The Grid CLE UST 611: Planning Studio May 14, 2018 Original - PowerPoint PPT Presentation

Participant Profile • Reoccurring zip codes: • 44106 • 44114 • 44115 • Predominant industries: • Arts and Entertainment Local Business Survey • Public Administration • Real Estate & Leasing • Majority of operations having 1-200 FTE employees per typical facility; Three respondents of <600 FTE employees per typical facility • Common respondent roles: • Facilities Managers • Directors of Sustainability 30

Energy Demand Percentage of Operating Costs “How important is the availability & cost of energy to your company's Dedicated to Electrical Power decision on where to locate or Source: Cleveland State expand?” Capstone UST 611, 2018 Source: Cleveland State Capstone UST 16 611, 2018 14 Local Business Survey 12 13% Extremely Important 10 32% Very Important 8 14% 6 Moderately Important 4 Slightly Important 23% 18% 2 Not at All Important 0 0-9% 10-19% 20-29% 30-39% 40-49% Not sure 31

Energy Demand Average “All In” Price per kWh of Survey Participants Source: Cleveland State Capstone UST 611, 2018 10 9 8 Local Business Survey 7 6 5 4 3 2 1 0 <9 cents 10-12 cents 12 or more cents Not sure 32

Generators & Backup Power “Does your company have any back -up “How confident are you that your generation equipment to maintain current back-up generation system can operations in the event of a power activate and provide reliable power failure?” before the threshold is reached?” Source: Cleveland State Capstone UST Source: Cleveland State Capstone UST 611, 2018 611, 2018 Local Business Survey 4% Extremely Confident Yes 27% 27% 33% Very Confident No 63% Not Sure 46% No Backup Generation 33

Renewable Energy & District Energy “Would the availability of district “Would a high percentage of energy help in reducing development electricity derived from renewables be costs for new construction or changes in a significant factor in your company's business structure?” location decision?” Source: Cleveland State Capstone UST Source: Cleveland State Capstone UST 611, 2018 611, 2018 Local Business Survey 12% 22% Yes 44% Yes No No 44% 78% Not Sure 34

Local Business Microgrid Perspective What is your impression of a “How familiar are you with microgrid's potential usefulness to the concept of a microgrid?” your firm? Local Business Survey Extremely Useful Very familiar 7% 8% 13% Very Useful 22% Slightly Familiar 32% Moderately Useful 61% 35% Slightly Useful Not familiar at all 22% Not at all Udeful 35

Local Business Microgrid Perspective “How important is operator reputation “What rates would you pay to when selecting the entity that manages guarantee 99.999% Reliability?” a microgrid?” Source: Cleveland State Capstone UST Source: Cleveland State Capstone UST 611, 2018 611, 2018 Other Amount Local Business Survey Extremely Important 16 cents 9% 5% Very Important 15 cents 36% Moderately Important 18% 10 cents Slightly Important 8 cents 32% Not at all Important Would not consider 0 2 4 6 8 10 36

Residential Survey

Residential Energy Use Survey Participants, Sex Demographics Source: Cleveland State Capstone UST 611, 2018 • Total surveys: 232 46% Male Female 54% • Target zip codes: • 44113 - 35 • 44114 - 46 • 44115 - 39 Residential Survey Residential Energy Use Survey Participants, Race • 44103 - 21 Source: Cleveland State Capstone UST 611, 2018 • 33 different zip codes total 9% White 4% Black or African American 40% Asian 47% Other 38

Cost of Electricity Average Monthly Electric Bill by House Type Source: Cleveland State Capstone UST 611, 2018 140 $132 120 $114 100 Residential Survey 80 $85 $82 $80 60 $61 40 20 0 Single Family Home (n=103) Multi-Family Home or Duplex Townhome (n=3) Condo (n=17) Apartment (n=71) Other (n=12) (n=26) 39

Reliable Electricity "Are you willing to pay more for "How important to you is the use of reliable electricity?" renewable energy resources?" Source: Cleveland State Capstone UST Source: Cleveland State University, 611, 2018 2018 70% Yes % No % 60% 57% Extremely Important 7% 55% 55% 5% 50% Residential Survey Very Important 45% 45% 40% 43% 31% 19% Moderatly Important 30% 20% Slightly Important 38% 10% Not Important 0% Single Family Home Apartment (n=71) Other (n=58) (n=103) Source: Cleveland State Capstone UST 611, 2018. Source: Cleveland State Capstone UST 611, 2018. 40

