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City of South Bend, IN — Department of Public Works <br />GESC: Central Fire Station & MLK Dream Center Solar PV <br />Financial Guarantees <br />^� V� VEREGY <br />Throughout the engineering process, Veregy compares and optimizes cost to savings during the design <br />process to provide the City of South Bend with the best value project. Veregy will also work with the City <br />to find the most financially viable option for their project. Below is a summary of financial assumptions <br />and results, with a sample cashflow provided later in this section. <br />An energy escalation rate of 6% was used for the financial analysis. Veregy believes this is a conservative <br />application for the financial analysis considering escalation of energy in Indiana has been upwards of <br />10% annual increase over the past five years. Also analyzed in the financial model was the application <br />of Federal benefits from the Inflation Reduction Act (IRA). The IRA provides for a base of 30% direct pay <br />to the City of South Bend. The City can also sell the environmental attributes from their solar to states <br />like Ohio through Solar Renewable Energy Credits (SRECs). As part of our process, Veregy will assist <br />the City in selling their SRECs for additional revenue at no cost. <br />Fire Department Lighting <br />$607,514 <br />Fire Department Solar <br />$507,383 <br />MLK Center Solar <br />$391,103 <br />Project Total <br />$1,506,000.00 <br />ENERGY SAVINGS CALCULATIONS <br />The project is in the preliminary stages, so final savings calculations have not been developed for all <br />measures. For solar arrays, the savings calculations were developed using an industry standard <br />modelling program called Helioscope. The outputs of these models are included in the appendix. For <br />other ECMs, savings were based on industry standard practices and final calculations will be done and <br />provided after selection. <br />INCENTIVES <br />The City of South Bend would realize Inflation Reduction Act incentives in the amount of approximately <br />$400,000 based on final sale price of solar installations. These monies are applied for the tax year <br />following system start up and are paid that same year. Additional savings may be available; however, <br />we modeled the base IRA amount. <br />DISCLOSURES <br />Veregy is not working with any financial institutions for the benefit of this project. <br />Page 115 <br />