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Active Power Inc. begins shipment of Lower Power UPS to Caterpillar Inc.

AUSTIN, Texas, July 2, 2002 — Active Power Inc. announced recently that it has begun shipments of its new 150 kVA CleanSource® Uninterruptible Power Supply (UPS) product to Caterpillar® Inc.

Expanding the power range from the existing 250 through 900kVA battery-free UPS product offering, the CleanSource UPS 150 kVA will address a robust segment within the power quality industry. This lower power level is particularly well suited for broadcast television stations, healthcare facilities and small manufacturing operations that need to bridge the power gap until a generator starts.

“By extending the CleanSource UPS product line down to the 150 kVA power level we expand our addressable UPS market opportunity by nearly 50%,” said Joe Pinkerton, Chairman and CEO of Active Power, Inc. “This new product, coupled with the planned upward product line expansion slated for early next year, will approximately double the market opportunity for our CleanSource line.”

With hundreds of installations worldwide, CleanSource is a proven, reliable alternative to battery-based power quality systems. Integrated with CleanSource flywheel technology, CleanSource UPS provides state of the art power conditioning features including high-speed voltage regulation and active harmonics cancellation. When coupled with a standby generator, CleanSource UPS creates a complete continuous power system that will protect against extended power outages and rolling blackouts.

These systems are sold and serviced worldwide through Caterpillar Inc. under the brand name Cat® UPS (www.catups.com).