Residential Microgrid Perspective • Overall positive response to "How likely are you to support an investment for a microgrid as tool to learning about the microgrid attract and retain businesses and jobs?" • Residents support Source: Cleveland State University, 2018 economic development initiatives in the Extremely Important 6% Residential Survey downtown area 8% Very Important • Residents value reliable 31% 15% electricity Moderatly Important • 56% willing to pay more Slightly Important • 32% willing to pay $10 or 40% more a month Not Important Source: Cleveland State Capstone UST 611, 2018. 41

Comparative Analysis

Survey Comparison • Local firms have high invested costs in generators and uninterruptable power supplies - potentially making it difficult to attract existing businesses • The concept of a microgrid is supported by both firms and residents as a tool for economic development • Large local or national firms that currently pay low rates with high sunk costs Comparative Analysis (retrospective costs), will be difficult to attract to the microgrid • Despite local business survey, the residential and national survey indicate interest in renewable energy sources amongst public and private sectors • Cleveland’s low energy rates make it more likely to attract national firms than local firms • Microgrid’s operator reputation was important to businesses at local and national level, so attracting early customers may prove challenging 43

Insurance

Introduction • With the increasing complexity of technology, reliance on a resilient power supply has become increasingly necessary. • There are over 5,800 power plants with 144 million customers. Electric power is supplied through over 450,000 miles of high-voltage transmission lines coming out of 8 regional networks. Insurance • The average power plant is over 30 years old. • Approximately 70% of transmission lines and transformers are over 25 years old. 45

Utility Service Interruption Coverage • Coverage for loss due to lack of incoming electricity caused by damage from a covered cause (such as a fire or windstorm) to property away from the insured's premises — usually the utility generating station. • Also referred to as "off-premises power coverage." • Not provided in a standard property insurance policy; available by endorsement. Insurance • Endorsements vary widely as to what utility services are included, whether both direct damage and time element loss are covered, and whether transmission lines are covered. 46

What’s the Damage? Areas of cost during power outages: • Wasted wage/salary costs (and actual work losses) • Lost revenue • Remedial costs (E.g. resulting overtime, repairs, recovering lost data, etc.) • Damages/penalties • 2016 average cost of $740,357 per unplanned outage Insurance • Thirty percent of the $18 billion in insured losses from Hurricane Sandy were attributed to business interruptions -- ~$5.4 billion. 47

Biggest Losers • The average cost of a single data center outage in 2016 was about $730,000 • Southwest Airlines – three-day outage; $177 million • Delta Airlines – three-day outage; $150 million Insurance 48

Cost of Utility Service Interruption Insurance • Average Cost of Business Insurance per $1,000,000 in revenues averages $7,322. • Business Interruption insurance equates for 1/3 of these costs. • Interruption Insurance adds $2,197 of premium to a business policy. • For a company with $50M in revenues, the savings would be $109,850. • Potential Savings on Utility Service Interruption Insurance Insurance with Microgrid • Saving approximately 30% off business insurance premium. 49

Valuing Resilience and Reliability

Resilience and Reliability • Reliability – measurement of frequency and duration of power outages. Valuing Resilience and Reliability • Resilience – ability (of a grid) to withstand rare and extreme events. • Expected reliability of existing grid • Prior report – estimated based upon CEI outage data • 99.63% • µGrid will provide both reliability and resilience – Tiered Structure • Tier 1: 5-Nine Reliability (99.999%) • Tier 2: Limited 5-Nine Reliability • Tier 3: Reliability of the Existing Grid (with additional brownout protection) 51

What types of firms will seek resilient power? Two measures were used to identify ideal potential customers for the µGrid: Valuing Resilience and Reliability • Economic Development Target Firms – Value of Lost Load (VOLL) • Existing Firms – Highest Lost Hourly Revenues (in the event of a power outage) • Also VOLL 52

