10/28/2011




                              Distributed DBOF Water Resource Solutions
                              Ed Clerico, CEO
                              October 4, 2011




    Water Reuse – 24 Years of DBOF Projects


     • Over 40 systems using direct
     and indirect water reuse
     • Residential, Commercial,
     Institutional, Industrial
     • Water Reuse of 25%-95%
     providing significant reduction in
     water and wastewater demands
     • Flush water, cooling, laundry,
     irrigation applications
     • Wastewater mining and
     centralized system load
     shedding



2




                                                                                  1
10/28/2011




Ridgewood, NJ- 20 Yr DBOF – Biogas/Solar

                                              Optimizing
                                              Renewable
                                              Energy via
                                              Solar + Internal
                                              and External
                                  Biosolids
                                              Carbon



                        Heat
                                              Sources
                                              Goal = Net Zero
                                              Energy




3




Wetland Based Passive Treatment Mechanisms

    40 Wetland Based Treatment Systems – MN and GA –
    Conserving Energy, Carbon Sequestration, Improving
    Biodiversity – Low Cost Future CSO Solutions




4




                                                                         2
10/28/2011




How We Innovate – Creative Finance and Creative Delivery - DBOF


    Create via Design Build – assume risk of implementation
    Eliminate multiple contractor, multiple phase liability

    Manage via long term Operation – assume risk of functional
    performance
    Include operating functions into the design process and control ultimate
    performance

    Direct Investment – Finance – assume risk of financial performance
    Sponsor direct investments and funds into niche utility asset types as a
    blend of debt and equity, sometimes partnering with governmental
    agencies and funding mechanisms (PPP)

    NSU Water Infrastructure
    Profitable long-term assets that provide appropriate risk/reward profile


5




Why These Innovations Occurred – Innovation Drivers

    • Scarce resource or lack of adequate supporting
    infrastructure
        • Inadequate sustainable water supply
        • Overflowing or noncompliant wastewater system
    • Favorable economics
        • Property values were adequately high – cost of
        innovation was small (typically < 1.5% of construction)
        • Lower life cycle costs – superior TBL outcome
        • Immediate operating and capital cost benefits
    • Strong environmental initiatives
        • Green Building
        • Need to reduce environmental impacts

6




                                                                                       3
10/28/2011




How These Innovations Were Implemented

      •Entrepreneurial drive
          • Passion for innovation and new solutions
          • Willingness to take risk
          • Right mix of technical, functional and financial capability
      • Leadership
          • Top command establishes the mission with clarity and
          conviction
          • Organizations align and have good integrity – New York
          City Buildings Sustainability Board as example
      • Collaboration
          • Willing regulators and existing service providers –
          willing to accept change
          • Creative planners and developers
7




Responsible Management Entity as Distributed Service Provider


                                                     Existing Utility/ Govt Entity
                Regulators                             Association/Co-Op/etc
                                                  Services           Ground
                                                  Fees $
                                                  Service    Fees   Lease/Site
                                                                    Shared Savings
                                                                     Services

       RME Assets                        Responsible
                                         Management            $ Ownership/Financing-
                                                                  $  Debt/Equity
                                         Entity (RME)
    IPP WWTP – Co-Owned by SPV         Water/Energy/Nutrient
                                             Services
                Design Build                                        Own/Operate


          Design                 Construction          Operations               Repair &
                                                                                Replace

8




                                                                                                   4
10/28/2011




 Integrated Systems Thinking: Reuse and Regeneration

                                                                                           System Optimization

                                                                                           Water: Reuse

      ENERGY                                                NUTRIENTS
                                                                                           ENERGY: Renewable: Biogas
                                                                                           Efficiency: Heat Pump
                              WATER
                         Efficient Source & Use:                                           NUTRIENTS:
                          Potable, Non-potable                                             Primary Nutrients: NPK
                          Efficient Treatment :                                            Soil Addatives
                    Biomimetic Systems (storm, waste)

                         Efficient Total Reuse:
                                                                                           SOLID BY-PRODUCTS:
                     Water, energy, nutrients, solids                                      Carbon Sources: Beneficial
                                                                SOLID                      Reuse
 VEGETATION
                                                            BY-PRODUCTS                    VEGETATION:
                                                                                           Inedible, Edible
                                                                                           Carbon Sequestration
                                                                                           Biomass

 9




 Financially and Environmentally Superior Results




     Cheaper to Build, Operate and Maintain than most conventional systms:

     Costs40% less to build.            Cuts fossil fuels by 60%                                                              .


     Costs 60% less to operate.         Uses 50% less water.


     Meets 100% of water safety standards.




