SPILMAN THOMAS & BATTLE.pLLc ATTORNEYS AT LAW Susan J. Riggs Direct Dial: 304.340.3867 E-Mail: [email protected]

VZA HAND DELIVERY Ms. Sandra Squire, Executive Secretary Public Service Commission of 201 Brooks Street Charleston, West Virginia 25301

Re: Case No. 12-1196-E-CS BEECH RIDGE ENERGY 11 LLC Application for a Siting Certificate to Authorize the Construction and Operation of a Wholesale Electric Generating Facility in Greenbrier County, West Virginia

Dear Ms. Squire:

Enclosed for filing on behalf of Beech Ridge Energy I1 LLC in the above-referenced matter are the original and twelve copies of the following:

1. Direct Testimony of Kevin E. Parzyck

Please do not hesitate to contact me if you have any questions regarding this filing or require additional information.

Very truly yours, I /A fi

Susan J. Riggs (WV State Bar Nr5246) Lee F. Feinberg (WV State Bar No. 1173) Grant P.H. Shuman (WV State Bar No. 8856) SJR/rad:4334539 Enclosures cc: Certificate of Service

Spilman Center I 300 Kanawha Boulevard, East I Post Office Box 273 I Charleston,WestVirginia 25321-0273 www.spilmanlaw.com 1 304.340.3800 i 304.340.3801fax West Virginia North Carolina Pennsylvania Virginia CERTIFICATE OF SERVICE

I, Susan J. Riggs, counsel for Beech Ridge Energy I1 LLC, do hereby certify that on this 27th day of December, 2012, a copy of the foregoing Direct Testimony was served upon the following counsel of record as follows:

VIA HAND DELIVERY John Auville, Esquire Staff Attorney Public Service Commission of West Virginia 201 Brooks Street Charleston, West Virginia 2530 1 Counsel for Commission Staff

VIA U.S. MAIL Vincent Trivelli, Esquire The Law Office of Vincent Trivelli, PLLC 178 Chancery Row Morgantown, WV 26505 Counselfor WVState Building and Construction Trades Council, AFL-CIO DIRECT TESTIMONY OF KEVIN E. PARZYCK

ON BEHALF OF

BEECH RIDGE ENERGY I1 LLC

Dec 27,2012 PUBLIC SERVICE COMMISSION OF WEST VIRGINIA CHARLESTON

Case No. 11-1196-E-CS Beech Ridge Energy I1 LLC Application for a Siting Certificate to Authorize the Construction and Operation of a Wholesale Electric Generating in Greenbrier County, West Virginia

DIRECT TESTIMONY OF KEVIN E. PARZYCK

IQPlease state your name and business address.

2A My name is Kevin E. Parzyck. My address is One South Wacker, Suite 1900, Chicago,

3 Illinois 60606.

44 By whom are you employed and in what capacity?

5A I am Vice-president of Development of LLC (“Invenergy”). My educational

6 and professional qualifications are set forth in Appendix A to this testimony.

74 What are your duties and responsibilities?

8A As Vice-president of Development, I oversee and coordinate the complete development

9 process for wind energy projects including the Beech Ridge Energy I1 LLC (“BE 11”)

10 wind project. Project development includes site selection, securing site control and

11 development rights, establishing budgets and schedules, preliminary engineering,

12 environmental and regulatory permitting, and local and governmental relations. My

13 responsibilities to a project also include the negotiation of contracts for the sale of

14 electricity, financial modeling and economic analysis.

15 Q What is the purpose of your testimony? Kevin E. Parzyck Direct Testimony Page 2

I A The purpose of my testimony is to sponsor BRE 11’s application for a siting certificate to

2 construct and operate a wind power Wholesale Electric Generating Facility (the

3 “Facility”) and ancillary facilities (the “Facility” and the ancillary facilities are

4 collectively referred to herein as the “Project”) in Greenbrier County, West Virginia (the

5 “Application”).

6 Q Please outline your testimony.

7 A I will testify concerning the following:

8 1. Invenergy’s experience and expertise ,,I the development, construction and

9 operation of electric generating facilities; .. 10 11. Description of the Project;

I1 iii. Project location;

12 iv. Project construction and operation;

13 V. Exempt Wholesale Generator Status;

14 vi. Need for the Project;

15 vii. Expected financing of the Project; and

16 viii. Economic benefits of the Project.