Economic Development Target Firms – Value of Loss Load (VOLL) • Value of Loss Load: Costs associated with damage and mitigation due to outages over actual electricity consumption Valuing Resilience and Reliability (kWh) • Highest VOLL by 3- and 4-digit NAICS businesses • Profiles were developed from ReferenceUSA NAICS data and from survey data • Tier Structure (used for pricing) • Tier 1: High VOLL > $50/kWh • Tier 2: High VOLL < $50 • Tier 3: All other business/residential parcels 53

Existing Firms – Highest Lost Hourly Revenues (in the event of a power outage) • Locating lines to service Firms with Highest Average Hourly high revenue businesses Production (aggregated by parcel) Valuing Resilience and Reliability • Obtained data from ReferenceUSA $1,000 $2,500 $250, 000+ • Spatially joined coordinate data to parcel data • Used for locating potential lines Data Source: ReferenceUSA, Business and Consumer Research. 54

Existing Firms – Potential Tier Model – Based on VOLL by NAICS • VOLL projected by Existing Firms by Potential Tier (based on NAICS Code) NAICS Code (data Valuing Resilience and Reliability from Tier ReferenceUSA) • Used in Feasibility Analysis to determing revenue/cost data Data Source: ReferenceUSA, Business and Consumer Research. 55

Regulatory Structure

The µ Grid Business Structure • No single entity encompasses the µGrid – rather the µGrid is comprised of several public and private entities: • The City of Cleveland & Cleveland Public Power • Cuyahoga County • A third- party private entity (the “Operator”) Regulatory Structure • Participating entities are contractually bound to create the µGrid system, and achieve its underlying purpose. • There are two options for structuring the µGrid system • The Regulatory Safe model • The Tax Efficient model 57

Option 1: The Regulatory Safe Model Power Generation and City of Cleveland & Private Equity and Wholesale Distributors Cuyahoga County Private Lender Power Purchase $ Agreement $ Management Regulatory Structure Agreement CPP µ Grid Operator Service Contract Customers 58

Option 2: The Tax Efficient Model Power Generation and City of Cleveland & Wholesale Distributors Cuyahoga County Power Purchase $ Agreement Long-Term Regulatory Structure Lease CPP µ Grid Operator Management Agreement $ Service Contract Private Equity and Private Lender Customers 59

Financial Feasibility Model 60

Cleveland Public Power (Regulatory Safe) Cleveland Public Power (Tax Efficient) Revenues Revenues Customer Billing Customer Billing (less) Costs (less) Costs Source: Cleveland Thermal (CHP) Source: Cleveland Thermal (CHP) Source: Renewables Source: Renewables Source: Wholesale Market Source: Wholesale Market Distribution Cost Distribution Cost (less) Expenses (less) Expenses Financial Feasibility Model Mgmt. & Service Contract (with Operator) Microgrid Lease (with Operator) Administrative Expenses Mgmt. & Service Contract (with Operator) Insurance Administrative Expenses Annual Repair Fund General Corporate Expenses General Corporate Expenses Net Operating Income (NOI) Net Operating Income (NOI) (less) Debt Service (County Loans) (add) Economic Development Grant Total Cash Flows Total Cash Flows 61

µGrid Operator (Regulatory Safe) µGrid Operator (Tax Efficient) Revenues Revenues Microgrid Lease (from CPP) Mgmt. & Service Contract (from CPP) Mgmt. & Service Contract (from CPP) (less) Costs (less) Costs µGrid Controller - Equity µGrid Controller - Equity (less) Expenses (less) Expenses Financial Feasibility Model Administrative Expenses Administrative Expenses Insurance Insurance Annual Repair Fund Annual Repair Fund General Corporate Expenses General Corporate Expenses Net Operating Income (NOI) Net Operating Income (NOI) (less) Debt Service (Private Loan and County Loans) (less) Debt Service (Private Loan) (add) Economic Development Grant (less) Depreciation (Controls) (less) Depreciation (Controls and Distribution) (less) Interest (Private Loan) (less) Interest (less) Total Taxes Owed (less) Total Taxes Owed Total Cash Flows Total Cash Flows 62

