you with the same ability to view and monitor the Solar Garden, as you would expect from an onsite system. US Solar is designing a customized platform for our Solar Garden subscribers, one of the first platforms designed specifically to monitor community solar projects. Our online portal will not only provide subscribers with performance information once systems are up and running, but it will also provide you with status reports regarding project development and construction. U5 System Name IL� wor,W IYim F*$ 2$ Tug wed Thu Kqk sr -f C11141F tva Y`: x^F r.aM Tnw Pr Cs�w.laiY1S,W T.rM I.ur7/r r;...+iMa.�.�}.r. 83A Punwi It ,i~ 215 TCG ONOV4 2,358.3 6,071 RAW GIVWK SAUJK RAI 141"Aw A'abvcu Vivatictio- 1 Ckh Wil': as 366.0 , o 942 Tata VAC 4 286.8 J8 �'fµfliu We can also provide you with a customized monitoring portals, allowing you to display information regarding the Solar Garden performance — energy and environmental — on video monitors or kiosks anywhere in the company. These customized portals can be tailored to inform and educate your executives, employees and customers about the performance and benefits of the Solar Gardens you are supporting. UP'i-IONAL ADDED BENEFIT: EMPLOYEE SUBSCRIPTIONS While a Sunscription has long-term, financial benefits for City of Scandia, US Solar also has the potential to provide long-term benefits to its employees. US Solar is preparing to launch a residential Sunscription product in association with select affinity partners. We would be thrilled to offer an exclusive period for your employees to subscribe to a Solar Garden for no upfront cost, saving them money and driving employee engagement and loyalty. If this opportunity interests you, US Solar can work with your team to schedule "Lunch and Learn" or similar events to explore the benefits Solar Gardens can provide your employees. We are also happy to work with you on interesting ways our Sunscription may fit within your overall employee benefits portfolio. Page 18 FREQUENTLY ASKED QUESTIONS Q: How much does it cost upfront? •A: Subscribing requires no upfront payment whatsoever. Is my . - - — •A: Your Sunscription is fully transferrable. You can allocate subscription capacity to a new building of yours within Xcel Energy's service territory, or you can transfer it to another eligible Xcel Energy customer. Q: What happens in the winter or -- -A: Our Solar Gardens can produce energy in all seasons and all weather. Solar Garden output will vary from day-to-day and season -to -season, as does your electric usage. Your Solar Garden Sunscriptionsm will be sized to account for this variability and designed to greatly reduce, or even eliminate, your utility bill over the course of each year. -A: Solar Garden energy is delivered directly to Xcel's grid, not your facility. Our Solar Gardens are simply one of the sources feeding the grid, and you will continue to receive 100% of your electricity from Xcel with no interruption of service. P • • s - • • • _T: • •A: Your historic, annual electricity usage determines the size of your Sunscriptions"" This is another advantage - our Solar Garden subscribers receive solar benefits that are not limited by the size and/or quality of their roof. Q Q: Ar tMVMM Ar • — •A: US Solar and its investor partners will receive the tax credit benefits for funding the capital costs of each Solar Garden, lowering the Sunscriptionsm rates we are able to offer subscribers. Q: When .. I start seeing bill credit.- -A: Once your assigned Solar Garden begins delivering energy to the grid, you receive bill credits from Xcel Energy and a bill from US Solar for the same amount of kWh. We will notify you as that date approaches and keep you updated along the way. US SOLAR: EXPERIENCE AND QUALIFICATIONS U /.O -LAR Official Sole Partner UJ / OLAR Page 19 BROAD EXPERIENCE: THERE IS NO SUBSTITUTE US Solar is a turnkey solar developer and owner/operator. We seek to make solar energy accessible with simple, money -saving, long-term solutions that are as good for our partners as they are for the environment. US Solar's management team brings a wealth of solar leadership and expertise from the commodities