17 Q Please summarize your testimony.

18 A BRE 11, through Invenergy, has the experience and expertise necessary to successhlly

19 develop, finance, construct and operate the Project. There is a need for new generation in

20 this region of the nation, particularly renewable generation, which the Project will fulfill.

21 The Project is ideally suited for Western Greenbrier County, where there is a substantial

22 wind resource. In addition, the acreage comprising the Facility is located within a 70,000

23 acre tract primarily owned by one company whose acreage is utilized for the highly Kevin E. Parzyck Direct Testimony Page 3

I compatible uses of mining, timbering, and forest management. The Project will bring

2 significant economic benefit to the local economy and the State economy through

3 construction jobs, permanent jobs, local purchases, and the payment of taxes to

4 Greenbrier County and the State.

5Q Please outline BRE 11’s request in this proceeding.

6A By its Application filed with the Public Service Commission of West Virginia (the

7 “Commission”) on August 24, 2012, BRE I1 is requesting the Commission grant an

8 electric generating facility siting certificate to BRE I1 to construct and operate the Facility

9 and other necessary appurtenances.

10 Q. Is the adjacent Project owned by Beech Ridge Energy LLC (“Beech Ridge”) under a

11 siting certificate granted by the Public Service Commission of West Virginia?

12 A. Under the siting certificate granted Beech Ridge, 67 generators (“WTG”)

13 have been constructed and placed into service. Opponents of the project brought a civil

14 action in the United States District Court for the District of Maryland, and in early 20 10,

15 the Court approved a settlement between Beech Ridge and the plaintiffs that prohibited

16 construction beyond 67 WTGs until Beech Ridge had secured an Incidental Take Permit

17 (“ITPyy)under Section 10 of the Endangered Species Act from the United States Fish and

18 Wildlife Service. Under a further settlement and amended Order in the federal case,

19 Beech Ridge or an affiliated company was allowed to construct 33 additional WTGs

20 provided they were generally on the western side of the original Beech Ridge footprint or

21 on additional land to the west of the original footprint. These 33 additional WTGs

22 constitute the BRE I1 Project, and are proposed to be constructed on western portions of

23 the original Beech Ridge footprint and land immediately west of the original footprint. Kevin E. Parzyck Direct Testimony Page 4

1 Further, the existing Beech Ridge 138 kV transmission line from the Beech Ridge

2 substation to the Monongahela Power Grassy Falls substation has capacity to carry the

3 additional energy that will be produced by the Project, thus no new transmission line is

4 required.

5 INTRODUCTION TO BRE I1

6 Q Please describe BRE 11’s corporate structure.

7 A BRE I1 is a Delaware limited liability company and is a wholly-owned direct subsidiary

8 of Invenergy Wind Development North America LLC (“Invenergy Wind”). Invenergy

9 Wind is wholly-owned by Invenergy Investment Company LLC (“Invenergy

10 Investment”) a Delaware limited liability company, with principal offices in Chicago,

I1 Illinois. Invenergy Investment is a developer, owner and operator of power generation

12 and energy delivery assets. Invenergy Wind is a wind energy development business.

13 BRE 11 holds a certificate of authority from the Secretary of State of the State of West

14 Virginia authorizing it to transact business in West Virginia.

15 Q Please describe Invenergy Investment’s experience and expertise in the

16 development, construction and operation of electric generation facilities,

17 particularly wind power facilities.

18 A Invenergy Investment has a superior track record of successful projects in the energy

19 industry and a highly experienced management team. The members of the Company’s

20 senior management team have an average experience of approximately 20 years in

21 diverse areas of the energy market including development, engineering, construction,

22 finance, operations, asset management, and energy trading and contracting. Invenergy Kevin E. Parzyck Direct Testimony Page 5

1 Investment is headquartered in Chicago. International development is focused on the

2 European and Canadian wind energy markets.

3 Invenergy Investment is in the process of building a portfolio of energy projects in North

4 America and Europe by developing greenfield projects and acquiring projects. Invenergy

5 Investment currently has a large portfolio of electricity generation and energy related

6 projects in development, construction and operation including numerous power

7 generation projects under long term contracts for electricity sales. This portfolio includes

8 projects generating electricity with wind turbines, photovoltaic solar installations as well

9 as conventional thermal electricity generation facilities utilizing a wide variety of fuels.

10 Q What activities has Invenergy Wind undertaken to secure its position as a leading

I1 wind energy company?

