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Exponent, Inc. (Energy Clients) March 1, 2010

Exponent (Energy Clients)

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Page 1: Exponent (Energy Clients)

Exponent, Inc. (Energy Clients)

March 1, 2010

Page 2: Exponent (Energy Clients)

Company Profile

Exponent is a scientific and engineering consulting firm that provides solutions to complex technical problems. Ourmultidisciplinary team of scientists, engineers, physicians, and business consultants performs in-depth research andanalysis in more than 90 technical disciplines. At Exponent, we pride ourselves on the high quality of our approximately900 employees. More than 600 are degreed technical professionals, and more than 350 have earned an M.D. or Ph.D.Operating in 19 regional offices and 4 international locations, Exponent is publicly traded on the NASDAQ exchange underthe symbol EXPO.

Over the years, we have received recognition for assisting clients with their most important challenges or dire disasters.We have investigated most of the major industry crises that make the news: the grounding of the Exxon Valdez, thewalkway collapse at the Kansas City Hyatt, the flooding of downtown Chicago, and the attack on the World Trade Center.However, most of our work is actually helping clients assess their daily technical issues and make informed businessdecisions.

The problems that Exponent tackles take many forms other than disasters or accidents involving a product or property. Itmay be a technical, health, or environmental issue related to a developing product, such as potential radiation from cellphones, whose resolution needs to be accurate, innovative, and cost effective. A regulatory issue may have a criticalimpact on a client's future business, and may turn on how the product can be sold or serviced. Often, a client callsbecause a production facility is suffering unusual down time, or a production machine has failed, or the recently receivedcomponent parts just don't seem to work right. We assist clients contemplating any business transaction that requirescareful scientific research and analysis as part of the due diligence, including assessments of the value of intellectualproperty and patents.

When a major disaster strikes, the media is not far behind, and an affected client needs answers now. Our team willperform either in-depth scientific research and analysis, or very rapid-response evaluations, to provide our clients with thecritical information they need. The Exponent name is recognized for its integrity, objectivity, independence, andprofessionalism. Our corporate core values drive a commitment to client service that enables us to provide consistentlyhigh quality to client's world wide. We are proud to say that our in-house quality management system is certified to ISO9001. Exponent is also authorized by the General Services Administration to provide professional engineering services tofederal agencies. Our clients include a wide range of manufacturers, utilities, insurers, industry groups, governmentagencies, venture capital companies, and law firms. Our professionals have provided consulting services to many of theFortune 500 companies and numerous government agencies.

©2010 Exponent, Inc. All Rights Reserved. www.exponent.com 888.656.EXPO Page 2 of 26

Page 3: Exponent (Energy Clients)

Practice Areas and Offices

Exponent's integrated practices offer a multifaceted perspective that leads to innovative solutions that produce bottom-line results. Through our network of U.S. and international office locations, we offer more than 90 different disciplines,including capabilities in:

Environmental Sciences

Ecological & Biological SciencesEnvironmental & Earth Sciences

Health Sciences

Chemical Regulation & Food SafetyEpidemiology & Computational BiologyExposure AssessmentOccupational & Environmental HealthToxicology & Mechanistic Biology

Other Sciences

Human FactorsStatistical & Data Sciences

Engineering

BiomechanicsBuildings & StructuresCivil EngineeringElectrical & SemiconductorsEngineering Management ConsultingMaterials Science & EngineeringMechanical & AeronauticalThermal SciencesVehicle Engineering

Sectors

ConstructionDefense Technology DevelopmentEnergyMedical Devices & PharmaceuticalsVisual Communications

©2010 Exponent, Inc. All Rights Reserved. www.exponent.com 888.656.EXPO Page 3 of 26

Page 4: Exponent (Energy Clients)

Main Service Areas

The four main areas of consulting that Exponent provides are: Failure Analysis & Prevention, Environmental &EcoSciences, Health Sciences, and Technology Development

Failure Analysis and Prevention

Our Failure Analysis and Prevention practice is the nation's largest and most experienced consulting group thatspecializes in the investigation, analysis, and prevention of failures and accidents. Whether we are investigatingan incident that happened in the past, or assisting in the development of a new product or service, Exponentoffers specialized knowledge and resources to assist its clients in making informed decisions. We believe in amulti-disciplinary approach to scientific problems that provides new perspectives and insights and enablesdevelopment of creative, cost-effective solutions.

During the past 40 years, we have conducted more than 30,000 investigations in areas such as fires andexplosions, human performance, electrical engineering, civil and structural engineering, product and process riskassessment, and biomechanics.

Environmental and EcoSciences

Exponent's Environmental Sciences and EcoSciences practices have a large and diverse team of scientists,biologists, toxicologists, natural resource analysts, and engineers that provide proven, cost-effective, scientificallydefensible, and realistic assessments and solutions to complex environmental issues related to contaminated landand water, industrial and other development, and sustainability and restoration of resources, and technologiesand products. Our practices are nationally and internationally recognized for their expertise in environmental riskand impact assessment, ecotoxicology, natural resource damage assessment (NRDA), and ecological restoration.

Our services include environmental air quality evaluation, ecological and human health risk assessment,environmental economics analysis, natural resource damage assessment, site investigation and liabilitymanagement, toxic tort claims investigation, toxicology consultation, and water resources and water qualitymanagement. We offer technical, regulatory, and litigation support to industries that include mining and minerals,petrochemicals, forest products, shipbuilding, railroads, aerospace, and defense, along with trade associations andlaw firms.

