Satisfying State & FederalSatisfying State & FederalRenewable Energy StandardsRenewable Energy Standardswith Biomasswith Biomass

Scott MillerPrice BIOstock, Marketing DirectorDecember, 2009

Victoria, Australia

Paper & Pulp

PBS Headquarters

14 million tonsper year

Price BIOstock

The Price Companies business model

Suppliers receive:– A fair price for feedstock– A preferred delivery point

Client specifies:– Woodchip or other product– Site of the receiving/processing yard

Price provides:– Feedstock procurement and delivery– Design/construction of receiving yard– Management of preparation facility

OverviewOverview

1. State and Federal RPS and RES legislation

2. Bioenergy options available to power companies

and utilities

3. Factors affecting the price of wood

4. Handling options - buying chips vs. siting wood

yards

State renewable portfolio standard

State renewable portfolio goal

Solar water heating eligible *† Extra credit for solar or customer-sited renewables

Includes separate tier of non-renewable alternative resources

WA: 15% by 2020*

CA: 20% by 2010

☼ NV: 25% by 2025*

☼ AZ: 15% by 2025

☼ NM: 20% by 2020 (IOUs) 10% by 2020 (co-ops)

HI: 40% by 2030

☼ Minimum solar or customer-sited requirement

TX: 5,880 MW by 2015

UT: 20% by 2025*

☼ CO: 20% by 2020 (IOUs)10% by 2020 (co-ops & large munis)*

MT: 15% by 2015

ND: 10% by 2015

SD: 10% by 2015

IA: 105 MW

MN: 25% by 2025(Xcel: 30% by 2020)

☼ MO: 15% by 2021

IL: 25% by 2025

WI: Varies by utility;10% by 2015 goal

MI: 10% + 1,100 MWby 2015*

☼ OH: 25% by 2025†

ME: 30% by 2000New RE: 10% by 2017

☼ NH: 23.8% by 2025

☼ MA: 15% by 2020+ 1% annual increase(Class I Renewables)

RI: 16% by 2020

CT: 23% by 2020

☼ NY: 24% by 2013

☼ NJ: 22.5% by 2021

☼ PA: 18% by 2020†

☼ MD: 20% by 2022

☼ DE: 20% by 2019*

☼ DC: 20% by 2020

VA: 15% by 2025*

☼ NC: 12.5% by 2021 (IOUs)10% by 2018 (co-ops & munis)

VT: (1) RE meets any increasein retail sales by 2012;

(2) 20% RE & CHP by 2017

29 states & DChave an RPS

5 states have goals

KS: 20% by 2020

☼ OR: 25% by 2025 (large utilities)*5% - 10% by 2025 (smaller utilities)

1. State Renewable Portfolio Standards (RPS)

DOE / EERE DSIRE website - August 2009

August 2009

State resources to meet RPS mandates

PEW Center on Global Climate Change

Solar

WindBioPower

Pulp & Paper

+$

‘70’s “Cradle-to-grave” material value cycle

Natural Gas Boilersfor Power &Biomass Conversion

Wood Biomass& Grid Power

Wasteto

Landfill

+$

Waste asan EnergyFeedstock

- Black liquor- Sawdust- Wood residues- Bark

‘80’s “Cradle-to-cradle” bioenergy value cycle

Tomlinson Boilersfor Power &Biomass Conversion

Wood Biomass

Pulp & Paper

6GW by 1990’s56% plant power

2. Biomass Power options

Biomass power plant– Wood chips and biomass - <75MW per plant

Logistics Challenge

Green wood is 50%moisture

Hauling costs about$.12 per ton per mile

Feedstock deliveriesmust be to the plant

The greater thevolume, the moreoptions needed

The number oftruckloads/day

75 Miles

50 Miles

25 Miles

One dot = 5,000 acres

Federal land

23,000,000 acresvs. 7,300,000 acres

Before EISA RFS

After RFS

Georgia’s qualifying biomass

USDA Forest Service - Forest Inventory and Analysis National Program

USDA Forest Service - Forest Inventory and Analysis National Program

One dot = 5,000 acres

Federal land

19,000,000 acresvs. 500,000 acres

Before EISA RFS

After RFS

California’s qualifying biomass

Thinnings & salvage

6 of the 7 worst fire seasons

National Interagency Fire Center, 2008

Cone Fire - 2002

U.S. Forest Fires1960-2007

2. Biomass Power options

Biomass power plant– Wood chips and biomass - <75MW– Pellets - wood or energy crops– Syngas replacement for natural gas

2. Biomass Power options

Biomass power plant– Wood chips and biomass - <75MW– Pellets - wood or energy crops– Syngas replacement for natural gas

Co-firing -– Biomass & energy crops -

<15% of feedstock volume

2. Biomass Power options

Biomass power plant– Wood chips and biomass - <75MW– Pellets - wood or energy crops– Syngas replacement for natural gas

Co-firing -– Biomass & energy crops -

<15% of feedstock volume– Torrefied pellets -

up to 100% of feedstock volume

3. The cost of wood - industry “byproducts”

There is very little valueless waste

– C&D waste

– Understory on federal lands

– Logging waste

– Sawmill byproducts

– Papermill byproducts

– Urban and yard waste

The cost of harvested wood - stumpage prices

BioPower

Example: $25/ton biomass delivered to mill

$13Harvesting

$5Freight

$7Stumpage

Procurement

Still using the same methods that have beentime tested by the forest industry:

A combination oflong and short term agreements

as a baseand purchasing on the open market

for the rest.

4. Handling - Receive from chip handlers

Buy from chipmill suppliers +$10 Byproducts from solid wood products mills -$5 Grinders/chippers in landfills, right-of-ways, roads -$10 Field chippers in the woods - only 1 of 40 loggers

4. Handling - Set up a woodyard with chipping

All chip handlers

Every logger in haul distance

Lessons to be learned

There is very little valueless waste

Location and feedstock flexibilitydetermine wood cost

Professionals pay for themselves andhelp ease investor worry

A chip buying facility is vulnerable toloss of suppliers and low volumes

>1,000 tpd - Plant should includechipping capabilities

Scott MillerMarketing Directorscott@pricebiostock.com818-439-0239

Scott MillerPrice BIOstock, Marketing DirectorDecember, 2009