12 A Invenergy Wind is executing a large and regionally comprehensive wind energy

13 development program. Currently, Invenergy Wind has active development in more than

14 20 states in the U.S. along with development programs in Canada and Europe. Of course

15 Invenergy Wind developed and oversaw the adjacent Beech Ridge Project.

16 THE PROJECT

17 Q Please describe the Facility.

18 A The Facility will include up to 33 wind turbines and an associated electric collection

19 system ((‘ECS’’) BRE I1 anticipates that it will utilize a GE 1.6-100 wind turbine (“GE

20 1.6’7, which has a four piece tower that measures 3 15 ft. (96 m) with a rotor diameter of

21 328 ft. (100 m). However, the particular turbine model selected for the 33 turbines will

22 be based on turbine efficiency, turbine availability, the ability to change the cut-in speeds

23 and turbine pricing. The turbines selected will not exceed a maximum height of 497 ft. or

~ Kevin E. Parzyck Direct Testimony Page 6

1 151.4 meters (“m”). Together the Beech Ridge project, and the subject BRE I1 project,

2 will not exceed the previously allowed 186-MW interconnect as approved by the

3 Commission in Case No. 05-1590-E-CS. The turbines will be three blade upwind

4 turbines on tubular towers. The blades are hub mounted to the nacelle, which sits atop

5 the tower. The turbines utilize a blade pitch system to cease operation if wind speeds

6 exceed approximately 45 mph. The blade pitch system reduces the amount of wind that

7 the blade catches by rotating the blades at their base, thereby stopping the turbine from

8 operating. The tower, nacelle and blades will be painted in the same unifying non-

9 obtrusive white color. All facing surfaces will have a non-reflective smooth surface. The

10 turbine foundation will be designed based on site specific soil and geotechnical

11 conditions. All foundations will consist of anchor bolts, concrete and reinforcing rebar.

12 The power generated by the BRE I1 turbines will be delivered to the existing Beech

13 Ridge substation by an ECS. BRE I1 is pursuing several options for delivering the power

14 generated to the existing substation, including (a) installing ECS lines within the existing

15 transmission right-of-way from the BRE I1 project area to the existing Beech Ridge

16 substation, and (b) installing ECS lines within the limits of Beech Ridge Road leading

17 back to the existing substation. BRE I1 is also evaluating a third option, which would

18 consist of building a secondaryhpplemental substation in close proximity to the BRE I1

19 project area and then running the ECS directly to the supplemental substation. This third

20 option is the most unlikely of the options, but all three are undergoing internal reliability

21 and feasibility analysis.

22 The existing Beech Ridge Operations and Maintenance Facility will serve BEI1 as it

23 does the existing Beech Ridge project.

- -~ Kevin E. Parzyck Direct Testimony Page 7

1 To accommodate the additional generation provided by BRE 11, the existing Beech Ridge

2 substation will be upgraded, including the installation of two breakers and metering

3 equipment. If necessary, an additional GSU transformer with associated equipment will

4 be installed at the current substation location or located near the existing transmission

5 line in close proximity to BRE 11.

6 Q Please describe the safety controls that will be implemented at the constructed

7 Facility.

8 A Safety controls will be in place throughout the Facility to secure the public, identical to

9 those in place on the Beech Ridge Facility. Public access to private lands is already

10 controlled by landowners and will continue to be controlled in accordance with easement

11 agreements. The substation and O&M building are fenced. Maintenance doors on all

12 buildings and at the base of each wind turbine tower will be locked to prevent entry by

13 unauthorized personnel. Safety signing will be posted around all towers, transformers,

14 and other high-voltage facilities, and along roads in conformance with applicable state

15 and federal regulations.

16 Q What is the generating capacity of the Project?

17 A The maximum allowable name plate generating capacity of the Project, depending on the

18 turbine selected, is 85.5 MW. If the turbine selected is the GE 1.6-100, the name plate

19 capacity would be 53.46 MW, which is the product of the proposed 33 turbines

20 multiplied by 1.62 MW per turbine. If all of the turbines generate electricity at their rated

21 capacity for one continuous hour, the facility would deliver about 54 MWh or 54,000

22 KWh of energy into the electric system for that hour. If the turbines generate at their

23 rated capacity for an entire month, they would produce approximately 38,880,000 kWh. Kevin E. Parzyck Direct Testimony Page 8

1 If the Facility operates at a typical capacity factor of 39.5 percent, the Facility would

2 produce approximately 15,350,000 kWh per month and about 185,000,000 kWh each

3 year. At the average residential consumption of 700 kWh per month, the Facility would

4 produce enough electrical energy for approximately 22,000 residential customers a month

5 on average.

