Inside Investors Raise $3.7 Million to Support New CEO's leadership of Company Into Lucrative Energy Markets

Worcester, MA, January 2, 2013 - ThermoEnergy Corporation (OTCBB: TMEN), a diversified technologies company engaged in the development and sales of wastewater recovery and clean power generation technologies, announced today that James F. Wood has been named Chairman and Chief Executive Officer, effective January 2, 2013. Wood succeeds Cary G. Bullock who will remain a member of ThermoEnergy's board of directors.

A thirty-year power industry veteran and recognized leader, Wood completed his service as Deputy Assistant Secretary for Clean Coal in the US Department of Energy on December 31, 2012.

"With new wastewater management projects in oil/gas hydrofracking, power generation, and biogas production, it has become clear that the future of ThermoEnergy will be driven by demand for our technologies in the energy business," said ThermoEnergy retiring Chairman and CEO, Cary Bullock. "Jim comes to ThermoEnergy with an outstanding track record as an energy industry top executive coupled with exceptional industry experience in both the private and public sectors."

"In addition, our partnership with Sofinter/ITEA in the Unity Power Alliance has moved up the timeline for commercialization of our POXC™ clean coal combustion technology," said Bullock. "Jim's deep knowledge of boiler technologies and the coal industry, as well as his experience bringing major power projects to completion, will be enormously helpful in reaching our goals."

ThermoEnergy's board of directors also announced that the company has raised $3.7 million in capital from inside investors Robert S. Trump, Empire Capital Partners, Focus Fund, and The Quercus Trust. "We are delighted that Jim Wood has accepted our offer to take the helm of ThermoEnergy's board and management team," said board director, Shawn R. Hughes. "This new round of financing is a vote of confidence from the Board that Jim will bring the leadership skills and experience to ramp up market share in the energy sector and guide the company toward a profitable future."

Jim Wood said "Oil, gas, and electric power production require tremendous quantities of clean water, a precious commodity that is becoming increasingly scarce every year. ThermoEnergy offers the ener gy industry sustainable water lifecycle management solutions that preserve water, lower operating costs, and protect the environment. Also, ThermoEnergy's efforts in commercializing pressurized oxy-combustion (POXC™) may hold the key to viable clean coal power generation. I am pleased to be part of a team with the potential to make such a valuable contribution to our energy future."

Prior to his appointment at the U.S. Department of Energy, Wood was president and CEO of Babcock Power Inc. (BPI), one of the major US-based designer/manufacturers of environmental, pressure part, heat exchanger, combustion equipment and after-market services for the power generation industry. From 1996 to 2001, Wood was president of Babcock & Wilcox (B&W), a $1.5 billion integrated world-wide provider of boiler-systems and after-market services to the power industry. He also was executive vice president of McDermott International Inc., the former parent of B&W. F rom 1988 to 1996, Wood was president of WTI International Inc. (WTII) and managing director of Wheelabrator Environmental Systems (WESI), both subsidiaries of Wheelabrator Technologies.

Wood has significant international experience, including periods of residency in Italy, India, Belgium, Colombia, and Ecuador and was responsible for B&W's foreign subsidiaries and ventures in China, Turkey, Egypt and Indonesia. He was appointed to the National Coal Council by three Administrations, and was a member of the US-Egypt President's Council -- both federal advisory committees. Wood is an ASME Fellow and Trustee of Clarkson University.

Wood holds a B.S. in Chemical Engineering from Clarkson University and an MBA with a focus on international economics from Kent State University.

About ThermoEnergy Corp.
Founded in 1988, ThermoEnergy is a diversified technologies company engaged in the worldwide development, sales and commercializat ion of patented and/or proprietary wastewater treatment and power generation technologies. The company has been a pioneer in the development of sustainable water treatment technologies that help clients operate more efficiently, save money, reduce their carbon footprints, and meet sustainability goals. Additional information on the Company and its technologies can be found on its website at www.thermoenergy.com