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ATTACHMENT -" Project Description—Microgy/Lodi Feed Systems, LLC Microgy/Lodi Feed Systems, LLC intends to construct and operate an anaerobic digester and a paddle dryer to dry animal feed on the de Snayer Dairy (the"Dairy") located at 23243 North Rond Road, Lodi, CA 95242. The digester will digest dairy cow manure from the Dairy's operation to produce biogas (60-70% methane and 30-40% carbon dioxide). The dryer will combust the biogas to dehydrate one or more agricultural products to form an animal feed supplement. Anaerobic digestion is a biological process where microorganisms- in the absence of oxygen - convert organic compounds to methane, carbon dioxide, cellular materials, and other compounds. The liquid effluent of the process is a biologically stable effluent with reduced organic nitrogen compounds and BOD, thus reducing the potential for ground and surface water contamination. Microgy Cogeneration Systems, Inc. ("Microgy") will construct and operate the digester. At the heart of the Microgy System is the enhanced anaerobic digester system developed over the past 15 years by Microgy's partner in Denmark. Microgy's Danish partner currently has over 28 similar plants operating throughout Europe. The system co- digests certain agricultural organic byproducts with the manure ("substrates")to enhance the biological activity and to create significantly more biogas than other anaerobic digestion technologies currently on the U.S. market. The Microgy system is comprised of the following main components: a mix tank that holds three to five days of manure; an above-ground, welded steel digester; a substrate tank; dual-fuel water heater; biogas flare; and a pump and control ("PLC") module. The PLC control system incorporates many safety features and will be monitored locally as well as remotely by Microgy and Danish engineers. The general environmental benefits of anaerobically digesting manure and other organic byproducts are well documented by the US and European experiences. Those benefits can be separated into benefits to the general public and benefits to the farm. Benefits to the public include: reduced BOD/COD of organic slurry; odor reduction; pathogen reduction; reduced greenhouse gas emissions; and reduced energy demand to produce commercial fertilizers. Benefits to the farm include: nutrients (esp. nitrogen) are more available for plant uptake; fertilizer value of nitrogen is more predictable than organically bound nitrogen; reduced use/cost of mineral (commercial) fertilizer; weed seeds destroyed–reduced pesticide use; and reduction of phytotoxic substances. The dryer is a tubular paddle dryer that combusts the biogas to produce a hot, dry process air stream. Within the dryer three several discreet zones created by internal air dams and adjustable paddles. The Inlet Zone achieves size reduction and the majority of the moisture evaporation by creating a highly turbulent and efficient mixing environment. The purpose of the Retention Zone is to ensure the product remains in the dryer long enough to achieve the desired drying action. The Discharge Zone achieves additional retention and drying, but its paddles are oriented to discharge the product. ATTACHMENT Project Description—Microgy/Lodi Feed Systems, LLC Typical materials that will enter the dryer may include whey permeate and other dairy solids, sugar beet byproducts, potato residuals, and other grain byproducts that may otherwise have to be land-applied for disposal currently. Final products are appropriate for animal feed. Their energy and nutrient values will depend on the entering materials, and may be appropriate for beef cattle, dairy cows, swine, poultry and/or specialty pet food. The Scoular Company is responsible for sourcing the feed inputs and marketing the feed products. 2