6 Q Are any new transmission lines or interconnection studies necessary for the Project?

7 A No. The existing, operating 138 kV transmission line from the Beech Ridge substation to

8 the interconnection at the Grassy Falls substation of Monongahela Power Company, a

9 FirstEnergy Company, is sufficiently sized to carry the energy produced by BRE I1

10 together with the energy produced from Beech Ridge. Thus, no new transmission lines

11 are necessary, and no interconnection studies were required on behalf of the BRE I1

12 project.

13 Q Has Beech Ridge provided information to the Commission concerning the

14 components of the Project and a drawing or map of the Project site?

15 A The Appendix to the Application provides a detailed description of the Project, and

16 provides detailed information concerning the technical and operational aspects of the

17 Project. Also included in the Appendix are an aerial photograph showing a 1-mile radius

18 of the Project area, a 5-mile radius map, a generating facility pre-construction map, a

19 generating facility map, viewshed renderings, a sound study, an avian migration study

20 and an avian and bat risk assessment, a hydrology and wind report, and a traffic study.

21 PROJECT LOCATION

22 Q Where is the Project located? Kevin E. Parzyck Direct Testimony Page 9

1 A The Facility will be located along approximately 10 miles of forested Appalachian

2 Mountain ridgelines in Greenbrier County, West Virginia. The Project will consist of

3 turbines placed in a single row along Beech Ridge, Clear Creek Mountain, Pollock

4 Mountain, Huggins Ridge and Blue Ridge at an average elevation of approximately 3,800

5 ft. (1 160 m) above mean sea level. Generally, the Project area is located approximately 2

6 miles northwest of Duo, approximately 2 miles east of Quinwood, approximately 5 miles

7 southeast of Leivasy, approximately 7 miles north of Rupert, approximately 7 miles

8 southwest of Richwood and over 20 miles northwest of Lewisburg.

9 Greenbrier County is the second largest county in West Virginia. Seventy-five percent or

10 more of the total acreage in the County is wooded. A rugged mountainous area with

11 elevations up to nearly 4,400 feet comprises the northwestern part of the County which is

12 where the Project will be located.

13 Q What characteristics does the Project site have that make it a favorable site for the

14 Project?

15 A The site was chosen for several reasons, including the fact that it is directly adjacent to

16 the existing Beech Ridge Wind Farm which allows use of existing infrastructure, such as

17 the Beech Ridge project transmission line, substation and operation and maintenance

18 facility. Additionally, the area has excellent wind energy development potential

19 including terrain, geography and above ground wind speeds, it is substantially distant

20 from environmentally or culturally sensitive areas, and is located near major electricity

21 transmission facilities. Further, the land is privately owned and has concurrent land uses

22 (forest management, timbering, and coal mining) that are compatible with wind power

23 development. The site is outside the view shed of a substantial mount of local, Kevin E. Parzyck Direct Testimony Page 10

I environmentally and culturally sensitive areas, and there is an absence of known critical

2 habitat for any threatened or endangered species.

3 Q Please describe the proposed site preparation plans.

4 A BRE I1 will conduct geotechnical borings at or near each proposed turbine location to

5 insure proper support for the wind turbine foundations. Surface disturbance will be

6 limited to that which is necessary for safe and efficient construction. It is anticipated that

7 each turbine site will require removal of less than 1.9 acres of vegetation if the turbine

8 site is fully vegetated. Removal or disturbance of vegetation will be minimized through

9 site management. Minimal grading will be necessary to level the foundation area for

10 each wind turbine base, however, there is no expected change to site topography due to

11 grading activities. BRE I1 will reclaim all disturbed areas not required for operations.

12 Beech Ridge will prepare and implement a Storm Water Pollution Prevention Plan which

13 will describe the BRE I1 Project and its operations, identify potential sources of

14 stormwater pollution, and recommend appropriate Best Management Practices or

15 pollution control measures to reduce the discharge of pollutants in stormwater runoff.

16 Access roads will be located to minimize disturbance and maximize transportation

17 efficiency and to avoid sensitive resources and steep topography. The main access route

18 for the Project, including equipment deliveries, will be via County Road 1 North from

I9 Rupert, WV. BRE I1 will make reasonable efforts to use existing roads wherever

20 possible.