Health Sciences

Exponent's Health Sciences practice specializes in solving complex problems related to health and theenvironment, especially problems that require an experienced, multidisciplinary team of scientists and regulatoryconsultants. Exponent has one of the foremost health sciences consulting practices in the United States. Ourscientists, physicians, and regulatory specialists provide unparallel, interdisciplinary expertise to evaluate the fullrange of environmental and public health issues that face our nation and the world. These issues include potentialhealth effects associated with environmental agents, chemicals, consumer products, food safety and nutrition, andpharmaceutical products. Indeed, members of our staff are leaders in developing the risk assessmentmethodologies that are essential to address the complexities of these health issues. Our national and internationalclients rely on us for incisive and objective assessments that address physical, chemical, and biologicalphenomena in order to arrive at solutions that can be relied upon to make important decisions.

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Technology Development

Exponent's Technology Development practice helps our Department of Defense clients stay current with andbenefit from rapidly evolving civilian technologies. Drawing on our multidisciplinary engineering, testing, andfailure analysis and prevention expertise, we identify and leverage the best in COTS (commercial off-the-shelf)technologies to create integrated combat systems and modules cost-effectively, without sacrificing reliability. Ourengineers and scientists work in the field alongside Soldiers, Sailors, Airmen, and Marines to ensure weunderstand your problems and to rapidly deliver solutions.

Additional Facilities and Resources

Vehicle Test and Engineering Center: Exponent operates a 147-acre Test and Engineering Center (TEC) inPhoenix, Arizona. This laboratory facility provides product development and testing support for a variety ofindustries. We study vehicle performance and re-create on- and off-road collisions under virtually every condition,for vehicles ranging from bicycles to tractor-trailers. We develop specific test methodologies to assist our clientswith their product development efforts. Our test facility includes a two-mile oval track, durability course, 10-acreskid pad, and 1,200-foot crash rail, allowing engineers to study vehicle performance and recreate collisions undervirtually every condition, for vehicles ranging from bicycles to tractor-trailers.

Materials Analysis Laboratory: Exponent operates laboratory facilities that provide comprehensive materialsanalysis services, including scanning electron microscopy (SEM), energy dispersive x-ray spectroscopy (EDS),high-magnification metallography, hardness testing, and surface evaluation. We provide lab capabilities formechanical testing, electronic testing, and chemical and thermal evaluation. We integrate our lab with a numberof Exponent's other 90 technical disciplines to offer complete programs in failure analysis, materials evaluation,and failure prevention.

Visual Communication: Exponent's visual communications staff combines art and science to help clients createcompelling, fact-based visual displays that communicate complex subject matter, conveying important informationto audiences unfamiliar with the matters at hand. We rely on pictures — printed, displayed on a computer,projected onto a screen, or presented as virtual reality — to reveal and explain what words alone cannot. Specificcomponents include animation, graphics, multimedia, video, and photography. Through these media, we presentcomprehensible explanations of complex issues, conveying important information to audiences unfamiliar with thematters at hand.

Comprehensive Database: Exponent also maintains one of the largest collections of computerized failure,accident, and incident data in the world. Our databases contain more than 350 million accident and incidentrecords on motor vehicles, air crashes, consumer products, fires, occupational injuries, and most other accident-related topics.

©2010 Exponent, Inc. All Rights Reserved. www.exponent.com 888.656.EXPO Page 5 of 26

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Construction Project Advisory Services

Overview

Exponent’s construction consultants represent amultidisciplinary team that offers Project Advisory Servicesto support your project from the programming and designphase, through project planning, throughout the course ofconstruction, and to project completion and close-out. OurProject Advisory Services include but are not limited to:

Critical Path Method (CPM) Schedule — Preparationand Review

Exponent provides Critical Path Method (CPM) schedulingservices, including baseline schedule and updatepreparation. These services also include CPM schedulereviews to ensure conformance with contract specificationsand other project requirements.

Project Team, Documentation, and Process Evaluation

Successful construction projects are the result of multipledecisions made by contrasting team members. Exponent hasthe experience and tools to evaluate the project team and itsdecision-making, operational, and administrative processes,to enhance its probability of succeeding. Industry studieshave shown that the final cost and schedule of a project arestrongly influenced by the quality and effectiveness of theproject team.

4D Modeling/Design Conflict Analysis

Exponent has specialized expertise in 4D modeling, which combines a 3D model of a project design with the projectschedule and/or cost and resources in order to create a “virtual” project model. 4D models help your project teambecome more effective in communicating, planning, analyzing, and optimizing project scope and schedule. Exponentalso provides 3D design conflict analysis services, which can be applied during the project’s design phase to identifypotential design errors and omissions (E&O) or constructability issues that could lead to delays and/or increasedproject costs. These services eliminate the tedious manual checking of 2D drawings to significantly reduce theexpensive consequences of incomplete and inaccurate design. Exponent can also provide after-the-fact E&O designconflict analysis services for use in dispute resolution.

Change Order Evaluation

With our broad experience and background in the construction industry, Exponent assists our clients with thepreparation, review, and evaluation of change orders to determine and quantify changes with respect to scope, time,and/or price. These services ensure that a client is fully considering the effects of a change on both the contract priceand time.

Time Extension Evaluation

In addition to our CPM scheduling services, Exponent provides time extension evaluation and Time Impact Analysis(TIA) services in the case of project delays and/or impacts, appropriately allocating the associated responsibility andcost for such delays and/or impacts.

