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Northern Power to build grid-connected on-site power system for complex in San Francisco

1.5 MW cogeneration system is first of its kind in San Francisco

SAN FRANCISCO & WAITSFIELD, VT, Nov. 5, 2002 — Vermont-based Northern Power Systems, Inc., announced recently that it has been commissioned to deliver an energy efficient, on-site power system to the One Market Street office complex in downtown San Francisco, owned by Equity Office Properties Trust.

Equity Office is the nation’s largest publicly held office building owner and manager with a portfolio of 767 buildings comprising 127.4 million square feet in 21 states and the District of Columbia. With 1.5 million square feet of commercial space occupying an entire city block, One Market is one of the premier office buildings in San Francisco’s financial district.

When the 1.5 megawatt system is completed early next year, it will become what is believed to be the first commercial on-site electric power system to be fully interconnected with Pacific Gas & Electric’s downtown San Francisco electricity grid.

The advanced cogeneration system consists of three natural gas-fired generators and a sophisticated heat recovery process, which converts waste heat from the generators and their exhausts into steam. The steam will be used to heat the building. Northern is providing overall system design, engineering and commissioning. Northern is also supplying the generators and an automated control system designed to maximize system efficiency.

Northern believes that this will be the first cogeneration system to be interconnected to the downtown San Francisco utility grid in full compliance with the Pacific Gas & Electric’s Rule 21 Interconnection Standards. Running in parallel with the utility grid allows the system to meet as much of the building’s electricity demand as possible, while the utility meets any needs in excess of the system’s capacity.

By running near full capacity, the system delivers maximum electrical efficiency. Northern’s integrated control system also maximizes utilization of the waste heat from the generators, further increasing overall system efficiency.

The City of San Francisco is diligently working to find solutions for projected electricity supply shortages and transmission constraints within the next five years. This will be accomplished by developing sufficient replacement power through a combination of peak load reduction, energy efficiency, renewable energy, and other on-site generation technologies. Distributed generation as developed by Northern plays a key role in the plan, which can be downloaded at http://www.sfwater.org

“It is important to the City of San Francisco that building owners like EOP are successful in implementing on-site generation,” said Ed Smeloff, head of San Francisco’s Public Utilities Commission. “With this project, Northern is implementing the type of clean, reliable distributed generation system that our “Electricity Resource Plan” outlines as one of the strategic solutions to San Francisco’s energy challenges.”

The cogeneration system, scheduled for installation in February 2003, can deliver up to 30% of One Market’s electricity and 85% of its steam needs for its space heating system.

Northern’s power system is also considered a “green” system. In recovering waste heat, the system’s overall fuel efficiency rises to approximately 60%, compared to typical efficiencies of 30% from utility-produced power. Doubling fuel efficiency can reduce greenhouse gas emissions by up to 40%.

These higher fuel efficiencies also qualify Equity Office’s new system for an incentive rebate from the Self-Generation Incentive Program of the California Public Utility Commission (CPUC). This program was established in 2001 to encourage on-site generation to reduce peak demand and avoid rolling blackouts such as those recently experienced by the state.

“Equity Office is leading the commercial real estate market in actively implementing power solutions that make sense from a power security and from an environmental standpoint,” said Thomas Smith, Vice President of Energy Operations at Equity Office. “Teaming with Northern Power Systems to create this innovative approach to energy supply is fully consistent with our commitment to maintaining superior quality of service to our tenants, improving the efficiency of our systems, and lessening the impact of our operations on the environment.”

Jito Coleman, president and CEO of Northern, stated, “We are fortunate to work with a company whose people recognize that power security and environmental benefit are not mutually exclusive. All of us at Northern are happy to help Equity Office reach its goals through the design and installation of this innovative and highly efficient cogeneration system.”

ABOUT NORTHERN POWER SYSTEMS

Northern Power Systems designs, builds, and installs highly reliable, state-of-the-art power solutions for industrial, commercial, government, and not-for-profit customers using a full range of thoroughly tested technologies, including wind, photovoltaic, natural gas and hybrid fossil/renewable power systems.

For more than 25 years, Northern has provided turnkey services to fulfill the needs of diverse customers. The company has installed over 800 systems on all seven continents, earning a worldwide reputation for delivering high quality, technically superior power solutions. Northern’s systems are time-tested and reliable-from the harshest and most remote locations on earth to densely populated urban sites. Additional information can be obtained at the company’s Web site: www.northernpower.com.