21 BRE I1 estimates that it will need to upgrade onsite up to 6 miles of existing roads and

22 potentially construct approximately 4 miles of new roads onsite for the 33 turbines.

23 Where possible, BRE I1 will utilize previously disturbed timbedmining haul roads. Kevin E. Parzyck Direct Testimony Page 11

I Roads will be approximately 16 ft. wide during the operational phase of the Project. The

2 roads will be maintained to provide safe operating conditions at all times.

3Q What does Beech Ridge plan to do to minimize traffic issues? 4A After construction, traffic related to operation of the Project will consist of operational

5 maintenance vehicles. Once on the site, traffic will be primarily restricted to the roads

6 developed for the Project, Use of unimproved roads will be restricted to emergency

7 situations. Speed limits will be set to insure safe and efficient traffic flow.

8Q What activities has BRE I1 taken with respect to threatened or endangered species?

9A Beech Ridge is developing a Habitat Conservation Plan (“HCP”) to obtain an Incidental

10 Take Permit (,‘ITPyy)under the Endangered Species Act for the endangered Indiana bat

11 and Virginia big-eared bat. Beech Ridge has interacted regularly with the USFWS and

12 expects the ITP to be issued early in the second quarter of 2013. The ITP will cover the

13 area of the BRE I1 Project.

14 BRE I1 included with its Application as Exhibit J the spring and fall Avian Migration

15 Studies for the Project for March-May and September-November 201 1, and as Exhibit K

16 the Avian and Bat Risk Assessment: Beech Ridge Wind Energy Project Expansion Area.

17 The studies concluded that the Project area does not appear to contain unique situations

18 or habitat features that would pose significant risk to birds or bats. BRE 11’s witness

19 David P. Young, Jr. has submitted Direct Testimony in support of these studies.

20 Q Has BRE I1 complied with Rule 3.1.m.3 relating to view? 21 A Yes. Saratoga Associates (“Saratoga”) prepared a Visual Resource Assessment (“VRA”)

22 dated June 201 1, included with BRE 11’s Application as Exhibit M. The VRA illustrates

23 the potential visual impact of BRE I1 for radii of 5 and 20 miles around the boundaries of Kevin E. Parzyck Direct Testimony Page 12

1 the facility. BRE 11’s witness, John Guariglia, has submitted Direct Testimony in

2 support of the VRA.

3 Q What was Saratoga’s conclusion about visibility?

4 A Saratoga concluded that overall visibility was minor. The viewshed was prepared using a

5 conservative blade tip height of 497 ft. and was based on 47 (33 primary and 14 alternate)

6 turbine locations although only 33 turbines will be constructed. The little potential

7 visibility of the operational project within either one mile or five mile radius viewsheds is

8 mainly along elevated ridges with direct line of sight to the Project. Scattered through the

9 area of the Project to a radius of 20 miles, there are a few small pockets of potential

IO visibility. The VRA demonstrates that approximately 97% of the surrounding 20-mile

I1 radius area would not have any visibility of the Project.

12 Q Has Beech Ridge had an Acoustical Study performed in compliance with the Siting

13 Rules?

14 A Yes. Our consultant, Acentech Incoporated (“Acentech”), reviewed site drawings,

15 equipment information, toured the Project area, conducted ambient sound measurements

16 and observed ambient conditions in representative community locations, and estimated

17 construction and operation sound levels for the Facility. Acentech’s report was submitted

18 with the Application as Exhibit N of the Appendix, and BRE 11’s witness, James D.

19 Barnes, has submitted Direct Testimony in support of the report.

20 PROJECT CONSTRUCTION AND OPERATION

21 Q Will BRE I1 be the entity responsible for the construction and operation of the

22 Project?

. Kevin E. Parzyck Direct Testimony Page 13

1 A Yes. BRE I1 will bid the services of a construction contractor for construction of the

2 Project. Upon completion of the Project BRE I1 will operate the Project.

3 Q How has BRF, I1 undertaken planning and design of the Project?

4 A BRE I1 and Invenergy have been working with experienced consultants and engineers in

5 the assessment of wind resources and the equipment and design of wind project. We

6 have also been closely working with experienced consultants in the areas of view shed,

7 noise, environmental and permitting.

