Environmental Power Corp. Subsidiary Developing Fourth Renewable Natural Gas Production Facility at Hereford, Texas, Dairy

Energy Resource, August 23, 2006

ENERGY RESOURCE-23 August 2006-Environmental Power Corp. Subsidiary Developing Fourth Renewable Natural Gas Production Facility at Hereford, Texas, Dairy(C)2006 JeraOne - http://www.jeraone.com

Renewable biofuels company Environmental Power Corporation today announced that its subsidiary, Microgy Inc., is developing its fourth large-scale, pipeline-quality renewable natural gas production facility at the Cnossen Dairy in Hereford, Texas.

Together with the Huckabay Ridge project, currently in construction, and the Mission Dairy and Rio Leche projects, also in development, the project is expected to increase Microgy's estimated annual RNG production capacity to approximately 2.6 million MMBTU annually when all facilities are completed.

The planned Cnossen facility will be Microgy's fourth installation to use its standardized, large-scale, eight-digester design, and will mirror the company's Huckabay Ridge facility under construction in Stephenville, Texas.

The Cnossen facility, now entering the permitting stage, will process the waste from approximately 10,000 cattle, as well as other food industry waste. Once completed, Microgy's Cnossen facility will generate an estimated 650,000 MMBTU of pipeline-grade RNG annually -- enough to heat approximately 11,000 homes -- which will be compressed and delivered directly to a natural gas pipeline.

An affiliate of Microgy has entered into agreements with Cnossen Dairy for the siting of the facility and the supply of manure for processing by the facility. Cnossen Dairy is a new, advanced production dairy, permitted for up to 14,000 cows and using the latest technologies "to maximize efficiency and minimize environmental impact," the company said.

"The planned Cnossen facility demonstrates our commitment to a strategy of deploying our modular, multi-digester design in order to increase RNG production capacity under our control," said Richard Kessel, CEO of Environmental Power. "Texas and other regions with large populations of cattle or swine are important markets for us, representing significant opportunities for the creation of profitable, RNG production facilities that deliver a 'green' natural gas equivalent.

"Our strategy is to accumulate RNG production capacity and to work with gas marketers to develop the best strategy to market our RNG so as to maximize the value of this unique product," Kessel said.

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