STATE OF VERMONT

PUBLIC SERVICE BOARD

Petition of Beaver Wood Energy Pownal, LLC )

for a Certificate of Public Good, pursuant to 30 )
V.S.A. § 248, to install and operate a Biomass )
Energy Facility and an integrated wood pellet
manufacturing facility located north of the old Docket No
)
Green Mountain Racetrack in Pownal, Vermont )
to be known as the “Pownal Biomass Project”

PRE-FILED TESTIMONY OF
TED WRIGhT VERRILL

ON BEHALF OF
BEAVER WOOD ENERGY POWNAL, LLC

October 25, 2010

The purpose of the pre-filed testimony of Mr. Verrill is to support Petitioner’s reques
t to
commence limited construction activities in December, 2010

(
 TABLE OF CONTENTS

1. Introduction Introduction

2. Project Finance 2
3. Section 1603 Grant 3
Conclusion 4

Petitioner’s Exhibit TV-I Resume of Ted Venill

 STATE OF VERMONT
PUBLIC SERVICE BOARD

Petition of Beaver Wood Energy Pownal, LLC )

for a Certificate of Public Good, pursuant to 30 )
V.S.A. § 248, to install and operate a Biomass )
Energy Facility and an integrated wood pellet
manufacturing facility located north of the old Docket No
)
Green Mountain Racetrack in Pownal, Vennont, )
to be known as the “Pownal Biomass Project” )

PRE-FILED TESTIMONY OF
TED WRIGHT VERRILL
ON BEHALF OF
BEAVER WOOD ENERGY POWNAL, LIJC

1 1. Introduction.

2 QI - Please state your name, business address and employment.

3 Al- I ant Ted Wright Venill. I am a Managing Director of Beaver Wood Energy,

4 LLC and Beaver Wood Energy Pownal, [IC (collectively, “BWE”) responsible for

5 marketing, finance and tax matters. My home address is 75 Sasco River Lane, Southport,

6 Connecticut. My office address is 230 West Street, Rutland, Vermont 05701.

7 Q2: Could you please summarize your professional education and experience?

8 A2: hi addition to my responsibilities with BWE, I am a Managing Director of New

9 England Alternative Energy LLC, which has been organized to develop various

10 alternative energy projects across New England and the sole member of Naugatuck

11 Energy Development LLC, which, through affiliates, has developed or is developing

12 several electhcal generation projects in Connecticut. Throughout my 35 year career in

( 13 finance, I have financed, leased and purchased on behalf of my employers/clients, a

 _____

Pownal Biomass Project, PSB Docket No.

Prefiled Testimony of Ted Verrill
October 25,2010
( Page2of4

I variety of tangible assets, including commercial aircraft, rolling stock, vessels,

2 communication satellites and various types of projects. These projects have included the

3 production of energy from natural gas, coal, oil, nuclear, solar, wind and geothermaL
I
4 have a BA from Bowdoin College, an MBA in Finance from the University of Arizona

5 and a ID from Fordham University School of Law/University of Maine School of Law.

6 1 ant a retired member of the Bar in New York and Connecticut. My current resume is

7 attached as Petitioner’s Exhibit TV-i.

8 Q3. What is the purpose of your testimony?

9 A3. The purpose of my testimony is to support BWE’s request for permission to start

10 certain limited construction activities prior to the end of 2010 in order to qualify
for
LI certain federal tax grants.

12 Q4. Have you testified previously before the Board?

13 A4. No.

14 2. Project Finance.

15 Q: Could you provide a brief summary of the capital stmcture and financing

16 requirements for the Pownal Biomass Project (the “Project”)?

17 A: The total cost of the Project will be approximately $250 million. BWE intends to

IS secure term debt financing equal to approximately sixty percent of total Project cost,
or
19 5150 million, and equity financing equal to approximately forty percent of total Project

20 cost, or $100 million. The equity financing is expected to consist of investments by

21 BWE principals, BWE joint development partner, Bechtel Development Company, other

22 domestic and foreign investors, tax investors and a federal cash grant awarded pursua
nt to
 _____

Pownal Biomass Project, P58 Docket No.

Pretuled Testimony of Ted Verrill
October 25, 2010
( Page3of4

I Section 1603 of the American Recovery and Reinvestment Act of 2009 (the “Recovery

2 Act”) equal to 30 percent of the cost basis of the qualified property of the Project (the

3 “Section 1603 Grant”) which in this case should amount to at least twenty-one percent of

4 total Project cost, or $52.5 million.

5 3. Section 1603 Grant.

6 Q: Could you please describe the importance of the Section 1603 Grant to the Project

7 as well as the steps required to qualify for the Section 1603 Grant.

S A: The Recovery Act provides certain incentives to promote the construction and

9 completion of facilities that produce electricity from renewable energy resources, such as

10 the Project. Section 1603 of the Recovery Act provides a means for developers of

11 eligible renewable energy projects to monetize the applicable investment tax credits that

12 would otherwise be available. A more detailed explanation of the Recovery Act is set

13 forth in the Motion for Preliminary Approval. As explained in the Motion, the Section

14 1603 Grant will only be available to the Project if construction of the Project begins

15 before the end of December, 2010. For BWE to satisfy this beginning of construction

16 requirement, it needs to undertake physical work of a significant nature on the Project at

17 the Project site. BWE, with Board permission, hopes to undertake certain construction

18 activities at the Project site in 2010 in order to qualify for the Section 1603 Grant. Those

19 limited construction activities are described in the pre-filed testimony of William

20 Bousquet. These activities were carefUlly chosen to minimize any environmental impacts

2t atthesite.
 _____

Pownal Biomass Project, PSB Docket No.