8 Q Please describe the construction process.

9 A Once roads are in place to access the wind turbine sites, installation of the turbine

10 components begins. Construction of a single turbine foundation takes approximately 5

I1 days. Upon completion of the foundation, the turbine will be erected which typically

12 takes 2 to 3 days. Multiple turbines can be constructed and erected simultaneously. The

13 transformer at each turbine is connected to the electrical collection system which may be

14 underground or above ground, The collection system will be routed to minimize impact

15 and where possible will run adjacent to access roads. The collector circuits are

16 aggregated at the substation and interconnected to the Transmission Line.

17 Q Please discuss the Project’s construction timetable.

18 A Final construction design will be completed in the Winter of 2012/2013, and construction

19 and installation will begin as soon as the Summer of 2013. BRE I1 expects construction

20 to take 6-9 months and would like to place the Project into service by year end 2013.

21 Q What permits are necessary for the Project, and what is the status of each permit

22 request? Kevin E. Parzyck Direct Testimony Page 14

1 A The following is a list of the permits or approvals that are required for the Project, and the

2 current status of each:

3 1. Public Service Commission siting certificate application - currently

4 pending.

5 2. Department of Environmental Protection (“DEP”) Stormwater permit and

6 Groundwater Protection Plan - in accordance with the DEP’s timelines with

7 regard to permit application review, these applications will be filed closer to the

8 time of commencement of construction.

9 3. State Historic Preservation Office - the review process is part of the

IO National Environmental Policy Act - National Historic Properties Act. BRE I1 is

11 in consultation with the USFWS, the lead agency in this review, and the SHPO.

12 4. Incidental Take Permit through the USFWS - process for obtaining permit

13 is underway and expected the second quarter of 20 13.

14 5. Federal Aviation Administration Approval - review request to be filed.

15 The following is a list of the permits or approvals that may be necessary. BRE I1

16 will file for these permits or approvals at such time as it is determined that the same is

17 necessary for the Project:

18 1. 404/401 Certification - if individual certification is needed, BEI1 will

I9 file the appropriate application with either the United States Army Corps of

20 Engineers, Huntington Division, or the DEP.

21 2. Stream Activity Permit - if this permit is needed, BRE I1 will file the

22 appropriate permit application with the West Virginia Public Lands Corporation. Kevin E. Parzyck Direct Testimony Page 15

1 3. Air Quality Permit - if this permit is needed for the temporary concrete

2 batch plant during the construction phase, BRE I1 will file the appropriate permit

3 application with the DEP.

4 4. Flood Zone Construction Permit - if this permit is needed, BRE I1 will file

5 the appropriate permit with the Greenbrier County Commission.

6 5. Department of Highways - if a permit is needed, BRE I1 will file the

7 appropriate permit application.

8 Q Will the Project have any water or air emissions or discharges?

9 A No. There will be no air or water emissions or discharges at the Project. There are also

10 no process water requirements or wastewater discharges from the operation or

11 maintenance of the Project, other than any stormwater discharges during project

12 construction which will occur only in compliance with the stormwater permit.

13 Q What post construction reclamation activities do you anticipate?

14 A After completion of construction all disturbed areas will be finish graded and any

15 remaining debris will be properly disposed of off-site. Cleanup and restoration

16 procedures will be initiated as soon as possible after construction activities. Restoration

17 operations will involve surface grading and the reestablishment of natural contours and

18 vegetation. The construction areas of the site will be protected by the implementation of

19 appropriate erosion control measures, including site-specific contouring, reseeding, or

20 other measures agreed to by landowners. Areas surrounding each wind turbine used

21 during construction will revert to the original land use after construction. The erosion

22 control measures used will be in accordance with any applicable state and local soil and Kevin E. Parzyck Direct Testimony Page 16

1 erosion control plan guidelines. MeadWestvaco will continue forestry management and

2 other operations on its land.

3 Q Please describe the operation and maintenance of the Project.

4 A The Project’s onsite operations will be managed by the site supervisor(s), supported by a

5 team of turbine technicians. The majority of these employees will be onsite every day

6 during typical business hours conducting scheduled and unscheduled maintenance on the

7 turbines and the balance of the plant, monitoring the Facility operations and managing

8 administrative requirements. BRE I1 anticipates that employees will drive by each

9 turbine every day, as long as access is not restricted due to extreme weather conditions,

10 In addition, employees will be onsite conducting unscheduled maintenance as necessary.

11 The Project will also be monitored 24 hours through the SCADA system, which will

12 provide remote access to turbine and substation controls. Operations employees will be

13 on call 24 hours per day within a 60 minute drive to the site.

