Composite Technology announces independent economic analysis of new cable products

IRVINE, Calif., April 24, 2002 — Composite Technology Corp. announced Wednesday the economic benefits its aluminum conductor composite core (ACCC) cable products can provide to electric utilities by conducting more electric power with lower line losses.

The economic benefits are included in a report prepared by Electrical Consultants, Inc. (ECI), an independent consulting firm that serves electrical utilities.

Some of these benefits include:
* Capital Productivity – A Key Index Of Utility Management Effectiveness – – ECI’s analysis confirms that CPTC’s advanced cable products can help boost a key index of utility management effectiveness: capital productivity, or the degree to which invested capital generates profitable revenues.

* Technical Performance — ECI’s analysis determined that CPTC’s aluminum conductor composite core (ACCC) cable provides performance superior to traditional steel-reinforced ACSR cable in two key technical features that have now been quantified. ACCC cable’s ability to conduct electricity (ampacity) is at least 1.6 times greater than that of traditional cable with the same outside diameter, and the cable’s lower electrical resistance yields a 27 percent reduction in line losses (electrical energy) at customary operating conditions compared to traditional cable.

* Superior Capital Productivity – ECI analyzed how ACCC cable provides utilities with solutions to two common situations: 1) an existing line and towers that are overloaded; and 2) required construction of a new line and towers.

* Leveraging an Existing Line and Towers — The analysis showed that ACCC cable’s greater ampacity is a major break-through for utilities with traditional cable lines whose capacity is exhausted. ACCC’s ampacity advantage allows such an existing traditional cable line to be “reconductored” by replacing traditional cable with lighter-weight, higher-ampacity ACCC cable with no negative impact on tower loading or ground clearance.

Because the reconductored line and towers can then handle at least 1.6 times more electricity, a utility can avoid the construction of new towers that require a much greater investment than reconductoring. Reconductoring also avoids the land acquisition costs and environmental impact a new right- of-way imposes.

The analysis compared reconductoring and new tower construction for a representative overloaded transmission line. This representative case indicates that a utility using ACCC cable to reconductor existing towers would achieve a revenue-to-capital expenditure ratio 6.5 times greater than that provided by traditional cable strung on new towers.

* Construction Of A New Line And Towers — In some cases a utility’s planners and transmission engineers find that geographical considerations require construction of a new line and towers. For example, increased consumption in an outlying region could require a new transmission line and towers.

The analysis compared the economic results of two new lines, one using ACCC cable and the other using traditional cable. Using the same industry standards, the analysis indicates ACCC cable delivers 10.1 percent more in transmission fees or revenue at traditional cable’s continuous operation limits. As time elapses and the volume of electricity transmitted surpasses the limits of traditional cable, ACCC cable’s high temperature operation permits a capacity increase to 44.8 percent more in transport fees or revenue.

ECI also modeled the economics of the two new line investments to reflect the respective cable prices. This model indicates that a representative new transmission line using CPTC’s ACCC cable can yield an annual revenue-to- capital expenditures ratio that is 32 percent greater than a line using traditional cable.

Market potential
Industry sources indicate the market for electrical energy conductor cable is about $50 billion, with $4.4 billion in domestic sales. CPTC’s recent market analysis has verified that the annual domestic market for transmission cable now exceeds $400 million, and that the domestic market for distribution and industrial cable is about $4 billion. CPTC’s analysis also confirmed that the international market for transmission, distribution and industrial cable in 2002 will be about $44 billion.

Based on ACCC cable’s ability to boost utilities’ capital efficiency, CPTC management believes that achieving an 8 to 9 percent share of the domestic market within five years is a reasonable objective.

About Electrical Consultants, Inc:
ECI offers utility and telecommunication industry clients a broad range of electrical power, communication and surveying services, with special expertise in design services. Within this area of specialization, the firm has complete in-house capabilities to address all structural, civil, electrical power, survey and communication issues involved in design projects through 500kV. ECI employs approximately 140 experienced electrical and civil engineers, surveyors, designers, testers, drafters and support staff. With its headquarters based in Billings, MT, the firm operates offices in Salt Lake City, UT, Tucson, AZ, Madison, WI and Butte, MT.

About Composite Technology Corp:
CPTC serves domestic and international electric utilities with advanced conductor cables it is introducing for use on transmission and distribution lines. These advanced cables and the proprietary composite materials they utilize provide utilities with significant performance and economic benefits compared to traditional cables. CPTC’s cables enable utilities to upgrade existing transmission lines and towers, thereby avoiding the deployment of new transmission towers and rights-of-way that are costly and that impact the environment. By reducing electrical power losses during transmission, the ACCC cables also make transmission lines more efficient and improve utilities’ return on investment. The company is completing plans for a field demonstration of its transmission cable to be conducted with a major domestic utility.

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