First of its Kind Fuel Cell Project in NYS

LIPA/Plug Power Grid-Connect Project Goes On line

Fuel Cell-Generated Electricity Will Serve LIPA Customers

West Babylon, NY – October 31, 2001 -- Under a $7 million first-of-its-kind program to show how fuel cell technology can generate electricity for Long Island consumers, the Long Island Power Authority (LIPA) today announced that it has successfully installed 55 fuel cells -- manufactured by Plug Power -- at its West Babylon substation. The fuel cell project is part of LIPA’s Clean Energy Initiative (CEI), first proposed by Governor George E. Pataki as a way to promote new energy technologies and energy conservation projects. A total of 75 fuel cells will be installed at the substation. Presently, 18 of the 55 fuel cells are fully installed and generating electricity for LIPA’s grid.

The program is intended to begin identifying and developing the measures and systems needed to facilitate the eventual use of fuel cells operating in parallel with, and contributing to the overall reliability and performance of LIPA's electrical grid system.

A fuel cell is a device that converts the energy of a fuel (hydrogen, natural gas, methanol, gasoline, etc.) and an oxidant (air or oxygen) into useable electricity. Unlike traditional fossil power plants that combust fuels, fuel cells generate electricity through an electrochemical process from which no particulate matter is produced. As a result, they do not contribute to the formation of smog and acid rain. This application of fuel cell technology will be the first large-scale use of fuel cells for this purpose in New York State.

"LIPA’s mission is to provide safe, reliable, environmentally sound electricity for our customers’ needs,” said LIPA Chairman Richard M. Kessel. “Fuel cells are an environmentally friendly electric generating technology, and this project will help us develop a better understanding of how fuel cells can be integrated into our electric grid. In turn, the information and experience gained through this program will continue to help fuel cells evolve as a technology that can be utilized by electric utilities as a source of power, and eventually by residential and commercial customers for their own on-site power needs."

The fuel cells could produce as much as one million-kilowatt hours of electricity over the duration of the program, which is enough electricity to power about 100 average-sized homes. By connecting the fuel cells directly to the transmission grid via the West Babylon substation, the electricity created by the fuel cells will be distributed to customers through LIPA's electric transmission and distribution system.

The program is being funded through LIPA's Clean Energy Initiative (CEI). The CEI is a five-year, $170 million program, proposed by Governor Pataki, that is designed, in part, to foster the development and application of clean energy technologies, such as fuel cells, solar, wind generation and geothermal systems. LIPA's CEI program also offers 11 energy conservation and load management programs that residential and commercial customers can take advantage of to reduce electric consumption and save money.

LIPA has previously worked with Plug Power to help advance the development of fuel cell technology. Under a LIPA-financed program, six fuel cells were field tested at locations around Long Island last year to gain operational experience that was integral to the development of the next generation of fuel cell power systems.

“We applaud Chairman Kessel for his foresight and efforts in providing clean, quality energy solutions to Long Island consumers,” said Roger Saillant, Plug Power President and Chief Executive Officer. “Plug Power is proud to have been chosen to participate in this New York project that helps advance a new energy paradigm.”

"The Town of Babylon recognizes the need to look toward alternative fuel technologies as a way of supplying clean, efficient power for the future," said Babylon Town Councilman Steve Bellone. "I am proud that this demonstration project is located in Babylon and that we are on the cutting edge of electric energy generation."

The Plug Power fuel cells have been made available to LIPA under the terms of an agreement that includes provision for additional training, engineering services, and technical support to operate and maintain the units. In addition, LIPA and Plug Power will jointly develop the software necessary for remote operation, dispatch and monitoring of the fuel cells to support the future distributed use of fuel cells to support the electric grid.

This project will allow LIPA to complement its other alternative energy efforts as a resource to meet Long Island's growing demand for electricity, which is increasing at a rate of approximately 100 megawatts per year.

Plug Power is a designer and developer of on-site electric power generation systems utilizing Proton Exchange Membrane (PEM) fuel cells for stationary applications. Plug Power’s fuel cell systems are expected to be sold globally through a joint venture with General Electric and through DTE Energy Technologies in a four-state territory, which includes Michigan, Illinois, Ohio and Indiana. The Company's headquarters are located in Latham, New York with offices in Washington DC and the Netherlands. For more information on Plug Power visit http://www.plugpower.com.

LIPA owns the retail electric system on Long Island, and provides electric service to nearly 1.1 million customers in Nassau and Suffolk counties, and the Rockaway Peninsula in Queens. LIPA does not provide natural gas service. More information on its Clean Energy Initiative programs can be found at www.lipower.org.