Advantages of Distributed Generation
Distributed generation is a viable, cost-effective alternative to improving and upgrading electrical distribution systems. DG resources can provide a number of significant advantages over large, centralized generating plants, including:

• Siting Flexibility - Given the modular design of our gas turbine electrical generators, DG resources can be located at numerous locations within a utility's service area. This aspect of DG equipment provides a utility tremendous flexibility to match generation resources to system needs
• Improved Reliability - DG facilities can improve grid reliability by placing additional generation capacity closer to the load, thereby minimizing impacts from transmission and distribution (T&D) system disturbances, and reducing peak-period congestion on the local grid. Furthermore, multiple units at a site can increase reliability by dispersing the capacity across several units instead of a single large central plant.
• Improved Security - The utility can be served by a local delivery point. This significantly decreases the vulnerability to interrupted service from imported electricity supplies due to natural disasters, supplier deficiencies or interruptions, or acts of terrorism.
• Reduced Loading of T&D Equipment - By locating generating units on the low-voltage bus of existing distribution substations, DG will reduce loadings on substation power transformers during peak hours, thereby extending the useful life of this equipment and deferring planned substation upgrades.

• Localized VAR Support - Gas turbine electrical generators can be operated between 0.8 leading and 0.8 lagging power factor, reducing the need for VAR support from the rest of the transmission grid. This capability will further reduce transmission system loadings, enabling increased power transfer through congested portions of the grid.
• Avoided T&D System Upgrades - Through careful T&D planning and coordination with existing power resources, DG resources can be sited in a manner that will reduce T&D system congestion, thereby avoiding the expense of permitting and installing new substations and transmission lines.
• Rapid Implementation - Alliance's DG systems are modular and can be installed in increments of up to 11 MW at selected distribution substations or utility customer sites. Units can be fully operational in 9 to 12 months, including permitting, design, construction, and testing.
• Ultra-Low Emissions - Gas turbine engines fitted with the Xonon™ technology produce emissions with less than three (3) parts per million (ppm) NOx. The significant environmental benefits of the Xonon™ technology facilitate the permitting process for Alliance Power projects, and enable us to quickly obtain a permit for your project.

Flexible Contract Structured to Utility's Requirements

Alliance can provide a range of development services, from turnkey design/build services to complete privatization, including permitting, design, construction, financing, project ownership, operation, and maintenance of the DG facility. Based on the type of service requested, the Alliance approach to electrical generating projects can yield the following benefits:

Competitive Project Costs. Our proven DG projects can provide exceptional value at a competitive price. For example, the estimated installed cost for a typical, GE-10 gas turbine installation (11 MW capacity) at a substation is approximately $850 per kilowatt (kW), including gas compression and other facilities. For locations with nearby gas pipelines and adequate transformer capacity, the capital cost can be as low as $700 per kW. Larger gas turbines (LM6000 or 2500) typically have slightly lower costs due to greater economies of scale.

Economical Electricity Purchase Rates, including Project Buy-out. Our competitive financing rates allow us to provide electricity under long-term Power Purchase Agreements (PPAs) as low as $0.06 per kWh, including the cost of natural gas supplies. Our PPAs can be tailored to 10, 15, or even 25 years to meet the needs of a utility and can provide base-load, mid-peak, or peaking capacity from DG facilities. We can structure PPAs to provide a fixed-price take or pay contract for capacity and energy, a long-term capacity lease with fixed and incremental O&M costs, or an innovative indexed-tolling capacity pricing. Our contract can also include provisions for our clients to purchase the project after construction or after several years of demonstrated operation.

Total Energy Costs - Energy pricing offered from our DG projects is for electricity at the delivery point. When located on the utility side of the distribution meter, our generation is typically not subject to any congestion or transmission delivery charges, which may further reduce hidden costs.

Project Implementation

Alliance will partner with clients to determine the most cost-effective strategy for implementing a DG project within each utility's local electrical distribution system. We work with a client's staff to determine optimum locations for DG resources by considering electrical demands, reliability needs, gas supplies, interconnection issues, and grid congestion in the siting evaluation. We also determine a utility's preferred contracting approach to considering a DG project and use this information to prepare a detailed price proposal and preliminary contract for the utility. Only if the proposal provides an effective and economical power supply solution and is authorized by a utility's management do we expect to be able to continue to proceed with the complete development of a final DG project.

Alliance offers utilities a cost-effective and beneficial strategy for addressing the significant challenges facing utilities today. Please call us today so that we can begin discussing and developing an optimum DG solution that meets your local energy needs in this rapidly changing marketplace.