Additional Financial Model Assumptions Factor Assumptions Taxes Federal Income Tax * 21.0% Municipal Income Tax 2.5% Inflation Factors Annual Cost Inflation 2.0% Financial Feasibility Model Revenue Inflation Factor 2.0% 10-Year Contracts - One time price adjustment to market 8.0% Tiered Pricing Model (per kWh) Tier 1 Pricing $ .130 Tier 2 Pricing $ .115 Tier 3 Pricing $ .090 Purchased Power Costs (per kWh) CHP (Cleveland Thermal) $ .040 Wind $ .110 Solar $ .060 Wholesale $ .055 Distribution Cost (per kWh) $ .025 63 *20-year Depreciation for Distribution System; 10-year Depreciation for Controller, as applicable to entities

Debt Assumptions County Bond A LTV 80% Term (Years) 30 Rate 5% County Bond B LTV 10% Financial Feasibility Model Term (Years - 10 Years Interest Only) 20 Rate 3% City of Cleveland Economic Development Loan LTV 10% Term (Years) 15 Rate 3% Bank Loan - µGrid Controller LTV 75% Term (Years) 10 Rate 6% 64

Distribution Infrastructure Construction Hard Costs Distribution Infra Hard Costs $42.0 Million Substation * 1.0, 2% 10.0, 24% Battery System Financial Feasibility Model 17.7, 42% Ring Bus PJM Connection Line * 3.0, 7% Hamilton Connection Line ($800 / ln. 3.0, 7% ft.) * Microgrid Distribution ($400 / ln. ft.) 5.0, 12% * 2.3, 6% Misc. Property Acquisition Costs * Variable costs per actual line/phase configurations by Study Area (Expanded shown)

Distribution Infrastructure Construction Soft Costs Distribution Infra Soft Costs $33.4 Million Distribution System Soft Costs 8.4, 25% 8.4, 25% Labor Financial Feasibility Model Licensing Fees OEM Service Contract Control System Maintenace 0.4, 1% Permitting 1.7, 5% 4.2, 13% Legal 1.3, 4% 0.6, 2% Engineering Bonding/Insurance 2.1, 6% Construction Contingency 6.3, 19% * Variable costs per actual line/phase configurations by Study Area (Expanded shown) Distribution System – Total Costs $75.3 Million

Control System Construction Costs Control System Hard Cost Control System and Field Devices $2.5 Million Control System Soft Costs Labor 0.50, 12% Financial Feasibility Model Licensing Fees 0.30, 7% 0.10, 3% OEM Serive Contract 2.00, 49% Control System Maintenace Permitting 0.40, 10% Legal 0.04, 1% Engineering 0.08, 2% 0.10, 3% Bonding/Insurance 0.03, 1% Construction Contingency 0.50, 12% Total Control System Soft Costs * Variable costs per actual line/phase configurations by Study Area (Expanded shown) Total Control System Costs $4.5 Million

Economic and Fiscal Impact Model

Determining Market Demand • National Survey Results were used to determine market penetration, and likely interested firms for potential economic development gains • Market penetration rate at 20%. Economic and Fiscal Impact Model • Firms with high regard for energy resiliency and reliability have high sunk costs in generators, uninterruptable power supplies etc. • Determined that most firms likely to move to the Cleveland Microgrid would be new firms • Growth was calculated by expected job growth from BLS 10 year projections and divided by average number of employees per firm • Industries (NAICS Codes) of respondents fell into 6 major growth categories: Computer Systems Designs and related services, Data Processing and Hosting, Finance and Insurance, Legal Services, Retail Trade, and Management, Scientific and Technical Consulting Services 69

Determining Market Demand (cont.) • Expectations were roughly 30 competitive micro grids over the course of the next 10 years, Cleveland’s share calculated at 3% Economic and Fiscal Impact Model • Existing Firms willingness to move calculated at .002% given National Survey results • Firms were broken up into small, medium, and large companies based on average size profiles from National Survey • Share of likely small, medium, and large firms was used to calculate possible firms for economic development • Total 146 firms in various industries determined as possible firms for economic development, study areas matched this demand with existing supply, both existing and developable land 70

Projected Demand Large Medium Small Industries Total Firms Firms Firms Computer systems design and related 10 29 27 66 Economic and Fiscal Impact Model services Data processing, hosting, and related 3 9 8 20 services Finance and insurance 2 6 6 15 Legal services 2 6 6 13 Management, scientific, and technical 2 7 6 15 consulting services Retail trade 2 7 7 17 Total 21 64 60 146 71