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Cost Recovery Audit

The construction industry continues to find itself challenged by the administration and resolution of unexpectedchanges and claims. An alternative to the more traditional methods of dispute resolution is a “cost recovery” processthat blends the positive aspects of these traditional dispute resolution methods and attempts to reduce or eliminatesome of the more unpleasant aspects of those methods. Exponent’s Construction Consulting professionals have theexperience and expertise to assist in developing, implementing, and managing a Cost Recovery Audit.

Fraud Consulting, Investigations, and Internal Audit Co-Sourcing

Exponent’s staff has the ability to assist in the development of project controls, including ways to avoid fraud, waste,and abuse. The use of appropriate controls, verifying to see that controls are properly implemented, and effectiveproject team communications can minimize losses in this area. This experience also assists in the effectiveimplementation of Sarbanes-Oxley procedures. Exponent engineers and accountants can also manage or assistinternal audits with investigations of the project operations as a whole, or with specific allegations, if necessary.

Contract Compliance Reviews and Contract Closeout

Modern-day construction contracts incorporate many requirements, from material specifications to MBE compliancereporting to specific costing and billing processes. Exponent can enhance owner efforts to determine whether or notthe work bargained for was installed or invoiced in compliance with contract documents. Our geotechnical, structural,civil, and building technology engineers and auditors can enhance an owner’s capacity to monitor these issues. Thisservice can be performed at project end or on an interim basis.

©2010 Exponent, Inc. All Rights Reserved. www.exponent.com 888.656.EXPO Page 7 of 26

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Independent Engineering / Engineering Economics

Overview

Energy is a broad field for lenders, encompassing oil and gasprojects, midstream pipelines and terminals, fertilizer and biofuelsplants, downstream polymer and petrochemical facilities, andthermal power generating stations with private sector and state-owned company sponsors. Exponent provides expert engineeringand other services on behalf of lenders during loan originationand, upon financial close, during the construction and operationsphases of energy projects.

Exponent is highly qualified to assist during the origination phaseof energy project financings, providing technical due diligence andmarket analysis services on behalf of lenders. Such services haveincluded review of major equipment procurement contracts,

supplier capabilities, the technical capacity of sponsors and their contractor(s) to effectively manage and perform,design plans, conformance of project specifications with local and international norms and standards, necessarypermits and approvals from local authorities, EPC contracting strategy and structure, quality assurance/qualitycontrol (QA/QC) plans, and project economic assumptions. We can validate the suitability of the sponsor’s projectionsfor project construction costs and assess the probability of cost overruns (estimate contingencies). We evaluate thesponsor’s timetable for construction given the scope of an energy project and external factors such as resourcelimitations. Affected markets in need of analysis might include fuel supplies for a power project, or raw material andproduct markets for a project in the downstream segment. We are often called upon to provide risk assessments,audit borrower’s financial models or estimate project cash flows for analysis of key financial ratios. Exponent makesrecommendations to complete or improve the project’s investment and operations plans, if appropriate.

To assist financial institutions in administrating projects in their portfolios, Exponent has experienced andknowledgeable personnel for construction and operations phase monitoring of energy or oil and gas projects. Wework together with lenders to assure that the liquidated damages, cost controls, contingencies, and insurance policiesproposed by the sponsors for both construction and operation are sufficient. Once loan agreements are executed,Exponent provides oversight services during the project construction phase including cost monitoring and reportingas well as monitoring for contract compliance; engineering design, procurement and construction progress;environmental damage mitigation efforts; and schedule impacts related to major equipment fabrication and deliveryas well as cost monitoring and reporting. In addition, we inspect for the development of required infrastructure for aproject and provide certifications to the lenders with regards to financing at closing, disbursements, technicalcompletion, and final completion, as necessary.

During operations, we review the annual budgets for projects,including operating and maintenance expenses and sustainingcapital expenditures, and assess (when applicable) projectexpansion plans. Exponent can evaluate the operatingmanagement plan and technical aspects of all contractual materialrelated to performance guarantees and operations, andcompliance with applicable provisions and requirements. We havebeen asked to assess trends in raw material and productsmarkets, including furnishing updated estimates of supply anddemand in markets affecting project profitability and margins, andto provide review and comment on the borrower’s forecasts andprojections. As part of the review of operating and maintenancecost projections, we provide annual (or more frequent) monitoringreports during the operations phase.

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Exponent’s energy consultants, business analysts, and discipline engineers provide support to lenders throughout thedesign and construction process. Our capabilities extend to analyzing or supporting claims during projectconstruction. Moreover, we can address complex engineering problems on energy projects either in construction oroperations.

This technical, market analysis and project economics support is not just for lenders – we also provide support toproject companies, and as needed/requested, the attorneys whom support the transactions.

Exponent has helped energy and alternative fuels project developers with site selection studies, marketing plans andstrategies, feasibility studies, process technology assessments, preliminary capital and conversion cost estimates,analysis of supply chain logistics, and development of project economics/financing models and project memoranda.

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Energy Economics

Overview

Technology comparisons frequently come down to a need to makedecisions involving engineering economics. Companies developingenergy projects or considering investments in alternative orrenewable energy technologies need reliable and considered viewsof competing technology options and their comparativeeconomics. Exponent’s experienced staff provides clients withexpert advice on energy-industry economics and the key driversfor oil, gas, and chemical projects.

