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Arthur Gallagher's CEO Discusses Special Clean Energy Investments - Special Call Transcript

When it comes to building the plant and putting these investments together, Page 8 provides you the steps, and I think it’s important to go through these steps. Step 1 is we actually build the plant and we place it in service prior to December 31, 2011. That’s important that it’s in by that date, and all of our plants have been placed in service before 12/31/2011 because that makes them a qualified plant. Next, we connect the plant to the utility, we connect it and house it, and you can see that costs the 4 million. Then, because these are investments, we will sell off a majority portion of the investments. Generally in this schematic, what we’ve said is we’re selling off 51% of it and we end up holding 49% of it. At that time, we relinquish control. We become a minority partner, and really it runs like any other partnership or LLC would, and in this case the partners require unanimous approval to do anything further. So we step out of the control position in Step 4.

If we turn to Page 9, we get some questions from time to time about the operations – who’s running it? The piece to focus on is the LLC manager. It’s the third box down on the left side of the page. We have a professional manager that really manages the day-to-day operations of the plants going forward. They’re the ones that arranged for Taggart, who is our operations manager. They’re the ones that arranged for the logistics and the chemical. They coordinate much of the legal activity and the accounting and tax activity, so Gallagher then sits at the position of a non-controlling partner and basically the day-to-day operations are controlled by the LLC manager.

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