Prefiled Testimony of Ted Verrill
October 25, 2010
( Page4of4

If EWE is unable to secure the Section 1603 Grant, it will significantly

2 complicate the Project’s financing because in order to fill the $52.5 million dollar gap in

3 the Project’s capital requirements, 8VE will likely have to identify a partner that can

4 make use of the long term investment tax credits that would be available in lieu of

5 Section 1603 Grant (please refer to the Motion for an explanation of the relationship

6 between the Section 1603 Grant and investment tax credit available to the Project). The

7 1603 Grant program was created because of the collapse of the tax equity market during

8 the recession. In the current economy, with the tax equity market remaining very weak,

9 selling these tax credits for a price approaching S52.5 million will be exceedingly

10 difficult and could seriously jeopardize SWE’s ability to successfully finance and thus

11 complete the Project

12 4. Conclusion.

13 Q6. Does this conclude your testimony on this issue?

14 A6. Yes.

15

16 \G:\Usas\J4ans\Beaver Wood Energy, LLC’Act 248 Pownafltax credit\VerriII pre-filed flnal.doc

 STATE OF VERMONT
(
PUBLIC SERVICE BOARD

Petition of Beaver Wood Energy Pownal, LLC

for a Certificate of Public Good, pursuant to 30
V.S.A. 248, to install and operate a Biomass )
Energy Facility and an integrated wood pellet
manufacturing facility located north of the old D CC ket N 0.
)
Green Mountain Racetrack in Pownal, Vermont, )
to be known as the “Pownal Biomass Project”

PREFILED TESTIMONY OF
TED WRIGHT VERRILL

Exhibit BWEP -TV- 1

(
Resumé
 Ted W. Verrill
75 Sssco River Lane Sontliport, CT 06890
203-292-3198 (office) 203-258-6653 (mobile) tverrlH@gniall.com

Beaver Wood Energy LLC

Man aging Dlrectnr 2009 to Present
Owner/Dcvelopn of two 29.5 MW integrated wood biomass electric generating and wood pellet nanucturing
facilities in VT
New England Alternative Energy LLC
Managing Director 2009 to Present
Owner/Developer of renewable and alternative energy resoirces in New England
Naugatuck Energy Development LW
Sasco River Advisors LLC
PresIdent 2005 to Present
Owner/Developer two natural gas-find electric generating facilities in southwestern Connecticut
• Owner and onginal developer of Watabisy Geaating Facility 100 MW peaking facility ene of four facilities awarded long
—
—
a inn,
capacity contact with a CT utility- inajosity interest sold to Enet Capital PannaatFiru List Power to iwie 2007
• Owner and developer of Msai Generating Facility -65MW CII? facibty awarded .326 million gnat to conibuct
-
the facility on a
brown dd site hi southwestern Connecticut permitting completed, gas and electrical interconnects in final stages
-

Providing advisory and other financial services for the renewable and clean tech energy sectors
• Ananged sale of 55 MW hiomass to energy facility in Benson, MN

Ailco Finance Corporation

Senior Vice PrdeoI 2001 to 2005
Responsible for originating. arranging debt and equity, managing and closing domestic and cross-border structured
finance,
lease finance and project finance transactions
- Succesaflully financed rolling stock, water and waste water b’anaaclions
in the US and Europe valued at over $2 hillioa
• Rinsed eqiity capital fo, the faegoing flunmis from relatiosultips in hsi*ing and finance sectors
• Involved with Padoni. Wind i frianciag New Mexico wind facility
- Assisted biomasa ti energy and fuel eel developer, in raising developsnaui
caifli
DalmlerChrysler Capital Services, Inc.
( ManaglngDlrector l989to2001
Succesaflaily led & team of marketing, accounting, pricing. credit and tax personnel and technical experts in
idendng,
selecung, acquiring and managing $5 billion otinvestment in US, Asian, European and Australian transportation
and facility
assets with $100 million of annual earnings
• Negotated sopeistcaed rmuhi-p.ty frtsactioas involving commercial aircraft, mibag stock, altippiog, pulp paper,
& water and waste water
facilities, renewable (hydro, solar and waste to energy), fossil fuel (natural gas, coal and oil) anti nuclear energy generation
facilities, with a
working knowledge of the associated tax, accounting, credit, pncmg and legal issues
• Met or exceeded annual budgets and business plans liaising with credit, financ, and tax at Chiysler Corporation in
DaintIer Benz AG in Stuttgatt, Germany
-
Auburn Hills, Ml and

Integrated Resources Corporation

VicePrealdent l985to1989
Successfully negotiated the terms of and acquired $500 million of commercial aircraft from Continental, American,
United,
Eastern and Delta Assisted with the development of new products in a changing tax law environmeot

Thacber Proffitt & Wood

Macdat. 1981 to 3984
Engaged in all phases of asset-based and tease finance of transportation and project assets, as well as general cotpotate
finance,
tax, banking, securities and real estate law Represented Comdisco Financial Services. Chemical, Fifth Third and
-

Wells Fargo
banks, Enneiy Air Freight and Livanos Shipping
Ernst & Young
TazStaff l9SOtol9Sl
Involved in researching and providing advice with regard to a variety of domestic and foreign US corporate
tax matters
Price Waterhouse Coopers
Consultant 1976 to 1978
Involved with high4echvanture capital enterprises and the Fiddity grouç oIfirnds

Fordham UulversltyIUniversity of Maine Schools of Law, in, lt

University of Arlzona/Eller School of Management, MBA, FinanCe, With Distinction, 1975
Bowdoin College, BA, 1971
Member of the Bar (Retired), New York 1984, Connecticut, 1991