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          o   Example: Company B uses 14 million KwH of purchased electricity and 500,000
             gallons of gasoline in one year. Company B would be defined as a small business
             because both its purchased electricity and gallons of fuel used fall, individually, under
             their denoted thresholds.

   B. However, if a company uses less than 15 million KwH per year, less than
      1,000,000 gallons of fuel per year, or less than 2 million Therms of natural gas
      per year,  but does not  consider itself to be a small business, it may request
      Climate Leaders to apply a revenue threshold instead. Companies with more
      than $35  million in annual revenue would not be considered small businesses.

Using a threshold based  on electricity, fuel or natural gas usage or revenue to define
small businesses, rather  than using an inventory-based emissions threshold, would
eliminate the need for companies to conduct a GHG inventory to determine their
eligibility to join the program. Tools and assistance would also be tailored to address the
specific needs of small businesses, rather than general issues faced by low emitters.
While large and  small companies may encounter similar challenges and opportunities
(e.g., lease arrangements, purchasing Renewable  Energy Certificates or "RECs"),
others may differ significantly.

 A representative sampling of low emitters that joined Climate Leaders demonstrates that
 companies that purchase less than 15 million KwH of electricity per year, use less than
 1,000,000 gallons of gasoline or diesel,  or combust less 2 million Therms of natural gas usually
 have fewer than 500 employees or less  than $35.5 million in annual revenue, correlating with the
 average SBA definition for small businesses. Fifteen million KwH multiplied by the most recent
 national eGrid average (1329.35 Ibs. CO2/MwH) yields approximately 10,000 MTCO2e, the
 threshold currently used for low emitters; 1,000,000 gallons of gasoline or diesel for heavy duty
 transportation or 2 million Therms of natural  gas each yields approximately 10,000 MTCO2e. In
 cases where a company uses KwH, gallons  of fuel, and Therms that, in aggregate, exceed
 10,000 MTCO2e --and where the company's annual revenue is below $35 million- EPA will
 assess the suitability of defining the company as a small business for purposes of Climate

 The Small Business Administration's Small Business Size Standards, updated in August 2008
 provides different classification measures for different sectors. The highest annual receipts size
 standard in any service industry is $35.5 million. For all other industries, the highest annual
 receipts size for small  businesses is under $30 million. For summary information, see also

 SBA measures the manufacturing sector by  employee count only, where the small business
 denotation varies between 100 and 1500 employees, depending on the manufacturing
 subsector. Employee  count is not a good  measure for EPA to use for Climate Leaders when
 defining small businesses in the manufacturing sector because  some manufacturers with few
 employees may have operations with significant process emissions.

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2. Develop a distinct "Small Business Network" within Climate Leaders

Small businesses will be part of a newly-created Climate Leaders Small Business
Network, which is distinct from the regular membership of the program. The Network
would provide its members with the following support:

   •  Network members would have access to online technical assistance, where
      they could submit questions and receive answers through an online format. As
      EPA receives common inquiries, Climate Leaders can develop tailored webinars
      and trainings to address similar inquiries from many Network members.
   •  Companies would receive technical assistance through targeted webinars, open
      only to Network members. Approximately every six weeks, members would have
      access to technical trainings on how to conduct GHG inventories using Climate
      Leaders Low Emitters tools and/or discuss best practices among small
      businesses on key GHG reduction opportunities (such as purchasing green
      power, improving employee travel, and working with property managers to
      reduce emissions where companies are under triple net leases).
   •  Companies would have easy access to a more expansive Small Business
      page on the Climate Leaders web site with new sections for FAQs, best
      practices and case studies, references to other EPA resources, and information
      specific to Network members, such as a calendar for webinars and other
      networking opportunities.
   •  Companies could use a new Climate Leaders Small Business Network mark, or
      logo, on their website, corporate annual report, print media or other
      communications efforts; members of the Small Business Network would identify
      themselves as such and not as Climate Leaders Partners.

To join the Climate Leaders Small Business Network as a member, a company
    •  Commit to develop a corporate-wide GHG inventory;
    •  Commit to set and achieve a goal to reduce their emissions; and
    •  Commit to promote the Climate Leaders Small Business  Network and the
      program's tools and resources to build awareness across industries.

Network members would not be required to report their inventories to EPA, though they
would be encouraged to publicly report their emissions.

EPA would provide a small business with public recognition and an award if it
met the following three conditions:
   1 .  Sets and achieves a carbon-neutral goal, sustained over a three-year timeframe.
      Companies would need to achieve the first year of carbon neutrality within two
      years of developing  a base year inventory.
   2.  Submits to EPA for review a corporate-wide inventory for  the base year and each
      of the three years of carbon neutrality signed by a senior executive of the

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      company attesting to the accuracy of the inventory. Companies must also agree
      to publicly disclose their emissions at the aggregated, corporate level.
      Demonstrates reductions through initiatives that reduce energy or fuel
      consumption, such as energy efficiency or on-site renewable energy projects,
      employee behavior change, combined heat and power retrofits, or other
      initiatives in addition to purchasing offsets and renewable energy certificates
      (RECs) to achieve carbon neutrality.
3. Leverage intermediary organizations to disseminate Climate Leaders GHG
management tools and technical assistance to small companies.

EPA can also  support small businesses by working through organizations that have
ongoing communication and credibility with the small business community. Leveraging
relationships with such intermediaries also  creates more champions and visibility for
Climate Leaders as other organizations promote the program's Small Business Network
to their members. Specifically,

    •   EPA would work with existing partners to encourage their small business
       suppliers to measure and reduce their GHG emissions. Small suppliers would be
       encouraged to join the Climate Leaders Small Business Network and work
       towards achieving recognition for reducing their emissions. EPA would also work
       with its utility partners to identify high rate payers that are small businesses and
       encourage them to join the Climate  Leaders Small Business Network for ongoing
       technical assistance and networking opportunities.
    •   EPA would work with organizations that deploy technical assistance to small
       manufacturers, such as the Department of Commerce's Manufacturing
       Extension Partnership, to disseminate tools and trainings on GHG
    •   EPA would work with trade associations for different industries to disseminate
       Climate Leaders tools for low emitters and encourage their small business
       members to join the Small Business Network.
Going Forward: FAQs

What if my company is already a partner and it is a small business?
All companies that are currently partners and who meet the small business criteria
outlined in the proposed approach would automatically become members of the Small
Business Network.

What happens if my company is a small business and we already set a goal with
Climate Leaders? What if we already submitted a goal but  haven't yet received
EPA approval?

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EPA will accept all previously approved goals from small businesses for public
recognition. EPA will also review and consider goals from small businesses that have
already been submitted to EPA prior to September 25, 2009. These small businesses
have the option to commit to the carbon neutral goal instead, but are not required to do
so. Going forward, all small business members would be required to adopt the carbon
neutral goal, and its requirements, for public recognition and an award from EPA.

When will these changes take effect?
EPA anticipates implementing the new changes on January 1, 2010, taking into account
feedback received.


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                               Feedback Form

            Feedback is due bv9:00om EOT, Friday, October 16, 2009.

 Please email all feedback forms to Verena Radulovic at Radulovic.


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