Tough economic conditions, changing energy markets force cancellation of heritage Station Power Project

ATLANTA and NEW YORK, May 9, 2002 — GE Power Systems and Sithe Energies, Inc. Thursday announced that due to difficult market conditions and changes in the energy markets, the development of the Heritage Station power plant near Oswego, NY has been cancelled.

The Heritage project, which had all major regulatory approvals, was delayed last December with the goal of resuming this spring.

Dramatic changes in the energy markets – linked to the national economic condition — make the project not economically viable at this time, according to Mark Little, Vice-President of Energy Products for GE Power Systems. “While we are clearly disappointed, we had to face the reality of these adverse market conditions,” Little said.

“We’re extremely disappointed that the Heritage project will not move forward,” said Jim McGowan, Senior Vice President for Development at Sithe Energies, Inc. “Sithe will continue its strong relationships with the Town of Scriba, City of Oswego, Oswego County, and New York State. Many people have worked very hard to bring the project to this point, including local and state officials, local residents, and representatives of the local building trades. We are grateful for their hard work and cooperation.”

McGowan added: “We are particularly pleased that some of the community benefits anticipated as a result of this project will continue despite the cancellation of Heritage.” While funding was originally linked to the construction of Heritage, Sithe and GE felt strongly that the projects were important to the community and should still receive funding. A $500,000 donation will be provided to help fund two community projects: a long-awaited municipal bathhouse needed to keep open the county’s Sandy Island Beach Park, and the Scriba sewer line extension project along Route 1A. Details of those benefits are still being finalized with local officials.

“Sithe has a long history in New York State of developing and operating clean energy facilities, and we look forward to being a good neighbor to the Oswego community for years to come. We will continue to build on these relationships, and we will evaluate other opportunities as they arise,” concluded McGowan.

Originally announced in September of 1999, the Heritage project was scheduled to be the domestic launch of GE’s H Systemâ„-, the energy industry’s most advanced gas turbine-based technology. Little also indicated that GE remains firmly committed to the U.S. introduction of the H System. The H System will make its global debut at a power plant in South Wales, the United Kingdom, where it is currently being installed. Startup and testing of the system are scheduled for this summer.

“Our H technology is designed to be the first of its kind to break the 60% thermal efficiency barrier — which is the equivalent of our industry’s four- minute-mile,” Little said. “I have no doubt that when the economic conditions return to where this system again makes good business sense, we’ll have little trouble finding a U.S.-based customer. We will certainly reconsider the Oswego site as well as other locations to launch this promising technology.”

About GE Power Systems
GE Power Systems ( ) is a supplier of power generation technology, services and management systems, with 2001 revenues exceeding $20 billion. Based in Atlanta, Georgia, GE Power Systems provides equipment, services and management solutions across the power generation, oil and gas, distributed power and energy rental industries.

About Sithe Energies, Inc.
Sithe, founded in 1985 and headquartered in New York City, has an extensive portfolio of projects in operation, under construction, or in active development worldwide. In North America, Sithe presently owns and operates 27 power generation facilities with approximately 3,800 MW of net merchant generating capacity. Sithe North America is owned 49.9% by Exelon Holdings, Inc., a wholly-owned subsidiary of Exelon Corporation, approximately 34% by subsidiaries of Vivendi Universal, approximately 15% by subsidiaries of Marubeni Corporation and approximately 1% by Sithe management.

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