PORTSMOUTH, N.H., Aug. 16, 2002 — Environmental Power Corp., which provides solutions for the management of agricultural waste and production of renewable and conventional power from a variety of alternative fuel sources, continued to generate a steady stream of revenue from its 22-year lease on the Scrubgrass waste-coal facility while moving aggressively to deploy recently acquired anaerobic digestion technology.
Power generation revenues for the three months ended June 30, 2002 of $11,977,206 approximated the $12,096,878 for the same period in 2001, while revenues billed for power produced during this quarter increased to $10,341,203 compared with $10,231,588 for the three months ended June 30, 2001.
Power generation revenues for the six months ended June 30, 2002 amounted to $26,090,461, as compared to $25,579,769 for the same period in 2001. The increase in power generation revenues during the six months ended June 30, 2002 is primarily attributable to a 5% increase in certain rates billed to Penelec under the terms of the power purchase agreement.
Joseph E. Cresci, Chairman and CEO, said, “Billed revenues from power generated at our Scrubgrass waste-coal facility increased as we were able to repeat last year’s record output levels. These revenues have provided us with cash flow to invest in the development of our anaerobic digestion technology.”
Net Income (Loss)
Due to the regular annual maintenance outage at Scrubgrass, the company generally experiences net losses during the second quarter of each year. Our net loss for the three months ended June 30, 2002 amounted to $1,742,507, or 9 cents per fully diluted share; as compared to a net loss of $217,471, or 2 cents; for the three months ended June 30, 2001.
The decline in net income for the current three and six months as compared to the same period in 2001 is mainly the result of increased spending from efforts to deploy our anaerobic digestion technology. For the six-month period ended June 30, 2002, net income was $24,141 or 0 cents per fully diluted share compared with $770,466 or 7 cents for the six months ended June 30, 2001.
In July 2001, Environmental Power Corporation acquired Microgy Cogeneration Systems, Inc., a development stage company offering management of agricultural waste and renewable energy, a market with an estimated target market of over $14 billion, including an initial target market of $7 billion.
The company said it believes Microgy’s business compliments the company’s existing environmentally sound alternative fuel power business. With the acquisition of Microgy, the company obtained the exclusive North American license for a highly efficient anaerobic digestion technology that produces renewable energy generated by methane derived from animal wastes.
Chairman Cresci, stated, “We have owned this North American license for little more than a year and have not only analyzed the market and developed our strategies, but we’ve already begun to implement them by executing a contract with the Wisconsin Public Service Corporation and conditional letters of intent with six farms in upper Wisconsin. We believe this technology provides a unique solution to two critical market needs: the need for pollution control by large animal feeding operations; and the rapidly growing renewable energy market. In addition, we expect that the technology will turn an expensive agricultural industry problem into a profit-generating solution for farmers.”
Second Quarter Highlights
— Signed conditional letters of intent in July 2002 with six farms in Wisconsin to build anaerobic digesters on each site using proprietary biogas technology to address the farmers’ need for animal waste management and desire to produce electricity from renewable sources.
— The election of three new board members at the annual meeting held on July 25, 2002.
– Herman Brubaker is Chairman of the Board of the Dairy Farmers of America and a lifetime dairy farmer. He serves on the Board of Directors of the National Milk Producers Federation and chairs the United Dairy Industry Association.
– Jesse Knight recently served on the California Public Utilities Commission as Managing Commissioner of the Electric and Telecommunication industries of the State. Knight is former Vice Chairman of the World Affairs Council of California and is a standing member of the Council on Foreign Relations. Currently, Knight is President and Chief Executive Officer of the San Diego Regional Chamber of Commerce.
– Gus Schumacher has served as the third-highest ranking official in the United States Department of Agriculture in the Farm and Foreign Agricultural Service from 1997-2001 and President of the Commodity Credit Corporation. He also directed the Department’s Foreign Agricultural Service.
Schumacher was the Senior Agricultural Project Manager for World Bank and was Commissioner of Food and Agriculture for the Commonwealth of Massachusetts.
Presently, he is a consultant for W.K.K. Kellogg Foundation and the Managing Director of SJH and Co.’s Washington D.C. operations.
— Environmental Power Corporation was ranked 15th among New Hampshire’s top 100 public companies by BusinessNH Magazine for 2002 in their June issue.
About Environmental Power Corp.
Environmental Power Corp. is an entrepreneurial energy company established in 1982 with annual revenues in excess of $50 million. The company focuses on environmentally sound power generation and anaerobic digestion systems, a development stage business in a market with an estimated target market of over $14 billion, including an initial target market of $7 billion.
For more information, please visit: www.environmentalpower.com.