Grounded in a thorough knowledge of the underlying engineeringprinciples, our specialists are highly qualified to analyze technicaland economic aspects at each step in the value chain, fromwellhead or mine mouth to burner tip. We have experience inevaluating hydrocarbon processing and power project revenuesand costs. Exponent analysts understand energy markets, and plant and pipeline operations, and this broad expertiseallows us to assist clients in acquiring a fundamental grasp of conversion costs, transportation costs, and supply-chain logistics. We can assist in determining upstream, midstream, and downstream oil and gas project feasibility. Ifyou have issues that involve exploration and development costs, reserves growth, overall plant production costs,returns on capital employed, debt service coverage ratios, assessment of risk, or the economics of capacityexpansions, Exponent provides the technical and business consultants to support your analysis.

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Fossil Plant Services

Overview

Fossil fuels—coal, oil, and natural gas—are a non-renewable source ofenergy. Formed from plants and animals that lived up to 300 million yearsago, fossil fuels are found in underground deposits. The fuels are burned torelease the chemical energy that is stored within them. Over 85% of ourenergy demands are met by the combustion of fossil fuels. The burning offossil fuels produces carbon dioxide, of which it is estimated that naturalprocesses can absorb only about half, so there is a net increase ofatmospheric carbon dioxide per year. Carbon dioxide is one of thegreenhouse gases that is alleged to contribute to global warming, causingthe average surface temperature of the Earth to rise, which some climatescientists believe will cause major adverse effects.

We provide our clients with a team of engineering, construction, environmental, risk, and health specialists that isunique in the industry. The value that Exponent brings to its clients includes:

Proven experience on high-profile projects of national and international significance

Current, in-depth functional knowledge of engineering fundamentals: mechanical, structural, metallurgical,chemical, electrical, environmental, and others

Scientific understanding and experience in environmental and health perspectives

Convergence of our skills in risk, reliability, and vulnerability analyses

Operational knowledge of the fossil plant industry, from construction to O&M to public health and ecological riskmanagement.

Exponent’s engineering services address the utility industry’s needs for design, construction, repair, and retrofit, witha focus on:

Risk and Reliability Assessment

Reliability and Maintenance Programs

Remaining-Life Assessment

Safety and Process Risk Management

Thermal Sciences (Fires and Explosions)

Material Deterioration (Metal, Concrete)

Pipe/Boiler Integrity

Electrical Engineering

Corrosion Science and Engineering

Construction Consulting

Structural Performance

Root-Cause and Corrective-Action Assessment

Exponent has been asked to evaluate environmental and health issues relating to utility generating plants for manyyears. We have evaluated cutting-edge issues and technologies, and monitored and assessed ecological and humanhealth impacts. Our expert environmental services include a broad range of capabilities, such as:

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Greenhouse Gas Emissions

Mercury Deposition

Air Quality Studies/Permitting

Air Dispersion Modeling

Human Health Risk Assessment

Ecological Assessment

Water Quality and Hydrology

Site Investigation and Remediation Consulting.

©2010 Exponent, Inc. All Rights Reserved. www.exponent.com 888.656.EXPO Page 12 of 26

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Nuclear Plant Services

Overview

Exponent offers unparalleled multi-disciplinary expertise and rapid response capabilities to provide stewardship inaddressing complex engineering and scientific problems. We provide our clients with a team of engineering,construction, environmental, risk, and health specialists that is unique in the industry. The value that Exponentbrings to its nuclear power generation clients includes:

Proven experience on high-profile projects of national and international significance—often in a dispute resolutionsetting

Deep, functional knowledge of engineering fundamentals: mechanical, structural, metallurgical, chemical,electrical, and more

Nuclear power generation operational knowledge

Scientific depth in environmental and health perspectives

Convergence of our skills in risk, reliability, and vulnerability analyses

Exponent entered the nuclear power consulting business in 1974,when the firm, then known as Failure Analysis Associates, wasselected to provide technical support to the Electric PowerResearch Institute (EPRI) in the areas of structural integrity,materials behavior, and life prediction. Since then, we haveentered into commercial services, instrument manufacturing, andsales of computer software in direct support of electric utilitiesand original equipment manufacturers. Our staff has providedexpert testimony for a wide range of industrial and governmentalclients. We continue to rank among one of the largest consultingfirms in the number of plant component remaining-lifeassessments and failure investigations conducted, as well as inthe volume of sponsored research and development contracts

awarded. In addition, we have invested our own funds in developing advanced services and equipment for power-plant maintenance, asset management, and failure prevention.

Exponent’s project experience includes nuclear component reliability and remaining-life assessments for reactorpressure vessels, steam generators, and primary piping. In addition, Exponent has evaluated hundreds of equipmentfailures for the nuclear power generation industry, spanning a wide range of component types, including steamgenerators, reactor pressure vessels, reactor coolant pumps and pump seals, diesel generators, valves, piping,electric generators, and turbines. With conversion, upgrade, development, and commercialization projects around theworld, Exponent is reputed for creating innovative approaches to new electric power-plant configuration andmaintenance management of existing plant equipment and systems. By combining the methods of component andplant condition assessment with reliability analysis and economic optimization, we help utilities reduce costs andincrease productivity. In addition to plant mechanical integrity-related services, Exponent personnel have experiencein various aspects of power system design, control, operation, and maintenance. Our experience includesdevelopment of procedures for outage/maintenance management, design for reliability, reliability-centeredmaintenance for high-voltage substations, on- and off-line diagnostics for transformers and breakers, control andprotection systems, plant O&M training, and failure analyses.

