NZ Legacy and Renegy Holdings Announce Option to Acquire Biomass Plant

Market Wire, September, 2007

NZ Legacy, LLC and Renegy Holdings, Inc., a wholly owned subsidiary of Catalytica Energy Systems, Inc. (NASDAQ: CESI), announced today that they have jointly entered into a 60-day purchase option agreement with a leading forest products and timber company for the acquisition of a biomass plant for $1.3 million. The plant includes a boiler capable of producing 160,000 pounds per hour of steam and a turbine that can generate approximately 13 megawatts (MW) of electricity. The purchase option will be assigned to Renegy Holdings, Inc. (Renegy) upon completion of a proposed business combination of Catalytica Energy Systems with the renewable energy divisions of NZ Legacy, which is scheduled to be considered during a Special Meeting of Stockholders of Catalytica Energy Systems, Inc. on September 27, 2007.

Over the next sixty days, the Companies will explore the most suitable location for operating the plant, either at its current site in California or at another site. If the plant is maintained in its current location, the Companies estimate that it could be operational as early as the first half of 2008. The final site determination will be based upon long-term fuel availability in the form of wood waste. Depending upon location and site-specific costs, the Companies anticipate investing as much as $12.0 to $15.0 million to purchase, refurbish and recommission the plant. Securing a long-term power purchase agreement with a utility company for the entire power output of the plant will also be a condition of executing a definitive purchase agreement. NZ Legacy is already in discussions with utility companies relating to long-term power purchase agreements for a plant of this size as well as future energy facilities, and has identified several prospective sites for future plants, including sites suitable for this plant if relocated. Further, NZ Legacy has had discussions with several financial partners to provide debt financing for the project. In the event that Catalytica Energy Systems' proposed business combination with the renewable energy divisions of NZ Legacy is not completed, Catalytica will not have any material obligations under the option agreement.

Robert Worsley, president and CEO of NZ Legacy, stated, "We seek to build a growing portfolio of biomass energy facilities within the next five years through acquisitions, construction, installation and operation. Securing the rights to acquire this plant demonstrates a first step toward our pursuit of a rapid growth strategy, and provides us with an opportunity to add approximately 13 MW of power output to the 24 MW that will be generated by our first biomass facility, which is nearing completion near Snowflake, Arizona. In addition to the potential of having two plants fully operational next year, the economics of this purchase option are very compelling on a cost per kilowatt basis. Including acquisition costs, we estimate the cost of refurbishing and commissioning this plant at less than $1,150 per kilowatt, whereas the cost to build a new plant could approximate as much as $2,500 per kilowatt."

Biomass energy is energy from the sun captured in organic materials such as wood waste and other plant matter. Biomass facilities harness the energy stored in organic materials derived from agricultural waste materials, forestry waste materials, and urban waste to produce clean, renewable power. Biomass power plants use this material for fuel, burning it under controlled conditions to generate electricity. In addition to diverting waste from already over-burdened landfills, biomass facilities are also valued for their negative greenhouse gas footprint as they displace more potent greenhouse gas emissions of methane that would otherwise result from the usual disposal options such as landfill accumulation, forest accumulation or composting. Methane, which results from the decomposition and decaying of organic materials, is 15 to 20 times more damaging to the earth's atmosphere than the carbon dioxide (CO2) produced during combustion. Biomass facilities are also considered to be carbon neutral as CO2 emissions generated by combustion is generally offset by the CO2 emissions consumed during the lifecycle of plant material. By comparison, the CO2 emissions released from the combustion of fossil fuels (such as coal, oil and natural gas) add to the imbalance of carbon emissions in our atmosphere, which contributes to global warming. Furthermore, today's biomass facilities are outfitted with state-of-the-art pollution control equipment to reduce other air pollutants such as particulate matter and nitrogen oxides (NOx) that would otherwise result from the open burning of biomass.

About NZ Legacy

NZ Legacy, based in Mesa, Arizona, is a privately held Arizona land, mineral and energy development company. NZ Legacy owns 86,000 acres of Arizona and New Mexico land and more than one million acres of mineral rights spread across Arizona, New Mexico and Colorado. Robert Worsley, owner, president and CEO of NZ Legacy, purchased the rural land assets of New Mexico and Arizona Land Company, Inc. in March 2002 and subsequently formed NZ Legacy and its fifteen operating subsidiaries, including three focused on renewable energy projects and harvesting biomass material -- Snowflake White Mountain Power, LLC, Renegy, LLC, and Renegy Trucking, LLC. Find NZ Legacy on the Worldwide Web at www.NZLegacy.com .