Energy Generation

Energy Generation • Variety of Generation Resources for additional resiliency and hedge against fuel prices • Primary source CHP at Cleveland Thermal • Modest amount of Solar PV resources and Wind Energy (10% of the final output) • Ability to leverage customer generation for stability during island mode Estimated Annual Microgrid Generation Makeup (Souce: Author, 2018) Energy Generation 73

Energy Generation • CHP Capability in Cleveland Thermal is the principal constrain for µ Grid load • Full Resiliency supported by 13MW of Cleveland Thermal- lowest steam generation requirement • Additional 8MW Capacity available • Can be ramped up to 50MW (per EPA) every 5 years by adding more baseload or steam generators Estimated Annual Microgrid Generation Makeup (Souce: Author, 2018) Energy Generation 74

Renewable Energy

Goals of Grid Connection • 10% of µ Grid energy generation from renewable sources • Sustainability: • Diversify sources of energy to make the grid more resilient • All renewable energy locations will be private firms who sell their energy to the grid Renewable Energy 76

Overall System Function • Integration of renewables to the grid: • Net metering • Battery storage • Direct connection Renewable Energy • 5 acres of solar PV panels typically equals 1 Megawatt µGrid of generation 77

Solar PV Generation Renewable Energy Image provided by Dovetail Solar & Wind

Wind Turbine Generation • Costs • General Electric (GE) 2MW model purchased new is $2.8 million • GE estimates payback period for each 2MW model is 5-8 months • Ohio Department of Natural Renewable Energy Resources – Threatened Species • Peregrine Falcon • Indiana Brown Bat • LEED Co. Offshore Wind Turbines

Potential Renewable Sites Wind Turbine sites • Solar Qualifications: Quality roof sites • Roof size R oof sites requiring repair • Roof type • Location • Age ^ • Wind Qualifications: Renewable Energy ^ • Property ownership • Zoning • Threatened species • Proximity to institutions 80

The µ Grid Study Areas

The µ Grid Study Areas The µ Grid Study Areas

Downtown Study Area

Strengths: Large Anchors ex. CSU & • BlueBridge Abundance of existing • leasable office space • CHP water and steam infrastructure Downtown Study Area – Boundaries • Many proposed residential redevelopment projects Challenges: Lack of greenfields and • overall not much open developable land • Small lot sizes don’t match with industry demands of microgrid users 84

The Downtown Study Area – Proposed Distribution Lines Existing Leasable Space & Vacant Land Distribution lines Downtown Study Area – Boundaries • 20.5% vacancy rate in Downtown Class A & B office space • 34,169 linear feet • $14M to build 85

Economic Impacts Downtown Study Area – Economic and Fiscal Impact Total Available Area Small Firms Medium Firms Large Firms (Sq. Ft.) (#) (#) (#) 2,803,300 48 45 4 Jobs (Year Earnings ($M) Industry Sector Firms Output ($M) 10) (Year 10) Computer systems design & related services 32 1400 $163 $448 Data processing, hosting, and related 17 73 $7 $245 services Finance and insurance 11 360 $40 $236 Legal services 12 470 $56 $258 Management, scientific, and technical 12 585 $77 $104 consulting services Retail trade 13 430 $20 $20 97 3318 $363 $1,311 Total 86

Economic Impacts: Construction Downtown Study Area – Economic and Fiscal Impact Economic Impact of µ Grid Economic Impact of Industry Growth Costs ($M) $38 $314 Jobs (#) 69 1389 Earnings ($M) $3 $118 New Construction & - 2,803,300 Renovation (Sq. Ft.) 87

Fiscal Impacts Downtown Study Area – Economic and Fiscal Impact City of Cleveland Cuyahoga County PV Benefits ($M) (Year 10) $7 $2 PV Costs ($M) (Year 10) $0.2 $2 PV Benefits ($M) $212 $71 PV Costs ($M) $4 $37 NPV Benefits ($M) $207 $34 Benefit:Cost Ratio 48:1 2:1 88

Regulatory Safe Model Net Cash Flows $16M NPV of Cash Flows $3M IRR 14% Downtown Study Area – Financial Feasibility Cleveland Public Power $45,000,000 $40,000,000 $35,000,000 $30,000,000 $25,000,000 $20,000,000 $15,000,000 $10,000,000 $5,000,000 $- Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 Revenue Total Costs $3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $- Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 NOI Debt Service 89

