Transcript Headquarters U.S. Air Force Fly – Fight – Win The Power of EUL: Air Force Enhanced Use Lease Program Overview Mr.

Headquarters U.S. Air Force
Fly – Fight – Win
The Power of EUL:
Air Force Enhanced Use Lease
Program Overview
Mr. Dennis Guadarrama
AFRPA/SAU Division Chief
15 February 2011
Overview








Purpose/Future Vision
Key Program Progress
Approach
Client Advocacy
Targeted Marketing
Action Plan Overview
Timeline to Goal
Key Takeaways: What this Means to You
Fly – Fight – Win
1
The Power of EUL





Vision:
Use the Power of EUL to deliver $5B in return to the Air Force
Developed a Plan
A comprehensive business-focused approach to portfolio
development
AF Leadership support
Leadership ‘champions’ support opportunity development and
advocate program’s value
Project Execution
Builds on current successes by identifying high-value
opportunities and diversifying portfolio
Long-term strategy
Focused on building partnerships fostering best returns and
mutual benefit
Fly – Fight – Win
2
Approach
Identify and Prioritize Opportunities
1

Identify Hot
Markets
2

Map Hot
Markets to
States
Incentives?
Resources?
Potential
opportunities?
 Identified hot
markets using four
criteria:
 Identified hot market
states
 Renewable
portfolio
standards
 Superior
physical
resources
 Good price of
electricity
 Commercial Real
Estate still on road
to recovery
 Primary focus on
Renewable Energy
3

Map to Bases

Evaluate Client
4

and MAJCOMs
Advocacy
Prioritize
Opportunities
Land available?
High revenue
potential?
Existing project
champions?
Concurrence on
priorities?
 Identified the
number of bases by
state
 Examined supply
and demand at each
base
 Estimated value of
potential projects
 Prioritized
opportunities at
each of the bases
by revenue
 Job growth
 Assessed AF client
advocacy across
MAJCOMs and
bases
 Prioritized
opportunities across
MAJCOMs and
bases
 Identified existing
advocates at bases
and MAJCOM
 Prioritized list will be
used to develop
phased approach
 Assessed where
current projects
could lead to future
interest
 Need concurrence
on prioritization
criteria:
market,state-driven,
or client
 Coordinate
strategies with
FOAs and A7Cs
Opportunity Identification/Valuation
 = Complete
 = In-Progress
5
Fly – Fight – Win
Opportunity Prioritization
3
Client Advocacy Strategy
We must communicate the $5B Plan to all stakeholders – Internal and External
Overarching Campaign (Program)
1. Establish
branding,
messaging
 Internal:
̶ Goal: Increase
awareness and build
advocacy for EUL
̶ Demonstrate SAF/IE
support
̶ Problem statements:
What problem does
EUL solve?
̶ Include Developer
engagement
̶ Partnership w/FOAs
Project Specific Advocacy
2. Deploy
campaign
3. Project
marketing
̶ MAJCOM/ base
outreach
 PA collaboration w/
installation, MAJCOM,
developer
̶ Media engagement
̶ Events (ADC,
REWNA)
̶ Work closely with
external
stakeholders
 Developer
Engagement:
̶ Industry Forums
̶ Social media/web
̶ Trade media
̶ Direct email
 Media engagement to
promote opportunities
 Developer Industry
Days
 Ensure external
market understands
the project
 Hill/Edwards:
Regional or ‘super’
Industry Days to
promote full slate of
projects
4. Lifecycle PA
support
Long-term
5. Build on
success
 PA guidance
developed in
collaboration w/
stakeholders
 Stakeholder
testimonials as
evidence of EUL
success
 Key messaging
 Marketing team visits
to MAJCOMS/
installations
 Media opportunities
 Celebrate success
• Lease signing
• Ground
breaking
• Economic
Impact
• Relationships
Fly – Fight – Win
 Continued event
participation
 Education and training
 Goal: Introduce EUL
to the next generation
of real property
officers and asset
managers
4
Key Program Initiatives
Program Initiative
Industry Feedback
• Process is too long
1
Streamline existing
process and educate
stakeholders
3
Infuse Industry
best practices in to
program using Think
Tanks and Industry
forums
4
Mount a
rigorous business
development effort to
ensure deal success
• Demonstrated streamlined process through execution of
Edwards AFB EUL
• Unclear roles and responsibilities
• Adaptability to project needs is
critical
• Held focus groups to define roles and responsibilities;
educated over 100 developers and AF personnel over the
last 18 months (EUL 101 training, Industry Forum)
• EUL/PPA governance is needed
• Established Renewable Energy Project Development
Subpanel
2
Build partnership with
other FOAs to expand
success
Action Taken
• Partnering with FOAs is critical
for success
• Charter with AFCESA and AFCEE, developed process to
evaluate renewable energy projects for execution
• Working with AFCEE to leverage Natural Infrastructure
• Held highly successful EUL Industry Day in Boston Aug 09
• Need to be more in-line with
commercial business practices
• Continuous dialogue and trust
• There has been a lack of proper
due diligence
• Need for upfront analysis
• Reduce risk of deal failure
• Hosted three Think Tank sessions focused on portfolio
driven analysis of real estate and energy markets
• Collaborated with industry to build the Business
Development and solidified the approach for $5B plan
• Early, up-front due diligence efforts applied to MAJCOM
studies to identify opportunities
• Developed screening tools to identify/analyze hot markets
• Implemented project management principles (performance
metrics, charters, risk management)
Fly – Fight – Win
5
Action Plan
Portfolio Evolution
Current Project Pipeline
Values
Targeted Project Strategy
Values
Portfolio Expansion Strategy
Values
A:Current Pipeline
~$.78B
B:Mid-term
~$3.6B
C: Long-term
~$3.7B
Energy
$482.0M
62%
Real Estate
$301.3M
38%
Energy
30%
Energy
$3.6B
100%
Innovation
60%
Traditional
Real Estate
10%
Innovation Strategies
Category
Energy
Real
Estate
Project Type
Value
Solar
$
242.0M
Coal
$
118.0M
Waste-to-Energy
$
82.0M
Cogeneration
$
40.0M
Mixed Use
$
166.1M
Industrial
$
48.1M
R&D
$
64.0M
Hospitality
$
22.0M
Medical
$
1.5M
Target Approach
Example
Focused on hot
market, high
revenue, and vastly
available land bases AFMC: Edwards, Hill (Solar,
with high EUL
Geothermal)
success to date to
generate surge of
revenue
Fly – Fight – Win
Focused Execution
Description
Diversity portfolio with right mix of
projects
Re-invest EUL proceeds into
Reinvestment and Cost installation requirements generating
Avoidance Dividends cost avoidance and cost savings
measures
Natural Infrastructure and
resources, equipment with excess
New Assets
capacity, available real property
MAJCOM IDIQs, PPA/EUL,
New Execution Models Fence to Fence EUL, Performancedriven support (RESS)
Nuclear, cogeneration, algae
New Technologies
6
Approach
Target Strike Zones (Hot Market States)