Exponent’s engineering services address the utility industry’s needs for design, construction, repair, and retrofit, witha focus on:

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Business improvement consulting

Licensing and regulatory compliance

Human performance

Risk and reliability assessment

Safety and process risk management

Reliability and maintenance programs

Root cause and corrective action assessment

Engineering (equipment and systems)

Remaining-life assessment

Thermal sciences (fires and explosions)

Material deterioration (metal, concrete)

Pipe/boiler integrity

Corrosion science and engineering

Construction consulting

Structural performance

Environmental consulting

Health and safety

Spent-fuel storage and transportation

Nuclear utility work has required stringent quality assurance requirements. Exponent is ISO 9001 certified andconducts work in strict accordance with a quality control program that meets 10 CFR 50, Appendix B.

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Combustion Equipment

Overview

The consultants at Exponent perform engineering analyses of boilerand turbine systems for the power generation industry. Our multi-disciplinary engineering team has experience with the equipment,processes, and controls associated with combustion turbines, steamturbines, and power boilers. We consult on issues related to radiantand convective heat transfer; multiphase fluid flow; solid, liquid, andgaseous fuel combustion; pollutant formation and abatement; materialsuitability; and control system failures.

Exponent engineers are principal members of the NFPA 85 (Boilers &Combustion Systems) technical committee of the National FireProtection Association, and the C-16 (Thermal Insulation) and F-03(Gaskets) technical committees of the American Society of Testing and

Materials (ASTM).

Turbines

Exponent has investigated many steam and combustion turbine failures. Our expertise in the interaction betweenhigh-temperature fluids and rotating machinery is recognized internationally. Specifically, our thermal and fluidexperts perform acoustic, fluid dynamic, and vibrations analyses. We are familiar with turbine control systems andtheir limitations under operational upset conditions. We have consulted on the consequences of fuel changes incombustion turbines.

Boilers

Exponent has consulted on all aspects of boiler design and operationand for all sizes and styles of boilers. Often we are called upon toinvestigate breaches in pressurized water or heat-transfer fluid vesselsand piping, fuel explosions, structural failures, water chemistry andcorrosion, and burner safeguards. We have performed third-partyreviews of the configuration of combustion instrumentation andcontrols, and their adherence to relevant fire protection standards.

Air Pollution Control

Exponent engineers have analyzed issues related to rapid performancedegradation of SCR catalyst systems for NOx control. We havedeveloped methods for estimating release rates of particulate matter from fabric filter baghouses with one or morefailed bags. Our experts have consulted on carbon burnout issues in coal flyash, and rates of mercury volatilization(and downstream particulate recapture) in coal combustion.

Materials

We have addressed problems associated with refractory degradation and premature thermal insulation failure. Weconsult on steam blowouts from failed gaskets, and we interact with metallurgists in our Materials practice to assistwith fluid or thermal issues that can create conditions for boiler tube or turbine blade failures. Our experts havetestified on the historical use of asbestos insulation and gaskets in power generation, including the chronology ofsuitable alternatives becoming available.

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Managing Energy Industry Vulnerabilities to ClimateChange

Overview

Depending on projections from climate model(s) or from historical trends, climate change could lead to substantialimpacts on properties, facilities, and the workforce or it may have minimal to no influence. The various outcomesreflect regional variations as well as uncertainties in the methods for estimating impacts. Whether the concern isphysical, ecological, or human health impacts, catastrophic or mild effects, immediate or long-term consequences,there can be little doubt that climate change will affect the ways that companies conduct business and manage risk.The quantification of future potential impacts and associated uncertainties requires understanding the drivers,effects, and potential management strategies at regional levels for enterprise risk management.

Areas of particular importance for risk management include:

Climate-related changes to the financial value or performance of client’s operations and assets

Impacts of the clients’ emissions upon the biological, ecological, and physical environment

Extreme weather events such as drought, flooding, and hurricanes

Impact on company staff of infectious disease, heat stress, waterborne diseases, and injuries from extremeweather events

Integrating climate change in traditional catastrophe modeling

Liabilities associated with corporate climate change management

Litigation associated with business continuity such as interruptions in the supply chain, utility services, andcommunications

Litigation and liabilities associated with contract disputes from transactions and acquisitions

Climate change also presents business opportunities for new products and services for mitigating and offsettinggreenhouse gases, and encouraging sustainable practices that lower risk profiles and vulnerability. Exponent providesenergy industry clients with sophisticated analyses that combine the results and reliability of regionally-relevantclimate models with available trend analyses. This analysis provides a range of predictions and associatedprobabilities along with the consequences. This information provides the technical bases for judging risks to assetsand operations. It can also be used for estimating risk exposure and for developing appropriate risk managementstrategies meaningful to specific client needs and degree of vulnerability.