14 Q What type of outdoor lighting will be used at the Project?

15 A BRE 11’s Project plans exclude use of all outdoor lighting in the Project area other than

16 that required by the Federal Aviation Administration. FAA will require lighting on the

17 permanent wind monitoring tower(s). Facilities, including a substation control building,

18 any storage yards, and individual turbine entrances may be lit temporarily as required to

19 protect worker safety during those times when employees are working after dark.

20 Q Please discuss BRE 11’s decommissioning plans post the Facility’s useful life.

21 A Near the end of the projected life span of the wind turbines, BRE I1 may consider

22 replacing the turbines to continue to utilize the Project’s valuable wind resource. If BRE

23 11 determines that the wind turbines were not to be replaced, all towers, blades, nacelles Kevin E. Parzyck Direct Testimony Page 17

1 and transformers would be taken down and properly disposed of off-site. Remaining site

2 foundations and turbine access roads will be reestablished back to their natural contours

3 and vegetation using surface grading and seeding. Additionally, the terms of our lease

4 with MeadWestvaco require us to follow West Virginia Forestry best management

5 practices, particularly on reclamation, including preparation for reforestation, leveling,

6 terracing, mulching and other reasonably necessary steps to prevent soil erosion, and at

7 the end of the Project’s useful life, to remove all facilities to a depth of four feet below

8 the surface. If BRE I1 were to fail to remove the facilities, MeadWestvaco may do so and

9 require BRE I1 to pay the cost of removal and restoration. In addition, BRE I1 would

10 expect to have a decommissioning bond or letter of credit as does the Beech Ridge

11 Project.

12 EXEMPT WHOLESALE GENERATOR STATUS

13 Q Is BRE I1 currently, or will it become, under applicable Federal law, an Exempt

14 Wholesale Generator (“EWG”)?

15 A Prior to commencing construction, BRE I1 will file documentation with the Federal

16 Energy Regulatory Commission (“FERC”) to become an EWG. BRE I1 will obtain its

17 EWG status prior to commencing commercial operation of the Project.

18 Q Will the electricity generated at the Project be sold solely in the wholesale market?

I9 A Yes.

20 Q Under what rates will BRE I1 sell electricity in the wholesale market?

21 A BRE 11’s rates charged for its generated electricity will be governed by the FERC. BRE

22 I1 intends to file a market-based rate schedule with the FERC that will allow sales from

23 the Project to be at negotiated rates. Kevin E. Parzyck Direct Testimony Page 18

1 Q Will BRE I1 make any retail sales of electricity?

2 A No. As an EWG, BRE I1 will be making only wholesale sales of electricity.

3 NEED FOR THE PROJECT

4 Q Is the need for electricity generation substantiated?

5 A PJM is an RTO that coordinates the movement of wholesale electricity in all or parts of

6 13 states and the District of Columbia including West Virginia. The region includes

7 about 60 million people. PJM prepares an independent load forecast for the footprint it

8 serves. In early 2012, PJM projected summer peak growth of 1.4% per year and winter

9 peak growth of 1.2% per year for the next ten years.

10 Based on this and similar data, the North American Electric Reliability Corporation

11 (NERC) forecasted that PJM will become deficient in its Reserve Margin by 2021. And,

12 subsequent to this late 201 1 forecast, PJM received notification of the retirement of over

13 13,000 MW of generation fwther increasing the 2021 deficiency in Reserve Margin.

14 Q Will the Project help fulfill the demonstrated need for new generation in PJM?

15 A Yes. Furthermore, and importantly, it will add generation fueled by a renewable

16 resource, which will help to diversify dependence on fossil fueled sources of energy and

17 help increase the general competitiveness of the marketplace.

18 Q Will the Project assist in the demand for renewable generation?

19 A Yes, very much so. The Project will contribute to fulfilling the expanding demand for

20 renewable generation in the PJM marketplace, where several states have developed

21 renewable portfolio standards.

22 PROJECT FINANCING

23 Q What is the estimated cost of the Project? Kevin E. Parzyck Direct Testimony Page 19

I A BRE I1 currently estimates that the Project will cost approximately $1 15,000,000.

2 Q Please identify BRE 11’s method of financing for the Project. 3 A BRE I1 and Invenergy Investment will explore multiple financing alternatives, however,

4 at this time they anticipate that Project construction will be funded with a construction

5 loan and an equity bridge loan. Upon completion of construction, the construction loan

6 will be taken out with permanent non-recourse Project debt, and the equity bridge loan

7 will be taken out with equity. It is anticipated that a group of lenders will be selected,

8 through a competitive bidding process, to provide the construction loan and equity bridge

9 loan. Equity funding will be provided by affiliates of Invenergy Investment and/or other

10 investors.

