Clarus Energy launches on-site energy program


SAN DIEGO, March 8, 2002 — Clarus Energy has launched announced a program to help direct access business customers if they are stranded by the cessation of their energy contracts in California.

Under the program, California businesses that purchase from an energy service provider (ESP) and are at risk of having their contracts voided because of the suspension of direct access by the California Public Utilities Commission (CPUC) may qualify for the Clarus Energy Alternative, a new energy choice.

Clarus Energy is providing customers with a similar way to purchase electricity, but delivers it through tailored on-site systems.

Unlike a customer developed self-generation project, Clarus Energy is acquiring the power generation equipment, negotiating gas contracts, performing installation, implementing co-generation, operating and maintaining the equipment, and obtaining permits and siting approvals. Customers are only responsible for a monthly energy bill.

In 1995 the California Public Utilities Commission adopted and implemented a direct access program as part of the state electric utilities restructuring. Direct access was initially designed to enable residential and business customers to purchase electricity from anyone they chose.

The California energy crisis, however, forced the CPUC to withdraw direct access effective September 20, 2001, a move which was motivated by the need to recover the costs of a $11B bond offering needed to protect the state’s utilities from becoming insolvent.

On January 28, 2002 the CPUC issued an opinion that, if adopted, may make the effective date retroactive to July 1, 2001. Consequently, direct access contracts that were written from the period of July 1, 2001 to September 20, 2001 may become invalid, forcing customers to seek alternative generation suppliers.

By December 31, 2001, 18.3% of industrial customers with more than 500kW electricity demand had chosen direct access, which represented a significant 32.8% (14,400 MW) of the electricity consumed by all direct access customers. The loss of this option is affecting numerous customers.

Commercial and industrial direct access customers with contracts signed prior to July 1, 2001 can continue to purchase power from their ESP of choice. Contracts signed between July 1 and September 30, 2001 may become null and void if the new CPUC opinion is adopted.

Direct access customers have three options:
1. Purchase electricity from the utility in their service area
2. Develop and finance an on-site self-generation project
3. Purchase electricity from a premium power provider that supplies a turnkey on-site energy solution that does not require a capital investment.

About Clarus Energy Alternative
The Clarus Energy Alternative is an energy solution that supplies electricity and thermal energy through on-site power generation. Clarus Energy delivers the benefits of self-generation without any upfront investment by the customer. Customers pay only for the energy for which they are contracted.

About Clarus Energy Corp.
Headquartered in San Diego, Clarus Energy provides secure, reliable and affordable electricity and thermal energy to commercial, industrial and municipal customers. Visit Clarus Energy on the Web at www.clarusenergy.com .

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