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Exponent Climate Change Services

Analysis of climate change models and uncertainty analysis within a regional context and in a format that canthen be applied to management decision-making

Application of a transparent and comprehensive vulnerability framework to provide risk analysis and riskmanagement recommendations that are specific to the challenges facing a specific energy industry company, orthe industry as a whole

Economic exposure analysis from climate change risks

Land-use planning and management analysis of natural resources such as forestry, agriculture, and wetlands tomitigate climate change effects

Identification and analysis of sustainable business practices to decrease exposure to climate change risk

Product liability analysis of green technologies

Analysis of the liabilities that might arise from carbon-offset projects

Creation of vulnerability maps for various outcomes and associated probabilities

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Utility Risks & Impacts in Carbon Capture & Storage

Overview

Over 85% of U.S. energy demands are met by the combustion of fossil fuels (coal, oil, and natural gas). This processalso produces carbon dioxide, which is a greenhouse gas (GHG). Carbon Capture and Storage (CCS) is one of thesolutions being proposed to reduce GHG emissions. CCS is really a group of technologies for capturing CO2 at apower plant before it is emitted, transporting it to a suitable storage site, and storing it on a long-term basis.

Carbon Capture

Carbon capture involves removing some or all of the CO2 rather than releasing it to the atmosphere. Doing so mayinvolve process modifications at the pre-combustion (gasification), combustion (oxy-fuel), or post-combustion(solvents/sorbents) stages. The success of carbon capture depends on the technical and cost effectiveness of theproject, and demonstration of regulatory compliance. Engineering economic studies should be conducted to evaluatethe operational risks and cost of carbon capture at the plants. These would include comparison with otheralternatives to reduce GHG emissions, such as boiler efficiency upgrades or co-firing with biomass. Generators alsoneed to consider financial options that may be available, such as purchasing carbon offsets, in managing their GHGemissions. To reach that end, Exponent offers the following skills:

Regulatory compliance reviews

Process performance evaluations

Design reviews and feasibility studies

Cost/benefit analyses

Risk analyses

Chemical analysis

Mechanical, electrical, and structural evaluations

Combustion equipment performance

Reliability, availability, maintainability (RAM) studies

Metallurgy/materials evaluation

Corrosion science and technology

Transportation

Once the CO2 has been captured, it will need to be transported to a suitable site for long-term storage. Because ofthe volumes, current thinking is that it will be transported via pipelines either as a gas or compressed into liquidform. In either case, it will probably require additional preparation at the site, which may involve new treatmentfacilities. Exponent has extensive experience evaluating natural gas and liquid natural gas pipelines and is familiarwith the technical and regulatory aspects of that industry. Based on that experience, Exponent can provideassistance in the following areas:

Evaluation of treatment required for transport

Loss-of-product risk in transport evaluations

Hazard risk in transport analysis

Metallurgy/ materials evaluation

Corrosion science and technology

Cost and liability assessment and strategy development

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Carbon Storage

Currently, the leading candidate options for long-term storageinclude depleted oil and gas reservoirs, operating oil reservoirs(where the CO2 is used for enhanced recovery operations) anddeep saline formations (both onshore and offshore). Some ofthese potential sites may already be well characterized, whileothers may require more extensive analysis to assess theirsuitability. Our staff has the needed geological, geotechnical, andgeochemical skills and experience to assist with sitecharacterization.

Once the site is selected, wells will be constructed usingtechnology and techniques that have been developed in the oiland gas industry. Because of our involvement in major projects in

that industry, our staff is very familiar with the associated technology.

Monitoring will be necessary to demonstrate secure storage on an on-going basis. Direct monitoring tools andtechniques can be used to measure concentrations of CO2 near the well bore; however, most monitoring will beundertaken by indirect methods such as seismic, gravity, electromagnetic surveys, and satellite imagery. Our staffhas experience with these techniques.

Requirements for decommissioning after the storage site is full will undoubtedly be included in the future regulationsgoverning CCS. At the very least, a decommissioning plan will have to be prepared, submitted, and maintained. Thatplan will most likely have to include quantification and modeling of residual risk. Our staff has helped prepare manysuch plans.

With expertise in local, state, and federal regulatory requirements, environmental impact assessment, ecology,toxicology, chemistry, chemical forensics, geology, hydrology, and environmental engineering, our staff provides arange of services that includes the following:

Formation geochemistry

Geological engineering

Reservoir engineering

Aquifer engineering

Salt dome engineering

Site characterization

Geotechnical testing

Geochemical and operational consulting

Environmental chemistry and formation geochemistry

Environmental analyses of drilling fluids, and drilling pits and ponds

Containment monitoring

Drilling technology

Occupational health

Civil engineering (subsidence, heave, and hydraulic fracturing)

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In summary, our staff performs risk analysis ranging from compliance to total business-based approaches, andaddresses the critical issues. We provide our clients with a team of engineering, construction, geology,environmental, risk, and health specialists that is unique in the industry.

The value that Exponent brings to its clients includes:

Proven experience on high-profile projects of national andinternational significance

Current, in-depth functional knowledge of engineeringfundamentals: mechanical, structural, metallurgical, chemical,electrical, geological, environmental, and others

Ability to integrate technical and business disciplines in solvingcomplex problems

Scientific understanding and experience in regulatory andenvironmental matters

Convergence of our skills in risk, reliability, vulnerability, and cost/benefit analyses

Extensive experience and operational knowledge of both the fossil plant industry and the oil and gas industry,from construction to O&M to public health and ecological risk management.

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Page 21: Exponent (Energy Clients)

LNG - Risk & Reliability

Overview

Exponent staff has broad experience performing LNG hazard analyses, as well asqualitative or quantitative risk assessments for LNG plants. This experience coversLNG liquefaction facilities, LNG receiving terminals (both onshore and offshore), andLNG storage and peakshaving plants.