Net Cash Flows $26M Regulatory Safe Model NPV of Cash Flows $5M IRR 12% Downtown Study Area – Financial Feasibility µGrid Operator $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 Revenue Total Costs $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $- Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 NOI Debt Service 90

Net Cash Flows $0.6M Tax Efficient Model NPV of Cash Flows $0.6M IRR 41% Cleveland Public Power Downtown Study Area – Financial Feasibility $45,000,000 $40,000,000 $35,000,000 $30,000,000 $25,000,000 $20,000,000 $15,000,000 $10,000,000 $5,000,000 $- Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 Revenue Total Costs $500,000 $400,000 $300,000 $200,000 $100,000 $- Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year $(100,000) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 $(200,000) $(300,000) $(400,000) NOI Debt Service 91

Net Cash Flows $16M Tax Efficient Model NPV of Cash Flows $(0.1M) IRR -0.2% µGrid Operator Downtown Study Area – Financial Feasibility $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 Revenue Total Costs $4,500,000 $4,000,000 $3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $- Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 NOI Debt Service 92

Industrial Study Area

Strengths: The Industrial Study Area • Abundant vacant sites. E. 55th • Favorable zoning. • Primary Study area for Solar and Wind Turbine Industrial Study Area – Boundaries Challenges: I-90 • Small existing customer base • Many of the vacant parcels throughout the Study Area are isolated or fragmented. E. 18th St. Clair I-90 Carnegie 94

Phase I: The Industrial Study Area – All Proposed Distribution Lines • Focused on maximizing access to existing businesses and developable sites. • Phase I length: 26,186 linear feet • Distribution infrastructure cost: Industrial Study Area – Boundaries approximately $10M. Phase II: • Focused on maximizing access to vacant buildings. • Phase II length: 18,012 linear feet • Distribution infrastructure cost: approximately $7M. 95

The Industrial Study Area • The Industrial Study Area Team – Developable Sites identified 12 developable sites. • Developable sites provide approximately 2,281,455 sq. ft. of Industrial Study Area – Developable Sites developable space. 96

Economic Impacts Industrial Study Area – Economic and Fiscal Impact Total Available Area Small Firms Medium Firms Large Firms (Sq. Ft.) (#) (#) (#) 1,865,500 60 31 3 Jobs (Year Earnings ($M) Industry Sector Firms Output ($M) 10) (Year 10) Computer systems design & related 30 450 $52 $420 services Data processing, hosting, and related 17 69 $7 $245 services Finance and insurance 12 420 $46 $258 13 645 $77 $279 Legal services Management, scientific, and technical 15 930 $122 $130 consulting services 7 70 $3 $11 Retail trade Total 94 2584 $308 $1,342 97

Economic Impacts: Construction Industrial Study Area – Economic and Fiscal Impact Economic Impact of µ Grid Economic Impact of Industry Growth Costs ($M) $74 $225 Jobs (#) 91 997 Earnings ($M) $5 $84 New Construction & - 1,865,500 Renovation (Sq. Ft.) 98

Fiscal Impacts Industrial Study Area – Economic and Fiscal Impact City of Cleveland Cuyahoga County PV Benefits ($M) (Year 10) $6 $4 PV Costs ($M) (Year 10) $0.5 $4 PV Benefits ($M) $188 $155 PV Costs ($M) $8 $78 NPV Benefits ($M) $180 $78 Benefit:Cost Ratio 23:1 2:1 99

Net Cash Flows $(42M) Regulatory Safe Model NPV of Cash Flows $(17M) IRR N/A (Negative NPV) Cleveland Public Power Industrial Study Area – Financial Feasibility $45,000,000.00 $40,000,000.00 $35,000,000.00 $30,000,000.00 $25,000,000.00 $20,000,000.00 $15,000,000.00 $10,000,000.00 $5,000,000.00 $- Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 Revenue Total Costs $5,000,000.00 $4,500,000.00 $4,000,000.00 $3,500,000.00 $3,000,000.00 $2,500,000.00 $2,000,000.00 $1,500,000.00 $1,000,000.00 $500,000.00 $- Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 NOI Debt Service 100