11 Q Will any public funding by used for the Project now or in the future?

12 A No public funding or financing will be used to construct the Project at any time. BEI1

13 has no agreements with any public entities, and has not made, and does not intend to

14 make, any arrangements for funding with any public entities. The Project will be entirely

15 privately funded.

16 Q Does BRE I1 intend to use any property owned by the State, any subdivision of the

17 State or any public Board, Commission or similar entity?

18 A No,

19 Q Has any agreement for abatement of taxes been made concerning the Project?

20 A No.

21 ECONOMIC BENEFIT FROM THE PROJECT

22 Q Is development of the Project in the public interest? Kevin E. Parzyck Direct Testimony Page 20

I A Absolutely. The Project provides generation of needed electric energy for the power grid

2 that serves residents and businesses throughout West Virginia and the East-Central

3 United States. Furthermore, this service is not being provided at the financial risk of the

4 public.

5 Q How many workers will be needed during construction?

6 A Construction of the Project will require approximately 150 workers during construction.

7 The time period of construction is expected to be approximately 6-9 months.

8 Q Has BRE I1 begun preparation of a work force for construction?

9 A Yes. BRE I1 has executed an Agreement with the Charleston Building and Construction

10 Trades Council, AFL-CIO and the West Virginia State Building and Construction Trades

11 Council, AFL-CIO and has agreed that BRE I1 will require its construction contractor(s)

12 to be bound by a Project Labor Agreement with the Building Trades for labor used in the

13 construction of the Project.

14 Q Please identify the tax benefits the Project will bring to the local and State economy.

15 A In terms of taxes, it is anticipated that the two Projects together (Beech Ridge and BRE

16 11) will pay in excess of $600,000 in annual property taxes, of which $200,000 relates to

17 BRE 11, and be among the top five property taxpayers in Greenbrier County. A large

18 portion of this revenue will benefit Greenbrier County Schools. The two Projects will

I9 also pay approximately $200,000 annually in taxes to the State of West Virginia, of

20 which $75,000 relates to BRE 11.

21 Q Will there be any benefits to the local economy in the way of local purchases during

22 construction of the Project? Kevin E. Parzyck Direct Testimony Page 21

1 A Based on experience with other proje t f this magniti de and scope, construction

2 contractors and the various subcontractors purchase most of their goods and services

3 locally. Additionally, BRE I1 is in the unique position of having knowledge of the impact

4 on the local economy during the construction of Beech Ridge. Therefore, we estimate the

5 Project will spend over $2.5-$3.0 million on West Virginia businesses during

6 construction, including payment of contract sums to local subcontractors and wages to

7 local workers.

8 Q Does this conclude your testimony at this time?

9 A Yes, it does.

10 APPENDIX A

Kevin E. Parzyck Vice President, Development

Education: 0 Bac,,elor of Science Degree in Civil Engineering, The University of Michigan, Ann Arbor, MI, 1980 0 Master of Engineering Degree in Structural Engineering, The University of California, Berkeley, CA, 1985

Professional Licenses: 0 Licensed Structural Engineer, State of Illinois 0 Licensed Professional Engineer, States of Illinois & New York

Professional Experience: 0 2008 - 2012: lnvenergy LLC 0 Overseen the development of over 800 MW of operating wind projects to date, with a similarly-sized portfolio under advanced development. 0 Responsible for all aspects of wind power development efforts including land easement agreements, transmission interconnection efforts, local, state and federal studies and permitting and project financing. 0 Coordinate efforts during construction and transition to operating team for long-term management of wind power facilities. 0 1996 - 2008: Wireless Phone Industry 0 Director of site development for the leasing and construction of wireless phone transmission towers and telephone switching facilities. 0 Responsible for all land, permitting and construction efforts for 200 foot cell tower installations. 0 Coordinated efforts to balance community and network needs in siting facilities throughout zoning process. 0 1981- 1996: Structural Consulting Engineer 0 Structural analysis and design of nuclear power plant modifications to meet NRC regulations. 0 Design of structural systems for high-rise office and residential buildings, schools and municipal facilities 0 Prepared and presented permit documents to municipalities for the approvals and permits for a variety of building facilities.