                                                        * Operating performance based upon NSU track record, and returns, internal model.



10




                                                                                                                                                    5
10/28/2011




     Integrated DBOF Service


                                   Master Plan
                                                            Master Plan


                                  Invest/ Own



      Operate


                                                                Design
                                  Regenerate


                Build
                                     Build



11




                               Thank You
                               Ed Clerico, CEO
                               Ed.clerico@natsyssolutions.com
                               O: 908-359-5129
                               C: 908-963-2556




                                                                                  6

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Natural Systems Utilities

  • 1. 10/28/2011 Distributed DBOF Water Resource Solutions Ed Clerico, CEO October 4, 2011 Water Reuse – 24 Years of DBOF Projects • Over 40 systems using direct and indirect water reuse • Residential, Commercial, Institutional, Industrial • Water Reuse of 25%-95% providing significant reduction in water and wastewater demands • Flush water, cooling, laundry, irrigation applications • Wastewater mining and centralized system load shedding 2 1
  • 2. 10/28/2011 Ridgewood, NJ- 20 Yr DBOF – Biogas/Solar Optimizing Renewable Energy via Solar + Internal and External Biosolids Carbon Heat Sources Goal = Net Zero Energy 3 Wetland Based Passive Treatment Mechanisms 40 Wetland Based Treatment Systems – MN and GA – Conserving Energy, Carbon Sequestration, Improving Biodiversity – Low Cost Future CSO Solutions 4 2
  • 3. 10/28/2011 How We Innovate – Creative Finance and Creative Delivery - DBOF Create via Design Build – assume risk of implementation Eliminate multiple contractor, multiple phase liability Manage via long term Operation – assume risk of functional performance Include operating functions into the design process and control ultimate performance Direct Investment – Finance – assume risk of financial performance Sponsor direct investments and funds into niche utility asset types as a blend of debt and equity, sometimes partnering with governmental agencies and funding mechanisms (PPP) NSU Water Infrastructure Profitable long-term assets that provide appropriate risk/reward profile 5 Why These Innovations Occurred – Innovation Drivers • Scarce resource or lack of adequate supporting infrastructure • Inadequate sustainable water supply • Overflowing or noncompliant wastewater system • Favorable economics • Property values were adequately high – cost of innovation was small (typically < 1.5% of construction) • Lower life cycle costs – superior TBL outcome • Immediate operating and capital cost benefits • Strong environmental initiatives • Green Building • Need to reduce environmental impacts 6 3
  • 4. 10/28/2011 How These Innovations Were Implemented •Entrepreneurial drive • Passion for innovation and new solutions • Willingness to take risk • Right mix of technical, functional and financial capability • Leadership • Top command establishes the mission with clarity and conviction • Organizations align and have good integrity – New York City Buildings Sustainability Board as example • Collaboration • Willing regulators and existing service providers – willing to accept change • Creative planners and developers 7 Responsible Management Entity as Distributed Service Provider Existing Utility/ Govt Entity Regulators Association/Co-Op/etc Services Ground Fees $ Service Fees Lease/Site Shared Savings Services RME Assets Responsible Management $ Ownership/Financing- $ Debt/Equity Entity (RME) IPP WWTP – Co-Owned by SPV Water/Energy/Nutrient Services Design Build Own/Operate Design Construction Operations Repair & Replace 8 4
  • 5. 10/28/2011 Integrated Systems Thinking: Reuse and Regeneration System Optimization Water: Reuse ENERGY NUTRIENTS ENERGY: Renewable: Biogas Efficiency: Heat Pump WATER Efficient Source & Use: NUTRIENTS: Potable, Non-potable Primary Nutrients: NPK Efficient Treatment : Soil Addatives Biomimetic Systems (storm, waste) Efficient Total Reuse: SOLID BY-PRODUCTS: Water, energy, nutrients, solids Carbon Sources: Beneficial SOLID Reuse VEGETATION BY-PRODUCTS VEGETATION: Inedible, Edible Carbon Sequestration Biomass 9 Financially and Environmentally Superior Results Cheaper to Build, Operate and Maintain than most conventional systms: Costs40% less to build. Cuts fossil fuels by 60% . Costs 60% less to operate. Uses 50% less water. Meets 100% of water safety standards. * Operating performance based upon NSU track record, and returns, internal model. 10 5
  • 6. 10/28/2011 Integrated DBOF Service Master Plan Master Plan Invest/ Own Operate Design Regenerate Build Build 11 Thank You Ed Clerico, CEO Ed.clerico@natsyssolutions.com O: 908-359-5129 C: 908-963-2556 6