Budget Cuts Threaten Distributed Energy Program Offering Local Solutions for National Crisis

NEWS RELEASE

Budget Cuts Threaten Distributed Energy Program Offering Local Solutions for
National Crisis

Contact: John Jimison, USCHPA 202-544-4565 Catherine Van Way, Cummins
202.654.4282 Or Neal Elliott, ACEEE 202-429-8873 x707


Washington, D.C. (March 7, 2006): Funding cuts are threatening to obstruct
the development and deployment of Distributed Energy (DE) systems, which are
a key element of a sensible response to our national energy crisis.
Congress recognized the necessity of these systems by including several
important provisions in the Energy Policy Act of 2005 authorizing increased
Federal focus on distributed energy research, development, demonstration and
policy support. However, Congress needs to make a sustained funding
commitment to following through on the promise that DE offers to deliver
local solutions.

A breakfast briefing sponsored by the Distributed Energy Caucus, the
Environmental and Energy Study Institute, and the Distributed Energy
Coalition on March 9, from 8:30-9:30 am in Room 2322 of the Rayburn HOB will
discuss the challenges, the opportunities and the need for Congressional
action.

The reliability and security of the Nation's energy infrastructure is in
serious peril. Fossil fuels, globally traded commodities, face
ever-increasing global demand. Economic development outpaces the expansion
of electricity supply in some areas of the country while other regions face
constraints on the ability to deliver power where it's needed when it's
needed. Black-outs in the Great Lakes and Northeast, hurricanes Katrina and
Rita striking the Gulf Coast and the possibility of terrorist attacks on
central station power plants and the transmission and distribution network
underscore the vulnerabilities of our grid.

"Distributed energy systems are one of our most valuable resources when it
comes to addressing our energy crisis," stated John Jimison, Executive
Director of the U.S. Combined Heat and Power Association. "CHP systems are
extremely energy efficient, thus reducing our demand and dependence on
fossil fuels and simultaneously cutting greenhouse gas emissions. In
addition, they increase the reliability and security of the electric grid,
making us significantly less vulnerable to black outs, terrorist attacks,
and extreme weather. And they do so without cost to electricity
ratepayers."

Distributed Energy includes technologies and systems that, at the point of
use, efficiently produce electricity, store energy, and recycle waste energy
by putting it to productive use for heating and cooling. DE supports and
supplements the existing power generation and transmission infrastructure.
DE systems operate in parallel, and in many cases can operate independently
of the grid to provide enhanced power reliability and to sustain critical
services (e.g. healthcare, communications, shelter, public safety) after
natural or man-made disasters.

In the wake of Hurricane Katrina when the main power grid failed, the
Mississippi Baptist Medical Center in Jackson, MS was the only hospital in
the Jackson Metro Area to be nearly 100% operational for 52 hours because of
its Combined Heat and Power (CHP) system (a type of DE system). In
comparison, the Memorial Hermann Baptist Hospital in Beaumont, TX did not
have any DE system and in the days following Hurricane Rita, was unable to
continue running. As a result, patients were evacuated to other facilities
due to lack of power and water. Over the next several days, the building
was infiltrated by humidity, resulting in persistent mold damage as well as
extensive damage to both electrical/optical equipment.

"These two examples illustrate just how vulnerable we are, but also that
there are existing solutions like DE systems which have been successful in
the past and will help if we act now to expand their development and
deployment," stated Neal Elliott, Director of the Industry Program at the
American Council for an Energy Efficient Economy. "The Department of
Energy's Distributed Energy Program has been successful thus far by bringing
us through the initial stages of component development and system
integration. However, this is just a beginning. Congress must pledge to
maintain funding to this essential program if we have any hope of tackling
our energy problems."

"DOE's Distributed Energy Program has played a critical role in addressing
many of the technical challenges that have faced DE technologies," said
Catherine Van Way, Director of Legislative & Regulatory Affairs for Cummins
Engine Company. "Because of its cooperative research activities we have
cleaner, more efficient and more reliable technologies today than we did a
decade ago. These advances have made DE a much more affordable and
practical solution to customers' energy needs."

One of the key successes of the DE program has been the establishment of
eight Regional Application Centers, covering all 50 states. These centers,
some just getting started, provide local guidance, tools, and training to
successfully apply DE - addressing the specific market issues that exist in
their regions. These Centers will be in serious jeopardy if Congress does
not maintain the necessary funding.

"Now is not the time for Congress to let our past investments be squandered
through lack of commitment to continued funding of this important program,"
said Jimison. "With continued commitment to funding the Federal
Government's DE activities, we can benefit fully from the safe, affordable
and reliable power offered by these systems."

The DE Caucus, EESI and Distributed Energy Coalition breakfast briefing is
free and open to the public. For additional information visit
http://nemw.org/news.htm#2, or contact Diane DeVaul, Northeast-Midwest
Institute, 202-464-4009, ddevaul@nemw.org or Theresa Murzyn, Environmental
and Energy Study Institute, 202-662-1884, tmurzyn@eesi.org.

About Distributed Energy Coalition : The DE Coalition brings together
manufacturers, utilities, industry, state governments, and non-governmental
entities who firmly believe that the Federal government is an essential
partner in the transformation of our electric infrastructure to a more
secure, flexible, efficient and growth oriented energy resource for the
21st century. For more information on the coalition contact Bruce Hedman
with Energy and Environmental Analysis, Inc. at 703-373-6632,
bhedman@eea-inc.com