Exponent’s risk analysis services include:

LNG hazard analysis for onshore and offshore facilities

LNG spill and pool spreading

Vapor dispersion exclusion zones

From storage, transfer, and process equipment areas or impoundments

From transfer-area trenches

Integral models (DEGADIS) and CFD (Fluent)

Thermal radiation exclusion zones

Exponent has performed thermal radiation hazard distance calculations, for spills into impoundments aswell as spills over water, using a variety of models, such as LNGFIRE3 and other variations of the solidflame model.

Exponent has extensive experience using CFD fire modeling tools, such as the Fire Dynamics Simulator(FDS), for both small- and large-scale fires; CFD tools such as FDS can be used to model LNG pool fires incases where the fire is significantly affected by the presence of buildings or other obstructions.

Probability of ignition of LNG vapor clouds

Waterways suitability assessment

Hazard zones for large vessels

Flash fire hazard distances

Review and comments on LNG standards and regulations

24 CFR 51 (HUD)

49 CFR 193 (DOT)

33 CFR 127 (USCG)

API 521

NFPA 59A

EN 1473

Hazard Identification (HAZID) and Hazard and Operability(HAZOP) Studies, and Quantitative Risk Assessment (QRA)

External hazards such as docking and maneuvering of ships and aircraft crashes

Natural hazards such as lightning, floods, and earthquakes

Internal hazards such as leaks from LNG piping, storage, and process areas in the terminal

Special cases hazards such as neighboring LPG/gasoline storage, vehicle traffic, electric installations, andcommunication failure between ship and terminal

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Page 22: Exponent (Energy Clients)

Variations in gas quality can raise reliability concerns for pipelinecompanies, multi-user LNG import terminals, LNG traders andmarketers, gas distributors, and especially end users of natural gasfuel such as power-station owners. The potential for downstreamproblems related to imported natural gas is compounded by a lack ofindustry-wide agreement on parameters for measuring and assessinggas quality and interchangeability.

“Natural gas” is not pure methane; it contains a variety of heavierhydrocarbons, inert species, and other components. Every gas sourcehas a different proportion of these constituents. Interchangeability isthe ability to substitute one gaseous fuel for another without

materially changing the performance and safety of pipeline systems and end-use equipment.

Common parameters that have been used to define an acceptable operating range are gas heating value, the “WobbeIndex,” specific gravity, and restrictions on components such as heavy hydrocarbons and inert gases (nitrogen andcarbon dioxide).

Exponent can analyze these issues and their effect on a company’s operations. Solutions need to be found thatprotect the performance, safety, and emissions of natural gas equipment without unduly restricting the LNG suppliesthat can be used.

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Page 23: Exponent (Energy Clients)

Clean Coal Technologies

Overview

The United States is the Middle East of coal. For companieslooking to expand the use of this indigenous resource in moreenvironmentally suitable ways through the use of advanced andemerging technologies, Exponent provides technical, economic,and market analysis skills and expertise.

We offer specialized consulting services to technology providers,project sponsors, project developers, and special-purpose projectcompanies seeking to deploy clean coal technologies to developcoal resources in the United States, and in other countries such asIndia, China, and Australia. We also can assist Engineering &Construction (E&C) firms designing clean coal facilities, and thefinancial institutions and attorneys that support these projects.

The types of assistance that the energy experts at Exponent can offer include project cash-flow analysis, financingmodel development, techno-economic comparisons of available technologies, end-product market analysis,assistance with solutions for CO2 issues, and project risk assessments.

Exponent consultants have conducted market study investigations of coal-to-liquid (CTL) and gas-to-liquid (GTL)products, and provided scoping and screening studies of petroleum coke and coal gasification projects. Our engineershave assessed available coal gasification technologies (both above ground and underground) and evaluatedintegrated gasification combined cycle (IGCC) and various co-production (polygeneration) schemes using coal,petcoke, and blended feedstocks. Exponent has expertise in performing reliability, availability, and maintainability(RAM) studies for particular clean coal project configurations. Our consultants have worked with the major power-block equipment suppliers and can recommend whether project sponsors should consider purchase or self-generationfor a project’s electricity or fuel needs. We have experience with direct and indirect coal liquefaction processes, andthe production of power, steam, and hydrogen in utility islands using gasification and steam reforming technologiesfor supply to host facilities such as oil refineries.

Once the synthesis gas is generated, we have evaluated the suitability of different cleanup technologies and theoptions for carbon capture and conversion of the syngas into marketable clean fuels, petrochemical intermediates,and end-use commodities. Among the processes that our consultants have considered are methanol, nitrogenfertilizers, synthetic natural gas (SNG), methanol to gasoline, and Fischer-Tropsch synthesis.

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Page 24: Exponent (Energy Clients)

Renewable Energy Services

Overview

Exponent offers unparalleled multi-disciplinary expertise and rapid response capabilities to provide stewardship inaddressing complex business, engineering, and scientific problems. We provide our clients with a team of business,engineering, construction, environmental, risk, and health specialists that is unique in the industry. The value thatExponent brings to its clients faced with the rapidly evolving renewable energy area is:

Power generation, transmission and distribution regulatory, systems, andoperational knowledge

Organizational assessment, change management, and business startupexpertise

Deep, functional knowledge of engineering fundamentals: mechanical,structural, metallurgical, chemical, electrical, economics, and more

Convergence of our skills in risk, reliability, and vulnerability analyses

Proven problem solving experience on high-profile projects

Implementing state and national renewable energy policies including carbon reductionand energy efficiency creates change for existing market participants as well as creatingnew entrants. Exponent’s expertise in technical and business facets of the energysystem and markets provides a one-stop shop for support in this critical area.