88% of the AF EUL program future energy deals are located in Hot Market
States
Markets aligned to States w/ AF Installations
Opportunities
States
Hot markets
Other opportunity locations
# of Projects
California
19
Utah
11
Nevada
6
Arizona
4
Florida
4
Colorado
3
New Mexico
2
New Jersey
2
Texas
2
Idaho
2
Alabama
1
Virginia
1
Delaware
1
Georgia
1
Ohio
1
Illinois
1
Mississippi
1
Hot Energy Market Characteristics:
Tennessee
1
Superior physical resources, renewable portfolio
standards, and good electricity prices, jobs, and rates.
Alaska
1
Fly – Fight – Win
Cumulative Total
64
7
Glide Path to $5B
Targeting the $5B goal by focusing on 3 primary areas:
A: Current Pipeline
B: Mid-term
C: Long-term
Program Glide Path NPV Potential
C
$8.0
Comments
$7.0
NPV ($ in Billions)
$6.0
$3.7B
Stretch
Goal
$8.08B
$5B Goal Line
$5.0
• A: Current program at projected
NPV of $783M
• B: Estimated $3.6B focused on
target strike zones (Hill &
Edwards AFB)
• C: Estimated $3.7B attainable
from diversifying the portfolio
(cost avoidance, reinvestment,
fence to fence analysis)
B
$4.0
$3.0
$5.0B
$3.6B
$2.0
$1.0
A
$0.82
$0.78B
$0.0
Current Pipeline
(Executed & In Pipeline)
Targeted Project
Strategy
Portfolio Expansion
Strategy
Grand
Total
Fly – Fight – Win
8
Targeted Marketing

Developed Marketing and Communications Team focused on:

Building sustainable partnerships with developers and financiers
 Continue conveying a predictable, understandable, process for
transactions

Partnering with state and local community stakeholders to:

Identify synergies with potential EUL projects and stakeholder
expectations
 Consistently communicate with Economic Development Offices,
Local Universities, and City Council meetings
 Educate and inform regulatory agencies on EUL benefits and
processes

Sharing initial due diligence with development community


Ensure synergies and identify potential local investors and/or grant
funding for specific initiatives
Exploring new approaches to industry days

Regional, AF-wide Renewable Energy Forums
Fly – Fight – Win
9
Takeaways
AFRPA is focused on reaching $5B Goal
1
Developed a plan
• Developed three focus areas
• Resources/Manpower through AFRPA, MAJCOM, and installations play critical role
in execution of the plan
Leadership Support
• Establish firm support and direction from HQ Air Force through MAJCOMs to bases
that EUL projects are a top priority
• SAF/IE endorsement will increase advocacy and momentum of the program
2
3
Project Execution
4
•
•
•
•
Initiated long-term strategy planning with Hill and Edwards AFBs
Identified next wave of opportunities (Hill, Edwards, AMC)
Developed timeline to reach $5B
Set the stage for solicitations and HRO selections over the next 3 years
Long-Term Strategy
• Ensuring projects remain financeable through a flexible, streamlined process
• Strategizing on how best to spread the wealth across the Air Force
• Focusing on investment strategies that will help the Air Force support the $5B goal
Communications &
Marketing
• Targeted stakeholder engagement and marketing to build synergies
• Sharing of due diligence to maximize probability of deal success
5
Fly – Fight – Win
10
Contact
Visit us at
www.airforceeul.com (external)
www.afrpa.hq.af.mil (internal)
1-866-725-7617
Follow the
Air Force Real Property Agency
on Facebook
Delivering Value to the Warfighter, our People, and
our Communities
Fly – Fight – Win
11
Questions?
Fly – Fight – Win
12