LIPA Installs Plug Power Fuel Cell At Babylon Town Hall

Babylon, NY—July 23, 2002—Moving forward in its program to develop the use of fuel cell power systems as part of its energy delivery mix, the Long Island Power Authority (LIPA) announced today that it has installed the first Plug Power Inc. (NASDAQ: PLUG) fuel cell with combined heat and power capability at Babylon Town Hall. The 5-kW fuel cell will be interconnected to LIPA’s grid and will operate in a combined heat and power mode, providing electricity and heat on-site. Operation of this system, which will be powered by natural gas, will enable evaluation of the integration of fuel cells at the specific point of need, along with the advanced technology of providing both electricity and heat.

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.

Fuel cells generate electricity through an electrochemical process rather than combustion. No particulate matter, nitrogen or sulfur oxides (NOx or SOx) are produced. Additionally, a significant percentage of heat produced by fuel cells can now be captured and reused, instead of being released into the air or water.

By the end of 2002, LIPA also will install an additional 16 natural gas-fueled fuel cell systems at LIPA customer sites and three 5-kW DC backup power systems, operating on hydrogen, at other facilities on Long Island. This will enable an initial review of fuel cells operating at LIPA customer sites and an assessment by LIPA of fuel cells as a backup generation source.

LIPA also will expand the operation of fuel cells connected to the electric grid at its West Babylon substation through introduction of Plug Power fuel cell systems that have increased life and functionality. The deployment of Plug Power’s stationary unit (2002 design) at the West Babylon site will support continued assessment of fuel cell integration into the existing utility electric grid and continued development of remote dispatch capability for distributed power sources.

"LIPA is proud to be a pioneer in the field of fuel cell technology," said LIPA Chairman Richard M. Kessel. "LIPA believes that fuel cells hold the key to achieving true distributed generation that makes economic and environmental sense. This important step that we are taking today, will help us better understand the issues associated with the integration of fuel cells at customers’ facilities where heat produced by the units can also be used."

With the support of Governor George Pataki, LIPA’s involvement in the development of fuel cell technology began in 2000 when it field tested six Plug Power fuel cells at locations on Long Island to gain operational experience that has supported the evolution of grid interconnected fuel cell systems. In 2001, LIPA constructed a 3-acre site at its substation in West Babylon. Seventy-five Plug Power fuel cell systems were commissioned in late 2001 and have generated in excess of 400,000-kilowatt hours of electricity.

"The success of LIPA’s fuel cell demonstration site in Babylon is due in large part to the cooperation and assistance of the Town of Babylon," said Mr. Kessel. "Appropriately, the Town is the first to receive one of the new fuel cell systems.

The unit produces electricity for on-site use, and heat produced by the systems will be used to heat water in Town Hall."

"The Town of Babylon is committed to planning for the energy needs of our residents," said Babylon Town Supervisor Steve Bellone. "Along with LIPA, we recognize that this fuel cell here at Town Hall represents the future of energy sources on Long Island. We're looking ahead for Babylon residents, so that they won't be in the dark down the road."

"Plug Power continues to work with LIPA to fulfill their long-term vision of providing clean distributed power to customers in their service territory," said Roger Saillant, Plug Power President and Chief Executive Officer. "This first installation of a combined heat and power fuel cell at a LIPA customer site continues to help advance this technology."

Funding for the fuel cell project is being provided under LIPA’s Clean Energy Initiative (CEI). The CEI is a five-year, $170 million program, originally proposed by Governor Pataki, designed, in part, to foster the development and application of clean energy technologies including fuel cells. More information on LIPA’s CEI programs can be found on its Web site at www.lipower.org.

Plug Power designs, develops and manufacturers on-site electric power generation systems utilizing proton exchange membrane 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, N.Y., with offices in Washington, D.C., and The Netherlands. For additional information on Plug Power, visit the website at 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.