Exponent’s veteran energy industry staff have hands on technical and managerialexperience including but not limited to the areas of technical/equipment assessments,organizational assessment, process and procedure development, change management,regulatory support, environmental assessments, NERC compliance, climate changeevaluations, energy economics, corrective action plans, financial transaction support,maintenance and construction advisory services, risk management, and business startupactivities.

Exponent can assist utilities, renewable energy developers, transmission developers, andinvestors from the project feasibility stage thorough commercial operations. Exponent’sapproach in assisting clients with their renewable energy projects is broken into threephases: Situational Assessment, Detailed Implementation Plan and Budget Preparation/Business Case, and Plan Execution.

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Page 25: Exponent (Energy Clients)

Engineering Management Consulting

Exponent’s Engineering Management Consulting practice is focused on helping its clientsachieve their goals. Exponent’s veteran energy industry staff have hands on technicaland managerial experience including but not limited to the areas of technical/equipmentassessments, organizational assessment, process and procedure development, changemanagement, regulatory support, environmental assessments, NERC compliance,climate change evaluations, energy economics, corrective action plans, financialtransaction support, maintenance and construction advisory services, risk management,and business startup activities. In addition, through its alliance partners, Exponent isable to provide transmission system analysis and market assessments using proven industry models.

Electrical Systems

Exponent has worked closely with electric utilities in matters related to powergeneration, distribution, and transmission. These studies and investigations range fromline-siting studies to the failure analysis of major electrical equipment. Exponent has theexpertise needed to analyze complex problems in power plant generating equipment andelectrical and control systems; transformers, switchgears, circuit breakers and relatedrelay and control systems; and other electrical power handling equipment. Our staff hasexpertise in both AC and DC transmission systems. In addition to conducting root-causeanalyses related to equipment and system failures, electrical system configurations andbreaker/relay coordination, Exponent has successfully mobilized interdisciplinary teams in electrical, mechanical, andthermal areas to investigate fires and explosions due to electrical origin.

Environmental Sciences

Exponent’s scientists and engineers provide proven, cost-effective, scientificallydefensible, and realistic assessments and solutions to complex environmental issues.Our services include: environmental forensics, particularly advanced chemicalfingerprinting; chemical transport and fate analyses in air, soil, surface water,sediments, and groundwater; technical support for regulatory compliance; real estatetransactions and brownfield development; economic analyses; sustainabilityassessments; site remediation; product liability evaluations; and human health andecological risk assessments. Our ecological scientists, biologists, toxicologists, andnatural resource analysts provide scientifically defensible solutions and strategic supporton complex environmental issues related to contaminated land and water, industrial andother development, and sustainability and restoration of resources, and technologiesand products. Exponent is recognized nationally and internationally for its expertise in environmental risk and impactassessment, ecotoxicology, natural resource damage assessment (NRDA), and ecological restoration.

Mechanics & Materials

Exponent’s metallurgists, polymer and corrosion scientists, electrochemists, andceramists have many years of experience in the prevention and analysis of materialfailures. As a result of this close familiarity with all types of materials, our scientists andengineers have a unique ability to provide advice on how to avoid problems early in thedesign cycle, when materials are being selected. Exponent provides clients with athorough comprehension of current or potential designs to determine vulnerabilitiesbefore failures occur, develop appropriate mitigation methods, and provide post-failureinvestigations. Consultants review the reliability of processes and products for a varietyof industries, including transportation, heavy industry, energy, and consumer products.Our projects range from modeling fluid flow characteristics in a system, to predicting the remaining lifetime ofstructures and components, to establishing design and operating envelopes for processes and technologies.

©2010 Exponent, Inc. All Rights Reserved. www.exponent.com 888.656.EXPO Page 25 of 26

Page 26: Exponent (Energy Clients)

Zuhair M. Ibrahim, Ph.D., P.E.Senior Engineer

Thermal SciencesLos [email protected](310) 754-2707

Professional Profile

Dr. Ibrahim applies mechanical engineering, thermodynamic, and fluid dynamic principles to the study of processesin turbomachinery, fires, explosions, and a variety of other combustion devices. Dr. Ibrahim is especially interestedin investigation and analysis of problems related to turbo machinery and combustion. He has analytic andexperimental experience with the analysis of thermo-acoustic instabilities in gas turbines.

Prior to joining Exponent, Dr. Ibrahim worked as a combustion consultant at Solar Turbines Incorporated. Hisresearch involved developing tools to predict and mitigate the impact of combustion-driven acoustic instabilities ongas turbines used for power generation. He has also worked as a research engineer at United Technologies ResearchCenter (Pratt and Whitney R&D group), where he carried out numerous studies related to the investigation,optimization, and enhancement of turbine, afterburner, and rocket performance.

Dr. Ibrahim also served as a country consultant with the United Nations Development Programme in East Africawhere he helped oversee the implementation of several infrastructure projects.

Credentials & Professional Honors

Ph.D., Aerospace Engineering, University of California, San Diego, 2007M.Sc., Management, Rensselaer Polytechnic Institute, 2002M.Eng., Aerospace Engineering, University of Alabama, Huntsville, 2000

United Technologies Research Center’s Outstanding Technical Achievement Award, June 2003AIAA award for 2nd Place Technical Paper in South-Eastern Student Conference, April 2000

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