Coal, Gas, Reciprocating Engines

Wartsila receives contract for the largest U.S. power plant to use natural gas-powered reciprocating engines

110 MW peaking plant to be built in Colorado

ANNAPOLIS, MD, August 1, 2001 — Wartsila announced today that it has received the largest order ever for PeakingPlus, a new breed of pre-engineered and pre-packaged gas-fired power plant.

PG&E National Energy Group (NEG), a Bethesda-based energy company, contracted with Wartsila for the installation of a turnkey 110-megawatt PeakingPlus plant located near the City of Plains End, CO, near Denver. PG&E NEG’s PeakingPlus plant, scheduled to begin operation in April 2002, will be the largest in the United States to use natural gas-powered reciprocating engines.

It will operate up to 6,000 hours per year, within 10 months from notice to proceed. The plant is based upon 20 of Wartsila’s 18V34SG natural gas engines, at 5.7 megawatts per unit.

“This deal is clear validation that PeakingPlus offers tremendous benefits over other power generation solutions. PeakingPlus was chosen for its fast delivery time and ability to operate at peak efficiency even at high altitudes – two criteria that many of the gas turbine power plants sold today cannot match,” commented Thomas M. Carbone, president of Wartsila North America. “Distributed power generation with PeakingPlus will help Plains End maintain its high level of service and low rates for electrical services, while mitigating the risks of power shortfalls.”

Introduced in October, 2000, PeakingPlus is a line of modular, ready-made power plants that allow users to generate their own power when electricity demand is at its highest (the peaking market). Wartsila has won eight orders for PeakingPlus plants, representing 325 megawatts, in the last six months – more than doubling its installed capacity in the United States.

Developed to address the unique peak and intermediate energy requirements of the United States, PeakingPlus is the first reciprocating engine plant tailored to the larger scale gas-fired peaking market. Compared to the gas turbines used in similar U.S. power plants, Wartsila’s reciprocating engines offer 50 percent faster delivery times; a scalable design that more closely matches most customer needs; no continuous water requirements; and an approximately 23 percent increase in efficiency.

Wartsila Corporation, based in Helsinki, Finland, is a major provider of solutions for distributed power generation, and a ship power supplier. Wartsila provides complete turnkey power plants ranging from one to 300 megawatts. The company’s natural gas-fired peaking power product is PeakingPlus, a line of modular pre-engineered and packaged plants. Wartsila’s network company in North America is headquartered in Annapolis, MD. For more information on Wartsila, visit the corporate Web site at www.wartsila.com.

With regional offices from coast to coast, PG&E National Energy Group is one of the nation’s competitive power producers, has natural gas facilities that connect major producing regions to some of the fastest-growing markets in North America, and operates one of the top energy trading businesses in the country. PG&E NEG’s power generation business has ownership and management interests in an operating generation portfolio of more than 7,000 megawatts and more than 10,000 megawatts in the new plant development and construction. Generation mix includes natural gas, hydroelectric, coal, waste coal, oil and wind power.

The PG&E National Energy Group is not the same company as Pacific Gas and Electric Company, the utility, and is not regulated by the California Public Utilities Commission. Customers of Pacific Gas and Electric Company do not have to buy products or services from the National Energy Group in order to continue to receive quality regulated services from Pacific Gas and Electric Company.