divisions of industry-leading firms such as Morgan Stanley and Bear Stearns, as well as the project development teams of BayWa R.E. and REC Solar. Community solar development and finance requires a wide range of skills that few solar companies possess. US Solar is uniquely positioned with deep experience in all facets of this market segment. Additionally, US Solar draws on a unique set of strategic partnerships. US Solar's platform is comprised of best -in -class providers within engineering, procurement, and construction; solar equipment manufacturing; energy management; legal services; development; and finance and investment. Project Developmci The US Solar team has extensive experience in solar project development. This, along with support from our strategic alliance and partners, allows for the delivery of large-scale projects — on time and within budget. Community Solas US Solar has broad experience in the siting, development, and subscription of community solar projects in Minnesota. Our principals have worked with Fortune 500 companies, municipalities, public and private schools, and utilities across the country. We have contracted with a number of large counties, towns, school districts, and corporations in Minnesota for Solar Garden subscriptions. Project Finance: Less experienced solar providers frequently underestimate the challenge of financing the construction and operation of a portfolio of solar projects. US Solar is currently developing and financing over $150 million of projects in Minnesota, and the US Solar principals have raised project capital for projects and programs with a notional value of over $1 billion. U_AR A Page 110 LEADERSHIP TEAM The US Solar team is truly one of the most experienced teams in Minnesota. Our successful experiences span across the utility -scale, commercial, and residential markets. At the intersection of successful experiences and deep alliance partner relationships, US Solar is uniquely positioned to provide City of Scandia with the highest value. Furthermore, our Minneapolis office is comprised of professionals who were raised in Minnesota, understand the community, and have been involved in Minnesota community solar from the very beginning. Martin Mobley, CEO. Marty started US Solar after forming and leading the Solar Desk at Morgan Stanley Commodities, where he led the group into the US commercial market (-40MW from —100 rooftop/ground mount/parking canopy projects), the US residential market (three separate US residential financing programs) and the Ontario market (-30MW in from 75+ rooftop projects). Prior to Morgan Stanley, Marty was an attorney at McDermott, Will & Emery in Washington, DC. Robert Oden, EVP. Rob brings broad experience in energy tax structuring and climate markets. He has served as Director of Business Development at American Capital (Solar) Energy and as a Managing Director at Bear Stearns in New York and Houston, where principal energy investments included over $300 million in tax -credit qualified energy assets. Reed Richerson, COO. Reed brings 8+ years of solar industry project development experience in multiple market segments. He previously served as the VP of Sales and Business Development for BayWa re. and the National Key Account Manager for Upsolar America. Notable accomplishments include: land acquisition and development portfolio of over 180 MW, EPC of over 56 MW, and acquisition/co-development portfolio of 21 MW. Reed is a Minnesota native and has a BS in Economics from the University of Minnesota. a Page X11 STRATEGIC ALLIANCE PLATFORM An Alliance of Partners with a History of Success PROJECT FINANCE [Mbank US Bank, headquartered in Minneapolis, is a leading Renewable Energy Tax Credit investor in the US solar market, having deployed nearly $3 billion in support of over $6.3 billion in renewable energy projects in the United States. KyBank OMN Key Bank Capital Markets® is a premier provider of investment banking services to the electric power sector, working with investor-owned utilities, electric cooperatives, and independent power producers. Key has financed over 9,000 MW of renewable energy projects in the United