Laidlaw Energy Group, Inc.(fka LLEG)

[Grozny]

I posted this awhile back: LLEG VALUATION

LLEG - Renewable Energy Certificates will bring huge additional revenues to LLEG's Berlin project:

http://www.dsireusa.org/incentives/incentive.cfm?Incentive_Code=NH09R&re=1&ee=1

http://www.epa.gov/grnpower/documents/gpp_basics-recs.pdf

According to the State of New Hampshire's Renewable Portfolio Standard, LLEG's Berlin project will produce (65MW)*(365 days/year)*(24 hours/day) = 569,400 MWh of electricity per year. 1 MWh = 1 Renewable Energy Certificate.

Therefore, by NH's standard, LLEG's Berlin Project can sell 569,400 Renewable Energy Certificates per year @ $60.92 per Certificate. LLEG will generate $34,687,848 USD per year in revenue just from RECs alone.

The 65MWh of power will also be sold per a Power Purchase Agreement. PSNH (NH's utility provider) sells power at $.151115 per kWh. Assuming that PSNH buys LLEG's power at half what they charge consumers ($.0755575 per kWh), LLEG will generate $43,022, 441 USD per year in revenue from sale of electric power.

That brings LLEG's total estimated revenue to $77,710,288 USD per year. The power purchase term sheet lists the proposed Power Purchase Agreement as a 20 year contract (http://www.biomassmagazine.com/article.jsp?article_id=2088 & www.psnhnews.com). This contract (under current REC and electric rates) would supply LLEG with $1,554,205,760 USD in revenue for the 20 year life of the contract.


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Separate portfolio standards are required for energy resources classified as "Class I," "Class II," "Class III" and "Class IV."

Class I - New Renewable Energy: electricity from any of the following, provided the source began operation after January 1, 2006:

Wind energy;
Geothermal energy;
Hydrogen-derived from biomass fuels, biogas, or landfill gas;
Ocean thermal, wave, current, or tidal energy;
Biogas or landfill gas;
Eligible biomass technologies meeting air emissions requirements ;
Solar electric not used to meet Class II, or customer-sited solar water heating that displaces electricity
The incremental new production of electricity in any year from an eligible biomass, eligible methane source, or hydroelectric generating facility of any capacity, over its historical generation baseline
The production of electricity from Class III or IV sources that have been upgraded or repowered through significant capital investment.

Class II - New Solar: electricity from solar technologies, provided the source began operation after January 1, 2006.

Class III - Existing Biomass/Methane: electricity from eligible biomass technologies having a gross nameplate capacity of 25 megawatts (MW) or less, and methane gas. The source must have begun operation prior to January 1, 2006:

Class IV - Existing Small Hydroelectric: electricity from hydroelectric energy, provided the facility began operation prior to January 1, 2006, has a total nameplate capacity of 5 MW or less, and meets other environmental protection criteria.

Electric providers must meet the standard according to the following compliance schedule:


2008 2009 2010 2011 2012 2013 2014 2015 2025

Class I 0.0% 0.5% 1% 2% 3% 4% 5% 6% 16%(*)

Class II 0.0% 0.0% 0.04% 0.08% 0.15% 0.2% 0.3% 0.3% 0.3%

Class III 3.5% 4.5% 5.5% 6.5% 6.5% 6.5% 6.5% 6.5% 6.5%

Class IV 0.5% 1% 1% 1% 1% 1% 1% 1% 1%


* Class I increases an additional one percent per year from 2015 through 2025. Classes II, III and IV remain at the same percentages from 2015 through 2025. Provisions for exceptions and delays are described below.

The New Hampshire Public Utilities Commission (PUC) has established a renewable energy certificate (REC) program utilizing the regional generation information system (GIS) of energy certificates administered by ISO-New England and the New England Power Pool (NEPOOL). RECs from customer-sited sources are assigned to the system owner, and behind-the-meter generation located in New Hampshire is eligible to participate in the RPS. Unused RECs from the prior two years, or RECs from the first quarter of a subsequent year, may be used to meet up to 30% of a given year's compliance targets. Electric utilities may request to enter into multi-year contracts for RECs or electricity bundled with RECs to meet the RPS. Rural electric cooperatives may enter into multi-year contracts without approval from the PUC. Note that the PUC has established a method to measure electricity displaced by solar water-heating systems.

To be eligible for RPS compliance, renewable energy generators must be within the New England control area, unless the source is located in a control area adjacent to the New England control area and the energy produced by the source is actually delivered into the New England control area for consumption by New England customers.

Compliance reports are due to the PUC by July 1 of each year from each electricity provider. In lieu of meeting the portfolio requirements, an electricity provider may make payments to a new renewable energy fund established by this law to support renewable energy initiatives. Class II moneys will only be used to support solar energy technologies in New Hampshire. The 2009 rates for each megawatt-hour not met for a given class obligation through the acquisition of certificates are as follows:

Class I - $60.92
Class II - $159.98
Class III - $29.87
Class IV - $29.87

The PUC will adjust these rates by January 31 of each year using the federal Consumer Price Index.