States and has helped raise over $82 billion in debt and equity financing. ENGINEERING, PROCUREMENT, AND CONSTRUCTION; O&M groSalar groSolar is one of the largest photovoltaic system integrators in the world. groSolar plans, builds, finances, and operates solar power stations in the multi -megawatt range all over the world. NEXT STEPS While this proposal may seem too good to be true, there is a catch - subscription demand tremendously outweighs subscription capacity. We can provide a Sunscription Agreement to go over more specifics. Please contact us with any questions, comments, or feedback you may have in response to this proposal Thank you — we look forward to providing the City of Scandia with significant, long-term energy savings through a Sunscription. U,5/ APPENDIX A: EXAMPLE OF BILL Kao Page 112 Xcel has provided Minnesota ratepayers with this example of a Bill Credit (note that it shows a hypothetical subscriber that is a gas and power customer with Xcel's Public Service of Colorado subsidiary, not Northern States Power) Xcel Energy- ........... ■♦ ■ir■.f. IlYV7.V SUMMARY OF CIgUtENTCHARGES /moaer.V13 480 kW - f ilecuKily Semx 1G/01l13-10/:Y1/13 7460 kWh !16749 a<a N3lural Ca: Service 10/01!13 10/37/13 2161henns $17939 P.vnenr Charnev EYEI M QUESTIONS ABOUT YOUR RILL? 2e uu w[$itU uL4u>Ligy GR Fnati m ar Cus�rtMMvimyDsot+xrergy.� C9 241m n a day. I dvys a woo ITaa;kr 18W419;4993 Ilnanrq §ryrairad I � d9SJ9Y9 fspatld. 18X11,67 91 M 0r •w2 is A, ACH fNIMY PU WIX 9 CAU CIAO H9 A?W I" StAYI[F AbpliSa NEzt9EA0 DAlE .P ELECTRICITY SERVICE DETAILS Ptt£wSH NUMINEW _ INVOICE NUMUL & facility Hun -Su. Der Windwurce Charge Trans Cosi Ad; II-, Commodity AAj DerN d Side Mgmt Crest Purch Cap Cur Adj Ilenev, Tnergy Std Adj ]ISA sol SENVICEADD(USS. Atr16EAOD.AIE: L..-L"I -114 Will Rol" XcelErwW Solar'IY•ward: Cuntrnmity Solar Produ:tidl Gtech Solar Noduction {%wA Soprernber 2013 CR E411. IEf [ NL4.AdUh Yf7;'. `; AIF NATURAL SAS ADJUSTMENTS DESQIPTON VALUE UNITS po" WN VAIIIE UNITS Ihemi Multiplier 752 cef X0656366 ATE "W— NATURAL GAS CHARGES RATE R6 RetWeadel btSMPTION USAtf UWtS WE... service B facility $14}31 Usage Charge 716 therms m-106767 $2339 Interstate Apetme 2 I 1horts $0034/40 $1630 Natural Gas 4 (111 716 therms s0 366060 $8339 ToW y $139.31 Solar'IY•ward: Cuntrnmity Solar Produ:tidl Gtech Solar Noduction {%wA Soprernber 2013 CR 100 N 67h Street, Suite 218C 612.294.6978 Minneapolis, MN 55403 www.us-solar.com SUNSCRIPTIONsm OVERVIEW Sunscription Intruciuc tion US Solar's flat -rate Sunscription allows the City of Scandia to save an estimated $136,944 by locking in its energy rate for the next 25 years. There is no upfront cost. Savings for General Service Rate Class Meters: Savings for Small General Service Rate Class Meters SubmibW1 = I-75, .580 75,131 74,765 74,38. 7.298 348,4'55 339,' 1, 7,6 4 E r•WE hnm ru—, .147906 0.15718 1 5 ulb445 5 .157 A. 18127 4.1 - 921486 S 0 .4046 5 0.19485 Raw 9e ( ) U21 . 44 1 .1 0.7444 4") (0.1444 0.1444 .444 (0.1 ( 1444) 0 1444 Per Kwi1 0. - .9068 0.0101 S 9.0134 9.0 f D. d9 0.0479 0.0705 9ir�5 {r 0505 WYallra6 272 1 3 512 is 768 j i 1,909 I S 1,255 172 S 17 ,07,7 24,534 S 32,626 63 2.5% exaMbon to ARR 0.5% damn x1 - energy — - Existing Subscribers Our agreement has been vetted by dozens of public entitle; have signed the same agreement we offer to you: • City of St. Cloud • • City of Minneapolis • • City of Chanhassen • • City of Rogers • • City of Robbinsdale • • City of Edina • • City of St. Anthony • • Met Council Transit • Cast-Eenefit Analvsis 2017 Bill Credit Rate for General $0.12296/kWh Service Rate Class Meters ! $0.14798/kWh 2017 Bill Credit Rate for Small General Service Rate Class Meters 30 -Yr Average Annual Escalator 2.75% Sunscription Rate -for General $0.1199/kWh Service Rate Class Meters Sunscription Rate for Small $0.1444/kWh General Service Rate Class Meters Sunscription Annual Escalator 0% Here is a list of public entities that Met Council Enviro Hopkins Schools Sartell-St. Stephen Schools Buffalo -Hanover -Montrose Schools Becker Schools Orono Schools Robbinsdale Schools University of Minnesota FEEL THE JOY OF PREDICTABILITY, — V' Z u'I